Start, scale, exit, repeat, serial author, secrets revealed, you’re listening to, I believe, our 140th episode. It could be 142, but definitely getting those episodes up there, and we are We’re getting a lot longer feedback, a lot more response to the value that we’re providing everyone on this show. Um, I’m gonna mute Kyle there.
Uh, boy, I don’t have a lot of, uh, features working right now. We made We’re here. Yeah, I know. Kyle, can you mute yourself? I can’t actually mute you right now. You’re not even a moderator. There you go, Michelle. Or Mimi and Michelle, if you could mute Kyle, that would be great. But today’s show is startup to scale up and you might not know this, but we are actually a podcast as well.
We do a live show. If you’re listening in a podcast, we do a live show every Friday at two o’clock Eastern. And we really like it when people come on stage and interact and and and talk about their experiences with respect to the topic that we’re going to have that that on that date and today’s topic is startup to scale up, which is basically the second section of the book.
And we had a number of sessions on startup. Uh, in the book, and we went through them and Mimi and Michelle will interview me initially, and we’ll ask others to come on stage and ask questions, but also if you’re in the audience and you want to share your experience of how you scaled your company. You know, the fact is that the vast majority of American companies and probably globally fail to scale and they fail to scale because they don’t have the right mentality as an individual, as an entrepreneur to scale, they don’t have the right systems, they don’t have enough money.
And they don’t have the right people. And that’s what every business needs. It needs the story, people, the money, and the systems. And in the book, Start, Scale, Exit, Repeat, we have four sections. You can guess them. Start, which is color coded as blue. Scale, which is red. Exit, which is orange and repeat, which is a light blue, and we have these colors for a reason.
Uh, we really wanted to color code the book so that would be as simple to understand as possible. It’s it was a book that, uh, took over 10 years to write two years with a staff of six to interview over 200 people. And in this book, we really do try to crack the formula of what makes a startup successful.
Of how to scale your startup and how to exit your startup and then do that over and over again. So we’ve been very excited since October 3rd. It came out. We’ve been number one bestseller. Uh, actually, I’ve found we’re number one bestseller in eight categories on Amazon from the audible to the ebook. Uh, it’s been an incredible response.
We just recently were selected by, uh, BookBub, uh, who’s going to be featuring it, I believe, on July 26th or July 27th. Sorry, not July, January 26th, January 27th. And they’re going to be featuring this book and sending it out to 350, 000 of their subscribers because they selected it, uh, and they had said that they thought it was one of the, the best business books they’ve seen in 2024.
Uh, today’s all about startup to scale up and what do we mean by, what do we mean by scale up? We mean taking your business, taking what you know with your startup and reinventing everything you’ve done. And that starts with you, the entrepreneur. Michelle, what do you think about today’s topics? Startup to scale up.
I love it. And I’m just going to like back up here a little bit and just say, you know, Colin. You don’t have to answer right now, but why would we want to start, scale, exit, repeat? This is like a really important question and I strongly encourage everyone to look at the beginning of the book because Colin does an amazing job explaining that of course we all want to be a unicorn, but there’s a much easier predictable way to build wealth.
It is extremely difficult and the odds are extremely stacked against you. If you’re just like, Oh, I’m going to be a billion dollar company. So this is a whole, you know, discussion. It’s, it’s, we’re not selling anything. This is not masterclasses that we’re selling or anything like that or speeches. It actually is his way of giving back.
And it is a way to build wealth for entrepreneurs by starting, scaling, and exiting. Colin, back to you. Yeah, uh, Michelle, just doing a sound check in here. Does that sound good? Sounds great. Oh, it’s not working. Okay. Yep. Alright, I’m going back to, uh, hands free here. Yeah, in the book. So let me be clear. If you want to read a book on how to create the next unicorn and get rich quick, this is the wrong book for you.
I mean, I’ve seen countless tech startups fail because the entrepreneurs chase the big win without properly building a solid foundation. Unfortunately, this occurs more often than not in Silicon Valley, what I nickname Silicon Valley disease. While I applaud the innovation and success that comes from Silicon Valley, that environment can also have its negatives.
Uh, yeah, we, we get into it. We really do. We recover so many topics in this book and, um, it isn’t meant to say start scale to a billion, become a unicorn and make a lot of money. It’s really all about what’s a more definable formula that can deliver a success and that success, I would say achievable to achievable.
I think, yeah, I think definable and achievable. I think you’re right about that. Actually. I like that. I like that. You added that word into there. Achievable because, because it really is very difficult. You probably don’t know this, but 75 percent of venture backed companies. Now, these are companies that have already been successful.
Generally, you think of them as being very successful. 75%, three quarters of these companies fail. Completely shut down and we’re talking venture backed. Okay. So what we’re trying to do here in this book is come up with an idea, start a business, get a sort of a footing, hit your first stage gates, get to a certain point in time where you’re comfortable and you can prove your model and then scale that business, take it to a certain level and then hand it off to another company or someone who can get a better.
Leverage from your customer base, a strategic buyer, cash in, take some money off the table and then do that all over again. And that’s really the thesis of the book. But today we’re talking about startup to scale up. So what are some techniques you use to scale your business? You know, you got to a point in time, you recognize, okay, I’m at this point.
Now, what do I do to scale? You know, my wife and I, we own a school 110 students. And 16 employees and we sold out a few years back and we’re talking about, well, how do we scale this? Like, what can we do? And so we can’t talk to a contractor who came in and said, could we add another floor? Um, and then we thought, and then we came back, well, it’s gonna be like 3, 000, 000 dollars.
