Thinking Back and Moving Forward: ETR's History Since Day One
March 27, 2007

I had lunch with Katie Yeakle the other day, and she reminded me of how ETR started. It happened in early 2000. Katie had been running AWAI (American Writers & Artists Inc.) for three years, and it was growing. We had four employees, and had just started making a profit.

As with all the businesses I have had a direct hand in starting, AWAI was run on a laissez-faire basis, which meant that Katie was free to set her own rules.

One of the rules Katie set was that her employees could pretty much dictate their own hours. So long as everyone got their jobs done, Katie didn't fuss about what time they clocked in and what time they left. Katie applied this liberal policy to all of AWAI's employees, including herself.

For the longest time, I tried to ignore this practice, but it was eating at me. Ever since I first decided to get rich, way back in 1983, I had made a commitment to being one of the first (if not the first) employees into work every morning and often the last person to leave.

But Katie was drifting in at 9:00 or 9:30... and that was bugging me. "Bugging me" isn't the right phrase. It was bugging the hell out of me. Didn't Katie realize what a bad example she was setting?

I am sure that I mentioned my concerns to Katie more than once. But, for whatever reason, she chose to ignore me. So after seeing her stroll in long past 9:00 for the umpteenth time in a row, I sent her an e-mail that included the following:

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posted by M. Masterson @ 8:57 AM, ,




Treasures From the ETR Archives: Incremental Degradation
March 22, 2007

One of my goals when writing for ETR is to help my readers reach all their professional and personal goals. To help celebrate ETR's upcoming Issue #2000, I'm reprinting some of the most useful business and life lessons I've written about so far. To read each full article, click the link embedded in the text.

"You can eventually ruin your business by making many very small downgrades in the quality of the product or service you offer.

"These downgrades are usually implemented to cut costs. You might, for example, switch to a cheaper grade of paper stock for your business letters. Or reduce the number of screws you use per stud from six to five.

"These small reductions may go unnoticed by your customers and have no measurable impact on sales. And since they result in savings, they will produce short-term benefits to your bottom line.

"But in the long run, the theory goes, the accumulation of these incremental degradations results in something that is noticed. Suddenly (and inexplicably), sales slump and profits tumble."

* * * * *

"I discovered that AP has an internal mail sorter who doesn't sort the mail properly - and this causes the mail-delivery people time and aggravation. I found out that the problem has been going on for a long time and that his manager has been made aware of it but has not corrected it. (Apparently, she sent out a general e-mail on the subject and considered the problem solved.)

"I also discovered that when the receptionist of one building is out on an errand, she asks the people in customer service to back her up. But the people in customer service can’t hear the doorbell ring. So if you ring the doorbell when the receptionist is gone, you are likely to stand there for a very long time.

"These kinds of problems won't stop your business, but they will take the life out of it drop by drop. Unless you have a way to detect all the little problems, they will gradually, but certainly, get worse. And by the time you discover what has been going on, it may be too late."

* * * * *

"Consider the two most basic options companies have when they seek to grow their businesses: They can try to increase their market shares by sustaining innovations - by continually improving a product everyone is using - or they can use disruptive innovations to create a new market or take over the low end of an existing market.

"Sustaining innovations (a microprocessor that enables personal computers to operate faster, for example, or a laptop battery that lasts longer) are perhaps the easiest to produce because their need is apparent (just ask the users) and the technology to accomplish them comes usually from existing research. Improving your product and service incrementally will keep it fresh in the minds of your customers and thus sustain back-end and continued sales, but such innovations are unlikely to give you a quantum leap forward."

* * * * *

"If you don't keep up with the changes your market is going through, you will gradually lose your share of it. If you maintain a consistency in what you do, the decline will be so gradual that you will likely attribute it to a weakening of the market. And that's the problem with the 'Don't fix it' philosophy: If you keep doing everything like you used to, your business will slowly but surely deteriorate. And you'll never understand how and why it is falling apart."

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posted by M. Masterson @ 8:25 AM, ,




Treasures From the ETR Archives: Erfahrung vs. Wissen Knowledge
March 21, 2007

"I went to bed that night thinking about the threat of global warming and its effects (including raising the sea level by a foot or more), and dreamed my house was being washed out to sea.

