The Smith Sense Podcast gives listeners insider access into the real-life struggles, ideas, and strategies of successful entrepreneurs and business leaders.
Whether you’re building a business, a team, or a way of life... Smith Sense includes you in the real-life conversations that the leadership and self-help books and blogs never address. This is the story of what really works, told from the trenches from actual business leaders struggling with your same challenges every day.
When A Founder Should Step Aside
As Matt closes the door on his CEO days with Royalty Exchange and moves into a Chairman position, he speaks with Antony about when is it the right time to step aside and let someone else take the controls.
Digital Nomads, Independent Thinking, and Why Bobby Casey is Optimistic
Matt chats with Bobby Casey from Global Wealth Protection about digital nomads, working from home and independent thinking
Distribution is King
This week Antony and I discuss a topic that’s too often overlooked by entrepreneurs: distribution. Whether you’re selling beef jerky or digital services, getting your product in front of your customers at the time when they need it most can mean the difference between success and failure. Companies that focus too much on their product and brand (or owning a specific distribution channel) leave themselves open to disruption from newcomers.
1:25 - Distribution trumps product utility and brand.
“Incumbents get beaten by upstarts when the upstarts discover new ways to distribute their product or service.”
3:21 - Distribution defined.
“It’s that intersecting moment when your customer is likely to consider you because it fits within the context of what they're doing in their normal day.”
5:12 - The principles of distribution apply the same in a physical or digital world.
“The limited attention and time that people have is true in a retail environment, and it’s true in a virtual environment, too. What you are able to see when you’re going through the physical aisle is not unlike Netflix screen. You can only see so much on it at a time. The catalog is enormous, but your choice set is very limited because human attention is not that broad.”
8:00 - How upstarts succeed with distribution.
“Where you see upstarts take market share away from other companies is, as these new methods of distribution emerge, if they are early to adopt them, if they take it advantage with them first, if they are more nimble, then they can find a way to get market share where basically it didn’t exist before.”
12:30 - How an upstart YouTuber beat a true expert who was at it much longer.
13:40 - Playbooks for getting great distribution,
“In order to experience business growth, what you should do is focus on where your product could be distributed: How do you shape your business, your product or your marketing in such a way that you can increase the distribution? And by doing that, by changing the distribution, you can double the growth of your business in a way that you wouldn’t be able to do organically by focusing on just trying to dial in better the one distribution strategy you have.”
16:00 - Looking outside your existing channels
“Most of the time people are only aware of competitors that exist in the channel they already are in. Looking outside of that channel for new distribution is the key.”
18:00 - Why Apple went into retail.
“When Apple decided to open retail stores it was looked at by everybody — from Wall Street analysts to their customer base to retail partners — as a stupid mistake. And yet it turned out that, over a period of time, they were the most profitable per square foot retail in America.”
20:00 - Total control vs. no control.
“Any ideology that says ‘I don’t need to have an owner control platform’ is wrong. And any ideology that says ‘I have to have everything on my platform so that I have total control’ is also wrong.”
23:20 - Take vs protect.
28:30 - How a baby bathtub business that Matt invested in grew distribution, and what it did next.
30:00 - Your list is the most important thing.
“In marketing, I always think of it as the list is most important, then the offer is second, and the copy is third. Without the list, none of the other stuff even matters.”
The economic fallout from COVID-19 is highlighting one challenge that entrepreneurs face all time: regulation stifles innovation.
You don’t have to look farther than the recipient list of Paycheck Protection Program (PPP) loan program to see how even well intentioned regulations — in this case, to protect small businesses from collapsing — end up serving entrenched interests far more than the people they purport to help. Among the list are Kanye West, Grover Norquist’s Americans for Tax Reform Foundation, perhaps most galling, the Ayn Rand Institute.
Especially in a crisis, people look to regulations as the solution. But added regulation almost never helps the entrepreneur just starting out who wants to build a better economic future for their family. Instead, it favors the entrenched interests who can afford to lobby government officials.
