Innovation Mindset For Business, Acquisitions, and Exits, With Roland Frasier

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You're listening to Business Lunch with Roland Fraser. This is your seat at the table. Welcome to the show. This is the producer Darren Clark and we are back with another snack sized episode from Roland Fraser. Thank you for tuning in and we appreciate your time and appreciate you hitting the subscribe or follow button wherever you're listening. Today, Roland will help you think more creatively, axe assumptions and achieve better win win scenarios in your deal making. But before I hand you over, make sure to head over to our website businesslunchpodcast.com and sign up for our weekly memos. And also if you want to go deeper with Roland, just hit the Epic tab on our website or go to businesslunchpodcast.com epic and you can find out all about Roland's five day challenge. All right, here's Roland.

I want to talk about mindset and I usually cringe when people say let's talk about mindset because it's, you know, you should think happy thoughts and team and, you know, climbing mountains. That stuff is actually, I think, important, but I don't like the way it's presented. But what I do think is important is that you have some creative approaches or some systems for thinking creatively, particularly with business and acquisitions and exits. Because you are, you are in a deal either acquiring something or selling something and you have a whole bunch of professionals and other entrepreneurs or sharp people on the other side. And if you want to get what you want and help them get what they want, you need to think creatively. So that's a big theme for me and I want to give you a couple of tools that I've found to be very helpful at doing that. So what I would encourage you to do is to think about things three dimensionally, to not assume the rules that you have maybe assumed all your life, or don't even assume that the rules that you were told apply last time apply this time because they're always changing, particularly in acquisitions and investment banking. So the thing that I want you to think about in your businesses is what are the assumptions that you have that are impeding you right now? What are the assumptions that you have that you're making every day that are impeding your ability to exit, grow, scale or get leverage in your business? The thing to think about is that most of us are focused on optimization. We talk about conversion rate optimization and optimal living and all of those kinds of things, but really optimization is a linear growth pattern and innovation is exponential. I want to really focus a lot on innovation during this time. I do one More thing here. I want you to go through this problem with me and tell me if you can solve it. The police receive an anonymous tip and raid a house to arrest a suspected murderer. They don't know what he looks like, but they know his name is John and he's inside the house. And the police bust in on a carpenter, a taxi driver and a mechanic and a fireman, all playing poker. Without hesitation or communication of any kind, they immediately arrest the fireman. How do they know they got their man? We assume that carpenters, taxi drivers and mechanics are what are meant, right? So I don't tell you that, I don't tell you that to say, you know, look, look how smart I am or anything like that. I show you to say there are prejudices and other thought blocking patterns and beliefs that we have that will stop us from doing things. And that means think about what preconceptions are holding you back and what factual assumptions do you believe that might not be actual facts and then even the language that you're using. Tony Robbins was a client of mine for when I was practicing law and now we speak on his stages at business mastery. And he was the person that first introduced me to neuro linguistic programming, which is what you tell your brain, the computer, the information that you put in, right, that's what it processes. And so it's very important to provide it the information that will lead you to the place that you want to be. So be careful how you are speaking to other people and how you are speaking to yourself when you're going into all these deals. So is anybody here familiar with first principles reasoning? In Elon's word, it's boil things down to their fundamental truths and then reason up from there. Most of our life we reason by analogy, copying what other people do with only slight variations, right. So for him you start according to him, and I think he described it well, identify and define your current assumptions. So the very first thing we need to do is identify those assumptions so that we don't end up not recognizing that, that perhaps it's a woman or perhaps there's another way to go around the maze in our business. So one of our war room members, Jerry Conti. Jerry, said I need a fund to acquire luxury real estate properties. And that's his assumption because he rents out through Airbnb luxury real estate properties and wanted to build a portfolio of those. And then another friend of ours who's in a mastermind that Jason and I are in called Board of Advisors is a guy named Cres Dennert he saw people burning baseball bats at a school one day and said, gosh, I wonder if there's something you could do with that. Apparently I didn't realize baseball bats go bad, but apparently they lose their springiness or something. So he built this business called dugout mugs by taking those away instead of letting them burn and be wasted and turning them into mugs. He sells them all over the country now in stadiums. He has licenses from major league baseball and such and sells them. It's like $50amug has to charge a lot because it costs a lot to make them. So step two is question each of the assumptions that you listed and say, is it a valid assumption? Because it allows you to break the problem down into its fundamental principles. If you're saying, is this assumption correct? Then you're thinking beyond the assumption, right? You're actually transcending that assumption. So for Jerry, I ask him to think, is ownership required to achieve his core objective? If he wants to accumulate a bunch of houses, does he actually need to raise a fund to do that? And for Chris, it was, what are the material components of a dugout mug? What's the commoditized cost of the wood, of the labor, of the burn in that has to be done to burnish in the brand? Then step three is create new solutions. Well, Elon did it three times pretty well for Tesla. He said, if I'm going to make electric cars, is it more important to be a carmaker or is it more important to be a battery maker? And so he has become the leading manufacturer of batteries and has innovated to the point where the cost. When he first started Tesla, per kilowatt hour for a battery was $600. And now last time I checked, it was 80. He's probably got it down more now, but that was revolutionary. And now he owns that industry, which is pretty cool. Identify what is the business that you really should be in and are you in the right business? And then with SpaceX, they were like, everybody was puzzled, how do we lower the cost on these rockets and everything? It's like, well, how about if you use them more than once? Pretty basic, right? And then what if we could send money by email? So three huge businesses that he was able to build using this first principles reasoning. So for Jerry, I asked him, I said, could you perhaps find somebody that already has a fund and just partner with them? Then it saves you all of the hassle. Raising funds is not your core skill and you've got everything you need to buy them or Maybe you could find a bank that already owns a bunch of real estate properties and show them that this is a better way to monetize it than liquidating them at sub market prices. Or maybe there's a broker that you could partner with that would be able to do this for you. Lots of options. And then following Elon's lead with the commoditized costs of the elements of a battery for Chris, it's like, look at all the different individual commoditized costs of those things that make up that thing. And maybe you don't even need to use bats. Maybe the mugs just have to look like bats. I mean, do they actually have to be recycled bats? Is that a big selling point for you? And maybe you could source the wood and the manufacturing and everything and do it overseas and take your cost down 90% because I think you could.

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