THIS is the Key to Succeeding in Business

I believe that business is the systematic process of exposing your own inadequacies. We’ve talked about this so much in previous episodes, but it bears repeating because I think it’s maybe the most important aspect of entrepreneurship, of building a business, is that there are no such things. There is no such thing as business problems. There are simply you problems. There’s simply deficiencies that you, as the individual, the founder, the entrepreneur, the owner has. And the reason you weren’t growing, the reason you weren’t where you want to be is not because you have a problem in the business. It’s because you have a personal problem. You have a deficiency that is manifesting itself as a lack of growth, as a lack of customer, of lack of retention, a lack of being able to hire, a lack of being able to retain talent.

Right. All of those things simply track back to you. Let’s go through some examples here. Let’s say you are struggling to get more customers. Well, getting more customers is really just a mathematical equation once you figure out what your conversion rate is. So for how many number of leads need to become aware of you and your product before you convert them to a paying customer? You work backwards from that conversion number. And then you say, how many customers do we want? If you know that you have a 10% conversion rate and you can take on ten new customers this month, then you know you need to get 100 leads for every conversion, which means you need to have 1000 leads coming in every single month to be able to generate those ten customers. And so this is just a simple math problem.

Now the question is, how do we get those leads if you’re not growing, if you’re not where you want to be? It’s not a lack of leads, it’s the problem. It’s the fact that you don’t know how to get leads. You don’t know how to create content on social media that attracts leads. You don’t know how to do paid advertising. You don’t know how to recruit affiliates. If you knew how to do that stuff, then you would have the thousand leads coming in. You would have the ten customers. Then you might have a new problem, which is I can only take on ten customers at a time.

I’m stuck, say, doing $100,000 a month. I wish I could double that to a million dollars a month. The reason that you can’t do that now maybe isn’t because you don’t know how to generate leads. It’s because you don’t know how to fulfill at scale. That could be for all sorts of reasons. That could be a manufacturing issue. It could be that you’re not efficient enough in the production of the widget. It could be that you don’t have enough team, you don’t have the right team.

And both of those track back to the fact that, do you know how to identify, how to recruit, how to train, and how to retain top tier talent? That is often the reason you can’t go from taking ten customers to 100 customers in a month. You don’t have the team around you to be able to handle the fulfillment without a. A proportional drop in quality. Right? Now, let’s say that you have the ability to generate unlimited leads. You have that skill set. You have the ability to go and hire and retain a plus talent so you can take on all of the fulfillment in the world. And now you have more leads coming in, and you’re growing more than you could possibly handle, and you have more money in the bank than you could possibly reinvest into the business. So now what do you do? Now you have this problem of, like, I just have too much money sitting around.

That’s a really great problem, right? That’s a really great problem. But you want to be making that money work as hard for you as you work for it. And so now you have a new problem, which is, do you know how to allocate capital? Do you know how to invest? Do you know how to optimize, to maximize the length to which each dollar can go and work for you? Right. And so at each phase of this business, using these very simple examples, we see, there isn’t really a business problem. There is a you problem. You don’t know how to do a thing. And once you unlock that deficiency, once you unlock that skill that you lack, then it opens up the floodgates, and it will reveal a new level of inadequacy, a new skill set that you. That you don’t have, and that if you could remove that constraint, it will open the floodgates to the next right.

The chain is only ever as strong as the weak link. And business is just a continual process of discovering which of your links is the weakest and then systematically replacing that link, and then there’s a new chain that’s weaker. So now you got to go find that thing. This is all the idea of the theory of constraints. And that’s why I’m so. I’m so bullish on the idea that entrepreneurship is the world’s greatest personal development program, because it is just the systematic process of exposing your own inadequacies until you get to the point where the machine can run and build without you. And that’s what we’re trying to get to ultimately, as the entrepreneur, is to get to that place where we’re not needed in the day to day operations of the machine for it to continue not just running, but continue growing. It’s a beautiful thing when you finally build a business that grows without you.

I imagine, I don’t have children, but I imagine it’s a lot like how parents must feel when their child finally goes off into the world and starts doing things with their life that aren’t dependent on you. You go, hmm, it’s outlived me. It’s outgrown me. I’m no longer required for this equation. It’s an amazing feeling. It’s also a little bit bittersweet. But now you can just go make more children, aka make another business. So that’s gonna do it for me, guys.

And, guys, I hope you got some value from this. If you did, do me a favor, just share it with somebody that you think would get some value as well. If they’re an entrepreneur, they’re struggling in their business. Share this with them. To share is to care, and that’s gonna do it for me. We’ll catch you guys tomorrow. Until then, stay happy, focused, my friends.