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Every business needs to solve each of these four problems in order to make more money and scale and

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The first of those problems is figuring out the customer that you're actually going to serve and

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In talking to many of you the issue is you have no idea and that's

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Okay, because in the beginning you need to sell everyone because you have no money and they have a pulse and a credit card

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And you only require one of those things and so you ask them for their credit card so that you can pay your bills

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So you can actually make your business work and that's okay and that's normal and that's expected

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but when you keep

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Taking every single Tom Dick and Harry who can give you you know a third down today

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And I'll pay you when I get paid and and everything else they're like hey

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Do you think you could you know give me the world and you're like I could give you two worlds and you're they're like awesome

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Here's my credit card again bill me on the fifth. That's when I get paid right and you deal with all of these

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Bad customers and you promise the world which is normal in the beginning because there's only you and you maybe can help

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This person in a completely unscathed way and that's what you should do because you just need to generate income

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You need to generate word of mouth. You need to help people out cool

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But there comes a point and it's usually around a million bucks a year sometimes three million bucks a year where the

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Operational complexity the business becomes really tough because now you've got a lot of different customers that all have different needs

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That have different promises a different price points that you've sold and they're still just you and so

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This process is the sticking point. This is sticking point number one

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What you have to do is you have to learn how to say no

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To people who are not the ideal customer and if you're like well, I don't know who my deal a customer is

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That is the problem and so you take all of the customers that you have

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That you have sold over your entire history and then you look at them and you say which of these people do I love?

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Okay, column one which of these people have spent the most money column two

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Which of these people did I have the highest operational profit from column three

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column four

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Which of these was the easiest to deliver on and so you look at these different lists and you're like, huh?

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Are there any common themes are there are there any people who are in two or three of those columns?

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I really like them. They made me a lot of money and it was really easy to

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Deliver the thing, huh?

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Well, that's weird because that's not the main thing that I sell

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But I guess I have sold a few of those, huh?

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Well, if you were to then take that concept and say well if 10% of my customers are in this really ideal bucket

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What if I had 100% of my customers that were just like that?

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So you take the same amount of customers you currently have but they were all just that customer if you do the math again

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You usually make five to ten times more money and the cool part about that process is that it doesn't require more infrastructure

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You already have the infrastructure to service that number of customers

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You're just serving seeing the wrong people because you haven't learned to say no yet

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And so one of the most attractive things in marketing and sales is saying I don't need your money because it makes everybody want you more

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And so what you do to harness this is you tell everybody you actually don't want to sell that you actually don't want to sell them and

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crazy and now and then

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You let the people who are the right type person because they're like oh, I'm not that. I'm not that hate those people too

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Oh, and you say but if you just happen to be this perfect unicorn that has these two three four traits

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I can absolutely change your life in this very specific way that means a lot to you and they're like wow

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Sounds like this ads just for me and that's exactly what I want and guess what happens now

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Once you make that kind of change in messaging you attract more of that right type of customer

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You can now charge the premium price even at the more operationally efficient and product-ized service level because now

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You're doing the same thing for every single customer so you get better at doing it

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So you get higher percentage success rates you do it at higher margins because you both have higher price and lower cost for doing this

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And this is how you solve problem number one

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But you have to learn how to say no and most people literally never learn

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And so I get I have had this conversation so many times that I want to

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Shout it into a microphone, which is what I'm doing right now. Okay

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so

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That's how you solve problem number one

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problem number two that I see

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Businesses get stuck at where they're in rock and hard places like I don't know what to do

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It's two sides of the same problem. You either charge too little or you pay too much

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And I want to put caveats around this. I'm a big believer in hiring great talent

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I'm a big believer in bringing good people in

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Absolutely, but if you want to have a frozen yogurt store and you want to pay the people behind the counter

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20% of revenue each your business will not make money

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From lying. I'm done

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If you have a physical therapy where you at

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Physical therapy clinic and you give 50% of revenue to everyone of your people

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Tough to scale that was somebody here

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You have to nail the individual model where you can make enough money at full capacity and so

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Which is going to trickle into problem three, but you get into this position where like wait

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I realize now that I can't give

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Profit shares to every single person. I specifically can't give revenue shares to all these people or my salesmen can't make more

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than I do

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Right in the business and maybe they do in the beginning, but at scale they shouldn't be able to more than the owners

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Right then you have something that's that's mismatched and so

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You have to have these moments because otherwise business owners will stay in this lane for years

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Because they'll just say like well if I if I tell them I have to change the comp

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Then I'm going to lose them and I'm like yeah, and if you don't you'll never grow

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So which one do you want to do and so that the the the nefarious part about each of these problems is that

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They have a

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Peeringly impossible issues with each one of them with the first one. You're like well

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I can't say no to money because I need the money in order to pay my bills

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But by saying yes to people who aren't the ideal customer

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Then I will never be able to grow this business because I won't be able to charge the premium prices get the best customers

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Have the operational margin that I need in order to expand and so all of these are a rock and hard place problems

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But you have to have the intestine afforded and this is why your lifestyle is your competitors opportunity

