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Your Channel -------> Your Product ----- > Your Customer
For example, in Chapter 34, I mentioned Sal Paola, who co-founded a
painting-accessory company. His invention, The Paint Brush Cover, makes
painting more convenient and less messy. His initial strategy was a customer
strategy: selling direct on his website. However, he knew a channel strategy was
where the explosive growth would occur. After a
Shark Tank
appearance and a
subsequent deal, Sal’s business exploded. Why? He added channels: Home
Depot, Sherwin-Williams, and hundreds of paint/hardware stores around the
world. Instead of selling ten units a month by a customer strategy, he boomed to
thousands of units per month. Of course, having thousands of
Shark Tank
viewers on national television helped too.
Likewise, 99 percent of the sales of this book, and my last, come from
channels—not my eCommerce website. Amazon, ACX, Kobo, Kindle, iTunes,
book wholesalers, retailers, and a whole slew of channels sell this book as a legacy
structure. My job as an entrepreneur and a marketer is to leverage those channels
by igniting demand. If a productocracy exists, sales naturally accelerate.
Most inventions—foodstuffs, clothing, and other tangible goods—scale
through a channel strategy. Executional challenges are finding channel
gatekeepers and convincing them of your product’s benefits. Will their
customers buy it? Is the margin large enough? Does it deserve prized shelf space?
Such negotiations can be harrowing and take months, depending on the
retailer. Whole Foods is particularly open to stocking local products, whereas if
you walked into Barnes & Noble with your Lulu book and asked for shelf space,
they’d laugh you out. Want to get into the retail giant Walmart? Beyond having a
product that isn’t considered “me too,” you’ll need to meet a multitude of
requirements, from product liability insurance to having an official Dun &
Bradstreet registration.
103
Want to get your product on a shopping network? The Home Shopping
Network and QVC are channels with competitive airing requirements. But don’t
let that stop you from trying—mega-millionaire successes have been launched on
QVC. Joy Mangano launched a $150 million empire with the Miracle Mop and
later had the tale told in a Hollywood movie,
Joy
. A struggling waitress just trying
to make ends meet, Joy grew tired of getting her hands dirty from filthy water
(notice the need language, “grew tired”) and conjured up the idea for a self-
wringing mop. She started selling her solution at local trade shows and in grocery
aisles. In 1989, after intense negotiation, she persuaded QVC to give her a shot.
Her first airing fell flat. However, in her next attempt, she took advantage of EV
and occurrences: she did a live demonstration and sold 18,000 in a mere twenty
minutes.
104
Great story, great channel.
While getting a foot into these channels is tough, the good news is there are
other channels with minimal entry barriers. Sometimes gatekeepers don’t exist—
just an online form or a short approval process. You can sell virtually anything
on Amazon, Etsy, or eBay. Walmart and Best Buy offer third-party sales
channels. Find where your audience congregates, and then query the channel.
$2,740: THE MATHEMATICS OF SCALE
Question: Does $2,740 mean anything to you? Probably not. It’s not life-
changing, and it’s certainly not something to jump up and down on the mattress
about.
Or is it?
If there was ever a magic number, it’s $2,740.
This figure represents the daily average profit you need for one year to earn
one million dollars ($2,740 X 365 days = $1,000,100). And when you break down
this number into its mathematical roots, you’ll see that scale isn’t as daunting as
you think.
Back in Chapter 23, the frugality scam’s polarizer was controllable unlimited
leverage, or CUL. The Commandment of Scale is what brings CUL to life. It is
your offense. I don’t think the average person knows (or thinks about) how
important scale is to wealth creation. For them, scale means buying more stocks
or mutual-fund shares. Mention leverage and they think about risky loans or
investment margin. None of this relates to scale and the unlimited mathematical
possibilities as it relates to a CENTS-based business.
For example, let’s say you created a great product and advertised it on
Facebook using its awesome targeting options. (You can target very specific
consumers on Facebook: e.g., “Show this ad to men over twenty-five who are
divorced and live in Arizona.”) Assume your profit margin on each sale is
twenty-five dollars. If you sell 110 units in one day, congratulations! You just
tickled the threshold of being a million-dollar earner—not over fifty years
because of a 401(k), but in JUST ONE YEAR—all because you scaled value.
Think about that for a moment.
Neither 25 (bucks) nor 110 (units) is a large number. And yet these numbers
are large enough to eek a millionaire pace in just one year. Even in my
semiretired
UNSCRIPTED
wonderland, every so often, my business ventures go
over the $2,740 number in one day, where it continually validates the
UNSCRIPTED
,
Fastlane
phenomenon. Don’t misinterpret scale to be gargantuan
numbers requiring a gargantuan payroll.
Before impacting millions, you must
impact hundreds.
Just like the Commandment of Time is perverted into “passive income,” the
Commandment of Scale is often molested into something worse: “get rich
quick.” Too many people dream about the millionaire mountaintop, making
them blind to the molehill in front of them. Like college, you didn’t take calculus
until you passed trigonometry, which was after algebra.
You can’t make millions
if you don’t learn how to make hundreds.
Scale is a process, not an event.
So where does mindfulness and knowledge start translating into action?
The next step in the
UNSCRIPTED
Entrepreneurial Framework:
kinetic
execution.
The CENTS Commandments are long-game constructs. Near term startup processes
can violate one or several commandments but eventually satisfy them.
In my first book, The Millionaire Fastlane, I go into a detailed mathematical analysis
about how wealth is created through the power of scale.
If you have multiple business failures banked, try analyzing them under the
microscope of the Fastlane Commandments to uncover the failure’s source.
CHAPTER 38
EXECUTING EXCELLENCE:
YOU CAN'T PREDICT THE UNPREDICTABLE
You’re never a loser until you quit trying.
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