https://www.youtube.com/watch?v=kW2vDMAmlPI

1 00:00:00.000 --\> 00:01:00.000 in this video i'm going to walk you
through the true competitive edge that our companies have had in
outperforming other companies and if you don't know who i am i'm a
business investor i own acquisition.com which is a portfolio of
companies that does about 85 million a year and i have nothing to sell
you all right so my name is alex mosey we recently actually just sold a
66 percent stake in two of our portfolio companies for at a 46.2 million
dollar valuation so i don't sony any courses any masterminds and
coaching parts of any mentorships i make these videos because i had a
lot of pain coming up in learning these things and i hope that my pain
is not in vain and i like it because it rhymes too what i want to show
you is probably one of the most important questions that you have to
answer that will ultimately inform your ability to compete within the
marketplace there are kind of two schools of thought around business
right you've got the kind of brain brain side there's my brain and then
you've got kind of the heart side of business and the hard side is
typically ignored because this one is very quantifiable and this one is
not but the thing is is that i would make the argument and leyla and i
would both make the argument that this side even though it may sound
touchy-feely is actually the more

2 00:01:00.000 --\> 00:02:00.000 important side and i'll give you a
couple of examples before i give you some tactics around this so when
you've seen like remember the titans or when you see a new coach come
into a football team the actual strategy of the football game hasn't
fundamentally changed the rules of the game are the same and typically
the strategy of the team doesn't overarchingly change either they just
actually do it better and so the doing it better and the higher output
from each person a lot of times is not like 20 more a lot of times you
can get two times four times eight times more out of the same people
because they believe in what they are doing and so the thing is is that
they makes that might sound like one of these motivational videos of
like you have to watch remember the titans together and then everyone's
kumbaya but there's actually the real conversations that have to occur
in order to make the business grow and so there's there's lots of core
questions that inform the the heart decisions of the company and so i
want to focus today on just one of them right and so i'll give you an
example of

3 00:02:00.000 --\> 00:03:00.000 some of them so it's like why do we
exist that is a very important question that you have to answer and it
has to be answered well how do we behave what are our values is an
example of a question that matters a lot who is in charge right during
what decisions who does what those are all important questions but the
one i want to focus on is the second one that i mentioned which is how
do we behave the reason that this is so important is that it's one thing
to know where you're going but it's another thing to know how you're
going to get there and so this is just as true in business partnerships
and marriage in terms of what you want uh to have happen and how you
want to get there um as it is in business okay and so what i want to do
is actually just walk you through the three values that we have at
acquisition.com and why we believe them and so from an overarching
perspective the way to come to values um is to look at what are the
non-negotiables okay and so what i mean by that is and every company is
different because the core thing about values is that they have to be
things that are true and innate to

4 00:03:00.000 --\> 00:04:00.000 you right like for example at southwest
uh have fun is one of their core values and if someone does not want to
have fun or does not believe in the processes that they do to have a
good time then that is a non-negotiable for them that person cannot work
at that company it is a fireable offense and so these are not
aspirational these are not things that you would like to have these are
things that are core to who you are as a person and as a team all right
and so when you decide on these non-negotiables they are by their very
nature non-negotiable which means that you hire based on these you fire
based on these and these are the core spirit of the team and some of the
mistakes that i see when people make values is that one they don't draw
the line in the sand and so one of the core things about a value is that
it has to you have to be able to say this is not this right you have to
be able to say okay between justice and mercy we lean towards justice or
we lean towards mercy which means you have to repel people with your
values all right and so if your values do not repel people then they are
not values they are platitudes okay and so it's very important the next

5 00:04:00.000 --\> 00:05:00.000 thing is that when you're making your
values the values themselves need to be ideally said in words that you
would normally say so if you have little sayings inside of your
community then then a lot of times those can become some of the values
you have so for example jim launch one of our first portfolio companies
uh speed is king do the boring work these were different ways i mean we
could just say work ethic but that's not the way we would have said it
we could have say be fast or fast turnaround times but speed is king was
the way we would have said it okay and so some of the things that i've
learned with this is also you cannot have too many values as in i'll say
it differently you can't have too many values you have to be very
selective at the true core values of the company all right and so if
you're you know between two a lot of times you just have to chunk up uh
and kind of get a broader value but they become the core and i think
that what we have found is that three is the sweet spot and that number
has continued to distill down over time but i think three is the amount
that your human brain can

