Scaling is Relative

Hello Founders & Funders,

Today, I’ve asked my friend and colleague, Chris Muccio, to chime in on what it takes to scale a business.

Specifically, what it takes to scale by 10X.

Take it away Chris…

Thanks, David.

Here’s the first thing everyone should realize…

Scaling a business is not linear.

There’s also NOT a fixed process that works for all businesses in all stages.

That’s why I get both disappointed and angry whenever I talk to a business owner who says they have multiple agencies and consultants who say they can come in, apply their “system” and 10X their business.

That’s bullshit, plain and simple.

There’s far too much of this crap going on right now and very few people who can actually pull it off.

Is it possible to 10X your business?

Possibly. Maybe even probably. (Notice, I didn’t make a promise! I don’t know where you are right now and what assets you have in place.)

If you’re a startup with a great product that solves a core problem, getting from $100k to $1m… or $1m to $10m…

Both scenarios are highly likely with the right steps and great marketing.

Getting from $10m annual revenue to $100m… that’s another story entirely.

Because that leap is about a lot more than just offer positioning, marketing strategies or traffic channels.

First off, I’m not going to address making the first $100k.

At that stage, most new businesses are still in proof of concept mode.

It’s a bootstrapped organization with one or a few members, each filling multiple roles in the company.

The goal in this stage isn’t just to get your first sale, but to get enough sales to prove you’ve got something with a broader potential.

After that…

The First 10X Is the Easiest

$100k to $1M is going to be a trial and error process.

You’ll have marketing campaigns that work and ones that will flop.

You may try dabbling in paid traffic, putting more money in Facebook or Google’s bank accounts than your own.

But it only takes one successful marketing campaign with an offer that clicks with your prospects to make this leap.

If you’ve got great marketing chops, you might be able to make this leap on your own.

But if offer construction and marketing are your weak spot, this is where it makes sense to bring in an outside expert to do it for you.

These are the only things you need to make the 10X leap from $100k to $1m…

• A proven offer that solves ONE solution for your target audience (you should have proven this out with your first $100k in sales)

• An audience of potential buyers wherever you’ve attracted them

• A solid, strategic marketing plan that fits your industry, your offer, your price point and your audience. (There is no “best strategy” that works for everyone)

• Great marketing copy and creative to turn prospects from browser to buyer

To be clear, you don’t need 5 products, a big team, or a bunch of phony promises to make this leap…

Just one clear, compelling offer that solves a core problem that you’ve already proven is something people are willing to buy and it works.

The Second 10X is a Little Tricker

You’ve hit a million per year in revenue – congrats!

Now, here’s the reality…

You may actually be able to make the next  10X leap to $10M per year doing more of the same.

This is really the scaling stage and what you’ll typically need along the way is…

• Specialized hiring to focus on areas now getting more attention like customer service, social media marketing, branding

• You may start hiring for leadership positions here like a head or marketing or a head of operations. Though you really don’t need a whole C-suite to get to $10M.

• You’ll start testing new traffic channels to reach new audiences. If you were all-in on Google search traffic for your first million, then start testing out Facebook or Youtube ads.

• You should also now be in a state of constant optimization. New offers, new campaigns, split testing ad angles – everything you can do to increase profit margins while also increasing revenue

Going from $1M to $10M is about being very specific and intentional about your growth decisions to scale a single product line.

For the Next 10X, Your Mindset & Your Model Change

The reality is not many small businesses make this leap successfully.

The biggest change that often happens in this transition is a shift from vertical scaling to horizontal scaling.

Note, I said “often happens”...

There are certainly some  single-product companies that have made this leap, but I’m trying to cast a wide net here.

From $10M to $100M, the mindset shift is from simple “scaling” to GROWTH.

In growth mode, you’ll start focusing on team building in a different way, bringing in high-quality leaders to run your teams…

And maybe even creating teams dedicated to functions that were less of a focus in the march to $10M per year.

You’ll  also start to shift from scaling and optimizing a single product line to creating new products…

Or even new verticals entirely.

And it’s important to note here, I’m not just talking about getting to $100M in revenue, but establishing that as an annual baseline.

That level of growth requires very tactical, long-range decisions on market size, audience, product suite, customer retention, a shift to recurring revenue, and so much more.

I also recommend not trying to take this step all at once. 

A comprehensive growth plan should be created with multiple milestones… but ALWAYS keep the end goal (whatever that is for you) in mind so you don’t need to backtrack later.

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The Final Word

Scaling is different for every business. Don’t let anyone tell you otherwise. 

To get from where you are now to where you want to be takes a tactical approach and an in-depth analysis.

But it also takes an understanding – an ACCEPTANCE really – that what helped you make the first or second 10X leap isn’t what’s going to help you take the next one.

What are your growth goals for the rest of this year and 2025?

We’d love to hear, so hit reply and let us know.

David & Chris