Briefing: Lessons I Learned from Building a 100-Employee Company in My 20s

From 0 to 100 – Lessons from a Business Leader Who Built a 100-Person Strong Company in His 20s

It all started for me when I was in college.

I was but a doe-eyed youngster taking my first brave steps into an independence that would later come to define me, excited about the prospect of studying the music business in Oklahoma City. However, I had this itch. A persistent thought that was inescapable and, frankly, a thought that I welcomed:

You need to start a business.

So, I did.

Just not in the great state of Oklahoma. I chose South Texas. Think about that for a moment – the business I created was nine hours away from where I studied. Had I lost my mind? Perhaps, though whenever I feel that the creeping tendrils of madness are seeping their way into my mind, I remind myself of the words of the great American novelist Henry Miller:

Peering past the veil of madness is the specialty of those who think differently. To see what others can’t comprehend is to cast off the shackles of insanity; to become something more.

Or, in plainer terms, an idea that seems crazy on paper could be the start of something extremely special if you’re driven to succeed. I was. These are the key lessons I learned during this period in my life, not only regarding how to build a business, but how to grow it into a monolith that has at least 100 employees.

First Lesson – A New Leader Must Learn How to Sell

I was under no illusions about how difficult a task I’d placed in front of myself when I started my business while in college. This was before the days of remote work – “Zoom” was how you moved when you were late for a class – so I didn’t have the benefit of logging on to a computer or tapping away at my smartphone to run my new operation.

Being there in person was key.

So, I waited. Foolish as my new venture may have appeared, even I knew that I couldn’t start the business without being present in the location in which that business would operate. The warmness of summer came, and so too did my sojourn to southern Texas. There, I spent around three months building a business that would serve as the predecessor to the real estate businesses I operate today. The first seedling planted – the mighty oak would sprout later.

It was during these initial three months that I learned the lesson that seems so obvious, yet is one that so often goes ignored by those who wish to lead:

We so often build failure up, transforming it into the monster under the bed, watching and waiting for a leg to creep from under the covers so it can strike.

That’s not failure.

Failure is simply an inevitability of business – one you must embrace wholeheartedly in order to succeed. I’m fascinated by paradox, and it’s here where we find one of the greatest paradoxes of all. To succeed, you must first fail. To do so means you strip yourself of the fear of “looking bad,” with each failure being a lesson. Every door slammed in your face or phone hung up on us teaches us, if not how to approach a meeting with the client better next time, then at least how to steel ourselves against the sting of rejection.

I knocked on doors. I made cold calls. I did everything I would expect the sales team I didn’t yet have to do because I understood that I must first walk so they – and later, I – could run. More paradoxes made themselves known. To find acceptance, you must first embrace rejection:

Your takeaway from this first lesson is simple – get out there. As a new business leader, or perhaps even an old hand for whom growth is as elusive as a straight answer from a politician, you must become the seller to be able to train the seller.

Second Lesson – There Is Order in Building a Team

I don’t want to leave you with the impression that I spent those first three months building the business before I traveled back to Oklahoma to let it run without me. Far from it. The rest of my time in school was an essential grind. For the next year and a half, I’d finish classes on Thursday before spending the night driving to Texas.

My weekends were dedicated to building.

Friday was dedicated to clients, with Saturdays focused on training the few staff members I had. As for Sunday, that saw me back on the road, bleary-eyed yet satisfied as I headed back to Oklahoma.

It was tough.

Really tough.

However, three years of feeling like Sisyphus trying to roll a boulder uphill paid off. My rock was at the summit, with no Zeus to push it back down. It’s just that the initial summit was simply the first in an entire range of mountains which I had to push my boulder up.

Still, I was getting somewhere. At the three-year mark, I was able to hire my father away from a competitor, and he immediately set to work building my company a world-class quality control program.

