WEBVTT 1 00:00:00.000 --> 00:00:04.720 Strategy is a big, fluffy, amorphous word that gets tossed around a lot, 2 00:00:04.720 --> 00:00:07.600 and no one knows what the fuck it means, but it's probably important. 3 00:00:07.600 --> 00:00:09.680 And in my opinion, it is the most important. 4 00:00:13.200 --> 00:00:16.560 Welcome to the game where we talk about how to sell more stuff to more people in more ways 5 00:00:16.560 --> 00:00:20.800 and build businesses worth owning. I'm trying to build a billion dollar thing with acquisition.com. 6 00:00:20.800 --> 00:00:23.760 I always wished pesos, musk and buffet had documented their journey, 7 00:00:23.760 --> 00:00:25.920 so I'm doing it for the rest of us. Please share and enjoy. 8 00:00:26.880 --> 00:00:31.440 Okay. What is up? Everyone pumped? 9 00:00:31.440 --> 00:00:34.880 Okay. So like when you swag, I'm wrapping a little bit. 10 00:00:36.480 --> 00:00:40.320 Okay, so I'm going to do something different than I normally do for any kind of talks 11 00:00:40.960 --> 00:00:44.240 because I was thinking about this and I was like, all right, like how can I get 12 00:00:44.960 --> 00:00:49.360 everyone there to make the most possible money leaving the event, right? 13 00:00:49.840 --> 00:00:57.120 And so I kind of structured this a little bit like many TikTok videos back to back to back. 14 00:00:57.120 --> 00:01:02.560 And so if you don't like or are not interested in something that I'm talking about for a moment, 15 00:01:02.560 --> 00:01:06.560 wait five minutes. That's how I'm going to structure this today. 16 00:01:06.560 --> 00:01:11.840 And rather than do slides which is normally what I do, I actually want to draw the stuff 17 00:01:11.840 --> 00:01:17.440 live with you. And I think it's more engaging that way because if you've ever seen like a math 18 00:01:17.440 --> 00:01:21.680 problem on a board and it's just like all done versus like someone walking through the math, 19 00:01:22.960 --> 00:01:28.560 sinks or hits different, that's at least the theory. And if it sucks, you can tell me at the end. 20 00:01:28.560 --> 00:01:35.840 All right. Cool. Great. Okay. So I was originally asked to talk about branding on social media. 21 00:01:36.800 --> 00:01:41.600 I will talk about brand for about five minutes. And the main reason for that is because I don't 22 00:01:41.600 --> 00:01:47.280 think it's going to make you more money. So I'm going to be hijacking the other 55 minutes of my talk. 23 00:01:47.280 --> 00:01:51.520 To more shit that I think will make you money than talking about social media branding. And that may 24 00:01:51.520 --> 00:01:59.680 sound conflicting with how I am doing things, but it's more about context. So everyone here, 25 00:01:59.680 --> 00:02:04.800 who here owns a brick and mortar gym? Can I just get it like a show of hands? Wonderful. Okay. 26 00:02:05.840 --> 00:02:09.680 Here's my quick thing on brand. And then I'll get to all the stuff I'm going to draw. So 27 00:02:10.640 --> 00:02:18.480 big picture. Brand isn't actually a thing. It's an association we make between things that we know 28 00:02:19.120 --> 00:02:24.320 and things that people don't know, which is usually our company. And so if you think about a brand 29 00:02:24.320 --> 00:02:30.240 like a bouquet of flowers, right? Got these little flowers. These are my flowers. A bouquet of flowers, 30 00:02:30.240 --> 00:02:37.120 thank you. You're going to love the rest of the presentation. A bouquet of flowers isn't actually 31 00:02:37.120 --> 00:02:41.600 a thing. It's many things put together and then we put it in our heads as an idea as one, 32 00:02:41.600 --> 00:02:45.520 but it's not actually anything. Because if you spilled on the floor, it's not a bouquet anymore, 33 00:02:45.520 --> 00:02:52.720 right? And so when we brand, think of a brand as a bouquet of flowers, but it's your bouquet of flowers. 34 00:02:52.720 --> 00:02:58.080 And what you're putting inside of that bouquet are the individual, intangible ideas that you want 35 00:02:58.080 --> 00:03:02.240 to associate together with the thing that people don't know about, which is usually our company, 36 00:03:02.240 --> 00:03:07.760 right? And so if I were to say some things about my brand, you probably know that I have the 37 00:03:07.760 --> 00:03:13.600 best calves ever, right? So that would be something that's like associated with my brand. 38 00:03:13.600 --> 00:03:18.320 There probably be some things like dessert. That's something that's associated with my brand. 39 00:03:18.320 --> 00:03:23.120 Now those are like fun little doodads, but hopefully some of the things that you really 40 00:03:23.120 --> 00:03:30.240 associate with my brand are giving first, providing value, being patient, doing the boring work, 41 00:03:30.240 --> 00:03:36.000 whatever, doing blah, blah, blah, right? And so there are these intangible things that we associate. 