Watch This to Grow A Business The Right Way

If you're building or scaling a business and you're constantly second-guessing your decisions, you're not alone. Over a decade ago, I joined what was at the time a very small family business and factory, which we eventually grew and scaled to a $180 million exit. It wasn't a smooth process at all. I saw wins, I saw losses, I saw the whole thing almost fall apart multiple times. I had personally never believed that I would be able to contribute substantially to building something that ended up being so big and so successful. is nine lessons from nine years from scaling a business that I wish I could go back and tell my insecure uncertain self. So, out of year one comes the lesson of shared responsibility. Everyone at the start has to know how to do everything right. And you're going to want to keep this hold on to this as long as physically possible. Never let this advantage go. You need to know how every piece of the business runs. You don't need to do it forever and you don't need to know everything about it, but you need to have a pretty good idea of how every part of the operation runs. Obviously, people are going to argue in the comments that, oh, once you get to a scale, it's impossible. CEOs don't do it. I get that. But when you get to that scale, you can make your own video about this. I don't really care. We were advantaged by knowing the ins and outs of the business so many times, even to the point after we got acquired and we knew down to the details what every part of the business was doing. And no one in the acquiring business knew the different components of their business in the same way. No one could answer questions fast. No one could even give a rough idea of things that were happening because they hadn't done it. They hadn't gone through and done it. This is a huge advantage. So as we were growing, at one point we set up a content marketing team. So these guys were going out physical location and shooting for hundreds of clients, shooting with cameras, delivering content, etc. and we all had a background or a history in both camera equipment and working with clients with the camera equipment, delivering footage, etc. So, when it came time to develop an entire product suite, which involved us managing the bookings, the calendar, everything like that, there were about 500 questions that we could answer that we didn't have to ask people for their advice on. Now, when you're hiring really good people in a specific area, they're not going to have the best advice for you on the best way for a system to operate, the best way for the business to make decisions for everything the business needs to consider. A lot of the time you're going to get stuck asking certain people for like how do you think this should run? How do you think this should work? And the advice can be a bum steer unfortunately because they don't have as much context about the rest of the business. So the more that you can have a rough idea and say a lens over the entire process, it's a secret weapon and knowing how to do everything in the business just continued to pay off year after year after year. And over time, the speed at which you can make decisions can be 10, it could be 50x what bigger companies who have to go and ask everyone, ask the customer, ask the staff, ask this team over here, ask that team to ask that team. You can outperform them. You can out build them much faster. So, this leads into what I was learning in year two, which is how important fast information cycles are and how much of an advantage they can be if you can maintain them as you scale. Because from what we saw, it got harder and harder to have direct information lines. The bigger businesses have almost the worst sight lines to the point that everything needs a spreadsheet. Everything needs five meetings just to get everyone on the same page. Keeping clear lines of what's going on and having the information be able to come back as fast as possible is one of the most powerful things that you can try and maintain. When we started, we were all in a tiny room. We were all together and we could hear everything that was happening. Obviously, we could opt out from things and the bigger it got, the more people's responsibilities got more focused. You had to tune out certain things cuz they didn't matter. But we would hear the support calls were made and customers were complaining and probably should have given you this context at the start. I was the designer both UI, UX and the rest of the business and strategy alongside Ken who was coding the product. We were in the same room as Frank who was on sales, Jack was taking support calls and we heard the support calls getting made. You could hear things that were going on that there is no way you would hear if you don't keep these clear sight lines that I'm talking about. When we were acquired and I was working in the business that acquired us to get research done on the customer was like a six-w week project where you had to involve product design, you had to involve the people who speak to the customers. You had to set up meetings. You had to do all of these things that it took so long to get information that by the time you got the information, everyone sort of forgot the context of why you were getting it. Conversely, but when everyone's in the same room and you can overhear the support calls, you know exactly what's going. you have your finger on the pulse like crazy and you can fix things really fast and this is just such a huge advantage for a small business that's trying to scale that you can fix things really