You’ve cornered the market and are profitable. Is it time to expand?
The thirst for more is insatiable in the entrepreneurial space. Let’s face it, if we liked safe and easy, we wouldn’t be entrepreneurs.
How does that saying go? “An entrepreneur is the crazy person who works a hundred hours a week so they don’t have to work forty for someone else.” Or something like that.
The feeling of a win or success is an addiction as real as any narcotic on the streets. And the danger, as with any addiction, is that it often leaves you wanting more of it. And what kind of “more” are we talking about? It’s terrifyingly easy to pull down the entire house of cards with a miscalculated expansion plan.
As you get more successful, more opportunity organically lands in your lap, and how enticing it is to scoop it all up. And how misguided as well. The filter for most hard decisions that come up in building a brand, business, empire, product—take your pick of term—is to always come back to your core. That’s the laser-beam focus of your soul purpose for existence. If an opportunity is not in line with that, walk away. Of course, it’s hard to walk away when you are so certain you could tackle something like a “mother,” but you have to. You need to become savvy at saying no, unless you have play money or “FU” money with which to gamble. This is one of the greatest lessons I have learned, and one that I must convey.
Not only does “no” or passing on opportunities that don’t fit your core save you time, money, and a punch to the gut, it also makes you more valuable. When you’re not available to everyone who wants you, you have a more exclusive or important place in the industry.
I had just appeared on Shark Tank in front of millions of people who knew I had scored a couple million bucks and a billionaire partner. Not exactly what I’d call discreet. It wasn’t long until calls and emails started rolling in from other businesses, entrepreneurs, filmmakers, actors, authors, you name it. I’d like to consider myself an acutely aware person with a good bullshit meter, so I discarded most of it.
However, significant contacts were coming out of it from major movie houses, entertainment companies, plus some artists, and it was exciting. Landowners and venues from around the country would call and ask us to bring one of our attractions to their land or venue, and all I wanted was for Ten Thirty One to have an attraction near every major metropolitan area in America, so I wanted to engage in all of those conversations. Forget the fact that we were in no way equipped for that kind of expansion yet, but I still couldn’t just say no, because one of the hardest parts of getting this company started was the location-scouting process. It’s long, expensive, very political, and uncertain, so having a growing database of locations coming to me was a “dreamboat” life.
Simultaneously, upcoming horror film releases were proposing projects to us that entailed giant productions that supported their movies; some filmmakers wanted us to read scripts, hoping we’d let them use our sets and attractions on off nights to help with their production. We’ve even had two of the biggest musical stars in the world ask us to create attractions for them, which we did and which they loved, but have yet to see the light of day . . . because this work is not as easy as it looks.
My head was spinning. I wanted to do it all but was also working around the clock just to keep our successful ongoing projects on track. My focus in expansion was diluting my focus on the core, which was the gold that was already growing. And in one of the instances when I have really appreciated Mark Cuban as a sounding board, I’d briefed him on all the opportunities that we had in front of us and how I wanted to do everything but had no idea how that could happen without a bigger infrastructure, and he said, “Say no. Don’t drown in opportunity!” And subsequently, he’d come to remind me of this several more times as we continued working together.
It was so simple. Often the most comforting words are. He recognized that growth doesn’t happen overnight and he wasn’t holding me to an unrealistic timeline. My issue was me.
I have an incredibly high expectation of myself. I’d even call myself my own worst enemy. My old boss at Clear Channel used to tell me that I was the easiest person to manage because he didn’t have to manage me at all; I’m harder on myself than he could ever be. When Mark threw down two million to invest in this passion project I had created, it was like a gunshot at the beginning of a race, and I put an expectation of growth on the company that was fast and unrealistic because I wanted Mark to get a return on his investment quickly. But that isn’t a smart expansion plan.
I severely restructured my strategy around our business expansion in terms of what kinds of projects I’d entertain. We wouldn’t take on any responsibility that wasn’t in the wheelhouse of the core of our work. I wasn’t even going to take calls for proposals that didn’t pass that filter because it’s too easy to get stuck in the hamster wheel on calls and emails all day if you don’t eliminate those that aren’t viable.
The focus got right back to creating live attractions in the horror space and specifically our own brands. Those flagship brands needed the complete attention of the full Ten Thirty One executive team, as well as me, so we had to first allot our time to those. We couldn’t take on anything else until they were maximized and humming.
Expansion is such a sensitive part of your growth that even when you select the right opportunities, it can still feel like you’re missing the mark. It is imperative to evaluate as you execute, on a daily basis. You need to monitor the important factors, as if looking through a microscope, so when you think you’re doing everything that feels right and it’s still not working, you can track what’s wrong.
You can take the exact same successful model that you built in Austin and do it in Houston and miss. This is when having a group of other successful builders around you as a board of directors, or just trusted colleagues, can be invaluable.
