Why Creating Another Business Isn't The Answer Ep 334



In this insightful discussion, the speaker, a successful entrepreneur, reflects on the perils of dividing attention between multiple ventures. He shares a personal anecdote of how his profits dipped when he launched a second business despite an increase in revenue, attributing the decline to a lack of focus. Learning from his neighbor, a former trash collector turned wealthy business owner, the speaker emphasizes the importance of specialization and the power of saying no to opportunities that deviate from one's core expertise. He argues that true growth and success come from perseverance, deepening one's knowledge over time, and resisting the allure of new, seemingly lucrative distractions. By committing to a single path and mastering it, entrepreneurs can achieve exponential and sustainable growth rather than spreading themselves too thin across multiple endeavors.

Summary Notes

Starting New Ventures

  • The speaker reflects on their experience of starting a second business while being the CEO of another, leading to decreased profits despite increased revenue.
  • They highlight the temptation of starting a new venture due to the availability of capital and a capitalist mindset.
  • The speaker acknowledges that the decision to start another business was a mistake given their skill set at the time.
  • They emphasize the importance of recognizing when to say no to opportunities, even if it means turning down money.

"And so I said, oh, I'm outside of the day to day. I'll start another business because there's this big pile of money right here that I can't say no to because I'm a capitalist and I should definitely do that."

The quote illustrates the speaker's initial rationale for starting a new business, driven by the presence of capital and a desire to capitalize on it.

"So my profit went down and my revenue went up. Now, I could try and bsu and tell you that it was because we reinvested in infrastructure and all that stuff. And we did. But candidly, it was because starting the business at that time, given the skill set that I had, was a mistake."

This quote reveals the outcome of the speaker's decision to start a new venture – increased revenue but reduced profit – and their honest reflection that it was a mistake due to their skill set at the time.

Learning from Others

  • The speaker shares a story about their neighbor, a former trash man who became very successful and sold his business for a significant profit.
  • The neighbor decided to start the same type of business again after his non-compete agreement expired, using his accumulated capital and knowledge.
  • The neighbor's approach contrasts with the speaker's earlier mistake, as the neighbor focuses on leveraging his expertise in a familiar industry rather than seeking something new.

"And he's like, no. He's like, why would I start over brand new? He's like, I'm so good at trash, and I've spent the last three years working for the company that bought me, and I learned stuff from them, and I already had my knowledge that I came in with, with my own company. So I understand the scale even better than I did before, and I know how to start it from the ground up."

This quote emphasizes the neighbor's rationale for repeating his previous business model, highlighting his expertise and the value of experience and knowledge in scaling a business successfully.

Strategic Focus and Saying No

  • The speaker emphasizes the importance of having a strategy and understanding what to decline.
  • They discuss a conversation with an agency coach contemplating expansion into general business despite success in a specific niche.
  • The speaker advises that knowing your target audience and not trying to cater to everyone is crucial for maintaining focus and avoiding dilution of the business's core value proposition.

"A strategy means knowing what you say no to. And just because somebody asked me for something doesn't mean I should change my entire business to say yes, right? You have to know who your avatar is and who it isn't."

The quote underlines the importance of strategic decision-making and the ability to say no to opportunities that do not align with the business's focus or core audience.

"Because otherwise, if you try and be, what is it? All things to all people. You're nothing to no one."

This quote encapsulates the danger of losing identity and value by attempting to cater to too broad an audience, reinforcing the necessity of strategic focus.

Importance of Grit and Perseverance in Business Growth

  • Growth in business is often attributed to developing character traits such as grit, stick-to-itiveness, and perseverance.
  • These traits are essential at all levels of business for sustained success and growth.

"But the growth was going to come from me sticking with it was from developing the character traits of grit, from developing the character traits of stick to itness, from developing the character traits of perseverance, of focus."

This quote emphasizes the significance of personal character development in achieving business growth, highlighting traits like grit and perseverance as crucial for success.

The "Woman in the Red Dress" Analogy

  • The speaker uses the "woman in the red dress" from The Matrix as an analogy for seductive business opportunities that can distract entrepreneurs at every level.
  • These opportunities seem increasingly attractive as one scales up in business and require emotional strength to turn down.

"And I think that at all levels in business, you get seduced by a woman in the red dress, which is the analogy that I like to use, because at every level in business, like, if you know the Matrix, there's a woman in the red dress who walks by, neo looks again in, and then it's an agent pointing a gun at him."

The quote draws a parallel between the distraction Neo faces in The Matrix and the distractions entrepreneurs face with tempting business opportunities. It suggests the importance of staying focused and not being led astray by seemingly attractive diversions.

