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What if I told you that mastering all the levels of business had nothing to do with how many followers you had or what your fancy website looks like? And everything to do with doing the right thing at the right time, in the right order. Once I understood this, I went from living out of motels in my first business, working 1618 hour days, barely sleeping, to literally running teams of hundreds of people on my way to building a billion dollar company. At the end of this video, you will know exactly what level you're at, why you're stuck, and what you need to do to get to the next level. So let's get into it. Starting with level zero. Improvise. You are not a company yet, and that's okay. You're a person who has an idea and a dream that somebody hopefully will pay you for, right? So if you want to start a business, you do not need a website, a funnel. You don't need branding, you don't need a logo, you don't need a big fancy building. You just need to focus on what problem you're trying to solve and get really, really clear on that. When I first started, I literally lived in motels. Motels for months. The first, I think it was like 16 months of the business. It was just like motel to Airbnb that was, you know, and had rats and mold back to a motel that was usually the extended stay or Motel 8. And we didn't know yet what product we could sell, who our customer was. We certainly didn't have a website or a funnel at that point. We were just trying to figure out what worked. So essentially I had left all of my clients and my little business. Alex had left his businesses. And we said, we're going to figure out this business. We called it Gym Launch. And we're like, okay, so who's our customer and what are we selling them? And we knew at that point that we had a skill. The skill was like, okay, we know how to fill up gyms, we know how to get people into gyms and to get them to stick into a gym. But we didn't know which kind of gyms. We didn't know what was the price, we didn't know what did delivery look like. We didn't know how do we sell it to people? And so we went through so many different iterations of trying to figure that out. At first it was like, okay, everyone's saying we've gotta use a webinar, so we're trying to sell this thing off webinars. And I remember we literally got like, 10 leads from a webinar. And then we're like, what do we do with these? And, like, none of them signed up for a call. And we were like, that doesn't work. And then we're like, okay. I think what we do is we're selling them the fact that you or I are going to fly out there and we're going to, like, build their gym for them. And we said, we're going to do a gym turnaround. And I remember we posted for that and it's like, nobody signed up, didn't work. And then the next iteration was like, okay, we're just going to tell them that I do all the work for free. We will pay for ourselves to fly out to their gym. We will sit at their front desk and we will sell people into their gyms and they don't have to pay us a dime. That was the first time we finally figured out, and it worked for the first time, right? That was the first thing that we actually got someone to say yes to. And they weren't even giving us any money. That iteration, which, by the way, was not the final iteration. It was just like the first thing that worked for a few, like, I wanna say, eight to 12 months. That took us a year to get to. And so maybe you have been working on something for six months and you have a logo and you have a name. So the real constraint is that you probably have skills, but you don't have anything to sell. It's not because you don't have an offer. It's because you probably have 17 different offers bouncing around in your head, but you don't actually know what do people want? What will they pay for? How do you deliver it in a way that actually creates results for them? And so you're probably stuck in your head. You're ideating, you're overthinking, and every day that you're doing that, you're not actually testing the market and finding out what works or doesn't work. You're just getting better at being wrong and procrastinating and creating identity around the fact that you don't do anything. So how do you get to the next level? Notice what I said in my story. We tried stuff. The first thing that you need to do here is give something away for free. Now, that doesn't mean you need to do it forever, but you need to do it long enough to learn what actually works. You know, what we did essentially, is we said, we're gonna sell all these people into your gym, and you don't need to pay us anything to come do it. And we will just take a piece of the money that we make. That was it. So it was free to them. And then we actually made them money and made ourselves money in the process. The other one could be that you could do free consultations. You can give someone an hour for free. If you're a personal trainer, it's like, I don't even know how many times when I was a personal trainer, I give away free sessions. It was just like, yes, let's do a free session. Whatever it is. The goal isn't to build a giant following or giant business, it's just to get data. What do people actually struggle with? What do they actually care about? What results can you actually create for them? The rule here is that at this stage, you need to optimize for learning, not for earning. Most people skip this. They wanna monetize before they even have anything worth paying for, before they're even clear about the value they're gonna deliver. Which, by the way, you don't want that because you don't want people to be buying something that's not valuable for them. You need to test this out before you get into a real product. And a lot of people from skipping this and they say like, oh, everything feels hard. It feels like I'm pulling teeth. It's like, well, no, because you didn't actually figure out what people want. You're just selling the first thing that somebody said yes to when you coerced them rather than actually sold them. So if you're stuck here, it is often because you're optimizing for perfection, for money, for status, instead of information and learning. So this is what you need to do. We need