25 Years of Business Advice in 27 Minutes

i've been running businesses for fifteen years and i've hit this wall multiple times it's somewhere around seven eight nine ten million in revenue where suddenly your biggest problem it's not a lack of ideas it's a issue with you you're the bottleneck and so i've got this buddy named ryan dice he's got this amazing quote he says the more valuable you are the less valuable at the company is and i read that quote in one of his books a a while ago and it kinda changed my game on how i thought about business and so i decided to have ryan and come on and talk about the simple but very effective framework he has for running companies it's changed my life and it maybe could change yours but on this podcast he shared everything so he shared his whiteboard his spreadsheets his flow charged with his employees it's basically like a thirty minute nba which is pretty insane and very valuable so check out let me know what you think of the comments alright let's get into it i feel like i could rude world i know i could be what i want to put at all in it like a days off on a go less travel two things that i like one is you have this quote which is the more valuable you are at your company the less valuable your company i think this is like for every entrepreneur you will hit this point especially when you wanna sell where it felt really good to be the man to be the one creating all the value to taking all the shots and having your name everywhere in your face everywhere and your your fingerprints all over the business it does feel good from a ego perspective it does feel good to have control but it sucks if you ever wanna go on vacation or sell your business because the more valuable you are to the business the less valuable the business is yeah you gotta you gotta decide do you wanna be down on the court hitting the last minute you know jump shots to win the game or do you wanna be up in the owners box that that is the choice that you make and so you're either going to be the most valuable player or you're gonna own the team most entrepreneurs would much rather be valuable and they would rather do the things that enable them to get started than do the things that are going to enable them to actually achieve the things that they say they want but really they kinda like being important they kinda like being valuable and i think that's you've gotta decide what do you actually want and the nice thing is it it's your business so you get to decide yeah but a lot of times the the problem is impulse control like so like it says as it cuts you off it's it's impulse control i think like i can say that i want something and i do truly want it but twenty years of previous behaviors have to be broken and it's incredibly challenging to actually do that and i think that like evolving as a person is we actually just didn't an episode it on the other day is way more challenging than than a lot of people think i like this graphic you had here of the the the before and after if you know i think the messy sort of entrepreneur which is you know i've been guilty a lot of these here you're working eighty hours a week you're in the weeds if you ask who owns this the answer is mimi me me for each each area the whole team is asking you hey got a minute talk about x you know two hundred times a day you're missing soccer games you can't sell the business because it's all it's too dependent on you and the business owns you rather than you owning the business and then you have sort of the the the ideal sort of outcome here at the end which is you know it's an hour a week for you team execute without you the team optimize without you the team decides without you you can take a thirty day vacation you break revenue records while you're gone and your exit ready if you want right like i an ideal end state and this is for an entrepreneur who wants to exit you know wants to build what is sort of insulting called a lifestyle business but is i think the the the main type of business i'm interested in i use business to having good lifestyle so yes that's that's kinda what i want so what's the process how do you do that that transformation how do you go from player to the owners box fine and the way that you begin to implement it is you have to establish defaults you have to establish certain default constraints i'm going to leave at five thirty every day like i'm just i'm going to do that and i'm not going to show up until nine and what do you know magically i got my work done in that block of time because i did and so just the prioritization of that is going to it i mean that i think that's the first thing that is then going to to force you to at least stack rank your priorities because you can't do everything because yeah you're right we got a million different ideas but what are the ones that we're going to do first i like to say like our ideas are like chocolate cake cannot cotton candy you can only eat so much chocolate cake it's delicious but you can only eat so much of it so what are those what are those things that that you're going to do to begin to to stack rank those and it does come down to again just getting really good at constraint identification we can do everything like we there there's all this stuff that we could potentially do as entrepreneurs we are trained in a adept at identifying problems we see them everywhere we will never not see them but we we certainly can't fix them all at once so what's the one we're going to do next and that's the only question i'm ever asking what is my right next thing what is the thing that i'm going to do next and every problem in business is going to come down to one of two things is it a supply constraint or a demand constraint demand constraints i just need more leads in sales supply constraint please don't get any more leads in sales i can't fulfill the ones that i got and so once i've identified that category now i just to say okay how do we get this done so if it's not going to be me that does it who do i need to bring in to do