Latest / Success Story with Scott Clary / Lessons - The Playbook to Building Billion Dollar Businesses | Sharran Srivatsaa - President of Real (NASDAQ: REAX)

Transcript

Lessons - The Playbook to Building Billion Dollar Businesses | Sharran Srivatsaa - President of Real (NASDAQ: REAX) · Success Story with Scott Clary

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  In this lessons episode, uncover the framework that enables businesses to scale far beyond
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  incremental growth. Discover why singularity of focus eliminates distractions and drives
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  exponential results, understand how a strong cadence of accountability transforms performance
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  in culture, and explore how building repeatable processes create sustainable momentum for long-term
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  success.
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  Advising is this one, Kingston Lane came to be, is that after the real estate transaction?
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  Yeah, yeah, yeah, so, so, totally, so that there's two parts to this puzzle, right? One,
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  well, let's actually break down, you know, kind of what is the formula for 10x in the business,
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  so we'll give it to everybody, so that's really good. But very briefly, I'll touch on what I do now,
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  so we three things. Number one is I have active operating businesses that I run, and there are
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  across the board, somewhere in the real estate business, somewhere not. That's, but they're all
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  part of what is part two, which is my partner and I have a fund, so we have a private fund that we
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  invest in businesses, some we operate, some we don't, which means they have professional operators,
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  and so we are investors, advisors to those, and most of my time is spent either operating businesses
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  that we own or that we're investors in. That's because that way, if Scott, you're one of our
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  portfolio company CEOs, I have a vested interest in making sure that the business grows 5, 10, 15x,
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  and you succeed, I have a vested interest in that. Now, outside of that, I probably spend a
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  hand a little bit of time, I probably have 68 c founder CEOs at any given time, and the average
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  business size is roughly 25 to 50 million, and the goal for that is to get them to 250 to 500
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  million over three to five years, so that's the goal. So I never take on more than 68 at any given
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  time, and most of these folks, it's how do you break the glass ceiling of how do I get past this? So
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  it's a cool, very cool relationship, all my mentoring relationships, all have an equity stake in
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  it, which makes sure that I'm aligned with that growth, because most operators are like, hey,
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  I'm doing 20 million, you get me 200, you can gladly have the 10% because that's when we started
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  off in the first place, so that's no problem at all. Now, let's talk about the formula for how
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  you actually, you know, 10x. That's a playbook, that's a playbook, right? Yeah, here's a playbook
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  on how you connect something, right? So there's a, it's unfair to say that, oh yeah, this will work
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  for anything, right? But there's a, I call it a heuristic, it's a guideline, like go with the frame
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  work, right? Framework, there's three parts here, part number one is singularity of focus.
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  The, if you think that you can add 1700 skews, 18 business lines and all to get that result,
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  you're crazy. That stuff does not work. Like, after you've achieved the 10x, then you can add more to
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  it, but the, the, what drives the bus is, hey, I'm going to turn my focus to one big bone. I'm
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  going to wake up and I'm going to nod on this big bone. I'm going to ask everybody in my
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  organization to figure out, what is this big bone that they can nod? And the question becomes
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  for them, hey, I'm waking up in the morning, am I doing something that's helping me with this
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  big bone? Or it's not. So the filter becomes very clear. When everyone's working on different
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  initiatives and different divisions, yeah, you start to have some accretive revenue on a lot of
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  the stuff, but the singular visions never driven forward. So I'll give you a very simple example.
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  When we had, we decided in on our real estate businesses growth that we would drive everything
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  by people. So it was all, it was straight up everything related to acquiring great sales talent
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  and that sales talent drove our business. And so everyone was like, well, yeah, we should train
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  productive people. We should have sales skills. And I'm like, I don't care about any of this.
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  Our goals go higher and recruit and retain the best salespeople possible. And that's really
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  hard to do in a competitive environment. So our singularity of focus was if we got to
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  600 plus really productive salespeople doing what they did, they would drive our business.
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  So that was our singularity of focus. Now, every time I did anything, my team would say,
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  Sean, why are you driving to San Diego? Is this going to help us 10X? Like, they would ask me that
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  question. So they're really good. Yes, it's really good. Because then I would ask them the same
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  question, say, like, hey, why are we, why are we spending three million dollars on this advertising
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  campaign? Does it help us get there? Right? So the filter is really important. So number one,
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  singularity of focus. And the problem with the singularity of focus is as an operator, you and I,
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  I call it that when you're inside the bottle, it's hard to read the label. You think 17 things are
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  important. But as an advisor, when I'm looking from the outside, I can tell you 16 of those are
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  noise. Yes, it may drop revenue a little bit, but it's really hard to do by yourself. Right? So
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  that's so singularity of focus is number one. Number two, call it the cadence of accountability.
