Entrepreneurship • Anthony Tumbiolo

Decision Making Entrepreneurship

Make Decisions Out of Abundance, Not Fear and Lack

Written by: Anthony Tumbiolo|January 29, 2019

Just a few years ago, I was sitting on one of those long tables that you often see in the movies. Lawyers on my side.

On the other side of the table? The other party in this deal. Big, bad, scary lawyers on his side too.

The stakes were higher than the Empire State. This deal could make-or-break Jakt’s future. And I had worked tremendously hard to bring it to where we were to just let it slip off my fingertips.

So, I put on my Superman cape and brought the deal home to everyone’s adoration. I was treated like a Rockstar for years. Forbes and Fortune Magazine fought for me to be in their covers…

Nah. Just playin’.

I was actually deadass scared. Nervous. Fearful.

And things were not going well. At all. It looked like keeping Jakt alive would cost me hundreds of thousands of dollars — an amount that I couldn’t afford to spend.

I knew that, if the deal didn’t work out, I’d have to start over. From scratch. Find new clients. New employees. New offices. And everything I had done would be for nothing.

But the thing is, the guys on the other side of the table knew that too. And they knew that I was afraid of having to go through that. Which is exactly why the deal was not working out for me — they had all the leverage.

But there was a moment that I got tired. Tired of being scared. Tired of thinking the world was going to end if this deal fell through.

So I pulled my lawyers apart and said — “You know what? Fuck it. I don’t care anymore. I’ll be fine either way.”

As we sat back on that infinite, wooden table, I remember realizing that something had changed. They didn’t have the leverage anymore. We did.

There was no fear in our eyes. And that scared them. Then I saw a glimpse of… alarm in theirs. The tables had turned.

In the end, we closed the deal. Because of it, Jakt not only remained profitable, but the following years were of extremely rapid growth. I still think of that day as one of my greatest W’s.

Breaking Off Fear’s Chains

This experience was a defining moment for me because it taught me one thing: never make decisions out of fear and lack.

That day, whoever was fearful and had a scarcity mindset would lose. And whoever was abundant in his thinking would win.

Have you ever wondered what fear **really** is?

I think fear is just being scared of the future or some future outcome. Which is funny since, well, none of us have crystal balls at home that let us predict what’s going to happen.

The problem with fear is that it often leads us to make “safe” decisions –which doesn’t necessarily mean they’re the best one.

In fact, they might not even be “safe” — they just feel it. Someone said to me that “underneath safety is fear,” and I couldn’t agree more. Be careful to not fall in this trap.

But Fear doesn’t come alone. He brings his brother: Lack. I think of lack as swimming in scarcity. Thinking that there are only “so many” chances, “so many” opportunities, “so many” clients, “so much” money you can make…

Admittedly, this is something I have personally struggled with too. Getting better at this is definitely one of my propositions for this year.

As you can imagine, lack and fear don’t help you make the best decisions.

But, at the same time, you cannot force yourself to not have any emotions. We’re all humans –not Terminators, and I don’t care how “tough” you say you are, we all have them.

It’s what you do with them that really matters. First, you need to accept that they’re a normal part of the human condition. They don’t make you weak. They make you human.

Then, you have to recognize them.

As a business owner, sometimes you’ll be fearful. Other times you’ll be nervous. And then you’ll be overconfident. And then you’ll panic. While I am much more calm now, the early years were a bit of the proverbial “emotional rollercoaster.”

Emotions have a purpose. They let you see how you’re feeling –how your body and mind are reacting to a specific circumstance. Process them. Use them as input. And earn from them. Don’t ride the rollercoaster along with emotions.

But never make decisions on an emotionally-charged state of mind. You can’t let them overtake your mental clarity. They’re there for a reason, but don’t let them dictate your choices at that moment.

How can you rewire that, and what’s the opposite of fear and lack?

The Power Of Abundance In Decision-Making

I was recently sharing the story from the beginning with a business friend of mine who is in a similar situation.

