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I get very real in this episode. I share some information about my situation that I wasn’t planning on sharing.

We talk about how prevalent scarcity mindset is and how it affects your mindset and performance in all areas of life. This is a very real thing that many people deal with and have trouble getting ahead of.

Getting enough resources is also not a cure for scarcity mindset. This has to be dealt with at every level and it must be consistently fought off.

But understand that scarcity mindset is a way you choose to operate. It’s a mindset that you feed. Your circumstances do not determine it. You do.

I share in today’s episode how I’m able to keep my mindset in a place of abundance regardless of the external circumstances.

Highlights, Takeaways, Quick Wins
  • Scarcity Mindset encourages compromise.
  • Change the way you’re thinking while you’re in the circumstances you don’t want to be in.
  • Scarcity Mindset will only breed more of the same.
  • Decide what you’re going to do before you get there so you won’t make scarcity-based decisions in the moment.
  • You can get an abundance mindset while you’re in physical scarcity.
  • There is no such thing as job security.
  • Protect your ability to say no by finding an alternate source of income.
  • Remove the things in your life that are fostering Scarcity Mindset.
  • Offset negativity with five times that amount of positivity.
  • Your situation will change to reflect your mindset.
  • Get around people who support an abundance mindset.
  • Finding valuable relationships takes investment.
  • Teaching reinforces the knowledge and beliefs you have for yourself.
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Show Notes
  • 01:58 Sean: Scarcity Mindset is prevalent. It’s a very real thing that a lot of people are dealing with, and it affects every part of your life. It affects everything you’re doing. We’ve talked about this before, but it bears repeating and going into again. With the Value-Based Pricing course that I’m doing, we dedicated an entire lesson to it. It affects so many things. If you want to price well, price on value, and get high value clients, you can’t have scarcity mindset. It’s the kryptonite to all of these good things that you want. It’s a breeding ground for compromise.
  • 02:47 Scarcity Mindset encourages compromise on your morals, your professionalism, and what you believe you should be able to charge. We’ll talk about this later, but having enough resources is not a cure for Scarcity Mindset. Felippe was saying in the chat room earlier that he has six months of runway, and he’s still thinking, “What about after that?” You can’t really get ahead of it, and that’s what we want to talk about today.
  • 03:23 Ben: It’s this really complex animal. Like Sean said, it’s not just about circumstances. You could be a person who’s very risk-averse, and you have a year or two years of runway, but because of how concerned you are with what happens after that, you’re dealing with scarcity. On the other hand, you could be a person who loves taking risks, who’s all about “Let’s just see what happens,” and you have less than a month of runway, and you do just fine with that. In some ways, it’s kind of personality based. The person with less than a month of runway will face decisions where they will be forced in a direction because of their circumstances. Circumstances play a role, but it’s not the only factor.

What Is Scarcity Mindset?

  • 04:38 Sean: Scarcity Mindset causes a lot of problems, and it prevents you from getting high value clients, thinking long term, and from making good decisions without compromise—taking any kind of good risk. The weird part is that Scarcity Mindset prevents you from getting out of Scarcity Mindset. The way out of Scarcity Mindset is to change your mindset. You have to change the way you’re thinking while the circumstances you’re in are different than you want. You can’t wait until the circumstances change to say, “I’m going to have a good mindset now and I’m going to be happy,” because that is what gets you out of Scarcity Mindset.
  • 05:23 When you’re in Scarcity Mindset, keeping that way of thinking holds you down and prevents you from getting out of it. You have to preempt it and change the way you’re thinking while you’re in the circumstances you don’t want to be in. If you’re wondering, “Do I have Scarcity Mindset? How do I find out if I have it right now?” Most people have it, are dealing with it, or struggle with it throughout their lives. As their circumstances change, they’re still dealing with it. You have Scarcity Mindset if:
    • You feel desperate.
    • You’re compromising on your morals.
    • You’re compromising on your professionalism.
    • You’re taking on the wrong clients for money.
    • You feel like there isn’t enough time in the day.
    • You constantly worry about cashflow.
  • 06:17 These are signs of Scarcity Mindset. I recognize myself in these and see areas where I struggle with this.

Scarcity Mindset will only breed more of the same so you can’t get ahead of it.

You have to completely change the way you’re thinking.

  • 06:40 Ben: When I think about the circumstances, I think of somebody who is in Scarcity Mindset, who is taking on bad clients, and they may even be doing pretty well. They may be paying their bills with extra spending cash. Maybe they’re able to put money in savings, but they hate the work they’re doing and they feel trapped in that. It may not even be that you’re afraid of running out of money. There are bad clients for days.
  • 07:15 Because you’re taking them on, they become your clients, and you’re responsible for that. You’ve got clients for days who will work with you in a way that causes you to compromise your values, and you may be able to make a very good living doing that. You won’t feel fulfilled in your work. You’re burnt out and you hate what you’re doing. That is a form of scarcity that a lot of people don’t consider because the focus isn’t on the money aspect of it. It’s not always just about the money.

