Want to be Rich? DON'T Start a Side Hustle.

Summary

The video script emphasizes that side hustles are not the key to life transformation but rather a distraction. It advocates for a strategic approach to building a business that can bring significant change. The speaker, drawing from personal experience in venture capital and business growth, introduces a simple yet effective formula for success: identify a problem, solve it, get paid, and then refine and repeat. The script encourages viewers to start by acknowledging problems in their daily lives or work, then to develop a minimum viable product to test in the market. It also highlights the importance of setting a price that covers costs and the need for continuous improvement and scaling to achieve profitability.

Takeaways

• 🎯 **Identify a Problem**: The first step to building a successful business is identifying a problem that needs solving.
• 🚀 **Take Action**: Stop procrastinating and start taking steps towards your business idea to gain momentum.
• 📝 **Document Problems**: Make a list of problems you've encountered in your daily life or work that you could potentially solve.
• 💡 **Brainstorm Solutions**: Think about how you could solve the problems you've listed and consider if there's a market for your solution.
• 🌟 **Start Simple**: Create a Minimum Viable Product (MVP) to test your idea in the market without overcomplicating it.
• 💼 **Market Research**: Assess the potential market size and determine how much people might be willing to pay for your solution.
• 💰 **Determine Pricing**: Set a price that covers your costs and provides a profit, but be open to adjusting it based on customer feedback.
• 🔄 **Iterate and Improve**: Use customer feedback to refine your product or service, making it better and more efficient.
• 📈 **Scale Up**: Once you have a successful product, think about how to scale your operations for greater efficiency and profitability.
• 🌱 **Continuous Learning**: The process of building a business is ongoing; keep learning from your customers and market to grow your venture.

Q & A

What is the main argument against side hustles presented in the script?

The main argument against side hustles is that they are a distraction and an attempt at a quick fix, which can keep a person on a hamster wheel, always running just to keep up, rather than leading to significant life change.

What is the speaker's background that qualifies them to give advice on business?

The speaker has an MBA from Cornell University and has spent their career building venture capital and private equity-backed companies, serving as the Chief Financial Officer of several software businesses.

What is the simple formula for finding success in business according to the script?

The simple formula for success in business is: identify a problem, solve the problem, and get paid for it.

Why is it important to start a business idea immediately according to the speaker?

Starting a business idea immediately is important because procrastination is a success killer and negative momentum. Positive momentum is needed, and once started, it's easier to keep moving forward.

What is the first step in building a successful business as outlined in the script?

The first step in building a successful business is to identify a problem. This involves noting and writing down problems encountered in daily life and considering potential solutions to those problems.

What does the acronym MVP stand for in the context of the script?

In the context of the script, MVP stands for Minimum Viable Product, which is the smallest and/or simplest product needed to solve the problem as initially envisioned to get sales.

Why should one not spend too much time designing the perfect solution initially?

One should not spend too much time designing the perfect solution initially because the extent of the customer's problem or what the perfect product is not yet known. It's better to start with an MVP and evolve it based on market feedback.

How does the speaker suggest determining the price for a solution in a new business?

The speaker suggests determining the price for a solution by estimating the cost to do or make it, including all time and costs, and then deciding on a price either through market research or by setting it equal to the cost plus a markup for profit.

What is the significance of the 'refine and repeat' step in the business formula?

The 'refine and repeat' step is significant as it involves working on the product based on customer feedback to make it better, scaling up production for efficiency, and leveraging various resources to make the business profitable.

Can you provide an example from the script of someone who identified a problem and built a business around it?

Yes, the script mentions a woman who was dissatisfied with the tea choices available in New York City despite living in a thriving Chinatown. She decided to solve this problem by starting an online tea business called 'Tea Drunk', which sells premium teas and promotes traditional Chinese tea culture.

