The Truth About Long-Term Success | Ep 916

0:00And so you have to limit it to the thing that if you did it will get you the highest possible return which may just mean making your sandwiches awesome every single time. If we only did that, would our business grow? If the answer is yes, then stop worrying about everything else.

0:19Hey guys, this has been top of mind for me for a minute now. I've had, I'd say over the last few weeks, I've probably talked to 20 or 30 business owners for extended periods of time that had this same problem. And the interesting thing about it is it's not something that you know is only for big businesses it also applies to smaller businesses it just applies throughout your entire entrepreneurial journey and I have to remind myself of this principle and how to apply it every single day so I think you'll enjoy it and I think if you actually follow the steps I mean I think you'll be very happy with the results the reason you're busy but still broke isn't because you're not working hard enough it's because you're working on too many things at once.

1:02In other words, you're working the wrong way. And so back when I was running my first company, I was working 16 hours a day, basically just all the hours I was awake, but I couldn't get past$3 million a year. And it wasn't until I learned a different way to channel my effort that the business finally reached critical mass and then took off. And so by the end of this video, I'll walk you through how you can figure out how to channel it into a specific opportunity vehicle, how to pick that vehicle, and then ultimately how to get past that point that snowballs where the business starts working faster and faster.

1:34And so before we dive in, I want to give you a little example of this. So I'll give you a biological example and a social example. So biological example, let's say that you've got a magnifying glass and you want to burn a hole through a piece of paper, right? You've got this piece of paper here and you want to burn a hole through it. If you don't get the magnifying glass at the right distance, You're just going to have a circle like this, but it's just not concentrated enough in order to burn through. You have to get that sweet spot so that you can get that tiny little hole and then all of a sudden it breaks through.

2:06But that's only when you can concentrate the light. To the same degree, let's say that you want to start a party on a Friday night. But instead of starting one party, you say, hey, I want to have four parties on a Friday night. Now, if that were what you were going to do, you might be like, man, none of my parties worked out. but it would be obvious to you now when you thought like, why didn't my parties work out? It's because you never got enough critical mass. Because if you combined all of the people and all the people you're going to invite at one party, that party would then take off and then become a party in and of itself.

2:37And so this idea is basically what you're spending all your time on. You only have a certain number of people in your network, only a certain number of people that you could potentially contact to leverage to do deals, to get your help from, to help work for you, all of those things, but you're trying to start four parties at once and wondering why none of them's working. And so the reason this happens is because entrepreneurs get reinforced the first time they quit something and change stuff up. And because you got into the game of business by quitting something in order to be here and something worked, that's why you still keep doing it.

3:09But the problem is you got reinforced for starting two parties. Your first party was maybe your job. The second one was like, you know what, I'm going to stop this party and I'm going to start my own. And then all of a sudden you're like, man, that was awesome. I'm going to start more parties rather than realizing that just going from one to the other, this became a better vehicle and starting parties on your own was the better vehicle rather than starting parties in general. And so because strategy, if you're like, well, what is, what is this all, what does this all mean? Right? So there's this really fancy term that people throw around in business and they say strategy a lot.

3:38And I, I always like to ask people, what do you mean by strategy? And then they just make up a bunch of words because they have no idea and it just sounds good. Strategy is this. It's the prioritization of limited resources against unlimited options. It's how you choose what you're going to do and what you're not going to do. That's what strategy is. And so right now, if I say, hey, what's your list of priorities? If you say, okay, number one is, you know, I've got priority one, priority two, priority three, priority four, I can already tell you that you don't have priorities because you have more than one.

4:08And so when we get back to like, what is a priority? So priority, like if you actually break the word down, it comes from priori, which means first, right? And or before others, which means that you can only have one first. That's how priority works. Now, in the 20th century, people started saying priorities, which then basically neutered the term altogether. But if you go to the root of what it was supposed to mean, it means this comes first. This is the most important. And so right now, you're struggling to focus your resources on one party, focus all of the people you know, focus all of your promotional effort to get everyone to do one thing because you're trying to promote four.

4:49Because you're trying to have four parties, four priorities, and because of that, you have none that actually work. And so I'll tell you a fun example of this. So I had a really lovely lady, Kira, came to one of our events here at headquarters. single mom of five had a publishing business. She had a TV show, she had an events business, and she had like a business coaching business for women. And she was doing pretty well, you know what I mean? A few million bucks a year. But the thing is, is that when you, when I see an entrepreneur like that, I just think, man, you have, you know, three or four mediocre parties.

5:23What if you actually had all those people partying together? It'd be so much bigger because then that word of mouth effect would snowball far bigger than what you had before. And that's why sometimes it feels so hard because it's like when you're starting tiny parties, it's all manual effort. It's all brute force to get those first people there. Right. But then after that, at a certain point, the word of mouth starts growing and it starts to become a thing. You start to develop a brand. You start to develop a reputation. But when you start four parties at once, it never gets there. It's like, all right, well, how do I do that?

