The Incredible Secret Money Machine

The Incredible Secret Money Machine

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Description: Partial ebook upload of the classic Incredible Secret Money Machine, widely regarded by reviewers as one of the best small business books of all time. Presented here as a historic document with negligible revisions. Because so much has changed, so much has stayed the same, and so much "incredibly" seems to be once again coming back around.

 
Author: Don Lancaster (Fellow) | Visits: 4508 | Page Views: 5580
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Contents:
Don Lancaster's

INCREDIBLE SECRET MONEY MACHINE II

A HOW-TO COOKBOOK FOR SETTING UP YOUR VERY OWN COMPUER, CRAFT, OR TECH VENTURE.

U

ED AT IT ED IO N N EW !

P

D

Don

Lancaster's

INCREDIBLE SECRET MONEY MACHINE II

Synergetlcs Press
Box 809
� Thatcher AZ (928) 428-4073 �

85552

Copyright �

1978, 1992, 2010 by

Don Lancaster.

Published by Synergetics Press 3860 West First Street, Box 809, Thatcher,

AZ,85552.

(928) 428-4073.
THIRD EDITION FIRST PRINTING-2010

All rights reserved. Reproduction or use, without express permission, of editorial or pictorial content, in any manner, is strictly prohibited.

No liability is assumed for damages resulting from the use of the information contained herein. The only warranty, express or implied, is "approximate quantity one."

International Standard Book Number ISBN

978-1-882193-12-7

Printed in a tinaja near Thatcher,

Arizona, USA.

INTRODUCI10N TO THE SECOND EDITION

Fourteen Years Later...

History always repeats Itself. First as a tragedy and then as a farce. Somehow it Is has become the fall of 1992. This Incredible Secret Money Machine is now fourteen years old. And is selling better than ever. But the last remaining mountain of them has just vanished out of my storeroom. So a revision would seem to be in order. Probably the greatest indicator of your ongoing enthUSiasm Is how long you can keep your copy of an ISMM before it gets permanently ripped off. The average time seems to be fifteen weeks. A half life, sort of. Or maybe a time between reincarnations. I guess I am not into revisionism, so I won't. With a few obvious adaptions, most of this book is as accurate and as useful now as It was then. If not more so. Instead, I will leave things exactly the way they were and just add a few comments here on where we are and where we seem to be headed. And I will add a sorely needed and oft-requested index to round out this particular edition. When this ISMM was written, personal computers were wondrous beasties, and you had to continuously defend why you had one and what you did with them. These days, of course, a personal computer is essential for any money machine. At the very least, you should be comfortable with a word processor, a desktop publishing package and a programming language that you can relate to.

Intro

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The choice of a machine is simple. If you think computers are just a work tool like any other, go IBM. Should you believe computers are for fun and for computing as an end unto themselves, go Mac. Here's a few other money machine areas that somehow seem worth commenting on ...

networking
One of the biggest mistakes I have made over the years is not realizing just how important personal networking is. Or has become. Networking is simply associating with others, either one-on-one or electronically. Your personal network consists of people you know that are outside of your immediate family, work, or church. Who, for one reason or another, will either share your interests or can advance your money machine. Or expose you to ideas and concepts that you would not otherwise tune yourself into. Obvious ways to personally network are to go to club meetings, to teach or take any course, to attend events, write stories, participate in seminars and shows, visit unusual places, do volunteer service work, or run a voice helpline. Or simply get off the beaten path. It is hard to imagine any money machine these days that does not have and aggressively use a modem. There are tens of thousands of electronic bulletin boards which cover any and all imaginable special interests. Just a phone call away. The real biggies here are GEnie at (800) 638-9636 and CompuServe at (800) 848-8199. Together, these provide many hundreds of thousands of downloads on an incredible variety of topics waiting for you. At astonishingly low prices. The boards that charge are often much cheaper than the ones who do not. How's that again? The big boards are usually after-hours "load levelers" for major national tax preparers or computer service bureaus. These can have local access nodes in hundreds or even thousands of places in the country. So they are probably a local call for you, rather than a long distance one. Because of their higher profiles, these big boards also are more likely to have exactly what you need and higher quality information in general. It is probably not a good idea to start your own BBS. Most people grossly underestimate the time, the dollars, and the stupendous energy commitment it takes. They also ridiculously overestimate how many callers they will get how often or for how long. With most boards, you also will typically get only one upload for every 600 or so downloads. It is vastly better to work with an existing board or become an assistant sysop for one. The electronic networking solution that's been by far the greatest equalizer for me has been the Dialog In/ormation Service located at (415) 858-2700. For Dialog can supply you instant abstracts of all key papers in any technical field. From anywhere. At any time. While their

Intro

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$120 per hour charges might appear steep at first glance, Dialog is often by far the quickest and cheapest way to do any serious research. Especially if you do not have the foggiest notion of where to begin. Although you can subscribe to Dialog yourself, it is better to use the services of a qualified librarian who knows all of the shortcuts and has all of the expensive resource and access manuals. Dialog also now offers a quarter-price late evning service. Another great BBS of special interest to money machine folks is the Whole Earth Lectronlc Link, or the WELL for short. Found at (415) 332-4335. Lots here on alternate energy, and small-is-beautiful. I have much more info for you on what we are about to look at. The brackets in the text send you to some downloadable files of mine found in my PSRT roundtable on GEnie. Start with the directory and cross reference in files #478-482, followed by (#217 INTROAL.TXTj.
a sensitivity to others

One of the more fundamental facts of life is that friends come and go but enemies accumulate. It is super important in everything you do to try and look at things from "their" perspective. Bluntly, if you piss someone off, they can return to haunt you for years or even decades. Bruised egos tend to rot qUickly. And harm you forever in ways that you would seldom suspect. There are always multiple ways of dealing with any task. Some confront; others do not. Some are low level; others are not. Some are quiet; others can be unnecessarily loud. Some apply only precisely the minimum necessary force to do the job; others do not. Some put you center stage; others third party a granfallon or two. The ploy of avoiding zero sum games certainly still goes. Only much more so today. These days, it has a new name. It is now called seeking out WIN-WIN situations in everything you do. Especially if it involves others on an ongoing or long term basis. ReF ploys I'd like to rename and briefly expand on the original ISMM concept of having others pay you for your fun. Just what determines which direction the cash flows In any transaction? In lots of instances, the "obvious" answer that "they" think is good for you is not necessarily the only one possible. I'll define a Reversed Cash Flow, or ReF as any method you could conjure up to cause all of the nickels to head on out exactly In the opposite of the "usual" direction. And preferably end up in your own pocket. Knowing and using relevant and workable ReFs are key secrets to a successful money machine venture. Some ReF examples that have worked for me do Include: Having the Forest Service pay me to stay In a mountain vacation cabin as a Iotro 3

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fire lookout. Getting paid several hundred dollars a year (or similar perks) for drinking rootbeer every Wednesday night as a volunteer fireman. Forming various clubs and user groups to gain big discounts on all types of new software, hardware, and advance freebie technical info. Getting hired as a sysop on a BBS to pick up free access and actually getting paid a royalty as others call the service. Receiving free toner for testing to yield negative per-page toner costs on my desktop publishing. Or, becoming a developer or an Independent Software Vendor that gives you free or discounted hardware and software. Scams? Yes. And, no, they do not apply to everybody. And any specific RCF certainly will only work for a scant few of you. Your selected ploy does have to fit into the big picture of who you are and where you are heading. But, if you do tune yourself into the RCF ploy and always ask yourself how the cash flow for any transaction can be reversed, you'll be amazed at how many ways this virtually unknown tool can be put to use for you. One of the greatest and the most general of RCF scams is the adlJetorlal. An advetorial is any editorial material which purportedly provides useful and apparently complete end reader information not easily found elsewhere. While leaving a very strong perception in the reader's mind of who you are and what you have for sale. Along with a very strong urge to whip out their VISA card. Your key to acceptable advetorials is a fair lJalue received. The reader should walk away from your story with lots of welcome and useful information that would be difficult for them to find elsewhere. Stand-alone information that clearly needs no further involvement or input from you as an author or advertiser. At the same time, you want them to end up feeling that it would be very foolish indeed for them to not get some more from where what they already got came from. Ideally, your advetorial should be strong enough on its own to make your readers want to save their magazine forever, or else tear out your part of it. Another useful publishing ploy is the editorial exchange, in which you accept ad space as partial payment for editorial materials you submit as an author. This minimizes the magazine's cash out the door while giving you an ad at little or no cost. But never use any editorial exchanges for total payment. Always insist on at least partial cash. This prevents giving your time and effort away for nothing at all In return. [#208 ADVETORL.TXT)

bad

scenes

If you are in a poker game for twenty minutes and do not know who the mark is, then you are the mark. By the way, the term mark comes from the carney midway where suckers literally had a large 'X" dusted on their back with chalk. After a friendly pat on the back.

