117: Daniel Marcos on Becoming a Lifelong Learner

Well, I have some good news and some bad news. The good news is I know exactly where to go to work to fix things to grow your business. The bad news is it's you. In order to grow your business, you have to recognize that you are the bottleneck and become a lifelong learner to develop yourself because the threads of everything needed to unstick to grow your business lies with you. So it's good news, bad news because it's a lot easier to work on the person in the mirror. Right? So listen in how to become a lifelong learner and to grow yourself, your leadership and your business through all the four stages of growth. Hello and welcome again to the Scaling Up Business podcast. I'm your host, Growth coach Bill Gallagher. On the show with me today, Daniel Marcos. Daniel is the founder and CEO of the Growth Institute. He's also a longtime coach the world of Scaling up with Gazelles and a leading speaker around the world. Daniel is maybe the one individual more than any other that engaged me and encouraged me to take the plunge to go from the one on one CEO coaching with a dabbling of this world to like making this my full time thing. So I'm deeply and personally connected to Daniel in the world. So I want to welcome Daniel, welcome to the show.

Thank you, thank you. Really, really appreciate the comment.

And so for our listeners, I'm sitting in a hotel room in Honolulu and Waikiki right now, overlooking the ocean. Daniel's in Toronto on the other end of out of the country on the East Coast. Like we're spanning time once again. But we're talking about a subject I think that is so important to all of us in the in growing. Right. It's the notion of being a lifelong learner. This is critical to the development of the CEO and to the growth of the company. Like you're going to hear as we talk today that the bottleneck usually begins with you. There are lots of things we work on with the team, but there's always a seed of it with you. So we're going to talk about that and how to break that up today. Welcome to show Daniel.

Thank you very much.

Very good to be here for our listeners. Why don't you give us a little bit of your background? When did you become a lifelong learner? How did you get into becoming a coach and start the Growth Institute? Take us through that narrative before we talk specifically about the things people need to do to grow.

Thank you, Bill. I've been an entrepreneur for 18 years. I built my first company in Mexico City in 1999, so 18 years ago. And I did really, really poor in college. I really didn't care for school. I was working all the time that I was in school and I had a company that I did auto detail for cars and sold T shirts and everything. And then I worked for a brokerage house like three years. So by the time I graduate, I've had like five years experience or six years experience. So I really didn't care for college. I said, whatever I need to learn, I'm going to learn in the business. So I finished college, went to Hong Kong for a couple of years to work for the Mexican government there, and then came back to Mexico to build my first Internet company. I was seeing all these billionaires back in 1999 doing Internet companies and being very young and making money. I said, I have to do that. So I went back to Mexico and I built, let's say, the first E trade or first trading platform for the Mexican stock market. And I merged with a guy that was doing the same thing in Argentina and we also merged with another guy in Brazil and we raised altogether like $70 million. That grew it to 1200 employees and sold it to Banco Santander in two and a half years. And man, that was fast growth. And I learned all that and I realized how little I knew about business. We were very lucky, if you ask me, of all the ingredients, what happened? We were lucky as hell. We were in the right moment at the right time. Yes. The right ideas. And that helped a lot. Then I realized that I was missing a lot indeed, when I saw the company, I went to business school, went to Babson, did my mba. That was a lot of fun.

After growing and selling the business. Right?

After growing and selling, yeah, my biggest success was before my mba. I will talk a little bit more about that at the end. But when I did my mba, you know why I was feeling very uncomfortable. I hired in summer. I got all these Harvard and Stanford MBA grads coming to work for me and I was much younger than them and I had no master's degree, never been to Harvard or Stanford, and they were working for me and they sent me these PowerPoints with these jargons. And I felt very uncomfortable that my employees knew more than I knew. So after that I want to do an MBA just to be able to knew what they were talking about. And yeah, that happened. But I learned very little tools or things that really helped me build my business. Yes, I understand about globalization and had a great time in Boston for a couple of years, but I didn't really learn that much. And then after that did a around the world tour for a year, landed in Austin, Texas, started my first company in the U.S. i did a mortgage bank in 2004 and by 2008 you have to imagine how that end. And it was really painful. I did everything right by the book and it was a disaster. And there were many, many things. And one of them of course the financial crisis was important, but I think more important I hated what I was doing. I was doing it because monetarily everyone said that it was going to be great. And I did it because it was finance, it was Hispanics to big trends at the moment. But I really, really hate it. And I shut down the company. And after that I remember very vividly I was having a hard time because I closed it and I lost a lot of money. And a friend of mine that is friend with Vern told Vern Harnish that I had gone under and I had closed my company. And Vern called me and said, hey, how are you? And I was destroyed. I complained and you have to imagine as you close with your business, I was not in a good spot in my life. And after half hour of complaining and crying and all that, Vern said, are you finished? Are you done? And I was like, yeah, what do you mean like are you done complaining? And I was like, yeah, he's okay, what's next? I was like, what do you mean what's next? I said, okay, what's next? What are you going to do? And I was like, I'm going to go back to Mexico. I need to get a job, I need a salary to pay for my kids school. And he said, no, no, you're going to become a coach with me. And I was like, no way. I don't trust myself as an entrepreneur, much less to coach someone. And he said, that's precisely why you went through such a hard time. You're going to be able to help entrepreneurs that that never happens to them. And I said I really would like to do it. I love you, you've been a great mentor to me. But I really have to get a job and get a salary. I said, yeah, yeah, go back to Mexico, get a job at salary and coach on the weekends. And six months later my coaching was doing more than my salary, just coaching on the weekends compared to the full week. So I resigned and became a coach.