Good Circumstances Can’t Prevent Scarcity Mindset

  • 07:54 Sean: Scarcity Mindset could be keeping you in a place you don’t want to be, even if the money is there and the money is good. Scarcity Mindset could take the form of golden handcuffs. You’re in a job that pays really well, so you don’t want to leave, but you don’t like the job or the people there are terrible. They’re stressing you out, you don’t like your life, you dread going into work, but the money is really good. That’s what we call “golden handcuffs,” but really, it’s a form of Scarcity Mindset.
  • 08:33 It may not be scarcity in terms of money, but it still could be. Like Felippe was saying, no matter how much money you have, you can still be in Scarcity Mindset. You can have millions or billions of dollars and be worried about it going away. What if it’s not there next year? What if I don’t have as much to live off of to continue to support my lifestyle?
  • 08:58 Ben: In that case, scarcity can come in the form of, “I hate this so much. I hate the way I’m doing business and the kind of clients I’m working with, but if I change my standard and raise the bar, if I start saying no, then I’m not going to be able to pay my bills.” That’s the scarcity. It is attached to money in that sense, but you can be doing really well money-wise serving the wrong kind of clients and feeling trapped in that. You don’t know what’s going to happen if you start saying no.

Getting Out of Scarcity Mindset

  • 09:43 Sean: You have to start by making decisions. That may look like making decisions about how you will make decisions. In the moment of making a decision, you might be tempted to compromise because of Scarcity Mindset. If you previously made a decision about how you will make decisions, you have a guide to operate by. I recognize this scenario, and previously, I said that when I get to this scenario, this is how I will respond. Regardless of what my scarcity mindset is telling me, this is how I’m going to respond.
  • 10:25 Ben: It’s hard to make decisions, even that you would agree with in the long term, in the moment if you don’t have that kind of support built in. I’m talking about your own thoughts before you get to that situation. In the moment, the thing you experience the most are your feelings about it—whether you feel afraid. You tend to look at the worst case scenario. This isn’t true for all people. Some people are more optimistic than others, but we all have this negative bias. It serves us well in some cases, but in other cases, it causes us to not assess the risk objectively.

Unless you already decide what you’re going to do, it’s easier to give in to your emotions and make scarcity-based decisions.

  • 11:32 Sean: You always have the power to make decisions (Related: e250 Own Your Life by Taking Responsibility for Everything). That is always within your control. You can’t let your circumstances affect the way you think or the mindset that you have. The mindset has to be separate from the circumstances, and you can get an abundance mindset while you’re in physical scarcity.You can also have a scarcity mindset while you’re in abundance. It is independent, but we tend to tie them together. We think, “I don’t have the resources, so this is how I have to think and the mindset I have to have.”
  • 12:13 Even though abundance may not be manifesting itself yet, the mindset will get you out of the circumstances you’re in. That’s something you have to choose right now. The first thing you have to choose is to stop thinking in a way that reflects your circumstances. You are creating that scenario around you. If you want it to change, you have to start with the mindset.

It will take time, but the situation around you will change to reflect your mindset.

  • 12:50 Ben: As Sean was talking, I got this picture in my head about the idea of runway, however long that runway is. Scarcity looks like you being able to see where the end of the runway is, and all you have is a question of, “By the time I get there, is there going to be more runway? How is that going to happen?” The abundance mindset says, “I know where the end of the runway is, and there are more materials out there than I could ever need to continue building that runway out. All I have to do is get the materials that are already there in abundance and continue building that out.”
  • 13:44 I’m experiencing this right now, because I’ve got a certain amount of runway. I know what the end of that is, and I oscillate back and forth between feeling nervous about that and asking that question and feeling excited about that. I get to keep building that! When I think about it that way, because of the shift in my mindset, I’m looking for opportunities to keep building that and I’m more aware of opportunities to make that possible. That mindset has the effect of making us more aware of the opportunities around us.
  • 14:29 People say that some people have more opportunities than others, and the reality is that we’re all faced with the same opportunities, but our mindset can cause us to not see them or to be very aware of them. When we have Scarcity Mindset, it’s like we have blinders on. We don’t see the opportunities around us because we either don’t believe they exist, or we’re so focused on the problem and the fear that we can’t see them.

