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Welcome back to the sixth and our little mini series of

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audio first podcasts.

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Today, I'm going to be talking about scale.

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So when you go over stages of scaling to business

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at a very high level, I'm going to talk about the

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micro level of scaling, which is the scaling cycle,

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which is something that I've recently discovered

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that I love a lot.

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I'm applying it all over the business.

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I'm also applying it to this podcast right now.

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And then the nano level of scaling,

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which is basically how do we see the variables

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that influence the outputs that get us more of what we want?

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So what's the process of actually getting better?

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I did come up with a little process that I think

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could be really helpful because I've been trying to think

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through, because I'm working on this massive project

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that you guys will find out about in a few months.

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It's so good.

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It's both a lot of work and awesome

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and you guys will like it.

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Scale.

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So what I realized is that you have these macro transitions

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that a company has to go through.

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And that's what I'm going to be releasing you guys in a few

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months in excruciating details so you know what it takes

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to get from each level of the business.

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And in thinking through that, I've seen a lot of

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different scaling frameworks in the past.

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Many of them were useful to a degree

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and almost all of them and myself included

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when I've done frameworks like this.

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I kind of say like these are the phases of growth.

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And I usually do it to revenue, right?

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At this revenue, this revenue, this revenue.

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The problem is it's very different

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between businesses, what it looks like.

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And so what ends up happening is like,

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when you go through a scaling framework

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and you're listening to someone else going through it,

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they tend to, myself included, just describe

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what it was like at each stage for them.

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And so basically if you have a different category

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of business, then the revenue, like basically

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what the company looks like at each level of revenue

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is just very different.

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And so I remember going through one scaling framework earlier

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on in my career that was like, okay, I'm like really far

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on this category, like we have a super developed media team

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that are really underdeveloped, you know, finance function.

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Like, you know what I mean?

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And so like it was basically like,

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here's how these departments scale over time

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and they just arbitrarily drew lines

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and said it's gonna be like this, right?

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Instead I've been thinking about scaling

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basically purely as a function of headcount

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because the structure of how humans need to be organized

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is gonna be far less different.

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Like your first five employees,

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the communication cadence that you have with first five

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whether you're building software or you're building,

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you know, like whatever, Instagram is sold

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for a billion dollars and had 13 employees.

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Well, he would look at my quote scaling framework

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and be like, well, this is horseshit

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and he would be right.

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Most of the time, the person who's delivering

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the scaling framework, if you just overlay,

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this is what it looked like for them to scale their business

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then it's far more useful for you to understand it

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but less valid across different types of businesses.

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And so I wanted to come up with the scaling framework

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and this has been a tremendous amount of work

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that goes by headcount.

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And that's a project I'm gonna be releasing

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but there is a micro thing that I wanna talk to you guys

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about today, which is a micro scaling framework.

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And so that's a macro scaling framework.

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That's how the organization, how communication,

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how people are organized, the functions of the business

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that must emerge at each level of headcount.

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Like for example, you're probably not gonna get rolling

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out benefits when you have one employee, it's unlikely.

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Now you might, but it's probably unlikely.

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You're probably not gonna be worried about legal compliance

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and comprehensive risk mitigation

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when you have five employees.

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It's just not really what you're considering

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but you will probably need to get a payroll system in place.

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Right?

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And so there are things that have to occur.

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Now, if you have 13 employees or you're 22 employees

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and you're WhatsApp and you're doing a gazillion dollars a year,

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again, it would feel like it wouldn't apply

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but if you then only looked at headcount

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then all of that stuff would probably be applicable to you.

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So kind of interesting, far more about.

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Now, the micro scaling framework is basically a framework

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that it takes to make anything bigger

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and this scaling framework is actually a cycle,

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not linear, it's a circle.

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And it happens again and again and again and again,

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independent of the department or function you were working on.

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It goes like this.

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S, C, A, L, E, right, it's a nice acronym.

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So S stands for start.

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But like until you start, nothing happens.

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So you can't scale something, you haven't started.

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So there's S, you have to begin.

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Then you have C, which is you have to compound.

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You have to do more of that thing, right?

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So you start the thing and then you do more of it, right?

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So that's the C, we compound it.

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Then we A, which is augment, which is we do it better.

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So first we start, then we do more, then we do better.

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And once we have done a lot

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and we've gotten pretty good from doing a lot,

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then we L, we look for leverage,

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we look for consistency,

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we look for reliability in a system.

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And so that's the first four steps.

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And once you have leverage, you have a checklist,

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you have somebody else who can reproduce results.