Like, if they’re building a new building. And then you don’t have enough parking spots, which means you have to buy all your neighbors out as well, which would be a few million dollars there. And we’re like, okay, we can’t do that, you know, so we. We began to realize that that that concept was not very scalable.
It was a very difficult concept, but my wife does love running the school and she continues to run it today and it is one of the most popular schools in Fort L’Oreal, but it’s not a business that’s very scalable. So probably the first thing about scaling businesses is when you come up with your idea, come up with an idea that can scale right now.
You often don’t have the luxury of thinking of that at the beginning, you may have already gone into a business, so we want to think about ways we could possibly scale your business, but I will say that, you know, the first thing, uh, and then Michelle and Mimi, if you want to start asking questions about the scale section, the first thing that I will say is that most entrepreneurs fail to scale because they Get in the way.
They’re their own worst enemy. And what I mean by that is that they themselves hold themselves back from growth. See, it takes a big leap to go from being that startup founder who controls everything, who makes every decision, who delegates tasks to going to a leader. Who can coach other leaders who can delegate responsibilities, not just tasks.
And that’s how you scale. It’s this mentality of shift, a shift in your brain. And there’s a lot of techniques we talk about in the book. One of them at the very beginning of scale is all about scaling and zeros or 10 X. And I asked people to visualize your startup today and visualize it 10 times larger.
Now, who do we have on the team? And we don’t have to pick names, but we can definitely identify positions and what’s required for that position. Who do we have on the team? How much money are we gonna raise? What are the systems we need to implement? And by the way, there’s a lot of systems you can implement to scale your business.
That’s the good news about scale is that there’s been a lot of documentation. There’s been a lot of books and research done on how to actually scale a business. And a lot of that we covered. Of course, we cover that in depth in the book. It’s actually the largest section of the book. Of start, scale, exit, repeat is scale because it’s so heavily relies on systems and the systems needed to scale your business.
Um, and then there’s the story. How does your story change? How does it go from where it is today? 10 times larger company. So how does the story evolve? And one of the big components of that story is what makes you unique and different and gives you a competitive advantage over your competition. And that competitive advantage, we, we, it’s been called the X factor by, um, Jim Collins and then later.
Uh, Burt Harnish, who I’ve, I’ve, um, learned from and interviewed for the book as well. Uh, it’s called the X Factor. You know what makes you unique and different than any of your other competitors? Think Domino’s pizza, 30 minutes or free. Think national car rental. Just show up, just show up, take the car from the aisle and go.
These companies sold bottlenecks, the bottleneck of how long it takes to get a pizza to a house. Or how long, uh, it takes from, uh, someone landing at an airport to getting their rental car, not having to wait 20, 30 minutes in those lineups. And I do remember waiting many, many, many days in those lineups.
There’s a company we talk about in the book called the cookie delivery dot com. And what they did is they were a bakery and said, well, how can we compete with other bakeries in this, in this town? And they discovered that if they cook the cookies on the way. To the customer that they would be piping hot when they were received, and that gave them a competitive, competitive advantage, something that no one else has Michelle.
I know you’ve you’ve taken over now as CEO of podcom. They’re in our incubator here and podcom just for everyone’s. Knowledge has been on the ink 5, 003 years in a row, one of the fastest growing companies in America, you know, it’s going through its struggles. It’s a roller coaster. It’s not. I’m not saying we’re there yet.
I’m not saying it’s totally we can declare victory, but Michelle took over very recently as the CEO. And, you know, I often say to our team at. Paul, and now I’m saying to Michelle and I’m really, really want to get your perspective, Michelle, on, you know, what do you think makes paw. com unique and different?
What is it? What is paw. com X factor? Yeah, that’s, that’s a great question. Um, because as you said, we all know, you know, one of the key things when we’re growing a business or even starting a business, of course, is the differential. It helps you on pricing. It helps you in distribution channel. It helps you on branding and marketing in so many ways.
So what I would say for us, what we have learned through testing is that we have this, um, amazing design of a product that was really unique in the space. Um, for us, what our differential is that we’re able to bring to market products that are very good and healthy for dogs, but very elegant and stylish in the house.
That’s what I would say, Colin. Um, you know, it’s, it’s, we’re design forward. At a very, I believe we’re at a reasonable price. When you look at some competitors, we’re not chasing, uh, you know, the price down, we’re all about driving quality, but without sacrificing style. Yeah. And I would also add that you’ve done patents to, uh, you created unique designs that no one else has in the market, uh, a whole new category of pet rugs, whole new category of memory foam, dog seats, a whole new category of.
Blanket protectors for furniture in your bed, uh, areas that had never been invented before. Uh, or at least they may have been out there before, but the twist was make them unique and different, uh, you know, add some patented technology to do whatever it does. And I think that’s what. Made paw. com so successful.
I also find it interesting that we failed on a number of products. We recently, um, you know, launched a line of nutraceuticals for dogs and that, you know, we blew it with that. We almost, almost a million customers. And we’re like, Oh, let’s just get 10, 000 customers ordering once a month and we’ll be rich and.
You know, I think we only had 37 customers order and I was one of them. Uh, so, you know, we had that problem, uh, right now we’re struggling with the shampoos, uh, which are going on sale. I know you’re blowing them all out, Michelle at, uh, two for one sale next week,
but the fact of the matter is we never really succeeded at products that, you know, you could commonly buy at the pet store. We, you know, one of our big innovations on the car seat was that we had a. Double seater. So it’s two seats for the dog. So a lot of dogs are bigger. You might have two dogs and it’s, it’s a double seat.