Then, you know, I want to underscore something for both for our clients and potential things, potential clients as well as in the not just mine, but like the whole world of the coaching clients as well as for our coaches out there, there's a certain amount of something we have to share from our successes. Right. I can talk about the difference our execution habits makes and how when I really implemented most of it, I was able to go on vacation with my family during a growth period for a month in Italy. That's great, right? That's a success. But many of the successes, at least the direct reason for them, maybe not the tool reason, are not totally transferable to you. And the reason that I and you and others are great coaches, not because we are so brilliant, but as much also from our willingness to share the things that didn't work for us, the places that we screwed up and the things that we see among our clients, the struggles, the setbacks, those things are as valuable as anything else when we're willing to share those. Right.

You can imagine how aggressive I became with KPIs after business went under. So whenever I see a client or a CEO not being very detailed with their numbers, I'm like a hawk on top of numbers because I know what could happen when that does happen. I really became much tougher with myself.

And my team with numbers because of that shortcoming.

Yeah, I, I knew the trend. I could see the trend. I knew that it was going to go under. And many of you know Jack Daly, Jack Daly has been on your podcast before. Jack was, had coached me a couple of times. And so I, I shut down the business in October 2007. I remember February or March 2007. He called me and said, hey Daniel, out of the blue. He said, daniel, I'm just going to let you know I just sold my mortgage business. And I was like, and I'm calling you to let you know. And I was like, why? And he said, you and I have talked that this is not going to end up well. I'm just letting you know that I'm out. And my entrepreneur in me said, no, no, no, I could do better, I'm going to turn around. And that was a disaster. And I got the warnings. I didn't saw the warnings. So now I, I'm a huge trend follower. And the trends, I always measure them and I know exactly what's going on with trends. And I see those signs before and that has really helped.

You mean the external trends?

Yes.

Yeah, yeah, yeah.

You have to measure them, you have to have metrics for them and in all your process systems and procedures you have to have future for forward looking metrics and backward looking metrics. Everything was backward for me. Everything was how much money we made, how many clients we sold. Everything was passed. Now a lot of my metrics are future and I really are able to see what's going on or what's going to happen based on KPIs.

Well, you know, I remember in driving up our last business that I had gotten really focused on future orders, immediate orders, average order size, reorder rate, same client reorder, all those kinds of growth oriented things. But at one point I had really the vast majority of my focus on that and like cash receivables, things like that, but not a counterbalancing focus on purchases and production. And as you well know from our other conversations, we ordered way too much stuff. And even to this day that business still has like in some cases 1000 items of something that got over ordered because of mistakes in our system and no counterbalancing metric to the sales.

I've been to your warehouse. Yeah, but I think you're completely right. So one thing is to have forward looking metrics and you're on backward looking and then one, one on one side and then one on the other, one on the sales and all that and then one on the purchase and operations balance of all those KPIs in those four areas. That's what really gives you a view of your business.

The balancing question I like to ask people is what's the most likely way this could go wrong? Where could this get? So you're driving employee productivity or labor efficiency ratio and something like that. Well, what could go wrong? Well, the most likely thing is your people could hate you because you're driving them into the ground. Right. So then we maybe want to counterbalance with employee satisfaction.

Right, right, right, right, right. Like you could be growing your sales a lot, but the employee satisfaction is going down or your, your product quality.

Your net promoter score, any of these things. Right. There's a lot of different counterbalancing metrics that we could choose, but the, the sort of, the best one is what's most likely to screw up.

And whenever you see that, your visibility of your business changes dramatically.

