Showing posts with label Small Business. Show all posts
Showing posts with label Small Business. Show all posts

Thursday, November 28, 2013

The Concept Of Residual Income

Robert T. Kiyosaki
Cover of Robert T. Kiyosaki
Cover of "Rich Dad, Poor Dad: What the Ri...
Cover via Amazon
(written for Vishwa Sandesh)

The Concept Of Residual Income
By Paramendra Bhagat (www.paramendra.com)

There is a famous book called Rich Dad, Poor Dad by Robert Kiyosaki. Most financially literate people have heard of it. In it he pushes forth the concept of residual income, not his original idea. It is a difference in worldview.

There is the job mentality, and that is perhaps 99% of the people out there. You get a good education to get a good job with a good company. The income might be 20,000 dollars or 200,000 dollars, but that income is still linear. If you don’t show up for work, the money stops coming.

Nothing wrong with jobs. Jobs are how most people pay their bills, put food on the table. Jobs are wonderful things, but there is something beyond jobs. One has to be open to possibilities.

There is business ownership. Upendra Mahato might be flying around the world on NRN activities, but he is still making money at that time, because he is a business owner. Nobody says, but he did not even show up for work, let’s stop paying him. Why? Because he built something and put it into motion.

But then Upendra Mahato might be a bad example with which to highlight the concept. Because pretty much everybody would dismiss that example. How many Laxmi Mittals can the planet produce? Only so many. Even launching a restaurant with an initial investment of 200,000 dollars is beyond the reach of many people.

But then you might have seen small business owners who quite literally are always working. That can also put off some people. Where is the residual income in that, you might question. Also, it is not easy to start a business, it is not easy to sustain and grow a business, it is not easy to keep the lights on. A lot of businesses end up folding. People with the job mentality point that out. But look, they say.

Residual income is money showing up even if you don’t show up, because you built something and put it in motion. Residual income is you making money even when you are fast asleep because you put something in place and put it in motion. Residual income is being able to pass a business to your next generation. You can’t pass on your job to your son or daughter.

With a job you have only 24 hours, and chances are you are working eight, 10 or maybe 12 of those hours, some even manage 16. But it can never be beyond 24. That probably is the biggest limitation of linear income. Also, one person can acquire only so many skills. One person can only become so good with the skills he or she has.

But if you build a business team that has 10 people on it, you have 240 hours in a work day. If your average team member puts in 10 hours, you have a 100 hour work day. Chances are 10 people will make more money than one person. And 10 might not be your ceiling. Maybe you will take your team to 100, to 1,000, perhaps to 10,000. A job owner’s hours in the day are limited. But there is no limitation to how big a business owner’s team can be. And the 10 people on your team might have complimentary skill sets. Person A can do what person B cannot or does not have the time for.

Beyond residual income is a related concept: the concept of financial freedom. You have attained financial freedom when there is no longer a connection between what you do with your time and the money you make. You could be playing golf and still be making money. You go on vacation whenever you want, as often as you want. You spend a ton of time with your family, because that does not hurt your income stream anymore. Business ownership does not guarantee you financial freedom, but it is a vehicle that can take you there if you work hard and smart.

I feel like everyone who makes that conceptual jump and understands the residual income idea will go ahead and get started with network marketing. Robert Kiyosaki is a huge fan of network marketing. It beats job ownership, he says, and it beats small business ownership. But it has been amazing to me to see how easy it is to misunderstand this very simple business. People’s minds fly off on tangents. To many people to go from a job ownership mentality to a business ownership mentality is almost like changing religions. There is this huge inertia. They resist. They fight back. They come up with excuses. They rationalize their choices. You mean all that schooling I did was a waste? No, it was not.

Every time you watch an ad anywhere for products you buy and services you consume, know that you are paying for those. You just don’t see it that way. All network marketing does is it takes all that ad spend and give it to people like you who build a network to generate business volume. That is a hugely empowering concept. Sometimes I wonder if it took 10,000 dollars instead of 500 more people would do it, more people would take it seriously.

Those good at it have bothered to put in the effort to go through tremendous personal growth. I know someone who after a year of work is making 10,000 dollars a week. He has a good year every month.

With Patrick Maser And Rahman
The Appeal Of Network Marketing
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Friday, October 04, 2013

The Appeal Of Network Marketing

(written for Vishwa Sandesh)

The Appeal Of Network Marketing
By Paramendra Bhagat (www.paramendra.com)

I signed up for network marketing not long back. I don’t plan to quit doing the other things I am doing – tech consulting, my tech startup idea, my interest in Nepal hydro – but I am so glad I signed up. I once delved into it before I moved to New York City in 2005. I liked the business model, but I was on the road too much at the time to put in any serious effort. I was already familiar with the business model and a believer. What struck me this time was the products and services were things people were already using. There was this potential for mass appeal.

