Unscripted: Life, Liberty, and the Pursuit of Entrepreneurship pdfdrive com

~ Joseph Schumpeter, Economist
SHARKS EAT; GUPPIES GET EATEN
I
t’s the day of your birth. Before descending into earthly form, God throws a
twist in your incarnation. Instead of living as a human, you will live as a fish in
the Pacific Ocean. God gives you a choice: live as a shark or a guppy. Which do
you pick?
Let me guess.
The shark.
And let me guess why.
You don’t want to end up the shark’s dinner.
Give one hundred people the same choice, and you’ll hear a similar opinion: I
want to be the king, the master of my domain! You’d be insane to pick prey over
hunter, right?
Not so in the business world.
Most business neophytes skin themselves as guppies.
You see, whenever you co-opt your business to the uncontrollable and
untenable whims of any entity, you tell God, “I want to be the guppy!” Shark
status, relinquished. You become the cog, not the wheel. The end result is,

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instead of painting your own big picture, you become a swab of paint in someone
else’s.
Enter the Commandment of Control.
To ensure you’re on the top side of the food chain, 
the Commandment of
Control requires that your entire operation, from product development, to
marketing, to distribution, to other operational components, be within your sphere
of influence, or diversified from influence
. It’s owning what you build, effectively
giving you black-swan insurance. It’s immunity against catastrophic events that
can derail your gig overnight. In effect, the Commandment of Control is risk
mitigation allowing you to sleep well as a shark.
Behind the Commandment of Control is a simple question, which reveals
your food-chain positioning: 
is there one person or entity that can instantly kill
your business with one decision?
Are you fishing in a pond controlled by someone
else? And what happens to your business when that pond is taken away?
The Commandment of Control (and a productocracy) begs that this answer
be NO. If it isn’t, you’re at the mercy of the sharks, and your pecking order on
the food chain is demoted to prey.

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Take for example network marketing. If you’re not familiar with network
marketing (or MLM), you might be familiar with its telltale pattern: Some long-
lost friend you haven’t heard from since Chumbawamba wants you to go to
some ambiguous meeting at some ambiguous hotel so you can hear from some
ambiguous speaker. And then you’re told how you can make millions selling
some overpriced product if you just sell it to your friends and family, and they
sell it to theirs, and so forth. If you ever get fooled into a meeting, take a look
around. The room is full of guppies. The sharks? They own the company or are
chilling in the founders’ circle.
Unfortunately, most people need to learn the hard way. And yeah, I was once
“most people.” Sometimes being told “the fire is hot” isn’t sufficient—you need
to get burnt. My burn came during my young twenties, and it marked the last
time it would happen. I had brief success with one company until my top
distributor quit. Her reason? The company discontinued a product favorite. Two
events over which I had no control.
Hear that water being sucked out of the pond?
Instantly overnight, my income was slashed in half. Within months, it
dwindled to nothing more than an entree at Applebee’s, of course assuming I
bought a shit-ton of product and stashed it away into a basement closet. But hey,
if I just meet my $500 sales quota by buying this garbage myself, I’ll qualify for
that cool super $100 downline bonus! And I'll get a fancy gemstone title
(Emerald/Diamond) that means absolutely nothing in the real world!
Anyhow, such events characterize the black swans risked when swimming as
guppies. In the network marketing space, Solavei, Vemma, and WakeUpNow are
just a few that recently have imploded, leaving millions of distributors (guppies)
wriggling for dead in an empty pond.
In WakeUpNow’s case, a letter from the current management blamed the
former CEO for taking advantage of his position. Specifically, they stated the
former CEO “made decisions that put the company on an irreparable negative
trajectory; and sadly, he went to great lengths to keep many of these decisions
secret from the rest of the management team and board of directors.”
Furthermore, they mentioned that the CEO’s “deceptive actions had put the
company in a position from which it could not recover. In the end, his decision
for a privileged few outweighed the incredible heart and dedication of the
many.”
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Please. Spare me the political, cover-your-ass drivel.

