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Becker Business
Building Great Businesses: Create Momentum, Overcome Setbacks & Scale with Confidence 1-30-26
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- [00:01]
A
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B
This is Scott Becker with the Becker Private Equity and the Becker Business Podcast. Today's episode is a webinar that we recorded based on the concept of building great businesses. This episode includes Molly Gamble, the co author of the book Building Great Businesses, interviewing me on the subject of the discussion of key thoughts and concepts related to businesses. We also in this webinar discussion had several audience questions. We hope you enjoy listening to this webinar podcast. Thank you so much Molly. Let me turn it over to you.
- [01:10]
C
Yeah, thank you so much Scott. And good afternoon everyone. Or good morning. It's a joy to be with you today. I'm Molly Gamble. Like Scott said, I'm Vice President, Editorial, Beckers Healthcare. I've had the privilege of working alongside Scott for more than 15 years now at Becker's Healthcare. That's the multimedia company really devoted to informing and bringing together healthcare's top decision makers. Those 15 years were a pretty formative time for the media company, so I was lucky enough to be in a position where I saw a lot of Scott's wisdom, guidance, his rules of entrepreneurship really put into practice. I have an entire library of Scott backerisms I've not only heard, but I've hardwired over the years. So being a partner to him on this book has been a real privilege and we're looking forward to this conversation. There's just a lot to unpack and learn from over the next half hour. So thanks for the chance to be part of it and thanks for joining us in your time. So Scott, I guess if we were to dive right in, I was hoping we got a number of questions we'll touch on and we'll kind of dance around. And then also for our attendees and those with us, please, we would love to hear from you. If you have questions in that Q and A box you should see on your screen or texting Scott if you have his number like he just shared, we'll check in with you and see what questions you have too. But Scott, I was hoping we could start off just talking about the timing of this book. Why now? You've been building businesses and advising leaders for decades now who have made this the moment to step back and write Building great businesses. Maybe you can get us familiar with your thinking about why this time seems opportune.
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B
Sure. No, I think there's multiple different reasons. This is an updated version of something we tried to do a few years ago that in some ways we didn't like how the first version of the book came out and so got some professional feedback, motivated to rewrite it, rewrote it last summer entirely and then you helped me to put that together into. Into final form. But there are a couple things that drove it. One is the, the original content in writing book was to put a lot of my business and investment thoughts in one place because I keep on coming back to them over the years and wanted them in one place for reference, for discussions, for talking with children, for talking with other people, for other business leaders and so forth. And, and there's a way to sort of incorporate them all in one place and it's not complete. We think this book, this is the third effort at the business side of the book and we think this is the best of the three so far. The first one I thought was a D, the second one much better and we think this is the best one so far. But it's always a work in process and we're always like all of us learning and growing and I find the writing process, the going through this, the speaking process is really helpful way to help to consolidate and synthesize a lot of thoughts around things. We're also a huge believer in business. Small mid sized business is a huge driver of our country and of freedom quite frankly. And so trying to get thoughts into people's hands, trying to stay involved with people and dialogue and basically to, you know, hopefully to motivate some people and just to give some thoughts on what works, what doesn't work. I mean one of the things that we talk about pretty openly is we've had some great successes in business both in the legal side, the Beckers healthcare side, some investing and then we've had plenty of losses, things that have not gone as we wanted them to go. And we think there's lessons there for at least for myself if not for others too. So we hope people enjoy it and that's really the gist of it. There's no, there's no real perfect timing to it. My life is an iteration. It's. I'm an incrementalist versus a visionary and so we incrementally try and improve on what we do. And this is another iteration of that.
- [05:20]
C
Absolutely makes a lot of sense. I know one of your favorite slogans is perfection is the enemy of. Of good. Right. So I think that aligns with that big belief.
