WEBVTT 1 00:00:00.000 --> 00:00:03.340 People who are wealthier don't do more than you do. 2 00:00:03.340 --> 00:00:05.460 They get more out of the effort they put in. 3 00:00:05.460 --> 00:00:06.980 They're not moving faster. 4 00:00:06.980 --> 00:00:09.220 They're just getting more credit for the stuff they do. 5 00:00:10.740 --> 00:00:12.780 Welcome to the game where we talk about how to sell more stuff 6 00:00:12.780 --> 00:00:15.780 to more people in more ways and build businesses worth owning. 7 00:00:15.780 --> 00:00:17.220 I'm trying to build a billion dollar thing 8 00:00:17.220 --> 00:00:18.420 with acquisition.com. 9 00:00:18.420 --> 00:00:20.100 I always wish pesos, musk and Buffett 10 00:00:20.100 --> 00:00:21.340 had documented their journey. 11 00:00:21.340 --> 00:00:22.580 So I'm doing it for the rest of us. 12 00:00:22.580 --> 00:00:23.660 Please share and enjoy. 13 00:00:25.180 --> 00:00:27.340 I'm gonna sell three massive business problems 14 00:00:27.340 --> 00:00:30.060 that can take you from $10 to $100 million. 15 00:00:30.060 --> 00:00:31.540 I'm gonna walk you through the frameworks 16 00:00:31.540 --> 00:00:33.420 so that you can apply this to your business, 17 00:00:33.420 --> 00:00:35.180 your work or your personal brand. 18 00:00:35.180 --> 00:00:36.340 And if you're just getting started 19 00:00:36.340 --> 00:00:37.940 or you have a $500,000 business 20 00:00:37.940 --> 00:00:38.980 or a $1 million business, 21 00:00:38.980 --> 00:00:41.140 the same frameworks apply to you. 22 00:00:41.140 --> 00:00:43.100 It's just at different levels of scale 23 00:00:43.100 --> 00:00:45.020 and all you do is you remove or add zeros 24 00:00:45.020 --> 00:00:46.460 but the same concepts work. 25 00:00:46.460 --> 00:00:47.180 And if you don't know how I am, 26 00:00:47.180 --> 00:00:49.100 my name's Oxymozzi, I own acquisition.com. 27 00:00:49.100 --> 00:00:51.260 It's portfolio of companies that were $200 million a year. 28 00:00:51.260 --> 00:00:53.700 And I make these because I want you to grow your business 29 00:00:53.700 --> 00:00:56.260 and eventually hit us up so we can invest it 30 00:00:56.340 --> 00:00:58.140 and help you scale further beyond that. 31 00:00:58.140 --> 00:00:59.900 And by the way, these are real business problems 32 00:00:59.900 --> 00:01:01.780 from actual businesses, from an event 33 00:01:01.780 --> 00:01:03.860 that we were asked to speak at and do Q&A. 34 00:01:03.860 --> 00:01:05.860 And so this is the real stuff. 35 00:01:05.860 --> 00:01:08.580 This is exactly how we solve these problems in real life. 36 00:01:08.580 --> 00:01:10.100 There were three different business owners 37 00:01:10.100 --> 00:01:12.060 that presented with different problems 38 00:01:12.060 --> 00:01:14.860 but actually had the same much larger problem. 39 00:01:14.860 --> 00:01:16.900 And so one was an employment setting business 40 00:01:16.900 --> 00:01:18.420 and they knew how to set appointments 41 00:01:18.420 --> 00:01:20.660 and build outbound teams for agencies, 42 00:01:20.660 --> 00:01:21.860 coaches, consultants, whatever. 43 00:01:21.860 --> 00:01:23.580 The second business was a marketing agency 44 00:01:23.580 --> 00:01:25.620 for HVAC business owners. 45 00:01:25.620 --> 00:01:27.660 So they were able to get leads through local campaigns 46 00:01:27.660 --> 00:01:28.700 for HVAC businesses. 47 00:01:28.700 --> 00:01:30.740 The third was actually a very big influencer. 48 00:01:30.740 --> 00:01:32.420 We're talking like 30 to 40 million subscribers 49 00:01:32.420 --> 00:01:35.100 across all platforms who came and were trying 50 00:01:35.100 --> 00:01:36.620 to scale their business with the objective 51 00:01:36.620 --> 00:01:37.540 of making more money. 52 00:01:37.540 --> 00:01:39.860 And so each of them had very differently phrased questions 53 00:01:39.860 --> 00:01:42.460 but they were all suffering from the same constraint 54 00:01:42.460 --> 00:01:43.940 and it wasn't what they thought it was. 55 00:01:43.940 --> 00:01:46.020 And when we look at businesses to invest 56 00:01:46.020 --> 00:01:49.420 in at acquisition.com, we operate off of a singular concept 57 00:01:49.420 --> 00:01:50.500 which is the theory of constraints 58 00:01:50.500 --> 00:01:53.500 which is that a business will grow up to its constraint 59 00:01:53.500 --> 00:01:54.700 and then it will grow no longer 60 00:01:54.820 --> 00:01:56.340 which is the same concept as your strongest 61 00:01:56.340 --> 00:01:57.180 as the weakest link. 62 00:01:57.180 --> 00:01:59.140 And the problem is that most entrepreneurs continue 63 00:01:59.140 --> 00:02:00.740 to work on the things that they enjoy 64 00:02:00.740 --> 00:02:02.540 rather than the things that the business needs. 65 00:02:02.540 --> 00:02:04.540 And so they think that they're solving problems 66 00:02:04.540 --> 00:02:06.180 which they maybe but they're not solving 67 00:02:06.180 --> 00:02:07.420 the problem that matters most. 68 00:02:07.420 --> 00:02:09.140 And it's usually because they haven't actually 69 00:02:09.140 --> 00:02:10.700 identified the correct constraint. 70 00:02:10.700 --> 00:02:12.540 And so here's how you know if this is you. 71 00:02:12.540 --> 00:02:15.060 If you continue to work 16 hours a day 72 00:02:15.060 --> 00:02:16.780 but you're not making more money or the business 73 00:02:16.780 --> 00:02:18.260 isn't growing, it's because you're working 74 00:02:18.260 --> 00:02:21.300 on the wrong stuff, you're solving the wrong problems. 75 00:02:21.300 --> 00:02:23.060 And the reason that we focus on the constraint 76 00:02:23.060 --> 00:02:24.820 is that it is the opportunity 77 00:02:24.820 --> 00:02:28.580 that poor additional incremental level of effort 78 00:02:28.580 --> 00:02:29.900 that you apply to it. 79 00:02:29.900 --> 00:02:32.580 It's the one that yields the most outsized returns. 80 00:02:32.580 --> 00:02:36.060 Because for example, if you have a three step sales process 81 00:02:36.060 --> 00:02:38.060 and you get 50% to go through step one, 82 00:02:38.060 --> 00:02:39.540 five percent to go through step two 83 00:02:39.540 --> 00:02:41.660 and then 50% to go through step three, 84 00:02:41.660 --> 00:02:44.820 you could improve each of them by 10% 85 00:02:44.820 --> 00:02:47.820 and you go from 50 to 60, you go from five to 15 86 00:02:47.820 --> 00:02:49.740 or you go from 50 to 60 again, 87 00:02:49.740 --> 00:02:51.820 but which of them makes the biggest difference 88 00:02:51.860 --> 00:02:52.820 in your business? 89 00:02:52.820 --> 00:02:56.260 Going from five to 15, triples the business 90 00:02:56.260 --> 00:02:57.940 whereas the other one's only incrementally 91 00:02:57.940 --> 00:02:59.300 improved by 20%. 92 00:02:59.300 --> 00:03:01.700 And so that is why we try and ruthlessly focus 93 00:03:01.700 --> 00:03:04.540 on what the constraint is because for the work we put in, 94 00:03:04.540 --> 00:03:05.660 we get more out. 95 00:03:05.660 --> 00:03:08.420 And that from big picture perspective is how the people 96 00:03:08.420 --> 00:03:11.980 who move fastest in life aren't actually doing things faster. 97 00:03:11.980 --> 00:03:13.900 They're just doing more of the right stuff. 98 00:03:13.900 --> 00:03:16.180 So the first business that asked a question 99 00:03:16.180 --> 00:03:17.340 was an employment setting business. 