Don't Keep Starting From Scratch Ep 539

In this episode, the host of "The Game" podcast shares insights on entrepreneurial growth, emphasizing the value of persistence over novelty. He discusses his journey with acquisition.com and the misconception that growth necessitates new ventures. Through stories, including one about a neighbor who sold and plans to rebuild a trash collection business, he illustrates the pitfalls of entrepreneurs seeking constant change. He advises that businesses should focus on customer value, not personal fulfillment, and suggests creating challenges within existing businesses, such as innovating front ends or imposing constraints, rather than starting new ones. He also touches on the concept of multiple metrics for success and the importance of balancing wealth accumulation with other life goals, advocating for sustainable growth aligned with personal well-being.

• Mastery is necessary to walk the middle path in life.
• Achieving mastery allows one to understand the lack of need for the thing mastered.
• Giving away mastery signifies a deep understanding of its value and the realization of its non-essential nature.

"I think that in order for us to walk the middle path in life, we have to achieve mastery over the thing before we can truly master it and give it away."

This quote emphasizes the importance of mastering something before moving on from it, suggesting that true understanding comes from deep familiarity, which then allows for detachment.

• Wealthy individuals often view business as a game.
• The speaker's podcast aims to document lessons learned on the way to building a billion-dollar portfolio.
• The podcast is directed at entrepreneurs seeking growth and challenges in their businesses.

"The wealthiest people in the world see business as a game."

The speaker highlights a mindset among successful entrepreneurs where business is seen as a competitive and strategic endeavor rather than just a means to an end.

• The speaker's neighbor sold his trash collection business for a substantial amount of money.
• After the non-compete period, the neighbor intended to start the same business again.
• The neighbor's decision reflects a practical approach to entrepreneurship based on expertise rather than the pursuit of novelty.

"And so my neighbor had a trash business... And he sold his business a few years back for a lot of money... And he said, I just got out of my non compete... I plan on starting another trash business and selling it right back to the guys who bought my last one."

This quote illustrates the neighbor's pragmatic choice to leverage his existing knowledge and experience to replicate past success instead of venturing into unknown territories.

• Entrepreneurs often equate growth with novelty and new challenges.
• Growth can also mean developing the persistence to continue doing the same thing effectively.
• Real estate moguls serve as an example of success through focus and specialization.

"But the thing is that we think growth means new. When I think that a lot of times we could redefine growth as meaning we develop the character traits to be able to persist and continue to do the same things over and over again."

The speaker suggests that growth should not always be associated with doing something new but can also be about improving and persisting in the current path.

• Businesses are often built to satisfy the entrepreneur's personal needs such as insecurity, connection, or status.
• A business's primary function is to provide value to customers, not to resolve the owner's psychological needs.
• Projecting personal needs onto a business can lead to poor decisions and potentially harm the business.

"The business doesn't exist to satisfy our internal deficiencies... These are all the things that we build our business to solve. But our business doesn't actually need to solve any of those things. It just needs to provide value to the customer."

This quote underscores the distinction between the personal motivations for starting a business and the business's objective to serve customers, implying that conflating the two can be detrimental.

• Several successful internet marketers expressed boredom with their current ventures and a desire to start software companies for a new challenge.
• The speaker finds it ironic that individuals at the top of their game would consider abandoning their expertise for an entirely different field.

"So I've had one, two, three different guys tell me in the Internet marketing space who I say one's doing 15 to 20 million, another is doing about 10 million, another's doing about 10 million a year... And each of them, on their own reached out to me and said, hey, man, I think I'm going to start a software company because I'm not challenged enough doing this anymore."

The quote presents real-life examples of successful individuals willing to switch industries in search of new challenges, reflecting the speaker's earlier points about the misconception of growth and the allure of novelty.

• The speaker discusses the concept of being a true entrepreneur who is committed to their business for the long term.
• They point out that matching market growth of 10% annually can lead to substantial wealth over 40 years.
• Emphasizes the common mistake of entrepreneurs trying to beat the market instead of growing with it.
• Highlights the issue of entrepreneurs projecting personal insecurities onto their businesses.

"If you were to grow by 10% a year, by the end of the 40 years, you would have a gazillion dollars, right? But most people are always trying to beat the market when in reality, if you just matched the market, you would become extraordinarily crazy wealthy at the end of this game."

This quote explains the long-term financial benefits of growing a business at a steady pace in line with the market, rather than attempting to outpace it aggressively.

• The speaker admits to previously using their business to solve personal issues, which was a mistake.
• They emphasize the importance of focusing on solving client problems instead.
• The speaker shares personal strategies for creating challenges within the business that foster growth without causing harm.

"For me, I tried to make my business solve my personal problems when it really just needed to solve my clients problems and I needed to deal with my own personal stuff, right?"

The speaker reflects on the realization that a business should focus on client issues while personal problems should be addressed separately.

• The speaker expresses a desire for innovation and new experiences in business.
• They suggest channeling this energy into creating new front ends (marketing strategies) or back ends (operational improvements) to grow the business.
• The speaker advises against starting multiple new businesses as a way to satisfy entrepreneurial cravings, as it can lead to financial instability.

"So I have desires for innovation. I have desires for new things, right? And so where to channel that is not to create new businesses. Where to channel that is to create new front ends or new back ends."

This quote highlights the speaker's strategy for innovation within a business by focusing on marketing and operational improvements rather than creating new, separate businesses.