Choosing an Abundance Mindset

  • 15:07 Sean: I want to get real for a minute, and this isn’t something I planned to share on this show. I think people get the wrong idea about me. Where do you think I’m getting my confidence from? I’m looking at Cory, because I want to hear what Cory thinks. Do you think I experience Scarcity Mindset? Do I experience those struggles, or do you just see the confidence? I’m about to share something that I wasn’t planning on sharing.
  • 15:51 Cory: I think you do deal with Scarcity Mindset sometimes, Sean. Those thoughts can come in, and it can get a little bit scary, but in the end it’s all about choice. You know that more than any of us. It’s a decision to choose not to fall into that.
  • 16:10 Sean: Cory hangs out with me. We’re in the same room every single day, all day, and I talk with him about stuff. I’m going to share this on the show because I want people to realize where I’m coming from here. I am in this place right now. I’m in circumstances of scarcity, but my mindset is an abundance mindset. For the past six months or so, I’ve been in circumstances of scarcity, but my mindset is on par. We’re good to go. I’m about to share this because I think people don’t get it. They don’t really understand the reality of what I’m talking about here. I’m literally living it right now.
  • 17:09 I have a team of, including myself, eight people that I have to pay. Part of the reason I didn’t want to share this isn’t that I lack the confidence, but it’s because I don’t want my employees to worry. At seanwes, we’re about transparency. You could work at a business and not know what their cash situation is. If you like being in the dark and you feel comfortable there because you can’t see the dangers around you, then go to any other job, because they won’t tell you what your situation is. You could be let go the very next week, and you won’t know. I’m real here because these are the realities. This is life, this is business, and this is how it is.
  • 18:05 There is this facade of job security when you work for a company, because you don’t know all the details. It’s not your business to know it. You do your job and don’t worry about it until you’re fired, let go, or the business goes under. You’re inside the fort, and someone is fighting to protect the fort. There are dangers all around, and you don’t know. The person running the business knows. I say, “I don’t mind if the people in the fort see the realities outside, because those realities are there in every other business.” You just don’t get to see them.
  • 18:45 The reality is that the amount of the money we have in the bank covers about one month of payroll. How is everbody feeling? I want to get really real here. It seems sometimes like you think this is easy for me, that I’m super confident. I’m in this situation. It’s the same exact place that you’re in right now, where you’re thinking, “I don’t know about April. I don’t know about May.” Neither do I. I have a plan and an abundant mindset.

I wake up every day with a fresh 24 hours and a pair of hands, and I have resources, knowledge to share, and work to do.

  • 19:45 I have an abundant mindset. I say, “I’m going into this month and we’re going to tackle this month. Next month, we’re going to tackle next month.” We’re going to bust our butts, work hard, and get some traction, and we’re going to get ahead of this thing. I’m not going to let my circumstances dictate my mindset. I’m not going to let my circumstances prevent me from talking about an important subject, because it’s very real for me.
  • 20:11 Ben: I’m in a similar situation in terms of the amount of runway that I have. I definitely don’t have employees, but I have a family. That’s what I admire so much, and it’s inspiring. I know some of this stuff. Sean shares this stuff with me off of the air, and I appreciate that he’s sharing it here, too. A lot of people need to hear this. There are days when I wake up and it’s difficult for me to get out of bed because I’m thinking about the end of that runway. I said briefly that I oscillate between worrying about it and feeling like I have resources.
  • 21:08 That’s a choice. When I wake up in the morning, I may feel a certain way, but I get to choose what I believe. There are two stories in both my case and in Sean’s case. The first story is, we run out at the end of this month and we’re not sure what’s going to happen. I have a plan, but I’m not sure how that’s going to go. That story can take you to a place where all you’re thinking about is the end of the month and what’s going to happen at the end of the month. It’s taking your focus off of three months from now and six months from now, but those things that you’re working on for three and six months from now are opening you up to opportunities that serve you now, that will make next month and the month after that possible.
  • 22:10 It gives you a momentum that you need. It’s not just how you feel, but which story are you going to choose to believe? The story I want to believe is like Sean described. I’ve got knowledge, skill, and value to provide. I’ve got creativity.
  • 22:33 Sean: I like what Katie said, “My dad used to say, ‘The only security you have is between your ears.'”

Job Security Is an Illusion

  • 22:46 Ben: The illusion of having job security has a pratical element when it comes to scarcity, circumstances, and being smart about the path you’re going to take to being able to pursue your passion and the things that you love. Still, there’s a false sense of security in having a job, and the sooner you see that for what it is, the sooner you free yourself up to choose an abundance mindset.
  • 23:30 Sean: If my employees want to leave because they don’t know what’s going to happen here, that’s totally up to them. What I hope they take away from this experience is that there is no such thing as job security, and you need to control your mindset separate from that.
  • 23:57 Ben: Jenny says, “I always interpreted confidence in scarcity or the entrepreneur’s ability to be confident and take risks as caming from a proven track record. It made me feel that this wouldn’t change for me until I obtained a certain level of a successful track record. Listening to Sean, I’m realizing that as you scale, you encounter brand new challenges, and therefore your track record probably has little to do with your confidence. It’s more the mindset that scales with you.”
  • 24:39 Sean started out with no employees. It was the same kind of thing. He still had to support himself and Laci, and as his business grew and he started taking people on, it was more of the same thing. It just looks different. The potential for Scarcity Mindset never goes away.
  • 25:04 Sean: Cory, after you hear me share that, what’s going through your mind?
  • 25:09 Cory: It’s nothing new to me, honestly. It’s not like I have all these backup plans. I’m always ready for that. There is no such thing as job security, and whatever fort you’re in, somebody’s busting their butt trying to make it happen. I love that, as an employee, I get to see behind the scenes of that.

As an employee, knowing that there is no security makes me feel more secure, in a way.

