On greed and speed
Here's a pattern I see a lot:
1. Somebody launches something
2. He tries to make money
3. Then he tries to make it valuable and useful
What a funny way of doing things.
Everybody seems to be in a big fat hurry to make money. I call this greedy, but not in the traditional sense of the word. It's greedy because I don't think it should be the first thing on anybody's mind. This kind of thinking is short-sighted, often self-defeating, and ultimately results in less money.
Fame-related greed
Who can forget the spat between our friends at Desperate Housewives last year? On the heels of their unbelievably successful shows, they were invited to be photographed for the cover image of Vanity Fair. But the actresses got into a fight about who would take center stage, resulting in a huge PR blowup for all the actresses.
This is greed. When you get so successful that you're fighting over who stands where for a Vanity Fair covershoot, you're being greedy.
Relative greed
I know a hedge fund in the Bay area where, last year, the employees were absolutely furious. Why? Because their bonuses were only 30%--not 50% like their friends at other funds.
Pissed off because you're "only" making six figures in your early 20s with relatively reasonable hours?
That's greedy.
The surprise of greed in personal entrepreneurship, or, stop trying to make money so soon!
You've seen AdSense on other blogs, right? It's the Google ad solution that a lot of bloggers put on their blogs to make money when people click through. It's an innovative, seemingly win-win solution for everyone.
But to me, this represents a lot of what's wrong with short-term thinking and greed on the part of bloggers. You know why I haven't put AdSense on my site? Because, first, I didn't want to ruin the customer experience.
Second, I knew that once I put ads up, I'd focus on optimizing the ads rather than creating content. In other words, I'd focus more on trying to make money than actually improving the site.
And finally, and most importantly, I wanted to build something valuable before I went around trying to profit from it. A place where I could get a bunch of people together to talk about personal finance.
(Incidentally, the dirty secret of bloggers and AdSense (or other ad solutions) is that most bloggers are making very, very little.)
So I decided a long time ago, before I had even 100 readers, that I was absolutely only going to put ads up if I'm making more than my rent every month. Otherwise, what's the point? To show you I mean business, I surveyed IWillTeachYouToBeRich readers a while ago about your thoughts on seeing ads on this site (see the results). Surprised? So was I. But the key is that I did this after spending lots and lots of time focusing on making something useful.
Not by trying to make money the first second I could.
Make the right long-term decisions, not the ones that give you $10 and some gummi bears
Next time you have some opportunity, STOP THINKING ABOUT HOW TO MAKE MONEY OFF IT IMMEDIATELY. PLEASE!!!!!!!!!
When I started college as a freshman, I had been running a business and had some experience, blah blah blah. Back then I got offers to consult for $15/hr, which was a lot of money for me. I took some of them because they were interesting and I thought they were valuable in the sense of meeting good people and opening the doors to more opportunities. Others were just for cash.
Let me say that again: They were offering only one thing--cash. I'm not interested in doing anything anymore for just money. And so I said no to some of them.
As I got older, the amount went up to $30, and then $50, and then higher. And soon I started thinking about things in a weird, contorted way. I would look at a shirt in the store and say "that's only an hour of work." And right then, I knew I was focusing too much on money and less on creating something useful and valuable.
It might seem weird to hear it from a guy who runs a site called I Will Teach You To Be Rich. But I hope it's clear what I'm saying: Please, think less about the money. Think more about value.
The money will come. It will come in gobs and gobs of money if you are (1) passionate about what you do and (2) are really good at it.
It turns out that I made some good decisions and some bad ones. Some of them made me some money, and that was that. I consider those the bad decisions (they were only good in that they taught me what not to do). The really good ones opened doors that I never could have opened myself. And now I look back and am thankful that I made certain decisions, because the payoff--financially and in terms of knowing people and having interesting experiences--was more than $20 or $50 an hour could have given me.
Think about value creation. Not money. That will come.
Money is easier to get than you think. It's relatively easy to make $20 or $50/hour or whatever. It's really hard to make something useful and lasting. If you've got a community around whatever you're doing, or people who comment on your blog, or emails from people who have written to you thanking you or asking you questions, or whatever you consider value, that's a huge step in the right direction. It takes time and patience and foresight to build value, and you'll be handsomely rewarded beyond small chump change.
The bottom line
I promised I wouldn't make this personal-entrepreneurship section about VCs and term sheets. It's about regular people like us trying to do something special. So here's what I think: Build something great. Do this first. Be patient and slowly get people to come to your site/store/business/talk/whatever. Don't start trying to sell something immediately. If people don't come, figure out why. Adapt and listen.
It's not about the money--although you'll get plenty of it when you create something lasting.
There's more of this, and other ideas, in my series on personal entrepreneurship.
