How to Build a Business That Runs Without You

Aren't we live? We are live. We're live. We're live. We're live. Test test. Check. Check. One, two. Is this the mic that I'm uh speaking into? All right. Well, salutations everyone. Happy um what day is today? Thursday. Happy Thursday. Some of you guys have been asking for a schedule for us to do these lives. And I am a pain with those types of things because I hate fixed schedules. Just a personal personal thing for me. Um, but right now I'll give you the loosest commitment of all time, which is that around midday on Thursdays is when we are going live. Um, that is when I do my recording. Whether it starts at noon or no 30 or 1 or 11:30, no idea. But if you're like, "Ah, around the midday of Tuesday is when, you know, Alex will go live." Now is the time to do it. With that being said, uh we will model what has worked in the past, which is uh a two-part segment, if you will. Part one will be I'll make kind of my next YouTube video with you guys. Um so if you enjoyed that, which I think some of you guys didn't, uh I'll make that video. U and then after that, open up for questions. Kind of like a a lecture and then a Q&A, but lectures have such a negative connotation. I don't I don't really like the connotation in general. U do a live with Chiron. I will consider it. Indonesia, I'm glad that you are all here. Uh um yeah. So we'll be taking calls later u from business or business owners Bangalore, Hungary. Wow, we are international, Nairobi, Kenya, Germany. Geez, France, Kenya. Now are we just naming countries? Is that's what's happening right now? Nigeria, Belarus, South Africa, Ghana, Austin, Texas. Okay, Isabelle. All right, we got we got one American here. I'm glad that I have just become an international, you know, I'm like David Hasselhoff, just huge in Japan. Uh, this is actually nuts. I had no idea that um that that y'all were for all over the place. This is actually kind of nuts. That's cool. Thank you for grabbing the book. I appreciate it. We'll talk about that. Um, wow. Wild. Okay. So, um, let me get a let me get a W in the chat if you're a business owner. All right. If you're a business owner, put a W. Um, if you are not a business owner, put a N. There you go. Oh, good. Okay, good. We got business owners. Feel a little better. U Okay. Well, then you will absolutely love the point of the the talk today. Um, and so you guys can see it getting made in real time in Santa's Santa's workshop. Not making myself out of Santa because that'd be a bit weird, but um, all right, you guys. Good. Rock and roll. All right, let's do it. Okay. There's one belief that keeps most entrepreneurs trapped and unable to grow. They stay stuck. And so, I've been building businesses for a decade and a half now. Today, my portfolio atacquisition.com, last year did over $250 million in revenue. And when I started, I made the same mistakes that everyone makes. So I used to think no one can, you know, grow my business like me. Um, if you want it done right, you got to do it yourself. Uh, no one can do it like I can do it. Um, never let anyone else handle the money or never outsource sales, never outsource marketing, never outsource anything, right? And so I had all these different people who tell me these things and it's interesting because they were a little bit ahead of me in business. I think, oh, they must be right. But they were just limited business owners like anyone else. And it wasn't until I broke that belief or that that system of thinking that I was able to build real companies, ones that make money even if I'm not involved in the money-m. And so in this video, I'll show you five steps that will let you hit your money goals uh by building a business that runs without you, or rather that can create value without you being required. And so conceptually, this is the big idea. A business that requires you isn't a business. And I'm going to say that the technical sense, anything that generates a profit with an LLC is a business. But in terms of the intention of the vast majority of people who begin a business, it's for freedom. And then what ends up happening is that you create more liabilities, more dependencies, you lose uh your optionality, you lose your freedom. And you now somehow are have you you have a job you cannot quit. Tough, right? And what's interesting about this is that I want to talk about transitioning this thing from an Iron Man suit where it just enhances your ability to do but still requires you to run. Not like the newer Iron Man suits which didn't require a person. Let's not get into it. Um but was actually val the businesses are valueless without you. All right? And if you can get the Iron Man suit to become upgraded so it can run and go fight the bad guys or make the profit without you, then it becomes something that is inherently valuable to anyone. And once something goes from valuable to you to valuable to anyone, it means it's something that other people would want to buy. When it's something that other people want to buy, it's something that is valuable and inherently has worth. And so, let me give you some simple math here. Let's say you have two businesses. All right? One that