If I Were Starting a Company In 2024, This is What I'd Do [FULL 0-$100M GUIDE]

Summary

In this video, a successful entrepreneur shares insights from his journey of building and selling multiple companies, with one valued over $100 million. Aimed at aspiring entrepreneurs, he outlines a framework for growing a business from zero to $100 million, focusing on phases such as achieving product-market fit, scaling sales, and increasing customer lifetime value. He emphasizes the importance of developing key skills, building work capacity, and understanding market needs. The video concludes with tips for those looking to eventually sell their businesses, highlighting the significance of minimizing key person risk and customer concentration.

Takeaways

• 🚀 Building and scaling businesses: The speaker has built and sold three companies, with one worth over $100 million, and is currently working on a fourth aiming for $1 billion.
• 🔍 Phase one - Market fit: Focus on finding product-market fit by selling one product to one avatar through one channel consistently.
• 📞 Importance of sales: Sales is the first skill to master, as it teaches you how to communicate and understand customer needs, which is crucial for marketing.
• 📈 Skill development stages: The hierarchy of competence includes unconscious incompetence, conscious incompetence, conscious competence, and unconscious competence.
• 💪 Work capacity: Building a business requires significant work capacity, which can be developed by consistently working hard and not backing down when it gets tough.
• 📦 Offer development: Understanding how to package and price your product for your target market is essential for creating value and attracting customers.
• 💼 Hiring and delegation: Focus on hiring for roles that you are not good at or dislike, and learn how to set clear expectations and properly onboard employees.
• 📊 From 1 to 10 million: Focus on increasing lifetime value (LTV) of customers and learning how to hire the right people to support growth.
• 📈 From 10 to 50 million: Professionalize management and systems, integrate data practices, and hire experienced leaders to support further growth.
• 🌟 Innovation and talent: To scale from 50 to 100 million, focus on innovating the business model, attracting high-level talent, and potentially integrating vertically or adding new product lines.

Q & A

What is the primary purpose of this video?

The video is aimed at providing guidance and insights to the creator's 23-year-old self and others who are interested in starting and selling a business.

What are the four phases outlined to grow a business from zero to 100 million dollars?

The four phases are: Phase 1 - Zero to a million (Market fit or product-market fit), Phase 2 - One to ten million (Focus on deliverables), Phase 3 - Ten to fifty million (Professionalization and consistency), and Phase 4 - Fifty to one hundred million (Innovation and talent acquisition).

What does the creator emphasize as the most challenging phase for entrepreneurs?

The creator emphasizes that the zero to one million phase is the most challenging due to the difficulties in finding product-market fit and dealing with high levels of uncertainty and noise.

What are the three common issues faced in the zero to one million phase?

The three common issues are: not having something people want, selling the right product to the wrong people, and conveying the product's value in a way that is not understood by the target audience.

Why does the creator recommend starting with sales skills in the early phase of a business?

The creator recommends starting with sales skills because understanding how to sell directly informs how to market, as marketing involves positioning sales messaging to attract attention.

What is the 'hierarchy of competence' as described in the video?

The hierarchy of competence consists of four levels: unconscious incompetence (not knowing you suck), conscious incompetence (knowing you suck), conscious competence (being aware of your competence), and unconscious competence (being so good that it's second nature).

What is the importance of work capacity in the early stages of a business?

Work capacity is crucial because starting a business involves acquiring multiple skills simultaneously, requiring the ability to work long hours and endure challenges without backing down.

How should entrepreneurs approach hiring in the one to ten million phase?

Entrepreneurs should focus on increasing lifetime value (LTV) of customers and hiring for roles that are critical but not their strong suits. They should hire well and fire well, ensuring clear expectations and proper training for new hires.

What role does professionalization play in the ten to fifty million phase?

Professionalization involves systemizing data, implementing dashboards, and bringing in experienced functional leaders to mentor others and manage growth more effectively.

What should a business focus on when trying to grow from fifty to one hundred million?

The focus should be on innovation and talent acquisition, potentially transforming the business model, integrating vertically, and attracting high-level talent to drive further growth and innovation.

Outlines

00:00

💼 Starting a Business: Lessons from Experience

The speaker shares their journey of building and selling three companies, one of which is worth over $100 million, and is now working on their fourth with a goal of reaching $1 billion. They reflect on their past struggles and offer advice for aspiring entrepreneurs, emphasizing the importance of achieving product-market fit in the initial phase of business growth.

05:01

📈 The Path to Market Fit

The speaker discusses the first phase of growing a business from zero to a million dollars, known as the Market Fit phase. They highlight the need to focus on a single product, a single target customer (Avatar), and a single sales channel to achieve consistency. This phase involves significant trial and error, and the speaker stresses the importance of perseverance despite the initial challenges.

10:01

📚 Acquiring and Mastering Essential Skills

The speaker explains the stages of skill development, from unconscious incompetence to unconscious competence. They use the example of learning sales to illustrate this process, noting that it involves progressing from not knowing one's deficiencies to becoming proficient and eventually mastering the skill to the point of it becoming second nature.