Shortly after Mark became my partner, he flew into Los Angeles and we met for lunch at his hotel. It was our first real, in-depth conversation, and we were able to feel each others’ vibes and discuss a larger direction for the company. He really liked the CEO of Live Nation and felt like we could gain from a synergistic relationship. And that became the start of one of the best things Mark ever did for us. He brought Michael Rapino and Live Nation on board. There is, arguably, not a person on the planet who understands multimarket, live-event production better than Michael. And this was where I learned another incredible philosophy of expansion as it pertained to my industry, live events.
I was coming off the heels of a New York Haunted Hayride punch in the gut. I had come to some conclusions on my own about the lackluster numbers we were pulling in NYC. The attraction was gorgeous and probably one of the most beautiful and haunting hayrides we had produced to date. Those who came loved it and had a blast. The problem was, not enough people were coming. This was our big focused expansion that had taken us six years to execute.
I sat down with Michael one December day after the season had ended and I’d had time to digest all the details. He proceeded to share a philosophy about expansion that felt as though he was telling my exact specific story . . . but it wasn’t mine. It was the story of one of the biggest festivals in the country and about half a dozen others.
The philosophy was that not only do you focus on your core product, but own your industry in your market until there isn’t anything left to land grab and find the right synergies that can still be your core.
Here’s a hypothetical example: A music festival that was making thirty million dollars in one location wanted to expand, so they brought the festival to an entirely different city using the same model. In that city, it took a twenty-six-million-dollar loss, which means as a one-city event, they were rolling in the positives to the tune of thirty million, but in the world of big-expansion fantasies, they created more work and now collectively were only four million dollars in the positive.
So the change of strategy, according to the philosophy Michael shared, could be to add a second weekend in the market that is flourishing, and when that gets maxed out, add another festival with a different genre of music, and when that maxes out, buy the land. I couldn’t be listening to something more logical.
Of course, we all know our own business the best, so take these conversations and make them relevant to your business as you know it.
So we’ve explored: first, being selective to only consider growth that fits with your core, and second, maximizing the geography in which you are the strongest before moving on to another (in our case) market location.
Third, you must scale business, which means putting a system in place to give a business the capability to thrive under an increasing workload.
The ability to scale what you’ve created is the most common struggle that I hear from entrepreneurs young and old, tenured or new, and one with which I too struggle. As you can imagine, scaling a fifteen- to thirty-acre outdoor attraction that requires hundreds of people to build and create, and runs for a month, isn’t the easiest feat in the world. Scaling is a head-scratcher for many. You can’t have super-ambitious growth without scaling your business, so you need to understand the scaling process. However, every type of business accomplishes this differently, so you’re basically on your own to create the plan—there is no map. We all have to be our own Christopher Columbus when finding the way to the elusive “scale” of our business.
In a general way, I’ve found a couple pointers that have resonated with me and I think are great jumping-off points.
The first is to create an executive team that is truly the yin and yang of the skill sets needed for the operations. The broader the base of skills you can create in the upper echelon of your organization, the better equipped the organization will be to pass down those skills to younger executives who can grow into leaders. They will then pollinate those below them and so on, and you can end up with a nicely structured group of managers who can continue to exponentially grow the grid.
The tool I’ve used the most is creating partnerships or collaborations with suppliers or vendors who can take on a large capacity for things like printing, building our wagons, tractors, waste management, and even with food vendors. Finding a partner you trust and with whom you can develop a strong relationship is like having a whole other division of your company, but one that you don’t have to manage . . . at least as actively.
Lastly, go through every action and process that occurs in your company and standardize the hell out of them. Every single process that can be standardized needs to be. It’s a hard one to peel your fingers from, and as much as we love to have a hands-on, individualized impact on as much of the machine as we can, it will limit the ultimate growth. Become comfortable with delegating, and get on board with a less hands-on approach (for the processes that can withstand it) so that the machine can be many machines. That’s the prize for putting in the time to create that kind of groundwork.
It’s a very complex educational curve indeed and, candidly, a conversation about expansion is a vast world of trip wires that could easily take up its own book, as could the topic of scaling. The best part about that is if you arrive at the need for that book, it means you’re there. It means you had an idea. It means you activated that idea and became one of the smallest percentages in our society who built the bridge between their idea and wealth. It means you walked into fear and came out on the other side, never to let it stop you again, and that, right now, you wake up in the mornings doing exactly what you want to do. It means you had the audacity to think your most extraordinary life was possible, and you got your time back.
You built your empire!
But if you aren’t there yet, and I hope the key word is “yet,” what an exciting and wide-open road you have ahead of you. Hope and promise will greet you each morning as you open your eyes and know that your dreams can be realized. It wants you just as much as you want it and you can have it. I promise.