I Built 2 Billion Dollar Businesses. Here's What I Learned.

Today, I want to share with you 30 years of business advice after building $2 billion companies. Not only that, I've been an investment banker at Goldman Sachs on Wall Street. I've invested in 100 plus companies. We own over 3,500 units of real estate, and today I'm the CEO of Acquisition.com with my partners, Alex and Layla Hermosi, and here are the seven big lessons that I've learned in this journey. Lesson number one has got to do with people. Now, people always start with like, ah, it's people. Well, what does that mean? I believe that finding A players is a skill, and I'm going to teach you that skill today. An A player is someone that is so far an outlier in your organization that they're carrying a significant load in that organization, meaning you only have to pay roughly 20% more to get an A player, but they probably delivered 20 times that value. Now, why is that trade okay? The trade is okay for two reasons. Reason number one is that 20% more is actually what they want. So you're giving them exactly what they want, and the second is because you're giving them an environment to succeed, they get this 20% to 20 times more value. So the question you may be asking is, well, well, Sean, how do I find an A player like this? Well, I'll give you three pieces of the puzzle. Piece number one is you need to have a business model that attracts A players. Piece number two is how you find them overall, and piece number three is when you find them, how do you keep them? Well, piece number one, you need a business model for A players. If you took the A players, you need to have a business model for A players. If you took the A player business model, it should look like this. You hire an A player, you then create a business model that is challenging and lucrative, and then you take the profits from that because of the lucrativeness, and then you hire more A players. The problem that most entrepreneurs deal with is that they get the easiest possible business model, they have the lowest possible economics, and because of that, they're not able to hire the A player. The problem with hiring A players is once you start to see, man, I'm paying 20% above market for this person, you don't see the 20 times of value that they're going to get. So, the challenge for us as entrepreneurs is to ensure that we can hire an A player, bite the cost, create a business model that is challenging and lucrative because if it's not challenging and not lucrative, they're going to leave, and then you take the lucrative money and you hire more A players. That's how you have a phenomenal organization. Well, how do you actually find these people? When I'm in an interview setting, what I'm looking for is three important things. The first thing that I'm looking for is their ability to communicate. My favorite thing is their ability to communicate. The second question to ask in an interview is, hey, can you teach me something? I want to see what they can teach me and how they package their idea. And they'll say, well, what do you mean? I say, teach me anything. When you take somebody's core idea and they can actually package it up and teach it to you, you see their ability to think clearly, critically, and communicate that idea to you. That's number one. Second is I always ask them, how did you prepare for this interview? Because how you prepare shows just how much you care, and it's very hard for somebody to figure out how to do it. They will tell you exactly what they did to prepare for the interview, and you will know very clearly if what happened in that interview was the real thing. Third, A players will always ask questions about how much they can contribute to the organization. They will not try to negotiate their comp more. They will just ask more about, hey, how can I be involved in the strategic priorities of this business? If in a year we were looking back, what would I have had to do to create this much value? They'll ask more about the results. They'll ask more about the organization that they're able to generate for the organization. And I'm really looking for that. And that, to me, is the give a shit factor. If you start to figure out if they can actually give a shit. And when I read a resume, I'm not looking at accomplishments. I'm just looking for, like, can I actually tell that this person gives a shit? And at this point, I could stop this video right now because if you just did this and you just realized that if you get more A players in your organization and your organization's business model was suited and lucrative enough and challenging enough to actually give a shit, to actually embed and support these A players, you will win hand over fist. That's lesson number one. Lesson number two is how do you make decisions? Now, it feels like this very CEO things to say is how to make decisions. But your business moves at the speed of decisions. Our life is just a sum or sometimes a product of the decisions that we make. But most of the time, we don't know how to make these decisions. And I didn't know anything about this. I figured this out accidentally. When I was playing tennis with Richard Branson. So I lived in the Caribbean and I got a chance to teach tennis to Richard Branson. And if you can imagine, you're on a court with tennis court with a with Richard Branson. And I was trying really hard to ensure that I was not going to ask some dumb question because I had a chance probably to have some conversation. And after rehearsing