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A CEO’s Transparent Thoughts About Scaling Revenue

Mary Grothe August 25 2021

 

Meet Host, Mary Grothe

Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue™, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.

 

Don't Have Time to Listen, Read The Full Transcription.

[Theme music plays]

Mary Grothe: Welcome to the House of Revenue™. I'm Mary Grothe, the Founder, and CEO. I love scaling companies to their first 5 million, then 10, 15, and 20. If you've reached a revenue plateau and aren't sure how to get past it, you're in the right place. Listen in as we interview CEOs and solve their most pressing revenue challenges. If you want to be on our show or want to learn more, connect with us at houseofrevenue.com.

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I can't believe we are back. I feel like I have so much to talk about. We usually take the summers off from recording with the two shows that we have. And we're back in action, kids are back in school, we are ramping up. This is Season 2 of what we used to call House of Revenue™ Radio, where we are now Revenue Radio rolls off the tongue a little bit better. I'm Mary Grothe the CEO of House of Revenue™. I have absolutely loved building this show because our other podcast was the Quota Crusher Podcast. We still are running that it's very sales focused. This show is a biased CEO for CEOs, and this is all about what's really on my heart.

Let me give you a little update on what has transpired over the last several months. When I feel a little rusty here, whoa, trying to get it together, I got to remember how to record in January of 2021. We were about 10 or 11 employees House of Revenue™. So proudly here in August of 21. We currently have 22 people, and we are onboarding five or six people in September. We are so fortunate for our own ability to scale. That's what we get to do for other companies. We find those funded startups or second-stage growth companies typically under 20 million, who have hit a revenue plateau. Regardless, those two types of companies are looking for scale. We get to do that work. It is our privilege to serve those CEOs and figure out what infrastructure they need, get the right talent in the seats, built the revenue engine, and really set them for scale. It's been some of the most exciting work I've ever been able to do in my life.

I'm so proud of my team. I'm so proud of everybody that has said yes to this and engaged in this. I love them all so much. So here we are. It's August 2021. It'll be fun. I usually don't date stamp or timestamp any of these, but this will be great. Maybe five years, I'll go back and say, "Oh, how cute. Remember when you were talking about being 22 employees?". Who knows what the future has for us - where we're going to be. As long as the client experience and our 100% success rate stay, that NorthStar, we are always about succeeding. We make sure we do whatever we need to do to make that happen. As long as we keep those as our focal point, I don't know how we're going to fail. Some things that have occurred over the last seven or eight months have stretched me tremendously as a CEO.

Today, I want to speak to our audience from this place about what does it really like to scale your company? What's it really like from the CEO's perspective? Not on the P&L, not on social media in hand on the balance sheet. What is it really like? I'm talking to you, CEO, CEO to CEO. What does this feel like? Well, one, it's scary. I'm going to tell you a story. In January, I told you we had 10 or 11 people, and by April, we had 18 people on our team. We have quarterly events. We all come together quarterly at the time. Half of our employees were in Denver, half were remote. So we flew in a lot of new team members.

Normally, quarterly events for us have always split it over two days, and the Thursday before I lead a session, it's typically 90 minutes, and I will do company updates. We talk about exciting milestones, achievements, new hires, advancement if people have been promoted, new lines of service/business, things we're working on, innovation, you name it. That's very important to us. Well, the 90 minutes that I do is really my time to stand in front of my team and to convey the vision and to create the excitement and that passion around what we're doing. Usually, through that 90 minutes, we're able to align because we are all very clear on that. Together, we are going to accomplish that vision.

So that 90 minutes on that Thursday of our quarterly, it's very important to me; I cherish it. I take a lot of responsibility because we've learned at this point, if we're not painting a clear vision for our people, they are definitely not mind readers. They're not going to figure it out. Without that clear vision, if you don't have clarity around who is doing what, where, and why, you do not have alignment. You're not going to succeed. So that's my responsibility.

So here we are in April. I already felt some unrest in me. I was not feeling 100%. I felt slightly off of my game. On Thursday, in April, I have 18 team members sitting in front of me, and I'm expected to give this speech and go through the slide deck. It was an out-of-body experience. I started to have a panic attack, which I had never had, but my heart was racing, and I felt numb. I felt like I was not in my body. I looked around the room, and I freaked out. I realized that being a CEO of a 10, or 11 employee company is far different than being a CEO of an 18-employee company. At that moment, it was revealed to me what matters the most to me as a CEO. I started to panic, and I'll tell you what happened.

