Relinquishing Control The Path to Growth and Success (on The Game Changing Attorney Podcast) Pt. 2 July ‘23 Ep 625

In this insightful discussion, the speakers, including entrepreneurs and a host, delve into the challenges and strategies for entrepreneurial success. They emphasize the necessity for entrepreneurs to relinquish control and delegate tasks to scale their businesses effectively. The conversation highlights the importance of creating a high-quality product or service before scaling, as premature promotion can lead to a perpetual uphill battle. They also address the pitfalls of learning the wrong lessons from experiences, such as attributing a failed hire to the concept of hiring itself rather than one's own lack of skills in recruitment and management. The speakers also discuss the role of humility in entrepreneurship, noting that successful entrepreneurs often exhibit humility and a willingness to admit their shortcomings. Additionally, they touch on the impact of AI on businesses, urging listeners to stay updated and leverage AI to avoid being outcompeted. Finally, they reflect on personal motivations and the pursuit of happiness through engaging in fulfilling work and creating a series of enjoyable days.

• A successful massive fortune is contingent on the quality of the product being sold.
• Entrepreneurs often promote their product too soon, leading to a perpetual uphill struggle.

"You're not going to build, like, the massive, massive fortune unless the thing you sell is good."

This quote emphasizes that the foundation of significant financial success is a high-quality product.

• The podcast discusses strategies for gaining more customers, increasing customer value, and retaining them.
• It also covers the lessons learned from failures encountered in the process.

"About how to get more customers, how to make more per customer and how."

The quote outlines the podcast's focus on customer acquisition, maximization of customer value, and retention strategies.

• Entrepreneurs must learn to give up control in various aspects of their business to grow.
• The process involves delegating tasks to others to gain leverage and focus on high-level activities.

"Entrepreneurship is a continual giving up of control at all levels."

This quote highlights the necessity for entrepreneurs to delegate control as they scale their businesses.

• Entrepreneurs should identify tasks that can be easily and cheaply outsourced.
• The goal is to free up time for more profitable activities and to keep trading up time for higher leverage.

"And you replace the first one that gives you the most time for the least amount of money."

The quote suggests prioritizing the delegation of tasks based on the time saved relative to the cost involved.

• Entrepreneurs need to confront the reality of their situation to overcome poverty or stagnation.
• The metaphor of a diet of time is used to illustrate the need for change to achieve different outcomes.

"Confrontation. This is why you're poor."

The quote directly addresses the need for entrepreneurs to face their challenges head-on to change their financial trajectory.

• Entrepreneurs often have delusions, some of which are optimistically necessary, but they can also hinder progress.
• Believing that no one else can perform their tasks as well as they can is a common delusion that needs to be overcome.

"A lot of entrepreneurs are delusional."

This quote points out that while some level of delusion is part of entrepreneurship, it can become a barrier to growth if not managed.

• Entrepreneurs often learn the wrong lessons from their experiences, such as believing that certain roles cannot be filled effectively by others.
• The correct approach is to identify personal deficiencies in skills like hiring and managing and then work to solve them.

"A small business owner hires the first salesperson... But the correct lesson is, phrasing the thing that didn't work as a deficiency personally, which is, okay, this salesman didn't work. I do not know how two."

The quote provides an example of how entrepreneurs should frame their failures as personal skill gaps that can be addressed, rather than as inherent flaws in the concept of delegation.

• There seems to be a correlation between success and humility among entrepreneurs, especially at higher levels of business achievement.
• Success in business often requires situational humility, and arrogance can be domain-specific.

"I also think that you can have situational ego because there are definitely some very wealthy people who are very successful, who do have egos, who are soft made."

This quote acknowledges that while some successful entrepreneurs may exhibit ego, humility is often present and can be specific to certain aspects of their lives or business domains.

• Entrepreneurs often have no issue outsourcing finance and administrative tasks.
• They derive their self-worth from areas like product development and promotion, which they are reluctant to delegate.
• This attachment to certain business areas can be a psychological challenge in entrepreneurship.

"Like a lot of entrepreneurs who are promotional or product driven, entrepreneurs don't have any problem outsourcing finance. It's not like they don't have a huge thing with that. Right. But they have a huge problem if someone wants to take over product or take over promotion or whatever for the business. And so it's because they just derive their soft worth from that."

The quote explains that entrepreneurs often tie their identity and self-worth to the core aspects of their business, such as product development and promotion, making it difficult for them to delegate these areas.

