Put your dollars to work!
In the past, I've written that in my view, there is no way to run a sustainable business, especially as a solo provider, without leverage. Leverage, particularly in the form of a flywheel.
Energy input into the business system lose "heat to entropy" much like friction in physical systems.
Let's say that for a minimum viable product (MVP) – be it an info product, a car, or a house costs five units of energy to make successfully. Anything under this threshold is considered to be "crap", or unusable. The roof of the house will collapse, the video is unwatchable due to lag or audio issues, or the car's engine light stays on 24/7.
The math looks something like this: if you provide ten units of energy into your product, and five units are lost to inefficiency, your business will surely suffer. Your baseline entropy loss is 50%. If you are tired one day and can only produce eight units through willpower, you cannot produce a MVP, as you will only capture four units, despite actually providing enough raw energy input units to make the product. Or conversely, to print two MVP widgets, due to your 50% score, you need to put in four times the raw input energy unit just to output two units. Yikes! No wonder burnout among workers is so common.
The energy lost to entropy is the work devoted to externalities, communication bottlenecks, context switching, poorly attuned business practices, a desire to want to have things be as you imagine versus meeting them as they are, etc. All of these externalities share one thing in common:
To eliminate waste, we must create systems that have the job of processing waste. The flywheels I produce in my business aggressively seek to manage waste, while maximizing unbounded opportunity. This is key.
Zero waste flywheels are not flywheels of scale, they are flywheels of waste reduction.
A Real World Example
Here is my current, actual, GTM flywheel that powers my business of info products, optimized for minimal energy input and allowing me to do what I like to do while minimizing what I have to do and eliminating what I don't want to do.
For me, I like to:
- write code for silly zero-to-one projects
- read books
I have to:
- publish my work (weekly newsletter, open-source repos, SaaS apps, videos, essays)
- market my work (social media, word of mouth)
I don't want to:
- spend any more time on social media than the bare minimum
- video edit
These lists are not nearly exhaustive, but I hope the point lands. A business is an orchestra, and you are the conductor. Your task is to coordinate and guide without getting in the way. Any energy put in should come out with minimal loss.
Without further ado, here is my current flywheel. Let's go through each node one by one:
On the very left is me! I am the well source of ideas, execution and judgement for the business, though in the future I very well may be replaced by an AI, but I digress. As long as I am the beacon for my business, it is my duty as business operator to "protect my golden goose", and to make the best use of my work product, or as Austin Kleon puts it in Show Your Work!:
Once a day, after you’ve done your day’s work, go back to your documentation and find one little piece of your process that you can share. Where you are in your process will determine what that piece is. If you’re in the very early stages, share your influences and what’s inspiring you. If you’re in the middle of executing a project, write about your methods or share works in progress. If you’ve just completed a project, show the final product, share scraps from the cutting-room floor, or write about what you learned. If you have lots of projects out into the world, you can report on how they’re doing—you can tell stories about how people are interacting with your work.
– Show Your Work!: 10 Ways to Share Your Creativity and Get Discovered (affiliate link)
I put raw energy into reading and livestream coding. To maximize the value captured from these two processes, I set up a rain bucket of sorts.
For reading, I read on Kindle. Every time I highlight a passage, it goes through the Readwise API, and ends up in my own creation, the Commonplace Bot. Using embeddings, I surface these highlights whenever and wherever I need them from my Discord.
For coding, I use OBS and Twitch to record my process live. The benefits of this are multiple. One, occasionally someone drops by and says hello (this is rare in the software category of a gaming livestream website, but it happens once in a blue moon) – this is equivalent to community building. Two, I get to see my own coding practice and learn how to improve. Much like a weightlifter who reviews his form, seeing my code process shows me where I might improve. Three, I get to use these livestreams to make VODs, which I will discuss later.
For my newsletter, which I publish every Sunday, my reading and Commonplace Bot nodes come majorly in handy. I usually just lie in bed and spam the
/wander endpoint until I come across a quote that inspires me to dive deeper. It's that simple. I'm 35 weeks in and the topics are always varied and interesting due to this method.
From the livestreams, I make timelapse videos. This is trivially easy to do in Final Cut Pro and editing takes me less than fifteen minutes. I get another slam dunk by literally speaking my newsletter in conversational format as a voiceover.
