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Podcast Pit Stop: Ed Rusch on the Three Phases of Scaling a Business

Posted by Arielle Walsh on May 20, 2022
Arielle Walsh
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“Throughout history, the things that you do to be successful work until they don’t.”

In Episode 41 of the B2B Podcast, Pit Stops to Podium, Ed Rusch walks us through every stage of scaling a business. Ed is the CRO of Deck Commerce, a company dedicated to helping brands create an exceptional customer experience. His knowledge of high-growth technology companies shines through as he describes the change in mindset that must occur at each phase. Tune in to find out how to avoid the trap of simply repeating what you have done in the past instead of adopting new practices as you scale your business.

Take 20 minutes to listen and digest and then head back to the races! 🏁🏆

Pitstop Highlights: 3 Phases of Scaling a Business 

Phase #1 (0-10m Revenue)

Within this phase, it’s common to see founder-led selling and guerilla tactics. This phase is an integral part of onboarding key individuals onto your team that supports your overarching company strategy. 

As you get into 5 to 8 million dollar revenue, companies can begin proactively thinking about the next tier of scaling their business. Essentially, companies will need to start preparing their organization for a different mindset.

Phase #2 (10-50m Revenue)

Focus drives results. 

Phase #2 deals with having a relentless focus and determination to get things done, whether that be through finding new financial partners, new funding, or expanding the capabilities of the business. 

One integral aspect of this phase is being able to set a list of things aside and prioritize on what truly needs to get done. By specializing in only a few attributes of the business, you’re able to compartmentalize areas of focus and drive those areas to the $10 to $15 million mark that you’re shooting for. 

Phase #3 (50m+ Revenue)

In Jon’s words, this phase is all about “the cross-functional trust you need to build in your organization.” 

The key part of this phase revolves around being able to develop cross-functional teams that will work seamlessly, continuing to a high-growth trajectory with very few issues. This commonly happens within a more expanded and segmented organization. 

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Full Transcript

Brendan: Hey, everybody, welcome to Pit Stops to Podium, the RevPartners podcast, where we talk to the execs who've competed and won, taking their companies from high growth to high scale. My name is Bernard Tolleson. I'm the co-founder and CEO of RevPartners and I'm delighted to have with me today, Ed rush for this episode of Pit Stops to Podium. Welcome, Ed. 

Ed: Yeah, thank you so much. I really appreciate being on the show. 

Brendan: Thank you. Absolutely well, we're delighted to have you, Ed just for our audience. So you know who Ed is. Ed has a wealth of experience working in the software space as an executive on the sales and marketing side. He most recently serves as the Crow of debt commerce. And how about you share with the audience who that commerce is? 

Ed: Yes, we are really a leading Order Management system that is super focused on the direct to consumer channel. So we work with brands. Brands have traditionally or historically almost exclusively sold through brick and mortar stores. As e-commerce is emerging, buying habits and things are trending in different ways, as well as the impact of COVID. Brands are really accelerating their need to get closer to their customer and being able to sell directly to them. Our system really sits between the front end systems and the back end systems so that brands can create that exceptional customer experience and sell directly to their end buyers. 

Brendan: That's great. Yeah, if you hadn't already gone through the process of digital transformation, then COVID certainly accelerated that or forced you into it. So I'm sure it's a fun space to be in right now. 

Ed: Yep, absolutely. 

Brendan: All right. Well, we have a tradition here, and it's before we get into our big idea, we like to get an opportunity to learn more about our guests. So what are three fun facts that our audience should know about you outside of work? 

Ed: Oh my gosh. One back in my youth, I had aspirations to be on the radio as a DJ. I did spend some early career years doing just that. I grew up in Cleveland, Ohio, and spent some time on the air throughout Ohio and had the opportunity to do a live remote broadcast from the Rock and Roll Hall of Fame studio. So that was fun. 

Brendan: This is that's really cool, and maybe this podcast is fulfilling some of those aspirations and being on a show. That's great. There you go. 

Ed: More music, more variety. That's good. Number two is my parents met in Europe. My father was stationed in the military over there and my mother's Danish. And so she kept her Danish citizenship post marriage. And as a result, I'm also a Dane and have a Danish passport alongside my US 1 and speak Danish and have most of my family actually on the ground over there versus here in the US. 

Brendan: So that's cool. So you are fluent. Maybe the wrong word, but you can speak Danish. 

Ed: Yes, absolutely I can. I can hold my own and my mother and I typically speak Danish even to this day together and have found some cool, Danish produced TV shows available on Amazon and whatnot to keep my Danish chops going strong. 

Brendan: All right, that's great. So you were an aspiring DJ or dual citizen with Denmark? And what's the third fun fact? 

