Thanksgiving leftovers (the business kind)

Hey everyone,

Happy Thanksgiving week.

I did a live AMA last month and figured I'd package up some of the better questions and answers for you.

Here are seven of my favorites. 

The real answer? Hire better people.

I know that's not what you want to hear, but the number one determiner of employee output is who you hire in the first place. If you hire the right people, put them in the right roles, and give them what they need—they'll work magic for you.

Beyond that, run some sort of planning system (EOS, Scaling Up, whatever works). Align everyone around your ultimate mission. And understand that different employees need different levels of attention. Some need daily check-ins. Some need weekly. Your best and most senior people? You might only talk to them every few days or longer. Many boards interact with CEOs weekly, monthly or even quarterly.

The goal for your business is to move more people into that last category.

There's no one right answer here.

It depends on who you are. Some people (like me) find more joy going from 0 to 1. Other people are great at taking something from 1 to 10. Some people are comfortable with personally guaranteed SBA debt. Others built entire businesses with zero debt because they're allergic to risk.

You've got to figure out who you are first.

In terms of risk: startups have a higher chance of failure when you start. But existing businesses cost more upfront (and often require debt). The question isn't which is riskier—it's which risk matches your wiring.

I get this question a lot. 

Here's how I think about it: it's not about your "roots" or sticking to "basics." It's about understanding what your business actually does for people.

Take Panera. They used to be called Saint Louis Bread Company. They'd bake bread in-store and it smelled terrific. That's why people went there. Then private equity took over and they started pre-cooking bread off-site and delivering it. 

They traded what made them special for 100 basis points of margin.

That's dumb.

The failure isn't about change or no change. It's about forgetting why your customers show up in the first place. So ask yourself: what does your business actually do for people? And are you still doing that thing?

Somebody actually asked this, so I'll answer it.

First, here's how you'd do it: start and own companies. Don't give up equity. Let them compound at a high rate for decades. 

That's how Michael Dell, Larry Ellison, Bill Gates, Warren Buffett—all of them—did it. Nobody becomes the richest person in the world through investing. It's all equity.

Second thought: think long and hard about whether you actually want this.

I've spent time with a billionaire. 

People followed him around trying to get his money. He didn't know who his real friends were. It was disgusting. 

I'd rather be a big nobody. Being really wealthy and totally under the radar? That's the move. That's the absolute way to go.

Make driving sales your number one mission.

It should be what you think about in the shower. It should be the first hour and a half to two hours of every day. It should be your whole reason for existing as the owner of that agency.

Then figure out what experiments you can run in your sales process to accelerate growth. And then just grit it out and figure it out.

For your business, whether it's an agency or anything else, this applies. Growth comes from obsessive focus on sales, especially in the first year of ownership.

Three things—and most people only do the first one.

First, become a student inside your company. Absorb everything your team knows. Try to become the foremost expert on your market, or at least close to it.

Second, get experience just by being there. You'll pick up nuance that's not in anyone's head. This takes time, but it's valuable.

Third—and this is what most people skip—go outside your company and interview experts. There are 20,000 people on LinkedIn in your industry. Email 50 of them. At least three will get on the phone with you. The best ones? Retired guys who did your exact business for 30 years and have nothing else to do.

I had a random email from a guy who'd grown a business from our size to 100x our size. One hour on the phone probably made us $250,000 just from the wisdom he shared. These people will save and make you so much money, and they're easier to find now than ever before.

So for your business: stop waiting to magically know everything. Go learn from people who've already done it.

I have a rule: never get into a business you'd be ashamed to admit you're in at a cocktail party.

If someone asks what you do and your answer makes you uncomfortable, don't do it. This is a big world. There are lots of ways to make money. Don't compromise on this.

Beyond that, pick your industry based on the life you want to live—not just what's most profitable. A lot of people do this backwards. They chase the highest margin or the biggest potential payday, then end up miserable.

The whole point of owning a business is to create the life you want. So figure out what life you want first, then find the industry that enables it.

For me? I'm never owning a cleaning company. I don't like dirty things, and if you own a cleaning company, eventually you're putting your hand in a toilet. I'm just not interested. That doesn't mean it's a bad business—it's just not for me.

Figure out what's not for you before you commit.

What's the biggest question you're wrestling with in your business right now?

Thanks for reading!

Michael

P.S. Got questions? My next AMA is Jan 23rd — free! Sign up here.