Millionaire Fastlane Book Review by MJ Demarco
This book is one of the best books on Entrepreneurship in which the author sets five commandments to be in Millionaire Fastlane. According to the author, until and unless the business complies with the five commandments, it is not destined to be successful. These commandments are:
Command of Need, Entry, Control, Scale and Time (NECST).
Commandment of necessity:
Millionaires affect the lives of millions of people by adding some values to their lives and therefore they are millionaires. If the market does not care about your product or service, then you are not going to add value to the market and you are a failed company before it takes off. Therefore, each company must first find out if there is a need for the service or product that their company is going to offer or not.
So, we have seen test products that are sold for free to test the water. All they are doing is trying to find out if there is demand or not.
People often start businesses for the wrong reasons. They are good at something and very skilled and start a business about it. But if the market doesn’t care, it will be a failure because the market is a selfish place. He doesn’t care what you want, what you have, how good you are. The only thing that matters to him is what he is for them. If you add something of value to their lives then they will buy it, otherwise they will not buy it. So it’s a huge revelation for me and could be for many budding entrepreneurs.
Command of entry:
This is the second commandment for a successful business. If the barrier to entry is very easy, it means that millions will do the same and you will not have the ability to scale your business, you will have to lower the price and compete with those millions. Usually the price war hurts all parties. For example, if your business is building a website, blogging, and generating income, then there aren’t enough barriers to entry unless you’re trying to add some additional value to the market that no one else has added yet. An example that the author seldom gives is when he thought about starting the Limo business. He discovered that he had failed in both the first and second commandments. There was no need for a limousine business anymore and the barrier was very low to get into this business.
Command of control:
If you have no control over your business and have vested all authority elsewhere, you are doomed.
Many entrepreneurs start a company and then hire a CEO or CFO to take full control of operations or finances. They do not know anything about what is happening and that is the recipe for failure. Especially when entrepreneurs don’t have any basic financial knowledge like what a home loan is, how to calculate simple interest, but they hire an expert to help them make decisions. Since they cannot take a second look at the decisions made by their advisers themselves, they are likely to be wrong and the entrepreneur will have to bear the loss.
One of the examples given in the book on the benefit of controlling the business is given below. If you are a doctor working in a private care facility, it is natural to think that you are on the fast track because your magnitude (price / unit) is large and that will increase your net profit and therefore wealth. However, the control of the private care facility is not in the hands of the doctors, but of the owner. So it is he who is on the fast track, not the doctor, who relies on his intrinsic worth to increase wealth.
Commandment of scale:
The author gives an example of a hamburger stand outside a supermarket. No matter how hard the owner tries, he cannot scale his business and reach customers outside of the supermarket. So this business violates the commandment of scale. But an electronic store that sells some product on the Internet has an unlimited number of customers and therefore has the ability to scale its business to an unlimited level. However, if the entrepreneur can create a franchise of any burger shop, then he has the ability to scale and will be on the fast track.
The author gives an example of a quote from billionaire Mark Cuban who said that only one business is successful. Therefore, it is important that we undertake projects that can be scaled up. In baseball terms, swing for home runs, not singles. If you decide to play singles, you have to repeat the effort many more times.
The Fastlane wealth equation is:
Wealth = Net Profit + Asset Value
Net profit = Units sold * Unit profit
Leverage is created by the units sold. If you are selling hamburgers on the grocery lot, you are limiting leverage and therefore you are at the 15 mph highway speed limit. Also, you can’t increase the price of the hamburger, so you can’t control the unit profit either.
So you need to be able to reach millions of people to increase the number of Units sold or sell at a very high price to wealthier customers to increase unit profit values.
Command of time:
Time is the scarcest resource we have. Most people spend money frugally and time freely. That, according to the author, is exactly the wrong path to riches. Time is limited and money is abundant. The only difference between successful and unsuccessful people is the way they spend their time. The former value every moment of their life and use it to increase their self-esteem. The latter waste it on satisfying their immediate desires, such as watching television series, enjoying games, etc. for a long period of time, etc.
According to the author, Fastlane is not an easy path, but it sure should be a quick way to earn wealth.
As an accelerator, our goal should be to automate the journey. If you have a business that forces you to dedicate every moment of your life all the time and you always have to exchange time for money, it is a job masquerading as a business. It is a money tree that never grows.
It is normal to work more than 80 hours a week in the initial phase of a business, but it is not normal to work like this for the rest of life, which is normal for most people who work in normal life. One of the famous quotes from the book that is also often used on the outside is about how most people define normal. The normal thing is to wake up at 6 in the morning, fight traffic, work 8 hours or enslave 8 hours from Monday to Friday, save 10% and repeat for 50 years. The normal thing is to believe that the stock market will make us rich and the faster car and the bigger house will make us happy. The definition of normal is corrupted by society and we are conditioned to believe that. In short, the author believes that modern slavery is the norm and that is why only a few have the courage and intelligence to get out of the ordinary and drive in the fast lane of a millionaire.