In this clarifying episode, Scott Ritzheimer, Founder of Scale Architects, shares why asking the right question about your current stage matters more than chasing the next one. If you're unsure which level you're in, feel stuck pursuing the wrong growth, or worry you're building something you won't want to lead, you won't want to miss it.

You will discover:

- Why knowing your exact Founder's Evolution stage prevents wasting effort on the wrong next level

- What each stage truly requires so you can thrive where you are or prepare for transition

- How to decide whether to optimize your current level or evolve to the next one

This episode is ideal for for Founders, Owners, and CEOs in stages 1,2,3,4,5,6,7 of The Founder's Evolution. Not sure which stage you're in? Find out for free in less than 10 minutes at https://www.scalearchitects.com/founders/quiz

Scott helped start nearly 20,000 new businesses and nonprofits and with his business partner started led their multimillion-dollar business through an exceptional and extended growth phase (over 10 years of double-digit growth) all before he turned 35.He founded Scale Architects to help founders and CEOs identify and implement the one essential strategy they need right now to get them on the fast track to Predictable Success.

Want to learn more about Scott Ritzheimer's work at Scale Architects? Check out his website at https://www.scalearchitects.com/

Connect with Scott through his LinkedIn at https://www.linkedin.com/in/scottritzheimer

Hello, hello, and welcome. Welcome once again

to the Start, Scale, and Succeed podcast, the only podcast that

grows with you through all seven levels of your journey as a

founder. I'm your host, Scott Retheimer, and today I want to

talk about one of the most important lessons that I've

learned, and that is, in particular, the value of asking

the right question, you see, we waste an enormous amount of time

as founders, as leaders, even as entire organizations, trying so

hard to find the right answers to what is ultimately the wrong

question, and arguably the most glaring example of that is the

most common question that I'm asked, particularly by coaches

that I meet for the first time, and this is, of course, outside

of how old are you, because I still look like I'm 22 but

that's that's another thing for another time. By the way, if

you're not watching this on video, we've got video options,

not just on YouTube anymore, but also probably in your favorite

podcast player. You can choose the video option in Spotify. You

can also choose the video option here in Apple Podcasts, or one

of the first podcasts to release this option in Apple as well.

So, check it out if you're in your player, there's a little

video option in both Spotify and Apple Podcasts. Some of your

other favorite shows might be that way as well. It's a cool

experience, and, and one that I think you'll enjoy. So, back to

this really bad question, this fundamentally flawed question.

Are you ready? Okay. So, the question is, how do I get to the

next level, and we ask this in a lot of different ways. We're

actually going to address several of them over the course

of this series. This is the first in a what will be a seven

part series. We'll talk about that in a moment, but how do I

get to the next level? Now you're probably wondering, like,

what, like, why is that such a bad question, and, and a big

part of the reason why is that it usually means, especially

when it's asked in those words, it usually means that the

founder doesn't actually know what the next level is, and, and

more importantly, and almost certainly they don't know if

that next level is right for them, you see. This matters

because founders find answers. It's just what we do. We will

find an answer where everyone has given up, like 17 years ago.

There's a stubbornness, a determination, a cleverness, a

resilience, a just recalcitrance in founders that forces us to

find the answer, and that's why it's so deeply important for you

to ask the right question, because otherwise you're going

to find the right answer, or at least an answer, hopefully the

right one, but it's whether it's right or not, it doesn't matter,

because it's an answer to the wrong problem. And then, what do

we do? We then go and build an organization, and I can't tell

you how many times I see this happen. We build an organization

that we don't actually want to lead. We end up doing something,

either as an organization or in our individual job within that

organization that we don't actually want to do, and truth

be told, the honest truth of it is you probably won't make any

more money doing it, and that's such a big driver, especially

culturally, is like I've got a blank because why, because

that'll make me more successful. What does that mean? Because

I'll be making more money, and while it might be true,

especially within the context of the founders' evolution, that

that you might be able to generate more revenue in a later

stage, it's not even close to true that that more revenue,

more of that revenue will make it to you. In fact, I think you

can not only enjoy the right level more, but if you optimize

for the right level for you, most of the time that's also the

same level in which you'll make the most money yourself, and

we'll unpack that a little bit as we go throughout the series,

but, but that is what this series is about. We're gonna do

a full solo series, just you and me, it would be a lot of fun.

