The Exit Engine Podcast Episode 21: The Fine Art of Failure

Welcome to the Exit Engine Podcast, episode 21. Good morning, John.

Good morning, Joe.

Actually, it's today, it's afternoon. We're normally doing this in the morning, but we're delayed today, so we're actually We're doing it in the afternoon. So to be completely transparent, this is actually not the morning, it's the afternoon. So I just wanted to make sure we're kicking it off the right way and that we're not lying to people.

Joe, good afternoon to you.

Same to you, man. Uh, this is one of the toughest topics that we're gonna— we're— that we're gonna deal with because I think that, uh, today we're gonna talk about one of my favorite topics and a topic that's near and dear to my heart, and that's, uh, the topic of failure in business.

And, and right, and the reason that it's not, it's not taboo to talk about it, but it's sometimes it's difficult to talk about it for some people because when you talk about failure or, or things you've made, you've made mistakes, um, some people are, are very hesitant to, to recognize that, hand up, I don't make the right decisions all the time and I've made mistakes in the past. Full stop.

Bingo. I mean, right there, buddy, with you. And understanding too that failure to me, that I've learned over time, because again, I used to be so failure adverse when I was a young man. You know, the idea of failing at anything or whatever was like, was just like, you know, was too much to bear. I'm one of those people that was just like not being able to achieve something or whatever when I wanted to or whatever would, was like Like, could, could be, you know, like a devastating blow.

Yeah. And, and at that, at earlier points in my career, it was frightening. Failure was frightening. It's like, what are people gonna think of me? What are my parents gonna think of me? What are my colleagues, the people that, my sisters, my, the people I really care about, what are they gonna think of me if I fail?

And the reality is, is that what we learn over time is that failure is actually a necessary and important ingredient in success.

Yeah. And if you look at like what, what venture capitalists and what— and not that they know everything, but, but, but what they're doing is they are betting on companies. And what they're really doing more than betting on companies, they're betting on people, right? They're betting on management teams and groups of individuals that have come to them seeking money. And what they don't want to fund is they don't want to fund somebody who has never had any sort of setback in their life. They don't want someone to— they're not going to give someone millions and millions of dollars who has either always succeeded or never done anything in their life. Even if they've come up with the best idea for a new mousetrap in the world, if they haven't faced adversity and challenge and overcome problems, they will run for the hills, or they should run for the hills.

No question about it. I mean, the reality is that any, any owner kind of worth his salt has been has been in the position of failure more times than probably, like you said before, that more times than people even care to admit. I can take cases from my own life and the whole thing where I talk about this even proudly in my bio. I mean, I'm an expert in failure. I have failed way more times than I ever wanted to, for sure. I have failed more times than really I even really care to admit. Um, frankly, but at the same time, it's, it's, I've, what I've realized as I've grown older is that the failures were necessary steps on the way to success.

Yeah.

And that any success that I've had, right, as few and far between as they seem to have been or whatever, comparatively speaking, the reality is, is all the, all the mistakes, right, were lessons. The mistakes were part of the path. And I think that what most people, a lot of people think about or have a hard time with, as I was when I was a young man, was the ability to be able to kind of deal with that failure and see failure for what it really is. And that it's one thing to swing for the fences and completely miss, right? And just fail and fail publicly and be humiliated and what were you thinking and blah, blah, blah and all that stuff. But that's not really what most What most people are dealing with failure-wise are much smaller and perhaps maybe even more impactful things because of how close they are to them. And so, in other words, the big failure of your business, that's probably not most— in most people's experience. But what is in most people's experience is the failure of letting someone down, the failure of not being able to show up when you needed to, Right? The failure that kind of comes with trying something and maybe, maybe, maybe getting afraid of, of failing at it and giving up. So, you know, the thing that we learn in, in, in, if you hang in here long enough, you know, is that these failures in the whole thing are not, they, they, they are not in of themselves anything except potentially learning, learning situations. Right. And, and steps along the way to success.

Yeah. And, and I can— I'll speak for myself. When I, when I, I failed at, uh, a business and learned a great deal about people and about what I wouldn't do in, in the future based on what I learned from that failure. And it was a great experience. The, the whole thing was a great experience, and even the failure, because I learned It was a very low risk. What I, what I had was a very low risk proposition, meaning that in failing, I didn't take down a comp— I mean, I didn't take down anyone other than myself. I had only put my, my capital to risk and my reputation at risk and what I built for a couple, for 6 years or so. But it was my choice to leave, and I learned a great deal about what I need to do in the future. And that has guided me to take different jobs, start different companies, and learn that, as an example, I need to always be in charge of the finances. And that's just right. And I think I mentioned that to you in one of our first— maybe in our first call or discussion.

It's so funny that that's what it boils down to for you, though, right? It's like, the thing that I've learned is I should always be in charge of the finances. I think that's a lot.

And, and, and not necessarily being charged, and that's probably the right— wrong way to put it, but I need to be more involved in the financial dealings of the company. Not because anyone was, you know, fraudulent or doing anything, but I lacked a set of controls. And I made— and in our, in our last— in one of my last companies, just the financial decisions, the decisions that were made were not made, um, thinking of the finance. So it's like I needed to be more involved in financial decisions at any company that I was involved with. And if that didn't work for people that I was business partners with, no problem, I just won't be involved, right? No skin off anyone's back. Everyone knows, right?

