Lost Energy, lost revenue

I’ve truly lost my energy twice while running my business. The first time led to a four-year revenue slump, the second time led to a two month slump. Four years is much more dramatic than two months. The only reason the second round was so much shorter was because I was aware of my energy, and recovered much more quickly. Here’s the story of the two times, and the energy x growth equation I’ve put together to combat future energy slumps.

The first time I lost my energy, it took four years to come back. I lost it when we hit $1M ARR, and I think subconsciously that was the goal I’d set for myself. So when we reached it, and the endless challenges of running a business continued, I wasn’t prepared with energy reserves to deal with the challenges. So I tried to outsource key elements of the business that I shouldn’t have. For four years, people struggled to tackle challenges I never should have asked them to do. I was too tired to re-involve myself, and outsourcing definitely did not work. So our growth started to slow, then stop.

I came back stronger, having done a lot of internal work with my coaches. And in about 9 months we got growth going again. It took some deep cleaning of initiatives I hadn’t really looked at in years because of the previously mentioned lack of energy. But we got through it. And I credit my team a lot with helping to manage a lot of the business, and also support the work I was doing. But at the end of the day, founders are founders, and you know this. You know there are some problems that only you are suited to take on. The type of problems that don’t make any sense, the ones where there are no patterns and you just have to immerse yourself in the world you are trying to solve a problem for. And that’s what I did, I put myself into the world we were trying to solve problems for, and went all out.

9 months later growth was going again, but then I lost my energy for a second time. But this time I saw it coming, and talked to my coach about purposely pulling back from what I was doing to spur growth. That sucked, because it meant purposely slowing growth of the business. Which did happen, but only for two months this time, instead of four years. The difference being that the second time I didn’t just jump straight to outsourcing. I did hire to take on some of the most draining aspects of my work, but I stayed involved at a strategic level to ensure success for the people who took over those tasks.

That was only possible because my energy wasn’t totally gone. It was lowered, and the 9-month sprint I did upon re-emerging from my four year energy break did take a bite out of me, but just a bite. So here’s the framework for not losing energy while continuing to grow revenue and profit.

Foundational business factors

These are the things your business needs to just run and operate. They are more of a potential loser than a big winner. But they are vital if you want to grow. They include things like managing support in a way that’s not overwhelming, building for stability if you run software or have technical elements to your business, managing operations of billing, fraud prevention, etc. These parts can quickly drain all of your energy if they are not done efficiently, and if they are not stabilized, then the second part of this equation doesn’t matter at all because your business will disintegrate.

Business Growth Levers

These are the things that move the needle. When you do more of them, you get more revenue. So stuff like adding features, posting more on social, spending more on ads if they are dialed in, signing more affiliate partners, running more customer calls. If you do more of these activities, or increase your spend, then you make more money.

Your Business Energy x Growth Equation

(Foundational Factors X (0-1)) X (Growth Levers X (0-Infinite)) Meaning that your foundational factors can go down but not over 1. If they are at a .2 then it doesn’t matter how much you do on growth levers, you won’t go anywhere. Growth levers can scale infinitely, so long as you have the energy to do that. So if you can keep your foundational levers at a .8 or higher, meaning they are stable, and you can dial up your growth levers without losing your energy, then you have an equation for continued growth.

It’s also important to know what your baseline number is for breaking even, what moderate growth looks like, and what fast growth looks like. That way, as you think about how you expend your energy, you can relate it back to your growth speed and decide if that’s what you want.