The Exchanges

Q Like I feel like a lot of people from this, you know, listen to the show, come steal an idea. They're doing a hundred K a month. Um, they're feeling like they're on top of the world. Um, and then churn just gets worse and worse. How do you think about churn, and how do you, like, is there a scientific way to combat churn?

A So I think when you, it's kind of like when you're riding a motorcycle, what is the first thing they teach you is like, don't look at the wall. And I think that oftentimes the, the big four letter word and startup ecosystem is churn. And I think the problem is when you think about churn as your main focus, it ends up thinking about the opposite, which is actually what you really should be thinking about, which is loyalty. So loyalty is the way I measure it is net revenue retention, which is not just how do we avoid churn, but rather how do we get more loyalty from each existing cohort? Every three percent increase in net revenue retention doubles the company's valuation.

AI assessment note: “measure it is net revenue retention, which is not just how do we avoid churn”

Q So when you're doing zero to one, should you be focused on net revenue retention? Or like, what are the things that you should be focused You're focusing on zero to one versus when you're scaling.

A I think the biggest mistake that a lot of founders make is they, they try to jump right into growth before they think about retention. I think it's so much easier to grow a business when you have incredible customer loyalty and then you're able to then throw gasoline on that fire. I think a lot of founders make the mistake of going, well, we've got something that's kind of break even. Let's just go and market it like crazy and eventually we'll grow. What ends up happening? You have massive churn. Um, it's hard to profitably grow. As we know, acquiring customers becomes harder and harder every single month. I think Sam, Sam Parr mentions like growing on, on these platforms is like buying real estate beachfront, but rent goes up every 18 months. So it becomes harder and harder. And so I do think you need to focus on retention upfront first and foremost before you ever worry about promotion. So I do think it's important. Yeah.

AI assessment note: “you need to focus on retention upfront first and foremost before you ever worry about promotion”

Q bunch of projects, I'm like, oh my God, oh my God, he's, I know what he's thinking. I know what he's thinking. Focus, Greg, focus. So how should people think about, you know, a lot of people are into product studios now launching multiple products. I call them multi multi-preneurs. How should people think about, you know, having multiple cash flowing businesses? Um, does it work? What are your thoughts?

A So this goes back to what we were talking about in the beginning of this conversation, which is, are you a founder or are you a CEO? And founders found, builders build. And if you know this is your zone of genius, this is actually the most valuable part of the overall value chain. If you can get something, if you can discover flight, like that more than anything else is the most valuable part of the overall ecosystem. The problem that most founders have is they discover flight and then they abandon it to go start the next thing. Right? They spent 2000 years discovering flight, and then they go, okay, well, like, let me go build, let me go invent the helicopter. Where it's like, the last hundred years is actually where the exciting parts of flight happened. So you have to hand off the baton. You have to successfully hand off the baton. And so if, if you have discovered flight mid seven figures, your only job right now is go, am I the right CEO for the next phase of growth? And if not, the only thing you should be doing is either hiring a COO or a president, To execute on your vision or recognize this is actually not a business I'm very passionate about and hire a CEO to take your vision to the next level. Once you do that, go back to tinker mode because that's actually way more valuable for your skill set. But the problem that most founders face is they go right back to tinker m…

AI assessment note: “Once you do that, go back to tinker mode because that's actually way more valuable”

Q So I buy that. A key component of it, though, is figuring out what your zone of genius is, and the question is, like, how do you identify that? How do people identify what their zone of genius is?

A When you look at your calendar, where do you get excited versus what do you push off? If you get excited for certain calls, if you get excited for certain areas, where are you tinkering in the morning before you have any meetings? That's your zone of genius. If you find yourself dreading a sales call, that's an area for you to get out of. If you find yourself excited in order to tinker with the latest AI tool or finding yourself excited to jump on a customer call, not a, not a sales call, but an existing customer, you're probably thinking more in terms of delivery. And so ask yourself, where does your motivations go when you have an empty calendar?

AI assessment note: “When you look at your calendar, where do you get excited versus what do you push off?”

Q Or should I give up on that idea right now? Or.

A Well, here's the thing. If you give up the effort, let's say, Hey, I'm happy to do it, but I'm only going to do 10 K of an investment. And I don't want to be on the board. I don't want any advice. I'm not going to promote it at all. Well, you're also reducing the impact. Because you're not going to get as much equity. You're not going to get as much impact as a result of it. And so you have to throttle how much effort it's going to require in order to do this with the impact that's going to require. So of course, who wouldn't love a 1000 out of 1000 impact for a zero effort? It's like, if you could just respond, yeah, let's do it. Here's a hundred bucks and you're going to get a 50,000 dollar equity stake. Of course it'd be amazing, but that's not the case in most scenarios. And so you do have to adequately Rank these things. And then more importantly, you have to rank it compared to all of your other opportunities. Someone like you, Greg, you've got hundreds, maybe, you know, thousands of ideas sitting in your DM, sitting in your brain. I know how your brain works. You've got tons of ideas, even with your existing businesses. How does this rank compared to everything else?

AI assessment note: “you have to rank it compared to all of your other opportunities.”

Q So what advice do you have for me?

A So one of the most important things that a CEO should be really good at is making decisions. And one of the main frameworks that I use for decision-making is I call it the shield versus sword, which is how much effort is this acquisition going to take Versus what is the potential impact that it has on my business? So it's this impact versus effort matrix. That's super important. I'm always thinking about what is something that is super easy for me to do. That's going to have a massive impact on my portfolio or on my business. When I'm looking for massive impact with low effort, those are the low hanging fruits. I'm always going to be optimizing for those things. They don't require a lot of shield. They don't require a lot of sword. They're super low hanging fruit. And I'll typically rank these one to five. How much effort is this going to take? And then how much impact is this going to have in my business? And I'm looking for 10 out of 10 ideas. I want five in terms of effort and five in terms of impact because it's super easy to do and it's going to have a massive impact on my business. For me, something like this, just gut feel, while it's going to have a massive impact, right, if it's done well, what's the effort? That's probably a one out of five. So that's really only a six out of 10. In terms of my, is there eight out of 10 ideas, 10 out of 10 ideas? Oftentimes founders l…

AI assessment note: “one of the main frameworks that I use for decision-making is”