Every Level of Scale Explained in 23 Minutes

In this video, I'm going to walk you through every major revenue level of business, from 0 to 1 million to 10 million, all the way to 100 million. The skills you need to learn at each level and the skills that you need to unlearn. And I should know if you don't know me. My name is Ryan Deiss. My partners and I run a portfolio of businesses that collectively do over $200 million a year. And I've personally scaled eight businesses from zero to eight figures. So I know the skills that scale, and I also know the skill you need to unlearn almost as fast as you learned them. I've also made just about every mistake that you can make at every single one of these levels, which is why this map exists. So let's get into it. So level one is the zero to about a half a million dollars in sales range. And this is what we refer to as the launch phase. And we call this the launch phase because this is really where the goal is. Traction, product, market fit. You're primarily looking for proof of concept, and that's usually going to show up when you're doing about a half a million dollars in revenue. And in terms of the skills that you need to unlearn at this phase, it really comes down to two big things that you need to unlearn. And they may sound a little bit strange at first, but hear me out. Skill number one that you want to unlearn is planning. That's right. You don't need to learn planning at this stage. If anything, you need to unlearn planning. And the second big skill that you need to unlearn is perfectionism. There are so many would be entrepreneurs that I talk to who tell me about this amazing business idea that they have, and then they tell me about this amazing domain name that they've bought to support this amazing business idea. And I'll ask them, great, when are you gonna launch? What are you selling? Can I go check it out? And then they'll, I'll ultimately hear something like, it's not ready yet. And that's when I know this person's never going to actually launch because they can't get out of the planning phase. So planning isn't progress. Never, ever, ever confuse planning with progress. Planning is playing business. The thing that is progress at the launch phase is selling. So at this stage, what I want you to do is I simply want you to get out there and start selling stuff. So those are skills that you need to unlearn. What are the skills that you need to learn really, really simple. At this stage, it is all about selling and it is all about serving. Can you get someone other than your mom and your old college roommate to buy? This is where understanding things like offer creation, basic marketing skills, basic salesmanship skills are going to come into play. And then serve, fulfill. It looks something like this. I want you to sell something. Step two, get feedback and ask. On a scale of one to 10, how likely are you to refer us to a friend or a colleague? This is what's known as a net promoter score. So step three, keep tweaking until you're getting consistent nines and tens. At which point, if you're getting consistent nines and tens, this is when you're likely on your way to generating at least a half a million dollars in revenue. And this is when you're starting to look and act like a real business. Now, if you're getting fives and six and sevens, that's okay. Go back and continue reworking the product until you're hearing consistent nines and tens. But along the way, you're effectively getting paid to do market research. You're getting paid to find out how to make your product as good as it needs to be to deliver the results so that your business can scale. All right, now we get to level two. Level two is the phase between about a half a million dollars and 2 million in revenue. And you'll see why we get to 2 million when I get to the next phase. But this is what's known as the growth phase. And the growth phase is really a lot of fun. The goal here is momentum. And, and what we're really looking for is that feeling. If you've ever tried to push a stalled car, it's that feeling when you finally get it moving. It's really, really hard in the beginning to get the car moving. And then at some point, it shifts from being hard to move to, like, hard to get the thing to stop. And that's what we're going for here. Where your business. It's in the beginning, in the launch phase, it's hard to get those sales going. But then at some point in the growth phase, it's hard to get the sales to stop. And it kind of becomes a little bit hectic, becomes a little bit crazy, almost a little bit chaotic. And that's sort of the point. That's kind of a good thing. So the first skill that you need to unlearn is the skill of chasing shiny objects. That's right. Shiny object syndrome. Now, funny enough, shiny object syndrome Served you well during the launch phase, when you're just trying to figure things out. Flailing around and trying a bunch of different things is exactly what you're supposed to be doing in the launch phase. In the growth phase, now's when it's time to actually double down on what is working. So you want to stop chasing shiny objects. We want to pivot to let's double down on what is actually working. Also in this phase, we want to stop with the founder led sales. Okay, so whatever you're doing right now to drive sales, and that could be you actually being there, the one who's on the phone closing, or the one doing the face to face, it could also be you as the primary driver of the marketing. Now it's time to start to hand off the sales and marketing aspect to at least create some duplication. Because if you become a bottleneck to growth here, you will not move past the growth phase. It really is as simple as that. The other big skill that you need to unlearn, and this is really less of a skill to unlearn and more of a pitfall to avoid, is acting corporate. Okay, corporate itis. Now don't get me wrong, there is a place for adding office space. There's a time for expanding headcount, and it even makes sense at one point to do the occasional executive offsite. But that time is not when you're doing a half a million to $2 million. This stage, believe it or not, is all about preserving cash. So let's talk about the skills that you do need to learn. And specifically one of those skills is cash management. Okay, Getting really, really, really good at cash management is important