42 00:03:36.000 --> 00:03:42.160 And the thing is that like if I were standing on stage next to let's say a guy who owns a brothel 43 00:03:43.200 --> 00:03:50.080 and a drug dealer, you would associate my brand with that. And so you think differently, like the bouquet 44 00:03:50.080 --> 00:03:55.520 would look different. And the reason brand and reputation is so hard to maintain is because so 45 00:03:55.520 --> 00:03:59.360 many people want to rub their shit on yours. Because as soon as yours gets better, 46 00:03:59.920 --> 00:04:03.760 they want to associate theirs with yours, which is the right move for them to make, 47 00:04:03.760 --> 00:04:08.000 but it gets harder and harder for you to make to get them to not do that because they continue 48 00:04:08.000 --> 00:04:12.800 to dilute and not really dilute because you don't actually dilute anything. You just make more 49 00:04:12.800 --> 00:04:17.280 associations that aren't with what you want to do, all right? So let me give you an idea here. 50 00:04:17.280 --> 00:04:24.480 So let's say here's my bouquet. And I've got this sad flower. So this is a sad face flower. 51 00:04:24.480 --> 00:04:30.640 There's my sad flower. If I handed my wife this bouquet, all of the roses are perfect, 52 00:04:30.640 --> 00:04:37.360 and there's this one that's just wilted and dead. It looks a lot different, right? The bouquet, 53 00:04:37.360 --> 00:04:43.680 the brand, the perception of it massively shifts even with one fucked up flower. And so that's why 54 00:04:43.680 --> 00:04:48.080 creating a brand is much more about cultivating deliberately the associations you want to make 55 00:04:48.080 --> 00:04:52.400 with the thing you have that people don't know, with the things that your ideal audience likes 56 00:04:53.200 --> 00:04:59.280 that you want them to like too. Does that make sense? I'm seeing some head nods. And so 57 00:05:00.320 --> 00:05:04.720 if you have a clean gym, people will start to associate your gym with the intangible idea of being 58 00:05:04.720 --> 00:05:09.840 cleaned, right? If you have really friendly people, they'll start associating smiley faces, 59 00:05:10.560 --> 00:05:15.360 recognizing their name when they walk in the door, with the brand, which in the beginning, 60 00:05:15.360 --> 00:05:20.240 they don't know what it is. The name is meaningless to them. But we create the meaning by associating 61 00:05:20.320 --> 00:05:25.040 with the things that we know that they like. And that is the process of branding done at scale, 62 00:05:25.040 --> 00:05:31.200 and you do it over and over and over and over. Right now, we put out 250 pieces of content a week, 63 00:05:32.000 --> 00:05:35.840 and in six months, we'll probably be at a thousand a week in terms of we're going to be putting out. 64 00:05:36.480 --> 00:05:42.880 And it's just an absolutely brutal, repetitive, violent process to get as many people as possible 65 00:05:42.880 --> 00:05:48.560 to remember one or two things about you. Does that make sense? Now, let me tell you what doesn't 66 00:05:48.560 --> 00:05:56.880 probably make sense for you. You probably can't do that, which is why I talked to Kale before I 67 00:05:56.880 --> 00:06:05.520 got up here. The brand that you're going to build in a local community is going to be based 68 00:06:05.520 --> 00:06:11.120 on the quality of your product and your service. Your reputation is going to be based on that. 69 00:06:11.120 --> 00:06:15.200 And so if you feel like you want to strengthen your brand, strengthen the product, 70 00:06:16.080 --> 00:06:20.880 you don't need to make a video on Instagram every day talking about fat and carbs. 71 00:06:21.520 --> 00:06:26.080 Because real talk, you're not going to be better, most likely, than the hottest chick on planet 72 00:06:26.080 --> 00:06:30.640 earth talking about the same thing in terms of reach. And the thing is that here's the double edge 73 00:06:30.640 --> 00:06:35.120 sword. Let's say you are amazing at it. If you do that, what's going to happen is that you're 74 00:06:35.120 --> 00:06:40.720 going to get more demand on your personal brand and online, et cetera, people who don't live 75 00:06:40.720 --> 00:06:47.040 close to you, that will be a greater business opportunity for you than a single local location. 76 00:06:47.040 --> 00:06:49.760 And so then you're going to have a choice. And many of you probably have done this. We'll have 77 00:06:49.760 --> 00:06:53.200 got some online clients. I've got some in-person clients. And it's totally spread thing. I don't 78 00:06:53.200 --> 00:07:00.560 know what the fuck I'm doing. Real talk. Anyone? Just resonate. Right. Okay. And so that's why it's really 79 00:07:00.560 --> 00:07:04.800 about focusing on the one opportunity that's going to give you the highest ROI, which is going to be 80 00:07:04.800 --> 00:07:09.280 the remainder of the time that I'm going to be talking today. All right. And so I was asked to talk 81 00:07:09.280 --> 00:07:14.000 about social media and branding. I think that for most local businesses, the brand is going to be 82 00:07:14.000 --> 00:07:18.800 about the reputation. The reputation is going to be built on consistently meeting expectations. 