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  Accountability is an interesting concept, right? Like, hey, if you want to, if you want to lose weight,
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  what do you do? You take accountability coach, you've got to get that. Every single meal that you
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  have. That's true. Yeah, you have a, you need some form of accountability, right? So I'll tell you,
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  I'll actually give you the practical accountability that we have. So I was like, hey, we need to go
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  recruit some really badass salespeople. And normally what I would say is, hey, we'd have this
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  chicken call every Friday to see where our recruiters were at getting these great salespeople.
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  And we made kind of bumping along progress. And I was like, well, this is stupid.
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  This is, we're not growing as fast as we need. So Scott, this is exactly what we did at 9.45
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  every single morning. We had 11 what we call sales managers. Their job was to go recruit great
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  salespeople at 9.45 every single morning, five days a week. We got on a phone call. And
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  the 11 people went in order. It was like Jim, Jack, Scott, Johnny, same order every single day.
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  And they would reload two numbers. They would reload. They would say, two, zero, one, five, eight,
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  seven, whatever it was, right? The first number was how many appointments did I have yesterday?
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  And the second number was how many appointments do I have scheduled today? So think about that for
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  a second. I say, two, zero, then you go. You say three, one. Then the next person goes and
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  says, zero, zero. How do you think that person feels right now? Terrible.
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  I tell you all three of those people should feel terrible because they should be moving in the
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  opposite direction. I hear what you're saying. Yeah, yeah. But nobody, what we saw was nobody that
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  said zero, zero, ever turned up the next day and had a zero, zero again, right? It's
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  motivated. And you also realized that if somebody could do, it also gives you a perspective of what
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  is possible. If someone said seven, three, I had seven appointments yesterday and three today,
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  that's crazy. Someone that says zero, nine, you know that, hey, I was busy, whatever.
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  And Scott, all we did was this. There was no judgment. It was a, you wake up, nine, 45,
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  we went in order. And if someone missed the call, I paused for 10 seconds to let everybody know
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  that that spot was not taken that day. I mean, it got very, very clear. And it sounds militant,
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  but that was the single most important thing that drove the accountability because we knew that
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  appointments drive people. We knew them because without meeting with people, you're not hiring anybody.
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  So our cadence of accountability was this 15 minute chunk that we installed in our business
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  that literally changed the nature of our entire business, right? So number one, singular to focus,
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  number two, cadence of accountability. Now, in the different companies that I work with, that
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  accountability is a different thing. It just so happens that in our business, that was the 15
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  minute chunk that we came up with. Number three, good process and good process alone drives good
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  results. So a lot of times what we say is, I'll figure it out later is what the average entrepreneur
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  says, right? And that's why they, that's why they'll like doubling your business is actually easy.
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  You can tighten a few screws, get a few bowls, sell and make a bunch of extra calls,
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  you know, offer a bunch of discounts and you can double your business. But when you do that,
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  it's very hard to sustain a doubling because you hacked your way to doubling it and everything
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  starts to break. So the one thing that we realized from a process perspective was when a new sales
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  person came in because we drove our business with people that we needed to have like a badass
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  onboarding program. And that's all we focused on because we said, if Scott comes on and he has a
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  delightful onboarding process, he never leaves and continues to be happy producing results for us.
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  So I literally shut down my focus on anything else and all I worked on was, how do I have the
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  most amazing, like we brought a consultant from four seasons and you are, you know, you see sharp,
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  where four seasons was born was Toronto. We brought a consultant from four seasons to say,
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  how do we design this delightful onboarding process? And that was a process for us. So for us,
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  it was how do we get to, you know, 600 plus people selling $3.4 billion a year? How do we do this?
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  15 minute call every single day? And how do we have an insane onboarding process? Those three
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  things were the very specific three things that actually drove our 10x growth.
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  I love it. And it makes sense because now you've taken that, you've taken that mantra,
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  that ideology that that that that one bone you have to non. And then you just, you have that one
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  bone in each piece that will actually lead back to your main high-level KPI bone, whatever.
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  How, now I'm curious, how do you, how do you figure out what that bone is?
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  As an entrepreneur stuck in the bottle, right? Yeah. So, so it's a, it's a series of questions.
