Like most entrepreneurs, when I bought AppIt Ventures, I truly dove in head first. Armed only with a personal commitment to do software better—with passion, empathy, transparency, and a deep concern for our customers’ outcomes—and a certain knack for finding, and hiring, good people, I jumped into the deep end. And, like many entrepreneurs, I was praised for this boldness; after all, it takes a lot of bravery, and a fair amount of recklessness, to venture into the great unknown that is starting your own business. But that’s just the beginning. How does a business pivot from that initial blind push into significant and lasting growth?
The Glorification of the Hustle
Bravery and risk-taking: they’re common to the personality type most likely to gamble on a new business venture. In those early stages, a “balls to the wall,” extreme approach to risk-taking is, to some degree, necessary. But every strength overused can become a vice. Bravery becomes burnout. Risk-taking becomes recklessness. Eventually, celebrating and continuing to pursue this intensity and the personal sacrifice it entails becomes self-flagellation, and breakdowns in the mental and physical health of the entrepreneur—and their team members—quickly follow. The tendency to glorify the hustle often overshadows this darker side of excessive pushing long after those initial stages of the business.
This aligns with my experience with AppIt. When I first purchased the company, I had an extreme sense of optimism that motivated me to try new things, which proved successful for the business, but simultaneously caused me to overestimate our projected revenue and underestimate our costs. I’ve since determined that I have an optimism factor of about 30%, which I always factor into my quarterly and annual planning sessions now. It took several months and two different coaches to help me see that my optimism had led to some poor decisions. I’d trusted my ability to hustle implicitly, but I’d over-inflated the potential results of that hustle, which required even more hustling to meet the goals I’d set and led, inevitably, to burnout. My personal burnout story is a painful one, but it’s one that taught me valuable lessons—including about recognizing and respecting my own limits.
The biggest lesson I learned from that phase was that at some point, the business graduates from that initial phase, and intensity needs to be replaced with consistent, intentional growth. While the glorification of the hustle celebrates the passion and fearlessness it takes to get started, it tends to ignore the quiet discipline and fortitude required to grow beyond your first $1M in revenue. What’s required for sustained success is the ability to celebrate successes at each level of the business, while observing the different rhythms of growth the company experiences. There is a time to hustle and a time to be measured; knowing the difference is critical.
“A good plan, violently executed now, is better than a perfect plan next week.”
General George S. Patton is a revered yet controversial figure in American history, perhaps best known for his rousing speeches and leading from the frontlines of the battlefield; much of his notable military success has been attributed to this no-holds-barred approach. So it’s not surprising that one of his most-repeated quotes has made its way into entrepreneurial circles, though translated into a more business-like vernacular: “You can have a 100% plan executed at the wrong time. It will always fail. Or, you can have a 60% plan, and at the right time, with violence of action and commitment, you will always succeed.” Essentially, a new business will grow based on a constant flurry of aggressive action. Mistakes will happen, but by continuing to hustle, the business will surely grow.
The problem is, this leads to the improper internalization of a fail-fast ethos. Making mistakes is definitely in the nature of venturing into the unknown—there’s truly no such thing as a “100% plan” in those early days. But this way of thinking can quickly become ingrained within the business’ culture, infecting every attempt to progress with a willingness to make the same mistakes over and over again.
When I first joined AppIt, my sole focus was growing the company through sales—my background is in sales, so this work was second nature to me. But the intensity I brought to those efforts led to mistakes in any other areas; I hadn’t thoughtfully planned staffing-up to effectively serve the projects we were selling, and my budgeting didn’t account for the need to grow the team in proportion to those sales. My single-minded focus on selling allowed other areas to slip, including budgeting, forecasting, and operational excellence, which in turn led to constrained profit margins and a thoroughly burnt-out team. I’d valued the hustle above all else, and assumed that my violent action would eventually win the day, despite lacking a detailed, long-term strategy—after all, I thought, others have been successful with the same approach.
However, I quickly learned that a burnt-out team and a break-even business isn’t as fun or satisfying as a sustainable business with steady growth and healthy profit margins. So I made a personal commitment to change my thinking, and shifted my goals from intensity to consistency, and promised my team that while I would make mistakes as we grew, I wouldn’t make the same mistakes twice. I had to be humble enough to reflect on the errors I’d made and apply the lessons I’d learned to future challenges and opportunities. This ethos has permeated my organization, and our results have been astoundingly positive.
