"Should I Quit My Business?" — Transcript

Full transcript

1. 0:00Hi, uh my name is Sam. Uh my business
2. 0:02partner and I run a membership site for
3. 0:04real estate agents where they basically
4. 0:06they get daily social media templates,
5. 0:08lead magnets, training videos, all this
6. 0:10stuff to help them sort of save time and
7. 0:12get better at Instagram.
8. 0:13>> Okay.
9. 0:15So, it's a membership
10. 0:16>> Yeah, we do
11. 0:17>> What do you What do you give them on a
12. 0:18monthly basis?
13. 0:21>> Um
14. 0:23a lot of it is just daily social media
15. 0:24templates. So, 30 days of content that
16. 0:26they can edit, customize to their own
17. 0:28personal branding, post on social media,
18. 0:31and then there's a library of like
19. 0:32little lead magnet things and and that
20. 0:35they can customize again and use on
21. 0:36their Instagram and training videos help
22. 0:38them set up their Instagram, all that
23. 0:40stuff.
24. 0:40>> But mostly it's going to be the the the
25. 0:42the content templates.
26. 0:44>> Yeah, it's just the content membership,
27. 0:45yeah.
28. 0:46>> Okay, got it. Okay, so how many people
29. 0:48you got? What do you charge?
30. 0:51>> Yeah, so we charge uh $49 a month.
31. 0:53>> All right.
32. 0:54>> Um we have just under 300 members.
33. 0:56>> Okay.
34. 0:57>> And uh yeah, I mean we do just under
35. 1:00sort of 20k a month. And we take home,
36. 1:02you know, 75, 80% of that.
37. 1:04>> Cool. Got it. So, what is the What's the
38. 1:07issue?
39. 1:09>> Yeah, so my question is, you know, how
40. 1:11do you
41. 1:12how do you sort of
42. 1:12>> What's churn? What's churn?
43. 1:14>> Yeah, uh
44. 1:15Yeah, uh
45. 1:16hovers around 12%.
46. 1:18>> Ooh, monthly?
47. 1:20>> Yeah.
48. 1:21>> Monthly? E. Okay, got it. Do you have
49. 1:24any metrics that like after a certain
50. 1:25point people continue to stick?
51. 1:30>> Um we've only been in business for just
52. 1:32over a year, so it's hard to get that
53. 1:35like 12-month kind of stick number, but
54. 1:37monthly it's it's 12%.
55. 1:39>> Yeah, yeah. Well, I'll tell I'll tell
56. 1:40you why this is important.
57. 1:41If let's say it's 12%, well, 12% is
58. 1:44tough cuz that's like you lose all the
59. 1:45customers by the end of the year,
60. 1:46almost. Um okay, what's sales velocity
61. 1:49right now?
62. 1:50Meaning monthly sales. Units sold.
63. 1:52>> between, you know,
64. 1:53you know, 50 a month, 40, 50 a month.
65. 1:55>> 50 a month?
66. 1:57>> Yeah.
67. 1:58>> Okay, got it.
68. 1:59>> All right. And we're getting to the
69. 2:00point where churn is starting to catch
70. 2:02up with us.
71. 2:02>> Yeah.
72. 2:03>> Um
73. 2:03and and that kind of leads into my
74. 2:05question being, you know, how do you
75. 2:07kind of decide whether to push or pivot
76. 2:09when there are sort of
77. 2:10these structural challenges
78. 2:12or at least perceived structural
79. 2:14challenges in your market. Um and you're
80. 2:16maybe looking in a different market, a
81. 2:17different niche that might sort of be
82. 2:19better for your business or for your
83. 2:21offer, essentially. And then not
84. 2:23marketing I didn't do it for real estate
85. 2:25agents, maybe doing it for a different
86. 2:28uh market.
87. 2:29>> Why do you think
88. 2:31this other market is going to be
89. 2:33different than real estate agents?
90. 2:36>> Yeah, so I mean
91. 2:38generally real estate agents
92. 2:41um from my perspective, they're they
93. 2:44there's no structural volatility in
94. 2:46terms of their income and obviously
95. 2:47[clears throat] with SMBs, that's you
96. 2:49know Mhm. Given it's probably worth real
97. 2:51estate agents um
98. 2:54and you know, they don't make a lot of
99. 2:55money. There's not a lot of willingness
100. 2:57to pay.
101. 2:57>> Yeah.
102. 2:58>> And
103. 2:59this is what we've seen in our market.
104. 3:00There is like a market leader with, you
105. 3:02know, over 5,000 members been doing it
106. 3:04for six plus years now um and a couple
107. 3:06others with 1,000 plus like we are a
108. 3:08late entrant into this market. This is
109. 3:09something we started to do just cuz we
110. 3:11thought we might as well pick up a
111. 3:12proven business model.
112. 3:14>> Okay.
113. 3:14>> Um
114. 3:16and we've seen other content memberships
115. 3:18in other industries like, you know,
116. 3:20accountants, uh one with like aesthetic
117. 3:22nurse practitioners
118. 3:23>> Yeah.