it and ultimately what it's gonna look like is bringing somebody in who is better than me at one aspect of this so i'm not gonna find somebody who's better than me and everything but i can almost certainly find multiple people who are better than me at one aspect of that and that's what assembling a leadership team looks like what you have to first do is you have to map and visualize what are the core value drivers of the business and every business does three things you make stuff you sell stuff and you fulfill stuff and so if you will create a visual map of how that happens and so we do this with visual process mapping like we literally we'll get go to a whiteboard and get sticky notes and we'll say okay how do we get customers let's sticky notes this out in flow chart form and you're basically creating like assembly lines that connect is that the right way to think about this like it's literally like a pipeline something comes at the start then then what happens to it then then it gets handed off over here then it gets handed off over here right that's kind of what you're doing exactly so this is this is an example of one that we would do just in sticky note version but like this is an example of the growth engine so where we would start is you know how do we generate initial awareness so like let's say for this business they run facebook and instagram ads they run google ads and they're doing you know real security yeah so we're gonna start here and then we're gonna say okay cool then what happens and so for this particular business they're driving traffic to an email challenge so they're gonna have people sign up for that challenge page and then all you're doing is just saying then what happens well do they register if not then we're gonna re target if yes we're gonna deliver it and all you do in this process just keeps saying okay then what then what then what and if you just will map the process and i didn't invent this this is called business process mapping but if if you will just say where does it start where does it end and you will create a business process map for everything that you do as a company and and specifically if you'll do it for how you get customers once you what you do with them once you have them and how you know you could also do it for your manufacturing process or your product creation process then what you've done is you visualize the core value creation aspect of your business have you ever done this sean yeah but the question is what are you doing it for so you know there's a couple different ways you can look at that one is you look at it you identify where that could constraint you know the problem is this part working well like you know what we would do is we would overlay some numbers we would take great so how many how much are we spending on those facebook ads how many clicks are those driving so i would have a little numbers written on the arrows basically and then we would kinda circle the one like where's the leak in our bucket you know this is the this is where we feel weak you know we got a lot of demand but maybe you know we're breaking in terms of how many we can fulfill there's a long wait list right or they're not coming back why aren't they coming and you try to identify the constraint so is that why you do the business process map or is there a is that the first thing you do with there what's the what are the different things you do once you create the map so this is kind of a a digital example of the growth engine i just showed you and this would be like their fulfillment engine so what i would do is we would take this growth engine and one of the first things that we would do is we'd would say okay which of these can we really not afford to screw up so one of the the biggest mistakes that companies make when they're trying to to system is they try to document everything don't do that just document the ones that are really really really important the second thing that we do is this is how we figure out who we need to hire so we create this thing called high output team canvas and so every single one of the sticky notes every single step stage on here we're gonna say okay this one right here facebook and instagram ads who is uniquely responsible for this one and then we will create this canvas so i'll go down to the marketing team and i'll say okay you've got you know john here john is gonna you know collaborate with agencies to you know establish those those budgets but ultimately it's gonna be our agency that's gonna manage and optimize these so every single sticky note every single box is going to have corresponding what we call critical accountability boards and this is how we begin to assign roles and responsibilities so that's that's the the second thing that we do with this and it becomes interesting because as you go through these instead of going to people and saying okay what does you know what does betty do you know what is what does lloyd do what does carly do you start with your value creation processes and you you assign stuff to the people and when you're done you realize who's got all the things and who's got like none of the things and so you can see on your team who's over barbie with work that actually matters and who is under burton with work that actually matters but to the point that that you made this is how we create our scorecard so for our scorecard every single one of the different squares every single sticky note if you will is gonna have one or here corresponding metrics on the on the scorecard and so this is how we know that we're actually tracking the metrics that matter and so when you look at your scorecard and our scorecard if you work top the bottom that's gonna visualize what we're seeing as we work across here alright check this out so ryan is giving away his entire operating system i'm talking about the actual spreadsheet he uses to run his companies everything from sprint road roadmap and workflows to planning tools the whole thing the same system we're talking about in this episode