Hey everyone, in today’s episode I share the mic with Verne Harnish, founder of the world-renowned Entrepreneurs Organization (an organization that I’ve joined) as well as founder and CEO of Gazelles, a global executive education and coaching company.
Listen as Verne shares how he came up with the idea of EO (hint, Steve Jobs), why you should wait until the $1M mark before scaling up, how he bounced back after losing $1M in 10 weeks, 3 simple tips for branding and marketing success, and gives specific advice about how to scale your company.
Download podcast transcript [PDF] here: EO & Gazelles Founder Verne Harnish Reveals How To Take Your Business From $1M to $100M TRANSCRIPT
Time-Stamped Show Notes:
- 03:13 – Verne talks about how he started Entrepreneurs’ Organization
- 04:04 – Verne helps people scale up their businesses
- 04:36 – The number one weakness in a company is marketing
- 05:15 – Verne shares that it was during a stint for Steve Jobs that he came up with the idea of EO
- 05:45 – Verne believes that entrepreneurs need a support group, because it is tough work
- 06:11 – EO has forums for its members giving them the opportunity to share
- 07:00 – Eric shares how the EO forums have helped him
- 08:13 – Verne shares three simple tips for branding and marketing: get focused, hang in there, have a great product
- 08:36 – EO currently has 12,000 customers
- 08:41 – Gazelle’s has 210 coaching partners, 2,000 active clients on six continents and about 40,000 companies using their scaling up tools
- 10:26 – Verne advises people that once they reach the one million mark, they should start scaling up
- 11:40 – There are templates for strategic planning at Verne’s websites: Gazelles and Scaling Up
- 12:35 – Verne’s new goal is helping 150 cities create scale-up ecosystems
- 13:50 – “Whatever is the strength of the founder will ultimately become the weakness of the organization”
- 14:09 – As the company scales, the entrepreneur should find someone who is better in their area of expertise
- 16:35 – Verne shares that entrepreneurs should look at their gross margin when they reach $1-10 million
- 17:08 – When a company reaches $10-100 million, you should focus on profitability
- 17:40 – With EO, Verne’s biggest struggle was in bringing in the right person when scaling up
- 18:22 – With Gazelles, Verne’s biggest struggle was the money
- 18:35 – When 9/11 hit, Verne lost a million dollars in 10 weeks
- 19:05 – Verne found religion and followed John Moen’s advice to get his business funded by customers
- 19:25 – Verne explains the importance of the cash conversion cycle
- 19:54 – Verne followed Bill Gates’ strategy of having a year’s worth of operating expenses in the bank
- 22:38 – Eric shares the importance of having a good CPA
- 23:00 – Verne refers to the book Simple Numbers by Greg Crabtree
- 23:27 – “It doesn’t take a genius to give something away. It takes a genius to sell it at a price where you make the margins, so you feel the growth of the company.”
- 23:48 – Verne talks about how he gets his talent through networking
- 24:55 – Verne suggests Geoff Smart’s book Who and reiterates the importance of knowing how to hire the right people
- 25:30 – Growing a company is about hiring people who are smarter than you
- 25:50 – Verne wished he was bolder when he was younger and shares Liz Wiseman’s book, Rookie Smarts
- 26:10 – Verne shares the people he targeted to be part of EO such as Ronald Reagan, Steve Jobs, and Regis McKenna
- 27:15 – It is important to be resourceful and go after the best
- 28:01 – What’s one big change that you made this last year that has impacted your business or you in a really big way? “It is infinitely easier to scale if you only do one thing”
- 29:01 – What’s one new tool that you’ve added that has added a lot of value? The tool that Verne uses is FollowUp.cc
- 29:50 – How often are you reading, and what does that process look like for you? Verne discusses his reading habits
- 30:35 – “Leaders are readers and learners”
- 30:55 – What’s one publication or blog you tune into every day? Verne loves Seth Godin’s Daily and Brad Feld
- 31:15 – What’s one book you’d recommend to everyone? The number one business book for Verne is Eliyahu Goldratt’s The Goal
- 32:35 – Connect with Verne through his website Scaling Up
3 Key Points:
- In scaling up your business, hire the RIGHT people who are better that you or are the BEST in their field.
- Set money set aside for when problems arise OR that you can use to grow your company.
- Growing your company works best when you focus your energy on ONE thing.
Resources From This Interview:
- Verne Harnish
- Entrepreneurs Organization
- Scaling Up
- Mastering the Rockefeller Habits: What You Must Do to Increase the Value of Your Growing Firm by Verne Harnish
- Fortune Magazine column
- Must-read books:
- The Goal: A Process of Ongoing Improvement by Eliyahu Goldratt
- Simple Numbers by Greg Crabtree
- Who: The A Method of Hiring by Geoff Smart
- Rookie Smarts: Why Learning Beats Knowing in the New Game of Work by Liz Wiseman
- Seth Godin’s blog Daily
- Brad Feld’s blog Feld Thoughts
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