How I’m Scaling My Business from 7 to 8 Figures

hey friends welcome back to Deep dive the podcast where it's my immense pleasure to sit down with entrepreneurs creators authors and other inspiring people and we find out how they got to where they are and the strategies and tools we can learn from them to help build a life that we love in this video we're looking back at previous episodes where I look at the best advice on scaling a business from some of our previous guests so without further Ado here we are one of the observations I had shortly after my time at PayPal was that if you first I look back at my time at PayPal and I realized like 90% of all of our growth came from like five things wait how so like I mean early on before I got there they got on to eBay and eBay started s started using it and then they wrote a a bot to start bidding on eBay items and pretending to be a buyer and asking if they would accept PayPal and the sellers were like oh well yeah sure and so eBay was huge early growth engine then reaching out to web developers because that's the people who are implementing e-commerce and then we figured out that about the time I got there they figured out that a lot of e-commerce sites just get built on a platform like the early versions of Shopify type businesses so we reached out to all the shopping carts and hosting companies and got pre-integrated with all of those and there were you know a few more things International expansion and a few others but really not many okay and what's your sense of how many things the team tried to grow of which five worked right so that's the rub right they didn't just do six things like when I left they had 24,000 employees they were spending five billion a year on stuff um so they tried hundreds of things and and launched dozens of products and wasted money on campaigns that didn't work and and it didn't matter because they were printing money but if you're a little startup and you've got 12 months a Runway and a million bucks in the bank you don't have that luxury so in order to be successful you've got to figure out if you assume that 90% of your growth is going to come from 10% of the stuff you do you've got to find that 10% as quickly as possible and that's what we help start up ohuh 90% of your growth so this is like the 8020 principle just like even more extreme than that yeah what other examples have you seen of this 9010 principle in action when it comes to like growing growing businesses I mean if you read the great startup case studies you'll find something like this in all of them um for Dropbox it was this kind of viral product Le referral Loop that Sean ell is helped them develop um canva they started they have about 750,000 landing pages out there for Search terms like award certificate template and you know birthday card template all these things social media post design whatever and so people Google this stuff they get to canva so that's part one and then part two is they have an incredibly optimized self-serve onboarding experience so you can just get in the tool with no Photoshop experience or anything and be successful right away um so you know those are a couple examples but again you know if you study HubSpot or any of these great startups you'll find things like this okay so just sort of zooming out a bit so uh I have only recently learned that the that like growth is a department in a business um I guess you know a few years ago when I started reading reading business books for the first time I realized that sales and marketing were a thing uh and I guess now that we're thinking about our business we're thinking okay we kind of want ahead of growth for each of our major product lines and that person's role will be to try and grow the revenue of that particular product line and I guess Thinking Out Loud Downstream of that they're like okay let's say the goal is to grow our YouTuber Academy from 3 million a year to 10 million a year at that point I guess this person figures out okay what is the menu of 100 possible things we could do and then they figure out what's the three or four things that will actually do that is is that the rough idea um so there's a few questions in there you know one is how does growth sit in the organization and then two is kind of yeah so let's take the first one where does growth sit in the organization how is it different to sales and marketing and what's the thing it's really tricky with most early stage startups my advice is unless you've had a very good reason otherwise you're found ER is your head of growth because a startup has one job you know a startup is a company that grows fast that's built to grow fast and to do growth effectively first of all you need to really understand the business every aspect from you know the board and the cash flow all the way through to the customers every aspect of the product every aspect of sales and marketing customer acquisition the one person who who can do that typically is the founder you also need to be able to pull any and all of those levers and again the one person in organization who can tell an engineer to do one thing and tell a marketer to do another thing and tell the finance person no we're going to spend money on this is the founder so it's a weird thing to put in a department because it's so cross functional and even in larger orgs that creates a problem and like when I was at PayPal and building my team the number two thing I was always thinking about was how well is this person going to play with others can they build relationships can they get people in other departments to do things that their boss didn't tell them to do to the greater go to the business okay so in that sense sales and marketing are a subset of growth um they're certainly a big piece of it obviously yeah customer acquisition but depending on your big levers and what they are a lot of it could be driven by product it could be driven by all sorts of things like let's take you know the company wise yeah here in London money remittances company so anyone who wants to work with a fintech company they have to go through this process called kyc know your customer which means that wise is legally required to verify some documents source of funds who you are you're not a fraudster whatever so for most companies that's just a giant pain and it's this thing you've got to do yeah