← Success Story with Scott D. Clary
Success Story with Scott D. Clary
Lessons - The Playbook to Building Billion Dollar Businesses | Sharran Srivatsaa - President of Real (NASDAQ: REAX)
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- [00:00]
Podcast Host
Success story is a Square partner. Now, your favorite neighborhood spots run on Square. You know, I was just at Panther Coffee here in Miami last week. And beyond the incredible cortado, what struck me was watching them seamlessly handle the morning rush. The barista mentioned they've been using Square to manage everything from inventory to building their loyal customer base. It's so much more than just that little white card reader that we all recognize. Square knows that local businesses can be big businesses. And as things get more complex, Square meets you at every opportunity. So whether or not you're expanding, expanding to new locations, building a loyal following, even covering cash flow gaps, Squares powering all the behind the scenes stuff that matters. They knock out today's to dos and they unlock tomorrow's what ifs. If you're ready to see how Square can transform your business, go to square.comgo/success to learn more. That's square.com go success square. Meet you there. In this Lessons episode, uncover the framework that enables businesses to scale far beyond incremental growth. Discover why singularity of focus eliminates distractions and drives exponential results. Understand how a strong cadence of accountability transforms performance and culture. And explore how building repeatable processes creates sustainable momentum for long term success.
- [01:27]
Interviewer
Maybe I'm just being pessimistic that it's hard to replicate in every single circumstance, but you did it and you, you probably worked with other CEOs to do it too. So is that, is that, you know, you exit that now? Is that what you're. Because I want to, I want to understand how you did it and I want to understand your process. And you know, at a high level we only have a few minutes to do this. But so, so after that. Is this when you started advising? Is this when Kingston Lane came to be? Is that after the real estate transaction?
- [01:54]
Guest Expert
Yeah, yeah, yeah. So. So totally. So that there's two parts of this puzzle, right? One, well, let's actually break down, you know, kind of what is the formula for 10x in the business? So we'll give it to everybody. So that's really good. But very briefly I'll touch on what I do now. So we three things. Number one is I have active operating businesses that I run and there are across the board, some are in the real estate business, some are not. That's. But they're all part of what is part two, which is my partner and I have a fund. So we have a private fund that we invest in businesses. Some we operate, some we don't, which means they have professional operators. And so we are investors, advisors to those. And most of my time is spent either operating businesses that we own or that we're investors in. That's because that way, if I, Scott, you are one of our portfolio company CEOs, I have a vested interest in making sure that the business grows 5, 10, 15x and you succeed. I have a vested interest in that. Now. Outside of that, I probably spend a hand a little bit of time. I probably have 68 founders, CEOs at any given time. And the average business size is roughly 25 to 50 million. And the goal for that is to get them to 250 to 500 million over three to five years. So that's the goal. So I never take on more than 6 to 8 at any given time. And most of these folks, you know, it's a, it's how do you break the grass glass ceiling of how, how do I get past this? So it's a cool, very cool relationship. All my mentoring relationships all have an equity stake in it, which makes sure that I'm aligned with that growth. Because most operators are like, hey, I'm doing 20 million, you get me to 200, you can gladly have the 10% because that's what we started off in the first place. So that's no problem at all. Now let's talk about the formula for how you actually, you know, 10x.
- [03:39]
Interviewer
Yeah. What's your playbook? That's right.
- [03:42]
Guest Expert
Yeah. Here's a playbook on how you 10x something. Right. So there's a, it's unfair to say that. Oh yeah, this will work for anything. Right. But, but there's a, there's a, I call it a heuristic. There's, it's a guideline, like, go with the framework. Right, Framework. There are three parts to it. Part number one is singularity of focus. The. If you think that you can add 1700 skews, 18 business lines and all to get that result, you're crazy. That stuff does not work. Like, after you've achieved the 10x, then you can add more to it. But the what drives the bus is, hey, I'm going to turn my focus to one big bone. I'm going to wake up and I'm going to gnaw on this big bone. I'm going to ask everybody in my organization to figure out, what is this big bone that they can gnaw? And the question becomes for them, hey, I'm waking up in the morning, am I doing something that's helping me with this big bone or it's not so the filter becomes very clear when everyone's working on different initiatives and different divisions. Yeah, you start to have some accretive revenue on a lot of this stuff. But the singular vision is never driven forward. So I'll give you a very simple example. When we had, we decided in on our real estate businesses growth that we would drive everything by people. So it was all, it was straight up everything related to acquiring great sales talent. And that sales talent drove our business. And so everyone was like, well, yeah, we should train productive people. We should have sales skills. And I'm like, I don't care about any of this. Our goal is to go hire and recruit and retain the best salespeople possible. And that's really hard to do in a competitive environment. So our singularity of focus was if we got to 600 plus really productive salespeople doing what they did, they would drive our business. So that was our singularity of focus. Now every time I did anything, my team would say, sean, why are you driving to San Diego? Is this gonna help us 10x? Like, they would ask me that question. So that's a good team. Yes, it's really good. Because then I would ask them the same question, say, like, hey, why are we, why are we spending $3 million on this advertising campaign? Does it help us get there? Right. So the filter is really important. So number one, singularity of focus. And the problem with the singularity of focus is as an operator, you and I, I call it that when you're inside the bottle, it's hard to read the label. You think 17 things are important. But as an advisor, when I'm looking from the outside, I can tell you 16 of those are noise. Yes, it may drop revenue a little bit, but it's really hard to do by yourself. Right? So that's. So singularity focus is number one. Number two, call it the cadence of accountability. Accountability is an interesting concept, right? Like, hey, if you want to, if you want to lose weight, what do you do?
