Scale the Unscalable: My $50K Lesson from Hormozi’s Team

I spent two years scaling the wrong business and one conversation with Alex Hormozi's Chief Strategy Officer reframed this. And if you've struggled to scale a service business, if you've run into a situation where you're selling stuff that, you know, isn't quote "scalable," or you have found yourself in a, like a swamp of competition, you know, selling stuff that you look around and you're like, "It's a race to the bottom... even your competitors, you're like, 'I I know that I can do better than this,'" then this is for you. It's a lesson I paid more than $50,000 and invested two years to learn that I'm just going to share with you openly.

So back story, and this is what I provided to Alex's Chief Strategy Officer: I started consulting about six years ago. I'd been CEO of a PE-backed company, I, you know, was managing director at the U.S. Chamber of Commerce, ran, you know, national sales and small business there. And I said, you know, I've turned around a bunch of business units, I've turned around a couple companies, I've built a lot of good sales teams and an executive team. I've got some experience that I can leverage. And, you know, it just coincided with some lifestyle changes we were making. So we moved to Cabo and I basically built a consulting business from Baja. And I got that business up to a respectable 40, 50 thousand a month in sales doing sales consulting, right? Like, and some fractional sales management. It was a lot of like sales audits and helping people rebuild teams and, you know, so it did really well.

But, you know, I... it wasn't scalable. Like I... how am I going to scale this? Because what I do is based on, you know, 20 years of experience and it depends on the sales team, it depends on the offer, it depends on the sales cycle. Like there's so many variables that go into doing this right, doing it well, I can't really scale myself. But I had been asked a lot: "Like how are you doing this? Right? Like how are you generating 50k a month and how are you getting clients and how are you building these offers and how are you... you know you market the sales audit... how are you building the audit?"

And I said, "You know what I'll do? Since the consulting side of it and the fractional side of it isn't scalable, what I'll do is just keep do enough of that to keep revenue coming in and start building quote 'scalable offers' over here on the other side of the business." And I, you know, I created a course, like a low-ticket course... even created some a whole bunch of free free stuff to show people how to do it... you know, started offering some some coaching, built a small community around it and it was, you know, uh, you know, essentially how to turn your expertise and your experience into income.

Well, I did that. I made that pivot. And what I realized was that space was competitive as fuck. Right? Like it was just... And I, you know, I was relatively new to in in a lot of ways to a lot of digital marketing and shit like that and and the online money crowd. But I realized: "Hey, as I started teaching this, there are so many people claiming to teach the same thing." And I I was like, half of these people don't have legitimate backgrounds. Half of them I, you know, I bought a couple courses, I'm like, "Dude these courses are not good." But I found myself in an area of competition that was very bloody. It was very red. Like there were... there were courses everywhere. There were, you know, fake influencers all over the place. The the price points continued to decline, you know, even to the point of like one coaching program started offering like first 90 days for free.

And I was good at it. Like I have a handful of really cool success stories. I mean several people like hitting their first million in revenue. A couple people we even ended up with... you know, we did better than my business did on the consulting end. But dude, this is... this is epic. But it wasn't my superpower, right? Like my... if you took my 20 years of experience and what I just naturally am wired for and what I'm really good at... well better than anyone that I know at... It wasn't teach... it wasn't that. Like it wasn't the online course space. It wasn't teaching people how to do a sales audit or how to build a sales an audit product. It was running it.

But there were a few challenges with this. So I get to an inflection point. Like at at some point I've got a community rolling, I've got courses, I've got my own consulting still, I've got five or six different streams of revenue and it just wasn't really clear to me which direction I needed to go. So, you know, hence I find myself at, you know, one of these one of these workshops that Alex Hormozi runs. And I'm talking to his Chief Strategy Officer and I tell that story. He's like, "Well, dude, you solved the wrong problem."

And I said, "What do you... what do you mean?"

