Brandon Dawson: 9-Figure Founder Reveals the Real Reason Businesses Stop Scaling | Entrepreneurship | YAPClassic

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25:21Hala Taha:Yeah, fam, I built an app in 15 minutes. And before you ask, I didn't suddenly become a software engineer. In fact, I've never written a line of code in my life. But now I'm trying to apps like it's my day job. And that's because I learned how to do it through MindStone. It's an AI transformation company that helps close the gap between having access to AI and actually getting value from it. So this all started when I attended their Breakthrough AI Weekend. I learned about their platform Rebel, which basically helps you use AI in a way that completely transforms the way that you do your work. I left that weekend thinking that I have to roll out MindStone to my entire team.

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28:32Yeah. And, and the reason that was a rule is because literally four years of my life in the previous company, I would be sweating by 10 o 'clock in the morning every other week. Cause I'd have payroll coming and I was always short 200 grand, 300 grand. And I was dialing for dollars and I was scrambling to try to get money. And I was like, I am not going to live that way. I mean, it's so horrible. And for any entrepreneur that's living that way to date, there is an alternative. The alternative that I decided I was going to create a rule for myself when I started my company. I turned the whole idea of revenue, profit, and cash into a game.

29:10And so what I did was when I launched my company, I had 90 days of cash. And I told my team, for every two weeks, here's the target we have to hit in revenue. And it buys us two more weeks of being in business. And when we launched that business, June 15, 2005, I had literally 90 days of capital. My target was to generate 15 ,000 in the last two weeks of June. I generated 76 ,000. So then my goal was to get 30 days of cash reserves. So if I went to zero, I could live for 30 days. That was target one. Target two was 90. Target three was 180. Target four was a year. Target five was 18 months of cash in my account.

29:51So I never had to think or worry about money. It showed a discipline in the business. Well, within 36 months, I had 18 months of cash in the bank. I never once thought about money in that 14-year cycle. I was running events with 1 ,200, 1 ,400 people that I would pay for millions of dollars. Money became zero issue. And that's the discipline. And that's how we teach business owners to grow and scale. Consequently, I launched this business with Grant Cardone six years ago. And I said to him, we're going to launch a business. We're not going to use any money. I don't want you to put any in. I'm not going to put any in.

30:28And I said, in the first 60 months, we're going to go from dead stop to$125 million in revenue, and then the next 60 to a billion. And so we just finished our fifth full year. It's five and a half years. And last year, between Cardo Ventures and 10X Health, which I bought Gary Brecka's$1.5 million business, and then turned it into$125 million business within 36 months. So between the two businesses, we own 99 % of Tenex Health and Cardone Ventures. Last year, we did$240 million in revenue. We made$45 million of EBITDA. And we've never borrowed a dime. We've never invested a dime. And we have cash reserves about$50 million.

31:10Hala Taha:Wow. That's really awesome. So do you recommend like 18 months be like the ultimate goal for entrepreneurs to have on hand? Look, it's all about people will say, you don't need 18 months. So of course you don't. But if you had 18 months, and all of a sudden you can buy a competitor and you had extra cash, that would just accelerate your growth cycle and you have confidence to be able to run it. But if you don't have 18 months and you've got one month, you're never gonna buy anything and you're never gonna risk anything. You are going to, you know this. I don't know how many people you've probably hired thought they're gonna save my life and then you're firing them six or nine months later like they didn't do shit, they caused problems.

31:43If you're a young entrepreneur, as you go through the growth cycle from one to three million and three to eight million and eight to 15 and 50, everything dynamically changes with a multiplier. Because when you're three million or less, and you know this, you're doing everything. When you go to eight to 15, you now have to do everything but through other people. And if you're not skilled at finding, attracting, aligning, developing, and keeping great people, how do you do it through other people without them degrading what you did that worked? And if you can't, you end up breaking and going out of business.

32:15By the time you're 25 million, on average, you've got somewhere around, I don't know, 25 million, you got somewhere around 50 to 150 people working for you. If you've never taken a leadership class or you've never taken a communications course, or you didn't become an expert in personalities and communications and leadership, you're in big trouble. And so the things you need to evolve, if the business is going to grow and scale, the person in charge of the business must grow in scale. I've never seen an entrepreneur that built a$3 million business that stayed a$3 million entrepreneur and grew to$100 million.

32:55So the business will follow the leader, 100%. And then after$15 million, the business will follow the leaders. And then after$45 million, the business will be culturally the leader. And if you can't make those transformations, you're out of business. Hmm.

33:11Hala Taha:Let's go deeper on some of those concepts. So one thing I want to talk about, you were just talking about teams. One last question on your sale of Audigy. Is that how you pronounce that business, Audigy? That's correct, yes. You actually shared some of the earnings of when you sold with your employees. When I started the model, I shared 45 % of the equity with my customers on an innovative program I put together and my employees. Yeah. So your employees knew when you were hiring them that that was like part of their compensation package. This is where most business owners, John Maxwell talks about in 21 Irrefutable Laws, the leadership law of picture.

33:53Where there's no picture, people get lost. They get confused. They don't know where they fit into the picture. So they start emotionally self-selecting in or out of certain things. And how many times do you think a business owner sat back and said, man, I was just getting ready to promote that person. And then they quit. Well, because that owner did not paint a picture. There was no destination. The employee could not see themselves inside of the owner's bubble. They couldn't translate. If I'm here eight years or 12 years, what do I get out of it? How much could I put in my bank account? How wealthy could I become?

