Earn More Money by Becoming More Interesting

One of the best ways to increase your earning power is to become more interesting as a person. This is because interesting people are generally more exciting to be around. This allows them to expand their network, build their personal brand, and more effectively sell products and services.

So how do you become more interesting? Here are some tips:

Admit You Were Wrong: The world is filled with people who are obsessed with being correct all the time. If you have the courage to admit that you were wrong, you’ll definitely be remembered. Better yet, people will view you as someone who’s willing to step back and admit his or her mistakes, which is always a positive personality trait.

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What Is Your “F%&* You” Number?

A few weeks ago, I was having dinner with a good buddy of mine who's also in the process of starting a business. Like most dedicated entrepreneurs, he's working night and day to make this a reality, investing lots of time and money in the process.

Now, I know from personal experience that entrepreneurship isn't easy. It's tough to keep yourself motivated. So I asked him what he did to push himself along when things got tough.

My friend looked me straight in the eye, and said:

"My goal is to make five million dollars. If I had that much money, I'd just invest it, sit back, and say "F#$% you" to anyone who tried to tell me what to do."

I thought this was hilarious at the time. But later that night, I started thinking about the conversation. I realized that I wasn't that different. Like my friend (and many other people), I desperately seek complete financial independence.

That's when the idea of a "F$%# You" number hit me. This is that magic figure, the dollar amount at which we'll be comfortable living with for the rest of our lives.

Building up your earning power is tough. It's easy to lose motivation and start questioning ourselves. "Why do I really need to make that much money. Can't I learn to just live with less?"

Sure, you can. But remember, having more money isn't necessarily about buying more stuff. To me, the value of money is the freedom it can bring.

Once you have financial security, you are free to pursue your own passions. This may be starting another company or earning more money, but it can also include charitable work, hobbies, and spending time with your loved ones.

Essentially, the money is giving you the ability to say "F^%# you" to doing things that you really don't want to do. Because of the money, you don't have to.

When I think of  money, I don't think about material goods. Instead, I see it as a gateway to a dream, a more ideal lifestyle.

Someday, I hope to open a small recording studio in San Francisco. I want to work with talented artists to record, produce, and commercialize their music for millions of people to hear.

I want to come home and spend the evenings with my family, not hunched over a computer trying to make some numbers add up. I want to go hiking on the weekends, and exercise every day.

And I don't want money to get in the way.

What is your "F#$^ You" number? What would you do with it?

Three Ways You Can Make $5,000 Per Hour (or more!)

$5,000 per hour.

It sounds crazy. Almost too good to be true, really. But when you think about it, there are actually a lot of people earning this much.

Here’s the secret: it’s not like they are actually billing clients at $5,000 per hour. Instead, they are using their time in a way that yields huge payoffs at some point in the future. Eventually, the cash starts piling up, and their “relative income” goes through the roof.

Here are the three things you can do to increase your income…if not to $5,000, then certainly to higher than where it is right now:

1. Build (And Own) Something Of Value

This is clearly the best and most common way to make a lot of money. Almost every super-rich person (from Bill Gates at Microsoft to Sam Walton with Wal-Mart) has made their money by building a large, profitable business.

Of course, you don’t need to build an empire to increase your income. For every billionaire, there are thousands of millionaires who do the same thing on a smaller scale. One businessman I met makes millions of dollars every year by shipping equipment supplies to miners in the Sierra Mountains. He purchases the supplies at a discounted bulk rate and provides a service that allows him to sell them at a much higher price. He has a trusted relationship with his buyers and has outsourced most of the actual work, so his time commitment is low. But he keeps the majority of the profits because he is the owner.

2. Earn Some Big Commissions

Being a middleman isn’t as profitable as owning your own lucrative business, but the good news is that you take a lot less risk. After all, you’re just taking a commission from a sale. You don’t have to put any of your own money into something that might go under in the future.

This is how investment bankers make all of their money. They find large corporations that want to acquire smaller companies. Then, they negotiate a transaction and take a nice chunk of the final sale price. When you’re selling a billion dollar company, even a small percentage can add up to tens of millions of dollars.

