Full Transcript
Paul Singh: The biggest money to be made over the next 10 years, is at the intersection of the online and offline world.
Ed Pizza: Somebody sitting in a room programming isn’t necessarily going to have that context of having banged their shins against that specific thing, a million times.
Paul Singh: Biggest mistake I see a lot of early stage founders make, whether they’re funded or not, is they just try to boil the ocean.
Ed Pizza: When there was a huge inflection point and somebody decided that they were going to… That was when they were taking the left-hand turn, that there was some real massive company growth.
Ed Pizza: Hey guys, welcome to the first episode of The Results Junkies Podcast. Paul and I have been threatening to hit the record button for quite a while. And we finally got around to cranking out episode number one. And Paul, I’m going to steal your line right off the bat, to just remind people that the show is all about tactics.
Paul Singh: Yeah. I mean, there’s just plenty of stuff out there for hand-wavy, unproven, unused advice from unfortunately, unqualified people. Between you and I and our investing in our operating of companies and stuff like that. Yeah, we need tactics to keep doing what we do and now we’re sharing them here on the podcast to help others.
Ed Pizza: I would have lost a bet, had we made a bet that you would have used the word fluff in the intro, because along with hand-wavy, hand-wavy and fluff is right down your wheelhouse. So, I guess we’ll get the fluff a little bit later on. Huh?
Paul Singh: Well, maybe, maybe, yeah. Don’t get excited. But, I think that the older I get, I think, the more cynical I’ve become and when I see BS and… So, now I’ve spent the last couple of years weeding through it to figure out how to build my company, and weeding through it to figure out which companies to invest in and how to sort out what’s real and what’s not. But, now it’s, all the stuff you and I have learned over the last couple of years Ed, let’s just start talking about it. And somewhere out there, I’m convinced that there going to be smart people that can use this to further their careers, or their companies, or their businesses, or whatever. So, it’s going to be great.
Ed Pizza: And we did talk about it. So, in episode one, we covered some listener questions. We talked about whether it’s better to raise money, or bootstrap. I mean, this question comes up all the time from new founders. We dug into how to acquire customers to get from zero to a million bucks in revenue. Again, another question we hear all the time. And we touched on one of Paul’s third rails, playing not to lose, versus playing to win.
Paul Singh: That’s right. Yeah. I mean, I think it gets me fired up and I think you’ll hear it in the episode, but I just see so many smart people accidentally, playing not to lose. And in the episode, I talk about a couple of examples that should help you figure out when you find yourself, or somebody you know, doing that. So, you can hopefully pull them out of it and get back to playing to win.
Ed Pizza: Awesome. Well, we are going to play to win and get out of our own way and get ready to start episode number one. As a reminder, hit that subscribe button, wherever you guys are listening to get notified of new episodes, as soon as they drop. We’re going to be feeding off of your listener questions as well. So, email us, show@resultsjunkies.com. You can hit us up on Twitter as well. Paul is @PaulSingh and I am @pizzainmotion. On the other side of the music, Paul and I, Result Junkies, episode number one.
Paul Singh: Let’s just get right into it. This is the first episode of the podcast and I tweeted about it the other day. And I mean, the understatement of the day is, I was just blown away by how many responses came in. And like you said earlier, right before I hit the button to thoughtful ones, thoughtful questions. So…
Ed Pizza: Well, I think we had hit the button. I think that was take number two. But, yeah, people wrote paragraphs, which I think is awesome that they took the time to think about framing the question.
Paul Singh: Yeah, for sure. For sure. So, all right. Well, we’re going to figure out how this show is going to flow, over the course of the next couple episodes. And I think, if you’re listening to this and there’s ideas that you think might make the show more interesting, or ways we can make, or frame things better, send that over. The best email for that, is going to be show@resultsjunkies.com. And well, let’s get right into it. Ed, I know right before this, you and I cherry pick all the ideas into a doc here and there are in no order of favorites, or anything like that, but let’s get right into it. I’ll give you the courtesy of picking the first topic of the first episode.
Ed Pizza: Wow, courtesy from Mr. Singh. And I’ll say yeah, everything that came in got put into the Google doc. And I would imagine we’re going to answer all of these questions over some handful of episodes. Because, they’re all great ones and I would say, there’s at least 30% of them that you and I are going to fight about. But, for startups, I think our first question is something that we’ll likely, mostly agree on. And so, Rigerio writes in, “When starting, is it better to bootstrap, or aim to raise funds from investors?”
