As Rob taught me, when you share your knowledge with others, magical things happen, so here you go. P.S. It turns out, there is a formula for success…
Without further ado:
1. Rob’s formula for success
W = (V + FE) x L
Wealth = (Value + Fair Exchange) x Leverage
If you’re numerically-challenged, fear not because I explain below. Now it’s important to remember that this applies to you whether you are an employee or a business owner.
- Wealth – the thing that everyone wants, unless you’re that Amish guy who just wants to make furniture that Sea Otter was talking about in The Wolf of Wall Street.
- Value – you need to have something that society values. This could be knowledge, a product, experience, contacts, followers, anything really, as long as it is perceived as valuable. For example, Apple have created products that enhance people’s lives so people perceive them as valuable. Good therapists help people with their problems and there is a value associated with those skills. Employees who deliver results in a company, are valuable. Value is the cornerstone of the equation because 0 multiplied by 500 is still 0. If you’re not creating value, go back to the drawing board. Think about what services you can add-on, can you increase perceived value? It doesn’t have to cost you much, you may just have to package it differently.
- Fair Exchange – in a nutshell this refers to the price that is being charged for your goods or service. Charge too little and they will be perceived as poor quality, charge too much and customers will feel like they are being taken advantage of. There is a balance otherwise it is unfair exchange. Note that charging too little is as bad as charging too much. Either you'll go bust and they'll lose their service or they'll resent you for charging too much. Fair exchange is relatively easy to adjust but it often requires courage. You need to be comfortable making a solid profit margin. If you are struggling and feel like you’re ripping your customers off, then consider this. Your profits are A. a way for you to sustain your lifestyle, but more importantly, B. a way for you to reinvest in your product or service to make it better for your customers. You may need to regularly test the price to ensure that something hasn’t changed either up or down. Also remember that you need to give different pricing structures. Always have a low, medium and high price so customers have choice.
- Leverage – this is the mechanism of monetising the former 2 variables. More paying customers, more sales, more visitors etc. In the Apple scenario, this would be getting their products in the marketplace via billboards, digital marketing and Apple stores. For a therapist it would be creating a strong reputation in their local community. For our employee, it could be networking in their own organisation or with other potential employers so that everyone realises the value that they add. Leverage is frequently the missing piece of the puzzle, especially for small business entrepreneurs. They often have fantastic products or services but do not know how to scale, do not understand marketing and do not believe that they can be successful. Rob says that the advent of the internet and social media means that anyone can do marketing. Use social media to show people the behind the scenes stuff, they love it. You now have instant access to customers, use it. Setting up a YouTube channel or Wordpress website takes under an hour and many people now make a living with these activities. What’s your excuse?
2. You get remunerated according to the wealth you create in other people’s lives
You can give to society in any way – bigger, better, faster – it doesn’t matter, as long as it is value. Create value in your own life by reading more, going to more events, interviewing more people. The world does not support the entitled and no-one is coming to give you a handout. If you’ve been waiting for this to happen, refresh yourself on the definition of madness.
There is hope however. In our employee example, if you decide to become more valuable and embark on some additional training, you will be rewarded with more money. If not by your current employer, someone else will. The equation can only be out of equilibrium momentarily and will always balance.
If you’re one of those employees thinks you deserve a higher salary, read on. Your boss will only pay you double if you are worth double. You cannot say you’ll be worth double once you get the job. No. You must be worth double now. So, the moral of the story is that if you want to get paid double, do the work of the person who gets paid double and then your ship will come in!
For those of you who want to make a million £’s, rather focus your energy on serving 1 million people and then I promise the £’s will follow shortly thereafter.
3. How to become successful in 4 easy-to-follow steps
At the end of Rob’s speech, someone in the audience asked: “Rob, that sounds like good advice and everything but tell us exactly how we go from sitting in our chair to yours?”
To which Rob replied with a concrete answer, instead of the usual BS you get like ‘it’s not about finding the right answers, it’s about asking the right questions….’ I digress.
- Step 1: Belief stage – you must believe that you can be successful. The limit to your success is your belief ceiling. It is driven by you. The ceiling is a figment of your imagination. Get rid of it. Easier said than done, yes, but if you want it bad enough then start here. Rob quoted an example of someone who was custom building a £1.2bn yacht. Assuming a 20% profit margin, that’s £240m profit for someone. Why not you?
