How to make a muse without spare cash (my idea)

[Pulp Reality]

Hello all. This is my first post and it might be a bit of a long one so bear with me. I finished reading t4hww last week and it gave me a lot of great ideas. I have been trying to start some sort of a business for the last nine months and this book was exactly the reading material that I was looking for. I am ready to get started except for one sticking point. When Tim was talking about his supplement company he was saying how he began to "aggressively surf the net" and then "5000 dollars worth of credit card debt and two weeks later he had his first shipment made." My problem is simple, I don't have five grand to kill. I started browsing these forums for a solution, and I found a few people who had the same problem, but I couldn't find an answer that i really liked. Then two days ago I started thinking about what money is and that thought process led me to a couple of good ideas about money and economics (I will include these at the end of the post for anyone who cares), and then those ideas lead me to my solution. To make my point clearer I am going to use a hypothetical example. Lets say that I am going to start a line of designer sunglasses. Here's my understanding of what to do using t4hww format.

1. Hire a web designer to create a web page that will showcase my sunglass designs. This person will also create a fake order page with the apology for being back ordered, or whatever system I decide to use to test the market viability.

2. Hire a fashion designer, or some professional who can design sunglasses. for me. I would need this person to make drawings or something I can feature on the website as the sunglasses designs.

3. Advertise to test the market using google adwords or something similar.

4. If the test shows that there is a market for my muse, then I would get a manufacturer to produce the sunglasses and send them to a fulfillment house to await orders.

5. Change the website to be able to take orders, sit back, and watch the cash roll in :D

My problem is steps 1 through 3. I do not have enough money to pay for the web designer, or the fashion designer, or the advertising. Some people on this forum have suggested to sell some of your stuff, or get a temporary job you can do from home in order to raise enough cash to pay these expenses. These are good solutions and I don't want to sound like i am badmouthing the people who suggested them, however they don't work very well for me. I am 19 and I don't have much stuff that I don't use that is worth anything. I don't like the idea of getting a job much even a temporary one (there is a reason I bought a book titled "the 4 hour work week"). So as the title suggests I think I have found an alternative. Instead of paying for the initial set up costs with cash, I could pay with partial ownership instead. Here's how my solution would work

1. Find a web designer to build a website for me in exchange for 15% of the monthly profits.

2. Find a fashion designer to create a line of designer sunglasses in exchange for 20 % of the company's profits.

3. Advertise for the muse using my own money, or if I don't have enough/would like more, I can some more of the profit share to an investor (For example If I wanted to spend $2000 to test the market I could find an investor who was willing to give me $2000 plus whatever the cost would be to manufacture the first batch ($500 maybe?) in exchange for 10% of the monthly revenue).

4. If the market test is successful, then I could get a manufacturer to make a batch of sunglasses and send them to a fulfillment house.

5. Get the web designer to configure the website to begin taking orders, sit back, relax, and watch the cash flow in without me spending much if any of my own money.

I am exited about this concept. If I am right about this than it's like getting free money. I am posting this to you guys to get some feedback before I try it. I am wondering if I have forgotten or overlooked anything. Do you think that I would need to incorporate for this to work? Are there any legal/tax/accounting issues that I need to be concerned about?

Also, I was wondering if anyone here knows where a good place is to get legal/tax/accounting advice. I am willing to pay to talk to an expert, because I keep coming up with questions like "If I want to sell in Europe do I need to worry about tariffs and is there a way around them like using a fulfillment house located in Europe or using a courier service?" I have a lot of question's like these and I wonder if you guys know of any good places to get them answered (should I just call a law firm or something?).

My post is too long to be allowed in a single message, so I will put my second part into a second post.

[Pulp Reality]

***MY THOUGHTS*** (not important for my main question)

The other day I got to thinking about money when I was contemplating how to fund my muse. I keep hearing about how once upon a time everyone used to barter (trade goods for other goods). Then eventually people invented money, and it made the whole process better, the economy was able to expand and everyone lived happily ever after or something. I disagree. The way I look at it (or more specifically the way I realized it could be looked at after doing much thinking) is that we never stopped bartering. Let me explain. People say that they want money, but I don't think that they do. If I offered one of you a suitcase that had a million dollars in it, I bet that most of you would get excited and would take that offer. However if I gave it to you under one condition, that you had to keep the money and never spend it, and when you die it had to be burned, you could not give it to your kids or anyone, it had to just sit in the suitcase until you die and can never be put to use. With this condition, my initial offer becomes significantly less appealing. This illustrates my point that people don't want money, they want the things that they can buy with money. For the rest of this essay I will be referring to these things as "value". For our purposes value is anything that can be exchanged for something else and is desirable to someone or in simpler terms goods and services that people want (a car is an example of value whereas bird crap is not because there is someone somewhere that wants a car, but no one wants bird crap). With this in mind I consider the economy to be a measure of the production and exchange of value. Now back to bartering. I realised that money was not some magical thing, but rather it is just a good that meats several requirements.

1. It is easily quantifiable. Dollars are easy to measure, if i have five dollars there is no disputing that I have five dollars and it is easy to count them.

