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Relinquishing Control: The Path to Growth and Success (on The Game Changing Attorney Podcast) Pt. 2 - July ‘23 | Ep 606

October 28, 20230 comments♥ 0
00:00You're not going to build like the massive, massive fortune unless the thing you sell is good.And so what happens is most entrepreneurs are promotional promote too soon.And then they have to fight this uphill battle for the rest of their existence.Welcome to the game where we talk about how to get more customers, how to make more per customer,and how to keep them longer, and the many failures and lessons we have learned along the way.I hope you enjoy and subscribe.Are there particular things that you see?I mean, just even looking like at an entrepreneur's calendar where you're like, okay, well, that, you can tell right away,
00:31okay, this is not optimized or the focus isn't in the right place.Like what types of things stick out?Well, the single commentary that every entrepreneur has to get over, over time, is relinquishingcontrol.So entrepreneurship is a continual giving up of control at all levels.And so whatever they're doing is usually the thing that they need to be able to give upand transfer to somebody else in order to get further and further above the businessand get more leverage.
00:55And so in the beginning, you have to give up delivery or you have to give up sellingor you have to give up promoting.have to give up something or administrative tasks.And you look at your calendar and you say which of these things is most easy to replacein the marketplace and is the cheapest one that I can replace.And you replace the first one that gives you the most time for the least amount of money.And then you're like, great, now I should fill my time up with the thing that makes me moremoney.
01:17And fundamentally, that is the game, is you just continue to trade up the time until you havebought all of your time back and then you can just do all the highest leverage activitiesand leverage just being defined as getting more for what you put in.Yeah.Now, this is a concept that I think when people hear it, they probably will nod along.And yet, you and I both know this, I think so many entrepreneurs struggle with it and struggle with that relinquishment of control.No one can do it as well as they can.No one can do it quite the way they do.
01:41What's the answer there?Like, how do you get somebody to the point where they actually start doing it?Confidentation.This is why you're poor.Like, we can, I mean, you can keep doing what you're doing.It's just you're going to keep getting what you're getting.And so the question is whether you want to keep getting what you're getting or you're willing to change something.I mean, it's the same as somebody trying to lose weight saying, I want to keep eating the same diet, but it might look the same.
02:02You're like, yeah, so you have a diet of time that you continue to eat or let something else eat your time every single day, and you expect the outcome to live different. It's just not true.And so I think just a very logical breakdown where someone just has to, you have to confront it. You have to confront reality. And a lot of entrepreneurs are delusional. Sometimes it's a good way. You know, you have to be optimistically delusional in some in a certain capacity to be an entrepreneur. But a lot of times that delusion takes control and they believe the false statements that you just said, right? Which is like, no one can do it like I can do it.I'm irreplaceable, et cetera, et cetera.But like every single human on planet Earth is replaced in 100 years.Yeah.And the likelihood is that if you were doing it and you're also doing other things,then somebody doing full time what you're doing will be better than you are.And I can virtually guarantee that 100 people doing full time what you're doing are going to be better than you are.
02:46So a little side quest here.A lot of entrepreneurs learn the wrong lessons from experiences.So we talked about having experiences earlier, right?And you make the lesson, et cetera.But the thing is is that most people learn the wrong lessons.So I'll give you an example.A small business owner hires the first salesperson.They're like, I'm going to give up control of sales.
03:03I'm going to give it to this person.They're going to start selling.And of course, the person takes.Okay, because they also don't know how to hire, manage, recruit, train salespeoplebecause they don't have that skill set yet either.But they bring this person on, the person fails, right?There's lots of lessons you can get from that.But one lesson that's common is that salespeople don't work, right?
03:19Or no salesperson can sell like I can.Right?And so then, as soon as they have that belief forever, until that belief has changed,they will not make more money.And the thing is,there's a lot of those salesman beliefs at every single level of entrepreneurship.But the correct lesson is phrasing the thing that didn't work as deficiency personally,which is, okay, this salesman didn't work.
