The Millionaire Fastlane

by MJ DeMarco

  Be very careful with whom you trust with the keys to your castle because they can drive you to financial ruin. Remember Nicolas Cage; his manager allegedly drove him to the precipice of financial ruin. Investigate and interview. Get referrals from successful, established entrepreneurs. Treat your two A’s like you would any partner, because they have unfettered access to your castle, and those with the keys have the potential to steer you wrong.

  would you like a chainsaw with your beer?

  When you blindly trust others to anything—business, financial investments, security—you’re vulnerable to being conned.

  There’s an old beer commercial where a couple is driving down a dark country road and they spot a hitchhiker with a case of beer and a live chainsaw. The driver wants to pick up the hitchhiker because he advertises something he wants—the beer—but is blind to the chainsaw. Blind trust is like picking up a hitchhiker on a deserted road hoping to tap into his case of beer, but not seeing the torture device behind his back.

  You must make your trust an asset to be earned by others. Let actions speak louder than words. When you allow words to disarm your trust or BS meter, you become vulnerable to attack.

  One of the worst employees I ever hired was a pathological liar who stole from me. Why on earth did I hire her? She disarmed me with words. During the interview process she told me that she sang in the church choir and was a religious woman. While I didn’t ask anything religious, I assigned honesty to religion. It dismantled my defenses and I hired her without verification. It took me several years (and hard lessons) to uncover the truth.

  verify first, trust later

  Former president Ronald Reagan once said, “Trust, but verify.” When I hired the liar, I trusted but didn’t verify. It took several robberies, video cameras, and public record searches to uncover the truth. I verified too late and it cost me.

  The most egregious cases of trust are our financial system. Bernard Madoff perpetrated the largest Ponzi scheme ever, and billions of dollars were lost. How does one man siphon billions from millions? Unverified trust. Thousands trusted Madoff and thousands failed to verify. Those who did verify didn’t invest and some even blew the whistle. We are a trusting people and we want to believe the best. We want to believe in fairy tales and happily ever after. We want to believe we can make millions on Facebook ads, just as long as we PayPal that guru $97.

  When I started my entrepreneurial career fresh out of college, I trusted everyone. I bought all kinds of crazy schemes that promised wealth. What happens when you trust everyone? You get burned. You get lazy. You hire criminals. When you trust everyone, you chase business opportunities that violate the Commandment of Control. Others get to dictate your financial road trip. And when that happens, you crash and burn. There is only one person you can blindly trust in this world, and that is YOU.

  Why so cynical? If you don’t understand now, you will later.

  When you serve millions, you come in contact with millions.

  Only then will you understand the truth of the consumer/producer equation. Your eyes will be opened to how many people will go the extra mile to try to screw you. There is no place safe from liars, con artists, and crooks. These people commiserate in the least likely of places: your community church, that harmonic dating website, and at your posh country club.

  If I lose $10,000 on an investment that I meticulously investigated, I can deal with it. Easy come, easy go. Yet, if I have $10,000 stolen from me because I blindly trusted someone who I let into my vehicle, it’s different. Today I trust no one but give everyone the opportunity to prove trust. There are a lot of good people in this world, and they do outnumber the bad by a wide margin. It just takes a mild effort to find them and keep them in your life. Just be careful who you pick up on the side of the road. Don’t be tempted by a cold brew, but be blinded to the chainsaw.

  Fire Reckless Chauffeurs

  Are inmates running the asylum? When you’re not home, who runs your castle? Who chauffeurs your business?

  Providing great customer service is one thing; getting employees to deliver it is another. When you shift your focus to the bottom line, often the frontline is sacrificed. How much is that untrained $10/hr. front desk person with a bad attitude really costing you? To make customers disciples of your business, employees must share your customer service philosophy. You can’t let any employee ruin a multimillion dollar investment. All the intangibles in the world can’t change a poor customer service experience.

  After a nine-day stay in Las Vegas I learned how robotic service is the ultimate of business liabilities, regardless of poshness. Most people vacation in Vegas to escape from coworkers, incompetent employees, dirty houses, traffic, and your typical menagerie of life’s dramas. Compliments of my friend’s company convention, my Vegas stay started at the Rio Hotel. I had never stayed at the Rio and normally wouldn’t consider this hotel. The place was hoary and dated; the bed was stiff and the accommodations worn. Nonetheless, I found the staff very nice. The dealers were friendly and the casino staff was accommodating to our minor requests. I enjoyed my stay.

  After three days at the Rio, my hotel stay transferred over to the Venetian Hotel, a hotel that my American Express concierge arranged. For those unfamiliar with the Venetian, it is a newer hotel with opulent architecture: ornate columns and corbels, lavish chandeliers, and other affluent appointments that scream royalty. My stay at the Venetian was for six days.

