EP23: You Only Live Once, But You Get to Serve Twice

Federer, Nadal, Serena, Martina, McEnroe, Borg, Court, Navratilova…a roster of some of the best tennis players the world has ever known. 

But add one more name…Esther Vergeer to that list. Because she may actually be the most dominant and successful tennis player that you have never heard of. She won 148 career titles, 48 Grand Slam titles in singles and doubles, 23 year-end championships and seven gold medals. 

And she did it from a wheelchair. 

Esther Vergeer has used a wheelchair since she was 8, when an operation to correct hemorrhaging around her spinal cord left her paraplegic. So she took up tennis and shortly began to string together a list of titles that would be the envy of the tennis and sports world. 

From 2003 till retiring in 2013, Esther didn’t lose a single game. Not even one bad day. In these ten years, she had won 120 consecutive tournaments that amounted to 470 consecutive matches. And over the course of all these matches, she lost only 18 sets and was pushed to a match point only once.

Richard Krajicek, the 1996 Wimbledon champion, called her "perhaps the most successful sportsperson of all time." And with a record like hers, it’s tough to disagree. 

And surviving in your market…especially in today’s uncertain and volatile markets with the world’s challenges of the coronavirus means taking a lesson from Esther on how she approached her training…and why she thrived and won. 

It’s not about the 10X rule or playing full-tilt…it’s simply about 1%. 

Can you be 1% better than the market, your competition, and yourself? 

In this week’s episode of the Market Dominance Guys, Chris takes on through the math of this 1% and all the preparation, thoughts, and rationale behind some of the shots you need to take to survive and thrive in today’s business climate.  From a defensive lob to buy time, to a blistering cross-court forehand, there’s a shot for every situation. And dominance, as Esther knows very well, doesn’t start with doubling your competitor’s headcount or raising 5X the capital, it starts with focusing on the simple 1%. That approach – with math on your side – is more than enough. 

So welcome to the Market Dominance Guys and this week’s episode, “You only live once, but you get to serve twice.”

 

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The Market Dominance Guys are produced and sponsored by:

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The complete transcript of this episode is below:

Well, the answer to your deeper question is, how do others measure their success or lack thereof in their first two or three years or starting a business? They only measure their success against themselves. Right? Most of the time.

Chris Beall (04:05):

Yeah.

Corey Frank (04:06):

And maybe their Alexa rank or who knows whatever it is, any goofy arbitrary marketing stats. And I don't start out of the gates, knowing where the goal line is, oftentimes. I do only, in respect to what my financials are that I gave to the board.

Chris Beall (04:24):

Yep.

Corey Frank (04:25):

That's the goal line, that's a fore goal line. That's not the real goal line. Right? And that's what I think what's so powerful about what your premise is here. Is why isn't people asking about this? Is why are they being so myopic about their own business or about their own goals? As opposed to missing an entire part of the equation, which is what is the market telling you, what your goals really should be?

You may pat yourself on the back for hitting 12 and a half percent growth for the year and throwing off 10%. When the reality is that you have three or four or five other competitors. Right? That are actively taking market share that you are missing out on because you were so focused on yourself versus the market as a whole.

Chris Beall (05:11):

Yeah, that's interesting. I saw a presentation the other day. I think it was at the Sage... Big exit conference that basically said the only thing that counts, it wasn't the big exit conference it was actually an Alliance of CEOs meeting. And I have to look up who the guy is, but he made a really strong point, which is relative growth, growth rates relative to the competitors for the same customers, which means the same market are ultimately what determines valuation and that's it. Because [crosstalk 00:05:45] there's a compounding effect,

Corey Frank (05:47):

Your cohorts versus their cohorts.

Chris Beall (05:49):

Exactly. Exactly, because it's a zero-sum game. That's actually something that I brought out and I'm trying to figure out to do with this stuff. I have two, maybe three long, long, long recordings that I did solo while I'm trotting around. I took a 17 mile run the other day in Seattle and recorded this almost the entire run I recorded.

Corey Frank (06:14):

Oh that's awesome.

