Entrepreneurial journeys always intrigue me. On my recent short trip to Philadelphia I had the pleasure of having dinner with my aunt and uncle. They broke the news to me that my uncle had recently began to dabble in consulting and potentially creating a digital product. Since I am currently writing a book on how to build a digital product by becoming a consultant first and using the feedback to craft your end product I was immediately excited. We spent a good amount of time discussing his journey. The more we talked the more I was intrigued by the parallels between my own journey into tech and his into antiques.
Step 1: My uncle the technician:
My uncle is an amazing artist and has had a strong passion for taking apart and restoring antiques. He is the type of ultra detailed oriented individual that makes an amazing technician.
Furthermore he has established himself as the 'expert' though talking with him he would disagree, "I just have taken apart enough old antiques and broken enough old stuff that people pay me to help them not break their antiques". This parallels my own sentiment that "I have just taken enough beatings starting startups that companies pay me to help them dodge those same beatings". Neither of us consider ourselves experts, we just have made a lot of mistakes and learned from them.
The problem with being a technician:
Being a technician that specializes in an skillset that is in demand is great. I built Facebook Apps and charged a premium as the Facebook guy. My uncle restored antiquities and charges a rate for his time. We both have a limited amount of time to work our crafts and gets paid dollars per hour. The problem is time doesn't scale.
Lets look at an example: A seller lists a peace for $25,000. The seller knows if they tune up a couple of things they can get it to sell for $35,000 so they pay my uncle $2,000 to tune it up. My uncle, the technician, spends two weeks tuning it up. He then takes his check and moves on to the next job. The seller gets a 5x return on their $2000 investment.
Step 2: Becoming a consultant:
Figure out where the real money is:
When I was making Facebook apps I realized the agencies worked for were marking up my work 20 times using a technique I call the media buy.
In the antiquities game the guys making the real money consistently with the least amount of risk are the brokers and auctioneers. They make their money on a transaction fee. That means as long as people are buying or selling they are making money. It is semi-recession proof as well. In a good economy people making money are looking to buy. In a rough economy people losing money are selling. As long as one party is selling and one party is buying the broker makes their commission.
If the deal is fair: great, the broker makes a percentage.
If the deal is one sided as hell: Either the buyer or the seller gets screwed but the broker makes a profit.
Where does my uncle come into play:
My uncle, who has spent the majority of his life studying and restoring these antiques, knows these antiques better than the buyer, seller, and even the broker. He knows what is fake and what is real. He sets the base price, from there the buyers and sellers may hagel but only for so much. The base price is what really matters.
Realize you are charging for value not time:
As we talked my uncle stated that originally he was uncomfortable charging for something that he would happily do for free. Meaning the advice that he was now charging for(and making a better rate) was something that he would give away before.
This is because advice is tougher to put a value on then your time. Time is easily measured, value is not. Lets look at an example of how to measure value.
A seller lists a peace for $21,000. The buyer, not having spent a lifetime studying antiques, does not know if this is a good price to pay so they employ my uncle. My uncle comes in and sees that the legs have been replaced with a poorly made substitute and the peace has not been taken care of well. My uncle determines objectively the price is more in the neighborhood of $5,000.
This means that he just saved the buyer $16,000. My uncle charges $1000 dollars giving the buyer a 16 times return on their investment. Now that is a solid investment. Incase you were wondering he would have paid a lot more to get my uncle to fix the mess as an hourly technician.
The amount of time my uncle spent analyzing the antique in question was less than four hours. Lets do the math:
Step 1: Hourly Technician
$2000 for 2 weeks comes to a $25/hr
Step 2: Value-based Consultant
$1000 for 4 hours comes to $250/hr
Which would you rather be making?
Stage 3: Shipping a product:
That transition from hourly technician to value based consultant is a huge leap forward but it is only a stepping stone on our journey. He is still limited by the amount of antiques he can appraise. How can he create more value?
Since this website is titled Ship or get off the pot referring to Shipping a product I am inclined to examine how he could create and ship a product.
Find a niche:
I asked my uncle a series of questions that I hoped would lead us to discover a niche:
- What is your favorite type of antique to work with?
- What do you have the most experience working with?
- What have you heard people and potential clients asking about the most?