So you've done a lot of work and talked about the stages of growth and I think it's great, I quote you often in the stages of growth, when we talk about the evolution of the team, the structure of the team, the structure of the people, we talk about the structure of the systems, how we might go from QuickBooks online to an ERP system at point, that whole thing. But through all of that, right there's one common thread, and that's the entrepreneur, the CEO. And I've seen many when I think about. And one of the things I interrogate clients with today is how do I learn from the clients that have sort of failed our process, have quit the process. What's common to that, and how do I not be that? And I'm always pushing them all. Are you yourself coachable when I tell you that the whole reason your team is passive and your results are flat and people are late is because of the little things that you do that then ripple out in every way? Not everybody gets that.

So let me walk you a little bit on the background of this. I'm a lifelong learner, as we explained in the beginning. If you were seeing my camera, I have over probably 1500, 2000 books, and I probably read half and skimmed the other half. And I have a really big, painful tower of guilt as Vern mentions of books that I want to read. But all the books, they tell you things you have to do, but they never tell you what stage you have to do it. And I realized this. So like a human being, you're a baby, you're a kid, adolescent and adult. The food that you have to give in each stage, it's completely different. The attention, the amount of permits, the liberty, their objective. Everything is different in each stage. And companies, we think we need to treat them exactly the same. And I think that it's completely incorrect. So I. I saw a chart indeed by Vern that says that 96% of the companies never do above a million dollars of revenue. The US today has 28 million firms. 96% of them will never do over a million dollars of revenue a year. Then there's just 5, 4% that go over a million, just 0.4 that go above 10, and just 17,000 companies that go above 50 million. Each one needs completely different attention. Employees, systems, procedures, and the rest. Like you were mentioning at the beginning of the podcast, like on stage one, who does the accounting, right, or the bookkeeping, you, as entrepreneur, do everything, and part of that is doing the accounting or bookkeeping. On stage two, you kind of hire someone to push numbers, but you could not really choose a really good CFO or a good accountant. You get a friend or a family member, but it's kind of good with numbers and discipline, and you put it to run your numbers. On stage three, you hire an accountant, and on stage four, you hire a cfo. It's just different needs, and each one will require different tools. Like whenever you're running yourself, your accounting, you have it in, I don't know, post its and handwriting and everything. Then you're going to do an Excel spreadsheet for your bookkeeper and then your accountant is going to run it in QuickBooks. And then your CFO, he wants SAP to have multiple currencies. So every stage has different needs. And you as a CEO has to be able to understand what stage are you at and what's the right thing. You have to feed your company to be able to go to a next stage. And we've learned that the most important determination for you to go from one stage to the other, whatever is the bottleneck. It's always the CEO. If you see a bottle, the bottleneck is always at the top. If you see at a company the bottleneck, it's always the entrepreneur, the mindset of the entrepreneur. Here I like a quote from Einstein. They say if you have, let's say a level two of mindset of knowledge and you create a problem in level two, you could not fix it from the same level that you created because if you created that there, that's because that's your, your cap. You have to be able to go to three or four to be able to fix a problem of level two. But once you fix it, you immediately create another problem on level four. And then like that goes so on stage it happens the same thing. The entrepreneur has to evolve to go to the next stage mentally and their tools and their, their thinking and their view of the company to then be able to take their team and the team is going to be able to take the company. And I see that all the time with all my clients. I've been a CEO coach for the last 10 years and that's the hardest part for my entrepreneurs and my clients. They really don't understand how to go from a startup to a grow up, to a scale up and then to a real company.

So this is the thing. I think that as we get more experience as coaches, we have to reinforce and remind folks that, yeah, there's work to do with your business, there's work to do with the team overall, but there's a little bit of it. The core of it or the reason that it comes, it all resides within you, between your ears, right?

Yes. 100%.

We have the companies we deserve.

100%. I could not agree more with you. And the challenges that you have is the challenges that you serve based on your mentality or your mindset.

Right. And the current way of being and operating. Right.

That's Great. So I tell people, if you want to grow your company 10x, you first have to grow your team 10x. And to grow your team 10x, you first have, you have to grow 10x. So if I go, let's say from level two to level three, or from stage two to stage three, I have to mentally go there first, then be able to take my team or hire a team for stage three, and then they're going to be able to help take my company to stage three. The way I see it in stage number one, I'll give you some things that I see, similarities in each stage. Let's say stage one, a company, it's one to five employees normally. And I'm going to talk about number of employees. That's what creates complexity in companies. It's not really sales. Yes. People said, Well, I do 10 million with five people, great. But the complexity of the operation, it really is. That's correct. Stage one, it has one to have employees. And the entrepreneur really does everything. He's the technical work, administration, entrepreneurship, sales, clean the toilet. You do everything on stage one, Right. And on stage one, you really don't choose your employees. Your employees choose you. Like you don't have good salaries, you don't have good benefits, your company has a lot of risk. Your employees really choose you. So whoever allows to be hired, hire them. And that's what happens. Stage one, then stage two. Now you're not an entrepreneur. You have to become a leader. And a leader has to lead a team. So for you to be able to lead a team, you have to start communicating a vision, a direction of where you're going to take the company and start delegating stuff. But in that stage, you probably have six to 15 employees, more or less. Focus is 100% on sales. And your job is to lead people one on one. And you could dedicate time. And if something is going wrong, you could sit with a person for half hour or one hour or two hours and just have a good talk.

