EP 58 - Steve Simonson - Part 1 - Steve’s 11 Axioms to Help You Win More in Business and Life

Part 1 - Steve’s 11 Axioms to Help You Win More in Business and Life

Axioms are critical in conducting business and serve as guardrails in our personal and daily lives.

On today’s Insights episode, Steve talks about his first eleven axioms which he learned and continuously tries to infuse in running his own businesses. He also encourages his listeners to learn and apply these axioms in their own day to day lives. Here are more awesome takeaways on this episode:

• Axioms as a critical factor to ongoing success.

• Steve’s eleven axioms and detailed explanations for each one.

• What cost per acquisition means.

• And why it’s okay to fail fast in running a business and a lot more.

So put on your headphones and learn valuable insights from Steve’s 11 axioms in business and life.  

01:15 (Steve opens the podcast by giving a short overview on today’s topic.)

02:39 (Steve starts giving his axioms, starting with axiom zero: I don’t know nothing about nothing.)

06:08 (Axiom number one - “You can’t have a world-class brand in a single channel.”)

08:41 (Axiom number two: you don't have a “real business” until you can pour money in the top of the funnel and have a predictable, repeatable, and profitable cost per acquisition at the bottom of the funnel.)

12:12 (Axiom number three: Every upgrade is a downgrade at first.)

15:22 (Axiom number four: Beware of unintended consequences.)

19:22 (Axiom number five: Data-driven decisions outperform emotional driven decisions in business.)

23:03 (Axiom number six: Do what needs to be done when it needs doing.)

28:55 (Axiom number seven: I'm getting tired of being right all the time.)

32:23 (Axiom number eight: We're flying the airplane while we build it.)

37:13 (Axiom number nine: No score, no game.)

41:22 (Axiom number ten: Fail fast.)

45:15 (Axiom number eleven: Do more with less.)

49:16 (Steve recaps today’s episode.)

Welcome to the Awesomers.com podcast. If you love to learn and if you're motivated to expand your mind and heck if you desire to break through those traditional paradigms and find your own version of success, you are in the right place. Awesomers around the world are on a journey to improve their lives and the lives of those around them. We believe in paying it forward and we fundamentally try to live up to the great Zig Ziglar quote where he said, "You can have everything in your life you want if you help enough other people get what they want." It doesn't matter where you came from. It only matters where you're going. My name is Steve Simonson and I hope that you will join me on this Awesomer journey.

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01:15 (Steve opens the podcast by giving a short overview on today’s topic.)

Steve: Hey, everybody. It's Steve Simonson, and we are back again for another Awesomers.com podcast. This is episode number 58, and we're going to talk a little bit today about Steve's axioms. These are my axioms for how we conduct business and are my general philosophy and a philosophy I tried to infuse throughout the organizations and the people that I deal with, and I've referred to these axioms in prior times, prior episodes and quite regularly actually throughout my career. Sometimes, I'll just repeat things over and over, and some number of years ago, five plus years probably at this stage, I decided to name them axioms so I didn't seem like a crazy person in the corner always repeating himself, muttering a lot like that old man that you know down the street who's like, “Get off! Get off my lawn, you kids.” So I'm trying to avoid that, and so therefore, I'm marketizing it by saying that these are axioms and your keys to ongoing success. So without further ado, again this is episode number 58. So if you want to find the show notes and details about this particular episode, just go to Awesomers.com/58 , and you can get it up on in there to find all the relevant details about this episode, including transcripts and so on and so forth.

02:39 (Steve starts giving his axioms, starting with axiom zero: I don’t know nothing about nothing.)

Okay, so let's talk for a minute about the axiom zero. So I actually started at zero because this is how important this particular axiom is to me, and and the axiom says, “I don't know nuttin’ about nuttin’, or I don't know nothing about nothing.” Just you can pronounce however you want. But the premise is you know I don't want to walk into a situation and assume that I know the right answers. Now of course, I'm just like anybody else. I have a bias you know, I have my existing knowledge, I have my own experiences that may shape my, you know general opinions, but I want to step back from those existing philosophies or you know any known bias and say you know what if some version of this story or this some version of this problem looks different than I've ever seen before, what if that's the case, and if so, what do I do about it? So this is all about having an open mind and approaching any problem with a you know kind of unbiased and open method of thinking. So I want you to think about this in a very clear context. If you're having a meeting with a vendor, you have a meeting with a staff member, or anybody for that matter, once you step back for a minute and just say you know what if their information that they're sharing is some new piece of information, something I didn't know or something that challenges the status quo and perhaps even challenges my own existing experiences or thought process, and I can tell you that often I find myself learning new things, often I find myself being corrected, and this philosophy, this axiom zero I don't know nothing about nothing is where the foundation of my I don't know if you want to call openness or even humility, but you know I want to just start with “Hey, you teach me how it is.” Now I'm going to challenge you. I'm going to ask you a question. I'm going to you know probably try to really get to a point and suss out the way it is from my perspective, and everybody gets to have their own perspectives here, but I try to go in with an open mind and a willingness to learn, and that's what axiom zero is all about. I want to just touch base on this concept.