at this stage. It's not just about sales. You need to start thinking about margin. You need to start thinking about profitability. You need to start hoarding cash because believe me, you're going to need it at the next level. Also at this stage, it is about systemizing sales. So we talked before about how you know you can't be doing founder led sales anymore. So your focus really needs to shift to the customer experience. Because there's only one marketing channel that is actually going to scale and that marketing channel is word of mouth. And word of mouth is only going to scale and you're only going to get word of mouth if you have a truly exceptional product and service that is worth talking about. So if you don't have a great product or service, you're. You're not going to be able to scale past this growth phase because people aren't going to talk about you or you're going to lose so many people to churn and bad reviews. So we got to make sure at this point that what you're delivering is really, really solid. So we want to systemize the sales so that you can shift your focus to making sure that the customer experience is really, really, really amazing. And the last skill that you need to develop is delegation. Okay, but not just any type of delegation. What I want you to be doing at this point is what we refer to as impact based delegation. So the way that most people delegate, we think about this as it being kind of on a two way spectrum. So when you think about all the skills, everything that you do, you could basically map it in terms of high impact versus low impact. And basically, are we talking low ability or desire? Or is it like high ability or desire? So when we think about the things that you're doing right now, is it really impactful for the business or is it kind of low impact for the business? And then is this something that you kind of hate doing, you're not very good at, or is it something that you are really good at and you particularly love doing? Now, the tasks that a lot of people would, would think to delegate first are the low ability, low impact. In reality, these are the things you should just stop doing. Nobody should be doing these things. If it's low impact and you suck at it, just stop doing these things completely. The area where a lot of people say that, that you should delegate first is this area here. This is what's known as the menial zone. And this is where everybody says you should do your delegation right here in this menial zone. Because it's, it's low impact, you know, high ability. Like these are those things it's super easy to get. This is the, you know, responding to your emails, you know, handling your calendar requests. This is the kind of things that a VA could do. This is a trap, okay? Because if you begin to delegate these tasks, what you're doing is you're delegating menial tasks, but you're taking on a new job called management. So we don't want to do that. What we want to do instead is we want to begin with delegating the high impact tasks. Specifically, we want to delegate the tasks up here in this captive zone. So this is where we want to live. And when I talk about impact based delegation as a skill to develop, it's these tasks right here, the high impact tasks that are also low ability. What are those things that are impactful? To the organization, but the ones that you're not necessarily good at. So level three is the 2 million to round about 5 million range. And this is what we refer to as the systemize phase. And this phase kind of also has a. No, another name. And that's. And that's no Man's Land. And kind of the goal of this phase is just that, it's to survive no Man's Land. What we need to do here is we need to upgrade your operating system so that you can survive this phase. This truly is the swamp of scale. This is where most businesses get stuck. There's a reason that most businesses don't scale from seven figures to eight figures. And it's not because there's anything particularly difficult about 10 million in revenue. It's because there's something particularly difficult, believe it or not, about 4, 5, and 6 million in revenue. And it's because of this phase right here. You need to unlearn the skill of hustle. Now, this may sound counterintuitive, because shouldn't I be hustling? You know, shouldn't I be working hard? Well, yes, when you're in the launch phase, but at this stage of scale, you actually need to shift to doing less. Before, you were your company's biggest bottleneck, and that was okay because you were all you had. Now you simply cannot become your company's biggest bottleneck. Because at the end of the day, the more valuable you are to your business, the less valuable your business is. The if the only way this business can grow is if you do more, then the growth and scale of your company is limited by your ability. And you could be awesome, you could be amazing, but you still just have 24 hours in a day. You're going to have to sleep some of it. And I bet you got people that love you, that want to hang out with you at least a little bit. The other skill that you need to unlearn at this stage is the management by gut. Again, this is one of those skills that served you very, very well down here. But at this stage, there are just too many things that you don't know. Your gut will let you down, and you just can't afford to be wrong. It really is as simple as that. At this point, at this level, the stakes are just way too high for you to be managing by gut. And the last skill that you need to unlearn is the concept of growth at all cost. Right? Growth at all cost will be the thing that brings your business down and that stalls it out. And this is the hardest one of all because up until now, it has been all about growth. But here's the reality. Two thirds of all Inc. 5000 companies fail after five years. They failed in many cases because they grew too quickly and they didn't pause long enough to have systems in place. And systems building doesn't sound cool. But at the end of the day, what we're really talking about when we're talking about building systems is we're talking about transferring knowledge. We're talking about transferring the value creating abilities from you to other people. We're talking about other people being able to do the stuff that you're currently doing, which is the thing that gives you freedom. So from that