Rule 1: Better before cheaper 2:29 Rule 2: revenue before cost Rule 3: there are no other rules

It's quite interesting talk rules followed by analysis in business. Seems real great work

My only rule in life: If you're genuinely happy from within , it will show and glow and you have reached ultimate success in life.

Nice Mike.

Excellent analysis, follow the rules of your philosophy!

I see products and services which are not great but people buy them for whatever dig fart reason..i think the rule of under estimate the value of greatness to the consuming public should be added.which makes greatness a tough challenge

Awesome talk i needed to hear!

I love this ❤❤❤

So, I will just follow the rules, even at times when it's seems difficult, or un realistic.

#1: Better before cheaper #2: Revenue before cost #3: ??? #4: Profit!

this was great.

@BretSimmons

10 жыл бұрын

Another one that really nailed it

Basic lesson is, don't give in to the Wal-Mart Affect

At End What Are The Rules?

@napydog

7 жыл бұрын

you set the rules and you follow them

This is great for traditional businesses, but what do you do in a disruptive environment? Furthermore, I would need some guidance applying this to a skill and knowledge based business such as dentistry.

@meraynor1

10 жыл бұрын

Thanks for your comment, and that's a terrific question: disruptive innovations (as defined by Clayton Christensen) are very often thought of as "worse" and "cheaper", at least at first. And if disruption is an effective process by which new products and services can achieve market dominance, how can "better" and "revenue" be good ideas, let alone rules? To my mind, the answer lies in the difference between "strategy" and "innovation." Good strategies are built by embracing tradeoffs. In our research the two most fundamental tradeoffs appeared to be between "better" and "cheaper", and "revenue" and "cost". Mumtaz and I concluded that, when faced with those choices, you should choose "better" and "revenue". Describing our evidence and laying out our reasoning was the purpose of our book "The Three Rules" (www.thethreerules.com). Innovations are built on breaking tradeoffs: finding ways to be better and cheaper, or earning higher prices and having lower cost. If you can break tradeoffs instead of embracing them, that's very often the superior path. Disruptions, in their foothold markets, tend to compete with non-consumption, which typically means they are "better than nothing" and "more expensive than nothing." In short, they follow the rules. As they march upmarket, they end up breaking the performance/cost tradeoffs that define the incumbents' products or services -- that's what makes disruptor an "innovator". This distinction has been, for me, perhaps the most powerful thing I've learned from this journey. PS: As to the second part of your question, I can tell you that the rules certainly do apply in a "skill and knowledge based business" such as consulting, accounting, engineering and so on. I don't know enough about dentistry to speak with authority, but I'm sure there's a bridge between these concepts and that profession, too :-)

@Kabab

10 жыл бұрын

Michael Raynor Thanks very much for the quick and through reply. Having started a business based on cheaper and and cost when I was in college (and then promptly exiting at my break even point), your message makes a lot of sense. As for disruptive innovation, as you said, it's difficult to say what will be and what's garbage (the rather complex example that comes to mind is Bitcoin). A nice tie in with Malcolm Gladwell's concepts presented in his new book. The issue I have for skill/knowledge based businesses is the challenge between the 'you get what you pay for' concept and your rules. Neither one always applies. In dentistry, I have patients that are looking for the cheap way out despite holding an iphone and a Hermes purse, then others that don't even ask about fees. When making changes in a clinic, I feel burdened by patient expectations and always try to examine the effect it will have. The real answer to all my woes is in the eval insurance companies. Do you have any tips on dealing with this issue in your book? Oh what a horrible issue it is too. There is no straightforward robotic insurance company...

@nattayaowarang5918

7 жыл бұрын

Kabab FPV ส

Thanks waaaaaaaaaaaaaaaaaaaw

I'd like to make a case against this theory. What if it's not the rules that sustain your happiness but the want to follow them? Let's just say you follow the rule, even if you don't want to. What will occur, I agree, is that you will (for that moment) sustain what you have. but life is a balancing act is it not? So in order for you to sustain this success you have to sacrifice your free will. And so it continues until the scale tips back. And you no longer follow the rules. Not because they're not true because you no longer WANT to. The more you try to contract this want, the stronger it gets. Until eventually you have nothing. No Success, no free will. But then well.. you'll want again and if you don't ignore it... the scale will tip back.

@caruru6193

6 жыл бұрын

Correlation does not equal cause. Ignore all other rules XD except when you don't want to :)

Can these three rules work for not for profits such as liberal arts colleges and universities? What would that look like?

@nnekaa.4591

5 жыл бұрын

D Harden nope

Good rules, though tough to follow, business or otherwise.

@meraynor1

10 жыл бұрын

You said a mouthful, Jim. My hope with this talk was to explore the notion that rules just might be easier to follow if we understand that the power of rules stems from following them even when, especially when, we don't want to. In other words, and speaking entirely personally, when you don't want to and you can come up with reasons NOT to do those things, simply accept that the task is not to come up with counter-arguments or convince yourself that the rule is actually a good idea. Instead, "outsource" your decision-making to the rule...and just follow it. My guess is that in some circumstances, doing the "right thing" will always be more difficult than pursuing any of a number of other courses of action. But just maybe if we can embrace the power of rules, and embrace where that power comes from, it might get a little easier.

can anyone make me understand the second rule.

@mdaxe

7 жыл бұрын

Yuvraj Singh Revenue = Item Price-Cost(how it costs to produce it), so you can gain a dollar by 2 means: 1) reduce cost by $1 2) increase selling price (revenue) by $1, in both cases you gain $1. what they came up with statistics - it is better to gain that additional $1 (or any other amount) by adding it to revenue (selling price) rather than lowering production price.

@dznrbrit27

5 жыл бұрын

This is not exactly what the Revenue before Cost rule means. It means focus on building revenue not cutting costs to improve your profit margin and ties into the first rule Better before Cheaper. Say you aren't profitable enough selling T-shirts. You can choose to sell the T-Shirt for the Same price as you always have $10 and cut cost by sourcing a cheaper cotton or cheaper thread, hire cheaper seamstresses and still sell the shirt for $10 thereby increasing your profit margin. Or, you can decide to maintain or improve the quality of the T-Shirts materials/manufacturing and increase the price point to increase your profit margin. Which would be the better solution that would yield the better long term opportunity for your business? Well since Rule #1 is Better before Cheaper, the best decision would be the later. Improve the quality of the t-shirt so you can increase the revenue generated from the t-shirt and improve your profit margin that way.

Hey klasse Video. Dein KZread Kanal ist sehr ansprechend. Danke mach weiter so. Schau doch auch mal bei mir vorbei, vielleicht koennen wir uns gegenseitig ergaenzen. Wuerde mich freuen. Gruee Chris

I don't know..... I think you're discounting the fact that nowadays, most CEO's term is determined by his ability to raise his companies stock price to a higher level.... and with most share prices trading at at least 30 times their earnings for a blue chip company - I think most CEOs would want to constantly provide news that the market would perceive as increased potential future profit. e.g cutting costs, catering for a larger markets, etc. No news = no demand for the share. Shares are like a currency that a company can print.

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