Momentum Podcast: 465
You Shouldn't Scale Complexity
by Alex Charfen
The more you can simplify your business, the faster you can scale your business. When you first start out everything looks like an opportunity. You take on too many different options and before you know it you're running an overly complicated business with far too many deliverables. What you have to realize is that to grow a long term successful business you have to learn how to say yes to the opportunities with the highest likelihood of success and no to the rest. It's hard, there's no denying it, but this is the path to growth and the massive impact that you want to make. Simplify the business and make it easier on yourself. Don't follow the rules, make your own so you can win.
If you'd like some help to simplify your business so you can grow and scale faster, go to billionairecode.com
Full Audio Transcript
I'm Alex Charfen, and this is the Momentum Podcast, made for empire builders, game changers, trail blazers, shot takers, record breakers, world makers, and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will.
We don't accept our destiny, we define it. We don't understand defeat because you only lose if you stop, and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future, and instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution, and we always will be.
This is one of those podcasts that I'm going to have my coaches share with our clients often, because one of the biggest issues we see in our clients being able to scale their businesses is how complex that business is. In fact, here's an easier way to put that. The more we can get a client to simplify their business, the faster they will scale that business. We have example, after example, after example of complex business, made it easy, now it's scaling like crazy.
One of the ones I really like is Molly Keyser, who owns Boudie Shorts, and she has a designation for people who do boudoir photography. When she and I met, she had seven or eight products, they weren't all in one package, it honestly was kind of confusing to understand her deliverables. She explained them to me and I was overwhelmed by them. I expressed that to her. We took pretty much everything she did, put it into one designation, created an outcome, simplified it, and she went ... When I met Molly, she was in the several hundred thousands of dollars, I think she was around five or six, and I recently talked to her, she was almost at a $2 million a year run rate. That's taking a complicated model, simplifying it, and then making it work like crazy.
You know, one of the places that I see a ton of complexity is if you're an entrepreneur who's doing done for you work. If you're doing done for you with anyone, that level of complexity is over the top, and I know where this comes from. I've worked with entrepreneurs for decades, and here's what happens. When you first start out, everything looks like an opportunity. You look at the Billionaire Code, and when you get to 100,000-300,000, that promoter place where it's all about, you know, you're finally growing, you're starting to make money, here's what happens, somebody comes to you and says, "Hey, can you do this? And can you do this other thing? And can you do this other thing?"
I talk to a ton of businesses, in fact just recently I talked to one, about a $300,000-400,000 a year business, and it is both a done for you agency and an online product company, and here's what I know about that business. You know, I had a long conversation with them about simplifying and cutting off one or the other, and just doing one or the other. It's so scary when you do that because the businesses were about 50-50, and that means you're going to go from 300 to 150 pretty fast, or you're going to scale down one side and scale up the other side, which is how I normally have people do it.
I know how terrifying that is, because getting to 300,000, getting the revenue there, getting the numbers there, having the feeling of making it happen, but here's the problem, the done for you agency that they were running is, each person is getting something different, so that is so many deliverables you can barely keep track. You're a project management company. And then on the other side, the information products company isn't getting the attention it needs because it's competing with a full service done for you agency.
So in their case, it's a simplification of multiple things. First, if they're just going to do the agency, they need to stop with the information product and then simplify the agency itself. You know, here's one of the fastest ways we help agencies scale, is we show them how to make everything the same, rather than done for you, where it's an Afghan bazaar and everybody has something different. You figure out the deliverable, the result you're creating most of the time, and then sell that result over and over again. You simplify and you will scale faster than you ever thought possible.
It's important that you understand this because when you're growing, everything can look like an opportunity, and when somebody's willing to give you money, once you create enough success that somebody comes to you and they're wiling to give you money, it is so hard to turn down a opportunity, but here's the flip that you have to make as an entrepreneur. If you want to scale, if you want to grow something significant, if you want to get to seven figures, eight figures, nine figures, you have to realize that to take advantage of an opportunity you're going to have to say no to the rest.
