[Breakdown]: How To Build An 8-Figure Business With Todd Herman’s 5 Stages Of Business Growth

[Breakdown]: How To Build An 8-Figure Business With Todd Herman’s 5 Stages Of Business Growth


  1. [Stage 1] – Start up
  2. [Stage 2] – Ramp up
  3. [Stage 3] – Build up
  4. [Stage 4] – Scale up
  5. [Stage 5] – Leader up

This article is designed to give online business owners and anyone involved in entrepreneurship a framework for growth they can take and run with. We’ll dig into the pains and growth opportunities present in each stage of a business and explore how you can apply those to your own journey.

These stages of growth are based off of Todd Herman’s recently updated 5 Stages of Business Growth.

If you don’t know Todd Herman, you should.Full video Interview with Todd Herman CTATodd is many things: an angel investor, speaker, author, and ultimately an 8-figure business owner. He built a powerful network of corporate and SMB clients across a variety of channels and products.

This is also the same Todd Herman who has worked with 86 Olympians (including some who recently competed in Seoul) and over 10,000 athletes.

Todd Herman helps ambitious people perform, period.

Pretty cool right 🙂

In other words, he knows how to build businesses, and he has fine-tuned those systems into a framework you can adopt and apply to your business. Your idea may be unique, but the challenges and growth pains you’ll experience are almost certainly not, and that means you can learn from those who have walked the path before you.  

I had the privilege of sitting down with Todd and talking to him for about an hour or so, and you can check out that super awesome interview here 🙂

When it comes to explaining the stages of business, I think we can all agree it’s best to do so with an actual, viable business. We decided to use Wild Audience..

I know… big surprise. 🙂

If you’d rather see how we increased a client’s conversion rate by 6x

Go here.

I’m going to do my best to cover Wild Audience’s pain points at each stage, the decisions that helped us overcome them, and ultimately how we grew into a network of over 30,000 business owners.

By pairing our story with Todd’s 5 Stages of Business Growth framework, I think you’ll walk away with some really useful stuff.

I’m no Todd Herman, but I like to think I’m on my way. 🙂

My goal is to help save you some time and offer some direction in your business. Having an idea of what is coming while analyzing the present and learning from the past is the best pathway to success.

Each stage will begin with a little video talking about where I was at that stage, and then I’ll follow it up with some more insight from Wild Audience’s perspective.

Let’s do this!

Quick note:
I have never worked for or with Todd Herman. Everything below is based on my own experience as founder of Wild Audience and being an actual fan of his work. Take a look at the interview, and you’ll see how excited I was to talk to him. 🙂 Also, Todd is updating their marketing strategy a lot right now so what I share with you below might not be their most recent version.

Stages of Business Growth #1: Start Up


The startup stage is the beginning of everything. It starts with your idea — your dream and ends when you release your initial MVP.

Key objective:  

Validate your product & market.

Pain points:

  1. Feeling of self-doubt.
  2. Getting overwhelmed.
  3. Feeling like your business is unique in its challenges.
  4. Inertia.


  1. Talk to your market
  2. Listen to your market.
  3. Know WHAT to focus on and WHEN.
  4. Just start!

The startup stage has two main components: a dream & an MVP.

This is the stage that kills more businesses than any other.


Todd surveyed over 40,000 wantrepreneurs and entrepreneurs and found that fear of failure was the overwhelming response for why people were scared to take the next step.

Scared of what their families would think if they failed. Scared of what would happen if they lost money.

In other words,

It’s the emotional experience of business that was scaring people away.

Fortunately, there’s a way to handle both fears of failure & make sure you don’t waste money: market validation.

The “startup” stage is all about four goals:

  1. Validating your audience
  2. Validating your product
  3. Building an MVP
  4. Acquiring initial sales

The key is to validate your audience and product before you ever build it. 🙂

Start Up Step #1: Build A Minimal Viable Audience

A.k.a. — what are people willing to buy, how many of them are there, and how can I reach them?

Let’s take a little trip back to 2015.

Wild Audience didn’t exist.

I was in Silicon Valley working for a Y-Combinator company called Close.io.

Life was good! Steli Efti was an incredible boss.

I enjoyed it, but I knew I wanted to start my own company.

So I decided to go to Costa Rica. 🙂

I cut my expenses to a couple hundred dollars a month and easily covered that with a part-time marketing gig…

Now all I had to do was build my business.

This is all I knew…

  1. I wanted to start my own online business and potentially transition in SaaS.
  2. I didn’t have a tech team.
  3. I didn’t have the money to build a product upfront.

Not too much to work with. 🙂

I found the best place to find business inspiration is the crossover between the person you have been, the person you want to be, and rough market potential.

