Episode 290: Business Levers with Amos Schwartzfarb
In this episode of the Club Capital Leadership Podcast, host Bradley Hamner interviews Amos Schwartzfarb, co‑author of Levers: The Framework for Building Repeatability into Your Business and author of Sell More Faster. The conversation opens with sponsor messages for Club Capital and Coach P Consulting, then moves into Amos’s background as a longtime startup operator and Techstars managing director. Amos explains why frameworks are powerful for founders, introducing the core concepts from his book: a mission‑vision exercise, the W3 customer framework, the revenue‑formula model, validating assumptions, KPI design, and building an assumptions‑based financial model. He differentiates “metrics‑aware” (knowing what metrics exist) from “metrics‑driven” (using metrics to predict outcomes) and illustrates the idea with a 30‑30‑30 workshop funnel example. The hosts discuss the tension between control and growth, the importance of repeatable, predictable business levers, and the distinction between strategy and tactics. Throughout, Amos emphasizes the need for clear, shared language, alignment around a North Star, and iterative experimentation to move from intuition to data‑driven execution. The episode ends with pointers to the book, LinkedIn contact, and a Levers training course.
Chapters
So the big question is this: how do small business owners like us grow our leadership, develop our teams, and scale our business in a way that allows us to get our products and services out to the world yet still remain profitable? That is the question, and this podcast will give you the answers. I'm Bradley Hamner, and this is the Club Capital Leadership Podcast. Welcome to The Bottom Line, a new weekly podcast series that we drop every Thursday to complement our weekly Monday podcast interviews with the industry leaders. These podcasts are going to be designed to give you short, impactful, and value-driven information that you can start using right away in your business. I value your time and attention and will do my very best not to waste it.
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Welcome to another episode of the Club Capital Leadership Podcast. My name is Bradley Hemner, your host. On today's episode, we have Amos Schwartzfarb. He is the co-author of Levers: The Framework for Building Repeatability into Your Business, and he also is the author of Sell More Faster: The Ultimate Sales Playbook for Startups. Now, we interviewed one of Amos's co-founders, Troy, and we did a deep dive with him around the financial model. But in today's episode, we do a much broader conversation with Amos around the book Levers. I, I think you're going to be able to tell my energy and excitement. Look, I, I admit that I pretty much every time say I'm really excited about this episode, I'm excited to talk to this guest. And I know that that probably a lot of times comes off as like, oh, you're just excited about everybody. Well, most of the time I am excited to be able to talk to these people. I mean, I genuinely try to curate guests that is both someone who I'm looking forward to having a conversation about, whether it's the topic or it's the person, but also, and more importantly, that it's going to all of you. I think that my excitement around the businessy stuff that we're going to talk about today just kind of comes out. I mean, we had ended up having a fantastic conversation. We usually try to go about 30 minutes. We went a little bit longer than that in this episode. I got a lot out of it. I took a lot of notes. I think whenever you hear some of the frameworks and the verbiage and other things, you're going to get a tremendous amount from this episode. And I do recommend that you go on Amazon and pick up the book.
Leavers.
Without further ado, here's my conversation with Amos. Amos, welcome to the Club Capital Leadership Podcast.
Yeah, thank you so much for having me. Really excited to be here.
Yeah, I'm excited to have you as well. Well, we always start with background and origin story. Had one of your co-authors, um, of the book Leavers, which we'll certainly get into in just a little bit, uh, to come on the podcast. But really excited about this conversation, as I was telling you before, um, just how we got to this point. And so I, I think our listening audience is going to get a out of this episode. But background and origin story, tell your journey. How did you get to where you are today?
Yeah, I'll try to do the semi-quick version, but feel free to like interrupt me. So I've been in the startup world now since 1997. So for quite a long time, not on purpose. I really did stumble my way into it. I was living in San Francisco doing other things during the internet, you know, the first internet room before, you know, I remember when there was no internet, like, I don't know if you do too. And stumbled into a startup that I really went there to just make money to so that I can pay my rent and do other things and not really so much ambitious about the startup world. But it, for lots of reasons, as I reflect backwards, clearly that was the moment in time where I realized, okay, I was put on this earth to be a part of helping early stage companies do their thing. And then I've done that in many different ways over the course of my, what is that, 25, 27, I don't know how many years that is, career. So I've been a part of, not including my current role at Techstars, 6 different companies that were all either in idea phase or really, really, really early as either a founder or a founding team member. And I've helped 5 of those 6 companies reach a meaningful exit. Some of the ones you may have heard of is Hotjobs.com, Business.com, Work.com. And then the very last company that I started was not a success, but it was my gateway into what I've been doing for the last 8 years, which is that I've been the managing director of Techstars in Austin where I invest in, you know, 20, 24 companies a year and they come through the Techstars accelerator and I, you know, I'm sort of on the other side of the table now where I'm using my, you know, couple of decades of experience to help them navigate going from 0 to 1 and 1 to 2.
