In this episode of Executive Connect, Melissa Aarskaug sits down with entrepreneur and founder coach Eric Samson to talk about the messy middle of startup life. Eric shares what really happens when a business hits that early growth stage, why so many founders feel stuck around the million-dollar mark, and how hiring, delegation, systems, and cash flow can either free you or bury you. He also opens up about partner tension, burnout, learning to trust other people, and the shift from doing everything yourself to actually leading.

This episode is for founders, operators, and early-stage leaders who feel buried in chaos and wonder if it is supposed to feel this hard. Press play before you confuse survival mode with strategy.

Chapters:
(0:00) The founder trap of doing everything
(1:47) What the million dollar problem feels like
(5:20) When founders need to lead
(7:47) The fear and pressure of startup life
(10:16) Why growth creates friction and blame
(12:36) Systems, chaos, and founder instincts
(15:26) Living inside constant constraint
(18:26) Avoiding burnout and false urgency
(24:56) Hiring the people you actually need
(31:21) Falling in love with operations
(37:05) Why knowing your numbers matters
(41:01) The first real profit changes everything

Eric

(0:00) Probably the hardest part and the biggest unlock. (0:04) And I feel like almost every entrepreneur probably gets advice about this and nobody, nobody takes it. (0:09) Me included.

(0:10) I literally had a great, great mentor come to me and say, nobody can do it as good as you, but you got to let them do it. (0:18) Right? (0:19) And we all think that.

Melissa

(0:21) People love to romanticize startups, the spark, the grind, the victory lap, but the real story is a lot less Instagram and a lot more. (0:31) Why am I doing 12 jobs all at once? (0:34) Today’s guest, Eric Sampson has lived that entire rollercoaster.

(0:39) He’s built companies, scaled them, rebuilds them and coach founders through the part of entrepreneurship. (0:46) We don’t glamorize enough. (0:49) The awkward, the chaotic, sometimes come comedic early stages when your calendar is crazy, your energy is drained and your sense of direction all feel like you’re auditioning for a drama series.

(1:03) Today, we’re talking about the truth of startups, sometimes in something from scratch, the pride, the pressure and the surprising turns that shape who you become as a leader. (1:15) Welcome Eric.

Eric

(1:17) Thank you so much for having me, Melissa.

Melissa

(1:19) Now let’s start from the beginning. (1:21) The fun part in those early days, you finally get to be the technician again, marketing product, finance, coding, whatever the craft is. (1:32) It feels like you’re going back to the roots.

(1:34) So the window doesn’t really stay open forever, right? (1:36) When you realize that things you really want to go great, sometimes become the things that you don’t have time for. (1:45) Talk us through that.

Eric

(1:47) Yeah, I call that the million dollar problem. (1:50) When your company gets to be about a million dollars, when you have a startup, you’re too small to be able to hire anyone for a dedicated role. (2:00) Nobody wants to work for the company because it’s not big enough.

(2:04) They know they could get fired at any point. (2:07) And so you’re basically like with a partner with one employer or something like that, relatively small company. (2:12) Everyone’s got to do things that they’re not very good at.

(2:15) You’re suffering through and spending time on those things. (2:19) And then you’re doing so many small things because no one thing is a job that you end the day. (2:25) I mean, I did this with my partner at the time so many times.

(2:28) It’s like, what did you even do today? (2:29) And we both had bad answers, right? (2:31) Because we did 30 tiny little things.

(2:33) And then there were 30 more things that we didn’t get to. (2:37) And it’s just such a frustrating experience where you’re not getting paid. (2:42) You’re not making any money.

(2:43) There’s no hope in the future for getting any better. (2:47) You’re just stuck. (2:48) You’re working like crazy.

(2:50) And your partner is failing you and you’re failing your partner. (2:54) So it’s this hopelessness that comes right around a million bucks when you kind of got to a point where it’s like you hit a number that 90% of startups can’t get to. (3:05) And you still feel like a failure every single day.

Melissa

(3:08) Well, that doesn’t sound like fun. (3:11) So let’s talk a little, although it is the American dream, right? (3:15) To own your own thing.

Eric

(3:17) Let me add a little caveat there. (3:20) At the point that we got to afford Chinese food for lunch, and we got to take 20 minutes to eat it together. (3:27) It was like such a dream.

(3:29) Those are the moments that I share the most with people. (3:32) And those are the things that I was so excited about. (3:34) It was all happening in this time.

(3:37) And so, you know, when you watch a movie, and like they’re restoring a house, or they’re getting something going, and there’s a song, and by the end of the song, it’s done. (3:47) In real life, that song is about five years, right? (3:51) And the ups and the downs are horrible.

