How to Get Good at Making Money

http://www.inc.com/magazine/20110301/making-money-small-business-advice-from-jason-fried_Printer_Friendly.html

by 6ren • 15 years ago

198 45 15 years ago

asanwal• 15 years ago

I'm not sure this article will show you "how to make money" (I doubt any article can do that). Nevertheless, there were some gems in here that seem to contradict or generally undiscussed as part of the current startup zeitgeist & ethos.

"Making money is not the same as starting a business" -

A lot of the conversation, content, advice, etc today seems about the "art of the start" which is about fundraising, customer development, etc. Those may be necessary but definitely are not sufficient to having a business.

"...from Day One, a funded business is all about spending money...Anyone can spend money. Making it is the hard part"

Gary Vaynerchuk had a similar comment about us celebrating the fundraise. Again, fundraising is a worthwhile and perhaps useful milestone, but it's a means to an end which should ultimately be building a real sustainable business.

These points are what you'd expect from Jason Fried, but it was refreshing to see nonetheless.

medinism• 15 years ago

I am especially fond of the make money from your customer advice - under boot-strapping. Sure there are biz that will make $ in the long term from having large volumes of something, but for the rest of us, charge early!

chunkyslink• 15 years ago

Duplicate:

http://news.ycombinator.com/item?id=2271421

The printer friendly version is actually nicer to read:)

brc4• 15 years ago

I love the idea of buying and reselling the same item to see if you can make money. Very good.

codexon9• 15 years ago

This advice is horribly outdated stuff from the 90's.

With Ebay and Paypal fees eating up at least 10% of your earnings, it is highly unlikely you can just resell iPods or anything else on Ebay and make a profit.

"I love doing this, because there's no real risk involved."

No real risk except losing all the money you've invested and wasting a lot of time making Ebay entries and repeatedly learning how to pack and ship.

cantbecool• 15 years ago

I agree. Ebay, Amazon, and Paypal eat up every penny of profit that you would make as a reseller.

brc4• 15 years ago

The idea is not to make money, well, not in the sense of making earnings from it. You're not meant to take it literally as in 'make money from reselling stuff on ebay'.

Of course you lose in the transaction fees (it also mentions craigslist).

Of course you're not going to make real money doing this.

The point is to sharpen your sales skills and realise that experimentation and refinement is the key to developing a good sales strategy. It goes back to the central theme of the piece, which is to continually drum on things - practising all the time. Of course drumming on the steering wheel isn't applicable to playing in a band, except that it's all mental stimulation and practice of sorts.

alexwolfe5• 15 years ago

I think there is a lesson in there somewhere, perhaps you're just missing it. Instead of trying to counter his points, try extracting what you can from it. In the long run this will help you a lot more than just pointing out things you don't like.

mootothemax2• 15 years ago

This advice is horribly outdated stuff from the 90's. With Ebay and Paypal fees eating up at least 10% of your earnings, it is highly unlikely you can just resell iPods or anything else on Ebay and make a profit.

You're missing a trick. A couple of years ago, I spent time either buying items on the US eBay and reselling them on the European sites (specifically, items without grey-market issues), or buying items in bulk (e.g. Sim Cards) and selling them individually.

I wasn't earning huge amounts of money, but as per the suggestion, I learned an awful lot about basic sales. It's not like, e.g., Sim cards aren't a competitive market, right? ;-)

nikcub• 15 years ago

there is currency and sales tax arbitrage opportunities

danmaz74• 15 years ago

The point isn't earning money, but learning to sell, just at the cost of fees. And where does the risk of "losing all the money you've invested" come from? If they bring the fees to 100%?

pnathan• 15 years ago

Well, if your local Craigslist is operating with a decent volume, you can use that. :)

iamgilesbowkett• 15 years ago

The value of deliberate practice applies everywhere. I wouldn't want to do this particular exercise because I did a little bit of this in 2005, and the shipping part of it was kind of tiresome and exhausting, but you can do the same thing with World of Warcraft -- practice the key skill of buying low and selling high over and over again.

