Transcript
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Speaker: Hello and welcome to the Independent Minds, a series of conversations between Abbasida and people who think outside the box about how work works.
Speaker: with the aim of creating better workplace experiences for everyone. I am your host, Michael Millward, Managing Director of Abbasida. In this episode of The Independent Minds, I am going to be learning how to scale a business from Steve Walsh, the author of Make the 10X Leap.
Speaker: Steve is based in Des Moines, Iowa. It is not a part of the United States that I have had the chance to visit yet, but if I ever do get that chance, I will take advantage of the membership that I have of the Ultimate Travel Club because being a member of the Ultimate Travel Club gives me access to trade prices on travel, flights, hotels, trains, holidays, all sorts of travel.
Speaker: You can also access those trade prices by becoming a member of the Ultimate Travel Club. And I've put a link in the description with a built-in discount on membership fees so that you can become a member of the Ultimate Travel Club and just like me, travel at trade prices.
Speaker: Now that I have paid some bills, it is time to make an episode of The Independent Minds that will be well worth listening to, liking, downloading and subscribing to, and probably good enough to share with your friends, family and work colleagues as well, and any entrepreneurs that you know.
Speaker: As with every episode of The Independent Minds, we will not be telling you what to think, but we are hoping to make you think. Now, Hello Steve. Hey Michael. Tell me a little bit about Des Moines.
Speaker: I would say it's a hidden gem. In Iowa, we have $3 million in Iowa, but in Des Moines proper, we have probably about $300,000 to $400,000. It is the capital of Iowa. Come here in the summer, we have the county fair, which is one of the third largest in the United States, and we have this farmer's market that was probably, I would say, number one or two United States. And so we have a lot of things going on, and like I said, it's one of those hidden gems. Sure. You're not competitive at all, are you, in America about the places that you live? No, not at all. You know, we downplay the places, but I always say that why not toot your horn when it comes to, know, where you live? Is it one of those places where you've got more or more cows than Right. There's a lot of cows, lot of pigs, a lot of corn.
Speaker: We're actually high in insurance too. We have ah a lot of insurance here. all There was a lot of innovation going on. I would say that was the one thing. If you look at areas that are growing, I would say Des Moines and in Iowa in general, we're seeing a lot of innovation. The younger people, if they're going to stay, you do see a lot more of innovation. And that's, that's the fun part. You know, the, be around the young people that want to grow businesses and, and want to expand and they want to stay in, and where they're at. And, and so that's really where I, I really love to be around entrepreneurs because of that energy they bring. People who are innovating very often do that by setting up a business.
Speaker: It can be a lifestyle business. It's all like, it's, it supports your lifestyle and it's a nice, comfortable size. But Very often it's about building a business and that's what you've done yeah in your book. Tell me a little bit about your career that put places you're in the right position to write that book. When I was a kid, i was fixing motorcycles ah for the neighborhood. And so I would buy motorcycles, sell motorcycles.
Speaker: That's really where I started entrepreneurship. But also on top of that, I was an investor. I started reading the Wall Street Journal when I was 15. I was an avid reader. I had some really good mentors along the way that's really helped me push me to the next level. And I've always said that the the one thing that as an entrepreneur that I always look for is entrepreneurs who you're surrounding yourself with, either entrepreneurs with other entrepreneurs or coaches
Speaker: or if you're if you have mentors. And i I'd say that every entrepreneur should have at least mentors or coaches. I was always an investor, and and that's where I came from is investing.
Speaker: But i also saw entrepreneurs struggling and doing the some of the same things over and over again. That's why I wrote the book. I was seeing that you know they were stuck in one area, and that book really gives them kind of the blueprint of...
Speaker: what it looks like to scale their business. One of the things I look at is when I look at at a company, when i I look at the entrepreneur and and how are they positioning them themselves? Are they actually a in the weeds doing all the work or they actually, a I would call, a businessman?
Speaker: A lot of companies, what happens is the entrepreneurs, as you said, create themselves a job. Really, what they need to do is look outside and look into their business, look and see what are the things that they're doing that they shouldn't be doing. I've had companies that I've looked at, I've experienced with companies that have really grown.
Speaker: One of the things they did is taking themselves out of that role and replaced them with somebody else. Entrepreneurs a lot of times say, well, I can't find anybody that can do it as well as me.
