(And why the business advice you’re being given is probably one step ahead of where you are)

In October 2008, Howard Schultz spent thirty million dollars on a three-day conference.

Ten million… a day.

He did this three weeks after Lehman Brothers collapsed, in a quarter where Starbucks profits had fallen ninety-seven percent against the year before, having already closed six hundred stores and cut a thousand jobs.

The board told him not to do it.

He flew ten thousand store managers to New Orleans anyway.

They spent the first day not in a conference hall but in the Ninth Ward, painting and rebuilding, fifty thousand volunteer hours between them, in a city still three years into recovering from Katrina.

Then they had the meeting.

If you’d asked any analyst that month what Starbucks should do with thirty million dollars, not one of them would have said this.

Cut deeper. Discount. Drive traffic. Franchise. There were people telling him to reduce the quality of the coffee to protect margin.

He did none of it!

Nine months later — Starbucks posted a quarter that beat every forecast, and the stock rose seventeen percent in a day.

By 2011, the share price had gone from single digits to the high thirties.

The story usually told about New Orleans is a story about morale. About a leader who believed in his people.

I don’t think that’s quite what happened.

While Schultz was away from the company, Starbucks had grown very fast. Thousands of new stores. Automated espresso machines, because they were faster. Pre-ground coffee, because it was more consistent. Breakfast sandwiches, because they lifted the ticket.

Every one of those was a sensible decision.

What none of them did was build the layer of people who’d have to carry the business through what came next.

Starbucks had store managers running multi-million dollar operations who’d never been told what the company was actually for.

You can’t discount your way out of that. You can’t run a promotion at it.

Schultz spent the thirty million on the only part of the business that could fix the rest of it, at the exact moment every instinct in the room said spend it on demand.

I watch a version of this happen to founders most months.

A client of mine is finally getting her hiring and her systems into place. Real progress, the unglamorous kind that doesn’t photograph well.

Inside about two weeks, three separate people who genuinely care about her suggested she should do a TEDx talk, write a book, and host a roundtable.

Her chiropractor has a name for this. She calls them the sirens.

They turn up right before you make a real move, and they’re never trying to hurt you. That’s what makes them hard to ignore.

Every one of those suggestions was good.

What I said to her was that she didn’t need marketing right now.

Which sounds odd coming from someone whose whole job is business growth.

But she was already turning away referrals she couldn’t serve…2-5 per week!

Adding demand to a business that can’t absorb the demand it has isn’t strategy. It’s a faster route to the thing that’s already going wrong.

The sequence matters more than the moves.

Hire the person. Let the systems run long enough to prove they work without you watching. Open the gates to the referrals you’re currently declining. Then go and build the public presence, once there’s something behind the door when people knock.

In that order, each one makes the next easier.

In a different order you get a founder with a TEDx talk, a waiting list, and a business that can’t deliver on either.

Here’s the part I think is totally unfair.

Nobody tells you when you’ve crossed from one stage into the next.

What got you to half a million doesn’t take you to a million and a half. What works at four million is different again.

And the advice you’ll be handed at any point is almost always the advice that worked for someone one or two steps ahead of you.

It isn’t bad advice. It’s just early.

So you implement it, it doesn’t do for you what it did for them, and you conclude something is wrong with you, or your market, or how hard you’re working.

Usually the only thing wrong is the order.

Ten million dollars a day to fly coffee shop managers to Louisiana during a financial crisis is an absurd amount of money.

It was also the cheapest part of the whole exercise.

If you’re somewhere between a hundred thousand and ten million, and you’ve got a list of good ideas you haven’t got to yet, the useful question probably isn’t which one to do first.

It’s which one is available to you right now, and which ones are still one step ahead.

That’s most of what I do with founders.