Intro

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Life seems to go in three year cycles. So every now and then it pays to take an inventory and see if what you are doing and who you are doing it with is what you really want. Are you now handling something for some organization that is being completely thwarted by some petty politics or childish ego games? Is the course you are teaching still relevant? Are you doing what you want with who you want? Are your biases and prejudices hurting you? Do you have., all the facts? What is working and what isn't? What is fun and what is not? Are the hours you are spending on any project paying for themselves or otherwise rewarding you? Are you ignoring obvious new directions? Is a guilt trip getting laid on you? Have one time friends become psychic energy sinks? Are church or family demanding too much of your energy? . Just like cleaning a closet, it pays to rearrange the scenery every now and then. Just decide that you are now going to cease certain activities outright, de-emphasize others, change yet others, and begin some things anew. And actually do it. As usual, the best way to get something to happen is to ask for it. The best way to prevent something from happening is to just say no. By far the best way to prevent a tug-of-war is to not pick up your end of the rope. Often, your best way to communicate is to tell someone exactly how you feel. Delay may be the surest form of denial. But dragging things out will often only make a bad scene worse. Cut it off now using the minimum possible force at the lowest possible effective level. And don't talk to anyone else about it. One of the biggest bad scenes around here at my Synergetlcs had been our foreign sales. Besides displeasing customers and losing time and money on them, we just weren't handling them well at all. So we simply stopped all foreign sales. And have no regrets at all.

Investments
Not much new here. If it calls you on the phone, it is definitely not an investment. Nor if it is now breaking new highs and drawing lots of media attention. Naturally, you adjust your investments to suit your lifestyle, your age, and your obligations. You do recognize that all investments are cyclical, having times when they'll do well and others when they do poorly. You avoid collectibles unless you are a collector, and works of art unless you are an artist. You use discount brokers and yuu do read the Wall Street Journal. As before, you invest in yourself. First and foremost. Keough plans are now called 401-K's. Besides providing you with a free alternative to insurance, they remain an all around good deal. The same goes for IRA accounts, but on a lower scale. How would you like a zero risk investment that pays 18% year in

Intro-5

and year out, absolutely tax free? With no need to so much as report your investment income? Simply pay off all of your VISA and Credit Reserve bills and tHen keep them that way. There is no other safe investment you can find anywhere at any price t1;tat can offer you even remotely this good a return. Supply side economics don't seem to make too much sense in the average money machine. Remember that a dollar unspent equals five or more dollars unearned. You should always think of any dollar that goes out your door in terms of the larger number of incoming money machine dollars needed to create it. I've recently expanded my trading of high beta stocks. Buy low and sell high and all that. Very sadly, those great Henry Lankford price histories are now themselves history. But quotes are easily gotten from on-line BBS services. Unlimited closing quotes at $5 per month. Or complete stock histories in machine readable form for ten cents a minute of downloading time. I've recently written a very useful stock trading analysis program. One thing the program brings home is that you will get eaten alive if you are not greedy enough. You'll do much better on the longer and larger price swings than trying to second guess things on a day-by-day basis. Which is similar to the engineering concept that most of the energy in any waveform usually will lie in its low frequency harmonics. [#221 GENIEVST.PS) and [#223 GENIEVST.TXT) My current strategy is to buy on a 30% drop and sell on a 30% rise of any high beta stock within its "normal" trading range. If your price seems "high", you'll get more aggressive on selling and less so on buying. Even shorting on any extreme up move. If the price seems "low", you get more aggressive on buying and less so on selling. You keep averaging down, no matter how much it hurts. Some of the stocks I have found attractive include Adobe Systems, which has conSistently given me a 60% average annual return, year after year since day one. Others of interest do include Seagate, Apple Computer, and Chips & Technologies. Beyond owning your own home outright, I'm not at all convinced that real estate is that great an investment. At least I've never done well with it. Ignoring hidden closing costs, real estate commissions tend to be ten times higher than those of other investments. Unlike most other investments, you are penalized for holding any land or buildings through property taxes. Your pOSition is a matter of public record. liqUidity is an outright joke. Bank and savings & loan fiascos are not. You might have liability, utility, improvement, maintenance, emotional involvement, and collection problems as well. And the property values change much more slowly than high beta stocks. If this does not dissuade you, do remember that the three most important value factors behind most any piece of real property are location, location, and location. And always get your own appraisal
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well before you ever close on anything. Do this Independently and separately from any apprasial done for you by a realtor or a lending institution. And do not tell anyone about it.

PostScript
Every few years or so, a new idea comes along that just leaps out at you with its freshness, uniqueness, and its overall vibes. An idea that you just know is inherently "right," is absolutely "correct," and above all is now and will be "you". Something elegantly simple that you can genuinely relate to, grab on and go with. For me, RTL integrated circuits; nickel-a-bit shift registers that fired the opening round in the personal computer revolution (TV Type writer, September 1973 Radio-Electronics); the incomparable KIM-1 microcomputer; and later on the Apple lie. All of these were "ideas of the decade" that ] centered several money machine concepts on and profited from. The PostScript computer language falls into the same category of being intrinsically wonderful. PostScript is one totally general purpose computer language that's roughly comparable to Forth without the religion. It is fast and fun to use and a beginner can immediately start producing award-winning results with it. As one of its rather minor and almost inconsequential features, PostScript is quite adept at making marks on pages. Infinite variations of mixed text and graphics marks that totally blow away all the earlier primitive attempts at electronic page composition. All done in a totally device independent way that freely lets you use any host computer and any output printer or typesetter. With stunning quality. If your money machine has anything at all to do in any way, shape, or form with dirtying up any otherwise clean sheets of paper, then you absolutely must be using PostScript. And do be certain it is genuine Adobe PostScript II. The imitators and hangers-on here are utterly apalling. Useful starting points for PostScript are my Intro to PostScript video and my LaserWrlter Secrets book/disk offering. Plus Adobe's PostScript Cookbook and their newly revised PostScript Reference Manual. By one of those astounding coincidences that seem to infest much of my writing, I do seem to have several of these In stock for you here at my Synergetlcs (602) 428-4073. And the PS found in my GEnie PSRT, of course, is short for PostScript RoundTable. Lots more in files [#120 WHATlSPS.TXTJ and [#109 RAWPS.TXTJ.

patents
What more can I say? Over the years, I have seen hundreds of examples of money machine people being severely done in by the patent system. Even murdered by it in several heart-attack-duringlotro 7

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litigation cases. And not once did I see anyone approaching the patent system on a small scale basis and profiting from it. Ever. Once again: Unless you are well within a Fortune 500 context, any and all involvement in the patent system in any y, shape, or form is absolutely certain to cause you the net loss of time, energy, money, and sanity. Besides ending up a totally useless and utterly unnecessary psychic energy sink. Th,? problem is not the patent system per se, but all the popular mythology that has built up around what patents are and how they are supposed to work. That quarter you mailed in for your classified ad "inventor's idea kit" in the seventh grade has done more damage in more ways to more people more often than you could possibly ever imagine. [#162 NOPATENT.TXT)

stalking the wild paradigm
A paradigm is just the way people perceive things to be. And a paradigm shift will occur whenever someone upsets the apple cart. Which might happen whenever any vastly new or different way of doing things becomes obvious. Or something becomes much cheaper or more widely available. In general, money machines do not work well in the "business as usual" times. It is only when some sudden and dramatic change or other fundamental shift in perceived values takes place that all of the new opportunities emerge. Your key opportunity here: The people who are now doing the shifting of the paradigm usually will not have the slightest notion what they are dOing, since they will always be rearwardly focusing on the way things were. Whenever a paradigm shifts, all sorts of brand new money machine opportunities immediately open up. Especially if you are quick on your feet and able to view things from a different perspective. Or can reduce the cost of something by 50: I, totally changing the markets to something utterly foreign to (and totally misunderstood by) "them" and the way things were. There are three obvious cases here. In the first, a paradigm shift does not take place and things remain pretty much the way they were. We can call this Buslness-as-usual. It's not in the least friendly to new money machine ventures. Some examples of Business-as-usual technology that seems to be getting nowhere fast are solid state Peltier coolers, alternates to the QWERTY keyboard, and those touch screens. The coolers remain ludicrously ineffiCient, while the keyboards and screens go heads up against deeply ingrained cultural beliefs. In the second case, a paradigm shift occurs and someone tries to ignore It. This leads to sucker bets and ratholes Into which an Infinite

