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Welcome back to Problems to Profit. I'm your host, Preston Brown. Thank you for tuning in again. I want to go over scaling today. I want to talk a little bit about business. The mindset it takes to get into business, run a business, manage a business, scale a business, you know, grow a business to the point where it's an asset, not an obligation or liability. Just kind of the how to and maybe the what is. A lot of people talk about scaling. You can go and you can talk to all the YouTube gurus, the TikTok gurus, or watch their content. Most of them probably won't talk to you. And they'll give you a million different definitions for scaling, and they're all bs. Okay? None of them are true. Like, they'll. Well, the best lie the devil ever told was always seeded with an ounce of truth, but most of that bullshit's clickbait. Okay? So I want to tell you what scaling really is. Scaling is feedback. Okay? And when we're looking at scaling a company, the growth that the company receives is feedback from the market based on your product, your service, your customer service, your location, your terms, your conditions, your price, your everything else, Your marketing, your people, all of it. It is feedback on which areas of your business are doing well and feedback on which areas of your business are doing poorly. Now, which way does scaling go? I mean, in a perfect world, it's going up, right? Like, it's generally like some kind of zigzag line, like one of those stock market charts. Well, that's great, but can scaling go down? Yeah. I was on a panel a while back and a bunch of different nine figure entrepreneurs were talking about what is scaling? And, you know, is scaling good? Well, yeah, scaling is always good because feedback is always good. And that doesn't matter whether you're scaling up or whether you're scaling down. Okay. Because if you're reviewing the feedback and you're measuring what's coming in, what's going down, then it's always positive because at least it gives you an idea of what you need to fix. So can you scale just one thing in a business? No. Like, there's lots of things you can scale. Can you scale your revenue? Sure. Can you scale your profitability? Sure. Do you have to scale revenue to scale profitability? Absolutely not. You can scale your profitability while shrinking your revenue. That's called getting more efficient. A lot of times people think, oh, to grow a business, I need to grow this big efficient business. Well, that's not true. Nobody has ever done that in the History of Earth. I mean, you know, Jesus wasn't in the business world. He did walk on water. He saved a lot of souls. He did a lot of stuff. But I don't think he ever opened a company. And I don't ever think he was worried about margin or scaling or any of those things. His products, the fruits we measure on his tree, are a little different than ours, right? So no perfect person has ever been in business. So no one ever scaled a large, efficient business. What they did was they scaled a big inefficient business and then they refined it down. What if you scale your systems? What if you scale your processes? What if you scale your efficiency? A lot of times when you scale your efficiency, what you've done is you've scaled the measurements within Your business, your KPIs, your key performance indicators. And what happens when you do that is you normally see some shrinkage before you start growing again. So is going down always a bad thing? No. Sometimes when you're going down in revenue size, you're actually improving your efficiencies, you're improving your processes, you're improving your customer service. Maybe you added a CRM to do better client management. And while there's, you know, some of a learning curve, you'll see some, some downsizing, you might also find that some people are not doing what they're supposed to be doing. You might eliminate some, you might remove some old processes and there's some retraining times. And then you notice 30, 60, 90 days later, hey, you know, yeah, we're doing less revenue, but we're actually making more money. So you downsized one thing to upsize other things. And that's kind of this mystery nuance of scaling. Now that we've kind of identified, what is scaling, why do some business owners do it better than others? What makes. Let's go and let's use the top 1% and maybe understand what that is too. What makes them so good at scaling businesses or scaling their assets or scaling their income, scaling their investments, scaling their time and their work life balance, which seems to be this common discussion that everybody has off the bat. Before we even get into that, let's look at what is the top 1%. Does the top 1%, like, have a higher net worth necessarily than you? No, that's not what we're measuring. When they talk about the top 1%, I know there's all the political mumbo jumbo, oh, the rich need to pay their fair share, oh this, oh that. You know, like the top 1% pays, you know, dynamically way more in taxes than everybody else. Why? Because they're not measured on their net worth. They're measured on their income. Okay, I haven't checked the top 1%'s income this year, but last year, two years ago, it was