I should pause here for a second to discuss my "relationship" with YouTube and Twitch. To be frank, I see them merely as two things: free/cheap video hosting, and marketing engines. I have no ambitions whatsoever to become a Twitch streamer or a Youtuber, and in fact such things sound quite miserable as a long term career path. These mega platforms are used by me (and I mean that in the strongest sense of the word) as parts in my flywheel, but if need be can easily be swapped out if need be due to something better cropping up or contract disagreements. If you are considering running your own business, I highly recommend you do the same. The first goal is to own your own domain. Anyway...
For creative coding projects, I publish my work on GitHub repos. This is also simple to do as I do coding on livestream, as well as writing READMEs. The repo itself is a work product for me, as many of my clients have found me through my open source contributions or SaaS apps.
Finally, blog posts, which are generally filter fed down from all the other processes, or written from scratch because I happen to be particularly inspired (like this post!). I have also posted my Zettelkasten notes from Obsidian directly to my blog in the past, but recently, I've done that less. That will be coming back though eventually because I enjoyed it.
From the green arrows connecting all of the outputs on the ball of chaos on the right, that is all marketing. Of course, my penultimate "goal" for online creation as it were is to get people to sign up for my newsletter, as that is where I have the most potent and direct relationship with readers, but I also really like GitHub!
So!! Have you kept count? Have you seen how the energy applied at the start turns into different products? Videos, GitHub repos, newsletters, blog posts, all from the two actions of reading and coding, which I would do for free? This is the idea of the zero waste flywheel, the nose to tail operation. If I have low energy due to illness, malaise, or just am not able to muster "ten units of energy input" I lean into "filling the grain silo" by lying in bed and reading, or turning on OBS and my favorite tunes and coding for an hour or two. I don't think about what will happen downstream, because I don't need to worry about it.
Later, I go into my silo and "harvest", creating videos, code repositories and more. Finally, I "pollinate" with marketing, and the cycle "scales" by itself.
Here's how it breaks down roughly in terms of daily work, split by energy management, goals, and the "internal cooldown" of posting too often on social media:
A zero waste flywheel is an aspiration like any other, but one that can always be gotten closer to. By merely being aware of our business processes, goals, and customer base, we can make every unit of work we put in net neutral, if not positive, returns on the rest of the business.
The deadliest boss in Elden Ring, Git Submodules, Black Mirror WoW HC, Zoom Calls in 2033 will still suck, Patreon vs VC rant, a park that looks like a fish
stream from 05-19, here I tackle the addition of new submodules programmatically to my monorepo, and a drafting of the architecture of what projects make (or dont make) the cut
We've now entered reactions to reactions to reactions Black Mirror-esque Twitch content
People have to stop alt tabbing while they're playing hardcore lmao
Really excited to have my boss at home, I really want to see more of him
Advice: Dont treat patreon 5-10 dollars a month as being == to faceless organization 10 dollars a month (e.g. a WoW subscription or a Netflix subscription) -- when you subscribe to an individual you are literally helping small business. TBH it's kind of tragic that VC so heavily subsidizes Netflix subscriptions et al. to the $10 a month mark that forces consumers to compare the value of the entire catalogue on Netflix vs the work of one individual trying to make something. It follows that this is another great reason to buy your own domain and run your own website -- you get to accrete value to yourself instead of participating in the shared watering hole of someone else's company. Its just good business!!
This park kinda looks like a fish. Even the Google Maps pin looks like an eye!
Can Patreon help sustain open source projects financially?
On Patreon, the average initial pledge amount has increased 22 percent over the past two years. Since 2017, the share of new patrons paying more than $100 per month—or $1,200 per year—has grown 21 percent. (View Highlight)
The normalization of this model may be important for open source going forward. GitHub Stars don't pay your rent after all.
to gain fans who are willing to pay $1,000 a year—no small sum—creators need to offer a step-function increase in value. The recipe, then, is to go niche and to tap into users’ desire for results. Practically, what does that look like? It means providing differentiated content, community, accountability, and access.