Outlines

00:00

🚀 Starting a Business Instead of Side Hustles

The paragraph emphasizes the importance of focusing on building a business rather than getting caught up in side hustles. It suggests that side hustles can be a distraction and keep individuals in a cycle of endless work with little reward. The speaker, with an MBA from Cornell University and experience in venture capital and private equity-backed companies, proposes a four-step approach to starting a successful business: identify a problem, solve the problem, get paid, and refine and repeat. The speaker also stresses the need to overcome procrastination and start taking action towards building a business that can truly change one's life.

05:02

🔍 Identifying and Estimating Market Opportunities

This paragraph delves into the process of identifying problems and estimating the potential market size for a business idea. It encourages individuals to think about the problems they encounter in their daily lives and consider how they might solve them, turning these solutions into business opportunities. The speaker also advises on estimating the market opportunity by considering the number of people or businesses facing the same problem and their willingness to pay for a solution. Examples are given, such as the need for a course on raising chickens or bees, illustrating that even simple, everyday problems can lead to successful business ideas.

10:02

💼 Building and Scaling a Successful Business

The final paragraph discusses the importance of creating a minimum viable product (MVP) to test in the market, getting paid for the solution provided, and then refining and repeating the process to improve and scale the business. It highlights the story of John Lee Dumas, who identified a problem with the availability of podcasts and created a daily podcast to solve it. The paragraph emphasizes the iterative nature of business development, where initial products are improved based on customer feedback and the business model is refined for efficiency and profitability. The speaker concludes by encouraging listeners to start identifying problems and creating solutions to build great businesses.

Keywords

💡Side Hustle

A side hustle refers to a part-time job or business venture that one engages in to earn extra income alongside their primary job. In the video, the speaker argues against side hustles as a means to change one's life, suggesting they are distractions and quick fixes rather than a path to significant wealth or success. The speaker uses the term to contrast with building a full-fledged business, which they propose as a more effective way to achieve financial and life transformation.

💡Hamster Wheel

The 'hamster wheel' metaphor is used to describe a repetitive, unending cycle of work that doesn't lead to significant progress or change. In the context of the video, the speaker suggests that engaging in side hustles keeps people stuck in this cycle, always working but not moving forward towards substantial life improvement or financial freedom.

💡Venture Capital

Venture capital (VC) is financial capital provided to early-stage, high-potential businesses in exchange for equity or a stake in the company. The speaker mentions their experience with venture capital and private equity-backed companies to establish credibility and to emphasize the importance of identifying a problem and solving it as a key to building a successful business, which is a central theme of the video.

💡Minimum Viable Product (MVP)

An MVP is a version of a product with just enough features to satisfy early customers and provide feedback for future development. The video emphasizes the importance of starting with an MVP to test the market and gather customer insights before investing heavily in product development. This concept is central to the speaker's advice on how to start and grow a business effectively.

💡Problem Identification

Problem identification is the process of recognizing and defining a problem that needs to be solved. The video script suggests that the first step in building a successful business is to identify a problem that one can solve. The speaker encourages viewers to look for problems in their daily lives and work, and to consider these as potential business opportunities.

💡Market Opportunity

Market opportunity refers to the potential for a product or service to be successful in the market. The speaker advises considering the size of the potential market when deciding which business idea to pursue, aligning with the venture capital approach of evaluating the scale of the problem one is solving.

💡Refine and Repeat

Refine and repeat is a process of continuous improvement and iteration. After identifying a problem, solving it, and getting paid, the speaker suggests that one should refine the solution based on feedback and market response, and then repeat the process to improve and scale the business. This concept is integral to the video's message about growing a business over time.

💡Procrastination

Procrastination is the act of delaying or postponing tasks or actions. In the video, the speaker warns against procrastination, stating that it can kill success by preventing individuals from starting their business ventures. The term is used to emphasize the importance of taking action and gaining momentum in one's entrepreneurial journey.

💡Positive Momentum

Positive momentum refers to a self-reinforcing cycle of progress and achievement. The video script encourages viewers to start their business ventures to build positive momentum, which is easier to maintain than to initiate. This concept is used to motivate viewers to take the first steps towards their goals, rather than being stuck in inaction.