83 00:07:19.440 --> 00:07:23.280 Now, the thing is, is we always talk about overdelivering. And I've even talked about overdelivering. 84 00:07:23.280 --> 00:07:27.520 But I think a lot of times I think about this. And the real real is that most people just can't even 85 00:07:27.520 --> 00:07:32.240 meet expectations because we sell so hot. And so if you could just meet the perception that this 86 00:07:32.240 --> 00:07:36.240 person has, the expectation they have of the service that they're going to get, you already won. 87 00:07:36.880 --> 00:07:40.640 Make promises, keep promises, make promises, keep promises. And if they will like the first promise 88 00:07:40.640 --> 00:07:49.200 you made them and you keep it, they'll be with you forever. Okay. That was brand. So if you were like, 89 00:07:49.200 --> 00:07:55.760 I don't care about brand, welcome to the next TikTok. All right. So these are the topics that I want to 90 00:07:55.760 --> 00:08:00.480 hit on today. So we're going to start with a little exercise. I'm going to call it the magic wand. 91 00:08:00.560 --> 00:08:05.920 All right. So right now, if I have a magic wand or you have a magic wand and you wave it, 92 00:08:05.920 --> 00:08:11.280 then you get to make as much money as you want. All right. So write down or put at least think 93 00:08:11.280 --> 00:08:16.880 about it in your head. What number that would be per month. Okay. How much one are you making per month? 94 00:08:17.520 --> 00:08:23.920 Okay. Hopefully doesn't take too long to think of a number. Now, who here currently is making that 95 00:08:23.920 --> 00:08:28.480 amount of money? Please raise your hand. Wonderful. So we have just done established a gap between where 96 00:08:28.480 --> 00:08:39.040 you are and where you'd like to go. Fantastic. So here's you. Here's goal. We all just established. 97 00:08:40.880 --> 00:08:50.480 Now in scenario one, you have these goals, right? And there's all of these different ways of getting 98 00:08:50.480 --> 00:08:57.760 there, right? And the problem is you're like, which one do I do before I explain more on that? 99 00:08:57.760 --> 00:09:04.480 scenario two is I don't know what to do to get to there. Let me tell you how these feel. This one 100 00:09:05.360 --> 00:09:11.680 feels like anxiety. So if you feel stressed or you weren't overwhelmed about which thing you should 101 00:09:11.680 --> 00:09:20.400 do, that's this. If you don't know what to do, you're at a loss. You feel hopeless because you're 102 00:09:20.400 --> 00:09:24.400 like, I don't know what to do. Like, I don't know. I don't know what to do. And it's not about 103 00:09:24.400 --> 00:09:29.600 picking. It's like, you don't even know where to start. And this has been really important for me 104 00:09:29.600 --> 00:09:35.280 to identify if I feel anxiety, it's because I don't know which thing to pick. If I'm feeling sad, 105 00:09:35.280 --> 00:09:39.200 it's because I feel hopeless. I'm like, okay, hopeless in this means I have a lack of choices. 106 00:09:39.200 --> 00:09:44.240 So I have a lack of choices means I have ignorance around this topic. Okay, this makes it solvable. 107 00:09:44.240 --> 00:09:48.960 So then I can start solving for I need a path so that I know what to do. It's the only thing for 108 00:09:48.960 --> 00:09:53.920 I know me personally. That's what makes me sad is if I don't know what to do, I get sad. Is this 109 00:09:53.920 --> 00:10:04.160 resonating with anyone here? Okay. So that was to talk to. This one was about figuring out which 110 00:10:04.240 --> 00:10:09.840 thing to do. This is about figuring out what to do. So when you're deciding which thing to do, 111 00:10:11.520 --> 00:10:18.640 this is a clear case of lack of strategy. All right. Now, strategy is a big, fluffy, 112 00:10:18.640 --> 00:10:22.720 amorphous word that gets tossed around a lot and no one knows what the fuck it means, 113 00:10:22.720 --> 00:10:28.080 but it's probably important. And my pin is the most important. But I'm going to give you a 114 00:10:28.080 --> 00:10:35.360 different definition for this to make it a little bit more useful. Okay. Strategy is just 115 00:10:35.360 --> 00:10:39.680 prioritizing. It's all this. Whenever you hear someone say, we have to figure out our strategy. 