The Smartest/Craziest Idea I've Heard in Awhile

My friend Rich (Former Marine, Owner of a bunch of plumbing companies, done like 17 hires through Sagan this year.. dammit I should have charged him more money) shared an idea the other day that's either brilliantly simple or simply crazy.

I haven’t stopped thinking about it in weeks!

But those are often the best kind.

Here's the puzzle:

Your business has hit the “death zone”.

You know the one - where you're too big to run everything yourself, but too small to afford proper middle management.

You, as the owner, are still exposed to all of the tactical problems and don't have time to drive growth or meaningful operational improvements.

The revenue number doesn't matter.

Could be $2M for a consulting firm, $8M for manufacturing, $5M for services.

What matters is you're stuck in business purgatory.

The traditional advice is to be patient.

Keep those margins.

Grow slow and steady.

Don't leave money on the table.

Rich suggests the opposite: Cut your prices to barely above cost.

Gross margin plus a dollar.

WAIT, WHAT?!?

Yeah, it sounds nuts at first.

When you're in the death zone, you can't afford that operations manager you desperately need. Or the sales rep, or the field manager. Whatever.

The faster you get through this phase, the faster you can build a “real business”.

It's like crossing a glacier.

You could inch along safely at the edges, but you'll be exposed to danger longer.

Sometimes you need to sprint across the riskiest part to get to safer ground faster

But here's the catch (there's always a catch):

You need to be damn sure about a few things first.

I'm probably missing a few but these are the first ones that popped into my head.

One, your market needs to actually respond to lower prices. Simple way of saying “Demand Elasticity”.

If cutting prices by 30% only gets you 5% more customers, this isn't your play.

Two, you need room to raise prices later.

If you're in a perfectly transparent market where everyone knows everyone's prices, you're toast.

But most service businesses aren't like that. Certainly not the case if you have project-based revenue. Probably the case even if you don't.

You can segment customers, create different service tiers, grandfather old rates.

Three, you better have your operations tight.

Volume will expose every crack in your foundation.

Fast.

This isn't for everyone.

If you're running high-fixed-cost operations or signing long-term contracts, probably look elsewhere.

But for many businesses, this could be a legitimate path through the middle management desert.

Instead of trying to slowly build the perfect management structure with your current revenue, you use pricing as a lever to get to where you need to be faster.

Then you can afford to build it right.

Look, maybe this is completely wrong.

Maybe maintaining your margins and growing slowly is the better path.

But I keep coming back to one thing: How many businesses do you know that are stuck in the death zone?

How many owners are trying to be the sales manager, operations director, and CFO all at once?

If you're in that spot, maybe the conventional wisdom isn't serving you.

Maybe you need to think differently about margins.

Sure, it's scary to consider.

But isn't that the point?

Like Rich's idea or hate it, at least it offers a different path.

The next time you're looking at your pricing, ask yourself: Are these margins serving your future, or are they keeping you from it?

This is a high-risk, high-reward strategy, which is exactly the kind of thing that a former infantry Marine would propose - AND I LOVE IT.

What do you think? Nuts… or brilliant? Love to get your opinion

Yallah Habibi,

Jon

Did you know I have a podcast on Spotify and Apple Podcasts called “Lazy Leverage”? I asked AI to give me a few of the topics referenced in the last episode I recorded and here was the list:

• EOS (Entrepreneurial Operating System) – A framework for running a business with clarity and accountability.

• The Toyota Way – Lean manufacturing principles emphasizing continuous improvement and respect for people.

• Zero-based budgeting – A budgeting method where expenses must be justified from scratch each period.

• OODA Loop – A decision-making framework (Observe, Orient, Decide, Act) for rapid adaptability.

• GTD (Getting Things Done) – A personal productivity system for organizing tasks and projects effectively.

• Project Bankruptcy – The concept of cutting losses on failing projects instead of doubling down.

• TCCC (Tactical Combat Casualty Care) – A military framework for battlefield medical care and triage.

• Wartime vs Peacetime CEO concept – The distinction between aggressive, decisive leadership in crises vs. steady, structured leadership in stability.

• SaaS cohort analysis – Tracking customer retention and behavior over time to understand business health.

• Milton Friedman’s think tank concept – The influence of free-market economics in shaping policies and strategies.

• Alan Watts philosophy – A perspective on life that emphasizes presence, fluidity, and questioning rigid structures.

• Ayn Rand’s philosophy – Objectivism, which promotes rational self-interest, individualism, and capitalism.

• “Questions to Always Be Asking” framework – A mindset of continuous inquiry to refine decisions and strategies.

• “We Should Really” concept – A caution against vague, wishful thinking that lacks commitment and execution.

• Kanban system – A visual workflow management method for limiting work in progress and optimizing efficiency.

• Water Spider role – A Lean manufacturing role focused on keeping workflows running smoothly.

• Government/Military retention patterns – Insights from how structured organizations retain talent over time.

• Four-step feedback system – A structured method for giving and receiving feedback effectively.

• Output thinking – Prioritizing results and measurable impact over effort and input.

• Segmentation in scientific method – Breaking down variables and groups for precise testing and analysis.

• Constraint Theory – A focus on identifying and resolving bottlenecks to optimize performance.

• “Go and see for yourself” principle – A management approach advocating firsthand observation of issues.

• One Thing concept (Gary Keller reference) – The idea of prioritizing the single most impactful task at any moment.

• Emerging leaders training – Programs and methods for developing future leaders within an organization.