It's so hard for people like us. If you are going to grow a business, and grow your company, and really make it happen, you have to simplify. You have to figure out the thing that has the highest likelihood of success, build clear processes around it, and start growing, because scaling a business, it gets exponentially harder as you grow. There's more people, there's more systems, there's more process. You know, one of the things that I share with entrepreneurs is that success creates deficit and growth creates complexity. People always say, "Whoa, whoa, whoa. What did you say? Success creates what?" Success creates deficit.
Here's what I mean by that. Success creates deficits in departments, in businesses, in a single person's job, their role. So the better that a salesperson is, the more calls they get on, the more that they convert, the more leads they need, so you run into a lead deficit. You have a really great salesperson, who starts selling like crazy, and then you're going to have a delivery problem. So when you look at any business that is scaling, success creates deficit and growth creates complexity.
If you look at the five core functions, if you're not familiar with them look up my podcast called The Five Core Functions. They are lead generation, nurture, conversion, delivery, retention, resell and upsell, so if you create success in any one of those fives, you create an issue somewhere else. If you're doing well on lead generation and nurture and conversion, and then you go create crazy success in lead generation, well then maybe your nurture systems don't work anymore, and maybe nurture is working, but then conversion gets backed up, and if conversion's backed up, then you don't have people you're going to deliver to. Whenever you're growing a business, you are consistently creating deficit, and growth itself creates complexity. This is why you want a simple business model, is because growth creates complexity.
Here's how complex it really gets for an entrepreneur. The riddle you have to solve is, how are you going to make increasingly difficult decisions with less and less information? That is a fact. That's reality because as you grow your business, the decisions are more difficult. They involve more people, they involve more processes, they're more leverage, they're more complex, just based on the growth of the business, and you will have less and less information. Every new person you add to the business, you're going to have less information. Every new department that grows in your business, you're going to have less information. Every new product you add, you're going to have less information. So you want to give yourself the advantage in this equation by growing a very simple business, so that you can deal with the deficit and complexity created by success and growth. This is how it really works.
If you have a coach that's telling you otherwise, if they're telling you to chase two rabbits, and make the targets bigger, and shoot for the moon 'cause you'll reach the stars, they're the type of coach that doesn't really have a very high success track record, and the people that you're seeing who are onstage as the testimonials are the exception. In our coaching programs, the majority of our clients are growing. It's over 85%. In the real world, that number's unheard of, and the reason is we share what really grows businesses, and simplification is a gateway to scale.
Part of the reason I'm sharing this with you in such an intense way is because I know my clients are going to hear this, and I want all of you to know that this is the path to success. This is the path to growth you want, and this is the path to the massive impact you want to make. If you've got a done for you service where you do different things for every person who ever walks in, you are never going to make the impact you want to make. I want you to just close your eyes and think about that. How many people would have to be employed by that business, making different decisions for every client, over and over again? The systems and the structure you would have to create, and the level of person you'd have to bring in, would be overwhelming to ever make that work. So if you want to grow your business, first simplify.
Russell Brunson, I love what he says. Russell's one of the ... he is the best marketer on the planet today, and I'd argue that with just about anybody. His advice to everybody, one avatar, one product, one promotion. Why? Because choosing an avatar, and mastering them, owning that avatar, is not simple. Creating a product that delivers over and over again, and gets testimonials, and has an incredibly high success rate, not the exception, you want people to have a 70, 80, 90% success rate with your product. When I say 85% of people in our product are growing, the 15% that aren't are those who joined us, when ... that they weren't, most in them. I think our numbers are actually higher in the last few months.
