The Minimum Viable Company: How We Run a $50M Brand With Just 7 People

Speaker A: If you are a brand doing less than 50 mil a year and you have more than 10 full time employees, you're doing it wrong. I used to see headcount as being a signal of strength.

Speaker B: Signal of success.

Speaker A: Yes, signal of success. When someone would be like, oh Yeah, I have 20 people, I have 30 people. But now when I hear that, it literally signals to me this company is inefficient. In this episode we talk about building a leaner business, why bigger teams can slow growth, how AI makes employees more

Speaker B: effective, and whether a company can reach 100 million doll with fewer than 10 people.

Speaker A: We did 50 mil last year and

Speaker B: we were 6 people.

Speaker A: Exactly right.

Speaker B: And my goal, as you know, is to scale Halcom to nine figures with less than 10 people because we really believe that it's doable. It's what I call the minimum viable company. Essentially very strong in house leadership. Minimal only the essential team members backed up by this network of agencies that power everything that we do. But then the most important layer that I'm most excited about that we started implementing is is this AI layer of project management. Payroll versus revenue. The gold standard has always been, you know, 10% is something that's really hard to reach. Now I hear 8%, you know, I hear 7%. We're at 4% at Halken 4%, which is in itself really hard to reach. And I think we're unusual in that way.

Speaker A: Why are you so focused on 10 employees? 100 mil rev, I think. Hello, Alex. Welcome to Unfinished Business. Hi. Hello. Today I want to talk about Headcount because we just finished our off site with our team. It was amazing, all seven of us. And on the ride over here, I was thinking about how my understanding of the strength of a business has evolved so much over my career over the past like 12 years. Because in, I'd even say just in the past five years. Right. It has evolved dramatically because I used to see headcount as being a signal of strength. And now whenever someone.

Speaker B: Signal of success.

Speaker A: Yeah, signal of success. When someone be like, oh Yeah, I have 20 people, I have 30 people. But now when I hear that, it uh, literally signals to me this company is inefficient and they're doing it wrong. If you are a brand doing less than 50 mil a year and you have more than 10 full time employees, I'm thinking you're doing it wrong.

Speaker B: And do you think that's unique to D2C or do you feel that with other sectors too?

Speaker A: You know, it's hard. I do think in general A lot of people but DTC in particular because

Speaker B: like the hard goods like the, it's so heavy operationally from a financial standpoint that like having this heavy team that not only slows you down but also is expensive just feels like the most inefficient thing a uh brand can do.

Speaker A: But I also think it's unnecessary. It's absolutely unnecessary.

Speaker B: We've proven that.

Speaker A: We've proven it with seven people. We did 50 mil last year and I think.

Speaker B: And we were six people.

Speaker A: And we were six people exactly right. We only became seven people this year. I think a lot of times when I talk to founders M or ops folks or any or marketing folks, right. They think that for them to hit the next milestone it requires them to new a new hire. They're seeing their growth being one based on people. And I think that that's where these companies are getting it wrong.

Speaker B: They're losing the plot.

Speaker A: They're losing the plot. And it's like if you are scaling based on you're hiring, you're doing it wrong.

Speaker B: But that's changing. The mindset has changed across the board and now the, the brands are being glorified or uh, those are being smart with headcount, smart with capital. Like all we hear is bootstrap brands and how they got to nine figures without raising capital and different ways of raising capital. It's no longer this glory era, VC money, big teams. It's, it's totally changed. And the way we're doing it at Halken is what I call the minimum viable company. Essentially very strong and in house leadership, minimal only the essential team members backed up by this network of agencies that power everything that we do. But then the most important layer that I'm most excited about that we started implementing is this AI layer of project management. So now each team member on the team has an AI assistant. Each member of the team has an entire AI powered project management that we typically either outsource to a more junior hire or an intern. And now we no longer have to do that. And my goal as you know is to scale Halken to nine figures with less than 10 people and we're on track to get there. We're seven people currently full time at Hulken. We may hire one, maybe two this year as we reach nine figures. But this is the track that we're on because we really believe that it's doable and we're proving it. And I do think it's a trend in DTC in general. But then you have the anti playbook Players like Gruns that has done the opposite, has raised a lot of money, has hired the big teams and I do think there's still space for these success stories. And I love a good anti playbook story. But I think the majority of smart operators today no longer see the value in headcount. And all I hear across the board is how do we actually keep on growing without increasing headcount.

