Kitces & Carl Ep 107: The Strategic Planning Process And Coming Up With (New) Ideas To Try

***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.

Show Notes

• Office Hours: Annual Strategic Planning and Setting Your Business Vision for 2023 (Cody Garrett)
• Kitces & Carl Ep 59: The Time-Finding Trap – How Do You Find The Time To Get More Time Efficient?
• Why Aren’t Checklists A Financial Planning Standard?
• fpPathfinder
• Behavior Gap Radio
• Where Good Ideas Come From: The Natural History of Innovation by Steven Johnson
• The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries
• Checklist Manifesto: How to Get Things Right by Atul Gawande
• Tim Ferriss
• Josh Brown Reformed Broker blog

Kitces & Carl Podcast Transcript

Michael: Well, good afternoon, Carl.

Carl: Greetings, Michael Kitces. How are you?

Michael: I'm doing well. How are you?

Carl: I'm good. Yeah, things are super good, super good.

Michael: We're a little way into the new year, what are you working on now?

Carl: Oh, right now the thing on top of my mind is skiing just because we have so much snow.

Michael: Well, being the winter season while you're in Utah, that seems oddly appropriate.

Carl: Yes, so much snow, so much snow here. So, yeah, no, that's good. And obviously, anytime you're at the beginning of the year, early in the year, you start to think really carefully about, what are you doing with your life, you know what I mean? What is your work? Who are you? What does it mean? It's such a cool time of the year. And I know we can do this any time of the year, but there's just something in the air about thinking about, what are you doing with your life? And I love that. So I've been thinking a lot about that. I have no answers, of course, but I've been thinking a lot about that.

How To Filter Ideas And Narrow Down Choices [01:18]

Michael: Well, just to a large extent, it reminds me of just the annual strategic planning process, where like, "Okay, what are we going to do this year? Where are we going to focus ourselves?" Yeah, we did an Office Hours for Kitces back in December around that theme as well, of just, what's your strategic planning process? How do you try to set your strategic plan for your business or for yourself, setting your new goals?

And it struck me, we had an interesting thread of conversation that came up for a while in the Office Hours that was essentially like, "How do you figure out what your strategic thing should be?" Because to be fair, there's...strategic planning often gets talked about by people who have a lot of strategic visions. And the answer is like, "Yeah, I have a never-ending flow of ideas in my head, I just have to pick the thing we're going after." And that's their version of strategic planning.

But it was a powerful reminder that just, for some of us, that that's not how we're wired. We don't necessarily have that flow of like, "Here's the new cool things to do." Just figuring out , "Well, what do I do?" It's a crowded space, and I feel a lot of competition, and it's harder to get clients, and just this is a challenging environment like, "What do I do? Where do I get ideas?"

I think is a really interesting theme. A version of this came up last year, we did the episode a little ways back where I talked about the big rocks and the pebbles in the sand and put the important things in the jar of time first so that you make sure you get them done and then let the rest of your life form around them. And it's another version of focus on the big things first, but it also presumes that you know what the big things to focus on are, which is not always the case. We got some feedback for that episode as well. It's like, "So how do I figure out what my big rocks should be?"

So, I thought it would be interesting to kind of follow that theme a little. I know we're a little bit biased because you and I are both people who have a lot of ideas, so it maybe comes and flows a little bit easier, more natural for us. But for those who maybe are struggling with like, "I don't know what my big idea is. I don't know what my thing is, or should be." How do you spark those ideas, that inspiration, what do you do? Where do you go? How do you find those ideas?

Carl: Yeah, it's such a great question. It's one of my favorite subjects because there's so much to think about in terms of...and there's so much I wish I had known 15, 20, even 10 years ago, I wish I had known more of this, around the process of... I think of this just as, how do I create something? And in order to create something, I've got to know what the thing is I want to create.

And so let me...I'll just walk you quickly through the framework and I won't elaborate a lot. And then you're going to tell me where you want to dive in and then we'll talk about how you think about it as well. I just think of it in a couple of steps. And it's really interesting to me how sometimes we over/under-emphasize different pieces of it. But I first think of it as, look, there's got to be some process. At least in my mind, there's a process of gathering information. Right? And you could say, talk to lots of people, read lots of books, have lots of conversations, sort of bounce around. And that's the classic... That's why people talk about coffee shops. And that's why we had the whole, historically, we have things like salons, right, where you would get to get salon conversations, right? Where you'd get together, mastermind groups.