We start to see coaching skills get developed here and the articulation of the vision of the company. Things like purpose and values are often loose, not rigorous. They're directional, right?

That's correct. But imagine, let's go back to the vision as you said. So if you don't, I sit down for half hour, even if I don't have a very compelling vision. If I tell you my vision in half hour and I go around, you get what I want. Right. On stage three, now you have to lead through other leaders. Now I have A head of sales and he has to be the head of sales for my sales team. I could sit down with each of my sales team members for half hour or an hour. I just can't do it. So you have to have a very, very clear communication and have to have a great sales manager for that sales manager to be a great sales leader to my team. So the complexity just jumps 10 times between stage two and stage three. That's precisely when mission, vision, BHAG, brand promise, everything we do on the one page plan begins being very, very critical indeed. I call the stage three a scale up. That's when you really begin scaling until stage three. It's premature scaling. If you try to scale your company before stage three, you will make damage to your company. And I've seen entrepreneurs raise $20 million on stage one and two and blow 19 and a half of them.

Yeah, you know the one thing I would say along that and we did a show with a couple people on this, but the one that immediately stands to mind, comes to mind is Darius Mershahzadeh, who's also birthing a giants guy. He laid the foundation rigorously at stage one and two, but he moved quickly through those stages into the scaling stage and grew the latest company rapidly so that there was less confusion. So getting it's, you're not really scaling at that point, but you are nailing like purpose, values, brand promise, core customer, things like that.

And the clearer that you're able to say it and express it, the clearer your team is going to be able to go with it and run. But really we call stage three a scale up. I really believe it's very dangerous to try to scale your company before stage three. In stage three, instead of being a leader like stage two, you become a leader of leaders.

For our listener, what are you calling stage three in terms of the employee size?

16 to 250 employees. Now I cannot lead my sales team. I have to lead my sales director or my sales manager and they're going to lead my sales team. You have to become a leader of leaders and be able to help that lead leader that. You have to be a much better communicator, help them to design their action, plan their teams. And now, as you said, coaching is extremely critical because now I don't become the boss of my leaders. I become their coach. Imagine I have a lousy operations manager. How many operations problems I'm going to have to fix? A lot. If I have a great operations manager, how many problems I'm going to have to fix? None so my job is to have my first line of really, really superstars. And that you have to do it with coaching. You could not be their boss. Now you have to become their coach. And then one of the things that I do with my clients when we coach them on stage three, the first thing that we do is the org chart. We reverse it and put the leader in the bottom. The job of the leader is to support their first layer and make them great. If they're great, they will build a great team. If you have a great team, then they'll serve your clients great. But on stage three, you become a coach and the support for your, your first line of managers or directors. I really believe stage three is the most critical of a company. Stage one and two, you could go through stage one and two, just the determination of the entrepreneur. You could not go through stage three with determination. That's when all the tools and skills that you build through stage one, stage two, that's when you really use them to scale your company. And what we believe happens on stage three, you begin putting a lot of, let's say fire into the company. You begin scaling and the wheels begin falling off the bus. So your systems and procedures, your infrastructure is done mostly manual or very weak systems. And that's where you have to redo your systems and procedures in a way that are scalable. I was talking with Entrepreneur a couple of hours ago and he said, today I'm getting like 3,000 people in my platform. My next level, I need to have like 20,000 people, one platform. And I said, okay, what's your biggest problem? He said, my technology will not handle 10,000 people. My site's going to crash. So if I really raise money and put the money in my systems today, I will break my systems. So I need a year after I raise money to change the platform to be able to receive 20, 50,000 people at the same time. Today, if I get more than 3,000 people at the same time, it's going to blow up. And that's where your infrastructure begins having problems. Stage three, now stage four, above 250 employees, that's where you dominate your industry. And here's the first time you begin talking about market share people. Sometimes you have a client on stage one, on stage two, and they say, yeah, I have 2% of the market. Like it doesn't matter. You're so small that you're not really gaining market from anyone. When you're above 250, that's when you begin talking about market share and winning market share. From someone else. That's what I call dominate your industry. Because that other mindset is how you dominate your industry. How do you get market share from someone else? How do you innovate faster and how do you implement faster innovation and adapt faster? Here the entrepreneur has to change to strategic innovator, change catalyst and chief of culture. You have to become like a satellite around your organization. The organization is going to run without you in the day to day operation, but you have to be like a satellite, making sure they're innovating, they're moving fast, they're following the right culture that you let or your structure by design. On the first stages now they're running and innovating fast. When they're in the middle of the operation, it's very, very hard for them to innovate. You are going to have to be on the outside helping your team to move and innovate. That's where I see the four stages. And there are six competencies you have to develop to go from these stages. So I'll give you an example. On stage one, you have to understand strategy and you have to understand marketing strategy because you have to redo your strategy, really understand your market and what niche you're going to develop and all that. And then you need marketing as a communication channel with your prospective clients. You need to be very, very good to be able to communicate what you want, to sell to them and hear from them what they want, what price are they willing to pay, what channels they wanted, what customer support. So through marketing you're going to design a strategy that your clients are willing to pay. So the most important companies you have to develop on stage one, strategy and marketing stage two. The hardest part is leadership. Now you have to become a leader. Now you have to lead people. So you have to learn leadership and you have to really dominate sales. That's when you have a lot of cash flow problems. Now you have a fixed expense, you have salaries, rent and all the rest. And the most important thing on stage two is that you get enough sales and cash flow to maintain the company alive. And Vern says this, and I remember it very, very vividly, he said, Daniel, on stage two is where the entrepreneur gets the oldest. That's when the entrepreneur, when you're having casual problems, that's when you really suffer as a leader of the company. So the sales and Ross shot that, he's my CEO, has a saying, sales fix everything. And that's when you have to really build a system to consistently and predictably bring sales to the Company.