Traditional companies and distribution networks spend a ton of money on advertising. Network marketing companies do not spend on advertising. Instead they give that money to the marketers in their network. It is not a scam. It is a legitimate business model. Compare the million dollars you need to launch a McDonald’s franchise to the 500 dollars I had to put in to get started. That is a no brainer. This might be the only shot most people might have at business ownership.

There is hard work involved. This is not easy money. Many people sign up and quit because they thought it was effortless and it is not. And it does work. On October 3 Michael Maser showed up at my house. He flew in from Miami just for the event. He is my upline Senior Vice President, the top achievement in the business. He has been at it for 12 years now. He started part time. Then he quit his job once his income from the business matched his income from his job. Now he makes close to 80,000 dollars a week from the business. I saw those figures on his iPad. My most famous local upline is a Bangladeshi guy called Rahman: a bundle of energy and determination. Rahman signed up and made 150,000 dollars in his first four months. You might have seen Santanu at the TD Bank. He currently makes 8,000 dollars a month from the business.

Maser might make a few million a year, but that is not a billion. This is not a billion dollar idea for those who sign up, although it is for the founders of the company. A successful tech startup might be a billion dollar idea. But a million dollars is a lot of money. Less than 5% of Americans make more than 100,000 dollars a year. Rahman made 175,000 dollars in the past six months alone. The dude was driving a cab when he signed up, although he did have a calling card business on the side, which he still operates.

People sign up, go to an event, get excited, and then they go approach a few people and the force of rejection hits them so hard they either lose steam, or quit. The thing is you are not trying to convince people. Prequalifying is important. That way you reject them. They don’t reject you. You ask a set of prequalifying questions. Unless they prequalify, you don’t even bring up the topic. Once they prequalify, you bring it up the right away. And then you are ready for their answer: yes or no.

The support system is a tremendous aspect of the business. You are an independent business owner, but you are not on your own. Your uplines are so willing to go out of the way for you. Michael Maser showed up at my house before I had signed up my first person. Why would he do that? He would do that because he is part of a tremendous support system.

This is not for everybody, but it is for many more people than those that have already signed up. One speaker said, go find the PHDs: poor, hungry, driven people. Or go sign up business owners, people who are already striving to make a buck or two.

More than 99% of the people out there work jobs. Business ownership can feel like a leap of faith. It always strikes me how easy it is to misunderstand this very simple business. The mind keeps flying off of tangents for many new signups. Think about it, if the company is the same, the product and services are the same, and it is the same support system, it has got to be you. You are the reason why it is not working for you. You can become an Independent Business Owner for 500 dollars. But unless you are committed to being a team player and someone who seeks to go through tremendous personal growth, you might not make it. Most people fail because they give up. Most people fail because they do not make use of the support system. You plug into the system, and you plug your downlines into the system. And you learn. You soak it up every step of the way. Speakers get up to speak. You take notes.

Santanu who makes 8,000 dollars a month only signed up five people. He now has 800 people in his network and 18,000 customers. Those five people brought people who brought people who brought people. And all that happened in 12 months. You get the idea.

Some people first sign up as customers. Later they might or might not end up being Independent Business Owners. That is also a nice route to take.

To learn more go to http://bit.ly/1dndWg2

Photo Album: ACN: Saturday: Hotel Pennsylvania
Photo Album: ACN: Michael Maser At My Woodside Home
Relationship Marketing: The ACN Way: An Overview
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Wednesday, July 25, 2012

Promoted Tweets, Promoted Updates

Logo for Foursquare
Logo for Foursquare (Photo credit: Wikipedia)
Someone said FourSquare was the next Twitter. But that was a long time ago.

Foursquare Launches Promoted Updates, Its Newest Effort To Generate Revenue
Foursquare has partnered with about 20 merchants, from small mom and pop shops to national chains like Best Buy, to launch the pilot program. In the next few months, Foursquare hopes to turn Promoted Updates into a self-service tool merchants of all sizes can use on its platform..... Foursquare's 20 million users are checking in 5 million times per day. Foursquare currently has 120 employees.


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Saturday, March 05, 2011

Microfinance Alone Can't Cure Poverty

Father and Son - The Cycle of Poverty ContinuesImage by uncultured via FlickrMicrofinance is no magic bullet. Microfinance alone can't cure poverty.

Good governance, I think, is the first precondition. Yunus saw that. That is why he tried to launch a political party in Bangladesh a few years back. But looks like the politicians in Bangladesh have managed to unlaunch him instead.