really quickly. It's really important. So maybe a customer gets off complaining about something that happened with either our service business or the software side of the business. We could talk about it straight away or choose not to talk about it and just say that doesn't matter right now. And then by the same token, if Frank got off a sales call or was on a sales call, we would hear the things that he was saying and be able to sort of guess at what needed to be done. So you would have directly what new customers potentially wanted from your product. This was good for us because we were in business to business and it was persontoerson. But I think all of these things can still be done with a digital first international software as a service self onboarding sort of business. So the things that we've brought into this business are having really clear oversight over customer support requests, putting them into areas that everyone can see it, having engineers work over the support tickets because one of the best things you could ever do is have engineers actually address support tickets because they'll see things that are really easy fixes because they understand the codebase and they'll be able to implement them and they will self-filter out the more complex things and report on them as well. So that's super useful. And the same thing for sales. You can't do it with people not talking in the room, but you can have really clear feedback cycles, really fast ones, if every sales call is recorded, if the insights of what the customer is after that don't match what your product currently does reported back on. And anyone who's designing product, anyone who's building product can be aware of what everyone's saying. And we're trying our hardest to keep this as a really, really important lesson learned from working in the past business into building ClipFlow. If you've got the really fast information cycles, you'll be able to act on them fast. You just want to make sure that you've got the team and having those really flat information cycles, you will be able to develop features fast. You'll be able to make the better decisions. You won't have to ask many questions. You will, just by the nature of knowing that stuff, waste less resources doing things. Like I said, one of the biggest problems once we were acquired and we're inside this massive business is just how much that slowed everyone down because you had to ask people three teams removed for information and they didn't have the information. They had to go ask a customer for it. So the configuration there was nuts. If you imagine trying to get a saleserson on a phone to record their notes correctly, which they're never going to do, get them they're probably going to go into Salesforce. get the Salesforce notes fed into a place where product has access to them is like it's a disaster in bigger companies. The sight lines are not there. But then you've got what was one of the hardest lessons to learn for me by year three was letting your fires burn. So obviously you've got clear sight lines of communication. You can hear customer support complaining about stuff. You can hear the customers complaining about things. Lots of sales calls reporting the same issue. But you do have to learn how to let the fires burn and get comfortable with not addressing things because unfortunately you can't do everything for everyone all the time. You do have to let things filter up. If you're an empathetic person and you're like, I really feel for someone's pain, they're having a problem and I want to be able to solve it for them. Being able to say no, I can't solve that right now is going to be hard, but it's going to be one of the most important. I think it's not about being unable to address them. It's about choosing not to address them, which sucks when you're facing a person, talking to them face to face and say, "We're not going to do that right now." Especially when you're clamoring, try and get money in, but you do have to do it. And a lot of the time, you won't see the cost to the business in the long term of saying yes to everyone, if that makes sense. And this extends not just for customers, this extends for team members as well. Is really hard if you're building a team to hear that people are unhappy with certain things. And sometimes you just have to sort of deprioritize what people are unhappy about for something else that's going on. Kind of like the whole you've got to fit your oxygen mask before you fit your kids oxygen mask. Sometimes for the business to survive you have to let other things burn for a while. So we had an entire signboard installation team physical people going out installing signboards. And in that team, people who were unhappy in their jobs and we also had customers that were unhappy with things go out in the system. And sometimes you will have to basically say, I can't do anything about it right now to stay focused on whatever the most important task at hand is. It's about operating on a longer time horizon than the right now pains. And the right now pains will always punch you in the face, but the long-term pains will stop you walking right sort of things. instead of worrying about solving that single person's pain. Now, is there another option that will make their job easier down the road? Like when we're talking about leverage and software, those things obviously also increase value. So, year four is right around the time we were learning how to say no to shiny objects. Shiny objects are great, especially for like addition span people who are always just excited about new things. The delivery of