Pain, change, and business growth

I shared a little bit of my own story about a family business turnaround in a previous story here on Medium. In the end, few of the people in the top level management positions survived that turn around yet none of them were simply fired. Most left on their own accord as new, and fair, expectations were placed on the leadership of the business that they themselves realized they did not have the capacity to fulfill. I always looked back in my mind seeing this a case where the world was changing around a business that refused to keep up. In other words, the problem was a management team that was disconnected from the changing needs and expectations of the world around it. That is until I heard Clate Mask, the CEO of Infusionsoft, speak at a Genius Network office meeting…

Clate talked about his observed fact that companies go through very specific stages of scale. If the people, process, and systems of a business were staying stagnant the growth of the company would not push through these stages. On the path from zero to $10 million in annual sales a company would hit these stages — from 0 to 300k, from 300k to 1M, from 1M to 3M, and then from 3M to 10M. As a general rule there would be two stages to go through for every 10x increase in sales. So to get to $100M you would have the same challenge getting through $30M in between before reaching the final challenge of $100M. What Clate found seeing his customers go through the same pains as he made him realize that this was beyond coincidence or otherwise applicable to only a small subset of industries — this seemed to be a law of business growth.

Vision, people, and personal growth are the three areas of focus that must be addressed to get past these stages of growth. For our family business we hit the $30M barrier and blew past it with pure momentum all the way to $45M but then faced bankruptcy because those areas of focus were ignored. Yes, the world changed around us. However, looking back that was always true and the overriding reason we could not get to the next stage in growth was exactly what Clate was describing. Coincidentally the solution we found, 20 years before hearing Clate talk, was exactly what he described as well. The company tuned and communicated its vision to become an acquirer in a consolidating industry, I started the people equation from the top down by hiring a COO the business could grow into, and for myself it was the beginning of making a deep commitment in my own personal growth which still continues today.

On vision Clate recommends reading Beyond Entrepreneurship: Turning Your Business into an Enduring Great Company.

On people Clate commented for your leadership team: good people can grow with you for one stage (3x bigger than where you are now), great people can grow with you for two stages (10x bigger than where you are now), and almost nobody can grow with you for more than two stages. You can take time to grow your leadership into new levels of competence but that means pausing your business for years before moving onto the next stage of growth. The nearly fatal mistake our family business made was to move onto the next stage of growth without pausing nor upgrading our leadership team to keep going.

On yourself as the owner, personal growth is the only way keep going. For me personally, with zero previous experience, I saw the business grow 10x from the start of the turnaround to the time I sold it. Coincidentally, or more likely realizing one of the laws of growth Clate has now defined, I felt I could no longer see it go further after that 10x increase. It reached a stage where selling the success was far more comfortable than trying to take it further. In the end, your success will never exceed your personal growth and though I have continued to grow over the years that have followed that sale I have chosen to focus on areas that started over in new places for me rather than continuing on a path that I truly felt was not in my destiny for life.

Life is not a race to 10x your business, it is an art to 10x your life. — Joe Foley

Knowing these laws of business will not completely remove the pain of growth. It will, however, make you more prepared to handle the cost of that success when you find it. Only 3% of businesses ever make it to the $1M level. With odds that are so much against success to begin with you need use everything in your toolbox to keep going and make it further.

(Originally posted on Medium)

Advice to 2017(±) High School Graduates

Our education system is broken for the world as it is today and unfortunately you are a product of that broken system. The good news is you made it through, the bad news is most important things you need to know were never found in the classroom and are most likely not in your academic years ahead.

Learning needs to be less like memorization, and more like… Angry Birds. Half of school dropouts name boredom as the №1 reason they left. How do we get our kids to want to learn? In the traditional education system, you start at an “A.” And every time you get something wrong, your score gets lower and lower. In the gaming world, it’s just the opposite. — Peter Diamandis

Though it is too late for you, keep this in mind going forward — especially if you are thinking of entering education as a “career” or if you someday have children of your own. Cracks are starting to form and education will become yet another example of the taxi cabs most people thought would be the way of the world forever.

Take the following five points not as a complete list but rather as a starting point. As obvious some may seem, mastery is for the few that use this knowledge to navigate a future that others will simply miss.

#1 Moore’s Law may be known for the Transistor but Exponential Growth is everywhere around us

Ray Kurzweil is great at predicting. So great he has hit a number of major advances in the world to not only the year that they would happen but down to the month in the year that they would happen. How does he do this? For the most part he understands one thing better than most. That the human intuition of “local and linear” no longer approximates reality. We are living in an exponential world.