100 00:03:17.340 --> 00:03:19.580 And this guy specialized in setting, 101 00:03:19.660 --> 00:03:22.660 creating outbound teams for agencies, consultants, coaches, 102 00:03:22.660 --> 00:03:24.460 et cetera, online businesses. 103 00:03:24.460 --> 00:03:26.660 And he was saying that his problem was 104 00:03:26.660 --> 00:03:27.940 that he needed to get more customers, 105 00:03:27.940 --> 00:03:30.260 which by the way, most of the time that's not the problem, 106 00:03:30.260 --> 00:03:31.980 it's usually because the customers you have keep leaving 107 00:03:31.980 --> 00:03:33.340 and that's the real problem. 108 00:03:33.340 --> 00:03:36.700 Now he had an issue because he had a very low quality 109 00:03:36.700 --> 00:03:37.540 of customers. 110 00:03:37.540 --> 00:03:39.340 The vast majority of customers didn't make enough money, 111 00:03:39.340 --> 00:03:40.260 they didn't stay long enough, 112 00:03:40.260 --> 00:03:42.540 they didn't have enough skills, et cetera, right? 113 00:03:42.540 --> 00:03:45.580 And so that was what he thought he had to solve. 114 00:03:45.580 --> 00:03:47.620 All right, that was business number one. 115 00:03:47.620 --> 00:03:50.700 Business number two was the HVAC agency. 116 00:03:50.700 --> 00:03:54.740 So this is a business that markets for HVAC companies, 117 00:03:54.740 --> 00:03:56.220 typically small businesses. 118 00:03:56.220 --> 00:03:58.660 They had 50 or so clients in that niche 119 00:03:58.660 --> 00:04:02.220 and they're running campaigns across 50 different local markets. 120 00:04:02.220 --> 00:04:04.500 And for them, the problem is that most of these business owners 121 00:04:04.500 --> 00:04:06.860 are not sophisticated, they don't call their leads fast enough 122 00:04:06.860 --> 00:04:09.540 and they ultimately churn in three to five months. 123 00:04:09.540 --> 00:04:11.900 Again, seems like a similar issue. 124 00:04:12.860 --> 00:04:15.900 The third business was the big influencer business, 125 00:04:15.900 --> 00:04:18.500 30, 40 million subscribers across all the platforms. 126 00:04:18.500 --> 00:04:20.700 And when I asked them, what problem are you trying to solve, 127 00:04:20.700 --> 00:04:22.140 they said we want to make more money. 128 00:04:22.140 --> 00:04:23.740 And the reason that's important is because if they said 129 00:04:23.740 --> 00:04:25.260 we want to continue to build our brand more, 130 00:04:25.260 --> 00:04:26.860 then I would have given a different answer. 131 00:04:26.860 --> 00:04:29.460 But because they wanted to make more money, 132 00:04:29.460 --> 00:04:30.900 they were focusing all their attention 133 00:04:30.900 --> 00:04:33.540 on how do we get more high quality videos out. 134 00:04:33.540 --> 00:04:36.460 And mind you, they have 30 to 40 million subscribers 135 00:04:36.460 --> 00:04:37.500 across all platforms. 136 00:04:37.500 --> 00:04:39.580 And if we're thinking about this from a, 137 00:04:39.580 --> 00:04:42.260 what's the constraint perspective around making money, 138 00:04:42.260 --> 00:04:44.420 then do we really think that adding another 10 million 139 00:04:44.420 --> 00:04:45.940 subscribers is going to be the thing 140 00:04:45.940 --> 00:04:47.660 that's going to make them the most money 141 00:04:47.660 --> 00:04:50.820 or do we try and focus on what is probably the constraint, 142 00:04:50.820 --> 00:04:52.380 which I'll tell you in a second. 143 00:04:52.380 --> 00:04:54.700 Now, to solve business problem number one, 144 00:04:54.700 --> 00:04:57.420 the appointment setting business, I said, okay, my friend, 145 00:04:57.420 --> 00:04:59.900 of all of the companies that you've ever worked with, 146 00:04:59.900 --> 00:05:02.460 which of them made the most money 147 00:05:02.460 --> 00:05:04.100 off of the appointments that you set. 148 00:05:04.100 --> 00:05:07.820 So given the service value that they delivered, 149 00:05:07.820 --> 00:05:10.140 which of them were easiest to work with 150 00:05:10.140 --> 00:05:12.860 and made the most many off of what you did, right? 151 00:05:12.860 --> 00:05:15.860 And he had a very specific answer of what type of avatar 152 00:05:15.860 --> 00:05:17.380 he did best with, right? 153 00:05:17.380 --> 00:05:19.180 And so there's two directions for that business. 154 00:05:19.180 --> 00:05:21.700 One is you niche down on your service delivery 155 00:05:21.700 --> 00:05:23.660 and say, these are the only types of businesses 156 00:05:23.660 --> 00:05:25.500 I'm going to take because they're going to be worth more, 157 00:05:25.500 --> 00:05:27.100 stay longer, refer, et cetera. 158 00:05:27.100 --> 00:05:29.300 And then you can package all of your offerings 159 00:05:29.300 --> 00:05:30.940 and all of your messaging around that. 160 00:05:30.940 --> 00:05:34.740 That is probably the easiest next step for that business. 161 00:05:34.740 --> 00:05:36.860 But the highest leverage next step, 162 00:05:36.860 --> 00:05:38.860 as in like if I were gonna own this business 163 00:05:38.860 --> 00:05:40.700 and I transplanted my brain and my experience 164 00:05:40.700 --> 00:05:42.340 into his body, I'd be thinking, 165 00:05:42.340 --> 00:05:43.660 well, I could do that. 166 00:05:43.660 --> 00:05:46.300 And that would probably grow me in the next one to two years. 167 00:05:46.300 --> 00:05:48.780 But if I'm trying to grow for 10 years, 168 00:05:48.780 --> 00:05:51.180 then I want the opportunity that's going to pay me 169 00:05:51.180 --> 00:05:53.700 for the work I do today in five years. 170 00:05:53.700 --> 00:05:54.820 Because most business owners, 171 00:05:54.820 --> 00:05:56.780 the reason they don't create valuable businesses 172 00:05:56.780 --> 00:05:58.900 is because they have to keep doing the same work 173 00:05:58.900 --> 00:06:00.740 over and over again and they don't get credit for it. 174 00:06:00.740 --> 00:06:03.260 Because if you have to sell 10 new customers this month 175 00:06:03.260 --> 00:06:05.820 to stay the same size, you have a larger problem, 176 00:06:05.820 --> 00:06:07.340 which is that at the end of the year, 177 00:06:07.340 --> 00:06:09.100 you still have to sell another 10 customers 178 00:06:09.100 --> 00:06:10.180 to stay the same size, 179 00:06:10.180 --> 00:06:12.060 which means you're on this hedonic treadmill 180 00:06:12.100 --> 00:06:14.180 of business that never seems to end. 181 00:06:14.180 --> 00:06:16.300 And until you solve that much bigger problem, 182 00:06:16.300 --> 00:06:18.060 which is the constraint of the business, 183 00:06:18.060 --> 00:06:22.260 you're basically sentenced to this terrible atlas 184 00:06:22.260 --> 00:06:24.020 like existence of rolling the boulder up the hill 185 00:06:24.020 --> 00:06:26.220 and then rolling it back down every month, right? 186 00:06:26.220 --> 00:06:29.780 And so he could niche down or what I would do 187 00:06:29.780 --> 00:06:33.140 is that I would say, hey, either partner with that business 188 00:06:33.140 --> 00:06:35.100 and say, hey, we'll go 50-50 with you on it. 189 00:06:35.100 --> 00:06:37.380 Because if I know how to build outbound teams 190 00:06:37.380 --> 00:06:39.500 for 20 different companies every month, 191 00:06:39.500 --> 00:06:42.580 then I could build a massive outbound team for this business. 192 00:06:42.580 --> 00:06:45.100 And so he might have been doing five or 10 million dollars a year 193 00:06:45.100 --> 00:06:47.020 in his little employment setting business. 