  Unfortunately, after six days, I will never return.

  Loved the fancy Italian architecture, but their people suck. Our nightmare started on day one and continued every single day, marred by poor human experiences: unresponsive housekeeping, unacceptable hold times to hotel services, failure to deliver promises, robotic staff, overcharging, and, overall, a failure to provide an escape. There are two critical lessons in this experience:

  (1)A SUCS philosophy must be delivered by your employees.

  (2)Spectacular product features can’t overcome poor service.

  First, employees must deliver your customer service philosophy. Your people are ambassadors of your business and they communicate your vision. Essentially, they’re business chauffeurs, and if they’re reckless, your vision is destroyed. Your employees drive the public’s perception of your company.

  Was it the Venetian’s policy to treat me with such disrespect and disinterest? Doubtful. The failure was in the communication lines from management to employee. Not just one employee, but several. You can’t be driving the ship all day. Your employees carry the water buckets, and if they aren’t ordained in service, they hijack satisfaction and create liabilities. A customer centered policy is irrelevant if employees don’t translate that policy into frontline action.

  The second lesson is this: No amount of spectacular product features, such as great technology (snazzy websites) or great architecture (lavishly appointed hotels) can compensate for poor customer service. Despite the Venetian’s billion-dollar appearance, the marble floors and the ornate columns, their customer service sucked. Yet, at the Rio Hotel, customer service was excellent, which translated into a great experience, despite the hotel’s dated building.

  This incongruity represents a one-way street: Fanatical customer service—service that SUCS—can help compensate for shortcomings, but fanatical features cannot compensate for poor customer service, or poor human interaction. The Venetian’s floor could have been made of solid gold. It wouldn’t have mattered. Nothing overcomes poor human experiences!

  You could own the best hotel located on the best beach, but if customers are treated like inconveniences and requests go unanswered, they won’t return. Exponential business growth is fueled by fanatical customer service, and your frontline employees must share your vision. It doesn’t come from boastful mission statements plastered on the CEO’s office wall.

  Chapter Summary: Fastlane Distinctions

  ➡A business partnership is as important as a marriage.

  ➡A good accountant a
nd attorney will save you thousands, perhaps millions.

  ➡Accountants and attorneys have the keys to your castle; make sure you trust them fully because they have the power to right or wrong you.

  ➡Unmitigated trust exposes you to unmitigated risk.

  ➡Unverified trust can lead to uncontrollable consequences.

  ➡Your employees communicate the public’s perception of your company.

  ➡Fanatical customer service can overcome shortcomings, but fanatical features can’t overcome poor customer service.

  ➡Customer service philosophy is delivered from human interactions—not ambitious mission statements on a wall plaque in the CEO’s office.

  [42] - Be Someone’s Savior

  A market is never saturated with a good product, but it is very quickly saturated with a bad one.

  ~ Henry Ford

  Your KNIGHT in Shining Armor

  Is your product or service someone’s knight in shining armor? Is it going to save the day? Or is your knight cut from selfishness, fueled by your hopes that it will gallop in on a black stallion and make you rich while simultaneously allowing you to be your own boss?

  The Crowded World of “Me Too!”

  “Me-too” businesses make “me-too” incomes. It isn’t hard to find businesses founded on something other than a need. They have no differentiation or uniqueness, and they sink into a crowded abyss of me-too and make their owners crazy once the illusion of “be your own boss” fades. Businesses founded on false premises will rocket to the bin of commoditization and force you to do the inevitable: To play checkers.

  What is commoditization?

  Commoditization is a product or service that appears homogeneous among providers. For example, a heavily commoditized service is air travel. Most people aren’t loyal to any airline; they’re loyal to the best price. The product becomes commoditized.

  Another example is gas. I get gas at any of seven different gas stations because the product is commoditized.

  People tend to make buying decisions for commoditized goods and services based on one metric: price. If you don’t, it’s because the business has done a good job differentiating its product from the alternatives. If your product isn’t unique, it doesn’t stand a chance and you’re forced into the strategy of “cutting prices to stand out from the crowd.”

  Get in Business for the Right Reason

  Why are you in business? Most likely for the wrong reason.

  A perfect example is the limo industry, where new companies recirculate like turnstiles at the train station. What compels someone to open a limousine business? Rarely because of need. Nope, people get into the business because they are fulfilling their own selfish need—because they just want to, just like I wanted to years ago. In fact, the limo business appears to be some sort of graduation from taxi driver. Did the market need a new limousine company? Was there intent to deliver a superior product that stands above the competition?

  Nope.

  The intent was selfish: I want to own a limo company so I’m going to start one.

  This creates excess supply and weak demand—too many limos running around and not enough customers. When supply exceeds demand, prices must drop; suddenly, the product becomes commoditized.