you can get it right now scan the qr code or click the link in the description now let's get back to the show when i see things like this it's sort of like reading the book how to win friends and influence people where you like saying stuff and i'm like yeah that's obvious that makes sense and yeah i don't do it and i'm like i would love to do this i should do this what what mistakes am i likely to make when i see the stuff because to me as someone you know what do they say like like it's easy to sell like it's easy to sell water to like a guy in hell like to me this is like where i am now where it's like yeah i need this and so i see there's like five or ten of these types of frameworks and i'm like i want all of them i need all after this sam gonna go run off and do it what's the first place he's gonna stub his toe yeah where am i gonna screw this up let's first kinda talk about like the hiring come component because that is one of the things that i see entrepreneurs as they're scaling screw up and they they tip they make one of two really big mistakes the first is they hire helpers or they wanna try to hire somebody just like them and like it's these two opposite ends it's like so they they either try to hire a bunch of helpers to just do the stuff that that they don't wanna do or they're like oh if if only i could hire somebody just like me if i could hire like a quote unquote integrator yeah is one of the biggest lies ever per on the entrepreneurial community is this concept of i as the visionary snowflake can just hire this like one magical integrator will just do all the crap that i don't wanna do it just does not freaking work it makes for a very good book it just doesn't work ever in practice so it's not about you changing necessarily what it's about you doing is getting really good at identifying what is the single biggest constraint right now in my business right what is that right now in my business today for us to grow to the next level and it's never ideas and this is the thing as as entrepreneurs as business owners what we do in the beginning what what gets us going is i got an idea and so like that's the freaking hammer that that that we take to every single nail i got a new idea and the last thing at some point that your business needs is another new idea it doesn't need another new thing to implement what it needs to figure out is what is the thing that is holding us back from the level you know of growth that you need so the the first shift that needs to happen is shifting from i got an idea to shifting from cons to constraint identification once you have shifted from idea generation to constraint identification then the answer becomes okay what's the best way to solve for this constraint and it's almost always system and people related but it's almost never hire a bunch of helpers because when you hire helpers what you actually did is you gave yourself a new job called management which even harder or let me hire somebody just like me because somebody just like you've done work wanna work for you what you need to typically do is realize that that constraint is solved by a functional leader and so what you need to get good at is hiring very very very good and talented functional leaders so head of sales head of marketing head of product and this is the thing that most entrepreneurs aren't as good at as they're scaling they're good at hiring a bunch of the helpers they think they're good at hiring a quote coo although nobody actually knows what that is if you can get really good at hiring a functional leader in building a team of those mounting leadership becomes a lot easier when you have really when you have three or four actually talented skilled people working for you they have massive capacity because they'll build the teams under them to execute all your ideas today's episode is brought to you by hubspot did you know that most businesses only use twenty percent of their data that's like reading a book but then tearing out four fifth to the pages point is you miss a lot and unless you're using hubspot the customer platform that gives you access to the data you need to grow your business the insights that are trapped in emails call logs transcripts all that unstructured data makes all the difference because when you know more you grow more and so if you wanna read the whole book instead of just reading part of it visit hubspot dot com sean two years ago you're were like i just hired this i think i think you said i just hired this vp of marketing or see i forget exactly it was a marketing position i afraid the title and you're like what was was it cmo and you were like yeah why didn't i do this sooner and i remember thinking oh man you found a winner like that's like the the highest leverage thing that we can do is just like find winners and it's so challenging but i remember you like talked about finding this this this person and your like frame was broken yeah there's a new test for is this person a good hire or not which is you basically you switch from i i wish this would happen or i hope this would happen or i want this to happen to basically fear that will this person leave because oh my god this person is so good and they are like they're so transformative to the business and i just don't have to worry about that and then if they ever left i would have to worry about that area of the business again i think we had a john morgan on last last week and he has this phrase he's called send and delete people he's like there's people in your company that you could just send them the email you could forward them the email and you could delete the email because you know it's gonna get handled and you know brian this thing you just said is is so true i actually was talking about this last week about helpers i was like talking to somebody on my team i was like are you gonna be a helper like so far this is work because i needed to you as my helper but now i'm asking you to drive but you still are acting like a helper and like but you wanna be a driver and we