We're going to do this in a two-part episode. This is part one, and as I go through these axioms, I'm just going to go through these on a very top-level basis just to give you a flavor of what each of these mean to me in in the very most narrow sense, and later if there's enough demand, we'll do an Awesomer episode on each one because each of these has a very deep-rooted philosophy, deep-rooted lessons, and you know I would say not just relevant experiences that led me to develop these axioms and philosophies but in fact, business productive reasons. In other words, I think that my opportunity to have success is enhanced by knowing these things and enhanced by remembering these things and trying to be sure that we look for this pattern as we conduct our day-to-day business in our day-to-day lives, and so that's why these axioms are important. So it's going to be two-part episode. This is part one. Again, Awesomers.com/58 for part 1, and we'll do a more in-depth if we see more demand for this information in the future.

06:08 (Axiom number one: You can’t have a world-class brand in a single channel.)

All right, so let's go on to axiom number one, and that axiom number one is a very simple one, and it says, “You can't have a world-class brand in a single channel.” Now I've mentioned this before on prior episodes and of course many times outside of this podcast, but I don't want it to be missed by the audience and by you in particular, that I'm not saying that you can't build something of value. I'm not saying that you can't build something that creates wealth and equity by just having a single product or a single brand in a single channel for example. It's an anomaly in many ways, but this idea that you can start up an Amazon-based business and have that business be worth money in several years despite it being a single brand is it's really cool and it's amazing and there's so many great things about it. So that can generate wealth and equity and can have a high return on investment, but what I'm really saying here is you don't have a world-class brand in a single channel. If you just sell on your own website or you just sell on Amazon or you just sell in Home Depot, you probably don't have a world-class brand. A world-class brand, often and in my opinion, always exists in multiple channels. You know very, very rarely will you find a world-class brand that is sold in a single channel. In fact, I can't think of a single example. If you think of any of the biggest brands that you know, almost all of them are available in a multi-channel setting. That means you know retail stores through whatever traditional distribution maybe, sometimes through television or other you know online shopping type of mechanism. So on television you have Home Shopping Network and QVC and those types of things which are also very big powerhouse E-commerce brands, and those are a segment of E-commerce on their own. Of course you could sell to other E-commerce players, you may have your own E-commerce channel, and you may choose to sell to marketplaces, like Amazon or Etsy or Newegg or you know or eBay or whoever, whatever makes sense for your brand. My point is if you truly want to develop a world-class brand, please think of it as a multichannel play long-term. Doesn't mean you have to do that right off the bat. It certainly doesn't mean you start out like that, but I want you to just kind of keep this in mind for the future.

08:41 (Axiom number two: You don't have a “real business” until you can pour money in the top of the funnel and have a predictable, repeatable, and profitable cost per acquisition at the bottom of the funnel.)

All right, let's pop over and talk about axiom number two. And axiom number two basically says, “You don't have a ‘real business’ until you can pour money in the top of the funnel and have a predictable, repeatable, and profitable cost per acquisition at the bottom of the funnel.” Now what does this mean? So first of all, the funnel I'm talking about is the ultimate marketing funnel, right? This is not a specific funnel, whether it's Click Funnels or any of the other types of things. This is ultimately your marketing department. You pour money in the top of that thing, that's your marketing and advertising dollars, and you want to get a predictable, profitable cost per acquisition at the bottom of the funnel. Now I know I've already got people going well. You know sometimes I want to spend money and pour money in the funnel without worrying about profitable, and that's fine, that's a reasonable thing. At various times, you may decide to use that strategy for launches, for some other reason, it could be to drive a competitor's you know price down, it could be to try to take market share. There's any number of reasons why you may choose to have a specific funnel that is operating either at a break even or at a loss, but fundamentally, a business exists when you can pour money in the top and you get money popping out of the bottom that is a profitable cost per acquisition. So I'm just going to take a quick minute and explain what cost per acquisition means. Sometimes you hear in Amazon, they talk about ACoS which is essentially a ratio of advertising versus your sale, and that's fine, and I think that's an important metric to measure, but for me, cost per acquisition that's super, super important, and this ultimately means, all the money you took into marketing divided up by all the customers you acquired. Let's say it's, for the sake of discussion, you spend $100 of marketing. You got 10 customers. That's $10 cost per acquisition. Now if you sell a product for $5 and it costs you $10 cost per acquisition and it's not a consumable or some kind of repeat purchase, you got a business that’s upside down. That is not a profitable cost per acquisition. But if we increase those numbers, we say you have a thousand dollars worth of business and you still have the same 10 customers. Now that's a hundred dollars in revenue per customer, and let's just say, for the sake of this discussion, your cost per acquisition was twenty dollars, which by the way would be a twenty percent ACoS. That twenty dollars against the hundred dollars of revenue has the potential to be a profitable acquisition once you weigh in your cost of goods sold and your other related expenses to get the product shipped and so forth. So all of your variable expenses for the cost of the product and the shipping to get it here on the shipping up to the customer, all those things have to be baked in to make sure that you actually do have a gross profit margin and ultimately then a profitable cost per acquisition. So I don't want you to forget this concept. That your business really becomes “real” at the point that you can do that in a predictable, repeatable, and profitable way, and by the way, big businesses do this; small businesses do this. This is what makes a business sustainable. That's axiom number two.

