708: (Solo) What Nobody Tells You About Scaling Past $1M, $5M, and $10M

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1:03Welcome back. Founder solo to solo episodes where I share all my lessons, all the things I'm learning from building founder these past 10 years. So every stage of business breaks you in a different way. Nobody warns you which thing is about to break. So it always feels like you're the only one who can't figure it out. and you're not the game just changed and nobody told you and after building founder for 12 13 years interviewing 700 founders the pattern always is the same the founder who got you to one mil is not the same founder that gets you to 10 and i've done this journey all the way through from zero multiple eight figures so today i'm going to break down exactly what changes at each stage and what actually breaks.

1:52So these are the three revenue walls and why each one requires you to become a completely different person.

1:59Nathan Chan:Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:12Let's start with the illustrious million dollar wall. This is really the founder bottleneck. so at a million dollars you are the business you're the salesperson you're the market the product person customer support and you now more than ever with ai you can build a million dollar a year business with pretty much yourself maybe a couple of contractors some ai agents you could do it solo you could do it with a co-founder or multiple co-founders but you it is definitely possible now more than ever i built a million dollar e-com brand with a couple of contractors and my partner at the time. So it's definitely possible.

2:48But you're wearing a lot of hats, right? And that's fine until it's not because the thing that breaks is usually your time. Revenue plateaus not because the market's tapped out, but because there's only one of you and you physically cannot do more. Now, don't get me wrong, you can use AI agents, all these different things, contractors. The fix sounds simple, you know, hire people, delegate. But this is where it gets emotionally brutal, right? Your whole identity is wrapped up in being the person who does everything. And this is the internal monologue that I used to go through. Well, nobody can do it as well as me.

3:22And that's probably true at first. And yes, you can use AI agents. You can systemize things, but there's still a lot of checking. And, you know, I know many people that are big in the AI space and they tell me, Nathan, it's incredible, but there's a lot of things that break. There's a lot of stuffing around with it. It takes a lot of time, right? And so whatever it is, sometimes it's not going to be as good as you just doing it every single time. And I learned this the hard way. We had our coffee table book. We raised about$200 ,000 through crowdfunding. Incredible result. I priced it at$40 with$40 shipping when it should have been$60.

4:02The price of the book should have been$60,$20 shipping, same total, completely different psychology. Left massive amounts of money on the table. We probably would have raised half a million, maybe even a million dollars, right? If I hadn't stuffed that up. But I was in the stage in my career where I was trying to control every decision myself instead of having someone who understood this side of things take ownership. And that's the million dollar wall. You have to stop being the person who does everything, thinks about everything, owns everything, and start being the person who finds the right people because your job shifts from doing the work to finding the who.

4:37And you know what? having a million dollar year business with not that many team members might be a great thing. You might just, you know, do that, right? But if you want to get to that next level, then let's talk about what needs to happen next because you need to start to build a team. And then we have the five mil wall. This is the systems phase. So you've broken through, you've got a team, you know, sub five, 10, 15 people, revenue is growing. Everything feels held together with duct tape though. The stuff that worked in a million, the Slack messages, the gut decisions just ask nathan collapses at five million so you need actual processes hiring systems financial reporting meeting rhythms strategic planning okrs goals kpis the boring stuff that nobody wants to build and i know how corporate this sounds but you need to get what i call the monkeys off your back you need owners and that's exactly why most founders resist it then that's exactly why they get stuck and here's the second thing that breaks at five mil that's even harder.

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6:16Remember, when you support our sponsors, you're supporting the show. All right, now let's jump back in.

6:24Culture. At a million dollars, you might have a few people. Culture's automatic. Everyone's in the same room. You can control it. There's no, everyone reports to you. The vibe is the vibe. at 5 million, you probably have some managers. You probably aren't managing everyone. You might be, but culture is a choice you make every day or it decays. And I had a hire early on, my first proper hire, like a guy I met at an event that I thought he had great hustle. And he used to rock up at like two or three in the afternoon when he was supposed to start at 9 a.m. And I let it slide for a year and a half because I wanted to be liked and I couldn't bring myself to have the conversation.