03:41I do not know how to and then insert the problem.Recruit, hire, trained, manage a salesperson.Great.That's solvable.Let's go solve that.And then that is the process all the way up.But you have to admit it.It's like AA, right?
03:57You got to admit you have a problem.And until they do, and that's where the human is,comes into play. And that's what that's what plateaus. Many entrepreneurs say they cannotadmit that anyone else could do a better than them. And most people would do a better thing.And I think it's a much better belief. They're like everyone could do everything better thanit. It's great. I'm not needed. And that's the point. You want to own the business, not havethe business on you. It's interesting. So many entrepreneurs I meet, I don't know if thisdirect correlation exists, but it seems like the more successful they are. I mean, when you
04:23really start getting up there eight figures, nine figures, ten figures beyond, it's like you startto see greater levels of humility. And I wonder if to an extent, and this is anapply to everyone, but it's always striking to me how someone can still have ego if they havebuilt a business from nothing and just the humbling process of even building an organization,the lessons you have to learn, how, you know, just the challenge that you experience, the pain,you know, in many cases, to come out of that with ego, but yet the ones that know all the answers,have it all figured out, no, I'm good, I already read that book, I already, you know, I already heardthat, like, they're the ones that seem to be struggling the most.
04:56I agree.I also think that you can have situational.ego. So, because there are definitely some very wealthy people who are very successful who do haveegos who are soft made. I can attest to that. There are. There are also many, many, many who are veryhumble in general. But I think it's also domain specific. You know, you can be humble,humble with business and arrogant with women. You can be arrogant with your physique, but humble.You know what I mean? So I think, I think it's much, it's a little bit more nuanced overall.That being said, there's totally people who are arrogant in everything they do. But I do think
05:26that it's more domain specific. And even within the business, somebody might have it even,ego around how good they are at marketing, but not an ego around how good they are at HR, right?And so it really comes down to how do they associate their self-worth with something?However close the action is to the association they have with their identity and their worth,the harder it is to peel away from their grip.Like a lot of entrepreneurs who are promotional or product-driven entrepreneurs don't have anyproblem outsourcing finance.Like, it's not like they don't have a huge thing with that, right?
05:57but they have a huge problemif someone wants to take over productor take over promotion or whatever for the businessand so it's because they just derivetheir soft worth from thatand so that's why a lot of the entrepreneurshipis a head gameyeah and I'm curious
06:11I mean now with Acquisition.comand by the wayjust at the time when you were launching that companyand starting it, how much was the domain by the way?Was this like a big investmentjust to get the domain or was it just?It's 370,000.Okay, okay.
06:25Obviously at this point it's been worth itbut what was your visionfor Acquisition.com.I wanted to be the family office for, you know,Lela and I to invest our capitalinto businesses that we believed inwith founders that we thought were awesomeand products that we believe,
06:39you know,we're going to help people.And so that's more or less what we've done.And the whole idea was,I wonder if we can build a personal brandwhere people would listen to our contentand say, hey, I want to work with these guys.And so what happens is the goal
06:51was that it would create somewhat of a pre-filtering processfor values.Because if you can get values alignment,it's kind of like the marriage thing.Like if we have similar mission, similar values, it's a lot easier to get along.That was a theory.I didn't know if it was going to work, but it certainly has.We get a lot of companies every day that reach out to us that, you know, we're looking for investors to either buy, you know, a minority or majority stake in the company to help them scale, which is very much what we do.
