9 Lessons I Learned Failing To Scale My Business To $1M Per Month
What happened, what went wrong, and where I'm heading from here
Buenos Dìas from Mexico City 🇲🇽
I spent last weekend celebrating my 29th birthday with a hot air balloon adventure, 4 hours of hiking in the forest, eating lots of steak, and seeing my first Lucha Libre match here in CDMX.
But now, it’s back to business—and I just published a video breaking down several painful (but useful) business lessons I’ve learned the hard way over the past 4 months.
This is the type of content I wish other business owners would make. You see plenty of people talking about how great their business is & how easy it is to run. But the reality is that business is 1) extremely challenging, especially when scaling, and 2) rarely a straight “up and to the right” chart.
My goal with this newsletter and my YouTube channel is to document a mix of both wins & what’s working paired with losses & what needs fixing.
And today’s post is one big failure reflection—so let’s get into it.
For those of you who learn best via video, here’s the link:
And for those of you who learn best via audio, here’s the podcast link (Spotify & Apple Podcasts)
And for those of you who like to read, here’s the text version. Keep in mind, this was an off-the-cuff outline for the video, so I go far more in-depth over there.
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9 Lessons From Failing To Hit $1M Per Month
Well - I guess I didn’t technically fail because we did hit $1m in a month in November
And we really ended up doing much more than that — 1.22mm - over a 30-day period from November 5th to December 6th
But it wasn’t in a way that I could predictably repeat month over month over month - which is what I’m ultimately trying to build
So in this post I’ll talk about my last 4 months’ scaling journey, what I wanted to do, what ended up happening, and how I’ll take those lessons and apply them during my upcoming scaling sprint
What we’re going to cover
The story of the last 4 months
What I wanted to do
What ended up happening
What I would have done differently
What I am going to do now
Lessons & realizations to apply going forward
Let’s get into it.
The story of the last 4 months
Not going to spend a ton of time on the background of this business because I made an hour video breaking it down which you can find HERE
But the quick rundown is we run a group coaching business that has 2 main departments
Acquisition (getting new customers)
Success (servicing customers & getting them to renew)
My goal was simple: scale the number of enrollment units per month from an average of 60 to 120
Immediately that goal should have been 60 -> 80 -> 100 -> 120, rather than trying to get there in one jump (and you’ll see how that ended up leading to the wrong sequence of decisions as we get deeper into this video)
To accomplish this goal, I needed to thread the needle of increasing marketing flow, sales capacity, and fulfillment capacity
You typically have to work in reverse -> first success, then sales capacity, then marketing flow, which is what we did.
To increase marketing, you need to increase the sales team capacity, otherwise, you won’t be able to convert that demand
And to scale the sales team capacity, you need to scale the success team capacity, otherwise you won’t be able to service that newly converted demand
And this is what a lot of businesses do wrong, and I’ve seen it firsthand from others in the space
So to prevent that mistake, I started by building success capacity, which was the right choice.
We brought on 3 additional CSMs with the expectation that enrollments would double over a 4-month period, which gave us plenty of room to fulfill
This was the right choice because the worst thing you can do is scale enrollments with a lack of fulfillment.
This would lead to refunds and negative word of mouth, on top of just being ethically wrong to sell someone into something you didn’t have the bandwidth to service
This happened during the month of August and early September, which gave us the foundation to move into the next phase
From there, we expanded the sales team from 3 to 5 in September, bringing on 2 new reps
This took a big chunk of mental bandwidth to hire and train these 2 reps, as I was running the sales team and marketing team, on top of making the higher level strategic decisions within the business
All the while, we were still hard at work to scale our paid cold traffic funnel to a profitable level
We were running at a small scale and roughly breaking even, but it was not in a position where it was a “no brainer” to turn up the paid ad dials
That marketing system required additional work, but I was unable to give it my full attention given I was fully onboarding and training the new closers
However, I thought I needed the additional sales capacity to “figure out” the marketing system, thinking that if I had more call slots, it would magically fix the numbers
Turns out, the numbers that needed fixing were actually further down the funnel (conversion of cold traffic) rather than higher up the funnel (just having more throughput to take calls)
Getting in the weeds here - you’ll see how this would come back to bite me as we progress through the story
We made it through that month of September and the new reps were starting to perform, but then we had an unexpected churn after one of the new reps took a “self exploration vacation”
When they came back, they let me know they were actually not interested in sales and instead wanted to paint full-time
To each their own I guess! And I’m glad they did what worked best for them
Luckily the onboarding effort was not wasted because we hired 2 closers at the same time, and the other was one was performing well and is still a high-performing member of our team
So we went into October with a sales team of 4, not quite enough to fulfill the enrollment goal of 120 per month
And since I was relatively set on that goal, I looked to again expand the sales team so we had enough capacity to hit that number without hiring again
Again, this was a strategic mistake that I can only realize with the benefit of hindsight. We needed to fully max out this capacity before expanding it.