Speaker A: Yeah. So I, I think it comes down to like minimal viable company equals maximum revenue per employee. Right. So if you have a small team, you need to think about each one of how do you maximize the revenue per team member. And I think how we're thinking about the AI infrastructure at Hulken is really how do we make each team member so much more effective at what they're doing. Like I love, you know, I love we have this thing called um, like this pulse tool right within Slack and before it's not, we're not getting access to data that didn't exist before. But the difference is is anyone on our team now has access to this data instantaneously without having to rely on another team member by being like hey, like Allie, can you get me this number so that now I'm not bothering Allie. I'm able to be laser focused on my tasks without having to drain the resources of other team members to ask them for information. And we're all able to just execute at our roles that much better.

Speaker B: It's incredible. And the path to powering your team with AI is creating a brain for the company. So we use Notion as the brain. Notion is where we store all of our deadlines, all of our product development, all of our launch dates. Every single piece of information linked to every single launch that we do is in notion our uh, brain. But then we can plug in all of our AI agents into the brain and this is where the magic happens.

Speaker A: And can I just say one thing about the magic there? What I think is really cool about. I call her the Betty. She's my chief of staff. She's like my AI personal assistant. She's not connected to the Internet. She is connected to the brain. Right to notion. So all of her answers that she's giving me is being driven a hundred percent by what she knows about Hulkin. We have other agents right within our brain that are connected to outside resources. But my personal assistant, Benny, I love you so much. I never thought I'd fall in love with AI agent only job is to

Speaker B: know about Hulk and make you be a better Hulkin employee.

Speaker A: Exactly. And she and so My. So that's where it's like people are like, oh, but like, couldn't I do this with ChatGPT? Like, no, actually, no. Yeah. Like you can get insight and information and research, but if you want a output of information to you that is not polluted by all these other data points that aren't relevant to your company, then no, like, this is the way to do it. Mhm.

Speaker B: Mm, Definitely. And going back to your point about percentage of, uh, payroll versus revenue, the gold standard has always been, you know, 10% is something that's really hard to reach.

Speaker A: And we're so 10%. What can you talk to me about that?

Speaker B: 10% of your revenue should be spent on payroll is like gold standard. Amazing number. Now I hear 8%. You know, I hear 7%. We're at 4%, 4%, which is in itself really hard to reach. And I think we're unusual in that way. But I find it so exciting to think about the growth that we're facing. Leasing and not having to invest in that. Like, of course we will need to hire. We're actually planning to hire two people

Speaker A: and we rely on agencies. Right. But we have flexibility there.

Speaker B: We have flexibility. And I've repeated that so many times. But I love the agency model because agencies work for us and they have a team of experts that we probably couldn't have in house, or if we did, it would be really expensive. So I think the AI layer is critical here because it allows each and every one of us to be so much more efficient.

Speaker A: Yeah. And I think in the age of so many brands, so many opportunities, the only way companies are going to win big or small, is how fast you can move. And I think that is the beauty of the era we're in right now.

Speaker B: I can't, like, I could speak all day about the speed and, uh, what a small team.

Speaker A: Yeah. Oh my gosh.

Speaker B: How big of a difference that makes,

Speaker A: even getting us all aligned? Because obviously, like, people have different opinions. If you're a team of seven, forget the cost.

Speaker B: Forget the cost of having a big team.

Speaker A: Yeah.

Speaker B: Uh, the speed is where you lose so much money and leave so much money on the table. Because if you don't move fast enough.

Speaker A: Yeah.

Speaker B: Like the erosion of speed is what, like, will kill a company?

Speaker A: No, it actually does kill.

Speaker B: You don't launch fast enough, you don't reach decisions fast enough. And this is time lost against potential opportunities.

Speaker A: And I also think one thing with being a small team is that all the decision makers are so in touch with what's going on because there aren't many layers of removing, uh, the key decision makers from what's happening. And I think that also allows for great speed. Right. Because if everyone who's actually in charge of moving the company is incredibly aware of. Of what is not working, not just what is working, then you can move so quickly. It's just so interesting to me because I do think this is this new element, but there is still. I think people think they need like a big marketing org or a big ops org or all these different things.