- [05:30]
B
We do that for most people and we believe in starting and starting any business. A lot of it gets around to what people talk about a lot in businesses. Minimum viable product. And recognizing that whatever you put out is always a starting point. And it's very easy to be embarrassed about what you put out. And then you have to decide, are you going to double down and triple down on it and try and really be good at it or. Or not. But in any business you're at, you've got to test markets relatively early to see if they work or see if they don't. You know, I've seen people build great businesses around areas that we wouldn't have expected them to. And then they've got to keep on doubling down on what's working and what's going great. So if, if you build a retail business and 80% of the revenues are in one place, the idea is not to look at 30 other places to supplement those revenues. It's first to double down and we're 80% of those revenues are coming from and to keep on doing it, you know. You know, very similar. Somebody's building a real estate business, a real estate practice. It's if this is what's working for you, keep on doubling down on what's going well with it versus looking to do 30 other things. And we talk a lot about that in terms of focus, concentration, doubling down on what works. And this concept of doubling down on what works is not only true of the area that you're in, but it's also true of the great customers you're with that you want to double down on great customers and people when you have great people working with you. Every success that I've ever had in business came down to building great teams of people. And it's when you find great people and it's finding every way you can to stick with them so they thrive with you for the long run. They don't thrive under you, they thrive side by side with you. So they grow and become great themselves. And there's some overlap with the company, what the company's trying to do. And we're big fans of this concept of what we call thrive, thrive cultures and constantly trying to develop where people are thriving and you're thriving. But. But those are some of the concepts. But let me turn it back to you.
- [07:39]
C
You hit on a number of themes that we're going to dig deeper into. Teams being one, simplicity being another. But I want to start, Scott, with niches. This is something that you have just been ferociously focused on over the years, specifically niche focus. So there's this idea even in journalism school, I remember you can be a generalist or you can have a niche and go a mile deep and an inch wide. You argue that the best businesses really do commit to clear niches. Where do you see leaders, whether they're in the early stages, mid or late, often confuse that or maybe get that wrong?
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B
Well, I think it's really complicated. It's become increasingly complicated today. But, but at the end of the day, the best businesses know who their ideal customer is, what they're trying to do and the niche they're trying to win in. And this is particularly important in small and mid sized businesses. And I assume it's really true in really large businesses as well. Multibillion dol businesses like Google knows they have to win in search, Apple knows they have to want the iPhone and everything else flows from those kinds of things. But, but in a small business it is so important that you're not a jack of all trades, that you're really great in what you do. And then you've got this challenge as you get sort of more sophisticated and you start to dominate a segment is to figure out whether you have to grow outside of that segment as well. So in the health care technology business, many people start with something, they're just fantastic with some kind of point solution and they're fantastic at that point solution and that's great. The problem is they usually have to go beyond that point solution over time to build the type of business and the size of business they want to have to have success. We had that experience, for example, at Becker's Health Care. We started off 30 years ago in the surgery center business and fantastic. We were one of the two leaders in that niche of surgery center media being sort of the media company, the business information place for surgery centers. But we found is as we were trying to grow a team and grow a bigger team and keep a great team together, we couldn't just be in one narrow niche. So we had to find other niches adjacent to that niche to really excel in, to build a big enough company to be able to build a great editorial team. And that's one of the crown jewels of the company. We've got 30 plus journalists that write it. Becker's health care. And then we also needed to build a great sales team. And you just couldn't do it around one small niche. The concept is you have to be so great at some point, solution or some niche, but then at some point you've got to develop and double down around adjacent niches in places that you could grow into as well, to sort of build the size company you want to build, to be able to retain and build the types of teams that you want to build. But. But we do think that being a leader in specific niches is so much easier than being in all things to all people. So we're a huge fan of it. We're a huge fan of if you don't know who your ideal customer is in your business, you probably don't have a very good business. So you have to understand who's our core customer. Who are we really trying to double down with? Who are we really trying to serve in whatever we're doing. And that might evolve over time. When we look at niches, there's a lot of trial and error. There's also this concept of can you win in the niche? And then if you could win in the niche, is it worth winning in? Is there enough money in that market to make it worthwhile as a business owner, as a founder, as a CEO, as a leadership team to be great in that niche and to win in that niche and be financially successful in the niche as well. So it comes down to a number of different things, but we think almost all great businesses start by driving and being great at what they do and be great in their. In their niche, whatever that is.
- [11:31]
C
I think that's a really important second part of the questions. Can you win? And is the winning worth it? The answers can be two different. Yes and no. And I think that can be a helpful thing to be really clear about and focused on going forward versus enthusiasm. Winning the day.