Fast forward to me as a 26-year-old and I’d just hired my 400th W2 employee and I was essentially running the business from a Starbucks. Payroll, quality programs, operations. All fell under my remit for one reason – we didn’t have a management team. Sure, we had supervisors and managers, but we hadn’t built an infrastructure around them. As I looked back at the journey I’d taken, I realized that lack of infrastructure was a bump in the road that I’d somehow circumnavigated, though it was also one to which I must return.

There is a proper order in building a team, and I’d upset the apple cart. I hadn’t followed the appropriate order, though that at least taught me the simple lesson I impart to you here:

Third Lesson – Your Journey to the First 50 Employees Is One You Take Alone

Let’s rewind for a moment – back to building up to your first 50 employees.

One of the most important things you’ll learn about that journey is that it’s one you take alone:

Pure paradox.

How can one be alone when on a journey that sees them surround themselves with 50 people?

It comes down to responsibility – you have it and those 50 employees don’t, at least not to the same level. Sure, they’ll assume the responsibilities that you hand to them. Yet, if you don’t first understand what those responsibilities are yourself, along with all of the work they entail, you cannot expect an employee to understand them. They must sip from your fountain of wisdom, which you cannot allow to run dry.

A salesperson will not understand why clients will (or will not) take you on long term if you do not understand the reasons yourself. Your human resources and recruitment teams won’t know how to hire – and why candidates choose you – if you haven’t figured out what makes your business an attractive proposition.

Even as you surround yourself with water, you are still an island.

All of this returns to the idea of selling yourself. Selling your perspective. Your specialization. Your knowledge. The best investment you will ever make into your business is the time you spend learning to wield the tools of your trade.

Which brings me to my key piece of advice:

As you build toward your first 50 employees, spend half of your time in sales and half of your time in operations.

On the surface, that may appear as though I’m saying to spend four hours per day on each, allowing you to wrap the workday up with a nice little bow. That isn’t the case. As an entrepreneur, more is expected of you beyond these eight hours, to the point where I’d argue that you should not even consider starting a business if you’re not willing to commit 12 to 16 hours per day, five days per week, for at least the first decade.

The harshest truths are sometimes the kindest – yet another example of paradox – and it’s that time you spend beyond the eight “working” hours that will be among your loneliest. My Sisyphus analogy truly starts to apply here, as it may feel as though the boulder you are pushing will never reach the top of the hill. Just remember – Zeus only had the power to leave Sisyphus in a perpetual state of pushing. You, on the other hand, can and will reach the summit as long as you commit.

Fourth Lesson – Professionalization Begins at 50 Employees

It’s difficult to comprehend the thought that a business that has 50 people could somehow be “unprofessional.” Yet, in structural terms, many are. The entrepreneurs at the wheels of these businesses – myself included – are often flying by the seat of their pants. Juggling ball after ball, a clown without a circus, just trying to prevent any from falling to the ground.

As you move beyond 50 employees, you’ll build some much-needed structure, with those you bring in becoming the jugglers of the balls you can no longer handle:

For your CFO, look to the giants, or at least those who’ve reached a summit you’ve yet to reach. Ideally, they’ll have experience with companies that are two to three times the size of yours, establishing competency from the outset – a competency derived from an outside source – that allows them to immediately slot into the role.

It’s difficult to switch CFOs once you have one entrenched.

Ensure the person you hire is somebody who delivers knowledge and perspective you don’t yet have in your business. Perhaps Steven R. Covey put it best:

Your CFO is your perception changer.

As for your Chief Operating Officer, this may look like a secondary type of position within your business. The broker of record in a brokerage firm or the managing director of a law firm, for instance. Your choice must have the clout and title that enables them to effectuate the strategy you’ve developed within your organization, allowing you to focus on building systems and processes.

These people serve as the bridge between the outside of your organization and the inside of your organization.

Fifth Lesson – Insource the Competency and Outsource the Monotony

Whenever I consider this lesson, I’m reminded of something the great economist Thomas Sowell once said:

I soon discovered the truth of those words right around the point where my company had 400 employees. The tendrils of government ensnared my business with a penalty that stopped me in my tracks:

Any company with over 50 employees would be forced to buy healthcare insurance for all 50.

