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And the implications of that. And two point three trillion dollars.
They’re significantly larger. In actual fact, that the FTSE 100, I think the FTSE 100 was a total capitalisation of all of the companies in the FTSE 100 is something like is sopped two trillion. I think it’s like one point four, one point five, something along those lines. So it’s not only bigger than it’s it’s not quite twice the size, but it’s getting there. And what the implications of some of that is like, what’s what’s your take on that?
Yeah, it’s it’s impressive. So then the article goes on and on, makes a good comparison that it’s due to the fact that there are more heavily weighted in the US stock market, the tech companies or tech stocks. So in the US, you have all the fans, you know, that are doing extremely well and those are increasing in valuation like five, six, eight time foals this year. They have been doing all financial engineering as well, like splitting top stocks on this and that. There is a lot of, you know, hype were seen in London. There are they made the analogy on being that stock a shamefully and like a dinosaur. You know, they’re the old fat, slow moving. They eat gas oil companies, which are doing really bad because almost no tech company that them. Maybe they’re arguably them most. Take tea company was Ocado, which is these online supermarket, which is great, but it’s not comparable with other tech companies because of its coming of scale. So so you are first of all, it only operates in the U.K., I think, but also in an online supermarket, Youssouf Hub Logistics. It’s not A purely software. B, sense like Google or Apple has significant income from software. So of Netflix and so on. Then you have the old telcos like Vodafone, which have not innovated at all compared to Netflix. Yes. So it’s all this. Even if you go into the O2 market with Tesla in the US, which is doing extremely well. So you have nothing comparable in the UK which left that. So I’m I’m also I’m surprised on the pace that Apple is growing. We talked on our previous episode. It took them like 40 years to get to one trillion. And then I think one year or two to get to two trillion. And now is a two point three trillion. So who knows? Of course, all these go with pandemic in increased adoption. So so it pushed people to buy more of these high performing devices called mobile phones or computers or any other tech gadget. So, yeah. But also software in general. Yeah. So tech companies are the big beneficiaries. I have always struggled to understand why the US and probably China, of course, as well have all these concentration of tech companies and there is not not such thing in Europe. What do you think of that?
I think. I think.
It’s to do with. Well, I think there’s like there’s inertia, so once you have Silicon Valley, for example, is there is the classic, like, tech area in the U.S..
Right. So I think I think it’s true to say that, you know, even within the U.S. itself, there are specific hubs of tech entrepreneurship. So it’s mainly Silicon Valley with a little bit of Boston, Massachusetts area and a little bit little bit New York possibly. And like so Boston, Massachusetts, is to do with the universities that are around that neck of the woods, M.I.T., et cetera. New York, because it’s the financial centre of the country. And then Silicon Valley, Silicon Valley was and was traditionally the was the place where sort of semiconductor manufacturing originally started in the 50s and 60s. And the reason part the reason why it started there was the fact there was a lot of well, there’s a of spare land at that point. So you could create like large warehouses relatively easily and factories and things of that nature. But it was also where defence contractors in the U.S. were set up. So a lot of the original semiconductor companies were spun out of a company called Fairchild Semiconductor, which is one of the Fairchild was one of the large sort of defence contractors in the US and they in these sort of 40s, 50s. And so once you’ve got that sort of starting point of innovation happening in a particular area and much of the, you know, much of the original growth in tech was to do with semiconductors. Right. And so once you had these sort of sister and brother companies set up close to each other, then you had that sort of there was a reason for everyone to go there and to start if you wanted to start a semiconductor business or anything in that neck of the woods. And it made sense for you to set up next door to people who were doing it because they’d be your customers, they’d be your suppliers, et cetera. And then once that inertia starts running, then, you know, that’s where you want to go. So once that was there, that’s that’s where the venture capitalists set up because that, you know, you needed money to start these businesses. So they set up there. So if you want to set up a business and raise money to do it, then it makes sense for you to go there to do it because you could visit them in person and set up next door. And it just made the holes of human communication is easier when you’re adjacent to the people that you want to communicate with. And I think that, like, once that ball gets rolling, it’s like a snowball, right? Once it gets rolling, then it just keeps on going and keeps them going. And I think if you want to set up in opposition to that, in inverted commas, I’d like to say, for example, in Europe, Europe has tried, I think various like little, you know, governments of various sorts have tried attempts to sort of set up their equivalent of Silicon Valley. But in essence, you’re fighting against somewhere which already has an existing inertia.