116 00:10:39.680 --> 00:10:45.280 It just means we have to figure out our priorities. It's all means. And in layman's terms, it's 117 00:10:45.280 --> 00:10:50.240 what's going to get us the most bang for the buck? If you want the fancy definition that I have, 118 00:10:50.240 --> 00:10:56.480 it's how you choose to allocate resources that are limited against unlimited options. That is 119 00:10:56.480 --> 00:11:02.160 strategy. And the tough part about this, about strategy in general, is that when you're looking 120 00:11:04.160 --> 00:11:10.160 here, you have all these options. Strategy is figuring out, actually, there's one that's right here 121 00:11:11.520 --> 00:11:16.240 that takes us off the page. Because the most costly thing in business isn't just the unknowns, 122 00:11:16.240 --> 00:11:20.160 but it's the unknown unknowns, as in the things that you didn't even know you could pick from. 123 00:11:20.240 --> 00:11:26.480 So let me give you three examples. Example number one, we had a company. So the first investment we 124 00:11:26.480 --> 00:11:31.520 made, I was still, I still owned 100% of gym lunch at this point. It was a photography company. 125 00:11:31.520 --> 00:11:35.680 And so this photography company had a single location and the owner had an agency to help photography 126 00:11:35.680 --> 00:11:41.680 owners. And he was like, I want to do what you did with gyms with photography. I was like, okay. 127 00:11:41.680 --> 00:11:44.080 And so the more I got to know him, the more I learned about the business, I was like, 128 00:11:44.720 --> 00:11:50.160 nah, I don't think we should do that. Because I'll tell you the stats around it. So he was like, 129 00:11:50.160 --> 00:11:56.640 well, I charged five grand. And I was like, okay, well, what is the average photography studio ad 130 00:11:56.640 --> 00:12:02.400 in revenue after using your thing? It's a 400,000 year. I was like, so they ad 400,000 year. And he's 131 00:12:02.400 --> 00:12:05.520 like, yeah, I was like, and you're charging, say it again, he's like $5,000. So I was like, okay, 132 00:12:06.480 --> 00:12:12.560 let's not do that anymore. And I was like, does it cost less than $400,000 to make? In my 133 00:12:12.560 --> 00:12:16.160 mind, that was added revenue, not total. And his was doing millions. And I was like, okay, 134 00:12:16.160 --> 00:12:19.920 how much does it cost to start one of these? And he was like, not a ton. And I was like, ha, 135 00:12:21.680 --> 00:12:27.120 raise the ad here. I was like, what if we own a mall? And so that's what we did two and a half 136 00:12:27.120 --> 00:12:33.520 years ago. And now we have 77 individual studio locations in terms of rooms where we take pictures. 137 00:12:35.120 --> 00:12:40.080 And that business went from a million and a half a year to two and a half million a month 138 00:12:40.880 --> 00:12:47.040 in that time period. The reason I bring this up is that it wasn't a move that was on the board. 139 00:12:47.040 --> 00:12:50.400 He's like, how do I grow this agency? How do I turn this into a coaching thing? And I was like, 140 00:12:51.040 --> 00:12:57.840 no, like you have a business model that has amazing returns on capital. Let's just do a ton of them, 141 00:12:57.840 --> 00:13:00.800 right? And it was operationally simple. We could centralize a lot of the stuff, which is different 142 00:13:00.800 --> 00:13:05.760 than like Jim. Jim is a lot harder to centralize things, more decentralized. So I show this to say 143 00:13:05.840 --> 00:13:10.240 that right now, if my goal here is to make you guys as much money as soon as possible at the time, 144 00:13:10.240 --> 00:13:15.840 I am done my 46 minutes. Then if I can just get you to make the one chest move that will make you 145 00:13:15.840 --> 00:13:19.760 the most money, then it will ROI everything you do this year or maybe the next five years. 146 00:13:20.480 --> 00:13:24.960 Because fundamentally people don't actually move faster than other people. Like you see me walk. 147 00:13:24.960 --> 00:13:30.720 It's not like I'm hyperactive. It's just you get more for each step when you are more strategic. 148 00:13:30.720 --> 00:13:37.600 When you have better priorities and you allocate your resources time, money, energy into the 149 00:13:37.600 --> 00:13:40.960 fewest moves that get you the most bang for the buck, you make the most money. 150 00:13:42.880 --> 00:13:47.600 Hey guys, real quick. If you're new to the podcast, I have a book on Amazon called 100 151 00:13:47.600 --> 00:13:51.600 million dollar offers that over 8,000 five star reviews and it has almost a perfect score. You can 152 00:13:51.600 --> 00:13:55.680 get it for 99 cents on Kindle. The reason I bring it up is that I put over a thousand hours into 153 00:13:55.760 --> 00:14:00.480 writing that book and it's my biggest gift for our community. So it's my very shameless way of 154 00:14:00.480 --> 00:14:05.440 trying to get you to like me more and ultimately make more dollars to that later on in your business 155 00:14:05.440 --> 00:14:10.480 career. I can finish the part with you. So that's my gift. Go check it out. Amazon and back to the show. 156 00:14:12.400 --> 00:14:17.200 So back to this. You guys want to hear a different example? So we had a we have a PR company that we bought 157 00:14:18.800 --> 00:14:24.000 that was selling 100 units a month of PR services and they did decent. 