Like me, he is scared. Long story short, he was afraid of losing his biggest customer. They were pressuring him because they knew he needed them. And he was telling me that he felt like he had to do anything they asked for.

It was clear to me that he was coming from a place of lack. “They’re my biggest customers, I can’t go on without them” –he said.

As I said, emotions like these are normal. You can usually uncover valuable insights from them. Later on that call, we uncovered that the real issue was in his marketing/sales system: customer concentration, low prices, no pipeline of leads, etc.

How do I know this?

I’ve been in the same exact position.

At the same time, having an abundant mindset will give you a 180-degrees shift on how you negotiate, make decisions, and recognize situations.

If my friend approached this situation with the belief that, no matter what happens with this customer, he can always go and find 10 more –everything would change. He’d have the leverage. He’d be acting from abundance, and not reacting off fear.

Funnily enough, the Law of Attraction plays a major role here.

If you believe that you cannot find a client to save your life, well, you probably won’t. That’s how it works: you attract what you think about. So you really brought it upon yourself.

But if you walk in the room truly believing that you can figure shit out, you will. Attraction works both ways –so you choose which one you want to lean in.

Do Not Ever Make Decisions Out of Fear or Lack

Don’t make decisions based on fear or lack. You can’t predict the future, and “safety” is often just perceived. Emotions are normal and a learning experience –but never make a decision in an emotionally-charged state.
When negotiating, whoever has the most fear usually loses. If you want to gain leverage, make sure your decisions are not coming from a scarcity mindset.
Abundance is the opposite of fear and lack. When you believe that you can handle things either way –that you are resourceful and that you’ll be fine– your decision-making will improve. There’s plenty of great things out there for you. And you attract what you believe.

How Your Personal Finances Are Slowing Down Your Business’ Growth

Written by: Anthony Tumbiolo|January 8, 2019

I was recently talking with a friend who has a 9-5 job and also freelances on the side. To give you some context, his goal is to make enough money off the freelance work to cover his living expenses and, eventually, turn that into his full-time income –something that those of you with (or looking to start) a side-hustle or in the early stages of running a business might relate to.

We had previously discussed how important it was that he took control of his personal finances. He proudly told me he had been able to reduce his monthly expenses to only $2,500 –a long way from where he started. I congratulated him; he had done a great job and sacrifice. But I also challenged him to take one more step and get it to $2,000/month.

“Why? Isn’t this good enough?” he asked me. And don’t get me wrong, it is… but, that’s another $500 a month you can put in your pocket –that’s a whole extra month of runway after 4 months.

I then told him…

“You should NEVER have variable expenses”

When you are starting up, I’d argue that your focus needs to be on reducing your expenses as much as humanly possible.

You’ll then have an exact number that amounts to everything you need (not the same as want –more on that later), and you have to be sure that there is no imaginable way to go lower than that. That’s your expense baseline.

Your expense baseline has to be predictable –which means you can only have fixed expenses.

You need to personally forecast and budget: $X will go towards rent, $Y will go towards food, $Z will go towards gas, etc. There’s no place for variable expenses. You cannot drunkenly come back from the bar, pass out on the couch, and realize the next morning you spent $150.

[Sidenote: I’m obviously not accounting for out-of-the-norm incidents such as accidents, medical issues, natural causes, etc.]

Why am I so strict about this? Let’s go back to my friend for a second. His goal is to leave his job and work for himself –thus his income needs to cover his expenses. The lower his income, the faster this will happen, and the faster he will achieve his goal. Short term pain, but a much quicker path to his goal.

Having low expenses gives you freedom, and it lets you achieve your goals faster. But it does take self-discipline because, once you have a forecasted budget, it should not change –even if your income rises.

Throughout my first few months as a freelancer and then during Jakt’s very beginning, I knew exactly what was the minimum amount of money I needed to live –and I didn’t increase that for a long, long time. When I started making more of it, I didn’t run and spend it –I stockpiled it! Looking back, I should’ve hired more people earlier, but my living expenses didn’t change: I didn’t buy new clothes for almost three years, I didn’t move to a bigger apartment for a couple years, etc.