2. It is easily transported. Dollars are easy to carry, as opposed to chickens or beaver pelts.

3. There is finite supply that is not easily created or destroyed. Gold was used as money for a long time because there was a limited quantity of it and it was impossible to counterfeit.

This allowed money to act as a null good; A sort of place holder for value. People could exchange goods for money (a special type of good) and then exchange money for other goods. I don't think I need to go into all the advantages of using money as an intermediary of exchange because you already are familiar with them and it is not really relevant to my point. All I want you to remember is that money is a special type of good that people don't want because they want to have it (like a sports car or expensive jewelry), but rather they want it because they will have the ability to exchange it later for something else. Now that we have laid the groundwork I can make my point. The amount of money circulating in a society is relatively static. I believe that there is currently 3 trillion dollars in paper money and 12 trillion dollars in electronic money currently in circulation. A businessman may look at business as a zero sum game, or in other words, in order for one person to make money someone else has to lose money. It certainly, seems that way and it explains the way that many if not most businesses compete withe each other. They look at the purchasing power of their consumers and think of that as "The Pie" then they proceed to slice up the pie with their competitors and each vie for the biggest slice of the pie. But here's the thing, the companies don't go and hide the money in some vault somewhere; they spend it. We can look at this from another angle, although the supply of money is intended to stay at a fixed level, the quantity of value does not. In other words, even though there are 15 trillion American dollars in circulation (I think) there is not 15 trillion dollars worth of stuff in America, there is a whole lot more. If you were to add up the net worth of all the real estate, the automobiles, the jewelry, the clothes, and all of people's crap, it would be worth way more than 15 trillion dollars. It would probably add up to more than 150 trillion dollars maybe more than 500 trillion. This is because unlike money VALUE CAN BE CREATED AND DESTROYED. I am going to say it again because this is what I am trying to tell you guys, VALUE CAN BE CREATED AND DESTROYED. You can't create money from nothing (unless you are the guy that prints it), but you can create value from nothing. Remember how I said that the economy is the measure of the production and exchange of value. If a watchmaker takes metals and forges them into a watch, he or she has created value, if an attorney defends a client he or she has created value, if a house burns down that value is destroyed. Because money is used as a way to measure the worth of value, people often describe the economy as being the amount of money exchanged, but it is not, it is about value created and exchanged. For example if one of you came over to my house and I gave you $100, you would probably be happy, so happy that you might be inclined to give me $100. Even though I gave you money, and then you gave me money, we accomplished nothing. Now if when you came over to my house, if you had built something that was worth $100, and then I traded you my $100 for your device, then I built something that was worth $100 and gave it to you in exchange for the $100 back, we would have accomplished something because we now both have brand spankin' new devices that didn't exist before. Now, if you have managed to listen to me babel for this long, I bet you are wondering what this has to do with the top half of my post and why I bothered to tell you. Well from this concept of value, money, and the economy I have determined several corrilaries that I think are useful, there are probably more but this is what I have come up with so far.

1. Economics is not a zero sum game. There is unlimited potential for the creation of value. It is possible for everyone to win. It is possible for everyone to be wealthy. One person's success does not have to come at the expense of another's. Instead of slicing up "The Pie", we can bake new "Pies", instead of trying to beat each other out we can work together to create synergistic win-win relationships.

2. The ability to be financially successful stems from the ability to produce. In other words if you took all the money in the world, pooled it, and divided it evenly among everyone, the people with the ability to produce the most value would quickly get it back.

3. There are many types of value that are difficult or impossible to produce by yourself. Therefore, it is both possible and advantageous to work in groups to produce value. When you think about it that's what a company is; a group of people cooperating to produce value. It is this corrilary that gave me my idea to exchange the value that I needed from the web designer and the fashion designer for partial ownership rather than money.

Thanks for your time, I know this was an excessively long post, but I wanted to share it and I hope you enjoyed it. Cheers!

[Sven]

You say you want to sell sunglases and your'e no designer and no manufacturer.

I am both, and I think that the people that succeed in the kind of field you want to compete in are the ones that a, are a designer, or b, a manufacturer or c, daring entrepeneurs. As Pulp Reality said, the people that can produce.

Sven

[AntonTheKhan]

Yeah, all that kid does is over analyze.
What is the niche for your sunglasses? I mean you can get sunglasses anywhere on the street, yours must be something special. Pls you want to sell your design, yet you have to hire a fashion designer to design the glasses. I mean what the....

[Pulp Reality]

I think you guys missed the point. I do not want to sell sunglasses. That is just something I came up with off the top of my head. I just used it as an example to illustrate the method I came up with for starting a muse with little to no cash of your own. I wanted to change the process from "buying all the things you need than hoping it works" to "coordinate the process and pay your expenses with the profits produced by your muse, including your startup costs". I just wanted to see what you guys think about paying for the necessary startup costs with partial ownership of the muse rather than with your personal money.