34:26because no business owner generally starts their business with a 10-year plan showing valuation enhancements and increases and what it means to the individual because they build it year by year, step by step, brick by brick from the ground up until it traditionally collapses because at some point your best people feel overwhelmed, overworked, underappreciated, and they have options. So if you can't keep your good people, every person I hired, in fact, my president started first job he ever had, And I said, you're going to have seven to eight bosses. And if you want to quit at any time I put a boss in charge of you, then you're the wrong guy for me to let you run this company eventually.

35:03And he's like, but I don't like these guys. I'm like, yeah, but I have to hire them because they technically know how to do the work that you don't know how to do. And what makes you great is you culturally understand the organization and you represent the brand. But if you culturally, operationally, and financially don't learn to integrate those three things, you can't be in charge because you won't understand how to grow the people underneath you.

35:27Hala Taha:So you have to have the competency to do the job, not just the confidence to do the job. And so everyone understood. And when I sold the business, 65 % of my leadership that got 15 million out of the business, it was the first jobs they ever had in their career. Wow, that's incredible. All right. So let's move on to like some of your scaling and leadership principles. First off, you always talk about the difference between the word scale and grow. Can you talk to us about the difference? Scale versus scaling, yeah. People confuse those things. Scale is maximizing what you have. So if you're at 10 million in revenue and you're making 15 % profit, before you try to go to 25 million, you should try to go from 10 million in revenue to making 3 million in profit.

36:09That would be scale, maximizing what you have. Scaling is the rapid expansion of what you can prove works. So now once I'm 10 million and I move my 1.5 million to 2.5 million in profit, and I'm feeling like that's a really good spot for our organization. So instead of trying to just bank a bunch of revenues, I'm actually trying to increase the bottom line, create bigger cash reserves, create discipline into the organization. And basically, once you do that, and then you're like, okay, I'm gonna hit the go button because I have safety. I have cash reserves. I have great people. We know what we're doing.

36:44We were able to improve the performance of the organization, not just chase revenue. and now I'm going to bump to the next level. Because the thing is, is that each time you bump in 10 million increments, what got you to that 10 million isn't going to get you to the 20. And what got you the 20 is not going to get you to the 30. And if you're the main driver of the business, you have no idea what you're doing. And if you think you're going to hire anybody to come fix your problems between 25 million and startup, you're wrong. Most people you bring in will break your business because they're bringing in the context of their problems from their other jobs and they're bringing them into your little business.

37:18So if you want to go from zero to 25 million, you're just going to have to concede that you have to home grow that team if you've never done it before because you don't know what that team actually looks like. And you've met plenty of people that are like, oh, there's 6 million in revenue. Here's my CEO. Here's my CFO. Here's my COO. Here's my CMO. There ain't no CEO, CFO, CMO that is worth their weight of anything you're paying them at 6 million in revenue. Those are$75 million to$125 million jobs. Somebody considering their CFO and their CMO at$6 million in an organization like ours or yours would be a director level.

37:57Someone making$80 ,000 to$150 ,000 a year. They don't know anything about a$25 ,000,$50 ,000,$100 million business. So what happens is business owners hire these people in, they get close to them, and then they're constrained by the competency, the skill set, the leadership abilities, and the thanking of the person they gave a big title to, but they've never actually run a big company. And so now they're stuck. And all the decisions that are gonna be made across the spectrum of five or six people are all gonna be wrong because nobody's ever done it. And so you just have to own that. And if you wanna build a$25 million company, you have to say day one, I have to grow into being the kind of leader and responsible business owner that knows how to build a$25 million company.

38:44Once you make that commitment, you're like, what does a 25 million responsible, profitable, successful business look like? And if you don't go out and find that data, then you have to concede you're building your business through trial and error. It's the slowest way to do it. It's the riskiest way to do it. And if you let your ego get involved, you're going to go out of business.

39:04Hala Taha:Why don't we take my business as like a case study and you can kind of tell me like, what do you think I should do? or like, because I'm kind of at like a pivotal point. So my company made$7 million last year. How many employees do you have? I have about nine US employees and like 40 international. So actually our talent, we do a lot of international talent, lots of people in India and Nigeria. And then I have about nine US employees. In terms of my executives, I just have two. I have one girl, Kate, who helps me run my social media agency. And then my business partner who helps me run my network, who's like more of my COO.

39:38Hala Taha:So to your point, we don't have like, you know, fancy titles. We don't have a C, we have like somebody who helps us with finances, but he's, you know, not a CFO. And I haven't really spent a lot of money hiring executives yet because to your point, I feel like when I do hire, you know, expensive U.S. hires, they don't do anything. They're not helpful, especially at this stage. Because to your point, they don't know enough. And I'd rather like, you know, Kate, for example, who's one of my highest paid employees, she was an intern that started with me seven years ago. Exactly. Yeah. So talk to me about like what, you know, we want to get to$30 million in the next three years.

40:14Hala Taha:What do we do? Okay. Well, zero to three million is just the thing that you do. It has to work. Now, you just mentioned that effectively you have two different businesses doing seven million. Yeah. I have two different businesses doing seven million. My podcast itself makes a million dollars a year. It makes a million and the other business makes six? Six and a half. Okay. So now, so what you got to look at, those are two separate businesses. And so when you aggregate the revenue, and what you already said is you have a service leader, somebody who's running each of those businesses is what you defined, right?

