Passing the $10 million plateau

Ready, Fire, Aim started as a retreat serial entrepreneur Michael Masterson led for other entrepreneurs. He wanted to impart the lessons he had learned from a 30-year career starting and running several multi-million-dollar businesses. Later developed and expanded as a book, the subtitle states his objective; teaching the reader to take a business from “Zero to $100 Million in No Time Flat.”

The two biggest ideas in the book are the importance of action (thus, the book title) and that going from zero to $100 million encompasses four distinct stages in the life of a company. Having read the Five Second Rule, 10X, and many other books, I knew the first point well. It’s the second that I will focus on.

According to Masterson, each of the four stages of a business has different problems, challenges, and opportunities and requires different skills from the entrepreneur running the company. The stages are:

  1. Infancy ($0-1 million in revenue)
  2. Childhood ($1-10 million)
  3. Adolescence ($10 million to $50 million)
  4. Adulthood ($50 million to $100 million and beyond)

The stage that was the most interesting to me (because it faces many of the challenges my company, FiveFour, solves for business leaders at this level) is adolescence. Once a company grows to or near $10 million, the growth almost always comes with a new set of challenges.

At this size, there is at least one or two levels of management between the founder/CEO and the front-line workers who engage with the company’s customers. Those employees do not have the benefit that existed in the first two phases of business growth – proximity to the founder/CEO. Companies that reach $10 million in revenue usually do so because the founder/CEO built a culture around taking care of the customer. With multiple levels of management, they no longer talk directly to every employee and are unable to directly impart their culture and expectations of how the customer should be cared for.

The way this usually shows up in a company is through disgruntled customers. Masterson writes: “The most important disconnect has to do with the priority you had established to make sure every customer would be handled with the utmost of care and consideration.” The business is in need of a transformation. A transformation from focusing almost exclusively on customer acquisition to one that now focuses equally on customer retention. Masterson calls it customer service, but were he writing today rather than the mid-2000’s, he would likely recognize that the customer experience is even more important.

The leader accomplishes this transformation by a focus on operations and training, communicating the vision, joint ventures and hiring stars and superstars. He’s dead-on with that list, but a few of his methods are decidedly lacking. For example, to communicate the vision he advocates writing a monthly memo. To solve this communication gap that he has so accurately identified takes much more than a written letter once a month.

And it’s behind that small defect that my larger problem with the book arises. Those memos worked for him and a client of his. That’s 98% of what you get in this book: his personal experience as an entrepreneur. Masterson has no time for theory. The only time I can remember him quoting an organizational theorist was to disagree with him.

That’s not a debilitating problem and it doesn’t erase the good that comes from the book. After all, Masterson wrote it to impart what he learned from his entrepreneurial journey. But it is a limitation that the reader should be aware of. This book is just one source – a good one, but just one – and will need to be supplemented with other resources especially the further we get from the day it was written.

Measuring Human Impressions

My recent post Elephants Don’t Bite was about companies focusing on big things, like the strategic plan or the latest marketing campaign (the elephants), came at expense of the little things, like answering the phone or greeting the customer at the front desk (the mosquitoes) and it’s the latter that can kill you.

In Marketing Rebellion, Mark Schaefer explains why that happens:

We see our foundations of command and control marketing collapsing before our eyes. There are no more lies. There are no more secrets. There is no more control. For more than a century, we’ve built our greatest brands – like Ivory – through an accumulation of advertising impressions. But to survive this final rebellion, companies and brands must be built through an accumulation of human impressions. That is the only thing we trust. That is the only thing that matters.

That’s why the subtitle of Schaefer’s book is “The Most Human Company Wins.” This is also why my company, FiveFour, helps our clients get their customer experience right before we start marketing. The job of marketing is to get a logical prospect to try your company once. It’s the job of your customer experience to get them to come back.

But even marketing is becoming mostly about your customer experience. Writes Schaefer:

Two thirds of the touch points during the evaluation phase of a purchase involve human-driven marketing activities like internet reviews, social media conversations and word-of-mouth recommendations from friends, family and online experts…Two thirds of your marketing is not your marketing.

If human impressions are the most relevant advertising metric, how are yours? Do they create and keep customers? Do you measure them with something like the Net Promoter Score?

Who am I? Why am I here?

It’s that line, spoken in the 1992 Vice Presidential Debate, that made Admiral James Stockdale, famous. But it’s an obvious question. What am I planning to do here on this site? Why start a blog in 2020. I thought those were so 2002?

Nathan Schock preparing to teach Sunday School
Nathan preparing to teach Sunday School

If you know me, you know that I’m a life-long learner. In fact, that’s an understatement. I’m President & COO of FiveFour, a training company where I’m constantly learning, teaching and creating training content for the development of our many clients.

But learning is more than just my occupation. It’s part of my faith (the picture here is of me preparing to teach Sunday school) and my hobby. I also read novels at night in an (often futile) attempt to settle my brain for sleep.

For the past seven years, I’ve read at least a book a week. Two years ago, I increased that to two books per week and last year it was three. If you want to know what I’m reading, check my out on Goodreads.

Those books, along with the many articles and podcasts I consume on a regular basis, and the things I learn running two companies, will form the cornerstone of the content I post here. If you love to learn, you’ve come to the right place. I hope you’ll hang out for a while. And come back.