The 4-Hour Work Week by Tim Ferris

My Notes on “The 4-Hour Work Week” by Tim Ferris:

Different is better when it is more effective or more fun.  If everyone is defining a problem or solving it one way and the results are sub-par, this is the time to ask, What if I did the opposite. Don’t follow a model that doesn’t work.

Most cold calls don’t get to the intended person for one reason: gatekeepers. Make all your calls from 8-8.30am and 6-6.30pm for a total of one hour to avoid secretaries and book twice as many meetings as senior sales executives who call from 9-5. Twice the results in 1/8 of the time.

Emphasise strengths, don’t fix weaknesses

• It is far more lucrative and fun to leverage your strengths instead of attempting to fix your weaknesses. The choice is between multiplication of results using strengths or incremental improvements fixing weaknesses that will, at best, become mediocre.

It’s lonely at the top

• 99% of people in the world are convinced they are incapable of achieving great things, so they aim for the mediocre. The level of competition is thus fiercest for “realistic” goals, paradoxically making them the most time and energy consuming

Doing big things begins with asking for them properly

• “What do you want?” “What are your goals?” is too imprecise to produce a meaningful and actionable answer.  The opposite of happiness is boredom so, even better than quest for happiness is a quest for excitement. So, a better question is “What would excite me?”
• What to do next: Dreamline your ultimate lifestyle with a 6/12 month time period

How to Increase Productivity

• Key to Productivity: What you do if infinitely more important that how you do it
• 80/20 principle: More customers is not automatically more income. More customers Is not he 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.
• Being busy is a form of laziness – lazy thinking and indiscriminate action.  Being selective – doing less – is the path of the productive. Focus on the important few and ignore the rest.
• At least three times a day at scheduled times ask yourself “Am I being productive or just active?” “Am I inventing thing to do to avoid the important?”
• Define a short to-do list and define a not-to-do list
  • If you had a heart attack and had to work 2 hours a day, what would you do?
  • If you had another heart attack and had to work 2 hours a week, what would you do?
  • If you had a gun to your head and had to stop doing 4/5 of different time-consuming activities, what would you remove? (email, customers, meetings?)
  • What are the top 3 activities I use to fill time to feel as though I’ve been productive?
  • Learn to ask “if this is the only thing I accomplish today, will I be satisfied with my day?”
  • Do not multitask. If your prioritise properly there is no need. Stick to 2 tasks for the day
  • Shorten schedules and deadlines to force focused action and prevent procrastination
• Use Batching to deal with repetitive by necessary time consuming tasks that interrupt and distract (switching gears to resume a major task after an interruption can take 45mins)

Low Information Diet

• Ignorance may be bliss but it is also practical. It is imperative you learn to ignore or redirect all information and interruptions that are irrelevant, unimportant, or unactionable. Most are all three.
• Most information is time-consuming, negative, irrelevant to your goals, and outside of your influence.

How to remove interruptions

• Check email twice per day, once at 12 noon and once at 4pm. Never check email first thing in the morning. Instead, complete your most important task before 11am to avoid using lunch or reading email as a postponement excuse
• Set up autoresponder “Due to high workload, I’m only checking my email twice a day… If urgent, call my desk”
• Set up voicemail “Due to high workload, I’m only checking voicemail twice a day…  If urgent, call my mobile”
• Move to once a day as soon as possible
• This autoresponse tool far from decreasing collective effectiveness, forces people to re-evaluate their reason for interrupting you and helps them decrease meaningless and time-consuming contact
• If someone interrupts you at your desk “Hi John, I’m right in the middle of something. How can I help you out?”
• Don’t encourage people to chitchat and don’t let them chitchat. Get them to the point immediately.
• Master the art of refusal and avoiding meetings
  

How to Create Automation

• Learn how to be the boss – a litmus test for entrepreneurship: Can you manage (direct and chastise) other people? Given the proper instruction and practice, I believe so.  Becoming a member of the New Race is not just about working smarter. It’s about building a system to replace yourself.
• “If I can do it better than an assistant, why should I pay them at all? Because the goal is to free your time to focus on bigger and better things.
• Even if the cost is occasionally more per hour than you currently earn, the trade is often worth it. If a top notch assistant saves you one full 8 hour shift per week after you subtract what you’re being paid it may only cost $40 to free an extra day. Would you pay $40 per week to work Monday to Thursday? Yes
• Eliminate before you delegate.  Never automate something that can be eliminated, and never delegate something that can be automated or streamlined. Otherwise, you waste someone else’s time instead of your own, which now wastes your hard-earned cash.
• Principle number one is to refine rules and processes before adding people. Using people to leverage a refined process multiplies production; using people as a solution to a poor process multiplies problems.