Paul Singh: Yeah. I mean, it’s such a simple question, but it’s very nuanced. I don’t know. I mean, the unfortunate answer is, it depends. I guess what I would just say, is that when you bootstrap first, you always have the optionality to raise money later, but the opposite is not true. The minute you raise money, you can’t easily go back to bootstrapping. Now, before anybody listening to me says, “Well, but Buffer did it, or Gumroad did it.” That is true, founders have been able to undo it, but I will just tell you, at least in the scenarios I’ve seen, it’s not cheap and it’s certainly not easy. So, all that to say, if you’re looking for a simplistic answer, just remember that there is no simplistic answer, but it’s really about optionality. Bootstrapping first, retains the option of raising money later. But, the opposite is not really true.
Ed Pizza: Yeah. And I think you nailed it. No question about, it depends. But, I think you nailed it when you said that it’s really, really hard to unwind that equation. Once you’ve rung that bell, as Paul likes to say, “You’re on that treadmill.” And I think, the other thing I’d say for anybody who’s out there looking to start a company, trying to figure out if you can do it, is much more important than trying to figure out if you can raise money against it. Because, I believe at this point that there’s an investor for every single founder and there’s probably six investors for every founder, just based on how much money there is out there right now. But, you’ve got to figure out if you can do it. And I think if there’s a bunch of money in the bank, you just don’t have the hunger and the motivation to try and figure out how the heck do I get this done? Somebody will give you money if you figure it out.
Paul Singh: That’s fair. I want to just add though. I think that, whoever the PR people are for the venture industry, I mean, clearly they’re very good at what they’ve done, because I think what’s happened here. You know, if you look at entrepreneurs on the coast, all around the world, whatever. Everybody thinks they have to raise money and I get it. You don’t have to go far on any social feed to see that everybody celebrates people that raise money and you don’t have to sell… Yeah, anyway, here’s my point. The thing about money is, it’s like rocket fuel. You can put the rocket fuel in the… Oh, God, this is such a bad analogy, but I’m going to use it anyway. But, the problem with money, is it doesn’t actually make anything better. If the rocket’s pointing in the wrong direction and you put some gas in it, it’s still not going to go where you want it to go. What does it take to get the company pointed towards customers with small but meaningful traction?
Ed Pizza: Well, and I think, you hit the nail on the head again with, if the rocket isn’t pointed the right direction, that fuel isn’t going to do any good. Where money can help in these situations, is that money is absolutely going to help you fail faster and pivot, than if you’re bootstrapping in a lot of cases. But, that money comes with consequences. And so, you’ve just got to think about whether you’re ready for those consequences, or whether you can find a way to fail quickly without the money. Is there a way to test it in a small enough group setting that you can figure it out and fail without taking money? So, that when you do take the money, the rocket’s pointed in the right direction.
Paul Singh: Yeah, that’s fair, that’s fair. But, not to belabor the point, but you hit on something, I think, that’s an important thing to at least touch on. The startup community does talk quite a bit about pivot, “Oh, just be ready to pivot. Startups, pivot fast.” I get it, there’s books written about pivoting now. But, the thing to understand about that, is that sometimes it’s easy to pivot when it’s just you, or your team, or whatever, but the thing about it is on the investor side, if you pivot, that’s also a little scary for investors too, because they invested in idea X and not to say that they don’t understand that a pivot could happen, but I think it’s just important for a founder to understand that, as much as we glorify pivoting and I agree by the way that pivoting that founders and startups should be ready to do, let’s just not forget to at least mention, especially when you have investors, with a pivot does come, some additional discussions with an investor, because God forbid you pivot into another company, or space they’ve already got a conflict in.
That does happen. I mean, you can Google it. That’s happened at very high profile firms. But also, there may be cases where you pivot into a space that, that investor does not want to be in. There’s a lot of things that happen there. And I’ve been doing this stuff for 15 years now, and I’m telling you the dark underbelly of the pivot, is that it does make investors uncomfortable. And more often than not, they’re probably going to just go ahead and write the investment off. [crosstalk 00:10:41] What you read about is, “Oh, the successful pivot.” But, that’s just success bias, or whatever they call it, right? Or, confirmation bias.