194 00:06:47.020 --> 00:06:48.980 But if we look at that as one department 195 00:06:48.980 --> 00:06:50.900 of a significantly larger business 196 00:06:50.900 --> 00:06:53.060 that does 50 or 100 million dollars a year, 197 00:06:53.060 --> 00:06:54.380 then it makes significantly more sense. 198 00:06:54.380 --> 00:06:57.220 Because what would the marketing spend be 199 00:06:57.220 --> 00:06:59.580 of a business that's doing 50 million dollars a year, 200 00:06:59.580 --> 00:07:01.700 realistically, probably somewhere in the neighbor 201 00:07:01.700 --> 00:07:03.220 of five to 10 million dollars a year, 202 00:07:03.220 --> 00:07:06.260 is what the actual spend would be for that department, right? 203 00:07:06.260 --> 00:07:07.660 Well, if he has that, 204 00:07:07.660 --> 00:07:11.660 that he could own half of a 50 to 100 million dollar business 205 00:07:11.660 --> 00:07:13.700 that he grows over the next five to 10 years, 206 00:07:13.700 --> 00:07:16.180 picking the most valuable business 207 00:07:16.180 --> 00:07:17.860 that he sets appointments for. 208 00:07:17.860 --> 00:07:20.140 And so he could either partner with that business 209 00:07:20.140 --> 00:07:23.660 or spend a year or two learning how that business works 210 00:07:23.660 --> 00:07:25.740 so that then he owns both sides of it. 211 00:07:25.740 --> 00:07:27.820 He knows how to generate the points for it 212 00:07:27.820 --> 00:07:31.420 and he knows how to scale and deliver whatever the service is 213 00:07:31.420 --> 00:07:32.780 that he was setting appointments for. 214 00:07:32.780 --> 00:07:34.180 Those are life path choices. 215 00:07:34.180 --> 00:07:36.300 If you partner, you can usually go faster, 216 00:07:36.300 --> 00:07:37.860 but you give up some of the upside 217 00:07:37.860 --> 00:07:39.900 because you slice the pie, it's up to you. 218 00:07:39.900 --> 00:07:41.820 But if I were in that opportunity, 219 00:07:41.820 --> 00:07:43.020 that's how I'd be thinking about it 220 00:07:43.020 --> 00:07:45.060 because the real constraint wasn't that he needed 221 00:07:45.060 --> 00:07:46.900 to sell twice as many customers, 222 00:07:46.900 --> 00:07:50.500 the constraint was that he had his doingness 223 00:07:50.500 --> 00:07:52.300 with setting up shit loads of outbound teams 224 00:07:52.300 --> 00:07:54.740 and every month he has to set up new outbound teams 225 00:07:54.740 --> 00:07:56.460 and didn't get credit for the outbound teams 226 00:07:56.460 --> 00:07:57.540 he got set up last month. 227 00:07:57.540 --> 00:08:01.140 But if the team that he built was 50 outbound guys this month 228 00:08:01.140 --> 00:08:02.740 and then next month he starts at 50 229 00:08:02.740 --> 00:08:04.260 because it's all within the same company 230 00:08:04.260 --> 00:08:06.860 and then does another 50 and then another 50, 231 00:08:06.860 --> 00:08:09.140 six months later he's got 300 outbound guys 232 00:08:09.140 --> 00:08:10.820 that are all still working for him, 233 00:08:10.820 --> 00:08:15.940 all generating revenue that he is owning a slice of all of it 234 00:08:15.940 --> 00:08:17.420 rather than just the service fees 235 00:08:17.420 --> 00:08:18.580 which have a very low multiple 236 00:08:18.580 --> 00:08:19.700 that no one would probably want to buy 237 00:08:19.700 --> 00:08:21.780 because of the massively shitty customer base 238 00:08:21.780 --> 00:08:23.220 that he was selling to originally. 239 00:08:23.220 --> 00:08:25.420 The second business was the HVAC company. 240 00:08:25.420 --> 00:08:27.100 It presented very differently 241 00:08:27.100 --> 00:08:28.380 than the appointment setting business 242 00:08:28.380 --> 00:08:30.820 but you can probably start to put some of the pieces together. 243 00:08:30.860 --> 00:08:32.580 And that's kind of the goal for me 244 00:08:32.580 --> 00:08:34.340 for you, Mosination, is that like 245 00:08:34.340 --> 00:08:35.620 if you can start thinking this way 246 00:08:35.620 --> 00:08:36.980 then you'll start thinking with higher leverage 247 00:08:36.980 --> 00:08:38.700 it's one of the opportunities that you pursue 248 00:08:38.700 --> 00:08:41.940 because if what you do every day doesn't necessarily change 249 00:08:41.940 --> 00:08:44.060 but how much you get credit for it does 250 00:08:44.060 --> 00:08:46.020 then you get more for what you put in. 251 00:08:46.020 --> 00:08:47.980 And fundamentally people who are wealthier 252 00:08:47.980 --> 00:08:49.860 don't do more than you do. 253 00:08:49.860 --> 00:08:51.980 They get more out of the effort they put in. 254 00:08:51.980 --> 00:08:53.500 They're not moving faster. 255 00:08:53.500 --> 00:08:55.620 They're just getting more credit for the stuff they do 256 00:08:55.620 --> 00:08:57.540 and they're getting paid on stuff they did five years ago 257 00:08:57.540 --> 00:08:59.500 whereas you were only getting paid on stuff you did last month. 258 00:08:59.540 --> 00:09:03.580 So in this HVAC business if he's able to generate leads 259 00:09:03.580 --> 00:09:06.780 and fill up 50 different HVAC services pipelines 260 00:09:06.780 --> 00:09:08.580 because of his marketing prowess 261 00:09:08.580 --> 00:09:11.740 he probably has the marketing skill 262 00:09:11.740 --> 00:09:15.140 of a 50 to 100 million dollar HVAC business. 263 00:09:15.140 --> 00:09:17.340 And so if you're catching the common theme here 264 00:09:17.340 --> 00:09:20.420 if you're doing a million dollars a year in revenue 265 00:09:20.420 --> 00:09:22.820 you might think man I'm only got a million dollar business 266 00:09:22.820 --> 00:09:24.940 and then if you're like I wish I could have that that's fine 267 00:09:24.940 --> 00:09:26.580 just put a pen in it for a moment. 268 00:09:26.580 --> 00:09:29.700 But that million dollar marketing business 269 00:09:29.700 --> 00:09:32.860 is charging fees here 270 00:09:32.860 --> 00:09:34.860 and the businesses only work with them 271 00:09:34.860 --> 00:09:37.740 because they're making five to 10 times more than that 272 00:09:37.740 --> 00:09:39.780 on the services they're providing. 273 00:09:39.780 --> 00:09:43.220 And so if you have a five million dollar marketing agency 274 00:09:43.220 --> 00:09:44.860 then it's reasonable that some of the clients 275 00:09:44.860 --> 00:09:47.980 that you serve are making 50 million dollars in revenue 276 00:09:47.980 --> 00:09:49.340 off the services you're generating 277 00:09:49.340 --> 00:09:50.380 and you're getting none of that 278 00:09:50.380 --> 00:09:52.100 you're only capturing the service fee. 279 00:09:52.100 --> 00:09:54.100 And every month you have to go get new clients 280 00:09:54.100 --> 00:09:55.060 because some of them cancel 281 00:09:55.060 --> 00:09:57.060 because they aren't doing the other things 282 00:09:57.060 --> 00:09:58.420 that are required to be successful 283 00:09:58.420 --> 00:10:00.620 which anybody who owns it marketing agency knows 284 00:10:00.620 --> 00:10:02.220 your clients never do their job. 285 00:10:02.220 --> 00:10:04.940 But there are agencies who do more and more of the work 286 00:10:04.940 --> 00:10:06.420 to try and guarantee success 287 00:10:06.420 --> 00:10:09.820 but the more steps you take towards owning the result 288 00:10:09.820 --> 00:10:12.500 the more you're basically just doing the business for them 289 00:10:12.500 --> 00:10:14.420 which is not necessarily the wrong mindset 290 00:10:14.420 --> 00:10:16.860 because you always wanna deliver more value to your customers 291 00:10:16.860 --> 00:10:19.540 but at a certain point you are the business. 