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  And then I think that's the process that's a little difficult, right? And so I'll give you an,
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  I'll give you an example. I was driving to a con, I drove to a conference that I went to. There
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  was a hundred entrepreneurs invited to this conference. I'd never had a, I was busy operating
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  my business at this time. I get to this conference. I sit down, I'm put on my hoodie, I'm sitting
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  in the back. I'm like, hey, I can't believe I'm here. I committed to being here. It's a whole day,
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  it's wasting my day. That's what most entrepreneurs go to conferences. There's like, I can't believe
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  I'm here, right? And I'm sitting there, it's past lunch. And I'm like, I wasted this morning,
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  I'm here. I might as well listen. This, this five foot four lady shows up on stage. She starts
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  talking. And I'm like, oh, I should probably pay attention. And Scotch, you started talking
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  about leadership, building a business, et cetera. And I started writing some notes. And as she was
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  talking, a couple of questions came to mind. So I was almost going to raise my hand,
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  proverbially, to ask the question. But I felt like as soon as I asked the question,
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  she naturally answered it in my head. Like a eerie experience, right? And then I would take more
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  notes. I'd have another question. And she would magically answer the next question. I was like,
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  that's weird. Like how does she know what I'm thinking? That's weird. And she did this for a whole
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  hour. And I was driving home that day. I'm like, this is magical. Call my dad. I'm like,
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  dad, you won't believe what happened. And just as a, you know, I call my dad because I call my dad.
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  And he says, oh, well, you should hire her. And I'm like, to do what? Well, if she can answer all
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  your questions, even before you're thinking about them, maybe she can help you with your business,
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  your life, whatever. I was like, well, I don't know what I would do. And so he goes, well,
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  write her an email. And my dad was very good about, you know, scripting, good about language patterns.
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  And he said, I'll give you the phrasing he told me. Citron, write her this email that says,
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  hey, so and so I met you at this event and you're amazing. And here was the phrasing that he used.
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  He says, I would like to offer you blank. And he said, come up with a number, a dollar amount
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  that was painful to you, but still large enough. And at that point in my career, when I was 29
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  years old, I picked, I'll pick the number. It was $10,000, right? And I said, I would like to offer
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  you $10,000 as a symbol of my seriousness. That was the line, right? All I'm looking for
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  is for you to prioritize some email communication for me. And that's it. I don't need any structured calls.
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  I don't need any meetings or anything. And I was like, huh? And I was like, Dad, really? He goes,
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  yeah, would you pay $10,000 for her to read your mind? I was like, of course. So I wrote her that
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  email within two minutes. God, she responds to me and says, is this a joke? I said, no.
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  I said, no, absolutely. I'm dead serious. She responds. She's like, here's here are wiring
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  instructions. I was like, awesome. I wired the money and she became my first coach. Literally,
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  she was instrumental in helping me chain, come up with this 10x plan, put the singularity of
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  focus together. Like I had none of these pieces then. And she was the one that told me, hey,
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  when you're inside the bottle, it's hard to read the label. So while I was discussing all the things
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  that I was working on, she was the one that pulled out that, hey, you're working on operations
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  and dropping money to the bottom line. But you're telling me that the people are the ones that are
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  driving the growth, let's think about a future where if it were only the people that you focused on,
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  what would happen to your organization? The coach asked the right question. And coach is an
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  interesting thing. Coach mentor advisor. I try to call myself. I'm my client's private advisor
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  because 200 and an entrepreneur running a $50 million business, dropping $20 million to the
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  bottom line doesn't need a coach per se because they're like, hey, they just need somebody to talk to
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  who is nonjudgmental, who has been there and done that, right? So whatever my clients are
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  going through right now, I have been there. Like I know, I know that they're thinking about wanting
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  a private jet because their friend has a private jet. I know it. And I told them, I've been on
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  enough private jets. You don't want one. You don't want one. And I'll tell you what, you can charter
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  one all day. Like you may think this is a snooty thing to talk about, but that's what goes through
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  their mind when they hit a level of success. Hey, should I have the jet? Should I have the car?
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  Should I have the house? Should I have the bank balance? Should I have the second vacation home?
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  Should I bonus my employees? Should I have an operator? Like that's what they're thinking about.
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  And when you've already been there, I can kind of wade through that stuff and because that's all
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  noise. The other day it is, hey, here's a singularity of focus. Here's a cadence of accountability
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  and here's a good process, right? So it's a discovery process. There's no formula for it to come out,
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  but I've seen enough businesses, service, product, manufacturing, whatever that after like a
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  couple of conversations, I can at least pick out the candidates pretty quickly of what is going to
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  drive growth. And then you build a hypothesis around saying, hey, Scott, if you focused on this
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  division only will it change your business? Well, let's figure it out. And then that makes for a
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  really good kind of conversation around. Thanks for tuning in. If you found this valuable,
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  don't forget to hit that subscribe button so you never miss an episode. And if you want to dive
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  deeper into this conversation, check out the links in the description to watch the full episode.
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  See you in the next one.