the existing thing is way less exciting than making new things. and we wasted countless hours and hours discussing potentially doing other things. Especially because as a business grows, you're going to see lowhanging fruit. You're going to see things that are tangentially related to what you're doing over here. And you're going to go, "Oh, that's pretty good. We could just, you know, spool up a little tea and go do this. It'll be easy." It's never easy. You're going to be testing a lot of things and expanding, searching for new ways to make money. And unless you're really in tune with it, you're not going to see the opportunity cost that you're losing. There's a lot of things we did at the time that I didn't see as making a mistake at the time. Looking back in hindsight, I'm thinking like, well, if we'd focus at this point in time, we would have had less stress in another area at another point in time. So, focusing on the short term of like, hey, let's go take some money here, let's go take some money here, could really be hurting you long term. At one point, while we were growing, we were making a small amount of money from the system. We're making a medium amount of money from the sign services. Basically what we were doing, we were building templates for marketing and people were doing rebrands for the clients and we would have to redo all our templates and then we started hearing about how much money these rebrands will cost and we were like, "Okay, that's $100,000. I can do that. That's easy. There's a lot more work in it than you expect. The time commitment to do it is more than you expect." And every minute I spent doing one of these rebrands was a minute I didn't spend making the software system better. And making the software system better had a better return. At the end of the day, it is completely indeterminate how much difference focusing and not doing all of the offshoots that we did would have made. And in some cases, the offshoots really lifted the business up as well, like helped give us exposure. There's no hard and fast rule here. Just be avoiding shiny objects as much as possible. Make sure they really earn their place. Taking your focus because if you don't make them earn their place, it will hurt you in the long run. And that leads pretty well into year five, which is doing everything well. Everything we did, we tried to do really well. But by doing lots of things, you can't necessarily do everything well all the time. So, you're going to have more than one iron in the fire most likely, unless you didn't need this video at all and you're already hyper laser focused and you're an excellent person, in which case, just turn the video off, dude. You've got this. Having heaps of irons in the fire is natural in business because you're chasing finding where to make the most money. So you're going to start a business over here, a service bit over here, a software component over here, product over here. Every time you go off and you do a different thing, a different fork of the business, the net benefit of them all being done well is an overall lift and things come up. Rising tide lifts all ships. You do a really good job over here. You can then say, "Look at what we did over here. Now go buy this thing that's worth more money to us in the long run." So we did this with service business doing the videos and we would use the videos as due to evidence that we knew what we were doing and people would see that the halo effect of the business the subscription business which we wanted long-term the income to eventually replace all of the service business stuff. It made us look good, right? But inversely you can't have everyone doing a good job all the time. Sometimes things went wrong. Video could be bad. One of the sign boards something could go wrong there. printing could go wrong and people would negatively associate you in the same way. Same halo effect but much worse consequences. Every business unit you have gets tred with the same brush. This was a bigger problem for us cuz we had a lower total addressable market. If you've got a massive one, you might be able to just burn bridges both right and center and doesn't matter. But I wouldn't recommend it because I think reputation integrity carries you around. If you're doing sales and you're saying we do a great job and you don't do a great job somewhere, that's just not going to fly long term. And then the other thing that was happening which is trying to do everything well. One of the big components is customer service and support. These things all bled together. When you're a smaller business and you're scaling everything bleeds together and it confuses your team's ability to do their job because for us it was like the support for video was coming into the support for software. Support for the newspaper ads was going to the software people. Everyone had to know so much. They couldn't do any one thing well. So their lack of focus or our lack of focus running the business, we had so many different things made it harder for everyone to do their jobs because they didn't have one thing to do and do really well. The people who did have one thing to focus on generally performed much better than the ones who had to think about so many different things, take calls for a video booking know how to support for the software. It's too many things for someone to in one day focus on without really messing with their head jumping around. And then a problem with the software could negatively impact the people working in the video business. And when you're doing this, whichever your highest income is more a risk