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Most businesses don't fail because they failed to grow. A lot of businesses actually scale themselves out of business. They grew before they were ready. People ask the wrong questions in the wrong order and then they don't have the proper data to make the decision on what they need to do.
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I don't even think people to that point of like no data, they don't even know what their sell through rate is on their own websites and like they're not keeping track of it.
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There's nothing worse in the world than getting a phone call and say you guys gotta shut off the ads. And business owners never want to do that. They want the money to continue to come in whether they can fulfill on it or not, which is wild. Welcome to Follow the Yellow Brick Road, the show where online businesses learn how to turn clicks into customers and growth into real scale. I'm your co host Emma Rainville, the wizard of ops, helping companies transform chaos into systems that actually run.
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And I'm Mitch Barham, the wizard of ads, the guy who knows how to turn paid traffic into predictable revenue. Together we break down what really drives profitable online businesses. From traffic and funnels to operations, scaling and everything behind the curtain. Because getting customers is only half the battle.
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The real magic happens when ads and operations work together. So if you want smarter traffic, stronger systems, and a clear path to scaling your business, you're in the right place. Let's follow the yellow brick road. Yo Mitch, what's up? Keeping on, keeping on, keeping on, keeping on. So today we're going to be talking about a really, really important topic and something that you and I with our agencies have dealt with and seen over and over and over again. And so here's the misconception. Most businesses don't fail because they failed to grow. A lot of businesses actually scale themselves out of business. They grew before they were ready. And so today we're going to talk about it. So match. This is something that you and I have dealt with a lot.
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A lot, a lot.
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My side from operations, your side from running ads. And there's nothing worse in the world than getting a phone call that I've had to make. By the way, like when we've been brought into other people's companies, I've had to call their ads team and say you guys got to shut off the ads. And business owners never want to do that. They want the money to continue to come in whether they can fulfill on it or not, which is wild. And so let's kind of walk through that. So there are several, like major Points and reasons why that happens. So I'd love to talk about, number one, no proper operations. I'm gonna. I know that's the one you like to usually end with because it's a big one that encompasses it all, but I think it'll lead into all the rest.
B
Oh, yeah. Snowballs and everything.
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So I'd love to just hear your take. So no ops. They have no communication channels. Marketing doesn't know how to talk to customer service. Customer service doesn't know how to talk to the admin side. No one is communicating properly. Things stall, things don't move. They start adding things like bonuses and upsells that nobody knew about. Talk to me about some of the things that you've seen.
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Well, so many. You hit so many of them right on the head. Like, communication is huge, especially from a marketing side. Like, let's say we need. I need to be able to talk to sales and know how, let's say, are the quality of the leads or the conversion rates or, you know, even online. How is that all going? Customer service is huge. How are people reacting to it?
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How many clients have you brought on? This is my favorite, by the way. How many clients have you brought it on that have talked about, I'm building a brand and I'm building something real, and we have so much impact. And then they don't even have. Have customer service. It's inexistent. They've got some va, occasionally answering emails and no telephone number. How many times have you seen that?
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More than I have fingers and toes. Like, it's all the time. Or the customer service they do have is just horrendous.
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They don't even know what the person's selling.
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Yeah. And. And they just.
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Well, when they brought me on four years ago, we were selling dog tags, and Today we have 15 supplement brands. And I don't know anything about supplements or the fda.
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Ye love it when they had like, an upsell at the end of, like, purchasing. Right. Like on an e comm and nobody knows about it.
A
Yeah.
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Or all of a sudden there's a sale and it's like we were supposed to know about it. And I'm like, wait, no. Like, you didn't tell us. Nobody told us that you were running this promo.
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Awesome. I guess. I guess I need to go out and light a fire and some incense and pray to the stars, because I'm more likely to find out that way than from you.
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I mean, they could send me an owl. Like, you've gotten.
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I got an owl yesterday. Yeah.