40:46So you have a key stakeholder in each of those businesses and then you're the visionary. And then you hire and help for finances and things like that. So this is kind of how it's built. The what you do will get you to 3 million, who you do it with gets you to eight. So what's allowed you to get to where you're at is you've got a couple of people you can rely on and depend on, and I call this the rule of three. I've never seen a successful$8 to$15 million business that didn't have three stakeholders because no one person can do all the things that you need help doing. You can't run a podcast plus an operating company, plus be the host, plus be this, plus be that, plus be doing the books in the middle of the night.

41:23You can't do all that and be 8 million by yourself. It just doesn't work. So 3 million, you can get there by yourself. The move to 8 million, there ultimately is always gonna be three people involved with doing it. to get to 15 million, those three people need to evolve to critical positions in the organization. The visionary founder, you're going to be one of those. There's no question. But if you don't flank yourself with a controller level financial person who is easy for you to communicate, easy for you to get along with, easy for you to trust, because theft is a big thing in these businesses.

41:57If you don't have that by your side, you're going to start making technical financial decisions that will break your company eventually. The other side of you is you're going to need that operator, that person that you just talked about, but they're going to have to look, they're going to have to help you across both organizations. Now that moved to 25 million. By the time you get to 25 million, because you're going to be running your business on somewhere between 12 and 17 different systems at 25 million. You're going to have your CRMs, probably different ones for different businesses. You're going to have your technical teams.

42:31You're going to have your different automation you're running on. You're going to be using your social media. All this needs to get consolidated into something that you can look at and take action against. And at 25 million, you're going to be having to switch your business from cash to accrual somewhere in there, which means you're going to start changing compensation structures. You're going to piss off people. You're going to start realizing that the money you book as revenue is really deposits. And so you're going to think about the context and the strategy of your business a little different.

42:59You're going to need a different caliber person who can make that transformation financially for you.

43:03Hala Taha:What you should be doing is you're... We did the accrual already. Perfect. Yeah. There you go. So you go from cash to a hybrid, cash accrual, and then eventually you go full accrual. So these are all the things that for your business to mature. But at 25 million, you're going to need five people that are running your business alongside you. You're going to need a financial person. You're going to need some level of technology person. You're going to need your operating person. you're going to need your salesperson to make sure you're closing and getting the money in. And then you're going to need you setting the tones.

43:33Here's where we're going. That rock over there is where we're sailing to. There's no compromises. And we're going to do it within the boundaries of how we structured and run the organization. You're going to be looking at cash collected daily against monthly targets divided by 30 days. And people say, but we don't work 30 days. There's only 20 days in a work week. You're like, no, that's a rule that somebody else made up. We take money in 30 days a week. So how do we offer things where we can collect money or how do we run dual teams so Saturdays and Sundays we can also generate capital? Somebody has to be in charge and this is what happens with businesses as they start to grow.

44:09The business owner gets trapped in doing all the work and hopes the people they surround themselves with, they're going to set that tone. But those people have never been in that kind of environment. They don't work in that environment, the work-life balance starts to become a conversation, all because targets are being missed. People are pissed. They're not making the money they want. And all that weight starts landing back on your shoulders. And people are saying, you don't give us the attention. You don't give us the time. You're too busy. You're not giving us the right direction. I would start today at seven and say, target is, if you're going to do 30, you might as well do 45.

44:42Because what you're going to have to do to get to 30 isn't going to be any different to 45. You could say 25 and say, okay, this is what it's going to look like. At 25, I'm going to have four other partners. At 25, we're going to be running 25 % profitability. That's$6.25 million of profit. We're going to be generating$2 million on average, $2.2 million every single month, divided by 30. That's our daily cash target. And I'm going to be looking at that cash collected every single day. And if we're ahead of schedule, we're going to adjust our target up. If we're behind schedule, we're going to attack it and get back on target.

45:16and you're going to drive with that level of intensity. And if you don't and you're like, oh, it's working and I hope it works and they're going to be great, it's all going to fall apart around you. And that intensity never ends all the way to 125 because to go from 25 to 45, 45 to 75, 75 to 125, you as the owner are going to have to make the leaps and bounds of a skillset adjustment. And the way I have done that is I bring retired people in who are really an authority. I hire them for up to 18 months to work side by side with the younger people I'm developing. So they understand how to make the move from cash to accrual or hybrid.

45:54They understand what cash collected is. They understand how to put money aside and how to get money on the money. And they understand how to manage the balance sheet. They understand like somebody has to teach. If you have a great finance person who's young and hungry that you trust, somebody has got to develop them on what a$125 million CFO looks like. Well, you start hiring those people. And then if you don't like them, you get rid of them and get somebody else, right? But you're not burning out your one person you really like, but they just don't know what they're doing. And the biggest risk is those people aren't going to want to let you down and they're not going to want to show you weakness.

46:30And you're going to find out something really bad when it happens, but they're not going to let you know it's happening to fix it ahead of time because they're scared that you'll lose confidence in them. So that's what you're going to do to get to 25 or 30 million.

46:42Hala Taha:So I know that there's sort of like a bottleneck or a plateau at three to five million that a lot of businesses hit. So how do people get over this? And what are some of the common challenges that you see at that stage of entrepreneurship? Yeah, well, just look, just statistically, 30, four and a half million small to mid-sized businesses.

47:1192 % I believe are stuck at 3 million or less with 12 employees or less. So it is break point one. And that's because the what works and then you hire a friend or two and then maybe you got your daughter or your wife or your mother working in the business. And so things are kind of working because you are good at what you do. Now you're free and you're stuck and your profitability is shrinking. You don't really know how to manage your business well because you have all these personalities. You're not exerting leadership because you don't want to upset your mother-in-law and your daughter or your wife.

