Categories
Wealth

Lifestyle Entrepreneurship: What It Is and How to Pursue It

I’ve pursued lifestyle entrepreneurship ever since I learned about it in 2013.

I don’t have lifestyle entrepreneurship all figured out.

But I’m happy to share what I’ve learned about this type of entrepreneurship over the past several years.

So what is lifestyle entrepreneurship?

Lifestyle entrepreneurship involves building a business to prioritize your ideal lifestyle first, profits second.

Plenty of people pursue “lifestyle entrepreneurship” without knowing about this term or caring that it has a label.

These entrepreneurs often do what they love and can’t believe they get paid to do it.

However, if you’re searching online for lifestyle entrepreneurship, I’m guessing you’re probably one of the 85% of people worldwide who isn’t engaged at work.

Perhaps you’re looking for a way out and investigating lifestyle entrepreneurship as an alternative.

Let’s dive into what makes lifestyle entrepreneurship different from conventional entrepreneurship and career paths.

Lifestyle Entrepreneurship and Lifestyle Design

Like lifestyle entrepreneurship, lifestyle design is another 21st-century buzz-word.

Although the concept has been around for a long time, Tim Ferriss pushed the idea of lifestyle design into the mainstream in his book, The Four Hour Workweek.

In short, lifestyle design is just what it sounds like: deliberately designing your ideal lifestyle.

Part of lifestyle design involves mapping out what you want your life to look like and how much money it will take to get there.

Many people assume their ideal lifestyle requires so much money that they couldn’t possibly achieve it.

Some people would rather never confront their dreams because the possibility of realizing they are out of reach would be too painful.

However, as many lifestyle designers will tell you, the life of your dreams often doesn’t cost as much as you might think.

Regardless, lifestyle design is a critical first step in lifestyle entrepreneurship.

Because before you build a business to facilitate your ideal lifestyle, you need to know what your ideal lifestyle is and how much it costs.

Lifestyle Entrepreneurs, Products, and Services

Lifestyle entrepreneurs are all about building a specific lifestyle.

Usually, this lifestyle involves the freedom to work when, where, how, and on what they want.

For this reason, many lifestyle entrepreneurs sell products instead of services.

For instance, lifestyle entrepreneurs typically don’t pursue the path of web designers, doctors, and lawyers (who sell their services).

Instead, their businesses more closely align in offerings with e-commerce website owners, information product sellers, and bloggers.

Sometimes figuring out whether an entrepreneur sells a product or a service is tricky (like a blogger making money from in-content ads on their website).

But usually, it’s straightforward.

And if you’re an employee, you are almost certainly a service provider.

Why Lifestyle Entrepreneurs Don’t Usually Provide Services

Service providers typically have more constraints on their time than those who sell products.

Anyone who has worked a regular 8 to 5 knows these time constraints well.

As an employee, you provide services for your company.

You sell your time to your company and your company pays you a wage in exchange.

While all employees may be service providers, not all entrepreneurs necessarily sell products.

There are plenty of service-providing entrepreneurs like freelancers and agency owners to name a couple.

And although their businesses may allow for freedom than an employee’s lifestyle, they typically aren’t the businesses lifestyle entrepreneurs pursue.

How Selling Products Fits Nicely with Lifestyle Entrepreneurship

One of the primary reasons lifestyle entrepreneurs prioritize selling products is because of how they scale.

The way businesses scale is easiest to think about with an example.

Imagine an entrepreneur who sells a product like an e-book on his website.

He puts the same amount of effort into the creation of the e-book whether he sells five or 500,000. 

Also, more sales also don’t necessarily require hiring more people or fundamentally changing his business operations, unlike service providers.

In other words, he could potentially sell 500,000+ copies without hiring employees.

Plus if his content is timeless, there’s no reason why that e-book cannot continue earning him money for the rest of his life.

This likely sounds too good to be true.

But I’m actually describing a situation like Mike Geary’s, creator of the information product, The Truth About Abs, who makes $5 – $10 million per year selling about 500,000 copies of his e-book annually.

Mike could be the poster boy for lifestyle entrepreneurship.

He realized he wanted to be a lifestyle entrepreneur after working a corporate job and finding it didn’t align with his ideal lifestyle.

With this realization, Mike’s passion for health and fitness and his desire to live free of the time constraints of a day job motivated him to publish his information product.

