How to Scale in a Volatile Environment [Part 2 of 2]

This week, I will be presenting 15 strategies on how to scale your business or investment portfolio in a volatile environment. Below are the topics I will be covering, but each of these deserves a one-hour webinar or newsletter post on its own, so we won't be able to fully define and go deep into each strategy in this newsletter. This is how we navigate the jungle; what we know works, and I hope it is the most valuable thing you read today. If it is, please share it with your network.

1. Finding the Intersections (3 circles) + 2 More Criteria: Jim Collins has a recommendation in his book Good to Great that you should look for the intersection of things you are highly passionate about (love), can make a lot of money at, and you are naturally very good at or have deep experience in. This way, you don't waste time on things that won't make you money, or you won't be the best at. I also recommend you add to this criterion of not entering niches that are overly competitive, and you ride tides that are inevitably rising and will have 10-100x+ bigger in the future.
2. Cuban - Outwork & Outlearn: In volatile times, it can help to remember Mark Cuban's statement that you don't need all the capital in the world. If you pick a niche and outwork and outlearn everyone in that niche, you will score some points and figure it out; you only need to be right once. Michael Bloomberg says you will win if you do what you love, find a way to add value, and do more work in that area than anyone else. If you do not just work hard but work hard on working smarter and work hard, you will run circles around everyone else in your area.
3. Quality In, Quality Out: Who is your mentor? What books do you read? What podcasts do you listen to? Who are your closest friends or business contacts? Who you spend time with and what information you let into your brain determines your output. Your network influences your net worth. When I interviewed Tony Robbins, he said that because of the power of proximity, he produced $400M in profits from one transaction due to this law. I'm not reading any books personally until I have read all 242 books authored by billionaires, and I am 85 books deep into that process so far. Warren doesn't read 8 hours a day because he has nothing better to do; he reads because there is nothing better to do. One of the most common traits of billionaires is that they are voracious learners.
4. Extreme Focus - Superpower: Peter Thiel suggests that extreme focus is a superpower, and lately, I have been applying that. We have had partners who did not appreciate our help and did not honor their commitments, and we have been quick to cut bait with anyone who is a waste of our time. We want no leaky buckets in our business; focus on what works and scale that. Steve Jobs says focus is not just focusing on what is most important it means saying no to things that for sure meet your 3 circles, for sure you could pull off and not just make money but make a lot of money, but you still say no, because it would slow you down on your game-changing project, that is by far most important.
5. Create an Unfair Advantage: We have found that when we can position ourselves strongly, business flows in our direction. I was taught early on by mentors, including Eben Pagan, that if you want to go fishing, you could go to the lake and throw a spear at a random fish or two swimming by. You may catch a fish doing that. Or you can study the lake, figure out where the waterfall is nearby that fish are jumping up, position yourself on that waterfall like a Grizzly Bear, and have food coming towards you vs. chasing things. If you study the best in your space, outlearn, outwork, focus on the 3 circles, leverage choke points, use brute force reciprocation, and implement several of the ideas in this newsletter today, you will have an unfair advantage over others or your former self.
6. Most Fun Year of Your Life: During COVID, I started focusing on having the most fun year of my life. First, who doesn't want to have the most fun year of their life? Also, running a business that doesn't make money is not fun. Hanging on to an employee who doesn't fit your culture or bad clients is all not fun. Having the most fun year of your life demands that you expect excellence, as Ray Dalio always says, face reality and address it, and adapt to what needs to be done. Those who are ultra-wealthy do not put up with bad partners, business models, niches, employees, or cultures. They change them, or sell them, or close them down.
7. Brute Force Reciprocation: I found early on in life that taking massive action, experimenting with 20 ways to approach a niche, and trying all different angles on those 20 paths have unlocked great rewards. In high school, I cold-called every computer company in the Yellow Pages, and one gave me a job interview. They hired me to create websites, paid me $20/hour at age 17, and gave me critical skills at the same time. I then graduated from a state university and did not accept the average $36k/year job expected. I instead interviewed everyone in the Chamber of Commerce in my city until I met an alumnus who said sorry, we can't hire you, Richard, you don't have 7 years of experience. I told her to hire me for a day, if I was horrible let me go, no hard feelings, but I will work for free until you know I can do this work as I know I can. I de-risked it for her completely (besides a bit of her time). She gave me a shot, ended up paying me from Day 1, and I made $100k+ in my first year out of school, more than my professors who taught me the month before at school. Did I get lucky? I for sure created my own luck if I did. I have done this over and over and over again. When I started my blog on investments, I found that topics on family offices, investors, and capital raising were more popular than those on hedge funds. I then wrote up systematically 2 blog posts on each of the 500 top keywords searched for in the niche, and my site started getting 3k, 5k, and 7k hits a day and I got on the front page of the Boston Globe. It was through trying lots of experiments, hard work, and variations of strategies that I broke through. I have a dozen more examples of this, including how I have interviewed 40+ billionaires now that I don't have room to write out here. This strategy is perhaps the most powerful and has influenced my life more than the rest. If you can add value to someone else first, make something 0 risk, take away their objections, find a high-value goal, and then work hard trying 100 ways to get it done, you are very likely to break through.
