James: So I guess it’s a little bit along the lines of that Toyota 5 Why system, where they just drill down. And on a similar plane, there’s the value-based sales methodology, which drills down into why something’s important, and you get down to the root cause rather than just accept the surface level answer.
Tim: Right. If you can ask why, usually anywhere from five to seven times on something, you’ll get down, for a personal thing, the root emotional driver. That’s usually the most important part. So if you’re in sales and you ask somebody, well, why do you want this solution? And they’ll give you a surface answer. You ask again, then you’ll get an even deeper answer, and you ask up to five, maybe as much as seven times. Going beyond seven, it gets way too abstract and it’s not very useful. But somewhere in that five to seven range is when you actually get down to the root reason they want something.
James: Yeah. It makes me laugh when I think about the time when I was working with Mercedes-Benz and they had marketing classifications for each of the product ranges. For the SL Series of Mercedes-Benz, the label for that was called hedonist. I think they sort of tapped into the real reason why someone’s looking at those expensive, two-seater, convertible sports cars.
James: They say they want it for certain reasons, but really, they want it for pure hedonistic virtues. So tell me, how can we use this idea of TIM in our business?
How to use TIM in your business
Tim: OK. It’s more about you personally, I suppose to your business. What I mean by that is once you define what it is that you really want in life, what kind of time do you want? What kind of income do you want? And what kind of mobility do you want? Once you’ve identified these three things, it ends up informing you on what kind of business to build.
To get rid of abstraction here, let me tell you how I got to this point, and I’ll try to make it fast. Years ago, I moved from Portland, Oregon down to Arizona to just get out of the rain and just get in a position. I shut down my marketing consultancy. I had a marketing agency, and I got tired of kissing CEO’s asses and stuff to get a marketing campaign launched. It was just too much trouble sitting in board rooms and pitching.
So I moved. Just kept a handful of clients, and I got down to Arizona and discovered this burgeoning and growing market of swimming pool companies, and I started one. I invested in one, grew it, and was making a decent amount of money from it, but it ended up taking over my life. In that process, I was like, man, how do I manage all these people who are running around this valley. And the Phoenix metro area is just gigantic. So how do I manage all these and still have the kind of life I want, where I can travel, I can go do things? I started looking at portable technologies, and unfortunately, you still needed a ton of equipment to actually run in office from anywhere in the world back in 2004, 2005.
You couldn’t just do it off of a smartphone. Typing would be a pain in the butt, but otherwise, you have all the power in a smartphone to be able to run most businesses now. But back then, it was really difficult, and I started looking around, and I realized I built a company that ended up eating up lots of my time. It needed to grow significantly bigger to be able to have a management team in place so that it would truly free me of being geographically controlled because I could leave for a while. But I couldn’t stay gone for a long time because if a major problem came up, I was still the final decision maker. I would have to come back and solve major problems.
So when you’re redoing someone’s pool, and you’re putting a new equipment, doing all kinds of repair, you’ve got heavy equipment and stuff in their backyard, stuff goes wrong. Always goes wrong. And so, it always happens. I didn’t have a big enough company yet to afford having a strong management team. I had one office manager, who eventually left to stay at home with her newborn baby. But before that, I just had her and me, and I had a lead technician who could actually handle a lot of the stuff in the field, but not a true management team. I knew that I would have to essentially double the size of my company to get to the point where I could afford that.
I was at wit’s end and just decided to start selling things off instead of fixing it. It was all because I said, “Hey, look at this cool opportunity, I’ll invest in that.” But I didn’t take a look at what it would do to my personal freedom. I didn’t realize that until I had a management team in place; it would lock me into being in Arizona for as long as that company existed. I couldn’t just take off for long periods of time.
I could take short trips, but I knew I couldn’t stay away from Arizona for too long, or a major problem would come up, and then I would be losing tens of thousands of dollars. So that was something that I learned in the process. I built it, and then I found out, afterwards, I built it incorrectly because I did not put my personal preferences into place at the very beginning.
James: Got you. So when I’m sitting down with a brand new mastermind student, I have a diagnostic audit of their business. And we do put a heavy emphasis on lifestyle design. We start out talking about what is the point, what are they trying to do here? And then we create the lifestyle they want. I cover questions like do you want to work from home, or do you want to have an office? Are certain things very important to you? And then we build the business around on top of their lifestyle.
Picking your station
I was really mentored a lot in this by a guy that I worked for. He used to think of it as picking your station. You pick the station you want to get to, and you make sure that when you get to that station that it’s got all the things you needed to have. There’s no point getting there and finding when you get there that you don’t like it.
James: So you pick the station, you make sure there are enough options when you get there, and then you build the tracks to that station, and you steam up that train and keep taking logs off the tracks. So it’s a metaphor I keep coming back to because it works. So I guess what you’re saying is if you’re sitting there right now in front of a computer or you’re walking the dog, or doing your weights in the gym listening to the podcast, then what you should be thinking about is what do you have right now, and what would you really like and keep everything in perspective around your personal preferences. What sort of income you would like? What sort of time that you want to commit to the business? Where do you want to be doing it?
It’s a continuous thing
Tim: Yeah. So, I’ll take some of that out of some abstraction. I have to give some credit to Dan Andrews who really enjoyed this idea and he’s taken it a little further. He helped me define this problem that I was having, is when I tell people about time, income and mobility, and they would say, “Well, I can’t have complete mobility freedom or income freedom or time freedom all at the exact same time.”
It’s more like the recycle symbol, that triangle where the arrows go all the way around pointing at each other. Well, that’s what happens. It’s a continuum. It’s not a static thing. So a lot of people, what they do, is they give up their time and their mobility to gain income. That’s usually a job or most small businesses, people give up their time to work their tails off inside of a business, and they’re locked in. They can’t go anywhere because their business requires their presence. So they’ve given up those two things in exchange for gaining income.
Some people bought into the lifestyle design. They read The 4-Hour Workweek by Tim Ferriss and they said, “You know, that’s it. I’m going to travel the world. I’m going to throw on a backpack and I’m going to take off.” And they do. They sell everything, and they take off, and they run around the world. And then a year later, they’re completely broke because their little AdSense niche site never made them any money. They just threw up some stuff, hoping that they were going to figure out business along the way, but they didn’t want to give up their mobility. So they traded their time and their income to gain mobility so they could go travel the world. But eventually, what happens is that the income runs out.
James: Yeah, and you know, it’s a great book. If you’re a young, single guy without a family, you don’t need a lot of money.
Tim: Well, if you only buy into the part where you take off before you’ve actually built an asset, a lot of people ignore that part in the book. The part where he says, “Build this, then go do whatever it is you want to do.” Most people just go do what they want to do, hoping they can build, as Tim calls it, The Muse, along the way.
James: Well you see, when I read that book, picture this: I had four kids, I had a couple of million dollars’ worth of debt that was funding the couple of million dollars’ worth of assets, and then I had this job fueling all of that and providing for the family. I was like as far away as you could get from a young, single guy with no ties. So it was a completely different compression chamber for me.
Tim: Yeah, yeah. You would’ve had The Muse that you would’ve had built would require a much larger size.
James: 300,000 a year was my target. That was my step off. I had to reach that before I could turn off that inconvenience of having to go somewhere else for nine hours a day.
Tim: Right, right. And Tim Ferriss is talking about making a few thousand to as much as 10,000 a month, and that would be sufficient for most people. Like in the United States, they bring up the fact that the median household income is $50,000 in the US, approximately. That’s the household, and most households in the United States are two income earners. So that means most people in the United States have two people working in the house, two or more, earning a total of 50,000 a year.