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The Everyday Millionaire and Mindset Matters Podcast
TEDM – Simon Severino – Strategy Sprints: Design Your Desirable Future (Episode 211)
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- [00:00]
Patrick Francie
Foreign.
- [00:05]
Simon Severino
Welcome to the Everyday Millionaire Podcast. My name is Patrick Francie and I am your host and I want to begin by saying thank you for listening. On this show I am having conversations with seemingly ordinary individuals who have achieved some amazing and extraordinary results in both their life and business. My intention is to inspire and help you learn and grow by having my guests share their journey of how they face and overcome their challenges, but also how they celebrate their their many wins. And now let's get on with this show and have a conversation with today's guest. My guest today, Simon Severino, is a very distinguished business strategist and the visionary founder and CEO of Strategy Sprints. With nearly two decades of entrepreneurial experience, Simon has been instrumental in helping SaaS and service based business owners streamline their operations, leading to a significant jump in revenue growth. He's the creator of the Strategy Sprints method, which is a proven system designed to double revenue in just 90 days by extricating owners from daily operational challenges. Under his leadership, Strategy Sprints has evolved into a global network of certified coaches who assist clients in rapidly gaining market share through focused weekly sprints. Beyond his coaching endeavors, Simon is a respected member of the Forbes Business Council and a contributor to Entrepreneurial Magazine where he shares insights on scaling digital businesses. His thought leadership extends to his role as host of the Strategy Sprints podcast where he has engaged with renowned entrepreneurs such as Rita McGrath, David Allen near Eyal and they have discussed topics related to business productivity and growth. He is a TEDx speaker and has delivered compelling talks to agile strategies and sales and has been featured on over 500 podcasts which really reflect his commitment to sharing knowledge with a broad audience. Without any further delays. Let's have this conversation. Listen in. Enjoy.
- [02:20]
Patrick Francie
Simon Severino, thanks for joining me on the Everyday Millionaire podcast. Nice to have you.
- [02:26]
Simon Severino
Hello. Thanks for having me.
- [02:28]
Patrick Francie
So Simon, you know the bios and my guests are always a little bit, you know, thin. I think, I think we always love to hear from the guest is answer to the question of when somebody asks Simon, what do you do? Simon, what's your answer to that question?
- [02:45]
Simon Severino
I double revenue of entrepreneurs. That's my superpower.
- [02:49]
Patrick Francie
Your superpower is the ability to help entrepreneurs double revenue. That's a pretty big superpower. So let's talk about that. So when it comes to doubling the revenue of your clients, first off, who are your clients? I mean entrepreneurs in general, are you into a specific industry? How does that work for you?
- [03:10]
Simon Severino
Entrepreneurs who have an online business, even mostly remote team, and have the challenge of Having to sell online via zoom teams, Google a high ticket offer. High ticket means it's above $10,000. So there is a certain complexity, there is a risk involved and you have to really trust that person. And you want to know, why should I buy from you? Why should I trust you? Does this really work for me? So it's a complex sales situation and it's a high ticket online sales situation. Those are the business owners that we pick for a 90 days strategy sprint. And in 90 days we help them improve three things by 25% each. I guess we will go deep into all of this. And when we improve those three pieces by 25%, they effectively increase revenue by 99%. That's why we say we double your revenue in 90 days.
- [04:17]
Patrick Francie
So that's interesting concept. Now would you consider yourself in terms of that description? Are you, I don't want to say, are you experts in marketing? What is your expertise? You know, when you're supporting somebody in that goal, you're coaching them to do that. So there's some expertise in coaching and what goes along with supporting an entrepreneur and actually taking action and making, you know, making those kinds of moves. So how do you consider yourself, do you consider yourself expertise in marketing or what goes beyond that side of it?
- [04:51]
Simon Severino
Simon, we are business coaches, so our expertise is really marketing strategy, sales strategy, because it's about business growth. And so you have to think, my mentor would say it's about the geometry of the business. It's about the business of the business. And then we drill deep into the, into their spreadsheets, into their world, into their emails, and improve each part with them. There is one element, which is strategy, which means, hey guys, what's the plan of attack? In which business are you? Where do you want to play? Where do you want to win? What's your plan of attack? Do you have one? Do we have to refine it? And then it's the actual execution. Month one is around positioning. Month two is around increasing win rates. Month three is around sales velocity. So positioning means you're currently being compared with other options that they have. And mostly you don't want to be compared with that part because it's actually a false comparison. So how can you increase the perceived value by having them compare you with the right thing. That is called positioning, expressing in a clear way who you are here to serve and how you help them accomplish whatever you help them accomplish. When we refine the positioning, we find that you can increase your price now by 25% without losing clients, sometimes even More, but on average, it's 25% that can be charged more for services or offers. And many of our businesses are service businesses, like consultants, marketeers, IT agencies, design agencies. When you increase by 25% the price without losing the clients that now we have achieved the first milestone of the Sprint.
- [06:50]
Patrick Francie
So when you start to look at, you know, when you talk about products or services, over 10,000, I'm assuming mostly service, or are you also working with entrepreneurs who are selling products? So can you give us an example of, you know, somebody who might call you and say, I need some help? I've got this online business. We're trying to sell this. Is there a this that's more common than others? Is it a service? Is it a product? Where do you kind of enter the conversation?