And the series is going to be called Should You Really.

We're going to talk about how you can figure out whether or

not the next level is right for you now. Before that, some of

you might be new, some of you might have been around for a

little while, but there are there are two questions that we

have to answer before we can actually get to that. Is the

next level right for you? And the first of those questions is

one that we've addressed a couple of different times. And

that is what level are you currently in, so we're gonna,

we're gonna lay just a little bit more context there, at least

you need to know to get caught up, and that's going to be a

real helpful precursor to the following episodes in the

series. The second question is pretty easy once you've answered

the first one, so once we've answered the question, what

level are you currently in, then the then the the next level is

it's kind of one of three options, the next level is

either the next in progression up the chart, if you will, so

from level three to level four, for example, that could be the

next level, the next level could actually just be a better

version of this level. It could be that you really genuinely

learned to thrive in this level, and we're going to talk about

that decision. How do you know if the next level is actually

stepping forward to the next level, or how do you know if the

quote unquote next level for you isn't actually the next level at

all? It's just an optimization of the level that you're

currently in, learning to embrace it, learning to thrive

in it. How do you know if that's right for you? And again, we're

going to address this throughout the series. Now, there is a

third option, we're not going to talk about it in this series,

but the third option might be, it's kind of like I think about

this every time I fly, I'm headed to see a client, or even

better yet, headed home, and, and sitting on the plane, and

they go through their whole exit spiel, and what do they say?

They say the closest exit might be behind you, and that's true

in, in the founders' evolution as well. Sometimes the right

level is actually in your rearview mirror, sometimes we

just breeze right through it, never recognize how good it

really is until we've lost it. So, there is an option to go

back again. We're not going to address that in this series, but

that's a very valid option. And even the idea that it is back

sounds negative, but it's not. Better way of thinking about it,

we just talked about this a couple episodes ago, is

returning home right. Going home is not any worse than going to

visit my client for the on the outbound journey. It's just two

parts of the same journey, and so going home isn't a bad thing.

Going back isn't a bad thing, but neither here nor there. In

this episode, what I want to do is just, just do a quick run

through of these different levels, because we do need to

know what the levels are. That's the easiest way to find out

which one you're in. We're going to then go through and address

each level one at a time for the remaining six episodes in the

series. And yes, there are seven episodes, seven levels, and

there's only six episodes. How does that work? We're actually

going to talk about the transition point between each of

the levels, so in the next episode we're going to talk

about how to navigate the transition point between levels

one and two, and then the next episode after that between

levels two and three. So there are six transition points in the

journey, there's no transition point out of level seven, except

the way that we'll all leave this earth, but that's that's

another thing for another time. So, let's go to this first

question, What level are you currently in now? For those of

you who've been with us for a little while, Les and I talked

about this at length, believe it was back in episodes 303 101

I'll check that afterwards, and whatever episode it was, I'll

get it in the show notes for you, so you can go directly to

there.

So, if anything about this episode is interesting, or you

want to know more, we spent a lot more time on it back in, in

a couple episodes in the past, so we'll link those. You can go

back to them, and and you're welcome to do so, that's all in

the show notes. We also, for those of you who are new, or

those of you who don't know what level you're currently in,

there's kind of an easy button on this. We have a quiz at

Founders quiz.com that will tell you exactly what level you're

in. That link is in the show notes, as well, you can grab

that. So, in either case, if you leave this episode and you have

some kind of a question still about what level you're in,

there's two easy answers there. You can go back and listen to a

little bit more, that'd be cool, or you can jump into Founders

quiz.com and just take the assessment, they'll tell you,

and it's like 10 or 11 questions, it's just really

easy, all right. So all that out of the way. Here's, here's what

I think is the easiest way, in 510, minutes, that you can tell

what founders level you're in. So I'm going to walk through

these levels one at a time, and and here are the questions we

want to think about. So, level one, are you in level one? The

first question we want to ask is, have you started your own

business or nonprofit and gone full time, like it's your

primary occupation? If not, then you're in level one. That, like,

the vast majority of the population relative to the

founders' evolution is in level one. This is the employee stay.

