Nov. 25, 2024
984: The FOUR KEYS to REAL scalability (with a business AND life you love!) w/ Brad Eisenberg
How do you transform a chaotic startup into a scalable, efficient business that supports the entrepreneur's desired lifestyle? Join us for an enlightening conversation with Brad Eisenberg, a seasoned scalability consultant with a unique approach to business growth. From organizing community events as a child to co-founding the first stationless bike-sharing program in the U.S., Brad’s journey is nothing short of inspiring. His perspective on sustainable growth emphasizes creating businesses that align with personal aspirations, making this episode a treasure trove of insights for anyone navigating the tumultuous stages of entrepreneurship.
Brad breaks down the journey of business growth into manageable phases, focusing on transitions from early-stage chaos to establishing a robust infrastructure. We dissect his four-phase framework—traction, profitability, capacity, and innovation—while highlighting the delicate balance between volume and complexity. Learn why saying yes strategically in the beginning is crucial for gathering essential data and understanding market demand, and how to pivot towards optimization and efficiency once the foundation is set.
Effective systems are the backbone of scalable success, but when should you introduce them? Brad debunks the myth that good ideas and hard work are enough, emphasizing the importance of smart systems and metrics. We discuss integrating non-scalable personal touches into a scalable model, leveraging data for informed decision-making, and the power of targeted efforts. Brad’s personalized approach to consulting and his passion for challenging assumptions offer invaluable takeaways, guiding you in transforming your startup into a well-oiled machine. Don't miss out on Brad’s expert advice on mastering business metrics and systems to achieve scalable success.
ABOUT BRAD
Brad Eisenberg is a scalability consultant with over 15 years of experience as a Founder, Chief Operating Officer, and Consultant. He’s the go-to expert for growing businesses that have hit the point where everything that used to be fun and simple has become messy and complex. Brad helps business owners streamline processes, increase profitability, scale up capacity, and elevate their operations to run like a well-oiled machine. Driven by a deep belief that business can be a powerful force for good, Brad brings a unique blend of operations, technology, finance, and strategy to every client he works with. Through his company, BE Lean, he’s on a mission to help entrepreneurs get out of the weeds, regain their freedom, and build something that lasts.
LINKS & RESOURCES
Chapters
00:00 - Perspectives on Business Scalability
09:31 - Navigating Growth Phases in Business
18:55 - Effective Systems for Business Growth
26:10 - Personalized Business Growth Strategies
29:45 - Mastering Business Metrics and Systems
35:50 - Supporting Entrepreneurial Voices
Transcript
WEBVTT
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Hey, what is up?
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Welcome to this episode of the Wantrepreneur to Entrepreneur podcast.
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As always, I'm your host, Brian LoFermento, and I'm excited for literally every episode, but this is the one episode that I've been most excited about recently, because we talk about this word, scale, so much in the world of business, in the world of entrepreneurship.
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It's something we're all looking for, is we're looking for scale.
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But today's guest, the way he talks about scale, the way he views scale, is so different from the way that every other place I've ever seen it talked about or written about.
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And that's because he doesn't just view scale as something that we scale our revenue or scale our sales.
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He views it in a really sustainable way.
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That is something we can pursue and really look after and work towards so that we can grow a business that we're actually proud of and a business that actually fits into the life that we are looking to live.
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So let me tell you about today's guest.
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His name is Brad Eisenberg.
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Brad is a scalability consultant with over 15 years of experience as a founder, chief operating officer and consultant.
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He's the go-to expert for growing businesses that have hit the point where everything that used to be fun and simple has become messy and complex.
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Brad helps business owners streamline processes, increase profitability, scale up capacity and elevate their operations to run like a well-oiled machine.
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Does it sound like you're a business?
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Because not always for all of us are we a well-oiled machine.
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Does it sound like you're a business?
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Because not always for all of us are we a well-oiled machine.
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Brad's going to dispel so much of that here today.
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Driven by a deep belief that business can be a powerful force for good, Brad brings a unique blend of operations, technology, finance and strategy to every single client that he works with through his company Be Lean.
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He's on a mission to help entrepreneurs get out of the weeds, regain their freedom and build something that lasts.
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I can imagine you are already also excited about today's episode, so I'm not going to say anything else.
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Let's dive straight into my interview with Brad Eisenberg.
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All right, Brad, I'm so excited that you're here.