does I'm going to use some math. You can remove zeros if it hurts your eyeballs to think of more zeros. All right? Let's say you've got a $10 million year business over here topline. $10 million business over here doing top line. So 10 and 10. Okay. Which business do you want? Well, you need more information, right? Of course. Now, let's say that both businesses are 10 million uh top line, 2 million bottom line, $8 million of cost in both. Now, which business do you want? You still need more information, of course. Now, let's say that of this 10 top 10 10 topline, $2 million bottom line businesses. This one, the owner is running 80 hours a week is C like every day of the week they're working. Uh, and is required to work different than choosing to work as a side note, but I won't get into that for now. The second business, the the owner never is there and just owns it like you would own a stock on the stock market. Now, think about which of these business owners is richer. Now, at the onset, you'd think, oh, well, they're both the same topline, both same bottom line. But the difference is actually very dramatic. And so, let me explain. So, this guy, first guy, very frustrated entrepreneur Fred, he makes $2 million a year and then he pays his 50% taxes and he makes a million bucks left over. Then he lives his living expenses, whatever. Maybe he's got a family. Okay. he takes home five uh 500,000 he can put away. So he's getting richer at $500,000 a year roughly in terms of his net worth. That's a slow way to accumulate cash. Now don't be me wrong. $500,000 is a lot of money, but I'm just saying big picture. Now this guy, let's call it So we had frustrated Fred and let's call it wealthy William. Sounds very, you know, fancy fancy. So this guy has an entire team that actually runs the business uh day-to-day without him. And so he just owns it like he owns the paper stock of a company. and his business right now trades at six times profit. Meaning somebody would be coming would be willing to come in and write him a check for six times $2 million, which is $12 million. And so of these two guys, this guy adds $500,000 to his net worth every year. This guy has a business that is worth $12 million. This guy's way richer. But check this out. Now, let's say that both of these guys work, you know, figure out a way to make the business make an extra $500,000 a year in profit. So they go from 2 million to two and a half. two million to two and a half in profit. That's what happens here. Now, here's where it gets extra sexy. This guy, after he makes his extra extra 500,000, let's say that uh he pays his 50% taxes and that $250,000 after taxes goes straight to it. So, he goes from taking home 500 to 250. He doesn't doesn't change his living styles. All right. So, he he all the extra money he's he just he saves. So, he starts making 700,000 $750,000 in savings per year. Okay. After taxes. Neat. this guy, the $250,000, sorry, the $500,000 that comes in after taxes, he gets a 6x multiple on. And so he actually gets another $3 million added to his net worth. So his 12 million becomes 15 million. And this is the game of wealth. This is how you get wealthy. It's very, very inefficient to become wealthy off of regular income because it's taxed to oblivion and you're it it just there's zero multiplication that occurs on it, right? You don't get 10 years of work. You get one year divided by two after taxes. So the difference is like a 20x difference between a valuable company that can sell for 10x versus one that can't. Now hopefully I've sold you a little bit on the idea of why this is worth doing. Now let's walk through the steps of actually doing it. So the first step of actually taking it from frustrated Fred to wealthy William is you do a self inventory. So what that means is that you actually list out everything you do. Literally all of it. All right? And then you turn each of those uh checklist items into something that someone else can do. And you want to get as granular as humanly possible. And this is how you get out of the day-to-day without breaking the machine. And so I'd say the step even before this, if you don't even know what you do, what we have people do is run a time study. So time study, real simple, you don't need any like fancy technology for this. You just take an Excel sheet and you write times on one side every 15 minutes and you simply put in a timer. You turn your timer and every 15 minutes you just note what you did. It's very simple. Now, some of you might think, "Wow, I could never that sounds like so much work. It's like you literally have a timer and then you write one word down every 15 minutes." What's crazy about is it'll be the most productive week of your life. Every time I do a time study, I think I should do this every single week and I don't. But you certainly will be really productive because you're going to improve to yourself that you're super productive. I'm just telling you that's what'll happen. So, anyways, you can also, by the way, do this with your team. If you're like, I have a key man risk over here. this person is super valuable to the business. I have to have less dependency on this person. You walk through this