Latest / The Start, Scale & Succeed Podcast / Should You Really Build a Team with Scott Ritzheimer (stages 2,3) - Ep. 409

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Should You Really Build a Team with Scott Ritzheimer (stages 2,3) - Ep. 409 · The Start, Scale & Succeed Podcast

0:01
Scott Ritzheimer: Scott, hello, hello, and welcome, welcome once
0:04
again to the Start Scale and Succeed podcast, the only
0:07
podcast that grows with you through all seven levels of your
0:10
journey as a founder. I'm your host, Scott Ritzheimer, and
0:14
today is part three of our Should You Really series, where
0:20
we explore how you can find the best level for you, not for your
0:26
friend, not for the internet, not for your mom, just for you.
0:31
What's the right level? What's the best level for you to get to
0:36
and thrive in? Now, if you didn't catch the first episode,
0:40
you probably want to give that a listener watch, because we lay
0:44
some foundation for what we're talking about in the series. You
0:47
can skip the second in the series, because each of the last
0:51
six, including this one, is for one level founders who are
0:56
thinking about going to the next level and trying to figure out
0:58
if that's right for them. So that's the series today. Today
1:05
we're going after what could be one of the most expensive
1:10
assumptions out there, and that is this whole idea that the only
1:15
way up is to hire a team, and again, there's some real big
1:21
cultural undercurrents here that we've been in for so long we
1:26
don't really even recognize how big a role they play in our
1:29
decision making, and in this case the, the, the
1:34
condescension, if you will, is that somehow staying solo is
1:43
playing small or settling for less, or in some way, shape, or
1:50
form just bad, and that could be true, but it could also not be
1:56
true, because there are plenty, and I mean plenty of
2:03
solopreneurs out there, and I use solopreneur a little
2:07
loosely, I'm talking about one person, maybe a couple helpers,
2:11
less than a handful, so that's our definition of solopreneur
2:15
for this this episode, I can point to many who make seven
2:22
figures. I mean, we can look to the sports world and find people
2:27
who make eight and nine figures, and, and, and the sports world's
2:34
particularly helpful because it can show us the power of this
2:38
level. Fundamentally, you're LeBrons of the world, or your
2:42
Federers of the world, they make money in other areas and other
2:47
enterprises, and probably function at other levels in
2:50
their own founders' journey, but the core to it all isn't that
2:56
they're a great CEO, the core to it is that they're fantastic at
3:00
what it is that they do, the sport that they play, and the
3:02
same can be true in just about every domain. And one of the
3:08
lies that we believe is that by getting to later levels, in this
3:11
case moving to level three by hiring a team, we think that we
3:15
can make more money doing that, and while it might be true that
3:18
higher revenue levels are possible when you look at what
3:23
the later levels cost, both organizationally and
3:27
individually. It's a lot harder to argue that you'll make any
3:32
more in those levels. So, making more money is not a good reason
3:37
to try and get to a later level. I can again point to a whole lot
3:42
of people who are making way more in level two because
3:46
they've optimized for level two than other folks in levels 345,
3:55
a lot more, and and so we just need to throw the smallness out.
4:03
We need to throw the make more money out, and we need to really
4:07
figure out what the what the real reason is for why you would
4:11
choose a later level or why you would stay in this level. And if
4:14
it's not money, what is it? Well, what I've found is that
4:18
the money actually follows this other thing, and so the real
4:24
thing that will make you more money, and important to this
4:28
conversation, the real thing that will help you find the
4:30
right level that you need to be in is to understand what your
4:35
vision is for your organization, to understand what your vision
4:38
is for your life, because if your vision in starting this,
4:42
I'll use me as an example, because this is a this is a
4:46
decision that I have to make right now, and it's one that
4:49
many of our scale architects, our most successful ones, have
4:52
to make, is should I continue to scale up, should I add staff,
4:56
should I add other coaches on my team.