Just also the pre-founder stage, but particularly when it comes

to the founders' evolution level one is for founders different

than everybody else, and and in the book that's coming out,

we'll talk about that in a little bit, but there is, we

spent a lot of time talking about this because there are a

lot of people who just have bad jobs or don't like their work,

but for pre-founders and kind of frustrated employees in general,

there's this sense of being what I call a dissatisfied employee

and what really like is the genesis of the difference

between a pre-founder and just someone who's frustrated with

their job is that the pre-founder isn't really

thinking like, how do I make more money, although that

matters, they're not necessarily even thinking how do I get more

freedom, even though that matters too, that's not quite as

much of a differentiating factor as it used to be. They aren't

thinking, how do I get rid of my boss, although that's probably a

factor as well. What I see in, in those who are set up to be

successful founders, right, who might be jumping into this

journey the right way is they're asking the question, isn't there

a better way? Isn't there a better way, a better product, a

better service, a better way of treating our employees, a better

way of managing a team? That one not so much, but you'll find out

that it's necessary in a little bit, but I we're so level one is

someone who's thinking about that better way, and they're

wondering, Should I start my own business? Should I start my own

nonprofit to pursue that? Should I go full time? That's level

one, and if that's you, and you're asking that question, and

you haven't fully answered it yet, or you're just starting to

ask it. Then the next episode in this series can be fantastic,

because we're going to talk about whether or not you should

start your own organization. It's amazing. So that's level

one. If you haven't gone full time yet, that's kind of the

transition point. Level two, if you have started your own

organization already, then you're going to be somewhere

else on the founders evolution. You're gonna be somewhere

between two and seven. So, how do we start to flesh that out?

What's level two look like specifically? Well, in level

two, it might be just you as a solopreneur, it might be you and

like up to a handful of employees, I know that's very

technical amount, but it's different for different folks.