to stop thinking about it in our heads. We need to start testing it with people. It's like you have to be okay with failure. Failure is not a bad thing. Failure is data is the price of admission to the next level. And the next level is monetize. At level one, you are just trying to get your first dollars in the door. You've seen people get results, but now it's like selling feels hard, or at least it feels inconsistent. Like maybe you've gotten a yes, but you're like, now I've gotten four nos since that yes. Or you feel like you're bothering people and so it's like you're not even really attempting to make the sale. Now here's where most people get ahead of themselves and try to sell a larger market before their business is ready A lot of founders, they get caught up in the initial success of discovering their product and then they rush into larger scale sales. And so when that doesn't work out, they get super discouraged. I had a company that I looked at that was a B2B nutrition certification company. I looked at it and I was like, man, their sales are like super inconsistent. Like, what's going on? Either your stuff isn't actually good enough to sell, right, because it seems like it's very volatile, or you don't really know how to sell it because like, these numbers aren't really adding up. And so then when I asked the founder, like, hey, what's going on? It was like, oh, well, you know, I sold it once to Sally, say the name of the business. And then I was like, I gotta hire a sales team. I was like, oh, okay, we haven't worked out the kinks enough, right? And so what happens is you start wondering, you're like, is my stuff even good enough to sell? Is it? I don't know how to sell it. And oftentimes people try and outsource things too quickly. You don't really know either of those things. And the answer is that usually it's both. At this pace, your offer is probably a little confusing. You don't know what sentences get somebody to say yes or persuade somebody, or transfer your knowledge about the product to the customer, have proof. So it's like you're not able to show them evidence as to if the thing works. Or if you do have proof, you're too in your head to actually, I would say like facilitate showing them the proof. And so the trap is, is that you think that you need more credibility, more content, more salespeople, a better funnel, but you don't. You actually just need to focus on consistently closing people manually. And so you don't need to have all this fancy stuff. You need to talk to your customer, use your voice, right? Maybe doing a DM depends on like the sale that you're making, the price point, but like your voice, a dm, you doing it. And you're not going to do this through a funnel. You're not going to do this through ads, you're not going to do this through like a webinar on your YouTube, like talk to your customers. So to graduate to go to the next level, that's what you need to do. You need to stop distracting yourself with brand and credibility and funnels and hiring a team. And you need to convert somebody. You need to understand a problem, present the solution, ask for money. And do it yourself multiple times, and then you can get to the next level. Okay? So you want to stop polishing whatever it is you're doing and like, finicking around with all the other things that you think should be in your business and acting like a Fortune 500 or trying to act like my company that, like, I have 150 people. Do not act like my company. Start talking to people on the phone. You are not too good for it. So today, if this is the stage you're at, what I want you to do is pick up the phone and talk to a potential customer. And guess what? If that makes you nervous, great, because that is skill you need to master to do so many things in business. If you can't talk to strangers, good luck having a business. Like, we need to learn to do this. And you definitely cannot scale if you can't do this yourself. Do not skip this. A single conversation where someone says yes teaches you more than six months of ideating about it. Six months of content creation, six months of building a website. It teaches you so much more than you could ever get from anything else. Which brings us to the next level, which is advertise. Now you can sell. Okay, this is great. It's like, we can sell. We're getting people to say yes. The problem that you come to in this stage is consistent, okay? And level two is where, like, real advertising starts. Being intentional about advertising is all about putting in the work and having follow through to it. Okay? So some months, a lot of times in businesses in this phase, they're making $10,000. The next month, it's like $2,000. So it's kind of like your income looks like a little heart rate monitor, right? When you're, like, stressed and this and you're like, exercising, it's going all over the place. So you're working constantly, but you can't really predict what's going to happen next. I don't know how much money I'm going to have next month. Now, why is this? It's usually because your leads are inconsistent. You're reaching out. When you remember, you're kind of like running off caffeine and memory. You're getting leads when you remember to get leads. I remember this because in the beginning of our business when our income was around this, one of the things that we struggled with was like, we would have leads. And it's like you spent all this time working those leads, and it's like, oh, my God, I need leads again. And then it's like, oh, God, I forgot to do this. And wait, what about this thing? And it's like everything is built off of memory and it's built off of inconsistency. It's like you don't have any systems in place. Like you are the system, right? And so you have a lot of like stop start and it only stops or starts with you. You're the one controlling everything, right? And so your lead flow is way too stop start. That's usually the first thing that we need to get a hold of. So how do you graduate to the next level? Something that we call acquisition.com here called Hormozy law, which is the rule of 100. What is the rule of 100? 