- [07:16]
Simon Severino
Typically it's professional services. So it's a team that does consulting or advisory or financial advisory. Sometimes it's a product. So recently it was a team that invented a machine that can detect, just by sound, it can detect which part of a process will break next. So that's a machine, and they wanted to sell this machine. They were in a series A to enterprises, but they are great at building machines. They have never learned the art of the complex B2B sales. How do I get even a conversation going with the head of logistics at Boeing? They didn't know how to do that. So how do you start the list? How do you get them on the phone? Do you get them on Zoom Simon? How do I do that? So this is how we started with these guys who invented the machine. And then also there is software teams that we help if it's a B2B software. So a B2B software is, for example, you have built a CRM solution for enterprises. Those people have the same challenge. How do I get a meeting with the head of a bot? And how do I structure that meeting or that series of meetings so that I land the deal?
- [08:38]
Patrick Francie
So when you talk about kind of what people are comparing you to, or, you know, competing, I mean, I think about the world of marketing, and so much of it is driven by social media platforms. And, you know, you're also competing with the many distractions out there as well. So when you think about. And this is a question, I guess that I'm trying to get clear on what the question is. But if you're working with somebody in that instance where they have this kind of unique product, when you think about how do you get attention on that, like if, especially given that, you know, somebody who uses it doesn't even know it exists or would be interested in using it, I should say doesn't even know it is exist. So that becomes a marketing conversation. And are you then kind of looking at how do we grab attention in a social media world or where are you entering the conversation with an organization like you just described?
- [09:42]
Simon Severino
Yes. In those 90 days, the client will pick one social media channel that they feel that that's fun for them to intensely work on. Because we will, we will play on that every day for those 90 days and we will also help them, we will give them into amplifier groups so other 20 clients that have a similar target group with adjacent offers and they will all keep each other accountable and have fun posting together. And they will say, hey Bob, why didn't you post yesterday? I missed you. So. Because not everybody loves marketing. So our clients, they're great at what they do, but if they're not a marketing agency, they, they don't love marketing. So we help them enjoy it by putting them together with other people. Not becomes a collective endeavor and it's much more fun. So yes, they will pick their social media. Most of our clients, they pick LinkedIn because they are in the B2B field.
- [10:43]
Patrick Francie
Yeah, the B2B field. YeahS yeah, I was going to ask you that. LinkedIn seems to be the best platform for that B2B. I'm finding that in my own experience with our own marketing team that meta is just a beast pain in the ass to work with. Are you finding the same thing with meta, by the way? Not the trash talk, meta, but it's awful. The platform drives me crazy. I'm glad that I have a team that kind of has the patience for it. I certainly wouldn't. But just out of curiosity, what's your experience with meta? Is you, am I the only one that's facing these meta challenges or is it common?
- [11:21]
Simon Severino
It's common, yes. We pick LinkedIn for these reasons. And then some of our clients, they also like to add either YouTube because some of our clients, they are big YouTubers in the first place. So we start with YouTube, but then we retarget on LinkedIn and some of our clients, they love X. I also love X. I love YouTube and X too. But when we started and in a sprint, you focus on one and you optimize that until it scales. So we focus on one. And most people pick LinkedIn nowadays now.
- [11:53]
Patrick Francie
In a time where we see and I don't know what it's like in Austria and I know that you're global in scope for what you do but when you consider what's going on economically, are you experiencing a time right now where it's harder even in a B2B format to get people to buy product? Look at product. It seems, and I'm asking you this question is we're noticing that businesses and individuals seem to be pulling back. They're not as willing to part with money these days. And these are all cycles that economies go through. What are you noticing out there?
- [12:37]
Simon Severino
There is a twilight zone right now. Cheap products are harder to sell. Expensive products are easier to sell. And that mirrors our societal gap. People without assets living paycheck to paycheck, they're basically getting poor. The middle class is disappearing and most of the middle class is just becoming poor. And because of inflation and because they don't invest in assets and they don't hold them long enough and their savings rate is not high enough. And then the other part, that little part that has assets like real estate and stocks, they are getting richer and richer every day. And it's easier to sell to them because if you look at Hermes, for example, they had absolutely no diploma, but Louis Vuitton had. Because Louis Vuitton has also some cheap products like drinks. And that had a dip. If you look at the pool corporation, it's really split in half. The cheap pools have a pipeline that's dry. They're not selling the cheap pools this year. So lower income families don't pull pools from them. But the higher end pools have the same pipeline as always. Nothing changed for the higher end or the expensive pools, swimming pools in your garden, but the cheap ones, nobody's buying them.