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Like, send me a Harry Potter owl. And I mean, I'll take that. I. I don't care. Huge. Because it just, it trickles down into everything. So there's no systems, there's no operations around communication around the website. Website changes. That one Happens all the time. I'm sure you ran into that where just all of a sudden the entire landing page and offers different. And you're like, wait, now nothing's congruent.
A
Right. Like, Right. The ads. The ads don't match or the emails don't match. The front end. I love when the front end doesn't match the back end. It's like a random upsell that has absolutely nothing, no correlation. And no. And it's just like, why did you do this? Well, the same demographic uses it. That's what they sound like to me.
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Love the accent. Love the accent. That's great. Oh, 100. It's like, oh, you're selling dog tags and then selling a motorcycle helmet. Yeah, that makes sense, right?
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The front end is a motorcycle helmet. I've actually seen things that crazy. Or one is a tactical watch, and on the back end it's a Vitality supplement. Then it's like, well, a Vitality supplement goes with working out. And a tactical watch can actually track your workouts.
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I mean.
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Okay, you have to connect the dots, sir.
B
Yeah.
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Anyway, okay, so that's number one, Ops. And we could go into that for hours. I know, but you guys get the idea. Number two I want to talk about is inventory. This one makes my tummy hurt. I'm not even kidding.
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I literally just dealt with this before I came down here.
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It's a white label product, so they should have them all. Yeah, no, no, that's not how it works.
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There's still limitations on your manufacturer, how fast they can go or literally, like, I mean, it happens all the time where we actually, through paid ads, scale you so fast you run out of inventory.
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Right.
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For weeks and months because you weren't ready.
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Custom for. Yeah. Custom formulas, custom products that you have to manufacture yourself. Those are like. That's the first question I ask people.
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Oh, yeah.
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And then what's your run time?
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Yep.
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Then what's your inventory? I never start with what's your inventory? Because it doesn't. It doesn't matter.
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It doesn't matter.
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Doesn't matter. But for white label products, the amount of people that have no idea what the ability is for their fulfillment house with the white label product is just nuts to me.
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No, they just think it's sitting on a shelf Ready to slap their label on it.
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There's a bazillion. Yeah, there's a bazillion Emma.
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And it's such an easy like one ask the place if you're white labeling. Like they'll tell you what they're, you know.
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Well, you can't ask them what they have. You don't want to do that because here's the thing, you don't know what other people are selling of that white label product if they have the white label product. So the amount of times that I hear from someone I did ask and they told me they have a hundred thousand units, we're selling a thousand a day. I didn't think it would be a problem. So what you need to know is, is there some giant out there that has this on the back end of one of their products? What is the average amount that you're selling from other people per day? Then you ask what they hold in inventory.
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You can ask them how long it takes them to manufacture.
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I would ask that after that because knowing that it takes three weeks doesn't really matter if I don't know those other two elements. How much do you sell every day? How much do you have on hand? What is your runtime? And I want to make sure that I'm checking in regularly that, that how much are you selling every day doesn't increase and I want to make sure that the runtime is being implemented when they're at half staff and half staff means you've got half of what you need for that amount of time. So if you generally are going to be out in six weeks and your runtime is three weeks, I want to know that you've started manufacturing making sure that you have double the amount of inventory you need for the time. And that just, that's just very, very important. People ask the wrong questions in the wrong order and then they don't have the proper data to make the decision on what they need to do.
B
I don't even think people to that point of like no data, they don't even know how long it takes them what their sell through rate is on their own websites.
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Correct.
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And like they're not keeping track of it.
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Right.
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I see it all the time that even in my econ businesses of the past, like I had, I mean this was before AI, before all the cool tools we have now. But like Excel spreadsheets of sales by day with projections of when we were going to run out and when I needed to order by to make sure we didn't run out.
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Right.
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And even then we had 12 to 16 week lead times.
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Right. Well, the other side to that is when you're not the one doing the fulfillment. What is the fulfillment house capable of? Is an important question that no one ever asks because it is, it's not endless. And so if they typically service a thousand clients, let's say they're a small fulfillment house, that's a thousand clients, and they're fulfilling on a thousand clients. And I all of a sudden go from selling 100 units today to 1,000 units a day, which sounds like a lot, but it actually is not. It's one ad working.
