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Self-help Guru Tim Ferriss Confesses his Biggest Financial Mistake
Published: Mar 31, 2015
3 min read
Tim Ferriss knows a thing or two about how to launch a product: His books, starting with
have become multiple bestsellers. His podcast is often ranked #1 in Business on iTunes. The Four Hour Workweek,
But to enjoy the success he has today, Ferriss has had to suffer some mistakes. He shared with me one big product failure he experienced early on his career and what he learned on my podcast
So Money .
His Biggest Financial Failure
first failure that comes to mind is an entrepreneurial one…right on the heels of a seminar I did about speed reading. I thought, 'Well, this is great, but what would be even better is if I didn’t need to be physically located at a seminar to teach people.'
So, I created an audio book called
How I Beat the Ivy League and it was about how to optimize your college applications to get into schools where, perhaps, based on your track record, report card or SATs, you shouldn’t be able to get in. (I had attended Princeton undergraduate but I flubbed my SATs.)
I was convinced the audio book would sell itself. I spent a ton of time on it, took out the vast majority of my savings to have 500 or 1,000 tapes produced and proceeded to sell exactly…two of them—one to my mom!
What He Learned
There were two big lessons there. The first was you should not make a product and then find your market.
You should choose your market and then make your product. You should know exactly who you’re making something for, and not get stuck as a lot of engineers do, creating something with a bunch of features and then attempting to figure out who you’re going to sell it to. I approached it in exactly the opposite way.
Second was I produced and paid for, you know, 500 to 1,000 tapes because I was seduced by the lower per unit cost and that’s really, really, really dangerous. What I should have done is paid three or four times the per tape cost, even if I lost money on a per tape basis in the beginning, so that I didn’t have such a huge capital investment right up front.
Every day, Money contributing editor Farnoosh Torabi interviews entrepreneurs, authors and financial luminaries about their money philosophies, successes, failures and habits for her podcast, So Money —which is a “New and Noteworthy” podcast on iTunes.
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