The extremely exponential cost of complexity as you scale - tough lessons from 2025 - Ep 112

Yo. So I finally got a fucking car here in Dubai. Crazy cheap. Might do a little car tour. I'm a massive car guy. I used to have some crazy cars. I don't have a crazy car now. I'm in like practical fucking investing all my money mode. But yeah, cars are a good place to do this sort of video. It's funny, I'm driving like literally two minutes down to the gym because it's novel having a car again and I wanted to film this video. I just find it therapeutic filming stuff in the car. Haven't driven properly. In fact, I haven't driven at all in like five months. I've been getting Careems and Ubers everywhere, which sounds like a great idea. And then you realize that I just get mega carsick and the whole thing of, oh, you don't have to drive, you can work in the back. Well, that's a nice idea until you realize that you get mega car sick like me. Anyway, feeling spontaneous with videos recently. The thing I want to speak about today, and some of that's been massively on my mind recently and might be relatable to a lot of people at this kind of messy middle scale stage, is the exponential complexity, is the exponential cost of complexity in the business. I have found the business feels people walking the road because they don't seem to realize that it's a road for cars, not fucking people. The exponential cost of complexity in the business as it gets bigger and obviously more complex. I have found my job and just the business as a whole and I'm across a lot of things. Obviously I'm the founder, I'm trying to be closest to growth, but like at the end of the day, I'm across everything. Product growth, supply chain, finance, hiring, etc. Obviously. And I feel like complexity for me has scaled far quicker than revenue has because it feels exponential. I think that's probably normal to some degree, but I don't think it has to be the case. If you acknowledge it and then go back and change. And what I mean by that is like back when the business was doing 100 grand a month, saying like month two and it was just me was pretty simple, right? We had one product, one channel, one person that was that. It's obviously not scalable forever that way, of course, and over time you hire more people, you probably do more things. And you know, now the business is like 20 times that size or whatever. But it's probably also 200 times more complex in a way because everything, like I said, is exponential. And then I feel like it gets to the point where it is so much more complex that actually it's probably stopping you from getting to the next stage of scale. And it then feels like the ultimate irony is like, the thing that you put in place, doing more channels, more products, bigger team, more processes, whatever, to try and get to the next scale. The next level of scale is actually the thing that probably to some degree stops you getting to the next level of scale. Of course, you need some structure and processes. You're never gonna be just. Well, you might be, but you're unlikely to be one product, one person, one channel, and scale to, like, 50, 100 million, obviously. But I do think there's a sweet spot, and it's probably only as a result of getting complex and realizing, oh, shit, we don't need to be this complex. I think there's a sweet spot where you can bring it back to the optimum level. And the optimum level is probably just like, recognizing the 8020 rule, right? Of, like, most things we're doing are probably not driving that much value. And the few things that are, we need to double down on that. And even if it seems, like, stupidly simple, just accept that and be like, actually, yeah, we. We can be basically one product, one channel. We can be far more simple and be bigger. And I think it's almost like I'm parking this car for the first time in a tight car park, basically because I wanted to film this video. Basically, the thing I've realized is, like, you don't have to be as complex, and it's obvious stuff, but I think when you're in the midst of scale and everything feels complicated and there's a lot of busyness. Like I was saying to the team the other day, like, firstly, we shouldn't do a call that's more than half an hour ever. And we do a lot of those. And I love small talk with the team. I love talking about random shit, and I'm probably massively guilty of that. And maybe the fact that a lot of calls are more than half an hour is my fault. But, like, you probably don't even need half an hour for most calls. It could probably be 15, 20 minutes. Is this guy gonna crash into me or. Yeah, I felt super busy. I think the team's felt super busy. I think it's really not a flex to be busy. It's a flex to be effective, right? And have output and results that are a reflection of quality deep work in a few areas rather than being busy and frantic. And I think it is inevitable to some degree. That stuff gets, you know, more complicated and frantic. I can't fucking find anywhere to park here. This might have been a mistake. Maybe I'm just going to do a loop purely for this video. Can't go in there either. Yeah. Like, it's not. It's not impressive to be busy. It's not a flex to work 15 hours a day. Even though right now I feel like I am. And I felt like that for the past four years. I'm calling myself out. I said to the team the other day, like, we should all feel