No, that's—

that's—

you were very clear about that's a requirement for you. It happened to be that that was the thing exactly that I was in completely agree— complete agreement, and that you should be in charge of the finances. Yeah, absolutely. I mean, because again Look, and so much of failure— this is a great segue because so much of failure ends up being about learning about your own strengths and weaknesses, your ability over time to go, oh, I thought that was going to be easy. Now it's hard. Now I realize that I shouldn't be ever in charge of the finances. John should be. Right. And so when we learn that, right, you learn that your strength should be that and whatever. And I learned that my strength should not be that. And, you know, as an example, and the reality is, is that that's, that is the lesson to me. Failure gives us— is an eye-opener. It gives us a chance to be able to examine ourselves. And by the way, failure is where the growth happens.

Yeah, it's where the growth happens. And it's also where you find like-minded and not like-minded, but yeah, like-minded people that you can trust and that you get into business with. And that you're not going to be good at everything. I am certainly not good at most things in business. And right, I just want to be honest, right? Like, I'm not a marketer. I just, I know that about myself. I know, I know what I'm good at. But what I am good at, I find, I want to find— it's like when you find a, a, a life partner, whatever you have to do, you don't want to find the thing that, you know, you look for in a life partner, or you should, um, look for something that you're not good at, right? Like Right. If you're not good at something and you find a spouse or a partner that's good at those things that you're not good at, that works in life. It also works in business, right? A finance person finds an operations person, a marketing person, you know, those types of things. So you want to— and a company is more about just the John show. It's a team effort when you're building a company and when you're building a business. You need to find people that are good at things that you're not good at, because you're not going to be good at everything.

No question about it. And again, and unfortunately, sometimes we— some of us learn that the hard way by going through these situations. I had— again, I, I, I, I have had companies— I have, I've been in bankruptcy. I have had— I had things go under. I have been personally taken down. I have taken other people down with me. I have— I mean, I'm telling you that I have done this, and you already know this about me. But the point is, is that That we did things trying to make things work, trying to make things move. You know, all of it was good intent. You know, there was never anything untoward going on. But we do— you do come across situations like that. And they said, I, I would never, because it's the kind of person I am, I would never blame other people for the— for that business going downhill. But what I can— I only blame myself because, because at the end of the day, the buck stopped with me. So whatever decision wasn't made or whatever bookkeeping wasn't done or whatever that I outsourced or things that I gave to other people to do or things that I relied on other people to do, you know, they were not good decisions on my part to choose those people to do those things. And the reality is, is that, you know, I didn't know that at the time. And sometimes, unfortunately, you get one shot to figure out if someone's good or not, you know. And the reality is, is that sometimes lots of people, lots of times they're not.

Um, yeah.

And I got taken advantage of, and I had, I had money stolen, and I had stuff gone and whatever. And again, that's not why, that's not why my business didn't work, right? But it was a contributing factor, and it was, and it's the kind of thing that, again, it can take a toll on you. So the, the, the thing that I think is the most important thing for people to learn as we go through this, especially for young entrepreneurs out there, is to know, is to know, is to embrace the failure. Okay, we need to make sure that failure is a part of the, of the landscape. And if you're not failing, something's wrong. Okay, if there is something going on and you're not failing somewhere along the line and learning and readjusting and going or whatever— let's take this week's football games as a great example. Okay, it doesn't matter what team, whatever, pick one. Okay, whatever, it doesn't matter. But what, what is constantly going on on the field during a football game is adjustment. Okay?

Yep.

Go in with a plan. The plan, within 5 plays or so, generally the plan is trash. Okay? So you may still have an overall plan, but what you're doing now is you're adjusting. You're trying, you're seeing what works. This didn't work. Oh, now I gotta move to this. This didn't work. Let me see. Oh, the defense is adjusted to that. Now I gotta adjust again. Right? That's, that's actually a lot more closer to what business is, what, what being in business is. Than anything else, right? In my experience.

Yeah. And, and football and boxing, right? The famous boxing adage— and I'm sure I'm screwing up the quote, but it's something along the lines of everyone has a plan until they get punched in the face. And, and, and business— trust me, if you haven't been punched in the face yet by business, wait, because it's gonna happen. You're gonna have— you're gonna have setbacks, you're gonna have challenges, you're gonna have problems. Every business has challenges and problems. Whether it's how to get the revenue. I mean, a big problem would be, you know, a good problem would be, hey, how do we get all this money in the bank? Okay, yeah, that's still a problem that you have, like some businesses. But a lot of, a lot of problems that come up in, in business are unforeseen things that happen with, with your employees, with your, with external landscape, things you cannot control. And trust me, they will come up. And the way that you're judged On them is how you adjust, as Joe just said, and how you adjust to what, what the other team is doing on defense, right? How the Eagles came back and came back and beat the Ravens this weekend, to take that football analogy, was a fantastic game. And I don't like the Eagles. Joe does. It's an imperfection in them, but we'll, we'll, you know, we're not going to change that. But the way that they adjusted to what the— what Baltimore was doing was exactly what you need to do in business. Adjusts to what the game is, not what you think it should be, not what was in your PowerPoint presentation.

