3 Mindset Shifts That Separate Real Entrepreneurs from Side Hustlers | 006

Charles (: 00:22

to the Unsexy Entrepreneurship Podcast. I am your host, Charles Harris. I'm a CPA and I'm joined with my cohost Dr. Seth Jensen. And this is the Unsexy Entrepreneurship Podcast.

Seth Jenson (: 00:32

Okay, Charlie. So today I want to provide some alternative lenses to what entrepreneurship is. Okay. Cause I think the like popular impression of an entrepreneur just kind of is like distilled down into hustler. They're just hustling all the time. Like entrepreneurship is grind and that's a great, great way to think about it. But there's actually some more nuanced identities that I think describe an entrepreneur.

Charles (: 00:50

Yeah.

Seth Jenson (: 00:59

That might be surprising to some people and important to know before you take the plunge, right? So you might be like, I'm a hustler, but I want you to know you also need to be these other things before you're like, let's do it. Does that make sense?

Charles (: 01:11

Yeah, so do you have to be all of these different types of entrepreneurs or can you just be one?

Seth Jenson (: 01:16

I think what we're gonna talk about today, these are hats you're gonna have to wear in almost every single business. There might be some that feel more this than that. And again, to be 100 % fair to the hustler thing, that is true. Like it is a grind, that is gonna be part of it, but it's not the whole equation. So yeah, I'm gonna say yes. I think these are all essential identities to any entrepreneur.

Charles (: 01:37

Okay, so what's the first identity we're going to talk about then?

Seth Jenson (: 01:41

So there's a couple different ways we could describe it, but I'm gonna call it the problem solver. Okay, this is maybe one of the more obvious ones. But I think it's important to know that as you begin entrepreneurship, you're not gonna know everything you need to know to be successful. Like there's just too many things. Yeah, yeah, you're gonna wear a thousand hats, there's gonna be thousand problems that you could not foresee when you took the plunge.

Charles (: 01:57

That's an understatement.

Seth Jenson (: 02:06

And so you have to be willing to just constantly be solving the next thing, learning the next thing, coming up with creative solutions to things you just could not have predicted at the offset. And the positive spin on that is if you keep doing it, if you maintain that problem solving attitude, you'll get where you want to get 100 % of the time, right? So it's both ⁓ a negative and a positive. There are more problems than you could possibly imagine.

but there's always a light at the end of the tunnel if you're willing to solve them.

Charles (: 02:35

So on this idea of a problem solving entrepreneur, right? Does this hold true? Cause we, often are so far, we've mostly been talking about starting up a company, right? that zero to one phase or thinking of the idea and the problem solvers is great. But does this have to hold true forever? Is this a, if you're going to run a company, do you have to be a problem solver or is it just if you're going to be an entrepreneur for the first five years?

Seth Jenson (: 03:01

Yeah, no, I think it really never stops, it's intensified in those early stages because the rate of problems and the scope of those problems remain really wide. So when you're running a 10 year old business, you've delegated such that the problems you're solving tend to fit in a specific box. When you're at the beginning stages of those business, all the boxes are yours. So you're just having to solve all the problems you find.

Another way we could say the same thing is you're going to have to remain, you're going to have put your scientist hat on in some cases, right? So there's going to be questions you need answers to, and this can range from, you know, what features does my product need to have so that I can charge more for it? Or, you know, how do I build a process internally that's going to help me hire the right people? Right? There's all of these questions that you're going to run into.

and you need to be a scientist in how you approach them to solve those problems. So maybe we'll call this the scientific problem solver or the scientist pro. OK, this is maybe a too bloated a term, but. Yeah. huh. Yeah, yeah, exactly.

Charles (: 04:04

Yeah, let's throw Bill Nye in there and this is the Bill Nye entrepreneur and I think we're good. ⁓

So I'm just thinking through this from my perspective. It's easy to iterate on a small problem, let's say, right? So we've got a...

Widget that's what accountants always uses as our prop when we're talking about businesses We've got a widget and it works, but you know this one thing causes a little problem So we can we can adjust that and then fixes the whole manufacturing then there's the other side of that I have seen too of we brought on Too many people doing too much and we need to streamline and simplify our offering

And so we have to do a huge layoff, right? How do we problem solve on the bigger grander scale to not mess that up? Because I've also seen that messed up a few times where they lay off and then suddenly they can't provide even their basic offering because of who they laid off or situations like that.