- Step 2: Network like a ninja – do you really think working those extra 4 hours on a Thursday evening is going to change your career? No, it won’t and you’ll miss out on awesome speeches from people like Rob. Go to events and constantly meet new people. Also, remember to listen. If you are always speaking, you’ll never learn anything new.
- Step 3: Constantly improve yourself – why should you be ashamed about reading self-help books? Who doesn’t want to improve their lives? Rob mentions that he reads/listens to over 500 books a year… So, read, do happy-clapper courses run by people you respect, watch YouTube videos on getting motivated. Nowadays this is referred to as self-hacking and it is cool. Do it.
- Step 4: Do a series of “screw it, let’s do it’s” – this is the cover of Richard Branson’s book and seemed to work pretty well for him too. Jump into the unknown and try different things until something works. Yes, sometimes luck plays a part but then again, the famous golfer Gary Player once said, “the harder I practice, the luckier I get.” Most successful entrepreneurs that I know literally tried 5 businesses, often simultaneously, and then picked the one that started getting traction.
Here’s a picture of Rob listening to someone in the audience. A key characteristic of successful people, take note.
4. Having money is awesome – do not be ashamed for wanting to be rich
Rob has been skint and rich and says having money is way better. This echo’s what Dicaprio said in his Wolf of Wall Street speech: “There is no nobility in poverty. I’ve been a rich man, and I’ve been poor man. And I choose rich every [freaking] time.”
People will judge you if you drive an old banger or a Ferrari so drive, wear, do and say what you want.
And no, having lots of money does not make you unhappy. Do billionaire’s ever say, ‘all this money is just terrible, here let me give it all away so I can be happy’? Nope. Literally, said no-one ever.
Think about it. Most people usually say that if they came into a large fortune, they would take their family on an around the world tour. Money is the mechanism that would make this happen, not anything else. So why would you feel bad for wanting to share an epic experience with your family?
5. Success is all about your TEAM
The most successful people in the world have a strong team backing them. Rob mentioned the example about Thriller by Michael Jackson. Everyone idealises the talent of the one man on the stage but in reality, he only played a very small part in the overall production.
On the venture capital side of things, 3 of Techstars’ 6 investment criteria are team, team and team. Point.
When running a business, you should crowdsource 80% of your ideas because you alone are not that creative. Create a culture where employees can explore and make mistakes. Some companies bizarrely reward mistakes because it means that someone tried something new. I’m not necessarily advocating that, but you certainly do not want to have an organisation that is hamstrung by the limits of your talent.
Rob also says that your co-founder must be different to you. If you’re both the same then one of you is redundant. Yes, there be times of conflict but if handled correctly, it will be healthy for the business and lead to a better solution.
6. It’s okay to fund your creative pursuits with a corporate job
Someone in the audience asked Rob whether they should quite their day job to follow their dream of doing something more artistic.
Rob’s answer was no. You need to pay the bills and there’s no shame in doing that. Fund your creative stuff with hardcore money generating activities. If you make your art real because you are not reliant on the money, it will be better and you’ll sell more at a higher price. By relying on your art for income, you are often ultimately doing a disservice to yourself and your customers.
Obviously, the best way to fund your creative ventures is through passive income because it typically requires very little time. Rob has a substantial portfolio of property that allows him to invest his time in writing books and giving speeches to people like us. He’s living proof that this methodology works. Read the 4 Hour Work Week by Tim Ferriss if you’re looking for inspiration on passive income!
While we’re on property, Rob says he’s only ever sold a handful of his properties because he never wants to walk past a property and say, “I used to own that,” because it will mean that he’d have spent the money and have nothing to show for it. I think we can also take some sage from this statement.
For those of you that don’t know Rob’s story, you may be surprised to hear that only 11 years ago he was £50k in credit card debt and failing artist. He was not born with a silver spoon in his mouth or anywhere else. He embraced his circumstances, stopped complaining and found solutions.
I’m not sure about you all, but now more than ever, I have laser focus on exactly how I’m going to achieve my goals. Cheers Rob, see you on the other side!
Good luck Everyone,
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A second thank you to my business partner, best friend and brother, Jon Leigh, for reviewing this post and inviting me to the event.
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