This is part 3 of me reacting to Jeff Bezos’s last shareholder letter

I decided to do a reaction episode, because 1. Jeff Bezos is one of the greatest entrepreneurs of all time 2.His shareholder letters since his first one in 1997 have been extremely consistent, and 3. This will be his last shareholder letter as the CEO of Amazon.

While the first part of the shareholder letter focused on the “numbers” side of things, the second part was focused about Amazon being a “force for good”. Here are my key takeaways:

If you’d like the detailed explanation, head over to the previous episode, Episode 22.

Now, let’s continue with the third and final part of the shareholder letter:

If you’d like to get a copy of all of Amazon’s shareholder letters from 1997-2020 in PDF format, drop me an email with subject line Episode 23 to [email protected]. If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from.

This is part 2 of me reacting to Jeff Bezos’s last shareholder letter

I decided to do a reaction episode, because 1. Jeff Bezos is one of the greatest entrepreneurs of all time 2.His shareholder letters since his first one in 1997 have been extremely consistent, and 3. This will be his last shareholder letter as the CEO of Amazon.

The previous shareholder letter focused very much on the “numbers” side of things. This is Jeff Bezos’s “CEO scorecard” - not only it is expected in Wall Street, it’s a pretty good way to communicate and objectify what was done during his tenure as CEO of Amazon. Here are my key takeaways:

If you’d like the detailed explanation, head over to the previous episode, Episode 21.

Now, let’s continue with the second part of the shareholder letter:

If you’d like to get a copy of this shareholder letter in PDF format, drop me an email with subject line Episode 22 to [email protected]. If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from.

I decided to do a reaction episode, because 1. Jeff Bezos is one of the greatest entrepreneurs of all time 2.His shareholder letters since his first one in 1997 have been extremely consistent, and 3. This will be his last shareholder letter as the CEO of Amazon.

Because the whole shareholder letter takes at least 20 mins to read, I will do this in multiple parts. Here’s part 1:

If you’d like to get a copy of this shareholder letter in PDF format, drop me an email with subject line Episode 21 to [email protected]. If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from.

We as a society cannot truly be free if we cannot overcome hypocrisy. We cannot protect the truth if we maintain double standards. And if a society cannot protect the truth, we cannot be on the path towards freedom.

I want to begin this episode with 2 stories: an article from Business Insider Apr 6th 2021 writes that Amazon has an Unregretted Attrition Rate 6%. What this means is that they let go of 6% of people without regret every year. This number was based on analysing data and it creates a sweet spot for the company to lose the blubber and still grow. People’s reaction? Too high. Cut-throat. Pee in bottles.

The next story is from the NY Times, dated April 13th 2021. After vaccinating 7.4 million Americans, the J&J vaccine caused 7 women and 1 man to develop blood clots. The reaction? Slow it down.

In the heat of the moment, every fibre in our body would green-light all emotional statements. But when we lay the facts down, we can be hypocrites.

Would you pay more for the same product/service/experience? Under what circumstances should we pay more? Usually, the organisation responsible for your experience can be traced back to the founders, the entrepreneur. How would you define an entrepreneur? An entrepreneur is someone who sees someone else’s problem and takes personal responsibility for it. They solve problems at scale. That’s how companies stay in business.

To me, an entrepreneur is the most noble job title ever. You are a person of gratitude. And you repay your gratitude by being a producer and contributor to society. You create jobs. You help your people on payroll put food on their families’ table.

But the picture is never so rosy. For the benefit of those who haven’t listened to Episode 2, let’s talk about Business 1.0 VS Business 2.0.

Even though the world is slowly moving towards Business 2.0, there is still a way to impose a penalty on Business 1.0.

Should we tax the rich more? Cost-push inflation - Would you pay more for the same product/service/experience?

Maximum tax? Socialism? Communism?

[Crab story]

[Eye for an eye story]

Probably says why communism can’t make everyone equally rich, but it can make everyone equally poor - crab logic?

Why do we root for underdogs, but when they become the biggest kid on the block, we try to pull them down? Apple VS Epic Games

When industry turnover rate is 10-15%, why do we bawl at Amazon’s 6%?

When the odds of developing a blood clot are 1 in 1000, why do we want to slow down vaccination when the J&J vaccine caused 8 people in 7.4 million - effectively 1 in a million?

Let’s get our facts right. Let’s be in Business 2.0. Let’s uphold the truth and be more rational about our opinions because they ultimately lead to decisions which will shape our society.

If you have any questions or opinions, submit a voice recording to [email protected] and we will cover it in the next episode. If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from.

Legal disclaimer: this podcast is in no way, shape, or form financial advice. The statements expressed are purely of my own opinion and are for entertainment purposes only. Listeners should do their own research before taking action based on any of the information in this podcast.