Ed Pizza: Yeah. And that’s the thing I wonder, because we’ve never tracked this. At least, on my side, I’ve never tracked it. I wonder if somebody has statistics on the success of companies after a pivot. Because, like you say, we hear about a lot of pivots that are successful and yet, I could sit here right now and I take my shoes off to count all the companies I know who sent me an email saying that they were pivoting. These are companies that we had investments in, sent an email that said they were pivoting. And then, the next email from them within 90 days was, “We’re shutting down.” So, definitely have piles of both. I don’t know that one’s necessarily, more successful than the other in our landscape.
Paul Singh: One of the other things you touched on there, I think that is important, but not mentioned publicly quite often is, when you think you might have to pivot the thing you really ought to think about is, is it better to just stop?
Ed Pizza: Yeah.
Paul Singh: And maybe give the money back? And I know that’s uncomfortable, but just hear me out for a second. A lot of people are going to hit the stop button and move on to the next podcast where… But, hear me out for a second, look, the arc of our careers is long. We’re all going to be in this industry, or somewhat we’re doing it, right? We’re all going to be of working age. There’s 40 years of our…
Paul Singh: Somewhat, right? We’re all going to be of working age, there’s like 40 years of our lives. So if you’re thinking about pivoting, I’m not saying you shouldn’t pivot. But I do think that when you look at whatever your decision framework is to make that pivot, one of the angles to consider is, is it better actually to maybe stop and unwind the business right there, return whatever money you possibly can to investors and get the goodwill that comes with that? And again, I’m not saying you shouldn’t pivot, but I think it should be one of the angles you explore before you turn that ship. Because to your point, more often than not, you get the email about the pivot and then 90 days later you get the secondary email of, “Sorry, we’re wrapping it up.”
Ed Pizza: So how many times have you gotten the check back in that situation, more than 10?
Paul Singh: Oh man, honestly, no. I would say somewhere between five and 10 companies in the last 15 years. Yeah, but I think it’s because we don’t talk about that as an option.
Ed Pizza: Right. Yeah. I think I can recall two, significantly less fewer investments than you over 10 years. I can recall two. So you’re right, it doesn’t happen very often. They run until they can’t run anymore.
Paul Singh: I mean, that’s the whole point of this podcast, right? Is that I think that there’s a number of topics across a number of concepts, whether it’s funding or careers or growth or business building, that nobody really talks about. Hey, we just hit on one in our first episode, that’s great.
All right. So Monica asked, “How do you acquire customers on a budget from zero to a million in revenue?” Look, I love this question because I think the reality is that as much as we all talk about building the next big thing, if you can’t get from zero to $1, you don’t have a business. And if you can’t go from one to a million, you’re never going to get to that other thing. So look, I don’t have a very sexy, complicated answer here on my end and I’m curious where you’re going to go with this too. But on my end, I think that at a high level, zero to a million is about brute force. But again, hear me out, it’s not about boiling the ocean either. I think that … Let’s just assume that most of the people … Let me just make an assumption that most of the people listening to this are in some sort of business where they’re going to acquire their customer online, which I realize, by the way, is not every business, but let’s just make that for now.
If your customers are online and you’re trying to go from zero to a million dollars, it is going to be pure brute force. But before you do that, I would say, you need to install three pieces of software on whatever site you use. I don’t care if it’s Shopify or WordPress or whatever. Whatever it is you use on your e-commerce or SAS or whatever site it is you need Google Analytics, you need Google Optimize and you need a tool like Lucky Orange.
And here’s what I mean by that. Google Analytics, not rocket science, but people don’t use it well, understand what UTMs mean? Google that, learn it, it’s a very simple concept. With UTMs and you’re basic understanding of it, you will have what they call attribution. You will know where people are coming from and if they purchase something really where they came from, what they did, that sort of thing. We’ll skip over Google Optimize for one minute.
Lucky Orange or a tool like it. I use Lucky Orange every day and my business is at 40 mill and growing, right? So Lucky Orange, and there’s many other tools like it but I love this one, Lucky Orange is site recordings. They have a lot of other features, but the feature I use almost daily is user session recording. So once they come into the site, which you can see on Google Analytics, then you’re actually recording the entire session. Now you can’t see where that user’s eyeballs are going or whatever, but what you can see is where they’re scrolling, where their mouse is hovering, that sort of thing.
And then that leads you to the third piece of software, which is Google Optimize, which allows you to change things on the page without having to be technical. So let’s just say, as an example, you see a lot of traffic coming from a Reddit post you did. I’m just making that up. And that traffic comes in and like an hour later, you can go into Lucky Orange and you can say, “Okay, show me all session recordings from that source during that time.” And you can just watch them.