292 00:10:19.540 --> 00:10:20.700 And so it makes sense for you 293 00:10:20.700 --> 00:10:22.300 to own the economics of the business. 294 00:10:22.300 --> 00:10:24.500 And so again we're presented with the same path 295 00:10:24.580 --> 00:10:25.340 as we had originally. 296 00:10:25.340 --> 00:10:26.820 Now this one was already niche down 297 00:10:26.820 --> 00:10:29.500 and so either you gotta learn the HVAC business 298 00:10:29.500 --> 00:10:32.740 or you partner with someone who already knows it 299 00:10:32.740 --> 00:10:34.500 and either they can start something from scratch 300 00:10:34.500 --> 00:10:35.780 I would usually try and take an industry 301 00:10:35.780 --> 00:10:38.260 that has 10 plus experiences in HVAC 302 00:10:38.260 --> 00:10:40.820 and has grown a company of appreciable size 303 00:10:40.820 --> 00:10:42.340 or you could buy one 304 00:10:42.340 --> 00:10:43.740 because if you're a company of this size 305 00:10:43.740 --> 00:10:44.780 you probably could buy one 306 00:10:44.780 --> 00:10:47.580 and with your marketing prowess could juice the hell out of it. 307 00:10:47.580 --> 00:10:49.580 And the thing is is that most people will try and buy it 308 00:10:49.580 --> 00:10:51.740 but then also try and keep this agency thing going 309 00:10:51.740 --> 00:10:53.660 but sometimes you gotta take a half step back 310 00:10:53.660 --> 00:10:55.420 so you can take 20 steps forward 311 00:10:55.420 --> 00:10:56.940 because and this is a common saying 312 00:10:56.940 --> 00:10:58.900 that we have at acquisition.com is that 313 00:10:58.900 --> 00:11:02.340 the fastest way to build a 10 million dollar business 314 00:11:02.340 --> 00:11:05.740 is often not the fastest way to build a 100 million dollar business. 315 00:11:05.740 --> 00:11:07.660 And so for example if you wanted to build a building 316 00:11:07.660 --> 00:11:09.380 that was 10 stories tall 317 00:11:09.380 --> 00:11:11.100 you would start with a very different foundation. 318 00:11:11.100 --> 00:11:12.820 Now imagine you built a 10 story building 319 00:11:12.820 --> 00:11:16.060 and then said okay I wanna build a 100 story building 320 00:11:16.060 --> 00:11:18.660 using the same foundation you wouldn't be able to 321 00:11:18.660 --> 00:11:20.700 but that's exactly what most entrepreneurs do 322 00:11:20.700 --> 00:11:21.620 when they're trying to scale 323 00:11:21.620 --> 00:11:22.980 and they wonder why they're stuck 324 00:11:22.980 --> 00:11:24.420 is because they built it wrong to begin with 325 00:11:24.420 --> 00:11:26.860 because they were in the wrong opportunity vehicle. 326 00:11:26.860 --> 00:11:28.700 So if you were one of those agencies 327 00:11:28.700 --> 00:11:30.140 that is in this kind of spot 328 00:11:30.140 --> 00:11:31.980 where you're like I over-deliver for my customers 329 00:11:31.980 --> 00:11:34.260 I have a handful of them that obviously do way better 330 00:11:34.260 --> 00:11:35.100 than other ones. 331 00:11:35.100 --> 00:11:37.340 Path one is you just started on your own 332 00:11:37.340 --> 00:11:38.340 because you know a lot about it 333 00:11:38.340 --> 00:11:39.660 because sometimes people where agency owners 334 00:11:39.660 --> 00:11:41.660 did come from that space learned agency 335 00:11:41.660 --> 00:11:44.020 and you probably learned a little bit more about how to scale a team 336 00:11:44.020 --> 00:11:45.780 and now you can probably re-approach that 337 00:11:45.780 --> 00:11:47.140 with new eyes and new learnings 338 00:11:47.140 --> 00:11:49.540 and maybe you will be able to build an HVAC business. 339 00:11:49.540 --> 00:11:51.060 Version two is that you find someone 340 00:11:51.060 --> 00:11:52.900 who already has done an HVAC business 341 00:11:52.900 --> 00:11:54.900 you partner with them they get some slice of the equity 342 00:11:54.900 --> 00:11:56.820 that's negotiable depends on how good they are 343 00:11:56.820 --> 00:11:59.060 and what their experience is some slice between 344 00:11:59.060 --> 00:12:02.340 you know they get five to 50% of the deal 345 00:12:02.340 --> 00:12:04.060 and you guys start one together. 346 00:12:04.060 --> 00:12:06.580 Option three is that you either approach 347 00:12:06.580 --> 00:12:09.460 the top few guys you have and say hey 348 00:12:09.460 --> 00:12:11.980 instead of doing the service thing let's further align 349 00:12:11.980 --> 00:12:14.020 let me take over even more of this acquisition 350 00:12:14.020 --> 00:12:17.260 you know perspective and let's partner on this. 351 00:12:17.260 --> 00:12:19.500 Now in that instance if they're really good company 352 00:12:19.500 --> 00:12:20.660 and that's why they're performing 353 00:12:20.660 --> 00:12:22.020 you might not get 50% 354 00:12:22.020 --> 00:12:25.220 you might get 30% but again if you think like 355 00:12:25.220 --> 00:12:27.260 one of the big things that took me too long to learn 356 00:12:27.260 --> 00:12:30.540 is that it's the size of the slice of the pie 357 00:12:30.540 --> 00:12:33.140 that matters not the shape of the slice of the pie 358 00:12:33.140 --> 00:12:35.940 it's like lots of guys obsess about having 100% of the pie 359 00:12:35.940 --> 00:12:38.820 and this was me for a very long time 360 00:12:38.820 --> 00:12:41.140 they obsess about the shape of the slice 361 00:12:41.140 --> 00:12:43.580 rather than having a slice that's like this 362 00:12:43.580 --> 00:12:44.900 of a much bigger pie 363 00:12:44.900 --> 00:12:47.980 and so just so you know the average IPO founder 364 00:12:47.980 --> 00:12:50.740 when a company IPO owns 12 and a half percent 365 00:12:50.740 --> 00:12:52.020 of the company they found it 366 00:12:52.020 --> 00:12:54.980 and that's because the more people you make money 367 00:12:54.980 --> 00:12:56.340 the more money you ultimately make 368 00:12:56.340 --> 00:12:59.380 and I would say that the agency types that lend themselves 369 00:12:59.380 --> 00:13:01.780 more to this are the done for you 370 00:13:01.780 --> 00:13:04.140 more transactional acquisition agencies 371 00:13:04.140 --> 00:13:05.860 what I mean by that is like if you're really good 372 00:13:05.860 --> 00:13:09.020 at a lead gen strategy using some sort of type of platform 373 00:13:09.020 --> 00:13:12.660 or a really good at like building and scaling sales teams 374 00:13:12.660 --> 00:13:14.740 either outbound or even just closing teams 375 00:13:14.740 --> 00:13:16.700 like done for you closing teams 376 00:13:16.700 --> 00:13:19.500 all of those are agencies that plug very naturally 377 00:13:19.620 --> 00:13:20.620 into businesses 378 00:13:20.620 --> 00:13:24.020 if you're doing some sort of like a creative shop 379 00:13:24.020 --> 00:13:26.900 or you do a lot of design branding 380 00:13:26.900 --> 00:13:28.660 those ones tend to work a little bit better 381 00:13:28.660 --> 00:13:30.180 as like their own companies 382 00:13:30.180 --> 00:13:32.180 and also because LTV on customers 383 00:13:32.180 --> 00:13:33.380 who actually understand branding 384 00:13:33.380 --> 00:13:34.660 tends to be significantly higher 385 00:13:34.660 --> 00:13:37.660 and you can build very valuable companies there 386 00:13:37.660 --> 00:13:41.660 it's very it's not often that lead gen companies 387 00:13:41.660 --> 00:13:44.500 in and of themselves become inherently valuable 388 00:13:44.500 --> 00:13:47.580 the exceptions to that are when you own very large media assets 389 00:13:47.580 --> 00:13:49.780 