The one piece everyone is getting wrong

You got to start with distribution. Before you write the first line of code. Before you write the first tweet. In fact, don't even open your computer until you've figured out how you are going to distribute.

The thing is, everybody is full of advice on how you should find your product market fit almost always starts with "find a problem that is worth solving". Such advice comes in the form of "sell pain killers". I am not saying this advice is wrong, but the framing is wrong. Just because you saw two people complain about the prices of Anthropic and OpenAI, does not mean that you have a great business case on the basis that you create a profitable product that is 10x cheaper. The problem? "Two" is a hint here. If you only know of two cases and have no clue where to consistently find more cases, then it is not a business, it's a favour you did to two people.

And yes, you might still end up accidentally discovering the where to find these people afterwards. But I am telling you, there must be a better way that optimises how you spend your time and increase your chances of success. Don't disregard all the good advice: Scratch your own itch if you must, but before you do, ask yourself "Do I know any people like me"? Truthfully I don't - well, maybe one or two people, but that's exactly the point. I don't know anybody who would be grinding for the 10th year to build his business and who would make great personal sacrifices just to ensure what is right in a high court law suit. In fact, I don't recall a single one telling me "I would do exactly the same". And the point is, while I do intimately know my own thinking, my own pain and my own desires, I do not know a system to line up a row of "people like me".

Let's rewind! Let's start over! And let's start from a place that we know works. If you are an employee, you have a least one craft that you know there is a market for and if you have changed job a few times, you know how to find those people who are in need of your services. But you are not a business owner at that point, but you do know how to do the distribution. Now is it possible that the transition from employment to consultancy is a small one? In my case it was. It was straight forward and it barely felt as a difference except that I started working from home, serving client world wide - a so called remote-worker. And if you like, you can set up a business to do this, so you are now a business owner! A small change in how you operate, but a huge step towards independence. I've done this step and if you are in need of help doing the same for yourself, reach out and I would be happy to help you!

The next is growing: Once your consultancy business reaches a certain MRR, the perceived value of your services is saturated and you need to look at new avenues to grow your business. In my case, the figure is between $20 and $25k. I could probably push it to $30 if I wanted to, but the point is that it is flatlining around this figure and the question becomes how do you push through. My initial strategy was to "help people like me". I argued above why I think that was wrong and now here is what I should do instead: Help people like them. I've worked with many different companies at this point and one thing is clear: If it is a startup, there is nearly always a proof-of-concept or a MVP that needs to be done by yesterday. I know how to find these start ups because this is what I do in my consultancy business. That means, for this segment, I know distribution and do it consistently.

Two question we need to answer: How can I serve them better? And what should be our growth strategy? Let's take them one at a time. Strap in for a bit of theory here:

How can I serve them better? I'd encourage you to brainstorm this question for yourself. In my case, I can think of a couple of different ways, but the most compelling answer comes from the 80/20 rule: If you are not familiar with the 80/20 rule, it states that 80% of your results comes from 20% of your activities. So what if I could cut away 80% of the activities I am doing and sell the 20% activities at half the price. Let's get concrete: If they pay $20k for 100% of the results that I am producing, then following this idea, I would sell the 80% of the results for $10k which is a much better deal for them. But it is for me too: Since this was produced by 20% of the activity it means that focusing on those 20% and repeating them, I could serve 5x the number clients, hence providing a 2.5x multiplier for my company. That's going from $20k to $50k MRR.

What should our strategy be? Quite simply rinse and repeat. The thing is, the 20% will often come from better systems, so as you have one client, you built things that accelerate the work. This could for instance be boiler plates which are reusable in other projects. These will allow you to go 2.5x faster and as you do, you will again identify patterns and create systems that produce another 80/20 scenario again providing you with a 2.5x opportunity. So the entire game becomes, how quickly can you this? Our strategy should be to maximise for this factor, because this is what will increase or capacity for serving better and more efficient.

Why does this matter? The simple answer is exponentials. Start at $1k MRR in a market where you know how to find people that want your services and do this 4 times, you are on $40k MRR. You can't live of that, but its a good start. Regarding the 80/20 rule there some who claim it is 70/30 and some who claim 90/10. For 70/30 you need to do this 9 times to reach $40k MRR. For 90/10, you need 2 - 3 times and, in fact, 3 times would put you right on $125k MRR.

The recipe then is:

• Start with something you do well and where you know how to find clients.
• Recognise the patterns of how you work and identify the 80/20 pattern.
• Once you recognise that, define what does the transformation which requires 20% of the effort to produce 80% of the results look like.
• Take your new offering and test it with clients. Refine it based on feedback

Up until my last client, my MRR was a bit more than $20k. Even with 70/30, as little as 3 cycles will take me to $100k MRR and the way to get there is building agent first software and SaaS. But I am going to relentless discard ideas that does serve this purpose going forward.

In the coming months, I will apply these principles to my own company as I work on taking it to the next level. If this interest you follow for more.