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 You suppose Mark Ford was right when he wrote, "The desire to work less is not a vice but a fundamental aspect of emotional intelligence. When combined with commitment, persistence, and common sense, it creates economic efficiency, an essential component of building great wealth." The only thing left to do, then, is decide what you want to do with the wealth you've earned.
+====== How to Start a Million Dollar Business Series for $25,000 #26: How to Make Business Deals That Last ======
+If you think making good business deals is all about driving hard bargains and writing binding contracts, you are thinking with half your brain.
+There are times when being tough and tenacious is necessary. But there are also times when you have to be soft and flexible, too.
+Like everything in life, being a good dealmaker requires both the yin and the yang.
+Yes, you may be able to get what you want by acting the bully or by strategically backing the other person into a corner. But that sort of approach to dealmaking can and probably will backfire on you - if not immediately, then almost certainly over time.
+JSN, the man who first taught me (and helped me) get rich, was a ruthlessly 'successful' negotiator and was widely known for his ability to get business associates to agree to his terms. And he was quick to follow up on those agreements with iron-clad contracts that bound them to those deals. The combination of the two almost always resulted in an advantageous position. Later on, after the ink had dried, people often regretted what they had agreed to. JSN felt that was "on them." It never felt right to me.
+By watching what he did, I came to understand how he was so effective in negotiating deals. It was a combination of being prepared and employing negotiating "tricks" and sheer force of will. But when it came time to make my own deals, I rarely followed his example. Partly, as I said, because it didn't feel right, but also because I saw the long-term effect of his approach, which was generally bad.
+What happened was this: In four cases out of five, the deals fell apart after it became clear that the other person had gotten the short end of the stick. This was true even though the contracts were very clear.
+Business partners who felt outmaneuvered found ways to circumvent the agreed-upon terms. Or they simply reneged. Battling it out in court? JSN tried that once or twice. It was very expensive and ultimately fruitless.
+Meanwhile, with each dispute, his reputation as someone 'you don't want to do business with' widened. Eventually, his window of opportunities got very narrow.
+I'm not against preparation and strategy when it comes to negotiating deals. But the goal should always be to make win-win deals, not to 'take care of number one.'
+And that is not even enough. If you want to have the best success at making great business deals, you have to be able to change the deals you make if and when, for whatever reason, they become unfair to your partners.
+I've done that many times. I've taken less and given more when it was clear to me that the original deal was no longer fair. In most cases I made those adjustments before they were asked for. My reasoning was simple: If I wanted the deal to last, then I had to demonstrate at all times that I could be fair.
+What I'm saying, in short, is this: Negotiate only win-win business deals and be prepared to change them if and when they become unfair to your partners.
+You would be right to wonder whether, given my views on making deals, there is any reason at all for written contracts. You may think, 'Wouldn't it just be better to make all relationships oral, non-obligatory, and temporary?'
+The answer is no.
+I do believe in using contracts. But their purpose should be primarily to define expectations and anticipate change, not enforce whatever decisions seem right at the time.
+Here's an example:
+You and I come together to start a business. I have the money and the knowledge to get the business going, but I don't have the time. You have the time, but neither the money nor the knowledge.
+The natural course of this sort of business relationship is going to be one-sided one way for several years...and then one-sided the other way for many years thereafter.
+In the beginning, I'm going to be providing most of the value - in terms of money and knowledge. Once the business has matured, you are going to be providing most of the value. In fact, I'll be providing little if anything at all.
+Still, we might say that a fair deal for such a situation, assuming you are going to be paid a salary from the business, is that we are going to be partners for life. I couldn't get the business going without you, and you would never be in the business without me. I am giving you the chance of a lifetime, and you are giving me the means to add to my wealth.
+In such a case, we might have a contract that lays out the framework for a 'fair' deal. We might, for example, allocate a salary to you from the beginning that increases, according to some arms-length parameter, as your skills improve. In addition, we could include a bonus based on the company's profits. The equity and profit distribution could be 50/50.
+This is a deal that will seem generous to me and fine to you when we first make it. But years later, when you are doing all the work and the business doesn't need my money or knowledge anymore (when, in fact, your knowledge will have exceeded mine), the 50/50 part may no longer seem fair.
+That's why you have a written contract instead of just a handshake agreement. You negotiate for fairness in the beginning - and you use the contract later to remind you of why you thought the deal was fair.
+Memorials, Not Guns
+MT has written more contracts for me than anyone else. He's not only one of the most capable attorneys I know, he's also a great natural businessman. Here's what he has to say about contracts:
+Contract law is more esoteric than you might imagine. Judges first must ask (and this is the standard contract question), "Did the parties have a meeting of the minds?" In my law school days, I thought to myself that this sounded more like Star Trek than what I thought law would sound like. But it's true: For a contract to be valid, it must first show that there was a "meeting of the minds." And this means your language cannot be ambiguous. The terms must be clear. The exit strategies must be straightforward. The payment terms cannot be based on conditions that are unclear. In short, clarity is the key. If not, the other side says, "Well, Your Honor, I understood the language to mean this and not what he said." And if the language is unclear, your contract may not be a contract after all. The judge may say, "Well, there was no meeting of the minds here, and I can see why - because the language was ambiguous. I hereby rule the contract null and void, since it was never truly formed."
+As for creating one-sided contracts and thinking you're getting away with something, I could not agree more with Mark Ford. Legally, a one-sided contract only leads to breaches and litigation. Make a contract clear and fair, and you've got yourself a good deal. In the end, the process of signing a contract is really just a way to ensure that each party understands the deal. It's a 'memorial,' not a future gun. Memorials make money. Guns kill.
+Three Things a Good Contract Must Have
+What I said about formal business contracts applies to informal contracts, too.
+Say you make a deal with your employees: Sell 100 tickets to the conference and we'll take you to Las Vegas.
+It's a great promise. And it serves its initial purpose of motivating them. But you have to clearly articulate the deal - and put it in writing. (Are those fully paid tickets? What about cancelations? How many days? What kind of hotel? Who pays the mini-bar? And so on.)
+If you don't do that, the original incentive, which was meant to produce sales and increase morale, could actually backfire.
+So when it comes time to make an agreement, here are four things a good contract should include:
+A clear explanation as to why the deal, as agreed to, is fair, along with the principles of fairness that govern the deal.
+Clear and detailed examples of who gets how much for doing what.
+Contingencies for when things change - as they inevitably will. A well-written contract should serve as a very useful tool to make any adjustments that are necessary. (Assuming, that is, both parties are still operating in good faith.)