Well, needless to say, you have a plethora of experience whenever it comes to business, as, I mean, in all different aspects, certainly tech, et cetera. The thing that I really would love to know is how did you begin, like, when you write a book, Levers, and I told you before that I love that verbiage and I really pay attention to words now way more than I ever did before. And I found myself in talking to people say, well, what lever are we pulling on here? You know, maybe a different way of thinking about strategy and tactics, which I'm going to actually ask to you about in just a minute. But where did the, the, the, your co-authors, you and your co-authors, decide to come together and say, hey, we, there are some things that we really believe in as a whole here, we need to start to package that together into this book, Leavers? Talk about that.
Yeah, so there, the, there's a couple of different, like, different starting points that all sort of converged, um, for me and, and for then for all of us together. I think, you know, one, the, it all comes from the way that we lay out the frameworks in the book is how all 4 of us already, there were 4 co-authors in total. It's how the 4 of us built businesses and we didn't know each other. We, you know, we met in a common way in which I can get into, but we didn't know each other. But when we met and we started to, you know, talk about the things that we're passionate about and we all worked at Techstars early on, which is how we met. We realized that we all shared a very similar philosophy into the things that were important just from a foundational and operational perspective that 100% of businesses need to do. It does not matter if you want to open up a sneaker store on Main Street or if you want to run a big venture-backed SaaS company. There were just some fundamental things that every business needed to do. And there wasn't really a series of frameworks out there compiled in this sort of way that, that was easy and accessible. And it took a bunch of forms before it ever turned into a book. We all, we all have it. The reason there's 4 authors is, I'll step back a little bit. The 2 main authors are me and Trevor Boehm. Trevor Boehm and I work together and we, we were using a series of frameworks to sort do these things. And we met Trevor, we met Cody and realized they had better frameworks and we sort of incorporated them in. And this was our— Trevor and I work at Techstars. And so we were, we were sort of doing these things but not in a cohesive way. And we looked at each other one day and said, gosh, we could be more effective in our job if we wrap this together and run it as a process with the companies. And we did that for a couple of years. And looked at each other, and I had published a book previously, and he had published a different book previously, and we looked at each other one day and said, gosh, I wonder if there's anything like this out there. Should we write another book about it? And then we looked, and we looked at each other in the eye and said, heck no, it's a lot of work to write a book. But then as we talked about it more and realized and asked Cody and Trevor to join us and say, hey, would you write the chapters that you're experts in? We thought, hey, here's a wonderful way where we can get each one of us with different strengths to write about the things that we felt that we were experts in and put it together in a cohesive way for any founder to be able to have access to. And so while, you know, in a lot of ways it was our way of saying like we're already doing this on a smaller scale, how do we get the same thing that we have correlated data that suggests it works, right? Hundreds and hundreds of companies that we've invested in worked into, that use this process. We can see that it works. How do we get this out to more people? So, yeah, yeah, yeah.
You know, this is almost going to become a common theme to this podcast, but I think it's important, is like some of the words that you use are super powerful. In other words, let me give you one: repeatable, repeatable growth. Somebody hears that, like you're a business owner listening to this, you say, do you want repeatable growth? Are you kidding me? Yes, I want repeatable growth, predictable. Give me some of that. Okay. Give me some of that. Like, I want to feel in control. I want predictable, repeatable growth. Give me that. Okay. But I want to ask you one, a question about one of those words. You've, you've said it before and I use it often too, but I'd love to, to hear your, maybe nobody's asked you this. Why do you think frameworks are so powerful in a business? Okay. And maybe even define, if somebody is not familiar with that verbiage, what is a framework and why is it so powerful to be able to have frameworks to have a think about it, how to install it, how to do it in the business? Because that's what you guys have really been able to compile.
Yeah, thank you. I appreciate that. It's interesting because I, what I'll step back as part of my preamble to my response to why I think frameworks are really important is as entrepreneurs, as founders, as business owners, there's a, you know, nothing's 100%, but there's a couple of common themes that I've seen and one is they, they want to have more control of their own destiny. They want to reach the greatest potential that they can imagine in their mind. And by the way, that can mean a lot of different things. The greatest potential could mean I want to make enough money so that I can support my lifestyle, or it might mean I want to be a billionaire and lots of things in between. And there's no wrong answer, but they want, they want these things. And another common theme is there are so many, many choices to make on a minute-to-minute basis running a business, especially when you're first starting out the first, you know, couple of years that having frameworks, all the most basic way I can say this is having a really solid framework just helps you take the guesswork out of where to start. You still have to go actually do the work. And the way that, at least the way that we've approached the frameworks is, you know, and we may or may not get into the frameworks, but I'll use the very first one, which is figuring out who your customer is. Well, like, you know, anybody can make an argument that almost anyone in the world or the world as they view it can be their customer. And that is potentially true at scale. But in the early days, if you try to be something for everybody, you end up being nothing for nobody. And so we give you a framework that just says, here's a starting point, here's a way to organize the information that's all in your head so that it can make sense to you and other people around you. And then you can go execute. And then it has some ancillary benefits, you know, one of which is, you know, if it's more than just you, it's alignment across the group of yous that are running it. You said to be more in control. What we like to say is less out of control because we think when you're running an early stage company, it's always a little bit of chaos. But it's— we're saying the same thing, right? You want to— That's fair. I mean, that's true. Yeah, we say kind of cheeky, less out of control, but we're saying the same thing. And so this kind of, this idea of alignment being more in control and being headed in a common direction, which I guess is saying a combined of the two things, we think that's where the power of a framework can be. So it's still your world to create. And here's just some boundaries around which allow you to make decisions and not get paralysis or make bad decisions or less bad decisions.
