Any Business Can Get You to $10 Million a Year — Transcript

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1. 0:00If you have the goal of getting to $10
2. 0:01million a year, you can pretty much do
3. 0:03it in any business.
4. 0:04If you have the goal with with the
5. 0:06exception of if you are a brick and
6. 0:07mortar and there's 100 people on your in
7. 0:09your local market, probably not. But
8. 0:11outside of that, um
9. 0:13that business model, even if you were in
10. 0:14a tiny market, could get to 10 million a
11. 0:16year. You just open up a new markets.
12. 0:18That's all you do, right?
13. 0:20Um and so most people's goals are
14. 0:22achievable within their current vehicle.
15. 0:24They're just too impatient and believe
16. 0:26that there's another shiny object that
17. 0:27somehow get there faster. But if you
18. 0:29take the natural extreme and say, "If I
19. 0:30only did one thing for 40 years, do I
20. 0:32think I'd be successful?" Probably. And
21. 0:34so if you knew that to be true, then
22. 0:35that would give you a very strong reason
23. 0:37to stick with whatever you're doing.
24. 0:38Because let me give you a visual for
25. 0:39this.
26. 0:41This is the cost of switching.
27. 0:43So if let's say that you're in year
28. 0:45three
29. 0:47of your current current business, okay?
30. 0:50Or current opportunity. Doesn't really
31. 0:51matter what it is. So this is one, this
32. 0:53is year two, this is year three. Okay.
33. 0:55Now, what people want to convince
34. 0:57themselves is that they're like, "I want
35. 0:59to start this new thing." Okay, that's
36. 1:01fine.
37. 1:01You want to start this new thing. So
38. 1:03let's see that year one of this new
39. 1:04thing is higher. Okay, that's fine. This
40. 1:06one is a little bit higher than this one
41. 1:08in year two. But the thing is is that
42. 1:09this is year one of this year,
43. 1:13but it's year four here.
44. 1:18You're still
45. 1:20behind.
46. 1:21And not only that,
47. 1:23growth when you get bigger
48. 1:25is easier than growth when you're
49. 1:26smaller.
50. 1:31And you're like, "Okay, well maybe maybe
51. 1:32this faster rate of growth
52. 1:34I'll be able to catch up."
53. 1:36Okay, well now you're year two.
54. 1:38But now we're at year five over here,
55. 1:40right? And so the head start that you
56. 1:43give yourself
57. 1:45by sticking with something, like
58. 1:46sticking with it is how you get the head
59. 1:48start. It's how you keep the head start
60. 1:50that you already began.
61. 1:52That's something I think so many people
62. 1:53miss when they're trying to go to this
63. 1:54next opportunity. Unless there is
64. 1:56something inherently wrong with the
65. 1:58assumption that you have, and skill is
66. 2:00not the deficiency that you need to
67. 2:02overcome, which it often is. Most of the
68. 2:05time people get stuck on things that I
69. 2:06call features not bugs, and this isn't
70. 2:08my invention. Is that there's an element
71. 2:10of your business that makes it hard.
72. 2:11There's an element of every business
73. 2:13that makes it hard. But, that's what
74. 2:15makes it a business, and that's why
75. 2:16you're compensated for it. If you're in
76. 2:18the cleaning business, the difficulty
77. 2:19you're going to have is attracting and
78. 2:21retaining high-quality talent. If you're
79. 2:22in the fitness business, the difficulty
80. 2:24is attracting customers and customer
81. 2:26retention because people are inherently
82. 2:28really shaky um about staying with their
83. 2:30fitness goals. But, they typically stick
84. 2:31with their cleaners for a really long
85. 2:32time. Right? And so, every business has
86. 2:36elements that make it shitty.
87. 2:38It's just the name of the game. And uh
88. 2:40you know what? I'll give you a different
89. 2:41frame on this.
90. 2:42So, if you were to think about different
91. 2:45business models. So, let's think about I
92. 2:46I doubt many of you guys have heard
93. 2:47this. So, this is pretty sweet. So,
94. 2:49let's say that you've got uh e-commerce.
95. 2:54You've got uh
96. 2:55let's say you've got service.
97. 2:59You've got um
98. 3:00let's say info,
99. 3:02education, media, and let's say you've
100. 3:04got SaaS. All right, so software. Okay.
101. 3:08So, let's say that these are four
102. 3:09different opportunities. Each of these
103. 3:11opportunities has a different shape.
104. 3:14So, info
105. 3:16looks like this.
106. 3:18Starts really fast, very difficult to
107. 3:20scale.
108. 3:21SaaS is the opposite. Starts really,
109. 3:24really slow, scales really, really fast.
110. 3:27E-com is more like this. You can scale
111. 3:29fast, but there's difficulty with
112. 3:31typically cash flow because you have to
113. 3:33continue to buy more inventory. Uh you
114. 3:35have supply chain issues. You have to
115. 3:36switch suppliers, switch 3PLs so they
116. 3:38can handle your volume. All of this
117. 3:39stuff happens as you continue to grow.
118. 3:41So, it's more like
119. 3:43Hold on. It's more like this.
120. 3:48That's the shape of e-com.
121. 3:49Right? And then service businesses are
122. 3:51more like this.
123. 3:53The slowest, but they are steady.
124. 3:56And so when you see these four shapes,
125. 3:59many of you guys just hit the crappy
126. 4:01part of whatever the opportunity that
127. 4:03you're on is, and then say there's
128. 4:05something wrong with my business,
129. 4:06therefore I should stop, rather than
130. 4:08seeing it as what it is, which is this
131. 4:10is just the nature of how this business
132. 4:12works.