  • 25:41 Sean: There is a very specific plan. It’s not like I’m saying, “I hope we’re around in a month!” The reality is, objectively, the resources are scarce, and it’s because of all these long term investments we’ve put in. Personally, I believe we’re going to see returns on a lot of those things in the near future. It’s been a matter of surviving while we wait for those long term investments to come back. There is a plan, at least.
  • 26:21 Ben: This may be a little bit cliche, but somebody posted a cartoon picture on Twitter. It had two panels, and on one panel, it had a guy sitting on a chariot with people pulling him. He had his megaphone, and he was barking out orders. In the other panel, that same guy was at the front pulling. The caption was, “The difference between a boss and a leader.” In the fort scenario, you don’t see what’s going on, but when the boss is trying to keep everybody in the dark, it’s like he’s fighting, figuring out what to do, and coming into the fort to bark orders. The employees don’t have any context.
  • 27:30 “What are we…? I don’t know why you’re having me do this, so I guess I’ll have to trust you and trust the plan.” What I like about transparency is that it’s showing everybody not only how their roles directly impact the situation, but it’s also very easy to see how you’re the one in the front pulling. Whether you have employees or a family you’re taking care of, part of defeating Scarcity Mindset comes from making the choice to be the one at the front of the line, pulling along, and not having a passive role in the situation.
  • 28:26 Sean: The people you surround yourself with is the biggest part. That’s key. I like what Ben said about transparency giving purpose and clarity to people’s roles. They see exactly how their role impacts the bottom line. If I were to give any piece of advice on this, you have to communicate your mission. Communicate where you’re going, what the plan is, and how your employees can get on board with that. When you do that often, you have to do it until they’re telling you the same thing back. People don’t notice things. They don’t remember things, so you have to communicate and over-communicate again and again and again.
  • 29:17 The people on my team believe in the mission. With the transparency, they see where their role plays into where we’re going and what the plan is. Cory Miller in the chat right now says, “Knowing the truth about our company doesn’t make me scared. It makes me intentional and focused.” I’ve noticed. He is focused. He gets the work done. He’s determined.
  • 29:44 Ben: That’s definitely a byproduct of the way Sean has positioned himself as a leader.

Protect Your Ability to Say No

  • 29:53 Sean: If you’re feeling too desperate right now to say no to bad clients, bad opportunities, or less than ideal situations, things that cause you to compromise on your career, your professionalism, or what you should be charging, the answer is not to say yes to bad opportunities. You’re tempted to say yes, because you’re in Scarcity Mindset. You say, “I can’t afford not to take these on. I have to take these on.” The answer is to say no, because you’re finding an alternate source of income.
  • 30:36 Getting out of Scarcity Mindset looks like setting yourself up and protecting your ability to say no. “No” is how you get out of Scarcity Mindset. It’s the opposite of what you want to do, because when you’re in Scarcity Mindset, you want to take everything. You’re hunting and gathering, and you’re looking for all the food you can get. Food is scarce, and there’s a bush here with a bunch of berries on it. The berries are poisonous, but you’re in Scarcity Mindset, so you want to say yes to something that’s bad for you because it feels like there are no other options.
  • 31:12 You’re going to kill yourself. You can’t afford to say yes. We talk about this a lot (Related: e140 Supercharge Your No With a Reason for Saying Yes). Your yes is expensive. If you’re in Scarcity Mindset, you can’t afford to spend a yes. That’s the way you need to be thinking. Your yes is your only thing, all you have going for you. You don’t have resources. All you have is your yes, and every yes is a thousand nos.

When you say yes to mediocre opportunities, bad clients, and things that compromise on your values, you’re saying no to everything else.

  • 31:55 Ben: When I was nine, we went to Disneyland as a family. We went through the entire park and had a great time. It was about dinner time, and we were in line to get some food, but I was so thirsty because I hadn’t been drinking water along the way. They have water fountains all over the place, but we were in line, and I was so thirsty that I didn’t even want food. All I wanted was water. We went through the line and I finally drank some water, and a few minutes later I realized how starving I was. If I had kept myself hydrated along the way, I would have realized how hungry I was and I would have taken the opportunity to get the meal I really wanted to get.

Prioritize Cash Flow (Most Likely: Get a Day Job)

  • 33:03 Sean: You have to cover your bases. You have to stay hydrated if you want to stay alive, and you have to stay hydrated to even know that you’re hungry and need food, which you also need to stay alive. In real life, that means that you have to cover your financial bases. Focus on your cashflow, which for most people, looks like getting a day job. If you’re constantly on the aggressive forefront of trying to make ends meet and if that scarcity is forcing you into a Scarcity Mindset, it will perpetuate itself.
  • 33:47 You won’t come out of it. You’re just going to be spinning your wheels. You’ve got to get that traction and that foundation somewhere to free yourself up and give yourself the ability to say no. If you don’t have something covering your bills, bringing in consistent income, 100% of your bills, you’ve got to free yourself up. If you have this one retainer client who covers 30% of your bills and you make up the rest, it’s not enough to free you up so you feel like you can say no.

Most people protect their ability to say no when they find an alternate source of income.

