The One Problem Every Entrepreneur Has… Ep 597

Summary Notes


Alex, the host of "The Game" podcast and founder of, delves into the critical role of identifying and nurturing 'A players' in scaling businesses. He shares insights from his strategic meeting where new talent significantly contributed to company growth, emphasizing the entrepreneur's universal challenge: finding, hiring, managing, and cultivating the right people. Alex illustrates the stark contrast between 'A players' who take ownership, strive for excellence, and drive growth, and 'B players' who merely meet the job's basic requirements. He recounts a story of a brand manager's proactive approach to launching a new apparel line, showcasing the 'A player's' dedication to quality and customer experience. Alex encourages entrepreneurs to raise the bar and create a winning culture by attracting and retaining top talent, ultimately determining a company's success or failure.

Summary Notes

Setting the Standard to Attract A Players

  • The importance of setting high standards to attract top talent and cultivate an A-player team.
  • High standards elevate the entire company culture.
  • Wealthy businesspeople view business as a competitive game.

"You have to set the standard so that a players will be attracted to you and also so that you can have a team of a players. And then the entire culture rises."

This quote emphasizes the need for setting high standards within a business to attract and maintain a team of high-performing individuals, which in turn improves the overall culture and performance of the company.

The Entrepreneur's Singular Problem: People

  • Entrepreneurs commonly face a singular, multi-faceted people problem.
  • Challenges include finding, hiring, managing, and growing talent.
  • The people problem becomes more apparent when a business scales, particularly after reaching $10 to $30 million in annual revenue.

"Like, every single entrepreneur has one problem. They think they have multiple problems, but they have one problem, and it's a people problem."

The speaker identifies that despite entrepreneurs believing they face numerous issues, the core challenge lies in managing people, which encompasses several aspects from finding to cultivating talent.

Talent as the Key to Business Growth

  • Recognizing talent as the crucial element for business expansion.
  • The shift in focus from the entrepreneur to the talent when scaling from $30 to $100 million.
  • The realization that the business should operate independently from the entrepreneur's need to be needed.

"Crossing 30 to 100 was really understanding that. Was understanding that it was all about the talent."

This quote highlights the speaker's personal realization that the growth of a business, especially when scaling significantly, is primarily dependent on the quality of the talent within the organization.

The Entrepreneur's Ego vs. Business Needs

  • The entrepreneur's need to feel needed can conflict with the business's need to operate autonomously.
  • Personal needs stemming from childhood can influence an entrepreneur's approach to business.
  • The business's success should not be reliant on the entrepreneur's presence.

"It's actually not about you. And that can be really hard for your ego because you love being needed."

The quote addresses the psychological challenge entrepreneurs face in separating their personal needs from the needs of the business, emphasizing that the business should ultimately function without their constant involvement.

Strategic Vision vs. Operational Leadership

  • The entrepreneur can maintain strategic vision while stepping back from daily operations.
  • As a company grows, it evolves into a conglomerate of companies.
  • Reference to Jeff Bezos stepping down after decades to illustrate the transition.

"Bezos just stepped down for the first time after 30 years or whatever, but the actual doing, the leading, all that stuff, over time, the company becomes a company of companies, right?"

The speaker references Jeff Bezos to illustrate that even long-standing leaders eventually transition away from operational roles, allowing the company to mature into a self-sustaining entity.

Distinguishing A Players from the Rest

  • The critical importance of identifying and recruiting A players.
  • Entrepreneurs' tendency to overestimate their team's capabilities due to optimism.
  • Recognizing the real impact of A players when they advance the company in unexpected ways.

"And I can't really stress how unbelievably important this is."

This quote underscores the speaker's view on the paramount importance of discerning and securing A players for the success and growth of a company.

Entrepreneurial Optimism vs. Reality

  • Entrepreneurial optimism can lead to a distorted view of team performance.
  • The need for a realistic assessment of team members' capabilities.
  • The transformative experience of witnessing team members independently drive company growth.

"If you can't look at someone on your team and be like, I think this person's kind of weak, or, I think this person could be better, then you really have rose colored glasses on."