158 00:14:24.000 --> 00:14:28.640 Decent business, really good marketer, so so delivery. But I really like the founder. 159 00:14:29.360 --> 00:14:35.520 And so we dove into the data and it looked like 85% of the businesses turned out within two or 160 00:14:35.520 --> 00:14:41.840 three months, which is horrendous. 15% of the customers paid the most and stayed the longest 161 00:14:41.840 --> 00:14:48.960 and they were different. I was like, wow, that idea. What if we stop selling these 85% and only sell 162 00:14:48.960 --> 00:14:54.480 these 15 and cater our stuff to only them? And he was like, that would kill my business. Mind you, 163 00:14:54.480 --> 00:14:59.600 recurring theme of the first one, when I told him to shut his agency down, he had to go to zero and 164 00:14:59.600 --> 00:15:05.840 then built the next thing. And for nine months, he was basically at zero-ish, hard, like tough, 165 00:15:05.840 --> 00:15:10.240 very simple to say, very hard to do. You guys imagine if two locations, I was like, hey, I can 166 00:15:10.240 --> 00:15:14.880 have to get there for a year. You're going to have to make no money. Cool. What do you do? Play 167 00:15:14.880 --> 00:15:18.800 long game, right? And he was willing to do that. That was me talking to him off a cliff every week 168 00:15:18.800 --> 00:15:24.960 being like, hey, man, we're going to get there. And so with this individual, with the PR, 169 00:15:25.840 --> 00:15:31.520 we, he cut 85%, we catered the messaging and we made it way more niche down to this specific 170 00:15:31.520 --> 00:15:37.440 avatar and we 10x the price. And now we sell more units than we did before. We 10x the company, 171 00:15:38.000 --> 00:15:42.720 strategy rather than thinking, okay, what am I going to do to just get more? Now, there's always 172 00:15:42.720 --> 00:15:48.480 a time for more. Believe me, violence is the answer, big fan, a brutal, relentless effort. But 173 00:15:48.480 --> 00:15:54.560 we want to make sure that we're capturing the most per unit of effort. And so the equation for this 174 00:15:55.360 --> 00:16:01.360 is volume times leverage equals output, which means the more times you do something and the more 175 00:16:01.360 --> 00:16:06.400 the more you get for each time you do it, the more you get ultimately. Now, if you're a lazy 176 00:16:06.400 --> 00:16:11.600 motherfucker, guess what? You better have a shitload of leverage. Now, you can't be lazy and still make 177 00:16:11.600 --> 00:16:15.680 tons of money. You just have to have lots of leverage. You got to be really strategic in the moves 178 00:16:15.680 --> 00:16:20.480 you make. The more activity you have, the more you can let a little bit of that violence 179 00:16:21.600 --> 00:16:26.880 um, work for you. But it ends up becoming a cap soon enough. Because at the end of the day, we only 180 00:16:26.880 --> 00:16:31.040 have X amount hours. And if you want to do big shit, you need a lot of other people's hours to work 181 00:16:31.040 --> 00:16:38.640 for you, which is a form of leverage, okay? So one moment. It's a different style. TikTok 182 00:16:38.640 --> 00:16:43.680 versions. All right. A little, a little, a little, a little stop and go. Okay. We got that. We got 183 00:16:43.680 --> 00:16:52.160 that. I'll give you a third one. So we had a company that is an association of, uh, trying to 184 00:16:52.160 --> 00:16:57.600 keep it big. Let's call it dentists. Association of dentists. They'd, uh, they'd a business that, 185 00:16:57.600 --> 00:17:02.960 like, they'd global the savings together of all the dentists so that they would charge less than 186 00:17:03.040 --> 00:17:08.400 all of them saved with, with the conglomerate of buying power, right? So if you save $30,000 a year 187 00:17:08.400 --> 00:17:13.280 as a dentist, they would charge 10 super sticky model, great business. And so he's like, hey, 188 00:17:13.920 --> 00:17:19.120 I think I could sell this thing for 20 or 30 million. And, uh, I was like, how many dentists 189 00:17:19.120 --> 00:17:24.720 you have there? He's like, I don't know, 500, like, and they all run the same systems. He's like, 190 00:17:24.720 --> 00:17:30.080 yeah. He's like, was he average dentists make, like per unit? He's like, I don't know, 500,000. 