12:12 (Axiom number three: Every upgrade is a downgrade at first.)

All right, let's go on to axiom number three, and this one I have proven over and over again, and it basically says, “Every upgrade is a downgrade at first.” Now this particular axiom was developed when we would roll out new software throughout an organization. So when you have you know 5, 10, 20, 30, 40, 50 employees and you're rolling some new software, you're going to hear a lot of feedback, and most of it will be negative. “Oh, man, why do we have to do this? This sucks you know. It was easier the old way” and kind of everybody's in their comfort zone in the old way, and when you're pushing some new piece of software upgrade or process system, whatever it is, you're going to get a lot of pushback, and that pushback is just a simple result of people resisting change. It's okay. And when, if you could tell them before you're pushing the upgrade that you know what, at first this is going to feel like a downgrade, that helps set expectations and that can really change the complexion of that whole process, that whole upgrade process. It won't make it feel any better, but in the back of everybody's mind you’ll go, “You know what, I knew this is going to be tough at first,” and what I have often said to my team is, especially when I didn't prepare them adequately in the past, as I would say, “All right, I tell you what, you guys are pushing back really hard against this new development, this new software, this new procedure, whatever we're putting in place, and so I'm going to do, I'll make you a deal. If you still hate this in six months, then we'll go back to the old way it was done. We'll just roll back to the old software procedure whatever, and occasionally, at that six-month point, I'll check in. Now by the way, all the murmurs, all the you know natives being restless have usually gone away by that time. After six months or you know whatever, there's enough time for people to get used to it, get accustomed to it, and so most often, you won't even have any ongoing turmoil or mumbling about how bad the new system is. It doesn't mean they won't take a jab here and there about how it could be better. Yes, that's fine. It could always be better, right? But after that six month, I'll check in and go, “All right, you know based on you guys feedback, initially, should we just go ahead and roll back to the old system?” And most often they'll be like, “Oh no, no, we're never going back.” You know then they see the power of whatever the upgrade reason was, and they and the new software, and they now they're into their new comfort zone, and of course the idea of changing that is also unacceptable. So my point is prepare yourself, prepare your organization, prepare your mind that at first every upgrade is a downgrade or if I say it properly, every upgrade is a downgrade at first, and again the point is simply to prepare yourself mentally, prepare your organization. This is a very important thing as you roll out change in an organization. Prepare for it and you'll be better off because of it.

15:22 (Axiom number four: Beware of unintended consequences.)

Okay, so here's axiom number four. Now this is, the axiom number four says, “Beware of unintended consequences.” Now that sounds you know mystic and maybe even silly to say, but I can tell you that I have learned so many times to start looking out for unintended consequences. So as an example, one time we rolled out a commission program for some sales team we had, and essentially, the program allowed the sales team to go into the system and interact. They could put their name on a sale or a lead as it came in and then they would work that lead until they made a sale. So that sounded pretty good. So we put in this new commission system intended to drive, and it centralize people to you know really reach for you know higher thresholds and try to you know accomplish more, right? We always want to sell more, and we want their objectives to be aligned with our company objectives, right? That alignment is very important. What we didn't realize is that one or more of the salespeople at night, they would log into the system and that as new leads were generated, they would just tag their name onto those leads. They didn't do any work, and by the way, we have a system that kind of shows kind of all the audit logs of everybody, so we can see what they do and they don't do, and we could just see the lead came in. They went into the lead system. They put their name on it and then they just went to the next you know back in the lead system and found the next lead, the next lead, the next lead, and their objective was just by putting their name on these to you know get as much commission, and I'll be honest, it took us a couple papers to figure it out. We're like why is this person suddenly just completely outperforming everybody else, and once we went in and looked at the data, we can see very clearly they were just cheating the system. Now it definitely was not in the spirit of you know doing the right thing how they were doing things, but that was an unintended consequence that we didn't expect, and so we had to put rules in place, and we had to put some of our technology in the place to say if you don't work that lead, if you don't do some actual actions that lead to a positive response for the you know the buying cycle of the customer, then you're not going to get a commission on that and which is fair by the way. You know this idea that you just simply go into the lead system and put your name in it, you know just it's like clique farming. You know at night, they just were going, tag their name to as many customers as they could, and many of those customers would buy it on their own online through the website without ever talking to any salesperson let alone the one who had put their name on it, and this was an unintended consequence that we did not fully appreciate or realize. So over time, I want you to really think especially about incentive plans or about other things that you think is really other things that you think are really going to have a positive influence on your team. Just check yourself a little bit and go, “All right, is there anything you know, what if I was a little nefarious? What if I was just a little bit on the the dark side? How would I take advantage of this concept, this contest, this incentive program, whatever it is,” and I'll be honest with you, I don't think like that in general, right? It just doesn't that's not how my wiring is, but over time when I would put some new program in place, I would try to think of all the ways that the system could be gamed because these unintended consequences can lead to very negative outcomes, and by the way, I could give you a bunch of other examples of unintended consequences. With vendors, you know trying to beat them down on price so they lower the quality. We didn't do the math in our head. You know that if we wanted to lower price, they were just simply going to change the quality of the product even without telling us. Lots of reasons to beware of unattended consequences. You've been warned.