Now that may not sound interesting, but if you watch them enough, you’ll start to see where people get hung up. And maybe it’s because the … You’ll see them hovering their mouse over some copy, that’s confusing. Or maybe you’ll see them rage clicking. They’re trying to click that checkout button, but it’s not working. That’s fresh on my mind, by the way. But now that allows you to go back and say, “Okay, before I go Re code something, let me actually use Google optimize to change that section of the page and see what the next set of traffic does there, do they still get hung up?”
So, all that to say, to go from zero to a million in revenue, it’s about brute force. It’s about setting up the tools that you need to know where people are coming from, what they’re doing on the site, and then change that experience for them on the fly.
And then beyond that, the last thing I would say is, it’s about not being romantic about how you make your money. Look, if you’re trying to go from zero to a million dollars, I’m going to guess it’s just you working on your business. Maybe it’s you plus five, but it’s still a small team. You got the same 8, 10, 12 hours a day that I do. Use Google Analytics to figure out what you think the top three channels are going to be. And if you’re going to brute force it, nothing but those channels. That’s it. And you’re probably going to want to stick with that, well past a million bucks. So let me pause there. I’m curious what you would say.
Ed Pizza: Yeah. I don’t know. I think you have some great experience right now with pieces of software, like Lucky Orange. So, I’m not going to try and stick a better pin in that. I will say that I agree wholeheartedly on Google Analytics. Short version along with the day job, I write a travel blog and I’ve been writing that travel blog for almost 15 years now. And when I started, I didn’t even have Google Analytics installed. I would get these spikes in traffic and it was like, “Wow, that’s great. I got a spike in traffic.” But I had no idea why. And so I think Google Analytics is the first taste that a lot of people are going to get of the who, the what, the why, the where, and what you do with that information after that. I mean a bunch of different paths, but but I agree wholeheartedly with Paul that Google analytics is a great way to start explaining to you what’s happening on your website.
And I think to your point, Paul, even folks who have quote unquote “brick and mortar businesses,” they’re going to acquire vast majority of their customers from a website or from social media or something of that nature. I think in the zero to a million dollar category, I think the other thing I’d say, if we zoom out, we go to that metaphorical 10,000 foot level, I think what you want to do at that point is find the people that you know the best, who are the ones that always tell you when you have something stuck in your teeth. And try to pitch them on whatever it is you’re selling and have them tell you why it sucks and why they’re not willing to sign up.
I’d also say too, for anything that’s subscription-based, I would introduce it to people that you know. Because I think if you want a classic sign of early failure or early product market fit issues, if you have a product that you know that you highly believe that your friends will use and you show it to them and they don’t sign up and give you five bucks a month, you really have a messaging issue.
Paul Singh: Yeah. Yeah. I can’t disagree. I just think that ultimately it’s about brute force. And the biggest mistake I see a lot of early stage founders make, whether they’re funded or not, is they just try to boil the ocean. We’ve glorified this idea of hustle porn, working 27 hours a day and all that and that’s not how real great companies go. I think it’s about being realistic and saying, “These are the three channels,” or “These are the three things I’m going to try.” And you may be wrong, but don’t try channels four, five and six until you sunset channels one, two and three.
Ed Pizza: No, I think that’s a good point. Even if you’re going to work 27 hours a day, you’ve got to hit two or three things and hit those things incredibly hard to get your reps in, to see if they’re the right thing for you. As opposed to, like you said, “Trying to boil the ocean.” No question at all, 100% agreement.
Paul Singh: That’s right. That’s right. By the way, I know that for sure, somewhere in the audience, somebody because … So, I tweeted about this a couple of days ago. I said like, “Attribution, that is the only way, that is the number one thing you need to understand to get from zero to a million in revenue.” Oh man, here come all the tech nerds. “Oh, Paul, that is so obvious.” That boils me or riles me up because look, if you have built a web company before, this is obvious to you. But my experience and I think, Ed, you would agree with me on this, my experience of having invested, I think now across almost 60 countries and almost every state in the United States is that, the tech bubble is actually very small, very small. The people that really need to understand what I’m saying here is the people that have never stepped foot in Silicon Valley, the people that are just starting.
So, before all these tech nerds start blowing me up on Twitter, just understand that, look, the reason we have grade schools and high schools and all these colleges around the world is not because … It’s for no other reason than the fact that knowledge that people need is not actually innately known. We all need to know some math. It is not innately known, so that’s why we set up schools. We need to know how to write. It’s not innately known so we set up schools. And same thing here.
