Brad Poulos

Don’t Follow Your Passion — Follow Your Talent Instead

Brad Poulos — Sat, 15 Nov 2025 14:00:52 +0000

When I was a kid, I didn’t really have any passions perhaps beyond hockey, and while I dreamed of it, I was never delusional enough to think I’d make the NHL. I didn’t have a single burning interest that guided my choices. I wasn’t a born doctor or dream chef. I stumbled into work the way most people do: by accident.

I started in the jewellery business as an extension of my part-time job in high school, got bored around age 22, and then went to tech school for the sole reason that my brother was already enrolled, and it seemed like an ok idea to move to Toronto and do that. There was no grand plan. No following of passion. My first job was equally opportunistic and lacking in any strategic justification.

And that’s precisely the point. We’ve been sold a fantasy that career success starts with passion. Find what you love, and the money will follow. I mean, can these people be wrong?

"Follow your passion. Do what you love, and the money will follow. Most people don't believe it, but it's true."

Oprah Winfrey

"In the world of business, the people who are most successful are those who are doing what they love."

Warren Buffett

"Don't aim for success if you want it; just do what you love and believe in, and it will come naturally."

David Frost (British TV personality)

What they don’t mention is that only 2% of professional actors make a living from their craft without supplementary employment. Chasing success by following your passion is more likely to spoil it, turning it into a thing you do for (little) money, but no longer love.

The Great Passion Lie

“Follow your passion” is the feel-good lie of modern work culture. It sounds empowering, but as Scott Galloway says, it’s “advice from the already rich.”

The people telling you to follow your passion often made their fortune in unglamorous fields, then they turn around and tell others to chase their bliss. The irony is that most people, like yours truly at age 20+, can’t identify a single passion to follow. Research conducted in 2008 by Stanford psychologist William Damon found that only 20% of people under 26 can articulate one.

Even when people do have a passion, it’s usually something creative, such as acting, music, or design. These fields are brutally competitive and financially unforgiving.

Follow Your Talent, and Passion Will Follow

Talent is observable and testable. You can measure progress, earn feedback, and build momentum. When you get good at something, recognition and rewards follow, and you’re very likely to gain passion as a result of your success.

Very few people dream of being a high-value software salesperson, or the VP of Operations at an energy company, but when you get to the top of these domains, life is actually very good, fueling the passion in a positive feedback loop.

As Galloway says, “Mastery begets passion. Success creates enthusiasm. Economic security multiplies options.”

Mark Cuban Agrees

Cuban puts it bluntly, “No. Follow your effort. No one quits anything they’re good at. If I followed my passion, I’d still be trying to play professional basketball.” Cuban’s point is that passion follows excellence. When you invest consistent effort in something you do well, the resulting success and mastery ignite passion.

Cal Newport, author of So Good They Can’t Ignore You, backs this up with research. He found no evidence that matching your job to a pre-existing passion makes people happier or more successful. What actually leads to satisfaction at work are three factors:

Autonomy: Control over what you do and when
Mastery: The pursuit of excellence
Relationships: Working with people you respect

Notice that none of these depend on starting with passion. In fact, I’ve got a whole post on what makes for satisfied employees.

The Contrarian Nuance

Not everyone dismisses passion entirely. Some argue we’ve misunderstood it. The word comes from the Latin pati, meaning to suffer. Real passion isn’t just enthusiasm. It’s what you’re willing to endure hardship for. That kind of passion emerges from deep commitment, not from chasing excitement. Like what it takes to become a virtuoso or an elite athlete.
And for some, passion doesn’t have to come from their career at all. Your work might fund your passion. You don’t have to love the business if it gives you the life you love.

Passion Is Dangerous for Entrepreneurs

For entrepreneurs, passion can be blinding. It gives false confidence and leads people to ignore fundamentals like margins, market demand, and scale.

If you love coffee, that doesn’t mean you should open a café. If you’re obsessed with fashion, that doesn’t mean a boutique is the right move. The graveyard of failed startups is littered with people who loved their idea more than their customers did. I read this 30 years ago in The E-Myth by Michael Gerber. Passion will cause you to think more about working in the business than on the business.

Instead of asking, “What am I passionate about?” ask:

What am I good at that others value?
Where can I achieve mastery faster than competitors?
What problems can I solve profitably and repeatedly?

That’s where sustainable businesses live—in the overlap of skill, value, and demand.

A Better Way to Think About Passion

Here’s the paradox: passion does matter, but as a result, not a starting point. Once you achieve competence and confidence in a particular area, the work itself becomes rewarding. Passion is what mastery feels like on the inside.

In my own career, I’ve experienced seasons of boredom and burnout, but also flashes of deep engagement that only came after I became proficient in something. Teaching, consulting, and writing all grew out of skills I built first. The passion came later, as a byproduct of mastery.

Passion is a reward

“Follow your passion” sounds romantic, but it’s hollow. It lets you feel purposeful without making the hard choices. The people who build meaningful, prosperous careers do it by following talent, effort, and opportunity.

Get so good they can’t ignore you. Passion will show up right about the time the invoices start getting paid.

If you liked this, you might like this related post about trusting your gut in business.

The post Don’t Follow Your Passion — Follow Your Talent Instead appeared first on Brad Poulos.

Then vs. Now: How Entrepreneurship Has Changed… Almost Entirely for the Better

Brad Poulos — Tue, 11 Nov 2025 14:00:13 +0000

In 1995, I pitched our board of directors for $2 million to launch a business called DirecPC. I had done a bit of business plan work, sketched out our startup costs, and sized the working capital we’d need. I guess for the time, it was a solid enough pitch.

We needed $1 million in capital and $1 million for working capital and marketing. That was it. I had a revenue forecast but had talked to exactly zero potential customers.

They knew that, and they were okay with it. In fact, they approved the investment on the spot.

This was Bell Canada’s board. Smart people. But this was a different era of entrepreneurship. We hadn’t gone lean yet. Most startups back then were built like that: plan-first, customer-later. Things have changed—and almost entirely for the better.

Why That Would Never Fly Today

Back then:

Capital was scarce and slow-moving.
Market research was expensive.
Business plans and boardroom pitches were the norm.
We would practice what seemed like responsible planning and do as we were taught in biz school: Ready. Aim. Fire.

The default strategy was:
Idea → raise money → build the thing → launch.

Today, it’s the opposite. Now its Ready. Fire. Aim!

Entrepreneurs are expected to validate their ideas before building, to start small, to engage with customers early, and to build iteratively. It’s not just cheaper. It’s smarter. In fact, once I started learning about lean startup 15-20 years ago, I felt kinda dumb for not having come up with the concept myself, and for being responsible for so much “bad” entrepreneurship.

Best Practices In Entrepreneurship in 2025

Here are four ideas that have contributed to the way the game has changed.

1. Effectuation – Start With What You’ve Got

Instead of starting with a fixed goal and figuring out how to get there, effectual entrepreneurs start with what they have (skills, knowledge, connections), and let outcomes emerge from action.

Ask: “Given who I am, what I know, what I have and who I know, what can I do?”
This mindset, the brainchild of Darden Prof. Saras Sarasvathy, is practical, adaptive, and resource-conscious.

Example: Sara Blakely started Spanx with $5,000 in savings, no fashion industry experience, and one key insight from her own frustration with pantyhose. She didn’t try to become a fashion mogul. She used what she had—a sales background, an understanding of women’s clothing frustrations, and sheer persistence—to cold-call hosiery mills and pitch buyers at Neiman Marcus herself. The business emerged from what was available to her, not from a grand plan.