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amount of time and money can be dumped with no visible effect. One example here is the belief by DEC that personal computers are just a passing fad and that VAX will eventually reign supreme. Other obvious sucker bets today now do include the NeXT computer, that UNIX operating system, the TrueType absurdiosity, Dv1 video, and Teletext systems and services. In the third case, a paradigm has clearly shifted and others have yet to take advantage of that shift in a big or mainstream way. We can call these GoFer situations. Herein is where your main money machine opportunities lie. I've recently covered dozens of GoFer opportunities in my Blatant Opportunist and my Hardware Hacker columns. But as I see it today, the two biggest opportunity areas lie in Book-on-demand publishing and desktop finishing. Plus a small handful of other interesting new areas where paradigms have clearly shifted. [#243 PARADIGM.TXT) Let's look at a few of these in turn...

book-on-demand publishing
Since the original ISMM was written, things have gone very, very wrong with traditional book publishing. As an author with 26 books, 2 million sellers, and over 1600 articles in print, I seem unable to get any traditional pUblisher to so much as return a telephone call. What went wrong? The days of sending a tech book in and having It promptly published and then selling forever are clearly over. We're seeing all these mergers that leave fewer places to send a book. Then we had those franchise chain bookstores drive out all of the mom-and-pop operations. While all of the mom-and-pops typically stocked 60,000 titles, the chains usually carry ten copies each of a mere 6000 titles. And those chains will typically pull a book after 22 weeks on the shelf. Add to this some really bad authors grinding out monumentally atrocious trash on unreleased computer systems that they knew nothing about and spent no time with. Add the rise of those Infamous publisher's committees who, while knowing absolutely nothing about you or your readers, will sit on a book for fourteen months and then reject It as "untimely." These turkeys have honed triage to a fine art. If there are other books on your topic, the market is "saturated." If not, it is "unproven". And If you actually sell some books to verify the market, you are guilty of the unpardonable sin of "skimming". Along with the "creative accounting" and return credit rates that often make an author's advance the only cash they will ever see. But these problems were all minor compared to the big monkey wrench the IRS threw into the works. Believe it or don't, the IRS now pays publishers to shred books. In fact, more books have recently gotten shredded to please the IRS than were burned In all the dark

Intro - 9

ages put together. Sad but true. This Orwellian monstrosity came about by a requirement that all leftover volumes are carried at their full value, rather than their scrap or remainder value. The result of this monumfantal stupidity was the virtual elimination of backlists. If a title drops a notch on the best seller list, all of the remaining copies promptly get shredded. But danger and opportunity are the opposite sides of the same coin. They even share the same Chinese ideogram. The way around all of this total crash-and-burn of traditional publishing is a newly emerging opportunity which I like to call Book-on-demand publishIng. When doing Book-on-demand publishing, volumes are printed and bound only when and as ordered. It is usually very much cheaper and ridiculously faster to Book-on demand publish, especially if you do not know how many copies you are actually going to sell in what time frame. With Book-on-demand publishing, authors can now be paid a living wage. Their royalties can now be paid on an hourly basis. As only the needed books are produced when and as wanted, there are zero remainders, returns, damaged, or shopworn copies. Changes and corrections can be handled at any time. And each reader's name can be embossed in gold on the cover. Or otherwise customized. And there are no inventory penalties since there is no Inventory. Your time from an author's submission to your final and out-the-door sales is measured in minutes rather than years. And you have total control over your own product. Best of all, you get to make your own mistakes, rather than paying others to make them for you. As you might have guessed, I am very big on Book-on-demand publishing. The process works quite well for me now and is getting much better. Within several years, the quality of Book-on-demand should appear as good as the finest of traditional publishing. At significantly lower costs. I could eventually see Book-on-demand distribution on CD ROM where hundreds or thousands of possible titles share an attractive end-user printing and binding kit. The downside? Book-on-demand is not quite there yet. It does not at all address distribution problems. Binders and duplex printers need Improvement, as do cost controls and production shortcuts. And it is best used for markets of 5000 or fewer known sales. If we were to reduce Book-on-demand to a few key secrets, it would go something like this...

1. 2. 3. 4. 5.

Use a fast PostScript II duplex printer and SCSI hard disk. Do your own repair work and toner cartridge reloading. Precompile your PostScript code to maximize speed. Always edit after typesetting, and never before. Be sure to keep everything in house, local, and simple.

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Needless to say, I could (and probably will) write an entire tome on Book-on-demand publishing. For here and now, though, my BOD is probably the single greatest emerging money machine opportunity ever. And there are many possible ways to profit from it. Today and in the future. [#410 DEMAND.PSI

desktop finishing
These days, it is trivially easy to grind out high quality custom text and graphics on your kitchen table. The only little trick remaining is converting those piles of pages into useful final products. Unfortunately, the traditional bindery materials and machines are often outrageously overpriced. Worse still, they are usually marketed only through unbelievably incompetent and arrogant sales people. Instead we need brand new ways of handling all of the traditional bindery operations. Delivered directly to the zillions of new small scale end users at sane prices. Perhaps in the form of kits or blister packed semi-kits priced in the $9 to $99 price range. I will call this new approach to low end bindery desktop finishing. Here are a few suggestions on some of the stuff that is desperately needed now ...
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simple card slitters- Making custom business cards is easy, but accurately cutting them is definitely not. Some new method to automatically cut up all your cards is needed, either in a single whump or in a two-step pass. Possibly using giant razor blades that are surprisingly cheap. Or useful preperfing. toner cartridge refllllng- The cartridges used in laser printers list for $135 and are only good for several thousand copies. Yet you can easily refill these in a simple two-minute process that costs as little as $5.50. A whole cartridge refilling industry has emerged, complete with its own trade journals and industry associations. While toner recharging is now highly competitive, lots of opportunities remain. (#224 GURU69.TXTJ and [#226 HACK40.TXTJ. Omnlcrom and Kroy Color- Both of these are obscenely overpriced and monumentally mismarketed product lines that instantly convert plain old toner into brilliant foil colors. The materials are basically hot stamp foils that cost under two cents per sheet in quantity. The process works out surprisingly well, especially for spot color on letterheads and business cards. applying heat and pressure- A low cost pair of powered hot rollers of a variable and a precisely regulated temperature have lots of new uses for desktop finishing. First for Kroy Color
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certainly be using you to its own profit, having you do what it wants rather than what you want yourself and your money machine doing. It may even insist on such dumb things as your being at a certain place at a certain time, wearing spedfied costumes, or paying tribute to others in its hierarchy. It may even think it is giving you security or that it owns you in some way. Several different sources of income are much better. It's usually eas ier to find ten places to scrape up a thousand dollars a year than one that can get you ten. But, your money machine will work best of all if it has hundreds or, better yet, thousands of tiny sources of income. There are several good reasons for this. No customer will think he owns you if he is one among unwashed thousands. Customer expectations will also usually be lower since they are probably dealing in a smaller way with you. Your customers will only come to you when they genuinely think they need you, rather than figuring out things for you to do to keep you busy all the time. Better yet, if you can get enough small customers, they will start to obey the statistical laws of large numbers. This means you will be able to predict future sales and cash flow with good accuracy. And, should you lose a customer or two, it's not too bad if there's lots of others left over. Those same laws of big numbers will warn you when you are about to lose bunches of customers--and maybe even suggest what you are doing wrong as well. Eventually, several of the smaller customers will become bigger ones that take up more and more of your money machine's product. This is fine when it happens, but it is not something you want to aggressively go after when you are starting out The important, even crudal, point is to never let any one customer dominate your money machine to a point where he is in control. Should you ever end up with one very large customer and many small ones, arrange your money machine and your whole lifestyle to live within the nickels generated by all the smaller sources combined. Force yourself to be independent of the income generated by the big gie. Funnel this extra single-source income into improving your money machine, into the "investments" of the final chapter, or into having fun-but always keep this extra income separate from your bread and-butter smaller income sources. Sometimes, working through a few major customers can't be helped. This is obviously the case with a book, unless you self-publish. When this happens, make sure your major customers in tum base their sales or their customers on many small sources. Having many clients or customers yourself is best, but having them "once removed" is still a workable route.