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What you require to live on is what prevents you from being aggressive in the business to make the best decisions of the business because the business doesn't care

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Like the ideal perfect version of your business exists

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You just have a number of steps that you have to take to get there and the people who get there faster or the ones who are willing to

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Stomach uncomfortable conversations low profit months and a hit on their lifestyle for extended periods of time

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And so you being able to be aggressive with your lifestyle when I say aggressive

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Being able to live on very little especially when you're in that one three five-million a year range

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Allows you to take bigger risks think longer because you're like, okay

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We're gonna change this thing. Well, I've got a hundred grand saved up and so I can stomach a

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Year if I need to take nothing out so that we can make this pivot because this was right for the business now and more specifically

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This is right for the business for the next five years

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And so rock in hard place

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So if you're with the I have all these employees and they're all compensated incorrectly

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You have to sit down and you have to say hey guys

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And this is how I deal with all really hard conversations. I just told the truth. I messed up

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I

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Said that I was gonna help you guys grow with this business

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I said we were gonna do these big things but based on the decisions that I made because I'm a numb nuts

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I

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Mispriced your compensation and because of that I'll never be able to give you career growth

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I'll never be able to reinvest in you

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I'll never be able to be the opportunity to open new locations or move up in this business because this business will not grow

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Based on how this works

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But if you're willing to go on this ride with me and change off compensation works and to be clear

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I'm taking nothing so like you work every month and you still gonna paycheck. I work every month and I get poor

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That's the difference. So I just want to be clear. I'm in this ride with you and I'm taking I'm not asking you do something

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I'm not willing to do

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But if you're willing to go on this ride with me for six months, maybe 12 months

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We're gonna have opportunities to meet 10 times bigger than this because it's me right for the business

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But you have to have that talk otherwise you will be stuck in this

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Well, if they leave then I won't have a business and some of them will leave and guess what skill you get to develop now

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The ability to recruit talent with your new compensation structure with your new vision of what's gonna happen in their lives

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Along with your business

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So that's the second problem and the second stick of point and each of these are just these levels that people just go around and they just stay stuck for years

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This part to be of that one is not charging enough and so this is the this is how it presents

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Hey, my business is at full capacity

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my business is a full capacity and

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We're not making that much money and so I think I need to open a new location or I need to add another product line

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When this is the core thing of the business if the core thing of the business at

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Capacity even at a small level of capacity like if you have one rep that can handle 10 people for your agency or you have one

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Physical therapist who can handle 50 patients. It doesn't matter. There's gonna be some ratio of

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Of cost of good sold and what you what you charge and then you have other costs associated administrative and fixed costs whatever and

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There's going to be a point of capacity with that small unit where if you're still not making money

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The business models flawed and so either you need to find a way to dramatically decrease the cost that you have to deliver

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Which sometimes is the compensation of the employee team if it's way off or

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Oftentimes, it's just you're charging too little and you just and there's all these ethical things of like I feel like an imposter and I'm like dude

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You're not an imposter you're broke

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You only get imposter syndrome when you pretend to be something you're not

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Like I get this question all the time like I feel like an imposter for charging that much money

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You only feel like an imposter because you're lying

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If you like I had an agency under yesterday who said I had an agency I got to 150 clients and I have a really good client getting system

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But that that business stalled because I didn't know how to operate

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And so it kind of like crashed and burned but I knew how to get customers for my agency really really well

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And he's like but I feel like an imposter charging for that system and I was like

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Why I was like is it because you're pretending you were really successful agency owner and he was like

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Yeah, I was like well, then why don't you just tell the truth and say I got a hundred fifty customers despite not knowing anything about running an agency

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Because the system's really good I suck at operating and so for that reason

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I'm just gonna give you the system and you can figure out how to operate the business

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I was like I still believe you and then you don't feel like shit

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He was like oh, I guess I can just tell the truth and so

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The whole imposter syndrome around charging if fundamentally if someone like you will only have that if you're

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Misrepresenting something if a customer wants to pay you for something and

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You have the thing and they're willing to exchange is voluntary not holding a gun to them

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It's voluntary exchange. That's how capitalism works

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You have a thing they want the thing and there's a price that they're willing to pay for it if they're willing to pay for it

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Phenomenal like that's capitalism we want and so we try and do it as many times as we can and so the idea of like having ethics around prices

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Ridiculous if they're willing you don't want to sell out of your wallet either if you're broke

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But someone the thing that you provide provides a lot of value to a specific person

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Then you charge based on the value not based on what's in your wallet if you're broke and you're like this really would help me

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It's like cool. It'll probably help them even more

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And if it just happens to help you that's how capitalism works both parties say thank you

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so

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Part to be if you're at full capacity and you're not making money

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You often need to just charge more for the thing you have and if people say no

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Fine guess what you get to learn how to sell better

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And that's a skill that if you want to build this big business you're gonna have to learn anyways

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See my soul face that boss now instead of just forever being in this like I guess I need to expand this business that already

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Doesn't work but I don't have the money to expand because the business doesn't work right and since it's impossible place that you spend for years and years

