Roger James Hamilton's Blog, page 34
May 7, 2014
Alibaba – The Biggest Tech IPO – Worth over $200 Billion
May 5, 2014
How much could you make with $5 and 2 hours? A great story to start your week!
How much could you make with $5 and 2 hours? This is a very cool story from Tina Sellig (executive director of the Stanford Technology Ventures Program) who gave her students this exact question.
The result was an average 4,000% return(!) Here’s what she said happened:
Each of fourteen teams received an envelope with five dollars of “seed funding” and was told they could spend as much time as they wanted planning. However, once they cracked open the envelope, they had two hours to generate as much money as possible. I gave them from Wednesday afternoon until Sunday evening to complete the assignment.
Then, on Sunday evening, each team had to send me one slide describing what they had done, and on Monday afternoon each team had three minutes to present their project to the class.
How did they do this? Here’s a clue: the teams that made the most money didn’t use the five dollars at all. They realized that focusing on the money actually framed the problem way too tightly. They decided to reinterpret the problem more broadly: What can we do to make money if we start with absolutely nothing?
They ramped up their observation skills, tapped into their talents, and unlocked their creativity to identify problems in their midst – problems they might have seen before but had never thought to solve. By unearthing these problems and then working to solve them, the winning teams brought in over $600, and the average return on the five dollar investment was 4,000%!
So what did they do? One group identified a problem common in a lot of college towns—the frustratingly long lines at popular restaurants on Saturday night. The team decided to help those people who didn’t want to wait in line. They paired off and booked reservations at several restaurants.
As the times for their reservations approached, they sold each reservation for up to twenty dollars to customers who were happy to avoid a long wait.
As the evening wore on, they made several interesting observations. First, they realized that the female students were better at selling the reservations than the male students, probably because customers were more comfortable being approached by the young women. They adjusted their plan so that the male students ran around town making reservations at different restaurants while the female students sold those places in line.
They also learned that the entire operation worked best at restaurants that use vibrating pagers to alert customers when their table is ready. Physically swapping pagers made customers feel as though they were receiving something tangible for their money. They were more comfortable handing over their money and pager in exchange for the new pager.
Another team took an even simpler approach. They set up a stand in front of the student union where they offered to measure bicycle tire pressure for free. If the tires needed filling, they added air for one dollar. At first they thought they were taking advantage of their fellow students, who could easily go to a nearby gas station to have their tires filled. But after their first few customers, the students realized that the bicyclists were incredibly grateful. In fact, halfway through the two hour period, the team stopped asking for a specific payment and requested donations instead. Their income soared.
For this team, as well as for the team making restaurant reservations, experimenting along the way paid off. The iterative process, where small changes are made in response to customer feedback, allowed them to optimize their strategy on the fly.
Each of these projects brought in a few hundred dollars, and their fellow classmates were duly impressed. However, the team that generated the greatest profit looked at the resources at their disposal through completely different lenses, and made $650. These students determined that the most valuable asset they had was neither the five dollars nor the two hours.
Instead, their insight was that their most precious resource was their three-minute presentation time on Monday. They decided to sell it to a company that wanted to recruit the students in the class. The team created a three-minute “commercial” for that company and showed it to the students during the time they would have presented what they had done the prior week. This was brilliant. They recognized that they had a fabulously valuable asset—that others didn’t even notice—just waiting to be mined.”
That’s Tina’s story – and I love it – because it’s all about the question “What would I do to deliver value and make money tomorrow if I was starting with nothing? I ask this question every day, and it forces me to look for the opportunities and value I would otherwise miss. What would you do?
Wealth isn’t how much money you have. It’s what you’re left with if you lose all your money.
Story: by Roger James Hamilton
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May 4, 2014
How much could you make with $5 and 2 hours? A great story to start your week!
May 3, 2014
Beware! My Top 3 Modern Myths of Wealth
If you’re looking to work smarter instead of harder in your business, learning always starts with unlearning – what ‘truths’ are you living by which are no longer ‘truths’?Here’s my Top 3 Modern Myths of Wealth about what we need to unlearn to grow our financial success today:
MYTH #1: Wealth Comes from Passive Income
MYTH – You can get wealthy by going into debt to buy assets that will give you passive income so you no longer have to work for a living.
TRUTH – You ’ve just dug a hole, not a rive...
May 2, 2014
Beware! My Top 3 Modern Myths of Wealth
MYTH – You can get wealthy by going into debt to buy assets that will give you passive income so you no longer have to work for a living.
TRUTH – You’ve just dug a hole, not a river! All income needs to be managed, which means you need to know how to manage a team and experts who can manage your portfolio of assets.
Yes, building assets that create cash flow is a critical part of building your wealth. But many people have been burned by stretching their resources to buy property or other assets in the hope that they will yield ongoing passive income, only to see the value of their assets drop, their cash flow go negative, and their credit ratings ruined. Why didn’t this happen to all the wealthiest people? The wealthiest people know all their assets—whether properties or business—need to be managed well. There’s nothing passive about it.
