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Finding a Profitable Idea

Lesson 16 from: How to Make Money

Ramit Sethi

Finding a Profitable Idea

Lesson 16 from: How to Make Money

Ramit Sethi

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Lesson Info

16. Finding a Profitable Idea

Lesson Info

Finding a Profitable Idea

Okay, so session to finding a profitable idea now I use this term carefully because what we have fifty percent of people here who are creatives who are not making any money that's not acceptable that's not gonna happen after today, so a profitable idea and profitable clients is what we're going after. All right? That means you're not putting a hundred percent yourmoney back into your business, you actually taking some out? You're living a lifestyle that you want to live and you're slowly increasing that as you go on so most people never get past this point iran I run I think we collect probably thirty or forty thousand survey responses a month very extensive about our data collection here's one we did what's the biggest thing stopping you from starting a side business and the number one thing was I don't know what kind of work to do, I don't even have an idea now some of the people watching don't know what to do others have an idea but it's like semi profitable or they're you know they...

're making decent money, but they want to take it to the next level but it's interesting to know I don't know what kind of work to do I don't have an idea is one of the number one barriers drew when we were talking about your friends? You said I don't have enough time that's actually usually the number two barrier number one is I don't know what to do how many people have ever run a survey like this with your clients? How many people have not yet we expect to walk in there, pitch them on us and why we're so great and have them just hand over a barrel full of money how do you know what to talk to them about? How do you know what to pitch me on if you've never asked me number one question coming up to people's mind why would they tell me why would they even talk to me? We're going to cover that, but you have to add value to them. Frankly, most people want to tell you their problems because so few people actually listen right? If you came up to me, you sever meat, you know, let's, let's just make up a problem workouts skin like I told you I was a skinny guy meet you know, I'm really curious, like I know you've been working out and it's like, I know it's been challenging like for me, I try to lose weight it's interesting for you, I know you've mentioned wanting to gain weight so like, how does that go like, how does it feel or what do you do when you go in the gym and I'm like like I've been wanting to talk about this for years and no one will listen so it's, if it's my number one pain point, I'll talk about it forever. Does everyone agree? If if I if I find out you're number one pain point, I genuinely asked you, you will talk about it to me forever, right? Whether it be back pain or photographers website that doesn't actually drive any business or, uh, guy hiring writers and all the writers suck, you'll talk about that forever, and that is where I collect intelligence. Um what others do is they don't they skipped that step, they start wanting to sell, which is why they think selling a sleazy and they just randomly go from tactic to tactic. Anybody here have the experience of I joined twitter because everybody told me I should I joined facebook cause I told everybody told me I should I got business cards, we got a business license, huh? And nothing's working anybody have that experience? Yeah, what what have we done? What are some of things we've done that just didn't pan out putting out resumes on nice paper, getting on twitter and like hooking it up with everything else um, all sorts of things, what else? What have you done that has not really paid off tactically twitter is like a loaded on that had no strategy I just signed up for it because everyone told you show everyone yeah yeah you got to get on twitter what else I was talking to friends and family trying to get them to recommend and did not work you were talking to friends family trying to get them to join your business trying to get them tio recommend people to me basically network through friends and family are the worst I my friends don't even read my site by the way it's so funny okay, so remember I told you was very emotionally taxing because I started my mike the classes and no one would come and then I started my block and actually none of my friends read it and I was like it really hurt because like this was like I felt like this is something I'm doing my life's work I'm really good at this and just none of them read it you can go back to my two thousand four block posters zero comments, okay? And I'll be like, no, you guys really need to read this and they wouldn't listen I was very overbearing and just like not not good and finally I started getting enough readers and I was like, you know what? Screw you guys I got enough of my own readers but the funny thing is to this day they still don't read it like they literally they're like they know that I have a book, they know that I like this site with all these people reading it and why they think of me as what not remit satay, the guy who understand psychology, business, persuasion, behavioral change, remit satay, the guy who I go and drink beers with that's fine, I understand that now I don't hold it against them. It's fine. One day they may come around if they have a money question or visit one day they may not, but I accepted that in their mind in our relationship I'm there, buddy. I'm like I'm a dude, you know I'm not the guy who wrote I will teach you to be rich for them and they know about it they bought a copy if I haven't read it jackasses but that's fine. All right, so so friends and family are like it's easy to go to them because we think they have such big networks but really that's, not your client. All right, so I love that you said that's really good insight yet what others do is they randomly do all this stuff that we think we should do and people tell us we should do and we don't even know why we're doing we just do it a better approach is a more systematic approach where we say, okay, what are my challenges? Number one I need to understand who are my whore, my customers, what their big key challenges, etcetera. And we make notice these, like, sort of messy things around it there's always going to be mess, even in my sort of customer research that I do, which has become much more sophisticated. Overtime there's a lot of messiness. Okay, I created sixteen versions of my dream job course before we got it right with seventeen people were like, crying, sobbing all kinds of shit before we got it right. And