• Alex Hormozi On Finding A Profitable Market

    The content that follows was derived from a video by Alex Hormozi. It’s another holdover from a now defunct website I had. I have mixed opinions of Alex Hormozi, if only because some of the life advice he gives is wildly incomplete and is yet presented with bravado…par for the course when you’re building a brand/cult of personality on the internet, I guess. So I should probably just say I have mixed feelings about advice on the internet (duh); I know the real-life Hormozi would let more subtlety in the room.

    Anyway, the advice below is simple, but simple things are often the most important, especially for “wantrepreneurs” sniffing out ideas.

    I do recommend Alex’s book, by the way.


    When starting a business and selling a product or service, how do you know you have a good market?

    That is, what are the things you should be looking for to know you have a market worth going after?

    The First Rule Of Thumb

    As a rule of thumb, you should ask yourself: as long as a given market is not dying, and is stable or growing, then where can you provide the most value given your skill set?

    If you have experience working with people within a specific marketplace, or have some inherent advantage there – especially by way of first-hand, personal experience – go after that market first, because you know the pains people/companies in that market have, and you will ultimately create a better product that will provide more value.

    But – as might be the case if you’re reading this guide – many people have no experience in any market.

    So, then, here are the four things that you should look for which deciding upon a market to target.


    The Four Things To Look For In A Market

    1. Pain

    Is the market in pain?

    That is, does the market have a desperate need for your product or service? A “nice to have” is not something that people are going to take their money out for and buy, especially in a bad economic environment.

    Some things are timeless. Health, wealth, and relationships are the timeless needs of humanity. Are people sad and lonely (relationships)? Are people broke (wealth)? Are they feeling bad about how they look, and are they unhealthy (health)? These are three big areas of pain.

    When looking at a potential market, should ask: is there key pain that you are solving?

    2. Growth

    Is the market growing? This one is pretty simple.

    A newspaper company isn’t going to be doing well when the market for newspapers is shrinking.

    You want the market you enter to be growing.

    3. Easy to Find

    Are your prospects easy to find?

    If you’re marketing your product and cannot find your prospective customers to begin with, then you’re not going to be able to sell your product or service.

    For example, if you’re marketing to plastic surgeons and the only people seeing your ads are nurses, then you’re not even going to be able to present your offer to plastic surgeons, let alone sell anything to them.

    When picking a market, you want to find one that you can target easily, that has associations/groups/channels that people in the market congregate around. This way you can cast your line there, and then hook clients.

    If you can’t find your customers and clients, they’ll never find you.

    4. Purchasing Power

    Do your potential customers have the money to spend?

    In order to be successful in a market, your potential customers need to have purchasing power, plain and simple.

    As an example of where there might not be purchasing power: if you’re going after unemployed people to coach them on how to compose their resumes presents a growing market with a lot of pain, and the customers are super easy to find, but these people probably won’t want to buy your stuff, because they don’t have jobs.


    An Example Of This Framework In Use

    Let’s take a quick look at how this four-part framework for a profitable market looks when applied.

    Let’s say you are a relationship coach – you serve couples, and you’re good at helping people find love. You want to find a market that has all four of the attributes above. This means that instead of saying you’re going to help say, college kids find love, you would probably after seniors in their second half of life who would like to find their next partner.

    Senior citizens looking for their next partner check the boxes of our framework.

    1. Seniors have tons of pain because they’re alone.
    2. Senior citizens present a growing market because people are dying and getting older every day.
    3. Senior citizens are easy to find.
    4. And senior citizens in general have far more money to spend than say, college students.

    So, even though you have the same core value proposition when going after senior citizens as opposed to college kids, you’re choosing to serve a market that will probably make you much more money.


    Recap!

    When looking for a market, ask which market, above all else, you can provide the most value to. If you have personal experience in a market, that’s going to trump all else.

    If you don’t have personal experience in a market and just have a skill (of being able to market or sell, for example), then look at your market in terms of the four attributes covered above.

    You cannot have only three of the four attributes above. If you’re missing one, it kills the framework.

    You can find a market that has tons of pain, purchasing power, and that’s easy to find, but that means little if the market is shrinking every year.

    In the example of going after unemployed people as a market: they were growing as a market, in pain, easy to find, but didn’t have the purchasing power.

    If you have a product for plastic surgeons but cannot find them and target them with ads, you won’t do well.

    If your product is simply “nice to have” but people don’t truly need it, then not enough of them are going to buy it.

