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Secrets of Millionaire Moms

Learn How They Turned Great Ideas Into Booming Businesses

On the road to $1M rating:

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They say you shouldn’t judge a book by its cover, and the saying applies literally to Tamara Monosoff’s Secrets of Millionaire Moms: if you can look beyond the shabby cover and the flat, black-and-white inside layout -betraying that the book was originally published in ebook format- you will be pleasantly surprised.

Monosoff draws on her own experience as an entrepreneur and those of 17 other women -all of whom decided to turn their ideas into start-ups and eventually grew them into multimillion-dollar companies- to illustrate the steps needed to create, manage, and grow a business.

The first original aspect of the book is that all the profiled entrepreneurs are women, many of them in their 50’s and beyond -while I think it’s safe to say that the typical image of a self-made, millionaire entrepreneur would be that of a man. And there is a further catch: as the book title suggests, all these women have kids, and have had to work hard at achieving the elusive work-life balance, coming up with ingenious ideas to be able to enjoy their children while they worked hard on their businesses.

The fact that the book focuses on moms doesn’t make it any less of a business book. Apart from a chapter about juggling family and business, all the topics covered are of prime interest to anybody considering starting their own venture: how to turn your life-fantasy into a workable business plan, the importance of understanding the finances, how to raise capital, administer assets, or manage employees.

I think that most readers would define Secrets of Millionaire Moms as female-oriented. Being told from a female perspective, it often touches on issues that are typically considered of more interest to women. For instance, references abound to the internal critic that continuously reminds you of the reasons you can’t do something -it’s usually assumed that this nefarious inner voice is more commonly a problem for women, although I suspect that many men will be acquainted with it too. There’s also a discussion of the guilt factor from being away from your kids which, if the readership of blogs on the topic is anything to go by, is also of greater concern to women than men.

This is not to suggest that men won’t find the book useful and enjoyable. The times when a man could -and would want to- spend all his life working while leaving his wife to take care of the household and the family are long gone. Men entrepreneurs will at some point in their lives come across the difficulty of juggling work with family life, and the fact that a business book tackles this topic head on should be welcomed as a refreshing novelty, in step with modern times.

In the end, the book is extremely inspiring without lacking realism: while it continuously underlines the importance of believing in yourself, it doesn’t hide that being an entrepreneur can sometimes be difficult -you may have to spend birthdays away from your kids, have money troubles, feel anxious and stressed, or be obliged to fire employees. The ultimate message, however, is a positive one. All interviewees agree that the sacrifices they made were worthwhile, and more than compensated by the gains in terms of flexibility, outlets for their creativity, and financial independence.

I loved reading a business book written by a woman who was able to achieve her dreams through hard work. While I cannot stress enough that both male and female readers will enjoy the book, it’s still harder for us women to find entrepreneur role models. Thanks to Secrets of Millionaire Moms, I’ve found several to add to my list.

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Scalability or the Nature of Internet Businesses

In his excellent book The Black Swan, Nassim Taleb makes a distinction between two types of occupations or businesses:

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  • The first type are not scalable, meaning that workers or owners’ earnings are constrained by the amount of time they put on. A doctor, for instance, can only visit a certain number of patients in a day; a teacher can only teach one class at a time; there’s a limit to the number of clients a brick-and-mortar shop owner can serve simultaneously.

  • The second type of occupations are scalable, that is, workers or owners’ earnings are mostly independent of the number of hours they work. The time spent writing a book, for example, is the same whether it has 100 or 100,000 readers. A singer only has to record a single once, whether it becomes a hit or never makes it into a radio station.

Most internet-based businesses are or can become scalable. Writing a blog or advertising products as an affiliate are obvious examples. Even an internet business that involves selling, packaging and mailing physical products can be easily outsourced in order to fit into the scalable category –this is the concept of automation that Tim Ferriss describes in The 4-hour Workweek.

Since the profits derived from a scalable business are not limited by the time your work on it, they can be endlessly replicated. This will allow a small percentage of business owners to make extraordinary amounts of money. The flip side is that they will saturate the market, and the remaining majority will make close to nothing -from this perspective, scalable professions and businesses imply a much higher degree of risk than non-scalable ones.

The earnings distribution across internet businesses reflects their scalable nature: More than 95% of internet entrepreneurs will never make a significant amount of money; 4% of them will be able to derive a comfortable profit from their business; while less than 1% will strike it big and become Google-like millionaires.

Given the slim chances of success, I believe that all of us first-time internet-venturers are overoptimistic –we overestimate the potential profits. Notice that I consider overoptimism a very positive quality –if we didn’t at least try, our chances of a worthy payoff would be exactly equal to zero.

However, a dose of realism is always advisable. How can you hedge against the possibility that your internet venture never produces any real returns? There are several things you can do.

  • The first one is not to quit your (non-scalable) job until you’ve proved you can make money online. If worst comes to worst, having a backup source of income can make all the difference.

  • The second and most important one is to start a business related to something you like. In this way, even if it eventually fails –not that this is going to be the case!-, what you have learnt and the enjoyment you have derived from it will have compensated your effort… and will serve you as valuable starting points to be successful next time.

TALKBACK

  • Did you start an online business attracted by the scalability of profits?

  • Do you agree that optimism is a defining quality of online entrepreneurs?

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