Now, I know that you can’t just start conducting billion dollar transactions overnight. Instead, a more immediate way to boost your hourly rate is to become a passive middleman.

Here’s an example: one guy I know recently bought an outsourcing company based in the Phillippines, where he pays people between $8-$11 per hour to do data entry and basic accounting tasks. He then charges companies in the states $30+ per hour to do the same work for him. All he has to do is negotiate the initial contracts, and then he just keeps collecting checks every month.

3. Become An Authority

In 1985, Robert Kiyosaki was living out of his car. Through a bad series of investments, he had ended up completely broke and was a step away from being out on the street.

Today, Kiyosaki is a best-selling author who has turned his “Rich Dad, Poor Dad,” books into an iconic brand, complete with seminars and a lucrative line of information products.

A pretty impressive turnaround in 25 years, so how did he do it?

In the late 1980s, Kiyosaki realized that things needed to change. He started investing more wisely and soon had amassed a sizable real estate portfolio. In 2000, he wrote the bestselling Rich Dad, Poor Dad, which focused on his upbringing in Hawaii and the many mistakes he had made over his career. His rags-to-riches story had lots of appeal and quickly established Kiyosaki as an authority on personal finance and investing.

Most of the information in the book is common sense, but it has more weight coming from Kiyosaki. This is the power of being an authority.

Have you managed to increase your income using these techniques? Please share in the comments.

Make More Money By Creating Awesome Viral Content

Viral content is powerful stuff. If you have an army of people promoting your offering, you don’t have to spend nearly as much money on marketing. You get free awareness, which in turn boosts your profit margin.

But creating viral content isn’t easy. After all, there’s so much good quality material available, so your content is bound to get lost if you don’t make it stand out somehow. Here are four steps you can take to increase the viral potential of your content.

Step 1: Have a Killer Headline

I simply can’t overemphasize the importance of this. The headline is the first impression that people have of your product. Sure, you need great content later on, but none of it matters if people don’t click through.

Headings are especially important in the context of social media. When someone “retweets” or “likes” your content, their social network will only see the headline. They are far more likely to click through if they see something interesting. Here are three ways you can make your headline stand out:

Say something new or controversial: A very common mistake is for headlines to contain common information. For example, a headline like “why you should eat better” isn’t particularly unique or new information…everyone already knows this! Instead, if you challenge someone’s beliefs, you’re more likely to elicit a response. (example)

Offer something that they won’t find anywhere else: Words like “secret” or “keys to success” or “unlocking” makes it sound like you’re describing a unique and valuable process, rather than just listing a few facts. This makes the reader much more curious and gives them the desire to learn more.

Ask a Question: When people see a question as a headline, they’ll assume that the post will provide them with the answer. If they are interested in this answer, they are much more likely to click through. Simple idea, great results.

Looking for inspiration? Here’s a resource featuring 100 of the greatest headlines of all time.For more information and examples of killer headlines, check out my free guide to article marketing (just sign up below).

Step 2: Capture Their Attention Within The First 30 Seconds

It is trivially easy for someone to leave a website. There’s a reason that most people stay for less than thirty seconds on any one page. Therefore, you need to give them some compelling value within the first few seconds of their experience. This can be anything from a great introduction to a blog post, to a cool infographic, to compelling ad copy, to a powerful video. The point is that you need to reel in your users from the first minute or they’ll move on with their lives. Here are a few ideas to grab your user’s attention quickly:

Ask a question that you plan to answer later: I mentioned this in the last section as well, but it really does help. Of course, the question needs to be relevant to the topic at hand, but it creates some suspense that helps the user stick around.

List some key points: Summarizing the few major points behind your value proposition will give readers an idea of what they should expect if they choose not to leave.

Use teasers: People want to know what they’re going to get out of using your product or service. A statement like “stick around to find out how you can save $1,000 per year on your mortgage” encourages people to do exactly that. This buys you some time to more thoroughly market your product or service.

Step 3: Add Value All The Way Through

By now, you have the reader’s attention. The next step is to keep demonstrating value so that they will trust you even more.

Add a personal touch: Most people want to understand how they will benefit from something. They don’t care about theories and concepts unless they stand to gain from learning them. Try to emphasize how your product, service, or content will help benefit their lives and/or their family.