And he and he said, "Well, you solved the wrong problem. You got to a point where you were generating 50k a month in sales so you were getting people good results, you were earning really great money, you were like you were able to to get more clients so you had like all of the factors going into 'is this a good business or not,' and the problem you solved was 'well this isn't scalable.' And so you pivoted everything that you were doing, you stopped doing what you were doing, and started selling a whole new thing to a whole new audience at a whole new price point with a whole new transformation with a whole new like buh-buh-buh-buh-boom."

And I went, "Shit."

He said, "Yeah dude, like that's... it happens all the time. It wasn't that it wasn't scalable. It was that you didn't know how to scale it." Right? Like that's... that was the real problem. The real problem was: Ray doesn't know how to scale this. Not "this isn't scalable." And it's like a it's a subtle twist of words, but words matter. And so I went and solved the wrong problem. And by solving the wrong problem I ended up in a in a sea of competition of people that it was very difficult to leverage things that legitimately made me unique.

We continue the conversation. He says, "Well that's why we don't use the word 'scalable' here."

I was like, "Well isn't isn't this a scale workshop?"

He said, "Yeah, yeah. But look around this building." Like, "It's like 20,000 square feet. Look around this building. There's 400 people here." He said, "Alex and Leila own 50 different companies. We don't use the word scalable. Some things are just way fucking harder to scale than other things." And he said, "Look around this building. Like it took 20 years to build this but, you know, we have 400 people here. That's how we scale the unscalable." He said, "It wasn't that it wasn't scalable. It was that you didn't know how to scale it yet."

And it's like a... it's a subtle twist of words but words matter. And so I went and solved the wrong problem. And by solving the wrong problem I ended up in a in a sea of competition of people that it was very difficult to leverage things that legitimately made me unique.

So you fast forward, right? Like 18 months or, you know, almost two years now. And what what we've done is start to scale the unscalable. We literally took the advice from that workshop—and by the way I use... I've I've used them since, like in in their advising services and other things so like I'm not even taking full credit... like it's they've helped me do that—but what I've done is start to scale the unscalable. Going back to the original problem: "Hey, you're really good at building sales teams and, you know, leading sales turnarounds and, you know, even even at the at the executive level like, you know, turning around companies and this and that. Let's figure out how to scale that."

And that's what we've done. So I ended up within 90 days of that conversation actually killed the community, I killed the coaching program, I just took all the course stuff threw it on YouTube and various forums... some are private links, this and that. And changed virtually everything. I I essentially said almost overnight in in a 90-day timeframe said: "I don't teach this shit. I do this shit." Right?

And in this time, what we've done is we now have two dedicated sales managers uh that are that are running essentially independent sales teams. We... they are running weekly sales meetings. They're having one-on-ones with with their sales reps. They're doing call reviews and coaching and roleplays. And we're running huddles two, three times a week with with our customers and and sales people. We're... we've got our own reporting dashboards that were that were rolling out right now because the the tools that exist today don't quite fit the niche that we work with—MSPs—and the and the model and the way that we do this. We've started creating our own sequences and cadences so that people can bring stuff from, you know, their marketing agency or their peer groups or their wherever they're getting a lot of the the original source of what they want to run and prospect and do outbound with... and we're we're rewriting a lot of that. We're, you know, helping with scripting. We're like the all of these things are are developing. Like we're actually, you know, building some of our own our own tech, our own underlying tech to continue to do this. So we're just refining and refining and refining and refining.

And so we're about a year into this now and we still have a long ways to go to to really perfect this. And we're we're breaking it down into components. We've got, you know, the outbound team of of like BDRs and SDRs with sales managers there. We have the Outside Sales Rep program where we're working with, you know, the people that are running discovery and and doing the closing. We're, you know, working on, you know, playbooks and and sales processes. We've invested a ton of money, you know, with with hiring... there's also, you know, CS managers... other stuff that's involved in the tech. We're a year into this already and I expect we will continue to to to invest and refine the product.