effective and far less busy. What the fuck is this guy doing? It's hard to make a video when you're in a car park that has a bunch of people that don't know how to drive. Yeah. So the team should be far less busy. We should focus on, like, it almost seems dumb to say anything we're not doing. So anything we're doing that doesn't drive towards X, which for us is probably nailing our hero offer with our rebrand in two and a half weeks and improving LTV to cac. Like, anything that doesn't directly contribute to that, stop doing. Even if it's a nice to have, even if it could be good. Obviously, last year we did a lot. A bunch of product expansion. And sometimes there's like. There's like one product in particular of that lot that, you know, we spent a lot of time and effort and money developing, and actually, it doesn't fit where we're going. And it wasn't the best product. In hindsight, I'm completely honest. So there's like a sunk cost of, like, oh, we can't cut that, can we? But I'm saying, no, let's cut it. It's not working. There's no point forcing something that we don't want to, like, remain in the business. We may as well just cut our losses, accept that that was the learning, which is valuable in itself, and just crack on with the main thing. For fuck's sake. Both my tires. So, yeah, like, I'm probably very adhd. I'm always thinking about a million things. I'm also trying to park right now in a car park that has no spaces. I'm literally going around in circles. I don't really know how productive this is. I might have to leave and accept that I can't park here and go somewhere else. Give it one more try. But there's new people coming in every five seconds. This is not very good. But we're gonna go around this car park for 20 minutes. I could have just got the scooter to the gym, but then I couldn't film a video in the car. Yeah. Like, basically what I'm saying is I think it's okay to say, well, fuck, let's just sack off. The things that we've decided don't need to be a focus. Yes, you can make a lot of different things work. I'm sure we could scale one of the new products we did last year to the same levels of rainbow dust if we chose to, but it would reduce focus on the main thing. And does it make sense? Like, I'm not sure. Fuck's sake. So, yeah. And the other reflection I have is making this video on trying to find a parking space is not great. So I keep losing my train of thought because people nearly crash into me. The other train of thought I have is, like, when I started the business, I started with one skew, literally one skew, one flavor, one product, because I wanted to avoid complexity from my previous businesses. I Midnight City and Neon beach and other stuff I'd done. And then as we've scaled and so on, like, you forget that that was. I found a spot finally. Where was I? Yeah, I feel like I should have come and parked before trying to make this. Yeah. I don't know if there's any value in what I've just said. Feel slightly distracted. But I guess the summary is maybe I'm coping by saying this is normal, but it's been my reflection. I'm just being fucking honest. The business started intentionally. Very, very, very simple because I wanted to avoid the complexity from my previous stuff, which I just knew wasn't effective. It then has got much more complex through thinking that complexity was what we needed for scale. And you do need some, by the way. But I still think you can scale without being complex. And that comes down to, like, systems, less calls, better processes, less light channels, etc. And now I've got to the point where I feel like the complexity that we thought we needed and some of which we did to get us to the next level of scale is actually preventing us from going to the next level of scale again. So it's like, what got you here won't get you there. And I've heard many people talk about, like, the messy middle kind of scale stage where, like. And this is probably the best reflection, it's too big for me to run it all as fan, obviously, and it has been for a while, but it is. We're not quite at the level or like team maturity and process maturity where it completely operates like a well oiled machine without any chaos. And I think that's the same with any scale up. Right? But you want to get it to the point where it's as well oiled as possible. And trying to do that in the midst of trying new things, hiring new people, new markets, new retail channels, etc. It's just fucking hard. I think probably even more so as a solo founder, right? To some degree. And that's not me complaining, that's just an honest reflection. So if I was doing this again, I probably would not do it anything as a solo founder if I'm completely honest. Some of the team do feel like co founders to be fair, but it's not quite the same, I guess. And yeah, like it's so obvious in hindsight some of this stuff, but I think you do have to go through it to realize and I feel very down about a lot of things from the past year in particular I mentioned that in a previous video. Like 2025 is the biggest learning curve and it definitely fucking was. But yeah, I also think it just feels nice to not be. For things not to be complicated, for things to be simple and clear to the team and myself and giving everyone space to do a few things very well. Because the way to scale to the next level I've realized more than ever is like comes down to doing