Yeah, yeah, that makes sense. Yeah, I, I think one thing that really resonates with me there is, is taking, uh, the guesswork out. Okay, you know what, this is why you, you and I were talking before, uh, we were kind of laughing about love or preparation of questions, and I was like, well, I mean, this is an example. There's no way I would have been able to prepare this next question, and that is You've heard this, you've heard this saying before, and this is where I personally think to myself, are we saying two different things here? Are we saying the same thing? But we have to be able to hold both of these ideas together at the same time. And here's this, wait a minute, I do want to feel in more control of my business. I do. But yet I hear people on other podcasts say, well, you can have control or you can have growth, but you can't have both. So then there's this idea of like, well, I've got to give up control to have growth. But yet I want to be able to have control, right? You see what I'm saying? So then people, then business owners go, well, which one is it? Do I have control or do I not have control?
Yeah, I would love to have a debate with the person who says that you can't have control if you want to have growth because I fundamentally don't believe that's true. Now, control, I think there's a nuance in what that word or what the meaning word, right? If you want to be able to actually control everything, yeah, that's probably true. But if you want to be able to control the, the, the idea of the things you will do to learn how to grow so that you understand what you're doing so that you can find— let's use the word— the right levers to pull and how hard to pull them. Yeah, absolutely. I can't imagine like not having control and growing because to me the flip side is, and we've seen this happen with big companies that all of a sudden disappear.
Yeah.
Because they got really big and they raised a lot of money, but they didn't really understand. They never had an understanding of the predictability of the repeatability. They didn't have control of the business. And so it goes up and it comes down.
Yeah, that's true. Yeah, I was on a plane Sunday flying back from the West Coast. I absolutely want my pilot to have control of that plane, right? There's no question about it. And they're using switches, dials in that cockpit to navigate through the ultimate destination. I mean, obviously it's just an analogy to us as business owners sitting in the cockpit of our business.
I think it's a great analogy though. One that like Trevor and Cody and Troy and I have used just when the four of us are talking, like when, you know, the way, and you know, I know you talked to Troy a couple of weeks ago, like the way that we look at, you know, the whole series of frameworks help you basically build a financial model. And Troy probably said this, which is like you have a crystal ball that's really fuzzy and over time there you get more clarity in the crystal ball and you can literally see the future if nothing changes in your model. We look at that model as like the cockpit of your airplane that we've literally used that analogy because that's what it is. You're just looking at hundreds of little dials and things that you understand what's happening. So if the, if the business starts to go up and you don't know why, that's not good. Yeah, it goes down and you do know why, that's good because now you know where to pinpoint in what you could potentially do. And when we talk about it, we're not talking about at the macro level, we're talking about the detail and the specificity of why. Yes, you have control.
Yes. Yeah, you just brought up a really good point. Is that if the business is going down, I want to know why the business is not going down, or maybe even if it's staying level, like why is the business flatlining? Like we've been at the same level for 3 months, 6 months, a year or something like that. But then you just mentioned another thing. Hey, we're starting to grow. I really don't even know how we're growing. That's not going to give you predictability, control, and repeatability because at some point you're going to hit a plateau. The business is going to start to tilt down. You don't have anything to go back to and say, oh, wait a minute, repeat successful actions. Well, what were the successful actions that we did? We have no idea what it was.
Yeah, you're, you're nailing it. And I think like that's, that is a difference between like, you know, a visionary business owner or CEO sometimes are, and this is okay. In fact, I think frankly, I think the best CEOs sometimes don't have this skill set, which is they can see the vision, but they're not able to get really deep into the weeds. So, okay, my business is flat and you can say, well, we're not doing any marketing. Okay, that's not a reason why. The reason why is, I don't know, what are your marketing channels? Like, get into it. Like, what are the specific things that you could be doing in marketing? Like, how detailed? Well, we should be running, you know, newspaper ads only on Tuesday afternoons in these 3 publications and we should be doing radio ads only on Monday afternoons between the hours of 2 and 3 because that's where our audience is, right? I'm making that up, right? But like that's the level of detail and more so like, you know, even what's the message? Is there a sale? What's the call to action? Like how are you communicating to the people? This is the level of detail that you need to understand because those are the nuances. If you don't understand you know, how those impact your business. It's easy to say we're not doing enough marketing, but it has a, it's a meaningless statement.
Yeah. Yeah. Yeah, for sure. You know, one thing I'd love for you to touch on this is I'm sure feel free to kind of take this into a framework if you want to, but it comes up often and I really think that this is important that people get this because we're using this analogy with with pilots. If you are looking at the altimeter to try to figure out how much gas you have in the tank, okay, you're destined to fail. Okay, this is, this is not going to go well for you. In other words, creating a metrics-driven organization or metrics-driven company, okay, and that is use your intuition. Okay, you've got a gut there and some intuition and some experience. That's fine. But if you're not measuring that, if you're not actually putting it in scoreboards and dashboards and things that you can then test your gut, you're, you're, you're gonna make poor decisions based off your emotions that are gonna go up and down. And you just talk about the importance of that and how using data to be able to make better decisions in the organization.
