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If I Had to Scale a Business in 2026, I'd Do This — Transcript

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0:00My name is Pamela Brewington. I sell
0:02residential cleaning business to
0:04high-end clients.
0:06>> Uh we do 1.5 million in revenue and I
0:10want to be at 15 million revenue by open
0:1310 locations in a year.
0:14>> Okay.
0:15>> Uh what is stopping me right now is I
0:17realized that my lead generation system
0:20that out was outsourced was very very
0:23low quality. So I'm building it inside
0:26in house and that's a lot of work and
0:29I'm learning from everything from zero.
0:31So I'm doing it from a scratch
0:33completely and that's very slow but I
0:37think it's worth the investment to do it
0:38right so I can serve all the locations
0:41that I want to do.
0:42>> You want to open 10 or you have?
0:44>> I want to.
0:45>> Okay, cool. Just make this is going to
0:46be really stressful if you just open 10
0:48in a year. Um okay, this makes me feel a
0:50little bit better. Okay, so what's the
0:53question?
0:54Um
0:54>> what's holding you back?
0:56>> No, I don't have any question.
0:58[laughter]
0:59>> If you want
0:59>> I mean that what is stopping me. It's
1:01like I
1:02>> Yeah,
1:02>> I guess that is like uh how to build
1:05that from
1:06>> you know from a scratch.
1:08>> So I'll say this um
1:11I'm first off I'm a fan of having
1:13vendors. I'm okay with having vendors. I
1:16want to make sure that no vendor owns
1:18how my business works.
1:20And so I see attract, convert, deliver
1:22as kind of the three elements of
1:23business that you do not outsource. How
1:25do I get as in like the core elements?
1:27Now I can have assistance from vendors
1:29who do specific tasks within that. But
1:31if they leave, I should know how to do
1:32it because if I don't know how to do it,
1:34then I fundamentally missing one of the
1:35three legs of the stool that allows a
1:37business to be a business or at least
1:38the founder to be the person who can
1:39actually grow the thing. And so right
1:41now you have a lead genen issue, right?
1:44Um and what's your plan on getting
1:45leads? PPC or is it are you doing um
1:48>> uh I'm trying everything. I mean
1:51referrals like
1:53>> well then let me give you this
1:54recommendation
1:55>> pay out
1:56>> if you're well you are local so
1:59>> I would say that
2:02how developed is your sales process?
2:06>> How what
2:07>> developed is your sales process?
2:11Okay.
2:11>> Do you like when customers come in right
2:13now, how are they coming in
2:14>> right now for Google on referrals?
2:17>> Google and referrals.
2:18>> Google, are you spending money on Google
2:20or is are you sure it's from the money
2:22you're spending or is it people
2:23searching for you that were already
2:24searching for you because of
2:26>> local ads?
2:27>> It is PPC. Yeah.
2:28>> Okay. Got it. What percentage of the
2:30businesses come from PPC?
2:32>> Right now I will say 80%.
2:35>> 80. Okay. Got it. Interesting. Um, and
2:38so right now, what is the issue? If 80%
2:40of the business come from PPC, what is
2:41preventing you from doing more PPC?
2:43>> Uh, the thing is low quality. I mean,
2:45they're they're very expensive like over
2:48100.
2:49>> I'm tell you're missing a sales motion.
2:50>> PBC, just so you know, PBC leads are the
2:53best leads
2:54>> on the on the hierarchy of shittiness.
2:57Uh, PBC are second to least shitty. Uh,
3:00the best are obviously referrals, which
3:02you love. Everybody loves a referral. Uh
3:04but the next best um well there's
3:07content and then and then you have uh
3:09PPC leads.
3:10>> So you're getting the best one. The true
3:12worst is like get Google display network
3:14like leads and see what happens. Um but
3:17the problem is that you just don't have
3:18the right friction. Are you working with
3:20us after this?
3:22I mean you don't have you can do
3:23whatever you want. Uh no because I mean
3:26developing sales motion is like kind of
3:27what we do. Um and so uh you just you
3:29need the right amount of friction. Like
3:31if we think about for anything like
3:32zooming out um
3:35it's kind of like the midwip meme of
3:37like I feel like I've had enough
3:38marketing and sales in my life that I've
3:39like gone from you know just just eat
3:41protein and add more weight and all at
3:43the end it's eat protein add more weight
3:44in the middle it's like sets reps and
3:46whip rats periods and all this middle
3:47stuff. Um
3:50marketing just comes down to adding the
3:52sweet spot on friction. It's all it is
3:54because we know that at the at one
3:56extreme if just say like uh here's my
3:58price, call this number or here's this
3:59price and then just click and buy
4:01doesn't work for most people. On the
4:04other extreme, um having someone fill
4:07out a 100 forms is probably not going to
4:09work either because there's too much
4:10friction. And so it's like we just need
4:11to find the sweet spot on friction. And
4:13so right now if you're getting leads but
4:14the quality is not good, as long as they
4:16are people who have houses that want
4:18cleaning, we just need to add the right
4:19amount of selling in between to get them
4:21to buy. That's it. Okay. But I want to
4:24be in a niche. So
4:25>> you need a what?
4:26>> In a niche. I don't want like everybody
4:28that want
4:29>> Okay.
4:30>> So
4:31>> I mean you Yeah.
4:32>> You want to go highend. That means you
4:34add more highend. Yeah.
4:35>> Yeah. We just have to have more
4:36friction.
4:37>> Mhm.
4:37>> That's all it is. Again, so one thing
4:39this will happen this actually apply to
4:41just about everybody. So who here
4:44I'm going to guess 25% of the room. um
4:48has more than one avatar that you serve,
4:50one that makes you a lot of money, and
4:52one there's way more of that makes you
4:53less money, but you still need them to
4:55pay your bills.
4:57Way more than 25%. Nailed it. So, the
5:00transition of picking the avatar is a
5:02really tough one because you I get it,
5:03you have to pay your bills. One of the
5:06big shifts that has to happen is that
5:08you have to change your product offering
5:11and pricing. So, we might also have a
5:12pricing issue that we have to look at.
5:14But what ends up happening is that when
5:15you have two sets of customers called
5:168020, 20% that are the good ones, 80%
5:18that are shitty ones, we end up pricing
5:20somewhere in the middle because it's
5:21like a stretch for the 80 and the 20%
5:24are like, "Well, yeah, I can do that."
5:25And you're like, "Oh man, I love those
5:26people." But you might actually be
5:27underpriced on these people by like 2x
5:30of the correct avatar. So that if you
5:32were priced appropriately, none of these
5:34people would even get close to saying
5:35yes because you have this massive turn
5:36issue because these poor people, lack of
5:38better term, um can't afford the right
5:40prices, but you're still selling them.
5:42And so what has to happen is one we have
5:44to change the price and the sales
5:45motion. But the second one is an
5:46expectation change which is that your
5:49CAC you'll have to expect it and your
5:51cost per lead might go up 2 or 3x. But
5:54if we double our price for example our
5:56gross margin might go up by like 5x
5:59>> and we're more than good but most
6:01business owners will not make that jump
6:03which is why most people stay poor.
6:04>> Okay
6:05>> that makes sense.
6:05>> Cool. Thank you.
6:07>> Sorry. Now your now next thing I think
6:08that would be relevant for
6:09>> Thank you. Thank you for clarifying. Um
6:11yeah. So I guess that uh leads me the
6:14reason I asked you that first question
6:15like um you know what would you do? But
6:18I just in my head I just kind of
6:20something I've been thinking about
6:21doing. I haven't done it yet but
6:24>> I guess shutting down the coaching
6:26business but I still love teaching what
6:29I teach but in a way that is I guess
6:31more
6:33>> interactive or done for you. So for
6:34example instead of people going through
6:37a course which some people don't even go
6:39through it.
6:40>> Yeah. uh giving them like an interactive
6:42way of doing it. So like for example,
6:44hey, you know, you got to go find a
6:46product, but um you know there's a
6:48software that I created that actually
6:50helps them find the thing.
6:52>> Um so I don't know what do you think of
6:53that? Have you ever heard of anything
6:54like that where it's like
6:55>> I haven't heard of anything like that,
6:57but I mean I think you providing more
6:59services to increase the likelihood of
7:01someone's success is not a bad idea. It
7:02just depends on cost,
7:04>> right? Well, I mean now with AI you can
7:06create softwares pretty quickly, right?
7:08So I mean like in my head I'm like okay
7:09I have tons of knowledge when how to do
7:12all these things you know you put it in
7:14a
7:14>> so is the question should I add software
7:16to my existing offering so that I can
7:17increase the likelihood that people will
7:18succeed.
7:20>> Yes.
7:20>> Yeah. I think that's fine. I mean
7:21there's no if there's no real
7:22>> sell the courses but sell like uh you
7:24know you always say you I give my best
7:26stuff for free. Uh Austin over here he
7:29gives us best stuff for free and then he
7:31has his syllabi AI software. So I'm like
7:33this is that's a great idea where it's
7:35like he gives all his stuff for free but
7:37then
7:37>> they have to use your tool.
7:38>> They have to use the tool. So that I
7:40don't know that
7:41>> it's amazing on paper.
7:42>> Yeah.
7:43>> I have yet to see someone pull it off.
7:46>> I'll be the first.
7:47>> Okay. I just I just look at I'm again
7:50well
7:52hubris aside, right? Or you know ego
7:54aside I prefer to take bets where I
7:56think that like you it's your life. You
7:58can do whatever you want. Um, if I see
8:00that no one else has succeeded doing
8:02something, then I think there must be
8:04some fundamental assumption that I'm
8:05unaware of or that I'm making that is
8:08not true that is causing all these
8:09people to fail. Like what is it?
8:11>> And I'll tell you what my theory on what
8:13it is is that it is the wrong type of
8:15avatar.
8:17>> When you are promoting get-rich quick,
8:20get-rich easy, get-rich passive, you are
8:23attracting the absolute cesspool of the
8:25internet, right?
8:27I mean it I mean it is right. Um and so
8:31if you do that you have to there's so
8:34much effort that has to go in to making
8:36a scalable offering. Also if you really
8:38do it right it also won't be profitable
8:40for a long time. So it I take the
8:43position that the best businesses
8:45operate on either side of the barbell,
8:47>> which is either you sell extremely
8:49expensive things to people who are
8:50qualified to buy them and you try and
8:52sell them, you know, as many times you
8:53can and keep them buying from you as
8:55long as you can until eventually you
8:57have the cash and the infrastructure to
8:58be able to sell to everyone.
9:01The middle is where everyone dies.
9:05So like my the first part of my career
9:06has been all this and obviously we still
9:08have the advisory practice which is here
9:09but school sells $9 a month.
9:12>> How can we make that make money because
9:13we have a good business model but like
9:14it takes a long time and it burns
9:16capital in order to get to a
9:18multi-billion dollar decaillion dollar
9:19company.
9:21>> And so what happens is people are under
9:22capitalized try to pursue this strategy
9:24but don't have the product chops and so
9:27marketers make terrible product people
9:30>> because they only think about what they
9:31can sell not what they can deliver.
9:34That makes sense.
9:35>> Like every marketer that I know, I have
9:37yet to meet a marketer that was a pure
9:39marketer that still does their marketing
9:41stuff and then has a software and then
9:44is able to have an exit from it.
9:47And there is a a graveyard full of
9:50half-built, semibs, semi-white label,
9:53whatever software that never actually
9:54accomplished anything. Like you have to
9:57in order for software to actually be
9:58software, and this is for everyone
9:59because I feel like I get this every
10:01every [ __ ] day.
