Entrepreneurship Is Not for Everyone | Tobi Pearce

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most people in my experience are incredibly focused on the idea of looking like they are good at things instead of actually focused on being good at things Toby Pierce was the co-founder and CEO of sweat a $400 million Global Fitness app with over 50 million members in nearly 200 countries yeah people believe that the idea if you make money you must be good at business and that is fundamentally untrue he's founded over 10 businesses and continues to innovate and push the boundaries of Entrepreneurship for himself and his

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clients you have to be a genius to be successful that's not true at all there's plenty of people who are super successful and Wealthy that're actually really not that intelligent at all the idea of like hustle bro culture is like the stupidest idea ever the funniest part is you know they're like a three strive white belt trying to coach everyone else that's an interesting take cuz you're saying that 99% of its [ __ ] for some weird reason we see these people who make 10 bucks online

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and we're like you're an expert you and Bill Gates same same bro it's all on you your limitations are on you the work is on you your progress is on you your failing is on you it's all on you yeah so um most and this is potentially a little controversial I would like to introduce Toby Pierce to the agency podcast hey man hey man good to be here welcome dude I know we got a we got a tight hour so I'm Keen to just dive head first in and just I really really want to unpack I guess how you see entrepreneurship and

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where you think most people get it wrong yeah sure so to fire it up do you think hustle culture is more about ego than actual productivity or are we just glorifying burnout I think if you got to tell someone you're hustling you're too focused on people worrying about if you're hustling and you're not focused enough on trying to win do you think too many people are doing this they're trying to show The Journey rather than just actually build a business 100% I I think that uh most people in my

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experience are incredibly focused on the idea of looking like they are good at things instead of actually focused on being good at things and I think that's a fundamental mistake that most people you most people make not just in business but in life in general and I do think at the same time there's also uh depending on the way you look at it there's also a little bit of an unfortunate Trend uh at the moment which is this idea of like every want you build a personal brand because a personal brand is the best

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thing that you can do for everything um and that's just like a fundamentally untrue statement yeah and so I think that when people are building a business they fall into the Trap of being like everyone says I have to like share my story and build a brand and this that the other and I'm not saying that you shouldn't it's like but if you're so focused on doing that you're not focused on winning number one yeah number two if while you're trying to build your brand you're so focused on creating the

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perception that you are a winner in business and you're not actually winning in business then you are also a liar and so it's a really bad you know trap to fall into and in my experience cuz I work with a lot of different Founders that kind of you have gone down this path I actually think it is a a self-fulfilling prophecy in some regards to kind of self-destruction and so and so what I mean by that is so like I I will try to build this business and make some money and while I do that I

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will I will conform to society and I will try to document the story and I will build my brand because it's apparently good for what I'm doing and then while I'm doing that what happens is I'm distracted from my business and so for whatever reason that or other reasons the business maybe doesn't perform as well as I hope it does but then I don't really want to share that I'm a failure because then that would dispute the idea of building my brand because people don't want to follow a

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failure and I can't tell you about that and most people won't want to tell you about that so then I will look at highlighting other aspects of what I'm doing that would indicate or suggest that I'm successful I.E I'm hustling bro you or I work really hard or I'm flying first class or I bought my new watch or check out this private jet that I flew on bro yeah and the reality is that I'm not saying that you can't build your brand and be successful and that those things don't mean you're not but in my

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experience the vast majority of people that are doing that [ __ ] they ain't winning I would agree with you I've experienced this firsthand where people have an enormous following and nothing in the bank yeah 100% And you know I it's like to be clear you know I uh I was getting like approaching my first million you know when I was like much younger um and I literally went to watches of Switzerland in Melbourne and bought a I think it a B6 brightling for like 20 grand or whatever it was at the

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time and I don't think I'd ever even worn a watch up until that point in my life and the only reason that I did that and this is like I was not really building my brand or anything at that point um you know then the only reason I did that is because that's what Society told me that this is what successful people do and so of course naturally I got that and then I was like well dudee I'm a PT like when do I like when am I even going to like I'm not going to wear this in the gym that would be stupid cuz

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I would damage it I'm like well I don't really go out that much so I was put in the wardrobe yeah and then so I'm like okay that was 20,000 bucks for nothing I was doing that to please the people right you and so uh you know 10 15 years later and a whole bunch kind of different you know development and and perspective shift I now look at that experience of M cool so that had nothing to do with winning had everything to do with giving off the impression that I was winning and so now when I look at

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other people would do this and now it's much more public and the idea of being an entrepreneur is like cool you know it gives you status I think that's a massive problem too it's like you don't get status for starting an organization it's not bold it doesn't make you cool it's not impressive winning is impressive starting a business not impressive because if it was give me this laptop I'll just log on to ABI right now go in find a free business name register one like cool I'm an Entre

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entrepreneur bro you should admire me but it's it's just it's a complete fallacy do you think it the the barrier to entry to Proclaim entrepreneurship is at an all-time low absolutely I think the technological advancements kind of universally and uh you have reduced it but I I also would say well sorry yeah so you use Ecom for an example it's like I could start an Ecom business I could have an idea in the next 5 minutes and by close a business today I could have a business live online running ads selling

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a product that maybe I haven't even made yet right just it's being manufactured or offshore or I could use chat TBT to create info product and sell it and make like 90% margins right and so the barriers are low for those who care and want to try however if I'm a guy who just goes out and chooses to do that and that's my first time ever doing that and then I make a million bucks that doesn't give me the right to tell people that I know anything about business it doesn't give me the right to you go and create

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like a course or you know become a coach or whatever and this is another this is another kind of thread of this idea of like you know publicizing all this stuff online not saying that that person can't add value to a beginner I'm not saying that that person can't help other people what I'm saying the idea of positioning themselves as an expert is only a sales and marketing tactic it is not truth and I think sometimes people like fall under the illusion that you know what they put