Being a CEO is one of the greatest blessings. I can't believe that this was put on my path because God had for me. As a former top payroll salesperson, how I used to cry. I made so much money. I was so successful. I used to just cry at night. I would cry when I was working out, feeling that I was wasting my life - wasting my talents, my gifts. I was wasting what God had created me for. I would pray and say, "What do you have for me?" like "You didn't make me sell payroll." I always felt so lost that I didn't know what my calling was.

Finally, one day when I was brave enough to let go of the golden handcuffs of being a payroll salesperson at a top 10 rep making several $100,000 a year. I mean, I worked like 25 hours a week. Let's just be honest, I had a lot of fun, and I finally let it go. And when I gave up that career and finally said yes to God, like what do you have for me, that's when my life started. That was three and a half years ago.

I get gifted this opportunity to run a company. I've just been learning every day. I've been learning for three and a half years. Standing in front of this group, I realize that one of the greatest aspects of being a CEO is that I get to genuinely care for the people who work for me. When we were 10, or 11 employees, boy, it was a lot easier. Then what are we now, at 22? On that day in April, I was looking at 18 people. I stair-step in our growth. On our way to 22, which is what we are now. And I started to panic because I looked around the room. I saw people that were hired that I wasn't even involved in the interview process until the end. Some remote team members were hired; I had never even met them in person. I had strangers sitting in front of me.

I acknowledged at that moment that I was about to be stretched more as a CEO. And I really didn't believe that I had what it took to do it. And that moment I grieved who we used to be at 10 or 11 employees, I grieved it because I knew every one of those people, I knew what made them happy, what made them sad, where they struggled, where they excelled. I knew about their personal lives and families, their true aspirations, and what they wanted in life. And I just felt like I owed it to every single one of those people. And I still do that they've said yes to working for me. And I say yes to them, like CEOs. If you're not saying yes to the people who have said yes to you, you're totally freaking missing it. You're missing out on so much joy that you can have as a CEO.

I look at them, and I care so deeply about them. Really at 10 or 11 people is where I felt pretty stretched to be intimately involved in their work and their lives and trying to make their lives better. Like that's all that I want. I want people's lives to be better because I'm in it. And as an Executive, I have that opportunity. But with that opportunity comes a lot of responsibility. So in April, I'm sitting in front of 80 people, I don't even know, like five or six of them. I panic. I think to myself, one, this is not the same company we were three months ago, who's going to take care of these people? I don't have any more time in the day, who’s going to take care of them? Who's going to get to know them and figure out what they need? Be sure every step of the way that we're helping them excel in their careers? Why do you take on a new employee if you're not equally invested in them?

I know people don't know everything when they come to work for you? What do you put in their environment where they can learn where they can have access to resources? What kind of culture Have you cultivated with your people, where there's teamwork, camaraderie, and collaboration, like have you created all those things? That was the wake-up call for me, as I realized the type of CEO that I was. For the three years prior with a small company, I had to stretch myself, change, and evolve. I had to build the dreaded middle management layer, oh, my gosh, the wake-up call, and like, I can't take care of all these people. It was a really hard couple of weeks. For me, I was questioning if I should even keep going with the company. I even entertained selling it and just walking away. I didn't know what was next. I didn't know what to do.

But thankfully, during that time, I was able to have some really honest conversations - with myself, to a couple of leaders on my team, open up my heart to them and tell them about my biggest fears. We can't extend job offers to people if we aren't willing to do what we need to do to ensure that they are successful here. Just as the same thought that I don't want to bring on a client if we are 100% certain that we will succeed. I don't want to do it. And that's why we succeed. We have great discernment at the beginning of our business development process. And we only bring on companies that really fit our ideal client profile. And we're doing a good job with how we recruit employees. But why should we ever say yes to a new team member if we're not all in on how to take care of them and set them up for success.

I poured my heart out to our VPS and very quickly identified someone on our team who had just stepped up. This guy treats this company like it's his. He works a lot. He's selfless. He's innovative. He's a great problem solver. He's young. I mean, he's not when you look at the lineup of the people and the talent on our team. This is somebody who got an early start as an entrepreneur in college and has done just a tremendous job in this world. So we looked at him, and I knew it was the right fit. He stepped into our CEO position. For the first time, I was able to breathe. The first time in months. I could breathe because somebody had raised their hand and said that they would align on this vision and do whatever he needed to do for us to succeed. He's been our COO now for the last several months, and my life has changed.

