Business Rules of Thumb
Ben Casnocha, entrepreneur, author, and all-around cool guy, just launched a wiki called Business Rules of Thumb, which is based on a 1987 book by Seth Godin and Chip Conley.
According to Wikipedia, a “rule of thumb” is a principle with broad application that is quickly understood, easily used, and provides a practical method yielding approximate results. Good rules of thumb can be pretty handy every now and again, so I’m glad Ben launched this site.
After some thought, here are a few I created:
At least 85% of your job is effective communication with the people you work with. Objectives, plans, and ideas are worthless unless everyone involved understands them well enough to take action. - Josh Kaufman
Return on Invested Time (ROIT) is more important than simple monetary return on investment (ROI). Money is plentiful; time is not. - Josh Kaufman
The best businesses in the world focus their time and energy on creating, not competing. - Josh Kaufman
If your ad is not interesting, it’s irrelevant. - Josh Kaufman
Great investors are observant and patient. You are far less observant and patient than you think you are. - Josh Kaufman
You often learn the most from what doesn’t go well. From this perspective, temporary failure can be of great value, and all failures are temporary. - Josh Kaufman
Here are a few from people I respect and admire:
Nobody spends someone else’s money as wisely as he spends his own. - Milton Friedman
Money often costs too much. - Ralph Waldo Emerson
The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. - Peter Drucker
Good product development is about working to keep the sharp edges instead of smoothing them over. Create a product some people love, not something no one hates. - Kathy Sierra
Prototyping is valuable. Once you’ve prototyped your idea, you don’t have to persuade people to like it - they can judge it themselves. - Seth Godin
Have any personal business rules of thumb? Add them to the wiki, then post them in the comments below.
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4 Comments, Comment or Ping
Ben Casnocha
Great ones! Thanks!
Mar 7th, 2007
Gannon Beck
One from me:
Either passion or discipline will get you out of bed in the morning. The latter is more easily exhausted than the former so choose your vocation wisely
Mar 8th, 2007
Cypher
Hello Josh.
Seems we had the same reading more or less at the same time :
http://personalmba.com/forums/discussion/411/business-rules-of-thumb/#Item_0
Mar 13th, 2007
Sean Murphy
I was particularly impressed by your “return on time” observation: when we work with startup teams we build spreadsheets to calculate the cost of outcomes in time (man-hours) in preference to dollars, since hours arrive and depart on a fixed schedule and are far less fungible.
Another good book full of rules of thumb for entrepreneurs is “A Goal is a Dream with a Deadline” by Leo Helzel
http://www.amazon.com/Goal-Dream-Deadline-Extraordinary-Entrepreneurs/dp/0070282625/
Apr 8th, 2007