10:03>> [snorts]
10:04>> software is not valuable. Like please
10:06write like software is not inherently
10:08valuable. What makes software valuable
10:10is the fact that it has high gross
10:12margins and when it's built right it's
10:15sticky and has high revenue retention
10:17and when it's built even more right it
10:19has virality or some sort of growth loop
10:21that's built into it. So if you have a
10:22business of any kind that can grow on
10:24its own has high incremental or gross
10:27gross margins for the product and so I
10:30said growing margin what was the third
10:32one thank you and high revenue retention
10:35you have an incredibly valuable business
10:36whether you sell trash or whether you
10:38sell software it's just that software
10:40tends to be something that can
10:41accomplish those things but the amount
10:42of marketers who are like I have an info
10:43business I'm going to start a software
10:44so that I can get a $100 million exit
10:46doesn't work that way that's why none of
10:47them do it they think that because they
10:49don't know how it works you have to
10:51build a product that has those
10:52components and then in and of itself it
10:54will become valuable. But if you need to
10:56keep filling it up in order for it to
10:58maintain a certain level of revenue, it
10:59is not a good product because people are
11:01turning out. It has to be sticky.
11:05And when you have the cesspool of the
11:06internet, it's very tough because they
11:08inherently jump jump around over and
11:11over again. And typically the price
11:12points of people who come from the
11:13infodirect response world is way too
11:15high for someone who's a newer person or
11:18a beginner to actually be willing to
11:20keep paying even if they haven't gotten
11:22results yet.
11:26>> So I have uh two business uh one a
11:30campground resort. Um
11:31>> wait what? You have two businesses. The
11:33first one's what? Uh, it's a campground
11:36like I rent out cabins on Airbnb and
11:40Okay. I
11:42>> got it.
11:43>> Um, for that it's about $300,000 and uh
11:47profit is about 40%ish.
11:50>> Okay. 120. Got it.
11:52>> Okay.
11:53>> Um, and I have a um also a detailing
11:57business. Um,
11:59>> like I did detail cars and uh on the
12:03main season um I do about um 40,000 a
12:08month and um that business I've been
12:11running for a year now.
12:13>> Okay, congrats. That's pretty good.
12:14>> So
12:15>> yeah, how many hours a week does the
12:16Airbnb thing take from you?
12:19>> Uh so right now zero because I have uh
12:22three people that is working and running
12:25the place.
12:25>> Okay. Um basically I have uh no
12:28involvement in that business and the
12:30reason I cannot um grow that business is
12:34because it is very expensive and I need
12:36a lot of capital.
12:37>> You mean you have to buy more buy more
12:38buildings.
12:40>> Buy more buildings. Yes. Exactly. I no
12:42problem in demand but uh buying
12:45buildings.
12:45>> Okay.
12:46>> That's fine. So to me I I'll reframe
12:49this because normally just for everyone
12:50who's listening they're going to be like
12:51oh Alex is going to tell him that he
12:52should shut down one of his businesses.
12:54I don't really see like the Airbnb is
12:56like right in the middle of like is it
12:58investment versus is it you know active.
13:01That's why I asked how many hours a week
13:02you're spending on it. If you were
13:03spending five five hours a week or less,
13:04I'd be like that's fine. So basically
13:06it's like if you had a job and then you
13:07did Airbnb on the side, I'd be like
13:09fine. So your job is detailing. You do
13:11Airbnb is what you do with the money
13:13after you get after you take it out.
13:14Okay, great. So what's the what do you
13:16want to do right now? Do you want to
13:17grow like what's what's what's not
13:19happening that you want to have happen?
13:21So, uh, the thing is I really want to
13:23grow the Airbnb business. Um, and I see
13:26a lot of potential in it. We need more
13:27money.
13:27>> Um, there are like potential in the
13:30Airbnb business. Um,
13:32but the thing is, as I said, it's very
13:35expensive and I don't have the money for
13:37it.
13:37>> Yeah.
13:38>> So, I started detailing.
13:41>> Yeah. I started detailing to uh make
13:44money so that I could buy
13:46>> Yeah.
13:46>> Airbnb properties, right? so that I
13:49could buy a campground and or another
13:51resort so that I could build uh um build
13:54um cabins and stuff. Um but um
13:59I I after a year of doing Airbnb I sorry
14:02uh detailing I found out that it's very
14:04difficult uh you know and it a lot it's
14:08a very time consuming business and um
14:11>> yeah welcome to business. Yeah.
14:13>> Yeah. I'm not sure if uh um it is
14:17something that is worth doing for a very
14:20long period of time.
14:21>> What would you do if it's not that?
14:24>> Cuz the like the the best detailer they
14:27do about 2 million a year and that's the
14:29best best detailer in like I'm from
14:31Canada. That's like that's the
14:32>> Yeah, there's no good detailers in
14:34Canada. Totally.
14:36Uh so uh like my question would be
14:38should I choose a different vehicle
14:40because a different business uh to do or
14:43should I stick to detailing?
14:45>> I mean you've been doing detailing for a
14:46year and you're at 500 grand a year man.
14:49>> No not 500 because detailing is seasonal
14:52so probably about 250 300,000
14:54>> and what's profit?
14:56>> Uh so right now because I spend a lot of
14:59money on our marketing um because you
15:02know it's the first year.
15:03>> Tell me the number. Um, so probably I
15:06would say about 50 grand a year.
15:08>> Uh, so I'll say this, man. Um, do I
15:12think it's the wrong business? No. I
15:14think businesses can always be improved.
15:16Like we could look at like the offer and
15:18all these other things to like try and
15:19improve it. But if you like the Airbnb
15:22thing and you're good at it, and I
15:23normally wouldn't say this, um, but I'm
15:25just this is me reading between the
15:26lines from, uh, your call. So this is uh
15:31me I think answering the question behind
15:32your question which is how can I do more
15:34AbnB right? Does that sound correct?
15:37>> Yeah.
15:38>> Okay.
15:38>> Yeah.
15:39>> So there's this thing in real estate
15:41called raising money
15:44>> and you get investors to buy the real
15:46estate and then you manage it
15:47>> and you give them a return
15:52>> for sure.
15:53>> So I think you should consider doing
15:55that and then make Airbnb your full-time
15:57thing. It's like you're spending all
15:59like I'm you're spending all your time
16:00for $50,000
16:02and you're spending almost none of your
16:03time for 120, right?
16:06>> Yeah. Yeah.
16:07>> Right. So, I think you just need to
16:08raise money.
16:12>> Definitely. That makes sense.
16:13>> Yeah. Just use other people's money to
16:15buy the buildings. Give them a preferred
16:17rate of return. After that, you split a
16:19certain percentage of the profit with
16:20them so that you're super incentivized
16:22uh to get them a good return and they'll
16:23feel safe. So it's like you know you say
16:25everything after you know 6% 8% 10%
16:28whatever it is um per year we split you
16:31know 8020 my way after that or whatever
16:34right and so the blended return is going
16:36to be you know my guess is 15 or
16:38whatever
16:41>> yeah makes sense
16:44>> cool
16:45>> yeah because the Airbnb I think I am
16:48pretty good at it and
16:50>> yeah obviously you spend no time doing
16:51it and you're making two times the two
16:53and a half times the money of your other
16:54thing. I think you're decent at it. So,
16:58yeah, I think you just double down on
16:59the thing that you're good at. So, we
17:00did end up eliminating one of the
17:01businesses. Who who would have thought?
17:05>> Yeah.
17:06>> You're like, I've got this thing that I
17:07don't like that makes me no money that
17:08takes all my time, and I've got this
17:09thing that I do like that I'm pretty
17:10good at that takes none of my time.
17:13Cool. So, then let's do more of that.
17:14And you're like, I don't know how to do
17:15that, so I have to make the money to do
17:16that. It's like, or you can use other
17:17people's money.
17:21>> Interesting. Yeah. Definitely.
17:24>> This was a good chat.
17:25>> Thank you. Yeah.
17:28Thank you, Alex.
17:29>> You bet, man. Happy to help. [laughter]
17:33>> Congrats, bro.
17:35>> Thank Thank you.
17:35>> Today is the first day of the rest of
17:37your life.
17:39[laughter]
17:40>> Thank you, Alex.
17:41>> You bet, man. Big mistake that uh people
17:44make is they they don't focus. And
17:50that's the one that you're talking
17:51about, which is the do I start a new
17:52business, do I fix the business I'm at?
17:54>> And the woman in the red dress is always
17:56my my joke. But
17:58>> the new opportunity always looks more
18:00interesting, which is why it's so
18:01compelling as a sales pitch is like most
18:04sales pitches are red women in the red
18:05dress. And that's you do it that way
18:07because that's what convinces the most
18:08people.
18:08>> I teach that.
18:09>> Of course, that's what convinces most
18:11people to switch opportunities because
18:12you say, "If you only knew, it's so much
18:14easier over here." Right?
18:16>> But the reality is that all businesses
18:17have difficulty. It's just what
18:19difficulty you want. And so different
18:21styles of businesses have difficulties
18:22at different stages. Like information
18:24businesses for example are the easiest
18:25businesses to start, hardest to scale.
18:27Software businesses are the hardest
18:28businesses to start, the easiest to
18:30scale. E-commerce is somewhere in the
18:32middle, right? You have to have capital,
18:33but then there's scale. They have
18:34logistic supply chain issues on the back
18:36end. So like there's kind of
18:37difficulties on both sides. And so every
18:39type of business, service, for example,
18:41easy to start, harder to scale. You can
18:42scale just takes longer because you have
18:43to train people and recruit people and
18:45people are the business. And so like
18:46there's always difficulty with whatever
18:48business you have. And what happens is
18:50when you switch opportunities, you then
18:52start at zero. You quickly get success
18:54because you pass the levels you already
18:56know, but then you run into the same
18:57boss again.
18:58>> Mhm.
18:58>> And so what ends up happening is now you
18:59have two businesses you're CEO of
19:01because you couldn't end the other one
19:02because you still need to live. And then
19:03you start this other one. And so maybe
19:04this is the better opportunity, but you
19:06still have this old one. And then you
19:07can't give it up because you're like,
19:08but I have customers and I have to keep
19:10my promises there and I have my what do
19:11I do about my team? And there's all
19:12these questions that surround that,
19:14which is why you can own as many
19:16businesses as you want, but you can only
19:18run one.
19:18>> Mhm.
19:19>> And that's the thing that everyone
19:20messes up. And especially if you're
19:21small, you don't have the resources to
19:22run two. So you have to make the hard
19:23decision. You have to say, "No, I'm
19:25going to continue to fix this because
19:27it's my belief that every business can
19:29get to $100 million a year. Every
19:31business,
19:31>> even solarpreneur."
19:33>> Yeah. Well, I mean, I wouldn't say the
19:34solarreneur is an organizational
19:36structure, not a business. Mhm.
19:38>> So, whatever business that solarpreneur
19:39is in, if they sell wallets, if they
19:41sell paintings, if they I mean, whatever
19:43it whatever it is that you sell, you
19:44could sell $100 million worth of it for
19:46like I can't think of a business. Now,
19:48if you're like, well, you can't say that
19:49for a local dry cleaners. I'm like,
19:51yeah, then you open more, but I consider
19:53that still the same business, right? And
19:54so,
19:56>> the question then remains, why isn't
19:58your business a $100 million business?
20:00And whatever the answer to that question
20:01is is the problem you need to solve. And
20:03if you don't know how to solve it, which
20:04is what most entrepreneurs are faced
20:05with, they then think, "Oh, it's not me.
20:08It's the business, it's the industry,
20:10it's the market, it's the vehicle,
20:12right?" And sometimes I regret that I
20:13talked about how switching opportunity
20:15vehicles because like if I had played
20:16out the other alternative, I probably
20:17have 200, 300 gyms right now and I'd
20:18still be just as rich.
20:20>> And so,
20:21>> did it like maybe I make less money now
20:23than I would if I had stuck with it. I
20:25don't know. Like, and we can never know.
20:26But I can say that the equal opposite of
20:28that is if you do one thing for 50 years
20:29and you get better at it, you're
20:30probably going to make a lot of money.