15:02

👩‍💼 Developing Key Business Skills

The speaker emphasizes the importance of acquiring and improving key business skills such as sales, marketing, and offer development during the early stages of business growth. They describe offer development as the process of understanding and packaging a product to meet the specific needs of the target customer, thereby enhancing the product's perceived value.

20:03

💪 Building Work Capacity and Staying Focused

The speaker discusses the necessity of building work capacity, which involves the ability to work long and hard hours, especially in the early stages of starting a business. They compare it to building muscle, where persistence despite soreness leads to strength. They also highlight the importance of focusing on the most critical tasks and avoiding distractions from less important aspects of the business.

25:04

📊 Scaling from One to Ten Million

The speaker outlines the second phase of business growth, from one to ten million dollars, which focuses on increasing the lifetime value (LTV) of customers and building a team. They explain that extending LTV is often more cost-effective than acquiring new customers and that learning how to hire effectively is crucial for scaling the business.

30:04

👥 Effective Hiring and Delegation

The speaker provides insights into effective hiring and delegation, stressing the importance of hiring for roles that are crucial to business growth but are outside the founder's expertise or preference. They advocate for outsourcing low-value tasks to focus on high-value activities and emphasize the need for clear expectations and proper onboarding for new hires.

💡 Professionalizing Management and Systems

The speaker discusses the challenges and strategies for professionalizing a business when scaling from ten to fifty million dollars. This phase involves implementing data-driven systems, professionalizing management, and integrating functional leaders with relevant experience to mentor and guide the team. They also emphasize the importance of developing an employee value proposition to attract and retain top talent.

🚀 Innovating and Attracting High-Level Talent

The speaker talks about the final phase of business growth, from fifty to one hundred million dollars, which focuses on innovation and attracting high-level talent. They discuss the need to transform the business to reach new growth levels, such as through technology integration or vertical integration, and highlight the importance of building a strong executive team capable of driving innovation.

💰 Preparing for Business Sale

The speaker provides advice for entrepreneurs considering selling their business. They recommend understanding the types of buyers (e.g., private equity, strategic buyers, family offices) and their specific requirements. Key considerations include reducing key man risk, avoiding customer concentration risk, and ensuring consistent revenue. They also stress the importance of asking potential buyers what they would look for in a viable acquisition.

Keywords

💡Market Fit

Market fit, or product-market fit, refers to the phase in which a business's product satisfies the needs of a particular market. It is crucial for startups, as it indicates that the product has found a significant audience that values and regularly uses it. In the video, the speaker emphasizes the importance of achieving market fit in the first phase of business growth from zero to one million dollars.

💡Sales

Sales involves the activities related to selling goods or services. It is highlighted as the first skill to master because understanding how to sell to a person helps in understanding how to market to that person. The speaker stresses that being proficient in sales can significantly contribute to achieving initial business success.

💡Hierarchy of Competence

The hierarchy of competence is a model describing the stages of skill acquisition. It includes four levels: unconscious incompetence, conscious incompetence, conscious competence, and unconscious competence. The speaker uses this model to explain how individuals progress from not knowing they are bad at something to becoming experts who perform tasks effortlessly.

💡Work Capacity

Work capacity refers to an individual's ability to handle large volumes of work and manage multiple tasks effectively. The speaker suggests that building work capacity is essential for business success, especially in the early stages, by working hard and enduring the challenges associated with starting a business.

💡Offer Development

Offer development is the process of creating and refining the product or service being sold, including its pricing and features. The speaker explains that a well-developed offer aligns with the needs of the target customer and enhances the value proposition, which is vital for business growth.

💡Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) is a metric that estimates the total revenue a business can expect from a single customer account. Increasing LTV involves selling additional products or services to existing customers. The speaker discusses the importance of focusing on LTV to ensure long-term business sustainability and profitability.

💡Professionalization

Professionalization refers to the process of implementing formal systems, structures, and practices within a business to improve efficiency and consistency. The speaker mentions that professionalizing management and systems is essential as a business grows from ten to fifty million dollars to handle increased complexity.

💡Key Man Risk

Key man risk is the risk that a business's success is overly dependent on one or a few individuals, typically the founders. Investors often seek to minimize this risk to ensure the business can operate smoothly without those key individuals. The speaker advises reducing key man risk to make the business more attractive to potential buyers.

💡Strategic Buyer

A strategic buyer is an entity that acquires a business to enhance its own operations, often integrating the acquired business's products, services, or market reach. The speaker recommends understanding what strategic buyers would want to see in a business to make it appealing for future acquisition.

💡Innovation

Innovation involves introducing new ideas, products, or processes to improve business operations and stay competitive. The speaker highlights the importance of innovation, especially as a business aims to grow from fifty to one hundred million dollars, by evolving the business model and product offerings.

Highlights

Built and sold three companies, one worth over $100 million, and currently building a fourth with a goal to reach $1 billion.

Video is intended for those on the journey of building and selling a business, offering tips learned along the way.

Four phases to go from zero to $100 million: Market fit (zero to $1 million), scaling (one to $10 million), systemization (ten to $50 million), and innovation (fifty to $100 million).