This mindset is powerful because it removes the “I need X before I can start” barrier. You don’t need venture capital, industry credentials, or perfect conditions. You need to start with what’s in front of you.
You can get more a more detailed explanation along with resources and case studies here.

2. Bricolage – Build With What’s Lying Around

Think of bricolage as entrepreneurial MacGyver-ing. You improvise using whatever resources are on hand. You don’t wait for perfect conditions. You repurpose, recombine, and reframe. It’s a close cousin of effectuation.

Perfect is expensive. Bricolage is fast, cheap, and often good enough to get started.

Example: Airbnb’s founders couldn’t afford rent for their San Francisco apartment. They bought air mattresses, set up a basic website in a weekend, and rented floor space to conference attendees.

They didn’t wait to build a hospitality empire. they used three air mattresses and a domain name.

The “bed and breakfast” part came from offering Pop-Tarts for breakfast. That scrappy MVP eventually became a $100 billion company.

For many modern founders, this is how the first version of the business comes to life. You use free tools, borrow equipment, trade services, test on friends. You make it work with what you’ve got.

3. Lean Startup – Validate Before You Build

Popularized by Eric Ries, Lean Startup thinking introduced a simple but transformative idea: test before you invest.

The concepts of a Build → Measure → Learn loop, the Minimum Viable Product (MVP) and “customer discovery” all have their roots in the Lean Startup. Now we get real feedback from real users before making large commitments.

Example: Dropbox didn’t build their entire cloud storage infrastructure before knowing if anyone wanted it. Drew Houston created a 3-minute demo video showing how the product would work and posted it to Hacker News. Overnight, their beta waiting list went from 5,000 to 75,000 people. He validated massive demand with a video before writing most of the code.

You don’t build something massive and hope it works. Lean forces you to make small bets, learn quickly, and adjust as needed.

Each iteration should answer a specific question: Will people pay for this? Do they use this feature? What’s the biggest friction point?

Sadly, it’s still not widely understood. I have watched those close to me make the mistake of building a solution without a problem three times since I started teaching lean startup.

4. Blue Ocean Strategy – Compete by Not Competing

Instead of fighting over scraps in a crowded market (“red oceans”), create entirely new market space (“blue oceans”) by delivering new value in unexpected ways.

Example: Cirque du Soleil faced a declining circus industry—kids preferred video games, animal rights activists protested animal acts, and star performers commanded huge salaries. Instead of competing harder in the traditional circus space, they eliminated the animals, reduced the tent/spectacle costs, added theatrical storylines and artistic choreography, and targeted corporate clients and adults willing to pay premium ticket prices. They started playing an entirely different game than Ringling Brothers.

The key is making the competition irrelevant by changing what game you’re playing. Other examples are Yellow Tail who made wine approachable for non-wine drinkers and Curves who reinvented gyms specifically for women who were intimidated by traditional alternatives.

What Founders Can Learn From This Shift

The good news, rarely will you need $2 million. You need five real customer conversations, a whiteboard, and maybe a weekend.

Entrepreneurship today is faster, cheaper, more experimental—and far more forgiving. The tools are better. The methods are smarter. The costs of failure are lower. And the feedback loops are tighter.

But what hasn’t changed is the mindset. Entrepreneurs still need grit, vision, hustle, and resilience. Those aren’t outdated—they’re timeless.

We were flying blind in 1995, and it worked. But only because there wasn’t a better way.

Today, there is.

Use it.

If you liked this, you might like this related post about how to analyze industry attractiveness.

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Knowing Your Place: How to Visually Map Your Competition

Brad Poulos — Sat, 08 Nov 2025 14:01:53 +0000

Why You Need More Than a Gut Feel

Most small business owners think they know who their competition is. You probably do, if you’re on your game. But if you’re not sure, or you want to up your game in terms of how you think about your market and the players within it, here are two simple tools to help bring clarity to your competitive position.

We usually teach these as big company strategy tools, but you’ll find both of them are also useful to the entrepreneur. Crystal clear competitive awareness can’t be a bad thing. It will help you fine-tune your positioning in the industry, and take advantage of strategic gaps in the market.

The Competitive Matrix

A competitive matrix packs a lot of information into a small space. To do it right, you first need to understand how the game is played in your industry. Specifically, you need to identify the primary bases of competition. Most industries have between three and five non-negotiables —the things that you must excel at to dominate an industry. These are the dimensions we will use to size up the competition.

And that’s the next challenge. Identifying who your competitors are can also be tricky. Imagine that you’re a used car dealer, specializing in middle-market, high-quality cars. You sell a lot of two-year old Hondas, the odd Infiniti or Lexus, and quite a few Volkswagen Jettas. Not far away is a “competitor” that only sells luxury used cars. Nothing below a BMW. Do you really compete? Do we even need to be good at the same things? Probably not!

You should probably narrow the scope of your competitive analysis to your segment of the used car industry, and consider the luxury specialists as a substitute. It doesn’t mean we can’t learn from them or we shouldn’t study them, but we will confine the direct competitors to those who sell what we do.

Let’s say the key success factors for this industry are:

Access to inventory: Since they don’t manufacture their product, they have to be good at sourcing it.
Competitive Pricing: Margins are tight in this kind of business, so your profit will come from velocity, which means you need to be competitive on price.
Customer Trust & Reputation: The used car industry has a lot of warts on it from a customer perspective. Any ability to establish a good reputation will be a durable differentiator.
Digital Presence & Lead Generation: Nowadays, most used car buyers start online, so visibility and digital conversion are now paramount.
Operational Excellence: In a low-margin business, you need to be good at all of the little things to be profitable (upselling, inventory management, reconditioning, delivery, regulatory compliance).

The first two of these can be somewhat difficult to ascertain, but the others are not. The competitive matrix like you see below. This version includes weighting for each of the factors.

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The matrix shows how you stack up on an overall basis, and where you stand on each key factor. But it treats all competitors as if they’re playing variations of the same game. Some dealers may be running completely different business models, and that’s where our second tool comes in.

The Strategic Group Map

The Strategic Group Map is about how businesses cluster, often based on similar models or strategic approaches. It’s a highly visual tool that helps you see what strategy the various players in an industry are following, and may point to opportunities to carve out a different strategy, opening up a “blue ocean” for your firm.

We use a graphical 2×2 grid comparing businesses along two non-correlated competitive dimensions. For example you might choose price/quality as one dimension and the breadth of their operations as another. Firms that have in-house mechanic, body shop, detailing, and financing operations would be at one end of the continuum, and simple car lots that farm out virtually everything beyond a quick vacuuming at the other.

It’s important that the axes for the comparison be non-correlated (hence us grouping price and quality as a single one), otherwise you’ll end up with a straight line and won’t really learn anything. It’s also important that the two axes actually matter competitively. They have to influence how businesses win or lose, otherwise who cares? They may or may not be customer-facing.

The map is created by plotting the various competitors (or groups of them) using circles that represent their relative sizes.

In our fictitious example, it seems there may be an opportunity to compete with a mid-price/broad operations focus.

You can’t beat every competitor, and you don’t need to. You just need to know which ones actually matter, and who is playing what variation of the game.

Build your own competitive matrix this week. It’ll take you one coffee’s worth of time, and bring more strategic clarity to the notion of keeping an eye on the competition.

If you liked this, you might like this related post about how to analyze industry attractiveness.

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Change Management Isn’t Optional — It’s Survival

Brad Poulos — Sat, 01 Nov 2025 13:30:33 +0000

[This post was guest authored by Denise Fekete]

We humans are innately resistant to change, even when it benefits us. Why? Fear of the unknown, a loss of control, our habitual nature, and fear of failure all play a role.
My thirty-plus-year career in the learning field has always aligned with driving change. Everything I do is about change. I love what I do, and in my work, I’m a change enthusiast! But that does not mean I am immune to resistance.

