Your Next Five Moves by Patrick Bet-David: Summary and Notes
“Don’t complain that the game is rigged. Instead, find a game in which you have a differential advantage.”
Rating: 8/10
Related Books: The E-Myth Revisited, Work The System, Zero to One, The Hard Thing About Hard Things, High Output Management
Get all my book summaries here
Table of Contents
Your Next Five Moves: Short Summary
Your Next Five Moves explores how you can improve your business and your life by learning how to strategize. Patrick Bet-David shares how to master the art of Business Strategy with actionable advice and systems. Great book for everyone looking to find their path.
Move 1: Master Knowing Yourself
Know What You Want
“You need to identify what matters the most to you to put a strategy together that fits your level of commitment and vision.”
Making a plan and committing to it will unleash all the energy and discipline you’ll ever need.
But to develop a worthwhile plan, you need to answer the question: “Who do you want to be?”
“If you’re looking to disrupt an industry, you’d better be armed with the right story, right team, right data, and right strategies.”
When you’re working on something you deeply care about, you will find the enthusiasm to make life a great adventure.
You can break down Drive into four categories:
- Advancement. Wanting to reach the next goal (promotion, deadline, or task)
- Individuality. Having the lifestyle you desire and the security to do so
- Madness. Competing against others and proving you are the best at what you do
- Purpose. Self-actualization and having a positive impact on others
You can have more than one type driving you. However, a driver can stop to work in your favor.
For example:
People often feel lost after a big deadline because their driver is suddenly gone.
To solve this, you need to dive deeper into your Purpose.
Define your purpose by asking:
- How do you want to be remembered?
- How do you want to make an impact on other people’s lives?
- What does the greatest version of yourself look like?
Find Your “Blue Ocean”
Rather than competing in games where you’re an underdog, find unexplored new markets in which you can win.
Examine both your unique skill set and the competitive landscape to find your “Blue Ocean”.
Process the competitive landscape by asking:
- Is this a place where you believe you can do well, given who your competition is?
- Do you possess the necessary resources to compete?
- Do you need to acquire specific resources before you can compete?
- Have you educated yourself about the competition?
- Is there some additional benefit your competitor has that you can’t beat, no matter what you do?
“Don’t complain that the game is rigged. Instead, find a game in which you have a differential advantage.”
Once you find a market where you can win, you need to transform your potential into results.
How?
By embodying who you want to be right now.
For example:
If you want to become a great programmer, you have to work like you were a programmer right now. This means writing lots of code and applying it to real-world scenarios.
You will never reach your goals unless you act like the person you want to be from the very beginning.
The same is true for a company. For any company to be great, it needs to act like a great company long before it ever became one.
Move 2: Master The Ability To Reason
The Incredible Power Of Processing Issues
Before you act on a problem, you must first “process” what’s happening. The key to success at all levels of business is to “know how to process issues.”
Great processing involves:
- The ability to make effective decisions based on access to information at hand with the highest odds in your favor
- Subjecting every difficult choice, problem, or opportunity you face to a rigorous mental analysis
- Playing out strategies, seeing the hidden consequences, and sequencing a series of moves to permanently solve problems
But to be great at processing problems, you need to take responsibility whenever you can. Great processors see their role in whatever problem has occurred.
Poor processors play the victim and blame others and external events rather than seeing how they contributed to the problem.
The eight traits to become a great processor:
- Ask lots of questions. Having more data leads to making better assumptions
- Don’t care about being right or wrong. Be only interested only in the truth.
- Don’t make excuses. Wasting time and effort on why things went wrong is not productive
- Embrace challenges
- Be curious. You can’t solve problems without knowledge
- Prevent more problems than you solve. Spot yellow flags before they turn red
- Learn to negotiate
- Focus on permanently solving a problem. Don’t put band-aids on problems
Embrace Math And Use Investment Time Return (ITR)
Instead of reacting emotionally to problems, use the Investment Time Return (ITR) formula to reach an objective conclusion.
Investment Time Return formula:
- Investment. How much will it cost or save
- Time. How much time will it take or save
- Return. Return on the money and time involved in the decision
How to make a decision using the ITR:
- Find at least 3 alternative solutions to a given problem. The more choices you have, the better are your decisions
- Determine the money investment of each solution
- Determine the time investment of each solution. Is it a 3-month project or a 6-month project?
- Calculate the return for each solution. What are the impacts on your revenue and cost?
- Figure out the breakeven point of each project
Make a list of the blind spots or things that could go wrong with each decision. If you only think about what could go right, you will overlook the downside.
How To Solve For X
Problems might be different, but the way you process them should not.
You need to give structure to your decision-making.
“The ability to solve problems well is the ability to take a complex issue you’re facing and break it down into a step-by-step formula that helps you identify the root of the problem.”
Three parts to Solve for X:
- Investigate. Find out the real causes of the issue, the impact of the problem, and how urgent it is
- Solve. List out possible solutions and their consequences
- Implement. Who will be responsible for the project and how it will change future situations
Move 3: Master Building The Right Team
How To Build Your Team
“Working effectively with others will mean the difference between enjoying the process and desperately seeking a day job while hiding under your desk”
Instead of being selfish and looking to see what you could take from others, focus on what you could give them. You need to define:
- What benefits are you currently offering to others?
- In what way do people improve by associating with you?
