How to Build a Company Structure to Scale a Business

Intro (00:09):
Welcome to innovations and breakthroughs with your host Rich Goldstein, talking about the evolutionary, the revolutionary, the inspiration and the perspiration and those aha moments that change everything. And now here’s your host, Rich Goldstein.

Rich (00:33):
Rich Goldstein here, host of the innovations and breakthroughs podcast, where I featured top leaders and the path they took to create change past guests include Kevin King. Ricks is Ari and Brandon Young. This episode is brought to you by my company, Goldstein patent law, where we help you to protect your ideas and products we’ve advised and obtained patents for thousands of companies over the past 27 years. So if you’re a company that has software, a product or a design, you want protected go to Goldstein patent law.com, where there are amazing free resources for learning about the patent process. And you can email my team@welcomeatgoldsteinpc.com to explore if it’s a match to work together. You could also check out the book I wrote for the American bar association that explains in plain English, how patents work it’s called the ABA consumer guide to obtaining a patent. I have with me here today, Yoni Kozminskii Yoni.

Rich (01:22):
He spent a decade in digital marketing and in creative advertising globally, including in places like Australia, Los Angeles, and Televiv, uh, in doing so. He developed digital strategies for the likes of Mercedes-Benz, um, MasterCard, Sony, Medtronic, and also many eight figure e-commerce brands. Uh, in particular in 2018, Yoni expanded an e-commerce Amazon business from two to 5 million in just 12 months, and then it was sold. Uh, and as this expansion success was based on his ability to create, uh, to create a process improvement and a team of incredibly talented individuals. The next step was to create his current companies, multiply me and a scholar. These new companies help other entrepreneurs to grow their teams and create efficient processes to scale their businesses. It’s really my pleasure to welcome here today. Yoni Kozminski welcome Yoni.

Yoni (02:16):
Rich. It’s an absolute honor to be here. Thanks for having me.

Rich (02:20):
Yeah, absolutely. So, yeah, let’s talk a little bit about background. So, um, so clearly, um, of the, um, Australia, Los Angeles and Tel-Aviv Tel-Aviv you started out in Australia, right. And so, um, tell me a bit about your background, like how to, um, how you grew up and got educated and then out into the world doing digital marketing.

Yoni (02:40):
Yeah. So I actually, uh, I studied and I grew up in Australia and, uh, actually I started studying architecture of all things. Uh, they have a, a routine that they do the first day intake of architect. They look left, look right. Only one of you are gonna make it through. And you know, you look at each other, all three, you, it’s not going to be me. And I pretty quickly became another statistic. So about a year and a half in, I dropped out of architecture, ended up, uh, ended up finding my way into marketing and that was sort of the start of my career. So yeah. Um, sort of digital native, so to speak in terms of the evolution, I grew up in a time where I was working with, um, with Mercedes-Benz actually to work with the legal teams in figuring out whether or not you could actually be posting as a brand on Facebook. So launch them on Facebook and Instagram and YouTube and Pinterest and all the platforms that was sort of that era.

Rich (03:39):
Hmm. Interesting. Um, and you know, I’m curious something, maybe, maybe a question you haven’t gotten before, but, um, uh, like what is it about architecture that relates to what you’re doing now? Like there was something about it that kind of, um, um, attracted you to initially consider studying that there there’s something about it. That that also probably is part of what you do now. So it might that be, so you’re

Yoni (04:04):
Right. I’ve never been asked that question before and I’ll, I’ll go one step further and I’ve never thought about an answer to a question like that. But if, if I had to think about that, honestly, I mean, I’m someone who loves to create, uh, I’ve always had sort of a KPI for design and, you know, I also love interior design. I love that stuff. Um, and so I would say that something probably to do with that creative process and the creation and that sort of fluidity of, I mean, it’s also very structured when you, when you actually get into the thick of things around architecture, you know, when it, when you’re talking about the composite material, like everything has to work in perfect harmony, you’re building, you know, in ways sort of systems as well, but creatively. So maybe that’s the connection. Yeah,

Rich (04:53):
It sounds, I mean, it sounds like, uh, like a real connection there where, um, there’s a way in which you have to organize things. Um, I mean, first of all, be creative and then organize things, um, in, in a way that they work together well, which is kind of like the stuff that you’ve been doing through your whole career, including now. And, um, I mean, maybe like that wasn’t the right expression of all of those skills and all of that kind of, um, desire of how you like to arrange the world. Um, but like, it, it seems like the DNA of that is similar to the DNA of what you do now today. And, uh, uh, so like, let’s talk about that. Let’s talk about kind of like organizing things and like maybe, um, let’s focus on the intermediate step there of digital marketing. So kind of like how you, you took that kind of knack or that kind of intuition and brought it into digital marketing.