All of that is around... and Steven Johnson has done some really interesting work around this, all of that is around ideas bouncing around, 2 ideas hitting each other and something interesting coming out of that. So, I think that's an important part, I've actually sketched this out, that should not surprise anybody. But I think of it as that first piece, just sort of this idea of just exploration, however you do that. And I think conversations is a really easy way, reading, and consuming, absorbing, right?

And then I feel like there's this little bit of shift where you start to say, "Okay, here's a bunch of ideas, here's 2 or 3 that resonate with me." And I think that shift to me, I wish I had known that, more of that could come from intuition and how I felt. You could feel your way into that, instead of just... Please don't get me wrong, I'm talking about after doing the analytical work. Right, that's sort of, I've been exposed to a bunch of ideas, I've made a list of some of them. There's an interesting process of narrowing that down where I say to myself like, "Jeez, what feels good?"

And to me, that involves the opposite, quiet time – thought. To me, it's really important that it's outside, that may just be a personal thing. But I do think there's some evidence behind time outside, it helps with that clarity process. But whatever it is, quiet time, introspective, the opposite of what we were doing earlier. And then it still feels...but that's still part of the messy middle. I still think of that as...one comparison, I always make is, in that early stage of the creative process, if you will, the strategic process that, what am I working on, the big rocks, whatever we want to call...we don't have to call it creative because then that causes so many problems for so many people. So we'll skip the word creative. But in this early stage of exploration, it will feel messy. And one example I always point to is if you're just doing something as simple as buying new running shoes, have you ever read the reviews on Amazon? And when you're done reading the reviews, do you feel more or less clear?

Michael: Usually less. I feel like that's part of the challenge around this, I'm not sure where the ideas come from, and if I do, I don't know how to pick amongst them.

Carl: Yeah. So…

Michael: I'm not as visionary to say like, "I see this is where the world is going and so I'm going that way." It's like, "No, I'm really not sure, that's why I'm trying to figure out these answers. But I don't know the answer. If I knew the answer, I wouldn't be looking for an answer."

Carl: Yeah. So, I think step 1 is study it out, research it, and all of that can...and I want to hear conversations, exploration, reading, reading reviews, pros and cons lists, all of that stuff that we all know how to do. And that may land you with a pile of things like, "I could do this, or I could do this, or I could do this." And that's going to feel really confusing. I used to think the confusion was a sign I was doing something wrong. I'm now really convinced it's a sign I'm on the right track of like, "Ah, there's angst. I'm not getting there. What is it? It's nuanced. It's confusing." That's the messy middle.

And then there's a step. I just think there's this step where you have to just go...my wife would say, "Do your sun salutations," right? "Get quiet, and say, of this list, what feels...they're all good ideas. Here's 3 things I could do next year, I want to start a podcast, I want to start a weekly newsletter." If we're just thinking about marketing ideas, right? "I want to focus on a new niche, whatever." There's 3 good ideas, they all seem to be good. And we have to let go of the idea that we can know which one's right because you can't, you don't know, that's part of the problem with the future.

And then I just think we stop and say, "What feels right?" And then this is the last step in the process for me, and then we'll dissect and talk. And I love to implement the law of negative consent. That's what I call it, the law of negative consent.

Michael: Okay, what's the law of negative consent?

Carl: I've never been able... I have friends who feel like they can get like, "I should go in this direction." Right? They feel like they get inspiration or a real clear signal from the universe or even from God, right? See, I've never been able to get that. What I can get...so I've reversed that. I've said, "All right, I've got this list, done all this study, exploration, and confusing, confusing, confusing." I've developed this list of 3, I've got really quiet, I think, "This one feels like the right step."

And then what I do with the law of negative consent, is I say to the universe, for me, and it doesn't have to be for you, I say to God, but we can say to the universe, right? "I'm going in this direction. And I'm going to count on you to tell me if it's wrong." Right? "I'm going in this direction, I'm going to count on you to tell me if it's wrong. Here I go, you better say something quick, I'm going." Right?