Give specific examples: Case studies are a great way of illustrating a complex idea. Walk people through a real-life scenario and they’ll be much more likely to buy into your ideas. Whenever possible, cite cases or research studies that back up your statements.

Include Testimonials: Nothing works better than having someone else say that you or your product is awesome. An authentic testimonial will go a long way towards getting people to talk about you in a positive way.

Keep things simple: Most visitors are only going to remember one to two things from any piece of content. Identify what you want them to remember and focus on drilling these points home.

This brings us to…

Step 4: The Call To Action

This is the final step: asking people to do something that provides you with value. It can be anything from buying a product, to getting an e-mail address, to sharing content via social media. If you’ve done everything right up to this point, you’ll have a good chance of getting your visitors to help you out. Here are a few ways you can ask your visitors to take action:

Summarize Your Key Points: Remind people of your value proposition and emphasize the main things you want them to remember. This makes it much more likely that they’ll buy something, or, at minimum, talk about your product with others.

Encourage Discussion: Many people are interested in giving feedback or would like to ask a question, but they aren’t sure how to do it (do I fill out a form, call a phone number, etc). Give them a clear way to do this and you’ll get more leads than you can handle.

Provide A Time-Sensitive Offer: People are much more likely to act if they think that there’s a limited window of opportunity. You want to draw them in while you can; if they leave your site without doing something, it’s very unlikely that they’ll come back. They’re also more likely to tell their friends to act fast on the opportunity.

A final thought…

At the end of the day, just put the best stuff out that you can. Be authentic, and show some patience. With a little luck and a consistent effort, you'll be on your way to building the audience you've always dreamed about.

Why Reflection is Important

Several weeks ago I met up with a close friend for coffee. My friend is a hyper-competitive person; she works in the finance industry and puts in a lot of hours every week. We started talking about the concept of time for reflection and immediately got into an argument.

My friend claimed that reflecting on things was “not a good use of time because just thinking about life isn’t going to solve anything. Instead, you should be focused on solving your problems and achieving your goals.”

If you’ve read my blog at all, you’ll know that I strongly disagree with this. I’ve always been a fairly reflective person. Reflection usually helps me take steps forward. I didn’t understand how reflection got in the way of problem-solving and goal-setting.

But as I started talking to more people, I realized that my friend wasn’t alone in feeling this way. Many people seem to think that reflection and introspection to be a waste of time.

This bothered me. I knew that reflection was important, but I hadn’t taken the time to analyze why. So I thought it would be helpful to write out all the ways that reflection has helped me.

Avoid repeat mistakes:

A few years ago, I tried to start a company with a close friend. We were both very enthusiastic about the concept and I was excited to work with him.

A few months in, I realized that I’d made a huge mistake. My friend was a great guy, but we just didn’t work well together. The project ended up going nowhere and we moved on to other things.

A year later, my friend called me with a new idea. He was wildly enthusiastic and really wanted me to be a part of the new venture. Against my better judgment, I agreed. Unfortunately, our inability to work well together resulted in another failure.

We all mess up sometime. The important thing is that we don’t fall into the pattern of repeating our mistakes. But how will we know what we’ve done wrong unless we take some time to think about it? Had I reflected for a little while, I could have avoided making another bad decision.

Come up with new ideas:

We’re all so bombarded with information that it often goes in one ear and out the other. Reflection gives you time to make sense of everything going on in your life and develop new ideas on how to approach it.

My first job ever was at a large investment bank. When I started, I had no idea how to manage my time. I constantly felt overwhelmed and didn't know what to do.

I decided to get away for a weekend in order to gather my thoughts. I packed up my gear and camped out in the woods for a weekend. While there, I realized that there were actually a few simple problems that were causing most of my stresses. I just needed to organize my e-mails, prioritize my tasks, and follow up on certain issues.

It wasn't rocket science, but it took some reflection to realized what I needed to change.

Figure out what matters:

Back in college, I was having coffee with a good friend who was having trouble defining what was important in his life. He felt pulled in many directions – his parents wanted him to go into business and his professors wanted him to be a scientist. He also had some desire to explore a professional career in music. He was genuinely interested in many things and felt overwhelmed by the choices in front of him.