need a driver so like it's time to be a driver now whether that person can can make that adjustment or not i think is is is always just about that person and their their own kind of goals and self improvement and self development their their self image but it's so true that it's very very tempting to hire other just kinda entrepreneur people like me great now i another sort of like shiny object syndrome idea guy in the room that doesn't help or i got a helper who as long as i'm directing everything they help me get stuff done but that means i always have to keep keep my eye on that area because i'm the one coming up with the plan i'm the one driving the execution and they're just you know there to help it's i've i've definitely felt this problem first dan the the biggest mistake that people make when they when they map their their business process maps is they will up what they wish were true instead of mapping what actually is and and so you have to map what actually is happening today not like well what we should be doing is this like that's generally unhelpful you need to see all of those as points of future optimization because we've gotta get a picture of what it is today because that's what's going to inform what are all of the people actually doing or what should they be doing what are the metrics that that we do need to track the other kind thing that you wanna make sure that you're doing is that you are starting from the audit of those value engines so you you you don't want to just say i'm gonna build out my scorecard because that looks cool okay but what are the metrics that you're picking because if the metrics don't that that you're tracking if they don't all link back to a step stage you know on one of those business process maps then you could very well be tracking something that doesn't matter i'll give you an example when we rolled out our scorecard to our team we had somebody on and our company who was like hey we don't currently have any metrics for this was at a digital marketer one of our companies we don't we don't currently have any metrics for our email newsletter why don't we have that i was like well where where show me where the show me where the newsletter feeds into anything like oh well you know it's it's good for awareness and engagement of the list like okay but how does it drive into anything and the answer was it didn't because the newsletter didn't show up as a sticky note on any of our growth engine because at no point in the newsletter did we ever link off to anything that was meaningful it never showed up it never wound up as a sticky note on anything like that's that's why it never showed up on a on one of our you know growth engines which is why it never showed up on the scorecard we're not tracking the metrics so i had to say to the person like look if you can show us where this actually has an impact on one of our you know on on on our growth engine then then you'll get some metrics to track and until then you won't and if you don't then we're gonna stop doing it completely there's so many orphan activities that companies are doing that it's because you're doing things that don't have a a a sticky note that's represented anywhere and so that's the other kind of mistake and say that people are making i think i read somewhere that someone said like i think it was jason lump it was like if you get to a ten million dollars in revenue it's you'd one hundred percent your business can one hundred percent get to a hundred million in revenue do you think that what stops people from growing from ten to a hundred million or whatever this arbitrary like it's kinda working too it's a huge home run is like being better operators like being system and things like this yeah it's almost always systems at the at the end of the day i think it happens earlier like really this swamp of scale happens that kind of afford to six million that's no man's land that's when you probably need three people that you absolutely can't possibly afford right there's like three you know vp level kind of roles that that you can't afford yet but if you could get them they would take you up to twenty million at that point you would have the the margin you would have the cash flow to be able to get the rest of the people to then be able to scale to the next level and the only way that you can bridge that gap is through systems you're not gonna be able to bridge it through through just brute force through just chewing rocks like that's what's gonna get you from a million to two million like you said maybe for for really you know motivated people up to seven eight ten but it is not gonna get you beyond that you're gonna have to get really really really talented people and really talented people are expensive and the only way you're gonna be able to create that margin is through systems also really talented people wanna work for good companies one of my like least favorite pieces of advice is like oh just go hire talented people that's like saying to you like you're sad lonely pathetic friend just like oh just only date tens that's not helpful you have to become the kind of person that a ten would want to date and it's the same if you want to attract talent at as a business you have to become the kind of business that a players want to come and work for why i say like my goal is not to hire like rockstar stars and eight players my my my goal is to build a company that doesn't require them because i know that that's the kind of company that rockstar stars and eight players wanna come and work for so that happens through better systems if you can put those in place and great people wanna come and work there it's it's why you know big companies get even bigger so me and tyler the ceo of have came up with a little challenge for you it's the newsletter challenge if you know me you know that i'm a big fan of newsletter i got my own newsletter i also had a business that was a newsletter business that was amazing i wrote this newsletter about crypto we grew it to quarter million