And then you just... All that is this process of now opening yourself up to having a strong opinion about the future, about where you're headed. And then this phrase, I love this phrase, actively looking for disconfirming evidence. Right? And this disconfirming evidence could come in a bunch of different things, but actively looking, oh, some information shows up where you're like, "Oh, I guess that wasn't exactly right and I'm going to course correct." It's very similar to the job we do with clients in terms of planning.

So, let me just recap, right? Study, research, pros and cons, read, conversations, messy, calm, develop a list of 2 or 3, 4 or 5, another round of study, calm, "I'm going to go this direction." And then I think it's action, and counting on evidence to show up to help you know where you're wrong. That's how I do it.

Michael: Interesting.

Carl: What are you going to do with that?

How To Increase Opportunities For Idea Inspiration [11:54]

Michael: Well, I just say it reminds me of our prior episodes along these lines, right, that just our different styles, I need to study the bejesus out of it before I take my first step. You like to take your first step and then find your path as you go, right? Wonderful variability of human beings, we can come at it very differently, and get to their place. So, I guess it's similar in that vein. Yeah, the law of negative consent sounds neat. And yeah, I can't possibly just start going in a direction and wait for the powers that be to tell me that's wrong. Nope! There needs to be spreadsheets that have mathematically analyzed the likelihood of this in all possible ways before I put just my style to it.

Carl: I'm super curious about that. Do you really think that...? I'd almost be curious to pick a specific thing that you've done and break it down, but maybe that would take too long. Do you really feel like you're certain before you start taking action?

Michael: No. No, I basically never.

Carl: Okay, good.

Michael: But I take really calculated guesses, very calculated, upside, downside, opportunity, risks. So, maybe it's...maybe let me frame that a little bit for just my process of what this looks like. I'm going to try to follow sort of the framework that you'd said because we do have some similarities. So, I guess at least my version of where and how it gets translated to action is a little bit different.

So, I do agree, it starts with just, what's your process for gathering information, for gathering ideas? And yeah, to me, at the most basic level, new ideas come from outside the world that you live in today. You won't get new ideas doing the same things the same way. And so, what that means a little bit more directly in practice...Cody Garrett, made this great comment on our Office Hours around this theme that he had said, "If you feel like you don't have enough ideas, it's probably because you're not having enough conversations. You're not talking enough to other people."

And when I get a lot of questions of, "Michael, how do you find all the different business ideas and things that you've done in the advisor space?" How did I end up making more businesses than most people? Yes, a little bit of it is the peculiar idiosyncrasies of my ADHD, but that aside, it's because I talk to more people, because I put myself into a role where I was going to conferences a lot, in part because I was speaking at them. But the business of being in conferences made me in the business of spending 10-plus years of going to event after event after event, week after week after week.

And in part, that was the job I was getting paid for for a while. But that also became the conversation laboratory breeding grounds that, yeah, when I go to a conference every week of the year and talk to advisors every week of the year, and I do that for a whole bunch of years, a lot of ideas start popping out.

Carl: For sure. For sure.

Michael: And I recognize, to some extent, not all of us are in the position to go to conferences that much, but the essence is still the same, I used to have a label on this, Carl, around, "Doing what you can to increase your surface area to be out there more so that there are more chances for opportunities to whack into you." So, to me, in part, that's why areas like specializations or niches, yeah, we set it however many minutes and we are, it gives you an opportunity to get repeated exposure in a particular domain because it's the repeated conversations with the same groups of people, but different folks within that group. So, you hit it from a lot of different angles and, eventually, you get to start connecting dots that aren't normally connected. And those are essentially the sparks of ideas and inspiration.

So, whether that's going to conferences, just getting out into the community you're trying to serve, books...I guess that's actually worth noting as well, book books, not social media, not just to knock on social media, but not social media, keep up on the news and information, book books with covers, you can do it on Kindle if you're so inclined.

Josh Brown had a great post about this on his Reformed Broker blog, it was 3 or 4 years ago, where he did a big discussion that essentially, he was going to read less news and fewer blogs and read more books and had really inspired me in a similar direction. So, I made a conscious shift a few years ago of just less news, more books, and not just for the whole dynamic.