- [06:15]
Interviewer
You get an accountability coach. You got to get that first picture.
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Guest Expert
Of your food every single meal that you eat.
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Interviewer
Or that's true. Yeah, you have a. Yeah, you need.
- [06:22]
Guest Expert
Some form of accountability, right? So I'll tell you, I'll actually give you the practical accountability that we had. So I was like, hey, we need to go recruit some really badass salespeople. And normally what I would say is, hey, we'd have this check in call every Friday to see where our recruiters are at getting these great salespeople. And we made kind of Bumping along progress. And I was like, well, this is stupid. We're not growing as fast as we need. So, Scott, this is exactly what we did. At 9:45 every single morning, we had 11, what we call sales managers. Their job was to go recruit great data salespeople. At 9:45 every single morning, five days a week. We got on a phone call and the 11 people went in order. It was like, Jim, Jack, Scott, Johnny, same order every single day. And they would reel out two numbers. They would reel out. They would say, 2, 0, 1, 5, 8, 7, whatever it was, Right? The first number was, how many appointments did I have yesterday? And the second number was how many appointments do I have scheduled today? So think about that for a second. I say 2, 0. Then you go. You say 3, 1. Then the next person goes and says, 0, 0. How do you think that person feels right now? Terrible.
- [07:33]
Interviewer
I'll tell you, all three of those people should feel terrible because they should be moving in the opposite direction. I hear what you're saying. Yeah, yeah.
- [07:39]
Guest Expert
Nobody. What we saw is Nobody that said 00 ever turned up the next day and had a 00 again.
- [07:46]
Interviewer
Right. Motivated.
- [07:49]
Guest Expert
And you also realize that if somebody could do it, also gives you a perspective of what is possible. If someone said, seven, three, I had seven appointments yesterday and three today. That's crazy. Someone that says zero, nine, you know that, hey, I was bus, whatever. And Scott, all we did was this. There was no judgment. It was a, you wake up 9:45, it went in order. And if someone missed the call, I paused for 10 seconds to let everybody know that that spot was not taken that day. I mean, it got very, very clear. And it sounds militant, but that was the single most important thing that drove the accountability. Because we knew that appointments drive people. We knew that because without meeting with people, you're not hiring anybody. So our cadence of accountability was this 15 minute chunk that we installed in our business that literally changed the nature of our entire business. Right? So, number one, singularity focus. Number two, cadence of accountability. Now, in the different companies that I work with, that accountability is a different thing. It just so happens that in our business, that was the 15 minute chunk that we came up with. Number three, good process. And good process alone drives good results. So a lot of times what we say is, I'll figure it out later is what the average entrepreneur says. Right. And that's why they'll like. Doubling your business is actually easy. You can tighten a few screws, get a few bowls, sell and make a bunch of extra Calls, you know, offer a bunch of discounts and you can double your business. But when you do that, it's very hard to sustain a doubling because you hacked your way to doubling it and everything starts to break. So the one thing that we realized from a process perspective was when a new salesperson came in because we drove our business with people that we needed to have like a badass onboarding program. And that's all we focused on because we said if Scott comes on and he has a delightful onboarding process, he never leaves and continues to be happy producing results for us. So I literally shut down my focus on anything else and all I worked on was how do I have the most amazing. Like we brought in a consultant from Four Seasons and you're, you know, is he sharp? Where Four Seasons was born was Toronto. Um, we brought in a consultant from Four Seasons to say, how do we design this delightful onboarding process? And that was a process for us. So for us it was how do we get to, you know, 600 plus people selling $3.4 billion a year? How do we do this 15 minute call every single day? And how do we have an insane onboarding process? Those three things were this very specific, three things that actually drove our 10x growth.
- [10:12]
Interviewer
I love it. And it makes sense because now you've taken that, you've taken that mantra, that ideology, that, that, that, that one bone you have to gnaw on and, and then you just, you have that one bone and each piece that will actually lead back to your main high level KPI bone, whatever. How, now I'm curious. How do you, how do you figure out what that bone is as an entrepreneur who's stuck in the bottle, Right?