It might look like the apple farmer has “passive income” because his apple trees keep giving him apples, but it still takes time and expertise to nurture those trees. It’s the same with your assets: Choose assets with great care and factor in the true cost of choosing, managing, and selling your assets in your return.
Replace the myth of passive income with the reality of portfolio income, where each of your assets is part of a portfolio managed by a team. Monitor and maintain your portfolio and the return it is giving you.
MYTH #2: Wealth Comes from Multiple Streams of Income
MYTH: The more income streams you can start, the wealthier you will become.
TRUTH: Starting many streams at the same time is like trying to push many balls up a hill at the same time: You may get started, but you end up losing your focus and your time. Success comes from growing teams, not streams: multiple teams of income.
This myth is perhaps the most destructive when you’re starting out – but it’s dangerous at every level or wealth. If everyone around you is unclear what your main focus is—what your position is and where you stand on the field—you will constantly chase the ball instead of having it kicked to you.
What people learn as they step up the wealth ladder is that money doesn’t make money; people make money. Invest in the right people before investing in the assets they will manage or you will be the one doing all the juggling, and it will only be a matter of time before you start dropping the ball.
MYTH #3: Wealth Comes from your Exit Strategy
MYTH: Wealth comes when you sell out: Plan an exit strategy where you can work hard now and earn the money later.
TRUTH: Keep working, because you love what you do. Don ’t strive to bake a pie so you can sell it; own the bakery so you can bake as many pies as you want, sell some, and keep the rest.
I have met too many people who are holding out for an exit that will make it all worth it. They don’t enjoy what they are doing. They have simply talked themselves into grinning and bearing it “until I make X dollars or until I sell the company for X amount.”
Sure, we hear stories of people cashing out with big returns from their businesses or assets, but rarely do these stories involve people not passionate about what they were doing.
Replace the myth of an exit strategy (leaving the game) with a success strategy (staying in the game). The wealthiest people in the world are still doing what they are doing because it doesn’t feel like hard work following your genius and doing what you love. As you move up to the wealth ladder, any exit strategies are not for you; they are for your project partners and investors.
These 3 myths are part of the 5 myths I share in my new book, the Millionaire Master Plan (coming out soon!). Taken together, the five myths are an old-paradigm, mechanical way of thinking about wealth, separating us all into paths where we’re trying to do it all on our own.
The truths are a more natural way in which building assets is replaced by growing flow, where we are all connected to each other and the market. In flow, everything is connected, and your role in nurturing, enhancing, and expanding the flow around you is more important that trying to work out how to make the money and exit the game.
Still skeptical these are 3 myths? Pick up any “Richest People” list and ask yourself for each successful wealth creator on it:
1. Are they passive in their income or are they still showing up each day, playing the game?
2. Are they trying to create multiple streams or do they have multiple teams creating the streams?
3. Are they following an exit strategy or a success strategy?
Your time is your greatest asset. Invest it wisely in the one thing that counts – nurturing a success strategy where what you are doing you would still do, even if you weren’t getting paid for it.
As billionaire investor, Warren Buffett said in a speech to a group of students:
“I may have more money than you, but money doesn ’t make the difference. If there is any difference between you and me, it may simply be that I get up and have a chance to do what I love to do, every day. If you learn anything from me, this is the best advice I can give you. ”
Keep making magic!
Story: by Roger James Hamilton
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Beware! My Top 3 Modern Myths of Wealth
April 24, 2014
Income Inequality – The Wealth Gap
What’s the world’s #1 risk? At the World Economic Forum, country leaders did a poll and their answer: Income Inequality.
The world’s top 1% generated more income than the bottom 50% last year. This isn’t right. But what’s even worse than the problem is how people are explaining the problem (especially leaders, governments and the media).
It’s usually shown as a pie, where the rich have the biggest piece. Income generated isn’t a pie because it isn’t a limited amount. You can earn double without me earning less. We can all earn more, share more, without making others poor by doing so.
Income inequality is more like the gap in a race. If at the start there were two bicycles, and you knew how to ride and I didn’t, I would run and you would ride, and at the end of each day there would be a gap. That’s the wealth gap. The difference in our speed? That’s income inequality. Each year, that bike improves. First to motorbikes, then to super bikes, and finally jet planes. As you kept upgrading your vehicle, and I kept running, the gap would keep getting bigger.
In a race like this, if I want to close the gap, I have two choices. The first is to say the gap is your fault, and you should get out of your vehicle and run like me. The second is to learn to fly.
Our economy works in this way. The richest were riding bikes 100 years ago, with factories and financing. Today, they’ve learned to fly, with global businesses, the internet and technology. So the gap keeps growing. But there are planes for all of us. Any of us can learn to trade products, exchange value, and use our mobile phones and the internet to do it. We have the controls of the jet plane at our finger tips. It’s just we never learnt how to control this vehicle at school. So we just keep running.
Looked at this way, the answer isn’t taxes and making the rich give their money away (many of them are already doing this anyway). If we try and do that, someone else somewhere would still go out and learn to fly that plane, and the gap would remain.