+A clear description of what would terminate the agreement.
+Make fair deals - and document them in writing. And remember that the purpose of a contract should never be to enforce an unfair deal...but to remind you of how and in what specific ways you thought the deal was fair in the beginning.
+====== How to Start a Million Dollar Business Series for $25,000 #27: The Most Powerful Way to Break Into a New Market ======
+Let me tell you a business principle that is behind many - if not most - of the world's America's greatest business fortunes.
+It is amazingly obvious but often ignored. Yet it is the most powerful and reliable way to break into an existing market and make your small business grow.
+Here's the secret I'm talking about: In an established market, nothing sells better than price.
+If you have a relatively good (or better) product and you want to sell into a strong, competitive market, then you would be wise to sell your product at a much better (i.e., cheaper) price than the competition...
+Let's look at history. Consider how many billion-dollar fortunes were created by cheap pricing.
+Rockefeller dominated the oil industry by buying up production and delivery. Doing this allowed him to offer oil and gas at prices his competitors couldn't touch. By keeping the prices of these fuels relatively low during his reign, Standard Oil increased the size of the fuels market in a huge way. Because oil and gas were cheap, people used more of them.
+Likewise, Andrew Carnegie made a fortune by producing inexpensive steel. Sam Walton is known for his discount stores (Walmart). Henry Ford for making autos within financial reach of the average person.
+To break into a competitive market, you need either (a) a big advertising budget (to establish demand for your product/service) combined with a superior-in-some-way product... Or (b) a way to sell your product/service CHEAP so word will spread on its own.
+While the Tatas and Reliances can use the first strategy, for most small businesses, (b) makes more sense.
+This may seem too obvious to mention, yet you're not likely to find it in business seminars, audiotapes, or marketing books. I simply don't remember reading or hearing advice of this sort - ever.
+I remember when I first got into the newsletter business. I was hired to improve the quality of the newsletters themselves - as editorial director.
+The marketing director had created a growth strategy based on the one used by the large company she came from. She favoured expensive products and high prices. We were going nowhere.
+One day, my boss came into my office to tell me he had fired this woman. I had already decided I wanted to be his most valuable employee, so I was eager to offer to help him do what she did not do: grow the business in leaps and bounds.
+We spent a month studying the market and determined that the fastest-growing area was publishing investment advice. We spent the next few months closing and selling our business newsletters. We replaced them with ones that analyzed and recommended stocks and bonds.
+Since I was new to that world, I couldn't help my boss make better products. But I did conspire with him to make facsimiles of the best-selling investment newsletters at the time and embraced his idea of selling them at a steeply lower price.
+At that time, investment newsletters were selling for between $99 and $198. We came out asking for only $39.
+Our competitors were not happy. But it worked wonders for us. We were profitable almost immediately.
+Within 12 months, the business went from less than $500,000 in revenues to more than $5 million. Five years later, we were one of the largest newsletter publishers in our industry. Our sales topped $50 million.
+Those early newsletters were, frankly, not all that great. I did my best to make them as good as the competition, but looking back now I can see how far from the mark they were.
+Nevertheless, our marketing, which emphasized our low price, won the day.
+How does this apply to you?
+If you are starting a new business or thinking of starting one in a competitive market, you'd be crazy not to make this concept a core part of your marketing strategy.
+Or if your business is mature but flagging, coming out with a super-cheap version of what you sell now (but under a different brand, of course) could be the Gravy Train ticket you are looking for.
+Take a look at your lead product(s) - the one or ones that bring in most of your new customers. Ask how are they priced in relation to the rest of the market.
+If you don't have at least one product that is super cheap, think about developing and selling one. There are problems and pitfalls with selling price, but when it comes to breaking into (or breaking back into) a competitive market, price almost always wins the race.
+====== How to Start a Million Dollar Business Series for $25,000 #28: The Second Most Powerful Way to Break Into a Competitive Market ======
+In a previous essay, I talked about price competition - and why in some situations nothing else is more powerful to the success of a new business. When the market is sizable and competitive, underpricing the competition with a new product is simply the best (if not the most obvious) way of getting the attention (and buyers) you want.
+Today, let's talk about another related business-building secret - one that's nearly as important, yet sometimes overlooked. It is a secret you can use in conjunction with 'selling price.'
+I was reminded of this secret while shopping with my wife in New York City some years ago. She took me to H&M, a very hot European department store that had recently opened in America.
+From the outside, it could have been any one of a dozen upscale stores on Fifth Avenue. Inside, the place was jamming. There were literally thousands of shoppers on the first floor alone. The cash registers were smoking.
+If you have been inside an H&M store in India you will be familiar with this scene.
+Since none of the stores we had previously visited that day were doing much business, I wanted to know why H&M was so packed. It was more than just the novelty of a new store.
+I bumped into the answer almost immediately. Someone brushed by me and knocked me into a mannequin on a pedestal. It was a male figure outfitted in a lemon-yellow papier-mâche-type shirt and lime-green, calf-length parachute pants. Very trendy.
+The styles I was looking at - the materials, the colors, the cuts - were just what you'd expect to see at Gucci, Fendi, or Versace. But when I looked at the price tags, I was shocked.
+Instead of $250 or $300 for the shirt, the ticket said $18! And instead of $150 to $250 for the pants, the price was $13!
+It was one of those wonderful moments of dumb epiphany - realizing in a profound way something that is profoundly simple. H&M entered America the right way: with steep discounts. But they are also selling into a large and growing demand.
+H&M does not feature standard brands. The stylish clothes I saw on the first floor were all trendy knock-offs manufactured in Indonesia. In place of name brands, they sell style - the look of famous designers for a fraction of the price.
+This is an entirely different tactic than that employed by many discount department stores that sell off-brand and out-of-date clothing at discounts. (How many near-empty discount department stores have you wandered through where the clothing is so unappealing, you wouldn't be paid to wear it?)
+H&M took a double-barreled approach: hot and trendy, in-demand products sold for amazingly cheap prices.
+This is not an easy combination to achieve. But it can be done. If you are observant, you can easily identify what products are hot and, if you are clever, you can figure out how to make and sell them cheap.
+H&M's strategy was a bit like what the Japanese carmakers did when they decided to enter the luxury car market. Rather than creating styles of their own or coming up with something mundane like a Japanese Cadillac, the Japanese went right after the world's hottest luxury car manufacturers-BMW, Jaguar, and Mercedes. They knocked them off (both in terms of style and performance) and introduced the Lexus, Infiniti, and the Acura NSX.
