https://www.youtube.com/watch?v=WsYgWC7NmO8

1 00:00:00.000 --\> 00:01:00.000 our portfolio of companies does 75 000
per working hour 40 hours per week and building this has taken a long
time and so what i share with you in this video is 10 lessons that i
have learned in observing all of those companies over the last you know
10 years let's start with the first one and if you don't know i am my
name's auction mosey i own acquisition.com it's portfolio of companies
does all that stuff all right so the first one is uh something that
actually learned from the private equity managing partner who acquired
two of the companies uh last year number one is that most things don't
matter and a few things matter a lot and you can achieve outsized
returns by only focusing on those few and so once you figure out those
few things you can ruthlessly eliminate the rest and the thing is is
that this is very hard because a lot of us get really excited we go to
workshops we go to seminars we see ads on facebook and we think oh you
know i should be doing this new sexy thing and the reality is that there
are very few things that can give you 10x 50x results and so if you just
focus on those few things you can get a lot of other stuff wrong and i
think all of us could use more second chances and more padding right and
so if you can just

2 00:01:00.000 --\> 00:02:00.000 focus on those big things you can make
those mistakes and still succeed and so when the private equity partner
who kind of taught me this lesson is when i was observing some of the
things that he's doing with jim launch prestige labs during the last
quarterly uh meeting you know our team was going through all the things
that uh that they were doing to kind of you know improve the company and
grow and i could tell that he was only interested in only two
conversations that occurred number one is that you know we were building
in some technology into the business because that would yield a much
bigger multiple for the business in the future the second was accretive
which means basically value additive m a so looking at companies that
are similar in the space that they could roll in to the overall
conglomerate because in his mind he knew that the only way to you know
sell that you know those two particular companies for over you know 250
million or more which is the the goal would probably come from those two
main things and the rest of it for the most part he just considered
blocking and tackling which was just yeah of course you know we'll grow
we'll do these things but the big nuts the big levers uh for getting
that growth was going to come from very few things and that is where he
allocated all of his attention and to me that was

3 00:02:00.000 --\> 00:03:00.000 a very important lesson to witness that
was number one number two is that the size of your slice of the pie
matters more than the shape all right so a lot of people's egos mine
included right 100 of the pie which is a perfect circle right we want
100 of the pie but our bank accounts only care about how much that slice
of pie weighs right if you are one percent owner on facebook you'll be
significantly wealthier than owning 100 of probably the small business
that you have right and so the thing is is that in order to do that it
means you have to give a place to the pie because it takes more people
to build big things right and so getting other people tied and
compensated for the achievement of your vision is one of the key things
that is required and i noticed that because as soon as we've uh done
profit sharing plans and given you know bonus pools and things like that
to tie leaders into the success and the achievement of the overall
vision we got significantly outsized returns in excess of what we had
given up and so it's just the the weight of the slice that we have or
that we keep is now worth more than if we had had 100 and not had that
incremental growth through enlisting the spirit and willpower and drive
of other

4 00:03:00.000 --\> 00:04:00.000 people right and one of the interesting
things that i've witnessed is that if you look at the richest people in
the world the vast majority of them do not own 100 of their company i
mean the vast majority don't even own the majority of their company look
at basis only it's 10 of amazon at this point elon owns 20 and 17
percent of spacex and tesla right and so there's you know if we take
lessons from these people it's that the more people you make wealthy the
more wealthy you will become right and it's true from a business to
consumer standpoint if you sell kind of b2b but also just from the
overall infrastructure of the of the marketplace like the more people
you have who are rooting for you because they are vested in your success
the more you will ultimately make and this is difficult for our egos and
this took me way way too long to realize number three is that big things
take time all right um i knew that when i was you know younger in the
entrepreneurial game i was very obsessed with fast wins fast wins fast
ones what can we do this week what can we do this month rather than
thinking 10 years out 20 years out and the thing is is that when i and i
learned this lesson from andrew chung who owns panda express and he
lives in the building above me he actually owns this entire building uh
which he bought for i think like 150 million and he owns the building
next to us which he bought for 5.6 billion big dude and he owns 2

5 00:04:00.000 --\> 00:05:00.000 600 locations of panda express and he
owns them all 100 he has no franchisees no licensors and when asked on
an interview what the keys to success were there were two themes that
that came out one he said your customer must absolutely love your
product and number two is that big things take time right it took him 45
years and he still continues to grow this day and the majority of the
growth has happened in the last you know five years or so this year he
opened up 600 locations of those two of those 2 600. so a huge chunk
happens near the end and that depth of expertise takes time to build
because remember we're competing against other people who've also been
doing this for a long period of time and the one thing that we can take
to our advantage is if we've just been doing this longer right and we
get these compounding results that happen over a long period of time and
so i think rather than making this a patient's platitude thinking of
this as what could i do for a very very long period of time because the
only things that will be very big will take a long time and i must be
motivated to not change my course or see some shiny object that's going
to take me away from my overarching vision or goal and so i think when i
started thinking this way the companies that i had continued to grow
better with higher quality people