And I would have done this had I chunked the goal into milestones rather than trying to get their in one shot
At the time, our 4 reps were at capacity, taking roughly 6 calls per day per closer with a mix of organic and cold traffic leads
The cold funnel was still roughly breaking even, but it was masked from our organic system generating enough calls & enrollments that the entire system looked “fine” from a macro level
And I was making decisions from the macro-level numbers, rather than the funnel-specific numbers, which again I would only find out was incorrect after making the mistake
On top of that, we had just hired additional success managers, so I felt the need to juice enrollments to fill that excess capacity
This is because CSMs are paid mostly with a fixed base salary + upside from there, so we were going to pay that whether or not we had additional enrollments
So I went ahead and hired 3 new reps, all at the same time in the middle of October
At the time, my goal was to get to 6 full-time closers on the team, as that is what I forecasted was necessary to hit 120 enrollments
I hired 3 because that took the team to 7, and I mentally baked in one “churn” which would allow me to only hire / ramp / onboard one more time to be at the capacity I was looking for
Hiring 3 at the same time, trying to shortcut the necessary onboarding & ramp process was another huge strategic mistake that I can once again only see was the case when looking backward
So here we entered the middle of October - and I now needed to onboard and train these reps, which I did for about two weeks
However, I quickly realized there was not enough marketing flow for them to take the number of calls I had promised during the onboarding process
And the only way I was going to ramp up that marketing flow was if I gave the marketing system the majority of my attention (since I was running the marketing team as well)
So the solution (I thought) was to cut the onboarding process short and switch my attention to scaling up the cold traffic funnel, which still needed work
But this cold traffic scaling attempt simply exposed the inefficiency of that funnel
I ramped up the spend there, which did increase the overall volume of call throughput and fill the new closers calendars, basically the entire team operating at capacity
However, this was sending 1) relatively cold traffic to 2) relatively unskilled / untrained closers, which meant we were getting plenty of call volume but operated unprofitably given we were not enrolling practically any of them
This happened because I was not measuring the performance of this funnel independent of our organic funnels when we were at lower levels of spend
So there were two problems going on at the same time, both of which would have required 100% of my effort and attention to fix
The first was the overall lead quality & warmth of the cold traffic leads which required 1) more nurture and 2) harder qualification and confirmation
The second was the overall skill of the new closers who were not operating the sales process to the level of the other more seasoned closers
Both of these were my fault because I underinvested in doing them FULLY before moving on to something else
And that’s the difficult part of scaling something when heading multiple departments at the same time
Being in charge of marketing & sales at the same time, when both of them were in a period of expansion meant that by investing my time in one of them meant the other was receiving less attention than it needed
Now, all of this happened during November - which also happened to be the most profitable month in the history of the business as we launched a new product in our digital products division AND had our highest number of enrollments
We ended up hitting 100 enrollments in November! And had our highest number of paid enrollments, but it felt extremely difficult / somewhat chaotic
Show rate was lower, close rate was lower, cash collected was lower, and it just felt like chewing glass for a lot of it, which is not fun
Now maybe I needed to adjust my expectations on the relatively “cleanliness” a system might be in hitting that $1m/month mark, but either way, I didn’t feel it was built
Given this combination of problems, we entered 2025 scaling back the ad spend due to its general unprofitability, looking to rebuild that part of the marketing system in a more sustainable way
This lead to an overall decrease in throughput of calls, especially for the newer, less-talented reps
And this kicked off a slight negative spiral that was going to undo a lot of the work
As closer lead volume dropped, it’s natural that they get bored, insecure about their ability to earn, and generally operate from a place of scarcity and anxiety
And for good reason! I would do the same thing in their situation
On top of that, we did not have a good system for turning underutilized closers into setters, which meant that if they did not have a calendar full of calls, they basically did nothing all day
This compounds the problem because they get “rusty” and disinterested for the calls that do end up on their calendar, so they end up closing practically nothing
This led to a series of churns one after another over the last 2 months
And that leads us to today, where we are now left with 2 closers and 2 setters, relatively low ad spend, and a blank slate for where we want to deploy our scaling efforts next
But most importantly, I walk away with some lessons that are going to let me have a much better go around at it this time around
So—what would I do differently if I could go back in time?