- [10:34]
Guest Expert
Yeah. So, so it's a, it's a series of questions and I think that's the process that's a little difficult. Right? And so I'll give you an, I'll give you an, I'll give you an example. I was driving to a con, I drove to a conference that I went to. There was a hundred entrepreneurs invited to this conference. I'd never had a. I, I was busy run operating my business at this time. I get to this conference, I sit down, I'm put on, I put on my hoodie, I'm sitting in the back. I'm like, hey, I can't believe I'm here. I committed to being here. It's a whole day, it's wasting my day. That's what most entrepreneurs, when most entrepreneurs go to conferences, there's like, I can't Believe I'm here, right? And I'm sitting there, it's past lunch, and I'm like, I wasted this morning. I'm here. I might as well listen. This. This 5 foot 4 lady shows up on stage. She starts talking, and I'm like, oh, I should probably pay attention. And Scott, she started talking to me about leadership, building a business, et cetera. And I started writing some notes. And as she was talking, a couple of questions came to mind. So I was almost going to raise my hand proverbially to ask the question, but I felt like as soon as I asked the question, she naturally answered it in my head, like an eerie experience, right? And then I would take more notes, I would have another question, and she would magically answer the next question. I was like, that's weird. Like, how does she know what I'm thinking? That's weird. And she did this for a whole hour. And I was driving home that day, and I'm like, this is magical. Call my dad. I'm like, dad, you won't believe what happened. And just as a, you know, I call my dad because I called my dad, and he says, oh, well, you should hire her. And I'm like, to do what? Well, if she can answer all your questions even before you're thinking about them, maybe she can help you with your business, your life, whatever. I was like, well, I don't know what I would do. And so he goes, well, write her an email. And my dad was very good about, you know, scripting, good about language patterns. And he said, I'll give you the phrasing. He told me, he said, sharon, write her this email that says, hey, so. And so I met you at this event and you were amazing. And here was the phrasing that he used. He says, I would like to offer you blank. And he said, come up with a number. A dollar amount that was painful to you, but still large enough. And at that point in my career, when I was 29 years old, I'll pick the number. It was $10,000, right? And I said, I would like to offer you $10,000 as a symbol of my seriousness. That was the line, right? All I'm looking for is for you to prioritize some email communication for me. And that's it. I don't need any structured calls. I don't need any meetings or anything. And I was like, huh? And I was like, dad, really? He goes, yeah. Would you pay $10,000 for her to read your mind? I was like, of course. So I wrote her that Email within two minutes, Scott. She responds to me and says, is this a joke? I said no. And then I said, no, absolutely. I'm dead serious. She responds. She's like, here are wiring instructions. I was like, awesome. I wired the money and she became my first coach. Literally. She was instrumental in helping me come up with this 10x plan, put the singularity of focus together. I had none of these pieces then. And she was the one that told me, hey, when you're inside the bottle, it's hard to read the label. So while I was discussing all the things that I was working on, she was the one that pulled out that, hey, you're working on operations and dropping money at the bottom line, but you're telling me that the people are the ones that are driving the growth. Let's think about a future where if it were only the people that you're focused on, what would happen to your organization? The coach asked the right question and coach is an interesting thing. Coach, mentor, advisor. I try to call myself I'm my clients as private advisor. Because for a 200 and an entrepreneur running a 50 million dollar business, dropping 20 million dollars to the bottom line doesn't need a coach per se. Because they are like, hey, they just need somebody to talk to who is non judgmental, who has been there and done that, right? So whatever my clients are going through right now, I have been there. Like, I know, I know that they're thinking about wanting a private jet because their friend has a private jet. I know it. And I told him I, I've been on enough private jets. You don't want one, you don't want one. And I'll tell you why. You can charter one all day. Like, you may think this is a snooty thing to talk about, but that's what goes through their minds when they hit a level of success. Hey, should I have the jet, Should I have the car, Should I have the house, Should I have the bank balance? Should I have the second vacation home? Should I bonus my employee? Should I have an operator? Like that's what they're thinking about. And when you've already been there, I can kind of wade through that stuff. And because that's all noise, because at the end of the day it is, hey, here's a singularity of focus, here's a cadence of accountability and here's a good process, right? So it's a discovery process. There's no like formula for it to come out. But I've seen enough businesses, service, product, manufacturing, whatever that after like A couple of conversations, I can at least pick out the candidates pretty quickly of what is going to drive growth. And then you build a hypothesis around saying, hey Scott, if you focused on this division only, will it change your business? Well, let's figure it out. And then that makes for a really good kind of conversation.
- [15:23]
Podcast Host
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