Ignoranz-Schulden: Was dich Nichtwissen kostet

0:00What is ignorance debt? >> [sighs] [gasps] >> Really good question. I haven't defined it and I should have. I would say it's the delta between the behavior that maximizes your trajectory towards a goal compared to your current behavior set.

0:24And so the discrepancy between those two things is the amount of the debt. And so obviously it's hypothetical because to some degree like no one knows besides God or whatever your you know creator being is of what the perfect move is. But that delta I think represents like where you're at now versus what you should be doing. And so I see ignorance debt as the difference between actual and should. Another way that I look at it is the unknown unknown.

0:49And what tools or measures can you use to know how much ignorance that you have in a specific domain? Man, these are really good questions. Um My my gut my first initial you know thought response to that was how far away you are from the top. Honestly. Like if somebody's like I know everything about this and yet they don't have any proof that they have skills.

1:16They have no evidence. Then it's tough to say like like I people will probably dislike this but I I do think that people who are wealthier of the subset of human beings who would like to make money whatever subset of. So if that is the goal, the people who are poorer have a less accurate view of reality. Mhm. And so that distortion impairs their ability to get what they want because they take actions that they believe will yield the outcome that they want and then it doesn't. And so I see that's why I like entrepreneurship in general because you have absolute objective feedback from the marketplace and it's also typically very quick. And so you have so many more feedback loops um, which is tougher when you're starting out to not have these feedback loops unless you're just trying to start something for you, right? Um, but all that to say, like, how do you How do you know how big your administrator is? It's just Typically, the earlier in your journey you are, the bigger it is, um, typically, um, and the further away you are from the top of whatever endeavor you're going after, the bigger it is. The only caveat there is time cuz some people are on the right path. They just haven't given enough time.

2:20And sometimes they're growing extremely fast. They may not be a billionaire, but they're making millions of dollars every month and they're on the same path. They might even be growing quicker in wealth than the billionaire who's accumulated it. And this is where it's really nasty. Um, so there's Have you heard of the pasta tower exercise? No. Okay. So, basically, it's like you you take pasta, you have, you know, marshmallows, gum, whatever it is, right? You have a couple things and, uh, you have to build a pasta tower as tall as you can in like 60 seconds.

2:48And, um, when you when you do it, if you stop the clock, um, there's a number of questions that happen afterwards, right? Which is like, if if I give you 10 minutes, would you have built it differently? Okay, if we had to build it to as tall as this building, what if What would you have done differently? Right? And so, there's a lot of like sub lessons that I think come from it, but basically, like, the fastest way to build a $10 million business is not the fastest way to build a billion-dollar business. Mhm. And so, that's where it gets really where it gets more kind of more nuanced, right? So, it's like, okay, well, I'm 20 and I'm doing $10 million a year.

3:20That may mean that you have something that could become a billion dollars or it might mean that it's something that isn't really going to make more than $30 million a year because of the nature of how the the business is set up. So, it's like, what foundation do we have underneath the building? Um, that that that we're that we're Is it Is it aligned with the kind of like the footprint of what would then eventually become this ultimate thing? And so, how do you recognize that when you don't know? There's a concept in Silicon Valley called a zero-million-dollar business and a zero-billion-dollar business. It's that same foundation. And I think a lot of people think they're they're going to make a million then 5 million then 10 million. But if you look at Open AI, some would argue they're they're not making any money, but yet they're valued at hundreds of billions of dollars. And maybe they still will end up not making money, but that is the road map to making a trillion dollars versus just scaling kind of incrementally. Totally.

4:09I think it the only tough part that I think um not only there's plenty of tough parts, but um for for newer entrepreneurs is is the context of the advice that's being given, right? So like if I'm if you're talking software and billion-dollar trillion-dollar companies, like there's a whole set of advice that makes sense here. If you were trying to scale a lawn care service business, a lot of that advice will actually be disadvantageous to what your ultimate goal is. And so I think that that's again that's that filter where how do you how do you know what advice to listen to what what advice not to listen to. And a lot of times because the nature of the internet, you can't give context because it kills the clip's reach. And so you have like I think that that layer of being able to judge becomes increasingly important as the context is increasingly removed from most content that we consume or at least that gets massive reach. So the truly niche knowledge is not being shared and memed across the ecosystem.

5:09So you have to find in other ways. One way is that I look at ignorance that is if you want to learn how to be a top YouTuber, you go and spend time with the top 10 YouTubers and they will tell you the unknown unknown. Mhm. So you probably don't know ahead of time what you're not doing, but they basically being around people that actually done it are the ones that will that will un shout. Otherwise, it's very difficult to know the unknown unknown. Super hard.

5:36And you know, uh so I was a management consultant before I entered this new life that I have. [laughter] Um but one of the ways that whenever we'd enter a new field where, you know, I'm 20-something years old trying to learn about space, cyber intelligence, in the military make a recommendation to the military which is absurd, right? As a 21-year-old. Um right. So it's like how do you how do you become competent at something really quickly? And so the method that we always use which is I think the consulting method is um you know, we would we'd ask the person who gave us the the the project, who are the five smartest people that you know um about this particular issue? And then we'd ask every one of those five people every question we could possibly think of.

6:10Like give us the understanding of the whole space, blah blah blah. We go all the way through and at the very end we'd say, who are the five smartest people that you know about this? And so eventually we'd ask we'd interview every single one of those people and by your 20th or 30th of these interviews, like you have a pretty good feel for what's going on and then when someone else says something you're like, but you know, so-and-so said this and how do you feel? And like you can start kind of mapping the network. Um and eventually you ask for five friends until the names become the same. Like it's the same names I've already talked to him, already talked to him. And so um whenever I want to do research on like a new industry, that typically is how I do it. I still use the same exact method I did there. Um it's just faster now cuz I can just make an Instagram story and then people can reach out, but like when I wanted to learn about like banking and payments and credit cards um cuz I was looking at um investing in something there.

6:56Um I I did exactly that method. Over 2 weeks I had like 30 conversations with people that had exit between 30 and 3 billion. Um and I I learned so much and I was like, oh okay, I know I don't want to enter this space. This sounds more interesting than what I originally thought. Um but you don't know that going in cuz you're just you have a blank slate. You know context. The only change to being around those people is you could always delete or add things based on your own personality and what you naturally want to do. People are kind of have this fear that they're going to become this person just because they learned whatever behaviors they're they're using. And I think that's Real quick, if you're business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So my team and I put together the $100 scaling road map which is basically 200 hours of us looking over all the portfolio companies we had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information it'll tell you where you're at and the most important part for you what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources and finance. And so no matter what you're struggling with someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. go to acquisition.com/roadmap, plug in your business information and if you want us to actually help you deconstruct a business and you're trying to scale we'd love to help you out. On the thank you page you can book a call with my team and we will look at the business, see if we can help and if we can we'll invite you out to Vegas and we'll do this in person live.