Contractors fit into that equation as well, but you

basically have a small, small team, might be just you and a

couple of helpers, and you're probably riding the

entrepreneurial roller coaster pretty hardcore as, as a level

two, what I call startup entrepreneur, and how you know

you're in this stage again, you've, you've gone full time,

that's a prerequisite, you don't have more than a handful of

employees, because that's going to push you into a later level,

but you're probably sitting there asking yourself, what was

I thinking, like why in the world before I made the leap, I

thought the only thing I could ever possibly do, and the only

way I could ever possibly succeed, was to start my own

organization. And now that I've done it, I think that's the

stupidest thing I've ever done in my life, and I don't know

what I'm going to do now. That's kind of how it feels now. It

might not be true, it might be true. There's lots of folks who

shouldn't have started their own organization, hence the next

episode in this series. But the idea here is we're in it, and

it's like three times as hard, takes three times as long, costs

three times as much as we ever could have imagined. And that

startup entrepreneur phase is pretty tough, but that's level

two. Level two is largely about you as an entrepreneur, and you

might have a handful of folks around you that are just kind of

there to help you, some assistance, maybe a tech or two,

depends on what you do and what the work looks like, but that's

level two, relatively small scale. It's not a, it's not an

amount of time. That's an easy misconception. You might be in

level two your entire time as a full-time entrepreneur, as a

full-time founder. For me, in my role, I've actually chosen to

stay in level two. I'm intentionally resisting, at

least for now, the pool into level three, so there's no time

limit on how long you're in level two. You can stay there

for as long as you want. That's actually true with all of these

levels. There it commonly takes at least a few years, though, so

very few people move. Faster than that, it is possible you

can have venture backing and get a couple early wins, need a

bigger team, and zoom through level two into level three. That

does happen from time to time, and that's what we're going to

talk about now. So, level two startup entrepreneur, what was I

thinking? Riding the roller coaster, you and maybe a handful

of helpers level three, so to be in level three, you must have

been in level two, which means that all of the requisites of

level two, like namely you've gone full time, need to be true

for level three as well, and in addition to that, you have to

have hired more than a handful of employees, so what is this

handful I've been talking about? It's very technical term, I

know, but it's somewhere between five and 15, and it varies based

on a whole bunch of circumstances, but here's what's

the same across all those circumstances, somewhere along

the way between bouts of pulling out your hair, usually you find

yourself asking what is wrong with these people, like what is

wrong with these people, because in level three you, this is

where you experience all the joys said facetiously of being a

reluctant manager. Welcome to the game. Super exciting,

reluctant manager, but that's what level three is like. I joke

about this often, but it's just true. Like, I've never met a

founder who launched their organization, did all the work

of getting to and through level two with the hope and ambition

of being able to lead a small team of people like that, that's

just I'm sure one exists somewhere, probably named Jeff,

you know, and he probably did a great job. Well done, Jeff, but

that's just not the way that most of us are cut out, the

internal wiring requirement that's necessary to get from one

to two is almost the opposite of what it takes to thrive from two

to three, and we're left with this question, What is wrong

with these people? And that actually might be the right

question for some of your folks. It's almost certainly the right

question.

You've probably hired some of the wrong people, but whether

you hired the wrong people or whether it's just a you problem,

either case, it's a you problem. You need to, at this stage,

learn what the right people are, so that you can hire them, and

you need to learn how to manage those people, because they need

to be managed in a way that you do not want to be managed, and

to some extent you might not even be able to imagine wanting

to be managed, but they're, they're different than you, they

should be different than you, otherwise they'd be competing

with you, and that's not what we want, we want a team that's

working with us, and they need to be managed differently than

us, so that's level three, you're asking, you've got a

handful of people, you're full time, and you're thinking,

what's wrong with these people? They're just driving you crazy,

they're driving you crazy. That brings us to level four. Now,

level four again, it's going to build on all the rest. So, we've

gone full time, we've got more than a handful of people, we've

actually got more than a handful of a handful of people, and to

be in level four, you're likely going to be somewhere between 15

and 45 people. Now that's a pretty big range, given that the

first range was like one to five, the second range was five

to 15. We get to a pretty big range here, 15 to 45 people, and

a lot of things change in an organization during that window,

and that's not a literal window either. Some folks might not get

there until 25 some might stay in it until they're 7580 I've

seen in level four. The these are just kind of guidelines, but

it's a, it's a rough way of getting a sense for for where

you might be, but basically, why that 15 to 45 matters is because

what's going on is that you're trying now to lead through other

leaders, that that's that's a different game, and you're

realizing at the same time, because of how challenging that

is, and because of a lot of stuff that comes with scaling

and growth, that that the whole growing and scaling thing is not

anywhere near as great as you thought, and what's so difficult

about this stage, and it's genuinely where my heart goes

out the most, is level four folks, I enjoy working with them

the most, because I feel the pain that they're going through.

For many folks, three is a really tough stage, but four is

the worst out of all of them. Sorry, level, and here's, here's

why, because so much about level four is so good, like, by, by

most men. Measures that we would use to determine success. You're

more successful than ever. You probably have higher revenue

than ever. You have greater brand recognition than ever.

You're being celebrated externally more than ever. Your

group of peers all envy you more than ever. Your folks have

magazine articles written about them at this level. You might

even be more profitable, at least in terms of dollar amount,

than you have ever at parts of this stage. However, the

disillusioned leader levels is level four that we're talking

about, that profitability tends to decline pretty rapidly

somewhere in this this level and what's going on there is a

there's a certain amount of illusion meant that that is

necessary to approach and survive the earlier levels of

this process, just honestly, if you're going to go from level

one to level two, you got about an 80% chance of failing at

that. That's pretty high, which means that you have to be

somewhat illusioned to think that you're the guy or the girl

who's going to be in the 20% right, like 80% don't start that

journey thinking that they're gonna fail. 100% of us believe

that we're going to succeed, when in fact 100% of us would

probably be better off believing that we won't succeed, because

that's far more likely.