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out from a marketing or brand perspective to build their identity they think that they actually fall into the Trap of thinking that it's true they actually fall under this illusion that's like oh dude this is actually who I am it's like no actually it's not that's not who you are yeah and it's dangerous because you're you're creating this perception people buy that perception and advertisement if you will 100% but then so this is the thing this is a big trap because if so let's say you do that

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and then people start recognizing you they give you positive feedback they comment you they like you all this sort of stuff like can you imagine the anxiety that you would have that one day I might be caught out one day I might say something think I'm an expert and it could be completely wrong and I will look like a fool like can you imagine imagine the anxiety that that person is experiencing pretending like this is just High School like all over again it's the same thing everyone pretending or trying to be cool

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or sharp so they can kind of get the cool stuff but something that people don't understand at all or don't think about is that you can't fake that [ __ ] forever you in 10 20 30 years time when you're 40 50 or 60 years old ain't no one giving a [ __ ] about your business coaching program then brother no one no one cares yeah and by that particular point in time because you've lived your life that way you'll probably have no money because you've been too focused on

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spending it to look like you have money and not actually focused on developing developing the requisite skills and knowledge you know to actually generate an income while you're seeing this play out in the marketplace social media I know you're involved globally with a lot of people and businesses and you've probably seen a multitude more than I have do you think that in the mess of those that are playing or acting this role as a entrepreneur let's let's just use that label do you think that in the mix of

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that you're seeing real like truly Thoroughbred entrepreneurs come up in those scenes or do you think they're kind of acting adjacent to all of that all together are they staying away from it completely normally the latter so normally the people who are like legit winners or like on their way to kind of you know being that I'm not saying they're never going to be in those environments because you know they may spend some time there but it's typically not a long-term thing because they end

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up they they're obviously intelligent enough to realize that most the people there are actually not winning and this to be clear this is like a part of the like the FAS you know that is being in business you know you think you've got to buy the watch you think you've got to fly first class you think you've got to have a good car you got to keep up with the Joneses you think you've got to go to all these business networking events and guess what man no one there gives a [ __ ] about you they're all a 100% it's a

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complete it's a full-blown illusion yeah you and and the reality is like with respect the reality is most people that like Pride themselves on attending all of those events and all those networking events they're trying to give off the impression that they know stuff but you know they actually don't necessarily know things and you know one interesting idea so depending on the country and the category and whatever broadly speaking soort 80 plus% of all businesses that start today will be dead in 3 years or

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less of the sort 15 to 20% that remain another 80 to 85% of those will be dead in the following 3 years and this kind of sort of progressively continues and the more you stretch it out the issue is so let's just use a business that gets to 5 years right so I launch Year One year two and I've got to year three and I've actually made some decent money at that point in the world's going you've made some decent money you're great right so then I start telling people that I'm great at business and then over

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the next kind of one two three years the business like phases out and then dies but I don't want to tell people that story right and so the world doesn't see the nasty side or what I would say is just the reality of business they don't want to look at this objectively but if you look at it that way you kind of go okay well there's like less than kind of you know one or less than 1% of businesses are kind of ever going to go on to actually be sustainable organizations right firstly number one

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and number two that would therefore mean that 99% of the information that comes from business owners that you hear is from people whose businesses will be dead in less than 10 years that's an interesting take because you're saying essentially that there's there's a mathematical equation at 99% of it's [ __ ] uh to to me that's like not only you know true and reasonable it's obvious you and for any person who has like significant competence from a a commercial aruman perspective will look

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at most of this stuff and go well you have no idea and you know a further complexity here is right that you know you can be like tremendously good at product and bad at everything else and still make money a little bit of money right you can be tremendously good at kind of marketing or brand and bad at everything else and still make a little bit of money and this is the thing people conflate the idea you know people believe that the idea if you make money you must be good at business and that is fundamentally untrue there are

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lots of people who make some money in business and some money in the short term right that give off the impression that they at business but they might just be really good at marketing yeah you know or found a hot product like I saw this happen during a lot of people did Drop Shipping and everyone thought everyone thought that during Co they're like oh I'm just like [ __ ] hot at business I'm just like killing it I'm a dude like there's literally like a full-blown consumer endemic here you

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like happening right now it's like there is a pandemic you know that's shut the world down and then for whatever reason everyone decided they'd spend all of their money because interest rates were super low and anyone who knows anything about economic Cycles I don't not I do not profess to a lot but I know enough to know that is a cycle that means there is patterns and we were at a particular point in the cycle where the interest rates were low and so everyone spent money like if you look at sort of I

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forget there's a wonderful stat but it's like out of every dollar of equity that was created from IPOs during that kind of 2020 to 20122 or 3 period for every dollar of equity that was created in public listings 90 cents of it is gone Jesus and that's because the private Equity Funds and the investment Banks they understand this part of the cycle cheap debt Buy companies list sell stocks pump and dump move on do it again but for 99% of the world they're not aware of that cycle they just think that

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they're winners and they're going to win and then everyone loses their money no different to the guy who does Drop Shipping you know creates a Shopify account does some Drop Shipping bang away they go they house yeah now I've got goes upside down 100% And I've got a a whatever they called A A ptic Philip Paddock or whatever the watches are that all those guys like you know they you I've got one of those and you I've got my C-Class M and like I'm balling bro yeah but the

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reality is like cool congratulations you did some good things you are worthy of some celebration but it doesn't mean that you're an expert in business because if you just step outside of business for a second and you go okay well how many people do you know that play basketball for two years that are as good as Michael Jordan no one no okay and how many people do you know that trained martial arts for two years that are as good as you know GSP or is like no way no one right it's not possible it's not enough