- [11:48]
B
There's 100%. We've been in plenty of niches. When we expanded at Becker's Healthcare, we went into a couple different niches and the one that we ended up really succeeding in was the hospital and health system niche and ended up being. We were able to win in it and it was worth winning in. We also were in some really small specialty niches and those might have been easy to win in because there wasn't very much competition, but there wasn't enough ad revenue or sponsorship revenue or business revenue to have success in them. So we ended up having to decide over time, are we closing those niches down? Are we not going after those niches, you know, and we always think about the double down on something, pivot or abandon it in plenty of niches over time, we had to close down. Even though we could win in it, it wasn't sizable enough to maintain and grow the kind of team and success we wanted to have. So we had to make those decisions over time. So it's. Is it worth winning in and can you win in it? Are two fundamental questions. And there's a lot of trial and error in it and there's a lot of lessons. Like we thought for sure when we expanded into orthopedics and spine, that that would be the growth area of Becker's Healthcare. And the real growth area ended being hospitals and health systems. And obviously in hindsight, it's very clear for a lot of reasons, the hospital and health system market's a huge market. And so if you're doing well in that market, you could employ a great team and build a great team and grow. But early on it seemed like orthopedic to spine would be our real driver of revenues because it was so close to our original niche that we were in. But. But a different discussion for a different time. But, but a lot of it is trial and error and key in. In business leaders really knowing their business, so knowing where the revenue is coming from, then constantly doubling down and tripling down on that area. Molly, let me turn it back to you.
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C
Well, I was just thinking as you're talking about trial and error, expansion, testing things that maybe don't work out, maybe you give it, you're watching the results and you need to sunset an effort to expand or pick another lane. Your team will be with you throughout all of those highs and lows. And I think one of the more maybe counterintuitive stances you've taken, Scott, for a long time is that teams matter more than strategy. I think on paper you might have some people who want to hear more about this belief and what you mean by that. And so if you can explain your thinking there, I think that'd be a great place to start. And then secondarily, where you see teams are often make mistakes as they grow in scale when it comes to teams.
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B
Sure. So I wouldn't say teams or strategy. I would say teams and strategy. So there's this great adage that people all use that culture beats strategy for breakfast or something like that, or, or. But I don't think that's right. I think it's both. Teams and strategy is probably a better statement. And I Probably formatted the question poorly when I originally sent it to you. I think it's both and, and I think it's teams and strategy. I'm a big fan. Back in the day, Jim Collins was the, the foundational business writer of our generation, or one of them to go with Peter Drucker. And he was a big fan of. Really, if you get the right people on the boss and you could define strategy and go almost off after anything. And I think there's a lot of truth to that, that if you get the right people on your team, you can go after a lot of avenues, then you still have to be very clear about which niches are going after, which customers are reserving and which niches aren't we going after and which customers aren't we serving. But I do think, I don't know if I'd say teams over strategy, but teams are very, very important and the right people are very, very important. And what I have found in building businesses, when I've committed to building great teams, we've had great success. When I've tried to do things without building great teams or do it myself, I'm not a fan of the solopreneur concept where you do it yourself. I know people do it, I just don't know how to do that. And so I've tended to, if not fail, certainly not succeed greatly. Where I've tried to do things without teams and, and have a great luck in, in building teams and growing businesses around teams within the law business, whether in the Becker's healthcare business or on the different boards I serve on or different companies I invest in, where I see people growing great teams, they, they tend to have lots of ability to, to grow great businesses. You know, teams plus strategy plus niches, plus really taking care of customers because there's nothing really works without great customers at the end of the day too.
- [16:24]
C
Yeah. And teams, I mean, they can be 5 people, 10 people, 36, 100 plus. But something else that has come up a lot in the book is like, you have this belief that like ride or dies, as you call them, are really the underpinning of teams and play a big part of teams. Do you want to talk a little bit about ride or dies, what you mean by that and how those people show up?
