Among all the business starting books I have read, this one is by far the best and most practical one. The author, Michael Masterson, has had lots of experience doing this. And the best part is that he’s not a natural salesman by training. He had to learn it by doing. This gives me hope …

Masteron goes through roughly the various stages of business and presented the strategies for each stage:
Stage 1 (0~ $1M revenue): Sales job is #1. Sell your first product first. Don’t worry about company name, logo, or legal identity. Get the 1st sales and then find and fine-tune your unique selling proposition (USP). Imitate your competitor including where to place ads. Produce me-too product. Give your customer better or perceived-better product (Fedex vs. 7-up). Stage 1 entrepreneur must acquire Critical Mass of Qualified Customers (CMQC) as the primary task. Use of the “train” analogy – it takes energy and time to move a stationary train toward the city of gold. Once it’s moving, the momentum may carry itself.

Stage 2 ($1M ~ $10M): Add more product lines. Front end vs. back end: Front end to acquire customers, Back end to make profits. The key to profit is evolution not revolution – 80% old and 20% new is a good mix. Back-end sale represent goodwill that people are willing to buy continuously
Ordinary vs. tipping point products (1:9 ratio): ordinary products brings the profits. Creating tipping point products takes collaboration and good timing. The author borrowed a lot of the ideas from “Tipping Point” by Malcolm Gladwell and applied it to real-life situations.

Stage 3 ($10M~50M):
Innovation and speed are the two critical methods to take the company to the next level. For innovation, adopt “accelerated failures” and “ready, fire and aim.” To carry out the action, find a champion, who can get the idea realized, must believe in the idea, have the authority to execute, have the experience to make wise decisions along the way. It’s better to postpone if a champion cannot be found.

About getting mentored: 1) Ask for mentor around you (up, down, around), 2) Show appreciation – reciprocate, 3) Take responsibility for your own actions.

The objective of business is to serve your customers – not making you or your employee rich. If you can serve your customers, the money will follow.

On brainstorming: create marketing copy within 24 hrs and set a limit on time, set a goal and high standard, code of equality (everyone pitches in), set rules, no specific criticism of idea (how to make it better not what’s wrong with it), record the meeting. Have a culture of creativity.

A “ready, fire, aim” business proposal (must be finished within 24 hrs to keep momentum going) consists of 1-4 pages, ballpark financial projection including costs, identification of critical tasks, project champion and support people, timeline for the major tasks to be completed, and a plan ‘B’ (like CNN).

Project improvement: “If the product is not selling well, don’t fix it” It’s much smarter to drop it and come up with a significantly different product. If the product sell well, improve it.

Why people buy? To feel good and to solve a problem. Why Binge spending? 1) Feel good that they have more money to spend, 2) to feel good about buying, 3) sold by the specific marketing program.

The 20 marketing lessons are impressive. They should be in the MBA marketing textbook. The 7 myths are good, one of them being that employees must own a part of company.

Hire Intrapreneurs (vs. Entrepreneur) to take your company to the next level. Intrapreneurs may not want to start his/her own business but is innovative enough to keep the company crank out tipping point new products.

Ready, Fire, and Aim way of leading your life. Get started on your dream and don’t worry about failure or trying to perfect it. Author’s short film career is an example.

I utterly enjoyed this book. I listened to the audio book three times. And each time I got something more. I suppose I will read it soon. The wonderful effect of this book that it makes starting a business sound easy enough that you’d want to go out and start a company right away. Maybe I will …

This book consists of many wise quotes from Warren Buffet, the sage of Omaha. He practiced these principles that turned him into one of the richest (2nd) person in the world.

Warren practice buy and hold strategy. He would pick a stock and assume the stock market is going to be closed for 5 to 10 years. If it can pass this simple test, in other words, the business model is simple and predictable for the next 5 to 10 years, and the business is fairly priced like Disney, Coca Cola, Wrigley, and others, he would buy them at a fair price and hold them for ever (almost). “The business should be so simple that even a fool can run it because soon or later a fool will.” “Wall Street makes its money on activity. You make money on inactivity.”

You need to understand the business model of the company before you buy. Of course, by this standard, many of the technology companies, especially the Web 2.0 companies, would not cut it. The technology companies rely too much on the IP and knowledge of the workers and the business models are easily duplicatable if you can manage grabbing the talents from the market leaders.

Pick the right manager/CEO/owner with good integrity, and leave him/her alone to run the business. This may sound like a leap of faith, but it’s true that a few of the big companies (e.g. Enron, Tyco, and etc.) of the 90’s did not have the integrity and ended up driving the companies to the ground. Integrity is ingrained and not learned. “You can’t make a good deal with a bad person.” “In looking for someone to hire, you look for three things: integrity, intelligence, and energy. But the most important is integrity, because if they don’t have that the other qualities, intelligence and energy, are going to kill you.” “It takes 20 years to build a reputation, and 5 minutes to lose it. If you think about that, you will do things differently.”

The advise to the young people to work for companies with good business fundamental instead of the most up-and-coming is a sound advise. There are some technology companies that no longer hold the the competitive advantages, thus the good business fundamental to warrant consideration by the young employment seeker. A lot of times, I wonder if Sun Microsystems, Inc. has fallen into the same categories; its Sparc-system and Solaris no longer hold the monopoly in the internet age as it used to. Linux and x86 architecture have changed all that.

Warren makes a lot of decisions himself. Contrary to common belief, he doesn’t consult others. Of course, he has lots of practices and he keeps things simple enough that it’s hard to make the wrong decision. But I wonder if Warren Buffet’s investment method can continue to thrive like before. Currently, Yorkshire Hathaway is sitting on many billions of cash waiting to be deployed/invested. Many of the businesses these days have so many dimensions to them with the introduction of Internet. Newspaper, once a profitable and “simple” business, is on a rapid decline thanks to Internet. Things used to be simple is now more complicated. By his standard, no one should invest in technology companies like Apple, Microsoft, Yahoo, and Google and they would forgo a huge amount of profit. Will his investment method stand the test of time or his method is simply a set of trading rules good for just 50 years or so. Time will tell.