your-next-five-moves-book-summary-patrick-bet-david

Your Next Five Moves Book Summary – Patrick Bet-David

Summarising book….

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Your Next Five Moves Book Summary:

Your Next Five Moves Book summary is a fantastic guide to running a business from a practitioner.

The author Patrick Bet-David has a famous YouTube Channel called Valuetainment where he creates content to support wannabe entrepreneurs and entrepreneurs alike. I’ve always been a big fan of Patrick and this book is the real deal. If you run a business or what to hone your strategic thinking then this book is for you. 

 

Thinking ahead:

Most people don’t think more than one or two moves ahead. Those people are amateurs and flame out quickly in business. Effective strategy is about making a move and being prepared to launch another series of moves based on how the market or your competition reacts. 

The simple questions in business are binary. Their answer is either yes or no. The trap is believing that all answers are binary. The answer to any question is actually a series of moves deployed in the proper sequence. 

As I was growing up, I can’t tell you how many times my dad said, “Never be afraid of the truth.” It stuck with me, and I instilled that value in our company. I had studied many other organisations and felt strongly that being direct and painfully truthful were important.

 

You need to act like future is here (start at the end):

A phrase I use all the time is future truth. It means to live in the present as if your future truth has already become a reality. 

Did you get that last sentence? You must act like a great company (or a great entrepreneur/intrapreneur) long before you ever become one. Are you following? Let me explain. 

 

Envy is a sign:

When you’re honest about who you are, you learn to stop wanting everything. Envy is an indicator that alerts you if you’re being honest with yourself. If you can look at someone who has things you don’t and say, “You know what. I really don’t want that,” you know you’re in a good place. If you say you don’t want something but don’t mean it, envy will eat away at you. What it’s telling you is that you really do want it but are afraid to work for it. 

 

Shift odds in your favour:

You want to choose a path that puts the odds of winning in your favor; in poker, it’s called game selection. What determines if you win in any game (or business) isn’t how good you are; it’s how good you are relative to your competition 

 

Become an Expert Processor:

Great processors use the word “I” and see their role in whatever problem has occurred. They ask questions such as “How did I contribute to this? What did I do to cocreate this situation? How can I improve so I’ll be better equipped to handle something like this in the future?” 

If your new product’s shipment was delayed, most people are going to be looking for someone to blame. Remember, though, that great processors look for causes—because causes lead to solutions.

Expert processors don’t fear issues. They welcome them and treat them like a game. If your top sales producer threatens to leave, you start by taking responsibility. This leads you to own the fact that your compensation plan stinks and you have no strategy for retention.

Solving for X means isolating your problem. It’s not enough to say that your problem is your boss. You need to drill down to determine if it’s a lack of autonomy, merit-based pay, or intellectual challenge. You can’t solve for “your boss.” You can solve for a more specific, isolated issue.

Your mindset is everything. When you start viewing a crisis as an opportunity, you are winning the game.

Don’t forget to process your time frame. For instance, if you spend $100,000, you can get something done in six months, but if you spend $200,000, you can finish it in three months. Then you can ask yourself: Is it worth spending twice the money to get the project done in half the time? 

 

Business Operation:

Good question for updating operations:

Which of those steps required a hands-on method, and which could be run automatically by technology that we could buy or create?

 

Two Common Business Problems:

1. Offense. The opportunity to make money or advance your business or career. The choices here often revolve around growth, expansion, marketing, and sales.  

2. Defense. The opportunity to solve a problem, to stop losing money, or to stop moving backward in some way. The choices here frequently involve legal matters such as compliance and protection against competitors or market corrections. 

 

Hiring and getting the best out of people:

Some CEOs make the mistake of thinking that recruiting ends once a person joins the company. The reality is that when you recruit top talent, you’ll have to constantly re-recruit that talent. 

