How To Make Money Out Of Thin Air by Brian Sher
Do you want to know how to make money the millionaire’s way? If yes, you need Brian Sher to show you just how easy it is to make good money consistently in his book, How To Make Money Out Of Thin Air.
Here is just an excerpt from the book. Enjoy!
Twenty Habits Of The Worldâ€™s Most Valuable Businesses
In contrast to the previous chapter, letâ€™s take a close look at the habits of the worldâ€™s most valuable businesses and what makes them so valuable.
The wealthiest companies in the world are capitalized in the hundreds of billions of dollars, which places a huge value on these businesses, and brings great wealth to the owners. However, total capitalization is not the most important thing to look at when you are assessing how valuable a business is: look instead at the price earnings ratio (p/e ratio), printed beside the stock price in the business pages of newspapers. You will see that most of these ratios are somewhere around 15-20, but some are much higher, even reaching the hundreds. At February 2002, Microsoft had a p/e of 55.26, Alliance Data Systems Corp a p/e of 141.10, SmartForce a p/e of 461.47, Precise Software Solutions Ltd a p/e of 554.75.
What this means is that these companies are valued at 55,141,461 and 545 times their earnings. What this really means is that people are prepared to invest in or buy these companies at 55 or 545 times the current profit they are making. Investors are prepared to invest on the basis of waiting 55 or 545 years to get 100 percent return on their money.
Now, why would people be willing to do this, when many such investors wonâ€™t even be alive long enough to get the money they put in returned? The answer is the theme of this book. It is the principle about making money out of thin air, and is one that you must learn well.
These investors are not after income return. They are after asset growth, and are investing their money believing they will be able to sell their shares in a short period and make a capital gain. In other words, they buy and sell shares to make money out of thin air.
Thatâ€™s the game. Thatâ€™s what itâ€™s all about. This is what stock traders do. They shuffle paper and make money out of thin air. Yet this is exactly what many people who sell their time or start a small business do not do â€“ and therefore never get rich.
To make money out of thin air as a stock trader is a good way of getting rich, but you need to be very skilled at it and be prepared to risk losing a lot, too, as even the best cannot predict market sentiment and other factors affecting stock prices. Making money as a stock trader can be a lucrative business, yet nothing can beat the returns you will get by starting and building your own business from scratch.
Going into your own business, you should be doing what stock traders are doing with other companiesâ€™ shares, except do this with your own shares. Set your business up to become valuable and tradeable, and one day soon these stock traders will be buying your shares from you. And guess who would have made money out of thin air from these very traders? You, of course!
Let me now share with you in this chapter some of the attributes that I have studied in the worldâ€™s most valuable businesses. We are going to look at many examples of big companies and successful products, to illustrate the points being discussed.
You may think these companies and examples donâ€™t apply to you, as they are so big and well funded that you cannot emulate what they are doing. If this is your thought process it is completely wrong. These companies were not always big. At one stage or another they were exactly the same size your business is now. They have simply grown big precisely because they have addressed the following habits.
The worldâ€™s most valuable businesses have all or many of the following attributes in common â€“ and your business should, too.
1. Operate In Large Markets Or Growth Markets
You should not simply go into a business because you like it and think it is a good idea â€“ and your friends do, too. (Having said this, this strategy can work and has worked for others, but they have been fortunate and the growth has occurred by accident in most cases.)
You must think of your idea in context of the market you are entering and ask yourself: is this market a growth market that has worldwide potential? If the answer is â€˜noâ€™, then youâ€™re probably already limiting yourself and your ability to make money out of thin air. If, on the other hand, your answer is â€˜yesâ€™, then this is an exciting place to start.
The worldâ€™s most valuable businesses have in common the fact that they are operating in large and generally growing markets. So should you.
2. Have Unique, Timely Products
Once you have considered your market potential you need to look at your products or services and ask yourself: are they unique or timely or are they commonly available already?