I actually did that with WoW, but I skipped the whole buy low/sell high thing after discovering a cunning hack which made me ridiculously wealthy until I got to around level 50 and had to start buying low and selling high like everybody else. The big lesson I got from that: finding a smarter profit-making system than average will give you wildly above-average earnings. I suppose the little lesson is that hacks are context-sensitive.

Anyway, the point is not which WoW method makes the most gold, or whether eBay profit margins do or do not offer opportunities, the point is to use deliberate practice to sharpen your money-making skills the same way you would use it to learn scales on an instrument. I did this in 2010, with a goal to launch a new mini-business every month. Didn't hit the goal, but learned a lot, and some of the little businesses I did launch worked out quite well.

I definitely recommend following this advice. Making money is a skill like any other. There's substantial research on how to attain high levels of skill. Leverage that research to develop the skills you want. Could not be more sensible.

mhartl• 15 years ago

s/money/wealth/g

phatbyte• 15 years ago

I couldn't agree more on points 5 and 6.

ra• 15 years ago

So many gems in this article, like this:

" Whether you're playing drums or building a business, you're going to be pretty bad at something the first time you try it. The second time isn't much better. Over time, and after a lot of practice, you begin to get there."

kghose• 15 years ago

Small point that puzzled me: He said he got a reseller's license to buy stuff for himself from distributors, and he mentioned he bought "a" radar gun. I thought distributors only sold in bulk and the discount only came out because of the bulk part.

ovi256• 15 years ago

Of course, that's "mostly" true. But he was a sixteen year old with a reseller's licence. Most people love to help a kid out. So I'm pretty sure that's what happened, he talked to them and the rules were bent.

That's an even more important lesson that should be spelled out: rules are for shy people who are afraid to ask.

That reminds me of a passage from Jobs' biography. When they started prototyping the Apple I, Woz needed memory chips. But those were expensive and available only in quantity, so they would be hard to get for a prototype. Jobs just called and got the manufacturer to send some samples. That blew Woz' mind.

zrail• 15 years ago

I've done that trick with chips a few times. Manufacturers want to sell you huge bulk supplies and their costs are so low for things like simple logic or ADC chips that they'll send you a single tube of them just for asking.

jasonfried• 15 years ago

You could buy one item at a time from the Ingram Micro D catalog. I believe bulk prices were even cheaper, but you could still buy items individually below retail prices.

billpatrianakos2• 15 years ago

I absolutely love the guys at 37signala. In particular, their writing style. I recently bought Rework and it was an incredibly easy to finish book, fairly short, but at the same time packed full of more information than books I've read that were twice as long on the subject.

I like the ideas put forth here. Sometimes we forget about these basic concepts like the fact that we deserve to be paid fairly for our work. How simple is that?! I know I lose sight of it all the time. I've been in business for a year (2 weeks is when my 1 year anniversary is) and I now charge ten times as much as I did the first month I started and I still have to raises prices a lot more. This isn't a good thing. It's bad because I obviously undersold myself because I lost sight of the fact that I'm giving something valuable to someone and I should be well paid for it. Instead I felt guilty for charging when I was enjoying my work.

Most of their writings on business is so simple but profound (to me at least). From what I've read, it all boils down to making sure you're being paid for your work, always see if there's a better way to do things, and your business should grow into itself instead of fitting into someone else's mold (e.g. Following business advice that doesn't apply to what you're trying to achieve just because everyone else is doing it and that's what you "should do". ).

I also love the fact that they're Chicago boys. I always root for the home team, haha. I have a friend who knows Jason Fried and I really hope I get an introduction one day.

CosmicShadow• 15 years ago

You know when you hit the Readability bookmarklet and say "god this is just beautiful", this is one of those situations.

ilaksh• 15 years ago

"I realized that when customers shop for shoes, they do three things. They consider the look and style. They try them on to see if they're comfortable. And they consider the price. Endorsements by famous athletes help a lot, too. But the technology, the features, the special-testing labs—I can't remember a single customer who cared."

Does this apply to software or online services? What do those customers really care about?

How to Get Good at Making Money

Related Stories