According to an article from The Economist dated April 10th 2021, house prices have started to go through the roof - pun intended. In the US, prices increased by 11% in the year to January, their fastest pace in 15 years. In New Zealand, prices are up by 22%. Among the 25 countries that The Economist tracks, real house prices rose by 5% on average in the latest 12-month period, the quickest in over a decade.

This comes from both “push” and “pull” factors. With record-low interest rates and record-breaking savings rates - the “pull” factors - and the fiscal stimulus and money-printing of many governments of the world - the “push” factors - housing prices are now at their all-time high.

The US printed so much money that Fed’s balance sheet surpassed 5 trillion dollars for the first time in history. If you’ve listened to the previous episode on how doing business with Jesus Christ, our question pointed out how bad our brain is at math when it comes to understanding large numbers. How big is 1 trillion? If JC deposited $1mil every day since his birth into a bank account until today, April 17th 2021, it would still be less than $1 trillion. And the Fed’s balance sheet has 5 trillion dollars. Let that sink in.

Meanwhile, according to an article from Pew Research dated August 7th 2018, today’s real average wage has about the same purchasing power as it did 40 years ago. The bottom 10 percent of earners has seen wages rise by 3%; the bottom 25% has wages rise by 4.3%. But among the top 10% of earners, they’ve seen their wages rise by 15.7%. But if average purchasing power has remained the same, the gains in real wage growth has been eroded by inflation. With the Fed and most of the world continuing to increase money supply, we are experiencing inflation on a global scale.

What does that mean for us on our road to freedom? If you’re in the middle or low income group, the government has just turned their back on us real hard. I don’t believe in protests or taxing the rich - I will explain why in the next episode. The only thing you can control is your own actions. All your extra cash, excluding savings and necessities like food, housing and insurance, you have to buy assets. Assets are things that can’t be duplicated, have intrinsic value and can increase in value over time. These are stocks, real estate, cryptocurrency, baseball cards, artwork, etc.

But if you feel like you don’t have that much cash left over at the end of the month to invest, you don’t have a money allocation problem, you have an income problem. You need to increase your income. How do you do that? You invest in yourself. You buy books to read. You listen to audiobooks. You listen to podcasts. You find mentors. You buy courses. You sign up for training. I did all that, and am doing so now. It’s a never-ending journey, because our world population is closing in on 8 billion as opposed to 6 billion at the start of this millennium. Where you needed 6 billion reasons to exist on Planet Earth, now you need 8 billion.

The pressure is up. But there are solutions. My solution is e-commerce. If you’d like to find out how you can get a 2nd source of income without having a product or technical skills, drop me an email to Episode 19 at [email protected]. If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from.

Let’s pretend you entered into a business contract with the man JC himself, where he deposited $1 mil/day into a bank account since the day of his birth until the day you die. Which amount is larger, the one in that bank account, or 1 trillion dollars?

The answer? Let’s work it out together. If you make $1 mil/day, that’s 365 mil/year. The year of this recording is 2021, so take 365 and multiply by 2021 and you get 737.665 billion. It’s still 270 billion short of 1 trillion. So, if you guessed 1 trillion, congrats, you’re either great at answering these type of questions, or you have a really good sense of numbers.

The point is, our human brains start breaking down after the 1000’s. If it was 1900s and you had a million dollars it was an unimaginable amount of money. To some of us, a million dollars is still unimaginable. But if you want to make a million dollars a year, what must you do?

Let’s do some math. Assume you work 50 weeks a year, and take 1 million divided by that, that’s 20k per week. Assume you work 5 days a week, take 20k divided by 5, and that’s 4k per day. If you’re in business, and you’re calculating your daily revenue target, 1 mil/365 ~ $2,740. Same concept for profit.

Do you have your daily revenue targets in place? Or do you have something similar for a key metric you track in your business? Do you have a spreadsheet to see if you’re on target, or if you’re behind target? If you don’t have one and would like to get one, drop me an email with subject line Episode 18 to [email protected] and I’ll send you a Google Sheets document I use personally to track my daily metrics and help me with my projections.

If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from. If you’d like me to send you a Google Sheets document I use personally to track my daily metrics and help me with my projections, drop me an email with subject line Episode 18 to [email protected].

In this episode, we will talk about the mindset required to truly persevere. Common advice is from people is to remain positive. Some recommend repeating affirmations many times in the day. In this episode, I’m going to tell you where the limits of staying positive are, how it can kill perseverance, and even cost you your life.

Why is perseverance important? Because if you’re on the path to freedom like many listeners of this podcast do, you’re doing something different by definition. While most of the world is running a rat race, living the 9-5, TGIF, chill-on-the-weekend lifestyle, you’re probably building, or creating something. You understand that there is a price to pay for freedom, and you’re willing to pay that price. Because the ultimate prize is true freedom.