Carl: Me too.

Michael: It's a little depressing from time to time. But just books tend to have much more packaged concrete ideas that we can take action on, or that we can do something with, they really spark new ideas. And it's not rocket science, go find best business books, best nonfiction ebooks. If you're looking for business ideas, there are lots of classic business books, you don't have to find the next new, amazing, unique thing that no one's read, find the same thing that everybody else has read that they think is amazing, there's a reason why. And I found this, I've gone back to read classic business books, I'm like, "Oh, yeah, this actually connects some really helpful dots for me that I hadn't really thought about before."

So, gathering information, but to me, that's a very conscious effort of going to conferences, going to gathering places where you can talk to people in the community you're serving, reading books, not news, book books, read one a quarter, read one a month, you don't have to do the whole, "I read a book a day," hardcore crazy reader folks. No offense to them, if you're that person. Just get through a couple of books in the next year, get out to a conference or 2 in the next year, just increase your surface area, so that some ideas can whack into you.

Carl: Can I mention 1 thing here? Don't lose where you are. But tactically, I think for this specific audience, if you want to know great strategic focus for the next year, particularly around growing your impact with a specific subset of humans, we'll call them clients, the single best thing you could do is have 10 conversations where you ask them. You just call and say, "I'm thinking about the strategic direction of our firm this next year," and it helps if you have a specialization or niche, "and I wondered what you thought about this. Could I take you to coffee and ask you a few questions?" Right. If you did that 10 times you will know the strategic direction for that "niche." Sorry, I'm using air quotes as if, if we say it in quotes, it doesn't count that we said it.

Michael: You're using air quotes that you're literally pantomiming with your hands as though any of the people who are listening to the podcast can see that you're making physical air quotes with your hands. Now, we do broadcast this to YouTube as well. So, the people who are watching this can see your air quotes, the people who are listening or hearing us talk about you air quoting with your hands.

Carl: I just air quoted niche, for all those people listening, niche.

Michael: No, don't start, don't start.

Carl: Okay, go back to where you were.

How To Vet Ideas Before Implementing A Strategic Plan [19:47]

Michael: So, the most powerful thing to me actually, that you highlighted in that discussion, is if you're having a lot of those conversations, you're reading some of the books and you're getting different ideas, you're getting conflicting ideas, you're feeling more confused because you're getting a lot of different things, they don't line up with each other. I think you have a great, just a fantastic point, Carl, that means you're heading in the right direction.

And I think it's a powerful point to make. Because for most of us like, "Yeah, I started doing that, and then stuff got too confusing. And everybody said, do something different. So, I was just like, whatever, threw my hands up in the air and walked away." When you're reaching that point where it's getting confusing, to me, that means you're heading in the right direction. I think that's a really powerful point that you made, Carl, because look, if it was straightforward, and there was just one concrete answer that would work for everyone, well, frankly, we would just publish an article on Kitces about that, and everybody would do that. And then you wouldn't even need to write an article about it because it would be what everybody would do, and it would just be accepted knowledge, wisdom, and would be what we all do.

The fact that we're trying to do something different, unique, something that advances our business that may be different than what other people do, there won't be a single standard answer playbook that's universally good for everyone. If you feel like some of the information is conflicting, to me, that means you're actually getting deep enough that you're starting to see some of the nuances, and complexity, and opportunities. And it's okay, it just means you haven't found the thing yet. Have another 10 conversations, read another book, go further down this road. There are people that spend 2, 3, 5, 10 years finding the strategic thing that then ultimately becomes what they build on for the rest of their lives and career.

So, if you're feeling that confusion, to me, just it's such a powerful point, you're on the right track, it means you just have to keep going with more conversations, more books, more surface area opportunities, until you find some dots start connecting, right, as you said, there's a few things that start resonating like, "I don't know if it's right, but it just is kind of clicking for me that I think one of these 2 or 3 things might work." Then when you get there, you're on to the next step, or at least you're getting to the next step.

And the next step to me is still not you do it, at least for me. Your law of negative consent, so you might jump in faster. To me, I'm not there yet. Then I'm in the, "Okay, this is getting a little bit more concrete, I got 2 or 3 ideas, now I need to vet this further." And vetting it changes a little bit because ideas just come from conversations with people and reading stuff en masse. It's like the more interactions I can have, the more opportunities I might come across the thing that strikes my fancy, that's an increase your surface area phenomenon.

