The 3 Evil E's Entrepreneurs Make Ep 509

In a discussion led by Alex Mosey, CEO of Allied Prestige Labs, the conversation delves into the "three entrepreneurial evils" that can derail businesses: expectations, emotions, and expenses. Mosey emphasizes the dangers of setting unrealistic goals without a clear path to achievement, which often leads to poor, hasty decisions. He advises shifting focus from outcome-based expectations to process-based ones, maintaining emotional equilibrium to avoid flip-flopping decisions, and making decisions from a state of contentment rather than scarcity. Additionally, he warns against incurring unnecessary expenses in anticipation of growth, suggesting that growth should naturally lead to increased expenses. Mosey concludes that managing these three aspects can prevent destructive cycles in entrepreneurship and promote a more stable, process-oriented approach to business growth.

• Alex Mosey introduces the concept of the three "evil E's" that commonly lead to entrepreneurial mistakes.
• These "evil E's" are observed patterns among entrepreneurs that can lead to significant errors in judgment and business strategy.
• Alex aims to discuss each of the "evil E's" and provide strategies to mitigate the mistakes arising from them.
• He also plans to reveal which of the "evil E's" he considers the most detrimental.

The biggest mistakes that are made stem from these three evil ease.

• This quote highlights the importance of understanding and addressing the three "evil E's" to avoid common entrepreneurial mistakes.

• Unrealistic expectations are identified as the first "evil E."
• Entrepreneurs often expect rapid success, such as reaching $1 million in monthly sales within an unrealistic timeframe.
• Setting arbitrary goals and timelines can lead to shortcuts and risky decisions that may harm the business.
• Alex advises shifting from outcome-based expectations to process-based expectations while maintaining a standard of excellence.
• He emphasizes the mantra "good process drives good results" as a guiding principle.

And the reason that this one is so evil is that most of the time, us entrepreneurs, we think that everything has to happen immediately, right?

• This quote explains the danger of unrealistic expectations, where entrepreneurs believe success must come quickly, often leading to poor decision-making.

What I see again and again and again of the people who make way more money than I do is they have reasonable expectations that would be unreasonable to achieve based on process, right?

• Alex notes that successful individuals set reasonable expectations aligned with a strong process, rather than focusing solely on outcomes.

• The second "evil E" is emotions, which can be detrimental to business decisions.
• Successful CEOs like Jeff Bezos, Charlie Munger, and Warren Buffett are cited as examples of leaders who manage their emotions effectively.
• Alex suggests that while these CEOs are not without emotions, they maintain an even-keeled approach to decision-making.

The second thing that will kill your business. If you look at the biggest ceos in the world, you look at the bezos, you look at Munger, you look at Buffett, you look at all these guys, right? And what you may notice is that they are very devoid of emotion.

• This quote points out the importance of emotional regulation in business, as exemplified by some of the world's most successful CEOs.

• Emotions can significantly impact decision-making, often leading to inconsistency.
• Recognizing emotional states is crucial to improving decision-making quality.
• Slowing down the decision-making process when emotional can prevent mistakes.

"And so if you're looking and you flip flop a lot on decisions, as in you're presented the same data, and one day you feel this way, and another way you feel, another day you feel this way. And literally, how you process the decision flip flops all the time. It's because you're being subject to emotions."

This quote highlights the problem of decision inconsistency due to emotional fluctuations, emphasizing the need for self-awareness in emotional states to maintain decision-making integrity.

"But if you can detect when you are emotional, then you can decrease the speed of your decision making, which is usually contrary to what most people do when they are emotional."

Alex Mosey suggests that detecting one's emotional state can help in consciously slowing down the decision-making process, which is contrary to the common reaction of making hasty decisions when emotional.

• Delaying decisions can help in avoiding mistakes driven by emotions.
• Sleeping on a decision can provide clarity and a different perspective.
• Decisions made from a state of contentment are likely to be better.

"I can't tell you the amount of huge mistakes that I was able to avoid simply by sleeping it off. Giving myself 24 hours to think on it."