Your interests. Your passions. Everything that makes you who you are now… but also contributes to where you want to be 🙂

For me that was marketing automation, AI, and education.

Now, normally at this point in the start up stage, people would advise you to build a prototype of your product, lean canvas, raise some initial funds, build an MVP…

Exciting stuff, right?

Well, yes. But Todd recommends going about it a bit differently.

Here’s how Todd describes this process:

“Getting out into the market and validating the idea with the target group you want to serve is a necessity. If more people would take the approach of the mad scientist in the laboratory, attempt different combinations, and then go out and introduce the idea, product, or service to target people—then we’d have a lot more great things created – and probably a helluva a lot happier people.”


Identifying product-market fit before heavily investing and pivoting as needed is the key to building a business you can count on. The product you envisioned and the product your market needs may be further apart than you think.

For Wild Audience, I decided to use education as my testing ground for my product & as a way to finance my eventual SaaS business.

Here’s what my market validation steps looked like:

1) Market Research:

I knew I was interested in marketing AI, and I knew marketing/sales funnels were the crux of that tech. With this in mind, I started thinking about all the businesses that need better funnels.

The answer? Everyone wants better funnels.

It’s the key to building a successful online business—the key to increasing revenue—the key to everything!

Now I just needed to begin building a tribe and identify what problems they needed help solving the most.

Here’s what I did with Wild Audience:

  1. I started with one blog. This blog, in fact. 🙂
  2. I offered a free email course through lead magnets.
  3. I began listening and observing my customers for product direction.
  4. I built my initial educational MVP.

How did I learn from my initial tribe?

  1. I observed what questions they asked in email conversations.
  2. I read & analyzed what they talked about in relevant Facebook Groups.
  3. I talked to my customers about my paid educational products.
  4. I asked questions. I surveyed. I kept my ears open.

Listen. Communicate. Iterate.

That should be your mantra in the start up stage.

Collect as much information as you can and compare it to your idea for your initial product. Does it match? If not, how should it change?

Improve your idea and take it back to your audience. See what they think.

They’re going to know best—after all they’re your future customers. 🙂

For more on validating your audience, go here.

Start Up Step #2: Build A Minimal Viable Product

Once you know your audience’s problems  and have interest (preferably monetary proof via educational products) in your topics and potential MVP, it’s time to start building.

At this point, you already have a huge advantage over anyone who is building an MVP without an audience: an audience. 🙂

This allows you to:

  • Access information and data to figure out what problem to solve
  • Build an MVP your audience cares about (because they actually have that problem)
  • Get instant feedback on your MVP while you’re building it
  • Attract early adopters because you have a list of people who want to test your newest stuff
  • Finance your MVP via existing educational products
  • Essentially build an MVP together with your audience—ensuring a perfect product market fit.

By having an audience before you build an MVP, you can minimize the risk of building an MVP no one cares about.

Start Up Step #3: Determine Your Future Trajectory

Okay. At this point you’ll have an engaged audience and an MVP.

Where do you go from here? You need to be thinking long-term.

For Wild Audience, I wanted to eventually create a behaviour-based automation product using AI…

Okay. So I knew a SaaS product was my next step…

But what then…?

Well, I knew I wanted to make enough money from my educational products to fund the creation of my SaaS products.

So in very simple terms, Wild Audience’s trajectory is:

  1. Build an engaged audience
  2. Build an educational MVP (Relationship Funnel)
  3. Scale my educational business
  4. Use those profits to fund a SaaS business
  5. Convert my educational audience into the SaaS early adopters
  6. Scale that business

And just like that, I have tangible steps to work towards. 🙂

Key takeaways:

  1. Validate and build an engaged audience through educational content first.
  2. Work with your audience to test your MVP’s validity.
  3. Build and iterate with audience feedback.
  4. Use this audience to generate initial interest & sales.
  5. Figure out your rough trajectory.

 Stages of Business Growth #2: Ramp Up


Ramp Up is all about creating the systems that will establish and promote the initial growth of your product & audience. You aren’t investing heavily into infrastructure yet, but you’re laying the initial foundation to do so.

Key objective:

  1. Build your initial marketing strategy and funnel systems.
  2. Establish company culture.

Pain points:

  1. Hitting a ceiling — becoming a “lifestyle” business (this is a choice!).
  2. Paralysis of choice.
  3. Disconnect between a more in-depth marketing funnel and your existing audience.


  1. Innovate > invent.
  2. Trust your data.

Now things are getting “interesting”. 🙂

We have our audience.

We have our MVP.

We have some initial sales…

We could even be comfortably profitable.

