How Do You Test and Fund Your Idea? Josh Kaufman Founder of the Personal MBA Has a Plan

Do you have an idea for a product? Maybe you have a Moleskine notebook labeled “My Stupendous Ideas.” Where, according to you, each idea is worth millions. Unfortunately, instead of making the idea a reality you’re making an excuse, “If I had the money and time I would build the world’s best widget.”

If I had to guess, neither the lack of money or time is holding you back. What’s the issue: you are holding you back, it’s the internal conversation that you are not good enough. While there are countless strategies on how to manage the internal conversation, I have found one bulletproof strategy — just do it.

Execution is a robust approach to making your idea happen. Author Gary Vaynerchuck explains that execution is everything:

Amazing ideas happen all the time. I’ve had great ideas. The guy sitting next to you as you read this has great ideas. The girl you see on the bus in the morning has great ideas. But once you have that idea, the next step is to go and do it. Just make it happen.

So I snatched my Moleskine notebook labeled “My Stupendous Ideas” chose an idea and did it. As I was executing my idea I quickly discovered two important items:

  1. Stealth Mode
  2. And Funding

Why Stealth Mode Is Plain Stupid

Each time I executed an idea I worked feverishly in the shadows. Why, in stealth mode because there is a popular theme amongst entrepreneurs that your product must be built in secrecy, otherwise an unscrupulous entrepreneur will steal it. Josh Kaufman, the founder of the Personal MBA, disagrees with the popular belief:

“Stealth mode diminishes your early learning opportunities, putting you at a huge early disadvantage. It’s almost always better to focus on getting feedback from real customers quickly as you possibly can.“

I would preface Kaufman’s argument by saying, “because you make your idea public does not mean another entrepreneur will execute like you…. there will be differences in passion, purpose, skill set, and available financing.” Kaufman continues to share:

“Don’t be shy about showing potential customers your work in progress. Ideas are cheap what counts is the ability to translate an idea into reality, which is much more difficult than recognizing a good idea.“

So how do you show potential customers what you are working on, the prototype. The prototype is an early representation of your product. It does not have to be a physical product; the prototype can be a flowchart, a computer rendering or a diagram. The purpose of the prototype is as Kaufman explains:

“As you show your Prototype to potential customers, you’ll get a steady stream of ideas and feedback that will help you make your offer even better.”

People Love Your Prototype, But Now What?

So your prototype is garnering attention, and you are even getting pre-orders. So you now need to build the product but where will you get the capital? There are some financial solutions that you can pursue. The most agreeable would be bootstrapping. Kaufman explains:

“Bootstrapping is the art of building and operating a business without funding. By limiting yourself to the use of personal cash, personal credit, the business’s revenue, and a little ingenuity, you can build extremely successful businesses without seeking funding at all.”

I use bootstrapping as my financial solution. This philosophy allows me to have 100% control over my business. But if you want to grow your business beyond bootstrapping you will need outside capital to improve your purchasing power.

Kaufman illustrates nine funding strategies, all of which I have quoted from The Personal MBA:

  • Personal Cash. “Is by far the best form financing. That is where most entrepreneurs begin by financing themselves.”
  • Personal Credit. “Is another low-cost method of financing. As long as your needs don’t exceed a few thousand dollars.”
  • Personal Loans. “Are typically made by friends and family.”
  • Unsecured Loans. “Are typically made by banks and credit unions.”
  • Secured Loans. “Requires collateral. If you don’t make the payments, the lender can legally seize the property promised as collateral.”
  • Bonds. “Are debt sold to individual lenders, the business asks individuals or other companies to loan them money directly.”
  • Receivables Financing. “Is a special type of secured lending unique to businesses. Receivables Financing can make millions of dollars in credit available.”
  • Angel Capital. “An individual private investor, someone who has excess wealth they’d like to invest in a private business.”
  • Venture Capital. “This takes over where Angels leave off. Venture capitalists are extremely wealthy investors with very large sums of capital.”
  • Public Stock Offering. It involves selling partial ownership of the company to investors on the open market.*

I have found that deciding which financial option to use depends on where you want to take your company. If being a solo-entrepreneur is all the altitude you want then bootstrapping might be all the funding you require. But if you are looking at going IPO then you will need to leverage a vehicle such as venture capital.

So I end my conversation with you as I began it. Do you have an idea for a product or service?

If you do, then I have given you two fundamental building blocks. Unfortunately, there is no guarantee that if you follow my advice, you will build a product that others will buy. My hope is that you are walking away from this article a more informed entrepreneur.

