I then identified the common characteristics of my top-five customers and secured three or so similarly profiled buyers in the following week. Remember, more customers is not automatically more income. More customers is not the goal and often translates into 90% more housekeeping and a paltry 1–3% increase in income. Make no mistake, maximum income from minimal necessary effort (including minimum number of customers) is the primary goal. I duplicated my strengths, in this case my top producers, and focused on increasing the size and frequency of their orders.
The end result? I went from chasing and appeasing 120 customers to simply receiving large orders from 8, with absolutely no pleading phone calls or e-mail haranguing. My monthly income increased from $30K to $60K in four weeks and my weekly hours immediately dropped from over 80 to approximately 15. Most important, I was happy with myself and felt both optimistic and liberated for the first time in over two years.
In the ensuing weeks, I applied the 80/20 Principle to dozens of areas, including the following:
1. Advertising
I identified the advertising that was generating 80% or more of revenue, identified the commonalities among them, and multiplied them, eliminating all the rest at the same time. My advertising costs dropped over 70% and my direct sales income nearly doubled from a monthly $15K to $25K in 8 weeks. It would have doubled immediately had I been using radio, newspapers, or television instead of magazines with long lead times.
2. Online Affiliates and Partners
I fired more than 250 low-yield online affiliates or put them in holding patterns to focus instead on the two affiliates who were generating 90% of the income. My management time decreased from 5–10 hours per week to 1 hour per month. Online partner income increased more than 50% in that same month.
Slow down and remember this: Most things make no difference. Being busy is a form of laziness—lazy thinking and indiscriminate action.
Being overwhelmed is often as unproductive as doing nothing, and is far more unpleasant. Being selective—doing less—is the path of the productive. Focus on the important few and ignore the rest.
Of course, before you can separate the wheat from the chaff and eliminate activities in a new environment (whether a new job or an entrepreneurial venture), you will need to try a lot to identify what pulls the most weight. Throw it all up on the wall and see what sticks. That’s part of the process, but it should not take more than a month or two.
It’s easy to get caught in a flood of minutiae, and the key to not feeling rushed is remembering that lack of time is actually lack of priorities. Take time to stop and smell the roses, or—in this case—to count the pea pods.
The 9–5 Illusion and Parkinson’s Law
I saw a bank that said “24-Hour Banking,” but I don’t have that much time.
—STEVEN WRIGHT, comedian
If you’re an employee, spending time on nonsense is, to some extent, not your fault. There is often no incentive to use time well unless you are paid on commission. The world has agreed to shuffle papers between 9:00 A.M. and 5:00 P.M., and since you’re trapped in the office for that period of servitude, you are compelled to create activities to fill that time. Time is wasted because there is so much time available. It’s understandable. Now that you have the new goal of negotiating a remote work arrangement instead of just collecting a paycheck, it’s time to revisit the status quo and become effective. The best employees have the most leverage.
For the entrepreneur, the wasteful use of time is a matter of bad habit and imitation. I am no exception. Most entrepreneurs were once employees and come from the 9–5 culture. Thus they adopt the same schedule, whether or not they function at 9:00 A.M. or need 8 hours to generate their target income. This schedule is a collective social agreement and a dinosaur legacy of the results-by-volume approach. How is it possible that all the people in the world need exactly 8 hours to accomplish their work? It isn’t. 9–5 is arbitrary.
You don’t need 8 hours per day to become a legitimate millionaire—let alone have the means to live like one. Eight hours per week is often excessive, but I don’t expect all of you to believe me just yet. I know you probably feel as I did for a long time: There just aren’t enough hours in the day.
But let’s consider a few things we can probably agree on.
Since we have 8 hours to fill, we fill 8 hours. If we had 15, we would fill 15. If we have an emergency and need to suddenly leave work in 2 hours but have pending deadlines, we miraculously complete those assignments in 2 hours.
It is all related to a law that was introduced to me by Ed Zschau in the spring of 2000.