The Challenge of Turning Down Opportunities

  • As businesses grow, the financial incentives to pursue new opportunities increase, making it harder to turn them down.
  • The speaker shares a personal experience of not being able to turn down a significant opportunity, which led to lost growth in their main business.

"And for me, it turned out I wasn't able to turn down about a 20 or $30 million a year opportunity when I was doing about 20 or $30 million a year."

This quote reveals the speaker's personal struggle with declining a lucrative opportunity, highlighting the difficulty of making such decisions and the potential consequences on one's primary business.

The Pitfalls of Serving Two Masters

  • The speaker advises against trying to be the CEO of two businesses, emphasizing that one cannot serve two masters effectively.
  • The CEO role requires full attention and dedication to the nuances that create excellence within a business.

"You can't be CEO of two businesses. You can't serve two masters if you're the one running your business."

The quote underscores the impossibility of splitting one's attention and energy between two CEO roles without compromising the quality and growth of both businesses.

The Importance of Focused Attention in Business

  • The speaker stresses that a business requires the full mental attention of its leader, even outside of regular working hours.
  • Thinking about ways to improve the business, addressing threats, innovating, and considering team dynamics are all critical aspects that require the leader's focus.

"It's the small nuances that create the excellence in the business that your headspace has to be dedicated to."

This quote highlights the importance of dedicated mental space for a business leader to focus on the finer details that contribute to a business's excellence.

Relationship Between Entrepreneurial Skill and Income

  • The speaker observes that the amount of money made is directly proportional to the skill of the entrepreneur.
  • Starting more businesses without the necessary skill set will likely result in a plateau of income rather than growth.

"The amount of money that I make is only proportional to the skill that I have as an entrepreneur. Period."

This quote links an entrepreneur's income directly to their skill level, suggesting that skill development should be prioritized over the expansion of business ventures for financial growth.

Focusing on Improving the Current Business

  • Entrepreneurs should focus on confronting the hard facts about their current business's growth and seek ways to improve it rather than pursuing new ventures.
  • The speaker encourages looking for ways to enhance the existing product or service to achieve growth.

"There's all these things that we can do to improve the existing business."

The quote advises entrepreneurs to concentrate on improving their current business operations and products as a strategy for growth, instead of being distracted by new opportunities.

The Mistake of Over-Diversification

  • The speaker shares a story about a high school acquaintance who owns a general contracting business but is also involved in various other ventures.
  • The speaker questions the need for diversification when there is a large market potential in the primary business area.

"Why do you feel like you need to do more things to grow bigger?"

This quote questions the rationale behind pursuing multiple business ventures when there is ample opportunity for growth within a single, focused business domain.

Growth Philosophy

  • Success in business is not about size but about quality; better performance leads to growth.
  • The value of visual learning through additional effects and visuals is acknowledged.
  • Investing time and effort into deepening knowledge and expertise is crucial for long-term success.
  • Initial learning is significant, but advanced, long-term knowledge yields disproportionate returns.
  • The concept of marginal gains is illustrated through the analogy of Olympic sprinters, where small advantages can lead to major rewards.

Better begets bigger, not the other way around.

This quote emphasizes the philosophy that becoming better in what you do will naturally lead to growth, rather than simply aiming to grow in size or scale.

And so the deeper you can sink your roots in, the more time you can put under the bar. This has been my finding.

The speaker shares their personal finding that the more effort and time invested in gaining knowledge and experience, the more successful the business will become.

But learning what you learn in the first year is not the stuff that makes you better than the rest of the playing field.

This quote suggests that while initial learning is important, it is the advanced knowledge gained over many years that creates a competitive edge.

The Importance of Grit and Persistence

  • The concept of "stick-to-itiveness" or grit is essential for achieving success in a competitive environment.
  • Knowledge and expertise compound over time, making time an asset rather than a liability.
  • Patience and persistence are key, with an understanding that growth comes from consistent effort rather than constant innovation.
  • The importance of doing the "boring work" and facing hard truths about business performance is highlighted.

It's the grit of understanding that your knowledge will compound with time.

The speaker emphasizes the importance of perseverance and the belief that accumulated knowledge over time is incredibly valuable.

It comes from volume, right? Which is one of the core tenets that we have at all of our companies, is do the boring work.

This quote highlights the principle that consistent, often monotonous work is a core tenet for success in the speaker's companies.

Self-Reflection and Improvement

  • Entrepreneurs must confront areas for improvement rather than avoid them due to ego.
  • Businesses often fail to grow because they don't address why they aren't achieving certain goals, such as increasing word-of-mouth referrals.
  • Personal insecurities and desires should not dictate business decisions; the primary focus should be serving the customer.
  • The speaker shares a personal anecdote to illustrate the benefits of commitment and focus in business.

