Business Rules of Thumb

Ben Casnocha , entrepreneur, author, and all-around cool guy, just launched a wiki called Business Rules of Thumb , which is based on a 1987 book by Seth Godin and Chip Conley.

According to Wikipedia, a rule of thumb is a principle with broad application that is quickly understood, easily used, and provides a practical method yielding approximate results. Good rules of thumb can be pretty handy every now and again, so I’m glad Ben launched this site.

After some thought, here are a few I created:

  • At least 85% of your job is effective communication with the people you work with. Objectives, plans, and ideas are worthless unless everyone involved understands them well enough to take action.

  • Return on Invested Time (ROIT) is more important than simple monetary return on investment (ROI). Money is plentiful; time is not.

  • The best businesses in the world focus their time and energy on creating, not competing.

  • If your ad is not interesting, it’s irrelevant.

  • Great investors are observant and patient. You are far less observant and patient than you think you are.

  • You often learn the most from what doesn’t go well. From this perspective, temporary failure can be of great value, and all failures are temporary.

Here are a few from people I respect and admire:

  • Nobody spends someone else’s money as wisely as he spends his own. - Milton Friedman

  • Money often costs too much. - Ralph Waldo Emerson

  • The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. - Peter Drucker

  • Good product development is about working to keep the sharp edges instead of smoothing them over. Create a product some people love, not something no one hates. - Kathy Sierra

  • Prototyping is valuable. Once you’ve prototyped your idea, you don’t have to persuade people to like it - they can judge it themselves. - Seth Godin

Published: March 7, 2007 Last updated: March 7, 2007

I Enjoyed This Post
Read more essays by Josh Kaufman →

The Personal MBA

Master the Art of Business

The #1 International Bestseller, Revised & Expanded. A world-class business education in a single volume. Learn the universal principles behind every successful business, then go out into the world and make your own. More →

The First 20 Hours

How to Learn Anything… Fast!

A practitioner's guide to rapid skill acquisition. Accelerate your learning by deconstructing complex skills, practicing the most important elements first, and removing barriers to deliberate practice. What do you want to learn? More →