1. Premium content and community that has no close substitutes
2. Delivering tangible value and results
4. Access, recognition and status (View Highlight)
The creator economy is in the midst of a decisive shift—from a “bigger is better,” ad-driven revenue model to one of niche communities and direct user-to-creator payment. (View Highlight)
You Get A Car, He Gets a Bike
The key to monetizing at $1,000 per fan, per year is tailored offerings priced at tiered levels. (View Highlight)
I think this strategy is highly slept on. We all spend so much time mimetically trying to impress other humans, we rarely realize we'd be more valuable by offering unique stuff, and then charging crazy amounts for it. Just like good explanations, good products are hard to vary
If you can make one heap of all your winnings And risk it on one turn of pitch-and-toss, And lose, and start again at your beginnings And never breathe a word about your loss; (Location 871)
pretty much the opposite advice of Taleb and Naval:
The one thing you have to avoid is the risk of ruin.
Avoiding ruin means stay out of jail. So, don’t do anything illegal. It’s never worth it to wear an orange jumpsuit. Stay out of total catastrophic loss. Avoiding ruin could also mean you stay out of things that could be physically dangerous or hurt your body. You have to watch your health.
Stay out of things that could cause you to lose all of your capital, all of your savings. Don’t gamble everything on one go. Instead, take rationally optimistic bets with big upsides.
If only SBF and his Pirates of the Caribbean were more well-versed on the notion of catastrophic losses before they heavily leveraged their own crypto trading firm 202212170120.
Bankman-Fried's net worth peaked at $26 billion. In October 2022, he had an estimated net worth of $10.5 billion.5 However, on November 8, 2022, amid FTX's solvency crisis, his net worth was estimated to have dropped 94 percent in a day to $991.5 million, according to the Bloomberg Billionaires Index, the largest one-day drop in the index's history.67 By November 11, 2022, the Bloomberg Billionaires Index considered Bankman-Fried to have no material wealth.
On December 12, 2022, Bankman-Fried was arrested in the Bahamas, pending potential extradition to the United States. An indictment of him before the U.S. District Court for the Southern District of New York was unsealed on December 13, revealing a range of charges for offenses, including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations. Bankman-Fried faces up to 115 years in prison if convicted on all eight counts.
I know writing journals is helpful to keep track of salient thoughts and information, but writing in them with a pen is just not for me. My carpel tunnel can’t stand working with it, and with the blindness as a cherry on top, it turns out horribly. (View Highlight)
Tool affordances should continue to be individualized. As a leftie, I resonate with this sentiment strongly. No tool fits the needs of everyone, at every time.
Despite peoples varied habits we all have the same base materials like kitchens the kitchen is the gravitational well of the home but this may be putting the cart before the horse
“Money is a neutral indicator of value. By aiming to make money, you’re aiming to be valuable.” (Location 1585)
“If you’re struggling to raise money for an idea, or are thinking that you will support your idea with unrelated work, then you need to rethink the idea.” (Location 1588)
Money proves the possibility that your idea is not trash, but raising money/moving units does not conclude that your product isn't trash. Most VCs are just degenerate gamblers that try and poop out startups that they can drag along to different series capitalizations. 202212170120, ^vn5vje ^5876cf
the law of financial viability, and described it as follows: “When deciding whether to follow an appealing pursuit that will introduce more control into your work life, ask yourself whether people are willing to pay you for it. If so, continue. If not, move on.” (Location 2414)
Not too difficult, assuming your idea solves a core problem in the human experience landscape: status, knowledge, love and relationships, health, entertainment, etc…
The problem, however, is that blogging in the advice space—where his site existed—is not an auction market, it’s winner-take-all. The only capital that matters is whether or not your posts compel the reader. (Location 1155)
The best advice, the best piano player, the best dancer. These are zero sum games. Customers choose the best offering that is affordable.
A way to subvert this is to niche yourself into a role where competition is zero to minimal, and then acquire an immense amount of career capital. The risk here is that supply may never come.
You may work and work and work in a field where no one will ever truly give a shit. Especially if you choose a super niche, super out there line of work.
Big ideas, Johnson explained, are almost always discovered in the “adjacent possible,” a term borrowed from the complex-system biologist Stuart Kauffman, who used it to describe the spontaneous formation of complex chemical structures from simpler structures. (Location 1769)