this for like 45 minutes during a changeover, I asked, I asked him, I said, hey, you run what? Twenty five. Thirty plus companies. You've done this multiple times. You have an airline, you know, a record business, you have a media business. You're still out here playing tennis with me. You clearly have figured out how to make decisions. Do you have a secret? Do you have a framework? You have a thought on like how you make important decisions in your life. And he said something to me, which in the Branson ask way is very interesting. If you ever see Branson, he'll never give you advice. He'll tell you a story. And the story that he told me was that most people just don't have a framework for how they make decisions. And now he didn't really give me his framework. And so the next few years, I read a bunch of books, watched a bunch of videos, like listen to a bunch of podcasts, went with my own experience of building businesses. And I'm like, all right, if I had to figure out the most important skill in my life was to actually learn how to make decisions, I probably should come up with some kind of framework on how to make a decision. So today I want to like I want to give you the framework so that now you may not you may not need to like take the exact framework, but maybe it's a starting point for you because I will. And I will tell you this. Most people, and I'm not joking when I say most people, 90% of people that I meet, I have tried to find and ask about like, hey, what is your process for making decisions? And then they'll say, oh, you know, I just talked to a bunch of people and get all the facts and make a decision. Well, it has to be better than that. So I came up with a four step process on how you make decisions. And here's how it is. The step one is understand the context. Step two is isolate the issue. Step three is accept the risks. And step four is to map the decision. Let's bring it to life. So let's say someone on your team brought you an idea and you said, wait, help me understand what's going on. So you understand the context. And then you say, oh, so the issue that we're trying to solve is blank. Isolate the issue. Third, you say, well, if we do that thing, we're not going to be able to do A, B, C, and 1, 2, 3. Yeah, accept the risks. Because A, B, C, and 1, 2, 3. Everything in business is a trade-off. It's a risk in some way. Ah, now that we know the risk, let's actually map the decision. Meaning, here are the next three things we must do. If you have that framework, it's very easy. Because now, when you're in a meeting and someone is pitching you an idea, in a heated conversation, you can go back to the framework and say, all right, do I understand the context? Awesome. Can I isolate the issue on what is actually the problem? Great. Can I accept the risk from the trade-off? Based on all of this, what are the next steps? Can I map the decision? Just coming up with that framework. Framework for myself, now that I do it naturally, significantly helped me in this process overall. So that's number two, how to make decisions. Here's number three, which is creating options. Most people think that they just want to build a business to sell a business. Or most people think they just want to make $55 million. Well, when you have this singular goal, which is good, what you want, what I've realized over time, after selling five-plus companies, after investing in over 100 businesses, I've realized that it is not about the result. It is about the outcome. It is not about the options. It is not about the exit. It's about the options. It is not about the $55 million. It is about the options. Well, what do I mean by that? If my goal was to sell my business, then I have this unilateral goal of selling my business, and I don't see anything else. So I build it in such a way to sell it, and for some reason, if the market does not allow that, I get stuck. Instead, if I can build my business for the options that I get, it's very different. So what do I mean by options? The options just mean, hey, what if I can build a business, what if I can build a business to sell it? What if I can build a business to keep it? What if I can build a business to trade half of it? What if I can build a business to get an investment from it? Then I ask the question, what would need to be true across all of those options? And that becomes the next part of my business plan. And the reason is, a business is more valuable not because you want to sell it. A business is more valuable because you have more options. If you can just say, if an investor is willing to pay you $10 million for your business, and you don't want it, and you can walk away from it because you have a better option, then that business is actually worth more. And that's amazing, right? So it's not about the exit, it's about the options. And my favorite quote that my dad told me is, if you don't know your options, you don't have any. And whenever I get stuck with something, I always ask myself, what are my options? What are my options? And one of the options that you have is to not do anything. Like not acting is also an option. When you get a difficult, or email, when you get a stingy response, when you get a zinger of a insult, well, you have the option of not responding. Not taking action is a good option. And sometimes we should all leverage that option. Just realizing that I always have an option, and one of those options is not doing anything. And many a time, that option may be a good option, is really good. So remember, it's