(3:53) But what I tell new entrepreneurs who are going through it and struggling, and they look like they’re about to turn as you know, their beards are going to turn as white as my beard. (4:02) I tell them like this, these are the stories you’re going to tell. (4:05) And these are the things you’re going to remember.

(4:06) And what did I start with? (4:07) Right? (4:08) That’s it.

(4:09) It felt so hopeless. (4:10) And it’s like, I’m so proud of myself and my partner for getting through that. (4:14) I’m so proud of the business that we were able to build because of that.

(4:18) And that’s the story I’m going to tell my kids. (4:20) That’s a story I share with my entrepreneurial friends and whatnot. (4:24) It’s like, that’s the most exciting and the best time.

(4:27) I just wish I knew that at the time a little bit more than I did. (4:31) Because while I enjoyed the Chinese food, I was also just more concerned about what I had to do next and things like that. (4:38) And it’s like, stop and enjoy the crazy.

(4:41) The crazy is the part that colors the entire story. (4:44) Nobody wants to hear about any other parts. (4:47) They want to hear about that and how you gutted it out.

Melissa

(4:50) Yeah. (4:50) And you bring up such a good point. (4:52) We all do it.

(4:53) We want to be present in our lives with our friends, with our family, with our employees. (4:58) But we have these, I call them open tabs. (5:01) Maybe there’s a smarter way to call it.

(5:03) We have all these open tabs of things we got to get done and which one bubbles up to the most important of that day. (5:09) And so what signals tell founders it’s time to shift from doing everything to actually leading?

Eric

(5:20) Yeah. (5:21) It’s a great question. (5:22) And there’s probably a million right answers from a million different entrepreneurs.

(5:28) So the first thing I would say is, if you’re at the point where you’ve had enough success that you could ask yourself that question, trust your instincts. (5:36) Your instincts are what got you there. (5:38) And you’re going to make a lot of mistakes.

(5:40) But no other lesson from any entrepreneur is going to apply perfectly to your situation. (5:46) And you’re crazy. (5:48) You started a business.

(5:49) And somehow, some way, that crazy idea that you had is right. (5:53) And the rest of the decisions that you’re going to make and the culmination of all those decisions is going to make your business great or amazing or fail. (6:03) If you have a $5 million business, it could have been a $50 million business with different decisions or it could have failed.

(6:09) So you’ve got to trust your instincts to a degree. (6:12) And the other thing I would recommend that I’ve seen other entrepreneurs do, really successful entrepreneurs, people who are way ahead of me, that I try and remind myself of all the time, and I’m always nervous that this is going to work against me, but go a little slower. (6:27) You know, the best entrepreneurs I see, see an opportunity, know it’s coming, and they just move a little slower.

(6:36) I know I’m saying this as AI is coming at the fastest rate of any new technology ever. (6:41) And so maybe with AI, don’t go as slow as you would like to. (6:45) But in general, slowing yourself down, because we’re so aggressive.

(6:51) Entrepreneurs in general are so aggressive. (6:53) Slow yourself down a little bit. (6:55) Spend time answering that question.

(6:57) I knew a guy who was a CEO of one of the GE businesses. (7:01) He told me great CEOs make decisions at the last possible minute. (7:06) So they have the most amount of information before they make their decision.

(7:10) And I’ve employed that for about 10 years. (7:12) And I’m really, really thankful for that bit of advice.

Melissa

(7:15) That’s great. (7:17) Now, how should founders prepare mentally for that transition? (7:23) Because I would say going from kind of being a W2 person to, I don’t know, maybe I think of the entrepreneurship as like the wild, wild west, right?

(7:32) Everything is like different, and you never know what’s going to happen. (7:35) So how can somebody prepare for this transition and being an entrepreneur with the highs and the lows and the shifts and the that? (7:43) Is there a method that you recommend?

Eric

(7:47) You know, on the day I was going to buy my engagement ring for my wife, I had done some back of the napkin math, and I thought I was going to take $8,000 out of the company, which was going to help in part pay for the ring. (8:05) When I got to work, and I was sitting down with my partner and going over the math, it turned out I had to put $8,000 into the business. (8:17) And that was a swing that was beyond what I could afford or handle.

(8:22) You know, you want to get engaged and know that you could provide security, that you have some financial success and things like that. (8:29) And it was just such a sucker punch. (8:32) If anyone told me how I would handle that, you know, I would quit, not well, right?

(8:37) Like all bad things. (8:38) But I got through it, right? (8:40) And it’s not the worst thing that happened.

(8:42) And it’s not a big deal. (8:43) And now it’s something worth talking about. (8:46) Humans are durable, right?

(8:48) Really, really durable. (8:50) And you could prepare a little bit, but you can’t prepare enough. (8:54) And you just have to be scared that night, you just have to go to bed scared that night and wonder if you should quit, or if you should keep going.