Market fit phase requires nailing one product for one avatar sold through one channel consistently.

Entrepreneurs often feel unready and consume a lot of content; there's no 'silver bullet' of information that makes one ready.

Importance of acting despite not feeling ready; becoming a person who can act without feeling prepared.

In the beginning, entrepreneurs struggle with noise and identifying which advice to follow.

Three main issues in early stages: not having something people want, selling to the wrong people, or conveying the value improperly.

Sales skills are crucial early on; they inform marketing by understanding customer needs and how to communicate value.

Skill development hierarchy: unconscious incompetence, conscious incompetence, conscious competence, and unconscious competence.

Entrepreneurs must go through the phases of skill development; many get stuck at the conscious incompetence phase.

Importance of increasing work capacity; starting a business requires long hours and hard work before achieving balance.

Avoid distractions and focus on core activities (one product, one channel, one avatar) to build consistency.

From $1 to $10 million: focus on increasing lifetime value (LTV) and hiring the right people to extend product offerings.

Hiring should focus on outsourcing tasks you suck at and hate, followed by low dollar-per-hour tasks to free up time for high-value work.

Transcripts

I've built and sold three companies one

of which is worth over 100 million

dollars and I am building my fourth

right now and my goal is to get it to a

billion this has not been an easy

journey to say the least and so this

video today is really for my 23 year old

self and this video is for you too if

that's what you're going through and if

selling a business is something that is

appealing to you at the end of the video

I'm going to include some of my tips the

things that I learned along the way to

sell my businesses so I made this

framework that basically outlines the

four phases to go from zero to 100

million there's phase one which is zero

to a million that's the face most of you

are in that face is called Market fit or

many people know it as product Market

fit in this phase you need to nail one

product that has one Avatar that you

sell through one channel and you just

sell that thing over and over and over

again until you have consistency of

numbers can you week over week and month

over month sell the same amount of units

or even better increase the amount of

units month over month this phase sounds

simple it's like all right one product

one channel selling something to one

person a million I get it that's simple

right it's not simple because you have

no idea what the hell you're doing so if

you're watching this video you're

probably what we would call an

entrepreneur if you want to be an

entrepreneur but you haven't taken that

step before I started my business I was

constantly consuming things I was

consuming podcasts I was reading books I

was going to free events I was trying to

figure out if I was working the right

job if I was getting in the right people

I was trying to network I always felt

like I just wasn't ready it just felt

like there's like one piece of

information that if I acquire that

information then I'll be ready to do the

thing and it's so funny looking back at

it now because I realized like there is

no Silver Bullet of information like

there's never going to be a time where

you feel like now I've acquired all the

information and I'm ready because if you

were to feel that way then you've

already done the thing one thing that I

would tell myself if I were going back

is like you're never going to feel ready

you need to become a person who can act

despite not feeling ready and that is

why it's so hard you don't know who to

listen to you don't know what

instructions are right and what are

wrong you're getting different opinions

from all different people and so it's

very hard for people to even get through

this stage and get to a million dollar

per year business because there's just

so much noise and you don't have the

skill at which to figure out what noise

to filter and what to listen to and so

this stage feels like eating I call

it like the swamp of because it

just feels so hard it's either one of

these three things you don't have

something people want you have something

people want and you're selling it to the

wrong people or the way in which you

convey what you have to people is in a

way that they do not understand and in

the beginning those are usually the

three things you have to figure out good

example of this is that when I started

my first business gym launch there

wasn't some crazy master plan behind it

we're like doing crazy product market

research running analysis like bringing

in bainer McKinsey like it was just me

and Alex calling people and then we

thought to ourselves as people who had

been in their shoes prior what would

have been something that would have

really helped us when we were in their

shoes and that's why I think that

starting a business in an area that you

already know is the best way to go

because often the reason for that is

that you get the customer you understand

what they want you understand their

needs you understand what they like to

to buy what they don't like to buy I

think that sometimes people make it more

complex than it needs to be and so I

think that rather than asking yourself

what Market do I start with ask yourself

what customer do I know best okay Layla

well where's this channel that I'm

selling this to these people that's an

easy question to answer where do they

already live where do they hang out when

we start gym launch gym owners aren't on

LinkedIn you know who is on LinkedIn

software Engineers are on LinkedIn gym

owners were on Facebook so that is where

we picked our first channel so when

you're in this phase for example zero to

one million I would say that the first

skill I would start with is probably

sales why would I start with sales as

the first one because I believe that if

you can understand how to sell to a

person over the phone or over Zoom then

you also understand how to Market to

that person because you know what

marketing is taking the things that we

say during a sales call and positioning

them in a way that attracts somebody's

attention the next thing that inherently

you're thinking is like okay well how do

I acquire the skill to Market how do I

acquire the skill to sell well I think

one important thing to look at is What's

called the hierarchy of competence space

this is a pyramid it and it's basically

going through the phases of skill

development so the first level of skill

development is unconscious incompetence

that means that you suck and you don't

know you suck it's just like somebody

who if they've never done something

before they have no point of reference

therefore they don't know how bad they

are or how good they are the second

level is called conscious incompetence

which is you still suck at the things