Sunday, February 13, 2011

Normal People Easy To Get Along With

Chicago Bulls. Michael Jordan 1997Image via Wikipedia
Fred Wilson: Difficult Is Good: He then said, "sometimes we make money with brilliant people who are easy to get along with, most often we make money with brilliant people who are hard to get along with, but we rarely make money with normal people who are easy to get along with."
I am so not a VC. I am on the other side. Fred Wilson's best MBA Monday post - according to me - is one where he got an entrepreneur - Charlie - to relate his story.

This quote from Dan Valentine makes total sense to me. And I understand it 100%.

The best entrepreneurs tackle the biggest problems. Those problems are, by definition, badass. Others have not touched them because they are big and bad. But we operate in paradigms. You already know what a McDonald's burger looks like. That is a paradigm. That gives you peace of mind. You know.

Friday, February 04, 2011

The Entrepreneur Does Have A Boss

Steve Case, founder of AOL at Kinnernet in Isr...Image via WikipediaA lot of people have this misconception that people who don't like to have to answer to bosses start their own companies. Entrepreneurs don't have bosses.

Perhaps it is the case that the entrepreneur does not have a boss. What the entrepreneur has is a goddess: the market. As an entrepreneur you have to meet your numbers. As long as you meet your numbers, you are in good shape.

Entrepreneurs do get fired. All the time. The entrepreneur version is to go out of business. The goddess can get mad at you and wipe you out.

There is a reason most people are not entrepreneurs. Someone once said being an entrepreneur is like being gay, it is not like you have a choice. I think there is some truth to that. It is a personality type thing. Some people are just more bent on doing the entrepreneur thing.

Tuesday, February 01, 2011

Immensely Excited

By Richard Wheeler (Zephyris) 2007. Lambda rep...Image via WikipediaI am so very immensely excited with my startup.

Some people complain of the work environment of a big corporation, start a company, and their behavior will tell you they long for the big corporation.

You have to be excited, you have to stay excited. You have to get excited when you hit a wall, you have to stay excited when you get over it. Why would you get excited when you hit a wall? Because, well, what were you expecting? If you did not expect to hit walls, you were not expecting right.

At this stage with my startup it feels like I am getting to watch the formation of the DNA. It is an amazing feeling. I have a small team. We are making steady progress.

Soon I expect to speed things up.

I am really liking it that we could launch for very little. I am really liking it that we will start generating revenues almost right away. I am really liking that. I am liking the immense human component of my business model. Suddenly I will get to party with a purpose. The more people you talk to, the better you get at it.

Saturday, December 04, 2010

Bubble Talk Goes On: It's An Overshoot

Bono at the Vanity Fair kickoff party for the ...Image via WikipediaFred Wilson: Invest In The Mess
New York Times: A Silicon Bubble Shows Signs Of Reinflating
The Day I Got Called Sean Parker
Did Not Meet Fred Wilson, But Met Mazy Dar
Angel Bubbles: No Bubbles
Bubble, Boom Or Froth?

Fred has said repeatedly that what we are seeing is a bubble. First thing I say is this is not a yes no question. Is this a bubble? If you force ask me, my answer is no. This is not a bubble. This is hyperactivity. Will many angel investors lose money? Sure. But that does not make it a bubble. Even a top notch VC like Fred Wilson expects one third of his portfolio to go down under. And these are companies that he did not invest in on day one knowing they will go down. You think you picked a winner, you give them sufficient money and guidance, you go to bat for them, and they still go down. If Fred Wilson is at peace with a 33% failure rate, there are VCs whose failure rates are 66% and 90%. Most VCs fail. Most entrepreneurs fail. By some estimates as many as 90% of new businesses fail within a year of getting launched. Looks like 10% is all capitalism needs to survive.

Wednesday, November 10, 2010

Paramendra Bhagat: Model

Model Mayhem: Scam


Model Job Offer!
Nov 9 (2 days ago)

CAFE PRESS.It's all about you and your passions. In a nutshell, we're the world's best destination for expressing yourself through merchandise. From your favorite T-shirt and Woodie, to the tote bag over your shoulder and bumper sticker on your car, we're here to let you express your interests. And what makes our products so unique, and so expressive, is that we don't create the designs on them. Our community of designers do - all through millions of shops we help them run. CafePress is the world's biggest destination for self-expression through merchandise. Each month over 11 million shoppers visit CafePress to buy or create T-shirts, mugs, posters and other gifts that reflect their interests, passions, beliefs and affiliations. Today, CafePress is a growing network of over 6.5 million members who have unleashed their creativity to transform their artwork and ideas into an impressive catalog of over 250 million unique gifts. CafePress is where folks from all walks of life gather online to create, sell, and buy “print on-demand” products. Each brings to life whatever people are passionate about. It can be a white-hot political cause? A gorgeous grandchild? An obsessive hobby? A funny (or flirty?) thought?