(9:03) And again, trust your instincts, right? (9:05) Because maybe your business is bad, and you need to hang it up. (9:09) And maybe your business is good, and you need to continue and gut it.

(9:13) And if you make that decision in the morning to stick with it, that’s probably the right decision for you. (9:18) Even if it fails, that’s probably the right decision.

Melissa

(9:21) Yeah, and I don’t know who told me this, or maybe I just read this, but success is on the other side of fear. (9:26) We can’t really have anything we want if we can’t break through some of that fear. (9:30) Otherwise, we’re going to be paralyzed in fear and questioning in our every move.

(9:35) And so we really have to lean into it. (9:38) And so you call it the million dollar problem, the moment when the business starts working and suddenly everything feels like controlled chaos, scattered, unproductive, and doing everything except the things that the business was built on. (9:54) When did you feel that shift hit you?

(9:56) Was it that moment with your wife and the engagement, or was it earlier before? (10:02) Ready to lead smarter and invest wiser? (10:05) On the Executive Connect podcast, we unpack executive strategies for wealth and influence.

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Eric

(10:16) When it hit me when I was dealing with the million dollar problem was I just hated my partner, right? (10:24) We were just fighting all the time, and we both stopped believing in each other. (10:28) And anytime something went wrong, we were just looking to blame each other.

(10:32) And I’ve seen it happen with so many founders. (10:34) I’ll talk to people who are right around the million dollars. (10:37) It’s crazy how close it is to a million dollars in sales, because it’s a real business at that point.

(10:42) You’ve got something going, and they’re just so angry and so upset with everyone who’s working for them. (10:49) Everyone’s an idiot. (10:51) No one’s working hard, things like that.

(10:53) They’re the only ones. (10:54) And it’s like, you just have the million dollar problem. (10:56) Congratulations.

(10:57) What an exciting time. (10:59) You have to shift your focus. (11:00) You have to stop thinking about it like that.

(11:02) It’s like they’re there. (11:04) They’re at work too. (11:05) It’s nine o’clock at night, and they’re there.

(11:08) Trust them that they’re working hard. (11:10) Change your attitude. (11:11) It’s just hard.

(11:13) It’s just hard, and you got to get through it together. (11:15) And it really is a shift that you have to make, and it’s such a powerful shift. (11:21) And once you get over that hump, what starts happening, at least for us, is we started having some money.

(11:28) We started having money in the bank account. (11:30) I remember the first time I took more money than I needed to survive, and I put an extra couple thousand dollars in my bank account. (11:37) I’m like, this is really nice.

(11:39) This feels great. (11:41) This must be what security feels like. (11:42) This must be similar to getting a paycheck.

(11:47) And it was awesome. (11:48) And then those numbers grow, and then you want to take more money out. (11:51) And as soon as you want to take more money out, you start thinking about profitability for the first time, not survival.

(11:57) And when you start thinking about profitability, you start becoming kind of a more mature business person as opposed to just fly by the seat of your pants entrepreneur.

Melissa

(12:07) Yeah, definitely. (12:07) I agree. (12:08) And flying by the seat of the pants is not the way to be, definitely.

(12:13) What systems are they usually missing at that stage? (12:18) Do they not have processes in place? (12:20) Are they not staffed right?

(12:22) Is there a specific system that you suggest people work through so they don’t always feel like everything’s urgent, everything needs to be done today? (12:33) So it’s just chaos, like you were mentioning all the time.

Eric

(12:36) Yeah, the same CEO of a GE business, I was consulting on a clothing company once. (12:46) And he was explaining to me this theory that at GE, they focus on what the run rate of a human is, right? (12:57) Like how far you could clock a human if it’s eight hours, 12 hours, 16 hours, for the purpose of knowing that if there’s 16 hours of work, but somebody can only do 12 hours, you simply need more people or you’re simply going to fail at the project.

(13:11) And so the projections that I gave him for that business, and the team that I had to work with on that projection, he said, you’re just not going to make it. (13:21) It’s like over 24 hours a day. (13:24) You don’t have the team, you’ll have to fail.

(13:28) And I said to this guy, and I have so much respect for him, and I learned so much from him. (13:34) I go, at GE, they don’t teach you shit about paying the rent. (13:39) Because that’s never been a part of your life.

(13:41) And I’m going to hit my numbers 100%. (13:44) Systems, no systems. (13:46) It didn’t phase me at all that he said, everyone on my team needs to work for 24 hours in order to hit the numbers.

(13:52) I knew I could hit those numbers. (13:53) I knew I was going to hit those numbers. (13:56) And so in answer to the system in place or anything like that, the entrepreneur has the greatest asset in terms of no system, which is really what you need at a million bucks.