20:32That is a great permission because I
20:33think ever since I heard you first
20:35actually talking about opportunity
20:36vehicles, I was like I might not be in
20:39the right opportunity vehicle. Am I like
20:41do everything wrong because I'm just my
20:42drawing in a boat and everybody's
20:45[laughter] on.
20:45>> It's such a compelling visual and it's
20:47just cuz it speaks to the pain. It's
20:48just the ultimate easy button is if I
20:50only had this other vehicle and if I
20:52were just doing the same thing I'm doing
20:53now, I would get 10 times more than I'm
20:55getting or 100 times more. And the thing
20:57is is that sometimes it's true, but it's
21:00so attractive that nine times out of 10
21:02it isn't true because you're it's only
21:05true when the model is the limiter.
21:07>> Mhm.
21:07>> But most times it's not. It's just it's
21:09a limiter if you if you measure on a
21:11one-year time horizon.
21:12>> But Mr. Panda has a chicken shop
21:14>> and he's worth 10 billion. So
21:17>> like is that the is having a Chinese
21:19chicken store like the the best
21:21opportunity vehicle? No. Did he make it
21:24work? Yes. So it's just it's just
21:26expanding the horizon of and that's why
21:28starting a business that you actually
21:29care about the customer is ultimately
21:30the thing that matters the most in the
21:32long run because if you really care
21:33about the customer and the product that
21:35you deliver
21:36>> then you don't do it for the opportunity
21:38vehicle reason and the making money
21:40reason and then making money occurs but
21:41because you stick with it it just keeps
21:43getting bigger and bigger and bigger
21:44because you keep improving it because
21:45you love it. It keeps getting bigger and
21:46bigger and bigger and you maintain your
21:47reputation because the only reason you
21:48did it to begin with is because you
21:49care. That's actually the unto I think
21:52that many people are missing. It's like,
21:54oh, what niche do I go in? Is it like
21:56>> start wherever one you want,
21:58>> but do the one that like it's either
21:59some pain you overcame, something you're
22:01very passionate about, or it's uh it's a
22:04professional skill. But I I I'll say
22:05this other thing that I think is worth
22:06doing is that people have this fallacy
22:08that they're they've made the wrong
22:09pick. Like what if I pick wrong, right?
22:11I picked the wrong business, I picked
22:12the wrong niche. The the consolation I
22:14can give you is that if you stick with
22:16it,
22:16>> no matter what, all businesses end in
22:18the same place. which is you have a team
22:22of five to seven people. You have a head
22:24of marketing. You have a head of sales.
22:24You have head of IT, head of legal, head
22:26of ops, head of finance, and they're
22:28really all competent people and they run
22:30the business. And so your actual
22:31day-to-day is the same.
22:34>> Whether you're selling, you know,
22:36shaving cream or you're selling
22:37communities or you're selling private
22:39equity, fundamentally, you're going to
22:41have a team of people that those
22:42functions of the business have to occur
22:43and they're probably rolling into you.
22:45And so if you think about that as the
22:47natural extreme of any business, then it
22:49kind of doesn't matter what you do to
22:51get there. If you like the game of
22:53business.
22:54>> Yeah.
22:54>> And so that's kind of how I see it is
22:55like if I'm worried about picking the
22:57wrong thing, it's like, well, no matter
22:58what, I'm going to end up in the same
22:59place as long as I stick with it.
23:01>> Yes.
23:02>> Okay. Yes. [snorts]
23:03>> So I will I will speak pretty
23:04definitively, which I I rarely do, um
23:07about like this model is better than
23:09that model.
23:11agencies are exceptionally easy to get
23:14to. And you know, caveat caveat for the
23:17internet trolls of the world, right?
23:18Like exceptionally easy to get to a
23:20million, three million, even $10 million
23:22a year in almost any version of the
23:25model.
23:26Beyond that, it becomes exceptionally
23:28difficult um because you have human
23:30capital. So it becomes really it's more
23:32and more difficult to attract, you know,
23:33talent to do higher level work. Um, and
23:35typically the businesses that go from,
23:37you know, 0 to 10 million, they're
23:39servicing SMBs and VSMBBS, so very small
23:41business owners and small business
23:42owners. If you take one of the the way
23:46that I like to think about any industry,
23:47if I want to get into is I look at what
23:48the people who are the biggest in that
23:49industry are doing and think, okay,
23:50what's different about what they're
23:51doing versus what everyone else is
23:52doing. And the biggest agencies in the
23:55world service the Fortune 100. And so I
23:57take that as the natural extreme of like
23:58what is the best version of this
23:59business is that you deal with
24:00businesses that always pay their bills.
24:03They never turn. and they sign 5-year
24:05contracts at 5 million a year and
24:07they're good for it. And so the process
24:11of agency scaling is very much scaling
24:13the avatar and you basically have to
24:15just keep earning your way up which
24:16you're you already on the right track um
24:18of how can I get an avatar that actually
24:20can keep their word and once you get to
24:22there number one and number two you'll
24:25have a telltale sign of like am I
24:26dealing with an avatar that's too low if
24:28you want to start doing more of their
24:29business for them. And so if they're
24:31like I can't close a door right or like
24:34you're like maybe I'll do my sales for
24:36them. No, you have to deal with a
24:38business who knows how to sell because
24:39your services are not I will do
24:41acquisition for you. It is I will do
24:42this. I will do this. I'll do lead.
24:45Exactly. And so it really comes down to
24:48who is the perfect avatar for only this
24:50very narrow service that I have I have
24:52tremendous margins on. And so that's
24:53where we get really clear on like well
24:55if they actually like I've been selling
24:57people who have over 10 people headcount
24:59but if I have over 50 my turn is like
25:011%.
25:02>> Yeah. And so it's like I really should
25:04just build that and not have all of
25:06this. Now what happens is we we always
25:09incur debt. So it's not like there's
25:10something wrong. Every business incurs
25:12debt when you start 100%. You either
25:14incur talent debt, tech debt, financial
25:16debt. You incur debt. You want to incur
25:19the debt that's the easiest to pay back,
25:21right? And so right now and you can also
25:22incur reputational debt. Like there's
25:24debt. Um you're you're selling some
25:27people that you know you shouldn't sell
25:29so you can pay the bills. Fine. I'm not
25:31going to get on an ethical, you know,
25:32whatever with you. Um, but the sooner
25:35you can draw the line of saying, I want
25:38to, like if you told your team, we're
25:40how many sales a month do you do? Sales
25:41philosophy,
25:42>> three, four.
25:43>> Okay.
25:44>> I'm okay with us going to one deal a
25:46month. And where this gets more
25:48interesting is that when you get that
25:50correct, truly correct avatar, the price
25:52elasticity uh changes. And so all of a
25:55sudden, it's like, if I actually were to
25:56price to my correct avatar, I might be
25:58able to charge two times as much. And by
26:00charging two times as much, I might 5x
26:02my profit. And by doing that, I'm
26:04actually more than happy to have my
26:05quote revenue growth rate be slower than
26:09what it was before when I had these
26:11people. But the amount of operational
26:12drag that you incur also like team
26:14morale of like I just onboard this guy
26:16and he's already turned out like it just
26:17feels like such a pain. Whereas if they
26:19know that they're going to be creating
26:19long-term relationships with the
26:20customers, you will get a sticker
26:22business that's more fun to run and way
26:24more profitable. So part of this is like
26:26a lot of entrepreneur a lot of the
26:28correct moves in entrepreneurship are
26:31counterintuitive because all the
26:33intuitive ones you've already done. You
26:36do those naturally. You wouldn't you
26:37don't think about it because all the
26:38things that are intuitive you already
26:39did it and they already worked. Where
26:40you get stuck is the counterintuitive
26:42solutions or the ones where you're like
26:44wait so for me to grow I need to sell
26:45fewer people and have higher
26:47qualifications. It's hard to do. That's
26:48why most people don't do it. It's also
26:49why most people don't make money. Phil,
26:52what's up man? Can you uh mute me in the
26:53background?
26:54>> [snorts]
26:55>> Yes, I can.
26:56>> All right,
26:57>> you are muted.
26:58>> All right, rock and roll. Tell me about
27:00the business.
27:01>> All right, we are a $1.2 million uh pool
27:05service and repair company in Raleigh,
27:07North Carolina.
27:09>> Rock and roll. What's What's profit?
27:11>> About 50k after 145 and uh that owner
27:16salaries.
27:16>> So per
27:19So 200 all in.
27:21>> Yeah. Yep. 195. Okay. Right around them.
27:23Cool. That's fine. Okay. 200K. Uh bottom
27:26line. All right. Uh what's the what's
27:28the membership price? What's churn?
27:30>> Um we're about it it depends, but
27:33average is about 4500 a year um per
27:36client. Um
27:38>> Okay.
27:38>> What's churn though?
27:39>> Recurring. What's that?
27:41>> What's churn? Yeah.
27:43>> Oh, churn. Uh we lost about 12 people
27:45this year. So 12 divided by 176,
27:48whatever that is. 12.
27:49>> Okay. So you have 90, you know, you have
27:52>> Yeah. Okay. Okay. So you have 93%
27:53retention annually. Okay. Great. So turn
27:55is not an issue. Fantastic. All right.
27:57So what do you want to have happen?
27:58What's the problem?
28:00>> Uh problem for us is we can't hire and
28:03retain and train really talented people.
28:06Um we find that we can keep people for
28:08about a year and then they either
28:11>> want to go do something else or they
28:13want to go into a different trade that
28:14they view as like a higher a higher
28:17opportunity like HVAC, plumbing,
28:19electrical.
28:19>> Sure.
28:20>> Sure.
28:21>> Stuff like that. So, we're trying to
28:22figure out a way to make it so that
28:24people want to stick around and see this
28:26as a career that it can be.
28:28>> Yeah. I'm gonna I'm gonna we're I'm
28:29going to guess right. What's your close
28:31rate right now when you meet with
28:32people?
28:34>> Our close rate when we meet with clients
28:36or with Yeah. leads or uh
28:38>> Well, leads to, you know, to sell them.
28:41>> Yeah. Selling uh we're about 30%.
28:44>> 30%. Interesting. Okay. So, this is me
28:48calling the shot. This is my guess here,
28:49Phil. is that I'm going to bet we have
28:52to fix the sales motion. Number one,
28:54once we fix the sales motion, we can
28:56increase prices. Step two, once we can
28:59increase the prices, which will
29:00dramatically increase profit, we can
29:02then pay the guys more so they stick.
29:06>> Mhm. Yeah. So, just
29:08>> that would be my
29:09>> Yeah.
29:10>> Yeah. Current paid 25% of labor revenue.
29:13Um, so yeah, definitely increasing
29:15prices definitely is a way to do that.
29:18Um, and that's that's the thing. We're
29:21just our close ratio I feel like isn't
29:23high enough to warrant price increase. I
29:27know we need,
29:28>> right? Like I I don't want it to go to
29:305% close ratio in in order to
29:32>> Well, you I mean, dude, for you to get
29:33to 5%, you would have to like 10x the
29:35prices. It would it wouldn't even be
29:36close.
29:37>> Um, so we have to fix the sales motion.
29:40So that's my So like this is why like
29:42you got to pull the thread, right? So,
29:43it's like it starts with like my guys
29:45aren't staying long enough, but the
29:46reality is that like we're not charging
29:47enough, but we can't charge more because
29:48our sales process is is screwed. So,
29:50let's fix the sales process. All right.
29:52So, walk me through the sales process.
29:54>> Sales process we have currently um they
29:57basically call our office. We we do a
29:59lot of inbound. We don't we just word of
30:01mouth
30:01>> advertising as we need to. Um so, we
30:04we're pretty pretty well uh we show up
30:07pretty well on Google. Uh, but we're
30:09spending like five 600 bucks a month on
30:12actual Google outbound. Um,
30:14>> well, you mean Google ads, right?
30:16>> I mean Google ads, like Google services.
30:18>> Got it. And so you're And it's 500 bucks
30:20a month is what you're you're you're
30:22putting into PBC. Okay.
30:24>> Yep. Um, all right.
