The Biggest Mistakes that Entrepreneurs Make Ep 654

In this insightful discussion, the host of "The Game" podcast, along with guest Mark Bell, delves into the common pitfalls faced by entrepreneurs, particularly those in the sub $5 million revenue range. They emphasize the importance of focusing on simplicity and core competencies rather than overcomplicating businesses with unnecessary diversification. Drawing parallels between weightlifting and entrepreneurship, they argue that just as lifting heavier weights prematurely can lead to injury, prematurely adding complexity to a business can impede growth. Instead, they advocate for peeling back to what works, mastering it, and gradually scaling up, much like progressively increasing weight at the gym. They also touch on the dangers of entrepreneurial greed and the allure of chasing every opportunity, which can dilute focus and ultimately harm the business. The key takeaway is to concentrate on one's strengths, expand the customer base, and resist the temptation to overextend and complicate the business model.

• Entrepreneurs at the $2-5 million revenue mark often make the mistake of trying to grow by repeatedly creating new offerings for their existing audience.
• Expanding the target audience is a crucial alternative strategy for business growth.
• Constantly adding new products or services without considering audience expansion can be detrimental to long-term success.

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 rather than thinking maybe I should expand my audience.

This quote emphasizes the common error of focusing solely on product expansion rather than audience expansion to grow a business.

• Acquisition.com aims to build a billion-dollar business.
• The speaker expresses a desire to document the entrepreneurial journey in a way that high-profile entrepreneurs like Bezos, Musk, and Buffett have not.

I'm trying to build a billion dollar thing with acquisition.com. I always wish bezos, Musk and Buffett had documented their journey, so I'm doing.

The speaker is detailing their goal with acquisition.com and lamenting the lack of detailed documentation from other successful entrepreneurs, which they aim to provide.

• Mark Bell's visit and discussion highlighted the importance of adjusting strategies to one's current capabilities.
• In business, like in weightlifting, recognizing when a strategy is too advanced for the current stage and adapting accordingly is key to long-term success.
• Humility and the ability to scale back for more appropriate growth are admired and beneficial traits in both fitness and business.

And there was this really important point where he know, I wish more people would just peel weight off the bar. He said, I always respect a guy who's lifting with stronger guys and says, you know what, guys? I'm going to peel some weight off so that I can do this weight the right way.

This quote draws a parallel between the wisdom of reducing weights in the gym to lift correctly and the importance of entrepreneurs scaling their strategies to match their current business capabilities.

• Entrepreneurs often make the mistake of adopting strategies that are too advanced for their business's current stage.
• Acquisition.com encounters many companies seeking investment that exhibit this issue, particularly those under $5 million in revenue.
• Implementing the right strategy at the wrong time can be as harmful as a poor strategy.

And one of my biggest pet peeves, comma, 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. And the reason is not because the strategy is wrong, but because it's too advanced.

The speaker is highlighting a critical mistake made by many entrepreneurs: implementing strategies that are too complex for their business's level of development, which can jeopardize long-term success.

• In business, unlike weightlifting, progress is not linear; it involves managing complexity.
• Simplicity is often the key to scaling a business effectively.
• Entrepreneurs frequently make the mistake of attempting to expand too quickly or take on more complex projects than they can handle.
• The phrase "I'm leaving money on the table" can lead entrepreneurs to pursue additional revenue streams prematurely.

"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 highlights the contrast between the straightforward progression in weightlifting and the intricate nature of business growth, emphasizing the importance of simplicity for scaling.

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

The quote metaphorically suggests that entrepreneurs often overestimate their capacity to manage complex business ventures, akin to wearing oversized shoes.

• Entrepreneurs may be tempted to expand their business offerings too quickly in an effort to maximize revenue from each customer.
• Execution of a strategy that involves adding more services or products can be operationally complex and may not always be the best approach.
• Focusing on a core business that is working well might be more advantageous than diversifying too soon.

"And so they have this thing that's working, and then they think to themselves, well, I don't want to fur that business out because they should get that for me."

This quote reflects the thought process of an entrepreneur who is reluctant to narrow their business focus, fearing missed opportunities for additional revenue.

"Is that a great strategy? Yes. Is the execution of that strategy very advanced from an operational perspective? Yes."

The quote acknowledges that while expanding business services can be a good strategy, the operational demands of such expansion are significant and may not be suitable for all entrepreneurs.

• A general contractor's attempt to diversify his business by adding real estate flipping and general contracting work is examined.
• The contractor feels compelled to utilize his resources fully and respond to client needs, which leads to business diversification.
• The key question posed is whether focusing on one aspect, such as roofing, could lead to a $100 million business, suggesting that specialization might be more profitable than diversification.