And we even have a triple seat car seater and it’s a memory foam car seat and it’s removable. Now I’m not going to try to do a commercial here for, uh, for pod. com, but I’m hoping you can see the vision here of the story as being unique and different products that you can patent and that you can sell in the marketplace and that you can distribute.
Uh, very, very quickly through a network. I’m just going to add on here. Something that’s really important. You know, I, I know like everyone or a lot of people are like trying to. You know, be Elon Musk and do this revolutionary thing. But there is a lot to be said about incremental improvements and designs.
Like don’t, you know, minimize that when you’re thinking of and planning new products. Um, you know, now you might look at our product, go, okay, yeah, that’s amazing. It’s beautiful. But it really was a very simple. Elegant incremental improvement, so not everything comes at the cost of, you know, 10, 000, 000 of developing a platform just every day in your life, just stop and think when you’re, you know, ponder or why couldn’t I have something that looks better?
Or why couldn’t I have something that functions better? There’s opportunity there. And, um, Colin, as he has said in the book is like opportunities are everywhere.
Absolutely. Well, do you have any questions, Mimi or Michelle, uh, about scaling up?
If not, I can keep rolling along here until you guys get your questions answered. I have a question, because this is something that we’ve been running into, Colin. You know, we’re pushing the team, you know, like grow, scale up, and everyone’s like, Oh, let’s add this software. Let’s add this app. Let’s add this platform.
Like, how do we do this, Colin, it’s a loaded question, in a responsible way, because it’s easy to just like, add these things without getting a return. So I’m interested in what your suggestions are, Colin. So you’re talking about adding what, like software platforms, or? They all make these promises. Oh, your revenue will increase 25%.
Oh, you’ll get this much better reach. How do we, you know, kind of like navigate through this? So you’re saying like, it’s instead of like. People, money, story, systems, it’s, you’re getting buried by the system and it’s killing your money. Oh my gosh, you can start off for 500, but then when you hit a certain threshold, we’re going to take a percentage of profits.
How do we keep ourselves, like, in alignment? Yeah, one thing I will say is that I’ve done many software platform companies. We do some now, um, they’re about 90 percent margin and, and they are negotiable. I will say that they do have to have a return on investment. They have to make a material difference in the company and they can help you scale your company if they’re the right platforms, the right systems that you’re putting them, putting in place, but just taking a step back for a minute.
It’s really about when we talk about systems, we really want to start thinking about, um, Operating very differently than we do at start. We, one of the examples is, is let me actually tell you a story here. So going back to 2006, we’re running a publicly traded company and my brother and I were fighting, there were fights in the company and whatnot.
I had a board member who came to me and said that, you know, it was, it was over my head and that, um, at that point I felt like, you know, my days were numbered. At this company, even though I was the founder of one of the founders, my brother and I, and we decided to, um, I decided to call a friend and that friend said, Oh, well, you got to meet Patrick the end from rhythm systems is going to be in Vegas.
I know you’re in Vegas at the, it’s actually a 20 year annual retreat for EO entrepreneurs organization. So I flew into Vegas and I met him at a cafe and I said, look, I just got to get the board off my back. And Patrick says, um, Because he’d give me all these detailed stuff about what he’s going to do here and there and all his work and it sounds too difficult to me and I’m like, just to get him off my back and then he said, I’m not going to take you as a client, you know, so imagine it’s like a patient going to a doctor and saying, look, you know, I’m overweight, but, and the doctor says, you know, you should do, uh, change your lifestyle, change your eating habits, workout, and you’re saying, well, I’m not going to do that.
Just give me the pill. And, uh, no, the reality is you got to do the hard work and with respect to the business, it is hard work, but it makes your life a lot easier once you begin to implement them. So the system was we began to, no, let me tell you that. So we were flatline. The company’s about 25 million in sales, uh, software platform company.
Uh, and you know, very high margins, that kind of stuff. Million dollar contracts, uh, every, every month or two, we would sign up. I mean, it was, it was doing well, but the problem is we totally flatlined. The revenue was stalled and we, we had our first meeting. It was horrible. The fights and this that and the other and you know, we addressed some elephants in the room and you know, I’m driving Patrick back to the airport and I’m saying, Patrick, I apologize about what happened today.
He goes, No, this is perfect. You guys are trying to address the real challenges in the company. Well, something magical happened. We began to actually work together and have alignments through goal setting. See, we had implemented a platform called Rhythm Systems, which was a goal setting platform. And every, the company had the goals, we had three year goals, annual goals, quarterly goals.
And then we had individual goals. And we’re all focused on. These three to five goals that we have to achieve for the quarter, and we did that. We focused on winning moves. We focused on starts and stops. We focused on the people who should sit in what position on the bus, as Jim Collins calls it, right? We began to implement.
Uh, two days of strategic planning, 88 days of execution, weekly goal setting, daily sales huddles. Uh, we implemented a, this is one of the most amazing things too. We talk about this in the book, um, a sales playbook as well. We transformed into a sales driven organization. Um, And, uh, we began to implement different hiring practices, including profiling of new employees, all of these systems we began to bring in and the company took off.