30:25>> How many leads are coming from that?
30:28>> Any idea?
30:28>> Leads a week. Leads a week are about two
30:31to three.
30:32>> Okay. From that from that 500 that you
30:34spend, right?
30:35>> Yep.
30:37>> Okay. So, I'm gonna say you're getting
30:4012 12 a month. So, let's just say 10 for
30:42simple math. So, it cost you 50 bucks a
30:45lead right now. Right now, roughly.
30:48>> Mhm.
30:48>> All right. And you convert what
30:51percentage of leads?
30:53>> Uh, convert about 30%.
30:56>> Okay. Converting 30% of leads. You can
30:58get that to 50 on inbound. Um, just FYI,
31:01but you're at 30%. That's fine for for
31:03the purposes of our conversation. Okay.
31:06Um,
31:08so it costs you $150,
31:12right?
31:13>> Yes.
31:15>> To get a customer who's going to pay you
31:16$4,500 a year.
31:18>> Yep.
31:20>> Not bad.
31:22>> Not a bad gig. [laughter] So, let me ask
31:24you this. What percentage of your costs
31:26are variable versus fixed?
31:28>> Uh, it's I don't have an exact figure.
31:32Um,
31:32>> let me ask you this. What are gross
31:33margins?
31:35Gross margins are about 50%.
31:38>> Okay. So that
31:40>> about 25 labor
31:41>> and that includes labor. That includes
31:43labor, right?
31:44>> Okay. So you're going to make So it cost
31:46you $150 one time to make $2,250
31:51per year in gross profit.
31:54>> Yep.
31:56>> Banger. Banger. Amazing. Okay.
32:01>> Killer, dude.
32:01>> Do advertising. Yes.
32:03>> Hell yeah. [laughter]
32:05Like, bro, hey, I've got this amazing
32:07investment opportunity. If you give me
32:09$150, I'll give you $2250 back just at
32:13the end of the year. All right. I'll
32:14give you I'll give you 2250 back. How
32:16much money you giving me? [snorts]
32:18>> I'm as many as many pennies as I can
32:20throw at you. Yeah.
32:21>> Okay. Well, how much cash you have on
32:23hand?
32:24>> Uh, not a lot. Not a lot on
32:26>> Okay.
32:26>> Um, we basically are That's the thing.
32:28Our
32:29>> our We have two owners in the business
32:31that we're taking out. All right. Pause.
32:34Pause. Heard.
32:35>> Pause. Heard. So, what you need is a
32:38money model. So, what how much your
32:41money are you making the first 30 days
32:42on $150 customer?
32:45>> Uh, generally, so we we just
32:46transitioned to doing a different
32:48different type of initial visit model.
32:50Um, okay.
32:52>> Currently, we're getting about 1,500 per
32:55client in the first 30 days. Uh, but it
32:57really depends. That's that's our
32:58average,
33:00>> bro. So you don't even need the money
33:03because you're getting 10 to one up
33:04front.
33:06>> I I know. But then so our on that 1,500
33:10there's a good amount of that which is
33:12cost of goods sold because we're sure
33:14finding issues. We're repairing things.
33:15>> Let's say you make 500 on on on 1500.
33:18Let's say you run 30% on the first one,
33:20right? Does that sound Does that sound
33:21reasonable?
33:22>> Yeah,
33:22>> dude. You're still making 500.
33:24>> Mhm. on your 150.
33:27>> Yep.
33:30>> So, why not spend more
33:32>> the I don't know. I'm just scared, I
33:35guess. [laughter] Scared.
33:37>> Don't be scared, dude.
33:38>> My money where my mouth is. That's it.
33:40>> Yeah.
33:42I mean, I'll say this. I don't know if
33:43you were on for the beginning of this,
33:45but like this is a super classic issue.
33:47This actually happened a ton in gyms.
33:49So, gyms have fixed costs like rent and
33:51equipment leases and things like that,
33:53right? And so the guys would have a
33:55vehicle like this that they're getting
33:5710 to one on something really strong.
33:59But what they would do is they would
34:01only spend enough money to cover all
34:02their fixed costs, but never get into
34:04the black. They literally would just
34:06like spend enough to like they they play
34:08business on defense rather than offense.
34:11>> Yeah.
34:12>> Yep.
34:12>> Right. Like you're playing right now to
34:14not be poor rather than to be rich.
34:16>> Yep. That sounds familiar.
34:18>> Yeah.
34:18>> Yeah. And you're and you're willing to
34:19make the money for your team. You're
34:21willing to make the money for the
34:21landlord. You're willing to make the
34:22money for the bank, but you're not
34:23willing to make the money for you.
34:25>> Yeah.
34:26>> Real, right?
34:28>> Yep.
34:29>> Okay. So,
34:30>> yeah.
34:30>> As much as I would like I'd love to
34:32like, you know, dive into a hundred
34:33other things, like this is I'll bet you
34:35right now this is the core issue is like
34:37I want you to go from $500 a month to
34:39$5,000 a month to spend because if you
34:41went from two to three leads a week to
34:43two, three leads a day, would that
34:45materially change the business from a
34:47casual perspective?
34:48>> Yeah, definitely. But that that's the
34:50thing. It's our we could we could do
34:52that but then we run into fulfillment
34:54issues of we it takes us six weeks to
34:56train a guy. So it's like chicken of the
34:57egg. Do we
34:58>> six weeks is not that long.
34:59>> Big picture FYI, right? And I'll bet you
35:01could do it in three if you really had
35:03to.
35:04>> Right.
35:05>> Yeah.
35:05>> Okay. And that's so
35:07>> Yeah, that's that's the thing.
35:08>> When you're in equilibrium, this is a
35:10rule of thumb for me and for everybody
35:11who's listening. If you're in
35:12equilibrium where you're like, I can
35:14maybe take a little bit more demand, but
35:15then I'm going to be supply constrained.
35:17Get the demand, get the cash, then
35:19you'll get the resources to take the
35:20next move. And if you have to pay some
35:22guys one and a half or one and a
35:24quarter, you know, overtime to to to
35:27fill the slot one, you're going to pay
35:28them more anyways, and that's good.
35:29Fine.
35:31And I'll bet you those guys would work
35:33more for more money.
35:35>> Yeah.
35:36>> So, you have flex. You have you have
35:38more capacity. You have capacity that's
35:40not stretched. So, if you could stretch
35:42it, most people like you'd be amazed at
35:43what people can do if you're like
35:45incentivized them.
35:46Yeah. Yes. Yeah, definitely. We could I
35:50mean our team our team's pretty pretty
35:52strapped right now.
35:53>> Yeah. And are you are you closing? So,
35:55walk me through the sales process real
35:56quick. Lead comes in, you immediately
35:57call them within 60 seconds or what?
36:00>> No. Um it's basically we have um online
36:04pricing. All of our prices are online.
36:05So, they hit our site, they basically
36:08sign up and then once they sign up on
36:10the website,
36:11>> Yeah.
36:11>> we're contacting them automatically
36:13within five minutes. Um, and they're
36:15basically
36:16>> via text or call.
36:18>> Uh, we basically email um, from the
36:22signups. Um, we don't do any any calls
36:26right now. Not not nothing nothing
36:28automated. Nothing.
36:29>> So, you could probably double you could
36:31double your conversion if you just call
36:32the leads immediately.
36:34>> Yeah. Yeah.
36:36>> So, let's say let's say let me let me
36:39ask you a question. If I paid you
36:40another $1.2 $2 million to do one thing,
36:44which is
36:47to just call your leads in 60 seconds. I
36:49give you one $100,000 a month. Would you
36:51do it?
36:52>> I I suppose I would. Yeah.
36:55>> Well, that's what's sitting on the table
36:56right now because you're not contacting
36:57your leads fast enough.
36:59>> Yes.
37:00>> You have a double. You can get to 60%
37:01when it's PPC inbound. They already know
37:03the price. You could you could close
37:0460%. And that's without changing
37:06anything about the pricing, the offer,
37:07anything. just from contacting him fast
37:11>> then four. Yep.
37:13>> Okay. So, we have two changes that are
37:14going to be the biggest material
37:15changes. Number one is you're going to
37:17spend way more on ads. Number two is
37:18you're actually going to call your leads
37:19really fast. When you do those two
37:21things, you have enough gross profit in
37:22the first 30 days to cash flow this
37:23acquisition anyways. You're then going
37:25to be willing to pay some of the guys
37:26you have time and change to do more
37:29jobs. Some of those guys are hungry,
37:31want to make more money. That's why
37:32they're leaving, right? Give them the
37:33opportunity to make more money.
37:35>> Yeah. And then part of that is you can
37:36also pay them a little bit more money to
37:38to train the guys faster because they're
37:39working longer hours. They'll train them
37:40faster.
37:41>> Yeah. So incentivize the trainer to to
37:45get them get them on the road faster.
37:46>> Yeah.
37:47>> So we can open up capacity.
37:48>> I mean I would say, hey, if you you can
37:49do it in six weeks, if you can do it in
37:51two, I'll give you a $500 bonus.
37:54>> Yeah, I think great idea.
37:56>> Yeah.
37:56>> Here we go.
37:59>> Rock and roll.
38:00>> Great. Yeah. Thank you. And I put the
38:02incentive is that if you have to go back
38:03and fix one of the pl spots that the new
38:05trainee went to that that guy's got to
38:07do it for free if he takes the
38:08commission.
38:09>> Yeah. Yep. Yeah. We do we do call backs
38:12on then they're on
38:13>> but I would do it on the trainee. If I'm
38:15going to if you were to take from six to
38:16two and you're going to sign off that
38:17this guy's good enough. I'll give you
38:18the bonus but you got to basically
38:20certify that guy's work for the next
38:22month.
38:23>> Right. Okay. So the trainee makes a
38:25mistake if they're rushing through it.
38:27The trainer goes and fixes.
38:28>> Yeah. Big Papa's got to come in. Mhm.
38:30>> I see what you're saying. Yeah. Yeah.
38:32Great.
38:32>> Rock and roll.
38:33>> Rock and roll, man. Thank you, Phil. I
38:35really appreciate
38:36>> Appreciate you, dude. Yeah, you bet.
38:37>> Uh my name is Mike Nathan. Um I sell
38:40cellular therapy in home to the old,
38:43affluent, injured, probably and
38:46athletic.
38:47>> Um we're new, but we've got a million
38:48dollars in revenue, half at Ibida.
38:51>> Um we would like to get the 25 million
38:54>> in home or
38:55>> in home.
38:56>> Okay, got it.
38:56>> We consider mobile healthcare.
38:58>> Okay. Is it like guy drives out or is it
39:00you sending machines?
39:01>> RN drives out gives you an IV infusion
39:04in your home.
39:05>> Okay, got it.
39:05>> Um, we like to get to 25 million. We're
39:08built to be bought. We want to exit. So,
39:10we think we're on the cutting edge of
39:12this. What's stopping us is my team is
39:14awesome.
39:15>> Okay.
39:15>> Great from the NFL to a lot of great. We
39:18have great business to doctor B2B sales
39:21experience, zero BTOC experience. and
39:26that playbook we're learning is wildly
39:28different. We have no idea what we're
39:30doing.
39:30>> Yeah. So, what stops you from just doing
39:32way more of the doctor stuff.
39:34>> Um it doesn't it doesn't quite pay as
39:37well. Meaning uh we have people that
39:40knock on doors to uh orthopedic surgeons
39:42who are looking for patients with uh
39:44alternatives to surgery, PT,
39:46chiropractors.
39:48It's a lot of effort and there's some
39:50that are going to refer to you and some
39:51that just will not.
39:52>> Yeah. Uh so that's our constraint in a
39:55one market we're in the twin cities it's
39:56a one market uh play
39:59>> we know there are more people looking
40:01for this solution
40:03um so we want to understand what the B
40:05toc is if we go to then Dallas Philly LA
40:08as we try to scale it we're convinced it
40:11needs to be a better ROI than maybe what
40:13we're doing right now
40:14>> what are you do so you're making 50%
40:16margins right so what's the cost to
40:18acquire a physician
40:20>> cost to acquiring a physician Mhm.
