… In which we bust the myths on what work is, where and how we should do business, and look at the conflict between professionalism and price.

WHAT SHALL WE DO NOW?

This is all leading us to the great enterprise opportunities and the choices we need to make. Before we go into too much detail, perhaps we should take a moment to clear the decks and square some things away.

To become successful we must explore opportunities, be aware of threats, and exploit the world as it is. A great business guru (in truth, actually, a number of great business gurus have said the same thing) said that there are only really three ways an enterprise can succeed. The first is remarkable excellence, second is a niche, and third is to be unchallengeably the cheapest. A sort of third and a half, in my mind, is to be innovative, to have something new or a new way to do something that others haven’t offered. (Warning, someone also said that pioneers are people you find face down in the dust with arrows in their back). Being the cheapest is also a bit of a dodgy option as well, but stay with me, all will be revealed.

At the same time, I have been inspired by three books which, on the face of it, have conflicting messages. I have already mentioned Matthew Crawford who says you can find happiness by working with your hands, but then we come to Timothy Ferris whose book, The Four Hour Work Week, comes up with the very tempting prospect of joining the New Rich or N.R. as he calls them. Finally, we have the future trend expert, Magnus Lindkvist, with his book, Everything We Know is Wrong.

Join the New Rich

Timothy Ferris gives the impression that he is one of the sparky West Coast computer whizz kids. His new rich differ from the old rich in this way: old rich people just had money; new rich people need three things to qualify – money, time and mobility. To explain, if you earn £100,000 a year doing 80 hours a week, someone who earns £100,000 a year doing four hours work a week is richer. Someone who can do it in four hours sitting on a beach in Bora Bora with a laptop is richer still. The book goes on to show how by creating virtual business and outsourcing the boring drag of actually working you can make a good easy living.

Of course, it’s all a bit more complicated than that, but here is a story to illustrate his. I was on a trip to Mexico where I encountered a fairly dumpy and unprepossessing couple of tourists who frequented the same internet café as me. I won’t spoil their enterprise by giving the exact details of their business, but let’s call it Gnome from Home.com where they sold garden gnomes online. The lumpy woman (for she was the mastermind) would go to her site and squeal, “Look Kev, another 20,000 orders!” She would then forward them to the Chinese factory that would dispatch them. That was their business and New Rich they were.

I have a theory which states that to really make a fortune you do need to be a bit stupid. If I paid you to bounce a ball, say, a dollar a bounce, how long would you keep it up for? Some people could do it forever. Me? About ten minutes, before I got bored and desperately wanted to do something else.

THINK LIKE A SHARK

The expression ‘a bit of a shark’ suggests how cunning the subtle, deadly hunter of the deep is. The truth is that a shark has a brain the size of a walnut. If you challenged it to political discourse or the design of electronic circuits you would defeat it every time, but fall in the sea off Bondi Beach and see how you get on in a swimming and eating contest. Swimming and eating is what a shark does, it doesn’t get bored or distracted because it doesn’t have the equipment. The problem is that you do – you’re bright, sparky and enthusiastic. Perhaps that’s why you are considering the freedom of self-employment. Therefore, when choosing your enterprise you must consider whether you will get mind-numbingly bored, and if you can live with mind-numbing boredom. If you have worked in a large corporation you have probably lived with it up until now without the financial compensation self-employment can bring. The only trouble is that now you are free you won’t have the iron carrot of corporate discipline to stop you wandering.

Simple

So when I suggest that for some of the simpler business models you need the mind of a shark, what I mean is that once, after the fine tuning, you find an enterprise that works, you don’t screw it up by tinkering with it.

I met a very rich guy once and thought he was a bit simple (fact is, he probably was). Again not to reveal his exact enterprise, we will call him the balloon man. “What I do is sell balloons from a kiosk in shopping centres.”

“Wow!” I said. “You could sell ice cream and toys – and you could locate in cinemas as well.”

His empty eyes turned to me, his soft mouth hung loose (with maybe a touch of drool).

“What I do is sell balloons from a kiosk in shopping centres.”

Realizing a dead end, I asked, “So how many shopping centres are you in?”

“One thousand, eight hundred.”

What is it they say, “If it ain’t broke don’t fix it.” My trouble is I would want to fix it even if it meant I had to break it first.

A LIFE IN CHAINS

A very harsh thinking mega retailer said something very tough to me once and that was, “Small retailers are small because they are crap. If they weren’t crap, they would be chain stores.”

He was wrong, of course, but he did have a point. If you have a simple clean formula for making money you can repeat it over and over again. Some small enterprises don’t expand because they don’t want to, but an awful lot don’t expand because they are barely hanging on by their fingertips just doing what they are doing.

