How to Grow Any Business to $10M a Year — Transcript

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1. 0:00If you have the goal of getting to $10
2. 0:01million a year, you can pretty much do
3. 0:03it in any business.
4. 0:04If you have the goal with with the
5. 0:06exception of if you are a brick and
6. 0:07mortar and there's 100 people in your in
7. 0:09your local market, probably not. But
8. 0:11outside of that, um
9. 0:13that business model, even if you were in
10. 0:14a tiny market, could get to 10 million a
11. 0:16year. You just open up a new markets.
12. 0:18That's all you do, right? Um and so most
13. 0:22people's goals are achievable within
14. 0:23their current vehicle. They're just too
15. 0:25impatient and believe that there's
16. 0:26another shiny object that somehow will
17. 0:28get there faster. But if you take the
18. 0:29natural extreme and say, "If I only did
19. 0:31one thing for 40 years, do I think I'd
20. 0:32be successful?" Probably. And so if you
21. 0:34knew that to be true, then that would
22. 0:35give you a very strong reason to stick
23. 0:37with whatever you're doing. Because let
24. 0:39me give you a visual for this.
25. 0:41This is the cost of switching.
26. 0:42So, if let's say that you're in year
27. 0:45three
28. 0:47of your current current business, okay?
29. 0:50Or current opportunity. It doesn't
30. 0:51really matter what it is. So this is
31. 0:52one, this is year two, this is year
32. 0:54three. Okay.
33. 0:55Now, what people want to convince
34. 0:57themselves is that they're like, "I want
35. 0:59to start this new thing." Okay, that's
36. 1:01fine.
37. 1:01You want to start this new thing. So
38. 1:03let's see that year one of this new
39. 1:04thing is higher. Okay, that's fine. This
40. 1:06one is a little bit higher than this one
41. 1:08in year two. But the thing is is that
42. 1:09this is year one of this year,
43. 1:13but it's year four here.
44. 1:18You're still
45. 1:20behind.
46. 1:21And not only that,
47. 1:23growth when you get bigger
48. 1:25is easier than growth when you're
49. 1:26smaller.
50. 1:31And you're like, "Okay, well maybe maybe
51. 1:32this faster rate of growth
52. 1:34I'll be able to catch up."
53. 1:36Okay, well now you're year two.
54. 1:38But now we're at year five over here,
55. 1:40right? And so the head start that you
56. 1:43give yourself
57. 1:45by sticking with something, like
58. 1:46sticking with it is how you get the head
59. 1:48start. It's how you keep the head start
60. 1:50that you already began.
61. 1:52That's something I think so many people
62. 1:53miss when they're trying to go to this
63. 1:54next opportunity. Unless there is
64. 1:56something inherently wrong with the
65. 1:58assumption that you have, and skill is
66. 2:00not the deficiency that you need to
67. 2:02overcome, which it often is. Most of the
68. 2:05time people get stuck on things that I
69. 2:06call features not bugs, and this isn't
70. 2:08my invention. Is that there's an element
71. 2:10of your business that makes it hard.
72. 2:11There's an element of every business
73. 2:13that makes it hard, but that's what
74. 2:15makes it a business and that's why
75. 2:16you're compensated for it. If you're in
76. 2:18the cleaning business, the difficulty
77. 2:19you're going to have is attracting and
78. 2:21retaining high-quality talent. If you're
79. 2:22in the fitness business, the difficulty
80. 2:24is attracting customers and customer
81. 2:26retention because people are inherently
82. 2:28really shaky um about staying with their
83. 2:30fitness goals, but they typically stick
84. 2:31with their cleaners for a really long
85. 2:32time. Right? And so every business has
86. 2:36elements that make it shitty.
87. 2:38It's just the name of the game. And you
88. 2:40know what, I'll give you a different
89. 2:41frame on this.
90. 2:42So, if you were to think about different
91. 2:45business models. So, let's think about I
92. 2:46I doubt many of you guys have heard
93. 2:47this. So, this is pretty sweet. So,
94. 2:49let's say that you've got uh e-commerce.
95. 2:54You've got uh
96. 2:55let's say you've got service.
97. 2:58You've got um
98. 3:00let's say info
99. 3:02education media, and let's say you've
100. 3:04got SaaS. All right, so software. Okay.
101. 3:08So, let's say that these are four
102. 3:09different opportunities. Each of these
103. 3:11opportunities has a different shape.
104. 3:14So, info
105. 3:16looks like this.
106. 3:18Starts really fast, very difficult to
107. 3:20scale. SaaS is the opposite. Starts
108. 3:23really really slow, scales really really
109. 3:25fast.
110. 3:27E-com is more like this. You can scale
111. 3:29fast, but there's difficulty with
112. 3:31typically cash flow because you have to
113. 3:33continue to buy more inventory. Uh you
114. 3:35have supply chain issues, you have to
115. 3:36switch suppliers, switch 3PLs so they
116. 3:38can handle your volume. All of this
117. 3:39stuff happens as you continue to grow.
118. 3:41So, it's more like
119. 3:43Hold on. It's more like this.
120. 3:46>> [snorts]
121. 3:47>> That's the shape of e-com.
122. 3:49Right? And then service businesses are
123. 3:51more like this.
124. 3:53The slowest, but they are steady.
125. 3:56And so when you see these four shapes,
126. 3:59many of you guys just hit the crappy
127. 4:01part of whatever the opportunity that
128. 4:03you're on is, and then say there's
129. 4:05something wrong with my business,
130. 4:06therefore I should stop, rather than
131. 4:08seeing it as what it is, which is this
132. 4:10is just the nature of how this business
133. 4:12works.