then it was messing. We threw away all these power points and stuff, but we finally moved systematically. I want to teach you how to do that today, okay? So I want to show you some ideas that people have used to show you that you don't have to be the most unique person in the world. Power point designs. How do you think I got these power points? I paid someone. Why? Because they were good at power point, but a lot of people are like, well, I'm good at power point, but I just do that for work. Well, perhaps are there people who want their power points to look good and they'll pay you what's happening right now is like half the people watching us because they're creative they're like your powerpoint suck you need a better power point designer I should pitch you right now but what they don't understand is do you think I really care about going let's? Just pretend that this is eighty percent of perfection you really think I care about going to eighty five percent of perfection? What do you think happens when I think about what do you think would happen if someone pitched me right now read your powerpoint sides are okay, but they could be a lot better. What do you think is going through my head right now? Okay, something smooth purpose that you have for them I don't care it's good enough. I think the slides look great. They could they look better. Yeah, but what else? What else? What? Why would I not want to hire someone insulted? Yeah, I mean, yeah. Okay. That's probably true. What else? That's good, but what else correct? Is it going to help me in some way? And what are the risks with dealing with someone? They may show me like some of their power points. They're beautiful. What are the risks told me if you're working with someone who's trying to take you from eighty percent to eighty five there's a good chance that they're in that circle of the craft and probably will ignore all of the other thing correct that my risk is I have to deal with someone new who's not going to be timely they don't know like but they don't look no my colors in my styles and all kinds of stuff now I have to spend eighty million hours dealing with this person I'm too busy I'll have time why do I care this's serving its purpose let me this is one teeny part of my business but this person because this is their life they think it's this wrong people come to me biggest mistake people make when they pinched I get pinched like hundreds of times a week they pitch me because I teach people how to pitch so they think but the ironic thing is my students don't pitch me because they know better they're like I'm going to just sit and bide my time until I see a pain point and then I'm gonna go in there and get it that's how I hire a lot of people but the unwashed masses as I like to call them those are the people who haven't taken my courses I call them the unwashed masses they they pitch me on the worst pitches in the world let me tell you the number one pitch they give here a meat I noticed that in your e mails by the way my emails are like quite long uh I noticed in your e mails that like there were two typos in there it's really unprofessional and it definitely will decline in resulting decline sales I'm like do you know what the hell you're talking about? I track everything and I know for a fact it doesn't result in decline seals by the way if I have to spelling errors why do I care? Is it worth it for me to hire someone at another body but no they're picking some minor corner of my business without ever understanding what I really care about so other things that people have uses a real students of mine indy with wedding djs notice that's not just a wedding wedding deejay but indy weddings very niche down you're gonna play a different type of music you're going to dress a different type of way right? I have no idea what this would look like I don't go to any weddings but somebody does so that's a good thing making custom collector plush dolls whatever somebody buys it so what is the point here? The point is you don't have to be the most unique person on the block but I would like you to be niche tw down in the wedding djs power point designs is pretty broad what could we do to niche it down to be more specific? Very good what else sending in a particular field verticals yet what else? What else besides or especially zing on using very graphical very exciting very good excellent so there's all kinds of things you could do so let's let's continue moving on here as we get into some of this don't force yourself to get too clever you don't have to be super unique and new you can actually start off at a very sort of standard level that other people are doing if you see competition that's a good thing I want to say that again if you see competition that's a good thing because so many people say that phrase we used earlier uh if oh that guy's already doing and I can't do it wrong you could do it better than him you could do it better than a lot of ways you can get better at your craft which you probably should you can also do this which no one else is doing every creative is sitting around worrying about this and buying these kraft magazines and they're not listening to their clients at all that's how you that's how you can beat your competition who has ten years more experience I'll give you an example uh I heard a book researcher to research my book so when I started writing this it was like um I took this book before this was even a cover I put out a post on my blog's and looking for a book researcher okay so I get a bunch of applicants and some of the africans were professional book researchers they work for big names I ended up hiring a kid out of the way he's a college kid he's still in college and he worked for me and he actually worked for me for free we're gonna talk about this later because I know everybody's really mad about free work et cetera um why did I choose him? It wasn't about the free by the way the money was irrelevant anybody have an idea why would choose him over other professional book researchers good? What else? He's willing to listen to what you wanted he didn't like have a presumption like somebody who has twenty years in the business excellent what else? He was very communicative when I emailed me emily back in like ten minutes he went through some my tests and he was willing to do like like one of the things that I wasn't particularly great out with some of the math in the book not that good at math and he was really good at it so he supported what I needed to fix some of the math numbers he would check my numbers well what? So I ended up hiring him. He continues to work with me now and he now makes a great living okay, he makes a lot of money so he's been instrumental in what we've done the key is he understood my needs, whereas the more experienced people were just