Well, but as we both know, you can grow right out of business. Right. I was working with a client in the last week that has had huge growth this year. But then suddenly there's funding issues and we have to tighten all the processes to do with the cash flow because there's things that aren't being invoiced in a timely manner and things that are getting hung up and people are so busy, they're like, oh, I'll get that invoice out later. But then that quickly starts to add up when you grow quick and now you're like, oh, we have to go borrow money.

That's because they tried to grow it prematurely. Right. And this is something interesting, the best interpreter that I've seen. They understand what they're going to build in the next three to five years and they're able to understand what team members they need to bring, what characteristics the company is going to have, how much funding do they need, what kind of channels they need to have dominated. You really have to be able to see your company next two, three years strategically and start building it little by little. And as you said, when we talk about at the beginning, the KPIs, what are the KPIs on both sides, on the people and process side, and then on both sides, the future and backward looking, those are the tools that do well, the ones that are able to build it in their mind first and then build it with all whatever they.

Need, envision it, plan it, anticipate the problems. Right.

Thank you. Thank you for bringing that word. That was correct. They're able to envision it before they build it.

Yeah.

So I was saying stage two, you have to get leadership and sales and then stage three, it's all about culture and execution. That's when culture really stinks. If you didn't build it correctly by design, as Jack Daly teaches you, because once when you go to stage four, now the company is too big. If you don't build the right culture, it's going to really stink. So you have to build great culture by design and then focus on execution, getting the right systems and procedures, operating people to make the company scale.

There's a caution here for our roll ups as well, because I've worked with a few companies where they did a bunch of acquisitions and then we end up with a leadership table. Maybe there'12 people sitting around the table, half of whom came through acquired companies where they were the CEO and their values, even if they were close, were not an exact match for the other. And their vision for the future is not exactly aligned. Now we end up with 12, 10, 13 people who are all arguing not only about a different vision for the future, but who to be and how to get there. And the culture of the company fighting for, for that heart and soul and can be a massive problem. So whether it's an acquisition thing or an unsettled matter that has been in the background forever about what kind of business you are and what vision you have, I see lots of potential problems here.

And that's when for me, in the stage three or the scaling up stage, that's when these kind of issues, now you have money or you could raise a lot of money and you believe you could throw money to mistakes and just fix things with money. And if you don't build it correctly, you don't have the right culture, the right messaging, the right strategy, the right communication channels, the right team. Just things blow up everywhere in the company. And that's where you see disaster of people.

And there's always like, I think a hopefulness about fixing it or bringing people along versus just saying, look, you don't belong, you're not happy here, you're never going to win. Time to move on 100%.

And I tell people that. How many Gerbers do you have in your business? And they say, what do you mean? And they're like, yeah, on stage one, you feed your baby with a Gerber, right? So your employees, they're Gerbers. They're, they're, they're, they're used to be with you all the time, coming to your office at every five minutes to ask you questions, come to you and ask them to get you to sign checks without jumping every system and procedure. And you keep them there because you love them. They were great in the first stage where they're terrible. On third and fourth stage, it's like if you want to give Gerber of food to a 40 year old male, it just doesn't work. They need something completely different. So I tell people like, how many Gerbers do you have? And they say, what do you mean? Like how many people that were with you on stage one or stage two that they were very important to you on stage one and stage two and on stage three they're recruited into a very small corner office. And they look at me with panic eyes and it's like, well, my uncle or my nephew or my compadre is there and I cannot fire them now. Like, what are they doing? Well, nothing. Why not? Because I don't trust them in anything. But they were so important on stage one in the beginning, at the beginning, they don't have really the guts to fire them. So they keep up. And then those people create a lot of problems. They become a cancer when the company's growing. Yeah, they hold it back.

