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Are you mentally equipped to depend upon others?

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I guarantee that there comes a time when growing businesses outgrow the original span of control of the entrepreneur.  It is a critical period, and is a test of the entrepreneur’s desire and ability to delegate.

And I found from experience – after investing in many other entrepreneurial businesses over the years – that this stage typically occurs first at about twenty employees or $3 million in net revenues (or gross profit) for most any kind of company.   In future weeks, we will dissect this $3 million-dollar phenomenon separately.

But for now, let me digress to the story of my first hiring decision for my first company, years ago.  Way back then, I was managing a small and growing phonograph record manufacturing business (yes, back in original hay day of vinyl records) using independent contractors for both content and production.  I built this business through my high school and college years. Soon after graduating from college, I was making a good living and enjoying growth and freedom managing the enterprise.

It occurred to me that I had come to a fork in my career.  I could continue with the status quo, making a good living, or I could reinvest much of my profit into my first hire, an assistant that would free me from the day-to-day management tasks, allowing me to recruit more business (content) and build a real enterprise.  This was a tough decision at that time.  Comfort, or risk-it-all?

[Email readers, continue here…] On a Friday evening, I got into my car and drove from my office in the Los Angeles area all the way from Los Angeles to Ensenada, Mexico, checking into a remote beach hotel.  Early the next morning I found a large rock at the shoreline, climbed it, and sat there for hours contemplating my future. Hire for growth, or grow slowly and comfortably?  Well, the decision was what you expected.

I did hire my first employee, leveraging her organizational skills to grow quickly enough to continue hiring as growth accelerated.  The company reached over fifty employees at the point where I sold my interest and moved into the computer programming business at what turned out to be just the right time.  But I’ll not forget the overwhelming weight of that early decision, compared to the many much more expensive decisions made in subsequent years.  I was for the first-time dependent upon the work of others.  And I had made a successful hiring decision, lucky for me.

As years passed, more hiring insights became clear as I made mistakes and had successes, and watched other entrepreneurs struggle with similar choices and opportunities.  Let me share some of those insights during the coming weeks as we focus upon “depending upon others.” Stay tuned, please.

  • fred hamilton

    So “go sit on a rock” is not an insult?

    • Fred,
      “Sit on a rock in Ensenada” is a proxy for a great yoga, spa or Aspen hiking session. Very relevant with all the distractions and noise for a leader or entrepreneur…

  • Michael O'Daniel

    We all have a “hire” calling, the trick is how you respond to it.

  • Clarence Treat

    Relying on others served me well as a Fire Captain. My epiphany was not as poetic as a large rock on the seashore, but just a common sense realization.
    I didn’t have any choice as to who would be assigned to my fire crew, but I was very much in charge after that. I was lucky(?) that my ego allowed me to recognize that some of my underlings were smarter and more knowledgeable and talented than I, and I saw the advantage of tapping these resources. One of my goals was to use our daily training requirement to bring them to the level of proficiency that they could step in and take over in case another employee was disabled. Another benefit of this training was to prepare them for promotions. This worked very well.
    So, you and I both did the best we could and survived our mistakes and benefited from our good decisions. I can’t say I went from Custom Fidelity to an imminently successful venture capitalist but for a guy out of the Arkansas Ozarks, I did okay.

  • Frank Castle

    Hi Dave,

    Ah yes – Custom Fidelity – recording the Oxy Quartet events!

    All the best,


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