but you're aware that you suck at the

thing because you now have points of

reference what does that mean you've

probably read up enough on the skill

that now you understand what good looks

like and you know that you're not it the

third level is conscious competence that

means that you are aware of what good

looks like and you also are what good

looks like and then the last level is

unconscious competence which is when you

are so good at the thing that you don't

have to be aware of if you're good at

the thing or not it's not even a thought

because it is so now second nature it's

so inherent to you say it's speaking on

a stage for example you get up on the

stage and you crush it you didn't

practice you did nothing you've done it

so many times that it is a behavior

that's so ingrained you don't even have

to think about it that is how you

acquire skill now the thing is you can't

skip to the top you have to go through

all the levels and so any skill that you

start at you're going to suck and you're

gonna be like kind of maybe good and

then like actually good and then

eventually one day you don't even know

how good you are and you take for

granted how good you are because you

haven't even thought about it in so long

but the thing is that most people never

get past the point where they suck so a

great example of this when you're first

starting off is sales it's such a linear

process to watch people go through this

and it's more of like a J curve when you

think of the hierarchy of competence

it's like it's slow at first and the

feeling and the phase where you suck is

prolonged and then when you start to

increase then you really start to

exponentially increase I had a neighbor

and he came over to my house and he took

a sales call and we heard him on the

sales call and we said oh my gosh that

was awful he was like was it because he

was in inconscious incompetence he was

so bad and he didn't know how bad he saw

so the reason it's so interesting in

sales is because that's usually where

people start right they don't know that

they suck then you start training you

start learning you write a book on sales

then you start to be aware of what good

sales actually look like so then you

know you suck and so then you continue

to work on it and use the point of

reference from say the book or the

training you took or the course you took

and you start to sound more and more

like that then say you start to actually

take sales calls with the customers that

you're trying to sell at first you make

some sales you don't make some sales you

feel good some days you feel bad some

days it's like you're really not sure

what to expect it's a little

unpredictable and a lot of people quit

there because they just don't like the

unpredictability or the uncertainty but

the thing is if you Wade through the

times of uncertainty you get to

conscious competence which is where

you're really good and you're able to

produce consistent results and if you're

able to continue doing that you get to

unconscious competence which is where

you're producing results that continue

to increase month over month without

much effort at all the reason that it's

so hard to start a business is you're

usually going through this hierarchy

with multiple skills you're not just

doing that with sales you're also eating

with marketing and you're also

eating with leading people and

you're also eating with organizing

your company and delivering and so it's

very pain painful because you're stuck

in that conscious incompetence in like

five different skills the reason that

I'm a fan of focusing on a few at once

is because it's easier to increase one

thing at a time now I would say the

second and very close second depending

on the business you could flip these but

in most cases I would suggest this is

marketing I see marketing as the

expectations that we're setting of what

our company does and what that customer

is to expect for the entire Journey with

us whether that's a one-time transaction

or whether it's a transformation over

six or twelve months marketing is

setting expectations how do I show

people that I have what they want in a

way that then creates a good customer

experience aside from sales and

marketing the third skill that you're

really learning during this period is

offer development what is offer

development it's understanding how you

package the product for the people

you're selling it to packaging is

typically pricing combined with features

for example so at gym launch we sold gym

launch to gym owners when we're thinking

of packaging there's different ways that

you can look at this when we're thinking

of offer development one is is our offer

conducive for the market we're selling

to what I mean by that is within your

avatar there are subsets of your avatar

if your offer is for weight loss is it

geared towards people over 50 low 50 are

they 20 to 50 what is it that is going

to dictate what your offer might look

like because the more specific you can

get with who you're selling to the

better offer you can craft an offer is

the price point that you're selling at

and the features that you're outlining

so it's really understanding the value

of something and how you portray the

value in a sales pitch is usually

stemming from the offer that you develop

with that offer if you really think

about it right it's like okay if you

have marketing and you have sales which

are elements of an offer or like stems

of it the rest that you need to decide

are the packaging and pricing which is

what things am I going to give for what

price so gym launch we're like okay but

we're sixteen thousand dollars they get

an accelerated program that is 16 weeks

long you have a coach for support you

have a technical thing you get these

many ads you get these many calls you

get these things now if you want more

than that then you go one level up right

and the thing is about the level up is

it also was for a slightly different

Avatar this level up had support with

building a team building training Etc

and so what we understood is that

because when we were first starting the

business we want to focus on one product

one Avatar one channel we only did one

level which meant that our pricing and

our features that we sold were attuned

to the newer gym owner starting out the

person who just needed to make money

they weren't trying to build a team they

were trying to make money they're trying

to make extra Revenue they were trying

to get more people in their gym that is

who we cater to and so when you think

about the third skill it's understanding

who do you cater to and at what point in

their Journey as a gym owner as a dance

teacher as a custodian as a you know

consumer of supplements like at what

point in their Journey are you catering

to them and that's going to dictate how

many much purchasing power they have and

what features they want from your

product now those are hard skills right

those are skills that anybody can learn

but what is the one thing that's a soft