I had arrived to class nervous and unable to concentrate. The final paper, worth a full 25% of the semester’s grade, was due in 24 hours. One of the options, and that which I had chosen, was to interview the top executives of a start-up and provide an in-depth analysis of their business model. The corporate powers that be had decided last minute that I couldn’t interview two key figures or use their information due to confidentiality issues and pre-IPO precautions. Game over.
I approached Ed after class to deliver the bad news.
“Ed, I think I’m going to need an extension on the paper.” I explained the situation, and Ed smiled before he replied without so much as a hint of concern.
“I think you’ll be OK. Entrepreneurs are those who make things happen, right?”
Twenty-four hours later and one minute before the deadline, as his assistant was locking the office, I handed in a 30-page final paper. It was based on a different company I had found, interviewed, and dissected with an intense all-nighter and enough caffeine to get an entire Olympic track team disqualified. It ended up being one of the best papers I’d written in four years, and I received an A.
Before I left the classroom the previous day, Ed had given me some parting advice: Parkinson’s Law.
Parkinson’s Law dictates that a task will swell in (perceived) importance and complexity in relation to the time allotted for its completion. It is the magic of the imminent deadline. If I give you 24 hours to complete a project, the time pressure forces you to focus on execution, and you have no choice but to do only the bare essentials. If I give you a week to complete the same task, it’s six days of making a mountain out of a molehill. If I give you two months, God forbid, it becomes a mental monster. The end product of the shorter deadline is almost inevitably of equal or higher quality due to greater focus.
This presents a very curious phenomenon. There are two synergistic approaches for increasing productivity that are inversions of each other:
Limit tasks to the important to shorten work time (80/20).
Shorten work time to limit tasks to the important (Parkinson’s Law).
The best solution is to use both together: Identify the few critical tasks that contribute most to income and schedule them with very short and clear deadlines.
If you haven’t identified the mission-critical tasks and set aggressive start and end times for their completion, the unimportant becomes the important. Even if you know what’s critical, without deadlines that create focus, the minor tasks forced upon you (or invented, in the case of the entrepreneur) will swell to consume time until another bit of minutiae jumps in to replace it, leaving you at the end of the day with nothing accomplished. How else could dropping off a package at UPS, setting a few appointments, and checking e-mail consume an entire 9–5 day? Don’t feel bad. I spent months jumping from one interruption to the next, feeling run by my business instead of the other way around.
THE 80/20 PRINCIPLE and Parkinson’s Law are the two cornerstone concepts that will be revisited in different forms throughout this entire section. Most inputs are useless and time is wasted in proportion to the amount that is available.
Fat-free performance and time freedom begins with limiting intake overload. In the next chapter, we’ll put you on the real breakfast of champions: the Low-Information Diet.
A Dozen Cupcakes and One Question
Love of bustle is not industry.
—SENECA
MOUNTAIN VIEW, CALIFORNIA.
“Saturdays are my days off,” I offered to the crowd of strangers staring at me, friends of a friend. It was true. Can you eat All-Bran and chicken seven days a week? Me neither. Don’t be so judgmental.
Between my tenth and twelfth cupcakes, I plopped down on the couch to revel in the sugar high until the clock struck midnight and sent me back to my adultsville Sunday–Friday diet. There was another party guest seated next to me on a chair, nursing a glass of wine, not his twelfth but certainly not his first, and we struck up a conversation. As usual, I had to struggle to answer “What do you do?” and, as usual, my answer left someone to wonder whether I was a pathological liar or a criminal.
How was it possible to spend so little time on income generation? It’s a good question. It’s THE question.
In almost all respects, Charney had it all. He was happily married with a two-year-old son and another due to arrive in three months. He was a successful technology salesman, and though he wanted to earn $500,000 more per year as all do, his finances were solid.
He also asked good questions. I had just returned from another trip overseas and was planning a new adventure to Japan. He drilled me for two hours with a refrain: How is it possible to spend so little time on income generation?