subscribers and we ended up selling it after a year for millions of dollars and i want you to be able to do the same thing in your business so we're doing a challenge ten grand is on the line plus me and tyler will should be in your corner as growth advisors you would just need to go to bee hyped dot com slash m m and you either start a new newsletter or you move your current newsletter over there and five finalist will get picked pitch me and tyler sort shark tank and the winner gets ten grand so go to bee dot com slash m m that's b dot com slash m m to enter the challenge today is the company of selling this like license of of scalable of the scalability company is that gonna be the best business that you ever founded i mean is it it's it's sort of gonna be like eos i heard eos which is like you know an operational framework i heard that company's sold for like i think ninety million dollars yeah it won't be from that perspective because we we talked about doing the licensed practitioner model with it we don't want to so our model is when when we work with clients we do it all internally and so we're somewhat limited in in terms of what we can do but that's because again for us this is us getting paid to do due diligence because we want to basically have access to the deal flow and so if we were to license our model to other kind of coaches and consultants like eos did it would be a simpler business it would arguably be be more scalable but we would lose out on all the deal flow and so we talked about it but we don't do it so on on one hand i mean scalable this year is gonna do just right in about ten million dollars in revenue which is good and it's really good healthy margins but what we generate from the deal flow is way better than that there's there's one deal that we're gonna have that we got from it that it won't happen this year but it should be missed next year three hundred million dollar company it's not we're not gonna get twenty percent of it we'll it'll be a much smaller percentage of that with a baseline but if this business winds up going public in a couple of years let's just say that's that's a couple of eos for me dude this is why you're fascinating to me when you i think that when you have like i think sean uses this phrase generative i use the phrase prolific you've been like doing stuff for like thirty or twenty years now yeah now and look a lot of it's just being old having done having been around for you know for twenty plus for twenty plus years and being and being in the being in the game for a long time and that's why i tell people like so much of this is is is is patience and and just allowing you know just getting in the stuff and doing it i mean the again the first thing that i sold online was an ebook on how to make your own baby food for fourteen dollars so your first thing does not have to be i went out there i had an idea i flew out to san francisco i i got you know it was in the yc batch and you know next thing you know i'm a a billionaire like that's not how it it has to be it's not how it is for most people it can start pretty humbly what does you first feel rich i still don't feel very rich why not part of it's because we still live relatively below our means i've got four kids and i i never wanted to live in kind of a place where you know they they weren't around i guess normal kids if that makes sense i've seen some of my other friends who they they moved when they hit a big they moved to like very r areas and and there were no kids there for their kids to play with and so my wife and i talked about that like we just sort stayed in the same place that we were in the whole time and so i i i haven't really expanded my lifestyle that much are you still chasing money yeah i think ed the the main reason though is is i still live in a the perpetual fear that it's all going to go away appreciate the honesty i i i feel like most people aren't honest with themselves or others there's about about that you know the same are you chasing money i think most people would you know reflex deny that no i i just love what i do blah blah blah and then it's like but everything you do is about making money and if there was no money you wouldn't do it you know what i mean like and so i appreciate the the completely coin operated i i'm in this for the money i i wish you know and and i and i acknowledge the broken ness of it too by the way like i i wish i don't know that that there is like some some number and it's it's it's also one of those things like i don't even know how much i have it's it's i don't look at it because it's not about like stacking those kind of things and it's the same even with the businesses like i can tell you more about the businesses we have that are broken than i can the ones that are working well you know like it's for whatever reason my focus is always on the things that that aren't quite right than on the things that that are you're you're interesting to me because you come off like a fairly conservative person meaning like super well operated and yet there's this other side of you if that comes off like a guns like screw it put it all in red let's do it if sean like a guy who i'll see a church every weekend but also has a book who calls and it's like whoa okay great i like it you is very close to sean thank you alright that's it that's a pod i feel like i could rude world i know i could be what i want to from at all in it like a day's off on a less travel never looking back alright everyone if you're listening to m you probably want to make more money well i wanna tell you about a podcast you might wanna check out it's called the sales evangelist and it's hosted by donald kelly each week donald interviews the world's best sales experts who share their strategies to succeed in sales they share actionable insights and stories that will encourage challenge and motivate you to hustle your way to the top if you're someone looking to raise your income level check out the sales of evangelist you can find it wherever you get your podcasts