Time Horizons Ep 633

Summary Notes


In this insightful discussion, the host of the podcast delves into the principles of wealth accumulation and sustainable business growth, contrasting the short-term tactics of selling with the long-term strategies of buying and holding. He emphasizes the importance of playing infinite games—those without a definitive end—over finite ones, which have clear winners and losers. The host, who is on a journey to grow acquisition.com into a billion-dollar portfolio, shares personal anecdotes and quotes that have shaped his perspective on time horizons in business. He explains that the key to success is extending one's time horizon, which reduces downside risk and virtually guarantees not losing. This principle applies not just to financial decisions, but also to hiring, where patience and foresight yield better long-term results. Furthermore, he touches on personal relationships and health, advocating for decisions that align with long-term fulfillment over short-term comfort. The host's ultimate message is to prioritize strategies and actions that will have a positive impact over a decade, rather than seeking immediate gains.

Summary Notes

Entrepreneurship and Control

  • Entrepreneurship involves learning to relinquish control to achieve freedom.
  • Total control implies dependency on oneself, which negates freedom.
  • Wealthy individuals view business as a game and focus on portfolio growth.

"Every level of entrepreneurship is a new way of learning how to give up control, because you cannot want both freedom and control." This quote highlights the paradox of desiring freedom while trying to maintain control in entrepreneurship. The speaker implies that true freedom in business comes from letting go of the need to control every aspect.

Wealth Accumulation and Business Perspective

  • Rich people often sell assets, while wealthy people focus on buying and building.
  • Selling leads to inefficiencies and tax liabilities, while building increases net worth.
  • Selling is only considered when interest in the business declines or the "party is over."

"Rich people sell, wealthy people hold, and more specifically, wealthy people buy and build." The speaker contrasts the strategies of the rich and the wealthy, suggesting that long-term wealth accumulation is achieved through holding and building assets rather than frequent selling.

Time Horizon in Wealth Building

  • Wealthy individuals operate with a long-term perspective, known as a time horizon.
  • The concept of time horizon is crucial in understanding why the rich get richer.
  • The speaker's YouTube producer highlighted the importance of time horizon in wealth creation.

"One of the biggest things that's shifted since I've been working with you is just like your concepts on time horizon." This quote from the YouTube producer emphasizes the transformative impact of adopting a long-term time horizon on the speaker's approach to wealth and business.

Infinite vs. Finite Games

  • Life's most important aspects, like health and wealth, are seen as infinite games.
  • Infinite games have no set rules and the goal is to keep playing, unlike finite games where winning is the end goal.
  • Adopting an infinite game perspective can lead to sustained success and avoid the pitfalls of a finite mindset.

"There are two types of games. There are infinite and finite games, and the games that are worth playing in life, in my opinion, like health, wealth, relationships, marriage, et cetera, are all infinite games." The speaker introduces the concept of infinite and finite games, advocating for the infinite game approach in important life areas to ensure ongoing participation and success.

Business Strategy and Infinite Perspective

  • The point of marketing, from an infinite perspective, is to create an amazing product that encourages repeat purchases and referrals.
  • An infinite perspective favors long-term growth and product improvement over short-term gains.
  • The shift from making a sale to get a customer to making a customer to get a sale represents a strategic change in business approach.

"The point in the beginning especially, is to make a sale to get a customer, which is a long term relationship of somebody who buys again and again, rather than getting a customer to make a sale, which would happen, like, one time." This quote encapsulates the strategic shift in business thinking from a transactional, one-time sale focus to building long-term customer relationships that ensure repeat business.

Infinite Perspective in Business

  • An infinite perspective in business means playing the long game rather than rushing to meet short-term goals.
  • Rushed decisions often lead to mistakes in business due to arbitrary time horizons.
  • Long-term thinking can lead to sustainable growth and reduced risk of failure.

"And if we have an infinite perspective of, like, we're going to keep playing this game over and over again, then we no longer have this rush."

This quote emphasizes the importance of adopting a long-term mindset in business, which can alleviate the pressure to rush decisions and actions.

"Mistakes love a rush decision. And people make tons of mistakes in business purely because they arbitrarily cut their time horizon."

Here, the speaker warns against the pitfalls of rushing decisions based on arbitrary deadlines, suggesting that such haste can lead to errors.

Strategic Advantage Through Long-Term Thinking

  • Most people think in finite terms, giving an advantage to those who adopt a long-term perspective.
  • Long-term thinking in marketing involves building relationships with customers rather than focusing solely on immediate sales.
  • Goodwill compounds faster than revenue because it creates a surplus of value at no monetary cost.

"Most people will never do this, which gives you this massive strategic advantage, because most people think in finite terms."

