Sunday Email: Safety Nets. /Make Things Simple

Read time: ~ 7.45 minutes

Happy Sunday!

Every Sunday I offer strategies for the week ahead and a thought to fuel your action.

We jumped right in.

We understood the business, identified an opportunity, and saw others executing a solution. So, we joined the party. This was the beginning of our journey into building a wealth tech company.

The technology initiative began as an effort to replicate others by creating a fully digital onboarding process. The scope grew, starting with budgeting and account aggregation, then expanding to goal setting, and ultimately building a chatbot to elevate the user experience.

Like many startups, the business shifted. A new opportunity arose that aligned perfectly with our technology efforts. We transitioned from focusing on the consumer to concentrating on the company and wealth managers.

We began by centralizing data, streamlining workflows, and using data and other tools to eliminate steps in the process for teams. The progression was a winding road over eight years, culminating in the ultimate closure of the business due to running out of money.

Many could see the writing on the walls as they read the above sentences: lack of focus and consistent iteration of focus. Yet others would applaud the action and the journey of learning. Both perspectives are valid.

Ultimately, the winding road was due to a safety net we thought we were fortunate to have, but it turned out to be one of the greatest lessons learned during my journey of building our failed technology business.

That safety net? We didn't have to worry much about funding. We integrated the tech business into our highly profitable wealth management business and let the successful business's profits fund the technology business's idea.

Scratching your head? Many would say we were blessed to have a funding source like this to build our tech business. At the onset and during the journey, I agreed. But when I had time to reflect, I learned a valuable lesson: time is both our blessing and curse.

Source:https://www.nfx.com/post/psychology-of-focus

The above chart provides a great representation of the balance between focus and energy. Our goal as business leaders and individuals is to live in the top right quadrant: purpose. This requires being highly focused and having high amounts of energy.

Ultimately, to reach our desired purpose in life, we must be so narrowly focused on what that "purpose" is that we don't see anything else. The world becomes smaller when we have this type of focus because the noise is muted, and every action we take moves towards this sole purpose.

As we pair this focus with high energy, we start to make progress, moving fast and with intensity towards a single defined purpose. Yet, humans tend to live in the bottom two boxes: either with indecision or distraction.

Distraction is the most accessible area to live in today's world. It's easy to explore, find the next cool thing, and get lost in the noise—whether it's social media, regular media, or having technology easily accessible. We are more distracted than ever before. It's not due to a lack of energy; it's due to a lack of focus. In a connected, tech-driven world, we battle focus challenges daily. We intend to reach our purpose but lack the restrictions necessary to harness that energy.

Then we hit lulls. We get discouraged and frustrated at our lack of progress, sapping our energy, and we fall into the box of indecision. To overcome this, we dig deeper into each question and analyze potential solutions, getting lost and detached, ultimately losing focus.

It's a vicious cycle typical for entrepreneurs, business leaders, and individuals. During our tech company journey, the safety net of funding from our wealth management business led me to live in the bottom two quadrants.

It wasn't because I didn't have a purpose or clear goal. It was because I felt I had infinite time and resources. A feeling of endless time and resources leads to an exploratory mindset. We take time to learn, use less efficient mediums to accomplish tasks, allow interruptions, and find ourselves multitasking.

Why? Because we have the time to find the "right" way eventually. Yet, when given an ultimatum to reach an end state, we start to see answers we couldn't find without pressure or constraints.

It reminds me of life in general. We tend to walk through life feeling like time is infinite (despite knowing it is not). When life is status quo, we push things off. For instance, we delay trips to see family because we are busy or it doesn't fit into the kids' school schedule or work. Our actions show a mentality that we have infinite time to spend with family.

But when we receive news that a family member has a dire prognosis, we find that time. Kids' schedules open up, our lives slow down, work becomes more narrow, and we make those trips. We spend that time.