like 530, $540,000 a year. If you generated that income, you were in the top 1%. So does being in the top 1% mean you're a billionaire, you're a trillionaire, you're going to the same dinner parties and you know, flying on the same private jets and you know, arriving at the same private islands as Elon Musk and Jeff Bezos. No, probably not. Like the top 1% relevant to the highest net worth individuals are not rich. Like, they're generally high productivity operators. Like your doctors are generally going to be in the top 1%. Some of them, not all of them. Like actually internal medicine doctors and some of, of the lower level doctors have lost a lot of their income over the last few decades Due to the HMOs, the insurance companies, all that Medicare, Medicaid. Like everybody's negotiating with them and they don't know how to negotiate. They know how to help. So some of the doctors are not even in the top 1% anymore. Small business owners are often in the top 1%. Professional athletes are in the top 1%. And obviously different, varying degrees, but all you have to do is pass that like half a million, maybe now at 6 or 700,000 mark to be in the top 1%. Okay, so why are the top 1%, at least the entrepreneur versions of the top 1%, so much better at scaling? Frankly, it's because they're better at measuring what makes them better at measuring. It's real simple, guys, problems, and a love of this thing called change. Change is choose humble action necessary to garner excellence. It's funny because when we look at this funny word, change. I was having a conversation with one of my leaders in my home building company the other day, and this home building company is now doing 20 to 30 closings a month. And so she's changed a bunch of the protocols and procedures and things that we do in that company. And the staff was having a little bit of a mutiny. They were like, well, we've always done it this way, why do we have to do that? And she was like, you want to do the same stuff we did when we were closing six to ten homes a month, now that we're closing 20 to 30 homes a month? Like, that's like thinking, well, if I got married, my relationship would be exactly the same as it is with my boyfriend or girlfriend. Huh. Weird, huh? So you don't think that when you make a major new monumental shift in outcomes that you shouldn't have a shift in inputs that got you to that outcome? Why? Why are people so against change? She and I were joking. Because the highest paid people in my companies and the highest paid entrepreneurs and the people in the top 1%, do you know what they all have in common? And this is going to be controversial as hell and I'm probably going to trigger some people. And if I do, please post hateful comments on my feed and somebody will argue with you if they have common sense. The highest paid people on Earth have radical common sense. Like when Elon Musk looks at a spaceship part that NASA has put out and it's like $2 million, $3 million for a simple part that doesn't even have any moving parts. He goes and he tells his engineers, he's like, why can't we make it out of steel? Why can't we make it out of aluminum? Later it turns out that the part even with the manufacturing costs, the engineering, the design and everything else was $20,000. And all of a sudden he became more efficient than NASA and he can land rockets. Think about that, okay? And he's not a rocket scientist. He's not an electrician, he's not an electrical engineer. He was actually a software developer that created and exited PayPal. So a software developer figured out how to create landable rockets and has put more satellites in space than any of the rocket scientists on Earth that work with all of the big governments on Earth. Like, no big government can land a rocket yet. The software developer can. Like, let that sink in, guys. Let that sink in. So common sense is the key. What's holding most people back from having common sense? I want to, I want to go over this because it leads right into the your problems or your gifts idea of problems do profit. Most people think problems are something that they should avoid. I think that they're your guides. I think they're your guideposts. I think that they're the things that are going to make you wealthy and successful. If you identify them, approach them. Don't run away from them. Anything you run away from, you're not going to get close enough to, to understand. Like, you need to approach them the idea that people fail and don't have common sense and don't make the money that their peers make and don't buy into the need to Change and spend their time blaming everything. And blame is also an acronym, guys. Being lazy and making excuses. Right? The idea that people have this mindset of blame rather than this mindset of change is good is they hate problems and they don't have common sense. So, so what holds people back from. From common sense? What holds people back from common sense? Like, I've rooted it down to five basic things and all of these things prevent them from being a great learner or a great measurer. If you are a student, if you are a learner, you're going to be successful, you're going to make tons of money or have a great life in whatever way you wish to do