In this episode, Josh interviews Yoni Kozminski, co-founder of South Col, Escala and Multiply Mii, about building scalable businesses to increase valuation multiples at exit. Yoni shares strategies for developing strong operating systems, clear organizational structures, and empowering leadership teams. They discuss the org chart of a $20 million e-commerce business, incremental team building, and the importance of structured meetings like EOS Level 10. Yoni also highlights the role of project management tools such as ClickUp for SOPs and workflow management, offering actionable insights for entrepreneurs aiming to scale and maximize business value.

Chapters:

The Value of Operating Systems and Organizational Structure (00:00:00)
Yoni explains why strong systems and structure increase business value and exit multiples.

Building Leverage and Empowering Leadership (00:00:36)
Discussion on creating leverage by empowering teams and implementing clear systems for business growth.

Incremental Team Building and Org Chart Planning (00:02:23)
Advice on hiring incrementally based on KPIs and performance, with an example org chart for a growing business.

Top-Down vs. Bottom-Up Hiring Approaches (00:04:24)
Comparison of hiring strategies and the importance of hiring subject matter experts to build out teams.

Org Chart Walkthrough: Roles and Reporting Lines (00:05:28)
Detailed breakdown of a $20M e-commerce business org chart, including management structure and reporting lines.

Creative and Siloed Team Structures (00:06:36)
How to structure creative teams for efficiency, and the pros and cons of siloed versus shared resources.

Management Cadence and Preventing Silos (00:07:46)
Importance of management reporting cadence and strategies to avoid siloed functions within teams.

Level 10 Meetings and EOS Traction (00:08:47)
Introduction to the Level 10 meeting from EOS, its value for alignment, and how it supports scaling.

Operations, Launch, Brand Management, and Supply Chain (00:10:59)
Breakdown of operations function, including launch, brand management, supply chain, and their respective team structures.

Shopify/DTC vs. Amazon Team Distinctions (00:13:17)
Explanation of separate teams for Shopify/DTC and Amazon, and the use of external resources for specialized tasks.

HR and Admin Functions in Scaling (00:14:26)
The growing importance of HR and admin roles as the business scales.

Technology for Scalability: Project Management Tools (00:15:18)
Emphasis on the critical role of project management tools like ClickUp for SOPs, training, and workflow management.

Less is More: Focusing on Essential Tech (00:16:46)
Advice to focus on essential technology that moves the needle, rather than adopting every available tool.

Links and Mentions:

Tools and Websites
"YouTube": "00:03:32"
"EOS Traction": "00:08:47"
"ClickUp": "00:15:41"

Concepts
"Standard Operating Procedures (SOPs)": "00:01:08"
"The 80/20 Principle (Pareto Principle)": "00:02:09"
"Level 10 Meeting": "00:09:08"

Transcript:

Josh 00:00:00 Today I am super excited to introduce you all to Yoni Kozminski. Yoni is the co-founder of South Col, Escala and Multiply Mii. Yoni, you talked about seeing an opportunity to, increase the multiple when it comes time for exit because of the processes and team that you've built into a business. So why is it so important to focus on the operating system and organizational structure of a business in order to increase? And how does that increase the multiple that you will get? Yeah. Great question.

Yoni 00:00:36 Josh. So the way I would approach this, the way that I look at it, taking a step back before we get into the nitty gritty details here, is that what any potential acquirer is looking for or what all of us really are looking for in life, when when you really strip it back is more time, more money and more freedom. And if you can build leverage where you are not a critical part in the delivery and execution of what is happening inside of your business, and then that is a high value form of leverage.

Yoni 00:01:08 And so when you sort of bring that back into what SOPs, standard operating procedures, and I would say like more importantly, systems are inside of the business. If you can effectively achieve that in in a meaningful way, then ultimately, you know, I would say like, I'm not the poster child, but but I'm a I'm a product of what I preach in that I'm able to, you know, be involved in three businesses that are each growing at different rates with very different business models attached to them. And that's because we have really empowered the leadership team. We have real clear systems. And so coming back to it for an e-commerce business, the only way for you to grow is to get out of your own way. And so the reality is building systems, building processes, and empowering people to make the decisions. Most of the decisions. You know the predator principle. 80-20. And getting you out of your own way becomes fundamental in your ability to grow your business.

Josh 00:02:09 Here's what some different businesses in their organizational or their yeah, their or charts kind of look like for the audience just to spark some ideas.

Josh 00:02:18 And as they start to plan out, hey, how do I build up my team and and really scale?

Yoni 00:02:23 Yeah, absolutely. Well, actually, before we even dive into that and I'll share as much as I can, you know, there's only a certain number of slides, decks that I have where we've wiped out, like any client references and, and things like that. So I'll share gladly what I can. But you brought up a really important point, Josh, and I think this is where people get things are often really wrong, and I'm guilty of it myself. probably more times than I would care to admit. But you don't want to hire everyone at once, and you want to build incrementally based on the performance and the KPIs. And, you know, you really you keep that up perfectly, because what we're looking at right now on the screen is an org chart back in 2020 of a business that was looking to grow over the course of 2021 into a whole number of proposed roles here.

Yoni 00:03:16 So on the screen you can see existing roles, outsource roles, proposed roles and shared existing resources. So geez, I mean, I'd have to like sit here and list out every single person. I would just say, check out the YouTube and you can actually see.

Josh 00:03:32 Let's yeah, let's go through just yeah, high level. I mean, even just talking through the org chart, I think that the listeners would find this very, very valuable because again, that was the number one question at Camp Comm is what is your team look like? What is your team look like? so let's let's dive in and spend the time here. Yoni.

Yoni 00:03:51 Okay. I'm happy to do that. What I'll also say, and, you know, putting my multiply me hiring hat on, I turn so many people away from working with us as a business. And, you know, while that's not great for our business revenue and profitability growth, I think it's a smart move because if you haven't done this before, if you don't have the right experience, exposure, mentors the right people around you that you can turn to, you're likely going to get it wrong.

Yoni 00:04:24 So if you're building out a function or a team for the first time and you don't hire, you know, I like to hire a top down, whereby I'm loo...

Throwback: The Art of Incremental Hiring - Building Your Dream Team Without the Headaches