The Wealthy Consultant summary

First off, we need to define scale. People often think that scale means “more growth.” But it’s a little more complex than that. Scale is rebalancing a business’s size against the total addressable market, or TAM.

Keep in mind, there is such a thing as “bad scale.” If the growth of your business risks the certainty of that business in the future, that’s bad scale. Instead, you want to aim for “good scale” – one that protects the business’s reputation as it grows.

All too often, companies get it the wrong way round. They harvest all the goodwill in the market in an attempt to grow their business. But essentially, that’s taking from tomorrow in order to reach an arbitrary target today.

So, rather than scaling through addition, scale through multiplication. Aim to build leverage into your business in a variety of ways. With enough leverage, you can keep growing without having to sacrifice goodwill or reputation. No trade-offs.

To create scale via leverage, there are three things to consider – attention, retention, and pricing.

First, attention. Getting attention isn’t cheap, but it’s so important. You can get attention through advertising, or creating content such as books, videos, or podcasts. 

Obviously, paying for an ad is quicker and easier. But it’s also worth taking the time to create great content and trust that people will find you. These days, social media algorithms help people to find what they’re searching for, even if they don't know that they’re searching for it.

The next thing to look at is retention. Once you have people’s attention, you need to keep it, and there are no hacks here. The only way to successfully keep people’s attention is to give them something good – something valuable.

For instance, let’s say someone’s interested in a book you’ve written. If the reader finds the book enjoyable or useful, they’ll feel like their attention has been rewarded. They’re now more inclined to trust you.

Perhaps they’ll buy your next book, or one of your other products. If that’s the case, congratulations – you’ve now got a repeat customer.

As well as attention and retention, you need to think carefully about pricing. Pricing is complex, – it’s not “one size fits all.”

Above all, it should be strategic. Typically, when it comes to pricing, two recurring issues arise. The first issue is mispricing – either significantly undercharging which undercuts everyone, or overcharging in the context of the market.

The other mistake people make is failing to segment. Ideally, you should be using pricing to segment the market. 

For example, Tesla offers multiple car models. Although they all do the same thing, more or less, they’re packaged differently, so they appeal to different customers. Segmentation allows you to penetrate the market more easily.

Once you’ve got a grip on these three things – attention, retention, and pricing – scaling becomes so much easier.