it. Like if, you know, Mother Teresa never made a lot of money, but she helped a lot of people. Why? Because she had the ability to learn and she had this thing called faith. Right? So she had faith and I'm not even talking about the religion type of faith, but we'll get there. She had the ability to learn and she had faith that she could learn it. And she stepped out of her comfort zone and took risks. You know, they always say a coward dies a million deaths, but those who are courageous only die once she had the courage to step in and learn. So the first thing that breaks the ability to have common sense and the wealth that you want in whatever capacity that is, is your ideology or maybe if you want to frame it differently, your religion. And no, I'm not talking about Christianity or Judaism or Islam or Hinduism or whatever the, I guess traditional old school religions are. I'm talking about the things that you would kill or die for. What you are religiously devoted to in the real world today, you are a slave to. Okay, it might be the Democratic Party or the Republican Party or some set of rules that don't make sense. You know, maybe they made sense when you were 7 or 8 years old, but now you're 30, now you're 40, now you're 50, your life has changed. You can't follow the same rules because they won't get you the same results. Like if all of us followed the same rules as we did when we were 10 or 11 years old, we wouldn't be able to drive cars, we wouldn't be able to go to the bar at night, we wouldn't be able to go out and do things, good or bad, that could otherwise influence our lives. So what are you religiously devoted to? And a real good way to look at this, what do you spend a lot of time blaming on what triggers you to where you're gonna go and spend your time blaming someone or something for impacting your progress. That's a real good guidepost to the problem that is the root cause problem of your ideology or religion. So that's one, okay? That's the first thing that's causing you to fail and not have common sense. The next thing, fear, okay? And it's actually number two, not number one, fear or a phobia generally coming from some type of conditioning. Okay? Fear and faith are two energies that drive the human experience, okay? Both of them drive the human experience. Anytime you say, hey, you know what? I'm not moving forward, I'm not learning. I'm too scared, I'm too embarrassed. Instead of having the faith to push forward and become uncomfortable, anything that blocks you from getting closer to that problem, understanding more, becoming that adept learner, having common sense is a toxic thing that's driving your life. So if ideology and religion are number one, fear is number two. And fear is often, sometimes caused by your ideology or religion or it can create phobias that have generated from there. But you know, they're two different things. Might be manifesting from the first one, but sometimes not. Like, sometimes a phobia is. You could just be like really scared of, I don't know, like moving vehicles. Has nothing to do with an ideology or religion, but it's going to impact your life if you can't get in a car and drive to work, if you can't go and meet a customer and sell them your product. Number three is mental illness. Now what is mental illness? I mean, this one's one of those that's kind of nuanced because psychology, it's kind of a science in the works. Nobody agrees on everything, psychology wise. Like, you've got different psychologists that debate and psychiatrists that debate over this. They think they should medicate you over that. I have extreme adhd. They tell me it's a disorder. They want to go and drug me, or at least they did drug me when I was a kid. And you know what I think it is? I think it's evolution, like adhd, Attention Deficit disorder as they call it. With hyperactivity, if you've got an H in there. Some people just have. ADD is the ability to focus on more than one thing at a time. Normal people can really focus on one thing. Extreme ADHD people have a extra hyperactivity. Well, is hyperactivity bad? No. Uncontrolled hyperactivity may be annoying to others, but hyperactivity is a fucking great thing. Like you guys think about this. Energy is sold in cans. We call them energy drinks. All of a sudden we're like, adhd, hyperactivity is a disorder. Like, that's kind of fucking stupid, right? So, like, what is a mental illness? It's anything you're allowing to be your excuse. I have adhd. It's not an excuse. It's evolution. Yeah. I can be present in a conversation and work to control myself and be in that conversation, but I'm also noticing all the other things going on around me because I have adhd. Think about the level of awareness that is so all of a sudden my problem. Diagnosed by some doctor dipshit or psychologist or psychiatrist that didn't have the situation. And all he understood was how annoying it was for his kids to have that that he didn't have. Right. Because of how it was in his experience. So he went out and diagnosed it and made some pill and basically came up with Adderall or speed to feed the kids to help them focus. Yet the person that actually has the disorder, if they use it intelligently, that mental illness is not a mental