What’s up Believe Nation!
Today I’m going to talk about the seven stages that each start-up goes through to make their first million dollars.
So I get a lot of entrepreneurs asking me questions about how to make their first million dollars.
What are the steps that companies go through?
What are the stages that you need to understand that most businesses flow through?
And so I thought I’d make this video today sharing my thoughts on the seven steps that companies go through on their process to making their first million dollars.
7 Stages That Each Start-Up Goes Through To Make Their First Million
#1: Have A Dissatisfaction With The Status Quo
So step number one is you have to have a dissatisfaction with the status quo. You have to not like what’s happening around you. Successful entrepreneurs have a big dissatisfaction with what’s currently happening. They’re not happy with the solutions.
They have a problem, either their own problem or somebody else’s problem, and they’re just not happy with the current solutions out there. It’s the start of every single great business. There has to be a pain point and a dissatisfaction with the current solutions out there.
#2: Idea Generation
“The core of every successful business is a combination of what there’s a need for, what there’s dissatisfaction with, what pain point people have with what you are super passionate and excited about, and combining those things will lead to a successful idea to launch a business with.” – Evan Carmichael
Number two is idea generation. So we have a problem, our own problem, a friend’s problem. We’re dissatisfied with the solutions out there. Now, we got to figure out what’s an idea that’s going to work. What’s the winning idea that combines what we love to do, what we’re super passionate, excited about with what’s going to solve the problem?
And there may be multiple ways to solve this problem. Whatever problem you’re facing right now, there could be a million different ways to solve it, but not all of them are going to work for you, and not all of them align with what you’re passionate about.
And so at the core of every successful business is a combination of what there’s a need for, what there’s dissatisfaction with, what pain point people have with what you are super passionate and excited about, and combining those things will lead to a successful idea to launch a business with.
#3: Actually Launch Your Business
Stage number three is, you actually launch your business. And this is where a lot of people fall down. A lot of people get stuck in just the idea generation, in the planning, because it’s exciting to plan. It’s exciting to plan and see how we can build a multi-million empire and what our life would look like. And we get a high from that. We get a high from thinking about what our life could look like, but then we actually have to do the work.
“And so when you have that great idea, you need to actually start.” – Evan Carmichael
And doing the work kind of sucks a lot of the time. Most of the time. And we don’t want to do that work cause we want to stay on that high planet where we’re just imagining that future vision for ourselves. You have to start. So many people have great, amazing ideas and they see other people make money off of it and you claim that that was your idea.
Well, who cares if it was your idea? They had the idea too, and they went out and did something about it. And so when you have that great idea, you need to actually start. Where too many people die with their best ideas still in them, you need to take action on the idea.
#4: Failure And Adjustment
Stage number four is failure and adjustment. A super important thing to understand is most businesses don’t end up the way that they planned. The thing that actually makes you money, that has a big impact, that helps you explode, is very rarely the thing that you start with.
So, it’s still important to have a plan. It’s still important to have an idea of what you’re going to do. But recognizing that that plan is likely going to fail, so let’s get it out there as soon as possible. And then you need to adjust and tweak to what the market wants and to what you’re passionate about to build something even better. It’s super important. Most companies, you look at how they started.
Look at what their first product was and look at what they sell now. It’s totally different. And they had the willingness to fail and to adjust. Hewlett-Packard started selling audio oscillators for films. And they sold a couple audio oscillators for films. I don’t even know if they still sell audio oscillators. It’s not anywhere close to being a big part of their business. They adjusted.
“You need to adjust and tweak to what the market wants and to what you’re passionate about to build something even better. It’s super important.” – Evan Carmichael
Wrigley’s started off in the baking soda or baking powder industry, and as a side they happened to give some gum away. So every case that you bought of their baking soda or baking powder, you would get some gum with it. People really liked the gum so he said, “Huh, why don’t we focus on gum?” And then Wrigley’s became this big gum brand.
And so part of success in any business is recognizing that you need to get through that phase. That the great idea that you have, no matter how great it looks in your head, is not going to be the one that ultimately guides you to massive success. It’ll be a seed and the seed will have to grow.
And it’ll grow by testing the idea, by talking to customers, by getting in the market and then adjusting. And too many people make that mistake. They launch, it doesn’t work, and then they quit. Expect to launch. Expect it not to work. And then adjust. Fail and adjust. That will be your path through.
#5: Extending The Idea
Phase number five is extending the idea. This is where a lot of entrepreneurs also will fall down. They’ll have some initial success with their business. And now we’re talking about the path to being a million-dollar company. They’ll have some initial success with their business, but they won’t expand beyond it. Where it’s very rare that you could take one product in one single market and build a million-dollar, multi-million-dollar company.
“The success in business comes from combining what there’s a need for, what customers want, and what you’re passionate about creating.” – Evan Carmichael
You need to start thinking, how do I expand this?
How do I build to more geographic areas?
How do I expand my product reach?
How do I add more features?
How do I create more services?
How do I add a premium line or a budget line?
How do I go beyond my state or my province or my country?
How do I build this thing out?