191 00:17:30.800 --> 00:17:40.000 I was like, wild idea. What if we take 10 every year on the lineup and sell them for 100 million 192 00:17:40.000 --> 00:17:45.600 every year? Get 20 percent, give 80 percent to them. I'd be chill, right? I was like, then you get 193 00:17:45.600 --> 00:17:51.840 your exit every single year. And then if you want to sell it, we exit the machine that does roll-ups 194 00:17:51.840 --> 00:17:55.840 because then that you have roll-up machine does 20 or 30 million a year in profit. And we get 10 195 00:17:55.920 --> 00:17:59.920 x on that. Now you have a 300 million dollar exit rather than a 25 million dollar year. And he's 196 00:17:59.920 --> 00:18:06.480 like, that sounds better. I'm with you. I agree. Strategy. Prioritizing. What move will get me the 197 00:18:06.480 --> 00:18:13.040 most for the effort I put in? All right. Now, this is a perfect transition to your like, okay, 198 00:18:13.040 --> 00:18:20.800 that sounds very pine the sky. So next TikTok, theory of constraint. So everything that we do at 199 00:18:20.800 --> 00:18:25.520 acquisition.com and the approach that we have with growing any business is spending a lot of 200 00:18:25.520 --> 00:18:28.880 effort to try and identify the constraint of the business because every single business is 201 00:18:28.880 --> 00:18:33.280 constrained. There's one thing that is limiting its growth. So right now. And here's the 202 00:18:33.280 --> 00:18:37.840 fucked up part. Many of who here works all the hours of the day, like most of the hours that you're 203 00:18:37.840 --> 00:18:45.040 awake. Okay, half of you. If your business is not growing as fast as you want it to, you are 204 00:18:45.040 --> 00:18:49.840 working on the wrong stuff. If it has stayed the same and you're spending all your time working 205 00:18:49.840 --> 00:18:56.080 on it, you're not going to get more hours. So you're doing the wrong shit. So it means that you 206 00:18:56.080 --> 00:19:01.680 have not properly identified the constraint of the business. So I'll give you an example of this. 207 00:19:02.320 --> 00:19:06.640 We had a media company that came to us. Big YouTubers 40 million plus subscribers and they were like, 208 00:19:06.640 --> 00:19:10.960 hey, I was like, what's the goal? They're like, we want to make money. I'm like, cool. Love it. 209 00:19:10.960 --> 00:19:18.400 Great goal. So they're like, we think that we need to create a better media machine. So like, okay, 210 00:19:19.120 --> 00:19:24.160 they're like, we need to really systematize this and do it better. It's like, okay. How are you 211 00:19:24.160 --> 00:19:30.560 monetizing? Add sense. By the way, very inefficient way to monetize. Okay. And so they're like, I think 212 00:19:30.560 --> 00:19:34.160 we're, I think this is, these are all the things that we need to do to eliminate our constraint for 213 00:19:34.160 --> 00:19:42.000 our production. Cool. It's like, have you thought of? Well, idea. Maybe we just like the constraint 214 00:19:42.000 --> 00:19:46.320 of the businesses that you don't have something to sell. I was like, you're like a 97 out of 100 on 215 00:19:46.320 --> 00:19:51.120 media and you're a zero out of 100 on shit to sell. And you're trying to talk about how to get to 216 00:19:51.120 --> 00:19:56.800 a 99 rather than like, if we just went from zero to 20, we would probably make you 10 times more 217 00:19:56.800 --> 00:20:01.520 money than you currently making. And so that is an idea of the theory of the constraint, right? Like, 218 00:20:01.520 --> 00:20:05.440 the constraint of that business was not media. And many of you, the constraint of your business, 219 00:20:05.440 --> 00:20:11.520 not making better fucking workouts, right? That's not the constraint. It's not the constraint, 220 00:20:11.520 --> 00:20:15.600 right? That's not the constraint. And so right now, if you spend all your day working on 221 00:20:15.600 --> 00:20:23.200 a shit that doesn't move the ball, working on the wrong shit. So let me tell you how we do it. 222 00:20:23.200 --> 00:20:28.160 So that hopefully you can too. So one of the questions I like to ask is, why can't we 10x this 223 00:20:28.160 --> 00:20:33.680 business? Like, why can't we? And sometimes asking that question and then it becomes really apparent 224 00:20:33.680 --> 00:20:38.000 what the problem is. And the answer is sometimes, well, we just need to hire all these people. 