19:22 (Axiom number five: Data-driven decisions outperform emotional driven decisions in business.)

All right, let's talk about axiom number five, and essentially, this is a very simple premise. “Data-driven decisions outperform emotional driven decisions in business.” All right, let's say it again, data-driven decisions outperform emotional driven decisions in business, and I would say too often our emotions get caught up inside of a business. When you see a product and it's selling very, very well, you're super excited. You see this, the gross sales, and that's exciting, and you know emotionally we get real hooked up, and we're super excited about it, but later when you check out the margin or you check out how much it costs you to launch the product or any number of other data-driven things, you may look at that product and go you know what, that product is selling like crazy, everything, we even have a positive margin. It's sound like crazy, but you know what, it's making us half the margin that this other product is making which has a nice sales trajectory. If we took the money from this product and put it in that other product, we could probably increase our profitability and increase our overall business in general. So the point is just because something's exciting and it's selling really well, it doesn't mean that's the best product for you to proceed your money in and remember that money for inventory is a finite resource. There's only so many ways that you could spend that money, and I want you to remember that fact that when you're caught up in the process day-to-day of trying to make a product work or buy more inventory that your finite resource should be driven by metrics. What is the inventory that's turning the fastest? What is earning the most? There's something called a turn and earn ratio. You can go Google that. Track that on each of your products. If you don't know your turn and earn, you can't really judge the products against each other. Remember those products should be competing for your finite resources, and the ones that are at the bottom will go back to the old Jack Welch’s yank them and rank them or no, it's rank them and yank them. That's right. Jack would be proud. I got it on the second try. So you rank your products based on the turn and earn ratio, and you decide which ones are at the Steve: bottom, and you yank them out. The bottom 20% goes bye-bye so that you can put more money into the top 20%. So data-driven decisions outperform emotional driven decisions in business. That is a fact. Now we're going to take a quick break and, when we come back, we're going to talk about more of my axioms and why they are important not just to me but why they should be important to you. We'll be right back after this.

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23:03 (Axiom number six: Do what needs to be done when it needs doing.)

