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It takes focus and determination and perseverance to continue to build something big.

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It takes years, not months.

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And so you have to have somebody can lock in on a target and drive towards that for years.

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Welcome to the game where we talk about how to sell more stuff to more people in more ways and

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build businesses worth owning. I'm trying to build a billion dollar thing with acquisition.com.

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I always wish pesos, musk and buffet had documented their journey. So I'm doing it for the rest of us.

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Please share and enjoy. I want to talk to you about some of the things that we look at in the

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companies that we're looking to invest in. And you can take these frames in terms of how we

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perceive the value of a founder and or their company and how you can translate it into your own

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business. So you've probably heard that fundamentally I'm going to look at the the founder themselves

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and I'm going to look at the opportunity they're pursuing. So there's kind of two elements here

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are really three. There's the who are we serving, how's the business structured, and who is the

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founder, right? And I have a 55 minute presentation that that goes on this in a lot of depth. But I

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want to give you the the back of napkin quick look at this. And so if I'm looking at a founder and

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just a few years are curious, 80% of our decision is weighted around the founder. Here's why I can

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change the market that we're serving. I can change and improve the business model that we're using.

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I cannot change the founder. And so that is where 80% of our attention goes in terms of whether or

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not we want to take on a business, right? If the you know, the business is doing through million

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or more a year, you know, they're a service you learning coaching type business. Like if they

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check those boxes, they're US based, et cetera, like cool, like we have the basics out of the way.

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And as long as I don't hate the the market that we're serving, then I can see and obviously a lot

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of times there's plenty of improvements to the business, which is what we're there for, right? Then

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it looks honestly all at the founder. And so I want to tell you some of the things that disqualify

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people for us, all right? So this will hopefully be hugely enlightening to you in terms of looking

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inwardly at your own character traits, because there are three things that kind of comprise the

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entrepreneur themselves as I see it, right? You've got belief skills and traits, all right? The

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beliefs I can change or break, right? So if someone's like, I just don't think we can charge one

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then I can break that belief. I feel fine about that, right? Skills I can help them acquire skills

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like where I can fill up their team with people who already have this skill to help grow the

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business, right? So skills and beliefs are things that I can fix more easily from the outside.

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Traits are the ones that are very, very difficult. And so when we're looking at these businesses,

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the vast majority of the time are biggest focus. If they meet all the other requirements of like,

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is this the type of business that we want to go after? It all falls on the founder. And so I'll

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tell you the two biggest, or probably three big as I'm just thinking out loud, just from the

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just the calls I've taken the last month or two, the biggest red flags that I fuck, you know what?

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I'm just going to say them all. So number one, and this is the biggest one, right? And I'll give you

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the second biggest one last, all right? The biggest one is ego. Like, and the thing is it's not just

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having a little bit of ego. Most people are not just raging arrogant assholes, right? Most entrepreneurs

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have to have a certain amount of confidence in order to do what they're doing. And I understand

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that. But if we sense even a hint of posturing or takeaway selling stuff like that,

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it's just an immediate pass. It's like, nah, I'm good. Like, I just, I don't need to do this. Like,

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I wish you the best. And you know what? Some of those guys are successful, but it's just not

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what I want to work with for my life, right? And so number one, and by far, the number one reason

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that we disqualify companies is that we find some sort of ego within the founder. The second is

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focus. All right. So if we have a founder, and this is kind of in two ways, you can look at it.

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Some founders come in and they're like, well, I have six businesses, immediate, no, right? No,

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thank you. You can't focus. No, thank you. So that's the, that's the macro one. But even on a

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micro level, if someone's scatterbrained, they're all over the place in the call, they can't keep

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a train of thought. It's like, it's going to be impossible to communicate with them because they

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can't focus on what we're even saying, right? And so it'd be very difficult to implement change

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because they can't even hold their own attention for like five seconds. And so first is do this

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first of the ego second, what's their attention span, right? How focused are they as an entrepreneur?