Speaker: I guarantee you there is somebody out there that's probably a lot better than you are in doing a lot of the things that you shouldn't be doing. When it comes to scaling, that's where you have to start. You have to start with what am I doing right now that I need to do take myself out. On top of that, you have to have kind of a roadmap, meaning you have to have...
Speaker: where you're going. A lot of entrepreneurs say, well, just want to get to, let's say they're at 3 million, they want to get to 10. I say, well, not why not 100? Because I tell you what, 100, just as hard as to get to as is 10, 10 million. So,
Speaker: You work at what are you doing first? You have to have an end goal. And from that is you work backwards. You work backwards on what does that look like where we're at now to get into that level? Who do we have to have in place? And a lot of times it's taking themselves out of the day-to-day operation and creating them as more of the visionary. Because I believe that a lot of great companies, they've had two people. and One is the visionary, and the other one is the implementer.
Speaker: Good examples of that. So let's talk about Microsoft, a visionary, the public face of the organization, and then somebody behind the scenes who isn't in the media as much, but is actually doing all of those business-type things.
Speaker: The Virgin Group. right Sir Richard Branson is a very public figure, a great example yeah of an entrepreneur leading the business. But somebody there who's been in the background for as long as he's been involved in in the Virgin Group, building the business, doing the day-to-day things.
Speaker: What you're talking about, I think, is that you have to, as an entrepreneur, decide what your role is at different stages of how your organization is growing.
Speaker: And if you can't make those those shifts, you have to find someone who's going to be able to do it for you. I've worked with entrepreneurs who've said, you know, when I started, I was the managing director, the chief executive, because there was no one else. But I didn't start this organization to be the chief executive. I started it to do something that I love.
Speaker: so logic tells me i want to focus on that i'm really good at it let me find someone who's going to be the person who's going to manage the business and let me do the things that i started this business to do and then i can go out and tell the world about it but i don't want to get involved in payroll or working out the contract for the cleaners or that's not what i did why i started the business Lots of people turn their passion into their business and they don't want to take on the run of the mill tasks, but they can fail if they don't realize, I think, why it is that they
Speaker: set up the business in the first place. Yeah, exactly right. I mean, I think, you you know, you said you said something that really interesting, like Microsoft is a good example. When Balmer took over from Gates, he actually just didn't do a lot of anything with it. It it stayed where it was stuck in a range.
Speaker: arrange that was the one thing that really changed once they replaced Balmer. Balmer was a good, probably, I would say probably a good implementer, but he was a terrible visionary.
Speaker: If you look at ah great visionaries, they can't, a lot of times they don't overlap. And what happens is you have, you know, either way they're, There's a visionary that tries to get in an implementer or the vice versa, and it just doesn't work. But if you have two of them, it's it is great to watch. I had chance to sit down with ah two, basically, they had run a couple of different companies, they had sold companies, and and now they're running Office Depot. You can see they work really well together. There's one that is a visionary, and and then there's the other one that's the CFO that does the day-to-day operations, and Their roles are defined, that's which is really important. And then also one of the things I would say about them is that they knew their skillset.
Speaker: They know where their strengths are. And that's really important when it comes to running a business The entrepreneur really has to understand where they're weak and where they're strong. Because a lot of times what happens is you have a entrepreneur that's trying to do so a lot of the things that he's just not built for. And that's okay because not everybody's built for the same thing.
Speaker: But they'll have a lot better time, a lot more fun if they bring somebody else in. Sometimes an investment group will bring me in and look at a company and see why are they struggling. Most of the time, it's because of what's going on with the group. It's it's not the company itself as much as it is the people.
Speaker: When I look at coming in and buying part of it or all the company is, what are the people like? Do I need to replace people? Do I need to make some adjustments? Are they in the right seats? Mm-hmm. A lot of times what happens is when you're growing a company, the people that you bring along may not be the ones that are coming along with for whatever reason. Maybe they just can't handle that. But other thing is, too, you just have to decide which direction you want to go.
Speaker: If you want to get to that 100 million mark, it's just as hard to do 100 million versus it is to go to 10 million. I look at it as bring along people that really want to grow, that want to learn, they want to grow with the company. As an entrepreneur, a lot of times they take themselves out. And that's not bad because they they feel that sometimes they give up control. The control is not the problem. It's like you need to have the vision. The vision is where you want to be as a company. And then the vision is who do I want to get on to run the company with me? The experience I've seen and experienced myself is those are the two people that you want on board first. And then on top of that is they can get a lot of the stuff in place.