I really think the biggest money to be made over the next 10 years is going to be, at what I call, the intersection of online and offline. The biggest money to be made over the next 10 years is at the intersection of the online and offline world. And what I mean by that is, it’s at the intersection of technology pushing its way further into the majority of industries on this planet that still have not seen massive innovation.
So, think about what Silicon Valley and SAS and B2B and consumer startups have done over the last 20 years, they’ve made a ton of money. We’ve made huge platforms. Facebook didn’t exist 15 years ago. You TIK TOK didn’t exist two years ago. Those are all, all joking aside, amazing. They’ve allowed people to connect. But let’s just be really clear,, the vast majority of money spent on the planet is still in the real world for better or for worse.
Ed Pizza: Yeah, I think a lot of the people that we met on the tech tour were folks that had figured out how to solve a problem, but didn’t have any of the tech stack side of it. And they had lots of customers and they were doing things manually, shipping, stuff like that or how they were acquiring customers. Well, heck, actually probably our first investment on the tech tour, Jetpack. His goal was to find accountants and sign them up for his time management system. And accountants, they’re not Twitter folks. These are not folks who are hanging out in sub stack Reddits and stuff like that. These are very black and white people and he had to figure out how to connect with them where they were.
Ed Pizza: … black and white people, and he had to figure out how to connect with them where they were.
Paul Singh: Well, I don’t know if David would appreciate us talking about him, but let’s talk about him, and then maybe I’ll get in trouble here. But, so David Cristello from Jetpack Workflow, we met him … I guess it must have been four years now, four years ago now. And long story short, we ended up investing almost instantly. And then I think over the years … I have to look it up, but we’re probably in there about a half a million bucks at this point.
Ed Pizza: Yeah. And four or five times.
Paul Singh: Yeah. Four or five times. Yeah. But here’s the thing. He’s a great example of this whole idea that I’m talking about. Like, no ex-Googler … Whatever your stereotype image in your head is of what a tech person looks like … Let’s just say-
Ed Pizza: I’m a Racker.
Paul Singh: Yeah. A Rackspace guy. I don’t know. Like, no tech person is going to magically leave a tech company and then go into, let’s say, accounting and figure out how to make the software to make those accounting businesses run. By the way, if you don’t believe me, just look around you. Go to whatever your favorite bar or restaurant is and look at the point of sale. It’s awful. It’s made by some dev that thought that he or she could somehow magically replace the point of sale. And yeah, maybe they’re being successful, maybe they’re making some money, but honestly, ask the staff how that really works. Like, yeah, you can make some money in the short term. Don’t get me wrong. I’m sure like the Breadcrumbs and the Toasts of the world are making a lot of money. But the reality is, the true money, the true innovation, the true success of every industry is going to come from the inside.
And back to David, that’s why I bet on him. That’s why we bet on him. And it’s because he came from the inside. He was an accountant at an accounting firm. And David, if you’re listening, I’m probably not doing you any justice here. But he was an accountant at an accounting firm. He saw a problem of his firm not being able to accurately stay organized around multiple clients and the billing requirements and the measuring, tracking time, that sort of thing. And so he chose to learn how to code. And he chose to pre-sell. I think when we met him, I think he had pre-sold like three or five accounting firms before he ever built that first version. And I don’t think he gets a lot enough credit for that. I think that a lot of other people, and hopefully they’re listening to this, like, let me just say very bluntly that I think over the next 10 years, the biggest money to be made is from the inside of whatever industry you’re in.
So like the holy grail, for example, would be just like what Jetpack did, just like what David did as an accountant, he learned the software, and as an insider in the accounting world, he knew the ins, the outs, the ugly parts, and he built the software natively for accounting firms. Like, nobody on the outside could do that. So whether you’re a bartender or, I don’t know, a lawyer or whatever, it’s more important than ever, if you really want to build something big, a business, whatever it is, to understand that the power really does belong to you. Like, I think anybody can learn to code. I don’t think everybody can learn the native inner workings of whatever industry you want to disrupt. So …
Ed Pizza: Well, we talk about it. A lot of the best companies out there are solving a problem they had, and it’s overcoming that. You talk about the devs and the ability for the devs to come over. Like, nothing against coders. I’m not a coder, but I also know how to fix problems in industries that I have deep knowledge in, and somebody sitting in a room programming isn’t necessarily going to have that context of having banged their shins against that specific thing a million times. Yeah. Actually, quick story. You remember … Have I ever told you that we built a point of sale system back like 15 years ago?
