What We Can Learn From Facebook’s Success

In 2003, Mark Zuckerberg was an undergraduate at Harvard University looking to start the next great internet company. Like many successful entrepreneurs, he had a unique vision: to enhance communication, openness, and sharing around the globe. Even before Facebook, Zuckerberg had founded several web enterprises, including an online version of the board game “Risk” and a music player called Synapse that attempted to learn about the listener’s musical preferences (much like Pandora). Neither of these projects generated serious momentum or financial potential, but Zuckerberg was undeterred. He began looking for the next groundbreaking idea…and thus, Facebook was born.

In the last five years, no company has grown faster or had more impact on our daily lives. From its beginnings as a side project created in a Harvard dorm room, Facebook has evolved into an iconic web platform with more than 500 million users and a billion dollars in revenue. It has even been the subject of a book and an upcoming movie. There’s no doubt that Facebook is here to stay, and has permanently changed the way we use the internet. With that in mind, here are a few things we can learn from Facebook’s success.

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Motivate Yourself with the “Just For Today” Technique

Having big goals for ourselves is important. Unless we think big, we’re never going to develop the skills and the personal brand needed to earn the money we want.

The problem is that big goals can often be overwhelming – whether it’s changing a behavior, learning a new skill, earning more money on the side, or starting a new career. It’s easy to get bogged down by the number of obstacles you face along the way.

Several years ago, I found myself getting into meaningless fights with my friends, family, and girlfriend. These fights wasted a lot of time and energy and strained my relationship with my loved ones.

I knew that it was a serious problem but I didn’t know how to change. I felt pretty depressed and went to talk to a close friend about how to deal with the issue.

“It’s simple Vik,” he said. “The problem is that you’re thinking too big right now and it’s getting you down. The best way to fight this is to take small steps. Here’s an experiment you should try – it’s called the “Just For Today” technique. Focus on one thing you’d like to do differently just for today that will help you change your behavior. This success will give you the boost in confidence you need to keep working towards your goals.”

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Six Steps To Making More Money With A Killer Sales Funnel

First off, a big welcome to readers from Smart Passive Income!

A few weeks ago, I got a call from a good friend. He had recently started a marketing agency and was struggling to get clients. "I don't really understand," he said. "I'm having a lot of trouble getting leads, and when I do get them I always ask for the sale but I never end up closing. What am I doing wrong?"

When you're selling a high-end good, you can't just ask for a sale right away. Instead, you need to lure the customer in, bring them in slowly and steadily, using a marketing technique called a "sales funnel." Here are the six major steps to increasing your sales through a killer sales funnel:

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Brand “You” – How to Develop Your Personal Brand

Every year, BusinessWeek and InterBrand collaborate on a survey of the Top 100 Most Valuable Brands in the world. As expected, big companies like Google, IBM, Microsoft, McDonalds, and Coca-Coca routinely top the list. What astonished me was the total estimated value of these brands: $2,000,000,000,000.

That’s two trillion dollars

And that’s just the value of the brands. That number doesn’t account for the infrastructure, the people, and everything else that makes up the business. Two trillion dollars of value contained in a few trademarks and logos. How can that be?

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How An Immigrant Tennis Instructor Built A Business Empire

In the mid 1970s, a young tennis player named Julian Krinsky moved to the United States from his home in South Africa. After a brief run at being a professional player, Krinsky had gotten his CPA and got a job as an accountant in Philadelphia

To make extra money, Krinsky started giving private tennis lessons on a part-time basis. Word spread, and soon, Krinsky had more than enough students to allow him to coach full-time.

Sensing a business opportunity, Krinsky started to expand. He rented out courts and dorm rooms, and started launching summer camps full-time. The tennis camps were a goldmine. Hundreds of students enrolled, and Krinsky was able to make a small fortune in fees, even after paying all of his expenses.

At this point, Julian Krinsky could have sat back and counted his money. But he knew that if he worked a little harder, he could make even more. He realized that there was big demand for his unique brand of fun, interactive summer camps. So he decided to start programs in other sports. Soon, he had camps for baseball, basketball, soccer, and football. He even launched a series of summer programs around arts, sciences, and businesses.

