Building a Business That Transcends Beyond You

Ryan Deiss is the Founder and CEO of The Scalable Company, where he helps entrepreneurs build operating systems to scale their businesses. He is also the Founder and CEO of DigitalMarketer, the Founding Partner at Scalable Equity LLC, and the Founder and host of the Traffic and Conversion Summit, North America’s largest digital marketing conference. As a serial entrepreneur, author, and investor, Ryan is a digital marketing expert and the author of Get Scalable.

Here’s a glimpse of what you’ll learn:

[3:47] Ryan Deiss shares his unexpected journey to entrepreneurship
[8:00] How Ryan transformed a significant business challenge and generated substantial revenue
[14:51] The crucial role of cash flow management and budgeting in business
[19:44] Ryan’s perspective on mentorship and the impact books can have as guides
[23:36] Why you should align personal values with business ambitions when setting goals
[27:42] Ryan talks about the delicate balance between family life and entrepreneurial endeavors
[34:46] What mindset should entrepreneurs adopt to scale and exit their businesses?

In this episode…

Some entrepreneurs can build businesses that thrive without them. What separates these entrepreneurs from the rest who struggle with overwhelming challenges and growth stagnation? How can you transition your business from a self-reliant operation to a scalable enterprise that can function without constant founder involvement?

A digital marketing titan and a master of scalable systems, Ryan Deiss once struggled to manage his cashflow and felt trapped in the “founder’s paradox,” the concept that entrepreneurs must decrease their operational role to increase the company’s growth. To build, scale, and exit your business, you must identify its value propositions before creating strategic processes to maximize them. Your business can function independently when you establish a dedicated fund for business expenses to manage cash flow, prioritize strategic planning, become proactive in your personal and professional life, and embrace the “founder’s paradox” to enable scalability.

In this episode of Destination Business Freedom, Pat Mancuso welcomes Ryan Deiss, the Founder and CEO of The Scalable Company, to discuss the perspective shifts needed to scale. Ryan explained how he overcame significant business challenges, the importance of aligning personal values with business ambitions to set goals, and the delicate balance between family life and entrepreneurial endeavors.

Resources Mentioned in this episode

Quotable Moments:

"I wish somebody would have told me basic accounting earlier."

"Good people don't fix broken systems, broken systems break people."

"The moment I realized my business was bigger than me, everything changed."

"Sell because you're running to something better, not because you're running from something."

"The more valuable you are to your business, the less valuable your business is."

Action Steps:

1. Implement value chain mapping to visualize and optimize how your business creates value.

Effective as it enables entrepreneurs to identify critical processes and focus on optimizing what truly matters.

2. Adopt a mindset that embraces the Founder's Paradox, understanding your decreasing operational role increases the business's value.

This mindset shift is crucial for growth and scalability, ensuring the business can thrive independently.

3. Establish a dedicated fund for taxes and essential expenses, separate from the main business account.

By being financially disciplined, business owners avoid cash flow crises and ensure compliance with government obligations.

4. Prioritize time for strategic planning with key stakeholders and block it off in your calendar first.

This ensures a proactive rather than reactive approach to business and personal life, fostering balance and preventing burnout.

5. Celebrate your business successes but remain content to pursue further goals without complacency.

It fosters a positive environment and motivation, while the mindset to continue improving prevents stagnation.

Sponsor for this episode...

This episode is brought to you by the Mancuso Consulting Group, a go-to resource for entrepreneurs, CEOs, and business owners dedicated to personal and business growth.

Our team of experts has coached, consulted, and trained over 15,000 entrepreneurs, C-suite leaders, and business owners in areas of sales, leadership, organizational development, and personal growth. Additionally, Pat Mancuso has launched multiple multimillion-dollar business ventures, giving him a firsthand understanding of entrepreneurs' daily challenges.

At the Mancuso Consulting Group, we are committed to exploring innovative ways to help businesses and leaders grow their people and improve their bottom lines.

To learn how the Mancuso Consulting Group can help you unlock your full potential, visit www.themancusomethod.com, email us at pat@themancusomethod.com, or call 651-503-7355.

Episode Transcript

Intro 0:02

welcome to Destination Business Freedom, hosted by Pat Mancuso. Join us as we explore success strategies and hacks from leading entrepreneurs, helping you bridge the gap between financial success and personal freedom. Your journey starts here

Pat Mancuso 0:23

My name is Pat Mancuso, and welcome to the Destination Business Freedom podcast. Today we have an amazing guest with us, I am super excited for a number of reasons to introduce you to the gentleman just a second. First, I want to share with you our purpose of our podcast and that is to help business owners entrepreneurs get to that destination that exit address. That's the whole reason they started a business or acquired a business, we want to help them close their gap between their finances and their freedom. And on our podcast, what I do is I bring some incredibly talented individuals who have exited businesses are still in business, but ultimately bring the value to help business owners in various parts of this journey to get to that destination address to get to that exit. So we're really excited today about our guest, I know we're going to have an amazing time. Before I jump in though I want to talk to you about our sponsor today the Mancuso Consulting Group sponsors our episodes, and the through that sponsorship, they offered an amazing gift for everyone. If you go to www.themancusomethod.com, you can take a short assessment and with that assessment that will allow you to receive a free report of an itemized checklist of the things that are really important to get to that destination address. And that will also allow you to schedule a call with Pat. And then that call he's going to provide $10,000 worth of value otherwise will write you a $500 check on the spot. www.themancusomethod.com. So without further ado, let's jump in. I want to introduce a gentleman to you that really does not need an introduction. However, I'm going to share his background. His name is Ryan Deiss. And I'm gonna read you what the accomplishments of Ryan and I could probably just summarize them, but there's so many important pieces of this. So Ryan is a serial entrepreneur, author and investor and according to Daymond John from Shark Tank, he actually companies practically own the internet is companies on the internet. He's also the founder and CEO of Scalable Company and digitalmarketer.com and the founding partner at Scalable Equity LLC and an equity accelerator that builds and acquires Business to Business Media and software brands. Today, I'm actually in San Diego at the epic board meeting and he's a partner also with Roland Frasier. And that's what allowed us to have access to Ryan and so we're super excited for that partnership as well. Ryan is also the founder and host of Traffic and Conversion Summit, the largest digital marketing conference in North America. He also quite literally wrote the book on Modern Marketing: Digital Marketing for Dummies. I love that I haven't bought that one yet. Ryan read it but I do need to now in its second edition, as a sought after speaker Ryan has shared the stage with top business leaders and celebrities like Dr. Richard Sir Richard, let's not get in. Well, he probably might be a doctor too, right? Sir Richard Branson, Gary Vaynerchuk, Sara Blakely, Martha Stewart, Tim Ferriss, Daymond, John and Dave Ramsey. Holy Hannah, you know, some people that I want to get to know through you. Most importantly, Ryan is a proud father of four and husband, Emily, to whom He gives all the credit for everything he has ever done. And I know that to be true, right, Ryan? Because when I listen to your podcasts, you absolutely bring that peace in the family to that. So welcome today.

