Dig the Moat: The Real Work After the Win | Ep 278
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- You have to at some point in the company switch from having all these one-off conversations to broadcasting communication. I'm gonna say, what do I need to communicate to the broader group? What needs to be communicated to my executives, to my leaders, to a certain department, to Alex, whoever it might be?

What's up? Welcome back to Build. And today I want to talk about getting your company from version 1.0 to version 2.0. So this podcast is inspired by a newsletter that I just wrote for my company because

Every week, well, actually not every other week, every other week, we do a full all hands. And then the weeks in between, we do essentially like a newsletter. And I usually write like what's top of mind for me, what I'm thinking about. And I got out of a meeting yesterday with my new president and CTO. And we were talking about just trends that we're seeing across the company. And I wanted to hear their observations because they're actually both new. So I've added three new executives in the last month, which has been

amazing and awesome. I know sometimes it can go the opposite way, but it's been incredible. And we were talking about what we see across the company. And our new president essentially said something to the degree of, we need Acquisition.com 3.0. Because we've had version 1.0, we've had version 2.0, but now we're taking it to Acquisition.com 3.0. And I said, I love that as like a theme to talk to. And I actually really want to write that in the newsletter this week.

And so after I was writing it, I was like, man, I think a lot more people need to hear this and we need to talk about it more because the biggest thing that I realized when I was building my first business is I remember reading the stat that said that only 5% of people that are in year one of a company are going to make it to year five when it's a fast growth company. And I remember reading that stat and being like, what? Holy crap. Like, does anyone know this? And

Rather than hold that knowledge to myself and be like, oh gosh, who's going to be here by year five? I was like, I'm going to tell my whole fucking company because I want them here. I love these people. They're amazing. But I also want them to know what we're up against, which is like,

I also need to earn my right to be here by year five because I'm not evolving and I'm not changing how I operate, then I'm not going to be able to see the company to success. And so if you're building a company right now, and maybe you're at the point where you got past initial product market fit, maybe you're past the point where you have one leadership team, but you have two.

Maybe you're past the point where you working harder is yielding any sort of result in your business. It doesn't really matter what phase you're at. I think it's really important that we all understand and message this to our teams. Because if we don't, then we can't grow our companies to the degree that we need to in order to reach our goals and to have the success we want, right?

I think a lot of what I see when I talk to founders, right, just across the board, is that businesses always have different inflection points. And there's inflection points between, you know, startup to early growth to scaling to scale up to enterprise to corporate, right? And usually what happens between each phase is some iteration of this, right? It's like, it honestly is the same in each phase, it's just a different level.

is you build something fast, you solve problems, you make decisions, and it works until it doesn't work, right? And a lot of founders, what happens is they don't realize it's not working until they're literally drowning in friction and problems and they don't understand where it's all stemming from.

And usually it's stemming from the same issues, right? Because as you grow, the way that you operate in the beginning doesn't work. And as you grow from 3 million to 10 million, from 10 million to 20 million, from 20 million to 50 million, the way that you operate no longer works to get you to the next revenue level. And usually it's some amount of communication isn't wide enough. Decisions are too siloed and people are solving the same problem in three different ways and don't know about it.

And what used to feel fast and scrappy and fun and gritty is now just a fucking mess. And I know that a lot of you can probably relate to this because at every stage of my business growth, I'm like, oh my gosh, it's a mess. We need more organization. And I find myself continuing to say that over and over again as the business gets bigger. Because why? That's the cost of growth, right? And so there are shifts that we have to make if we want to grow past the point we're at without burning everything down.

And I will tell you guys this, who I was when I started my business was not who I was when I sold my business. Who I was when I started acquisition.com is not who I am now running acquisition.com. I've had to change so many behaviors, micro behaviors and habits because they don't serve me at each level.