225 00:20:38.080 --> 00:20:45.760 That's like, well, let's fucking do that, right? And so here's how we transition into the tactics 226 00:20:45.760 --> 00:20:53.280 around this. So this is the actual first part of my planning process, prioritizing process, 227 00:20:53.280 --> 00:20:58.080 strategy process, whatever shoe fits you. For figuring out what we're going to do with a company 228 00:20:58.080 --> 00:21:02.240 that we're going to grow up. So when we're thinking about all the objectives, all the things we 229 00:21:02.320 --> 00:21:09.760 could potentially do, it has to map to one of these three objectives, which is one, how is this 230 00:21:09.760 --> 00:21:13.920 thing that we're going to spend time, money, effort on going to get us more customers? Two, 231 00:21:14.560 --> 00:21:18.720 how is this thing going that we're going to spend time, money, and effort on? Get us increased 232 00:21:18.720 --> 00:21:26.160 LTGP, make them worth more. Or three, how is the time, energy, et cetera, going to decrease the risk 233 00:21:26.160 --> 00:21:30.080 that this does not continue to happen in the future, which is another way of translating, 234 00:21:30.080 --> 00:21:35.200 how do we increase the enterprise value overall? So for example, if you do all of this stuff, 235 00:21:35.920 --> 00:21:42.000 that's great. Still really risky, because if you die, the business does. Now, if we have to hire 236 00:21:42.000 --> 00:21:46.720 someone to do the same thing as you, is it going to get more of either of these? Probably not. 237 00:21:46.720 --> 00:21:53.440 Will it make the thing more valuable? Absolutely. Does that make sense? So I'm going to segue 238 00:21:53.520 --> 00:22:00.080 briefly. We're going to sidepest. Imagine two people, five million top line, five million top line, 239 00:22:00.800 --> 00:22:08.480 two million bottom line, two million bottom line. This guy is a single owner, runs all the day 240 00:22:08.480 --> 00:22:14.640 today, has lots of minions, known with real brains, and they just do what he says. Okay? If this person 241 00:22:14.640 --> 00:22:21.680 dies, the business dies. This guy has a team that runs the whole thing, and he makes two million 242 00:22:22.480 --> 00:22:27.920 dollars in income from the business, but it doesn't require him. Who's richer? This guy, 243 00:22:27.920 --> 00:22:33.200 questions how much richer? A lot. This guy, because he doesn't have to do anything, means that 244 00:22:33.200 --> 00:22:36.480 somebody else could also not have to do anything and also collect the two million dollars a year, 245 00:22:36.480 --> 00:22:39.920 which means his thing is probably worth depending on what type of industry it's in, 246 00:22:39.920 --> 00:22:45.280 10, 15, sometimes 20 million dollars. And so when this guy, here's where the leverage comes in, 247 00:22:45.280 --> 00:22:50.960 big L, if you go from two million a year to three million a year in income, he just added 10 248 00:22:50.960 --> 00:22:55.520 million dollars to his net worth. This guy is concerned about all the tax evasion strategies, 249 00:22:55.520 --> 00:22:58.960 because he's trying to maximize his income and forgetting the fact that the asset is the thing 250 00:22:58.960 --> 00:23:04.320 that's going to build a net worth. This took me a really long time to learn. Like an absurdly 251 00:23:04.320 --> 00:23:07.680 long time. Everything I did was all about like, how do I take the income I have, be more efficient 252 00:23:07.680 --> 00:23:11.680 with it, bubble, bubble, blah, when it's really like you become wealthy from the shit you own, 253 00:23:11.680 --> 00:23:17.040 not the shit you do. So everybody here has a business. And right now, many of the businesses in this 254 00:23:17.040 --> 00:23:22.480 room are not valuable. No one would buy them. Because it's really just you with some helpers. 255 00:23:22.480 --> 00:23:26.080 And so the idea is that we have to transition. And this is a skill that is worth getting, 256 00:23:26.080 --> 00:23:29.600 because no matter what you do for the rest of your entrepreneur career, you're going to need people, 257 00:23:29.600 --> 00:23:34.080 you need to have the skill of hiring, recruiting, training, onboarding, managing talent. 258 00:23:34.080 --> 00:23:40.320 Who here has one amazing superstar person who works for you? Cool. Imagine if you had four of them 259 00:23:40.320 --> 00:23:46.320 at your one location. How easy would life be? Right? You make a ton of money. Here's what's 260 00:23:46.320 --> 00:23:50.960 fucking crazy. The difference between small businesses and big businesses is how many players they 261 00:23:50.960 --> 00:23:57.760 have. And so what happens is, most small business owners hire a lot of people, get lucky, one sticks, 262 00:23:57.760 --> 00:24:02.880 actually works their ass off at a fair rate. And you're like, man, if I had six more sandricks, 263 00:24:02.880 --> 00:24:09.760 right? I'd be good to go. The thing is, is that big business owners maintain a higher level 264 00:24:09.760 --> 00:24:15.200 or a lower tolerance for mediocrity. And so they actually do keep looking until they find six 265 00:24:15.200 --> 00:24:19.040 sandricks. And then it does become too easy for them to kill it, because I got six sandricks. 