Sunday, May 18, 2008

All life is an experiment

(Fiji, photograph (C) Tiner/Epic Arts LLC)

"All life is an experiment.
The more experiments you make the better."
-Ralph Waldo Emerson

Experimenting allow us to explore, develop and mature. It comfortably allow us to swing for the fences and help control the amount of times we strike out. Inevitably, not every idea will work out, but experimenting allow us to think, prepare and react to new and developing ideas. Ultimately, experimenting also allows us to hit a home run.

According to Pareto's Principle or the 80/20 rule, 80% of your business comes from 20% of your clients, ideas or product line. Not every business idea works. In fact, most do not. However, experimenting allows to discover that precious 20%, which will generate 80% of your business' revenue stream. Everyone has a business idea at one time, either it was for a lemonade stand or the next get rich quick scheme. Realizing that a very few percentage of these ideas actually create a large revenue stream will allow future business "experiments" to be more concrete, help ensure profitably and (hopefully) create that illusive 80% revenue stream.

Recently, Tim Ferriss "experimented" with a thesis stating that companies should fire 80% of their customers and focus their efforts on the 20% that create 80% of their business. In The 4 Hour Workweek, Ferriss radically suggests that concentrating on this top 20% will allow you to "escape 9-5, live anywhere and join the rich." This model may more applicable to established business, but Ferriss' theory allows us to think differently about our current business endeavors, practices and ultimately experiment with new ideas.

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