Take my golf game, for example. I had a goal to break a score of one hundred. I was so close in the spring, then an injury set me back. I nearly gave up playing altogether. When I returned, it felt like starting from scratch. Frustrated and disappointed, quitting seemed easier. But my social circle is full of golfers who would have given me a hard time if I walked away. So, I put in the physical and mental effort to get back in the game. The result? I broke one hundred in my final round of the year, whew!

My point: change takes effort. Simple. In our personal lives, we often choose the easy way out. But in our careers, that path can be risky, no matter your trajectory.

Try this: sit down and write out your resume, listing all the learning you have acquired in each role. You will see a great deal of change throughout your career, even if you are just starting out.

Every learning moment is a step toward opportunity, big or small. Did you resist any of it? Did that resistance help or hinder you?

Kubler- Ross Change Curve

When you reflect on the Kubler-Ross Change Curve, you can likely identify where you are, or have been, on that journey.

For example, when I joined my current organization, it was the perfect size: small, well-known, great culture. Shortly after, a merger was announced. We would be moving from small to large in just a few years.

When I struggle with change, I lean on my Prosci Change Practitioner training, Cassandra Worthy’s motivational insights, and the Kubler-Ross model to ground me. Looking at the curve, I saw my journey: shock at the announcement, questioning my reaction, sadness at the loss of what I had found. But having gone through two previous mergers, I quickly shifted to seeing the opportunities ahead. The merger is with another amazing organization, and I am now eager to get started. I have now moved into the decision and integration stages. I could have stayed in sadness and changed jobs, but it took effort to see the positives.

There’s a great scene in the film Moneyball where Brad Pitt’s character addresses change with a scout. The movie, based on a true story, follows a baseball manager trying to build a team with limited funds. He partners with a baseball whiz kid whose ideas are met with resistance. One major staff member refuses to even consider the new approach. It’s a powerful example of how humans instinctively resist change. In the end, the idea works and is now used by all major league teams.

Crossing the Chasm

Change is constant in today’s workplace, which clashes with our fear of sudden shifts. If you are driving change, understanding its impact, on yourself and your collaborators, is critical.
Simon Sinek offers great insights into the human experience of change, and how to leverage early adopters to drive change internally.

His ideas align with the concept of Geoffrey Moore’s Crossing the Chasm, which uses Rogers’ Diffusion of Innovation curve to outline how people adopt new ideas or technologies:

Innovators: Already onboard
Early Adopters: Follow quickly
Early Majority: Ask “What’s in it for me?”
Late Majority: Crossed the chasm but still need support
Laggards: The most resistant and may never adopt

Resisters play a vital role in driving change. They surface opportunities and help ensure success.

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Leading Through Resistance: Driving Change Across the Chasm

This is where leaders play a critical role in driving change. One of your biggest challenges as a leader is helping others cross the chasm into the early majority, especially when you yourself haven’t yet made that journey. This is exactly when your resistors will appear (if not sooner).
Resistors may show up as sadness, rejection, anger, uncertainty, or hyper-focus on what’s wrong with the decision. As you deepen your understanding of change leadership, begin tracking which behaviors align with these reactions. This will help you later when identifying roles, assigning tasks, and building support systems.

Importantly, resistors aren’t just obstacles, they’re vital contributors. They often surface the tough questions, highlight overlooked risks, and bring hidden opportunities to light. They can lead the unsure and rally the likeminded. Their resistance, when acknowledged and engaged with empathy, can be a powerful force for success.

As a leader, your awareness of where you are on the change curve is essential, especially if you recognize yourself as a resistor. Managing your own mindset while driving change requires self-reflection. This reflection not only helps you understand your own reactions but also builds empathy for others navigating their own change journeys.

And remember, it’s okay not to have all the answers. Let your team know you will follow up and make sure you follow up as that is a trust factor in relationship building.

Resistance is a signal, it means people are aware of and responding to the change. By building readiness early, you create space for meaningful dialogue, collaboration, and momentum.

Learning and Change

Driving change and learning should be closely tied together in the planning phase. Keeping learning fresh through change techniques helps people assimilate information and build confidence to adopt and adapt.

I recommend using ADKAR, the Prosci Change Management Model. It’s simple and ensures a comprehensive plan to support change. Here’s how you might use it in your small business. Imagine a small manufacturing business. The owner is trying to modernize but the old timers back in the shop push back on every sort of change, and don’t want to even know what Excel is!

Awareness: The owner holds shop floor meetings explaining why modernization matters, not for her bottom line, but for job security, fewer frustrating errors, and staying competitive against larger manufacturers.

Desire: She connects the change to what workers care about: less overtime fixing mistakes, easier communication between shifts, and simpler processes. For the near retirees, she emphasizes legacy and helping train the next generation.

Knowledge: Training is hands-on, practical, and patient. No corporate training modules. Just real scenarios they faced daily. “Here’s how you’d log that part shortage.” or “Here’s how you’d check the schedule for tomorrow.”

Ability: She gives them time to practice without pressure. Mistakes are expected and normalized. The office manager is available for questions, no matter how basic.

Reinforcement: She celebrates small wins publicly to prevent backsliding. When the first digital inventory count matches the physical count, or when the first worker sends a successful shift handoff note. She also keeps the old paper backup system running for two months as a safety net, reducing anxiety.

Within six months, even the most resistant workers are using the system. Not enthusiastically, perhaps, but competently. And the business? It has reduced inventory errors by 40% and cut administrative time by hours each week.

Here is a sample of how it can be used in your planning.

Change Management vs Change Leadership

Both are essential, but different and it is important to know the distinction. Here is a great video that explains the distinction.

Change is about stepping outside your comfort zone in a particular domain. This pictorial shows how we move from the comfort zone, through fear and learning, to the growth zone. Can you see yourself in one of these zones based on any current changes in your world?

I can! I am in the “Learning Zone”, in the domain of building AI agents. It is interesting and engaging work. As a lifelong learner learning new skills motivates me. I use that energy to inspire my team to build their skills and knowledge to enable their growth. Role modeling for your team is an important thing to remember as a leader.

Change is a journey. If you approach it with a positive mindset, the adoption and adaption will be a more positive experience for everyone.

Denise Fekete is a senior Learning & Development strategist with deep expertise in human-centred learning design, AI innovation, change management, workforce transformation, and purpose-driven leadership. She brings a pragmatic approach to technology transformation, grounded in extensive experience across learning design, quality assurance, and change enablement. Denise has a proven track record of scaling learning programs through strategic use of technology and data, particularly within the insurance and financial services sectors.

If you liked this, you might like this related post about the importance of getting goals right!

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A Big Company Strategy Tool Anyone Can Use

Brad Poulos — Tue, 28 Oct 2025 13:00:55 +0000

In 2007, I walked away from an industry I knew inside and out. I had the relationships, the expertise, and momentum such that everything looked perfect on paper. But I did a simple analysis that made me decide to carve a new path… The analysis used one of the strategy tools that we teach biz school students. While most suitably applied in a large corporate setting, they may have their place in the small business arena as well. The art is in knowing when to use which tool! Small business owners often make critical decisions about expansion without understanding the deeper forces that determine success and profitability in that space. Michael Porter’s Five Forces framework is a tool that any firm can use to assess the attractiveness (long-term prospects of profitability) of an industry. A five forces analysis is used mostly to inform decisions about market entry. It looks at the complete competitive landscape, not just your direct rivals, to reveal hidden threats and opportunities.