Ryan Deiss 3:47

Yeah, thanks so much for having me appreciate the kind introduction. It is always. Yeah, I hope we get into some of the real stuff because the bios are always the good. They're like the, you know, the good things, that it's not the real stuff, right. And so I think we'll get into the real stuff, and maybe some of the stories behind some of those stories that aren't quite as glowing.

Pat Mancuso 4:08

Well, you know, in that is so true. And again, you know, if I followed you and for a long, long time, and I know in listening to your podcast, you do bring that realness to the table. And I think it's important for entrepreneurs and business owners to hear that. So we definitely want to drill into that today. So we're gonna, we're going to talk in two parts. We're going to talk first about your journey as a business owner. And I'd really love to pull out of you. Some of the things that maybe you didn't know when you're going through the journey you wish you would have known is sooner in the journey to help business owners who may be thinking about exiting, maybe they haven't thought about exiting, and just the things that they need to know far too often business owners, in my opinion, don't have the information they need to be making these decisions earlier in that journey. So I want to pull that out. And then a day Definitely we're gonna jump into your recent book. I love it. I just I told you when we started, I couldn't put it down after reading it. So I definitely want to jump into that as well. So it let's start with Ryan, talk to me about how you actually got into being an entrepreneur, like where did that journey start?

Ryan Deiss 5:17

It started in my freshman dorm room in 1999. And I did not set out to be an entrepreneur to launch a business. I've certainly I'm not sure I knew what an entrepreneur was. I definitely couldn't spell entrepreneur. I just knew I needed some money. It really is simple. I met a girl. And I knew within a couple of hours, right? Yeah. And I met a girl I knew within a couple of weeks of meeting this girl that she was probably the woman I was going to marry. Didn't tell her that at the time, because I knew that'd be a little bit creepy. But I just knew, and I knew, Okay, it was weird, because I'm a kid, right? I mean, 18, you're 19 years old. And college. I'm the same age as my oldest son, basically. Right? He's mine. And so there I am. And I just suddenly have this realization that oh, my gosh, I'm an adult now. And at some point, I'm gonna need to do adult things like, you know, by the woman, I love a diamond ring. And yet I have no money. And diamonds are expensive. And that was, that was the full extent of my business planning, right. And it literally was just, can I make some extra money because I was going to college on on grants and scholarships, I had a part time job to cover, you know, food and shelter, but there was nothing left over. And it was the first time I realized that I'm broke. And that's a problem if I want to be able to do some other stuff. And that was where it began. My first business was doing web design for people at that point in time you think back to 1999, it was sort of, you know, the.com era and nobody knew what they were doing. And so I didn't either, but if I could learn a couple of days, stay a couple of days ahead of everybody else. What do you know, you're an expert. And so that was where I got my start building, building websites, selling a little products on, you know, on the internet. Fast forward a couple of years, I got the ring, I got the girl. And that stupid little web business had ballooned into dozens, dozens of little websites selling a bunch of little products. And I had a full blown business, earning me as a college senior have a full time significant six figure income. I didn't realize it was a lot of money. I certainly had no idea what I was doing. But that was where it all began. Well,

Pat Mancuso 7:26

why don't you know, it's always fun when I talk to entrepreneurs and business owners. And that's pretty common. You know, what happens in the beginning, it's, and yet there's always something right like that's inside of people that drives them to that because you know, everybody can kind of experience what you expect. You describe what you experienced. And yet, you took and you acted upon it, which is, which is the difference in my opinion. So as you started that journey, and again, you weren't setting out to be an entrepreneur, what things did you get challenged by? Like, what were the things that struggled you the most in the beginning of that journey?

Ryan Deiss 8:00

I think one of the best worst things that happen to me early on in my career is everything worked. The first three years, I had no real expenses, I had no employees, it was just me, when you think about all the difficulties and challenges and complexities of business, I didn't have them. And yet I was in this amazing time where the internet was was was new. And were ranking number one on Google was, you know, just as easy as just stuffing a bunch of keywords in the bottom of the page. So, you know, looking back on it, I had no cost of sale really to speak of my my operating margins were fundamentally 100%. Like it was really hard to screw up. And so let's call that what it is. I was lucky now to your point. I took action and other people didn't. So I think the opportunity for luck was there for everybody. I took it they didn't. And I'm not going to apologize for that. But it wasn't until I graduated. And I decided, Okay, I'm gonna do this full time, I'm going to take this business thing seriously that the challenges emerged. And the first challenge that emerged was one of cashflow. I'll never forget it. Google did this little algorithm shift. And overnight, every single website was removed from the rankings, right? Just about every single website I had was removed for the rankings. Now, in fairness, I was doing some kind of spammy gray hat, you know, stuff to get to rank. And so I deserved it. I had it coming. But like the first big challenge that I faced was, I was dependent upon one source one channel for my customers. And I realized, okay, this is a problem. I need to figure out how to make this work. And so I decided I was going to get and learn the ad side of the game. I need to figure out, I bet if I'm writing a check, they're gonna keep sending me people. Right. Sure. And I was right. And they did, but that's what I say. Now margin compression becomes a thing because for the first time ever, I'm having to invest same customer acquisition, right? And I didn't know what I was doing. And so like a lot of accidental entrepreneurs, like I was, didn't know what I was doing. I had no real clue what was working. I tried everything. And I flailed around and then trying to do every thing. I wound up still generating decent revenues. But it was the first time I learned that, you know, it doesn't really matter how much top line you generate, that doesn't necessarily guarantee there's going to be bottom line. And there wasn't. And I had a line of credit, because back then, man, I mean, this is pre This is pre financial crisis, if you could fog a mirror, a $250,000. signature line of credit,