Yoni (05:48):
Yeah. Um, so again, I’m loving it because it’s a series of questions that I’m, you know, you’re not asking the, the standard things and that’s what makes for really interesting. So, um, what did that, how did that bring into, you know, my, my expansion into digital marketing, I’m not sure that I could attribute too much of the, so the architecture and the creativity necessarily, but now that I’m sitting here saying it out loud, I think to myself, well, I particularly gravitated toward, uh, early days, Facebook, media buying. Um, you know, I probably spent in my career across campaigns with clients probably somewhere in the vicinity of $20 million. And I loved Facebook advertising because it’s not just baseline PPC, where you do your keyword research, you understand what you’re looking to target, and it’s, it’s very, it’s highly technical and it’s very analytical from a numbers basis.

Yoni (06:41):
Whereas Facebook, it’s a whole different equation. You know, you have the creative presence you have to think about really well, what, what am I trying to do here? I’m trying to catch, uh, I share not just from other brands, but from other people, people that they’re friends with and close to, you know, I have to create something that is going to be exactly what they needed at that moment in time and convert that, or, or, or change that into what I’m trying to send as a brand message and then convert them as a, you know, an acquire or a customer or, you know, whatever are, um, business DNA is. So, yeah, I would say that there was probably aspects of that creativity. And I think maybe just throughout the journey, you know, that, that ability and that desire and the combination of those experiences sort of push you to want to create bigger, solve, bigger solutions, create larger things. And that’s probably how maybe, uh, I don’t know if I’d be the classical entrepreneur, but when I look at my journey, you know, it was probably, I was nearly 30 when I started my first business. So, you know, it was all part of the learning experience.

Rich (07:50):
Yeah, no, absolutely. And, um, uh, you know, and so like those lessons in particular then became part of, of what you did with scaling other businesses. Like you started to work on scaling other businesses, um, and, uh, improving their processes. Um, and so like you were working on an e-commerce business in particular that you had some, some, some great success with, so like, let’s talk about that. And like in like what, um, you know, what, what types of things you learned and that you did to help move that along?

Yoni (08:26):
Yeah. Um, well, I’ll start off by saying what I thought I was walking into and what I was trying to create turned out to be an altogether different thing. And what I mean by that is when I was brought into this business, they would win 2 million, um, you know, uh, annual revenue. And they were effectively three guys running around trying to do absolutely everything right. And it’s sort of been stuck at this $2 million mark. And what I did was what very natural to me after 10 years in agency land was all right. Well, we have all of these very, in my mind, very clear, clearly defined skillsets. We need a graphic designer, maybe a creative director. We need specialized custom support personnel. We need to bring in an ops manager, we need project managers, we need copywriters. So I effectively built out infrastructure in the Philippines that would rival talent.

Yoni (09:19):
I would argue way globally in terms of the output that we were experiencing. And so, you know, the question is, and what we did there and what we set out to achieve for the businesses we work with is I think a really simple way of breaking it down is let’s say you’re an Amazon seller. You have 50 skews, and you’ll typically have that the top three skews, maybe five of the best sellers and the other 45 will be trailing somewhere typically significantly below for businesses at that size. And that’s because there’s no demand planning, resource allocation, specialized roles. People are sort of still trying to handle as much as they physically can. And they realize that I just ended up working 60, 70, 80 hours a week. And I can never sort of get over that sense of working so deep inside of my business. There’s no longer anything strategic. So I guess how that was achieved was growing up into agencies. I was the 10th employee. We grew to 35. I was the 15th. We grew to 40, you know, I sort of went through those different levels of no management, middle management, you know, how to build out those structures and those teams, the right way to support, you know, e-commerce business. If you’ve got agency experience, you’re pretty perfect to step into, uh, an Amazon business or an e-commerce business.

Rich (10:37):
Yeah. So, um, so you, you, I guess spotted a lot of ways in which, um, they were operating inefficiently because it wasn’t divided into, um, strategic, uh, into roles. Um, and the, um, in well, clearly defined roles and then people that are appropriate for those roles, you just had a bunch of people, each trying to do whatever they could, as much as they could. Uh, and, and so I guess one of the things is that’s not scalable, right? I mean, you can’t, you can scale like, well, we’re each working on as much as we can. Um, so, so then something had to happen in order to then organize it right in the way that that could be scaled.

