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Life-changing strategy in a fast-changing world.

How to Stop Cheating Yourself, And Earn What You Deserve.

The Effort/Reward Matrix

Two hikers, both smitten by the Fastlane entrepreneurial bug, stood at the base of two different mountains, faces steeled, resolve unshaken. They weren't climbing for the view. No, these mountains had something else that lures you, me, and every dream-chaser up here: The Reward.

One mountain, which appeared less treacherous, promised a $50K trophy for the relentless soul who reached its peak. The other? A staggering $25M. Two mountains, two hikers, two entrepreneurial dreams. But here's the twisted truth: the mountains were exactly the same in every jagged rock and treacherous slope.

The first hiker, call him Billy Basics, chose the $50K mountain. He saw it as a win as the early path up the slope, a quick jaunt, looked easier. He thought, "I'll just start this dropshipping t-shirt company that every guru told me to start and earn some quick bucks." But that mountain, it had its own ideas, its own deception.

You see, countless other hikers saw the same thing Billy Basics saw: An easier early trek—a low entry barrier and a low bar for skills—NOT knowing that the mountain would still throw its storms, avalanches, and back-breaking trails at him later rather than sooner. The higher he climbed, the more he struggled.

The second hiker? Let's name him Sammy Success. He went for the $25M mountain, despite it looking more difficult. And guess what? His mountain didn't care about the prize either. It tossed the same hell at him, each step a battle, each week a different challenge to overcome.

Both hikers fought, fueled by a desire for independence, driven by their entrepreneurial spirit. Each wound was a lesson learned; each stumble a failure turned to wisdom.

Now, here's the gut punch: They both reached the top. They both won the prize. But Sammy, oh Sammy, he danced at the summit, knowing he worked hard and won a fortune that changed his life and his family. Billy? He just stared at Sammy, angry because he just endured the same hardened journey, except Sammy only got to pay his bills for the year.

Both hikers succeeded. And both endured a very similar struggle. But one changed his life; the other did not.

You see, the mountains don't care about the prize. They don't care about the business you're in. They're going to chew you up and spit you out, all the same.

No matter if you're starting a software company, a coffee shop, a landscape company, or an affiliate marketing business, you will pay the price in blood, sweat, and tears. You can't avoid the mountain, so why reward yourself poorly? Why are you cheating yourself with prizes that won't change your life?

This bring us to another truth:

You can't choose your mountain—the choice is an illusion—but you can choose your reward.


Pursue the right business. And the right business has the potential to change your life forever.

I mention this because a forum user recently expressed frustration with her business. Her business is publishing, namely, a niche sketchbook that a specific subset of artists could use. Is this relative value? Maybe.

The problems presented in this business venture are multi-dimensional.

First, the market size is terribly small. This aspiring entrepreneur is climbing a mountain with an understated, tiny reward. Her struggle will be as tricky as any entrepreneur, and yet, her reward for massive success is unlikely to change her life other than the experience it provides.

Second, the ability to access the market is also terribly difficult. How do you reach or advertise to this small subset of artists? It's like fishing for needles in haystacks, and once you find those needles, you need to convert those needles into buyers. Just writing about it gives me anxiety.

Graphically speaking, you can plot any business venture on what I call an Effort/Reward Matrix. Here it is:

sam altman

Notice the X-axis where there is no easy path. All paths are challenging, or worse, super hard. The problem is, most new entrepreneurs dabble in the STRESS SPOT and reward themselves poorly for success. If you could plot all the new business ventures on the Effort/Reward Matrix, it would look like this:

sam altman

Notice the congestion in the lower right quadrant, in the Stress Spot. This congestion also means more competition—a fact that drives up costs and lowers margins.

Optimally, your business venture needs to land in the SWEET SPOT, where moderate success can be life-changing. How? Follow the CENTS Framework and make sure your target audience is accessible.

  • CONTROL: Do you have reasonable control over your venture?
  • ENTRY: How easy is it to compete?
  • NEED: Is there significant demand? Are you solving problems or making things better?
  • TIME: Can you eventually divest yourself from the operation?
  • SCALE: Is the market large enough to change your life, and more importantly, do you have accessibility? Are there advertising mediums where you can target your audience precisely, like a marketing sniper?

As for that struggling entrepreneur trying to sell a sketchbook? Here's where I plot her venture, labeled F:

sam altman

Compare this with my current (and past) business ventures (A,B,C,D); they all land in or near the Sweet Spot. In fact, my productivity startup (D), GoalSumo, lands up near the top in terms of difficulty (and reward), yet, I don't expect success in this business venture to be any easier than running a forum or a publishing company. In totality, I expect the mountain climb to be difficult, all the same. But rewards are significant.

The Effort/Reward Matrix also demonstrates why I no longer invest in single-family real estate; its plot on the E/R Matrix just don't move my meter. Selling t-shirts? Starting a coffee shop? Same thing. These ventures are equally difficult, but their rewards are too low. There is another detracting factor: Return on Time Invested, and Return on Stress (or mental bandwidth, hassle, etc.). More on these two critical items in our next issue...

So, here's a few questions to consider:

  1. What reward awaits you atop your entrepreneurial mountain? Life-changing? Or a pat on the back and a few blue ribbons for your wall?
  2. Will your arduous journey be worth its reward? Or will it require another mountain journey?
  3. Where would you plot your business on the Effort/Reward Matrix?

Ensure your entrepreneurial journey is worth the trek because the journey won't spare you. Choose wisely, fight doggedly, and may your reward change your life forever.

MJ DeMarco, Entrepreneur, Author

PS: I created to help grade and evaluate business ideas on the CENTS + Accessibility scale. Feel free to try it out free.

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