100 actions towards lead generation every day for 100 days. That could be 100 DMs, it could be 100 calls, it could be 100 pieces of content, it could be 100 ads. Pick the channel and go all in. What is going to create the most consistency and predictability in your business? That's the one you want to pick. Find the place in the system right where it is most important that you dial in. The consistency and predictability is going to be the thing that lets you hire your first person. Here's what's actually happening during this stage. You are building your tolerance for the volume required to win. Most people quit here because doing a hundred things a day, let alone a hundred of the same thing a day, feels like too much. But that is literally the job. Now I will say this, a common mistake here is I think a lot of times we try to hire before we have consistent revenue. Do not do that. You are just going to add extra overhead and inconsistency. Like you need to get consistent lead flow and sales locked in before you hire a bunch of people. Otherwise you just add overhead and to the inconsistency which makes it worse. And then you're not gonna be able to figure out all the problems moving forward. Think of yourself like an athlete and you're at the stage where you are just hitting the gym and putting in the reps and not focusing on the outcome right now. It will come. The results will come. You just need to have faith. Level three, stabilize. This is where you stop being a one person army and you start actually becoming a manager or a leader or a combination of both. The difference between a $50,000 a month and a $300,000 a month is not working harder. It's actually just knowing what to stop doing and then knowing what to do. I also like to call this like, the swamp of. Because you are for sure drowning right now. Like, comment below. I'm sure you were in the swamp of. I actually think it would just be funny. Comment, swamp of. Basically, it's like, you have leads coming in, you're closing deals, but you're like, holy crap, I cannot do marketing. Sales, delivery, finance, ops. We have taxes and things that are legal. How do I hire people without dropping all the plates? So you start to realize you're like, I'm the bottleneck, like, in every conversation. I'm in all the pieces in the customer journey. I'm in every decision that's made in this company. And I'm working all the hours of the day, cracked out on caffeine and C4, and I feel like I'm still behind, right? And so the constraint here is there's just too much to do for one person, which is like, people are like, I hate saying this, but I feel like there's just too much for me. I don't know if I can do it. And I'm like, oh, my God, you're human. You're not a robot. We didn't know. Like, there was a point for me where this was super real. We were making $300,000 a month. And I remember I was working from. I would get up at 4am and I would literally get on the treadmill and work on the treadmill for, like, two hours, because I knew I couldn't walk at all during the day because I had no time, because I was taking calls all day, doing meetings all day. And it was like, I was so tired that I remember going to Starbucks and I would get a venti in the morning, and I would go back and I'd get one at, like, 12, and then I would drink, like, an energy drink. And then it got to the point where, like, I could drink an energy drink and just go to bed. And that was when I was like, some shit's wrong here. Like, I am not physically okay. Like, caffeine does not affect me anymore. And I was like. Literally, my mind started going to like, what's stronger than this? And I was like, oh, this is how people get on drugs. Okay, we're not going there anymore. Just kidding. So normal to be there. This is the stage where a lot of founders confuse being busy. Like, I was with growing because you feel very productive because you're exhausted. Like, I was doing stuff all day. I was busy, busy, busy, busy. But, like, was all the busyness growing my business? Probably not. I was just, like, treading water so in order to graduate this level, you need to get help and create very basic repeatability. Now, notice I didn't say you need to hire a whole team. I said get help. That might be a va, a part time contractor, maybe one first time hire, whatever. But the key is you cannot just offload tasks. You need to create repeatable processes that somebody else can do the thing without you. If you just say, I remember every day to do this thing. Hire person now every day you remember to do this thing. Bad. That's not a system. Okay? Systems are like, we have scripts that tell us how to conduct a sales call. We have templates for how to deliver something to a client. We have a checklist for onboarding, we have a CRM where deals live. Okay, it's not like I remember now you remember that is not a system. And now a system doesn't need to be pretty. It just needs to be something that you can hand somebody else and they understand what to do without you having to remember and them having to remember. If you can't explain how to do the thing in less than 30 minutes, you probably don't actually have a process. You probably have some sort of very amorphous magic trick that only you can do. So the biggest thing that you can do at this phase to help you graduate and help you acquire that skill is to stop doing everything and start documenting everything instead. Which brings me to level four, which is prioritize. Okay? This is like you're going to have somewhere. Like you have a team. You've probably got five to nine employees at this point. Your business starts to become real, right? And I think that level four, at this point, it's really about building scalable infrastructure. Okay? There is one shift that separates businesses that scale for millions of dollars to those that fail. Usually at this point, what has happened is that you have said yes to everybody. You have built a Frankenstein offer. As I like to say, you have three different customer avatars and they all want different things. When I was building my first company gym launch, this was something that happened very quickly actually, because we succeeded very quickly is I started noticing, I was like, oh, all these people coming in. We were signing up gyms. We had like yoga studios, Pilates studios, big box gyms, small gyms, all this stuff. And