and that generates you tons of leads for free 390 00:13:49.780 --> 00:13:51.820 like if you build the number one ranking thing 391 00:13:51.820 --> 00:13:54.580 for mold removal in the United States 392 00:13:54.580 --> 00:13:57.100 and then you rank that get all these leads 393 00:13:57.100 --> 00:13:59.380 and then you sell those leads that tends to work 394 00:13:59.380 --> 00:14:01.340 but the vast majority of people who are watching this 395 00:14:01.340 --> 00:14:02.980 are not in either of those camps 396 00:14:02.980 --> 00:14:05.220 they are very tactical in the fact that they know 397 00:14:05.220 --> 00:14:06.260 how to set appointments 398 00:14:06.260 --> 00:14:07.420 they know how to generate leads 399 00:14:07.420 --> 00:14:10.060 et cetera just using paid ads or whatever method they have 400 00:14:10.060 --> 00:14:12.020 and if you have one of those agencies 401 00:14:12.020 --> 00:14:14.020 it makes more sense in my opinion 402 00:14:14.020 --> 00:14:15.500 to capture the much bigger opportunity 403 00:14:15.500 --> 00:14:16.500 and get a slice of that 404 00:14:16.500 --> 00:14:18.820 then something that never really gets a ton of value 405 00:14:18.820 --> 00:14:21.060 it's not often that someone capitalizes 406 00:14:21.060 --> 00:14:22.500 and makes a very valuable business there 407 00:14:24.580 --> 00:14:26.900 big guys love that you're listening to the podcast 408 00:14:26.900 --> 00:14:29.740 if you ever want to have the video version of this 409 00:14:29.740 --> 00:14:30.940 which usually has more effects 410 00:14:30.940 --> 00:14:33.660 more visuals more graphs you know drawn out stuff 411 00:14:33.660 --> 00:14:36.180 sometimes it can help hit the brain centers 412 00:14:36.180 --> 00:14:37.860 in different ways you can check on my YouTube channel 413 00:14:37.860 --> 00:14:39.620 it's absolutely free to check that out 414 00:14:39.620 --> 00:14:40.700 if that's what you are into 415 00:14:40.700 --> 00:14:42.460 and if not keep enjoying the show 416 00:14:43.460 --> 00:14:47.580 the third example was the influencer who had 417 00:14:47.580 --> 00:14:50.180 you know 30 40 million subscribers across all their platforms 418 00:14:50.180 --> 00:14:52.780 and I say 30 to 40 million because I don't remember what it was 419 00:14:52.780 --> 00:14:54.260 I know one other platform said like 28 420 00:14:54.260 --> 00:14:57.260 so I'm assuming it was more than that across the rest of them 421 00:14:57.260 --> 00:14:59.900 point being when I sat down with them 422 00:14:59.900 --> 00:15:04.580 I said you guys are trying to take your 97 out of 100 media company 423 00:15:04.580 --> 00:15:07.140 to a 99 out of 100 media company 424 00:15:07.140 --> 00:15:09.900 when the objective you said was to make more money 425 00:15:09.900 --> 00:15:12.060 and you have no product that you sell 426 00:15:12.100 --> 00:15:14.940 and so all of your monetization relies on sponsorships 427 00:15:14.940 --> 00:15:19.380 and ad revenue which is typically the least efficient way 428 00:15:19.380 --> 00:15:23.500 to monetize because fundamentally anyone who pays you for a sponsorship 429 00:15:23.500 --> 00:15:25.820 is making a significant and if they do it on a recurring basis 430 00:15:25.820 --> 00:15:30.380 they're making a huge arbitrage on your brand and your value 431 00:15:30.380 --> 00:15:33.140 and so you capture that arbitrage 432 00:15:33.140 --> 00:15:35.300 so if they're paying you $100,000 for every video 433 00:15:35.300 --> 00:15:37.580 they might be making a million dollars on every video 434 00:15:37.580 --> 00:15:40.260 and wouldn't it be nice to own half of that 435 00:15:40.260 --> 00:15:43.540 and not only own half of it but own it in terms of like 436 00:15:43.540 --> 00:15:45.300 you're making the money that they're making 437 00:15:45.300 --> 00:15:47.820 but also you have the equity in the company 438 00:15:47.820 --> 00:15:51.860 that has significantly more value than just the ad revenue 439 00:15:51.860 --> 00:15:54.820 that you get for making a video or doing a shoot 440 00:15:54.820 --> 00:15:57.340 and so when I was talking to this individual creator 441 00:15:57.340 --> 00:16:01.420 I said like you've identified in my opinion the incorrect constraint 442 00:16:01.420 --> 00:16:03.700 you're seeing your business as this box of media 443 00:16:03.700 --> 00:16:06.140 and trying to make more better videos 444 00:16:06.140 --> 00:16:08.660 which if you wanted to brand and just continue to build the brand 445 00:16:08.660 --> 00:16:11.020 before making a ask that would be the right problem to solve 446 00:16:11.020 --> 00:16:14.580 but they were at 97 out of 100 and realistically if you look at stats 447 00:16:14.580 --> 00:16:19.620 they're a 0.000001% creator 448 00:16:19.620 --> 00:16:22.100 so do we really think that their constraint of their business 449 00:16:22.100 --> 00:16:24.100 is that they aren't good enough at marketing? 450 00:16:24.100 --> 00:16:25.740 No, probably not 451 00:16:25.740 --> 00:16:29.020 what they really had was the media department of a business 452 00:16:29.020 --> 00:16:31.700 that like given the amount of impressions they had 453 00:16:31.700 --> 00:16:34.540 and this is gonna sound like mind boggling to say 454 00:16:34.540 --> 00:16:36.740 but given the amount of impressions that these guys were getting 455 00:16:36.740 --> 00:16:38.620 which when they don't make videos 456 00:16:38.620 --> 00:16:41.060 we're getting 100 million views a month 457 00:16:41.060 --> 00:16:42.940 when they don't post anything new 458 00:16:42.940 --> 00:16:47.580 that kind of thing is a company that's 100 million plus in revenue 459 00:16:48.620 --> 00:16:50.500 and so they have the marketing department 460 00:16:50.500 --> 00:16:52.540 but what they don't have is a sales department 461 00:16:52.540 --> 00:16:53.860 they don't have a product department 462 00:16:53.860 --> 00:16:55.220 they don't have customer success 463 00:16:55.220 --> 00:16:56.580 they have none of these other departments 464 00:16:56.580 --> 00:16:58.620 there's zero out of 100 on all these 465 00:16:58.620 --> 00:17:01.660 and so the constraint isn't going 97 and 99 466 00:17:01.660 --> 00:17:04.460 it's going from zero to 20 on these ones 467 00:17:04.460 --> 00:17:06.220 and that's where they would get an outsize return 468 00:17:06.220 --> 00:17:08.980 because for example they made the same ad they would 469 00:17:08.980 --> 00:17:12.740 that some outside company would pay them to make 470 00:17:12.740 --> 00:17:14.900 for whatever the product was 471 00:17:14.900 --> 00:17:16.620 if they own the whole thing 472 00:17:16.620 --> 00:17:18.300 even if it was a mediocre product 473 00:17:18.300 --> 00:17:20.140 they would make five 10 times more money 474 00:17:20.140 --> 00:17:22.740 and they would actually make a stronger brand association 475 00:17:22.740 --> 00:17:24.460 because rather than flip flopping it between 476 00:17:24.460 --> 00:17:26.180 whatever thing and pay them that month 477 00:17:26.180 --> 00:17:28.540 they'd be able to consistently talk about the benefits 478 00:17:28.540 --> 00:17:29.980 they'd be able to integrate it in their content 479 00:17:29.980 --> 00:17:32.140 rather than making hardcore right hook ads 480 00:17:32.140 --> 00:17:33.340 they could make jokes about it 481 00:17:33.340 --> 00:17:34.260 and they could weave it in 482 00:17:34.300 --> 00:17:37.020 which would ultimately build the long-term