I, I will. And you, I, I, I don't think you even know I wrote another book prior to Levers, but what you just said almost verbatim is what I say in the introduction of that book, which is that it is really critical that you use your intuition to drive your direction, but your execution has to be driven by metrics.
Amazing.
Yeah, we are so on the same page. So I think, here's what I think. I think a lot of people, you know, I've worked with, at this point I've worked with, I don't know, several hundred founders pretty deeply on their businesses. And most people, not to their fault because this isn't how they're taught in college or in, or in business school or even in entrepreneur classes. Most people don't understand the nuance between metrics aware and metrics driven. And to me, the difference is metrics aware means I know what the metrics are of my business. I know where we are today and I know where we came from. Metrics-driven is I know where we are today and I understand that by doing a specific thing, it will drive a specific result. And if I want a specific result and I don't know how to get there, I have to run a lot of tests to learn what that means. So another way to say it, it's a difference between a lagging indicator and a leading indicator. I think people understand lagging indicators really well. We did $5,000 in revenue yesterday. I don't think they understand leading indicators quite as well. The simplest explanation of it, and I know you know this, but this is an explanation for the listener, is if I make 7 calls, I know that 7 calls will— cold calls— 7 calls will result in 3 phone conversations, and 3 phone conversations will result in 2 demos, and 2 demos will result in 1 contract. There's some math there, and each one of those things is a lagging indicator of the previous thing, but a leading indicator of what's to happen next. And so assuming you have the right message and the right product and all those things, if I make 7 calls, I can run those numbers. If I make 14 calls, those numbers all double. If I make 21 calls, those numbers will all go up by 30%, etc., etc., etc. Something might break in there, but you will see literally, because you're metrics-driven, that one of those— one of the parts of my sales process breaks. So I'm going to make numbers up now. You go from 100 to 50 to 25. All this, right? Say you're supposed to do that, but now you go from 100 50 to 20, you can see something is broken and you can start to dig in what is driving that number down instead of up.
Hmm.
What has happened, right? It could be the quality of leads is bad. It could be that the phone conversations that you're having aren't as high quality, or it could be lots of things. You're using that to drive a result of what's coming next.
Oh, that's awesome. Okay, so I've never heard that before. I've never heard metrics aware and metrics driven. Okay, that's great. So let's bring it down to an example. All right. So you tell me You tell me, I'm going to give a specific example for one of my companies. So we're Thursday, I'm running a workshop. Okay. And so we have a dashboard that we're tracking the numbers off of. And I said, I want, we're doing, I think I called it the 30-30-30. So it's like, I want 30 registrations. I think 30% of those people are going to show up. So 9, 9 people then are gonna show up. 30% of those people will book in a, a call afterwards. That's 3. And then I think 30% of those people will ultimately convert to a client. That's 1. Worth it. Okay. Is that a metrics-driven or metrics-aware organization?
Just talking about those metrics, it's aware. Where the driven comes in is understanding under each one of those numbers, under each one of those 30%, What are the drivers of that? How are you measuring the things that take you from 99% to whatever, whatever the numbers were? 30%, 30%, 30%.
Yeah.
And when you can start to understand that, it actually gives you the ability to drive those numbers up or down.
Yeah. Oh, I see. I see. That makes sense. So what are the things that we can do to get more people to— so like, I'm taking a guess and we're saying, okay, you get 30 people to register. That doesn't mean 30 people are going to show up. You hope so, right? But like, what are the things that we can do underneath that to get more people to show up? That's right. So you're saying like, oh, well, actually, every person that signs up, we pick up the phone and call them and we say, hey, we're really excited to have you. We saw that you registered for the event. We're excited to have you. We want to make sure— is that what you're basically saying?
Yeah, I'll say it a little bit differently because what you're is accurate and tactical. I'll back it up a little bit, which is the idea that I'm gonna run experiments of things that I can do.
Awesome.
Phone calls, it might be emails, it might be text messages. I don't know what the thing is, right? It might be two calls, not one, but you're gonna run experiments to figure out what are the things that I can do. And those experiments are, you're using them to drive, to be metrics driven. To drive the numbers in an upward direction.
Okay. No, that's good.
And it's getting deeper, like way deep into the weeds on it.
No, this is great. This is awesome. The reason I asked this was because I wanted to take a high-level concept and then drive it down into for people to be able to say, hey, can we contextualize this into something that it's like, give me an example to it. And I think that helps people to go, Oh, okay. Like, I got it conceptually, but now I need to be able to— I got it high level, but I need to be able to contextualize it into something that I actually might would do in my organization.
Yeah.
So I think that was really good. I didn't want to make that about me per se, but I wanted to use it as an example. So that's—
No, I think that's great. And I, you know, I think just for the listener to hear this, which is becoming a metrics-driven organization, if you're not already that, which is most companies. When they start out is hard because sometimes you don't know what even to focus on, much less how to do it. And so, you know, what I usually tell the companies that I work with is like, you know, it may take 2 years and that's okay.
Yeah.
