Smart Enough to Invent It... Probably Not

I have spoken in rooms of hundreds of people - to 200 business owners in Paraguay, to training hundreds of instructors on a bullying prevention program, to an auditorium of hundreds of educators as well as seventy-four 3 to 6 year olds (that's the most scary for some of you) at the same time. When I read about a stand up comedy class where you write jokes and perform I figured "I'll be awesome at this - I speak in public all the time and make all those guys laugh!"

Then I learned about jokes and writing jokes and oh yeah you have to memorize the jokes and they need to be making fun of people but not making anybody mad and they have to be performed and you have to time every pause and you have to keep going when a joke gets nothing but silence… (that was a lot)… and the first time I went up and performed….I was more terrified than any tournament, test, dissertation defense, anything! My hands were shaking like I was going into a live warzone.

(Side note - my 12 year old son Alden also started this class with me and he killed! "Killed" in comedy is doing excellent) - you can see our comedy at MoodyComedy.com)

That first show was November 1, 2013, at the Tempe Center for the Arts. I'd spoken in public for decades. I had never written or performed a joke. Speaking in public and doing stand up turned out to be completely different jobs.

Most people who own a business got there by being very good at the work inside it. The agency founder was the best designer at the last agency. The software founder was the best engineer on the team. Then they started their own business and found out owning it was a whole different job (like stand up was for me).

I call this the I'm-Smart Error: believing you're smart enough to invent a business system that works. Before you build one more piece of your business from scratch, ask one question: have I actually DONE this job, or have I just been around it?

If you're not sure, the list at the bottom of this post takes ten minutes. Do it before you build anything else.

Two different jobs

Most of the owners I've worked with are smart. A lot of them are very smart. They learned a craft at a high level, they can do the work, and their clients love them.

Why is the I'm-Smart Error so easy to make? When you're good at hard things, it's natural to assume the next hard thing will work the same way.

It usually doesn't work. The skills that made you great at the craft are real (and you'll use them every day), but they aren't the skills that make a business profitable.

The player who buys the team

Picture a football player. They played for years, they know the game cold, and the day they stop playing they buy a football team… and decide to be the head coach at the same time.

Now they're the accountant. The marketer. The coach. The mentor. The one managing everybody's personal psychology. Operations. Even the lawyer.

They were AROUND all of that for their whole career. The accountants, the lawyers and the marketing people were in the building, and being in the building is completely different from doing all of those jobs yourself as the owner.

Wayne Gretzky, maybe the greatest hockey player who ever lived, was a managing part-owner of the Phoenix Coyotes and then coached the team for four seasons without making the playoffs, finishing 143-161-24 (Mastey, 2024). Michael Jordan owned the Charlotte Bobcats the year they went 7-59, the worst winning percentage in NBA history (Inskeep, 2012).

Neither one of them was short on talent, work ethic or intelligence. What they didn't have was years of actually doing the owner's job.

The agency founder with a homemade system

A designer spends eight years at a good agency. They sat in on kickoff calls, watched the account lead calm down the difficult client, and saw the invoices go out every month. Then they open their own shop and build client intake, pricing and the contract from scratch over a weekend. How hard can it be? They've watched it done a hundred times.

The first client who pushes on scope shows you what's missing: no change-order process, a price built on what felt fair, and an intake process that assumes every client will act like the good ones at the old agency.

Somewhere there's an agency owner who has run the same intake and pricing across dozens of clients for years, and fixed it every time it broke. Copying that system (and asking them what broke) is a lot faster than finding out one client at a time.

The best engineer on the team

The best engineer on the team leaves and starts a company. The product is good. Then it has to be sold, and the founder decides sales is a process problem... and they're GOOD at process problems. They design a pipeline from first principles, with custom stages and a scoring model nobody has ever tested.

Sales teams have run proven processes for decades. The founder was around sales the whole time, in the building with the account executives and on a few of the calls. Did they ever carry a quota?

Why smart people try to invent it

In a series of studies, people rated how well they understood everyday things like a zipper, a toilet and a lock… then tried to write out how each one actually works. Their confidence dropped once they had to explain the steps (Rozenblit & Keil, 2002). Psychologists call it the illusion of explanatory depth. Watching your old boss run a business for years is a LOT like looking at a zipper. You've seen it work a thousand times, and you still might not be able to explain how it works, step by step.