The answer is in educating and empowering ourselves. Because learning to fly isn’t that complex and there’s more support, resources and tools today than ever to help each of us learn. That’s why I’m so passionate about education and entrepreneurship.
I see the people that learn how to build a global business and increase their wealth don’t end up taking wealth from others. In fact, they increase the wealth of those around them as well.
Income and wealth aren’t a zero sum game. The amount of money and value in the world continues to grow at an astounding rate every year.
That trend won’t change. Neither will the trend of robots and technology taking the remaining jobs of those who don’t re-equip themselves.
Let’s close the gap.
But let’s do it by learning how to fly.
Story: by Roger James Hamilton
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April 23, 2014
Income Inequality – The Wealth Gap
Income Inequality – The Wealth Gap
April 14, 2014
$2 billion in 2 years? At 21? Is he just Luckey?
$2 billion in 2 years? At 21? Is he just Luckey?
Actually, yes: Palmer Luckey. Luckey just sold his 18-month-old company, Oculus VR, to Facebook for $2 billion.
If you’re busy growing a business (for longer than 18 months, and you’re older than 21 years old) without $2 billion to show for it – you might ask what’s going on here…
Is the Luck in Luckey’s name more reality than virtual reality? Here’s my take on it: The rapid success Luckey has had IS down to Luck – but the kind of luck we can create. I’ve always seen Luck as the product of four things, and here’s the journey Luckey had through all four:
L.U.C.K = Location, Understanding, Connection & Knowledge
LOCATION
Location is about being at the right place at the right time – where you try and solve a need that you have. Luckey’s need was finding a good pair of virtual reality goggles. He remembers when he was 16, in 2009, “My goal actually wasn’t to make something. It was actually just to buy something – I assumed there must be something out there that was really good that I could use for gaming.”
Luckey took odd jobs to buy all the virtual reality goggles he could find: “I started to collect them and bought a lot of them from government auctions and industry equipment liquidation sites and all kind of fun places. I took them apart, looked at how they worked, tried to learn what do they do right, what do they do wrong… and over time it became clear that the only way to make something that was really good would be to throw out the design book that everyone else had used and start from scratch.”
Like a lucky footballer knowing that luck starts when you get on the football pitch, Luckey decided to get on the pitch and play the game…
UNDERSTANDING
It’s one thing to get on the pitch. Another to kick the ball. It takes understanding to know where the flow is and where to kick it. Luckey had heard of Kickstarter and, at 19 years old decided to use crowdfunding to test his idea.
As he recalls, “My plan was to do a Kickstarter for about 100 of these things… I figured it would be a really cool thing to have a couple of VR nerds toying around with.” He posted a video and fundraising campaign for a prototype on Kickstarter in August 2012 to raise $250,000. By September, he had raised $2,437,429…
It was time to get serious, quit journalism college, and start a company…
CONNECTIONS
You can get on the pitch and kick the ball, but you can’t win a game until you have a team to kick with. Luckey regularly posted in online forums with other Virtual Reality enthusiasts. It’s where he collected his team:
“I actually started the forum called ModRetro. It’s an electronics enthusiast community that focuses on modifying vintage game consoles. I started that site when I was 15. ModRetro was actually founded by myself and one of the people that currently works as an engineer at Oculus. So we’ve stuck together.”
Luckey got a big name supporter in a similar way. Game Developer, John Carmack (who’s behind games like Quake and Doom) met Luckey through these forums. As Luckey remembers, “He started posting because of his own virtual reality project… But he ended up seeing my head-mounted display work and asked me, ‘Hey – is there any chance I could buy one?’ He’s John Carmack! I just gave him one instead – you can’t turn him down.”
That led to Carmack demoing Luckey’s headset with a version of Doom 3 at the big E3 Electronics show in 2012. From there, interest took off and Luckey attracted a team and further funding. Today Carmack is CTO of Oculus VR.
KNOWLEDGE
Being on the pitch, kicking the ball and having the team to win with still doesn’t mean you’re going to win – Especially not at the $2 billion level. But when you build your knowledge and know how to play and the stakes you are playing for, things can rapidly multiply.
With the exponential growth in data flow online, it’s only a matter of time before the entire Internet becomes an immersive, intelligent, virtual 3D experience. The visionary companies with the deep pockets, like Google and Facebook, are already positioning for this. Luckey’s early start with virtual reality, with rave reviews of his prototype at recent shows, has made him an attractive buy.
Just 18 months after his Kickstarter campaign and before a working retail version of his VR goggles has even been launched, Mark Zuckerberg this week bought his company for $2 billion.
How can you grow your L.U.C.K. today, by investing more of your own time in growing your location, understanding, connections and knowledge?
That was Luckey’s success. He didn’t have any head start over you or me.
As he says, “My dad was a car salesman, my mum was a stay-at-home mum. I was home-schooled for a long time. I’m a pretty regular Joe.”
He even sees his spectacular journey as being equally unspectacular: “There’s no Facebook-style story… No tales of parties and crazy stuff going on that was really a highlight. It was just kind of a slow plod towards making this thing a reality.” And that’s how success becomes a reality.
Or, in his case, a virtual reality.