skill that's something we need to

acquire in order to even have the

capacity to achieve all those things and

I would say it's work capacity you know

when I was first starting out I think

that I was primed for business because

of working in Fitness so I would get up

at 4 am I would open the gym at 4 30 a.m

I would be there until 8 or 8 30 pm to

close out finish all my last clients I

had a break in the middle of the day for

a couple hours but during that break I

was messaging other clients trying to

make sales working the floor and so I

was working for really long hours now a

lot of people don't have that experience

before they start a business a lot of

people actually start a business because

they want to work less But the irony of

that is that you often have to be able

to work more in order to one day work

less and so in the beginning because

there's so many skills that you have to

try and acquire your capacity has to be

very large and the only way to acquire

work capacity is to not back down when

it gets hard like a lot of people want

some fancy formula for this but it's

just like lifting weights if you want to

get stronger you lift more you'll be

sore the next day but you have to keep

lifting more despite feeling sore you

have to keep working harder despite

feeling frustrated tired worn out

exhausted you will get there but using

those things as a reason not to pursue

your dreams not to pursue this business

they're not good reasons in fact I call

that special snowflake syndrome which is

we think I'm more tired I'm more

frustrated this is harder for me it's

not it's hard for everybody and thinking

about people that's not hard for doesn't

help you and I think that was a really

pivotal thing for me to learn is that I

wasn't special you know I need to learn

these skills just like anybody else it's

hard for everybody because learning is

hard in the beginning and I think a lot

of times if you want to build your work

capacity remind yourself this is a

season of heart you know starting a

business is hard and I remember telling

myself you know there's no better time

than now I'm not going to get any

younger there's no time in my life where

I'm going to have less risk taking this

this will be a season of hard it's not

going to be fun if you go into building

a business thinking like this should be

easy I should be making a million

dollars in six months these expectations

which what are they founded on like some

dude on the internet who's posting it

trying to sell you his course you know

what I mean of course it took him six

months because he's selling you a course

he's going to tell you whatever he needs

to tell you you have to set the

expectations low prepare for a season of

hard and focus on increasing your work

capacity just like you build a muscle

now I also think during this stage

people get distracted by hearing about

things that are in important for

business but they're not important right

now for business so if you're still

trying to find product Market fit then

certain things don't matter the appeal

of your website does not really matter

now will it matter soon yes but should

it matter right now should that be

something you put resources towards

probably not you know having the perfect

CRM in place and the perfect systems

does that matter it's good to be

organized but the likelihood that you

have to change it all in a year anyways

fairly hot Google spreadsheets is fine

you know becoming an insane leader that

has very great management skills

important yes right now not the most

important why you probably have a couple

people and a lot of people can manage

two to three people without much skill

at all and so all of those things like

professionalizing the business becoming

a great manager having a great brand

presence they're all important but

they're not the most important thing

right now right now what I've got to

focus on is one channel one product one

Avatar and selling it consistently over

and over again until I'm so good that I

have to start doing these other things

because the demand is so high the reason

I think think zero to a million is the

hardest is because it's the area in

which you incur the most cost of change

you just made a big life change to start

a business you're not only incurring the

cost of starting a business you're

incurring the cost of whatever change

you made in your entire life you might

have changed or gotten rid of

relationships you might have quit a job

and lost all your friends and then the

thing is is that as you're able to deal

with that stuff and you get used to the

new environment you get used to not

talking to people you talk to you're

used to not having a job you clock in

and get a paycheck up then things start

to go faster you have more clear

headspace you have more attention back

you're able to focus more because your

environment has stabilized and once your

environment has stabilized it makes

everything go much faster in the

business now in the second phase which

is really one to ten million like I

talked about it's a lot focused on

deliverables and the reason for that is

often like I said you have one product

for one Avatar via one channel you might

have a product that you're selling a

transaction is made but what are you

getting from that customer after and so

the goal from the one to ten million is

how do we increase lifetime value how do

we get recurring Revenue in place in the

zero to one million what becomes a

problem thereafter is we don't make

enough money per customer and so we need

to figure out what more does that

customer want that I can sell them

that's really what we want to figure out

from one to ten million now what goes

with that is you can't really provide a

product to customers beyond what you're

doing today without building somewhat of

a team the skill that goes along with

that is learning how to hire now why do

I say learning how to hire and not how

to train because I believe that in small

businesses it makes more sense to get

good at picking people than it does

training people the reason for that is

it is much harder to train people when

you only typically in a small business

have to hire one of every role so should

you as the leader take the time to get

proficient at one of everything at it at

Finance at sales at marketing probably

not that would probably take all of your

time and you might actually drop the

ball on the things that you are doing

that are Paramount to the business

figuring out how to extend LTV of the

customer paired with figuring out how to

hire the right people and identify what

roles are needed are the two skills that

are going to take you from one to ten

million the reason that increasing LTV

is often a better alternative to just

selling more people is because it

actually costs you less in the long run

to acquire a customer is typically more

costly for a business than it is to

extend the lifetime value of that

customer so an example would be a

fitness app they get customers on those