Along the way you're making strides. It's not a light switch, it's a dimmer switch, right? And you're going to get better and better and better and better until you realize that like the decisions you make in the business or you're making them, you're using your intuition. To drive the, the, the direction, but you're using metrics to drive the execution. Where should we actually do that? Well, the, the, the numbers don't lie. If we make 2 phone calls to every registrant, we will get 33%. If we make 1 phone call, we'll only get 10%. If we make 3 phone calls, we still only get 33%. So 2 phone calls is the number.
Ah, yeah. See, that's good. Hopefully people are seeing that. This is, this is really good stuff. I'm sending a Slack message to my team right after this. So like, I'm like, okay, Hey guys, we have to, we have to be a metrics-driven organization. But one other thing I just want to say to that though, the 30-30-30 thing that I've told you, like, I didn't completely pull that out of my tail, okay? It wasn't completely— there were some discussions with some other people, my coach. I was like, hey, what, what's kind of— give me some average numbers. So it was kind of like, let me take a dart and I'm gonna throw it at a wall, but at least now we have a number and then we'll start to figure out what the numbers will actually be.
You are describing something that I think is something that makes it really hard for people to start this. And you did it like, like awesome. Because what I usually tell people, because people will swirl around, well, how do I pick a number? Well, I don't really know. I'm like, you know what? It doesn't really matter. You're probably wrong anyway. So accept the fact that you're going to be wrong and just put a stake in the ground and try to get there. And you know what? It doesn't matter if you get there or not. What matters is, do you know why? You got there or didn't get there. And along the way, you may not even have the right type of number. Like you're saying, you know, 30 whatever, like it might not be the whatever, it might be something totally different that you should be measuring. But until you measure something, you're measuring nothing. So at least it gives you some direction.
Absolutely. Yeah. I think even on our Notion page, on our master Notion page that we're putting this all in as a team, we have all of our assets in there. I think at the very top I put Hey, these numbers are absolutely 100% sure to go wrong. Like, it's not gonna go this way. I'm taking my best guess, but this is what we're gonna do. And then we're gonna keep running this thing, running this workshop until we get it right. Like, that's the thing.
Yeah. That's, I mean, assuming you're looking at the metrics, that's being metrics driven for sure.
Yep. Yeah.
Awesome.
Okay. So let's, let's go. Into the book a little bit and like maybe you can walk us through and then we'll pull the— we'll pull some levers on, on some of these. But like walk us through maybe the, the structure of the, of the book, how it's laid out, maybe even almost a table of contents for somebody that hasn't obviously picked it up yet. Um, and, and then I want to ask you a question in just a second on, uh, strategy and tactics that actually gets messed up all the time and people use them like interchangeably and they're like, well, I kind of know strategies above tactics and tactics sit under strategy, but I'm not really sure which one is strategy and which one's tactics. And so we're just going to end up in a blended mess. We'll get there in a second. But once you just first talk about the structure of the book and the contents, etc., how it's laid out.
Sure, I can, I can do, I can sort of give you this overview of it. So there's, we say that there's 5 frameworks There's actually 6 in the book that we have one in the appendix that really comes before everything, but it's the only thing that's not metrics driven. So we left it out of the core frameworks. If we do a second edition, we might treat it differently. So there's a sneaky 6th, the sneaky or the way that we actually teach it when we teach it is it's the first thing we do, which is a mission vision exercise This is just to establish for, so for the group of people working on it, what is the North Star? What are you actually trying to do? What's your vision of changing the world? And by changing the world, by the way, it doesn't have to literally mean the world. It's the world that, you know, if you sell, you know, sneakers on Main Street, right? It's anybody who buys sneakers in your town. Like, how are you gonna change that world for people who care about because you know, right?
So it's the world you see it.
So that's the first one. Everything else is around metrics, is a metrics-driven framework. So the next series of frameworks are meant to be a progression. They each— any one of these frames you can pull out and look at it by itself and it can be really effective for what it is. But the sum of the parts is much greater. The very first one is an exercise to really get down to the core of who you believe your customer framework really is. The framework is called W3. It's answering 3 questions: who's my customer, what do they buy from me, and why do they buy it? If you want, man, I can go deeper into any of the frameworks later, but yeah, go through them all. So it starts with that, and the framework basically gives you this whole list of data that you need to go collect, this whole bunch of information that you need to learn so that you really understand your customer, not your theory of who you think it is, but who it really is, because you've got That's the first one. The second one we call finding your revenue formula. You could also say, what's my business model? What we're really doing here is two things. The first is we're saying, what is the simple math equation of how my business works? It's, you know, if you sell t-shirts, it's, you know, I, if I sell, if I've got a customer and they buy one t-shirt at $5 a t-shirt, I make $5. If I have two customers that buy one t-shirt each at $5, It's $10. If I have one customer, they buy two t-shirts at $5 each, I get $10, right? It's just a simple math equation. Oftentimes it's not what you think it is, but some— it's often also very simple. The second thing we're doing here, and this is where the, where the real value is, is out of every single one of those values, you define what are the drivers and the subdrivers of that value. So you can almost think about the revenue formula. This is going to your future question. The revenue formula is almost like your business strategy. And the drivers and subdrivers are the tactics. So one of the things is to get customers into your store. One of the, one of the drivers is gonna be marketing and then the subdrivers are all of the different marketing tactics or even better, one driver, one driver could be radio advertising, another driver could be out-of-home advertising, another driver could be internet advertising and then for each one of those drivers, What do you actually have