Transcription
Many people say they want to be in the top 1%, or .1%, or even 0.01%. But saying that has zero bearing on whether it happens. Achievement comes from actions, not aspirations. So let's get real.
To be the top 1%, you need to enter a room of a hundred people and leave number one. To be the top .1%, you need to enter a room of a thousand people, like a local high school, and leave number one. To be the top 0.01%, you need to enter an arena of 10,000 people and leave number one. Think about it. A stadium. And in a battle to the death in that stadium, you have to come out on top. You beat everyone. Not almost everyone, everyone.
And so, if you have the goal to be in the top 0.01%, do you think that you can live a normal life? Do you think that you can keep the same friends? Do you think that you can keep the same hobbies? Do you think you can stay up late and sleep in on weekends? Do you think that you don't have to sacrifice what average people care about? Do you think that they will support you when you start to pass them? Do you think anyone will think this is healthy, balanced, or logical? No. And they're right.
But it doesn't matter. When you want to be the 0.01%, there's no greater waste of time than explaining yourself to people who actively don't support you. It's normal for people to not understand why you do what you do. I say this because you cannot make yourself exceptional and live a normal life. To make yourself exceptional, you must live an exceptional life. And an exceptional life does not always mean better. It just means that it's so different that most people will reject it, and you. And when that happens, you must reject them as well. Oil and water do not mix. That is what it really means to be exceptional. You must become the exception.
And so this is, uh, how we, how we, um, how we welcome the new guy. Actually, there's another page. So I, I'll finish it up. So I routinely get asked the secret to success. And it just comes down to this: Number one, get better. Number two, never stop. If you do only those two things, you will win on a long enough time horizon. The problem is people convince themselves they no longer want something once they see the experience of how hard it really is. So I want to set this expectation for you as you head off to practice scripts. Mark your calendar and set your alarms. The work begins when your motivation ends. Just win.
And so, um, that's from our, that's from our internal handbook that we have at ACQ, uh, for our sales guys. And it's one of the ways that we, we welcome guys on. And I, and I, and I, I want to read that to you because I want to frame what I'm talking about today. It seems like a very simple thing, just saying, "Just do more," but like, it's almost become an art form and something that I have, like, a deep passion about, which is very odd to say. But more actually has the highest risk-adjusted return move that you can possibly make within the business. Keep my notes a little lower because I, it cuts off the top. Um, and so it has the highest risk-adjusted return move. Give me two seconds, guys. I'm going to adjust this because this is driving me [ __ ] nuts. Hold on. So let's move this up. Can I do that? All right, I prepared some notes for you guys to keep it nice and, you know, violent.
Okay, so the reason more has the highest risk-adjusted return for a business or for you is that what it's so hard to, to get something to work, right? Many of you guys have tried anything. You have a new marketing channel, a new sales script, a new offer, you try a bunch of things, and then finally, something works. The likelihood that you changing that thing and that next thing working is actually statistically very low. Think about how many different things you had to try before something actually worked. And so the idea is, okay, I have these limited resources. I can allocate them to take a risk and roll the dice, or I have this thing that I know works, and I need to jam more into that machine, which is why it's the risk of the highest risk-adjusted return move.
Now, one of the other misconceptions that I think is that there's a huge preponderance of people who talk about optimization, getting as much as you can for as little as you can. And I don't think there's anything wrong with that. The difference is that there are optimizers and there are maximizers. Maximizers try to ask the question, "How do I get as much as I possibly can?" Optimizers ask, "How much, how do I get as much as I can out of as little as I can?" But when you're looking at returns, maximizers win. So what's the difference between first place, you know, gold in the Olympics and second in the, in the Olympics, silver, right? A tenth of a second in a race. But what is the realistic difference, the real-world or pragmatic difference between being the best in the world and second best? Everything.
And so when you're talking to an Olympian, you're talking to somebody who wants to be the top 1%, 0.01%, 0.01%. Diminishing returns are still returns. It's, you need to do more because you're trying to win, not be cute about saying that you had great return. And I, I say this as somebody who was a converted optimizer. So in the earlier part of my life, I really prided myself on doing school with as little work as possible. I was like, "You, you nerds, I was like, you guys needed to study. I can walk in and hit a 91 with no studying." And I'll tell you the story that really, really changed my life.
So, there's a guy named Kemp, not, um, and he was like, and hopefully Kemp, you know, maybe you'll see this. Um, he, like, I, I gave Kemp a hard time. I did when I was in high school. And, um, and he was a kid who didn't catch on to stuff as fast. And, you know what? Kemp's a successful guy now. He's done great. And but this thing happened. So, all of high school, I, I kind of gave this guy a hard time. And when we went to go apply to colleges, uh, I wanted to go to Duke. So Duke's a top five school in the US. Um, and I didn't get into Duke. I ended up going to Vanderbilt, which is also obviously a great school, but I wanted to go to Duke. And guess who got into Duke? Kemp not. And so what was really interesting is that this whole time, like Kemp would go to study hall. He'd be like, "Teacher, you forgot to assign his homework." Like he was that guy, right? And I, I honestly just really disliked him. Uh, but mostly because it probably just reminded me of my own inadequacies of like, I was just unwilling to do the amount of work that he was, and I, and I, I shamed him for doing the amount of work that he did. I was like, "You have to work so hard just to try and just try and come close to me, right?" But in the end, uh, he got into the better college. And so it was this really humbling lesson for me that it was like, none of the colleges cared that I worked less than him. They just cared about who had the best applications and who had the best grades. And it was this really, like, very eye-opening experience.