they were all coming in and I noticed a lot of them wanted different things. And I was like trying to service all these different things. And so it felt like everything was custom in a weird way, like a weird custom negotiation. That was the point where I realized I had too many avatars. And so that's when we said, like, we are for small group training gyms. We are not for Pilates. We're not for yoga. We're not for big Box. Later, we expanded into those, but we did not for a good three or four years because they wanted different things. And the constraint prior to that was like, we were just trying to be everything to everybody. And it felt good at first because, like, revenue's growing, margins are, you know, there, but they're not amazing. But, like, there's growth. But it's like, even with the growth, it felt so chaotic. It was like everything was a mess. I didn't know how we were going to consistently deliver or, like, have standardized delivery. It was hard to train people. What you realize at that point is, like, you're not building a business if you don't standardize things. You're basically running a consulting firm that you call a product. That's a consulting firm. And so how do you get to the next level? The next level is you actually have to do the opposite of what you've been doing. You need to niche down and tighten your qualifications. Start trekking. And this is really painful because it's like, oh, my God, I have to say no to money. I had no money not that long ago. Layla. I don't wanna say no to money. I have to say no to opportunities. I had no opportunities a few months ago. I understand, but saying no to people who want to give you your money but aren't your actual customer is the best thing that you can do at this point in time. You have to know who do you serve? One avatar, what do you sell them, one core offer and product, and how do you qualify them? What is the specific criteria that predict success? I bet you right now, if I asked you, who are your best customers? And when I say best, I'm sure what you're thinking. It's customers that pay you the most money, the most consistently, that take the least effort. Those are your best customers. So once you figure out who those people are, it's like, whoa, maybe we should just sell to them. And then once you know that, you want to start tracking things. We're not just tracking at this point, like, how much money's in my bank account today and tomorrow, how much was there yesterday and the day before? Because that's the beginning. What you're probably doing is checking your bank out every day, which I know because I did that. You start tracking what is my conversions, what are my lead to show what Are my lead to close, what are my show to close, what's my churn, what's my cost of delivery, what's my response time or my customer service? Because you're not gonna be able to fix the things that you can't see in your business. And so this is also the stage where, like, doing good enough starts to kind of die because you can't scale on just, just good enough. And I think a common mistake here is that you think you're going to focus later, after you hit some, like, revenue milestone, you're going to start saying no to customers, but you won't. You're going to have way more chaos until then. I will tell you guys, like, is a very hard but required mindset shift here. This is where most people get stuck. This is why so many businesses don't make it past like 3 million a year, 5 million a year, because they don't know how to not chase every dollar. And you don't see that the very thing that you're chasing to make more money is actually preventing you from making more money. And so you have to stop chasing every dollar and start building a machine that can deliver consistent results to one person, one avatar with one product. Now, once you've hit that level, you can go to level five, which is productized. This is 10 to 19 employees. If you get past level four and you're in level five, you have made it past one of the hardest humps to get through in business. Because at level five now, you're real business. You have a team, you have systems, you've got revenue. But you're going to hit a ceiling. That ceiling is economics. The money coming in only goes so far. And you have to find a way to make it sustainable. There is really only one way to grow from here. You at this point to sustain hiring the team and building out the company. You're not making enough money per customer. That's almost always the issue. Or they're turning too fast. Either way, it's like the math is not mathing here. So I remember there was a point where we had a business that we took on and they were getting in a ton of different customers into the business. And like, when I say a ton of customers, I mean, like, they had one specific type of customer and they were getting about 10,000 of them a month. This business was cranking. But what was crazy is I was like, why are our margins so bad? What we realized the constraint was just low LTV to cac. By the way, LTV means lifetime value. It's like the total amount of money that someone pays you for however long they stay with your business. CAC is cost to acquire a customer, which is how much money does it take to get a customer? So that means how much does it take to market them to pay a salesperson and then to get them to finally sign? Which is often the constraint in businesses at this point. It's like you, you can get people in the door, but the cost of getting in the door might eat away a lot of the margins of that product that you have. That if you don't have another product that you add on, you can't really scale the business with all the costs that you're adding on to get the right infrastructure to build a bigger business. So those are the two things. So what we want ideally is that it costs us less to acquire the customer than the ltv. Now if it costs us the same amount to acquire the customer as the ltv, well now we're only making any money, we're just zero. Which why the fuck happen business if you're going to do that? So, so what we want is that cost to acquire a customer is lower than LTV by a lot. In fact, the more the discrepancy, the better it is for your business. Okay, now you can do this in a