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Where's my phone I wrote them down I should know them all but

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Sometimes I forget things so let's see what do we think problem number four is there's number three is oh

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That actually leads perfectly so I remembered it before I pulled it up for the record

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The third problem that every business has to solve is

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Not getting over your skis not overexpanding

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Okay, so problem two often leads to problem three is that you're not making enough in the core business

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So you say great. I'll do more of this

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But more in that instance is more of the wrong thing like a little bit isn't working. Let's try a lot

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You're scaling you're scaling the problems not the solution and so

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Right glad that one hit

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And so and so the idea and this happens most frequently I want to say most frequently with brick-and-mortar because it's such a clear unit

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Where you're like I have one location that's doing mediocre, but I want to have a big French like I can't tell you the number of times

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I talk to local businesses who have this issue and it's mostly because

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We have this ego thing around growing revenue and so a lot of you guys are like and I say what's your goal?

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It's like I want to get from one million to three million or three million to ten million or ten million to thirty million whatever it is

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Right like everybody's got this big number goal and so what happens is you make the goal the thing that you focus on

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But when the goal is an output

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You then get weird about inputs because you try and make the output occur

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Rather than thinking I have to fix this model where once I get the inputs clear

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I jam as many high-quality inputs into it and then revenue occurs

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Revenue is a consequence not a goal and so the inputs that we put it in the system

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So when we make what we're gonna do for content we talk about how many pieces of the concept we're going to make

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What the schedule that content is what's the checklist we're going to follow that will increase the likelihood that these

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Video views go to the right people and get the most of them to see it if we hit

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A hundred million like who like not who cares of course we care, but what will it change about what we do?

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All we know is that it'll just give us feedback to change our inputs

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But if you make me hitting this number and not attach it to what you have to do then you start building really stupid things

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And so this is the classic internet marketer who scales too fast for their course business

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This is the agency who just takes on lots of clients because they want to hit this revenue goal or the brick-and-mortar business owner who opens up a second location when their first one isn't even working

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And so it's like they want to get to they want to get to three so fast that they'll never get to 10

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And so we did that little thing earlier where if you build you know a building as fast as you possibly can

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You can't add more on top of it. It just breaks the foundation is not there and so oftentimes

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The fastest way to a hundred million dollar business is slower to 10

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But faster from 50 to a hundred and so if you can actually have that perspective

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You won't care if it takes you three years to get the single location right because once it's dialed

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Then when you copy paste it it works

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And so the big thing that's missing when you're doing the over expansion thing I'll tell you what the core issue is

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It's who

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You sell too many people too fast before you hire and train good enough people to backfill and then you get

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Too many people in with not enough talent

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But you have bodies and not brains and so now you have to keep selling more people to manage your overhead of all these dumb people that you haven't

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Haken the time to train and they're dumb because of outputs and the reason that they're dumb is because you didn't train them and the real dummy is you

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Because either you weren't patient enough to interview more people or you weren't patient enough to train them, but both of them are your fault

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So

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You get overexpanded because you have this arbitrary goal that was around growth and not quality

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Quality creates growth growth creates blow

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So if you may growth the goal blow is what occurs if you make quality the goal growth occurs as a result

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So make getting better the goal and then you will get bigger if you make bigger the goal you'll get bigger and you'll get worse and

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So when I hear the many problems that come here oftentimes you're over your skis you overextended you have too many people not enough smarts and

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So rock in hard place

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I have to keep selling these customers so I can cover this overhead

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But my reputation is getting worse and worse and worse because I can't deliver on the promises

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But I have to keep making the promises so I can pay my bills

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And that's where your lifestyle comes into play again. You're like I made a goof up

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I need to decrease my lifestyle. I'm going to stop taking money out of the business

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And I need to have some hard conversations and I probably need to work overtime for a while

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The thing is is that the overtime isn't like a week or a month. Sometimes it's years

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And it's tough, you know like it's it's tough you give up weekends over and over and over and over and over again

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It's not like you give up weekends. You just have you remember the last time you took one right and so I say this out of care, but like

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You have to be like the hardest part of being in business is that you will always encounter these rock in hard place in

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Errors because you don't know everything and until you've been there

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You're like this is all going great until it's not and then you realize you're whoopsy

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And so I think your willingness to endure the pain of undoing your poor decision is what will get you out of the long-term pain faster

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But the short-term pain is way worse

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And so and this is where the growing pains come in because

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Let's say you do pull it back you stop selling as many new customers so that you can focus more on training the team up

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Interviewing new candidates maybe even having to pay them more because they're more qualified because they come in with some knowledge that you don't have

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Profit starts to drip or starts to dip. So what do you do?