Tips for managing your VA

• Don’t accept the first person the firm provides, make special requests from the outset – “excellent English” because phone calls will be required (even if they won’t). Request replacement if there are repeated communication issues
• Give precise directions. Ask foreign VA’s to rephrase tasks to confirm understanding before getting started.
• Don’t give a licence to waste time. Request status updates after a few hours of work to ensure the task is understood and achievable
• Set the deadline a week in advance. Use Parkinson’s Law – no more than 72 hours, best productivity probably comes from 24 or 48 hour deadlines.
• Send one task at a time so they are prioritised. And remember: eliminate before you delegate
• What tasks to delegate: What has been sitting on your to-do list the longest?  What causes you the most frustration and boredom?
  

Find a niche then find a product

1. Pick an affordable reachable niche market

• Creating demand is hard. Filling demand is much easier. Don’t create a product, then seek someone to sell it to. Find a market – define your customers – then find or develop a product for them.
• If you start off aiming to sell a product to car lovers, stop. It’s expensive to advertise to such a broad market, and you are competing with too many products and too much free information.  If you focus on a restoration product for antique Fords, on the other hand, the market and competition shrink, making it less expensive to reach your customers and easier to charge premium pricing.
• Low media cost and lack of competition enables you to dominate niches. It is more profitable to be a big fish in a small pond than a small undefined fish in a big pond.
• Find profitable niches by asking yourself: Which social, industry and professional groups do you belong to, have you belonged to, or do you understand, whether dentists, engineers, rock climbers, recreational cyclist, dancers, restaurateurs or other. Then ask “what groups of people purchase the same? Which magazines, websites, newsletters do you read on a regular basis?”

Then: Which of the groups have their own magazines?  Call their advertising directors, get their rate card and back issues, search the back issue for repeat advertisers with 0800 numbers and websites, the more there are, the more profitable the magazine for them… and us

2. Brainstorm (do not invest in) products

• Pick two markets
• Pick a magazine for each market with full page advertising less than $5000 and with no fewer than 15,000 readers.
• Brainstorm to find products. The goal is to come up with well-formed product ideas and spend nothing.
• Explain the main benefit of your product in one sentence or phrase. How is it different and why should you buy it? Eg Apple iPod “1000 songs in your pocket”
• Should cost $50-$200: higher pricing means fewer units, thus manage fewer customers, lower-maintenance customers with better credit, fewer complaints/questions, fewer returns etc, higher profit margins, safer. Aim for 8-10x mark-up.  However, if the per unit price is above a certain point, prospects need to speak to someone on the phone before they are comfortable enough to make the purchase.
• It should take no more than 3 to 4 weeks to manufacture
• It should be fully explainable in a good online FAQ
• Product Options:
  • Resell a product
  • License a product
  • Create a product – information products are low-cost, fast to manufacture, and time-consuming for competitors to duplicate

What is an expert?

• “Expert” in the context of selling product means that you know more about the topic than the purchaser. No more. It is not necessary to be the best – just better than a small target number of your prospective customers.
• 3 Main Options:
  • Create content yourself by paraphrasing and combining several books on a topic
  • Repurpose content that is in the public domain and not subject to copyright protection such as a government documents and material that predates modern copyright law
  • License content or compensate an expert to help create content eg 5-10% of revenue
• For option 1 and 2 you need expert status within a limited market. If you read and understand the 3 top selling books on home-page design, you will know more about that topic than 80% of the readership of a magazine for real estate brokers.  If you can summarise the content and make recommendations specific to the needs of the real estate market, a 0.5-1.5% response from an ad you place in the magazine is not unreasonable to expect.
• Aim for a combination of formats that will lend itself to $50-$200 pricing, such as a combination of 2 CD’s (30-90mis each), a 40 page transcription of the CD’s and a 10 page quickstart guide.
• What experts could you interview to record a sellable audio CD? They don’t need to be the best, just better than most – offer them a master copy of the interview to do with or sell as they like (this is often enough). Send the mp3 to a transcription service