12

and have a third-layer diagonal flap. What's obviously needed here is a total redesign of the envelope so that the sender and sendee addresses are both laser printable on a single flat and unpuffy sheet that later folds over onto itself.
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and a lew loose ends- We need a cheap comer rounder. And a low end folder, especially one that does stuff other than a simple business tri-fold. Shrink wrapping and vacuum packing stuff could definitely be improved. Something like a Meals in Minutes vacuum packer using heavier plastic stock. Although there already are some ways to handle die cutting on your laser printer, much improvement is possible. Padding presses used for temporary binding of notepads and calendars. New transfer masks for silk screens and sign cutting. A simple manual coater to apply a varnish or a uv-curing overlay. Sanely priced pad printers designed to print on golf balls, pens, eggshells, ad specialties, whatever. [#76 DTFlNISH.TXTJ
other emerging opportunities

Naturally, everyone's viewpoint is different. But it seems to me that Book-on-demand publishing and desktop finishing are probably far and away the greatest pair of money machine concepts available today. Especially when properly combined with the PostScript language. Opportunltes that can be an end in and of themselves, or the means to getting to where you are really headed. Or both. It seems to me there are also lots of other paradigm shifts taking place that can lead to other money machine opportunities. Here are a few of them, albeit more technical ones ...
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Santa Claus machines- Otherwise known as desktop prototyping systems, these are tabletop systems that instantly create real parts In much the same way that a laser printer produces hard copies. Some are based on light hardening of a liqUid photopolymer, while others will sinter or fuse together powders. Much remains to be done here, especially on the low end for hackers and hobbyists. direct toner printed circuits- Toner makes an excellent etch resist. All you have to do is properly transfer it to a printed circuit board. Which can let you etch boards in minutes for pennies, instead of taking months and hundreds of dollars. wavelet theory- It's coming on like Gangbusters. Elegantly simple new math that completely and totally blows k1unky old Fourier analysis out of the water. In the process, It is totally revolutionizing everything from picture compression through seismography. There is no advanced electronic topic anywhere Intro -13

*

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that will not be profoundly impacted by wavelets.
* visible laser diodes- The prices are now dropping radically,

and an easy-to-use $5 replacement for a helium-neon laser should soon be with us. They are small, bright, rugged, reliable, and easily powered from a single flashlight cell or two.
* waterlmlves- A waterknife can cut anything from chocolate

cake to steel ingots. QUickly and cleanly. Cool, too. What is needed is a low cost home shop radial arm waterknife that does everything from precision woodworking and dressmaking on through pizza slicing.
* magnetic refrigeratlon- Although still in the lab, magnetic

refrigeration applies magnetics and special materials such as gadolinium to pump heat. And does so as much as fifty times more efficiently than any existing systems. While intended for supercold applications, this process also can work near or above room temperatures.
* navlcubes- The first person to come up with a

$5 device that always knows where it is and which way it is pOinted Is going to run away with a very large bag of nickels. Recent advances in accelerometers, laser gyros, and GPS international electronic navigation services make it possible.
that combine a total visual display, power gloves, a treadmill, and tactile sensors or whatever to create a controlled artificial environment. Uses range from military Simulators through architectural walkthroughs to mind-blowing multi-person video games. Ultimately, dildonics will impact everything from model railroading to microprocessor controlled party dolls. Although I can see some very interesting product liability issues arising on the latter. Painful, too.

* dildonics- Also known as virtual reality. Super simulators

*

brain parity- Within a very few years, machines will be smarter than people. Perhaps within a decade. Driven primarily by stunning advances in low cost but enormous memory chips whose technology is already in place. Which will lead to one of the most powerful and most fundamental paradigm shifts of all time. Ever. There ought to be a dollar here somewhere. See GEnie PSRT file [#116 EMERGOP.TXT) for more details.

* fuzzy logic- Instead of clean cut yes-no deCisions, fuzzy logic

weighs factors and deals with probabilities. It reasons more the way that people do and is more adept at dealing with the real world. Some important early applications will be in home air conditioning, producing more comfort at lower cost, and for

Intro -14

automotive transmissions and engine controls.
*

hypermedfa- This is simply information you can nonlinearly access six ways from Sunday. Apple's Hypercard and Roger Wagner's HyperStudlo are typical products. The model is a room full of Rolodex cards which can contain words, pictures, sound, or activities such as phone dialing or animation. While especially useful for training and educational stuff, hypermedia represents a fundamental change in how we communicate. shared SCSI comm- At this writing, PostScript laser printers
are being ridiculously and horribly baud rate limited with the primitive communications systems used by Apple and IBM. An instant 50: 1 or higher speedup in laser printing times Is now possible, based on a simple two-host local SCSI network. But it is being fought tooth and nail by "them." [#106 GURU64.TXT)

*

*

CD ROM- A single compact disk holds up to half a billion characters of information. That's as many as several hundred books. Mailed once a month, a CD ROM is the equivalent of running a modem contInuously for the whole month and then some. We are now at the chicken-and-egg stage. You can now master your own CD ROM tor $1500 per hundred copies. But within a very few years, erasable CD disks will be as cheap as floppy disks are today.
fractals and chaos theory- Nobody's yet all that sure what good this stuff is, but it sure looks pretty. Stunningly so. And if the underlying strange attractors for any weather patterns and stock market pricing are ever discovered, some very profound happenings may be coming down. See [#84 FRACTFRN.PS) and [#106 GURU64.TXT). ac speed controls- To date, we have no effective low cost solution to controlling the speed of a small ac induction motor over a wide range. But the first person to come up with one will walk away with a rather large bag of nickels. The recent drop in power semiconductor costs and new improvements in switching technology now make some stunning breakthroughs possible. A related opportunity: Converting car alternators into low cost power stepping motors for robotics and machine tool controls. Or switched reluctance drives. caller ID- There's scads of new telephone services coming on line, but none other has created the hacker interest that caller number identification has. Among its other superb features, when you come back from lunch, you have a complete list of everyone that tried to phone you while you were gone. The opportunities with linking the id to value-added services seem

*

*

*

Intro

-

15

limitless. [#275 HACK43.TXT) and (#276 HACKFG43.GPS)

The numbers In parentheses I've just shown you are the GEnie PSRT downloads that you can grab for more background info. I do have much more available for you on any and all of these topics and others like them. Just give me a call for further references. where to from here?
Well, that's sort of up to you. But there are lots of reasonable and workable new networking opportunities for extending your money machine well beyond what you are reading here. Let's see. I do offer a no-charge voice helpline you will find at (602) 428-4073. Your best calling times are on weekdays 8-5 Mountain Standard time, year round. Yes, visitors are welcome. But note that gurus are supposed to be hard to reach. First because it adds to all the mystique and second because the Guru's and Swami's union local #204 rules demand it. At any rate, there's a seven hour drive involved in getting to the nearest airport. And, sadly, to the nearest decent bookstore or even remotely edible restaurant. On the other hand, the 10,400 foot high mountain in my front yard is severely infested with tlnajas and waterfalls, and my back yard is obscenely littered with swimmable streams and hot springs. The side yards? They are called Wilderness Areas. Fishhooks on the right and Gila on the left. I am also currently the sysop for GEnie PSRT, a forum that you'll find very strong on money machines, Book-on-demand pUblishing, hardware hacking, midnight engineering, stock investment analysis, meowwrrr pffttting (don't ask), and, of course, tfnaja questing. The charge for a typical file download is twenty cents or so. You can get your voice connect info for your area by calling (800) 638-9636. Other areas of GEnie you might find of interest are HOSB for home office and small business topics, and DTP for desktop publishing. Plus the free stock quotes, reviews, and all of those other computer and tech support roundtables. One superb money machine publication is Bill Gate's Midnight Engineering, at (303) 225-1410. I have got a Blatant Opportunist column here. But the best money machine magazine of them all does remain the Whole Earth Review at (415) 332-1716. I also have a Hardware Hacker monthly column in Electronics Now magazine (516) 293-3000 and a Resource Bin column in Nuts & Volts at (714) 371-8497. I also do run an occasional story in Jeff Dunteman's great PC Techniques magazine at (602) 483-0192. Sadly, my LaserWrlter Corner and the Ask the Guru columns are currently seeking a new home. Computer Shopper has told me there

