Strategy at Scale

In 1978, Neil Balter was a 17-year-old carpenter with a knack for building things, but what he would end up building was an entirely new industry. As the founder of California Closets, Neil transformed the way we think about organizing spaces, pioneering an industry that didn’t even exist when he started. But while his story begins with some shelves in a neighbor’s closet, what truly set him apart was how he grew the business. Neil made a pivotal strategic decision early on: shifting from advertising to public relations to reduce customer acquisition costs. This decision wasn’t just a money-saving move; it became the driving force behind the company’s rapid growth. By focusing on PR, Neil got his business featured in the Wall Street Journal, talk shows, and even Oprah, catapulting California Closets into the mainstream with a fraction of the cost of traditional marketing. We see this pattern over and over again. A company that outscales the competition makes an uncommon promotion choice that results in a lower customer acquisition cost than the industry. It costs them less to get a new customer. And with each new customer, their lead compounds. You will see this principle at the core of the success for Netflix, Telegram, Amazon, and others.  Now, this is not the only smart strategic choice Neil makes. In today’s conversation, we dive into how Neil identified what his brand stood for—quality and knowledge—and how he consistently delivered on that promise. It’s a lesson every entrepreneur should take to heart: knowing what your brand uniquely excels at and finding cost-effective ways to bring that value to your customers. Neil will also share how franchising allowed California Closets to scale rapidly, making closet organization a household concept worldwide. Whether you’re thinking about how to reduce your own customer acquisition costs, or what your brand’s promise really is, there’s plenty to learn from his journey. Today, we cover: How Neil recognized a common problem (lack of closet space) and turned it into a business that solved a universal issue. Why franchising was the key to scaling California Closets, and how Neil structured the business for growth. How a chance encounter with a Wall Street Journal reporter transformed their go-to-market strategy from advertising to PR. The brand's promise, earning customers’ trust, from design to installation. Lessons on linking customer acquisition costs to customer lifetime value Ladies and gentlemen, Neil Balter. Thanks for listening! This episode is brought to you by Kaihan Krippendorff of Outthinker Networks, Verne Harnish of Scaling Up, and the team at Growth Institute.

Naomi Simson is a corporate marketer and the founder of RedBalloon, an online powerhouse – the largest experience network in Australia and New Zealand. Think Amazon or Etsy or Alibaba but not just for physical things, rather for experiences. She was also a judge on the Australian version of Shark Tank and is the author of Live What You Love: When Passion And Purpose Change Your Life. Her insights offer a masterclass in branding, strategy, and business building. She left a highly successful corporate career, because she saw an opportunity that few saw at the time. Driven by a desire to create a business with purpose, she transformed a simple idea—gifting experiences—into one of Australia’s most recognized online brands. Starting with limited resources and a big vision, she pioneered the experience economy, building trust in a nascent internet age and reshaping the online retail sector in the region.  In this episode, Naomi shares the keys to building powerful brands, staying in sync with customers, and managing culture so you can keep your company relevant in an ever-evolving market. In this episode, we cover: How we should really be thinking about branding, as in what IS a brand? Her answer may surprise you, and it could change how you think about your brand architecture. It certainly did for me and for every business builder I’ve spoken about it since Why one of the most important metrics that will determine the speed at which you scale is … customer acquisition cost How brand equity is the key to reducing that customer acquisition cost Why it’s important to understand what “job” your customers are “renting” your product or service to get done and specifically tips you can follow to make sure you are constantly in touch with what they want  Let’s dive in with Naomi Simson. Thanks for listening! This episode is brought to you by Kaihan Krippendorff of Outthinker Networks, Verne Harnish of Scaling Up, and the team at Growth Institute.

Australian businessman and the visionary founder of Chemist Warehouse, Jack Gance began his career as a pharmacist with a single store in 1972, but his innovative approach and strategic acumen quickly led to the creation of a pharmacy distribution empire. He is known for creating the Le Specs, Le Tan, Australis, and Colours of Australia brands of sunglasses, sunscreen, fragrances, and cosmetics, which he sold in 1991. He completed his MBA at Monash University and NYU Stern School of Business and returned to revolutionize the pharmacy industry with the My Chemist chain. From there, he went on to found Chemist Warehouse, now a multibillion-dollar powerhouse. Jack brings a natural strategic mind to the puzzle of scaling a business. Thanks to a sequence of smart strategic choices, Chemist Warehouse, under his leadership, has grown to encompass around 600 stores, generating approximately $7.9 billion in total sales annually. He was recently named EY Entrepreneur of the Year for Australia and has also received the Retail Innovator Award and the Lifetime Achievement Award from the Australian Retail Association.  In the episode, we dig into Jack’s strategic decisions with the goal of capturing some key strategic concepts we can all apply to scale whatever we are building with greater speed, easy, and success rate. We will cover: Why he doesn’t write a business plan The trick not trying to predict the future but, instead, limiting the downsideThe benefit of looking for what your competitors are ignoring … or are avoidingWhy you need to underperform on some things, make tough choices, and overperform in other areas Why you shouldn't focus just on customers at the detriment of suppliers How to align culture to strategy Why business school didn’t really teach him new things as much as validated what he learned as an entrepreneur The benefit of taking action on idea to prove it, rather than seeking to prove it to take actionThanks for listening! This episode is brought to you by Kaihan Krippendorff of Outthinker Networks, Verne Harnish of Scaling Up, and the team at Growth Institute.