When you get to the vetting, "Okay, which of these I'm I actually going to do, and is this a fully-formed idea?" This is about going small, focused conversation. So, for me, this is study groups. I've had a study group I've been in for more than 15 years now, for a lot of my early career when I was really starting to build stuff. Bring it to them. "Here's the thing I'm thinking about. Am I crazy? Someone gut check me on this, about whether I'm smoking something or if this is reasonable."

Coaches, mentors, just like, "I'm thinking about this thing. I trust you and you know me well, we're getting specific. Could I do this? Is this a good direction? What am I not thinking about? What might blindside me around this? So, the ideas come from the surface area, the vetting comes from focus with people you can have more intimate conversations with. Because the fundamental thing you need in the vetting stage, you need someone who can call BS on you if it's BS. We need a certain level of friend, confidant, colleague, mentor, or coach person to be able to do that, right? If you have the conversation with a light stranger, they may throw an idea or 2 out there, or they may quote something at it, but no-one gives you hard feedback. Casual acquaintances don't give you hard feedback, they bounce ideas with you.

Carl: Quick word of caution, too. I think we're actually on the same page by the way, I think of all this as the studied-out messy process. At some point, the ideas that fall out of this process. So, yes, couple of ideas, go talk to people. 2 things I want to just quickly comment, don't lose your spot. New and novel work, anytime you're doing new and novel work, it's going to be scary, right? There's no path. There's no... If you truly want to do...which is why most people like the idea of being creative or disruptive more than they actually want to be creative or disruptive because it's actually quite scary...or contrarian is another one like, "I'm a contrarian." "Really? You want to know what it really feels like?" So, new and novel work, just realize that's going to feel scary.

Now, this last bit I just want to touch on is I used to have...well, he's still a friend, but I don't call him as much anymore. Yeah, his name is Jason. I have lots of friends named Jason, if any of you listen to this, please, it's not you.

Michael: It's the other Jason.

Carl: This Jason will not hear this. So, I used to call Jason with every business idea I had. And Jason would tell me...he'd ask some questions, and he told me, "It's a great idea." And I'd go home and I tell my wife, "Jason told me it's a great idea." And I would go do it and it wouldn't work. And after a couple of rounds of that, my wife was like, "When are you going to stop calling Jason?"

So be really, really careful about the confirmation bias problem inherent in that process, just be aware of it in your head like, "Wait, am I just calling the people who'd tell me this is a good idea?" Because you're right, like finding someone who's...

Michael: You need to bring it to the people who will call your BS.

Carl: Yeah, you got to be really careful about that, which is exactly what you're saying.

Using Micro-Actions To Figure Out Idea Viability [26:01]

Michael: So, then to me, you get to step 3. Okay, I increase my surface area, conferences, coffee houses, conversations, books, at least for me is a big one. Some ideas hit my radar screen, I got through a whole bunch of them. They're really confusing. I got through further and a couple of them started, cropping up consistently resonating with me. So, I got a shorter list and I started batting that conversation around with people I trust, who will tell me like, "Dude, what you're saying just is not going to fly, back to the drawing board." Right? Who can give me the hard feedback if that's what I need to hear?

Then to me, I get closer to some kind of action. And for me, by now, like that vetting process probably involves some spreadsheets or math or what's the opportunity, would my clients like it, could I charge differently, how many would take it, what percentage would take it? Or just starting to do the math of, does this move the needle for the business in an interesting way if it works? And what happens if it doesn't?

And then, to me, you get to, "Okay, I've got a pretty good educated guess. What's the smallest increments that I could try this?" The smallest increment I could try this. So I find out whether people who would pay me actually might care before I go all in and spend a whole bunch of money and time and effort to create a thing that it may turn out, nobody's really that into.

