In this episode, business problem detection gets compared to parenting—screaming tantrums (missed payroll, failed closings) demand immediate response, but the skill lies in catching the initial grumbling before full meltdowns. The acquisition pipeline weakness despite record profitability exemplifies important-not-urgent problems requiring sensitive KPI monitoring before trajectory decline becomes irreversible.
Key Takeaways:
- Profit dopamine masks pipeline deterioration Record monthly profits can coincide with weakening future revenue indicators—forward-looking acquisition pipeline analysis matters more than current financial celebrations when evaluating business health.
- Early signal detection prevents five-alarm fires The first subtle indicators (decreased lead quality, longer deal origination timelines, lower hit rates) provide intervention windows before problems become crises—daily check-ins on leading indicators beat lagging metric celebration.
- Growth requirement for competitive survival Businesses must grow continuously just to maintain position as competitors advance—plateau equals relative decline when measured against expanding competition, making stagnation detection critical.
Using AI thought partners or experienced board members helps identify the mewing before tantrums—the label inside the bottle remains unreadable without external perspective on trajectory.
(Podcast transcript below)
Welcome to get serious today. Just wanted to run over a quick analogy about, you know, how do I identify the biggest areas to focus on within your business and, you know, determine which are the larger fires to figure out as much as possible. So.
Yeah, I think a lot of this can come down to, know the folks who are familiar with Formosu, like you either have a supply problem or demand problem. You know, one is always going to be larger than the other within your business. You have to determine that sometimes it can be difficult and solve that particular area before you consider, you know, putting a lot more resources on the other side. But because that can be difficult to figure out and you know, some
problems within your business are Just going to be much more apparent you know if you’re just like not able to make payroll or use have you know No money coming in no real problem like that. That’s that’s very obvious that things are
not going the best, I think anybody who’s achieved like some type of stability or some type of like reliable revenue within your business, sometimes it can be tricky to figure out, you are you still really growing here? Are you a bit more plateaued or are you then like on the route to a possible descent here? And some of these scenarios can take a while to actually play out. So you have to be really, really sensitive about where to detect
you know, the largest underlying issues of your business are the ones that demand your grades attention. And again, because like, you know, it can be hard to read the label from, you know, inside the bottle, you know, that familiar phrasing. You know, sometimes you just might be ignoring subconsciously even what the largest issue is. And so I like to liken this, you know, I’m a father of a two and a half year old daughter.
Fortunately, the tantrums have been on their descent now for a while here, you know, who’s been a parent, I mean, the first year is like almost fully crying, right? And then it starts to slowly wean off over time, maybe some fluctuations up and down. But when your kid is upset, like you really can’t ignore that, right? I will regrettably admit, I mean, there was a handful of times when
You know, my wife was out and it was just me, like even as trying to get like some dinner, I thought my kid was gonna be napping. I mean, this is when she was very young, right? More newborn stage and just like so stressed out. And then you just hear this like wailing start, like, man, can I just buy like 10 minutes? Maybe she’ll cry herself to sleep. I don’t know. You know, I have the monitor there so I can, you you’ve been turning down the volume. Like even if you turn the full volume off, it’ll show like the red bars and everything. like, oh my God, this just, it hurts.
internally to even, you know, visualize or hear your kid. Like it’s not something you can ignore for, you know, any real length of time. And it’s just like the pain threshold and pain for your flesh and blood is, you know, even if you have a high one, like it’s just, you’re going to have to go take care of your kid like sooner, sooner rather than later, even for the sake of your own sanity. Like it’s a very apparent signal that something
is wrong. And then the other could be times where they start to might maybe like grumble a little bit and maybe start to cry and say, do we know if something is starting here? But either way, like it’s another factor of like, you can just be a bit more tuned as a parent. All right, what what’s the issue? What decision do I need to make here? What action do I need to take in order to figure out how to, you know, solve the problem at hand? But you know, within business, you know, it’s not again, always going to be that
that apparent. I would say in most cases, most problems, especially the most critical, important, but not urgent problems. Like, yeah, if like a closing is going wrong and just like, know, a wire is not coming in or whatever like that is just, you know, okay, I need to take care of this, figure out what is going on here. Like that’s like the equivalent of, you know, the kid kind of screaming at the top of their lungs.