Some people are motivated by equity, some by profit sharing, some by big salaries, some by bonuses, and still others by long-term security. No two are the same. The key is to create the right type of compensation plan that will attract and retain the kind of talent you’re looking for. 

Plus, just as homeowners treat their houses better than renters do, once you give people ownership in a company, their mindset shifts. 

Here’s the strategy: Give your key people equity, but don’t do so immediately. Let them earn 

 

Creating your compensation plan:

I approached the question the same way a composer or choreographer would. Creating the right compensation plan is like creating the right melody. What makes the Academy Award–winning composer Hans Zimmer special is that he knows how to take different tunes and bring them together to work perfectly for an entire movie. 

1. Decide what behaviour or final result you want to recognise.  

2. Study the current compensation structure within your industry. Even if you’re going to disrupt the status quo, you first need to know what the status quo is.  

3. Find ways to create three tiers of incentives to strive for. This is much more effective than one all-or-nothing incentive to compete for. 


Create your values:

Let’s make a list of values and principles that we want to live by. Let’s see how many we come up with!

 

Examples of Patrick’s Values:

“What We Stand For as a Family”

Lead—because it will be necessary in every situation you face  

Respect—because everyone has something to teach you  

Improve—because that’s how you know everything will work out  

Love—because everyone is dealing with a challenge in life 

Our Core Values 

Courage. Not being afraid to challenge others  

Wisdom. Making the right choices  

Tolerance. Knowing that we’re dealing with human beings, who change all the time  

Understanding. Appreciating and respecting that everyone has different ideas and values 

 

Business Systems:

Make your business independent:

The less your business depends on you, the more valuable it is. The more your business depends on you, the less valuable it is. There’s no exit opportunity if the business relies on your personality. 

Media.net founder Divyank Turakhia, a thirty-eight-year-old with a net worth of $1.76 billion, once said, “Keep figuring out how to replace yourself because your time is most valuable in this process.

 

Six Strategies for Replacement and Skill Transfer:

1. List your tasks and skills. Make a list of all your tasks and skills and determine which ones you are the best at and which ones you are not. Focus on your strengths, and replace yourself on all the other tasks. 

2. Identify who’s seasonal and who’s not. You can’t assume that everybody is going to work for you forever. You need to identify who is there to fill a six-year role and who a six-month role. If you determine that now, you won’t be surprised when someone needs to be replaced.  

3. Know the different languages spoken by your sales, support, technical, and executive teams. Sales leaders generate revenue and build a company through their efforts. 

4. Know who can maintain the company culture. It is very important that whoever replaces you will fit the culture you established so that the business can keep growing after you leave.  

5. Know your company’s practices and procedures. You need to put pen to paper and write down each department’s practices and procedures. Replacements will then have a manual to follow, regardless of their level, making the transfer of specific skills quick and painless. 

6. Develop leaders to help spread the right mindset. Have one-on-one conversations with your future leaders to inject the company’s mindset into them now, before they need to replace someone. 

 

Make sure to have formal agreements in place:

In business, you’re going to have relationships with employees, partners, investors, suppliers, and advisers. You might love each and every one of those people, but if you don’t have a formal agreement, you’re asking for the type of stress and financial loss that comes with the most contentious of divorces. 

Before agreeing to any major business deal, you want the following to be agreed upon:  

1. Liability cap: What’s the most we can lose?  

2. Indemnification: You can’t sue me.  

3. Finite term: Once it’s over, it’s over. 

Be positive about people when they aren’t there:

Make saying positive things behind your teammates’ backs a habit, not just a once-a-year behavior. If you don’t do it, your workplace will lack the friction that produces creative problem solving and positive peer pressure. Don’t leave friction to chance. Create a culture in which you spread good words about people. 

 

The 4 Areas of Linear and Exponential Growth:

Linear:

1. OPERATING SYSTEMS 

This is about tightening up your systems, technology, and processes, making them more efficient and effective. To most entrepreneurs, this is the least exciting part of the business. 