So there's always areas for improvement that we just don't want to confront, because it makes our egos feel bad.

This quote acknowledges the human tendency to avoid confronting weaknesses or failures because it can be damaging to one's self-esteem.

And we use our business to try and satisfy our personal needs, when in reality, the business is only there to serve the customer.

The speaker points out a common mistake where business owners use their business to fulfill personal needs rather than focusing on serving their customers.

Commitment to a Single Venture

  • Diversifying attention among multiple businesses can hinder the potential for significant success.
  • Focusing on a single business and dedicating time to it can lead to disproportionate returns and achievements.
  • The speaker's personal experience of running multiple businesses versus committing to one demonstrates the value of focus and dedication.

And it was only once I chose to commit to one of them that I saw the disproportionate returns in my life.

The speaker shares that focusing on one business, rather than spreading efforts across many, led to much greater success and rewards.

Like, I had my chain of gyms, right? And then after that point, I was like, oh, I'm going to start an agency.

This quote provides a specific example from the speaker's experience, transitioning from running a chain of gyms to starting an agency, which illustrates the shift from diversification to focus.

Entrepreneurial Focus and Commitment

  • Entrepreneurial success requires focus and commitment to a chosen endeavor.
  • Spreading oneself too thin across multiple ventures can prevent any single one from taking off.
  • Choosing one business to commit to is essential for growth and success.

And so, so you have to pick and you have to commit.

This quote emphasizes the necessity of selecting a single business focus and committing to it fully to ensure success.

Emotional Challenges in Business

  • Understanding the principles of success is not intellectually difficult, but emotionally challenging.
  • Emotional difficulty is often why people fail to implement simple principles such as spending less than they earn or eating less than they burn.
  • Business decisions should be guided by strategy and long-term thinking rather than emotional impulses.

They're just emotionally difficult, which is why most people don't do them.

The quote explains that while the concepts behind successful actions are easy to understand, the emotional execution of these actions is what often leads to failure.

The Power of Strategy and Compounding Returns

  • Having a clear strategy is crucial in business to resist distractions and focus on growth.
  • Compounding returns are the result of consistent adherence to a chosen strategy.
  • Businesses must resist the urge to change strategies based on internal boredom or impatience.

And that's where the compounding returns come from.

This quote highlights the benefits of sticking to a strategy over time, leading to compounded growth and success.

The Importance of Consistency in Business

  • Consistency in business practices is key to growth, even though it may seem monotonous.
  • Businesses should focus on core activities like marketing, selling, providing value, and gaining referrals.
  • The challenge lies in persisting with these "boring" but essential tasks without seeking unnecessary change.

We do the same things. We market, we sell, we provide value, we get referrals, and we try and do as much as that as we can over and over again.

The quote points out the repetitive yet crucial nature of core business activities that drive success through consistency.

Self-Reflection and Personal Growth

  • Entrepreneurs must self-reflect to identify whether they lack a certain belief, trait, or skill necessary for the next level of success.
  • Personal growth involves recognizing and unlearning patterns, such as creating chaos, that hinder business progress.
  • Understanding and developing the right traits, beliefs, and skills is vital for entrepreneurial advancement.

Is it a belief about the world that is incorrect? Is it a trait that I have not developed yet? Or is it a skill that I lack?

This quote prompts entrepreneurs to introspect and identify personal areas of improvement that may be blocking their business success.

Overcoming Chaos and Embracing Simplicity

  • Entrepreneurs often recreate patterns of chaos in their businesses due to subconscious comfort with such environments.
  • Successful businesses are typically not chaotic but involve repetitive and straightforward processes.
  • Embracing the simplicity and routine of successful business practices is a learned skill.

Because whatever traumatic childhood story they tell themselves about how they had chaos in their early life, they try and recreate it in their business because that's where they feel comfortable subconsciously.

The quote discusses the psychological tendency to replicate familiar patterns of chaos in business, which must be overcome for stability and growth.

Sharing Knowledge and Experience

  • The speaker aims to share their failures and lessons learned to help others avoid similar mistakes.
  • The channel, Mosey Nation, is a platform for sharing relevant, top-of-mind content based on audience feedback.
  • The goal is to provide value and facilitate learning through shared experiences.

My goal for this channel, Mosey Nation, is that you can hopefully learn from the many failures that I've had so that you don't have to experience them for yourself.

This quote expresses the speaker's intention to use their channel as a means to educate and prevent others from repeating their past business failures.

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