You also you can’t compete on the same thing. So, for example. You know, it was semiconductors, which like drove much of this kind of like growth and innovation in the first place. So there’s there’s no point trying to set up some separate semiconductor thing because they would beat you. They would have to be really strong reasons for somewhere to choose you in new and unproven place over somewhere where there’s always loads of engineers and existing people, whatever.
So people have tried to do it in different areas of innovation. So, for example, when the UK, Oxford and Cambridge, the two universities that have, you know, were regarded and they have a lot of research occurring, there’s a sort of a mini kind of Silicon Valley type thing set up around Oxford and Cambridge, where there’s lots of industries. And and much of that has to do with like bioengineering and biopharmaceuticals. And so there have been efforts to set up. It’s just the fact that bio bioengineering, bio pharmaceuticals are not anywhere near as large or comparable to semiconductors, all now, you know, competing in general, software in general.
China, obviously, I think.
China was because of offshoring outsourcing. So a lot of large US technology manufacturers were able to compete to compete on price by outsourcing, manufacturing of certain elements of their production line to China. And all that happens is that China just rolled up, again, vertical integration. They started out Dell is a good example. So Dell, you know, got enormous by manufacturing and selling computers pieces. And they started off by subcontracting Chinese factories to create individual elements for them, other boards or individual components for their thing. But then over time, those factories over in China, in Shenzen and Shanghai and places like that expanded what it is that they created to the point where they then created the whole motherboard and p.c and then they created it. And in the end, the entire piece was manufactured out in China. Dell became just a shell company that sold this bit of equipment that was completely outsourced, generated by that. But as soon as you get to that point, then all of the expertise and production capacity for that kind of stuff now exists in China. And so they can then start selling it under their own brand. Right. So Lenovo and all of those kind of companies came out of that ability of all these factories who are set up there. They’re sitting there saying, well, hang on, we’re making this entire thing. It’s just we’re sticking it Dell sticker on the front of it and shipping it. And the Dell are making the majority the margin. We’re making a small margin. They’re making a large margin. Why don’t we just undercut their prices for exactly the same bit of kit and put our label on it instead and grab some of that additional margin?
So China, again, as has competed on the basis of concentration. So you’ve got these large areas of China which specialise in the creation of manufacture of particular things. So in Shenzen, it’s very much like electronics and semiconductors and things like that.
I think the same is true, actually, of semiconductors, like semiconductor manufacturing is now moved, is now done almost entirely out of Taiwan. So you got TSMC, which is the main sort of global fab for semiconductors. Intel was was always the sort of other main semiconductor manufacturer. But they’ve really struggled in that sort of latest shrinks.
You know, every time computer chips performance improves, it’s the shrinking of the size of the transistors on the chips that they’re creating. And it’s gotten to the point now where Intel really struggling. They’re talking about outsourcing all of their manufacturing. And again, it’s so it’s all going to TSMC. So it’s it’s like a winner takes all competition when you get to that kind of globalisation.
