The Three Buckets Method for Starting a Service Business
- Difficulty
- Easy
- Time to result
- ~months to results
- Steps
- 8
- Confidence
- —
A method for going from 'I don't know what to sell' to paying clients, built on the claim that everybody already knows something because they have been alive and taking in inputs. You mine three buckets for latent expertise — your parents' jobs, your own past jobs, and your current interests — then ask which of those lets you help someone do a thing better. You pick a service business because it is the lowest-risk start: it costs time rather than capital, and you copy what everyone else does while fixing the specific things people hate about it. You deliver the first ten free or charity-funded to remove the awkwardness of selling, collect proof, then convert those same people to paid and ask them for referrals. Throughout, the point is to pay down ignorance debt: trading time for money in order to learn, not to earn.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Mine the three buckets
List what you know from your parents' jobs, from past jobs you have held yourself, and from current personal interests. The reasoning is osmosis: if your dad was a mechanic, you know a great deal about cars simply from being around one for eighteen years.
Pro tip Write all three lists before judging any of them — the discard instinct kills the best options first.
- 2
Ask which bucket helps someone do a thing better
For each bucket, ask what problem you could help someone else solve. In B2B, the target is the problem you could charge the most for, or that could make the client the most money, so you can charge a percentage of that. In B2C, it is how valuable people perceive their problem to be.
- 3
Read your favour requests as a price list
Notice what people already ask you to do for free because you are good at it — workout programmes, setting up their Wi-Fi. What people ask you to do as a favour is an indication of the things you can charge for later.
Pro tip Keep a running note of every unsolicited 'can you help me with…' for a month.
- 4
Pick a service business and copy-then-improve
Start with a service business — doing stuff for money — because it is the lowest risk: it is just your time, not capital. You do not need a novel idea. Look at what everyone else is doing and do it better: faster dry cleaning, lawn care that doesn't leave trimmings around the edges.
Pro tip List what customers visibly hate about the incumbent; each complaint is your differentiator.
Watch out Tech startups fail at just as high a rate as everything else, and they burn capital doing it.
- 5
Set up the only two things you actually need
A bank account and a way to process money. The guest launched with an LLC and a PayPal account and no website. Everything else is Googleable — thirty million businesses in the United States have figured it out.
- 6
Deliver the first ten free or charity-funded
Make the first ten free, or have clients donate the fee to a charity of their choice, so nobody feels weird about the selling. Clients still value it because they pay, they get a write-off, and you build goodwill in the marketplace. Agree upfront that you collect before-and-after proof.
Pro tip Make the proof a condition of the free work, not a favour you ask for afterwards.
Watch out Without agreeing the testimonial upfront, you finish the free phase with nothing to sell against.
- 7
Convert to paid, then ask for referrals
Transition those first clients from free to paid — same amount, now to you instead of the charity. If they refuse, that tells you either you are not good enough or they are not the right clients. A percentage will stay and pay, and those people are your referral source.
Pro tip Announce publicly when you go paid; the guest's whole 'launch' was a post saying he'd made a website.
- 8
Optimise for learning, not earning
You are still trading time for dollars, but the point is to trade that time for money in order to learn, not to earn. The vast majority of your income arrives as education while you pay down ignorance debt. Take steps and the next step becomes illuminated.
Watch out Do not expect the first business to be the one — most entrepreneurs have a graveyard of failures behind them.
In the wild
At 23, after eight years of training and several state records, the guest kept getting asked for workout programmes. During his last year of consulting he launched a 'free training project': clients paid $500 to $1,000, but donated it to a charity of their choice in exchange for working with him. They valued the work, got a write-off, and he built goodwill. After a year he had around twelve clients with strong before-and-after pictures. He then transitioned many to paid — same amount, now to him — announced it with a public post that he had made a website, and asked for referrals.
→ About 20 clients at $200 a month — roughly $4,000 monthly for four hours of fulfilment every Saturday.
Ali describes people on his team starting freelance work. Before, they framed their offer as an activity — 'I offer writing as a service' — and struggled. Once they had seen what a creative business looks like from the inside and could name a specific problem a business had, their eyes lit up and they reported that making money suddenly felt easy. The shift was not new skill acquisition; it was reframing the same skill from an activity to a problem, and pointing it at businesses, which can pay.
→ Same skill, repackaged as a business problem, converted to paid work quickly.
Common mistakes
Waiting for a novel idea
People believe a business needs some original invention. The guest's position is the opposite: look at what everyone else is doing and try to do it better. The obvious holes in existing services — bad edges on the lawn, slow turnaround — are the whole opportunity.
Planning 100 steps ahead
Trying to think a hundred steps into the future with no context is irrelevant because chaos will break the plan anyway. Once you start taking steps, the next step becomes illuminated — the plan is discovered by moving, not before moving.
Selling an activity instead of a problem
Framing yourself as 'I do writing' keeps you competing on hourly rate. Connecting the same skill to a specific problem — preferably one a business has, because businesses can pay — changes what you can charge overnight.
From the transcript
“if I had put those into three buckets, it's like parents stuff, past jobs of self, and current interests”
“what people ask you to do as a favor is an indication of the things that you can charge for later”
“you're you're you're trading that time for money in order to learn not to earn”
From the episode
7 Lessons I'm Taking Into 2023 - Season 4 Wrapped
Season 4 Wrapped