Yoni (11:19):
Yeah. Yeah, exactly. So, I mean, you know, a baseline thing to consider is building out an actual org chart and a chain of command and accountabilities and responsibilities for each of the roles. Once everyone understands what is the start and end point of their accountability and responsibility, you stop having those experiences where things just continue to fall, fall through the cracks, and you can’t quite muster up everything that you’d like to, and things go on miss. I mean, it really, when you start that’s the baseline, and then you start to build in the actual, you know, SOP training videos, documentation, how to perform these very much repeatable tasks by anyone so that you no longer rely on a specific linchpin. And if they left my business, then all of a sudden, you know, I’m totally screwed.

Rich (12:07):
Yeah. Right. Exactly. So, so I guess the same could be said about, um, you know, about then how you staff people, once you have the, the, the processes set up, then you want to begin to recruit people, correct?

Yoni (12:22):
Yeah, absolutely. Absolutely. I’d say you can even do it invertedly and look to hire the managers that will help actually build out the process as CSUN professionals. One of the approaches I like to take is, you know, you always hire the manager first so that they can build out their team and be there, you know, to still Amazon’s terminology, to be a separable single thread later of that specific, um, function.

Rich (12:48):
Okay. Awesome. Um, and so then now tell me about what you’re doing now with regard to helping other businesses with this. So you’ve created these two companies, so just tell me a bit about them and what they do.

Yoni (13:01):
Yeah. So, so the two companies are separate but related. I would say if you look to put us under an umbrella, multiply me in a scholar, serve to enable business owners to work on their business, not in it. And so with multiply me where an end to end executive search and HR function into the Philippines, where we effectively hold your hand every step of the way when you go down that journey. So from helping build out the job description and giving you insights as to what actually goes into a job description, why am I creating this work, this role, you know, what’s the value in it and helping make those decisions all the way through to educating you on interview techniques on what’s the best way to ask behavioral questions or example questions where we’re looking to help make everyone better interviewers and, you know, hiring managers themselves so that when they do get to the, sometimes we’ll go through a hundred plus, um, talent just to submit a top three.

Yoni (13:58):
For example, when one of our head hunters are actually dedicated to the role, um, our objective is how do we, how do we take you along this journey? So you hire someone that’s actually going to stick around, not just because we presented them to you. So there’s a lot of that. And then where we get to is we also handle the ongoing HR and performance management. So the objective for us really is how do we help create that cohesive working ongoing relationship with a dispersed team? So that’s the, that’s the multiply may equation. And, and on the other side, we have a Scala, which is a management consultancy focused on process improvement, really specialized in the e-commerce and Amazon niche. So we’ve worked with over 50 Amazon and e-commerce businesses doing between about two and 75 million in revenue. And what, what they actually have us do is we come in and we assess the current.

Yoni (14:51):
So we deploy two consultants before we even get into the doing of work. We get on a discovery call, we get to understand, well, what are the, what are the baseline problems that we’re trying to solve for, to help create efficiencies? And as we like to define it, build systems for your business. So the way we look at it is how systemized is your business based on people, process and technology. So we’ll assess and we’ll figure out what’s happening in the business. And then we’ll build, um, process flows of the sub-processes processes and corporate as groups, and really understand what’s happening and provide feedback and actually build out a future state of how do we create efficiencies? What’s the right DNA. The team will build out the SAP training, videos and documentation. We effectively help commit businesses to, uh, you know, an actual physical operation and creating their business operating system.

Rich (15:42):
Hmm. So w w what are some of the aspects of that, of like, what you do that you think, um, most entrepreneurs don’t do in, in, in scaling their businesses and in, um, in optimizing their processes and, and granted, I mean, it’s, it’s not like they will absolutely master it by, by doing a, B and C, right? Like there’s a whole lot of, uh, kind of like skill and technique that goes into what you do, but I’m wondering, like, what are some things that would give them some quick wins, um, you know, in, in that realm?

Yoni (16:18):
Yeah. Quick wins. So I would say that most entrepreneurs are not heavily aligned with building process and systems, you know, it’s very much, um, and I, and I fall under that category too. Honestly, I saw it as a weakness of mine and something that I wanted so badly that when I found the right team members to bring in, we built a company on the back of it to solve really that problem. Like if you look at the, the larger equation, multiply me where we’re effectively prime to be an incubator. For example, we can staff companies that need talent, and we can also build the operational infrastructure to enable it for scale. So when you put them together, we can really build companies. So, um, some quick wins that you can get on the board is I would say, like the first, the first and most important step for any entrepreneur going through this journey is awareness.