like here's my list of things I do take it or leave it, and they actually selected themselves out. Instead, I picked someone who had no functional experience, so even if you have no experience, you can actually beat people with ten years of experience based on listening to your client's needs. Okay, that's, what we're covering today any questions so far? One of the goals for people who don't have an idea is to find a hundred dollar idea, then tune it up teo hundred hours a month, five hundred dollars a month, two thousand dollars a month, etcetera. I covered this extensively in some of my other material on my site. Why do I see a hundred our idea? How many people know someone who came up with this grandiose idea? Like I'm going to be a photographer for bricklayers and they create a web site and a twitter account and business cards and llc, and then nine months later they go out and try to talk to people, and nobody wants to pay for their service. Anybody know somebody like this? Yeah, they've wasted their time, they've wasted their money, they've wasted their opportunity cost why do I say one hundred are idea, I want you to be able to validate this quickly what this means is I don't care if you're if you should let's say your market charges fifty bucks an hour okay let's just say I don't care if you start charging twenty dollars now are you going to get the wrong type of client? Probably are you going to be underselling yourself? Probably but you're gonna get validation from one to three people and once you know the first one might be your mom I don't recommend it but it could be second person's your grandma third person's not a fluke that's a real client now you have validation of the market is willing to pay and yeah, you're under charging in like that but now you have a portfolio now you can tune that up okay? Now we're going to talk a lot about price because I already know people are going crazy room eat you're just trying to depress the wages of the working man blah blah, blah no, I'm not I'm trying to get you clients and validate what you're doing so that you don't spend six months on a feudal idea that would never make money got it okay step one is to get specific, we've talked about ideas and we're gonna go into these ideas now people are like, I'm a web designer well, no, you're not a web designer targeting a photographer has nothing to do with the web designer targeting me someone selling weight loss strategies to ah twenty five year old woman has nothing to do with it uh fifty four year old woman I was at a conference speaking to two hundred it was a two hundred fifty four women in like ten dudes is a great conference and that s o s oh we're talking about some of this idea stuff and I said like what? Your challenge what's your idea and so what do you what do you sell ng and someone said like I'm selling like consulting on love tau women I said okay great so you're helping them with relationships terrific and she I said who's your client she goes what? My client is a woman between the ages of twenty five to fifty for like what can you say that again? Twenty five to fifty four I'm like do you think a twenty five year old woman has anything in common with a fifty four year old woman when it comes to love nothing the words they use, the emotions they feel the things they do are different it was lazy to say twenty five to fifty for another way to put it is let's say you are looking for a shirt you go to nordstrom dot com or whatever and you see this shirt you're like kind of like this you zoom in, you know the image pops up and it's let's just say it's ah let's say you're like a thirty two year old woman okay and you pushed it in large button and you see like a thirty year old woman wearing it she looks good she got a nice skirt on she looks good you say all right and then you click next and all of a sudden you see this sixteen year old girl wearing it just kind of like promiscuous you're like I don't like I don't like how this girl looks she should her shorts too short then you push the next button you see a sixty year old grandmother wearing what's the first thing you do close the window goodbye in a world of infinite choice if something is not made for me I'm gone so when you say to me meet on a web designer I say get to the back of the line the line that I'm going to ignore when you say we meet from looking at what you've been talking about you're really interested in conversion optimization I happen to have some experience I was able to raise conversions two hundred sixty eight percent on four other sites I'd love to talk with you and I think there are four things I'd recommend for you I can give those to you right now if you like let's talk in five minutes okay? So we're going to get specific okay, we're gonna get specific do that in a second we're going to talk about I'm going take your ideas and we're going to get ultra specific, including people on the web to once you have an idea remember how we talked about being comfortable stereotyping people like? I might say, oh, thirty five year old uh mid level executives who work in manhattan is that stereotyping is that gender based sexist? Maybe I don't know I'm going to test it and I have a variety of ways to test your idea now everyone here should be listening carefully because uh so many of us are serving clients that are never going to pay us never so I have people that are like I'm like what your client there like I'm a grant writer I'm like, oh god who's your client nonprofits so I apply a very simple back of the napkin test it's called the pace certainty technique this is one of the things from my own one k program pay certainty ensures that you will be certain you get paid were not that creative and I will teach you the rich and it goes like this simply to questions number one does this client have the ability to pay? Do they actually have money so let's talk about the nonprofit do they pass or fail that test? Shout it out, go ahead say they fail they fail in general were generalizing here you wanted to be all encompassing because it's not politically correct to say that nonprofits really generally don't have money but we're speaking generally we have to necessarily because we were at the back of a napkin level we're not at the specific level so again does a nonprofit do they have the ability to pay not really especially if you're charging a premium price for your service right? All right if you're gonna charge you know one hundred eighty two dollars to write grant writing than maybe they have it but you want to charge a competitive price, right? Six ten twenty thousand dollars do they have money? They have that ability to pay no everyone's really uncomfortable here let's go to the web what's up with this no one is saying no they're like really uncomfortable with this point for it