This is why founders stay stuck at $5 million

Well, thank you for having me. I appreciate the invitation.

That's a great question. And it really started with my father. My father, I'm a second generation business entrepreneur. and so I was raised in the family of a of a of a gentleman of a of a man who didn't start in business, but was in sales and eventually just felt like he could do he could run the business himself. And so when I was Five or six years old, 19 mid-70s, my father started his first business. And so I grew up in that business. And so I I would say I was basically conditioned for business. After going to to college, one of the things that I was really I understood was that I'd learned more about business, real business, growing up in business than I did going to a school to learn about business. And And so that's that's that's really what got me my my start in business. It's allowed for all of who I am, my creativity, my my voice. I discovered all that inside of of business. And so I think it was one of those things that I don't I don't know if I ever really had a choice. It I probably I know I did, but at the same time, it just it just seemingly was just perfect for for who I am.

Well, and I would say growing and scaling are not the same thing. there is a difference. because scale is about organization, scale is is about alignment, scale's about a lot of things. Growth is different. And so what I I can't say what stops all companies, but I can kind of tell you what stopped ours or or some of the things that really got in our way. I think the biggest thing that gets in most people's ways, especially in the early stages, is just going for it. is being held back by fear or is will this work, will it not work? Indecision on what to do, what not to do. indecision is worse than making mistakes. So I would I would encourage people, it's better to do something that turns out not to be the thing than to do nothing. And so taking action, massive action, as Tony Robbins likes to say. Is is the key to it. and and that's what separates most entrepreneurs from non-entrepreneurs, is an entrepreneur, a f a true founder, my father, for instance, he was willing to take massive action based on what he knew today. Tomorrow something new may come up, but as of right now, today, and I don't have to know everything, I just have to know enough to be able to go out and have that conversation with a prospect, with a customer. And that's really where it starts is Having those direct interactive conversations with who's going to buy your product or your service. And so that's the number one is getting started. The second thing that we can get into, and we'll talk a little bit more about some of the things that we did that were mistakes, as growth occurred, opportunities start presenting, different things to do. You have money now, you have more products, more services that you could offer, learning to be disciplined, learning to know what to say no to. now that becomes part of the equation of what it's going to take to take growth and eventually turn that into scale. Because scale is about doing a few things, simple things, at a high level and at massive and with massive numbers. That means you can't do a lot of things. You have to understand exactly and you have to be an expert in the one or two things that you are doing. And not just you, but your entire organization. Has to be an expert at doing all the little things that you need to do to replicate. That's where scale and growth to me are different. And I just recently kind of it kind of it dawned on me. What most people call growth or scale is really not growth or scale, it's expansion. It's expanding what you're doing, more things, more products, more services. That expansion feels like growth because it is more, but it's not deeper. It's not more in terms of scale. It's more in terms of activity. And those tea those two things don't peacefully coexist. And so one of the big mistakes that we made attempting to scale was we expanded instead of truly scaling our company.

Well, you spend your time, you're you always spend your time doing new things. You always spend your time pursuing that next new thing. And as a result of that, there's never mastery in the little things that you're currently doing that are profitable. We assume that all the new things we're going to do are profitable because our last thing was profitable. And so that that hubris, if you will, that pride or that that belief that everything that I'm going to do is going to work, that leads us down the road of trying things and taking risk and it doesn't feel like risk in the moment because I have the money, I have the idea, I have the understanding, and there is market potential in what I'm doing. Therefore, that that person is doing well. I can do well with that also. And so because scale is boring. Scale is doing the same thing again and again every day, but scale is a factor. And go ahead.

