Unscripted - by M.J. DeMarco #

Date Read: 2020-07 #

Notes #

To have no one chasing me and for me to chase no one. It is about how much free time I can have NOW. Not later. Free time now is better than free time later.

Threats to Fuck This Event (FTE)

being too comfortable with status quo
believing you are too good to do x. That x is something you will not do, no matter what.
having too much responsibilities, responsibilities that need consumption, debt
fear of unknown, humiliation, failure, gossiping friends, …. anything.

false beliefs lead to erroneous actions and erroneous inactions. true beliefs lead to actionable knowledge

Belief 1: The Shortcut Scam is the idea that extraordinary results can be achieved by uncovering a secret bypass, and can skirt the real hard work that actually creates the extraordinary result. e.g. infomercial, get rich quick scheme, diet, miracle pills, cheating in online games.

Events (99%) vs Process (1%) e.g. events - action-faking: buying namecards with CEO printed, trivial busywork, data research, reading books.

Process

Intelligent awareness - don’t go looking for “events”. It is the lazy way of your brain’s process
modify expectations and realign the source of difficulty: extraordinary results demand extraordinary efforts. Stop searching for shortcuts
identify and visualize the change target
apply numbers to the goal: e.g. sales, profits, number of customers
identify the daily action target
identify threats to the daily target: what you need to stop doing
identify the correct battlefields: eating healthy is fought at the grocery store, not at the kitchen. playing less games is keeping the game console in the attic.
attack bad habits with inconvenience and/or pain
act until echo: take disciplined action until a feedback loop kicks in. work until you strike your first echo. only then, decide your next step.

Belief 2: The Special Scam: “I’m not good at that”. The belief that talent alone is enough. The belief that talent is immovable, fixed, cannot be improved.

Fixed (99%) vs Growth (1%)

Praise improvement, habits, growth and efforts.

Tiny incremental improvement on yourself
mastery over performance. Not about how you are judged.
avoid comparing to others
don’t listen to people who praise your “talent”

Belief 3: The Consumption Scam: a belief that consuming is not dependent on producing. As kids, you got what you wanted by just asking for it. As adults, thinking that buying this car/house means “I’ve made it”

Consumer (99%) vs Producer (1%)

Debt = Production - Consumption

Producerism - produce way in excess over consumption. Stop looking to take and start looking to give.

lead the herd, not follow it
pave new paths, not harden the well-worn ones
create and sell franchises, not buy them
receive rents or royalties, not pay them
lend, not borrow
create and sell a brand, not buying the brand
hire employees, not seek to be hired as one
sell products on late-night infomercials, not buying them
sell on Black Friday, not buying

Think about process from idea to prototype to on air. Did commercial move you? What would you do differently on the product? Did marketing copy create scarcity? photos? reviews? customer service? trial to ownership of product? Producerism is being a lifelong student of production.

Belief 4: The Money Scam. Money-chasers jump from business idea to idea, job to job, opportunity to opportunity, as if money can be stalked, the next FBA product to be found, the next forex strategy, …

Money (99%) vs Value (1%)

In a transaction, money is just a transaction mediator where agreed perceived value is stored. (Actual value can be very different from the perceived value transacted)
Money can only be attracted by offering perceived value.
Money doesn’t have a brain but its possessors do. It responds to a value stimulus (with biases and prejudices).
Value-vouchers - a store of perceived value produced, communicated and delivered to the world.

Value (product/service creation)
Perceived value communicated (marketing and messaging)
A mutual agreement, an equilibrium with that party (closing)
Actual value delivered (execution)

Belief 5: The Poverty Scam. I’m poor because you are rich.

Selfish (99%) vs Selfless (1%)

Perception is caused by value cheaters.

The fiduciary principle: to create a product/service with actual value that will benefit millions.

Belief 6: The Luck Scam.

Luck (99%) vs Probability (1%)

Play game with better odds, where there is a chance of gold
Effort, Action, Effort, Action, Effort, Action, Effort, Action, …
intuition
breaking routine. introduce the chance of luck.
positivity

Belief 7: The Frugality Scam.

Defence (99%) vs Offence (1%)

a strong offence using controllable unlimited leverage
Use time to create (1). Using time to earn money has a ceiling, no matter how high it is.

Belief 8: The Compound-interest Scam.