  • 34:32 Depending on your situation, that may be in your business. If you’re being really aggressive, trying to take your business in this direction, wanting to launch this product line, and it’s just not working but you’re putting all of your effort, energy, and stock into getting revenue from this source, your runway is being depleted and your cash reserves are going down. The answer may not be to continue going in that direction where resources are scarce. The answer may be to retract, retreat, and go back to something tried and true, something you’ve done before that has consistently supported you, even if that’s not a thing you want to be doing now or forever. It’s about protecting your ability to say no.
  • 35:21 All of these compromises are like you’re on a ship, and you’re trying to go somewhere, but the ship is kind of rickety. It needs some repairs. You should take a break and go to the dock and get the repairs. Some piece of the side paneling goes out, and you say, “Oh no! Let’s nail a sheet of plastic on it.” You’re repairing all these little parts of your boat as you go with random things that you have lying around, and you’re compromising the integrity of the boat. As you go forward, you’re weakening your infrastructure to the point where you’re going to sink yourself.

At some point, it makes sense to retreat back to something that is tried and true, that is able to support you and that can give you the ability to say no to bad opportunities.

  • 36:25 Ben: When you’re in Scarcity Mindset, maybe you can work with one client without compromising your values or your process because they happen to agree with all of those things. The next client doesn’t quite agree with everything, they’re 80% perfect as a client, but that 20% compromise is a chink in your armor. Eventually, you’ll sink your boat.
  • 37:46 Sean: Even with this podcast, I feel a tendency to go into scarcity. This is episode 256. If we want to make it to 1,000, that’s a lot more episodes. Part of me thinks, “Do we have anything valuable to say?” We touch on this topic sometimes, but we’re dedicating a show to it for the third time today, and I feel like this is a very different show than we did 100 episodes and 200 episodes ago. You have two hands and an ability to work—today, we have our voice and what’s between our ears. We’re creating a podcast that’s able to help people. I don’t know what the next 800 topics are, but that’s okay. I’m going to continue showing up. It’s about today and this month. The answer to this scarcity situation is to find an alternate source of income.

Who Is Influencing Your Thinking?

  • 38:54 To defeat Scarcity Mindset, you have to remove the things in your life that are fostering it. Those could be time wasters, but it could also be people who are having a negative effect on you. Part of my ability to be so resilient in my abundance mindset, given the physical circumstances around me, are the people I surround myself with. I do not surround myself with a single person that is negative, that pulls me down into scarcity. As soon as I recognize that, if I ever do, I cut them off. I can’t have you pulling down my ship. I can’t have you sinking my mindset.
  • 39:40 Everyone around me, everyone that I spend any time with, my entire day and all of my time, is people who are building me up, people with an abundant mindset. They are positive. You have to surround yourself with these people. There are some people who have people around them that are negative. They hang out with groups that talk in terms of scarcity. They talk about how they price. You listen to podcasts where people talk about arbitrary rates, rates not based on value but on what you hope to get away with this time. “I guess this client isn’t that great, so maybe you should charge them a little bit more to compensate for the fact that you’re taking on a bad client.” If you’re listening to podcasts like this, you’re tanking yourself.
  • 40:31 You’re sinking yourself. If you’re hanging around groups of people who are talking in terms of scarcity, you’re sinking yourself. If you’re listening to these messages, you have to audit your surroundings and the people around you. You cannot afford people who are taking you down. One of the next episodes coming up is about how to get your spouse on board 100%. That’s another example. If someone very close to you is going in the opposite direction, you’re never going to get out of scarcity or reach your goals. You have to all get on the same team. Everyone, work together! We’re going to repair the ship and hoist the sales. We’re a team, and we’re going to do what it takes.
  • 41:33 Everyone knows we’re in the middle of the ocean. Everyone knows the circumstances, so it’s not going to help if we’re trying to go in different directions. We are all on a team. The importance of that is huge. It can be your family sometimes. It’s not just friends, acquaintances, or work buddies. If you have bad work buddies and it’s affecting your mindset, get out of there. Get another job. Its not worth it. If those people are your family, you can’t always cut out family. We’re not saying that you should never speak to your mom again, never listen to your dad, or don’t call your brother.
  • 42:14 Sometimes, if it’s an abusive relationship, then I would say that you should cut it off, even if it’s family. If it’s abusive, don’t tolerate that.

If negativity is coming from your family, offset that negativity with five times that amount of positivity.

  • 42:34 Ben: When I brought up that same idea of offsetting with the spouse, Sean cut me off and said, “I have to disagree with you.” This was a few episodes back (Related: e249 How to Be Successful (and 3 Things You Should Stop Doing Immediately)). He got really fiery, and that’s why I’m really excited about the episode we’re going to do about getting your spouse on board in a few weeks.