by nature than the other thing, then as we're growing all of these different businesses, different types of businesses, different teams, etc. We get to around about year six, scaling with people versus scaling with systems. We're doing a lot of things quite well at this stage. So the number of customers is growing. The number of support requests is growing. And we had to hire a lot more people in customer support and template building. And it's perfectly natural to need to hire people for support, especially in a businessto business, but we had to hire more people than was probably necessary because we didn't make the time to fix the systems the first time. So, we were flying by the seat of our pants. We're developing new features all the time. We're fixing bugs all the time. It might be customer support problems. It might be operational problems, which we would typically like to fix in the software. one, we didn't have enough time for it because we were also, like I said, building the software for the studio side of things, building the software for the template builders, building the software for the customers because we're doing so many things. We just hire people and it's perfectly okay to hire a lot of people, keeping in mind that the costs obviously go up and the management cost of all of that goes up. It's a really good time to bring in new customers, but that had a really high requirement of work for onboarding. And every time it happened, we knew that we could spend more software development time to make the process much simpler or to reduce the cost of onboarding or we could hire more team members to get the work done. And a lot of the time we ended up choosing to hire more people and that's because we're resource constrained in development and I believe a lot of that is down to how many irons we had in the fire. Like I said, I don't think it's an issue that you hire people. However, I do think that the people we hired because we were desperate for people, they're not the people that are going to lift the business up and really take you up another notch. They're the people that like they can do a great job of doing the job, but they're not lifting the entire business up. They're filling gaps. I think looking back, I could have been more aggressive about solving the problems right in software. But keep in mind that you can also overengineer stuff. You can overdo things and spend too much time on development that doesn't actually have a benefit at the end of the day. So it can go either way, but I would heir more on the side of software development and focusing all the things we're doing so we have more time for the right software development and then more room to hire the people that lift the business up. So as everything's going up, we're also unknowingly racing to the bottom. This is around year 7 and the team has grown. We've created an environment where we have to charge a certain amount of money and at the same time we are saturating the market. We weren't at a point where the market was saturated at this point, but we are sort of we've picked all the easy targets. We're working for the harder targets and it's getting to a point where the cost of hiring more people starts to be a consideration of like you can't lower your costs anymore. But it's also at the same time getting to a point where the only way to compete with your competitor is to drop your price. We were doing all three. We were increasing our operational costs. We were saturating the market and we were lowering the prices against our competitors. As you're scaling your business, you need to be aware of the final value or where you're going to end up at because you can scale so big at the start that your business is outsized to the value you can extract from the market. The market only has so much money going around for the job. And this is exactly what we did to our biggest competitor. So, we were racing our competitor to the bottom. We were reducing our prices to compete with our competitor all the way through to the point that they ended up approaching us for a merger for 50/50 merger of the business. And they had done exactly what I'm warning you against, which is they had scaled with people over such a long time and had such high operational costs that as we took customers and we lowered our prices, we were operating much leaner at the time. Even though I said we were hiring lots of people, we were maybe not onetenth but like I'd say about one six of the size of them and so we could have lower prices and we've done essentially what I'm talking about the risk could be to your business to them. And in the limited market, they saw the writing on the wall that if we were to go headto-head all the time, they could drop their prices. We would have to drop our prices to compete and everyone would just keep dropping their prices and racing to the bottom. And then the market isn't big enough, even one person, to survive because the cost of operating it still exists. So, we did end up merging with them. And that takes me right around to year 8 and the biggest lesson I could have learned that I wish I had the confidence to have known earlier on, which is all about people's feelings. As your teams get bigger and bigger, you're probably going to start to worry more about people's feelings and what people think versus what's good for the business. Good merge two businesses. We had two teams doing two things at the same time cuz the competitor we merged with had very similar products to us. And two teams doing the same thing is a problem. You try and merge those teams without a clear decision