+Now Americans could drive the cars they had always wanted but for half price. It was an irresistible offer. The Japanese quickly dominated the market.
+So if you have decided to use price as your entry into a vibrant, competitive market, give yourself a huge additional advantage by shaping your product into something that is currently in strong demand.
+Put differently, resist the egoistic urge to sell something that is 'the best' or 'unique and different.' Instead, figure out exactly what people currently want most... and give it to them... cheap.
+If you can do that, then your marketing will be stronger and cheaper. And when word gets out - and it will - that people can get what they want most for an affordable price, they will come knocking down your doors, like they were doing every day at H&M.
+(I need to clarify one point. By selling into the trend, I don't mean selling things that are ultra trendy. The appeal of far-out, avant-garde stuff is very restricted. If you want to gain market share in a big market, you need to select the big, long-term trends.)
+It seems to me that this strategy applies to most markets at most times. If, for example, you are starting a restaurant on a street where there are four steakhouses, you wouldn't specialize in Turkish cuisine. You'd sell steak, but cheaper.
+If you are starting a travel, tour, or conference business, you wouldn't feature discounted trips to Albania and Pretoria. You'd sell London and Paris and Orlando.
+In every business, no matter how mundane, there are trends. If you are naturally contrary, as I am, you might be tempted to swim against the stream. Don't. Find out what's hot. Figure out how you can sell it cheaper than anybody else. Later on, when you have a strong foothold and solid profits, you can develop higher-priced, specialized back-end products - even lines of products.
+In business, as in the stock market, the trend is definitely your friend.
+====== How to Start a Million Dollar Business Series for $25,000 #29: How to Knock Off Your Employer and Start Your Own Business ======
+Two engineers, Fahri Diner and Xiang-Dong Cao, were the 'brains behind [a] Billion Dollar Deal.'
+They were sitting around after work having tea (I'm making up the details) and complaining about their employer, Siemens Information and Communication Networks in Boca Raton, Florida.
+Cao was saying that their bosses did not properly appreciate them. Diner replied, 'Hell, we should start our own business.''
+'You're damn right,' Cao replied.
+Several months later, they said goodbye to their employer and moved into a dusty warehouse. They telephoned former colleagues until they found two willing to work for them for stock.
+With this meager core of four, they started their own fiber optics transmission company, doing essentially the same thing they were doing before but with a few of their own improvements.
+In a few short months, they had gone from wage-earning employees to brave new entrepreneurs.
+How I Became an Entrepreneur
+My first real job was 'backseat wiper man' at the Rockville Centre Car Wash on Long Island. I was 14 and happy with the $1.25/hr they paid me.
+A couple years later, when I was working as a house painter's assistant in swank Hewlett Harbor, a 20-minute drive from my home (a ramshackle house literally on the other side of the tracks), I became an entrepreneur.
+Well... a chicken entrepreneur.
+What happened was this: My friend Peter and I were scraping the shingles of a big yellow mansion - I can still remember the details - when the lady of the house, a Mrs Bernstein, came out asking for Armando, our boss. Armando's routine was to drop us off at the work site at 7:00 a.m. and disappear until 5 or 6 in the evening.
+We were left to do the work, with virtually no experience and only Armando's advice on watering down paint and 'dry rolling' the second coat to guide us.
+(In case you're about to get your house painted...dry rolling is when your painters pretend to be giving you a second coat when in fact the rollers are dry. This allows them to get the job done twice as fast and save a bundle on the cost of paint.)
+'I'm onto your boss,' Mrs. Bernstein said. 'How much does that cheap bastard pay you?' We told her. She harrumphed and disappeared inside. When she came out a half-hour later, she announced, 'I just fired that good-for-nothing. And if you know what's good for you, you'll be here Monday morning. I'll pay you an extra dollar an hour to finish this job properly.'
+Some other time, I'll tell you what happened when Armando discovered our duplicity.
+But the point of this little memoir is to illustrate how I accidentally started working for myself...and to highlight an important principle of wealth building.
+Starting your own business is a scary process. You give up a steady income and go without any assurances for an unknown period of time. You risk embarrassment and failure. Most people - and I mean 99 out of 100 - don't have the brass for it.
+I didn't. But I was lucky. Mrs. Bernstein gave me the impetus I needed. Had it not been for her, I might be a college teacher today, earning a modest living and complaining about the administration.
+New Shoots From an Old Vine
+I wonder how many new businesses start this way - as new shoots from an existing vine. Many, I'd guess. Even most.
+The advantage of doing this is clear. Spinning off from an existing enterprise gets you past two of the biggest hurdles facing new ventures: knowledge and contacts.
+Having the right contacts - vendors, marketers, and consultants - is equally as important as having knowledge.
+The great thing about starting a business you're already in is that you can gain the knowledge and make the contacts while you're still an employee.
+Start by 'promoting' yourself. Do the job you want, not the job you have. Learn everything about it. Find out what makes your business grow, how your sales are made, and what, if anything, makes your product or service special.
+Also very important:
+Figure out what is less than perfect about the business you are in.
+Get friendly with the key suppliers, bankers, and consultants your business uses.
+After doing these things, you are only one decision away from going off on your own.
+This is basically what Diner and Cao did. Within days after jumping ship, they had an ongoing business competing with their former employer.
+Two years later, their company, a developer of high-speed fiber optics transmission equipment, was acquired by Nortel for $3.25 billion.
+Steps to Knocking Off a Business
+No, you don't have to be a self-starter to have your own business. You can start as a wage coolie, just as Diner and Cao did, and take advantage of what you have to create an opportunity for yourself later.
+Interested? Here's what you need to do:
+Learn everything you can about your business, especially how sales are made and what, if anything, is unique about the product or service you provide. Read about business. Take seminars. Educate yourself.
+Become known as a 'can-do' employee. You will attract good people, individuals you may want to team up with later.
+Figure out how to make your company's products or services better. This will become the key to your eventual success. When you go out on your own, you want what MBAs call a 'competitive advantage,' something you do better than your former employer can.
+Start saving. You are going to need a bank account to get you by, even if you find a venture capital partner. Try to stash at least 10% of your take-home pay. Twenty percent would be better. If this is not possible, consider - seriously - a weekend or evening job.
+====== How to Start a Million Dollar Business Series for $25,000 #30: The One Sales Strategy That You Can't Avoid ======
+An "urgent" email I got I from the CEO of small movie production company I have a small stake in:
+...Growth is so good that we're struggling to keep up. We find ourselves in a cash-strapped position created by cash flow issues (specifically, the production and printing of books required to meet our growth), so we're exploring our options to ensure we do the right thing for our authors and community.