Seth Jenson (: 05:04

So not over correcting, fitting the solution to the problem and right sizing it. Yeah, it's a great question. So, cause you're gonna face small things, you're gonna face big things throughout your journey. Have you heard of the lean startup methodology?

Charles (: 05:09

Yeah.

Not super familiar now.

Seth Jenson (: 05:21

So Eric Reeves, Steve Blank, these are the guys that kind of came up with a framework for entrepreneurship that kind of gave someone, entrepreneur the place to hang their hat. Because before it used to be like a black box. Like entrepreneurship was like you do some stuff and then a company pops out the other side. And these guys were like, actually, let's actually put some kind of more of a process mindset to it. And basically their whole idea is that building a business is a.

you're constantly iterating on the product. You're being lean. Instead of just building the maximalist version of what you're doing or the maximalist organizational structure, you're doing exactly what's necessary to meet customer needs and know more. And then you're learning from them what's working and what's not. You're making the adjustments you need and then you repeat the process, right? So it's kind of build, know, put into the world, put in the hands of your customers.

learn the lessons, iterate, repeat. And so what that helps you do is A, it kind of helps you avoid that problem you talk about of overextending yourself and having to lay off or pare down your product because you're only doing what's necessary. And B, it means you're building exactly what your customers want because you're only building what's going to be valuable to them, the next little thing, right? So

Let's bring this concrete, right? So let's say I want to provide a landscaping service and I could buy a bunch of lawnmowers. I could buy 10 lawnmowers, hire 10 lawn people, do a bunch of billboards to hire people or sorry, to find clients. I could flyer the entire neighborhood and just like go for it. Or I could say. Right, right, again, sinking tons of time or whatever.

Charles (: 06:55

that's super risky.

Seth Jenson (: 07:00

And maybe I learned, this is already a flooded market. So alternatively, I could buy one lawnmower and, you know, be my own laborer for the beginning, knock on some doors. Most of lawns find out what people do and don't like about the landscaping services as I do them. And then, you know, add the service they need. Okay, I want my lawnmowed and I want weeding done. Okay, now I know those are the two services and my neighborhood people care the most about.

So now I'm going to molans and weed. And maybe I'll hire one person to start doing that or whatever. So just iterative problem solving and growth and learning from your customers so that eventually you build to the scale you want and the products fully fledged. But you don't just rush there and find out that, I was actually wrong about half of what I did, right? ⁓ So.

Charles (: 07:43

Yeah.

Seth Jenson (: 07:45

A concept built into this is the minimum viable product, which you've probably heard before. ⁓ And that's literally giving the customers the minimum that's going to make them happy. And then building from that, iterating from that, refining it until you get product market fit, which is exactly what they want. And so that again, work, ⁓ hopefully we're not conflating too many ideas here, but that's a much more scientific way to do it.

Charles (: 07:50

Yeah.

Seth Jenson (: 08:11

⁓ and it's more that iteration means you're constantly learning and solving the next little problem for your customers and for your firm, as opposed to, just building and praying and hoping that you got it right the first time. Right. So it's really a mindset.

Charles (: 08:24

Yeah. Well, I love the

idea of, of MVP, right? Speaking as the accountant, I don't want to spend a lot of capital testing something, figuring something out. we're going to build a widget, I'm sorry, I'm to go back to a widget, right? And we're going to manufacture that widget. could go to China and produce 20,000 of them and try and sell them. Uh, that will cost a lot of money and be really risky versus.

Seth Jenson (: 08:33

Yeah.

Charles (: 08:50

hey, I'm gonna hand produce, I'm gonna 3D print this product the first time, we're gonna see if anyone even buys it. And I like that idea, and then as it's easier to adjust from this point, then if we've already manufactured 20,000 products, we can't change the gear to be just a little different, right? It's it's stuck the way it is, which just, ⁓ it would scare me, scare me to death running a business.

Seth Jenson (: 09:10

Mm-hmm.

So I recently mentored a young entrepreneur who's been on both sides of this coin. So he does a card game and his first card game, he was really scrappy with it. He play tested the crap out of it. You know, he just kind of made it the cards at home type thing and just refined it through lots and lots of iterations before he actually went and bought his first 5,000 units, which was the lowest minimum order he could find at the cost that he was looking for.