So. So essentially, you mean. So you need the ecosystem. So you need a critical mass of qualified engineers. So you are saying that the defence but also NASA. I think it was a big presence in California. So soon a critical mass of qualified engineers. You need money and then that creates, you know, the loop. But what do you think about the government role? Because that is an example. For example, you were saying, OK, Silicon Valley kickstarted from all these, you know, the Gorham government somehow, maybe by accident, but somehow they have a role because all that they you know, they set up all these defence and NASA licence factories or structures or whatever logistics into a concentrated area. And also, they have been popular for training. You know, for it. They could work with the private sector a lot. Lots of innovation came from DAR Fine in the U.S. as well, which if the U.S. companies were, you know, early adopters of those technologies, it was very useful for them. Or in the case of Tesla Day or Space X, they hired, you know, the astronauts or engineers from NASA. And they Kawar NASA gave them. Awarded them like billions in contracts. You know, so. Yeah, I mean, that’s one way of looking at it. So they do get involve the government at some point you and we you know, in many ways they can actually they can help us well with financing before on them. We like, you know, green funds or whatever or tax relief on the new China you can add. So they it’s very well known that they have been highly protective of their economy. And you will say, oh, that’s not fair. But maybe the government needed to protect their growing companies or expertise from the US companies got just going and buying them all. And for example, going back to Europe, deep mined one of their most advanced artificial intelligence company, maybe in the world, maybe the top one was Google came and just acquired it fly by for 500 million, which is not a nowadays. It’s not a lot of money. And I recall some Chinese government officials saying that he was highly surprised that the U.K. government let that happen so that they should have incubated the government should have invested and incubated the mine to be as large as possible U.N. co working with the government. It suggests that there are so. Yeah, I’m not saying, you know, you should be like China and, you know, like overly protective, but I definitely, definitely think I think the government needs to get involved and to support, but need to be proactive on that. Maybe Europe has these problems that they are not. I mean, he still is not a one country, you know, policy in Europe. They’re very divided, although they’ve been doing unions great as far as a concept. They have probably highest quality of life for lowest inequality. But when it comes to innovation, it’s like they are milking the cow, you know? And probably they they should they shouldn’t be think thinking that that’s going to last forever. So I think the Army needs to get involved. I don’t know how, but I definitely think it’s necessary. Yeah, well, now they in the UK, now that The Break-Up from the EU, they have been committing to, you know, the satellite one one way we the thing we talked before. So it was 500 million that one of two rescue that company. So I think it can make a big difference. But we’ll leave it open. I mean, now the gap is huge. So, yeah, we’ll be hard too much if you don’t get any policy to.
Yeah, I think I mean, we we don’t have the answers, and I don’t think anyone has the you know, there isn’t a definitive answer to any of this. I think it’s it’s a very, very subtle it’s a complex system. Right. So it’s very hard to know if you sort of tweak it, tweak your setting over here in a dial over there. What sort of long term effects of that are going to be? Because there’s so many into competing things. And also there is like competition. Right. You know, if you do something over here, then America could change its regulations. China could change its regulations the way it approaches. And so it so it’s a very sort of complicated system. I think I think fundamentally, you know, I’m a capitalist at heart.
I think that the.
That the the government. Government intervention, I think, is important. But I think that no government will be willing to actually you have to have short term pain for long term gain. In this instance, like, for example, you know, take Ireland, for example. If one way of encouraging this kind of stuff is like by having massive tax breaks and having sort of open immigration policy and things like that that basically enable a particular class of industry to happen. And the issue there is is you have to you you as the government have to play the game of, OK, we’re basically saying we are going to. Give these things to this industry in general and not take any, you know, massively limit the tax that we take back out there. Industry for a long period of time until it gets set up and solidified enough that we can then start ratcheting the taxi taxation back up to normal levels, whatever that might be for the industry, without then scaring them off again. And. Governments only lost. You know, it’s different in different parts, the well. Let’s say a four year term or a five year term. And so the government that instituted that policy doesn’t get to enjoy the the winnings of it because the winnings occur 20 years down the line. Right. So. The time horizons that they’re operating in is like, OK. How do we win the next election in five years time? Not, you know. Because people have got an eye on like, yeah, they’ll be a better country in 20 years time or whatever it might be. But it’s, you know, that the driver for that just kind of isn’t really there.
Yeah, I agree with. We are proud capitalism. That’s no doubt. It’s complex. So we’ll just leave it open and let’s see what they think.
Let’s let’s conclude we. We don’t know death. I like silly things, though. Yes, I know. This is I mean, you know, macroeconomics, et cetera, is interesting.
And it’s you know, it’s a background that you have to bear in mind. So, you know, you may think that this doesn’t has very little application to you as a small business owner or somebody is trying to get something off the ground. But this is the broader picture in which you’re operating. And so having an idea of what’s going on, why it’s going on, where things might be going can be helpful to your decision making.
