MBA1934 Why Playing It Safe Can Be Risky

Let me tell you about Intuit QuickBooks. When I was starting out my business, I remember sitting at my desk late at night, not working on my business, but cleaning up numbers, tracking and reconciling payments and wondering how this became my life. But once I automated the admin side of things, of my finances, those nights had disappeared and I felt a whole lot better. Outdo it with Intuit QuickBooks. QuickBooks is the trusted end to end solution that businesses rely on for getting paid, managing finances, paying employees, finding new customers and more. QuickBooks provides a team of AI agents and trusted experts. So doing it yourself no longer means doing it alone. Their payment agent gets you paid faster, their customer agent finds leads, follows up and secures more sales, and the accounting agent automates and categorizes transactions. Get your critical business jobs done with QuickBooks on the Intuit platform. Ready to save on new tech? It's time for Dell Tech Day's annual sales event celebrating our customers with fantastic deals and benefits. Perks include Dell rewards, free shipping, premium Support and more. PCs like the Dell 14 with Intel Core Ultra processors will help you do more faster and with a premium suite of monitors and accessories, you can upgrade your whole setup with amazing savings. Visit Dell.com deals. Hey oh. Welcome to the hundred dollar VA show. Because when you grow, so does your business. That's why we deliver daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of Webinar Ninja, an independent software company I started with my co founder back in 2014. And in today's lesson you'll learn why. Why Playing it safe can be risky. Many business owners practice if it ain't broke, don't try to fix it. And that's mainly fueled by the fear of taking risks, of changing things and not getting the same results or possibly getting worse results than you're getting right now. The reason why this is flawed thinking is because the world around us changes and we gotta change with it. Markets change, economies change, the needs of our customers will change. And if we don't change with them, if we don't take leaps in our business and take those risks, calculated risks, then we're going to be left behind. So many businesses, big or small, didn't take risks, didn't take steps forward in their business, changed with the world around them and it became the demise of their company. The key here is recognizing this and taking those risks properly and at the right time for your business. I'm going to Give real life examples of what happens when you don't take risks and what happens when you do and do it properly. Listen, I know there's a lot at stake and you don't want to risk your main income, your business, your revenue. But you can get here by not taking action, by not taking risks. You took a risk by starting a business, and it's going to take risks to take your business to the next level. We get into all that and more. So let's get into it. Let's get down to business.

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The Kodak company was a market leader for decades in the photography space. In fact, it was common to say it's a Kodak moment when it's a great moment to take a picture. Yes, I'm aging myself, but it's for good reason. Kodak was very late to the game when it came to adapting digital photography. They dismissed it. And in fact, many reports from their higher executives say they didn't want to risk the market share they had on traditional photography with film. This is where they make all their money. Their business model allowed them to make money on the sales of cameras as well as film. So they had customers buying film constantly to be able to use the camera. They just didn't like the idea of their customers just purchasing a camera once and nothing after that because it's all digital. They just didn't adapt. They just didn't want to take the risk of changing their business model and it cost them their business. In 2012, they had to file for bankruptcy from market leader to bankruptcy because they were afraid to take a risk. They were afraid to innovate. They had a lot to lose. So they thought, hey, let's not lose it. But. But they lost it because they didn't take a risk. Interesting. Kodak is not alone. We all know the streaming service Netflix. They came to town, started off sending out DVDs to people, and then they turned into a streaming service. Their biggest rival was Blockbuster Video. Blockbuster Video was the largest video rental service in the world. Blockbuster refused to go and take a risk, innovate, change their business, and go into online streaming. They thought, it's gonna be a fad. No one's gonna watch movies on their computer. They thought and didn't wanna risk their brick and mortar franchise business of VHS and DVDs. In fact, Netflix offered Blockbuster a deal to buy them out. And Blockbuster totally refused and snubbed them big time. Blockbuster at its peak had over 9,000 video rental stores, employees and over 65 million registered members. But in the early 2000s, they just couldn't keep up with the advancements of Netflix. And it forced them, you guessed it, to file for bankruptcy. Because they had over $900 million in debt, they doubled and tripled down on their business model. They thought, if it ain't broke, don't try to fix it. Let's continue to build more stores. But more and more people were going with Netflix, ordering through DVDs via the mail and then eventually signing up for their streaming service. Never having to leave the store, never having to worry about late fees, never having to deal with disgruntled employees at the shops. Blockbuster refused to take the risk of innovation. They even refused to get in a room with Netflix to cut a deal to buy them out. They had their future on a silver platter, and they just did not do it because they didn't want to take that risk. Listen, no one is 1000% comfortable with risk, but we all have to take them in our business. We have to take calculated risks. We have to do the research. We gotta understand what we're getting into. We have to understand what the cost is of doing this change in our business. And what's the cost of not doing it? The opportunity costs? This is your job to look into your business and say, where is my business? Where is the market that my business lives in gonna be at in five years? Is my current business, my current offerings, my current pricing, my current services? Do they align with where the market's going? Look at your financials. Are you on razor thin margins? Are you actually making enough money to sustain growth and expand and grow, or are you just barely making enough to make a profit? Maybe you need to take the small, calculated risk of raising your prices so you have more room to play with, more margins to grow. Maybe you need to look at markets that are underserved. For example, our webinar software, Webinar Ninja, has a lot of competitors. Very few of them offer their product in different languages or allow the customer to customize their webinar pages and registration pages and forms and emails in different languages. We decided to implement this in our business, which is a huge risk because we're spending resources, we're spending time. We're not working on other features. We're working on this feature to allow our business to penetrate other new markets that are underserved. The Latin American market, the European market, which doesn't really get catered for because many software companies just offer English and many of their customers, meaning that webinar audience members for our customers don't speak English. Right. They speak their native language. And we need to make sure that our pages can reflect that. And by doing this small change, we are able to now expand in these markets. I say small change, but it was months of work and a lot of resources spent. It was a risk for us because we weren't sure what the response would be. But we did our research and we realized these markets are underserved. And we actually spoke to customers that we already have that are in those markets. And they told us through customer interviews, it would be amazing if you had this. Nobody's doing this. I'd love to recommend your product to somebody I know, but it doesn't have a way for us to create pages in our local language. So we got to work, and now we're able to expand in those markets because of this step, of this innovation, of this risk we took. And we just didn't take it blindly. We did our homework, we did our research. Your business is not going to grow. It's not going to scale by itself. You need to take steps forward. Just like you started your business with a risk that you calculated, that you researched the next steps to grow your business. Growing your business is almost like building businesses on top of businesses. It's graduating to the next level. Business is competitive. The marketplace is competitive. And if you don't stay on the offense, you're asking for trouble. You're asking for a Kodak situation, a blockbuster situation. You don't want that fidelity.

