3 Key Lessons from the Elon Musk Bio

Elon-MuskThroughout history we have learned about revolutionary entrepreneurs such as Thomas Edison, Henry Ford & Steve Jobs.  But usually we are reading about them several years after their extraordinary accomplishments.  Very rarely do we get a glimpse of entrepreneurs of this caliber during their meteoric rise.  In Ashlee Vance’s biography “Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future” – we get an in depth look into the life of arguably this generation’s most important entrepreneur.

I’m not one to normally choose a biography over another non-fiction book, but in this case, I was anticipating the release of this book for several years.  Elon Musk has routinely refused access to other journalists, but with persistence and a “won’t take no for an answer” attitude,  Ashlee Vance convinced Musk to give him access and deliver a great story about the man behind 4 of the most disruptive innovations in modern business.

Over the last few decades there has been a trend where many very smart individuals have pursued innovation in Internet based ventures (Facebook, Twitter, Apps, SaaS Businesses), whereas fewer people have been seeking innovation in the industrial sectors.  During this same period of time, Elon Musk has begun to revolutionize 3 industries with companies that many haven’t even heard of (Tesla, SpaceX, Solar City), and a 4th that everyone knows (Paypal).

Here is a quick rundown of each of these companies:

PayPal: operates a worldwide online payment system.  Revolutionized e-commerce starting back in the late ’90s.  Musk started the company X.com, an online financial services and email payment company, which eventually merged with another company to become Paypal.  Ebay purchased PayPal in 2002 for $1.5 billion. Musk walked away with about $180 million after tax…of which he put all of it into the three companies below.

Telsa: an American automotive and energy storage company, that designs, manufactures, and sells electric cars, electric vehicle powertrain components, and battery products. [wiki] Musk is the CEO and has invested millions into the company to make 100% electric cars a reality across the world.

SpaceXdesigns, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the ultimate goal of enabling people to live on other planets. SpaceX is the first private company to deliver supplies to the International Space Station.

SolarCityan American provider of energy services, headquartered in San Mateo, California. Among its primary services, the company designs, finances, and installs solar power systems. [wiki] SolarCity was founded to accelerate mass adoption of sustainable energy.

Key Lessons from the Book:

Elon Musk is one of two people to have created 3 separate billion dollar companies.  Let that sink in… Not only did he create 3 separate billion dollar companies, but he did it in 3 separate industries (payments, cars, and going to space). What he has done to this point is astonishing.  He is operating on a higher level than 99% of entrepreneurs.  For goodness sake, the guy wants everyone to have electric cars and solar powered homes, and on top of that he wants to colonize Mars.  This is someone who is a great entrepreneur to study and learn from.

Be Willing to Take Huge Risks

Due to the economic climate in 2008, especially with GM and Chrysler going bankrup, Telsa (a startup car company) was having a hard time raising money. On top of that, SolarCity had a deal with Morgan Stanley, who had to back out. And to make matters worse, SpaceX failed their third attempt in a row to launch their Falcon 1 rocket. Many thought all 3 companies were done.  Musk was also going through a divorce and the press was hammering him.  It seemed everything that could go wrong, was going wrong. So at this point he had all his money in these 3 companies and was faced with making a decision. He could pick 1 and put all the effort, focus and money toward it, hoping to come out of the recession with 1 successful company, or he could try and save all 3 companies – which would be a huge risk.  He went with the latter and defied the odds by bringing all 3 companies through their darkest periods and come out on top.  

Surround Yourself With Great People

Musk always surrounds himself with the brightest and best.  While he was in charge at PayPal, he and Peter Thiel put together a team of engineers that would go on to start many other successful companies. 

“PayPal also came to represent one of the greatest assemblages of business and engineering talent in Silicon Valley history. Both Musk and [Peter] Thiel had a keen eye for young, brilliant engineers. The founders of start-ups as varied as YouTube, Palantir Technologies, and Yelp all worked at PayPal. Another set of people — including Reid Hoffman, Thiel, and [Roelof] Botha — emerged as some of the technology industry’s top investors. PayPal staff pioneered techniques in fighting online fraud that have formed the basis of software used by the CIA and FBI to track terrorists and of software used by the world’s largest banks to combat crime.”

But it wasn’t just about hiring the smartest engineers.  Musk also seeks after people who will give him honest unfiltered feedback.  He wants to know what you don’t like about something more than what you like about it.  He relies on people to give him feedback that allows him to constantly improve his companies’ products and services.