2. BIZ DEV AND SALES 

Next are business development (biz dev) and sales. This has to do with creating relationships with new vendors and new partnerships and making your sales process better. It’s about networking and attending events from your industry. Relationship, relationship, relationship. 

Exponential:

3. THE NEXT INNOVATIVE CAMPAIGN 

As CEO, you may launch a program or promotion that is potentially game changing. Making the right move can create a massive surge in your business. You have to synthesize everything you know about your customers’ wants and needs, your competition’s limitations, and your own strengths to create a campaign that will drive rapid revenue growth. 

4. LEADERSHIP DEVELOPMENT 

Exponential growth depends on your ability to develop other people into effective leaders. Identify the next leaders you’re going to groom for more responsibility. 

 

Raise your standards always:

Being around strong CEOs who are always raising their standards can be uncomfortable. They project a feeling that no matter how hard you are working, it’s not enough. People may say, “Every time I get somewhere, you move the marker. When are you going to be fully happy?” That’s what makes a strong CEO so effective. That’s why Jobs may have been loathed when he was imposing deadlines but is now revered. 

 

Four Ways to Accelerate your Business:

1. Functioning speed.  

This is the support system you provide to your team. Examine who your people are and their capabilities. Can you help them improve through training and other means so they might cut some time from a function? 

2. Processing speed. 

There are a number of functions or processes that make your organization go. How quickly do you get your product from A to Z? 

3. Expansion speed. 

This is about how quickly you move into new markets, make acquisitions, and introduce new products. 

4. Timing speed.  

The question “When?” can work magic. Time your moves correctly, and you can beat competitors who have more resources than you do. 

 

Creating your business Systems:

If you’re not that ambitious, maybe this approach is fine. But if you want to build something big and sustainable, you also have to rely on systems.  

Patrick is a big believer in systems: systems of data; systems of procedures; systems of processes. Systems help you with follow-through and follow-up, and they also help create a culture in which nothing is ever unclear. 

You have to make lists. You must create manuals (video libraries may be more effective than printed ones). You must codify your knowledge. If it exists only in your head, you have a job to do. If you want to have a sustainable business, codify what you know and make sure it gets transferred to everyone else in your organisation. 

 

Manage with quantitative date:

Bad managers use qualitative data. They’ll analyze such a situation with words rather than numbers. They’ll say the person is lazy, dishonest, or unmotivated. Those words don’t do anything to solve the problem.  

Data, on the other hand, points to solutions. By relying on the data, you defuse the emotion from the situation. By focusing on the numbers, you help the other person acknowledge realities. This not only provides the impetus for improvement but preserves your relationship. 

 

Leadership:

Lead with Questions:

I believe what sets me apart as a leader is my desire to really understand people. I do so by asking the right questions and holding people accountable to their own answers. 

The way I apply pressure is by asking questions—and waiting for the answers. I challenge my people the same way I’m challenging you. I ask them to become clear on who they want to be and describe their next moves in detail. Once they express what they want, I use their answers to keep them accountable. I don’t yell and scream.

I don’t impose my own goals on them. What I do is repeat what they said they want to accomplish. If they are falling short of their goals, I ask why and shut up. I’ve found that getting them to self-reflect is much more powerful than telling them what to do.

It all boils down to the willingness to ask questions—not just the expected ones such as “How did you like your last job?” but ones that poke and probe and encourage people to reveal a deeper part of themselves. You’ve got to ask dig-deep questions that help you discover who a person really is. 

You can’t change people; they have to possess the inner drive to fix their own mistakes. Once you realise that, you can begin to manage people more effectively. Stop trying to solve other people’s problems. Instead, realise that what people want is someone to listen to them, someone to ask them questions, someone to nudge them in the right direction.

 

Ten Questions to Ask Before Raising Money 

1. Should You Even Raise Money? 

2. If You Were Not Able to Raise Money, How Would You Make Your Business Idea Work?  

If you can answer this question, Angels and VCs will be more interested in your business. By demonstrating that you don’t need capital and gaining momentum before you try to raise money, you will become a more attractive investment. 

