5 Questions From Jeff Bezos, Tim Ferriss, and Alex Hormozi

About a year ago my partner and I started a business based on asking ourselves versions of these 5 questions.

The results were our business did $100k in revenue by month 2. And it kept going that way for 8 months. Eventually, our thining margins took us down. Something we would have foreseen had we done a proper competitive analysis.

But that’s a story for another day. For now, here are the 5 questions that lead us to a home run offer.

1. Is your target audience refined enough to easily find them online?

The easiest way to get more customers - Yes. Easier than running ads or building an audience - is sending a cold dm or email and asking if your product is something they would be interested.

The thing is, if you can’t pinpoint who your customer is, you have no way to message them.

When I started the Indie Strategy newsletter I went all the way from online entrepreneurs, who you could categorize into hundreds of different groups, to Indie Hackers. For starters, that allowed me to put Indie in the name, which they all appreciate because they know it’s for them. But it also made it extremely easy to find them on places like Twitter, LinkedIn, Reddit, and Indie Hackers.

And easy to find meant easy to reach.

2. Are you differentiated from your competitors in any meaningful way?

In an annual shareholder letter Jeff Bezos said, “Differentiation is survival.” He didn’t discover some secret. He learned it from the successful businessmen that came before him.

Find a way to make yourself meaningfully different from your competitors so your customers don’t compare you.

My partners and I used to run a run-of-the-mill digital marketing agency. Taking any client that would have us.

It wasn’t until we first picked a smaller audience that was easier to reach, and second, decided to make our service decidedly different by providing on-demand leads instead of marketing services that we were able to scale.

3. Is your offer powerful enough to command higher prices?

How much you can charge depends on how much risk you take away from your customer. If you design your offer such that you are taking on the majority of the risk, your customers will pay you whatever you want.

If you are charging commodity prices, you will earn commodity profits.

Some of the most successful clients we ever had at our marketing agency were the deals where we took all the risk away from the client. They paid us nothing upfront. We only got paid based on our results.

Because we charged them nothing up front, they signed the contract like it was a no-brainer. In the end, they would have paid a lot less if they gave us a retainer upfront.

4. If - gun to your head - you had to get rid of 80% of your work, which 80% would you get rid of?

We’ve all heard about the 80/20 principle, yet we believe everything we do is important. Only under force can we lift the emotional vail off of our work and figure out what is truly not contributing to our ultimate success.

The hard part is forcing ourselves not to do things that don’t matter.

After 200+ marketing clients, the hardest lesson to learn was how much time we wasted. Looking back it was mainly wasted on being disorganized.

Disorganized with what our service was, how we communicated with our clients, how we managed work internally… Once we found the waste and invested in getting rid of it, we were able to charge less (which meant closing more deals) while still making a similar profit.

5. If I died tomorrow, could someone else take over where I left off?

Often called ‘the bus test’ this question will force you from self-employment into a business owner. Once your business can survive and grow without you, its value skyrockets.

This question is also last for a reason. Keep that in mind.

In each case where one of my businesses became more successful, it felt like the work became more and more draining. It wasn’t until I asked this question that I started to build business that made me work less, not more. But beware, asking yourself this question will virtually always result in an easy “no” if you don’t first go through questions 1-4.

Conclusion

If you want to build a better business then you have to ask yourself better questions.