40:22>> Who refers your business?
40:24>> Cost of acquiring affiliate,
40:25>> it's often times just it can be a
40:27physician. So, we don't track it that
40:28way, but it's um $500.
40:31>> Okay. So, it cost you 500. And then what
40:33does the average physician refer to you
40:34in a year?
40:36>> Uh in terms of business,
40:37>> $6,000,000.
40:39>> So, I mean, you're getting 12 to one
40:40there and you already know how that
40:41works. So, like what stops you from
40:43doing 10 times more of that? Uh, we
40:46>> you're saying they don't pay well, but
40:47that's the part I'm not sure how you're
40:49getting%.
40:50>> We've went through the woods and hit all
40:51the people that are going to refer us.
40:52The number is not amazing or at least I
40:55just know there's more there. I assume
40:57there's more. There's got to be more
40:58than the, you know, the 200 people we've
41:00hit. And the
41:01>> like you mean you've only really talked
41:02to 200 in terms of like reachouts and
41:05and 200 who signed up as affiliates kind
41:07of thing? I don't know the number off
41:08the top of my head, but it's in it's in
41:10the hundreds, less than a thousand of
41:12B2B uh PT, chiropractors, orthopedic
41:16surgeons. We've done that
41:18>> in the Twin Cities
41:19>> and the super small people that have
41:20given us has been some give four, five,
41:23and six, some give zero.
41:25>> Yeah. Do you have an active affiliate
41:27manager who's like regularly reminding
41:28them?
41:29>> Yeah. So, with so the the way that I
41:31think about affiliates is um it's
41:33basically a second tier of customer. And
41:35so you need to have somebody who's
41:37regularly kind of like stoking the
41:38affiliate fire to keep them activated
41:40and continue to get them to continue to
41:42refer business. So I'll give you an
41:44example. So there was a roofing company
41:46for it was a restoration company. Um
41:49they had one star star salesman and all
41:52he did was he'd go around to other
41:53tradesmen and get them to refer them
41:55business. And so they would get a,000
41:56bucks to refer the restoration business
42:00business. But the sales guy got 500 for
42:03every time they referred. And so that
42:05guy all day long was knocking on doors,
42:07walking to the front door with donuts,
42:09asking them how they're doing, bringing
42:10coffee to the guys, and then reminding
42:12them that they existed. And that's all
42:14he did. And so I think you were getting
42:17you're getting you're you're doing the
42:18hardest part, which is getting them to
42:20uh refer. you just didn't have the the
42:22consistent referrals because if you had
42:24200 active affiliates who were
42:26consistently referring your business and
42:28most of these physicians you know
42:30especially like GPS things like that
42:32like I mean they see thousands of
42:34patients
42:35>> and many of them could probably benefit
42:37from the services you have and so the
42:39activation is both getting them to refer
42:41consistently but also uh percentage of
42:43customers that they see that they refer
42:45to you. It's kind of both sides of it.
42:46And so I think that the missing link
42:48with what you were already doing was
42:49just that the you didn't have basically
42:51the continuous affiliate marketing
42:53strategy to get them to keep sending you
42:54business.
42:55>> So that's probably like right now today
42:57I would fix that first because you
42:59already have the acquisition system, you
43:00already have the network. And so for me
43:01like reactivating that affiliate base
43:03would be the first thing that I did. So
43:05this gentleman is using B2B outreach to
43:08get uh physicians and therapists to
43:10refer him business. Now the part of what
43:14he was missing is if you go to 240 in
43:15the leads book uh which is the
43:17affiliates chapter um I talk about the
43:19launch and integrate model and so
43:22basically uh right now he actually was
43:23missing both of those. So launch is like
43:25you want to do some sort of big
43:26promotion with them so that you get to
43:28all their customers. Now they were
43:29giving him like a trial customer and he
43:31was basically not getting any customers
43:33beyond that. And so if he's acquired 200
43:36affiliates and each of one of them has
43:37sent him one customer it's because he's
43:38he's basically not following up with the
43:40test that they're making. Like imagine
43:42if you, you know, if you have a business
43:44and you have customers and someone says,
43:45"Hey, can you refer me business?" You
43:46might be like, "I'll send you one and
43:48I'll see what they say, right?" But it's
43:50a trial. And so basically, we have to
43:52think about getting these affiliates on
43:53board is like a trial, but to convert
43:55the affiliate into an activated
43:56affiliate, right? And so a launch is
43:58step one, which is that, okay, maybe you
44:00succeed with the trial and then you
44:01propose, hey, let's do some big campaign
44:03to send a lot of your customers over uh
44:05and then you can make money. We can make
44:07money, everybody's happy. But the
44:08long-term goal is full integration,
44:10right? which is at what point in your
44:12process can we uh integrate our business
44:14so that what you sell is merged with
44:16what we sell uh so that we don't have to
44:18do any extra work or remind you you just
44:20do it on your own. The second thing
44:22maybe because you might just reactivate
44:24the base and all of a sudden you're like
44:25I got 200 guys who referring business.
44:26Holy [ __ ] we're at 10 million. Um but uh
44:30the second thing I would consider
44:31probably I I would still probably focus
44:33most of my time on the B2B because you
44:34already have it. Um but for this
44:37business I think that it lends itself
44:38for what's the price point? $6,000 a
44:40treatment
44:41>> per treatment. Okay. Wait. So, so the
44:43average doctor will send you one $6,000
44:45patient per year. When you said it cost
44:47you 500, they'll send you one patient.
44:50>> Interesting. So, do you have a process
44:52for once the patient get the thing
44:54calling the physician up?
44:56>> Sorry. Say that.
44:56>> So, like I'm Dr. Smith. I send you
44:58Sandy. Sandy goes and gets the Well, you
45:01come to Sandy and Sandy gets the
45:02treatment. Is there a cycle where you
45:03call back me, Dr. Smith, and say, "Hey,
45:06we just dealt with Sandy. Here's some of
45:08her stuff.
45:09Uh, not in a medical term like we're not
45:11putting notes back in because it is
45:12private.
45:13>> For sure. Yeah. Yeah.
45:14>> But but we do we ask for more referrals.
45:16There's a circle back that way. There's
45:17not a a a patient loop back.
45:21>> Okay.
45:22>> That's not true. Sometimes that does
45:23happen. Excuse me. It does.
45:24>> Yeah.
45:24>> That's not systematized though.
45:26>> Yeah. I would systematize the hell out
45:27of that
45:28>> because it's like, hey, you just sent me
45:29this person. Like, let me close that
45:31loop for you. She's awesome. We did this
45:32thing. She loved it by the way. And then
45:35we have the you know the opening to the
45:37to the other like what customers or
45:39customers sorry what patients did you
45:40see this week who you think it would be
45:42a good fit right and rather than saying
45:44do you have any it's which ones would be
45:46is the question small training stuff but
45:48it matters.
45:49>> Um so I feel like there's so much on the
45:51B2B side that honestly that's probably
45:53where I'd be ripping off.
45:54>> So you would not go after a BTOC
45:55approach like advertising online going
45:58uh pushing in on a strategy on that.
45:59It's not that I wouldn't, it's that when
46:01I think about
46:03So this the difference in like
46:04theoretical and actual like I would
46:07given given the fact that you like
46:09you're already running good margins on
46:11this thing basically doing it and take
46:14this the way I mean it completely
46:16unoptimized like right now right and I
46:18again I'm not this is not a a slight um
46:21then I'm like there's so much juice left
46:23in this thing
46:24>> I don't want to now start something new
46:25it's like I barely got this one going I
46:27want to like crush this and when when
46:29I'm like, "No, we've like we follow up
46:31with every single person. I've got a
46:32full-time affiliate manager who steps
46:34by. Our affiliates, I'm calling them
46:35affiliates, but doc, you know, drops by
46:37the docs once a week just to remind us,
46:38say nice things. Hey, by the way, like
46:41that is happening all the time and we've
46:42already covered like literally every
46:44single physician in the Twin Cities,
46:46then I'm like, "Okay, let's go B to C."
46:48But if we haven't completely squeezed
46:49the hell out of this thing and it's
46:50already working at the level it is right
46:52now with like zero, like you're only
46:54getting one patient per doc, it's like,
46:56so yeah. So you getting B2B customer is
46:59the same as getting one B TOC customer.
47:00I understand why you'd be frustrated
47:01because you'd be like, "Well, [ __ ] it.
47:02I'll just [ __ ] I could sell one customer
47:04on my own without having to deal with
47:05the doc." But the whole point is that
47:07like I want them to be sending 20 50 a
47:10month and they can because they have the
47:12volume. And I think that first one has
47:14to be like a beautifully choreographed
47:16experience because that first patient's
47:19the test run for them for you, right?
47:21They'll refer you one and we'll see what
47:22happens.
47:23>> First one,
47:23>> right? And so one, it's like Sandy's got
47:25to be blown away, right? She's got to
47:27come back and be like, "Oh my god, that
47:28place was amazing." And then you also
47:30have to go back to the dock and be like,
47:31"We blew Sandy away by the way." Um, and
47:33so I think you have to tackle it from
47:34both sides.
47:36>> Okay,
47:36>> that's what I would do. Getting into the
47:39ad side, you absolutely could do it and
47:40we could walk through some, you know,
47:41whole strategy there. But
47:43>> I I if if we swap places, that's where I
47:46would be focused.
47:47>> If you were going to try to expand into
47:49other major metros in the next 18
47:51months,
47:51>> Yeah. Would you would you have the B TOC
47:54sorted out before you went to the next
47:56market or would you
47:57>> honestly no. If I crush my B2B play,
47:59then I just run my B2B playbook in the
48:01B2B playbook in the new market. Like
48:03once I find something that works, I just
48:04want to just
48:05>> do more.
48:06>> Yeah. Pillage.
48:07>> Right on. Thank you.
48:08>> Yeah. No, you bet. Now, if you if
48:10there's no way to do that integration,
48:12which there always is, but if for some
48:14reason you're have limited beliefs about
48:15the world, what you can do is basically
48:16you have to pay affiliate managers to
48:18consistently kind of they're kind of
48:19like account reps. And so they manage
48:21the relationship with the affiliates who
48:22remind them that you exist and remind
48:24them to promote your stuff. And so if
48:26you have a handful of good affiliates
48:27that can be worth their weight in gold
48:29because each of these business owners is
48:31is advertising on your behalf. And so if
48:34he has 200 businesses, which is what he
48:36said, imagine harnessing the horsepower
48:38of 200 businesses of advertising and
48:40forcing it through one. Well, if you
48:42have that, he's easily going to hit his
48:44$25 million in sales. He just needs to
48:46activate and better use the resources
48:48that he has at his disposal right now.
48:49And on top of that, he's already really
48:51profitable. We know the model works. We
48:52just have to call on you for quite a
48:54while. So, thank you. Um, I sell digital
48:57marketing services and business
48:58management application to home service
49:00providers.
49:01>> Okay.
49:02>> We do 580,000
49:04in MR.
49:06>> Great.
49:06>> Um,
49:07>> congrats, man.
49:07>> 2% monthly churn, 100% uh net retention
49:11revenue.
49:12>> I would like to eventually be at 100
49:14million. No rush for that.
49:16biggest thing that's stopping us right
49:18now is figuring out the best way to
49:20scale. Uh my background, I come from an
49:23agency. I was a sales rep. Sure.
49:25>> Very high transactions and honestly it
49:28seems like it leads to a lot of burnout
49:29for those types of sales reps.
49:31>> It also seems like the goals aren't
49:33aligned. The reps are just doing high
49:35volume.
49:36>> It's not what's best for the client. So
49:38>> what we started at our agency is it's
49:40kind of like the insurance model. You
49:43sell a client, you work with that client
49:44for life.
