I’ve been to startups before and I’ve work with a lot of young companies. They have this kind of mentality -like we can do anything, we want to be perfect in everything, we are the best but the fact or the matter is we can’t. So the first thing we need to recognize is to have a mindset to say I want to be intentional in certain things or I’ll be strategic in certain things.

After that we need to have a mindset of ‘I want be disciplined’ in certain things, I need to build a certain rhythm; I need to see things in a different way. We want to be able to put a certain kind of mental habit in the way we look at our business and from then I think that’s the first step to Scaling Up.

Marcus: We touched on a few things you know you talked about being strategic or being intentional about Scaling Up. Could you give me some examples of that, what does it really mean to have strategic intention like a core purpose to why we are Scaling Up thru experience?

Jeremy: I have a client in Southeast Asia but I don’t want to say the name because they are very big and they are like everywhere, so can you imagine a company so big having been around for hundred over years ask, ‘ So who are we’?.

It’s a question because they are the third generation already, and they want to scale to the next level they need to continue to be relevant right? I mean how to do you scale a business when the people you serve don’t find you relevant, so what does relevance means?

And I post this question to a division head and asked him this question “If I ask you what is the purpose of your business, you’ll tell me ‘generate energy’. But I’ll turn this question around and ask you would people miss you if the business is not there anymore? Are you relevant to the community? Are you relevant to people?

This actually is very powerful because it’s a most powerful form of marketing advertising, that you mean something to the community you are in even before you talk about what are the product or the services that you have.

A lot of people have a Mission and Vision and they put it on their wall and forget about it. They don’t know how to use it as strategic weapon right! Actually it’s a nuclear weapon that you can use by making yourself indispensable tothe community, industry, and from your customers.

Marcus: Why is it important to have this vision for a start anyway?

Jeremy: Again I will give you an example and it’s from the same company. One person asked, ‘we are selling energy and energy is commoditized, it’s like electricity and you don’t even see it, so how do you differentiate electricity.

But the whole idea is that if the product is a commodity product then how do you make yourself standout, how do you differentiate yourself? You differentiate yourself by the impact you make in your community. So we talked about things like to build a power line you need a community to buy-in.

The community will benefit, Yes you are selling a product as electricity and everybody can sell electricity but why would the community allow you to build your plant there and not let somebody else plant it because of the meaning you bring to the community.

Let me give you another example, I have a client who is in chemical industries. This client sells chemicals and they do chemicals for schools for hygiene reasons and things like that. They tell me every competitor comes and will start talking about, ‘my chemicals is made of this and that’. “commodity”.

How did he differentiate his business? So we went through the tools to know where is the secret weapon in the Purpose. Now he goes to a school and says I’m here to tell you how you can love and protect your children in a way that they don’t fall sick. They sell their purpose and they don’t sell their chemicals.

That becomes powerful to opens door because people do not want to hear “I’m selling chemicals; my chemicals can do this, that, etc. everybody else is the same.

You know the funny thing is that in Vietnam I have people who have attended my workshop like four times, they just keep coming back to learn and they tell me that just by re-visiting the purpose and selling their purpose instead selling their product they see like after 7 years, they hit a plateau and then they jumped 25% in six months. Because if you don’t differentiate your business, people will commoditize you, the market will commoditize you, your customers will commoditize you so you need to start from there.

Marcus: They tend to overlooked also the big Why. How do you get to your big Why, why do you do what you do in your core purpose? How do you get there as a business owner?

Jeremy: Every one of us we are human and we are not machine. Even though we start a business with intention to make money but deep down inside we are all looking for meaning someday and most of the time, we start businesses that somehow we like or we find that it has helped us or touched us in some way before.

So one of the things that I do in my coaching is I will asked the founders, ‘when you started this business what was your first thought?’ We want to hear from our founders and we start to recreate to a set of tools because we know the thought is somewhere there. 

Marcus: Let me interject there for a second, so you ask a first question and most people answer make money, how do you go deeper into them?