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Right.
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And now my lead time, three days just to get it out the door.
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That's wild.
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My chargeback issues are just going to go through the roof. And one chargeback issue like that will cut into 100% of your profitability if you're a small business doing, you know, under 5 million.
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Well, the thing about the customer service issues, it'll bring up too.
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And then if you have customer service, right. So generally speaking, if you don't have proper customer service and you don't have proper operations, you don't even know that your supplements didn't go out the same day or the next day. So you don't even know that your five to seven day lead times actually nine to 15 days. And, and customers, here's the thing, if you tell someone five to seven days.
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Yep.
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You really should be three to five days, because as soon as they hit the five days, you're. You already are going to create issues. The first time customer service doesn't answer the phone or answer an email in two minutes, the bank answers the phone in two seconds. And now most banking systems, I can charge back on my app. I don't have to talk to anybody.
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Drug not as described didn't arrive.
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That's by the way, the best way to charge anything back is product not as described. You can't argue with that. Always when you can't argue with that.
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Interrupt this podcast to ask you to do a huge favor for us.
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Huge.
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We drop so much knowledge to help you guys, but you're not going to be notified unless you hit that subscribe and the notification bell to be notified the minute we drop a new episode to help you grow and scale your business.
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Because you never know when we're going to be taken off YouTube.
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You have no idea. Like, I could all of a sudden be like Liam Neeson with a particular set of skills.
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Also, we read every single comment.
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So leave a question or comment we will reply to it and maybe we'll even talk about it in a upcoming episode.
A
Probably. If you troll us, we will definitely talk about you in an upcoming episode. Thanks. Okay, so inventory. What's number three? Cash flow. So if I am running an amex that has $50,000 worth of spend, let's say, and my ads start working and I increase my ads and my $50,000 turns into $100,000 a week, I have to be able to pay that Amex down or be able to come up with some way to pay for those ads. It isn't just about, hey Mitch, you're my ad guy. I'm not going to be able to pay you for 30 days. Can we have a net 30? A lot of people love to create that and that's fine. And I know you do that. You do a monthly retainer where you'll get paid at, you know, at the top of the month, at the end of the month. And that's predictable and easy. But what's not predictable and easy is when you're scaling. And so we scaled the company in 24 months from 15 million to 100 million and it was a monster. It was incredible. And I probably could have done it in eight months, but we had to be careful with the money. We had a net 3 with the media buyer. They were in Israel and there was no negotiating that. And I don't blame them. Because of the amount of people that they scaled out of business.
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Oh yeah, 100%.
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And so, and that's a real thing. And so then I had to have enough capital to pay for the running of the ads on Facebook, on Instagram. We weren't on TikTok at the beginning, we were at the end. But we were on Reddit, we were on Google Ads, we were on Newsmax.
B
Oh wow.
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Yeah, we ran all over the place. But I had to pay for all of that.
B
Yeah, that's yeah.
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New product development. Because when you're scaling a company, it's a matter of time before you run out of the ability. There's a lot you can do there to make that product great for years and years and years. But it some point you are going to need to diversify into multiple products because when you get into about the 20 million dollar range, if you don't have more than two products, one fizzling out puts you out of business. If something goes wrong and you have no idea what's going to happen. I. E. Ozempic. You had hundred million dollar giant fitness companies almost overnight.
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Yeah.
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Go to 10 and 15 million dollar fitness companies because now I can take a shot and still eat pizza. I don't care about your workouts, I don't care about your nutrition plans. I care about the fact. And something like 70% of Americans between the ages of 40 and 60 have tried some type of GLP1 at this point. It's something absolutely. It's something absolutely astronomical. So you don't know. I could have argued for hours six or seven years ago that fitness is always going to be a thing. Fitness companies are never going to stop being something that people seek after. And I would be dead wrong. So money, Money, Yeah.
