Whenever I'm trying to make a certain amount of money, I draw a variation of this table -
1 x 1,000,000
10 x 100,000
100 x 10,000
1,000 x 1,000
10,000 x 100
100,000 x 10
1,000,000 x 1
Where's the easiest place to hit on the chart? Depends on your skills, your industry, lots of things. But you start noticing interesting trends.
I reckon the $10,000 and $100,000 part of the spectrum is the one most overlooked today... five $100,000 contracts is $500,000.
But again, depends on your skills. A million sales of $1 apps isn't so crazy either.
The chart works more accurately when doing net profit than gross profit, but of course, net profit is harder to figure out upfront. Doesn't include taxes, so if you want to keep the money you've got to figure that too.
But overall, I like drawing those tables and thinking this way. Here's a few ways to make $30,000 for instance -
1 x $30,000
3 x $10,000
6 x $5,000
10 x $3,000
100 x $300
1,000 x $30
10,000 x $3
30,000 x $1
Play around with it. It's a lot of fun.
Clever way to think. I like it.
It reminds me of this Yglecias piece- basically arguing that there's a growing sweet spot for getting rich marketing financial products to the wealthy, for various reasons.
After all, suppose you want to get rich. You’re going to need to think of something that can get you a very high sales number. That means either you need to sell something relatively cheap to a large number of people, or else you need to sell something very expensive to a small number of people. Clearly, both business models have always existed and always will exist. But it’s generally difficult to think of entrepreneurs who became super-wealthy selling luxury goods. McDonald’s CEO James Skinner made over $17 million in 2009 and I’m guessing Ferran Adria didn’t do as well. That’s because as you get richer, your purchases of stuff don’t rise proportionately with riches. But rich people also don’t just “save” money in the way that middle class people do on a larger scale. They purchase large quantities of financial services. So to the extent that you anticipate income to be increasingly concentrated at the top, it makes more sense to go into selling financial services than into selling non-finance items. The people who get rich with non-financial enterprises (Bill Gates, the Walton family) are all selling to mass markets. Lots of people make a living selling luxury goods to the top 1 percent, but nobody becomes a billionaire that way. Unless they’re selling financial services.
Here's how I use this in the real world. I think there is a lot of opportunity in ebooks. Basically digital pdf's that get passed around in a niche tribe that make you the expert on a particular topic. If your goal was to make $50,000 a year you might do something like this:
1 x $50,000
2 X $25,000
5 X $10,000
10 x $5,000
20 X $2,500
50 X $1,000
100 x $500
200 x $250
400 x $125
50,000 x $1
I think it would be pretty easy to give speeches in the $2,500 range. However, I don't know if I would want to or could give 20 of them. So then you might look at 400 x $125 and think I could probably consult for $125 / hour for 400 hours a year or 10 weeks a year.
What if you consulted for 200 hours and gave 10 speeches? You'd be there.
I. This post outlines Patrick McKenzie - a brilliant technologist and entrepreneur - how he's done such amazing things and learned so much, and why he's getting drastically underpaid and how it's his own fault. This post will be most valuable for technologists who underestimate themselves and undervalue themselves.
II. Hacker News is the best tech community on the internet, and patio11 - Patrick McKenzie - is the best contributor there. I don't even think that's controversial, I think it would be near universally agreed by the HN crowd that Patrick has made as many or more important contributions as anyone.
If you're from Hacker News, you know Patrick already. But for my readers that don't know him, let me give you a quick overview.
III. Patrick is a multi-faceted genius, and I don't throw the word genius around casually.
Patrick McKenzie is many things - he's an expatriate to Japan, he's a talented coder, tester, metrics/split-testing/analytics user, a great writer, extremely modest and helpful. He can recruit people, evaluate talent, and manage people well. He understands ROI very well and is good at purchasing advertising. He's good at customer service. Outsourcing. Automation. Coding. Ecommerce.
I had never gambled before and knew nothing about it, but I'd gotten too many e-mails like it. I was at my parents house for winter break during my first year at UT, and I was bored.
"Free $50 just for downloading our casino!"
Hmm. That doesn't seem very risky. I might as well download to see what it's all about.