There’s no getting around it: beyond a certain amount of money, we can have almost any lifestyle we want. But to get to that point, most of us build businesses. We work our asses off to increase our income. But building a business is almost like taking care of a big house that catches fire at random places every single day. On top of that, pressing issues keep us up at night. How do great entrepreneurs like Steve Jobs, Bill Gates, Jeff Bezos and especially Elon Musk persevere till the end?

I’ll tell you a story about a Medal of Honour recipient named James Stockdale. During the Vietnam War, he was a captured POW for close to 8 years. When Jim Collins, in his book, Good to Great, asked him “who didn’t make it out?”, he said, “the optimists”. Now that shocked Jim Collins, myself too. As Stockdale explained, the optimists were the ones who said ‘we’re going to be out by Christmas.’ And Christmas would come and go. Then they’d say, ‘we’re going to be out by Easter.’ And Easter would come and go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.

Now the strange thing is, how did Stockdale know that he’s going to survive, despite all the odds being against him? Stockdale said, “you must never confuse faith that you will prevail in the end … with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

This is the Stockdale Paradox. You have to retain faith that you will prevail in the end regardless of the difficulties. And at the same time, confront the most brutal facts of your current reality, whatever they might be. My version of the Stockdale Paradox? “Have faith that you will prevail, but be a realist about it and embrace the suck”.

To all the people out there who are building something meaningful, who are part of a movement, or that you’re on your path to freedom, this episode is for you. I want to remind you that no matter how hard things can be, it’s just a matter of time before you prevail in the end. Screw positivity. Embrace the Stockdale Paradox.

If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from. If you’d like me to send you a PDF poster of my version of the Stockdale Paradox, drop me an email with subject line Episode 17 to [email protected].

Let me explain the context of the statement here. This is a book review about a book I just finished, and I just happened to have experienced something the author did as well. I’m sitting by the window, looking at a small fly burning the last of its short life’s energies by trying to fly through the windowpane. In its mind, when it gets stuck, the solution is to fly towards anything bright, or towards the colors green or blue. But in this situation, despite its efforts being futile, its wings keeps buzzing. The strategy can be summarized in 2 words: try harder. If it had more intelligence, more information, or a higher level of consciousness, it would have made a 180 degree turn and regained freedom in 10 seconds.

The point of this story is not that we should all stop trying so hard and take the contrarian stance. Rather, the point here is doing “more of the same” usually gets you more of the same. That’s what “trying harder” could mean. If you’re already experiencing exhaustion, “trying harder” usually increases how exhausted you are. There are times when we try harder, but the increased returns justify the increased effort less and less - in other words, diminishing returns.

To quote Einstein, “insanity is doing the same thing over and over and expecting different results.” Similarly, if the tools you’re using didn’t change, if your mindset didn’t change, if your beliefs didn’t change, how can we expect life to get drastically better? I want the people who listen to this podcast to actually achieve freedom. I want you all to be on the path towards freedom. I want us all to be Freedom Makers. We can’t be on the path if we are “trying harder” all the time. There must be a better way.

If you are the proverbial fly trying to fly through a windowpane, what can you do to gain the awareness and make a 180 degree turn? You need to increase your awareness by meditation, reflection, journalling, and getting mentors. I’ve engaged 2 mentors so far, and every time I spent money on hiring one, it has always resulted in at least a 10x return.

I’m grateful that I’m having this experience now because of the book. If you’d like me to send you the link on where I got the book, drop me an email with subject line Episode 16 to [email protected].

For the past two years, I feel like I’ve been lobotomized. If there was an Operating System for my brain, it has been upgraded at least twice over. My goal for the next 60 years of my life is to experience 1 metamorphosis per year. Being able to reinvent myself and unlocking potential is my best path to freedom. And I’m honored to document and share the process as much as I can with you.

If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from. If you’d like me to send you the link on where I got the book that I referenced to at the beginning of this episode, drop me an email with subject line Episode 16 to [email protected].

If you’ve tried running ads to generate sales but ended up making a loss, then this episode is for you. We will look at the 7 key metrics to understand how e-commerce businesses have been printing money (legally) by putting in $1 and getting $2 and much more in return.

Assuming you already have a product that people are buying, and you have a functional online store, we can start talking about the logic of running ads. Your ad only has 1 purpose: getting people to click on it and visit your website.

Let’s start with FB ads, as it is the most important and largest platform for media buyers. Most of the key metrics I’m going to talk about will deal with cost and rate - like “cost per click”, and “click through rate”. You generally lower “cost” metrics and increase the “rate” metrics

So, when you place an ad, the first thing you will be charged for is impressions. Impression is a way for FB to tell you how many people are shown the ad. The key metric here is CPM - Cost Per 1000 Impressions. If your CPM is $10, then it costs $10 to have 1000 impressions. That means it costs $0.10 to show to one person. How to print more money? Lower your CPMs by targeting a broader audience, or having fresh, engaging and unique creatives.