Here’s another way to think about it: imagine you are going to walk down a road taking steps a meter in length. You take 6 steps, and you’ve progressed six meters (1, 2, 3, 4, 5, 6). After 24 more steps, you’re 30 meters from where you began. It’s easy to predict where 30 more steps will get you — that’s the simplicity of linear growth.

However, setting anatomy aside, imagine you could double the length of your stride. Now when you take six steps, you’ve actually progressed 32 meters (1, 2, 4, 8, 16, 32), which is significantly more than the 6 meters you’d move with equal steps. Amazingly, by step number 30, doubling your stride will put you a billion meters from where you started, a distance equal to twenty-six trips around the world.

In other words, do not be fooled by looking at the linear approximation to the short term past and assume the future will continue that rate of change. Few seem to believe self driving cars will be here any time soon. Look back think of the things that have been added — maybe some over your memories of a life time — tire pressure monitoring, on-board diagnostics II, the smart key, backup cameras, electric cars, bluetooth, GPS, and more. A linear future will just see more things being added over the years to come. An exponential future, however, will bring things into question that linear thinking cannot. Imagine a world where car ownership is no longer needed. (If you have access to a self driving vehicle why would you own one?) What are people going to do with the garage space at their homes? How about parking garages? Parking lots? The extra space on streets with no need for street parking? How is real estate going to change? What about productivity in a world where you no longer need to pay attention to the road? All of this with less accidents, less traffic, less pollution, and amazingly less cost.

 

As a recent graduate moving into further education or directly entering the job market the question you need to ask yourself is how will exponential change effect my assumption of where my interests will intersect with future realities?

#2 Asymmetric Risk (and probability in general)

When you see a headline like this, “You’re more likely to be fatally crushed by furniture than killed by a terrorist,” you should immediately understand that it is written by someone who has no mathematical skills whatsoever.

You need to think of risk in terms of optionality. In other words, you do not want to be in place where you need to be 100% correct to have a huge payoff. You instead need to be in places where taking small risks might lead to a huge payoff. Think of the possible combinations of a penny or a gold bar on one side, and a train or tricycle on the other. Trying to pickup a gold bar in front of a train might get you killed, whereas picking up a penny in front of a train is just plain dumb. Picking up a penny in front of a tricycle will probably make you at least a little more rich, however, getting the gold bar from in front of the tricycle is where you really want to be. Though it might be okay to not know ahead of time if it is a penny or a gold bar in front of the tricycle you never want to be picking up an unknown in front of a train. Optionality gives you a chance to invest as if it is a penny and then figure out if it is gold and further if it is worth the risk to pursue. For example, spend as little as possible to test a new business idea in a specific market. If the response and margins are huge then go all in building the business out rather than the other way around as so many others do only to lose everything. (Oh, just in case you were thinking that market data, demographic studies, and competition research equate to actual testing — the answer is no!)

Going back to where this story started think about the problem of higher education at the moment. You have a huge investment in both time and, most likely, money in the form of student loans. At the other end, in an exponential world, you do not really know if there is a train or tricycle that is coming between you and your dreams. What if there was an alternate option where you could get a focused degree over the course of a year and only have to pay for it if you succeed in a career? MissionU is one such example of possible massive change coming to a broken and misaligned system of education. As a recent high school graduate you are not going to be able to take advantage of the change starting to break through in education at the moment but you will be able to approach the world with more open eyes to see ways to take advantage of the change rather than being a victim of it.

#3 The drive towards democratization and demonetization

There are two counter intuitive forces pushing forward very rapidly, however, both seem to get little attention if you listen to mainstream news.

Prices always go up — right? That is called inflation and people say that is why you need to make a certain return on the money you save just so you can not lose the value the money is able to buy over time. There may be times of deflation in between but for the most part those are just small bumps on the road ever increasing upward.

That is until exponential technologies (especially AI and robotics) started to significantly change this equation. The cost of living itself is now being demonetized and it has only just started.

Democratization is coming rapidly too, however, in ways that might not be completely obvious if your mind only thinks about politics when hearing this phrase. The idea of what an “expert” is, and what expertise they delivered to the people, will largely go away and that power will be given back into to the hands of the people.

One of the most obvious areas of massive change will be the elimination of the general practitioner in the medical sector. Diagnosis and, in many cases, treatment will go into the home and on the body as sensor technology continues to evolve and links are found to what is within our own abilities to change in order to achieve continued wellness.

From medicine, to clothes, to education, and beyond — customization and control will return to the people and the result will be better, faster, cheaper, and more robust than centralized expertise and production.

#4 Happiness

You need to become unfuckwithable.