Though it took years for him to leave his day job and work on Six Pack Shortcuts full-time, he built the lifestyle of his dreams with the business of his dreams.

Hardly any lifestyle entrepreneurs experience the financial level of success that Mike has.

But plenty of lifestyle entrepreneurs have been able to quit their day jobs and lead a similarly independent lifestyle that Mike has achieved.

Lifestyle Entrepreneurship and Independence

You will often hear the term “indie” (short for independent) or “indie hacker” in the same breath as lifestyle entrepreneurship.

In fact, if lifestyle entrepreneurs had an official website, Indie Hackers would be a strong candidate.

Why does independence go hand-in-hand with lifestyle entrepreneurship?

I mentioned above that lifestyle design for lifestyle entrepreneurs usually involves the freedom to work when, where, how, and on what they want.

This usually means independence from a typical job, working in a large team, and particularly, independence from outside investors.

Funding your startup in a low-cost, no-outside-capital way is very popular with lifestyle entrepreneurs.

It even has it’s own buzzy term in the startup culture, I’ll discuss in the next section.

Bootstrapping and Lifestyle Entrepreneurship

If you look up the definition of bootstrap, you’ll probably find something like:

get (oneself or something) into or out of a situation using existing resources.

The definition of bootstrapped according to the Oxford dictionary

In the context of business, bootstrapping means that you use your existing resources of time and money to start a business.

So instead of getting a bank loan going to investors for money, a bootstrapper will use his own time and money to get his business started.

Books like Eric Ries’ The Lean Startup and inexpensive technology have helped popularize the concept of bootstrapping in business.

Some businesses need outside capital and a large team to get off the ground.

These sorts of businesses like space exploration companies, green energy, and others aren’t good candidates for bootstrapping.

But for the lifestyle entrepreneur, bootstrapping his business is usually an excellent idea.

Perhaps the most important reason for the lifestyle entrepreneur to bootstrap instead of raise funds is that outside investors would make him a service provider.

He would be providing the service of turning his investors’ money into more money.  

But bootstrapping as a philosophy is also about freedom.

And the fewer investors, employees, and people you have to deal with in business, the more freedom you have.

Lifestyle Entrepreneur or Lifestyle Solopreneur?

Although there isn’t exactly a hard and fast definition of a solopreneur, it essentially means a business owner who runs his business largely by himself.

I think anyone without any full-time employees counts as a solopreneur.

There are plenty of solopreneurs who aren’t necessarily lifestyle entrepreneurs like freelancers and indepedent consultants.

But lifestyle entrepreneurs seem particularly attracted to solopreneurship.

And it makes sense.

Solopreneurs, particularly those who sell products instead of services, often experience many of the freedoms that lifestyle entrepreneurs are after.

Soloentrepreneurship especially in the context of lifestyle entrepreneurship is often made possible by technology.

Lifestyle Entrepreneurship and Technology

As you’ve probably gathered, most lifestyle entrepreneurs rely heavily on technology.

Why?

The web has made online sales possible anytime, anywhere, to a global audience.

Or as entrepreneur and investor, Tyler Tringas puts it, certain types of online businesses are:

location-independent, high margin, [and] low-risk with predictable recurring revenue. 

Tyler Tringas blog

These sorts of online businesses perfectly facilitate the lifestyle many lifestyle entrepreneurs want.

Also, most lifestyle entrepreneurs have a technology-first mentality when brainstorming business solutions.

For instance, a lifestyle entrepreneur typically considers outsourcing businesses processes in this order:

  1. with code or other technological automation,
  2. with a freelancing company,
  3. with a freelancer,
  4. (and ideally never) with a full-time employee.

Lifestyle entrepreneurs have a technology-first outsource mentality because people management often limits the sort of freedom they are after.

Conclusion

I hope this gives you a better idea of what lifestyle entrepreneurship is and how you can pursue it in your own life.

Building a lifestyle business isn’t easy.

But with consistent, high-quality work, you can stack the odds of success in your favor!

How do you define lifestyle entrepreneurship?
Let me know in the comments!

Categories
Wealth

Game Theory in Business

If you’ve heard of game theory and you want to know what it is and how it relates to business, this post is for you.

I graduated from the University of Southern of California in 2014 having studied French and business there.

However, I discovered my interest in game theory as it relates to business years after I graduated.

I don’t have all the answers when it comes to game theory in business, but I’m excited to share with you what I’ve learned so far.

