SCREENSHOT: Build A Business That Scales

In: Education By: Brian Armstrong

26 Sep 2009

It’s inspiring to check out your Google Analytics stats sometimes. Things go up and down naturally a bit each month, but as long as you’re helping more people over time then it will be hard not to be successful.

According to Google, over 33,000 people used something that I built last month. That’s a drop in the bucket compared to many sites online but for me it still feels pretty good. It’s way more than I could have talked to in person, for example.

Remember, the only way to build wealth is to help other people. If you want to earn more you have to either:

provide something of greater value
provide it to more people

Most people focus on #1 – for example, a doctor earns more than a barber. When you need a heart transplant you really need it, whereas a haircut can wait. There is almost no upper limit on the amount you’d be willing to pay to get a heart transplant done right (after all, what use is your money if you aren’t around to spend it). But a botched haircut isn’t going to hurt much other than your social life for a few weeks. The principle of scarcity is also at work here. There are plenty of people qualified to cut hair but fewer who are qualified to perform heart surgery. You could say there is a higher barrier to entry into that market (medical school, intelligence, etc). So clearly, one way to earn more is to provide something of great value that people can’t get anywhere else.

But I think it’s a mistake to focus only on #1. You miss out on scale. Even if what you’re providing is 100 times more valuable, you’re limited in that you can only help a fixed number of people in a day (indeed, a doctor and a barber see about the same number of people in a day). Technology is the key that allows you to scale. It allows you to help not hundreds, but thousands or millions of times more people. Now we’re not talking doctor rich, we’re talking Bill Gates rich. Technology lets you build a water wheel instead of carrying buckets.

Even if you are helping each individual person less, scale makes up for it. Each of the 33,000 people who came to my websites in the last month probably only got a little bit of help (nothing like the value of a heart transplant). But if next month 50,000 people used it or 50 million, it wouldn’t take much more of my time and I would have drastically increased the amount of value I contributed to the world. In other words, it scales.

There have been lots of technologies over the years that let people scale, and some of them still work. Writing a book scales (you don’t have to sit and tell it to each person, they can read it on their own). Having a television program scales (whether 10 or 10 million people watch it doesn’t change what you do). But I think technology in the modern sense (specifically software and the internet) is perhaps the best one around today to get rich. It’s probably the one with the biggest untapped potential because it’s the newest and still evolving.

So see if you can build something that helps people AND is scalable. It’s definitely more work up front to do that. In the beginning maybe nobody will use it and you could have earned more giving haircuts. But in the long run if you keep growing the number of people you help each month, then people will find a way to compensate you for it (whether it’s flat out paying you, or clicking some ads, or whatever). If there’s no limit on the number of people you can help then there’s no limit on how much you can earn.

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12 Responses

Gordie | LifestyleDesign4U.com

September 26th, 2009 at 11:03 pm

And so we have more opportunities than ever with the Internet to build scalable businesses. That’s why blogging is so big.

Brian Armstrong

September 27th, 2009 at 4:20 am

Yep, blogging is a great one for that too. It has other benefits I like as well such as building your career and a permission asset.

Alan

September 27th, 2009 at 9:42 pm

good points
I’m going to buy Breaking Free even though I have it in a pdf file.
If I read a lot of pdf files, I would buy an e-book reader.

Brian Armstrong

September 28th, 2009 at 1:40 am

Thanks for the kind words Alan, I think you’ll enjoy it!

Daniel

September 28th, 2009 at 5:00 am

Well said Brian, if you help enough people they will eventually return the favour. For example if the info you provide on this site helps enough people I can see you making it big in the near future.

Keep on going with this site and your other projects.

Stay blessed.

Brian Armstrong

September 29th, 2009 at 2:51 pm

Thanks Daniel, I think you’re right. This site isn’t a particularly big money maker, but I think it’s valuable just in that when I launch a new product I have some people who are willing to help me try it out and spread the word. Thanks for the kind words!

bobby

September 28th, 2009 at 1:56 pm

Great post.

When you take the time initially to think about and lay a proper foundation for your business, you’ll be able to handle that rush of traffic without all the stress.

Brian Armstrong

September 29th, 2009 at 2:52 pm

Yep good point, most people are trying to make sure they can pay rent this money. When you start working on projects that will pay off 5 or 10 years down the line that’s when they REALLY pay off.

College Town Menus (CTM)

September 29th, 2009 at 12:49 am

Great article Brian. I like these mini posts about a small topic, but elaborated on. Your water wheel example before was great, and this one builds on top of it nicely. Scaling is the pinnacle importance to my website, hopefully I can create a nice water dam instead of some small water wheel, haha. Keep it up!

Brian Armstrong

September 29th, 2009 at 2:55 pm

Thanks! Yep, building that water wheel really is much more difficult, which why most people never even attempt it. But if you can get one running, ever little bit helps.

Sometimes it’s easy to get discouraged because the passive income starts trickling in really small amounts. It’s hard to get excited about earning $10 passively in one month, but I really think each dollar of passive income is probably worth 10 times a dollar of earned income. It’s just hard to live on it in the beginning :)

Denzil Fitch

October 3rd, 2009 at 8:20 pm

The Apple iPhone is a product that scales big-time. I just heard a talk by Bob Borchers, who was the marketing genius for Apple when they launched the iPhone.
Borchers’ most surprising comment was that “Being first is not that important.” He said that every basic feature of the iPhone was invented and developed by others. Apple’s skill was to develop prototypes, let people handle them, get feedback, develop more prototypes, etc, until they finally had an “A+” product.
Borchers’ least surprising comment was that Apple’s success is largely due to having a smart”dictator” (Steve Jobs) who can see that a new product under development will never be an “A+” product, and immediately cut it off and move onto something else.
One more interesting comment he made is that Nike corporation lets its test group customers choose all of their products, rather than having some executive decide what the customer should want to buy.

Brian Armstrong

October 5th, 2009 at 10:34 pm

Interesting info…I like the idea of user testing. I think good user interface design is consistently undervalued by most companies and journalists when commenting on the success of a product!

Breaking Free

SCREENSHOT: Build A Business That Scales

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