Chris Beall (06:15):

Some stuff. Right? And what I was trying to do was to start at the beginning of the book and get to the real fundamentals. And I didn't know what they were so they had to evolve as I was trotting along. This wasn't an exposition. This was an exploration. But what came out of the exploration was a core concept that we haven't hit on yet, and it's the concept of... Or maybe we have, but I really went deep on it.

It's like, this is why this stuff works so to speak or why almost everything doesn't work. Then I made the distinction between two different kinds of games, the games like tennis and chess that are pure zero-sum games. And if you're a little bit better than your opponent, you make them a little bit worse. If I'm better than you or you're better than me, let's have you be better than me at tennis. Not in that some general sense. We're going to go skill by skill. So your service percentage is 1% higher. Your service placement is 1% better. Your serve speed is 1% higher. You're getting the ball in play is 1% higher on a return. Your ability to hit the down the line forehand...

Chris Beall (08:32):

A, 100 matches. You're going to win 98 of them. I'm going to win two. And the reason is your 1% make me worse. Because when you hit that down the line forehand, now I have to actually get the ball back with my backhand. And if my backhand is whatever it is X. Right? You just made it a little bit worse because I've got to chase this thing down. So you've made me worse by being a tiny bit better. And then over time, what happens is I get worse. I recognize that I've got to compete and so now I try to do things that I'm not really very good at. I must. Right? Desperation sets in. And making your competitors desperate. So that's why it's such a great signal in the marketplace when a competitor tries to underprice you, it tells you that you're winning. It tells you that you've forced them into a position where you should... Whatever you're doing, keep doing that because your 1% or 2% or whatever that's causing them to lose is causing them to become desperate.

And the unit is really interesting too. I think tennis is the best example. I think the entire world of tennis is exactly like business. So a couple of players dominate the grand slams. They are just dominant. Right? If you go back over the last 20 years and you list winners of grand slam tournaments on the numbers that they've won, it goes like Federer a million, Nadal a million, nobody. Right? Occasional freak of nature. And then you go back and ask the root cause. Federer injured, Nidal [inaudible 00:10:12] Federer getting divorced. Whatever it happens to be. Right? It's always that the guy who is 1% better, who is probably really only 1% better is now for whatever reason, temporarily not 1% better. And you run into a little lucky draw. You find yourself as the US Open Champion, but you're never going to do it again. In golf it's very different.

The other players have no impact on you whatsoever other than if you get behind, then last nine holes of Sunday, you might start to do desperate things. That's the only place that converges. Golf's not a zero sum game. Everybody can score. Everybody has that the course is the course. Yeah, morning might be a little easier, the afternoon wind or something else like that. But the course is the course. But in tennis we play competitively and we play a lot of points. That's again, where it's like sales. Sales we play a lot of points. We have a lot of meetings. We have a lot of conversations. We have a lot of opportunities to choose our shot. Am I going to go after this one or this one? We can allocate our time the same way it is in tennis.

Knowing I'm running down a Fort in my forehand corner, going to the right, I have three categories of shots I can choose from. That's like I have three different kinds of prospects I can go on. I can try to hit that down the line, passing shot. I can try to put something deep in the corner, cross court my safest shot if my opponent's staying back. Because if I think I've got to recover and get back to the center of the court, I want time. And I want the longest possible distance on the other side of the net. And I want the lowest point of the net. That combination says hit this cross court shot. Or if my opponent's coming in, I recognize that situation. And I might decide, Hey I'm too far out of position to do anything, but hit a little defensive lob.

So I make my choice. That's like choosing what prospects do I go after in the marketplace. It's very, very similar and my chances of success depend on the kind of prospect for that [inaudible 00:12:16] I can choose to go after the big whale and see if I can take some share with one deal. I can say, no, I'm a little bit out of position. I'll go and do this easier mid-market play where they've already expressed some interest or I can hit the defensive lob, I can just live off my inbounds. See what happens if I go after my inbounds for awhile, but I had my choices. Right? But if the other guy's a tiny bit better than me, my choices keep shrinking. His choices keep growing. And over time, and it's not the accumulation of points. It's the fact that we get two points. They're called matches where that's the market where we win or lose.

