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Knowing vs. doing: Let’s compare these 2 friends who try to earn more

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I like this guest post from Erica Douglass (of Erica.biz) — about 2 guys who are trying to sell the same product — for 3 reasons:

  1. She learned about it from a guy whom she traveled to meet. She’s an entrepreneur, so she knows about investing in herself
  2. “Sticking with it” is one of those things we all claim we know, but when it comes down to it, most people flake. Knowing vs. doing are two VERY separate things
  3. Erica happens to have extra credibility with me. Beyond her selling a company for over $1m at age 26, she gave me some advice less than 12 months ago that has paid off in tens of thousands of dollars of revenue for me. But the key was DOING what she said, not just nodding and saying “thanks” or hanging up the phone and reading Reddit again.

Read on…

Erica: Do you know someone who’s given up?

“I was in a meeting with a multi-millionaire last week. He is a person who came from nothing; he grew up dirt-poor in the ghetto. Now he makes several million dollars a year. He runs his own business from a small office and has traveled around the world speaking to hundreds of thousands of people.

I paid him a significant amount of money to learn his story so I could replicate it. He is now one of my success coaches.

I spent a weekend with him and a small group at his second home on Lake Texoma (on the Texas/Oklahoma border.) Not only did I come out of the weekend understanding how to grow my next business to $1 million a year in sales by the time I am 30 (which has been one of my goals for years), I gained a massive amount of insight into why most people are not successful.

He used a story to illustrate: two people who set out with the same goal. Since he came from a direct sales background, he used that as an example, but the example works for any industry — including yours.

Two people set out with the same goal. Let’s call them Max and Min. And let’s say they both are selling the same product. Maybe they are both distributors for the same company, or they both run companies in the same industry.

Max and Min work together and set a goal. They are going to contact three people every day who expressed an interest in their product, and their goal is to get those people to start saying “yes”.

Max and Min both start out motivated. They each contact three people on the first day. Then they check in with each other. “How’d you do?” Min asks. Max replies, “Well, they all said no.” Min commisserates. “Mine did too.”

Neither one is ready to give up. They set out again the next day. They each contact three people, and then they check in. “Nope,” Min says. Max nods. “Same here.”

This pattern continues for weeks. They both start reading some books on how to close sales. Finally, around the same time, Min closes a sale, and so does Max. They go out to celebrate.

Then, crap happens. Min gets distracted. “I’m not really making any money with this,” he tells Max. “I’m only making about $50/month after all my expenses are paid. And my family still needs a roof over its head, so I’m going to go find a job.”

Max says, “Good luck, buddy.” He’s not really making any more money than Min, but he sees something that Min doesn’t. The person who said yes is now paying him $50/month in passive income. Surely, if he got one yes, he can get more.

Max spends more time. Each day, he contacts three people. And most of them are still saying no. But things are changing. He’s still reading success books and learning like mad, and he notices that more people are starting to say yes. He’s not making much money, but he senses that he’s about to break through.

18 Months Later…

18 months elapses. Min has found a job that pays pretty well, and his family is happy. He figures he’s doing pretty well for himself, and decides to call up his old buddy Max and invite him out to dinner.

Min arrives first. Then, he sees a brand new Mercedes pull up outside. And who hops out but Max, who tips the valet handsomely and comes in in a nice suit to meet Min.

Min is shocked. He can’t find words at first. He finally manages to gasp, “What happened to you?”

Max just grins. Then he says, “They said yes.”

Get the First Yes

Turns out, if you can get one person to say yes, you can get hundreds or thousands to say yes.

What do you want people to say yes to? Maybe you want them to subscribe to your blog or buy your product. It would be great if they signed up for your email list, or became your partner in some way. But it’s probably discouraging how many people are saying no.

Don’t give up. Get that first yes. From then, it’s just a matter of listening, learning, and continuing to ask.

I find it takes at least 18 months from when you start to when you really notice that people are saying yes. After 12 months of running my hosting company, I was making the grand total of a little over $400/month gross.

