Why a Second Customer Type Might Slow Growth — Transcript

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1. 0:00I sell low-ticket digital video products
2. 0:03>> Yeah.
3. 0:03>> to churches like motion backgrounds
4. 0:06>> I was going to make a deal with you like
5. 0:07doing better than I deserve, you know,
6. 0:08sorry to cut you off.
7. 0:09>> [laughter]
8. 0:10>> And then
9. 0:11um
10. 0:12like video editing assets like film
11. 0:13transitions, color overlays to
12. 0:16filmmakers and editors.
13. 0:17>> So, you sell to churches
14. 0:19>> Mhm.
15. 0:19>> and you sell to editors.
16. 0:21>> Yeah, it's two separate brands.
17. 0:22>> Okay.
18. 0:23>> understand what you're going to say. I
19. 0:24know what you're going to say. I've been
20. 0:25advised by your team so far that I
21. 0:27should actually keep both and that
22. 0:28they're both important [snorts] and
23. 0:29basically
24. 0:30they're kind of under one umbrella even
25. 0:32though they're different
26. 0:34avatars.
27. 0:35I'm at 1.2 million combined.
28. 0:38>> Okay.
29. 0:39>> About 350 on the film editing side, but
30. 0:41I do about an hour a week on that. And
31. 0:44so
32. 0:46even lower an hour a week.
33. 0:47>> That's right.
34. 0:48>> The other one I'm kind of going all in
35. 0:50on.
36. 0:50>> You're making 6,000 an hour
37. 0:52>> Yeah.
38. 0:52>> on that side. Okay.
39. 0:53>> Yeah, and the other one I'm kind of
40. 0:54going more all in on and that's around
41. 0:56750. So, between those two.
42. 0:58>> Okay.
43. 0:58>> Um
44. 0:59>> And that one takes all the rest of the
45. 1:00hours.
46. 1:00>> Yeah. I feel that's what is stopping me
47. 1:04is I
48. 1:05again it's low-ticket.
49. 1:06>> Yeah.
50. 1:06>> Ranging between like 29 bucks or like
51. 1:09>> Church?
52. 1:10>> No, the church is like We have it that's
53. 1:12recurring revenue. It's 348 a year or
54. 1:14708 a year.
55. 1:16>> Okay.
56. 1:16>> still, but it's above our market.
57. 1:20What I feel is stopping me is not
58. 1:22understanding the right money model to
59. 1:25um
60. 1:26scale and take this I mean I have
61. 1:28170,000
62. 1:29customers.
63. 1:30>> Okay.
64. 1:31>> So, I think it's kind of what you're
65. 1:32saying of like a lead. I have a very
66. 1:34large lead magnet pool that I could sell
67. 1:36into bigger things on both sides.
68. 1:39But I want to understand how to do that
69. 1:41best.
70. 1:41>> Okay, I'm going to ask like if you can
71. 1:43just rapid-fire answer for me. So,
72. 1:46the AV people you sell digital assets
73. 1:49to?
74. 1:51>> Sorry, say that one one more time.
75. 1:52>> Tell me that who you sell what to again
76. 1:54real quick.
77. 1:54>> Video assets to video editors.
78. 1:56>> What does that mean?
79. 1:57>> Uh
80. 1:58color presets, film transitions, film
81. 2:00burns.
82. 2:01>> type stuff?
83. 2:02>> Grains, things that your that your team
84. 2:03would use to
85. 2:04>> in their own
86. 2:05>> Yes, in their own edits.
87. 2:06>> Okay. And then on the church side, exact
88. 2:09What do you sell exactly to
89. 2:10>> Basically motion backgrounds like that,
90. 2:11but better.
91. 2:12>> Okay.
92. 2:13>> Yeah.
93. 2:14>> [laughter]
94. 2:16>> Okay.
95. 2:18>> [laughter]
96. 2:21>> We'll see.
97. 2:21>> Yeah.
98. 2:24>> So, okay. So, you sell these guys
99. 2:25graphics, you license them to them for
100. 2:27348 or 708 or whatever it is per year,
101. 2:30and how many customers do you have in
102. 2:33each of these? And this one is this is
103. 2:34one time and the church is recurring.
104. 2:36>> Yes.
105. 2:37>> And that's why you're going all in on
106. 2:38this side versus that side. Where's the
107. 2:40170,000 pool of leads?
108. 2:42>> Uh I've been running the video editing
109. 2:44asset side of things for the past 7
110. 2:47years. And so I just have a it's just
111. 2:49there's so many loads to get people
112. 2:50>> to churches and then you say other
113. 2:52people can use it too kind of thing?
114. 2:54>> Kind of.