"I had a buddy from high school approach me, and he was like, hey, this is what I'm doing with my contracting business."

This quote introduces a real-life example of an entrepreneur who is diversifying his business activities.

"And the question is, what problem are we solving if the goal is to grow the business? Do we think that we could have 100 million dollar roofing business? The answer is yes."

The quote challenges the entrepreneur to consider the ultimate goal of business growth and whether a more focused approach could lead to substantial success.

• The possibility of scaling a general contracting or house flipping business to $100 million is acknowledged.
• The challenge of managing multiple large-scale businesses concurrently is highlighted as very unlikely for most individuals.
• Acquisition.com offers to consult with business owners aiming to scale to significant figures like $100 million.
• A common mistake among entrepreneurs is trying to expand their business by adding multiple products or services instead of focusing on their core competency.
• The advice given is to identify and concentrate on the product or service that aligns best with one's skills and has the potential to serve the most people.
• The importance of focusing on making more money through the core business rather than getting distracted by additional ventures is emphasized.
• The concept of "peeling weight off the bar" is introduced, meaning to simplify and concentrate on what one does best.
• The strategy includes mastering one area before considering adding new elements at scale, preferably when someone else can manage it.
• The tendency to diversify offerings is sometimes driven by greed and the desire to capture more revenue from transactions that could simply earn affiliate commissions.

"100 million dollar general contracting business? The answer is yes. Do we think we have 100 million dollar flipping houses business? The answer is yes. Can you have all three? Very unlikely. Unless you're an Elon. Unless you're a freak. But most people aren't. And that's okay. It's normal."

This quote acknowledges the potential to scale specific businesses to $100 million but suggests that running multiple businesses of this size simultaneously is unrealistic for most people.

"Mosey Nation, real quick. If you are a business owner that has a big old business and wants to get to a much bigger business, going to 5100 million dollars plus, we would love to talk to you."

Acquisition.com is reaching out to business owners interested in scaling their businesses to the next level, offering consultation services.

"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 mistake among entrepreneurs: attempting to grow their business by adding a variety of products or services instead of focusing on their main strength.

"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."

Entrepreneurs are advised to evaluate their offerings, identify their strongest product or service, and focus on scaling that area to serve the most people effectively.

"Because the problem that we're trying to solve is that we're trying to make more money. And so us doing all these other things, it distracts from the core business opportunity."

The quote emphasizes that diversifying too much can distract from the primary goal of making more money through the core business.

"We need to peel things down and focus on the weight that we can do and get more repetitions in it that this weight, so that we then can earn the right later to maybe add one thing in at scale, maybe when we have someone who can run that and drive that rather than you."

The strategy of simplifying the business focus is likened to weightlifting, suggesting that one should master their core business before adding new ventures, and only if there is someone capable of managing it.

"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 suggests that the desire to diversify business offerings is sometimes driven by greed and the envy of others' earnings, proposing that affiliate commissions could be a simpler alternative to in-house expansion.

• Entrepreneurs often make the mistake of running multiple businesses simultaneously without making substantial money from any.
• The key to success is simplifying the business model, focusing on one venture, and mastering it before expanding.
• Growth in business is likened to weightlifting, where one should lift appropriate weights with more repetitions instead of adding too much weight at once.
• Saying no to new opportunities can increase attractiveness and focus, leading to higher levels of success.
• The speaker had personal experience with juggling multiple businesses and not making money until they focused on one.
• The principle of focusing on one thing applies even as the business grows and new opportunities arise.
• Most entrepreneurs will not reach the limit of their market size, indicating the importance of focusing on one thing to maximize potential.

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.

The speaker emphasizes the importance of simplifying a business by removing complexities and focusing on strengthening the core aspects through repetition and refinement.

And then I did more reps with that one, with the one plate on the bar. I did as many reps as I could, and then I was able to level up my entrepreneurial skill set on a clear opportunity of all of the opportunities that I was best at.

This quote highlights the speaker's strategy of focusing on a single business to hone skills and capitalize on the best opportunity available to them.

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 speaker draws an analogy to the concept of scarcity increasing attractiveness, suggesting that saying no to certain opportunities can actually enhance one's appeal and success in the long run.

Because what happens is you get to 100, and then you do another thing, and then your attention split, and then you can't get past here.

Here, the speaker warns against the dilution of focus that comes with pursuing multiple ventures simultaneously, which can hinder growth beyond a certain point.

And so 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 implies that the only limitation to focusing and improving on one's business should be reaching the absolute market capacity, which is rare.

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

The speaker concludes by directly addressing entrepreneurs, reinforcing the message of simplification, focus, and consistent effort to achieve both financial and personal growth.