illness. Like, what about ocd? Obsessive compulsive disorder at its highest level, yeah, it could be a toxic trait. I'm extremely ocd, guys. I'm also very detail oriented as a result. Like my ADHD and my OCD actually complement each other. Now, do I find myself sometimes getting distracted and wanting to handle the same thing and kind of re look at the same thing too many times? Yes. But my Excel sheets are also fucking perfect. Which leads me to be able to get my tech team to turn them into softwares that mean that I have more efficiency in my company. That means it requires less staff, less cost to produce the same product as my competitors. So therefore I'm much more efficient. But some idiot out there calls it ocd. All right, okay, we can go through detail after detail after detail, but what if your mental illness that somebody else diagnosed might actually have some benefits? And it could be your gift, you know, you might be treating it like a religion instead of an opportunity. How about your social circle? This is number four, social circle. And this one's a critical one, like what your mom told you back when you were a kid. Show me your five closest friends and I'll show you what your life's going to look like. You want to measure your future? It's going to be the sum of what your five closest friends average out at, divided by five. Right. So who's in your social circle? I used to go to events. And there was this real tall guy and he would say, proximity is power. And he wasn't wrong. And it's not power because you get to go and be around these amazing people and take from them. It's because when you get around these amazing people, you realize they're normal, they're human. My biggest benefit of being around superhumans when I started changing my social circle was realizing that they were just like me. They were flawed, they had bad days, they got triggered. They were human. We all look at the guy on stage or the person that we're reading the book about or reading the autobiography about or whatever, and we're like, wow, they're amazing. When you get close to people and you realize, yes, they're amazing, but they're also human, it makes you believe more in you. So you might need to clean your social circle because this is 100% going to dynamically pull you away from common sense. Because. What are you talking about? Well, if you're talking about low level problems, guess what? You're gonna live with low level problems if you're dealing with bigger problems. Like, I love that Elon Musk gets on TV and talks about, oh, you know, we gotta find a way to make humans an interplanetary species. You wonder why he's successful. Look at the problems he's having. This guy is the wealthiest guy on Earth and he has how many kids? I have two kids, guys. Sometimes I'm overwhelmed. Let that sink in. Who is in your social circle? What are you doing? What problems are you solving? What problems are the people around you solving? What conversations are you having? Is it growth type conversations? Is it gossip? You know, there was a really good formula for gossip. And I think, I think it was Socrates that came out with it and he said, you know, there's three questions that you can ask to identify whether something is gossip. You know, is it true? Question one. I mean, it's probably a reasonable question for any conversation, right? But, you know, especially if it's gossip, you need to ask this. Probably ask it all the time. But then next one, is it relevant to me? Are you telling me something that's relevant to me? How about the next one? Is it good? Like, if it's true? Maybe, maybe not. Is it relevant to me? Like, if that's a yes, keep listening, right? Is it good if you can't answer all three of those questions in a positive way? Like, if you have something true that's relevant to me and it's not good, I want to know. It's feedback, right? Like, that's going to affect my scaling, whether in my health, whether in my relationship with my family and friends, whether in my business, whatever, right? Like, scaling is feedback. So I want to know. But if it's gossip, you know, it may not be true or it's not relevant to me at all. I don't even need to know. Like, there's 8 billion people in this world. What, you're gonna give me shit on all of them? Fuck you. I don't need that shit. And neither do you. So your social circle is critical. That's number four. Last one, last one. Physical limitations. When I say physical limitations, yeah, if you get in a car wreck and you get injured, of course that can stop you. If you're in a wheelchair, of course you're gonna be held back there. But I'm actually talking more here about the physical limitations. You're gonn. As you age, a lot of young people are waiting to start their business. If you are young, if you are healthy, fuck, if you're young and not healthy, you have less physical limitations than you will tomorrow, period. I'm 42 years old. I don't feel the way I felt at 20. Now I feel good. I'm healthy, I eat right, I do what I need to. I try to take care of myself in every way with all the science and intelligence that I have. So I feel good, and I probably feel better than I did at 30, but I don't feel as good as I did at 20. Why? Because aging changes