Unfuckwithable — (adj.) When you are truly at peace and in touch with yourself, and nothing anyone says or does bothers you, and no negativity or drama can touch you.

The single most troubling side effect of social media is the increased need to compare oneself to others. Life is a single player game and though that might sound depressing it is not:

I’ve noticed that the happiest people I know have opted out of many of the multi-player games. They use internal metrics. There is no competition with anyone to be happy. They don’t compare themselves to others or experience jealousy. They treat success as a byproduct of happiness, not as an addictive drug like most of us do. Happy people think single player. — TheHappyPhilosopher

The secret to world peace is a happy childhood. The good news is that it is never too late to have a happy childhood and it is even easier to do so in a single player game. (If you can change your perception of the past then you can change the past as it relates to you) This is not to say that it is generally easy. The world can be a hard place and unfortunately, probably more often than not, parents are a source of the problems rather than the solution to overcome them. This truth leads me to my last point…

#5 The best investment you can ever make

If you are thinking money here, think again. The single best investment you can make is in yourself. Read, listen, watch, attend. Formal education is a part of this journey and in the end it is going to be a very small foundation of your life ahead at the very best. The rest is 100% up to you.

Like compounding interest for money, knowledge is compounding interest for your mind. The idea is to not make a massive change over a short period of time but rather small changes over long periods of time to reach destinations that are simply unimaginable from who you are today. When I read a book, listen to a podcast, attend a seminar, spend time in a mastermind group, I look for one or two things I can bring back to my life today and implement well. Don’t worry about all of the things you are not doing right, or all of the things you could change for the better — instead just focus on tomorrow being one step better than today and let the compounding work its own magic.

(Originally posted on Medium)

Find your passion through taking action

ou may have seen the pie charts that show the realm of what you know, vs what you know you don’t know, vs (the largest area) of what you don’t know you don’t know. For most of us our passions are an itch within ourselves waiting to find a home. The problem is that this itch has a higher degree of probability resting within the space of what you don’t know you don’t know.

 

Personal finance expert Stefanie O’Connell explains in her 19th lesson of 30 Lessons Learned by 30:

The prevailing myth of passion suggests that it arrives in some magical burst of inspiration, but in reality, passion is uncovered through action, exploration and work.

Bottom line is passion more about something discovered than simply being known. Thus, if you sit around wondering why you are not passionate about what you are doing in life — that is the problem, stop sitting around! It also means you do not need to quit your day job to find your passion. Quit it when your passion becomes obvious and the road ahead opens in such a way that you have no choice but to travel forward.

Be aggressive in private, be robust in your public work. You will sleep well at night. — Nassim Nicholas Taleb

In my random walkings I have been a probie for a day FDNY Academy Randalls Island, New York. I was a roadie for a day for The Who. I have also done a few walk-on roles for TV series. All of these were exploring things I knew very little to nothing about thus there was no way to connect the dots going forward that would bring me to being a partner in a rapidly growing film business that I now love dearly being a part of. Without that exploration the life I have today simply would not exist and, for me, that is a sad and scary thought to have because I am so happy and grateful for where I am in my life and the people I work with.

If you are not in that happy place, or perhaps still want more out of life, look under the rocks you find in places you never explored before to start finding the possibilities of a new life. Passion is the place where the word ‘work’ goes away and is replaced with wanting to get up everyday to do more because of the fulfillment it brings.

(Originally posted on Medium)

Fighting Against Gravity

Jocko Willink has some important words about a different kind of gravity:

When you’re working out you’re fighting against gravity. Gravity is pulling the weights down, it is pulling your body weight down, it’s preventing you from sprinting up the hill. So you’re fighting against gravity but strangely enough the gravity that usually defeats people isn’t that gravity, it’s the metaphorical gravity. The gravity that pulls you into bed and keeps you there in the morning, the gravity that pulls you into your house and prevents you from going to the gym, the gravity that stops you from starting something you want to do. That’s the gravity you have to fight!

It is a simple concept but something a lot of people miss. It is easy to see the runner, mountain climber, cyclist, body builder, and think, “It is amazing how their hard work has paid off!” Unless you are thinking about winners and losers at the edge of performance in sports luck is not something that remotely comes to mind. In other words, the abilities of these people are directly related to the hard work they have put in over a long period of time and no matter what shape you are in currently you can at least imagine the process, be it true to reality or not, that has got them to where they are.

However, what about the person with the great job, money in the bank, outstanding peer group, that is falling into opportunity everywhere? It all comes down to rich parents, out of reach education, and in most cases — simply luck or brains you don’t have — right? Wrong! As I have said before it takes a good five to ten years to become an overnight success. It is during those years when all of your time is spent fighting the metaphorical gravity keeping you from the place where you can actually see results.