6 00:05:00.000 --\> 00:06:00.000 comprehend as lenses to make a decision
right and the reason these values are so important is that when you
scale the company you have to scale decision making which means you have
to scale the frame with which you duplicate the decision making process
which is should i hire this person even though alex is not involved in
this do they align with the core values and the more stringent the
values the easier it is to have a black and white example of i think
this person means two out of the three or one out of three but we only
accept three out of three and i will tell you this as an additional
point if you have core values in the business i would relay them to all
aspects of your life if you would not do business with someone for a
decade do not do business with them for a day it's one of the novalisms
that i like a lot and so if you wouldn't if you don't want to deal with
this client for a decade don't deal with them for a day if you wouldn't
deal with this employee for a decade don't deal with them for a day you
have to and and the extent to which you hold your line of intolerance
around these truly non-negotiables will dictate the health of the
organization and if you make these non-negotiables

7 00:06:00.000 --\> 00:07:00.000 and realize that there are people in
your organization in your client base that do not ascribe to these then
you must make the changes to fix it and that is the pruning of the tree
that will ultimately grow the tree all right these are the short-term
pains for the long-term gains all right so what i want to do for the
rest of this video is walk you through the three that we have that we
look for in the entrepreneurs of the companies uh that own the portfolio
companies that we invest in uh that we look for internally in terms of
the employees that we hire and grow onto our team so this is both
internal and external for us and then finally what we hold ourselves to
all right and so these are the three for acquisition.com number one is
unimpeachable character and as we were coming up with these over time we
had like loyalty was something that was really important to us like
absolute integrity was something that was really important to us like
long-term minded was something that was really important to us and we
were like we had all these words on the board and whatnot it was like
what's the what's the what's the through line on this what's the thread
that kind of weaves all these things together and for us it was we just
want

8 00:07:00.000 --\> 00:08:00.000 to deal with people who have
unimpeachable character if someone has a wisp or an edge that just feels
a little bit off these are things that earlier in my career i would i
would rationalize and be like but they have all these other things and
the the more seasoned i've gotten this the more i just don't negotiate
on it it's like if i don't feel like this person is unimpeachable
character i won't do business with them it's because if i wouldn't do it
and a great frame of this is like would i do this with this person for a
decade no then i don't want to do business with them for a day and so
here's three frames that you can look at that i like a lot right and
this is uh this is a little story that i got from a friend of mine who
was talking to somebody who's on seal team six and they were explaining
the difference between people who were seals versus people who were on
steel team six right he said listen at this level every single naval sea
navy seal would lay down their life for another guy he's like that's
kind of the ticket of entry to just be a seal right he's like but the
people who are team six he's like we have other things that we have to
look at right you know if someone has an ego they're going to become
he's like the hard problem is somebody who's who has an ego but is a
really high performer because they become cancers on the team right and
a lot of us have these people or have had

9 00:08:00.000 --\> 00:09:00.000 these people in our companies and i can
tell you they are such a cancer like you don't know the damage they are
doing to your culture which is ultimately affecting the overall company
performance all right but the first the first through line here for us
and the easiest one is like if we see someone who has an ego then then
then we already know that they're not going to be they're not going to
be receptive to feedback they're going to point fingers they're going to
always think that their idea is best uh and they're going to think
they're better and ultimately we just don't want to do it that type of
person right but here's two two questions that they asked uh in team sex
that i really liked a lot he says not only can i trust this person with
my life he said can i trust this person with my wife can i go and leave
and leave my wife with this guy for a month and expect nothing to happen
can i expect no passing comments can i expect no no moves no flirts no
no no stray looks because they have unimpeachable character the the
second one was can i trust this person with my money if i were to give
this person way more money than they have ever had and say i'm gonna
leave i need you to hold

10 00:09:00.000 --\> 00:10:00.000 on to this i don't know when i'm gonna
be back but i will be back for it can i wait a month can i wait a year
can i wait a decade and expect for that money to be sitting in the same
corner that i left it and these are just questions that i ask when i'm
looking at someone and thinking like does this person have unimpeachable
character under what conditions do i think i could put what hot water
could i put this tea bag in and see what's on the inside come out when
you're asking questions and and for us when we're asking questions on
interviews for uh candidates for the company but also when we're asking
questions to the entrepreneurs what we're looking for is not even their
answer but how they answer them to give us insight into their character
and so for us unimpeachable character is the absolute foundation upon
which everything we have is built the second one is sincere candor and
the reason that this is so important is that we believe that you cannot
make progress without feedback and if you can't give feedback then you
cannot identify the deficits that exist in order to improve them and so
for us having sincere candor is two aspects one of them is having the
self-awareness to accurately identify