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First things first, welcome to the show.
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Thank you so much, Brian.
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Happy to be here.
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Heck, yes, so you already know I spilled all my beans to kick off this episode that I'm personally very excited.
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Selfishly, I know I'm going to learn a lot from you today, but you've got to take us beyond the bio Brad, because I think you have such interesting perspectives about really all things entrepreneurship.
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So who's Brad?
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How'd you start doing all these cool things?
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Oh man, well, how do I follow Such a great introduction?
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I appreciate that, thank you.
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So you know I've been an entrepreneur my entire life.
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I was the kid with the proverbial lemonade stand growing up, except instead of selling lemonade I was organizing canned food drives and running ultimate Frisbee tournaments.
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But I really fell in love with entrepreneurship when I was in college.
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I actually went to school for mechanical engineering before realizing that I was way more interested in engineering businesses than mechanical systems, and I was fortunate enough to start my first business at the University of Maryland with a couple of friends, and we founded the first stationless bike sharing program in the country before every single major US city became littered with bikes and scooters.
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We were the first to do it back in 2008.
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And that experience really made me just realize how much that business can be a vehicle for positive change in the world and also a vehicle for personal agency.
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That was something that I was looking for at that time in my life, and the ability to really kind of see how to pursue my own career path on my own terms was really attractive.
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You know, the bike sharing business didn't take off at the time.
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We were too early, but I joined another startup at the time in the energy efficiency industry early.
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But I joined another startup at the time in the energy efficiency industry doing energy audits, ways to make homes and buildings more energy efficient and we literally grew as a small team.
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I was part of the early team and we were running out of the back room of a house at the end of a cul-de-sac in Columbia, maryland, and we quickly scaled to a team of close to 50 doing about 5 million a year in business and that was really rapid.
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That growth was about only took place over a year's time and I found myself in the position is like the guy trying to put in place the processes and the systems to manage this crazy growth path that we were on.
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And I was fortunate enough to lead that company, ultimately as its chief operating officer, and really kind of guided this business as it grew from this young, undisciplined, energetic startup into a more mature and efficient and sophisticated organization and it was like the best ride I've ever ridden and really kind of set me up for going out on my own and pursuing my own consulting career is starting in 2017.
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So for the past seven years plus, I've really kind of been helping my clients navigate that same journey, from that stage, as you described, where everything that used to be fun and simple is now messy and complex, and really helping them shepherd their organizations to the next level, so things can run more smoothly and efficiently.
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Gosh, brad, I love that overview for so many reasons.
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Huge kudos to you.
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Honestly, seven years is huge.
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This podcast.
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We just recently celebrated our eighth birthday of being on the air.
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And thank you.
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I don't think we celebrate longevity as much as we should in the world of entrepreneurship.
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We all hear about these quote unquote overnight successes, which I really don't like that term but I think what's way more impressive are all of these examples of people who have been pounding the rock and doing the things over time and serving people, because it really is that journey of we get better each and every year and even just hearing the overview of your career arc thus far, you've continued to build on every single experience that you've had.
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So huge kudos to you.
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And, along those lines, something that has obviously followed you is growth, and I'm going to introduce it early on in today's conversation obviously scalability, brad.
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We use that word a lot.
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What the heck is scalability to you?
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to you?
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Oh, good question to start.
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So scalability to me is really simple.
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It means the capacity to change in size, right?
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Scale ability, the capacity to change in size.
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Way too many people, I believe, in the entrepreneurship world, focus on the first part of that word size or scale and not enough emphasis on the second part of that definition, which is the capacity or the ability to change in size, right, I mean, why do we want to grow?
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For the sake of growth, right?
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Most of us didn't start our businesses for world domination, to become big and bad and all these other kinds of things.
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When I talk to entrepreneurs, the reasons I hear why they want to start their business is because they want more freedom and flexibility in their life or they want to leave an impact on the people and the communities they care about.
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And I think when businesses grow for the sake of growth, sometimes what happens is that their businesses end up running them instead of them running their business, and that's not why they started their business in the first place.
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So the ability to change in size is a really key perspective that drives the work that I do with my clients that I do with my clients.
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Yeah, Brad, it's almost like we're talking about some counterbalances here today, because when we talk about resources obviously more resources we can probably grow more.
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Whether that's manpower, financial capital, whatever it may be Resources are at the root of our ability to grow.