We tripled our size in a few years and sold to a fortune 500 company. Uh, it had a very, very successful exit 17 times EBITDA trading at 4 and 55 cents a share and going to 10 and 55 cents a share the next day on opening after the acquisition was announced. And that, you know, that, that was an interesting experience of being an entrepreneur who just sort of used my judgment and we got ourselves, my brother and I got ourselves to a certain point, but we were stalling and we weren’t able to take it to the next level and we had to learn how to scale our values, scale the culture, scale the systems.
Uh, that was key. I will also say we had to hire very different people and we had to figure out one thing I talk a lot about in the book is figuring out your personality profile and I use something called disk. It’s pretty much free on the internet. You can use disk or you can use Myers Briggs or I think there are another, another couple of different systems out there, but you want to be able to really figure out your personality profile and identify what you’re good at and what you’re not good at.
See, I’m not good at sales. Um, I’m not and I’m not good at I. T. So I tend to hire people who are good at those things so that they can do that job for me or a partner with, you know, start. We talk about you don’t have the funding, but you can partner with others who compliment you so that you can scale your team can be a cohesive engine of different experiences, diversity and also different personality profiles.
And when you do that, Again, magic happens. And now you begin to learn to lead leaders and delegate responsibilities, not tasks. This is absolutely critical. You know, my wife is up almost every day at three o’clock in the morning and she’s up. And I know any startup in this founder listening to this is gonna sort of agree with this.
She’s not just worried about what’s going to happen at the school and this, that and the other. And she sort of runs it very much like she only delegates tasks. And I’ve tried to get her to read the book and to listen to the show and whatnot. But the reality is when you do delegate responsibilities, you’re not the one up at three o’clock in the morning.
See, an entrepreneurship is all about. Creating things having a vision and creation. It doesn’t stop 9 to 5. It doesn’t end at 5 o’clock. We’re worried about it more in the middle of the night than we are worried about during the day. We’re not. We’re at work about our formulas and I’m not saying like I don’t have those middle of the night moments now, but I do say it’s less.
Since I’ve been able to delegate a lot of responsibilities in my companies to CEOs to help, help run those companies, you know, we’re jumping around awful lot, but I, but I’m really wanting to talk a lot about systems. I really want to talk a lot about people. All right. Yeah. Yeah. Let’s slow it down. Let’s slow it down.
Just backup like systems. Like I’m like, Oh my God, I have to invest like a hundred thousand dollars. I have to, you know, hire a CTO or a CEO. Like, like what is the most rudimentary systems and how do we actually get started? Colin. All right, Michelle, you have to, you have to invest 8 and 99 cents. Okay.
That’s it. One time for you. Okay. That is the cost of the ebook and in this book, we lay out every system you really need to operate a business and you don’t need any actual. I’m talking about setting goals. Yes. You can use a platform, but you don’t need the platform. You can do the goal setting without that.
We outlined that in the book. I’m talking about strategic planning. Yes. You can hire a coach, but you don’t need a coach. You can do that. We outlined sample agendas. Okay. You’re not talking about these large technical instructions. Even sales, Yes. Playbooks we up, we define what should be in a sales playbook in this book as well.
Uh, and yeah, you can go buy a system that does that now. Obviously you want to use a pipeline software for your sales like, you know, there are some applications which are 30 a month for, you know, 50 a month. I understand that. Um, and we all have limitations, but I’ll tell you the biggest ROI you’re going to get on any systems would be one is a goal setting platform.
I think rhythm systems is a great platform. EOS. I’ve heard very good things about EOS. Um, I’ve also burn harness scaling up. He’s got a good program there as well. I think all three of those programs could make the biggest difference in your life when it comes to scaling your business, because the fact of the matter is.
They don’t cost a lot of money, and when you implement them, they can have a huge impact. The other one, I would say, if you’re on a budget, is really all about sales, uh, hiring a sales consultant to help you build that sales playbook, and also, um, uh, and also hiring great salespeople, and, and, and, and that’s critical.
And you get a huge ROI on those, um, but, but you can spend as much or as little as you like. And again, I talk about the book. It is really all outlined in the book. Start, scale, exit, repeat. That’s the name of the book. And we really did take on a lot when we put this book together. And we, but it isn’t just my experiences.
We interviewed over 200 people of which about 50 of the best interviews actually made the book and are in the book. And, uh, And we, and we, we talk a lot about that, Michelle, we go into a lot of detail about that. I know, so we have someone on the stage and I think we should jump into the audience. So please raise your hand.
We want to hear your experience on the subject. So let’s go to Naveen Naveen. Hey, hi guys. Uh, good evening. So my name is Naveen Kumar. I’m from India. So the topic is, I mean, uh, best, uh, bestseller. I mean, Regarding, uh, actually I have an idea to implement that startup in India. So, you know, uh, Ramayana in India, Ramayana and Bhagavata, anyone?
Nope, but, but go ahead. Tell us what, um, what your project is or your question, your insight, please. Just a second.
All right. I think we might’ve lost Naveen. So, um, let’s go to Aaron. Aaron. Yes. Hi, everybody. Um, it’s really enjoying the conversation here and, uh, also Colin and, um, I was taking some copious notes. So, um, my, my, uh, my donation to the conversation is, um, there was a question about, uh, systems and, um, I, I just had this comment that was, uh, so when we talk about systems, it doesn’t necessarily mean computer systems.
Or tech technology systems or platforms or signing up for, you know, some sort of system, but a system can just be a list of rules or procedures, uh, that you go through methodically, uh, on a regular basis or per per day or per transaction or per per whatever, uh, dictates in your business. Perfect example.
