CEO to Investor Ep 272

Summary Notes


In a candid conversation, the host reflects on his shift from a short-term to a long-term mindset in business, emphasizing the importance of setting goals with an investor's time horizon to reduce stress and increase success. He recounts his rapid financial success, which initially skewed his perspective on business benchmarks, leading to a toxic viewpoint. By observing billionaires and their long-term projects, he realized the value of consistent, compounding actions over time. He now sees time as an asset rather than a liability, focusing on sustainable growth through inbound marketing and qualified leads, rather than immediate results. This approach allows for more thoughtful initiatives and a healthier attitude towards competition and business fluctuations, ultimately aiming to build a lasting and generational enterprise.

Summary Notes

Importance of Long-Term Investments

  • Discusses the tendency to focus on short-term goals at the expense of long-term planning.
  • Emphasizes the value of investments that are important but not urgent.
  • Suggests that a long-term perspective is key to significant success.

"You get so caught in the monthly goals and weekly goals that you forget to make the long term investments that are important and not urgent."

This quote highlights the common pitfall of prioritizing immediate goals over long-term strategic investments, which are crucial for sustained success.

The Game of Business

  • Introduction to the podcast's focus on customer acquisition, revenue per customer, customer retention, and business lessons.
  • Sets the stage for the discussion about business strategies and personal growth.

"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."

This quote serves as an overview of the podcast's themes, focusing on key aspects of business growth and the value of learning from past mistakes.

Profound Belief and Perspective Shifts

  • Speaker A shares a personal transformation experienced in 2020.
  • The shift led to reduced anxiety and increased certainty.
  • Highlights the negative impact of setting unrealistic benchmarks based on past success.

"Shifts that I've had over the last few years. And I think 2020 was that year for me, where I made one of the most profound internal shifts."

Speaker A reflects on a significant change in mindset that took place in 2020, which had a positive impact on their well-being and business approach.

The Curse of Rapid Success

  • Rapid financial success can create unrealistic expectations and toxic viewpoints.
  • Speaker A discusses the personal ramifications of early career success.
  • Recognizes the need to adjust benchmarks for success.

"And that fundamentally, I think, ruined me in a lot of ways earlier on because I saw that as my benchmark."

Speaker A acknowledges that early financial success set an unsustainable standard that negatively influenced their perspective on business achievement.

Adopting an Investor's Time Horizon

  • Entrepreneurship often focuses on immediate needs rather than long-term strategy.
  • Billionaires are used as an example of individuals who think on a larger time horizon.
  • The shift towards long-term thinking is presented as a key to greater success.

"An investor's time horizon. And so I feel like in entrepreneurship, everything's about tomorrow, everything's about this week, everything's about this month, and making payroll and all that."

This quote underscores the short-term focus prevalent in entrepreneurship and contrasts it with the long-term perspective of successful investors.

Fast vs. Inevitable Success

  • Speaker A has shifted to focusing on actions that will inevitably lead to goals over a longer time horizon.
  • This perspective change affects how tasks and initiatives are viewed and approached.

"I have tried to shift my perspective to wanting to do tasks and actions on a repeated basis that I know that if I repeat them over a long enough, time horizon will lead me to inevitably accomplishing my goal."

The quote reveals Speaker A's strategy of consistent, long-term actions to ensure inevitable success, rather than seeking immediate results.

Competition and Time Horizon

  • The new perspective has lessened the impact of competition on Speaker A.
  • Extending the time horizon for goals can change how one views competition and success.

"If you remove the time horizon and think of not next year but maybe next decade, right? I've been using five years because that is a timeline that I feel like I can wrap my head around and is real for me."

Speaker A discusses the psychological effect of extending one's time horizon on competition, suggesting that a longer time frame can reduce the pressure of immediate comparison with others.

Time as an Asset or Liability

  • Perspective shift from seeing time as a liability to viewing it as an asset.
  • Recognizing the compounding effects of time on efforts and investments.
  • Time horizon extension changes the nature of time from a threat to a beneficial factor.

"Against me, or is time an asset that is working for me? And I think this has been the single greatest shift in perspective for me, is now seeing if I extend my time horizon, then time stops being a liability and a threat and becomes an asset."

This quote emphasizes the importance of extending one's time horizon to transform the role of time from a negative to a positive force, particularly in the context of personal and professional growth.

SEO and Inbound Marketing

  • Initial disbelief in SEO (Search Engine Optimization) and inbound marketing.
  • A recent change in perspective about the value of these strategies.
  • Inbound marketing as a method of creating a "waterhole" where people are naturally drawn to you.
  • Realization of the long-term benefits of building an inbound interest machine.

"And so I've never really invested much thought into inbound stuff at all...But nonetheless, thinking about this in terms of that perspective of, and I've been talking to people who are like, oh yeah, we have this. It's taken us five years to build."

The speaker acknowledges a past lack of investment in inbound marketing but now recognizes its potential after observing others who have successfully built assets over time that generate significant interest and applications.