Researchers found that people with higher cognitive ability were no better at spotting their own biases, and the bias blind spot was actually a little larger in the more cognitively sophisticated people (West et al., 2012).

Kruger and Dunning found that the people with the least skill in an area tend to overestimate their ability the most (Kruger & Dunning, 1999). A brand new owner may be a good example (they've never actually run one).

Ericsson and his colleagues found that experts (usually) got there through years of deliberate practice in their specific field (Ericsson et al., 1993). Your years doing the craft were practice at the craft, not at running payroll, negotiating a lease, marketing or sales. Each of those takes its own practice.

Michael Gerber wrote a whole book about this situation. He describes the technician who knows the technical work cold, opens a business around it, and assumes that knowing the work means knowing the business (Gerber, 1995). He argues it's why most small businesses don't work.

What the new owner says: "I've got a pretty good idea how this works." What's usually true is they've never run a business... they've watched one.

Your old boss

The person who trained you may be excellent at the craft. They may have changed your career, and you may owe them a lot. Their pricing, their sales process and their idea of what "normal" looks like may not be nearly as good.

In the industry I know best, martial arts schools, my experience is that roughly 96 out of every 100 owners never get past three or four thousand dollars a month in net income. Many of those owners (probably most) learned the business side from someone running a school the same way. The teaching got passed down, and a lot of the time the business model got passed down with it.

Your industry has its own version of that number. Even if your old boss did better than average, ask whether their business training was as good as their craft training… that'd be unusual if it was!

Execute a proven system

Use your intelligence to EXECUTE a proven system really well… not to invent one from scratch while the rent is due. Do that a long time. Bruce Lee put it this way: "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times" (Lee, n.d.).

Look for someone who has built it three or more times, in different places, with different people. Look for ten SUCCESSFUL years. That's someone who has actually done the owner's job.

The same thing holds when you hand work to someone else. On a recent performance review call, an owner's staff were calling leads for two or three days and then drifting off. The fix was the owner doing every follow-up himself for a stretch (not forever). You can't delegate a process you've never personally made work, because you have nothing to hold the other person to except a feeling that it isn't going well.

Your move

Write down the ten biggest jobs in your business. For an agency that's something like sales, pricing, client intake, scope control, hiring, delivery, billing, retention, leadership and the books. A software company swaps in product, fundraising and customer success. Next to each one, mark whether you've DONE it successfully before or were just around it.

If more than half say "around it," you're not behind… you're normal! You're exactly the person who benefits most from a system that's already been proven.

Then reply with one number: how many of the ten you marked "around it." Start your next system with one of those.

If you want to work through which ones to copy first, come talk to me. The version of this I wrote for school owners is here, and the first two errors are here.

References

Ericsson, K. A., Krampe, R. T., & Tesch-Römer, C. (1993). The role of deliberate practice in the acquisition of expert performance. Psychological Review, 100(3), 363–406. https://doi.org/10.1037/0033-295X.100.3.363

Gerber, M. E. (1995). The E-myth revisited: Why most small businesses don't work and what to do about it. HarperCollins. https://michaelegerbercompanies.com/product/the-e-myth-revisited/

Inskeep, S. (2012, April 27). Charlotte Bobcats are NBA's worst team ever. NPR. https://www.npr.org/2012/04/27/151508045/charlotte-bobcats-are-nbas-worst-team-ever

Kruger, J., & Dunning, D. (1999). Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments. Journal of Personality and Social Psychology, 77(6), 1121–1134. https://doi.org/10.1037/0022-3514.77.6.1121

Lee, B. (n.d.). "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times." Bruce Lee Family Archive (authenticity confirmed by Snopes, 2022). https://www.snopes.com/news/2022/02/19/bruce-lee-value-of-practice/

Mastey, R. (2024, January 22). The story of Wayne Gretzky's coaching career with Coyotes. The Hockey News. https://thehockeynews.com/nhl/utah/game-day/the-story-of-wayne-gretzkys-coaching-career-with-coyotes

Rozenblit, L., & Keil, F. (2002). The misunderstood limits of folk science: An illusion of explanatory depth. Cognitive Science, 26(5), 521–562. https://doi.org/10.1207/s15516709cog2605_1

West, R. F., Meserve, R. J., & Stanovich, K. E. (2012). Cognitive sophistication does not attenuate the bias blind spot. Journal of Personality and Social Psychology, 103(3), 506–519. https://doi.org/10.1037/a0028857