"I woke up wondering if I should sell my home and buy another one further inland. That would be the prudent thing to do, I figured. Better to get out now while I could still get a good price. If I waited until it was obvious that all these coastal properties were going to be flooded one day, I'd be out several million dollars.

"On the other hand, my heart argued, I have no reason to believe that the ocean is going to rise. It hasn't risen in all the years that I've been living across from it. Chances are, it won't rise in the future.

"Plus, my heart continued, I love this house. I love the way it looks, the way it feels, and the view I get every time I look out the window. Why give up something I truly love because I fear that one day it will be less valuable or even worthless?

"My dilemma was a classic struggle between head and heart. It was also, I realized, an example of the difference between two very different kinds of knowledge: wissen [secondary knowledge] and erfahrung [primary knowledge - the kind you get from personal experience]."

* * * * *

"I think we are all better off directing our lives based on what we know from experience to be true, rather than on what we've been told (by the government, by big business, by vested interests, etc.) to be true.

"In my humble opinion, some of the most commonly held, 'common-sense' ideas about making money and accumulating wealth are downright falsehoods."

* * * * *

"One of the most common mistakes we make in business is thinking we know things that we don't. I'm thinking specifically of believing we are capable of running a certain type of business simply because we have been a long-time customer of it.

"You are completely sure, given your vast experience buying or using a certain product, that you could successfully produce and sell it at a profit. Let's call this common mistake the Conceit of Outside Knowledge. And let's say that it is not an entirely bad thing. Even though it accounts for a great deal of confident but stupid criticism...it is also the cause - perhaps the most common cause - of entrepreneurship."

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posted by M. Masterson @ 8:24 AM, ,




Treasures From the ETR Archives: Failure as a Necessary Aspect of Success
March 16, 2007

"When I talk about success, people sometimes get the idea that I have had nothing but. The truth is I am constantly failing. In small things and in important ones."

* * * * *

"There's nothing that sharpens a smart person's decision-making ability faster than failure."

* * * * *

"Yes, I've had plenty of failures. But I don't spend much time thinking about them… and when I do, it is with a feeling of equanimity or amusement. I don't feel badly about them. They seem like interesting experiences that happened to the person I was years ago. And it seems to me that's a good thing. Being ashamed of failure must surely be very destructive.

"I'm proud of my successes, but I'm not ashamed of my failures - for one good reason: I consider myself to be a success. Why? Because, despite my many failures, I have to my credit many more successes. How was I able to rack up such a positive success/failure track record? By pushing forward on the next new project after the last one had failed.

"Every successful person has failed. And not just once. The secret to making something good out of your mistakes is to (a) refuse to feel guilty about them, and (b) resolve to learn from them."

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posted by M. Masterson @ 9:06 AM, ,




Treasures From the ETR Archives: Why You Should Throw Out Your TV
March 15, 2007

One of my goals when writing for ETR is to help my readers reach all their professional and personal goals. To help celebrate ETR's upcoming Issue #2000, I'm reprinting some of the most useful business and life lessons I've written about so far. To read each full article, click the link embedded in the text.


"I don't deny that TV can make you laugh and cry. I don't deny that it can inform you. The problem with TV is that while you are laughing, crying, and learning, you are also losing energy, losing mental sharpness, and losing the natural inclination to be active. Watch any TV show and afterwards you are somehow duller, less energetic, less acute. Your mind has lost its acuity. Your spirit is down. Even your body is worse off - a little stiffer, a little more tired.

"Yes, we all need relaxation. But you'll do better - by far - with yoga or meditation or by taking a walk than you will by watching TV."

* * * * *

"I've been watching, while stairclimbing, a BBC series on wine. It's very enjoyable and seems instructive. But since I make notes directly after watching each program, I get to see just how informative it really is.

"It's amazing. A half-hour segment might - might - give me three bits of useful information.

"It doesn't feel that cheap when I'm watching it, but that's because so much of what I'm viewing - the interesting scenic shots, the gripping little conversations - is illustrative but not instructive.

"I haven't seen studies on watching TV as compared to reading, but I'll bet you can learn four to 10 times more in a half-hour of reading than you can watching television."

* * * * *

"It's easy to trick your brain into producing alpha or theta waves. Just switch on the television.

"But realize that you're also training your brain to operate at what is, essentially, a lower frequency. And research proves that people who produce an excess of alpha or theta waves - from head-injury patients to plain old slackers - have consistently weaker powers of concentration. On the other hand, those who have a great sense of focus also have a much higher ratio of beta brain waves."