💡Profitability

Profitability is the ability of a business to generate income that is greater than its expenses, resulting in a profit. The video discusses the importance of setting a price for a product or service that covers costs and allows for profit, which is a fundamental aspect of ensuring the financial success and sustainability of a business.

💡Scaling

Scaling refers to the process of expanding a business's operations, production, or services to increase its size and profitability. The speaker in the video talks about the importance of scaling as a way to make a business more efficient, produce more, and ultimately become more profitable, which is a key step in turning a business into a significant source of wealth.

Highlights

The speaker emphasizes that side hustles are not the path to significant life change and instead suggests focusing on building a business.

The importance of watching videos about side hustles is questioned, as they can lead to a rabbit hole of confusion and overwhelm.

A call to action to stop procrastinating and start a business is made, highlighting that inaction is a 'success killer'.

The speaker shares their experience as a Chief Financial Officer to lend credibility to the advice given.

A simple formula for business success is introduced: identify a problem, solve it, and get paid.

The necessity of getting started is stressed, with the speaker advising to stop talking and start doing.

The speaker advises to identify problems in daily life and consider them as potential business opportunities.

The concept of a 'minimum viable product' (MVP) is introduced as a starting point for solving problems in the market.

The speaker recommends against spending excessive time on perfecting a solution before testing it in the market.

The importance of listening to customer feedback to evolve a product is highlighted.

An example of a successful business, 'Fitness Blender', is given to illustrate the concept of starting with an MVP.

The speaker explains the need to estimate costs and set prices for solutions, emphasizing the importance of profitability.

The story of 'Entrepreneur on Fire' podcast is shared as an example of a business that started with a simple idea and evolved.

The speaker discusses the refinement and scaling of a business as a key to wealth creation.

The process of identifying a problem, solving it, getting paid, and then refining and repeating is summarized as the core of business success.

The speaker concludes by encouraging the audience to start now and not waste time on side hustles.