but if you go to your head of compliance and you say listen your job isn't you know if you hire a head of compliance they're going to want to do a good job and be 100% compliant yeah and if you go to them and say listen that's not your job your job is to get as many weekly active users or as much money going through our platform as possible while remaining compliant they're going to think about their job differently so what wise did was they smoothed out that process in a way and just really spent a lot of time on optimizing the user Journey just to make that really painless and help people get up and running quickly so in that sense their compliance function became a component of their growth engine or another weird example is Spotify so you know it was it didn't take a genius to figure out that people would rather listen to streaming music than like buy albums and only listen to one song on it right the problem was the record labels in the US didn't want that to happen so they started in Europe and they went into countries that have more favorable laws eventually got enough momentum enough of an audience enough money and enough lawyers that they could then move in to the US and in that sense for a while their growth team were their lawyers so it could be I mean I'm choosing extreme examples but my point is it could be anywhere in the organization so you need to sort of figure out from first principles how does your business grow and then align whatever organizational pieces are required to make that happen sick okay that's super interesting all right I'm sold so then what does growth levers mean and why is that the title of the book it's an American book so they're levers for levers yeah now it sounds so much better when you say it anyways leas so these levers are or levers or whatever they are this is the work these are the things the actions that will have the biggest impact on the growth of your business that you need to identify sure okay so how do we do that so how do you do that yeah there's four steps to the process the first step why is it levers levers and process and not levers and proc anyway there's four steps to this process um the first thing which I think we're going to do today is you sort of map your growth model which is a mathematical representation of how your C your business acquires and delights and engages and retains and monetizes customers okay and once you've got some data in there you can sort of mathematically where are the points of highest leverage okay step two is you need to really understand your customer's Journey which has nothing at all to do with your product nobody if you're a startup nobody woke up in the morning looking for your product y often nobody even woke up in the morning looking for your category but clearly you could help these people If Only They Knew You existed y so you've got to figure out what were they trying to do what do they think they were looking for where were they looking for it and you know what questions would they have and how can you sort of turn up there and look like that thing okay so we study the customer Journey y actually have a really cool example of that oh yeah so on the way here um I was walking in like the next Muse over I went and looked at you know the same house number and I figured out it wasn't your house but the doorbell had a sticker on it and it said 24-hour emergency locksmith and I took a picture of it and I figured out you know this locksmith could advertise anywhere in London but the place I'm going to be when I suddenly realize need a locksmith is right here locked out of my flat right and so I was like okay that's a perfect example of growth hacking because you figured out what are you going to be looking for and where are you going to be when you suddenly realize you need it and just turn up there and look like that thing yeah cuz no one wakes up in the morning thinking I need a lockmith they Rock up at their door realizing I need locksmith and if the guy's number's there it's like oh I might as well call that number and if you heard a podcast and as locksmith sponsored it yesterday you're not going to remember that yeah so step two is to map your customer Journey we use a technique called to be done interviews step three then is you're going to have lots of ideas and so you're going to want to filter down the ideas first by looking at your growth model and saying which of these will have the biggest impact which of these are focused on our rate limiting step where we can have the biggest impact on the business and then you're still going to have more ideas and most of them are going to be bad so the next thing you got to do is experiment quickly so step three is to design and run growth experiments as quickly as possible nice and that's tricky because a lot of the ideas you're going to have are hard I'm going to publish a book that takes a long time right I'm going to do what this or that whatever takes a lot of money going to build some product all those things are hard and you've got to find a way to test them in like a week or two oh okay so the way you'll do that is you'll look at this idea and you'll say okay all the thing the moving parts of this what are the risky assumptions here what are the risky assumptions so if you're going to publish a book and suppose maybe you just really wanted to write a book but maybe you're hoping the book's going to be a creative to your business yeah so in my in my case we sell a productivity Community course thing and I'll think great let me publish a book about productivity which will take me three and a half years because hopefully people will read the book and then they'll sign up to my course okay great idea right so what are the risky assumptions here uh that Ali can write a book reasonably quickly that it won't distract him from running his business that people will actually want to buy the book people will like the book and that people who like the book will then sign up and take your course yeah yeah all these are quite risky assumptions okay there a lot of risky assumptions in there can't the only way to test them all would be to write a book but you could you isolate one of those assumptions and find a way to test it could you find a way to figure out in a week how hard writing a book is or whether people would like a particular book title idea or topic