Paul Singh: That sounds like a bad idea.
Ed Pizza: It was. It was a horrible idea. But the very short version of, like, not having a great relationship between the problem solver and the dev was, I remember mapping out the system for the lead dev on the system. And I had mapped out on a window that was in the office of where all the printers needed to go. So the hot side for this restaurant needed to only get the hot side stuff, because they didn’t need to see the cold side stuff. And so like, here’s how we’re going to map everything, and here the dip switches we need and the software and all that stuff.
And we get to day zero, we’re installing the system, and everything is printing at every printer in the restaurant, including all the receipt printers in the front of the house. I’m like, “Hey, I don’t understand. Like, where are my dip switches?” And the dev’s like, “Well,” he’s like, “I just didn’t see the big deal about it just printing everywhere. Like, they can just throw out the slips they don’t need.” And it was like, “Oh my God. Do you remember the window and the development path?” And he’s like, “Well, yeah, but it just didn’t make sense to me,” because he’d never worked a restaurant.
Paul Singh: Yeah. By the way, if this idea is resonating with anybody, then I’ll just throw one other little tip out there. The key is to bring tech into those industries without ever mentioning the word tech. Because I think that that word is a little overloaded. And for us, for the people inside the industry, the people that, like us, that probably already know how to use all these tools, tech to us implicitly probably means unbounded possibility. But it’s important to understand that for people that don’t know this, tech could be scary. I mean, I remember distinctly, one of my most random memories of the Tech Tour was I was traveling, I forget, from one city to another and I pulled into a gas station. And the RV, the Airstream, had the Tech Tour logo on the side and stuff like that. And this guy, he must have been in his late forties, maybe early fifties, he walked over.
Long story short, we had this real short conversation. He asked what I was doing. I told him. And he said … And I never saw the guy again, but he said, “The thing is with you tech people, you tech people come to us.” This was in the middle of the country. I want to say it was like Western Indiana or something like that. He says, “The problem with you tech people is you come into all of our industries talking about all this opportunity you’re going to bring us, and then, surprise, surprise, we’re the ones that lose our jobs to whatever software machine you built.” And I thought that was a really interesting point I’d never thought about. Now, by the way, I’m not saying that maybe that wasn’t inevitable, by the way, whatever happened to him. But I do think that there’s a lot of … The more and more I think about that years later, it’s just an interesting thing to think about.
Ed Pizza: Look, I mean, I don’t want to bore people with a super long episode right out the bat, so I want to make sure that we’re back to Paul’s favorite word, tactical. But I don’t think we can close the show without hitting the one topic that you want to start the show with. Well, not start, but you want to make sure we have, that came in this morning from Caleb. This is like vintage Paul. What’s the difference between playing not to lose versus playing to win?
Paul Singh: Yeah. So for context there, I tweeted earlier this week about this idea. I said, I don’t know who needs to hear this, but playing not to lose is different than playing to win. And it sparked a lot of interesting replies and DMs and that sort of thing. But anyway, Caleb … Again, this will all be in the show notes. But Caleb tweeted back and he said, “Hey, high level, that makes sense. But how do you bring it down to something practical?” And he said more specifically, he said, “What’s a move you made recently that was playing to win where you could have played not to lose?”
There’s a lot of ways I can take this, but to your point, Ed, I don’t want to like drag this episode out forever. I’m going to give you something that’s top of mind for me, and I’m going to use that as a illustrative example. And so for anybody that’s in sort of DTC/e-commerce right now, maybe this will resonate with you. Here we are in September of 2021. And for those of you, again, that are in adjacent industries, what you know is that a couple months ago, back in May, Apple released iOS 14.5. And in brass tacks, basic terms, the privacy changes that rolled out with that effectively decimated a paid acquisition channel for a lot of companies. And I won’t go into the details. I don’t want to bore anybody. But the bottom line is is that you cannot target your client or your prospects as tightly as you used to be able to.
Ed Pizza: Yeah.
Paul Singh: And so, what happened? Well, you don’t have to go far on Google right now or jump into any entrepreneur’s Slack group or email list, or, I mean, Facebook groups. You don’t have to go far to see what’s happening. What’s happening is every e-commerce company right now is trying to figure out what tactics, how to change their paid ads, to like get their cost of acquisition back to what it was. That’s playing not to lose. Because this is a foundational shift and it’s only going to get worse. We already know Google’s going to do the same thing. Hell, we know that iOS 15’s coming, and we know that we lose open data.