perspective, it's really pretty cool. So when we think about systems building, what does that practically mean? It means going from a U operating system to a scalable operating system. Because right now your business does have an operating system. The operating system is just called you. But just like any operating system, if you keep overloading it, it's eventually going to crash. And that is what happens to most businesses at the systemized scale if they don't upgrade your operating system. So how do you do it? First step, you need to map your company's value engines. What's a value engine? It's simply a visualization of the assembly lines in your different companies. So you have an assembly line, a visual picture of how customers happen. So you would want to visualize that. You also have a visual assembly line of what you do with these customers once you have them. So you want to map these things out. All the core critical value creation aspects of your business, we want to get these mapped. Step two, we need to identify the power stages. So what are the steps in these value engines that are high stakes? What are the steps that are highly repetitive, and what are the steps that have a high chance for human error? If they're high stakes, highly repetitive, and have a high chance for human error, These are the steps that you need to make sure that you document so you don't have to document everything. You don't have to create SOPs and checklists for everything that you do. Just create them for the power stages that are highly repetitive, that are high stakes, and that have a high chance for human error. And then thirdly, hand them off. But when you hand them off, don't hand off everything all at once and don't try to hand them off to one person. Hand them off one step or stage at a time, one playbook at a time. And the way that you do. This is simple. You want to have the person that you handed them off to shadow you. Once you feel like they know what they're doing, you're going to shadow them to make sure that they know how to do it. And then you're going to follow the 10, 80, 10 process. 10, 80, 10 is simply you're going to give them the first 10%. Here's what we're doing. Here's, you know, here's, here's the task, here's the activity, here's the context around it. They're going to do the middle 80% on their own. Then they're going to come back to you for the final 10% where you're going to review it, approve it, and you're going to do that until you know that they've got it. At that point, you've handed everything. This is how operating systems are created and this is how systems are handed off to other people throughout the organization, not just you, but other people in your team as well. As your organization expands. In addition to systems building, the second big skill that you need to learn during this one is scorecard based leadership. Scorecard based leadership is what's going to allow you to separate the actual bottlenecks from just the shiny objects. And to do that, what you need is you need a scorecard that mirrors those company value engines that we created back in the, in the previous step. So remember, we've, we visualized those critical value creation assembly lines in our business. Now what we want to do is we want to go back to each one of those stages and want to make sure that every single one of those stages has at least one metric associated with it. And every single one of those metrics is going to have an owner. That owner is going to choose a target, in other words, a goal. So what should this metric be? And then they're going to measure their progress against that target. They're going to measure this on a company scorecard that you and everybody else in the team has access to, which is going to create accountability. Not only can they see the numbers, but they can also see a color coded status. Green means that metric is on track or ahead. Red means it's behind, and yellow means it's behind. But there is a plan to catch up. Once we have these scorecards in place, your job becomes very simple. Help your team execute the projects that turn red metrics yellow and yellow metrics green. That's it. That's the essence of scorecard based leadership. And if you want to go from 2 million to 5 million and beyond, and get out of the swamp of scale, navigate through no man's land and get to level four. It's going to happen when you upgrade your operating system, when you have scorecards, and when you start turning those scorecards from red to yellow to green. Level 4, we are at the approximate 5 million to about $20 million phase. And this is what we refer to as the elevate phase. And we call it the elevate phase because the goal of this phase really is to elevate, to upgrade your leadership team. In other words, it's kind of the goal here is for you to become the dumbest person in the room. So the head of sales, I'm pretty good at sales, but that head of sales, they're a better salesperson than me. They know more about sales than I do. Same with the marketing person. Same with the product person. Everybody is better at their core specialty than I am. This is what we're looking for and this is what we're trying to achieve at the elevate phase. So what do we need to unlearn at this phase? Well, the number one thing that we need to unlearn is whatever that core skill is that we most value in ourselves. In other words, we need to unlearn the doing of that thing that we're really, really, really good at. This is hard because if we're really good at it, we probably like it. At this point. It is time to hand that off to someone who is better at it than we are. I will never forget, first time that I hired a marketer at one of our companies and I looked at the campaign they created, look at the copy they created, and I had to admit, I was like, you know what, it's better. Other big, important core skill that you need to hand off is hiring helpers. I said before that we need to focus on impact based delegation. But what you've likely done at this point is you've brought on a number of people onto the team who could help you with different things or couldn't. And this has happened probably to some of your managers as well. Ah, we really need somebody who can help us with this or we need somebody who can help us with that. The problem is, is helpers can really only manage to a particular task. They sit around