Sunk Cost Fallacy

  • 42:54 To me, it’s really similar to the idea of you pursuing your passion and getting these holes in your boat. The best thing for your passion, for your dream, may be to stop pursuing it right now so that you can fix your boat. When it comes to your spouse, the best thing for pursuing your passion, building your business, or whatever you want to do, may be to set that aside so you can focus on that relationship. I know that we’re going to go in more depth on that in the episode, but the value of putting something aside so you can really set yourself up is tremendous. A lot of people feel like that’s giving up. They think, “If I stop doing that, I’ll lose all of my momentum.” They think about the time, effort, and money they’ve already put into it, and they’re afraid that’s going to be sunk cost.
  • 43:59 Sean: Sunk Cost Fallacy is really bad. People get that with clients a lot. They say, “I’ve been talking to them for a week now. We’ve had a dozen emails, and now I’m finding this issue that seems like it’s going to make the client relationship bad.” You’re going to want to push past it because of Sunk Cost Fallacy. You’ve put so much into a bad investment that you feel inclined to keep going. That’s why people have gambling problems. They think, “Well, I’ve already spent so much.”
  • 44:30 Like Justin and I talk about in Value-Based Pricing, one red flag and you’re done. That’s it. Disqualified. The 80% good client? Done. 99% with the one red flag? Done. I always say that red flags are like roaches—for every one you see, there are 50 you don’t see. Be happy that you saw that red flag, because that’s telling you that this is not a good fit. Do not proceed.
  • 45:22 Ed said, “As someone who isn’t employed at seanwes, I benefit from Sean being transparent about what’s going on. Him sharing where and what went wrong allows me to approach hiring my employees differently and making sure I have a runway built. In our last team meeting, we went over money and making ideas to avoid taking out a loan or having to find an investor. It’s a lot of work, but we have a dozen or so products and courses in the pipes now, so keep sharing. It benefits us all.” That’s good. That’s why we do this.

Surround Yourself With the Right People

  • 46:03 Because Scarcity Mindset doesn’t go away automatically, you have to be around people who are also actively avoiding Scarcity Mindset. I could not be in the situation I am right now or in the mindset I’m in right now if every other person I’m surrounding myself with wasn’t actively avoiding Scarcity Mindset. That is the only explanation for why I have such clarity in abundance mindset, even given what’s in the bank account and our situation here. That’s how important it is.
  • 46:41 Do whatever it takes. Maybe it means that you have to stop hanging out with that group of friends on Tuesday nights, stop visiting that friend on Sundays, no more going out bowling with this other group of friends, or spending every weekend with the family or the parents. If every time you drive home, you’re bummed out, depressed, and feeling defeated, you have to audit yourself. Maybe it looks like finding other people who are like-minded in your own city and meeting with them. Maybe it looks like finding an accountability partner.
  • 47:24 Maybe it looks like calling someone on Skype who’s across the world, and it’s 1am your time when it’s the middle of the day for them, but you set aside time for this Skype call, because they’re the right type of person. Maybe it looks like joining the Community and getting around people where this kind of talking is normal, where it’s part of our language.

You have to get around people who support an abundance mindset, otherwise the negative people will take you down.

The Community

  • 47:53 Ben: When the Community launched and we started to have more interaction in the chat, I can definitely point to that as a turning point for me. It’s not that those kind of positive people weren’t available to me otherwise, in my normal, everyday interactions, but I wasn’t being very purposeful about seeking out those people. I had a mix. On the one hand, I had people who were pretty negative and weren’t thinking in abundance mindset. I had other people who were in abundance mindset in some areas, but had Scarcity Mindset in other areas.
  • 48:39 Because I wasn’t intentional about that, I didn’t have that for myself. When the Community started and I was having those interactions daily, when I thought about sharing and complaining about something, it caused me to think twice. I can complain about something here and people will set me straight, but I already know what they’re going to say. It caused me to think differently and to audit myself a little bit more. I appreciate that about the Community.
  • 49:19 There was one time when I went and I did complain about something, and I got set straight in a good way. You need people who will be honest with you, too, people you can go to with the things you’re struggling with who will be honest with you and call you to that better version of yourself. They remember who you are. They know who you are, and they’re not going to let you forget it.
  • 49:53 Sean: Maybe the Community is always going to be an investment for me and I never actually profit or make money from it—I started it at the end of 2013 and now it’s 2016, and it takes a lot to maintain. We’re not experiencing exponential growth. If we took on investors, they wouldn’t be happy with our situation. They would say, “You need more subscribers, more recurring revenue. You need people coming in all the time.” I see this a lot with marketers. They have these membership sites, and they do this $1 trial.
  • 50:41 They get affiliate people to promote it. I’m on several people’s lists, because I study this stuff. I try and learn marketing and bring the good things from what I’ve learned to this show and leave the bad. I’m on different people’s lists, and I’ll see a bunch of promotions for one membership. They all say, “You’ve got to join this place! It’s $1, and it’s super good!” They’re getting part of the revenue. It’s $1 to get in and then they auto-bill you the full amount. There are probably thousands in these other memberships, and it’s all about numbers to them.
  • 51:25 It’s all about revenue and getting people in. For us, it’s so counter-intuitive, because we’re not making it easy. We talk about it, but there’s never any sale or promotion. We never say, “This week, it’s half off. Next week, there will be a free trial.” The Community is always there for whenever you feel like taking yourself seriously and getting around people with the right mindset, who will keep you accountable, and who will call you out. The Community is like that because we’re filtering out. We say, “You can come and pay money to be here when you’re serious about it.” The Community is an incredible group of people that I’m proud to know.