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Well, you know that if you keep going on this path and you do fix delivery you do fix churn all of a sudden

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You can get your head back out of water because now you're selling people in their staying and all of a sudden you starting to get

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Referrals again because word of mouth is picking up and then all of a sudden your profit goes back from negative to neutral to up to your

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Previous max, but then it just keeps going again and then you get excited and you make another dumb mistake

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And then you have to read the process again and so the thing is is like the entrepreneurial growth pass the pain of it is

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The big mess ups you realize you make that you then get into the rock and heart situation and most people can't make a decision

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So they just straddle it and stay in the mediocre middle destroy the reputation and stay stagnant for years

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And so you have to like whatever that hard sticking place your ad is is you just have to confront it as fast as humanly possible

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And so it's like I always would rather have intense short-term pain rather than very long-term pain

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Of not living up to what I think I can do

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So that's sticking point number three number four

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I will say this until I'm blue in the face

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But the fourth problem that every business owner has to conquer is focus

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And what is so nefarious about focus is it's so sneaky because

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We're rewarded as entrepreneurs for taking a leap of faith for taking a jump when there's nothing there and then something starts to work

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And so that's such a rewarding experience you go from complete control to complete freedom

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Well, technically you go back to control again, but I won't get into that and

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In that moment, you're like this was the best decision of my entire life and the problem is that you should never do it again

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Because what happens is you reinforce such a strong loop where you're like man

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And then when this gets hard like my job was you then think oh, I'll do the same thing I did last time

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I'll switch I'll try something new and then that'll be exciting and new just like in your relationship

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And then all of a sudden you get out of the honeymoon phase and you realize oh, there's problems in this business too

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And then you're like oh, I'll do it work that other time

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It's still work half of the time and so then you jump again

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But the reason that it's so nefarious besides the fact that it's encoded in your DNA from being an entrepreneur from quitting your first thing to do this to begin with is that

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Every time it looks different

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And that's why focus is so tough and there's always a very strong argument for why you should do the new opportunity

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And that's why by the way is a sales pitch new opportunity is a great way to sell

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Because it's so hard to have the discipline to be like

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Nope, I'm just gonna keep doing the thing that I've been doing for 10 years

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And I know the good and I know the bad but I know them both

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And I know where I'm deficient and I just need to do these things better for the next six months

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And if I just do those things better we will grow by 50% and here's the fun fact about this is that once you get to a million a month

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5 million a month 10 million a month

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100 grand a month whatever

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Going from that

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to 50% more

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A lot easier than going from zero to whatever number you were just at

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So if you have your current thing you forget how much you've learned about what you're in you're in there for three years five years

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However many years have been in real estate, right a lot

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And we forget about it

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But this other thing has all of these booby traps all over it right this lady in the in the red dress has

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Chlamydia she's got daddy issues. She's got an ex-boyfriend with with a gun who's who stalks her right?

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You don't know yet because she presents the same because anybody in a first-day can look good

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Anybody on one sheet. It's like hey my buddy's making a killing on this right?

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He's like oh, yeah, I married her sister didn't tell you about the baggage right it's that's part of it

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And that's why the focus part is so tough and I had to define focus for myself

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And I'll define two words for you because it's helpful for me

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So one is commitment

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What is commitment a lot of you guys are like I'm committed

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Commitment is the elimination of alternatives

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Very simple and so if you want to become more committed you eliminate alternatives and so

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There's an old story of this

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We're the

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We're the the football coach

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asks one of the kids on the football team

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Out to breakfast and so you know they're sitting there having a good time talking about his game talking about his future

286
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He says you know, I'd like to play college ball

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And he's like I think you could I think you could play college ball. It's like but you might not too

288
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He's like well

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What do I have to do? He's like well, it depends it depends on what he leans in he's like are you interested?

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Committed he's like well, I'm I'm committed

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He's like I don't know if you are he says you see your plate

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And he's got eggs and he's got ham on his plate. He says the chicken thick chickens interested

293
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He's like the pig the pigs committed

294
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And the point there is that in order for that breakfast to occur the chicken keep having eggs over and over and over again

295
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But that pig only has one breakfast at serving

296
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And so the same way is that we have to eliminate alternatives

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It's what we like the the word decision comes from Latin Ducadero

298
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Which means to literally cut off or to kill off

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And so the idea is

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What are what are you killing today what really juicy incredibly sexy opportunity that you know you could crush you turn down today

301
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Because you made a commitment

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And I've been thinking a lot about the decisions of my life that have had the biggest return

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And the more I've thought about this

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The more I think that actually I'll read this I'll read this to you because I think

305
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It might it might come across better that way. So I wrote this down earlier today

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Which is

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The best diet is the one you follow

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The best person to marry is the one you stay with

309
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The best business is the one you stick with

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The thing that makes it the best isn't the thing itself. It's our commitment to it

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And so there's a lot of different diets that work if you stick with it

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There's a lot of different businesses that will work for you if you stick with it

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But none of the diets will work if you don't

314
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And none of the businesses will work either and I think it's a very good framework

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There's a perfect diet for you that's perfectly measured and we get you the absolute fastest results

316
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But if you do not stick with it, it won't happen ever

317
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And so it's not about the actual intricacies of the diet

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It's about your willingness to stick it out

319
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And so when you listen to basis and you listen to

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Steve Jobs and you listen to Sam Altman who's in charge of YC before he started OpenAI