Even just this morning, what I was working on after my newsletters, I was like, I need to change how I operate with my end of week reports and one-on-ones. It's becoming a constraint because I have too many people in the company that roll up into me. And so I redid my whole system for that. And it's not like I'm going to, now, do I love that I have to do that? No. Do I like having to have more structure and more rules in place? No. But do I want to win? Yeah. Yeah. I want to fucking win. And I think it's funny because I told my team, I was having a little conversation with them the other day and

They're like, oh, I just hate that I have to have more than one person look at my work. And I was like, oh, my God, I'm not going to lie. I lost my shit a little bit because I was like, do you know how many people have to look at my work and my decisions? Not only do I have to tell them the whole executive team, but I got to sell your asses on my idea. I have to sell the whole company and I have to sell new people. And then I said, what am I doing? I'm just repeating the same shit over, over, over again. I'm telling people the same thing over and over and over again.

And you know what the thing is, is that I, in the very beginning when I had to start doing this, I used to call myself chief repetition officer, because I really don't think the company takes you seriously unless you're repeating things over and over again. I used to feel like annoyed about it. I used to feel like, ugh, I can't believe I have to repeat myself. Why can't I just write it down once and be done? Why can't I have one meeting? And it's like people just remember it from there on out. And then

I had a bit of a mindset shift where I was like, no, every time I do this, I am setting an example for every other person on my team to see that I live what I preach. I do exactly what I asked them to do. And I wouldn't ask them to do things that I'm not willing to do.

And when I made that shift, it made doing those things a lot easier. That being said, I want to share with you guys a little bit of the newsletter that I sent to my team. I highlighted four things that we are going to be shifting towards and changes that are going to happen in our organization. And here's the thing is like, you're going to be listening to this, whether you're at 1 million or whether you're at 100 million, this could apply to your company because it's just to what degree. And I just want to kind of break that down for you guys. And so just because my company is

is probably bigger than the majority of people who listen to this podcast, it doesn't mean that these things don't apply to a small business because these things were still true two years ago, just to a different degree. And so it's not like when you're building a quote organization, it's just that it literally has to become more organized over time. Otherwise it's not an organization.

There's a reason why startups operate differently than scale-ups operate differently than enterprises. And you don't become one of the biggest in the game unless you act like a lot of the biggest in the game. And so it makes sense you have to shed old behaviors and you have to bring new ones in. And so the first thing that I highlighted to my team is I said, listen, no more one-on-one conversations. Like, of course, do I mean that literally?

Literally, not necessarily. But I mean, let's switch from one-on-one conversations to broadcast communication. Why is that? Because you can't run a real fucking business based on sidebar conversations that people have off hours in the dark with nobody knowing what the fuck is going on. You just can't. I've never seen it work. And it will bottleneck you at some point in time. And the thing is, is that if something's important, it should be shared with every single person it's going to impact.

Right. Otherwise, what happens, especially as you get bigger? People are confused. People aren't aligned. And eventually teams start to resent each other because they're like, well, so-and-so over here just did this with their team and it had this huge effect on my team. They didn't fucking tell me. And then you might think, wow, I did this for my team. Right. I worked really hard. I implemented this new system for my team. But you didn't think about how it affected every other fucking team in the business.

And then now they've got to go clean up this mess that you got to work on and have a head start on and you're all happy about. And they're like pissed because they're like, what the hell? Like, why didn't you loop me in sooner? I thought we were a team. Do you not trust my opinion? Do you not think that I would have helped you with it? Do you not think I'm valuable? Those are all the things that people think. And so you have to at some point in the company switch from having all these one-off conversations to broadcasting communication.

Something I do every day at the end of my day to catch the one-offs that I have, because you are damn right. People stop me in the hallway. They stop me in the kitchen and I love it. I want to talk to them, but I don't want to leave their manager or their team out of the loop. And so if we discuss something, something that I practice and I never rely on other people for this, I expect them to do it, but I don't, I'm not going to take my chances is that I say, I do a look back, which is I look up.

at my calendar from, say, it's 5 p.m., I'm going to look at everything that happened before 5 p.m., if that's the end of my day, I'm going to say, what do I need to communicate to the broader group? What needs to be communicated to my executives, to my leaders, to a certain department, to Alex, whoever it might be, right?

