You Can't Serve Two Masters — Transcript

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1. 0:00Hey Alex, I'm Michael. Nice to meet you.
2. 0:01>> What's up, Michael? How's it going, man?
3. 0:03>> Doing well. So, I run a consulting firm
4. 0:06here in Vegas that implements project
5. 0:08management software for enterprise ops
6. 0:10and PMO teams
7. 0:11>> Okay.
8. 0:11>> with Fortune 500 clients.
9. 0:13Uh we're at 1.4 million tracking towards
10. 0:152 million. We're demand constrained
11. 0:17because almost all of our pipeline comes
12. 0:19through software vendor referrals and a
13. 0:22subcontractor relationship.
14. 0:24However, I've built some serious uh AI
15. 0:27enablement in the business over the last
16. 0:2812 to 18 months and genuinely feel I'm
17. 0:30ahead of most consultants in the space.
18. 0:33My concern is the avatar's fuzzy, but
19. 0:35I'm a top 1% architect of the software.
20. 0:39You're going to roast me for it, but
21. 0:40considering a brand new business with my
22. 0:41wife with a crystal clear avatar in
23. 0:43healthcare. And so, my question is how
24. 0:45do I know if a clear avatar is worth
25. 0:47walking away from a business I think I
26. 0:48already know how to run.
27. 0:50>> Um
28. 0:53I'm I'm okay with you burning the boats.
29. 0:56I am less okay with the trying to serve
30. 0:58two masters or ride two horses with one
31. 1:01ass.
32. 1:02Um and so, if you really, really feel
33. 1:04confident about it, then I would
34. 1:05encourage you to go all in.
35. 1:07Um and I think the way to do that would
36. 1:09be just get your first customer from the
37. 1:12new stream, from a channel that is
38. 1:14reliable. And so, that would mean like
39. 1:16it's either going to be an outbound
40. 1:17method uh or an ad space motion that
41. 1:19you're probably going to run. It could
42. 1:21be an affiliate motion
43. 1:22um as well if you like know two or
44. 1:24three, call it influencers or coaches in
45. 1:26the space who help healthcare
46. 1:27businesses. That'd be a great first
47. 1:29place to go if you wanted to have like a
48. 1:30speed to money. Um but I think you'd
49. 1:33have to pick one of those three um
50. 1:35business models. I understand the
51. 1:36difficulty of the enterprise play. It's
52. 1:39mostly just that the sales cycle's so
53. 1:41long. I'm going to guess, how many
54. 1:42clients do you have right now?
55. 1:44>> About 12.
56. 1:45>> Yeah, I think you're also just wildly
57. 1:47underpriced um on the enterprise side.
58. 1:49So, it makes sense that it It makes
59. 1:51sense that you wouldn't want to charge
60. 1:53SMB prices and go through a Fortune 500
61. 1:56sales process. Does that make sense?
62. 1:59>> Yeah, for sure. Part of it is we when we
63. 2:02go direct, we have like a killer offer
64. 2:05model thanks to your books and like that
65. 2:07does 83% margins, but because of the
66. 2:11referral subcontractor relationship
67. 2:13we're capped at hourly which is killing
68. 2:15us to like 17% margin. So we're trying
69. 2:17to move away from it.
70. 2:19>> Yeah, that's it.
71. 2:19>> The avatar in Yeah, the avatar in that
72. 2:21space though is like do you use the
73. 2:23software? Yes, cool. No, okay, let me
74. 2:26explain what it is. It's not really
75. 2:28industry or vertical based which is our
76. 2:30our struggle.
77. 2:32>> Dude, I'm I'm all I'm all good with the
78. 2:34health care thing. My my biggest thing
79. 2:36on that side is you should be able to
80. 2:39directly go acquire a customer. So what
81. 2:40size health care providers are you
82. 2:42looking for?
83. 2:43>> I'd say it's probably private practice
84. 2:46physicians.
85. 2:46>> I think you'll I think you'll print.
