Millionaire Fastlane Book Review by M.J. Demarco
This book is one of the best books on entrepreneurship in which the author sets out five commandments to appear on the millionaire Fastlane. According to the author, as long as the enterprise does not comply with the five commandments, it will not be destined to succeed. These commandments are:
Needs, Entry, Control, Scale and Time Command (NECST).
Millionaires affect the lives of millions of people by adding values to their lives and are therefore millionaires. If the market does not care about your product or service, it is not going to add value to the market and it is a failed business before it takes off. Thus, each company must first determine whether there is a need for the service or product that your company will provide or not.
So, we saw test products sold for free to test the water. All they do is try to determine if there is a demand or not.
People often start businesses with the wrong reasons. They are good at something and very skilled and start a business on it. But if the market doesn't care, it will fail because the market is a selfish place. No matter what you want, what you have, your well-being. All that interests him is what it is for them. If it adds value to their life, they will buy it otherwise. So, this is a big eye opener for me and could be for so many aspiring entrepreneurs.
It is the second commandment of a successful business. If the barrier to entry is very easy, it means that millions of people will do the same and that you will not have the opportunity to grow your business, but rather to lower the price and compete these millions. Usually the price war hurts all parties. For example, if creating a website and writing a blog and generating income is your business, there is not enough barrier to entry unless you are trying to add something of additional value to the market that no one else has added yet. One example that the author repeatedly gives is when he thought of starting a Limo business. He found that he had failed both the first and the second commandments. There was no need for an additional limousine business and the barrier was very low to enter this business.
If you have no control over your business and you have given all authority to another party, you are doomed to failure.
Many entrepreneurs start a business and then hire a CEO or CFO to take full control of operations or finances. They know nothing about what's going on and this is the recipe for failure. Especially when entrepreneurs do not have basic financial knowledge like what a mortgage is, how to calculate simple interest but hire an expert to help them make decisions. Since they cannot reconsider the decisions made by their advisers themselves, there is a good chance that they will screw up and the entrepreneur will have to bear the loss.
One of the examples given in the book on the benefits of corporate control is as follows. If you are a doctor working in a private healthcare establishment, it is natural to think that you are on the fast track because your scale (price / unit) is large and this will increase the net profit and therefore the wealth. However, control of the private healthcare facility is not held by the doctors but by the owner. It is therefore he who is on the fast track and not the doctor who depends on its intrinsic value to increase wealth.
The author gives an example of a hamburger stand in front of a supermarket. No matter how much the owner tries, he cannot grow his business and reach customers outside the supermarket. Thus, this business violates the command of the ladder. But an online store that sells products on the Internet has an unlimited number of customers and therefore has the ability to grow its business to an unlimited level. However, if the entrepreneur can create a franchise in any hamburger shop, he has the capacity to grow and will be on the fast track.
The author gives an example of a quote from billionaire Mark Cuban who said that it only takes one business to succeed. It is therefore important that we undertake projects that can be extended. In terms of baseball, swing for home runs and not for singles. If you decide to play singles, you have to repeat the effort several times.
The Fastlane wealth equation is:
Wealth = net profit + asset value
Net profit = Units sold * Unit profit
Leverage is created by the units sold. If you sell burgers on the supermarket grounds, you are limiting leverage and therefore you are on the speed limit of 15 mph. In addition, you cannot increase the price of the hamburger, so the unit profit cannot also be controlled.
So either you must be able to reach millions of people to increase the amount of units sold, or sell at a very high price to very wealthy customers to increase the value of unit profits.
Time is the scarcest resource we have. Most people spend money sparingly and free time. According to the author, this is exactly the wrong path to wealth. Time is limited and money is plentiful. The only difference between people who succeed and those who fail is the way they spend their time. The former appreciate every moment of their life and spend it to increase their self-esteem. They waste it satisfying their immediate desires like watching TV series, playing games, etc. for a long time, etc.
According to the author, fastlane is not an easy way, but it should be a quick way to gain wealth.
As a fastlaner, our goal should be to automate the journey. If you have a business that requires you to dedicate every moment of your life at all times and always trade time for money, this is a hidden job as a business. It is a money tree that never grows.
It is normal to work more than 80 hours per week in the start-up phase of a business, but it is not normal to work like this for the rest of life, which is normal for most people who work normally. One of the famous quotes from the book, which is often used outside, relates to how most people define themselves as normal. The normal thing is to wake up at 6 am, fight traffic, work 8 am or 8 am slave Monday through Friday, save 10% and repeat for 50 years. It is normal to believe that the stock market will make us rich and fast and that a bigger house will make us happy. The definition of normal is corrupted by society and we are conditioned to believe it. In short, according to the author, normal is modern slavery and that is why only a few have the courage and the intelligence to get out of normality and lead on the path fast from a millionaire.