Six Secret Variables

Steps to a Successful Start-up

by Chia-Li Chien | 06-14-2010

Many years ago, when I was looking into revamping my business, I was contemplating the purchase of a franchised business. Many of you out there who are thinking about starting a business will find that franchised, licensed or multi-level marketing type of businesses are convenient and ready to go. Best of all, there might be existing businesses that you can buy into instead of starting from scratch. Whatever your decision, certain factors will have to fall into place to ensure your success.

Of every six new businesses started, five fail within five years. Although the high failure rate can be attributed to many factors, one common issue I see (even after surviving the first five years) is misalignment with a business model. And a good business model really depends on how well something called the Six Variables factored in when you first started your business.

For centuries, the Chinese culture has passed along the wisdom of these Six Variables, yet many forgot about them or chose to ignore them. Let’s further examine what they are so you too can have a successful start and a long lasting empire. You can see the complete details in my published article Secrets of a Successful Exit at or . The Six Variables that you should understand are the following:

The G Variables

  • The right time. If you were to introduce the first generation microwave in today’s market, it may not work as well as you expect if compared to when the first microwave came out. Timing is everything, and your products or services will impact how your buyers determine when to buy. Another example is Search Engine Marketing (SEO) or Search Engine Marketing (SEM). In today’s environment, you can find a large number of individuals and companies with expertise in this field. Although the technology was available ten years ago, now, more and more people have access to the web and we are currently at a tipping point to make this level of expertise more attractive and desirable. The timing is right.
  • The right place. Years ago, there was a swimsuit manufacturer which for over ten years could not sell their products, no matter how much innovation they tried. Five years ago, they found themselves with so much accumulated inventory that the owner was ready to close. Ironically, he was on a tour of the Middle East when he realized that he could potentially sell these inventories to Muslim women who desired to cover their entire body. (Remember, he has overstocked inventories, including swimwear fabrics.) Today, he is one of top swimsuit providers to predominantly Muslim countries. He simply happened to market and sell his products in the right place this time.
  • The right people.  We all know that you can’t grow your company ALONE. You need people, especially helpful people. These people can be your staff, team, customers, vendors, mentors, and/or coaches – anyone you come across. Without them, it’s hard to build a team and to gather the resources and systems required to grow your business.

The U Variables


  • Yourself. You can operate your business on your own for at least the very beginning. No one knows your business better than you. An investor may know a lot about your business, but that is still different. The goal is, at some point, for you to have a lesser operations role as you mature your business.
  • Your own profession. In Malcolm Gladwell's Outliers, he uses Bill Gate’s example of taking about 10,000 hours to reach perfection in one profession. That is approximately five to ten years of time if you do part-time work. This does not mean that you can’t change industries. As a matter of fact, you can, but you’ll need to reset your expectations of the number of years for you to be technically very good at your next profession, career, or even job level.
  • Your own money. Have you ever taken out a mortgage to buy your own home? Have you ever wondered why the bank requires a 20% down payment in order to avoid mortgage insurance? It’s because if your own money is in play, the smart people at the bank know that you likely will be more serious about making your monthly mortgage payment. The same thing can be true about your business – if you want investors to come up with 100% of the funding, they may be reluctant to do so since none of your money is involved. Invest some of your own money, and they understand that you’ll think twice about spending profits on something that is NOT an income generating activity.

Okay, so what if you don’t have all six variables lined up like a jackpot on a slot machine? Well, just like when you sit at a slot machine, you’ll try again and again until you hit the jackpot. It does not mean you won’t have success, it just means you may have to spend some money and pull the lever a lot.

There is much to consider when starting out in business. In addition to the Six Variables above, proper discipline, structure and accountability will help you go a long way. Because you’re the boss now – you call the shots. You pull the handle on the slot machine. No one is there to monitor how you choose to play the game.


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