Alex Mosey shares his personal strategy of postponing decisions to avoid errors that could be caused by an immediate emotional response, suggesting a practical approach to more rational decision-making.

"The best decisions that we make for ourselves, in my opinion, or that I have made for myself, have come from a state of contentment."

The speaker believes that decisions made when one is content are superior, associating positive emotional states with better judgment and outcomes.

• Emotional states can dramatically alter one's perception of the world.
• Contentment provides a conducive emotional state for making significant decisions.
• Gratitude and perspective can be indicators of the right time for decision-making.

"How can the world look so different only after 9 hours of sleep? It's because our emotional state is different."

Alex Mosey points out the drastic change in perception that can occur after sleep, attributing it to a shift in emotional state, which underscores the influence of emotions on how we view our circumstances.

"It's in those time periods where you should make big decisions for your life and then know that you made them in the proper emotional state."

The speaker advises making important life decisions during times of contentment and gratitude, implying that such emotional states are more conducive to sound decision-making.

• Effective decision-making is a critical function for entrepreneurs.
• Managing emotions is a key aspect of making the right decisions in business.

"Making the right call is basically my only job now it's really just proper decision making."

Alex Mosey emphasizes the importance of decision-making in his role as an entrepreneur, highlighting that his primary responsibility is to make sound decisions for the success of his businesses.

• The podcast encourages listener engagement and connection via LinkedIn.
• Listeners are invited to connect and suggest potential connections for the host.

"So send me a connection request and note letting me know that you listen to the show, and I will accept it."

The speaker invites listeners to connect on LinkedIn, fostering a sense of community and engagement with the audience, which is an important aspect of building a podcast's listener base.

• Alex Mosey discusses the importance of making complex decisions when in a state of contentment and gratitude.
• He suggests that decisions made from this positive emotional state are likely to have a longer time horizon and therefore be more considered and effective.
• Mosey advises against making important decisions when not feeling content or grateful.

"And so when I sense myself in a well rested, content, full of gratitude mood, that is when I want to look at my most complex issues, my most complex multivariabled decisions, and say, this is what I think the best course of action is, and then sticking with that, even when the trials and tribulations that are inevitably going to happen as a result of the decision later down the road."

Alex Mosey emphasizes the benefit of addressing complex decisions when in a positive emotional state, as this approach helps to maintain a consistent course of action despite future challenges.

• Emotions can heavily influence what entrepreneurs believe should happen in their business ventures.
• Alex Mosey conveys that emotions can distort expectations and lead to unnecessary expenses that increase the risk of not meeting those expectations.
• He suggests that entrepreneurs should work to decrease liabilities in order to increase the likelihood of meeting their goals.

"So if you think about expenses in general, they are liabilities. They are risk that we take on. And so if our goal as entrepreneurs is to increase our upside and decrease our downside, that is kind of entrepreneurship and business in general, then actively thinking about decreasing our downside, our liabilities, is a way of increasing the likelihood that our expectations are met."

Alex Mosey defines expenses as liabilities that carry risk and advises entrepreneurs to focus on reducing these liabilities to improve the chances of achieving their business expectations.

• Alex Mosey warns against the entrepreneurial mistake of incurring expenses to satisfy emotional needs stemming from childhood.
• He criticizes the practice of hiring additional staff in anticipation of growth, suggesting that growth should naturally lead to hiring, not the other way around.
• Mosey acknowledges that commission-only sales reps may be an exception, but generally advises against spending to preemptively anticipate business expansion.

"And so one of the biggest mistakes and biggest evils that will destroy entrepreneurial businesses is because they set massive expectations when they are emotional and emotionally deficient, because they need to satisfy emotional needs that their parents didn't meet when they were kids, they then incur expenses that they shouldn't otherwise have to meet these demands that are completely arbitrary and made up in their minds."

Alex Mosey discusses how entrepreneurs can sabotage their businesses by making emotionally charged decisions that lead to unnecessary expenses, often as a way to fulfill unmet emotional needs from their past.