49:45>> I think it's a lot more fulfilling.
49:47>> Um I'm told the best
49:49>> they do the delivery.
49:51>> No, so we have a W2.
49:53>> So they just do like they're the account
49:54rep.
49:54>> Yeah.
49:55>> All right.
49:56>> Um but yeah, I'm told like the best way
49:59to scale is to differentiate that and
50:02just split sales and split account
50:04management versus the way we are doing
50:06it.
50:07uh wanted to get your thoughts on that
50:08if that's necessary or particular.
50:10>> So um given the size and the stuff that
50:14you have right now
50:16I almost want to plead the fifth because
50:18I would need more information. If you
50:20have 2% monthly churn for agency
50:22services that's really good and I really
50:24wouldn't want to break that. And so we
50:27typically almost always separate
50:30customer service from sales, but I would
50:32imagine the way that you're running it
50:33is that the guys fill up their book and
50:34then they're kind of done and then
50:35that's all they manage. Is that about
50:37right? And they sell if they need.
50:38>> So our top rep has been with us four
50:41years and he's in a total of 100,000 MR
50:46>> and we're giving them tools to, you
50:49know, SDRs so he can continue to grow.
50:52Uh-huh.
50:52>> Uh, we haven't seen somebody really tap
50:54out yet, so we don't really know where
50:56he's going to stop.
50:57>> So, he keeps selling and he's able to
50:59keep the customers.
51:00>> Yeah. And his churn is staying below.
51:02>> And is it SEO or what are you selling?
51:04>> SEO and paid ads
51:05>> and paid. And then you have some sort of
51:07tool
51:08>> uh
51:09>> instead of apps or applications.
51:10>> We do have some tools to make that very
51:12efficient
51:13>> for the sales guys or for the home
51:15services
51:18>> for the customers or the sales. provide
51:20the SEO services for very good costs. So
51:23you provide right so you centrally
51:25provide the SEO right
51:27>> and then the sales guys sell it and then
51:29where does the application fit in
51:32>> the what like the business management
51:34app
51:34>> sure
51:35>> that's an optional so some
51:37>> so that's not key to why the churn is
51:39low
51:39>> no
51:39>> okay so it's really just that the guys
51:41>> just so low because the guys build
51:43really good relationships with the
51:45clients
51:46>> yeah got it and SEO obviously works if
51:47you guys are
51:48>> Yeah it's very it's 200 300 bucks a
51:51month like our Harpoo the last 6 months
51:53is 300 but historic it's 200.
51:56>> No, I'm from Yeah. Yeah, I get it now.
51:58Uh the price is a big part of it though,
51:59just a FYI that like that's why churn is
52:01also so low. Like 300 bucks a month is
52:03where SMBs um will typically stay. You
52:06get up to a,000 1,200 uh you've got like
52:09another tier of churn and then above
52:10that is like the next kind of point is
52:12like 2500 to $3500 a month. Um and then
52:15after that you're not selling SMBs
52:16anymore or you're selling to bigger
52:18businesses, right? Um, so all that to
52:21say, your question is how do I scale?
52:25>> Yeah. Do I want to break it out? So it's
52:27account managers and sales
52:28>> rep. I don't think you break the
52:30business.
52:30>> Yeah.
52:30>> I think you do more what's working.
52:32>> Cool.
52:32>> If you have 100% revenue retention
52:34annually, then just add add more
52:35revenue.
52:36>> I guess my only question is how do we
52:38keep them from getting lazy and becoming
52:41turning from hunters to farmers? Is that
52:43something we just accept and hire more
52:44guys or
52:45>> I think so. I think I mean basically
52:48there's problems on either model, right?
52:50Um but if you have 2% monthly churn in a
52:53in a business model that typically has
52:55way higher than that normally, um then
52:57you've solved something that many people
52:59have struggled to solve. And so that
53:00means you have 50-month average LTVs,
53:02right? So you have a $15,000 LTV on the
53:05product. Um and then how many customers
53:07a month are you selling?
53:08>> 150.
53:09>> Yeah. So are you doing outbound?
53:11>> Yep.
53:12>> Yeah. So yeah, you just got to scale it
53:13up. So, because there was a guy um I
53:15think I told a story about this on a
53:16short, but uh a guy I know uh well
53:19through a mutual friend uh did basically
53:21this exact same model. He didn't do the
53:22fulfillment piece, but in terms of like
53:24it was 299 SEO and social media
53:28management for he just did all small
53:30businesses and they had a 38-month
53:33average LTV and what he would do is he
53:35take the first month he'd spend that on
53:37Google ads just so they saw some quick
53:39wins and then he never spent money on it
53:40again but they decided it worked and
53:42then that's how he ran it and uh he had
53:45like a 400 person call floor and he was
53:47doing like 12 million a month and so I
53:50uh I say that to Okay. Uh, I think you
53:52just need to do more of what's working.
53:54>> Cool.
53:55>> Yeah. And then you'll deal with the
53:56problem that you'll have some fat and
53:57lazy farmers. But like if churn's not
54:00really affected, it doesn't really
54:01affect you. It affects them.
54:02>> One thing we're considering is based on
54:05your total book of business. So if your
54:07total book of business is smaller, they
54:09we have a quota for you. But once your
54:12book of business reaches a certain
54:13point, there's no longer a quota.
54:16>> Well, that would make fatter and lazier
54:18though,
54:20>> right? I mean, if you could bring in
54:22consistently $100,000, I don't care what
54:24you do. Like, you're going to have to
54:25>> then you've answered it. If you don't
54:27care what they do, then who cares?
54:28>> Yeah.
54:29>> Just bring more guys in.
54:30>> Okay.
54:31>> Sweet.
54:32>> Alex, thanks for coming down, man. We
54:34appreciate it.
54:34>> You bet.
54:35>> Um, my name is Wter. I run a skincare
54:37business.
54:37>> What is it?
54:38>> My name is Wer. I run a skincare
54:40business and we uh sell skincare to
54:43women age 55 to 65. So, e-commerce,
54:46direct response funnels
54:47>> and then we have a phone sales team on
54:49the back end. Okay.
54:50>> And so the thing that has stopped us uh
54:54last 2 months, excuse me,
54:55>> revenue
54:57>> revenue 4.5 million a month and we want
54:59to get to 25
55:00>> million a month.
55:01>> Yeah.
55:01>> Okay.
55:02>> Yeah. And so in the sales team, we had a
55:05big manpower issue because we would then
55:08crank up ad spend and then we couldn't
55:10call the leads. So now our margins
55:11dropped and then we got stuck. Solved
55:13that with a recruitment team. And now
55:15where the next manpower issue is evident
55:18is on the leadership side. And so we
55:21have head of this, head of that, channel
55:23owners, head of growth, replacing
55:25myself, our COO K as well, making sure
55:28that we are no longer well, not no
55:30longer, but not doing the same thing in
55:33the business any longer as we're moving
55:34to higher value activities. Mhm.
55:36>> And so talking to your team, I noticed
55:39that the amount of people that apply to
55:42work at acquisition.com is so high. Um,
55:45between Kyle and I, we're not seeing
55:47that many people. Uh, and so we're
55:49thinking about now taking that same
55:51solution of a recruitment team that we
55:53had on the sales side and applying it on
55:54the leadership sites to solve this issue
55:57once and for all. What do you think?
56:00>> Okay, so four and a half million a month
56:03trying to get to 25 million a month.
56:05skincare to old ladies.
56:07>> Yep.
56:07>> Backend call team.
56:08>> Yep.
56:09>> You built the bottom layer. You're
56:11missing the top layer, which means
56:12you're getting pulled into the
56:13day-to-day.
56:14>> Yes.
56:14>> Fires all the time, which means you
56:15can't be strategic and actually run the
56:16business.
56:17>> Yes.
56:17>> Cool. Um, are the roles that are missing
56:21one-time hires or are they recurring
56:23hires?
56:24>> One time hires.
56:25>> So, in in this for something like this
56:29and do you guys are you guys a part of
56:30like any kind of like networks, groups,
56:31things like that?
56:32>> Yes.
56:33So you probably have pretty strong
56:36marketing and sales chops.
56:37>> And so you probably like if you spin
56:39your own network, you'll probably be
56:40able to find a decent sales or marketing
56:42leader.
56:42>> I think where you might where it might
56:44make more sense to like hire an outside
56:45firm because you probably don't have as
56:47much
56:48>> um expertise in let's say finance which
56:50is going to be incredibly important for
56:51you like right now as you scale.
56:53>> Um I would say tech in general because
56:55of data is going to get really
56:56compromised like
56:58>> is a [ __ ] show. Um
57:01uh so you'll need a tech lead. Uh you'll
57:04need finance. You'll probably need soon
57:07ahead of people who's really like talent
57:09management/HR
57:11uh which is both sides of it. Sometimes
57:13there are people who come in with more
57:14kind of recruitment chops. Some people
57:15have more like HR payroll etc chops. Um
57:18that's going to depend on how you
57:19advertise for it.
57:20>> Uh those are those are the type of roles
57:22that you probably don't have a network
57:24for and I would just pay the money to
57:25get the head hunter to go get it for
57:26you.
57:27>> Mhm. The other ones you probably within
57:29your network have people who like
57:31already kind of understand the way you
57:33do business.
57:33>> We do, but all my friends are looking as
57:35well if that makes sense. So, it's
57:37always, you know, you know, I kind of
57:38do, but you know, we're hiring
57:40ourselves.
57:40>> Yeah. I think um like when Leila and I
57:43have like a big hiring constraint like
57:46we'll pull ourselves out of the business
57:47and say like we're doing a six week
57:48sprint and all we're doing is taking
57:50interviews
57:51>> um so we can find talent.
57:52>> Now, mind you, that depends on the
57:54level, right? like I I pro I'm not
57:56probably meeting with directors or or
57:57managers or anything like that, but if
57:59we're hiring a seuite, like I'm going to
58:00be involved in the process. Um and so
58:02given the fact that you guys have sales
58:03and marketing chops, you guys will be
58:04able to quickly say like this guy's got
58:06game or this g's got game.
58:07>> Um and so it probably makes more sense
58:09for you to get involved more in the
58:11earlier part. And the way you do that is
58:12you just do cold reachouts.
58:13>> Like when you when you're when you're
58:15going to headunt, it's literally it's an
58:16outreach game.
58:17>> Mhm.
58:18>> And if you are CEO, the response rates
58:20are significantly higher. M and you you
58:23still use the same intro message, which
58:25is like, "Dude, you seem perfect. Your
58:27experience is amazing. Do you know
58:29anybody who's exactly like you? I have
58:31this great business opportunity." Not
58:32going to say business opportunity, but
58:33like I've got this this great role. You
58:35know, it pays this. I'm looking for
58:36somebody who's like you. Do you know
58:38anyone?
58:38>> And then they're like, "Fuck my friends.
58:39I'm interested." Um,
58:41>> right.
58:42>> And so that's that's an easy because
58:44that way it's like it's a little bit
58:45like low pressure because that way they
58:46can say like, "Oh, I don't know anyone."
58:48>> And it's not like as aggressive. My
58:51worry is that if I were to do that then
58:53the departmental heads that I'm now
58:56working with
58:57>> that the performance goes down because
58:59I'm less out of touch. I've noticed that
59:02when I check in with people very
59:04regularly and I'm you know involved in
59:06the project.
59:07>> So this is the second issue. So the
59:08issue is not one you want to have
59:10somebody but the second thing is that
59:12you don't trust the person that doesn't
59:13exist yet to do their job. No, it's that
59:16if I were to pull myself out of the
59:18management of, let's say, the six people
59:19that report to me today,
59:21>> now there's a risk of the business going
59:23down because I'm doing recruitments
59:25full-time. And then if it takes longer
59:27than expected, now we've got, you know,
59:28new fires that I wasn't aware of and
59:31then the business
59:32>> and so the people that you're managing
59:34right now
59:35>> Yeah.
