Picking Your Niche Ep 660

Summary Notes


In this episode, the host of the podcast delves into the common pitfalls of entrepreneurship, emphasizing the importance of industry experience and the fallacy of seeking shortcuts to success. He argues that true business acumen comes from "eating the shit" and putting in the necessary work to gain expertise in a chosen field. He critiques the tendency of newcomers to overestimate their capabilities and to rush success, highlighting Y Combinator's preference for founders with relevant background experience. The host shares anecdotes to illustrate that solving problems and providing value are at the heart of business, rather than reinventing the wheel. He advises aspiring entrepreneurs to embrace the grind, learn from the bottom, and respect the time it takes to build a solid foundation, stressing that patience and perseverance are key to eventually mastering a niche and achieving genuine success.

Summary Notes

Importance of Experience and Hard Work

  • Speaker A emphasizes the need for putting in hard work and gaining experience to achieve success.
  • The "rocky cutscene" metaphor suggests enduring challenges and working diligently over time.
  • Speaker A implies that shortcuts to success are ineffective because they do not build genuine competence or skill.

"You're never going to get there because you're not good enough. You have to do the rocky cutscene. You have to eat the shit for a period of time so that you can get the reps in, so you can put your time under the bar in, so that you can actually get good."

This quote stresses the idea that success requires overcoming inadequacies through persistent effort and practice, akin to a training montage in a "Rocky" film.

Business as a Game

  • Speaker A views business as a strategic game and shares lessons learned from building a successful portfolio.
  • The goal of the podcast is to document these business lessons and help others grow their businesses.
  • Speaker A aspires to partner with listeners to reach significant financial milestones.

"The wealthiest people in the world see business as a game. This podcast, the game, is my attempt at documenting the lessons I've learned on my way building acquisition.com into a billion dollar portfolio."

This quote conveys Speaker A's intention to share strategic insights from their business journey, framing the process of building wealth as a competitive and strategic endeavor.

Choosing the Right Business Niche

  • Picking a niche is critical and often misunderstood in business.
  • Speaker A points out that many entrepreneurs choose niches without proper knowledge.
  • Y Combinator values past experience within a business space, as many successful businesses are iterations, not entirely new concepts.
  • Excellence in existing industries is undervalued; businesses can succeed by simply doing things better.

"So picking the niche, I think this is something that's like wildly misunderstood, and I'll tell you where most people get wrong, is that they pick a niche and they have no idea about the niche."

This quote highlights the common mistake of choosing a business niche without adequate understanding, which can lead to failure.

The Underrated Strategy of Improvement over Innovation

  • Speaker A believes in improving existing business models rather than seeking entirely new ones.
  • Success can come from outperforming competitors in any field through better execution.
  • The strategy involves providing more value to customers than competitors.
  • Speaker A argues that service quality, like "service with a smile," is underrated.

"I don't even do anything new. I just try and do stuff better, which people somehow poo poo on."

Speaker A suggests that innovation is not always necessary for success; instead, refining and improving upon existing business models can be a winning strategy.

Case Study: Real Estate Agency Owner

  • Speaker A shares a story of a real estate agency owner struggling to deliver results to clients.
  • The owner's lack of industry knowledge was the root cause of the problem.
  • Speaker A advised the owner to gain firsthand experience by becoming a realtor before running an agency.
  • The story illustrates the importance of deep industry knowledge for providing valuable services.

"Listen, man, you don't know what you're doing, which is why your clients aren't getting results, period."

This quote underscores the direct relationship between industry expertise and the ability to deliver results, highlighting the necessity of knowledge for business success.

Importance of Industry Experience

  • Industry experience is crucial for understanding a niche before trying to sell expertise or solutions.
  • Y Combinator prefers entrepreneurs with relevant industry experience.
  • Experience provides knowledge of industry lingo, customer avatars, and problems, which opens up opportunities.

"And the problem is, too many of the people right now, y'all are on the sidelines and have always been on the sidelines and are trying to pick a niche to get into, to sell. How to do the niche. Well, that's dumb. You've never done it."