Today, more than 4,000 kids each year attend Krinsky's summer programs. What had started as a side project had evolved into a thriving, profitable business.

But Krinsky didn't stop there.

Once he had made some money, he realized that he needed to diversify. With his background in property management, real estate investing was a very natural fit.

Krinsky started by buying a single foreclosed property. He fixed it up, rented it out, and started collecting checks.

A few months later, he did the same thing again. And again. And again.

Today, Krinsky owns more than 100 properties in the Philadelphia area. 

Several years ago, I had the privilege of seeing Julian Krinsky speak at a conference. I had been impressed, and had scribbled down some of my thoughts in my notebook.

A few weeks back, I was cleaning out my shelves when I found the old notebook. Suddenly, it all came back to me. Julian Krinsky had mentioned three basic principles that had helped him succeed. 


2) Build Scalable Systems

Krinsky quickly realized that he needed to hire and retain people if he wanted to grow his business. But it wasn't just about bringing people on board. He also needed to create a business infrastructure that would maximize productivity.


The Difference between Passion and Drive

My friend Lisa is a professional musician. She practices and performs more than 60 hours a week, all for very little money. She is a very intelligent person who could probably have a much more secure job, but in her own words she “loves what she does.”

I have another friend, Maggie, who is a corporate attorney. Like Lisa, Maggie works long hours in the office. She doesn’t particularly enjoy her work (although she is very good at it), and she is rewarded with a large paycheck every two weeks. When I asked her why she decided to be a lawyer, she answered that “it was the safe thing to do.”

What is interesting to me is that both my friends are motivated to work hard and excel at their careers, yet their sources of motivation stem from two completely different forces: passion and drive.

A lot of people confuse passion with drive. After all, they both seem to accomplish the same end result – the motivation to succeed. But there is a key difference, described by Randy Komisar in his classic book “The Monk and the Riddle.”

Passion and Drive are not the same at all. Passion pulls you towards something you can’t resist. Drive pushes you towards something you feel compelled or obligated to do. If you know nothing about yourself, you can’t tell the difference.”

Well said, Randy. Passion is addictive; it flows through us naturally and pulls us towards something that we desire. Lisa’s passion was the joy of creating music. Everything else – the lifestyle, the performances, the long hours, was driven by this singular passion.

Drive is different – it is about outside expectations. Perhaps society wants you to do something (like go to graduate school or take a secure job). Maggie doesn’t particularly like her career as an attorney, but the stability and respect she commands from her friends and family is a tremendous motivation.

Is passion better than drive? I think so, for one simple reason: your memories. Passions tend to evoke positive memories and experiences – things that you actually want to remember, as opposed to the things you did because you felt you had to. When you look back on things, you’ll have fewer regrets.

So take a moment to define your passions. What is that pull that you can’t resist?

How To Define Your Value in Business: The Four Pillars


It’s a word we throw around a lot in business. In any job interview, in any negotiation, the central question is always “how is this deal going to add value to me?”

But what exactly is value?  Is it just about immediate financial results, or does it include intangibles as well? What are those intangibles and how do you measure their impact?

The truth is that there are no magic formulas. However, there are four pillars that can help provide a framework for how to think about value. All four pillars are important to business, relationships, and life; the trick is to figure out who’s providing what and how to maximize your own contribution.

The four pillars are Sales, Operations, Innovation, and Branding

The first pillar is Sales. Unfortunately, the word “Sales” often has a very negative connotation in the business world – it conjures up images of sleazy brokers and realtors who are only looking after their own interests. I agree that there are many unscrupulous salespeople in this world. But the truth is that sales makes the world go around, and most of the time, it actually results in a win-win solution. A truly good salesperson finds a deal that benefits all the parties involved, thus creating value.

Good sales practices aren’t limited to the workforce. Couples can “sell” each other on ways to improve the relationship. Good salesmanship is about creating value for everyone – this kind of deal creation is the lifeblood that builds sustainable businesses and relationships.

Next up we have operations. Operations are about figuring out ways to add efficiencies to a situation. In businesses this usually means cutting costs while maintaining all aspects of quality. There are many ways to accomplish this – training people to improve customer service, cutting out the middlemen, and changing the way people get paid to increase productivity.