86. 2:47It's very easy to get to sell to those
87. 2:49customers. Like almost every motion
88. 2:52works for them because they're business
89. 2:53owners, they typically prefer done for
90. 2:55you solutions because they don't like
91. 2:57doing things besides their practice and
92. 2:58they're they're very hours constrained
93. 3:00because they literally like make money
94. 3:01by trading their time.
95. 3:03Um and so
96. 3:04but it's it's TLDR, I'm good with the
97. 3:07move. My my only counsel here is that
98. 3:10you go all in on it if you really feel
99. 3:11confident. So do you have savings saved
100. 3:12up?
101. 3:14>> We do. So part of it is we have like
102. 3:16multi-year contracts in the current
103. 3:18business and some of it is just like
104. 3:20pass-through reseller transactions that
105. 3:22we do. So we do have a cushion. So I
106. 3:25guess like the follow-up would be
107. 3:27what would because it's a time
108. 3:28investment, we have two little kids and
109. 3:30just making sure that we're keeping the
110. 3:32current business afloat enough while the
111. 3:34two kind of you know, switch off
112. 3:36essentially from the primary.
113. 3:37>> Well, so the afloat enough part is the
114. 3:39part that I don't like which is what are
115. 3:41the things that you have of that
116. 3:42business are passive versus what are the
117. 3:44things that are still active?
118. 3:46I would say be willing to cut out the
119. 3:48active
120. 3:49to the degree you can. And also those
121. 3:51contracts are ongoing but you can cancel
122. 3:53them on your side whenever you want. And
123. 3:54so, it feels like the appearance of
124. 3:56being stuck, but you could stop it
125. 3:57whenever. Unless Did they prepay?
126. 4:01>> Uh so, it's
127. 4:03In most cases, it's like 3-year deals,
128. 4:05and they pay annually. And again, part
129. 4:07of it's through the subcontractor
130. 4:09relationship, so we're just getting like
131. 4:10a commission check in some of those
132. 4:11cases.
133. 4:12>> No. Again, so just separate out what's
134. 4:13the stuff that I'm doing work for,
135. 4:15what's the stuff that I'm just being,
136. 4:16you know, a sub, you know, overwrite on
137. 4:19to the degree possible. Basically, what
138. 4:21I'm trying to go for here is I'm trying
139. 4:22to minimize your workload. Because
140. 4:25to say I'm going to keep this business
141. 4:27going and then also start this other
142. 4:28business, I think it's the recipe. Like
143. 4:29that is the recipe for pain and failure.
144. 4:32Um and it's what everyone wants to do.
145. 4:36And so, I think that if you could clear
146. 4:37your calendar the Like basically, you'll
147. 4:39maximize the likelihood that you're
148. 4:40going to be successful in this new
149. 4:41endeavor if you have all your resources
150. 4:43deployed towards it.
151. 4:44And I'll give you a different frame on
152. 4:46this, which is that like your downside
153. 4:47protection of like I want to make sure
154. 4:49I'm paying my bills might come at the
155. 4:50expense of 2 years of growth.
156. 4:54So, like you might be able to grow
157. 4:55basically what would be your year two if
158. 4:57you went all in might be your year four
159. 4:59with the quote downside protection
160. 5:01because of split attention. That again
161. 5:02assumes that you're going to be
162. 5:03successful, which might not be true
163. 5:06because you're not going to be able to
164. 5:07fully allocate time towards it. And so,
165. 5:09if anything, maybe I'd prefer your wife
166. 5:10stays behind, fully does that one, and
167. 5:13then you can go
168. 5:15and start the healthcare thing. But, I
169. 5:17do not like split focus. It's just very
170. 5:19hard to win cuz you're competing against
171. 5:20people who are fully all in.
172. 5:22>> Yeah, she would most likely be the brain
173. 5:24authority. She's a nurse. She's way more
174. 5:26impressive than I am and would be a
175. 5:27better brain authority in in that space.
176. 5:30I'd be more of the technical operator.