Eight to two, and so there's a, there's an illusionment that

happens there, there's an illusionment that happens in

level three, where we think, well, if I can just get to this

point, this frustration stuff's gonna go away, if I can reach my

first $10 million or if I can make my first million dollar

profit, or if we can open our eighth location, or if I can

just have a better COO, or or something, there's some

milestone that we think's gonna fix this thing, because while

we'll brag about how everything's working inside, we

kind of feel like it's fundamentally broken, and and

this is that that level four, and what happens here is we get

those things and they don't work. We do what we used to do

and things get worse, and what happens is we start to lose

those illusions, which sounds like a good thing, but it

doesn't feel like a good thing. Like when your hopes and dreams

feel like they're being ripped from your soul, that's not a

pleasant experience. And what it leads us to is this question,

like, is this it? Is this as far as it goes? And if you feel that

way, you're far from alone. In my experience, for founders,

this is the hardest level, but it doesn't have to stop here,

because the next level is level five, and this is what I call

the chief executive level, and here's the difference between

level four and level five, outside of just how they feel.

In level five, you finally have at least, and usually more than

one true executive on your team. And for folks who've never had

an executive on your team, it's really difficult to articulate

what that feels like, but every client I've seen go through this

transition of having a bunch of leaders, a bunch of helpers to a

bunch of leaders to getting that first like true bona fide like

executive caliber leader on their team, it is night and day,

it's night and day, and it allows you to lead an enterprise

larger than you ever could in level four, you're not limited

to 4555 75 employees, team members. There's there's not

really a cap. There's some pretty freaking big

organizations out there that are led by level five founders, and

what's really wonderful about this level as a founder is that

not the weight of every decision is not on your shoulders

anymore, and in fact you, your job really in a positive way

shrinks to something like the three to five most important

decisions that need to be made in a year, your job focus

refocuses not on how do we solve the fires of this year to how do

we set ourselves up for success next year and the following

year, and the the the change, the dramatic change of the

busyness and frenetic energy of level four gives way to a quiet

office more often than you'd think, which leads to this

really strange but deep question of Who am I. That's the big

question in level five. If I'm not necessary for every part of

my organization to thrive, if it can continue to succeed without

me having to drag it there. Like, what does that mean about

who I am, and that's a big question we have to wrestle with

in level five. All right, I gotta move these a little

faster. Level six, eventually the time comes where you don't

need to step back, that's not the right language really at all

for this transition. It's time to step out. It's time to step

out of leading and hand the reins to another, and I'm going

to be clear on this visionary with a fresh vision for a

greater future for the organization. If you want to get

to the richest experience in level six, that's how we're

going to do it. It's not the only way, but it is by far the

best way. And at this level, you get to experience owning and not

running.

You might also sell the business and take on a different style of

ownership, like ownership in other assets that are not your

business, but basically this is the owner level, and in the

owner level, when we're not operating, we're not leading,

you thought you had time in level five, you've got time in

level six, and it leads founders to ask the question, like, well,

now what do I do, and, and so that's the owner levels, where

we're investing, we're managing a portfolio, basically, but

we're not doing all of the work ourselves anymore, or even

leading the people that do, and then finally there's level

seven. It's a visionary founder level, where you have all the

financial and time freedom, so that you don't need to work

anymore. In fact, in level seven, we don't even need an

ROI, an ROI anymore. Instead, level seven, we are as close as

possible to wholly invested in our legacy, because what we're

really doing in level seven is answering the question, what do

I want to leave behind, and you're doing that with a level

of asset and richness that allows you to like make a really

significant impact, so chew on those for a little bit.