119. 3:24>> started at the same time as us, have the
120. 3:25same Instagram following, have gone
121. 3:27through their funnels and they've like
122. 3:285x
123. 3:29>> Yeah.
124. 3:29>> from and where in terms of what we've
125. 3:31been able to do growth-wise and we're
126. 3:32wondering trying to figure out what that
127. 3:34is, essentially.
128. 3:35>> Um well, do you do you have full
129. 3:38transparency into their numbers?
130. 3:42>> Um I have full transparency into a few
131. 3:44of their just, you know, the amount of
132. 3:46members they've had and the amount of
133. 3:47Instagram followers they've had. I've
134. 3:49kind of gone through their funnel a
135. 3:50little bit. I know that they don't
136. 3:52necessarily run the kind of ads. Like
137. 3:53it's not like they're doing a kind of ad
138. 3:55spend, for example.
139. 3:56>> Do you know what their churn is and how
140. 3:57many members they have?
141. 4:00>> Um I can give you one example of one
142. 4:02that has I believe like 50k on
143. 4:04Instagram. They have 40k on Instagram.
144. 4:06We're kind of friendly with them and I
145. 4:09know they have like 1,800 members.
146. 4:11>> Okay.
147. 4:11>> And that's past that's a year and
148. 4:13they're and they're still lasting.
149. 4:15From what I can tell is like 100 plus a
150. 4:17month, maybe 150 to 200 bucks.
151. 4:19>> Okay. And they started the same time as
152. 4:20you?
153. 4:22>> Basically, yeah. Similar following all
154. 4:23that.
155. 4:24>> So I mean the only
156. 4:25>> no they have no big competitors.
157. 4:27>> Yeah.
158. 4:28Well, I mean I think going to an
159. 4:29underserved marketplace is not a
160. 4:31terrible idea.
161. 4:32Um
162. 4:33the reason I'm like more okay with this
163. 4:34is that you guys are still really early.
164. 4:36You know what I mean? Like it's it's
165. 4:37kind of it's it's pretty much a brand
166. 4:38new business. I do think that like
167. 4:41is this business that you have uh
168. 4:43fixable? Yes. If the market leader, I'll
169. 4:46put quotes around that, has 5,000
170. 4:47people, well there's like a million
171. 4:49realtors.
172. 4:50So there's lots of opportunity, right?
173. 4:52That's still there. Like no one really
174. 4:54owns the market. Um so those are kind of
175. 4:56the plus sides. I'm going to also bet
176. 4:58that like to your point, it might not be
177. 5:00that realtor like realtors, of course,
178. 5:02if you take them in aggregate are have
179. 5:04volatility, but if you look at the top
180. 5:055% of realtors, like they they make
181. 5:08they're full-time, right? If you have a
182. 5:10lot of part-timers who are in there, uh
183. 5:12then you have huge amounts of churn cuz
184. 5:14they're they're not even they're barely
185. 5:15even business owners, right?
186. 5:18>> Right.
187. 5:18>> So you could probably fix
188. 5:20>> Just for value prop, though.
189. 5:21>> Yeah. Okay, go ahead.
190. 5:24>> Yeah, just in terms of our value prop,
191. 5:25it's me if you're a top 1% agent, you
192. 5:27probably have uh some sort of social
193. 5:29media manager or media team. We're a
194. 5:31low-cost alternative to that,
195. 5:32essentially. So it's kind of just a a
196. 5:35uh you know
197. 5:36a feature not a bug, I guess, in our
198. 5:38business, so to speak.
199. 5:39>> Yeah.
200. 5:40Um but you'd have to have like this the
201. 5:42I mean the thing that's bad with the
202. 5:44business right now
203. 5:46Okay. Zooming all the way out, What do
204. 5:47you want to have happen?
205. 5:50Do you want to sell this thing to go and
206. 5:51make more money?
207. 5:54>> Short term, make more money, for sure.
208. 5:55That's what we're talking about, more
209. 5:57cash flow.
210. 5:57>> the thing is is that you're selling 50 a
211. 5:59month, which is actually like really not
212. 6:00a lot. Um from a sales velocity
213. 6:02perspective, even the size of that
214. 6:03market. And that like that is the
215. 6:05problem. Right? Like you could sell like
216. 6:07if you have a million person
217. 6:08marketplace, it's like we could be
218. 6:09selling a thousand of these a month.
219. 6:10Right? And then the churn, even though
220. 6:12it's, you know,
221. 6:1312%, it's like, well, we just know that
222. 6:15we're going to get 8 months on average
223. 6:17times 50 bucks, so we're going to make
224. 6:19$400 per customer as long as CAC is, you
225. 6:22know, $100 or less.
226. 6:25Cool. We have high margins, we're good
227. 6:26to go.
228. 6:28Um and you just take the money and then
229. 6:29you do whatever you're going to you're
230. 6:30going to do. Uh that's like short term.
231. 6:32You could do that. And I think targeting
232. 6:34people who've done a sale within the
233. 6:35last 30 days or something like that.