few ways, which is either you build a backend product that they can buy that costs more money. Lots of companies do this. This could be like buy one, get three for half off. It's like those people are immediately trying to liquidate their cost to acquire a customer. Another way you can think of this is if you've ever signed up for a coaching program and they're like, oh, it's group coaching. And then they're like, hey, by the way, in week two, they're like, do you wanna do one on one coaching? It costs more. But you can do this. That's an upsell. Another way that you can do this besides upselling someone into something is by reducing churn. So another piece here is like you can have low lifetime value because a lot of people are leaving your business. Churn just means people leave your business. So when you think about churn, how do you get more people to stay longer? Maybe your product is missing some things. So it may be that like for example, let's think of something that has bad term which is clothing, apparel, right? It's like they buy something on time and then they're gone. So it's like the whole business has turned, right? How do they get recurring revenue which lets them increase lifetime value. A lot of them. Have you ever seen they have memberships? Have you seen like fabletics members included? You have skims, has a membership. Like there's so many clothing brands. Aloe, Lululemon. Lululemon like was notorious for theirs because if you're a personal trainer, you automatically get like this insider club thing. Like there's so many clothing brands that do this because now they have recurring revenue, which means they can spend more money to acquire customers and build their business. At this point you've built a great entry offer, but there's just no back into it. So it's like every customer is a one and done transaction and they likely leave quickly. So you're always on the hunt. And so it feels like this revenue treadmill. I understand where it's like, oh my God, I want to make sure I can pay these people next month. And so the way to graduate this level is you need to sell your second product and create consistent delivery standards so people don't turn quickly. Which by the way, these two can do the same thing. You can create consistency that stops people from churning. You can also create a product that stops people from turning. Either way, keep people longer and get them to pay you more money. That's it. That's what this is about. We can say it fancy and say we want an ascension path, which means get them to pay you more money. We could also say keep them longer. We can say it reduce your churn and your customer bad luck, whatever, get them to stay longer. That's all it is. Those are the things we wanna do at this level. So at this level there's a few things that you will probably help you nail these down. One, documented delivery processes. Usually you've documented your sales and your marketing. This is just how people work. But they haven't documented delivery. The second is you want quality standards, which is like what is the quality that a product must meet in order to get into a customer's hands? Third, training for your delivery team. A lot of times we have like training for the sales teams. Train your delivery team the same way you train your sales team. You should be drilling them the exact same way. And lastly, we want to mimic sales track customer success metrics. How do you know that you have succeeded in delivering the product to your customer? What are those metrics that tell you that if you start measuring those things, it's really easy for you to tell, Do I need to create a product that makes us more money or do I need to learn to keep them Longer. And then once you put one of those in place, you can measure its effectiveness by having those things there. This is also the phase where you get the first true leadership tax. You realize that you cannot manage more tasks anymore because you are managing people who also some manage people. And that requires an entirely different skillset. And so there are multiple things that you are up against at this point in time. But I want you to know, like, that is normal and we can get to the next phase. So this phase, if I had to sum it up, stop adding more, start extracting more value from what you actually have. Which brings US to level six, which is optimized. Now we're at 20 to 49 employees. I understand we're starting to get in thin air here, right? The truth is you have a lot to offer. You're probably able to keep up with your customers now at the rate you're growing now, if you don't put systems in place soon, things are going to start to fall apart. And this is the phase where it's like everything feels inefficient, Training is inconsistent, customer journeys are conflicting. And like your sales and your delivery teams are not on the same page. Systems are messy. You realize you don't have security. So if somebody leaves, you're like, how the fuck do I get them out of systems? Money starts disappearing in weird places. You're like, I thought our margins were this. Why is there only this in the bank account? I remember during this phase feeling like all of a sudden it's like outside my control. That's the biggest thing you realize, like, you're making a lot of revenue, your profit starts to go down, you're growing headcount, but your productivity per person, person is flat. Like, stuff feels off, but you don't really know what's off. You're just like, something is wrong here. And your constraint is that everything is inefficient at this phase. I remember at this phase in my business realizing that there was a day when I looked at, it was like the P and L came in and our margins had dipped by like 20%. And I was like, the is this? And so I was like, how would that happen? Like, we added more people to the customer success team and more people to the sales team. Why would our margins go down? And so I started digging in and then it's like what I come to found out is that these people that were coming in, our customer service team was no longer actually doing reach outs for refunds anymore and they were no longer doing reach outs for failed payments. And I was like, what the fuck? So right there was like 10% of