Constraints spur action. Comfort, placidity, and calmness create a false sense of infinity, leading to a false sense of activity. This false sense of activity is the idea that we feel we are making progress, analyzing more, or having more conversations, believing we are getting closer. But when the infinite feeling is replaced with real constraints, like a bad health diagnosis or low company funding, we take real action.

Our focus narrows, and our sights find the needle in the haystack instead of analyzing the hay, the winds, and the weather.

We lived this during our journey of building the wealth tech company. Early on, we had the comfort of funding from our main company, so we spent a lot of time analyzing and testing. Our scope expanded as we aimed for a significant impact, evolving our scope to succeed.

The learnings and the desire for a greater impact led to scope creep, comforted by the funding safety net. If we didn't have that comfort, our scope may have narrowed. The focus would have shifted from creating the most robust and impactful solution to creating the simplest, most focused, yet impactful solution with limited resources.

Resource limitations are powerful. Our clients don't have this constraint when going through financial planning. A financial plan showing someone they will run out of money in 25 years won't spur them to adjust spending from $8K to $5K per month. They respond that it's "impossible."

Yet, when their money dwindles only to afford $5K per month, they adapt. The restriction, the friction, and the constraint create adaptability, proven throughout humanity.

With time feeling infinite, we focus on less important things, believing they are important. But when situations become dire, we become professional prioritizers.

In our wealth management business, we transitioned to the powerful Salesforce platform from a CRM we had used for 15 years. The old CRM served us well, but we were comfortable despite its limitations. During the transition, natural resistance arose. We allowed the team to leverage the old CRM to ease the transition, encouraging but not requiring Salesforce usage.

This led to a focus on differences between CRMs and minor bugs in the new CRM. The team launching Salesforce focused on these nuanced issues due to discomfort and a lack of constraint. Ultimately, we cut the cord, forced the change, and focused on making the system work for specific actions. The issues harped on disappeared as our team adapted, executing in the new system to serve our clients.

This lesson of a safety net from my tech company failure shows up in my professional world as a wealth management leader. Creating comfort, though seemingly right, is negative.

This aligns with Parkinson's Law, which states that work expands to fill the time available for its completion. If given a week to complete a two-hour task, the task will increase in complexity to fill the week. Yet, if given three hours, we would complete it in that shorter period.

Safety nets are a form of comfort, and comfort is the Parkinson's Law to focus and action. Overcoming this requires multiple lessons:

• Self-awareness: If too comfortable, set specific constraints to avoid wandering.

• Partner in the process: Accountability is real. A partner with complementary skills keeps you focused.

• Narrow the goal: Make goals small, simple, and specific. Create change in small ways, building on it once fully realized.

• More is not the answer: Doing more or building more isn't the solution. The answer is usually more straightforward than believed but often missed due to a lack of deep focus.

These lessons apply to building a business and helping others build wealth. Time is vital to compounding but not our friend to action. This is why we delay saving for retirement or decide against financially sound actions, believing we'll figure it out over time. Naivety and optimism have their place, but to take action toward success, friction and constraints are necessary.

A Thought To Ponder This Week

Google launched a website with a plain white background and a text box in the center.

Tesla launched a car.

Apple launched another phone.

The deliverable for each of these companies was simple, yet the innovation was incredible.

These three companies developed innovations that have forever changed the way people learn, commute, and communicate.

From an outsider, it seems so simple. But from an insider, they know just how difficult it is.

The true success of these companies was in making the difficult simple.

It was about doing more, but making it easier to perform.

Knowledge of a topic or an industry doesn’t always lend to simplifying the complex.

The key to innovation is to allow people to do more, easier.

Our industry is seeing innovation happen at a quicker pace than ever before. And this likely won’t slow.

The solution won’t be to just provide more; rather, it will be to provide more in an easier way for the client.

So, as we kick this week off, identify one task you ask clients to do frequently and answer the following question with others on your team: how can we simplify that task for the client?

The best is ahead!

-Matt