321
00:25:35.360 --> 00:25:38.320
They talk about this one thing and they're like you know the more I've thought about it

322
00:25:38.960 --> 00:25:40.960
It's just persistence

323
00:25:40.960 --> 00:25:42.960
It's just being willing to stay the course

324
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Despite all odds despite the many shiny objects that come your way and just say

325
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I get it

326
00:25:50.080 --> 00:25:51.200
No

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So commitment is the elimination of alternatives and I measure focus by the number and quality of things

328
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I say no to and so if you want to give yourself a rapid reward cycle

329
00:25:59.040 --> 00:26:02.560
Which I like to do because the hardest of these ones that I struggle with is focus

330
00:26:03.360 --> 00:26:08.880
Is that every time I say no, I give myself a mental point. It's like I I'm focused

331
00:26:09.040 --> 00:26:13.280
I'm making an active decision to stay focused because I know that if I just only stay focused

332
00:26:13.840 --> 00:26:16.960
Like it's hard to imagine a guy or a gal who's an entrepreneur

333
00:26:17.920 --> 00:26:21.120
And does just one business for 50 years

334
00:26:21.760 --> 00:26:25.520
And consistently has the hard conversations and just says I'm gonna get better

335
00:26:25.760 --> 00:26:28.400
I'm gonna keep learning. I'm not gonna repeat the same mistakes

336
00:26:28.800 --> 00:26:32.720
And they do that for 50 years and doesn't become unbelievably successful

337
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It's hard to imagine a world where that would exist

338
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And so we have this blank check from the universe. It says I guarantee that you will be successful

339
00:26:41.040 --> 00:26:45.120
No matter what if you do one thing which is you just say no to everything else

340
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And so when I have these conversations the woman in the red dress always presents differently and that's why she's so sneaky

341
00:26:53.680 --> 00:27:00.000
And there's always a very legitimate reason why you could make money with it and the reality is you could

342
00:27:00.800 --> 00:27:02.800
But you can't do two things

343
00:27:03.120 --> 00:27:04.960
You can't be CEO of two businesses

344
00:27:05.600 --> 00:27:08.640
You can own multiple businesses, but I'm gonna be real with you

345
00:27:09.760 --> 00:27:13.920
You don't your CEO of both and you're running everything right no no

346
00:27:13.920 --> 00:27:15.760
I've scaled myself out of the day to day

347
00:27:15.840 --> 00:27:20.640
So if something happens in the business what happens my phone rings right you're not out of the day to day

348
00:27:20.960 --> 00:27:23.760
If you buy a share of Apple you're out of the day to day all right

349
00:27:24.080 --> 00:27:27.200
You're an owner and so use that as your litmus test

350
00:27:27.680 --> 00:27:32.080
Do I own this business or does the business own me if it owns you then you're a CEO

351
00:27:32.160 --> 00:27:37.200
Welcome to business right and so there's this big misnomer between I'm an owner and MS CEO

352
00:27:37.200 --> 00:27:38.800
And a lot of people say I'm a small business owner

353
00:27:38.880 --> 00:27:41.280
But you really don't own the business for a very long time

354
00:27:41.760 --> 00:27:45.440
Like until you get to ten twenty million dollars a year very tough to own a business

355
00:27:46.080 --> 00:27:50.320
The business owns you comment that's okay because what else are you gonna do right you're gonna work anyways

356
00:27:50.960 --> 00:27:52.160
So you have to be on the path

357
00:27:52.160 --> 00:27:54.160
But I think it's good to have clarity around that because

358
00:27:54.800 --> 00:27:57.680
The amount of times is like I've got this new opportunity vehicle

359
00:27:58.240 --> 00:28:00.560
And people always quote my story back to me

360
00:28:00.640 --> 00:28:04.800
They're like hey, but you had the gyms and then you started doing the turnaround business

361
00:28:05.280 --> 00:28:06.960
Yeah, I was twenty six

362
00:28:07.680 --> 00:28:10.560
And before that I had nine businesses and I made no money

363
00:28:11.120 --> 00:28:13.120
And so this was a big improvement for me

364
00:28:13.520 --> 00:28:17.040
Right, but the real question is not did it work

365
00:28:17.680 --> 00:28:25.200
But was there an alternative that would have also worked which is if I had just stuck with gyms being super real at this point of my life

366
00:28:25.200 --> 00:28:28.320
I probably have two or three hundred locations probably worth the same amount of money I'm now

367
00:28:29.280 --> 00:28:33.200
And so there's the fallacy of success which is

368
00:28:34.560 --> 00:28:38.480
If I do this thing it will work and the fact that it works meant that it was the right call

369
00:28:38.720 --> 00:28:41.840
But you can have multiple outcomes that leads you to where you want to go

370
00:28:43.120 --> 00:28:47.680
But when you straddle multiple is where you guarantee that you'll never get there

371
00:28:48.320 --> 00:28:50.800
And I'm just saying this and I'm trying to beat this into

372
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Ground because one I shouting at me

373
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Mostly

374
00:28:56.880 --> 00:29:00.960
But also because it's probably a third of the conversations I have