our margin. And then I found out the sales team wasn't working leads as hard anymore. In fact, what I found out is that we would have people for our funnel. People would apply, and then they would book a call. But there's plenty of people who applied and never booked a call. We always worked those leads. Of course, those are very hot leads. Well, apparently they stopped working them. So in one month, both those things happen. And what I realized is that those systems, the ones that work for 10 people, they don't work for 30 systems built off memory, systems that don't have triggers, systems that don't have cues. So it's like everyone's working harder. Like, no doubt my team was working hard, but less was getting done and our profit was decreasing. The second thing I started noticing is, like, meetings took forever. It was terrible. Decisions are really slow. Handoffs are super sloppy. Information is mostly in people's heads. So I would have to constantly ask people questions rather than, like, be able to see it on a dashboard. And now, from this level, in order to graduate, what are the things we need to do? We need to install training systems, segmentation for our customers, and actual operational discipline. Like, we need ops in the business. So what does that actually translate to? One thing. Formal onboarding programs. Not just shadowing, but, like, for a salesperson that comes in or a CS person that comes in roles that you have multiple people for, you need a formal training program. You can't just, like, wing it anymore. Because if you don't have formal training, you don't create consistent delivery or you don't get consistent results in that department. The second one is customer segmentation. So you have now at this point, multiple products, and you have different types of customers, and you're big enough to handle it, but you need to make sure they're not all treated the same way. They don't all have the same customer journey. Because if you treat a customer who pays you $1,000 a month the same way you treat one that pays you $30,000 a month, and then the next piece is data. Like, at this point, you have no single source of truth. It's like you're living on, like, 17 spreadsheets, which feels terrible. And so you need to clean up your data, which then if you clean up your data, you can get financial visibility like a real P and L. Not just like checking your bank account, but, like, you can get a PNL delivered to you every month that Tells you where all the money in the business is. And then going with that is role clarity. Everybody knowing what their job is, having a job description, having clear lanes, knowing what decisions they can make. Notice this all starting to feel professional. That's what it does. That's what happens. At this stage, you stop being good at business and you start being good at running a company. That is what you need to focus on. Often this time, it's where you're like, I need an operator. Kind of have to transition from a founder mindset to an operator mindset Now Why? Founder builds foundation. You've built the foundation. You're not inventing things anymore. You're optimizing things and professionalizing things. You need to wear a different hat. Now in order to go from this level to level seven, which we call categorize, which is 50 to 99 employees at level seven, every system in your business is overwhelmed. Okay, so you create rock solid systems that got you to this level. But very quickly as you're growing, it's like, how long can it take before those systems start to break? I always tell people when they put a system in places, they're like, we got 18 months. Okay, 18 months. I'm probably gonna need a new one. Usually at this point, what happens? Like, the CRM is a mess, Customer data is scattered, the hiring process is informal, and probably like, how is it that we hire so quickly some months and then, like, really slow other months? Your support team is drowning and your accounting is behind, and they're probably trying to catch up with all the changes in the business so you don't get the most clean P and L. Oftentimes at this point, it feels like I just did all this work and now I have to do it all over again. Now I feel like none of it's working anymore. I'd been there multiple times in business. I remember there was a point where I realized when I was at level six that I didn't have some of the right people in place. And so I had to essentially exit, like, three of my managers, and I had to put three new managers in. And I got done. I was like, oh, my God, I can breathe. No, I can't. Because then I realized I was like, oh, my God, we've grown by, like, 20 more people. And now all of a sudden, these systems that I had in place that I needed to make sure were being done correctly are not even the right systems. My constraint is now disorganization, overloaded systems. And so you can't optimize anymore. You actually need to reorganize the business. The structure, the categories, the layers. What you have to do is you have to focus on a few things and this is very common in most businesses. One is proactive customer success journeys. Like you need to understand how to drive a customer towards success, not just wait for them to fail and then try and clean it up. The second is creating a second acquisition channel. this point in the business, you're relying too much most of the time on, on one single source of customers. It's like you get them from one big affiliate deal, you get them from one either Facebook or Instagram or TikTok. It's like, okay, in order to build redundancy, I need to get a second acquisition channel up and running. Oftentimes also with the number of people you're at, you like need formal HR systems. It's like, oh my God, we need like a CRM for people, which is called an ATS and a hris. Okay, but it's CRM for people in your business. And then with that you're like, oh my gosh, I have all these independent managers operating. I need to get them to have some kind of like rules to live by. Oh my God, I need budgets. I don't know how to tell them to spend money. People are asking me, can I spend 10,000, 5,000? I'm like, I don't know. Oh my God, I need a budget. It's terrible. So what does this mean? It means you need