Steve: Hey, here we are back, everybody, and as promised, we're going to talk about more of my axioms, and this one is axiom number six, and this is an axiom that I actually learned from a great mentor of mine. His name was Terry Wheat, still is his name by the way, and a brilliant guy, and I tell you, I was on a cruise many years ago kind of like a university, but it wasn't a real university. It was called Mohawk University, and this was a very large company, a big public company, and they said, “Hey, we're going on a cruise, and we're bringing these really smart guys with us, and they're going to teach you a thing or two.” And Terry Wheat was on there, and I had the opportunity to meet him, and he was such a smart guy, and he talked about this idea and this axiom, which I'm verbatim stealing from him, and again it says, “Do what needs to be done when it needs doing.” Do what needs done when it needs doing. So there's there's so many layers to this. I'm going to tell you the quick story he told about his father that taught him this lesson. So his dad was an electrician way back in the day, and Terry was his helper, and of course it was probably just a you know make-work project for his son, and I think Terry was you know somewhere between 8 and 12 at the time he was helping, and Terry's job was to run around the broom and sweep the dust that his dad created every time he cut in a socket or every time he you know threaded a some wires or whatever, and basically each little, and I can I'm probably not getting the story perfectly, but each little wall area would generate a little pile of dust and debris, and the point was Terry as the helper was supposed to go and sweep up that dust. He just had a little sweeper and a little dustpan, and he's supposed to go sweep up that dust and then go dump it with each hole or with each plug or whatever the electric outlet they were working on. So at each one, he was supposed to do that, but being a smart young fella, he says, “Hey, Dad, why don't you do all you're working and then I'll come in at the end, and I will just sweep it up and take care of business then. That’ll be easier on me and then I don't have to wait for you each time you're doing a new plug.” His dad already knew what the right thing was, but he says, “Okay, son, you know if that's what you want to do, let's give it a go.” And of course, at the end of the day, Terry came in to sweep, and he realized it was a big problem because all the airflow, all the people walking through the project, all those little nice and little neat piles that were super easy to scoop up with the duster were completely spread out throughout the house, and now he had to get a big broom and a big thing, and it took you know four or five times as long as it would have just doing it individually as he went. So that premise of doing what needs done when it needs doing still translates into our day and by that, I mean our today's you know E-commerce world. When you wake up in the morning, depends on your time zone, make sure you're working on the time zone that makes the most sense. So in America, for example, when I wake up, I want to look and see what Europe is doing. You know if I have businesses operating in Europe at that time, I need to see how Europe is operating because any resources, any team members that are on the European time frame, in America that's when you know that's their afternoon basically and then once Europe is kind of after-work hours and tuck it in, then I'm going to concentrate on America, anything into the North American or Western Hemisphere, including South America if we have business down there. So that's going to be during with the hard of my day and then at the end of the day, that's where I'll start interacting with Asia and India and China and Vietnam and you know wherever else we're doing business so we can understand you know what we need to deal with at at that time while they're just coming into their morning. So that's a very literal you know the timing is based on on the needs, but I want you to also think of it on a tasks basis. Entrepreneurs often write down a huge task list. This list is unending and unyielding, and I want people A to start you know saying here's what actually has to be done one or two tasks and get those done and then you can look at the the big task list and decide what should be promoted from there to do next. A lot of times we end up doing things that are not that important. They're not helping our business become more efficient. They're not increasing revenue. They're not low in cost. They're not expanding our business, and so if you take heat of these words and you focus on what needs to be done when it needs to be done, you'll be better off, and one final word on this. When you have a team, you should be first focused on making sure you keep their cue, their task list, and things that need to be done full. Number one, so they're actually doing things and not waiting on you, and number two that they're also prioritizing in a positive way. You know often you can have team members who are just kind of caught up in doing things that may not necessarily be at the core of your objectives, and what that means is they're not actually advancing your agenda the way you want it to be advanced. They're just busy and doing busy work, and if that work is not going to make a tangible impact in your business short or long term, you really have to decide why are you doing it, why are you investing money to have that done, and this is a very very important axiom. I hope you guys don't forget it. Do what needs done when it needs doing.

28:55 (Axiom number seven: I'm getting tired of being right all the time.)

All right, let's pop over to axiom number seven, and this is where the ego train leaves this station. You're going to love this. The axiom seven says, “I'm getting tired of being right all the time.” And I guess I have literally walked around the office saying this from time to time, but this is actually not about ego. This is about trusting your gut, and by the way, I'm wrong plenty of times, but one of the things that I don't like, and I'm trying to phrase this carefully, one of the things that I lament, regrets probably too strong of a word, but if I go against my gut instinct, somebody has an idea, somebody says we should hire this person, or somebody says we should pursue this initiative, build this business, whatever it is, and I go against my gut because I want to be open. I want to rely on axiom zero that I don't know nothing about nothing. Often, I kick myself later and say, “You know my gut, my spidey sense, whatever it is that was telling me something, and I didn't act soon enough,” and so you know when I say I'm getting tired of being right all the time, this is also another way of saying, “You have to trust your gut instinct.” Your entrepreneur instinct is very, very strong, and you may have heard other people talking about this, Simon Sinek talks about it, but you know, pardon me, the left side of your brain and the right side of your brain, one of them is verbal, I forget, I think it's the left that's verbal and the right is nonverbal. Whichever one it is, and I'm open to being wrong about which of those, but the nonverbal side has an answer. Its worked out the details, and it's giving these feelings, this instinct. It doesn't put it into words to say, “No, that idea is not going to work. It does not have merit for a reason A,B,C,D,E.” That's the other side of the brain that does all that verbal and kind of all that logical tie back to whatever the reasoning may be. So when you hear your gut telling you something or feel it, sometimes it's just a visceral feels, like something does not feel right here. My advice is you know you should be deferential and be open to be wrong, but if your instinct is that strong, then just go with your instinct. It's probably right, and even if it's not right, you know empirically, it may be right for you, and what I mean by that is you know sometimes things just don't fit. Sometimes you'll have a situation where you know you decide to pursue a line of business or you decide to launch a new product,maybe you brought in a new vendor and you know your instinct was kind of pulling you away from that solution or that objective whatever the case may be and then now you're deep in the muck, and you're like how can I make this turn into something neutral instead of negative, and you're spinning a lot of energy. You just burn a lot of calories for no good reason, and the reality is most often your gut feel is right. So if you're getting tired of being right all the time, especially after you ignored your guts and you're kicking yourself, it's time to trust your gut instinct a little bit more.