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Now imagine if your business relied on this company. Imagine giving this
company your heart and soul for years, and that your family depended on them.
And now, in a matter of days, gone. All because of ONE man and his ONE
decision. Feel the burn? Hopefully, with the Commandment of Control in your
corner, you won’t.
In my case, my prior four failed network-marketing forays (fortunately
congested into a brief moment of insanity during my youth) paved the way to
enlightenment: The only people getting rich with this horseshit were the
owners/founders of the company. From there, I committed to swim as a shark
and to stop schooling with the guppies.
Unfortunately, most entrepreneurs don’t escape Commandment-of-Control
tragedies with just a bruised ego and a tiny income drop—years of work can
unravel in hours. My forum is rife with such horror stories. For example,
imagine having your company instantaneously shut down—and the only person
standing between its failure or resurrection is a minimum-wage employee
halfway around the world, who can’t write clear English. Here’s the post:
It’s written right there in the book. Black and white. CENTS. For anyone who’s got
a business that isn’t in control, then be worried—very worried—and rectify
immediately. I’ve just had 60 percent of my monthly business wiped out with one
email. That one email simply states: “Your Amazon selling privileges have been
removed,” followed by a reason why that makes no sense.
Here’s what happens next. I submit an appeal and a plan of action as to why this
issue won’t happen again. Well, that’s absolutely fantastic considering they
haven’t told me what the issue is. Just a pointer to a list of guideline links. So I’ve
spent all morning writing my appeal, and I get one chance to save 60% of my
business from collapsing in one miserable morning. Oh and guess what, the nice
guys over at Amazon are going to keep the $15,000 of my money they are
currently receiving interest on for 90 days.
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In this case, the entrepreneur depends on the Amazon ecosystem to the
extremity that it IS his business. Without Amazon, there is no business.
Of course, we see this type of host/symbiont relationship in other business
instances. And yet, here’s another ripped from my forum pages.
A few weeks back, my friend launched his brand new venture. He teamed up with
a rock-star developer to build a product that would fill the gap when Google
removed RSS alerts. My alarm bells went off; he was building a service atop of

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Google’s platform, where he had no control! He was also violating their terms of
service.
After two months of intense work by him and his co-founder (done after their
nine-to-five jobs), they built a lovely product. The design was flawless; 500 people
had signed up for the launch. The launch date approached, and an email blast was
sent out a day before, notifying users.
Then on launch day, I got an email saying the product had been shut down—shut
down because Google had just reimplemented alerts for RSS on their launch day.
It’s a shame he didn’t read MJ’s book, which I suggested months earlier. Instead,
he read another launch book instead.
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These two stories are a forum normality.
Those who haven’t read my book learn the hard way—those who refuse to
heed the advice end up in stories like these:
Control Violation #1: You manufacture and sell widgets to Walmart.
Walmart is your only customer. When Walmart stops selling your product, your sales
go from $600,000 a month to $0.
Control Violation #2: You run an online eCommerce store leveraging the
Amazon affiliate program. You’ve done quite well. Suddenly, Amazon decides to
terminate all affiliates doing business in your state, due to a disagreement with your
state’s government. Suddenly, your store is empty, as will be your bank account.
Control Violation #3: You’re an affiliate marketer who sells XYZ’s product,
moving thousands of dollars in sales monthly. XYZ suddenly files for bankruptcy or
disappears. You and thousands of other affiliates are left hanging out to dry.
Control Violation #4: You’re a network marketer and your company’s
founder is indicted for fraud. The FCC shuts down the business. Your downline that
took years to build is gone overnight.
Control Violation #5: You buy a burgeoning, relatively unknown franchise
from a franchisor who likes to push the envelope with its advertising. The franchisor is
interviewed on national television and makes some inexcusable, racist comments. The
entire spectacle is a foot-in-the-mouth, social media shitshow. Suddenly, your business
is regarded negatively. By the time the dust settles and memories fade, you’ve gone
out of business.
Control Violation #6: You run an online store selling a highly commoditized
product that relies solely on SEO (search engine optimization). Most of your traffic and
sales come from Google searches. Google’s new “Panda update” changes their
algorithm and penalizes your website for nefarious SEO and backlinking tactics.
Suddenly, 10,000 hits per day are reduced to 100. Your product’s margin is so thin that
you cannot afford to advertise. You go from living large to not living at all.

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Amazon is a perfect (as well as dangerous) illustration of how entrepreneurs
“hitchhike” themselves into one-way trips with another business. 
Hitchhiking is
when your business is symbiotically codependent with another vehicle owned and
driven by someone else.
And that “someone” cannot be trusted or controlled.
Yeah, you’re at the mercy of a corporate stranger and his driving, his decisions,
and his motives.
In the case of Amazon, thousands of entrepreneurs have jumped into their
bed, gambling that the bed won’t be overturned. In fact, you could argue that my
books violate control because they are primarily sold on Amazon. This is
somewhat true. If Amazon removed my books from their website, my sales
would definitely suffer. However, I would not be out of business, and I’d still be
able to sell thousands. Why? Because diversification from influence is also a tenet
of the Control Commandment. In my case, Amazon is just ONE of many
channels I use to sell my books. Diversification from influence means your
product pulls from multiple channels; not just Amazon, but other channels
including your website. Leveraging one channel as your business model is a risky
walk of the tight-rope.
However, more importantly, diversification from influence means that your
business’s core asset is immune from influence. In my case, my real assets that I
can control are my personal brand, my reader list, and my platform. I spent
nearly a decade building a forum that spreads my message and is within my
control—a terms-of-service change at Facebook, LinkedIn, or Barnes and Noble
cannot change the legacy structures I’ve created, although each of these venues is
a critical element in the business strategy.