Pat Mancuso 10:44

like how many people that gave mortgages to that didn't qualify for mortgages, right? No, at least

Ryan Deiss 10:49

the mortgage, there was a house attached. Yeah, you're right. $150,000, backed by nothing. And I had this $250,000, this line of credit, because it was through Wells Fargo to I was banking with at the time, anytime my bank account, hit zero, it would just pull from a line of credit. Now, keep in mind, I don't know what accounting is. I don't know what finances, I don't have a p&l or balance sheet, I don't have these things. The way I ran my business was as long as there was cash in the bank. And ideally, if there was more than the previous month, I was good. Well, in having this line of credit, it was pulling from that I didn't get a sense that, Hey, idiot, you're actually losing money every month. And in addition to that, because I wasn't making a lot of money, and I wasn't able to take distributions. Now in my personal life, I'm putting everything on credit cards. So if my wife and I are going out to dinner, well, that's going on a credit card, we're buying furniture that's going on a credit card, if I got to pay, you know, the land, landscapers that's going on a credit card. And all of this culminated I remember I was sitting at the Hilton Anatole, in Dallas, Texas, I was actually at an event at a business event, one like the one that you're at learning about how I'm going to be super successful. And I'm going to take over the world. And I'm sitting there and I'm at the bar, and I go to pay my taxes. I'm like, I want to make sure I'm in the room up and Adam early the next morning, so I go, Hey, can I can I tap out? And I gave him my I didn't get my debit card, because I knew that I was probably not going to use it. Um, and it declined. And oh, that's weird. And so here tried this one, and it declined. It will try this one. And it declined, huh? Pull up my bank account. And I realized that my bank accounts at zero, I go and look at my line of credit. And I had completely drawn down all $250,000 I had no money in the bank, I had $250,000 out on a line of credit. And every single personal credit card I had was maxed out as well. I was worse than broke. I was in about 330 $40,000 of debt. And I didn't know how to fix it. And I'll tell you, I remember sitting there at that bar. Just it was everything I had to not cry. Yeah. Realizing what I done because I had a brand new wife. We had a brand new baby and a brand new mortgage. Like what have I done? And it was in that moment when when I thought, okay, you got a choice. You know what you're going to do? And I recall the conversation I had with a friend of mine. Weeks before we were just talking about how Isn't it interesting how so many businesses were started on the back of a napkin? Yeah. And that conversation is popped into my head. And we're, and he said something he's like, you know, I bet there's something magical about the napkin, I bet it's constraint, the simplicity of it. If you can describe your business on a napkin, then you probably really have a business. And if you can't, then it's probably too complicated. You don't It was a passing comment. I didn't think anything of it in the moment. But all that rush back to me right there sitting at that bar, and I look up and sure enough, there's a stack of cocktail napkins. And so I just remember reaching out and grabbing one. Yeah. And, and I borrowed a pen from the bartender and I said, I'm gonna I made myself a deal. I said, I'm gonna, if I can describe how my business works on this napkin, then I'll figure it out. I don't know how I'm going to do it. Rather than money, steal the money, whatever I got to do, I'll figure it out. And if I can't, then I'm going to leave the event early, go home, confess what I've done to my you know, to my wife, file bankruptcy and see if I can get a job. And, and I did it that day i i wrote on the napkin, here's how business works. It was super simple as basic little, you know, outline drawing, nothing particularly magical about it. But I remember looking at saying that's it. You know, that's it. But I learned a lot of hard lessons from that experience, man, and I was probably four or five years in business before the wall came down.

Pat Mancuso 14:51

You know, right. So we do business consulting in in we've worked with about 800 businesses the last two years and as part of that process, we've had to collect their financial They'll statements. And one of the things that I've learned through that journey is that most business owners small to medium, let's say, and even I don't even think bigger ones sometimes. But the small the medium, you know, who's ever taught them how to read a financial statement, a balance sheet. And even more importantly, like those two things are pretty common language. But what I found is when I asked a business owner, you know, send me your cash flow statement. They're like, what I mean, my cash flows and and because they manage business, like we all do, I think, from entrepreneurial perspective in the beginning. So, you know, I love that you share that story. And the thing, you know, I study people's body language, it still impacts you, I can tell it still impacts you. But going back to that point, it's it's important. So I'm so glad that you shared that. So let me ask you this in the journey, you know, because you've, you've started businesses, you've sold businesses you've acquired you continue to acquire businesses, what are some of the categories if you may, or the lessons that you've learned that you wish you would have learned earlier?