5:00
And and build a bigger team, bigger consultancy. There's a
5:04
lot of that that would be super fun, be very cool, but
5:08
ultimately it's not necessary for me to achieve what what I
5:13
want to achieve for the vision that I have for this
5:17
organization. I can do it in other higher leverage ways that
5:22
don't require more people, and I like the simplicity of that, and
5:28
so because I can see a path to accomplishing my vision without
5:32
getting to level three, I'm going for it. Now that might
5:36
change. I might do an episode in the future where we talk about
5:38
me getting to level three, but it's not because I can't get
5:43
there. I've already done it. I've been through all the
5:46
levels, up to six and maybe ish level seven, although I think
5:49
that's that's probably not quite there yet for me. But I've been
5:54
from level one to being an owner at level six. I know how to do
5:59
each of these. I coach folks through the transition points
6:03
between each of the levels, so it's not a question of whether I
6:06
can get to level three, and it's not a question for you,
6:10
probably, of whether or not you can get to level three. It's not
6:14
this fatalistic wiring thing, it's really about whether or not
6:19
you should, whether or not it's right for you is even better,
6:24
even better, whether or not you choose to. And why would you
6:29
choose to stay in level two? Why would you choose to stay to get
6:33
to level three? You would choose to do that because it's right
6:37
for your vision. So, again, the principle we talked about in the
6:41
opening episodes, you want to choose the lowest level that
6:43
allows you to achieve your vision. So, in this case, if you
6:46
can achieve your vision with you, a handful of helpers, and
6:50
some of the incredible technologies that are out there
6:53
today, not settling for less, but focusing on your vision,
6:58
then level two might be fantastic for you. We'll talk
7:02
about some specific reasons why that might be in a moment. If
7:05
you can't, if you need to have more people, you need to..
7:10
there's just so much more that needs to get done to have the
7:12
impact that you want in the area that you want, that might
7:16
require more people than you can handle in level two, and so you
7:19
might need to get to level three. So, those of you who are
7:22
listening, you're probably in level two, at least those who
7:26
this episode is for. If you're not in level two, might be a fun
7:30
thing to listen to, but this episode fundamentally isn't for
7:32
you. Share it with a friend, because it's for them. We're in
7:38
level two, we're trying to figure out if we should get to
7:40
level three. Let's start with, and this is true across all
7:44
these transition points. You want to start with the level
7:47
you're in, because it's, it's, it's way easier to learn to
7:50
thrive in your existing level most of the time than it is to
7:54
get to the, to evolve to the next level. It's the language we
7:58
use for it here at Scale Architects, is thriving in a
8:00
current level, evolving to the next level, if for no other
8:04
reason, then you have to thrive before you can stand a chance at
8:07
successfully evolving, and so you're going to have to learn to
8:10
thrive anyway. So, let's talk about those who can thrive in
8:14
level two, and some reasons why it might actually be the exact
8:19
right level for you, we'll talk about the different
8:23
circumstances that fit, and a little bit of whether or not you
8:27
have what it takes. We'll kind of roll all that together. So,
8:30
first point here is, like I mentioned in this opening, if
8:36
you can achieve your vision solo or with a little support, and
8:39
you don't need to hire a full team, you know, 510, 15 people,
8:45
then then just stay in level two and crush it if you can command
8:53
premium pricing for your expertise, so if you're not in
8:57
an overly commoditized space, or if you can figure out how to
9:02
decommoditize your work in a commoditized space, like one of
9:07
the ultra commoditized space.
9:09
I had a client who was in landscaping, and they did
9:15
corporate landscaping, and they were working with a bunch of
9:20
people who like, they just didn't want their property to
9:23
look bad, that was the standard, and I remember him telling me up
9:28
one side and down the other, this is a commodity, all we do
9:31
is trade hours for dollars, and there's nothing special about
9:35
what we do, there's nothing special about what anybody does,
9:38
we're just trying to get people there on time and squeeze out a
9:40
bit of a profit. Well, I had another client who was in the
9:47
landscaping space, but they did custom design, build, and
9:51
maintenance projects for these phenomenal facilities, many of
9:58
which you would know the name of the. Place or the person, and
10:02
they, they took a commoditized thing, landscaping, and they,
10:06
they commanded premium pricing for it. I mean, premium pricing.