If your answer is that they are not unique or timely, you will find your ability to capture a large market share is limited and this will thus limit your tradeable value. If your answer is yes, however, it will allow you the opportunity to charge premium margins, attract many customers and allow you to expand rapidly.
Letâ€™s look at examples of this. Viagra is a drug that helps men with impotency problems. This product is unique â€“ there is nothing else quite like it. It addresses a worldwide market and is timely. When this product was first offered for sale it became the biggest-selling lifestyle drug ever sold, enormously adding to the value of its owner, Pfizer Inc., a pharmaceutical company.
3. Sell Only Leveraged Products
The worldâ€™s most valuable businesses only sell leveraged products.
Generally they do not sell time as their prime offering. They usually sell packages or packaged products they have only made once â€“ the system takes over from there.
It is essential that you heed this advice. No matter how big your market is or how unique your products are, if you do not sell leveraged products there will be a limit to how much you can sell and therefore a limit on the value of your business.
Take Microsoft again, as an example. They design unique state-of-the-art software (making it once), then sell as many copies as their factories can burn onto disk. The disk costs a matter of a few cents, yet Microsoft sell the software for hundreds, even thousands, of dollars.
What an outstanding business. You have no choice but to pay this price if you want the latest windows product, as you canâ€™t get it from anyone else.
Now, contrast this with our service station example in the worldâ€™s least valuable business section (page 54), and recall how quickly customers will shop elsewhere because they will save fifty cents. Which business would you rather be in?
4. Have Residual Income
This habit of the worldâ€™s most valuable businesses is what helps make them so valuable â€“ having a residual income.
If you want your business to be extraordinarily valuable, tradeable and saleable you must have products that you not only sell once but can sell over and over again. Better yet is the situation where you only need to sell them once and after that your customers continue to buy at regular intervals from you: this is having residual income.
Companies that do this make millions, if not billions, in profits and are worth huge sums of money. Letâ€™s look at a few.
ï‚§ Telstra, or any well-run telecommunication company, supplies you with a phone and a phone line, then you pay them rental every day for having the right to use the phone line. They donâ€™t have to sell to you again for years, and if they decide to put the price up, you just complain a little but pay their fees and charges. Having competition now in the market has made little difference to this scenario.
ï‚§ Banks. You open an account with your money, which you give to them, and they charge you every month for this, as well as charging you every time you want to make a deposit or withdrawal. What a great business! Bank loans are similar. The bank sells you a loan product once, yet you end up paying them for twenty to thirty years.
ï‚§ Credit card companies. They sell you their card product once and you pay them every time you have it, for years and years.
Now you know why these companies have thousands of employees, make huge profits and are able to pay the big-city rents. Speaking of rentsâ€¦ landlords do the same thing. You buy the right to use their home or office space, and you pay them every month, for years in many cases. I am sure you can see the pattern here.
Now, contrast this with the sales strategy of a car dealership, shoe shop or burglar alarm company. I am certain you are beginning to see the difference â€“ and the resulting difference in values these businesses attract.
5. Have Great Systems
Many people are confused about systems. What exactly are they and why are they so important?
Systems are the only way that will allow you to guard your valuable time and use it to build the business, instead of using your time just to keep the business going. Systems move you from being paid for your labour to being paid for your ideas. They allow you to expand comfortably, or to step back from the business and let it run itself. Systems bring you the freedom that probably attracted you to the idea of business in the first place. And with that freedom comes true success.
Great systems are what ultimately make companies valuable. It is the fact that everything in a company is systemized that makes it possible for the owners to leverage time and skill.
By having great systems, companies can get a predictable result with higher quality and lower costs. Great systems mean less-skilled people can be employed to perform higher-skilled tasks â€“ and this is what builds value into these businesses.
The most valuable companies have everything systemized. Nothing is left to chance or guesswork. They have systems and procedures documenting just about everything for design and production, for administration, distribution, hiring and firing, for customer service, sales and marketingâ€¦ nearly every aspect of the business is systemized in one form or another.