134. 4:13This is a feature, not a bug. It's going
135. 4:15to be harder for you to attract really
136. 4:17good talent in engineering and build
137. 4:20software, and you're probably going to
138. 4:21be not profitable cuz most software
139. 4:23sells for a lower ticket most for a
140. 4:26period of time, and it takes a long time
141. 4:27to get a product to actually be good.
142. 4:29And so you're going to basically burn
143. 4:30money, burn time for a long period, and
144. 4:32then eventually you can scale to the
145. 4:33moon, but it takes a long time,
146. 4:35sometimes years to get there. A lot of
147. 4:36people don't have that level of
148. 4:37tolerance.
149. 4:39Info on the other hand is kind of the
150. 4:41exact opposite of that. You can make a
151. 4:42lot of money really quickly, a lot being
152. 4:44relative, right? You're probably not
153. 4:45going to become a billionaire, but you
154. 4:47can make a million dollars,
155. 4:49and then very quickly it gets very
156. 4:51difficult to scale it.
157. 4:54I'll say like info specifically more
158. 4:55like coaching, things like that. And the
159. 4:57reason for that is cuz there's almost no
160. 4:58no revenue retention. People don't stay
161. 4:59around. Once you learn something, you've
162. 5:01learned it. That's why people graduate
163. 5:03school. They learned, right? Service
164. 5:05businesses, the issue is people. Because
165. 5:07it's a very people people heavy
166. 5:08business. You have to constantly be
167. 5:10hiring, onboarding, and training, and it
168. 5:12depends on the service you're providing.
169. 5:13If you provide weight loss coaching
170. 5:15service or weight loss services, I use
171. 5:17that as an example obviously cuz I came
172. 5:18from that, you you have you have it's
173. 5:20easy for you to get talent because lots
174. 5:22of people want to talk about fitness and
175. 5:23weight loss and and and and food all day
176. 5:25cuz they're like really into it. So it's
177. 5:26actually very easy to get good talent,
178. 5:27and for below average prices because
179. 5:30people will do it for free. On the flip
180. 5:31side, customers never want to do it, and
181. 5:33so they're canceling all the time. If I
182. 5:35had an accounting firm, it's the
183. 5:36opposite. Accounting firms have super
184. 5:38high annual stick. What's the difficulty
185. 5:40with accounting firms? Getting the
186. 5:42people who can do accounting. It's
187. 5:44almost always this balance, right? If a
188. 5:46lot of people want to do it, there's
189. 5:48going to be a lot of competition,
190. 5:49there's very low barriers to entry, and
191. 5:50as a result, customers have lots of
192. 5:52options, and they don't want to do it
193. 5:53themselves. If uh there aren't as many
194. 5:56options, and you have a sup- supply
195. 5:58supply constrained industry, then you're
196. 6:00going to have issues getting talent.
197. 6:03Fundamentally, and you can look at this
198. 6:04at the business level, but you can also
199. 6:05look at the at the at the uh at the
200. 6:07industry level. And so, I talk about
201. 6:09demand constraints and supply
202. 6:10constraints at the business level, but
203. 6:12you can see if you are way off track
204. 6:15based on do you match with your
205. 6:16industry. If your industry, and by the
206. 6:18way, if you are if you're the inverse of
207. 6:20your industry, you're usually doing
208. 6:21something either really wrong or really
209. 6:22right. Side note. So, great way to think
210. 6:24about it. If you can be
211. 6:27supply demand constrained in like the
212. 6:31cleaning business example that I gave.
213. 6:32If you give supply constraints, sorry,
214. 6:34demand constraints, as in
215. 6:36I could take a hundred times more
216. 6:37customers than I currently am with my
217. 6:39cleaning thing, well, then you've either
218. 6:41figured out something really amazing
219. 6:43with cleaners to like attract them in
220. 6:44and like like you're about to go hyper
221. 6:45scale, or you're just starting out and
222. 6:47you haven't done anything yet. There's
223. 6:48either something really right or really
224. 6:50wrong with what you're doing. But most
225. 6:52of the time, you probably match the same
226. 6:53constraint of your industry. And the
227. 6:55problem with not being experienced is
228. 6:56you think there's something wrong.
229. 6:58And so, then you end up spending
230. 6:59multiple years not being all in on your
231. 7:01opportunity, and then being upset that
232. 7:03it's not growing as fast as you want it
233. 7:04to grow.
234. 7:05When in reality, you never really gave
235. 7:07it a shot because you're always looking
236. 7:08you're kind of like the kind of like the
237. 7:10guy who's in the marriage that they're
238. 7:11like you know, they they were in love a
239. 7:13while ago, and you know, there things
240. 7:16are okay, but they you know, he's got a
241. 7:17wandering eye, right? He's always
242. 7:19looking, he's always you know, trying to
243. 7:20look for the next thing, the next girl,
244. 7:21the next whatever. And he's like, "Well,
245. 7:23my marriage isn't good." It's like,
246. 7:23"Well, no You're spending all your
247. 7:25time looking at these other
248. 7:26opportunities rather than doubling down
249. 7:28on the thing you got."
250. 7:31And when you double down on the thing
251. 7:32you got, usually when you take the mar-
252. 7:34it takes way less time I would Okay, I'm
253. 7:37not I'm not I'm not going to make broad
254. 7:39sweeping statements on marriages, all
255. 7:40right? But I will say that in my
256. 7:42experience for my n equals one marriage,
257. 7:44it takes way less time to go from like
258. 7:46we're upset about something to we're
259. 7:48really good than it does to create the
260. 7:50loyalty, the trust, and the track record
261. 7:53that you have from that marriage with
262. 7:54someone else.