And that's what a founder, and that's a d a very dangerous thing for a founder because early on in a business, the founder is necessary in everything, right? They're learning and they're teaching and they're showing and they're acting and they're doing all of these things inside of the business. And so everybody's putting a demand on the founder. At scale, that part of the founder that was unique to the founder is no longer as necessary. in fact, it becomes it becomes a problem potentially, because it's a distraction, it can be. So the founder then has to reduce all of that, has to reduce their involvement many times and put people in there that are going to do the same thing again and again and again. And so the create the creative side that was driving the founder early now starts to be the very thing that gets in the way of growth. It that becomes the bottleneck. And so that's where I find myself now spending more time is working with people like me that their companies have stagnated. Because they have become the problem. In the early stages, they were the solution. They solved all the problems. Now they have become the problem that they are the only ones that can solve. The only person that can remove the bottleneck that is the founder is the founder. And that's a hard thing to do. And it's what I had to do. And it was not easy for me to look in the mirror and come to the conclusion that this company was stagnant because of me, not because my people weren't doing their part. It was because I was not doing I I had not evolved. I had not scaled. And there's a lot we can dig into in terms of that because psychologically I loved being in the middle of it. I loved being the center of attention. I loved being the sun around which all the planets of the business you know s orbited. That made me feel good. That made that validated who I was. And as a 30-year-old business person, you know, I'm the one and everything's got this big business. We're all over the world. And yeah, it's because of this guy. Now the that that little eight or nine or ten year old boy that was you know looking for significance in a world where it didn't seem there was any is now getting some of that, that became the problem. And so I had to mature and grow past that. And that's what a lot of founders do is because they're afraid to let some of that go. Because the moment they let it go is the moment they're putting other people in charge and they're no longer the ones getting all of that juice. all that all that dopamine that comes from the excitement of building a business and solving a problem and answering the questions, you have to learn that that that is that's good in the short term. But it will it will stagnate your company if you don't grow beyond that. As a person.

You know, it's a great question. The I think one of the things you have to be looking out for is founder led can also be synonymous with founder dependent. And so any dependency that the company has on the founder ultimately is going to become a weakness. And it's a weakness in terms of where it doesn't mean you can't scale. It just means that your the level of scale that's accessible or that's possible is going to be limited because. There's a level of dependency on the founder. You haven't created a business that can exist without you, which means if you go to sell it, it's not going to be worth nearly as much. It's going to be devalued in the marketplace. It also means that there is a level of freedom as an owner that you're never going to enjoy because, once again, it's dependent on you. And so as quickly as possible, We want to begin empowering other people, not only to carry the weight of the company, but to carry the decisions and the consequences, which means I've got to be okay with other people making mistakes and me writing the check for it. Because as an owner, the person that makes, generally speaking, in the founder business, the person that makes the biggest mistakes in most founder businesses is the founder. And those are the mistakes that cost the most money. I always talked about it this way that if we made a mistake, if one of my people in shipping made a mistake, it costs us maybe 10, 15, maybe up to $100. If one of my supervisors or managers made a mistake, it could cost us a few hundred, maybe a couple of thousand dollars. If I made mistakes, it tend to cost us tens of thousands, hundreds of thousands, even millions of dollars. I've made, I've made mistakes that cost us over 10 million dollars. No one else ever got to that level. But as we started to build a leadership culture where the people could carry the weight of the company, I had to be willing to pay and write the check, so to speak, for someone else to make a mistake at a high level. Because you only get better at making decisions by making decisions. And not every decision you make is going to be the correct one. As an owner, I'm okay with that. I'm I've gotten comfortable with that. And I understand that I'm I'm gonna make mistakes and I gotta pay for them. It's a different thing when someone else makes a mistake that I could have probably avoided. And so learning how to stop being the rescuer, learning how to allow other people to fail and not get down on them, but actually build them up and say that's part of the deal and to be okay with that. That's a huge transition that most of us founders have to make. We don't allow other people many times the same grace we've allowed ourselves when it comes to making mistakes. And so that's probably one of the bigger changes that that any founder has to make if they're wanting to transition. And I'm not talking about a founder at $800,000 or a million dollars a year. We're talking, you know, when you're getting into that four or five, six, seven million dollar a year range in terms of your business. Now, some businesses, you got to transition from this a little earlier, some maybe a little bit later. But but somewhere in that range is where you are already becoming the problem if day to day still depends on you.

can we I wanna I forgot to turn my clock off and it's about to start dancing again. So let me turn that off and then you can cut this out.