Set Big Goals

The way Musk decides what ventures he pursues isn’t based on money but rather on what will have the biggest impact on humanity.  He has set out to achieve some pretty crazy things. Entering the car industry and competing with the major manufacturers seemed like a death wish, but yet Telsa has sustained itself and is poised to continue to make a dent in the industry and ultimately change the status quo from gas powered to electric powered vehicles.  Similarly, he has taken on the space industry in a way that no other private company has ever come close. NASA says man will be on Mars in 40 years, Musk says he’ll beat them there and do it in 12-15 years.  You can go down the list and see time after time that Elon has set goals that seem borderline insane, yet he still has the focus and drive to achieve them.  He isn’t wasting time on creating the next photo-sharing app, he is trying to colonize Mars….

A favorite quote from the book: 

“We’re all hanging out in this cabana at the Hard Rock Cafe, and Elon is there reading some obscure Soviet rocket manual that was all moldy and looked like it had been bought on eBay.” — Kevin Hartz, an early PayPal investor, describing an outing in Las Vegas that was intended as a time to celebrate the company’s success.

This book was a fascinating look into the life of a modern visionary entrepreneur with wild ambitions, that are unfolding before our eyes. Buy, read, listen and enjoy.

6 Brilliant Lessons from The 4-Hour Workweek

4HWW Book CoverRather than write a “review” of the 4-Hour Workweek, I decided to make a list of the main lessons I learned from the book.  My review would be, “Go buy the book and read it immediately.”  Tim Ferriss has earned a permanent spot in my Mt. Rushmore of authors, and this book is definitely in my top 5 of all time. Whether you are an entrepreneur, employee, productivity whiz, or anyone else, there is something for everyone in the book, and the lessons can be applied to many situations.

But, before jumping into the main lessons I learned from this book, you have to remove all pre-conceived notions and thoughts about the book.  I know after the initial release in 2007, there were many critical reviews, but that didn’t stop the book from being a NY Times Best Seller for 7 years and counting.  Not to mention, it is the most hi-lighted book in the Kindle marketplace.  Plus, every time I go into a Barnes and Noble, I’ll see the book in the “Best in Business” display of books, usually right at eye level.  Surely all these indicators point to something good, right?

However, some people get so wrapped up in the title of the book and immediately write it off as “impossible” or “unrealistic” etc…  But it is important to understand the purpose of the book isn’t to necessarily teach you how to only work 4 hours per week, nor is it saying that is the goal – but it is definitely possible.  The purpose is to teach you how to be more productive with your time and your life.  With this increased productivity, you can eliminate many hours of work from your week, and if you decided to work only 4 hours per week, that is fine.  Or you could work 20, 40, 80+ hours with more focus and productivity – its up to you.  The point is, by applying the lessons from this book, you will create time to enjoy life now, and not wait decades for your retirement.

While there are lots of things to be learned in this book, here are 6 of the main lessons that resonated with me the most.

1. The 80/20 Principle – Focusing on what is most important

I first heard of the 80/20 Principle or “Pareto’s Principle” in an economics class in college.  If you aren’t familiar with the concept, Vilfredo Pareto, the Italian economist who it is named after, concluded that 80% of the wealth and income was produced and possessed by 20% of the population.  But he also found the mathematical formula was applicable outside of economics as well. In fact, it could be found just about everywhere.

For example:

  • 80% of Pareto’s garden peas were produced by 20% of the peapods he had planted.
  • 80% of company profits come from 20% of the products and customers.
  • 80% of your complaints come from 20% of your customers.


But to keep it simple, you could say 80% of the output is a result of 20% of the input.  When I first realized the importance of this principle, I started to analyze everything I was doing to determine what the 20% was, and figuring out how to eliminate the 80%.  In college, I discovered I could be 80% prepared for an exam, by reading 20% of the textbook, so I just read the important parts to prepare for exams.  Later after starting a business, I realized 20% of my clients accounted for 80% of my revenue, so I focused my business on these types of clients.

Tim suggests 80/20ing everything in your life to help find where you can eliminate waste.  I now try to do this at least once a month, preferable twice, to really see where I’m able to optimize my time, energy, money etc.  This is, by far, one of the best things to do to really discover where you should put your focus.

In the near future, I’ll write a more detailed post solely dedicated to the 80/20 principle and best practices for examining your business and personal life.

There is another productivity lesson that goes hand-in-hand with the 80/20 principle. It involves these 2 truths:

1. Doing something unimportant well does not make it important.

2. Requiring a lot of time does not make a task important. What you do is exponentially more important than how you do it. While efficiency is important, it is useless unless applied to the right things.

It is important to focus on being productive and not busy.  You can come up with a million things to do, and rationalize each one of them, but unless it takes advantage of the 20% you should focus on, then you are just making yourself busy, and not productive.