stuff. So do I have the energy that I had when I was 20? No, I don't. There's physical limitations. So if you're gonna wait till you're perfectly mature, you know, everything that'll never happen until you're 65, 70 years old to start a business, guess what? You're gonna be out of gas before you start. Physical limitations. Guys like. And this goes for all physical limitations, probably the number one thing I see from people is like, oh, I'm too young, or oh, I'm not experienced enough, or oh, I'm not. Look, the younger you are, the less likely that physical limitations is even going to be on your list. Of the five things that can hold you back, these are the five things that prevent you from having common sense, that prevent you from being a radical learner, that prevent you from getting into the top 1% and prevent you from turning your problems into your profits. Cool. So if you're still here with me, A, thank you. B, please leave some comments. C, Please subscribe But D, I want to tell you a little bit about my story. You know, I'll give you the three minute version. I was a broke kid, grew up in Canutillo, Texas. Like, if you know Texas, like, there's El Paso, Texas. It's kind of on that little spike on the left side if you're looking at a map. And then here's El Paso. There's Canatil, okay? Like, it's the little spit wad over there. Like, it's literally a shithole trailer park. And I grew up out there, broke as shit, with a very loving, wonderful family. My family, of course, wanted to be successful. My dad tried to open a business. He unfortunately failed miserably and he gave up on his dreams. You know, you can get the long form story if you go watch my masterclass, but for the short form purposes. Sins of the father, Sins of the son. That came out of a really good book. And it's true. His failure in business and him giving up on his finance dreams impacted me. It sent me into entrepreneurship and it sent me into this masochistic hustle and scale business modality where I always had to have an enemy and there was always something to conquer. And that was at least the young stages of my life. And it wasn't very smart. And one day I lost my dad. And it was weird when my dad got cheated, when my dad, you know, lost his business, trained me. Money was the meaning of life. Even though I had the most loving family on the planet. And I probably had the best lessons from that. I wanted the wealth, I wanted the productivity like any little boy, right? And so money became the meaning of life. Then I lose dad and it was like this radical shift. It was like, boom, welcome. Welcome to reality, dude. Shit's gonna change. Your life's going to change. The people around you may or may not be there anymore. And it sent me rocketing back to love was the meaning of life. But it sent me back to another thing. Because, you know, I'm a religious guy. If God loves me, why would he put me through all this pain? So love can't be the meaning of life unless problems are also the meaning of life. And so, which is why we're here today doing problems to profit, because that gave me this beautiful way of looking at the world where the reason faith is required in business and life and in your spirituality and health and everything is because truth always comes at the intersection of paradox. Like, can God create a rock so big that God cannot lift the rock? The answer is yes. And the Answer is always also no. And so that paradox right there means you need truth, and love is the meaning of life, but also problems are the meaning of life, and that's paradoxically important. But if love is the meaning of life and problems are the meaning of life, then we have to readjust our mindset based on everything we've been taught. If we want to be successful entrepreneurs, if we want to get into the top 1%, if we want to learn the best way to scale, if we want to learn how to turn our problems into profit, and we want to be profitable, if we want to have the best mindset, because it is something you set, like your mindset, your heart set, your skill set, you set those things, then we need to allow problems to be our guidepost. Because the only way to love unconditionally is to love beyond your conditions. Well, let's think about it. What is conditional love? Well, you caused me a problem. You broke my condition. Well, I don't love you anymore. You'd never say that to your kids, but you probably say that to yourself all the time. And I know I did a lot. So I spent many years living in that kind of miserable state of scaling, hustling, scaling, hustling. I lost my dad, and it was the worst day of my life, and it was also the best. And while it didn't all come to me in an understanding, on that very day, it woke me up and I realized, wow, maybe I shouldn't worry about this hustle and grind scaling bullshit that all these YouTubers and TikTokers and Facebook gurus all talk about. Maybe this hustle and grind shit's not real. Maybe what I really need is how to study these emotions, these energies in motion that are hitting my body. I'm a biochemical, electrical being, just like you, just like every person alive. And I need to find a way to study my emotions, see why I'm feeling this way. Because if the meaning of life is love, any