I apologize. I have an old grandfather clock and it every quarter of the hour it it it it it reports. So anyway, please please continue.

you know, I'm I've been around this business long enough now that I've gone through a number of what I would say are technical innovations. And I don't want to limit AI to just that. It it it has the it has the ability and it will totally revolutionize how we do business down the road. But this idea, and this is the distractive side of it. You talk about the shiny object or the woman in the red dress, is that All of a sudden, if you're not doing AI, somehow your business is missing out. The question here as a leader is to how do we utilize any technology to make our business better? and not be start trusting more what's inside of you than what everybody outside the outside is telling you. You've got to learn to be consciously aware of that and see where in my business can this technology benefit. I know of people that when when the early stages of the internet, our our business, my first business came online at the very early stages of the internet. I existed in a time before websites were a thing. And so I've gone through the transition. I've been around, my father started a business when there was no electronic tra element. The cell phones were not a thing. There was no such thing as electronic communication. So these innovations have been going on for years and years and years. And there are earlier adopters of this and there are later adopters of it. One of the things that I think you have to understand is you have to see how does this technology start to help my business. And so one of the very early ways that I think AI can really be beneficial. inside of any business and where it can really relieve founder dependence is on using your own AI to create that founder IP. Most IP and founder-led companies exist in the head and the heart of the founder. And one of the best things that AI can do right now is getting it out of the founder and available for everybody in the organization. What was unique for me probably 25 or 30 years ago In terms of getting things done the way I wanted to do them, I had to spend an extreme amount of money on hiring people that could write software and do all kinds of things if I wanted to customize things. Now with AI, that threshold is significantly lower. We can do things with AI that are very simple, that aren't these massive things, but they're simple things. here's where AI, I use it inside Leader One, one of your questions. I use it for a number of things. Number one, I use it to help me a lot. I use it to carry on conversations and to test ideas and to pressure test. That's one thing I do just on a personal level, but inside of the organization, using AI to automate certain things inside of our operating system. So we're having a meeting. One of the hard things that you always have to do in a meeting is who does what, when, where. It's the cascade. of actions that need to occur after an event. Perfect place for AI to step in and make sure everybody now knows what their roles are. And you're seeing that happen. It's very easy to do that. One of the things you got to watch out for though is with AI, it's now more information. We become too reliant, we stop thinking for ourselves. We start thinking that AI can tell us what to do better than we can tell it what to do. And that's once again, I think a huge mistake. Learning how to interact. Don't be afraid of it. Don't run from it. Start to work with it. Interact with it. Start bringing people in that understand how that can affect your business. are important things. But my most important element is that AI will not build your business for you. You are what make that business special. You are what make that business go. Your decisions, your thinking. Your intuition, those are the things that ultimately are going to make the difference. AI can become a force multiplier for you potentially, but only if you get comfortable learning how to use it. And so my suggestion to any founder is just get in there and start playing with it, start using it if you're not already. and there's lots of different versions of that. I even considered using Google's AI until I started using Google's AI. And since all my other product, a lot of my product is inside of Google, that become a great place to automate communication, things like that to make it easier. Not to take me out of the equation, but to lubricate and to facilitate some of the things that just take a lot of my time. And so taking time, as long as I'll invest that somewhere else, I think is a really good, a good value. And so some companies and some situations are more, I think, will be more impacted by AI and them. businesses that we talk about that are consulting and coaching, things of that nature, I think AI is invaluable for us because we can very quickly go out and do research that would have taken us days potentially. Now we can we can move do that in minutes and really get to the real process, which is what? Implementation, execution, getting those things built into the companies that we're working with.