brand outhat 483 00:17:37.020 --> 00:17:38.620 that would be significantly more valuable 484 00:17:38.620 --> 00:17:41.100 so if I'm in this guy's position 485 00:17:41.100 --> 00:17:42.580 what are the choices I have here? 486 00:17:42.580 --> 00:17:44.740 Version one is if I've got an advertiser 487 00:17:44.740 --> 00:17:46.220 consistently comes to me 488 00:17:46.220 --> 00:17:48.060 depending on the size of the business 489 00:17:48.060 --> 00:17:51.380 I may be able to negotiate some sort of equity thing 490 00:17:51.380 --> 00:17:54.780 rather than getting paid with cash 491 00:17:54.780 --> 00:17:56.140 that's option one 492 00:17:56.140 --> 00:17:57.620 I think that's the best option 493 00:17:57.620 --> 00:18:01.300 because they already have all these other boxes built up 494 00:18:01.300 --> 00:18:02.820 and then you just add your box 495 00:18:02.860 --> 00:18:04.820 to their larger conglomeration 496 00:18:04.820 --> 00:18:07.340 and even if you're getting 10 or 20% of the company 497 00:18:07.340 --> 00:18:09.580 if it's a big company like for these guys 498 00:18:09.580 --> 00:18:12.020 they're only partnering with very big companies already 499 00:18:12.020 --> 00:18:14.220 and so getting even 10% of a company 500 00:18:14.220 --> 00:18:15.540 that's worth a hundred million dollars 501 00:18:15.540 --> 00:18:17.260 and then you put all of your effort behind it 502 00:18:17.260 --> 00:18:19.260 and make it a two or three hundred million dollar company 503 00:18:19.260 --> 00:18:21.620 that's a significantly better outcome for many of them 504 00:18:21.620 --> 00:18:22.660 than what they're currently getting paid 505 00:18:22.660 --> 00:18:26.060 just hand-to-mouth video to paycheck right? 506 00:18:26.060 --> 00:18:27.300 The second option is to say 507 00:18:27.300 --> 00:18:29.060 okay is there a category of products 508 00:18:29.060 --> 00:18:30.620 that continue to pay me the most 509 00:18:30.620 --> 00:18:31.860 out of all the advertisers? 510 00:18:31.860 --> 00:18:33.980 Okay, well, once you perform the best 511 00:18:33.980 --> 00:18:37.060 or give me leading indicators, just do what Amazon does 512 00:18:37.060 --> 00:18:39.620 see what's already selling and then clone it 513 00:18:39.620 --> 00:18:41.900 and make it your own and put your name on it 514 00:18:41.900 --> 00:18:44.980 and put a couple of your own little personal quirks 515 00:18:44.980 --> 00:18:46.940 that you wish it did better 516 00:18:46.940 --> 00:18:49.060 and that you see in your comments of people 517 00:18:49.060 --> 00:18:50.860 who had bought the product and complained about it 518 00:18:50.860 --> 00:18:52.660 whatever, fix all those things 519 00:18:52.660 --> 00:18:54.820 and make your version yours and better 520 00:18:54.820 --> 00:18:58.020 and if you do that, then you own the entirety of that thing 521 00:18:58.020 --> 00:18:59.100 but in order to do that 522 00:18:59.100 --> 00:19:03.140 you probably, if it were me, I would go snipe 523 00:19:03.140 --> 00:19:05.220 some of the topics that some of those companies 524 00:19:05.220 --> 00:19:08.180 and say hey, you're currently an executive here 525 00:19:08.180 --> 00:19:10.700 would you like to own a slice of my thing? 526 00:19:10.700 --> 00:19:14.500 Again, I'm happy to own 70% 527 00:19:14.500 --> 00:19:16.020 and get three of the best guys over 528 00:19:16.020 --> 00:19:19.380 have them build their boxes behind my thing 529 00:19:19.380 --> 00:19:20.540 and they're happy to do it 530 00:19:20.540 --> 00:19:22.820 because they're currently getting zero or 1% 531 00:19:22.820 --> 00:19:24.620 and you can give them 10 each 532 00:19:24.620 --> 00:19:25.980 and they see the bigger opportunity 533 00:19:25.980 --> 00:19:28.380 because they also know that 50% of sales 534 00:19:28.420 --> 00:19:30.140 are coming from your channel, right? 535 00:19:30.140 --> 00:19:31.420 And that's the kind of leverage you have 536 00:19:31.420 --> 00:19:33.980 because if you are a huge percentage of the traffic 537 00:19:33.980 --> 00:19:35.300 for one of these larger businesses 538 00:19:35.300 --> 00:19:37.900 then you usually can negotiate bigger chunks of equity 539 00:19:37.900 --> 00:19:38.820 and you could go right in. 540 00:19:38.820 --> 00:19:40.620 That's the fastest and easiest way. 541 00:19:40.620 --> 00:19:43.860 The longer maybe bigger money way is if you do it all yourself 542 00:19:43.860 --> 00:19:45.580 but that's always the trade that you have to make 543 00:19:45.580 --> 00:19:48.260 as an entrepreneur is how many new skills do I have to have 544 00:19:48.260 --> 00:19:50.220 in order to pursue this new opportunity 545 00:19:50.220 --> 00:19:51.780 versus the ones I currently have. 546 00:19:51.780 --> 00:19:53.340 The third opportunity for them is actually, 547 00:19:53.340 --> 00:19:54.820 is neither of those 548 00:19:54.820 --> 00:19:57.100 but it's probably the least operational risk for them 549 00:19:57.100 --> 00:20:00.060 is accepting the fact that they just like doing media 550 00:20:00.060 --> 00:20:01.220 and that's what they jam on 551 00:20:01.220 --> 00:20:02.380 and they don't want to touch either 552 00:20:02.380 --> 00:20:03.540 these other business components 553 00:20:03.540 --> 00:20:06.460 and saying and then kind of more hardcore 554 00:20:06.460 --> 00:20:09.020 branding themselves as a creative shop 555 00:20:09.020 --> 00:20:11.100 that knows how to make viral videos 556 00:20:11.100 --> 00:20:13.900 that they can transform into ads 557 00:20:13.900 --> 00:20:16.220 and that's where you go from being a really good creator 558 00:20:16.220 --> 00:20:20.180 to being a Madison Avenue agency that makes ads that crush 559 00:20:20.180 --> 00:20:22.860 because if you are skilled enough to become a top 1% 560 00:20:22.860 --> 00:20:24.940 0.001% creator 561 00:20:24.940 --> 00:20:28.580 then you know stuff better than 99% 562 00:20:28.580 --> 00:20:31.220 of ad creative shops out there 563 00:20:31.220 --> 00:20:33.580 and you would be able to get huge brands 564 00:20:33.580 --> 00:20:36.540 to pay you to make ads because here's the unlock 565 00:20:36.540 --> 00:20:39.700 is that most influencers are getting paid 566 00:20:39.700 --> 00:20:41.980 based on the impressions that they are getting the brand 567 00:20:41.980 --> 00:20:44.340 for free based on their audience 568 00:20:44.340 --> 00:20:48.420 but where the real money is made is where you take that TikTok video 569 00:20:48.420 --> 00:20:50.020 that YouTube short, that Instagram video, 570 00:20:50.020 --> 00:20:51.740 that YouTube video, whatever it is 571 00:20:51.740 --> 00:20:54.260 and then they put a million dollars of ads 572 00:20:54.300 --> 00:20:56.780 and then behind it when it's already shown as a winner 573 00:20:56.780 --> 00:20:59.500 and then it goes from being shown to 5 million people 574 00:20:59.500 --> 00:21:01.740 in your audience to 100 million people 575 00:21:01.740 --> 00:21:03.380 that it converts from cold. 576 00:21:03.380 --> 00:21:05.740 That is where the real money is made 577 00:21:05.740 --> 00:21:09.580 and so if you brand yourself as an ad agency 578 00:21:09.580 --> 00:21:11.660 and I mean this in the high ad agency world 579 00:21:11.660 --> 00:21:13.820 not like local business like when we run the Facebook ads 580 00:21:13.820 --> 00:21:16.540 for you but real creative agency 581 00:21:16.540 --> 00:21:19.500 you now are no longer monetizing your audience 582 00:21:19.500 --> 00:21:23.140 but your skill set to make videos that go viral. 