Welcome to In the Trenches. It’s great to have thousands of you here. My goal with this newsletter is to be all signal and no noise. To that end, make sure you let me know each week how you liked the content.

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This week I want to bring it back to some of the most popular Audience Q&A we've had over the past ~4 months since launching the newsletter. Hope these are helpful and send me your questions so I can include in future posts!

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Question #1: I have an opportunity to bring on a business partner, but I don’t want to let go of any ownership in my company. How would you decide whether to give up ownership or retain control yourself?

I’m a firm believer that there is a single universal truth when you run a company: you can solve for money or power, but you can’t solve for both.

Most people that run companies say they want money, impact and scale but in actually, a lot of them use business as their mechanism to yield power. There’s nothing inherently wrong with that to be clear. But there is a big limitation that you quickly come to realize if business is your vehicle to exert power. Scale is inversely correlated with control.

If you’re obsessed with control and power, then that will be the gating factor to how big of a business you can build.

I have a framework I like to use when helping entrepreneurs think through step function opportunities for their business - e.g. whether it’s bringing on a potential business partner, bringing in an outside investor or establishing a key partnership. Any move where you need to principally share in the economics can be directionally assessed with the same question: Do you want the whole grape or a slice of a watermelon?

To be clear, this isn’t a trick question and there isn’t a “right” answer; but it’s an incredibly revealing question.

If you decide to have the whole grape, it’s all yours. You can pluck it from the vine, fit it in your hand and pop it in your mouth. You are in control of it every step of the way. But it’s tiny. On the flipside, if you decide to have a slice of a watermelon, it’s not all yours. You will get a piece, but you need a knife and cutting board to slice it up; since you have to share it, you have to do so in a way that accommodates others as well. That said, even though you only have a piece, that piece is much bigger than the individual grape.

Whether you want the whole grape or the slice of the watermelon is a good tell on what you’re solving for in your business.

Importantly, this question is the beginning, not the end. If you do decide you want a slice of a watermelon, you’ve solved Part 1 of this question (the philosophical question on whether to share in the ownership). Part 2 (an assessment on how to share in that ownership) is a more tactical analysis (e.g. questions around ownership percentage, complementary skillsets, roles and responsibilities, incentive alignment, etc.). I’ll save Part 2 for a future post.

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Question #2: Long time reader, first time writer! All the people I’ve looked up to in my career seem to have created amazing relationships in their industry. I’m not a great people person, but I’m working on it. If you could give me advice on what to think about when developing good relationships, what would you recommend?

This is a great and super important question. Strong relationships are the unlock for any great career. I have five key principles I live by when I look to establish a strong relationship with someone. In the best relationships I’ve formed, I’ve consistently hit 4 out of 5:

1. Create opportunity: Look for ways to accelerate the other person’s trajectory - this can be an introduction to a potential partner, investor, key hire, etc. Going out of your way to create value for someone shows them you are thinking about them and care enough to put in the effort to create opportunity for them.
2. Bring consistency and intensity to the table: Keep doing #1 over and over and over again without any expectation of something in return. Consistently showing up and driving value builds strong relationship capital and a foundation of trust.
3. Give more, take less: In any strategic relationship, I try to find a way to give a little bit more to the other side. That’s not to say that you should carry the short end of the stick / do something unfair towards yourself; but similar to #2, if you give a bit more and take a bit less (and the relationship is actually worthwhile), the bit you are giving up will be made up for in relationship strength.
4. Be there to celebrate the losses: It’s really easy to celebrate the wins with someone. Be the person that is there and supportive when someone is going through a loss. Losses are embarrassing, vulnerable, and tough - the mark of a true relationship is that you’re there for someone and supporting them when it’s not easy to do so. Those are the bonds and experiences people really remember. Importantly, you don’t have to be the person someone goes to with their deepest / darkest secrets. But you should be someone that people think of / reach out to if they’re going through something and need support.
5. Be a long term, repeat player: Any worthwhile relationship will be a long standing one. This coincides with #3, but ensure you don’t focus on short term (small) wins at the expense of long term (large) wins.

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Question #3: I feel really good about my business right now. I’m doing $500k a year in revenue and operating at 50% margin. I’ve learned exactly what I need to do on growth with Facebook ads, I’m closing prospects at a high rate and we are delivering projects at strong quality. On the other hand, I’ve never been more stressed out - I know what I need to do to get to the next scale, but I feel like I don’t have enough resources or time in the day. What should I do?

There’s an endearing phrase for the phase in which a services business is clearly working, but has not quite yet taken off: the zone of suck.

There’s no two ways about it - this is the hardest zone to operate your business in. On one hand, you’ve gotten product-market fit, the business is working and you see a pathway to scale. This part is awesome. You see the light.

The problem is you’re the one doing everything right now; you’re under-resourced and anti-fragile. If the ball bounces the wrong way, it could take out your business.

You need to do 2 things at this stage. First, ask yourself what are you solving for with this business. Are you content with this business staying the same size or do you want to grow it?

Depending on the market dynamics, the answer may not be up to you - it’s very possible that the market will decide for you (e.g. if you don’t grow you will die; there are some markets that can tolerate fragmentation and others that don’t).

Let’s assume you do want to grow. After all, if you didn’t you probably wouldn’t be reading this newsletter! What’s the next step you take? It’s time to transition into building a company. You need to shift gears from being the doer to the company builder. You’re used to taking dividend checks every month from the business; for a period of time, you’re going to be reinvesting those dividend checks back into the business. A couple guiding principles as you make this transition:

1. Make incremental moves - don’t “bet the house” or ever make a move that could take you out. You want to allow yourself the breathing room to make mistakes
2. Create leverage in the parts of the business that are the lowest risk - if you’re the only one that has the capability to handle key customers right now and that is complex, that isn’t the first job for you to replace. Replace areas where someone with relatively minimal training and supervision can take on
3. Identify your zone of genius - where do you uniquely excel? Are you great at marketing/sales or are you great at delivery? Bring someone in that is complementary to your skill set so you can double down on where you are strong
4. Study the larger players in your space - look at companies that are 2 steps ahead of you. Go talk to their people and learn how they got from your size to theirs. This is the best way to internalize learnings, missteps and strategies without having to live through them on your own dime.

Momentum is everything in business. This is a tough phase in the business, but if you make it through you will have elevated from your business being a job to being a real company. Excitingly, that’s when the real fruits of your labor come to bear.

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I hope this was helpful. Make sure to send me your questions (if you have any) so I can include them in the hopper for future posts.

Until next week,

Romeen

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