Wealth (99%) vs Income (1%)

Why is it not effective?

Time - by the time you find out its not effective, its too late. You give up abundance now for possible wealth later.
Reality - doesn’t take into account risk, yield-peddling conmen, fear.
Inflation - trust is not in the picture. Can the government be a good steward of taxpayers money? Can fiscal policy makers keep inflation from exploding? Can you trust a growing economy for five decades?
Capital-Principle: use the market for income (interest) or capital appreciation (speculation), but don’t hope to get rich here.

Biases

Change adversity: do not prefer the status quo. Opportunity is served on the silver platter of change. Changes in search behaviour, in technology, etc. Being right: your brain prefers to be right, rather than to examine the evidence closely. Don’t fall for it. Don’t be trapped by confirmation bias.

Antithetical apathy: do not fear success. being rich does not mean being evil. beware of mental traps/contradictions you have ingrained. Semmelwashing: being unconventional will draw you a lot of criticism from people who want to be conventional.

Podium popping: Someone else’s pen can’t write your story. It is the ineffective application of various success strategies cherry-picked from individuals who have a broadcast podium. New successes blaze new roads; they don’t trail old ones.

Survival spotlighting: You see the success story trumpeted by the media. But remember to think, there could be many more who tried and followed but could/did not get to tell their story.

Momentum paralysis: being unable to depart from current course of action. Loss aversion + status quo bias.

Bullshit 1: excuses, narrative bias
Antidote 1: socratic questioning. Why do I think this way? Why is that so? Why?
Bullshit 2: Frankenphrases - parroting ideas without knowing what they mean
Antidote 2: does someone have what you want? and how much does it cost?
Bullshit 3: Gurus bearing gifts, shortcuts.
Antidote 3: Gurus should practice what they preach, have skin in the game.

Entrepreneurship lives or dies in your head. Be an entrepreneur. Do (take actions that this identity would do). Have (only after a long process, can you emerge as an entrepreneur)

Meaning-Purpose are the core reasons to go through hardship, criticism and failure. Not from willpower or motivation. (Refer to motivation cycle diagram in the book) M-P is your camel through the desert-of-no-feedback when you start out. Bad advice: “do what you love”, “follow your passion”. Instead, “do what you hate” - a barometer for how much pain and anxiety you will endure. “do what contributes” the moment when people love what you do, it feeds back into the motivation cycle’s feedback loop.

Change your Life:

Identity
Meaning-Purpose
Passion via the feedback loop Possible purposes: Adding value to others, Freedom, Family, Fitness Choose to control, choose to change your life. Not thinking that external events are out of your control.

Fastlane Entrepreneurship

Productocracy - product sells itself without need for advertising

CENTS (Control, Entry, Need, Time, Scale)

Control - FBA business where arbitrary decisions can destroy your business? You have no control in an FBA business. Selling Herbalife, Avon products? No Control. You must control your brand, mailing list, platform.

Entry - the easier the opportunity the worse it is. The harder something is to solve, the greater the opportunity. Things which have been easified become highly visible, and highly competitive. e.g. blogging, forums, self-publishing, affliate marketing, FBA. By this very definition, there is no list, no blueprint. The person who knows, will not share it with you. Only executional excellence can overcome easy entry.

Need - Only in a Utopian world are there no problems, needs, or wants. People who don’t see opportunity can’t see it because they don’t want to see what they need to see: unknown variables, new skills, hard work, trial and error, risk, and failure.

Money moves only when there is a value skew. Underneath this competition is an array of value attributes, which characterizes all market offers. Examples - Price, Professionalism, Price Ambiguity, Compelling Story, Ease of Ordering, Label Design, Website Design, Affliations, Cleanliness, Customer Service, Guarantee, Clean Photos, Refund Policy, Public Reviews, Included/Excluded Ingredients, Endorsements, …, (think of any and everything because value attributes affect people differently)

To engineer a value skew, (1) examine your product and identify every value skew, (2) examine all secondary attributes, the product’s marketing and delivery.