07:14So we are active in our portfolio.So our, that's where we make our money is actively growing the companies themselves and recruiting in great people to help scale the businesses.And it seems like this is kind of like a forever venture for you.And in many ways, I mean, obviously, you love building businesses, but this gives youa way to scratch that itch in so many different industries and verticals.So the best businesses have a compounding vehicle built into them.And most businesses don't, which is why most businesses are not the best businesses, right?And so you can have a compounding vehicle in terms of capital, as in like, there's an
07:51allocation of capital that exists within the business, like every time we over.open up a new facility. We get 50% on our money. And so the question is, how many times can we open upnew facilities? Like, that would be an example. If we have customers, let's say if it's a nationalthing rather than, you know, brick and mortar locations, if every time a customer comes to us,they bring another, you know, 1.3 customers, then we know that over time, in matter how big we get,as long as we retain the quality of our deliverable, we will get more and more people who willcontinue to come to us. The other way to do that would be you have people who always keep sellingfor you. So even if you're, let's say you sell solar, right? It's transactional. People aren't
08:28really going to get a second roof. But if you as the business owner know that every salespersonbrings you two roofs a month, then your compounding is on the actual salespeople themselves.And so you go from having two people who get you two roofs a month to eight people to,and every month you keep bringing them on, and then they become a consistent production, but the numberof salespeople compounds. And so those are the only ways to build forever businesses. Those are thetypes of businesses that we were interested in is, in 30 years will this thing be massive?And if that's true, then all we have to do is wait.Yeah.
09:01And it seems you're especially passionate about great products, products that, you know, do a great job to almost, they do the marketing for you, and then ultimately scaling through customers, customers referring other customers.It's easier.I mean, so it's selfish.It's just, it's a, it's the lazy man's way of doing it.It's long-term lazy.It's short-term effort, but it's long-term lazy.because think about this way.I could spend two years perfecting a book, right,
09:28and making it amazing and really putting, pouring my heart and soul to it.And then after that two years, release it.And then for the rest of time,have people who buy the book tell other people about the book.And so I spent two years,but then from that point going forward,customers market everything for me.And everything that comes in off of the book is profit, right?
09:47The flip side is that I spend two months writing a book that's decent,but not great, and then I have to spend the rest of my life promoting it.And then in so doing, I also get lots of people to find out that I have a mediocre book.It just makes less sense.The thing is, is it just takes so much more time to front load that effort to make an exceptional product or servicethat most people aren't willing to do it.And so most people's products, like the real big, obvious answer of why people don't make more moneyis they're just not that good.
10:15And specifically from an ego perspective, they're just not as good as they think they are.So how do you, I mean, is there a balance or how do you know when something is ready?Like potentially if you're trying to make something perfect that can, you can run into procrastination.I'm seeing this right now.I'm working on a second book.I didn't know, I didn't know anyone to read the first book.It turns out a few people read the first book.So now I'm trying to make the second one, you know, even better because now like, okay, people are going to read this thing.
10:38I know you're working on your next book as well.At what point do you know, okay, this is ready?Oh, when for me, there was nothing left to do.Like anything else that I would add or subtract to it would make it worse.Now, that's not always the case.You know what I mean?Like, a book is a very defined, literally has bookends, right?There's beginning insinette.