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Because it takes focus and determination and perseverance to continue to build something big. It

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takes years, not months. And so you have to have somebody can lock in on a target and drive

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towards that for years. And that takes focus and that takes discipline. And this one's mean saying

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no, right? I mean, saying no to a lot of things. A lot of people don't want their no muscle is too

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weak, right? It's not strong enough yet. All right. And so does that take time to develop?

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Absolutely. Do I want to take the time to develop with them? Probably not, right? So number one ego,

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number two, focus number three, emotional reactivity. So if I see someone who I sense I think is going

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to be emotionally reactive, they're going to have ups and downs and swings. Then I know that what's

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going to end up happening is I'm going to become a therapist rather than an advisor to the business.

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And that's not the role that I want to play. And so although I feel like I can't play it,

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I do not want to or enjoy it. And so when we see that, that's an immediate reflect. So if you

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if you feel like yourself, you're you come in hot one day, you come in cold another day, you

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you say, Hey, team, we're doing this today. And then you're like, just get it. And then you get

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emotionally, and a lot of times the focus and the emotional reactivity, a lot of times go

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hand in hand, not always, but oftentimes they do. So somebody who's usually very emotionally

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reactive tends to be scattered and all over the place, but not always the reverse. Some people

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are very emotionally fine, but they just scattered as fuck, right, which is a pain in the ass and

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hard to do it. The next one when it comes to founders is what's the leadership dynamic look like?

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Do we sense any kind of strife interpersonal drama, misalignment, resentment, anything that we can

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kind of suss out, you know, I mean, during during the diligence process is usually a red flag.

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So this is like unsupportive spouses is usually a problem, right? Or if we have, you know,

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co-founders and one person has less equity and they feel resentful of the guy who has more,

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that could be a problem. Or if we just have a super complex cap table, which means that there's

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a zillion people who have ownership. It's like, oh, there's too many people who have a voice in

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this. It's going to be a pain in the ass to get stuff done. Is that to say that you can't do it?

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Absolutely not. It's just not something we want to do.

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Most of the nation real quick, if you are a business owner that has a big old business and wants

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to get to a much bigger business, going to $50, $100,000 plus we would love to talk to you.

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And if you like that, we would like to hear more about it. Go to acquisition.com and you can

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plan anywhere on the page and talk to one of our team and see if we can help you get there.

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And so those are the four big ones that we're looking at. When we see a company that's coming in

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as number one, do they have ego? Number two, how focused are they on a macro level,

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as in do they have lots of businesses or do they just have one? And then on a micro level,

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can they just focus on what we're talking about right now without going off on crazy tangents?

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Number three, what is the level of emotional reactivity? Like if we say something,

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do we think that they're going to get charged up and then crash and then have these constant ups and

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downs of emotional roller coaster, which none of us want to be a party too? It just makes running

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a business difficult. And it also makes it building a team very difficult because people just

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don't want to deal with that, right? And so if you're that guy, if you can identify with that,

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work on it. You know what I mean? If you can identify with having poor focus, work on that.

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And the way you work on focus is by one, removing things and two, saying no. Like those are,

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that's what that's the tactics of focus, right? Is that you look at your calendar,

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you remove things and you say no to future things. That's how it works, all right?

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There's a video made called The Woman in the Red Rest, which dives into this in a lot more detail,

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all right? And then the fourth one is the the leadership dynamics at the top. And a lot of times

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this is the dynamic between the co-founders. Sometimes we had an instance recently where we had a

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founder who absolutely was like, I have the best operator in the world. This person's amazing,

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blah, blah, blah. Then we got on the phone with the operator and we were like, this is a train wreck.

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This person has no idea what they're doing. And so then what happens then is then it makes me

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question the judgment of the founder, right? It's like, is this person so unaware that they can't see

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this? And part of that sometimes can be ignorance. Like they just don't know what it looks like. And so

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they think this is what a good operator looks like. But sometimes it's that like their judgment of

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character and others is also off, which is a deep issue because then it means it's much more difficult

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for us to get them to hire good people to scale the company, right? So like if you have a terrible

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people picker, that's a hard problem to fix, right? And so the best way to solve that problem,

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if you're curious, is to not and rely on people who have good track records and then start learning more

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and more what those things look like and then start replicating and have multiple people test your

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hypothesis around someone's like, this is what I'm thinking, are you seeing the same thing? All right,

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and so that can improve. I'll tell you somebody who has an amazing picker, like, freaky good is Laila.