Yeah, I see this frequently with a founder, family member, friend that help get something started. They don't really have a job in the same sense anymore. It's murky what they can and should do, and yet we're not getting rid of them. And we very frequently aren't separating ownership from the operating role 100%.

Indeed. I'll tell you a story. When we built our first company, we started four friends from college. By the way, I'll have to tell the story that it was fascinating. The four of us sit down in a restaurant and we said, okay, let's start the company. And we decided how much money everyone will support and all that. I said, okay, let's divide roles. So we said, okay, we're going to do a financial institution online. So we have three pillars. Technology, finance, and marketing. So we said, okay, great. Who's going to do finance? And the guy said, well, I know the most about finance. I'll be in charge of finance. Great. The other guy said, well, I studied mechanical engineering or something like that. Electrical engineering. I'll be the head of technology. Great. And the other guy said, well, through high school, I helped my friend, my father sold his concert, so I know something about sales and marketing. Great. And they look at me and said, what are you going to do? So I look at the three of them and say, like, wow. So we have three pillars, and each one of them is much better than me in the three pillars. So I look at them and said, okay, I'll be CEO. And they just looked at me like, why? And I was like, someone has to be CEO. And they looked at me really puzzled, and they were like, okay. And that was it. That's how I became CEO for the first time. And now I've been a CEO for 18 years. It's just I was the one that knew the least about everything, and that was a logical position.

I have somebody rising to a leadership role with one of our teams recently. And I had a conversation with him. The CEO asked me to have a little pep talk and talk about rock habits and scaling up and all that. So we check in, and one of his background concerns was like, look, everybody on the team is more technically skilled or not everyone, but many of the team know the industry, the domain that we're working in better than I do. I'm like, great. That's not where your leadership comes from. Your leadership has nothing to do with you being the top dog and all that. It comes from your willingness to lead, your willingness to corral the team. You are a servant of the team and the mission and the business. So you serve in the leadership role, the team and the future of the company. And it's really your willingness to lead and to own it and to give them direction, to pull them together, to coach them. That's the essence of this level of leadership. It's nothing to do with you knowing this industry.

100%. 100%.

The knowledge of the industry gives you some language, some understanding of what they're dealing with and that kind of thing. But as you grow, it's really more about that willingness to lead. So wherever your gap is, if you just bring humility, but where you will inevitably get tripped up is if your ego is triggered and you try to play it off or pretend you know something you don't. And every time you and I do that, we get in trouble. We know.

You know what really makes me laugh? People come to me and said, hey, I want you to make me a leader. Yeah. And I was like, what do you mean? I said, yeah, give me a position. I want to be a manager or a director. Yeah. And I was like, you think you'll be a leader because you have a title?

Yeah.

You have to win it. Yeah. You have to develop it. You have to gain it. Yeah. Get people to follow you. And the position is going to follow that. Yeah. But if you talk and no one listens or everyone thinks you're crazy, like, I'm going to make a big mistake of giving you a leadership position.

Right.

If you want to be a leader, you have to earn that. You have to win it. Yeah. Yeah. And they said, well, you have to give it to me first. And I was like, you're the wrong leader.

Yeah.

You just didn't got it.

I remember once when I was very young and leading a very big business, and I was under 30, and I was leading a piece of a business over $500 million in size, and I had formed it and grown and done all that. And one day outside my office, there were these two women talking about leadership in the company, and why wasn't anyone giving them any leadership? They had gone to school, they now had their MBAs. And I was a college dropout, Right. And I thought about it and I'm like, okay, I have to find I can't go bust them right now, but I have to find a way to tell them. It's about stepping up. The first step is like, I'm willing to lead. Yes, I will take the point. Then the second thing is about being humble. Like, I do this on behalf of the mission, on behalf of the team, and all that kind of thing. And then we get into. I have to see and relate to both the enterprise, the business, the organization, and each individual as a bigger, better future version of themselves than they are today. I have to keep seeing you as more awesome than you're currently acting like. And I have to keep speaking that future, both for the business and for you. And if I'm willing to lead and keep seeing and speaking to you as a future version of yourself and speaking to the people naturally want to be around you. And then, of course, you have to get good at planning and organizing and thinking about some of that stuff. But at its core, that's it. Step up and. And speak to the future.

And they don't understand how lonely is to be a leader.

