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Speaker 1:
this is unleashing leadership, and I'm your host, travis moss, with our season five co-host, dave nurchey, as we get, after the lessons learned from the book the Hard Thing about the hard things by Ben Horowitz, ready to go, dade, do it All right. Our point today building, inheriting or stepping in are different scenarios. So we're talking about stepping into the leadership position of a business, and this is brought to us by Ditch the Suits podcast, where we focus on helping you get more out of your money and life. And Ditch the Suits podcast you can find more information at DitchTheSuitscom or NQRmediacom or any place where there are podcasts. You can check them out, all right. So, dave, what's the difference between building and herring and stepping in? What do you think the difference is?
Speaker 2:
well, if we break each one down a little bit, I think all right, let's break it down, do it yeah let's break it down, building first.
Speaker 2:
So I mean, building is you're, you're creating it, right? There was nothing there that existed before that. So if you're building a business, we talk about seed. In the last episode you talked about starting seed with nothing, right? That's building. To me is there's. No, you should have a vision, or there might be some plans that are laid out of what you think this should be, but there's really nothing to help you other than actually building it and going from there and building off of what you have right. Each, each year, you're kind of building. More is how I look at building. What do you think each year you're kind of building?
Speaker 1:
more is how I look at building. What do you think um? I'm looking up right now as we're talking, I'm googling number of businesses that fail in the second generation.
Speaker 1:
So I was like I was, I was listening, but uh but I was going someplace with this uh, look, I mean the, the, the type of ceo that's going to be needed to build something you could. There's two different places here. You build something from scratch. There's nothing there and you build it. Right, that's. There's a different, that's a different kind of animal. I think a lot of people would say that person has got to be quasi insane to to take on that kind of punishment and and what the cost is there that?
Speaker 2:
was you right?
Speaker 1:
That was me. It's like a madness, like like people are looking at you going you know this guy's freaking crazy. You know they can't stop talking about it, they can't stop believing in it. I don't see how they're going to be successful at all. Blah, blah, blah, blah, blah. And you're just like screw you, I, screw you, I'm gonna do it anyway, right?
Speaker 1:
And then there's a type that's building, because they, kind of you, have a business that's already started and they buy the business, get into the business somehow, and then they build it to something different, right? So I don't think that that's necessarily the same, because I think it's one thing to it's one thing to birth the baby and it's another thing to adopt one, right, and I'm not saying that you don't love them equally, but it's a very different. You're stepping in at a different age, right? Um? So I think I think building a business, uh, and having the temperament to build in, a skillset to build, that's that's entrepreneurship, right? That's when we think about entrepreneurs, people think about business owners. No, it's builders, right, because in building comes risk. And then we got-.
Speaker 2:
You look at building as established, but now you're taking a business to the next level. Do you consider that a form of building or is that something different?
Speaker 1:
Well, yeah, I think that if you were to come in and take over a business that say X and and your goal is, and you're going to do what it takes to take it to two X or three X, that's along the same line, but they're cousins, they're not. Or maybe they're siblings, they're not the same. The person who goes from zero to 100 and the person goes from a hundred to 200. Yeah, um, they're going to look alike, but there's going to one's a little bit crazier than the other one and it depends on the day. Which one's the craziest. Yep, Right, versus, when you get to these other two categories, these are inherently different groups of people or different types of people. Right, okay, I think that. So my Google search. I think that, um, so my Google search.
Speaker 1:
70% of family owned businesses, uh, fail or are sold before the second generation gets a chance to take them over. Um, I had seen a number someplace, just because I've, I've, I've been working with business owners for a long time. Something like 70 or 80% of businesses don't survive the second generation. Um, it is very different. I was in a mastermind group one time and we had some different people from around the community and one of the people was kind of stepping into their parents business and stuff. And here I am still in startup phase with my business and kind of getting lectured about business things, and it was like we're not even talking the same language. I'm speaking English, you're speaking, you know. I don't even know what you're speaking, I can't even make it out. You know, we're not speaking the same language at all.
Speaker 1:
Stepping in or inheriting a business when you inherit a business, that's I'm lucky to be in the right place at the right time, right, right, not to take anything away from somebody who inherits a business, because great people, you know, people can become great leaders and do great things when they're inheriting a business, but the vast majority don't. That's the facts. So to say that somebody builds something to 1X and somebody inherits something at 1X and likely it stays at 1X, they're not the same people. They're not categorically the same. If you were to put them in a fist fight, one's a golden glove and one has never been in a fight in their life.