And if anyone wants these from a book end, highly recommend "The Lean Startup" by Eric Ries, who I think gives a really good framework around it. They call it their minimum viable product or MVP. But like for some examples of this in practice. So one of the businesses I'm involved with is called fpPathfinder. We make flowcharts and checklists for financial advisors. So you can have a checklist to go through and make sure you can cover all the Roth conversion ideas, issues with clients, you can white label it and send it to them for marketing purposes, or share your annual numbers thing with COIs to build marketing, all built around just, how do I make sure I've got all the numbers or information in one place? And it's done very well, couple of thousand advisors now that pay for the fpPathfinder service.

My test to start that, I wrote an article on the Nerd's Eye View blog, I think, almost 10 years ago now, that just asked, "Does anybody think it would be helpful to have flowcharts and checklists as a financial adviser? Would that be interesting to anyone?” Well, I feel like we've got a gap in this because there really isn't anything for it for financial advisors. And this was not long after Atul Gawande's Checklist Manifesto had come out. So I was kind of using the theme of the book and vibing on it as well. It was the most popular article we published that year.

A lot of our blog posts, even if they're popular, maybe we get half a dozen to a dozen comments on the blog post. This thing has 152 comments on it.

Like, "Oh, wow, the advisor community apparently really, really wants this." I didn't even launch a business, I just wrote an article that said, "Does anybody else feel like checklists are missing in our lives as financial planners?" And when a whole bunch of people showed up from our advisor communities like, "Yes, I want a checklist too. This will be so helpful to have more checklists. Can we make more checklists and flowcharts?" Then we went and made a business for it.

So I knew it was going to do well because we floated the idea and put something out there before we ever went through the process of, build a business, stand up an entity, make the initial thing, build the whole website, right? There's all this stuff that it takes to launch something new. And it started with, right, surface area, talking to talking to advisors, reading books, a lot of that started with Checklist Manifesto, but then it was conversations at conferences like, "I've been thinking about these things. Does anyone else feel like this is a gap?" I got a lot of that feedback. So, it got interesting.

Then I brought it to my study group that I had at the time and talked to 1 or 2 mentors that I had at the time like, "I've been thinking about this thing. Am I crazy? Would people pay for this if we just made them nice and packaged or let them white label it all with their own firm's name? Would people pay for this?" And got some positive feedback like, "Okay, what's the smallest tests I can do to figure out whether people would likely care, actually be willing to pay money? Let's put an article out about it and see if anybody shows up for that."

Carl: Yeah, totally.

Michael: And after all that, we finally got around to launching a business. And the first version of that wasn't even the, you can white label and embed it in your CRM and all that, we do that now, that came years later. It's just, we made a flowchart so clients can figure out whether they should do a traditional or Roth contribution. And you could walk through the little flowchart diagram with the clients in a meeting so it would enrich a client conversation. It's what we launched with, half a dozen flowcharts like that, just that.

And when people showed up for that and a lot of advisors started buying, it was like, "Well, okay, then we'll roll out the white label option. And then we'll roll out the version that's embedded in the CRM." And we added all the pieces to it that came over literally a span of...it's almost 4 years now that Pathfinder has been in business.

But it was an incremental process. And even relative to where the business is today, that article that we wrote on the website to see if that would be a viable idea, I went and looked it up, that came out 10 years ago, it was published in 2013. And the business didn't even launch until 2018. So it took 5 years, from vetting the idea before it turned into a business. And that was probably a year or 2 of talking to people at conferences before it even got that far.

I think to me, it's like just...hopefully, it highlights this drags out a lot. It's messy, right? It was confusing for a long time, there was a lot of incremental ideas and iteration for a long time. It's not like, "Oh, I've got a brilliant idea for a thing." And the next day, it was launching a business. Very incremental steps, but all built around kind of that the version of the things that you'd articulated. I love the label you gave for it, increasing your surface area, putting yourself in a position, more ideas can whack into you, which to me is like talking to more people, reading more books, book books, no offense the internet and blogs, since I publish one, but book books.

When you've got confusion, keep going. Just keep powering into it. It means you're getting to the stuff that's murky enough that opportunity lies here. You've moved out of the obvious rules that if it was that good, everybody else would do it already, and you're into the ambiguity where new creation can occur. When you get 2 or 3 things that seem interesting, bring it to your trusted confidants who will give you hard feedback and call you on your BS. It doesn't mean they have to say it's a great idea, you can still power on, even if you're going to disagree with them and they don't get it and you want to launch your thing anyways. That's cool. They don't all have to agree, but if they push back and you persevere through that, it means you've really vetted the idea. You've come up with the answers, the objections, you figured through it.