I told him that I didn’t have an answer. The best way for him to find out was to reflect. Take time away from everything and just think. He took my advice and ended up realizing that what mattered to him was enjoying his work and making a substantial impact.

When he thought about it this way, a career in scientific research made the most sense. Today, he is a graduate student in neuroscience at a prestigious university and overall, is very happy with his decision.

We’re constantly being pulled in all directions. With all the external pressures, it is easy to over-commit. Taking time to figure out what matters can help us sort out our priorities and goals from the black holes that we want to avoid.

Providing perspective:

It’s easy to get down on ourselves. We are always struggling for things and sometimes the fight can get exhausting. Taking time to think about ourselves in the context of others often helps me put things in perspective. Thinking about this calms me down; things could be better, but they could also be a lot worse.

In April of 2009, I lost my job in banking, and was pretty down for a few weeks. I didn't really have a clear plan about what I was going to do. But after I reflected awhile, I realized that my situation wasn't actually that bad. I had some money in the bank, and a good education, and no matter what happened, I knew that I'd eventually get back on my feet.

This restored my confidence and gave me the energy I needed to push myself forward. Within a few months, I had already started making money as an entrepreneur, and was on a great trajectory.

How has reflection helped you develop as a person?

How To Reinvent Yourself

Rewind to the end of 2000. Vice President Al Gore had just lost the closest Presidential race in history. Afterwards, he reportedly went into a state of depression. The struggle for him was “what now?” After all, when you’ve gotten so close to something so big, what else is there to do? It was really the ultimate identity crisis.

Many people thought he would run again in 2004 – “Al Gore isn’t a quitter” they said. As it turned out “quitting” on the presidency might have been the most personally rewarding decision he ever made.

Gore soon took a faculty position at Columbia University. He grew out a beard, taught a few classes, and generally seemed relaxed and happier in media interviews than he had been during the grueling Presidential Election.

He spent his time testing the waters in a wide variety of interests and potential projects. In late 2002, he announced he wouldn’t run for President in 2004, choosing instead to focus on his increased interest in the environment.

Once Gore had figured out his post-White House passion, he used his considerable media pull to maximize environmental awareness. In 2006, Gore released a documentary – “An Inconvenient Truth” – about the environment, which ultimately won him an Academy Award – and in 2007, Gore was awarded the Nobel Peace Prize for his environmental efforts.

It’s never easy to reinvent yourself – especially if you have spent your entire life doing one thing – but Al Gore figured it out. It would have been easy for him to just retire; instead, he chose to adapt to the new realities of his life – and ended up making a big impact.

Whether you agree with him or not, we can all learn something from this. Being able to adapt and thrive will put in an amazing position to reinvent yourself, build your personal brand, and ultimately make the kind of money you deserve.

Have you ever reinvented yourself? Please share and discuss in the comments below.

Why “Good Enough” Isn’t Good Enough

One night back in high school, I was working on a rough draft of a paper. I had been working on this paper for awhile and was sick and tired of hammering away. How much longer did this need to go on? I read it over, thought that it was “good enough,” and headed to bed.

A week later, my teacher asked me to stay after class. “Vik,” she said, “What happened here? This was far from your best work. I know that it was only a rough draft, but I know you could have done much better.”

I had a good relationship with this teacher and I decided to be honest. “Well, I really just thought it was good enough for the time being…I just figured I’d fix it up later.”

She looked at me. “Vik, there’s something you should know. When you think something is good enough, it probably isn’t. Chances are that you can really make it better. Saying ‘good enough’ is simply a way for you to justify it…to make it seem ok when you don’t feel like putting your best foot forward.”

I was a little taken aback at first. My teenage instincts kicked in. After all, I’d always done well in the class, so why was she picking on me?

But the more I thought it, the more I realized that she was absolutely right. I could have done much better, and I was just making excuses. Moreover, I had lost a huge opportunity to get feedback on my work so far, which would prevent my final paper from being as good as it could be.

Since then, I’ve noticed that all wealthy individuals strive to be something beyond “good enough.” They aim to excel; to be the best in the world at whatever they do. Sure, they might not make it, but that desire to push beyond minimum standards is what has made them the big successes that they are.

