Startups | Are you an Effective or Efficient Entrepreneur? [Post]

Startups, the 4 hour work-week, timothy-ferrissHere is the scenario: You are an entrepreneur who thinks he has it all under control – managing all deadlines and micromanaging the world.

Then we find ourselves spending 10 hours in the day learning how to use basic brush tools in Adobe Photoshop, and similar software’s, for a simple edit that would take a basic designer 5 minutes to complete. Because we can handle it all. Sure, we may have the discipline, technical skills and competence to go through the learning curve process. And yes, there are times where you are just starting out, and need to save every penny. You do the necessary measures it takes to get the job done to become successful.

During the early start-up phase most of the momentum in a new company derives from the entrepreneur’s own self-sacrifice and commitment. You do almost everything by yourself, and your focus is on building enough cash flow so that you can start bringing in people you need to help your startup grow. This is the critical stage where you need to ask yourself the following question: Am I being Effective or Efficient?

“Effectiveness is doing the things that get you closer to your goals, Efficiency is performing a given task (Whether important or not) in the most economical manner possible. Being efficient without regard to effectiveness is the default mode of the universe.”- Timothy Ferriss

startups, timothy-ferriss, startup-lifeUnderstanding the importance of the 80/20 Principle…

Startup Entrepreneurs don’t conceive the importance of the 80/20 principal until it’s too late. The precept that 20 percent of customers equal 80 percent of sales applies to every dynamic in business, especially time management. The 80/20 rule, or the Pareto’s principle, is a fundamental cornerstone that is continually revisited in several different forms throughout the business life cycle. The Pareto’s Law can be summarized as follows: 80 percent of the outputs results from 20% of the inputs.

Startup Examples of the rule…

• 80% of revenue comes from 20% of customers.
• 80% of blog traffic comes from 20% of post types.
• 80% of marketing results come from 20% of marketing efforts.

The question that you are probably asking yourself is: Are the other 80% of the tasks worth it?

If you actually take the time to apply the 80/20 rule and analyze your marketing efforts, you’ll find that often you can cut off some of your tactics, tools, and expenditures without any damage to your startups organic growth.

If that is the case, then do it! You need to abandon the 80% of marketing that doesn’t work and reinvest those resources into the 20% that does. This is the kind of thinking you need to not only survive in business but prosper in the world of entrepreneurship.

Startups, the 4 hour work-week, timothy-ferriss, start-up-lifeStartups are all about resource allocation…

When you can identify what is important to your startup, your co-founders and organization will run more effectively. But remember, this does not stop at the organizational level, everyone in the startup benefits from the ability to prioritize and focus on the 20% of the input that result in 80% of the profits.

The secret to making the method work in your favor is to adjust your behavior and spend more time on the tasks that produce the greatest results.

You may need to delegate responsibilities—or re-appraise their value. Awareness is the key, as it is with every step in becoming more productive and effective. Realizing which responsibilities actually generate the most effective results allows you to give those duties the attention they deserve, which can vastly increase your output.


Furthermore, you need to build your startup and business plan around real quantifiable and measurable results. For example, a result is not working 100 hours in a week [like most]; it is completing a signed contract, or launching a complete prototype. As a startup entrepreneur, there will always be a million things to do than hours in a day. Learn to focus and prioritize on the important things that produce effective results and then let the momentum produce dividends.

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