The 20/80 Opportunity

Business brain episode 642 for Wednesday, April 23rd, national email. Day 2025 kind of feels like every day.

Yeah. How do you get rid of it?

Greetings, folks, and welcome to Business Brain, the show where we take a few ideas, some from you, some from us, that we crunch, we dissect, we use and analyze to better tune our business brains so that we can each keep on living those charmed lives. And speaking of living charmed lives, shopify.com businessbrain is where you can go to sign up for your $1 per month trial period and upgrade your selling today. We'll talk more about how you're going to do that in a little bit. For now, here in Durham, New Hampshire, I'm Dave Hamilton, and out here in.

Lafayette, California, where it's going to be 80 degrees today.

Amazing.

I'm very happy. Yeah, that's great. I had to break my shorts out and start putting away the long pants. Nice.

It was 80 here on. It was 80 here on Saturday.

That's awesome.

And then, I don't know, what is it today? Like, it's 60 or something, so.

Yeah, that's not bad. Yeah. Springs in the air, all the plants are looking great. And I'm happy to. Happy to be here, man. Hey, I want to test a. A thesis out, an idea.

All right, go ahead.

Yeah. Kind of rolling around in my head that could be. Could be added to the lexicon of Business Brain topics or phrases. Yes, I understand, like charmed life mistakes or tuition things that we love. T shirt phrases, I like to call them.

Okay.

And this is called the 2080 rule. You've obviously heard of the 8020 rule, right? You know, right. Whatever. 20% of the people do 80% of the work, that kind of thing. But my, My, my take on this phrase is a little different. I've been thinking about it more, and what got me thinking about this is everyone's in a hurry to, like, start making money and be successful and get their business going, at least in our world. Right? You got to go, got to go, Got to go.

Yeah.

But the concept, I, I think in watching people grow in our own business and this show and your business, it really takes a year or two to get things off the ground, right? I think.

Oh, you gotta have some Runway, for sure. And you gotta make some mistakes.

Yes, yes, of course, of course. So the question I asked, and I asked one of my clients this, I said, listen, if you could invest, 20 is an 80, maybe I don't have the math right, but is an 80% return worth your time. And of course everybody says yes, yes, yes, obviously let's take a 10 year timeframe, let's say. Cause you know, we've had businesses that have lasted about 10 years. This show's about 10 years. I know it'll last longer. But if you could invest two years of your time grinding, building, creating systems and experimenting, making mistakes, small mistakes, as you grew and scaled. And then after that two years you started scaling and whatever you created kicked off revenue from for the next 10 years. Isn't that a good investment?

That's a great way to look at things. That is how it's going to work most likely with many businesses. Right. I mean you might start kicking off revenue earlier or whatever, maybe. Or you might be in a business where you have to kick off revenue early.

Yes, right. It doesn't mean you can't make revenue. But I'm talking.

Yeah, I know what you mean. The growth, the real growth.

Yeah, yeah, the real growth. You gotta get past the, the, at least the year and a half, two years of, of time. And I don't know how to. Well, maybe I've done it faster. But saying I think really scalable things that last a long time, I think it's just a great way to look at it.

You need, you need those. I've seen and I've built businesses that, that take off right away, but they have no staying power. And I've seen people with this. Right. It's just like burns and then it burns out.

Yeah. Revenue, revenue. Revenue. But, but you're chasing profit.

Yeah, you're chasing profit and that's it. And then you're out. Right, right. And that foundation that you build in those first two years of, of really kind of grinding it out and not seeing those, you know, spectacular wins, right. All of that stuff, that's what builds you that lifestyle business that then becomes worth something down the road.

Yeah, yeah, that's right. And you're, I think you need time to implement those systems that become that foundation so that when you're ready, when you turn on that spigot, it, it really takes off. So, you know, that's the issue.

