Profitability Maximizer: Insights from Dan Sullivan

Introduction

• Host: Shannon Waller
• Guest: Dan Sullivan
• Topic: New exercise called the "Profitability Maximizer"
• Purpose: Filtering mechanism to assess profitability of new capabilities

Origin of the Exercise

• Technologies and future capabilities often seem imminent but may be far off
• Importance of credibility and realistic evaluations
• The need for a structured framework to evaluate new capabilities
• Ensuring new capabilities are profitable and credible

Evaluating New Capabilities

1. Plausible: Vision of the future, no evidence yet, imaginative step
   • Example: Flying cars, possible but not inevitable
2. Possible: Committed to working, starting to bring the vision to life
3. Provable: Objective evidence that it works
4. Permissible: Legally allowed, no regulatory issues
   • Example: Peter Diamandis' private spacecraft faced regulatory hurdles
5. Protectable: Legally securing intellectual property (trademarks, patents)
   • Importance of timely Copyright, Trademark, and Patent registration
6. Priceable: Ability to set a profitable price, testing with check writers
   • Avoidance of undervaluing new capabilities
7. Packageable: Attractive presentation to the market
   • Example: Apple’s meticulous packaging design ethos
8. Producible: Capability to meet market demand
9. Preferable: Superior to alternatives, endorsed by authoritative influencers
   • Example: Apple AirPods as preferred choice among influencers
10. Palpable: Deep consumer desire, transcends cost concerns

Importance of Packaging and Legal Protection

• Effective packaging increases product appeal
• Legal protection ensures confidence and long-term profitability

Implementation Strategies

• Testing in Strategic Coach workshops: To refine the model
• Scoring System: Exponential value increase from 1 to 100
  • Each stage adds increasing value to the final product

Key Takeaways

• Comprehensive 360-degree evaluation for new capabilities
• Checks and balances at each stage to ensure profitability and market success
• Contributions to both internal and external frameworks for new ideas
• Protections lead to higher confidence and market trust

Recommendations for Entrepreneurs

• Use the 10 Ps to systematically evaluate and develop new capabilities
• Focus on protecting intellectual property early
• Ensure pricing strategy reflects value and investment-worthiness
• Adapt existing capabilities by reviewing and refining based on these criteria

Conclusion

• The Profitability Maximizer provides a structured approach to creating new capabilities
• Encourages thorough preparation and strategic planning
• Enhances confidence and market adaptability for new entrepreneurial ventures