- [16:45]
B
Sure. No, I think that in any business that you're in, you're going to have core people, core leaders. In the law practice that we built, with a lot of other great teammates and colleagues built a health care and healthcare private equity practice, it's at the end of the day, there's only so far you can go by yourself. You end up. We talk often about the evolution of a founder or a business leader in three stages. The first stage is that solopreneur, you're doing everything yourself, cook, bottle washer, every, et cetera, et cetera. The old adage. The second stage is you've hired people but they're not necessarily better than yourself. And that's limiting when you, when you start to build a team, but everybody is still reliant on you for direction, you're still very limited. And we view that as second evolution of a founder or leader. The third generation is when you've hired people and everybody that fills out sort of a chair position or leadership position or department leadership position can do that job better than you were able to do it or could do it. And that's when things as a business can really accelerate because it's no longer reliant on you for every forward action. Rather you've got lots of different people moving the things forward. And that could be true. The law firm itself is a 5,7000 place business person business of which I've served on the board, served as a department chair. But I don't run the law firm. I didn't found the law firm. I really drove the healthcare practice at one time. But you're a 7,000 person business, you can't have everything be top down leadership because people don't work that way. We need lots of evolving leaders, lots of evolving growth. And the media company which became really successful, it was really driven by key, key people, key key leaders and sort of the most important thing you could do. But at least one of the two or three most important things you could do is figure out who those leaders are of those various different disciplines in leadership and at some point turn more and more authority and leadership over to them versus yourself. And the key for me is when you find people like that in the law firm. There were several Holly Buckley, David Pivnic, Amber Walsh, Jeff Cockrell, Bart Walker. A lot of people, it's, you have to turn leadership over to them and let them drive and run things. So they are thriving and the business is thriving. And you have to try to find ways to make it attractive to them, to make this their home business wise, professionally wise for the long run, that, that this works for them and, and it never works when it's total top down. I'm telling you what to do. It works when it's thrive, thrive they're driving forward. We're driving forward and it's going well together. That's when things tend to thrive. And they thrive when you end up having people that are just a plus, people that are better at what they do than what you can do. And then it's not reliant upon the founder to drive everything. When, when everything's reliant on the founder to drive everything or the CEO. It's an exhausting world to live in. And so you need enough, you need people around you. And what we always talk about is doubling down on great customers, great areas, great people. And you have great people, you want them with you for 10, 15, 20 years, you know, and it's a changing world, but that's the goal. Our editorial leadership, yourself, another person, been with us for a long time, best decisions we ever made. We're doubling down on those people. And similarly with our CEO partner, Backwards Healthcare with me for 20 plus years. You know, early on when she took over, she was a coming out of college literally and she was working with eight to 10 other people from 20 to 50 years old. And after a few years, you know, I recognized that she was just so great, had so much drive, motivation, talent. We put her in charge of everybody. And at the time it did freak out a lot of the people that we were working with that were anywhere from 20 to 50 years old that couldn't believe we were putting this relatively young leader in charge of everybody. But it was, it was a great decision. And whenever you have great people, there's a lot of work that goes into making sure that the environment, the culture, the opportunities work for them as well as you. Another footnote to that is what I've always found is if you don't find opportunities for people that are great, the will either disengage or find another place to go. So it's, and, and it is, it's not, it's not incumbent upon, it's, it's a joint effort. But when you see talent, you have to find ways to really engage that talent and have them have the opportunities to lead themselves. You know, and, and, and the mistake that some leaders will make is they want to treat everybody as their number two, their subordinate, their whatever. And we really look at it as, it's, it's side by side over the long run, there will be a period of time where somebody might be subordinate. Time. It's thrive, thrive in, in side by side versus top down leadership that I think builds lasting or, or significant organizations.
- [22:01]
C
Yeah. And staying one or two steps ahead of them and making sure that they continually challenge and feel appreciated and have opportunities like you said. Scott, a couple questions have come in as we've been chatting. I'm going to go to the most recent which pertains to to ride or dies and then we'll get to Christopher's really quickly. But this is from Stacy. How do you find those key people as you scale, especially when early stage revenue does not support paying top wages? Any tips for screening questions beyond the standard?
- [22:28]
B
Yeah, I don't think there's a great answer to it. I think this is one of the reasons why you end up having to build bigger businesses beyond a really small business. Because what happens is every hire is an educated guess in a trial and error type of effort and you never know what you have in a person till they've worked with you for some time. You could try and reduce the odds of problems by being better on the front end hiring situation. But at the end of the day what happens is when I've seen this happen so many times, you hire somebody and you think this is going to be the next great leader in the company and they end up being just fine or not something special. And then you hire somebody else and nobody has particularly high expectations for that person and they end up being just great, just being a ride or die person and a great leader. And, and so there's two or three lessons that come out of this. We try very much to not prejudge too much whether people are going to be great or not. We don't know until they work with us how great they're going to be as leaders, employees, team members and so forth. The second thing we do is most people, as they grow into any sort of supervisory level will have some import in hiring themselves. They'll be hiring people. And what I don't want my people hiring is an educated guess constantly. And, and what I don't want is people beating themselves up over a bad hire. It's, it's because then people get gun shy about hiring and you can only go so far in an organization unless you're building teams and hiring. So we don't want our leaders to get too gunshot about hiring. We want them to always understand it's an educated guess. And I guess the third lesson that comes with this is in any business you are unfortunately often sorting people out so you're, you're not, you're, you're almost especially early on in a business, people sometimes make the mistake of being too nice or too whatever they want to call it. But at the end of the day you got to sort out, who do you think should be with you for the long run? Who's a real contributor who shouldn't be there? And particularly the question from the, from the listener about limited budget is so important because if you keep people around that don't show the work ethic, don't show the effort, don't succeed with whatever they're doing, you're. You're keeping yourself from hiring somebody that might fit that role. And the unfortunate answer to the question is it's almost impossible to prejudge who exactly is going to be a great hire. It's very hard to do so. It's easier in some roles than others, but, but it's really hard to figure out who's really going to have the work ethic, the drive, the personal skills, the emotional intelligence to be great over the long run and really be a ride or die part of your team. So. But it is, it is. But it is incumbent upon you as a leader to sort that out over time and to not let your people get too discouraged in their hiring, too.