Most often the solution is not additive. Rather, it’s what Nassim Taleb calls via negativa — it’s removing something often actually makes things more possible rather than adding another benefit to people.
I couldn’t schedule a dentist appointment for a period of time here in Colorado, but I could go to the pot shop. That’s the result of lobbying power. That regulation is not protecting my health as much as it’s protecting the entrenched interests of the pot industry.
We bailed out the airlines, and in exchange they agreed to keep all employees on until the end of September, at which point they’ll lay them off. So we essentially took Americans’ money and set it on fire by filtering the dollars through the airlines.
Theoretically it helps employees, but only a little bit and for a little period of time. In reality it helps the CEOs who’ve made terrible decisions for a decade.
Three Felonies a Day, by Harvey Silverglate
Covid-19, Fedcoin, and the Future of Western Civilization
My good friend and mentor Doug Casey joins me on the podcast again to discuss world events, politics, U.S. monetary policy, and why Fedcoin isn’t as far-fetched of an idea as it sounds. We pick up on topics we discussed in our first conversation, “The Money System - An interview with Doug Casey.”
Doug is known for outlandish opinions, but the situation we find ourselves in now is something that he’s talked about for a long time. While we’re experiencing this turmoil here in the U.S., he’s watching it unfold from his ranch in Uruguay.
Doug: I feel rather smug watching the collapse of the U.S. comfortably on my widescreen as opposed to uncomfortably out my front window. Over the next six months I expect I can turn the audio off and put on Rolling Stones’s “Street Fighting Man.”
1984 meets Brave New World
We essentially have two major issues coming together: the decline of Western civilization and its Enlightenment values and the rise of a police state.
Doug: It’s not quite Orwell’s 1984 and it’s not quite Huxley’s Brave New World, but it takes some of the worst elements of both of them.
The problem is there’s not much anybody as an individual can do at this point. You can try to leave to avoid suffering the unpleasantness and inconvenience — but where can you go? All the countries in the world are going in the wrong direction.
In my upcoming third novel, Assassin, our hero, Charles Knight, becomes an assassin to eliminate malicious government officials. So that’s one route. It’s a good thing I’m saying this in a novel; otherwise the men in black would be knocking on my door.
Stoking racial divides
When George Floyd was killed, it was the most unified in opinion I have seen America since 9/11. Everyone thought that cop was a piece of [expletive] who needed to be in handcuffs. Everyone thought he should’ve got the perp walk.
A moment when there’s literal total agreement somehow gets turned into the most divisive issue of my lifetime overnight. How does that happen?
Doug: The pot was boiling. This was just the catalyst that made it all blow up. It’s been coming for some time. As bad as things are right now, things are still kind of held together because the stock market and bond markets are basically at all-time highs. When they melt down and the banks are in trouble and there’s another wave of unemployment, who can say what’s going to happen?
Too many elites
Russian-American scientist and writer Peter Turchin studies how societies grow and evolve over time. He’s getting some renewed attention now because in his 2017 book, The Ages of Discord, he warned that things would get worse by 2020. His underlying thesis is that there’s a overpopulation of elites in the U.S. and trouble happens when they start fighting each other, which is happening now.
Doug: My friend Jim Rogers said that at some point in the future, the guys driving the Lamborghini’s are going to be the guys driving trackers in the middle of cornfields, because commodities are going to go up. There’s lots of good arguments for buying farmland. At the same time, there’s lots of good arguments for continuing to stay away from them because the longest bear market in all of history is commodities.
The monetary system seems set for a reset, something that’s happened a lot in the past. The U.S. dollar as the global reserve currency carries all kinds of implications. Add the fact that, like most countries, we have a huge amount of debt that is unpayable. Americans tend to believe that if something isn’t working right — whether it be education or healthcare — the problem is we’re not allocating enough capital.
In an environment where we have all these factors going on, it’s hard to imagine it’s not set for a monetary reset where things fundamentally change.
The rise of Fedcoin?
