Use the Shape of Your Business to Scale | Ep 947
episodePreviously titled “Use the Shape of Your Business to Scale | Ep. 1005” — renamed by the publisher on Aug 2, 2026
Transcript
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What are the four main types of businesses?
there are only four main types of businesses. So your business is one of these four. And understanding what shape my business was has allowed me to develop a portfolio of companies that generate over $250 million a year at acquisition.com. And so if you have a business, you need to know what shape your business really is to maximize the opportunity you're in. And if you don't have a business, you should know what you're getting into so you can pick the right one for you. So let's get started with the first shape. what type of business is this business i love it if you actually think about it right now like if if there's different types of businesses what do you think this one really is this is the shape of an e-commerce business so in the very beginning you'll typically have to get some inventory especially if you want to have a bigger business no gigantic businesses or drop shipping
How can understanding your business shape maximize opportunities?
So if you want to have a bigger business like a brand, you're going to have to do some sort of inventory. You'll have to front a little bit of cash, right? But as soon as you start selling, because it doesn't require a lot of operational infrastructure, you can grow really quickly. But then you will hit these breaking points that stop your growth flat. And so either of these will be cash constraints in the business, as in like you don't have money to buy more inventory. It could be traffic constraints, like all of a sudden your ads just stop and then the ads don't perform past a certain point. It could be that you've maxed out your distribution. Let's say if your retail distribution is like, okay, we got 7,000 more 7-Elevens.
It's like, okay. And then we continue to stay at that level until we get CVSs. And then we stay at that next level. And so each of these kind of unlocks typically occur when you have a supply chain unlock, Or you have distribution that unlocks. So distribution can be literally physical retail distribution or it can be ad-based and or affiliate-based distribution. All these different ways are promoting it so it gets it in more hands. So this is why the shape of this business looks this way. And you also can get stopped by all of a sudden you run out of stuff. Right. Your supply chain dries up because your manufacturer can only do a thousand units a day and you need ten thousand units a day. And so while you find the next manufacturer, you're flat again.
Right. And this is the nature of the business that you're really in. And if you're curious, what experience do I have with e-commerce?
What are the challenges of scaling e-commerce businesses?
Well, I'll give you two. So first off, Prestige Labs was a physical products business. We sold through a brick and mortar distribution base. We also sold through an online store. So we had both those angles. I had distributors, obviously our gyms, and then also any consumers could buy directly from the store. So we had ads that were running as well. And so both those elements were e-commerce. In addition to that, the launches that we had for my last book, the world record-breaking, Guinness world record-breaking book. This is literally e-commerce. It's a physical product that gets bought through a store and then shipped out, like very straightforward. And so the reason that this video is so important before I dive into all the other four is
is that most people think that there is something inherently wrong with their business when it is in reality a feature of this business, not a bug. And so the more you can zero in on, okay, if these are the big hairy problems that exist within the shape of my business, how do I put disproportionate effort on solving these key foundational issues or problems to this model that will allow me to out-compete all the other people in my space that don't know this? And I'm telling you, like, this is the sauce. And also sometimes you'll have to switch 3PLs as you scale too. So even if you have the inventory, somebody might not be able to ship out 10,000 orders a day. Like when we did the book launch for me, I had to find 3PLs who could ship out millions in 72 hours.
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Chapters
8 chapters
1
What are the four main types of businesses?
0:01–0:49
2
How can understanding your business shape maximize opportunities?
0:49–2:10
3
What are the challenges of scaling e-commerce businesses?
2:10–7:16
4
How do cash flow and inventory management affect growth?
7:16–13:56
5
What are the pros and cons of service-based businesses?
13:56–20:41
6
How do education businesses differ in retention and scalability?
20:41–28:05
7
What are the unique challenges faced by software companies?
28:05–31:35
8
How can entrepreneurs choose the right business model for them?
31:35–1:15:52