Yeah, that's the issue. When you start earning revenue, like spectacular revenue right away, you might not have time to build the system onboard the people to do all the things. I was talking to a person who's got a business that's maybe a year old and somebody's interested in buying it and kind of doing a roll up with them. So they're, they're and and this was the other part, as I was pointing out. I'm like, okay, they're buying your business to hire you. You're going to work there, and so make sure the deal is worth whatever time you have to invest working for this person. Because you, you just sold yourself into a job if you, if you take this deal. But also they're like, well, yeah, but I, they're going to offer me what I know the business is worth. I said, well, they're going to offer you what your business is worth based on past revenue, not future revenue. And he's like, yeah, I don't want to sell it for past revenue. I want to sell it for future revenue. I'm like, okay, of course, of course. But no one, especially in today's world, no one's going to pay that unless they know you and they want to buy you out of competing with them, which might happen. Right. You know, if you're really good and you have, your reputation is longer than the 10 months you've had this business. Right. Like, yeah, these things can happen, but your business isn't worth anything, especially that without.

Young.

Without. When it's that young, it's just not worth anything.

What is the, what is the multiple? Like, you don't even know. You don't even know the potential of it. And I, I would. Yeah, you want to strike, you know, when opportunity comes along and maybe there.

Is a good solid reason to take the money and run. Maybe, like, you don't get to control what happens in the world, you know, so if that's going to change things, maybe take this up, maybe this is the, the, you know, burden of hand. Right. No problem with that. But just know what you're doing, know what you're saying yes to. Yeah.

Yeah. So when you're looking at all this stuff online or trying to search, I'm going to start a business or I'm going to try how. You know, and I get that question a lot. Well, how long does it take? You know, that's the wrong way to look at it.

Overnight success takes 20 years.

There you go. Okay, answer. Thanks for listening to our TED Talk.

That's. That's how long it takes. That's right.

Yeah. And so, you know, you have to couple things. You, you, you can't buy into that lizard brain. You know, come, I'll, I'll teach you how to make this money overnight. Because that's just a lie.

Yeah.

You know, come on. That's. That. Don't do that to yourself. And then the second is Got to give yourself some grace, some time to research and educate. And so I, I get it. If you don't have any way to make it, make money, you're under that pressure. And that's a, that's a different discussion. There's, there's ways to address that. But if you're coming out of like a corporate thing or do whatever, there's a long Runway for you to put these systems in place and to, to, you know, I was fortunate that I was delusional enough to come out of college and never have a job.

Right.

And just started building from day one because I had no, you know, my overhead was just like non existent. Right. Beer, money and hamburgers. So that was about it. And so that allowed me a longer Runway to kind of figure all this stuff out. So think about your commitment level. If you really want to build something that is sustainable and scalable, I think it takes you that, that time frame, 2080.

I agree. I mean, it's certainly, I've certainly lived that more often than I've not lived that. So.

Yeah, same. When we built deals on the web, it was a couple years before we had money to hire somebody to run it for us.

That's right. Right, Yep.

A couple years.

Yep. Yeah, we started earning revenue pretty quickly, but. Yes, but that didn't mean we, we didn't have a foundation. We had a revenue stream. That's. That's it.

Yeah, that's different.

Yeah, it was different. Yeah.

Yeah. So anyway, tell me what you think. Feedback Businessbrain show. Come, come tell us so we can talk more about this. Because maybe I'm. I'm wrong, but one way or another, let's have a discussion so I can make this either a foundation statement that you'll hear from me over and over, over, over the next 10 years, or I'll do. I'll just stop.

Just stop saying it all together. That's right. Feedbackusbrain show. All right, I want to talk about our sponsor because, you know, starting your own business can feel like trying to build a rocket ship with duct tape, two interns, and a YouTube tutorial. But with our sponsor, Shopify, it's like somebody hands you the controls to a fully built ship and says, go ahead, launch whenever you'd like. I use Shopify to sell merch for my other podcasts and one of my other businesses.

