Tuesday Email: Best at the Wrong Things

Happy Tuesday!

Every Tuesday I'd like to offer strategies for the week ahead and a thought to fuel your action.

Minute 11.

That's when I always want to quit.

I'm on my Peloton doing an FTP test—a 20-minute ride that measures your maximum sustainable power output. At minute 11, my lungs are burning, legs screaming. My brain offers a dozen rational reasons to stop.

"You're just exercising. This doesn't matter. You're not training for anything."

Every time I hit minute 11, I think I've reached my limit.

And every time, if I push through, I reach a level I didn't think possible.

The breakthrough comes after the moment you want to quit.

That's the thing about plateaus. You don't know you're on one until you decide whether to push through or stay comfortable.

Let me tell you about Nokia.

In 2007, they employed some of the smartest engineers in the world.

Their supply chain was ranked #1 globally by AMR Research (now Gartner)—beating Apple, Toyota, and Walmart.

They could produce millions of phones cheaper and faster than anyone on earth.

Every metric they tracked told them they were winning.

And they were.

Until they weren't.

Nokia's problem wasn't incompetence. It was expertise applied to the wrong game.

Their management was dominated by hardware engineers who saw software as a secondary concern.

They optimized what they could measure—inventory turns, production costs, distribution speed. All of it worked flawlessly.

Meanwhile, Apple was playing a different game entirely.

The early iPhone was worse at being a phone. Poor call quality. Terrible battery life. But it wasn't trying to be a better phone. It was trying to be a platform. The App Store didn't make calls clearer. It made the phone irrelevant to the phone's value.

Nokia dismissed it as a niche product for people who didn't need a real keyboard. They kept optimizing dumb phones while the world moved to smartphones. Not because they were lazy or stupid, but because every signal in their business told them to keep doing what was working.

They died comfortable.

I think about my dad at minute 11.

He'd built our wealth management business to $1.5 billion under management.

He was content. He'd achieved what he set out to do—serve families well, provide for his own family.

When my brother and I started talking about growth and change, he resisted.

Not because he was wrong, but because he'd reached his goal. He'd hit his plateau, and frankly, it felt good there. Change felt like risk without reward. Why push when you've already arrived?

That resistance felt rational. Comfortable. Safe.

But we pushed anyway.

It took persistence. Mental fortitude to move past comfort.

And that decision, to push through his minute 11, led us to where we are today: managing over $8 billion.

Two different plateaus.

Two different choices about what to do when you get there.

Here's what I've realized: the wealth management industry is at minute 11.

We've been in rapid growth for 25+ years. The independent advisor model took off, and we've been riding that wave hard.

But every S-curve eventually flattens.

When it does, something interesting happens. Markets saturate. Competitive advantages erode. Firms become operationally excellent with reliable profits.

But organic growth—the kind that comes from acquiring new clients, not market appreciation or acquisitions—flatlines.

You've seen this movie before. Intel. IBM. GE. They stayed true to who they were and declined.

Microsoft saw it coming. They were plateauing too. But they made a different choice. They invested heavily in cloud computing and evolved their business before they had to.

Same pattern. Different decision.

Here's what makes the plateau so dangerous: it doesn't feel dangerous.

Everything looks good. AUM is growing. Revenues are up. Client satisfaction is high. There's no burning platform forcing change.

It's not immediate insolvency. It's gradual irrelevance.

And by the time you see it clearly, you're playing catch-up against people who started years ago. You're at minute 11, realizing you should have pushed through at minute 8.

We're becoming operationally excellent at what we've always done. We're profitable. Clients are satisfied. But we're losing the capacity to create something new.

Innovation isn't a light switch you flip when things get tough. It's an engine that needs time to gear up.

And here's the thing: high performance masks a lack of innovation until it doesn't.

You won't know whether you innovated until you get punched in the face.

The data tells a strange story.