Active ETFs have the flexibility to shift and transform as markets do the same. So instead of just rising an index, they can seek to outperform it by adapting to market conditions and pursuing new opportunities as they emerge. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Markets can change in real time. Make sure your ETF can too. Learn more@fidelity.com ActiveETFs before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus, an offering circular, or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses Fidelity Brokerage Services LLC Member NYSE SIPC.

To wrap today's lesson, Take a look at your business. Take some inventory. Put some time aside this week to do this, by the way. Like, you know, spend two or three hours with a paper and pen and analyze your business as if you were buying your business as an outside person. What are some things you would change if you bought your business? What are some ways you would grow and expand? You know, when somebody buys a business they're like, hey, this business has got potential. I'm going to make a few changes, I'm going to take a few risks, I'm going to do a few new things and it's going to double in value. What if you did that? Exercise yourself to your own business. List a few options. I like to list three to five options of things I can do to innovate, to change to improve my business. It could be something like a packaging change, a pricing change, a service offering, exploring new markets like I mentioned. And from there I take a look at what is the risk versus reward equation for each one? What's the worst case scenario for each one? What's the best case scenario for each one? Which one am I feeling most comfortable to implement right now? And my advice is start with the one you're most comfortable with, right? Just get started. Get the ball rolling. The thing about taking calculated risks is that you get better and better over time. You get better and better emotionally about it too. You start getting more comfortable with this exercise. Don't get complacent. Keep growing, Keep improving. Thank you so much for listening to the Hundred Dollar MBA show. If you love this podcast, if you love today's episode. Hit subscribe or follow on whatever podcast app you use. Tomorrow's episode is Q and A Wednesday, where we answer a question from one of our listeners. We answer the question, how do I know my idea will work before I start investing money? We get into that in tomorrow's episode, so make sure you follow the show you subscribe so you never miss a beat. Before I go, I want to leave you with this. There are so many businesses that get to a certain level where, okay, they're sustainable, they're making some money, but they don't ever move past a certain point. They get stuck. And that has a lot to do with what I talked about today, not taking those next steps to build their business to the next level. That's a bad place to be in because it's very stressful. You're not growing, your expenses are getting more. You feel the financial stress of it all. You want to be in surplus. You want to be making more and more money every single month, growing, expanding and not stagnating. Because trust me, business is a whole lot more fun when you're winning. Thanks so much for listening and I'll check you in tomorrow's episode. I'll see you then. Take care.

Fidelity Active ETFs have the flexibility to shift and transform as markets do the same. So instead of just riding an index, they can seek to outperform it by adapting to market conditions and pursuing new opportunities as they emerge. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms. Just like any other etf. Markets can change in real time. Make sure your ETF can too. Learn more@fidelity.com ActiveETFs before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus, an offering circular, or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail in index as compared with passive ETFs. ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Fidelity Brokerage Services LLC Member nyse, SIPC.