59:36>> aren't good enough is what it sounds
59:37like. Or you're trying to find
59:40>> like you don't have to replace all six
59:41roles at once. Mhm.
59:43>> You can run in and say, "Okay, of the
59:44six, which one's the one that's the most
59:46on fire?
59:47>> Let's recruit that first.
59:48>> Get that in." I mean, this is growing a
59:50business, man.
59:50>> Mhm.
59:51>> Like, and then the second shittiest
59:53thing, well, now go attack that once the
59:54first one's fixed. And you just work
59:56your way across. I think a big thing
59:58that
59:59>> dictates how fast you move in business
1:00:00is your ability to recognize patterns
1:00:02with people and talent because like this
1:00:04is not your first business. I'm guessing
1:00:07>> uh first drop shipping you know with VAS
1:00:10of course this is your you know
1:00:11>> you multiple iterations from there right
1:00:13>> and so the thing is is
1:00:15>> like the first business I had I didn't
1:00:17know how to find a sales person until I
1:00:19found my first saleserson I was like oh
1:00:20my god this is what a saleserson looks
1:00:21like and then I was able to duplicate
1:00:22that and I was like I don't know what a
1:00:24sales manager look like so then I have
1:00:25to go through people and like that
1:00:26didn't work that didn't work that and
1:00:27then I found somebody I was like okay
1:00:28that's what a sales manager looks like
1:00:30and you have to keep repeating that
1:00:31process across all departments and
1:00:32across all levels and so you're able to
1:00:35rebuild build businesses much faster
1:00:36because you know what all these people
1:00:37look like and that you reach the level
1:00:38that you don't know and then that's
1:00:39where it gets slowed down again. And so
1:00:41that is where for me like pulling in
1:00:43outside people from other companies
1:00:44where I'm like, "Hey, can you just talk
1:00:46to this person? I'm about to hire them.
1:00:47Do they seem legit to you?" Like I like
1:00:49I don't know [ __ ] about legal, but like
1:00:50like can I pull up some of my attorneys
1:00:52that I currently pay and say, "Can you
1:00:53just like talk to the person? I need
1:00:54this as an in-house counsel."
1:00:56>> So like I try and vet as many of these
1:00:57things where I don't have the context
1:00:59and I just can only go off of like human
1:01:01judgment rather than expertise. This is
1:01:03where the kind of like head hunting
1:01:04firms especially for more technical
1:01:06skills uh come in handy cuz they'll if
1:01:08they're good they're more blue chip
1:01:09they'll do technicals for you.
1:01:11>> So it's like I don't know much about
1:01:13like an AI lead. It's like cool I'll
1:01:14have I'll have our technical lead go do
1:01:16the interview for the skills base and
1:01:18then you can go do cultural and then how
1:01:20would fit within the company.
1:01:21>> The positions that we're hiring for
1:01:23typically are going to be between 100
1:01:24and 200,000 a year. And the recruiters
1:01:26they charge 20 25% of the annual
1:01:28package. And so there's also a you know
1:01:31money issue there as well where if for
1:01:33these you know six seven rolls if we
1:01:35were going to pay 25k 40k you know for
1:01:38these positions
1:01:38>> per month you mean
1:01:40>> uh no just on a hiring fee to pay the
1:01:42recruiter that would be a significant
1:01:44cash impact which is why as we're
1:01:45talking let's take it in house get some
1:01:48recruiters 10k a month and now that cost
1:01:50isn't you know such a [ __ ] sorry big uh
1:01:53[laughter]
1:01:54>> again if you're doing them all at once
1:01:56it'll be a bigger cash if you do it
1:01:57month over month it'll you'll probably
1:01:59feel it less.
1:02:00>> Mhm.
1:02:00>> But the other way to frame this is uh
1:02:03it's an investment in the business. If
1:02:05this person does their job, they should
1:02:06make you more money.
1:02:07>> And so like would I pay 40 to make 400?
1:02:09Yes.
1:02:09>> Mhm.
1:02:10>> Great. And so you're just again this is
1:02:11a riskreward thing. I'm trading the
1:02:13money today to make 400 tomorrow.
1:02:15>> Mhm. Got it.
1:02:16>> So it's just a reframe and you're like
1:02:17man this feels like I'm risking stuff
1:02:18and you're like correct. Which is why we
1:02:20get compensated when it works.
1:02:21>> And then let's say all these people are
1:02:22starting to come in. We now have
1:02:24overlapping onboarding. Yeah. On Yeah.
1:02:27>> Yeah. work.
1:02:29>> Yeah.
1:02:31>> No, I'm just like you're like business
1:02:32is [ __ ] as I scale. It's like Yeah. It's
1:02:34just always sucks.
1:02:35>> Got it.
1:02:36>> And you're like, I solve this problem.
1:02:37Then you like look up and you're like
1:02:39more problems,
1:02:41>> right? It's just always problems.
1:02:42>> Thank you. Appreciate it. Thank you.
1:02:44>> Appreciate it. [applause]
1:02:51I sell mastermind programs and group
1:02:54coaching for professionals that want to
1:02:56run their own mastermind thing. So a
1:02:59doctor that's teaching other doctors,
1:03:00lawyer teaching lawyer, restaurant owner
1:03:02teaching restaurant owner.
1:03:04>> So we are at $3 million. Okay,
1:03:07>> I've done eight figures plus already,
1:03:09but in one year my best year was 4 mil.
1:03:12I want to be at 5 million. So I'm at the
1:03:14swamp. So, it's been very hard to grow
1:03:18in Brazil. Too much complexity. And
1:03:20sometimes I feel like just growing the
1:03:22business to English and doing an extra
1:03:25million, but this time in English, not
1:03:27in Portuguese, so that I can reach the
1:03:29whole world.
1:03:33>> What What's harder about 4 million
1:03:35compared to 3 million in Brazil
1:03:38>> again?
1:03:39>> So, you're at four. I I was at four two
1:03:42years ago because of everyone went
1:03:44online and then I went up.
1:03:45>> So you're three now.
1:03:46>> I'm at three.
1:03:47>> Okay. So what's the difference between 2
1:03:50million and 3 million in Brazil?
1:03:55>> How how come?
1:03:55>> Because you said that you want to get to
1:03:57five.
1:03:58>> It seems for me that it's easier to make
1:04:00an extra million in dollar than what
1:04:02would be to be in Brazil because I have
1:04:05to scale complexity.
1:04:07>> Why? So why is there so much more
1:04:09complexity for a 20% increase in
1:04:11business?
1:04:11>> I have no idea because
1:04:13>> I'm not sure I buy it is kind of my
1:04:15point.
1:04:16>> Yeah. I I I tried a lot to grow. I'm
1:04:19investing a lot of time and money
1:04:21>> but I don't know how to get out of this
1:04:23swamp at all.
1:04:23>> Yeah. And sometimes growing
1:04:25international and selling dollars seems
1:04:27like a better idea because one Royale
1:04:31would buy I'm sorry $1 would buy one
1:04:33Brazilian Royale and then $1 would buy
1:04:35two and then one by four and now it's
1:04:37one by five point something. So it seems
1:04:39like it doesn't matter how much I I I
1:04:41work hard the monetary disadvantage hits
1:04:44me hard. So when I've
1:04:46>> So you're saying Okay, hold on. So every
1:04:48year are you making more rouse? Is that
1:04:51how you say it? I'm kind of still.
1:04:54>> Are you making more real every year?
1:04:56>> I'm kind of still.
1:04:57>> Okay. So, you're not making less. Like,
1:04:59I'm not going to I'm not going to take
1:05:00acquisition.com's money and then do
1:05:02monetary policy and see if my like
1:05:04dollars have gone up or like, "Oh,
1:05:05Bitcoin's up, therefore I made less
1:05:06money." Like, no. Like,
1:05:08>> are you selling more units now than you
1:05:10were? Are you selling the same units now
1:05:12as you were before?
1:05:12>> No, I I'm going down.
1:05:14>> Okay. You're making less. Fine. Yeah.
1:05:16So, what are the advertising activities
1:05:19that you were doing before that are no
1:05:22longer working?
1:05:25I'm doing whatever I did in the past and
1:05:28a bit more of stuff. So, earlier it was
1:05:31easier to sell and now I just tried
1:05:34several different sales process. So, I
1:05:37used to do four launches a year, now I
1:05:39do five. I'm investing more on
1:05:40evergreen. When I put more money, the
1:05:43ROI goes down. So, I'm really trying
1:05:46whatever I can take out of
1:05:47>> I think you might be trying too many
1:05:48things.
1:05:49>> I am.
1:05:49>> Yeah. I think like each of those ideas
1:05:52are fine. I think doing all of them is
1:05:54where you're getting stuck.
1:05:55>> Yes.
1:05:56>> Um because doing seeing a 20 or 25% lift
1:05:59in a business from an acquisition
1:06:01channel that's already proven and you're
1:06:02not at a revenue level that I'm like,
1:06:03"Oh, your market's capped." Like you're
1:06:05not like one of the big one of the big
1:06:08downsides of being an international
1:06:09entrepreneur is that everyone assumes
1:06:11that if you come to America, you're
1:06:12somehow just going to like get rich and
1:06:14you're going to crush it. But you forget
1:06:15you're also competing against Americans.
1:06:17>> True.
1:06:17>> And I don't say that as a as like a you
1:06:19know beating our chest because the thing
1:06:22is is that if you take everything we do
1:06:23and go to anywhere else in the world,
1:06:25you're five years ahead. [laughter]
1:06:27>> So if people were like, "Dude, deadline
1:06:28funnels are crushing." It's like, yeah,
1:06:29that's five years ago,
1:06:31>> right? like SEO is back, right? You know
1:06:35what I'm saying? So, like there there
1:06:36are
1:06:37>> uh you're wanting the pros without the
1:06:39cons of the US market, whereas like I
1:06:41don't think you've any way hit the
1:06:43saturation point in Brazil
1:06:45>> at $4 million a year. I just don't think
1:06:47that's happening. So, I would rather you
1:06:49just like focus on growing the business
1:06:51within the constraints of what you
1:06:53already know and operate rather than
1:06:55trying to get American customers, get
1:06:57American talent. And the tactics that
1:06:59you teach probably might not work in
1:07:00America. they work better there, things
1:07:02like that. Um, because they might be not
1:07:05as advanced as what we're doing here.
1:07:07Again, not a slight, I'm just saying.
1:07:08>> Yes. Yes.
1:07:09>> Big picture.
1:07:10>> So,
1:07:12why can't we do more?
1:07:15>> No. No. Like, seriously, walk through
1:07:16it. So, do you have the metrics around
1:07:18it?
1:07:18>> Everything is a bit messed up.
1:07:20>> So, we crossed out market. We're going
1:07:21to ignore market. Okay.
1:07:23>> So, metrics. Do you have metrics?
1:07:25>> Not as clear as I wish.
1:07:26>> Okay. Well, then
1:07:28>> Okay.
1:07:29like you're trying a lot of stuff
1:07:32because you don't know what's working
1:07:33and you don't know if it worked.
1:07:35>> Everything is working a bit
1:07:37>> and that's just poor attribution. Most
1:07:39of the times most of it's not working at
1:07:41all and one thing's working a lot and so
1:07:43you just figure out what it is and then
1:07:46put all the resources towards that
1:07:47thing. So let's assume you get the
1:07:50metrics do which you should. There's
1:07:51tons of software that can get
1:07:52attribution tracking better. It's not
1:07:53going to be perfect and never will be
1:07:54but you'll get at least directional data
1:07:56that can help inform the decision. So
1:07:58you were doing four launches a year,
1:08:00then you did five, and then you started
1:08:01doing an evergreen thing, right?
1:08:03>> Yeah.
1:08:03>> The evergreen starts taking away from
1:08:04the launches though because the people
1:08:06who would have come to the launches,
1:08:06blah blah blah, right?
1:08:07>> Not to Drew.