Sunday, February 21, 2010

Call Out The Sexism

Dancers and Flutists, with an Egyptian hierogl...Image via Wikipedia
You Can't Launch the Next Generation of Startups Without Women - ReadWriteStart The current startup system essentially excludes the untapped pool of innovators who aren't developers - for example, women who want to launch Internet startups...... Women tend to take the entrepreneurial plunge later than men typically do, once they've had some professional and life experience.......... a study done in the U.K. in 2006 showed that women over 40 were more likely to start a new business than any other age group. ...... the Internet and the startup culture have been dominated and shaped by the vision and appetites of young men and old boys from the start. ..... a sharp rise in women-in-tech groups and activities lately, undoubtedly a response to this inequity. ...... revisit the startup system and create structures that foster innovation coming from a more diverse group of people (age, origin, gender)....... eak). Women tend to present their projects in terms of their value to users and society ...... women could benefit from mentoring that would teach them to conceptualize and present their concepts in technology terms and money terms. ....... today, non-technical entrepreneurs are just as likely to come up with viable startup concepts as programmers are ...... Investors need to start looking at paper projects again, and not dismissing non-technical founders. There need to be mechanisms that facilitate team building, like matchmaking resources for projects and developers.
If it is sexism, call it sexism. Don't overlook it, don't call it something else. Definitely don't call it meritocracy. If you are at a tech event, or a meeting, and some guy makes a sexist comment, then call him out. If you are a quiet bystander, you are an active participant. Tech entrepreneurship is a cutting edge thing, and there can not be room for sexism on the cutting edge. Sexism is not a problem for women to deal with. It is as much a problem for men. Our startups don't realize their full potential if we keep putting up with sexism.

If you don't have the time, inclination, penchant or patience for a long, drawn out argument, just call the guy a pig and move on. 

Shirky: A Rant About Women: not enough women have what it takes to behave like arrogant self-aggrandizing jerks ...... We’re in the middle of a generations-long project to encourage men to be better listeners and more sensitive partners, to take more account of others’ feelings and to let out our own feelings more. Similarly, I see colleges spending time and effort teaching women strategies for self-defense, including direct physical aggression. I sometimes wonder what would happen, though, if my college spent as much effort teaching women self-advancement as self-defense. .... we live in a world where women are discriminated against ...... Institutions assessing the fitness of candidates, in other words, often select self-promoters because self-promotion is tied to other characteristics needed for success. ....... To put yourself forward as someone good enough to do interesting things is, by definition, to expose yourself to all kinds of negative judgments ........ the fact that other people get to decide what they think of your behavior leaves only two strategies for not suffering from those judgments: not doing anything, or not caring about the reaction. ......... Not caring works surprisingly well. ........ it would be good if more women see interesting opportunities that they might not be qualified for, opportunities which they might in fact fuck up if they try to take them on, and then try to take them on. It would be good if more women got in the habit of raising their hands and saying “I can do that. Sign me up. My work is awesome,” no matter how many people that behavior upsets.

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Friday, April 17, 2009

Visionary Entrepreneurs Will Recreate The World



WASHINGTON - MARCH 13: Warren Buffett, chairma...Image by Getty Images via Daylife



That Plateau Feeling

Unless the political leadership gets the fundamentals right, there is not too much room for the entrepreneurs to play. Warren Buffett has said he could not have done what he has done if he were not in America. The soccer field is necessary. The referees matter fundamentally. The paint buckets matter to the artist. But great soccer is played by great soccer players. I compare visionary entrepreneurs to great soccer players.



Visionary entrepreneurs will lead the green tech revolution. Visionary entrepreneurs will create the next generation financial institutions. Visionary entrepreneurs will make it possible for the world to pour a trillion dollars into microfinance. Visionary entrepreneurs will create the next generation jobs, companies and industries so that Brazil, Russia, India, China and others maturing economically is good not bad news for America.

Political leaders have to provide the soccer field. It is good to see them hard at work.

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[PDF]
The Technology Entrepreneur’s Guidebook
Famous Technology Entrepreneurs
Study: A profile of the U.S. tech entrepreneur | News Blog - CNET News
Wired Campus: New Study Debunks Myth That Most Tech Entrepreneurs ... the median and average age at which U.S.-born entrepreneurs founded their technology and engineering companies was 39

Startup company - Wikipedia, the free encyclopedia

High Tech Startup Valuation Estimator
Ten questions for a high-tech startup | Tech News on ZDNet
Adam's Advice and Reading List for High Tech Startup Entrepeneurs

Entrepreneur.com
Entrepreneurs and Entrepreneurship - Starting and Running Your Own ...
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