Ed: Well, I've sailed across the North Atlantic probably about 30 times in my life on various ships going back to the days of the age, two and others. It's really born out of the fact that when my parents moved over here from Europe after they got married, my father was a teacher. My mother was is a nurse and in the early years couldn't practice nursing in the US until getting certified. So she hated the fly and love the ocean being a Dane and a Viking. And so we would spend our Summers sailing over. She would work in the summertime as a nurse at a hospital in Denmark, and we'd sail back just in time for school to reboot. So lots of times sailing past icebergs and over where the Titanic says. 

Brendan: That's great. Well, I appreciate you sharing a little bit about your background and what has formed you. It's always fun to learn about our guests background and experience, but I do think it informs just who they are and how they view the world and ultimately what's made them successful. Well, let's transition to our big idea. I mentioned kind of in the introduction that you've had experience working in a handful of high growth technology companies. And so I think you're a great voice to speak into this whole idea. When we talk about inflection points of scaling business, there are different phases and seasons that go through or that a company goes through, and I think the natural temptation is to do. Never worked in the past and to this next stage, and so I love to talk about this idea of re-imagination and being creative and nimble and innovative during these certain inflection points. And so maybe let's as we start before we kind of get into these different phases, how about you give us idea of why there's that temptation and what is in your mind? What are those different kind of phases that we want to look at today? 

Ed: Sure, so based on my practice, I've worked for more startup oriented organizations, sub million trying to really get their go to market commercial chops underneath them and prove that this concept that early adopters have bought into is something that is market ready for a broad swath of buyers and that you can take the company to the next level, but also work more on the mature side of the business, where companies have broken through that. $125 million mark have penetrated their original markets really well and then have come to the realization to continue on a higher growth trajectory. They've got to find new, adjacency to get into and have work points in between. But from my view, I sort look at it from three different tiers that start up 0 to $10 million in IRR software spend. Once you hit $10 million, there's a different sort of a playbook and tempo that you need to operate from in order to go from 10 to that $50 million mark. And once you break that $50 million mark and have ambitions to get into that 3 figures, that requires yet a different sort of set of plays and a plan to execute on that. 

Brendan: Yeah, like that. So let's think about it. Kind of talk about those three different inflection points, which are about 0 to 10, 10 to 50 and then $50 million above. So let's start. Let's park in that first kind of crazy season, if you will, of that startup 0 to 10 million. So what are the things that an executive should be thinking about what you've experienced in that season as it relates to being kind of creative and driving a demand Gen engine? 

Ed: Yeah, I think the reality is companies are in a startup phase, as you've got founder led selling, you're using a lot of sort of guerrilla tactics and other ad hoc things in order to gain the attention of some of those early adopters and try to scale the pursuit of new logos. I think New logos and getting more into the fold is the number one ambition. You're not necessarily thinking as much about management and expansion and cross-sell efforts. And in those times, and then you're finding sort of key people on a lean team that are able to engage. Prospective buyers have skills at being able to close and find those new adopters and bring new logos into the fold. Oftentimes, I've found that in those situations, you actually have sort of a collection of folks that are aligned around proving the concept out, getting new logos in the door and running the plays they need to run perhaps more unconsciously competent than consciously competent that start to prove as the winning plays. And then you just start getting lasered in on repeating those over and over again, as you start to get into that five, six, seven million mark. What I've found is that the companies that can sort of get into that next tier are starting to proactively think about scaling the business and realizing that what's gotten you to that point isn't going to be enough to get you to the next level, and you start to have to proactively prepare the organization for running forward a different mindset. 

Brendan: So you talked about at that 5 to $8 million mark, whatever that kind of band is, that requires you to pivot a little bit or rethink. There are some common pitfalls that you've seen where it's caused a company to not be able to get past that mark. 

Ed: Yeah, I think one is just continuing to do what we've done and being solely reliant on the things that got you from that 0 to 7 to 8 and not taking the time to step back and think, OK, what are the patterns in our success to date that we need to start to formalize? How do we start to expand the group of people who are able to run these plays and then starting to proactively think about putting in processes and documentation and DevOps models and. And all the types of things that you would need to do so that you can equip other people to be consciously competent to help you scale the business above and beyond. So those early folks in the trenches in the early days, perhaps doing a lot of good things and aren't necessarily consciously competent about what that even looks like. So I'm taking a moment to see the patterns, understand the things that are working and working on a regular basis. How do you formalize those things and how do you package them in a playbook and align sort of additional people and processes around your organization. So that you can prepare and teach others to be able to do the same. So that you can start to gain success across a wider variety of contributors than the folks on the early days that are standing up the organization. 