So back to Caleb’s question, what is playing not to lose? In this example that I’m giving you, playing not to lose is somehow having this illusion that pressing your buttons in some magical way is going to take back to pre-iOS 14.5. That is delusional. Playing to win is realizing that in certain scenarios like this, tactics will not solve the problem. You have to start thinking more broadly. So I’ll give you an example again, using this same illustrative example. I think one of the most fascinating things that has been done by anyone in the space has been HubSpot. They’re a B2B software-as-a-service thing. But more importantly, if you’re listening to this, Google the HubSpot Podcast Network and go look at that, like at a high level. By the way, if somebody at HubSpot is willing to talk to me about the economics of that, please do. I’ll keep it private. I actually tweeted about this yesterday. I want to do this in the women’s health space, too.
But anyway, what they did was, in my opinion … from the outside again, I have no proof, but I think they took a bold bet. They were like, “Hey, we know the landscape’s going to change. We know that it’s going to be profound. And honestly, we know that everybody’s probably going to try to scramble to try to find the magic sequence of buttons to go back in time.” So they decided not to fight that fight. Again, I’m looking at it from the outside. Maybe I’m totally wrong. Again, if you’re at a HubSpot and I’m wrong, come talk to me. I want to learn. What did they do? They, instead of wasting their time like everybody else, trying to find this magical solution, they decided to take a bold bet. And they said, “You know what? Let’s buy the most interesting business podcasters, like business topic focused podcast, and let’s just buy them. Let’s buy the Hustle. Let’s buy the other … And let’s create our own podcast network.”
Those podcasters can no longer sell ads to anybody. And that’s great because for those podcasters, they don’t have to worry and chase down fickle advertisers every 30 days or whatever they’re going to do. But instead, what does HubSpot do? If you listen to any of their podcasts right now, they’re not even advertising HubSpot. They basically say, “Hey-
Paul Singh: … their podcast right now, they’re not even advertising HubSpot. They basically say, “Hey, welcome to this episode. We’re part of the HubSpot Media Network…” and that’s it. I love that. I love that. That’s amazing. That, by the way, is the inspiration of where I think the future’s going. But anyway, back to Caleb’s question, we’ll talk about that in another episode I think, back to his question, I think the important thing to understand is that playing not to lose is about accidentally or maybe even implicitly having this mental model in your head of, “Oh God, something’s changing. What do I got to do to keep that thing the same?” And probably in the moment it feels like the right thing to do because your lizard brain sees something change and you’re like, “God, I’ve got to make that not happen anymore. What do I do?”
But experience is about looking at that same problem and saying, “Okay, is this a short term thing? Because if it is a short term problem, then, yes, tactics can probably fix it.” But if it’s not a short term thing, then you have to fight that inner lizard brain and say to yourself, “Okay, playing not to lose here is not going to get us out of this trouble. We need to play to win. And what does that look like? Help.” DM me. Maybe we’ll do like a breakdown of somebody’s business if they ever want to do it. But hopefully that example is illustrative. But keep me honest here, Ed.
Ed Pizza: Man, I could have made a lot of money posting a lineup for people to say, “What are the chances that Paul talks about lizard brains on the first episode of the Results Junkies Podcast?” That would’ve been a sick line in Vegas. No, I think to boil it down for me, as you said, I think it comes back to when companies are trying to maintain the status quo. When change happens, to use something that you talk about, that’s a point for the best companies to run in the other direction. There’s a moment there where you can say, “We’re going to try and hop on the hamster wheel like everybody else and catch back up,” or, “We’re just going to go completely different direction. We’re going to go define a new medium.”
And sometimes there’s going to be epic failures, but my guess would be if we were able to chart the history of all the companies that you and I have come across, that there are probably a remarkable number of successes where when there was a huge inflection point and somebody decided that was when they were taking the left hand turn that there was some real massive companies built.
Paul Singh: Agreed, and just to keep it punchy I’ll just share my framework. So the inevitable question somebody’s going to have here is, “Okay, that’s one illustrative example, but what is the framework I should use?” So I’ll just give you one that’s top of mind for me. I want to double my company’s top line revenue every year. That’s it. That sounds really simple, but it is not easy to do. But it’s so clarifying, when you’re in the moment and you’re thinking about whatever problem you’re dealing with, I can apply that framework. Are we talking about something here that’s going to double my money next year or double my revenue? If no, this is not a problem. Tactics might figure it out, whatever. But on the other hand, there are certain things that when you apply that framework then become obvious where it’s like, “Man, even if I solved that problem, I’m not going to get to 2X.”
