TMBA 710: The Wheel of Despair and the Paradox of Growth

The Importance of Finding the Next Million in Revenue

00:00 - 36:16

• There's this idea that if everybody goes to this meeting and everybody does this and everybody does that, the implication is that those are the questions worth answering in your business.
• The question you need to answer is where's the next million in revenue coming from?
• The bravery, excitement, and fear come from not knowing all the time and figuring it out as a founder.
• Being in Barcelona for the summer brings a vibrant community of founders together.
• The opportunity to build relationships with people in person is the best part of being there.
• The hosts of the podcast share their experiences with negative Airbnb reviews and discuss whether leaving dirty dishes or not taking out the trash is disrespectful.
• Trash in Europe is easily accessible with trash cans on every corner.
• Airbnb has become more challenging and friction-filled due to service fees, cleaning issues, and uncertainty about rules.
• Individuals running Airbnb businesses often act as if it's their personal home when convenient, causing hesitation in leaving negative reviews.
• The speaker had a negative experience with a gross bathroom but left the response privately.
• The speaker encourages leaving negative reviews publicly for Airbnb businesses that are clearly operating as businesses.
• Location independence is becoming less of a big deal for digital entrepreneurs as it has become more common and even some traditional jobs offer remote work options.
• The speaker suggests moving past the focus on location independence and exploring new goals or accomplishments.
• Wealthy people have always had location independence, but the focus was on making the first dollars earned location independent through various business models like affiliate marketing or remote agencies.
• Wealthy people are becoming more location independent, leading to the rise of location-independent businesses.
• Younger generations are more inclined to start online businesses and view them as synonymous with traditional businesses.
• There is a growing appetite for owning location-dependent businesses that can be made location independent for owners and managers.
• Many local businesses are putting their back offices in other countries to increase margins and retiree investors are finding this approach attractive.
• Remote work has become more common, even in tech communities that were previously highly location dependent.
• Location independence is now seen as an attribute of cash flow rather than an identity.
• The level of location independence needed depends on the type of business being run.
• The problem in many businesses is that most of the direction, information, strategy, and leadership comes from the CEO or founder.
• Employees aren't talking with each other and the information isn't moving freely within the organization.
• This hub and spoke model makes businesses reliant on the founder and prevents scalability.
• At eight figures, businesses start hiring actual professionals who can run their skill set on the platform.
• Many six and seven-figure companies are founder dependent, which hinders growth and effectiveness.
• One way to address this problem is through tempos or cadences that start with a clear strategic vision document.
• Having an elegant champagne waterfall approach where strategy cascades down into different cadences can help align teams and ensure everyone understands priorities.
• Key tempos include executive team meetings quarterly, team scorecards quarterly, monthly business reviews, and weekly team calls.
• Implementing regular check-ins with finance team to ensure strategic aims are being met
• Holding weekly team calls to review key metrics and strategic aims
• Conducting daily stand-up calls to keep information flowing and prevent bottlenecks
• The growth paradox: as revenue increases, founders need to focus on growing the business rather than meetings
• Founders are often responsible for growth until around $5 million in revenue
• Building a sales team or marketing channels may be necessary for the next phase of growth
• Being brave and taking leaps of bravery are essential for scaling the business
• Recognizing that the responsibility for growth lies with the founder in most cases
• Expanding into new markets or pricing tiers may require the founder's initiative
• Operational velocity alone is not often a sufficient growth strategy; aggressive marketing and sales are usually needed
• At the eight-figure level, there is a trend of hiring experts from larger companies to drive growth strategies.
• Founders of six and seven-figure companies are uniquely suited to drive growth strategies themselves.
• However, some founders may prefer to focus on being craftsmen in their business if they can afford it.
• Smaller companies are more fragile and susceptible to external factors like COVID or industry changes.
• Advisors can help answer the question of how to grow, not marketing agencies.
• The key question for founders is where the next million in revenue will come from.
• It takes bravery and vulnerability to face the uncertainty of finding that next growth strategy.
• Lack of information flow within a company can hinder its ability to operate effectively.
• Running the business itself often interferes with a founder's responsibility of finding the next growth strategy.