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Want one head to store.insta360.com and use our code brain to get a free invisible selfie stick worth another $24.99 on available for just the first 30 purchases only. That's store.insta360.com, promo code brain capture your charmed life in full. 360 and our thanks to insta360 for sponsoring this episode. Shannon I'm going to go off script a little bit here and I'm changing the agenda today because I've been thinking. There's something I've been thinking about lately. It was sort of catalyzed by a thing I saw where one business is not. Not any of my businesses, not even in any of my fields, but I saw one business sort of take some actions only to hurt Their competition, it would not have bettered them. Yeah, it was. Sometimes you do a thing for yourself that has a ripple effect that, that might not put your competition in the best light or whatever. But this was very much predatory about and it was, you know, they did not like seeing the perceived success of their competition because you don't really necessarily know if someone is having success. But they saw this perceived success and they went out of their way to hinder that, making zero difference to what their business. They were not minding their own business. And I just thought, man, like I can't even imagine living in that world. And it got me to thinking about my businesses and how I've been doing things for the last 26 years or whatever it is, ever since we started the Mac Observer. And I don't know if I've ever told this story before, but we started Mac observer in 1998, late 1998. And you know, we took some time to kind of get things going. Brian. Yes, but, but, but no, you're totally right. That's kind of what got me thinking about this was like the beginnings of things. We got things rolling. It was just me and my business partner, Brian Chaffin. It was his job to produce or, or hire out to get content and publish the content on the site regularly throughout the day, Monday through Friday. It was my job to make sure that we had a site to publish, which meant like servers and all that stuff because back then there was no hosting companies that you'd use or whatever and also to have the money to pay the people and the hosting bills and hopefully eventually ourselves. Right. So we started doing this and one of the things that I learned very quickly was that sales is best done as a full time job. Because if, and, and, and I'm speaking very much about myself here because I was the salesperson, but I was also the programmer and the, the nerd doing like all the server stuff. And I found that I would do, I would, I was gravitating towards, towards doing like the programming stuff because that was like, I knew if I put two hours into programming there would be a positive end result. Whereas two hours into sales might not get you anything. You got to put in another two hours or whatever it is. And so our first full time hire was Greg Snyder, our sales rep at Mac Observer. And we were about eight months in. As we started, we were starting to figure things out like to your 2080 rule. Right, the two years. Yep. And at that point in time, three of our competitors came to us, other people publishing directly competing Mac news websites and said, oh my gosh, you guys have your stuff together. You're clearly figured out the hosting thing, the server thing, and this ad sales thing. We just want to publish our websites. Would you, our competitor, do for us what we. What you've done for yourself? And that's when we decided to create a separate business that we called Backbeat Media and the entire success. And so Backbeat was not our idea. Right? It was our, was our competition's idea definitively.

Yeah. They came and gave you the opportunity.

They gave us the opportunity. They asked us to take this opportunity. Right. And obviously it succeeded. And I look at all the sites that we worked with throughout the tenure of Backbeat, representing sites on the web, and so many of them were our competition. And then I look at when we started with podcasts, we brought in so many. I mean, in theory, every podcast competes with every other in a sense. I mean, if you want attention. Right. If you want to look at it that way. Right. And, and yet I'm a podcaster. And that is one of our greatest strengths at Backbeat is the fact that we produce shows. We understand what publishers want, and therefore we can bring publishers in. Now they have to trust that we're not just going to use our catalog to drive ad sales for my shows. And, you know, forget about these other people. Like, there does need to be that trust there and there's transparency and all that stuff. But obviously we've earned that because we've delivered on that. And it's. What I'm talking about here is this concept of coopetition. And I have prioritized coopetition throughout my career. And a. It's led to success for me, long lasting success. Rising Tide does, in fact, raise all ships in most industries. I'm sure we could come up with some. But you know, when it's, when it's us little guys out there, like, the more we can help each other, the better off we all are, truly. And even today, like, I had, well, I mean, I had had lunch when I was at Podcast Movement with somebody who runs a competing network to Backbeat, and all we did during lunch was share tips with each other about how we run our businesses. It wasn't like nobody was holding anything close to the vest. It's like. And we even said it was like, okay, well, yes, we compete, but not on most things. Most of what we do could be helped by learning how the other person does it without hurting each other, only helping each other.

Yeah, it's, it's this concept of the, the pie is infinite, right?

Yes.

It's, it's not that. Oh, gosh, I have this and if I share some of it, I'll have less. No, no, if you share some, you're going to get some things back. And in my world, you know, I'm a product guy, but, you know, I've been buying deals my whole life and I could tell you that some of the biggest deals, especially when we were getting started, these big opportunities would come along and I would go find somebody to share the deal with because I could not take the whole deal.

We do that too when we've got a buyer that has more money than we can spend on the shows of ours that they want to spend it with.