I just didn’t need it… which leads me to my next point.

Know the difference between “Wants” and “Needs”

Not all expenses are created equally.

People get very soft and permissive with themselves when it comes to what they need vs. what they want. Especially if you have just started running a business, you can’t be delusional:

You don’t “need” to go to SoulCycle –it’s $35/session. I used to go to a gym in NYC that cost me $20/month –less than one SoulCycle class. You don’t “need” that office, or that table, or that chair, etc. And, of course, there are things that you actually need like eating healthy. But, even then, you can find ways to eat healthy without dropping $40 for a meal.

Honestly, people’s relationship with money is one way I vet people that I could partner with through The Polpo Group. And I’ll tell you why:

Because it shows what’s really important to you –either your business (and the freedom that comes with it) or materialistic shit you don’t need. If you’re not willing to sacrifice yourself, this is probably not going to work out so well for either of us.

And if you don’t want it bad enough, that’s perfectly fine –but you have to be honest with yourself. It doesn’t really matter how many time you post #hustle on Twitter. You “kinda” want it –or you might have glorified the idea of calling yourself an entrepreneur–, but you’d rather go party at night. You still might get where you want to be, but it will definitely take longer.

It all comes down to priorities and knowing what you want. There’s no right or wrong answer –I’m just telling you what I believe is the fastest path to achieve the goal of having a business you can do full-time and get the freedom you desire.

It’s important to be self-aware enough to know your priorities but, once those are established, it’s time to make a plan, stick to it, and be laser-focused on executing it. To do that, however, you’ll have to get used to…

Telling people “no”

You can’t imagine how many times I had to do it:

“Anthony, do you want to go out to eat? Nope, I don’t have money” (even when I started making some money, my answer was still this –stockpiling, remember?).

“Anthony, do you want to go for drinks tonight? Nope, we can hang out, but I can’t buy drinks.

I said no to everything because I was extremely focused on growing and scaling Jakt. That was my one and only priority, and every step I took had to get me a bit closer to that. And, if it didn’t, I didn’t take it. It was that simple. Everyone looked at me like I was crazy, but I really didn’t give a damn. I was living month to month, barely scraping by…

But, honestly, I was so happy doing it. If I let my expenses bloat, I wouldn’t have been able to pay my rent, etc, and I probably would’ve had to end up on a 9-5 job I hated. To me, the freedom of having my business money cover my expenses (and staying away from corporate) was very much worth it.

I chose myself and what made me happy. If I had listened to what my friends or my parents said, I would’ve taken a job at a bank. Instead, I didn’t talk to my family for a couple of years (long story, I’ll cover it another time). I just knew that I had to follow my own path or I’d be terribly miserable —and I accepted the consequences.

Again, this is not for everyone, and you should do what makes you happy, but that’s what it takes to quickly build a business from a personal finance standpoint.

If you want to go full-time on your business as fast as possible

Make your expenses fixable and predictable –and reduce them to the bare minimum. Keep them there for as long as you can.
There’s a difference between wanting something and needing something. But you already knew that. You just have to be honest with yourself.
Budgeting means prioritizing and saying no to things. Ask yourself if that’s what you want and, if it is, go all in.

How Do Entrepreneurs Think?

Written by: Anthony Tumbiolo|December 24, 2018

If you’ve ever wondered, how do entrepreneurs think? Here’s an inside look into how my brain works.

I was recently in Miami and stopped by an ice cream shop with my girlfriend. They have this really cool nitrogen ice cream that I wanted to try. I, of course, got Nutella mixed into mine.

We sat down shortly after getting our ice cream. Everything was perfect: the conversation, the weather, the ice cream.. but, after a minute, my mind started fading away.

Here we go again.