583 00:21:23.140 --> 00:21:26.220 That is a more valuable skill oftentimes 584 00:21:26.220 --> 00:21:29.860 than the size of the audience paired together even better 585 00:21:29.860 --> 00:21:33.700 but ad spend has no limit on reach as long as it's profitable 586 00:21:33.700 --> 00:21:37.060 so they can always expand beyond your existing audience 587 00:21:37.060 --> 00:21:39.660 which means that you get to capture all of the upside 588 00:21:39.660 --> 00:21:42.420 based on how skilled you are as an advertiser. 589 00:21:42.420 --> 00:21:43.580 So those would be the three paths 590 00:21:43.580 --> 00:21:45.300 for that particular type of business. 591 00:21:45.300 --> 00:21:48.320 Now if you're following along what I want you to think 592 00:21:48.320 --> 00:21:50.580 is not like okay well I'm not one of these three businesses 593 00:21:50.580 --> 00:21:52.460 now what I should do but it's actually the framework 594 00:21:52.460 --> 00:21:54.020 that we approach the problem with 595 00:21:54.020 --> 00:21:57.340 which is one what problem are we trying to solve? 596 00:21:57.340 --> 00:21:59.460 All right in each of these businesses 597 00:21:59.460 --> 00:22:00.700 they wanted to make more money. 598 00:22:00.700 --> 00:22:02.580 The next one is over what time horizon. 599 00:22:02.580 --> 00:22:04.060 If you want to make more money tomorrow 600 00:22:04.060 --> 00:22:06.220 the number of things you can do is very limited. 601 00:22:06.220 --> 00:22:08.660 If you want to make more money in 10 years 602 00:22:08.660 --> 00:22:10.020 you take a very different play. 603 00:22:10.020 --> 00:22:12.140 It's just like that building I explained in the beginning. 604 00:22:12.140 --> 00:22:13.740 If you want to build a 10 floor building 605 00:22:13.740 --> 00:22:15.300 you build it differently than if you want to build 606 00:22:15.300 --> 00:22:17.060 a 100 floor building and guess what? 607 00:22:17.060 --> 00:22:19.380 It takes longer to build a 100 story building 608 00:22:19.380 --> 00:22:20.820 and so to have the expectation 609 00:22:20.820 --> 00:22:22.140 that you're gonna build a 100 story building 610 00:22:22.140 --> 00:22:24.860 in the same time it builds 10 is unlikely 611 00:22:24.860 --> 00:22:27.180 and more realistically the amount of time 612 00:22:27.180 --> 00:22:30.820 it might take to build a 100 story building's foundation 613 00:22:30.820 --> 00:22:32.460 might take the same time it takes to build 614 00:22:32.460 --> 00:22:34.660 the entirety of a 10 floor building 615 00:22:34.660 --> 00:22:36.980 which means that above the surface 616 00:22:36.980 --> 00:22:39.540 somebody else building a 10 million dollar 617 00:22:39.540 --> 00:22:42.300 or a 10 floor building might happen way faster 618 00:22:42.300 --> 00:22:43.460 than you because you start seeing them 619 00:22:43.460 --> 00:22:45.500 erect this building right? 620 00:22:45.500 --> 00:22:48.180 Whereas yours is just continuing to build this base 621 00:22:48.180 --> 00:22:50.220 before you start building up right? 622 00:22:50.220 --> 00:22:52.660 It's that perspective that I'm telling you 623 00:22:52.660 --> 00:22:55.700 after having seen many many many very successful entrepreneurs 624 00:22:55.700 --> 00:22:58.740 nine figure plus that perspective is arguably 625 00:22:58.740 --> 00:23:00.180 the single most valuable thing you have 626 00:23:00.180 --> 00:23:01.380 which is if you are not it 627 00:23:01.380 --> 00:23:03.820 if you are in a rush it takes longer 628 00:23:03.820 --> 00:23:05.300 because you have to start over again. 629 00:23:05.300 --> 00:23:07.580 So number one is what problem are we solving? 630 00:23:07.580 --> 00:23:10.060 The second is we like let's play it out right? 631 00:23:10.060 --> 00:23:12.500 So if you take your current agency 632 00:23:12.500 --> 00:23:13.740 or whatever business you have 633 00:23:13.740 --> 00:23:14.980 and you take it to the natural stream 634 00:23:14.980 --> 00:23:17.100 there's usually a cap on it. 635 00:23:17.100 --> 00:23:20.100 If you play out multiple scenarios 636 00:23:20.100 --> 00:23:21.860 the next question which is question three 637 00:23:21.860 --> 00:23:24.780 that I like to ask is which problem will we prefer solving 638 00:23:24.780 --> 00:23:27.340 or which problem we feel like we're more equipped to solve 639 00:23:27.340 --> 00:23:29.300 or which problems easier? 640 00:23:29.300 --> 00:23:31.300 Because if you start framing it in terms of the problem 641 00:23:31.300 --> 00:23:33.060 that you're gonna have to solve to be successful 642 00:23:33.060 --> 00:23:35.460 it actually makes it much more controllable for you 643 00:23:35.460 --> 00:23:37.780 and this is how we solve problems in terms of businesses 644 00:23:37.780 --> 00:23:39.540 that we invest in acquisition.com 645 00:23:39.540 --> 00:23:41.620 we talked about multiple paths for each of these companies 646 00:23:41.620 --> 00:23:42.420 right? 647 00:23:42.420 --> 00:23:43.940 We'd have to pick one 648 00:23:43.980 --> 00:23:47.380 and so if we're picking between do I have to find somebody 649 00:23:47.380 --> 00:23:48.900 who has this experience 650 00:23:48.900 --> 00:23:52.620 or do I have to negotiate a slice of the companies I have 651 00:23:52.620 --> 00:23:55.460 I would say well which of these do we feel more equipped to do? 652 00:23:55.460 --> 00:23:57.900 Now at acquisition.com we are really good at recruiting 653 00:23:57.900 --> 00:23:59.620 which is how we scale all the companies we have 654 00:23:59.620 --> 00:24:00.620 is that we recruit talent 655 00:24:00.620 --> 00:24:01.740 who've already been there done that. 656 00:24:01.740 --> 00:24:04.460 And so we'd probably say hey we feel really confident 657 00:24:04.460 --> 00:24:06.260 that we could recruit somebody in 658 00:24:06.260 --> 00:24:08.420 and put seed capital in to get it going 659 00:24:08.420 --> 00:24:10.220 and then we'd own the whole pie 660 00:24:10.220 --> 00:24:11.500 and so for us that would be a problem 661 00:24:11.500 --> 00:24:13.140 that we feel very confident in solving 662 00:24:13.180 --> 00:24:14.580 and gives us the most upside 663 00:24:14.580 --> 00:24:16.260 but you have to answer that for you 664 00:24:16.260 --> 00:24:19.620 given your skillset, your resources and your experience. 665 00:24:19.620 --> 00:24:21.660 The main takeaway that I want everyone to have 666 00:24:21.660 --> 00:24:24.380 is that there's constraints and there's leverage. 667 00:24:24.380 --> 00:24:26.300 Properly identifying the thing 668 00:24:26.300 --> 00:24:27.860 that's actually limiting your business 669 00:24:27.860 --> 00:24:29.380 not what you think is limiting 670 00:24:29.380 --> 00:24:31.860 is the one of the biggest unlocks in business 671 00:24:31.860 --> 00:24:34.420 it's how sometimes we can TEDx a business in a year 672 00:24:34.420 --> 00:24:36.860 simply by reimagining what problems are solving 673 00:24:36.860 --> 00:24:39.180 and the reason we get that kind of growth 674 00:24:39.180 --> 00:24:41.340 is because when you focus on the constraint 675 00:24:41.340 --> 00:24:42.420 you get the most leverage 676 00:24:42.700 --> 00:24:44.860 means you get the most out for what you put in 677 00:24:44.860 --> 00:24:47.620 and I will restate this because I think it's so important. 