The 4 Ways to Beat 99% Of Other Businesses | Ep 879

0:00I think you can beat 99 % of people not by beating them in every possible facet but just picking one thing to beat them on and that's how you can win in competition. Now, if you can do more than one, you dominate. What's going on, guys? This will be either the absolute best video you ever see, the worst video you ever see, or somewhere in between. So, what's it? You can beat 99 % of other businesses if you only pick one thing to beat them on. Now, if you can beat them in two vectors, you become impossible. But there's four that you can compete on. All right, and so that's what we're going to talk about.

0:35Now, the first of the four vectors is speed, right? How do I do what I'm going to do faster than everybody else? Now, what's interesting about this is that I have been doing business for a minute now, and I would say that of the four vectors, I'm starting with speed because I actually think it's the most important of the four. And I think the reason for that is that humans learn behaviors with decreased latency. Meaning, if like Facebook and Instagram or whatever you're watching this on, like, has trained us to come back, not because they pay us to come back, because they have compressed latency for some positive outcome.

1:13And the positive outcome they give us is a thumbs up. They literally give us a little red light. And other people give actual money, but at a delay, and they struggle to get people to do things. So think about it like this. You pay someone who works for you every two weeks, it's much harder to motivate them than if you You actually paid them in real time and paying someone in real time is actually so effective. It's illegal. And so truckers, for example, used to be able to get paid per mile and like almost essentially in real time. And so they actually outlawed it because guys would just keep driving to the point of like insanity and wouldn't sleep for days.

1:51And it was unsafe. All right. That's how powerful speed is because that is what trains behavior. And so functionally, the questions that we have to ask ourselves is, okay, if speed is going to be my competitive advantage, it doesn't matter what we do, right? If you're in lawn care, there's components to speed, right? So on one angle, like you have to think about each of these larger vectors in smaller sub vectors. So for speed, it could be the distance between when someone purchases and when they get something, right? That's one vector of speed. The other vector is that if you're doing something on a recurring basis, how much time is it going to take each time?

2:24So for example, if I had a 10 minute workout, it's going to be more valuable than an hour long workout if I could get the same results, right? If I say I'm going to help someone get leads and I can help them get those leads in an hour versus waiting a week to turn on the ads, that's more valuable, right? And so at all times, it's always like, how can we take what we're currently doing and do it faster? And I can promise you, if you just did that one thing compared to everyone else in your marketplace, you just delivered faster, you will have a sustainable competitive advantage over them and be able to charge premium prices for it.

2:55And what's really interesting about speed is that speed rarely actually costs more. It typically comes from idea alpha, meaning like idea over performance. It's like you've thought through the process of the steps better than the competition has. And as a result, you actually can get better outcomes. Now, part of this also comes down to what types of customers you're picking. If you have 100 different types of customers, it's very difficult to do things quickly because you're doing lots of different things for lots of different people. This is why niching down also helps you provide more value because you're being more selective about the customers you're picking.

3:27And then as a result, you can be more templatized in the types of services and products that you ultimately offer. And so there's kind of three different vectors that I think about in terms of like, what can I actually do to improve speed? Because you're like, okay, I get that, but how do I actually do it? All right. So number one is I want templates. All right. How can I take what we're currently doing and make these into templates? Can I have ad templates? Can I have email templates? Can I have landing page templates? Can I have presentation templates? Can I have at least templated steps that someone's going to follow, right?

3:57All of these are just templates that we can pass on to somebody else, create a repeatable process. If it's repeatable, they don't have to decide. Decision-making is typically the slowest part of the organization. So how do we remove all decisions to speed up the time of completion? The second one is pre-made. So if you're in physical products or even food, it's, I mean, fundamentally McDonald's changed the game in fast food because they started pre-making food. They already had burgers on the line. So when someone ordered a burger that he's handed it to him, and if you haven't seen the movie Founder, great movie, he experiences this and he's like, no, no, no, I just ordered.

4:27They're like, yeah that's your burger and he's like no but i just ordered and they're like yeah that's your burger and he's like huh and it's this big aha moment like oh this changes everything and so sometimes if you know there was a great persian place they used to go to it crushes in california it's called panini cafe go check it out um but they make amazing persian food but one of the things i realized is right as the lunch hour started because i lived pretty close by back then um they just started grilling chicken because they knew that they were about to get the lunch rush. And they knew that they were going to have people who wanted jujie kebab.

4:57Shout out for those who know. All right. And so they just thought ahead of time and it became really valuable because I would show up and be like jujie kebab, extra rice, my whole thing. And they would just, boom, they would deliver for me because they didn't even have to make two order because they just knew certain amount of things are always going to have to be in. And even if for some reason, someday, they're not going to hit that, the benefit they get of the vast majority of their customers immediately getting served and how many tables they return faster, more than paid for the small extra chicken that maybe they didn't, they had to throw at the end of the day.