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You're producing the results on a consistent basis.

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Then you go to E, which is expand.

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So basically you go back to the beginning

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and you start a new, you expand a new territory,

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you expand a new channel, you start a new process,

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whatever it is.

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And so that is the four slash five part cycle of scaling.

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And so let's walk through how this would work in.

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Let's say you're starting to making content on Instagram.

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Okay, so you start making posts, great, S.

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Now you compound that, so you do more posts, got it.

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From the more posts you augment, you do better.

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You make better posts.

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Then you understand what makes something better,

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because to get better, you have to understand

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what the differences are from just doing

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what you were doing before.

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Then you make it reliable,

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so that you can get consistent production

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of Instagram content that reliably

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gets you a certain amount of views.

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Then you E expand.

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And so then you say, okay, well now we're going to try TikTok.

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And we're going to start S.

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And then we're going to do more compound.

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And then we're going to augment, A, do better.

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Then we're going to L leverage.

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We're going to get more out of what we do

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by making it consistent.

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And then E, we're going to expand.

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Expand can also be back to doing more,

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or the expansion can be something new, right?

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You can say, hey, we've mastered

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being good enough at making one YouTube video week.

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We're going to do, we're going to expand it doing more, right?

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And so that little micro cycle,

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pretty much applies to everything.

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So let's say you have a customer service department.

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So first, you are the one doing the customer service

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because you are the business owner.

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And then you do more customer service

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because you get more customers.

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And then you get better at doing customer service

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because you have done more of it.

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And then you can systematize it, L, get leverage,

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so that somebody else can do it for you.

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And then you expand, you hire the next person, right?

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And so this scaling framework actually

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took a really long time to build out,

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to make sure that it was as crisp and as tight as possible.

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But it pretty much gives you the progression

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of every department of every function

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that has to occur within the larger scaling phases

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that occur in a business.

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And so wherever you're at, I would just ask yourself,

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where am I on the cycle?

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And you should be able to identify, am I starting,

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am I compounding, am I augmenting, am I making it better,

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am I leveraging, am I figuring out

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how to make it reliable, am I making it repeatable,

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consistency, or am I at the point where we have this thing

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like clockwork and now we just need to do,

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we basically need to run the cycle again and expand.

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So we always start with volume, right, compounding,

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doing more because more begets better.

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And better is where we need to end up.

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And better is great as long as it's consistent,

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which is why that's the next thing, right?

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You have home runs and the not home runs

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and home runs and the not home runs.

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The only thing better than a home run

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is hitting home runs all the time.

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And so it should follow logically

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that that's the path that you do,

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but you don't know how to get good

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unless you do a lot of it.

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And so the fundamental process of getting good

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for whatever you do is that you do a lot of volume,

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then you look at the top performers

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because no matter what you do,

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if you fire an arrow 10 times to hit a target

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and one of the arrows,

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unless they all hit the exact same spot,

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which would be really tough.

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One arrow will be closer to the bullseye than the others.

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And then you just look at the film footage,

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what did I do differently with this one

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than I did from the other ones?

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And then you say, great, next time I'm trying to do

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as much of that as I did and less of the other stuff.

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And then you fire another 10.

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And then hopefully they should be closer

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than the grouping that you had before.

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And then you say, okay, what was the closest one here?

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Great, what did I do that time?

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And so that process of improvement, by the way,

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is free from life.

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You don't have to buy it with money,

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but you do buy it with time.

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So I guess it isn't free,

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but you don't have to buy it with money.

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And it is reliable.

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And it is always true.

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Meaning a lot of people will make claims of what is

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or what isn't, but we'll always be true as the data.

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And so this is the closest way to approximate truth

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that I've had for acquiring skills,

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for making things better, is doing a lot of it,

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especially when I don't know what I'm doing.

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I just do as much as I can.

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And then I look at that top performers

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and try and do what I did there.

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And I think where skill comes in

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is that over time, your attention to detail

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becomes super important,

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because where it gets troublesome is where you cannot

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differentiate what you did differently

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between your top 10% and your bottom 10%.

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And so then the objective should be,

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how can I observe the differences better?

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What other variables am I not considering?

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Because those details are the key to skill.

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Here's what gets really interesting.

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Once you understand the details,

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they also give you more ways to win,

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which makes the doing of more, more enjoyable,

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because you know more progress markers along the way.

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And so fundamentally that is what separates a master

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from a novice, is that a novice only has the output

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to determine whether or not they were good.

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An expert or a master can see 100 small things

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within the thing so they can see,

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oh, I actually got a 92 out of 100.