Brendan: Yeah, it reminds me we had Rob foreman on a previous podcast. Rob is a co-founder and President of Salesloft, and one of the things that he talked about was a different topic. But I think there is a theme that's really important here, which is around leverage. And what I hear with leaders is you're moving in this kind of early stage. It's very much an entrepreneurial mindset and rightfully so, because you're trying to figure it out. And in some ways, it's survival. But when you transition to what you're describing, the leverage you get is, how do you move beyond yourself and how do you create the systems and the processes that allow you to actually build the team where it's not relying on you or dependent on you, but you have others that are really driving the business? So I really like that idea. So let's transition into kind of that next phase for those that have been fortunate to get out of that 0 to 10 and now they're moving into that 10 to 50. So they've got at least product market fit. I would assume you've got a team that you're building. What are the kind of key ideas or things that you are mindful of and that 10 to $50 million range as it relates how to be thinking about building the business? 

Ed: Yeah, I believe that focus drives results, and a dumb thing that I say that resonates is you need a relentless focus. And so the easy thing to do is to keep plowing more onto the list. We've got to do more of this. We've got to add that we've got to add these three things we can now, perhaps with our new financial partner and funding, add these other capabilities to the business. But the real sort of secret in this success is not necessarily coming up with a list of all the new and additional things you're going to do, but also being very intentional about the things that you're going to stop doing. And sometimes that's actually the harder part of the equation in that entrepreneurial mindset. All the folks that are on the front end of that process, by definition, are likely touching eight, 10, 12 attributes of the business, right? And then part of that leverage about making it scalable is getting out of having to be involved in that. Many attributes of the business become involved in less attributes of the business, but become deeper in those attributes of the business and be able to perform better with specialization in accountability around that. So oftentimes believe in this inflection point is really around being the discipline about stopping some things, not being so dispersed within the business. And then being able to start to compartmentalize areas of focus for people and sort of drive and lead those areas of focus forward from that $10 to $15 million mark that you're shooting for next. 

Brendan: Yeah, I like the relentless focus concept. It is easy to say, not necessarily easy to do. And I think one of the benefits of focus that it creates clarity and ultimately creates alignment. And if the hard part is especially essentially to get that entrepreneurial mindset as you want to do everything, but when you try to do everything, you don't do anything well. Yeah and so that's I think that's absolutely true. And it just also the focus, the fear. I mean, we've talked about this a lot within our organization and people I talked to. It's just there is a fear that you are missing something that you feel like you should be doing. But when you actually focus, it expands and narrows your focus and allows you to execute flawlessly, which I can certainly appreciate. 

Ed: Yeah, when you're 10 people, you know, you know everything about the business, right? You're informed and everyone's talking to each other. You go to 50 people, you can't keep doing that. Never mind looking forward and going 100 people, 150 people and, you know, perhaps ultimately thousands. And so that really, I think, is a discipline of reimagining the business that is key to success and what comes along with that. Who is as you get these areas of additional focus, you got to modify your kpis, your dashboards and the things that you're going to measure accordingly to drive the behaviors you want in these more focused lanes and that 0 at a 10, it's all about bookings, new logos, you know, 10 to 50. Now it's around velocity and, you know, build of pipe. And how are you pulling stuff through and how are you pulling the levers around conversion rates and getting new audiences in the door in ways you haven't prior and whatnot? That's a different sort of conversation. And just by hook or crook getting those wins in. 

Brendan: Yeah, it sounds like in phase one, if I were to distill that down, it's like run hard from 0 to 10. And then when you're getting into this 10 to 50, it's like run smart. So yeah, creating some discipline around how you're actually going to market, which makes a lot of sense. And so let's transition Ed into this third phase. There are more phases, of course, but I mean, the 50 million plus is a very different animal than that 0 to 49. So as you've got kind of that product lead, you're starting to build these predictable, repeatable processes. What does it look like when you get to that 50 million plus inflection point?

Ed: If I had to summarize it, it's really about that cross-functional trust that you need to build in the organization. Continued lanes of focus and responsibility and accountability will continue to build out as the organization grows. You know things from a go to market perspective that you might have been involved with from start to finish. It's no longer viable with volume and the expansion of the business. Now you're starting to really have the ability to sort of pass off attributes of growth that you might have owned prior. You might be segmenting those areas of responsibility over more cross-functional teams within your go to market plan. Not only that being more product led and relying on the roadmap and your product teams, your services, teams, your customer success teams and the like. And so part of that reimagining of the business and being proactive is recognizing that those things are going to be important in the future path of the organization and starting to build the teams, the mindset and the playbooks accordingly, to prepare the organization for that cross-functional trust to where they can all work seamlessly in a very orchestrated way to continue that high growth trajectory moving forward with minimal hiccups or Mrs. That might happen as things are moving throughout a more expanded, more focused and more accountability, a more segmented, you know, attributes within a larger organization. 