32:23 (Axiom number eight: We're flying the airplane while we build it.)

Steve: All right, let's talk about axiom number eight. This is an important one. So there's different ways of saying this, but we often use the phrase “We're flying the airplane while we build it.” Now just do that visual in your head just a little bit, right. So just imagine you know there's an airplane, it may be the Wright brothers model airplane, right. It's up there, and there's a guy working on the wing you know, there's a gal, she's back there working on the tail, and a you know pilots still trying to connect all the the levers and controls. That's how we do stuff. Now I say that because it's really important to establish a mindset of iteration in your company, and what I mean by that is that you are trying to constantly improve. You don't want to stop. You can't stop. So if you step back and you take time out of your day and you're like, “We're going to get this perfect. I'm going to do everything just perfect.” As my partner Evan Hackl says, “Perfect is the enemy of good.” Don't wait for perfect. Just go. Just do something. And when we're flying the airplane while we build up, we know that not everything's going to be perfect, and you have to have people in your organization who are tolerant of that kind of start-up mentality and attitude, and by the way, it doesn't matter if your business is two years, three years, five years old. If you're not a major, major company with you know massive departments and unlimited capital, I guess even big businesses have limits to their capital, but it's on a relative basis. Those big companies spend money much bigger scale than small businesses so that's what I mean by that. But unless you have that big giant corporate resource, then you should be scrappy, and you should try to understand that it's okay to not have everything to be perfect. Just go, make some progress, iterate as you go to get better, try not to make the same mistake twice but most importantly make sure that your organization understands that this is not some big corporate behemoth where you know they start turning in you know “Hey,I was you know on this particular project,” and you know they're turning in you know kind of like, I want to be careful about what I say here, so I'm going to just say it differently. If you operate in a start-up organization, you should make sure everybody acts like a start-up organization. That's what you need, that mentality, that sense of urgency. That's what you need in a start-up, and it should feel like the stakes are high, like literally you're flying an airplane while you build it, and if you don't get it right, that airplanes crashes. That's how a start-up is, you know both in a figurative and a literal way. If you don't do what needs done when it needs doing in a business, #prayeraxiomreference, you will crash. That business will crash, and it you know can burn, and that could be a terrible, no survivors result. So that's axiom number eight. Now we're going to take another quick break, and when we come back, we're going to talk about a few more axioms and a couple that I think you're going to want to be sure to write down and pay close attention to. These axioms are super important, and they've helped me you know generate a pretty reasonable business over time. You know we've done all right. We'll be right back after this.

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Steve: Okay,we're back again, everybody, and as I said before the break, you know we've done okay with some of these axioms. We've been in a position to leverage some of this information, and really I can't stress this enough. Each of these axioms are rules and philosophies that are guardrails for our business. If we don't use these axioms, we will be worse off because of it. So for you to be able to kind of get an insider's peek, you can decide how they impact you whether or not they resonate with you. Certainly, you don't have to adopt them by any stretch, but the point is they have helped me, and they've helped my colleagues, and I think they've ultimately helped our businesses, and you know again we've scaled some heights that have been reasonable at least from a small business you know perspective.

37:13 (Axiom number nine: No score, no game.)