- [25:35]
C
Thank you, Stacy, for the question and Scott, thanks for your response there. The other one, it goes back to when we were talking about niches from Christopher. When you talk about winning, are you talking about being number one or just rounding out the top three to four?
- [25:48]
B
Well, it's a great question. You know, I grew up in the school of thought, which was back in the day. Jack Welch was one of the great business leaders of the generation back in the day, who was the CEO of ge. And he had a very clear thought, and we lived this thought for a long time. We still think it's largely correct that you want to be one or two of your niche, one, two or three year niche. And the reason for that is as follows. If you're first or second in your niche, when things are going great, you do really well. You also have access to the best talents because people want to work with people and teams are doing great. But as importantly, when the economy is poor and things aren't going well, typically the concept is the first couple, the top 1, 2, 3 players, survive and still do okay. They still stay in business and still continue to succeed. But when, when things are going poorly, whereas if you're down the line and you're the seventh, eighth choice for a customer, it's a good chance you end up in real trouble when the economy is struggling and soft. So we're still a believer that you want to be a top performer in your niche, top leader, your niche like we want to be the go to place for audiences in the hospital health system sector. We want to be the go to places for, you know, increasingly in the payer market, newly in the oncology market and other areas. We want to be one of the top places people really go to for their content, their meetings or information and so forth. So that when it's going great, you do well. When it's going poorly, you still do okay. We're generally a big believer in trying to be leaders in what you're doing.
- [27:25]
C
Stacy and Christopher, thanks for the questions. For everyone else, feel free to keep them coming. We'd love to see more. Scott. I think related to that, you know, the human attention span, you see numbers, it's about eight seconds. This is from several years ago. I'm sure it's shorter. But a lot can be a distraction to teams and you can build a great team. But if there's attention is divided in too many things, it can still really slow them down. How do you see great leaders really decide what to double down on and what to sunset to stop doing to deprioritize? Can you talk about some of your thinking and best practices there?
- [27:56]
B
Sure. No, I think it's a great question. I mean a lot of it goes to the best business owners really know their business. They know what, where their business is coming from, where the profits are coming from, where the revenue is coming from, who their most important customers are. And at the end of the day, we always start with, you know. Really? Yes. There's some subjectivity to it, but a lot of it is really knowing your numbers and knowing your data. So when we're driving, when we were driving legal practice at one time and really driving a health care legal practice, we knew who the top 20 customers were that drove the majority or the 80% of our revenues and really doubling down on those and really knowing the right people. I mean, similarly in the media business, you know, we tier customers, you know what your most important customers are to keeping the lights on and you better be taking care of them really well and doubling down on them. You know, we do have a concept in business and it's a, it's a concept that some people can't get their hands around. But there are periods of the year where we believe there are no new ideas. And this is so like in this world of innovation, this world of information overflow, the concept of any leader saying no new ideas can be looked at like the person's crazy. But the concept being when we're in execution season we're executing on one of our biggest meetings, which might have 5,000 people coming this year. I know President Bush, Mark Cuban, we're trying to get, you know, one of the former first Ladies to speak. There's just, it's. We have to make sure that meeting goes off in a fantastic way. And so we can't have everybody in the team constantly coming up with new ideas when we're trying to make sure everything gets executed well. When we're in a period of time of executing on renewal season, can't have people constantly coming up with new and new ideas. It's very focused on. This is the number one thing that has to be done well right now. You know, I view it as founder, CEO, understanding our product market fit, what our customers really want, who my best people are, who the best people are, and really stacking efforts around core customers. Core people or areas is everything. I mean, it's really doubling and tripping down on that. When I have colleagues of mine that have short attention spans and are always looking at the next new thing and can't focus on what is key right now, I think that's a very bad spot to be in. I think you really need to focus on what's driving profits, what's driving revenues, you know, and we view there is. We talk about a business as being five phases. Idea to product, to revenues, to profits, to scale the profits. And scale can be reversed, sometimes scale to profits, but at the end of the day, a billion people of ideas. It's not that that's meaningless, but there's a much smaller people that turn that idea into a product then a much smaller that turn it from product into revenue and profits and scale. And I think it's very easy to get distracted. But I always want to know where our revenues and cash coming from, where our profit's coming from, who are our best people, what are the lines that really work, who are the most important customers and not that much else. Because it's easy to get distracted by too many other things. When people have key performance indicators, I always want five or seven. I don't want 100 of them, you know, but. But those are the concepts. Molly, let me turn it back to you.