Jeremy: So we have this tool and we ask ourselves like five why’s. We start out by asking why you do this business. The first ‘why’ is very descriptive, ‘because we see this an opportunity’, then we ask our self this question, ‘so when we do this, why does it matter to people?’ Then they will say oh! It matters because of this, this, and this.

Ok! Then let’s go one step deeper, how is that important to your community, industry, or people around you? So we take them to five why’s that goes deeper, deeper and deeper. Distilling very much to really how does this actually give meaning to the people around you so that’s the process.

And it’s a fun process because you will see people arguing but it bring a team together and finally when they arrived at their core purpose they say, ‘hey guys finally we know why we are in this business. It’s not just a mission vision you put on a wall; it’s something that really makes us different from our competitor.

Marcus: For our friends who are listening, if they want to get access to these tools what ways can they access to it?

Jeremy: There are some tools that you can download for free from the website scalingup.com but most of these tools that are intensive, I use for coaching. You can’t use it on your own, you need somebody who can take you to the process.

Marcus: Why is Scaling Up so important?

Jeremy: The problem with not Scaling Up is you’ll be wipe out by competition very quickly. I’ll share an example form my Vietnamese clients, they used to tell me this funny story. In Vietnam, the first 5 years they’ll make money and the next five years they’ll pay their losses. It’s because they start a business because there was an opportunity with the right time and you know they just went ahead without a plan.

If you don’t think that, my gain for the 5^th year to the 10^th year must be bigger compared to my gain from the 1^st year to the 5^th year, what’s going to happen is people with take your cheese/ take your pile in. There is a very interesting business study, businesses do not decline on the upward turn of the curve, they actually start to decline at the middle part, and it’s on the peak where people start to feel complacent.

They don’t make another S curve to make them scale. That’s the life cycle of a company. Many people when they start a business they don’t see beyond that curve.

Marcus: Can you give examples from the clients that you’ve coached before. Any example to share?

Jeremy: Let me use our own company, we’ve been in the industry for about 10 to 12 years. You will see a lot of copycats coming into training. We encountered this kind of questions. Let me share you an interesting story.

A couple of days I was talking to some people, Australian and Indonesian businessmen, they asked, hey how do we change the business of sending students overseas? Can we put it online? Can we turn it into a ’Trip Advisor’? Let’s use this crowd sourcing method to get all those information. So that’s what we mean by Scaling Up, if you don’t scale, people will kick you out of the industry.

Marcus: Retail for example, they are selling health products. He can see that other new retail is beating them. In this kind of situation, what should this person start to do?

Jeremy: First ask yourself a question, who are your core customers? What does the customers feel buying the product, using the products and etc. Then we go 1 step further and ask themselves this question in the whole process of delivering this product to the core customers.

What are the things that my customers love but my competitors hate to do or don’t want to do it? If you can find it, then you have a starting point to be different.

Just remember, the first question is, Will they buy? Second is, Will they enjoy? And third is, Will they come back to buy again? There are a whole a lot of things for you and your competitors to do before your customers will buy, will enjoy and will come back to buy again your products. Along these processes, can you find two things - What does my customers love but the other industry hates to do or cannot do?

Marcus: Could you associate like, most of the clients or companies that you worked with you mentioned that they come from other industries. In terms of revenue level, only 0-1, 1-10 or 10-20.

Jeremy: I got people from 1 to 10 and I’ve got from 500 million to a couple of billion.

Marcus: What about those less than millions, they’re also hoping to scale up or so.

Jeremy: 50% of people who attend my workshops overseas are in that category. At first they will find the things we talk about a little bit complex for the situation they’re in.

I would always tell them that, You won’t want to put in this kind of thinking when you are 10 million or 20 million because your business would be too complex to reinvent the will.

I asked one of the attendees, why do you want to implement Scaling Up? He said, I’m not going to be 2 million dollar business forever. I’m going to franchise and I want to grow. And I want to put Scaling Up in it now so that when I franchise it will boom.

