Problems and Opportunities
“So… what’d you do?”
I’d just finished an interview with an entrepreneur for the pod, and we were chatting as we waited for the files to download. Our guests tend to give us the best stories the second the mics are off.
“We were down to $10k and would be out of money by end of month. We didn’t have time to raise funding and we probably couldn’t have, anyway. We knew people liked the product - we just needed to survive long enough to get the sales ball rolling. So… we did what we had to do.”
The founder then took a dramatic sip of water to let the tension build.
I started wondering - what would I do? How did they stretch the last $10k the six months needed to let this company start to grow?
“We hired 20 sales people off craigslist over the next three days and paid them 100% on commission (with nothing up front), and we held a competition - whoever sold the most in the first month got that last $10k we had. The hires and the competition drove over $100k in sales, we kept the best sales people and didn’t renew the contracts of the rest, and we were off.”
The entrepreneur - who’s current valuation has a bunch of commas in it but at the time had zero - leaned back in their chair and took a long, satisfied swig of water.
As of 2021, over 300 startups have come through Tacklebox the past six years and we’ve worked in other capacities with hundreds more.
The question I get the most at dinner parties Zoom happy hours is:
“What’d the successful ones do that the unsuccessful ones didn’t?”
For the past five years, I haven’t had a great answer. I parrot the normal stuff about founders who “had a bias towards action” or “just wouldn’t accept failure.” Both are true, but both are a cop out. Plenty of people who failed had these characteristics, too.
The truth was I just didn’t have a better answer until recently, when it all finally clicked.
And that’s what we’ll talk about today.
<dramatic sip of water>
To be exceptional at anything, you need to benefit from asymmetric upside.
I find it helpful to put this in hourly terms. Your “average hour” needs to move you significantly closer to a goal than someone else’s average hour. If it doesn’t, you’ll just spend your life treading water alongside everyone else.
Some founders think they’ll create separation through sheer will - they’ll work more hours than everyone else. Others think they’ll be better and more efficient at the tasks that make up most days - email, Slack, cold outreach, customer support, social media campaigns, etc. Neither approach will work. Hours and efficiency alone are, unfortunately, commodities in the startup world. They can amplify a differentiator, but they won’t be your differentiator.
The painful / liberating truth here is that the majority of what you do won’t really matter that much because of how similar it’ll be to what everyone else does. You’ll solve problems and put out fires and react to things and send emails and post to social and so will everyone else.
Which may sound a bit depressing, but it shouldn’t. And it brings us back to the great entrepreneurs.
They spend plenty of time on all the stuff above, but they understand how vital it is to carve out time to identify and pursue the big opportunities as well - the things that have massive potential asymmetric upside.
You’re nodding your head. You know this is the way to split up your time. But you probably don’t do it, and I’ll prove it with an email I sent to 20 Tacklebox alums who unwittingly acted as guinea pigs for this experiment. I sent a group of smart, driven entrepreneurs an email with one question:
How could you get more out of each day?
The responses fell into four general buckets -
Eliminate wasted time - things like don’t go on instagram, get a Peloton to create efficient 30 minute workouts, etc.
Eliminate or delegate work - getting stuff - particularly the administrative stuff - off their plate. Lots of virtual assistant talk.
Eliminate unfulfilling personal time - cut back on time or activities with friends, family, and work associates that weren’t truly important to them.
Add something healthy - meditation, sleep, exercise, diet.
These answers make the point perfectly. Every response is iterative. Each item would at best give marginal benefit.
Humans are wired to solve seemingly urgent problems (with limited upside), rather than pursue massive opportunities (with unlimited upside). Our instincts around how we make progress are wrong.
This is huge for you.
This Too Shall Pasta - Middle Manager vs. CEO
Let’s say you’re working on a direct-to-consumer line of gluten-free Italian food called “This Too Shall Pasta.”
Your task list might look like this - create social media posts, tweak Facebook and Instagram ads, send a cold email to Whole Foods about carrying the product, send emails to new potential tomato suppliers.
All these tasks will move things forward. But… are these problems or opportunities?
I suggest sifting through your task list and labeling each item as either something you’d delegate to a middle manager (if that person existed), or something you’d pay a CEO $1,000 / hr to do. Every task for This Too Shall Pasta is a middle manager task. There’s nothing worthy of a CEO, which means you need to go opportunity hunting if you want This Too Shall Pasta to work. And it took me a good 35 minutes to come up with that name, so this fake company needs to succeed. Sure I could've gone with "You Can Call Me Al Dente," but that seemed too obvious.
But how do you find these massive opportunities?
Start by looking at your task list as a whole and deciphering what you’re really trying to accomplish. Looking at the list above, nearly every task has to do with growth. Now, you throw on your CEO chefs hat and earn that theoretical check:
What could you do that would take the same amount of time as the tasks above, but result in 10x or 100x the growth and make all those other tasks obsolete?
It’s a hard question without a fast answer, but that’s the point. You’re the CEO. This isn’t supposed to be easy.
The best entrepreneurs we’ve worked with structure their time around questions like that. They block out 3-5 hours each week to brainstorm and pursue these opportunities, with the ideas getting wilder and wilder. The goal is to find something that’d have a 10x or 100x return if it worked and test it out. Most of these - probably 95% - won’t work, and that’s fine.
The math works - if you spend even 2 hours per week pursuing opportunities that would give you a $100k return if they panned out, and only one opportunity did over the whole year, your 100 yearly “opportunity hours” would’ve been worth $1,000 a pop.
I saw a quote the other day that I loved:
“Put your best employees on your biggest opportunities, not your biggest problems.”
Early on, you’re your best employee and should be spending your time on the stuff that can potentially matter as opposed to the stuff that definitely won’t. There will be a tradeoff to this - emails will slip. You might even lose some early customers. But you didn’t get into the gluten free pasta game to make sure all 100 of your first customers love you forever, you did it to build a real business that 10s of thousands of people could love.
This is where you earn your CEO badge. Be creative. Be bold. The risks are lower than you think and the gains are unlimited. You won’t get anywhere solving problems all day, at some point you’ve got to leap. And most of these are supposed to fail, so there’s no pressure.
The pasta-bilities are endless.