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Wednesday Workout: Testing your assumptions

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Everybody has a plan until they get punched in the face. — Mike Tyson

Remember in college when you’d read a chapter from your textbook, shrug your shoulders, and say, “Done. I got this.” Then you took the test and your ass royally kicked?

That’s because it’s easy to read and read and believe we “got it,” but when the rubber meets the road — when we have to actually prove it by IMPLEMENTING — we often fail.

I fail all the time — and I love it. I have a tab in my email account titled, “Failures” and, if I’m not regularly adding that tag to different things I’m working on with the blog, partnerships, or testing..I know I’m not trying enough things.

In fact, I now plan for failure. I know that out of every 10 marketing initiatives I take on “I Will Teach You To Be Rich,” 7 will fail. And I am fucking good at what I do.

Today, I’ll show you how to harness, anticipate, and manage failure. And if you follow along and TAKE ACTION on what I outline below, you’ll have moved concretely toward your goal within FORTY EIGHT HOURS. Yes. In 2 days, you’ll have taken more action toward your goal than the last 2 months.

If you are ready to take action on your hustling goals this year, read on. If not, here’s a good link.

From failure to blockbuster success

I found this blog post about a guy whose first business idea crashed and burned. When asked why he failed, I liked his response:

“Shit that you read all the time. The biggest mistake we made with the point was being completely encumbered by this vision of what I wanted it to be and taking 10 months to build the product, all the while making assumptions on what people want that we then spent the next 10 months backtracking on instead of focusing on the one piece of the product that people actually liked. You’re way too dumb to figure out if your idea is good. It’s up to the masses. So build that very small thing and get it out there and keep on trying different things and eventually you’ll get it right.”

This guy was Andrew Mason, the founder of Groupon — the fastest-growing company in the history of the world.

Would he have been able to accomplish something so incredible if he continued to sit back and read blogs and study books about starting a business, getting capital, and then turning a profit?

Ironically, we used to understand this, but we quickly forget after entering the real world. For example, in college, after we deluded ourselves into believing we “got it” — and getting a few “C”s on tests, we quickly realized that we needed to do homework in order to pass the class. But after we graduate, many of us read self-development blog after self-development blog, but rarely put the strategies into practice.

For the last 6 years, this blog has been about eschewing “popular” tips like “keep a budget!” and “stop spending money on lattes!” and even the canard, “if you’ve paid taxes, you’ve given free money to the government!”

All sacred cows in personal finance. All nonsense theories that simply don’t work once you put them into practice.

Even worse, personal-finance “experts” continue spreading these myths because people believe they work. (The dirty secret of the industry is that very, very few of these experts even keep a budget themselves.)

My books and courses give you exactly enough information to take action…and then they get you OUT OF YOUR ROOM and into implementation. My book is a “6-week program” (after which your finances are completely automated, including investing).

My Earn1k course on earning more money is 8 weeks and include specific action steps to earn money each week. In fact, I tell my students they should spend 2 hours/week consuming information…and 3 hours/week implementing.

Again, I don’t care about writing things that sound good. If you don’t take action and find success from my techniques, you stop reading and never come back. That’s a powerful incentive for me to create material that ACTUALLY works, vs. sounds good.

Recently, I ran a small test on this site. And the results were eye-opening.

Case study: Putting psychological tips into practice

I’ve written post after post about automation, psychology, and defaults — like this one I wrote for the New York Times. A few weeks ago, I asked YOU to use psychological defaults to design 3 solutions for the following challenges:

1. Help a busy executive lose 10lbs
2. Help a careless 26-year-old save $1,500 in his savings account by June
3. Help someone feel measurably happier

I even promised the winner of the BEST answer a phone call with me, where I’d help you pinpoint, change, amplify, or eliminate one critical behavior. With over 170 comments, things got very interesting.

In general, commenters got #1 (lose 10lbs) easily. “Have an executive assistant (or someone) place healthy food in the executive’s home and office.”

The answer to #2 (save $1,500) was also straightforward: “Set up an automatic transfer” (as I illustrate in extreme, automated detail in my book)

#3 (feel measurably happier) was incredibly difficult. Out of 170+ entries, fewer than 5 people got anything close to an effective answer. Most people got caught up pointing out how it’s impossible to quantify happiness and how “happy” is different for everyone. HEY WEIRDOS. THIS IS A HYPOTHETICAL CASE STUDY THAT YOU CONTROL. YOU CAN ASSUME ANYTHING YOU WANT. WHAT THE HELL IS WRONG WITH YOU NUTTY CRACKPOTS?