7:04And one day he showed up at 3 p.m. and then dumped at 4.30 p.m. a whole ton of work on a team member who was about to leave. And that moment poisoned the entire team. Because remember, what you walk past, you endorse. And the standard I was tolerating became the standard everyone else adopted. And here's the uncomfortable part. The same person could have gone to a different company with stronger standards and crushed it. The problem wasn't him. It was me. The environment I created. And that's the killer. Another killer is the 5mm shiny object syndrome. It's the most dangerous here because you've got a proven model that works and you could be doing many things to grow the business.

7:44And that's the danger. What saved me was a simple scoring system before greenlining any initiative. You know, ease of execution, financial impact, customer impact. If it doesn't score high on at least two, it's a distraction, just kill it. All right, then we get to the 10 mil wall, the eight figures, how to get to a million dollars a month. The wall that nobody talks about at this stage is you've got a team, you've got systems, you've got leaders leading their own teams, you've got most likely some form of a leadership team, machines humming. And the thing that breaks isn't the business, it's you, it's your identity.

8:26It's the time where you really need to transition from founder to CEO. You're not the founder who does everything. And that's where your self-worth comes from. And now your job is not to be in the trenches. It's to be a leader. It's for you to find purpose in beyond just the doing. And building a business and leading a business is a completely different skill set. There's a guy, I really like some of his content, some of the clips that I see in interviews he does. He's the CEO of NVIDIA, Jensen Huang. And his quote was, if you actually knew how hard this is, you wouldn't do it. Right. Like, and this is a butchered quote, but that's basically what he says.

9:03And at 10 mil, I think you finally understand what he meant. And things just go wrong. You're playing bigger bets. You know, it's just different. It's very, very different. And, you know, imposter syndrome hits louder at this stage. Not quieter. The bets are bigger. The highs are more expensive. The stakes are high. You're probably going to get burnt by some executive that sells you the dream. And, you know, it sounds great. somebody can run your business too and then you go hands off and then you give them the keys to the kingdom and then they almost crash it like these are things that happen to me so the paradox is cruel the way to grow faster is actually to do less as well give more people rope trust the team your job shifts from building the business to building the people who build the business and i remember i asked steve huffman the co-founder of reddit he said is it ever enough and he said no i I asked Joe Jebbia, the co-founder of Airbnb, same answer.

9:57But a friend of mine really figured something out. His business grows 10 to 15 % a year, spits out millions in profit he could sell for tens of millions and he won't because he's just at peace with the work. And his advice is I would only ever sell my company if I had something else I wanted to do. And that's the 10 mil insight. Build a business you don't need to escape from. so guys figure out which wall you're approaching if you're at one mil what are you still holding on to that someone else should own at five mil what systems are you missing and what are you tolerating that's setting the standard too low and at 10 mil who do you need to become how do you level up as a leader to make that transition from founder to ceo and how do you get better at identifying incredible leaders building and developing leaders fostering leadership throughout your company.

10:47The hardest part of scaling isn't the strategy, it's the identity shift. And every single milestone I went through with you requires you to unfortunately kill the version of yourself that got you there. And sometimes that means killing the people in your team that got you to that new level too, because they're not ready and they're not prepped. And they're just unfortunately not a fit for this new level that you want to go to. And that version that got you there, you have to become a person that the next stage demands and nobody tells you that. Now you know. All right, guys, I hope you enjoyed this episode.

11:19I want you to do three things. One, please make sure you subscribe. The more people that subscribe, the more it helps this show grow, the better the guests we can get, the better quality the content. Number two, make sure you share this with one person, one friend, one founder, someone that you think will get value from this podcast. And number three, please leave a review. The more reviews we get, the more comments we get, let us know how we're doing, good, bad, or otherwise. We'd love to hear your feedback. It helps us more than you can imagine. All right, that's it from me. I'll see you in another episode.