Speaker B: I don't know. I think, I think that's kind of. You think it's changing antiquated. I think it's changed dramatically. No one's glorifying these big stories anymore. It used to be, you know, raise all this money and this to allow you to hire this big team. But I don't think that's. That's not the narrative that I'm hearing and it's. The trend is going against that. And I think, speaking of team, I'd be curious to know what you think. But you need a certain DNA to work in this way. Like, very few people will both be senior enough and hustlers at the same time. And I think it's a fine balance to find the right people that are willing to work at that level speed, at this high level of revenue, that they still want to hustle, they still want to, you know, get their hands dirty, uh, but still have some seniority and experience that makes them so good at what they do. And I feel like we kind of figured out the magic at ah, Hokan. And I think that's why we are so slow to hire too, because, like, you need to be okay with this environment.

Speaker A: Yeah, because I think this environment has a lot of, um, you know, mayday moments in a good way. Right. But like, when you're moving really quickly, uh, you don't have time to figure it all out. You're really rushing. Like we have. We are rushing and doing things with urgency every single week. Every single week, we are figuring out a problem that could have otherwise been solved if we had thought about this idea months earlier. But the thing is, no, we see an opportunity and we're like, oh, my goodness. I know we haven't planned about this opportunity six months ago, but there's an opportunity here. Let's run with it. And I think, I think what it that takes is someone that has almost is like an adrenaline junkie. Like, I actually think the only way he can survive.

Speaker B: But we can't. We can't all be adrenaline junkies.

Speaker A: We can't all be adrenaline junkies.

Speaker B: We all know who they are on the team, okay? They're sitting right here in this room.

Speaker A: But you need to have at least intolerance for it.

Speaker B: Because I, uh, think deep tolerance for it and for chaos.

Speaker A: Yeah, because I think that's, that is the downside with moving very quickly is that you're not seeing all the problems that are going to arise. You're not solving for those problems months in advance. Like, uh, there's a lot of things that become like, emergency moments because we are moving quickly. But, like, maybe we're delusional, but we always seem to fix those emergency moments. So we've never learned. We're never going to really plan that far in advance because we never actually have dealt with the consequence of it not working out.

Speaker B: I think because we're kind of addicted to it. You and I specifically, like, we just love to live in this fast paced work environment. Like, I'm gonna challenge you for a second because I know you're gonna say no, none of it. But, uh, I actually wanna know.

Speaker A: Yeah.

Speaker B: What are the downsides of having a small team? Like, what do you like? Ugh, no, that's actually annoying.

Speaker A: I mean, well, that.

Speaker B: Give me something.

Speaker A: I mean, listen, like, the downsides of a small team is that, like, we're doing shit that, like, theoretically we shouldn't be doing. Like, right. Even thinking about the office. Like, I'm taking out the trash on Wednesday.

Speaker B: We don't know.

Speaker A: But let's talk about that. Like we this and like we don't

Speaker B: have like piles and piles of boxes.

Speaker A: No, but really it's, uh, not like we have an office manager. Like most, uh, companies at our scale theoretically have an office manager. No, we don't even want an office manager because it's like, also like, no. Like me and T want to be goofing around in the office. Like, there is freedom that comes with a super small team.

Speaker B: Exactly.

Speaker A: Okay, so that's one thing I don't like taking the trash out.

Speaker B: Okay?

Speaker A: So I don't like washing the dishes. You know, there are things that obviously fall through the cracks because it's like, for instance, like, there are so many things on my plate and I'm focused on those massive big deals and we're doing a lot of big deals. So, like, if there's like a little thing that is like, little, but it's still somewhat significant. Right? Uh, it is going to be lower on my list. But, like, that's where so much you can do. There's only so much I can do. But like, I'm fine with thinking, like, listen, I. I'm going to focus where there's the biggest impact, right? There's one of me. If I'm thinking about minimal viable company equals maximum revenue per employee, I focus my attention to what gives me the greatest impact as an individual contributor of revenue to this company.

Speaker B: Yeah.

