Scaling Up Business with Bill Gallagher

What story does your cash flow tell? Is it a happy ending? Does it end in romance? Or is it a horror story? Your balance, your cash flow, tell a story. The good news is there are four levers you can pull to change it!   Alan Miltz is a numbers guy from South Africa but currently lives in Australia. He is the co-founder of Cash Flow Story, the co-author of Scaling Up, and he’s an International Speaker. Alan is on today’s show to shed some light on the numbers and help Founders and Entrepreneurs get a better understanding of what it all means.   Unless you come from a financial background, looking at the numbers in your business can be overwhelming and hard to comprehend in a ‘big picture’ perspective. As Alan likes to say, you might be speaking Spanish, but the bank is speaking Portuguese and these language barriers can be disastrous for a new startup.   Alan left South Africa in 1987 while the country was in the midst of apartheid. Through his accounting degree, Alan was able to travel all over the world, where he finally landed in Australia at 26 years old. At the time, he was an advisor and realized everyone he spoken to (accountants, business owners, etc) all spoke “numbers” very differently. They all interpreted it… differently!   So, Alan and a few other South African expats decided to create a technology platform that could be used by anyone. The belief was that banks should be able to communicate in credit in one simple language and have businesses understand it. Through that adventure, Alan and his co-founders were able to sell it about six years ago and start Cash Flow Story shortly after.   Cash Flow Story is aimed at CEOs, Coaches, and Accountants to tell a story in a way where everyone will understand the numbers. The biggest danger in a business is what you don’t know about your own business! The goal is simple, to help people eliminate their financial blind spots.   Alan believes revenue is vanity, profit is sanity, and cash is king. When CEOs look at their financials and see their profit margin, they think they understand the business. Alan says you don’t! Profit numbers are just an opinion! You can manipulate your profit. Cash, however, is a fact.   Interview Links: Alanmiltz.com Alan on LinkedIn Cashflowstory.com   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach  

Fast-growing companies typically grow between 20-30% a year and doubling that every few years. However, some companies grow quite a bit faster than that. Today’s topic is Blitzscaling, where companies exceed their growth expectations ten- or twenty-fold!   Chris Yeh is the Co-Founder and General Partner of Wasabi Ventures. Chris has worked in high-tech startups since 1995 and attend Stanford when he was just 15 years old. Chris is also the author of Blitzscaling, which Bill and Chris will be discussing in depth today.   How do you define Blitzscaling exactly? It is the pursuit of rapid growth, where you prioritize speed over efficiency and environmental uncertainty. More and more industries and markets are winner-take-most or winner-take-all. The first to reach scale becomes the dominant player.   For example, Facebook was not the first social network. Before it, there was Friendster and MySpace. However, Facebook was the first to scale and get its name out there.   The perfect example of Blitzscaling is actually Google. When Google decided to partner with AOL, they made a commitment of $150 million dollars a year with them. This was a huge jump because the year before they had only done $19 million. Through their AOL partnerships, they became the dominant player in advertising today.   Is Blitzscaling just all about getting big fast? No, it’s not! It is a systematic way to understand and take intelligent risks. Blitzscaling has four growth factors and two growth limiters. It first starts with market size, distribution, gross margins, and network effect. The two growth limiters are lack of product market fit and operational scalability.   For example, Groupon by all measures should have been successful, but what stopped them dead in their tracks was lack of product market fit. They offered a poor customer experience for both the vendors and the buyers as they grew. They had rocket-like growth in the beginning, but it ended up crashing due to their inability to cater to their core customers.   Interview Links: Wasabiventures.com Globalscalingacademy.com Blitzscaling.com   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach   TWEETABLES:   “Blitzscaling is the pursuit of rapid growth by prioritizing speed over efficiency.”   “The ability to actually scale your people, your technology, and infrastructure is absolutely essential.”   “When you’re a Blitzscaler, you need to be able to continue learning new ways to play the game, because it’s changing at every stage.”   Did you enjoy today’s episode? If so, then head over to iTunes, and leave a review. It helps other entrepreneurs discover the Scaling Up Business Podcast, so they can also benefit from the knowledge shared in these podcasts.   Scaling Up: How a Few Companies Make It...And Why the Rest Don’t, is the best-selling book by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed, where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business Podcast and a leading business coach with Gazelles.   We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).  