Iotro -16



Is no longer enough room in their magazine for stories which only generate 85 end user helpline calls a day. So, these are now being electronically published on my GEnie PSRT. Yes, I do self-publish full reprint sets. Both hard copy and electronically. . Columns have a way of changing magazines suddenly, so give me a call on our helpline to find out what is current or new. We also do custom consulting in a number of fields. Most of those "good guys" names and numbers for useful suppliers have been gathered together into the Hard wa re Hacker and A sk the Guru reprints, while an annotated "best of the best" appears on PSRT as file [#80 MYFAVOR.TXTJ. Finally, I've started up a very loosely knit consultant referral service, mostly made up of individual money machine ventures. The referrals are free to the seeker. To get listed as a resource, send me a letter of who you are and what you do. There is a flat five percent referral fee to the prOvider, payable on a when and as completed basis.

a /inal thought
Many years ago, I was attending a folk concert. The opening act was a single and an unknown flute player, performing in front of the closed stage curtains. His job was to warm up the audience for the high priced help that was soon to follow. He was good. Very good. But as he went along, the music started getting strange and finally downright weird. He was playing chords on his flute, along with notes with unbelievably strong tonal structures. Eventually, the music turned into bunches of Impossible sounding and god-awful squawks. Almost all of the audience got bored and restless as the music seemed to deteriorate. Just then, I happened to notice a friend beside me who had played in and had taught concert band. He was literally on the edge of his chair with his mouth open. He briefly turned to me and said very slowly, ''You can't do that with a flute. It is not possible." Of the thousands of people in the audience, at the most only five realized they were now witnessing a once-in-a-lifetlme performance involving the absolute mastery of a very difficult musical instrument. To nearly everyone else, It sounded like a bunch of god-awful squawks.

Always play for those five.
- Don Lancaster Thatcher, AZ

Intro -17

Contents
zero Find Qut How I Make Money-Send Five Dollars and Ninety-Five Cents to
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two Secrets II-Tactics 27

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three Getting Started 43

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four Keeping Informed 59

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five Communications I-Words 79

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six

Communications II-lmages

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95

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Some Unmatters

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. 113

eight Tax Dodges
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129

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"Investments"

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143

this book is dedicated

to

the quest for the perfect tinaja

All opinions expressed are solely those of the author.

-

ZERO

-

Find Out How I Make Money - Send Five Dollars And Ninety Five Cents to

�.�

If this was one of those get-rich-quick books, we would probably start out by telling you how many zillions of dollars I am making and how I need a wheelbarrow to haul it daily to the nearest bank. Well, I don't use a wheelbarrow. The rattrap carrier on my five speed bicycle works just about as good, and there's no point in going to the bank every day, particularly since it is closed on weekends. And, no way am I into zillions of dollars. Just into the fractional megabucks, nothing more. At least just yet. But it's something I can live with for the time being. All of this good stuff is done with my incredible secret money machine. Your incredible secret money machine is your own small computer, craft, or technical business. Done within the guidelines of this book, your incredible secret money machine can make you filthy rich beyond your wildest dreams. We are going to look at lots of the nuts-and-bolts details of getting your money machine off the ground and flying right side up. That's what this book is all about. But, before we even start, there's a few entrance requirements we have to agree on. Here are the basic beliefs you must have to build your money machine on:

/frst, you have to be heavily Into a technical or craft trip on a total lifestyle basis.
The absolute single most important thing in your life has to be doing something technical or artistic in a better and a different way than anyone else. You can decide what the trip is-it can be action in-motion photography, low-cost hobby computer hardware,
5

improving weaving looms, doing quality printing and presswork, developing sanely priced small business computer software, building furniture, developing alternate energy systems, sailing, ceramics, robotics, underground housing, portraiture, blacksmithing, commu nity access communications, or just about anything else that is both highly personal and creative. Your own trip has to be the absolute center of everything you do, everything you work with, and everything you believe in. Doing it has to be much more important to you than making money, more impor tant than worrying about what people think, and more important than behaving, competing, or complying the way that others think you should.

second, you must want to stay In control.

You have to feel that everything in your money machine reflects you and that purposely keeping the scale of your money machine small is the only way to keep in control. This means you won't want to spend much of your time hassling others, reporting to others, or com peting with others in any way, shape, or form. For your money machine to work, you have to want to spend much of your time, energy, and effort improving both yourself and the general goodness of the technical or craft trip you are into.

third, your Income goa's should be Just enough to keep going

Getting filthy rich should be nowhere in your plans. So long as you can continue doing what you like in the direction you want to go, that's all that should matter. The great irony of your incredible secret money machine is that the less you strive for income, the more of it will come your way, and, more importantly, the more you will be able to do with what you already have. Any time or effort spent directly toward making money is time not available for your main trip. This is wasted time and energy that even tually hurts you rather than helps.

fourth, you have to be gentle.

Your incredible secret money machine has to be gentle on yourself, gentle on people, and gentle on the environment Your money
6

machine should be forever small and decentralized. It should never compete head-on with others. It should complement and advance what others are doing. Your money machine's products should gen uinely help people at a fair or more-than-fair price, never being a ripoff either to suppliers or to customers. If your particular money machine is into high technology, make sure it is appropriate technology used only when it clearly and genuinely is the best approach to what you are doing.

and so . . .

Unless you are willing to let these four beliefs be the foundation of everything you do with your money machine, very little of this book will work for you. Let's see if you can't second guess some of what we're going to show you about your money machine by taking a simple quiz. If your money machine is to be based on our four guidelines, which of the following do you think are important?
Not Avoid at Essential Important All CoeD
Adequate advance financing Aggressive marketing Creative management Solid patent protection Tight employee security Practicing the business of business

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0

Good high traffic location
Strong legal and financial advice Heavy use of other people's money

Tota! new product secrecy
--

7

Now-and I hope you are ready for this-score yourself one point for each "avoid at "all costs" box, and zero for everything else.A pass ing score is + 10. Surprised? That's why the whole incredible secret money machine idea works. We'll see why everything on this list is very bad for your money machine, as is much more of traditional business advice. Since our four basic gUidelines are vastly different from the "do unto others before they do unto you" philosophy common to much of the busi ness world, it's no wonder that we need a different set of rules. As we'll see in the next chapter, having enough advance financing is the absolute single worst thing your money machine can have. Let's go on and take a much closer look at your incredible secret money machine. We'll first check into the key strategy and tactics secrets, followed by ways to get started and to keep informed. From there, we'll go on to communications, both words and pictures. I am personally very heavy on communications, since that is the key to my own money machine. After that, we look into some unmatters, tax dodges, and a final look at "investments," whatever they are. As we go on, you'll find that this is a book of contrary opinion whose main point is that doing the exact opposite of traditional beliefs and advice usually lets you end up far ahead. Everything here either works or seems to work for me. I believe and follow pretty much everything we're about to look at. Now, admittedly, it may be that my own money machine works in spite of some of this rather than because of it, but I'm not about to change things to find out. Many of the ideas we'll be looking at are not mine, but are bor rowed from people I believe in. For instance, you'll find lots of the small-is-beautiful of Schaumacher and Callenbach, and much more of the appropriate technology of Brand and Baer. Conviviality belongs to Illich, while the intelligent ignorance concepts are from Kettering.Any thing far off belongs to the Batwing Hamburger Snatcher. Do-more with-less, of course, is pure Fuller. And granfalloons are a Vonnegutism. By the way, nothing is made up. All examples and ideas are based on real people running or getting run over by their own real money machines. So .... Onward and upward. Or, far off.

Or whatever.

8

Your incredible secret money machine only will work if . . . *You are into a technical or craft trip on a total lifestyle basis. *You want to stay in con trol. *Money for money's sake doesn't matter. *You are gentle to others and the environment.

9

01

- -=:.:-==;;, - - -


C: 'OF .... -...z::t

-

- ......

