This Business Myth Needs To Die | Ep 838
episodePreviously titled “This Business Myth Needs To Die | Ep 863” — renamed by the publisher on Aug 2, 2026
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What is the main business myth that needs to die?
What's going on everyone? Welcome back to our, I think six months ago, might've been the last time I did one of these, but it is a thirsty Thursday, a thirst trap Thursday, if you will. If the thirst trap is obviously my dashing good looks, but more importantly, A business concept that I feel needs talking to. And I think that I can make this relevant for just about every business owner watching this. So we have these, you know, in our advisory practice, we just started last year. We invite some business owners out every so often to come out, kind of talk about their business and then help them, you know, solve problems and get, you know, grow, hopefully. Now, I've had the same problem come up again and again and again that I felt the need to make this for you. Which is, if I hear... My business isn't scalable. Or shouldn't I switch my business to something that's more scalable? Again, I might gouge my own eyes out. But the reason that I'm so annoyed by it is that basically every business has limits to scalability.
Why do business owners think their businesses aren't scalable?
And there are different problems that occur at different times. Now, I want to talk about this within two different contexts. One is industry context. And the second is more on like the demand and supply side. But I'm going to break this down in a lot of different ways. So right off the bat, if you have a service business, for example, you hire humans to do things for other humans, then that is a business that's very easy to start, can be very profitable, and then over time can become a little bit more difficult. Not impossible, just more difficult. to scale quickly because maintaining quality of service when you have other humans doing things and you're bringing them in and they don't know anything and you have to train them becomes more challenging.
If we had kind of like the middle of the path there, you've got like an e-commerce business, which you can start relatively quickly, but as you scale up, you can scale up quickly, but some of the issues become supply chain and logistical problems, right? So I'd say that's kind of like in the middle, right? It's a little bit slower to start. It costs a little bit more money to start.
How do different business models impact scalability?
It does scale faster than traditional service does, but you're still going to run into some problems. Now, all the way on the kind of extreme side, you've got the software digital type businesses. Now, these businesses are typically, when I say digital, I mean SaaS software, not digital products like e-books and courses, things like that. These businesses cost the most amount of time to start, the most amount of money to start. But once you achieve scale, they become significantly easier relative to the others. And so I get this question of like, I don't think my business is that scalable all the time, when in reality, it's just harder to scale. And so the thing is, is that switching from one service business to another service business in terms of overall category is not likely to dramatically change your growth trajectory at all. You're still likely going to be constrained by humans, which most businesses are. I'm going to say this again. 78% of businesses in the United States are service-based businesses. This is reality.
What are the challenges of scaling service-based businesses?
And the reason that this is so annoying to me is that people will come and want to break their businesses. They won't want to abandon their businesses because they think that the woman in the red dress, they think this other new thing somehow doesn't have the same characteristics of a people-based business. Now, within that category, let's say we have a service business. You can have demand-constrained service businesses and supply-constrained service businesses. Each business has problems. And the crazy part is that the problems are actually kind of similar. So let me explain. So if you have a demand-constrained service business, so you have a brick-and-mortar fitness business, you're going to be demand-constrained.
As in, it's going to be harder to find people who want to work out than it is to find people who want to teach people to work out. Finding trainers and fitness enthusiasts, not that hard. Finding people who actually want to come in the gym and get excited and sign up for a service package or something like that, much more difficult.
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Chapters
8 chapters
1
What is the main business myth that needs to die?
0:17–1:22
2
Why do business owners think their businesses aren't scalable?
1:22–2:15
3
How do different business models impact scalability?
2:15–3:08
4
What are the challenges of scaling service-based businesses?
3:08–5:58
5
How can businesses handle supply and demand constraints?
5:58–8:31
6
Why is patience important when scaling a business?
8:31–11:45
7
What mistakes do entrepreneurs make while scaling?
11:45–16:04
8
How can understanding features and bugs help in business?
16:04–27:57