How to become an expert in 4 weeks

• Join two or three related trade organisations with official sounding names.
• Read the three top-selling books on the topic
• Give one free one-to-three hour seminar at university, using posters to advertise. Do the same at 2 well known big companies, tell them you have given seminars at the university and you’re a member of those trade organisations. Emphasise you are offering it for free for additional speaking experience outside of academics and will not be selling products or services. Record the seminars from 2 angles for later potential use as CD product
• Optional: Write one or two articles for trade magazines citing what you have accomplished in steps 1 and 3 for credibility
  

Testing your idea

• Intuition and experience are poor predictors of which products and businesses will be profitable, as are focus groups. Ask ten people if they would buy your product, then tell those who said “yes” that you have ten units in your car and ask them to buy.  The initial positive responses, given by people who want to be liked and aim to please, become polite refusals as soon as real money is at stake.  Don’t ask if they would buy – ask them to buy – that’s all that matters.
• Micro-test using inexpensive Google Ads to test consumer response to product prior to manufacturing
  • Best: Look at the competition and create a more compelling offer on a basic 1-3 page website (1-3 hours)
  • Test: Using Google Adwords
  • Divest or Invest: Cut losses and manufacture winners for sales rollout
• How to differentiate: more credibility indicators? Better guarantee? Better selection? Free or faster shipping?
• Page One: Create a one-page (300-600 word) testimonial-rich advertisement that emphasises your differentiators and product benefits (collect ads that have caught your attention in print or online). “Purchase” button at the bottom.
• Page Two: Pricing, shipping and handling (so confirmations reflect real orders not price checkers) and basic contact fields (email, phone). If the visitor presses “continue with order”…
• Page Three: “Unfortunately, we are currently on back order but will contact you as soon as we have product in stock. Thank you for your patience.”
• This structure enables you to fest the first page ad and pricing separately.
  

More Autopilot Tips

• Don’t put yourself in the diagram of your organisational structure.
• Ensure a business architecture that is scalable – that can handle 10,000 orders per week as easily as 10. Doing this requires minimising your decision-making responsibilities
• Phase 1: 0-50 total units of product shipped.
  • Do it all yourself. Take customer calls to determine common questions that you will answer later in an online FAQ
• Phase 2: >10 units shipped per week
  • Add the extensive FAQ to your website. Find local fulfilment company who can respond to order status email (ideal) or phone calls from customers.  To lower or eliminate misc fees, explain that you are a start-up and your budget is small and that you need the cash for advertising that will drive more shipments (mention the competition)
• Phase 3: >20 Units shipped per week
  • Outsource to end-to-end fulfilment houses that handle it all from order status to returns and refunds. Decide if the extra revenue from phone orders is worth it – force them to order online
• Minimise the number of decisions your customers can or need to make
• Offer one or two purchase options (basic and premium) and no more
• Offer one fast method of shipping at a premium price
• Eliminate phone orders, direct all prospects online
• Do not offer international shipments
• Prevent problem customers from ordering in the first place
• Never negotiate pricing or approve lower pricing for higher-volume orders (cite “company policy”)
• Offer low-priced products instead of free products to capture contact information for follow-up sales. (Offering something for free attracts time eaters)
• Offer a lose-win guarantee instead of free trials – eg 200% money back that makes it profitable for the customer even if the product fails.  50 years better than 5 years – provide as much time as possible to consider or forget the product
  

How to look big when you’re not

• Don’t be the CEO or founder – give yourself a mid-level title like Vice President of Sales (better not to appear as the ultimate decision maker in negotiations)
• Multiple email and phone contacts that forward to you initially
• Hire remote receptionist (Interactive Voice Response)
• Don’t provide home address

Recommended Books

• Secrets of Power Negotiating: Inside Secrets From a Master Negotiator – Roger Dawson
• www.ResponseMagazine.com
• Jordan Whitney Greensheet: www.jwgreensheet.com – Direct Response secrets