And once we've won the match, it's over. We have the position we move forward in the tournament, the other guys out. So when we dominate a market, we move forward. We get to go try to dominate another... And when we lose, it's bad, because now we got to go enter another tournament, we have to go figure out what's wrong with our game, we have to decide if we want to keep playing professional tennis or become a coach or a commentator. This actually what happens with businesses. Right? All these other options open up in the face of failure. But that tiny fraction of being better when it's just amped and ramped allows dominance not sometimes, but effectively every time. And that's why professional tennis records look like they do. They don't look like anything else in the world. It's not the tournaments that are won that's interesting.

It's the match records. If you look at the match records of Federer, of Nadal, those kinds of people, of Serena Williams, their match records are absurd. If you took those match records into golf, it being nutty. Tiger Woods at this point would have run 130 majors, but you can't do that in golf because you can't make the other person worse. That's the deep math behind this. The linear math and therefore what do I need to do? Is actually a consequence of how markets behave. That's like, what do I need to do in order to win this tennis match? Well, I sure better get my first serve in. That would be a bad idea not to get my first serve in, but it's got to have pace in placement, but it doesn't have to be perfect because I'm at a huge disadvantage if I don't get my first serve in.

The number one thing that causes folks to lose [inaudible 00:14:45] you lose your serve because your percentage of first serves is too low. It's actually a flow rate. It's how many first serves do I get in per unit point that I play? It's like a conversion rate. So I have to do that. I have no choice. I can't go to zero. When somebody says the quality versus quantity thing, I always think, well, wait a second, if you were playing tennis, are you saying the quality of your service has to be so high you'd be willing to accept the probability of actually having it happen to go to zero. And then you're going to sit on your quality [inaudible 00:15:19] of the one perfect serve that you didn't make. Zero is a bad number, man you multiply it by other numbers you get, zero. You have to actually have volume because if you don't have volume, you have nothing statistical going on at all. You're just relying on luck. Without volume all we have is luck.

Corey Frank (15:41):

If you have volume without skill, you have the [inaudible 00:15:45] suck. And so that's a good topic for another time as well.

Chris Beall (15:50):

Yes. That's the pity pat serve. Right? Even though you're better off with the pity pet serve than you are with the perfect serve that never went in.

Corey Frank (15:58):

Yeah.

Chris Beall (15:58):

Some percentage of those, your opponent is not going to be able to do well. Just because they have to execute now, and their execution has some probability to failure, but there's somewhere in there where it's enough. Enough in a market is I have discovery meetings with 60% of the market over two years. Three years, it's like three sets. It's like that's what's going on, is I got three sets. I got to do something in those three sets. What do I have to do? Well, I know one thing I have to do, I've got to engage in real points that are played out so that if I'm better, I have a shot. If I'm not better, I got to find out sooner rather than later.

Cause I got to go get my coach to go to the practice court and we got to get some film going. We've got to find out where is it that I'm 1% less where I need to be 1% better? That's really what I'm looking for. So the insight from thinking this through and talking to myself about it was the deep math is very non-linear. The linear math is I need to talk to 60% discovery meetings. How do I do that? Well, I have to have a certain number of conversations, 20 in order to get a discovery meeting. Okay. Well the math behind that is linear. Oh, I have to have a certain number of dials, navigated dials to get a conversation. So I know roughly if I take 400 and I multiply it by 60% of my market, that's approximately how many dials I'm going to have to have in order to get all those discovery meetings.

That's just linear. Right? Anybody can do that math. That's third grade math. I multiply a number of times a number. And then I take that number and multiply it times another number I'm done. That's how many fully navigated dials I need? How long will take? Well, now I have a choice. How do I do it? I can do it with a telephone. Okay. So take that number and divide it by 42. That tells me how many man days I'm going to need. I can do it with ConnectandSell. Take that number and divide it by a 1,000. Now I know how many man days I need. That's it. I mean, there isn't anything more to the math. We're done with all the math. It's not even deep math. The deep math is in the runaway process. An avalanche can start with a pebble. Small, small thing that you can do.

