Sometimes I feel like its every day that someone comes to me with the opportunity of a lifetime. It will require no capital investment, just a little tiny bit of my time, and will have enormous returns. I (almost) always pass.
But how do you know when to pass up these great chances to become a gazillionaire? I think I’m lucky in that I was jaded against these fantastic opportunities when I was younger. One time in elementary school a kid promised me that he had the other red property on McDonalds monopoly. Since I had the matching red one, it was a shoe-in to win the Dodge Viper. I was already explaining to my mom how I was going to get the Viper and sell it and then invest the money in the stock market. Guess who never produced the final red property?
In college a friend approached me with a GREAT business idea. He had everything planned out, and all I needed to do was build the web site. He offered me a slice of what was going to be this huge pie. I thought it seemed pretty solid so I told him I’d be happy to be involved but I wanted to just be paid for my time instead of taking a percentage. He decided to find someone else to build the site. This weekend I found out they went completely bankrupt.
So whats the point? How do you know?
1) If it’s too good to be true, it is. No one is going to offer you 45% return on your money with ZERO RISK. Unless they’re pushing blow. Maybe you’re ok with that, but assess the risk.
2) How much of your time is it really going to take? If someone offers you 10% of their company for something that will take you 10 minutes, GO FOR IT. Or email me and I will. If on the other hand you size it up and realize it may take 110% of your valuable time, its probably not worth the risk.
3) Use your experience and trust your gut. Maybe you’ll pass up a great opportunity, but the statistics are in your favor for making a good decision. You’ve probably been burned before, put everything you know together and really analyze it.
4) Be skeptical as hell. About everything.
5) Protect your interests. If you’re investing tens or hundreds of thousands of dollars, what is a couple grand to pay a good lawyer to protect you with a iron-clad contract? Same goes with your precious time. GET IT IN WRITING.
Now excuse me while I go buy some stock in this company I just got an email about.
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Good point about paying a fee vs. percentage. Both have their advantages.
Regarding business endeavours I prefer plain old cash for service. If someone is convinced about his business he will regard any help as investment. Here is the hint: would I be convinced I wouldn’t ask for cash.
It’s on old cliche, but I live by if it sounds too good to be true…
Way too true. I have a similar list – but even longer.
Too true. I find often find myself turning down contracts nowadays, whereas at one time, I grabbed anything that came my way. You have to do your research wisely.
And remember, often the companies offering you a great deal aren’t half as big as they say they are. We were approached by some massive national company recently and they only gave us a cellphone number to contact them on – v suspicious.
There is that story in Richest Man in Babylon about taking advantage of opportunities, from those who have experience in managing similar projects and have good business experience.
I think a lot of people don’t know what ddn means…unless they have read this blog for a while.
I can’t count the times I’ve been contacted by someone that wants to “partner” with one of my sites. They always try to sell it as I’m the one coming out way ahead. In reality they usually have struggling or sucky products and need traffic from me or want to piggyback off of what I’ve done.
I never trust anyone that smiles too much.
Being skeptical is one of the best tips you can give to someone.
Time is as well, if your getting a good ROI for minimal time, minimal risk then go for it 100%
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pretty high ? Isn’t that an understatement !
anyone can come out with millions of killer ideas by just talking… actually if we really execute and do it. it doesnt need great idea to succeed. as long as you put in effort to do it… sucky idea or just another normal clone with a little twist is enough to bring you nice reward.
The avatar at the top doesnt seems to indicate who is posting. Visitors could probably thought that it is an image of the post, though frequent readers like us know it is avatar of the poster. Maybe you can have a more obvious signature at end of the post. For this particular post, there is no intro of the poster at the beginning, no signature at the end of the post… except the small Written By: ddn ….
yes. i find that a good way to gauge if your friend can be a potential business partner, is to know about his previous commitment and on top of it, you must know that both of you can trust each other.
actually experience can help in accessing. Our very 1st business venture of our life usually fails. Each time we fail, we learned, gained and have better judgment for next venture.
we need to figure out how to make it more distinguishable when other people post… open to ideas
Probably a bigger avatar?
I don’t want to get blammed for daves bad grammaer =P
I would not generalize when it comes to making investments. I think everyone should take about 5% to 10% of their investment funds or time and take a “long shot” at least once in their life.
Would you invest in a 7-time bankrupt, animator who had a vision? I am sure most will not. That visionary was Walt Disney.
For every success story, there are 2 people who’ll sit at lunch today and shake their head because they didn’t believe the visionary, who went on to find a way to *change the world*.
Think twice before turning away. Always ask “Tell me more about your plan”.
I do. That’s why I am the Rich Sage.
I am also skeptical as a hell, but I think I am really much skeptical in some cases. I should find a balance in it
there’s always spam …
been there done that. great info to remember, sometimes its easy to forget when someone is really enthusiastic about their idea that you need to follow the rules. I am sure many, including my self, have been burnt because they were not thinking straight.
I got 144% back on my investment of $10,000 a few years ago when I got tangled up in the now federal investigation that was 12dailypro.com.
I got out just in time.
A friend of mine wanted to open an Internet cafe. I quickly showed my disinterested because I had seen the places that serve coffee and try to rent out Internet and just thought it was dumb since coffee shops were getting WiFi anyway. I wasn’t aware it was more like an Internet arcade instead. The place is always packed and he’s raking in the dough. DOH!
So true, if the concept can work and you don’t have to invest your life it’s a good opportunity!
Been there, done that myself – more times then I would like to admit
I completely agree. You have to have a cut off point where you need to pull out of the investment…you can’t go broke on something that “might” be a good thing.