I took my car into for oil change in this place. I don’t go there very much like oil change wherever is convenient, but this particular place is I haven’t been there before. I sat back and I watched what they did for every customer that came in that wanted an oil change. They have other services, but they made them fill out this form that has their name, their phone number.
Your address, and uh, it also, it also had a list of check boxes. You know, when’s the last time you did a front end alignment? When’s the last time you checked your tire pressure? When’s the last time this? It had maybe about ten little items. And, um, if anybody checked anything like that, they would say, Hey, would you like for us to check on that while you’re here?
Most of the people would say yes, and they would upcharge. And, they also had the names and phone numbers of everybody that they serviced. So they could, in theory, take all those papers and put them into a CRM and, you know, now they have a list of customers and, uh, how to contact them with phone numbers, email addresses, and so on.
But the point is, is they have a system. When people come in, they’re trying to make customers. They’re not trying to just once and done and out the door and never see them again. They want repeat business. So they were taking that, um, uh, They were taking, that was part of their system. It was a system of paper.
Paper, you know, we can fill out a form. We can even use a typewriter and fill, and create a form and make an old copy machine and make copies of that typewritten thing and hand it out to people if necessary. If that is a system. Uh, so, uh, that was my comment, uh, about that. Um, I’ve, I’ve implemented, uh, lots of systems.
Uh, uh, created multiple businesses. And one of the best things that you could use to make a good system for yourself is, uh, is collecting data. You collect enough data in a, in a specialized way. You can see, okay, how often does somebody walk in the door? How many phone calls do I get? What are those calls about?
You know, and you can collect data. And then after a few months of collecting data, you go back and you analyze the data, you can say, oh, okay. 30 percent of the, 30 percent of my calls come in between 8 10 o’clock in the morning. Hmm. Or 50 percent of my calls come in, you know, between 2 and 5. Hmm. Maybe I should stop scheduling myself for, for things during those times so that I’m more available to take some of those calls.
And then I schedule myself in the morning. Something like that. That is a system. You know, that, that is a system of creating a system. You know, for yourself, that works in whatever niche you have. Um, but I feel like I’ve been talking a lot, a lot, so please continue the conversation. Thank you. No, Aaron, I think you hit it, you hit it right on.
And, you know, in the book I talk about, you know, one of those basic things we did in our company is, is that every year. Uh, in Canada, we started up in Canada there. And if you’re a Canadian, you know, there’s this holiday called civic holiday. It’s the first Monday of August and it’s, it’s a government holiday, but not a statutory holiday.
And every year we’d get the question. Some would ask, is it a holiday on Monday? Is it a holiday on Monday? Or is this a holiday that a holiday and it just was driving us nuts because the whole drama that was created around whether it’s a holiday or not a holiday. Was just unbelievable every year and one day we said what let’s just put it into a policy We’re gonna write out the policy and we say these are the holidays And by the way, I actually have my staff now choose the holidays I don’t know, you know, I know in the United States here.
We a lot of people say well, we’ll work on Columbus Day or whatever, but we don’t want to work on the Friday after, after, uh, Black Friday after Thanksgiving. So it’s, so it’s interesting how, you know, we can actually alter that and change that, but we build a policy around that. And next year it comes around.
No, not no dram at all. Nothing at all. So we want to do that. Not once. We want to do that 50 times or 100 times or 1000 times. And, um, you know, another example, taking it even further, Aaron is we had a gentleman on by the name of George Waltier, and he has a system called power talk. And literally through language, you can change, uh, the way that you do your customer service the way anyone in an organization communicates with anyone else.
And we talking about simply changing a few words. Uh, like from butt to end, or I’ll be happy to versus I have to, and this is a training technique that we brought into, uh, our first company in nineties, brought him back again in the two thousands to other companies and actually literally had him on this show about a year ago.
And you can search for it if you like, um, startup club, uh, startup. Dot club or startup club, George Walter or power talk to startup club, power talk on Google and pop right up there. Uh, if you don’t, if you don’t find it on startup dot club right away. But, uh, but it’s absolutely fascinating show. And it’s a very simple system of what institutionalizing positive communications and now with AI, I think we can actually utilize AI as sort of an intermediary.
To institutionalize, institutionalize those communications as well, at least in a written form right now, maybe that will change down the road, especially if you’re using offshore labor, but you’re right, some of the symptoms or systems are very, very simple, and I think one of the books that inspired me, I talk about in this book is the E Myth by Michael Gerber and how, you know, he talks a lot about, it’s all about using the systems to scale your organization.
When you’re small and it’s all about you, But then when you begin to grow, it needs to be a very different model. Uh, very, very few companies. Scale in the United States. Canada. It is one of the most difficult things to do yet. It is documented and there is ways you can scale if you follow these systems.
All right. Very cool. Gabriel. I see you came on stage here. We’re happy to hear from you if you have a question or if you want to tell us, um. Some ideas of how you scale businesses as well. Hey guys. Hey, Colin. How are you? Um, yep. Thank you. Uh, go ahead, Gabriel. Sorry, Naveen. We’re going to come back to you.
Okay, go ahead, Gabriel. Um, really quick, Colin. Um, so I’m located right here in Denver, Colorado, and I have two businesses. I have one business running already and Another one, um, with couple partners that we’re going to start working. I mean, we’re going to start, um, right now we’re planning everything, raising capital and everything.