Take what the defense hands you.

Exactly.

And the ability to be able to do that. And so, so, A, know that going in, okay? And that you are— adversity is part of the thing, and figuring out adversity is actually the game, okay? The game is getting through the adversity, okay? And the, and the sticking to it to get through the adversity is actually the key to the thing. Right? So one of the downsides to what we do to ourselves with when it comes to dealing with failure, okay, is that we put we we imagine and envision ourselves in a far worse place than we actually are. Okay? If and again, it becomes a matter of assign. It's it's assigning meaning and expectation. Right? So if you set your expectation that I am going to fail, and I'm going to fail fast. Because when I do, and I get past that failure, and into and get rid of the bad stuff, and suddenly I'm all left with the good stuff, or what's you know in business what's working, okay? Then now I'm in a situation where I've actually I've improved myself, and I'm not upset with myself for failing because ultimately I've succeeded. So the other thing that we do is we judge it too soon. Right? So, I failed today. But did you? Because the reality is, is that what happened today suddenly gets changed tomorrow and looks completely different in the rearview mirror, right? The, the notion that you, that you didn't do something or you didn't show up somewhere or, or you were not smart enough or made a bad decision— there's no such thing as a bad decision. Bad decisions only happen from people that really aren't trying. Okay, a bad decision is a missed decision. I like to call them missed decisions, right? Because you made, you made, you made a tweak one way or the other would have done the thing, right? But if you are— you think about how many decisions that you're, as the owner of a company, that you're making in a day. All right, so the reality is you're not a failure unless you are— unless you— even if you lose the business as a result, you as a human being is still not a failure. Right? The business failed. Something conspired against you. The things came together at a wrong time. That you didn't stick with it long enough. That's the big thing. You didn't show up every day. You got— you got— when you start to make mistakes or you start to see things not working, what happens is most people actually start to give up. And that's exactly the wrong moment to give up, right?

Yeah.

Is that you need these fields. So the expectation— if I expect, if I expect myself to fail, you will allow myself the room. Doesn't it? Doesn't take a toll on me. It just leads me to success, right?

Yeah, I think of them as limiting. And I think you use this term too, or we've talked about it as limiting behavior, right?

You're—

if you put limits on what you think you can do, Then those limits will exist for you, right? If you think you have limits, trust me, your brain will will put limits on what you think you prove to you that you do. Yeah, like I'm guilty of this much more so than you are, but I'm guilty of this in saying, "Oh, I don't think we should do this because XYZ or because we might fail," and I have to consistently remind myself to say, "Look, what you just said, you learn from failure." You learn from what you do, the errors of commission, the things you do and say positively, yes, I'm going to do this, and it doesn't work out. Well, you learn not to do that again, or you learn what you wouldn't do in the future if given the next opportunity, because you will get a next opportunity. There are very few situations in business where it's what Jeff Bezos decides is a one-way door, as you have to make a decision now. And there's no way you can go back from it. Those are very rare.

And everything rests on it, right? It's almost never like that.

Right. If you're on a spaceship to Mars and it's pointing Mars or Venus and you point towards Venus, that's sort of a one-way door. But that's a very rare choice in life. In business, you almost always want to preserve the opportunity to go back and do that. And you will very rarely be presented with the one-way door scenario. So if you limit those and you learn from your failures and you learn what not to do based on what you've already done, you will be in great shape. And it's a good way to, again, to learn from the things that you've done in the past, just like you do learn from everything that you've done in the past.

There's very few— there are very few situations in business that are actually like instantly catastrophic.

Right.

I mean, honestly, think about it. I'm sure there are, and I know that we'll get flooded with people who'll say, well, I did this and blah blah blah, this happened to me and whatever. And I'm not saying that it never happens, okay? But I am saying that the odds are with you significantly, okay? That if you are paying attention and that you have surrounded yourself with relatively good people, right? And that you are, uh, that you are a student of your industry and a student of your own business, okay? Then these things, the failure, failure on the, on the scale of which we think about it, probably will not happen. Right? Right. The, the, the, the, and I forget who said it, same thing. It's like, it's not the failure that happens in business isn't, is almost never about one decision. It's about a series of decisions that were made in, in error in the wrong direction. Yeah.

Right.

And also, and also bad luck. Right? You can never, you know, don't ever mistake— not a mistake, but bad luck and things happening that's completely external to you. I mean, imagine if you had started a bar restaurant in February 2020. You actually know somebody who did that, but required a lot of people to get together in close proximity as of April 1st, 2020. You were going to fail no matter how wonderful the burrito was or how excellent the drinks were that you were slinging at that restaurant. There is no opportunity for success in that, in that example.

And you can't do that by Zoom, right?

Yeah, exactly. And again, it's another— yeah, it's another point of, you know, I've been in a situation where there was that, there was the, the one-way door scenario. We were going to get bought by Firm X or Firm Z? And half the people wanted Firm X, half the people wanted Firm Z. And I was on the wrong end of that, that decision. And it was okay. Like, I've tried my hardest to convince, to cajole, to get angry, bargaining, all of those. I went through all of that anger and all of that process. And I was, I was just, it was decided that we were going with the other firm.