idea or whether people who bought a book would then go someone else's book maybe would go on and buy a course yeah so if I were thinking out loud with this example uh I would be thinking who do I know who has both a book and a course and in my position I can just email them and be like hey quick question to what extent did the book contribute to your core sales I so I happen to know a handful of people who do this some of whom some of them have have said it basically did nothing because they already had a YouTube channel and the other one said it was massive because they didn't have a YouTube channel all right those are like the two categories of like four people that I've spoken to who for whom this this this scenario applies okay great so you've now in a week drisk or you know ruled out a good a bad idea or drisk an assumption so for each of your experiments that you're most excited about you figure out what's the quickest way we can test this y That's step three and we can come back to any of these obviously but then step four is a mindset shift so it turns out that to grow a startup quickly you pretty much have to have the exact opposite mindset that it would take to be successful in school or successful in a normal job oh tell me more and as you can imagine people have trouble with this so what do you do you a good student in school how do you succeed in school you learn all the things really quickly really thoroughly and you remember them and you apply them without making any mistakes suppose you get a job as a consultant or a banker an engineer whatever so how do you get promoted in a company you do all the things they ask you to do plus a few more things you do them really really well and you don't make any mistakes okay so now you come into a startup and the deck is stacked against you you can't do all the things that you know you should do you've never done this before so you're absolutely going to make mistakes and you need to move quickly which means you can't do all the things and you've got to make mistakes and the value is those mistakes because each of those mistakes makes a little brings a little bit of learning and gets you actually closer to your goal in theory provided you learn from the mistake provided you learn from from The Experience yeah which I think is something we've been quite bad at in that we've often run we've often done things and then only like two years later we will remember oh yeah we did did that thing and we yeah we really should have written down what the what we learned from that cuz we've just made that mistake again actually that was part of the experiment process is document your experiments done and document your learnings but it's even worse with the mindset piece because someone who is afraid to make mistakes and thinks they're going to get you know a bad grade or a fired or something isn't going to talk about them and then you're not going to learn from them yep and then someone else is going to go make that mistake again I always admired Apple because I don't think most people realize this but apple is playing a much harder game than any other company in Tech so salesforce.com pushes out some software oops there's a bug someone pulls an all nighter and they push an update the next morning everything's fine Apple shipping Hardware once those iPhones leave the factory and you know 10 million of them or whatever and go into stores there's no fixing them you know you'd have to get everyone to update their iOS so everything has to work perfectly they're incredibly complicated devices they do software and Hardware the software and Hardware have to work together and the timing has to be perfect so they their revenue forecast they'll say okay we're going to ship on December 10th we have 21 days before the end of the fiscal year to make our money we'll make 100 million in iPhone sales per day if we ship a day late we miss our earnings number by 100 million right like it has to be perfect and they do it every time and when Steve Jobs was alive almost every product they launched was successful which is the complete opposite of every other company yeah and I was always wonder how do they do that and so I worked with a guy at PayPal named Alan olivo who used to work for Steve and I pulled him aside one day and I said how does Apple do it and he said Matt it's so simple he said Steve stands up at the beginning of the year and he said this year is about version two of the iPhone this year we're going to make an MP3 player a thousand songs in your pocket whatever the thing for the year was he'd stand up there's one thing and Steve was not a nice patient man and you knew if you that one thing was your job and if you were doing anything else you were going to get fired and it was that simple and everyone who came in in the morning you know if you're in procurement you're procuring parts for the new iPhone and everyone knew exactly what they had to do because it was so simple and that's a company that had 30,000 people and $ 37 billion in revenue and that Focus just becomes so critical and so that's why as we're going I'm going to keep asking you to peel things back consolidate and simplify per so all right so back to the North Star then I think how you measure it might be hard but it could either be something about number of lives changed or you know number of true fans or something that reflects the purpose I guess one thing to think about is life-changing is kind of a discreet event but I get the sense that your customers are kind of always on a journey yeah good point um that's a very good point so whatever you end up naming it I like the idea of having something on Mission it's the number of people that you're helping achieve their goals in some form how you measure it and you know I don't want to get into all the weeds of well you know what on Twitter indicates they're a true fan versus just but you know you've got over 5 million followers but every video you put up doesn't get 5 million views so there's some subset of those followers and those email subscribers and whatever other platforms you're on podcasts who are true fans and there's some who aren't and it would be helpful to come up with some proxy metrics that you you can hide all this complexity from the team but yeah you and IUS have some proxy metrics so you'll sort of know this is roughly the ratio of