My 2024 Theme For Sovereign Entrepreneur

Brad Gibb

Mar 20, 2024

Quote For This Week:

“Most entrepreneurs are not building anything of value.”

- Daniel Priestly

Key Takeaways:

Income is directly linked to the quality of the assets in your business, not just your effort or talent.

Before scaling your business, ensure that you have built a strong foundation of valuable assets to support growth and protect your well-being. Create an ecosystem of unique business assets that add value independently of any single person, including yourself.

Approach entrepreneurship like the game of Monopoly: acquire property (your business), build houses (assets), and eventually trade up to hotels (a valuable, scalable empire).

Continuously work on developing your skills as a leader and surround yourself with a strong team to help you build a lasting company.

My 2024 Theme: Assets.

I mentioned the importance of assets in the last issue of the Commentary, but I want to make it the focus of this week’s issue. It’s that important.

Daniel Priestly went on to say, “Statistically you will work harder and earn less as a self-employed person than you would in a salaried job. The very reasons people start businesses - earn more, work less, bigger impact - are actually LESS likely to occur.”

The first book I read by Daniel Priestly was Oversubscribed. I instantly developed a man-crush on him and his ideas and I recommend you read all his books.

The second book I picked up was 24 Assets: Create a Digital, Scalable, Valuable and Fun Business that Will Thrive in a Fast Changing World. And when I read those two quotes in the introduction, I had to put the book down.

I knew he was right, but I was also upset and honestly a little worried. In order to accept that premise, I had to get a little vulnerable with myself. I looked back at the businesses I have started and grown and unfortunately Daniel is 100% correct. I saw myself guilty of not building anything of value.

Adding Value VS. Creating Value

Now, don’t get me wrong. I know I have added significant value to many, many people during the 10+ years of my entrepreneurial journey. But I think what Daniel is pointing out is there is a difference between adding value and creating value.

Most of us make the leap into entrepreneurship because we see an opportunity to add value. Something we are uniquely good at or have become good at solves a problem for another group of people. We jump in and we go to work adding that value.

And it’s awesome. We get paid, often more than we were at a previous job and sometimes doing the exact same work we were doing for an employer. Everything is great while we are excited about a fresh, new opportunity.

Then something changes. It might be that we burn through our initial network that gave us a launch and our growth plateaus. Or we get bit by the “scale” bug and start wanting to solve all kinds of other related problems, but we need teams and systems to grow. Or maybe time just wears on us and we lose that initial spark.

Whatever it is, if we don’t make the switch in mindset from adding value to creating value, we will max out our potential and growth will stop. All of a sudden other companies, other entrepreneurs, and other new competitors are growing, innovating and having much more fun than us. Meanwhile, our revenue is suffering and profits are drying up.

Now, what Daniel said about not building anything of value hits you right between the eyes. He is right because we, as entrepreneurs, too often have the wrong focus. When most entrepreneurs start their own business, they focus on adding value - but not CREATING value.

Adding value and creating or building something of value are different.

Income Follows Assets (Not Just Value)

If you have never wondered why the results of some business owners who seemingly work equally hard and are equally talented, but make wildly different amounts of money than their colleagues, then there will come a day when you will look inside your own business and wonder why more work is not producing more results.

Don’t believe me? Well, just be in business for a few more years or check out this example: An average real estate agent selling average homes in San Francisco, CA will make MORE MONEY than an average real estate agent selling average home is Wichita, KS. Does the CA agent work any harder? Are they better at prospecting or selling? Nope.

The answer is that income is (always) based on the quality of the asset. Higher quality (priced) assets in San Francisco result in a higher income, independent of the average agent selling that asset.

The truth is that income is not simply correlated with sales and marketing activity - it is inextricably linked to the underlying asset of the business.

Avoid The "Pump And Dump" Trap

Back in my consulting days, I joined a boutique firm where we were hired out as fractional CFOs to help companies go public. At this point in my career I was very young and didn’t know what I didn’t know. And what I didn’t know is that for our top strategic partner we were part of a “pump and dump” scheme.

In the world of micro-cap public companies (also known as pink sheet companies or penny stocks) a very common manipulation and sometimes outright fraud scheme is called “pump and dump”.

What happens is someone acquires the majority of the “float” of a small publicly traded company. Then, they do something with that company - acquire a patent, a mineral right, or create a new partnership. Then they go talk about it.