I think our team members' lives have changed. We have infrastructure and processes internally that we never had. I have a friend. I have camaraderie. I have someone I can confide in. I have somebody that plays devil's advocate and helps me think. I have somebody that is also a visionary but a heavy integrator. So he can ideate and innovate. It's amazing what he has brought forth. I'm so thankful; what a sigh of relief finally having a COO and somebody that I could just trust. I can trust him with absolutely everything. Well, it doesn't stop there. He was stepping into that role right after that meeting in April. I knew I needed help.

Well, fast forward. That was April. It's now August, we have 22 employees. We just extended three offers, three offers accepted last week, and we'll be extending probably three more offers this coming week. So should have six more people, 28 people, in September. Now we are full steam ahead. What did I need to put in place to feel comfortable with this type of scale from a CEO's perspective? Well, first, this is amazing. This is what we do for our clients. Shockingly, this is what we do for our clients. I have never done it. I've never. I've always been a believer, you can't give what you don't have. I believe that you have through experience.

So me personally, I've never been the CEO of a scaling company until now. It's amazing to me how talented Our team is, who they've done all this before. And so it's incredible that the quality of talent, the people that we have, have skill companies before. I have never experienced being in the driver's seat. Now that I get to experience this, I'm sharing a lot of this wisdom with them to continue to bring this forward to their clients. Because our first core value is servers if we can connect with our CEOs as humans and truly understand what is happening on their journey. A lot is going to happen differently when we go to scale their companies. That's why I'm sharing a lot of this with you today.

So number one is who's going to pay for the growth. That was the biggest thing. I love making financial models. In fact, we just hired a CFO, a fractional CFO. In our meeting last week, he made me laugh like I still don't think you're ready to give up the responsibility, on the reigns, on the finances. Like at night, you're here for a very strategic different reason. We've got to ramp this up. I'm just one of those CEOs that knows every number in the business. I know profitability by team member, by the line of business, by the client. I have our pro forma, and then I have like three other spreadsheets. I have all sorts of different models that I use. I've projected out six months at any given time, so I can make very sound financial decisions for the company. And really just any decision because I can view the forecast. And that's something I've had since day one. I just can't. Yes, it's one thing to have faith, which is believing something you can't see. But it's also quite foolish to not know your numbers and not have projections.

Since day one, I've been passionate about financial models and being able to crystal clear, understanding because opinions are valuable, but data is priceless. So I've got these models, and I started modeling out what does our growth looks like? There is a difference between growth and scale. Growth is what's just a stairstep. Every time we hire somebody, we do X amount more, and our expenses ratio to the profit stays the same and all of that. Scaling is when you go for a rapid pace, like the hockey stick, where your revenue is growing independently of your expenses. You're able to bring in efficiency and lean out and eliminate any waste because you're finding, okay, let me break this down. When you go to scale, you have to have a product-market fit, and then you need to prove your go-to-market fit, then you can scale. So product-market fit is that you did whatever you needed to do, and nobody was checking profitability to win the customers.

Once you prove that you could be successful with your product or service with those customers, you realize, wait, we have to find a way to do that and get these customers and service them at a way more profitable level. We need to figure out how to do it in a more systematic approach. That's your go-to-market stage where you're figuring out what are all the way variables and components, people technology systems, the playbook that you're using that we put in place. So we can do it consistently, predictably, and you now look at the numbers and say, "Okay, now we're doing it profitably." Once you have that, then you can set for scale. So that's the stage that we were in 2018, 2019. For us was all about product-market fit, and we did not have it, and we were all over the freakin place.

Then in 2020, we established our product-market fit first half of 21. Now we have our go-to-market fit because we have figured out how to do it very profitably, consistently, and we're doing it in larger amounts. Now we're ready for scale, so hopefully, that helps break that down for you. But now that we're ready for scale, I'm in a position to say okay, now I just have to have the faith, I have to quit worrying about all the details. They say worrying is praying for the things that you don't want to happen.

It's like when you're constantly thinking about the negative, you manifest more that you create more than that if your thoughts, words, and actions were seeds that you were planting in the ground. What kind of harvest would you get? If you're thinking about negative things, you're being emotional, you're worrying, you’re overthinking. You're putting undue stress on your employees and team members. Okay, that's the crap you're putting in the ground. So you're just going to grow more of that, don't do that.