(14:08) To get over that hump, what you need is just that confidence and that attitude that no great businessman like this guy could have given me or shared with me at that time. (14:18) He could have only slowed me down. (14:20) I had something so much more special, which I don’t have any more today.

(14:24) I couldn’t pull that off the way I did then. (14:27) It’s almost like a naivety that comes with entrepreneurship that you need in order to do something that no one else has ever done or no one else thinks is possible. (14:37) You need to be a little bit nuts, and then you need to run with it throughout systems or no systems.

Melissa

(14:45) Yeah. (14:46) Yeah, it’s true. (14:47) I think it’s just finding that.

(14:48) And I don’t like the word balance, but maybe it’s like integration, finding the right integration that works for you, trying a couple of things on, see if it works, and then trying something else on. (14:58) I want to talk a little bit about living inside this world of constraint. (15:04) Founders love clarity, but the early stages of being a founder rarely provides much of that.

(15:12) I feel like there’s never enough time, money, or certainty. (15:16) It’s actually normal, quite normal. (15:18) So how do you learn how to operate inside constraints without losing your stride?

Eric

(15:26) Yeah. (15:26) So for me being essentially a lifelong entrepreneur, I’ve had a one W-2 job for six weeks. (15:33) I never had balance.

(15:36) I never took vacations. (15:38) I worked every night until midnight or later for most of my 20s. (15:44) And so the constraints were really who I could hire that was crazy also.

(15:52) And then when I started hiring, I hated everyone. (15:56) I was such a terrible boss. (15:58) This is all my fault.

(15:59) But if somebody started taking lunch or taking a break, I was timing them. (16:05) I couldn’t afford to waste $1 of the $10 an hour I was paying them. (16:11) It was so much money to me every one of those hires that I was just so stressed all the time.

(16:17) The constraints of what a normal employee could and should do felt like such a huge thing for me to get over. (16:27) And then once I realized businesses don’t run like that. (16:31) Businesses don’t run on people that work 18-hour days.

(16:33) They run on people that work eight-hour days, and I need to be okay with it. (16:37) And guess what? (16:38) In that eight hours, they’re even going to take lunch.

(16:41) So those things were the things that I really struggled to get over, especially at the beginning. (16:47) And I definitely yelled at and treated a lot of good employees poorly because I didn’t understand that. (16:54) And then finally got to the place where I understood what the expectations should be and then celebrated those that did even more and felt lucky and blessed that I was able to find them.

Melissa

(17:06) Yeah. (17:07) And I think back, I mean, everybody is not a, nobody’s born a great manager or a great leader. (17:14) I think it’s a skill.

(17:15) I mean, people have, some people have different, you know, one-ups on others with that. (17:20) But I think about all the poor managers I worked for that were like that and they got less productivity out of me. (17:30) And the ones that were more flexible, I actually worked more for.

(17:36) And so I feel like a lot of times understanding your employees in the world that we live in right now, everything, so we need it tomorrow or we needed it yesterday. (17:45) We got to go, go, go. (17:46) And that means just going.

(17:48) And so we’re in this kind of hustle culture. (17:51) And so the, the problem with that, but you know, when you’re leading teams and you’re leading people, they look to you for the vision, staying grounded under immense pressure of money timelines or whatever it is, the pressure is. (18:06) And so they really look to you.

(18:08) So how do founders avoid this analysis, paralysis, high pressure, you know, during these uncertain times when, you know, tomorrow’s not guaranteed if they’re going to make sales or be able to pay their payroll?

Eric

(18:26) Yeah, that’s a great question. (18:28) Today, in terms of when to push and when to pull back, I have a pretty simple rule. (18:34) I, I’d recommend it for many founders.

(18:37) Is someone going to lose a lot of money if, if we go to sleep now, right? (18:42) Like if, if it’s five o’clock, if it’s eight o’clock, if, if we stop now, is somebody going to lose a lot of money? (18:47) Is one of our clients or are we going to lose a lot of money?

(18:50) If the answer is yes, don’t stop. (18:53) Right. (18:54) Is someone going to make a lot of money if we stay awake and work through the night?

(19:00) If the answer is yes, don’t stop anything else. (19:04) Stop. (19:06) Right.

(19:06) Because the truth of the matter is, and I’ve had a million people at, at Group 8A, it’s interesting. (19:11) We hire givers, right? (19:13) We hire people that really care about other people more than they care about themselves.

(19:17) And we celebrate the fact that they do that. (19:20) We try and make them feel really comfortable here, but I have to stop them more than I have to push them. (19:25) I have more people who will work past midnight than I have people who will stop at five, no matter what.