you know for however many views we get however many subscribers we get this is how many of those are true fans and you can sort of DD across platforms wait you can sort of what across platform you can sort of use estimates to dup across platform so someone who D duplicate okay right yeah cool because some people are going to like your podcast and your channel and some people are going to be only podcast and only Channel yeah but you'll still get a directionally accurate number I feel like I've tried doing this so many times and I've never landed on like a number that feels even vaguely uh even vaguely legit unless I'm overthinking it and yeah that's what I'm I'm worried about if you can come up with rough proxies I think it'll give you a sense for it enough to steer the business I mean there are numbers that if they move in the extreme it's going to be obvious and if they don't move in the extreme you're not making progress towards your goals so don't worry about it what are some other companies is Northstar metrics just so you can give me a flavor of what are the what's the sort of thing we should be thinking about for Northstar metric so I'm thinking whether the analogy is right or wrong I'm thinking about your business like a software company okay because a software company or you know a meditation app is going to want to have weekly active users yep weekly act active consumers of their content sure and so that's what I'm thinking about you know is the right Cadence for your customer is weekly daily or monthly probably monthly okay then you're going to have something like monthly active listeners or consumers of content we do have a metric in YouTube hidden deep within YouTube analytics which is monthly returning viewers okay that could be very that's probably a reasonable proxy for True fans um yeah because if that number were to grow 10x we would be getting millions of views in each video okay so what are we calling that uh sorry you said monthly monthly returning viewers yeah that's people who are yeah I mean I can start quibbling with that and think well someone might have gotten a lot of value from the content 3 years ago but they're not getting it now in which case they wouldn't show up in that number probably a good thing yeah and that they shouldn't show up in that number because we're not we're not continuing to provide value to them MH because if we were they would be a monthly returning viewer and so yeah monthly returning viewers that's probably we can we can go with that for now okay yeah do you want to stress test that is there anything about that that makes you nervous one thing about it that makes me nervous is the fact that stuff that helps grow a YouTube channel is often different to stuff that keeps people wanting to watch so for example returning viewers are way more likely to want to watch my Vlog where I document my life and stuff but a new viewer doesn't give a [ __ ] what my Vlog is because they don't know who I am a new viewer is more likely to click on a video titled something like I don't know nine passive income ideas okay but a returning viewer might sigh bit internally and think Ali sold out that he's like he's doing another one of these videos just to get the views so the the incentives of appealing to the existing audience versus trying to get new audiences sort of feel like they're often often adults I don't know if other companies have this as well I'm sure they probably do but but are they actually at odds like if someone sees another nine passive income ideas video are they gonna unfollow you or are they going to be a true fan and see what your next video is and watch it if it's what they like if no in fness if they felt sufficiently h TR with me that they knew that every time Ali puts out a video it's at least worth seeing what he's talking about rather than writing it off by just looking at the title then yeah they would they would probably watch at least some of it okay or unless they're in the sort of I don't know 60% of our audience who uh you know like there are various members of my team for example who wouldn't click on a video just purely because of the topic um they wouldn't click on the passive income ideas video because they care more they're not like they don't aspire to to be entrepreneurs so only aspiring entrepreneurs really are going to click on that video the people who are like you know what I just want a chill 9 to5 job where I'm doing work I'm proud of and I have got work life balance and I can chill with the boys in the evening that's a significant chunk of my audience that would not click on that particular video even though that video might get like I know five million views from other people outside of that core audience okay yeah so there's a piece of this model we're going to have to think about which is how do you get loyal subscribers how do you get followers and then there's going to be this other piece which is how do you engage them and retain them and then there's be this other piece which is how do you monetize them yeah nice I mean I I think it's that simple right that's pretty simple get viewers engage and retain and monetized yeah the the the other thing that makes me nervous about some about viewers as a metric as a Northstar metric is that I worry that that will get me on the hamster wheel of feeling the pressure that every video I make has to then hit a certain view count which to me is always something that I've rebelled against because it sort of takes some of the joy out of creating the videos to worry about like well is what's this going to do to our view Target kind of thing so remember these are going to be returning Vis visitors so the goal is to deliver a drum beat of content that they find valuable rather than you know one specific hit yeah good point I'm guessing because you know I see this with my LinkedIn posts that I just have bangers that generate the line share of my Impressions the line share of my audience and I have other ones that mostly just my loyal readers engage with yep and you know no matter how clever I try to be and make them all bangers y I'm just not and then when I analyze other people's content I see they they all have roughly the same distribution yeah people who I think are much better creators than me also have their Duds and yeah also have their bangers yeah but okay ultimately the the