🔑 I’m hosting a virtual event today (Wednesday) at 11am PT (link here).
As some of you may know, I run a business called Enduring Ventures.
It’s a Holding Company that buys and operates simple cash-flowing companies.
We recently raised some new funding, and have decided to open up the last portion of the round to our community.
If you’d like to learn about it, we will be presenting about the company today at 11 am PT.
👉 Follow this link to sign-up and attend
Our friend, and host of My First Million Podcast, Shaan Puri will be leading the conversation with us.
My business partner Xavier is the king of disagreeing.
I’m not saying he gets into arguments.
The key to a good disagreement isn’t you imposing your intelligence on someone else.
If you walk away from a disagreement with the result that you were technically correct but the other person feels upset, embarrassed, or annoyed, then you lost the conversation.
It’s hard to win a conversation. But it is easy to lose it.
Someone who is good at disagreeing leaves you feeling warm and fuzzy after a conversation. You feel like you’re on the same team.
Here are my key rules to a disagreement:
Expect them to happen.
Often when a disagreement is happening each person will hold their perspective and tie it to their emotion, or their self worth. Your job is to untangle that mess.
I like to remind others that “it’s ok if we disagree” on this point. Making it “ok to disagree” is the first step to disconnecting the person’s self worth from their idea.
Be long-term-minded.
I used to play short-term games and would argue for keeps. When you’re young you forget that life is long. Keep in mind, you will know the person you’re arguing with for decades. They may not remember what you said but they will always remember how you made them feel.
It’s better to come out looking stupid or wrong than to make someone else feel stupid or wrong.
Shrink the elephant
Here’s how I picture of our emotions:
Imagine a tiny man in a cute red hat riding a giant elephant.
The more emotional you get, the bigger the elephant gets and your tiny man loses control.
If you sense a disagreement coming, spend time calming your emotions ahead of time. By shrinking the elephant you will have a greater sense of control, and engage in a thoughtful disagreement.
Which leads us to…
Lead with curiosity
No matter how smart we are we don’t know everything. I often remind myself of this.
The best brain surgeons in the world don’t know everything about brain surgery. They are constantly learning and evolving.
Seek to deeply understand where the other person is coming from.
Ask exploratory questions.
Here are some that I like:
Throughout the conversation, find ways to support their position. A good communicator is able to put themselves in the other person’s shoes and genuinely understand and explore their reasoning.
That’s it. Now you’re a pro at disagreeing. Time to practice. Try your new skills at the office…or on Twitter. Let me know how it goes.
I love businesses that generate cash flow on day 1.
Adriane and Jesse Puji built Growth Assistant from scratch. They wrote about their journey on Twitter, and now, less than 2 years later it’s doing $5M in revenue.
My takeaways from their experience
Niches create riches
There are many types of jobs companies need to outsource. Adriane could have started with a generic “outsourced hiring agency”. Instead, she chose a specific niche to pursue.
Growth Assistant started by offering “growth” related roles (it’s in their name).
Choosing a niche helps customers think of you when they need a specific service. Then as you grow, you can always expand your services.
When in doubt, create a niche offering for your brand.
Build publically on Twitter
From the day they started, they’ve been posting updates on Twitter, and people love it. Things that work in particular are sharing specific stats and numbers (# of signups, revenue generated…etc).
Sharing on Twitter for them has had the effect of acquiring customers while growing their personal brands.
Before I started posting on Twitter, I was often concerned about all the competition I would attract. But I’ve learned the value you get from building an audience far exceeds the competition you attract.
Make it feel selective
To signup for their service, you first have to join a waitlist. Then they ask you a series of sales-qualifying questions. And finally an account manager reaches out to close you.
It’s a good, simple onboarding that I recommend you check-out when you’re thinking of your own customer experience.
Plus I love that you can reproduce their website flow in a single afternoon using tools like Typeform (waitlist) and Carrd (website).
Delegate early
Get an assistant before you think. You’ll need to learn how to delegate, and you’ll also want to teach anyone who reports to you how you like to work/communicate.
Finally, on competition
Is there room in the market for more competitors like this?
Absolutely.
There are hundreds of outsourced labor companies.
Labor is a problem, it will always be a problem.
If you can solve specialized labor problems for companies you can make a great living.
For example, TaskUs is an outsourced service business that generates $500M per year in revenue.
What are other examples of specialized labor companies:
Some final thoughts
You can start most of these companies with zero investment.
A bit of smart hustle should get you to profitability pretty quickly.
Also, you should be able to run these specialized service businesses with a 50% Gross Margin. That means you could be putting 25-40% of the revenue into your own pocket.
That means on $5M, I would guess that Adriane is cash flowing $1.25-2M per year.
These professional service companies are truly some of the best ways to build cash flow.
You can also buy your way into one at a fairly reasonable price. For a business growing at 25% per year, with $1M of cash flow you should be able to pay $3M (3x).
If you enjoyed this article, you can share it with a friend here.
Business owners don’t think enough about structure.
You need to optimize your structure around your desired outcome.
Sometimes it’s hard to know what kind of business you want to be running in the future, but you should spend time thinking about it.
When I started my first companies I didn’t think of structure at all. I just asked my lawyer and did whatever they suggested.
That’s not a great strategy.
Lawyers know about different structures, but they don’t know what’s important to YOU so their suggestions are one-dimensional.
How would I research what the “best” company structure is for me?
Here’s my process:
Budget $500-1000 to figure out the best structure for your company (cheaper if you reseach online first). Trust me it’s worth the money and will pay dividends for a long time.
When I meet with these three groups of people, I’m seeking answers to the following key questions.
Will this structure help me:
You’ll be surprised, most owners I talk to have no idea why their business is structured in a specific way.
Let’s look at two structures as examples - The C-Corporation and the LLC
Growing up in San Francisco, the majority of companies I observed were C-Corporations. The reason is, most investors feel comfortable investing in a C-Corp. And many companies in San Francisco, are VC-backed companies. Thus a large number of C-Corps exist there.
A C-Corp is designed to
These are incredible benefits. But they also come with their downsides. C-Corps are not designed to efficiently distribute cash flow to shareholders. Why?
Because the company will pay taxes on the profits, then as the owner you will pay taxes on your income. They call this the double taxation issue of C-Corps.
My personal consulting business is an LLC, registered in Delaware.
Why is the LLC useful?
The LLC is a very flexible structure and is usually a good place to start if you’re not sure what to do. The S-Corp (I won’t cover it much here) is technically the best structure if your long-term goal is to distribute cash flow to yourself as an owner.
If you’re running what will be a high-growth technology company, I recommend a C-Corp. But most businesses are not in this category.
So I generally recommend you avoid C-Corporations.
In many instances (not all) I recommend you start with an LLC entity and start generating cash flow for your life.
Have a fantastic week,
~ Sieva
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