customers pay say like 100 dollars a

year and what happens is that in the

beginning cost of acquisition is low

because you're new to the market you've

got something working really well you're

able to acquire customers say it's like

a one to two ratio over time what

typically happens is the cost of

advertising only continues to get more

why because more people get on the

platforms so you're competing against

more people and more people saturate

your market and so then what you're

doing is that your margin per customer

continues to shrink over time so say

you're selling that 99 app and say you

were profiting forty five dollars say

three years ago and now you're profiting

ten dollars not looking very good not

easy to run a business on those margins

and so rather than saying let's sell

more people I would say okay let's

extend the lifetime value of the

customer after they purchase your app

what do they go purchase after do they

go buy supplements do they go buy

clothing do they go buy resistance bands

what are they buying as they continue to

use your app that you're not selling

them that's where you have room to look

at the LTD of a customer the cost of

acquiring them can continue to rise and

as long as you can continue to sell them

more things on the back end without

having to acquire a new one you can

increase the margins of your business

and compete against everybody else while

they're trying to squirm for like how do

I reduce my cost of acquisition you're

like I don't care because I'm making

more money on the back end so then you

can beat your competition and again this

is why knowing your customers so

important you know with Jim launch for

example we knew what people wanted after

they were in our 16-week program we

understood because we'd been there when

you really understand the customer you

understand what they need after your

product and so it makes it much easier

to figure out how to extend that LPB

because you've been a customer before

you've been in their shoes or you know

them so intimately that understanding

all the other things that they're going

to buy is really easy for you now when

it comes to those early hires how to

identify who you need to hire at this

stage comes down to this quadrant I

think of there's things that you hate

and Saka there's all the things you hate

but you're good at there's things that

you're good at and there's things that

you like and you're good at the first

thing you want to offload is the things

that you suck at and you hate what are

the things that you suck at and hate

that are most important to the business

growing you usually want to offload the

things that we hate but are good at

right like sales or marketing because we

might have gotten sick of it by now but

we don't want to offload those things

business can't afford to have the close

rate drop from 85 percent to 50 we gotta

extend lifetime value first whatever

you're good at in the business like

extraordinarily good at keep doing and

start Outsourcing the other things first

so saying I was doing that I sucked at

and I didn't like was tech support so in

the beginning we brought in all these

customers and in order for them to get

their marketing up to build out funnels

to get you know Facebook ads launched

Instagram as launched they need a lot of

technical help and I am not good at that

because I've never practiced and I

didn't enjoy it you know I probably

didn't enjoy it because I suck at it

because like we know when we suck at

things we don't really like them

needless to say that was one of the

first things that we hired for was

people who were very technically

competent now the second thing that I

hired for was somebody that could take

the things off my plate that I might

have been good at but they weren't worth

my time meaning it was low dollar per

hour work which is another filter you

can run this through which is like you

always want to Outsource first the

things that are the lowest dollar per

hour because those things can then make

rooms that you can focus on the higher

dollar per hour work and so then I

brought on the executive assistant now a

lot of people ask me they say Layla I've

heard higher slow Fire fast I'm not

really the biggest fan of that because I

think it's taken out of context you know

I think that at this point like do you

even know to hire well are you even that

skilled at hiring do you even know what

fast or slow is right probably not not

if this is your first business and so I

think that what I would rather focus on

is higher well firewell learn how to

hire people well learn how to set great

expectations for them provide them with

job descriptions give them a clear idea

of the deficits of the company and the

problems they are going to solve if they

come and join you and on the other side

when I say fire well means first make

sure that you've done your part in terms

of setting the right expectations

onboarding the person properly training

them properly and making them aware of

the things that they need to work on

because if you've never communicated

those things to somebody then why are we

firing them rather than just having a

conversation in terms of how much to pay

yourself I think it comes down to

understanding why did you start the

business did you start the business to

make money for yourself or did you start

the business to have an impact on an

industry on a specific kind of people in

the beginning when we had gym walk we

were broke and had debt and so we wanted

to make a ton of money from the business

you know we took out as much cash as

possible from the business in terms of

acquisition.com you know now we have

enough money we don't really care how

much money we're taking on the business

in fact we don't intend to make money on

this business for years we're

reinvesting most of the capital it just

depends on where you're at in your life

and what the objective is I don't

with the gray so a lot of people will

play in the gray they'll say hey I'll do

this little tax strategy like hey you

know there's a chance one day you know I

don't do that if there's ever a chance

of anything I'm just completely

risk-averse to that I don't want any

gray I think that that's a personal

question you have to ask yourself but I

will say that if you ever want to sell

the business investors will devalue the

business for taking too much risk from a

tax standpoint so if you're watching

this and you feel like some of these

things are helpful for you let me know

in the comments which ones are the most

helpful and let me know which ones

you're still unclear on so that I can

make another video on it now the next

phase is 10 to 50 million the problem

we're solving is inconsistency and often

what it takes is just experience and

seeing over time that one inconsistency

at times is normal to have but once you

can get consistency in place through

systems then you feel much better about

the business because you know that you

have systems in place to mitigate the