You need to focus on how you're speaking and thinking, and your actions and everything that is a seed put all the good stuff in the ground. So once I built the model, I started to notice that I was overthinking it. In fact, I had to just walk away from the model because I just couldn't get it exactly how I wanted it. It was stressing me out. Then I started over-analyzing and overthinking, and yuck, it just got yucky. I was starting to make cost-cutting decisions and getting too frugal and then not spending money where I needed to spend for growth. I was trying to get all these numbers to line up. Finally, I just heard this voice inside of me say, "knock it off. Just stop. Take a break. Don't look at the numbers for a month. You did good. You built the model. Now, why don't you just keep this momentum going? You can come back to it."

Sometimes I realize I make rules for myself. I made the rules. And I'm playing by these rules. I'm like, why? Why am I doing this? Right? I can do whatever I want. I don't report to anybody except the VEDA upstairs, like, why do I do this. I don't know if that resonates with you at all as an executive, but anywho. I just had to take a step back from the numbers. Then finally I realized, okay, now I just need to make this model. I need to start chipping away at it. I need to get the right people in the right seats. We need to bring in the right talent. We need to refine processes. We've got to keep that feedback loop open with our team members who are doing the work. What's not working? What is working? What do we need to change? It has been a real tremendous last 30 days or so just in letting our team know, this is our vision.

We've headed in this direction. We've really stepped it up with our brand and putting out into the world what we are doing and who we are. It's just incredible to see what has come from that. So, where am I now? As a CEO, my CEO mindset has shifted. I went through a panic attack in April. Then I went through this, "Oh my gosh, how are we going to afford this growth?." Over analyzing the numbers, freaking out, panicking again, over-attention to every detail, cost-cutting, and removing things that we actually need for growth and culture and to invest in our people. All that stuff. I said at the beginning, I was finding ways to reduce expenses and cut corners. I was like an idiot, do not do that.

Now that I made it through that, I realized this is the model. This is how we're going to do it. We immediately went to the market to find talent. And boy, we humbled over the last few weeks. We posted three jobs openings. With the number of candidates that we have, there is a nationwide shortage of workers right now. We had to close our job posts within just a few days of each one because we had so much qualified talent wanting to work for us. Which just baffles me for just a small company. Three to half years in, it's just the coolest thing as CEO. I guess I haven't really liked a mentally and emotionally moved past just that one day when it was just an idea to start this company. All these people who want to be a part of it, their reputation, their careers, livelihood, family, everything their network. They want to align it with this brand. That is so cool.

So here we are, the outpouring of candidates, unbelievable experience getting to interview these people. So many amazing people we met along the way. I wish I had 10 or 12 open positions for them. I will eventually, but I don't. Today is such an amazing experience. Oh, so thankful that they're going to be coming on board. We're going to have a big round of new hire onboarding. after Labor Day. I can't wait to see all these faces and sit with them and provide an onboarding experience that sets them up for success, something that we're very passionate about. The next mindset that I've shifted is how do I continue to truly love to invest in and care for everybody on our team and that it just looks different with each of them, right?

It's not like I show up like lovey-dovey. That's not saying it like that you can express and show love to people in a very different way from person to person where they feel highly valued. I just care about the outcome. Is this person happy to be here? Are they in a better place because they're here, even when we need to give constructive feedback? Do we need to help them or improve performance or redirected them if they're not approaching something in the manner that we would like? Do you know there's a loving way to do that, and you can actually be kind to honor people, be transparent with them, and really just honor them in this situation? I think they know his job and that they could not have that job if they don't perform, but how do you go about it, that you can really lead them to the next level.

I'm thankful I got to catch you all up on where we are and share some things that have been on my heart, really, now that I get to be a scaling CEO, like many of you, I'm just finding myself in such a cool spot, like I get to be on this journey with you. And I think we're going to change a little bit of the structure of this show. I know we've had so many really great interviews with CEOs, hearing their story of what they do, how they've scaled challenges they've overcome. We're still going to welcome that. We will definitely have those interviews. You can go to our houseofrevenue.com website, find the radio show, and submit if you want to be on the show. But otherwise, you're going to be hearing more from me, just CEO to CEO, on what we can do together to be remarkably successful, good to our people, and reap the benefits of that in return.

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Thanks for listening to today's episode. If you're interested in being on our show or want to learn more about how we can help you scale your company, connect with us at houseofrevenue.com or with me Mary Grothe spelled G-R-O-T-H-E on LinkedIn, Twitter, or Instagram.

Connect with House of Revenue™ on LinkedIn, Twitter, and Instagram.

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