How to Know When to Quit a Business — Transcript

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1. 0:00Big mistake that uh people make
2. 0:02is they
3. 0:05they don't focus.
4. 0:06And that's the one that you're talking
5. 0:08about, which is the do I start a new
6. 0:10business, do I fix the business I'm at?
7. 0:12And the woman in the red dress is always
8. 0:14my my joke, but
9. 0:15>> Mhm.
10. 0:16>> the new opportunity always looks more
11. 0:17interesting, which is why it's so
12. 0:19compelling as a sales pitch. It's like
13. 0:21most sales pitches are red woman in the
14. 0:23red dress, and that's you do it that way
15. 0:24cuz that's what convinces the most
16. 0:25people.
17. 0:26>> that.
18. 0:27>> Of course, that's what convinces the
19. 0:28most people to switch opportunities cuz
20. 0:30you say, "If you only knew, it's so much
21. 0:32easier over here, right?"
22. 0:33>> Mhm.
23. 0:33>> But the reality is that all businesses
24. 0:34have difficulty. It's just what
25. 0:36difficulty you want. And so, different
26. 0:38styles of businesses have difficulties
27. 0:40at different stages. So, like
28. 0:41information businesses, for example, are
29. 0:42the easiest businesses to start, hardest
30. 0:44to scale. Software businesses are the
31. 0:45hardest businesses to start, the easiest
32. 0:47to scale. E-commerce is somewhere in the
33. 0:49middle, right? You have to have capital,
34. 0:51but then there's scale there you
35. 0:52logistics supply chain issues on the
36. 0:53back end. So, like there's kind of
37. 0:54difficulties on both sides. And so,
38. 0:56every type of business, service, for
39. 0:58example, easy to start, harder to scale.
40. 0:59You can scale, it just takes longer
41. 1:00because you have to train people and
42. 1:01recruit people, and people are the
43. 1:02business. And so, like there's always
44. 1:04difficulty with whatever business you
45. 1:05have, and what happens is when you
46. 1:08switch opportunities, you then start at
47. 1:10zero, you quickly get success because
48. 1:12you pass the levels you already know,
49. 1:13but then you run into the same boss
50. 1:14again.
51. 1:15>> Mhm.
52. 1:15>> And so, what ends up happening is now
53. 1:17you have two businesses you're CEO of
54. 1:18because you couldn't end the other one
55. 1:19cuz you still need to live. And then you
56. 1:21start this other one. And so, maybe this
57. 1:22is the better opportunity, but you still
58. 1:23have this old one. And then you can't
59. 1:25give it up because you're like, "But I
60. 1:26have customers, and I have to keep my
61. 1:27promises there, and I have my What do I
62. 1:29do about my team?" And there's all these
63. 1:30questions that surround that, which is
64. 1:32why you can own as many businesses as
65. 1:34you want, but you can only run one.
66. 1:36>> Mhm.
67. 1:36>> And that's the thing that everyone
68. 1:37messes up, and especially if you're
69. 1:38small, you don't have the resources to
70. 1:39run two. So, you have to make the hard
71. 1:40decision. You have to say no, I'm going
72. 1:42to continue to fix this because it's my
73. 1:45belief that every business can get to
74. 1:47$100 million a year. Every business.
75. 1:49>> Even solopreneur?
76. 1:50>> Yeah. Well, I mean, I wouldn't say solo
77. 1:52The solopreneur is an organizational
78. 1:53structure, not a business.
79. 1:54>> Mhm.
80. 1:55>> So, whatever business that solopreneur
81. 1:57is in, if they sell wallets, if they
82. 1:59sell paintings, if they I mean whatever
83. 2:00it is whatever it is that you sell, you
84. 2:02could sell a hundred million dollars
85. 2:03worth of it. For the like I can't think
86. 2:04of a business. Now, if you're like,
87. 2:06"Well, you can't say that for a local
88. 2:07dry cleaner." So, I'm like, "Yeah, then
89. 2:09you open more." But, I consider that
90. 2:10still the same business, right? And so,
91. 2:13the question then remains,
92. 2:15"Why isn't your business a hundred
93. 2:17million dollar business?" And whatever
94. 2:18the answer to that question is is the
95. 2:19problem you need to solve. And if you
96. 2:20don't know how to solve it, which is
97. 2:21what most entrepreneurs are faced with,
98. 2:23they then think, "Oh, it's not me. It's
99. 2:26the business. It's the industry. It's
100. 2:27the market. It's the vehicle."
101. 2:29>> Mhm.
102. 2:29>> Right? And sometimes I regret that I
103. 2:31talked about how switching opportunity
104. 2:32vehicles because like if I had played
105. 2:33out the other alternative, I probably
106. 2:34have two hundred three hundred gyms
107. 2:35right now. And I'd still be just as
108. 2:36rich.