The next metric is called CPC, or Cost Per Click. This is highly related to the third metric, called CTR, or Click-Through Rate. This is calculated by taking the number of clicks divided by the total number of impressions. Normally, the higher the CTR, the lower the CPC, which is great for business. Depending on your industry, CTR can vary between 1-5%, and CPC can be between $0.50-$1.50. How to print more money? Lower your CPCs and increase your CTRs by having your creatives be relevant, persuasive, and sometimes, clickbait. To quote Don Vito Corleone from The Godfather movie, make an offer they can’t refuse!

The 4th metric is called conversion rate, or CVR. This is calculated by the number of orders divided by the number of clicks. Depending on your industry, CVR can be between 1-5%. My personal best was around 7% and it was a great day. A 5th metric closely related to CVR is called CPP, or CPA, which refers to Cost Per Purchase, or Cost Per (Customer) Acquisition. This is calculated by taking your ad spend divided by your number of orders. How to print more money? Increase your CVR and decrease your CPP by having persuasive ad copy to increase the value, adding discounts where applicable, and de-risking your customers by offering MBG or a hassle-free returns process.

The 6th metric is called Average Order Value, or AOV. This is calculated by taking the your sales revenue and dividing by the number of orders. How to print more money? Increase AOV by starting with a high-ticket item, or use upsells, downsells, and cross-sells. We will cover increasing AOV more in depth in a future episode.

The 7th metric is called Return On Ad Spend, or ROAS. This is calculated by taking your revenue divided by ad spend. If you spend $100 on ads and got $200 in sales, then $200/$100 is 2 which means you got a 2 ROAS. If you spend $5k and got $30k in sales, you’ve got 6 ROAS, which is incredible. This is the holy grail of buying ads. How to print more money? Increase ROAS by doing all of the things mentioned previously: lower CPM, CPC, CPA, and increase CTR, CVR, and AOV.

[Example: Posture corrector, cost $10, price $40. CPM of $10, 2% CTR. Target CVR?]

If you’d like to increase your online presence, or maximise online sales, drop me an email with subject line Episode 15 to [email protected] and we can set up a call with my team to take your business to the next level. If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from.

This statement basically says that you’re in a place where you’re either

a. Working remotely and don’t have to attend meetings, or that you can have your camera turned off most of the time, or

b. Your company’s rules for attire is very much inline with what you like to wear for work.

c. You are the decision-maker, and you get to make the rules for attire.

That’s when we’re reading this statement literally. If we generalise this statement, and extend it “I come in and leave whenever I want all the time”, “I can decide the compensation structure”, and so on, we are aiming for becoming a decision-maker in our work lives. This is great, because there’s more incentive to work well, and if you understand how you work best, and your freedom is tied to how well your company performs, then by all means, make your own decisions.

We’ve already covered scenario a in the previous episode. As for scenario b, company attire rules isn’t something you can easily change without being some decision-maker, and you do need a majority buy-in. So the easiest way to achieve freedom is to actually become a decision-maker. In other words, Scenario C: Become an entrepreneur. So in this episode, we’re going to go deeper and look at some avenues to start your own company.

If you’re already working a day job, don’t quit your job and put everything into your new venture. Keep your day job, and spend 2-3 hours after dinner time working on your business. Dedicate your weekends to meeting people, reading and researching the market. Let’s be honest here: most people aren’t actually looking to spend time productively after dinner. Most people just chill. But you’re different. Give yourself a time frame, say 6 months, to do everything you need to get your business off the ground.

To start a business, my general litmus test for a good business, is if it can make money while you sleep. If your answer is no, you should probably drop it. I’m not saying that you can’t work on a design agency, but look at design related businesses and you’ll find examples like Adobe or Canva which actually revolutionised the designing industry. Move towards products. Partner up with people who can code.

If want to start a business that is completely remote, makes money while you sleep, and you don’t need to invest more than $5,000, you should do what I did and start an e-commerce business. Specifically, drop shipping. It really doesn’t matter if you don’t have any product ideas or website coding skills. It’s changed my life completely and it can change yours too.

If e-commerce sounds like a good idea, go watch everything that YouTube has to offer. Then, if you still want to move forward, you can get a free 30-min discovery call with me by dropping me an email with subject line Episode 12 to [email protected] and we can see whether we can work something out to guide you on your way to starting your online business.

If you’ve enjoyed this episode, be sure to share, download or follow this podcast on Spotify, iTunes, or wherever you get your podcasts from. If you want to get a free 30-min discovery call with me, drop me an email with subject line Episode 12 to [email protected]