- [14:13]
Patrick Francie
So you know what you're noticing and what you're suggesting here for anybody listening, that is an entrepreneur and maybe struggling with some sales, is that going through these economic times, you have to consider that who's being most impact and most impacted is middle class. Certainly when you get into that mid or lower middle class and below that margin, they're being hit the hardest with increased interest rates, with increased cost of living, whether it be food and fuel or rent or mortgage payments. So disposable income is being impacted. And that's not just on a B2C scenario. I could be a B2B. So an entrepreneur, maybe it's a solopreneur or kind of a two or three man army, is struggling with, you know, cash flow liquidity. And so those individuals, as much as they may want to enter into a conversation with, you know, whatever level of product or service you're providing, they just don't have the liquidity to do it. So you're suggesting, what you're noticing is that you got to play into that bigger game, into those individuals or those businesses that are beyond that. So they're maybe, well, obviously they're more lucrative or they have better cash flow, they have better liquidity. They have not been impacted to the same degree. So am I hearing what you're saying? So really that guidance there is focus on a new market. Back to your point, you're in this transition, twilight zone, if you will, who the buyers are. Is that an accurate kind of statement in this case?
- [15:53]
Simon Severino
Low ticket pipelines are drying up. High ticket pipelines are fine. So move to high ticket.
- [16:00]
Patrick Francie
Now. Do you, do you. Is this because you're in the industry or you're doing what you're doing, that you see this, or is there actual, Are you seeing data out there that's supporting what you, what you're just talking about? Like, I agree with you, by the way. I'm, I'm noticing that as well. I'm only noticing it because I've got more than one business and we're seeing where people are challenged in a lower ticket item. Those individuals who would actually buy a lower ticket item are kind of going, no, yeah, I'm out. But do you actually have data that supports it anywhere or is it just what you've got going on with experience? Simon?
- [16:36]
Simon Severino
Yes, we have data. We have 24 countries where we have hundreds of sprints running. So that's one internal data. And then there is external data. If you list, you can listen to the pool corporations earnings call, the most recent ones where the CEO explains exactly how the lower cost pools, it's really hard to sell and they have a dip there. But the higher end pools are untouched. Thanks. Easy to sell.
- [17:04]
Patrick Francie
Understood. So when you say higher, are you saying over $5,000 product? Over $10,000 product? I know you talked about a $10,000 product. Is 5,000 considered a lower or is it kind of on the edge? Where are you on that price point, just out of curiosity?
- [17:22]
Simon Severino
Yeah. For most online businesses, everything that's below 10,000 is a low ticket in our definition and above 10,000 is a high ticket. So if it's advisory consulting, everything that's a professional service is a high ticket offer because over a year people will pay more than 10,000 per month in your services. And the important metric is always the lifetime value annualized over a year. So professional services, they have a better situation right now for two reasons. They are capital light, so they have less downside risk and also they are higher margin. So that if they had a good savings rate, we should probably also talk about savings rates. If they saved personally above 15% or ideally above 30% every month and have built assets, they're fine.
- [18:17]
Patrick Francie
So can you walk me through a scenario and give me an example of that, Simon?
- [18:22]
Simon Severino
Sure. A marketing agency, pre Sprint marketing agencies, we see having a net profit margin around 30%, 40% and guys, what are you doing? You don't have any machinery, right? Where is your profit going? So we optimize month one, month two, month three, we optimize the price that they can charge, we optimize the win rate, we optimize sales velocity and delivery. They now have a net profit margin in the 80s, it's 85, 86% of net profits. Now typically these marketing agencies are owned by one or two people. So those people make net profits every year. And now you divide those agency owners into the one that actually build wealth over time. They understand that it's important to have a savings rate above 15% every month and to invest that into assets, real estate, stocks, digital assets. And those who do that, even if they're doing, let's say 100,000 or 200,000 per year in net income, personal income, they will be soon millionaires. It takes 10 years, 12 years, 15 years, 20 years, but they will have over a million in net worth. And then there are others who are making 3000-002500-00400,000 in net income per year, but they don't reinvest it in assets. And those people will either not get past a million net worth ever, or it will take them very, very long.
- [20:06]
Patrick Francie
So when you look at the kind of assets that you consider, and especially given what's going on today, do you have a basket of assets that you're looking at? Is it real estate, is it bitcoin, is it precious metals, is it stocks? Do you get into that space of saying, okay, here's a place to allocate capital to?
- [20:28]
Simon Severino
Yes. So after a 90 day sprint, we have optimized their sales and many ask, hey, Simon. But there is so much more that I want to learn, like financial freedom, delegation, hiring, etc. Do you have anything that's longer term where we can tackle also the other things? And also I want to learn what to do with my money now that I have money, how to keep it. And so we have a mastermind for that. That's an ongoing mastermind with an annual subscription. And in there we share also how to keep the money and the process there is part one. Design your portfolio. And that depends on your edge. What is your edge? Do you understand the specific field better than others? Do you have alpha? Then you will go automatically there. The principles are the same for everyone, but what you choose is highly, is highly individually. So my personal portfolio is one third real estate, 1/3 stocks. I pick stocks, no ETFs, and 1/3 digital assets. And that portfolio is doing quite well. I have doubled the net asset value on average every 3.8 years. And that sounds pretty fast, but it's not that hard. You just have to hit a 20% growth rate per year, annualized. And it's not that hard actually because the economy is growing slower. But the markets are on a rampage.
- [22:04]
Patrick Francie
Yeah. Given what's going on in the world, when you think about it, I think at 10%, your investment doubles. What is the math on that? It doubles every 10 years or something. So if you're getting 20%, then it would make sense that when you extrapolate those numbers that you're coming in at about 3.8. Is that kind of what you're basing the math on?