to do in order to make that driver move, which would make the value in the formula move? So when you think about your formula, like if you have an operating business, you're real, you could just plug in your real numbers and that's your business, like the numbers don't lie. So that's the first two things. So if you can imagine what you're doing here is you're getting, you're collecting a lot of data, a lot of information, a lot of to-dos, a lot of things you got to learn, a lot of research big list of stuff to go do. The third framework we call Validating Your Assumptions, and basically it makes you take a critical look at all of the assumptions you have in your business, whether you can prove them or not. It's, it's, so it's essentially everything you've done in the first two frameworks and probably a few things you, you've missed, and we've got ways to prompt that out of you. And then once you have that, it breaks it out into four quadrants. So you can imagine anything below the line is low priority. Anything above the line is high priority. If it's low priority, we say don't even pay attention to it right now. It doesn't matter until it becomes high priority because you only have time and you only have so much time in the day. If it's high priority, the— your left and right quadrant, one side is it is validated. We have— we have data. We know for a fact this is true. This is not my gut telling me. We know it's true. The other side, and this is stuff that if you know it's true, you're building, you're doing it, you're acting on it, you're spending money on it because, you know, if I spend a dollar in radio advertising, I'm gonna get $3 back. You're gonna do that. You're gonna do that all day long because you know it works until it breaks. The other side of the quadrant is it's high priority, but we actually, it's not validated yet. And so then the question becomes, what do I need to go learn What do I need to go research and how do I validate it or invalidate it to know whether I can move it into the validated column or a core assumption of my business isn't true, which means that I've got to think really deeply about what, what the impact is to my business. So the first two frameworks collect a bunch of information. The third framework is, okay, now that I have it, how do I prioritize it? What do I do now and what do I do next? The next framework is a KPI framework. So this gets into like the core of the metric stuff. So now that I know what I have to do now and next, how am I actually going to measure it? And there's, there's so many KPI frameworks out there. They're, most of them are pretty good. Ours is written specifically to go with the, the rest of the Levers framework. But if you have your own, use your own. But have a framework for, for KPIs to say we know what we're gonna do. We know where, how we're going to measure it. And then the final one is how to build a financial model. And I'll just say this because I use the words financial model and plan synonymously. So how do you build a plan that is data-driven with all of the information you've collected in the first 4 frameworks? You literally have gotten, you've collected everything you need to do to build a financial model. This is where Troy comes in to build an assumptions-based financial model so that you can have a crystal ball that's really foggy and over time gets more and more clear. So that you actually can predict the future, literally predict the future of your business unless there's a material change. But because you have such deep insight into your business, that material change will allow you to go back into a now foggier crystal ball and figure out how to make it more clear again.
Man, that's it.
And we did that like 130 pages.
That's amazing. So even that last part, predict the future. Somebody's been like, what if you could just predict the future? What if you could paint a picture and say, here's my 3-year vision, here's my 3-year vision, and I actually can make that happen. That's pretty amazing. Like, it can be. Okay. Speaking on that though, that actually brings me to a thought. I know I asked Troy this and he said 5 on the financial model. So you can answer this in financial model, but you can come back to just in general. Okay. I index more for a 3-year vision, like 3-year, 1-year, 90-day. That's, that's my personal belief on things. That's how I try to run things. Do you feel like that the further out that you go, like if you pull it down to a quarterly, like you better, that better be pretty doggone clear. Like if you're fuzzy on what you're trying to do in Q3, Good luck. But if you, the further out you go, there's just gonna, it's just going to get fuzzier. I mean, period. I mean, it just is. And so what has been the thing that you have, and I'm asking this not just even from the book, I'm asking this more from your example of working with 200, hundreds of business owners to say it's still a worthwhile exercise of doing it even if it's fuzzy. Yeah.
So I think I'm gonna answer your question, but if I don't, redirect me. I do think it's worth it because the important thing is to start to understand what the mechanics of your business looks like as you begin to scale at like, because getting only a 1-year or even a 2-year view into how you think is gonna work, it doesn't really allow you to start to look ahead as you think about predicting the future of what might break. Like, when do we, you know, can we hire so many salespeople? Like, whatever the thing is, things will break because that's just how it is. Nothing grows linearly. And to start having a point of view long in advance of what that might look like is really, really important so that you don't find yourself surprised. When things break. You might not know 3 years in advance, but you'll have a model that starts to allow you to see things you wouldn't have otherwise be able to see. Now, what I'll tell you is I understand why Troy says 5. I sit with you at 3. It's really a difference between an operator, in my opinion, difference between an operator mindset and a VC mindset. The VC wants the 5-year plan because they, they're not because they think that you are going to, your numbers are going to be right. Because they want to be able to start to see what will this look like from a returns perspective at 5, 7 years from a valuation perspective, if we're, if we're even remotely close from an operator perspective, I think it's like, yeah, anything beyond 3 years is like, it's a big freaking question mark. And most operators say, yes, I want to return at some point, but that's not what I'm thinking about. I'm thinking about how do I build the best product for my customer to get the most value from me? So it's just a different mindset. Like, I get the 5-year. I'll usually, when I'm building them for raising capital, I'll build the 5-year. But what do I really care about? I care about the 3-year plan. Yeah, but a 3-year plan is always evolving, right? Like every 6 months you're building another 3-year plan because you learned a bunch of stuff, especially early on.