(19:31) And especially if a client asks nicely or asks aggressively, they’ll keep working. (19:38) And so my metric for them is, you know, what’s, what’s really happening, right? (19:43) Is it, are they going to double their sales tomorrow if you work?

(19:46) If not, it’s like, there’s no point, save it for tomorrow. (19:50) And the specific thing that I try and explain to them is that their, their day is arbitrary, right? (19:56) If you’re a busy founder and entrepreneur, and you have a hundred things to do in the day, and each one takes you an hour, you’re not getting anywhere close to all the things.

(20:07) What you’re doing is you’re stopping at an arbitrary amount of to-dos. (20:11) When you hit one of two walls or both, either you’re too tired to continue, or you’ve alleviated your guilt because you’ve worked late enough. (20:20) You say, ah, one o’clock, I’m going to stop no matter what.

(20:23) Or at 2am, you’re so tired that you have to stop. (20:27) You’re nowhere close to getting all your to-dos done. (20:30) So if that’s the case, if you’re stopping at 20 to-dos, right?

(20:34) When you have a hundred, it’s like, you have to stop at 18 also, you know, it’s, it’s arbitrary. (20:39) So save something for tomorrow.

Melissa

(20:41) You know, and I love that. (20:42) I have this practice that I started mainly because I had so much in my head that when I was trying to communicate things, it was like, what is wrong with her? (20:54) She’s not even speaking in English, or I was saying words wrong or whatever.

(20:58) And so I started this practice where every day I would write in the morning, you know, three to five things I needed to accomplish. (21:07) And every day I would do this every single day. (21:10) To your point, most of those things were around, you know, moving the needle somewhere, whether it was, you know, my W2 job, my personal life, instead of 20.

(21:21) And I would be so much more productive getting the five done versus looking at the 50 things that we can all do more of something. (21:32) There’s always more to do and nothing is, you know, done. (21:35) Right.

(21:35) And so that little like trick for me really worked. (21:41) And I started layering on like a gratitude practice with that. (21:46) And it just made me zip through things so much faster, because I know when we look at, you know, all these stressful things, money, our kids, you know, payroll, the clients that are pressuring us, it’s a lot to deal with.

(22:00) But sometimes I think our brain over-dramatized it, over makes it, you know, our amygdala is in high active gear when we put it on paper and say, okay, today, I need to move money here so I can make payroll. (22:14) I need to get this project done so we can sign another client. (22:19) They’re easier to bite versus trying to bite that elephant all at one time.

(22:25) And so, you know, I want to talk a little bit about, you know, earning the right to choose again. (22:31) So sometimes, you know, things change. (22:33) There’s a turning point, you hire around your weakness, you build the systems and suddenly like everything changes.

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Eric

(23:27) Yeah, it’s happened a bunch. (23:30) And unfortunately, also with that, a lot of times that it’s happened, it’s also gone away, right? (23:34) So like, I’ll start a year and I’ll be like, now I’m finally working on the stuff that I need to work on and somebody quits or a client leaves or something like that.

(23:44) So there’s been a lot of stopping and starting with things like that. (23:49) But basically, you know, when you have a little bit of money in the bank, when things are running smoothly, when you have line item owners that are running things really well, you kind of get to take a step back and look and say, what do I want to do? (24:03) What does the business need me to do?

(24:05) And kind of try and pair those two things together and have a lot of fun with it.

Melissa

(24:10) Yeah. (24:12) It’s interesting. (24:13) I think about some entrepreneurs I’ve worked for that were so difficult to communicate.

(24:23) They had something so set in their mind and they were so, so wrong in the vision of that thing that at some point, you know, they hired me to fix the thing and then they were micromanaging the thing they hired me to fix. (24:37) So I want to talk a little bit about hiring the right person that changes everything to you. (24:44) So maybe you’re not good at sales or you’re not good at technology or whatever it is you’re not good at, you know, how does hiring the right person change everything in businesses?

Eric

(24:56) It changes everything. (24:58) It’s such an important thing to get good at. (25:01) There’s a couple of components to it.

(25:02) And we have a rather unique way of hiring here. (25:06) The first thing I would say is if you’re going to hire somebody who’s a subject matter expert, you better be prepared to trust them, right? (25:13) You’re not going to know what they’re talking about.

(25:17) So you have to have other things that qualify them that make you trust them. (25:23) You know, so if I don’t know math and I hire someone to do math for me, I’m not going to be able to figure out if they know math. (25:31) I’m going to have to ask questions around it because I don’t know the right questions to even ask.

(25:35) And so those are really tricky hires. (25:37) And I’ve actually had a business, I started a restoring class of cars and in the process of restoring cars, I hired all these mechanics and fairly mechanical cars and stuff, but I’ve never managed a shop. (25:50) I’m not a service manager.