more videos you make the more good videos you're going to make yeah and also as if I if I think of monthly returning viewers as like one one question we've been thinking about to get really inside baseball here is like should we put our Vlogs on the main Channel or on our second Vlog Channel and I've sort of been wanting to put them on the main Channel because they get more views and it's like it's kind of nice and feels cool to have a big YouTube channel that has some sit down talk to camera educational bits but also some more chilled out bits that are a bit more lifestyle and stuff and a lot of the core true fans love the Vlogs because they think oh my God I love seeing what Ali's up to but they get like they're guaranteed to get way fewer views than uh sit down and talk to the camera and explain how to make more money video but I like putting the Vlogs in there as well so it' be nice for the monthly returning viewers metric to be honest to be able to put the Vlogs there I mean so that is is there a way to do an experiment and find out if that's a good idea or not yeah we're doing that for the next probably few months to put Vlogs on the main Channel instead of the second Channel and see what happens okay yeah so this does get easier the Northstar is is definitely the hardest piece of this and once you've done that most of it C of naturally flows from this okay I'm I think it's a little ambitious to think we're going to be able to tightly Define the North Star is this metrics from this system you know average over 90 days or whatever I think we can agree on the principle that it's going to be some measurement of who are people who remember you and know you and like you and loyally consume your content presumably because they find it helpful yeah just a quick message from one of our sponsors and then we'll get back to the show so if you are making money online or saving up and wondering how to grow it you might want to check out trading 212 who are very currently sponsoring this episode trading 212 is an amazing app that I've been using for the last several years now that makes investing in stocks and shares and funds simple and commission free one of my favorite features that they've got is the pies and auto invest features now these tools make it easy to create a diversified portfolio that helps 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will get a free fractional share worth up to £1 which is free money so you might as well claim it and of course a quick disclaimer this episode is sponsored by trading 212 but I am not a financial adviser and this is not Financial advice when investing your capital is of course at risk and you might get back less than you invest past performance does not guarantee future results and terms and fees apply and you'll find all the details in the video description and on the trading 212 website cool so thanks trading 212 for sponsoring this episode and let's get back to it a lot of people who watch my stuff aspire to the whole Financial Freedom thing where they're like oh if only I had the business that I that made passive income I'd be able to do whatever I want dot dot dot dot dot dot and it's like well when you ask like well what do you want it's like I don't know just being able to not do things I don't want to have to do it's like okay but then what do you want to do it's like becomes quite confronting in a way what was your experience with that well and it's such a funny thing because I feel like everybody misses that chapter the first time they read the book they just focus on the how do I make a bunch of passive income and then if they get it basically everybody realizes that they're just not very happy in that life it's fun for like three 6 12 months you do the traveling you do the you know taking whatever random classes you want playing with your hobbies and then you feel kind of empty inside and you realize that meaningful work is a core part of human fulfillment and what I realized you know first back then was that just doing these things to get some passive income so that I could quit doing them was really a losing proposition because doing a bunch of work that you don't really want to do so that you don't have to do work that you don't want to do is kind of this like silly tradeoff if you have the option to make it and it it that was the first time when I was like okay I should try to actually work on something long term right something that I could actually keep working on year after year after year after year after year and enjoy working on it because that's where you're actually going to get this long-term happiness and the thing that nobody in the passive income World wants wants to tell you is that there's really no such thing as passive income because the minute you let it go passive it starts dying it starts just slowly going down and it will trickle away other people will come in and eat your lunch your work will get stale your products will get stale you'll get beaten out on Amazon or for your courses or for your SEO or whatever and in two years you're going to be back where you started before you built the thing so you better use those two years to get somewhere interesting because if you think that you can just gallivant around living this funded lifestyle forever you're actually going to be worse off than where you started at the end of it because not only will you be back to square one without the passive income you'll have now lost two three four years of your life so where I think the the passive income 4our Work Week lifestyle business stuff is very useful is a way to bootstrap working on something bigger so if you know that you want to be a writer or a painter or a YouTuber or any of these careers with a long start time to pay your bills doing the lifestyle business first to fund you for two years while you get that going is actually pretty smart I mean same thing with a startup right if you can do the lifestyle business to give you some Runway to actually work on a startup so that you don't have to take money right away and don't have to dilute yourself that's an incredibly good use case but trying to fill the void with experiences and Novelty does get old really really quickly and you have to be ready for that and I don't tell people not to do it I don't tell them not to chase it because nobody believes you when you say that