Speaker 1:
And then you've got the stepping into the different scenarios and that is like. You know, that's maybe a little bit like I'm stepping in and I'm going to grow it, but it's already built Right. So we kind of talk like that being the sibling to building, or I'm stepping in and it's already established, it's in peacetime, it's a big business, it's already kind of doing its thing, and so I'm a professional ceo, I'm not inheriting this, I'm actually stepping in and I'm going to run this thing um at that point it's kind of up to you how, how many like feathers you want to ruffle right like you could kind of step in and hey, I'm gonna.
Speaker 1:
Well, it's a different person, though the tenacity that you need to build a business and the type of energy that you need and the obsession that you need might be too much once the business is established and it's out of that growth mode and we talk about. Businesses should always be growing, but there's a difference between I'm growing, you know, by um, you know 30, 40, 50% a year, every single year, over and over and over again, versus we're growing by seven to 10% a year, right, so you know what it. What it takes to to take a company that's got a billion dollar market cap and grow up by 10% a year is very different than what it takes to take a company that's got a billion dollar market cap and grow up by 10% a year. Is very different than what it takes to take a company that's got no money, right, you know, and get it to a billion dollars or a hundred billion dollars or whatever. You know what I mean. Like it's. It's a very different type of thing.
Speaker 1:
So, and and one of the points that they make in the book is the fact that you know the, the, the CEO that does a great job building that probably, in a lot of situations, isn't going to be the one to lead it once it's established. You know, and that's that's not always the case. I mean, you can look at Home Depot, you can look at a lot of companies that their, their founders, actually did a good job running them before they stepped enterprise. You know, you can look at them and say, wow, the you know their founders actually did a very good job running the company Warren Buffett. But in a lot of cases the animal that builds is not so much as the animal that sustains.
Speaker 2:
Yep, yeah, I think to kind of step away a little bit from even how the book interpreted right the same role.
Speaker 2:
I try to put my own thought around the subject kind of, even if it's different than the book.
Speaker 2:
And I looked at it in the scenario where, as you're a growing business, right Like let's, let's look at seed, where you know you you built seed Travis, right Like your role was part of building seed and you're bringing other people on along the way, right as you're building your executive team, your management team.
Speaker 2:
So I kind of looked at it as different roles in the same generate, right, like like not passing along, or or you exiting, but now you have different leaders entering that are, you know, either inheriting a role that wasn't you know, someone moved out from or retired from, or stepping into a role that wasn't there before. And I kind of thought that was an interesting way to look at it a little bit differently, of how different leaders come into a company and they're all leading at the same time. Right, they're leading the same people but there's a different perspective each one has because they came in at a different time. In this growing company, right, and that's in the scenario of Seed right. It's a company that's still growing tremendously and developing every year, so I had that twist on. I don't know if you have any additional thoughts on that.
Speaker 1:
That may also have been more of Ben's point too. On the inheriting part, I always, just because of my work, I jumped to inheriting as an inheritance, but inheriting could certainly be inheriting a position that's already established, yeah, so I think what you're getting at is, I mean, the first part of it, of the business growing and bringing in management stuff. That's the building part.
Speaker 2:
Right.
Speaker 1:
So that's building. Then you come in, and some of the positions that some of our managers have been asked to step in, they had to actually build Right Right. They didn't exist, and so the same person that could come in and get along and grow in those positions might be different than a person who's going to come in, say, when there's already a hundred employees to manage Right Right. And so I think still, though, the underlying point is it's different people, right, it's, it's a different person who can build?
Speaker 1:
it.
Speaker 1:
It's a different person who can come in and gracefully take it over, and it's a different person that can come in if it's wartime or if it's peacetime, you know, or whatever the situation, and you can have many wartime and peacetime within an organization that's flourishing.
Speaker 1:
So let's say, your organization is doing really well, but a division is really struggling and really it's that particular division. So this is for people who don't run a company, but they run a division or a team. The team's struggling, the team's going to die, yep, and your head's going to be on the block if you don't fix it right. So you know the person who is hired to fix a team or the person who's already running a team or something like that. You know might be a different skill set required to actually get that team rebuilt, restructured, reorganized over the hump, and so it could be different people, but I think that's whether you're the CEO or whether you're a team manager. It's also you know the person who's going to be able to build a team versus the person who's going to be able to step into a team that's already trained and run it versus a person who's going to be able to step in and take a team and turn them and pivot them into a different direction. Um, that again, those are are often going to be different people.
Speaker 2:
Yep, Absolutely, and it it makes me think of the the episode we did on uh, hiring for strengths and not lack of weakness, Right.