- [22:23]
Simon Severino
Yes, that's 20% is the rule of 72. At 20%, you double every 3.8 years. And that's realistic. You can do that. So I started with a little amount 12 years ago and I shared in, in both in my mastermind, but also on, on my YouTube channel, Simon Severino, I share my journey of going from minus 50,000 to right now. Today it's a million and eighty thousand dollars. And I share the exact allocations, the three thirds, and even what I'm buying and when I'm selling things. The core philosophy is I have picked one topic, which is where I have some understanding. It's around data and around pricing power. So who owns the data and who has pricing power? And pricing power is tied to strategic advantage. It's measurable and one part is qualitative. But that's my background. I'm a strategy advisor. So I see strategic advantages when I watch ad markets. So I picked that lane for me and I shared those principles. And the people in our community, they picked their lane. Some of them understand healthcare, so they will pick from health care. Some understand biotech, some understand small businesses, Some go all private businesses and private equity because they understand that field better.
- [23:50]
Patrick Francie
So when you look at what is kind of happening economically and considering that you've got this kind of view of how to separate a portfolio, you know, one third, in your case, you're suggesting you know, an idea is one third real estate, a third digital assets and a third into the stock market, whatever that might look like in terms of individual companies. You're self managed in that regard. You're not buying ETFs. And that's your particular strategy. Now when you consider all of those strategies, are you spending a lot of time in terms of looking at economic data? So in other words, you're examining what's going on economically and making those choices. You know, when I look at real estate, which is one of my areas of expertise, I'm always looking at the economic data that says, okay, this is a good region to invest in. This is a good strategy to use given the real estate cycle. You know, when I look at even the stuff, my stock portfolio or my digital, you know, I invest in Bitcoin, for example, I invest in precious metals. Those are areas that I've learned a lot about over the past several years. Both of which, for example, Bitcoin and or precious metals I've been investing in for a number of years. But I'm always looking at the data. Are you wired the same way? Are you supporting your clients in learning how to look at the data that helps them make decisions?
- [25:18]
Simon Severino
Yes, plus also qualitative aspects. So we have both fundamental analysis and technical analysis for the stocks and for the digital assets. For real estate, it's just location and then you hold it. That's it. I look at the rentability per city and at location, of course must be limited location and then rentability. So in each city it's different. What is easy to rent In Vienna, it's 55 square meters, it's the easiest to rent. It has a 98% renting percentages. And so I go for small apartments in that size that, that are near a metro or near a hospital, near good infrastructure. So it's location and size that I look at and then I hold that forever and I don't expect great returns. That's the defensive part and that's forever. That goes to my kids. Then with stocks, I have a checklist for dividend stocks that's numerical and one that looks at strategic advantage. It's pricing power. I learned from Warren Buffett that the most important thing in a company is pricing power. Everything else is downstream from that. If you have a high pricing power, you have low cost of acquisition of a client. If you have a high pricing power, you have high margins. If you have a high pricing power, you will have. The three things that I look for, I look at operating income over the 10 years, is it growing or not? I look at return on equity over 10 years, is it growing or not? And I look at free cash flow per share over 10 years, is it growing or not? And then I screen 150 possible stocks from my investable universe and the top 10 are my current portfolio. And the goal is to keep, to hold them as long as possible. Because if you pick a good company that has good pricing power over the last 10 years, you can actually relax for the next 10 years. And we have examples, Nvidia Bitcoin. If you pick something that's a good company, you can actually relax for 10 years. If we over trade Bitcoin or Nvidia, it's probably not getting better, it's maybe more exciting, but the returns are probably not getting much better than just buying it and holding it. Everybody who holds Bitcoin more than four years is happy. Everybody who over trades is stressed.
- [28:01]
Patrick Francie
Well, it's an interesting point that you make, which is I've learned over the years that I self manage my own investment portfolio is if I've made mistakes is that I've gotten in and out. Even though for example, I look at some of the companies that I've owned over the years that I got out of and I go ah, I wish I would have now I pulled profits. So I can't complain. But having said that, I can complain and go, oh, I left so much money on the table because I didn't ride out the highs, the lows and just say no. The fundamental of the business hasn't changed. They're at the effect of what's going on economically. And certainly I've learned over the years that in many cases would have been the right time to go all in, you know, go in even deeper. And so that takes the, takes a lot of research because it's so important that. And maybe you would speak to it is that how much emotional decisions are being made in you know, number one, chasing something. You know, when we think about what's going on in the world today and, and I think it was. Is a GameStop is an example of emotional. Now I never got in on the GameStop thing, but it was a thing, right? It was like all this emotionality, everybody jumps in and a whole bunch of people make money and a whole bunch more lose because of the emotionality. It's not a data driven decision. And what you're suggesting, and I agree with is that you know, pick 10 good companies, five good companies, whatever it is for you, and then just let it Go through what it goes through and see if you believe in the model. If in fact there is a pullback, that might be the right time to jump in a little deeper. Is that a fair statement?
