Ep: 009 Aug 01, 2020
What is Your Land Investing Strategy?
I'm a data geek. I like to understand things so that I can feel more confident in my decisions. Too much analysis can be the death of dreams. Because in the pursuit of perfect knowledge, we delay taking action. In this episode of the Land.MBA Podcast, we're going to talk about the role of analysis in the land investing business. And knowing when you cross the line into analysis paralysis.
At heart, I'm a military guy, I fall back on some military principles. As George Patton said,
“A good solution applied with vigor soon is better than a perfect solution applied 10 minutes later.”
It's got to be action. So if you're looking for 100% confidence, you're missing the market. Bill Gates says when he hits 80% certainty he takes action.
We can see this principal in the development of product. It used to be that when you develop a product, you would go out and you would do market research and you figure out what the market wanted and you build your product plan from there. But it doesn't work that way anymore. Now, you create something called the “minimal viable product”. You get it out there and you let the market give you feedback. The market tells you what they want. You don't have to guess anymore. So it's all about moving fast and getting something out there so the market talks to you.
So how much analysis is the right amount? It depends on the situation. But again, if you're waiting for 100% confidence in a decision, you're waiting too long.
These decisions aren’t always easy. Take, for example, pricing mailers. It can be a little bit nerve racking trying to figure out the right price. You can essentially kill your model because of spending so much time doing it. Conversely, being too flippant can also spell disaster. So if you're using a tool like Price Boss, you can bring a lot of data into the model and turn out an analysis based on a lot more data than you could copy and pasting it onto a spreadsheet.
But how much do you really need? The two words you need remember are: “diminishing returns”. At some point, you're just putting more information in there, but you're not getting a real return on the level of effort and time that you're investing in that additional information.
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