A living example of this is Tony Hsieh, the founder and CEO of Zappos.com. In the 1990s, Hsieh was another bright-eyed Harvard graduate who wanted to change the world. A few years out of school, he founded his first company, an ad network called LinkExchange.

The company grew rapidly during the dot-com boom, and in 1998, Microsoft bought LinkExchange for $265 million.

All of a sudden, Hsieh was a 20-something multimillionaire. He never had to work another day in his life. It would have been easy to just retire on a beach somewhere.

But to Hsieh, that simply wasn't good enough.

A few years later, Hsieh took over as CEO of Zappos, an ailing online shoe retailer. Over the next several years, Hsieh built one of the most positive, productive company cultures of any company in the world. Zappos was routinely listed in publications as one of the best places to world. In 2009, Amazon bought Zappos for one billion dollars.

But Hsieh still wasn't done. Last year, he published Delivering Happiness, an instant bestseller that focused on his entrepreneurial journey, and the lessons he learnt along the way. Unlike many millionaire authors, Hsieh actually wrote the book himself, making it a personal statement that would inspire millions of people to pursue positive impact.

I had the privilege of seeing Hsieh speak a few months ago at a private event. Even with all his success, he still carries himself with the utmost humility, and acknowledges that there were many factors that account for his success.

It's because he knows that no matter what he does, it will never be "good enough."

And that's what drives him to succeed.

Have you ever felt that something was "good enough?" How did you overcome the feeling?

How Regular Guys Make Millions By Dating Supermodels

Mystery. Ross Jeffries. Neil Strauss. David DeAngelo.

Are any of these names familiar? If so, you’ve probably read The Game.

The Game is a book by Neil Strauss about pick-up artists, a group of men who claim to have “learnt the art of seducing any woman.”

The guys featured in the book are ordinary in every way. They aren’t particularly attractive, rich, or famous. And yet, they manage to date the most astonishing group of women: supermodels, actresses, you name it.

So how did they do it? I have no idea!  I read the book, and I’m still single.

What’s more interesting to me is how they leveraged their “secrets” into a lucrative business.

Take David DeAngelo (who's real name is actually Eben Pagan). DeAngelo is the founder of a program called “Double Your Dating.” If you visit the website, you’ll see a whole host of information products – ebooks, DVDs, and even seminars and workshops.

I have no idea if this will actually help you "double your dating." But one thing's for sure: there's definitely a huge market for it. Take a look at the traffic that Double Your Dating receives each month (image from Compete.com)

Clearly, DeAngelo has managed to build a large following, and from what I hear, he’s making a ton of money.

I decided to study DeAngelo's site to see exactly what he was doing right. I walked through his entire sales funnel, including signing up for his free e-mail newsletter. Eventually, I began to see exactly why he was able to get so many sales. Here are a few key messages that help DeAngelo generate massive sales numbers:

- Anyone Can Do It: This is the single most important message. DeAngelo makes it clear from the start that dating amazing women isn't just a privilege for a small number of guys. He emphasizes that when he started, he was just an ordinary guy who was struggling in the dating world. With his techniques, anyone will be able to replicate his success. This is a powerful message that casts a net over an extremely wide market.

- Practice What You Preach: DeAngelo isn't just a theorist. He has put all of his techniques into action, and repeatedly mentions this in the form of case studies and examples. He walks his students step-by-step through each technique, and explains exactly why it works the way it works. This gives him a massive boost in credibility.

- Friendly Sales Copy: DeAngelo makes a point of ending all of his e-mails and webpages with the phrase "your friend, David D." This friendly tone does a good job of convincing the reader that DeAngelo is really interested in helping them meet women, and not just out to make a quick buck. The e-mails are also very personal: they often discuss DeAngelo's struggles early on, and ask questions like "has this ever happened to you?" forcing the reader to think about past failures that he would like to avoid.

- Broad Product Offerings: Although David DeAngelo focuses on dating success, he offers a wide variety of specific products that cater to particular needs and interests. He breaks down his products into three broad categories: dating essentials (which are the "must haves"), inner game programs (which focus on how to develop confidence), and technique programs (which focus on actual pick-up situations). DeAngelo offers more than $1,000 worth of products in total, which allows him to upsell effectively and maximize the lifetime value of a customer.