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But then, on the flip side, you're talking about freedom, and I think back to when I was in college.
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I was convinced I wanted to run a 200 employee business one day.
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My first business.
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I had 20 people working for and with me, and it became a business where I was managing people.
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Brad, I wasn't enjoying the freedom.
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I was a slave to my phone.
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I had to actually check my phone, and anyone who knows me well knows that I do not enjoy being on my phone at all.
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And so, with that in mind, it is that counterbalance of the more resources we have somewhat, the more responsibilities that we have.
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But on the flip side, there's this magical sweet spot of where do we get to build a business that we love and that complements our lifestyle while also actually growing?
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So is it a business size?
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Do we measure it by revenue, by employees?
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How do you view that sweet spot of the freedom that we're all looking for?
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Well, I think part of what's important to realize is like that the business isn't the goal, right?
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Like it ultimately is just the vehicle for reaching the place you want to go.
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Right.
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So every entrepreneur has a different place that they want to go.
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That could be something really small and sustainable.
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That could be an organization that is quite large and has a great impact.
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Right the way that the business needs to be structured is really helping to get the entrepreneur to where they want to go.
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So the business is a vehicle.
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It's not the goal.
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It's going to look differently for every entrepreneur.
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Yeah, and it makes sense because obviously there's also different types of business models.
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I love the fact that you called out the bike share being before your time, obviously back in 2008,.
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That feels like ages ago, brad.
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You were well ahead of your time.
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It was an unknown business model, whereas these days we truly see it in every single city across the United States.
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Which leads me to ask you the question of having seen so many different types of businesses and these different business models.
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Are there certain inflection points along the way?
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A lot of people focus on, kind of the first 10K.
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We know anecdotally from a lot of listeners that we hear from that 10K or 5K a month.
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These are big milestones that people pursue as entrepreneurs.
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Or 5K a month, these are big milestones that people pursue as entrepreneurs.
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In your experiences, what are some of those inflection points, whether it's company size, whether it's stages of the growth journey?
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I'd love to hear some insights there.
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Sure, yeah, I mean, I think every business when it first starts off, you kind of just manage the work and you figure it out right and that first phase of growth really should be done that way.
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You're experimenting, you're figuring it out, you're adding team members, you're building processes, you're just figuring out how to take this idea and turn it into a business model, like you said.
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And at some point, as the business grows in both size size is a big piece, right, Whether you're talking about headcount or customer volume or revenue.
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That's a big factor that's going to push or create an inflection point to the next level.
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But the other important factor that I think is thought of less is complexity.
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Complexity is often the other kind of big variable that enters the equation along with size, and complexity can look like a lot of different things.
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It could be we're adding new business lines and new service offerings.
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It could be that we're innovating the way that we're able to provide our services or our goods.
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So usually kind of like innovation or new ideas is what's introducing those degrees of complexity, or new ideas is what's introducing those degrees of complexity.
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And both volume and complexity are really what pushes a business past the point where you can really just kind of manage it on your own to a place where you really need stronger infrastructure and systems and processes in order to kind of maintain that growth without balls being dropped and mistakes being made, of maintain that growth without balls being dropped and mistakes being made.
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You know, in my world a lot of the clients that I'm working with are doing a million or more per year in business and they're trying to reach past that 10 million plus per year mark and usually that kind of phase of the growth is where all of that kind of transition happens, where we're doing the work to build out the infrastructure, to put the systems in place, to create ways to kind of know what's going on and see what's going on and get access to great metrics and data that can show us what we need to do and how to respond.
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So you know in my world that one to 10 million a year mark is typically when those kind of variables of volume and complexity kind of push companies past the tipping point.
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But you know it's going to be a little bit different depending on the business.
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Yeah, I really appreciate how clearly you've called that out.
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I think that's going to give a lot of permission to our listeners who are in the beginning phases of their entrepreneurial journey today, where you made it clear, yeah, the beginning is just about figuring it out.
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And that leads me to really reflect on something, brad, that I think we all did when we started our businesses, which is we go through that season of yes where we just say yes to everything.
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Someone says, oh, can you help me with this?
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Yes, of course I can, because I need clients and I need revenue, and so that does add on those layers of complexity that you're talking about, because we get away from our core, whereas in seasons of no, that's where we really identify.
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This is the stuff that's working.