And so my, one of my questions is, do you think the second business I’m building, it’s going to be like, uh, I’m building a bank, uh, we’re going to borrow money to people and. And my idea and everything we have, um, it’s, well, my question is, should we open our doors? Um, with a bunch, with like a bunch of employees, you know, like, uh, cause we’re going to have a team, you know, we’re going to be like 80 plus people and stuff like that, whatever.
But I was wondering, do you think that’s a good plan or do we, or do we start with like, like with 40 people? Cause I’m, I’m planning, cause I’m doing my numbers, you know, and. I think we’re going to be really, we’re going to be really successful, you know, and we’re going to have the capital to back it up, you know, to help, you know, to pay the payroll and everything.
But that’s my question. How do we, if I’m going to start, you know, we’re going to open our doors. How do. Um, in other words, can I start big? Like, can my, can my, can my business open big, you know, with a lot of people and, you know, the systems and everything. Do you think that’s a good idea? Even if we don’t, even if we don’t know if it’s going to work.
No. And here’s why I say start small scale big. Okay. How do we prove our concept? How do we get a concept that we can prove one branch one location? One concept, how do we prove it? And then when we prove it we scale big. Okay. So let’s talk to you about paw. com. We have launched products in big ways right out of the gate because everybody thought they were going to be The most amazing things since sliced bread or whatever it is.
And I’ll tell you right now, we have like a hundred year supply of shampoo. Now don’t get me wrong. It’s great shampoo and Michelle’s putting it on sale next week. But that being said, we have other products where we launched them very. Very small launches and four years later, we still were not on Amazon.
We still were not in distribution. We failed to scale. See paw. com. And maybe this is relevant for your company or everyone here. We have a saying test and fail more. Okay. Test and fail more scale winners. Big cut loses quickly now. Cause the reality is when you launch a business, when you launch a startup, we all know the odds.
Of everything succeeding all the time are slim to none. But what we do know is that when something hits and the concept is good, then we scale the puppy. We, we go big on it and when it’s not good, we shut it down. That’s why we say test and fail more. I’d highly encourage you to vet your idea, vet your concepts and try to prove it and then scale.
So. When we’re talking about proving a model in start, you know, we want to do the first proof. We want to get to an MVP or the first 100 customers or whatever. When we’re in scale mode, we want to be able to prove our concept by, um, adding additional. Levels of expansion. So for instance, we might have Harvard, um, Facebook, they had one school and then they decided Facebook to go to 10 schools and then they decided to go to 100 schools.
Then they decided we have to prove our model outside the schools. Now we got to go into other markets as well. Oh, we got to prove ourselves outside of the United States. We got to go to other countries. When we launched Hostopia out of Canada, we signed up nine of the top 10 telecoms in Canada. We had proven our model.
We actually got VC funding at that at that junction. Um, but we had not proven that we could sell this technology outside of Canada. You know, it wasn’t until a few years later where we have a lot of hard work, by the way, a lot of hard work to go from Canada to the United States, but we eventually started winning very big contracts like Earthlink, AT& T, Vodafone, and that was a lot of those contracts we won through.
Um, the X factor and stuff that I talk about in the book, but we did win those contracts, so we were able to prove our concept there. And then we took the company IPO. Now that is exactly what I’m talking about. Like at each stage, you think you’ve proven the concept, but yet, but there’s always more to proof and investors are always looking at throwing gasoline on the fire.
They want to just throw that gasoline and let it go. They don’t want to go into a concept that’s not been proven yet. And that’s very hard to raise money and tends to be at very low valuations. Okay. Investors would rather have a much higher valuation, but just simply know that the funding that the company is going to get is to accelerate the business.
So I know I don’t know a lot about your particular circumstance. I hope I wasn’t too mean there. But I was just trying to point out is that we want to prove as much as we can before we scale it. So I cannot just add something here. Sorry. Um, I’m I agree with 100% Everything that you said. Uh, uh, Colin. Uh, but you know, in going back to Gabriel’s uh, uh, question and comments about, uh, scaling, you had mentioned that you have a lot of capital.
I’m not sure if I understood that right, that you have a lot of capital. Um, when you say capital is that, if that, if that means, um, uh, uh, monies from, uh, investors already that, uh, already have a financial interest in it. And a lot of these guys are going to want their, their money back. So, you know, capital, yeah, that’s great for startup, but they’re going to want their money back.
And you have to think of that, uh, uh, more like a, more like a responsibility in the loan. But when you scale, you should be able to do something on a small scale, something small to prove your concept, like Colin was mentioning. There should be a way to do it in a small way. Instead of, uh, starting with, uh, 60 employees, 40 employees.
See if you can do all the steps just by yourself on some sort of small scale. And if it’s not possible to do it on a small scale, then try to do it on the smallest scale as small as you possibly can to work out all the kinks, because there will be kinks. Uh, you may imagine that. All of the, uh, all of the parts are going to, uh, fit together, almost like the parts of an engine.
But once you get all those parts together, you try to start it up, there’s gonna be kinks. You say, oh, that gear was too big, or that gear was too small, or these don’t quite fit together. And then you have to go back to the drawing board and, uh, make adjustments. And you make those adjustments when you’re small, not when you’re big.
Because if it’s, if it’s a small problem when you’re small, then that’s all it is, it’s small. If you make the mistake when you’re big, it’s no longer a small problem, it’s now a big problem, because you’re larger. Uh, so work out all the kinks, uh, when you’re small, and uh, grow with it. You know, don’t, I, I would nev, the only time I would suggest to someone to start big, I’ll say that again, to start big.