⁓ And he sold out of those really fast because he'd done he really had refined the product before he built it But he was so excited about that success that he launched another product and did not do all that same testing and everything Now, I don't know how it's worked out for him yet. Maybe he nailed it first try but I'm nervous for him because He didn't have that really MVP mindset that iterative mindset and he really went kind of maximalist with it and so

Charles (: 09:50

Mm.

Can happen. Yeah.

Seth Jenson (: 10:04

Again, the takeaway here is be a scientist, right? So again, we've seen problem solver, scientist, be someone that is experimenting and solving the next little thing in front of them instead of building your dream product right out the gate and hoping that it's gonna work. Lots of low risk experiments is the key here. And that's true if it's a little problem, it's true if it's a big problem.

Small low risk hypothesis testing is your your path forward throughout. So again, let me give you another example of this. So you might say, I'm starting a business and I don't know what, you know, corporate entity to make, right? I'm not sure what, you know, I don't know anything about the legal structure of my business. I don't know about how to make my equity arrangements or different things like that. And one thing you could do is just be like,

I'm just going to do it. I'm going to build it and I'm going to, you know, formulate an S-Corp and I'm going to bring on this co-founder ⁓ and have 50-50 equity structure. And again, this is how most people do it, honestly, a quick Google search or whatever it is. And they've got their buddy that they bring on. Now.

Charles (: 10:59

boy. You know how to get me riled up.

terrifying

Seth Jenson (: 11:12

Instead, you could say, okay, I don't necessarily know the best way to do this. I'm going to be humble and realize that I don't have all the answers here. And so instead of just promising 50-50 ⁓ equity with my co-founder, we're going to have a plan that is milestone based and performance based. And by the way, to really know how to do this well, I'm going to go talk to a bunch of people that have been there and done that so I can formulate this in a way that's going to make sense.

and use their expertise to make sure that I get this right the first time. I'm going to talk to a professional, take them for lunch, ask them about the corporate structure, which entity is the right one for me. Basically breaking it down to a bunch of problems and then just finding the right next thing to iteratively get where you need to get. Starting small and lean and then letting your grow into the structure that you need right. So it's not just about the

The lean startup methodology tends to be very product focused, but this really applies to every aspect of your business. Your accounting processes, your legal structure, your strategy as a whole, like literally the direction you're taking your company. Be humble, be lean, do little experiments that aren't irreversible so that you eventually get to where you want to be.

Charles (: 12:27

Yeah, just for those listening, do not do an S corporation without talking to a professional and even be careful who you talk to. Cause I've, I've run into issues where they had a consultant who told them to be an S corp and they were making $30,000 a year. It just talk to a professional, but yeah, no, that makes perfect sense. Yeah. Yeah. Call me up please. but I love that. And, and what I, one of my pet peeves, I think too, is that you try and have.

Seth Jenson (: 12:31

Haha.

Call Charlie up, call Charlie up before you make those decisions.

Charles (: 12:52

Business before you have a business and so you create everything and then you're like Now I have a business and then I'm start advertising and then I'm gonna start doing it's such a bad idea Make sure it works. Make sure it's viable because who knows right and some products you're not gonna know if they're gonna work and you're gonna think that they're a terrible idea and then they work out awesome and then others is vice versa, so The

Seth Jenson (: 12:56

Yes, that's such a good way to put it.

Charles (: 13:15

The US is great that you can just start a business just tomorrow and just sell something and you're totally allowed to do it and it's legal and you don't have to do all this other things on the back end yet. anyway, sorry, that's my five second rant.

Seth Jenson (: 13:28

It's true. I tell people

this all the time. You can make a lot of revenue without having a corporation of any kind, an LLC or anything, right? And that gives you the flexibility to learn and grow. it's, can take a paper check and put it in your bank account, right? And eventually you're going to want to, again, separate your finances and things like that. But in those really early stages, stay lean, stay small, learn the lessons. And I like this lens because let's, again, if we just think about the entrepreneur as a hustler, then that-

scenario I talked about of just bringing on a co-founder and building a company and all this thing that feels like hustling. It feels like you're living the entrepreneurial dream, which is why I want you to have this other lens of the scientific problem solver of someone that's staying lean, solving the next problem, iterating and growing carefully and intelligently. Think about this as a learning process. And at every step, you should be learning how to do the next step better, right?