And that is a huge part of what I do every day to stay organized and make sure that my organization stays aligned. And I would say the second piece of that is that whenever I'm having a one-on-one conversation with somebody and it brings up a broader point that's going to affect more people, I write that down and I usually write it in a memo and bring it to a meeting. And I talk about it in a group setting. So it's like, I'll get the conversation to a certain point. And then I'm like, listen, I think this would be really great if we had the whole team on to talk about this. And so we might tee it up, but then...

But then we're going to bring it to the broader group to have a real discussion. So for example, I was with a few of my executives in a conference room the other day. We had an idea come up and then we start prioritizing what we think something needs to look like. And I said, great, now I'm going to take this. I'm going to put this, I'm going to call it a V1. I'm going to put this V1 in a memo and share it with the broader leadership team. And then we're going to discuss and I want people to poke holes in it, right? And so you really have to make this shift. And it's at any point in the business. This can be that you were just working with your assistant and

And now you've got two people on your team. And it's like, oh shit, I just need to have one meeting a week. Like there are so many versions of what this looks like in a business. But the biggest thing is that having these siloed conversations is no way to build a real company. Now, the second thing is a shift from individual feedback to group feedback. Now, here's the thing. When people hear this, they're like, oh, so we're going to start calling people out in a group. No, I am not talking about shaming people in front of a crowd. I'm talking about making feedback fucking normal.

making it a public part of how our company learns. Because here's the thing, if it only ever happens behind closed doors, then you rob everybody else from the opportunity to get better. And you need a culture where feedback isn't a threat, it's a gift. So for me, where I'm at with my company is that I have lots of people who are making, quote, the same mistakes, they're running into the same issues, they're having the same habits they have to break.

So I then say, okay, I'm going to take this. I'm going to deliver the feedback in a group setting. I'm going to write a memo. I'm going to talk to people about it. I'm going to say, I'm seeing this thing.

and here's what I'm seeing, and here's what I want all of you to understand. And then I teach it in a group setting rather than one-on-one. And I found that to be immensely more helpful because imagine this, right? You have a team of five. So you give people individual feedback. Well, that works really well while you have a team of five. But then say when you have a team of 45, do you really think the best use of your time and of their learning is to keep all of the learning in one-on-one conversations that you can only have so many of a week? No, of course not. And

And so something that I have shifted towards is giving a lot more group feedback so that I can give that feedback in a group setting and everybody, one, it fosters a lot more transparency amongst teammates. But two, then I get to know like everybody gets to learn this together. We don't have to learn things so separately. And everybody will benefit from learning from the feedback that I was going to deliver to one single person, which is the amazing part about it.

And so then rather than having to deliver it, you know, 10 times individually and never to a bunch of people, I get to deliver it once to a group of people. And it just makes running things so much smoother. So I would say whether you're going from two people to five people or from 10 people to 30 people,

Try giving group feedback. And I think, honestly, the only reason I ever didn't do this in the past is because I was just afraid of how people are going to perceive it. And I've just found that people will perceive it however you tell them to. I know that sounds ridiculous, but it's like they look to you as to what's normal and what's okay. And if you're like scared and shaking and make it sound like it's this big thing, then they're going to feel that way too. Now, the third piece is

is moving from siloed decision-making to collaborative solutions. I will say, I think this is the hardest one for people because when companies are small, this is like the most notorious behavior that people have, which is when your company's small, one team can make a decision for their team and they can deal with all the consequences themselves. Now, what happens as you grow? As you grow, one team makes decisions, but then there are shared consequences.

It doesn't work because everything's connected. So one team's quick fix that they do in a silo becomes another team's fucking emergency on Thursday morning at 5 a.m. because somebody didn't think about how it was going to affect their team. This is probably the most, I would say, insidious behavior

And it's the one that I'm honing in on the most right now with my team, because I've seen it's just happening across the board with different departments, right? They think, oh, this is going to help my department, but they don't think about how it's going to affect every other department. They don't think about how it's going to affect our metrics, our reporting, what I see, what people talk about on a daily basis. And so you have to move towards collaborative solutions, moving from silo decisions to collaborative solutions, which means...