on what's getting cut. And I don't mean staff getting cut. We were trying to retain everyone. But getting cut is in processes. the way it operates over here versus the way it operates over here. And we were 50/50 with the other company. The other company still had leaders who wanted to do things their way. And we were all trying to dance around everyone's feelings. Everyone was trying to not rock the boat too much, like sort of pecking order stuff. Everyone was just trying to see how things were going to play out and keep everyone's feelings in line. And we should have been more ruthless with this because I think the business would have saved a lot of money, a lot of time, and a lot of hassle if we'd been better about doing this. Setting a date, saying things are going to change from this date. The thing I noticed was we would sort of discuss doing it and it would go around about 15 times. Like it would just keep coming back around. Do we do it this way? We do it this way. And not having clear enough leaders is probably another title for this. Like no one said, I'm owning this space. I'm going to make the decision. No one had the conversation of if someone is elected to make a decision, everyone has to follow it. So worrying about people's feelings is right around the middle ground of like we'll do it your way sort of but I know this way is better. That sort of thing that is wrong for the efficiency of the business. Unfortunately there can't be a million ways of doing you're more than welcome to spend heaps of time figuring out what the right way of doing things is but don't do it with people's feelings in mind. Do it with the best data driven decisions in mind. If you're trying to navigate that and say for example you move support and sales into different places. You take most of this sales team, inject a little bit of this sales team in, you've got support operations as is better here, but you move a team in. If you move those two things and you don't clearly state exactly how it's going to go down, you're going to slow down everything because everyone is going to try and do this. They're going to try and people please their way through the situation and you'll end up in a middle place where if you've got one thing that works better and you've got one thing that works worse and you mash them together and you don't say this is exactly being the better way, that's it. If you don't do that, you're going to like blur the lines into the middle and both will be somewhat more average having done it. Otherwise, you're going to be just slowing everyone down, getting the work done and slowing down the communication. So, you need to make people responsible for these different things so that you can make a decision without hurting the other person. You need to mentally separate that person from the process. Outline the process, outline the other process. Don't tie the person and the process together. then it can just become this verse that because decisions are going to have a lot more weight than when you're smaller. So you've separated people from the thing that's being done. You can make a data driven decision. You can say it's going to be this way. If you don't have too many people owning something as you scale, the likely other inverse problem is that you don't have anyone owning it at all. And if no one owns something, everyone wants to say this happened countless times. The bigger we grew after we got acquired, etc. Everyone wants to give their opinion about something. But if no one owns anything, everyone giving their opinion just goes like gets listened to and considered too much in my experience where someone needs to be the final say of things and this gets destroyed by big businesses, big meetings that invite people in that think oh you might be interested in this says an opinion derails everything. It happens massively in bigger businesses and you need to avoid at all cost by having someone who is the final decision maker in things as much as possible. So we did experience that pretty bad like people who with the business we merged with thought they had the right idea. We thought we had the right idea. No one could really lay down the direction separating the people. And if you push an initiative and no one leads it, people will go around you and do the other thing anyway which we saw quite a lot which is not really an attack on any leadership or anything. It's just people being comfortable doing what they're doing. It's what they know best. It's what they're always going to continue doing. People will be resistant to change in the same way a ball rolling down a hill. it's hard to push it and roll it back up the hill. It's already rolling down the hill. Leading through the year eight into year 9 is backing yourself. You're always insecure that you're doing everything wrong and you always think that the bigger business is doing it better than you. They've got it all figured out, but you'll get to a point where you realize everything you were doing maybe wasn't right at the start but was on the right path. If that makes sense. And then finally, year nine is just back yourself. You're always going to be insecure that you're doing everything wrong. You'll always think that other people, competitors, bigger businesses are doing it better. They have it more figured out. But you're going to get to a point where you realize most of the things you were doing were exactly right for exactly where you wanted to get to. So back yourself based on the data of what you've done in the past and what worked. But remember that everyone is just as uncertain as you are. base.