Something else which cropped up this week, which has on the surface, very sort of like little to do with entrepreneurship, but was a huge, huge news story, particularly in Europe and particularly Barcelona, where you are. So a messy they arguably the greatest footballer on the planet, has said that he wants to leave Barcelona Football Club, which is where he’s been for 15 years, something ridiculous like that as he’s been a one one team guy. And this is not a massive can of worms, not only because of from a football perspective, you know, large clubs are extremely interested in having message on their books, taking away from Barcelona, but also the amount of money and the way the economics are working behind some of this. So your your man in Barcelona, what’s what’s going on here?
Yeah. I would without diving too too deep into it and going more to the economics. So so funds. So they cut the argument that they love game but they, they feel the club has given messy everything so that they join him when he was I think 13. Now he’s 33. So yeah. 20 years maybe play not publicly shown less but still. So they, they gave him all like. Oh okay. Yes. And he gets a salary of like one hundred million very. Or something ridiculous. So I think he’s one of the top three most paid sports personalities in the war. Something like that. Well, not because on top of his salary he earns from merchandising or like Adidas and these and that Instagram posts Bodh. So what they say is, look, it’s unfair that after all, these aren’t earning like hundred million per year on all these fortune you built us Tater’s, you just send us a fax saying you want to leave without compensation for the club site. What would this serve? Something. Just go negotiate something with the boss. And I’d just exit through there. You know, that’s great. And I’d just give something back. You know, that’s there. The spirit moving away from that. Just trying to understand why, you know, footballers are getting paid so much or what can you go actually. So who is who can actually book him? So realistically, it will mostly be like PSG in France or Vancity. So the interesting case for months, city probably does something that could add more value from their business or inspiration. Point of view on how sports business work. Assab some generics. So city first, for instance, Mexico’s 33 years old. So usually football players, they they can compete at European high standard levels at this age. Maximum thirty five maybe. I mean, he’s arguably, as you said, the best in the world, the best ever. So, so broadly he he can get, you know, some more years. But what can Citi offer him interestingly is like a five year contract. Maybe because he can do he can play a top levelling in there, a one in England and the European Champions League level. But let’s say two years there. But then he can move to them franchise that the city sports franchise in New York. So so they can do our five year plan to in Europe, three in the US, earning probably a similar salary, maybe more, because he will be a huge boost for the MLS. And given is for from a business point of view. We were talking before the podcast. We’ll let you elaborate more on that. But yeah, there in Europe is more of a bottom up business model. Work clubs make their money and I’m from clubs I can do the most. The ultimate beneficial, you know, not not owners of the business, but the ones who profit the most. Let’s say are the players, not shareholders, not the owners, the players. It’s well known that still, you know, you can you can meet the clubs to make money from selling players, from merchandising them, from TV rights. You have all these, you know, our ops or Middle East or Russians, Chinese as well. Patients buying some. Some use this as well as well, buying clubs in Europe. But many times these for is for like prestige. Or just for fun. Because they’re billionaires and they don’t make money out of it. But city structure, something interesting. And they are selling these to like they want to raise awareness of football as well of European football in China. So they got they they are playing the long term. And also by having all these, you know, unique franchises in different regions, they can cross-sell. They can actually add a little value. And they have different business models because in the U.S. itself, being like independent Globsyn, like in Europe, where each club makes their own money and they have some, you know, where the associations lie with our or other country level as well. They are they’re more like political organisations in the US that the league controls all their marketplace. And then it’s like awards, franchises for private donors to exploit them. And actually although so if you see make it validate this point. So football or so soccer players like Messy are one of their most paid sport scientist in the world. But they’re most valued clubs or sports franchises in the world are in the US. So NFL or baseball?
NBA. Yes. So there they are, more like four or five billion, which is not comparable to European clubs. So recently, I mean, Kobe, they boarded with less. But the latest buy out, I think it was our U.S. Business Month. He bought Romar in Italy for 100 million. Something like that. I don’t know if he bought a hundred percent by controlling equity.