- [31:34]
C
We're about six weeks away from, I think, our next no new idea season. Scott. So version of do not disturb right on your phone. It's very, very important. I see a couple more questions coming in. I want to make sure just quickly. You mentioned product market fit. Can we talk for 30, 60 seconds about that? The clearest signs That a business truly has product market fit and then also signs it doesn't. This is something that I know in the book you talk about people underestimating this step in building a business. I want to make sure we give it a bit of airtime and people understand what you mean here 100%.
- [32:08]
B
When you're building a business in a niche, there's two or three things that happen. One is that we're a big fan of people doing what we call commercializing early. And this is the concept. So we've been an advisor to several technology and software companies. Periodically a software technology company will get so enamored with their technology and their software, but their a little bit scared to talk to customers. And at the end of the day you have to talk to customers early and often to get feedback. Are they willing to buy the product, not buy the product. And so it's, it's not that you're going to create momentum quickly, but at some point if every sale is so impossible, then it's probably a sign that people don't really want your product or it's not really a need for that product. But, but, but you have to sort of what we see the mistake being like for example, a lot of people in software do a ton of pilots. Nobody's paying from them for the pilot. And pilots in some way are a, are they feel good, somebody's testing your product, they're working with your product, but if you don't move them from pilot to actually revenues, you're not really, you know, you're not really making progress, you're not really building a business. Very similarly, you can get feedback on an idea for a business from 100 of your friends. And your friends might all tell you terrific idea, bad idea, good idea. But largely that's meaningless. What really counts is, is a customer willing to pay for what you're trying to sell. And if they're not, you really don't have product market fit. And the other thing I would say along these lines is whenever I've started any sort of business, we've had naysayers, people that said you can't do that, it's too competitive, you can't do that, it's not going to go well. And the other thing you could do is you also can't listen to the naysayers. The only thing that really counts is is a customer willing to buy what you're trying to put together and work with or not. And so you'll have people say, I remember when we started the hospital line At Becker's Healthcare, people saying, oh, you'll never be able to do that. That's so competitive. You'll never be successful in that. And then, of course, it ended up being by far 90% of our company and ended up being crazily successful. But. But you can't listen that either. Like, what really happened, we really got started is we went to our existing customers and said, you know, we're going to expand into these different lines. Are you interested in being involved in that? And that was how we tested whether they were. Whether there was an ability to grow into some of these other lines, was what did our customers really say to us? And it's something in a startup, you really have to talk to customers, see, are they willing to buy what you want to buy? And. And that's no fun. It's very binary. You know, that's why sales as a career is very hard. People either say, yes, I want to buy it, or I don't. And that's hard, but there's no way around it. And so you have to have real conversations with customers. Do they want it or not want it? And again, you know, general marketing, general advertising, fine. But real discussions with potential customers, this is the gold standard. This is how you find out somebody really want what you have or not. And then you have to have great people in place that can execute on that to really figure out, you know, if you're hiring salespeople, they have to have direct conversations with people willing to ask for uncomfortable things like the sale to see if you really have a product that people want or not. And so, like, we find in every business that we're in, there are some people that are just invaluable and getting to the heart of, can we build a business in this area or not? You know, because they're able to really dig in pretty quickly and figure it out. Mao, I know we're running out of time for our core discussion. I promised our audience 30, 40 minutes. Let's hit a couple other questions quickly that we've got on the slides.
- [35:58]
C
And, yeah, I think we're up to now. Burning boats, loving your 90 percenters, the great kiss, and Gordon rule, and then just the single most important thing. Scott. So if there's one of those four you really want to make sure we spend some time on, I'll talk through.