Transcripts

I finally got serious about wanting to

change my life a few years ago so I did

my research I found the ultimate side

Hustle by watching hundreds of hours of

YouTube videos and picking the one that

was right for me and after working just

four hours a week for two months I'm now

a multi-millionaire

yeah right if you believe that I have a

bridge to sell you too

here's the truth watching videos about

side hustles is just taking you down the

rabbit hole you'll find yourself

clicking on one video after another in

hopes of finding a good way to make

money but after hours of wandering about

you'll end up lost overwhelmed and

Confused

I'm here to tell you that for someone

who actually really wants to change

their life for the better side hustles

are not the way to go side hustles are a

distraction an attempt at a quick fix a

little bit of easy money

but your time and energy is limited by

filling up any free time you have with

extra work of some kind that just pays a

small amount you stay on a hamster wheel

always running just trying to keep up

I propose that you do something

different instead of aiming low Aim High

follow the four steps that we will

discuss in this video to use your free

time to build a business that can change

your life instead of pursuing a side gig

that will just be a small supplement to

your main job that keeps you on the

hamster wheel

after earning an MBA at Cornell

University I spent my career building

venture capital and private Equity

backed companies I've served as the

Chief Financial Officer of several

software businesses where I worked

closely with sales marketing and

operations to grow the company

I tell you this so you know that what

I'm sharing today comes from experience

so here's the secret to starting a

successful business actually it's not

really a secret at all but it gets

drowned out amidst all the noise and

distractions on YouTube from countless

how to make money videos

the truth is finding success in business

comes down to this one simple formula

write it down and always keep it in mind

you need to one identify a problem

two solve the problem three get paid

for refine and repeat

let's walk through this in a little more

detail with some great examples of how

regular people build thriving businesses

by following this formula

the formula starts with number one being

identify a problem but actually there's

a vital step before number one and that

is to tell yourself get started already

stop talking about wanting to start a

business stop endlessly watching videos

scrolling for ideas stop coming up with

reasons why you can't start yet why now

is not a good time why I'll start just

as soon as something whatever I'm

waiting for to get out of the way

just get started

procrastination is a success killer

procrastination is negative momentum and

what you need is positive momentum once

you start moving it's so much easier to

keep moving so start moving get started

good

now that you're moving here's what

you're going to do first identify a

problem the world is full of problems

you come across problems in your daily

life the key is to note them write them

down literally sit down and make a list

don't just wait for inspiration to serve

up the perfect business idea in a dream

because that may never happen

think of the problems you've come across

in your life think of things in your

hobbies or your work that were hard to

do or hard to figure out then think

about what a solution to those problems

might be

if you can solve these problems you have

a potential business

every business involves someone getting

paid to solve a problem for example

entertainment businesses can be thought

of as solving any number of problems or

needs such as boredom loneliness

distraction inspiration providing an

escape or relaxation Etc a health or

Wellness business like a doctor a health

author or a fitness YouTuber helps solve

all sorts of problems or needs with

information and inspiration and support

to help people improve their health

a tax accountant solves the problems of

tax preparation being complicated scary

or time consuming for many people

so think back what problems have you

encountered that you solved or could

solve what things have you learned how

to do that could form the basis for a

product

a woman who I used to work with in New

York City was from China

she was interested in traditional

Chinese tea but even though we lived in

New York City with its thriving

Chinatown she wasn't satisfied with the

tea choices available

she decided to solve this problem and

started an online tea business called

tea drunk where she sells premium teas

imported from China promotes and

celebrates traditional Chinese tea

culture and offers free and paid classes

about tea for The Connoisseur she's

created a thriving business around t a

business does not have to be complicated

to do well

whatever problems and solutions you come

up with try to estimate how big the

potential Market opportunity is try to

answer the questions how many people or

businesses have this problem and how

much might they pay for a solution

when asking these questions you are

following the lead of some of the best

investors and startup companies The

Venture Capital investors they always

want to know what problem do you solve

and how big is the market opportunity

if you borrow this approach it can help

you choose which of several different

business ideas might be most attractive

to pursue

to give you further ideas of problems

you might find and to illustrate that it

can be simple things here are some

problems I've come across recently in my

life

my wife wanted to raise chickens we live

in a country environment that gets

really cold in the winter we knew

nothing about raising chickens or about

how to keep them safe in the cold so to

answer the countless questions we had

about how to do it we scoured the

internet and YouTube looking for advice

I would have gladly paid for a course on

raising chickens or a support resource

of some kind it would have saved us so

much time

same thing with bees she wanted to raise

honeybees but again it was not a good

resource available or at least not that

we found

we would have gladly paid for a course

or help

or food for thought if you work in a

business what doesn't work well there

what slows things down or causes

problems or something that could be done

a lot better faster or cheaper

can you solve any of them is this a

problem that other companies have too

solving these problems are all potential

businesses

speaking of problems I'm having a small

problem right now I can't quite reach

the like button on your screen could you

do me a favor and just

push the like button if you're enjoying