+There's a strong probability that a pool of Hollywood executives will invest about $500,000 in our business within the next few weeks.
+$500,000 creates the working capital we need to bridge our cash flow gap and then some. By using this cash to grow, we'll be able to pay back these investors - with a nice return on top.
+We've been doing this already for our early investors - in fact, last year, we returned 47% of profits to our funders.
+That's why this opportunity is closing very soon. There is huge interest in it, and we definitely won't need this money forever.
+If you want to become a shareholder in an amazing and growing business... you need to respond immediately - like today. I'm sending this to you because you are a friend and colleague, and I wanted you to have first shot at it.
+As a teacher of sales and marketing, I was impressed with the pitch. It had all the required components. A big promise, a story to make it more real, several relevant "facts" to back up the promise, a "velvet rope" invitation, and a sense of urgency.
+As an investor, I had a different response. I responded immediately. I said no.
+There were a number of small indicators in the email that made me doubt the promise and the proof. But the no-brainer no-thank-you for me was the requirement to act "today."
+When someone tells me I have to make an investment decision quickly, alarm bells ring in the planes of my limbic brain.
+I've fallen for urgent investment deals in the past. None that I can remember worked out well.
+Creating a sense of urgency is a time-honoured selling technique. It is used by marketing and sales pros from top (private jets) to bottom (used cars).
+It's also a very common technique used by the investment industry.
+I'm not saying there aren't good deals that require an urgent response. I'm saying, in my experience, nine out of 10 of them are bogus.
+So my default position when "given an investment opportunity" with an urgent deadline is to ignore the call for action and politely explain how much time it would take me to analyze such a deal. Most of the time, that's all I need to say.
+Saying no to all act-now opportunities might mean I'll miss out on a good deal from time to time. But my goal as a wealth builder is not to get in on every good deal. My goal, as always, is to invest in deals where there is little or no chance of losing my money!
+When you first say no to a great but urgent moneymaking opportunity, you may feel conflicted. You may fear missing out on something that could be a once-in-a-decade deal. But after you've done it a few times, that anxiety will diminish or disappear. You will look at deals like passing trains. If you miss one, another will soon be coming by.
+Okay, that's the most important takeaway you should have gotten from this message.
+But let's take this a step further. Let's look at the techniques he used to make his pitch so enticing. Let's take a look at them so you will be alert to them the next time someone comes to you with an urgent opportunity.
+The Anatomy of a Sale
+In his email, my CEO "friend" and colleague used a thinly veiled suite of marketing tactics that - however impervious I was to them - will work on most prospects.
+So if you are interested in becoming a better marketer, here's a chance to learn something (new or already learned) that can improve your game.
+Let's look at five of the sales tactics used here: promise, specificity, proof, scarcity, and urgency.
+Let's begin with the promise.
+We've been doing this already for our early investors - in fact, last year, we returned 47% of profits to our funders.
+The CEO, here, is conveying an indirect promise: that my investment might give me a return as high as 47%.
+That's a big promise. Generally speaking, big promises outsell small ones.
+And notice: The promise isn't 50%... It's 47%. That precise number, not rounded, makes the promise more believable. It doesn't sound made up. It sounds like it came from a spreadsheet - perhaps even an audited spreadsheet. That's the power of specificity.
+That sort of specificity feels like proof.
+And finally, scarcity and urgency are created very efficiently with this:
+There's a strong probability that a pool of Hollywood executives will invest about $500,000 in our business within the next few weeks.
+My friend the CEO is giving me a big opportunity that I'm very lucky to be offered, because the last time this was done, investors made a huge return. Of course, the insiders already know about this and are begging to get in. So I must act now!
+Since I've long ago learned never to "act" when they say, I don't have to worry about what I should do.
+But after spending a few more minutes looking at the email, I find some problems with the pitch.
+The promise is definitely big. And it is also specific. But is it believable?
+It's impossible to say for sure, but you have to ask: If this business has been doing as well as the CEO says in the beginning of the pitch, why are they running out of money now?
+He doesn't answer that question. That's disturbing.
+Then you have the story about "the Hollywood executives" clamoring for this deal. He doesn't give you names. But it would be nice if he did. You could call them and see what they think.
+As far as scarcity and urgency are concerned, his proof is vague at best. Again, it is this unnamed group of Hollywood executives and their commitment isn't certain. It's a "strong probability."
+This is the language of a certain type of selling. In common parlance, it is called bullshit.
+I'm not knocking these techniques. Salespeople - whether working for the biggest companies or slinging watches on a street corner - have been using these tactics for centuries.
+Most do it to bring in new customers. When done honestly and well, it spurs commerce and leaves everyone richer and happier. But make no mistake-all the wealth stealers out there who want to separate you from your hard-won money use these same techniques.
+Some of these techniques were identified and explained in Robert Cialdini's best-selling book, Influence.
+It's not by any means the final word on sales and marketing (although many journeymen think so). But it is good.
+In Influence, Cialdini breaks down six core psychological "Weapons of Influence" that marketers and salespeople use:
+Exchange of Value - This one's simple. People are more inclined to return favors than make them outright. Framing a pitch as a "favor" will generally cause the target to reciprocate it. Offering you something lets the salesman get a foot in the door.
+Making and Keeping Promises - People almost always hate to back out on a promise. Getting a customer to commit to something, even something free, can feed their interest in a product.
+Crowdsourced Verification - If others are doing it, it must be worthwhile. This is why sitcoms have laugh tracks: Hearing laughter and applause makes you want to do the same, so you fit in with the crowd. People need social proof to verify a common value. A good example is user reviews and testimonials. Seeing other people enjoying something will make you regard it more highly.
+Silver-Tongued Devilry - Anything a salesperson can do to make the customer like them is sure to amplify their chance of success. Flattery goes a long way here, and it can be seen quite clearly in the last line of the CEO's email above.
+The Allure of Expertise - No potential customer is going to buy in to an opportunity if they suspect the salesperson doesn't know their stuff. Credentials and an impressive backstory are often enough to reel someone in. To avoid getting taken advantage of here, always do your research before committing to something, and stick to things you understand.
+Constricted Demand - This is the key tactic used in the CEO's message above. People place more value on things that are scarce, in short supply, or only available for a short time. Salespeople use this to make a product seem special, even if it's readily available to anyone.
+Becoming familiar with these six marketing tools (as well as others mentioned above) will make you a better entrepreneur and marketer. But more important to me today is that they could make you a much better investor.
+Wealth seekers who swing for the fences sometimes get lucky. But most of the time, they strike out.