5:52In the micro, people are like, OK, I need to be more productive. But let me give you the biggest productivity hack in the world. Do nothing besides the task that you set to accomplish. That's it. Anything that is not that sentence is not making you more productive. If it's not you doing the task, then you're not doing the task. And I think people have come up with productivity as creative ways to procrastinate while not feeling guilty about not doing the work they know they should be doing. And so focus means doing nothing besides that, that you're focusing on. commitment is the elimination of alternatives deciding is de cadere means to cut off and so if you're thinking about all these words you're like man they almost all mean the same thing yes so just because there's lots of words doesn't mean that the meaning is fundamentally different just way of different cultures that meld into you know our word lexicon but a lot of people will try and make each of these sound nuanced it's the same thing you need to cut off what you're not going to do.

6:50And then what remains becomes your priority. The most important decision is what is that thing that remains? Because the people who move fastest in life don't actually move faster. They get more for every move. They have higher leverage. I want you to go through this process with me. So right now you have your priorities. I'm going to put this in a little quotes here. All right. And let's say it's like, you know, increase, you know, ads is one of them. You know, the second one is like, you know, add new product and then it's hire, you know, salesmen, whatever. You've got these things that you want to do.

7:28Now, if I were to ask you of these things, if you just had 100 % certainty that you could accomplish one of them one year from now, which of them would get you the furthest? Now, when you look at all these, you might be like, well, honestly, even if I were to crack the new ads, I still need a salesman. And the new product is, you know, important. But if I don't have a salesman to sell it, then I can't do anything. It's like, okay, so then everything you have comes down to getting this done. And so this is now your priority. You can ignore everything else. Because until this happens, nothing else matters.

8:10Now, I gave two examples that were contingencies? What if there are things that you could do in parallel? Like, well, what if I start to develop an app so that by the time I have my salesman, then I'll have something to sell? Well, the problem with this is, this is just in my experience, is that like the parties, there's limited resources. And so I find that people actually do things faster chronologically or linearly than in parallel, especially when it's when you're focusing all the resources of a company on one specific point. Because if you know that you can only do one thing with all of your resources, guess what?

8:43You get it done faster because you have so many other things you have to do. Because every single person feels like they're holding the entire company back, which they are. But what happens when you pursue multiple things is that no one feels like they're holding the entire company back and then nothing gets done. And so this is why you feel so busy. You're trying to host all these parties at the same time. So let me explain why it's actually keeping you broke. What you have to realize is the real cost of change. So let's say that this line represents your normal revenue in the business, okay?

9:14If you do a change in the business, then you're almost always going to incur the cost of change, right? The business is going to go down. My estimate is that whenever we do something new, we lose 20 % right off the bat before we get to realize any potential, not guaranteed, upside from that change. And so what's interesting though is that many entrepreneurs hear this and think, okay, well, I'm willing to risk this 20 % decrease because maybe I'll get a 10 % increase on whatever, on the other side of this. It's like, yeah, but for you to get, do you want to have a guaranteed 20 for a potential a 10?

9:54It's not a trade I would make. And so what ends up happening is that you end up realizing that the vast majority of tests you just shouldn't do. It's like, it might work and who cares? It's not going to change the business. It's not the constraint, right? Like maybe we have some little CRO hack we could do. Sure. Is it the thing that's stopping you from getting the three to 10 million? Probably not. And so what happens is these are just productive distractions. The amount of people that I know that, and I'm not saying split testing is necessarily bad. I'm saying that if this is, if you're trying to optimize your way to a 10X, you've got it wrong.

10:26You're focused on the wrong thing. So after the 20%, then it means that number one, if you're going to take a shot, it's got to get you at least 20 % plus as your upside because you might not even get it. And so for me, this is my rule of thumb. I need at least a 20 on the top side so that I'm willing to take a guaranteed 20 on the downside. That's number one. Now, number two is let me show you what it looks like in reality. There's two scenarios. Scenario one is that, okay, maybe the thing that we have starts to work, right? So our performance starts to go up. But then right around here, we're like, you know what?

10:59Let's do another change. And so we have these changes that could work, but we're always mid another change. And so actually our performance is more here versus what it would be if we just changed nothing. Now that's if this is under the assumption that all the changes you have are going to improve the business. 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 ten stages and across all eight functions of the business. So 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.

11:42We 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. And so if that's at all interesting, you can go to acquisition.com forward slash roadmap. R-O-A-D map. Roadmap. But what if you're changing things and some of the changes you make actually make the business worse?