After reading 4HWW I wrote the following questions on a sticky note and placed it on my computer & desk so that I would see it multiple times each day:

Am I inventing things to do to avoid the important?

Am I being productive or just active?


2. Batching

I remember what it was like before I started batching tasks.  It was pure chaos and getting things done in the most inefficient way possible.  Implementing a batching system is very simple.  All you are doing is grouping similar tasks together and then completing them at the same time.  The most consistent way I have used batching over the last 8 years has been with sorting through mail.  Before I started batching I would get my mail and open each piece every day. If I had 1 bill, I would pull out the checkbook and write a check immediately, then prepare the return envelope, and then mail it off… This was horribly inefficient if I did this several times a month.

When I started batching, I would collect all the mail into one large pile, then every 2 weeks or so, I would sort through the mail, separating junk from bills & other important pieces.  Then, after grouping all the bills together, I would write checks for each bill, one after another, then place them in the envelopes all at the same time, then add the stamps etc… very methodical, kinda like an assembly line.  The end result was that I saved time, energy, and could focus my attention directly on tasks without getting sidetracked by checking mail and paying bills randomly.  Now, with paperless billing, this makes things a lot easier, but I still sort through all other mail in the same way.  

By batching, I can focus on important tasks and not get distracted by menial tasks.  One of the most difficult things to batch is email.  We’ve been so accustomed to push notifications and responding quickly to email that we habitually check email without even realizing it.  Instead of checking email 20-30 times a day, Tim recommends checking it twice each day, and responding to all emails at the same time.  I’m still working on this one.

Sure this sounds like a good idea, but does it really make a difference?  Yes, there is science behind it.  In the book Tim says, “There is an inescapable setup time for all tasks, large or minuscule in scale. It is often the same for one as it is for a hundred. There is a psychological switching of gears that can require up to 45 minutes to resume a major task that has been interrupted. More than a quarter of each 9– 5 period (28%) is consumed by such interruptions.”

So if you can save 10 hours per week, and your time is valued at $100/hour, then over the course of a year, you will have earned back $50,000 by saving hundreds of hours of redundant work.  Don’t work harder, work smarter.

Ideas of things to batch: mail, email, bills, phone, planning, laundry, social media, cooking, cleaning etc.


3.  Why a deferred life plan is a bad idea

 Most people’s idea of life is working hard for 40 years to have a nice retirement where they can live out there dreams.  Although many people don’t have any dreams or goals in mind, they just know that one day, after decades of work, they will arrive.  This “plan” is referred to as a deferred life plan, where you slave away at a job (in which most people aren’t fully satisfied) so that you can retire and have freedom.  This is normal, and to many this is the only reality.  But, at Tim discusses in this book, there is an alternative option.  One in which you can enjoy life now, and take mini-retirements along the way.

To many, this may seem impossible, unless you are born into wealth.  But, that is not what Tim is suggesting.  By implementing strategies from this book to create a muse (defined by Tim as an automated vehicle for generating cash without consuming time), you can enjoy take mini-retirements and live your dreams today, not decades from now.  

The book is filled with story after story of people who have been able to start their muse on the side and generate enough revenue to replace their income at their job.  They then are able to leave the rat race behind. Then by optimizing their muse and outsourcing they are able to live a location independent lifestyle and take mini-retirements throughout life without having to worry about money or job security.  But this post isn’t about creating your muse; Tim dedicated 3 full chapters to that in his book & can explain it much better.  The lesson I want to focus on is why you shouldn’t stay on the deferred life plan.

The most obvious, but easily forgotten reason is that no one is guaranteed to live until they retire.  Wouldn’t it be awful to work for 40 years just waiting for retirement so you can live out your dreams, only to die, or become physically incapable of accomplishing them?  Another reason for not deferring life is if you are working 40-80+ hours per week without a break, you can easily miss the moments you can’t get back 40 years later.  Enjoying family and friends regularly shouldn’t be something you seldom do. Before you know it, your parents get old, your kids grow up, and you aren’t close with your friends anymore.  There is real opportunity cost involved in deferring your life.  

Here is a poem by David Weatherford that makes you really examine the path you are taking:


Have you ever watched kids on a merry-go-round,
or listened to rain slapping the ground?

Ever followed a butterfly’s erratic flight,
or gazed at the sun fading into the night?

You better slow down, don’t dance so fast,
time is short, the music won’t last.

Do you run through each day on the fly,
when you ask “How are you?”, do you hear the reply?

When the day is done, do you lie in your bed,
with the next hundred chores running through your head?