right they're like like yeah you got tired of it but I won't like I love traveling I love going to new restaurants I love doing these things and it's like yeah you love them because they're a break from the work that you don't enjoy doing and because they're occasional things when that's your whole life you're going to get bored really quickly but you have to go experience it to realize that that's the case but then once you have that little inkling don't feel guilty about it accept it say cool I checked this box and now I have this Runway to go do this big thing that I was scared of doing before but I now have the means to do and go do that thing nice yeah that's great um finite and infinite games you talk about this book I think in one of your YouTube videos from back in the day I talk about it everywhere this one my favorite book about it everywhere yeah I've I've never read the book but like what what should I understand or what should listeners understand about the idea of finite versus infinite games it so it's a wonderful book it's very short it's weird and philosophical uh but also very tactical in its own way and the core thesis of the book is that everything that you do in life is a kind of game right so this conversation that we're having for your podcast for your YouTube is a a game of sorts and there are two ways to think of games a f night game has a closed boundary it has a winner and loser it has clear rules uh and you there there's a way to like succeed or fail there's an end to it all these things right like a football game is itself a finite game because there will be a winner or loser at the end of it if I came into this conversation with a finite game mentality of I need to like win this conversation I'd be very focused on like you know slipping crypto confiden into everything that I talk about yeah exactly like buy the book right like you know if if you buy by the end of this podcast you're going to get 10 you know whatever right like it would you'd be milking it for all that it's worth um but if you take a more infinite game approach to something like this your only goal is to basically like have fun the the the reason you play an infinite game is to keep the game going it's to continue to extend the boundaries and the realm of play and if you're thinking about it that way where it's not transactional it's not a winner or loser you behave very differently because the only thing that I'm focused on right now is like having a fun conversation with you and if the book comes up great if it doesn't I also don't care because like we're friends we've known each other on the internet for years like we're just having a good time and like hopefully it's valuable to people too which means that we're going to have a lot more conversations over the course of our life like this this game that we are playing together of being you know internet creators book writers whatever can continue to expand infinitely as we continue to support each other over the course of our hopefully very very long careers and you can think of so many things in your life this way right like even even the the sports analogy right if you're constantly focused on winning this tennis match then your your emotion your identity and everything is tied to the outcome of each match but if the game that you're playing is getting better at tennis then whether you win or lose the individual game you're still winning at the infinite game of getting better and better or if your infinite game is just that I love to hit the ball right there's this wonderful jokovic interview where he's like my advantage is that I just love hitting the ball and that's why he's like one of the best tennis players in the world and if you can think about it that way then you're less attached to shortterm outcomes and you end up like winning more of these little finite games along the way because you're not attached to their individual outcomes and so he he ties this into so many things he ties it into relationships right like you know the the best way to uh to to find a partner to have a successful date is to not be trying to make it a successful date right is to like just be yourself and be interested in them and like have a conversation and not be you know checking the watch and wondering if you're going to get to go home with them and like trying to you know get something out of it right uh if you're you know if you're if you're working on YouTube videos right like playing the infinite game of trying to make each video a little bit better is going to pay off a lot more in the long run than being obsessed over every single video hurting hitting like a very specific metric you know me as a writer like I hope that this book does good I want it to do good but I'm in this for the rest of my life at this point and so I know that by focusing so much more of my energy on making the best book possible instead of on milking as many sales from it as possible that's going to set me up for many many great books in the future and over a long term that's going to compound to more and more interesting things so that book is just so good at showing you all of the parts of your life where you could be thinking on this more infinite Horizon instead of constantly being attached to winning whatever little thing you're in in that moment creating a baseline level of Financial Security such that you don't have to to to worry about where your expenses are going to be handled I do think has like a totally different like impact on stress and so and Patrick's gone into a lot deeper research on this at all kinds of levels but uh um I do think that um like having a thoughtful plan whether you do what's in you know Tim Tim Ferris is book uh for our work week Tony Robinson is a book of just like creating just like a basic financial plan and then creating the resources that gives you that fundamental security um is a is a wise approach and does change Baseline levels of uh concern this is like practically I don't think enough people talk about that needs to get done as a sort of a first Baseline step like if you're if you're at the point where you worried about paying your bills then obviously getting more money is going to make you way happier because now you've removed all that stress from your life yeah um and then I also I also have have witnessed people even after huge exits