86% of Self-Made Billionaires Have THIS In Common

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How I Manage 20+ Businesses (w/o Going Crazy)

Speaking of 20+ businesses, our friend Erik Van Horn and his partners are joining us for this month's cashflow topic - franchises. Erik has sold close to $100M in franchises, so he knows a thing or two. If you don't know what cashflow is, it's our premium membership where our community gets access to the EXACT step-by-step how to of how to add a new cashflowing investment to their portfolio every month. What are you waiting for?

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🔊 Here’s the audio version of this week’s newsletter

​86 percent of billionaires have THIS in common.mp3​

Today in < 10 minutes → We’re Going to Dive into:

1. The Fallacy of One Thing
2. The 3 Steps to Managing Your Zeroes
3. Decentralized Management
4. R&D → Don't Recreate the Wheel
5. Tracking Data → Only the Important KPI's

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Let's go!

The Fallacy of the ONE THING.

You know, it's probably not usually a great idea to argue against billionaires like Gary Keller who proselytize focus and wrote a literal book called The One Thing about ya know, focus. But then again, while I love the book and have become buds with his co-author Jay, I'm going to disagree mightily...

I love doing one thing until you get good at it, but I only love it until then. As soon as I hit competent and then highly competent, I am in the search of the novel. I remember my mother used to say, "One day you'll realize the grass is never truly greener." Ahhh but mom, are you sure??

Can you relate? That perpetual itch for the unknown, the chasing of the squirrel. Humans are wired with a need for novelty. In truth - newness makes us happy.

Every time we see something new we get hit with a delicious dopamine waterfall. Turns out research confirms this, in one study, Neuron, participants were shown common images: landscapes, interiors, and faces. Then, researchers threw in something unexpected. When they observed subjects’ brains during the unexpected stimulus, they found that the “pleasure centers”, were lit up like a Texas Christmas tree. Delectable dopamine a flowing.

So I've come to a realization, one thing is beautiful for a time. Focus is magical for a time. But eventually, if all we do is one thing and all we do is focus, we will miss the new, the learning, the growing, and the cross-pollination of interests. In fact, the fallacy of singular focus breaks down as SOON as you become a player. After that, you should be diversifying relentlessly.

Don't believe me, believe the billy's:

• In 2018 there were 1,426 billionaires in the world.
• Out of those 1,426, about 960 are self-made.
• Out of that 960, 830 of them made money from MULTIPLE businesses

In fact, one of my idols Sam Zell (another Billy) and infamous dealmaker said I want to be, "Chairman of everything and the CEO of nothing." He wanted that elusive unicorn of jack of all trades master of none.

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Turns out he's not alone, Branson, Cuban, Adelson, Musk, Bezos, Jobs all followed their curiosity, even to the moon.

So fear not my fellow children of the ADHD, we may make a billionaire out of you yet.

The question then becomes how do you build an empire, and manage it? I get this question all the time (although the word empire is being a bit generous in my regard). People simply can't believe I oversee 10-20-30 different businesses that cash flow to me.

Here's the framework I've come to use thus far, although it is ever-growing, ever-changing.

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The How to Manage Your Zeroes

Three steps separate those who own multiple businesses and those who get owned by them.

#1 Decentralized Management

#2 Rip Off & Duplicate

#3 Don't Drown in Data

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#1 Decentralized Management w/ A Small Team

First Learn, Then Apply.

LEARN: Buffett Management

Warren Buffett manages Berkshire Hathaway’s over 360,000 employees and still reads 6 newspapers a day. How?

He uses Tom Murphy’s (former head of Capital Cities, then ABC, then Disney) management principles of decentralization, hiring the best possible people, letting them do the work, and watching the costs.

What does that mean? Well, Tom said about Buffett:

“We are both proponents of a decentralized management philosophy: of hiring key people carefully; of pushing decisions down the organization; and of setting overall principles and resisting the temptation to be involved with details. In other words, don’t hire a dog and try to do the barking.” - Tom Murphy

So the key to managing multiple businesses is first putting the right people in charge of each business and keeping those that report to you very small and tight. More direct reports more problems.