So the more you simplify, the faster you will grow the business. One avatar, one product, one promotion, those things in and of themselves are complicated, and if you have two avatars, two products, two promotions, you've now doubled the complexity in the business. Remember, simplification creates momentum, complexity always creates constraint. Now, sometimes you might have to create some complexity in your business. Sometimes you create a second product. Sometimes you grow the business more, you end up having an opportunity that you take advantage of, so complexity will always create constraint, but however, it may be appropriate constraint, and you may be able to still create momentum even though you're adding another product, even though you're adding another service.
Cadey and I did this exact thing. We took one product, or sorry, one avatar, one product, one promotion, and put it on the Inc. 500 list. We had this certified distressed property expert designation. Our business got to almost 13 million a year with one product, one avatar, one product, one promotion, and we were selling that and a $99 continuity, so it was really one funnel at the end of the day. We added the continuity product after we were over several million dollars a year in run rate. So two products got us there.
When I look at the companies that I'm working with that are exploding, that have exploded, like my hall of fame is Alex and Leila ... There's a lot of people in my hall of fame, but Alex and Leila Hormozi are such an incredible example. They run GymLaunch, and they have a membership coaching program for gym owners who are not making money, and if you join GymLaunch, you'll make money. It's just fact. If you're in that program, and you say you're not making money, everybody in the program tells you then, you're not working the program, and you're just not following and you're not implementing, because they all know that if you do it, it will win.
When you look at what Alex and Leila have, they have a entry level product, and then they have a second tier product, and they took those two products to eight figures in run rate, and then they added supplements, and it was an opportunity every single month for them. They held it off, and they held if off, and they held it off. They got to multiple eight figure ... They got to over $20 million a year in run rate, then they added another product line. Did it increase complexity? A ton. Was it worth it? Absolutely, it also created momentum.
So depending on what stage of business you're in, you can add some complexity, but when you are growing, you have to remember at the beginning it's just you. You're doing everything. Then you have to translate what you're doing to you and contractors, to you and part-time help, or to you and virtual help. And then eventually it'll be you, virtual help, contractors, and your team. And as you grow, that team will grow, and so every stage of growth adds complexity in and of itself, so the simpler your business, the faster you can scale.
If you haven't looked at your company this way until you heard this, sit down and start asking yourself, how can you simplify? Do you need all the products you have? Do you need all the promotions you have? Do you have too many funnels? Are you trying to do too many things for too many people? Are you calling on more than one avatar? Go listen to my podcast on own your avatar. I think it's in the 180s, like 181 or two or three, and listen to what it takes to actually own an avatar, to be the number one person for that avatar, to be the person that if there's somebody who has your issue in the world, they're going to come to you. Owning an avatar isn't easy.
So simplify your business and your entire business will change. One product that consistently delivers, one promotion that converts consistently, not easy. But if you simplify, you can do this, and you will see massive momentum. In fact, when you lower pressure and noise in your life, momentum is almost assured. Lower the pressure and noise in your business, you'll see yourself have more momentum, you'll see your team create more momentum, and suddenly, the simpler the business is, the more you execute, the more you get done, and the more you grow. Simplify your business, make it easier on yourself. We make up the rules. Make them up so you can win. Build your team, and go out, and create your empire, and leave your dent in the universe. You've got this.
If you want some help with this, and you'd like systems and structure to help you simplify your entire business, including how you plan, what you choose to do next, and how you communicate to your team, go to billionairecode.com, fill out our application, and I'll give you three things. One, the entire summary of the Billionaire Code that I mentioned in this episode. If you haven't seen it yet, it will show you exactly where you are on the path to entrepreneurial success and what you need to do next. It will also show you what you should have already done to get there, just in case you'd missed something. Then also, we'll give you where you are on the Billionaire Code, so that not only do you see the entire matrix, but you know exactly where you are and what's going on for you, and then third, you will have an opportunity to set up a call with my team.
Go to billionairecode.com and take advantage of this. Just the questions that we ask you will give you insights on your business that you don't have right now. The call that you set up with a member of my team will absolutely blow you away. Billionairecode.com