Well first off, I don’t know if there is anything I would do differently
During those 3 months, we had our highest 3 months of revenue as a business over any 3-month period
Putting the emotional toll it took on me aside, I now emerge with a handful of lessons that I could only learn through experience, given our unique situation
I now have a leaner team, with each team member fully bought in, as well as a new killer sales manager which will allow us to take another shot at this scaling path with more overall skill & pattern recognition
But just for the thought experiment, here’s what I would have done
I would have first stopped at 4 closers after the life-reevaluation churn
With that many closers and ~50k/month in ad spend, we had completely full calendars and the ability for each of them to do 25+ units per month
We could have maintained this system & spend, improving the sales process on the cold volume that was coming in before trying to scale it
On top of that, I would have monitored the cold funnel completely separately & made tweaks JUST ON THAT SYSTEM rather than on the system as a whole
The landing page, application page, call script, even the closers who talked to this cold traffic, it needed to best tested & validated almost like a completely different business
In fact, I should have been the one taking the initial calls to have “boots on the ground” just like I did when we initially launched PGA
From there, I would have looked to expand the setting team to increase the efficiency of our entire system, both paid and organic
We could have launched a DM funnel over a direct-to-app funnel, which is higher touch but higher intent and easier to validate at lower levels of spend
We could have stuck with the direct to app funnel but had the setting team triage the lower-quality apps to confirm them and their levels of intent, which would have increased cold show & close rate
We would have fully maxed out our opportunity streams before adding a new one (specifically our Skool group & no-show rebookings), again leading to more call throughput without additional marketing spend
This also would have given us a natural “toggle” from setter to closer if a closer was underperforming — basically they get put on setting duties if they lag over a 14-day period, which keeps intensity high and also creates an ascension path for new setters who want to become closers
Then, once I had the the correct setter/closer ratio (like 3 setters, 4 closers) I would have expanded that unit with another 2 setters and 2 more closers, knowing that I could turn the marketing dials up and immediately fill that capacity given the system was validated & scalable
Had I gone with this path, I likely could have duplicated this system profitably, two more times, such that we would be sitting at 8 closers and 5 setters, all at capacity at a much higher level of adspend
So, going forward, here is what I see as the likely roadmap:
First, we ensure we have ample setter volume to fully max out the call bookings on each curated opportunity stream
No-show rebookings
Skool group joins
No-call applications
DM funnel on IG
To know whether or not we are maxed out on each of these streams, we will clearly define the theoretical max communication cadence for each of them, if we were blessed with unlimited setting resources
DM funnel
Sub-2 minute speed to lead
Daily bump to each lead for 10 days
Then weekly message after that
Skool group joins
Sub-2 minute speed to lead on join & 2-step comments
Daily bump of each lead for 10 days upon joining
Then weekly DM reengagement after that
No-call apps
Sub-2 minute speed to lead after not booking a call
Daily double dial + voicemail + text for 10 days
Then weekly after that
No-shows
Same process as above, except double dialing + text at EOD to rebook
Repeating that process every day for 10 days
To do this effectively, we need three metrics for each opportunity stream
The total amount of flowing coming in daily
The total number of calls booked from that stream
The ideal ratio that says we have enough capacity to keep that stream up to date
For example, with our Skool group
We have roughly 50 new members joining per day
We are not currently calculating the number of sets per day there / marketing them in the CRM
Therefore we do not know whether or not we are doing a good enough job setting from that funnel
It is my hypothesis that if we fully max out these opportunity streams with 2 setters and 2 closers, we will very quickly realize we could add 2 new closers + 1 new setter and immediately fill their capacity
But only once we can verify the new DM funnel is profitable, given that is the only “dial” we will be able to turn up for the new reps
So that is where we will head from here - first making sure we have proper setter tracking systems in place and all opportunity streams are tended to. From there, we will hire additional setting/closing capacity as necessary if and only if we have relatively high confidence in filling their capacity quickly upon joining.
So what did I learn from this process to take forward?
Never do 2 “news” at once. We hired new closers while deploying a new cold traffic acquisition system. This meant as it was underperforming, we weren’t sure whether it was the funnel that needed work (better nurture/framing) or if the reps were underperforming and we needed to improve their on the call performance. Because I wasn’t sure which problem to fully tackle, I ended up tackling neither.