So, if you’re going to ask me, what do I say to these guys with less than a million? Start to think like a Scale Up and start to do some of these things. It’s start in the mind. If you don’t think like a Scale Up, you can’t act like a Scale Up.

Marcus: Talk to me about different growth days and what are the things were different through experience in the coaching world?

Jeremy: 0 to 1 you will do everything by yourself. At that point you need to be very clear of some things. You need to be very clear of your strategies.

You must think of how I differentiate my business. How will I maintain that and how will I be sure that the people in my company will do the same. We need to start to think ahead. You don’t want to unlearn, you want to build ahead.

Marcus: What are these processes you talked about? What are the immediate processes that they need to start looking into?

Jeremy: Look at your core competency. Ask yourself how we make these core competencies stronger. Why? Because these core competencies will be the base where you’ll build things on. Don’t try and be everything. Focus on getting sales if you’re 0 to 1.

Marcus: What about when you are 1 to 10?

Jeremy: 1-10 gets a little bit complex. That’s when you start to build a brand. One of my clients is in a health care business.

Got a branding agency to come and do some kind of branding planning for them. The branding agency gave a whole list of slogans. I said they all sound quite sexy, so why don’t you like these tag lines? He said, ‘something’s just not right’.

I said, I think I know why you don’t like these, because what they gave you is sexy but they don’t represent your company. They don’t convey your core competencies, they don’t convey your brand promise and they don’t convey your purpose. In other words, it doesn’t differentiate you from other people.

Marcus: What are the examples of core competencies?

Jeremy: An example of core competency is a competency that you are good at, that’ll make it hard for people to copy you. That’s the basis of differentiation. Like when I said when you are 0-10, when you are trying to start a strong base.

Focus on the core competency because in 1-10 that’s when people notice you and copy you. Like the branding story I told you, because the branding company didn’t really capture the whole growth strategy of this certain company.

Marcus: What are the core competencies that you’ve developed working with AKLTG?

Jeremy: We have this system where we train trainers. Core competencies are the things that are not easily copied by people. You can copy my program but you can’t copy the way I train my trainers.

That’s our propriety, that’s our secret and that is something that is honed by Adam and his team. We are not afraid of our trainers leaving because I have this system. One trainer leave, I can produce five new trainers. That’s my definition. That’s my core competency.

Marcus: Is that also the reason why AKLTG grown along the years? You also mentioned that Adam is part of the selling point but he no longer does so much training.

Jeremy: We can’t scale if we just depend on one person. We scale because we have a system to help us replicate the quality and not depend on one .

Marcus: With my interview with Verne Harnish he talked about processes. There are a lot of processes. What do we get started on?

Jeremy: Different companies have a different stages of growth. In Gazelles we start this question with, Do you have the who? We don’t want to jump on things that you don’t have the right person to do.

(If you’ll look at the teaming?). Who’s who and what? Do we have the right seats to put these people in? Is it a core process where you can put this person in?

It’s not which function should I start in, it’s asking these questions. Who do I have? Is this person, does s/he fit in one of the critical things I’ll do? Are these one of the critical things we’ll do, does it make an impact in our company now? We don’t let the organization chart dictate to us.

We have a process to think through. We are not driven by a thinking process.

Marcus: It’s whatever the tools available, you’ll use it.

Jeremy: That’s the beauty of the Gazelle’s tools, it take business owners through the process. It helps you find not just the right answers but best answers to the situation.

Marcus: In your experience coaching, what are the common problems that you see when it comes to cash measurement because growth suck cash, we all know that, you’ll still need to pay a salary every month and your clients will pay you 30 to 60 days. If you’re retail you need to cover all the cost so how in such case?

Jeremy: It’s basically a way of how you think about money, its starts with how you think about things. We let the industry factors, norms of the industry tells us what is possible and what is not possible.

A lot of my clients, they did deal with government agency. and they are in cash conversion cycle with four stages and there’s an inventory stage where your services or goods are before it leaves you, sales stage where you try to sell this, billing stage and accounts receivable stage.