One idea Doug floated a few years ago was the launching of a Federal Reserve cryptocur
On this week’s episode of the podcast my friend and colleague Antony Bruno joins me to discuss a fascinating academic research paper that concludes the cottage industry around entrepreneurship is failing us. The paper articulates many of the fears I have about mistakes entrepreneurs might be making in their journeys.
The rise of the Veblenian entrepreneur
The paper, “Towards an Untrepreneurial Economy?,” starts with an intriguing question: “What is driving the declining quality of innovation-driven entrepreneurship?”
The authors point to the rise of the “Veblenian entrepreneur” — or “performative entrepreneur” as we call it on the show — as the main culprit. These are want-to-be-entrepreneurs who are in it for the wrong reasons; they pursue it as “conspicuous consumption.” They aren’t innovating as much as pursuing a lifestyle and the status that society bestows on entrepreneurs.
The result, according to the papers authors, is essentially where we are today: “an economy which superficially appears innovation-driven and dynamic, but is actually rife with inefficiencies and unable to generate economically meaningful growth through innovation.”
The theory of the leisure class
The term is named after Thorstein Bunde Veblen, a 19th century American economist and sociologist and outspoken critic of capitalism who coined the concept of conspicuous consumption and conspicuous leisure in his 1899 book The Theory of the Leisure Class.
Veblen writes that the businessmen apply themselves in useless activities that contribute neither to the economy nor to the production of useful goods and services required for the functioning of society, while the middle and working classes apply themselves in productive occupations that support society.
Cottage industry that’s failing us
The rise of the leisure class spurned a cottage industry around selling service to want-to-be entrepreneurs that grew to $13 billion in 2014 and has been growing at a steady clip, 12% a year, for decades.
It’s a cottage industry that I’ve participated in — offering entrepreneurs coaching, courses, and camps to improve their skills — and I’ve seen first-hand how much people buy into it.
The research paper’s authors conclude that some innovative entrepreneurs do get value from these services — but the majority of people do not and, in fact, perform worse than if they’d chosen a different path.
Ideology of entrepreneurship
The paper’s authors argue — and I agree — there’s an ideology of entrepreneurship that’s conveyed to people from “thought leaders” (who are often failed entrepreneurs themselves) proclaiming things like “live your best life!” and “failure is good.”
In this culture failure is a badge of honor. Everyone’s heard that 90% of ventures fail, and somehow that helps motivate more people to try. But if you stop to think about it, if 90% of entrepreneur ventures end in ruin — a failure that you don’t come back from — that is not something to celebrate.
The problem with Gary V
Gary Vaynerchuk is the epitome of this performative culture. Don’t get me wrong. He’s an impressive guy in many ways. However, the impression people walk away with is that they need to be grinding all the time like Gary V and that will somehow make them a successful entrepreneur, or at least give them the appearance of one — which is really the point anyway.
This is what we like to call “hustle porn,” and there’s a lot of it out there. People watch how Gary V acts and them mimic that behavior. That’s Veblenian entrepreneurship.
Partially because of the entrepreneurial industry’s success selling the dream and partially because of poor job prospects, people choose the entrepreneurship route to increase their status within their community.
If your job prospects are Starbuck barista or “business owner,” it’s not hard to see which you’d pick if
Entrepreneurs are artists!
Business isn’t just about having a good product or plan. To be an entrepreneur you are battling forces to create something in this world.
Smith talks about unique insights he’s gained through time that have lead to shifts in his thinking. This will challenge your perspective and approach as a leader.
What you hear here can apply not just to your work but how we can all operate in the world. It’s honest, relatable, valuable knowledge that he’s sharing. I look forward to the truth bombs Matt will be teaching in the future.
Listen to one episode and you'll be hooked
Matt is one of the smartest entrepreneurs and greatest thinkers I've ever had the pleasure to meet. He has a unique talent for seeing new perspectives and opportunties that otherwise would be missed. I binged listen to the first few episodes and left with new ideas and actionable stategies I can use to apply to my businesses. Listen to one episode and you'll be hooked.