Systems naturally become more inefficient as they scale. When our cold traffic was roughly breaking even at 4 closers and $50k/month in spend, our organic system was able to “smooth it over” such that the entire system looked good as a whole. But once we triple that to about $150k/month in spend, the “inefficient” part of the system became glaringly obvious as the volume from organic was unable to compensate.
Scale by reducing volatility / increasing predictability, THEN add capacity. I should have brought on 1-2 more setters when we were at 4 closers to fully “solidify” our various opportunity streams. That would have squeezed more efficiency out of the system we currently had, AND given us a “unit” to scale in sequence (1 setter, 2 more closers, rather than just closers).
Cold and warm traffic funnels are completely different businesses. They require different sales processes, communication cadences, framing assets, and sales scripts, and I dramatically underestimated that. The beautiful part is that whatever you can make work on cold will absolutely crush on organic, so the entire system will improve if you work to get the cold part right.
Test demand before hiring to fill it. Rather than hire 3 additional closers with relative uncertainty about how well I could fill their calendar, I should have started with an extra “dummy” calendar that a setter could manage to make sure we could consistently fill it. Once we could validate that both the demand and the quality of that demand, hiring & onboarding would have been much easier.
Max out opportunity streams before adding another one. We likely wouldn’t have even needed to expand to cold had we better tracked our throughput in the Skool group + our no-call apps, each of which could have led to 8-12 more calls per day with enough resources fully deployed to setting from them.
Screen every hire for long-term alignment. Especially sales reps, you should ask them what they will do if for the first 3 months their income is 1/2 of what they expect it to be. If they fully say they will jump ship, it’s likely they will be one foot in and one foot out throughout the whole process anyway. Ideally you want someone who is looking to invest in an opportunity for the long-haul, even if it means short-term income volatility.
Keep your best rep at full capacity before giving another rep a single call. Part of what happened as we scaled was that the overall volume of our best rep went down, which led to worse overall performance versus when he was at full capacity. And even when he was at full capacity, quite a bit of that traffic was cold, with the other organic leads being spread around to the other closers who were not going to convert at the same level. As we move forward with this one, we will make sure that our best rep stays fully allocated with the most closable leads, with all others reps forced to learn on more challenging ones. This requires the long-term alignment piece from above, as it likely means a tougher first few months as they prove their skillset.
Set big goals, but attack them in milestones. I tried to go from an average of 60 units to 120 units in one round of hiring & scaling. Realistically, this should have happened over 4 months and 3 chunks of hiring, going from 60 to 80 to 100 to 120 one milestone at a time.
Hire in pairs, not in trios (for the same role). I hired 3 closers at the same time because I was completely burnt out of the hiring process. I was trying to get them all up to speed at the same time, thinking that I was not going to have to do so again for a long time if I got it right. However this meant I gave each of them less attention than I otherwise would have had I hired in pairs, which ultimately meant none of them got up to speed.
Ultimately I’m grateful for the last 4 months despite them being pretty tough mentally & emotionally. The path forward looks clear with a fully aligned team and a good chunk of lessons that will help us ultimately scale through this level over the next few months.
If you have any questions about anything I talked about, leave a comment and I’ll get back to you ✊
ONWARDS!
-Dickie
PS… I’m looking to take on a few select 1:1 consulting clients for help with business operations & acquisition systems. If that’s something you might be interested, shoot me a reply to this email with the word SCALE and I’ll send over the waitlist application.
PPS… If you missed last week’s edition, I broke down our entire business operation structure: KPIs, departments, meeting cadences, org charts—everything I wish someone would have laid out for me when I was starting my business. You can check out that full “behind the scenes” overview here:
This Week’s Beats 🎧
After watching this guy’s sets, I finally pulled the trigger on getting a DJ board.
Over the next few months, I’ve committed to the “side quest” of making my own mix & publishing it to YouTube. There’s something about 2 uninterrupted hours of mixing music that feels like a massage for my brain. I’m excited to build this into my daily & weekly routine and see where it goes!
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Great post and thank you for sharing the deep insights - not many people do this - and it’s these sorts of details where the real gold is.
Out of curiosity do you use a coach/mentor?
If not - do you think that would have led to faster learnings here?
Dickie we’re at a place where we’re hiring our 1st closer but I’m still running all sales and marketing. Just feels brutal. do you have a post, video, or insights into that stage of the business?