Speaker: That is the fun part. It's the scene of the growth, the scene of the people really grow. And and that's where I look at it as, you know, like Office Depot. I'm excited to see what they're going to what's going to happen with them. going forward. I think it's it's going to be something that's super exciting to see.
Speaker: But any companies like that, if you look at what's going on, you you can see each company doing some great things like that. In your book, Make the 10X Lead, you've described a 3C investment lens model.
Speaker: Can you explain a little bit about that, how it works? Yeah, so 3C is when you really want the clarity. You want the clarity, you know, that's where it starts.
Speaker: You're cutting through the noise, that clarity that you have about where the direction is that you want to go. a lot of times entrepreneurs are kind of all over the place and they see that shiny object and so they they don't have the clarity. And that clarity is really important to where you want to go, the direction you want to go. And then it's about ah that clairvoyance. What I have, I always say is it's seeing what other people don't see.
Speaker: You know, a lot of times optimators are great at seeing things that a lot of other people, a lot of other companies just don't see what makes you different than everybody else out there. You know, that's the one thing is when you see things that your competitors are not doing, things like that, that's that clairvoyance that you have.
Speaker: But then it's, Confidence. The confidence to take action. You know, the confidence that you have to have when it when it is, when you you know the direction you want to go, that you know the you have the clarity to get and then all of a sudden take that action.
Speaker: Those are the things that really come into play. So that's why I put that together is because of that. It is a blueprint that I put together that I see that a lot of entrepreneurs, they don't see the clarity, they don't have that clarity where they wanna go. And then, but they do see a lot of times what other people are not seeing.
Speaker: And so that they just have to be confident enough to take that action afterwards. One thing that someone said to me last week was that, you know, Michael, you were ahead of your time. I had that clairvoyance in setting a business. I did something which, yeah, now people, everyone's doing it.
Speaker: But I had the confidence to do it. Looking back, you sort of think like, yeah, I've got all of these ideas. The thing is to to have the clarity which idea to focus on at any particular point in time, and then find the people who are going to help you bring that idea to fruition, so that it's then the building block that you built you have to build the next stage, and then the next stage, and the next stage. they always say, if you can make it a big enough, you can bring on some A players. If you can make it big, you know, the the A players will really get on board with you on that. As long as you're clear the direction you want to go, you'll get people on board that want to go with you. You know, they they want to have just as much fun as you do.
Speaker: You know, it comes down to that that passion, I feel, that, you know, the people have for their business or their whatever they're doing in the industries that they're doing. And it's, it, it is I would say, once you have that, people really love to be on board with you. And it's fun. Yeah, I totally agree with you. We've sort of summarized the book and three, the so the three C investment lenses very quickly there, but there's much more in the book than just the three investment lenses, what else can people expect from the book? you know, the thing is, I'd say that a lot of the things that you talked about earlier on is that lifestyle business. You know a lot of entrepreneurs, they are comfortable in what they're at. But the thing is that lifestyle business gets them to the only one level. And then that's like, as an entrepreneur, we're not doing ourselves any favors if we want to move forward. and Because really, lifestyle business ends with you.
Speaker: And most businesses can scale. It doesn't matter what how small the business is. And so that's where that's the book starts out with that. yeah know some Some of the things I would look at is when you're scaling,
Speaker: systems you had to put in place, what types of systems you have to do to get scalable. You know, the the one thing is always think of it as ah as an investor lens, because really what you're thinking is, what are the things I need to be in place to scale this? What systems I need to be in place?
Speaker: What people need to be in place? And that's in the book that I talk about. And then capital. What kind of capital you want? i always say this, if you want smart capital or you want dumb capital, one thing I would say is bring in smart capital because smart capital will get you in a lot ah faster direction.
Speaker: You know, the the one thing I'd say when you when it comes to the smart capital, it is what can they bring to the table? You know, they can if they just bring capital, that's probably not the person you want.
Speaker: The person you want is something that can open doors for you. the want The people that can get to the next level with maybe your products or services. Those are the people that you want on board as an investor. yeah And the ones that can maybe make you think differently.