This quote highlights the rarity and therefore the competitive advantage of long-term thinking in business strategy.

"Goodwill compounds faster than revenue or money because you fundamentally fix the value equation in your favor, because your price is zero."

The speaker illustrates how goodwill, when provided consistently over time, can compound and create more value than immediate revenue.

Goodwill and Audience Building

  • Building goodwill involves consistently providing value without immediately seeking to monetize the audience.
  • Withdrawing from the "goodwill bucket" too quickly can reduce the audience's perceived value and hinder virality.
  • A cycle of "give, give, give, then get" can lead to organic growth and natural reciprocation without direct solicitation.

"You become less viral from an audience building perspective."

This quote suggests that depleting goodwill can reduce the likelihood of an audience spreading your message, thus slowing down audience growth.

"Let's say that every time you give, you grow by whatever, 10%, right? Give, give, give, and ask versus give, give, give."

The speaker is explaining that a consistent pattern of giving can lead to a larger audience over time, which can result in greater returns even with less frequent asks.

Marketing Evolution and Brand Building

  • Direct response marketing tends to focus on short-term gains, while brand marketing invests in long-term relationships.
  • Extending the time between giving and getting can significantly increase a brand's competitive advantage.
  • Influencers like The Rock or Conor McGregor reach a point where their influence garners opportunities without them having to ask.

"And so, at least this has been our perspective that I've shifted in terms of how to think about marketing overall."

The speaker reflects on the evolution of their marketing strategy, shifting from short-term direct response to long-term brand building.

"The longer we can separate how long we give before we get, the bigger the advantage comes to us compared to our competition."

This quote emphasizes the strategic benefit of delaying gratification in marketing efforts to build a stronger, more influential brand.

Long-Term Strategy and Risk Management

  • Setting a long-term strategy where patience equals winning can minimize downside risk.
  • Warren Buffett and Charlie Munger's investment philosophy of selecting a limited number of companies for long-term investment aligns with this perspective.
  • Thinking long-term can differentiate between the rich and the wealthy.

"I want to set a strategy where if I wait, I win."

The speaker conveys the idea that patience and a long-term view can lead to inevitable success in business.

"If you can extend your time horizon, you can decrease your downside risk to virtually zero, because you know that if you do this thing long enough, you will eventually win."

Here, the speaker suggests that extending one's time horizon can almost eliminate the risk of loss, as sustained effort over time is likely to lead to success.

Employee Retention and Long-Term Fit

  • Hiring with a short-term mindset can lead to quick fixes but may not ensure a good long-term fit.
  • Investing time in training and onboarding employees with a long-term perspective can lead to better retention and team stability.

"So in the beginning, you think about, I just need to have or put a butt in a seat, right? I have this fire. I need to put it out versus thinking a little bit longer time horizon, which is, man, this is going to take a lot of time to train this person."

The speaker contrasts the short-term approach of filling a position quickly with the long-term approach of considering the time investment required to properly train and integrate an employee into the company culture.

Hiring Philosophy and Company Culture

  • Importance of aligning new hires with company values to reinforce or detract from company culture.
  • The necessity of having the right people for different growth phases of a business.
  • Emphasis on long-term discomfort for the sake of hiring the right person.
  • The critical approach of hiring based on a strong personal conviction about the candidate.

"Is that going to reinforce our culture or is it going to detract from it?" This quote emphasizes the significance of considering how a potential hire's values will impact the company's culture, highlighting the importance of cultural fit in the hiring process.

"I'm willing to wait a longer period of time in discomfort in order to interview 25 people, rather than five to get the right person." The speaker is expressing a willingness to endure a longer, more arduous hiring process to ensure the best candidate is found, prioritizing quality over convenience.

"I have to have this person. And if I don't feel like I have that feeling with someone, I don't hire them anymore." The speaker shares a personal hiring standard, indicating that they now only hire candidates they are genuinely excited about, rather than settling for someone who is simply good enough.

Business Growth and Knowledge Accumulation

  • The business is limited by the cumulative knowledge of its employees, including the owner.
  • Recognizing the limit of growth when a single person is responsible for teaching and understanding all roles.
  • The necessity of hiring people who are smarter and better than oneself to scale the business.
  • Entrepreneurship involves learning to give up control to achieve freedom.

"The business that you have, or all businesses in general, are a subset of the amount of cumulated knowledge in the entire employee base." This quote suggests that the potential of a business is directly related to the collective knowledge of all its employees, implying that diversity in expertise is crucial for growth.

"If you can actually do everyone's job better than them, you should be frightened." The speaker warns that if a business owner is the most skilled at every job, it indicates a bottleneck for growth and a lack of specialized talent within the company.

