Want to Make a Fast Buck? Don't Start a Business
Capitalism is awesome: An individual can go from poor to incredibly wealthy in an amazingly short period of time.
That's great, but trying to duplicate those breathlessly reported overnight success stories is often futile. Fast bucks are certainly tempting... but slow bucks are better.
Take two friends of mine:
One friend is an opportunist. He loves whatever business is new, emerging, hot, trendy... he calls them "the big thing," as in, "Apps are the next big thing." It's odd he places the article "the" before the words "big thing," though, since he has considered hundreds and actually jumped on a number of "big things" in the 20 years I've known him.
For example, he tried to ride the '80s fitness wave, built a Web design firm that was profitable until business owners realized a simple website didn't have to cost $4,000, ran a mortgage brokerage until, well, you know how that bubble burst, and most recently churned out a number of game apps in a futile effort to be the next Angry Birds.
Today he's licking his wounds and trying to figure out what Web 4.0 will look like, since as he says, "People are already working on Web 3.0... this time I'm going to be way ahead of the curve."
All righty then.
The other friend makes boxes. Not fancy boxes but plain old ordinary cardboard shipping cartons. As far as innovations go he has focused solely on advances his customers needed: Faster turnaround to support lean manufacturing, customized equipment to accommodate a dizzying combination of carton sizes, carton printing techniques that support customer branding, etc. He does the same thing, year after year after year.
About 10 years ago the three of us had dinner. My opportunist friend tried hard to convince my box friend it was time to get out of the packaging business. "Manufacturing is deserting the U.S.," he said. "Every container that arrives from China is like a nail in your business coffin."
"Don't think so," my box friend said. "Every product in those containers eventually gets shipped somewhere in the U.S., and they need my boxes to do it. And don't forget about e-commerce. Every time a shopper buys something online, somebody needs my boxes to ship it."
What is the main difference between my two friends?
One is an opportunist: He boards possibility after possibility, jumping ship when the business gets tough or when another possibility appears to offer brighter prospects.
The other is opportunistic: He stays the basic course but seizes possibilities to improve his products and his service. He never looks for the fast buck... and over time he's made a whole lot of slow bucks.
Since excess profits breed ruinous competition, fast bucks are rarely sustainable. Plus fast bucks suffer from the ever-increasing speed of commoditization, as new ideas and products are quickly copied and the hot and trendy -- and initially highly profitable -- turns into the commonplace. Web design has largely become a commodity. Fitness businesses -- health clubs, products, workouts, etc -- are largely commodities. Apps are commodities. The next "big thing" will become a commodity within months, not years.
What's not a commodity? Reliable products and great service.
Fast bucks may come... but they definitely go. Slow bucks are forever -- or at least as close to forever as is possible.
How do I know? There's another difference between my friends. One friend never offers to pay for dinner.
I'll let you guess which one.
Related:
- Want to Reach the Top? Don't Get This Backwards
- The 7 Most Common Reasons People Fail
- The Most Important Startup Question: Wozniak or Jobs?