Here was the best answer to question #3, on how to make someone feel measurably happier using psychological defaults, by commenter “Stephen”:

Maybe he already has a dog, or can’t have one. Counting your blessings can have an impact on happiness, but that’s active. To make it a default, I’d have him type out a list of his blessings one time. Set up an account to automatically email him 2x times a day when he’s not busy, and put a unique ringtone on his smart phone and email accounts when emails from that account arrive. Every time the email comes in, take a minute and read through the list.

Note that you can point out lots of flaws in the answer — “What are blessings? He has to type it out the first time…that’s active! Maybe he doesn’t have different ringtones, Ramit! Not all of us went to STANFORD, you know” — but the fundamental answer is sound.

Stephen could have improved his answer by suggesting pre- and post-tests for happiness baseline or, even more cleverly, in-situ data collection on a daily basis.

But by (1) researching what makes the person happy and (2) creating an automated system to remind this person of those things consistently, he has essentially automated a measurable improvement in happiness.

But what have we learned from the meta-lesson of this challenge?

1. Most of us believe that once we’ve read something enough times, we “get it” — but until we’re tested on it REPEATEDLY, we don’t really get it. Having something in your head doesn’t mean you can present it, use it, or master it.

You can see that when I challenged people to operationalize their understanding of behavioral change, many of the commenters could not deliver. This is why pickup artists tell their clients to shut up about their PUA forum-reading and go into bars to talk to actual women. This is why personal trainers focus as much on motivation as technique. And this is why Andrew at Groupon had to test, and fail, before he stumbled upon the most amazing formula in his business approach. You can’t read your way to expertise.

2. Most people over-complicate things. The answers to #1 and #2 were clear and did not require a lot of creativity. Yet once some commenters saw “obvious” answers (deliver food, automate savings), they were compelled to add their own wrinkles. These certainly made them stand out, although it did not make them any more effective. This is one reason why talk-radio hosts and porn get more and more extreme: Moderation is not rewarded in pop culture, yet increasingly extreme opinions (or videos) are. I seriously hope my mom is not reading this.

3. On the positive side, most of you are getting pretty good at behavioral change. There are some GEMS in the comments that would rival any serious master of behavioral change. And most IWT readers understand the surprising difficulty in changing behavior. So when other people (especially online idiots) say things like, “Ugh, why can’t fat people just lose weight?” you guys know better.

Hustling Application: Systematically testing your assumptions

A few months ago, I was talking to a guy who was thinking of going to college, but was having second thoughts. “I don’t want to waste 4 years in class when I already know I want to start a company,” he said. I started narrowing my eyes and preparing to commit violence when he angered me even more.

“I already looked at the classes at Stanford,” he said. “I feel like I already know most of what I’d learn there anyway.”

“Dude,” I said, struggling to stay calm, “You just named off 10 assumptions. You’re assuming college is only about what you’ll learn in class. You’re assuming you already know all the stuff from class. You’re assuming you can’t start a company while in college.”

“How do you know?” I asked. “You’ve concocted all these theories in your head, but you have no idea. You’ve never even been to ONE DAY of college! Why not test your theories? First, get in. Then, if you do, try it out for a quarter. If you hate it, quit! But don’t let your nutty theories determine your life without testing them.”

This year — the year of the Hustle — I want to turn you into top performers.

For years, I’ve been systematically studying top performers to see what makes them different.

There are some obvious things: They’re better at what they do than average people.

But there’s something even more important. Top performers have the same 24 hours in each day as we all do. So how do they get so much done? Top performers choose to work on more important things than average people.

Would you ever see a top performer spending 2 hours / day entering menial data into an Excel spreadsheet? Not a chance. Not even if it was in their job description. A top performer would have convinced his boss to let him outsource that responsibility to get it off his plate entirely.

And that brings us to the Hustle.

Top performers systematically test their assumptions — including their invisible scripts — to see if they’re true or not. For example, after my friend talked to me and other people, he checked his assumptions about college and ended up going to Stanford, trying it out, and realizing he didn’t want to be there.

All of us have assumptions that are UNTESTED. For example:

* “I couldn’t ask my boss to get this off my plate…he would say no.”
* “If you want to build your own business it is better to wait till you have worked at a corporate job at least a couple of years”
* “I don’t have any time to earn money…I’m too busy”
* “I don’t have any money, so I can’t go to college”
* “Courses and all those “skill learning” things (such as Earn1K) are SCAMS”
* “I can’t get a good job if I don’t have the right credentials (Master’s Degree, experience, etc.)”

For each of these assumptions, I have 50 examples of people proving them wrong.

No money for college? Read how I got $100,000+ in college scholarships.

