One of the Biggest Mistakes I See Entrepreneurs Make Ep 433

Summary Notes


In this episode of "The Game," the host discusses common entrepreneurial pitfalls with guest Mark Bell, emphasizing the importance of strategic simplicity over complexity for business growth. They highlight that many entrepreneurs make the mistake of diversifying their offerings prematurely, akin to lifting weights beyond their capability, instead of focusing on their core product and expanding their audience. The conversation stresses that scaling a business requires humility and patience, much like weightlifting, where one must master current levels before advancing. The host urges entrepreneurs to 'peel weight off the bar,' simplifying their approach to amplify their strengths and avoid the trap of trying to capture every market opportunity, which can lead to a disjointed and ineffective business model.

Summary Notes

Entrepreneurial Growth Strategies

  • Entrepreneurs often make the mistake of continually releasing new products instead of expanding their audience.
  • Sustainable business growth can be achieved by audience expansion rather than product proliferation.
  • The wealthiest individuals view business as a strategic game.

The biggest mistake that I see entrepreneurs who are at, you know, 2 million, 3 million, 5 million, is that they are trying to solve their business growth problem by just coming out with thing after thing after thing after thing for that audience.

This quote highlights the common error among entrepreneurs of focusing on product development at the expense of audience expansion as a growth strategy.

Rather than thinking maybe I should expand my audience, the wealthiest people in the.

This incomplete quote suggests that successful entrepreneurs and wealthy individuals prioritize expanding their audience as a key strategy for business growth.

Business and Fitness Parallels

  • Mark Bell's advice on weightlifting resonates with business strategies.
  • Entrepreneurs should be willing to adjust their strategies to match their current capabilities.
  • Acknowledging limitations and adapting accordingly is crucial for long-term success.

Mark Bell just flew out, awesome guy, to do a podcast here with me in Vegas. We worked out, shot the shit. It was a great time. And there was this really important point where he said, you know, I wish more people would just peel weight off the bar.

This quote recounts a valuable insight from Mark Bell about the importance of recognizing one's limits, both in weightlifting and business.

And I thought it was such a beautiful parallel in business and one of the most common mistakes in business that I see entrepreneurs at all levels make.

Speaker A draws a parallel between the advice given by Mark Bell in the context of weightlifting and the common mistakes entrepreneurs make in business.

Entrepreneurial Mistakes and Advanced Strategies

  • Entrepreneurs commonly err by adopting strategies that are too advanced for their current stage.
  • These mistakes can be detrimental to long-term business health.
  • It's essential for entrepreneurs to exercise humility and adjust their strategies.

So probably talks to 25 new companies a week that are coming out, approaching us about us potentially investing in their companies. And one of my biggest pet peeves, entrepreneurial mistakes that I see across the board, especially in that sub 5 million range, is something that will destroy your business for the long haul.

This quote expresses Speaker A's frustration with a frequent mistake made by entrepreneurs seeking investment, which could jeopardize their businesses in the long run.

And the reason is not because the strategy is wrong, but because it's too advanced.

Speaker A clarifies that the problem with the entrepreneurs' strategies is not their validity but their inappropriateness for the business's current stage.

The Importance of Humility in Business

  • Humility allows entrepreneurs to recognize when a strategy is too advanced and to adjust accordingly.
  • Comparing oneself with others can lead to overestimating one's capabilities.
  • Entrepreneurs should focus on strategies that are appropriate to their current level of business strength.

And it takes humility. Like the guy who says, you know what? I'm going to peel a plate off, because it's like I can do that weight better so that I can someday level up and get strong enough to do that.

This quote emphasizes the importance of humility in business, drawing an analogy to a weightlifter who acknowledges their current strength level and adjusts the weight to improve safely and effectively.

Business Complexity vs. Simplicity

  • In business, unlike weightlifting, complexity increases with scale rather than just adding more of the same element (weight plates).
  • Simplicity in business operations and focus often leads to better scalability.
  • Attempting to start a complex business like a digital bank can be difficult for those who are not prepared for the challenge.
  • Entrepreneurs often make the mistake of taking on projects that are too ambitious for their current capabilities.

"But in business, it's about complexity. And so the adding the weight to the bar is complexity in the business, whereas simplicity oftentimes is what scales."

This quote emphasizes the contrast between the straightforward nature of increasing difficulty in weightlifting and the multifaceted challenges of scaling a business.

Entrepreneurial Overreach

  • Entrepreneurs frequently fall into the trap of expanding their business prematurely, lured by the fear of leaving money on the table.
  • They may try to capture more value per customer by adding services or products, which can complicate operations.
  • Effective execution of a diversification strategy requires advanced operational capabilities.

"The biggest mistake that I see is that they put on shoes that are too big for them."

This quote suggests that entrepreneurs often take on more than they can handle, which can lead to difficulties in managing their business.

Case Study: General Contractor Diversification

  • A general contractor with a primary focus on roofing expanded into real estate flipping and general repair work.
  • The expansion was driven by a desire to utilize resources fully and not miss out on potential revenue from existing customers.
  • The entrepreneur must consider whether each area of expansion aligns with the goal of growing the business to a significant scale.

"So you do roofing, you do general contracting work, and you flip houses."

This quote outlines the diversification of the general contractor's business into multiple areas of operation.

Strategic Focus and Growth Potential

  • It is crucial for businesses to evaluate the potential of each sector they are involved in and whether it aligns with their growth objectives.
  • The general contractor must assess whether focusing on roofing, general contracting, or house flipping individually could lead to a $100 million business.