I once ask them this question, which part of this four stages or process can you work on that you have influence on to speed things up. They would even refusel to answer this question because ‘the industry is like that’.

We stop being creative and be problem solvers when we adopt this mind set because with this four stages there are processes within this processes that we can influence. People don’t want to think about it because they have mental block that the industry is like that.

Marcus: So going back to the cash conversation cycle and there four stages you’ve mentioned there’s inventory, sales, billing, and account receivable stage so what we’ve just talked about was it more in the accounts receivable stage where you asked your clients to pay within 30 days?

Jeremy: It can be anything in your sale process, work on it at your sale stage . Train your selves and its intentionality it’s not happened by chance and we look at the problem and we stretched the whole process out and where are the pain points I can tackle immediately.

Marcus: Throughout your experience in coaching, what are some good commission templates that you may have?

Jeremy: This is tough because I don’t go down to that level where I can see the nut and bolts regarding that commission system so I can’t really tell you how it works for different people. Let me share you from our company perspective.

Our company perspective, we are a training company and the sales process is from sales from the completion of the training, and we work as a team.

So we are working as a team and our team have sales people and trainers. So the trainer if they don’t a good job, they don’t call back again, so we incentivize the whole team.

Marcus: Where you comfortable to share what is the percentage of those?

Jeremy: It’s different for every team based on their sales target. Our principle is this: we want the whole team to work together “Group Coms” and (we don’t see the sales product has having and digest as you sell, training delivery has to complete and we build it on time.) I don’t understand this part

Marcus: Back to the cash conversion cycle, what is the inventory stage? Are you referring to paying your suppliers a little bit later?

Jeremy: That’s possible and maybe get discounts from them. Do not underestimate the value of those.

It depends on the contract that you’ve signed. That could be one and if your inventory goes out.

How fast? How long? What I like about this is that, different industries you can use this model. Because, every different industry I’m sure within the processes, You can find something that you can influence.

A lot of time we think that we can’t influence things but actually the truth is we can influence a lot of things if we look for it.

Marcus: What are other things you noticed with the cash thing? Do you notice when you are coaching? Share practical advice about it.

Jeremy: In the coaching tools, these tools were not made public because it’s a lot more complex to use. But, it was a very powerful tool, it is the Hierarchy of Revenue.

What revenue actually makes my company strong? Sources of this cash flow problems, and in the long run attract investors. Because there is a hierarchy of revenue meaning some sources of revenue should be more valuable than the others.

What I do is at least once a year with my clients is I’ll do the hierarchy of income work sheet with them. To know where are they and if your main source of income is in the lower part of hierarchy meaning it makes you work too hard or it takes too much time or resources for them just to earn that same amount of money.

How and what can we change in your business this year to move up in the hierarchy of revenue. To become more passive income and subscriptions.

How do we go from short term contracts to long term contracts? I’m giving examples of the process because this has a big implication on your cash flow. We can systematically eradicate this problem by changing our business models.

Marcus: Verne talks about the importance of having a coach, why is having a coach so important? How do you benefit from engaging coaches?

Jeremy: You know Steve Jobs needs a coach. All of us need a coach unless you are better than Steve Jobs. The beauty of having a coach is coaches have the freedom to ask questions that are difficult to ask within the company.

The coach has a freedom to push you to think of things that you don’t think about or to look at the business in a certain way. When you pay a coach you know that you should listen to him or else you are wasting your money.

The value of coaches, we can position things that are hard to confront in a business. It’s a very different dynamics from a normal managementl meetings. I know a lot of people don’t see the real value of a coach.

Marcus: For people who will get started, what should they do? What’s the best way they can get in touch with you?

Jeremy: The best way is through my email jeremyhan@akltg.com and if you want to find me you can go to Marcus. At first we need to have a conversation like where you are and why do you need to scale up.

The thing about this is we need to establish a relationship. In coaching to be really effective you need to tell me your pain point. We need to dig into your problems and solve it together.

I have a blog you can read about strategy there, it’s called goodstrategy.net, normally my clients will go there to read my other strategies.