No time to earn money? I have a student who has a full-time job and a family who is earning several thousand dollars/month on the side using my Earn1k material on earning more money.

You can sit around reading articles in your living room and believe in these assumptions — or you can apply what you’re reading about and test your assumptions.

Hustling case study: Optimizing a wedding speech

Here’s a hustling case study from Kenneth, who crushed a “Best Man” speech by doing just a little bit more than everyone else.

With just marginally more work than other speakers, he distinguished himself from the million other crappy best man speeches — the Craigslist Penis Effect in action — that happen at every other wedding. The most important thing to notice is how he went from reading to applying and getting it done.

“Back in April a friend of mine from college asked me to be the best man at his wedding. I had never done this before but I said yes. The wedding was this past Saturday and when I finished my toast the wedding singer took the mic from me and said “No notes, no cheat sheet and that was one of the best toasts I’ve ever heard.” I got a lot of compliments for a brief, ~250 word speech.

After my buddy asked me to be the best man I went to trusty google and researched best man toasts. They were all crap. They all used the same jokes and the speeches were showing off how clever the best man was, not talking up the groom.

I broke up my speech into five parts…

I wrote out my speech in about half an hour one day during a break from studying for my professional engineering exam. Before I ever started writing it I thought a lot about what I wanted to say. I thought about it in the shower, on the way to and from work (sometimes at work). It wasn’t always my top thought but it was often in the background.

After writing my speech I left it alone and then opened up the text file just over a week before the wedding. I read through it, made some changes and printed it off. I took the speech with me as I traveled for work the entire week prior to the wedding.

[RAMIT NOTE: THIS PART BELOW IS THE LAST MILE MAGIC THAT KENNETH IMPLEMENTED. 99% OF PEOPLE WILL NOT TAKE THIS STEP.]

The morning of the wedding I spent 30-40 mins walking around the living room giving my speech to the dog without my text. When I slipped up I started over and I tried to keep my pace the same as how I wanted to do it in front of the audience.

Throughout the day if I had a moment I ran through the text in my head. I had no choice to remember it as I purposely left the speech back in the room. All told, I think I spent about two hours working on that speech over the course of seven months, including 30 mins of practice the morning of the wedding. The result of which was a lot of “that was the best toast I have ever heard at a wedding” compliments. I thought it was going to be just ok as I had not spent a lot of time on it but compared to everyone else, my little bit of work went a long, long way.

You were right. I hope you enjoyed this.“

Your WEDNESDAY ACTION

Every week this month, I’m going to help you take action. Today, it’s by testing your assumptions.

By simply taking action, you will accomplish more toward your goal THIS MONTH than you’ve accomplished in the last year.

In fact, if you follow through, you’ll accomplish more in the next 48 hours than all of last month.

Here’s why:
1. Today, I want you to lay out 3 assumptions you have that are holding you back
2. In the next 48 hours, I want you to test them
3. 48 hours from now, share the results of your research

The built-in accountability is incredibly powerful. If you don’t believe me, simply give me your trust THIS WEEK ONLY and see what kind of results I can get you.

Let me show you 3 examples

GOAL: FIND AN IDEA THAT WILL MAKE YOU $1,000/MONTH ON THE SIDE
– Barrier: Not sure what idea!
– Tactics: Write down 20 things you could possibly do. (Click here for my free Idea Generator Tool.) Then sort by the amount of income you could possibly bring in on 10 hours/week. For example, photographing models = not likely to bring in $$ since there are tons of other photographers. Tutoring kids in math = very likely to pay $25 – $50/hour = profitable.

GOAL: FIND A BETTER JOB
– Barrier: The people I want to talk to won’t respond to my emails
– Tactics: Make a list of 3 questions you want to ask, and email 8 people. They could be people you want to work with, or people you read about in Wired, or whoever you want. Simply say, “Hi Mike, my name is John and I’ve been a big fan of you for years, especially your work on ____. I was wondering if I could ask you 3 quick questions about my career. They won’t take long and I can send them by email. Would that be OK?”

GOAL: TALK TO A HOT GIRL/GUY
– Barrier: “I don’t have anything interesting to say / I get quiet around them”
– Tactic: Write down 7 interesting stories…the ones that you tell your friends that always get big laughs. Go to a bar and commit to talking to a girl/guy within 5 minutes of seeing them. Don’t talk to 1 or 2…talk to 10. By the tenth, after some supreme flameouts (which is fine), you will have tested your stories and found 2-3 that always work. Boom. Assumption tested and discarded.

Don’t get caught up in the details of the examples…they are just examples. You see what I mean.