This is so important as it not only lowers the cost of running the business, but it also ensures that the business is not dependent on any one individual. Everyone is replaceable and dispensable, so the show will go on no matter what. Freeing a business from reliance on any individual is the goal, and this goal should be worked on from the very start.
I mentioned earlier the success of Tom Monaghan of Dominoâ€™s Pizza. Now, anybody can make a pizza. Yet what Tom set out to do was not to sell pizza at all, but to set up a world-class pizza-making system.
There is a huge difference. Monaghan made a good product at a good price, yet his marketing â€“ â€˜there in thirty minutes hot, or itâ€™s freeâ€™ â€“ and distribution system â€“ being first in home delivery â€“ when others were just selling pizza in sit-down restaurants, gave him all the edge he needed and a big head start in making money out of thin air, in the pizza market.
When you run a business, you need a wide range of skills. Your time is valuable, youâ€™re highly productive. What systems free you up to do is to pass those skills on to others, through procedures and processes, so they too can perform high-value, high-revenue work at a much lower cost than you could. This in turn frees you up to develop your systems further, to make your business more profitable and to bring in new business and more revenue.
6. Great Customer Service
No company can grow big, become great and succeed without great customer service, especially early in their life cycle.
Itâ€™s one of the main reasons customers prefer to deal with a small company rather than a large one, as generally small companies can excel in the area of customer service. When you call a small company you usually get the phone answered by a person, not a machine. When you have a problem you usually speak to a person who can make a decision to fix it, rather than someone who listens but does not have the authority to make a decision and adds to your frustration.
Unfortunately, in many cases this area of business does slip when companies become big. The worldâ€™s most valuable businesses still need to offer great customer service, because this is what keeps their customers coming back and adds to their value. As your business grows, this aspect must never be forgotten or it will cost you millions.
Not all large companies lose their focus on customer service: look at the legendary examples of excellent customer service given by major businesses such as Disney, the big US retailer Sears and the Ritz-Carlton hotels, among many others who have gone to great lengths to ensure customer satisfaction. There have been examples of customers coming back to Sears complaining about a product and receiving a refund, only to discover they did not even purchase the product from Sears in the first instance.
You donâ€™t have to go this far. However, your level of customer service needs to equal, if not better, that of great world-class companies in whatever business you do.
7. Powerful Brands
The worldâ€™s most valuable businesses have powerful, instantly recognizable brands. In fact, many of the most valuable businesses have brands that can contribute as much as 50 per cent of the value of their entire company.
Billabong is one such brand where the name comprises 50 per cent of its value. Hey, you can buy an unbranded T-shirt for $5-10 at Target. The Billabong name increases the value at least fourfold. This is the power of building a brand.
Telstraâ€™s brand is valued at approximately $9.4billion. Talk about making money out of thin air.
A brand is thin air. Itâ€™s nothing more than the cumulative meaning that a particular product or service has achieved in a customerâ€™s mind. Coca-cola is one of the worldâ€™s most valuable brands. In 1993-94 its value stood at US$35.9billion, while Nescafe was valued at US$11.5billion, Kelloggâ€™s US$9.3billion, Gillette US$8.2billion.
Harley-Davidson, Rolls-Royce, Xerox, Kleenex, Nike, Sony, Honda, Harvard, Kodak, Mercedes-Benz and Leviâ€™s are amongst the worldâ€™s most powerful brands, yet people forget these businesses were not always this way. Many of them have emerged only in the last forty years, build from one-man businesses into companies that have enormous value.
Now, how does this help you if you are just starting out and donâ€™t have millions of dollars to spend on brand building and advertising?
Even when starting out you need to develop a brand of your own, and to be very clear what that brand stands for and why you think customers will want to buy your brand. If you are not clear about this from the start it will only confuse your customers and lessen the value of your brand. There is an excellent book by Al Reis and Laura Reis called The 22 Immutable Laws of Branding which covers this topic at length. I recommend that you read it.