(25:51) And so I failed miserably at hiring all these people because I didn’t ask the right questions. (25:56) I didn’t understand the right things. (25:58) I hired based on mechanical capability, not independence around mechanical capability, if that makes sense.

(26:05) And because I’m a weak service manager, I needed to hire people who are more independent. (26:10) So the way we hire at Group 8A is I actually don’t care if they have experience doing the things that conventionally we do. (26:19) So if I hire someone to do paid media, to do Facebook ads and Instagram ads, I don’t care that they have a lot of experience doing that.

(26:27) I care that they show the thought process around being able to do that and being able to make decisions that are complicated. (26:34) So I’ll ask questions relating to that. (26:36) If you break something, how would you go about fixing it?

(26:40) And then I ask generic questions and as opposed to specific questions to make sure that they have the mindset capable of fixing something that they broke. (26:50) They have the mindset capable of explaining to clients what they’re doing next and why. (26:56) And so, so much of hiring, especially outside your expertise, is about understanding the thought process that you’re going to interact with them with and making sure that they’re capable of explaining it.

(27:07) And especially if they’re the only subject matter expert that’s going to be in the business, you really need to have that language more than you need to know that they’re a great subject matter expert because you simply can’t.

Melissa

(27:18) Yeah, it’s interesting. (27:20) I think something you said I want to unpack a little more. (27:23) I think when you’re a founder and you understand who you are, I think you can then say, I need to put this list together of what I’m not good at so I can go hire this thing.

(27:33) And exactly what you said, trusting that once you hire the person to let them run and figure it out with your support and your guardrails. (27:44) But I’ve seen so many times founders hire people to do things that they’re not good at and then they micromanage the crap out of them. (27:53) They leave and then they got to start over because maybe they thought they were good at marketing and they hired a marketing person and everything they did they were questioning.

(28:02) I think to what you said, understanding what you’re good at and what you’re not and true up your edges around that. (28:11) Talking a little bit about when the thing you love changes, this is one of the twists I think a lot of people don’t talk about. (28:20) You start as a marketer, a product person, a finance person, but the business pulls you into different arenas.

(28:29) So maybe you switch to do more of other things and sometimes you end up loving those roles even more than you loved the last role. (28:37) So what surprised you about the work you eventually fell in love with? (28:42) For me, I started as a civil engineer and then I pivoted into the salesy strategy side of things, which was a huge flop for me and realized I loved sales strategy more than I loved engineering.

(28:58) So was there something like that that surprised you?

Eric

(29:02) Yeah, I’ve been through about three of those and so I started this business because I thought I can be excellent for other entrepreneurs who wanted to succeed with digital marketing and I thought I had built the better mousetrap. (29:19) I thought I had a better strategy and what I didn’t want to do is I didn’t want to do any sales. (29:24) I hated sales and so we basically started free.

(29:29) Don’t pay us any management fee, don’t pay us anything, don’t sign any contract. (29:33) If I perform, give me a percentage of the increased revenue and that worked really well for the first five years or so and the idea behind it was it’s such a no-brainer to try us that we’ll get tons of clients and we’ll never have to spend any time selling. (29:49) Well, I had to spend a ton of time selling.

(29:51) I had to ultimately do a management fee and then finally we were able to hire salespeople that were great and I didn’t have to sell. (30:00) What ended up happening then is as a business grew way past this million dollar problem, we had infrastructure issues. (30:07) It’s like I have a system and I was so hands-on with every client that we ever touched that as a system deviated, I understood exactly why but as I had operators that were good or bad operators, Group 8A ended up not being a brand.

(30:23) It ended up being and most (30:25) agencies are like this and it’s really nuts but most agencies are good and bad operators doing (30:31) whatever they want inside a loosely or completely undefined system and what I said to the team is (30:39) if Group 8A is going to be a brand, if we’re going to be an agency that’s successful, (30:43) we need to do the same thing every single time regardless of the operator and the operator’s (30:49) incapability needs to be the floor that they can’t go under that Group 8A offers this minimum (30:55) level of quality that we never go under and if we go under that, that’s a failure of the system, (31:00) not a failure of the operator. (31:02) If the operator is great, they can fly so much higher with that system in place and so I started working on a system which if you would have told my 30-year-old self that I would be kind of operating as a COO and creating systems and infrastructure and thinking about things like that, I would have told you you were out of your mind.

(31:21) I mean there’s just no way that that is the most uninteresting thing to me in the world. (31:27) In fact, I said if this business ever grew past 10 people, I would sell it for sure because I’m into chaos. (31:33) I need the chaos.