6 Value skew myths

the market myth - business owner who does not see relative value as a success metric, “doing what he loves”.
the isolation myth - when business is isolated by one value attribute, price, it becomes commodified.
the blockbuster myth - thinking there will not be competition by being the first to market.
the crowded-room myth - thinking that idea is no good because someone is already doing it.
the empty-room myth - thinking that idea is no good because there is no market for it. (4) + (5) = entrepreneurial circle jerk, because all ideas fall into one of the two categories.
the use myth - no where does it state that you have to be an avid user of the product you sell

Finding FE ideas - two sources of ideas - innovation (doing something never done before), or improvement (tread an existing path but do it better by skewing value attributes)

Language - people saying “I hate …”, “This sucks …”, …
Inconvenience
Simplification/Easification
Wants - luxury opportunities where demand is influenced by marketing
Service Gaps
Geographical arbitrage
Crowdfeeding entry violations - in a gold rush, sell shovels.
Value arbitrage, 9) repurposing - raising something of low value by fixing it up
Marketing arbitrage - using an underleveraged asset and using it more effectively
Overcapitalism - business models that serve the shareholders more than the customer, hence creating opportunity
Improvement and Removement - improve by changing a part or removing one
Domain experience

Time - your value must exist in space-time separate from you. your enterprise must exist in space-time without you. Passive income is the outcome of all the effort placed into systems in your enterprise’s early years and processes. Focus on this legacy value system. Legacy Value Systems (LVS)

Money systems - using money to make money. works only if you already have millions.
Digital Product Systems - ebooks, pdfs, youtube, blogs, podcasts, website templates, skins, scripts. SaaS, internet platforms, mobile apps, enterprise software, video games.
Product Systems - food products, clothing, cosmetics, books, inventions, gadgets
Rental systems - rental real estate, rental services(party, heavy equipments), parking garages, licensing. Human Resource systems - a system that requires people for operation, e.g. restaurants, consulting,

Legacy Structures - perpetual systems that support your LVS. e.g. podcasts, interviews, forum posts. Legacy’s price is your time - lots of it.

Scale - 4 components

LVS
Replication
Mass or magnitude
Profitable impact within 1 year

To get started, you have to impact one customer profitably. The market size you serve should be large enough, to get a better Expected Value (EV), in spite of higher chance of failure. Do you own a business that pays bills for a month or for a lifetime? In either business you’re going to have to work very hard, so make sure it is worth it. EV is the outcome of many occurences. There is no try. Taking a shot is like playing lottery. Three basic scaling strategies:

Customer Strategy - selling direct
Unit Strategy - chains, franchising, licensing
Channel Strategy - selling wholesale to decision makers of the channel

Kinetic Execution - “just wing it” - You don’t know what’s needed until you need it.

The Marketmind
The 3 A’s
The 7P’s of Process The Marketmind - the market cannot be forecast, predicted or tamed. Engage it. Act, Assess, Adjust - one problem at a time. Listen to the reactions, either no reaction or uncensored feedback/complaint. Assess these feedbacks. Plan, Path, Proof (Soft), Prototype, Proof (Hard), Productocracy, Propogate. Plan, Path - does your idea fulfil CENTS commandments? Proof (Soft) - verify your idea with the Marketmind before spending more.

Verify by

Language patterns - “I hate …”. Beware: just because people hate something doesn’t mean people will pay for the solution.
Channel Research - e.g. looking up sales, reviews for a similar product on Amazon.
Search Volume - look into CPC, Keyword Planning tools to see how many people search for such a product.
Ask/Interview the market - find a congregation of your marketmind and expose them to your idea. e.g. subreddits or targeted Facebook ads/groups
Market Simulation - present your market as if it already exists. One method is the Landing Page. A one-page sell sheet solely for the purpose of collecting email addresses or pre-orders. Another way is to have an order page that presents buyer with “Sold Out”. Beware: interest and commitment are not the same. Captured email addresses are circumstantial soft proof; cash is verdict and hard proof. Mock prototyping is another method. Create a nonfunctional version of your idea and ask the market using a method above. Or you could get influencers to market your product and find out their audience reaction to it.

Process Path - draft out your tasks and subtasks

Prototyping - after outlining the process path and confirming soft proof, you need a functional prototype. It must be valuable and economically demandable. Expect a lot of just-in-time learning. Build at the end, from the customer experience. Beware: the desert of desertion, as you might not get feedback while you work on your prototype.