Um, but I think the bigger factors are like starting to try to figure out what are those first initial cues that are starting to happen. Um, that are a little bit, some of the grumbling, a little bit of mewing that could lead to a full on tantrum. Um, if, but you know, you could head that off if you can kind of catch it, uh, earlier on, you know, and that could be months in advance. Um, so just trying to figure out, okay, what KPI is going to be tracking what
parts of my business am I not looking at closely enough to determine where the real pain is potentially coming from and why things aren’t necessarily on that trajectory that you want to see. Because it’s just natural, any business that you have to be constantly growing in order to like…
Even stay ahead for a relative short period of time because that you know any other competitor like they’re gonna be growing Around you and past you over time. So like you have to keep up At a minimum In order to kind of keep things moving forward so like there’s always going to be some underlying problem that could grow into something much larger if If you’re not taking actions to determine what that is, so just having that acuity and sensitivity to the business
I think it’s a really, really difficult skill to develop over time. And like the larger the business you get kind of a paradox paradoxically, it becomes easier to lose sight of some of those signals or even just ignore them because you just might be sitting on just a more safe cash pile or, you know, revenue coming in. So it’s easier to just say, oh yeah, things are kind of working here, but in reality it’s like not on the best trend.
So, you for us, like an example is just, you know, we’re really trying to grow into larger purchase price deals more reliably, but, know, we also had a chicken and egg problem. We had to knock out a couple of big exits in a more difficult market in order to resupply the cash to feel more comfortable going after bigger deals without injecting a lot more personal capital, putting ourselves at a lot more risk or potentially levering up, especially in this environment that is just a high, high risk play to say the least when we
didn’t have some of the data to show, in this environment, we’re actually getting some of these larger exits. So it was a consideration there of trying to move through this dispo process, but then also realizing, you know, on the acquisitions, you know, we have a number of leads coming in, just our threshold for investing in any of these deals has just been lower. So, you know, our hit rate for
deals we’re investing in is just lower than it has been the past couple of years. And I’d say the fluctuation of leads is more questionable too, even though our brand recognition is very significant within the industry. And we get a lot of inbound that, you know, some of these deals that we’re still funding at the moment might’ve been originated even like late last year or very early this year and just took a while to like move to the front of the line. But stuff that’s actually
getting deeper into our acquisition pipeline is just much more decreased. like that to me is like, all right, you we’re about to have our most profitable month ever this month. But beyond that, okay, it’s still more of a plateau or even, you know, a descent in terms of possible revenue, possible profits in the business. So it’s like, how do I start to head this off with either opening up the flow a little bit more?
less conservative, which I really don’t want to do, or it’s like, okay, we need to jump on to some of these larger deals, potentially even a little bit quicker than I might have anticipated. Sometimes that doesn’t always feel right either. So it’s like still balancing, okay, what’s still the smartest thing to do within this business. But I’m trying to be more sensitive of like, not getting caught up with just that dopamine rush. Okay, great profits coming in right here.
It has to be more forward looking. Okay. What has our pipeline looked at? It’s just been weaker in terms of stuff that would actually filter through for us to earn more future revenue and profits on anyway. so we have to, you know, finding, find that mule. Baby before it turns into a full on tantrum and start to, you know, figure out a solution to that problem. because, know, that’s what our entire business runs on. So.
Just wanted to give you that analogy there. You know, again, I think any parent probably can understand this a lot quicker here, just because it’s such a visceral type of situation. But, you know, again, for larger or growing businesses, sometimes this can be really, really difficult to figure out. So, and that’s why I would use like AI as a thought partner, or if you have other human board members or other, you know, people who are much farther ahead of you and can…
kind of point out strategically what to look out for or really assess your business in a more thorough and accurate standpoint to help you get to that next level and avoid some of those five alarm tantrum problems that could arise and cripple you if you’re not careful or get your, it’d be a really big hole to get out of. That’s just.
Absolutely important like that has to be an almost daily check-in process of just where we at What is starting to grow in the background here? So with that in mind serious land capital for any of your funding needs Hope to see many more large deals again 150k plus purchase price would be ideal for us at the moment Zero cost review of your land deals at land daily diligence Facebook group about to hop on to a session of that now and landpricer.ai For the most reliable land pricing tool on the market
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