So axiom number nine is no score, no game. No score, no game. And this is kind of a parallel to one of the old I think is a Tom Peters type of axiom where basically he says, “What gets measured gets managed” and forgive me if I've created that to the wrong guru. But what gets measured gets managed is the same as saying no score, no game. Now people inherently that you know you've heard about this idea of gamification. People love to keep score. People want to have a metric to know whether they're doing well. The best performers always want to be able to say, “You know if I was getting a six before and I can get a seven you know next week, I feel better, and if I'm getting sevens you know for a while and then I can get an eight, that's even better still.” Everybody wants to feel that sense of accomplishment. It's built into us. It's hardwired into us. I don't know any other animal on the planet that has that vibe, right. You don't see a lot of cheetahs or like, “Hey, I ran that gazelle down in 6.2 seconds last time. I'm going to try to beat my personal best.” Now I think it's a very human condition to say you know we want to keep score because we're in this game to win it and without keeping score and these things would be your KPIs, key performance indicators or key metrics or whatever you want to call them. So as an example, sales revenue, easy one to keep track of but very often misleading. You know when your sales revenue is going up by 300% and your margins going up by two percent and your net profit is going up by negative eight percent, you've got a problem, right? Because all these indicators interrelate with each other. So what I want you to think about is the concept of leverage in this particular example. If your revenues growing, we want your margin to at least hold the the same line or improve, that's a gross margin. And we want your net margin to improve and show leverage. So the more you sell, the more you make versus the more you sell, the more people you hire, the more spending that's required although that's true as a percentage those numbers should go down. That's one part of the score you can keep to make the game more fun. There's lots of other examples of KPIs. For your individual team members, you may have KPIs that are tied to their role. In you know sales, it's really easy because you know margin and sales and so forth but maybe a service that you're measuring how many minutes per customer inquiry or per ticket. You know sometimes they called a ticketing system when a customer inquiry comes in, how fast did that get resolved. You may look at the feedback from those customers you know, how well did you resolve and how fast did you resolve it as KPIs. One of the things I always look at is the net . . . what is it called . . . net performer . . . net promoter! Ah yes! Pardon me for my brain checking out on us. The Net Promoter Score. So a Net Promoter Score is when your company puts out a survey, and instead of saying you know how satisfied are you, you just ask a very simple question, how likely are you to refer this to your friends or family, and if your Net Promoter Score is not high enough, you know that people are either neutral or negative on your business, and if you track that over time, you can see the trend that your business is having, and we've seen both Net Promoter scores for some of our businesses go up and and hold strong, and we've seen them other times drop back, and we knew we had trouble. When you see that Net Promoter Score, it's like a kick in the guts. So that by having that score, you can have that game so to speak. Many, many types of KPIs. I don't want you to forget that because that's one of the most important.

41:22 (Axiom number ten: Fail fast.)

Steve: Okay, axiom number 10. Fail fast. It's so simple, just fail fast. So you know a lot of these axioms work with one another. The idea of failing fast means you know if your instinct is this is a good idea versus a bad idea, if you believe you know your colleagues or teammates or partners, whoever is helping you that whatever this idea is worthwhile, just go for it. Don't wait for it to be perfect, just get it done and fail as fast as you can. The key here is don't be afraid to fail. You know failing is often overlooked. The old Edison quote you know it's like, “I didn't fail you know making the light bulb 10,000 times. I just kept trying until I got the one right.” Of course, I'm butchering his quote. The point is he's like I didn't look at all those experiments that didn't work as failures. I just looked at him as you know milestones on the road towards the final solution of getting it right, and fundamentally, that's part of the point is when you want to solve a problem, you have to just keep trying until you get it right, and honestly, but the faster you do that, the faster you incrementally make you life better or iterate as I talked about earlier, the better off you'll be. Failing fast can also help you close the book on something quicker, right? If you try something and it just doesn't, it just doesn't work, and even though your instinct might be like, “Yes, this has got some legs to it,” maybe the timings off, maybe you don't have the resources to do it. It's okay to fail and just go you know what I'm going to backburner that idea and stop wasting time on it for right now because you know for whatever reason it's just simply not working. The faster you can kind of get to those fail points and decide where to cut bait and move on, the better off you'll be. By failing fast, you give yourself permission to experiment but not be tied into making that idea last, right? Sometimes our ego goes “Well, I can't you know, I can't be seen as a failure in the world,” and by the way, this happens to any of us, myself included. Nobody wants to be seen as you know “Oh, I tried this, and it didn't work,” but it's all right. I've talked about this in prior episodes. Nobody cares except you, right? If you fail and the idea doesn't work, there might be a little shot out there from a couple of jerks, but nobody actually really cares. Sometimes they just feel bad for you. Other times, they won't even notice. You'll notice way more than the rest of the world. People are far more likely to pay attention when you succeed and not always in a good way, by the way. Sometimes that creates jealousy. Sometimes success creates you know people backbiting or that crab mentality to pull you down. So by failing fast and really you know our ego is just tricking us that nobody cares except us. You know if you don't bet the farm on every decision, you'll be better off because of it and just make these decisions, make them quick, validate the idea. We're living in the Golden Age of data validation. Pardon me. The fact that we can validate an idea and test an idea using online mechanisms, even for offline businesses by the way. E-commerce has it easy because we can test and validate a product idea very, very quickly with a crowdfunding campaign or even just some ads that you know either show enough of a customer interest or not, but offline businesses can do a similar thing with surveys and with other things by leveraging some of the online mechanisms. There's so many ways you can really accelerate your opportunity to either fail fast or succeed fast. That makes this a very, very important point.

45:15 (Axiom number eleven: Do more with less.)