Proof (Hard), Productocracy, Propogate - Occur within the customer lifecycle

Awareness: Exposing your product to target. e.g. through ads
Evaluation: Provide your customer with enough info to make a decision. e.g. website, search, white paper
Onboarding: Converting strangers into prospects by securing them into your marketing ecosystem. e.g. customer provides email address or signs up for free trial.
Purchase: Converting prospect to customer. e.g. customer converts from free trial to paid premium or buys your product after being emailed free content
Use: Manage and monitor how your customer uses your product. e.g. renews or reorders; asks for a variation you do not have
Engagement: Relationship building with customer for retention and/or repurchase. e.g. sending a periodic email about trends or topics within your industry
Discipleship: Creating loyal customers who become evangelists for your company, hence fulfilling the productocracy. e.g. your customer shares and recommends your product in social media.

Pushing Proof (Hard) - a long process. Awareness, Evaluation, Onboarding. Listen to the Marketmind Use crowdfunding platforms only if you already have a solid offer. If the market is silent, (1) check your channel and targeting options, (2) check your reach.. you need a large enough sample size, at least 10,000 impressions and/or 1,000 clicks, (3) check you message, copy, offer, call to action, UI.

Productocracy - confirm if actual value is delivered (worthy of discipleship) over perceived value (worthy of nothing). If not, keep listening and skewing value.

Propagation - when productocracy is confirmed and disciples start evangelizing. Add fuel to the fire by reach expansion, channel expansion, network expansion. Reach expansion - expand product awareness, e.g. paid marketing, social media initiatives, provide valuable content FOC as contributor or guest articles on Medium, Quora, etc. Channel expansion - adding locations where the product is sold. Network expansion - networking, partnering with others, business development, affiliate marketing, win-win joint ventures. Find partners who share a similar purpose synergize your effort.

Best Practices

Expect difficulty and deviation from your original plan. Listen to the market.
Work on only one idea
Your life will not be balanced initially. Expect 10-12hr days, 30 days in a row.
Find a supportive environment
Gatekeepers are dying; don’t ask for permission. Check with the marketmind directly.
Build a Brand likened to a personality.
Be consistent with the brand you build
Selling, Marketing, Communication, Copywriting, Negotiation. Learn them all. Tell a Story. Humanize your corporation, add informal/playful faces to “About Us”. Engage on social media. Appeal to self-interest, meaning and purpose, sell benefits. Prioritize social proof. If you receive an email, ask them to leave a review, permission to use it
Shelve your biases and use what works. Being rich is more important than being right.
Forget about SEO. With great content comes great SEO.
Avoid Fads or Trends, unless you just want the experience
No politics in business. You will lose half your customers.
You will be criticized

4 Disciplines

Comparative Immunity - Comparison is future oriented and focused on what is missing, creating anxiety. Gratitude is present oriented and focused on what you have, creating peace. Which parts of your life are susceptible to comparison rituals?

Purposed Saving - towards goals of UNSCRIPTED, passive income, early retirement,…

Measured Elevation - if you have to do a lot of mental calculation to determine if you can afford something, it means you actually can’t afford it. Reward yourself and be reasonable

Consequential thought - impulsive actions (events) have the potential to ruin your life, undoing many years of work. Negative people or influences, no matter their label (family, coworker,…) should be cut off. Think before acting, …, is the worst case consequence acceptable?

The money system

3 pots

“fuck you” pot - cash to get whatever you desire. whatever you can put at risk to lose.
home pot - own a home free and clear
paycheck pot - passive income system

7 Paycheck pot rules

Rent rule - capital is allocated to collect rent, not for growth or appreciation
Snap rule - Capital should be placed in a liquid instrument
Apocalypse rule - capital should be managed in institutions that are “too big to fail”. When things go wrong, you can be sure that everything is going to meltdown
“3 years in 3 months” - if you earned 3 years of dividends in 3 months, consider selling
“Admiral Ackbar” rule - if it sounds too good to be true, it’s a trap. Dividend traps: 20% dividend yield? something is going to blow up soon. If you choose to invest, its a speculative one, i.e. belongs to the “fuck you” pot.
Always go for low fee funds
“Ostrich” rule - if the business is out of touch with current cultural or economic climate, choose another business. Also applies if it is a fad or trend company. e.g. Radioshack, Nokia, Peloton, Chesapeake Energy.

Based on this 7 rules, this author placed 100% of paycheck pot assets into income producing assets.