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it's not enough time 100% and how many people you know like study the language parttime that can speak it absolutely fluently with appropriate dialect and nuance and go to another country almost none but like for some weird reason we see these people who make 10 bucks online and we're like you're an expert right like you you a proclaimed expert between you and Bill Gates same same bro like and like the it's so it is so ridiculous when you put it that way it sounds nuts it is absolutely insane yo

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my name is Dane Walker and I am disgustingly obsessed with branding I had to figure out a way to do branding every single day so I branded myself then I started my agency rival and hired a team of branding Mavericks hellbent on creating Brands so good that they'll make you a competition de pants so here's the thing you want your brand to go viral and rival makes Brands go viral that's why we're offering you a free 30-minute branding session to get an expert's opinion if you don't believe me the proof is in the

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pudding here's what clients have to say about rival rival is trusted by Brands like nutrition Warehouse light my bricks and V so if you want to absolutely smoke the competition and make your brand go viral hit the link below and book in your free 30-minute branding session how how long do you think it is as a as a typical lifespan for an entrepreneur is someone who's probably likely to be well tenured and do they have to have do do you have like some kind of number in your mind around if I see these kind of numbers I

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know you're legit and I'm not talking about like money in the bank numbers like amount of businesses time in the game yeah I think I think there's a degree of like time in the game for sure but I would say it's kind of like um yes we use this example a lot in in Jiu-Jitsu right you have these guys who you train for 15 20 years and they're black belts so they're experts but they're actually pretty useless right the way yeah yeah you see these like blue bels coming after three years the

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trainers beat them up right and so it's not like time is one thing you but but skill and time don't have a perfect onetoone relationship and it's a really important idea a really good point yeah really important idea to understand and so I think um you know when you listen to people about the way they talk about business it can be really easy to understand kind of we they're out from a intellectual sophistication standpoint that's one idea another idea is that people who have been through certain

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different cycles of business so like idea the cycle of expanding uh you know domestically to International you know the idea like kind of like localizing and uh you know products um you know acquiring you know so acquiring or exiting or raising money these sorts of experiences and the reason they're kind of typically like reasonable indicators is because they force certain conversations to happen which will highlight knowledge gaps which then forces them to acquire knowledge and skill to kind of get past that so like

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for example if you see someone who's like you know going through like five fun raising rounds regardless of the actual quality of their business they probably got some like decent underlying understanding domain expertise around what that looks like how to manage it 100% And I would also go on to say that people who have uh you know kind of worked on like the dirty nasty reality of business have a much better grasp so when I say that I mean it's not to say that you know 25-year-old bro that's set

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up three you know Ecom you know stores on Shopify doesn't know a bit I'm not disputing that but if you look at someone who's like oh you know like I um I actually can like bought and sold five gyms you know like you've kind of had to go through the finance process due diligence you've kind of had to consider return on Capital and these are like the real parts of in my opinion the real parts of Commerce and business that exist that most you know entrepreneurs don't understand and you know this comes

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back to like one ultimate underlying idea right and this underlying idea is that most people universally who are entrepreneurs identify as entrepreneurs or call themselves entrepreneurs could not tell you what an entrepreneur is they do not know they could not tell you what it is or what it means they couldn't tell you you what it means to be a good one they couldn't tell you you where the word came from and you know I always like look at this sort of stuff so um yeah one of the one of my favorite

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discussions of people is about like you brand which you're obviously super familiar with and they're like oh yeah I'm building my brand I'm like what's brand and they're like oh well you know they go on a 10-minute Spiel trying to explain what amand are make so so if you can't tell me what brand is how can you convince me that you're building brand and so the entrepreneur idea is the same thing it's like if you can't actually tell me kind of like what an entrepreneur is you know the goals or

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the function of an entrepreneur or how how can you kind of claim to be a very sophisticated one right but to me it's a strange idea yeah it's like you haven't even spent time with the concepts it's like saying I know Kung Fu but you've you've never studied yeah yeah it's yeah you I watch a lot of um watch films yeah I watch whatever is Crouching Tiger Hidden Dragon yeah um I'm passionate you uh it's it's a really interesting idea right um and I'm not necessarily saying you have to

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understand the history and the emology of the word or whatever but yeah but at least have some kind of grasp on on like what it even symbolizes so for you what would you say your definition and I've heard many of these but what's your personal definition of an entrepreneur so um I like a uh really like mechanical BL Bland one um and we'll go on a short Journey short take me down the rabit hole okay all right so French Economist J right a couple hundred years ago this is the atmology of the word entrepreneur

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I love this came up with the word entrepreneur right and there was a couple of different iterations of the definition But ultimately he landed on this idea that an entrepreneur is someone who um with their resources or Capital will move their resources of capital from an area of low productivity or like low return so we take that and then reallocate it to an area of high return or high productivity okay so like buy a product from overseas move it to a new market inflate the price right and so this is like in to me I I don't

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actually necessarily think that's like a complete definition but I think it's a great start okay and so when I look at that I'm like okay if the idea is really around like resource productivity so a good entrepreneur uses equivalent resources to generate greater productivity so a great entrepreneur generates more productivity than a crap entrepreneur right and the productivity in essence is measured you know kind of like via return on Capital and so perhaps like a slightly you know more

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you modern version of this is like well an entrepreneur ultimately creates product or service right for an existing demand or Market or creates a new market right and in the process of doing so they're able to generate Surplus and that Surplus is you know profit right right and so therefore not just making Revenue but an actual correct Health e so forth correct and and again there's trying not to you know be kind of too specific here you know there's there kind of capital and income there's

