From: alexhormozi
The concept of scaling the unscalable is crucial for business success, especially for new or smaller businesses. What often appears “unscalable” is, in reality, a skill deficiency rather than a physical impossibility [01:38:00]. Many entrepreneurs leave significant money on the table by not leveraging their largest competitive advantage: the ability to engage in initially unscalable, high-impact activities [00:07:00].
The “Unscalable” Misconception
Businesses frequently dismiss strategies as “unscalable” because they don’t immediately see how they can grow to massive scales [00:40:00]. For example, a business doing $30,000 a month through outbound sales might seek a “more scalable acquisition system” because it “requires people” [00:54:00]. However, most service businesses scale by hiring and training people [01:16:00]. The inability to scale is often due to a lack of know-how, not inherent limitations [01:24:00].
This misconception is akin to someone wanting to lose weight but fearing they’ll get “too bulky” before even starting to exercise [02:24:00]. They focus on an extreme outcome they don’t want, preventing them from taking the first necessary steps [02:27:00]. Similarly, entrepreneurs worry about not being able to hit $100 million a year when they’re currently making zero [02:37:00].
The Swamp: Lack of Context and Resources
When starting out, businesses typically lack both context and resources [03:00:00]. This absence of help, money, or leverage makes initially unscalable tasks seem impossible [03:05:00]. The business journey often involves a “swamp” where there isn’t enough money to hire talent, forcing the founder to work multiple jobs or “management debt” [10:10:00]. This period of working today’s job and tomorrow’s job is essential to get ahead [10:21:00].
A prime example is Andy Frisella of First Form, who started by writing handwritten cards to every customer [03:09:00]. While this seemed unscalable initially, as the business grew, he first signed the cards, then had others write them, maintaining the personal gesture [03:38:00]. This illustrates that a 2.0 or 3.0 version of an unscalable solution can still deliver 80% of the value [03:45:00].
The Importance of Doing the Hard Work
Many business owners are unwilling to do the heavy, hard work, such as one-on-one customer calls, because they perceive it as unscalable [04:17:00]. However, this early engagement is crucial for:
- Learning pain points customers suffer from [05:39:00].
- Identifying effective messaging and hooks [05:42:00].
- Altering products and offers to convert at a higher percentage [05:46:00].
As Paul Graham noted, “You can solve every question and every problem in business by talking to your customer more” [06:31:00]. Customers know what they want and will guide how to address and advertise to them [06:47:00].
Even for low-ticket items, directly onboarding customers leads to longer retention, more referrals, and better product and marketing [06:58:00]. The early phase of entrepreneurship is a journey of educating yourself on your customer and their problems [08:14:00]. The market itself is the best teacher [08:22:00].
Practical Tips for Customer Interaction
To gain maximum insights from customers:
- Magic Question 1: “If I were to eliminate all of the things that I have in my feature set except for one, what would it be?” This reveals the core value proposition [05:56:00].
- Magic Question 2 (Inverted): “If I were to eliminate one thing from my entire feature set and it changed nothing about your life, which one would it be?” This identifies the least valuable aspects [06:13:00].
Regularly asking these questions allows businesses to cut, trim, and distill their value, maximizing impact for the most people [06:24:00].
Evolution of Scaling: From One-on-One to Group
The path to scaling involves a deliberate progression from highly personal interactions to more leveraged models:
- One-on-One: Start with direct interaction to gain deep customer understanding and refine the offering [07:19:00]. The speaker himself learned sales by doing 4,101 closes one-on-one [07:33:00]. This hands-on experience builds essential skills and knowledge [08:00:00].
- Semi-Private (1-on-6): Once the core questions and solutions are clear, create a presentation and start doing group sessions. This multiplies output while maintaining a close experience [07:22:00].
- Group Onboarding (1-on-20/30): Further scale by having larger group onboarding sessions, still focusing on setting expectations and delivering promises [08:44:00]. Companies have scaled to over $100 million annually using this method [08:52:00].
- Leverage and Delegation: As systems become refined (e.g., presentations), teach others to deliver the same content, effectively scaling the process [09:41:00].
This progression shows that the “unscalable” work provides the data and processes needed to eventually scale, creating the cash and skill to build leverage [13:36:00].
Advantage of the Small Business
Small businesses (under $10 million in revenue) have a unique advantage: they can do things that large corporations cannot, specifically due to their lack of scale [14:18:00]. They can be more efficient per lead and opportunity by pulling out “all the stops” and offering personalized experiences that a large company couldn’t possibly replicate [12:50:00]. For instance, sending personalized voice notes or videos via iMessage from a personal phone, rather than automated green texts, drastically increases response rates [12:13:00].
This “unscalable” personal touch is a competitive advantage that must be exploited in the early stages, like being dealt pocket aces in poker [14:49:00]. Use what you have to grow into a “mid-fish” with more resources and reputation, which then provide new advantages [15:05:00].
Frameworks for Scaling
Two frameworks can help in this journey:
1. Sales to Fulfillment Continuum
This continuum states that generally, the easier something is to sell, the harder it is to fulfill [15:41:00].
- Easy to Sell: “Done for you” services (e.g., “I’ll do everything for you”) are easy to promise but hard to deliver [15:55:00].
- Hard to Sell: “Do it yourself” models are hard to sell but easy to deliver [16:05:00].
Most new businesses incorrectly start with the hardest-to-sell model. The recommended approach is to start with what’s easy to sell.
2. Done For You, Done With You, Do It Yourself Pyramid (Tesla Model)
This approach suggests starting at the top of the pyramid:
- Done For You (Most Expensive): Begin with the most expensive, “done for you” service [16:50:00]. This is easy to sell and maximizes revenue per customer, especially when customer volume is low [17:02:00]. Although it’s harder to scale, it allows for developing Standard Operating Procedures (SOPs) and productizing the service [17:12:00]. This also establishes a strong brand association at the top tier [18:22:00].
- Done With You (Mid-Tier): Once SOPs are developed from “done for you” clients, transition to a “done with you” consulting relationship [17:49:00]. This allows for serving more people (e.g., 10 times the amount) at a fraction of the price, as the support required is less intensive [18:00:00].
- Do It Yourself (Lowest Tier): Finally, take the developed SOPs and offer them as a “do it yourself” product, appealing to enterprising customers who want to take things on their own at an even lower price point [19:08:00].
This top-down approach ensures operational efficiency, as the number of customers increases as the level of hands-on support decreases. The initial “unscalable” work of “done for you” clients provides the deep knowledge and systems to scale successfully downstream [19:46:00].