dedicated customer success, not reactive support, but like proactive journeys. You need that second acquisition channel so that you're not dependent on source. You need real people infrastructure to support the amount of teammates that you have now with real systems and performance management. And you need to have like a really real finance function that can govern all these independent functions. So they're all the teams own their own numbers. On top of that, you probably need some cross functional communication, regular meetings, clear priorities, line goals. I say it like that because it sounds so lame, but I love this and it's amazing and fun. So at this point you're probably thinking that's a lot of for me to do. Correct? That's why you have to hire people above the managers. Okay, you are no longer at a point where you can just hire managers. You need directors who can run entire functions without bringing you in too much. Now what does that look like? When I think of a manager, I think of somebody who can help manage the tasks and the current state of the business. When I think of a director, I think of someone that directs where we're going to go. We are directing, we are choosing the direction and then also managing below that. So now at this point, if you don't get other people to help you with the direction, decision making the judgment, it's going to be really hard to reorganize things around here. And you're going to start drowning in the success and you're going to be like, I am making so much money and I would literally end it all tomorrow because I'm losing my mind. Because revenue grows, but the chaos grows much faster than the revenue. What you have to do at this point is you have to stop being the operator of the business and you have to be the architect of the business. The hardest switch for you to make as a founder, like, you have to go from like, I run all the things to like, I have people that run all the things. And I architect the business architect, the product architect, the market architect, the brand. Like, you are the one that paints the vision that those people can help build. Which brings US to level 8, which is specialized. This is 100 to 250 employees. Once you have over 100 employees, it is time to look very closely at what they should be doing or should not be doing. Your systems are probably running a lot more smoothly because you've redesigned them almost too smoothly, right? Because for too long you've actually relied on the same core group of people to handle it all, and now you need them to refocus. So at this point, no one can be good at everything. I will tell you that in my first business I got to this point and I didn't want to offend people, so I allowed them to stay like much more generalized in their roles. And what happened over time is like I would bring in specialists who would come in and they had so much more focus and ability to do their job that they made the other people who were like splitting their focus look not effective. And so then it started to take a toll because now their reputation within the company starts to go down. And so what I've realized is that at 100 to 150 people, your generalists start to break. Like the same person that manages an acquisition strategy cannot manage the sales team. Now why is that? Because when you have a very small sales team and a very small acquisition strategy, there's just less volume. You can manage both, but as they both grow and there's more people and more problems and more systems, you just physically don't have the time to manage both. It's not like you're incapable. It's like, this is a smart move not to do both. It's kind of the same with like the same person running. Customer success cannot also help build the customer success tech stack. It's like we need to have actual tech team and division that can build this and a customer success that runs it and informs that tech team. So essentially your constraint right now is you have specialized demands. The business becomes a lot more complex. And so because of that, you need specialists, you need dedicated functions where people have clear lanes and they have solutions for those lanes themselves. This is where you start to see, like people have within, in a department, their own tech dedicated to that function. You might be using one customer success tool for this level of product, but at this level we need actually a completely different tool. Second to that is we wanna standardize a lot more of the people systems in there. Hiring performance systems, this is where they start to break and you start to see inconsistency. There's a big cultural risk right now. And so it's like we need to know that we bring people in the same way and we evaluate them on success the same way. If not, then how do we know that we're fairly evaluating people across the business? We don't. And the last thing that usually starts to be inconsistent is brand. Because the company is changing so much and it's growing so quickly, the brand can get diluted or it can kind of forget why it was formed in the first place. What is the ethos of the brand? What's the heart of the brand? This is where we really have to dial that in. So it means that we have a lot of stuff. We have dedicated acquisition team, sales team, delivery team, tech team, probably tech per team. We have dedicated CS product team that's innovating, a finance team that's just giving you data, an HR team, probably also a recruiting team and an ops team. And for each of those teams, we have specialized tools for each of those functions. Not just one tool that tries to do everything for everybody. Because at this point you probably can't. You need like a custom CRM with custom tools for each function. And then we need to have standardized hiring scorecards, structured interviews where we collect all the data, somebody's overseeing it to make sure that people are adhering to it. And then performance management, rather than just going off like this person killed it, it's like, no, we have a scorecard that we evaluate people by. We have metrics, we have reviews, and then we have consistency amongst the brand. Everybody can represent the company the same way, because we have standards that are shared with