375
00:29:01.680 --> 00:29:06.160
On a regular basis and the craziest thing is that all the problems that you said have nothing to do with

376
00:29:06.480 --> 00:29:10.240
I need more leads. I need to learn how to sell better. I need to follow my leads faster

377
00:29:10.640 --> 00:29:12.800
You know, I'm not retaining customers

378
00:29:12.800 --> 00:29:14.400
none of that

379
00:29:14.480 --> 00:29:17.600
These are the things that get you stuck these are very easy problems to solve

380
00:29:18.720 --> 00:29:20.160
market more

381
00:29:20.160 --> 00:29:23.760
Do more reps on the sales reach out faster these are not complicated things

382
00:29:24.000 --> 00:29:28.480
But it's all this crap that we stay stuck in because we stay in these rock and hard plays scenarios

383
00:29:28.480 --> 00:29:31.440
Which are the real core issues and the last problem

384
00:29:32.240 --> 00:29:33.920
bonus

385
00:29:33.920 --> 00:29:38.400
That I see on a regular basis that walks through these doors is

386
00:29:39.680 --> 00:29:41.680
You have a product and you don't have a business

387
00:29:42.960 --> 00:29:49.680
So you sell one widget one time to one person there's no backend. There's no upsell

388
00:29:49.680 --> 00:29:51.440
There's no recurring. There's no revenue retention

389
00:29:52.400 --> 00:29:54.160
That's from the strict

390
00:29:54.800 --> 00:29:56.480
definition of a business

391
00:29:56.480 --> 00:29:59.280
It makes money so it is technically a business

392
00:29:59.600 --> 00:30:05.760
But it is not an asset that is valuable and so that's something that you will consistently have to put inputs into

393
00:30:06.000 --> 00:30:08.000
Rather than it be self-sustaining

394
00:30:08.240 --> 00:30:11.440
And so I've always been in the go you know in the world and probably you are too

395
00:30:11.440 --> 00:30:15.280
We're like I will solve any problem no matter how complex once

396
00:30:16.240 --> 00:30:21.360
But I don't like having to solve them the same thing over and over and over and over again

397
00:30:21.840 --> 00:30:25.760
But when you're in that business you have to just keep doing the same thing over and over again

398
00:30:25.840 --> 00:30:27.920
And the day that you stop is the day that it dies

399
00:30:28.720 --> 00:30:32.640
Which really just means that it's an amplified version of you in terms of a job

400
00:30:32.720 --> 00:30:34.400
Which again is fine

401
00:30:34.640 --> 00:30:41.840
But I would rather build an asset that I can own rather than just a slightly fancier higher leverage job for myself

402
00:30:41.920 --> 00:30:43.600
If I can afford to do it

403
00:30:43.680 --> 00:30:44.880
And so when

404
00:30:45.520 --> 00:30:47.280
You're thinking about this with your business

405
00:30:48.240 --> 00:30:49.440
To be clear

406
00:30:49.440 --> 00:30:50.400
It's

407
00:30:50.400 --> 00:30:54.800
Selling a better or extra version or recurring version of whatever your thing is

408
00:30:55.360 --> 00:30:57.360
So that people will buy again

409
00:30:57.360 --> 00:31:01.440
Now there are businesses where it is reoccurring rather than recurring

410
00:31:01.440 --> 00:31:03.120
Coca-Cola doesn't have no subscription

411
00:31:03.120 --> 00:31:05.600
But they know that I buy and I will buy again

412
00:31:05.600 --> 00:31:08.480
And so if people are not buying your product again

413
00:31:08.480 --> 00:31:09.840
Then figure out why

414
00:31:10.560 --> 00:31:12.400
And if your business is one that

415
00:31:12.960 --> 00:31:14.720
Doesn't lend itself to that at all

416
00:31:15.520 --> 00:31:20.240
That's one where I would say look at the other businesses that are super billion dollar businesses in your space

417
00:31:20.960 --> 00:31:25.280
That what have they solved that you have it and then that becomes your path

418
00:31:25.280 --> 00:31:29.920
And if there is no business that is in your space that sells that one thing that's very big

419
00:31:30.560 --> 00:31:33.920
Not all businesses are worth owning and you might think wait Alex

420
00:31:34.000 --> 00:31:36.480
I thought that I had to stick with the hard thing and so

421
00:31:37.360 --> 00:31:38.400
The

422
00:31:38.400 --> 00:31:43.520
Fundamental this is the different rock and hard place is one of the quintessential questions of entrepreneurship

423
00:31:43.600 --> 00:31:46.400
Is do I push or do I pivot and so

424
00:31:48.160 --> 00:31:53.520
Nine times at a 10 you have to push it just means I have a problem that I don't know how to solve

425
00:31:54.640 --> 00:31:56.960
And if you have a problem that you can at least define the problem

426
00:31:57.520 --> 00:31:59.520
Then you can try and solve it

427
00:31:59.680 --> 00:32:05.280
if you have an issue that the market fundamentally like wedding rings