Ryan Deiss 15:58

Well, one thing I wish I, I wish I would have learned basic accounting earlier, as I just said, I mean, and that, and I'll say that, I'll go and speak sometimes to students, or to very young entrepreneurs, and there and, and they say, you know, what do you wish you knew same similar question, and I'll say, I wish somebody would have told me how to how to read a basic p&l and how to pay my taxes. Because I didn't know how to do those things. Right. I dug myself out of that hole. I when I worked that napkin plan that was a first year that we generated in excess of a million dollars, because we focused and so that's one of the things I wish somebody would have told me that focusing doing one thing exceptionally well is better than doing 100 things kind of man. But but the I'll and I'll tell the story, and I'll describe this, like, Oh, it's my million dollar napkin because I generate a million dollars. Now, the other side of that story is the way I dug myself out of a hole and paid back all that debt is I didn't pay my taxes. I didn't know I was supposed to. This sounds it sounds like I was buying Lamborghinis. Right. I was operating under this delusion that if you spend it all, you don't have to send it to the government. Well, guess what? That's not true. And so basic, what am I really talking about here? Basic cash flow management, like understanding that when when, when cash comes in, that's not all yours, right? You need to immediately set aside some percentage that's going to need to go to taxes, and you need to have a qualified tax advisor, you know, accountant, CPA, who's going to tell you what that amount is, and just move it all over. And if it's a little bit more than what you need, cool, you can take it back out but immediately that comes in the tax people say pay yourself first. Look, I'm gonna pay the people with missiles first. Okay, the government's got freakin missiles, and they can take away your liberty. So they get it they get first dibs now. Second, me, right? Yeah, so I love the idea. Let's Let's peel off, you know, 10% Let's make sure I'm paying myself a salary. I wish somebody would have said pay yourself a salary. Don't just, you know, take distributions you're going to take too much in good times and not enough in lean times. Pay yourself a fair and reasonable salary. Take that off the top. Right All right. Now be clear on what your major expenses are and make sure that you've set aside for those as well and then build up some kind of rainy day emergency fund three months six in the beginning, God dang it, just have a month's worth of cash sitting around there. So that you're not spending so that you're, you know, spending yesterday's dollar you know, today as opposed to always catch it up. It's basic personal finance stuff. Yeah. Yeah, basic base. If you'll just buy a basic personal finance book, be people can talk you mentioned I've shared the stage with Dave Ramsey, have so much respect for Dave Ramsey, don't fully apply to all of Dave Ramsey's, you know, 100% no debt, I get why he does. But if you buy or just read what Dave Ramsey teaches on personal finance, and apply that to business, basic cashflow, just that would have saved me as a fortune. So cash flow management was one lesson. Here's another biggie that I had to learn. That had to learn the hard way too many times. Good. People don't fix broken systems, broken systems break people, the number of times and everybody says that it's a it's a who not how like that every problem is a people problem. That's true in the abstract. But what I've found is if I just keep hurling human beings at a problem, that I couldn't fix myself, maybe it's more of a structural systems issue than just not having the right person. Yeah. And so solve for the systems first, let the let the people come later, then you got every reason in the world to hold your people accountable to following a system that's created. So yeah, those are just a couple man. I could keep going forever. I

Pat Mancuso 19:44

know. I know. Oh, my gosh. Well, you know, here's what I take away from what you said and I love it in that. Always people have perspective, right. Like you talked about Dave Ramsey, and I remember reading early on in my life, The Millionaire Next Door and the concept in there. About driving a car until it's got 250,000 miles on it. And I could just never buy into that, right? I don't like that wasn't my ideal. And yet, what you're really saying is you take pieces from the people, the books, the mentors, and then you apply those to you. But yet, that's still a system, right? It's still fundamentally a system. And I know we're going to talk about scalable in just a second. But that's really what I took away, you know, from from that read was was that and I'm, that's my background. I love that that part of it. And yet as entrepreneurs, we never learned that, you know, early enough in the journey. Let me let me ask you this, what's the biggest mistake you made? And then I want to ask you about the biggest success in your entrepreneurial journey. So we might have already heard the biggest mistake, but is that the biggest?

Ryan Deiss 20:49

I wish that was the biggest mistake? I knew that I wish that was the biggest mistake. Um, yeah, look, getting myself in $330,000 in debt was a huge mistake. I'm not paying my taxes and getting myself in 300, some $1,000 in debt to the government was a big mistake. In both of those, though, the lessons that I learned and how I dug myself out of them, right, were so phenomenal that, like, do I have Do I regret that they happen? Yeah, that sucked. Like, I wish I could learn those lessons another way. But there's neither of those are the biggest mistake, the biggest mistake that I made was firing myself for my own business. Because I believed that I didn't have what it took to grow it to the next level. And I am all for, by the way, exiting, right? I'm all for hiring your replacement. One, but I believe it should happen on a good day. I'm all for quitting, but quit on a good day. And I think that's an important distinction. And what I did is I reached a point where I just decided I didn't have what it took. And clearly I was out of my depth and over, you know, over my skis, and I needed adult supervision. And, and so I fired myself, I had all the entrepreneurial impostor syndrome, you can imagine, and, and I fired myself and I brought in a seasoned CEO, a seasoned executive to come in, and this person in about six months, lost million, like literally, we lost a millions of dollars, all of our best people were either fired or run off, and the company nearly went bankrupt. Now, that's not everybody's experience. And I want to be right. Looking back on it, I own a lot of that failure. Sure, because i i abdicated responsibility, you know, it was hot potato. So there were a lot of mistakes that were made in terms of, you know, I should have hired better, I should check better references, I should have had better controls and oversight, like all those, all those things. But the biggest mistake that I made was, I fired myself. And I didn't want to quit. I didn't want to leave the business. Right. I feared myself. And that's a big difference between buying yourself and retiring yourself. So that's by far the biggest mistake I ever made. Interesting.

Pat Mancuso 23:03

Yeah. And you talk about, you know, the replacing yourself and the process and the system that you went through and, you know, then maybe not inspecting what you expected. And you know, so that, that that's a win, what a big mistake. But what a great learning opportunity to share with people because I think sometimes we do have bad days, right? Or we do hit a ceiling. And it's like, easy to kind of throw our hands up. And it's funny. It's not funny. But it's ironic that sometimes that's when people sell their businesses, when they really don't need to, they just need to take a step back and take a breath profit.