So a certain parallel. So, I mean, Rome is not one of the most valuable club scene in Europe, but still makes a point on how different business models work and how you should look at when entering any business or if you want to enter in the sports business, who is actually making money out of Fold-out? Is it the player? Maybe this is you don’t need to be the owner of the business. Maybe it’s better for you to do a consultancy or, you know, or to go on commission based on sales. So you get a cut of the sales previous to the costs. So maybe that’s better for you. So what do you think on down the sports franchises, which is more aligned in general on this?
And yeah, I think the emphasis is there’s a different emphasis in different sports, and they it is is due to like historically where they came from, right.
So for football as an association, football, soccer, the way that started was there were lots of amateur teams got together and started playing and then they started organising playing matches against each other and from out of that sort of league started evolving. And so so ownership has always been at the club level as in life. So people, you know, clubs are owned like there’s also the tradition as well, particularly more on the European continent than in the U.K. of there are a whole bunch of clubs which are social clubs, which are effectively owned by families, or there’s a large membership for shareholder owners that Barcelona is one of them, where you have 40000 owners and the whole system is run like on a very sort of democratic basis by electing a president and doing all this kind of stuff. And so the ownership model is very much around the club. And then the leagues are organised by geographic region and the leagues are essentially just agreements between large groups of clubs to say, okay, we’re we’re willing and happy to participate in this group enterprise together. But the league is just at the agreement and the organisation of the clubs. And you can the assets of the clubs can include things like the stadium, but the main assets of the clubs of the players. And so you can buy and sell players contracts between different clubs. And you also have to pay. So you have to pay to get out the player. But you also have to pay the player salary when they come.
There was a way I used to work is like if you had a contract. If a player was under contract, then they couldn’t, you know, until they were out of contract. They couldn’t they couldn’t force a sale.
So, for example, it’d be like if I’m playing for Manchester United and I’m halfway through a three year contract, I say I want to I wanna go elsewhere. They’re like, when I’m sorry, we’ve got you for three years at the end of three years, you’re out contract and go wherever you want.
But unless we agree to this hour, we can’t do that. And then there was a Belgian player called Jan Bozman who went to the European courts to because this is against like contract law, in essence, you know, general employment contract law, who got an agreement to say the Bozman ruling, which basically said, no, you can’t do that. That’s you know, that’s indentured slavery, in essence, even those extremely well-paid indentured slavery. And, you know, you’re you’re free. Freedom of movement. Freedom of contract. And so then what happened was, is that at any point a player could say some other club, as long as they came to an agreement like a price or whatever. Then the players could transfer between clubs and that was across multiple different leagues. There’s lots of different leagues everywhere else. And so essentially what happened there was there means that. Any and all money that comes into football in general. So, yeah, as you said, TV money and ticketing, sales and merchandise. All of this kind of stuff that goes in everything will funnel a lot towards the player because the player is the sort of unit of value in the unit movement. And so all the power essentially resides with the players. And so the best players can will go where they are going to be paid the best. And so that means you get in in European football league, you get extremely large clubs who always win all the competitions, have all the best players and whatever, because, you know, again, it’s like that inertia thing of like the winners keep winning and so they get more money and so they can afford the better players and then it just keeps on going, keeps me going. Keeps going. And so and so all of those clubs are willing to pay the best players, the most money that they possibly can in order to be able to win things, because that means more money for them, which means they can buy more players. Again, the circle goes round, round, around. So all the money over time agrees to the players in that which, you know, is this is a good thing. I suppose, you know that they’re the ones who are ultimately providing the entertainment and you know the spectacle. So why not? In the US? It’s different because the court tends to be different is because all the main sporting bodies, the league is the commercial organisation. So, for example, with the NFL, you know, the NFL is a business. It is created a league. And as you said it, it divvies up franchises amongst individual owners. And then it can do things like set wage caps and salaries and the amount of money it can set, how the rules for how players are moving around different areas to ensure. So they’ve got the draught system. So players come up through colleges. And then the worst performing teams of previous years get the first pick of the best players from the new lock crop that are coming through, which means that you it tends towards fairness amongst the franchises because, you know, a team, which is it means that no one team can really dominate for a long period of time because the better players from the new crop of players are going to the worst performing teams of previous years. And so you get a much more so fluid and a much more fair and inverted commas. You know, winning can be shared out amongst a lot more people. And the money tends to accrue to the league and the owners of the individual franchises. And so it’s is very much a owning a club or a franchise in the US sport. A model is far more lucrative for the owners than it is owning a club in association football, because that’s where the money lies. And you do you even find. You know, American owners of American team franchises have actually come in and started to buy European soccer club, so, you know, the owners of Liverpool Football Club are American, the owners of Manchester United bootlicker are American.