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different you know types of generating value but we'll just use Surplus in this case as a simple example right so if I can kind of create one way or another a product or service that I can use to fulfill or distribute to a new or existing market right and in doing so I can create Surplus I have productively utilized my resources so I am a good entrepreneur makes sense to me right and so if I can repeatedly do that then I'm probably pretty good and if I can do that and explain why you and make bets

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about that and kind of continue to do that with a decent kind of probability of success rate then I'm probably pretty good right and so when you look at this as a the idea of like hustle bro culture is like the stupidest idea ever because in a simple sense it's like if you're an excellent entrepreneur you're getting the highest productivity for your resources doing nothing right so same idea in martial arts if you can win a but it's hard that's not as impressive as completely just dominating right with

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low effort way more impressive 100% way more it's way more impressive if you can use no effort and make it look easy and your entrepreneurship in some regards should be the same you should be able to win and be very productive with your time with your resources but also like not doing it looking like it's killing you right and that's my view right but if people can't understand these ideas and most people can't you know so they're Shopify you know Heroes of the world they can build some good

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businesses and do all that and whatever but they don't even really Fally understand these ideas they couldn't commercially explain to you how they how they got here they're like a white belt in some yeah and the funniest part is you know they're like a three strip white belt trying to coach everyone else but that's Bel exactly and like to be clear there's a lot of three stripe white belts who try to coach people yeah it's really unfortunate no I get it and I wouldn't even Proclaim to be a black

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belt like I've got a mentor I believe is a black belt and I feel like a little yellow belt you know what I mean and it's it's fun so do you do you see that failure is a necessary part of success or or do we romanticize it because it makes a great story yeah I look I do I think that it is like necessary uh no I think it's probable you I think it's likely to happen uh I I do think that um failure and you perhaps I would perhaps I would like substitute an alternate word there what what would you swaper

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with yeah so if we like Nuance this right so let's say like you know failure you know in one regard if we looked at it the way I would Define it is your kind of uh achievement or lack of achievement rather against a particular objective right would you say it's safe to say that the the general population's attachment to that word might be finale if you need to finish yeah yeah cannot cannot so most language in uh English society in English Western world uh is uh kind of like you know fatalize like

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it's either on or off it's up or down it's great or [ __ ] you you won or you lost it's not Nu correct you and there's obviously degrees and so that's why sometimes failure is not a great word well it's like in Hebrew there's seven different words for fear we just use one yeah correct yeah we're a little uh non-specific um but uh sorry if we continue to kind of go down this point so is failure necessary well I think failure um you know from uh the perspective of I set out to achieve this

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objective and I did not achieve that objective is a great stimulus for learning it creates a feedback loop for those who want to listen and reflect right but I don't necessarily think that you like have to try something and then completely lose go all the way back to zero and like try a new idea like that type of failure like complete disaster I don't think that's necessary for people to succeed but I think like incremental small High Velocity failure or learning I would prefer to use the term learning

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you know is uh is absolutely necessary okay like the action learning cycle 100% And so um you like it's sort of like uh you if you're trying to learn an instrument right you're playing a wrong note is failure right and that's a way that it's a stimulus that you receive which then indicates to you okay I have to practice this yeah or I have to slightly alter alter my Approach here if you're Lear martial arts and you continue to trade this one move and it doesn't work or do the move differently

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or try a different move because it's not the right tool and so I think you know let's say like unsuccessful experiments or unsuccessful attempts at doing things are in some regards a necessary stimulus for Learning and feedback you contextualize that perfectly so which which leads into a quote I want to share that you have shared recently and that is if you want to live an easier life first do all the hard things yeah so if the goal of Entrepreneurship is to create Freedom mhm why do most Founders look stressed

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overworked and enslaved to their business yeah so um most and this is potentially a little controversial go for it right so most people look incredibly stressed on their business Journey because they probably shouldn't be on a business Journey right and when I say this and I I I think it's really important like to contextualize that this is not a criticism of most people it's a reflection of the data right so I am incredibly unathletic I'm right there with you and I'm like I'm like 510 and sometimes they

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be like I'm like 511 and like 1 18 you like I'm like just not at 6 foot right but by virtue of kind of high and athleticism the probability that I'm ever going to be epic at basketball is incredibly low right and everyone can kind of you know accept that and also I'm like I'm late in life so like the likelihood that I all of a sudden become those things is effectively zero or very your yeah yeah yeah 100% And so like from a a relative standpoint the likelihood that I could kind of pick basketball up and then be

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really good comparatively and kind of win is low or zero right and so that's a really easy idea to understand when we look at business we go okay well so you are this person with these personality characteristics these attributes this skill this knowledge this context and this you know kind of time of your life there's there's sort of a very very large amount of um you know answers or resp respons to those kind of criteria that if you are those things the probability that you're successful is

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almost zero and that's not doesn't make you a bad person it doesn't make you a terrible business person it's just the context upon which you are trying to do something is unlikely to occur and so you then experience a huge amount of stress as a result of trying to fight against you the data if you will what's what's your opinion on what those tropes traits and attributes might be for those that have all the odds against them yeah so let's look at these as like principles and guides rather than rules

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because you know there's you know it's sort of like saying you have to be a genius to be successful that's not true at all there's plenty of people who are super successful and Wealthy that actually really not that intelligent at all right for a variety of other reasons you but typically speaking I would say you if you're someone who um uh uh can't deal with and or manage conflict well um you have like poor uh kind of emotional self-regulation uh you know you're like

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kind like a quite you anxious individual these sorts of things I'm like it doesn't mean you can't make money but you know it means that you're probably not going to make as much money as other people are potentially not those things number one uh number two you're also potentially uh going to experience the Journey of business in a much more harsh manner true you know than what other people will and so like a lot of people look at you know this idea as being you know kind of like ah like you you're