the entire company. And so this is where I would say value based leadership needs to have systems behind it. Otherwise it dies. You have systems to protect the values, not to suppress them. At this point, you cannot manage more without having systems and you actually can't improve the culture without them. And if you don't have a system that surfaces problems before they get bigger, it's like those things start to explode. So at this point, as a founder, as somebody running the company, you don't need just directors and you don't need just managers. You need executives. You need people who can own P&LS. You need people that can literally speak to you once every few weeks and be able to operate without any more input because you don't have much time. And the time you do have has to be spent looking ahead because it's a lot harder to pivot the Titanic than a robo. It's like you really need to look out for the future of the business. If you're not doing that, then you're going to make mistakes that are going to take you months or sometimes years to get back. Now, a common mistake that a lot of people make here is promoting, say, your best operators into leadership roles without teaching them how to lead. It's where a lot of people hit like, the level of incompetence, which is like, they're very good at the job they're in, but they have zero competence in the next job. So being very good at this job does not mean that you're going to be very good at this job. So the shift you make at this level, right, is you are going to stop managing people and you have to start managing the systems that manage the people. Which brings us to level nine, which is 250 to 500 employees. Okay, this is not the final evolution, but is the final one I would talk about in this video because after this, I'm sure the retention curve will drop off very quickly. Level 9 is where you become an institution and your brand and culture become the moat for that institution. There is a reason why, why most businesses never reach 500 employees. And it does not have anything to do with strategy. Now, full transparency. I have not had over 500 employees. I have reached the revenue of many businesses at this point, but I have not reached the amount of people. And I have done this by people for a reason. I think the people bring more complexity than the revenue even does now from the people that I know that have gotten to this Point. This is where you have to stop asking, where do we grow? Instead, you have to start asking, where is the next big future bet you are now no longer working in the present, you are working in the future. You've already optimized everything, and your current business is a machine that's being run by almost somebody else because you are working on the next version of the business, not the one that you have today. Why is that? Because what you see when a business gets to this point is you start to hit. There's what we call the S curve. The curve starts slowing, so you've essentially reached market saturation. And then you see you're starting to stagnate. Competition increases, sales aren't as easy. You have to try a lot harder. It's like everything starts to get harder. And so what you, your job is is that you have to figure out where the next big growth curve comes from. This is innovation at, like, its truest form as a founder. And it doesn't mean you just do more of what you're doing. It's like you need a new growth engine for the business. And so to graduate this one, you either build or buy the next Rising Star product and you shift to brand first while also upgrading your systems. It's like all these things kind of happen at once. This is where you start thinking about, what's the next product? What's my ROI on buying versus building? And you just have to decide, am I optimizing for speed or quality, or am I trying to do both? You kind of have to have one master. Like in every business, you really need to know what you're optimizing for. Second to that is your brand is at the point where, like, you have to be everywhere because your customer is everywhere. You have so many customers now, you have so many more products. You have to figure out how to be omnichannel, and not even just to be omnichannel, but be top of mind. It's very hard. Just like a, you have to innovate a product. You have to almost innovate your brand at the same time. This is why the brands that stay around the longest, it's like it's the brand that keeps the product relevant. And so if you don't have a relevant brand, if you can't keep up with what's cool now, what platforms to be on, what formats do best, if you can't do that, your product probably isn't going to do well either. And so your brand really becomes this moat because you're not competing on price or features. You're competing on who you are and how you're trusted in the marketplace and can you stay relevant? And do your customers feel heard and seen by your content? This is where institutions are built and where you're thinking in three to five year time horizons and where you're thinking about how do I allocate capital, not just how do I like manage current day operations? As you can see, the real question is not how do I get to the next level, it's what function do I need to build to get to the next level? What people do I need to find to get to the next level? What kind of product do I have to have to get to the next level? What does my brand need to look like to get to the next level? Who do I need to become to get to the next level? Because your truth is this. Your business is never going to outgrow your capacity to lead it. Okay? So if you're stuck, look at what stage you're in, look at the constraint you're facing and ask yourself, am I building the right function? Am I taking the right steps? Or am I just doing more of what I'm already doing because I'm afraid and because I'm good at the thing I'm doing right now? Most people stay stuck in business not because they're bad at the next thing, because they're so good at the current thing that they don't want to take a risk. And if you want to walk through this roadmap, I've actually built what I call the Scaling Roadmap along with Alex, my business partner and husband. You can check out that in the link below.