And there’s plenty of other examples.
But from an entrepreneurial point of view or from a sort of like a small business point of view, I think the interesting thing to note is not necessarily the specifics of, you know, how this sport works or whatever, but just the how the macro economics of the industry in which you are entering. Like, where is the money going? Where where’s the arrow pointing? Where does money tend to flow towards? Because it’s very tempting to think like I would like to own much United Football Club. I support Match United. I would like to end flowerpots. It wouldn’t make me a it wouldn’t make me a huge amount of money relative to other things I could do with the same amount money. It costs me a lot money to buy the club. I could make far better investments than buying a football club. You know, if I were if I could pay money to become a brilliant player, then that’s what I should probably do, because that’s where the money’s going to accreted. Right. You know, liano messy. I think it’s a 730 million euro sort of transfer fee. They’re talking about him. Plus, he’s going to be paid like hundreds of millions in terms of salary. So, you know, he’s he’s gonna make out gangbusters no matter what happens here. But as an entrepreneur, it pays to keep an eye on how does the industry work? I’m entering like where? What’s the flow of money? Where is it going from? And to like and how do you insert yourself into that flow of money to the best. So take advantage of how the macro economics of that industry works. And I think that’s the point here. Absolutely.
The final topic that we wanted to talk about is.
Working hard versus working smart. So when you see a lot of discussion around starting businesses, when you see a lot of discussion about entrepreneurship. And even not just in entrepreneurship, just in sort of like the world of work in general, sort of like careers and getting a job and doing things like that. There is this dichotomy between like hard work, hustle, success. Like what? What is it? What is the key sort of ingredients, the recipe of success in these different areas? And different people have different opinions. Like, there is a very big kind of what’s been described as like the hustle porn kind of industry, which event which effectively is, you know, the harder you work, the most successful you get, which is, you know, to a certain degree is obviously true, is a tautology. But like how much of someone’s success can be attributed to how hard they work versus like how smart it is that they are working and like, what is the best balance between those two things? What’s your opinion?
Yeah. So I think work to work hard is easier than to work smart because of it. And also it could be risky in the sense that I mean, don’t get me wrong. I think by definition you will not. It’s so competitive nowadays. We have all these millions of people without jobs that you will need to work your arse off like. But it’s tempting. You know, I a classic like BBC doesn’t mean you are productive or you are making adding value, you know. So are making are are now making a better job than what they sold. So then that is very sometimes easy to get trapped into that. You know, I reply in emails all day or which maybe is fine, that’s what you need to do but are doing doing stuff that you will earn nothing or very little. And it takes you a lot of time. So then you are feeling your day doing lots of stuff, but you are not making anything out of it. So don’t be, you know, working smart ace. Of course it sounds good, but it’s hard. So I think it’s harder. It’s counterintuitive. And you need to think and think and test and iterate. And you will have also less feedback, because when you’re doing stuff you know, you’re doing, you know, you feel at the end of the day, you go to sleep and you can feel that you did stuff. Whereas if you have been thinking, yeah, maybe maybe you don’t need to be thinking the whole day, maybe, but you are not like a two, three hour thinking. Exercise is a lot. It’s very, you know. Like resource intense from mom, it could be stressful as well. But also, you don’t know if you are if what you are thinking, again is adding value or defeat. If you are on to something interesting or not. So then you need to get feedback for that. So the way to get these buckets to talk to people would talk before about that. Like, go share your ideas with entrepreneurs, investors or anyone else. Ideally, entrepreneurs, investors or people in your industry. Mentors could be as well could be friends. That’s fine. But as long as they are qualified to give an opinion on on what what you are putting forward or just test the market, do, then BP go it. And that’s when you need to work hard into executing your ideas, your planning. So it will need to be a mix of both. And over time, probably, you know, also the way to scale and make more money. Usually it