12:20And so this is when I see these people who are stuck at a million dollars a year, $3 million a year,$10 million a year, and they've been stuck there for multiple years in a row. It's typically because they're changing too many things and because they're working on the wrong thing, right? And because they're changing so many things, they never have the bandwidth. They're starting too many parties at once to just focus on the one party that if they can crush it, they can get on the front page of the news, right? And so I had a business that came out here, really awesome lady, and she had been stuck for a while, right?

12:46And so the issue is that she was starting too many new things. Basically, she was always running new marketing promotions and starting new conversion mechanisms because that was the thing that she loved the most as an entrepreneur. She just loved selling. So she always wanted to innovate the sales process, but the sales wasn't the constraint of the business. She's really good at sales. And so despite it being the thing that she enjoyed, it had nothing to do with the thing that was limiting the business. And when I talked about the thing that were clearly limiting the business, I could see her energy deflate because she was just like, oh, I'm not good at that.

13:18I have it outsourced. And I was like, yeah, it shows. And I was like, said differently. And she was like, I pay this person$3 ,000 a month to manage my organic, manage my organic, right? I was like, okay, imagine you paid someone$3 ,000 a month to handle all of the pitching because she does pitches like one to many. I said, do you think that it would work? And she was like, God, no. And I was like, right, right. There were people who were as good at you at making content as you are at pitching and you need to be that good at also marketing on the front end. And so the issue was that she never had the bandwidth to even do this because every single month or two, she was changing the conversion process, right?

13:57Thinking that this is the thing that was limiting the business. But the reality is she converted about the same amount every time. And she just had to keep working harder and harder because she was getting fewer leads. And so she was getting better and better, but she was focused on the wrong part of the funnel. Like the thing is, is you can only convert 100%. You can't get past 100 and you're never going to hit 100. And so the problem is we need to get more people in the bucket, right? And so for her, every time she did this, her team would have to relearn new systems. Her customers might get confused about her positioning because it was a whole new wrapper around her sales process and even her product itself.

14:28She would start losing momentum because she had these constant changes that were happening. And so I'll tell you, for me, when I look at all of this stuff, and this is when I was talking to her, I said, you just have to accept that some stuff is good enough because it's not the constraint. This is counter to the perfectionist culture of like, everything has to be perfect. First off, nothing's going to be perfect. And there are, and I love Jack Dorsey said this, he said, make the details perfect, limit the number of details. This conversion process, was getting this conversion process perfect the thing that was going to unlock the business?

14:57No, no, it's not. You either have to have a product that's so good that people talk about it endlessly, and then that's what grows the business, or you have to have marketing that's so good that you let everybody know about your stuff. And many people obsess about the stuff in the middle, but on either ends, that's where the highest leverage exists. So what does this mean in practice? If the metrics that you have for the thing that you love are above or at your industry benchmark, leave it alone. It's not the thing that's limiting your business because you need to free up all that bandwidth so that you can actually learn the new skills or focus on the thing that really is limiting your business, which is probably the thing you suck at and you don't like doing and you outsource.

15:40And so this is the cruel reality of small business is that small business owners tend to have the most ideas of things they can do, but small businesses in general have the lowest capacity to pursue new ideas. And so you are so resource constrained, like you have so little time and so little effort and so few people and capital that you can actually do anything, especially if you want to do it right. That the best hope you can possibly have if you really want to compete is to just do one thing well. I'll give you an example of one of my favorite chains, which is Raising Canes. And if you want to really study business, like study Raising Canes.

16:22The owner owns all of them. He has no franchisees. He owns them all. The guy's a decabillionaire and he's not that he's not old. He's I think he's in his 40s. He's a savage. And part of the reason that chain has been so successful is because he was so militant about the few things that they were going to do well. It's like we've got our fries. We've got Texas toast. We've got coleslaw. We've got tenders. And they've got sauces and beverages. That's it. And if you want to have a sandwich, they just take the tenders and they put it between two pieces of Texas toast, right? Like they just take those few ingredients because they're like, if we just nail this, we don't need to do anything else.

17:02And I really want to, I want to, I want to hit on this really hard. If you can think to yourself, if all I did was this, nothing else would matter. Then why are you letting anything else matter? And the tough part is that many of your ideas are probably good. It's just that they will fail because of a lack of execution, not because of a lack of quality ideas. And they will all fail if you try and execute all of them. Yes, including the one that you love that you're thinking about right now as I'm saying this and you're thinking, oh, I wonder if he's talking about that. Yes, I'm talking about that.

17:31And so I'll give you a couple examples for me personally. Even at a micro level within a business, I had a shorts editor who was a good editor. And then we had him focused on two different platforms and both platforms suffered. When we focused him on just one platform, all of a sudden the views from that one platform got more than the views from both platforms that when he was working on them split. Think about how wild that is. He was able to get one, which he had already been working on, to do more than both together when he just focused on one. The second is we have, you know, every month we invite entrepreneurs out here to the headquarters who are doing big things.

