Welcome back to the 51,898 investopreneurs joining us for today’s issue.

Before jumping into today’s issue —

We have to kick things off with an apology. Last week was the first time we had missed a drop date in TWO HUNDRED and EIGHTY THREE (#283 issues).

In full transparency, we’ve been conflicted & have been flip-flopping back and forth between a few different visions for the future.

As many of you know, based on your collective feedback, we made a big shift from being a daily newsletter to a weekly cadence this past January. Overall, we have not seen a significant change in the data (open rates, interaction, etc.) — however — our team has felt a void develop in the sense of community engagement we had built.

You are all awesome for making our newsletter a small part of your life & the conversations and relationships we’ve been able to develop from running this newsletter have perhaps been the singular most rewarding part for us. Thank you.

That being said, with our shift to a weekly newsletter we’ve noticed a pretty serious downturn in the daily interaction that we had come to enjoy with our readers.

In thinking about solving this, our team has been teasing out the idea of launching a community where we can take the structures & strategies we share in our newsletters and carry them forward to share and learn from one another’s progress as we build simple, profitable businesses.

With that idea in mind, last week we didn’t send the newsletter because we were internally conflicted with how and when we’d introduce this idea. What we’ve settled on is to just continue with what we’ve done from the very beginning and let you, our readers, decide.

Please let us know your vote!

Getting Started On Your Transformation 

Structure 

Structure is the contained ways in which you convert capital resources into outcomes. Capital resources can be intellectual capital, time capital, human capital, and financial capital. You can think of the structure of your business like a machine, or factory. X amounts of inputs go in and after Y amount of actions then Z amount of outcomes come out. 

You need structure in place for how you allocate each type of capital resource. 

North Star Framework – so you always know which direction to lead your business and cover the intellectual capital, human capital, financial capital, and time capital components of your business. 

• Identifying your why

• Master your financials 

• Designing your VPMOSA

Then you want to install an operating system in your business that gives it the structure to contain the strategies that you will execute to pursue to convert your capital resources into outcomes to achieve your North Star. 

When installing your operating system, you are trying to simplify the steps necessary to convert a raw input into a desired output for your business and then organize the components of those inputs in a way that makes it as efficient and effective as possible to allocate resources to the conversion process. 

Strategies 

Strategy = Focus

The strategies are focused on actionable outcomes that make your structures (or business system) better by either removing constraints on your business or adding to the structure to contain more growth. They can be broken down into two focus points, brand equity or operational equity. 

When identifying where the focus needs to be, we want to systematically work through a framework of: 

• More

• Better 

• New

More is removing constraints on your existing business system with the goal of supporting more of what already works. 

Better is optimizing, or changing, your business system with the goal of improving upon what already works to make it more efficient and/or effective. 

New is adding new components to your business system to grow the scope of your structures. 

Accountability

Accountability = efficient and effective resource allocation via good, timely decision-making and execution.

To hold ourselves accountable, the strategies that you choose to execute are done so in a systematic way leveraging an experiment-based framework. We call these ‘Simple Bets’ because winning a lot of them over time adds-up, but any single loss doesn’t break the bank. 

Goal: what you want to achieve 

Hypothesis: what you believe the outcome will be

Time bound: finite amount of time to achieve the outcome

Resource bound: finite amount of resources to allocate to the experiment to achieve the result

KPI bound: finite key performance indicators to track the progress and outcomes of the experiment

Retrospective: review / learn / decide 

When picking your experiments, we will rank and retrieve based on the following parameters to make a good, timely decision: 

1. Impact on your business cash flow 

2. Impact on your business valuation

3. More and then better and then new 

Continual optimization to outcomes

Once you have the structure of your business in place, all you need to do is continually run experiments of different strategies to perpetually improve your cash flow + business valuation following a more/better/new process while pursuing your North Star Framework.

More = remove constraints on what’s working

Better = changing what’s working with the goal of making it more efficient and/or effective

New = adding on top of what is already working