Looping in key stakeholders. I know it sounds like the driest fucking term on earth, but, and I find myself like being me. I'm like, did you loop in all the key stakeholders? I'm like, God, who am I? But I'm serious. I'm like fucking loop in the people that need to know.

It's almost like if you have a family and you have like one kid and then you move to having like five and you only tell one of them like, hey, we're going on vacation. And then like the day comes and you're like, we're going to Bermuda. And you're like, wait, what? And the other four kids are like, what do you mean you're going to Bermuda? And you're like, yeah, we're going to Bermuda. And they're like, well, we told Charlie. And they're like, well, fucking Charlie didn't tell us. What the hell? And like, we wanted to do this. We would have packed differently. Blah, blah, blah. It's like, well, it would be nice if everybody knew.

And it's the same as with a company. It's like if you're running a sports team and you only tell the quarterback what the next play is, what do you think is going to happen? And that is probably my favorite analogy for this, because in sports, you would never make decisions about where you're going to pass the ball and what play you're going to do without looping in other people. But in business, it happens all the time.

And that's why I think some of the best people that I have had on my teams come from sports teams, because they recognize the value in looping in everybody on the team. If it's not to help execute, it's for awareness so that they can support, that they can encourage, that they have visibility, that they can make better decisions. And when you're small, there's only like one person to tell, so you don't even need to have this skill. But as you get bigger, you're

You have to think in second order consequences. Okay, if I am head of sales and I make this change with sales, how does that affect onboarding? How does it affect customer experience? How does it affect marketing? How does it affect our tech team? How does it affect our reporting, right? If I'm a head of IT and I institute a new policy, how does that affect customer success? How does it affect the executives? How does it affect the administrative? How does it affect in-person versus remote?

There's so much more that you have to think through. And guys, this is why not everybody sticks around with companies as they grow. So I just want to preface this. You're listening to this, you're like, oh my gosh, this personal team is never going to want to, guess what? Then they're one of the 95% that probably won't be there by year five. Because that's what happens. People say, oh, I don't like this. There's too many rules. Well, that's why small companies stay small. Because people say, I don't like having processed rules organization. I

I don't know about you guys, but I want to win. And so if that means that I need to learn to be more organized, communicate better, operate better out of a silo, I'm always down to do it because I want to grow as a person. And that's half of why I do this. And now the last thing, and again, I would say the second hardest change for a lot of teams is moving from speed over everything to protecting the castle. Speed usually gets you there, right? But now discipline, right?

is what's going to keep you where you are. And that is what's going to create the foundation to go further. So this is the part where you start building the systems that protect what you've built, not just chasing the next wind. If you constantly chase all the next winds and you forego protecting the castle, then your castle will crumble and you will have to continue rebuilding and rebuilding a new castle every other six to 12 months

Because you have not protected and reinforced the one that you've built. You built the castle. Now you dig the fucking moat. And that is not because you're trying purposely to slow down. It's because you're preparing to scale. You're preparing to build a bigger castle. And that takes way more intention than it does just pure grit and hustle.

So I'll be real. This transition is hard. It is uncomfortable. It feels like, gosh, now I feel like we move a little slower. I feel like there's added friction. I feel like it's less fun, right? But here's the thing. Like, guess what? That's the fucking trade-off. Either you grow up and your company grows up or your company breaks, implodes, and then you start over again. And so if you're feeling that pull right now, that tension between like how things used to run and how you know that they need to run, then that is good.

That's a good thing because it means that you're at the edge of getting your company to the next level, right? And this is the part where you stop building for today and you have to start building for the company that you want to run a year from now. And so if you're at this point, whether it's 1 million to 3 million, 3 million to 10 million, 10 million to 50 million, 50 million to 100 million, you are probably at a point where you need to move from

Less one-on-one conversations to more broadcast communication. From less individual feedback to more group feedback. From no more silo decisions and moving into only collaborative solutions. And from moving away from the speed over everything mentality to protecting the castle. You build the castle. Now it's time to dig the fucking moat. And then after that, you build a bigger castle.