- How many lives have you changed positively in the past year?
Think about who you need to help you to achieve your long-term objectives. Take care of them, and they’ll back you up.
Your team judges you. They are seeing if you’re developing yourself and finding ways to take the company to the next level. If you don’t, they will leave.
Create A Replacement Game Plan
“The less your business depends on you, the more valuable it is.”
As your company grows, you will constantly replace yourself with others.
For example:
You will stop hiring people and delegate it to an HR manager. You’ll hire an accountant to handle your books.
Alongside the growth, you also need to create a contingency plan to replace any important position.
“If you have a plan in place for how to replace every key member of your team, you can handle an unexpected exit without missing a beat. Plus you’ll sleep better at night, knowing your next several moves are already planned out.”
Six strategies for replacement and skill transfer:
- List your tasks and skills. Make a list of all your tasks and skills and determine which ones you are the best at and which ones you are not. Focus on your strengths, and replace yourself on all the other tasks
- Identify who’s seasonal and who’s not. Identify who is there to fill a six-year role and who a six-month role
- Know the different languages spoken by your sales, support, technical, and executive teams
- Identify who can maintain the company culture. Make sure whoever replaces you will fit the culture you established
- Know your company’s practices and procedures. Write down each department’s practices and procedures to help transfer skills
- Develop leaders to help spread the right mindset. Prepare your future leaders now before they need to replace someone
“Keep figuring out how to replace yourself because your time is most valuable in this process. Once you figure out what you’re passionate about and as long as you’re doing it, you’ll be successful in doing that one thing and you keep doubling down yourself learning more.”
Learn Each Individual’s Love Language
You need to stop asking what motivates people in the abstract and instead ask: What motivates a person?
In relationships, replace “Do unto others as you would have them do unto you” with “Do unto others the way they want to be treated.”
In The 5 Love Languages, Gary Chapman divides the ways you give and receive love into 5 categories:
- Quality Time. One-on-one time of undivided attention
- Words of Affirmation. Appreciate the effort verbally
- Gifts. Offer something to symbolize your appreciation
- Acts of Service. Be at their disposal when they need you
- Physical Touch. Non-verbal use of body language and touch to show appreciation
Show people that you take the time and care needed to understand what they want.
Move 4: Master Strategy To Scale
How To Make People Accountable For Growth
The number one product is human capital.
How fast you grow will be dictated by how well your team is working on your business. And to maximize results, you need to have mechanisms to hold people accountable.
How to hold people accountable:
- Don’t be afraid to call them out when they don’t keep their word. Make it very clear it’s their performance you don’t like, not their personality
- Ask why they broke their promise. Get a specific answer
- Make specific quantitative statements, not blanket qualitative ones. Give them specific challenges to meet that can be measured and have deadlines.
- Provide clear metrics and incentives. Let them know what they will get for hitting (or missing) their metrics
- Coach people through their workflow. Help them improve how they work
- Know the role each person plays on the team. Who is accountable for who?
- Finish with heart and empathy
You need someone that makes you accountable for your word. Find someone you respect who is willing to keep you accountable on a weekly basis.
If You Overdose on Anything, Overdose on Speed
“I will not compromise on speed, execution, or efficiency. I don’t care how much bigger we get; I want speed, I want execution, I want efficiency. I am greedy in these three areas. I want them all.”
Seven-step system to compress time frames and increase speed:
- Choose a process. One of the best ways to identify a potential business is to find a flawed process that you can improve upon
- List the steps of the process
- Remove a step. How would the process function without that step? If the process is not affected, take it out
- Minimize the steps. Take the remaining steps and condense their time frame
- Beta test the new process. Find a subset of customers to test and see how the new process functions
- Adapt the process. Based on the results of your beta test, adjust your process
- Repeat. Repeat these steps again and again to create exponential growth
Move 5: Master Power Plays
How To Beat Goliaths
You will have to go against established companies with lots of resources.
The “Goliaths” dominate the market, but their weaknesses can be exploited.
“Goliaths tend to get softer the more they win and eventually stop working as hard as they once did.”
12 ways to beat your “Goliath”:
- Know your weaknesses. Knowing your weaknesses will enable you to pivot when taking on your Goliath
- Know Goliath’s weaknesses. Don’t fight Goliath where it is strong
- Master three things you do better. Use your strengths to master three things Goliath can’t do and do them better than it can
- Don’t try to be Goliath. Learn moves and information from Goliath, but don’t copy
- Specialize. Goliaths tend to generalize in order to spread their influence and power. You must specialize to capture market share from them
- When you’re small, make yourself appear bigger. Don’t shy away from the challenge and compete as though you’re the one with the advantage
- Keep a low profile initially. Work on your business first before looking for a Goliath to fight.
- Move quickly. Use your inherent advantages of strength and speed against Goliath
- Partner with competitors that share an enemy. Look for synergies with Goliath’s enemies and build strategic alliances
- Study history. Prepare by learning from historical events
- Let other competitors wear your opponents down. Save your resources whenever you can
- Don’t disclose your strategy. Keep your enemies guessing
“A simple rule of business is that in order to get, you have to give. Most amateurs are experts at making demands. What they fail to do is offer value first. When you put yourself into the other party’s shoes and lead with how they will win and make money, it will be natural for them to give you what you want.”