For Wild Audience (and for almost all online businesses), your system starts with your funnels.

Specifically your marketing and sales funnels, which I would argue are really one in the same these days. 🙂

How To Build a Ramp Up Funnel For Your High-Ticket Service Business

I started “ramping up” Wild Audience in late 2015. I had beta-tested Relationship Funnel, and I knew people were interested in what I was selling, but the outreach and initial audience building were extremely time intensive, and I wanted to build out my evergreen funnel even more.

I was also teaching “relationship-based marketing” and knew this was a perfect opportunity to use my company as a larger case study.

The first thing to do in the Ramp Up stage is to reevaluate your “value ladder”—the level of services you plan on selling so you can identify your ideal customer trajectory.

While the names have changed, this is essentially the funnel we developed at the time:

Wild Audience’s Value Ladder

  1. Funnel Crash ($12 tripwire)
  2. RF Accelerator (profit funnel)
  3. Automation Rebels (break-even funnel)
  4. Wild Mail (backend)

I’ve linked you to the individual landing pages if you want to get an idea of how we sell these (and upsell the next ones).

This will organize your funnel creation process. Now that you’ve identified every piece, you can design your funnel to “pull” each customer from offer to offer.

For more on value ladders, check out our VideoFruit case study.

Build Your Relationship-Based Marketing Funnels

Relationship-based marketing funnels are how I built Wild Audience.

How do they differ from traditional sales funnels?

Well to start…

  1. They’re evergreen.

2. They give leads the freedom of choice in how much and how fast they want to engage with you.

3. They center around essential belief installations and use psychology to foster engagement.

Let’s take a look:

Overview of Relationship Funnel

                The Relationship Funnel

Download the Relationship Funnel graphic in high quality CTA

For any online business, this is the system you need to create in your Ramp Up stage. It will serve you for YEARS to come if you set it up correctly, and expanding your range and specificity within it is always an option.

It’s essentially a combination of lead generation ads, emails, and upsells that establish expertise and engagement and ONLY sell the most relevant products to the most engaged audiences.

These funnels work:

RF Social Proof #2

For a complete rundown of relationship funnels, go here.

Key takeaways:

  1. Finalize your value ladder.
  2. Use respect-based marketing to develop a passionate core audience.
  3. Expand and build out your core funnels.

 Stages of Business Growth #3: Build Up


Build Up is the stage where you create everything you need to scale up. It’s the internal scramble before the storm. 🙂

Key objective:

Build long-term infrastructure and systems to prepare for scaling.

Pain points:

  1. Adjusting existing systems
  2. Letting go of control


  1. Don’t do it all yourself! Hire a business or operations manager if you need to.
  2. Build a foolproof data & analytics system.
  3. Check and proof all existing processes & systems.

Build Up is all about preparing for future scaling.

If you plan on spending thousands of VC & personal cash on marketing in the Scale Up stage, then you need to make sure that:

  1. Your internal processes are efficient. This includes your business hierarchy (management layout), having a company culture that can be taught & understood by the new employees, etc.

2.   Your “stack” is foolproof and ready for growth. This includes your hosting & all of the tools you currently use. You need to predict what’s going to happen when you 10x, 25x, or even 100x the amount of users.

3.    You have the space for growth. For some businesses, this includes actual office space & being able to provide for the human capital you acquire.

For each of these you need to be thinking about the future costs associated with each and build them into your financial projections.

Be liberal with your estimations—allowing a healthy margin of error (5%) or so on each.

For us, this was when we analyzed ALL of the tools we were using and if they were prepared to take the next step for us.

We run a lean, education-based business, so if you’re an online course creator or online business owner, then we’d be using a similar stack.

That being said, even if you deliver physical products many of ours will apply to your eCommerce store / internal processes.

Here are all the tools we used to “ramp up” our internal system.

View the page with all the links here

View a video breakdown of these tools here

Business Growth Tools #2

We analyzed potential growth costs and pains before settling on this stack.

The amount of time we spent on the phone & trying out new services! I do not miss this part of the process.

I hope this saves you some time. 🙂

Moving on… here are some thing I wish I understood or paid more attention to at this stage.

The Bigger You Get, The Harder It Will Be To Personalize Your Subscriber Experience 

This is where smart automation comes into play. 🙂

Look for ways to use technology to retain the level of service your customers are used to. You’re going to have to make some sacrifices, but it’s a necessary growing pain.

Be very careful, here!

The last thing you want to do is lose your tribe’s trust as you build these systems—use their feedback like you did in the start up stage. Listen to them and make sure you continue delivering your product and value to them while making room for new players.