One of the things that I I discovered is that even from my very earliest days, that what I was doing and where I found great value and where the market saw good value in me is in working with other founders. My father was a founder. He was a classic founder. I'm not a classic founder. I'm a second, I'm a scale guy. And so the founder and the scale person are generally two different types of people. And what I find is that the same challenges my father had. Are the same challenges I see in founders in all industries. I've I've had the the good fortune of working in multiple industries. And and what I see that's common is that founder mentality is in is throughout. It doesn't matter what the industry is, the mentality is the is what has to adjust. And that's where my sweet spot is. And so I I love the process of working with a founder that has a great company. That believes there's more available inside of that company, more potential that they're just not accessing and they're not sure what to do. They've they've tried the marketing, they've tried all these different things, and and nothing seems to be moving the needle significantly. It's like everything they do is hard. Everything they do is like running in mud. I don't know if you've ever had the experience of running in mud, but it's not fun. It's like every time you want to take a move, there's something literally sucking you back. And and so I explain it as there is. There is something that's holding you back. And it's a way of thinking that has turned into a way of existing. Your whole business, your culture is a product of how the founder does business, how they think, how they decide, the actions that they take. Everybody in that business organizes around that. And whether you intended for it to happen that way or not, it is what happened. And so creating an intentional culture. Creating a culture that can exist without the founder in the middle of it is a two-step process. You're fooling yourself if you think, as a founder, you can bring somebody in and they can put that in place and you don't have a role to play in that. It's not gonna work. The culture is what you do. The culture is who you are. And unless you adjust those two things. Everything else is just a lot of effort and money spent that's not going to deliver. So the first person that has to change in the organization is you. It's me, it's the founder. And when I change, everything else changes as a byproduct. So it makes it easy. Once again, as you change, everything else changes around you. As you change how you see the world, the world around you changes. And so if you really want to make a difference and change your business, then start. By the person that's looking at you in the mirror. If you'll start there and truly begin to lead the change, to me, scale always begins at the founder. And they have to change first, and then the business will change. And for me, it's really simple. We were stuck at 5 million. And we've been stuck at that level for several years. And nothing changed. And I we did all kinds of, we did new products, we did new promotions. We did all the marketing things you could think of, and none of it made a difference. The one thing that made the difference was when I changed. When I became the leader that scale required, that's when the company changed. That's when our growth changed. That's how we went from a five million dollar company to an over $25 million company in three years. It wasn't our super strategy. The strategy was really simple. As I changed, the whole business changed. And as a result, I unlocked the potential that was there the whole time. And you may hate to admit that, and I just know I did. I hated looking back, going, my gosh, we spent three years or four actually four years probably wallowing while I exhausted myself, burned myself out trying this and that and doing all this stuff. But all I needed to do was be a better leader.

Be a better man. And and once we did that, not only did it allow us our company to grow, but it now gave me a methodology and a pathway to bring other people along to do the same thing. Because what I did, I could teach others to do the same thing. And that's what we did. And so then leadership became not just something that was at the top of the company, it was something that was at the bottom. So we changed our new floor because we put leadership at the base of the company, not just at the top. And when the person That's dealing with your customer is a strong leader, it makes a huge difference. It increases your capacity 10, 20 fold. And so that for me is what I love doing today is unlocking the potential that's already there. You've already proven the market wants what you've got. You've already proven that you can do this. You've already made that, you've already created that situation. Now let's make that good company. great company. And it starts with you being a great leader.

Just go to leader.one, leader.one. Leader.one is where where you can get to meeting, set an appointment. it's the fast track. Now it's not easy. I'll I'll it it this is not an easy process. Change for you is not easy. Now it is easy in the sense that it just takes a decision and you can do it overnight. For me, the big part of my my transformation occurred in two and a half days. It didn't take a long time. But the effects of that have lasted now. Twenty over twenty years. So that's that's if you're if you want the shortcut, because just because you because time doesn't necessarily