10:12
So, if you're in an industry that allows for you to elevate
10:16
your pricing, or if you can find a way, which you almost always
10:19
can, to command premium pricing for your expertise. Then what
10:25
happens is you can continue to increase your income, not just
10:29
your revenue, but your income without increasing the
10:32
complexity of the organization. Fantastic. So that's a great
10:36
reason to stay in level two, is you can just keep charging more
10:41
for what you do. Now that takes work, it takes effort, it takes
10:44
energy to thrive in a stage. Sorry, in a level, but you can
10:48
do it all right. Next reason why level two might be a fit. In
10:54
level two, you can, you can control your schedule to the
11:03
point where your interruptions are such that it allows you to
11:07
do the deep focused work that you want to do. Now, with
11:10
different types of work, that that matters more and less. For
11:15
work with your hands, you know, mental distractions aren't quite
11:20
as costly as like deep thinking work, but, but physical
11:24
distractions are more costly, and so, depending on the type of
11:28
work you do, the way that you create value, if you can do that
11:33
in a way that allows you to focus without being overly
11:36
interrupted, then then that's great, and usually that's more
11:41
achievable when you have less people, because there's less
11:43
folks to interrupt you. If you have or can get to a sustainable
11:52
client base that renews a lot or recurs even better, then the
12:02
next can be a strong reason to stay in level two, because you
12:05
don't need to continue to scale up this business development arm
12:09
and continue to scale up this operational arm, you can find an
12:12
equilibrium in there that allows you to kind of, you know, sell
12:17
what you have to, but then enjoy doing the work that you probably
12:21
started the enterprise to do. I'll slip in and out of sales
12:27
and business speak, but I just want you to know that's a
12:31
language thing structurally. All of this is almost exactly the
12:36
same in the nonprofit world as it is in the for-profit world.
12:41
In the nonprofit world, this would be donors, right, instead
12:45
of clients. It would be, you know, consistent funding
12:49
sources, as opposed to consistent revenue. You don't
12:55
need to have a bespoke sales team, and this is a big one,
13:00
because if the nature of what it takes to sell something and what
13:04
it takes to do something are so very different that different
13:07
people need to do them, either by virtue of the skill set, the
13:10
time, the wiring, then if you can do both of those easily on
13:16
your own, it's probably going to be a lot easier if you yourself
13:22
are self-disciplined enough to show up without a boss or
13:29
without somebody else who's watching, interestingly enough,
13:34
adding a team oftentimes adds a natural accountability because
13:38
someone else is watching, like right now I'm recording this
13:41
from my studio, which is a fancy way of saying my basement, and
13:47
there's nobody else here. My dog walked through an episode ago,
13:50
and so if I didn't want to record this episode, no one
13:54
would have asked for it, because there's no team watching.
13:57
Now, if I had a boss who told me I needed to have this done, that
14:00
would be one thing you're not going to have that level two
14:03
because you started your own business, however, level three
14:06
you might have a team that's dependent on you, and I can also
14:09
tell you that even though I'm not level three yet, my VA has
14:12
been hounding me for this episode for about three weeks
14:15
now, so he, he gets all the credit in the world for making
14:20
this happen, you can thank him, but there's an accountability
14:23
that comes from being part of a team, that's what I'm trying to
14:26
say, and if you have enough internal accountability that you
14:30
can do what needs to get done for you to thrive without a
14:32
whole bunch of folks around you or just one or two people
14:35
helping you, that's where a VA or an EA for an entrepreneur can
14:41
be magical because you're not hiring a whole team doesn't
14:46
really increase the complexity that much, but you can get some
14:49
of that accountability and discipline through them, you can
14:55
set boundaries, there's a to thrive in love. Two, you have to
15:02
be better at saying no to bad clients. You have to be better
15:05
at saying no to scope creep. You have to be better at saying no
15:10
to the things that aren't giving you the high return that you
15:13
want in the move to level three. Sometimes you can, sometimes
15:19
even need to be a little bit looser with those boundaries,
15:22
because you're looking for volume, not just value, you're
15:25
looking for quantity as much or more than quality to get you
15:29
over the hurdle into level three. So, in level two, to stay
15:34
there, you're gonna have to say no to things, and you're gonna
15:37
have to increasingly get better at that, but if you can say no,
15:41
and you can enjoy the benefits of having said no by just
15:45
working with really great, great clients, or working on really
15:47
great projects, then level two might be for you. I got to move
15:52
a little faster here. The ceiling to this, the limiting
15:56
factor is you can't really, at least healthily, stay in level
16:01
two, past hiring a handful of people, that's somewhere between
16:05
five and 10 for most folks. It might be three for you, might be
16:08
13 for you. There's not a fixed number, but when you get to the
16:12
point where you find yourself having to spend as much energy
16:15
managing a team as doing your own job, that's a sign that
16:19
you've actually moved to level three, which that brings us to
16:22
the big question, How does it, you know, when does it make
16:25
sense to move to level three? And that is when you have either
16:32
hit it really, if we're talking about when it's when you've hit
16:35
a ceiling that you can't break through without help, like you
16:38
have to have other people, there's not enough time in the
16:41
day, and there is more opportunity than you can get to
16:45
in a day. That's when you know you've got to hire, and again,
16:49
it's not going to happen instantly, but you have to hire
16:52
and hire and hire until you're extracting all of the value from
16:55
that opportunity. Another reason why you might want to get to
16:59
level three, and this isn't the best one. It needs to be paired
17:03
with, with one of these others, but, like, especially for an
17:08
extrovert, if you're in a type of work that requires you to
17:12
work by yourself a whole lot, having a team around you can,
17:16
can be hugely fulfilling, and so it might be worth growing, just
17:21
so you can have a team to work shoulder to shoulder with.