But nearly 6 years into it, we did over $76,000 in sales in one month.

I have friends who started web hosting companies when I did. But they all gave up and decided it wasn’t worth it before they “broke through”. Every single one of them had at least 5 people who said “yes.” If you can get 5, you can get 500. Once you get 500, you know how to get 5,000. It just takes time, a personal commitment to hustle every single day, and a willingness to listen and learn.

Do I believe that every single one of you can build a million-dollar business? I do. I just think most of you give up too quickly.”

About Erica: After selling her online business for $1,100,000.00 at age 26, Erica Douglass “temporarily retired.” She now shows you how to grow your own business to $1,000,000 via her online business blog. Quick link: Download her free Blog Success Manifesto — 30 tactical tips to grow your blog faster than you ever have before.

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46 Comments on "Knowing vs. doing: Let’s compare these 2 friends who try to earn more"

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Daniel
6 years 11 months ago

Ah. I gotta admit that I got my 3’s then in less than a month got my 30’s (Yes’es that is). But I jumped ship.

This no longer is an “inspiration” story. But needs some sinking in to realise that this stuff do happen.

Glad that you’ve shared this article Ramit and to the author, Erica. 🙂

Arun
6 years 11 months ago

It has been two years of being on my own with my blogging, writing and photography. Though I haven’t found much success, I am slowly beginning to get better at doing things. Although I never intend to quit, there are times when I feel shaken. Reading through stories like this always puts me back on track and makes me take the next step. Thanks.

JM
JM
6 years 11 months ago
So…instead of spending 18 months not earning money for his family, Min did something that made his family life livable and is somewhat satisfied with his work and this is a bad thing because he didn’t ‘get rich’ ? I guess whoever gave her this story was also reading their ‘success books’ because it follows the same format as all those. This could’ve easily been some lame Jack Canfield story. I’m glad your friend’s company did well and I do agree that persistence and experience are much more valuable than only knowing something but I think this story is a… Read more »
Kim Crouch
Kim Crouch
6 years 11 months ago

Great story between knowing and doing. But a better story about the power of determination and sticking with it. For most people, the day to day struggles have a way of interfering with dreams and this is a good story of why you should not let that happen.

JM
JM
6 years 11 months ago

I won’t go on about your friend’s post; it just left a bad taste in my mouth for some reason.

I’ve read that post by Ben and completely agree. His blog is excellent – he’s great about breaking himself down and encouraging others to do the same and goes beyond the standard SEO, list-based format of most people who are just trying to make a buck off a blog.

Matt
Matt
6 years 11 months ago

I’m with JM to a degree. I like Erica’s writing on her blog, and the general point in this post is valid, but the story comes off as insubstantial. It’s not congruent with the main argument presented in the post. There are more effective ways to describe the power of persistence than by rebuking a guy who quit a job that was allowing him to put food on the table for his family. The guy’s making $50 a month. What’s he supposed to do? Sometimes you can’t afford to slave away for 18 months before the money starts rolling in.

Joes Money
6 years 11 months ago

Persistance is key. When trying to get ahead of the crowd, simply staying in the game past some of the bumps along the way puts you ahead of 85% of folks out there. Stick with it!

FYI – Thanks for the great book, it was part of the reason I decided to start my site.