What does it truly feel like to 10X your company? How does your mindset change and how do you navigate between the startup phase to the $10 million in revenue phase? On top of that, how can we keep sustaining that growth? Today’s episode features a case study that details this entrepreneur’s experience!   Kevin Pasco is a 26-year-old entrepreneur who built an eight-figure brand, Nested Naturals, into an eCommerce powerhouse with his partner Jeremy Sherk. Kevin has a team of 25 employees and plans to grow to more than 50 in the next 3 years. How has he been able to see such success? Find out on today’s episode!   When Kevin first started 4-5 years ago, he was trying to pursue a more nomadic “4 hour work week” schedule. However, it slowly grew into something more. The company first began because both Kevin and his business partner were fed up with taking supplements that didn’t fully disclosure what was — really — inside the bottle.   The first product they launched was to help with sleep since both of the Founders had trouble sleeping regularly. When they launched, they had to really bootstrap it and get the support of their friends and family to support their first product, initially. In the first year, their product saw a lot of success and it grew to a million dollars in revenue.   What led them to quick growth in the first year was their ability to listen to the customer and adapt to their needs. The customers were still paying the same price for a better product and they were thrilled. Also, their extensive A/B testing helped significantly to see what was really working and what was not. The keys to Kevin’s success, in the beginning, was listening to feedback, adapting, and then brand testing.   By getting social proof early on through Amazon Reviews, Kevin and his business partner were able to charge a higher price for their product as well and stand out from the competition. They’re not just selling ‘pills,’ they’re selling a good night’s sleep where you won’t be waking up groggy. People really value that and are willing to pay extra for that feeling.   Interview Links: Nestednaturals.com Kevin on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach   TWEETABLES:   “We really learned to listen to the customer.”   “We found pretty early on that the more reviews we could get — the more people talking about the product — the more we could charge.”   “In year 3, we placed such a big emphasis on people, leadership, autonomy, hiring great people, and offering them incredibly culture and perks.”   Did you enjoy today’s episode? If so, then head over to iTunes, and leave a review. It helps other entrepreneurs discover the Scaling Up Business Podcast, so they can also benefit from the knowledge shared in these podcasts.   Scaling Up: How a Few Companies Make It...And Why the Rest Don’t, is the best-selling book by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed, where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business Podcast and a leading business coach with Gazelles.   We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).  

We often focus on company performance and leadership, but what about individual performance? What can we learn from just the individual and how can we improve it so that everyone on your team is a star performer? Today’s guest has the answers. Morten Hansen is a management theorist, motivational speaker, and author. Formerly a professor at Harvard Business School, Morten now teaches management at The University of California. He also co-authored the New York Times bestseller Great by Choice with Jim Collins. Morten has recently released a new book titled, Great at Work, which he dives into, on this week's show. Morten was working 80+ hours to achieve good work, but his colleague was working 50 hours a week and still delivered good work, if not better. How was it that she was able to achieve such great quality of work within less time? This spawned the question, why are some people great at work and others are not? Through extensive research and five years later, Morten discovered that there were 7 factors or principles that explained two-thirds of people’s work performance. If you’re good at these seven things, it will go a long way into really performing exceptionally well in your role. This is great news because it doesn’t necessarily mean ‘do more’ or ‘work harder.’ The great performers are not the ones up in the middle of the night sending emails at 3 a.m. to their staff. In fact, they’re much more organized; they’re more focused and incredibly good at prioritizing. Morten found that if you’re working more than 65 hours per week, you’re getting diminishing returns in your performance. To find out how to increase your performance and what the seven principles are, listen in for more! Interview Links: Mortenhansen.com Morten on LinkedIn Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach

It takes a team to scale and grow but how do you do that with ease and grace? How can you become a powerful leader that both inspires and engages your team? Today’s guest has some answers!   Jeff Hoffman is a successful entrepreneur and the Founder of Priceline, UBid, and ColorJar. Jeff has worked alongside celebrities like Elton John, Britney Spears, and NSYNC. He knows a thing or two about what it takes to engage people and on today’s show, he shares his expertise in team building practices that bring good people together!   One of the most important lessons Jeff learned about scaling up is the value of teams. As a founder, you started the company yourself and are used to taking care of everything yourself. The problem with this though is that if your company does well, you start to think you’re pretty good at all of this.   But later, founders find themselves overwhelmed. They find themselves working harder than ever before and putting in more hours than they’ve ever done before, yet, despite this, they’ve stopped growing. The truth is, you’re never going to do anything massive or at scale by yourself.   Jeff was not smart enough to understand this in the beginning, but through his mistakes, he’s learned that the day you start taking some of your time to delegate your tasks and to find people that are smarter than you to run the company, is the day you can finally work less and be less stressed.   Jeff had to make an active effort to find talented people. Sending out an ad doesn’t work. The best people in your market aren’t looking for a job, so schedule the time to scout them. The second part of running a successful team is getting out of their way. Let the people who are smarter than you do their jobs!   Your real job as a founder is to build a workplace environment and culture that people love to go to, where the best people in the industry all want to work for you and never want to leave. Your job is to take care of the people who work for you. When you’ve achieved this, you never have to worry about the growth of your company.   Interview Links: Jeffhoffman.com Jeff on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach  

The bigger you get, the harder it becomes to know what’s going on within your company. You may know your financial numbers, but how are you really doing? Are your people happy? How are you doing on those ‘softer’ skills? Well, you are able to track this in real terms by using a system called Net Promoter Score (NPS).   Sturdy McKee is a Physical Therapist, Entrepreneur, and Business Coach. He has been using NPS for the last five years and shares on today’s show his case study and some of his business insights on how NPS has helped grow his business and measure those ‘intangible’ metrics.   Sturdy had been in business for over 10 years before he even considered implementing NPS. He had 6 locations and over 40 employees, and he was losing touch with the frontline experience. He didn’t know how his customers were doing across the board and it was difficult trying to find this info from all of his different locations.   In the NPS survey question, business owners can ask their customers, “How likely are you to recommend this company, this product/service, to a friend or family member from 1-10?” 1-6s are considered detractors, 7-8s are neutrals, and 9-10s are promoters.   The formula works like this: Take the number of promoters minus the detractors and divide the remainder by the total surveyed and then you end up with your ‘Net Promoter Score.’ Typically this system ignores those who voted 7-8 and looks carefully at those who rated the service 1-6 to see what you can learn from them. And from those who rated 9-10, you use this data to see how you can attract more of these people and even receive a testimonial from them.   Sturdy’s company sent an automatic follow-up email two weeks after a patient’s evaluation asking the ‘Would you recommend us?’ question and sent the same follow-up question around the six-week mark, which ended up being a really good decision. For those who weren’t happy at the two-week mark, and having Sturdy’s team quickly address and fix it, they ended up changing their score at the six-week mark to a more positive one.   During this time, Sturdy discovered two things about his company. Volunteers and students studying physical therapy were observing/treating patients, but some patients did not consent to this and felt like they were paying a high cost only to be treated by an unskilled staff member. This caused Sturdy to change his process so that students could still learn and volunteers could still observe, but it was documented more effectively and the patients still felt like they were receiving the highest quality service.   Interview Links: Sturdymckee.com Sturdy on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach   TWEETABLES:   “For people who are brand new to this, NPS is really asking one question and then leaving an open end.”   “Even from the get-go we realized it was a process, it wasn’t just a number.”   “Fortunately, we’ve eliminated specific things that were being done across the board.”   Did you enjoy today’s episode? If so, then head over to iTunes, and leave a review. It helps other entrepreneurs discover the Scaling Up Business Podcast, so they can also benefit from the knowledge shared in these podcasts.   Scaling Up: How a Few Companies Make It...And Why the Rest Don’t, is the best-selling book by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed, where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business Podcast and a leading business coach with Gazelles.   We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).  