they need the results of the grant to pay for it we'll talk about that but I disagree with you were talking about ability does a nonprofit I'm generalizing here and I'm really comfortable doing that do they have the ability to pay no unless it's a game correct on you're not going to be pitching the gates foundation what what is the website? I'm super curious about this reaction the majority have been let's say three fails in a row tracy martin says my biggest clients are all nonprofit take a photo says my main client is a nonprofit and they pay me not a lot yeah all right, so look, there are always exceptions but we're generalizing here and I'm really comfortable doing that and you should be too otherwise you're gonna be living in a world where you believe that every single person is different what we discover yesterday we're pretty much all the same with specific exceptions so they failed the first test the ability test of the pacer anti technique what's the second part do they have the willingness to pay correct they fail that as well even if they have the money will they pay in general? No. Why? Why? Why will nonprofits in general not pay correct their passions were caused? They're very used to trading services because their non profits that's fine I'm not coming down on profits I'm simply using them is example of a troublesome client if you're trying to grow your business now let's go to another example let's say that I'm a personal stylist okay? And I want to pick let's let's say as I pick up my pocket square let's say that I'm a personal stylist and I have three potential clients I could go too. I want us to apply the paste on t technique to these clients um so I help men look better wearing better close okay um client number one a thirty, thirty five to forty year old executives who live in manhattan do they pass the ability test? Did they pass the willingness test? Why why are they willing to pay? They're upwardly mobile they live in a really expensive city their salaries got to match that and what? Okay, so that's the ability part but why would let's say I'm thirty six year old executive in manhattan? Why would I be willing to pay for stylist? You wanna climb status and I want to look good at work right? Because that helps me go up pass well done um twenty year old college student fail on all accounts super interesting so they don't have the ability and have any money they don't have the willingness because why they were like free t shirts from google right now sixty five year old retiree past ability test yes yeah willing this test correct he's like been married for forty years he doesn't care what he looks like he's really overweight you see that complexity this this is a very simple on the surface technique but it immediately eliminates seventy percent of the people that you've even been thinking about let's just take a second here and pause. I want everyone to think about how they can apply this to their own clients and what surprises you about the pacer into technique we're going take thirty seconds we'll start off here in studio how does this surprise you and how could you apply this I'm just really surprised so I have a massage therapy practice and it's primarily women twenty eight to thirty five who are going through a career transformations job transformations figure out what they wouldn't do with their life and they have the ability to pay sometimes some but not as much willingness to pay and I'm realizing the clients actually do are more of my late thirties earlier like wise national uh there because they know what they want they value changing growth and they value investing in themselves love it love it. Thank you for that comment what else? Let's go to the web as well anybody here in studio okay let's go we got online just yeah yeah yesterday my wife uh company were targeting uh women young mothers early thirties they have the willingness to because they want their children to look cute and it's it's it's chief twenty five boxes is that sheep? I think so. Good. Okay, good. Do you know that that's cheap? Have you talked to them for the quality? Yeah, it is uh that's not you just answered in your own answer that's about you have you sold these hats successfully so far? Okay. And it's coming along well and you've been have you been talking to your customers about why they buy and why they dont know? Okay, so you'll discover a lot more there but just a quick little trap I wanted to correct you on I said is that cheap? Yes really for the quality but does anyone ever wake up in the morning and say I want a high quality hat no never what do they say they want a cute hat right? Okay. All right. So so if I were going message on that I certainly would never put high quality because nobody cares but cute you know whatever you have to figure out how to do apparel market very good let's go to the web. All right, we've got jubilee who says uh I'm a bankruptcy attorney hi willingness to pay no ability to pay new line of work for me. Well, that's that's very interesting I never encountered that. Um I don't know how bankruptcy attorneys actually charge uh but if I mean he's a bankruptcy attorney he must have done some homework on this after going to law school I'm not I'm not afraid I'm not qualified to answer that one. What else is interesting? We've got ryan miller saying you'll be surprised will pay. I find that a lot of single moms will gladly pay for personal training even if it's a financial sacrifice for them because they care about looking good on being fit even though on first glance I would say they don't have the ability they're willing to cut out entertainment to be super interesting women fitness health is like a whole lot I could talk for two days about that, but yes, that's very good. What else? These are very interesting comments we've got sharon apple is saying festivals can often pay musicians, but clubs not so much. Okay, so what if we learn from this? We've learned is that many of us are just focusing haphazardly on anyone, and we don't even apply a back of the napkin technique. This is just like the simplest technique you'll find in some of my own one k material, but it actually helps you cut down the people that you're talking to and focus on the people who you actually care about. Remember that diagram a couple of slides ago with all the haphazard stuff and the systematic stuff. This is what we're working on getting more systematic. So if you if you are watching and you have no idea what to do, what you want to earn more money, you come up with a list of ten ideas, then you think about who's, my ideal client profile, thirty five year old executive, twenty six year old single woman whatever again, syria typing is ok at this level, you apply the pacer into technique, cut some of those people out now we're gonna go deeper.