And so when I went to college, I had a different frame that I was like, well, I'm not going to lose. I want to go here and I want to maximize. I want to study all the hours of the day that I'm not in class, at the gym, or at the cafeteria. I'm in the library. And you can ask anyone that ever went to school with me if you ever meet them. Like, that's where I was. I was in the library 12 hours a day because I was like, well, if I just study more than everyone, I'll get good grades. And that worked out pretty good, right? And so that's just kind of a, just a little bit of framing around why I have such a, such a strong, um, uh, affinity for more.
Now, I'll give you a second, kind of a little bit more heady reason. So I talked about how more is the highest risk-adjusted return. I talked about how diminishing returns are still returns. They're still at the end of the, still output, right? The next piece though is that change has a fixed cost. All right? And a variable reward. All right? So let me explain what that means. So if we have this thing that's working, right? And I'll, let me see if I can draw this for you guys because I think this would be, this is a good visual. Okay, so one moment. These, you guys digging this? [Applause] You guys enjoying this? All right, so I want you guys to imagine for a second. There we go. So I want you to imagine that this line right here. Oo, nice and wet. How I like it. My markers. Calm down, guys. Okay, so I've got this line. This represents your revenue or whatever your current level of activity or output is. Okay, this is output. Whatever your thing is. Okay, now what happens is most entrepreneurs, they say, you know what, I'm going to change something. All right? And guess what happens? Because they think they're going to change something and things are going to get better, right? You tweak something, you mess around, you change your page, change your script, change your onboarding process, whatever, right? So then what happens? Well, if there's people involved, typically output will go down. You have to retrain the team. They have to practice. You know, this variable affected two other variables you didn't know about. And so you get, and this is completely based on my observation, you typically get about a 20% decrement or decrease in performance. Okay? And so what this has created for me is my minimum rule of 20%, which is that if something is going to give me a guaranteed 20% decrease in output by me changing it. Now, this is initial. What ends up happening after that is it might not work, and then you stay here, or it might be worse, and this goes here, or it might get better and it comes back up eventually, right? And then maybe you have a 5% higher output here, and now this is now your new baseline is a little bit higher than it was before. Now here's the thing. If you have a 20% guaranteed decrease and you have the potential for a 5% increase, do you take that bet? No. But I see entrepreneurs every day, myself included for many years, taking that bet over and over again because I was like, "I just have to get better. I just have to get it better." But it was a fallacy. It's not true. Sometimes, like, your business will never be perfect, and you have to accept that fact. It will not be perfect. You will always see things that you could, and the thing is is you don't even know if it's going to get better. You just aren't sure if it's quote good enough, and so you just want to change it. You want to mess with it, right? But the magic is the compounding returns you get when you do the same thing over and over again. You get this, this depth of understanding, this depth of skill that happens with repetition, right? If, if, if necessity is the mother of invention, repetition is the father of skill. All right? And so, so coming back to our 20% here, right? This is, this is cute, right? But let's look at what entrepreneurs will normally do. Maybe they'll start seeing some increase here. But what do they do next? They say, "You know what? I've got this other idea I have." And so then they get another 20% decrease. And so they're constantly living significantly below their output means, or your revenue, or whatever your thing is, below what your potential is because you're constantly changing stuff.
And I want to be real with you for a second. If you're a small business owner, you've got, you know, maybe 10, maybe 20 employees, or if you're anything less than that, then like hear me right now. The amount of resources that you have to implement change are so limited. I, like, they're so limited. I pick like one big thing a year that I do, like one. And what happens is when you realize how limited your resources are in order to deploy successfully a new change or a new experiment, what happens is it forces prioritization. It forces you to focus on what things. If I only had one thing that I could do this year, what one thing would I be like, "This is the bet I'm going to take?" Well, it certainly wouldn't be a 5% thing, right? Well, maybe we write handwritten cards, we'll get a 5% increase in referrals, maybe, right? But given those resources, what else could you do, right? And so when you look at the whole thing, the whole spectrum, and this is how I want to, I want to frame strategy for you around this.
So most people think about business strategy, I got this from Chiron, I love this, I'm using it all the time, it's so good. Most people think about business strategy like they think about making dinner. So they go to their kitchen, they open up the fridge, they look what's inside, say, "What, what, what am I going to whip up?" Right? That's how they think about business strategy. But the question that we should be asking isn't, "What am I going to whip up from what's inside the fridge?" We should ask the question, "What the [ __ ] do I want to eat?" And then go get the ingredients and go make it happen. And so when you, when you have, when you're saying I'm only going to take one bet or two bets this year that are going to be material, then it forces you to be like, "It's got to be worth it." Because here's the part that no one else knows is assume, let's, this is still the same output, right? You've got your output. What happens is that if you change nothing, believe it or not, people get better at their jobs. People just keep getting better. They get more skilled. And so you'll typically have one, two, 3% increases that happen kind of month over month from you just not changing anything, from just leaving it alone. And so this has taken me so much time because I'm a natural, I'm a yes-hinge, right? I'm like, "Let's do it. Let's shake it up. Let's change things." Like, because the thing is is I have this need from my business. I, I like, earlier days the business satisfied multiple needs and I didn't satisfy the business's needs. Meaning I had cravings for novelty. I wanted to do new things. I would get bored of doing the same thing over again. And so because of that boredom, I would say, "Let's shake it up." But why? Because the times I've made the most money in my life have not been when I've been changing the most. It's actually when the business has been really boring and we're just blocking and tackling and doing it over and over again. And so this is something that some people never learn. Honestly, a lot of entrepreneurs never learn this. And the hard question, the hard problem to solve is not the new idea that you want to try. It's how can I do more once I've already exhausted my existing way of doing.