Nate
6 years 11 months ago
I don’t really think the story is misguided at all. It points out the following: 1. Most people give up too soon. They expect immediate results and if they don’t get them they quit. A lot if it is out of fear. Fear of failure, fear of not having money for your family, etc. I think it’s just as fair to call out BS on comments such as ‘Oh, well Min had to support his family so what he did was good.’ Nobody is saying it’s not good. The point is Max continued on and overcame some initial sacrifices to… Read more »
Sabrina
Sabrina
6 years 11 months ago
I think there is a disconnect between going all in, building upon your Yes’s and also managing the risks and supporting for your family. So this isn’t exactly a statement about Knowing vs. Doing but rather a statement about mitigating risks between one’s life obligations and the potential for more, for greater. The people who can manage that win in the end. Check out this book The Leap for amazing, successful people who managed risk and still reaped huge rewards: http://www.amazon.com/Leap-Simple-Changes-Propel-Career/dp/1591842565 Erica’s writing, in general, grates against me like nails on a chalkboard (dig up the old post about offering… Read more »
Tina
6 years 11 months ago
This post from Erica feeds into the “dream” that too many people have of working their plan and believing it will eventually pay off without truly having a plan. At some point when feeding a family, we must join the reality of working the dream AND the job that is funding the dream. I am in that crux currently since I have a non-profit that I founded and a dream business. My business is unique and I found a niche that has not been tapped into. Yet, I have 3 mouths at home to feed and support. What do I… Read more »
Oleg Mokhov
6 years 11 months ago
Hey Erica, Being persistent + PASSIONATE is the ultimate combination to achieve your goal easier and faster. As some have mentioned here, that isn’t meant to sound fluffy. What I mean is that being persistent and doing (rather than merely knowing) is a crucial part of the plan, but only a part of getting results easier and faster. You also have to be passionate about what you’re doing. That makes a world of difference in making it easier to not give up. You don’t have to force yourself as much, because you love the activity itself. You’d do it even… Read more »
Kevin
Kevin
6 years 11 months ago
I’m sorry, but all I could think about as I read this “story” is that it’s the exact kind of dishonest fluff that MLMers use to keep their downline from realizing they’re wasting their time. Their recruitment meetings use this exact same kind of propaganda to attract new suckers. They show you videos of young, attractive people driving exotic cars and showing off huge mansions, all the while saying “all this could be yours, unless you’re a quitter!” Blech. This whole post left a terrible, terrible taste in my mouth. Why’d you have to give it the direct sales slant?… Read more »
Erica Douglass
6 years 11 months ago
“The guy’s making $50 a month. What’s he supposed to do? Sometimes you can’t afford to slave away for 18 months before the money starts rolling in.” Of all the comments so far, this is the question I want to answer, because I’ve been there. Notice I said my web hosting company was making ~$400/month after 18 months. Obviously that wasn’t enough to support my daily life. So how did I make ends meet? I used craigslist to find web development consulting jobs and charged per hour. I did that work 20-25 hours a week. I lived far beneath my… Read more »
Kym
Kym
6 years 11 months ago

Yeah, try finding a consulting job that pays more than $5/hour, without any prior consulting experience or portfolio, now that everyone’s figured out they can find someone in a third-world country who’s happy to work for nothing.

Just wanting something doesn’t make it feasible. I’m not willing to quit my day job, which is not all that bad really (I just hate having to be in a certain place at a certain time), only to have to work 120-hour weeks for the first year or so just to get by.

Nikc
6 years 11 months ago
I’m friends with a lot of artists and musicians who are fairly dedicated to “Doing” but never seem to get anywhere with their art. They would be better suited to stop “doing” for a while and start promoting themselves. I guess what I’m trying to say is that many people can live up to the challenge of working hard everyday with little-to-no gain, but to get somewhere you also have to put yourself in a position where you are asking for “Yes”. Even if you get a “No” you are still in a better position than if you never asked… Read more »
Brian
Brian
6 years 11 months ago
I feel like most of what needed to be said has been said already, but grant me one personal reflection… At my office, I am one of 12 sales people, all 100% commission based. Almost all are easily getting into 6 figures a year. I don’t. And I consciously don’t (even though it irks some of my coworkers). I got into the industry to be able to CHOSE my clients. To have the freedom to say ‘im don’t feel like going into the office today, i’m going to ________” (Insert your passion activity) Some people don’t understand it. Sure the… Read more »
Erica Douglass
6 years 11 months ago
Tina wrote: “I am in that crux currently since I have a non-profit that I founded and a dream business. My business is unique and I found a niche that has not been tapped into. Yet, I have 3 mouths at home to feed and support. What do I do, work like crazy on all of them.” Tina, if you’d like, feel free to email me more details (I’m at erica AT erica dot biz) and I will give you some advice as a blog post. I’d need more information about what your businesses are and where you would like… Read more »
Ben
Ben
6 years 11 months ago

RE Kevin:
Could you please point out where they mentioned anything about MLM sales?
“Let’s call them Max and Min. And let’s say they both are selling the same product. Maybe they are both distributors for the same company, or they both run companies in the same industry.”
They could be selling cars, tupperware, newpapers, widgets, or anything else yet you negatively assume they are doing some sort of scam?