will be very, very rare that you will make a lot of money on your own. So companies are a group of people that you know. So I’m not saying the more people you have in the company, the more money you will make, because that used to be the case. But it’s not anymore because of software. For example, software business can scale like millions of customers. We’re not that big. I think WhatsApp has like 50 engineers or hundreds of them and they have like four billion users or something like that. So, of course, software is the Coulier industry, but you will need it. So so your time is limited. So even if you work hard on smart or let’s say if you work hard, you can work hard for like X hours per day, 16 hours, whatever maximum you sleep, you can do other stuff. And then the way to get to the next level is by thinking, oh, how you are going to get there. Planning building strategies and building processes. So you will need to incorporate people, delegate and of many often times I could. In many cases when you delegate, you will earn less. But that’s fine because you need to have a plan on how you are going to over time, make more money. So out of that. So you are leveraging on other someone else’s skills, network resources.
And I mean their time especially. So that way you can scale. And how to figure that out with all the economics in place or in your favour. That’s when you need to work smart. I think a lot get to the habit of thinking like every day I would say, what’s next? What are we. How are we doing these? Are we on to something?
And then some hard rules that probably, you know, if Gabe put some deadlines, you know. So if you start something nice not working for three years, maybe just shoot it and start something else. So am I. I’m just saying, three years could be for you, maybe three years sees this is not that much or maybe is it is a lot of time. And you will you will you are open or you can afford to give three years to something else. It also depends on what what are your goals. Maybe he’s doing all right, but not as good as you felt. Or maybe it’s not scalable. So if it’s not, then a good suggestion would be probably to try to convert that mini project or whatever many business you built into a passive income. So try to estimate it or just put one guy to manage it so you will earn less, but there will be a passive income and then you can go into something else. So what was your take on working hard versus smart deadlines and shooting projects?
Kill him. Kill him? No. Yeah, I 100 didn’t agree with all of that.
I think the reason that there’s even like a debate or a reason why people hold different opinions on this topic, I think is because fundamentally people look different. People’s mentalities are different. They’re built differently and for different people. And they will struggle with different things. And I think the. They work hard. The hustle, the that kind of message is an important message for those people who tend towards procrastination, who tend towards laziness, who you know who. People who are not natural light is not naturally sort of go getting motivated type people, then having a. Consistent reminder of. Keep your mind on the track of saying like like in order to do anything, you know, in order to achieve anything, you need to work at it.
And so that reminder to work at it is an important thing. And so it’s a helpful, useful crutch for someone who has that kind of sort of mental set up to do that, I think. And on the opposite side of that coin, work smart. There are a whole bunch of people who, you know, who have the mentality of like a singular focus, which is like, right, I’m heading in that direction. Head down right away. I go, I’m just going ignore everything else, just like pile through like that. Tremendously hard workers. But they never come up to look around to see where they’ve gotten to. And maybe they’ve, you know, if they were digging a trench, maybe they’re sort of halfway out into the English Channel by that point or you know. And so and so the opposite idea of like work smart, which is like, OK, hard work is important, but it’s also important to make sure you’re working in the right direction again is a useful tool to remind yourself to to hit the happy medium. And I think that I give way to think of it in a way that I like to try and think of it is that starting businesses and running small businesses particularly. There is a very large element of luck to all of this. Right. Even with the best idea and even with the hardest work, there is going to be an element of. Have you happen to have chosen something which the market is going to really respond to and they’re going to want to buy and that, you know, this is a huge amount of luck associated with with anything any new endeavour doesn’t have to be business, anything like anything you’re trying to do. There’s a huge amount of luck associated with it.
