I Scaled 8 Companies to $10M. Here's What Works.

The skills that get you to 1 million are not the same skills that are going to get you to 10 million and beyond. In fact, if you keep playing the $1 million game, you will get stuck eventually. Today, I'm going to show you the three skills that every founder must master to break through that $10 million ceiling. Plus a bonus skill that makes the other three almost unstoppable. But if you can master these three secret skills, scaling to 10 million becomes almost inevitable. Now, if you don't know me, I'm Ryan Deiss. My partners and I have helped hundreds of founders make the leap from seven figures to eight figures and beyond. And these are the skills that make the difference. Let's get into it. Skill number one is scorecard based leadership. Now, at kind of between zero and a million dollars, a lot of founders are running their business on gut feel. They know their numbers, sort of, they're checking stripe, they're checking their bank account, they're glancing at their P and L every month or every quarter. But the decisions that they're making, they're kind of mostly based on vibes. They're based on God. And honestly, that can work really fine in the early days. But at 10 million, and certainly the path between, you know, as you start to get to like 2 million, 3 million, 4 million, you really can't just lead by intuition. You're just no longer in every room anymore. You have to start leading by the scoreboard. And so here's how we do that. Step number one, you have to map your value engines. I want you to think about your business like a giant factory. And this factory is filled with different assembly lines. You have an assembly line for how you get customers. You also have a separate assembly line for how you serve or fulfill those customers once you have them. And you may even have a literal assembly line for how you make or assemble the products and services that you sell. Now, your mission is to visualize how each of these assembly lines work, because you cannot optimize and you really can't even track how your business works until you first visualize how your business works, how these core value chains, these core value drivers, work. So we call these visual maps value engines. And this value engine mapping process is so important, I did a separate video on it we can link to in the description. But this is step one. And the reason this is step one is because you need these if you want to build the right types of scorecards. So once we've got these value engines mapped, then what we want to do is we Want to build scorecards that mirror these value engines. So we've got a map. And then what we're going to do is we're going to go step by step, stage by stage, and we're going to say, okay, how do we know that this particular stage works? Okay, what about this stage and this stage and this stage? We're going to go step by step, stage by stage. Each step of the each little assembly line and each one is going to get one to three metrics. For each metric, we're going need to have three things. Obviously, in addition to tracking how the metric is performing. Now, each metric is also going to need to have, number one, a goal. Each metric is going to need to have an owner and each metric is going to need to have a status. Now, the owner is the person who's responsible for filling in the metric. They're also the person who's responsible for owning and optimizing that metric. So they're the person who's responsible for looking at where the metric is now, comparing it to the goal and saying, are we on track or ahead? Now if we're on track, then the status will be marked green. This is good. Right on track. We are green. If we're behind, it's up to the owner to have a plan to get that metric back on track. And so if we're behind, goal, but there's a plan to get caught up, then they can mark that status as yellow. So yellow doesn't mean that you, you're behind, but just kind of a little bit behind. Yellow means we're behind, but there is a plan to catch up. Red means we're behind, but there is no plan to catch up. This is important because this is what gets our team members to actually take ownership of the metrics that they own. Because now they're not showing up, not wondering like, oh, I don't know how that metric is doing. No, they're having to actually enter how they're doing and they're having to report on it from a status. But the difference between red and yellow is not is it close or is it far? It's do they have a plan for catching up? Step three, really, really simple. We're going to ask what do we need to do to turn the red metrics yellow and the yellow metrics green. And this is the essence of scorecard based leadership. You see the constraint, you solve the constraint, repeat. And this is important at scale, as the CEO, as the founder, as the business leader, it is not, I repeat, it is not your Job to, to have all the answers. It's not your job to know how to turn every single metric green. That is what you hired your team to do. We're going to put the people in the right spot who can take the red metrics, turn them yellow, and the yellow metrics and turn them green. This is all we're looking to do, is to set our people up for success. And then when the metrics have been green for a period of time, it's our job as leaders, as scorecard based leaders, to raise the standards so that what was previously green now becomes yellow. And this is how companies continue to grow. Skill number two, impact based delegation. Most founders don't burn out because they're lazy. The reality is they burn out because they're doing everyone else's job. And to fix this, they make one of two mistakes. Mistake number one, we wound up hiring helpers who just take orders and require a lot of management. And the management of these helpers is frankly more work than, than just doing the fricking work ourselves. Mistake number two, we try to hire some unicorn, COO or integrator in attempt to have them do everything, and that doesn't work. So what's the secret? The secret is we want to delegate based on impact, not tasks. So we do that utilizing a tool called the critical task matrix. So here's what I want you to do. I want you to pull up a sheet of paper and I want you to draw a simple matrix cross like this. At the top I want you to write high impact. At the bottom I want you to write low impact. On the left side, low ability. On the right side, high ability. And I want you to brainstorm, right? What are all the different things that you're doing right now? And I want you to plot it. So when we think about the things that you're not very good at and they're not very important, this is what's known as the drudgery zone. Okay, the drudgery zone are all the things down here. When we think about the stuff that is, you know, the higher impact, low ability, this is what we refer to as the captive zone. Okay, this is your captive zone. I'll tell you why in just a second. Then up over here on the high impact, low ability, this is your menial zone. So these are all your menial tasks and things. And then up here, this is your flow zone. So your high impact, high ability. So what do you want to do with each one of these zones? Well, obviously, look, if it's low impact Low ability. If it's drudgery, I want you just to stop doing it. Now, in terms of your high ability, high impact work, this is your genius zone. We're going to keep doing this. And the idea is to maximize your genius zone work to do as much flow state work as possible. Now, in terms of your low impact, high ability, this menial work, this is actually the place where most founders get told