678 00:24:47.620 --> 00:24:51.660 People who are wealthy acquire or accumulate wealth faster 679 00:24:51.660 --> 00:24:54.140 than you not because they're moving faster 680 00:24:54.140 --> 00:24:56.260 but because they're doing more of the right stuff 681 00:24:56.260 --> 00:24:57.620 and less of the wrong stuff 682 00:24:57.620 --> 00:24:59.300 and when they do the right stuff 683 00:24:59.300 --> 00:25:02.780 they get paid disproportionately more per unit of effort. 684 00:25:02.780 --> 00:25:04.540 And if you look at the doing this 685 00:25:04.540 --> 00:25:05.980 of each of the entrepreneurs 686 00:25:05.980 --> 00:25:07.620 if they own an HVAC agent 687 00:25:07.620 --> 00:25:09.980 you could probably the easiest one to visualize 688 00:25:09.980 --> 00:25:12.420 if they're running ads for 50 local markets 689 00:25:12.420 --> 00:25:13.940 for 50 different customers 690 00:25:13.940 --> 00:25:16.460 that doing this is more or less the same 691 00:25:16.460 --> 00:25:20.980 as running 50 different local markets ads for one company 692 00:25:20.980 --> 00:25:22.780 arguably it's even easier to do it 693 00:25:22.780 --> 00:25:24.180 for one company in 50 markets 694 00:25:24.180 --> 00:25:26.100 because you can standardize everything on the back end 695 00:25:26.100 --> 00:25:27.580 and you only have one point of contact 696 00:25:27.580 --> 00:25:29.420 you have to do it rather than 50 697 00:25:29.420 --> 00:25:32.260 and so you actually become even more efficient in that setting 698 00:25:32.260 --> 00:25:34.980 and so the doing this is more or less the same 699 00:25:34.980 --> 00:25:38.740 but the reward for the work compounds 700 00:25:38.900 --> 00:25:41.180 and that's how they become disproportionately wealthy 701 00:25:41.180 --> 00:25:43.860 compared to the one that just immediately wants to 702 00:25:43.860 --> 00:25:46.380 sell the quick appointment, sell the quick leads. 703 00:25:46.380 --> 00:25:47.900 If you have a longer perspective 704 00:25:47.900 --> 00:25:50.220 and say I wanna build a hundred story building 705 00:25:50.220 --> 00:25:52.740 then you might be willing to take a little bit more time 706 00:25:52.740 --> 00:25:55.460 to find that partner, find the deal strokes that works 707 00:25:55.460 --> 00:25:58.300 so that all of the work you do from now for the next 10 years 708 00:25:58.300 --> 00:25:59.940 stacks on top of each other 709 00:25:59.940 --> 00:26:02.060 rather than having to start at square one every month 710 00:26:02.060 --> 00:26:03.740 to figure out how you're gonna pay your bills. 711 00:26:03.740 --> 00:26:07.780 So just like I'm advising you 712 00:26:07.780 --> 00:26:09.780 to find somebody who has been there done that 713 00:26:09.780 --> 00:26:12.460 and note I was like 10 years of experience 714 00:26:12.460 --> 00:26:14.460 who has been built in this industry. 715 00:26:14.460 --> 00:26:16.340 The reason I'm saying 10 years is because in 10 years 716 00:26:16.340 --> 00:26:17.420 you've lived through cycles, 717 00:26:17.420 --> 00:26:19.100 you've seen different interest rate environments, 718 00:26:19.100 --> 00:26:20.820 you know what it's like when things go up and go down 719 00:26:20.820 --> 00:26:23.540 you've lived through lawsuits, you've had employees come and go 720 00:26:23.540 --> 00:26:25.180 like you've been through some cycles, right? 721 00:26:25.180 --> 00:26:26.260 You've scarred tissue. 722 00:26:26.260 --> 00:26:28.700 If I'm also now talking to that industry expert 723 00:26:28.700 --> 00:26:30.260 who's like I've spent 10 years in HVAC 724 00:26:30.260 --> 00:26:32.660 how do I know this kid who's trying to take 725 00:26:32.660 --> 00:26:35.660 a third of my business or offer to take a percentage of mine 726 00:26:35.660 --> 00:26:38.220 is legit, I would say the same thing back to you 727 00:26:38.220 --> 00:26:41.260 which is go with somebody who's been doing it for a while 728 00:26:41.260 --> 00:26:44.780 who has metrics, who can demonstrate expertise 729 00:26:44.780 --> 00:26:47.220 with experience rather than with the words they say. 730 00:26:47.220 --> 00:26:51.060 And so the real ideal scene here is that you have two people 731 00:26:51.060 --> 00:26:53.140 who have been building deep expertise 732 00:26:53.140 --> 00:26:56.740 in complimentary skill sets that fit within a larger boxer 733 00:26:56.740 --> 00:26:59.460 opportunity to capture something together. 734 00:26:59.460 --> 00:27:02.500 And the reason I'm pretty passionate about this is that 735 00:27:02.500 --> 00:27:04.380 why combinators done a ton of research on this 736 00:27:04.420 --> 00:27:06.700 but they found that three founders is the optimal amount 737 00:27:06.700 --> 00:27:07.620 of founders for a company. 738 00:27:07.620 --> 00:27:10.380 Now mind you, that's the most expensive split you ever do 739 00:27:10.380 --> 00:27:12.420 is that first day you split the pie into thirds. 740 00:27:12.420 --> 00:27:14.540 It's the most delusion you're ever gonna experience is in one 741 00:27:14.540 --> 00:27:18.500 day you already gave away two thirds of the company. 742 00:27:18.500 --> 00:27:21.500 But typically those three people will fit within 743 00:27:21.500 --> 00:27:23.780 core very deep responsibilities. 744 00:27:23.780 --> 00:27:26.380 You'll usually have somebody who's very good at operating 745 00:27:26.380 --> 00:27:28.980 businesses, usually have somebody who's very good at product 746 00:27:28.980 --> 00:27:32.460 and the actual delivered like the deep industry expertise 747 00:27:32.460 --> 00:27:34.780 and they'll usually have somebody who's good at marketing 748 00:27:34.780 --> 00:27:35.700 and acquisition. 749 00:27:35.700 --> 00:27:39.100 So one guy gets customers, one guy delivers the things 750 00:27:39.100 --> 00:27:41.780 that this guy promises and this guy keeps the other two 751 00:27:41.780 --> 00:27:43.980 out of prison and makes sure that people get paid, 752 00:27:43.980 --> 00:27:46.220 that they raise funding, that they pay taxes, 753 00:27:46.220 --> 00:27:49.140 that they actually run the business and manage people 754 00:27:49.140 --> 00:27:52.140 and recruit and all of the other things associated. 755 00:27:52.140 --> 00:27:55.140 And mind you, my commentaries invest a lot of multi 756 00:27:55.140 --> 00:27:56.940 deck of billion dollar companies. 757 00:27:56.940 --> 00:27:59.940 And so again, if you're trying to build a very big building 758 00:27:59.940 --> 00:28:02.140 this kind of the African proverb, like if you wanna go 759 00:28:02.140 --> 00:28:04.740 fast, you can go alone, if you wanna go far, go together. 760 00:28:04.740 --> 00:28:08.900 And so you could reasonably develop each of those three 761 00:28:08.900 --> 00:28:11.340 skill sets and have 100% of the pie. 762 00:28:11.340 --> 00:28:13.780 The question is how much life do you have to pay 763 00:28:13.780 --> 00:28:15.260 in order to get those skill sets? 764 00:28:15.260 --> 00:28:17.300 And if you measure over a 10 year time horizon, 765 00:28:17.300 --> 00:28:20.460 if it took you 10 years to get all three versus three years 766 00:28:20.460 --> 00:28:22.980 to get your one third and then you had seven years 767 00:28:22.980 --> 00:28:24.700 of building with the other two horses, 768 00:28:24.700 --> 00:28:26.180 where would you be at your 10? 769 00:28:26.180 --> 00:28:27.980 That's the decision we all have to make. 770 00:28:27.980 --> 00:28:30.020 And that's not one that I can make for you, 771 00:28:30.020 --> 00:28:31.620 that's an individual decision.