133. 4:14This is a feature, not a bug. It's going
134. 4:15to be harder for you to attract really
135. 4:17good talent in engineering and build
136. 4:20software, and you're probably going to
137. 4:21be not profitable cuz most software
138. 4:23sells for a lower ticket most for a
139. 4:26period of time, and it takes a long time
140. 4:27to get a product to actually be good.
141. 4:29And so you're going to basically burn
142. 4:30money, burn time for a long period, and
143. 4:32then eventually you can scale to the
144. 4:33moon, but it takes a long time,
145. 4:35sometimes years to get there, and a lot
146. 4:36of people don't have that level of
147. 4:37tolerance.
148. 4:39Info on the other hand is kind of the
149. 4:41exact opposite of that. You can make a
150. 4:42lot of money really quickly, a lot being
151. 4:44relative, right? You're probably not
152. 4:45going to become a billionaire, but you
153. 4:47can make a million dollars,
154. 4:49and then very quickly it gets very
155. 4:51difficult to scale it.
156. 4:54I'll say like info specifically more
157. 4:55like coaching, things like that. And the
158. 4:57reason for that is cuz there's almost no
159. 4:58no revenue retention. People don't stay
160. 4:59around. Once you learn something, you've
161. 5:01learned it. That's why people graduate
162. 5:03school. They learned, right? Service
163. 5:05businesses, the issue is people, because
164. 5:07it's a very people people heavy
165. 5:08business. You have to constantly be
166. 5:10hiring, onboarding, and training, and it
167. 5:12depends on the service you're providing.
168. 5:13If you provide weight loss coaching
169. 5:15service or weight loss services, I use
170. 5:17that as an example obviously cuz I came
171. 5:18from that, you you have you have it's
172. 5:20easy for you to get talent because lots
173. 5:22of people want to talk about fitness and
174. 5:23weight loss and and and and food all
175. 5:25that cuz they're like really into it. So
176. 5:26it's actually very easy to get good
177. 5:27talent and for below average prices
178. 5:29because people would do it for free. On
179. 5:31the flip side, customers never want to
180. 5:33do it, and so they're canceling all the
181. 5:34time. If I had an accounting firm, it's
182. 5:36the opposite. Accounting firms have
183. 5:38super high annual stick. What's the
184. 5:40difficulty with accounting firms?
185. 5:41Getting the people who can do
186. 5:43accounting. It's almost always this
187. 5:45balance, right? If a lot of people want
188. 5:47to do it, there's going to be a lot of
189. 5:48competition, there's very low barriers
190. 5:50to entry, and as a result, customers
191. 5:51have lots of options. And they don't
192. 5:53want to do it themselves. If uh there
193. 5:55aren't as many options, and you have a
194. 5:57sub-supply supply constrained industry,
195. 6:00then you're going to have issues getting
196. 6:01talent.
197. 6:03Fundamentally, and you can look at this
198. 6:04at the business level, but you can also
199. 6:05look at the at the at the uh at the
200. 6:07industry level. And so, I talk about
201. 6:09demand constraints and supply
202. 6:10constraints
203. 6:11at the business level, but you can see
204. 6:13if you are way off track based on do you
205. 6:15match with your industry. If your
206. 6:17industry, and by the way, if you are if
207. 6:19you're the inverse of your industry,
208. 6:20you're usually doing something either
209. 6:21really wrong or really right. Side note,
210. 6:24so great way to think about it. If you
211. 6:25can be
212. 6:27supply demand constrained in like the
213. 6:31cleaning business example that I gave.
214. 6:32If you give supply constraints, sorry,
215. 6:34demand constraints, as in
216. 6:36I could take a hundred times more
217. 6:38customers than I currently am with my
218. 6:39cleaning thing, well, then you've either
219. 6:41figured out something really amazing
220. 6:43with cleaners to like attract them in
221. 6:44and like you're about to go hyper scale,
222. 6:46or you're just starting out and you
223. 6:47haven't done anything [laughter] yet.
224. 6:48There's either something really right or
225. 6:50really wrong with what you're doing. But
226. 6:51most of the time, you probably match the
227. 6:53same constraint of your industry. And
228. 6:54the problem with not being experienced
229. 6:56is you think there's something wrong.
230. 6:58And so, then you end up spending
231. 6:59multiple years not being all in on your
232. 7:01opportunity, and then being upset that
233. 7:03it's not growing as fast as you want it
234. 7:04to grow.
235. 7:05When in reality, you never really gave
236. 7:07it a shot because you're always looking
237. 7:08you're kind of like the kind of like the
238. 7:10guy who's in the marriage that they're
239. 7:11like you know, they they were in love a
240. 7:13while ago, and you know, there things
241. 7:16are okay, but they you know, he's got a
242. 7:17wandering eye, right? He's always
243. 7:19looking, he's always paying you know,
244. 7:20trying to look for the next thing, the
245. 7:21next girl, the next whatever. And he's
246. 7:22like, "Well, my marriage isn't good."
247. 7:23It's like, "Well, no You're
248. 7:25spending all your time looking at these
249. 7:26other opportunities rather than doubling
250. 7:28down on the thing you got."
251. 7:31And when you double down on the thing
252. 7:32you got, usually, when you take the mar-
253. 7:34it takes way less time I would Okay, I'm
254. 7:37not I'm not I'm not going to make broad
255. 7:39sweeping statements on marriages, all
256. 7:40right? But I will say that in my
257. 7:42experience from my n equals one
258. 7:43marriage, it takes way less time to go
259. 7:46from like we're upset about something to
260. 7:48we're really good than it does to create
261. 7:50the loyalty, the trust, and the track
262. 7:52record that you have from that marriage
263. 7:54with someone else.