I once started at an avalanche accidentally, which fortunately didn't hurt anybody. And it was doing something I shouldn't have been doing at the Monarch Ski area in Colorado. I went out of bounds on my cross country skis, way up high on the mountain that overlooks highway 50. And I'm out there on the slope and everything's nice and peaceful and quiet. I remember hearing a chickadee in the middle of winter. Chickadee, dee, dee. Mountain chickadee I thought, how peaceful. And then there was a sound. Kind of sounded like, I don't know... If you were to get kicked in the gut it sounded like that [inaudible 00:19:04] that sound, and it was just cup crystals underneath and breaking woods. There was a layer in the snow, probably about this deep that was made in these little domes they are made of ice. And they're very delicate and they're very beautiful and they're not very strong.

And when they start to collapse, all the ones around them feel it and they get weak and they collapse and then boom the whole slope goes down and then it fractures right below my skis. And I mean right below like two inches below my left ski, I'm basically right on that slope.

Corey Frank (19:35):

Oh.

Chris Beall (19:36):

And then this thing starts to happen. And by the time that thing is going, we have an airborne powder snow avalanche that covers some large amount of room. It's probably moving 120 miles an hour and it goes down covers highway 50. And thank God doesn't bury anybody. No cars at that moment. I'm up there going, Oh my God what have I done? Right. Well, what had I done? I had initiated a cascade. And in the world of mathematics, real life, there are cascades. Now then when you push a boulder off a cliff, it's unlikely to be alone when it gets to the bottom.

Other boulders will come with it because one dislodges two, two dislodge three. Nuclear fission works like that, it's a cascade. One atom splits, neutrons come out of it, they go poke themselves into other uranium atoms or plutonium or whatever you have. They make those two unstable one makes two the two are unstable and split. Oh, now I have four neutrons. And pah, pah, pah, pah. The next thing you know, a city is destroyed or you control it by absorbing some of them and but you're walking... That's why nuclear power is exciting. Right? Because you're always walking on the edge. Always walking on... It's like, "Oh, those control rods are in. But if they're in too far, it goes" and if they're out a little bit, it goes, like this. Sales... Itself isn't like this. Sales is highly linear.

Sales itself is a linear process. Or with my market. I talk to the market. I talk to individuals. I do it at some known flow rate. That flow rate is per whatever, per day. Anything that's per day is linear. Do I get more conversations tomorrow? Because I had more yesterday. Nope. I got to go get them afresh. Right? I turn the crank. It's like, if I were crushing grapes in order to make wine, I don't get to a point and say, "Hey, I crushed enough grapes yesterday. I don't need to crush any more today." Nope. Dammit the fruits still got to be crushed linearly. Right? And it goes through a linear process as I'm making wine. Linear, linear, linear. Until now, I've got all the juice and I destemmed it and done whatever else I need to do. And it sat for it's 12 hours or 24 hours, 32... However long it's got to sit in order to be like, "Oh, we're all happy. And we're all the same in here in uniform."

Then I add the yeast. That ain't linear. When I add the yeast market dominance occurs, the yeast dominates that market. Whatever other little organisms are in there trying to play the yeast goes, "No, I got a little quicker game here." Right? It knows how to make more yeast based on how much yeast is already can... Made by the making of yeast by the eating of the sugar. I know yeah there's a by-product called alcohol and a bunch of other things that come out of it, but it's a runaway. And if you watch that graph you know this is what people... Everybody uses the phrase exponential they have no idea what it means.

What it means is the more I have and the faster I'm going, the more I'm going to get and the faster I'm going to go without doing anything. That is it's built into the process itself, that it behaves like this. And nothing entails the [inaudible 00:22:50] not one thing that behaves like this, but market dominance behaves like this.

Corey Frank (22:58):

Yeah.

Chris Beall (22:58):

Market dominance is not the consequence of the linear acts and sales per se. It's a consequence of how markets work. Markets work by a process that says, "If you win one, your opponent is weaker across all future games you're going to play."