Porter’s Five Forces

Developed by Harvard Business School professor Michael Porter in 1979, the Five Forces framework identifies five factors that determine whether an industry is attractive (profitable) or unattractive (difficult to make money in). Briefly, they are:

Competitive Rivalry – How intense is the competition among existing players?
Supplier Power – How much leverage do your suppliers have over pricing and terms?
Buyer Power – How much can customers demand lower prices or better service?
Threat of New Entrants – What barriers exist and how easy is it for new competitors to enter your market?
Threat of Substitutes – How “sticky” are customers and what alternative products or services could replace yours?

Interestingly, an attractive industry isn’t necessarily one with few competitors. It’s one where the combined forces allow businesses to maintain healthy profit margins. Look at the fast food industry. There are many competitors who thrive by carving out their own niche, product or location-wise.

A Real-World Decision Using Five Forces Analysis

In 2007, I faced a crossroads. My brother and I had spent ten years building a successful value-added reseller business in the wireless infrastructure space. We sold wireless equipment and installation/testing gear to telecommunications companies. When I left the company, I had a choice: start fresh in the same industry with the same customers and suppliers, or walk away entirely and do something else. On paper, it looked like the easy thing to do. I walked through an informal Five Forces analysis in my head. I never wrote it down, but I absolutely walked through the five forces like I’m going to do with you here:

Competitive Rivalry

Here we normally look at the number of competitors, how different their product offerings are, and how fast the industry is growing. If the pie is shrinking we will have to all duke it out for that diminishing pie. But if we all have different products, or the industry is growing really fast, we don’t need to worry much about one another. Want to follow along? Grab the Five Forces Worksheet and assess your industry as you read. In my case there were only a handful of direct competitors, who mostly got along. But it was a tiny industry with only four major customers and a bunch of small ones. We all served the same customers, and the real basis of competition was having an exclusive contract with one of the more well-known product lines. Add to that the fact that we all chased business from the same three large Canadian telcos, and that we were entering a brutal recession with zero growth prospects. Overall, this force was negative.

Supplier Power

Supplier and buyer power normally come down the relative size and number. When there are a large number of small suppliers, none of them have much power. A concentrated supplier base with larger players will have more power. Brand power and switching costs might also be relevant factors. As stated, we competed for the “good” lines, so our suppliers had a huge amount of power. They were massive corporations (billions in revenue) with brand names that our customers demanded. You served at the pleasure of your supplier with a 30-day termination clause. This one was strongly negative.

Buyer Power

It’s relative size and number again. Buyer and supplier power are two sides of the same coin. The textbooks tell you to look at customer concentration, volume of purchases, switching costs, and price sensitivity, but I’ve yet to encounter a situation where it wasn’t dominated by just how many and how big the buyers are. When there are many, individually, they have no bargaining power. Our company had three customers that mattered. Their volumes were significant to us, and while they had some switching costs it wasn’t out of the question. They negotiated aggressively and had alternatives. Their power was indisputable. Strongly negative.

Threat of New Entrants

In general, the easier it is for a new company to enter an industry, the more negative we view an industry, all other things being equal. It’s mostly about “barriers to entry”. Think about a barbershop. There are limited capital requirements, no real benefits to be derived from economies of scale, easy access to necessary suppliers, no significant regulatory barriers, limited customer brand loyalty. This points to very low barriers. My business didn’t have large capital requirements either, but you need established relationships with either suppliers OR customers (preferably both). Newcomers can’t just waltz in and steal business. The barriers were relationship-based, not financial, and take years to build. This force was positive.

Threat of Substitutes

A substitute service or product is one that serves the same need as yours but in a fundamentally different way. Orange juice is a substitute for bottled water or ginger ale, not a competitor. We’d usually look at the price-performance trade-off and how easy it is to switch between the alternatives when examining this force.

While at the product level there are always substitutes, at the level of our firm, there really wasn’t another way for our customers and our suppliers to meet.

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The world is full of middlemen, and we were one. At the time, anyway, there wasn’t a realistic alternative, so no immediate threat, but also no advantage. This threat was neutral.

The Bottom Line

The scorecard didn’t favour this industry. My one advantage stemmed from already being in the industry, so it wasn’t really an industry force per se. The rest was at best neutral.

Three forces: Strongly negative or negative
One force: Positive
One force: Neutral

I chose not to re-enter the industry. Interestingly, my brother continued, did so quite successfully, and eventually exited after many years. This highlights the importance of that one positive force, the industry relationships! That analysis saved me from a bad decision (for me). But you don’t need to be at a crossroads to benefit from this tool. Here’s how to apply it to your business…

What’s in this for ME?

It’s probably in every small business owner’s interest to do a similar analysis to mine, just so you know where you stand. But where this is really helpful is where you’re thinking about expanding your business into a new industry, or even new markets within your current industry. Ask these questions to yourself, then for each force, make an assessment as to where it lies on the continuum between strongly negative and strongly positive.

Competitive Rivalry

How many direct competitors do I have in my market?
Are our products/services truly differentiated, or are we all selling basically the same thing?
Is the industry growing, flat, or shrinking?
What are the primary bases of competition? (location, price, quality, service, innovation)
Are there high fixed costs that force competitors to fight for volume?

The red flags you want to look out for are many undifferentiated competitors, a shrinking market, or competition based mainly on price.

Supplier Power

How many alternative suppliers could I use?
How critical are my suppliers’ products to my business?
Could my suppliers easily sell direct to my customers?
What are my switching costs if I change suppliers?
Do my suppliers have much more market power than I do?

You lose power when there are only a few suppliers, no alternatives, or they could bypass you in the sales channel, and sell direct to your customers.

Buyer Power

How concentrated are my customers? (Do a few accounts make up the majority of the revenue? Are any over 20% of the total?)
How price-sensitive are they?
How easy is it for them to switch to competitors?
Do they have good information about costs and alternatives?
Could they do what I do themselves (backward integration)?

If you have only a few large customers and a commoditized offering with low switching costs you have little power.

Threat of New Entrants

How much capital does it take to start competing in my space?
Do I have advantages from scale, proprietary technology, or brand?
Are there regulatory requirements that protect me?
How hard is it to access customers or distribution channels?
Do customers have loyalty to established players?

The “green flags” you want to look for are high capital needs, strong brand advantages, regulatory barriers, and the need for established customer relationships. These make it harder for others to come into your sandbox!

Threat of Substitutes

What other solutions could address my customers’ underlying need?
Are there emerging technologies that could replace what I offer?
What’s the price-performance trade-off of substitutes vs. my offering?
How willing are customers to switch to alternatives?

Keep an eye out for better and cheaper substitutes emerging. Changing customer preferences and low switching costs make this a credible threat.

Create Your Scorecard

Once you have rated each force, assess the overall attractiveness of the industry. If you score mostly negative forces, seriously reconsider entering this market unless you have a specific, defensible advantage. A mixed score is more likely. Here you want to focus your strategy on mitigating the biggest negatives and exploiting the positives. Obviously, if you score mostly positive forces, you’ve found a promising opportunity.

