Dien Rice
August 9, 2002, 10:49 PM
Hi Boyd,
> I hadn't considered the importance of
> scalability in one's endeavors, so I thank
> you for mentioning it.
Boyd, I think "scalability" is very important!
By "scalability" I mean - can your business easily and "naturally" grow? Or are you limited to a certain size?
For example, let's say your business is fixing some very obscure piece of equipment. Because of the difficulty in getting these fixed, you can probably charge a very high hourly rate for your services. But is your business "scalable"?
Probably, it's not - because it's highly dependent on your VERY specialized skill, and you can only help one customer at a time. If it's very hard to find people with your specialized skill, then it's hard to employ others to help with the work. You're stuck with earning an hourly wage.... Since there are only a limited number of hours in a week, there's a "cap" on how much your business can make!
BUT - let's say you take that skill, and turn it into a newsletter or membership web site. Then, that business is "scalable", in the sense you can earn more money, by getting more subscribers. The more subscribers you get, your profits increase for the same amount of work.
OR, let's take a service business which doesn't require much skills. Let's say it's mowing lawns.... Then, it becomes scalable, because to expand, you can hire other people to mow lawns for your business. Your skill is not so "specialized" that you can't hire others to do the work....
I think "mail order" style businesses are all "scalable".... Especially if you have a built-in base of subscribers (such as through a catalog).
I think about "scalability" in everything I do.... I think it's often easier (at the beginning) to start a "non-scalable" business.... However, I've purposely avoided that, because my plan is to keep growing my successful businesses. I don't want to hit a wall I can't pass!
I think it's a very important topic to think about.... :)
> As for "hidden value" all I have
> to say is that seeing "hidden
> value" and exploiting it is the key to
> the vaults of Croesus.
> I personally find it extremely difficult to
> see--I bet there are pockets of hidden value
> in what I know, and what I know how to do,
> that if I could just mine them out making
> money would be a very easy thing to do,
> indeed.
I think this is largely experience, and being alert to them.... I guess I'm getting to the stage where I'm now always thinking of opportunities in what's around me.... (Though I think Michael Ross is a true master of this, IMHO - I've been learning from him. :) )
Here's an Australian example.... I've noticed on eBay, people here in Australia sell second-hand Australian magazines (often women's magazines) to US bidders for about US$5, plus $5 postage. I can buy these second-hand magazines here for about US 25c to 50c each - most people throw them away. They don't know they can sell them for 10 to 20 times that amount on eBay. There's an opportunity (at least a local Australian one)....
The "hidden value" is because these magazines are abundant here in Australia, but difficult to get overseas.... Hence the "hidden value" of these magazines comes from selling them to overseas bidders (who live where these magazines are scarce).
How can you use this where you are? What is easy - even abundant - where you live, yet difficult to get elsewhere? That could be a possible opportunity.... I remember seeing one guy on eBay who sold lots of Las Vegas casino memorabilia.... It's probably very easy for him to get it (maybe he even gets some of it for free), because this guy lives in Las Vegas. Yet, it's NOT easy for others who live elsewhere to get these things, so he can sell these to them at a profit.
Here are some examples of the kind of thing I mean.... Check through this guy's auctions. He's selling Las Vegas memorabilia (especially ashtrays).... And guess where he lives? If you click on any of his auctions, you'll see he lives in - Las Vegas! He can probably pick this stuff up really cheaply in Las Vegas (or maybe even get it free), and sell it for a profit on eBay to people outside Las Vegas.... Many people in Las Vegas probably consider these "worthless", but this guy sees the "hidden value" of these to people who live outside of Las Vegas....
Another great example is the Gary Hendrickson's post below about aspirin tins.... More "hidden value" there....
There are opportunities all around you. But to see them, I think it takes a certain mind-set, so that you are always looking for them.... After a while, it starts to become "instinctive".... :)
- Dien
> I hadn't considered the importance of
> scalability in one's endeavors, so I thank
> you for mentioning it.
Boyd, I think "scalability" is very important!
By "scalability" I mean - can your business easily and "naturally" grow? Or are you limited to a certain size?
For example, let's say your business is fixing some very obscure piece of equipment. Because of the difficulty in getting these fixed, you can probably charge a very high hourly rate for your services. But is your business "scalable"?
Probably, it's not - because it's highly dependent on your VERY specialized skill, and you can only help one customer at a time. If it's very hard to find people with your specialized skill, then it's hard to employ others to help with the work. You're stuck with earning an hourly wage.... Since there are only a limited number of hours in a week, there's a "cap" on how much your business can make!
BUT - let's say you take that skill, and turn it into a newsletter or membership web site. Then, that business is "scalable", in the sense you can earn more money, by getting more subscribers. The more subscribers you get, your profits increase for the same amount of work.
OR, let's take a service business which doesn't require much skills. Let's say it's mowing lawns.... Then, it becomes scalable, because to expand, you can hire other people to mow lawns for your business. Your skill is not so "specialized" that you can't hire others to do the work....
I think "mail order" style businesses are all "scalable".... Especially if you have a built-in base of subscribers (such as through a catalog).
I think about "scalability" in everything I do.... I think it's often easier (at the beginning) to start a "non-scalable" business.... However, I've purposely avoided that, because my plan is to keep growing my successful businesses. I don't want to hit a wall I can't pass!
I think it's a very important topic to think about.... :)
> As for "hidden value" all I have
> to say is that seeing "hidden
> value" and exploiting it is the key to
> the vaults of Croesus.
> I personally find it extremely difficult to
> see--I bet there are pockets of hidden value
> in what I know, and what I know how to do,
> that if I could just mine them out making
> money would be a very easy thing to do,
> indeed.
I think this is largely experience, and being alert to them.... I guess I'm getting to the stage where I'm now always thinking of opportunities in what's around me.... (Though I think Michael Ross is a true master of this, IMHO - I've been learning from him. :) )
Here's an Australian example.... I've noticed on eBay, people here in Australia sell second-hand Australian magazines (often women's magazines) to US bidders for about US$5, plus $5 postage. I can buy these second-hand magazines here for about US 25c to 50c each - most people throw them away. They don't know they can sell them for 10 to 20 times that amount on eBay. There's an opportunity (at least a local Australian one)....
The "hidden value" is because these magazines are abundant here in Australia, but difficult to get overseas.... Hence the "hidden value" of these magazines comes from selling them to overseas bidders (who live where these magazines are scarce).
How can you use this where you are? What is easy - even abundant - where you live, yet difficult to get elsewhere? That could be a possible opportunity.... I remember seeing one guy on eBay who sold lots of Las Vegas casino memorabilia.... It's probably very easy for him to get it (maybe he even gets some of it for free), because this guy lives in Las Vegas. Yet, it's NOT easy for others who live elsewhere to get these things, so he can sell these to them at a profit.
Here are some examples of the kind of thing I mean.... Check through this guy's auctions. He's selling Las Vegas memorabilia (especially ashtrays).... And guess where he lives? If you click on any of his auctions, you'll see he lives in - Las Vegas! He can probably pick this stuff up really cheaply in Las Vegas (or maybe even get it free), and sell it for a profit on eBay to people outside Las Vegas.... Many people in Las Vegas probably consider these "worthless", but this guy sees the "hidden value" of these to people who live outside of Las Vegas....
Another great example is the Gary Hendrickson's post below about aspirin tins.... More "hidden value" there....
There are opportunities all around you. But to see them, I think it takes a certain mind-set, so that you are always looking for them.... After a while, it starts to become "instinctive".... :)
- Dien