Right. And the great—

at that point I failed.

Right. No, but, and the thing is that you get to take with you the fact that you were right.

Exactly.

So the failure happened, but you, it's not personal to you because you were against it and knew it was a failure going into it. Right. But the hard part is coming out of the thing with when the business is gone. where the employees have left, where you, where, where you owe people money, right? Where clients are coming to you, where's my project, blah blah blah, and the whole thing, and you've got no one to service it because you— because the, the, the, the— because the whole thing has gone completely belly up, right? And you're sitting there going, and, and you, and you know that it was not this one decision that I made yesterday.

Right.

It was the decision that I made last February and the decision I made after that. and the decision I made after that and the decision that I made after that that got me to the place that it got me. And, and again, I don't— there were outside factors. There were also me factors. There were also me, you know, not raising my hand for help. Right?

Yeah.

And I think that's one of the things in, in which we also learn as we go through this stuff too, is, is that there is, there are There are experts at certain things, people who have spent a lot of experience doing things and, and, and, and getting good at certain aspects of business, and that you should be, as a business owner, you should be in, you know, when it comes to a need that you have, you should be in touch with the experts that can help, you know, with that particular issue.

Yeah.

If that issue is growing your business to a value, you know, and selling it, Or if it's helping with a specific marketing challenge or a problem or whatever, or a sales thing or an HR problem or a legal issue, right? That's why these experts exist.

Yeah. And, and, and to build on that, right, just like you wouldn't file your own taxes for your business, or maybe you do, but you don't— maybe if you don't, if you don't feel comfortable doing that, you wouldn't conduct surgery on yourself. You wouldn't represent yourself in court, at least, you know, most people wouldn't. Um, there are certain things that, you know, when you say this all the time on podcasts, what got you here won't get you there. And what got you to a point of having a successful business, and you could be making a series of just bad decisions, which is why you need to have a network of people around you, or a business partner, or, or a consultant, or someone who you can bounce ideas off of that can give you constructive feedback and can be honest with you. Because when you're a successful entrepreneur, you've made it past most people in life. When they're— when they're— when— if you've built a successful business from nothing, most people don't— aren't able to do that. So when you get to that point in life, you think that you're making all the right decisions. And if you're not bouncing those ideas off of people, or the— or the things that you make That, that again, as Joe said, it's not one decision that makes— that marks a failure. It's a series of decisions, which is why you need to bounce ideas off of business partners, consultants, lawyers, attorneys, tax people to make sure you're making the right decision.

That's exactly right. And to bring it back to something that you were saying before, you know, we have a client who has been, you know, is a turnaround situation.

Yep.

Right. And, and basically what we're trying to do is basically bring this company back from the brink, not because of the decisions that were made as a company, but because the market is literally eroding. Right. Nothing to do with them. Just the ability for the be— for that, that the, the market that they've been playing in for 40 years as a result of the pandemic and some, and some technology and some other stuff, the business is not there anymore. And it is, and in fact, that it's getting worse and worse and worse. And there's no, there's no, there's not going to be a change to it. Right? And so that requires a pretty significant set of, of, you know, of plans to be able to recover from something like that. Right? Now, you can notice that stuff and you can see it and you can wait too long.

Right?

You can wait too long. And that can be a decision that, that, that potentially contributes to a kind of catastrophic, eventual kind of catastrophic event. Right. But if you— but if you're smart enough to sit there and say, I see this happening, I need right now to gather whoever I can gather around me who I can trust, to your point, and start to figure out what do we do about this. And again, it's going to be your employees and your, your, your, your chief of staff or your next in, you know, your, your right-hand person, you know, whatever. That's going to take you so far. But when it comes to most things that are out in this world, getting an outside opinion on something where you're not tied to the culture of the company, where you're not tied to the institutional knowledge that exists or the habit that's been going on, or this is just how we do it or whatever, and you can break out of that, that's where you can start to get new ideas and new information. And you can start to see things in a potentially in a different light. And our client is a hero to me because she did what I couldn't do when my business was in the same situation, which was— right, right— I didn't stand up and raise my hand and say, somebody help me. Right?

Right. Because again, there's that fear of, uh, of not— of being perceived as not knowing what to do. Whereas in reality, the reality of it is Yeah, you may not know what to do, but at least you know that you don't know what to do and you're looking to seek help and counsel and guidance from other people.