In order to grow your business, you have to recognize that you are often times the bottleneck. Everything needed to grow your business starts with you! This is why it’s important to become a lifelong learner to better develop yourself and grow your business.   Daniel Marcos is the co-Founder and CEO of Gazelles Growth Institute. He is also a long-time coach and an international speaker who has shared the stage with thought leaders like Peter Diamandis, Guy Kawasaki, and Jack Canfield. On today’s show, Daniel dives into what it means and why it’s important to be a lifelong learner and how it accelerates your career.   Daniel was a very bad student academically but he built his first internet company in Mexico City back in 1999. As Daniel began hiring Stanford and Harvard graduates to come work for him, he felt uncomfortable that he wasn’t able to understand what they were saying to him. They were using jargon he had never heard before. This experience prompted him to study for his own MBA and to better understand the people who work for him.   When Daniel started his next company in the U.S., it went under during the 2008 crash. It was awful and he lost a lot of money. Verne Harnish reached out to him, and after complaining for 30 minutes, Verne asked, “What’s next?” Daniel, feeling like an absolute failure, said he was going to return to Mexico and get a salaried job to pay for his kid’s education. Verne thought this was nonsense and offered him a new opportunity. The rest is history!   Through that experience, Daniel has become obsessed with KPIs and looking at the numbers. He now has insight into what good numbers look like to help prevent others from suffering the same faith his company did back in 2008. Back then, he saw the warning signs but ignored them. Today, he helps entrepreneurs avoid them.   Daniel has a very extensive book collection, but the problem with books is they tell you how to do things, but they never mention at what stage or when you should do those things. As we go through different stages of growth, each company is going to experience something different. A one-size-fits-all approach just doesn’t work the way the books say it does.   Daniel saw a chart that stated the U.S. today has 28 million firms and 96% of them will never do over a million dollars in revenue a year. Only about 0.4% of companies go over $10 million a year in revenue. In the end, only 17,000 companies go above $50 million in revenue each year. And in each of these financially diverse companies, they all need a completely different level of attention and systems.   Interview Links: Growthinstitute.com Daniel on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach   TWEETABLES:   “The reason we’re great coaches is not because we’re so ‘brilliant.’ It’s our willingness to share the things that didn’t work for us.”   “Everything was backward for me. How much money we made, we were looking into the past. Now, a lot of my metrics are for the future and I can see what’s going on.”   “Are you, yourself, coachable?”   Did you enjoy today’s episode? If so, then head over to iTunes, and leave a review. It helps other entrepreneurs discover the Scaling Up Business Podcast, so they can also benefit from the knowledge shared in these podcasts.   Scaling Up: How a Few Companies Make It...And Why the Rest Don’t, is the best-selling book by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed, where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business Podcast and a leading business coach with Gazelles.   We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).  

People are certainly the hardest part about scaling up a business. Finding the right people is crucial to helping you grow. So, how can you improve your odds from 50% to 90% or better? Through smart recruiting methods!   Geoff Smart is the Chairman & Founder of ghSMART, which was founded in 1995 to help Fortune 500 CEOs and entrepreneurs achieve their goals through hiring, developing and leading talented teams. Geoff is also the bestselling author of Who, Leadocracy, and Power Score.   As a freshman at college, Geoff was fortunate enough to get an internship at a venture capitalist firm and he noticed that large sums of money were either gained or lost due to who the investors invested in. Geoff wondered if there was a way to hack the system to help investors make better bets on people, and so his company was born.   The topic of how to get the right people on your team is one of the most popular concerns for people in business. If you get this aspect right, you are going to have the most solid improvement in your revenue and profitability and in your own enjoyment in your work.   A lot of entrepreneurs/hiring managers use their gut feelings to hire, but this could possibly be the worst mistake you can make. The reality is, you can’t judge a person based instantly on gut feel. You’re going to make a mistake and it’s going to cost you a lot of money.   Leave the emotional hiring methods behind! The average success rate for hiring is about 50%. Recruiters only get it right 50% of the time, which means people regret every 1 in 2 hires! That’s horrible! A bad hire can cost you 15 times that employee’s annual salary.   However, you can improve your 50% into 90% by focusing on these four things really well: Scorecard, Source, Select, and Sell. Geoff explains each section in depth inside the podcast episode! Listen in for more wisdom!   Interview Links: Geoffsmart.com Geoff on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube Growthinstitute.com/scalingcoach   TWEETABLES:   “If you look at global surveys on what’s on the minds of entrepreneurs, talent is number one or two out of 30 different topics.”   “If you get [talent] right, you’re going to have the most solid improvement in your revenue and profitability.”   “Ever since I started my company, I realized that managing is easy… except for the people part.”   Did you enjoy today’s episode? If so, then head over to iTunes, and leave a review. It helps other entrepreneurs discover the Scaling Up Business Podcast, so they can also benefit from the knowledge shared in these podcasts.   Scaling Up: How a Few Companies Make It...And Why the Rest Don’t, is the best-selling book by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed, where so many others fail. My name is Bill Gallagher, host of the Scaling Up Business Podcast and a leading business coach with Gazelles.   We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).  