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Let's double down, let's 10x down on these things that are working, because we can get them working really well.
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How do you navigate those seasons of yes and seasons of no, because they both have their pluses and minuses?
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No-transcript.
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So where do they fit in in our growth journey?
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Oh man, there's so many different ways I can tackle that question.
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I mean, first of all, you have to say yes until you get to a point where you can say no.
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So that's you know, you got to start somewhere right and you know, I think when I think about kind of the journey of scalability, I think about four kind of crucial phases.
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This is kind of my own framework that I lead my clients through, and the four kind of elements that you need for scalability are this Number one you need traction.
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You need a consistent and replicable way to get new clients.
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Number two is you need profitability and replicable way to get new clients.
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Number two is you need profitability.
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You need to be able to deliver your goods and services in a way that leaves enough profit on the table that you can reinvest that profit into growth.
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That's an engine of growth.
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Number three is you need to be able to scale capacity so that you can service all of that extra volume without balls being dropped.
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And then the fourth is innovation, which is how can we implement new ideas and strategies in a really consistent way that relies upon those tried and true methods of experimentation and validated learning.
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So traction, profit capacity and innovation are kind of the four pillars of scalability, and you got to start at the first one, right?
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You got to start at traction, and that means starting to say yes where the demand exists and learning about how the market values what you have to offer.
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You've got to lock that down first before you can start moving into those areas of optimizing profitability, building up your capacity to service more volume.
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You've got to start there.
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But I think what's important in all of this is that you're relying upon reality and data and measurement and experimentation to figure out what works and what doesn't.
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Right, you got to say yes to get that data, but once you learn about what's working and what's not working, that's when you can start introducing that level of focus that's required to be really smart and strategic with where you're applying those resources, because we all know we don't have infinite resources.
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We've got to pick and choose the places that we can deploy the resources that we have in order to get ahead.
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Boom, brad, bring in the heat today as I knew that you would Honestly these four pillars.
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I think that that's incredibly powerful, brad.
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I want you to copyright that and own that, because I think it's so brilliantly articulated by you there, especially because, to point number one about gaining that traction, I'm 16 years into my entrepreneurial journey and I think people always ask me what's the difference between a entrepreneur and an entrepreneur and, to me, a real business, what that means is you can reliably and consistently get clients and the fact that you put that as number one.
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I don't think we put enough emphasis on that.
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And a lot of people talk about using Facebook ads and social media A lot of them.
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Until you have that repeatable system, you are experimenting.
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And a lot of people talk about using Facebook ads and social media A lot of them.
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Until you have that repeatable system, you are experimenting and a lot of business is experimentation.
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Well, there's so much noise out there, isn't there, brian?
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Right?
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Like you know my clients, when I typically work with a company, it's a company that's already gotten traction right.
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Those are the companies that really need to start focusing on those last three pillars to build out the infrastructure.
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But you need to get that traction first, right.
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But when you hear the word skill and scalability in kind of the entrepreneurship echo chamber, usually what people are talking about is that first pillar is traction.
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You hear scalability people talking about how to increase revenue, how to get clients, how to do all the things right, and everyone's got a different, you know, flavor or idea for how to do that, whether it's ads or cold outreach or this or that.
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And there's so much noise about how to get traction that it almost makes people forget that that's just step one, right, like what comes after traction.
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Right, like getting all the clients does not equal guaranteed success and a clear path to scale.
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You got to start with the customers, but once you get them consistently, reliably, now's the time where we got to figure out okay, what next?
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How do we deliver our services and products in a profitable way?
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How do we actually manage our capacity against demand to make sure that we can service the volume.
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How do we not rest on our laurels and figure out how to innovate new ideas so that we can continue to grow?
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So I'm.
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You know there's a lot of people out there talking about traction, and that's not me right.
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My message is what comes after that.
00:17:49.266 --> 00:17:51.032
Yeah, gosh, I really love that.
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And I'll tell you what here on this show, we are big fans of calling out all the cliches and buzzwords and overused things that everyone else is saying in the entrepreneurial space.
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It's why I started this show eight years ago, because I was a young entrepreneur looking to tap into real life conversations without the hype.
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So I so appreciate the fact that you're bringing that to us, brad, and it makes me think you have this future looking view of businesses because you've seen them at all different scales and all different levels of their growth journeys.
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With that in mind, I know that so much of your work focuses on systems and processes.