6 00:05:00.000 --\> 00:06:00.000 and made higher quality decisions
because it wasn't about the short win it was just is this gonna matter
in 10 years and what are the few things that will matter in that long
period of time and then let's ruthlessly limit everything else and just
focus on those things number four brand matters a lot all right and so
this is something that took me again a very long time to understand and
the way that you build brand is that you make promises and you keep
promises not only to the level that you made the promise but in excess
of that so you make a promise and then you deliver above that promise
brand is simply the reputation that you have in the marketplace is what
people say behind your back right and what most people don't have is the
invisible hand behind the scenes that's pushing higher and higher return
on advertising because more and more people have heard of you from a
friend before seeing your ads or your reach outs or whatever it is that
you use to get customers right and so what happens is that most people
do the opposite of that they make big promises they under fulfill and
then over time their cost of acquisition raises beyond the increase in
cost per impression or cost of time on their labor because they have an
invisible hand that's suppressing their growth which is negative word of
mouth which is much stronger and much more viral than

7 00:06:00.000 --\> 00:07:00.000 positive word of mouth and so people
don't understand they think they blame the platforms they blame you know
pixel changes and things like that when the reality is that they have
negative word of mouth that's working against them and they just don't
know how big of a deal it is right and so the beauty of brand if you
build it the right way is that it gives you this is the tactical behind
brand is that branding gives you premium pricing power all right if you
look at a cup of coffee that's plain a cup of coffee at starbucks they
can charge you know four or five times the price if you look at a white
t-shirt that's plain and you look a white t-shirt that has a nike logo
on it they can charge 10 times more you put a gucci logo on it you can
charge 100 times more right and so what the brand does is give you
pricing power and that pricing power translates directly to bottom line
profits right and so when you have that branding power you can have
outsized profits compared to the marketplace and give yourself a
competitive moat that over time if things if cost of goods increase or
supply chain gets broken down the people who are trading in commodities
and do not have a brand behind them will go out of business whereas you
will have the padding of your profit margin to continue to weather the
storm and endure for the long haul number five simple scales fancy fails
all right when i look at the companies that we have that are

8 00:07:00.000 --\> 00:08:00.000 the biggest in the portfolio they have
the simplest business models because scale creates complexity all on its
own you don't need to add complexity we don't need to help complexity
exist it already exists at scale and so we have to make the fundamental
units as simple as humanly possible we have to make our offer suite as
simple as humanly possible we have to make the customer journey as
simple as humanly possible and who we serve as simple as humanly
possible so we can streamline our messaging streamline the customer
experience streamline the products we streamline the pricing so that the
customers understand what we're doing the sales team understands what
we're doing the customer service team and success team understands what
we're doing and so all we're doing is adding more to that machine rather
than adding uh complexity and adding new doodads and i love this quote
because i think it's a really good one which is do not risk the empire
for a pot of gold which i heard from my good friend uh charon cervaza
who sold his company for a zillion dollars all right um and i just
really really like that so simple scans fancy fails and a lot of times
we need to ignore the shiny objects that are sent here to test how good
we are as entrepreneurs and how dedicated we are to keeping things
simple because if you

9 00:08:00.000 --\> 00:09:00.000 cannot keep it simple a lot of times it
means you do not understand it which means you may not even understand
your own business number six emotions are the enemy when i look at the
portfolio founders who are the most successful they are the least
emotionally reactive they are the most rational in their decision making
they are the most long-term minded and so one of the one of the the
truisms that i've adopted is nothing is ever as good or as bad as we
expect except for the things that we don't expect all right and so i'll
unpack that so from a tactical perspective when we make these
projections we think there's this new thing that we want to add a lot of
times it's not going to be as good as we think it is right it's usually
going to be less than that and to the same degree the equal opposite
side of the coin is if there's some threat that comes in most times it's
not as bad as we think it is or it's going to be so we catastrophize uh
negatively worse than it really is and we and we project that
something's gonna be much better than it is and most times it's in the
middle it's less than our imagination could anticipate except for the
things that we never expected which is why the al size returns often
come from things that we didn't expect at all right and so most times we
need to be much more conservative in our estimates on either direction
so that we do not become