You need to think about how am I going to extend my product line, and a lot of it will come from your customers. Again, this is just adjusting to what the market wants. You will find that your customers will take you places that you never even thought of.
Again, the success in business comes from combining what there’s a need for, what customers want, and what you’re passionate about creating. So as you get out into the market, one of the best things you could do is get as close to your customers as possible.
It doesn’t make financial sense if you’re selling a $20 product to call each customer and ask how they’re using it. But it’s so important to do because it’s going to give you the feedback on how you can get better.
How you can improve your product to better serve their needs, but also how you can extend it because the more you understand their use, the more you understand their lives, the more you understand their business, the more you’re going to come up with other creative solutions that you can sell into them and then you can sell to a broader market, as well.
The way to expand any business, an easy, fast, simple way to do it is to talk to every single customer. Understand why they bought it. Understand how they’re using it. And then think about you can expand your market based on what your customers need or are asking for and you have a creative solution for.
#6: Building A Team
Number six is building a team. This is another stumbling block that a lot of entrepreneurs fall back on. So you had some success. You built your first product. You’re getting some results from it. You’re expanding. You’re building other products. At some point there becomes a huge crutch on your time.
It’s like you can’t do more. Physically. You just don’t have the time. You’re maxed out. This happens quite early on for a lot of entrepreneurs. You’re maxed out, and so to be able to build the multi-million-dollar company or getting your first million, you need to build a team. You got to bring people on board.
You got to bring on people to help you get it to the next step. Even if it starts off part-time. My first guy was one hour a day. Started off part-time, moving up, moving up, moving up, moving up to allow you to focus on the higher picture things for your business.
Here’s what happens in a lot of companies. You have some success. You realize you want to build a team. You hire somebody. Great. Your first hire doesn’t work out. Usually the first hire won’t work out because you suck as a leader. You suck as a manager and you don’t know how to hire people.
“You got to bring on people to help you get it to the next step. Even if it starts off part-time.” – Evan Carmichael
And that makes sense. If this is the first time you’ve done it, don’t expect to bring on a star employee the first time through. As you work through that process, you learn how to be a better manager. You learn how to be a better leader. You learn how to improve your process.
So that you bring on better people to start with. But what happens to a lot of people is they didn’t get their first hire right. And then they crouch back and say, “You know what, I can’t work with other people. “I just have to do it all myself.” And you can be really successful.
Make a couple hundred thousand dollars a year as a solo consultant if you’re one of the best at what you do in the world. But you don’t see a lot of million-dollar consultants a year. There are a few, but solo million-dollar consultants a year?
You don’t really see that happen. Those guys have a team. And you need to start to build your team. If you want to hit a million dollars, you need to start building your team to allow you to focus on the higher leverage things. And expect to make mistakes with your first team members.
Expect to hire the wrong people. Expect them to make mistakes. And expect for you to work on yourself to get better as a leader, manager, recruiter so you bring the right people on board. ‘Cause you need to figure out this piece if you’re going to go off and accomplish big things.
“If you want to hit a million dollars, you need to start building your team to allow you to focus on the higher leverage things.” – Evan Carmichael
#7: Leading The Team
And number seven is leading the team. So, we’ve hired our first person. Now we’re going to bring on more people and more people and more people and quickly what you realize in a bigger company is your highest leverage skill is going to be getting the most out of your team instead of the productive work that you do in your business.
So, let me explain. When you’re first starting off, you’re doing everything. Your value is 100% of the business. When you hire somebody new to take on a new role, you might be both working the same number of hours, but you’re maybe adding more value ’cause you’re the CEO. You’re the founder. But let’s say it’s like 40% them and 60% you. Or 70% you, 30% them. Great.
“Your most important activity is building up the people on your team. ‘Cause if they get better, your company gets way, way, way better.” – Evan Carmichael
As you add more people, though, your percentage keeps coming down. You may be the single most important person in the business but collectively your team is doing way more than you are. If I look at this business with this YouTube channel we’ve got eight people working on making this channel happen for you guys every single day.
I contribute the most value. Sorry, guys on my team. But I don’t do, like collectively, my team does way more than I do ’cause I can’t do all this stuff myself.
And so understanding that you need to not just focus on what you are contributing to the business, your day-to-day tasks and activities, but your most important activity is building up the people on your team. ‘Cause if they get better, your company gets way, way, way better.
As you continue to build your team, your value, in terms of the tasks you provide, become decreasingly and decreasingly important, because your team takes over much more of the enterprise. And so shifting your priorities to focusing on your team and building them up will have a much bigger impact to help you get to not just a million dollars, but way through it, too.
So those are my thoughts on the seven stages that start-ups go through to make their first million.
I’d love to know, what do you guys think? What point resonated most with you?
What do you need to work on the most to help you break that barrier?
And am I missing an eight, nine, ten that you guys want to add to the list?
Share some love. I’d love to hear from you down in the comments and help the fellow people of Believe Nation.
Thank you guys so much for watching. I believe in you. I hope you continue to believe in yourself and whatever your one word is. Much love. I’ll see you soon.
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