5:26The third element here, and this happens a lot with services, is availability. Now, what does this mean? I'll give you a couple examples. So if you have a spa or a salon or something, if you have more availability for people to book, it means they want something and they can immediately get it faster. They can get the appointment with you to get their nails done, get their hair done, get their back crack, get their pain away, whatever it is. Basically, the sooner you can have that availability, the more you will be able to convert and the more people will be willing to pay. And so if someone says, hey, I have an appointment in four days or I have an appointment in one day, they're probably far more likely to come to you and be willing to pay more for that one appointment.

6:01But how do you increase availability? Sometimes it means you have to pay people more or extend their hours or hire more people. But the reality is that this is one of those things that is one of the largest vectors in terms of increasing throughput on a business that is underappreciated by the vast majority of business owners. And so when I invest in a company or I look at a company, a lot of times I'm like, ooh, like it's one of those huge hidden diamonds. I probably shouldn't even share this. But it's one of those hidden diamonds that I could almost always drive 20, 30, 40 % more through business by simply better staffing the hours.

6:31And so like even at acquisition.com, we currently sell 12 hours a day, 7 days a week. And we're now investing so we can get to 20 hours a day because we have such a larger international market. Right? So it's like we always want to increase our availability because I know the math behind this. and it's a huge impact on the bottom line, all right? So the first vector, macro vector that you can win on, and you only need one, but if you have more than one, you just dominate everyone, all right? Is that we went over speed. Now, the second is risk, all right? So how can we make our thing not risky?

7:07Now, think about McDonald's, the example I gave you earlier. Well, they're both fast and they're not risky. So what does that actually mean? Now, part of you are like, oh no, they're risky because of cancer and all this other stuff. Well, let's ignore that because why? Why do people not care about this stuff? Actually, it's funny. Speed. It's not latency. If you ate a burger and immediately had something growing on you, no one would eat the burgers. But because it happens 40 years from now, no one cares. Speed changes behavior and lack of speed doesn't. So what about risk? So a way you can translate risk is reliability and consistency.

7:38It's a different way of saying it, which is when people, but this is especially important for services that are recurring, where people get month after month after month after month, they keep coming back again and again and again. And so the question is, how can we consistently match conditions between the perfect and ideal state and every state that happens afterwards? And most people dramatically underestimate the amount of variables that exist in any given encounter. And so as a result, they have far less consistency than they otherwise should. All right. So that's just the output. Now, what are the other components of this?

8:06So I'll say one is consistency, right? In terms of in terms of decreasing risk. We could also consider that reliability. If you say you're going to cut someone's grass, but sometimes you're late or you show up a different day or you don't show up one week, like that's a major hit. People just don't want to deal with that stuff. Like they're not willing to. On the flip side, if you're the type of guy where someone's like, you know what? I could undercut your long care guy. You know what? I could clean instead of your cleaning person. A lot of people are like, you know what? I've been with Rose for 10 years and she's never missed a day, you're like, I just, I'm not willing to take the risk because she's already paid down so much.

8:42So, but I could do it for 20 % less. It's like, it's just not worth it. Right. That's real value that actually defends the business. Now, what other types of risk mitigation can we offer? All right. One of them is reputation, right? So this is where brand comes in. So you can, the consistency of reliability typically happens after someone makes a purchase, But how do we shift the perception of the customer that they're going to have a high likelihood outcome that they're going to get what they want? Well, one of the easiest ways is that you've gotten somebody else exactly what they wanted and that person found out about it.

9:15Now, if they don't know someone directly, but then they just heard lots of whispers, that's a reputation. You've done it enough time for enough people that you just have a reputation for keeping your word, right? And a lot of people, especially in the small business space, especially, especially in their response space, all of a sudden, sometimes their cost to require customer goes up rapidly. And they're like, what's going on? What's happening? But the thing is, is that the CPMs in your industry haven't gone up by double or triple in that same period of time. So what is it? Is that your word of mouth, people believe in positive word of mouth.

9:44You think negative word of mouth doesn't exist? Negative word of mouth is like 10 times as viral as positive. And somehow you think that doesn't affect your sales. Of course it affects your sales. People who would have otherwise purchased choose not to because of something they heard or read online. Right? And so, one is, okay, so we've got reputation and we've got consistency. So, how do we do this? How do we actually operationalize this? Now, I've talked a lot about guarantees. I've talked about it in the offers book. All right? And a lot of people took that immediately like, oh, guarantees are the only way that we reverse risk.

10:15It's just one of the components. And I give that to people because I assume that a lot of people don't have a good reputation or don't have a reputation at all. or they don't have enough customers to really develop a process to become consistent. But these two things are how you deliver long-term risk mitigation. In the short term, you do guarantees. Now, again, and what's really interesting about this is that everyone assumes that I was like a guarantee guy, but like a lot of my stuff that I sell has no guarantees, right? But the thing is, is that there's four different types that I cover the book, right?