emotion outside of love is what feedback. And man, when my dad left, I hated myself for not spending time with him, hated God for taking him, hated him for leaving, and all of that hate when I was able to love beyond my conditions taught me that I needed to stop worrying about the hustle and grind scaling process. And I need to understand what scaling really was. And as your business grows and as your understanding of scaling improves, you learn this beautiful thing called automation. Because that's the most important thing to scale in a business. Once you hit a certain stage, and when you scale, your automation you buy your time back. Your business becomes an asset, not an obligation. Your business becomes something that you own, not something that you owe your time, your energy and your life to. You achieve this thing, like this beautiful thing called work life balance. Okay? Which you wouldn't have at first, I promise you. Like when you start a business, it's like having a kid. You don't get to schedule the shits. You're not going to tell the diapers when they're allowed to fill up. Right. That's a startup business. But when you have that 7, 8, 9 figure, optimized, efficient company, wow, you have freedom, guys. You have the time to spend with your kid, talk about what's happening at school, if he's got a bully or if there's something going on or if he's having trouble somewhere. You have time to coach the baseball team. You have time to spend time with your wife. A lot of people get married don't even know their spouse. Small business is the opportunity for you to get in to something productive that you're passionate about, that brings you purpose. That just like you give that gift of selling your product, your service, and helping others that solve their problems by buying the product you sell. Yeah. Your sale is their solution. That business later turns around and solves your problem. And as those physical limitations start hitting you, as you age, you're free. Problems to profit is here for you guys and it's here for you so that you can jump into the entrepreneurship world. And why do I think you should do that? Because you have to. You don't have a choice. Now some haters are going to say, oh, no, that's bullshit. This guy doesn't know what he's talking about. And I hope they all chime in. I hope they comment if you're a hater. If you think you have a choice in getting into entrepreneurship, you may today, but you won't in 10 years. Why? Well, let's think about it. AI is a fact. Quantum computing is coming online. Shit. Russia's launching hypersonic missiles and that was impossible 10 years ago. They predict that there will be 10 autonomous robots for every human in 10 years. That's a prediction, which makes your job less necessary. If I can fill your job Description out with 10 or 20 bullet points and most jobs I can, it's going to be obsolete, it's going to be less necessary. And what are the big businesses going to do? They're going to go ahead and shift the way that they operate. They're going to get more efficient. They're going to lay off people. We're seeing them do it in the economy right now. And as those big businesses get more efficient, what are people going to do? Are they going to go get a job with another big business that's also laying off a thing is going to do what it's going to do. It's going to do what it's within its nature. And a big business, especially one of those big public companies where about half the population works, guys, they're not going to keep the people around. The only people they care about is the customer and the investor that owns the stock, not the employee. If they can replace you with a robot two seconds later. So what does that mean? You're going to have to get into some heart to heart entrepreneurial behavior or you're going to have some trouble. And will there still be jobs? Yeah, there will probably still be jobs, but there's going to be less of them. It's not going to be at the same frequency. You're not going to have companies with a thousand employees. You might have companies with five or six or eight or whatever. But it's going to be the resurgence of small business. And that's a good thing because that's what this world needs. That's what built America the highest gdp, most productive nation on earth. Okay. And I know I'll get some fools that are like, no, it's China. Okay, cool, whatever. Not here to argue. Here to give you a gift, which is understanding the nature of scaling, understanding the reason to become an entrepreneur, understanding how to go from 0 to 6 figures, 6 figure to 7 figures, 7 figure to 8, 9 figures, and to set yourself free. Because at some point, if you don't understand that change is not a threat but rather a choose humble action necessary to garner excellence opportunity, then you ain't at the table, guys. You're on the menu. And what I'd love for all of you to do like subscribe. Wherever you're watching this, please follow me because I'm going to have more and more coming at you, coming to you on the Problems to Profit podcast. Also, we have a ton of great guests coming up. So I will see you all on the next episode. My name is Preston Brown. I am signing out. I love you. Have an amazing day on purpose.