We all get the same 24 hours each day, of which almost half is devoted to attending to sleeping, eating, transportation and errands. On a good day this leaves 12 hours with which you are free to do as you please to further the achievement of your goals and desires. How is it that some people manage to get so much more out of that 12 hours than others? Why is the time of some people so valuable that they can command $250/hr for their attention? How do I go about earning that, and perhaps more?

The answer to this lies in the prehistoric days, a vague and poorly documented era that I am free to take artistic liberty with. Og was a particularly smart caveman living in that particular era and like all good cavemen he spent the bulk of his days hunting animals while simultaneously avoiding being hunted by said animals. Og was rather fascinated with the world around him, often getting lost in his primitive caveman thoughts as he spied a particularly interesting leaf. It was perhaps the first case of ADD ever noted, and unfortunately for Og it meant that animals would often creep up on him and catch him off-guard. Many wounds later Og realized that he was very poorly equipped in comparison to the saber-tooth tiger that had just run him up a tree. Something had to be done lest he starved.

Og did some heavy thinking and came to the realization that a wooden stick would help him fend off attackers if wielded in the right way. It was a bold idea with much potential. Up until now everyone simple wrestled smaller prey to the ground or settled on sharing termites with the chimpanzees (history suggests it was them that first invented the stick, but accurate patent records have yet to be dug up). After much testing and determination Og had his first functional hunting stick and the first real meal in weeks. The human race had its first tool and soon Og became the most well-fed caveman around.

Other cavemen began to take note of his bulging waistline and came to Og hooting angrily. They too wanted to hunt more effectively as the cavewomen at home were beginning to notice how much better Og was fairing. Og pondered this situation carefully and gestured wildly that yes he would share the powerful secret of the Hunting Stick. In exchange each caveman using said stick would be required to provide Og with one chunk of mammoth meat per month. It was a fair bargain and so Og was able to provide food for himself and his family nearly effortlessly.

So much is written about how to manage your time effectively, but performing low-output tasks efficiently will still get you far less than performing high-output tasks inefficiently. Og’s key to success was his propensity to find ways of leveraging his resources to achieve exponentially higher gain. His first breakthrough came from the stick, which allowed him to catch bigger prey faster than the other cavemen. Rather than using just himself to perform the work, he had transferred some of it to the stick. With the spare time this provided Og was able to think harder and an even bigger breakthrough came next. Og realized that he could equip others with a marvelous Hunting Stick in exchange for food. Suddenly Og didn’t have to do any hunting at all thanks to properly leveraging his resources (the stick idea). At this point historical records are again rather faint, but we can theorize that Og continued to profit from his invention by creating product upgrades like the Sharpened Hunting Stick, Hunting Stick Classic, and the Armored Tank.

You don’t need to be an inventor or a caveman to have this model work for you. What you do need is a change of mindset from the rat race of getting as much done as you humanly can within those 12 free hours into figuring out how much you can leverage your resources and abilities to exponentially increase the return you receive on each hour you work. As a work machine a human being is actually quite terrible. We are high maintenance, error-prone, and can only do so much work in a given period of time. The most productive use of that 12 hours is thinking up ways to generate value through available resources, and then putting those resources together to generate that value. You don’t want to get stuck requiring yourself to be able to generate the value, as the opportunity for expansion becomes highly limited. Og could have sold his hunting services rather than the Hunting Stick, but then he would have to be constantly working to receive payment and would have likely been stomped on by a mammoth. Remember that as impressive as a consultant’s $250/hr rate may sound, many millionaires are making much more than that from passive income streams and doing so while they sleep.

Today Pamela Slim over at Escape from Cubicle Nation wrote a very important piece saying “There must have been a few surprised Intel employees amidst the cuts”. She is of course right, but I’d like to go one step further and bet that there were many more employees sitting around fretting about the upcoming layoffs too paralyzed to do a damn thing about it except complain.

To anyone sitting in a cubicle and bemoaning the inevitable, sweating about your incredible debt or the family you need to support, and desperately complaining about your situation to anyone that will listen, stop now. Breathe. I’ve met people in your situation many times before and it’s getting rather predictable. What happens to a deer stuck in headlights? It gets hit by a truck because they don’t move out of the way. You’re doing the same thing, except that you’re going to get hit by depression and creditors who have suddenly lost faith in you. Let’s change that!

I have some wonderful news for you, if you are willing to believe and accept it. It is possible to avoid the truck and even end up in a better position in life as a result of this kind of major upheavel. Since the dawn of time every way of life that humanity has ever experienced, be it prehistoric cavemen society, or the capitalism that Intel’s employees are living in, has had a set of rules that must be accepted. These are simple rules that decide “how things work”. They explain why your friend with 2 years of college is halfway towards being a millionaire while your four years at a highly respected university haven’t helped you avoid being tens of thousands of dollars of debt and no retirement savings to speak of (hint: your college friend read a book or two on personal finance). Unfortunately these rules aren’t sitting on an altar in a temple somewhere, and they sure aren’t neatly summarized in a book at the public library. You must discover the rules one by one through critical analysis of the world around you and then determine how to use them to your advantage.

Don’t worry, I’m not going to leave you high and dry here with a vague explanation of some magic rules that you need. I am going to spell out a few particularly relevant ones for you right here, from the set of rules that determine financial success:

1) At best an employee is a contractor whose taxes are deducted for him or her, and for whom the contract termination date is not explicitely set. It is not disloyal for either side to choose to terminate the employment at a time when it is no longer the best option.

2) Those who rely on a single source of income are the financial version of Evel Knievel. It’s simply inevitable that something will go wrong and not all daredevils are nearly as lucky as Knievel (if you can count forty broken bones as lucky). Having money saved and creating multiple income streams will isolate you from the damage caused by losing an income stream (ie your job).