109. 2:37>> Mhm.
110. 2:37>> And so,
111. 2:39did it like maybe I make less money now
112. 2:40than I would if I had stuck with it. I
113. 2:42don't know. Like and we can never know.
114. 2:44But, I can say that the equal opposite
115. 2:45of that is if you do one thing for fifty
116. 2:47years and you get better at it, you're
117. 2:48probably going to make a lot of money.
118. 2:49>> That is a great permission because I
119. 2:50think ever since I heard you first
120. 2:52actually talking about opportunity
121. 2:53vehicles, I was like, "I might not be in
122. 2:56the right opportunity vehicle. Am I like
123. 2:58doing everything wrong because I'm just
124. 3:00my drawing in a boat and everybody's
125. 3:02[laughter] on the
126. 3:02>> Yeah, it's such a compelling visual. And
127. 3:04it's just cuz it speaks to the pain.
128. 3:06It's just the ultimate easy button is if
129. 3:07I only had this other vehicle and if I
130. 3:09were just doing the same thing I'm doing
131. 3:10now, I would get ten times more than I'm
132. 3:12getting or a hundred times more. And the
133. 3:14thing is is that sometimes it's true,
134. 3:17but it's so attractive that nine times
135. 3:19out of ten it isn't true because you're
136. 3:21it's only true when the model is the
137. 3:23limiter.
138. 3:24>> Mhm.
139. 3:25>> But, most times it's not. It's just it's
140. 3:27a limiter if you if you measure on a one
141. 3:28year time horizon.
142. 3:30>> Yeah.
143. 3:30>> But, Mr. Panda has a chicken shop.
144. 3:32And he's worth ten billion. So,
145. 3:35like is that the is having a Chinese
146. 3:36chicken store
147. 3:38like the the best opportunity vehicle?
148. 3:40No. Did he make it work? Yes. So, it's
149. 3:43just it's just expanding the horizon of
150. 3:45And that's why it's starting a business
151. 3:46that you actually care about the
152. 3:47customer is ultimately the thing that
153. 3:48matters the most in the long run because
154. 3:49if you really care about the customer
155. 3:51and the product that you deliver,
156. 3:53then you don't do it for the opportunity
157. 3:56vehicle reason and the making money
158. 3:57reason. And then making money occurs,
159. 3:59but because you stick with it, it just
160. 4:00keeps getting bigger and bigger and
161. 4:01bigger. Because you keep improving it,
162. 4:02because you love it, it keeps getting
163. 4:03bigger and bigger and bigger. You
164. 4:04maintain your reputation because the
165. 4:05only reason you did it to begin with is
166. 4:06because you care.
167. 4:07>> That's
168. 4:08actually the end talk, I think, that
169. 4:10many people are missing. It's like, "Oh,
170. 4:12what niche do I go in? Is it like
171. 4:14>> Start wherever one you want.
172. 4:15>> Yeah.
173. 4:15>> But do the one that like it's either
174. 4:16some pain you overcame, something you're
175. 4:18very passionate about, or it's uh it's a
176. 4:21professional skill. But I'll I'll I'll
177. 4:22say this other thing that I think is
178. 4:23worth doing is that people have this
179. 4:25fallacy that they're that they've made
180. 4:26the wrong pick. Like, what if I pick
181. 4:28wrong, right? I picked the wrong
182. 4:29business. I picked the wrong niche. Uh
183. 4:31the consolation I can give you is that
184. 4:32if you stick with it,
185. 4:34no matter what, all businesses end in
186. 4:36the same place,
187. 4:37which is
188. 4:38you have a team of five to seven people,
189. 4:40you have a head of marketing, you have a
190. 4:41head of sales, you have a head of IT,
191. 4:42head of legal, head of ops, head of
192. 4:44finance, and they're really all
193. 4:46competent people, and they run the
194. 4:47business. And so, your actual day-to-day
195. 4:50is the same.
196. 4:50>> Mhm.
197. 4:51>> Whether you're selling, you know,
198. 4:53shaving cream, or you're selling
199. 4:54communities, or you're selling private
200. 4:56equity. Fundamentally, you're going to
201. 4:58have a team of people that those
202. 4:59functions of the business have to occur.
203. 5:01And they're probably rolling into you.
204. 5:02And so, if you think about that as the
205. 5:04natural extreme of any business, then it
206. 5:06kind of doesn't matter
207. 5:08what you do to get there. If you like
208. 5:10the game of business.
209. 5:11>> Yeah.
210. 5:11>> And so, that's kind of how I see it is
211. 5:13like, if I'm worried about picking the
212. 5:14wrong thing, it's like, well, no matter
213. 5:15what, I'm going to end up in the same
214. 5:16place as long as I just stick with it.