They “pump” up excitement around this thing they did, because it is what inevitably is supposed to make this company the next Apple, Nvidia, or Microsoft. And all that has to happen is that the share price of that company goes from $0.05 per share to $0.15 per share - increasing by just a dime - and the majority owner triples their money.

After the “pump,” they then go to the now excited market place and “dump” their shares. Even if they can’t get rid of all of them, they are still able to sell enough at the inflated price to make a killing before the selling pressure tanks the stock price.

And now that they have sold all their shares, they disappear and leave the newcomers with nothing. As you might imagine, if you can prove this was done with intent, it’s illegal and by the time I came around to what was going on, the SEC was investigating and I ended up having to testify against my former employer.

Lucky for me, like I said, I had no idea what was happening. I was buried in spreadsheets for 12 hours a day.

(If this gives anyone an idea and you want to run your own pump and dump scheme…I’m your guy lol. I know all the ins and outs and even have a few contacts in my phone from the glory days haha.)

But what this has to do with building assets and my 2024 prediction is this - Don’t fall victim to a “pump and dump” scheme in your own business.

As new entrepreneurs we get a lift off the initial launch of our business, but we are often unaware that the asset producing the income is us. **The initial “pump”, quitting our job, finally getting traction, hitting our first couple of six figures, maybe even seven is exhilarating.

Then, when our income caps out because we have reached the limit of the assets of the business (us), we enter the “dump” phase and decide the grass is greener somewhere else and we seek our fortunes elsewhere.

And the cycle starts over.

This is the real force behind the build and burn cycle so many entrepreneurs go through. I have experienced it myself and have seen it in so many other entrepreneurs over the years.

And I don’t want you to make the same mistake and miss the forest for the trees like so many others. Its usually not that you are burned out or that the market has changed or any number of other reasons. It’s that you haven’t built anything of value (yet). You haven’t created assets (yet).

Rather than giving up and dumping the business, what if we learned to play a different game? Then things could be different.

Monopoly

“A Business Asset is anything that is unique to your business and would continue to add value even if a particular person left.” - Daniel Priestly

Especially if the particular person leaving is you.

If you feel stuck on a hamster wheel, it’s time to build assets.

In the game Monopoly, you start by acquiring the real estate. Then you build little green houses. As those houses accumulate, eventually you can trade them in for a red hotel.

In your business, your initial launch was buying Park Place. You hung your shingle and you own some physical or digital real estate. But now your work has just begun. You are far from having arrived. You have only just now entered the game.

This is the location where you can now build assets. Just like in Monopoly, if you just have the individual pieces of real estate, you’ll never win the game. You have to start adding green houses.

Then eventually you’ll be able to trade up into red hotels.

But if you never build green houses, you’ll never be able to trade into a red hotel. And without either, the rent you charge when someone lands on your square will barely be enough to get you past Go. One more turn around the board. One more year.

Build Assets

“In order to have a business that is scalable, sustainable and valuable, you must build an ecosystem of assets. An ecosystem of strong, credible assets is an Empire.” - Daniel Priestly

In 2024 our theme at The Sovereign Entrepreneur is building assets. I sat my entire team down in January and went over this and several other concepts I’m going to share with you through the course of 2024.

Two years for us were “a year” of Proving Value. We had to establish the need for a Chief Wealth Officer in the marketplace. We tested and iterated on the best ways to work with entrepreneurs. We changed the delivery of our programs, I met 1:1 with hundreds of business owners to learn what was going on and how exactly to solve the problem of wealth. And the results are undeniable.

After getting this initial traction, I was tempted to go into “scale” mode, but thankfully I met a mentor, Taylor Welch, who encouraged me to pump the breaks and build a company that will last on the other side of scale. One that could not just scale revenue, but results and protect my sanity in the process.

So last year was also a Stabilize year. I worked on my leadership and team building skills. I hired good players around me, better than me at their unique abilities. We built stability into our pricing, structure and offers.

And again, with that done, I was tempted to spin up paid ads, give uncle Zuck my credit card and enter “scale” mode. But fortunately, I picked up Daniel Priestly’s book and realized that I had not yet built anything of value.

All I have right now is a deed to Park Place. Yes, I believe what we are doing at The Sovereign Entrepreneur is the most exciting, scalable and impactful thing I can do. It is the most valuable real estate for me on the entire Monopoly board.

But, all I have is the title.

Now, it’s time to go to work and build little green houses.

What are you going to build this year?