If your business requires hands-on service, then you’re going to have to start identifying customer service candidates to hire in preparation for the next stage…

Key takeaways:

  1. Check each and every tool and part of your business—especially your internal processes. Run hypothetical situations to feign how your system will react under pressure
  2. Don’t forget to prioritize your customer experience while building new systems. You’re going to have to make sacrifices, but make sure your value add is still compelling.

 Stages of Business Growth #4: Scale Up


Scale Up is all about one thing and one thing only: growth.

Key objectives:

  1. Invest heavily in marketing.
  2. Determine which outreach & lead generation mediums are best for you and your existing funnels.
  3. Consider the need for and potentially acquire VC and/or other investments.
  4. Build a team you can count on.

Pain points:

  1. Overcoming the fear of drastically increasing spending.
  2. Growing too fast or not fast enough.
  3. Existing business and processes will have to be updated or remade.


  1. Be methodical not emotional.
  2. Use data and analytics to guide you.
  3. Take calculated risks.
  4. Lean on your team for support.

Stage 4 (scale up) It’s when you take your existing ROI and bet on it. It’s when you really test the weight of the market against your business model.

It’s when you not only bet on yourself, but on all the systems and processes you’ve built to get here.

Sound scary?

Well, it can be 🙂

But that isn’t a bad thing.

I’ll let you in on a Wild Audience secret…

This is where we are now!

It’s been nuts. In the last two months, we’ve hired:

  • Multiple content writers
  • A content strategist mastermind.
  • A distribution ninja.
  • Facebook advertisers.

It’s been weird. I started this business and ran it for a while before bringing on my good friend James Pazmino to help out.

Then it was just us two for a while…

And now there are 5x as many people… and this is just the beginning!

Here’s what we’ve learned about this stage already:

Be Selective With Your Team 

If you want to be the best, hire the best.

The company isn’t going to be just you and a few others anymore.

Your people are the company, and you need to hire people that understand and reflect your vision.

Here are some strategies to employ when hiring:

  1. Get specific. If you’re hiring an advertiser, don’t just hear about where they worked, hear about what they worked on and how involved they were in that project’s success. Get numbers. Get charts. Call references.
  2. You should be impressed. If you don’t think to yourself, “Damn. This guy knows what he’s talking about.” during the interview, then maybe reconsider. Give them the opportunity to demonstrate expertise by asking open-ended questions and discuss how they would tackle the very problems you’re hiring them to solve.
  3. Get an idea of where they’re at. Do they care about your business? Your mission? What are their professional goals? If you know they have a history of leaving companies or that their actual dream is to become a standup comedian…  then maybe they’re not the best fit.
  4. Start with a trial project. Especially if you’re working with freelancers, you don’t have to start them on a salary. Employ them in a trial project to get an idea of how they work and then determine the next steps.

Make Data Your Best Friend

Take your funnel metrics for drinks. Go surfing with your overhead costs…

Seriously. You’ll be dreaming of spreadsheets and financial projections during this stage. 🙂

Your job as an online business owner or manager is to foster growth—primarily through team management (delegation) & innovative analysis.

For us, we use a combination of Google Analytics, Wild Mail, and Hotjar to keep track of our funnel & purchase data (see our complete list of tools).

One trick is to use your value ladder to identify conversion bottlenecks. If your awareness, high-level content is doing fantastically (click rates are high, time on site is high), but your conversion to tripwire is low, then there’s either a disconnect between the content and the offer OR the type of people your ads are attracting and the offer.

If your conversion rate from tripwire/RBS series to your main product is low (<2%), then you’re either giving too much away in your free series for it to seem valuable or you’re not pitching your main product correctly.

The solution? Ask the tripwire customers who are extremely engaged but haven’t converted why they haven’t bought yet.

Build a Culture That Prioritizes Experimentation 

On top of that, during the scaling period it is critically important to test everything. If you’re jumping from $5k a month in ad spend to $50k, you better be damn sure you’re testing between mediums, channels, existing assets — you name it.

Be rigorous. If a test fails, ditch it in move on. If it succeeds, continue to iterate. Encourage your employees to innovate by promoting autonomy and brand education. If your employees are just as in tune with your brand and direction as you are, then you can trust them to run experiments & push themselves to their limits. It’s more fulfilling for your employees and can have huge upsides for your business.

Let’s look at an example of an experiment we just ran:  

We couldn’t decide whether or not it was better to point new leads who have downloaded a lead magnet to a webinar registration or RBS series.

So, we created two landing pages that were identical but led to 2 separate TYPs… One that promoted our RBS series, and one that promoted our webinar.