10:55But if you have a software product, for example, I share those more from a conceptualperspective as an ideal.But like, the idea is to have a consistent cadence where you're improving the producton an ongoing basis, right?And so, but the thing is just front-loading that.Because until you have the product market fit, until you have a certain percentage ofpeople who are bringing their own friends to try your thing, it's still not right.So what ends up happening is that especially if you have a promotion driven entrepreneur,
11:22so somebody really understands how to market and sell, this is where, I don't want to say it getsdangerous. It's just that you can make a few million dollars, $10 million being really goodat marketing and sales. And so you could become a multimilator doing that. It's just you're notgoing to build like the massive, massive fortune unless the thing you sell is good. And so whathappens is most entrepreneurs are promotional promote too soon. And then they have to fight this uphillbattle for the rest of their existence. And the thing is, it gets reinforced because they get betterand better at marketing. And so they market more and more and more and more. At some point,especially if it's like D to C, so like, you know, directing and same work products, you go into
11:57colder and colder audiences who are less and less likely to buy your thing. And so your costto acquire continues to rise over time because also advertising costs only go one way,which is up, just the cost variable. And so you've got multiple forces that are going againstyou that are decreasing your profitability. And unless you have a concurrent force or somethingthat's going in parallel with that growth, which is your customers bring you other customers todecrease that cost of acquisition, you eventually hit a plateau where you can do lots of revenueand not a lot of profit and you can't grow from there. And that's where sometimes you have to havehard conversations with an entrepreneur and be like, this thing just isn't good enough. And we need to
12:29maybe dial back a little bit. And so like the original idea of getting your first acquisition channelgoing, whatever it is, is not to then scale that. The idea is that you get enough customers in that you can getfeedback, continue to improve the product. And then once you get enough people referring and bringingfriends, which is my litmus test for it is good enough, then you scale it. Now, you still consistentlywant to make it better and better, better, absolutely. But a litmus test is, am I getting referrals?Once you have that, then all of your marketing efforts from there on out, are going to be enhanced.And then that's what's going to allow you to outcompete your competition who wasn't so long-sightedand always just wanted to make the next buck. Real quick, guys, if you can think about how you found
13:06this podcast, somebody probably tweeted it, told you about it, shared it on Instagram, or somethinglike that. The only way this grows is through word of mouth. And so I don't run ads. I don't dosponsorships. I don't sell anything. My only ask is that you continue to pay it forward to whoevershowed you or however you found out about this podcast that you do the exact same thing.So if it was a review, if it was a post, if you do that, it would mean the world to me and you'llthrow some good karma out there for another entrepreneur. Speaking of competition, how do you viewcompetition? I mean, I remember you mentioned the story of the gentleman that kind of screwed youyou over early on, although at this point, you know, I almost feel sorry for them, right?
13:40Because if they kind of hung in and things have probably gone much better for them, just seeingyour rise, but it seemed like you never were vengeful about it. You know, you always just hadto move forward. And I imagine just in your different businesses you've had, your dealings withvarious competitors. Some say, you know, the steeper the climb, the, you know, the sharper the knives.Like, what is, what's your thought on competition? So, you know, one, I love this quote. I think the firstI heard it was from Rick Warren as a pastor. He said, uh, anger is like tricking poison and hoping the otherperson dies. And so it's just like, it doesn't serve you. So many times, I think many of us have hadthese experiences where you just obsess about being angry as someone and
14:14how could they, how dare they?And most of anger comes from ego.Go back to the humility thing,which is like I just,you fundamentally think you deserve better, right?If you don't think you deserve anything,then a lot of times it can diffuse a lot of the situationsbecause you're like, well, in 500 million years,
14:29it's probably won't matter.And if you scale out wide enough,the earth doesn't look like anythingbut a speck of dust or even you can't even see it.And so it just gives a little bit of perspectiveon like how much does this really matter?From a competition perspective,there's an obsession with small business owners
14:43around competition.and I would say that like most small business owners look at other small business owners and see them as competition, but like they are not competition.Usually both people just have shitty products, which is why they have small businesses.And so I would say obsess over your customer is not your competition, the competition takes care of itself.And as an aside, it's interesting because again, this is kind of a more of a small business owner perspective, but like the private equity in the investment world, if they see three companies that serve a similar avatar, they just buy all three and combine them.And so, like, as much as you might have a blood feud with this person, like, the person who's a level up from you just sees it as three different cultures that serve the same avatar with slightly, you know, slight differences.And then they merge them into a much bigger company that has, you know, obviously doesn't always go that way.There's cultural differences, blah, blah, blah, et cetera.
15:30But I think just seeing it like that, I've seen so many competitors who, like, you know, wanted to kill each other.And even in the gym launch world, there was a guy who was, he considered himself to be a competitor of ours.and I reached out to him and he thought that I had some ill intentand like now we're decent friends.And he's like, I always hated you.I was like, I didn't think about you.It's these one way, you know, like obsessing over thingsthat are having only in the entrepreneur's mind.