Charles (: 14:03

Yeah.

Seth Jenson (: 14:20

So hustling alone won't get you there. You need to be scientific. You need to be a problem solver. And it's gonna save you so much heartache throughout the process. So that's my first one.

Charles (: 14:30

So what's,

yeah, yeah, what's the next piece of an entrepreneur?

Seth Jenson (: 14:33

So it's very connected to the scientific problem solver, but you want to become an expert. What people don't realize is that entrepreneurs are experts. They know their field, their customer base, their products, as well as anybody in the world. So it's not just all about wheeling and dealing and being a great business person. There's no such thing as a generic business person. Business operates in specific industry contexts.

They cater to specific customers. So you're gonna go really deep, not shallow, but really deep on a specific problem that you're solving for your customers. Now, to get that, you're gonna be that scientific problem solver, but the end goal is to really know your stuff, to be an expert and to be the world authority in that specific area of your business. I'm curious how...

Charles (: 15:25

So how

does this, yeah, go for it.

Seth Jenson (: 15:27

I was just curious how you've experienced this in your business building, right? Like, what are the things that you've had to become an expert in that you didn't expect that you would?

Charles (: 15:36

Marketing and I don't do a ton of marketing. That's really not how most CPAs work But even understanding the basic concepts I was clueless and I've joked before there there are a few fields in the world that I just can't stand and marketing was one of them

I was just like, why are we pouring all this money into this thing? Like there's no proven results. Like, why are we doing this? ⁓ and that's probably just an accounting perspective. I'm sure a lot of accountants feel the same way. then as soon as I stepped out on my own, was like, I understand. Like people have to know I exist. I have to be able to market somehow. Like it was just a totally different beast. and I'm still not an expert in it, but, it was very much a.

a rude awakening on that front.

Seth Jenson (: 16:19

That's such a good example because in so many ways, you're not a marketing expert, right? Like I would not hire you to be Instagram's marketing specialist, right? But for your specific customers, you know how to find them, you know how to message to them.

Charles (: 16:26

No. No, never. Please don't.

Seth Jenson (: 16:37

you know what their needs are and how to present those, solutions to their needs and just the way so that they've got money in hand to buy your services, right? So you've become an expert in marketing to this very specific size business that needs accounting and bookkeeping services, right? And so that's the key here. And this is actually a really hopeful message because if I were to draw an entrepreneurial path for you, like it's not linear. It's not like start business, grow business, have successful business. It's like.

a crazy roller coaster of ups and downs. And there's two steps forwards and three steps back and 10 steps back and two steps forward. But the beauty of that crazy path is you are becoming more and more of an expert. You are understanding your field and your problems and your customers and your products better and better and better. Failure is a great teacher, right? And success is a great teacher. so.

no matter what path your business is taking in the moment, whether it feels like you're falling down a mountain or climbing to the summit, your expertise is growing and that expertise is really where value is made, right? And so you can see this in the investing world where people invest in failed founders all the time. And that seems completely counterintuitive. Why would Sequoia Capital, one of the major investment firms in the world, see a founder that's failed twice and be like,

here's $5 million or $50 million, right? And it's because they understand that concept is this person knows so much. They are an expert from having failed so many different times. They know that customer base. They know what works and doesn't work. Whereas someone just starting with an idea and a dream, haven't developed that expertise through the process of building their business. So embrace that role and know that even if it feels like your business is

Charles (: 18:07

Interesting.

Seth Jenson (: 18:22

two steps forward, five steps back, you are learning so many lessons that's gonna help you in that next stage ⁓ all the more.

Charles (: 18:30

Yeah. I mean, we're talking about marketing, so I'll, I'll share a story about my marketing. ⁓ that was a success and kind of a failure at the same time. It's been a really interesting thing. I, I mentioned it previously. I was a music major and I partnered with a music, school consultant. and that was probably the first biggest unlock for me on realizing how to market effectively. so I.

cold emailed this consultant. worked out. was a serendipity or pixie dust as we've talked about in previous episodes. but suddenly I was able to gain access to her client list and not, not access, but she allowed me on her podcast and I work with her on a regular basis and she recommends me as the tax accountant of choice.