The speaker warns against the dangers of unwarranted optimism in evaluating team performance, advocating for a more critical and realistic perspective to truly recognize and address weaknesses.

Personal Breakthrough in Delegating Sales

  • The speaker experienced a personal breakthrough when someone else made sales for their business.
  • Initially, the speaker had been the sole salesperson for their business.
  • Realizing others could contribute to sales was a significant moment.
  • This breakthrough allowed the speaker to focus on running the business rather than just making money.

"I remember I cried because I heard about it on the phone, and they're like, yeah, I sold two people today, and I had done every single sale for my business for, like, a year and a half."

The quote illustrates the emotional impact of the speaker's realization that they could delegate sales responsibilities, which was a pivotal moment in their business journey.

Team Growth and Business Expansion

  • The speaker recently observed team members growing the business without their direct involvement.
  • This growth is described as "really special" and "awesome" by the speaker.
  • The speaker's story serves as a segue into discussing the difference between A players and B players in a business context.

"And I think the level that I just recently had a breakthrough on was watching teammates actually grow the business without me."

The quote highlights the speaker's recent realization that their team can effectively contribute to the business's growth, which signifies another level of breakthrough for the speaker.

Promoting Ownership and Initiative

  • A brand manager in one of the speaker's companies exemplifies taking ownership.
  • The brand manager was tasked with identifying new revenue streams and proposed starting an apparel line.
  • The manager's proactive approach included contacting manufacturers and evaluating samples.

"She said, I'm not sending that to my customers."

The quote demonstrates the brand manager's sense of ownership and commitment to quality, reflecting one of the business's core tenets.

Differentiating Between A Players and B Players

  • A players take ownership and go beyond just identifying problems—they find solutions.
  • The brand manager's actions contrast with hypothetical B level employees who may not show the same level of initiative or ownership.
  • The speaker emphasizes the importance of having team members who act like owners to drive business success.

"But here's what I want to break apart for you. Imagine a normal person, a B level employee."

The quote sets up a comparison between the proactive brand manager (an A player) and a hypothetical B level employee, highlighting the different attitudes and approaches to work within a business.

Problem-Solving and Proactivity

  • The brand manager did not settle for poor quality and sought out better options.
  • She took the initiative to find manufacturers with high-quality products, even if it meant more work for her.
  • The manager's solution-oriented mindset led to a successful apparel launch.

"But I did find some manufacturers that don't do manufacturing and fulfillment... so I just need help figuring out, how many pieces do you want to order as a baseline."

The quote showcases the brand manager's proactive problem-solving skills, which contributed to finding a viable solution for the business's new apparel line.

B Player vs. A Player Approach

  • B players conduct minimal research, potentially just a Google search, and make decisions based on surface-level information like pricing.
  • A players seek high-quality products, ensuring customer satisfaction and repeat business, which increases the Lifetime Value (LTV) of the customer.
  • A players prioritize customer experience and continually think of ways to improve it.
  • The difference between B players and A players can determine whether a company merely survives or thrives.
  • Excellence and a high standard of work are essential for success.
  • Tolerance for mediocrity should be lowest at the top of the company hierarchy and should trickle down.

"That is what a B player would have done. And honestly, unless you have an a supervisor, the a supervisor probably would have let it go."

This quote highlights the lack of initiative and thoroughness a B player would exhibit, which could be overlooked if not managed by an A player supervisor.

"The difference is with the a scenario, you have a high quality product that people buy, enjoy, and buy again, and that massively increases the LTV of the customer."

This quote emphasizes the importance of product quality in customer retention and the impact it has on the customer's lifetime value to the company.

"It was having a level of intolerance for anything but excellence."

This quote underscores the necessity for a mindset that does not tolerate mediocrity and strives for excellence in all aspects of the business.

The Importance of Spreading the Podcast

  • The host does not run ads or sell products and relies on the audience to share the podcast.
  • Audience engagement through ratings, reviews, and shares is crucial to reach more entrepreneurs and make a positive impact.
  • The host's mission is to help entrepreneurs succeed and improve the experiences for their employees and customers.