10:43The first is unconditional guarantees. When you're starting out, that's a great way to do it. Conditional guarantees. If you do this and it doesn't happen, then I'll do why. What's my consideration, right? What am I going to put on the table if you're going to put this money on the table? And a lot of times people mess this up. Guarantees only work if you have stakes. So if you don't have reputation, you've got to basically, it's literally like giving a payday loan. It's like you got to put, you got to take your watch off and be like, if you give me the money, I'll put the watch down, right? You can take my car if I don't pay this loan back.

11:12It's the same idea just in business. You're starting out. You're like, here's my shirt. if I don't deliver these leads or I don't deliver a great back massage or I don't deliver a good fitness experience, you can take my shirt, right? But over time, there's the first two. There's two other types of guarantees. There's implied and then there's anti, all right? So implied guarantees is one of my favorite types to use, which is just performance-based. If you're good at what you do, winners always want to compete at performance. Think about your best salespeople. They always want the most upside because they're good.

11:42And so if you're actually good, be willing to put, It's another way of putting skin in the game for you, right? And so just put skin in the game. And people are far more willing to take risk if you take some risk for them. So it's like, we've got this big pile of risk. How much are we going to eat down versus the customer eating down? Real quick, guys, I have a special, special gift for you for being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our Scaling Roadmap. It's breaking scaling into 10 stages and across all eight functions of the business.

12:16So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got HR, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages. Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes.

12:45And so if that's at all interesting, you can go to acquisition.com forward slash roadmap, R-O-A-D map, roadmap. Right. Now, here's the cool part is that you can shrink that pile of risk over time with reputation, which brings up the fourth guarantee, which is an anti-guarantee. which once you do have reputation and you are consistent, you don't see McDonald's saying, we guarantee that the burger is going to be good. You just know it's going to be good, right? Because you've had enough people. Now people are like, oh my God, McDonald's not good. Calm down. Get the point from a business perspective.

13:15All right. So that's vector. One is speed is how can we do whatever we're doing faster? Number two is risk. How can we do it more consistently? How can we do it more reliably? How can we, and in so doing, build our reputation over time and that consistency or reliability? How do I do that tactically? It's actually looking at as many variables that affect the condition or can affect the outcome for the customer as humanly possible. And then actually trying to control for all of them. So B.F. Skinner, famous behavioral psychologist said, if many variables exist, many variables must be studied. And so you might find out.

13:48So like for us to make videos, we have like a hundred different little golden BBs, little things that when put together, make a good video. And if we just do 98, it's just a little bit less good of a video. We do 97. It's a little bit less good of a video. And so we just try it every time we learn a little bit more. We add to that list. We have another condition that we didn't realize existed that mattered. We were just talking about one right before I did this video. So we did this big filming session where I did a walk and talk and it was hot outside. So I took my shirt off and I was doing it.

14:15It was in Florida. It was super humid. And that whole series of kind of like walk and talk things that I did murdered. It was like some of my, it was probably the single best recording session I've ever had in terms of performance of the clips in the session. So we're like, oh, walk and talks work great. So then I did another series of walk and talks where I'm just like in normal clothes because it wasn't, it was actually cold out. I think I put a jacket on. And so I put a jacket on in the second one. And literally, I think it might've been the actual worst recording session that I ever had. And so what we got to see there is that it wasn't the walk and talk.

14:47That was the thing that made the shorts valuable. It might've been me being shirtless, which I have other considerations for, which was like, maybe, maybe I'll start only Alex someday. Uh, but for now, uh, those are the first two speed and risk or risque, if you will. Now, the third one, um, is price. It's cheap, right? So you can be faster. You can be, uh, less risky or you can be cheaper. Now we have a fourth one too, but let's talk about this for a second. I'm always the, I tend to be the sell for more, more expensive guy, but you can win with any of these three vectors. If people absolutely know that your stuff's amazing, they'll be willing to pay more for it.

15:29And they'll come to you instead of somebody else. If you're the fastest, they absolutely will come to you over other people because you can deliver all these vectors of speed. If you're the cheapest, people will absolutely come to you. Like to pretend that price doesn't matter is silly. Of course, price matters. But so does value. Because value is a, sorry, the deal rather, is the comparison between price, what you pay, and what you get, right? And so something is appropriately cheap if you get tremendous value for a low price. But the answer is not hearing this and saying, oh, I will now lower my price.

16:04That is certainly a terrible decision. But instead, it's day one deciding our competitive advantage, the mode that we're going to build around is being cheaper than everyone else. And you have to start that way day one, that means every component of the business from click to close to delivered is organized such that you can pass on as much of that cost saving to the customer. And so for example, if you were like, hey, I want to start a marketing agency for small business owners. Well, in general, typically a pretty bad business. Why? Because it turns out really high. Their volatility reflects onto you with an exception.