+If you want to get wealthy the way I did - very, very safely - you will learn to recognize sales techniques and resist them... most especially the trick of creating a false sense of urgency.
+====== How to Start a Million Dollar Business Series for $25,000 #31: Match the Business to the Market with Keyword Research ======
+"Desperate to escape her hand-to-mouth existence in one of the poorest regions of Brazil, Maria Benedita Sousa used a small loan five years ago to buy two sewing machines and start her own business making women's underwear," The New York Times reported.
+Today, her business is thriving. She employs 25 people and produces 55,000 pairs of cotton panties a month. With the income she's earning, she has bought and renovated a house for her family and a car. Her daughter, who is studying nursing, will be the first family member to finish college.
+Sousa is living the entrepreneurial dream. "You can't imagine the happiness I am feeling," she said. "I am someone who came from the countryside to the city. I battled and battled and today my children are studying with one in college and two others already in school. It was a gift from God."
+A gift from God? I don't know about that. But I do know that it was partly due to a loan she got from a private bank - that and her ambition, her persistence, and her instinct to start a business she already understood. We've talked about that many times in WBC. I've written about it in almost every one of my books.
+If you want to have the best possible chance of making your new business work, learn about it from the inside before you start. Sousa did exactly that. Before creating her own clothing business, she worked for minimum wage sewing clothes for someone else's clothing business.
+By the way, Sousa doesn't begrudge the years she worked for a dollar an hour. She was happy to get the work when she had none, happy to earn the money so she could help pay the family's bills and - most important - she is grateful she had the chance to acquire the skills she uses today to run her business.
+Sousa's story is a life lesson in Ready, Fire, Aim too. She didn't wait till everything was ready before she set up shop. She didn't have any training in business. She didn't have a facility to work in or any sewing equipment. All she had were the skills she'd developed from working and the money she got from a micro lending institution.
+And she had one more thing: She got into the right business at the right time.
+This is the aspect of the story I want to highlight.
+Sousa was successful because she did all the things we talk about all the time in WBC: She set and pursued goals. She acquired financially valuable skills. She took a Ready, Fire, Aim approach to her business. But the reason her business did so well - grew so quickly from a one-women operation to employ 25 people - is because she went into the right business at the right time.
+Business gurus like to tell people that you can be successful at any business, so long as you do X or Y or Z. But the hard truth is that some businesses will do much better than others. It's not just your personal qualities that count. And it's not how much capital or human resources you have either. It's picking the right business for the market you are in.
+I can illustrate this point by telling you about Y, the woman who takes care of our house in Nicaragua. Like Sousa, Y was very poor until she got a job earning $5 a day cleaning one of the upscale homes in our development. She didn't know much about cleaning fancy houses at first, but she was a quick learner. And when my place was finished, she applied for the job and I was happy to give it to her.
+It was a good deal for Y, because, with two houses to take care of, she doubled her income. It was a good deal for me, because I got a very good and reliable person at a fraction of what I'd have to pay in the States.
+Because I can't help but preach entrepreneurship, I several times suggested to Y and E (the young man who takes care of the outside of my property) that they should start their own businesses. To help them along, I offered them loans that could be repaid by doing little extra jobs for me on the side or even during their regular working hours.
+E started a little sundries business. He built a shack in front of his house on the main road that runs by the development. And his wife and kids sell snacks and drinks and batteries and soap and other odds and ends that he somehow manages to get his hands on.
+Y built a little store on the side of her house and opened a children's clothing shop. She buys cute little outfits in the capital city, hauls them to her shop, and sells them to the locals. Her store is busy once a month - on the first (pay day for most of the workers). Otherwise, she has little traffic.
+Y is learning to be a good businesswoman. She runs her store profitably and has reinvested those profits in a small truck (to save money on transporting the clothes) and an expanded inventory. At the end of every month, she also takes cash out and puts it in the bank for her children's education.
+So she is doing well. But she is not doing nearly as well as Maria Sousa. And she is not likely to do much better.
+The reason is simple. Y chose a business that could not possibly grow quickly in her little corner of Nicaragua. Selling children's clothing was and is a fine idea. It filled a need and it works. But no matter how hard she works, how much advertising she does, or how much money she reinvests in her business, her market is limited by the number of local people who can afford her wares.
+When you decide to become wealthy, you should take some time to consider your goals and ambitions before you select the business you will start. Don't believe the gurus who tell you any business will do. Yes, you can start a children's clothing business if it suits your fancy, but don't expect it to become a big moneymaker if the marketplace can't give you the support.
+For fast growth, choose a hot business in a hot market in an economy that is expanding. Manufacturing cheap clothing in Brazil fits the bill. Selling children's clothing in Nicaragua doesn't.
+Now if you plan to take your business to the Internet - and I highly recommend that you do - you have a little more wiggle room. Because then your market expands to include not only India, but the entire world.
+But you must still be in the right business at the right time.
+For example, there are thousands of options for getting into the Internet information publishing business. But if you decide to sell information about some obscure interest/hobby, such as bookbinding, you are going to have a smaller market than if you choose a more popular interest/hobby, like fencing or golf. And if you get into a market that is in a growth stage, such as yoga or Pilates, you'll do better than if you choose a market that is shrinking, such as aerobics.
+How do you determine the size of your market?
+According to Edwin Huertas, a Search Engine Optimization specialist, keyword research should be your first step. "The first thing I do to show a client the potential for their business," says Edwin, "is research the keywords for that industry - the words that are being searched for on the major search engines. Each search engine has its own set of keyword tools that will tell you how many people have searched for any given keyword phrase (and any combination of words in the phrase). I like to 'see' what people are looking for online instead of guessing."
+If your keyword research indicates that there's a big pool of potential customers for the product or service you intend to sell online, you can start testing. Because there's a good chance you're about to enter into the right business at the right time.
+====== How to Start a Million Dollar Business for $25,000 #32: Stuck on an Idea? 5 Steps for Turning Your Idea Into Money ======
+Sometimes you will have an idea that you know is the one. What Mark Ford calls the 'big-money idea'. These ideas can be nerve racking - usually you end up with a vague impression of what it should be, but the enormity of it befuddles you - and you either give up, sit on it till someone else makes it happen, or implement it without a plan, which often leads to too many insurmountable challenges and leads to abandoning the idea in distress.
+Which is why, you need a plan - you need a vision, clearly defined goals and objectives, and timelines. Most importantly, you need persistence. Because, however much excruciating detail you put into a plan, however much thought goes into it, there will be obstacles - and you must be ready to stick it out - mentally, physically and emotionally.