I've intentionally held off for a year in trying to aggressively market this program um because what I've I have focused on is product improvement, product improvement, product improvement. Like I continue to hammer it home like with our entire team—which has now grown to I think six people now—like this is... we need the best product on the market. And we I will not step on the gas and truly try to scale this from a marketing and sales standpoint until I'm confident. Like my reputation is going on on this stuff. Is it as good as I would be if I was, you know, managing the sales team?

And all of that time and all of that money and all of that learning and all of the delayed gratification in holding off on being able to like truly step on the on the gas with this... is good. And here's why: Because almost no one else is going to do it. Yeah, there's going to be a bunch of people that pop up and say "We do fractional sales management" and "We can do your outbound" and "We can do this, we can do that." But very few people are going to go through the process that we are going through. You know, and invest, you know, years into to getting the product right. And delay the profits. Like right now we're we're running like basically net neutral. I mean this is, you know, I'm taking... I've got my my investment company basically putting some money into this to to make it work. But I I can see the future. It's very clear. In fact, we could turn a profit today if I wanted to. But that's not the goal. Like my my goal is to turn a better, higher profit two years from now than it is today. And that's the way that we're approaching this.

And, you know, thankfully I'm I'm fortunate enough like it to be in the position where at least up to this point I can just bootstrap this my own. I can get my own capital. We can be patient with this. And we're being like insanely picky with who we're hiring and how we're doing this. But that all creates a moat for me. Like that all creates this big thing around my business that says: "Hey so-and-so says that they'll they do fractional management too." I can say... I can already say... Not like us. Like I I promise you not like us. Like there's there's no way. My my sales managers are more focused on getting results from their team than they would be if they were running my sales team—which I don't even have yet, right? Like they are... because of the incentives and the systems and the the everything about the way that we've designed this and continue to refine it is different. And I just... I know that the number of people willing to do this is very very very low, right?

And so that was the big takeaway for me. Like I I continued to to work with them like I said but like that one conversation reframed almost everything that I thought about a service business. And it's not "Is it scalable?" It's "Do you know how to scale it yet?" And if you don't, figure it out. Like don't stop doing what you're doing. And instead of saying "I've got to figure this out," I because I don't know it, I accepted that it wasn't scalable and basically pivoted the whole business. And that was... in hindsight it was a mistake but I learned from it. So like nothing's nothing's really a mistake.

But if you're if you're constantly changing directions all the time, you're staying in the beginner lane, right? So recognizing that I go: "Okay, I've got to... I've got to get more disciplined about being quick to move but not having that turn into to weakness." And at this moment... I got a decision to make. Like am I being rational, strategic, and making an informed decision and just moving quickly? Or am I being emotional and rash and should just like calmly see this through and see how it goes and measure it and come back to it? And that decision point I think is is what I hope is helpful here. And the first thing I do in this point now is I pause. Like I stop, right? Like look we're not going to act right now. Like we're gonna we're gonna just think calmly about this objectively about this and I'm not going to make a decision until I'm very confident that I'm making an informed educated non-emotional decision that's, you know, based on, you know, any number of kind of logical fallacies or or broken thinking models, right?

So the first thing I do is pause. Then lay out my options. And this is what I did yesterday. So, you know, I said: "Alright, what's... what are my actual options here?" You know, and in this case, I can stay the course, right? I can I can stay where we're at, you know, run it for say 60, 90 days, look at what the results are and and, you know, then then make a decision then. Or I could say: "Listen, we've sent one issue through this new platform and I'm just going to course correct really quickly." And you know I laid out like a couple other options but it really came down to to those two things. So you know I... Alright so I've got my options.

Then the questions I start asking myself—and actually wrote these out, I plugged some of them into my my AI thinking partner—like one question is: "What was the core problem that I was actually trying to solve with this change?" What was the real core problem? Not "what are all the benefits of Substack" or "what are all the problems of Substack" or "what are all the benefits of Beehiiv." It's: what was the core business problem that I was trying to solve? And in my case it was faster organic growth. And you try to get that down to like one core problem. Like there's always a number of problems but the more complexity you add in this the easier it is to rationalize and justify the decision that you want to make based on an emotional bias. So like: one core problem. What was I trying to solve? And then the other question is like: "Why was that a problem?" Why was that a problem in the business, organic growth of the newsletter? Like what happens if you solve that? Or what happens if you don't solve that?