10 00:09:00.000 --\> 00:10:00.000 emotionally reactive and swayed by the
greed or excitement of the upside or the depression and fear of the
downside and i can tell you the amount of times that i thought i was
going to lose the different companies that i've owned over time is a lot
and the amount of times that we have lost them is zero up to this point
you know in the last 10 years and so a lot of times we think things are
much worse than they are and we make bad decisions because we think
we're up against a wall we think that things are going to die and so
that's not true that's your mind fooling you and i think one of the
disciplines from the character traits that has to be honed over time is
a decrease in emotional reactivity number seven level 10 talent is only
attracted to level 10 opportunities i learned this from steven
schwartzman who wrote what it takes he's the founder of blackstone now
he's worth i think 30 billion and his and blackstone i think manages
almost 700 billion dollars so a lot of money and he said this very well
so i'm not going to try and pair it as as though it's my own he says you
need level 10 talent to build anything big right and so we have to think
long and hard about how big this can be so that others people's dreams
can fit inside of it and so like if you want to build a dry cleaning a

11 00:10:00.000 --\> 00:11:00.000 local dry cleaning business there's
nothing wrong with that it's just that level 10 talent is not going to
probably be attracted to that opportunity and so we have to think long
and hard now if you think my true goal you're not just saying this but
it has to be true to you is that i want to build a different way for
people to clean their clothes in a convenient way because that's
something that you are driven to do and you think you can do it for a
very long period of time and you don't think you'll get distracted by
other things that are shiny objects etc you will be able to build it to
a size where other people start to believe you and then you will be able
to enlist level 10 talent and i also learned this one from sharon
because i like this quote a lot he said your best talent isn't even on
your team yet the best talent exists in the future and so we have to
make room for those people which goes back to the slice of pie and
things that i was talking about earlier all right number eight in terms
of lessons that i've learned in building our portfolio compounding in
business creates breathtaking results when you add the one ingredient
that people hate the most time everyone hates to add time because
everyone is impatient and if you look at the people who i think in my
opinion i look up to or the most successful they have one thing under
control which is their impulses they can control their impulses because
they see that adding time is the single greatest variable to achieving
the outsized returns that you were looking for and so

12 00:11:00.000 --\> 00:12:00.000 one of the things that i've noticed of
the portfolio companies that we have the biggest companies our portfolio
obsess over the 101 improvements versus trying to double in 90 days they
can extrapolate the fact that a 10 per quarter growth rate means a 40x
growth rate over a decade and they can actually think in decades because
you know what right now if you're doing a million bucks a year if 10
years make you do 40 million a year would you be okay with that you
don't need to swing for the fences every time if you just hit singles
and you do that consistently set goals that are far more achievable will
be that people will actually believe they can do and c gives you room to
overachieve those things and i think that the goals that i have set for
the portfolio companies and my own companies has consistently got more
and more conservative now some people set goals that are completely
silly right and you know they're they're useless in that they're so
achievable that they're not worth anything and so that's not who i'm
talking to and i would say the vast majority of entrepreneurs i talk
with that is not their problem they're usually setting goals that are
way too unrealistic and that goes back to the expectations of thinking
that things are going to be better than they really are right and so we
have to set goals that in my opinion if we were just to do these things
and that were the assumption if we just did 10 or quarter

13 00:12:00.000 --\> 00:13:00.000 how much bigger would it be at the end
of the year if we did just 10 a quarter for the next two years how much
bigger would we be right and obviously give ourselves rooms to
overachieve those things but if we just did those things what would it
look like and a lot of times it would look really really juicy but most
people are unwilling to take that short term goal and say i'm just going
to hit the 10 we're just gonna we're going to make sure that beyond any
shadow of doubt we can hit that right because that is where the
breathtaking results occur is that those one percent five percent 10
improvements that happen over the very long period of time and that is
what creates the magic and compounding right a lot of people talk about
compounding from an investment perspective but if you are in your own
business shifting your hat a little bit more to the investor hat even
though all of your net worth or probably the majority of your net worth
is in your company if you can think about it like an investor you will
start to getting the investor-like returns which is probably what you
want rather than the erratic unreliable you know it would do or die type
of mentality that happens especially in the earlier stages of a business
but as you mature in the business itself and the business matures the
thinking must change number nine any number no matter how big multiplied
by zero is still zero all right and so risks are to be respected

14 00:13:00.000 --\> 00:14:00.000 right the biggest companies take
actions that have very little downside all right and so most times um or
i'll say this you would only take a company-sized risk where you put
your company on the line when not doing so risks the company more all
right and so that's the big thing is i see people people who want to be
portfolio companies so companies doing you know three million five
million et cetera who right when we hop on the phone with them like hey
i want to do this big thing and i'm like you know that's extremely risky
for for the business at the size right now they're like yeah but we have
to do it and i always kind of think do we though like do we really
because the answer is probably no and it's usually emotions that are
causing a distortion in reality for the founder and so you only take a
company size risk when you really know that if you do not do if inaction
right or continuing to do what you were doing um will create a failure
now we've heard the case studies of kodak you know you know losing their
business and you know blockbuster losing their business but there are
far far far far more times where business was perfectly fine and the
founder basically destroyed it because of their own irrational fears or
excitement or exuberance over a new opportunity that was not core to the