Ryan Deiss 23:36

Yeah. And if Can I speak to that just real quickly? Yeah, I think this is important. And I want everybody listening if you're there to hear this, because it's the question that I asked, I asked it if one of our clients yesterday, she's been just beyond frustrated. Business has been, you know, flat and struggling. She feels like she's beating your head against the wall. And, and she's like, Yeah, I just think, you know, I think I need to sell it. I think I need to be done. And she could sell it and it would be fine. It'd be okay. And the question that I asked, and it's a question that a good friend and mentor asked me another time, are you running to something? Are you running from something? I love it. And I think when you sell, make sure that you sell because you're running to something better, that you visualize that. But all too often, when we're in the swamp, I mean, we're just swimming in it and it's thick, and it's stinky. All that we can imagine is something else must be better. Right? Right? And so we envision and imagine this, this glorious ideal that probably isn't real and probably isn't true. And in reality, it's this is a season, and it's a season that we need to just power through. If you've got kids, if you've had kids I had for low sometimes you're quite literally covered in in crap. You know what I'm saying? Like, but you don't read as a kid, right? Like that's a bad day, but you don't want that to happen. Next time. I'm gonna put downtown I'm gonna arrange things differently to learn from this experience. I'm not going to give up. I'm not going to get rid of the kid, you know, because because what I got here is actually pretty great. And so, yes, leave? Yes. On your placement. Yes. So one day, if that's what you want, but do it on a good day.

Pat Mancuso 25:12

I love it. So you mentioned I'm going to come to the success in a second, but you mentioned mentors, who are some of your, your mentors. I mean, I know who some of them might be, but who are they? Who are some of your top mentors?

Ryan Deiss 25:25

I'm privileged to to call one of my mentors, you know, my business partners, and you know, enrollment. And it's funny, one of our mentors do, yeah, I love that it was funny is, you know, I met Roland because he joined my mastermind. And, and I think that it's important to think about mentors as as situational mentors, because there are some people who you can learn from, and they can mentor you in certain areas, but not every area. And I think sometimes we'll place these mentors on an ivory tower, and want to embody every aspect of them. But some of my, I'm not going to name names, but there are some people who I don't like very much, who I would call mentors. Because I believe if you only learn from people you like your learning is limited. And also some of the best mentors or anti mentors, I'm not going to do with that person did. You know, growing up, I had a stepdad for a period of time, he wasn't good enough to whatever. But I, when I think about so much of the ways that I that I approached money and wealth and success, it was because I saw him as a as a kid and the way that he pursued it. And he was always frustrated, always miserable and always bitter. And so almost everything that I did when I didn't know what I was doing was I'm going to do the opposite of him. And it's amazing how well it worked. Yeah, find somebody who sucks. And it's the Costanza thing, right? Yeah, just do the opposite. But I mean, getting some of the names Roy H. Williams, who wrote the book, The Wizard of ads, is one of my mentors. I mean, you're talking about somebody who's just an absolute marketing and messaging genius. But he's also an amazing like husband, father, I mean, just a great human overall. So I'm blessed to have so many great mentors, but I also think some of the best mentors comes, they're dead. But they wrote books, right? Investments, or wisdom from books. So when I think about mentor, it's very much like a lowercase and it's a category. It's not just like a literal human that quote unquote, mentors me that well,

Pat Mancuso 27:22

books or books or mentors, right. And some videos or mentors and content is can be mentors. Okay, so I'm gonna, we're gonna, I'm gonna, before we jumped, I'm going to ask you your biggest success, and we're going to talk I'm going to ask you one question on family. So talk about your biggest success in your entrepreneurial journey.

Ryan Deiss 27:42

You know, I don't think you've ever been asked this question before. I don't? I don't know. Um,

Pat Mancuso 27:46

I asked good questions. Right. That's my deal is good question. I.

Ryan Deiss 27:51

And it's hard because I don't, you know, it's hard for me to pinpoint my biggest success, because I like to think that my biggest six success is still in front of me. If you were to just look, I mean, we've had some exits that put many 10s of millions of dollars in the bank, that that just from the outside looking in, you'd have to say that that some of these exits where there was Traffic and Conversion Summit, or some of the other ones we had, that would have been big, but I actually think some of my biggest biggest successes was recovering from some of the holes that I was in, to step back into that business that I had fired myself. And this person, you know, it was at about it was at the six month mark, when I knew I had a problem, it was nine months when I was really scared. And it wasn't until about 12 months. And when I finally pulled the trigger what a frickin coward was I. But when I finally did it, and removed this person and stepped back in, I truly think that one of the biggest successes, there was the turnaround that he had in this company. Now, I gotta be careful, because if I identify too much with that, then and I've done I did this, there was a period of my career where I was the firefighter, and I was, yeah, and that's so dangerous. And so I think part of the reason that I don't identify with any of my successes, I don't I don't recognize them. And it's a it's a flaw of mine by the way, my wife has told me this. I don't celebrate success because I expect to win. And and I almost don't enjoy it, which is bad. Like that's it's an area of growth. But I think one of the reasons that I don't like to fixate too much on successes because I never want to let that success define me. Yes. So there you go. That was just me vomiting all loaded my own internal dialogue I'll ever

Pat Mancuso 29:40

Yeah, I love it. Well, okay, so So I am like you I share. Someone's one shared with me, that particular piece in my life. And what they said is they said, Be content with the success. But never be complacent. And that allowed that allows me to celebrate the success, right? Because if you don't celebrate the success, then then you've really missed an opportunity. So there you go. There's my contribution to you today. Okay, quick question. Talk to me about the biggest thing, you the journey of the balance, because you've talked about this in the podcast, I've heard you talk about it in many different areas, the balance of the family and how you do that as an entrepreneur, like, just give listeners, just just give us a little bit on that, because you got a lot of mean, you've got a lot of business. That's right, like how many do you have right now that you're involved with? About within

Ryan Deiss 30:41

our portfolio? I think last count, there was 17, I'm not active, I don't have active portfolio oversight of all of them. Roland has some we've got some of them are minority holdings, there's really three businesses that I have an active, sort of participatory, I'm expected to show up on like calls and meetings from time to time. That's still a lot. You know, that's a lot. So, yeah, how