I will continue investing money to make the Community available just because I want to be around these kinds of people.

  • 52:31 Ben: Sean, if you were able to quantify all of the benefits and turn that into dollars and cents, I would say that you’re probably getting well over what you’ve invested because of the relationships and the kind of people you’ve had access to, to bring onto your team. You can’t put a dollar figure on those intangible things, but I think that’s true. Sean has spent in the six figures on this Community.
  • 53:14 I’m arguing that if he could quantify the benefits he’s received, he would have already made that investment back. You can work out the numbers on your own later if you want to, Sean, but at the very least, you’ve gotten close.
  • 53:43 Sean: You’re talking about indirect value, right? Not revenue?
  • 53:47 Ben: I’m not talking about revenue. I’m talking about indirect value, and that’s why I mentioned the people Sean’s had access to who were part of the Community and who he has now made a part of his team.
  • 54:01 Sean: That’s an excellent point. I didn’t even think about that. I do think about it in other contexts, but I don’t want to hire anywhere but from the Community. When you look at the people I’ve gotten from the Community, because I know they’re serious and they have the right mindset, that’s invaluable.
  • 54:22 Ben: You almost can’t put a dollar figure on that. I compare that to the person who spends the regular monthly price or purchases a full year of membership and the amount of value you get out of that, both direct and indirect. There are people who, in the first month, because they were part of the Community and they were exposed to these relationships and ideas and they were able to shift their mindset, they made changes that had tangible results for them, that were much more than the investment they were making.

The Right Relationships Are an Investment

  • 55:12 Sean: For the people listening who can’t afford to join the Community, that’s okay. I’m not bringing the price down or discounting it, because it’s severely under-priced. If anything, I may increase it in the future, because it’s severely under-priced. Right now, it’s at a sweet spot, and if you can’t afford it, I don’t want you to join. I don’t want you to go into debt or put it on the credit card. I want you to listen to the past 256 episodes and apply what we’ve been talking about and get to a better place.
  • 55:43 Or, maybe, if you’ve got $39 going towards things that are wasting your time and you’re spending four hours a night watching Netflix, maybe you could put it towards this and get your life back on track. If you are interested, you can go to seanwes.com/community, and we would love to have you join us.

Whether you join the seanwes Community or not, finding valuable relationships takes investment.

  • 56:09 Ben: Whether that’s a financial investment or investing time and getting to know certain people, it takes an investment either way. You’ve got to expect that. You’re not going to look at the pool of people you have right now and say, “I’ve identified this person,” and immediately strike something up. You’ve got to invest in that relationship and take time.
  • 56:49 Sean: It’s an investment upfront to find the right people, and even after you find the right people, it’s an investment of time. At first, the investment is time or money. It can be time, because you have to spend the time finding those people, or it can be money, because we’ve attracted those people, and they’re all here in the Community. Even after that, however you find those people, it’s an investment of time. There are a lot of people listening right now on the podcast who are Community members, and they don’t invest time in the Community.
  • 57:17 You’re not going to get any value out it. People think that communities are a time sink. They think, “I don’t have time to meet people in my local city and I don’t have time to have an accountability meeting on Skype with someone across the world who has the right mindset,” but you don’t have time not to. You’re just spinning your wheels.

Teach Your Way Out

  • 57:47 You heard our stories. You realize the situation, the circumstances we’re in. Part of being able to operate this way and have an abundance mindset is the people around you, but the other part is that we’re on a show here where we have to talk about it. There are different stagess you go through when you hear a message. The first time you hear it, you don’t really hear it. The second time you hear it, you don’t really hear it. The seventh time you hear it, it kind of clicks. It’s the Magic of 7, but that’s just head knowledge. It’s not experiential knowledge.
  • 58:25 Gradually, it will start to come out of your mouth. You’ll start speaking a certain way. This is true with how you internalize anything, not just Scarcity Mindset. Eventually, you start speaking it, but you can even speak things that you’ve heard and regurgitate them without truly internalizing it, believing it, or acting out of it. If you want to teach about pricing on value, having confidence, public speaking, getting in front of a camera, being good at podcasting, starting up your own marketing firm, or whatever it is, when you teach, there are so many benefits. You are forcing yourself to go through everything in detail.

When you teach something, you reinforce that knowledge or belief for yourself.