Bruce Judson on the Pain of Building a Successful Business without Outsourcing Everything

In his book In The Power of Focus, Jack Canfield shares this sobering statement, “As a foundation is built, people and systems are put in place to create stability. Gradually the entrepreneur becomes more involved in day-to-day administrative duties. Paperwork increases and what started out as an exciting venture becomes a daily routine, with much more time spent putting out fires, handling people problems, tax challenges, and monthly cash flow.

Is this what your day looks like? Be honest, do you spend your days working in your company rather than on your company. It happens, and it’s a trap that can derail your business because instead of focusing on core competencies you're distracted by daily routines.

For over a decade I started companies, and each one failed as quickly as they started. I gradually began to surrender to my internal conversation that, I was not good enough. Now, I come to understand that my failures as an entrepreneur are based more on my lack of clarity. In “Go It Alone” Bruce Judson shares,

“What distinguishes all of these businesses is that the founders have figured out a way to focus their efforts almost entirely on their individual skills -- around what they do best. The owners have outsourced all other business functions to people who can provide them better or more cost effectively.”

I believed that success was built on the foundation of being busy. The problem with being busy is that you are engaged with too many administrative duties. So you get what you have allowed, an unfocused company who is struggling to add value and make a profit.

Success, for all intensive purposes, is based on you focusing on a small number of high-leverage activities and outsource everything else.

Michael Loeb, Founder, CEO of Loeb Enterprises shares the view:

“Successful businesses have the discipline to focus on one skill... and practice that obsessively.”

But what activities do you outsource? You can start by mapping out your entire business processes. That means mind map everything that must happen in your business to generate profit. Next Judson explains:

“What are the unique functions that allow this business to create value for the customer and compete in the marketplace? What are the brains of the business that determine whether the revenues and profits of the operation are to grow?"

As the questions marinate, you will begin to provide better answers. The evolution of your reply will start to paint a reality where you understand what are the different functions that create significant value. Almost without effort you will begin to understand what functions are nonessential, it’s those functions that must be offloaded.

Don’t forget to leverage customer feedback in your decision to outsource those functions. Your goal is to simplify your business and then with laser-like focus solve your customer's particular problem. Steven Rivkin, author of “The Power of Simplicity,” shares:

“Our general education and most management training teach us to deal with every variable, seek out every option, and analyze every angle. This leads to maddening complexity. And the most cleaver among us produce the most complex proposals and recommendations. Unfortunately, when you start spinning out all kinds of different solutions, you’re on the road to total chaos. Simplicity requires that you narrow the options and return to a single path.”

Keep in mind that outsourcing does not mean that you must offload nonessentials to a third party. You can offload nonessentials to applications or services as well:

  • Relying on Aweber to automate email
  • Engaging a virtual assistant to manage administrative duties
  • Relying on Buffer to automate social media marketing
  • Leveraging Unsplash to provide beautiful images for your articles

There are no certainties when building a business, but if you want a fighting chance in creating a successful business; it’s imperative that you offload all trivial tasks. Once those tasks are being managed elsewhere, you are free to focus on the core competencies that should drive profits and value.

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The Launch of Project99: An Inspired Journey By Author Josh Kaufman

Do you want more control in your professional life? Do you want to create profound impact? Do you want to leverage your creativity to solve interesting problems?

I said “Yes,” to all three questions, did you? The next obvious inquiry is, “How do you do that?”

Conventional wisdom would answer:

  1. Go back to school.
  2. Get a certification.
  3. Take company training.

And conventional wisdom would be painfully wrong. You don’t have to wait for permission; you simply have to do something that you have not done since college -- read.

Author Abby Marks Beale explains, “Learning and growing through reading helps you to become professionally and personally successful.”

In Project99 I am documenting my journey to success. My hope is that through my documentation, you are inspired to take massive action to improve your professional life. I am focusing on Josh Kaufman’s Personal MBA system,

“MBA programs don’t have a monopoly on advanced business knowledge: you can teach yourself everything you need to know to succeed in life and at work. The Personal MBA features the very best business books available, based on over ten years and thousands of hours of research.”

I will spend the next 99 weeks reading the list of books in the Personal MBA and documenting my lessons learned. My hope is to add additional value to the Personal MBA, through my lessons learned.

I hope my articles will help you to master those essential business skills that will help you, one day find the work you love.

The first article will launch the week of January 15th. If you would like to be updated, please subscribe.