You better slow down, don’t dance so fast,
time is short, the music won’t last.

Ever told your child, we’ll do it tomorrow,
and in your haste, not see his sorrow?

Ever lost touch, let a friendship die,
’cause you never had time to call and say hi?

You better slow down, don’t dance so fast,
time is short, the music won’t last.

When you run so fast to get somewhere,
you miss half the fun of getting there.

When you worry and hurry through your day,
it’s like an unopened gift thrown away.

Life isn’t a race, so take it slower,
hear the music before your song is over.

 I recommend re-reading that poem, but this time take it slower and really think about what the author is saying.


4. The cost of inaction

 What is it costing you to postpone taking action in your life?  Whether its quitting your job, starting a business, traveling, getting healthy, or anything else, what are the costs of waiting?  Consider not just the financial cost, but also the emotional and the physical cost as well. What will happen when 5, 10, or 20 years go by and you still haven’t even tried to achieve the things that excite you?  Time is finite, and you aren’t guaranteed the next day.  

Rolvagabonding-bookcoverf Potts, in his book Vagabonding tells the story of two Christian Monks living in Egypt who have always dreamed of seeing the world.  But since they made vows of contemplation, they couldn’t live out their dreams.  So, they satiated their desires by putting off their travels to a later time in life.  The problem was they would keep delaying their plans. In the summer, they would tell each other they would travel in the winter.  But when the winter came, they would delay further to the next summer.  They kept repeating this over and over for 50 years, and never left the monastery.  In the same way, most of us do the exact same thing.  We settle down in our homes and careers, getting caught up in the routine, only to waste the best years of our lives not doing what would be most fulfilling, only because we are “waiting” for the perfect timing.

Tim said, “Someday” is a disease that will take your dreams to the grave with you. Pro and con lists are just as bad. If it’s important to you and you want to do it “eventually,” just do it and correct course along the way.”

If you keep waiting on everything in life to be perfect, you will miss out on so much.  Don’t get caught up dwelling upon the “risk” that is holding you back.  Tim says it perfectly in the book, “If you telescope out 10 years and know with 100% certainty that it is a path of disappointment and regret, and if we define risk as ‘the likelihood of an irreversible negative outcome,’ inaction is the greatest risk of all.”  Don’t deceive yourself.  


5. Non-finishing and managing input

 One message that is instilled in a lot of people as they grow up is, “Finish what you start.”  Everything from your dinner to piano lessons, parents & teachers advise you to finish everything that you start.  After a while this becomes so instilled in you that you attach words with negative connotations like “quitter” to people to don’t finish something.  Until I read this book, I bought into this idea that you have to finish everything you start.  I wasn’t obsessive about it, but if I didn’t finish something, I might feel guilty to some degree.  That all changed after reading this book.

Tim challenges the idea of finishing everything.  He said just because you start something, doesn’t automatically justify finishing it.  If you are at the movies and get one of those $9 bags of popcorn and 64oz drinks that comes with free refills, you don’t have to finish just so you can get a refill.  Or if you start reading a book, only to find that all the good info is in the first 3 chapters and the rest of fluff, don’t waste your time finishing it just so you can say you finished it.

Its okay to stop something that is boring or a waste of time if it isn’t required as part of your job.

Another important lesson from this book that relates to non-finishing is managing input.  

Tim says, “Lifestyle design is based on massive action— output. Increased output necessitates decreased input. Most information is time-consuming, negative, irrelevant to your goals, and outside of your influence.”

Do you really need to watch the news every day? The world isn’t going to end because you don’t read the paper every day. You probably forget 90% of the news you consumed within 24 hours.  By drastically decreasing all the time, energy and brain power you waste on consuming things that are irrelevant to your goals, you are able to enjoy the things that really matter to you.  Spending more time with your family, reflecting on your dreams and goals, enjoying hobbies, are just a few things you can do to replace these old habits.  

In the near future, I’ll write a more detailed post on how to go on a media fast and how refreshing it can be. But for now, just be careful about consuming too much.  Tim suggests developing the habit of asking yourself, “Will I definitely use this information for something immediate and important?” Pair this up with your 80/20 analysis and focus on what really helps you, and eliminate the rest.


 6. Giving up control to gain freedom

As a perfectionist and recovering control freak, this was the lesson that has made the most difference in my business after I started implementing the steps to give up control.  Being able to live in a way that work gets done, your business keeps going and life goes smoothly, all without your constant contribution and effort is often a fantasy for many people.  But, by setting up systems to replace yourself, it is attainable.  Outsourcing many aspects of your life is not only a reality, but it is often easier and cheaper than you would think.  Whether you are hiring virtual assistants (VAs) in India, The Phillipines, or even in the US, you can delegate anything from managing emails to sending flowers, or even more complex tasks that require skills and knowledge in business, technology, writing etc. VA’s can do just about anything that doesn’t require their physical presence, which these days is a lot.

