Lessons - From $0 to $100M: What Most Entrepreneurs Get Wrong | Neil Patel - Digital Marketing Entrepreneur

In this lessons episode, explore why laser focus often beats diversification in the early stages of business. Learn how Bill Gates could have been the world's first trillionaire if he hadn't diversified too early. Learn why different stages of growth require different leadership, and learn how hiring people with proven promotions in your industry can be the most powerful strategy for scaling. I think one of some of the worst advice for people starting out is to diversify, diversify income streams, diversify, like if you look at the people that, you know, the thought leaders that people look up to yourself included, you made your money on one thing, and then once you have that asset bill, then you can move on to the next thing where then you can, but I think it's like the laser focus that is required to be successful because if you don't have that, I mean entrepreneurship is hard enough without laser focus. Here's a kicker for you, right? Who do you think the richest person in the world should have been right now in today's world? Who the richest person should have been? Uh-huh. I don't know. I'm thinking of like a Warren Buffett or what's the name you're going to drop? Bill Gates. He should have been the world's first trillionaire and why is he not? He met Warren Buffett and decided to diversify, so he sold off a lot of his Microsoft holdings. Microsoft has what? A $3 trillion market cap? If he owned a little bit less than half, right? He would easily been, and then you get dilution when you give people shares and all this kind of stuff, but like he would have been easily the world's first trillionaire. That's wild. So, I mean, I don't think he's ready. Even after the divorce, even after the divorce, he still would have been the world's first trillionaire. Did you know Steve Balmer was a CEO of Microsoft and Steve Balmer has a higher network than Bill Gates owning a fraction of what he had. I didn't know he had a higher network. I didn't know. Yeah. That's insane. So it's just because he didn't. And people asked Steve Balmer. He's like, I believe Microsoft. He's like, he didn't really try to diversify by tons of businesses. I know he owns a clippers and stuff like that, but like he didn't really try diversifying or anything like that. He's just like, I just blooded Microsoft from believed in it. So I just kept my shares and didn't do a ton of other stuff. So he has a higher network for living a simpler life than Bill Gates, who sold a lot of shares, created this crazy family office, did tons of other things. You know, most people also don't know this. Goldman Sachsman just Steve Balmer's money is easier for him to do that than Bill Gates building all these family offices and finding all these ventures to invest in and I can go on and on. You know, four seasons is owned by him. Like the amount of businesses he owns is ridiculous. He took the Warren Buffett playbook and I'm not saying, you know, it's a shitty playbook. Look, I'm not rich like they are, right? Or a better way to put it is, I'm rich because it depends, depends what you define rich as, but I define them as a whole different league. I call that wealthy. I'm not wealthy. I'm rich. Yeah, buy a nice house, nice car. But what the league therein is, oh, I bought a sports team. It didn't work out. Let me just go buy another sports team. I'm still have so much money. It doesn't matter. I can buy five of these ten of these, you know. Yeah, no, it's interesting because even through okay. So that's an interesting point that you make because I agree completely. But you've also made very conscious decisions throughout your life to pivot from like at one point software. So you went from software into services. Now you do acquisitions. So you do focus on different things over the course of your career. Do you not? I've only focused on the marketing industry. If you look at all my businesses, they're around marketing. If you look at even my current business, software makes up a large chunk of our revenue and profitability. Software's probably the most profitable division. We do M&A to grow the one thing. You know, yes, we have three software pieces. Two of them were acquired. Okay. So one wheelie found. And then if you look at services, a lot of the revenue was generated organically, but we're acquiring regions with other offerings and other region offering or acquiring other marketing businesses and other regions with different service offerings to expand, right? You risk cross selling. So yeah, we're doing more, but we're doing the same stuff. It's just we found it cheaper to acquire than to build from scratch. That's really, really different. But you still got, okay, so you still got your, you know, you still got your blinders on. You're only focused on this one thing, but you're just growing it through all these different ways. I got it. So if you think about some of the smartest lessons about even, I mean, right now, how many people you have, I think I was watching my first million, you have over 900, probably over a thousand employees at this point. I think that was two years ago. That business does over a hundred million dollars a year with NP digital. What would be some of the advice that you would give an entrepreneur that's starting out at all the different stages of growth. So say zero to 10 and then 10 to 100, obviously you grow through acquisition, you grow through different product service offerings, but you didn't do that all at the beginning. So what's the right strategy at the right point for the entrepreneur on this journey from zero to 100 million? I think it's going to vary for entrepreneur to entrepreneur, but this is what I've learned. The person who's usually great at building from zero to 10 million revenues, usually not the person from 10 to 100 and then usually have a different person from 100 and beyond. If you look at our organization, my co-founder was a CEO from zero to 18, I think, I think our second year was 18 million in revenue or something like that. And he was a CEO till then. I think it was year three. He put in a president who has helped us take us to 100. I don't know if the president helped us get us all the way to 100 