At some point, your mindset needs to shift: you’re not an entrepreneur forever; if you want to achieve lasting success, you need to conceive of yourself as the owner of a growing, sustainable business. You’re no longer punching into the darkness willy nilly—you’re maintaining progress by constantly improving your aim and accepting fewer mistakes. In short, make mistakes, but only make any mistake once.
Growth at All Costs is Expensive
What’s really being celebrated by the glorification of the hustle and the insistence on constant violent action is accidental success. But it’s in the very nature of accidents that they aren’t repeatable. In the midst of pursuing the hustle, businesses reward intensity over consistency and burn up valuable resources in the process—from pushing employees to unsustainable lengths, to accepting the price of avoidable failures. And this willingness to sacrifice accuracy for growth at all costs can put the business at risk. Taking on customers that aren’t a fit for your product or service offering can destroy your profit margin, for example, or pushing to disrupt antiquated legal policies can lead to expensive lawsuits that can put your company out of business. “Growth” doesn’t always necessarily mean more profit; growth at all costs can indeed become more expensive than the cash you bring in, which can wipe you out before you have a chance to convert that growth into real profit.
In the entrepreneurial early days of AppIt, my sole focus was on selling to whomever we could and relying on our delivery team to provide a world-class experience, without taking the time to properly set the team up for success. This approach allowed us to grow 40% YoY for the first 3 years. But it prevented me from learning to recognize who our best clients were and what the best approach to finding those clients would be. I wasted money on marketing that didn’t correspond to our actual audience, and I brought in clients that weren’t a good fit for our organization—and it was expensive. On top of that, I drove my own team to burnout. I had everyone spinning their wheels in the name of “extreme accountability,” but I didn’t have the discipline to explain to my team what our goals were or how we might accomplish them. The end result was top-line revenue growth, weighed down by a trail of burnout, unnecessary expenses, and confusion within the team—all of which destroyed our profit margin (bottom-line growth). I’ve since learned that our process is built for a specific type of client, and when we target those clients, we exceed their expectations every step of the way. It requires real discipline to turn away clients that aren’t the best fit for us, but the resulting healthy pipeline and sound processes make it a lot easier.
The answer to this costly growth is to proceed with intent. Rather than flailing at progress and hoping for random, fortuitous success, businesses that graduate from the entrepreneurial phase do so through intentional growth.
A Framework for Intentional Growth
I’ve spent four years in the trenches of entrepreneurial growth with my team. I’m not ashamed to admit that I’ve made more mistakes than I can count—and I’m proud to say that I’ve learned from each step along the way. I’ve applied the learnings from those years, and created a framework that I use for intentionally growing teams and businesses. Today, AppIt is a formidable business in the growth phase, and I attribute our success to the use of this framework within my team.
The purpose of the framework for intentional growth is to lay out an ordered approach that makes consistency possible; at the heart of this approach is the hierarchy of business needs. The pyramid takes its inspiration from psychologist Abraham Maslow’s Hierarchy of Needs. At the base of Maslow’s pyramid are physiological needs—air, water, food, sleep, and shelter; proceeding up the pyramid are safety, love and belonging, esteem, and at the top, self-actualization. That is, the ability to want to be your best self requires meeting all of the needs below, in order. Anyone who’s dozed through a midday meeting fighting hunger pangs knows that affective thinking requires a full belly, for example. By approaching business decisions and leadership in a similar way, entrepreneurs bring intention to their efforts at growth, and are able to achieve sustainable progress.
Here’s a quick rundown of the levels of the pyramid: The base of the Hierarchy of Business Needs is self-evident, but it’s one that’s easily forgotten amidst the flurry of day-to-day operations: revenue. Nothing can be achieved without it. Once you have a viable stream of revenue, you need to put processes into place; growth isn’t possible without a process to deliver the goods or services that you’ve sold, no matter the stage of the business’ development or the size of the company. With revenue and processes secured, you can achieve productivity through the people you hire to carry out those processes and thereby deliver the revenue—and the importance of getting this step right cannot be underestimated. Efficiency becomes possible as a direct result of your attention to productivity and all that that entails. Intentionally climbing this pyramid leads to profitability, the lifeblood of lasting growth.
So often business owners walk into the office with profitability at the forefront of their thinking—naturally, the goal of any business is to make money. But approaching each decision as though it’s a battle in which pure gumption will win the day often leads businesses to neglect these essential steps, each of which is required to achieve consistent, lasting growth.
And that growth leads to personal growth as well. The journey from the early days of the business to the growth phase was difficult at times, and required confronting my mistakes and changing myself as much as changing the company and its processes, but it’s a journey I will be grateful for forever.