not about the result that you want, it's about the options. And when you don't know, your options. just don't have any. Here's lesson number four, which is this overused word that is value. Now, it is not about value. When someone says, well, you just have to create more value. I don't understand what that means. But if you can package the value into a value proposition, that changes everything. So whenever I think value, I think, well, what is the value proposition here? Can I articulate the value? Can I package the value up so that it is clearly, unmistakably, unquestionably, there's so much kind of being delivered to me in this. So you may say, well, Sharron, what is the value proposition? For example, you may have heard the Geico commercial, 15 minutes could save you 15% or more on car insurance. Well, it's not. That is the value proposition. They're like, hey, are you willing to trade 15 minutes of your time for 15% or more on car insurance? Very simple value proposition, right? Whenever we are in our business and we're packaging this idea, it's really good. There's a new school system that is bucking the trends of school. And it's called Alpha School. I love it. My daughter's checking it out. And the value prop is, hey, we'll make you two times smarter in two hours a day. Like, that's a cool value proposition. Imagine that they're saying, hey, you as a, in the traditional school system, are going to school for eight hours a day and you get, you know, X amount of value. Well, what if you could only go to school for, do the work for two hours a day and get twice that value? And then we can do the rest of the time. We can give you life skills. I think the value proposition is amazing. Like I would pay for that inside out. This reminds me of one of our first businesses, Telus Properties. We were able to take the business, grow it 10X in five years to $3.4 billion. And then we sold the business to Douglas Elliman, which is publicly traded out of New York. And the value proposition, it was a real estate sales brokerage business in Southern California. And I realized after we took over the business that there was something unique as to why our real estate agents stayed in the business. And as I asked them the question, I was like, why do you stay here? Like, what's important to you being here? If I took something away, what would it be? I kept doing the research. And then I found that the platform that we had built was actually saving them time. So the value proposition that we built was if you can save one day a week, like just being on the Telus platform saves you one day a week, what would you do with another 52 days a year? So our job was to figure out how we can save them one day a week. And if we gave them one day a week back in the year, it gave them a really good value proposition. Because of that value proposition, for the entire time we owned it for the five plus years, we didn't change it. And everything that we built was related to, if we could give you back one day a week, what would you do with the other 52 days a year? And that core value proposition is what drove the business to a $3.4 billion business, which is very cool for us. It gave a singularity of focus, which is great. That brings me to the next kind of big idea, which is number four. I'm trying to keep this in my head. Which is focus. Focus is difficult, right? Especially singularity of focus. I will tell you this quote that really shook me, which was, focus is more important than intelligence. And I've been sitting with that for a long time. And I tried to figure out like, what does that mean? And I was thinking back to my friends from high school, my friends from college, my friends from business school, and the people that I've known for a long time. And I just made two buckets in my head. The folks that on the surface that are extremely successful, mainly commercially, and the folks that I know are happy, but not economically successful. And the two buckets, there was only one big difference. And the difference was that one group was maniacally focused, and one group was not. Well, what does maniacally focused mean? I will answer that with a quote, which is, to do great things, we must do fewer things. And if there is a reason why you have your day job, you have a side hustle, you have an Etsy store, you are doing coaching on the side, you are trading crypto, you're doing all of those things, if you're doing all of those things, it just means that your main thing is not working. And our job is to figure out how to find a main thing that works. Now, it may be a main thing in your work, it may be a main thing in your life. My job is finding how the main thing that works. As I've gotten older, I've realized that the number of, a lot of time I've had with a number of friends is completely reduced. So I have a smaller group of friends, and I have a deeper relationship with them. To have greater relationships, I have to have a deeper relationship with them. I have to have fewer relationships. There's a reason for that. You probably are not going to be able to have the greatest relationship with every single one of your family members. So you choose fewer relationships. Why should that be any different on the business side? And so when our team comes up to me and they say, hey, you know, Sean, I want to do something new. Like, no, let's just do more of what we're already doing. Let's do better of things that we're already doing. Then we do new. We use this formula internally called more, better, new. If