So, sure, it would be nice to have a VA, but is it really worth it? You have to think about it in terms of time and money.  Lets say you earn $100,000 per year (40 hours a week, 50 weeks a year), or $50 per hour.  If you paid an excellent VA $30/hr and they were able to save you 8 hours of work per work, how would that effect your time & money?  Well, we already know it would save you 8 hours of work each week, or essentially 1 day off.  But what about monetarily?  The 8 hours you are saving is worth $400 (8 x $50), and the 8 hours you are paying the VA to work only cost you $240 (8 x $30).  So, in this case by hiring a VA, you are coming out ahead $160 ($400-$240), plus an additional 8 free hours which you can do whatever you want.  This is how business works.  Huge businesses like Apple outsource the manufacturing of their products to China for a lot cheaper than it would cost them to manufacture here in the US.  Then they are able to focus on what they are best at, design and marketing.

In my business, this was one of the hardest things I had to learn.  I was always told, if you want things done right, you have to do them yourself.  So, if I needed something done, I would spend hours learning how to do it.  I essentially was a “jack of all trades, but master of none.” But when I found myself in a situation where I was very frustrated with some menial task, I decided to hire someone else to take care of it for me.  It cost me probably $50, but saved me hours of frustration.  Once they completed the task and the world didn’t fall apart, I realized how much time I could save by outsourcing these tasks that I didn’t enjoy and focus on revenue generating activities that helped my business grow.  From that point forward, I’ve tried to exclusively focus my time and efforts on areas of my business where I can contribute the most value, and hire experts to handle everything else.

Tim made 2 excellent points that are best left in his own words:

“Preparing someone to replace you (even if it never happens) will produce an ultrarefined set of rules that will cut remaining fat and redundancy from your schedule . Lingering unimportant tasks will disappear as soon as someone else is being paid to do them.

It is absolutely necessary that you realize that you can always do something more cheaply yourself. This doesn’t mean you want to spend your time doing it . If you spend your time, worth $ 20– 25 per hour , doing something that someone else will do for $ 10 per hour, it’s simply a poor use of resources.”

Each of these lessons really deserve their own post, so as I mentioned similarly in other sections, I will put together a separate post dedicated to outsourcing. But, for now here are 3 questions you can ask yourself to find areas of your life you can outsource:

  1. Look at your to-do list— what has been sitting on it the longest?
  2. Each time you are interrupted or change tasks, ask, “Could a VA do this?”
  3. Examine pain points— what causes you the most frustration and boredom?

Other Lessons

To keep this post from being too long, I’ve limited the lessons to six.  But there are many other great takeaways that deserve mentioning.  My best recommendation is to go read the book. Whether you get a physical copy, or download it on Kindle, I suggest hi-lighting sections that speak to you, so you can easily refer back to them later.  But for now, here are a few other lessons I learned from the book:

  • The crucial difference between relative & absolute income & why relative income is more important
  • Why selling premium, higher end products/services is better
  • Parkinson’s Law
  • How to set daily goals, the right way
  • How to become a top expert in 4 weeks
  • How to accurately determine if a product/service is viable as a business
  • The lose-win guarantee & how to sell anything to anyone

….among many other important lessons not listed.

These are the action steps I recommend taking to really increase your productivity, improve your time management, and live a better life today:


The 4-Hour Work Week action steps


  1. Do an 80/20 analysis on every aspect of your life to discover where to focus your time and energy
  2. Start batching tasks and activities together
  3. Write down the steps you need to take to get off the “deferred life plan”
  4. Stop delaying taking action and consider the costs of inaction and what it will be like 5, 10, 20 years from now if you don’t take action
  5. Manage your media input by only consuming information that directly relates to you goals. Remind yourself it is okay not to finish (books, food, movies etc)
  6. Find areas in your life or business to outsource. Let go of control and delegate tasks so that you can focus on higher value activities.
  7. Read The 4-Hour Work Week and take lots of notes.
  8. Go on 1 week media fast and reflect on your dreams and goals for your life.

Overall, there is a lot to be learned from this book.  I’ve found myself rereading the book several times over the years to refresh my memory and optimize new aspects of my business and life, and I encourage you to do the same.

If you enjoyed this post, please let me know.  Originally, my goal with this blog was to document experiences and notes so that I can refer to them in the future. But, it is always nice if I can help others by providing this information.  Thank you for reading.


