"Why Do I Need to Sell Less to Grow More?" — Transcript

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1. 0:00Yes. Yes. So, I will I will speak pretty
2. 0:03definitively to I rarely do
3. 0:06about like this model is better than
4. 0:08that model.
5. 0:10Agencies are exceptionally easy to get
6. 0:13to and you know, caveat caveat for the
7. 0:16internet trolls of the world, right?
8. 0:17Like exceptionally easy to get to a
9. 0:19million, 3 million, even 10 million
10. 0:21dollars a year.
11. 0:22In almost any version of the model.
12. 0:25Beyond that it becomes exceptionally
13. 0:27difficult
14. 0:28because you have human capital so it
15. 0:30becomes really it's more and more
16. 0:31difficult to attract, you know, talent
17. 0:32to do higher level work.
18. 0:34And typically the businesses that go
19. 0:35from, you know, zero to 10 million,
20. 0:37they're servicing SMBs and VSBs. So,
21. 0:39very small business owners and and small
22. 0:41business owners.
23. 0:42If you take one of the the way that I
24. 0:44like to think about any industry if I
25. 0:46want to get into is I look at what the
26. 0:47people who are the biggest in that
27. 0:48industry are doing and think, okay,
28. 0:49what's different about what they're
29. 0:50doing versus what everyone else is
30. 0:51doing. And the biggest agencies in the
31. 0:53world service the Fortune 100. And so I
32. 0:56take that as the natural extreme of like
33. 0:57what is the best version of this
34. 0:58business is that you deal with
35. 0:59businesses that always pay their bills,
36. 1:01they never churn, they sign five-year
37. 1:03contracts at 5 million a year, and
38. 1:05they're good for it.
39. 1:07And so the process of agency scaling is
40. 1:11very much scaling the avatar and you
41. 1:13basically have to just keep earning your
42. 1:15way up which you're already on the right
43. 1:16track
44. 1:17of how can I get an avatar that actually
45. 1:19can keep their word. And once you get to
46. 1:21there, number one and number two, you'll
47. 1:23have a telltale sign of like am I
48. 1:25dealing with an avatar that's too low if
49. 1:26you want to start doing more of their
50. 1:27business for them. And so if they're
51. 1:30like, I can't close a door, right? Or I
52. 1:33like you're like, maybe I'll do my sales
53. 1:34for them. No.
54. 1:36You have to deal with a business who
55. 1:37knows how to sell because your services
56. 1:39are not I will do acquisition for you.
57. 1:40It is I will do this I will do this more
58. 1:42I'll do lead gen right? Exactly. And so
59. 1:45it really comes down to who's the
60. 1:47perfect avatar for only this very narrow
61. 1:49service that I have I have tremendous
62. 1:51margins on. And so that's where we get
63. 1:52really clear on like, well, if they
64. 1:54actually like I've been selling people
65. 1:56who have over 10 people headcount, but
66. 1:58if I have over 50, my turn is like 1%.
67. 2:01Yeah. And so it's like I really should
68. 2:02just build that and not have all of this
69. 2:05Now, what happens is
70. 2:07we we always incur debt. So it's not
71. 2:09like there's something wrong. Every
72. 2:10business incurs debt when you start.
73. 2:12100%. You either incur talent debt, tech
74. 2:14debt, financial debt, you incur debt.
75. 2:17You want to incur the debt that's the
76. 2:18easiest to pay back.
77. 2:20Right? And so right now you can also
78. 2:21incur reputational debt. Like there's
79. 2:23debt. Um you're you're selling some
80. 2:26people that you know you shouldn't sell
81. 2:27so you can pay the bills.
82. 2:29Fine. I'm not going to get on an
83. 2:30ethical, you know, whatever with you.
84. 2:32Um
85. 2:33but the sooner you can draw the line of
86. 2:35saying I want to Like if you told your
87. 2:37team work How many sales a month you do?
88. 2:39Sales velocity.
89. 2:41Three, four. Okay. I'm okay with us
90. 2:43going to one deal a month.
91. 2:46And where this gets more interesting is
92. 2:47that when you get that correct, truly
93. 2:49correct avatar, the price elasticity uh
94. 2:52changes.
95. 2:53And so all of a sudden it's like if I
96. 2:54actually were to price to my correct
97. 2:56avatar, I might be able to charge two
98. 2:58times as much. And by charging two times
99. 2:59as much, I might 5x my profit.
100. 3:01And by doing that, I'm actually more
101. 3:03than happy to have my quote revenue
102. 3:05growth rate be slower than what it was
103. 3:08before when I had these people. But the
104. 3:10amount of operational drag that you
105. 3:11incur also like team morale of like I
106. 3:14just aren't bored with this guy and he's
107. 3:14already turned out. Like it just feels
108. 3:16like such a pain. Whereas if they know
109. 3:17that they're going to be creating
110. 3:18long-term relationships with the
111. 3:19customers, you will get a sticker
112. 3:21business that's more fun to run and way
113. 3:22more profitable. So part of this is like
114. 3:24a lot of entrepreneur
115. 3:26a lot of the correct moves in
116. 3:28entrepreneurship are counterintuitive
117. 3:31because all the intuitive ones you've
118. 3:33already done.
119. 3:35You do those naturally. You wouldn't
120. 3:36even You don't think about it because
121. 3:36all the things that are intuitive you
122. 3:37already did and they already worked.
123. 3:39Where you get stuck is the
124. 3:40counterintuitive solutions. Those are
125. 3:41the ones where you're like
126. 3:42Wait, so for me to grow I need to sell
127. 3:44fewer people and have higher
128. 3:45qualifications. It's hard to do. That's
129. 3:47why most people don't do it. It's also
130. 3:48why most people don't make money.