It goes back to what we were saying before. We all, as human beings, we all have strengths and weaknesses, and we can improve strengths, right? And we can potentially even get worse at things over time. You know, that happens too, right? Especially physical things and stuff like that, right? I know glasses, you know, things like that. I never had eye problems, my eyes, until I turned 40 years old, you know. But the idea is that, you know, we are— it's one thing to say, look, this is not— I don't know about this and I need to get help. But it is also just as true that you are probably a pre— you are probably an expert in what it is that you do, right? So in order to deliver a service or a product to somebody or whatever, you have to be an expert in that product or service. And so you are. And that's where your expertise lies, right? But your expertise probably— and maybe there's an aspect about that business that you lean towards because you know it and it makes you comfortable or whatever. I'm good with numbers, and so I like the, you know, I like the spreadsheets and whatever. And so I'm okay with that, even though it's not the core, the core thing I do every day. As the owner, I know I have to do this, and so I'm okay with it. But then you get people who are like, I never look at the books because it gives me agita. Or it makes me feel anxious, or things like that, which are like, okay, like, I understand the feeling. And I guess as long as you have someone that you trust on staff who's taking— who is taking care of this stuff, then I guess that's okay. But at the end of the day, when— especially when it comes to exit planning and being able to sell your business one day, your ability to not know what this stuff is or have an aversion at looking at the spreadsheet or whatever. Is gonna be a problem for you. Like it's gonna be a problem. Okay? And unless you have a way of being able to to to to share that or make it different, you've got some kind of amazing CFO like I do, who is basically you know who is really taking care of this stuff and is really in is doing making good decisions themselves. You know you're you if you are not paying attention to this stuff, this is how stuff goes off the rails.

Right?

It has more to do again. It's it's it's. Again, things that are outside of your control, not necessarily the decisions that you make specifically in the moment, but the decisions about who you hire, the decisions about bringing on your cousin because they're cheap or whatever, or the decisions that you are making about, you know, I'm still gonna— I'm gonna go another year before I hire a chief financial officer because I don't— I, you know, I really rather have that extra vacation myself than put the money back into the business. Those are the things that, again, may not hurt you right away either, right? But they will come back and they will haunt you, right? Because, again, it's just about this. To me, there's no other— there's no greater failure, okay, in life, okay, than not being able to stand up and say, I can't.

Yeah, yeah.

I mean, and again, and I'm not— I'm not— I'm saying this because I'm not the person who can do that all the time. Like, I recognize that about myself. I have. I've gotten better at it, right? I have learned over time how to address this stuff and how to look at the world in a way that helps me survive, right? But also in a way that I think is true, which is that this notion that we're going to go through, that I can do all this myself and carry this whole load, is actually a trauma response.

Yeah. Like, just as an example of today, What I did earlier today, right in the morning, I talked to an accountant. I talked to someone who could potentially help us with some specific accounting things that is not my area of expertise right now. Could I have figured it out? Yeah, I probably could have. Would I have done a good job? Maybe. But like, the risk, the risk of me doing a bad job not only risks like me, like my, my issues, it risks Jo. Our other business partners, and it risks the financial health of the business. So do I have that much of an ego that I think I should do everything and that I know everything about finance and accounting and tax, that I'm going to take that burden on and take that risk for Joe? Maybe Joe's not comfortable doing that. Like, the risk of me screwing that up was like, no, there's absolutely no way I want to screw this up. Therefore, I'm going to need an expert.

I—

and it wasn't out of a failure— fear of failure. It was out of fear. I know that I don't know how to do this. Therefore, I'm going to look for expertise that can help me be more productive at my job by focusing on what I can do.

Yeah, it's a healthy business decision, right, is to look around and go— and also it's time, right? It's like, okay, is this where my time is best spent, you know, or should my time be spent, you know, doing a podcast with Joe? Like, you know, where's the priority here?

No.

But the idea is that I think that, again, it's a great point. The ability to say we take for granted the things in which we're like, well, this is just— we just assume that this is good. I don't change my own oil. I know how. I worked at a gas station for years. I know exactly how to do it. I can change— I could do a transmission job on your thing right now. Still to this day, I have it in my brain. I know exactly what to do.

Right.

But the re— that doesn't mean I want to or that I should or that, right, or that's a good idea for the car or the driveway or whoever's going to park behind me or whatever that is going to happen, you know what I mean? Like, in that situation. And so I outsource that, you know. Yes. I take the car to the place and I pay the money and I have it done and whatever, and it's done. And they're really good at it because they do it every day and they know what they're doing.

Okay.

At home, all right, I don't cut the lawn anymore, but you know what I still do? I do the leaves. There you go. You know why? Because I like it. I like to do the leaves. I like the start of it, the cathartic thing of clearing my brain and that thing. It's very much a— got to be an ADHD thing. But anyway, this notion that I can make this lawn free and clear of things and it gets cleaned up a nice little bit, I just— I find that ironing is another thing that I always— I used to like, you know. It's just smoothing it out and making it all nice, nice. Like, that's great. And, and because I have— I, I— because I know that, I schedule the time, I make sure that I can do it, you know, whatever. And if I got into a bind or whatever, I would ultimately go to the landscaper and say, hey, can you do it this week? Or whatever like that. But the bottom line is that it's— again, it's not— it's, it's— I have a strength in that. I actually have a process for it. I kind of enjoy it. Like, I could come to your house and I could do your leaves really well too. Like, I like that about me, you know what I mean? Like, I do. And the— and what I'm trying to get at here is to say that that's okay too. Pick the things that you're good at, lean into those things that you're not— that you are good at, and then allow someone else to leave the room for someone else to come in and do the things that you're not comfortable doing or that you don't like to do so that you don't— so that the business doesn't suffer as a result.