18:03And that way we can meet more businesses. And when we have these events, my team always thinks about things that we could do better. And so we made this rule where we said, hey, what if we do nothing new? Zero new things. Just execute all the things that we know that make an event good. Nothing else. And we did that. And then four times in a row, we had the best NPS, best everything score from the event. And I was like, right. Every time we change things, our NPS goes down. Don't change anything. Everyone loves it the way it is. The thing is, is that you will get tired of your business before your customers even know anything about it.

18:38Because remember, they have zero context. You might think, oh man, we did this one thing that one time and we didn't do it this time. No one knows. No one knows. Real quick, guys. Thank you. Thank you. Thank you. You guys are awesome. This podcast continues to grow. We had our highest month ever last month, which is huge. And we don't run ads to grow the show. It's just you guys. It's just you guys. And so if this podcast provided you value, if you could text it to a friend or you could send it on Slack or share it on your Instagram, that is how this podcast grows. And that is why I continue to make them.

19:08It's because of you guys. So thank you guys first and foremost. And if you have it in your heart, there's somebody who could use this, then please send it. Lots of love. Enjoy the rest of the podcast. And so hopefully now you understand how changing everything is limiting your ability to win. And so the question then is, okay, you know, following my own rules, don't just say stop doing this, say do this instead. So here's what to do instead. Have patience. Now that sounds super lame. So let me tell you what that actually means. So patience is just figuring out what to do in the meantime. And so I'll tell you for me personally, I make a big list of ideas.

19:44And it is like, just name it something ridiculous so that you can remind yourself how ridiculous you are for always having these ideas. Which is, I have this mondo. And I'm talking like, I probably have 200 plus items of ideas that I have of things that can make money or would be improvements to our existing business or process. us. And what's interesting is that whenever I think of these ideas, I'm like, it becomes the most important thing in my life. And I just want to stop everyone from doing what they're doing so they can hear my idea. But the thing is, is that every time I do that, I just end up breaking everything in the business and completely distracting my own team.

20:16And so I had to develop the system, which is I put the list together. And then what happens is every once in a while, I can notice that the team has some bandwidth. And then at that point, I go back to my gigantic list. And interestingly, many of the ideas that I was very sold on, I'm like, oh, that was a terrible idea. But in the moment, it felt like an amazing idea. But I'm like, oh, I can find five reasons why that's not going to work. But if I have an idea that just I can't shake for months on end, that is when I say, okay, this is an idea worth pursuing as maybe the next on this list when we have bandwidth.

20:48So this is actually my list. So I have, you know, AI stuff we can do, traffic stuff we can do, conversion rate stuff we can do, LTV stuff we can do. These are all tests that we can consider. These are ascension ideas. These are renewal ideas. I see them and I'm like, man, these are such good ideas. And right now we're not doing any of them. And the last time I grabbed something from that list, you guys want to know what it was? I think I've grabbed, in 18 months, I've grabbed three things from that list. And I probably have more resources, capital and talent than the vast majority of businesses have.

21:23And I say this to demonstrate how incredibly hard it is. Because if you just made one sandwich and it was the best sandwich in the entire world, then all you would need to do is just keep making that sandwich. And as much as you'd be like, I'm so sick of making this sandwich. It's like, but the world isn't. Think about how much has Chipotle changed their menu in 20 years? They've maybe changed two things, three things in 20 years years years two or three things now how many times do you think people have been like hey have you guys considered putting queso right like have you guys considered it's like yeah they thought about it they thought about it but they didn't because they know that we could also just not and so one of my big running jokes that i have with my closest friend dr cashy is we call it the undefeated heavyweight champion of the world which is doing nothing it's like or we could, you know, undefeated heavyweight champion of the world, do nothing.

22:15And so I will get through these things. I'll beef up this whole idea and I'll be like, or we could just keep making money doing what we're doing. And I have been so rewarded for that, that it has almost become a running joke for me. And so I'm trying to transfer this to you as fast as I can, because if you want to take a little season, let me give you a little, a little fun tactic. You have seasons of no externally, right? which is, you know what, I'm not doing anything social. I just got to lock in and work. Cool. You can also have seasons of no change. That means no new tests, no new ideas. You're just going to execute.

22:48And what's really crazy, and this is nuts, you will feel so much relief because you will realize that much of your anxiety and your stress comes from this list that you have created for yourself that you have not done. And so all you do is you basically take your entire our to-do list and say, this is no longer my to-do list anymore. I'm just going to take the things we're already doing and we're going to do them well. And I promise you, you will make more money and that will depress you because you will realize that the biggest problem in your business is lack of execution, not lack of new ideas.