- Money Back Guarantee: I've talked about this before, and it really does work. By offering a money-back guarantee, DeAngelo takes the risk away from the buyer. He is effectively saying that the buyer can't lose. Sure, he's going to get some refunds, but he'll also boost sales dramatically.

A final thought: Lots of people think that customizing your message to your audience is everything. Don't get me wrong – this is really important – but what's even more crucial is following these few key principals. Good sales copy and broad product offerings, combined with powerful psychological messaging, is going to move merchandising…no matter what niche you are in.

As proof, just take a look at Ramit Sethi's Earn1k sales tactics and observe the similarities.

What other examples have you seen of effective messaging? Please share in the comments.

Don’t Let Your Ego Get in the Way

The year was 1979. Phil Jackson was working as an assistant coach for the New Jersey Nets basketball franchise. In one game, the head coach was ejected and Jackson was asked to take over. The Nets were one point ahead going into the final seconds and had possession of the ball. Jackson called a time-out to outline the final play.

Before Jackson had a chance to speak, John Lee Williamson, the star player of the Nets, said “You’re going to go with ‘the man,’ right?”

“The Man” he was referring to was obviously himself. Phil Jackson was upset about his arrogance, and instead decided to go with Eric Money.

As play resumed, Eric Money caught the ball and moved it up the court for the final shot. Suddenly, the ball was stolen and a last-minute lay-up turned a Nets victory into a loss.

After the game, Williamson walked past Phil saying, “Told you that you should have gone with ‘The Man.’”

Jackson was angry at first, but later on he realized that he was actually to blame. Williamson may have been arrogant, but that didn’t mean that he wasn’t an amazing clutch shooter. Jackson had let his ego get in the way and cost his team a crucial victory. In his autobiography, Sacred Hoops, Jackson talks about this incident and how he uses the memory to keep his ego in check.

Phil Jackson eventually evolved into the greatest NBA coach of all time. In the last two decades, he’s won ten NBA championships with two different teams. Like all successful coaches, he’s very intense, driven, and hard working. But what really sets him apart is ability to make objective decisions. In his mind, the team always comes first – above individual players and certainly above his personal ego.

After reading this story, I realized that I had work to do in this area as well. Here are a few of my biggest takeaways:

Take time to reflect: We lead busy lives and we often get caught up in the heat of the moment. It’s often hard to make effective decisions. This is why I try to take a few minutes for reflection at the end of each day.

Control Your Emotions: I’ve said before that emotions are a part of life, but they shouldn’t have an impact on critical decisions. It’s amazing how a few deep breaths and a few seconds of relaxation can clear our heads.

Stay Focused: Remember that you have a goal. How you feel in the moment is just another distraction. If you constantly react to your emotions, you'll never be able to focus on your actual objectives.

Has your ego ever gotten in the way of making a good decision?

How the Mighty Have Fallen

Great businesses aren’t easy to build, but what’s often harder to sustain their greatness over time.

The same is true for our incomes. Perhaps you’re lucky enough to have built some nice streams of cash flow. At this point, many people would sit back, relax, and let the money roll in, when in fact they should actually be on the lookout for the next big threat. With that much money at stake, you’re bound to face a lot of competition.

In his most recent book, Jim Collins talks about how mighty companies have fallen…and what we can learn from it. Specifically, he emphasizes the importance of staying flexible. Keep on your toes and be willing to adapt. Here are some stories of companies that fell apart due to their unwillingness to change with the times…and how an up-and-coming firm took advantage of the opportunity.

The Great Atlantic and Pacific Tea Company:

Sixty years ago, the Great Atlantic and Pacific Tea Company (commonly known as A&P) was one of the largest and most profitable companies in the United States. At the height of its power, A&P was the largest retail organization in the world, with a large network of local grocery stores all over the country.

For several decades, the “local store” business model had served A&P well. Americans had suffered through a depression and two world wars, and were perfectly content with having a few low-cost choices.