the video I don't really understand it

but I heard a rumor that this somehow

tells Google that this is a good video

to share I don't know

and if you want more of this kind of

content from me go ahead and subscribe

too

thanks very much

back to our list number two

once you've identified some problems

that you could solve that you believe

have a big enough market opportunity to

be worth your while think about how you

could solve them for someone is it

something that you would teach other

people how to do themselves or a service

that you would do for them or something

that you would make and sell decide how

you will solve the problem

okay now listen carefully to what I'm

about to tell you this is a very

important point you should not spend a

ton of time trying to design the perfect

solution you can't because you don't

know yet the extent of the customer's

problem or what the perfect product is

you have an idea but you haven't tested

it yet in the market

so put together what you think is the

minimum viable product known as the MVP

the smallest and or simplest product

needed to solve the problem is you

envision it and to get sales

this is what you bring to market sell

them this product first and then listen

to your customers to get feedback

with the feedback you can evolve the

product and make it better

this method is explained brilliantly in

a book called The Lean Startup which

I'll link to in the description under

the video I highly recommend this book

for all entrepreneurs and anyone

thinking of starting a business it will

literally make you smarter by showing

you how to think about building and

evolving a product to fit your Market

Kelly and Daniel are health and fitness

Buffs they enjoyed everything about

eating right and a good exercise routine

but when they look for videos on YouTube

on these topics they found it lacking so

they started a YouTube channel to fill

the gap

their videos were not fancy just basic

the videos showed Kelly and Daniel

working out together and coaching the

viewers through the routine so viewers

could work out with them a classic MVP

well guess what people love them

their Channel and business named Fitness

Blender has been wildly successful with

6.7 million subscribers on YouTube with

loads of free videos plus a website

where you can buy premium content and

tools

start with the MVP and evolve it if and

when necessary three you need to get

paid for providing the solution estimate

how much it will cost you to do or to

make include all of your time and costs

then decide how much you will charge for

the solution

you can set your price by doing market

research to see how much other people

charge for similar services or set the

price equal to your Cost Plus a markup

for profit

to be profitable obviously your selling

price needs to be higher than your cost

be mindful though that depending on what

you're selling

it might be difficult to determine the

right price because it's not clear yet

how valuable your product is to the

market or what your cost will be

at this stage particularly before you

launch a service based product there

simply may be too many unknowns you may

not know for sure how much it will cost

you to provide the product or solution

because you may not know how much time

it will take you to do the work involved

you also won't know if the product is

right for the market or if it needs a

lot of changes which could change the

cost and you don't know yet how much

value it provides to your customers

so at this point I just aim to set a

price that covers all my estimated costs

including a reasonable wage for my time

making sure to protect myself should

cost be higher than expected and just

try to make some sales

the product and pricing can be refined

later

the purpose of the early stages of all

this are to test the product and learn

John Lee Dumas used to drive to work

listening to podcasts but he got

frustrated that the ones he liked only

came out with maybe one episode per week

he really wished they were available

more often

then John realized that he could create

the solution himself that he wished was

available

so John launched his podcast called

entrepreneur on fire publishing one new

episode every day

John's Focus initially was not Revenue

it was on building a good product

granted his cost consisted mostly of his

own time but still he was basically

working for free initially to get the

product up and running and in the hands

of customers his listeners

well John's podcast was a big hit with

now over 100 million listens to his

episodes before long he noticed that

some of his listeners were asking him

lots of questions about the steps

involved in making a podcast

this is where he refined his product

offering because his customers were

telling him they wanted something more

in response he created an in-depth

online resource to teach people all the

steps involved in launching a podcast

this podcasting course was also a huge

success John has now run these

businesses for over a decade and made

many many millions of dollars from them

this brings us to step four refine and

repeat this is where you work on the

stuff that can make you rich you've

identified a product idea to solve a

problem for someone you've built a

minimum viable product and got it into

the hands of initial customers up until

now production of the product may be

pretty manual and inefficient as you

work with initial customers or get

feedback from them if they bought a

finished product learn from them and

make the product better

then you'll sell and deliver the better

product over time you keep learning keep

selling and keep making it better

also start thinking about how to scale

up your production about how you can

make it faster and easier to produce and

maybe even less expensive to make you'll

also learn better what the value

proposition is to your customer which

will help you in your sales and

marketing and in setting a better price

this stage is where you start to make

your business into a factory where you

produce more better cheaper

it's in the scaling of your business

where you start to leverage things other

people processes software and Machinery

depending on the nature of your business

which can help it to become wonderfully

profitable

once again the steps are

identify a problem solve the problem get

paid refine and repeat

there are countless examples of regular

people building great businesses they're

no better than you are no smarter no

luckier they just found a problem

identified a solution and took action if

you really want to change your life

don't waste time on side hustles work on

identifying a problem and then create

the solution

so get started now

I'll see you in the next one