• The speaker has learned to measure success by various metrics, not just profit or net worth.
• They discuss the diminishing returns of increased wealth and the need to find new ways to define success.
• The speaker suggests creating personal challenges, such as maintaining a good marriage or staying in shape, as additional metrics for success.

"For a very long time in my life, the only metric for success that I had was how much profit and how much increase in net worth I had at the end of the year. That was it."

This quote reveals the speaker's previous narrow focus on financial success and the evolution of their perspective to include a broader range of success metrics.

• Recognizing time as a limiting factor in achieving business goals.
• The speaker has set a goal to build something that generates a billion dollars a year in revenue.
• The current status of their portfolio is $85 million a year, which is short of the goal but still substantial.
• The importance of focusing on such ambitious goals is highlighted.

"The one thing that you have is a constraint around time, right? And so that was one of the things that I did over the last twelve months was like, okay, I want to build something that does a billion dollars a year in revenue, which is the goal for the portfolio."

This quote emphasizes the speaker's recognition of time as a critical constraint and their ambition to build a billion-dollar revenue portfolio.

• Good decision-making and allowing compounding to work in one's favor are essential for significant growth.
• A 10% yearly growth would take approximately 28 years to reach a billion dollars, assuming market rate growth.
• The speaker believes they can outperform the market rate, which is encouraging for their goal.

"Because if we have the 85 million and we grow by 10% a year, in 20 years we'll probably be there, right. And so... we could be it if we just grow at the market rate, which is pretty encouraging, I think, because I think we can beat the market rate."

The speaker calculates the growth trajectory and expresses confidence in surpassing market rate growth to reach their revenue goal sooner.

• Achieving goals often requires significant sacrifice.
• The speaker knows many successful individuals who have sacrificed greatly to achieve their goals.
• The pain of not achieving a goal can drive people to put everything else aside for success.
• The speaker personally chose to out-sacrifice competitors in the early stages of their entrepreneurial journey.

"You have to be able to put everything you have on the altar of success and sacrifice it for what you want."

This quote reflects the speaker's belief in the necessity of sacrifice for achieving high levels of success.

• The speaker is setting new goals with constraints to make achieving them more interesting and challenging.
• It's possible to achieve goals by sacrificing everything, but the speaker questions whether they can do so within certain constraints, such as working fewer days and maintaining physical fitness.
• Adding constraints is seen as a way to enhance the enjoyment of the game without breaking the system.
• The system is designed to serve the customer, not the individual, which is a valuable lesson for the speaker.

"But the question is, can I build a billion dollar a year revenue portfolio working two or three days a week, right. And can I do that also while being in competitive shape physically, right. And working out one to 2 hours a day because I like it?"

This quote introduces the speaker's new challenge of achieving a billion-dollar revenue with added personal constraints, emphasizing a balanced approach to success.

• The speaker's first taste of success came from learning how to sacrifice.
• Early sacrifices involved forgoing personal time and activities to get ahead.
• The speaker acknowledges the effectiveness of this strategy at the time.

"The first time where I really saw success was when I learned how to sacrifice."

This quote connects the speaker's initial success to their willingness to make personal sacrifices, laying the foundation for their current mindset on goal achievement.

• The speaker learned the value of discipline and time management during college.
• A fraternity pledging process required a significant time commitment, leading to improved grades.
• The speaker realized the benefits of consistent daily study habits.
• After pledging, the speaker applied the same discipline to their daily routine, balancing studying, gym, and classes.
• By maintaining this disciplined approach, the speaker achieved high academic success without working past 9:00 p.m. and still enjoying social activities.

"And if you do 3 hours a day of work every day, and this is what I realized in college, the days that you don't have work to do, if you still work 3 hours, you get ahead on future work."

This quote highlights the speaker's realization that consistent daily work, even when there isn't pressing work to do, can lead to getting ahead on future tasks and ultimately to academic success.

• The speaker emphasizes the necessity of sacrifice to achieve success.
• They applied the discipline learned in college to their business ventures.
• Sacrifice is seen as a prerequisite to learning how to balance life without sacrifice later on.
• The speaker references the Buddha's life story as an analogy for mastering and then relinquishing desires.

"I think that you have to learn how to sacrifice first in order to learn how not to sacrifice later, right?"

The speaker is conveying that initial sacrifice is essential to learn the value of balance and moderation, which can later lead to a more fulfilling life without the need for constant sacrifice.

• Mastery over a subject or skill is necessary before one can truly understand and relinquish it.
• The speaker suggests that to overcome the desire for something, one must first fully experience it.
• This concept is tied to the speaker's broader philosophy on business and personal development.

"We have to achieve mastery over the thing before we can truly master it and mean and give it away, right?"

The quote explains that true mastery involves both achieving and the ability to move beyond the desire for the mastered subject, which is a key to personal growth.

• The speaker provides insights on how to approach business challenges and personal desires.
• They advise against changing a business solely for the sake of challenge.
• Instead, they suggest finding new ways to innovate within the business or using constraints to create challenges.
• The story of the neighbor who sold his trash business for a substantial sum illustrates the wisdom of focusing on what one excels at rather than starting over in a new field.

"Don't change your business just to challenge yourself. Find new ways to either create front ends or new product lines or things like that within your business that can satisfy your add."

This quote advises business owners to look for ways to innovate and grow within their existing business model rather than seeking challenges by starting anew, which can be unnecessarily difficult and risky.

"He's like, why would I learn another business when I'm already really good at this one?"

The speaker shares the perspective of a successful business owner who sees no reason to venture into a new business when he has already achieved success in his current one, emphasizing the value of sticking to one's strengths.