Podcast Summary: Coffee N° 5 with Lara Schmoisman
Episode: Scaling Smart: The Business of Growth with David Aquino
Release Date: February 18, 2025

Introduction

In this episode of Coffee N° 5, host Lara Schmoisman engages in a deep and insightful conversation with David Aquino, the Chief Operating Officer and Executive President at Ben Health. This episode, titled "Scaling Smart: The Business of Growth," delves into the intricacies of scaling a business effectively, emphasizing the importance of operational efficiency, financial acumen, strategic partnerships, and maintaining accountability during periods of growth.

The Importance of Operational Efficiency and Financial Acumen

Lara Schmoisman begins the discussion by highlighting the necessity of focusing on growth both personally and at the company level. She underscores the significance of transparency and the role of the entrepreneur as the face of the brand. David Aquino responds by emphasizing his passion for supply chain operations and financial management, asserting that "you can have the greatest vision, the greatest brand, the greatest potential, but you need to run the business financially sound with the right resources, the right execution" (02:15).

David elaborates on the critical balance between vision and financial execution, stressing that "having the financial acumen and the operational execution ... is a really good marriage with the vision" (03:15). This marriage ensures that businesses do not waste resources and can effectively scale without compromising their foundational goals.

Optimizing Resource Allocation in Growing Brands

The conversation transitions to the challenges young and mid-market brands face in justifying and optimizing their use of funds. David Aquino points out that many bootstrap brands struggle with limited finances, leading to the risk of "running out before you've really executed the vision" (03:29). Conversely, well-funded brands may inadvertently "waste a lot of money" by not strategically investing in areas that drive growth, such as marketing and brand awareness.

Lara Schmoisman introduces the concept of evaluating the effectiveness of service providers, noting that excessive spending on consultants and external agencies can detract from essential advertising efforts. She advises brands to "financially track and summarize what's been spent and what were the objectives of the service provider" (05:28). This ensures that every dollar spent aligns with the company's growth objectives and delivers measurable outcomes.

Choosing the Right Partners and Ensuring Accountability

A significant portion of the discussion focuses on the importance of selecting the right partners and service providers. Lara Schmoisman highlights the difficulty in finding partners who are not only skilled but also invested in the brand's success. She remarks, "you have people that really feel like it's theirs and are willing to put their blood, sweat and tears into the business as much as the founder" (08:52).

David Aquino agrees, emphasizing the need for partners who are committed and have "skin in the game." He warns against hiring consultants who are only interested in offering opinions without contributing to the execution, stating, "there is a difference when you're doing product development... there is a crossover point ... who's going to actually do the work and are they willing to be held accountable" (07:16).

To mitigate these challenges, both speakers advocate for establishing clear accountability structures and fostering partnerships where all parties are aligned with the company’s long-term vision and are equally invested in its success.

Strategic Flexibility and Continuous Adjustment

The hosts stress the importance of strategic flexibility in a constantly evolving business landscape. David Aquino uses the analogy of American football, explaining that while teams may have scripted plays for the first half, it's the halftime adjustments that often determine the game's outcome. He states, "strategy is just a starting point and it's having the right partners that can adjust" (11:26).

Lara Schmoisman concurs, comparing strategy to a dynamic process that requires ongoing evaluation and modification. She emphasizes that "things aren't always going to go the way you expect... it's about being adjusted" (10:59). This mindset is crucial for brands to navigate unexpected challenges and to capitalize on emerging opportunities effectively.

Avoiding Desperation and Making Informed Decisions

A critical insight from the conversation is the pitfalls of desperation in business decision-making. Lara Schmoisman warns against "doing things in desperation," likening it to trying to swim out of water without proper technique — a futile effort (16:36). Such actions often lead to poor decisions that can derail a brand’s growth trajectory.

David Aquino echoes this sentiment, advising founders to "know the time horizon to develop" and to set clear milestones. He cautions against reactive measures and instead advocates for proactive planning with the right partners who "can assess where you are and what needs to happen to hit the next milestone" (26:11).