Stop here for a moment and decide why you are doing what you are doing. Maybe like the burglar you just need to feed your habit? Only in your case the habit is maybe a mortgage and kids. Or you want to do the whole lifestyle, “They hate us ‘cause we’re free, man” stuff? If you just need the money, let this book help you to assemble an activity that, after its setting-up period, will just make predictable amounts of cash. Just don’t be tempted to mess with it when it reaches optimum performance just because you are bored. Also bear in mind the burglar probably does enjoy the excitement of burgling. So no fun at all is probably unlikely.

Hopefully, though, together we can go beyond that and actually change our life for the better as well.

WHEN GURUS COLLIDE

The collision of the three books I mentioned have literally given me some eureka moments. Timothy Ferris has suggested in the Four Hour Work Week that, literally, as long as you can connect your laptop you can be anywhere in the world making money, like my Gnome from Home.com friends. Matthew Crawford suggests that working with your hands is preferable because if your job can be done down a wire it can be threatened by anyone in the world. Magnus Lindkvist in Everything We Know is Wrong suggests that even the tiniest enterprise can be a global player, so I suppose by combining the conflicting books you could hand-make traditional corn dollies and sell them from your laptop all over the world.

The Online Barber

A bit more realistically, when I saw Lindkvist giving a presentation he mentioned his barber. He said his barber was OK, not the dearest, not the cheapest, not the best. His punch line was something along the lines of “If I could get my hair cut over the internet, this guy would be toast.”. This comment brought a great reaction from the audience (and from me). The point is that, however small our enterprise is, we are now also global players and our competition is global. That is very possibly why your current job is under threat if you process insurance claims that could be done in India for a dollar an hour, or if you weld shipping containers that could be done in China for a fraction of what you get paid.

Handyman

But hold on there for a second, let’s just run that again. If you could get your hair cut over the internet that guy would be finished. But here’s the thing, you can’t get your hair cut over the internet. That guy will never be toast for that very reason. Perhaps as we choose our enterprise, unless we want to take on the world, we should pick something that can’t be done over the internet.

This reminds me of an awful old joke. A guy describes himself as a handyman.

“Can you paint?”

“Not very well.”

“Are you any good at gardening?”

“Not really.”

“Cooking?”

“Nope.”

“Well, what’s handy about you?”

“I live just round the corner! Now that’s handy.”

A Shark in a Puddle

The hairdresser wasn’t the cheapest or the best but may have been the nearest. Where danger lies in this situation is if the barber next door is better. The message is that we must be far better than our competitor, however big or small our catchment area is. Clearly, if what we do can’t be sent down a wire, we live in a small pond in which to be big, but a shark in a puddle will soon get hungry. The bigger the hunting ground, the more potential there is, but the more competition there will be. Whatever you choose, you must be streets ahead of the competition.

THE NATURE OF WORK

So now you are going to choose what to do, what sort of enterprise will suit you? Apart from crime which we have already dealt with, to my mind there are two sorts of enterprise: you can be a taxi driver or a coffee table maker. If you have never had any desire to drive a taxi or possess no aptitude for coffee table making, please allow me to explain.

I use each one to represent the way we could earn our living. In the case of the taxi driver, once he has bought his car, his enterprise costs him relatively little until someone pays him to work. In other words, the taxi driver does no work until paid. As a business guru, I fall into that category, and so would a hairdresser, physiotherapist, business expert (remember, not a consultant), accountant, or lawyer – and possibly mechanics and plumbers.

The taxi driver’s problem is finding what we describe as work, the activity that someone else pays us to do.

Work Smart Not Hard

The coffee table maker, on the other hand, could go to his or her garage and make coffee tables from dawn until dusk. I am sure you can already see where this is going. OK, so now you have a garage full of coffee tables. If you make anything on spec, from biscuits to toys, you will always face the same problem which in turn creates a problem for us in the definition of work. If our coffee table maker staggers back from her garage at midnight covered in sawdust and we ask, “What on earth have you been doing?”, the answer would be, “Working!” Well, previously we have defined work as an activity that someone else is prepared to pay us for. Therefore, could I suggest to the coffee table maker that she hasn’t been working but merely expending effort – possibly wasted effort – unless something is done about it. In other words, until those coffee tables are sold and she has received the cash, her effort has been in vain. To quote an old sales trainer: “Nothing happens until somebody sells something”.

The Speculation Cake

Before we deal with these issues, it should be understood that we could have a foot in both camps. If you make wedding cakes, it would be a bit daft to construct a two metre high, seven tier, white and pink confection, with ‘Happy Days Kev and Doris’ iced on the top, if you didn’t actually know anyone called Kev and Doris, who had in turn commissioned said confection and in doing so had paid a hefty deposit. But the problem still remains for the coffee table makers that when at a loss, they tend to indulge in futile activity and call it work. But don’t worry, there will be a solution.