  • 59:18 You’re advancing the speed at which it becomes real to you because you’re speaking it. Right now, we’re in these circumstances of scarcity, but as we speak about it and we teach other people the mindset that we have and the way we’re approaching this, we’re making that more concrete for ourselves.
  • 59:59 Ben: I love that we pick topics ahead of time, because I look at the schedule and see what we’re talking about, and it gives me time to think through those things and ask myself, “What do I really think about this? How would I talk about this?” When I get in this room and we’re delivering this podcast, I have these thoughts and ideas. Sometimes, what I say is well-formed, from experience, but other times, it surprises me a little bit. That happened to me today when we were talking about runway and the difference between thinking about things in terms of scarcity vs. abundance.
  • 1:00:46 I’m talking about the picture of having all of the tools and the resources I need to continue building this runway and all I have to do is work. Like Sean said, I’ve got my hands, my skills, and the stuff between my ears. I’m coming away from delivering this episode feeling more confident. That’s what I love about doing this. It forces me to think, “What do I really think about this? What do I know about this?”

Everything Is a Challenge

  • 1:01:19 Sean: You have to see everything as a challenge, because if you’re going to talk about it and teach on it, you have to articulate the problem and then talk about the solution. When you are a teacher or you take on the role of teaching what you know, even the things you struggle with, you’re not being an imposter. You’re not lying or faking it. It’s a process and a practice. You’re not a fake basketball player if you shoot a three-pointer and you say, “I haven’t done 10,000 of these and I don’t really know if it’s going to go in.” The pros have a really high confidence level of whether that ball is going to go in, but you’re kind of just faking it out there. You say, “I hope this goes in,” but you’re a basketball player, because you’re practicing.
  • 1:03:52 You have a stronger understanding of what you’re teaching as you share it with other people. You get a renewed sense of certainty. When you meet a problem, you see it as a challenge to embrace. Everyone else, who isn’t teaching, just sees problems. They encounter problems in their life, and they think, “Woe is me. My life is terrible,” but we who are teaching see it as a challenge. “There’s a problem. I bet other people have that problem, and I want to help them solve it. Meanwhile, I will internalize this even more as I share it.”
  • 1:04:29 Ben: It also has the effect of adding a layer of accountability. You’ve talked about it publicly. Because you’re teaching it, people aren’t necessarily going to try and contact you and ask if you’re doing this thing that you taught about, but even if it’s in passing, they will assume that you’re practicing that. There is accountability that comes with that. You don’t want to be inconsistent. As humans, we have an innate desire to be consistent, and we see the value of that. When we’re in a situation where we could choose between scarcity and abundance, it makes it a little bit easier to choose abundance.

Preventing Bad Client Investments

  • 1:05:55 Cory: There are so many different forms of scarcity. I’m focusing on the client aspect of it, for myself. I’m in a potential situation where I want to bring on a client because I kind of need to, but I don’t know if it would be a great fit. Can you describe Sunk Cost Fallacy one more time?
  • 1:06:25 Sean: It’s basically when you’ve put money, time, effort, and resources into a bad investment, even when you realize that it’s bad. You will be inclined to continue going forward with it, because you have an irrational attachment to the money you put in. You’re not objectively comparing that to what you will lose by continuing with this bad investment. You will continue to throw good money after bad.
  • 1:06:56 Cory: I think I’m experiencing that, not with money, but with time. I’ve put time into this person, and so far, they’ve gotten the impression that I’m very on board with their project. I haven’t set a price, and I don’t want to set a price. The red flag is the money, and I also know that this isn’t my number one focus. They came to me, and I said, “Sure, I’d love to help you,” and I said yes without even thinking about it.
  • 1:07:31 Sean: If it was no money, would you work with them on a pro bono basis? Regardless of the money, are there any flags?
  • 1:07:39 Cory: I could do it pro-bono.
  • 1:07:41 Sean: I’m not actually saying to do it pro bono. That’s something you give. It’s a gesture, reserved only for causes you believe in, that it’s going to do good in the world. There’s a purpose for this, so it’s a very precious thing you give away, and it should only be given as a reward to someone who is deserving of it. This is someone who would be an excellent client, who is excellent at communication, who is on the ball, and who will respect your process. You want someone who will enable you to do work that results in a project that can be an effective case study for you. I’m saying, does this person personify that?

When deciding whether to take on a client, ask yourself: would you work with them if money was out of the picture?

  • 1:08:29 Initially, I was going to say, what if they were going to pay you ten times what you’re thinking? Would you have any problem working with them? The problem with that is that money tends to cloud things. If there were any little issues, you would say, “That would be no big deal, because I’m getting paid ten times this much.”
  • 1:08:46 Cory: After hearing everything, I think I need to better assess how I want to approach that, instead of doing it because I think I need to. I might get into the budget thing, and I don’t really want to get into that.
  • 1:09:06 Ben: For you, Cory, you feel like if you quote what the project is really worth, you feel like they’re not going to be able to do that?
  • 1:09:17 Cory: Yeah, they mentioned money. They said, “I can pay you,” and they’re proud of that, because I think they knew I wouldn’t work for free. I think they already have a budget in mind that they’re willing to spend. It’s very early.
  • 1:09:38 Sean: Justin and I are doing a Value-Based Pricing podcast. This will be coming out on the seanwes network probably in June, after the Value-Based Pricing course in May. I have a lot of thoughts on that, but we’ll save that for the other podcast. I’ll probably have him on this show to introduce the new show at some point in the coming months.