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What Is the Meaning of Life: Victor Frankl Explains Be Specific In Your Mission

”What is the meaning of life?” The question is as bad as asking you, What is your passion? Why, because both questions assume that you have a pre-defined response.

I also feel that you are expecting an easy response, an answer that is agreeable to you, me and everyone else. Fortunately, there is no broad inoculation that can satisfy the everyone. Why, because your reply is uniquely based on your Why, which will differ from my “why,” and the “why” of others.

Viktor Frankl, the author of A Man’s Search for Meaning, plainly explains, "No man and no destiny can be compared with any other man or any other destiny."

I have been on a journey for the meaning of my life. The significant reason why I get up every morning and check off items on my To Do List. I’ve entertained a few possible suitors, but none have held my interest.

It’s an unsettling prospect not to be clear on your why, which eventually bleeds into a terrifying question, “What if I die with regret because I never found my meaning?”

Frankl continues the argument:

"Former prisoners, when writing or relating their experiences, agree that the most depressing influence of all was that a prisoner could not know how long his term of imprisonment would be. He had been given no date for his release. (In our camp it was pointless even to talk about it.) Actually a prison term was not only uncertain but unlimited. A well-known research psychologist has pointed out that life in a concentration camp could be called a “provisional existence.” We can add to this by defining it as a “provisional existence of unknown limit."

I would not dare compare my life to that of Viktor Frankl. But I find myself drawn to the argument of the “provisional existence of unknown limit.” I felt as if I was wondering (endlessly) through my life, starving to find meaning. Unfortunately, all I found were remarkably common answers:

  • What is the meaning of life… to be happy.
  • What is the meaning of life… to be always satisfied.
  • What is the meaning of life… to live, go to school, work, and die.

These findings are hollow answers which fed my existential distress.

But then Dr. Frankl explains:

"Ultimately, man should not ask what the meaning of his life is, but rather he must recognize that it is he who is asked. In a word, each man is questioned by life; and he can only answer to life by answering for his own life; to life he can only respond by being responsible."

The word responsible echoed in my mind. Was I being responsible? Or was I on some frantic search for an answer that would not only quench my thirst but that I could showcase like a trophy?

Professor Frankl continues to educate by explaining:

"By declaring that man is responsible and must actualize the potential meaning of his life, I wish to stress that the true meaning of life is to be discovered in the world rather than within man or his own psyche, as though it were a closed system."

I am horrified; I’ve been pursuing the wrong answers to the vital question. I have been looking for answers when I should be discovering or more importantly making myself into the person I want to be. Doctor Frankl, continues:

"I doubt whether a doctor can answer this question in general terms. For the meaning of life differs from man to man, from day to day and from hour to hour. What matters, therefore, is not the meaning of life in general but rather the specific meaning of a person’s life at a given moment. To put the question in general terms would be comparable to the question posed to a chess champion: “Tell me, Master, what is the best move in the world?” There simply is no such thing as the best or even a good move apart from a particular situation in a game and the particular personality of one’s opponent. The same holds for human existence. One should not search for an abstract meaning of life. Everyone has his own specific vocation or mission in life to carry out a concrete assignment which demands fulfillment."

So how do you find the meaning of life?

  1. Stop searching for abstract answers.
  2. Start looking for specific missions.

The advice might sound pedestrian, but there is a high level of sobriety. If you want to live a meaningful life then you must define what a meaningful life means to you; if you don’t you will be stuck in an endless loop of existential distress.

The Journey of Continuous Improvement: Cal Newport on Acquiring Career Capital to Find the Work You Love

Over the past decade, I have been on a messy journey. I have been trying to become so valuable that I will never be at the mercy of someone else’s agenda. Yes, I have made progress towards that mission, specifically a handful of wins.

Unfortunately, the journey has been carpet bombed by failure. I have recently, come to understand that I have been following flawed advice. Traditional advice that you and I have been given as a prepackaged solution to the terrifying question, “What is my life’s purpose?”

When I asked that question, the guidance was swift and authoritative, “If you want to do the work you love then follow your passion.”

Yes! Of course! I thought, ”My life’s purpose is my passion.” I feverishly set out find my passion. I searched. I explored. I scoured. I asked. I even waited patiently, but I did not find my passion; nor did it find me.

I did find some curiosities, writing, photography, leadership and the Internet of Things but no passion. It was depressing as I saw friends and family doing work they love as I wondered directionless.

Then by accident or perhaps blind fate I found Cal Newport’s book, “So Good They Can’t Ignore You.” The theme of Newport’s book is ”Why do some people end up loving what they do, while so many others fail at this goal?”