"The only ask that I can ever have of you guys is that you help me spread the word."

This quote is a call to action for listeners to support the podcast by spreading the word, as it's the sole request from the host.

"It would mean the absolute world to me. And more importantly, it may change the world for someone else."

This quote conveys the host's personal gratitude for audience support and the broader impact it could have on others.

Leadership and Care for Excellence

  • The leader of a division or company should have the least tolerance for mediocrity.
  • A culture of excellence should permeate through every level of the organization.
  • If a subordinate demonstrates a higher commitment to excellence than their supervisor, a role reversal may be warranted.
  • Entrepreneurs may step down if they believe someone else is better equipped and more passionate about the company's mission.

"The person who cares the most should be the one in charge."

This quote encapsulates the belief that passion and a commitment to excellence are key leadership qualities.

"They, you know, Phil Knight doesn't run Nike anymore."

The quote provides an example of a founder stepping down when it's in the best interest of the company, illustrating that leadership transitions can be a natural part of a company's evolution.

Hiring Standards and Impact on Culture

  • Emphasizes the importance of intolerance for mediocrity in hiring practices.
  • Discusses the cascading effect of hiring subpar employees and how it can affect frontline workers.
  • Stresses the need to set a high standard to attract and maintain a team of A-players.
  • Highlights the cultural differences between winning teams and others, including practice attitudes, expectations, and teamwork.
  • Suggests that culture is shaped by having the right people and removing those who do not fit.

"The big picture here is having a level of intolerance for what an a versus A B looks like starts with us."

This quote sets the stage for the discussion on hiring practices, indicating that it begins with the leaders' intolerance for mediocrity.

"And so if you're one level removed or two levels removed, dear God, imagine what's being hired on the front line, right?"

This quote points out the potential degradation in hiring quality as one moves further from the leadership positions.

"And I'll end with this quote from the head of people for Chick fil A, which is a company I admire a lot. She said, a lot of companies want to compete against us in the championship, but the reality is they lost in the draft."

This quote from a Chick-fil-A executive illustrates the importance of hiring the right people from the start, likening it to winning a sports draft.

The Value of A-Players

  • Discusses the inherent value of hiring A-players who require less development and can grow the business.
  • Explains that some individuals inherently possess the qualities of winners, and the goal is to find and hire these individuals.
  • Argues that investing additional time in the hiring process to find A-players is worthwhile.
  • Highlights the importance of people in running a business, which is often overlooked by entrepreneurs who favor promotion, sales, and marketing.

"But some people just come with batteries included. There are some people who are just winners, right? And you just need to get out of their way."

This quote stresses that some hires are naturally talented and driven, and they should be allowed to excel without unnecessary interference.

"And I think that it's worth the extra five interviews, it's worth the extra 20 interviews to find the a player, because once that person is in place, they will grow, right?"

The speaker emphasizes the value of conducting thorough interviews to find the ideal candidate who will contribute significantly to the company's growth.

Self-Reflection and Team Evaluation

  • Encourages leaders to critically assess their teams and recognize areas of weakness.
  • Suggests that leaders should compare their own initiative and questioning to that of their team members.
  • Asserts that having team members who ask questions the leader hasn't thought of is a sign of an A-player.
  • Reflects on the evolution of entrepreneurship and how it involves growing in several areas including tolerance, understanding, and awareness of others.

"And I hope if you look at your team right now, you don't think, oh, they're all amazing, right? Because the reality is they're probably not right."

This quote prompts leaders to realistically evaluate their team's performance and not to be overly optimistic without basis.

"What initiative would I be taking that they're not taking? What questions would I be asking that they are not asking?"

The speaker suggests leaders should use their own standards of initiative and inquisitiveness as benchmarks for their team's performance.

"And as you grow in that awareness, so too will your selection of talent. So too will your recruitment of talent, your management and growth of those people."

This quote links personal growth in awareness to improved talent selection and management skills over time.

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