From: alexhormozi
Growing businesses is difficult because it defies common expectations [00:00:11]. The primary challenge lies in maintaining a singularity of focus amidst a constant influx of opportunities [00:00:15]. As a business expands, the opportunities presented become larger and more tempting, making it increasingly difficult to decline them [00:00:20].
The “Woman in the Red Dress” Metaphor
The concept of distractions and new opportunities is likened to “the woman in the red dress” from The Matrix [00:00:55]. In the film, Neo is distracted by a woman in a red dress during a training exercise, only for her to transform into Agent Smith pointing a gun at him, symbolizing a hidden danger [00:00:25].
At every stage of business growth, these “shiny object” opportunities become more attractive [00:01:00]. Initially, one might have to decline thousands of opportunities, then tens of thousands, and eventually hundreds of thousands [00:01:04]. The ability to say “no” must be relearned at each new level [00:01:07].
Innovation vs. Execution
True business success is not primarily about constant innovation, but rather about diligently executing the known basics [00:01:18]. Innovation is important to a very small degree, but the vast majority of success comes from doing what you already know you should be doing, but aren’t [00:01:19].
One example illustrates this: a friend with 60 different businesses made about eight figures annually [00:01:26]. When asked how easy it would be to grow one business to $30-50 million if all others were eliminated, he admitted it would be “so easy” [00:01:41]. This realization led him to shut down multiple ventures to focus on the single biggest opportunity [00:01:57]. Figures like Mark Zuckerberg did not engage in side hustles; they focused on one thing and pursued it completely [00:02:03].
“Success comes down to doing the obvious thing for an uncommonly long period of time without convincing yourself you’re smarter than you are” [00:02:22]. - Neil Strauss
It’s the meticulous attention to details and deep understanding of how to do something that pays dividends [00:02:28]. Businesses often fail to perform basic tasks well, such as:
- Being present on every relevant platform [00:02:39]
- Consistent email marketing and providing value [00:02:44]
- Building out SEO [00:02:48]
- Developing comprehensive sales training for teams [00:02:51]
Being “advanced” in business means consistently doing the basics without fail [00:03:06]. Big businesses perform the same actions as small businesses, but they execute them better and rectify their shortcomings [00:03:16].
The “Bucket” Analogy for Business Growth and Scaling Strategies
Consider a business as a bucket, with water flowing in (traffic/eyeballs) and the bucket holding what you keep [00:03:23]. To increase the amount of water (revenue/customers), the first step is not to get more buckets, but to fix the holes in the existing bucket [00:03:32].
The “Better, More, New” Framework for Business Scaling and Success
This framework guides growth and scaling the unscalable:
- Better: Improve what you are currently doing [00:03:51]. This is the lowest-risk opportunity [00:04:04].
- Follow up faster and more [00:04:08].
- Create better copy and creative [00:04:10].
- Optimize your site [00:04:12].
- Hire better people, train them better, and implement superior management and incentive systems [00:04:12].
- Fill all the known gaps (e.g., more emails, more outreach, more content, better sales team training, improved customer onboarding, better customer support cadence) [00:04:22].
- More: Increase the volume of what’s working well [00:03:51]. This comes after “better” is maximized [00:04:00].
- Go from one piece of content a day to five [00:05:34].
- Scale from one sales representative to five, or one video editor to five [00:05:37].
- New: Introduce new initiatives only after “better” and “more” have been fully explored and optimized [00:03:51].
Many entrepreneurs learn the wrong lesson early on: that starting new things brings positive results [00:05:01]. However, beyond the initial product-market fit, continuing to pursue “new” can become detrimental, leading to punishment rather than reward [00:05:13]. The innovation phase ends once people start buying what you’re selling; then, the focus must shift to “better” and “more” [00:05:22].
The Danger of Diversion
Businesses that consistently improve what they do and do more of it will grow by default and outperform competitors [00:05:46]. In contrast, entrepreneurs who divert resources from their core business to start new ventures often see their primary business wither due to atrophy and lack of improvement [00:05:51]. Costs (media, talent) rise, and without continuous improvement, the business degrades relative to the market [00:06:23]. This leads to multiple “buckets” with holes, without the capacity to fix any of them [00:06:43].
Strategy vs. Execution: The True Challenges and Lessons in Scaling Business Operations
While strategy might seem exciting, the real challenge in business growth strategies and challenges and leverage and scaling in business growth lies in execution [00:07:04]. The concept of delivering dry cleaning that is always clean and on time is not complicated, but the execution of it is where most businesses fail [00:07:12]. People allocate too much attention to new strategies rather than focusing on the obvious truths of consistent delivery [00:07:23].
Focus in Niche Markets
Many marketplaces, even “boring” ones like dry cleaning or lawn care, offer immense opportunities [00:08:00]. Competition is often less intense in these areas compared to high-tech sectors, where “smartest people in the world” are trying to build the next platform [00:08:06]. By simply doing the basics, but executing them exceptionally well, businesses can dominate [00:08:11].
“What makes them basics is how hard they are to understand but what makes you Advanced is how well you execute them” [00:08:18].
For instance, in a sales team, the strategy of making calls is simple [00:08:22]. The advanced execution involves meticulous training, recruitment, incentive structures, regular call reviews, and performance tracking (e.g., leaderboards) [00:08:28]. These “boring” details are what truly grow a business [00:08:40].
A “mercenary CEO” with a thick Long Island accent advised against “fancy trick plays” in business [00:09:23]. Instead, he advocated for “simple backyard football” – consistent, steady yardage [00:09:50]. You don’t need fancy plays; you need to be willing to gain consistent yardage by executing fundamental tasks like providing clean clothes, fast service, and good customer interactions [00:10:01].
The Compounding Clock and Long-Term Focus
Leadership in scaling a business requires a deep understanding of what foundational “needs to believe” will remain constant over an extended time horizon [00:11:18]. For example, people will always want things fast, good products, and good service [00:07:43]. Focusing daily on doing these things “better” and “more” will lead to compounding returns [00:11:23].
This commitment is spiritually challenging because it requires unlearning the initial entrepreneurial lesson of being rewarded for starting new things [00:11:27]. Instead, true scaling comes from doing the same thing, but doing it significantly better than everyone else, which takes time [00:11:35].
It is arrogant to believe one can outcompete others who are fully focused on a single venture while splitting one’s own focus across multiple endeavors [00:11:42]. A dedicated lawn care business owner, driven by a deep mission, will always outperform someone juggling Drop Shipping, lawn care, consulting, and NFTs [00:11:57].
A common pitfall is the idea of starting multiple businesses to “see which one takes off” [00:12:41]. This approach typically results in none of them taking off, because any of them could succeed with singular focus [00:12:44]. For example, a business owner doing $4 million annually in roofing was also involved in real estate flipping, general contracting, and windows [00:12:57]. Despite claiming to be vertically integrated, this diversification was merely distraction [00:13:17]. The biggest roofing companies are multi-billion dollar enterprises, achieved by focusing on one thing with immense depth and attention to detail [00:13:19].
If you are not making money in your ventures, it’s likely due to a lack of deep understanding [00:13:41]. Success is often correlated with knowing your industry better than your competitors [00:13:48]. The goal is to rapidly eliminate ignorance in one area, rather than spreading it across multiple, preventing the compounding effect that comes from mastery [00:13:51].