That’s why I call a company’s 51st employee the “$600,000 employee,” as getting to that point is going to cost your organization around $600,000 annually. For most, that will be untenable and unsustainable financially, which brings me to the lesson stated above. Focus on insourcing the competency and outsourcing the monotony.

That’s the approach I took to reduce a 400-strong company to 100 employees. Then, down to 50 and, eventually sub-50.

You’ll discover that this leads to simplicity of life and simplicity of management. As somebody who has managed organizations from the very small – sub-50 employees – to the extremely large – organizations with over 2,000 employees – I also have a secret to share.

If you’ve outsourced correctly while building the appropriate processes, there is minimal difference between the profitability of a company with 50 people and one with 1,000. All you’re doing at the 1,000-person mark is creating more headaches for yourself.

Sixth Lesson – High Caliber (And a Lot Of it)

Let’s build on this concept of insourcing competency for a moment.

Your task as you climb toward the 50-employee mark – and even if you wish to go as high as 100 employees – is to get ahead of where you want to be and think about what your model will look like. That concept may seem to conflict with the natural order of business. How can you build what does not yet exist?

The answer lies in the caliber of the people you insource.

As you bring in those competent people from whom you can extract the wisdom you need to build your business, you’ll find yourself in a bridge period. I referred to this earlier when speaking about your CFO and similar executives – they become the bridge between the internal and external aspects of your company. That doesn’t solely apply to your clients. It’s across that bridge that the people to whom you outsource the monotony must traverse to understand what you require from them.

The bridge cannot falter or collapse.

As you build, you must think about two things:

Branding and marketing.

My experience taught me there are two ways to think about these concepts.

The first is to use your brand – ideally, a strong one that evokes strength and confidence – as the foundation of your bridge. Those who have brands that are commodities may find this more difficult because they have to work much harder to stand out. You’ll have to build larger – a Golden Gate Bridge while others simply create a fjord to pass a river.

It’s doable, as long as you have competent builders.

The second is the systemization of your marketing.

Place the focus here and you give your people, internal and external, the impetus to grow revenue. That’s the secret sauce. Revenue is what it takes to acquire, and it’s what the operations of your business require. The bridge concept comes into play here. Those you insource – your high-caliber people – build the marketing systems that those you outsource to must understand in order to create a pathway for your customers to follow.

Seventh Lesson – The Secret to Hiring the Best Team Members Possible

Those words come from the great Albert Einstein, and they are the secret to your hiring process just as they are the secret to unlocking the mysteries of the universe. The past is often seen as something to escape. A specter threatening to engulf us in its shadow, forcing us to march ever onward to escape its cold embrace. However, I’ve found that it is only in yesterday that we can find those capable of making today better and tomorrow beautiful.

Which brings me to interviewing team members.

Whenever you interview any potential employee – and particularly those who will become part of your high-caliber insourced team – I have a simple rule. Always ask questions about their past and, within their answers, seek a singular characteristic:

Proactive engagement.

Though I’m not typically one for business buzzwords like “proactive,” its relevance here is absolute. Proactive engagement is the one indicator, far above any other, that informs you of whether a person can be self-managed or if they’ll require the form of constant management that devours your energy and eats away at your organization’s resources.

A corporate clairvoyant, in a sense, who shares your capability for looking beyond what lies immediately in front of them and toward the obstacles that will appear in time. Yet, it is not enough to simply be able to identify those obstacles. That’s only one part of the equation. The person you hire must be willing to grasp the reins of responsibility and confront the obstacles they identify.

The people that you hire become the people that you build.

If one of those people turns out not to be a great cultural fit for your business, the materials you use to build them only go to waste. In that situation, I always borrow a phrase from Dave Ramsey:

Apply this whenever you find yourself with somebody within your business that fails to align with your culture. This isn’t to say that you must not love and take care of your people. Treat them as an extended family, one with which you build the trust and generosity with which you hope they’ll treat one another.

But always remember that the “black sheep” of that family is not somebody you can tolerate when building a 100 employee organization. 

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