- [29:51]
Simon Severino
Yes. And this is why. It's a process. Investing is a process and takes time. And this is why also I've created the 200k club, where we have a 247 Slack group around these things, every Monday we come together, but 247 we have this leg group because sometimes it gets highly emotional at my 11pm and so I go, guys, oh my God. Earnings. Nvidia earnings tomorrow. I feel the urge to do this or that. And then we look at. We look each other deep in the eye and go, okay, back to our process. What's the process? Did the fundamentals change? And so, for example, Nvidia, recently, I sold too early. Typical mistake, selling too early, holding it for three years, wasn't doing anything. Then I sell it, it went through the roof. Now I feel fomo. Every day I feel fomo, but I did not. I did not give in to this urge. So when I feel fomo, I go, okay, there is a strong emotion here, and I'm an emotional being. So I see other people making money. Why not me? So let me jump in. But if I missed a train, I missed the train. That's it. I don't chase stocks. That's why I have the long list of 150. If they dip, I go into the next one. So I'm looking right now at completely different stocks. I'm looking at MSCI and I'm looking at Linde, which nobody's talking about, but they are highest quality, strong pricing power. 10 years of all these metrics that I told you, free cash flow per share, operating income, 10 years, always up. Nobody's looking at them. So I am silently accumulating those two guys, because I have now I have a system and I follow my system.
- [31:41]
Patrick Francie
What were those ticker symbols again for the listener?
- [31:43]
Simon Severino
Msci MSCI CI, which is, you know, there is the MSCI World, MSCI Emerging Market ETFs. This is the company that collects the data. It's a data company, a software company that collects those data that the indexes use. So whenever somebody buys an ETF in MSCI World or MSCI Emerging Markets, MSCI gets a couple percentages. Yeah, that's why it's a high quality company, because it's hard to enter that market. It's a quite established market. It's not easy to become the next indexer. There are just three indexer and they are pretty, pretty defensive. And so it's hard to enter and independent of how the markets evolve. In a down market they're making money because people invest passively in a down market. In the bull market they're also making money. People will always invest in ETFs and they need an index. So this is a high quality company with a high moat, a wide moat. It's always on the Goldman Sachs wide mode list. I look at that list every year to see if my guys are still in the wide mode list. That is also an indicator that they have a defensible strategic advantage. Not just strategic advantage, but they can regain strategic advantage again. And the other one is linde. Linde they create, they package gases for industrial use and for healthcare. So for example, oxygen for a hospital comes packaged. Somebody has to produce it to put it in a package and to sell it to the hospital and deliver to the hospital. That's linde. So again in down years they were making money because they were bringing oxygen to hospitals. And in bull markets they make money anyways.
- [33:41]
Patrick Francie
Beautiful. And of course none of this everybody is investing advice. This is just what Simon is doing in his own portfolio. So appreciate those insights. Now when you look at the model of your coaching entrepreneurs and you know you talk about being able to take 15, I think you use the percentage of 15% and then invested in assets. When you look at entrepreneurs who generally either pay themselves more or they reinvest it in the business, those are decisions, I guess that have to be made. Or are you suggesting that, listen, you are an entrepreneur, you can invest and reinvest in your business, that's great. But part of the hedge or part of your strategy has to be able to take that 15% and get it outside of the being invested in your business to own assets outside of that. Is that the kind of what I'm hearing in that model that you're laying out, Simon?
- [34:41]
Simon Severino
Patrick, it's shocking what I am seeing. I'm talking to a couple thousand entrepreneurs every year in multiple countries. And I ask them how much percentage every month is your savings rate that you put into assets? Can be liquid assets, illiquid assets, but assets. And they go by some of it. It depends. I don't know my monthly income. So you don't know your monthly income. So they pick a bank at the end of the month, whatever is left, that's their salary. And I'm shocked because guys, if you are listening to this and if you don't pay yourself the first or second day of the month, your salary. You are not building any business. And you are also creating a very volatile, very stressful life. So first decision, whatever the number is, pick a number. You can change that number. But pick a number and get paid on the first of the month from your company account to your personal account. You can change that number anytime, but install that system. So get paid a salary. Okay? You are now the CEO of a company. I know that you don't call yourself a CEO. You don't feel like a CEO. But hey, if you own a business, you are the CEO.
- [36:07]
Patrick Francie
But we often say you're the CEO of your life for sure. And if part of your life is a business, then you are the CEO of your business. And pay yourself first is a tough thought process for many to wrap their mind around. And yet it's one of the most important lessons I think, that anybody can learn on their entrepreneurial journey. Simon, given where you are, you know, share a little bit of your own background. So your strategic. I think you said you're a strategic consultant or something along that line. And give me a little bit of insight into how you started your entrepreneurial journey. Did it. Were your parents entrepreneurial? How did you decide that, you know, you were going to be an entrepreneur? And when did that journey start for you?