"Do we think we could have a hundred million dollar roofing business? The answer is yes. Do we think we could have a hundred million dollar general contracting business? The answer is yes."

This quote poses rhetorical questions about the growth potential in each area of the contractor's business, suggesting that each has the potential to reach significant scale if properly focused.

The Viability of Multiple Business Ventures

  • Pursuing multiple business ventures simultaneously is possible but very challenging.
  • Most people cannot effectively manage several businesses at once.
  • It is implied that exceptional individuals like Elon Musk can handle multiple businesses due to being extraordinary or "freaks."

"Can you have all three? Very unlikely. Unless you're an elon. Unless you're a freak."

This quote highlights the rarity and difficulty of successfully running multiple business ventures, suggesting that it is an exception rather than the rule, reserved for extraordinary individuals.

Podcast Support and Impact

  • The host does not run ads or sell products through the podcast.
  • The host asks the audience for support by rating, reviewing, and sharing the podcast.
  • The motivation behind the request for support is to help more entrepreneurs succeed.

"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."

The quote expresses the host's sole request from the audience to assist in spreading the podcast's message, emphasizing the potential positive impact on entrepreneurs and their communities.

Common Mistakes in Business Growth

  • Entrepreneurs often try to grow their business by adding multiple products or services.
  • This approach can be a mistake for businesses earning around $2 million to $5 million.
  • The focus should be on expanding the audience for the most effective product or service.

"The biggest mistake that I see, entrepreneurs who are at 2 million, 3 million, 5 million ish, is that they are trying to solve their business growth problem by just trying to glob as many different things as they possibly can."

This quote identifies a common error among entrepreneurs, which is the attempt to grow their business by diversifying offerings too quickly rather than focusing on their core strengths and expanding their audience.

Strategic Focus and Simplification

  • Entrepreneurs should evaluate their offerings and focus on what they excel at.
  • The goal is to serve the most people effectively with a particular product or service.
  • Simplifying the business model can lead to better financial performance.

"So if this is you, and you've got five different products, you sell to different avatars, you sell very clearly different services, you might want to say, okay, which one of these am I best at? And which one of these do I think I could serve the most people with and find the one that crisscrosses those two things and say, I'm going to forget about the rest of the stuff and go all in on this one thing."

The quote advises entrepreneurs to narrow down their focus to the product or service they are most skilled at and that has the largest potential audience, suggesting that this strategy will lead to more success than spreading efforts too thin.

Overcoming Greed and Distraction

  • Entrepreneurs may be tempted to internalize all aspects of their business due to greed.
  • This can lead to distractions from the core business opportunity.
  • The host suggests focusing on the business's main strength and potentially earning from affiliate commissions instead.

"It also tends to stem from a little bit of greed and people like, they're looking at other people's paychecks. I'm sending this guy so much business. I'm sending that guy so much business. Good, great. Get an affiliate commission, call it a day, move on."

This quote implies that greed can lead entrepreneurs to want to control every aspect of their business, even when it may be more beneficial to focus on their primary offering and earn through affiliate commissions for other services.

Simplification in Entrepreneurship

  • Entrepreneurs often make the mistake of taking on too many ventures at once.
  • The speaker emphasizes the importance of focusing on one business to succeed.
  • Simplifying and concentrating on a single opportunity can enhance an entrepreneur's skill set.
  • The process of simplification is likened to weightlifting, where removing excess weight allows for more effective training.
  • Saying "no" to new opportunities can increase attractiveness and potential for success.

"Because the first thing that we do with a business like that is we would simplify, we'd peel weight off the bar, and we'd say, we need to do more reps and more volume with the weight that we've got."

This quote underlines the strategy of reducing complexity in a business to focus on core strengths, similar to a weightlifter removing excess weight to perform more repetitions effectively.

"I had to peel weight off the bar until I was left with one. And then I did more reps with that one, with the one plate on the bar."

The speaker shares a personal anecdote to illustrate the effectiveness of concentrating on a single business rather than juggling multiple ventures simultaneously.

The Power of Saying No

  • Saying no to less significant opportunities allows for growth and focus on more substantial prospects.
  • As entrepreneurs succeed, they must learn to decline offers that don't align with their business goals.
  • The ability to say no is critical in scaling a business and reaching higher levels of income.
  • The speaker relates this to the concept of increasing attractiveness by being selective.

"And you have to just say no. And this is just like the woman in the red dress. Say no to increase in attractiveness as you get better."

The quote draws an analogy between saying no to distractions in business and becoming more attractive by being selective, suggesting that restraint can lead to greater success.

"But you have to say no to that to get to a million a month."

This quote emphasizes the importance of turning down opportunities that may seem lucrative in the short term to achieve even greater success in the long term.

Market Saturation and Growth

  • Entrepreneurs should continue to focus on one thing until they exhaust their market.
  • Most businesses do not reach the point of market saturation.
  • Concentrating on a single market or product can lead to significant financial and business gains.
  • The speaker encourages entrepreneurs to focus on scaling up within their market before diversifying.

"The only reason you shouldn't be doing more reps and adding to the bar, adding to the stuff that you sell, is that you literally have no more people to sell to."

This quote suggests that entrepreneurs should continue to focus on their core business until they have fully capitalized on their market potential.

"So, mosey Nation, be an entrepreneur. Focus on the one thing. Peel weight off the bar, do more reps at the weights that's appropriate for you, and then watch your gains, both financial and physical. Stack."

In this concluding statement, the speaker motivates entrepreneurs to simplify their business approach, focus on what they do best, and work on expanding within their capabilities to see progress and success.

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