Oh, geez.

How challenging is to be a leader.

Yeah. Yeah. Our listeners will know that, right?

I hope so.

And that's why the things like our peer groups and organizations like YPO or EO are so helpful. Because the problems that we face often as leaders just sound like bragging to other people. But they're real problems that need addressing.

Right, of course. And you feel like the first time when we built a company, the four of us, I had to fire two of the four co founders in the first year after we sold. And the first time I needed to fire one, I remember I came to my forum and said, well, I'm really having a challenge. And everyone said, what's your challenge? And I was like, well, one of my co founders, one of my friends is not working. And now we sold the company or it santander, and I'm the CEO. I have to do whatever is right as a CEO, and I need to fire the person. I have no idea if it's possible. And they looked at me and said, like, why not? You're the CEO. Just fire it. And they were like, how do you fire a co founder? I thought it was the end of the world. And everyone said like, it's very common that has happened to all of us. And they put me through a process, came back to the office, next day, fired the guy.

Yeah, well, you definitely need to do that carefully. I've seen people do it well and then I've seen people torpedo their companies by doing it poorly. Right. So there's a way to do it. I think so. We've covered a lot of material for one show. We've talked about the various stages of growth and things that you have to do to develop in yourself as a leader. And we pointed to a whole lot of areas that you're going to go through. From learning how to work with people, from learning how to articulate and communicate the strategy for the company and how to evolve it over time, from developing good financial management and funding the business, from all of the executional things. And at each point, there's something to develop in yourself. You are the bottleneck. And the key to moving through all the stages is becoming a lifelong learner, surrendering to the fact that you'll never have it all. You're done. One of our core values for our business for me, is never finished. And I have a picture of that. And the picture for never finished is this guy, Jack lalanne, who was a fitness guru who worked out to the day he died. And I just like to think of that like I'm never, ever done until I stop breathing and then I'm done. And it really inspires me because there's a kind of a freedom in that. If I think that I'm somewhere to get to, I'm always unsatisfied because I'm not there yet. But if I live in this. Never finished. It's a great place to live.

It's a great to grow, but it's a lonely and painful state to be.

It can be. Yeah.

Because you always feel that you're not there and you have to push yourself. But I live there. I've been there for 18 years. But we have to accept that it's a hard one. Yeah, it's the only one, and it's a hard one.

So that we have hardly talked about this, but as we wrap up now, I'd like to point to. So Daniel's a successful entrepreneur. He became a coach. He's been highly successful working really all over the world as a coach for growth. And along the way, he started this business, the Growth Institute. This is the online learning piece for our scaling up world, the. The Growth Institute. And on the Growth Institute, there's a whole range of online courses, videos, and that kind of thing where you can learn and develop yourself in all of these areas. And you've put all of them together in a MBD program. A master of business dynamics. Could you just say just a minute about that before we wrap?

So first, the most important learning I've had being an entrepreneur is the faster I grow my team, the faster they're going to grow my company. So I really became a lifelong learner myself. But very soon I realized that it was not about growing me that fast, it was growing them. So I could always push myself to grow, but I really need to push my team to grow and help them grow faster. For me, it was very, very important. And I gave him books and talks and all that. And they were never really implementing. So I really wanted to build something that I could help my team implement and be better. And after giving books away and buying a lot of books in Amazon, giving a lot of money to Amazon, I came back and said, now I'm going to ask them how they want to do it. And everyone said, video. I could watch it faster. It's more entertaining. I like to go to the movies when I'm in the plane, I could see video. So give me course in video. So I went and recorded the thought leaders that I admire the most, that have helped me the most, my competence that I need, and I put them on video. And what a difference that makes. I'll give you a number as an example. The average completion rate of a class online is 3 to 7%. The ones that paid and all that gets like 15%. Our completion rate is about 70%. It's just massive compared to the industry. And it's precisely because we don't focus in completing the course. We focus on you getting results. Since the class, one day you begin learning and implementing your business and once you begin getting results, you get hooked on getting results and you want to give more results. That's why people finish our classes, because they're not really focusing on learning and finishing the class. They're focusing on getting an improvement in their company. And once they begin getting results, they just get hooked and they continue with the class until they finish and they implement fully the improvement in their company. So I went and recorded the thought leaders that I learned the most, that have helped me the most to grow. And I put them in video with coaching calls and masterminds and tools to help people implement. And then we have over 110 classes. Probably we have the best others in industry. Malcolm Gladwell Seth Godin Pirdiamandi Salim Ismail Vern Harnish Jack Stack Amazing thought leaders. People say, okay, great, you gave me all these 100 courses, which one should I take? What's the order that I need to take them? What's the right for my stage? What's right for my position. And this came with a lecture, with a presentation, sorry, with a conversation with my father. My father has a PhD in economics from Nordim. And I asked him, hey, why did you study a PhD in economics? I said, well, in the 50s or 60s, if you want to learn business, there was no business school. There was economics. And that was the closest thing that I was to be an entrepreneur. So I went and learned economics. And I said, and why did the business school start it? And he said, in economics, you see a lot of theories and all of these very big thinking. But we don't have tools of how to grow companies. So the big corporations ask the schools to build them, a business school to create employees for the big corporations. The MBA is a structured program to help executives become great executives for big corporations. But there really are, if you want to work for banking, for consulting, or for a Fortune 5000, the MBA is the right thing. At Growth Institute, we build the mbd, the Masterpiece Dynamics, and we teach you the dynamics of growth of companies and all the tools that you need to go from stage one to stage two to stage three to stage four. We really build executives, experts on scaling companies, but not just the mbd. We have what we call an mbd, then what we call an MBD plus one, and the other one's MBD for teams. So MBD plus one, the CEO takes the MBD if you're on stage two, and then your finance class, you take it with your CFO and your sales class, you take it with your head of sales and your marketing class, you take it with head of marketing. So every class, you take it with one of your team members and you get an improvement in that department with their KPIs and everything they have to do to be able to improve that department. Then we have what we call scaling up teams, where we take full management teams together through all the tools they need to know of how to scale companies. We really got all these great thought leaders, but then put them in format and structure to help teams go from stage one to stage two to stage three to stage four and really help the entrepreneur evolve from entrepreneur to CEO. That's what the magic comes with. Growtheaster.

