Secrets to BUSINESS GROWTH | Unlock Success

Expand before you're ready. My mom always said it was never a good time to have a baby, and she had 10. I don't ever remember her not being pregnant. She was always pregnant. In my memory, pregnant. She's always pregnant, right? I practiced the same philosophy with building my business. I found it was never really a good time to expand. But I always expanded. And the thing that I practiced religiously that helped me grow my business— because you have to realize, if you're the little guy and you got the big guy up here, you can't do the same. You've got to do like 5 times more to catch up. So I practiced— if I had a sales organization of 25 people and I thought, you know what, I'm gonna hire an office that could hold 50, I'm gonna double the size— I never hired the office or rented the office that needed 50. I went out and killed myself to get an office that held 100. I doubled my expectation because you know what I found? I found desk space was just like closet space, it never stays empty for long. You get all those desks waiting for bodies, your whole focus is on finding salespeople, your whole focus is on training them fast and better to get them productive. And I found that I was able to leapfrog over my competitors because I was super aggressive in expanding before I was ready and I trusted that somehow it would all work out and it always did work out because you have a gun to your own head and you have to run like crazy to catch up to yourself. And so it took a little courage or stupidity on the front side, but without it, I could have never grown and become the number one firm in New York. It just wouldn't have happened. It was too long in catching up. Everybody was in business much too long for me to ever catch up. So that lesson is expand before you're ready.

You scale too fast. The foundation of this mistake is the previous slide. So this is how scaling too fast works. So we have now calculated that, conservatively speaking, we're gonna do 1.5 million cans of dog food per day. Oh my God, we need to really put in a service infrastructure. We need to We need to have multiple warehouses because we need the dog food shipping out. 1.5 million cans of dog food per day. You know, we should have a headquarters, we should have a shipping facility in Northern California, Southern California, we need one in Texas, we need one in Chicago, we need one in Boston, we need one in Miami, we need one in Burlington, North Carolina. We need one everywhere because, damn it, we're going to have great service. And so we need these multiple warehouses, we need support 24/7 because people are going to be buying dog food all over the time, all the places, 1.5 million cans a day, conservatively speaking.

Ah!

And so what happens? You make your burn rate come out half a million dollars. And guess what? Your rockstar CTO roommate is late on the software. And so you're burning half a million dollars because you have all this infrastructure, you have people, you have buildings, you have all these systems and all these things in place, and the software is late. This goes on for a year. Right? And so during that year, your investors are now getting a little antsy, but you say to your investors, "You know, we've invested so much training these people how to sell and support dog food. And these are rockstar support people. And our CTO says that we're going to ship next month. So it would be really stupid to fire these rockstar support people, because in 30 days we're going to have to hire back same kind of people, and then we'll have to train them, because it's so hard to sell dog food We have so much invested in them. So let's keep these people on. And for the first 3 or 4 board meetings, your board, because they're mostly looking at their BlackBerrys, are not going to even hear this, and they're going to sort of not do anything, all right? But by about the 6th, 7th, 8th board meeting, when you're burning $500,000, your board is going to wake up. And they're going to say, you know something? We're starting to not believe you, right? And so the key here is don't scale too fast. I have never seen a company die because it could not scale. Do not scale too fast. For once in my life, God willing, I would like to have a problem where a company I'm affiliated with has such demand it cannot keep up with the demand. God, please give me that problem just once in my life, okay? So the solution to this problem is my philosophy that you eat what you kill. In other words, you don't build the kitchen, you don't build the chef, you don't get the waiters, you don't get the restaurant, you don't get anything until you actually kill something. And then once you kill somebody, once you get the sale, then you build the infrastructure. Then you build the support. Now you're gonna say, well, Guy, you know, if you do this and you're actually on time, then you might have a bad reputation. You can't fulfill orders fast enough. You can't do something like that. But again, I've never seen it happen. So a very good discipline is, you know, if you think that you're gonna get 25 million page views a month. So you need to have two sets of buildings and you need two sets of IT and all this customer service. I'll tell you what, when you approach 25 million, let's just worry about it then. Okay, but until then, because the odds are you will be late. Odds are you will be late. So eat what you kill.

My intention with this video was to spread understanding, not fighting. I want you to see that it's not one point of view or the other. You can pull and learn from both, especially the one that you don't immediately resonate with. Embrace the genius of the and.