Is if you have done it before, okay. Like let’s say, you know, if, if I had to start my businesses over again, if I had to move out of the country and I had to shut all my businesses down, I could theoretically go move to another country and start all my businesses back up. Approximately the same size as I have them now, because I’ve done it before.
I already know my systems. I already have things in place. I already know, uh, how people think I already know the market well enough. You know, I might have to make some adjustments, you know, to like another country or something, but I can start big because I’ve done it before. But if you’re doing something new and you don’t have the.
If you don’t have the concept down, then you have to start small. It’s a huge, huge mistake to start big. Thank you. And Naveen, I see you’re flashing your mic. Naveen, hold on. Naveen, I see you’re flashing your mic. I do want to get a response from Gabriel first and any of his thoughts, and then we’ll jump right to you Naveen.
Is that okay? Yeah. Gabriel. Thank you, Colin. And thank you, David. Um, let me tell you guys really quick. Um, I have the capital, but it’s my own money. So like I said, I have two businesses. Well, one is running, running good, making good money. And that one, that one is about real estate. We build condos and houses in Mexico, Tulum, Cancun, um, Mexico city and.
These places, you know, and we’re making good money. And the second business that I’m building with partners and, and guys, you know, like I’m building, you know, I’m building the whole, how are we going to do it? And everything, you know, that one is about, we want to borrow money. To people, um, in Mexico, we want to borrow to small business men in Mexico, you know, like small companies, you know, and, and we, and we want to become their partners, you know, and, and, and I, I was, well, I was thinking.
But now that you guys opened my mind and everything, I’m not gonna open, I’m not, I’m not gonna open my doors big, you know, um, because I was thinking to use my own capital that I have, you know, I have a couple, um, I have some money that we, that I’ve been raising for my own company and a couple partners that they trust me, um, and I want to, the thing is that, I don’t know.
I don’t want to put emotions or whatever, but I have a feeling that it’s going to work, you know, I have a feeling is when I work and that’s why I was planning to open big, you know, and, and, and, and then, and then I’m going to build a couple of things inside my business to, you know, like I’m gonna, um, I’m going to build a couple of things in my business, my bank business, you know, you know, we’re going to build an app and I’m going to have my own, Okay.
We’re going to have our own coin. I’m going to say coin, like, uh, I don’t know my guy in Mexico is working on it. He’s, he’s a good, good technology guy. I’m going to say, and he’s, he’s going to build like a coin for us. Um, I don’t know if it’s going to be like a crypto coin or whatever coin, but we’re working on it.
And then, so, um, that’s it. I’ll, I’m later on, I’m going to get, I’m going to get private, private. Um, private money, but for now, I’m going to, I’m going to do it with my own, with my own money. But at the same time, I’m not going to lie to you guys. I’m a little scared cause, cause I don’t want to really take a lot of money from my other business, from building houses in Mexico, I mean the condos and everything.
Um, I don’t really want to like, I don’t really want to like, I’m going to say suck it up. You know, I don’t really, you know, um, I’m kind of scary, you know? Yeah, absolutely. Gabriel, we appreciate you being so open with us. Uh, and, uh, I will say with a business model like that. You can take a small geo, uh, and, you know, try to win in a small geo.
And if that works, then you can expand to multiple geos, many different techniques. It’s interesting. You’re you’re at a stage in your career where you’re you’re looking at actually the repeat stage. And I do. I really would encourage you to. To grab a copy of the book, start, scale, exit, repeat. And there’s a lot, I think, that can help you there with that.
All right. Uh, Naveen, thank you for being patient. We’re coming back to you now, and then we’ll drop down to Tiffany. I know we got nine minutes left before we jump over to Entree, where we’re doing a, today we are doing a presentation, uh, which I delivered, uh, at numerous times in, in live audiences. Uh, PowerPoint presentation and open Q and a on what makes a startup successful.
And if you’re listening to this in podcast or replay. Uh, you can search for that video on startup dot club or on YouTube. What makes a startup successful masterclass. All right. Naveen. Uh, yeah. Thank you, Colin. Thank you for this opportunity. Yeah. Hello guys. Uh, hello everyone. Uh, my name is Naveen Kumar.
I’m from India. So basically I’m a software developer. Uh, I’m currently, uh, leading a team of 400 talented individual peoples. So I’m reaching out to, uh, route, uh, reaching out to today with exiting a proposition. So my thought is that, uh, we are working on, uh, brink of launching a groundbreaking software company.
So that are, uh, driven by a innovative ideas and highly skilled workforce. So have a, with team of 500 professionals. So those are, uh, well, uh, positioned to take some, uh, diverse of challenges in the software development landscape. So our vision is to create the cutting edge solutions to that, not only meet the needs, uh, today’s.
Today’s market, but, uh, uh, we also, uh, give some of the pathway to a future, uh, like advertisement butter that, uh, we can provide that though our expertise to that dedication to our team to make us the confidence. So our ability to make the significant impact in the industry. So, my idea is that, uh, if anyone want interested to exploring the investment opportunity to in India, in Hyderabad, so that can be helpful to, I mean, uh, business purpose or individual purpose.
So that in says that, uh, could contribute our. I’m wondering, you know, we’re not really doing pitches here, but if you want to just drop something in the chat, uh, that would be probably ideal. I appreciate you coming on, but we’re not really doing pitches. I don’t really want to value the time. We have seven minutes left because we’re doing a live show here and I’ve got to jump to another live show at three o’clock and I want to give Tiffany an opportunity.