428
00:32:07.040 --> 00:32:11.680
If you can only sell one redding ring and you have no desire to create more wedding rings

429
00:32:11.760 --> 00:32:15.040
And you're not a jeweler then it's probably not the right business for you now

430
00:32:15.120 --> 00:32:21.280
The caveat there is that there's probably a jeweler who that is the perfect business for and loves doing all sorts of

431
00:32:21.440 --> 00:32:25.760
Wedding rings and then also gets into the girls rings and gets into multiple rings and and you know

432
00:32:25.760 --> 00:32:27.840
Expounds from that because they have a specific aperture they can serve

433
00:32:28.000 --> 00:32:31.840
So there's a version of this business that could work but businesses

434
00:32:32.480 --> 00:32:34.480
Don't die

435
00:32:35.280 --> 00:32:37.280
Entrepreneurs fade

436
00:32:37.840 --> 00:32:39.680
Entrepreneurs lose their sizzle

437
00:32:39.760 --> 00:32:42.240
They lose their love of the business and so

438
00:32:43.040 --> 00:32:48.400
One of the things that has helped me stay in love with businesses that I have for longer periods of time

439
00:32:48.400 --> 00:32:54.400
And I've had to learn these disciplines because that's what it takes to stick with something for a very long time

440
00:32:54.720 --> 00:32:59.440
And if I know that sticking with something for a very long time is which required to build this very big thing that I want to do

441
00:32:59.760 --> 00:33:05.920
Then I better learn that skill and so learning to re-love new things in the business which I like to frame as

442
00:33:06.880 --> 00:33:10.640
What do I not know how to do and so I love personal development?

443
00:33:10.640 --> 00:33:13.760
I think that entrepreneurship is one of the best paths to making yourself better

444
00:33:14.480 --> 00:33:20.640
Because you have such a quantitative measure of saying did you improve and so simply saying I don't know how to

445
00:33:21.120 --> 00:33:25.600
Rather than this business won't work because is a much more empowering frame

446
00:33:26.240 --> 00:33:31.840
So rather than say hey this business won't work because the market doesn't like my stuff

447
00:33:32.240 --> 00:33:34.640
You say I don't know how to market my stuff

448
00:33:35.520 --> 00:33:40.000
This business won't work because no one can sell like I can't no

449
00:33:41.120 --> 00:33:44.880
I don't know how to get someone else to sell like I can that's solvable

450
00:33:45.520 --> 00:33:51.200
And so simply reframing what I believe to be problems that I cast onto the universe is things that I cannot chain

451
00:33:51.600 --> 00:33:56.880
Where I place the finger of blame you flip to the thumb of accountability and say this is a skilled efficiency

452
00:33:57.200 --> 00:33:59.360
And because it is mine I can change it

453
00:34:00.240 --> 00:34:07.520
And so thinking about things from that perspective has really helped me be able to fall in love with the game of business

454
00:34:07.760 --> 00:34:11.280
Because I can constantly feel and see myself objectively get better

455
00:34:11.520 --> 00:34:14.240
These are skills I didn't have and now I do have this

456
00:34:14.320 --> 00:34:18.400
I couldn't focus on anything for more than six months in the very beginning of my career

457
00:34:18.480 --> 00:34:24.640
I'm more ADD than you I promise I have no direct reports zero can't manage people

458
00:34:25.360 --> 00:34:26.960
I don't have the skill

459
00:34:27.040 --> 00:34:30.800
The question is what return do I get on learning everything that Leila has?

460
00:34:30.800 --> 00:34:32.640
Well, she spent the last decade doing it

461
00:34:32.640 --> 00:34:35.280
So that's not going to be a good return on my time

462
00:34:35.280 --> 00:34:38.560
And so but for her to try and learn all the acquisition of markets stuff that I know

463
00:34:39.200 --> 00:34:40.640
Is going to not be a good return on her time

464
00:34:40.640 --> 00:34:43.440
And so that's how we divide things up and so I can go deeper and better on mine

465
00:34:43.440 --> 00:34:46.720
And that's how you start filling out the holes in a business because fundamentally

466
00:34:48.480 --> 00:34:50.480
Every business operates

467
00:34:51.520 --> 00:34:53.520
Trying to give a non bodybuilding example

468
00:34:54.880 --> 00:34:56.880
But

469
00:34:57.600 --> 00:35:05.920
You need every component of a car to work right like is the wheel more important than the engine

470
00:35:06.640 --> 00:35:10.160
You need both if you don't have an engine the car doesn't move you don't have wheels the car doesn't move

471
00:35:11.920 --> 00:35:16.800
You don't have a chassis there's no car right like there's there's these these core components that have to exist

472
00:35:17.520 --> 00:35:19.520
But once you have those things

473
00:35:20.320 --> 00:35:25.200
If you have better grip on the tires the car will go faster if you have more cylinders in there

474
00:35:25.360 --> 00:35:28.640
I don't know the car analogies be get the idea if you have faster engine the car goes faster

475
00:35:28.880 --> 00:35:30.880
And so you can still have

476
00:35:30.880 --> 00:35:34.560
Components that can get emphasized but for the business to work

