8 Rules to Turn $11,558 into $84 million: Learning from "Paranormal Activity"

Last Updated Jun 2, 2011 3:10 PM EDT

Two friends sit together at a small wood table in a crowded coffee shop. A waiter carrying a tray with steaming mugs whisks by their table. We pick up in mid-conversation.


Man, this economy sucks. Work is so slow. I'm just glad I have a job right now.


I know. It's crazy. Hey, I wanted to talk to you about something. I've got this idea for a movie that I wanted to run by you.

A look of concern comes over Mike's face. David glances around the crowded room, and then leans in and whispers to Mike.


Okay Spielberg! That sounds pretty cool, but get real. You don't know anything about making a movie, and in case you didn't realize it, you have a job. When would you have the time to make a movie?


Yea, I know. But I have a really good feeling about this. I think I could do it and I think it would be a lot of fun.


Oh, you know what sounds like fun, let's do Vegas this weekend. Try to get Friday off so we can get out of here Thursday after work.

David hesitates. His mind is spinning as he tries to evaluate all his options. He slumps back in his chair, sips the whipped cream from his mocha.


Yea. Okay. We can do Vegas.

Life comes down to the decisions you make. Oren Peli was faced with a decision similar to David's. Fortunately for Oren, he decided to take a risk. Even though he didn't live in Hollywood, had nothing more than an idea, and was working as a videogame programmer, he decided to make a little movie.

You can watch Oren's movie if you'd like. It's not on YouTube though. If you want to see Oren's film, check your local megaplex.

Oren's film is called Paranormal Activity. It's been called "One of the scariest movies of all time," but the most shocking thing about this movie doesn't happen on the screen. Nope, the most shocking thing about this film is that it cost $11,558 to make and it has grossed over $84 million. I'm writing this late at night, but that is not a typo. If I tried to figure out the return on this film, I think my trusty HP 12C calculator would start smoking.

I bet you've got an idea. Maybe not for a movie, but you've got an idea for something. A blog? A book? An invention? A product? You've probably had it for some time. You think about it often, especially after a tough day at work. You cling to it, fantasizing that someday you'll get around to it.

I know what you're thinking . . . "Sure, I've got an idea, but I'm not Oren." You're not Oren, but you can learn from what he's done. Follow these rules:

  1. No excuses. There are always a million and one reasons why now is not the right time. The truth is it will NEVER be the right time. The stars will never align and you won't get a sign from heaven. There will always be a reason why it doesn't make sense to do it, but now is always a good time to create something in your other 8 hours.
  2. Find cheap help. Oren held open casting calls in LA and found two unknowns to star in his film. You too can find great talent and they don't have to cost a lot. Sell them on the idea. Inspire them. Get them involved and give them some ownership.
  3. Be flexible. Oren had a rough idea for the plot, but didn't get bogged down in the details of a script. In fact, he didn't have a script. When it came time to shoot the film, he told the actors to improvise. Don't get so caught up planning and strategizing that you never actually do anything. Sometimes you have to get out there and see what happens. Make mistakes; adapt; repeat.
  4. Ownership is everything. When you can take some money off the table, do it, but always keep your upside protected. Oren sold the film for $350,000. By itself, that would be a nice return, but Oren also gets to share in the profits. Unless you're getting the offer of a lifetime, try to keep some ownership.
  5. Get a cheerleader. The life of a entrepreneur can get lonely and depressing. That's why it's so important to get a cheerleader or two on your side. Oren got Steven Spielberg. While you may not get someone like this to back your idea, the goal is to get someone who believes in you and what you're doing. Get them to make calls on your behalf, to open their Rolodex, and to give you advice.
  6. Open to feedback. Spielberg loved Oren's film, but he thought the ending needed a bigger kick. Even though this film was Oren's baby, he followed the advice. You don't have all the answers. At some point you need to take advice from others. There's a fine line, though. Don't take advice from someone unless you really think they know what they're talking about. Time and time again I've seen entrepreneurs take advice from people they didn't like or respect, but because they were unsure, they followed it.
  7. Use other people's money. It's important to have some skin in the game, but whenever possible, use other people's money. This protects you in case things don't go as planned. That ending Oren had to reshoot? Rather than spend more of his own money, he took $4,000 from Paramount (the film's distributor) and reshot it.
  8. Know your audience. Paranormal Activity didn't initially go toe-to-toe with the big budget horror flicks. Instead, they capitalized on their tech-savvy audience and launched a limited release in just 13 college towns. They then provided the audience with tools to spread the word. Focus on your market. Can they become your cheerleaders? What tools can you give them to help them spread the message?
One of the decisions you face every day is what to do with your other 8 hours. Do you waste them or do you invest them. Do you take a chance on something or do you look for excuses. Don't blow a big opportunity like David. Be like Oren.

Life starts at 5:00pm. Do something with your other 8 hours.

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    Robert Pagliarini is obsessed with inspiring others to create and empowering them to live life to the fullest by radically changing the way they invest their time and energy. He is the founder of Richer Life, a community of passionate people who want to learn and achieve more in life and at work. He is a Certified Financial Planner and the president of Pacifica Wealth Advisors, a boutique wealth management firm serving sudden wealth recipients and affluent individuals. He has appeared as a financial expert on 20/20, Good Morning America, Dr. Phil, Dr. Drew's Lifechangers and many others.