- [36:55]
Simon Severino
I didn't even know that I'm an entrepreneur, but I kind of became it because I was an employee in a strategy advisory. And when you're a strategy advisor at the senior level, you have to catch your own food. So you eat what you hunt. You have to bring the clients. And so I was bringing clients, but I didn't know how to do it. I was just doing it. Don't ask me. I don't know how I did it. In the first years, I had no method or tactic or anything. I was just always having work. So then I go on my own and I go, all right, now I have to do this. But even more serious, because now if I have a down month, I can't pay the rent. So first, okay, I have to save something. This is how I stumbled upon the savings rate. I literally googled what should be my savings rate, and there was fidelity saying, 15%. Okay, let's do 15%. So 15%. And then I realized it's not even that hard. I got it up to 36% in some months, and now I had a savings rate. So I was constantly putting something on the side. I had no financial literacy, so I just asked, what should I do? Guys, I think it was my, my. My bookkeeper or somebody told me, hey, go real estate. I started with real estate. It was the right advice. So the first 10 years I did just real estate. And it was the right thing to do because the most defensive thing, when you have the least of a clue what you're doing. So it was a good advice. Then from there, I scaled my own business. And so I was the bottleneck of my business. I had to fire myself from operations. I fired myself by getting the process out of my head into a book, the Strategy Sprints book. That became the Strategy Sprints method. Now that there was a method, I could start teaching it to others. So I started teaching it. That became a certification model, and that certification became then a franchise model. So now I am not dependent on the business. The business is not dependent on me. I can enjoy it. I do some things like talking about the business on podcasts and writing books and scaling, scaling the business. But I'm not in the operations anymore. So now I had time to actually get more into investing. And so I started studying stocks and then came crypto and I started studying digital assets. And now that is a couple hours per day. I am my portfolio manager now, which I quite enjoy. It's a fun hobby to have. And it became even a YouTube channel where I'm sharing the current portfolio and why I take which decisions and how I deal with emotions coming up. It's fascinating, right? You learn a lot about yourself on, on this journey. And yeah, people seem to need it because they. They watch it.
- [40:07]
Patrick Francie
Interesting that, you know, you're a relatively young man, you've been on your entrepreneurial journey, but you've achieved what many entrepreneurs struggle to achieve, which is that you own a business. And for me, when I define a business to your point is that your business is not dependent on you day to day. So in other words, you're not selling your time. Which is often what happens with entrepreneurs is they go out on their own, they start a business, but really what they're doing is they're just selling their time. And when they quit selling their time, revenue dries up. You, on the other hand, have created a business model where revenue is being driven whether you're at the helm or not. So in other words, you can step back, you can kind of slow things down and work on the business, not in the business. And that's a fundamental shift that many struggle with, you know, in or on their entrepreneurial journey. And where did you or how did you get that lesson? Because you've got it quite Early. I know for myself, I've owned businesses for 40 years and I share that story often, but it took me a long time to figure that one out. It took me a long time of being the technician in my business before I finally went hold it. You know, I don't really own an asset called a business. And although it was a bricks and mortar business, at the end of the day, it took me a long time to go hold it. I've got to duplicate myself. I got to step back and say, okay, who am I going to hire to do this job? How's it going to generate revenue, et cetera, et cetera. But that took me a long time to figure it out in my world anyways. Where did you get that lesson? Where did it show up for you?
- [41:54]
Simon Severino
Yes, I'm, I'm 44 and scaling the business was something that I was very deliberate about and where I wanted to, to. To really be good at. And I studied, I had coaches, I put a lot of effort into it and resources into it. The investing part, I was more stumbling into it and I'm still stumbling into it. Week by week I'm learning something new and getting more accurate and more precise with these things. And specifically with the holding period, I'm getting better with that. It is a process. And give yourself time. In. In our Mastermind in the 200k club, every Monday we come together and we pick one of the parts. So what, what I help them now do is there are active revenue streams and there are passive revenue streams and you really want to stack multiple of both upon each other. So for example, let's say you are marketing agency and you have now sales, how can you make sales, repeat sales? That's the yellow pyramid that I teach in the Monday sessions. And how on repeat sales, how can you add recurring sales, subscriptions, paid communities, how can you put recurring sales on that? Now if you have now sales, repeat sales and recurring sales, you can relax a little bit and slow down as you say, because it's important to have the time to think. I need a lot of time to think. And in my calendar there are big blocks. 60 minutes, 90 minutes, almost every day. One of them is just for working out. That's it. And one of them is thinking time. This is where I either walk or run in nature with one big question. And the question can be, should I write my second book or not? One question and I go out for a walk for an hour. I don't know the answer and I don't stress myself to come up with the answer. But I hold a big question for a while and in nature usually this is important to your work.
- [44:05]
Patrick Francie
This is so important. And like you, in my calendar, I have blocks of time in my calendar. I call it headspace. So my team and my assistant has those and we position them. For example, before an event, there's always at least 90 minutes, often, well, an hour, at least an hour, often 90 minutes prior to an event where it's just headspace. In other words, there's. There's no meetings in there. There's no to do's in there. This is just me having thinking time. And so to your point is where many entrepreneurs get stuck and they get into the doingness of it and they just literally don't give themselves time to think. But it's very hard to shift gears and you need some wins along the way. You know, it's understanding, you know, it's like, trust me, you can do it. No, I can't trust you.