15:55And I think that that is the biggest cost of competitionis the obsession over whatever else is doingrather than taking that same obsessionand applying it to your customers and that would make you more money.Yeah.I've heard you say like I know a lot of this is a mental gamepeople thinking about, well, what's someone going to think of me?What are they going to think of my decisions, my choices, if I do this, if I go left, if I go right?
16:14And I think you said something along the lines of, you know, one day you're going to pass.It's, you know, there's going to be your funeral.And then, you know, there's going to be people who don't make it just because something came up that day.Yeah.There may people who want to eat, people who are arguing over who gets what.Most of the people that you met your entire life aren't going to make it.And so like, and I mean, it's kind of like, I mean, I made this tweet and it would really viral.But, you know, the Queen of England died, I think, like eight or nine months ago now.
16:38you know, she amassed more wealth than 99.99% of the population.She was a monarch for 70 years, which has to be close to a record.She did it as a female, which is even more amazing,from the times that she came in to power and whatnot.And whoever's listening to this probably hasn't thought about the Queen of England.And she was, you know, one of the old-time goats of just like success,if you want to define it that way.We're so self-centered that we assume that everyone's going to cry when we die,
17:02but most of us won't even be remembered for six months.And so I think we have all this irrational fear around taking bigger swingsdoing the things that we want to do, making whatever dreams we have real or at least giving it a shot.We play these videotapes in our minds of these future scenarios where people who aren'tthinking about us are saying things that they're not having been thinking because they don'tcare about you and they think about themselves. And so it's like no one's thinking about you.And I think getting over yourself is a really good way to be able to have more personalfreedom in the choices we make and take on big risks. Yeah. And I want to get your take on
17:34AI. I know you've posted a bit about this. I want to get your perspective now.I think when you posted one time it was about chat GPT3 and now we're at GPT4,maybe we'll be on to the next one soon enough.Like, how do you think, I mean, if a lot of people listening to this podcast,they're running a law firm, professional service-based business,like how do you think it'll impact those types of businesses?It will.It will impact those businesses.
17:56I'll just say my two cents, which is the people who will win.I mean, this isn't even my quote, but like you're not going to get replaced by AI.It'll get replaced by somebody who knows how to use your AI better than you.And that's like the short to medium term.I mean, AI is scary, man.I think it's a big black box.I think humans are definitely bad at predicting outcomes.I mean, even if you had asked two years ago, which jobs AI is going to take first,
18:17people would have said blue collar would have been, you know, drivers, laborers, et cetera.And it actually went all the way to top to the most creative jobs.It went to, you know, video and images and design and text.And so I think we're really bad at predicting what's going to happen.From a risk-adjusted basis, you know, the investment feels not worth it.And I know that that's really contrary.I'll say it this way.is like, AI has the possibility to really amazingly improve humanity,
18:40and we know that technology does not change our subjective well-being one bit.So we're just as happy and unhappy as we were, if anything,we're a little bit less happy with more technology.And all the downside risk is all humans are gone.And so the upside is we're just about as happy as we are now,and the downside is we're all not here.And so for me, if I were just to look at it from a risk-adjusted basis,I probably wouldn't make that bet.
19:02That being said, the cat is out of the bag,and now we have to play the cards for belt.And so I think for everybody who is listening, it would behoove you to spend your weekendslearning how to prompt engineer, staying up to date with the new plugins and overlays and auto-GPTand all these things that are coming out.Because if you aren't, your competitors are, and the thing is the scale and speed of theseis so robust, it will be able to compress progress that used to take years into weeks.And so if someone has a little bit of an edge, it might be a lot of an edge really quick.
19:32So don't sleep on it.Yeah.Yeah, I think it's the rate of improvement that's in almost like the unchecked rate of improvement.That's either the most exciting or in some cases the scariest aspect of it.And yet, like you said, I mean, the cat's out of the bag.At this point, it's, you know, it's here and just learn to leverage it.What about any other skills that you believe, like, just are valuable for people to develop?I think having the mindset that character traits that are desirable are not actually traits, their skills.
