The One Question That Multiples Any Business Outcome

Putting Your Lazy Money To Work

As a general rule of thumb, we hold 3 months of runway across our businesses.

That's a lot of cash sitting around doing nothing.

And until recently, i.e. our 0% interest rate environment meant there was little we could do about it. But now that governments are pushing up interest rates to combat inflation, we can.

Banks, credit unions and wealth management platforms like Kernel are offering up to ~5% returns on cash savings accounts.

Moving our runway into one of these accounts with a provider like Kernel allows us to earn a more than-nothing return on that money for the first time in many years.

Until, of course, opportunity or disaster knocks.

Notes:

We're not talking game-changing money here, but it all adds up.

Across our businesses, shifting dormant cash into these high-return savings accounts will put another $5,000 - $10,000 into our coffers each year that we otherwise wouldn't have had.

You can use websites like interest.co.nz to see what's available, then dig further into the terms on attractive provides.

Points to look out for are withdrawal terms, i.e. how many days' notice you need to give before withdrawing your money.

Minimum deposit amounts - some will require at least $10,000

And fees. Fees very quickly eat into your returns, and some banks are super clever about how they sneak these in, like establishment fees, admin fees and so on.

Inflection Points

Not long after the first lot of Covid lockdowns, something strange happened at our gym.

It should have been a terrible time to run a business. Sure, we had to cut hours, not take a wage, get business loans and all that rigmarole.

But all of a sudden, we weren't pushing that boulder uphill anymore; we were chasing it down.

Until then, it had taken us ~3.5 years to grow our gym from 200 to 360 members.

Over the next ~18 months, we grew to 600 members.

Lenny (Former product manager at Airbnb) of Lenny's Newsletter calls this a growth inflection point.

Framework: An inflection point is an event that results in a significant change, either negatively or positively in the progress of a company.

Inspired by a reader's question (that we've asked ourselves in many moments of self-doubt) - "My product is growing, but slowly. I'm wondering if growth will ever take off. What have you found most often precedes an inflection in growth?"

He had this to say.

There are three main reasons:

• The majority of growth inflections spring from a product improvement.

• A surprising number of growth inflections came from an unexpected external event without the product changing at all.

• Many of the most durable inflections came from the company leaning into their primary growth engine (e.g. SEO, virality)

Our Take:

Reflecting on what happened at World, we got lucky and got a little rub from all those causes.

Our landlord gave us permission to operate 24/7, and even though barely anyone trains past regular hours, prospective members valued that flexibility.

Our closest competing gym closed due to a hospital rebuild, while another lost access to their car parks.

And after tons of rejigging, we finally created something resembling a functioning sales funnel.

External events are outside our control, but the other two are within it.

While it's never going to be obvious which product improvement or sales tweak will cause an inflection point, constant improvement is what gets you there.

How To Multiply Any Outcome In Your Business

"Give me a lever long enough and a place to stand, and I will move the earth." ~ Archimedes.

Every result we achieve can be achieved in many different ways.

It's like travelling; we can walk, run, drive, fly, hitch a ride, or mix a million combinations of those options to reach our destination.

However, when operating a business, due to our limited resources, it makes sense for us to always be looking for the best combination of those options to reach our destination.

This often means employing leverage and looking for a healthy balance between maximal results and minimum effort.

Heuristic: Leverage is the ability to influence a system or environment, in a way that multiplies your efforts.

Take this scenario at Rugby Bricks, for example.

We want to grow our Instagram audience, so we could:

1. Run a giveaway on Instagram (Tag a friend and win x).

2. Run a giveaway with another brand on Instagram (Tag a friend and win x).

3. Run a giveaway with another brand on Instagram (Tag a friend and win x) + Share our pixel data with each other to run remarketing ads after the giveaway has ended.

4. Collaborate on a product with another brand + all of the above.

We chose option two because it only requires a little more effort and resources than option one but enjoys far greater leverage and impact.

Take-Away:

When planning your next activity, ask yourself this;

"If I tackle this activity, what can I do to multiply my outcome with the least effort?"

You'll be surprised how much extra yield this small thought can return.