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excluding people and it's discriminatory or it's like judgmental or whatever it's like it's it's it's it's actually not you it's no different to me saying I'm probably not going to dunk in a fullsize ring yeah I'm not sad about that maybe when was younger I was B Sports is a great analogy because I you know I heard someone recently say that you know if you look at a business people try to treat their business like it's a family it's so wrong but at the end of

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the day it's like a sports team it's like if someone's not performing you're going to fire them right find another person and this is the simplest idea right family is unconditional everything else in life is conditional end yeah like an employment contract is conditional you want to know why there's terms and an agreement that you sign they are the conditions right like your family is not conditional you don't get born and say well my parents says they'll give me this you and I'll give

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my parents this you know morally at least as far as Society is concerned there's Unwritten you know things that we commit to and family is always family for most people not all people right and so like yeah that idea whenever someone says that to me I'm like no wrong like I agree with you yeah and these are these are like signals you will that when you spend enough time with Founders and business people and managers or whatever it may be you only need a few of these small signals to kind of make decently

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00:29:57 - 00:30:58

relationships to get started simply go to wix.com Studio do you think that if people have these traits tropes and proclivities to to these Natures that you just described such as anxiety uh they tend to avoid conflict and so forth is there a remedy for this can people train themselves out of it absolutely yeah so like just to be clear I was quite anxious you guys have been early on I avoided conflict all of those things yeah and I came from uh uh you know an earlier life that didn't really kind of mentally and emotionally

00:30:27 - 00:31:20

at all set me up well for things so if you want to you can do those things but then that would mean that the position upon which you were approaching entrepreneur is not as a highly anxious individual because you have overcome those things right um and so you know for me having gone on that Journey you know kind of you navigating anxiety and fear and you know uh resilience and these sorts of things um well I got way better results way faster way easier with way less stress so you're like increasing your stats in a video game

00:30:53 - 00:31:38

becom a stronger player uh but you can't expect to go from the beginning of the game to the end and without increasing your stats yeah yeah pretty much and so like if you again we you know the sports is a great example you know no matter how good you are at shooting in basketball if you can't appropriately get to where the ball is or where it needs to be I.E because you can get yourself there because your cardiovascular conditioning is at a high enough level then no matter how good your shooting skill is it's redundant

00:31:17 - 00:32:19

right and so no matter how good your knowledge is in business if you can't like mentally and emotionally condition yourself to tolerate The Experience then it doesn't matter if you're right it only matters if you can get the right things done so so when you think about the conditional components of Entrepreneurship do you have non-negotiable attributes traits that you look for when you partner invest or or find a way to work with someone yeah um so like from an investing standpoint if I can't align with the founder I

00:31:47 - 00:32:41

don't care what the business is just full stop and together it doesn't matter it like I've done this enough you know to know um uh that it's just it's like it's not worth it the money isn't worth it the stress isn't worth it and more often than not the money doesn't come you anyway if that's the case what's an example of that uh so um you know like I like a consider founding investor in a particular business and I was not involved in running the company but i s

00:32:15 - 00:32:55

like advised or sat you at arms length on the outside and um I was quite confident that I was right about a variety of things because they were really in my kind of subject matter area um but the kind of other like founding partners and one of whom was which you sort of the CEO you know by um pretty much didn't didn't want to agree with any of that didn't want to listen to the data didn't want to make kind of financially reasonable decisions and this was a journey that went on for

00:32:35 - 00:33:24

like 4 years or five years and the business could have otherwise made great money right and ended up dying purely because like couldn't like align you know on things that were reasonable and so you know there's there's a lot of that and then you know people also as well like there's a lot of there's a lot of nuance here you know so if you for example if you invest in people that are not like focused on truth so like truth seeking individuals who are kind of otherwise reason able resilient you

00:33:00 - 00:33:47

practical like these sorts of characteristics um then you're inevitably especially if they're first- time Founders presumably they're not wealthy and so they're largely driven by fear and safety right because they haven't yet made their money and then the business is kind of like you know their baby but they're just running in survival mode 100% at the bottom of M's hierarchy and needs and everything's a problem yes 100% And so for anyone who has had children they will know that the

00:33:23 - 00:34:15

first child that you have you like incredibly overly gentle with you like you so careful you know kind of put them in the card and you freak out about like absolutely everything but then anyone who's had like a multiple kids or done multiple businesses knows that that's just all of agazi it's all irrelevant right so my second is a as a boy he's two and we just like have no fear drop him on the roof and drive off yeah he was climbing on the fridge the other day and I was like cool yeah yeah no problem

00:33:49 - 00:34:38

yeah and if that was my first point I'd be like get down from there you 100% man and it's like it's a really interesting idea but so if you kind of come back to this in the context of let's say you're kind running a business or you own a business and you're trying to identify you know who you want to work with you know in a simple sense um I would look at this through a few lenses so firstly there is a you don't need Geniuses but there is an intelligence threshold below

00:34:13 - 00:35:03

which will be very challenging to work with right so you need enough intelligence with the people that you work with not Geniuses like above a baseline of intelligence would you say EQ and IQ or one of the other oh so yes come down this SEC but yes yes I would so so we start like just kind of raw like processing you know kind of horsepower you have to have kind of a reasonable or decent amount right so that's kind of number one you number two is then like with that kind of you know behaviorally or like attitudinally you

00:34:38 - 00:35:28

kind of have to have people who want to um you have the energy you know uh to kind of apply that at problems and ultimately trying to apply that intelligence at truth seeking like so I want to kind of get to the right answer not and this is a really important thing it's like I don't care about being right I care about getting to what is right there's a meaningful difference right not being blind and and attaching yourself to one belief yes being willing to pursue truth yes correct yeah and so