Oh yeah, totally. Yeah, that makes a lot of sense. You know, I want to go to number 3 that you mentioned. And you were talking about high priority, low priority, validated, not validated. And I was, so it's like one of the maxims and we're gonna apply this maxim to what you just said. It's like, show me, don't tell me. Like if it's validated, show me. Like what I wanna see it, you know, versus you can talk it. Okay. These business owners, founders are usually pretty good talkers, right? And you're like, Sounds really good, Bradley. I need you to show that to me, you know. And I was on a call the other day with the business owner. We were talking about the job description and I said, that's great. Let me see it. I said, do you have that? Have this? He was like, yeah, took him like 15 minutes to find the thing, you know. I'm like, I don't think you really have it, you know, that kind of thing. Fair enough. Yeah.
Yeah. I think that, I think that's right. You know, one of the things I love doing this exercise, that exercise with people because it really quick, when you're being honest with yourself, it really quickly reveals things like sometimes the, hey, I have this core principle of why the business should even exist at all. It's just my gut. Doesn't mean your gut's wrong, but why are you gonna go invest, you know, hundreds of hours and thousands or tens of thousands or millions of dollars into something off of intuition? Again, intuition can drive the direction. Go get some data to, you know, to drive execution because what if you're wrong? What if your whole theory is wrong about why to build this business? It might only be off by a degree, but if you go in that direction without validation, that degree, if you're traveling 1,000 miles, you know, and you're, you know, if you're in Kansas and you're 1 degree off traveling to California, it's a difference between San Francisco and LA. It's pretty far. Yeah, huge, huge difference.
Yeah. Before I transition to that last question around strategies and tactics and just kind of your definition of that, I wanted to ask you, you mentioned around the sixth principle and you said, hey, we typically really kind of start with that when it's not necessarily mission-driven. I mean, metrics-driven. So that's something that people have heard too. Mission. Yeah, I need to get this mission right. Um, and yet I, I was this person, I just kind of rolled my eyes. Well, geez, what am I doing? I'm just doing this stupid mission thing, you know, and I didn't really care about it. I've really come around to that. I mean, I can remember 5 years ago, Bradley, 6 years ago, Bradley would have been like, yeah, we're not doing this mission BS. But now I'm like, no, it actually matters. It actually has mattered pretty big. Can you just speak about that?
Yeah. And I would say like probably more than 5 or 6 years ago, but there was a point in my career where I was similar to you. And I think that there's probably, there's more than one reason why it's important, but I'll say that probably the number one reason it's important is because whatever is in the founder's head, sits in the founder's head. And to assume that everyone can read your mind is a recipe for disaster. And going through an exercise, and especially if it's a collective exercise where you're coming up with the words together, and that's how we have ours structured, which is you're actually coming up with the words together. It's really hard to argue that you're not all saying the same thing because you created it together. That doesn't mean that the founder doesn't articulate their vision and then you agree on how to actually articulate that outwardly and you can do that and now you can run that, you know, regardless of your organization is 3 people or 300 people or 3,000 people. If everyone can articulate the same thing and it's been agreed upon by the leaders of the company, then it becomes really easy to stay aligned around that North Star. So even if you run, even if you ran, you know, a top-down organization where the CEO says, well, I'm gonna just tell you what it is and that's what it is, still the articulation of that is the difference between someone totally understanding what you're trying to do or assuming that they understand because you think it's obvious.
Yeah, I would just really encourage people to pick up the book for a lot of reasons and to go to that that, that section. And if you've been like Amos and I at some point, and maybe you're there today and just say like, ah, this mission stuff, I'm just gonna throw it over to the side because I've got bigger fish to fry, I've got a team member that's out sick, I got, you know, somebody just quit, like, okay, well maybe don't do it this week. But don't, don't dismiss that. That there, there's a value in doing that and utilizing your book to be able to help kind of bring that out of of the, of the founder, of the business owner, I think is really key. Okay, strategy and tactics.
Yeah, it's, it's, and I'll just say it's, it's kind of a fun exercise and, and, and it's often really revealing that people, they're not like far off from each other, but they're not on the same page or they're not in the same spot on the same, they're usually on the same page, but they're not in the same spot on the same page. So it's hard to have a conversation about what's going on, or let's just say in the same chapter, but they're not in the same spot in the same chapter. It's hard to have a conversation about the chapter if you're on different pages of the chapter. So get on the same page of the chapter so you can have a conversation about the chapter.
Oh, that was good. That's a good analogy.
I made that one up right now, so hopefully it works.
Yeah, no, that was good. That was actually really good. I'm like, okay, yeah, that makes sense. Yeah, we're like sort of in the same sphere, but no, we're not really on the same page. It's like, okay, it's good. We're in the same book, but we're not on the same page. You're on page 2, I'm on page 22. To. So, you know, that's good. I like that. All right, strategies and tactics. Love to hear your definition of it.