47:49And so people are tiptoeing around each other. But now you're spending more money. You're hiring marketing agencies. You're hiring employees. you're buying vans or you're increasing your location size because you're pushing your business to growth. And all along that you're pushing it, this is scale versus scaling, you're getting diminishing returns. As you get diminishing returns, you start to get flustered. You start to get frustrated. You start to get fear. You start to have anxiety. You start to get more stress because you're making less money and you're working even that much harder. And you start to give up on the idea of getting big and you decide to settle on what worked with the people it worked with.

48:29This is the cycle these businesses go through. I call it the washing machine cycle. It just keeps going. You take something out of the wash, you put something about here, and you're still banging around, banging around. And it's because the what you do is only going to get you so far. Recognizing from three to five million scale versus scaling, you shouldn't be trying to push your business by spending more money and by hiring more people and by buying more assets. You should be trying to slide to 5 million with the same people, the same assets, and the same resources you have at 3. Because there's no way you've maximized your operational effectiveness in your business when you have no idea what you're doing and you assume you do because it works.

49:12But it will not work when you go from 3 to 5. Increasing the costs, increasing assets, increasing time isn't the thing that's going to take you to five. Being more efficient, being more effective, hiring higher quality people who can execute without you babysitting them and do it for you instead of you doing it. These are the things that are going to move the business and they will pull the business up versus you shoving it up. And this is why so many business owners wear themselves out. And if you listen to people, they'll use the right language. It's like rolling a huge rock up a big hill. Yeah, because you need a team to pull a rock up the hill.

49:50So you doing it because you're good at something and you've been doing it is the thing that's going to kill you. That rock will roll back on you. You recognizing you need to surround yourself with other people who are as committed, who want to help you pull that rock up the hill, and they come alongside of you. Well, that's a different skill set because you have to create that. And you can't do it. No accountability, no discipline, all that stuff in your business. And you can't do it by giving people bigger titles because you don't make enough money to give them raises. Those aren't the things that are going to get you there.

50:24And if you don't technically choose to change who you are, how you think, and what you do as the leader of the business, you're guaranteed to have the business follow the leader.

50:34Hala Taha:As we're talking about these leadership principles, you brought up John Maxwell, who I love. I've been to a bunch of his events. I haven't interviewed him yet, but I love his books. And you mentioned one of his principles. You also talk about in your book, the law of the lid. Can you talk to us about the importance of the law of the lid when you're thinking about leadership in a business? A hundred percent. You know, I was not a good leader in my first business. The first thing I had to acknowledge is I really sucked. I was practicing on everything. I let my ego get in the middle of it. I thought leadership was telling people what to do and demanding that they do it.

51:06It was really all backwards. Okay, so when my mentor, when we went through what I did well and all the things I screwed up when I was going to reset and start again, he gave me a list of books based on where I identified my biggest weaknesses, leadership, operations, finance. And he gave me a bunch of books. John Maxwell, 21 Irrefutable Laws of Leadership. Sharon Lecter, Cashflow Quadrant. Beyond Positive Thinking for How, because my thinking was broken. Jim Collins, Good to Great, Great by Choice, How the Mighty Falls, Series. he gave me all these books and said, read those, come back to me and tell me what you did wrong the first time around.

51:41So I had that context contrast, right? You need that as a business owner. And I came back and I created this massive list of all the shit I did wrong. And then I started reading the books and fill them in the gaps. And the first book on leadership was John Maxwell's 21 Eerie Feudal Laws. He ended up writing three, now he's got four, but he ended up writing three additional law books. So he had 53 laws. And then And I created a whole algorithm out of the 53 laws. But the first one I read in the first chapter was Law of the Lit. Lit is a cap. You cannot be a five leader and have eights working for you.

52:16They'll leave you. You can't be a five producer and develop 10 producers. They'll leave you. You can't be an inspiration as a three. Oh, business sucks and everything's hard. And expect people to be excited and work for you. So I created, it just became so obvious when I started getting into Jim Collins and John Maxwell, I realized there was three lids in business. Lid is the cap. It's the belief lid. The higher you believe, the more energy effort you'll push into achieving it. As soon as you lower your belief, you give up on pushing. So the higher you believe, higher you achieve, lower you believe, the lower you're capped.

52:57Well, the only way if you believe high that you're actually going to reinforce getting there is through operational effectiveness. So I realized there's an operational effectiveness lid in the business. If I'm a three sales manager, I'm only going to produce twos and ones. If I'm a three producer, I'll have twos and ones. So the only way for the business to grow and scale proportionate to my belief about what's possible is if my operational effectiveness grows in scale. So conversion, all the numbers and the stats and all those things have to grow or eventually I go, oh, it's not going to happen.

53:33Or my team says, oh, he's crazy. He believes he's going to be 100 million, but he's been doing 3 million for 10 years. Nobody believes me anymore. Well, to have high effectiveness and operational effectiveness and to have a high belief, there's three stages of leadership I identified. First is the me leadership. Do I have the patience, the persistence, the perseverance? If I really believe in getting to 125 million, I am never giving up until I get there. I don't care if I fail a thousand times. I don't care if like I'm going there. Okay. Now that takes strong me leadership. People are like, Oh, we can't do it.