Actionable Strategies Based on Your Five Forces Analysis

Here are some ideas to incorporate into your strategy based on what the Porter five forces analysis tells you. If Supplier Power is High:

Diversify your supplier base and reduce dependence
Develop alternative sources or in-house capabilities
Build stronger relationships with multiple suppliers
Create more value for suppliers so they prioritize you
Form buying groups with other businesses to increase leverage

If Buyer Power is High:

Differentiate meaningfully so you’re not just another vendor
Create switching costs (loyalty programs, integration, specialized knowledge)
Improve customer experience beyond the product itself
Serve a broader customer base to reduce concentration risk
Move up/down market to segments with less buyer power
Add services that make you stickier

If Competitive Rivalry is Intense:

Find your niche where you can dominate
Differentiate on dimensions competitors can’t easily copy
Build brand equity that commands premium pricing
Create cost advantages through efficiency or scale
Focus on customer relationships rather than just transactions
Consider whether to stay if the industry is fundamentally unattractive

When Not To Use It

You’re already IN the business (too late for entry analysis)
The industry is in rapid transformation
You’re making tactical decisions (pricing, marketing)
You’re comparing yourself to specific competitors

If Threat of New Entrants is High:

Build barriers through brand, relationships, or proprietary assets
Create customer switching costs if possible
Pursue exclusive partnerships with key suppliers or distributors
Develop specialized expertise that’s hard to replicate
Build scale advantages that make it hard for small players to compete

If Threat of Substitutes is High:

Monitor emerging alternatives constantly
Innovate proactively rather than reactively
Emphasize your unique advantages vs. substitutes
Consider adopting the substitute yourself (if you can’t beat them…)
Bundle services that substitutes can’t easily replicate

The goal isn’t to find a perfect industry. The goal is to understand the battlefield so you can choose your battles wisely and develop strategies that actually work, given the forces you face. What industry forces are shaping your business? Want a simple worksheet to guide your analysis? Download the Five Forces Worksheet here

If you liked this, you might like this related post about how systems turn goals from dreams into reality.

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Forget Money. Here’s What Really Motivates People.

Brad Poulos — Sat, 25 Oct 2025 13:00:27 +0000

Understanding Herzberg’s Motivation-Hygiene Theory

Ever tried to boost team morale with a small raise or a pizza lunch and found the effects short-lived? Or given someone a raise only to see their performance drop off? Many small business owners confuse what keeps employees satisfied with what simply keeps them from quitting. We throw money at problems, celebrate birthdays with cake, upgrade the break room coffee, and wonder why people still seem disengaged or, worse, start looking elsewhere.

The truth is, we’re often solving the wrong problem entirely. As my dad would say:

Son, you’ve got the em-PHA-sis on the wrong syl-LA-ble!

The late James Poulos (Brad's Dad)

Frederick Herzberg’s Motivation-Hygiene Theory (also called the “Two-Factor Theory”) helps you put that em-PHA-sis where it belongs. This durable framework will change how you think about managing people, which is crucial when employee engagement is at all time lows.

Two Buckets: Hygiene Factors vs. Motivators

Herzberg’s theory, developed in the 1950s after interviewing thousands of workers, is eye-opening. It splits job factors into two distinct categories that we often think of as opposites, but are really on completely separate tracks.

Hygiene factors are the first bucket. These don’t necessarily make people love their jobs, but if they’re missing, you’ll absolutely hear about it. Think of them as the baseline, the cost of entry, or the stuff that has to be right or everything can fall apart. These factors, when you get them wrong, will lead directly to job dissatisfaction.

But the counterintuitive part is that when you get them right, you don’t get real satisfaction, you just get an absence of dissatisfaction. In other words they can be at best neutral in their effect on employee performance or engagement. Getting them wrong will sting you but getting them right doesn’t bring any huge reward for the company.

The other surprising thing is that hygiene factors include salary and benefits. Others, like company policies that actually make sense, decent working conditions, job security, quality supervision, and functional relationships with co-workers are also important to get right, but keep in mind that none of these are motivational. The hygiene factors get you to neutral, at best. You can pay someone well, give them great benefits, and have a fair scheduling policy, and they will not necessarily feel motivated. They keep people from actively hating their jobs and not quitting, but that’s about it.

Motivators, the second bucket, are where things get interesting. These factors make people feel genuinely fulfilled and motivated to do their best work. We’re talking about recognition for accomplishments, a sense of achievement, opportunities for personal growth, increased responsibility, finding meaning in the work itself, and clear paths for advancement.

These are the things that make people say “I love my job” instead of just “my job is fine.” And here’s the crucial part: you can’t substitute one bucket for the other. You can’t fix a lack of recognition by bumping someone’s salary by two percent. It doesn’t work that way. You have to actively manage the elements in both buckets.

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The Money Paradox

Here’s where it gets tricky, and where a lot of business owners get confused: money is not a motivator, but the promise of money can be.

Your current salary, no matter how generous, becomes what you feel you’re worth. It’s the baseline. You’ll give a good day’s work for a good day’s pay, but that steady paycheck won’t make you go the extra mile. Once it hits your bank account, it’s a hygiene factor. Necessary, but not motivating.

Raises too. They lose their motivational power quickly. The day after you get it you’re walking on air, but by the time the first paycheque comes the extra money is matched to expectations.

But a bonus tied to hitting a specific goal is different. The promise of future money, contingent on achievement, can absolutely motivate. Commissions, profit-sharing, or performance bonuses are always out there; always something to work toward. And the more meaningful they are to an employee’s overall compensation, that is, the greater proportion they make up, the more meaningfully they will shape behaviour.

The downside is that the concept works in both directions. The promise of money can be motivating. And the promise of NO money will sap that motivation. If a salesperson tops out their bonus by Halloween, they’re apt to sandbag until January to help pad next year’s sales, and increase the chances of maxing out again.

People will always behave in the way that the systems you create influence them to. If you want your salespeople to keep selling all year, and maybe even work harder in the final stretches, create a progressive compensation system; don’t design in reasons for people to stop working.

Why It Matters to Small Business Owners

This distinction is especially important for those of us running small businesses. We often can’t compete with larger firms when it comes to pay or perks. We’re not offering six-figure salaries, a comprehensive retirement plan, or fancy corporate retreats in Cabo.

Our superpower is that we can offer work that actually matters, real responsibility that isn’t buried under seven layers of corporate bureaucracy, and a strong sense of how an individual contribution is moving the needle. In a small business, people can see the direct impact of their work. They’re not just a cog in a massive machine. This can bring a powerful sense of belonging that motivates and retains the right people.

The employees who thrive in small businesses are not usually the ones chasing the biggest paycheque. They’re the ones who want autonomy, who want to grow, who want to feel like what they do matters. Those are motivator-driven people, and that’s your competitive advantage.

And the kicker is that it doesn’t cost anything, really, to create the culture and systems that support motivators. At least nothing close to a trip to Cabo!

Putting Two-Factor Theory Into Practice

You have a shop-floor employee who complains about inconsistent schedules. One week they’re opening, the next they’re closing, and they never know what’s coming. That’s a hygiene issue. It’s about working conditions and company policies. Fixing it might stop them from quitting, and you absolutely should fix it, but doing so won’t make them love the job. They’ll just stop being actively annoyed about their schedule.

But what if you take a different approach? What if you start involving them in workflow decisions, asking for their input on how to improve efficiency or solve recurring problems? What if you offer a clear path to becoming a floor supervisor, with increasing responsibility along the way? What if you even gave the staff input into the schedule? Now that’s a motivator. Now they’re not just showing up and watching the clock. They’re engaged. They’re thinking about the business when they’re not at work. They’re bringing ideas to the table.
Same employee, completely different outcome.

Get the Basics Right, Then Aim Higher

Think of hygiene factors as the foundation of a house. Get them wrong, and nothing else matters. You can’t build a beautiful home on a cracked foundation. If people don’t feel they’re paid fairly, if your policies are chaotic, if the work environment is toxic, none of your recognition programs or growth opportunities will land.

But a solid foundation alone doesn’t make a house inspiring. Once the hygiene factors are optimized you need to focus on the motivators. That’s where you build something special.
The small businesses that punch above their weight—the ones with loyal, engaged teams despite not having corporate budgets—are the ones that understand this distinction. They get the little things right, AND they invest heavily in making work meaningful, developing their people, and giving them real ownership and recognition.