17:24
Again, that's not the best reason by itself, but it is a
17:28
reason that you want to pay attention to. More importantly
17:32
than anything else, is that your vision requires a team, no
17:36
matter how hard you work, and that might be because they have
17:39
a skill set that you don't have, but more often it's because
17:43
you're doing it at a quantity, at a volume, at a rate that no
17:47
one person can do. You have to achieve a scale that you can't
17:52
hit in your own time frame.
17:54
That's what that's what really drives the, the, the, the proper
18:01
move to level three is that your vision demands it, and for some
18:06
this isn't necessarily true for most, but for some, building and
18:10
leading a team energizes you more than the work itself. If
18:14
you like the idea of managing people who mow lawns more than
18:17
mowing the lawns yourself, then level three could be great for
18:21
you, so you want to move to level three, if you have to. You
18:26
want to stay in level two, if you can. And so, if we decide to
18:33
stay in level two, let's, let's figure out a little bit more
18:35
about the level, just so you can have an idea of what you're
18:38
signing up for before you make your final decision, and, and
18:41
that is that you don't have to do it alone. You can have a few
18:44
helpers, you can have some contractors that work with you,
18:47
or an employee or two, to smooth things over, to take some of the
18:50
stuff that you really don't like off of your plate. You can, you
18:55
can build a steady rhythm if you make sure that you're generating
19:01
enough revenue, if you're getting your work done, and
19:04
you're keeping the kind of admin stuff in order, you'll find
19:08
there's a rhythm to that, and, and it's all three, you have
19:13
your it, so you've got to generate revenue, you got to get
19:16
the work done, you've got to keep your admin stuff sorted,
19:20
but especially if you have a couple of admins that are
19:22
helping with that, you can find a rhythm, it's pretty cool. The
19:26
one of the big costs of, of, you know, level two versus level
19:33
three is that you really, you know, the definition of an
19:38
entrepreneur, I forget who said this was someone who leaves a
19:42
job working 4050 hours for someone else to going and
19:44
working 80 hours for themselves and getting paid less to do it
19:47
like that, that's that's startup entrepreneur, that's the low
19:51
side of this level, but the reality of it is a lot of folks
19:54
who choose level two for a while they've got to work more the. In
20:00
than they normally would, now you can whittle that down over
20:03
time, especially as you command premium pricing. You can get
20:05
more control of your schedule when you've got a full book of
20:09
business. You can, you can really start to exert a lot of
20:13
control over how much time you work. But level two's a lot. Now
20:19
you might think, well, if I, if I bring in more people, then
20:22
that's going to help that, right? If I go to level three,
20:24
then I won't have to work as much. No, that's not true at
20:28
all. The, the, the challenging parts of level two and level
20:32
three are both like 60 to 80 plus hours a week. In either
20:37
case, level two or level three, you can optimize for the level,
20:41
and you can start to work that back down, but what you find
20:43
when you hire a bunch of people is that they need to be managed,
20:46
and that takes as much time, if not more, especially as you're
20:49
bringing them in, especially as you still have your own job to
20:51
do, so you know in both cases you, you could spend a lot of
20:57
time, but in both cases you can use that lot of time to work
21:01
yourself to a smaller amount of working time, if that's what you
21:05
choose, but, but that's again up to you. I want to finish with
21:09
some pros and cons here for just level two. If you're thinking,
21:14
hey, I might be able to stay in this, why would you do it?
21:17
Because the ball's in your hands, like you have more
21:20
control at this level than in any other level, because you're
21:24
the one who's actually doing it. So, if the ball is moving, it's
21:27
because you're moving it, and that's pretty cool for those of
21:32
us who struggle with wanting to be in control a little more than
21:35
others, present company included. Level two might be an
21:39
opportunity for you to do that, you, you get to decide, and now
21:45
you have to do it as well. There's a downside to that.
21:47
We'll talk about a second, but that control, that hands-on
21:51
approach is a real benefit for level two.