Here’s the duplicated landing page:

Lead magnet landing page example

(If you want that ebook, you can grab it here)

Okay. Cool.

Then we sent them to one of these two landing pages to see which step converted better, webinar or RBS series:

And here’s the webinar opt-in page:

WA's Webinar Landing Page

These both look like solid options, right?

Well… we found that the RBS series converted at a much higher percent (>5%).

The last thing we need to keep an eye on is whether or not the people who converted to the webinar first end up converting to sale at a higher rate.

But! This is just one example of the multitude of tests you should be running across your online marketing & sales funnel business WHILE continuing to put more and more traffic into the high performers.

Key takeaways:

  1. Trust the systems and processes you developed. You already did the work to prepare for the increase in spend at this stage. Now it’s time to turn up the heat.
  2. Build an all-star team whose goals align with yours.
  3. Build a culture of marketing experimentation.
  4. Pay close attention to the metrics of long-time customers & new customers. Specifically LTV & cohort retention.

 Stages of Business Growth #5: Leader Up


Leader Up is about finding the long-term human capital to transition your company from a “start up” into a stable, sustainable business.

Key objective:

Acquisition and Responsible Leadership

Pain points:

  1. Vulnerable to more nimble, innovative companies.
  2. Potential for leadership failure.


  1. Use your network.
  2. Take your time.
  3. Complement your expertise
  4. Pay attention to the market. Don’t be afraid to get rid of people that aren’t performing.

Stage 5 is all about promoting long-term sustainability through top-tier talent that can successfully steer the ship into new and bright waters for years to come.

Even if you’ve done a fantastic job through the first four stages, stage 5 is where a business transitions from a start up into a sustainable business.

You may have to make sacrifices in control to allow someone with more experience navigating this stage to help, and that’s okay 🙂

At this point, you’ve made it.

Finding The Right Leader

The truth is, it is very rare for a founder to develop all the skills a business needs at this point in the game, and that’s okay.

It will be your job to equip your company with veterans who are fantastic at operations & day-to-day operations.

This may be you. It may not be.

If it’s not, some of the first places you should look when expanding your executive team are:

  • Ask existing partnerships for suggestions. You’ll have undoubtedly made a variety of connections in your industry at this point. Pick the people you trust the most, and ask them for suggestions.
  • Hire an executive headhunter. These services are expensive, but they often have a wide reach and talent you can trust.

Take your time and use the same processes you developed while hiring your team to make this decision.

Considering Acquisition

At this point you could also be considering an acquisition, which would potentially also fulfil the goal of finding new leaders.

If you’re considering selling, you should:

  • Keep rigorous books on revenues, expenses, profit analysis, etc.
  • Seek out buying groups or companies who you think would be interested.
  • Entertain bids from multiple companies.
  • Hire a valuation company you trust if applicable.

Key takeaways:

  • Keep a close eye on potential buyers and market trends. Make a list of companies and begin acquisition conversations if desired.
  • Invest in your leaders’ development. Tie their incentives to the success of the company.
  • Leadership is a mindset, not a goal.


Look. Obviously, businesses carry unique challenges, but most of the problems you’ll face have already been tackled by someone else before. Tapping into that knowledge is one of the best things you can do for your business. I hope that by learning a bit more about our journey in relation to Todd’s 5 Stages of Business, you got a better idea of what to watch for as you move yours forward—regardless of which stage you’re in.

5 Stages of Business Growth quick recap:

  1. Start Up: Validate market & product. Build MVP & start getting initial sales.
  2. Ramp Up: Build out your product and lay basic company structure and systems.
  3. Build Up: Invest in long-term infrastructure and systems. Establish your foundation for scaling.
  4. Scale Up: Develop your team, leadership, and scale your business with intense marketing.
  5. Leader Up: Maintain market share and growth trajectory through “acquisition and innovation.”

Each stage brings its own challenges, but they also bring their own excitement. Scaling is so stressful right now, but I’ve also never been more excited—expanding my team and pursuing growth is thrilling…

I’m also excited for future partnerships and leaders down the road… 🙂

And remember that for online businesses, your sales funnels are everything. They’re your main revenue driver, your key to scaling, your framework for developing creatives, and so much more.

By strategically planning every asset to fit into a funnel, you won’t waste resources developing assets that won’t serve you in the long run. If you want to learn more about how the respect-based marketing funnel system we discussed can transform your business at any stage, then go here.

See how we maintain a funnel conversion rate of 8% at $100 productsI think you’ll like what you find 🙂

And what stage are you at?

Have you experienced any breakthroughs or pain points you can share?

Let’s chat in the comments below.

Talk to you soon, and good luck!