11 00:10:00.000 --\> 00:11:00.000 situation and deliver the feedback
that is good but also to be on the other side of this and have the
humility to receive feedback not take it personally and to improve as a
result right and so we look at this on the portfolio company side the
entrepreneurs that we invest in and then also on the team side of the
candidates that we choose to bring in do we think that this person can
take feedback do we think this person has the intellectual wherewithal
the emotional awareness to to give feedback in a way that is that is
useful and constructive those are the types of things that really matter
in an organization because when you have these unspoken things and these
these these these wounds or these resentments what happens is the space
starts to fill up between people and then their communication becomes
less effective and fundamentally like running a company is based on how
well you can communicate it's clarity of communication and so that is
why this is so important for us as an investment company and also um in
terms of the companies that we look look into to help grow and so the
third piece here is competitive greatness and i think and we

12 00:11:00.000 --\> 00:12:00.000 borrowed this from john wooden because
layla and i are both huge fans of his which is are you at your best when
your best is needed the enjoyment of a hard challenge that is how he
defines it but if you're thinking about this and this is how the value
should stack up when you're looking at your own values which is how do
we behave with this account within your company the three values should
give you a vibe for the company overall like if you read these three
things you should think to yourself okay people with unimaginable
character who have sincere candor and competitive greatness this should
give you a vibe of the type of place that this might be if i were to
list off do the boring work speed is king have humility now there might
be some similarities there between these ones and and uh and our gym
launch one though don't sugarcoat it right which is kind of a different
version of sincere candy a different flavor same concept right is that
you should be able to read those values and say like i think i get the
vibe for this place and you should also be able to say i don't think
this person will fit in and so imagine you're interviewing someone and
you're like okay i think this person can

13 00:12:00.000 --\> 00:13:00.000 both give and receive feedback okay
and they can do that effectively you know like i think they're very
solid people i think they have an impeachable character when i think
about the different um different things and stressors i would expose
them to i think that they would hold strong but it's like oh i don't
know if they're like really driving i don't know if they're ambitious i
don't know if they really want to like take the hill and do big right
well then but they have two out of the three i think they could still
maybe fit for the world's like no if these are non-negotiables then they
are non-negotiables and you have to continue to massage these until you
get exactly the true core that gives you that triangle the three lenses
to look through if you have 10 values it's impossible to make a decision
it's it's it's also almost impossible to think through candidates
there's too many lenses and so that is why we found three to be the
sweet spot for us and so and look at a different one let's say you've
got somebody who's competitively great super ambitious super hard
charging right can accept and give feedback but you don't think they're
characters there like you think if if things got hard they would revert
to something different

14 00:13:00.000 --\> 00:14:00.000 then that's somebody that you don't
want on the team because things are going to be hard in the future
that's a virtual guarantee that within business things will get hard and
so you're just predicting what's going to happen in the future and just
avoiding the landmine and so what i've also learned is a tangible side
note is that a lot of times success in business is just making fewer
mistakes it's trying to avoid the dumb decisions trying to avoid the
people that are going to become cancers in your company more than it's
making very smart moves a lot of times uh the level of activity
continues to decrease as we've weathered and scaled our our portfolio
but i think the the skill with which we execute the things has improved
because we were just more deliberate and we try we still make plenty of
mistakes but we try to make fewer of the dumb ones over time this video
is for making the values within your business what are the things that
you stand for what are the non-negotiables with the company what are the
things that you want all of your clients to adhere to what are the
things that you want all of your team to adhere to and what are the
lenses that we can use to truly draw a line in the sand and say this
person does not fit in and if most people don't fit to the
non-negotiables that you have

15 00:14:00.000 --\> 00:15:00.000 good most people shouldn't be in your
company all right so lots of love mosey nation if you're new welcome i
make these videos because i went through a lot of pain and suffering to
try and figure this stuff out and i hope that that pain is out of vain
lots of people are broke don't want you to be one of them enjoy the next
video bye