If you think about it, there’s really no such thing as B2B. People are behind these businesses and they work with other people! It all comes down to relationships and communication. Today’s guest shares how you can build more meaningful, deeper, and stronger relationships!   Mo Fathelbab is the Founder and President of Forum Resource, LLC and co-founder of Alumni Forum Services. He is also the author of the best-selling book, Forum: The Secret Advantage of Successful Leaders and his latest book, The Friendship Advantage: 7 Keys to Building Relationships that Transform Corporate Culture and Drive Productivity. Mo will be diving into why strong relationships make all the difference and how you can build deeper relationships from the ground up in this episode!   Mo is so passionate about relationships because he knows what it’s like to not be able to connect with anyone. Growing up, he purposely put himself in situations where he was forced to talk to people so he could get better at connecting.   During a ‘Forum’ training, Mo experienced something magical. He was sharing personal details with mere strangers, things he had never shared with his family or closest friends, and it was liberating. Mo thought it was so valuable that he decided to host these trainings all over and deliver it to busy entrepreneurs wherever they may be located.   These trainings provided a model for powerful, meaningful, real, relationships that people don’t usually see in their day-to-day lives. Looking back, Mo reflects that he has shared literally everything with his group; he has no secrets and it’s an amazing feeling.   The seven keys to building relationships that Mo has outlined in his book, The Friendship Advantage, are judgment-free, mischievous fun, vulnerability, kind-truth, reliability, sharing and generosity, and to share purpose and value. The combination of these seven help build connections wherever you are.   Mo provides an example of how this would typically play out in a company setting. The first thing to determine is how does a company handle or resolve conflict. After that, it’s time to set an agenda, and then have those difficult conversations to pull everybody onto the right track.   Interview Links: Forumresourcesnetwork.com Mo on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube  

An effective growth strategy is key to everything we do in scaling up. Growth strategy is a thinking game and today’s guest shares tools that will keep your growth consistent and help you figure out when to pivot when things just aren’t working.   Tiffani Bova is the Global Customer Growth and Innovation Evangelist at Salesforce and was previously VP, Distinguished Analyst and Research Fellow with Gartner. She is also the author of Growth IQ: Get Smarter about Building Your Company’s Future, which she will dive into on today’s show!   It took some time before Tiffani got into the groove of what she does today. In fact, it took her nearly eight years before she got her stride and felt comfortable giving intentional and helpful advice to struggling companies looking to grow.   Businesses were looking for that silver bullet, that ‘one thing,’ to turn their companies around and hit their numbers. The truth is, 80% of companies will experience a growth stall and fewer than that will be able to recover from it.   So, how can Tiffani help companies avoid the stall in the first place? She discovered many companies were not looking at the context of the market today. They might have looked into it briefly when the plan was made 12 months ago or 36 months ago, but few were following up with the market trends of today. Things move too rapidly in today’s environment and, by not keeping up-to-date, it can be a real growth killer.   Tiffani also noticed that it’s never been ‘one thing’ that keeps a company’s growth accelerating. It was always a combination of things that the company was doing that gave them the competitive advantage. For company A, for example, it was about entering a new market with the right partnerships and with the right sales model. That’s what led them to growth.   The third thing that’s also an important factor in growth is timing, which Tiffani calls ‘Sequence’ in the book. If you put partnerships in place after you’ve entered a new market, you may be delivering a poor service experience, which will end up breaking customer trust. Context, Combination, and Sequence are the three things that make up an intelligent growth IQ.   Interview Links: Tiffanibova.com Tiffani on LinkedIn   Resources: Scaling Up for Business Growth Workshops: Take the first step to mastering the Rockefeller Habits by attending one of our workshops. Scaling Up Website Gazelles Website Bill on YouTube