you're doing something, do more of that. The more of that you do, you have singularity of focus in the thing that you do, that you do great things. You must do fewer things. And then if you're like, man, this is not working, maybe you find a way to do that thing better. And then if none of that works, maybe you try to experiment with something new. The focus, we live in a world where you can make money doing almost anything. I have a friend that literally teaches other people how to solve the Rubik's cube and he makes $200,000 a year. Now he has a skill and that's amazing. But I bet he never thought that he was going to make $200,000 a year and not use his finance degree from Harvard business school and then instead become an online coach for teaching kids how to solve a Rubik's cube. But he does that and that's great for him. But that is the singularity of focus. I have not met anybody that can do 28 things. It's very difficult because you just don't have enough time in the day and you are human. So I would say if there's things that you're working on, what is your main thing? And can you put everything into related to your main thing overall? All right. That was lesson number five, I believe. Here's lesson number six, which is I want to talk about money. I think money and lifestyle is an important thing to kind of talk about. And I believe that you only have to get rich once. You only have to get rich once. And now that may sound normal, but I will tell you, most of us, the reason we don't get rich, the reason we don't just get rich once is we've not built a system for it. I actually came up with this theory called the wealth ladder. I want to walk you through how to get rich the first time. No one has taught us how to get rich. Schools teach us how to get a job. Schools teach us how to learn photosynthesis. Unless you're a marine biologist, you don't need to know what photosynthesis is. And that's besides the point. But people care more about what graphing calculator you use and how much math you know and whether you can do pre-algebra, whether you can do AP, whether you can take the SAT, whether you can go to college, whether you can crush it. All of that, it teaches you, it signals that you have the ability to follow a process. But it doesn't teach you the thing that you actually need to know. It proves to the world that you can go conquer and do something, but at the end of the day, you don't actually do the thing. I wish there was a SAT for managing money in your life. Because if they had that, people all manage their money better. And this is why I came up with this idea called the wealth ladder, which is the first thing that you need to do is to have a decent life, is to have your active income greater than your monthly expenses. Meaning your job that you trade time and money for pays for your life, pays for your lifestyle. If you can do that, then at least you're at a point where you can think and you're like, man, you know, I'm working, I'm feeling like a contributing member of society. And therefore I'm actually making some money. The second level is once you are making a little bit more, where your active income is a little greater than your monthly expenses. So let's say you're making $10,000 a month, and you spend $8,000 of it, well, you have $2,000 in surplus. Well, that's good, because now you can have start to build a system to manage your surplus in some way. If you don't manage that surplus, you will never actually get ahead. Number three, figure out how do you actually take that surplus and invest it in some assets. That is the asset phase. So you're like, well, what is an asset? An asset is something that pays you to own it. Well, most people are like, well, Sharron, I just have a small surplus. How am I going to create this? Well, that's why I like this concept called a TIGA, tiny income generating asset, which is you have a little bit of money and you start to figure out how to become an investor. Because once you've figured out where your active income is greater than your monthly expenses, any of the surplus does not matter on how many more active income skills that you have. You have to learn to become an investor and allocate the resources better. And then last but not least, you have to figure out how do you generate some passive income and what is passive income? It's just pre-funded income where you're not trading time for money, but trading money for money in some way. I say this because once somebody knows a path to wealth creation, once somebody knows, has a roadmap for that. If there were two schools, right? Two types of schools. School number one went grades K through 12 and taught you all the skills that the traditional school system has. Or school number two, went from K through 12 and taught you all the things that you need to know about life and relationships, I would just send my children to school number two because everything else in this modern age of AI and learning, they could just figure it out, but they don't know how to make money, create value in society, have good relationships and be a better citizen of the world. The fact that we are not taught those things is why this is important. You need to learn those things. So you have to figure out now, whether you like my wealth framework video or not, which you should like, we'll link it in the channel. You can check it out. There is a wealth ladder and you can actually check out the wealth ladder. But most importantly is that if you don't have a framework for how to get