• The goal of acquisition.com was to invest in businesses with great founders and products that would benefit people.
• The strategy included building a personal brand to attract companies aligned with their values.
• The aim was for the personal brand to act as a pre-filter for value alignment, similar to a marriage based on shared mission and values.
• They receive many companies reaching out for investment, indicating the success of their strategy.

"I wanted it to be the family office for Leila and I to invest our capital into businesses that we believed in, with founders that we thought were awesome and products that we believe were going to help people."

This quote outlines the foundational vision for acquisition.com, which was to be a platform for strategic investment based on belief in the business, its leaders, and the product's capacity to help people.

• Successful businesses have a compounding effect built into them, which allows for exponential growth.
• This can manifest as a direct return on investment, like opening new facilities, or through customer referrals and salesperson recruitment.
• The focus is on creating businesses that can grow massively over a long period.

"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."

The quote emphasizes the importance of having a mechanism within a business that allows for growth to compound over time, which is a characteristic of the best businesses.

• A great product can market itself, leading to what is described as "long term lazy" - high initial effort but less effort in the long run.
• The alternative is to create a mediocre product quickly, which then requires continuous marketing.
• The real challenge for many businesses is the willingness to invest the time to create an exceptional product or service.

"It's easier. So it's selfish, 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."

This quote captures the philosophy that investing significant effort into creating an excellent product initially can lead to less effort in the long term, as the product's quality drives its own marketing and sales.

• Determining when a product is ready for release is a balance between perfection and practicality.
• For a book, readiness can be when any further changes would detract from it.
• For ongoing products like software, continuous improvement is key, but there should be a focus on achieving product-market fit.

"This is ready when for me, there was nothing left to do. Like anything else that I would add or subtract to, it would make it worse."

The quote suggests that a product is ready when it reaches a point where any additional changes would not improve it, indicating that it's time to launch.

• Entrepreneurs who are skilled in marketing might promote their product too soon, before it's fully developed.
• This can lead to a difficult path of constant uphill marketing and may prevent the building of a massive fortune.
• The key is to balance promotional skills with product development to ensure the product is truly ready and good.

"And so what happens is most entrepreneurs who are promotional promote too soon, and then they have to fight this uphill battle for the rest of their existence."

This quote highlights the risk of promoting a product before it's fully developed, which can lead to a perpetual struggle to maintain market presence and growth.

• As businesses grow, they target increasingly colder audiences less likely to buy, raising customer acquisition costs.
• Advertising costs are rising, compounding the problem and decreasing profitability.
• A business must have a strategy to decrease acquisition costs, such as customer referrals, to avoid hitting a growth plateau.
• Without referrals, a business may generate revenue without profit, stalling growth.

"You go into colder and colder audiences who are less and less likely to buy your thing. And so your cost to acquire continues to rise over time because also advertising." "Costs only go one way, which is up just the cost variable." "And unless you have a concurrent force or something that's going in parallel with that growth, which is your customers, bring you other customers to decrease that cost of acquisition, you eventually hit a plateau where you can do lots of revenue." "And not a lot of profit, and you can't grow from there."

These quotes highlight the challenges of scaling customer acquisition as markets become saturated and advertising costs rise, emphasizing the importance of customer referrals for sustainable growth.

• The goal of acquiring initial customers is to gather feedback and improve the product, not just to scale the acquisition channel.
• A litmus test for a good product is the rate of customer referrals.
• Marketing efforts are enhanced when a business has a strong referral base, which is crucial for outcompeting rivals.

"Getting your first acquisition channel going, whatever it is, is not to then scale that. The idea is that you get enough customers in that you can get feedback, continue to improve the product, and then once you get enough people referring and bringing friends, which is my litmus test for it, is good enough, then you scale it." "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."

These quotes explain that the primary purpose of initial customer acquisition is to enable product improvement through feedback and that the presence of referrals is an indicator of when it's appropriate to scale marketing efforts.

• The speaker emphasizes the significance of organic growth through word of mouth, as it is the primary means of growing their podcast.
• The ask from the audience is to continue sharing and promoting the podcast as they were introduced to it, fostering a community-driven expansion.

"The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything. My only ask is that you continue to pay it forward to whoever showed you or however you found out about this podcast, that you do the exact same thing."

This quote underscores the reliance on organic, word-of-mouth promotion for the growth of the podcast, rejecting traditional advertising and sponsorships.

• Anger towards competitors is counterproductive and stems from ego.
• Small business owners often mistakenly view others as competition when the real issue may be the quality of their products.
• Focusing on customers rather than competitors is more profitable.
• In the investment world, competitors serving similar markets can be consolidated into a larger entity.
• Obsessing over competition is a mental trap that detracts from customer-focused strategies.