3. How Will the Money You Raise Be Used?  

When raising money, you need to put yourself into investors’ shoes. Investors want to know how you will use the money. 

4. What Does an Ideal Investor in Your Business Look Like?  

Is it somebody who’s involved? You need to think about not only who a prospective investor is as a person but also what type of relationship you want with him or her. 

5. Do You Want to Keep Total Control of the Business?  

Whenever you ask for money, it comes with a lot of expectations. People don’t write checks without making demands. 

6. Do You Want Accountability?  

Most entrepreneurs don’t like other people telling them what to do. But venture capitalists want to do just that. They want to work with nimble entrepreneurs who are open to suggestions about their business. 

7. Have You Done Enough Research About Your Industry?  

Don’t waste investors’ time by failing to do your homework. 

8. What Makes Your Business Model Different? 

Investors need to understand why your business stands out. Your company needs to be positioned so that it will have a distinct competitive advantage in the marketplace. 

9. Have You Done the Math? What Is the Value of Your Company?  

The moment you present bad math, investors are going to walk away. They are expecting you to have real projections and to back up your valuation with sound numbers. 

10. Are You Building to Sell?  

Investors want to know if they will be able to sell their investment for a solid return in five to seven years. Do you have an exit strategy? 

 

Cultivate Postitive Paranoia:

Good generals are paranoid, and they respond to that paranoia by creating one great strategy after another. If you can outstrategize the competition, you can protect yourself from things that will go wrong. Don’t wing it. 

Savvy entrepreneurs also respect Murphy’s Law. Before you launch a new product, make an investment, pull the trigger on an acquisition, or make any type of major move, ask yourself this question: What are the very worst events that might happen as a result of my action? 

When you prepare for a likely future, your competitors who have not done so will be rattled while you steal their market share. You’ll handle trends and other changes calmly while other companies’ leaders are flustered.

Show me a losing gambler in a casino who is vowing to get even, and I’ll show you someone who is a few moves away from losing it all.

Entrepreneurs need to be prepared for unexpected attention, flattery, and other perks of becoming successful, especially if they’re not accustomed to this type of attention. They need to be aware that if they buy their own hype, they’ll screech to a halt.

 

Control your Narrative:

If you don’t talk about what you believe in, what your views are, and who you are as an individual, the world is going to decide who you are. It’s up to you to control the narrative and talk about what you’re dealing with. If you don’t, others will.

The first rule of self-promotion is that you have to be shameless. What holds people back is the fear of being judged. Visionaries have gotten past that. You can’t be afraid of judgment when promoting yourself.

A major power move is turning off the noise. Once you start controlling your own narrative, you also need to reduce the time you spend paying attention to everybody else’s noise. Do you think big thinkers are paying attention to celebrity gossip? 

If you’re going to “speak your story into existence,” you’d better have the right story and the emotions to back it up. And if you’re going to broadcast it to the world, you’d better back up the talk by living it. That’s how you control your life’s narrative. 

Always create optionality in your life!

The person who really has the leverage is the person who needs the deal the least. Options give you power. If you can walk away from a deal, you’re in the best position to negotiate the best terms. If you must make a deal happen, you’re going to be at the mercy of someone else’s power, and you’re probably going to make a lousy deal. 

The question is how to put it into practice. The short answer is: whenever possible, cultivate multiple options. Instead of looking for that one dream home (the same idea applies to a car, an office building, and a key hire), survey the market and find three options you would enjoy. 

 

How to reach your potential:

When the struggle is removed from life—when we didn’t have to earn it—people start to feel entitled and take things for granted. It’s one of the laws of human nature. 

The number one factor in reaching your potential is simple: It must matter to you. History books are filled with individuals who did impossible things simply because it mattered to them.