00:35:03 - 00:35:56

if you can find people who are kind of like moderately intelligent uh you know who have high energy you who are genuinely kind of focused on what is right and like getting the the truth you know in certain things um and you believe that they kind of like high integrity individuals that's a really like beautiful degree of characteristics if you want to be slightly more um uh you know specific you can go to go things like you want people who are like you know High conscientiousness you high open or at least like moderate to high

00:35:29 - 00:36:16

openness um because all of these things are on a spectrum and they're a mix right so if you have someone who's like a full-blown you know genius right they can kind of solve probably solve most of the problems and probably get to truth and whatever but they like really low energy like your high introversion low openness right right it's like okay so they're always going to be right and you know so they're right so you're not it's not like playing um uh you know uh a computer game right where you want your

00:35:53 - 00:36:54

character like maxing out all stats that that's that's a wrong idea right um You you need you need blends of these and then if you wanted to be if you were kind of slightly more sophisticated you would also understand that um they're like foundational first principal attributes but then there's also other things so if you're let's use uh a business iio I was in London last week uh for one of my companies um and we recruited like a country manager to run that business for us you about a

00:36:23 - 00:37:15

year or so ago and that's a really important role it's the most important role you for particular business and so if they tick all those boxes cool that's great right but then they also have like a series of experiences and beliefs right and so I'm like okay so I need to find someone who has the experience of building not managing not maintaining building yes building so can I find someone who's gone from like 0 to 1 you're all like 1 to two but not from like 10 to 11 right so that they've done

00:36:49 - 00:37:30

that really early phase right so I want that and I want like high openness because I have to be open to ideas and I want to influence things cuz I believe that I have a reasonable you know kind of idea a lot of things so they can't be like a genius who has like low openness who doesn't want to listen to my ideas but has a right experience so we got to get a blend here right and then I'm like okay cool but I'm not recruiting just to get from zero to one I'm recruiting with the idea that hopefully they'll be here

00:37:10 - 00:37:56

for like 3 5 seven years okay so then I need to know that this person has a degree of openness and experience being kind of structured and managing people so not just building but also a bit of management a little bit of structure and they have to be open to that right so it's another kind of like Nuance I understand right yeah yeah and I'm like okay cool and then for this particular cont Texas as a Marketplace business model so a software company that builds a marketplace right but specifically a

00:37:33 - 00:38:15

Marketplace for small businesses with like nonhomogeneous Supply so we're getting very very specific now and I'm like okay so can I find these kind of like personality characteristics and attributes with kind of these experiences these beliefs you like but very very kind of specifically and so a lot of people go like a so you're looking for like one person in the world right and so in some regards that bit of a unicorn you do narrow them down right but the reality is if you're at least

00:37:54 - 00:38:38

very deliberate about that it means that your kind of like signals you you're more sensitive to these signals early on right so at least you're looking for it yes and so to me you kind of filter by like you know the initial like personality characteristics and whatever because if you find someone who's like epic perfect experience but not great to work with it's kind of a no no buo so you have to kind of satisfy these ones and then ideally you kind of your belief skills and experience are relevant and

00:38:16 - 00:39:02

then the best ones are the ones that have like a good overlap and blend yeah but a lot of people go to Recruitment and be like you've been like social media manager before they're like yeah bro it's like cool you're hired and it's like well where when like for what channel do what and are you a nice human you know like there's all these yeah I've seen I've seen people in the marketing roles in in enormous companies and their previous role was like working in you know a takeout restaurant or

00:38:39 - 00:39:25

things of that nature it's like what what are we doing here yeah and like to be clear I'm not saying that you can't take that approach and be successful it's it's like all things it's like you'll have a strike rate you might get like one in 50 or one in 100 but if you again for the companies that are fortunate enough to have like outside success and want to move at velocity yeah then the reality is you kind of can't afford to miss that often no and and if you if you know what you're

00:39:02 - 00:39:51

looking for and you find it at least you know what you're seeing in front of you versus just rolling the dice like for example there was a guy that worked for us we got him when he was working at Bunnings and he had no marketing background experience really other than a degree came in crushed it now he's a CMO of conon yeah great and it's like that's a freak freak Show scenario so it it happens but it's not it's it's super hard to repeat that yeah and this is this is the whole point too like and and

00:39:26 - 00:40:13

just this idea of like repeat ility yeah or like predictability if you want to look at in kind of Statistics terms is really interesting cuz people go like ah you Ed this so it'll work for me like Airbnb did this so it'll work for me it's like bro like they are like they're not even one in a million they're like they're barely even one in a billion statistics like those organizations and it doesn't mean that you can't do it and try and win but in my opinion coming

00:39:50 - 00:40:46

back to that like definition of entrepreneurs you it's kind of good like Capital allocation or like productive capital and resources well you want to be able to do like predictably and believably and repeatedly right and so you can't base all of your decision- making on the minorities like the freak unicorn examples you get to base it on things that are practical and also too the things that got those companies from Z to one are highly irrational and highly unscalable the things that got

00:40:18 - 00:41:15

them from one to 100 or to a th000 or to a million are predictable believable reliable ways of operating yeah and people can dispute that as as much as they like but the first principles you run true because you can't do it forever without them and when companies try to do it you know Wei works or or whatever of the world they end up like wew work yeah you know like they try to Smosh the numbers and sell a great story and be charismatic but unfortunately like Charisma doesn't you know provide free

00:40:46 - 00:41:46

cash flow which is what's necessary for dividends you know and Charisma won't keep people owning your stock when the you know uh EV drops by 90% right like you can't fake it man you can't you can't hold the Mirage forever no and yeah and it's a it's a great line right you the whole I fake it till you make it it's like no you want to assume the identity of who you want to be now and continue to live that way until you become them that's a real version of the statement don't fake it until you make