inconsistency when it does arrive and so

what are those things it's

professionalization of management

professionalization of systems and

implementing data as a practice or as a

core piece of the culture you can work

up to 10 million and not have a ton of

data I see businesses do it all the time

like they're able to get there just

because like they really understand the

customer they really know what they need

and they're able to get to 10 of 12

million without having a dashboard kpis

measurements in place but to stay there

and to continue to grow gets

exponentially harder especially as you

grow the organization and you're relying

on everyone's Word of Mouth which is

harder to get as you have more people

and not data systemizing data

integrating that in creating a dashboard

and then professionalizing the business

is what you want to focus on now how do

you professionalize a business you

professionalize management when you get

from 1 to 10 million usually you can do

so with people that are promoted from

within with honestly even just like two

to three leaders who maybe are the

founders you don't need too much in

place but in order to get past 10

million and honestly even to set

yourself up well and not want to rip

your hair out when you're at 10 million

getting functional leaders in place who

have been there done that is really

important and the reason I like bringing

people in who've been there done that is

because you don't need to bring the

whole organization in from the outside

but to bring certain people and put them

in leadership seats so they can mentor

others beneath them that's really

powerful because otherwise it's going to

fall on you you're going to be the only

Mentor there's going to be everyone

looking to you for answers and you're

like hey I haven't done this before

either and so in order to actually get

from 10 to 50 million you need some

people who have been there done that you

need enough of them that they can help

educate the rest of the people on the

path forward now it's not easy to find

these people I'm not going to pretend

like it is it's the same as finding

customers how do you find people who are

experienced when you are not that is

really what the question is why should

they work for you when you have less

experience than them so really what you

need to do is develop your employee

value proposition which is why should

employees want to work for you and not

somebody else just like your offer that

you have to the marketplace which is why

should somebody buy your product and not

somebody else's it's the same thing but

done internally is it higher pay is it

culture is it flexible remote work what

is it that you're going to provide here

and then a better way to even engineer

is what are the type of people that you

want and what do they want do they want

remote work do they want higher pay or

do they want learning opportunities just

like you find out what do my customers

want you have to figure out what do my

employees want and then that is what

you're going to provide and that's how

you're going to attract them how you do

that mechanistically if you can get the

offer right the next thing that you need

to do is get the platform right which is

where do these people live well we know

that LinkedIn the average person on

LinkedIn is making more than eighty

thousand dollars a year so if your job

that you're posting for is making forty

thousand dollars a year are we going to

do it on LinkedIn or indeed we're

probably going to do it on indeed versus

if we're looking for people making over

a hundred thousand dollars a year we're

probably gonna post it on LinkedIn so

for example in gym launch we had a very

large coaching department and that's

probably a department that a lot of

people struggle to scale in fact I would

say is one of the hardest and the reason

for that is to find a gym owner who's

proficient enough who has the track

record that other gym owners will listen

to they might be making a million

dollars to their gym taking home 300

Grand a year so why would they want to

come work for gym launch at you know 100

000 a year Well I realized that they

wanted to learn from Alex and myself

more than they wanted more money our

value proposition to coaches was that

you were going to learn directly from us

you're going to get access to everything

that we know ahead of everybody else and

we're going to Mentor you like you

Mentor your clients the reason I think

this stage is hard is that you have way

less peers you can rely on every year

that goes by less and less businesses

are able to continue to grow you know

they might be stuck at a million or two

million or three million or 5 million

what I found difficult was that I used

to be able to find mentors who could

help me with all aspects of the business

and what I realized very quickly that I

had to segment and find mentors for each

area of the business people had domain

expertise rather than holistic business

expertise so I found people who were

great at investing found people who are

great at Finance found people who are

great at technology found people who are

in that domain great and then you know

paid them for expertise paid them for

insight hired them if I needed to

whatever to figure out what we needed to

do to professionalize those areas but I

found that where a lot of people get

stuck here in the reason it's hard for

them is they're still listening to

mentors who helped them get to 10

million but those people themselves

aren't past 10 million and so it's it's

really hard to get advice from somebody

who's not been where you're at now I

will say there are professional people

who are just very good coaches some of

them in Silicon Valley for example like

they haven't even been business owners

but they can coach people but that's

different that's not the same as telling

someone how to grow a business some of

the best basketball coaches of all time

haven't played on the court so a lot of

people ask do I fundraise you know

should I raise money to grow my business

I think it depends on what the end goal

is would you prefer to own 100 of the

business or would you prefer not to do

you have the skills it takes to manage

multiple stakeholders or do you not have

those skills I see that a lot of people

who have started successful businesses

before do well raising money because

they understand the value of having

other expertise there so I think that

you have to be self-aware enough to

realize is this something that I can

take on on top of starting the business

and weigh out the pros and cons for

yourself the final stage 50 to 100 is

all about Innovation and talent I mean

innovation in a few different ways

typically a business can get to 50

million or even 100 million with a very

simple product line and organically

growing more sales more marketing more

CS more of all these things more

infrastructure but then a business gets

to a point where it's at its

hypothetical organic Max this vehicle in

which we've built the business it can't