or not. He helped us grow in more than double and double. But I know we put in a CEO who replaced my co-founder a few years after that, right? So my co-founder is a CEO that a president and then the CEO, the CEO that we have in place. He worked one of our competitors called I Prospect. He was a president there. He was originally the CEO, climbed up to be the president. And then, you know, if he stayed, I'm pretty certain he would have been the CEO. They've hit him up multiple times to try to get him back as well. And when you look at him, I think I Prospect, at that time, they had four, seven thousand employees. Now I'm thinking they're like 13,000 plus because he merged in a few other companies into the fold. But he's the right person to try to take us to a billion. The question is, is well, we get to a billion in my life's man. I have no idea. And what I would say is it's very different skill sets. You know, if I ask my CEO, like talk about entrepreneurship and starting company, he'll tell me he can do it all. I love the guy did that. He's amazing. He's way better than I am at managing companies. I would not hire him though to start a company from scratch, you know, even though he says he can do it. In my opinion, and I could be wrong on this, I don't think he has a personality in the fit to start something from scratch. I would bet on him all day long to skill a company in the marketing services space. Amazing at that, right? You got to find the right person for the right job. Yeah. And I think that's what people really mess up on. And that's why they struggle to scale. If I had to pick the biggest lesson I've learned over my career other than picking and going after a big market, it would actually be how to hire. And hiring can solve your problem and really create growth that no matter what stage you're at. And it's really universal on what you're looking for. And that's really finding someone who's worked for multiple competitors of yours, who's continually gone promoted at both those places and been there for a while because that means those corporations find that person valuable, not that they claim they did everything, but more so the company is giving them promotions with means that are actually doing a good job. Yeah. Those are the people you tend to want to hire because they're the ones who have just come with the time they experience, forget how to scale you faster. I think that that's smart advice. You know, I did ask, I asked the tactics on different stages of growth, different revenue numbers for your company. How do you grow it? How do you? What's the strategy? But at the end of the day, the strategy is the people. The people figure out what you got to do. It's the people. And a lot of the people that we use this model for worked out our competitors who are doing 10, 20 million revenue when we were smaller. And they help bring a lot of that to the organization. Now some of those people aren't with us today because they're one of the right fit in my opinion, right? They could have they could disagree with me to scale to a hundred, right? So then you go and find the people who are great at scaling to a hundred. Then you find the people who are great at going to billion and so forth so long. The biggest issue that people, so I love the strategy, look for people that have had promotions because then there's proof that they've actually done the job. They're not just giving you lip service and they're not just telling you that they've done it because multiple promotions, not one promotion. Yeah. There's a big difference. A lot of people get promoted once. Very few people get promoted three, four, five times, right? If they're continuing getting promoted that many times at organization, it means they're really good at what they did. I've had a conversation with several friends. I'm sure some of them are mutual friends about people that are very good at interviewing, even at the executive level. C-suite levels are very good at interviewing and not much else. And they bounce around between C-suite position to C-suite position, which is that's a very scary thing for a founder to understand. Some people are just great at interviewing and they look good and the resume looks great. And other big companies, like well-known named companies, have hired this person for a period of time, but they're actually useless at their job. And I think that this hiring strategy of finding some with multiple promotions that kind of de-risks the hire a little bit. It does. And you really have to find the right person for the right job and I'll give you a great example of this. I've been offered to be a CMO for publicly traded companies more times than I can recall or even count on one hand, right? I would be a terrible CMO. Just quite frankly, I'm an amazing individual contributor. I'm amazing growing organization, even if it's extremely large, with a small team. But to be a CMO of an organization that has 100 plus thousand employees or 50,000 employees, I'm not a great fit. How many people would be a marketing? I am a terrible manager and yeah, I can put someone else underneath me. I'm just really good at just being an individual contributor. And I can work with small teams of three, four, but I'm terrible just working with teams of like 300, 400, you right, especially being in charge of them. And this is why I'm never a manager. I know that you scaled NP digital. I think it was something like to 30 or 40 million in revenue just with your own personal brand. So you actually like taking this idea of being an individual contributor to an extreme because you built your business just on your name. But is that, do you think that's a common trait in entrepreneurship with entrepreneurs? They're very good at, they're very good at getting things off the ground, but they're really bad at managing people. If you look at like the psychological profile of a great entrepreneur, no, I wouldn't say that's common. I wouldn't also say that's uncommon. I would say what's more common is the entrepreneur is usually good at one or two things and they just usually excel at one or two things. And they're just exceptionally good at that. The ones that are successful and they just double down on it. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.