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When we talk about capacity, obviously those are key ways to increase our capacity.
00:18:29.334 --> 00:18:33.493
How soon is too soon to start focusing on those processes?
00:18:33.493 --> 00:18:47.147
And then, because obviously that's a little bit of a softball question for you, the second part of it is I want to ask what are those areas that you look to systematize, that you look to build in those processes, so that we truly can increase that capacity?
00:18:48.369 --> 00:18:55.693
Yeah, I mean, systems is something I'm clearly very passionate about, right, like just kind of building off what we were just talking about.
00:18:55.693 --> 00:19:03.406
I think there's a myth in the entrepreneurship world that all it takes to be successful in business is good ideas and hard work.
00:19:03.406 --> 00:19:07.775
Right, I mean, that's what you see when you watch Shark Tank or you read Inc Magazine.
00:19:07.775 --> 00:19:12.093
Is you know some genius entrepreneur witha never been thought of before idea?
00:19:12.093 --> 00:19:18.294
And they grind and grind and grind until they're magically successful, right, and that's not really what determines success.
00:19:18.294 --> 00:19:27.400
What really determines success is execution, and that comes down to systems, that comes down to structure, that comes down to good, smart decision making.
00:19:27.400 --> 00:19:30.886
So you know when is the right time to start introducing systems.
00:19:30.886 --> 00:19:36.498
You know, it's not about when, it's about where right?
00:19:36.498 --> 00:19:44.215
So when you're first starting out and you're focused on that pillar number one, which is traction, you're the systems that you need to be building.
00:19:44.215 --> 00:19:46.727
Are systems about gaining customers?
00:19:46.727 --> 00:19:47.167
Right?
00:19:47.167 --> 00:19:54.759
You're experimenting with different strategies and ideas and you're building in processes to double down on what's worked, right?
00:19:54.759 --> 00:20:11.615
So you experiment, you validate what's working and then you build out the infrastructure to handle that, whether that's a really great CRM, whether that's a really clear, you know ad process and sales channel strategy when you start moving along in further phases.
00:20:12.076 --> 00:20:19.688
In terms of, you know, profitability, the systems that we're focused on are really on delivery, right, how do you deliver your goods and services?
00:20:19.688 --> 00:20:27.871
So, once that customer says yes and they're paying the check, what's the process in place to take that sale and turn it into?
00:20:27.871 --> 00:20:34.180
You know, ultimately, that deliverable that we're giving to our customers, whether that's a good or a service.
00:20:34.180 --> 00:20:37.474
So the systems that we're focused on there are on delivery.
00:20:37.474 --> 00:20:45.659
When we're focused on capacity, you know the systems that we need to be focused on are ones that help us manage our capacity.
00:20:45.719 --> 00:20:57.646
You know, in, I think, when we think of a business that sells goods, you know whether it's a retail or wholesale business we assume that the systems that are really important to them are like inventory management.
00:20:57.646 --> 00:21:00.132
Right, it's like basic 101.
00:21:00.132 --> 00:21:06.574
But in a services business, where our product is people, why don't we have inventory management systems?
00:21:06.574 --> 00:21:09.032
Right, we should and we need to right.
00:21:09.032 --> 00:21:12.635
That's resource capacity management, workload management, things like that.
00:21:12.635 --> 00:21:30.500
But we only focus on that system when we're at that stage right, when we've proven we have a clear channel to customers, when we know we can deliver profitably, then we focus on capacity and once we do that, the systems that we're focused on in innovation are ones to manage our new ideas.
00:21:30.500 --> 00:21:46.273
That's really, you know, clear guidelines and frameworks for how do we vet new ideas, what are decision-making thresholds, how do we allow ourselves to innovate and experiment in smart ways to determine what the next kind of phase of the business looks like?
00:21:46.744 --> 00:22:01.863
So it's not when it's where I love the fact that you reframed that question for us, brad, because I think that is such an important distinction is where it really, in my head, just switches that entirely, because you're right, we do often focus on timelines.
00:22:01.863 --> 00:22:08.173
As entrepreneurs, we want all the results right now every single one of us as people, and so I really appreciate those insights.
00:22:08.173 --> 00:22:11.308
It's funny having a conversation with you about scale today.