go past 80 miles per hour so we might

want to go to 120 miles per hour but

this car isn't going to get us there and

so the business often fundamentally has

to change this is where you see people

sell to private Equity you know what

private Equity does they add in

technology said the business becomes a

technology business which is

automatically increases Enterprise Value

and it creates additional products that

you can sell that have more recurring

Revenue typically another thing that you

do is you see vertical integration which

is we're selling supplements but we

don't own this Supply chain we could

automatically go from 50 million to we

could be worth 250 million if we buy all

the supply chain and this is where you

see really a business become a business

of businesses The Innovation occurs

where you say okay we've taken this the

best darn place we can organically now

we have to figure out what does the

business need to become to go past 100

million what kind of business does it

still remain a service business does it

need to become a technology business are

we keeping up the market what does the

market want now is the way in which

we're delivering the product and

providing value still as effective as it

was or could we innovate it and take

more market share and so the question is

really how do you do that and how do you

operationalize that and a huge way that

you do that is by one attracting higher

level Talent having a true executive

team that can run and not just run grow

the business without you and innovate it

on your behalf bring new ideas to the

table bring different perspectives bring

experience from areas that you don't

have you know if you need to turn the

business into a technology business what

do you need to do find people who have

built technology businesses if you need

to vertically integrate what you need to

do find somebody who's vertically

integrated the business becomes a

machine of its own and it's one that it

requires more than one person to run and

often what happens is that Innovation

starts to die around 50 million because

one person's brain can only fuel so much

you need more innovators and more

thinkers on behalf of the business in

order to get it to 100 million and

Beyond that's why I think there's really

two sides to this which is how are we

going to innovate the product or the

business as a product and what kind of

talent do we need to allow for that

Innovation because it can't be the

founder anymore they can't do this all

on their own and you might not feel like

this relates to you but I actually would

really encourage you to think like what

does my business need to look like three

years from now say you're at 2 million

right now or 3 million or 10 million

like we're always talking to our

Founders about what's the vision three

years from now I'm not going to say five

I'm not going to say ten but three and

then reverse engineering back when do we

need to start thinking about vertical

integration when do we need to start

considering if we should become a

technology platformer we should do a

Tech play when do we need are thinking

about if we're going to be a business

that buys other businesses we need to

start preparing for those things yours

in advance and so it would behoove you

not to think about this stuff because

what happens is that a lot of people

take action up to 50 million that make

it much harder for them to grow Beyond

50 million and if you're not at least

informed and you're still unconsciously

incompetent then the amount of time it's

going to take you to educate yourself on

what needs to happen

the opportunity will be gone and you

won't have a chance to grow the business

to 100 million and Beyond because you've

lost the opportunity somebody else has

taken so at the beginning of the video I

said I was going to give you a few

pieces of advice if you're interested in

selling your business at some point I

would say the first thing is understand

that your business is a product to a

greater Marketplace the private Equity

or the Venture capitalists or the family

offices that would be interested in your

business understand what kind of buyer

would want your business and for what

reasons would they want it private

equity for example oftentimes wants many

businesses purely from a financial

investment they're trying to make

Returns on their money anything that

puts that at risk is not something

they're going to like versus a strategic

buyer so say you're a cookie business

and you're small you say hey that big

cookie business might want to buy my

small cookie business because I got a

recipe that they might want I would go

to them when you're small and say what

would you want to see out of me to buy

me when I'm a little bigger and so that

would be a strategic buyer and a

strategic buyer would most likely take

the business put it under their umbrella

Allah you become one of their businesses

and they would probably keep things a

little bit more intact but your brand

would get immersed under their brand in

that scenario they might pay you less

than a private Equity buyer why because

they might plan to do more work on the

business than private equity on the

other side you might have someone like a

family office buying it and a family

office might just be wanting a stable

asset that can hold money doesn't even

need to get crazy returns and so they

might buy the business and say just keep

doing the damn thing we don't want to

touch a damn thing we're just going to

put our money in my biggest piece of

advice is to understand who would

possibly buy your business in the future

who would this be a product for and then

ask yourself or even better go find them

and ask them what would you want to see

out of this business for it to be a

viable business to buy now I will say

that there are some common traits that

all of those investors might look for

right the first one is that there's not

key man risk most investors do not want

to buy a business or invest in a

business where one person makes the

majority of the decisions they want to

know they can remove the founders

seamlessly and things will still run as

is the second is customer concentration

risk which is do you have too much of

your Revenue coming from too few

customers again this is a huge risk for

investors of any kind and so if they see

that there's only a few customers

driving majority of the revenue that's

not appealing to them and then the third

piece is lack of consistent Revenue so

that usually stems from lack of

structure in place for a sales team

churn coming from not the best practices

on the product side or maybe poor

packaging and lack of consistency with

systems and team overall that being said

if you're going to do that you might be

wondering what kind of business am I

going to start and that is why I made

this video where I basically rank

different business opportunities and

give my insights on what I think are

pros and cons and strengths and

weaknesses of each one