Yoni (17:11):
You have to understand where you sit on the scale of how deep in your business you are or whether you’re actually working on it. And you’re doing the things that are going to have the most impact. So there is a, I don’t know if you’d call it a game, maybe I’m just sick. And I love this stuff that, um, but I like to suggest to people that they actually break down what they do in a week and label them a one, if it’s a task that really doesn’t need to involve them, you know, for an Amazon seller downloading the seller central report daily and putting it into a pivot table to understand movement like that could be anyone in the business with a very basic input. And that would save you whatever, 15, 30 minutes an hour, but that’s an hour that you’re not getting back.

Yoni (17:59):
So I would say that would be a one, whereas a five is we were going to launch a new product. Uh, these are the three options. These are the details around the manufacturer and the supply chain and logistics aspects of it. This is the freight forwarder, you know, all the details, and that’s going to have to be you, your, your likely, if you’re the owner and you’re not working in a large corporation, you’re probably going to have to make that decision unless you’ve hired intelligently, you brought on someone to handle that, that function. So I would say that if you go down that, and you start to understand where you sit on that scale of how many things can be delegated, then you can start to actually build out, you know, you can go the approach of just, you know, getting rid of the lowest hanging fruit and freeing up 20%, 30% of your time.

Rich (18:44):
Yeah, absolutely. So then, then as you said, awareness is that first step, because it seems like what you need to do is figure out just how far off you are. I mean, and it could be, um, really stunning to see just how much stuff that, that you do that doesn’t need to be you. And then that’s really, I guess, the impetus for, for growing a team for, for, for having some other people on board to help. Um, and, uh, uh, you know, and I guess it’s also the beginning of the roadmap of then how you begin to divide it. Correct.

Yoni (19:16):
Yeah. I would say also a great litmus test for where you sit is, you know, fast, the question to rich. If you were to walk away from your operation today, abruptly, you decided you wanted to go on holidays. How long could you be away on holidays for before someone needed you? And it was, it was critical.

Rich (19:39):
Yeah. Um, so like if, uh, you know, it’s, it’s very interesting though. I mean, I guess that if you could, um, I’m the ideal answer is that it should be a long time because then you have, uh, a business that’s running well, right? Yeah,

Yoni (19:55):
Yeah, yeah. So, so to, to give you sort of the insights, like, if, if it’s anything less than a week, then you should probably start to consider like, okay, what are some of these processes that I can build in my business that’ll maintain without me. So, you know, maybe you weren’t, let’s say you’re in the sales seat and it’s a very direct to consumer sales process. Like, let’s just say, take me for example, you know, if I’m not, you know, having and making relationships and, you know, I guess, like we get a lot of referrals from the good work historically, but a big part of it is that, so if I walk away from that function, maybe we don’t grow as quickly, but the business is going to run just fine. A run for, you know, I don’t know about perpetuity, but definitely for two weeks, three weeks a month.

Rich (20:40):
Sure. Yeah, no, got it. Um, it’s interesting though. It could also point toward just being a bit of a micromanager, right? So like, it could point to, I mean, if you could honestly assess how much time the business really could operate without you, then that’s one thing. But I think a lot of times though, it’s, um, you know, part of what’s going to lead a person that comes to a conclusion about that question is whether they are, um, micro-managing, which I guess is the flip side of just like, not trusting, like they’re not able to trust their team. It might be possible for that team to truly operate without them for two weeks. But, um, you know, th their, their sense is that they have to check in every single day. Right. So part of it is awareness, right? So you said first step is awareness. I think that’s another level of awareness too, is like, um, you know, how you, how you operate as, as a leader.

Yoni (21:40):
So there’s, there’s a great book about this sort of subject it’s called multipliers. It’s by Liz Wiseman, and it’s how the best leaders make those around them smarter. And it’s a study on what she defines as multipliers people that have multiplying qualities and can get the most out of their team members of their employees and diminishes people who, who really stifled the output. And so you can actually learn a lot of how do I, do I have these diminishing traits and can I be a better manager, not micromanager, and actually have them reach these stretch goals and really realize that potential.