8. Not Dependent On One Person
This point has already been discussed and at this stage it should be clear that there are enormous advantages in building a business that is not dependent on one person.
This does not only apply to small businesses, although they are the most susceptible. Even large businesses that are seen to be heavily dependent on one person can have major shifts in their value from one day to the next.
Newscorp, for example, was made enormously successful by Rupert Murdoch, and is certainly one of the worldâ€™s most valuable businesses, with a market capitalization of nearly $73billion. Murdochâ€™s influence on the future of the company results in massive stock price shifts at the first sight of his ill health.
This is a bad sign for this company and companies like it, as it affects their value greatly. Many great companies have this problem and the ownersâ€™ work hard to ensure they let the market know their heirs and successors are equally capable. Sometimes, however, even this does not have the full effect they are looking for and does not protect the companyâ€™s value.
9. Usually First In The Market – Market Leader
History has proven that the first established company into the market usually remains dominant for years to come. Once you are the established brand leader it is hard to lose your leadership.
A widely publicized study of twenty-five leading brands in twenty-five different product categories in the year 1923 compared with the present situation showed that twenty of the same twenty-five brands are still leaders today. In the last seventy-eight years only five have lost their leadership.
Most new customers naturally gravitate towards the leading brand. Federal Express? The first in overnight delivery. Dominoâ€™s Pizza? The first in home-delivered pizzas. These are great examples of companies that were first in the market, or that created a new market category and dominated it. They have become worth billions of dollars in a relatively small number of years.
10. Attract The Best And Brightest People
The worldâ€™s most valuable businesses are usually places that are dynamic, exciting, stimulating places to work, with changes happening all the time due to growth.
This provides endless opportunities for people joining the company to learn and grow personally. They are offered ongoing training, promotion opportunities and clear career paths over a number of years.
Employees are trusted, given responsibility and encouraged to make mistakes without fear of failure or punishment. These are places where people say they love their jobs, and they do. The come to work early, leave late and are respected and appreciated for their contribution. This type of environment attracts the best and brightest people.
Why is this important to help you make money out of thin air and why should you develop this type of culture in your business from day one?
Your people are your greatest asset, not your equipment or products. They are the ones who make your products or services, find your customers, sell to them, and do everything else that makes your business a business.
Yet at about 5p.m. each night your assets get up and leave, and may not even return the next day. When you realize this, you realize business is all about people-nothing else. Look after your people and the business will look after itself. This sounds quite fundamental, I know, but not one in a thousand businesses does this well.
No matter how good your product or service is, your entire business depends on people creating, producing and delivering it to the customer. In this process many things can, and will, go wrong. Itâ€™s only the skill and care that your people take in your business that will give your company the edge. If your people are sloppy, careless, underskilled or unmotivated, this will show up in the way they deliver your product or service, and in the way they deal with your customers. A state-of-the-art manufacturing facility is worthless if your receptionist doesnâ€™t answer the phone properly, or upsets customers. What good will the best-looking storefront be, if your sales assistants are ignoring the customers?
If your people are switched on, motivated and totally focused on serving the customer, you are way ahead. Your competitors will never copy the effect of a business whose staff enjoy their work, have fun and genuinely care about customers.
No matter what your competitors do, they canâ€™t go out and create this just because theyâ€™ve seen you have it. Getting and keeping good people is one of the most difficult things in business. Itâ€™s also one of the most valuable, because it puts you so far ahead of your competition and helps keep you there.
Giving someone a job is easy. Making sure they are the right person for the job is much harder, but much more important. Those people you employ create your business. They create its culture, its service, its quality, its reputation and, ultimately, its profit.
The basic principle is: if you hire someone great, you become great, and your life will become easier. But if you hire the wrong person you undermine your lifestyle and the value of the business. Hire people with better skills and bigger vision than you have, and you create a great business.