Second of all, I am not an expert in anything. I am pretty good at a bunch of things, better than average, but I am not the best or a true master. What I have noticed is that a lot of the people in the world who are better than me are still trading there time for money, they have a job. I don't want to compete with them, I want to hire them. I know that I don't know anything about web design or fashion design, that's why I want to hire Professionals to do it better than I can.

[badhank]

The idea of having ppl work for the eventual profits of your company is not a new idea. Its often used by scammers and ppl looking to "use" others for their own benifit.

The concept is that most ppl will not exchange their value (work) for money that is not allocated for them as a guarantee. Except of course for the naive, or the unskilled looking for a opportunity. You *may* b able to get a buddy to do ur website for the that agreement, but not any serious freelancer. If the other person you want to let in for a % has bills to pay right now, your offer may as well b the million in the suitcase he cant spend.

This is not an exchange of work for money, this is a gamble that maybe, under the right circumstances, people will get some money and even so, it may not even be in proportion to the value they contributed. This is where a fixed salary or hourly rate, or job cost come in to save the day and assure an agreed upon compensation for an agreed upon work value.

Without a product in hand, you have NO value, and you will have a tough time convincing others to trust you and that you will eventually give them value.....

Maybe refine your ideas a little, there definitely room for improvement. You are looking at it from the standpoint of your own benefit. Maybe look at it like you are a web or sunglass designer and some1 approaches you for for your service, how can they interest you

[TimW]

even more, the post on bartering makes it sound as if you want to trade "sunglasses" for work done.

Barter only works when all parties involved want what the other party has. Otherwise, If you have a Ham, but I need a chair, you need to make a series of trades to get a chair for that ham, before I will trade you whatever it is that I have for the chair.

That's the whole reason money was developed...as a store-of-value item that can be "exchanged" for desired goods.

So, unless your web developer wants a ham, I suspect it will be easier to pay with money.

[AntonTheKhan]

even more, the post on bartering makes it sound as if you want to trade "sunglasses" for work done.

Barter only works when all parties involved want what the other party has. Otherwise, If you have a Ham, but I need a chair, you need to make a series of trades to get a chair for that ham, before I will trade you whatever it is that I have for the chair.

That's the whole reason money was developed...as a store-of-value item that can be "exchanged" for desired goods.

So, unless your web developer wants a ham, I suspect it will be easier to pay with money.


hahahah so true.
I mean cummon. My experience is that nobody will give it their best if they don't see immediate rewards for their work, i.e. cash upfront.
I can tell you that the people who will want to get ivolved in somthing like this have to be either very good friends of yours, and they have to trust you greatly, or they will be beginners in their own right, looking for ways to gain some experience and possibly make some money. The first group is very easy to fall off, because people lose interest, you are friends, etc. etc. And the second group will fall off even faster. They will perform crappy work, or not even try hard enough, will never be there when you need them, because you are not paying them afterall and soon they will lose interest.
So good luck kid.
I suggest you get a job, or think of a low investment kind of product, like an info product, which can be started for a couple of hundred dollars.

[nghs22]

The idea of having ppl work for the eventual profits of your company is not a new idea. Its often used by scammers and ppl looking to "use" others for their own benifit.

The concept is that most ppl will not exchange their value (work) for money that is not allocated for them as a guarantee. Except of course for the naive, or the unskilled looking for a opportunity. You *may* b able to get a buddy to do ur website for the that agreement, but not any serious freelancer. If the other person you want to let in for a % has bills to pay right now, your offer may as well b the million in the suitcase he cant spend.

This is not an exchange of work for money, this is a gamble that maybe, under the right circumstances, people will get some money and even so, it may not even be in proportion to the value they contributed. This is where a fixed salary or hourly rate, or job cost come in to save the day and assure an agreed upon compensation for an agreed upon work value.

Without a product in hand, you have NO value, and you will have a tough time convincing others to trust you and that you will eventually give them value.....

Maybe refine your ideas a little, there definitely room for improvement. You are looking at it from the standpoint of your own benefit. Maybe look at it like you are a web or sunglass designer and some1 approaches you for for your service, how can they interest you

I concur completely

[eknapp]

Okay,

Let's not kill this kid's Dreamline. What he is proposing is possible, depending on the circles you travel in. The key is to get a hold of good people who, at the moment, have the time to spare to help you with your project. Only then will they be able to risk their time to help, because if they need their time for their own survival, then its not worth their risk.

Its kind of like getting a neighbor or good friend to help you fix your car on the weekend. He isn't working on the weekend, and he doesn't want to spend time in the house listening to the wife nag him, so for little or even no money, he is willing to help a friend out with a problem they are having.

In this type of scenario, you will have to have patience to get your project completed on their free time, and you will have to be persistent to keep the project afloat. Bear this in mind: none of Tim Ferriss's ideas are as simple as it was for him to write about them. Yes, businesses can be started from virtually nothing and eventually run on auto-pilot, but there are trade-offs in the start up process. Time is usually the trade.

However, once a cash flow is produced, you only need to fan the flame, and continue to reinvest the proceeds until the business is producing ample cash to fund itself and provide you with the living you want. Pick something easy to start, and that is easily scalable, and you are off and running.

eknapp