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Avoiding distractions and the shiny object syndrome in entrepreneurship

8 min read

From: alexhormozi

The speaker emphasizes that achieving significant wealth, such as taking home more in a year than the CEOs of McDonald’s, Ikea, Ford, Motorola, and Yahoo combined by age 20s, or crossing $100 million in portfolio revenue by age 33, stems from a deep understanding of how money truly works, particularly by avoiding distractions and focusing on leverage [00:00:04] [00:00:26].

The discussion centers around three main points:

  1. How making money really works.
  2. Why new opportunities (“new stuff”) can make you poor.
  3. Why being “better” is the true path to leverage [00:01:12] [00:01:14] [00:01:16].

Redefining “Work”

The conventional definitions of “work” — force times distance, time input, or sheer effort — are largely irrelevant for knowledge workers and entrepreneurs [00:03:08]. Many claim they “outwork” others by putting in more hours, but this is capped by time and physical ability [00:03:11] [00:06:37].

The speaker’s definition of work is:

“Work equals outputs” [00:04:07] “Outputs equal volume times Leverage” [00:04:12]

In simpler terms, this means the number of times you do something multiplied by how much you get out of each time you do it [00:04:17]. Working faster means achieving more output per minute [00:04:25]. While volume (doing more) is capped, leverage (getting more from each action) is “uncapped” [00:06:45].

To truly “outwork” the competition, one must “out-leverage” them [00:11:14]. Leverage is the difference between what you put in and what you get out [00:10:51].

Why New Ventures Make You Poor (How Not to Get Leverage)

Avoiding distractions and shiny object syndrome is critical because pursuing “new stuff” or multiple ventures simultaneously can actively prevent you from gaining leverage [00:11:13] [00:11:24]. This often manifests in five ways:

1. Uninformed Optimism

This is the first stage in the “stages of change” or “stages of transition” [00:11:56]. When a friend talks about making money in a new venture, people often feel inadequate about their own path and immediately consider switching [00:12:12]. This feeling arises because they are only hearing the “Instagram reel” — the highlights — not the full reality of the challenges involved [00:12:34].

Transitioning to a new venture leads to “informed pessimism” as the true difficulties become apparent [00:13:03]. When time elapses, and no money is made, it can lead to a “crisis of meaning” or “valley of despair” [00:13:20] [00:15:01]. Many entrepreneurs then jump to another “uninformed optimism” phase with a new idea, repeating the cycle [00:14:04]. In entrepreneurship, restarting due to a lack of focus can cost years [00:14:38]. The “boss” to be beaten is the ability to stick with one thing [00:14:55].

2. The “Construction Buddy” Story

Many entrepreneurs, especially those making less than $3 million, fall into the trap of diversification to “not leave money on the table” [00:17:26]. A prime example is a roofing business owner who also did general contracting and flipped houses [00:17:18]. This diversification, while appearing to capture all opportunities, leads to distraction [00:17:53]. The true “money left on the table” is the focus not given to the single, most important venture [00:18:18].

Successful entrepreneurs like Diane Hendricks, the wealthiest self-made woman, focused solely on roofing supplies (ABC Supply), not house flipping or general contracting [00:18:28]. Building something “epic” requires doing the same thing for an extended period without believing you’re “smarter than you are” [00:19:26].

To avoid making money:

To make money, do the opposite:

Ordinary business done for extraordinary time creates extraordinary results through compounding [00:21:24]. If your current “vehicle” doesn’t compound over time, change it [00:21:33].

3. The “Magic Wand” Story

This addresses the belief that one must wait for a business idea to “take off” before fully committing [00:22:06]. Any single business — roofing, general contracting, house flipping — could become a billion-dollar venture [00:22:25]. The key is to pick one and commit. The act of picking and saying “no” to other opportunities is what enables growth, not the specific choice itself [00:22:43] [00:22:46].

Trying to do multiple things simultaneously is arrogant, as it’s impossible to compete with someone who dedicates all their time to one thing [00:22:58]. Focus means “one thing, all in” [00:23:37]. The “magic wand” thought experiment reveals that growing a single, focused business would be “really easy” if all other distractions were removed [00:24:14]. The riches lie on the other side of a few hard conversations (e.g., firing people, shutting down projects) [00:24:41].