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Now next time I'm trying to get 93.

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And so they have more ways to progress

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because they have more things to measure.

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And so in the beginning, you do more so that,

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you can identify the variables to make a judgment

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on your performance.

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And I think that's kind of the nano level of scale, right?

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So you have your overarching stages

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that occur within a business.

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You have the micro cycle of scale

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that happens over and over repeatedly.

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And then the nano level is in order to progress

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between the micro cycle of SCALE

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is that you have to know what makes something better

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so that you can make a checklist to making consistent,

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so that you can then obviously expand to the next thing.

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I think if there's ever been a gift,

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for those of you who say, you know who have people

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around you in your life who tell you that you were obsessed,

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it's usually because they just don't know

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what excellence looks like.

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And you have to be obsessed.

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And it's usually just a word that they used

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to describe someone who's good.

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And so I just wouldn't take it as an insult.

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It's like, of course, I spend more time on this

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and need because I care more about it.

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And it contributes to my life.

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I would just challenge you.

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And I actually use this as a great litmus test for

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when I'm hiring is that you can see someone's skill

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by the quantity and quality of metrics

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they track around a given task.

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And so if someone says, hey, I can help you with your sales team

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and you say, cool, what are you gonna do?

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And they're like, well, I'm just gonna work so hard.

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It's like, yeah, well, cool,

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but what metrics are you gonna track?

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And then the two of one level of that is, okay,

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these are the metrics you track.

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If this goes up, what do you do?

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What behavior does it influence?

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So one is you have to know what variables exist.

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The next is what actions it takes to influence those variables.

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You can think about that for skill

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when you're hiring somebody, but also skill for you

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when you're trying to learn anything.

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And so that's been really helpful for me

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as a frame to teach my team things.

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It's like, hey, these are the variables

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and these are how you change these variables.

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And if you want these variables to go up

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or change in this way, this is what you have to do.

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And it makes it much easier for you to get people

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to get the same results if you tell them what to do

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to move variables.

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And so for you, when you're trying to figure out your ads,

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look at the ads, look at the best ads you ran.

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Why is it different?

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And answering that question will unlock so much more growth

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than trying to find the newest hack.

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And that works just as well for customer success.

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Why are these ones 10 out of 10s?

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Why are these five stars?

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It works just as well for people who bring referrals in.

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It's like, okay, what happened

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for this person that they brought a referral versus others?

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Now, part of it might be that this type of person

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has a network.

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Okay, well, that might be a variable that I need to consider.

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So when I'm bringing customers in,

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I might say, these people have networks.

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Okay, well, then we're gonna do these extra things

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that'll increase the likelihood

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that they become viral customers for us.

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And so again, all of this is about data,

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all of this is about knowledge.

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And if all of that sounds like work,

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welcome to, welcome to scaling.

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That was a top of mind for me

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because I've been working really deeply

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on phases of an organization as it scales

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so that everyone else can hopefully not have to take

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a really long time to progress through the stages

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as sometimes it felt for me along the way.

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Oh, by the way, micro.

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So we started this new little mini thing, S.

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Compound, I immediately just did more

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because I knew I was gonna need more data.

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So right now, I'm in the A step of this of augment,

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which is that I need feedback loops

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to say if this is the right direction or not

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and what separates good podcasts from bad.

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And so for me, when I looked back at my data,

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where were the podcasts that grew my listenership?

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It was podcasts that were more unscripted,

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more top of mind.

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And so I'm trying to check off more of those boxes.

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And if this confirms, because I have switched from it,

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if it goes back to growing this way,

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then I will know that is a variable

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that I can repeat on my checklist, L.

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And then once I check that box,

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then I can go to E, which is expand

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and then I can advertise my podcast

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because I know that I've done these things.

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Yeah, this is the sixth in the series

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of audio first podcast of diary of Alex and Rosie.

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But basically top of mind stuff

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that I'm actually thinking about in the business

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two day right now.

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And if you like this stuff better than kind of like,

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I would say note heavy content that's,

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I would say like the air has been sucked out

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of the content like there's no gaps.

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Obviously that's been super successful for me

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across different platforms.

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I am still learning podcasts to be honest with you guys.

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Yeah, I'm just trying to figure it out.

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So if this was helpful, tell me, tag me,

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share people the thing.

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And if you do that, then I will know

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from the stats that you enjoy this.

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And if not, then you can tell me it sucks

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and not share it and not tag me.

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And I will stop doing it.

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Otherwise, keep slaying.