Speaker: I've seen this on the Dragon's Den television program here in the UK, which I think is called the Shark Tank in the United States. Correct. An entrepreneur goes into the den, the Dragon's Den,
Speaker: and presents their business and then the entrepreneurs the successful entrepreneurs who want to make an investment the dragons you want to make an investment don't just talk about the amount of money that they can put into the business they talk about what comes with that money. They will say, I have a team of people who will develop this product a lot faster, who will put you on the straight and narrow with all your admin and and get everything. So we're we're actually making more profit from each pound that we invest. I've got people who can do that. I've got people who know the people who will be wanting to sell this product.
Speaker: So I'm going to bring a sales channel to you along with the investment. The smart money is the money that's going to come with more than just the money the expertise the knowledge the contacts that will help build the business the dumb money is like the silent partner but there's no such thing as a silent partner they bring them they bring their money along and they've got nothing to offer other than know what have you done today what haven't you done today why haven't i got this the people the smart money offers you something and is supportive
Speaker: The dumb money, I suppose, wants to get its money back as quickly as possible. Yeah, and I think on the smart money side, you a lot they understand that you know this is a business and it moves. you know It's not in a straight line a lot of times.
Speaker: But I would say one thing is, as an entrepreneur, if you just keep the investors informed, they're going to be right with it. They're going to be okay with it. It's just a matter of if communication's really important when it comes to working with without with investors. And I think the thing is, they're willing to work with you, get you the next level, open doors that you probably never open doors because of of who you are. but but i And also, too, when it comes down to it is ah a lot of times,
Speaker: When they bring capital in, investors, you know, they'll they'll throw capital at at a company and all a sudden they bring this capital in. And I talk about this in the book, that there's no direction. They have all a sudden they have all this capital and they have to spend it.
Speaker: Well, a lot of times what happens if they don't have a plan in place, they'll start spending on things that they shouldn't either. You know, some of the marketing that they they think that is going to move the needle or um and maybe new products are going to bring on things like that, that they haven't really thought through. Yeah, it gets a bit more basic than that, though, doesn't it? Sometimes I've worked and with entrepreneurs who've got investment and i say there's a million pounds in the bank and you know we're going to have this office or we'll have this type of computer which they don't really need in order to deliver the product, the service to the end user but it's they want the trappings of success before they've actually deserved the trappings of success so that they can tell people who aren't customers that they're successful it's a big, big risk because the thing that people are interested in
Speaker: when an organization has built an investment is that burn rate. yeah How quickly you using the investment up? You have to demonstrate that your burn rate is effective and it's delivering results rather than just spending lots of money.
Speaker: You're talking to someone here who worked through the dot-com boom, you see, and saw all of those sorts of things happening. but yeah Yeah, the dot-com boom was kind of everybody and their mom was putting a dot-com behind their their company name thinking that's going to attract capital. And it did, but it was relatively short term. ah the The people that really survived that were the ones that really had a plan, that really actually had ah a business plan, that actually were making money. that um that saw a vision that could get them. and It didn't matter what the if it was a dot-com. It didn't matter the time. They just knew that this is the direction they needed to go. Those are the ones that survived. The ones that didn't survive were the ones that just came along for the ride, that saw that yeah the industry was moving that direction and people just climbed on board. Those are the ones that didn't survive. And I think that we're going through the same thing right now with ai
Speaker: you know A lot of companies are looking at as going to be, the I would say, the savior of their business. And I would say just the opposite. with AI, the way it's come ah moving so fast, a lot of people are not going to trust what AI is producing.
Speaker: And so it's becoming more and more where relationship building. Relationship building is going to probably be more important than ever with that. I would say that if you're not talking your customers, you're you're missing out.
Speaker: You know, if you're just using AI to talk to your customers, you're missing out. You're not really hearing who they are. Yeah. So as an investor, looking at an entrepreneur and their business, one of the things that some people might get very excited about is how everything is automated with AI and the connection with the customers is minimal in terms of actually having direct contact with them.
Speaker: And what you're saying, correct me if I'm wrong, is that The way to build a business is to communicate with your investors to make sure that they know what is going on and can be there to support at the right times in the right way.
Speaker: Maximize the way in which you use their experience is of things. But at the same time, you've got to be communicating with your customers. So you might be talking to your investors to keep them informed and then listening.
Speaker: But with the customers, I suspect it's the other way around. You're listening to your customers so that you can then go back to them with different solutions, things that will meet their needs in a better way so that you can use that to grow your business and inform your investors of what it is that you're doing.