The Definition of Game Theory

If you’ve searched the web for information about game theory, you’ve probably come across Investopedia’s definition:

Game theory is a theoretical framework for conceiving social situations among competing players. In some respects, game theory is the science of strategy, or at least the optimal decision-making of independent and competing actors in a strategic setting. The key pioneers of game theory were mathematician John von Neumann and economist Oskar Morgenstern in the 1940s. Mathematician John Nash is regarded by many as providing the first significant extension of the von Neumann and Morgenstern work.

Investopedia source linked here

My favorite part of this description is:

“…the science of strategy, or … optimal decision-making of independent and competing actors in a strategic setting.”

This part of the definition indicates game theory’s broad implications.

If you think of life as a strategic setting with independent and competing actors, then game theory has to do with optimal decision making in life.

Games: The Most Practical Part of Game Theory in Business

In the context of business, I believe the types of games in game theory have the greatest practical application.

Perhaps this is why the game types according to game theory of positive, zero, and negative-sum games have made their way into common conversation.

To distinguish game types, you will find situations in which the total of gains and losses is:

  • greater than zero in positive-sum games,
  • equal to zero in zero-sum games,
  • and less than zero in negative-sum games.

If you think of wins as +1 point and losses as -1 point, these descriptions may become clearer.

For instance, you could have:

  • both players win in a positive-sum game for a net gain of two,
  • one player win and one player lose in a zero-sum game for a net gain of zero,
  • or both players lose in a negative-sum game for a net loss of two.

Of course, in the real world, you will find greater complexity, more players, and less clear application.

However, these general concepts seem to hold true in practical application.

If the game types of game theory still aren’t clear, don’t worry.

I’ll take a deep dive into zero and positive-sum games (the most common real-world games) in the following sections.

Naval Ravikant on Game Theory and Wealth Creation

Naval Ravikant is the co-founder of AngelList and a prolific technology investor in hundreds of companies including Twitter and Uber.

Some refer to him as The Angel Philosopher because of the deep ideas he shares on Twitter and elsewhere about angel investing and more.

In a particularly striking tweet storm, Ravikant shared several thoughts on building wealth and game theory’s implications for this process.

This tweetstorm struck a nerve with thousands who engaged with his content such that he expanded his tweets into a podcast episode and transcript available here.

You don’t need to listen to Naval’s podcast or read the transcript to find value in this post.

However, I recommend reading it or listening to it if you get a chance.

It’s thought-provoking and particularly relevant if you’re interested in game theory in business.

Ravikant and Zero-Sum Games

Ravikant claims people are in two major pursuits in life: the pursuit (or game) of wealth and the pursuit (or game) of status.

Initially, Ravikant’s use of the word “game” to describe these pursuits surprised me because I thought it downplayed their importance.

However, I now believe he refers to wealth and status pursuits as games to allude to their game theory characteristics.

To understand the implications of wealth and status games, you should know that Ravikant defines status as your rank in the social hierarchy.

He indicates that the pursuit of status is inevitably a zero-sum game according to game theory because whatever is gained by one is lost by or taken from another.

So although you may be able to shuffle the order of your rank in the social hierarchy, your gain will always come at the expense of another’s loss.

Hunter-gatherers lived in zero-sum, status-based societies with leaders and followers, winners and losers, and food for some, not food for all.

Politics and sports are modern examples of these same, zero-sum, status games where someone wins at the expense of another’s loss.

Politics and sports are also good examples of how players often play zero-sum games with a fixed rule-book they cannot change.

For instance, a basketball player can’t change the rules of basketball, especially not during the game.

He must play out the game according to a rulebook created by a third-party.

This rulebook acts as a sort of permission where players have permission to play the game only if according to its rules.

A fixed rulebook defined by those outside the game (permission) often indicates a zero-sum game.

You find zero-sum qualities in businesses providing commodities or products and services with effectively no differentiation.

Dental, legal, and medical practices often find themselves in zero-sum competition with most dental, legal, and medical teams providing extremely similar services.

Of course, this can lead to cutthroat competition between practices as each firm must often vie to provide the same services to a fixed local market.

Zero-sum competition in these fields starts before you open for business too.

Consider the path you must typically follow to succeed in dentistry, law, or medicine.

You need credentials (permission) from specific institutions throughout your entire career in these fields.

In fact, you will likely encounter zero-sum competition in many areas of life before you ever enter the business world.