234. 6:37Maybe they're not the 1%, but they're
235. 6:39like, quote, on the way, they're, quote,
236. 6:40reinvesting their business. And if they
237. 6:41just had a sale in the last 30 days,
238. 6:42they have some cash. Like there's some
239. 6:44elements here that you can do. I also
240. 6:45like, are you doing a big uh are you
241. 6:47doing a big promotion for getting
242. 6:48annuals?
243. 6:51>> Uh we try Yeah, we try our best. We do 2
244. 6:53months off. We're we're starting to add
245. 6:55other bonuses in terms of annual as well
246. 6:57to try to push more people towards
247. 6:59annuals, but yeah.
248. 6:59>> Wait. Right now, LTV is 8 months for
249. 7:01you. So, you might as well give four and
250. 7:03pull the cash flow forward since it's
251. 7:04equivalent. And churn on those customers
252. 7:05will be lower.
253. 7:08>> Right.
254. 7:08>> Cool. All right, so that's thing one.
255. 7:10Um
256. 7:11now, to the larger question of like
257. 7:13should you go after a blue or you know,
258. 7:14a blue or ocean market?
259. 7:16Um and in in so doing like does that
260. 7:18mean you're going to start another
261. 7:19Instagram page and like build that whole
262. 7:20thing up and do that game?
263. 7:24>> Yeah, so that's kind of the thing that
264. 7:25we're, you know, relatively invested in.
265. 7:28We do this all the time and do it. It's
266. 7:29something that I think we can do, but
267. 7:30it's obviously going to take time.
268. 7:32And time away from our, you know,
269. 7:34everything else we do.
270. 7:36>> Yeah.
271. 7:38I like I
272. 7:40Okay, I'll tell you what I want.
273. 7:41I I don't think it's a bad idea. I'll
274. 7:43say that. I don't think it's a bad idea.
275. 7:45Um like normally I just say like no,
276. 7:47stick with your existing thing. I do
277. 7:49think you should stick with this thing a
278. 7:50little longer and I'll tell you why. I
279. 7:52think that it would it would behoove you
280. 7:53to learn which types of realtors churn
281. 7:56versus the ones that don't. And there's
282. 7:58probably two or three characteristics
283. 7:59that separate the people who do versus
284. 8:00the ones that don't. Number one. Number
285. 8:02two, I do think you need to make a
286. 8:02better incentive to get people to prepay
287. 8:04for annual. Number three,
288. 8:06is there a version of this business that
289. 8:08like on top of this you sell some sort
290. 8:10of maybe $500 a month thing as an upsell
291. 8:13or $1,000 a month thing that does have
292. 8:15have some sort of managed element to it
293. 8:16that you have lots of AI
294. 8:18and automation built into it so that you
295. 8:20can do with high gross margins.
296. 8:24>> Right. Yeah, definitely something we
297. 8:25thought about just adding adding
298. 8:26upsells, adding different offers.
299. 8:27>> Yeah, I I like I I I can appreciate the
300. 8:30simplicity of the business, believe me.
301. 8:32Um I just feel like you have a lot more
302. 8:33to learn from this before doing the next
303. 8:35thing.
304. 8:36Um rather than just saying like oh, it's
305. 8:38the avatar. It's just cuz like that's
306. 8:39the obvious thing that everyone says and
307. 8:41the market leader and I'll put quotes
308. 8:43here has 5,000 people. It's not that
309. 8:45many.
310. 8:48>> No, and I and I I've tried not to just
311. 8:50say it's the avatar cuz it's the best of
312. 8:52my abilities, you know what I mean? It
313. 8:53seems like yeah, it's the easy way.
314. 8:54>> Okay. So, that's what I would do. All
315. 8:55right. So, I would try to learn more
316. 8:57about the customers number one. Number
317. 8:58two, I'd have the annual prepay thing.
318. 9:00Number three, I would start running ads
319. 9:02and see what your cost of acquisition is
320. 9:03with ads.
321. 9:05And having that strong pre pre
322. 9:07prepayment thing. I would also have a
323. 9:08self-liquidating offer on the thing that
324. 9:10pays that could be even higher than just
325. 9:11the annual, right? Cuz that could just
326. 9:13improve the funnel metrics overall.
327. 9:19Maybe like a a two or three
328. 9:20>> like a high ticket a higher ticket item?
329. 9:21>> Yeah, and I'll say higher ticket with
330. 9:22quotes here. I'm talking I'm talking
331. 9:23like 197 to you know, 397. Somewhere in
332. 9:27there, which might be like
333. 9:28uh we have all these accounts. We'll
334. 9:30tell you we're going to give you the 100
335. 9:31best performing pieces of real estate
336. 9:33content over the last year.
337. 9:35I would buy that.
338. 9:35>> Right.
339. 9:36>> Right?
340. 9:38>> Yep.
341. 9:39>> All right. That's what I would do. I
342. 9:40think you need to learn this game better
343. 9:42and then you'll have more perspective
344. 9:42and you might just break through and
345. 9:43then just become the market leader.
346. 9:46>> Yeah, okay. Thank you. Really appreciate
347. 9:48that and appreciate everything you do,
348. 9:50all the content you make.
349. 9:51>> Appreciate you, too.
350. 9:53Later.
351. 9:53>> Thanks.
352. 9:54>> All right.