Speaker: Yeah, i I believe that, you know, that the customer obviously always comes first. and And the more you know about that customer, the better off you're going to be down the road on if you have new products coming out, new services coming out, what can I provide that customer That customer, what is it that ah that they're missing that I could provide to them? yes A lot of times entrepreneurs, they they get kind of pigeonholed on what what they're selling their customer and they don't think about outside the box.
Speaker: And that's where I come in is like suggesting, okay, what is it that you're actually working, how you're working with your customer right now? And and what are the things that, that they're, they're pain points and you really need to know your customer inside out, probably more so than they, they know themselves sometimes.
Speaker: That's probably true. But you could also say the same thing about the entrepreneur, because I think with lots of entrepreneurs, there is this, uh, I don't want to make the wrong decision, so I won't make a decision. I don't want to hire the wrong person, so I won't hire anyone.
Speaker: I don't want the wrong advice, so I won't ask for advice. It's an emotional process to go through, like finding or accepting that someone else can look at your business in a different way.
Speaker: Because in reality, no one cares as much about your business as you do. So sometimes you need someone who's going to say, So what? No, this is my view, this is my opinion.
Speaker: You take it or leave it, but it's what it is. And you need that that separation from the emotional side of being an entrepreneur to actually then, it's here,
Speaker: the things from people who aren't emotionally involved. Correct. You know, I always say that I want to be just as much, want them to grow just as fast as they want to grow. And I think it's a lot of times where an entrepreneur thinks it's going to be their way or the highway a lot. And sometimes that works, sometimes it doesn't. You know, the ego can be a big problem sometimes with entrepreneurs. Tell me about it, mate. Tell me about it.
Speaker: we have to deal with just like you work with lots of entrepreneurs and just like you i would probably say that sometimes they need to be handled with kid gloves And every so often, you need a boxing glove.
Speaker: ah Right, right. The boxing gloves sometimes come out. And, you know, sparring is not bad. I mean, it's like that can be fun sometimes. yeah But also, too, is as an investor, I understand that decisions are made. And sometimes they're not the right ones or they're not the right direction. But here's the thing. You can self-correct.
Speaker: as you self-correct, you know, those are the things that you bring up is what are the things that you're, that aren't doing well? What are those things that I need to bring in? Maybe another person that, that sees it differently than me.
Speaker: i think the overall message that you're saying though, is that as an investor, as an advisor to entrepreneurs and to other investors, if you are running a business, setting up a business, trying to grow a business,
Speaker: the most important aspect or asset that you can have is is an open mind. Yeah, correct. ah Open mind is, always say, the learning mindset goes a long ways.
Speaker: you know Yeah. Yeah. You know, Steve, I wish we had longer because there is so much that we could discuss and learn from. But you've written this book, Make the 10X Leap.
Speaker: It's a key piece of reading, I think, for anyone who wants to become an entrepreneur who or who is an entrepreneur and wants to grow their business and just grow it, like you say, to that big turnover. But I've got a good flavor of it. And thank you very much. We really do appreciate the time. We'll have to do have to have another chat another time. But yeah, thank you very much for today. It's been great. Michael, it was great meeting you. And if you want to reach out to me, go to steve at bisonequitygroup.com or go to bisonequitygroup.com is our my website.
Speaker: We will do that. We'll put a link in the description to all the websites. But for the moment, Steve, it's been great. Thank you very much. Really do appreciate your time. Thanks a lot, Michael. It fun, as always. Thank you.
Speaker: I am Michael Millward, the managing director of Abacita, and I have been having a conversation with the independent mind, Steve Walsh, the author of Make the 10X Leap.
Speaker: You can find out more information about both of us by using the links in the description. I'm sure you will have enjoyed listening to this episode of the independent minds as much as Steve and I have enjoyed making it.
Speaker: So please give it a like and download it so you can listen anytime, anywhere to make sure you don't miss out on future episodes. Please subscribe. You'll probably want to share the link with your family, friends and work colleagues, but more especially probably with any friends or family who are entrepreneurs or thinking about becoming an entrepreneur.
Speaker: Remember, the aim of all the podcasts produced by Abbasida is not to tell you what to think, but we do hope to have made you think. Until the next episode of The Independent Minds, thank you for listening and goodbye.
