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13 Surprising Lessons for Entrepreneurs from New Big Data: Digging Into Dataclysm

dataclysm

Christian Rudder is a mathematician and cofounded OkCupid, that crazy dating site. Apparently he wasn’t good enough at math to work at a hedge fund so he started playing with data his company collected instead.

Good thing for us. His book, Dataclysm, is the most fascinating book I’ve read this year. It is simultaneously easy to read, intensely intelligent, and hilarious.

Dataclysm is not a business book by any means. Yet I found a lot of what he had to say more instructive for entrepreneurs than most business books.

I’ve put together a collection of some of my favorite lessons from the book.

 

“Just Be Yourself”

There’s no excuse for us to be dulled versions of ourselves anymore. Your fear of rejection for being weird should now finally be eclipsed by the fear of being unoriginal. It feels better, sure, we’ve always known that. Data has shown that it also gets us better results.

“In any group of women who are all equally good-looking, the number of messages they get is highly correlated to the variance: from the pageant queens to the most homely women to the people right in between, the individuals who get the most affection will be the polarizing ones. And the effect isn’t small—being highly polarizing will in fact get you about 70 percent more messages. That means variance allows you to effectively jump several “leagues” up in the dating pecking order—for example, a very low-rated woman (20th percentile) with high variance in her votes gets hit on as much as a typical woman in the 70th percentile.

Moreover, the men giving out those 1s and 2s are not themselves hitting on the women—people practically never contact someone they’ve rated poorly. It’s that having haters somehow induces everyone else to want you more. People not liking you somehow brings you more attention entirely on its own. And, yes, in his underground castle, Karl Rove smiles knowingly, petting and enormous toad.”

What’s the Aristotle quote?

“To avoid criticism say nothing, do nothing, be nothing.”

It turns out that criticism is a byproduct of doing something worthwhile (this is not to say that criticism signals that you are absolutely doing something right, though). Soylent has enjoyed a huge boost in popularity thanks to it’s controversial nature.

Peter Thiel talks about uniqueness of founders in Zero to One:

Perhaps the founder distribution is, however strangely, an inverted normal distribution. Both tails are extremely fat. Perhaps founders are complex combinations of, e.g., extreme insiders and extreme outsiders at the same time. Our ideological narratives tend to isolate and reinforce just one side. But maybe those narratives don’t work for founders. Maybe the truth about founders comes from both sides. 

He pictures this idea with this distribution:

thiel founder distribution

 

Founders tend to sit at the extremes–both of them. [click to continue…]

How to Make $1k per Month Importing Products from China

A Millionaires Guide (2)So here it is: Everything we have ever learned about importing.

Our step-by-step hacks on how to make $1,000 a month importing from China.

Yes it can be scary, difficult, frustrating, down right painful, but if you follow our guide and stick to it, you will reap all the rewards and then some that the far east has to offer…

Search for Products

The first thing we need to define a “good product”. This is probably the most important question.

In the beginning almost everyone is drawn towards electronics because they are fun and interesting. But let me ask you this:

When was the last time you bought something electronic that was not made by Sony, Apple, Samsung, etc?

Probably never, me either. But like an idiot, these were the first products I tried to import. Don’t be like me. You do not want to compete with these companies for market share.

This is what we are looking for….

Requirements for a Profitable Product

Light weight: This is important because it saves on shipping charges and if you do have to deal with a return for some reason it will not kill you to ship stuff back, the last thing you want is to be shipping something heavy all over the country.

Simple: You want a product with a large margin for error. If there is a defect in the product ideally you should still be able to sell it. That is why we do not do electronics, a small defect with electronics and the whole product is worthless.

Between $10 – $200: This is where the majority of the world purchases products the ‘middle class’ of products and the middle class is what we are after. That is where all people are and thus all the money is.

How to Get Product Ideas

The first thing you need to do is identify products, there are a lot ways you can do this, and the hardest part is usually coming up with ideas to research. I usually do the following.

  1. Ask people what problems they are having Facebook and reddit are both great places for this, usually I just ask people questions about what things they use in their everyday lives that they have trouble with or could use improvement. Check out this reddit post here, this is how I do it.
  2. Keep a notebook where I jot down things that I see everyday that I think are cool or interesting. I made a short video about this and some shipping info.
  3. Look through Amazon Best Sellers and Ebay Popular to see if you can piggyback (we’ll define this later) or improve a product.
  4. Try to solve problems that I have. The most obvious problems are hard to solve because you have been dealing with them forever, so next time something seems a bit annoying or dumb  take a second and think if there is a way to improve it.