21:56
You don't have to deal with the needs of other stakeholders,
21:59
you're not dealing with partners, you're not dealing
22:02
with a whole lot with salaries. Level three, you get there and
22:06
you're having to sell four times as much just to cover payroll,
22:10
like that's not a pleasant experience for most founders.
22:13
And it might be entirely avoidable by just staying in
22:16
level two, and you get to pick, you get to pick the projects
22:21
that you want to work, you get to pick the pace. Now you have
22:24
to earn the ability to do that by thriving in the level, but
22:27
ultimately you get to, and it's a whole lot of fun, whole lot of
22:31
fun. All right, cons, if you sneeze, the business or
22:36
nonprofit catches a cold, like there is no safety net. If
22:40
you're on vacation, then you know nothing's happening. You
22:43
might have a really great Claude agent, but, like, let's be
22:45
honest, it - the business rises and falls on you, and pretty
22:52
much without fail, to some extent, you are trading hours
22:56
for dollars in level two, because your time is almost
22:59
always the limiting factor, and there's a, there's a hard
23:03
ceiling on what any one person can, can deliver, and so you,
23:08
you, you have to be okay with that game. Now, this has nothing
23:12
to do with pricing. I'm not saying that you sell your hours
23:16
for dollars, in fact, that's generally a bad idea, but you're
23:20
still limited in your dollars by your hours, you'll find that's
23:24
almost always true. So, there's a hard ceiling on how much you
23:29
can actually deliver by yourself, and it's a long game
23:34
when, when it's just you, it's kind of literally a race that
23:38
never ends, like you just have to pick up the baton each
23:41
morning and carry it as far forward as you can, and if you
23:45
love that process and the baton fits well, then great. If, if
23:51
not, you might need to, you might need to work through the
23:56
tensions of getting to level three. So, again, we talked
23:59
about this in the previous episode, but in case you're just
24:02
jumping in here, reason why I want to lay these out is that
24:05
there are there are two categories of challenge. There
24:08
are tensions to be managed, and that's true of every level.
24:11
Every level has trade-offs. Every level, level two, you've
24:16
got to do it, otherwise it doesn't get done. Level three,
24:19
you've got to deal with developing the skill to manage
24:23
other people. Those are tensions to be managed. People need
24:26
things from you in level three. Your business needs things from
24:30
you in level two, and, and so we've got to recognize when
24:36
we're picking a level that those tensions just come with it.
24:40
However, we also need to recognize that there are
24:43
problems that can be solved in each of the levels. For example,
24:48
we talked about this a minute ago, but one of the best
24:50
examples is income. If you're not making as much money as you
24:56
want, more people probably won't solve that in the near term.
25:00
Firm, you might actually just need to optimize better for what
25:03
you're doing right now. You might need to market better, you
25:06
might need to charge higher rates, you might need to find
25:09
higher paying clients, and so making the income that you want
25:15
is a problem to be solved. And once you have the commitment and
25:20
the conviction, knowing, hey, this is the right level for me.
25:24
Well, I'll tell you one thing, founders figure it out, and you
25:27
will find a way to thrive in that level, whether it be level
25:30
two or level three. So, should you hire more people? Really
25:34
boils down to, does your vision requirement require it? If not,
25:38
you can make buckets of money in level two, if so, you can make
25:42
buckets of money and have an amazing impact and do exactly
25:46
what your vision wants in level three, and I'll be cheering for
25:49
you either way. With that one little bit of a teaser, in the
25:57
next episode we're going to be talking about whether or not you
25:59
should hire managers to help you grow your staff, or you'll have
26:05
to see what the alternative is in just a bit with that. Thank
26:11
you. Deeply, deeply appreciate you and your time and attention.
26:15
You know it means the world to us.
26:17
I hope you got even just a little bit more clarity out of
26:20
this episode, and I cannot wait to see you next time. Take care.
26:28
Hey everyone, Scott Ritzheimer here. Thank you so much for
26:31
listening to the Start Scale and Succeed podcast. I hope this
26:34
episode gave you exactly what you need for the level you're in
26:38
right now. If you want to discover what level you're in.
26:41
Take our 10 question founders evolution quiz for
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free@foundersquiz.com That's foundersquiz.com It'll pinpoint
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exactly where you are and give you tailored tips to move
26:53
forward and reach that next level in your journey as a
26:57
founder. If you got something out of today's episode, don't
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forget to subscribe, rate, or review. It helps us reach more
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founders like you. And let's be honest, it means a ton to me, my
27:07
team, and all our incredible guests. So, keep starting,
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scaling, and succeeding, and I'll see you in the next
27:14
episode.