- [36:14]
B
Those four very quickly. So when people do 90% of what they do well in their job, you have to love them. Like, we'll get supervisors that are beating the heck out of somebody over the 3% they do wrong. The 5% they do wrong. And people are imperfect. We are all imperfect. Love your people that do 90% of what they have to do. Well, the Greekest role, the Greekest role relates to a person who used to work with me. Fantastic person. It was a time building law practice, right? One serious lawyer working for me. And with me and my clients, that person quit and I was in a horrible spot. And so the concept is, whatever you're doing, you can't be reliant on one great customer, one great person, one big rate anything. And he was great, but. But when he left, I was, I couldn't take care of clients. It was horrible. And you learn you have to build a bigger business to have a successful business or a thriving business. Not because you necessarily want to. I'd like simplicity in a simple business. But to be able to really take care of customers and have a business, you need a more significant business. Where we had the same lesson at Becker's Healthcare, where we built up serious editorial teams, serious sales teams, we just couldn't be reliant on one person. Just doesn't work. The Gordon rule, which I thought was also is named after somebody wonderful young writer that came to work with us when she didn't have a job. She did a fantastic job, was with us for a couple months. We were able to pay her very little because she had no job at all at the time and living with her parents and so figured this was a win win. We pay her something, she makes a living. And the lesson was you can't underpay people like that because even though this was great for her, like as soon as she had a job and she'd been out of work for a while, then she parlayed it into a better job and left us. So the context is even if people are great and you could pay them low, don't do it. It doesn't work for the long run. So that was the concept there. So we've gone through the Greeks rule, the Gordon rule, the 90 percenters, the burn the boats. You know, I'm not a fan of the burning the boats concept. There's a concept in business of you need to shut everything down to really focus on just what you're doing. And, and you know, and, and you know, worry be damned, it'll either be okay or not be okay. And the concept here is, you know, you know, I'm not a believer in going broke to burn the boats. You, you, you, you try and build, you hedge your bets a little bit. And then when you find that something's really working, you double and triple and quadruple down on it. You know, I think on. On Twitter and social media, I think many people that have not been successful entrepreneurs say, well, you got to burn the boats and be all in. And I love it. But I also think you better be making a salary, able to support yourself, support your family, stuff like that, while you're trying to figure out where you can go with your business and so forth. So I'm not. I'm not a necessarily a quote, burn the boats fan. I'm a believer in a little bit of hedging, but then doubling and tripling down when something is working. Molly, let me turn it back to you.
- [39:07]
C
Excellent, excellent. Thanks for running through this so quickly. There's a question from Gibson and then from Suhas. I hope I'm pronouncing that correctly. Gibson's question is, what are the most important elements of culture in a business? What about your culture has led to success?
- [39:25]
B
Yeah, I don't there's any perfect answer to this. I think you have to get how you treat people right. A culture of gratitude and thankfulness. I think it goes to this concept of love your 90 percenters. You have to constantly double down on your best people. You have to pay people fairly. I mean, there's a number of different things that go into this, but you always sort of want to, you know, be creating a place that's a relatively nice place to work. And the great challenge is it's a nice place to work, but people have to be accountable, you know, so it's. It's sort of both. You got to be pursuing business goals and at the same time treating people really well, you know, and knowing you're treating them fairly. So, like, when we've ever had them, like, terminate somebody, we've gone out of our way to say, look, go start trying to find a job. Before we technically terminate you, we're going to try and give you plenty of notice. We don't want to leave people high and dry. We're trying to take care of people, and sometimes they're not a fit. Sometimes they are. But there's this great challenge of businesses, of treating people really well. You have to build a good enough business. You can afford to treat people really well, both, you know, financially and personally and taking care of people. And it's got to be thrive, thrive cultures where they're thriving, you're thriving. It's. I remember a boss early on in my career where I would. We would joke that a penny for him was more important than or $10 for him to be in their team. And that can't be your attitude. I mean, you want to do well as a business owner, you're going to be well as a CEO, as a founder. But everybody's got to do well. You know, it's not communism, but everybody's got to do well. Everybody's got to got it. You know, you got to be treating people fairly and creating opportunities for them as well as yourself. So we're a big believer and sort of thrive. Thrive is how we try and talk about it.
- [41:12]
C
Great. Thank you so much. And thank you to Gibson for that question. Scott, another one. At what point does a business owner know they're ready to go from a single business to a hold co. So in other words, when are they ready to diversify into other business lines? Any, any factors you would point to for timing?