Like sales, good operational practices aren’t just limited to the business world. Couples can use these techniques to divide up household chores and other responsibilities. The trick is to figure out what each person is best at, and thus improve efficiency and reduce the overall time. For example, my mom enjoys cooking and is excellent at it (while my dad is less talented). So my dad focuses his time on setting up the table and doing the dishes, letting my mom concentrate on her strengths. This way, they both contribute while maximizing productivity.

The third pillar, innovation, focuses on all things new – new technologies, new products, new markets. Things evolve, and one great way to provide value is to drive that evolution. If you are a creative or engineering type, this may be a great opportunity for you.

The fourth and final pillar is branding. Brands are all about trust. Google, Starbucks, and Coca-Coca are successful because people trust the quality of the products. This is why Starbucks can charge $4.00 for a coffee drink – people know exactly what they are getting and they’ll pay an exorbitant premium for that trusted brand.

But brands aren’t just limited to corporations. As I mentioned in a previous post, each person is now an individual brand. Cultivating your own brand by building other people’s trust is the best way to increase your own value and ultimately, your earning power.

Now that we’ve talked the four pillars, it’s time for the sixty-four thousand dollar question: where can YOU add the most value? Please share in the comments.

Three Great Tips to Save Time…Starting Now

Ahhhhh….too much to do, not enough time!

How often have you said this to yourself in the last year? It’s true: our time is our most valuable asset, and there’s never enough of it to go around. More time = More money. With that in mind, here are three tips to help you save more time for the things that really matter most:

Tip #1: Set Up An Information Firewall

We all suffer from information overload. Every day we’re bombarded with new messages from clients, co-workers, family members, and friends…not to mention the constant news updates and social media distractions. The key is to keep out the information that you don’t really need by setting up an information firewall. Here are a few steps to get you started:

  • Do not take calls from people you don’t know. If you see a phone number that you don’t recognize, don’t pick up. Let it go to voicemail and check it once a day. Another great option is Simulscribe (which sends you text e-mails of all your voicemails so you don’t have to listen through each one).
  • Set designated times for e-mail. This is straight out of the Four Hour Work Week, and I can’t tell you how much time it’s saved me. I used to click the refresh button on my inbox at least a dozen times a day. Now, I limit myself to checking e-mail no more than once every few hours. It’s amazing how much more I can focus on actual work.
  • Set agendas for all meetings and calls. Before each meeting, take time to find out what each person wants to learn. Then, use this information to clearly define an agenda for the meeting. If you don’t do this, people will just ramble on endlessly.
  • Set priorities: find out who matters most to you (family members, close friends, high-profit customers), and devote most of your available time accordingly. Do NOT get sucked into long conversations and commitments with people who don’t really matter to you. Take time to define the few things that will make a major positive impact on your life.
  • Take time away from the digital world. Unplug your internet for a few hours a day. Go for a walk without your cellphone. We’re all so dependent on constant information that we often get distracted from actually getting things done.

But regardless of how much information we filter out, there’s still way too much for us to get done. How do we prioritize?

A few months ago, I had a realization. I was quite overwhelmed; my “To-Do” list just kept getting longer and longer and I never had time to get everything done. That’s when I decided to try something new: a “stop doing” list.

Tip #2: The “Stop Doing” List

A “stop doing” list is exactly what it sounds like: a list of things that you want to stop doing. With our busy lives, it’s really easy to get caught up in the things we need done. Often we forget about the things that we need to stop doing and the bad habits we need to fix. Lifehacker has a great quote about how to identify the problem:

“take a hard look at how you spend your day and try to identify where your giant black holes of time are. Too many coffee breaks? Too much time spent surfing productivity sites (though we’ll give you a free pass on that)? Once you figure out where your time sinks are, write yourself a do-not-do list so you minimize how much time you spend doing things that aren’t particularly productive.”

Some people believe that staying busy is the key to success. That is not true; the secret is to stay busy with the right set of activities. If you put all your effort into low-reward situations, you’ll end up getting nowhere.

This is where the “stop doing” list can help. You can use it to figure out the high effort, low reward activities that you’d be better off avoiding. It also helps adding a sentence or two reminding you of the benefits of stopping this particular activity.