(31:35) We’re 65 people now so I blew past that number by a lot and kept going and the reason is and exactly to your point, I just fell in love with the operations, the systems, the processes, the protocols, the infrastructure that we’re building, the technology around it, all words that were like four-letter words to my 30-year-old self and I had a blast with it. (31:59) I really had a blast with it so I went from marketer to salesperson to operator and now I have the flexibility if I wanted to go back to marketer and I don’t want to. (32:09) I just love this operations role that I’m playing.

Melissa

(32:13) Yeah and I think it’s the identity shift that all founders face because who you start as in one year is not the same person you are the next year so you’re really changing all the time every year and five years later, you’re absolutely not the same person and so it’s so true. (32:33) I want to talk a little bit about the early costs or the having momentum quick, the hidden cost of that. (32:40) So when companies start gaining traction, it’s really, really exciting.

(32:45) You have more momentum but it can also drain you in ways that no one actually warned you about. (32:52) I’m thinking burnout, right? (32:53) What part of early growth took a toll on you as you started to kind of hit your stride and momentum?

Eric

(33:01) Yeah, probably the hardest part and the biggest unlock and I feel like almost every entrepreneur probably gets advice about this and nobody takes it, me included. (33:14) I literally had a great, great mentor come to me and say, nobody can do it as good as you but you got to let them do it, right? (33:24) And we all think that and we all feel that and number one, it’s not true but he knew what my fragile ego needed to hear in order for me to maybe take the advice and getting to the point where you just go a little hands-off, right?

(33:39) You just go a little hands-off. (33:41) You just stop touching and overseeing everything that everyone’s doing. (33:45) That’s where the burnout comes from, right?

(33:47) You see somebody write an email and you would write it differently and you’re worried that now it’s not going to hit the way it needs to hit and so you have a meeting with that person, you rewrite the email, you try and undo the damage that they didn’t even do but you think maybe they did. (34:00) You spend so much time micromanaging. (34:03) Before every meeting that I had with a client that had any kind of issue, I would spend hours meeting, hours meeting to find out exactly what happened and what they’re going to talk to me about.

(34:12) Now I spend no time because I just want to have a clear mind and listen to the client and I’m better at it. (34:18) Before I used to prepare to defend us. (34:21) Now I don’t want to be defensive.

(34:22) Now I just want to understand what the client’s feeling and then bring those issues back with the clarity without having to know what my team feels about it. (34:31) I want to bring those issues back and see if I could actually resolve them. (34:34) I used to want to defend myself and now I want to resolve the issue and defending myself was hours and hours of work because I needed to understand every single detail of the account and now it’s near no work and I’m doing a better job.

(34:48) That’s the biggest unlock. (34:50) Whatever amount you can let go, a little bit of things that you’re holding onto too tight, that’s where the burnout comes from. (34:58) All of a sudden a client sends an email, it’s four o’clock in the afternoon and now I’ve got four hours of prep to do for the call tomorrow and that stuff really does beat you up a lot.

(35:12) What I would say since no entrepreneur will take this advice, but I have to, you don’t understand my business is different, be a little uncomfortable. (35:21) 10%. (35:21) Give me 10% if you’re hearing this and you’re thinking that you can’t do it and your business is different, be 10% uncomfortable and see how it feels.

Melissa

(35:29) I think there’s so much growth in that. (35:31) I love being uncomfortable and switching and learning new things. (35:35) I think we grow so much in that capacity and learn so much about ourself.

(35:41) To your point at the beginning, we are stronger than we realize we are. (35:45) I want to get into the mistakes. (35:48) I think we often learn best from mistakes, making mistakes.

(35:51) I’ve made many of them in my life and I’ve learned from a lot of those mistakes, some I’ve had to make more than one time to actually learn it. (36:00) From your experience, what are the biggest mistake that founders make in the first 18 months of their business? (36:07) The patterns they repeat, the traps they fall into?

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Eric

(37:05) Probably cash and taxes, right? (37:07) You know, the biggest mistakes are usually dealing with the things that you understand the least and entrepreneurs in general aren’t running clean books. (37:15) And so many businesses end up out of business, even if they’re doing well because of cash issues.

(37:22) You know, so if you don’t time your cash right, even if you’re making money, you’re just not going to get the cash in time. (37:29) And so an investment into a good accountant or a good bookkeeper, and you can outsource this to other countries and get it for a fraction of what it used to cost. (37:40) But you got to know your numbers, and especially the timing of when the money’s coming in, because you can legitimately kill a great business in a short period of time by a simple cash mistake and just not be able to pay the bills.

Melissa

(37:57) Yeah, I love that. (37:59) I’m a such a big believer in mentors and support systems during the good times and the bad times. (38:06) And so you’ve said infrastructure, both human and operational isn’t optional.

(38:11) It’s survival. (38:13) First of all, I love that. (38:14) What do founders need to have in place to stop drowning in the early chaos?