who will let a level of Lifestyle creep um go beyond where where their incredible means take them and um the fundamental concerns about do I have enough uh will sort of persist despite having created an incredible outcome okay so as you get more money kind of keeping your lifestyle costs fairly in check is an important part of that sounds like it's an important part of that kind of not being stressed out by money kind of piece yeah I mean if you're for example able to live uh after like like once you can get to a point where your expenses are 4% of whatever you have saved that is a fundamentally like different just as a general rule uh um you know as long as you're sort of thoughtfully investing um that's a secure you know and sustainable sort of you know place to be yeah wealth impacts you to the level of your insecurity that's really where it comes from like if you think about the the reason I I would posit that the $10,000 per month videos do better is not only because it seems more achievable but because $10,000 in passive income takes care of a massive amount of people and all of a sudden getting to 100,000 is nice to have and maybe there's a thing that they could think about that they would purchase but a lot of people thankfully are pretty well adjusted if getting extra $120,000 a year what I have found is that Wealth Beyond 10,000 a month 100,000 a month and there and so so on and so forth it really impacts or the changes that TS to impact you are at the level of where that insecurity is so to give you an example like I know I have friends who have had similar exits to us and they are numbers people meaning that number needs to constantly be going up yeah objectively the number does not need to be going up they're not purchasing anything that would need the the number to go up there's nothing that they want to buy that they would demand that particular number but that number gives them some sort of like purpose and this is not healthy it's just it gives them some sort of purpose and maybe they convince themselves that's the game that they want to play and they get enjoyment and maybe they actually do get enjoyment but there's something in their psyche there's something in how they were they were they were built or developed depending on the nature vers nurture debate that has now caused them to essentially need to chase that and I think that that's something that as you get get to these higher levels of wealth it it's you know it's again it's it's it's hard to empathize with but it is something that's interesting to kind of understand but the one thing a lot of people should realize if you're getting to the 10,000 you will look to the 100,000 as you getting close to the 100,000 you will look to the million and you need to kind of stop yourself and realize like ask yourself why and most people will kind of pull back because what I have found is wealth is not a replacement for purpose and often times people look at it as a replacement for purpose and they'll go chase something and then they won't necessarily feel something the reason I didn't feel something is because again I wasn't hugged enough as a child but also the journey you know this whole cliche of it's the journey not the destination was really really true so when the wire hit I didn't feel like I I you know won the lottery because it was like yeah like maybe the numbers are bigger than I thought that they were going to be but I just did all this work for 10 years and so there should be some outcome right so I was like that's the thing so it wasn't this surprise and to give a little bit of an anecdote so before I sold the company and I was debating whether we should sell the company or not I talked to 30 other Founders and I asked them you know and they all sold their companies for different amounts of money um asked them would you sell again 15 of them said yeah absolutely it was the best decision get the bag Etc the other 15 said they wouldn't and of those 15 eight seven or eight went with the company post sale meaning like they sold the company and then they worked at the company that they bought them um and they said a lot of things about it was miserable blah blah blah blah blah the other seven or eight didn't go with the company and that group at least qualitatively was the most miserable they had all this money and then they were sitting there and they're like they had lost their purpose yeah and they were like well I thought the money was important and they drisk their lives bought a house whatever it is but now like I lost the thing that I was doing and now I'm just going to try to go rebuild that but I had already built it so what am I doing and then unfortunately of those seven uh three or four of them became um substance abuse like drug addicts or alcoholics they're all good now but it was it was pretty intense for those three or four and so I think that wealth isn't a replacement for purpose is a really really important thing to keep in mind and unfortunately it's probably one of those wisdom things you can't really learn it until you experience it but you'll listen and be like oh that bearded guy said this and so hopefully it saves you a cycle or two I had to feel it myself as well but I want to tell a similar story that so I had a uh a mentor in my life he's now in his 70s and he had the wisdom in his early 20s to say uh I want to have a two-part life uh he wrote A business plan for his life at age 23 which was by age 40 he wanted to uh become an entrepreneur build a business and have an exit by age 40 and he named the number he wanted to exit for back when he was 23 and it was he thought felt like it was reasonable it was uh achievable let's call it in today's uh dollars maybe uh High single digit Millions okay and he's had the wisdom at age 23 to say I am going to say that's enough for me and I will always potentially well adjusted at 23 I never would have thought this 23 so he he he uh he uh is actually at Harvard Business School while he writes this plan uh um he got in on like an engineering scholarship and you know gonna say he's had HPS at 23 as well uh and he writes this plan he goes ahead and he executes it at age 39 a year early he sells for and he hits his number and um he shifts into the second part of his career which was purpose-- driven he de decided intellectually he always wanted to he loved the law