It happens to the best of us…
You’re running your business as usual, but suddenly the tactics you normally use aren’t pulling in the results they used to.
Growth stagnates, and then suddenly you realize…you’re stuck..
It’s frustrating. Nothing’s changed, and yet everything has.
If you feel like your business just isn’t growing like it used to, here’s the good news:
You’re not alone, and there is a way out.
This stagnation is just a natural part of the lifecycle of a business. No matter which category you’re in or who you serve, every business hits the same plateau.
No one knows this better than Ryan Deiss, Richard Lindner, and Roland Fraiser. Collectively, these 3 entrepreneurs have founded, acquired, and scaled more than 13 businesses. And in every business, they’ve experienced the same S-shaped growth.
But they’re not the only ones. Richard Foster, Clayton Christianson, and many other business experts have talked about the S-shaped nature of business growth and scale. Unfortunately, unless you majored in business in college, you probably missed the memo!
Luckily, Ryan Deiss explained the phenomenon, which he calls the Scalable Lifecycle, at T&C 2020.
In this post, we’ll break down his talk, and explain 4 phases of growth (or decay) that make up The Scalable Lifecycle. We’ll also share a simple quiz you can take to find out which zone you’re in. It’s like a personality quiz, but for your business…
What is The Scalable Lifecycle?
In Ryan’s T&C talk, he submits that “The secret to success in business is learning how to survive, and push past the flattening in the S-curve.”
So, what’s an S-curve?
S-curves aren’t anything new. They can be found in mathematics, economics, and even in nature.
These curves often represent a relationship between something and time. It starts with a rapid increase, then slows, before eventually pushing past the plateau to increase again.
In Ryan’s application, he says
“In business, our recurrent theme… is the S-curve.”
He goes on to show that the collective experiences entrepreneurs go through when starting and scaling a company can be represented with that same S-curve.
And so, The Scalable Lifecycle was born!
But the Scalable Lifecycle isn’t just a chart with a line.
Ryan went on to explain 4 distinct phases of growth (or decay) that every leader will pass through over the course of leading a business.
Here’s what he had to say…
4 Phases of Business Growth (or Decay)
Phase 1: The Launch Zone
The Launch Zone is the first phase of business development.
In this zone, you focused on one thing, and one thing only: Traction.
As Ryan says:
“You’re just thinking… If I could just sell to someone who isn’t my mom or my college roommate, then I might have something!”
Unfortunately, the vast majority of businesses owners never make it past this first stage. You may have a great business idea, but through a lack of execution, missing the market, or simply not knowing how to market, you fall short.
You’ll know you’re in the Launch Zone if you’re:
- Focused on launching your first product,
- Hustling to make your first sales, or
- Dealing with lots of trial and error.
This phase is difficult and painful, but incredibly exciting!
Phase 2: The Growth Zone
The next phase Ryan talks about is The Growth Zone.
This phase is all about Momentum, where you start building on the traction gained in phase 1.
You’ll know you’re in The Growth Zone if..
- You’re small, but profitable,
- Sales are more predictable,
- You feel like your systems are held together by duct tape and bubble gum, and
- There’s high moral within your (typically) small team
Ryan describes this phase as hectic, but super fun.
More importantly, he says it’s at this point where you start to think about scaling.
You might hear yourself saying things like “We need some professional managers in here...” or “Let’s start investing in some enterprise solutions for our tech stack,” or even “hey, why not get a bigger office space?!”
You’re excited about the future, and finally starting to feel like a “real business.”
Unfortunately, this is usually right about the time when things start to slow…
Phase 3: The Constraint Zone
The Constraint Zone is often called “no-man’s land” or “the messy middle.”
Ryan calls it “The Flatline.”
It’s where the life of your business and your growth seems to plateau. All the excitement dies down, and you begin to experience all the things business owners don’t talk about…
You’ll usually know right away if your in The Constraint Zone:
- Your expenses are up,
- Your sales are flat (or down,)
- Your bank balances seem to be shrinking,
- Deadlines start to slip, and morale seems to be at an all time low.
The Constraint Zone is where you feel stuck, burnt out, and ready to quit.
This is what Ryan calls “the moment of inflection.” It’s where you have to make a critical decision that will change your business for better, or worse.
You have 3 choices: denial, retreat, or scale.
Denial: Home Of The Pivot and Death Zones
If you choose denial, you’re headed for the death spiral.
First you’ll hit The Pivot Zone. This is where your business starts to slow.
You’ll fall into the trap of using the same old tactics, regardless of the outcome. Ryan dictates this stage as filled with “Legacy,” but not in a good way.
You’re doing things because that’s how it’s always been done, not because it’s what’s best for the business. Worst of all, you get complacent with poor results.
Keep at it, and you’ll hit The Death Zone, aka the end of your business.
Surprisingly, a lot of businesses end up here, and usually it’s not on purpose.
Retreat: Move Back into Growth
The second option is retreat.
Retreat means moving back to the Growth Zone. You may:
- Fire whole teams,
- Scrap entire product lines, or even
- Seeding whole markets to the competition.
It sounds bad, but Ryan says that it’s often the best course of action, strategically.
If you can’t salvage a situation, retreat is the best option.
You might also retreat if you want to optimize personal leisure over impact. In other words, you want to keep your business small so that you don’t have to work too hard to keep it going.
This is a perfectly fine choice, but you should make it deliberately; ideally, before you hire a huge team.
However, if you want to make a big impact, you have to choose to scale.
Phase 4: Make an Impact in The Scalable Zone
Your third and final option is to Scale.
But fair warning: Scale = Change.
The only way you can get to The Scalable Zone is if you’re willing to make some big changes.
Ryan emphasizes that the tactics and strategies you used in the Growth and Constraint Zones will NOT help you scale.
“The greatest predictor of a company’s ability to SCALE, is the leader’s willingness to ADAPT.”
If you can adapt, you can scale.
So how do you know what Zone you’re in, and if you’re ready to scale?
Take the ScaleABILITY Quiz
We’ve put together a quiz to help you identify which stage you’re in.
You’ll be asked 20 short questions based on the 8 domains of scale-ABILITY. When you’re finished, you’ll be given your “ScaleABILITY Score” and a plan for identifying and eliminating the constraints that are holding your business back.
You can get your ScalABILITY Score here.