Speaker A: So the downside with that though are there little tasks that do. I got in trouble the other day. Johnny was like, I can't believe you forgot to like send this email to like, blah, blah, blah, blah. And then he was like, first of all, Johnny's the sweetest. He's the sweetest boss in the world because he like called me out on like a team call. And then afterwards I got a call from him and he's like, I'm so sorry that I like called you out on, um, this team call. I was like, dude, I literally don't care. Like, are you joking? But then afterwards I was like, this is the sweetest little human in the whole entire world, like, calling me. But point being is like, yes, I forgot about that email. Yeah. Because at the same time, I'm still gonna be home like at 5pm like, that's another thing that I actually think is amazing. I know there's this whole movement right now, like six days. Like they said, like, let's work six days like in a row. Let's hustle, hustle, hustle non stop. Like, no, we are a minimal viable company. Yeah, literally no more of that. So. Exactly. Minimal viable company equals maximum revenue per employee. Equals also maximum flexibility. Maximum flexibility, maximum freedom. Maximum freedom, maximum happiness. Yeah, exactly. Like, honestly, like, so it's not that like we're. And that's where AI comes into the

Speaker B: picture because I say all these small tasks that you say you don't have time for, like, hopefully with this new

Speaker A: system, a hundred percent that's not going

Speaker B: to happen anymore because Benny loves so much.

Speaker A: I literally yelled at Benny. I was like, benny, are you kidding me?

Speaker B: Benny's going to be the one accountable for this.

Speaker A: Literally Benny's now accountable for this. After Johnny was like, how dare you forget to write that email to blah, blah, blah. You told me you were going to do it. I was like, like, okay, Johnny, whatever. And then I was like, betty, never forget, Betty, if you ever forget to remind me on this. Mind you, Benny is my AI personal assistant. It's not a real employee at the company. But point being is like, now I will never forget.

Speaker B: There's A problem though. There's a problem. Betty can't take the trash out.

Speaker A: I know. Well, we have to talk about that after this.

Speaker B: We gotta. We need to bring.

Speaker A: We need to figure. No, we need to figure out a way. No robot. Because I'm not taking out the trash and we're not hiring someone to take out the trash. So. Yeah, um, maybe T. T. Like T. T. We love her. She's at her office. She's also single, if any great guys. But she can take out your. She can take out your trash and our trash too. And she's the head of branding and she's incredible. Anyways. Yeah. So what now? Here's the question for you. Why are you so focused on ten employees, a hundred mil rev? Is it why? It tells us. Tell us why. It's not more than a status symbol, uh, like an ego mark of like 10 employees, $100 million in a single year. No, but seriously, tell us.

Speaker B: No, because I like to be efficient. I think I don't want to be known for having a great business. I want to be known for having a smart business. Yeah. And a smart business means a rational revenue per revenue ratio.

Speaker A: Yeah.

Speaker B: Uh, employee per revenue ratio. That makes sense. And that makes us scalable. Because what I want a hulking to be known for is a smart company that can scale, stay profitable, keep on growing. And I think there's a story there, getting to 100 mil with less than 10 people.

Speaker A: And I also think we're doing it.

Speaker B: We see that it's achievable.

Speaker A: Exactly, achievable. I think that we're also missing like the big point that we're not a venture backed business, we're a family business. And like, why not be as efficient as possible? Because the less money you're spending on those things, the more money you ultimately can make and put back into the business. Um, and I think that's also just allows for companies to be so much smarter when they're not. When the money is actually theirs and not a venture capitalist. I think it makes a difference in how you see things. It's not growth at all costs. It's not grow responsibly.

Speaker B: No, absolutely not. And I think there's different stages in the company, Right. Like the high growth stage that we're in where maybe you're now super optimized on all the margins and on every front. And then there's going to be, you know, once we reach nine figures, we're going to be much more, um, just careful and optimizing different parts of the margin profile and, you know, better EBITDA and increasing all these different metrics that will make us maybe not grow as fast, but just more profitable. Uh, and we're getting there. But I think stage one is let's get to that milestone because we're corrupt from the VC world. We're like 100 million.

Speaker A: We got to get there.

Speaker B: Not that it really matters, but we're going to get there, and the potential is huge, and let's do it in a way that's smart.

Speaker A: So I know we're hiring someone actually right now, and I want us to talk about, like, what was the decision to start hiring for that role? What is the role, and what is the why behind that role?

Speaker B: So the role is a brand marketing manager to work with t that we just talked about who leads brand for us. What I like about our hiring process is we basically wait until we literally can't, are, uh, like completely underwater and have no choice but hiring someone. Uh, maybe it's not the most methodical way to go about hiring, but it's a way that works for us because I do think it's helpful to extend ourselves to some extent before defaulting to hiring. Like, I need a very clear, um, kind of ROI for justifying any additional hires. And we've reached a point where the brand is becoming significant enough that we need more hands. We have so many partnerships lined up with brands, with celebrities, with, uh, retailers, and we just need more hands on the brand front, which I think is what differentiates us from dupes. It's what makes us stand above all these, you know, cheap kind of alternatives are out there. And it is important. And we want to. We love having new people in the office. I think I want to make that New York City office vibrant, full of people and creative, full of trash.