  Disregarding market needs leads to commoditization where your soul is sold to the buyer who wants the cheapest price. Where does this insanity start? People start businesses they have no business starting. People start businesses “doing what they love” or “doing what they know.”

  A gentleman who owns a carpet-cleaning business posted a similar story at the Fastlane Forum. He wrote:

  The problem is that although I provide incredible value for what I do, it is something that people don’t want to buy. People avoid cleaning their carpets for as long as possible. So in reality, I’m providing something that is of little value. Thus, I can conclude that I need to change my business premise. So what values do I change my business premise to target? What do people value today? I think I’m in a business that is based on a bad premise.

  I feel bad for this man.

  Why is he in the carpet-cleaning business? Because there was a need? Or because he needed a job and wanted his own business?

  Regardless of the reason, he operates in an industry where the service is commoditized. Business owners fight over every customer while they earn fewer and fewer dollars for each. If he wants to grow, he has to cut his price.

  My response was that you can’t change your business premise because you are already in the business. The right business premise would have steered you clear of the industry or got you in the industry to attack a unfilled need. When hundreds of people get into a business solely because they know how or want to (not need based), you get put into commoditization position: price wars haggling over a few dollars. There is limited need (limited demand) and too many providers (supply). The point of having a need-based premise is to avoid the industry entirely, or to get in it to solve a specific problems and skew value, not to change it after the fact. If your product isn’t someone’s knight, standing out from the crowd and skewing value, it stands to be commoditized.

  Get Your Eyes off the Competition’s BUTT

  Although my Internet service was for consumers, my paying customers were small-business owners. When you interact daily with hundreds of small-business owners, you get a keen insight into how they approach business. I mistakenly assumed that all business owners thought like I did, when often it was the opposite. I learned fast that most business owners paid more attention to their competition than to their own business. Instead of minding their own business, they had their noses into everything that everyone else was doing. This means you neglect your own product and become reactive instead of proactive.

  Are your eyes on your vehicle and the road ahead? Or are you rubbernecking at the cars all around you?

  Oh no! Excel Limousine dropped its hourly rate by five bucks! Mercy, call out the price police! Heavens! Godfrey Limousine is advertising its limousine as a 2017 model when it’s a 2011 model! I’m calling my attorney!

  If your eyes are glued to the competition’s butt, guess what?

  Your eyes aren’t on the road ahead. If you’re following, you aren’t leading, and if you aren’t leading, you’re not innovating.

  If Company X does something and you react, you are being reactive, not proactive. Why aren’t they following your lead?

  If your preoccupation is with every single thing your competition does, you’re cheating your business and your customers.

  How to Use Your Competition

  Another “dead professor” moment: Forget about your competition 95% of the time. The other 5% should be used to exploit their weaknesses and differentiate your business. If you forget about your competition, you’re forced to focus on your business, which is to innovate, skew value, and win over the minds of your customers. And when you fill needs and your army of customers grows, something suddenly happens: Everyone follows you.

  In my industry, I lead the pack. I innovated and many followed. If I instituted a new feature, my competition would add the same thing months later. I was the first company to use the lead generation revenue model, and it was later copied dozens of times. My eyes weren’t affixed to everyone else because I was preoccupied with my own success and the satisfaction of my customers.

  On the rare occasions you peek in at your competition, do so for exploitation.

  Mine their weaknesses and add value where they aren’t.

  Uncover the need. Exploit their customer service gaffes. Is it impossible to receive good service? Do dissatisfied customers litter the web with their displeasure?

  When I launched my first company, my competition consisted of existing websites and the traditional Yellow Pages. The weakness of both was risk. To advertise, you had to pay a big upfront fee regardless of benefit. If you spent $5,000 and acquired one new customer, you just spent $5,000 for one client. Scary risk proposition, huh? I thought this
was too risky for business owners, so I sought to solve it.

  For mature companies, competition can exploit what you shouldn’t be doing, versus what you should be doing. My closest competitor was known never to answer their email. This gave me an advantage.

  If you are going to take your eye off the road and spy your competitors, do so for finding value opportunities. Exploited weaknesses are where brands are born.

  What are they doing wrong?

  Where’s the inefficiency?

  Within the gray area of unsatisfied customers lies the opportunity to improve value and ramp up differentiation. Differentiation is a defense to commoditization. Gloating over your competition should serve only one purpose: To find weaknesses and then be better at that weakness within your own operation. To the customer, this difference will be interpreted as better value. And better value equals more buyers won.

  Chapter Summary: Fastlane Distinctions

  ➡Commoditization occurs when you get into business based on a false premise—“I want to own a business” or “I know how to do this, so I’ll start a business doing it.”

  ➡If you are too busy copying or watching your competition, you’re not innovating.

  ➡Use your competition to exploit their weaknesses, differentiate, and skew value.