Cal continues:

“the conventional wisdom on career success— follow your passion— is seriously flawed. It not only fails to describe how most people end up with compelling careers but for many people, it can make things worse: leading to chronic job shifting and unrelenting angst..”

The passage is a revelation but the advice of not following your passion is difficult to digest. Why, because if you’re not following your passion then what do you do?”

Maria Popova explains, “If you’re looking for a formula for greatness, the closest we’ll ever get, I think, is this: Consistency driven by a deep love of the work.”

As I re-read Popova’s statement, my mindset began to shift, unlearning poor advice so I can make room for the new counsel. I began to focus on two words “consistency” and “work.” These were two words the rarely graced my lips. I spent the majority of my search looking but never understanding that to find a great job I needed to grow consistently, or as Cal Newport explains:

”In which I justify the importance of the craftsman mindset by arguing that the traits that make a great job great are rare and valuable, and therefore, if you want a great job, you need to build up rare and valuable skills— which I call career capital— to offer in return.”

Newport continues his argument on obtaining career capital:

”But now we’re moving into well-trod territory. Basic economic theory tells us that if you want something that’s both rare and valuable, you need something rare and valuable to offer in return— this is Supply and Demand 101. It follows that if you want a great job, you need something of great value to offer in return.”

Unfortunately, I had nothing rare or valuable to offer a great job. Yes, I acquired a few skills, but there was no deep learning or mastery so I would not be able to solve interesting problems. So my next actions were clear – I must build career capital, the rare and valuable skills that I can cash in for a great job.

And this practice as Newport attests to needs to be deliberate:

“The style of difficult practice required to continue to improve at a task. Florida State University professor Anders Ericsson, who coined the term in the early 1990s, describes it formally as an “activity designed, typically by a teacher, for the sole purpose of effectively improving specific aspects of an individual’s performance.” Deliberate practice requires you to stretch past where you are comfortable and then receive ruthless feedback on your performance. In the context of career construction, most knowledge workers avoid this style of skill development because, quite frankly, it’s uncomfortable. To build up large stores of career capital, however, which is necessary for creating work you love, you must make this style of practice a regular part of your work routine.”

So I went to work on developing a curriculum for myself, one that would give me the necessary career capital to invest into a great job. I began investing time in these rare skills:

  • Extreme leadership
  • Solving interesting problems
  • Getting things done
  • Writing

In consistently improving your skills you give yourself leverage to choose what you want to work on and when. So invest wisely in your skills, as they will increase your control so you can act on a life-changing mission.

The Selfish Pursuit Of Passion

How many times were you advised to “follow your passion” in the hunt for the work you love? What did you do shortly after the advice? Did you follow your passion?

No? I am not surprised.

The dogma of following your passion is terrible advice. Why, because the average person has no clue what’s their passion. So, the well-intended guidance does not grant you control; it delivers frustration.

Cal Newport asks in his eye-opening book So Good They Can't Ignore You, “If following your passion is bad advice, what should I do instead?”

Steven Kotler’s, Director of Research for the Flow Genome Project, response “What are your curiosities?” This is a healthy question because it forces you to begin cultivating your interests. It’s impossible to follow your passion when you have never explored your curiosities.

Kotler further instructs:

”The first thing you want to do is make a list of 25 things you’re curious about. And by curious, all I really mean is that if you had a spare weekend, you’d be interested in reading a couple books on the topic and maybe having a conversation or two with an expert.”

As you sift through the list of 25 things you are looking for what items overlap. When you’ve found the intersections learn all that you can from books, podcasts, videos, etc. You will know passion when you find yourself deeply in love with the work.

But Cal Newport cautions you about passion; it’s a selfish pursuit:

”First, when you focus only on what your work offers you, it makes you hyperaware of what you don’t like about it, leading to chronic unhappiness. This is especially true for entry-level positions, which, by definition, are not going to be filled with challenging projects...”

Newport continues:

”Second, and more serious, the deep questions driving the passion mindset—“ Who am I?” and “What do I truly love?”— are essentially impossible to confirm. “Is this who I really am?” and “Do I love this?” rarely reduce to clear yes-or-no responses. In other words, the passion mindset is almost guaranteed to keep you perpetually unhappy and confused...”

In the hunt for the work you love, your passion must play a much larger role. They must be focused on a problem to solve for someone else. If you can apply your passion and help to solve for X, then what you have found is work that you love.