This approach helps prevent the kind of reactive, Hail Mary attempts that are often ineffective and can lead to unnecessary financial strain and strategic missteps.

Building a Solid Foundation with Social Proof and Strategic Positioning

The discussion also touches upon the necessity of social proof and strategic positioning for brands aiming to enter various markets, such as retail and spas. David Aquino emphasizes that "without social proof, you cannot exist as a brand" (16:42), and advises brands to ensure they have "proof of concept" before expanding into new channels.

Lara Schmoisman provides an example of Althea Skin with Dr. Shamban, highlighting how the brand’s clinical credibility allows it to seamlessly transition between professional settings and retail environments. She explains, "having a product that can be used as part of a regimen in professional locations ... and also take it home" (15:17), showcasing the importance of having a versatile product that meets the needs of multiple consumer bases.

For newer brands, she advises a thoughtful approach to positioning, ensuring that their strategies are tailored to their unique strengths and market conditions. Lara notes, "if you don't match your strategy up thoughtfully and you try to do too much, you end up doing nothing" (15:10).

Implementing Structured Accountability and Financial Planning

To maintain growth and avoid the pitfalls of desperation, Lara Schmoisman and David Aquino advocate for structured accountability and meticulous financial planning. David Aquino suggests implementing a "bi-weekly cadence" of updates and meetings to ensure that the team remains aligned and accountable to their plans (21:14).

Lara Schmoisman reinforces the importance of having a solid financial model that tracks monthly and quarterly performance against established goals. She emphasizes, "making it less emotional" by adhering to business plans and objectively measuring success (20:56).

This disciplined approach helps brands stay focused on their objectives, make informed decisions based on data, and adapt their strategies as needed to ensure sustained growth.

Conclusion and Final Thoughts

As the conversation wraps up, both Lara Schmoisman and David Aquino reiterate the importance of strategic partnerships, financial discipline, and maintaining a flexible yet focused approach to scaling a business. They highlight that successful growth is not just about expanding but doing so in a manner that is sustainable and aligned with the company’s core vision and values.

David Aquino concludes by emphasizing the value of having the right partners early on to avoid self-inflicted problems and to navigate the inevitable challenges that come with scaling (26:59). Lara Schmoisman adds that choosing partners with similar circumstances and a genuine interest in the brand's long-term success is crucial for maintaining momentum and achieving desired outcomes.

Key Takeaways

1. Operational Efficiency and Financial Acumen: Essential for balancing vision with practical execution to prevent resource wastage.

2. Strategic Partnerships: Choosing partners who are invested in the brand’s success and can adapt to changing circumstances is critical.

3. Accountability Structures: Implementing regular check-ins and clearly defined roles ensures that the team remains aligned and responsible.

4. Flexibility in Strategy: Being prepared to adjust plans based on real-time data and market feedback helps in navigating challenges effectively.

5. Avoiding Desperation: Making informed, data-driven decisions prevents the pitfalls of reactive and potentially harmful strategies.

6. Social Proof and Positioning: Building credibility through social proof and strategic positioning is vital for expanding into new markets like retail and spas.

7. Structured Financial Planning: Detailed financial tracking and objective performance measurement facilitate sustainable growth.

Notable Quotes

• David Aquino:

  • "You can have the greatest vision, the greatest brand, the greatest potential, but you need to run the business financially sound with the right resources, the right execution." (02:15)
  • "Most young brands ... never have enough money, which is always the scariest thing." (03:29)
  • "There is a difference when you're doing product development ... who's going to actually do the work and are they willing to be held accountable." (07:16)

• Lara Schmoisman:

  • "If you're not a go getter, if you're not going to be the face of your brand, your brand will fail." (00:05)
  • "Financially track and summarize what's been spent and what were the objectives of the service provider." (05:28)
  • "You don't know what's going on if you don't love it ... have a financial plan, have a business plan, have a marketing plan." (20:56)

Stay Tuned: For more insights and actionable strategies on running, growing, and scaling a successful business, tune into the next episode of Coffee N° 5 with Lara Schmoisman. Visit larashmoisman.com or check the episode notes for additional resources and information.