But if you feel free to pop that into the chat and then and then I’ll be able to get an understanding and maybe you’ve got a link for us to check out as well. Thank you very much. Naveen. Tiffany, thank you for coming on. Thank you, Colin. Thank you all for having me. I appreciate the invite, Michelle, and I have a non profit, and so I’m just always, you know, fascinated.
This is my first year with my 501c3 and having my EIN, and it’s, uh, it’s quite a learning curve. I’m excited about it. Thank you, everyone. for having me. everyone. And supplies to uplift teachers there. I’m a teacher here in the U. S. and so that is what I am doing. And I’m just always interested in, I, I, scaling, I heard all the, you know, things start all, etc.
I have, I have proof of concept and, and that I have gone over to Africa twice and brought people with me there. And I have two schools that I am. Building and, uh, have a brand new I have a great product. Um, and I guess my question is just is kind of how. You know, does it do that? What what kinds of things do I need to look at differently than maybe?
Yeah. Can you hear me? No, sorry. It’s coming in a little choppy Michelle. I don’t know if you heard.
It was a little choppy, but Tiffany, what I heard is that you have two schools. Is that correct? And you’re working on scaling it. Exactly. Yeah. So I have, um, is that better? That is took the air pod. Um, I, yeah, so right currently I have in Tanzania that I’m working on and, and I’m looking at building, um, space to educate the parents, the moms now as well.
Um, and I just, I’m just curious what you, what. And ideas for nonprofit versus profit. Is it different? Is it not different? Um, and, and yeah, and, and also, you know, working, uh, with, with other countries, et cetera. All right, call you got that. So Tiffany has schools and she is in nonprofit and, you know, she’s just wondering.
How do you scale a non profit? How is it different? Or, you know, like, how does one go about defining that and building those processes and those goals?
Yeah, I really believe, it’s funny because we own a school, it’s actually a for profit school, although, you know, I really don’t make much profit on it, but, um, So I do relate to it and understand where you’re coming from. Uh, I don’t, I do believe there’s a lot of, uh, techniques and the more that you can operate a not for profit as if it were.
A for profit, the more successful it can become. I believe it’s important to implement those systems. It’s important to implement strategic planning. Two days of strategic planning, 90 days of execution. It’s important to have goal setting goals for your company. It’s important to have winning moves, you know, just because it’s a not for profit doesn’t mean it’s not for success.
It is something that we want to succeed, and it’s not easy. I know that because we run a not for profit, a 501c as well, Help for Ukraine Club, and uh, it’s, it’s money that we raised to give to a hospital and victims of the war in Mykolaiv, Ukraine, uh, a
It’s a challenge, but if you just take it, if you just take it and do in, you know, post it, you’re not going to succeed while you, you need to be able to scale it. You need to be able to, to create a vision and the things that we do in a for profit, the things we talk about and start scale, exit, repeat are 100 percent applicable and you should consider using, you should have a four sticky note business plan.
For each of your businesses, it just because it’s a not for profit doesn’t mean it’s a not for success. It should be a success. Yeah, and I’m just going to weigh in a little bit here in my limited experience with nonprofits. I don’t know, Colin, Tiffany, but I think if you had. A nonprofit that was very organized and very explicit about goals and metrics and really executing.
I think you’re far ahead, many nonprofits, right? Because you’re trying to, you know, ask people to, um, you know, donate money typically, maybe not in your case, but typically, and I think the problems that nonprofits face is there’s, You know, no transparency, lack of accountability, but I would just try to really highly crystallize that message and be very, very specific and transparent about the processes.
And, um, you know, what’s under the covers there.
I love that. I love that so much, Michelle. And I, I appreciate that is exactly what I feel, uh, strongly about is the transparency and the clarity. On, you know, where those donor dollars are going and how much is actually getting, you know, it’s all where it exactly is going. Like you just said, the transparency.
So thank you guys. Yeah. And, uh, and appreciate it. Systems of the same. It’s awesome. All right, Mimi. I don’t know if it’s possible to put the link for entree up on the above here right now, but yeah, I’m going to jump over right now. This is a new platform of entrepreneurs. You know, it’s, it’s people who have entrepreneurs, they talk about many different topics, sort of like a clubhouse, a little bit more technology, you know, it does videos and it also, um, allows me to do share presentations.
And I’m gonna, you know, I’m starting the event right now. Uh, we are, are opening it up and it is start scale. I could repeat what makes a startup successful. So thank you today, uh, for joining us on this show. We’ll see you on entree. Awesome. So, yeah. So Mimi, why don’t you tell us what’s coming up next week here on clubhouse?
And give us a little information if anyone needs help with Entree.
So I just put the link to Entree right at the top up there so that should be easy to get to. You can use it on a desktop or on a phone which is great. And next week we are discussing, um, corporate law. We’re speaking with two business attorneys who specialize in trademarks. Yeah. So I think that will be a really interesting stuff.
And they’re great, too. One is Mike Rodenbaugh and one is Jonathan Frost. I’ve worked extensively with both of them. Like, it’s a wealth of information, especially for those in the audience that are starting companies or, you know, have products or existing products. They are very practical and pragmatic, and I strongly encourage you to join us.
As they will answer any questions that you have.
All right, Mimi, I think I’m going to head over to Entree. I hope others can join us. And I think that is the end of this week’s Serial Entrepreneur Start, Scale, Exit, Repeat. And we’ll catch you next week here on Clubhouse and right now on Entree. Thank you so much.