To be able to hire the right people, you have to know how to select them, how to test their qualities and how to get the most from them. Like marketing, hiring (especially for key positions) is too important to leave to other people-make sure you do this yourself.
11. Reward Based On Performance Not Longevity/Time
This is one of the most important habits of a successful business: rewarding people based on performance and responsibility, not on their period of employment.
In other words, there should be no such thing as automatic annual pay rises or Christmas bonuses. Increased pay, or for that matter any basis of pay, should be based on performance, attitude and contribution. This should be explained to all employees before they start and they should understand what behavior will reward their performance and what behavior will relocated them back to the dole queue.
In Michael Leboeufâ€™s book The Greatest Management Principle in the World, he talks about rewarding only those outcomes you wish to achieve. Now, think how simple yet powerful this is, yet so many companies do not do it.
Paying someone an hourly rate is a huge mistake. It is the exact opposite of what Michael Leboeuf suggests, and indeed opposite to what many of the most valuable businesses do.
Your people should be incentive driven and paid as much as humanly possible for achieving a result, not for taking an action. Achieving results is what customers pay for. You should never pay someone simply for showing up and going through the motions.
You must have them set goals or you must set these for them, so everybody knows what is expected. Paying someone on an hourly basis is simply rewarding him or her for showing up and working slower. Think about this: if someone is getting the same amount to process say ten applications that they would get if they processed eight, why would they work up a sweat trying to process the ten?
Sounds simple, yet very few businesses understand this.
12. Have High Margins
If your business addresses worldwide growth markets and offers unique and timely products, then this makes you something of a monopoly, albeit a small one at first. This monopoly status means that if your customers want your products, they have no other choice but to go out of their way to buy them from you.
It allows you to charge higher prices due to the demand and supply equation working in your favour and this means healthy margins, which allow you to afford to fund your rapid growth.
Conversely, if you do not select to go into a business with the habits I am outlining for you here, you will find it difficult to grow because you cannot afford to, and it will greatly affect your ability to make money out of thin air.
13. Have Few Real Competitors
Being a monopoly by pure definition means you do not have any real competitors, and the most valuable businesses structure and protect themselves to hold this position, through continually innovating and keeping ahead of the game.
When you first start out you may have a competitive edge if you are the only one in the market doing what you are doing-your only competition is customer apathy. However, as you get bigger and more successful, you must expect competition and you will need to ensure you are always leading and your competition is always playing catch up. Holding this position makes your business far more valuable.
14. Keep Innovating â€“ A Flow Of New Products
The best companies make this intrinsic in their growth strategy from day one. Their motto is innovate or die, as this is exactly what will happen sooner or later.
When you first start out you may appear to have a competitive edge because no one can be bothered challenging a tiny niche business â€“ until it starts making inroads into the marketplace. No matter how unique your products are at the beginning, as soon as the market realizes the speed at which you are growing and the profits you are making, competition will arrive â€“ and fast.
In an attempt to emulate (or steal) your success, they will begin by trying to copy you. It is important that you anticipate this happening before it occurs and have version or model 2, 3 and 4 ready to go before they have launched their model 1.
This thinking will secure your market dominance and leadership position, and still offer you the opportunity to maintain margins and growth.
15. Have An Investor Entry And Exit Strategy
Most start-up operators have no idea what they will do with the business once it is profitable. They have no exit strategy.
This is one of the weakest aspects of most start-up or small businesses. I have said this before but Iâ€™ll say it again, as it is the key point in making money out of thin air. Making money out of thin air requires you to build a business asset and sell it for a profit. However, if you cannot sell it you cannot enjoy getting rich this way. The worldâ€™s most valuable companies have built this strategy in from day one.
Furthermore, if you need investor money to start and build your business, remember that investors will never put their money in if they canâ€™t get it out at a profit within a reasonable number of years. If you donâ€™t have an exit strategy, I can assure you no one is going to invest in your business, and neither should you.