And then what's the smallest way you can test it to see if anybody actually shows and cares and is willing to pay you money for it? If they do, you could always make it bigger and better in all the ways that you could dream out in your head later. But one of the biggest failures in entrepreneurship and just building new things is people that overbill the first thing and then they find out that the thing they made is something that only they care about and nobody else cares about, nobody else is willing to buy.

So, how quickly can you put something into the world to figure out whether any of your clients or any of your prospects care? If they show up and want it, go all in, now it's time to go all in.

Carl: And that last part, Michael, that's the second biggest mistake in entrepreneurship. The first biggest mistake is thinking you have to think it all the way through forever so you never actually show it to the world. Right? So I love that idea. If you're scared to launch the idea, make it smaller, make it a micro-action because micro-actions are micro-scary.

So, I think we're in the exact same lane. I remember talking to a friend that wanted to start a restaurant and I'm like, "Have you ever cooked for anyone before?" Like, "No, I'm trying to get a loan to open the deal. It's half a million dollars." I'm like, "What if you invited people over to your house for free, 8 people this month, and next month, you invited the same 8 people to invite other people for 20 bucks, would anybody pay for your food?" Right? "How small can we make it before you take out a half-a-million-dollar loan?"

Michael: I love that.

Carl: Right? Like, "How small can we make it? Can we run an ad?" I remember, Tim Ferriss was the one that introduced me to this, he used to run Google AdWords against the titles of his books. And they didn't even exist. It was just, when you clicked on it, it took you to a landing page. Right? But he was just how many clicks…

Michael: Oh, so he was thinking about publishing a book on blank, so he would buy Google AdWords on the thing before it was a book to see if people were searching for and would click on it. And if they did, they would get a page that says, "Someday I might write a book about this. Thanks for clicking."

Carl: Blank version 1, blank version 2, blank version 3. He'd run an A/B test against those. But that's a really small, super inexpensive test. Inviting 8 people over for dinner is a really small super...writing a single blog post about workflows, small test. Just the one thing I'd wanted to mention is, you can systemize this process. So, I now, for me, ideas go through a system. And I get a signal at each spot in the system. And you only see it publicly. And it's certainly only going to end up in one of my books if it made it all the way through that system. Right? And the system starts with the smallest micro-actions, which is "Behavior Gap Radio," my little subscription podcast, it's $9.97 a month, right? It used to be "The New York Times" was the...it's pretty nice to have "The New York Times" be the testing ground.

Michael: It's not bad. It's not bad.

Carl: It's not a bad place to sandbox an idea. But I would sandbox ideas there and if it made it through, and then we got feedback, then it would show up in my weekly letter. And my weekly letter is now a collection of the best of the best of the best stuff I've ever done. And then if we got feedback from the weekly letter, we made it better and it would show up in a book.

And so, I almost...I'm tempted in the next book I write, which I'm going to release another book in '23 I think, I almost want to have the subtitle, "Better Than 'The New York Times.'" I'm not going to. But right, it got tested there, got feedback. So you can think of it as just an idea funnel. You can sort of systemize that idea funnel in your own, "So I think I should do this in the business. Okay, first step, talk to 10 people. 10 people who might have that problem. Oh, cool. What did I learn? Oh, great. It refined to here. Okay, great. Let's go back to the same 10 people. That's the next step. All right, great. I'm going to write a blog post. Okay, great. We're getting finer and finer and finer." It turns out I'm going to hire somebody to build this whole division. But that's only after it's gone through this entire funnel like you described.

Sorry for making...for those of you who are not watching, I'm making giant funnel noises with my hands.

Michael: Yeah, Carl is no longer pantomiming air quotes, he's now pantomiming a funnel that starts wide and gets narrower.

Carl: Venn diagrams and some little writing things, I'm making all sorts of noises with my hands.

Michael: Awesome. Awesome. Well, thank you, Carl.

Carl: Yeah, super fun. Yeah. I'm excited to see the feedback on this.

Michael: Yeah. Thank you.