Building Sustainable Assets

  • The idea of building assets that consistently generate interest and applications.
  • The importance of creating a reliable, sustainable, and enduring channel.
  • Planning to invest in strategies that will yield benefits over a five-year period.
  • Anticipation of sharing more on this topic in the next twelve months.

"And so you'll probably see some more things for me in the next twelve months along that line, because I think it's really awesome and I want to use compound growth to my advantage."

The speaker is considering the use of compound growth in their strategies and hints at upcoming initiatives that will leverage this concept for long-term gain.

Shift from CEO to Investor Mindset

  • Stress reduction by shifting focus from short-term goals to long-term potential.
  • Comparison with peers shifted from current status to a 20-year horizon.
  • Desire to build a lasting, potentially generational enterprise.
  • Encouragement for others to adopt a long-term perspective for creating value.

"Shift from the CEO to investor mindset has helped me with is the stress that I put on myself for like quarterly goals and looking at someone else who might have started at the same time as me and is doing better than me, because then I get to think to myself, okay, but we're not comparing ourselves now. We're comparing ourselves to what's going to happen in 20 years, right?"

The speaker describes how adopting an investor mindset, which focuses on the future rather than immediate comparisons, has alleviated stress and allowed for a healthier perspective on growth and success.

Investing in Long-Term Payoff

  • Considering investments that may not pay off immediately but are expected to yield disproportionate returns in the future.
  • The challenge of consistency in efforts and the belief in the ability to maintain it.
  • Discipline as a key trait for investing in long-term growth.
  • Example provided to illustrate the concept.

"What tasks could I do? What projects could I invest in that? Even if they don't pay off this quarter or next quarter, even the next twelve months, I think that it would be inevitable that I would have a disproportionate payoff five years from now."

This quote suggests a strategic approach to selecting tasks and projects with the understanding that while immediate returns may not be evident, the long-term benefits can be substantial, highlighting the importance of patience and consistency in investment strategies.

Podcast Promotion and Audience Engagement

  • Speaker D emphasizes the importance of audience support in spreading the word about the podcast.
  • Speaker A encourages listeners to leave a review as a simple way to support the podcast.
  • Both speakers highlight that audience actions can have a significant impact on reaching more entrepreneurs.

"Real quick, guys. You guys already know that I don't run any ads on this, and I don't sell anything. And so the only ask that I can ever have of you guys is that you help me spread the word so we can help more entrepreneurs make more money, feed their families, make better products, and have better experiences for their employees and customers."

This quote explains that the podcast is ad-free and product-promotion-free, relying on listeners to share and promote the content to reach and assist more entrepreneurs.

"So the single thing that I ask you to do is you can just leave a review."

Speaker A is requesting listeners to leave a review, indicating that this small action is the single most helpful thing they can do for the podcast.

"It would mean the absolute world to me, and more importantly, it may change the world for someone else."

Speaker A suggests that listener reviews are not only personally meaningful but could also have a broader positive impact on others.

Business Growth and Initiative Planning

  • Speaker A discusses a new initiative for generating inbound applications in their company.
  • Speaker B advises against measuring the success of the initiative within the current quarter.
  • Both speakers agree on the freeing nature of removing immediate pressure on new initiatives.

"We're looking at doing an initiative on the gym lunch, in our gym lunch company related to just generating more inbound applications and whatnot. And I was talking to our GM about it, and I was saying, listen."

Speaker A introduces a new initiative focused on increasing inbound applications for their company.

"Let's not think about that for this quarter. I mean, we can start now, but let's not measure the ROI until next year."

Speaker B suggests a longer-term approach to evaluating the return on investment for the new initiative, proposing to start now but measure success next year.

Long-Term Business Metrics and Leading Indicators

  • Speaker A has shifted from short-term to long-term thinking regarding business growth and metrics.
  • Speaker B concurs that this approach reduces pressure and potentially increases the quality of initiatives.
  • Speaker A introduces the concept of a leading indicator for business growth, which they had not considered before.

"Rather than looking at week over week, month over month sales growth, instead, I asked myself the question, what one thing, if I tripled it in our company, what non-sales related, you know, what non-revenue related thing that if I were to triple it, it would be unreasonable to believe that my company would not triple as well."

Speaker A is reevaluating how they measure business growth, focusing on a non-revenue metric that, if increased, would likely result in significant company growth.

"And so what's interesting to me is that if I can, I've never actually thought about a leading indicator, because I have leading indicators on churn, which is like customer activation. And I talk about that in other stuff, but I've never actually had a leading indicator on growth, which is fascinating to me, that I've never had this, which is like hilarious, but actually measuring."

Speaker A finds it intriguing that they have not previously considered a leading indicator for growth despite having such indicators for other aspects like customer churn.

"The number of sales accepted leads. And so that's defined as a lead that the sales team accepts because they showed and are qualified. Right. They are the type of person who we can serve. They have the size business that we work with and they showed up and they have interest, right? So that would be a sales qualified lead."

Speaker A defines a sales accepted lead as a qualified potential customer who fits the company's target demographic and expresses interest in their services.

