The key to success lies in doing the work that doesn’t scale.
There’s a great Forbes piece from four years ago that shatters a popular entrepreneurial myth about “passive income.”
Ahh, passive income – the dream hyped by such success stories as Tim Ferris in The 4 Hour Workweek.
The myth of passive income is worth discussing because today I see it everywhere – DC is rife with entrepreneurial Millennials who have their day jobs, then moonlight by working on their side businesses, often encouraged by evening Meetup sessions at hot new co-working spaces like WeWork, 1776, or Cove.
Similarly, I can’t count how many blogs are dedicated to selling the dream of making money online.
There’s nothing wrong with that dream – the problem is I see precious few willing to put in the work.
The Dream of the 4 Hour Week
First – don’t misunderstand. I enjoyed reading The 4 Hour Workweek and highly recommend it as both a fun beach read and for a valuable shift in mindset, provided its lessons aren’t taken as Gospel.
The danger of the book is in its extremes and exaggerations.
For example, a central theme of The 4 Hour Workweek is that founders should strive to automate systems in their business so it could run with minimal oversight by them.
On the one hand, there’s truth to this:
If, after a certain point, the CEO or founder can’t take a vacation without her business grinding to a halt, there’s something wrong.
But The 4 Hour Workweek takes it to the extreme.
The book derives its name from the idea that a highly efficient boss could, as Tim Ferris himself claims to have done, work as little as 4 hours per week – effectively only monitoring and responding to email for just 30 minutes a day – and still rake in the profits as his employees (often, outsourced virtual assistants) tend to the store.
There are two fundamental flaws with this premise.
The first is that if “life hacks” like outsourcing your work privately to virtual assistants were truly effective, employers would long since have either done it themselves and/or demanded each of their employees do so as well.
Put another way, if truly efficient employees could get a full 40-hour week’s worth of efficiencies from just 4 hours, employers would simply demand that everyone implement those strategies all the time – effectively demanding 400 hours of work per 40-hour week.
Further, to the extent that bosses have off-shored American jobs to remote overseas workers, it’s that much more important that domestic employees work to prove themselves indispensable – hard to do on just 4 hours per week.
The Passive Income Fallacy
The Forbes article then details the second flaw – a founder whose primary goal is to scale a business up as quickly as possible for 2-3 years in order to sell it for huge profits is not the person you want running things.
Likewise, any CEO who truly did only 4 hours of work per week would soon be fired by his Board of Directors.
Rather, employees and venture capitalists alike are attracted to vision, energy and execution.
Simply put, passion, not passivity, wins out.
In his piece, Forbes contributor Michael Ellsburg details the four myths about the type of passive income fantasy espoused by books like The 4 Hour Workweek:
- You Can’t Stay Ahead of Competition Passively.
- You Can’t Maintain a Loyal Tribe of Customers Passively.
- You Can’t Lead Great Teams Passively.
- You Can’t Create Meaning, Passion, or Purpose in Your Life Passively.
Do Things That Don’t Scale
So what’s the solution?
Put in the work.
To borrow from Rocky 7 (aka Creed):
“One step at a time. One punch at a time. One round at a time.”
Paul Graham emphasized the need for start-ups to focus on the hard stuff first in his classic 2013 essay “Do Things That Don’t Scale.”
In it, Graham notes that the fabled misquote of Ralph Waldo Emerson — Build a better mousetrap, and the world will beat a path to your door – is wrong.
Rather, even the seemingly most successful start-ups funded by Y Combinator – Square and AirBNB among them – acquired their first customers the old-fashioned way – manually, painstakingly, and one at a time.
“The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.”
Gary Vaynerchuk on Overnight Success
A solid corollary to all of this comes from Gary Vaynerchuk’s screed against “overnight success.”
In it, Vaynerchuk deconstructs the myth of the “overnight success” and the hubris of those who give up on their small business or blog after six months, eight months, even two years or more.
I’ve posted this before, but months later, it remains one of the most inspirational videos I’ve seen:
Say what you want about Gary Vaynerchuk, but the primary point he makes here is it took more than 18 months for WineLibrary TV to take off.
He ultimately filmed 1,000 episodes of it.
1,000 videos – short screenshots of which play in sequence throughout the above video.
Those videos illustrate his words, which conclude with the following:
“There’s no overnight successes. Period. They don’t exist. Leave a comment on YouTube, leave a name. Explain to me, tell me, show me, let me know, show me the overnight success.
Because I’ll show you you, justifying in your brain something that is