Eric

(38:19) So the sooner you can get your first grade hire, the better off you are. (38:24) And the sooner you can fire that person that isn’t the first grade hire, the better off you are. (38:32) So probably your first hire is going to be somebody that you have a great connection with in the interview.

(38:38) That person is a great interviewer, but not necessarily a great employee. (38:44) You need a great employee. (38:45) So if you’re having great conversations, but the production isn’t there, you got to cut it quick.

(38:51) And it’s going to be really hard because you’ve never fired anyone before. (38:54) And you really get along with this person, you have a great connection with them. (38:57) You got to cut that person quick.

(39:00) You got to move on and get that right person in the door, even if you don’t have a great connection with them. (39:05) You’ve got to get somebody who’s doing the production you need. (39:09) That’s going to be the biggest unlock for your business.

(39:11) Once you get to double your time from just your time to your time plus someone else’s time, and especially if they’re a helpful opposite, if they have capabilities that you don’t have, it’s the absolute biggest unlock. (39:23) Two huge unlocks for me in my career. (39:25) I told my partner when I get a BlackBerry instead of a regular phone, I’m going to make a lot more money.

(39:30) And I did. (39:31) Being able to write emails 24 seven for me was a game changer. (39:35) And then the second unlock was when I had somebody who could project out ideas that I hadn’t actually put pen to paper and make them work made such a huge difference with what I was capable of.

(39:48) The first thing, the BlackBerry isn’t necessarily a hire, but it’s a tool that allowed me to do things that I wasn’t able to do before. (39:56) The second thing was a hire that completely dramatically changed my capabilities because it paired the things that I was good at with the things that I was bad at and gave me the ability to do both.

Melissa

(40:07) I love that. (40:09) I think it’s so true. (40:10) Being accessible is so key when doing a business.

(40:13) I was just telling this story yesterday. (40:15) It’s funny you brought that up. (40:16) Where were we back in the day without a cell phone or a phone we could email from?

(40:23) I want to talk a little bit about as a runner, I always find that when I can get into my gate and that starts to happen or the moments that it all clicks, everything just feels like lock, click, it’s in place. (40:38) I feel like that’s when everything really starts to align in our lives, the business, the teams, the founders, the partnerships. (40:45) For anyone listening today who is in the thick of entrepreneurship chaos right now, what’s the moment they can look forward to when they get that click, lock, let’s go moment?

Eric

(41:01) For me, it was the first time I took an extra paycheck. (41:06) Up until that point, I don’t know what it was, but I didn’t believe that there was money at the end of this. (41:12) I just believed that crazy hours, work forever, and eventually something will happen.

(41:18) Once I took that first paycheck and I realized the value of profitability, I started focusing on profitability and it gave me something to do. (41:27) The business got stronger every single year. (41:30) Every single year, I saw the bank account grow.

(41:32) Every single year, I saw my bank account grow. (41:36) That feeling of progression made everything different. (41:40) Then I got to choose.

(41:41) Before that, I invested anything extra. (41:44) I always invested it in the business. (41:46) I didn’t need it to be a good idea.

(41:47) I just needed to make sure I was investing in the future. (41:51) Once I started feeling what that felt like to take profit, I started deciding on good investments versus bad investments way better. (41:59) For me, what I would say is anyone who’s over $1 million, anyone who’s over $2 million, that’s enough to start thinking about profitability.

(42:07) Even if you can’t take it every month, take it sometimes. (42:10) Take it quarterly. (42:11) Take a little bit.

(42:12) Take $500. (42:13) Take something out of the business and put it in your own and start feeling what that feels like and seeing what that’s about. (42:20) Then go from there and see what you want to do next.

(42:23) It will clarify your thought around what to do with the business next.

Melissa

(42:27) Yeah, I love that. (42:28) This has been such a great conversation. (42:30) I could keep talking to you for a while.

(42:32) Now, for founders trying to make sense of the chaos that they’re living in right now, what’s one question you want them to sit with today after our conversation? (42:44) Then where can listeners connect with you to find more about your work, insights, and resources you have?

Eric

(42:53) Yeah, great question. (42:55) I would say the question to ask yourself is, do you know your numbers? (42:59) You got to really ask yourself if you understand what you spent, what you made, and what you’re projecting to spend and make.

(43:07) Do you know your numbers? (43:08) If not, what are you doing to get more clarity on your numbers? (43:11) If you want to reach out to us, group8a.com.

(43:16) We’re somewhat active on LinkedIn, either my profile, Eric Samson, or Group 8A’s business page.

Melissa

(43:24) That’s great. (43:25) Thank you so much for being here and sharing your time and knowledge with our listeners. (43:31) That’s the Executive Connect Podcast.