Through this process I learned that he enjoyed working with furniture created by a specific company owned by two brothers a long time ago(I am at a loss for the name at the moment). Since he enjoyed working with their pieces he had taken many apart throughout the years and learned much about what original pieces look like: quality, craftsmanship, inner working, etc. This was a perfect niche as it was a well renowned type of furniture but few if any books are published specific to their pieces.
Find a medium:
What my uncle has is information, information learned from years of real experience. It would seem an informational product such as an ebook would be perfect. We discussed youtube videos which I think would be a great way to market but difficult to monetize.
Find your customers:
Answering these questions will help him find his niche as far as what info product would most likely sell but the next question is "What medium should he use to market his e-book?".
Admittedly he is great at the face to face but that is tough to scale. So I asked him:
- Where do you go to ask the questions you can not answer? Online? Magazines? Etc?
- Where do your existing customers go to look up info when you are not there to answer their questions?
This is where you need to be. If it is a forum or website I would start by answering questions on there. You can use this to first further establish yourself as an expert and second further focus what your think people will find value in.
NOTE: If you havent guessed this is exactly what I am doing with shiporgetoffthepot.com and this very post
Find your unique value:
To create the product we have to figure out what his key value is. In my opinion his key value is The ability to determine the value and authenticity of an antique. That is what people are buying, not necessarily a book. Everything you write on every page should be teaching your readers this skill. Now the tough part... how to teach?
Break down the process:
I asked my uncle how he determined the value of a peace to which he replied "I just know, I just see it". He did not mean that he had some type of magical precognition. He is more like a great quarterback analysing his options after the ball has been snapped. My uncle has assessed so many antiques in his time that it has become second nature. He sees a peace and immediately begins to break it down, without even realizing he is doing it. I have the same reaction when I see a gymnastics bar routine(I coach high level gymnastics in case I forgot to mention that). I don't have to prepare myself I just start analysing. The tough part is trying to explain how to do this to others, especially first timers.
I suggested he do it out loud and begin to narrate this thought process. I pointed to an old table in the room and asked him to asses it. At first he fumbled with "I just know", then the wheels began to turn. "The first thing I notice is the wood, its cuban. You can't get wood like that anymore". This was exactly what I wanted to know. "Okay so lets build a checklist" I replied.
Build a framework:
If he can create an easy to use framework for identifying and appraising specific pieces that could be extremely valuable for brokers, buyers, and sellers all around the world. By framework I mean a step by step process to do what he does. If you are not familiar with the concept of a mental framework you should check out Talent is Overrated by Geoffrey Colvin. A mental framework is what allows great quarterbacks to make split second decisions and react. Overtime they program their brain to react without pausing to think about what they are doing similar to how my uncle can see the value in a peace without realizing he is even doing it.
You might start by building a checklist or a simple decision tree. Here is an example of how it might look on paper:
Step 1: Identify the materials used
Step 1.1: Is the majority of the body wood/metal/stone:
Step 1.1.1(Wood): Use the following images and description to determine the exact type of wood...(And then he would post pics and descriptions of commonly used wood)
This is the start. Obviously the numbering system is boering, perhaps a graphical decision flow chart might be better suited. Here is a more indepth decision flowchart from an Amazon Web Services product I have been working on that I use to communicate how to troubleshoot server connectivity issues:
There are a million ways to create this framework. The key is it needs to be simple, easy to remember and easy to teach.
Crafting the product:
Since this is a much larger topic than I could possibly cover in one post I will just refer to my primary guide for publishing SOGOTP, the bookAPE: Author, Publisher, Entrepreneur-How to Publish a Book by Guy Kawasaki and my other posts on the subject of publishing.
Marketing the product:
Since we identified earlier where people are asking the questions he can answer, both in the real world and online, he could simply answer their questions politely and conclude the answer with "I hope that answers your question. If you have any further questions please feel free to check out my book... " and link to the product on Amazon(or wherever). Online this will not only drive the person that asks the question to his product but also in the future those that are attempting to google up the answer to the same question.
Additionally there are a million other ways to market this obviously this is just one simple method he can do passively to further establish his credibility and begin to drive traffic.
Hopefully this case study of my uncles progress from being an hourly technician to the more scalable value based consultant finally to the vastly scalable teacher will help you in your own journey. I know it has helped me put my own journey into perspective.