B
That is absolutely huge. And there's so many. You hit on every single freaking thing that I've had to deal with in aspects and like insert myself into a company to suddenly be the CMO and CFO to help them navigate the money side of things. Because like nobody knows. Just for the ad spend. It's seemingly forgotten that, oh, I have to still pay that. Yeah. And it was even worse. You remember when Facebook gave actual third net 30 day terms?
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Yes.
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And it was really net 60.
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Yes.
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Because you got your bill at the end of the month, then at 30
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days and then you had 30 days to pay.
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And I'd always have to remind clients, hey, you still have this.
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And sometimes it was actually like 62 days on the 31 month days. Right, right.
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But to be like, hey, you still have that $110,000 to that you have
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to pay for the actual app. At one point we were doing with one of the companies I was working with. This is a $500 million company. We were doing about a million. A million to a month in ad costs. And like to keep up with that is actually really challenging. Even, even at a $500 million, you wouldn't think that $12 million, it was more like, I think it was like 15, 8 was what we spent a year in ad costs. Just our ad. Not in advertising costs, just our ads actually running of the ads. Just the traffic side. And it was so challenging to keep up. We had a full time person just for that.
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Oh, I believe it.
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Yeah.
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They have to pay that down all the time and make sure it's getting paid because Facebook will cut you like all, all the platforms will cut you right off if you don't pay that bill.
A
Oh my goodness.
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Even now, like they don't even do.
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Good luck calling Facebook.
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It's non existent.
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Non existent. Yeah, yeah.
B
It doesn't exist anymore. Like you cannot call anybody.
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No.
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They call you to tell you crappy advice, but cash flow is huge. And when I start to work with people, that's a huge question is it's like, how's your cash flow? How's your budgeting? You know, how's your inventory? How is your projections? How's all that? Because it. Again, I literally dealt with this on the airplane down. Coming down here was like, you guys are doing great. We've doubled their sales in a month. And he's like, but now we're going to run out of our top sellers.
A
Cool.
B
You complained a couple of weeks ago it wasn't good enough. And then we really kicked it in the high gear, getting you a, you know, five to six times return. And now we're going to have to back off. That sucks to lose all that momentum.
A
Yep.
B
Makes me Sad.
A
There's actually 100 more, but last one we're going to talk about is staff. Staff is a tough one. I've seen companies that. Because when you start scaling, things start breaking. When things start breaking, it seems. Seems like the thing to do is throw people at it. A lot of us do it. A lot of us do it. And so let me go to my local bar and drown my sorrows. But also, my waitress is really awesome, and maybe she can be my new head of customer service. She's so nice, right? My bartender. Oh, my God, I loved talking to him. He can start handling my chargebacks right now. The guy at the table sitting next to me who's a freelance photographer. Oh, my God. If I could have someone film me.
B
Yeah. Now you got vlogs, and they can take pictures of your products.
A
Wow. It's gonna be great.
B
Yeah.
A
What happens is you end up hiring a bunch of people where you didn't create processes, and then those people, the next guy who's gonna pay them a dollar more an hour, they're gonna move on or they're gonna find something exciting that they want to work on, or they're entrepreneurial or. Or they're a bartender and have a drinking problem and don't show up half the time. So you just, you know, Boris. No, I'm just kidding. I'm just kidding. But. But in all seriousness, like, staff is a huge issue in today's world. We've actually created together a product called AI Workforce Lab, where we help people build agents to run their businesses while they sleep. And that's real. That's not. That's not fake. That's very real. And it's a. It's a phenomenal thing, but it allows us to really grow our staff. The thing is, is that agents need to be thought through and each agent that you build should have one job only. And that one job needs to actually be looked at from time to time on how they're doing it because the world is changing. So it, it also there's a lot of factors involved. So staff is a big, big, big roadblock, a ceiling that you'll hit very, very quickly. And when you go from a small company to a large company, which is we're seeing more and more and more with a automations and robotics, we're seeing people like hit the ground running, being able to have enough people on hand, I. E. Or agents that can grow your business.