Research for Money Makers

Terapeak is an awesome tool for identifying products on eBay and Amazon. It’s also simple to use, all you need to do is input the product you want to research and TeraPeak will give you some sweet analytics. Like sell through ratio, sales volume, and the trend over 30, 60 and 90 days.

Another awesome tool is  Camel Camel Camel. CCC is a free tool that allows you to track pricing trends from Amazon over time so that you can easily see whether a product is trending up or down. Another great thing about CCC is you can get an idea of where to price your product in order to be competitive.

Here is a screenshot of MorphSuits, I use to sell a ton of these:

AMAZONScreen Shot 2014-11-12 at 6.25.04 PM

As you can see the price is trending down, so I would not do this product now. When you see a chart like this it usually means there are too many sellers now and the market has been oversaturated.

Searching for Suppliers

Alibaba is without a doubt the holy grail of Chinese factories. Anyone who is anyone is a member AND its not CHEAP, so people that are listed on there are either (A) Serious Factories or (B) Serious Scammers. Below I am going to show you, step by step, how to vet suppliers and make sure you are not dealing with a scammer. [click to continue…]

How to Find Profitable Business Ideas and Motivate Yourself to Execute Them: A Different Look at “Hooked”

If you’ve been online recently, you’ve heard about Nir Eyal’s new book, Hooked.

You’ve heard about it because it’s freaking awesome. It’s one the best business books to come out in 2014–and possibly the single most useful.

I’m not going to summarize his ideas here, instead, I’ve connected a few of the ideas in his book and used them in a slightly different way. Hooked is a quick read and there’s no fluff. You’ll read it in a day and be applying ideas to your business by the second chapter.

Getting Business Ideas

Evan Williams, the co-founder of Twitter, offers up this straight-forward formula for creating a new product or business:

Take a human desire, preferably one that has been around for a really long time…Identify that desire and use modern technology to take out steps.

This alone will take you a long way towards seeing opportunities all around you. Every complaint or annoyance is a sign that something could be done better. You could be the person that helps ease that pain.

Paul Graham has a simple formula that we can use to discover business ideas [click to continue…]

Make More Money With Cash Flow Management

This is a guest post by the wicked smart Linda Coussement of FromStartupToGrowup.com. It’s a fantastic primer on cash flow–something that every entrepreneur needs to understand. Enjoy!

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Ever been so worried about your cash that you didn’t even check your bank statement for weeks?

Simply hoping for the best when trying to pay for your groceries?

And then almost gotten a heart attack after you found out it’s even worse than you thought because of that 1 big credit card bill you’d forgotten?

How does this translate to your business?

Do you apply the same ‘stick your head in the sand’ strategy towards your cash?

I’m sure you don’t…

I’m sure you know what your burn rate looks like and that you’re already sitting on secondhand chairs to save on money. And of course you’re doing everything you can to reel in the customers. And your vision for the future is even more awesome.

Fact is though that poor cash flow management is one of the biggest reasons why start-ups fail.

They didn’t fail because their products were awful or that they were spending way too much.                                         They didn’t even fail because they didn’t have enough customers.

It’s because they couldn’t pay their bills the moment they needed to be paid.

It seems almost unfair, and to be honest, it sort of is…But it’s also easily fixable if you just know what to do.

So, here’s the inside scoop on consciously managing cash flow (even when you don’t have any accounting skills).

 

Why Cash Flow Is More Important Than Revenue

You LOVE revenue!

It means that you’ve sold something and that money is guaranteed to come in.

It’s fantastic!

But…exactly WHEN will this money be coming in?

[click to continue…]

21 Proven Ways To Overcome Impostor Syndrome

 

Liar

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I decided not to post this… but here we are. I told myself it wasn’t good enough. In actuality I was just scared. A reader saved it when she emailed about her own Impostor Syndrome. I sent her this post and she responded with this:

Well, here it goes…

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I’m a fraud and everyone is about to find out. I feel that every time I am about to share something. I feel that right now writing this: I don’t even have impostor syndrome. That’s how bad my impostor syndrome is. I even think I’m faking that. If it’s part of my life, it’s fake. What is impostor syndrome? It’s feeling like [click to continue…]