Yeah, and over time, what you just did is you gave us an example of learning over time of A, what you were good at and what you'd like to do, and B, by outsourcing things, you learned out where you're not good at or you don't like to do. And that's the stepping stone. That's taking failure, or that's taking a thing that you're not great at, learning from it, and either doing it better in the future Or realizing that it's not worth your time. You don't want to be an expert in this, and you're going to outsource it. And failure should not be looked at from the perspective of a point in time and that it ends. You don't— very rarely in life do you fail and you can't do anything else after that, right? I mean, yeah, if you go to jail—

Not really an option.

Right. Well, if you go to jail, okay, and you've done something that bad and you've gone to jail, Okay, there's a, there's a period of time, but, but in that period of time, you're being rehabilitated. You, you will come back into society even if that does happen, and that's very rare. But most cases, you fail and you must get up the next day, right? It's— you get up, you have to put your pants on and put your shirt on and go to work. And you don't forget about it because you don't want to forget about those failures, but you do have to learn from them. Because you have to go on.

That's right. No, that's, that's exactly correct. I mean, it's an excellent way of putting it. I mean, you, we, no matter what befalls us, we need to get back up the next day and continue on. And, you know, and, and the reality is, again, that can be hard and it can take a while and it can take processing. And it's important that when you do have failures of that magnitude, that you do take the time to process them the correct way and put them in perspective. And understand. My father-in-law has an expression about flushing it down the toilet. You know, it was when I went through that thing, he came to me because he had been through similar things and said, "You know what?" He's like, "I know how hard this is going to sound crazy." He's like, "I know it's going to be a lot easier said than done." He but he's like, "You've got to just flush this down the toilet. You got to put it down and just know that it had that was it. It was a thing that happened. It happened, you know, to you, not necessarily because of you." Because here's what we do, right? We make it part of who we are. And failure for so many of us, okay, is either something that we are so afraid of that we do everything we possibly can or not try things in order to not fail, which is just crazy when you think about, you know, being on the planet as long as we are. But also the notion that when you— it's not It's failure isn't you. Failure is something that we, that society has decided positive or minus, plus or minus, that this is, would be categorized as a failure because it did not work out as intended. But I can tell, I can point to you, I can point to 100 examples right now of businesses that started out doing one thing. and failed so hard that they had no choice but to pivot into another, which is where they found their success. And one of the things that comes right directly to me, I think, is like, um, like the Spanx lady. I think, I, I think what, Blake— Sarah Blakely or whatever her name is.

Yeah.

Right. Something happened there in the whole thing where it was like a colossal failure or something that just turned into a pivot that made it into this whole other thing and gave them the focus that they needed. Like, so much of this, of what we go through, and we talk— look, our job, right, in life is to help people plan, right?

Well, and yeah.

And we'll be the first people to tell you, like you said, that a plan will get you so far, right? The execution of that plan is the thing that goes every day, and then, and then the ability to adjust that plan on the fly. Right? It has everything to do with success. And, and what I want to teach people and what we've been telling the people, and we bring people in as clients, and the whole thing is the first thing is we got to set your expectation, right? So the idea is that you are— what happens to us all the time is that we have people come in and the first thing that happens is that we deliver them bad news. Because the first thing—

Almost always.

Almost always is I'm sorry, but I don't think your company is actually worth as much as you think it is, or your company is not as sellable as you think it is, or as you'd like it to be.

Yeah.

Well, but then we followed up, right, John? We followed up with, with right, right away with, but here's what it can be worth, and here's how sellable it can be if you're able to pull these levers, right? And so the point is, is to say is that, and there's no guarantee, right? There's no written guarantee. There's nothing that we can't say that for, you know, for sure. But what we can say is that we've got enough people in our network, and we know enough people who've been doing this long enough to understand some basic fundamentals about how these things generally work, right? And I stress the generally part because there's no such thing as a one-size-fits-all exit, exit plan. There is, there's no such thing as a copycat exit plan. The reality is that every single exit plan we've ever done has been completely unique to that individual.

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And the reality is, is that setting that stuff up and understanding that you have a plan to execute is the first part of the battle, but the next part becomes even more important. Right. Which is to say, okay, now I've gotta execute on these things to make, to actually get my value from here to here. Some of them are gonna be easy and they're gonna be stuff that you didn't even know. And we're gonna be like, wow, they're gonna be kind of happen overnight. And then other ones are gonna take months or years to potentially to complete.

Yeah. And, and, and along the way, the, the, the, the, the exit plan that you create on day 1 will by definition not be the one you implement on day 99 and 100, right? There's all these terms for, for, for things that change and pivots, right? You talk about— people talk about pivots in, in Silicon Valley. Do you know what a pivot is? A pivot is someone that realized that they made a mistake, they failed, and in order to keep the lights on, literally keep the lights on in the business, they pivoted and switched to another business. And switch to another business model or another customer base or whatever it happened to be. And pivots are the positive side, or are people pitch, because failure has that societal sort of connotation to it that you don't ever want to avoid it. So we've come up with all these other words for failure, and pivot is one of them. I mean, look at Guinness. Guinness Stout started as a mistake. And what if Arthur Guinness had said, had brewed that first batch of Guinness and said, oh my gosh, I burnt this, this Guinness, what do I do? Well, instead he took what he made, tried it, gave it to his friends, and sold it. And that became the beginning of, you know, a stout and a beer that's world famous now, probably one of the most popular beers.