115. 2:55>> Okay.
116. 2:55>> Sorry. It's as confusing to me sometimes
117. 2:58as it is to you.
118. 2:59>> Yeah, so you like the core business is
119. 3:00the is the 750 thing and then you have,
120. 3:03you know, offshoots of assets that get
121. 3:05created for those customers and you say
122. 3:07you guys can just
123. 3:08license them from me and then
124. 3:09>> Yeah.
125. 3:10>> but one time though.
126. 3:12>> Uh no, it's it's
127. 3:14the video editing side is one time.
128. 3:17Church is recurring.
129. 3:18>> Why don't you just make the video
130. 3:19editing side
131. 3:21Well, I don't really care about that
132. 3:22side anyway. So, let's talk about the
133. 3:23church. So,
134. 3:24um what stops you from, you know,
135. 3:26tripling the church?
136. 3:27>> Um
137. 3:28so, content has been been a big
138. 3:30constraint. I'm a video editor and so
139. 3:32I've bottlenecked myself and now I'm
140. 3:33finally letting that go. I'm starting to
141. 3:35delegate.
142. 3:35>> So, your demand constraint, not supply
143. 3:37constraint on the church side. Okay.
144. 3:38>> so I have plenty of ideas for content
145. 3:40that's about to go off. Um
146. 3:42>> What are margins?
147. 3:43>> Um margins on the church side are
148. 3:47um probably 60%.
149. 3:49>> Okay, good.
150. 3:50>> Yeah.
151. 3:50Um and then
152. 3:53yeah, besides that I feel like there's a
153. 3:54high ticket offer or a higher ticket
154. 3:57offer of some kind to be able to be a
155. 3:58little bit more
156. 4:00focused with or sort of high touch point
157. 4:02with churches, help them build better,
158. 4:04you know, processes to
159. 4:06have a better
160. 4:07visual experience overall. Um, but I'm
161. 4:10afraid to jump into that and kind of
162. 4:12break the simplicity of
163. 4:14automated digital products that I'm used
164. 4:16to.
165. 4:16>> Mhm.
166. 4:17Mhm.
167. 4:22So, $700,000 you said you have like 20
168. 4:24like 2,000-ish churches that pay you?
169. 4:27>> Yeah.
170. 4:27>> Somewhere in there?
171. 4:28>> 2,000, yeah.
172. 4:29>> Okay.
173. 4:32How many churches are there?
174. 4:34>> In the country?
175. 4:35>> Well, are you are you US focused?
176. 4:37>> Uh, yeah.
177. 4:38>> Okay.
178. 4:38>> We are international. There's 300,000
179. 4:40churches in the United States.
180. 4:41>> Español, can't be that hard, right?
181. 4:42>> No, yeah.
182. 4:43>> Acquisition.
183. 4:44>> Exactly.
184. 4:45>> Uh.
185. 4:47Okay. So, but there's a lot, I'm
186. 4:49guessing. So, you you get to like cuz
187. 4:51I'm just trying I'm trying to paint this
188. 4:52model out. So, it's like, "Okay, if
189. 4:53you're 2,000, like what do you want to
190. 4:54have happened? Do you want to sell this
191. 4:55thing? Like what do you what do you what
192. 4:56do you want to do?"
193. 4:59>> Not yet.
194. 5:00>> Yeah, no, I mean, but like if you 5x the
195. 5:03company, like I just like it's kind of
196. 5:04like depends on what you want to do cuz
197. 5:05you have a good business and
198. 5:08there's a lot of elegance to simplicity.
199. 5:10And so, if I think that I can sell
200. 5:13you know, a truckload of units, then
201. 5:15I'll sell a truckload of units. Like
202. 5:17School has one thing, it's $99.
203. 5:20You know.
204. 5:21Just sell a lot of them.
205. 5:22>> Yeah.
206. 5:22>> Yeah.
207. 5:22>> Uh, so there's there's nothing wrong
208. 5:24with having just one if it's not getting
209. 5:26in the way of LTV.
210. 5:27So,
211. 5:29why can't you market more?
212. 5:31>> Uh, that's I've just been it's kind of
213. 5:33been a uh
214. 5:34>> Do you take distributions every month?
215. 5:35>> Yeah.
216. 5:36>> Okay. So, this will be good for
217. 5:37everybody. So, if you're in a service
218. 5:39business or what I would consider like
219. 5:41not SaaS, but sort of digital type
220. 5:43business that doesn't traditionally have
221. 5:46the same level of stickiness, but has
222. 5:48more cash flow and less CapEx, meaning
223. 5:51you don't have to invest more cash in
224. 5:52order to grow. One of the things that
225. 5:54took me way too long to learn is that
226. 5:56the profit that you have at the end of
227. 5:57the year in those businesses is not all
228. 5:59yours. And so, what I mean by that is
229. 6:01there's two primary places where it
230. 6:02should be going. So, number one is
231. 6:04talent,
232. 6:05and then the second one is brand.