he went to law school in his early 40s and he became a lawyer who basically took on cases to sort of help uh uh you know defend people who uh and um is one of the most like sort of purpose-driven and happy people in his life and now he's running for president but why how did he pull it off because I've thought of like how does he pull this off right because I'm here we're in this amazing place right and like two rows down there are houses that are three times as much that I could be pulled to want more right and so I try to remember this guy because uh um the purpose part of his life has guided him I think the way he's stayed on track to me is for two reasons uh and you're an atomics H habits fan so I I think it's in there so number a littleit number one he defined the his identity in life later as having living in you know consistent with this purpose of having a second career and helping people number two uh he knew that his environment would matter he moved out of like uh the town he lived in in St Louis after he had this exit he moved to Wyoming where the currency uh of his community was going to be Health being active and you know not the rat race of you know the the the business Community he was in about what are you doing next uh what have you so he literally made his environment be thought ful surrounded with people who were not going to sort of challenge his intention of more more more more so God he's yeah that story uh I think has a lot of lessons that 20 years before you know James Clear was putting this out and how it applies to money he lived just makes me feel broken but I think that what's really interesting about that you and I were talking about this is like that like you and I have done an incredible amount of like introspection over the past couple years years and and you know if you're watching this you probably are someone who does introspection obviously you've done a lot of introspection and I think that that that makes me spark a question in my head that we're not going to settle unfortunately here which is like can you get to that level of like peace or is it something that it's almost easier to assume you can't get to that level of Peace therefore how should you live your life right so I've done what I mean is I've done a lot of introspection the past year to get to like what drives me what motivates me what is the next thing do I need a next thing all of those other things but I don't know if I can ever get to that and it's limiting belief at least but I don't know if I can ever get to that level of Peace like the best thing I've gotten to is I like increasing like concentric circles of Freedom meaning like I am able to do this now I want to um try to solve this small scale problem in my town and then I want to be able to solve a larger scale problem like that type of stuff motivates me but I still have this like energy where um it's it's it's it's an anxiety where there has to be something more like there isn't a contentment and it could be an age thing I don't have kids yet all these other things but yeah it's a really like I want to meet this person I Hope You intro me I just want to like go and drive up or fly up and be like just tell me tell me how you got here like that type of a thing I mean but one of the things that I don't think he would put it in these terms but uh he would say like he hacked his brain back to Identity and said part of who I am is going to be somebody who like like thinks this way does you could always want more and so if he and he's public about that it was literally written into a paper that his Professor saw right and like publicly knew right so he could um if he was going to go p in the pursuit of more at least financially then um he would be essentially living in contrast to his identity yeah uh and you know it's something that I thought about related to like some of the things we were talking about for you this weekend is like if your clearly defined identity and purpose is measured totally on impact or spending your time on teaching or or or or what have you and it's explicitly not Financial Beyond a certain point yeah and then that's public uh um one of the benefits of creating and saying stuff publicly is it can be scaffolding to keep you consistent uh uh yeah uh and in in ways like before the internet and social media with the community and people who he had in his life he put that out there which created a little I think like identity scaffold in support I think the the quick getting to the point where finances are not driving decision making as quickly as humanly possible is the path now one step or two steps down from that is where I would consider myself and five steps down from that is where this friend you're describing is where I'm at is like I don't have to do anything but there are things that I would like to unlock with what I have or what I could get Etc and I think that that first level is where everyone can get either by getting content with you know their 40,000 or 40,000 pound you know salary per year or um you know doing some of this introspection of like what's really important and you and I have talked a lot about this the past year of like how important it is to just think about what do you want yeah and then work backwards and that's what it sounds like this this person has done to a level that you know very few people even get close to which is really really thankful all right so that's it for this week's episode of Deep dive thank you so much for watching or listening all the links and resources that we mentioned in the podcast are going to be linked down in the video description or in the show notes depending on where you're watching or listening to this if you're listening to this on a podcast platform then do please leave us a review on the iTunes Store it really helps other people discover the podcast or if you're watching this in full HD or 4k on YouTube then you can leave a comment down below and ask any questions or any insights or any thoughts about the episode that would be awesome and if you enjoyed this episode you might like to check out this episode here as well which links in with some of the stuff that we talked about in the episode so thanks for watching uh do hit the Subscribe button if you aren't already and I'll see you next time bye-bye

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