rich once, how to get rich the first time, you will stumble and struggle every time. And you may just think, man, I just need to get a better job that pays me more money. Getting a better job pays you more money, only gets you to level one where your active income is greater than your monthly expenses. That's the problem, right? So lesson number six is you only have to get rich once. And to do that, you need to have a system that allows you to do that. And that system is not, we're not taught that. Maybe you should learn how to get rich once. Learn the wealth ladder and that'll teach you that. All right. The last thing is the last big lesson that I've learned is the hardest one, which is in leadership. And leadership is such a broad and vague term. And I want to give you, I want to give you one simple quote that I, that my partner always talks about. And she said that a good leader defines what good looks like. Now, what does that, what does that mean? Let's say the job of the leader is to organize the business in such a way that everything goes according to his or her vision, his or her plan. Well, when, when an A player comes in or an employee comes in, they have no idea what's in your head. And the old school version of this was let's go write some SOPs so that, so that someone coming on can open a binder and read 18 pages of an SOP to go do something like, are you serious? That's terrible. Why would anybody want to do that? Right now, if it's an extremely technical job, I get that. But, let's say there's Jimmy in your business. And for some reason you hire Jimmy and Jimmy wants to be there. Jimmy has, you know, Jimmy has the skills, but, but Jimmy's not delivering on what you want Jimmy to deliver on. Well, what do you do? Do you tell Jimmy he's not delivering on what you want to deliver on? Do you, do you put Jimmy on a pip and write him up? Do you start to look for another role? Do you get disillusioned that you can never hire a person in that role? Is that what happens? Well, that's what happens to most people. You're like, man, I can't believe I'm paying Jimmy a hundred thousand dollars a year and he can't even do that thing. Well, the crazy part in all of that is that's not true. It's not true because if you just take responsibility for why Jimmy is failing, Jimmy will succeed faster. And here's what I mean by that. If, for example, Jimmy's doing, uh, is writing a memo in a certain way, and you don't like the way Jimmy's writing the memo. If you take responsibility for that and say, Hey, Jimmy, you're doing a great job writing these memos. I see you working really hard. Um, I have not done a good job of showing you how we write memos in this organization so that you can deliver great value to our clients. Here are three memos that I believe to be really gold standards on how a good memo should be written. You're already halfway there. Uh, are you could, if you could just model the next set of memos based on these, I think, I think we just crush it. Now, what does that do for Jimmy? Jimmy's like, this is amazing. Sharon just told me defined for me what good looks like. Therefore, when Jimmy does a thing and it doesn't look like the thing that I shared, he knows there's a Delta. And so he doesn't know what good looks like. He has no idea what to do. So in this case, you're helping Jimmy define what good looks like our job as leaders. What is the job of a leader? Our job as a leader is to define what looks good, looks like for the entire organization. Now, if every single person, I always try to push it to the extreme. I always start to think about, all right, if I have 15 people in my company and each of them are doing a hundred total tasks, and I have found a way in the organization to define what good, good looks like for all hundred tasks. Well, then I'll know very clearly whether the person is doing it or not. And then you just get the new person and say, this is what good looks like. Take full responsibility for that. It is not the job of the person to define what good looks like for them. It is our job as a leader to define what good looks like for us. And if for some reason, if they don't want to work with us in that capacity, they should not, they can stop. We have to define what good looks like. And if there's anything that we can do, anything that you can take away, it doesn't matter. Even if it's just for yourself or your virtual assistant and heck, even when you're talking to AI, what do you have to do? You have to define what goods looks like. You have to tell AI, Hey, I want this slide deck to look like this. This is the thing that I put together. I want you to mimic this approach. Working with AI is just like working with a human. Because when you tell the AI, this is what good looks like. The AI is like, Oh, okay. I don't have to guess. I don't have to go to the mediocrity that I've been trained on in the internet. I can just do exactly what you tell me because you define what good looks like. A great leader's job is to define what good looks like. And when you do that, you do it for yourself, you do it for AI, you do it for your team, and the team knows how to perform at the highest possible level. Those are my seven lessons, 30 years of business advice in seven lessons for you. So if there's one lesson that kind of you learned from the last 30 years of building a businesses for takeaway for me, I hope that there's one of them in that. Business has winners and losers in a hard way. Success leaves clues, and I hope one of these is a good clue for you.