that this is where you need to delegate. This, I believe, is actually the trap. Okay, watch out. It's a trap, right? This is a trap because this is where we get told, oh, we need to delegate all this. We need to delegate all this. But here's the problem. When you seek to delegate a bunch of menial tasks, more often than not, what we wind up doing is we wind up hiring helpers. So I'm okay with you delegating menial tasks as long as you're delegating it to somebody who is already on the team and somebody who doesn't require additional management. If you're hiring a VA to do a bunch of menial tasks, I can almost guarantee you the management of that virtual assistant, more times than not, is going to require more work on your part than the doing of most of the tasks. Where the big opportunities come from and where I really want your focus to be is in handing off these, these captive zone tasks, the low ability, high impact tasks. These are the ones we want to offload as quickly as possible. And specifically, the more that we can upgrade our flow zone tasks over here, this is actually, as business scales now, there's going to be a lot of flow zone tasks that we just want to keep forever because we truly love it. That's amazing. But if we can offload high impact, low ability tasks, this is where the biggest gains are going to happen in the scale of the business. This is what I mean by impact based delegation. We want to delegate based on the impact it's going to deliver. First, I want you to think about hiring functional leaders. Head of marketing, head of sales, head of product, head of customer success, head of finance. And look, at the end of the day, at scale, all businesses become recruiting companies because at scale, you're just going to need more people to fuel the machine. So we don't want to hire helpers because helpers are usually bad at hiring more people. These are your higher level folks. They may cost a lot more in the beginning, but the return on investment is going to be there as well. And it's going to come a lot, lot, lot faster. Skill number three. Cash flow management. It's been said it's cliche, but it is true. Revenue is vanity. Profit is sanity. Cash is a reality. It has never been more true than it is true in fast growing companies. Look, I have seen $10 million companies go broke because they didn't effectively manage their cash. And their P and L said that they were profitable, but their payroll and their cash position said otherwise. I have seen P and LS lie. I have never seen cash lie. So if you cannot manage your cash effectively, you can't scale, period. So this is the system that we use every day in every single one of our. You need to establish a cash flow waterfall system. And to do this you need five bank accounts. The first bank account that you're going to need is your operating account. Inside this operating account, I want you to keep one month's opex. So one month operating expenses. So think about all of the expenses that you would have in a given month to operate your business. Account number two is your tax savings account. There is one vendor who owns missiles and who has the ability to take away your freedom and that is the government. Okay? So we want to make sure that they get paid. So we're going to set up a separate tax savings account. Account number three, this is your emergency fund. So your emergency fund is essentially just a savings fund. So if you were thinking, oh my gosh, just one month in my operating account, that doesn't seem like that's enough. It's not. It certainly wouldn't be enough if we didn't have an emergency fund. But we're going to set up a separate account for emergencies for that, just in case, for that rainy day in your emergency fund. In this savings account, we're really looking at three months of just your fixed expenses. Then we're going to have a future investment fund. So do you need to set aside money for equipment purchases to fund future events? Maybe a real estate purchase, Maybe you've got a big product launch. Any extraordinary expense that's noble and planable, we're going to have a separate fund for that. And then the fifth fund, my favorite, the best one of all, your distribution account. And so the way that this works is money is obviously going to flow into your operating account. Now, assuming you have more money in that account than that one month's operating, great. We're going to make sure that we pay the tax savings. Now if there is more money left in the tax savings, we're going to waterfall into the emergency fund and we're going to keep doing that until the emergency fund has that three months of fixed expenses funded at the point at which that emergency fund is fully funded at three months, we can now waterfall that into the future investments. So if we need to save for any other future investments, great, we're going to waterfall into those accounts and then once that's done, then we can waterfall into the distribution account. This waterfall process is how we ensure that, that we are effectively managing our cash flow. It's how we ensure that we don't leave too much cash in any one account. Because if you leave cash in your checking account, in your operating account, guess what? It is going to get spent. Now, once the money is in that distribution account, as a general rule, we're going to distribute 80% at the end of every quarter. We'll distribute the remainder at the end of every year. But you can obviously decide within that distribution account that you may want to make a reinvestment back into the business again. It's totally your choice. We simply want to make sure that we're effectively managing the cash within our business. Because the ultimate sign of a healthy business is the ability to distribute big fat chunks of cash. And the ultimate sign of a successful CEO is a well managed and growing cash account. If cash, if money is not flowing into that distribution account, that's a problem. If it's not happening now, it's gonna be really, really, really difficult to scale that company up to 10 million. We need the fuel, we need this fuel to be able to scale. I can tell you we had a founder go from in our portfolio group go from feeling broke every payday to writing herself a six figure distribution check every quarter, all by implementing this waterfall. Those are three main skills. I promise you a bonus fourth one that makes everything work better. Here it is. Bonus skill number four. Ask for the fish. Look, we all have the give a person a fish and you feed them for a day. Teach a person a fish and you feed them for a lifetime. And it sounds great, but the reality is at scale, you don't have time to learn to fish. You just kind of need the freaking fish. And this is hard for entrepreneurs to grasp and even harder to do because from zero to a million, it's all about figuring things out for yourself. It's all about the journey. It's all about learning to fish. The journey from a million to 10 million is all about speed. And speed comes from asking for help, not figuring everything out for yourself. So I give you permission, I give you permission just to ask for the freaking fish. Get in the right rooms, find the people who've already solved your problems, get the fish now. Then buy the person who gave you the fish a beer and ask them how they caught it. And for what it's worth, getting this one thing right is how I was able to acquire the three skills I told you about earlier in this video. And hey, if you want to go deeper into how we build operating systems that allow your business to run and scale without you, click on the video in the description. I'll see you there.