How the Western School System Promotes Zero-Sum Games

University degrees operate today as status symbols, and business schools in particular teach and promote zero-sum games with fixed rulebooks.

Universities base admittance (permission to attend) based on a fixed, albeit not 100% clear, rulebook.

Accepted students likely achieve a certain undergraduate or high school GPA, participate in certain extracurriculars, and more.

Once accepted, students typically experience classes graded “on a curve,” perhaps the most obvious example of formal eduction’s zero-sum qualities.

(All my classes were graded on a curve when I was in the USC business school from 2010 to 2014.)

This means that each student’s score falls within a standard normal bell curve with a handful of students receiving an A, a few more receiving an A-, a little bit more receiving a B+… The majority receiving a B-, a few less receiving a C+, and so on. 

In short, you can shuffle your order in the hierarchy of your grade in the course, but any gain will come at another’s loss.

The zero-sum focus of western eduction compounds in business school where most classes focus on group project work.

Group projects are another opportunity to determine your rank in the social hierarchy on both a small scale within the group and a larger scale between groups.

To further excel in the zero-sum game of business school, staff and professors expect students to attend networking events and job fairs.

Group projects and networking are both fundamentally comparative and competitive.

Intense focus on comparison and competition also often indicate zero-sum games.

The Qualities of Zero-Sum Game Winners

I’m more interested in positive than zero-sum games.

But I recognize zero-sum games have immense power in society today.

So it’s worth discussing how to excel in zero-sum games in business.

Thus far, the characteristics I’ve identified common to most modern zero-sum games include:

  • a fixed rulebook (permission from a third-party)
  • intense focus on comparison and competition

Thus, those who thrive in a zero-sum game environment often:

  • have excellent rule-following ability,
  • look good on paper,
  • have strong leadership skills, charisma, and emotional intelligence,
  • and are attractive and competitive.

If this doesn’t sound like you, don’t worry.

It doesn’t sound like me either, and you can still succeed in business without these qualities despite what formal western education might have you believe.

Business success is all about leverage.

And although winning zero-sum games can certainly help you gain business leverage, it’s not the only way.

I’ll address leverage and how to get it in the next sections.

Labor, Capital, Media, and Code Leverage

In the excerpt of Ravikant’s tweetstorm above, he notes that businesses must use some sort of leverage to profit.

Ravikant further defines the different types of leverage businesses can use to profit as:

  • labor – people working for you
  • capital – money working for you
  • media – media working for you
  • code – code working for you

Labor is the oldest type of leverage.

Labor leverage goes back to our hunter-gatherer origins where more people below you in the social hierarchy increased your odds of survival.

People still follow the rules of labor leverage today, typically only working under someone with status (or capital which is often a result of status).

This is why management positions usually go to MBAs, or those who are masters of the zero-sum game of status.

Capital leverage also requires status.

Hedge, mutual, private equity, venture capital, and other fund managers must prove their status to investors with educational pedigree, financial management experience, and more.

How to Win Labor and Capital Leverage By Winning Zero-Sum Status Games

People have built massive fortunes leveraging labor and capital.

They have longer track records of building fortunes than media and especially code.

Thus, the paths to labor and capital leverage are clearer than the paths to code and media leverage.

If you want to leverage labor and have the high salary that often comes with people management,

  • work in consulting at a prestigious firm,
  • get an MBA at a top school,
  • and move on to management from there.

If you want to leverage capital,

  • work in investment banking,
  • get an MBA at a top school,
  • and transition to fund management typically in private or public equity.

Although neither of these paths are necessarily easy, they are well established as the conventional means of obtaining labor or capital leverage.

The additional benefits of leveraging labor and capital are clear:

  • wealth,
  • and (more) status

The downsides, however, can be significant.

Winning zero-sum games in business requires permission at every turn.

As I mentioned before, zero-sum games often have a fixed rulebook that players do not define and cannot change.

There are also gatekeepers to ensure players play by the rules.

In sports, the gatekeepers are referees.

In business, the gatekeepers are admissions and human resource departments, investors, and more.

The standard path to labor and capital leverage requires permission from gatekeepers to play by the rules at every turn.

You must obtain permission from (or acceptance to):

  • a top a university,
  • a particular degree program,
  • a particular graduate program,
  • a high-status job,
  • certain investors, etc.

Gate-keepers or referees of zero-sum games can stop you from winning without reason.

How many famous sports games’ tides turned and upsets occurred as a result of a wayward call from a referee?