Pat Mancuso 31:05

do you balance the fail and family? And because I know you do, I mean, I hear it in your conversations

Ryan Deiss 31:12

better now. I wasn't always that way. You know, back in 2016, we had three different companies simultaneously on the Inc 500 list in our portfolio. That sounds really cool. This out of that story that I don't tell is that, that same year, I was basically I'd leave for work before my kids were awake, I'd get home after they were all in bed. You know, I miss soccer games, I miss dance recitals, it was a small miracle if I made it home for a family dinner. I I'd see my families on the weekends, but I wasn't there, you know, mentally, and it really took coming home late at midnight, when I walked in to you know, my wife still sitting up in bed, you know, waiting for me and saying to me, Hey, you keep doing what you're doing. I know, I'm married, but you can't pretend like you're doing it for us anymore. You know, hold the mirror up in my face saying is that? Is that what you like? I keep mine this is the same woman that I started the business cycle by her engagement ring. Yeah, right. Yeah. So I, I've learned a lot by by I've learned balance to the extent that you can call it that by getting not advancing. Right. Yeah. Yeah. And, and by just thankfully, you know, mercifully like having a wife who was patient with me, and who would call me on my all my crap before it was too late. So I think step number one is to have an amazing partner. And I don't know that everybody necessarily has that. But But I but I do, and I am thankful for it. But I'll tell you practically tactically, what we do. So every at the end of every year, we've got, we celebrate Christmas at the house. And then as soon as the day after Christmas, we drive drive down to our beach house on the Texas coast. And from Christmas to New Year's, that is just our time to chill as a family. But then every morning, my my wife and I for a couple of days, and will literally take a couple hours every morning for three or four days. And we will say what do we want the next year to look like. And I believe that your commitments show up in your wallet and your calendar. And so she gets first dibs to my calendar. And it's when do we want to block off a family trip. And so every single summer, we take a month off, it's usually most, you know, basically the month of June or July, like we're basically gonna take that whole month off, we're gonna go to Europe, we're going to travel to the national parks like we're going to leave no laptop, no meetings, no, nothing like I'm turning, I'm shut off for you know, for a full 30 days. So that gets blocked off. We don't always know where we're going, that's fine. We block it on the calendar, we're going to do a couple of trips for the two of us, we're going to make sure that all the kids events get, you know, put into the extent that we that we know them, and then we start piling in the business rocks. Now, certain things that are scheduled years in advance, like traffic and conversions on it's still on 20% of that. That's still responsibility, our mastermind meetings, you know, some of these dinners, yeah, they're there. But when they're scheduled, knowing that we want to try to avoid certain things. But by and large, she gets first dibs on calendar. And then I make sure that, you know, I work. Yeah, yeah. And and I'll tell you, it gets honored because it's on the calendar. You know, my executive assistant knows we're not going to schedule anything there. And you know, Deanna or whoever's helping her to run the event knows like, oh, we can't book something on that because Ryan's gone. Right? Just getting it on the calendar and blocking it off. That has made the biggest difference in the world. That's

Pat Mancuso 34:46

half the battle. Gary Keller wrote a book The one thing and I've got a background with Keller Williams. So obviously, I know that book really well, but he talks about counterbalancing and that he also talks about exactly you know what you're talking about in that those family commitments have to go went first. Otherwise they won't ever go in the mud. So I'm gonna put a ribbon on this the you said something which you the question she asked your wife asked you was, are you doing this for us? And that's such a great question. Am I doing it for myself? Am I doing it for my family? You know, just to bring that clarity. So I've heard you told tell that story before. And I just I'm so glad that you brought it out because it is. It's a great question. Because I've

Ryan Deiss 35:28

had to acknowledge, yeah, I do acknowledge that the NAM is doing it from my own ego guy was doing it from my own pride. I was doing it for my own fear of failure. But who am I really worried about? disappointing because they would love me anyway. Yeah. Myself, also known as ego. So so ya know, she was getting

Pat Mancuso 35:45

caught up, right? We get caught up. And before we know it, it's like, Well, what happened? Yeah, yeah. Okay, I am just excited for this next part. So I'm going to flash this book to y'all. If you're not listening, or video watching the video. It's get scalable. And I am a I just, I believe I'm a Systems guy. And I've had people share that with me. And yet, when I read this book, Ryan, like, holy crap, I probably left $10 million on the table in the last year, based upon the success that we had, because of what I didn't have that was in this book. So I don't even know where to start other than, you know, talk to us about what was the impetus for the book? And what would people take away from it? I mean, just, I'm gonna let you go on this part. Because I'm excited. Yeah, the emphasis