“If you’re interested, we can make you a case study and I’ll show you how,” I offered.
Charney was in. The one thing he didn’t have was time.
One e-mail and five weeks of practice later, Charney had good news: He had accomplished more in the last week than he had in the previous four combined. He did so while taking Monday and Friday off and spending at least 2 more hours per day with his family. From 40 hours per week, he was down to 18 and producing four times the results.
Was it from mountaintop retreats and secret kung fu training? Nope. Was it a new Japanese management secret or better software? Nein. I just asked him to do one simple thing consistently without fail.
At least three times per day at scheduled times, he had to ask himself the following question:
Am I being productive or just active?
Charney captured the essence of this with less-abstract wording:
Am I inventing things to do to avoid the important?
He eliminated all of the activities he used as crutches and began to focus on demonstrating results instead of showing dedication. Dedication is often just meaningless work in disguise. Be ruthless and cut the fat.
It is possible to have your cupcake and eat it, too.
Q&A: QUESTIONS AND ACTIONS
We create stress for ourselves because you feel like you have to do it. You have to. I don’t feel that anymore.
—OPRAH WINFREY, actress and talk-show host, The Oprah Winfrey Show
The key to having more time is doing less, and there are two paths to getting there, both of which should be used together: (1) Define a to-do list and (2) define a not-to-do list. In general terms, there are but two questions:
What 20% of sources are causing 80% of my problems and unhappiness?
What 20% of sources are resulting in 80% of my desired outcome and happiness?
Hypothetical cases help to get us started:
1. If you had a heart attack and had to work two hours per day, what would you do?
Not five hours, not four hours, not three—two hours. It’s not where I want you to ultimately be, but it’s a start. Besides, I can hear your brain bubbling already: That’s ridiculous. Impossible! I know, I know. If I told you that you could survive for months, functioning quite well, on four hours of sleep per night, would you believe me? Probably not. Notwithstanding, millions of new mothers do it all the time. This exercise is not optional. The doctor has warned you, after triple-bypass surgery, that if you don’t cut down your work to two hours per day for the first three months post-op, you will die. How would you do it?
2. If you had a second heart attack and had to work two hours per week, what would you do?
3. If you had a gun to your head and had to stop doing 4/5 of different time-consuming activities, what would you remove? Simplicity requires ruthlessness. If you had to stop of time-consuming activities—e-mail, phone calls, conversations, paperwork, meetings, advertising, customers, suppliers, products, services, etc.—what would you eliminate to keep the negative effect on income to a minimum? Used even once per month, this question alone can keep you sane and on track.
4. What are the top-three activities that I use to fill time to feel as though I’ve been productive?
These are usually used to postpone more important actions (often uncomfortable because there is a chance of failure or rejection). Be honest with yourself, as we all do this on occasion. What are your crutch activities?
5. Who are the 20% of people who produce 80% of your enjoyment and propel you forward, and which 20% cause 80% of your depression, anger, and second-guessing?
Identify:
Positive friends versus time-consuming friends: Who is helping versus hurting you, and how do you increase your time with the former while decreasing or eliminating your time with the latter?
Who is causing me stress disproportionate to the time I spend with them? What will happen if I simply stop interacting with these people? Fear-setting helps here.
When do I feel starved for time? What commitments, thoughts, and people can I eliminate to fix this problem?
Exact numbers aren’t needed to realize that we spend too much time with those who poison us with pessimism, sloth, and low expectations of themselves and the world. It is often the case that you have to fire certain friends or retire from particular social circles to have the life you want. This isn’t being mean; it is being practical. Poisonous people do not deserve your time. To think otherwise is masochistic.
The best way to approach a potential break is simple: Confide in them honestly but tactfully and explain your concerns. If they bite back, your conclusions have been confirmed. Drop them like any other bad habit. If they promise to change, first spend at least two weeks apart to develop other positive influences in your life and diminish psychological dependency. The next trial period should have a set duration and consist of pass-or-fail criteria.