Likewise, if your resume lands on the desk of a potential investor or someone in admissions or human resources having a bad day, they could stop you on the path to labor or capital leverage because of their bad mood.

And if you fail to obtain permission from even one of those links in the chain, you may not ever secure the labor or capital leverage you wanted.

The Pains of Labor Leverage from People Management

If you’re trying to win zero-sum games in business to obtain labor leverage, be careful what you wish for.

Ask almost anyone who has tried to scale a service-providing business, and they will likely tell you it was/is the hardest thing they’ve ever tried.

Why is this?

Scaling labor-intensive processes through people management is spectacularly difficult because human beings are:

  • inconsistent,
  • irrational,
  • emotional,
  • and unpredictable.

Of course, to build a billion-dollar business, you’ll likely need to excel in people management (and zero-sum games).

But do you really want to build a billion-dollar business?

At the extreme opposite of people-management focused companies, there are plenty of solo-entrepreneurs or solopreneurs who use their own code, media, capital, and labor to run a profitable and successful business.

In fact, Elaine Pofeldt wrote a book on just this subject called The Million Dollar One Person Business that Tim Ferriss has called the case study version of the Four Hour Work Week.

I’ll discuss this more later.

For now, let’s talk about positive-sum games, my favorite part of game theory.

Positive-Sum Games

I mentioned above that according to game theory, the total of gains and losses in a positive-sum game is greater than zero.

I think it’s important to remember that there are still losses in positive-sum games.

It’s just that the gains are greater than the losses.

If zero-sum games determine how to distribute a fixed amount pie, positive-sum games are about how to make the pie bigger.

The internet illustrates well the positive-sum nature of competition possible according to game theory.

Though some businesses certainly took a hit or went out of business as a result of the internet, hardly anyone could claim it had net negative on global business.

You can also find many micro examples of positive-sum games within the macro example of the internet.

For instance, mobile app stores have positive-sum characteristics in that they created a new market along with new opportunities to create value.

Some apps inevitably lost to other apps, but the app store itself provided a significant net positive of value added and wealth generated in global business.

The internet and mobile app stores also illustrate the creation of something new as characteristic common to positive-sum games.

Peter Thiel on Positive-Sum Games in Business

PayPal co-founder and venture capitalist, Peter Thiel, explores game theory in business in his book Zero to One.

Going from zero (having nothing) to one (having something) means you create a brand new or effectively new product or service (at least 10x better than its predecessor).

While many companies focus on incremental improvements taking their product from one to two, Thiel encourages people and companies to pursue “zero to one” opportunities.

The net positive from creating brand new businesses and value makes the world a better place.

And he believes more entrepreneurs should pursue positive-sum business opportunities that make the world better instead of the current path.

Most high-performing students today get stuck in the zero-sum business competition of management consulting or investment banking with predictably high salaries but low global benefit.

Positive Sum Games and Permissionless Leverage

If you don’t have the skills, personality type, or fortune to win zero-sum games, don’t worry.

You can still win at business and even pursue positive-sum games via the permissionless forms of leverage mentioned by Naval Ravikant.

Code and media leverage require minimal if any success with zero-sum games.

This is why YouTubers who take advantage of media leverage don’t need a particular degree to succeed.

This is also why there are plenty college dropouts or others with minimal status who have created fortunes from code.

Code and media are less exploited forms of leverage because they haven’t been around as long as labor and capital.

Many people don’t understand code and media leverage as well as capital and labor leverage, and thus they often credit success in these areas to luck.

Although code and media leverage aren’t well understood, they are the most interesting forms of leverage to me.

Code and Media Leverage Benefits

Today’s most profitable businesses are those in which you sell a fixed amount of work product, say a piece of software or hit recording, millions and millions of times at very low marginal cost.

Seth Klarman, CEO and portfolio manager of The Baupost Group, a hedge fund with $27 billion AUM

Seth Klarman is a hero in the world of high finance because of his investment success, and his authoring of the cult classic book, Margin of Safety.

Klarman is also an example of someone who has leveraged capital and labor (by winning zero-sum games) to build his wealth.

However, he acknowledges in the quote above that the most profitable businesses leverage code and/or media, the forms of leverage that don’t require winning zero-sum games.

Why is this?

Code and media can be reproduced or consumed at very low marginal costs.

Low marginal costs enable those who leverage code or media to capture more of the value they create in the form of profits.