Ryan Deiss 36:29

of the impetus of the book is like, what is all the stuff that I wish I would have known? When, you know, all the bad stuff happened? Like, how could I have avoided that? What do I wish, you know, I would have done differently, because I made all the mistakes, you know, because because I didn't, because I didn't know. And, look, eventually, I did get around to reading all the books, you know, I, I read the, you know, the traction and the scaling up and, you know, privilege to call many of these authors like friends. Right. But, and again, I say this with all due respects, I feel like a lot of these books, you know, think about like the E Myth, they have so many great ideas. And then, but there was still something missing. And, and it what, it didn't always work for me. And so I had to figure out my own way. And what's in the book is the way that has worked for me for all of our different companies and had worked for others. So I figured it was time to do it and the foundation of everything that we do. And this is my complaint with most business books that are out there, the on any type of like operating system or strategic planning, or systemization. They all start from the same place. And that same places, what's your goal? What do you want to achieve? What is your goal? And I did that? And so I would do that. And then like, well, even I would argue even worse than that. What's your big vision? What's your mission? Right? As though step one is entrepreneurial arts and crafts, vision board time, right? And it sounds good. It just doesn't frickin work. Yeah, it doesn't work. And I haven't seen it work for there's no successful business that I've walked in. And they've been like, Yeah, I mean, it's all because like, you know, we vision ated so hard, like, No, you will get some, like post facto justification when they're trying to look like all woowoo on some mainstage. But that's not how they did it. That's not how they did. They did it through in the trenches, figuring out how do we add value? How do we create value? Like, why do we deserve to exist? And I think that that is the single most important question that no business owner asks, Why do you deserve to exist? Why do you deserve to win? How do you create value? Because every business does two things. We sell stuff, and we fulfill the stuff we sold, we sell it to serve. That's it. And so our thing starts from How do you do that? And let's visualize that. Let's map that. Now. The process that we use is value chain mapping, process mapping, if you if anybody has an MBA, or if you are six sigma certified, you'd roll your eyes and be like, Oh, this is the most basic thing in the world. But you know what, nobody's ever taught it to any small business owner or entrepreneur. And if they do they try to overcomplicate it, you don't. So we just get some sticky notes on a whiteboard. And 1520 minutes later, you can answer the question visually, this is how we create value. Right? That's the foundation. Yeah, then you can say, Okay, if this is how we create value, what are the steps and stages in that process of all those little sticky notes that we don't want to screw up? High Stakes, high chance for human error, but also really important? Let's build processes and standard operating procedures for that. I think one of the biggest mistakes that people make when they systemize their business is they believe and try to execute the documentation of everything. Man, I did this. I remember going on vacation, reading the E Myth, and I'm not knocking the E Myth. Great book. But what I did and what I see a lot of people do is they read that book and they go, I got it. We need to document everything. I read this book. When I get back into the office I call an all hands meeting, which by the way, don't do that. If you find that you just read a book or you came to a conference and so like, step one is I need to call an all hands meeting like Doctor tutor, trumpets blaring, everybody, you're about to do something super stupid and expensive. Okay, yeah. And I did it. I made all the mistakes. And I declared, okay, team, I'm not going to approve any new hires. I'm not going to greenlight a new project where I do anything new. And so every single person has documented everything that you do. Well, half the people were panicked because they thought they were getting fired. The other half was pissed off, because they were wondering why they got a document when they know how to do their job. Exactly. I finally got them engaged when I finally got them aligned. And they did it had all these checklists and SOPs, we printed them out, we put them in a binder, we had color coded tabs, dividing it up. I remember putting the binder putting all these binders on a bookshelf, and not exaggerating. We never looked at him again. No, not once. I found them when we moved offices after COVID. And they were literally covered in dust, or oh my gosh, don't do that. Don't document everything document the critical. How do you know it's critical? It's on one of those critical value engines. This is how customers happen. We got it visualized. This is what we do once we got them. What are the steps? Most of the businesses that we own business is doing many 10s of millions of dollars, that they might have 610 almost never more than 20 what we call playbooks SOP. Yeah. Yeah. Then you can then you can ask the question, okay, now who's going to do all this stuff? You know, yeah. And that, that's the third step. You don't you don't go to your people and say, what do you do? Because you get an answer. And it may not be the right answer. You go back to your value creation process and say, this needs to be done. Who's doing it? And entrepreneurs? If you do this, you're going to hear over and over again, a resounding answer, which is May, May I do that one, too, but you want to build your hiring plan, visualize how you create value and start handing those sticky notes off to other people. Yeah, then we can build scorecards, then you can figure out meeting rhythm in the last step of the process. Once you understand how you create value, you systemized it. Now you can say, okay, then what are our goals? Yeah, I think the ability to set goals is a privilege, not a right. And it's something that you get to do after you've decided how you create value, it's customer first, not your goal first, then I would argue, let's mission, let's vision, what are we going to do those things they need to happen? I'm not saying they're not important. They just have.

Pat Mancuso 42:31

Yeah, you know, it's it. What, what what I took away first, I loved the part about the meetings. I mean, you brought so much clarity to how we're taking so much energy time and resources by meeting with people and they're typically not productive meetings. And so that that piece was amazing. But it also resonated with me, the Pete, the value creation, because absent of value, price becomes an issue. And that's what businesses struggle with. And it's because they don't stop long enough to identify a truly identify the value, right? And the value, which again, I'm probably paraphrasing what you said in the book, but the value is what you sell, so to speak, or the service you provide, it's delivering. Really, I mean, that's, that's right, right. I mean, I'm just doing combination

Ryan Deiss 43:17

of actions and activities, yeah, that create the results for the clients and or customers, and so to not have that visualized, and there's plenty of business owners where, and by the way, same you, you can't create value until you've captured marketplace value in the form of a sale. Right, we're selling and we're serving, we need to document both. And there's plenty of entrepreneurs where I say, okay, and we do it, how do you get how do you get new customers? How do you get new clients, they can tell me, generally, but they can't show me, you know, well, we've got these ads that we run, or we've got these referral campaigns, or we exhibit at trade shows, you know, then people go over to this landing page, and they fill out this form. And if they don't fill out this form, they go through this follow up process, and they do then they go into this qualification process. And then and then and then all the way through until sale is made. Great. Now let's do for the filament side, until you have that visualized. You can optimize it, visualize and optimize.

Pat Mancuso 44:14

I love it. I love it. I you know, I got so much it. Like I I'd recommend books. But this this book, I mean, again, you know, there's no royalties coming to me if you're listening to this, but you absolutely as a business owner have to buy this book and read it because it just breaks it down. So simple in a process and like I was telling Ryan before, we're heading out on a plane ride for four hours, I couldn't book the book the book down I finished it on the plane, right? So, Lulu, no, my pleasure. It's an honor to have you here today. So I want to ask you a question. So business owners are listening to this and you've got you know, an amazing journey and amazing background. You know, you're you're you teach people how to market their businesses, which obviously creates sales. So if I'm a business owner, and I'm listening to this right now, where would you tell them to start? Like, what's one of the first things or second things or third things they need to do to get to that, that place of counterbalancing to get to that profitability, to get to a business, that they enjoy it? What would you share with them?