If you liked this, you might like this related post about the importance of getting goals right!

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Jobs to Be Done: Understanding What Your Customers Really Want

Brad Poulos — Tue, 21 Oct 2025 13:00:13 +0000

People don’t want a drill. They want a hole in the wall. Most businesses don’t really understand why their customers buy from them. They think they know. They’ve got demographics. They’ve analyzed seasonal purchase patterns. They’ve even done customer surveys where people check boxes about “quality” and “value.” But they’re looking at the wrong data entirely. Because here’s the thing. If you’re in the drill business, obsessing over chuck sizes and battery life, you’re not playing big-league marketing. Look more deeply into what customers are really buying.

The Theory That Explains Why Good Companies Fail

Successful companies are consistently, even when they’re doing everything “right.” They listen to customers, invest in R&D, and improve their products. And yet they still get blindsided. The problem? They’re measuring success by the wrong yardstick. Companies segment customers by demographics and product attributes: “35-year-old males who want faster processing speeds.” But these categories don’t predict actual buying behaviour. Clayton Christensen, author of The Innovator’s Dilemma and Competing Against Luck, focused his research on innovation and disruption. Along with Bob Moesta and colleagues at The Re-Wired Group, he worked with a client in the fast food industry that wanted to sell more milkshakes. They’d done the traditional market research: improved the product based on customer feedback, tweaked the formula, played with pricing. Sales stayed flat.

So Christensen’s team tried something different. They stood in restaurants for 18 hours asking people: “What job were you hiring that milkshake to do?”

Christensen realized that customers don’t buy products, they “hire” them to make progress in specific circumstances.

This insight became “Jobs to Be Done” theory, and it emerged from one of the best consulting stories in business literature.

What this teaches us

Segmenting by occupation, age, gender, and other demographic variables won’t reveal the motivations behind purchase behaviour. Behavioural variables, like the circumstances of use and the job to be done, run deeper and provide better positioning guidance. Two people may. be buying the same thing for very different reasons. Don’t miss the nuance.

Identifying the true competition will include indirect competitors you might not have considered, as well as customer workarounds. Even non-consumption should be considered a form of competition—because the customer might simply choose to do nothing.

Take tax software, for example. Before products like TurboTax, many people either paid expensive accountants for simple returns or muddled through paper forms, confused and anxious. Others just didn’t file properly at all. TurboTax didn’t just compete with accountants: it activated non-consumers by lowering the barrier to entry and making the process approachable.

Why This Matters for Your Business

Successful companies march upmarket, adding features and improving performance along dimensions that matter to existing customers. It’s what business school teaches. It’s also what makes them vulnerable.

Jobs to Be Done keeps you from falling into this trap in three ways:

First, it reveals non-consumption. Your biggest opportunity might not be stealing customers from competitors—it’s serving people who’ve cobbled together inadequate workarounds. They’re doing the job badly or not at all because nothing serves them well.

Second, it prevents feature creep. You stop gold-plating your product with bells and whistles nobody wanted. That premium coffee grinder with seventeen settings? If the job is “make decent coffee before I’m fully awake,” those extra features are just friction.

Think about how remote controls went from simple channel changers to overly complex gadgets with dozens of rarely used buttons.

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Third, it predicts actual switching behaviour. Traditional market research asks, “Would you buy this?” JTBD asks, “What progress are you trying to make, and what are you currently using?”

The gap between those answers is where opportunity lives.

You’ll also uncover opportunities for invention and innovation. Those people using inadequate Band-Aids are ripe targets for game changers. Think about how the Swiffer redefined the category from “mop” to “quick, lightweight cleaning in small bursts without setup”, and how Uber changed the game from taxis to safe, reliable, transparent, on-demand personal mobility.

How to Find Your Customers’ Jobs (And Go Deeper Than You Think)

Stop asking what features they want. Start asking about the last time they used your product or service and what they were trying to accomplish. What else did they consider using? What would have happened if they couldn’t do this? How did they feel before, during, and after?

Pay attention to three dimensions: functional (what tangible outcome do they need?), emotional (how do they want to feel?), and social (how does this affect how others see them?).

But here’s the advanced move: don’t stop at the first answer. Use what marketers call “laddering” and what my colleagues and I just call the “5 whys”. Keep asking “why does that matter to you?” to climb from surface-level features to deeper truths.

A customer says they hired your accounting service to “file taxes correctly” (functional job). Fine. Now, ladder up:

Why does filing taxes matter? → “To avoid IRS problems.”
Why do IRS problems matter? → “There are financial and personal repercusssions”
Why does that matter? → “Because I’m terrified of jail and losing everything I’ve built.”

See what happened? You started with tax compliance and discovered the real job is peace of mind and protection of their life’s work. If you think about it, how could anyone really need to file their taxes. It’s more like we have to! That distinction change everything about how you market and deliver your service. You’re not selling tax prep. You’re selling freedom from anxiety.

The Mistakes Everyone Makes

Don’t confuse demographics with jobs. “Millennials” aren’t consuming your product just because they share a birth year. A 28-year-old buying a milkshake for their morning commute has more in common with a 52-year-old doing the same job than with another 28-year-old getting it to shut up their kid.

And don’t assume the job never changes. The pandemic radically shifted what people looked to restaurants to do. Suddenly the job became “help me feel normal” or “give me a break from cooking,” not “provide a place to gather.”

Forces of Progress

Going a bit deeper into the theory reveals the emotional and psychological dynamics that influence customers when deciding whether to adopt or abandon a product or service.
There is an interplay of motivations that explains why people switch to your product (or why they don’t, even when yours is objectively better). Bob Moesta and Chris Spiek (building on Christensen’s work) identified four forces at play in every purchase decision involving potential change.

The push of the current situation’s inadequacies, and the pull of the new product’s promise, are forces for change that move the customer toward the new choice. The fears and uncertainty about switching and comfort with the current way of doing things, even if it’s imperfect (“devil you know”), are the forces against change, leading the customer to stay put.

Change or progress happens when: Push + Pull > Anxiety + Habit

How to Put This to Work

Most marketers only focus on Pull (making their product attractive). But that’s just 1 of 4 forces. If you ignore the others, you’ll wonder why your “obviously superior” product isn’t selling.

Interview customers who to gain insight about each of the four forces. Don’t just ask why they bought yours or another solution. Go deeper. Use the “five why’s” and search for motivation stemming from each of the four forces.

Your promotional activity and positioning should be tailored based on the evidence you gather. Which forces are most favourable to you? Your promotional activity should amplify those. And don’t be afraid to agitate the problem. Show the cost of staying put, not just in money but time, stress, and missed opportunities.

You also need to design your offering around the forces that determine whether someone actually switches. Free trials reduce anxiety. Quick wins amplify pull before doubt creeps in. Comparison charts amplify push by making the status quo feel expensive.
The trickiest force is habit. People stick with terrible solutions because switching feels exhausting. This is why migration support matters. Import tools and data transfer don’t just reduce anxiety; they demolish the practical barriers that make habit so powerful. Smart businesses engineer their entire customer journey around these forces, not just their product features.

The Big Mistake

Most failed products have strong pull (great features) but ignore anxiety and habit. The iPhone succeeded partly because it reduced anxiety (intuitive enough that you didn’t need a manual) and habit (kept familiar concepts like “home button” and “apps”).
WeWork struggled because even though push was strong (people hate traditional offices) and pull was strong (cool spaces), anxiety was massive (long-term commitment, what if we outgrow it?) and habit was huge (commercial real estate is how things are done).