Thiel points out an example of the economies of scale uniquely available to code-based (and media-based) leverage in Zero to One.

He notes that in 2012, Google’s revenue was $50 billion, and the entire airline industry’s revenue was $160 billion.

But Google kept 21% of those revenues as profits that year, more than 100 times the airline industry’s profit margin, because of code-based leverage’s superior economies of scale and low marginal cost.

Low marginal costs and effective economies of scale enable those who leverage code or media to create highly efficient businesses with great margins.

Excellent margins enable you to create spectacularly profitable (or lean) companies.

In fact, Ravikant notes that the unicorn billion-dollar companies of today use the absolute minimum required amount of labor and capital to fully exploit media and code.

As I mentioned above, you can also choose to leverage code and media to create a super lean, one-man business (and anything in between).

Though of course, this isn’t for everyone, I think it’s important to bring up as an option for those who may be interested in it.

How to Apply Game Theory in Business

Ultimately game theory in business is just that, a theory.

Applying theories to the real world can be messy and difficult.

However, I hope this article has given you food for thought as you seek to understand and apply this theory in your own life.

This research has enabled me to realize that, just because I don’t thrive in zero-sum games doesn’t mean I can’t be successful in business.

Rather, it means I need to seek to leverage media and code and rely less on labor and capital to succeed.

This conclusion is consistent with my skills and desires.

But you may excel in zero-sum games.

If so, labor and capital could be the best forms of leverage for you in business.

What do you think about game theory and how it relates to business?

Let me know in the comments.

Categories
Wealth

How to Brainstorm Income Opportunities for Skills You Already Have

Introduction

I remember chatting about after school career prospects with a friend at USC my senior year.

As a French major, business minor, I didn’t feel confident about my career prospects.

I remember this friend asking me, “Well, what are your skills?”

“Skills?” I thought.

This was the first time I really considered what skills I had that a company could monetize.

At the time, my conclusion was that I didn’t have any monetizable skills.

I know now this conclusion was wrong.

But I’m afraid many people underestimate their skills.

For those who do, I hope this post provides you with the tools to better brainstorm what skills you have and how you might monetize them.

Step 1: Create a list of any and all skills you have. (Don’t filter in this part of the process.)

This step is harder for some people than it might seem.

Like I said above, after 4 years at a top-25 American university, I seriously thought I didn’t have any monetizable skills.

And although I may have chosen one of the least practical degrees possible, I had skills I could monetize even with my impractical degree.

But we are often most blind to our own skills and strengths (and weaknesses).

For this exercise, I encourage you to think about skills as something that you’re moderately good at. 

Many people think that you have to be in the top 10%, 1%, or .01% to consider something a skill.

Instead I recommend considering something a skill if you think you might be in the top 50%.

In other words, if you choose 100 random people and compare your skill level to theirs, are you likely better than half of them at this skill?

If so, it’s a skill you definitely want to list in this brainstorming process.

Lastly, though I share some thoughts about monetization in the section below, I recommend not focusing on monetization in the first step of your brainstorm process.

It’s better to come up with an exhaustive list of your skills and filter them for monetization potential after than to rule something out early in the process that may actually have potential.

An Example of My Skill-Sets Immediately After College

Thankfully, I’ve gained several skills since entering the workforce.

But this is how I thought about my skills shortly after college before gaining several skills from the work place.

Hopefully my skill break-down sheds light on your own situation.

If you’re having a lot of trouble with the brainstorming process, you might consider Noah Kagan’s tactic.

Noah was employee #30 at Facebook and #4 at the personal finance web app, Mint.

He’s also had incredible success building his own company, Sumo.

Noah recommends asking friends and family what they think your skills are or what they imagine you doing professionally.

Noah says that what’s difficult for you to determine is often obvious to those who know you best.

Step 2: Think about monetization by grouping similar skills.

Hopefully now you have a handful of your skills in list form ready for classifying.

Why classify or group your skills?

This can give you a better sense of what direction you should take to monetize them.

Start by grouping obvious pairs or closely related skills.

For instance, photography and videography are a natural pair.

Becoming a wedding photographer/videographer is the application that immediately comes to mind as a path to monetization with these two skills.

But there are several commercial paths you could follow with photography and videography.

In my case, my native speaker fluency in English and my conversational capacity in French are a natural pair.

With this duo, I could probably become a French teacher to native English-speaking students.

Or I could become an English teacher to native French speaking students.