Ryan Deiss 45:20

It needs to start with a mindset shift. And I'm not a big mindset woowoo guy, I'm a pretty practical tactical guy. Yet, I do think it starts with a mindset shift in that mindset shift is something that I call the founders paradox. And that is, the more valuable you are to your business, the less valuable your businesses, right. And hearing that, and believing that and accepting that as truth is step one. Because the reality is, is it's not true day one of your business day one, you are the most valuable person. And the more valuable you are, the more valuable your business is. But there must come a time where your business gets bigger than you. And most of the entrepreneurs that I know, the ones that we work with, when they get frustrated. And when they get burnt out. It happens, because they got what they wanted to happen. It happens because their business grew, right. And the and where they get frustrated me Why don't I fire myself because my business got bigger than me. And it kind of pissed me off. Yeah, you know, but that was the point, that was the goal all along. And nobody told me, hey, there comes a time. And incidentally, it happens it for the first time at around a two to $4 million in revenue, some people were able to power through, it's definitely gonna happen again, at around, you know, 10 to $20 million. And you know, 20 ish million tends to happen on like, the twos or the threes, you're gonna see it happen again. But your business is going to be bigger than you. And you've got to figure out how do you replace the operating system that is, you know, you EOS with an operating system that is more scalable, and every business that has scale as scale because it was able to grow beyond the founder, because the founder, intuitively or because they got the right advice, they would listen to a podcast like this, you know, believe the statement, the more valuable I am to my business, the less valuable My business is. So if you want your business to become more valuable, you have to be less valuable to the business. And the way that you do that is you start saying what are the pieces that I can hand off? And you don't do it all at once? By hiring an integrator. God, I hate that. I think that's one of the biggest entrepreneurial lies perpetuated again, with all due respect to, to Gino and traction. Yeah, at some point, you should hire an operator. Right? At some point, you should have a functional executive team that you know, at some point, you may even bring in a CFO or a CEO and step aside, right? That's fine. But this notion that like, I'm going to make one magical unicorn hire, who's going to do all the stuff that I don't want to do. So I can just vision eight all over the place is a myth. Yeah, it's not how it works. It happens one piece at a time. It happens by saying, okay, they're selling in they're serving of these two, what's the one that I believe I can start to hand off first?

Ryan Deiss 48:10

Sure. Somebody's like, what's the one I'm gonna hold on to? Some people say, oh, I need hold on to sales hold it longer, fine. Let's get fulfillment handed off. So people say no, I really want to own the client experience. Great, let's get you a salesperson. And off one of those to get you a functional leader who's going to own that. Once you've done that, now, you start to hand off the other one. And you're gonna say, Ah, but they don't do it as well as me. That may be true in the beginning, but something magical is gonna happen, they're going to do it better than you, they are going to do better than you because it's all they got to worry about. And then there's going to be two people, or three people. And even if they only do it 80%, there's more of them. And then magically, what happens is your business starts to scale and it doesn't without you. And if you can just keep your ego in check and allow that to not hurt your feelings, but realize that this is actually the game that we're playing, no matter the parents ecology. At some point. Your goal is not to raise children is to raise adults. You want them to leave, right? Leave Yeah, not come back. Don't come back. My son is about he's turning 18 In a couple of months. He's gonna go off to college. And I'm sad as hell and I've got to do business with the fact that I'm super sad. I'm gonna miss him. That feels like a death almost right. But it's what supposed to happen. Yeah. And the same is true for business owners, your business at some point. If you do your job, right. Is going to leave. Yeah, and it's a good thing. It means you did a good job. Now you got new questions to answer. What's going to be that next mountain I'm going to climb what's the next thing is help with that like this. There's stuff for that. But don't, don't, you know, throw a wrench in your own business and blow it up and sabotage it just so that you can swoop in and save the day again, I mean, if you want to, but not as much fun as it may seem Like it is, well,

Pat Mancuso 50:01

so Ryan, what a great way to kind of put a ribbon on our entire show. I mean, that mindset piece of that shift that business owners or entrepreneurs have to have I mean, it's, it's a, they have to start there if they if they do want to kind of go through that journey in the way that they want to. So if somebody needs to get in touch with you wants to hear more about what you guys are doing and the amazing things you're doing, what's the best way for people to reach out to you? Yeah,

Ryan Deiss 50:28

so I, Twitter is me. So if you follow me on any of my social channels, that's probably my team posting on my behalf. But But Twitter is still mine, because I like it. And so twitter.com/ryandeiss. My DMS are open. And so if you've got any heard of this got any value, I just love it. If you'd say, Hey, I heard you on that banks or heard you on that. And I had a question or heard you on that thought that was stupid. Either way, like, that's fun. For me, it's nice to know that, that people are hearing this and that they are getting value from it. And selfishly, I'd love it if they buy the book. And you can actually get it for free, getscalable.com/Free. It's literally it's just pay shipping. And it's literally the cost of shipping. It's $8.20. So it's available on Amazon and all that stuff. But if you want it for free, help us cover shipping, and you can get it for free.

Pat Mancuso 51:21

I don't know how this happened, right. But I got one book, and then I went, I think I've bought that book before since I have to. So I'm helping your numbers there.

Ryan Deiss 51:29

I appreciate it. Find a deserving person and give it to him.

Pat Mancuso 51:33

That's right. That's right. Well, Ryan, again, thank you so much. We do just truly appreciate you being here today and your time because I do know how valuable it is. And so thank you so much for sharing all the great things that you did. We appreciate it. Listeners, please share our episodes with wherever you listen to your podcast and wherever you're journeying and talking with other actors and business owners. We do bring valuable content to you each and every time we talk and the folks that we bring, provide some amazing value. So thank you so much, everybody for listening or watching. Take care. Take care, Ryan. Thank you. Thank you, Robbie.

Outro 52:12

Thank you for joining Destination Business Freedom with Pat Mancuso the insights and strategies shared guide you towards financial prosperity and personal freedom. Continue to navigate boldly. Until next time, keep transforming challenges into achievements. Farewell and stay the course.

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