Let me connect some dots.
Yesterday I mentioned that Sloper and I would be launching a new experiment in the next 40 to 60 days. I’m currently in the research phase. I still need to build the platform we’ll need to test the hypothesis.
This is, you might call it, “Phase 2” of the 12-Months to $100K Project.
The new focus: Scaled Growth.
Most agents, at the teaching of the The Guru Party (TGP), go about this all the wrong way – in a manner doomed to fail.
I have in the past borrowed from Silicon Valley. I will again. Specifically, Paul Graham, who co-founded (and is the brain behind) YCombinator, discussed back in Ep. 27 — looking at the difference between “real estate agent” mentality vs. startup founder mentality.
Here’s a snippet from Graham’s essay.
As you read it, think about it in real estate terms. So when he says “startups,” you substitute “real estate teams.”
When he says, “founders,” you substitute “team leader.”
And when he says, “further investment,” you substitute more “advertising dollars.”
Here’s a common way startups die. They make something moderately appealing and have decent initial growth. They raise their first round fairly easily because the founders seem smart and the idea sounds plausible. But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderately appealing) the growth never comes. Now they’re rapidly running out of runway. They hope further investment will save them. But because they have high expenses and slow growth, they’re now unappealing to investors. They’re unable to raise more, and the company die.
I won’t bother getting into all the parallels.
You can do that.
But it explains why most real estate teams fail and collapse in on themselves with every market cycle. Because the product is crap. The service is crap. In good times, you can get away with with a product/service of “moderate appeal”… Growth happens. So you add more employees, team members, you spend more on advertising, you’re willing to take on more overhead, then reality hits.
The market turns.
And no matter how much you throw at it, if you even have the money to throw at it, you run out of time to right the ship.
“Startups die” because “the product is only moderately appealing.”
Said different, “real estate teams die” because “the service is only moderately appealing.”
And of course when the business or company dies, the founder or team leader is quick to blame the market or “something” external, out of his control.
(wrong!)
Graham writes:
What the company should have done is address the fundamental problem: that the product is only moderately appealing. Hiring people [i.e. adding team members] is rarely the way to fix that. More often than not it makes it harder.
I told you, pay attention to Silicon Valley, not the TGP.
Sloper and I, all last year, the “12-Months to 100K Project” was about achieving Product/Market fit. Making the product superior to all others. Ironing out the details. Deliberate, slow and controlled growth, prior to scaling.
We did this by obtaining “user-feedback.” Then by plus-ing it with “Add-on Services.”
Your real estate service, alone, by itself, as a product, is fucking boring. And, by society, not perceived to be very valuable. It’s your right to disagree. But I’m just shooting you straight, and denying reality is not smart in business.
That is the essence of what Paul Graham was getting to. You must be completely honest “about the appeal” of your product.
Then and only then can you move to Scale: i.e. Phase 2.
If you look at my personal Media business.
These are the kinds of emails and stories that folks write me daily. This is from Steve Saretsky: (thank you Steve).
Hey Ryan,
It’s midnight I’m sitting in my car in the underground parking lot. Just listened to Episode 25 on my car ride home from hockey. I felt I had to write this email to tell you MIND BLOWN! The whole thing about not being an educator but a storyteller makes so much sense to me now. I’ve been doing it all wrong, thanks a lot guru party!
I’m now wondering where I’d be had I not discovered this podcast… probably hating my life and annoying the piss out of people. Your thinking is truly innovating and has me thinking outside the box again, like I used to before I was introduced to the guru party.
Keep on rocking, you’re the man!
Keep in mind, I spent 18-months prior to launching my Podcast, trying to figure out how to convey my message. Then 12-months of testing it, over the course of 50 episodes, to prove Product/Market fit. Then and only then, within the past month, have I started to think about scaled growth in a major way…
My point, folks…
“Don’t focus on scaled growth, until you have something worth scaling!”
The biggest mistake? People think they have something worth scaling, a perception skewed by emotion and personal bias. “It’s their baby,” where, the more time they invest, the stronger that personal bias becomes.
What do they do? They deny reality!
End result?
Inevitable death. The company or business dies. They blame something external.
Talk soon,
-RYAN
Ryan Fletcher
Author, Defeat Mega-Agents
Editor-in-Chief, Broken Industry (print magazine)
Founder and CEO, Agent Marketing Syndicate.com
Creator, Protector/Social Superhero Program – by application only. Wait list. 12-Month minimum commitment.
PS: Make sure to subscribe to the Podcast too. It’s free, of course! If you’re already a fan of the show and loyal listener, please, let me hear from you. Head over to iTunes, leave us a review. Then send me an email with your review, attached. Every 5th review is placed into a drawing to win a FREE Agent Marketing Syndicate® T-Shirt.
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