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I think Laila is a better picker than I do. I think I'm decent, but she's like six cents. It's

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weird. You know, the other day we had one of our companies on and it's a company that's been doing

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really, really well. And we got off the phone call and she was like, they're not telling us something.

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I was like, what? She's like, they're just not telling us something. I don't know what it is.

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They're not telling us something. And lo and behold, there was some major issue that had happened

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in the company and then we found out through another grapevine, reached out to the founder, he's like,

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I was really embarrassed. I didn't want anybody to know. I didn't want you guys to know. And obviously,

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we handled it. But it's like, it's freaky. And so I mean, sometimes, and like, I hired permanently

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hired Laila to shore up my deficiency there because what I met Laila, my people picker was pretty bad.

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Like, pretty bad. I did not. I picked terrible. I picked bad partners. I picked bad,

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back teammates. I picked people who didn't compliment my skill sets. I picked people, you know,

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I just had a terrible job with this. And I tend to be overly trusting. And Laila shores me up with

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that. And so we're kind of getting, getting, getting. And so for those four things, if you're like,

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well, hell, Alex, I have all four. Well, you can work on them one at a time. All right. So if

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you're ego, it's like, talk less, listen more and realize that you're probably not right. And

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the easiest way to test this out is think about yourself five years ago and how wrong you were there

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compared to who you are now. And think about the fact that there's a version of you 10 years

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from now that thinks about yourself as a complete idiot. You can think of yourself as a completed

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10 years from now. Then you're probably not as right as you think you are. And so I think the

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goal is usually to be less wrong than more right. Just as a mental frame. For the focus issues,

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it's eliminate and saying, no, for the emotional reactivity. For me, I, you know, I just,

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I move everything to death, life and death immediately. And then that centers me. So something

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bad happens. Am I going to die? No. Okay. Great. And then we move back down to reality. Right. And so

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I think if you can develop frames around managing your own stress tolerance and increasing your

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tolerance for stress and how quickly you come back to baseline, we'll yield space. Another quick

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hitter on that is don't make decisions when you feel emotional. All right. Now guys will have

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a harder time with this than women do. But like in terms of recognizing when they're emotional,

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because yes, men, we have the same amount of emotions as women do. We just portray them

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differently. I can feel when I get angry, right? I could just, I'm just, I'm heightened. You know what

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I mean? My, my awareness is faster. I'm shorter. I'm more aggressive. And I don't make decisions that

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I don't talk to teammates when I'm in that state. And that's usually when I just give it a night

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to sleep it off. And a lot of times that has saved me many, many terrible decisions and many things

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that I, I shouldn't have said that I did not end up saying because I just gave it a little bit of

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time between when the emotional thing happened and when I respond to it. And so if you want to

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decrease the emotions that you have, your emotional reactivity, increase the time delay between when

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something happens and when you react to it, because big picture hours in business almost never

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matter like almost never like really like an hour two hours a day almost never matters. But what

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you say will matter for a lifetime. So just think about that. Like just increase the time between

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when something happens, the stimulus and your reaction and you will in general tend to make better

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decisions and say the right thing. And then with founder dynamics, clean that shit up. Clear roles

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that have to be defined between who does what rather than lots of overlap, lots of mishmash,

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making sure everybody's okay with the way that they're being compensated and that any kind of

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interpersonal dramas are aired. And so there's the four things that are the interpersonal dynamics

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that the companies that we're looking at when we want to invest. And if you have those things,

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you can look at how can I clean up my own personal space to increase my traits. And the reason this

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is so important is that you're not going to build a big business if you are not worthy of building a

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big business, right? Like the world doesn't care how much you want it, right? We're only cares who you

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are. And so I think you have to work on yourself to do the things to become worthy of of the things

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that you desire. So lots of everyone and I'll see you guys in the next one.