Mr.  Twenty Twenty
6 years 11 months ago

Hey Erica,

Great post and GREAT ATTITUDE! That is what I like about you. Anybody can whine, it takes ATTITUDE and INTELLIGENCE to do what ever it takes.

Like you said, you got on craigslist, you made it happen.

Let’s rock and roll!

Hugs,

Twenty Twenty
Whooo yah!

Money Funk
6 years 11 months ago
Erica, great post. I love the stuff you write about and the inspirations you offer. I have to admit that I play Min in this story. I often jump ship with my projects and started to do so with my blog, until… I was beginning to forgo my blog, MoneyFunk.net to pursue new interests in Nutrition. I was going to run a product line, blog, direct sale at shows, etc… And I started getting professional guidance from Karen Knowler, the raw food coach. In her first lesson, Brillant Branding she said one thing that gave me a lightbulb moment, “Focus… Read more »
Raphael Burnes
6 years 11 months ago
Re Kym: If you are employed doing something, and have been employed doing that for a while (especially something in the tech industry). If you are in the tech business, my guess would be that the value you are creating is 3 – 4 times what you are paid for it. I was working at a web dev shop doing really bad (I was brand new…literally never programmed at all before) php / html / javascript and being charged to a client at $75 / hour while I was paid only $20 / hour. After a little experience I was… Read more »
Ben Casnocha
6 years 11 months ago

Persistence is super important. As is knowing when to quit. As is knowing the difference between early adopter clients and mainstream clients (the masses).

This post is good on the first point. It ignores the second two qualifications. Alas, everyone hears the first point and rarely the second two…

Minority Fortune
6 years 11 months ago
I’d have to say that Min is perfectly fine if he: a) loves his job b) is happy c) feels fulfilled Material goods don’t necessarily equate to success. However, financial freedom can be a wonderful thing. Therefore, if Min and Max are aligned with their values and feeling fulfilled, then there doesn’t necessarily have to be a winner/loser between the two. At times in life, we often have to re-organize our thoughts or analyze our situations due to our goals. Maybe Min didn’t even like the sales job he held before. Who knows? However, Erica makes a good point that… Read more »
trackback
6 years 11 months ago

[…] the I Will Teach You To Be Rich blog: Knowing vs Doing: comparing 2 friends who try to earn more. This is a good story about persistence, about knowing that, in principle, you can succeed and that […]

Kevin
Kevin
6 years 11 months ago
Re Ben: “Maybe they are both distributors for the same company, or they both run companies in the same industry.” They could be selling cars, tupperware, newpapers, widgets, or anything else yet you negatively assume they are doing some sort of scam?” First of all, Tupperware *is* an MLM. Second of all, MLM’s call their recruits “independent distributors,” or some variation on the term. Thirdly, the story specifically mentioned “direct sales,” which means MLM. It doesn’t describe them as entrepreneurs, or starting their own business. It openly states that they’re distributors for “some company.” That means they’re working for someone… Read more »
Kevin
Kevin
6 years 11 months ago

I just want to add one more thing – if you’re selling a product where you expect to here 100 “no’s” for every “yes,” then you’re selling a sh*tty product. There’s no two ways about it. People aren’t stupid. The reason everyone is saying “no” isn’t because they don’t know enough about the product, or because you haven’t properly shown them all the ways it’ll magically improve their lives. It’s because it’s an overpriced piece of crap. And you’re shilling it for less than minimum wage.

trackback

[…] am I tell you this?  I was reading Knowing vs doing: Let’s compare these 2 friends who try to earn more from @ramit.  The difference between your financial success and your financial failure begins with […]