Seth Jenson (: 18:57

Mm-hmm.

Charles (: 19:12

And it has been amazing at how much traction that's gotten. So I am definitely not an expert at marketing. I will never say I am, probably ever. But I think that simple action and process has unlocked me understanding how to market effectively for my business.

Seth Jenson (: 19:17

Mm-hmm.

Yep.

Yep.

Charles (: 19:32

because I know exactly what to do. I have to find the right people that will connect me with their network. And that's really how I'm going to gain my clients. and on the downside, it hasn't been as effective, I think mainly because music schools, mainly because music schools aren't super profitable. ⁓ so it's not like a huge revenue source for me. ⁓ I mean, it definitely brought in quite a bit of revenue this year, but it's not, I'm not retiring based on it, right? But.

Seth Jenson (: 19:55

Mm-hmm.

Charles (: 19:56

It has helped me learn so much and now, going into this next year, I am so much better positioned than I was prior years.

Seth Jenson (: 20:03

Yes. So I love that. And you can see different layers of your expertise in that story, right? You know what makes a good client. You know what makes a bad client. You know the industries that have really high margins that can pay you well. You know the ones that are really struggling that aren't gonna be able to pay you well, right? You know what types of influencers to work with and what types might not and how to turn an influencer relationship into clients. Like these are all really nuanced things that you could only learn by working on it. But now that you know,

Charles (: 20:27

Yeah.

Yeah, by doing.

Seth Jenson (: 20:31

it's so much easier for you, right, to make those choices moving forward. So again, think back to Charlie, you know, months and years ago, before you started your business, if I were in the room with him, one's an expert in so many things that the other one, it's like little naive Charlie at the offset, didn't know what they were getting into or any of these really specific.

Charles (: 20:47

Yeah.

Seth Jenson (: 20:52

valuable insights that the Charlie I'm talking with today is. And so first of all, congratulate yourself on that, right? Like that's part of the fun part of building a business is your human capital grows and your expertise grows in a really magical, powerful way that's worth celebrating. And then it does so much for your business as you move forward. And we could even break this expertise even more specifically where that expertise is built of a fluency.

and a language that your particular industry has, right? You can talk the talk with your customers. You know how they describe their problems in a way that it's really like learning a second language in so many ways, right? Like the music, again, to use the music industry, the school industry, they talk about their problems in a certain way. They talk about...

They've got a certain set of issues that is unique to their industry and now you know that and you can talk about that with them in a way that you didn't be able to previously. You also are.

Charles (: 21:46

Well, I

love this example too. What's interesting to me, I know a lot of accountants who are, I think are more intelligent than I am, who are much better accountants. But when it comes down to helping, but when it comes to small businesses, if you're talking like 10 million or under, they're going to be clueless because they've been working at these Fortune 500 companies. They can,

Seth Jenson (: 21:57

Unheard of, Charlie. I will not stand by such slander against yourself.

Exactly.

Charles (: 22:14

be a CFO or a controller of these huge companies, but they have no idea what the little businesses are struggling with. And I think that's a huge thing to understand for entrepreneurs in general is that just because you're an expert doesn't mean you're an expert in what you need to be an expert in.

Seth Jenson (: 22:30

that's a great way to put it, right? Like you've got to know how to provide your value for your customers in an expert way, right? And so you can go in and be like, passed the CPA exam and so I can do, you know, anything I need. But until you've done the work, yeah, until you've done the work to really understand.

Charles (: 22:44

that's terrifying too.

Seth Jenson (: 22:50

your customers and their needs, it's not going to get you where you need to get, right? And there's, can only develop that expertise by being a scientific problem solver, by getting out there and doing. But again, I hope this is a hopeful message for people because expertise is a function of the time and the effort you put into it. You learn the language by practicing the language. You learn what's important and what's not important by trial and error and exposure. And so, you know,

Expertise will come with effort and it will just be magical for you. It'll be a huge unlock. And even if it feels like your business is struggling, that expertise that you're developing in the process will pay dividends for you.

Charles (: 23:28

Yeah, those failures really actually help in the long run. So we've talked about problem solver or our Bill Nye entrepreneur. We've talked about then being an expert in the field. What's kind of the third entrepreneur that we are talking about today?