  • This quote emphasizes the futility of attempting to sell expertise in a niche without having any practical experience in it.

"if you want to make a software in the payment space, we'd love to see that you have experience in the payment space, because there's so much stuff that you don't know that you know, when you actually spend three, five years doing something in an industry, you understand the lingo, you understand the avatar, you understand the problems, and you can see opportunities if you have an entrepreneurial hat on."

  • The quote underlines the depth of understanding and insight gained from years of working within an industry, which is highly valued by investors like Y Combinator.

Fundamentals of Business

  • Business is about solving problems and ensuring the solution is financially viable.
  • The effectiveness of problem-solving can lead to business growth through word-of-mouth.
  • Understanding how to make an offer is essential at the start of a business.

"And fundamentally, business is just solving problems that exist and making sure the math makes sense. That's literally it."

  • This quote distills the essence of business to its core components: problem-solving and financial viability.

"I think the problem that a lot of people have is they didn't know how to make an offer, right."

  • This quote identifies a common issue for many starting businesses: the inability to craft a compelling offer for their product or service.

The Journey to Competence

  • Taking shortcuts in gaining industry expertise is often unsuccessful.
  • Mastery requires enduring a period of inadequacy and accumulating experience ("rocky cutscene").
  • One must decide whether to teach their expertise or continue to expand their own practice after achieving proficiency.

"You're never going to get there because you're not good enough. You have to do the rocky cutscene, you have to eat the shit for a period of time so that you can get the reps in, so you can put your time under the bar in so that you can actually get good."

  • The quote stresses the necessity of enduring hardships and persistent practice to achieve competence in any field.

"And then it that point, then you'll actually have a real decision to make, which is I'm actually really good at this thing. Now that I've learned. Do I want to teach it to other people or do you want to do more of the thing that I'm doing?"

  • Once expertise is attained, this quote highlights the crossroads faced by professionals: to become a mentor or to further their own practice.

Call to Action for Podcast Support

  • The speaker does not monetize the podcast with ads or sales.
  • The speaker asks for support through ratings, reviews, and sharing to help more entrepreneurs.
  • Leaving a review is a small act that could have significant impact on others.

"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 is a direct appeal to the audience to support the podcast, emphasizing the speaker's goal of aiding entrepreneurs without commercializing the content.

"And the only way we do that is if you can rate and review and share this podcast. So the single thing that I ask you to do is you can just leave a review. It'll take you 10 seconds or one type of the thumb. It means the absolute world to me. And more importantly, it may change the world for someone else that doesn't."

  • The speaker underscores the importance of audience support through reviews and sharing, highlighting the potential broader impact on the entrepreneurial community.

Importance of Mastery and Authenticity in Business Growth

  • Mastery and authenticity are essential for scaling a business.
  • Testimonials are a reflection of the quality and effectiveness of one's services or products.
  • The pursuit of high revenue targets should not overshadow the need to be genuinely skilled in one's field.
  • A lack of testimonials may indicate a deficiency in the quality of work or service provided.

"You're not good at the thing that you're supposed to be good at. Which why I don't have testimonials is why you're not going $100,000 a month."

This quote emphasizes the importance of being skilled in your field as a prerequisite for business growth. Testimonials are often earned through delivering quality service, and their absence could be a sign of inadequate performance.

The Rush to Success and Its Drawbacks

  • The urgency to achieve success quickly can be counterproductive.
  • Instant success is a myth, and the belief that one can become good without effort is misleading.
  • Sustainable growth and success are achieved through a gradual and thorough learning process.

"Like, everyone is in such a fucking rush that you will never get there."

This quote criticizes the impatience often seen in individuals who want to achieve success rapidly without putting in the necessary work and time.

The Learning Process and Building a Solid Foundation

  • Learning from the ground up provides a deep understanding of the industry and client journey.
  • Acquiring a variety of skills is a result of a step-by-step learning process.
  • A strong foundation is crucial for long-term success and stability in one's career.

"The slowest path to getting there is to fool yourself into thinking that you're good, something that you're not."