- [45:01]
Simon Severino
I need to verify and I don't trust either. I don't trust nobody. Yeah, so I hear you. If you go, guys, yeah, yeah, yeah. It's easy for you guys. But I don't trust you. Don't trust. Build income replacement streams, both active ones. If you have a full pipeline, plus some is recurring now, when the next month starts, there is already 50% of your goals achieved. Now you can relax. Of course you can't relax if you're hungry. No, you shouldn't. So pipeline must be full. That's why I'm a sales coach, because that's a fundamental thing that people need. And so I'm here to serve that. And then plus you need some recurring elements. That's the active side. Now let's go to the passive side. The passive side. What about having book royalties on top, some dividend income, some capital gains, some staking income. I made $14,000 this year just from staking Solana. Of course, it's easier for me to relax and go for an hour of a walk if I know that there are multiple revenue stream happening, even if I do nothing. Of course that helps relaxing. And it wouldn't be if I wake up and the pipeline is half dry. I am not relaxed either, guys. Nobody is.
- [46:20]
Patrick Francie
Right?
- [46:21]
Simon Severino
So let's create those multiple revenue streams, both on the active side, some of them recurring, some on the passive side. And bit by bit, they compound. The magic of compounding is you think, yeah, but my $200 into stocks won't move the needle. Wrong. Everybody started with $200 even probably Warren Buffett started with $200 and they compounded over 10 years, over 20 years, yes.
- [46:52]
Patrick Francie
So when you look at what's going on in the world today, you're, I'm assuming, Simon, looking closely at the global macro. So when we consider what's happening with the, you know, war in Russia, Ukraine, what's happening Middle east, the concerns about what's going on with China, when we look at the monetary policies in the monetary systems, us, you know, being at risk of not being a reserve currency. I don't buy that, by the way. I'm just saying that these are the things that are being talked about. And lots of evidence is showing that China right now, for example, is selling U.S. treasuries and getting out of the U.S. dollar. They're buying tonnage of gold as an example. So when you look at all of those factors, or do you look at all those factors or do you just kind of shut out the clutter and just stay focused on what you stay focused on. Can you give me some insights into how you view the kind of global macro?
- [47:51]
Simon Severino
I look at what is in my control and what's not in my control, and I literally have a list. So to remind myself, because when I wake up tomorrow, the world will try to suck my attention into macroeconomic topics. So right now the world is trying to get me worried about the eth ETF approval or not. Guess what? It's not in my control. So there is literally a list of things that is not in my control. Interest rates, approvals of crypto, market volatility. My returns are not in my control. The news are not in my control. Whatever corrupt politicians do is not in my control. Valuations is not in my control. What is in my control? My savings rate of this month. So that's where I focus my research process on how I find the mscis and Lindes. That's signal, not noise. My holding period. Simon, don't sell the winners too early. My risk curve. What are defensive versus offensive players in my portfolio? Defensive real estate, mid offensive team stocks and then very offensive players. Bitcoin, Solana. What is also in my control? My position, sizing. So going in with smaller sizes, being more humble, knowing that I can be wrong and I will be wrong ton of times. So better not go all in, but rather go in in layers, bits and.
- [49:33]
Patrick Francie
Pieces at a time. So let me ask you this question because I agree with what you're saying. We can only look at what is. And again, what can we control? What can't we control? Having said that From a business perspective, an investment perspective, I'm of the mind that I need to do enough research that I create a thesis around it. So in other words, I look at the global macro. I look and say, okay, what do I think is going to happen given the war? Russia, Ukraine, Middle East, China? I look at all those global macro, it is what it is, I can't control it. But at some point, from my perspective, and I'm, and I'm happy to have you give me a different perspective by the way, is I look at it and go, okay, based on what I'm seeing, if I want to, number one, be able to capitalize on this or be able to hedge my at risk mitigate, I have to have at least a thesis that I make decisions based on. That's how I view it. Given that I can't control what's happening with Russia, Ukraine. But what I can say is, you know, based on what's going over on over there, I see an inevitable outcome of xyz. Based on that, I see that I'm going to hedge or I'm going to risk mitigate by doing this. Is that how you look at it or do you literally just shut up the clutter out and go, I got nothing to do with this. I just need to be focused on what I'm doing right now.
- [51:02]
Simon Severino
I look at all of these things, but I zoom out 10 years, okay, so earnings calls don't matter to me. Wars don't matter because wars come and go. Every 10 years, there are a couple wars, they come and go. Same with inflation, deflation. I look at 10 years. In 10 years you will have two or more business cycles. So you will have bear markets and bull markets. And in 10 years there are secular and cyclical trends. I don't look at the cyclical ones, I look at the secular ones. For example, demographic shifts. Will global population get older or younger? This is one thing that I look at. Will people have more kids or less kids? Less kids, Older. Those are secular trends. Now when you go older and you understand health care now, you might go into specific healthcare stocks because you know, as people getting older, they will need some stuff for their brain, some stuff for mobility. That's a secular trend. I look at that. If people have less kids, will they have more companion animals, cats and dogs? Clear secular trend. So if you want to pick that one, then I would study companies like Zoetis, who are in the companion animal veterinary field. Wonderful company by the way. So that's a secular trend. And I would look at that and then, yes, when the earnings calls of Zoetis come, sometimes I look at the earnings call just to see if my fundamental thesis is still correct, if I still can trust management and if they still have a clue and the plan and cost control. Yes, but that's just double checking my thesis. Do I look at inflation rate? No, because that changes all the time. The 2% is an arbitrary number. It might never go back to 2%. Never. It might. We might get deflationary. I personally think that we will live in a deflationary world in 15 years. That's why I don't even care about inflation, because that's just a temporary thing. But as soon as we have high productivity, inflation will turn into deflation. And the hybrid will come from the robots and from AI. We will have more working entities than people because the robots will be super productive and they will do all the boring work.