And in my case it wasn't really a problem if I don't solve it. It was an opportunity if I do. Right? So I looked at it and said: "Okay if I can grow the newsletter organically more aggressively and faster, there's some correlation to bringing in more business. Like more credibility, more educational material out there. Like people that engage with my newsletter tend to tend to at some point go, 'Hey, you know what? Like I'm I'm going to explore this now.' Like a a lot of our sales and a lot of our booked calls come from people who've seen five, six, seven newsletters and said, 'Hey this one finally hit me' or 'I've been reading this and you kind of struck a nerve,' right? So it's like well if I have more people on that list, theoretically there's more people that are that are engaging with it and will subsequently grow the business.

The question I ask at that point is like: "All right, is this going to solve that?" Right? So you've got the core problem. You understand why it was a real problem. Is this actually going to solve the underlying issue? Not the growth issue, not the email subscriber, because I might solve that with Substack. But I also might get a bunch of other creators that just like the way that I write and create and blah blah blah... like it's like so it doesn't necessarily mean that it's my ideal clients or my target market or the people that I'm actually writing for or want to read my stuff, right? So does this solve that underlying issue? And in my case, no, I wasn't... I wasn't certain that it would, right?

And then the last question I kind of ask is... and this is a really important one... "What's going to make me regret this decision in six months?" Either way. Like if I if I stay the course, stay on Substack and just like stick with it. Or I pivot today and go back immediately. What's going to make me regret this decision? And I started listing reasons. And the number one reason that stuck out to me was: A diluted list six months from now is a huge pain in the ass, right? Like if I have... if I double my email subscribers but half of them are people that came from... that are not within my my market... and giving me bad data... and I don't have the data tools or the analytic tools with Substack to understand who's joining or when they're joining or better engagement metrics... then I end up with a diluted list. That is the last thing... that is very dangerous to me. Like this is... is a your list is a really important asset. It's one of your most valuable assets in your business I think. And a diluted list is not something that I want to run the risk of of doing. So, I wasn't positive that I was going to solve the the actual problem, and it posed a risk now that I actually looked at it.

So I said: "We're switching. Like we're going back. Like you know sorry this sucks we invested time energy effort and but this is we we've got to go back." And what we'll do is we'll solve the underlying problem a different way. Right? Like we can we can address it some other way.

So the lesson for me, like the the takeaways: You know one is like just remembering: Perpetual pivots always... they destroy your progress. If you're constantly changing directions you never give yourself a chance to build momentum and let things compound and um that destroys more businesses than than I see actually get destroyed because people stay the course. That being said, stubbornly persevering and, you know, because of sunk cost bias and fallacies and all of that, also destroys your progress. So looking at this and recognizing: "Hey you know what? Mistakes are part of the game. Like we're if you're gonna do anything in life you're going to you're going to make some mistakes along the way. Like you just that's just just fact of the matter."

So understanding: if I go this way, if I go this way, there's some there's inherent risk and figuring out how to course-correct in a logical strategic way and not be emotional about it and um be aware of your own biases, like your own your own tendencies, that you know maybe you're somebody that tends to stick with it a lot more. I tend to be somebody that would just pivot a lot more. And making those decisions more strategically—not frantically or not out of habit—um that they are, you know, based on the their situation. And handling them uh the right way.

Kind of working through some questions. Getting real... getting real honest with yourself about the problem that you're solving, why that thing is a problem, what does this really solve the underlying problem, and what's the what's going to make you regret this later on. Like that has that has really worked for me and, you know, candidly been a a reason that we've stuck with certain things and changed others. And as of now, we'll be going back to Beehiiv and uh building our our engagement metrics and uh better better ways to engage our email list there.

By the way, if this resonated and you want to join the list, link's probably in the uh in the in the notes below. So hope this helped. Adios.