Seth Jenson (: 23:42

So the last lens I'll offer you, the last identity is a de-risker. And this has been such an unlock for me as I've mentored entrepreneurs is getting them in a de-risking mindset. So entrepreneurship is considered a super risky business, right? It's like, ⁓ man, you're starting a business, 10 % success rate, know, like anyone rational wouldn't start a business. That's not accurate in so many ways. Like yes, aggregate numbers kind of reflect that 90, 10.

after I don't know, five or 10 years, I can't remember what the cutoff is. But the reality is individually, your approach to how you build the business can be very careful and safe, and you can de-risk as you go. And so wearing a de-risker hat and being intentional about where the risks are and what you can do to mitigate those risks will put you in that 10 % group. Almost guaranteed, again, it's...

Success is guaranteed in the long run if you're willing to stick with it. It's really just whether you quit before success is achieved. So I'll give you an example. No, go ahead.

Charles (: 24:40

Yeah, I love this one. before your example,

I just love this because I hate the statistics that 90 % of businesses fail. know technically it's correct. I know that. My experience though says it's a lot higher than 10 % succeed. And I think we could go into the reasons of why I think that that number is maybe scarier than it needs to be between

What do you count as starting a business? And is it when you register in LLC? it, know, when you open a bank account, there could be a lot of other factors too, but I just really don't think entrepreneurship is as risky as 10%. Hard work, yes. And could you fail? Absolutely. But it's not as scary as that number says.

Seth Jenson (: 25:15

Absolutely.

And what you can take away from that is, okay, the deck is stacked against you. There's lots of ways to fail in business. That's all true. But what people don't realize is you can stack your own deck, right? You can deal your own hand, so to speak, right? And so de-stack that deck, unrisk it, know, get put...

add more aces to the deck that you're playing with, right? And just to give you an example to make this more concrete, right? let's say you're starting a, well, we'll just use your example, an accounting firm, right? You're gonna ⁓ make your own way as a CPA, you're do bookkeeping, this whole suite of accounting services.

Again, you could register your business and buy office space and hire someone to do your bookkeeping day one. And you just stacked a ton of risks on top of each other. Now you've got monthly payments for your office. Now you've got ⁓ someone on payroll. You've bought a bunch of software to do certain clients that's expensive. Risk on risk on risk. There's a lot of ways that can go wrong. Instead, you can line up your first 10 clients.

before you even registered your business, right? You can go and network and find those people and pre-sell your services before you even open up shop, technically, right? And so that by the time you are starting your business, you've already got 10 clients lined up, right? And all you did there was stack your deck before you even got started. And maybe you would have found, again, putting your problem solver, you know, scientist hat on, maybe you would have found that...

Charles (: 26:38

Yeah.

Seth Jenson (: 26:53

there aren't 10 clients to be had and you have to pivot. So before you ever launched your business, you've already turned towards a different business that you're going to pursue or a different suite of accounting services or a different customer profile, right? So the key here is get rid of the risks of your business before you take plunges and investments. And sometimes people are like, but like, this is only works for service-based businesses.

But there's lots of creative ways to make any business less risky in any aspect.

Charles (: 27:18

boy, I immediately,

I immediately thought of Kickstarter, not that I'm endorsing Kickstarter or anything like that, but they create these products. I'm hoping that they have a demo. They should have at least a working prototype, right? ⁓ if they're being smart on their business side, but then they sell it. And if they reach a certain goal, if there's enough demand, then suddenly they have a whole business.

Seth Jenson (: 27:23

perfect example.

they're literally

getting people spying a product that doesn't exist yet, right? It's the ultimate de-risking strategy, right? They can pick a 10 minute video being like, this is the product we're going to make you and how it's gonna solve all your problems. then, you know, they've got the money to build the product before they even start, right? Crowdfunding is the ultimate de-risking strategy. Now it comes with pros and cons. Kickstarter takes a cut of things.

Charles (: 27:44

Yeah.

Seth Jenson (: 28:04

It's not a panacea, but it is a perfect example of a great de-risking strategy. And you'll see established firms doing this now. So there's companies that have multiple lines of products that are crowdfunding their next line of products just because they're like, well, why wouldn't we de-risk it? Why wouldn't we just ⁓ use this? So even at the mega corporation level, they're using de-risking strategies with unfamiliar product lines, which I think is really fascinating.