Here’ s an example of my “Stop Doing” List from a few years ago:

1)      Stop my trivial web surfing. Eliminate constantly checking www.nba.com for game highlights while I’m trying to do work.

2)      Eliminate long chat sessions with my friends that don’t serve a purpose. Get to the point quickly; don’t get distracted by idle conversation.

3)      Stop eating out so often. It is expensive, time consuming, and usually bad for my health.

Now I have a confession: I actually haven’t fully stopped doing any of these activities. I still surf the web, chat with my friends, and eat out. It’s really challenging to eliminate any bad behavior one hundred percent. The process of adaptation was very slow. But it’s been worth it: over the last few years, I’ve saved a lot of time, energy, and money by dramatically reducing each activity on my stop-doing list.

Tip #3: Saying No – Even When It Hurts!

The best instant time saver I know of is to say no. People have a hard time doing this even when it is the obvious response. They are afraid they may offend someone, they may be hedging their bets, or they may simply not want to make a decision at that particular moment.”

-  Mark McCormack, founder of IMG and author of “What They Don’t Teach You At Harvard Business School”

It’s true. It really isn’t easy to say no, but it really is often the best policy.

One of my friends works in sales at a major software company. He was working to close a major deal with a potential client. What he didn’t know was that the potential client really had no interest in the software but wasn’t comfortable with just saying no. Instead, the client kept rescheduling meetings and delaying any decisions. Finally, several months later, the client told my friend that they weren’t interested.

My friend was very upset. He felt he had been misled. The worst part was that it was a lose-lose situation – everyone had wasted a lot of valuable time. If the client had just said no upfront, both parties could have moved on to more productive things.

But what about the other person’s feelings? Won’t it hurt them?

I’m not going to lie. There’s a good chance that saying no can hurt someone’s feelings in the short term. No one likes to feel rejected. Back in high school, I had a crush on this really popular girl. It took me months to build up my courage to ask her out, and I was pretty bummed when she turned me down. But honestly, it would have been much worse if she’d said yes but not actually been interested. Eventually, the relationship would have fallen apart and I would have been even more hurt. Hearing the upfront “no” was tough, but helped me move on with my life.

Another thing: it’s important to say no, but that doesn’t mean you have to be a jerk about it. The girl who turned me down was really nice to me. After I’d gotten over her, we actually ended up becoming friends. It is possible to reject someone and still cultivate a positive relationship.

What are some techniques you’ve used to save time? Please share in the comments

I’d Do It, But…

“I’d do it, but….”

How many times have you said these four words before? I personally say them all the time – way more often than I should. When we say things like this, we’re setting up psychological barriers. We want to accomplish or change something in our lives, but are having trouble putting in the effort. So instead, we come up with excuses on why we can’t achieve our goal.

“I’d ask her out, but I don’t think she’ll say yes”

I’ve personally said this all too many times, and I’ve always regretted it later. You never know until you try. Sure, I’ve been shot down a lot, but putting my heart on the line also helped me get into a truly rewarding relationship. The times that I regret most are the times that I never even tried.

“I want to learn about personal finance, but I’m afraid to ask my friends because they’ll think I’m stupid.”

Never feel afraid to learn. It is impossible to know everything, and most people will be impressed that you are making an effort. And if they don’t, who cares what they think? Seriously – your personal education and ability to make good decisions are far more important than how other people view you.

“I’d go exercise, but I really need a new pair of gym shoes.”

Don’t go out and buy the shoes right away. If you go for this kind of instant gratification, you’ll just end up coming up with some other excuse. The shoes will sit in your closet unused and you’ll have wasted a bunch of money on nothing. Instead, use the shoes as a reward for achieving a goal. For example, if you run five times a week for a month, you’ll buy the shoes for yourself. This will motivate you to start exercising right away.

And of course…

“I’d like to earn more money, but I don’t know how…”

For starters, keep reading this blog =)

But seriously, if you want to earn more money, you shouldn’t stop constraints like time or lack of capital get in the way. There is always a solution, it’s just up to you to find it. Here are a few ideas to help you start taking action:

1. Take responsibility:

The word “but” is an excuse, a way to avoid owning up to something. Instead, take responsibility for your goals and come up with a solution. Otherwise you’ll just end up procrastinating all of your tough choices.