Consistency in Business Growth Strategies

  • Speaker A discusses the importance of consistency in increasing the number of qualified applications.
  • Speaker B agrees that setting consistent and reasonable goals is more effective than aiming for unpredictable sales increases.
  • Speaker A outlines strategies for consistently growing the number of inbound applications.

"And so if you thought about it like a line, I know that I can increase through consistent activity the number of inbound applications, either through adding more people to outreach, creating more channels for content, and then obviously there's the paid side, which is you can add another platform, et cetera."

Speaker A explains that consistent efforts, such as expanding outreach and content channels, can reliably increase the number of inbound applications.

"And so when I'm thinking about growing my business and hitting a goal like tripling it in the next five years, and I think, okay, well, then let's take our sales qualified leads, right. And let's draw that as our line. And that's going to be our baseline."

Speaker A considers sales qualified leads as a baseline metric for setting and achieving long-term business growth goals.

Perception of Market Fluctuations

  • Market activities are compared to the stock market's volatility.
  • Short-term perspectives can make market movements appear chaotic.
  • A long-term view reveals the underlying economic value and truth of a stock's performance.

we're going to focus all our attention on, the day to day activities around that. Those are going to be like the stock market, right? They're going to be up and down, up and down, up and down. And I think most of us are. Looking at such small time horizons, it looks crazy.

This quote emphasizes the importance of focusing on day-to-day activities and suggests that short-term perspectives can make these activities seem as volatile as the stock market.

But if you look at it from an investor's perspective in terms of years or decades, then you can really see the truth.

This quote highlights the value of adopting a long-term perspective, akin to that of an investor, to understand the true performance and value of a stock or business over time.

Leading Indicators of Growth

  • The number of interested inquiries is considered a primary predictive metric for growth.
  • Increases in qualified applications are seen as indicators of potential business expansion.
  • A change in perspective has led to a focus on reliable inflows of new clients.

And so for me, a leading indicator of growth would be the number of interested inquiries that we get.

The speaker identifies interested inquiries as a key metric for predicting growth, reflecting the importance of customer interest in a company's services.

But if I can simply increase the number of qualified applications of people who want to, for example, grow their gym by three x in the next five years, then I can reasonably believe that I would be able to achieve it.

This quote suggests that increasing the number of qualified applications is a strategic goal and a sign of potential growth for the business.

Strategic Business Initiatives

  • Smaller projects are now seen as valuable, even if they don't lead to a significant increase in lead generation.
  • Investing in initiatives that bring a steady, though not huge, number of new clients is considered worthwhile.
  • A new initiative is expected to bring in about 20 new clients per month, contributing to long-term value.

And some of these smaller projects, which for me were like, well, this thing isn't going to double our lead gen, so I don't want to do it. I've really shifted my perspective on that.

The speaker acknowledges a shift in perspective, recognizing the importance of smaller projects that contribute to steady client growth.

Right? And so that's what I was talking to my GM about. And so we're actually going to do this initiative that I think will result in about 20 new clients a month.

This quote indicates a strategic decision to implement a new initiative aimed at acquiring new clients on a monthly basis, reflecting a focus on consistent growth.

Mindset Shift and Stress Reduction

  • A transition in mindset from CEO to shareholder or advisor is associated with reduced stress.
  • The speaker has experienced a significant improvement in their standard of living due to decreased stress.
  • The speaker's ego is less affected by business fluctuations, contributing to an increased quality of life.

That's pretty much my message for what my biggest perspective shift has been is thinking about a five year time horizon, shifting from CEO to shareholder, shifting from CEO to board member or advisor, and thinking about it over those time horizons.

This quote details the speaker's shift in mindset to a longer-term perspective and a role akin to that of a shareholder or advisor, which has led to a reduction in stress.

Which is my ego is just so much less impacted by the fluctuations of the business that it's just phenomenally increased my standard of living. I'm just really not that stressed about things.

The speaker highlights the positive impact of being less emotionally affected by business fluctuations, noting a substantial improvement in their standard of living and stress levels.

Reflections on Business Performance and Future Outlook

  • The speaker's profit was halved in 2020, but they remain unaffected due to the long-term outlook.
  • The pandemic is seen as a temporary disruption, with a belief in recovery and growth over the next three years.
  • Time is viewed as an ally or asset, aligning with inevitable forces that facilitate growth.

And so, anyways, this has been probably the biggest lesson of 2020 for me, and obviously 2020 for us was our profit was cut in half. We did, I think, 13.4 in profit last year, and we did, I think, six. Six. This year we're getting to final books.

The speaker reflects on the significant lesson learned in 2020, a year in which their profit was significantly reduced, yet they maintain a positive outlook.

And I don't think it'd be unreasonable for me to believe that over the next three years that we would not only recover, but grow past where we were before.

This quote expresses the speaker's optimism about the business's ability to not only recover from the current downturn but also to surpass previous performance levels in the coming years.

And when I can hitch my cart to something that is inevitable, like the passing of time, then I feel like you're aligned with forces that will grow you without your permission.

The speaker conveys a philosophical approach to business growth, suggesting that by aligning with the inevitable passage of time, growth can occur naturally.

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