Speaker A: I'm telling you, one more person.

Speaker B: But it's always going to be Lee in charge of trash. Okay. No one else, just to be clear. So, no, I'm excited for that and I want from. I think fresh energy is important. It's not that I'm saying let's never hire humans again. I think I'm just excited about what AI can bring us, which has a ton of efficiency and just making us smarter.

Speaker A: And I think it does make, uh, sense.

Speaker B: We were smart even before AI, right? We never overhired. So I think that doesn't change for us. It's just now I see this opportunity to be faster, better, smarter, and so a lot of fun things that we do. And it's fun.

Speaker A: I Think it's so much more fun to have a small team because we're all touching different elements of it and even though it's more stressful because you're doing more things, but honestly with AI, I feel like I'm doing a lot less things in a great way. Um, like, or I least get to focus on the things I really, really love or I'm really good at. But with a small team, it's just like we know everybody and it's just. Is like we're just ridiculous. Like we had this, like we had this guy come in the, the other day to like pitch us an idea. The entire team was sitting around the table listening to this idea.

Speaker B: Kind of an OPS conversation. But you know, a product designer was there.

Speaker A: Yeah.

Speaker B: Team was there.

Speaker A: Like, and we were just like, yeah, exactly. So all of us were involved in this conversation and we were all just like laughing and being goofy and it just felt so organic. And I actually left that meeting thinking to myself, this is fun, this is fun. And I just love. I can be my authentic self, which is ridiculous in a work setting. And we can do that because it's like small enough for us to all know each other and know like the real dynamics. It hasn't gone.

Speaker B: Yeah, totally. I think it's harder with a big team. Right. You don't know everyone and the dynamic.

Speaker A: Exactly.

Speaker B: Don't necessarily click.

Speaker A: Exactly.

Speaker B: And we've seen that in some of the companies we worked at. Uh, the acquisitions.

Speaker A: I think managing employees is one of the hardest things. Ah. To do.

Speaker B: It's so hard. And I will say that. And you can agree, like as managers, not having to manage as many people is huge time back in our hands, frankly. And it's so time sucking to have to manage more.

Speaker A: Yeah. Like, oh my gosh, like the like one on one meetings and stuff. Like not having to do that.

Speaker B: Uh, the one on one meetings and the expectations and the growth trajectory. It's a lot of feedback on like

Speaker A: how am I doing, Alex?

Speaker B: Yeah, no, but it's whatever. No, but that makes that sound awful. No, but it's.

Speaker A: But this is the honest truth. If you are an employee and your boss and you're asking for feedback from your boss all the time, it's annoying. Just be exceptional.

Speaker B: Just. Yeah.

Speaker A: Don't ask for feedback. Like, just like. But anyways. No, but um, listen, if you are a brand and you have more than 12 people and you're not doing a hundred mil a year, you should reach out to us.

Speaker B: Mhm.

Speaker A: And I promise you, Alex and I can change the way you are running your business.

Speaker B: This has happened. People founders have m reached out to us to look at their org chart and literally tell them who to keep and who to let go. Because there's a lot of brands that have raised a lot of money in the golden age of fundraising a couple years back for D2C and that now found themselves with these big teams and being like, okay, like, now new stage of. Of growth where actually I need to optimize on margins more so than I need to optimize for growth.

Speaker A: So I really think, like, look at your team, and if you think you can be doing something more efficiently, we would love to talk to you. Because this is like, honestly, I love talking to other brands on how they can run their business better to make more money, do what they're doing better, be smarter. With the resources that you have today and with the team that you have today, like, how can you make your team so much more powerful? Right? Like, how can you make each one of your team members make more revenue? Um, and I think that's the magic we're unlocking and hulking. I think we've learned a lot on how best to do that.

Speaker B: Yeah, definitely. I'm excited. We'll share more on the AI Stuff in the next episodes because there's so much to talk about. We're still finalizing it, but there's a lot of magic there that we're very excited to share with you all. Thank you for listening.

Speaker A: Thank you for listening. Talk to you soon. Bye.