April 9, 2019

318 The Power of Elimination

“Productivity” is meaningless until you define WHAT you’re trying to produce

Examples of goals

  • More profit, not just more revenue
  • More quality time, not just more time
  • Build a team, not just micromanage people who can solve immediate problems
  • Build a sellable business, not just go for short term cash flow
  • Differentiate your product, not just churn out “me-too” product

After that, you can measure people, products and processes against your outcomes.

Key question

Does it produce wealth, health or happiness?
“If it doesn’t deliver, it’s got to go!”

Principles to apply

The 80/20 principle

Most of what we do doesn’t matter.
20% of anything will produce 80% of the wins.

Equally, at the other end of the scale, 20% of things will produce 80% of the downsides. Find those and eliminate them.

The Star Principle

If a product is positioned as the market leader in a fast-growing market, it is a star product. Same with an entire business. The rule is “invest invest invest”.

However, if it is a follower in a slower growing niche, it’s a “dog”. Rule? Run for cash! Sell it out then eliminate it!
If a product (or business) is a leader in a slow-growing niche, that’s a cash cow. Rule of thumb here: take as much cash as you can afford from these cash cows and reinvest in the stars.

The “Simplify” Principle

Another Richard Koch book.
This comes in two flavours.

The simplest version is the approach exemplified by Henry Ford.
By the early 1920s, he had boiled down his offering to one model -the Model T -in one colour. “Any colour you want as long as it’s black.”

This meant multiple cost savings in his production process and thus massive price reductions for consumers.
Often eliminating features or processes can do this.

Be warned- simplifying is not the same as “simple”!

It often takes great insight, huge amounts of work and a lot of experimenting. But it’s a proven path to success.

Alternatively, You can simplify the consumer experience -known by Koch as a “proposition simplifier”. The classic example is the iPad. It’s ay easier for consumers to use than alternative computers. By the same token, a nightmare to create. This is not realistic for most e-commerce entrepreneurs I know but is possible.

Examples of areas for elimination


  • Entire careers
  • Jobs
  • Job roles
  • Business
  • Entire relationship
  • Property
  • So-called Financial Assets
  • Eliminate destructive habits
    • Eg addictions
    • -alcohol
    • Cigarettes


Big picture

  • Eliminate ineffective business
  • Business partnerships
  • Product lines
  • Marketplaces eg eBay eg will Tjernlund and bro
  • Companies which will have no future value ( eg based on RA or wholesale relationships ), not just cashflow now


  • Features that cost business money but don’t add enough value to market
  • Costs
  • Eg inspection in the USA
  • Eg packaging


  • Software
  • People
  • Entire processes


  • Business partnerships
  • Supplier relationships
  • Ineffective “gurus”
  • “Masterminds” that aren’t your Peers


  • Unprofitable products (not just more revenue)
  • Indefensible products (no future profits)


  • Low-value tasks ($10/your tasks)
  • Value-less tasks
  • Managing idiots


  • Unproductive team members
  • Bad business partnerships (hint: don’t assume you’re not the bad partner!)
  • Low-value or even destructive customers (tricky on Amazon)

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Michael Veazey

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