Knight Errant

How to Choose Where To Put Your Attention

July 23, 2021 / johnhooley

As an entrepreneur you work without the constraints that face most people in their work roles. This is actually a double edged sword, because without that structure it’s easy to waste your time.

Because of this, one of your recurring challenges is simply knowing what to pay attention to.

The core entrepreneurial skill that addresses this challenge is being able to organize at the right level.

Organizing at the right level is taking a variety of goals, obstacles, and data points and shifting your perspective again and again to determine what few priorities deserve your attention.

Outperform Businesses of Your Size

June 16, 2021 / johnhooley

Striving to achieve any business goal you encounter walls.

Often, these are financial in nature: you don’t have enough money to hire a marketer, buy more inventory, or develop a product.

Most entrepreneurs stop at these problems, believing that you can only address them once you have either earned more cash or taken on funding.

These are often false limits though and you can surmount them if you apply your entrepreneurial skill in creating value.

Doing so, enables you to “punch above your weight class” and perform at a higher level than similar businesses of your size.

$80K From a Bit of Thinking

Back in January I wrote about the Profit Window and the process of profit optimization.

I used that writing as a prompt to look at our business again and identify areas where we weren’t as efficient as we could be in generating profit.

Based on that thinking, we implemented a handful of changes. It took about a week’s worth of work to execute.

Now, in June, we’re on track to capture $75 – $80,000 in additional revenue with margins of over 50%.

To provide a concrete example of how boosting efficiency works, I’ll explain my thinking and how this came about in this short case study.

I spoke with an entrepreneur out of Detroit named Ray recently. Ray owns an Allstate agency. He drives a brand new Escalade that is a fleet vehicle from a side hustle transportation company he started. He’s in the process of buying a large building for his agency. Most of the space he’s going to lease to other businesses. And he’s planning on having his company build him a house to live in which he’ll rent from the company.

All of this is bank funded. Ray exhorted me to take out a loan and buy something. “It’s free money! Whatever you’ve been dreaming of doing you can do it! Start a transportation company and buy that $100,000 Lamborghini you always wanted. Develop some assets.”

In my imagination, I was watching the bank take Ray’s home because his business had run up against some loss he hadn’t foreseen.

How affected by fear do you think you are?

How does fear impact your business decisions?

For myself, I’ve almost never felt scared or anxious in business, but fear has had a larger impact on my choices than any other factor. Bigger than luck, bigger than the market, bigger than the limits of my skill or knowledge.

Archimedes and his lever with the world on its end

How to Approach Product Ideas

April 22, 2021 / johnhooley

The first product I created was a poll over email plugin for a CMS.

The idea came from a discussion I participated in as part of a tech user group about how to decide on a course of action affecting the group. I thought, “If someone could just send a poll over email, we’d be able to come to a decision immediately.”

I was looking for a product idea and leapt on this.

Over the next 9 months, I wore myself down writing the plugin in my evenings, weekends, and vacations. I traded work with a graphic designer to create a polished website design to sell it and build that too.

I launched it to crickets. After a month working on the website and marketing and was able to improve my 0 sales to 2 purchases.

It sucked hard.

Ideally, product opportunities organically present themselves to you:

You scratch your own itch.
You build something for a client that everyone needs.
Your boss tasks you with building something that’s not in the market (looking at you Bezos.)

But most of the time, for most of us, that’s not going to happen.

So how can you deliberately identify product ideas that are winners?

Finding Business Opportunities

March 19, 2021 / johnhooley

I was talking with a friend about my plan to invest in developing WordPress plugins as products recently.

“That’s a tough market,” he said, “Everything has been built. Customers don’t want to pay anything. You make $100 a year off a plugin and still have to support it.”

He’s right.

We built a WordPress plugin four or five years ago and the market was saturated then. Because of the scope of functionality, it was a pain to support and actually cost us to maintain it.

Natural opportunities that are inherently accessible and rewarding don’t seem to exist anymore.

What I’m striving to learn is how to identify hidden opportunities.

Coin showing ancient roman general and pirate

The Pirate’s Advantage

March 5, 2021 / johnhooley

I’ve a friend who is in the early stages of developing an innovative app. Recently, he was disheartened when he was looking in the app store and discovered that someone had already built it.

I’ve been there several times. You think you’ve identified an opportunity or unexploited idea and get really excited. And then a couple weeks into working on it you stumble across someone who has already done it. Fuck!

In our current age, it’s incredibly difficult to find unexploited opportunities.

There are massive incentives to create solutions and few barriers to do so. Products continuously spawn in this fertile environment- all the way down into the crevices of every microscopic niche and razor thin vertical.

First mover advantage is not going to happen for most of us.

But this isn’t bad, because there are some real advantages to being a Johnny-come-lately. Not only should you not be dejected by our high competition environment, you should embrace it.

Because it’s ripe for pirates.

Optimizing for Profit

February 26, 2021 / johnhooley

In the book “Built to Sell” John Warrillow explains how approaching your business as if you’re going to sell it will help you to maximize the value of it- regardless of whether you actually intend to sell the business.

Pretend for a moment that you were going to try and sell your business within the next quarter. What would you change?

It’s like getting divorced- all of a sudden you’re on a diet, in the gym, and doing all sorts of stuff that would have kept you from getting divorced.

Pretty funny.

If you were going to sell, it’s a safe bet that you would clean house:

Updating systems
Updating SOPs
Reevaluating your employees, costs, customers
And seeing what changes you could make to improve your value

All of this in an effort to appear more valuable… really to be more valuable to a buyer.

The thing is:

The opportunity to be more valuable was always there.

The Profit Window

December 31, 2020 / johnhooley

Growth.

Most business owners are obsessed with it.

Early stage entrepreneurs focus on top line revenue. As they gain experience some of them shift priority to profit. As they gain more experience, some veterans shift back to revenue (or back and forth.)

Many entrepreneurs focus on vanity metrics like headcount.

For the past five years, I’ve managed a small team and been stuck under the $300,000 revenue ceiling. The entire time I’ve worked diligently to grow the company and have continually invested in sales and marketing.

Superficially, it doesn’t seem like much has changed. We certainly haven’t grown from the perspective of revenue or number of employees.

But we’re actually much more profitable than we were five years ago.

We’re more productive at creating value.

Profit Isn’t the Bottom Line

December 10, 2020 / johnhooley

Profit isn’t the difference between revenue and costs. It’s not a line item on an income statement that is black or red.

Profit is the capture of excess productivity in value creation.

There’s a functional difference between the ideas.

The first is a measurement which can be gamed. The second speaks to the underlying forces that drive a business.

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