3) Those that get ahead do so through networking. Building and leveraging a diverse network of people allows incredible opportunity and shortcuts to success. Those Intel employees who have a network to leverage are going to find new jobs quickly with higher pay and a fresh set of challenges.

4) Change is an accelerating mechanism. It brings about tremendous opportunity if you welcome it and terrible hardships if you try to avoid it. As time moves forward it will only occur faster and faster, and it’s a no-brainer as to which side you wish to be on when it happens.

5) The most profitable paths are not well-traveled and the best opportunities require effort to uncover.

The trick is now taking these rules and making them work for you. If you choose to live in denial and refuse ideas such as employment not being permanent you will ironically be the first one out on the street. Accept that what you are doing now won’t necessarily be what you are doing several years from now. Welcome changes and you will find that they are often opportunities that allow you to leap-frog into higher positions much sooner and with far greater ease than by working away in your current post. Companies hire many people into senior level positions from outside the company for the wealth of outside experience that this brings in.

If layoffs are looming over your head now then it’s more imperitive than ever that you get yourself in a position that will allow you to move on and succeed further. Now is not the time to freeze in the headlights and hope for the best. Start looking for another job and leverage your network when doing so. Start putting away money immediately and reduce or eliminate unnecessary expenses. Seek out credit before you can no longer state in good faith that you are employed. Ask yourself honestly what you wish your next move to be if you are laid off. Most importantly internalize within yourself that this is an opportunity not a disaster. Your mind has a way of synchronizing your reality with your vision and I’m perfectly serious when I state that if you envision success and put yourself on a path of being 100% irrefutable certainity that you will succeed then you will do so. The reverse is true too so you will no longer complain about your situation and how the axe is sure to doom you.

If rumours of layoffs are not around that is no excuse for getting comfortable and expecting your job to last forever. Get your personal finances and your goals together. Save money every month and don’t take on what I call “living outside your means” debt. You will lose most of your money this way and be hanging on a precarious ledge when life takes a downturn. You’ll sit there blaming the economy, but it’s actually your own preparation that will have made or broken you.

Successfully building a business around a product is a wholly separate area of expertise, not something that you kind of pick-up as you release it. Yet that’s something I very much did with CustomBar, a terrific piece of productivity software that I devoted the larger portion of 2 years of my life to developing. I was very much a software geek first and business man a distant second, consequently making many of the same mistakes as hundreds of other shareware authors. The result was making only 10% of the profit that the software could have made (a very conservative estimate).

The initial launch did fairly well and my inbox filled with sales. This is also the only time where I really thought about the marketing and spent serious time putting things together. However I lacked the knowledge that I needed to build something that would continue to grow and receive attention long after the last news article on a popular software site had sunk to the bottom.

Two years is a long time to invest in a product when you end up making a grocery list of amateur mistakes when finally selling the thing. Yet that’s one of the reasons the business start-up failure rate is so incredibly high; I was the rule and not the exception. I was very strong in a technical skill (programming in this case), had a great product idea, but not nearly enough business knowledge to make it viable.

If you are the brains behind the world’s next big mouse trap then learn from these mistakes. It’s not easy to come up with a viable business model and strategy to execute it. Top CEOs of billion dollar companies get it wrong all the time, and surely they must have a little bit more experience than simply picking-up a marketing book. Aquiring a combination of experience and knowledge will put you light years ahead of the inventors out there that dived right in. If your Big Idea will still be there in a year or two perhaps it’s best to try a smaller business first? If you don’t yet have a Big Idea then there is even more reason to start a smaller business now, as you will have the necessary experience when you do have that Idea.

Inevitably the next question that has come up in most readers minds is “but what other business could I possibly start?”. Believe it or not, you don’t need to create something new and revolutionary to launch a company and start making (or losing) money. That’s actually a very risky path compared to taking an existing product or service and simply doing a great job of providing it. Businesses that tend to be inexpensive to start are those that do not require a large investment in materials or commercial location. Digital products work well, such as software, ebooks, online courses, web services and so on. The internet also happens to be a fantastic way to get experience in marketing strategies as investment is generally low and you can accurately measure results within days instead of months. If that’s not your fancy do not worry. You can take advantage of virtually any real skill, and the less formal education it requires the better for you (it is much easier to start a landscaping business than a biotech company).

One catch is that you do have to put serious effort into the business and want it to succeed. You are starting small so that later on you have the foundation to go big. It may even be that you succeed on your first try and want to continue developing the business. My own primary business, which I plan to grow and expand for many years to come, started out as a side web hosting venture years ago by another name. You won’t get anywhere putting in a half-hearted effort into something, and you won’t learn a whole heck of a lot either.

If all that you do is Build It, the only customer will be your mom.

You want your dream to succeed. Maybe it’s a great piece of software that you are putting every bit of effort into after 8 hours of database programming in some dull cubicle (if that’s the case read this legal issue). Maybe it’s a music school you’ve been sketching plans for while finishing your degree. Maybe it’s a $29.95 product that will be sold in retail stores across the country if you can just convince them that people will buy in droves. Great products are created by people specializing in the related field, not by armies of people in suits and ties (those guys are all managers and accountants working for someone else). You don’t necessarily need a business degree to succeed in running a company. However don’t let yourself stumble so hard that the fall kills you just because you’ve never navigated terrain like this before. Aquire all the business knowledge that you can for your new company, either by getting some experience launching a smaller venture first or by finding a partner who has done it.

What happens with CustomBar you ask? It gets a new 1.1 release in Winter, accompanied by major fixes to the business model (which is where the delays on the update actually come from). That’s the first block of time I will have since Tilted Pixel’s launch in September to revisit things and get it moving again. In the meantime sales continue to trickle in, but at a much slower rate than I would ever be willing to find acceptable.