54:10It's not going to work. Screw it. I'm going there anyway. Right. Strong me leadership. If I lower my me leadership, I am guaranteed everyone around me is going to lower their leadership expectations. But once I start going, I have to create we leadership because that move from 8 million to 15 million to 25 million is no longer me propping everybody up. It's the core leadership team telling everyone and inspiring everyone, we can do it, we can do it, we can do it. I can't do it all by myself. But something magical happens. So that goes from me leadership to creating we leadership, a group of us doing it.

54:45That'll be three at 15, five at 25. At 45 million to 75, if your business is still pushing, it becomes us leadership. And the definition of us leadership I created was cultural leadership. Your whole group in your company is pushing and pulling the company to success. Because if you take the statistics, the Gallup poll for 25 straight years, every year they interview 100 million U.S. workers. Two-thirds say they're actively disengaged or disengaged. 18 % admit they're sabotaging the company. So if you have 100 employees, 60 % are doing little to nothing, and 20 % are trying to put you out of business.

55:23So that's a lot of weight for the business owner to hold themselves. But by the time you make those moves, your we leadership teams dragging those people. But at 45 to 75, your culture, your people who have been there and they're committed and they got your logo and they believe in what you stand for and they believe in you and they believe in where you're going and they believe they're going to win with you. They'll run off the bottom 30, 40%. And so if you cannot understand that it goes from me to us, or me, we, us, and you grow yourself your lid, because those are all three different lids. That's why when people are like, oh, I'm a great leader.

56:02How many employees do you have? 20. You're just benchmarks against the wrong person. Like, you're good from where you came from, but you're not good to what is available. And I think most people get stuck on where they came from versus what's really available.

56:19Hala Taha:In terms of like actionable steps that people can take to increase their lid, level up their lid, you mentioned a bunch of really great books, which we can put in the show notes for everybody. What else should people do? Should they get a mentor? Should they join an entrepreneurship group? You know, it's a tricky subject. First of all, on the books. I consolidated. I took 15 books. that I created my business model. And I highlighted, if you went to one of my events in 2008, you would have had 15 books in front of you and there would have been 500 tabs and my notes as to why those 500 tabs are relative.

56:55I consolidated a majority of that for the belief aspect. So the three lids, belief, operational effectiveness, and leadership. I consolidated the belief into my book, Nine Figure Mindset. So if somebody's like, how do I take the shortcut to not having to read all these books, you can simply go to my nine-figure mindset and you'll get it. My wife wrote, start the work and teamwork, which is the people aspect of growing and scaling your business. And then my partner wrote, 10X Rule, seller be sold, which is for you and learning how to communicate your sales proposition. And then of course, I would rip through the John Maxwell's the Lids books.

57:42He's got four of them now, or the Laws books. He's got four I would go through right now. So you can consolidate into just that group of books. But Sharon Lecter, Three Feet from Gold, everyone should read that and think about what's my one little thing I'm not thinking about where I could tap into the gold in my business because most people do that wrong. Here's the net of it though. If you're not committed to personal development beyond where you're at today, if you're not willing to grow your awareness, if you're not willing to really judge your overall effectiveness, if you're not willing to test into your own ideas on, are you actually evolving as a remarkable leader or are you relying on what you've already developed for leadership skills?

58:34You have to be honest with yourself because when things stop working, you've tapped out your lid. And then you're going to start defaulting to blaming everything around you when the truth is it's simply you chose not to continue to grow your lid. So the resources for this, there's plenty of these resources. Now it goes over to mentors and it goes over to advisors. And what I'll tell you is most people are communicating entirely to the wrong mentors and wrong advisors. They're what I call polling, asking people, what would you do? And what do you think I should do? And how did you do it? Or how would you do it?

59:07Well, the problem is they don't know what they really want to do. They don't have that clear picture of where they're going to. They're talking to the wrong people who have never done it, or maybe they did it, but they don't know exactly how they did it. So they give you the same thing you're going to get at Harvard, which is you got to be a great leader. You got to be strategic. You got to have a plan. You got, you know, it's like all stuff that's like, okay, how exactly, right? What is the specific exact way to do it where it builds one on another? And that's what I developed because I realized it doesn't exist in the marketplace.

59:40The only way really today is trial and error. There's no science. So I wanted to be the first in the marketplace to create the science of scaling. And that's what we've done. So we've been able to show people now since launching this business, I personally have created$200 million companies from dead stop, no invested capital, no debt. We've run 9 billion of businesses through Cardone Ventures. We've got a portfolio of about 230 business owners that are doubling and tripling in size. And so now we're going back and studying what we did with all of them so people can just get the quick answer. But here's the net effect.

1:00:18If you're talking to somebody, and I have some friends in the marketplace, and you've interviewed some of these people who have been hugely successful building their business, but the information and data they're giving you is still somewhat generic. So it's like, here's what I did, and here's how I did it. that's great, but that doesn't tell you in the moment, in the heat of battle, if I'm making a choice between one, two, or three, or A, B, and C, which decision do I need to make to get the fastest result? And what should I expect that result to be? It's very difficult. So, and here's the thing I would tell everyone watching or listening to your show.