Yeah. Um, I think, you know, where, where people— I think there— I do think it's a hard— I think a couple things. I think it's a hard concept sometimes to understand the difference between the two. Like, conceptually, you understand that, yes, you have to have a strategy, and you, you tactics are the way that you execute on a strategy. But where I think it becomes challenging, and particularly challenging for people that are excellent at executing is that you're so good at doing this thing that the strategy either doesn't exist or it's obvious, but you're heading in the direction of, of the thing you're trying to accomplish. What a strategy— where I think a strategy becomes really important and what allows you to do is to step back and say, as an organization, we have a set of beliefs on the best way to organize and execute that we're all aligned around. And so for example, I think this is a good example. So W3, which is the framework out of Levers, is something that I created at a company that I was at almost 2 decades ago. And at the time we called it, it was the W3 strategy. Now what that meant was the strategy, we used this framework to come up with the way, the who, the what and the why of what we were, who we were selling to and what we were gonna actually deliver to them so that we were all saying the same thing. And that allowed us that dictated what were the tactics in order to deliver on that strategy. So I think of it as like a way, a way to organize around a common set of goals so that we are creating and moving towards and executing in the same direction.
Makes sense. Yeah, that makes sense. It's been great. I enjoyed this conversation. This was awesome. I picked up a lot of really good things. Gave me some validation on a few words and other items and hopefully gave some people some language that they wouldn't necessarily have been able to adopt. And I would just like to say, if you've listened to this podcast for any amount of time, you know that we've really been intentional about saying that, hey, words matter. The words that you use for yourself, the things that you say, the things that you say to your team, they matter. I was absolutely loosey-goosey with my language. Ah, you know, it's like close enough. And I was just intertwining things, and, and, and that ultimately makes it more complicated. And so, so we started this like repeatability, control, predictability in the business. I think your book is absolutely fantastic. Amos, people want to obviously pick up the book, where would you point them to? And also just any of the other resources that you may have.
Yeah, so, so yeah, thank you. If you pick up the book, appreciate it. You can reach out to me on LinkedIn is probably the easiest place to find me. Um, I read all the messages that I get there. It seems like a good central place for that. Um, if you are interested— if anyone listening is interested in doing The Levers as a course, the other two co-authors, Cody and Trevor, teach it as a, as a course, so they work with you hands-on. You can reach out to me and I can connect you with them.
Awesome. Amos, this has been great, man. Hope to have you back on in the future.
Yeah, thank you so much for having me. This was really fun.
Oh goodness, where do I start on things that were takeaways for me? I told you in the beginning, in the intro, that I really enjoyed this conversation. I think that was fairly evident. Certainly metrics aware, metrics driven. I try to never make these episodes about me, only maybe my lessons or something like that. But because I had a specific example around that, I wanted to kind of see, well, how would we contextualize this and, and, and, and use maybe the one that we're doing, one strategies that we're doing with webinars to be able to kind of help all of you. So I thought that was big metrics aware, metrics driven. I think it can't be understated the importance of being able to think mission, vision, values. What's our core values? What's the mission that we're on? Why does this company exist? And then what's the vision that we have for the company? I was actually, I think it was on Instagram or something like that. I saw Uh, Dave Ramsey. And obviously he has EntreLeadership, incredible leader himself. And he was— it was like a snippet, it was, I guess, a reel. And, uh, they— he said, look, you've got to establish your mission and your vision. And it was just, you know, a 10-second thing. And I just saw that maybe yesterday or the day before that. And, and then to have it come up again, I think is really important. And sometimes you hear things like a, a lesson that you're you are— have not learned, but you've been exposed to again. So you kind of relearn that lesson. And then I thought, I'm just kind of breaking down the way that he approaches, um, the overall frameworks in the book. I really do think that you'll get a lot of that. We talked to Travis around the financial model, but being able to, you know, like the validation of your assumptions and how do you actually take— when we have that conversation in there around you know, using your intuition and your gut and your experience, and you just have a gut feel for something, but at the same time kind of backing it up with, okay, well, let's go and, and do that, but let's, let's begin to measure it. I thought that was a really great discussion. So go and pick up his book, great, uh, conversation with Amos. Well, obviously there's a few things in there that really correlate really well with a lot of our podcast sponsor. Certainly if you think about being able to be metrics-driven and having numbers and a forecast moving forward, we talked about that again with Troy. Go back and listen to that episode if you haven't. But, and that's exactly what Club Capital does. And so being able to like, okay, I want to be able to do that, I want to be able to like predict the future and have a crystal ball. Well, that's what Club Capital can help you to do. So book a no-obligation demo with Club Capital so they can start to begin to put together a forecast. I, you know, personally, I'm not a big 5-year forecast person. I think it just gets so fuzzy, you end up just truly throwing spaghetti on the wall. That's my opinion. But again, Amos kind of gave his thoughts on that as well. But go to Club Capital, book— I know Obligation did one with someone. You may be getting financial statements like from last month. That's backwards looking. You're just seeing like what happened as opposed to forecasting and looking ahead. And that's where their CFO services are really fantastic. Go to Club sub.capital. Well, I mean, you know, we leading and lagging indicators, he discussed that being metrics driven as an example. Like, well, where does all that play in? 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