"You cannot want both freedom and control." This quote reflects the paradox of entrepreneurship, where one must relinquish control in certain areas to gain freedom, challenging the desire to oversee every aspect of the business.

Relationships and Personal Life

  • The importance of not settling for 'good enough' in personal relationships.
  • The analogy of purchasing a temporary couch reflects the permanence of 'good enough' relationships.
  • The concept of 'hire slow, fire fast' applied to dating, emphasizing careful selection and swift action when necessary.
  • The speaker's personal approach to dating was to assess long-term potential early on.

"A lot of times there are these couches, which are people in our lives. We're like, they're good enough for now." This quote draws a parallel between settling for temporary solutions in our living spaces and in our relationships, cautioning against complacency with subpar choices.

"From a dating perspective, am I dating this person's out of convenience because I am unwilling to be lonely in the short term or because I think I'm going to marry them?" The speaker questions the motives behind dating choices, contrasting short-term convenience with long-term intentions, and advocating for a more strategic approach to forming relationships.

Decision-Making in Relationships and Life Choices

  • The speaker discusses the importance of long-term thinking when making decisions in relationships.
  • They suggest that people often make trade-offs between short-term comfort and long-term fulfillment.
  • The idea is to move from short-term pain (fear) to long-term gain (fulfillment) rather than seeking immediate comfort.
  • The speaker emphasizes the value of pruning relationships that do not contribute positively to one's life in the long term.

"dates as was necessary to rule out the person as, no, I don't think I would marry them. Which also gives kind of birth to some of the ideas around, sleeping around and things like that, which is like, well, if I don't think I'm going to marry this person, then what am I gaining from this? And is it fruitful for me in the long term?"

The quote reflects on the importance of considering long-term implications of dating and relationships, questioning the value of short-term interactions that do not lead to marriage or long-term commitment.

"And so the idea is we want to trade fear for fulfillment. We want to trade the short term pain for the long term gain, rather than trading to get comfort."

This quote summarizes the key concept of prioritizing long-term fulfillment over short-term comfort, suggesting that enduring short-term discomfort may lead to greater satisfaction in the future.

"Like, how many friends do you have in your life that are there? They don't really add anything. And what scares me is that if I extrapolate that relationship over the next ten years, I ask myself, who am I going to be with this constant influence in my life? Will I be better or worse?"

The speaker reflects on the impact of non-contributive friendships on personal growth, indicating the importance of evaluating the long-term influence of relationships on one's life.

"And so a lot of times, I think in order to prune the tree, sorry, in order for the tree to grow, we to prune it, which means we have to cut off the branches."

This metaphor emphasizes the necessity of removing unproductive elements from one's life to foster growth, akin to pruning a tree to improve its health and yield.

Long-Term Health and Fitness Strategies

  • The speaker discusses the importance of sustainable health and fitness strategies.
  • They argue that dietary and workout routines should be manageable and enjoyable over a long period to be effective.
  • The notion of compounding and consistency over time is highlighted as key to achieving health and fitness goals.
  • The speaker also questions the value of intense workout regimes if they do not significantly extend lifespan or if they consume a disproportionate amount of one's life.

"If you can't eat this way for a decade, there's no point in doing it for a day."

This quote suggests that any diet or eating habit should be sustainable over a long period, otherwise it is not worth pursuing at all.

"And so if you can just approach diets and workout with that same perspective, you will get the greatest returns from compounding and consistency over time."

The speaker highlights the benefits of consistency and gradual progress in health and fitness, comparing it to the financial principle of compounding interest.

"But it's just a question of like why am I doing this to begin with? Is it because I want to look a certain way, which is fine and totally okay, but simply having the perspective of I'm doing this because I can do this forever."

The quote encourages individuals to examine their motivations for engaging in fitness activities, emphasizing the importance of choosing sustainable practices.

Business Strategy and Long-Term Growth

  • The speaker applies the same long-term perspective to business strategies.
  • They suggest that actions taken in business should be evaluated based on whether they will contribute to growth or decline over a decade.
  • The speaker criticizes short-term goals and emphasizes patience and persistence in developing skills and achieving success.

"And if I'm thinking about this from a business strategy perspective, if I do these actions, will it increase or expand me in a decade, or will it cut me down?"

This quote advises considering the long-term impact of business decisions, focusing on actions that contribute to growth rather than those that may lead to decline.

"And so why would I put such a short, arbitrary timeline of I have to grow in 90 days or I'm out? It's just not realistic. And I'd rather play games where if I wait, I win."

The speaker critiques unrealistic short-term expectations in business and suggests adopting a mindset that values long-term progress and the benefits of waiting for success.

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