• Alex Mosey emphasizes the importance of having cash reserves and signed contracts before incurring additional expenses.
• He encourages entrepreneurs to solve problems as they arise rather than spending in anticipation of hypothetical growth.
• Mosey assures that with immediate demand, entrepreneurs will find ways to solve problems and the necessary resources will follow.

"It's much easier to solve problems with cash in the bank, with contracts signed. And you're an entrepreneur, like solving problems is what we do, right? And so if you're in that state, think about how much, if you have the immediate demand, right. You will solve the problem and the people will come. I promise you."

Alex Mosey advises entrepreneurs to focus on solving problems with available resources, asserting that growth will naturally lead to the acquisition of needed personnel and resources, reinforcing the principle of problem-solving as a core entrepreneurial skill.

• Alex Mosey speaks about the dangers of anticipating growth incorrectly, using his own experience with Prestige Labs.
• Hiring too many employees in anticipation can lead to decreased team culture, morale, and efficiency.
• Overstaffing prevents the focus on creating effective processes and leads to a poor customer experience.

"I hired 25 support reps in anticipation of growth for our supplement company, Prestige Labs, two years ago. And I currently now have four people that handle more business than the 25 did."

• This quote emphasizes the inefficiency that resulted from overhiring based on growth expectations.

"And so what happens is when you anticipate growth, you don't even know what the growth is going to look like. And so you basically just put people there, the culture of the team decreases, the morale of the team decreases, they're being less efficient."

• Alex explains the negative consequences of hiring based on uncertain growth expectations.

• Alex Mosey identifies expectations, emotions, and expenses as the three main factors that can undermine entrepreneurs.
• He argues that expectations are the most dangerous because they are based on beliefs that we consider to be true without question.

"And so when I look at the things that undo entrepreneurs and entrepreneurial businesses, these are the three evil e's, expectations, emotions and expenses."

• This quote introduces the concept of the "three evil e's" that can harm entrepreneurial ventures.

"And it's this guy, in my opinion, expectations. Because what we believe, because these are basically beliefs, just said differently, right?"

• Alex Mosey highlights expectations as the most detrimental factor, equating them to rigid beliefs.

• Alex Mosey suggests that by calling beliefs "assumptions," they become more flexible and open to change.
• This reframing allows for more adaptability and the ability to incorporate new information into decision-making.

"Another way to say this, and this is a really good way that I got from a different coach to reframe beliefs, is she said, if you just call all your beliefs assumptions, they will be far more malleable."

• The quote suggests a strategy for making beliefs more adaptable by referring to them as assumptions.

"But one of them is approachable, one of them is malleable, one of them can take new feedback and new inputs and new data, and the other one is a must, a should, a have to, right?"

• Here, Alex contrasts the flexibility of "assumptions" with the rigidity of "expectations."

• Focus on product quality, customer satisfaction, and excellent processes to maintain stable emotions and avoid poor decision-making.
• Making decisions based on gratitude and contentment can prevent the negative loop of scarcity, deficiency, and unnecessary expenses.

"And so if we can readjust our expectations and be focused on our product over delivering, delighting the customers, being intolerant of anything but excellence in the process, and because of that, our emotions stay more stable..."

• This quote emphasizes the importance of prioritizing product quality and customer satisfaction to maintain emotional stability and avoid a negative decision-making cycle.

"All right, so this is a loop that self reinforces, and it can either be a virtuous or vicious cycle."

• Alex describes how the interplay between expectations, emotions, and expenses can form either a beneficial or harmful cycle in business.

• Entrepreneurs should avoid hiring prematurely and allow growth to justify expenses.
• Decisions should be spaced out, made from a place of gratitude, and focus on processes rather than outcomes.

"Don't hire before you need it. Let the growth pay for the expenses. When you're making decisions, try and extend the space."

• Alex advises against early hiring and advocates for thoughtful decision-making.

"And if you can, keep the high, like keep your high expectations, but keep them on process, not on what has to happen, because when you reverse it the other way, you'll start making terrible decisions."

• The final quote suggests maintaining high expectations for processes rather than fixating on specific outcomes to avoid poor decision-making.