177. 5:32>> Yeah. But, you like Do you get my cuz
178. 5:35this is what you're saying is I want to
179. 5:37start this new thing, but I have this
180. 5:38other thing, and this other thing is
181. 5:40still full-time right now, but I want to
182. 5:42add to my plate because I think this
183. 5:44other thing's better. If you think the
184. 5:45other thing's better, then like do the
185. 5:47other thing.
186. 5:50>> Yeah, no, totally makes sense. I think
187. 5:52what's what's tough for me is that the
188. 5:54current business just got to a place
189. 5:55where
190. 5:57we're no longer founder dependent on
191. 5:59delivery. So I can go focus on marketing
192. 6:01and sales. And I think for me,
193. 6:02my biggest constraint is I need to like
194. 6:04I don't care about earning for the next
195. 6:065 to 10 years. I need to develop
196. 6:08marketing and sales skills. And so what
197. 6:10I don't want to do is make the wrong
198. 6:12time investment gap because I'm going to
199. 6:14have to develop those skills in the new
200. 6:15business anyways. It's just have to
201. 6:17start it all over from scratch to get it
202. 6:19to that that level.
203. 6:21>> Yeah, I mean, you you described the cost
204. 6:24of switching.
205. 6:25>> Yeah.
206. 6:25>> [laughter]
207. 6:26>> But it sounds like what you want is
208. 6:28affirmation for a decision.
209. 6:30Not a problem to solve.
210. 6:34>> Yeah, I mean, I guess my my fear is
211. 6:36being a top 1% in like one technology
212. 6:39skill set with a fuzzy avatar
213. 6:41is like, okay, can I overcome that
214. 6:43avatar gap to get to 10 20 million
215. 6:45versus, you know what? I'm okay being a
216. 6:49top 20 top 30%
217. 6:52operator with a very clear avatar that
218. 6:55should allow us to scale a lot quicker.
219. 6:57And again, it's really the kids is the
220. 6:59big thing is that I don't want to make a
221. 7:01bet to where it's like, oh hey kids,
222. 7:02it's just going to be a little bit
223. 7:03longer for, you know, this business to
224. 7:05take off. It just feels like starting
225. 7:07over is a is a pretty big gamble and I
226. 7:10don't want that to come at the expense
227. 7:11of my kids.
228. 7:12>> It is a gamble.
229. 7:15And so you ask a question of risk, which
230. 7:16is entirely personal.
231. 7:19>> Yeah.
232. 7:20>> So like, you know, let's say I put $300
233. 7:22million into your account tomorrow
234. 7:24and then you say, hey, I'm going to put,
235. 7:26you know,
236. 7:27a 100 between three different companies
237. 7:29and sleep on the couch. I'd be like,
238. 7:30that's very risky. That's what Elon did.
239. 7:33I would probably not counsel most people
240. 7:34to do that, but that would have been
241. 7:36then we wouldn't have SpaceX and Tesla
242. 7:38and everything else. And so like risk is
243. 7:39entirely personal.
244. 7:41I think that you were looking for more
245. 7:42from certainty from a world that will
246. 7:43give you none. Um and I wish I could
247. 7:46just say like it's all going to be okay,
248. 7:48but I have no idea.
249. 7:49Um I think it makes sense that selling
250. 7:51to an avatar that is easier to target
251. 7:53and has a shorter sales cycle
252. 7:55uh will be easier to acquire customers.
253. 7:58You'll also have to deal with all of the
254. 8:00pain in the asses of that specific
255. 8:01avatar.
256. 8:05>> Yeah, that all makes sense. And I think
257. 8:07that's the big piece I was, you know,
258. 8:09uncertain about is the
259. 8:12how important is clarity of the avatar
260. 8:14to to grow a business in general.
261. 8:15>> Extremely.
262. 8:16>> Yeah, that's kind of what I figured.
263. 8:19>> Yeah.
264. 8:20I mean, perfect world is you sell one
265. 8:21thing to one person.
266. 8:23Uh less than perfect is you sell one
267. 8:25thing to lots of people.