16:41If you can make the services cheap enough, I have seen it work well, but I mean way cheaper than you think. I'm talking$100 to$300 a month for services that most people charge$2 ,000 a month for. When you can do that, now you have something that a lot of people are interested in so that even on their worst day of business, they're like, well, I'm not going to cancel that. Like it's, it's only a hundred bucks, only 200 bucks. And it certainly makes way more than that, even on my worst month. Right. And to the same degree, we, they basically, okay, if I want to do this, or if you're you like, okay, how do I actually build for cheapness?

17:15All right. So there's three ways that I think about this. Thank you. Thank you. Thank you. You guys are awesome. Uh, we had our highest month ever, uh, in terms of downloads for the podcast. And the only person that I can thank is you guys, uh, because you were the only ones who share this. and so I keep making these because you keep sharing them so thank you but if you know somebody you have an employee can you share it with you know your team on slack if you have you know a friend can you text it or you know dm them or if it's just something that you think you would want to share with your audience because it's something that resonated with you please put it on your on your gram on the ig or maybe on your linkedins or whatever it is that you like to share with your audience or maybe send it as an email why not let's get crazy it would mean the world to me and maybe it might mean the world to them.

18:01So number one is you can have AI, right? Day one. Now, a lot of you guys should be already be investing this stuff. Like for sure, AI is giving the best employees 10x the leverage they had before. And so if there's ever been a time to have to pay people better, it's been today because AI is now taking your best person and making it 10 times as effective. So it's like, why would you not like you're always like, man, if I could have 10, 10 Johns or 10 Daniels or 10, 10 Michaels, man, that would be amazing. It's like, well, AI is giving you 10 Michaels. And so be willing to pay the Michaels of your business more because you actually do get more from them now more than ever.

18:35So number one is AI. The second is I'll just say automation because I think automation for some reason has been forgotten about. There's still lots of stuff that can get automated that doesn't necessarily have AI, but you build day one with those automations in place. Now, the third is offshore, right, or nearshore. Basically paying significantly less for the same labor. but you're actually making this your entire business strategy from day one. We are going to win by being the cheapest. And if that's you, then you state that first and foremost in your marketing, in your sales. And what's really cool about it is typically when you're the cheapest, the sales are pretty easy.

19:10Marketing is not that hard. The difficulty is being profitable. But I've seen some tremendously profitable businesses that structure themselves from day one on being the cheapest. And a little tidbit, a little pro tip that I think a lot of business owners are going to miss out on. I think people are not getting this. If you do all this stuff, let's say you do the offshoring, you do the automation, you do the AI. You don't need to tell your customers. You can just have AI automation and offshoring into your business and you just sell a normal service. You need to tell them you have a bunch of VAs in the Philippines.

19:39You need to tell them that a lot of your stuff is from AI. Don't say, hey, we're an AI design firm. Just be a design firm and then charge the same rates or a good deal for design because you just have an automated backend. Great. Amazing. So that'll allow you to get more cash for the business and ultimately provide more value. All right. So three vectors so far. Speed. How do I do it faster than anybody else on the market? Risk. How do we do it more reliably and build a reputation better than anyone else on the market? Cost. How do we do it cheaper consistently and still be profitable than anyone else on the market?

20:08And finally, you have ease. Now, before I dive into ease, I want to make this point. If you just win on one of these, you could have an incredibly successful business. If you could do multiple vectors, then you'll crush everyone. Right. A quote that I like is the best for the most people for the least. And so best probably takes into account speed and ease and risk. And for the most, it's going to be like total number of people that helps. And then for the least. Right. It's like and I've had everyone was like unique, expensive, sticky air. How do I do something that no one else can do? How do I have it that they keep buying it?

20:40How do I have it that I have high gross margins? And how do I have it so it's over and over and over again, right? And so we think about these little monikers. I think about this one of trying to build a business because ultimately these are the ways that you win. These are the strategic modes. So people talk about strategy, but fundamentally it's going to have to ladder up to one of these things, right? So, so if you're like, oh, by the way, what's acquisition.com's, it's going to be this one probably primarily. And then I would say secondary vectors are these. We're obviously not cheapest, right?

21:05And so that's where I've built my business around. Now, if I had a different, now, not all the business, our portfolio are built that way, right? We have a teeth whitening chain that's more around speed, ease, and cheapness, right? And so you get like, you have to make sure that the strategy is best tailored to the customer avatar you're trying to serve. All right, let's talk about ease. So I want to make a big point about ease. If you want to make your product more convenient for customers, you don't make something convenient because we want to like, I want to do something to my product. It's actually the opposite, which is why I think most products suck.