Pretty Rank

To get back to the taxi drivers, I had a fascinating conversation with my team over this and we came up with some surprising ideas which sort of support what I have been thinking about new self-employment. Let’s see what your thoughts are.

Imagine a railway station with a taxi rank outside. Before we even get started on the taxis themselves, this idea of a taxi rank raises issues. In most provincial towns, the local taxi drivers give the impression of pathological laziness, where local taxi driving is a semi-viable alternative to getting a proper job. On sunny days they can be seen lolling across the roofs of their cars chewing the fat with the other taxi drivers, or even sitting in deck chairs reading the newspaper. They are self-employed, so what’s going on, what has gone wrong with the cut and thrust of commerce?

The Best Place to Hide a Tree is in a Forest. The Best Place to Find a Tree is in a Forest.

The first thing for us, the potential customers, to consider is where are we going to find a taxi? Why a taxi rank, of course. While this may seem obvious, it is counterintuitive to the aspiring entrepreneur. Whenever I work with people who want to launch an enterprise they always feel it is important to be well away from the competition. Great idea, but it can result in you being a long way from the customer. I had one guy who felt that he had invented the wheel when he showed me his plan for opening a Belgian chocolate shop. He glowed with pride as he expressed the uniqueness of his plan. “There is nothing new about that,” I said. “There are thousands of Belgian chocolate shops.”

“Ah ha!” he said with a manic glint in his eye. “I have a cunning plan,” whereupon he showed me a map of the country which was covered in a rash of red pins. Each one apparently represented a luxury chocolate shop and, dribbling with excitement, he pointed to a large bald patch devoid of pins. “Here, look,” he capered, “not a luxury chocolate shop for miles in any direction.” What he was pointing at was an area of the country that was one of the most deprived, wrecked and depressing post-industrial areas in the whole nation. While you may brand this guy an idiot doomed to failure, we fall into the same trap in a milder and, I would suggest, therefore more pernicious form.

The Best Place to Find a Curry

The reason taxis gather in a taxi rank is because that is where the paying public have been conditioned to expect to find a taxi. When people ask me where would be best to open a restaurant, I may well answer, in a street full of restaurants. In London, if you want a good hot curry, the Bangladeshi community are the people to provide it and you find many of their restaurants in Brick Lane. Imagine, then, that you and I go to the famous Brick Lane for a curry. How do we choose which one to go to? Because of Brick Lane’s reputation, it is clearly the place to find a curry (also it is clearly the place to open a curry restaurant, think taxi rank). Hopefully, we have had a recommendation, but if not, what about appearance, are the locals eating there, is it busy, does the menu look right (plenty of choice but not too much)?

Think about this situation because this is going to be you soon, standing shoulder to shoulder with the others. Why should I pick you? When you see deserted enterprises they certainly weren’t picked – can you see why? As you try and work this out, don’t for a moment consider price. Brick Lane is a strange and exotic place with quite unexpected and challenging dishes. YOU DO NOT WANT TO EAT IN THE CHEAPEST ONE.

Fair Competition

What makes the taxi idea fail as an enterprise is that there is no competition. If a rank (in every sense of the word) driver decides he wants to work harder and more competitively, he can’t. The drivers come around on a strict queuing basis and have a fare fixed by the local authority. There nearly always seems to be an over-supply of cabs. In a normal commercial environment this would provoke competitive activity where drivers would have to offer better value to attract customers, and yes, although I hate to say it, some price cutting at certain times of the day.

IT COSTS A LOT OF MONEY TO BE THIS CHEAP

Why I am so price sensitive is that cutting prices is the easiest and laziest way of getting into trouble. Being the cheapest is a valid company route, a strategy that some very powerful, ruthless companies with a lot of clout have adopted. It may be an option for us but I doubt it, and it requires constant attention and consummate skill. A prime example is Ryanair, who, when you book on the website, doesn’t have a ‘buy’ button, but a ‘buy my cheap ticket’ button. Charging to use the bathroom on an aircraft, charging for printing boarding passes, have made them fiercely unpopular and controversial. We, as a team, have made it a policy never to fly with them because we can’t stand the hassle, but the other day I was on a Swiss Air flight and as I received my free bar of Swiss chocolate I said, “I’m glad I’m not on Ryanair!” Wow, that’s good branding; they might not be popular but they must be Europe’s most talked about airline. They are the cheapest or certainly are believed to be, but they are also tough and powerful and are armed and ready for anyone who would be stupid enough to undercut them. Could you do that, because that is the only way that cheap can work?