And there are two ways for you to improve your luck. Right. Whether you consider yourself a lucky person or not is completely random. But there’s two ways that you can actively increase your luck. And there’s this idea of like luck surface area, which is. You want to try and expose yourself to the chance of being lucky as much as possible. And the way you increase your luck surface area is by two ways. One is like generally the heart of the work or the more work that you do, the more chance you have of being lucky, because the more you know, the more goes you get at doing something.
The more that one of those things will turn out to be lucky. And that’s the way you go. And the other way to be lucky is to be smart about it is to say, like, don’t put all of your efforts into one sort of tiny little channel where, you know, they only give you one chance of being lucky no matter how hard you work. It’s like put your work into. Think about it and say, okay, well, which of the what channels are available to me? Which of those are more likely to be lucky than others. And for what reason. And two. So then by picking multiple sort of routes and also by working hard on those routes and by sensibly and intelligently divvying up the amount of effort you’re putting in between those routes, then you increase the chances of one or two or three of those things becoming lucky and eventually being successful in whatever sort of endeavour that you’re heading towards.
You. I think there’s also something to be said for.
WorkI being smart about working hard as well, like working hard does not mean it isn’t.
You know, there’s this classic aphorism is it is a marathon, not a sprint. Right. And that is if you were to set out to run a marathon. The worst thing you can possibly do at the start of the marathon is to take off at top speed off at the start line as fast as your little legs can carry you, because after 200 metres, 400 metres, you’re going to be completely spent. And you’ve got another twenty six and not quite half a miles to complete as part of your marathon. Right. And so part of working hard, but working smart is by saying. Right, okay. I need to be. I need to go to sustain this for a long, relatively long period of time. So what is the amount of effort that I can sustain over a longer period of time? And that is not, you know, working all nighters every night. That’s not going crazy about stuff. That’s not working so hard. You forget to eat or you forget to socialise if you get to sleep well. All those other things that report for sustaining longer term effort, like your best effort over the course of a year is not working 16, 18 hour days every single day. Your best effort over the course of the year is working eight, 10 hour days, plus good slate plus good food, plus a bit of downtime to let yourself reset and things like that. And as with all things, you know, moderation is key. The danger lies in taking one thing too simplistically and taking it too far and just going too crazy with it.
So, yeah, so. So my my advice there is this too, like if you if you tend towards sort of laziness or procrastination. You know, keep in mind that you do need to put the effort in and you do need to actively, consciously work at putting the effort into to get the best results. But also, if you are the off the tendency to sort of put your head down and bulldoze three things, take the opportunity to come up and think like, am I heading the right direction?
Is that other things I can be doing is this was my end goal here. Am I heading towards my end goal or am I just heading off in a random direction as fast as I can possibly go? Yeah.
So I think from a practical advice, because to work hard is kind of you, you know, what you need to do then is just to put effort, but to work smart. Sometimes you don’t know how to oftentimes muscle types. So I think like a very basic advice would be just the more information you have, the better. So if you don’t know what to do or whatever, just rape, read stuff, read books, read the news, what’s going on? We talked before about like taking business models off work in one country and take you to another country. So that that’s by being smart in some sense. But it’s not you don’t need to be smart. You just have information. Or when investors have information and they make money is because they just they’re not smarter than others. They just have more information. So nowadays you can if you know what’s going on, you will be more likely to know the trends. And while to best source would like to invest on our word, the market can go and you can complement that with your faults or what you think or your circle or your ecosystem. And yeah. So even if you know nothing about trends or this or that. Just start reading some books or blogs on people that are qualified and have done it before.
Unlearn what they say, just go read them, understand where they are coming from, what they have built, what they say, and then you can follow them maybe on social media. Yes. So turn your entertainment time into like information research, information gathering or research time. And just by doing that within one, two months.
I would say you will be like, well, way better inform my more informed on and you will start seeing things differently. You will start having ideas, fresh ideas on do these, do that and then you can test them.
I absolutely agree 100 percent right? That’s it for today. Thanks very much for listening. We’ll be back next week with some more nuggets of knowledge.
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