a few things very well. This is kind of obvious stuff, but like I'm almost dropping too much sauce here. But I think the most important thing we should have done last year was make our core product excellent instead of good. Instead we kept that product good and did a bunch of other good products. Which good probably isn't actually enough these days to win in a tough crowded market at the scale we're trying to win at as well. Because at scale everything gets exponentially harder because inevitably CAC rises. Your kind of wall of churn comes in, I. E. You've gone past the early adopters who retain the best and so on and so on. And Jack Rubin from Purdy and Figs spoke about this on a LinkedIn post and it's very true. Basically your business has to get like pretty much 40% more efficient or better every year because of those two factors. CAC goes up inevitably. And also your quality of customers because you're going to the next percentage basically gets worse. Especially in a relatively small market like the uk. You might have more headroom in the US for that to be less of an issue until you're like 200 million or something. And then also the complexity point is you end up pursuing new products, channels and markets, hopefully not all three at the same time, which we kind of did this year, but at least one or some of them because you cap out the economics of the channel you're doing now. Right, so like rainbow dust, one market, one channel. So rainbow dust in the UK D2C worked really well, but past the standard scale. You can't keep doing that forever. And you also have to plan for how do we get from, you know, where we are to 50 million or so we get to there. How do you get to 100 million? You're not going to do that just in the UK with one product. So you need retail, potentially you need new products, potentially you need new markets. I guess my reflection, and this is a very painful, expensive lesson maybe I shouldn't share is my view is an established product in a new market is probably a better route than a completely new product in the same market. People have different views on that. But that would be my view. Trying all these things gets exponentially more complicated again. So yeah, it's just like this is also why often people think, say you're at 10 million, oh, we just 10x advent and get to 100 million. If it was that simple, everyone would be selling to Unilever for 500 million. Right on like a revenue multiple. And it's not that simple. And that is also why brands that are bigger and more established and have more longevity at scale get much, much higher multiples. If you look at a brand like Wild, right, I think they sold for like forex revenue from, you know, it was like 230 million. You're never going to get that sort of multiple unless you're at that sort of scale and have established market leading credibility at a scale that is very difficult to get to. Right. And that's why acquirers pay that kind of money as well as the P and L. But a strategic would typically pay over what would be typically a P and L multiple, saying like private equity for a smaller business. And yeah, I think maybe it's not obvious but I thought, yeah, I always thought you keep scaling whatever but like I'm seeing why, yeah, it's really fucking impressive to get to say 50 million in the UK or Europe. I think the obvious elephant in the room sometimes is like why are we not in the us? I think we should be in the us. I have certain shareholders have a different view right now and that's fair enough. And they are right in many ways. But I think there's a time and a place when we go to the US it's probably 2027 rather. Well, it is 2027 rather than this year. Just need to fix some of the fundamentals. Rebrand coming. Well, not necessarily fix, but improve to get to the next level. So, yeah, anyway, this is kind of main reflection for now. I could ramble for 20 minutes about this, but try and avoid complexity. I actually think keeping shit simple where possible is actually how you'll scale. And avoiding the. What feels like the inevitable complexity that comes with the initial scaling phase is just fucking helpful for everyone. And you avoid a lot of the pain that I'm going through now, like having to pivot and change things. And you almost spend half your fucking time managing changes rather than doing shit that grows. And then often think, well, if I was starting again now, what would I do? I'd make it incredibly simple. And it's like, well, you can do that in the current business just with obviously the restraints of being a certain scale. So, yeah, I'm going to leave it there. That's my ramble for this morning. Something I'm thinking about. Maybe useful or insightful, maybe not. But it's an honest reflection. Unlike a lot of people on YouTube who just sit here and tell you how much money they're printing. I'm just. I don't really do that ever. I'm just gonna sit here and be honest about the challenges and the shit that's going through my mind. This has been on my mind for a while and will continue to be. But yeah, hopefully useful. Subscribe to the pod. I'm definitely being more consistent videos and I've said that fucking million times. But I'm just in a more consistent routine now where I live, my office and working with a video guy, etc on a bunch of shit. So, yeah, subscribe to the pod. Cheers for watching. Catch you soon as always. Peace.