Jedi Power #2 = Effortless Effort

How do you produce more with less resources?

This is the foundational question of "Effortless Effort" or "Disproportionate Return on Investment". It's the underlying theme of the movie, Moneyball & the focus of a recent post by a good friend, The Reverend Hoffman.

What do you want? How much resource [work/money/time] is required to get it? What if you could get it for a fraction of the resource cost?

Put another way: how do you put $1 in and get 10x, 100x, 1000x back? Can you do it easily & with a high degree of repeatability? 


As a young man in college I marveled at the "smart kids" who got strait A's and seemed to never study. After consistently getting B's and studying my ass off, I approached one o' these "smart kids" and asked her secret. "The trick" she said, "isn't to study a wide set of material that might be on the test, instead, try focusing on the professor, the types of questions they've asked in the past, information they value, etc." She typically studied under 1 hour per test, I studied roughly 10+ hours per test. She got better grades, with less work. She won.

This idea stuck with me. How was she able to get such better grades with a fraction of the work? Was she smarter than me? Maybe, but there seemed to be more to it. The core difference in our approach to studying was that her's was fundamentally different from everyone else's. Somewhere in her life, while preparing for a test she asked the question, "is there an easier way to get good grades on a test?" She invested time in experimenting with different approaches, found 1 that worked MUCH better than the known alternatives, applied it, and won.

Whenever I start a venture these days I think of her. What would she do in this situation? How would she win? 

Steps to winning:

• Define what you want: good grades, profit, etc.
• Outline traditional steps to solve the problem: study, hire a contractor, etc.
• Understand the resource cost involved in each step: hours of studying, $$$, etc.
• Outline cheaper alternative steps to come to the same (or better) outcome
• Test your alternatives & use your learnings to tweak your plan

When comparing ventures, examine

• Total cost of ownership: how much resource [time, money, etc.] is this going to cost
• Total value: how much resource will it return?

Choose the venture which returns the largest total value at the lowest cost of ownership.
This philosophy of "Effortless Effort" has allowed me to invest in businesses which have had a massively disproportionate return on investment. $1 in $1,000 out. This idea has had a profound impact on my life, hopefully it can help inform some of your important decisions.
Pip pip,
Cedric