    You want to make sure that your market has all four of the covered attributes. And ideally, you pick a market that you already know you can provide value to, and solve a problem within that meets all of the four criteria.

  • Jay Hoovy’s Clever Outreach Strategies

    A short post I had written up for a now defunct website. Just some fun little strategies I came across while watching a video by Jay Hoovy. I tend to stay off of the Big4–MBB-PE-BSchool-to-Startup-Pipeline-Wunderkind side of YouTube, if only because it stings on account of my life getting absolutely mangled and not even asymptotically approaching that path let alone pulling onto it…but, you know, I dabble…or the algorithm gets me once in a while. These might actually be useful if you’re in PE, an entrepreneur looking for ways to “surprise and delight,” or someone who can otherwise afford to step outside the bounds of networking and cold-calling proper.

    Hungry For Deal-Flow

    Jay Hoovy is a startup founder who did stints in investment banking and private equity.

    As a hungry junior associate in private equity, he was eager to source a deal. He would fill his morning drives with exhaustive cold-calling, and on one occasion even showed up to a company’s headquarters – a on a whim, and after being certified in the software produced by the company – and secured a meeting after his firm had failed to do so for over a decade.

    In a video about his private equity “war stories,” Jay shares a couple of creative, fun strategies for outreach that he used while taking as many shots as possible in contacting companies.

    Here they are.

    1. Papa John’s, But Brand It

    One strategy Jay used was finding the Papa John’s that was local to a given company, ordering a pizza to the company under the CEO’s name, but ordering a pepperoni pizza, requesting that the pepperoni was arranged so as to form the letters/initials of the private equity firm he worked for.

    He would then send an e-mail to the company saying something like, “hope you enjoyed the pizza – would love to take you out for one in person some time.” This got him a number of good leads.

    Might just send a pizza with my name on it your way…

    2. Venmo A Founder/CEO Your “Two-Cents”

    Jay would find the Venmo account for a founder or CEO of a company and send them $0.02 with a message along the lines of, “Hey [person’s name]! Would love to share my two cents on your business and how we might be able to help grow it!”

    Using Creative Approaches To Outreach

    Clearly, these strategies aren’t exclusive to private equity. We live in a terribly noisy world, with all kinds of people competing for attention. If there’s someone you want to get in touch with, try to get a little creative, or to put it another way, “surprise and delight.” You never know how far a thoughtful gesture can go.

  • Errolson Hugh On Asymmetric Design

    These notes were derived from a video featuring a presentation by and interview with Errolson Hugh. You can find this video, produced by Race Service as part of their RS Night School series, here.

    Errolson Hugh is the co-founder of Acronym, an innovative clothing brand and design agency. Acronym’s garments are highly sought after, and focus on functionality, quality, and cutting-edge materials. As a company, Acronym takes an unorthodox approach, resisting norms of both industry and consumption, and does so successfully.

    Hugh offers his framework for asymmetric design, used by his company to great effect. This framework arguably applies to any setting wherein there are inequalities between competitors.

    Asymmetric Design: A Primer

    Asymmetric design is a term Errolson uses to refer to asymmetry in a competitive situation. It concerns a smaller, irregular force fighting a larger, regular force, as can be the case in a given industry, e.g. the fashion/garment industry in which Acronym operates.

    When you trying to break new ground in an industry, it is not a fair fight; the playing field is not level. Entrenched systems exist, and incumbents don’t want anything to do with new ideas because the status quo is what is profitable for them. If a competitor begins to win, they begin to lose, and so it’s in their best interest to prevent said competitor’s progress.

    Asymmetric design as Errolson and his team at Acronym see it is a toolset to balance out some of these inequalities.

    “Very simply, when you’re in a competitive situation and you’re fighting against an opponent that’s larger than you are [even if you have equal skill], you have to be smarter, faster, meaner. There’s absolutely no other way around it.”

    Acronym took ideas from active sportswear, military, and industrial clothing and sought to apply the technologies to garments meant for everyday, civilian use. This was a radical idea when Acronym was founded, and was greeted by much skepticism. Errolson says that while Acronym started in good faith, they had no idea how difficult it was actually going to be. They quickly realized “the hard way” that it is necessary to go outside the system as-is.

    Asymmetric design is a way to go outside of the system, and is designed to work when you’re not in a fair fight.

    First Win, Then Fight

    “First win, then fight,” is Errolson’s four-word, simplified summation of the book The Art of War by Sun Tsu.