2. See the end goal:

Understanding the end result allows us to focus on the positives. When we make excuses, we’re usually focusing on the negative aspects of anything. So take a moment to understand the reason you are working so hard. If you really want it, you’ll feel a strong boost in your motivation.

There’s a chance you’ll realize that you don’t really care that much about the end goal. This can be a scary realization but it’s actually a good thing. You shouldn’t be putting a ton of effort into something that doesn’t matter to you; that’s a surefire recipe for getting sucked into a black hole. Instead, cut your losses and focus your energies on something more worthwhile.

3. Make yourself accountable:

Find other people who can “spot” you when you start making excuses. It’s one thing to let yourself down, but it’s a lot harder to rationalize when you feel you are letting down others. I used this trick when I was trying to get in shape. Instead of just working out by myself, I’d set a schedule with friends. This way, if I didn’t go, they’d know that I wasn’t following up on my commitment.

A final thought: This is an excerpt from a poem by Shel Silverstein. It definitely got me over my "buts" and I hope it does the same for you!

"All the Woulda-Coulda-Shouldas
Layin' in the sun,
Talkin' bout the things
They woulda-coulda-shoulda done…
But those Woulda-Coulda-Shouldas
…All ran away and hid
From one little did."

What are some of the tricks that you use to overcome excuses? Please share in the comments section

How Sunk Costs Can Leave Us Broke And Miserable

A few weeks ago, I was planning on going to a rock concert with a few of my friends. One of my favorite bands was playing and I bought the tickets more than six months in advance. I was really excited…until I got a fever the day of the show.

At first, I was angry. I couldn’t believe my bad luck. I’d been waiting to see this band for more than a year! Plus, I’d already paid for the tickets and it was too late to sell them online. The only way to “recoup my losses” was to go to the concert, no matter how miserable I was feeling.

I decided to call my friends and tell them that I was still in. A few hours later, my buddy drove by to pick me up. Even though I was on the verge of collapse, I stubbornly stuck to my decision.

When we got to the concert, I was miserable. For three hours, I stood in a loud, crowded outdoor venue with thousands of enthusiastic fans. I couldn’t wait to get home. The worst part was that I actually made myself even sicker by standing outside in the cold air for so long. Overall, it was a terrible evening.

Over the next few days, I lay in bed thinking about how I had convinced myself to make such a terrible decision.

Here’s the thing: no matter what I chose to do, there was no way I was getting my money back. The tickets were a sunk cost. Therefore, the money I’d already spent shouldn’t affect my future decisions. It didn’t make sense for me to go to the concert if I wasn’t going to have fun. Instead, the best decision was to stay home and rest.

A sunk cost is basically just a rabbit hole. We wander down it for awhile, hoping that something will come out if it. A few hours later, we figure, hey, we’ve come this far, we might as well keep on going…and thus we dig ourselves even deeper into the ground.

It amazes me how much power a sunk cost can have on our decisions. I spent years studying decisions and was fully aware of the problem; but my knowledge didn’t stop me from making the wrong choice.

Sunk costs are especially dangerous when they affect our business judgment. My friend was recently buying a new car. The sticker price was more than he was willing to pay, but he felt that over time he could negotiate the price a little lower.

Several hours went by. They haggled back and forth, and my friend eventually realized that the seller wasn’t going to lower his price any further. He was ready to walk away, when he suddenly thought, “well, I’ve already put in this much time, so what if it’s a little more than I’m willing to pay?” He bought the car.

Now, it’s one thing if he was actually happy to buy the car at that price. But a few days later, he found a couple of other cars for sale that he would have liked to buy. The problem was that he had taken the “sunk cost” of his time into his analysis, which ended up clouding his judgment.

So how do you fight the sunk cost bias? The key is really to just be aware of the phenomenon. Understand that you’re not getting back the time and money you’ve already put in. Your decisions going forward should always be independent of what you’ve done to that point.

Have you ever made a bad decision because of a sunk cost? What was the result?