Over the last few weeks I've been thinking about the importance of setting the right expectations in the workplace.
If you set the wrong expectations you get dragged in directions you don't wan't to go. You end up overworked. And emotionally exhausted.
If you set the right expectations your work can feel more fun and enjoyable.
This is an equation:
Expectations minus reality is equal to happiness
So in the pursuit of happiness, I work actively to reduce my expectations and those of the people around me.
It's a powerful exercise that I encourage you to adopt in your life too.
How does this apply to the work place?
Let me share a short personal story with you.
In my early twenties I made a mistake.
I was running my first start-up. Things were hard. But exciting.
When I hired people to work with me I said "welcome to the family". I thought it was a nice thing to say.
These people would work side by side with me when things were good and bad.
And I wanted teammates to feel like they were part of a family unit.
This was a terrible mistake.
The reality is business is constantly in flux.
You may change products, or you may lose market share. These are not things you control. And when that happens you'll need to lay people off or fire them.
So the idea of an unconditional loving family is insincere. And when you are insincere as a leader, even by accident, you suffer the consequences.
Some consequences of framing your team as your family:
It's also a trap for employees:
I'm incredibly close with many of my teammates. But I want them to have their own friends and family. They should be able to turn their computers off and go spend time with their loved ones.
The framing I prefer now is one of a competitive sports team. Why?
Here is my learning on this (full tweet thread here):
Everything in business is expectation setting.
That is your brand. That is your culture.
Customer Service means different things to different companies.
Both succeeded in different ways.
It's your job as a leader to create clear culture rules for your company.
If you don't write out these rules. Other people will decide for you.
Or your customers will expect things from you that you don't want to do.
Most people think "great service" means doing everything your customers asks of you. That's not true.
It's emotionally and physically taxing, and you will burn out.
Your job as a leader is to protect the time and emotions of yourself and your team. If you can do this while delivering the best product or service, you can build a great business.
If you don't set these clear boundaries you will end up in a company you hate being part of.
Don't let that happen. You have full control.
Soon you can invest with me...
In the past, I've been uninspired by real estate returns.
I've been pitched on hundreds of deals by smart people with shiny degrees.
But when I compare real estate to buying a business here is what I see:
You can buy real estate at a ~20x cash flow multiple.
You can buy a business at a ~5x cash flow multiple.
That's why I prefer buying businesses.
✅ higher return on invested capital
✅ a business can grow in scale 100x, real estate cannot
But the world's richest people all own a ton of real estate.
and, "They're not making more land" I'm often told.
So I've been saving my cash, waiting for the opportunity where I can invest in Real Estate with the return profile I want.
And I've found it.
Real Estate ownership with the returns of owning a small business.
What is it?
When you invest in a hotel your downside is protected, and your upside is higher.
Downside: you own real estate in desirable locations
Upside: if you find the right operator, they can generate a lot of cash flow
A year ago I invested in a hotel operator and I've been watching them carefully. They're world-class at generating a lot of cash flow running hotels and have been doing monthly cash distributions to me.
In the next few months I'm going to invest in buying hotels alongside of them. I believe in the strategy so much I'm investing my personal money alongside my company's money.
If you want to learn about these deals when they happen sign-up here (anyone can sign-up to learn but you must be accredited to invest).
Please note: Hotels are not considered normal real estate investing. As a category they have both more upside, and more downside compared to a category like multi-family in a supply-constrained market. But this has been my favorite opportunity over the last few years of deals I've seen, which is I'm sharing it with you.
⭐️ New Company Announcement
Today we announced a new company that has been operating in stealth until now.
A few fun insights about the business:
I appreciate you reading this newsletter every week.