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Episode Summary
You’re great at the trade. You went out on your own because you could make more than working for someone. Then the work piled up, you hired someone, and you expected them to figure it out the way you figured it out. No recruiting process. No training. No marketing engine. No finance discipline. You got 95% at your craft and 5% at everything else, and going from 95 to 96 in your craft isn’t going to move the value of the business when you’re sitting at 5% in five other functions. That’s the gap Rens Hayes spent seven years engineering around. Rens and I sat next to each other in Ken Sanginario’s CVGA program back in 2017, the only two owner-operators in a room full of advisors. He’s building HNO Structural Engineering organically to $20M in revenue, then toward $100M, and refusing outside capital until he can deploy it confidently at a 20% IRR. We got into the eight functions, why he won’t take a dollar he can’t put to work with data, the Hormozi-style irresistible offer he built around a no-risk peer review on building costs, and the line that should sit above every owner’s Milestone 13 — Strategic Plan: don’t risk what you need for something you don’t.
Top 10 Takeaways
- If you’re at 95% in your trade and 5% in marketing, going to 96% in your trade won’t move enterprise value.
- Don’t risk what you need for something you don’t. That line belongs above your strategic plan.
- Until you can deploy a million dollars at a 20% IRR with confidence, you don’t have a growth engine.
- Without data, marketing spend is gambling. With data, the same dollar becomes a slot machine you can dial up.
- Your offer has to be so good the customer feels stupid saying no. Marginally better isn’t a strategy.
- When you’re small, take execution risk, not financial risk. Execution costs time. Financial risk sinks the ship.
- Hire your first executive in the area you ARE the expert. Your bullshit meter is the moat.
- Growth is the result of doing many things well, not the goal you chase at all costs.
- Partnership is the second-biggest decision of your life. Assume positive intent or unwind before money makes it worse.
- Leaders who aren’t actively learning have blind spots their team will pay for.
Sound Bites
“Most companies are strong in two or three of those areas and completely blind to the cost of their deficiencies in the other five or six.” (@00:07:53) — Rens Hayes
“Don’t risk what you need for something that you don’t.” (@00:15:24) — Rens Hayes
“It would be ridiculous to think that you could be 95% optimized in anything if you haven’t measured it.” (@00:58:54) — Rens Hayes
“Without data and investment feels a lot like gambling. Because it is gambling. Chances are you don’t know if you’re putting it in the right place.” (@00:46:10) — Rens Hayes
“Heads I potentially win big, tails I don’t lose much. If I can make as many of those bets, I love those types of bets.” (@01:20:24) — Rens Hayes
About This Episode
Rens Hayes is co-founder of HNO Structural Engineering, a professional services firm building a national platform in the structural engineering space. He’s a structural engineer by trade, a partner with Jeremiah, and host of his own podcast interviewing top performers in real estate, design, and construction. Ryan met Rens seven years ago in Ken Sanginario’s Certified Value Growth Advisor (CVGA) program, where they were the only two owner-operators in a room of advisors. This episode is a long-overdue catch-up between two systems thinkers running the same playbook from different industries: financial literacy, the eight functions, the capital allocator seat, and patience.
Resources Mentioned
- Ken Sanginario / CVGA Program — The Certified Value Growth Advisor program where Ryan and Rens met. Ken has been on the podcast multiple times around Ep. 400+.
- Alex Hormozi Scaling Workshop — Rens attended in December and rebuilt his offer around the framework.
- Jack Stack — The Great Game of Business — Open book financial management as the operating discipline at HNO.
- Tim Ferriss — Fear-Setting TED Talk — The “cost of inaction” framework Rens uses for big bets.
- Joel Trammell — The American CEO — Source of the advice: hire the executive in the function you’re already an expert in.
- Nassim Taleb — Antifragile — The barbell approach to risk asymmetry Ryan referenced.
- Bo Burlingham — Referenced for the founder’s identity question through scale.
- Mike from Strategic Talent Partners — Referenced on hiring executives one level above current scale.
- HNO Structural Engineering — Rens’s firm.
Connections
Phase + Module:
- Module 1 — Ownership Goals — The cashflow and valuation goals that discipline every reinvestment decision
- Module 5 — Predictable Revenue — Why a predictable revenue engine is the unlock for capital deployment
- Module 7 — Leadership Team — Hiring slightly above current scale, in the function you’re already strong in
Milestones:
- Milestone 3 — Net Worth & Valuation Targets — The valuation target that sets the constraint on growth pace
- Milestone 13 — Strategic Plan — Three-to-five year goals as the execution frame Rens runs
- Milestone 14 — Customer Journey & CAC — Attribution and CAC payback as the missing data layer Rens is building
- Milestone 15 — Revenue Systems & Forecasting — The “slot machine” Rens is engineering for marketing spend
- Milestone 19 — Functional Leaders — Hiring the executive in the function you’re already the expert in
Concepts referenced:
- Capital Allocator — The seat above the operator that decides where the cash goes
- Three-Statement Model — The tool for seeing the future before placing the bet
- The Four Value Levers — Margin, growth, risk, and transferability as the reinvestment targets
- Free Cash Flow — What every operating decision rolls up to
- The Owner-Operator Trap™ — The 95% in your craft, 5% everywhere else trap Rens described
- Independence by Design™ — The framework that sits above the eight functions of the business