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Literal agent armies out there. And so yeah, I always loved it when I knew people that would hire based on hopes and dreams like, oh, we're gonna. But again, we need to get, to get that person in place. And then it never really happened. But like now you can have that
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agent ready, ready and Right. So I love that you just brought this up. This is such a huge issue. I remember I worked with this guy and he was actually really, really smart. He was psychotic, absolutely psychotic. But the, the best ones are, I survived him. I literally say this all the time. He also taught me more than anyone I've ever, ever worked with, ever. It was a really hard three years of my life. A really hard three years of my life. But man, I learned so much. The one thing that I argued with him all the time was he always wanted to hire someone for the company we were trying to build in three years, for five years. And I would try and tell him that person doesn't work over here. Over here is gritty. Over here is get your hands dirty. Over here is roll up your sleeves and get shit done. This guy is a leader, a delegator, a mentor, a strategic thinker, not a doer. We cannot hire him for here. We're going to pay so much money and by the time we get to here, he is underperformed so much you hate him and don't trust him anymore. We've got to hire for today. But like you said, the beauty of agents are I can build the agent that I need for today and the agent that I can just literally plug in when I'm ready because we're there long before. I've already got him trained, I've already got him ready, I've got him laying in wait and there's no concern that another company is going to scoop him up.
B
That yeah, I have, I've yet to see that happen.
A
Right?
B
We'll see somebody poach another
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eventually. Yeah. That's crazy, right? That's going to be fun. We need to start thinking about that. Actually, that's it for today's episode of Follow the Yellow Brick Road, where the wizard of Ads and the wizard of Ops break down what it really takes to build and scale a profitable online business.
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If you found this episode useful, make sure to go to follow the yellow brickroad podcast.com to check out the Hidden Control Chamber for all kinds of awesome freebies, guides, checklists, everything that we do to grow businesses.
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So hop over there and grab all those free resources in the Hidden Control chamber. And remember, getting traffic is one thing. Turning it into customers that build the systems to support support real growth. That's where the real magic happens. Until next time, keep following the Yellow Brick Road.
Podcast: Follow The Yellow Brick Road
Hosts: Emma Rainville & Mitch Barham
Date: May 5, 2026
In this episode, Emma and Mitch dissect why so many online businesses collapse just as they’re accelerating—a phenomenon they call "scaling themselves out of business." Through real-world agency experience, the duo reveals four critical and all-too-common failure points that fast-growing businesses face on their path from clicks to customers to true scale. With Emma representing operations ("Wizard of Ops") and Mitch representing marketing and acquisition ("Wizard of Ads"), they blend both sides of the growth equation for actionable, often tough-love advice.
Timestamp: [02:01] – [06:01]
Summary:
Businesses often collapse not from a failure to generate sales, but from chaos inside their operations. Departments don’t talk to each other, new offers are launched with no coordination, and customer service is an afterthought.
Notable Moments & Quotes:
Memorable Exchange:
Timestamp: [06:02] – [11:02]
Summary:
Explosive growth often leads to dangerous inventory shortages—especially when running ads. Too many founders don’t know their sell-through rates, lead times, or what their fulfillment partners can realistically deliver, particularly with white-label products.
Notable Moments & Quotes:
Operational Advice:
Consequences:
Timestamp: [11:32] – [16:56]
Summary:
Scaling amplifies cash flow risks, especially with media spend. Without close monitoring and discipline, businesses run out of money—fast—often with ad bills coming due before profits are realized.
Notable Moments & Quotes:
Strategic Point:
Timestamp: [16:56] – [21:09]
Summary:
Scaling often triggers the instinct to overhire—hastily adding underqualified (often unrelated) staff just to “cover the gaps.” Without defined roles and processes, this leads to chaos, attrition, and further breakdowns.
Notable Moments & Quotes:
Emma:
“Getting traffic is one thing. Turning it into customers that build the systems to support real growth. That's where the real magic happens.” [21:37]
For resources referenced in the episode, visit the Hidden Control Chamber at followtheyellowbrickroadpodcast.com.