I might need to take some web courses, get certifications, build a portfolio of work, and otherwise brush up on them.

And that’s probably true for you as well.

As you think more about skills to monetize, you’ll probably need to do some work on them before you can use them to generate income.

That’s OK. 

Now that you’ve gotten the hang of this step, let’s move on to my favorite exercise in Step three.

Step 3: Consider how to monetize unlikely skill combinations.

Scott Adams, the creator of the hit comic, Dilbert, recommends considering the intersection of two or three of your skills as your skills stack.

Adams says that you are often in the top 1% of that intersection or skill combination. 

For instance, Adams considered himself moderately funny and a decent comic artist.

Combining comedy with his artistic skills to create Dilbert launched his financial success.

Notice that Adams wasn’t in the top 1% of either skill-set, but when combined he had great success.

He says this practice is particularly powerful when you can combine a skill with effective communication.

There are countless examples of public speakers who get paid to talk about their skill-set even when they may not be the best in their field.

The same goes for writers and authors.

Returning to my skill list mentioned above, I could potentially combine my guitalele skills (a guitar, ukulele hybrid) with my interest in videography to create a top guitalele YouTube channel.

The viability of this concept as a business model merits further consideration.

But you can see how Scott Adam’s skill combination process can result in money-making ideas to consider.

Step 4: Determine your focus.

Now is the time to pare down your skill list to those that you want to pursue.

Why?

Because you have limited time and you can only pursue one or two monetization projects at most.

This step is hard for me.

I’ve always wanted to feel free to pursue whatever I want, whenever I want.

But the reality is that, if you don’t focus, you won’t get results.

How do I know?

Because I’ve tried to build many side hustles at once only to burn out.

When you try to do too many things at once, you move a little bit in every direction instead of going far in the right direction.

John Lee Dumas’ advice is to F.O.C.U.S or Focus on One Course Until Successful.

John followed his own advice and recorded a podcast for his (now) hit show, Entrepreneurs On Fire, every single day for 9 months without making a penny.

He continued producing daily content for 2,000 days and now he regularly nets six figures in profit per month!

Warren Buffett’s advice along these lines is to make a list of your top twenty-five priorities, circle the top five, and then never look at or pursue the other twenty until you’ve achieved your top five.

Why?

People tend to overestimate what they can accomplish.

Focusing on five gives you a reality check as to what you may actually be able to accomplish.

If you crush your top five, you can always revisit your list later.

But in your top five, make sure to consider the already existent time commitments in your life.

For instance, if you want to spend time with your family, and you must spend time on a day job, these two already significant time commitments eat into the time available for pursuing monetization side-projects.

My guess is that most will only have time to develop one or two skill sets into viable money makers.

When in doubt, focus on fewer than you think you can accomplish.

Step 5: Stay consistent.

Once you’ve decided which skill(s) you want to monetize, you need to stay focused on monetization for a long time.

How long till you see results from your efforts?

As usual – it depends.

But you can find success stories of people who have made money from the skill you’d like to monetize to get a ballpark estimate for how long it will take.

For instance, many novice coders using the coding website, freecodecamp.org, have gotten job offers in under a year.

More specifically, one of the founders suggests 2 hours of coding a day for nine months minimum before you might see career prospects as a result of your skills.

Whatever results you find regarding timelines till success, remember that your efforts may very well take longer than what you find on the web.

Why?

Most people don’t publish their failures, only their successes.

So for every success story you read or hear, remember there are countless stories of failure that were never told.

Best-selling author and researcher, Angela Duckworth, found that “passion and sustained persistence applied toward long-term achievement, with no particular concern for rewards or recognition along the way,” (how she defines grit) is the leading predictor of success in any endeavor.

Whatever skill you want to monetize, know that consistency, or sustained persistence as Duckworth would say, is a critical component of the grit required for success.

If you have laser-focus but only for a week, it’s unlikely you will see any progress.

But if you focus on monetizing your skills day-in and day-out for years, you will stack the odds of success in your favor.

Conclusion

Like anything in life, results take time.

You find the theme of consistency over a long period of time in nearly every success story.

When bodybuilding.com asked Jeff Seid, the youngest IFBB bodybuilding pro in history, what his secret was, he said it was that he hadn’t missed a workout in over ten years.

If you have the dedication and consistency to improve and monetize your skills over the course of 10+ years, it’s hard to imagine that you won’t succeed in some form.