The Compound Effect – Part 1

Over the past 10 years or so, about 95% of the books I’ve read have been non-fiction.  I’ve done this intentionally because I really enjoy learning from great authors and hearing their perspectives on life and business.  Most of these non-fiction books have been related to entrepreneurship, business, or just living a great life in general.

So after reading all these books, I’ve gained so much knowledge and perspective, as well as strategies to succeed in business and life.  But, even though I’ve learned all these great things and had many ah-ha moments I’ve found its easy to forget all the things I’ve learned. So, a few months ago I decided that going forward, I’llstart taking notes and highlighting key parts of all the books I read.  Then I will compile all the notes in Evernote so that I could refer back to them overtime and quickly access all the key points without having to re-read the whole book.  So now that I have a blog, I thought this would be a great place to store all these notes for future reference.

Book 1

TCEBookThe first book I read after making this decision was The Compound Effect by Darren Hardy. The book is based on the principle that decisions shape your destiny. Little, everyday decisions will either take you to the life you desire or to disaster by default.  That might not sound like anything revolutionary, but as I started reading, I quickly discovered there was much more depth to the concept and it was written in a way that made it very interesting.

When being asked to explain The Compound Effect, Darren Hardy, the author described it like this:

“It is based on the principle that you can reap huge rewards from a series of small, smart choices. In other words, your present reality is the outcome of the little, seemingly innocuous decisions that have added up to your current bank balance, waistline, business success or relationship status. Success or failure is earned through the consistent habit forming practice of making smart choices over time, culminating into what Einstein called the 8th wonder of the world: compound results, or The Compound Effect.”

The concept of “The Compound Effect” is often illustrated by using an example of how compound interest makes a huge difference over time. Where if you just invest $5,000/year for 15 years at an 12% interest rate, then after 40 years it will be worth millions of dollars, even though you only put in $75K.  

An even better monetary example is the story of the two sons who both were given a choice by their wealthy father:

Option 1 – Get $3 million today that you can spend immediately.

Or Option 2: Get a penny that doubles every day for 31 days, but you have to wait until day 31 to spend any of it.

The story goes on that the older son chose option 1 and the younger son chose option 2 etc….It would be insane to turn down $3 million, right? Not really. By choosing option 2 – a penny that doubles every day for 31 days, the younger son collected over $10 million on day 31.

Here is a breakdown of the value of the penny that doubled over the 31 days:

Day 1: $.01
Day 2: $.02
Day 3: $.04
Day 4: $.08
Day 5: $.16
Day 6: $.32
Day 7: $.64
Day 8: $1.28
Day 9: $2.56
Day 10: $5.12
Day 11: $10.24
Day 12: $20.48
Day 13: $40.96
Day 14: $81.92
Day 15: $163.84
Day 16: $327.68
Day 17: $655.36
Day 18: $1,310.72
Day 19: $2,621.44
Day 20: $5,242.88
Day 21: $10,485.76
Day 22: $20,971.52
Day 23: $41,943.04
Day 24: $83,886.08
Day 25: $167,772.16
Day 26: $335,544.32
Day 27: $671,088.64
Day 28: $1,342,177.28
Day 29: $2,684,354.56
Day 30: $5,368,709.12

Day 31: $10,737,418.20

Option 2 was by far the better choice.  The lesson from this story is that because of the compound effect – a small incremental increase over 1 month made a huge difference on the end value of the money at day 31.

Just as the compound effect worked in favor for the younger son from the story above, it can make a huge difference in your life, health, business, relationships etc…  

So what does that look like?

 Hardy’s own words explain it best when he says:

“Your only path to success is through a continuum of mundane, unsexy, unexciting, and sometimes difficult daily disciplines compounded over time. Know, too, that the results, the life, and the lifestyle of your dreams can be yours when you put the Compound Effect to work for you.” 

 For example, if the goal is to become stronger a simple exercise that would harness the power of the compound effect would be to do 10 pushups today, then add one more pushup every day.  So today you would do 10 pushups, tomorrow 11, the next day 12 and so on etc…  This small incremental increase doesn’t seem like much, but after doing this for 5 months you will be doing over 150 pushups every day (over 50,000 per year).  

Another example of how this could look in every day life is by applying the concept to reading a book.  If the goal is to read 15-20 books every year to increase your knowledge or skills – that might seem overwhelming.  But by just reading 10-15 pages every day, you can easily read 15-20 200 page books every year.  By all this additional reading you will learn new things and gain new insights that can help your overall positive development in your life, business, relationships etc.