1:00:54If you're asking guidance or advice from somebody who's never done it, like what I call pulling your friends, your family, other business owners, what do you think I ought to do? You're already going to go bro. That's a guarantee. The only people you should be asking anything of are people who are living, breathing examples of what you're actually trying to do. Because if you go to people in multiple industries, it's going to be different. Those nuances of the things you need to do, the tech. If I'm trying to build my HVAC business from five to 25 million, it's going to be entirely different metrics, different things I look at than if I'm building my restaurant chain from three to 15 locations,

1:01:31Hala Taha:because you're going to have a lot more employees, a lot more moving parts, a lot more inventory issues you have to manage versus the HVAC business. If I'm building the HVAC business and I'm comparing myself to the dentist that wants to have a hundred locations, there are base similarities, but the nuances is what's going to make or break you. So you need to find people that are actual living, breathing examples in the thing you're trying to do. And here's a pro tip. If you're sitting here right now thinking you want to start a business, don't. Go find a business owner that has a$5 to$10 million business that's frustrated.

1:02:08They've been able to demonstrate that they're able to be in business, but they're not really growing. And perfect the art of identifying the perfect kind of client, how to communicate to them through what you do, what you teach people to do, how to promote to them so they can actually hear what you're saying, how to engage them to get them to be interested in what you're talking about and how you can help them and just work with a business owner and figure that out. Because that's what most technician owned businesses, 88 % of them, never learned how to do is to activate new clients because they started their business with friends or with an inner circle or a warm market.

1:02:44And they just built it till that ran out and tapped out at 3 million. And then they don't know how to promote and get new customers. Every business needs new clients. And so if you could just perfect that, you could build just about anything.

1:02:57Hala Taha:Yeah, I love that advice. It reminds me of what Cody Sanchez talks about, which is like buy boring businesses, but you're suggesting go work for somebody. She talks about buying laundromats and stuff. I mean, look, Cody's awesome. And if that's what you want, and I've got a lot of wealthy friends that own 50 laundromats or 20 car washes, or I mean, those are unbelievable. I'd just be completely transparent. and I started buying mini storages in 2000. In 2000, I have 680 ,000 square feet with a couple of partners and they pay me 60 ,000 a month and I've got all my money plus out. So those things are great.

1:03:33I view that as a different type of business. That's more of like if I want to build a micro portfolio of things that will cash flow and there's nothing wrong with that. And Cody's the best in the world at talking about it. I'm a business builder of businesses. things that actually can become 10 million, 50 million, 500 million, a billion. That's the market. I don't do startups. I'm not even interested in talking about how do I hire my first employee or my second employee. It's just, it's not my expertise or where I choose to spend my time. My sweet spot is 3 million to 100 million and 10Xing that.

1:04:10And if you're a business owner and you're at that stage and you're frustrated, you just simply need to understand, you just don't know what you don't know. And the hardest and slowest and most complicated and dangerous way to do it is through practicing trial and error. And so you need a different solution. So if I'm in HVAC or dental or anything, who do I want to talk to? I want to talk to the dentist that built a hundred chain unit and sold it. I want to talk to the, if I want laundromats, I want to go find somebody. I learned from Cody and then I go find somebody that owns 10 laundromats. And I say, look, you teach me how you did this.

1:04:49I'll go find 10 more and make you a 50-50 partner. Drafting is always faster than being in the headwinds by yourself. Every professional sport proves that out in motorsports and in bicycling as if you can tuck in behind somebody who's already moving quicker, you both move quicker. I'd rather learn from somebody who's a living, breathing, proven example in whatever I wanna do. And I'd rather give them half of whatever I'm gonna do because that was my value pop to Grant. Grant, I don't know how to bring in millions of people into this audience and do all this social stuff, but I do know how to take a business owner and blow their business up and make it highly profitable and valuable.

1:05:27I'll give you 50 % of a new company. I'm the managing partner. I control everything because it's my IP. You and my partner own half. Once I prove to you and you feel that I'm credible in what we're telling you, me and my wife and I, we're business partners, then you just blow on us and tell people, go talk to my partner. and that's how we've created a quarter of a billion dollars in five years with no invested capital, no debt that's worth probably a couple billion dollars right now to be honest with you. So the idea is doing it by yourself is broken thinking because you're never gonna get big by yourself.

1:05:59Doing it and inventing an already invented space is stupid so that that's gonna be a high condition for failure. So what is the fastest and biggest way to become successful? Find an example that's doing it, Make a commitment that you'll add value to them. Make a bigger commitment that if they teach you how to do it, you'll partner with them and go become an expert in something that's already proven to work by somebody who's proven they know how to do it. There's$6 trillion of businesses getting handed off in the next eight years from baby boomers who have three, five, 10, 50,$100 million businesses and they never made any money.

1:06:36They're just giving those businesses away. So becoming an expert on how to start, grow, So optimize, scaling, blow it up, and then exiting at a high value makes a lot more sense than just starting something, hoping over the next 20 years you can create a legacy value in that business. Hmm.

1:06:57Hala Taha:You just tapped on something that I was going to be my next question, which is your relationship with Grant and Cardone Ventures. And this idea of creator entrepreneurship is really popular right now. And essentially, you know, it's all about getting eyeballs online and having social media and the biggest entrepreneurs out there also have a huge personal brand like Grant does. So talk to us about, you know, why you teamed up with him and sort of how you see things evolving and why you thought having a partner who had a big personal brand was really important for your next company. Yeah, so we hired the same research firm in 2016 when I sold my business for the 77 times EBITDA, I hired IGS out of Boston.

1:07:37It's another huge research company that private equity uses. I gave them the original work we did with FTI out of Chicago and I said, refresh this 10 ,000 business scoping thing over the next three years while I integrate my business into the Danish public company that we took from one to four and a half billion. And when we had done all that and all that new data came back, I told Natalie, Natalie and I were talking about starting our new company. And so we were like, what's the fastest way to success? And she's half my age. And she said, you should look at some of these social media people who have legitimate businesses.