8. Choke Points: Mastering the Rockefeller Habits by Verne Harnish is a great book that talks about acquiring strategic choke points for your business. A choke point is something that, once you acquire it, it is hard for others to acquire that same choke point, and it gives you momentum. The best choke points give you distribution, exposure, leads, clients, capital, or something that is the bottleneck in your business currently. If you can acquire many choke points that address the #1 issue in your business, which slows down both you and your competitors, you will have a significant moat around your business. This strategy has changed my life, and we have found each time we acquire a choke point, it helps us move on to obtain the next that much faster. Please read Verne's book to learn about this topic or see our hour-long Choke Point webinar on the topic on the member portal of Family Office Club. I like teaching these strategies as it reminds me of how we became a success so we can extend our lead and continue to grow.
9. Be Institutional Quality: Have a proper logo, brand, one-liner, website, and materials. Why should anyone else take your business seriously if you don't? It should go without saying that many people operate with a clip art logo and poor materials in the investment industry, and you are killing your chances of being taken seriously. Make sure you have buttoned up everything if you want to grow faster.
10. Ultra-Healthy Investments: Invest in your own health; you will get more done per day, grow your ability to focus, get sick less often, and feel better. You can't have the most fun year of your life if you are always sick. I have many clients worth $10M+ or $100M+ who are so excited about business they work constantly but never on their health. They will die early and likely be taken down by sickness more, and nobody around them wants that. We woke one client up to this, and he lost 60 pounds in the last 18 months and helped dozens of other members of our investor club (Family Office Club) focus on their health. We have a Private Investor Playbook that is a free PDF with 11 investor tools, and it includes a tool on becoming ultra-healthy in 28 different ways; if you would like that, please comment below.
11. Have a Clear Vision (Arnold): If you have not read "Be Useful" by Arnold Schwarzenegger, you have to. It is pure gold. I read it, and then read it to my kids I thought it was so valuable. If you haven't seen the Netflix documentary on Arnold you need to watch that as well. In the book, he makes it very clear what he did was no accident. He was intensely focused on a vision for himself. He worked very hard to make it happen, and his ability to envision exactly what he wanted to do was a huge part of his ability to accomplish it. Watch the documentary, read his book, and ask yourself how clear your vision is for what you are looking to get done.
12. Reset & Orient Your Brain Daily: I have a one-pager I review every morning; it includes my monthly, quarterly, and annual goals as well as all of my one-liner statements that I use to program my brain. I basically brainwash or re-orient myself daily to what I know I need to care about and how I know I need to act to be the best version of myself. This costs nothing, yet almost nobody does it. I would highly encourage you to try this, and it will help you get more done every week.
13. Proactive Data Runs: Every large private equity group identifies its universe of potential acquisitions, systematically reaches out to those asset owners, and works that list and originate or "finds" deals to close. What I have found, though, is that this process can be done for $1.5k-$5k/year plus the time of an executive on the team, yet almost no wealthy families under $500M ever use the strategy. You don't need to be ultra-wealthy to do things that work for them and for private equity shops. The idea here is that whether you are looking to buy dry cleaners, bath bomb companies, or stem cell centers, you find the 180 of them that exist in your area and put their contact details into a database (using a cheap contractor). You then reach out, tell them about your previous exit or expertise in the space, that you want to invest or buy their business, and reach out to 180 of them systematically. You then uncover deals not available to anyone else at valuations that are not offered to others who don't provide your level of strategic value. We have closed dozens of deals doing this, and it is very effective.
14. Structure Trumps Strategy: Many times I have been told to go away when acquiring assets, closing a deal, or negotiating a transaction. We then change the structure and get the deal done. If you structure a deal well, you can align all parties, de-risk things for one party, decide who gets the cash flow first, who gets a preferred return, decide if anyone gets collateral in the deal, change the timing or optionality in a deal, and completely reverse the likelihood of someone saying yes. If you have not gone down the rabbit hole of 50 ways you can customize a transaction or structure multiple share classes in an LLC for investors, you are losing deals to those who know their craft in this area. We discuss this at our investor club meetings and events. It took us 250+ communications and 12 years to acquire Billionaires.com, and it would not have happened without a creative structure.
15. Stacking Mental Models: This series of strategies that we are using to scale is like a food buffet - you have probably seen some of it before, but I'm 100% sure that 95% of you have not seen all of these strategies and do not use them. You are not expected to use all of them; we try to keep them all in mind constantly. Billionaire Charles Munger says each of us must keep 100 mental models in our head at one time - these are 15 of the models that help us move forward through tough times. Stack on top of each other several of these and they become even more powerful than on their own. These are the types of ideas you get in the Family Office Club, we discuss these in-depth at our private investor masterminds and they have changed my life.

These are the strategies we use to grow our investment portfolio and operate businesses during these times. I know many of you are facing challenges recapitalizing assets, replacing short-term or variable-rate debt, buying out impatient investors, and sticking to your guns on some deals that you hope you can stay in through these volatile times without selling.

Staying high-action, positive, and able to re-capitalize, restructure, advance, produce new income streams or assets, and make progress on your quarterly and annual goals is critical if you want to thrive while others are trying to merely survive.

Please comment below on what moves/strategies you are making, and please share this post if you think someone in your network could benefit from it.