So you have to get it somewhere.

I talked to the guy I had lunch with that runs a network that's similar to ours.

Of course that creates more opportunities. So when I bring a deal, you know, I can remember buying. I don't know if you know what the super drive is, but I remember.

The Apple super drive.

So I'll put a link.

Kids, you can ask your parents or look in the show notes at Businessbrain show. Yeah.

Hey, at least I didn't mention floppy disk. So the, the Superdrive deal was massive. It was like 60,000 pieces. And I, I couldn't have done it. Not only did I not, I probably could have got the money because I always say if the deal is good enough, you'll, you know, the money follows. But I didn't have the capacity, the client base, to put all this product and sell it. And So I found two other people and said, hey, let's each take 20,000 pieces. You have your customers, I have mine. Let's not step on each other. If you were, hey, if it turns out we have a mutual client, let's just split it and let's come up with a way to do it. So by sharing that when I needed them, there was a lot of goodwill.

And you were able to make money on that deal where.

Yes.

Where you would not have been able. You would have had to turn.

I would have to skip it. I would have had to skip it. I have a, a fly fishing deal going on right now. I feel the same way. I was like, I can't take all these, but I don't have enough people. If you're in the fly fishing industry, back at business. Yeah, there you go. But that, so what happened later, not only was I able to do the deal, you know, I took a third of it. I was able to make money. Our. Our company was able to do good. But those two other people that I shared the deal with in turn, shared.

Deals with me, of course they did.

And gave access to product that I. That maybe I couldn't get. And they were like, yeah, yeah, we'll let you do this. And, you know, you kind of come to an agreement. So like I say, you don't. They don't step on each other's toes. And, you know, so it. That I. I love that. That model, that thinking process of getting through in this coopetition because it has. It has dramatically impacted my life, man.

Obviously. Same.

Yes.

I mean, like, I can't even when I heard this story, I mean, first of all, I was just disgusted to hear this going on because I know all the people involved, and it was just like, yeah, no, this is not cool. But secondly, it's just like, where do you think. What's the. What's the. What are you after here?

Yeah.

Like, I don't understand.

Yeah, yeah.

They're obsessed.

Yeah. When I hear somebody say, I have this truth, I have this great idea and I can't tell anybody about it, that's a red flag right there.

Red flag.

The second, the second is I have this great source, this great supplier, but I. I can't. I can't share it. Well, unless you're like, in a position to handle this mass.

This, like all of their business.

Yeah. It just happened to me not. Not too long ago, and I was like, oh, okay, great. Would you want to share the information? We'll see what we can make out of this. I can't. I don't want to tell you. I was like, well, okay, so, you know, you're. You're. You're leaving money on the table because you are not thinking about sharing access or whatever, or sharing your idea that you think is so valuable. You know, that, that. That's what you do. Share. Open up, man. Look at the world around us that we live in now. Everything's like, here, let's see if we can make this work.

Let's see if we can make this work together. Yeah.

Yeah. And most of the time, it's. It. You know, this is. We've. This is a T shirt, you know, phrase. It's. It's execution, not the idea. You could look at every great idea and somebody executed on it really well. And somebody sat there struggling or had analysis paralysis and never got out. It comes up all the time. They put too much stuff in front of them. Too many obstacles. Just start and get out there and figure it out and see if your thing is worth it and share and work with other people. That's how you figure it out.

Yes. That's how you figure it out. That's how you figure it out.

Yeah.

Yeah. Don't sit in a silo. Yep. It's no competition, folks. It's one of my favorite things.

Yeah. And you know, you hear it talked all the time. Building in public.

Yeah.

Building. Build in public.

Figure it out.

You get some great feedback.

People will tell you. Yeah.

Yeah. 99.9 of the people don't do anything so you don't have to worry about somebody stealing your id.

It's never going to happen.

Not going to happen.

Not going to happen. No. Thanks for Hanging out, folks. FeedbackusBrain show. Tell us your stories about coopetition, your thoughts on Shannon's 2080 rule, and go to businessbrain show. Review and review the show for us and then let us know. We'll enter you into our drawing for a MacBook this year. Your chances are good. Yeah.

Very good.

We'll see you on Friday. Keep living that charm life.