If you're just trying to get to the first 15 people, then there are elements in this for you to learn for yourself. But it's really about the extended program is really to get you to hundreds and thousands of employees and be able to manage all of those stages of growth. So you start with the MBD and the plus one and the MBD for teams. And you go through that and that provides that. I think it's really important, especially because we have so many listeners in organizations like YPO and EO that you do a lot of things for your own development. This is a more formal, proactive thing to do and touch all of the key areas. But then it gives you a way to introduce this to your larger teams so you're not trying to explain to them why something is important and why you're doing it. You're giving them the same education directly.

So as an example in very important what you mentioned, I am an EO member and a YPO member, and both organizations are amazing. I've been a member of EO for 18 years and a member of YPO for last year, and I've learned amazing things. But it's just for me. And I'm like, I've read over a thousand books. I've been developing myself for 18 years. I need it for my team, and they don't have that support. So we saw a really big gap in the market to help the CEOs or the entrepreneurs or founders to really help grow their team. So we're all about growing their team. I am a member of E on ypo, and that's where I learned and that's where I grow with my forum and all these kind of things. But we need tools for our teams. This is the perfect. We believe this is the perfect methodology and tools to help grow your team. But to help grow your team, you have to grow yourself and then be able to grow your team. So building the organization that we wish I had when I was starting to be entrepreneur for the first time, and I needed those skills to be able to take my company to the next level.

So let me just cut to telling people where to go, get info about it. So we don't become too much of a commercial for it, but it's really in service of them.

Right?

So just go to growthinstitute.com scalingcoach and you'll find everything about the MBD. Depending on when you listen to this, there may be a webinar there or direct information on the program where you can sort of learn and get your questions answered. There's a lot of material there, so it's worth looking at, thinking about how to integrate, but it has tremendous opportunity. Daniel, I want to thank you so much.

Again, most importantly, call us. We love to talk to entrepreneurs and team members and really understand where they are and what challenges are having. And we really believe every challenge or opportunity you have your business, someone else already had it and wrote a book and wrote a mythology how to fix it. We'll just help you identify that methodology or that book.

All right, so reminders growthinstitute.com ScalingCoach is where to get information about becoming, becoming a lifelong learner and everything you need for that around the business. Right? And then every week we come here with a new podcast, new thought leader, author, entrepreneur, coach on something to do with the growth of your business from the world of Scaling Up. We're here every week and you'll find that along with all sorts of free tools@scalingcoach.com and you can subscribe there. We'll send you updates and summaries of the podcast you can find find the full library, all sorts of free tools, even a free copy of it. We'll give you a free copy of the book of Scaling Up. You just pay for the shipping and handling right there@scalingcoach.com thanks again, Daniel, for being on the show with us today and for talking a big thank you very much, Bill.

Really appreciate the invitation.

I want to give special thanks to our original growth guru, Vern Harnish. Our show is produced by Niobaid with audio production by Podfly Productions. The the audio editing is done by Albert Burge and our show notes are compiled by Ein Codena and proofread by Tim McGowan. If you got some value out of our show today, please share it with somebody else and let us know the parts that you love so we can give you more of those. Thanks again for listening and keep scaling Up.

Sam.