4. The “Woman in the Red Dress” (Shiny Object Syndrome)

This metaphor from The Matrix represents everything attractive and distracting in the world [00:25:07]. The ability to say “no” to these new, alluring opportunities must be continuously exercised and gets harder at higher levels of success [00:25:21]. As you grow, the “woman in the red dress” (new opportunities) becomes more seductive and attractive, requiring stronger discipline [00:26:39] [00:26:40].

The speaker admits to making this mistake by starting a supplement company when his main business, Jim Launch, could have been scaled further [00:26:04]. This spread his attention thin, even if it led to increased revenue [00:27:04]. To become a person who can say no, you must act like someone with those character traits, even if it feels bad [00:27:47]. Patience is not the absence of impatience, but acting patiently despite feeling impatient [00:28:37].

The Solution: Focus and “Better is Leverage”

New distractions kill leverage and keep you poor, while focus multiplies it [00:29:44]. The third principle is that “better is leverage” [00:30:00]. Improving existing processes, products, or services (e.g., call scripts, content, websites, offers) allows you to get more from what you put in [00:30:13] [00:30:18].

The Power of “Boring”

“Better comes from boring” [00:31:29]. Many entrepreneurs are driven by an emotional need to quit discomfort, receiving positive reinforcement when they start something new [00:31:01]. However, this same impulse can cause them to abandon a potentially billion-dollar opportunity when it becomes “boring” [00:31:08].

Boring but better activities include:

  • Weekly split-testing landing pages [00:40:43].
  • Weekly split-testing emails [00:40:49].
  • Creating new ads before they are needed [00:40:53].
  • Daily role-playing with sales and customer success teams [00:40:59].
  • Taking more interviews to find the right person [00:41:23].
  • Spending more time making lead magnets and offers better [00:41:43].

These tasks, though unsexy, are the secret to success [00:41:53]. Most people know what they should be doing but don’t do it because it’s not stimulating or exciting [00:32:25] [00:32:27].

Taking Your Own Advice

A powerful mental model is to ask: “If I were coaching me right now, what would I tell myself to do?” [00:34:41] As a coach to yourself, you have all the information and no other agenda [00:34:44]. Often, the answer is not what you are currently doing [00:35:04]. Taking your own advice, rather than believing you’re a “special snowflake,” leads to more money [00:35:15].

The Speaker’s Transformation

The speaker’s own entrepreneurial journey had two distinct periods:

  1. Distracted Period: Owning nine companies (e.g., six gyms, dental agency, chiropractor agency) while being broke [00:35:43]. This felt good for the ego but not the bank account [00:36:20].
  2. Focused Period: Advised by his partner, he recognized Jim Launch was the most profitable venture with the least time commitment [00:36:30]. Over 90 days, he sold five gyms, shut one down, and closed two agencies [00:36:51]. Twelve months later, the business went from zero to 4.5 million a month, all from focusing on one thing [00:37:03] [00:37:09].

Focus makes it unreasonable to fail [00:37:22]. Doing one thing for an extended period, better than anyone else, ensures success [00:37:24]. For example, taking 4,000 sales calls makes one an expert, regardless of formal training [00:37:33].

Many fail because they prioritize moving fast and taking shortcuts, ignoring the “invisible hand” of negative word-of-mouth when their product is poor [00:38:14]. True success comes from patiently building a solid foundation, even if it means breaking even for the first year to get the product or service “right” [00:39:54].

“The difference between a seven out of ten book and a nine and a half out of ten book is about 20 times the work… but realistically, about a thousand times the sales.” [00:43:21] [00:43:32]

This highlights that putting in significantly more effort to be “better” can yield exponentially higher results, demonstrating true leverage [00:43:42].

An opportunity is often missed because it “dresses in overalls and looks like work” [00:43:57]. By committing to do nothing new but only what you already know you should be doing, and consistently improving, you can make more money than imagined [00:41:59]. This requires divorcing actions from outcomes and focusing on the repetitive act that forges who you are [00:43:07].

Conclusion

To succeed in entrepreneurship and achieve significant growth, it is essential to:

  • Understand that true “work” is about generating outputs through leverage (getting more from what you put in).
  • Avoid the “shiny object syndrome” and the trap of uninformed optimism by committing to one thing.
  • Embrace the “boring” but highly effective tasks of improving what you already do.
  • Focus on a single venture for an extended period, making it unreasonable to fail [00:50:56] [00:50:58].
  • Line all actions to a single outcome and keep working at it; success will look effortless from the outside but will come from years of saying “no” to everything but what matters most [00:51:03] [00:51:09].

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