15 00:14:00.000 --\> 00:15:00.000 business and then put the business on
the line and lost and so you do not take company size risks unless the
company is truly on the line and you have very strong evidence to
support that which is in the vast majority minority of circumstances and
most times if you were solving a problem that most people suffer from
because you already have product market fit because people already
buying the thing people are always going to want to make more money
people are always going to want to improve skills people are always
going to want uh to lose weight people are always going to want to have
better relationships people are always going to want there are a lot of
things that those demands those desires will not disappear and the
reason that we invest in businesses that are non-tech related for the
most part is because we know that we can consistently i would say 80
portfolio is not tech based right so the vast majority of businesses we
know that if we can do the boring work we can repeat successful actions
once we find product market fit where people want this thing solved and
we can solve it well most of the growth comes from not putting the
company on the line but doing the things that no one wants to do which
is simply improving simply getting better at fulfilling the promise and
i'll give you a quick story on this dragon dictation way long ago there
was a dictating software this is probably like 20 years ago that came
out very

16 00:15:00.000 --\> 00:16:00.000 early days in computing because a lot
of people weren't even good at typing this so they created dragon
dictation they created a 2.0 version of direct dictation that had zero
new features zero all it did was be more accurate at dictation when
people would speak they would get more uh accurate results on the screen
and they were praised by so many people for making this move but the
thing is is that most of us don't want to do that hard work of making
the thing that we actually sell better improving the experience
decreasing the the time to experience result decreasing the time to
value improving the customer health score segmenting customers by their
needs and and trying to match those better with the products we have a
lot of people don't want to do that work because it feels boring feels
heavy it's not sexy it's not exciting but that is where you drive the
outsize value that is where you build the brand that gives you the
premium pricing power that is where you build the word of mouth that
ultimately creates the competitive moat that you can stand on as a
company for years not days number 10 sell what the customer wants not
what you want to build all

17 00:16:00.000 --\> 00:17:00.000 right and this was a big one all right
because our egos want to matter but the thing is is that we don't matter
we want to be right but what matters more is what the data says and so
we have to lead with data rather than ego and i mean there was a company
um that we have in our portfolio that really wanted to do this uh at a
new ascension a new product line that was going to be uh an upsell and a
very high ticket thing um in their business and i felt strongly that it
was not what the the clients wanted they're like dude but we're so good
at this this we could provide so much value et cetera and i said well
let's just let's just survey right and let's survey this is what i think
we should we should offer which was more of what people were already
buying just an increased version of the thing or this new thing right
that's really exciting for you guys and so we did the survey and guess
what came back 85 percent of the people who were customers just wanted
more of the thing that they already had 15 percent wanted the new shiny
thing and so the thing is is that these types of huge pivotal decisions
in a business can completely off-road you and destroy your business by
simply not taking the step to listen to your customer because a lot of
times our egos

18 00:17:00.000 --\> 00:18:00.000 don't want to listen to that we want
to be right we want to do the thing that sounds exciting to us but that
a lot of times isn't what the business requires and so what the business
requires is a founder or ceo who's customer centric who's customer
focused who's not focused on building what they think is exciting but
building exactly what the customer wants even if it's boring to them and
hell if it's born to you awesome means you're already probably pretty
good at it right and that is where the depth of expertise gets built and
compounded over time number 11. this is my the simplest way of putting
business success into a series of statements all right so the recipes
for success in my opinion can be boiled down to this make promises keep
promises build brand use brand to increase pricing power above the
market use extra profits that were supported by the brand to spur growth
through hiring better people and adding new acquisition channels give
slices of the pie to get a bigger slice overall and enlist more people
in your vision and then give time time and that is it so if you don't
know how my name is alex mosey like i said i'm managing partner at
acquisition.com uh we take three million dollar companies to 30 million
dollars plus and beyond that is what we do every day you can find out
more at acquisition.com and

19 00:18:00.000 --\> 00:19:00.000 uh if you dug this leave some
questions in the in the comments i've been trying to answer the comments
um more than i have in the past i've been trying to allocate some time
am i scheduled to do that love you guys mosey nation you guys are
amazing i don't deserve you i appreciate you nonetheless and if you're
new to the channel welcome and i'll see you guys on the other side