+I am in the process of creating my first complete, independent project. Here are some things I have learned from Mark Ford that I must do along the way...
+Step 1: Articulate a clear and complete statement of your objective
+A statement will help you not only define and document your idea, but give you a way to share the idea and get constructive feedback.
+Start by writing a one-page statement that clearly lays out the big idea and defines the business objective, eg, bringing in 10,000 new customers. Add some timelines, eg, in the next 6 months, and specific strategies you will use to reach the objective eg, through an online marketing campaign. Make sure to include a budget eg in under Rs 500,000. And finally, the customer-value objective eg, to offer customers your new product.
+This statement presents your idea to the world. By sharing this one-page document to all possible partners and any trusted advisors, you can solicit feedback. Use the constructive feedback to rework your document - and you have a plan.
+Step 2: Follow up with a 'Workflow document'
+Armed with a plan, you now need a breakdown of tasks that you can start working on. The best way to do this is create an Excel sheet and list out the specific tasks that have to be completed to get the show on the road. This will become your workflow document (there are some great apps to create these as well such as Workflowy).
+Add to this list the deadlines by which they need to be completed, and the names of the people responsible for the task. Make sure the person responsible is comfortable with the responsibility and the deadline - or the process could be disrupted, or the project completely derailed.
+Step 3: Manage. Manage. Manage some more.
+Often, people begrudge management because they think managers are those who tell people what to do, but don't do anything themselves. The fact is, it is much harder to manage a process, and especially people, than to just sit down to a task and do it yourself. It is probably one of the main reasons people hesitate to start a business - because then it's not just using your skills of working, but your skills of managing that are tested.
+To manage well, you have got to track what everyone is doing at all times. Your calendar should be marked with all tasks - and following up with the people in charge becomes your responsibility. Make sure things go as planned, so your idea and your business to not spiral out of your control and die an untimely death.
+Step 4: Be flexible and ready to change the plan
+Implementing a big idea is not a straightforward process. Anticipate that things will go wrong, little things and big things. Be ready to make some changes, adjust the process, revise the plan, extend deadlines. Be open to some 'jugaad' solutions - innovate as you go.
+Step 5: Recognise 'wins' and reward
+Achieving a big-money idea calls for celebration. You and your team has achieved something significant, and of value, hopefully both to the business and to its customers. If the idea is big enough, remember to reward the key players by thanking them personally and, where required, financially.
+Follow this process and soon you will easily overcome the hesitancy that make implementing these ideas so challenging. The more big ideas you put into action, the easier it gets. Soon many of your outstanding ideas that will continue to make you and your customers richer and happier.
+====== How to Start a Million Dollar Business for $25,000 #33: Six Employee-Motivating Myths ======
+Myth #1: Employees need job descriptions in order to know the scope of their responsibilities.
+This is a popular belief among corporate types - even the best of them. They are usually operations people accustomed to working with formal standards and complicated processes where precision matters and mistakes can be costly.
+Reality: Job descriptions aren't necessary. For entry-level operational jobs, it makes sense to spell out responsibilities and procedures. But for operations managers and almost everyone on the innovation and marketing side of your business, job descriptions are unneeded and can be counterproductive because they are, by their very nature, limiting.
+My philosophy is simple: If you are responsible for growth or the management of operations, there is nothing you shouldn't be willing to do. Saying "That's not my job" is equivalent to saying "I don't want to work here."
+Great people see limits as boundaries. The most motivating thing you can tell a future star or superstar employee is this: "You can do anything you want to do here, so long as it contributes to our goals and objectives."
+Myth #2: Employees are always motivated by money. It's naive to think differently.
+This oft-refuted myth is still common among CEOs and entrepreneurs, especially younger ones who have limited experience leading people. Just yesterday, I heard it from a young man who had taken his business to Stage Three in less than six years.
+He was looking to hit the $50 million mark, and felt he could do so only by locking in his best employees. But he mistakenly felt that the way to do that was to throw more money at them.
+Reality: Money is not even the second-most-important motivating force for very good people. Sleazy salespeople and officious managers are motivated by money. But very good and great employees are motivated primarily by the opportunity to become more than they are. Next on their list is recognition. Very good people thrive on being appreciated.
+There have been countless studies on what motivates employees, and money is never among the top three. That doesn't mean money doesn't count. You can't expect to underpay good people and get away with it. Pay your employees just a little bit more than the going rate so they don't ever feel like you're taking advantage of them - but keep in mind that the main reason they'll stay with you is because of the challenge of their jobs.
+Myth #3: To win your employees' loyalty, make them all owners.
+This, I admit, was a myth that I held near and dear for many years. It seemed to me that if we could make our employees feel like they had a stake in the future of the business, they would work harder and smarter and stay longer.
+Reality: Most employees don't want to be business owners. That's why they are employees. In my younger days, I tried various ways to motivate employees through stock incentive plans - even creating a cooperative-like structure where every employee had actual stock in the company.
+None of those strategies ever made a positive difference. The good employees worked no harder. The superstars were no more common. The bad employees were just as bad, and they groused because they felt their stock shares were too few.
+The only substantial difference was that because the people at the top owned only a small percentage of the business, they lacked the motivation needed to grow it. That was bad for everybody. I learned my lesson and promised myself I'd never make that mistake again.
+Myth #4: Flat organizations create more efficient employees.
+The idea here is that employees work more effectively when you eliminate tiers of management. The ideal is to run a business of peers, where every employee can go directly to the CEO to ask questions or get directions.
+Reality: Employees like hierarchy. Hierarchy gives employees a sense of structure. They know who they report to and who reports to them. Our working lives are confusing enough. It makes it worse, not better, to seek some phony egalitarian flatness by demolishing hierarchy, which is entirely natural and ubiquitous in any form of human enterprise.
+Myth #5: Employees should have lots of amusement in the workplace.
+This was a popular myth during the Internet boom. Every company featured in Inc. magazine boasted about its basketball court or Frisbee field or pinball arcade. The idea was that if you allow employees to have fun at work, they will be happier and work longer and harder.
+Reality: Happiness comes from doing good work, not from distractions. Turning your office into an amusement park is foolish and counterproductive. Your stars and superstars will not bother with the toys, because they find happiness in their work.
+Your laggards and goof-offs will use the toys - but those people should be working for someone else, not you. I have seen good results from sponsoring workout classes for employees during lunch hours. Other than that, the only "toys" that are helpful are new tools that help people work better and faster.
+Myth #6: A good boss is a sensitive boss, one who is willing to respond to employees' personal problems.