78% of firms hired in 2024 to manage capacity. Yet 83% of billion-dollar RIA firms say limited resources and time are their primary barrier to organic growth.

Think about that. We're hiring people to help with capacity. And still saying we don't have capacity to grow.

We're running in place, faster. Like me on that Peloton at minute 11, working harder but not getting anywhere new.

Meanwhile, 93% of large RIAs rely on referrals as their top growth strategy.

Referrals are excellent—high quality, low cost, trusted. But they're also passive. We're harvesting what previous decisions planted. We're not planting new fields.

It's a one-legged stool in a windy room.

Then there's AI.

AI will optimize everything we currently do. It'll do it endlessly and efficiently. But it won't tell us what to build next or which problems to solve or which markets to enter.

That requires imagination. And imagination doesn't scale through software.

If everyone has access to the same AI and asks similar questions, we'll all get similar answers. We'll all move in the same direction. The differentiator isn't the tool. It's what we choose to do with the insights it provides.

The companies that win won't be the ones who use AI best to optimize.

They'll be the ones who use it to imagine differently.

I know what you're thinking.

"Matt, we ARE innovating. Look at our tech stack. Look at our new services."

I thought that too for a while.

But we're innovating to do the same thing we've always done, just better.

If everyone uses eMoney, Salesforce, and Holistiplan, where's the differentiation? The gap narrows.

There's a difference between optimization and innovation.

Optimization is doing the same thing better. We're still doing investment management. We're just doing it more efficiently. That's me getting better at the same 20-minute ride.

Innovation is doing something new that creates value. It's asking: How do I rethink the client meeting entirely? Not make the same meeting 10% better. But design something fundamentally different for the next 15 years than what I did the last 15.

That's me deciding to train for something I've never done before.

One iterates. The other reimagines.

The other objection: "We're in the people business. There's only so much we can innovate."

I call BS.

Our clients trust us with their most important asset. And in a national survey I conducted of affluent Americans with over $100,000 investable assets, one in two people working with an advisor don't know their life purpose.

One in two.

An advisor could help them find it. But only if we rethink what serving families actually means.

The goal isn't to reduce the cost of advice. It's to increase the scope of advice.

AI can monitor a client's entire financial life in real time—spending, credit, estate, tax. That justifies premium fees even as investment management costs race toward zero.

You don't compete on price. You compete on problems solved.

So here's what to do at your minute 11.

Take 10 minutes. Sit with this question: "What problems can I solve for my clients today that I couldn't solve before?"

Then pick one small step toward one of those ideas.

That's it. One step. The same way I don't think about the full 20 minutes when I'm at minute 11. I just think about making it to minute 12.

Clayton Christensen put it simply: "The only way to avoid the innovator's dilemma is to be willing to kill your own business model before someone else does."

Nokia didn't do that. Microsoft did.

My dad almost didn't. But he pushed through.

The ability to push through a plateau requires two things: redefining what success looks like and tolerating discomfort.

Our industry is hitting a plateau. We have a choice.

We can stay comfortable—and that might work for years. If that's your goal, genuinely, that's fine. Some people finish the FTP test at minute 11, and that's a completely valid choice.

But if we want to keep competing, keep impacting families, keep growing—we'll have to push through periods where we can't keep doing what we've been doing.

The innovation plateau is a comfortable place to die.

It's warm. Profitable. Validated by years of success.

Blockbuster, Nokia, and BlackBerry didn't fail because they were incompetent. They failed because they perfected a model the world was moving away from.

They became the best at what the world used to want.

They stayed comfortable at minute 11.

We can't become the best at what the world used to like.

We need to become the best at what the world wants next.

Every time I'm on that bike at minute 11, exhausted and ready to quit, I have a choice. Stay in the discomfort or stop and feel relief.

The version of me that pushes through always reaches somewhere I didn't think I could go.

The version of our industry that pushes through this plateau will too.

The question is: which version do we want to be?

The best is ahead!

-Matt