But in the 1950s, things started changing. All of a sudden, Americans had more money to spend. The old culture of frugality was out. Americans wanted more than just a few varieties of food in their local store; instead, they wanted a place where they could buy everything from food supplements to toothpaste to peanut butter. In essence, they wanted a “mega-store” to cater to their increased consumption.

A&P realized that things were changing. They decided to test the waters by opening up a new store called the Golden Key. The Golden Key was a separate brand that allowed A&P to experiment with new ideas: they gave store managers more freedom to choose a wide variety of products and move towards a “one stop shop” business model.

The result: increased customer satisfaction. Clearly, A&P’s experiment had given them the data they needed to reinvent their business. All they had to do was execute.

But A&P refused to adapt, even though they knew that their old business model was dying. They closed the Golden Key and instead tried to compete on price. This led to profit margins declining even further, which crippled the company’s ability to grow.

Meanwhile, competitors like Kroger’s department stores were embracing the new “superstore” business model. Like A&P, Kroger had conducted a number of experiments to discover these new consumer preferences. But unlike A&P, Kroger actually had the courage to take action. They systematically eliminated or changed every single store that didn’t fit into the business model of the future.

Kroger's willingness to adapt paid spectacular dividends – for 25 years, Kroger’s stock performed at ten times that of the market. Meanwhile, A&P kept limping along, and its stock price declined for several decades. Even today, the company is unprofitable.

Failure to Adapt: The Story of Poloroid Corporation

Remember Poloroids? Those little cameras that would magically print out a picture for you right after you took it?

In 1937, a chemistry student at Harvard named Edwin Land was researching an emerging technology called polarization. Through this research, he found that polarization could be used to instantly develop photographs; instead of having to wait for a few days, people could get their photos right away. He quickly realized that this would revolutionize the photograph industry and dropped out of school to start Poloroid Corporation.

Poloroid’s “instant cameras” were a huge success. People loved getting their pictures right away. For the next several decades, Poloroid Corporation was one of the largest electronics retailers in the United States. The company just kept growing and growing…until the digital age.

All of a sudden, people were able to take pictures electronically. They could instantly see how the picture had turned out, and could easily share them with their friends and family via e-mail. Why would you need instant pictures if you could see them immediately and print them at your leisure? Plus, users wouldn’t have to spend money on expensive camera film. Digital photos were clearly the future, and Poloroid had the resources and trusted brand to become a major player in this emerging market.

But they refused to adapt. They ignored the new technologies and continued churning out their classic cameras. Throughout the nineties, Poloroid kept losing market share, until finally in 2001, they were forced to declare bankruptcy. Even through bankruptcy, Poloroid kept manufacturing and selling their outdated products. It was only in 2008 that they finally decided to completely shut down this obsolete line of business.

The Story of Commodore Computers

The year was 1985. The personal computer was rapidly become a lucrative new business. Companies like Apple, IBM, and Atari Computer were making big moves to become major players. It was an exciting time for anyone in technology. But even though they were growing, Apple and IBM were running scared – all because of a wildly profitable company called Commodore Computers.

Commodore originally started out as a calculator manufacturer. In the early 1980s, they released the Commodore 64, which quickly became a huge hit. Between 1983 and 1986, the Commodore 64 sold more than two million units every year – somewhere between thirty to forty percent of the total market. The company seemed like an unstoppable force.

Ten years later, Commodore declared bankruptcy.

What happened? Commodore’s early success was in producing a computer that everyone could afford. What they failed to realize was that as technology advanced, computers would become more affordable in general. The old “low-quality, low-price” business model was dying. The other thing was that the market for software was on the rise – everything from word processing programs to video games. PC companies needed to work with software companies to make sure their new machines were compatible with the most popular software applications.

But Commodore refused to adapt. They figured that their technology and business model were so strong that nothing could ever threaten them. They refused to forge partnerships and market their products to new customers. As a result, they started losing market share to Apple and IBM.

By the early 1990s, no one was using the outdated Commodore machines. Pretty soon, the company was bleeding money. In 1994, they finally decided to throw in the towel. It’s sad that for all of their huge contributions to the industry, Commodore computers is nothing but a footnote in the history of the personal computer.

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