+This is the management philosophy of Michael Scott in the TV sitcom The Office. The concept, in a nutshell, is that a boss who is also your friend is a boss you will work harder for.
+Reality: Mixing business with friendship is always a bad idea. You shouldn't do it as an employee. And you shouldn't do it as a boss. When you treat an employee like a friend, you are giving him the wrong message: that in the business environment, his personal life comes first.
+Every enterprise can have only one primary purpose, and your purpose should be to make your customers happy. When you put your employees' interests above those of your customers it is a violation of your primary reason for being in business.
+The bottom line is this: The best and easiest way to grow your business from $1 million to $10 million to $50 million to $100 million and beyond is to fill it with very good and great employees and to turn those very good and great employees into stars and superstars.
+The way to create stars and superstars is to create as much upward mobility as possible in your business so that your employees can do what all good employees really want to do: exercise their talents as fully as they can, doing something that matters.
+Happiness comes from working hard and well at something we care about. If you want your employees to work happily (and you should), you have to communicate your vision for the business, and then give them the chance to realize that vision by working hard and well in an environment of limitless responsibility.
+====== How to Start a Million Dollar Business for $25,000 #34: Innovation - The Secret to One Superstore's Success ======
+There's an old axiom about business that every successful entrepreneur comes to appreciate: "If it ain't broke, don't fix it."
+Why, then, is Brad Anderson, CEO of Best Buy, fiddling with his $30 billion a year machine?
+Anderson believes that if your company ain't broke, you should fix it anyway. Despite the fact that Best Buy is the most successful consumer electronics retailer in history, he believes that unless it is constantly getting better, it is going to get worse.
+Anderson joined the business as a salesman in 1973, and worked his way up to being founder Dick Schulze's right-hand man in 1981. In the decade that followed, Schulze and Anderson built Best Buy into a regional retail success story...while continuously tinkering with its working model.
+Best Buy's innovation strategy has been a combination of doing the obvious things (like aggressively opening up new stores), thinking ahead (getting into the computer service business), and challenging convention (getting rid of employee commissions).
+Today, they continue to innovate by opening up superstores in China, peppering U.S. cities with technology boutiques, and radically expanding their "Geek Squad" computer service business. In addition, Anderson is challenging the company's traditional marketing program by implementing a new business model popularized by Columbia Business School professor Larry Selden: "centricity."
+In a nutshell, "customer-centric marketing" goes like this: Not all customers are alike. Some cost a lot to acquire and then spend very little. (Selden calls them "demon" customers.) Then there are those who, however expensive they are to acquire, end up spending a lot. If you can segment your buyers, and cater to the big spenders, you will increase your profits considerably.
+When Anderson applied this model to Best Buy, he realized that the company had five kinds of buyers: the busy suburban mom, the price-conscious family guy, the gadget fiend, the affluent tech enthusiast, and the small-business owner.
+So he asks his stores to figure out which type of customer is delivering more to their bottom line. Once it figures that out, the store changes itself. It changes its inventory, its advertising, even the way it stocks its shelves - all to focus on that key demographic.
+Anderson tested the idea on about 50 stores, and it seemed to make a big difference. He then pushed to have another 154 stores quickly centricize - but, with those, saw little return on the investment. (A typical conversion can cost a store $600,000.)
+He and Schulze are not giving up on the new model. The company has billions in cash, so they're not worried about temporary setbacks. They are convinced that the long-term success of the company depends on centricizing and on other innovations that they haven't yet thought of.
+I think there is a great deal of good sense in the old "If it ain't broke, don't fix it" approach. But it's the kind of business truth that is best followed in some circumstances and ignored in others. In my own business career, I can recall several times when I changed something - some product or pricing or marketing formula - only to see results go south. But most of the time, the great businesses I've been involved in have succeeded due to constant evolution. Point is, you can't be afraid to change things just because they are working. All businesses operate in vital, ever-changing markets. Competitors change. Circumstances change. And the needs and interests of customers change too. If you don't keep up with the changes your market is going through, you will gradually lose your share of it. If you maintain a consistency in what you do, the decline will be so gradual that you will likely attribute it to a weakening of the market.
+And that's the problem with the "Don't fix it" philosophy: If you keep doing everything like you used to, your business will slowly but surely deteriorate. And you'll never understand how and why it is falling apart. (I've warned about this process of "incremental degradation" several times in past issues of WBC.)
+If you have a growing business - and you want it to keep growing - change it. Don't change it radically (if it's not broken). Change it in small degrees. Push it. Prod it. Ask challenging questions. Work always with this mantra: "If it's good, then good. But how can we make it better?"
+These are the three key areas to focus on:
+**Management Structure**
+Your business won't grow quickly if your key employees aren't willing to change their roles on a regular basis. Everyone should understand that flexibility and speed are essential components of success. If the business as a whole is to grow, the important people involved in that business must be willing to change their roles as often as is needed.
+**Marketing**
+What worked last year might not work this year. Growing companies need to be alert to new marketing practices, both within their industry and without, and to test out those new practices whenever possible. By testing new product concepts, marketing schemes, pricing structures, and media, advertising departments can keep up with (and possibly jump ahead of) the market.
+**Operations and Customer Service**
+The objective here is simple: to always, always improve. Company growth naturally and inevitably creates problems that reduce the quality of the customer experience. Only by having a staff of people who are dedicated to making things better can you hope to at least keep them as good as theywere. Smaller businesses move faster and must change more. In the start-to-$20 million phase of business development, you must be prepared to "re-invent" your business frequently - maybe as often as twice a year. Everything needn't change at once and not all changes will take place quickly. But if you want to keep pace with your growing company's potential and keep it growing, you will have to teach your management team to accept (more than that, to desire) change.
+Today's Action Plan
+The natural process of "incremental degradation" isn't limited to business. It can affect your personal life too. So take a few minutes today to think about how much change you allow yourself. Are you always tinkering with "good," trying to make it better? Or are you afraid to make adjustments, worried that you'll damage what you already have?
+====== How to Start a Million Dollar Business for $25,000 #35: Marketing the Man in the Hathaway Shirt ======
+Have you seen The Most Interesting Man in the World?
+I'm referring to the TV commercials for Dos Equis beer. They star a rugged-looking, silver-haired man who is always surrounded by beautiful women.
+In one version of the commercial, he arm-wrestles a Third World general and releases a grizzly bear from a trap. In another, the narrator relates that even his enemies list him as their emergency contact and that the police often question him just because they find him interesting.
+If you are a student of advertising, you know this is a knockoff of David Ogilvy's famous ad campaign: The Man in the Hathaway Shirt.