Evolution Of Wealth
6 years 11 months ago
I love the post. People don’t realize how much sales is involved in everyone’s life. You are constantly selling. Selling yourself, your ideas, your opinion or your company. To you wife, your friends, your kids, your parents, your boss or your clients. If you come to accept this it is a lot easier to deal with. I meet people everyday that just come up short. The reach a point and stop. I completely agree that success is on the other side and yes it can be okay that the stop. It’s only okay if they understand and know why they… Read more »
Credit Card Chaser
6 years 11 months ago
I love this post because it reminds me so much of friends and acquaintances and fellow classmates that I have had that have always started out “trying to do the entrepreneurship thing like Joel” and then they all just ended up quitting because they didn’t make a million dollars over night. I remember about 4 years ago telling myself that its only a matter of zeros. If I could make a sale/have my website make a sale that made me $10 then I can certainly replicate test replicate test over and over until I had a system that was making… Read more »
Kevin
Kevin
6 years 11 months ago

Ramit, I want to apologize for the brusqueness of my posts. As you may have guessed, I’ve had some extremely negative past experiences with MLMs. Your story read *exactly* like the kind of propaganda they use to fool potential recruits into believing they can get rich quickly, and it just struck a nerve with me. I’m sorry if my comments distracted from your (perfectly valid) underlying point: don’t give up on things you believe in.

Credit Card Chaser
6 years 11 months ago
@Kevin I think that the key point is that it takes a lot of hard work, time, smarts, etc. to make it work as an entrepreneur as opposed to the get rich quick mentality that many people have that cause them to be all gung ho about starting out on their own but then quickly give up and go back to the “safe” route of getting a job. I think that Erica makes this point well when she talks about how her revenue was quite small even after the first 12 months and her friends/competitors just gave up while she… Read more »
Omar
6 years 11 months ago

This made my night. You never know how close you are to reaching your goal. We can’t give up because we were made to succeed.

Tina
6 years 10 months ago

@erikadouglass Absolutely! I will email you the details. Thanks!

Concojones
Concojones
6 years 10 months ago

Erica,

Thanks for the great post. Even though I like to see myself as someone who ‘holds on’, I know that too often I give up early. The interesting thing is that in most of those cases I acknowledged I’d been after it for the wrong reasons (like chosing money/status over passion — for some reason that doesn’t work out for me, but I tend to forget).

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[…] in publicly.  There is value in that.  Still, it reminds me of a conversation that I read about Knowing vs Doing and personal finance.  What I mean by that.  There is a difference of reading and learning about fitness and weight […]

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[…] a healthy dose of entrepreneurship-focused lessons. Learn how to negotiate like an Indian and learn how to DO instead of simply KNOW. [Stats: PR3, Unknown Subscribers, 32,836 Compete, ~153,253 Quantcast] Find Ramit on […]

Richard
6 years 10 months ago
I think some people have missed the message. Erica even reiterated the point. If you WANT to get out of the rat race and want to run your own business and make a lot of money (by the way, there’s nothing wrong with wanting to make money), then you will do whatever it takes to accomplish this goal. The naysayers or the employees at heart will never understand this, but that’s good. Otherwise, who would I employ? When a person wants something so badly, they don’t quit and do whatever it takes like Erica. Erica did consulting work to pay… Read more »
Credit Card Chaser
6 years 10 months ago

@ Richard

You are exactly right and I wish that I had said exactly that!

In reference to your comment “Get off of your butt and find something. Everyone is good at or knows something about something.”

I just wrote a guest post for Ron over at The Wisdom Journal that talks about exactly that: http://www.thewisdomjournal.com/Blog/everyone-is-an-expert-at-something/

Vas
6 years 10 months ago

Thank you for this article. Very inspirational. I started my business around 12 months ago and not making a lot of money. Have had thoughts of closing but I honestly believe a break through will come soon and income will start to flow through. I believe the more NO’s you hear the closer you are getting to a YES. It has been hard to keep battling on but success stories do keep me going.

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