This does not mean you have to sell your business, or that investors will want to exit. It simply means you must always have this option from the very start.
Very, very few start â€“up or small businesses do this, or even think about this, and that is why they find it difficult to attract investors or make money out of thin air.
16. Have A Big Customer Database
Generally, if you are addressing worldwide growth markets, you have the potential to attract a large number of customers. Most small businesses do not have customer information, or their customer information is not in a ready-to-use, accessible form.
The worldâ€™s most valuable businesses know at a minimum who their customers are, where they live and what shopping preferences they have. They have a relationship with these people whereby they are repeat-selling them products or services each month.
If anyone is interested in buying your business once you have set it up and expanded it, this is what they are primarily interested in. This is where the great value is, yet so many small businesses do not do build up such customer databases.
That is why they remain small.
17. Have Great Marketing
I see advertising and marketing campaigns on a daily basis, and see thousands of dollars being totally wasted due to their ineffectiveness and misalignment.
If you want to take a simple idea and expand it into an extraordinarily successful business, creating enormous wealth for you and your shareholders/partners, you need to make sure you have great marketing going on all the time. This is one of the big limiting factors that stops many small and start-up businesses from reaching their full money making potential: a lack of great marketing skill and knowledge in their business.
Marketing is the machine that drives your business. Good products can fail, yet second-rate products can monopolise a market. Why? The power of marketing.
Good marketing brings people to your door â€“ people who are happy to part with their money in exchange for your products or services. Marketing is the key function that can quickly make or break any business. And because of this power of marketing, it is too important to overlook or delegate â€“ itâ€™s something you have to understand for yourself.
The reason great marketing will give you a sustainable competitive advantage is that if it is executed well, it is yet another thing that your competitors cannot just copy. Not many people realize this.
Unfortunately, much marketing is wasted and youâ€™re probably paying for the mistakes of so-called marketing experts right now, by under-utilising this important part of your business. Badly managed marketing is the single biggest waste of money you will ever experience, and one of the single biggest frustrations and causes of failure.
Most of us continue to accept less-than-acceptable rates of return on our marketing dollars. Or we throw up our hands at its effectiveness and stop using it at all. That is the most fatal of all business mistakes!
Let me give you an example of what I mean.
Two advertisements costing exactly the same amount can pull a hugely different number of customers and hence generate hugely different profits. A simple difference in one ad can make tens of thousands of dollars of difference a day, a week or a month to your business â€“ depending of course on your business. And thatâ€™s only looking at one part of your marketing strategy. Marketing that is used well is so rare, yet so powerful!
What impact does this advantage have on your business? Simply put, you can be five, ten, fifty times more successful than your competitors just through effective marketing. Isnâ€™t that where youâ€™d want to be?
18. Anticipate Customersâ€™ Needs
Have you ever walked into a great hotel or other business and everything you need seems to have been anticipated, as if someone had read your mind?
â€˜Iâ€™ll have a shower when I got to the roomâ€¦â€™ and thereâ€™s the bathrobe all laid out. â€˜I think Iâ€™ll wash my hairâ€¦â€™ and thereâ€™s the hairdryer. â€˜I think Iâ€™ll dry my hairâ€¦â€™ and thereâ€™s the hairdryer. â€˜I think Iâ€™ll have a beerâ€¦â€™ and there in the fridge is your favourite brand.
I know it doesnâ€™t happen often, however I am sure you have had this experience at least once. Think back and I bet you this was a great brand, or a fast-emerging one.
The worldâ€™s most valuable businesses make a habit of doing this. You see, itâ€™s not that hard really. Just listen to your customers and you will discover there are patterns in their behavior. By understanding those patterns you know what a customer is likely to do or want next.
All you have to do is build this into your systems and it will appear as if you have anticipated their needs. The best companies do this, the worst do not. No matter how big or small you currently are, this works.