Steve: All right, let's go on to axiom number 11. So one of our principles in a start-up is that we do more with less, okay? That's just a, we must do more with less. We have to do more with less because we have less, and if we don't get a significant ROI on that less, it's not going to go anywhere. So if you look at you know your competitor and let's just say for the sake of argument that you're in the health of beauty space and L'Oreal which is a big brand in that space, they've got more money than you. They've got more resources. They've got more of everything than you do, but you may have an idea that can just really you know compete with one of their products or maybe a couple of their products. You have to be able to do more with less. Your idea has to be able to get more traction with less money. Your product has to be developed with less people, right? And a big company, like L'Oreal, by the way, I'm not picking on them, just using them as a big brand, they have product designers, they have merchandising teams, they have you know financial analysts, they have you know already existing metrics you know, here's what the profitability that we have to have and here's the supply chain that we already have in place who can make this and blah blah blah. The point is entrenched large existing players will always have more resources and experience than you do, therefore, you have to do more with less. You don't have the choice. You have to do more with less, and as simple as this sounds, that is a premise that really is vital in the E-commerce space and in the start-up space in general. It doesn't really matter the trade. You know E-commerce is particularly impacted by this mostly because that's where I spend most of my time, but it doesn't matter if you're opening a retail store. You got to do more with less. If you're opening a restaurant, if you're starting a service business to wash windows or clean carpets, whatever the case is, a plumbing company, any of those, you have to do more with less. You have to figure out how to produce leverage, and that doesn't mean you charge less money, that doesn't mean you should operate less profitably, but it does mean whatever revenue and profit that you're getting, you have to get more out of that than the average bear, and that is that's just part of what it is to be in a small business and an emerging business, and it's one of the things that makes small businesses powerful at the end of the day. We find leverage. Now I'll tell you I remember starting out with some of my companies, and we would hear a rumor that you know “Hey, this big company, they just spent you know a million dollars on keyword research,” and we would laugh “Uh what morons.” You know we can do keyword research so much cheaper than them. You know we're smart, and we've got this resource, and that resource and this person and that person, and you know we just kind of laugh at how stupid big companies are. Now the reality is as you grow you start realizing “Oh well, that million dollars are worth the keyword research was to operate a budget of 200 million dollars.” So now it doesn't seem like that much, and our budget versus our amount of research maybe even percentage-wise was similar, but the point is as you grow, you're going to be willing to spend more money on things that you may not have been willing to in the past, and that's okay because you know time and money should be allocated as independent resources. So by doing more with less, that's where we get the equity of our time, that's where we get the equity of our leverage out of the business. Don't forget this lesson, do more with less.

49:16 (Steve recaps today’s episode.)

Steve: Okay, everybody. So we have just covered the first eleven axioms in this insight episode from Awesomers.com . This has just been part one, and this is Awesomers.com/58 . That's the episode number, and that's the URL. You can go to find the show notes and details. Part 2 will be coming up, soon enough, and you'll be able to get a look at that really soon, but I want you to just study up on these first eleven and think about how you could apply them to your business, think about what they mean to you and if it's something that you find benefit in, and I'll tell you, yes, I've learned a lot of hard lessons, and many of these axioms helped me from relearning those lessons. They keep me on a path that helps put my as I said earlier kind of guardrails for all these lanes of progress we want to go down, and it's my experience saying, “Oh wait, what don't forget this, don't forget that, and it keeps me on the road. At the point that I forget or ignore my own axioms, there it's at my own peril, and I would highly recommend to you that these would have a similar positive impact to your business if you pay close attention and you kind of seek out the the lessons learned there. So again, Awesomers.com/58 . You can see the show notes and details and things like that, but I want to just challenge that with one last thing. If you haven't already, go leave us a review on iTunes or whatever your favorite podcast platform is. Those reviews keep us going, and they help us understand. When I started this thing, I promised a 180 episodes dropping daily. This is a big amount of work for me and for the team and a significant investment. This is all free to you. I've never you know said, “Send me money.” So you know of course you should consider supporting our sponsors that goes without saying, but I want you to just take a moment and leave us a review if you will. The second thing you could do is you can go to Awesomers.com/contact if you want to see more in-depth dive ins on each of these axioms. You know I could probably do you know a full episode on each of these axioms and give you stories about how they have manifested themselves or how the lesson was learned originally, and so if you're interested in that, please don't hesitate to participate and share that with us as well. So we really do appreciate you guys listening and sharing this. You know if you if you really do care, go ahead and give it a share. Thanks everybody. We'll be back right after this.

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Steve: Well, we've done it again, everybody. We have another episode of the Awesomers podcast ready for the world. Thank you for joining us and we hope that you've enjoyed our program today. Now is a good time to take a moment to subscribe, like and share this podcast. Heck you can even leave a review if you wanted. Awesomers around you will appreciate your help. It's only with your participation and sharing that we'll be able to achieve our goals. Our success is literally in your hands. Thank you again for joining us. We are at your service. Find out more about me, Steve Simonson, our guest, team and all the other Awesomers involved at Awesomers.com . Thank you again.