268. 8:26Uh worst case is you sell everything to
269. 8:28everyone.
270. 8:32>> Makes sense.
271. 8:32>> So right now, you sell one thing to a
272. 8:34lot of different people. That's the
273. 8:35fuzziness, right?
274. 8:37>> Yeah.
275. 8:38>> And so, you're trying to transition to
276. 8:39selling one thing to one person, which I
277. 8:40think is a good idea.
278. 8:42>> Yeah.
279. 8:43Cool. Now, that that's that's great.
280. 8:45Now, it's been very helpful. It's uh I I
281. 8:47think my big fear or hesitation is like
282. 8:49I've I've been on a path and honestly it
283. 8:51wasn't until the marketing workshop
284. 8:52>> Yeah.
285. 8:53>> this idea came up and it's like, oh, I
286. 8:55think we might want to go all in on
287. 8:57this. And it's like,
288. 8:58do I want to end one road to pursue
289. 9:00another uh that you know I've already
290. 9:02put a bunch of time and effort in. But
291. 9:03no, this has been
292. 9:05very helpful.
293. 9:06>> Good. I would just I would encourage you
294. 9:07whatever your line of comfort is, I
295. 9:09would just go past that in terms of what
296. 9:11you need to be willing to give up on the
297. 9:12other one.
298. 9:14Because again, I will say this is my
299. 9:16final word before we get to the next
300. 9:17caller.
301. 9:18Um
302. 9:19the idea that you're just going to keep
303. 9:20this business and start another business
304. 9:22is typically a failing formula.
305. 9:26So, you like I Here's my tactic for you.
306. 9:30Create a plan
307. 9:31that gets you out and monitor how many
308. 9:34my hours you're going to have in your
309. 9:36week
310. 9:38by what you remove from the other side.
311. 9:40You're not going to just be able to add.
312. 9:42You have to remove first.
313. 9:44So, think about everything you're going
314. 9:45to be able to remove and then with the
315. 9:47time that's left over, if you think that
316. 9:49you can actually start a business and
317. 9:50succeed, then go for it. If you still
318. 9:52don't think you can with the amount of
319. 9:53time that when you clearly look at how
320. 9:54much time every single thing takes,
321. 9:56they're going to be able to do it, then
322. 9:58you have a decision to make, which is
323. 10:00maybe I should just, you know, reinvest
324. 10:01in the business that I have and see like
325. 10:02is there a world where I could get to 20
326. 10:04million in that business? You sell to
327. 10:05Fortune 500 companies. I think it's
328. 10:06probably you could. You just aren't
329. 10:08charging enough for that level of
330. 10:09avatar.
331. 10:12>> And I think last thing I'll say, cuz I
332. 10:14do want to be respectful of time, is
333. 10:16for us, we get through the Fortune 500s
334. 10:18through subcontractor relationship,
335. 10:19which we don't control.
336. 10:20>> Yeah.
337. 10:20>> And it's very difficult for us to get in
338. 10:22direct with an offer that does bring
339. 10:24>> Yeah, you just don't have an acquisition
340. 10:26channel.
341. 10:27>> Exactly.
342. 10:29>> So, instead of starting a new business,
343. 10:31you could just start a new acquisition
344. 10:32channel in the business you have. That
345. 10:33would be a different alternative.
346. 10:37All right, appreciate you, man. Just
347. 10:39create the plan, figure out how many
348. 10:40hours you got,
349. 10:42and then make the call.
350. 10:43>> Will do.
351. 10:44>> All right, thanks, brother. If you like
352. 10:45this video and you're business owner who
353. 10:46wants to break through your current
354. 10:47revenue ceiling, I just filled every
355. 10:49lesson from scaling 10 businesses past
356. 10:5010 million and three businesses past 100
357. 10:52million into completely free scaling
358. 10:54roadmap that I've used to go from zero
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360. 10:58plus. And so you can click here and you
361. 11:00can check it out. Again, absolutely
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363. 11:02appreciate you and enjoy.