For example, someone contemplating buying a Harley-Davidson motorbike is thinking about cruising down the highway with the wind in their hair. This person is not thinking about things like insurance, helmets, gloves, jackets, bike locks, alarms, satellite tracking systems, maintenance, cleaning and so on, which they will need.
But you should know (anticipate) all or some of these needs almost immediately. So why not put systems in place to offer, sell and service the purchaser with these? It does not have to be difficult to do. McDonaldâ€™s do this by simply asking, â€˜Would you like some fries with that?â€™ So can you.
This is guaranteed to add thousands or millions of dollars to the value of your business, and your customers will be grateful to you for looking after their needs. Sounds obvious, yet it still does not happen in nine out of ten businesses.
19. Always Add Value To Customersâ€™ Experience
If you want to add value to your customersâ€™ experience, why not throw in a couple of things as an added bonus to them for shopping with you?
The new Harley-Davidson owner would probably love the fact that you offer them a free cleaning service (because you know itâ€™s not cool to be seen driving anything but a shining, well-kept Harley, and this is quite a laborious outcome to achieve). So invest in a high-pressure steam-cleaning unit, and every Sunday employ a student to give your customers a free clean for their new pride and joy. This wonâ€™t cost you much at all, and yes, youâ€™ve guessed it, every week they return to your store and you have the opportunity to offer them something new they have not bought yet.
This is the reason why, when staying in a five-star hotel, you get free shampoo, conditioner, bubble bath and bath salts, and if youâ€™ve forgotten your toothbrush or toothpaste, socks or stockings, they will â€˜send it right upâ€™.
Itâ€™s all about adding little things to the customer experience that donâ€™t cost a lot, yet make a big impression.
20. Educate Before They Sell
You might recall I covered the fact that low-value companies hard sell. This is because they have no other choice if they are going to make a sale.
High-value companies donâ€™t have to. They have the advantage of owning unique products with large market opportunities and take the high road in sales. That is, they do not sell at all, but choose to educate their customers before they buy.
Why go to the time and trouble of doing this? By educating before you sell (or your customer chooses to buy), you are creating a very important bond with your customer, and that bond is the start of a relationship between the customer and you, and more importantly with your brand.
Fundamental human nature and society is based on building relationships, and in business this needs to be fundamental to your strategy. John C. Maxwell summed it up when he said, â€˜Never underestimate the power of relationships on peopleâ€™s lives.â€™ This is great business advice.
Similarly, in Ernest Hemingwayâ€™s story â€˜The Capital of the Worldâ€™s a teenage boy named Paco squabbles with his father and runs away from home. Subsequently the father goes on a long and fruitless search for the boy. Finally, he places an advert in a Madrid newspaper that reads, â€˜Paco, meet me in front of the newspaper office tomorrow at noon. All is forgiven. I love you.â€™ The next day, when the father arrives at the newspaper office, he finds 800 men named Paco, all eager to mend a broken relationship.
People yearn to have honest, trusting relationships. This is so rare today at any level, and companies that work hard to develop these sorts of relationships with their customers will be well rewarded in the long term, with loyalty and very valuable brands.
This relationship-building process begins with â€˜edu-marketingâ€™ â€“ educating the customer to buy your product.
It is essential you do this. If you do, your customers will buy from you because you have taken the time to educate them and started a unique relationship that they perceive as trustworthy.
Very few companies take this approach, yet those that do build enormous value into their business.
The above habits are not just a random list of â€˜niceâ€™ things that have been plucked out of nowhere. These habits are indeed what makes the businesses that practice them so valuable and tradeable, what makes the owners of these businesses successful and helps make money out of thin air.
It is these habits that others will pay a premium for when buying or buying into a business. Indeed, this is what investors look for in making their investment decisions. And if you have taken an idea from nothing, and created a business with these habits, you would have created a very valuable asset and successfully made money out of thin air.
This is a great book by all standard, and I very much gladly recommend it to you.
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