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posted by M. Masterson @ 8:50 AM, ,




Treasures From the ETR Archives: Selling - the World's Most Valuable Skill
March 14, 2007

"On the road to wealth, developing a financially valuable skill is the most important step. It's the foundation upon which every other step is based.

"What is the world's most valuable skill? Simple: the ability to sell. Not just products and services - but ideas, concepts, and beliefs."


* * * * *

"Face-to-face selling is both an art and a science. The artistic parts - timing, tone of voice, charisma - are intuitive. So there's not much you can do about them. The scientific parts, though - what needs to be said when - can be greatly improved by planning and practice."

* * * * *


"Contrary to what you may think when you get out of college, the world is really NOT looking for smarter advertising. Despite our best hopes and the results of every focus group I’ve ever attended, most people most of the time want to be sold hard.

"Hard doesn't mean hypey. Hard means 'Convince me! Make me a believer.' Hard means understanding the complex emotional/psychological desire of your prospect, recognizing his beliefs and feelings, and giving him a big, multilevel promise that makes his molecules shake.

"Hype is what you do when you aren't smart enough to sell smart. Hype works, but only temporarily. And it has many unpleasant ramifications."


* * * * *

"There is something basic to every business that I call, for lack of an MBA education, the 'basic selling dynamic.' By that, I mean the fundamental things you have to do to make a single profitable sale: figuring out where to advertise, how much to spend on advertising, how to position your product/service in terms of the competition, how to price it, what kind of guarantee to give, etc. Until you get that working, the future of your business is uncertain."

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posted by M. Masterson @ 8:09 AM, ,




Treasures From the ETR Archives: The Importance of a Single Big Idea
March 13, 2007

One of my goals when writing for ETR is to help my readers reach all their professional and personal goals. To help celebrate ETR's upcoming Issue #2000, I'm reprinting some of the most useful business and life lessons I've written about so far. To read each full article, click the link embedded in the text.


"If you want to lead - to become wealthy and wise - you need an imagined treasure. You need to see its richness in your mind and communicate that richness to others. You've got to do that and also come up with a treasure map. Not necessarily a detailed map, but a plan that points your people in the right direction.

"Your Big Idea must be desirable. It must offer benefits to you, your customers, and your employees. It must also be appropriate. It must reflect your company's capabilities, as well as its particular strengths and weaknesses - and the plan to achieve it should take advantage of your product's Unique Selling Proposition (USP).

"If your Big Idea is good and your map to make it happen is sensible, you will succeed."

* * * * *
"Coming up with the Big Idea is a big task. It must be important enough to inspire followers, useful enough to create benefits (for your customers, your employees, and yourself), and cost effective. And, ultimately, it must be right. There is nothing so dispiriting and financially damaging as a Big Idea that changes systems, drains resources, taxes everyone's patience, and then falls flat on its face."

* * * * *
"Entrepreneurs have big ideas, grandiose ambitions, and endless options. Line up 10 of them against a wall and you'll have a truckload of 'what ifs' but only a pocketful of 'how tos.'

"'Don't bother me with the small strokes,' they like to say. 'I'm a Big Idea guy.'

"Indeed, success in business starts with the Great Idea. But it won't get any further than that until someone gets down to the little tasks. Nothing happens until the first sale is made. And the first sale can't be made until someone does something."

* * * * *
"Whether it's your Big Idea or someone else's, there are five very simple questions you can ask that will help you quickly determine its strengths and weaknesses: 1. Whom does it benefit? 2. How great are the benefits? 3. Does it take advantage of the company's market? 4. Will the benefits outweigh the costs? 5. What do we do if it doesn't work?"

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posted by M. Masterson @ 8:10 AM, ,




From the ETR Archives: How Cooperating With Competitors Can Help You Succeed
March 12, 2007

[This is the first in a series of excerpts from the Early to Rise Archives that we're going to be running in the newsletter for the next two weeks to honor our upcoming Issue #2000 - a milestone I'm personally very proud of. If you're not yet a subscriber to ETR, this will give you a good idea of the key ideas and themes that I come back to again and again.

To read each full article, click the link embedded in the text.]