And so, for whatever it’s worth, that’s the framework that I use, I want to double my revenue. And to your point, sometimes it works, sometimes it doesn’t, but that’s not the point. The point is to be, in a world where you can’t predict the future, the goal here really ought to be to reduce the number of bad decisions you might make. And so playing to win to me is about, when you’re just starting out, it’s not about anything other than getting to 1,000 bucks of revenue or whatever in the first month. That’s something I think about a lot. And then I think it’s about setting the target at a million bucks by the end of the year. Not because you should be feeling bad if you don’t, but because the framework of thinking that you would apply then to your daily decisions of, is this going to get me to a million? It’s going to make it a lot easier to say no to a lot of things.
And now fast forward to we’re at 40 mil now and I now know that when I want to go to 80 next year, I know that that’s going to allow me to say no to a lot of things. Because I always get these pundits that are like, “Oh, Paul, you should think about this button. It should move. The pixels need to move this way.” I’m like, “You might be right, and maybe I’ll go get somebody to test that on Google Optimize.” But even if it’s successful, probably not going to make me another 40 mil. So anyway, play to win. Play to win. And I think this is true of your careers too, by the way. Your careers, whether you’re sitting at a cubicle, everybody has this idea that entrepreneurship is about starting a business. That’s not true. I think entrepreneurship is a way you think, and so playing the win is also something I think you should be using in your career.
There’s the table stakes of what you have to do that’s expected of whatever role you’re in but then there are the things that you could do that could 10X your career in as little as a quarter or a year. And that’s playing to win, picking which bigger projects to work on, that sort of thing. So anyway, I could belabor the point, but hopefully, Caleb, this is useful to you. At some point, we’ll probably do real business breakdowns, and if you ever are interested in doing that, again, show@resultsjunkies.com. Let’s figure out how to give, use some value but also maybe use that help or those results that you get to help other people that might be listening.
Ed Pizza: All right. So we set out with an ambitious goal in episode number one to cover eight topics. We got through three, which is probably a little bit less than what I thought we were going to cover. But I think the goal that we set out to achieve at the start of episode one was achieved, which was, in Paul’s words, to not be hand wavy, but just to try and get to the root of what someone was asking and also to be okay being wrong. And I think you’ve got to be out there right from day one, whatever is you’re doing, and it’s something that Paul just said, entrepreneurship isn’t necessarily about starting a business. It’s about where your head is focused and what sorts of questions you’re asking and how you can be transformational, not incremental. And so our goal is, fortunately or unfortunately, to be incrementally better in episode number two. Right, Paul.
Paul Singh: We’ve set the bar low, I suppose, so yes. That’s going to be easy to do.
Ed Pizza: We have. We can step over the bar, but I don’t know that we’re going to be transformational in episode number two. But we’re going to be better than we were in episode one.
Paul Singh: That’s right. That’s right. Yeah, so we set out to hit eight topics. We hit three. Hey, not bad for episode one. I’ll take that.
Ed Pizza: Yeah.
Paul Singh: Maybe I will not bring eight topics to the table next time. But now at least we know what we’re talking about in episode two and we won’t drop any hints here though.
Ed Pizza: Yeah, we got five, but I guarantee you, by the time we get ready to record episode two, we’re going to have at least five more that we’re like, “God, now I don’t know which ones we want to go with.” But, like Paul said a couple of times during the episode, show@resultsjunkies.com is a great way to feed us content for the next show. But you can also just hit the tweet button. You can tweet @PaulSingh for Mr. Paul, and you can tweet @PizzaInMotion for me. And as we get rolling here, you’ll find a couple other ways to get ahold of us. We’ll roll out some other cool stuff that you guys can use to find us where we are. But the goal is, if you’re thinking about picking something up today and you want to move forward, don’t leave it till tomorrow. Right, Paul?
Paul Singh: Just get started.
Ed Pizza: Right.
Paul Singh: I mean, the idea ultimately is, I want you to be able to take something you learned here and apply it right after this. But if you take nothing away from us, whether you’re listening to episode 200 or episode one, is just do it. There’s no glory in thinking about something. Just try it out. Either kill the idea within a day or two or get enough traction to justify investing the next week or two. But that’s the thing that you’re going to take away every time you listen to one of these things.
Ed Pizza: All right, we’ll see you guys again next week.
Also published on Medium.