Hopefully, you've been able to narrow it down to just one, and

and it is just one. You're only in one level at a time, at least

one level per enterprise that you lead as a founder, and and a

couple things, you can't skip a level, so again, what that means

is we've killed two birds with one stone. If you know what

level you're in, then that means you know what level's next. And

so the option really comes down to, do I continue to learn to

thrive in my current level, or is it time for me to evolve to

the next one? And that's the question that we're going to

answer in this series, we've, we've spent another episode on,

on this topic in particular, so for the sake of time, and to not

over teach it, one of the big things we're going to come back

to a lot is just in general, how do you think about which level

you want, and the answer is not the biggest one, right? Most of

the time, when we see there's seven levels, well, then

obviously I want the seventh level, and that's going to be

true for something less than 1% of the population, both because

it's really hard to do, but also because it's just not right for

most folks, and so in episode 363 which is going to be in the

show notes, there's a whole episode on what I believe is the

North Star for this decision for you, and that is what is your

vision for the organization, so you want to build the

organization to this, the lowest or earliest level that you can,

while still meeting your vision for the organization, and, and

so we're going to talk about what that looks like in

practical terms at each of these transition points. Let me end

with this sneak peek at what's coming, and how to use this

series, because one of the challenges of podcasting in

general, but being true to the model, is that really, if we do

this right, only one of the remaining episodes in this

series is going to matter for you. Now, you might gain

something from all of them, you might have a lot of fun

listening to them. We'd love to have you there. Send me messages

about how much you love them. It makes me feel warm inside. I'm

just kidding. But really, what you want to do is keep an eye

out for the one episode in the series that's coming up that

applies to the transition point that you're at. So, if you're in

level one, you're going to pay attention to the next episode,

episode two in the series, where we talk about whether or not you

should really start your own organization, or if you can make

life a lot easier by doing it through an existing one. If you

are looking at getting into level three, right, so you're in

level two, thinking about level three, then episode three is for

you.

Where we're going to talk about whether you should hire and

manage a whole team or if you can shift to higher leverage

work and keep it simple. Then we're going to go level three,

and for those that are thinking about level four, we're going to

look at should you hire other managers or can you actually get

the impact that you want with a small and mighty team of 10 to

15 people that you can easily lead on your own with just a few

skills from a management perspective. The following

episode, episode five in the series, is going to be on the

transition from level four to level five, and so if you're in

level four, you're really going to be asking the question,

Should you scale, or even more specifically, should you scale

your staff, because that's where most of the complexity tends to

come from, or can you lead an organization that really is just

the right size to serve your market well, and and that's the

real question between levels four and level five. Levels four

and five. Level five, we will ask. This can be the sixth

episode in the series, because we're talking about whether or

not you should go to level six right now, and that is, should

you really step down and let someone else carry the vision,

so you can chase something bigger. Do you know what you're

going to, or is the one organization that you're already

leading enough for you to thrive now, or for the next 345 years,

at least. And then the final episode in the series, we're

going to talk about the transition from level six to

level seven, and we're going to say we're going to answer the

question, Should you really push, push past ownership,

right? This thing that you've worked so hard to create, this

wealth that you've created. Should we push beyond that being

the milestone for you and start working on building a legacy

that shapes the world you leave behind, or can you just fulfill

that vision through the companies that you own? Because

there's no problem with staying in level six if you don't need

to get to level seven, so stay tuned. We're going to be going

through these. I, you know, to be honest, don't know what the

release cycle is going to be. We might stagger them, we might put

them all in order. I don't entirely know yet, but it'll

probably be about one a week. And, and for those episodes that

don't apply to you, obviously, again, you're welcome to listen

to them, but what would be super helpful would be if you know

someone who you think might be in that level, share it with

them, like especially if you go back and listen to them, like,

man, I wish I had this five years ago, 10 years ago, 30

years ago. Then give it to someone else who's there now, it

could change their life forever. Most of you know, podcast

changed my life, and I hope that this, this can for you and, and

your friend as well. With that, I know this episode went longer

than usual, and I promise I'm gonna try and keep the rest of

these as short as possible. But all that's because you know your

time and attention mean the world to us. I hope in this

episode you got a little more clarity than you had before, and

I can't wait to see you next time. Take care. Hey everyone,

Scotty Timer here. Thank you so much for listening to the Start

Scale and Succeed podcast. I hope this episode gave you

exactly what you need for the level you're in right now, if

you want to discover what level you're in, take our 10 question

founders evolution quiz for [email protected] That's

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review. It helps us reach more founders like you. And let's be

honest, it means a ton to me, my team, and all our incredible

guests. So, keep starting, scaling, and succeeding, and

I'll see you in the next episode.