Your Assignment

This week, interview one customer. Not a survey. But an actual conversation. Ask about the last time they bought from you. Ask what they almost bought instead. Ask what would have happened if your business didn’t exist.

Then ladder up. Keep asking “why does that matter?” until you hit something that makes them pause. That’s usually where the real job lives.

You’ll learn more in that 20-minute conversation than from a thousand surveys about how they’d rate your “customer service” on a scale of 1 to 10.

Because once you understand the job you’re really being hired to do, everything else—your marketing, your product development, your pricing—suddenly gets a lot clearer.

If you liked this, you might like this related post about firing customers.

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Choosing the Right Business Owner Title

Brad Poulos — Tue, 14 Oct 2025 13:00:22 +0000

Why You’re Probably Not a CEO (And That’s Okay)

A potential client will form a (reliable) first impression less than one second after meeting you. Your business title is often the first thing they notice, shaping how they perceive both you and your company. Overstating your title will immediately undermine your reputation.

“So, I see you’re a CEO. Is your title overstated, or do you just work for a really small company?”

Title clarity beats vanity every time

Who Cares? Pretty much everyone. Your title influences how clients, partners, and employees perceive your authority and expertise. It’s a reflection of your company culture and working environment, but it also says something about YOU. It’s rare that we can choose our own title in the corporate world, however as the owner of the company, you have full reign over what to call yourself. Your choice will reveal something about how you view yourself.

The right title communicates your role, establishes credibility, and signals what people can expect when working with you. Choose wisely, because your title creates immediate associations: “CEO” suggests a larger corporation, while “Founder” implies hands-on involvement and entrepreneurial spirit. Managing Director is quite formal and conveys gravity.

Your title should reflect your business structure. An LLC owner’s title differs from a corporation’s CEO. It also gives some idea of your daily role. As such, it can evolve as the company does. Scale your title along with the company.

So, Which Title, When?

Let’s start with the elephant in the room. I have met many solopreneurs who use the CEO title. This is categorically wrong. CEO stands for Chief Executive Officer. Chief implies you’re leading other executives. No CFO? No CTO? Then you’re not the CEO.

I have used the titles of President, Founder & Vice-President, and Director in companies that I started or helped start. The only time I have used the CEO title is when I was running a public company, and had a COO, CFO and a CTO reporting to me.

The exception would be a startup where the intention from the outset is to go big and create a team to raise serious money.

Middle Ground

If not CEO, then what? Most small business operators should probably use one of the following titles: President, General Manager, Managing Director, or Owner. I’m not a fan of the latter because it’s not an operational description. It says nothing about the role the person plays. The others are somewhat interchangeable.

You should let he industry drive this to some degree as well. Some industries are more formal than others, and demand a more formal-sounding title, or just cry out for a different title (creative industries for example).

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Less Is More

Titles don’t have to be flashy—or even accurate in a legal sense. I’ve known many business owners that deliberately understate their titles, and don’t broadcast that they have a second function—owner—in addition to their operational role. Examples I have seen include Business Development Manager, Director of Sales, Creative Director, and, when the owner was the technical lead, Technical Director.

Other titles, like Founder for example, might fit when the person has less of a day-to-day role, and the company wants to honour their early role as a vital player.

If you’re in a consulting company or other kind of professional service firm, the term Principal might be a good fit, and if you’re the sole owner-operator of a business, handling everything from strategy to daily operations, you might be a Proprietor.

Title	What It Signals
CEO	“This is a larger company with multiple execs”
Founder	“I started this”
President	“I’m the head decision-maker”
Managing Director	“I run the day-to-day and keep the trains running”
General Manager	“I’m responsible for operations and staff”
Owner	“I own this, but who knows what I do day-to-day”
Business Dev Manager	“I’m focused on growth and relationships”
Principal	“I’m the senior professional here”
Technical Director	“I’m the product/tech brains of this operation”

How to Choose

Here are a few watchouts for choosing a title:

Prioritize clarity – People should immediately understand your role and how to work with you
Match your actual role – Your title should reflect what you actually do daily
Consider perception – Think about what associations your title creates (professional scale, company culture, expertise level)
Research industry standards – Align with norms in your sector

Your title isn’t just what’s on your business card. It’s a test of self-awareness. Nail it, and you signal credibility. Flub it, and you’re just another punchline on LinkedIn.

If you liked this, you might like this related post about trusting your intuition in business.

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A Bias Toward Action

Brad Poulos — Sat, 11 Oct 2025 13:00:22 +0000

At a university, a professor asked his students: “If there are four birds on a tree and three of them decided to fly away, how many are left on the tree?” Everyone answered, “One.” They were surprised when one student disagreed and said, “Four birds remain.” This caught everyone’s attention.

The professor asked him: “How so?”

He replied: “You said they decided to fly, but you didn’t say they actually flew. Making a decision doesn’t mean taking action.”

It’s a teaching story that circulates widely, and for good reason. Decision doesn’t equal action. A bias toward action is one of my personal fundamental values. I don’t want to leave the earth regretting what I “coulda, woulda and shoulda”. I tell my students I’d rather regret that I did something than regret that I didn’t.

The Small Business Reality

In small business, the gap between decision and action kills more dreams than bad ideas ever will. I’ve seen it several times over the years. The otherwise savvy entrepreneur who “decided” six months ago that their culture-poisoning sales manager Stuart should be fired, but repeatedly postpones the action. The pricing increase that’s been “decided” since Q1 but somehow the old rates keep getting quoted. The bad client everyone knows needs to go but keeps getting one more chance.

This matters more in small business than in corporate life. You don’t have bureaucracy to blame, or scale to absorb waste. Resources are tight, which means indecision is expensive. Every month you don’t raise prices means profits foregone forever. Speed is supposed to be your competitive advantage over bigger players. Don’t squander that advantage by overthinking.

I’m not condoning recklessness or impulsivity, but rather a clear-eyed recognition that in business the cost of indecision often exceeds the cost of a wrong decision. Most bets are small, so act that way.

Why We Get Stuck

The psychological barriers are real. Fear of irreversibility stops us cold. What if I regret firing Stuart, raising prices, or cutting that service? Perfectionism whispers that we should wait for the perfect moment, the perfect plan, or the perfect conditions. Decision fatigue compounds everything. When you’re making a hundred small decisions daily, the big ones get endlessly postponed.

But here’s the truth that nearly twenty years of teaching and consulting has taught me: Most business decisions are more reversible than we think. You can re-hire, adjust pricing, bring back a service. Coca-Cola’s introduction of New Coke in the 1980s is a great example. They replaced Classic Coke, met a massive backlash, and reversed the decision within months.

Even at their scale, the decision turned out to be reversible. The “perfect moment” doesn’t exist—there’s just “now” and “too late.” And small businesses die from inaction far more often than from wrong action. The key insight is understanding the difference between strategic patience and procrastination. Strategic patience means waiting for the right information, doing due diligence on a major investment, or testing a market before scaling. Procrastination is avoiding discomfort.

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Often, what we call “being careful” is procrastination dressed up in business language. Perfectionism can also lead to decision delay. Consider Colin Powell’s “40-70 rule” which states that you need between 40 and 70 per cent of the total information to make a decision. With less than 40 per cent, you will likely make a poor choice, and with more than 70 per cent, you will end up taking too long, and the decision will be made for you!