and they wait for you or someone else to tell them what to do. What you need at this stage are real leaders who can manage based on objectives, people who you don't have to task out. You can simply say, this is the result that we need now, go and make it happen. So we want to stop hiring helpers. And then the last thing that we've got to stop doing, skill that we've got to unlearn at this stage is, and this one's painful, coaching up. We got to stop coaching up our underperformers. And look, in the beginning, in the early days when you don't have a very big team and you can't afford to retrain people that might be useful, somebody merely being loyal is not enough to keep them around. They need to be competent. So we can't just keep coaching up our underperformers. So what are the skills that we need to learn? Well, number one, we need to learn how to become an embedded influencer. By an embedded influencer. What we are becoming is the number one spokesperson right now, today. If you want to build trust out there in the marketplace, the single best way to build trust trust is to be out there on social media as a real human being speaking on behalf of your organization. You may not want to do it, I get it. I don't necessarily want to do it either, but here I am right now doing it, quite literally as we speak. If you do want to see your business scale and if you do want to perform the highest leverage activity that you can perform for your business, it's no longer about doing whatever that core skill is that got you there. It's about becoming the best spokesperson that your company has ever seen, which means you become the embedded influencer within your company. The next big thing that we need to do is recruit and retain. We've got to get really, really, really good at recruiting and retaining real leaders. And so what I want you to do is to make a list of all the critical functions in your business. Marketing, sales, product, operations, finance. And ask, does the person who is leading this team know what it takes to scale to 20 million and beyond? Have they done it? Not do I think they could do it. Have they done it? If not, then the reality is you're probably going to need to top them with someone who has meaning. You're going to need to bring somebody in and put them in over that person or you're going to have to let them go. It really is as simple as that. And it sucks. I get it. We're going to have to recruit, we're going to have to retain, and we're not always going to be able to take the people who have been there with us from day one with us to the next level. Now let me Tell you what not to do. Okay, When I talk about recruit and retain, I'm talking about recruiting and retaining a leadership team. What I don't want you to do is to go out there and try to find one magical unicorn COO or integrator higher. If we want to elevate, we need to elevate a team. It takes a team to win championships, not just a single MVP. With level five, we are at the 20 million, $200 million phase. And that feels like a big range. But truly, if you can get to 20 million, you've got the core. You've got the guts to get to a hundred million. You just may not want to. So this is the scale phase. Not only are you kind of at scale, but you're at the point where you can continue to scale. Now, what are some of the things that you need to unlearn at this phase? Well, number one, you need to unlearn kind of being the star. It's no longer about you at this stage. You also need to say goodbye to that operator identity. And you need to start adopting an ownership mindset. You may no longer even be the best person to run it. The nice thing is, is at this point, you have options. You don't have to. But here's the single biggest thing that you need to unlearn. That is that bigger equals better. I'm here to tell you that bigger does not always equal better. Every single company has a sweet spot. And at this stage, growth is no longer necessarily the goal. Growth becomes a choice. You could grow or not grow. You could scale the business or not. You could exit the business or not. Because what you've bought yourself at this point, if you follow through each and every one of these phases, is you bought yourself optionality. It's completely up to you now. What are the skills that you need to learn. Number one, and this sounds really kind of cheesy, but you need to get good at corporate communications. You need to become the best internal and external brand representative that your company has. If you think about all the biggest and best CEOs, this is what they do. Also partnerships and joint ventures. This is one of the highest leverage activities that you can do. Being out there, cutting deals. Along the same line, finance. This is when it makes sense to get really good at finance and M and A. We're about the deals now. But the last thing, and I think this one might be the most important one of all, and it sounds kind of weird. Humility. Humility is something that you may have to relearn because at the end of the day, it's the fattest pig that gets slaughtered first. And so what I want you to remember at this stage is to stay lean, is to stay hungry, and to follow the advice that Jeff Bezos preaches, which is to treat every day like it is. Day one. Funny enough, when you get to the 20 million to a hundred million range, this is kind of when you need to start thinking once again like you're back in that launch phase. And so in many ways, this is when it becomes the most fun, because in many ways, this is when it becomes the most entrepreneurial. So there you have it. The five levels that every founder must progress through to scale from 1 million to 10 million to 20 million and beyond. Each level has something new to learn, but importantly, each level has something that you need to unlearn, too. And the unlearning, frankly, is just as important as the learning. And if I'll tell you, if you can master the transitions between the levels, your business will scale. And look, if you feel like you're stuck and you want some help and you want to see really also how we help founders upgrade their operating systems and exit no man's land, be sure to check out the video on the 200 million operating system case study that I dropped in the description. And hey, if you found this helpful, hit, subscribe so that you don't miss the next one and I'll see you soon.