A TRUE PROFESSIONAL

While we all like to save money, let me tell a cautionary tale. Imagine you go to your doctor who informs you sadly that you need major surgery. Because you are worried, the public health service is not an option so you determine to find a surgeon. Where would you look? It’s taxi rank time again. The famous Harley Street in London is where medical experts gather. You wander up the bit where the thoracic surgeons collect and outside an imposing edifice sits a classic white Rolls Royce (nothing flash, just desirable). You walk into the rooms of Sir Edward Sharp-Blade, where you are met by a stunning beauty in a crisp nurse’s uniform who offers you a fresh frothing latte, as you wait just a few moments before being ushered into the presence of the great man himself. (One of my favourite advertising slogans for a private health insurance company was, “Doctor, the patient will see you now!”) He exudes confidence, competence and class, views your notes and X-rays, and after examining you himself, sits back and smiles so reassuringly at you.

“Yes, well, this is an operation that I pride myself that I am particularly adept at, and one that I have done many times before. There is absolutely no need to worry, it is a relatively short operation and then you would have a few days at my clinic where I can just keep an eye on things and you will be as right as rain. In fact in my experience, patients feel better than they have felt for a long time.”

You put the big question, “But how much?”

“Oh,” he replies, “it is not expensive, the operation, the anaesthetist, and say, three days in the clinic, the whole thing should come to little more than £50,000.”

“How much!” You leave, chastened, to think things over. As you discuss this crisis with your chums in a bar, a little man wearing glasses like Coke bottles sidles over.

“Oh hello,” he says in a weird, high-pitched voice, “I’m sorry to butt into what is clearly a private conversation, but I thought I should introduce myself. My name is Cyril Spoggins and I am chairman of the Reading Amateur Surgery Club. I am a tax inspector by trade but I do a bit of bowel resectioning in my spare time. We meet above the Nag’s Head bar on a Tuesday evening – would love to have a poke around inside you, there is no charge and you’ll get a piece of quiche Lorraine afterwards, if you survive!”

Not at Any Price

Well, will you go ahead? No? Why on earth not? You are going to be saving yourself 50 grand. Oh, how that party piece of mine makes people chuckle, but up until now I have never really disassembled it to find out why you wouldn’t choose to take Cyril up on his generous offer of help. What are we doing to prevent your potential customers choosing NOT to choose you?

Why Don’t They Choose You?

First take the idea you have in mind; are other people currently making good money doing what you are planning to do? (Remember pioneering is a risk business.) If the answer is yes, why aren’t those people choosing to give their money to you and if we find the answer, is there anything we can do about it? Clearly the eminent surgeon has experience and is established (pause for thought, why do we believe that?).

Just have a think about this for a moment. When you last went to the doctor, he may have said, “Just slip your clothes off and lie on the couch.” Who else in the world could just tell you to get naked and be met with total obedience and no comment?

“Because he is a doctor,” you reply.

Is he? Think of your current doctor, what evidence do you have that this person is a doctor? Have you ever dared to ask for proof? What made you decide that Cyril was not competent to conduct a perfectly safe and satisfactory operation?

The first thing that has happened is that we have gone back to our Brick Lane curry house thing. We look for our consultant in a street of consultants to the point that these eminent people take pride in naming themselves after the street. You can’t get better status than ‘Harley Street Surgeon’ or, I suppose, ‘Savile Row Tailor’ or ‘Madison Avenue Advertising Agency’. Therefore, the first point to realize is that if we are somewhere appropriate for our activity it can boost our credibility and put us where the customers are.

Judged by Appearance

Next is the personal appearance and confidence of the surgeon, to the point that we are so reassured that we have no desire to ask for his credentials or previous experience. Remember we mentioned that he was established – the truth is that we don’t actually know that, but his professional demeanor just made us assume that.

This is exactly how conmen function – I am sure you are aware that ‘con’ is a shortening of ‘confidence’. The trick is to get the victim’s confidence. What is more instructive and useful to us is not how Harley Street wins, but how Cyril failed. We have wonderful uplifting, beneficial and delicious things to offer, so let’s not have any conscience or worries about getting every bit of confidence we can from our potential customers. Cyril approached us in a bar to offer delicate surgery. He admitted that surgery wasn’t his ‘day job’, his dedicated lifetime’s work. The word that got me twitching was ‘amateur’. Then he cheerfully acknowledged failure with the ‘if you survive’ crack. This is a wild and ludicrous exaggeration but it is there to make a point. Is there anything about what you offer that is not completely professional?

Professional – this is a much overused and misunderstood word, so here is a micro-dictionary:

Just for Fun

So if I describe someone’s enterprise as being a bit amateurish, I might not be criticizing but just stating the fact that they are doing it for no money. I think it might be fair to suggest that amateurs in the accepted sense of the word do it for fun. A definition set I want to avoid is: