Latest / Success Story with Scott Clary / Lessons - From $0 to $100M: What Most Entrepreneurs Get Wrong | Neil Patel - Digital Marketing Entrepreneur

Transcript

Lessons - From $0 to $100M: What Most Entrepreneurs Get Wrong | Neil Patel - Digital Marketing Entrepreneur · Success Story with Scott Clary

• 0:00
  In this lessons episode, explore why laser focus often beats diversification in the early stages of business.
• 0:06
  Learn how Bill Gates could have been the world's first trillionaire if he hadn't diversified too early.
• 0:10
  Learn why different stages of growth require different leadership,
• 0:13
  and learn how hiring people with proven promotions in your industry can be the most powerful strategy for scaling.
• 0:30
  I think one of some of the worst advice for people starting out is to diversify, diversify income streams,
• 0:35
  diversify, like if you look at the people that, you know, the thought leaders that people
• 0:40
  look up to yourself included, you made your money on one thing, and then once you have that asset bill,
• 0:44
  then you can move on to the next thing where then you can, but I think it's like the laser focus
• 0:48
  that is required to be successful because if you don't have that, I mean entrepreneurship is hard
• 0:52
  enough without laser focus. Here's a kicker for you, right? Who do you think the richest person in
• 0:58
  the world should have been right now in today's world? Who the richest person should have been?
• 1:06
  Uh-huh. I don't know. I'm thinking of like a Warren Buffett or what's the name you're going to drop?
• 1:11
  Bill Gates. He should have been the world's first trillionaire and why is he not?
• 1:15
  He met Warren Buffett and decided to diversify, so he sold off a lot of his Microsoft holdings.
• 1:20
  Microsoft has what? A $3 trillion market cap? If he owned a little bit less than half, right? He would
• 1:27
  easily been, and then you get dilution when you give people shares and all this kind of stuff,
• 1:31
  but like he would have been easily the world's first trillionaire. That's wild. So, I mean,
• 1:35
  I don't think he's ready. Even after the divorce, even after the divorce, he still would have been
• 1:39
  the world's first trillionaire. Did you know Steve Balmer was a CEO of Microsoft and Steve Balmer has
• 1:44
  a higher network than Bill Gates owning a fraction of what he had. I didn't know he had a higher
• 1:48
  network. I didn't know. Yeah. That's insane. So it's just because he didn't.
• 1:55
  And people asked Steve Balmer. He's like, I believe Microsoft. He's like, he didn't really try to
• 1:59
  diversify by tons of businesses. I know he owns a clippers and stuff like that, but like he didn't
• 2:03
  really try diversifying or anything like that. He's just like, I just blooded Microsoft from
• 2:08
  believed in it. So I just kept my shares and didn't do a ton of other stuff. So he has a higher
• 2:12
  network for living a simpler life than Bill Gates, who sold a lot of shares, created this crazy
• 2:18
  family office, did tons of other things. You know, most people also don't know this.
• 2:24
  Goldman Sachsman just Steve Balmer's money is easier for him to do that than Bill Gates building
• 2:29
  all these family offices and finding all these ventures to invest in and I can go on and on.
• 2:34
  You know, four seasons is owned by him. Like the amount of businesses he owns is ridiculous.
• 2:39
  He took the Warren Buffett playbook and I'm not saying, you know, it's a shitty playbook. Look,
• 2:44
  I'm not rich like they are, right? Or a better way to put it is, I'm rich because it depends,
• 2:49
  depends what you define rich as, but I define them as a whole different league. I call that wealthy.
• 2:54
  I'm not wealthy. I'm rich. Yeah, buy a nice house, nice car. But what the league therein is,
• 3:00
  oh, I bought a sports team. It didn't work out. Let me just go buy another sports team. I'm still
• 3:05
  have so much money. It doesn't matter. I can buy five of these ten of these, you know. Yeah,
• 3:09
  no, it's interesting because even through okay. So that's an interesting point that you make
• 3:12
  because I agree completely. But you've also made very conscious decisions throughout your life
• 3:17
  to pivot from like at one point software. So you went from software into services. Now you do
• 3:23
  acquisitions. So you do focus on different things over the course of your career. Do you not?
• 3:30
  I've only focused on the marketing industry. If you look at all my businesses, they're around
• 3:34
  marketing. If you look at even my current business, software makes up a large chunk of our revenue
• 3:38
  and profitability. Software's probably the most profitable division. We do M&A to grow the one
• 3:45
  thing. You know, yes, we have three software pieces. Two of them were acquired. Okay. So one
• 3:50
  wheelie found. And then if you look at services, a lot of the revenue was generated organically,
• 3:57
  but we're acquiring regions with other offerings and other region offering or acquiring other
• 4:06
  marketing businesses and other regions with different service offerings to expand, right? You
• 4:10
  risk cross selling. So yeah, we're doing more, but we're doing the same stuff. It's just we found
• 4:17
  it cheaper to acquire than to build from scratch. That's really, really different. But you still got,
• 4:22
  okay, so you still got your, you know, you still got your blinders on. You're only focused on this
• 4:26
  one thing, but you're just growing it through all these different ways. I got it. So if you think
• 4:31
  about some of the smartest lessons about even, I mean, right now, how many people you have,
• 4:35
  I think I was watching my first million, you have over 900, probably over a thousand employees
• 4:40
  at this point. I think that was two years ago. That business does over a hundred million dollars
• 4:45
  a year with NP digital. What would be some of the advice that you would give an entrepreneur
• 4:54
  that's starting out at all the different stages of growth. So say zero to 10 and then 10 to 100,
• 5:00
  obviously you grow through acquisition, you grow through different product service offerings,
• 5:04
  but you didn't do that all at the beginning. So what's the right strategy at the right point for
• 5:08
  the entrepreneur on this journey from zero to 100 million? I think it's going to vary for
• 5:12
  entrepreneur to entrepreneur, but this is what I've learned. The person who's usually great at
• 5:17
  building from zero to 10 million revenues, usually not the person from 10 to 100 and then usually
• 5:22
  have a different person from 100 and beyond. If you look at our organization, my co-founder was a
• 5:29
  CEO from zero to 18, I think, I think our second year was 18 million in revenue or something like that.
• 5:39
  And he was a CEO till then. I think it was year three. He put in a president who has helped us take
• 5:46
  us to 100. I don't know if the president helped us get us all the way to 100 or not. He helped us
• 5:53
  grow in more than double and double. But I know we put in a CEO who replaced my co-founder a few
• 6:01
  years after that, right? So my co-founder is a CEO that a president and then the CEO, the CEO that
• 6:07
  we have in place. He worked one of our competitors called I Prospect. He was a president there. He was
• 6:15
  originally the CEO, climbed up to be the president. And then, you know, if he stayed, I'm pretty
• 6:20
  certain he would have been the CEO. They've hit him up multiple times to try to get him back as well.
• 6:27
  And when you look at him, I think I Prospect, at that time, they had four, seven thousand employees.
• 6:34
  Now I'm thinking they're like 13,000 plus because he merged in a few other companies into the
• 6:39
  fold. But he's the right person to try to take us to a billion. The question is, is well,
• 6:45
  we get to a billion in my life's man. I have no idea. And what I would say is it's very different
• 6:53
  skill sets. You know, if I ask my CEO, like talk about entrepreneurship and starting company, he'll
• 6:59
  tell me he can do it all. I love the guy did that. He's amazing. He's way better than I am at
• 7:03
  managing companies. I would not hire him though to start a company from scratch, you know, even though
• 7:09
  he says he can do it. In my opinion, and I could be wrong on this, I don't think he has a
• 7:16
  personality in the fit to start something from scratch. I would bet on him all day long to skill
• 7:22
  a company in the marketing services space. Amazing at that, right? You got to find the right person
• 7:27
  for the right job. Yeah. And I think that's what people really mess up on. And that's why they
• 7:33
  struggle to scale. If I had to pick the biggest lesson I've learned over my career other than
• 7:40
  picking and going after a big market, it would actually be how to hire. And hiring can solve your
• 7:49
  problem and really create growth that no matter what stage you're at. And it's really universal
• 7:54
  on what you're looking for. And that's really finding someone who's worked for multiple competitors
• 8:02
  of yours, who's continually gone promoted at both those places and been there for a while because
• 8:07
  that means those corporations find that person valuable, not that they claim they did everything,
• 8:11
  but more so the company is giving them promotions with means that are actually doing a good job.
• 8:16
  Yeah. Those are the people you tend to want to hire because they're the ones who have just come
• 8:20
  with the time they experience, forget how to scale you faster. I think that that's smart advice.
• 8:23
  You know, I did ask, I asked the tactics on different stages of growth, different revenue numbers
• 8:30
  for your company. How do you grow it? How do you? What's the strategy? But at the end of the day,
• 8:34
  the strategy is the people. The people figure out what you got to do. It's the people. And a lot
• 8:39
  of the people that we use this model for worked out our competitors who are doing 10, 20 million
• 8:44
  revenue when we were smaller. And they help bring a lot of that to the organization. Now some of
• 8:50
  those people aren't with us today because they're one of the right fit in my opinion, right? They
• 8:54
  could have they could disagree with me to scale to a hundred, right? So then you go and find
• 8:59
  the people who are great at scaling to a hundred. Then you find the people who are great at
• 9:02
  going to billion and so forth so long. The biggest issue that people, so I love the strategy,
• 9:08
  look for people that have had promotions because then there's proof that they've actually done the
• 9:11
  job. They're not just giving you lip service and they're not just telling you that they've done it
• 9:15
  because multiple promotions, not one promotion. Yeah. There's a big difference. A lot of people
• 9:20
  get promoted once. Very few people get promoted three, four, five times, right? If they're continuing
• 9:25
  getting promoted that many times at organization, it means they're really good at what they did.
• 9:28
  I've had a conversation with several friends. I'm sure some of them are mutual friends about
• 9:34
  people that are very good at interviewing, even at the executive level. C-suite levels are very
• 9:39
  good at interviewing and not much else. And they bounce around between C-suite position to C-suite
• 9:44
  position, which is that's a very scary thing for a founder to understand. Some people are just great
• 9:49
  at interviewing and they look good and the resume looks great. And other big companies,
• 9:54
  like well-known named companies, have hired this person for a period of time, but they're actually
• 9:59
  useless at their job. And I think that this hiring strategy of finding some with multiple
• 10:06
  promotions that kind of de-risks the hire a little bit. It does. And you really have to find
• 10:13
  the right person for the right job and I'll give you a great example of this. I've been offered to be
• 10:17
  a CMO for publicly traded companies more times than I can recall or even count on one hand, right?
• 10:24
  I would be a terrible CMO. Just quite frankly, I'm an amazing individual contributor. I'm amazing
• 10:34
  growing organization, even if it's extremely large, with a small team. But to be a CMO of
• 10:40
  an organization that has 100 plus thousand employees or 50,000 employees, I'm not a great fit.
• 10:46
  How many people would be a marketing? I am a terrible manager and yeah, I can put someone else
• 10:51
  underneath me. I'm just really good at just being an individual contributor. And I can work with
• 10:58
  small teams of three, four, but I'm terrible just working with teams of like 300, 400, you
• 11:05
  right, especially being in charge of them. And this is why I'm never a manager.
• 11:10
  I know that you scaled NP digital. I think it was something like to 30 or 40 million in revenue
• 11:17
  just with your own personal brand. So you actually like taking this idea of being an individual
• 11:21
  contributor to an extreme because you built your business just on your name. But is that,
• 11:26
  do you think that's a common trait in entrepreneurship with entrepreneurs? They're very good at,
• 11:31
  they're very good at getting things off the ground, but they're really bad at managing people.
• 11:34
  If you look at like the psychological profile of a great entrepreneur,
• 11:40
  no, I wouldn't say that's common. I wouldn't also say that's uncommon. I would say what's more
• 11:44
  common is the entrepreneur is usually good at one or two things and they just usually excel at one
• 11:49
  or two things. And they're just exceptionally good at that. The ones that are successful and they
• 11:53
  just double down on it. Thanks for tuning in. If you found this valuable, don't forget to hit that
• 11:58
  subscribe button so you never miss an episode. And if you want to dive deeper into this conversation,
• 12:02
  check out the links in the description to watch the full episode. See you in the next one.