00:22:11.308 --> 00:22:26.358
I knew that there's one thing that I wanted to talk to you about, and that is a problem that I faced early on in my entrepreneurial journey, which is about things that don't scale, because, brad, when I was 19 and I started my first business, I realized I could do things that the bigger businesses couldn't.
00:22:26.358 --> 00:22:33.175
I could give that personal touch and send selfie videos and handwrite notes and mail them to clients and sponsors.
00:22:33.175 --> 00:22:41.092
There were so many things that I was doing back then that I realized helped me have a business that was worth scaling, even though those things didn't scale.
00:22:41.444 --> 00:22:42.288
I think back to Airbnb.
00:22:42.288 --> 00:22:44.633
That case study, I think, is incredible.
00:22:44.633 --> 00:22:53.135
They were doing everything as a very small, intimate team to make it look effortless, but it was a lot of manual work behind the scenes.
00:22:53.135 --> 00:22:56.165
Where do those things that don't scale fit into this business mix.
00:22:56.165 --> 00:23:04.509
Does the fourth pillar, innovation, does it sometimes bring us back to that, so we can experiment, find the things that work and then figure out how to systematize them?
00:23:04.509 --> 00:23:06.933
Where does that all flesh out in your mind?
00:23:08.016 --> 00:23:10.945
Yeah, well, I don't think it's like a binary choice, right?
00:23:10.945 --> 00:23:12.209
I don't think it's that.
00:23:12.209 --> 00:23:22.828
It's something's either scalable or not scalable, right, it's figuring out how do we do what we need to do in a model that works.
00:23:22.828 --> 00:23:38.019
So let's say that the business model is one that requires a lot of high touch right, and the value proposition that we're delivering to our customers really relies upon that intimate one to one experience.
00:23:38.019 --> 00:24:08.800
And and that's really what the business foundation is, let's just say and you're hypothetical Well then, our job as a business, in order to grow, may not mean that we need to streamline and kind of try to optimize the efforts that we put in to delivering that service, put in to delivering that service.
00:24:08.821 --> 00:24:11.686
Instead, it may require that we price our services to be able to provide that high level of touch right.
00:24:11.686 --> 00:24:26.222
So the pricing can allow us to deliver that high touch you know, boutique bespoke experience and still leave profit on the table, because as long as you've got profit, then you've got resources that you can invest into growth.
00:24:26.222 --> 00:24:37.579
You can hire other great Bryans who are just as good at delivering that high touch service as you are, but the margins are set up in a way to allow you to do that.
00:24:37.579 --> 00:24:52.648
So you know, I want to kind of focus us that it's not always about, you know, streamlining and optimizing and seeking efficiency to like some nth degree.
00:24:52.648 --> 00:24:59.211
It's just about finding a model that you can run on, repeat and use that to ultimately grow the business.
00:25:00.055 --> 00:25:10.565
That is such a powerful point right there, and I'm glad you came up with that word of streamlining, because I feel like all too often we do make it synonymous in our minds with scaling is everything has to be streamlined.
00:25:10.565 --> 00:25:19.300
But actually in your answer, what I just heard there is that having things in our businesses that are not scalable doesn't mean our business is not scalable.
00:25:19.300 --> 00:25:24.511
It just means that we need to support it in a scalable way so that we can continue delivering on that.
00:25:24.511 --> 00:25:25.473
I really love that.
00:25:25.519 --> 00:25:34.788
As someone who loves sending selfie videos, who loves sending voice memos to people that I email with, even people who aren't even clients, I think it's so important to retain that personal touch.
00:25:34.788 --> 00:25:36.748
So huge kudos to you in calling that out.
00:25:36.748 --> 00:25:57.266
I need to ask you about this on the air because before we got together today, I was on your website and, as someone who is in systems and processes, brad, I expected you to have great systems and processes and, reading through your testimonials, it sounds like not only do you bring your clients incredible results, but they genuinely love the process of working with you.
00:25:57.266 --> 00:26:04.589
I would love to hear some behind the scenes stories about the way that you structure in your own business in the way that you serve your clients.
00:26:05.551 --> 00:26:06.012
Yeah, I mean.
00:26:06.012 --> 00:26:10.082
So here's going to be something that you know perhaps you know might surprise you.
00:26:10.082 --> 00:26:10.281
Right?
00:26:10.281 --> 00:26:17.984
As a scalability guy, that's what I do, but I always like to say that what my clients desire is not always the same as what I desire, right?
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