The most famous stout that there is, no question about it. It's one of the biggest brands.

And I guess Joe's point was, was that you are going to implement your exit plan, you are going to come up with the things you think you're going to do, you're not even going to do a couple of them, and you're going to adjust the ones you have come up with. But the way you did that was you wrote something down and you started doing it, and you learned along the way of, oh, I didn't really fully define the problem correctly. But yet you did solve an issue that was within your business because you wrote it down and you executed it.

That's right, exactly. And, and the ability to be able to get the— bring the people to bear to execute it or do the things or the, you know, have the wherewithal, the resources financially, otherwise, whatever, to be able to actually implement those things is— there's no question— is part of the game. I think what— I think the thing that we are, we are preaching and that we are seeing success about is the fact is that You will not fail in your exit if you have help, right?

True.

Because it's not— failure really isn't— becomes not an option. Because the reality is, is that if your business is healthy, if your business is sellable, if your business has, is, has a good valuation and, and, and is, and is the kind of business that other people want to have and run, then your business will sell. It will. Right? There's very few situations in which you could say that no, there's no— nobody in this industry sells their company, right? That it almost never happens.

Correct.

And so, look, that's not to say, to be clear, that there aren't businesses that sell, industries that have a higher propensity to sell than others. There's no question about that, right? But the reality is, is that if you have decided If you can make the decision to say that I have to, I have to look at, at my exit plan as a real thing that I must do in order to, to, to, to, to have the trajectory of my business go to the place I want it to go, right? Then the next thing that follows is, how do I do that? I go and get help. I get a broker. I get an advisor like, like Exio and ExitEngine. I, I take a course at ExitEngine. I do this stuff, whatever, whatever I can do to improve My my understanding, my my learning, whatever. That's my duty to myself and my company.

Okay.

And if once I do that, you will quickly learn. Okay. This can be done. I can do this. Okay. You've been through harder things. You've gotten like he's like John says. You've gotten the business here. That was the hard part.

All right.

All you need to do now is have the expertise to help guide you through the next part. Because again, you're not an expert in that. You've never done it before, right? You're going to come across all kinds of people. You probably get— if you have a successful business of any kind, you are probably already getting emails all the time from people who are saying, hey, what's the value of your company? Would love to talk to you, whatever, right? You know, right?

I'm just raising my hand saying, yep, that happens to us, right?

That happens to us all the time. All the time. So the point is, is that it's that— and then that alone, that's a good sign. That can make you feel good or whatever. For some people, might scare the scare the crap out of them, right? Oh, I don't even. I don't know anything about that. Like, what do I do about? How does that even work? You know, all that stuff, right? But the idea is that again is that it's a matter of if you're the the the failure of selling your business only comes because you because you will take no positive action towards that end, right? Like in most cases. Okay. And there, there are a few exceptions, but in the, in most cases, you have a, you, you can get to a sellable business.

Yes.

It might take a while, right? You might take a lot of plotting and things, but it's possible.

You might have to do all sorts of work. And a lot of the people that we work with have to do all sorts of work. They, they, they have this perception in their mind that they think that their business is worth $9 million. And they're only— we tell them they're only gonna get $5 million for it. And we tell them, hey, you can get to $9 million, but you got to do X, Y, and Z, and A, B, and C over the course of 2 years. And yes, you will be able to get that $9 million. So then we come in and help them do those things.

That's right. And the reality is, again, that's because they trust us and allow us to do it, because our clients are the ones who say help. Yep.

Right.

Not what I do. Again, you're a baker. You make the best bread in the thing, whatever. That's awesome. You know how to do it. You've gotten really good at it. You're efficient. You're—it tastes good. You've—you've gotten the volume up without disturbing the quality of it. Like all that stuff is really, really important stuff, right? But it's not the same way. It's not the same recipe as—as—as looking under the hood at your business and figuring out. that your customers are— that you're spending way too much time over-servicing customers and being unprofitable, where you are sacrificing some of the things that you already have, you know, that you already have, where you're not paying attention to things like that, right? You can't do that. You're baking bread.

Right. So, and so, yeah, and I think, you know, we're getting to the point, we're getting to the sort of end of our episode here, but You want to— some key insights we want to take from this is, again, you want to view failure as a learning opportunity, right? View the challenges and the setbacks that you have along the way as something to learn from. You will inevitably have them. Everyone does. No one, no one, no business does not have adversity and overcome problems. It's just, it just doesn't happen. So view the failure and the challenges and the problems you have As something to learn from and to avoid, uh, in the future.

That's exactly right. And again, the, the— and what I would say is that, you know, what you want to do as an entrepreneur, especially when you guys are— when you're starting out, and this would be frankly true no matter what age the business is or how— whenever you're doing something new, the idea should be to fail fast. Let's get the failure part out of the way. Right. Expect to fail. Go in knowing you're going to fail and that in that failure you will find the success. Yeah. And failure and success are completely, are inextricably linked.