Rich (22:18):
Got it. Okay. Cool. Now on the other side, too, like on the, um, on the, um, um, multiply me side of things, right. Um, so if you would, if you were talking to an entrepreneur that wanted to grow their business and grow their team, um, like they wanted to recruit people, uh, so on the people side of things, like what, what do you think is like a, a quick win or like a, like a, uh, kind of like a golden nugget of, of what would help someone with, um, beginning to recruitment?

Yoni (22:49):
Yeah. Geez. I wish we had, uh, 20 minutes for this, the answer I would say to keep it really brief. I would say a few things. If you’re an Amazon business right now, um, there is massive talent scarcity globally. So the prices that you were paying last year, particularly in the U S they’ve gone up significantly there, you know, they’re going to be much higher. So you almost have to be cognizant of the fact that you might need to be selling the opportunity and the upside of the potential to your candidates. So just being aware of, of what that looks like. Um, but I would say for really quick wins as well, it all ties in together. Preparation is absolutely key. So, you know, when I like to step into an interview, I’ll actually think through the questions that I’m going to ask and what the desired outcome looks like, if it’s good.

Yoni (23:41):
And what about answer might look like? So when I’m actually asking the questions that I have that relate to the role, this is a behavioral questions. I know, I know what I’m trying to get out of it, and I can have that consistency around that. I would say another thing, um, that you can read about in working backwards is Amazon star method, how they approach behavioral questions and figuring out exactly what did you, the candidate do that actually impacted the business. What was your specific output? So it stands for situational. Um, jeez, um, uh, I’m losing it, uh, task, um, results and account, uh, accountability, maybe. So I didn’t get in the right order, but the point is you, you th the point is it’s, Amazon’s not mine, is that when you work through it, you can actually ask the question and set the tone of what the situation looks like.

Yoni (24:38):
From there. You can understand the specific tasks that the individual performed while they were delivering. So you can figure out if someone is, as they define it, a builder, someone who is actually creating things or a coordinator, someone who’s moving things around. So you sort of use these techniques to dive deeper and truly understand who it is that you’re interviewing, because let me tell you the cost of a bad hire is, I mean, it is quantifiable, but it’s extremely expensive. And I’ve just been through a few of these where you hire and you invest so much time into senior talent. And if you’d just been a little bit more critical or really thought through the impact of business, you might not have hired that person. You would have kept like a bad hire is worse than no higher, in my opinion.

Rich (25:20):
Yeah. And I’d say a lot of times that the signs are right there, you’re just choosing to ignore them. I mean, I think I, I’m a big believer in how you do anything is how you do everything. And like, you could see the signs right there. And I I’ve noticed over time, just for myself, that it’s right in the correspondence with the person for the first time it’s, it’s right in the correspondence around even setting up the interview, all of the signs about how they operate. And, uh, um, so, uh, and, uh, I mean, it’s not quantifying exactly, but you said the cost of a bad hire, I would say it’s just astounding. The cost of a bad hire can be astounding.

Yoni (26:01):
Yeah. I mean, when you even think of it, the cost of a good hire, typically speaking, it takes you six months until you start to realize significant value, you know, at a, as a baseline, it might be 12 plus months. So, you know, to have to go back to the drawing board, it’s, it’s your time double, or keep personnel time potentially double. And it also sets you back in terms of their education into your business and how they can have true impact. So, yeah, it’s, it’s, it’s a lot.

Rich (26:29):
Yeah, absolutely. Yeah. Well, this is really great. And, uh, and I think there’s a lot of really great insight for, um, for entrepreneurs in, in how to develop processes or process improvement, and also for, for staffing and recruitment, which are the two major directions of, of your two companies right now. Uh, and, uh, if people want to learn more about you or get in touch with you, how do they go about doing so?

Yoni (26:54):
Yeah, uh, I’m pretty good on LinkedIn Yoni Kozminski or, uh, check out, multiply may start with MWI for the may, uh, or we are a scholar.com. You can also check out our Scala consulting page. That would be the best places.

Rich (27:10):
Awesome. Well, Yoni, I really appreciate you taking the time and I’m going to be seeing you at some upcoming events. Also, I’m looking forward to that, but just for now, I really appreciate you taking the time to share what you’ve learned here with my audience. So, um, thanks for being here. Thanks for having me.

Outro (27:33):
Thanks for listening to innovations and breakthroughs with your host, rich Goldstein. Be sure to click, subscribe, check us out on the web@innovationsandbreakthroughs.com and we’ll see you next time.