477
00:35:35.440 --> 00:35:39.760
You have to have all the pieces to go from zero to one but from one to n

478
00:35:39.760 --> 00:35:43.440
It's how many of these things are we emphasizing and that's where you can double down on things

479
00:35:43.920 --> 00:35:48.560
But being able to say the problem with this business is that this is the issue

480
00:35:49.120 --> 00:35:52.400
We can't get this engine needs to be a sixteen cylinder and it's an eight cylinder

481
00:35:52.720 --> 00:35:59.760
Okay, so I either have to learn how to build a sixteen cylinder engine or I got to find somebody who does

482
00:36:00.560 --> 00:36:05.440
Or I got to buy a sixteen cylinder engine from somebody else right but those that's how you have to approach it and so

483
00:36:06.160 --> 00:36:08.160
continually relearning that process

484
00:36:08.400 --> 00:36:12.480
Has helped me stick with things because I don't feel like I'm in the same business anymore

485
00:36:12.720 --> 00:36:17.120
I feel like every six months I'm in a completely different business because the problems I'm solving are different

486
00:36:17.600 --> 00:36:19.760
And so I'll leave you with this one last thought

487
00:36:20.480 --> 00:36:22.240
Which is that number one?

488
00:36:22.240 --> 00:36:27.520
I genuinely believe if you love the business or space that you're in you can take any business to a hundred million

489
00:36:28.160 --> 00:36:31.360
I like I want to challenge somebody to tell me like a business they can't take two hundred million dollars here

490
00:36:31.360 --> 00:36:33.680
I think you can absolutely take any business to a hundred million dollars here

491
00:36:35.200 --> 00:36:39.360
The second thing is that when you scale any business no matter the market

492
00:36:40.240 --> 00:36:42.720
At the highest level your day is the same

493
00:36:44.000 --> 00:36:48.560
You manage a handful of very intelligent people who do their jobs on your behalf with lots of leverage

494
00:36:50.240 --> 00:36:53.200
That's the end result of all of these businesses whatever business you're in

495
00:36:53.600 --> 00:36:57.040
And so if you're in that spot where you're like I don't like the business I'm in

496
00:36:57.520 --> 00:37:01.280
You're going to get to the same spot in a different business that you also won't like

497
00:37:01.760 --> 00:37:05.280
You have to beat the boss so that you can eventually get to the place where

498
00:37:05.680 --> 00:37:08.960
Fundamentally, you're going to have a head of marketing. You're going to have a head of sales

499
00:37:08.960 --> 00:37:12.240
You're going to have an IT head. You're going to have a head of legal. You're going to have a head of finance

500
00:37:12.240 --> 00:37:16.080
You're going to have it have an option and customer success every business has it

501
00:37:16.640 --> 00:37:19.600
Different words for different industries, but fundamentally those are the components

502
00:37:20.080 --> 00:37:23.680
And so if you see that as the natural extreme that's going to occur in any business

503
00:37:24.000 --> 00:37:28.640
The idea of switching businesses because you want to avoid what the natural extreme will be is ridiculous

504
00:37:29.440 --> 00:37:31.920
Because if you succeed you all roads lead there

505
00:37:33.120 --> 00:37:39.680
And so that is one of my antidotes for a wait. I should switch because my day-to-day what I actually do will not change

506
00:37:40.560 --> 00:37:42.240
And neither will yours

507
00:37:42.320 --> 00:37:48.000
And so you have to push through you have to confront the fact that it will suck and you have to undo mistakes

508
00:37:48.000 --> 00:37:49.840
And when you undo mistakes it hurts extra bad

509
00:37:50.480 --> 00:37:54.240
But the alternatives you never fix the mistake you never grow, which I think is the larger mistake overall

510
00:37:55.040 --> 00:38:01.360
So those are the big five that people get in the rock and hard place for business. I see these every single time

511
00:38:02.880 --> 00:38:07.680
I have these conversations over and over again and everyone thinks that their situation is unique

512
00:38:08.480 --> 00:38:12.320
That they can't race prices because their market is special

513
00:38:13.040 --> 00:38:17.200
Right they they can't change the compensation in ours because everyone will leave

514
00:38:17.360 --> 00:38:20.240
Yep, and they're going to leave eventually anyways see might as well learn how to fix it now

515
00:38:20.880 --> 00:38:26.880
And they think that in order to hit the goal like they have to keep selling even though they're overextended they have no one to help them

516
00:38:27.680 --> 00:38:30.320
You're right keep doing that forever. Tell me how that works

517
00:38:31.520 --> 00:38:34.480
Right each of these problems feels in the moment

518
00:38:35.200 --> 00:38:37.200
Less bad to keep doing it

519
00:38:37.200 --> 00:38:40.800
But what you have to do is confront it and that's the boss that you have to be at that level

520
00:38:41.360 --> 00:38:44.720
So thank you guys so much for the ads. Hope you guys enjoyed the workshop

521
00:38:45.680 --> 00:38:47.680
Appreciate you and then