So here is what I want you to do:

1. Today, I want you to lay out 3 assumptions you have that are holding you back
2. In the next 48 hours, I want you to test them
3. 48 hours from now, share the results of your research

In the next 48 hours, you will make more progress than you made in the last MONTH. But you need to take action.

(Can’t see the above form? Click here.)

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98 Comments

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  1. Strong! I like this, and I love a challenge. Thank you for such a strong post.

  2. This is great Ramit!

    Here’s my assumption hurdles I’ve been thinking about for a long time:
    1.) Can I create a profitable workshop for local Real Estate agents?
    Barrier – Cost of renting a conference room & marketing and the time need for reaching out & preparing presentations.
    2.) Is it worth taking the time to launch an online RE sales training program?
    Barrier – I’m rather busy, other people doing it, and it’ll be a lot of work for little certainty of success.
    3.) Can I contact Stephen King with a question that has been plaguing me for a while?
    Barrier – Nervous, doubting he’d reply

    This will be interesting!

    • Bradley,
      As a lifelong resident of Maine, I have had numerous experiences with Stephen King and I would totally encourage you to contact him. He truly is a very down to earth person, Perhaps you wont get an answer back right off, but there is no law saying you cant keep trying. Maybe he has a cold or is on vacation or something. Dont let your fear of rejection keep you captive and leave your plaguing question unanswered.

    • Hannah’s right. He is very involved in the community and very down to earth. As long as its not a creepy personal question I’m sure he’ll answer it in his own time. After all writing is his passion and fans come with that!

  3. Ramit
    In this post you stress the Seth Godin/Andrew Mason approach to ship quick and often. But last post you stress to take the extra few months/effort to make your product extraordinary. I can agree with both reasonings but I find it somewhat contradicting? Am I missing something obvious here?
    Great post
    Cheers

    • Ship quick and often when you are trying to figure out what will work.

      Ship slow and awesome when you have done the testing to know the rewards exist.

      You wouldn’t want to spend 12 years writing a book with no market, but if you knew you had a market and you could write the definitive book on x that would be sold for decades, it is worth the time.

  4. I’m loving this. You’re actually taking on the least sexy (yet most crucial) topic of self development. The crazy notion that hard work pays off.

  5. Craig Rodrigues Link to this comment

    That’s a lot of quality info right there. I just wish you wouldn’t have put that nutrition/weight loss question in there. Funny enough I find people make way too many assumptions about nutrition that just aren’t true.

  6. I have 3 barriers attached to the same goal (which is about helping a cause, not earning more money). Will test them tonight…
    1) I don’t have time for this project
    2) No-one will want to help me
    3) No-one would be interested in the product

    PS: I signed up but I’m getting info about the Earn1K – not quite what I expected based on what was written just above the signup box in the post.

  7. My 3 assumptions:
    -Starting a side business with a full time job in a different country is hard.
    -I’m not sure if people in Latin America really want to learn about my approach to personal finance.
    -I don’t know how expensive to start the business would be.

    • Hello, I’m from México and we really need to learn about personal finance, just try it!

      Saludos…

    • Thank You Karla! I’m very motivated… We’ll see what happens.
      Saludos a ti también!

  8. Assumption- winning freelance projects off of sites like elance is a waste of time and effort
    Barrier- One of my best friends makes his living off of these sites, I just doubt my ability to do the same

    Assumption- I don’t have the know how to set up a solid profile on these sites
    Barrier- Actually researching and planning out how to sell myself as a writer.

    Assumption-I don’t know enough about writing to edit or write for other people.
    Barrier- I doubt in my abilities despite the fact that I know I have the ability.

    • Amazing! What you wrote is exactly what I’m battling with – and I now have to admit (mainly to myself) that I actually haven’t tested my assumptions.

      Off I go then, time to be brave and prove myself wrong. 😉

      Thanks for the inspiration!

  9. Ramit, I appreciate you candor in sharing the fact that you fail 7 out of 10 times – even with your experience. So many successes never talk about their failures – as if it will take away from a celebrity facade they have built.

    Talking about failing is important for people to understand that every idea won’t necessarily work if you just work it hard enough. I get motivated 100 times more by hearing that successful people failed over and over and over again from their own mouth.

    Too many times people look to try something new, start a business or freelance gigs and it doesn’t work that one time they tried it and they just chalk it up to “that won’t work.” It makes me sick how quickly many people quit after their first failure or even before!

    Here’s to adding to the failure tab!

  10. I wrote down my 3 assumptions. I wrote down specific, actionable steps to take in the next 48 hours, one for each assumption …

    now i’m terrified!!

    But I’m going for it!!!

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