-.::

ONE

Secrets 1- Strategy
You can call any larger, long-term detail of getting your money machine in gear a strategy, while an everyday fine point is a tactic. In chess, checkmating the king is the ultimate strategy, while concentrat ing your power toward the center is an intermediate strategic goal. A move of "pawn takes queen, check" might be a good tactic or might not, depending on the skill of your opponent. Your money machine is driven by a combination of the strategy and tactics of this and the next chapter. Not every principle will apply to every money machine. The incredible secret money machine belong ing to a free lance science author is obviously going to differ from that of a stained glass artisan, and both of these will differ from the machines belonging to a computer art freak or a graphics designer. But, as you look around yourself at the incredible secret money machines of others, you'll find that the better running machines use as many of these secrets as possible. So, let's tum to some strategy first:

strategy secret-have Income as possible.

as

many different sources of

You can call them customers, clients, users, patrons, or anything you like, but any money machine will need a continuous source of nickels to keep running. At the beginning, you have a choice of having one humongous source of nickels, several smaller sources, or bunches and bunches of very small sources that add together to handle the care and feeding of both you and your machine. Having only one source of income is so incredibly stupid that we won't even talk about it here. Whatever that single source is, it will
11

certainly be using you to its own profit, having you do what it wants rather than what you want yourself and your money machine doing. It may even insist on such dumb things as your being at a certain place at a certain time, wearing spedfied costumes, or paying tribute to others in its hierarchy. It may even think it is giving you security or that it owns you in some way. Several different sources of income are much better. It's usually eas ier to find ten places to scrape up a thousand dollars a year than one that can get you ten. But, your money machine will work best of all if it has hundreds or, better yet, thousands of tiny sources of income. There are several good reasons for this. No customer will think he owns you if he is one among unwashed thousands. Customer expectations will also usually be lower since they are probably dealing in a smaller way with you. Your customers will only come to you when they genuinely think they need you, rather than figuring out things for you to do to keep you busy all the time. Better yet, if you can get enough small customers, they will start to obey the statistical laws of large numbers. This means you will be able to predict future sales and cash flow with good accuracy. And, should you lose a customer or two, it's not too bad if there's lots of others left over. Those same laws of big numbers will warn you when you are about to lose bunches of customers--and maybe even suggest what you are doing wrong as well. Eventually, several of the smaller customers will become bigger ones that take up more and more of your money machine's product. This is fine when it happens, but it is not something you want to aggressively go after when you are starting out The important, even crudal, point is to never let any one customer dominate your money machine to a point where he is in control. Should you ever end up with one very large customer and many small ones, arrange your money machine and your whole lifestyle to live within the nickels generated by all the smaller sources combined. Force yourself to be independent of the income generated by the big gie. Funnel this extra single-source income into improving your money machine, into the "investments" of the final chapter, or into having fun-but always keep this extra income separate from your bread and-butter smaller income sources. Sometimes, working through a few major customers can't be helped. This is obviously the case with a book, unless you self-publish. When this happens, make sure your major customers in tum base their sales or their customers on many small sources. Having many clients or customers yourself is best, but having them "once removed" is still a workable route.

12

strategy secret-have complementary sources o/Income
You can call this the "if the right one don't get you the left one wiD" approach. Arrange your money machine to give you at least two products or services that behave differently with regard to the effort you put in and the nickels you get back. Here's some real-world .examples: combine a print shop with a



sPecialty

direct-mail bookstore



merge a paperback book exchange with a copy service



write user-oriented textbooks and design electronic kits
silk screen funky T-shirts, signs, and electronic PC boards as wen as being the only local litho service provide custom millwork along with authentic replication of 17th century furniture be both the best sign painter and the best auctioneer in town offer wilderness guide service along with trail map sales and free lance wildlife photography run a photo studio in combination with a beginner's photography school and by-the-hour darkroom rentals











and, no way could I make this one up


.

.



combine a transcendental meditation temple with a firewood haul ing service

Each of your complementary activities should cover the weak spots of the other. One may be low profit or low volume but steady and sure. Another may be very rewarding and pay very wen, but take extensive time or effort. Or be seasonal or high risk. This complementary idea is nothing new. A car dealer may offer new cars, used cars, car repairs, a body shop, finandng, and fleet leasing services. Each reacts to economic conditions in a different way. TItle companies and realtors always seem to be next door to each other, as do insurance outfits and savings-and-loan institutions. In an these cases, all bets are hedged with complementary sources of income. Eventually, one of your complementary money machine parts may take over and dominate the rest. This is fine and almost unavoidable, so long as it happens wen after your money machine is started and

13

running well enough that a hedge is no longer needed. Most often, the part of your machine that takes off will surprise you. It rarely will be the exact direction you started out in. This points out another reason for the complementary sources-to expose yourself to as many possi ble directions for your money machine. Once you are inside your own money machine, reality will assume a newe perspective and change rapidly, so you'll want to expose yourself to as many options as you can. Your complementary income sources can be just about anything. Often, the further out they are, the better they will be for you. But, there is one super-important limitation to what you pick for your com plementary sources. Remember that the first and most important goal of your money machine is to be into some technical or craft trip on a total lifestyle basis. Everything you do should aim directly at this goal. Ideally, all your complementary sources should do this for you. At the very least, any and all nickel sources should be consistent with your beliefs, goals, and lifestyle. Under no circumstances should you ever be into anything just for the money.

strategy secret-a'ways work toward de/erred Income

What you do for your money machine should generate nickels both today and tomorrow. You should work toward automatically guaran teeing yourself a long string of future nickels that needs little or no more attention from you. This is admittedly very tricky to do, but if you can pull this off, your money machine will fly by itself, freeing you in the future to do bigger and better things. Book royalties are a good example. Once you've written the book, it can generate income for years on end, without much further atten tion on your own. Manufacturing royalties for electronic kits are another route to future nickels, but this tends to be riskier, much shorter, and has a far lower return. Software tapes for retail computer store distribution are a new and largely unexplored way to bring future nickels to your doorstep. There's more subtle but equally important ways to do the same thing for just about any money machine. Simply arrange things so your customers or clients will want to return for more. This is an obvi ous route toward some future income. Working out an art technique and perfecting it so that future prod ucts will be simpler and easier to do is another example. For instance, if you are into computer art, getting your software up and running, finding a plotter, and getting decent first-time results will take lots of
14

time and effort. But, once your "front end" effort is complete, generat ing new artwork and copies in the future is a matter of loading the right random numbers, or even letting the poor computer draw every thing it knows and then picking only the good ones. Drafting a set of underground housing plans, how-to details on a solar cooker, or alternate energy system research may also take a lot of front end time and effort. But once this effort is done, there are long-term plan sales, stories and articles, kits, assembled units, teach ing opportunities, products that expand on what you have already done, and even T-shirts and posters. It's always a good idea to hedge your bets by having your present effort work toward several future income goals. A hobby computer product development can be several magazine articles, a technical paper, a design contest entry, a book chapter, a kit design for a manu facturer, a thesis or project for a school course, and a way of training yourself for more and better things. Besides all this, it should also be a challenge and a lot of fun. Always look for at least a "two tone" approach to the time and energy you put into your money machine. Do things that pay you reasonably well now, but that also have the long-term potential to generate nickels on their own without much further help.

strategy secret-have as much personal value added as you can Your personal value added is the extra effort, energy, and time you put into your money machine that makes the difference between what goes in the hopper at the top and what comes out the bottom. For your money machine to work, your personal value added has to be far and away the single most important part of your final product. As a ferinstance, let's talk about an ordinary piece of typing paper. If you are running an office supply store, you can make a penny on this piece of paper. That penny reflects the difference between the wholesale price and your selling price. Your personal value added here consists of what you put into making your store attractive and in how you relate to your customers. If, instead, you are running a typing service, you can now buy the paper for a penny and sell it for fifty cents or more. Now, you have over fifty times the return since your personal value added consists of putting information on paper just the way the customer wants you to.
15

Things get much better if you make up the words yourself instead of using those somebody else already wants. A medium length story in a larger magazine should pay you several hundrep dollars for a dozen or so sheets of paper. This will average out about ten dollars per page, another 20: 1 improvement. Put the paper into a book manuscript, and the sheet can be worth several hundred dollars to more than a thousand dollars per page, providing it's a run-away best seller like this one. * And, if you are into consulting, critiquing, or ad copy, your words can be worth as much as $25 to $50 each. Let's see, at 225 words per page and 500 pages per ream and $50 per word, that's ... you figure it out. In each example the sheet of paper Is the same. The only difference is the personal value you have added to make up the difference between the bare paper input and the out-the-door nickel-fetching result. Maximizing your personal value added protects you in many ways. If what you are offering is basically a part of you, no way can any large corporation compete successfully against you. For that matter, it should be hard for anyone to go one-on-one against you, for every one has his own way of doing things and his own way of looking at products. Should inflation change the cost of your materials and supplies, this will only have a negligible effect on your selling price if the bulk of your added value is your own doing. You'll never be forced to "cut costs" by going to inferior materials and supplies if your total costs are a very small part of the value of what you are providing. Computer software, particularly for the hobbyist market, is another example of a product that is almost pure personal value added. So is auctioneering. So are most forms of teaching and instruction. So is just about anything artistic where the final selling price very much exceeds the basic materials cost. Note particularly that your personal value added must be directly a part of what goes out the door. Hassling or "managing" people in no way provides any added value. Nor does time spent in "marketing," whatever that is.

strategy secret-get In control 0/ In/onnatfon /low
Raw information is the highest energy stuff there is. It's also the easiest thing to add lots of personal value to. You should aim at being your customer's cheapest, best, and most useful information source.