Charles (: 28:21

Yeah.

Seth Jenson (: 28:31

Let's see.

So what I think is really fun about the de-risking identity is it makes business building kind of a game. So anytime you run into something that feels risky, the question becomes, how can I be clever and creative and de-risk this for me, right? A fun example that's become popular in the tech community is before they build a SaaS product, they'll make a landing page online.

as if the product already existed. So they'll be like, they'll have some, you know, clever demos that shows this great app that's gonna do X, Y, and Z. They haven't even built it, but they're like, you know, sign up, you know, put your email in here to receive the download code for the app or something like that. And then they find out how many people just with this, you know, they spent a Saturday afternoon making this landing page for this fake product.

And if they get tens of thousands of, you know, email addresses that first day, people wanting to download it, they're like, okay, if we had this product, we've got 10,000 customers lined up. And then they email them and say, hey, you've had to push back the release of this, but we'll let you know when it's ready. Right. But that's again, a little fishy, maybe a little bit of a sleight of hand there, but a great way to de-risk their concept before they spend.

tens of thousands, hundreds of thousands of development costs building this app, right? And such a creative solution to the problem in so many ways.

Charles (: 29:50

Well, and guarantees that you're going to have traction when you finally do it too, right? Like, is this a need that actually needs fulfilling? something else I thought on the software side is all the beta versions of video games. We've been seeing this more and more and more. They have produced the product. They have a vision for what they want the full thing to be. But if they don't get a recurring client base, that's going to.

Seth Jenson (: 30:01

Mm-hmm. Yeah.

Charles (: 30:13

pay for, I don't know, the expansion or whatever you want to call it, then they just won't do it. And then it just dies in beta. and it kind of de risks. I mean, there's still a lot of risk involved because they're still creating a product to begin with, but it. De risks at least some of it. Exactly. Yeah. It's still de risks at some. That's really interesting. I hadn't even thought of that.

Seth Jenson (: 30:24

Yeah, half the risk it would be otherwise. Yeah.

and

In early stages, the opportunities to de-risk your business are so, you know, there's so many different paths you can take. So you can really choose the paths that are gonna be fit your right risk profile, right, for you. Some of my favorite people that have built huge companies did so because they had one sure client, right? Maybe their aunt had a real estate empire and they were sitting there one day and they're like.

someone is having to do all the landscaping for all these buildings that she owns. So they took her to lunch and they're like, can I do your landscaping for you? And so the day one of their business, they had a client lined up that could literally, it was enough revenue to sustain the business from day one. But there's so many ways to do this. Let me give you another example. So in the B2B world, business to business kind of transactions, right?

Say I've got a software that I wanna build or again, it could be a landscaping service or whatever it is. You can approach a business and say, hey, tell me about a problem that you need solving and how much would you pay to have that problem solved? So I literally helped a business, I mentor do this ⁓ last month where I'd met a founder and they were describing an issue to me and I approached these young students and said, hey, I know there's this founder.

⁓ You should talk to them and see how much they're willing to pay to have this fixed for them. So they did. And it turns out that that problem to be solved would be enough to basically cover all their expenses day one. So they're literally building their beta product, their kind of early minimum viable product in partnership with this company that's basically paying them to take the risk of building this product. So there's basically no risk for these young founders essentially.

They're getting paid to build their product, which they know they're gonna get a certain amount of revenue as soon as it's built. And once it's built, they can then sell that to hundreds of other companies around the world, right? And it's a win-win, because this business is like, man, I just really need this problem solved. So yes, I'm totally willing to pay you guys a little bit of money to solve it for me. And these founders are literally making money day one with a guaranteed first customer and a growth potential that's enormous, right?

Charles (: 32:08

Yeah, that's awesome.

Seth Jenson (: 32:34

So there's basically no risk to this SaaS business that would otherwise be incredibly risky. So there's always a way to de-risk your business. You just have to be creative and kind of have that and lean into the fun of strategically solving your problems and mitigating those risks.

Charles (: 32:35

Yeah, that's really cool.

Hmm. So something that I originally thought of when I thought about de-risking too, which I think is maybe a little bit silly, but I think applies to a lot of people that are probably listening to this. You're working a full-time job is de-risking just starting a side hustle.