I am “cautious” but open when I hear new information. I will research a subject as much as possible before I take any action. If there is a sense of “hurry up” then I will grab my wallet and go the other way. In life you have to know how to “eat fish” while spitting out the bones!!!!!
Dillsmack sad because stupid commenter thought Shoe wrote the post.
Awwww . . . where is your sense of adventure? Don’t you want to show your true altruism? BTW, I have this great plan for a new website that I’m dying to show you.
I’ve had a lot of trouble with this so thanks for the advice. Seems like every day there’s a new “wonder program” that will make me 100k in a year. I just focus and tell myself to pass them by. Thanks again
Brian
It’s true – money can make people do weird things. Contracts are always good.
I think it depends on whether you know the person too. If they have a great business plan, make sure you can deal with working with them.
Im always up for anything..i figure at the worse i will learn out from it. Although 9.9 out of 10 times the other party is just excited and has no follow through. So what i do is get involved but make sure they are not trying to make me do everything
If its to good to be true….it is. Unless its youtube.
GOOG
Yes, you develop your business acumen when you’ve been an online entrepreneur for a while. Gladwell explains all this fairly well in his book – blink.
“1) If it’s too good to be true, it is. No one is going to offer you 45% return on your money with ZERO RISK. Unless they’re pushing blow. Maybe you’re ok with that, but assess the risk.” – Blow isn’t Zero Risk… get your money back dude.
Hopefully you don’t turn down an opportunity like youtube….
Id put the returns on selling blow alot higher than 45%.
Of course selling blow has pretty high risks
I also have to continually pass up the 25 “opportunities of a lifetime” that come into my mind everyday, or I accidentaly discover through keyword research to work on just one. Its hard…
Yo Dillsmack I have a great project you need to hear about. (just fucking with you) LOL
I only seem to get the crazy family members who think they can just give me the idea and I’ll do all the work. Most have no idea how much money and time is involved.
Great tips Jeremy. Especially the second point.
I agree. If the project requires 2 hours a day for 3-6 months then maybe, yes…but, if it requires you 14 hours a day for 2 years…then the risk is too big.
I’ve got this great opportunity… it will only cost you 1 dollar, but you’ll have the possibility to make millions… I seriously got an email with that yesterday. Hmm… now to find that email…
two classic lines, shoe:
1) GO FOR IT. Or email me and I will.
2) Now excuse me while I go buy some stock in this company I just got an email about.
that a boy!!!!!
I’ve tried dozens of things that turned out to be worthless scams in my decade plus on the internet and I’ve found that if I want to make money online or get something for free, it always requires work. There’s still some “programs” and “offers” I’ll participate in if I think I can utilize traffic from my sites to make it work. Otherwise, they get deleted.
it’s not written by jeremy, read carefully
thanks for the advice, you’re almost 100% right
Not only that, but what I’ve found is that not everyone is willing to really commit and put in the required effort. They might have a beyond amazing idea, but when push comes to shove and they need to put in some real effort, that’s often when the whole thing falls flat.
This is why I now rarely commit with other people unless they have shown that they can execute something substantial. It doesn’t necessarily have to be successful, but they have to show me that they can at least put in the required effort.
So many people are all energy and drive at the start, but within a few weeks fall back to their old ways. As soon as they have to make any sacrifice they stop. As soon as they realize it’s not going to happen in a day or two, that’s it. As I’ve always said, Ideas are a dime a dozen!
Great tips,Shoe! Its good to hear tips and tricks from a veteran player like you who has been there and done that
you got to hustle. there are very few ways to make money without hustling.
I’d add that just because your friend’s company went bankrupt doesn’t mean you made the right/wrong decision. In another sense, don’t kick yourself if you skip an opportunity and the people end up getting lucky. Luck plays a huge role in all of our lives, but many people attribute luck to good judgment – which is often not the case. In the long run, results have a lot of meaning, but with a small sample size luck is too big of a contributor to ignore. Go with your gut, and don’t second guess yourself because of the outcome. Start second guessing yourself after you make the wrong decision at least a few times in a row, maybe more.
or family
The other side of this coin is that most entrepreneurs have their own ideas with huge upside and soforth. I’ve got a backlog of 10+ great ideas that could do extremely well and I’m sure Shoe and company have a lot more than that, so even if someone brings you a great idea, the opportunity cost of jumping on that idea for 10% profit vs your own idea for 100% can be astronomical.
I never work for/with friends anymore, and have lost a couple because of it. Fine by me – it’s cheaper and saves a whole lot more time than finding out further on down the line that they were never actually friends after all. Perhaps I could use being a *bit* more trusting and a little less sceptical though – Prince Nottalottagonads of Nigeria is offering me a small fortune to send his imprisoned father a toilet brush via eBay, and you don’t get an offer like *that* every day
Couldn’t of come at a better time… Just what I needed to read right now…
Great points! The stories are perfect examples of what can happen in the real world and they made me kind of nostalgic haha! BTW, what stock?
And if it’s online and not with someone you’ll ever meet be 10x as careful.
Working for or with friends can sometimes be your undoing. Good article.
My Yin to your Yang will be this.
“If you have a gut feeling this is gonna be a great opportunity, even if the statistics doesn’t compute, Go for it. Your gut knows better.”
If it sounds too good to be true, it probably is not worth your while.
That is my opinion. When it comes to business, you can’t get alot for little effort.
Most ventures require a lot of work, compared to most peoples initial perception.
Good advice on being skeptical, one should be when presented with any type of get rich quick offer or stock market recommendation.
And I agree with RobG last commentor, your friends may not always make good business partners.
Das Brain
Thanks, for the article. I am “skeptical as hell” and I learned it from the fist business I ran with a friend…oh yes…when it comes to business you cannot always trust your friends.