This quote suggests that self-deception about one's abilities can hinder the learning process and ultimately delay success.

The Role of Hard Work and Patience in Progress

  • Progress is defined by continuous improvement, not by immediate financial gain.
  • The work one does contributes to personal development and skill acquisition.
  • Persistence and dedication over an extended period are key to becoming proficient in a field.

"And so even though you might not be getting paid in the period that you're at, just because you're struggling doesn't mean you're failing."

This quote conveys that financial compensation is not the only measure of success; the experience and skills gained, even during struggles, are valuable.

The Inevitability of Improvement with Time and Effort

  • Consistent effort over time guarantees improvement in any skill.
  • Enjoyment of a task often follows proficiency, which can lead to business success.
  • The questions and concerns about business performance are less likely to arise once one becomes genuinely good at their craft.

"I promise you that if you don't stop doing something for ten years, you'll be really good at it, period."

The quote asserts that long-term dedication to a task or skill will inevitably lead to mastery and enjoyment of that skill.

Realistic Expectations for Entrepreneurial Success

  • Entrepreneurship usually requires several years of effort before yielding significant results.
  • A long-term perspective and commitment are necessary for entrepreneurial success.
  • The learning curve for entrepreneurs includes understanding various aspects of running a business.

"Every entrepreneur that I know of puts five years in before anything really happens."

This quote sets a realistic timeline for entrepreneurial success, emphasizing that it often takes several years of hard work before achieving substantial outcomes.

Respect for the Entrepreneurship Journey

  • Entrepreneurship requires time and dedication, similar to obtaining a degree.
  • It is unrealistic to master entrepreneurship in 90 days.
  • Experience and longevity in the field are critical for success.
  • Starting young provides an advantage, but starting at any time requires commitment.
  • Volume and repetition in work lead to a deeper understanding and expertise.

You have to respect the game. Like, a lot of people have been playing this for 40 years. No one's getting their master's degree for 40 years. Well, some phds are right. And they're probably pretty good at whatever their thing is.

The quote emphasizes the importance of respecting the complexity and difficulty of entrepreneurship, which requires as much dedication as long-term academic studies.

The Process of Starting a Business

  • Starting a business involves practical steps like opening a bank account and forming an LLC.
  • Promotion and selling are fundamental skills for a new business.
  • Lack of clarity in what to sell often indicates a need for more industry experience.
  • Banks typically require industry experience before granting loans to new businesses.

How do you start a business. You get a bank account, get an LLC, and you figure out what you're going to. What. That's what you do. That's how you start a business.

This quote provides a straightforward approach to the initial steps of starting a business, highlighting the importance of taking action rather than getting stuck in planning.

Gaining Industry Experience

  • Industry experience is often a prerequisite for success in entrepreneurship.
  • Banks may deny loans to individuals without relevant experience.
  • Working in the industry can provide valuable insights and savings to start one's own business.
  • The speaker shares an anecdote of a gym owner who gained experience before successfully starting his own gym.

So what he did was he went to Bally's and worked at Bally's for like, three or four years and worked his way up to becoming the personal training manager, and then at that point, started his gym, and he didn't even need the bank loan at that point because he had saved some money and he learned how the business worked.

The quote illustrates how gaining industry experience can be more beneficial than securing a loan for starting a business, as it prepares one with the necessary skills and knowledge.

Choosing a Niche and Commitment

  • Choosing a niche should not be overthought; one should start with what they are drawn to.
  • Commitment to a chosen field over an extended period is crucial.
  • Being realistic about one's abilities and knowledge is important to avoid overestimating oneself.
  • The speaker advises against reading books on sales or entrepreneurship without practical experience.

You just start. And then you start accumulating knowledge, and then you will learn.

This quote suggests that action leads to learning and that starting is the first step to gaining the knowledge necessary for success in a chosen niche.

People just want to skip to the last step when there are prerequisites to getting there, which is why prerequisites exist.

The quote stresses the importance of understanding and completing the necessary preliminary steps before attempting to achieve the final goal in entrepreneurship.

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