In fact, Buffett runs his headquarters with a staff of 25, to manage billions in investments:

Check out how much this team changes from one Christmas card...

To the next... probably need to get a new dream job if this is on your list.

APPLY:

What this means for my businesses is I rarely want in-depth reports. I want short and sweet scorecards that allow me to view the business with an eye to profits and costs. That's it. I occasionally get drawn in but I do all I can to back away.

Your value as you grow is your brain, and your distance to work ON the business, not IN it.

#2 Rip Off & Duplicate:

Sometimes I believe the definition of R&D is actually rip-off.. and duplicate. When I first started accumulating multiple businesses I was overstressed, overworked, involved in everything, and quite honestly close to burnout. I was perpetually doing many things poorly and couldn't be trusted to fully execute just about anything.

I was failing.

One human is actually not incredibly powerful.

A friend of mine Clint Bruce, a former Navy SEAL and current BA business owner said it perfectly:

"For so long I was an arrow trying to hit my target, now I am an archer trying to let fly my arrows in the right direction, but trusting them to find their way."

So I began to contemplate how to become the archer, not the arrow. That meant building the right teams. But that is much easier said than done, so R&D, I went to learn from the greats:

First Learn, Then Apply.

LEARN: Disney Corp tells some secrets:

• That they channelize into media networks, parks, merchandising, marketing and entertainment.
• They share marketing across the business lines as well as merchandising.

Their top-paid executives besides the CEO, are the Chief Strategy Officer and the Chief Counsel. Why? Because when you have an increasingly complex set of businesses or divisions, strategy comes first. What comes second? A great dealmaking mind which is what Alan brings.

APPLY:

The first hire shouldn't be your assistant. It should be a COO, CSO, or a Chief of Staff. My first hire is always my COO, who comes up with a strategy for overall management. At First Trust (my last firm) it was April, at Contrarian Thinking it's Nikki. You need mental leverage not simply operational leverage (aka administrative tasks).

The goal is not a command down structure but a Command of Teams or Team of Teams. These are where you are an interface but not the break in the funnel.

#3 Don't Drown in Data

What gets measured gets managed. Period.

The problem is what do you measure? And how do you manage it? When you run a slew of companies seeing what they are doing all at once can feel like this...

So KISS.

LEARN: Keep it stupid simple.

I believe scorecards have two things you should measure: output and activity.

What did your team achieve each week (or what did you achieve) and what did you do?

Contrarian Thinking KPI's are simple:

• Newsletter subscribers
• Social followers
• Revenue by product line
• Did we produce content across all platforms at activity level required (red or green)
• Costs in line with projections

Sure we can get more granular into the open rate, conversion rate, unsubs, engagement etc but it's too much.

Boring Businesses Laundromats It's:

• total cash collected
• customer complaints/issues
• machines in working order
• total costs

APPLY

Here is your framework, look at your businesses and ask, if I could look at 3-5 numbers ONLY on each business which ones would tell me the most complete story on the business? Then make them into a scorecard with a trend line so you can tell growth or decay.

Don't drown in data. The numbers should leap out at you like a frog off the page. Anything less is worthless.

Let your dogs do the barking and question everything,

Codie

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Disclaimer – This is the “Be an adult” section. Everything mentioned above isn’t advice, just a recount of what I did. That said: This article is presented for informational purposes only. The opinions stated here are not intended to recommend any investment or provide tax advice. Neither are they an offer to sell or the solicitation of an offer to purchase an interest in any current or future investment vehicle managed or sponsored by Codie Ventures, LLC or its affiliates. All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading and investing do involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk. You are solely responsible for making your own investment decisions. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. By reading/sharing this newsletter or consuming our content on our other channels, you are indicating your consent and agreement to our disclaimer.

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