00:41:16 - 00:42:02

it because if you fake it you won't make it yeah like and people again we you know don't we want to simplify we want to kind of you know be reductive and bring these things back to a basic idea that we can understand and like well the whole reason they're valuable things is that they're not basic and because they're not basic they actually help you generate value or create value but people don't like that because that's you know hard work it's like you know everyone hates training legs because

00:41:39 - 00:42:31

it's hard and because it's uncomfortable which is very value generating as far as exercise and like longevity and health is concerned so many entrepreneurs become bottlenecks as their company grows what's The Telltale sign that a Founder needs to get out of their own way yeah so uh ask them a question which is that do you want you want to be right or do you want to be rich and then before they answer tell them that right now you're neither right yes you like so that's normally a conversation starter I

00:42:05 - 00:43:00

have um with those people but I think yeah the The Telltale sign is and for me is also another great line of questioning which is like you know what's something right now that you're fully confident that you are right about and then they'll XYZ whatever is and go cool mate are you or are you not open to the idea that you might actually be really not that good at that thing and potentially wrong yes or no no no more words yes or no right and like a lot of people really pause because they know

00:42:32 - 00:43:11

that the right answer is to say yes I'm open to that but then you can almost see the discomfort with the idea they they're like oh but but I'm really confident I'm you good at this thing and if they can't if you can't have a practical conversation off the back of that to me it indicates that they're kind of in their own way cuz they're not open to change IND difference Shez but that stuff doesn't always become obvious for a couple of years right so it's hard

00:42:52 - 00:43:51

to that's like a Jiu-Jitsu takedown like just answer this question and and you see people reveal their yeah I mean it's it's hard to tell people things right it's easy to ask them things that lead them to the outcome or easier at least I love that do you believe that companies can only grow as big as their Founders capacity and what can they do about it yeah I I would tend to agree with that I I would nuance and say yes as big as their capacity but also I think as big as the vehicle can go you know so like some

00:43:21 - 00:44:13

Industries and some business models just don't really lend themselves well to you know getting getting huge um but yeah you you see this quite a lot the founders don't necessarily have the skills required and then it kind ends up stagnating or dying as a result of their lack of competence in that case do you think that you know their best objective at that point is to raise Capital sell merge get acquired what what should one do uh I think one should try to live in reality you and come to the concl come

00:43:47 - 00:44:43

to a series of conclusions you the first of which is like do I want to you know kind of have the greatest degree of success regardless of who gets the credit for it and regardless of how it looks and how it makes me look yeah or am I most concerned with me looking good on the path to success even if that success is you know mediocre in comparison to what it otherwise could have been brutal but true most business owners claim to be innovating is it still possible to innovate or is Success now about

00:44:15 - 00:44:59

storytelling positioning and making people think that they're getting something new so I don't think most people know what innovate means what does it mean to you innovate from a commercial standpoint means create a new way of generating income and so it doesn't whether it's branding or positioning or a new product or whatever it may be it's like you know have you created a new way to generate an income like an actual new way yeah I think people fall under the Trap of thinking

00:44:37 - 00:45:25

that your Innovation is like technological product is better what yeah exactly but it doesn't matter from a commercial standpoint you create a new way to generate an income right from Taxi to Uber yeah whatever right and it can be even more simple it's like you know we sell um you know drink bottles and so you now we sld a shake a thing to put it in the drink bottle like that's a new way of generating income it doesn't need to be new to the world it's just new to the business and un ideally

00:45:00 - 00:45:56

sustainable right I like that are businesses actually serving customers or are they just getting better at exploiting human psychology respectfully I think that the the vast majority of the population on our planet is not sophisticated enough to exploit human psychology why not I don't think they have the intellectual capacity or knowhow and just to be clear that includes me I don't think I can exploit your human psychology either right um I think that you know more often than not people want to buy things and then when

00:45:29 - 00:46:21

they're presented with things that they want to buy well subject to a couple of criteria you know they'll they'll buy it now yes you can be better or worse at that game or better or worse at sales but I definitely don't think that we're um you know that we're kind of getting better at exploiting people I just think the business is spoken about more now and there's more literature that articulates it do you think that there's too much noise in the marketplace for people now to get a good bearing and

00:45:54 - 00:46:42

starting like there's two arguments at Play one is that never has there been a better time to start a business the other argument is never has there been so much noise around what to do yeah I I it's it's an interesting you know kind of almost like dichotomy if you will you know so I would agree that you know it's pretty easy to start a business now it doesn't mean you start a successful business but you can start you know so that would be the be the first thing I think um in terms of being like lots of

00:46:19 - 00:47:02

noise like yeah there there's absolutely lots of noise but you know like I think this to me it's like if like if I was having this conversation with you know someone who was kind like on the up and come and trying to figure it out like you're just complaining that it's hard like it's like what you think that oh there's noise like what you think someone's just going to give you the answers like even for like 99% of the business coaches out there they're not going to do the work for you they can

00:46:40 - 00:47:30

give you the knowledge but you still have to ingest that you know and then convert it to skill and then do reps like it's no difference like I can give you the greatest workout program it's not going to give you ABS the workouts will give you ABS and the diet but not the info you know so whether that's a good or bad workout is kind of irrelevant you just got to do the Reps right but I think uh there there certainly is like lots of noise but again like you know coming back to the definition of an entrepreneur you if