You Have A Choice

The Compound Effect - Figure 2Applying the principles from the compound effect to work for you in a positive way can make all the difference.  The Compound Effect can work for you, or against you.  If you have bad habits that are compounding each and every day, that can take you places you don’t want to go.   You might think you are just fine with the status quo, but either the compound effect is working for you or against you – you just have to make a choice to make it work for your benefit.

If you are complacent or you decide to do nothing, you can be easily crushed.  Maybe you’ve reached a level where you are comfortable and you don’t think you need to try and make progress any more.  A lesson from history shows how dangerous this can be. Complacency has impacted all great empires (Egyptians, Greeks, Romans, Spanish, Portuguese, French and English).  Why? Because nothing fails like success. People get to a certain level of success and get too comfortable. Then things fall apart.


“The biggest difference between successful people and unsuccessful people is that successful people are willing to do what unsuccessful people are not.”


Continue to Part 2 – On Habits and Knowing You Why

The Compound Effect – Part 2

This post is Part 2 in my review and notes for Darren Hardy’s, The Compound Effect.  For Part 1 – click here.


The next section of this book (chapter 3) is all about habits.  This chapter is probably the best section in this book, and could be a standalone book itself.  The best way to start this section is with a quote:  

Aristotle wrote, “We are what we repeatedly do.”  The dictionary defines habit this way: “An acquired mode of behavior that is become nearly or completely involuntary.” 

There have been many books on habits.  Everyone has their own take on how to form habits, which habits to form, and the best formula for maintaining those habits. After reading multiple authors’ takes on habits, it all starts running together.  

But what really struck a chord with me in The Compound Effect was Hardy’s focus on 2 aspects: 1) How Small Changes Can Make Big Differences, and 2) Your Reason Why.

How Small Changes Can Make Big Differences

“The slightest adjustments to your daily routines can dramatically alter the outcomes in your life. Super-small, seemingly inconsequential adjustments can and will revolutionize everything.”

In general I think people psyche themselves out way too often, myself included.  We tend to over analyze things to the point instead of doing something, we do nothing.  Here is an example that most people can relate to:  Current situation = You are overweight, out of shape, or both. Solution = eat healthy & exercise.  Sounds simple right?  Yes, it actually is simple, but our minds tend to operate in extremes… so instead of eating heating food and exercising – we tell ourselves we must only eat 500 calories a day and do crossfit 10 times a week.  First, that is a recipe for disaster. Second, it is unrealistic.  But your mind thinks that is what you have to do – so its all or nothing… If you don’t follow that regime, you decide to not do anything.

But what if you simply cut something from your diet? Or limited yourself to consuming it only once per week?  That is feasible, right? And instead of trying to be a gym rat, only to get burnt out after a month – what if you tried doing a simple 5 or 10 minute exercise at home?  These are easy solutions to get you the results you want…. But the key is CONSISTENCY!  Make it a habit to do pushups when you wake up or drink 2 liters of water, or whatever else is appropriate – but don’t overwhelm yourself to the point that you do nothing.  Develop a personal daily routine that you can stick with and it will change everything.

Your Reason Why

Many people believe that if they just have enough will-power they can muster there way through anything.  While that is a nice thought, it isn’t true.  Everyone has at one time in their life has set New Year’s Resolutions that you have every intention of carrying throughout the year – only to “give up” by mid February. Setting goals and trying to form new habits or coming up with ways kick old ones is a great.  But sheer willpower can’t carry you the distance.  You must have a solid reason WHY behind each of those habits and goals.

“Until you set your desire and motivation in place, you’ll abandon any new path you seek to better your life if you’re why-power – your desire – isn’t great enough, if the fortitude of your commitment isn’t powerful enough, you’ll end up like every other person who makes a New Year’s resolution and gives up early.” 

In the book, Hardy illustrates this concept with an analogy.  It goes something like this:

If I put a 10 inch wide 30 foot-long plank on the ground and said if you walked the length of the plank, I’ll give you $20, would you do it? Of course you would. But what if I took the same plank and made a rooftop bridge between two 100 story buildings? That same $20 for walking the 30 foot plank no longer looks desirable or even possible does it?

TCE-whyHowever if your child was on the opposite building and that building was on fire would you walked the length of plank to save him? Without question and immediately – you do it. $20 or not. 

 Why is it that the first time I asked you to cross that skyhigh plank, you said no way, yet the second time you wouldn’t hesitate? The risk and the dangers are the same. What changed? Your why changed – your reason for wanting to do it.

“You see, when the reason why is big enough, you will be willing to perform almost any how.”