19:59Because if you were to say, like, somebody who is honest or someone who is persistent or someone who is loyal,you're like, well, what does that mean?What means is somebody who acts in this wayand under these circumstances?And so if you can act in this wayunder these circumstances,then it means you can expose yourselffor these circumstances to act a certain way.
20:15And that means you can learn it.And so traits are learnable.You're not born with them.You learn them.You reinforce them over time.And then you become different.I use quotes here because you behave differently.And so I think I'll leave with this.
20:32Intelligence is a rate of learning.It's a speed.How quickly do you learn?And then you have to define learning.Learning is same condition, new behavior.So if I say, hey, when I show you this red thing, I'm going to slap you.And I show it, and then I slap somebody, and then I show it, and then I slap them.And the third time I show it to them and they duck, right?
20:51Same condition, new behavior.They've learned.Somebody who's smarter, I show it once, and on the second time, I go to slap them and theyduck.So they have more intelligence.And so if you want to be smarter, the key is to try.change your behavior faster. And so I think in that way, it operationalizes knowledge. Probably a lotof lawyers are big readers and they love, you know, the mental masturbation of like consuming stuff.
21:18But if your behavior does not change after you go to a workshop or a seminar, you listen to thispodcast, if your behavior doesn't change, you learned nothing, which means you are not that smart.I love it. I love it. What's the day in the life like right now for you? I mean, I read you don't have anyhobbies, you don't golf. Like, what, what are you up to? Just business stuff for the most part.I mean, you know, today I was talking to a buddy of mine who works with public CEOs and I wasbouncing some ideas off of him in terms of like our investment thesis and kind of our portfolio strategy.And then I had a meeting a portfolio auto. So it's just like looking at the some of thecompanies that we have and some of the issues that are coming up at kind of how we're going to resolve
21:57them and allocate resources around those. At a meeting with a book manager for the next book launchthat's coming out, just making sure that our order quantities are right.And then we have the right mix, you know, between, you know, paperback, hard back, you know,is the shipping guy ready in terms of like what's expected volumes?You know, from there, I have this podcast.And so it's a mix bag for me.For me, mostly my mornings are working on one big thing for a very long period of time.So the book was my first six hours every day for the last two years.
22:23That's done now.So now it's just getting into the kind of the promotional cycle for that book and making sure it gets printed and shipped and all that kind of stuff.Once that book launches, I'll probably be allocating all of my first six hours of the day to someother very big project.But that's front of the middle.I work on very few things for a long time.Yeah.And it seems at this point, like,
22:41your motivation is perhaps changed.I don't know if you're running away from anythingat this point.I don't know you're trying to prove anybody wrong.Like what's, what keeps the fire burning?What keeps you excited?What keeps you energized?I mean, it seems like it's not the money.
22:51You already have that.So what keeps you going?I like it.I think that's it.I just like it.What I look forward to doing.I write books about business.I draw pictures about business.
23:03I make videos.about business. I do business all day. I enjoy it. It's what I enjoy doing. And I just happen to befortunate in the thing that I like happens to be, you know, valuable to a marketplace thatexchanges money. If I liked gardening, I would be, I'd have a super duper garden. I know, I don'tknow if I'd make as much money, but I would, but that's pretty much it. I'll leave with this.I had a mentor really early on in my life and I had a really good weekend, right? And I just,everything was like perfect that weekend. I was telling her how, how my weekend had been.And she was like, I'm pretty sure the key to life is stringing as many of those days in a row as you
23:34can't. And it just kind of stuck with me because it operationalized improving subjectivewell-being, which is like, if I do the things that I like with the people that I like,as many days in a row as I can, I'll probably end up okay. And that's pretty much what I've tried tolook.