"I hear plenty of talk about how cutthroat business is, but most of what I see is softer. I do know businessmen who are rude and crude. I know some who lie and cheat. But most of the worst ones don't do very well. They score a couple of scams, but then word gets out. Before long, they can't find anybody but new, dumb meat to do business with.

"Put differently, most of the business successes I've known or have seen firsthand were achieved by some form of cooperative behavior."



"Bad behavior limits your potential. Good behavior enhances it. Furthermore, competitive business practices are generally self-destructive. Cooperation is the true key to long-term success.

"I can tell you from personal experience that in the jewelry business, the art business, the contest and sweepstakes business, the astrology business, the academic-book-publishing business, and many others - sharing ideas with your competitors works much better than trying to take advantage of them to further your own ends."



"You can - if you like the martial metaphor - run your business as if you are fighting a war. You can see your market as a battleground. You can hate your competitor. You can try to beat him out of market share and rejoice if he goes out of business.

"But if he does, what have you won? A position in a market that has lost one of the agents that was making it grow."



"I'm not advocating that you divulge all your secrets to all your competitors, but I'm strongly in favoring of giving first - and with all the best intentions - with the expectation that in the long run you'll get back as much or more than you have given.

"It's a universal principle that applies to all aspects of life. Many of the most successful people I know are 'give-first' people. Such people understand that the best way to establish trust and good will is to give first and without requisite compensation.

"Once trust and good will are established, business and communication flow smoothly, deals are easily cut, agreements are quickly made, and success is much more abundant."

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posted by M. Masterson @ 1:40 PM, ,




More on Handling Persistent Bullies
March 7, 2007

"Bullies are all around you - at the office, in the parking lot, on the phone, and in line at the cash register," I wrote in a recent blog entry. Which means you have to learn how to deal with bullies just to get through an ordinary day.

"What does our personal experience teach us?" I wondered. "And can we apply the lessons we learn in our personal lives to making sense out of the aggressive actions people and countries around the world continue to take against each other?"

Read the rest of this article at Early To Rise

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posted by M. Masterson @ 8:18 AM, ,




Tapping the Power of Your Morning Routine
March 6, 2007

Did you know that some "successful" execs work on e-mail all morning - sometimes even all day?

According to Jim Citrin's article "Tapping the Power of Your Morning Routine" on Yahoo! Finance, many business leaders are chained to their inboxes:

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posted by M. Masterson @ 8:27 AM, ,




More on Giving Advice
March 5, 2007

Advice is a curious thing. People often ask for advice when they don't want it, and, as George Bernard Shaw pointed out, "They often give advice that they rarely or never follow themselves."

People also ask for advice when they want approval for an action they've already decided upon. Erica Jong put it this way in her 1977 book How to Save Your Own Life : "Advice is what we ask for when we already know the answer but wish we didn't."

In my experience, most people ask for advice when they've already figured out - sometimes unconsciously - that they need to make a change. Oftentimes, they've even recognized what that change should be. But they're not sure. So they go to someone whose judgment they trust or to someone whose credentials impress them.

I keep this in mind when I give advice.

Here's an example ...

Yesterday, I had lunch with a young man who is trying to decide whether he should marry a long-term girlfriend. He gave me the pros and cons.

I said, "It's clear to me that you know the aspect of her personality that concerns you will never change. And you know that if you try to change it, you both will be frustrated. Imagine yourself with her 20 years from now. Imagine her being essentially the same, because she will be. Now imagine yourself loving her, defects and all. Could you do that?"

He said, "Yes, but ..."

I said, "It will take work, and it sounds like you are not sure you want to be putting in that work over a lifetime, right?"

He agreed.

"But you already know that, don't you?"

He said yes.

"You will have to work hard on any relationship, even with someone who seems perfect when you begin. My advice is to realize that your marriage will take work regardless. Get that deep into your heart. Once you do that, either decision will work for you. But you already know that deep down inside, don't you?"

He said he did ... and added that talking it over with me made him feel better about it.

When you let people know that they already have the answer, you empower them. And people need to feel that power to make tough decisions.

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posted by M. Masterson @ 1:41 PM, ,




No One Cares What You Had for Lunch, Part 3
March 1, 2007

For the past two days, I've been giving you some of the best ideas I found in Margaret Mason's book, No One Cares What You Had for Lunch: 100 Ideas for Your Blog . Here are four more:

Read the rest of this article at Early To Rise.

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posted by M. Masterson @ 8:29 AM, ,