- [41:28]
B
Yeah, I wouldn't really call it a, a holdco. I don't, I don't know that it's a hold code's the right answer. Hold code to me is like Warren Buffett owning 30 different businesses. I, I think it's. We, we ended up in a spot in the healthcare media business. We're in the surgery center space alone and we just couldn't build the size business we needed to build to have the right types of people working for us and build out the teams we wanted to build out. It just became very clear we couldn't just be a point solution. We couldn't just be in one area. We had to be bigger than that to be able to keep and grow the team we wanted to grow. It's just, it was very clear and if you have too small a team, there's a beauty to, to, to a very small team. But you're also so fragile because if a key person leaves, you're just in trouble. So, so you have to sort of build a big enough team that you. I used to judge when somebody left how big a stomachache I got. And until we got to 50 or 100 employees, those stomach aches could be very big. And it doesn't have to be 50 or 20. A surgeon once talked to me who built a great orthopedic group that the worst number was less than 20 because any orthopedic surgeon in his 20 person group could, could hold the group hostage. And so we're a big believer in building, you know, just whatever the number is. I know there's a specific number that you're not so dependent upon. Any one customer, any one person, any one business line. But it's. Yeah, I know there's a perfect answer. For us, it was in the legal business. We're really in one area to build the type team we had to build. We had to grow into adjacent areas. And similar with the media business, really a similar, very, very similar story in growing in both those. And then I see I've served on the boards of about eight or 10 companies over the last 15, 20 years. It's faster for me to see the evolution, this mix of doubling down on the core business, which really pays the bills, and then the different efforts to get into adjacencies, some of which were successful, some of which weren't. And I don't think there's any perfect answer, but you have the right team so you can really test those adjacencies and try and grow into them.
- [43:35]
C
Abigail has a question a little on a different topic, and this is about maybe it pertains to even our last question we had on the slide here. What's your perspective on maintaining decision quality as complexity increases? So, for example, when you're further from customers, the data is noisier, the stakes are higher.
- [43:51]
B
Yeah, it's a great question. It's a critical question. I used to love when I was really running a legal practice, not being too far away from any customer, a client not being more than one or two lawyers away. So really knew what was going on and really could have have, you know, control of the client's experience and the results. I think, I think very similar with, with business. It's the whole key is you have to continue to develop and great teams and great people because you can't do everything yourself. And so we say this, and it's not a popular thought, but every CEO needs a police person. That police person doesn't have to be a bad person, but every CEO needs a CEO. They need someone who's going to hold people accountable, make sure they do what they do to make sure standards are kept up throughout the organization. And when organizations get really bad is when sales get way ahead of execution, when you get to a spot where you're, where you're trying to, where you're selling a ton, but you can't execute on it well. To deliver the customer experience, you need to deliver that your customers are really taking care of. So we look at that and talk about that a lot. But in terms of scaling, the whole key is you can't scale. You know, there's, I've never found an automatic way to Scale, you need to build the right team, the right people. Like if we were built, when we were building and managing one of the largest law practices that are billion dollar law firm, we, we had a whole leadership team taking care of the teams that were taking care of clients. And the only way that you could do that was by having great leaders taking care of those, those client teams and leadership teams. It's why in big organizations, people that bring in business, people that manage lots of business, people that manage lots of teams are very, very important. Because you can't as a founder, CEO, at some point, as you get bigger and bigger, you can't be watching what the junior colleague is doing or, or, or some other colleague is doing. What you can do is, is be close with the 10 top leaders and make sure they're building the teams and the quality teams that they want to build. You know, and then there is a constant effort to simplify what you're doing and how you do it. You know, great systems and great people. You know, it's not one or the other, it's really both.
- [46:15]
C
Right. That's a, I think a really great question and a good way of looking at it, Scott. Staying close and to the work and the customer and then also the operational leadership. I know you when there's headlines about coos being eliminated at different types of companies and different industries, you are so vehemently opposed to that notion. So operational leadership, whether it's a COO or another title, is just really key.
- [46:38]
B
We think that's absolutely right. I tell you, we're going to wrap up here. I want to thank you all for joining this webinar. I want to thank Molly Gamble, my co author. I want to thank Rosa McKenzie, the team from Score up, for helping us put this on and execute it. I want to thank all of you for listening and joining again. We appreciate anybody that buys the book pre order the book. We are so thankful for everybody joining us and for everybody buying the book again. 773-766-5322. I'd also love your comments. Did you enjoy this? Was it helpful? Was it not helpful? Was the sound quality okay? I know Molly is fantastic, but overall, did we do okay? Giving you some ideas to think about and to work with. Thank you so much for joining us on this Becker Business Becker private equity podcast. Thank you very, very much.
- [47:35]
A
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