233. 6:08And so, if you're in that business, like
234. 6:09the branding component is like I have to
235. 6:11reinvest in the reputation of the
236. 6:12business so that I can continue to grow
237. 6:14next year. And so, that's kind of like
238. 6:15the CapEx of service businesses is like
239. 6:18that's the investment that we have to
240. 6:19make in order to scale, which is people
241. 6:21and brand. Um and so, if you if you were
242. 6:25to spend
243. 6:27$600,000, which is whatever roughly your
244. 6:29profit,
245. 6:30um
246. 6:31this, you know, the next 12 months, what
247. 6:32would you spend it on?
248. 6:35>> Uh I want to go pretty heavy on team um
249. 6:37to build the brand. Like I'm basically
250. 6:39building a
251. 6:40>> Make more content?
252. 6:41>> Yes, like an internal agency that can
253. 6:43continue to crank out those,
254. 6:45>> Mhm.
255. 6:45>> but also, you know,
256. 6:47>> Well, AI should be able to do a ton of
257. 6:48this a lot of
258. 6:49>> So, sorry, say that
259. 6:49>> AI should be able to do a ton of this.
260. 6:52I'd be thinking more in like Claude and
261. 6:54GPT instances and less in headcount for
262. 6:57what you're trying to do. Like, you want
263. 6:59to be like
264. 7:00in the world of AI, which is now, by the
265. 7:02way,
266. 7:03um it's about fewer better people.
267. 7:05Because everyone like a lot execution,
268. 7:07it believe it or not, becoming
269. 7:09commoditized.
270. 7:10So, it's going to be there's higher
271. 7:11leverage on skill, taste, and um just
272. 7:14kind of strategic thinking until
273. 7:16eventually that doesn't matter and then
274. 7:17we'll be useless, but
275. 7:18um looking forward to that. Anyways, so
276. 7:21>> I I think it's the taste that would that
277. 7:23I'm hiring for because yes, you can
278. 7:25technically make that stuff, and we have
279. 7:27competitors who are making
280. 7:29>> Mhm.
281. 7:29>> basically AI type feeling stuff that
282. 7:31doesn't feel good. Um and that's why
283. 7:33we're beginning to grow because people
284. 7:34are coming to us for our taste.
285. 7:35>> Yeah.
286. 7:36So, we just need to increase demand,
287. 7:39which means you need to make more better
288. 7:40content.
289. 7:41>> Yeah.
290. 7:41>> And so, if you need to hire a couple
291. 7:42people to do that, that's fine. Um
292. 7:46I mean, that's it's it's you have a
293. 7:47relatively straightforward uh growth
294. 7:49path.
295. 7:49>> Okay.
296. 7:50>> It's the the difficulty you're going to
297. 7:52have is on the recruiting talent side,
298. 7:53because media talent without a brand is
299. 7:56very difficult, because anybody who's
300. 7:58kind of good can make more money than
301. 8:00most people pay them.
302. 8:02>> Okay.
303. 8:03>> That's the That's going to be your
304. 8:04bottleneck.
305. 8:05>> Yeah. So, you wouldn't even really
306. 8:06explore a high a higher ticket
307. 8:09deal.
308. 8:09>> Well, I just don't think I I couldn't
309. 8:11really think of what a high ticket
310. 8:13background would be.
311. 8:14>> Um a lot of churches are
312. 8:16volunteer-based, so it'd be helping them
313. 8:19helping their the team leads install
314. 8:21better processes for their
315. 8:23>> Well, then you become a church
316. 8:24consultant.
317. 8:25>> Yeah.
318. 8:25>> Feels like a different business.
319. 8:26>> Yeah.
320. 8:27>> Yeah.
321. 8:28I would just say like, why don't we just
322. 8:29like just double down 20x this thing?
323. 8:32>> Okay.
324. 8:33>> Like, you it's
325. 8:35There's so many times where it's like,
326. 8:36"Hey, to make more money, I could come
327. 8:37up with another thing." It's like, you
328. 8:38could also just do more of this. And
329. 8:40then figure out and like, to be fair,
330. 8:41the core hard of this one is just like,
331. 8:43"How do I get more?" And if it's not
332. 8:45immediately apparent, that's the hard
333. 8:46problem to solve.
334. 8:47>> Cool.
335. 8:48Awesome. Thank you.
336. 8:50>> Yeah, you bet.
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