The metaphor goes deeper… If you stop fighting actual gravity your muscles will quickly start to atrophy. Wait long enough and you will be starting from square zero all over again. It might take longer depending on how far you got but it will, none the less, happen over time. The same is true with metaphorical gravity. Success never releases you from the struggle. It does, however, bring reward to it that will be the ever plentiful juice keeping you going. It also means to go big you need to start small. (You cannot suddenly add fitness to a lifestyle by starting out with running marathon) Want to get to a place where the doing the impossible in your mind today is the normal of tomorrow? A good place to start is to follow this simple advice:

Do one thing every day that scares you. Baz Luhrmann — Everybody’s Free (to Wear Sunscreen)

As the days turn to weeks, the weeks turn to months, and the months turn to years, you will be surprised how thoroughly you will eventually kick metaphorical gravity’s ass.

(Originally posted on Medium)

The Problem is Facts Do Not Matter in Politics

I’m too old. I don’t have enough money. I’m not smart enough. I don’t have time. I’ve tried everything. All of these can be generally thought of as limiting beliefs. They are the excuses we hold identities so strongly to that, even when there is a way out, our attachment prevents us from moving forward. That attachment might give us significance, certainty, uncertainty, connection, or even the illusion of contribution — when we support others who believe the same — but it is not going to lead to growth. With five out of six human needs covered limiting beliefs are hard to get out of for a reason.

The problem with politics is when dealing with one of the most complex systems humanity has ever seen, any large government on the planet today, beliefs will — be they limiting or not — trump the facts nearly every time. Worse yet, we react to inconvenient truths as if they were personal insults.

Take the comment, “There are a lot of killers. You think our country’s so innocent?” The Obama administration country target count up to 2014 for bombing was Afghanistan, Iraq, Pakistan, Somalia, Yemen, Libya and Syria with possibly others to add as well. In 2015 the bomb drop count estimates were 22,110 for Iraq/Syria, 947 for Afghanistan, 11 for Pakistan, 58 for Yemen, 18 for Somalia — totaling 23,144 meaning about one bomb dropped for every 23 minutes of each day for the entirety of a single year. If you are a citizen of the United States how can you not think our country is a killer?

The most amazing result of this election is seeming belief that it came down to electoral votes winning over a popular vote. Meaning that, if for some reason, the other side ‘won’ then everyone would suddenly believe what they do. It is like saying there is a room of 100 people and if we can just get 51 people to agree then the other 49 people’s point of view no longer counts.

Is it a wonder that the phrase ‘deplorables’ has become a badge of honor for half of the country? As was mentioned in the Chicago Tribune:

They’re hardworking Americans, people who sent their children to our wars, people who were pushed aside by our politics, slapped down by our economy and abused by Democrats, Republicans and the very elites who formed the establishment. They were once the forgotten. But now their guy is president of the United States.

The shame for the United States is we have become split where the only way to be right is to make the other side wrong. Elon Musk would like to save the world from global warming, put us all on solar power, and establish a second home for humans in the solar system. Yet, he is being shamed for being a Trump Advisor? One of the most popular rationalizations is how can you work with Hitler? (If you study enough about it, you realize the guy vetting and banning refugees is probably not Hitler …the guy CREATING refugees probably is) Yet, when it comes to beliefs — as Scott Adams has said — Trump’s critics have evolved from expecting Trump to be Hitler to preferring it. Obviously they don’t prefer it in a conscious way. But the alternative to Trump becoming Hitler is that they have to live out the rest of their lives as confirmed morons. It is my only hope that one of his later tweets comes true:

Watch for Trump’s critics to migrate from “Trump is Hitler” to “Trump is incompetent” by summer. Later: “Competent, but I don’t like it.”

For if the prediction does not come true, why would anyone indeed want to work with Hitler or even someone who is incompetent? Right now we have two countries and are in the middle of a civil war — thankfully without bullets.

 

If you don’t believe we are in a civil war then I guess you are not reading this online and don’t use social media. The problem, however, with the term ‘civil war’ is that eventually one side needs to win or the country has to die. If you really want an empowering belief, make it that both sides can win this war of beliefs. There really is only one thing Trump is focused on for his legacy — American jobs. It really is that simple. Want ‘Hilter’ to go away? Want incompetence to go away? Find beliefs that lead to job creation that also achieve other goals. You might need to give up the Hitler thing and a few others to make that happen but at least there will a room with a lot more than 49 or 51 happy people in it afterward.

(Originally posted on Medium)