266 00:24:19.040 --> 00:24:24.480 How could I lose? That's the idea. Makes sense? Okay. This took me a long time to learn, 267 00:24:25.040 --> 00:24:29.600 like I would just put up with people who are mediocre. And right now, many of you have a, 268 00:24:29.600 --> 00:24:33.520 think of somebody who's mediocre on your team. Actually, I make it easier. Think about that person 269 00:24:33.520 --> 00:24:36.240 that you thought about today, who you shouldn't have thought about, because if they're not making 270 00:24:36.240 --> 00:24:39.360 money and you're not sleeping with them, don't think about them first thing in the morning. All right? 271 00:24:39.360 --> 00:24:48.080 So anybody have somebody in mind? So if you have that person in mind, that person is taking up 272 00:24:48.080 --> 00:24:55.680 25% of your bandwidth. What a cost, right? And probably many of you, the biggest lever of growth 273 00:24:55.680 --> 00:25:01.440 is on the other side of a few heart conversations. I now talk to portfolio CEOs all the time. 274 00:25:02.000 --> 00:25:07.440 And it is incredibly clear the people who will win and the people who will not is simply based 275 00:25:07.440 --> 00:25:12.080 on their ability to confront discomfort. And it's interesting, because this is a mostly, 276 00:25:12.880 --> 00:25:18.240 it's a kind of 50-50 actually audience between male and female. But a lot of guys beat their 277 00:25:18.240 --> 00:25:24.160 chest. I can cold plunge. I can run a long time without stopping. Ooh, lift lots of weight. 278 00:25:25.520 --> 00:25:31.280 But you can't just say, hey, man, I think you suck a little bit. Real. Can't do it. And for that 279 00:25:31.280 --> 00:25:37.360 reason, they suffered for fucking decades because they can't fire Sarah. Not Sandra, Sandra's 280 00:25:37.360 --> 00:25:42.720 stud, right? Can't fire Sarah. It's like, yeah, I know she slept with one of the clients, but like, 281 00:25:42.720 --> 00:25:46.960 I mean, I think her heart's in the right place. It's like whenever you're, whenever you're qualifying 282 00:25:46.960 --> 00:25:50.640 that someone's heart's in the right place and deep down their good person, it's because it's obvious 283 00:25:50.640 --> 00:26:00.720 they suck, right? Hit a nerve on that one. So right now, do me a favor. Right down the name of the 284 00:26:00.720 --> 00:26:06.400 person that you know you need to get back to and start what we call a performance improvement plan, 285 00:26:06.400 --> 00:26:10.720 which is you've got 14 days to fix your shit or get out. And many of you can't even have the 286 00:26:10.720 --> 00:26:18.400 conversation because you're too much of a fucking pansy. Real talk. And this will keep you poor. 287 00:26:19.280 --> 00:26:24.560 Seriously, like, you got to grow up. You got to be able to have higher conversations. 288 00:26:25.200 --> 00:26:31.440 Be like, hey, my biggest, my biggest piece of advice for this is you know the shit you say about 289 00:26:31.440 --> 00:26:36.800 Sarah while you're here behind Sarah's back? God, she's just like, she's been slipping lightly. 290 00:26:36.800 --> 00:26:40.560 You know what I mean? Like, she's not swimming up on time. She's not cleaning up after the classes. 291 00:26:40.560 --> 00:26:46.240 She's short with the clients. I had two people complain about her, right? Say that to her. 292 00:26:47.200 --> 00:26:52.320 That's it. Just think about what you should talk and just say it to them. It's just the truth. 293 00:26:52.320 --> 00:26:57.040 Just say it to them. See what happens. One of two things. Either they're like, fuck, I've 294 00:26:57.040 --> 00:27:04.960 had my head up my ass. That's why it's been so dark. You're totally right. Thank you. 295 00:27:04.960 --> 00:27:10.480 Pull it out, right? And all of a sudden, they have a total 180. That happens like one out of five 296 00:27:10.480 --> 00:27:15.440 times. Four out of five times, you say, these are the things that you have to do. They either say, 297 00:27:15.440 --> 00:27:20.240 I won't do that or they say, sure, I'll try. And we both know they're not going to. And then you 298 00:27:20.240 --> 00:27:25.600 elegantly exit them from the business. The problem is that right now, Sarah teaches like six classes. 299 00:27:26.720 --> 00:27:32.720 Now what? Got to find somebody else. She's killing your business. So get rid of Sarah. 300 00:27:32.720 --> 00:27:37.280 All right. So that was a side quest, but hopefully we found some treasure there. And write the name of 301 00:27:37.280 --> 00:27:40.800 the person you need to have that hard conversation with and be like, there's this fucking speech 302 00:27:40.800 --> 00:27:44.800 and this guy was talking shit about you and I should have talked to your face. And so this is me 303 00:27:44.800 --> 00:27:50.240 talking shit to your face so that I feel better about it. You kind of saw. Okay. Really took that 304 00:27:50.240 --> 00:28:03.840 tick-tock thing to heart. Okay. So I'm going back to this. That was a side quest, main quest.