- [53:38]
Patrick Francie
Right. You know, I like the thought process that you give, and I think it's a good one. And I'm probably not as committed to it as you are, but you do make a really good point, is that when you zoom out 10 years, it changes how anything is happening in the moment, you know, when you. You know. So, because I follow Tesla as an example, I'm just using Tesla as an example, and I follow, I guess, individuals who are huge fans of Tesla. They've studied it, they've been involved with it, they own the vehicles, they, they live, eat, breathe Tesla. You'd think they own the company. Well, they do.
- [54:19]
Simon Severino
I am one of these poor guys. Yeah.
- [54:21]
Patrick Francie
Yeah. So it's, it's so right now, when you look at the drop of Tesla and, you know, whatever went down to 175 bucks or 160 bucks a share, they're going, wow, what a great opportunity. Okay, well, it just dropped 50%. And yet you're going all in. You're going even more. And they're going, yes, because I'm looking out Tesla in my portfolio and, you know, they're doing option trades, by the way. You know, they're leveraging, they're doing all the things that they're doing, although they're not going margin. The point is, is that they look at that opportunity and they're going all in. Because they're looking 10 years down the road and they're going, you know, in. In their world, they'll say, okay, for example, the problem is, is people think Tesla's a car company. It's not. It's a data company. It's a AI company. It's A everything but a car company. And cars are just one of those things that they happen to produce. So they look at it and it's only to say this is and it's much deeper than all of that. They look at it through a different lens. But to your point they're looking 10 years into the future and they're going that is going to be an unbelievable company and they're going to lead the way. So that would be one thought process as an example. And then from.
- [55:40]
Simon Severino
I own Tesla since I think 12 years. I bought it at $30 pre split. So we had, I can't remember how many splits we have, but at some at the beginning it was $30. I went in with exactly this thesis and I made a video about it. I said guys, we will have 5s curves car is is just the first one. It's not even the most important one. Energy battery robots will be the important ones. And I didn't even know there would be another one. AI and fsd. So we have five companies in one how not to enter this. And then there is Ellen who is an and a fascinating person to follow. So hey, he can do stuff, he can do rockets. He might be able to pull this off. We doubled a couple times Tesla and those were wonderful years. Now I shaved off half twice. So at least I hedged that. But I'm still holding, I don't know, $40,000 of Tesla. It feels terrible. I imagine that the next two years it will feel terrible, but only if I sell it. If I look forward 10 years. Yes, there is the risk that it implodes. But what will the world look like in 10 years? Will we have more clean energy, self driving cars or less? And you see, everything simplifies. Will we need energy storage or not? Will AI be a thing or not in 10 years? So it's not easy to hold a stock, seeing it red, red, red day after day, month after month. But if the thesis is intact, you can even stomach that. And it was the same thing with Amazon, with Bitcoin, with other things where if you hold it four years, 10 years, you will be highly rewarded. But you need the confidence and the process that gives you that call.
- [57:55]
Patrick Francie
100%. Simon, you've been very generous with your time. Some great words of wisdom as we start to wind this conversation down. When you're speaking to entrepreneurs, what are some of the things that you would want to share on this particular conversation that we haven't touched on? What are, what are we missing in the world assignment and some of the guidance that you give your entrepreneurs.
- [58:20]
Simon Severino
If you are a business owner. I will grab the book Strategy Sprints and I would start doing one thing that you can grab from our from our website right now@strategy sprints.com there is a tool there called the Daily Flow. You write down, how did I allocate my time today? What will I delegate tomorrow? This is really the core, the fractal, the core habit of being an entrepreneur. If you master this habit of every day writing down, how did I spend my time and what's the one thing that I will delegate next? This is the core of surviving the next 10 years and of scaling a business. So you can grab it for free. It's at strategy sprints.com it's called the Daily Flow and enjoy it. And if you want to go deeper, you can buy the book Strategy Sprints on Amazon. If you want to talk to us, you go to strategy sprints.com, click a button, land on our calendar and happy to talk.
- [59:19]
Patrick Francie
Fantastic. Simon, thank you so much for joining me on the Everyday Millionaire podcast. Love the conversation and I think it's definitely going to be another conversation in the near future that we can unpack this even a little deeper. Thanks very much for your time, ladies and gentlemen. Thank you for listening.
- [59:41]
Simon Severino
If you found value in the podcast.
- [59:43]
Patrick Francie
Please take the time to rate and review and share with others. Share with your friends as it is.
- [59:49]
Simon Severino
My goal to always improve and to provide the highest value for you, the listener. If you have any comments, suggestions or questions you'd like answered, please email me@ceoaincanada.com.
- [60:03]
Patrick Francie
That'S CEO E I N Canada.com I look forward to hearing from you. And until next time. Patrick. Oh.