+If you don't know the history of this ad, you should.
+In Brief: It was 1951. Ellerton Jette, a shirt maker from Waterville, Maine wanted to grow his little business into a national brand, but he didn't have much money. He had heard about the advertising prowess of David Ogilvy. So he booked a meeting with him.
+"I have an advertising budget of only $30,000," he told Ogilvy. "And I know that's much less than you normally work with. But I believe you can make me into a big client of yours if you take on the job."
+If he'd stopped there, Ogilvy would have thrown him out of the office. But then he said something that sold the great salesman.
+He said, "If you do take on the job, Mr. Ogilvy, I promise you this. No matter how big my company gets, I will never fire you. And I will never change a word of your copy."
+There is a big lesson here. So let's stop for a moment and talk about it.
+What Ellerton Jette did was a little bit of genius, in my opinion. In two short sentences, he changed the mind of one of the most powerful men in the world of advertising. At the same moment, he made himself a very rich man.
+Not a week goes by when I don't get a letter from a complete stranger who sees me as his David Ogilvy. They are direct and to the point. "I know I can get rich if you help me, Mr Ford," they say. "So how about it?"
+What makes them think I have the time, if not the inclination, to help them? It never even occurs to them to offer me something in return for what they are asking.
+Jette's $30,000 budget might have put $3,000 in Ogilvy's pocket. Though it was a paltry sum then and a mere pittance now, at least it was something. But what really cinched the deal was the two promises Jette made.
+Going into the meeting, Jette knew he had one chance to forge a relationship with Ogilvy. He somehow understood that Ogilvy, as successful as he was, had two big problems. He worried that his biggest clients would walk away from him. And he hated it when his clients screwed with his copy. So, instead of thinking only of his own goals, Jette took the time to figure out how he could offer Ogilvy something that would be of immense value to him. (This, by the way, is one of many lessons you will learn when you read my Automatic Wealth.)
+When Jette made his two promises, Ogilvy realized that he was talking to a businessman who would eventually become a partner. He could see that Jette was a man of good faith who would let Ogilvy be in charge of his marketing. And that he would reward Ogilvy with a lifetime of loyalty.
+Now, let's get back to the story of the Hathaway shirt ad...
+After accepting Jette's offer, Ogilvy spent days doing in-depth research on Jette's client base. He came up with dozens of ideas. The one he settled on was a campaign built around the image of a distinguished man in a romantic location dressed in a Hathaway shirt. He selected a model that looked like William Faulkner and booked the first photo shoot.
+On the way to the shoot, he passed a five and ten cent store where he bought a few cheap eye patches. At the shoot, he asked the model to wear an eye patch for a few shots.
+The moment he saw the photos with the eye patch, he knew.
+The Man in the Hathaway Shirt campaign was an instant success. The ads were carried in papers around the country, and were mentioned editorially in Time, Life, and Fortune. Before long, hosts of imitators appeared. Other companies ran ads featuring eye patches on babies, dogs... ven cows. A cartoon in The New Yorker shows three men looking into the display window of a shirt store. In the second panel, they are coming out of the store, with eye patches on.
+Ogilvy got the idea for the patch, he said, from a photo of Ambassador Lewis Douglas, who had injured his eye while fishing in England. But he got the idea itself - the idea of this aristocratic man with a romantic life - from the James Thurber story "The Secret Life of Walter Mitty." (Actually, Kenneth Roman pointed out in The King of Madison Avenue, it could have been from the secret life of David Ogilvy. As a young executive, Ogilvy was prone to wearing capes and bowties while everyone else was in grey flannel suits.)
+Of course, it wasn't just the eye patch that made the ads work. It was the combination of the model, the situation he was in, and the copy itself.
+And the copy was brilliant. Here's the first line of the first ad:
+"The melancholy disciples of Thorstein Veblen would have despised this shirt."
+Most readers of the ad had no idea who Thorstein Veblen was. But they got the idea. Veblen was some sort of snobby aristocratic. By posing a handsome, silver-haired model with an eye patch in a Hathaway shirt and putting that line underneath the photo, Ogilvy struck a chord in the American imagination. We all hate aristocrats, but we would like to be one.
+There was another brilliant thing about the ad. Putting the model in a romantic location gave the pitch a fictional element. It had "story appeal," as Ogilvy put it.
+Ogilvy said he discovered the concept of story appeal in a book by Harold Rudolph, a former ad agency research director. This was the first time, Roman says in his book, "that shirt advertising focused as much on the man wearing the shirt as on the shirt itself."
+And now, back to The Most Interesting Man in the World...
+I am a fan of these Dos Equis commercials. I like them both because they are a salute to David Ogilvy and also because they successfully replicate the key elements in Ogilvy's ads for the Hathaway shirt. They have the handsome, silver-haired model. They have the eye patch. And they have the anti-aristocrat touch. (The product is beer, after all.)
+They also have the romance and the story. Each new edition of the commercial is another episode in this most interesting man's life.
+They fall short only in one respect. They don't do a great job of equating the product with the concept.
+When I remember a Dos Equis ad, I remember the actor's face. I remember the pretty girls in the background. I'm aware that he is a man that women find irresistible. And that when he drinks he drinks... Wait a minute. What does he drink?
+There's the rub.
+We find out that The Most Interesting Man in the World drinks Dos Equis. But he could just as well drink Pabst Blue Ribbon. The creative people behind this very good ad campaign get a big demerit for that. Ogilvy, on the other hand, put the name of the product in the headline. The fact that his man was wearing a Hathaway shirt was integral to the story.
+Grabbing the prospect's attention with an entertaining story or idea or photo is essential for any sort of advertising campaign. But you have to do more than that. You have to sell the product. And to do that, you must link the initial sentiment created in the headline with the final emotion needed to close the sale at the end.
+In AWAI's copywriting program, I call this "the Golden Thread." It's pretty simple. The product is at one end of the thread. The prospect's heart is at the other end. Every element of the copy must be connected to the product as well as to the prospect. And the connection must be taut. If the thread goes slack, even for a second, you lose the sale.
+I will end this essay by saying this: You have just read about half a dozen of the most powerful marketing secrets I know. If you put this essay down and forget about it, you will be making a terrible mistake. Read it at least half a dozen times and think about it. If it doesn't make you a multi-millionaire, I'll eat my shirt. Hathaway, of course.
 ====== How to Start a Million Dollar Business for $25,000 #36:10 Dumb Ways to Start a Business (and Waste a Ton of Money at the Same Time) ======

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