Brendan: Yeah and I want to go back to a theme that you mentioned. I think it was in the first stage it was talking about, like consciously confident or that idea. So how does that change from that early stages into this $50 million plus round, like were some practical? Or what does that look like to you? 

Ed: Yeah, I mean, I think it's just the nature of people who we are. And as things grow and people develop professionally and as teams and as organizations, there is that really early start as you endeavor into something new that you might be like completely unconsciously incompetent and you don't even know what you do well, if you don't do well and what not, people are inclined to have certain strengths and weaknesses based on how they're wired and kind of what makes them tick. As you started about this call and my background, right? So those are some things you're going to be easier, more easily competent in, just because those are aligned with some of your strengths. And in those early stages, you might fall into a position to where you're attracted to it because you kind of do it well. It's fairly easy for you. You don't necessarily know why, but you can execute on it and have some success. Well, that success is only going to be limited in your ability to put in so many hours in the day and touch so many things over the course of that day, week or month. As you start to evolve, you start to realize, OK, well, why am I good at those things? And I want to be very consciously competent about those things so that I can take those to the next level, but then also equip people to also be successful, being competent in driving the business forward in a go to market perspective or a growth perspective. And then ultimately, the more people you can get into your organization that become consciously competent in their areas of focus, the whole thing kind of comes together in an orchestrated. Way to exponentially take your growth trajectory to the next level, and then ultimately, one thing you've got to be mindful of is becoming consciously incompetent, right, where you start to think it's too easy, you get complacent, you start running and doing the same things over and over again. You're not thinking about it as intentionally as you were, as you were building things out and you're not necessarily being challenged to stay focused. So on the back end of that evolution of who we are as people. The other danger zone is getting too far on the other side and then becoming sort of complacent and not consciously competent as you were in the earlier days of this growth endeavor that you were on. 

Brendan: Yeah, I find it really encouraging and the reason I think about our audience and we were taught this whole idea of these inflection points and it's really around like you have to evolve and you have to rethink in order to something only to survive, but to thrive if you want to hit these different gates. But there's also an element of that because at the end of the day, the business made of people. And so as an individual moving from this competency concept, there's an intentionality here. And what hearing you communicate is to get to these different stages. We can grow into these roles. So it's just a matter of us understanding what's required. And then developing into those leaders that are necessary at these different stages. I think one of the temptations are concerns or fears as well. I'm only able to do that 0 to 10. But what I'm hearing you say is it's just a mind shift and understanding what's required and being proactive and taking initiative in those different areas. 

Ed: You know, it's throughout history, the things that you do to be successful work until they don't, right? And these inflection points are those times where things that have worked in the past might not necessarily carry you forward. Be conscious of that. Proactively address those things. Don't fear that changing things about your business is going to blow up what you've done in the past to be successful. But those things you've done in the past to be successful are the groundwork that you build upon. And these new ways of developing yourself and your business and the teams that you lead is really a bond on building a new way of adding success to what you've already done in the past. So one of the things from a high growth perspective and the successes that I had in the past can be summed out, you know, in really thinking about finding more ways to win. So in the earlier phases, you might have one really good way to win. You haven't figured out that there's two or three other ways to win from that 10 to 50. Part of that conscious confidence is getting more people equipped to run the place. In that way. You found out the win, but then you're also developing two or three different other ways to win that you haven't leveraged in the past. And then you get into that $50 million plus mark. Your repertoire of ways to win the game is much more holistic, and you might have several or you should have several levers to pull in order to be successful. 

Brendan: That's great. So Ed, this has been a really informative conversation. I really loved learning some of these practical insights based on your experience in terms of companies going from 0 to 10 10 to 50 million plus, I really enjoyed the particularly enjoy the area around conscious competency. I think it's a really great topic and we could even have our own podcast on that specific topic because it was just so good. Moving into next steps, what are ways in which our audience can engage with you and engage with e-commerce? 

Ed: Yeah, super. I'm on LinkedIn, just linkedin.com backslash and rush. It's argues that e-commerce is also on LinkedIn and by folks to follow our company feed there and e-commerce jd.com. Excellent well, Ed, thank you again for coming by for this episode of pit stops a podium. I really enjoyed your insights and can't wait for audience to learn more from you.

Ed: I really had a lot of fun being on the show. Thanks for having me.

Brendan: Thank you. 

 

Pit Stops to Podium: A RevPartners Podcast

On the RevPartners Podcast, we talk to executives who have competed and won, accelerating their companies from High Growth to High Scale. Hosted by RevPartners Co-founder and CEO, Brendan Tolleson. Take some quick notes from each week's "Crew Chief" and then head back to the races!

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