When to Blow Up Your Business and When to Leave It Alone

0:00I want to start with something that's been top of mind for me, which is how much change do you change when you are at different points in business. And I think one of the hardest things that I've had to deal with um is I tend to want to kill a mosquito with a cannon.

0:24Right? I want to overkill. If something makes me uncomfortable in the business, I hate it so much that I want to change everything. And I'd say this is probably one of my bigger weaknesses as an entrepreneur. And I would say it's probably a cousin or, you know, a step sibling to lack of focus. That one being the biggest, and I'd say this is probably like the number two sin that I that I suffer the most from. And so, I've been thinking a lot about this because there's a there's a time where you need to be willing to disassemble what you have in order to build what you want. And so, there's also times where you should not really mess very much with what you're doing and very, very minorly tweak if you feel, quote, uncomfortable with your current situation. And I was like, what what delineates those two things?

1:08Because I see people every week who are who are in one of those two buckets. It's like they have been stuck in their particular business at, you know, a million bucks, three million bucks, 10 million bucks, whatever it is, for a while and they're at a point where they can't really see how they're going to scale it. And so, when you're in that bucket and this gets particularly difficult once you, you know, have people depend on you, you have a lifestyle, you make a certain amount of money that you might actually have to take your business apart and rebuild it in a different way. And I was I was talking about this with a friend of mine where I said, it it is harder to build a billion-dollar coaching business than it is to build a billion-dollar insurance company or a billion-dollar bank or software company. And how would know that?

1:58There is no billion-dollar coaching business, and there are tons of people who want one. And so, when I use when I look at that, it's like, "Okay, so there's something characteristic about this model that makes it very, very, very, very difficult to scale." And so, when I bring that up, I bring that up to say, "There's in any industry, anybody who's listening or watching this, if you think about your business, and then think about the maximum extreme, you should look at what the highest version of that business actually looks like. And if there isn't one, there's probably a reason for it. So, either you're going to be a an innovator, and you're going to be SpaceX and Elon, or there's something very, very difficult about this business as it scales, right?

2:36And so, if you're in that situation where you're like, "I want to be a billionaire, multi-billionaire, trillionaire, whatever your your magic number is, right?" Um and then you look at your existing vehicle, and you're like, "There's literally no one, and this vehicle has existed for a long time, that has achieved this thing that I want, then you have to be willing to basically blow it up. And that sounds like a very extreme thing, but I I I I I know I know so many entrepreneurs were like they got to they got to kind of like the highest level of a local maximum, right? They got to the small peak on a much bigger mountain range of their potential.

3:07And they had to be willing to say, "I'm going to lose my status to myself mostly, cuz no one really cares, right? Where I define my self-worth by my revenue or my profit or my cash flow." And of course, you shouldn't do that. But you still kind of do. Uh but and so, and they have to be able to take this giant step back, and then look at all the resources, skills, and money that they have, and think, "Okay, what would be the best use of all of these raw assets, and how can I deploy them in a way that would get me the highest return?" Um and I'd say, on that extreme, you don't want to blow everything up, but there is a point where if you have been stagnated, number one.

3:43So, here's my like litmus test for this. Um cuz I was thinking about this, because I think it's it's like this very interesting dichotomy between two very extreme uh sets of choices. So, number one is if you've been stagnant and there is no version of the business that you have that is significantly larger or has accomplished the goals that you have, then that might be a condition where you might or should be willing to consider dramatically changing the business.

4:10And we sold uh one of our companies to a different group and they basically were unwilling to take risks proportional to what the business required. And so, that I just had a conversation this morning about that particular thing. So, it's like I've had a number of small things that have happened in the last, you know, call it 7 days that made this top of mind. But then on the opposite end of that, so yesterday morning um I met with a couple leaders in the company and we were talking about one kind of issue that we have, you know, within the business.

4:46And I proposed what I would consider to be a more radical change. Um because I tend to I have a tendency to want to just burn everything to the ground and like start over. Um but that extreme is is not warranted when you are doing well. Right? So, this is the this is my big point here. If you're doing well and there are bigger versions of the business that you have and things are trending up into the right, that is usually not the point to take out your cannon.

5:15Right? That is not the point where you're taking out your chainsaw. You should be having your your sandpaper and maybe a little chisel, you know, to just like make fine details in the business more than take a jackhammer to the thing and then build it all from the ground up. And so, that is so, I don't know which situation you're in, but in either of those situations, you need to have a different lens because I see people stuck at both where like they can't get past a certain level because they keep reinventing the business over and over and over again.

5:43And so, their their team is their team and themselves and their customers, are constantly in this in this reactivity, and this whiplash of the changes that they consistently are making, because they forget that most people don't understand all the plans in their head, and all that other people understand is the few words they've communicated about it, which most people have no context on, and they didn't consume all the other stuff that got you to this conclusion. Right? Uh and then uh on the other hand, the people who uh need to take more change, um and typically this comes in the form of being willing to sacrifice their lifestyle for the short term, uh in order to accomplish their larger goals.

6:19Right? Like um Alex Becker, who was at my uh at my um at my at my Money Models launch, uh you know, he had a he had a very large kind of information business, and then he basically shut it all down and started Highros, and then Highros became a much more valuable business and bigger. Uh Sam, right? Uh Sam Evans from School, had consulting.com, uh and then he shut it down when it was making, I don't know, 3 million bucks a year, and I think he was working like a day a week on it. And think about how crazy that is. Like, even the day a week was too much in terms of the lack of focus and distraction it was taking away from School. And only when he shut it down did School really take off. And so, there's there's something very important on both sides of these things, which is like, if no one has achieved what you want, and you've been plateaued for a significant amount of time, it might be worth taking a jackhammer to the thing and being willing to take two steps back from an ego perspective in order to build the thing that actually has the potential to become what you want. On the other hand, if you're winning, it's the opposite set of skills that you have. And so, this is one of those very interesting things from entrepreneur entrepreneur- ship perspective, which is the right tool for the job. Like, you need to have a jackhammer sometimes, and you need to have sandpaper sometimes, you need to have your chisel out, but what you want to make sure you're doing is you're not chopping a tree down with sandpaper, and that you're not trying to uh uh jackhammer uh to do a fine out final details on the Mona Lisa. All right. And so uh I'll set that as my my Monday morning intention for you guys in terms of the degrees of change. Uh if you're winning, change very little. If you're losing, you might want to consider changing a lot. And losing can can can mean different things to different people depending on your goals.