The Dark Side of Scaling: Lessons from Growing a Business from $12M to $120M in Three Years

Success is a double-edged sword. Scaling a business from $12 million to $120 million in just three years is the kind of accomplishment that many entrepreneurs dream of. But behind the headline-worthy numbers lies a sobering reality - one filled with relentless pressure, regulatory strangleholds, burnout, and ultimately, hard-hitting consequences for the people who made that success possible.

The Weight of Rapid Growth in a Highly Regulated Industry

We operated in a heavily regulated industry, one where the rules were changing almost weekly, often constricting our ability to operate effectively. We knew from the outset that our meteoric rise wouldn’t last forever - we referred to it on a regular basis that it was a dash to the cash; the regulatory environment was unsustainable, and the industry was evolving in ways that would eventually suffocate us. Yet, the sheer momentum of success, and the resources that came with it, made us comfortable – too comfortable. We were making money, expanding aggressively, and hitting milestones that few businesses ever reach.

But comfort in business can be a dangerous thing - especially when it blinds you to the necessity of future-proofing your company.

The Missed Opportunities That Could Have Made the Difference

Looking back, one of my biggest mistakes was failing to push the diversification of our business model more. We had a massive, loyal customer base. We had fulfillment capabilities that could have been leveraged beyond our core offering. We had a robust call center that could have been used to support other businesses. We had tax advantages that could have been used strategically.

But we were so consumed by keeping up with the growth, managing regulatory changes, and putting out fires that we set very little time aside to step back and ask: “What happens when this ride is over?”

We dabbled in a couple different verticals, but had we taken more time to build out those and other ancillary businesses - leveraging the assets and expertise we had developed - we might have had something to pivot to when the industry inevitably shifted against us. Instead, when the walls started closing in, we had no backup plan.

The Fallout: Selling to a Competitor and the Pain of Layoffs

The writing was on the wall. Without a path forward, the business was sold to a competitor. While some employees were fortunate enough to transition to the new owner, the harsh reality was that the majority - 120 out of 160 people - were laid off.

This was, without a doubt, the most gut-wrenching part of the entire experience. It wasn’t just a business decision; it was a human one. These were people who had given everything to the company, who had thrived in a high-energy, high-reward environment, and who had built their lives around their jobs. These were great people with families who trusted me through the great times.? Telling them that their journey with us was ending was one of the hardest things I’ve ever had to do.

I will never forget the look in their eyes as I stood in front of them delivering the news. Watching grown men break down in tears, knowing that their livelihoods and their families were being impacted - it was absolutely devastating. Truth be told, I wanted to collapse in a corner and breakdown myself but out of respect for those standing in front of me, there was no way I could have done that – it wasn’t about me.? I could justify the business rationale all I wanted, but the emotional toll was immeasurable.

The Biggest Lesson: Success Is When You Should Be Planning for the Downfall

Among the lifetime of lessons I learned during those three intense years, the most painful one was this: when things are running on all cylinders, when business is booming, when everything is going as well as you could hope - that is precisely the time you should be preparing for when they’re not.

It’s easy to get caught up in the excitement of rapid growth, but the reality is that very few businesses maintain an upward trajectory forever. Whether it’s regulatory changes, market shifts, economic downturns, or competitive forces, something will eventually challenge your success. If you don’t have a plan in place for when that time comes, you risk losing everything you’ve built.

Looking back, I wish I had been more proactive. I wish I had pushed harder to build out new revenue streams, diversified our operations, and dedicated more time to plan for the inevitable downturn. If I had, perhaps we wouldn’t have had to let so many people go. Perhaps we would have had an alternative path forward.

But hindsight is 20/20, and while I can’t change the past, I do use those lessons to shape the future for my clients.

For any business owner experiencing rapid success - take a step back and ask yourself: What happens if this all goes away tomorrow? If you don’t have a solid answer, it’s time to start building one.

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