00:47:06 - 00:47:59

you're kind of creating value it's like you found a way to cut through the noise that's the reason you get rewarded with Surplus if you can't cut through the noise if you can't compete in business then you are not worthy of the Surplus that is Created from value creation for customers so something you just said there that I think is fascinating is that when people entrepreneurs business people what have you seek a coach consultant advisor mentor and you say that in that relationship they're

00:47:32 - 00:48:18

expecting that other party to help them do the work but that's not the relationship that's not the social contract 100% is that because they're lying to themselves that they um can't do it themselves so they're hoping or clutching at that the fact that someone else will come and save them yeah absolutely it's the worst part of working with business owners yeah and and I can guarantee I probably work with like a handful of them who would you know leave the end of you know um our

00:47:56 - 00:48:40

kind of professional relationship and be like oh that was a waste of time and I'm like yeah it was for me wow yeah yeah because like they think that you know it's it's like hiring a PT is not going to make you do the Reps yeah you know like like and it's it's a really hilarious idea it's like you know the value of sophisticated thinking is 10,000 times greater than whatever you think it is right but you can't get to the 10,000 times greater value without an absolutely disgusting amount of

00:48:18 - 00:49:10

effort and pain and so people get you know mentors and coaches which in are very different in my opinion the two are very different but like they get mentors Andor coaches right to work with them and they think that that's like oh I've just signed up to like 5x my business I'm I no you haven't actually you've just signed up to get access to good knowledge nothing more that is it right if you want to convert that knowledge to skill and that skill to Value that's on you do you think that they're inflating

00:48:44 - 00:49:38

this uh relationship in a in in an Act of Faith I think to a degree but I think it depends on the individual right right but commonly yeah I think it's a combination of things that some people think that it's going to give them conf it makes them feel less lonely okay right only to realize that in my opinion like a good coach and Mentor actually realiz makes you realize you are lonely like the business journey is on you and even if you have the best business coach or Mentor in the world all they're going

00:49:11 - 00:50:06

to do is tell you that the reality is it's on you holy [ __ ] it's all on you that's right and you and so like so I've worked with a psychologist for for about seven or so years now and you the kind of resounding thing despite his tremendous ability to help improve the way I think and you like regulate my own emotions and all these sorts of things the overarching thesis it's like it's all on you your limitations are on you the work is on you your progress is on you your failing is on you it's all on

00:49:38 - 00:50:26

you and all a good Mentor coach does is remind you in different ways and point you in different directions so if a Coach says like hey the answer to all of your problems you need to go down this Rabbit Hole you have to go down here and you know who that's on it's on you it's not on them they're telling you because they've been down it right and so the amount of people that you I work with like from a coaching or like advisory perspective I'm like great example business I work with for sort of two and

00:50:02 - 00:50:49

a half years more than 12 months before we stopped working together we have a meeting right and I'm like the way you have your p&l structured is wrong and because it's structured wrong it's giving you the wrong insight and because you get the wrong insight you're making the wrong decisions you need to change it here is a way I suggest you look at doing that they don't do it N9 months go by they then decide oh look we've learned some stuff so we want to have a call with you so we book in an extra

00:50:25 - 00:51:13

call on top of my time go and have a discussion with them like this is the exact way you should think about doing this great cool you reckon it's implemented no and months the writing's on the wall 100% it's still not implemented now even now that we're not working it's still not implemented and throughout that time they probably paid me 50 Grand or 70 grand for a whole bunch of other stuff but to go through that process to not implement it and so you want to come back to the definition

00:50:49 - 00:51:40

of a good entrepreneur someone who can allocate their resources to high productivity activities you are allocating resources to something you get nothing from and it's not because I don't know anything it's not because your coach is bad or your Mentor is bad and if they are bad it's still on you because you chose a bad one reallocate that resource to a better one extreme ownership all exactly right in closing what's a quote or a mantra that you've carried with you on your journey

00:51:14 - 00:52:15

that you wished everyone listening to this would immediately Implement I think the conversations that you have with yourself right are like incredibly important you know so the relationship you have when you are lonely and when it is on you you know is incredibly important and uh something that I've always try to rely on in situations that I would otherwise deem like incredibly painful or I'm like I just don't know if I can do this or something's going to go wrong and just for those people listening I still have

00:51:44 - 00:52:29

those moments right so when you're in those really dark moments is it's like well in the recent history of my career not everything has been a dark moment a lot of it has been good moments and it's been good moments because I found a way to get to the good moments right and so if I was able to get to those good moments Then I then too can get out of this dark moment and it is pushing through this dark moment that will separate me from the people that do not achieve what I will go on to achieve

00:52:07 - 00:53:10

wow and it's just it's just in a monologue that like I don't know everything I'm not right I'm not perfect but I have made good moments I am in a bad moment but I can get back to good moments it's on me and the evidence suggests I can do that and I think it's a really important mentality for people who are on the business Journey because it's lonely it reminds me of King Solomon's Ring this two shell pass mhm yep how do you want to be remembered I think I would want to be

00:52:37 - 00:53:48

remembered as an incredibly good dad I would want to be remembered as a really good husband and like a best friend you know to my wife I would probably want to be remembered as someone who was generous like to my friends in Social Circle but not with money and things okay yeah and I would uh like to the business Community I would want to be remembered as someone who helped them get through problems and pain that they feel they otherwise wouldn't have if I hadn't helped yeah I provided knowledge

00:53:13 - 00:54:08

or information this has been a pleasure uh I wish hon man great question I wish I could sit her all day man I'm just I'm learning so much myself and I'm internalizing so many lessons here from experiences I've had um Toby we know you've got a tide schedule today yeah thank you so much for being here we appreciate you man definitely drop some uh some nukes that I want to ponder and meditate over um but you're always welcome back thank you so much thanks for hosting man' appreciate it

00:53:42 - 00:53:49

appreciate you [Music]

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