"Most small business owners look at other small business owners and see them as competition, but 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 customers, not your competition." "The biggest cost of competition, is the obsession over what everyone else is doing, rather than taking that same obsession and applying it to your customers. And that would make you more money."

These quotes convey the idea that competition is often a distraction for small business owners and that success comes from prioritizing customer satisfaction over fixating on competitors.

• Anger and competition are insignificant in the grand scheme of time and the universe.
• Most people are too preoccupied with their own lives to be concerned with others, including competitors.
• The fear of judgment and the desire to leave a lasting legacy are irrational, as most people will not be remembered long after they pass away.
• Taking risks and pursuing dreams should not be hindered by the fear of others' opinions.

"And whoever's listening to this probably hasn't thought about the Queen of England. And she was 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, but most of us won't even be remembered for six months." "It's these one way obsessing over things that are happening only in the entrepreneur's mind."

The quotes emphasize the importance of maintaining perspective on life's events, including competition and the pursuit of success, and suggest that concerns about legacy and others' opinions are often overstated.

• Discusses the desire for personal freedom in the choices individuals make.
• Highlights the willingness to take on significant risks as part of personal freedom.

To have more personal freedom in the choices we make and take on big risks.

This quote emphasizes the value of autonomy in decision-making and the acceptance of risk as a component of exercising personal freedom.

• Conversation shifts to AI, specifically its evolution from GPT-3 to GPT-4.
• The discussion focuses on AI's potential effect on law firms and professional, service-based businesses.

Yeah, and I want to get your take on AI. I know you've posted a bit about this. I want to get your perspective now.

The quote indicates a desire to explore the speaker's current thoughts on AI, acknowledging their previous engagement with the topic.

• Suggests that success in the future will not come from avoiding AI but from learning to use it effectively.
• Emphasizes that those who adapt to AI will have a competitive advantage.

You're not going to get replaced by AI. You'll get replaced by somebody who knows how to use AI better than you.

This quote underlines the importance of adapting to AI as a means of staying relevant and competitive in the professional landscape.

• Reflects on the unpredictability of AI's impact on the job market.
• Contrasts expected blue-collar job displacement with the actual impact on creative jobs.

Even if you had asked two years ago which jobs AI is going to take first, people would have said blue collar would have been drivers, laborers, et cetera.

The quote highlights the initial expectations regarding AI job displacement, which were focused on blue-collar roles rather than creative professions.

• Discusses the paradox of technological advancement not necessarily increasing human happiness.
• Raises concerns about the potential existential risks posed by AI.

And we know that technology does not change our subjective well being one bit.

This quote challenges the assumption that technological progress leads to greater human happiness, suggesting that this may not be the case.

• Encourages listeners to invest time in understanding and using AI tools to remain competitive.
• Stresses the importance of staying updated with AI developments and the rapid pace of progress.

It would behoove you to spend your weekends learning how to prompt the de Nir, staying up to date with the new plugins and overlays and Auto GPT and baby Agi and all these things that are coming out, because if you aren't, your competitors are.

The speaker urges the audience to actively engage with emerging AI technologies to maintain a competitive edge in their field.

• Suggests that character traits often perceived as innate can be developed like skills.
• Promotes the idea that one can learn and reinforce desirable traits over time.

Traits that are desirable are not actually traits, they're skills.

This quote reframes character traits as skills that can be learned and cultivated, rather than fixed attributes one is born with.

• Defines intelligence as the rate of learning and the ability to change behavior quickly.
• Encourages active application of knowledge to be considered truly intelligent.

Intelligence is a rate of learning. It's a speed. How quickly do you learn?

The speaker defines intelligence in terms of learning speed and adaptability, suggesting that real intelligence is demonstrated by the ability to change behavior in response to new information.

• Describes a typical day focused on business activities, including investment strategies and book management.
• Discusses motivation, finding joy in business, and the alignment of personal interests with market value.

What's the day in the life like right now for you?

This quote leads into a discussion about the speaker's daily activities and motivations, providing insight into their personal and professional life.

• Shares a mentor's advice about the importance of enjoying as many days as possible.
• Emphasizes the pursuit of subjective well-being through engaging in enjoyable activities with people one likes.

I'm pretty sure the key to life is stringing as many of those days in a row as you can.

The quote presents a philosophy of life centered on maximizing enjoyment and well-being by consistently doing what one loves.