Game Changers: Five Strategies for Eliminating Bad Habits

Your habits are learned; therefore, they can be unlearned.

  1. Identify Your Triggers for Bad Habits – Who, What, Where, When
  2. Clean House – get rid of whatever enables your bad habits
  3. Swap It – replace with good habits, or delete
  4. Ease In – gradual changes
  5. Or Jump In – sudden changes

Run a Vice Check – From pg. 83

“Every so often I go on a “vice fast.” I pick one vice, and check to be sure I’m still the alpha dog in our relationship. About every three months I pick one vice and abstain for 30 days. I love proving to myself but I’m still in charge. If you find it seriously difficult to abstain for 30 days, you may have found a habit worth cutting out of your life.”

Game Changers: Six Techniques for Installing Good Habits

“You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.” 
– John C Maxwell

  1. Set yourself up to succeed. Any new habit has to work inside your life and lifestyle. One strategy I use is to have protein on hand. I cook up a bunch of chicken on Sunday, and package it and have it ready for the week.
  2. Think addition, not subtraction. – what can you add in to your life?
  3. Go for a PDA: Public display of accountability.
  4. Find a success buddy.
  5. Competition and camaraderie.
  6. Celebrate.

The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge.” 
– Dr. MLK Jr.

When you press on despite difficulty, tedium, and hardship, that’s when you earn your improvement and gain strides on the competition. If it’s hard, awkward or tedious, so be it. Just do it. And keep doing it, and the magic of the compound effect will reward you handsomely. 

 Continue to Part 3 – On Momentum, Influences, and Acceleration

The Compound Effect – Part 3

This post is Part 3 in my review and notes for Darren Hardy’s, The Compound Effect.  Click here for Part 1, and Part 2.


Here is an except from the book where Hardy summarizes the main point:

You get into the groove, the “zone,” by doing the things we’ve covered so far:

  1. Making new choices based on your goals and core values
  2. Putting those choices to work through new positive behaviors
  3. Repeating those healthy actions long enough to establish new habits
  4. Building routines and rhythms into your daily disciplines
  5. Staying consistent over a long enough period of time

Then Momentum Kicks In. 

Number 4 & 5 are the steps the really start to propel your momentum.  First, putting together a daily routine that incorporates your new habits is essential.  Don’t try to just rely on hoping that you will remember to do something – make it part of a routine.  Then after you’ve nailed down a routine that works for you – BE CONSISTENT.  Its one thing to stick to a routine for a week or two, but if you can really stick with it for 3 weeks, you’ve officially created a habit.  So be consistent for the long haul and then you will start to see how the compound effect can take what you are doing and create exponential results.

“A daily routine built on good habits and discipline separates the most successful among us from everyone else. A routine is exceptionally powerful.”



For the last two sections – Influences and Acceleration,  I have kept it brief and just written my notes from when first reading the book.

Everyone is affected by three kinds of influences: input (what you feed your mind), associations (the people with whom you spend time), and environment (your surroundings).

1. INPUT: Garbage In, Garbage Out

  • Don’t drink “dirty water”
  • Stand Guard
  • Go on a media diet
  • Audiobooks, podcasts in the Car

2. ASSOCIATIONS: Who’s Influencing You

  • Dissociations
  • Limited Associations
  • Expanded Associations
  • Find a Peak-Performance Partner
  • Invest in Mentorship
  • Develop own Personal Board of Advisors

Never ask advice of someone with whom you wouldn’t want to trade places.

3. ENVIRONMENT: Changing Your View Changes Your Perspective 

  • Each and every incomplete thing in your life exerts a draining force on you, sucking the energy of accomplishment and success out of you as surely as a vampire stealing your blood. Think about what you can complete today.



Do The Unexpected:
If you have a cause or ideal worthy of attention, do what it takes, even the unexpected, to make your case heard. Add a little audacity to your repertoire.

Do Better Than Expected:
Find the line of expectation and then exceed it.

Know Your Moments of Truth – and then persevere and move forward.



The Compound Effect is a great book that provides a roadmap for creating success in whatever area of life you are wanting.  It provides concrete steps to make small changes in your everyday life that will alter your trajectory.  So instead of being overwhelmed by all the things you “should be doing” – just focus on the small changes that you can make and over time, you’ll see a huge difference in your results.

As I mentioned previously in Part 1, this quote from Hardy sum’s it all up nicely:

“Your only path to success is through a continuum of mundane, unsexy, unexciting, and sometimes difficult daily disciplines compounded over time. Know, too, that the results, the life, and the lifestyle of your dreams can be yours when you put the Compound Effect to work for you.”