    The book, “…tells you to forget the usual notions you have about conflicts”, i.e. that in a conflict you have two opponents and you slug it out. Instead, the idea is defeat the opponent before you even fight. In the best case, you don’t fight at all.

    In asymmetric design, the idea is to start by finding the unfair advantage. Battles should also be chosen carefully. Ultimately, “if you can’t win, don’t play.”

    The Enemy’s Sword Is Also Your Sword

    This concept concerns two things:

    1. Efficiency
    2. Mastery

    Efficiency

    It is impossible to find an unfair advantage, and thereby be efficient in your strategy if you don’t know your enemy. Only by knowing your enemy can you really understand how to defeat them.

    A necessary pre-condition for efficiency is mastery. You can deduce everything about your competitor via mastery.  A competitor’s ethos, business structure, and design methodology are encoded (in the case of apparel design) into the garment. A person who has mastery in apparel design can take a jacket off of a shelf and understand how the competitor arrived at that product, and figure out what their own advantages are over that competitor, what it is that the competitor can and cannot do.

    Acronym is concerned with “the meta-narrative, which is all of the things that went into the making of the story”. These things are visible in the product, too. Acronym is also concerned with post-market narrative: when a customer comes back with a garment that has worn down from use, requesting that it be repaired, they will sometimes simply try to replace that garment so that they can study the older one, see where and why a given pattern or fabric wore down, gain data, and improve in the future. This type of narrative is encoded into a product, too.

    Mastery

    Mastery allows you to gain every unfair advantage you can get. You can even leverage your competitor’s resources against them and effectively let them do part of the work for you.

    Errolson gives the example of meeting Yohji Yamamoto at a dinner, in very dim lighting, and describes the way that Yamamoto reached out, touched his jacket, and said, “Japanese”. Yamamoto was able to correctly discern the origin of the fabric by simply feeling it for a moment.

    Errolson references The Book of Five Rings by Miyamoto Musashi, which contains the concept of the two-fold gauge of perception & sight. This again relates to the idea of not only seeing what’s in front of you, but knowing what the presence of what’s in front of you entails, and implies.

    When Errolson talks to younger designers, he tells them not to look at the design as a mere end product, but “as an artifact of the process that created it.” If he looks at mood boards students have built from images on tumblr, etc., he can tell which images influenced their designs, which isn’t necessarily a good thing. This, he says, “doesn’t really bring us any further. Don’t look at tumblr, look through it…what was the person thinking about when they made the garment that’s in [the image]. that’s the interesting part”.

    Your Own Game

    “The way to gain the unfair advantage is to play your own game. Playing someone else’s game brings no advantage whatsoever…there’s a reason the saying ‘the house always wins’ is a thing.”

    Errolson says that to win in an unfair situation, you have to do what only you can do. He says that if you’re actually going to bring value to society, your craft, your consumer, you have to make sure that your influences don’t define your design more than what originality you’re bringing yourself: “Good design gives more than it takes” (he attributes this quote to Eric Hu).

    Looking at design, and understanding how something is made – using the enemy’s sword, so to speak – is about efficiency. One of the most efficient ways to do things, especially when learning, is to copy, but this is dangerous because it doesn’t give more than it takes. It only takes. What you want to copy, really, is the process, not the result. You should seek to reverse engineer the process that resulted in a given product, and ask questions about how that product was arrived at. If this is done while in one’s own situation, according to one’s own goals, something different will result. If this is done effectively, you will end up with your own message, and end up playing your own game.

    Strike From The Void

    Striking from the void means applying the concept of ‘playing your own game’ to your entire operation. It means to not seek validation. In both your product design and business practices, you should do only what you can do on a company level, do only what you can do on a materials level, and so on.

    When designing garments, Errolson and his team look at a given material and ask, “what can this material do, and what can only this material do?” They try to express this, and it leads to things that are unique. Asking these questions can also help determine fitness-to-purpose.

    Equally as important as playing your own game is not being tempted to play other people’s games. Once you’ve chosen your path and moving along it, there are always going to be distractions, people questioning what you’re doing. There is perhaps more power in saying ‘no’ than in saying yes. In the case of Acronym, Errolson says that, “we say no probably nine out of ten times, to almost everything that people ask us. It’s taken us a long time to realize that if we play the game everyone else plays, we always lose. We’re smaller…our competition is hundreds of times, if not thousands of times larger. They have more resources on every front…but other companies still can’t do what we do, they can’t replicate it, because they’re copying the result, they’re not copying the process.”