1:08:09So she made me a list of 25 people because I wasn't following social media.

1:08:13Hala Taha:And I hired my same research company. And I said, here's what we want to build. We want to build a business that helps entrepreneurs and business owners across these hundreds of sectors to be able to grow, scale, create massive value. We want to do it with somebody who has high credibility, somebody who understands how to build a business. And so I turned them loose. They came back and said, here's a list of three people. We went deep on those three people. The reason we picked Grant and Elena Cardone is because Grant, I created the first reverse triangular merger, decentralized, democratized equity structure with business owners long before blockchain came out to innovate the small business space and create platform companies.

1:08:55Grant was the first person that actually took the laws that changed from David Weald during the Obama administration, crowdfunding laws, and he was the first to actually do it in multifamily. And when I went to his event. He had raised$250 million directly from his community. Nobody else had done that. I knew we were going to buy businesses and wanted to do it with our community. So I said, that's a perfect fit. He does it for real estate. I'll see how he does it. And I can do it for businesses with business owners. Then underneath that, he was the number one marketing and sales guy in the marketplace.

1:09:32And so he had that down. Now I'm a scaling expert based on the engineering. I know there's 10 things to build a big business. You got to be an expert at. First, strategy. Second, promotion, marketing. Third, sales, conversion. Fourth, people. You got to find people. Fifth, you got to be able to deliver. Sixth, you got to understand your finances and get your numbers right. Seventh, you got to become a masterful leader. Eight, data. You got to know what you're looking at. Nine, systems and technology, because that's different than data and expands and grows as your business. And then 10, investment thesis, what to do with your money to get the highest returns and grow scaling faster, right?

1:10:11By either amalgamating or acquiring assets or bolting on or tucking in or buying your technology, whatever it is. Well, he had the sales and marketing and investment thesis for real estate. I had everything else. So we went to that conference, my wife scoped it. We went there to say, okay, what does this audience look like? Who shows up? And while we were there, we had our list of all the verticals we were excited about. And we just started a meeting of 34 ,000 people. I never knew anything about Grant Cardone other than what I saw online. We went and bought seats, 35 grand, sat in the front row with the idea that if we didn't see what we wanted to see by the end of the half of the first day, we're out of there.

1:10:50We saw everything we wanted to see. We met so many remarkable business owners that were there. And we're like, why are you here? What are you doing with Grant? Well, it just so happens John Maxwell was speaking at that event. But John and his leadership team, whom Natalie and I are extremely close to for the last 10 years, we went to dinner the night before and we were talking about, I wonder what this is going to be like. I wonder what we're going to see. I wonder if it's all hype. Well, both of us agreed at the end of day one that this was an unbelievable thing that Grant was able to do. And I had decided that if he could put 34 ,000 people in a stadium on Super Bowl weekend with the lineup, I could look through the things I didn't like, and I could hone in on the things that I was blown away by.

1:11:31So a few weeks later, we approached him. We met him there or whatever. But a few weeks later, we approached him and said, we'd love to talk about partnering. And the reason for that is, is he has a network of 25, 28 million people around this world. Most of them are business owners. Most of them invest with him. They have high trust with them. and he has his haters, trust me. This whole social thing and media thing for me is new, okay? But it seems like anybody successful, half hate, half love. It just kind of seems like it is and a lot most are jealous. But he has now raised over$2.2 billion.

1:12:04We've first in the marketplace to do a Bitcoin back balance sheet multifamily. That is gonna become a$100 billion business. We launched our Cardone Equity Group. His audience has been phenomenal for my wife and I, we've been able to add value to his business. He's added value to ours. And to put it in scale, when we partnered with him, his training business was only$50 million. Today, it's$150 million. Our business from startup is$120 million. And our health business that we bought for$250 ,000 from Brecca's wife is$125 million,$130 million this year. So in five years, we've created three businesses, all over$125 million, all profitable, all following the exact example of what we teach over 9.8 billion of business owners to do today.

1:12:50So we're extremely bullish. We're launching our private equity group, Cardone Equity Group. We're now out buying businesses with business owners that we have high trust and confidence in. We launched Cardone Financial Group. It's a whole series of financial assistance programs I've created for entrepreneurs and business owners. And we have Cardone Ventures, which is our growth, scaling, and venture company for entrepreneurs. So what we see combined is a multi hundred billion dollar, maybe trillion dollar portfolio. As I've just opened Cardone Ventures, Cardone Financial Group and Cardone Equity Group UK, we're opening our UAE branches and then we'll be in Asia by the end of the year.

1:13:31So I've, when I partnered with Grant, I said, I will help take the Cardone name to a global enterprise. That'll be my commitment to you. If your commitment back is to do all the things you're remarkable and teach me how to do it. And once you have confidence in my wife and I, let's just put our heads down and go full steam ahead. Well, after the third year, he's like, dude, we're going to kill this thing. And it's been a remarkable relationship. And that's why we partnered with him with the hopes that we would be exactly where we're at today, helping entrepreneurs and business owners create massive value, legacy net worth, having a great time doing it and having our brand reach real estate, business, finance, a whole thing and innovate the small to mid-sized business and real estate space and create a trillion dollar portfolio where everyone's winning with us.

1:14:19That's the idea.