-There is no point in writing a book if It's not a run-away best seller.

16

This is easy to do if you are on any electronics trip. Many manufac turers have traditionally avoided putting any useful information out for students, hobbyist, and other small scale users, except on a ripoff basis. Most often, they bury anything useful in trade journals, data sheets, ap-notes and technical papers that the average student never heard of and has no easy access to. The little he can get his hands on is often shallow, out of date, confuSing, and misses the mainstream. It can be dull and lack vibes to boot. Herein lies a gold mine. If you first find and then gather the really useful and current information from these obscure sources and then put it into a lucid and clear form your customers want and can under stand, you're almost certain to have a successful money machine. You'll be providing a tremendous service and generating lots of nickels as well. Offering a course, running a school, or simply teaching others one on-one are other very good ways to get in control of information flow. The measure of how well you do this is how well your students feel you are giving them useful information in the most interesting way at the best possible price to them. Your own control of information can make you a better craftsper son, offering more value added in your products, even if you aren't directly selling information to your customers. Even gathering the information sources of others and putting them in one place can be very effective. If you have available all the ceramics books there are or stock all the alternate energy books, you're well on your way to con trol of the information flow process. When stocking the work of others, completeness and the right overall vibes are keys to your customers seeking you out for specific help. In any case, always find ways to gather information from obscure or diffuse sources, concentrate it somehow, and then put it into a lucid and clear form that you or your customers can use. Always make the cost of a customer getting information from you far lower and far more pleasant than his using any other source.

strategy secret-put nothing between you and your customers
When you sell a product from your money machine, it should go directly to the customer. There should be nothing messing up or other wise colOring the sales channel, particularly another person or a spe cific location. Free lance authors meet this secret the easiest. They write their story anywhere and anytime they like and then mail it to a magazine or book publisher they think wants it. If they called their shots right, a
17

check comes back, or maybe even bunches of monthly checks. The only thing the publisher goes on is your product itself. No way is where the product originated or how it was puhed on them by some one else an influence in the process. Five years and fifty thousand dollars worth of material later, the author may or may not drop in on the publisher who may or may not buy him a Big Mac with cheese. The author's needs are directly met on his own terms with an absolute minimum of outside influences. Crafts people will have a little harder time meeting this goal of a clear channel between supplier and user. One very good approach to selling pottery, weaving, glass art, paintings, and so on is to find a very high energy and very occasional channel that will strongly attract cus tomers. Arts and crafts fairs, street booths, exhibits, conferences, and shows are obvious routes. The high energy channel will pull in both direct sales and all-important contacts for future sales and exhibitions. The combined presence of other exhibitors will attract far more people than you could by yourself. Similar possibilities include co-ops, guilds, and artisan lofts. An approach that works very well for hobby computer hardware is direct mail. This is an obvious route to any sale of a hardware or information product. Direct mail is very good for things like kits, where the final user will have extra added value of his own to put in the finished product. With direct mail, you make yor product known as best you can through a limited and very specific amount of advertising. You com bine this with as much "free" advertising you can snarl in the form of product releases, technical articles, papers, word of mouth, club pre sentations, and so on. You then handle the products on an order-and ship basis. There are lots of advantages to direct mail. The lack of a retail mark up lets your products sell at much lower costs. Buy decisions are self generated and highly motivated. Rarely will the customer think he was "sold" anything, especially if your advertising is honest, your delivery immediate, and your prices reasonable. In fact, immediate delivery of an electronic or hobby computer product will so completely blow your customer's mind that he won't believe it. Any retail store location with its expensive fixtures, finance charges, fixed overhead costs, and hired help, simply isn't needed. Nor is the whole image trip that goes with it. Always avoid your own retail loca tion and any type of "sales" or "agent" or "marketing" associates of your own. In cases where you have to go a retail route, carefully pick the stores of others on a direct or consignment basis, and always do it on your own terms. Try to work with other money machines where you can. Always be in tune to whether the final purchaser or user receives fair value for the products generated by your money machine.
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strategy secret-have 0.834 employees Employees are a hassle, a waste of time and ploney and a psychic energy sink. You should avoid them at all costs. Your incredible secret money machine should have 0.834 employ ees-that is 83.4 percent of you, nothing more,no less. The remaining 16.6 percent of you should go for fun and rewind time. Spend much less time on your money machine and the job will never get done. Much more and you'll be grinding yourself down. The instant you add an employee, you add an incredibly Inefficient and noisy mind-to-mind communications channel that dramatically lowers the effiCiency and potential of your money machine. On top of this is the hassle of paperwork, tax and other regulations, and sched uling so your employee is busy just enough of the time to be worthwhile. So, if you have no employees, how do you get the things done that you don't have time for, don't want to do, or "know" that others can handle better? As much as possible, you should handle these things by buying or trading specific services from other money machines, bought only when and where needed. Try to find others whose own money machines are up and working and use them to do the things you can't handle yourself. Always force yourself to ask if the service or effort is really needed at all. An associate approach can also solve the employee problem. If whoever you are living with digs bookkeeping and accounting better than working for a living, split up the project with each of you doing the parts that seem most suited to you. Or, if you are into two separate money machines, each do part of what the other hates worst. Or work with a loosely knit group of other artisans on a cooperative or group basis. Employer/employee relations also bring on a whole new master slave trip and the need to funnel time and effort in directions away from your main goal of adding as much personal value as possible to your money machine. When and wherever possible, go on to use the services and money machines of others. Stay away from all boss worker hassles.

strategy secret-front money will be blown Having enough advance financing for your money machine is about the worst possible thing you can do and is almost certain to scuttle the whole machine. A glib but accurate reason is that if you have the money, you are only going to spend it. And spend it on things that are totally unneces19

sary and in ways that will commit you down the road to even higher future costs. For your money machine to work, you have to start out scared, lean, and hungry. Such frivolities as food, clotliing, and shelter should be totally forgotten in getting your money machine started.� There are lots of good reasons for studiously avoiding excess money when you start your money machine. It's real difficult for any beginner to increase the amount of money he is handling by more than 20% or so a year without starting to do stupid things with it or worrying too much about it. Money machines expand fastest and best when they bootstrap and pyramid their own output on their own terms. At any time, the materi als, plant, and processes you use should reflect the present or known near-future market for what you are doing. Before going to any vol ume process, always hand-build first dozens, then hundreds of items to make sure they sell and are properly shaken down. Using other people's money is equally bad. You might feel bad if you've spent it all and have nothing to show for it. This is what usually happens to other people's money. Worse yet, the other people may expect some sort of a return on the cash they put up, and might even think you are obligated to them someway. Your fledgling money machine has enough startup troubles without people like these making things worse. Of course, some money is needed to start just about anything. But the key is to keep a sense of scale and to start out as simply and cheaply as possible. If a fancy piece of equipment is absolutely essen tial to do anything at all, borrow one, lease one, or rent one. Maybe buy an old used one that you are sure works. The key rule is to never buy a tool or machine till you are absolutely certain that your present way of doing things is costing you much more money than the tool will return. Never buy anything that won't pay for itself in three months. If it can't do it in three months, it's never gonna do it. One of the saddest (actually the funniest) money machine disasters I've personally seen is the saga of the Escarpment Engineering Cor poration. It all started one fine day when a really sharp industrial engi neer came up with an improved fire sprinkler. It was a bit out of his field, but it was a mechanically beautiful device. No way did he look into the total market and the way it was head-on competitive with several biggies with a well established distribution. Anyway, he did have a chance-if he had built up a few of these on his own and test sold them. From there he could have bootstrapped his production to match what he was reasonably sure to sell. �but, no matter what, don't let anything interfere with your next hang gliding or caving
trip.