    Errolson says that to avoid falling into playing someone else’s game, it’s important to focus on “your own methodology, your own system, your own path.” He offers an anecdote about meeting the head designer at McClaren, who told him that the car designers are always trying to convince the engineers to do certain things; the engineers, in response, basically say, if it doesn’t make the car go faster, take it off. In other words, if whatever you’re doing – whether making a design decision, a management decision, or otherwise – doesn’t serve your game and unique purpose, get rid of it, even (or especially) if everyone else does it. Don’t be afraid to take the risk in doing what might seem counterintuitive to everyone else. All of the things Errolson and his team do at Acronym that work best are things that, when explained to people in the industry, are treated as crazy, unfeasible.

    Measure Twice, Cut Once

    You want to be able to perform and deliver in your category in a way that is above and beyond what everyone else is doing: “while everyone else is playing (A) game, you come with (B) game and just short circuit everything they’re working on.” Errolson points out that the number one selling camera is the iPhone. How can anyone compete with it? They can’t. Apple changed the paradigm. This kind of unorthodox methodology that is outside the norm can deliver long term, defendable success.

    (Errolson gives a demonstration of an Acronym jacket that has feature sunlike anything else. There is a sleeve pocket in which to store a phone, which connects to an interior opening such that with the wave of an arm, the phone will slide into the wearer’s hand from inside the sleeve; The zipper on the jacket, when completely closed/zipped up, can be undone rapidly, and opened all at once with a pull upwards on the zipper; Built onto the jacket is a strap which allows the wearer to remove the jacket, and then sling it across their body via the strap, and also tighten the strap to fit the torso. The jacket is then off, out of the way, and secured comfortably.)

    New Futures

    Asymmetric design can have value outside of fashion/clothing because in Errolson’s words, “…all bets are off. The situation that we’re in globally, we need new futures. Business as usual is not delivering what we need. In the era of post-truth and environmental collapse…everyone is an amateur. The way things have been made up until now doesn’t apply.”

    Errolson says that to affect systemic change, new methodologies are needed. And these new methodologies “are going to be going up against entrenched systems. And we all need all the help we can get.”


    Quick Interview Highlights

    • Born in 1971
    • Grew up in Vancouver, Winnipeg, and Edmonton
    • Started martial arts at 10 years old
    • Realized he could do things in his karate uniform that he could not do in his regular clothes. This motivated him to have clothes he could move in as he did in his karate uniform.
    • Went to Ryerson University in Toronto. Was in the Fashion Design program.
    • Moved to Munich with his co-founder Michaela. Started a design practice. Designed everything from swimwear to snowboard collections.
    • Acronym was founded in 1999, born out of frustration with the way design would take a backseat in the commercial requests clients had.
    • The first Acronym product was launched in 2002: a boxed set of a jacket and bag
    • In the beginning, a large part of Acronym’s customer base was made up of other designers
    • In 2008-2009, Stone Island and Arc’teryx had reached out to partner with Acronym
    • Collaborations with Nike, both on footwear and on their ACG line helped change the profile and popularity of the brand.
    • Acronym doesn’t have a sales director, or merchandizing lead – they simply make what they want to, and make the best versions they possibly can. But because of this their products are very expensive.
    • Errolson sees the theme of his work as one of resistance against norms of industry, consumption, and expectations around product design & function.
    • For 8-10 years, Acronym was only two people: Errolson and his partner Michaela.
    • Errolson sees Acronym as the opposite of fast-fashion. He’s even said that “not buying Acronym is more Acronym than buying Acronym”.
    • Acronym tells its retailers that they are not allowed to mark the product down. The idea is that because their products are simply iterated upon, and not entirely new products, they don’t lose value over the course of six months, or whatever time period. The garments are just as good and maintain value.
    • Errolson sees Acronym’s items not as something people should be buying every season as is the trend in so much of fashion, but as a product whereby you should “buy one and then keep it for ten years.”
    • “The average number of times a piece of apparel is worn is 7…this is insane, this is literally destroying the planet”
    • The apparel industry is the biggest employer in the world, but because of this, it also has the least oversight. The likelihood of slavery in the supply chain is higher than in any other industry. Fast-fashion’s race to the bottom regarding price exasperates all of these problems.
    • “Fast fashion must die.”