This is the actual place in Miami (no, I’m not just making this story up)

I start doing the math behind the numbers…

I can’t turn it off. And, to be honest, I don’t really want to either.

It’s a fun game I play with myself in every store, shop, or business I walk into or come across.

I start doing all the math behind the ice cream shop’s numbers to try and guess how much profit (or loss) they are making.

I first look at the price of my ice cream, check the prices on the board, and try to estimate an average order value per customer. How much money will each customer spend?

I then watch the shop and see how many people flow in while I’m there. Is the foot traffic high or low? Is the store empty or packed with customers ready to buy?

Based on that, I try to guess how many people per hour come. I try to account for the time of day: is this a busy hour, will other hours be similar, etc. — and then guess an average number per hour throughout the day. Coffee shops, for example, make a big share of their daily revenue during early-morning rush-hour, but those numbers don’t stay consistent throughout the day.

After calculating the daily average, I then try to guess if this day as a whole is common or if it’s above average. Since we came on Friday and I’m guessing that’s busier than, say, Tuesdays, I need to reduce the daily average to account for this.

I multiply that by the average order value estimate that I figured out before to get a revenue per day. That’s how much they make every single day on average. I then multiply that by 30 to get a monthly revenue total.

Next step on the list is to understand the business’ expenses and costs. I go through the same exercise as above, calculating how much they spend every month on things such as rent, utilities, insurance, employees’ wages, supplies, ice cream, etc.

I then take revenue and subtract the expenses –and get a monthly profit (or loss), and extrapolate that for the year.

You’d think we’d be done by now, but this is where it gets even more interesting:

If it’s positive, my mind quickly races to the startup costs of opening a similar business: equipment, machinery…

I then calculate how long until my initial investment would be paid back. Are we talking about six months, three years, or fifteen years?

If the numbers look good, my next thought is:

Should I open an ice cream shop?

I obviously don’t go ahead and open a store every time I go through this drill. And it’s clearly not a perfect science. There are, of course, many things I could have estimated inaccurately or that I could be forgetting. And there are things that there is just no way for me to know: maybe they inherited the place and they don’t pay rent, for example.

From running a multi-million dollar company myself I know how there are many details you need to uncover. But I find this game gives me a chance to exercise my business muscles and apply it to a different type of business. It stretches my thinking and works out my critical thinking skills.

And this is what happens every time I walk into a store or online business I find interesting.

For whatever reason, this is what goes through my head. It’s a game: will this store or business still be running in six months, or will this be another entrepreneurial victim?

I don’t just do this when I’m getting ice cream though. I do this for other businesses I come across that intrigues me all the time: SaaS companies, agencies, ice cream shops, it doesn’t matter.

This has been my mindset since I was fifteen and sold designer bags on eBay. Back then, I would be on a constant hunting state –always looking for a new product that I could profit off. It’s still the same way, but I do have now over a decade of experience in business.

And the truth is, it’s not even about making money (at least not anymore). It’s just fun. It keeps me sharp, and it excites me. It’s also good practice for when I open new business through the years or invest in other companies through The Polpo Group.

It gets me thinking about different things and situations my business would never encounter. It’s my personal sudoku. And I love it.

Many people ask me if entrepreneurship is a healthy discipline.

I don’t shy away from the fact that this “thrill of the hunt” has a certain obsessive tendency to it. I get where they are coming from. With the rise of social media, we now have a first-row seat to the number of hours most entrepreneurs, CEOs and business owners put in their companies (fake Instagram #hustle wanna-be’s aside).

I have been there too. Entrepreneurship is an emotional rollercoaster, and it can get to you if you let it. There have been periods in my life of heavy drinking, deep depression, and forceful anxiety. I am only now starting to understand that actions are just that, actions. They are neither good or bad, but it’s the meaning we assign to them that can get the best out of us and trigger unhealthy behavior. It’s our job to find ways to reduce its emotional effects and learn how to always remain in control of our reaction. So, hopefully this gave you a snipit of answering the question, how do entrepreneurs think?