1:08:08>> Yeah. So um what I was talking about
1:08:11earlier with Jonathan for his affiliate
1:08:12marketing piece about the like you
1:08:14you're not being you running paid ads as
1:08:16your primary way of getting customers.
1:08:17>> Yes. And a lot of content. I have
1:08:19600,000 followers on Instagram, 200,000
1:08:22on YouTube.
1:08:24>> I feel like you should be making more
1:08:26money. Um,
1:08:28>> actually, what's the content you make
1:08:29about?
1:08:30>> I talk about how to package your
1:08:31knowledge into a digital product,
1:08:33courses, mentorship.
1:08:34>> Are they legit followers?
1:08:35>> Yeah.
1:08:36>> Okay.
1:08:37>> Here's the thing. Because of the
1:08:38monetary thing in Brazil is 20 million
1:08:40and there's no 10 players doing more
1:08:42than that in Brazil on my space. So, I'm
1:08:44one of the top 10 players in there.
1:08:46>> Yeah. Yeah.
1:08:46>> Maybe top five.
1:08:47>> Yeah. So, you're doing 20 million real.
1:08:50>> Yeah. Re eyes.
1:08:51>> Really?
1:08:52>> Re eyes.
1:08:53>> Re eyes.
1:08:53>> Re eyes.
1:08:54>> Reis.
1:08:55>> Yeah. In English it's
1:08:57>> real.
1:08:58>> Yeah.
1:09:00>> Brazil dollars.
1:09:01>> So,
1:09:04[laughter]
1:09:05so
1:09:07um how many units are you selling a
1:09:09month right now?
1:09:10>> I have 100 people at my mastermind and
1:09:12200 people on my mentorship program.
1:09:14Okay. Mastermind goes for 20K and
1:09:16mentorship program at 10K.
1:09:18>> Brazil dollars.
1:09:19>> No, no, Brazil.
1:09:21>> So that you understand it's like Yeah.
1:09:23>> Yeah. Yeah. Okay. I mean those price
1:09:24points seem fine.
1:09:25>> Yeah.
1:09:26>> Um so 200 at 10 and then 100 at 20.
1:09:30>> Yeah.
1:09:30>> And a lot of lower ticket stuff so that
1:09:33it feeds into that.
1:09:34>> Okay. Um
1:09:37I I think you have an advertising issue
1:09:39like you're not cons like you could take
1:09:41more customers, right?
1:09:42>> Yes.
1:09:43>> Yeah. So you are making So when you're
1:09:45making your ads, what do you pro you
1:09:47promote your launches and you promote
1:09:48your evergreen thing. You're not sure
1:09:50how those are working. Okay. Um, what
1:09:53else do you promote?
1:09:54>> I promote people following me on
1:09:56Instagram. So, I do some reals and then
1:09:58I boost them and then whenever they
1:10:00start following me, I reply back. I DM
1:10:02them if they have a verified account.
1:10:04>> So, is it a DM funnel?
1:10:05>> Yes.
1:10:06>> Okay.
1:10:06>> And it works very well.
1:10:08>> Yeah. Yeah. Great. Okay. So, you do
1:10:12boosted posts, DMFunnel, DMFunnel to low
1:10:16ticket product? No, I I send them
1:10:19straight to an application page where it
1:10:21pitch them on the 20k if they doing
1:10:24seven figure plus or the 10k if they're
1:10:26doing seven figure less.
1:10:27>> Okay?
1:10:28>> And if they feel the application, I
1:10:29review the price in there. And if they
1:10:31say they're good and they say yes to the
1:10:33price, I send them an audio message
1:10:34saying, "Hey, I saw your application.
1:10:36You want to do this, this, this, and
1:10:37that. The program is a nice fit. Do you
1:10:39have any questions? Are you ready to
1:10:40start?" Some people say they're ready to
1:10:42start. I wrote them straight away on the
1:10:44DM. If they need some more help, I let
1:10:46them ask there and then I answer. If
1:10:48they need more convincing or they are
1:10:51not that that sure, I send them to my
1:10:54team to close them on the call.
1:10:56>> Okay. I still think it's an advertising
1:10:58issue.
1:10:59>> So
1:11:01basically, what stops you from spending
1:11:02more money on advertising?
1:11:04>> Whenever I increase the ad spend, the
1:11:06rows go down in a way that is not worth
1:11:08it.
1:11:09>> Yeah. So
1:11:12I will give you my theory. Okay,
1:11:14>> which is that you're predominantly
1:11:16advertising to your existing audience
1:11:17when you run ads.
1:11:20>> So essentially you're running a
1:11:22retargeting campaign that feels like
1:11:23it's cold traffic but it's not. And
1:11:25you're doing boosted as your primary way
1:11:27of running ads or you're doing also
1:11:28you're doing ads with conversions.
1:11:29>> My main way of getting new leads is
1:11:32through the launches. So when I do a
1:11:34launch I I focus on on on cold traffic.
1:11:37>> Yeah.
1:11:38>> But I also have
1:11:39>> the launches work.
1:11:40>> They they do. Last time I invested
1:11:4250,000 REI, got 500,000 RII. So 10x 10x.
1:11:46>> Yeah.
1:11:46>> Yeah. But I didn't know I would get this
1:11:48result, right? Last time I did this, it
1:11:50didn't work that well.
1:11:52>> What changed?
1:11:53>> It seems like when I do a launch, I'm
1:11:55not converting those that are coming
1:11:56from this launch. Sometimes they watch
1:11:58two launches, three launches, as happens
1:12:00with you. Sometimes people are following
1:12:01me like for one year or two years or so
1:12:03>> and then they convert. So it's very hard
1:12:05to attribute to something because I'm
1:12:07I'm doing so much stuff.
1:12:09>> Yeah.
1:12:11So,
1:12:19I really think it just comes down to the
1:12:21advertising.
1:12:22>> Okay.
1:12:22>> And I'm and I'm bringing this up because
1:12:23like you have zero supply constraints.
1:12:25You can handle more customers. Totally.
1:12:27>> Right. And so we have and your sales
1:12:29process seems like it works. Okay. So,
1:12:31I'm not going to like touch that.
1:12:33>> So, it's really just pure advertising,
1:12:35which is
1:12:35>> sell more for the lowhanging fruits,
1:12:37though.
1:12:37>> Yeah. Yeah.
1:12:38>> Yeah. So, we might need
1:12:41like I think the launches is a a fine
1:12:44idea. Um, you can do them four times a
1:12:47year. That's fine. I think that the
1:12:50evergreen process that you do in
1:12:51between, we want to have more reasons
1:12:53for someone who doesn't know who you are
1:12:56to engage with your stuff.
1:12:58And so, you need to have more assets to
1:13:02expand.
1:13:10We need to expand this.
1:13:12>> And so you I mean you're making more
1:13:15content. Can we make the content better?
1:13:16Can we do it across platform? I know it
1:13:17sounds like uh more better, but like I
1:13:19mean I'm in that game too. I make more
1:13:21better content. Can I write another
1:13:22book? Can I make a scaling road map?
1:13:25>> Um and depending on the lead magnet that
1:13:26you put out, you will dramat have
1:13:28dramatically different lead quality. So
1:13:30for example, 20% of people who go
1:13:32through the scaling road map are
1:13:34marketing qualified leads for us.
1:13:36>> 5% of people who buy a book.
1:13:38>> So that gives you now also a book
1:13:40purchase is harder to do almost in some
1:13:42ways than getting someone to give me
1:13:43their information on a lead magnet.
1:13:45>> So this is where I think you're missing
1:13:46on the metrics. I will bet you that you
1:13:47can see from the various funnels you
1:13:49have. You might have leads coming from
1:13:51all over, but your sales might be coming
1:13:52from one and it might be more expensive
1:13:54than some of the others, but the rorowaz
1:13:55is still superior. And so it's like it
1:13:57cost me $1,000 to get this, but I make a
1:13:59hundred on it versus it costing me uh
1:14:03you know $5 and I make 20. It's like
1:14:05well for sure I'll give you guys a fun
1:14:06stat. So in the launch uh we had uh
1:14:10campaigns that were for lead genen and
1:14:12we had campaigns that were uh targeted
1:14:14for rorowaz. So optimized for oz
1:14:15optimized for lead genen. On the lead
1:14:18genen campaigns our average lead cost
1:14:20was $5 and we got four to one on those
1:14:23campaigns. So every $4 $5 lead was worth
1:14:2620 to us on our rorowaz based campaigns.
1:14:29Our average lead cost $17
1:14:32and our rorowaz and the average lead was
1:14:34worth 189. That was 17. So it was an 11
1:14:39plus rorowaz on the paid side for the
1:14:42rorowaz driven campaigns. And so most
1:14:45people, most business owners will look
1:14:46at this and say, "Well, this one's
1:14:47getting $5 leads. This one's getting $17
1:14:50leads." shut off the 17 and get the
1:14:52five,
1:14:53>> right? And that's why most business
1:14:54problems are counterintuitive because
1:14:56the intuitive answer is usually wrong
1:14:58because you've already tried it.
1:14:59>> Yeah.
1:14:59>> And so for your business, I think that
1:15:02you need a superior lead magnet that is
1:15:04made for the avatar that you're talking
1:15:06to.
1:15:07>> Okay.
1:15:08>> And running that as your top of funnel
1:15:10because what you're what we're talking
1:15:12about right now is that you need to have
1:15:13so you're graduating. This is me
1:15:15graduating you to another level of
1:15:17marketing.
1:15:17>> All right? And so the current level
1:15:19you're at is you're only advertising to
1:15:21the small dot here.
1:15:22>> Yeah,
1:15:22>> you're advertising to the people who are
1:15:23product aware and right at the bottom
1:15:25ready to buy and you're shifting them
1:15:26over.
1:15:27>> We have to extend the time horizon which
1:15:29you're already noticing some of the
1:15:30people who buy come on their second and
1:15:31third. But we don't have products here
1:15:33and we don't have um advertising that
1:15:36really sits here besides your content.
1:15:39>> The launches actually they focus on the
1:15:41opportunity.
1:15:42>> Yeah. Well, the launches convert cold
1:15:44traffic because you take someone from no
1:15:47information all the way to here in 5
1:15:49days or whatever it is,
1:15:50>> right? But every time you're not doing a
1:15:52launch, you have no strategy for how to
1:15:53get those people. This is what I'm
1:15:55trying to this is what I'm trying to
1:15:56talk about. So, think, okay, here's a
1:15:58good visual for you. You have your five
1:16:00days of launches, right?
1:16:01>> Yes.
1:16:02>> Take that and accordion it out for the
1:16:04time in between in terms of the stuff
1:16:05you cover.
1:16:09So all the information that someone gets
1:16:10from you during a launch is enough
1:16:12information to make a purchasing
1:16:13decision.
1:16:13>> Yes.
1:16:14>> So we need to take that content and
1:16:16distribute it in as many different ways
1:16:17as possible across all channels in both
1:16:19paid and organic and then make sure that
1:16:21the lead magnets that you're giving
1:16:22there match and then all your lead
1:16:24magnets that you do include a ticket to
1:16:26your next launch.
1:16:27>> Okay,
1:16:28>> that's perfect.
1:16:30>> Okay. And the international expansion,
1:16:32do you think it's a distraction or
1:16:34something? I should
1:16:35>> distraction.
1:16:37Okay, thanks.
1:16:38>> Yeah, if you like this video and you're
1:16:39a business owner who wants to break
1:16:40through your current revenue ceiling, I
1:16:42distilled every lesson from scaling 10
1:16:43businesses past 10 million and three
1:16:45businesses past 100 million into a
1:16:47completely free scaling road map that
1:16:49I've used to go from 0 to 1, 0 to 10,
1:16:51and 0 to 100 plus. And so, you can click
1:16:53here and you can check it out. Again,
1:16:54absolutely free. And since you're a
1:16:56business owner, appreciate you. And uh
1:16:57enjoy.

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