Yeah. And, and, and words we haven't used on this, but are, but are important are persistence and resilience, right? You might, every business owner knows, every entrepreneur knows that they must be persistent. You're starting a new company, you're doing a new product, you're doing whatever. No one knows who you are. Therefore, you must be persistent in order to be successful. And resilient— they're, they're very similar words, but they're different, right? Resilience is you will continue, you continue in the face of challenges. You will have them know that that's going to happen and continue to persist and be resilient throughout the process.

Exactly. And look, to be clear, that does not mean that you are— that, that being persistent, you know, at the same thing over and over again where that's not working out, right? At some point, there is a time at which you need to pull the plug on something that's not working. Okay? So that's the— so that's just to understand that there's something in there too, right? There's a measurement for that. And again, we have, you know, in our thing, when we started this company, whole thing, we discussed how long we had To— we felt like we could spend, right, in terms of getting this up and running and getting it going or whatever. And those are the kinds of decisions that you have to make when you sit down and go, okay, are we going to take on this new challenge? Yeah, we're going to try it. Okay, how long are we going to give it?

Right.

Right. Because what you can't— what you don't want to do is failure after failure after failure after failure. That's not— that is not sustainable. But what is sustainable is trying, regrouping, Trying again, changing, but not, not just, not just trying again, but changing, right? All right, let's do this differently. Let's, let's turn this lever instead and let's see what happens. And building a place, a space for you to do that.

Yes.

So our marketing and that kind of stuff was a, always been, has and continues to be a, you know, something that we continuously monitor and continuously change and look at and the whole thing. because we know how important it is to, to the success of our business. And we're constantly looking for more efficient ways, less expensive ways, right? Ways that, that get more information into the hands of the people we want to talk to, whatever that stuff is, right? And so our, our entire premise has been to, no matter what we do, let's fail quickly.

Yeah.

Get it out there, put it out there. Don't even— doesn't even have to be right in our minds when it goes out there, because we know it's going to change, because we know that a million people are going to see it and they're going to comment on it, and we're going to get that information. We're going to know how to change it, right? And then the next million people will get a different version of that and see that, whatever. Okay, so that's good. So, but the persistence though, like you said, the persistence and resilience are also inextricably linked because the persistence is about keeping your head down and showing up every day. Because you learn the things you learn by showing up every day, right? And you see, oh wait, I thought it was going to be this. Before we launched our very— if you remember this, before we launched our very first marketing stuff for Exit Engine, we had this whole notion of what we were going to say and headlines and what we were going to do. And we had one phone call with somebody, I don't remember who it was now, one phone call with somebody who basically went No, no, no. It's that, by the way, you know, the message is like within people's minds is this, right? And we went, oh shit, right? And literally overnight changed everything because we knew immediately that was the correct thing to do. We never even got to the failure because we saw it. We were lucky enough to be able to catch it, right? Like in a way.

I know exactly who it was. It was who we had. I talked to him very recently, by the way.

Yeah, yeah, exactly. But the bottom line is that, again, is that it's a matter of But the reason that we were able to get that information was because we were showing up every day and talking to a lot of people, you know, and we were out there and we were living it and doing it, not because we were sitting away in a basement, you know, whatever, just doing it ourselves without any, you know.

Right.

And so the, the, the, the thing I'm— the point I'm trying to make is that, you know, when it comes to persistence, your pers— your, your, your persistence of showing up every day and, and believing in yourself and believing in the people that you, that you have around you and believing in your, in your product or your service, that's really important. That is like, that's everything.

Yes.

But the ability then when it fails to stand back up and go, let me change this, that's resilience. And that's the thing that every entrepreneur needs to have both those things, right? And in fact, it's probably innate in you if you are even taking the risk at all. These 2 things are probably Right. Pretty, pretty, you know, important personality traits, you know.

Yeah. And you need, you need to be hard-headed to a degree as an entrepreneur, but you also need to be able to, as Joe mentioned earlier, to look and say, like, to take a step back and say, man, I'm hard-headed and I'm stubborn, but I have to be able to learn from these experiences too and take, you know, the people who've gone, who've worn the path before you and gone before you Make sure you learn from them too. That that prevented us from making what we think was a cata would have been a catastrophic mistake and cost us tons of money. We we we learned from that person. We we listened to him. He made sense, and we took his advice and took it back. We had a call right after that call and said, "We got to change everything." Um, so yeah. So well, we appreciate everyone being here today. If you have a story. about growth, about failure from growth, um, send it to us at info@myexitengine.com. You can send it to joe@myexitengine.com or john@myexitengine.com as well. Um, we may talk about it in a future episode. We'll give you credit, or we won't talk about it, and we, you know, won't give you credit if you don't want to, if you mention that in the note. Um, but please join us again. Please subscribe to our podcast. Leave a review, share this podcast with someone you might think would find it interesting, like an entrepreneur that thinks that failure is— that they're gonna fail in their company because they're in a particular challenge right now. But do that, share that, like it, and give us some feedback on what you think.

Awesome. Thanks so much, guys, for joining us on the podcast today. We really appreciate it. This is the Exit Podcast. I'm Joe, that's John. Have a great day, John. Really appreciate it, man.

Thanks, Joe. Take care.