Seth Jenson (: 33:07

That's a great way to think about it, right? And it certainly can be for you and your circumstances.

The concept of de-risking transcends just your entrepreneurial context in so many ways, right? And so from a career perspective, there's ways to de-risk your career even without quitting your job. And that could be a side hustle. That could be making connections and providing value to your company in certain ways that makes you indispensable. But bringing that mindset to everything you do is incredibly powerful.

Your relationships can be de-risked in some way. don't want to over, you know, oversell this this concept, but if you're dating, right there's Yeah, there's definitely ways to de-risk your relationships and not you know over commit in certain ways so So yes, I think it's a lens that that applies to whatever career stage you are and and certainly a side hustle can be Can be a way to de-risk it

Charles (: 33:39

I've been de-risking my marriage for years.

Seth Jenson (: 34:00

And that's the appeal of entrepreneurship in some ways is you are assuming control. You get to decide what the risks are. Nobody can lay you off if you're running your own business. And so you're accepting a different set of risks and you're choosing to mitigate those in some ways, but absolutely entrepreneurship can be an incredible way to de-risk your career.

Charles (: 34:18

Yeah. mean, I know we've talked previously, like entrepreneurship is kind of the way the world has been moving. And with AI coming in, we don't know where the world is moving necessarily. There are a lot of guesses and, but it just makes sense to start de-risking your career, your livelihood, the best you can, even, even myself, like, it makes sense to me to.

Seth Jenson (: 34:28

Yeah.

Charles (: 34:40

branch out into other things like a podcast, right? And to de-risk my own firm in some ways too. So, makes a lot of sense.

Seth Jenson (: 34:46

And I think the

beauty of de-risking too is that you can lean into the ways that makes the situation less risky and makes you more excited to do things, right? So this podcast, for example, it's a lot of time for us. It's a lot of effort. There's expenses to it, but it's very de-risked for us because we love talking about this stuff with each other, right? Like we're learning from it, right? So what on paper looks like a very risky business. Most podcasts aren't successful or, you know, return money.

Charles (: 35:04

You

Seth Jenson (: 35:12

It's actually not risky for us because there's so many other layers of value that we're getting out of it.

Charles (: 35:12

Yeah.

Seth Jenson (: 35:18

what's one last way we can close up the de-risking conversation? ⁓

Charles (: 35:22

So

now that we've de-risked our life socially, financially, work-wise, so let's go through the entrepreneurs one more time. There's the problem solver, there's the entrepreneur as an expert, and then there's a de-risker. And your argument is that combining all three of these is really the way to become a successful entrepreneur.

Seth Jenson (: 35:40

Absolutely. And of course they're connected. And yes, you're going to be hustling. And by problem solving and having that scientific perspective, that lean startup perspective, you're going to de-risk your business, you're going to gain expertise. they're all connected, right? But I just want people to know that it's more than just the hustle. It's more than just action. Yes, that's so critical.

but it's gotta lead towards these things. You've gotta be strategic and be actively mitigating the risks. You need to be investing in your own expertise and doing the work to know the language of your customers and the things they care about. And you've gotta do it in a way that is scientific and careful. So.

The beauty is it's not just all about hustling. you might be like, oh, I don't really have the personality that fits that hustle culture. But yeah, I am someone that goes deep and I know I love developing expertise and things I'm passionate about, or I love being strategic about how to solve problems and get rid of risks and things like that.

The beauty is it's, entrepreneurship is very multifaceted and everyone's gonna have places where they shine in this journey, which I just, that's why it's so much fun for me to like support young entrepreneurs. And I literally work with, on paper, the people that'd be the worst entrepreneurs ever. Like I work with snot-nosed kids that are like 18, 19 years old. They have no life experience. They have really no expertise whatsoever. But I know that if they're willing to hustle,

If they're willing to just not stop solving problem, being thoughtful and scientific about it, if they're willing to invest in learning the ins and outs of their business and be strategic in de-risking, they can get there. They can get there. These are things that anybody can do and be really wildly successful at.

That's the magic of entrepreneurship for me. And I love the holistic way it helps us become better people in some sense. Like we are more interesting, powerful human beings through the entrepreneurial process in so many ways.

Charles (: 37:29

It really does.