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Instead, he rounded up a dozen other engineers (no salesmen, accountants, or people-just engineers). Together, this mob came up with ten grand and formed a Sub-S corporation. Now, it turned out they needed three fairly accurate holes drilled in one of the working models, so the first thing they did with the ten grand was run out and buy a horizontal boring mill. If the holes had to be that accurate, they should have been eliminated from the design. If they were in fact needed, a local machine shop could have done the job for a few dol lars. Then, they took the rest of the money and bought some horren dously expensive injection molds for the sprinkler bodies. In fact, these molds were so fancy, the plastic company even used them in its own ads to show the mind-blowing things that could be done with this particular plastic. Later field tests, of course, pOinted out several major defects in the system, and lots of heavy changes had to be made. No allowance was made for these having to be sold by middlemen, so the final retail price was unreasonably high, pricing the beast right out of the market. Finally, the other engineers got hacked off at the first one and threw him out of his own company. The really sad thing is that this was a workable product that could have gone on to bigger and better things-but the poor money machine got drowned in a sea of cash and incompetent advice before it ever had a chance to get going. Some money machines may be capital intensive, needing a lot of machinery to provide an output. Printing presses especially have a way of gobbling up nickels at an incredible rate. Once you buy one, the press is always too small, has maintenance problems, or a special job comes up and makes you run out and buy a better one. Even here, the key is to keep a sense of scale. Use equipment on the cheap est available basis. This is probably purchase-rental on a press since old presses guarantee bad vibes. You should always gear the size of what you need to your expected near-term return. If it looks like lots and lots of front money cash is the only way to go, scrap your whole money machine and pick a new one. Even when it is up and running perfectly, your money machine at its largest shouldn't have more than a year's income tied up in your total plant and equip ment. This one year limit has been called the convivial workplace and forms the dividing line between the good guy or gal craftspersons and the bad guy industrialists. The really big reason for avoiding front money is that the interest on it forms a fixed expense that, come hell or high water, has to be paid for out of current money machine sales. Ever having any fixed obliga tion is bad, and much more so if you saddle your beginning money machine with heavy obligations like this well into the future. This is one of the reasons that solar energy is having problems getting off the
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ground. The interest on the money needed to build the system is so high that having free fuel doesn't make much difference. Don't let your money machine get in the same bind.

strategy secret- cash /low Is everything

There are lots of possible accounting methods, but there is only one that you should use when starting your money machine and that is simple cash flow. In cash flow accounting, you keep track of how much money comes into your machine and how much goes out, just like a piggy bank. You enter each and every transaction as it happens in some simple way, like writing it on a "cash out" pad. Once a week you do a run ning balance of your totals. Once a month, you look at your bottom line to see if you are winning or losing. After several months go by, you project your annual returns. You don't count anything for materials unused but on hand, things produced but not sold, the value of the place where you work, or things you have delivered but have not been paid for. This sort of accrual accounting can be important for a large corporation, but will only deceive you if you include these things too early in the game. You should set aside income as it comes up for tax obligations, retire ment funds, and other fixed expenses that will be paid out at a later date. A very important rule is to keep your bookkeeping methods very simple but accurate and up to date at all times. Never let them get behind. While having only enough income to continue your technical or craft trip may be one of the keys to your money machine, it in no way means that you shouldn't pay lots of very close attention to all the cash flow involved. This is one particular place where craftspersons screw up badly. The reasoning is that since they aren't in anything for the money, that money doesn't matter. The great irony in this is that the less you are in something for the money, the more crucial it becomes to keep track of each and every expense and then to min imize them.
strategy secret-accept no less than a 200% annual retum on cash /low

We've already seen how you have to maximize your personal value added for a successful money machine, and how you have to min imize cash and front end expenses along with any fixed obligations. One sure test of whether your personal value added is high enough is
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whether your income far exceeds your costs. For a viable money machine, you should accept no less than a 200-percent annual return on cash flow. For instance. in a given year, if you have a total of three thousand dollars in expenses, it should be offset by at least nine thousand dollars worth of income. This leaves you with two nickelS generated for every old nickel put up and returned. Now, a 200-percent annual return on an "investment" seems like an impossible dream to traditional financial people. These days, those kind of people are hard pressed to find a long-term investment that breaks even, let alone gains anything in the face of inflation and taxes. But we aren't talking about anything traditional or big business. We're talking about your secret money machine that's driven by a few nickels and lots of your personal value added energy. On top of this, the 200-percent annually doesn't have to be tied to a single sale. A monthly sales return of 20 percent, or a daily return of one percent per day is just as good, provided you consistently do this day in and day out throughout the year. The, 200-percent goal means that far fewer dollars have to change hands to keep you in nickels. For instance, if you wanted an income of $20,000 per year, for a 200-percent return on your nickels put in, you can do this with only $30,000 in gross money machine sales. Many traditional bUsinesses, with their multiple employees, high fixed capital costs, limited value added, and intrinsic communications barriers can only show a lO-percent return. In fact, lots of them would be delighted with a lO-percent return. For the same $20,000 income, this means the total gross sales have to be $200,000 when these inefficiencies are thrown in, a value almost seven times higher.

strategy secrets-give them something extra







This secret combines the reason behind the baker's dozen with an old show business maxim. "Something extra" is something added and unexpected that your customer gets over and above what he has paid for. Some examples:
*

Enough premium yar n for a first project with a loom kit Giving an editor extra artwork in an attractive folder Adding complete documentation to computer software Providing sockets and test points on an electronic kit

*

*

*

23

*

Including a plant with a macrame hanging Politely answering dumb questions at a crafts fair Taking book readers beyond what they expect

*

*

One of the greatest something extras of all times has to be that plastic nut starter that Heathkit puts in most electronic kits. The thing couldn't possibly cost more than a nickel, but it dramatically simplifies mounting hardware and parts. At the same time, it says that Heath cares about the problems you may be having putting things together. They since have added a piece of bent metal to some kits that lets you remove integrated circuits safely. This is even lower in cost and handier still. Your something extra should simply say, "Thank you. I care." Whatever it is, it shouldn't be expensive but must be unexpected. If you can't think of anything else, tie a ribbon around your product on the way out the door.
strategy secret- go lor It.

NOWI

There is no THEY. Be assertive. The best way to get something is to ask for it The best
way to stop something is to say no to it. The best way to influence others is to Simply tell them how you feel.
...and leave them wanting mbre

So much good stuff in the way of money machines is passed up because you are afraid to act, afraid to jump, afraid of what others think, or simply assume that there is a big and organized "they" out there whose only. purpose in life is to laugh at you or hassle you.

The concept of "leave them wanting more" will vary greatly with the particular money machine. In a book or article, you stop when you have reasonably informed, rather than burying the reader in tedium or detail. This tells the reader that you respect his time and commitment to what you have to say. In a craft sale, you set your price and your transaction in such a way that the customer wants to come back. In a rap session, you shut up before you have overstated your case. And, of course, in a live performance, you stop the encores long before the audience stops clapping. Ideally, you should leave your clients so that as soon as they get word that your new book is out or that your new silversmithing class is open, or that your going to be exhibiting at some fair, they will run out and enthusiastically flock to your money machine.
24

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Secrets II-Tactics
Let's tum now from the big picture to the everyday nitty gritty details of getting your money machine working. One tactic by ItseH may or may not break you. But the more you use them, the more powerful the base you can build on.

tactics secret-know the difference between cold cash, J-dollars, and megabucks
Cold cash Is what you get when you supply a quality product to a known bunch of customers at a bargain price. It Is the only type of Income your money machine should seek. The letter "j" is the engineer's symbol for an Imaginary number. j-dollars are Imaginary dollars that simply do not exist. So many start ing money machines end up �chasing these ephemeral j-dollars and end up with nothing to show for it. One j-dollar chase starts when you assume some need exists when It really doesn't. It's easy to spend lots of time and effort only to find out that the supposed market couldn't care less about what you have to offer. Some older electronic will-o-the-wisps include specialized timers for sports car rallys, ballistic chronometers, photographic shutter tes ters, and just about anything else electronic that "should" be useful In the photo market. There's lots of other examples. Usually, you get into the situation where the people whom you think are your market either don't have the money, do the job otherwise, don't believe you, or are smart enough that they don't need your help. If you are Into something very specific and specialized, make sure there's enough nickels available to feed you. Another j-dollar snipe hunt takes place when you assume something about a market that simply Isn't so. A quick quiz:
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