What Action Actually Looks Like

So what does a bias toward action look like in practice? Here are real decisions small business owners face, and what action (not just deciding) actually means: The Personnel Problem DECIDED: “Stuart needs to go. He’s toxic, underperforming, or just the wrong fit.” ACTION: Start documentation today. Pull his file and review performance issues tonight. Review the employment agreement to understand your obligations. Book a meeting with your lawyer or HR consultant this week. Have the conversation next week. Not next quarter when it’s “less busy”. Stuart is costing you money and morale every single day. The Pricing Decision DECIDED: “We’re underpriced by 15%. Everyone tells us our quality is worth more.” ACTION: Email your next three prospects with the new rates today. Send existing clients written notice with a 90-day grandfather period this week. Update your website tonight. No more discounting because you’re nervous. The market will tell you if you’re wrong, and you can adjust. But you’ll never know if you don’t test it. If you’re wondering what the impact of the price increase might be, check out this post. Or, on a more personal note, you’ve DECIDED: “I need to lose these 30 lbs that crept up on me these last five years.” ACTION: Sign up for the gym again today. Start eating better with the very next meal, not next week. Restrict alcohol to the weekends starting right now, not “after tomorrow’s beer league game”. If your health matters, it matters now. Action has a today or a this week component. Specificity. Small, irreversible steps that create momentum. Once you’ve sent the email, cancelled the subscription, or booked the appointment, momentum can take over.

The Action Bias Framework

To make this easier at first, time-box your decisions. Give yourself a deadline. “I’ll decide about hiring/firing/pricing by Friday at noon.” Then honour it. The decision doesn’t get better by aging like wine. Create a personal bias toward reversible actions. Most decisions can be undone or adjusted. The ones that truly can’t like selling the company, taking on a business partner, or signing a 10-year lease deserve considerable deliberation. But most others are completely reversible.

The Entrepreneur’s Advantage

Speed of execution is the small business superpower. It’s your advantage over the corporate giants with their committees and approval processes. When you squander that advantage by acting like you need consensus from people who don’t exist, you’re giving away the only structural advantage you have. The birds that decide and fly are the ones that survive. The ones that just decide? They’re still sitting on the branch when winter comes, cold and getting hungry.

If you liked this, you might like this related post about “satisficing” or how good enough is often perfect.

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We Always Overshoot: From Fiber to Cannabis to AI

Brad Poulos — Sat, 04 Oct 2025 13:00:16 +0000

Every generation believes it has discovered the “next big thing.” Railroads in the 1870s, fiber optics and the dotcom’s irrational exuberance in the 1990s, cannabis in the 2010s, and today’s artificial intelligence boom all shared the same pattern: investors raced ahead of real demand. The technology was never fake. The timing was.

I watched two of these booms from inside the industry: the dot-com fiber glut and the Canadian cannabis overbuild. In both cases, exuberance pushed supply far beyond what the market could handle, destroying capital but laying foundations for future growth. I spotted the cannabis overshoot a year before the crash because I lived through the fibre glut. I see the same signals now in AI.

A Familiar Pattern

In the late 1990s, the “information superhighway” was the rallying cry. Companies raced to trench streets and string fiber, convinced the internet would consume bandwidth faster than anyone could build it. I remember telling my staff that the telcos were throwing money out the window of their ivory towers and our job was to catch as much as we could.

The scale was breathtaking. We knew internet traffic was growing fast, but we also knew the physics of laying fiber: once you’ve dug the trench, adding more strands costs very little. The result was a massive overshoot of capacity.

By 2002, after the bubble burst, only about 3% of U.S. fiber capacity was actually lit. By 2005, it was still under 5%, and most of those gleaming strands sat “dark” for years. Lighting them required investment in costly electronics, and demand wasn’t anywhere near the levels promised in the pitch decks of 1999. By 2012 only half of that laid fibre was being used to carry traffic.

The consequences for telecom carriers were brutal. Giants like Global Crossing and WorldCom went bankrupt. Investors lost billions.

Those once-dark fibers became the backbone of the modern internet. It took over a decade, but the glut eventually turned into the infrastructure we rely on today.

The Cannabis Overbuild in Canada

Fast-forward to 2017. Canada was on the brink of legalizing recreational cannabis, and the capital markets responded with a wave of exuberance. Billions of dollars poured into greenhouses, indoor cultivation facilities, and grandiose promises of global domination.

I was close to that market too, and the mismatch was obvious. Demand was real, but projections were wildly inflated. Consumer adoption was steady, not exponential, and regulations slowed distribution. Yet companies raced to build capacity as if every Canadian were going to double their consumption overnight.

That summer, I was warning publicly that there was far more production capacity than the market could absorb. Within a year, the crash arrived. Wholesale cannabis prices collapsed. Many facilities were mothballed before they ever planted a single crop. Companies wrote off billions, and stock prices cratered.

The lesson was the same as with fiber: the product was real, the enthusiasm understandable, but the buildout raced far ahead of demand.

Déjà Vu: The AI Buildout

Today, I feel that same twinge of recognition. The AI boom has unleashed a global arms race.

Trillions in projected spending are being funneled into GPUs, datacenters, and energy infrastructure. The numbers are staggering

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UBS estimates companies will spend US$375B globally on AI infrastructure in 2025 alone (NYT). Further, Nvidia CEO Jensen Huang now sees $3–4 trillion cumulative AI infrastructure spend by the end of this decade.

Contrast that with revenue estimates of $20-25 billion for this year and, being optimistic, $60 billion by next year; far off what’s needed to justify the invested trillions! (Sources: Bloomberg, Statista, and McKinsey)

Why We Always Overshoot

This cycle is not an accident. Cheap capital, fear of missing out, and the “land grab” logic of emerging technologies combine to drive investment ahead of real adoption. Psychologically, we humans overestimate what will happen in the short term and underestimate what will happen in the long term.

We’re in an AI Bubble

Just last month no less than Sam Altman, CEO of AI industry giant OpenAI, unequivocally stated that we’re in a bubble. To be fair, he further stated that all of the bubbles of the past were indeed about things that were a big deal. It’s just that people get overexcited. There’s no doubt that AI is a big deal.

The chart below shows the iSTOXX AI Global Artificial Intelligence Large 100 Index (an index of 100 companies that invest in AI ). The fact that we’re at an all-time high doesn’t alone warrant such pessimism. It’s the disconnect between revenues and the investment being made to earn them.

We will see some of the same consequences we saw with fiber and cannabis: bankruptcies, stranded assets, and disappointed investors. The market will punish the weakest players and the most overextended bets. But AI does have one crucial difference. Fiber strands buried in the ground couldn’t easily be moved, and cannabis grow ops couldn’t be repurposed for much else. Computing capacity, by contrast, is fungible. A datacentre built for AI can pivot to scientific computing, enterprise IT, climate modelling, or healthcare workloads. GPUs that aren’t training large language models can still crunch numbers for countless other industries. That doesn’t mean investors will escape losses. Even if the capital is redeployed and the economic waste is less severe and permanent, the AI bubble will burst, and the revenues will never justify the investment being made at present. There’s no doubt that the capacity being built today will eventually be redeployed, just as fiber was lit, years later. The question is how much capital will be destroyed before that happens.

One More Parallel

The mismatch between capital invested and realistic revenues isn’t the only common thread with earlier bubbles. The crash of 1929, the dot-com mania, and Canada’s cannabis green rush all saw a surge of retail investors piling in. I remember lots of small players buying on margin and day-trading chasing internet stocks, and in my world everyone was buying weed stocks in the mid 20-teens. All of these were just before the market collapsed.

What If I’m Wrong

This is one that’s akin to Pascal’s Wager. If I’m wrong, there’s no downside. I’m not shorting these stocks or recommending that you do! If I’m right, forewarned is forearmed.

If you liked this, you might like this related post about following your intuition when sizing up an industry.

The post We Always Overshoot: From Fiber to Cannabis to AI appeared first on Brad Poulos.