1:14:20Hala Taha:Yeah, you guys have done an incredible job. I've been hearing about you and Natalie for years now. And it's just so impressive what you've built with Grant and Elena, month going on here. So in terms of picking your business partners, I know you have like, I think it's like five different elements that you look for in a business partner. Can you break that down for us? Yeah. Well, first of all, that persistence, perseverance, and patience is very important. People who want it now and want to demand it now, we won't partner with those people. They're just, it's not even realistic. Most of them have businesses that aren't anywhere near how valuable they can be.

1:14:59And they just want it now, want it now. And they demand and they're unhappy immediately. And it's the same behaviors that got their

1:15:03Hala Taha:business in trouble in the first place. You have dealt with people like that in your marketing side. They hire you, then they bitch 90 days later, your marketing doesn't work when the reality is they're getting more leads than they've ever gotten in their life, but their internal operations suck. And instead of blaming their people inside, they blame you because that way they don't have to address their friends and their family and their people that have been around. So they go through these cycles. So what are we looking for? Open-minded, forward-thinking, high integrity, patient, persistent, and willing to persevere.

1:15:35And if they have that, we will dominate anything we put our attention on.

1:15:38Hala Taha:So I end my show with two questions that I ask all of my guests. The first one is, what is one actionable thing our young and profiters can do today to become more profitable tomorrow? Yeah, great question. Identify the three things that create the most value in your business right now and put 80 % of your attention just on those three things, period. Love that. And what would you say your secret to profiting in life is? And this can go beyond business and financial, but what is your secret to profiting in all areas of your life? You know, I accidentally stumbled on it in the walnut orchard when I hired all those people to come in and pick the walnuts.

1:16:21And I didn't know then the impression that would make on me now. But my absolute secret is understanding that the only way to get huge is to amplify and multiply through others by creating value. And if you can do that, there's an enormous amount of wealth creation, no matter what you're doing. And so in all my decisions, I never think about me. I think about the impact of the people who I'm either working with, working for, partnering with, advising, guiding, because if they're winning, I'm gonna win all day, every day. And I just wanna do one quick shout out because I talked around it, but I didn't directly address it.

1:17:07Having the right partner. Partners, plural. My wife is absolutely a beast and she's incredible. And Grant and Elena are also equally, absolutely incredible. So surround yourself with people that you love, you admire, you respect. And here's the thing, I don't wanna let any of those three people down. So for those business owners that really want the hack to success, stop thinking about yourself and become the absolute best partner to everyone you work around and you work with and make yourself the center of that partnership. Instead of thinking about you, think about how can I just do something so amazing because then everyone's going to love you and they're going to want to be your partner.

1:17:52Hala Taha:Really good advice. Now, I didn't get to ask you about the walnut story. We kind of skipped over it in the beginning. So I'd love for you, if you can, if you've got like a minute, just so people understand the context and the leadership principles that you learned when you hired those students to help you at the walnut farm. Yeah, well, I had been sneaking in past my curfew and my dad grounded me and, uh, and I was frustrated cause they were going on a two week vacation. I was home alone, but he made me pick the walnut orchard, which he knew would consume my time between school football practice and working at the night deposit as a dishwasher till midnight.

1:18:26So I went to school the next day and the seniors were, I was a junior. They put little, uh, notes on all our lockers saying senior fund drive. They were trying to raise a thousand dollars to go on a senior trip. And that was my first entrepreneurial Tiffany. I went to the captain of the foot. I was a co-captain of the football team. I was a junior and the senior I went to and said, Hey, I think I can help you with that thousand bucks or some portion of it. If a few of you showed up at the walnut orchard, because if I could pull the walnut picking forward, I could go spend the following weekend with my girlfriend who I was terrified.

1:18:55She would bail on me because she was going to Oregon state. And I was in high school. Right. So I was like, didn't want to lose her. And I ended up with like 35 kids and their family and everybody come out. and in two days we picked that thing clean and I didn't do any of the things I hated. I didn't get my hand stained. I didn't do, I just went around topping trees and putting stuff in the burn pile. And then the parents bought all the walnuts because they were, and I didn't understand it. But when I look back on it, the parents showed up and did that with their kids because they're graduating.

1:19:24They like wanted to show them they were interested, right? They did something I hated to show the people that were their kids, they loved them. And then they bought it to thank me. They bought everything to thank me for allowing this to happen. Everything I hated turned into something that was like a massive blessing for other people. And I think what I'd like to say to every business owner who's right now frustrated with their business or pissed or fearful or upset because they're struggling. just remember the very thing you hate can create life for somebody else. So instead of thinking about what you don't like, ask yourself the question, how could this resource create life for somebody else?

1:20:11And then give them an opportunity to come solve that problem with you and watch how fast the things that you're frustrated with turn into the things that you become the most joyful about, which is watching other people succeed.

1:20:25Hala Taha:I love that. What a great way to end the interview. Brandon, this is such an incredible conversation. You're welcome to come back on the podcast whenever you'd like. Where can everybody learn more about you and everything that you do? My Instagram is easy at Brandon M. Dawson. My YouTube channel is at B. Dawson. And, you know, obviously I'm trying to build both of those. My podcast is the Building Billions by Brandon Dawson. So those three areas are just go to CardoVentures.com. you can look us up there too. But look, I'd love, I think you, my wife, would kill it. I looked you up and I, you know, I know who you are.

1:21:01I looked you up. I looked at some stuff before we got done with the show. I know how hard it is to be successful in this space. And you've done such a great job. I just want to congratulate you.

1:21:10Hala Taha:Thank you. That's so sweet. Thank you so much. Thank you, Brandon. I really enjoyed our time together. As did I. Thank you for having me on your show.