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5 Resumes That Win
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Ratings and Reviews


This course changed my life. After watching Ramit on Creative Live, I bought his book, then signed up for his newsletter, then bought several of his classes. You could say I am officially drinking the Ramit Kool-aid now, but I'll tell you why... His stuff works. You have to trust the system, but I've been able to create a rich life for myself by my definition of rich and I am so happy. It takes work, but I am so grateful I found Ramit in my 20s so I can truly enjoy my 30s over the next decade. Without this course, I would still be complaining that people don't want to hire me because my prices are too high and whining that I am not valued, when in reality, the problem was me. Thanks Ramit for always speaking the hard truths and giving people wake-up calls to get their act together and live the life they want... It's possible!

Adrian Farr

Ramit is a huge inspiration, he is not just a 'been there and made loads of money' kind of guy, he is a 'been there and made loads of money, and here's how I did it' kind of guy! Ramit really gets down to helping you understand not only how to make money but also how to save it too. I am looking forward to reading his book and plan to implement a lot of his systems into my own life.


I have taken a few business classes for creatives online, but this is by far the most comprehensive, most practical course of all. Especially for someone like me who loves Ramit's work but has not made a decision to commit to his full courses, this is a great introduction for what he can offer. He pushes you to think outside the box and see all the possibilities that we can have in a very clear, logical way. If you are unsure which class to take to learn about business, this is all you need.

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