The Brain-Money Balance
Ian Lurie Jan 6 2012
If I look at Portent’s growth over the last 16 years, we’ve had what my COO calls the Graph of Shame:
Some of that might be due to economic poop hitting the fan. And some of it is natural turnover. But the Graph of Shame is a dead giveaway that a business isn’t scaling as it should.
It’s not all doom and gloom
There are plenty of times we’ve avoided the grrrrr moments and the Graph.
Those times tend to be driven by new Portent-ites, not new clients. I love getting new clients, of course. But without great new talent here at Portent, we can’t keep those new clients happy, and they leave.
Why? I have a theory I’m going to call The Brain-Money Balance, which states:
Businesses grow in steps defined by talent, not fat contracts.
In an internet marketing agency, money follows talent. The reverse isn’t always true. So winning business in the hopes that you can then get the talent may lead to a cycle like this:
- Win big new contract.
- Get drunk.
- Sober up.
- Get to work.
- Get overwhelmed.
- Stop business development.
- Hire new people.
- Contract ends.
- Empty sales pipeline means zero new business.
- Business shrinks again.
- Get drunk.
- Sober up.
- Repeat until vomit
The Graph. Of. Shame.
If you have the team, though, then that great new client gets the star treatment from your team, not from you. And that means you have time to continue doing the things that help your company scale and win new accounts.
Services versus product companies
Before you all start writing ranty comments about startups and 2 guys in a garage: This brain-money balance is at its strongest in services-driven companies. That’s because you have no lead time, probably no investors, and no way to ‘pad’ demand while you go looking for geniuses.
That said, an awful lot of great product companies with great ideas have died because they couldn’t scale beyond their founders. I’ve seen it happen myself: The founder gets a bunch of money, hires a bunch of mediocre talent, does nothing to vet that talent, and within a year the company craters.
These companies didn’t fail for lack of great ideas. They failed because the people at the top neglected talent, or tolerated sub-par performance from their team.
Feed your company a balanced diet
You have to respect the brain-money balance. That’s the key to a scalable company. It’s part of the reason I brought on a partner, too: Steve frees me up to spend a lot more time working with the team and keeping us kicking ass.
So, feed your company a balanced diet: Smarts and money. Growth will follow.
CEO & Founder
Ian Lurie is CEO and founder of Portent Inc. He’s recorded training for Lynda.com, writes regularly for the Portent Blog and has been published on AllThingsD, Forbes.com and TechCrunch.
Ian speaks at conferences around the world, including SearchLove, MozCon, SIC and ad:Tech. Follow him on Twitter at portentint. He also just published a book about strategy for services businesses: One Trick Ponies Get Shot, available on Kindle.