process. So you do a time study, then you get the list of stuff. Great. Now we have this list and we can break it down into component parts. This is the kind of list of everything, right? And what we want to do is we want to start building little processes or in installing people. So it's either a project, a process or a person that's going to installed in each of these little slots next to it. So you have all the list of things and then you have all the people or process or project. Okay. So pro project is a onetime thing which sometimes creates a process or you have a person who does this thing on a continuous basis and you probably have people on your team who are underutilized. Some of these slots you can just be like I think Angela can do this. I think Tommy can do this and you can start slotting them. Then you'll have your red, yellow, green. And so my red my green is I can give this to somebody. So I'm going to look at my team, teach them how to do it. They get this. My yellow is there's a one-time uh project or process that I have to install here, but I can do it and I know how to do it. The red is where it's something that I either don't know how to do or there's a person that I know I need to have, but I don't have. And so I solve these in green to reds because the greens you can get out quickly. The yellows is the next level that you can do with a little bit more time. And then the reds is like once I've done my greens and yellows, I can move on. Now the way to think through this is having so in in addition to this list it's like okay these are the things I'm doing there's also the decisions you're deciding on right and so as these this time of documentation comes up we want to start saying if this then that these are rules of behavior right they're decision trees for common scenarios and I'll give you an example so when I uh so prestige labs was the first physical products business that I started supplement company and I remember uh the the manager of the support team saying it's really hard to get new people on. And of course, I like lost my I was less patient than I am now and less polite. And I was like, how hard could this be? I was like, change my change my uh change my address, change my card, change my flavor, change my billing cadence. I was like, cancel refund. What else do we have here? Right? And when I said it like that, uh, you know, Leila Ping me and was like, don't be rude to people. They're trying to win and you are making it look really bad and don't do that. So I will tell you the story because that's what happened. Um but fundamentally it's just if this then that. Somebody will come in and say I would like to change my card. This is how you change your card. Someone will say I would like to change my flavor. This is how you change the flavor. I would like to change my billing cadence from once a month to every two month. This is how you change the billing. It's just if this then that. The more complex the roles, the more one-off the scenario. The more duplicatable the job, the more people you have in a specific department or function typically the more standardized the questions become. All right. And so once we have that, then we can say, "All right, there are all these questions that come in. Some of these questions require approval. Okay, somebody has a bad night's stay at our hotel. How much money do I normally give them in credit or do I give them a gift card to our restaurant or something like that?" Well, we decide that under $500 or under $1,000, under $10,000, depends on the size of your company, under $100,000 sometimes, uh this person can act uh independently without your supervision. Now, of course, you still have financials and at the end of the month, something looks out of whack. You can go check it out. So, I'll give you an example of that. So, uh, we like to over, you know, overd deliver, have people have an amazing experience if they come out to our headquarters. And so, I let people do surprise dinners. And so, my team, like if they see two or three people that they think would like jive well together, we tell them, "Hey, we made a reservation at this nice place. Uh, go there." And so, it's like a nice surprise and delight thing. And so then then I got like the bill at the end of the month and uh we were spending $250,000 a month in fivestar dinners and I was like well guys listen I mean I love uh our our clients but the question is is this actually generating true value? And so it it turned out that that was not something and when we removed that thing it didn't change anything about our our happiness scores or reviews or anything like that. So I was like, okay, so I say this because there's going to be a feedback loop and you're going to mess up. But understanding like what is the amount of money that I'm let able to let someone make a decision on their behalf and you can also put a cap on it. So it's like you can make decisions under $500 in total up to 5,000, right? So that gives them 10 shots to mess, you know, fix something uh in the business. Now, underneath of that, this is where having kind of clear scorecards and KPIs around these things um help because if we're going to unlock some sort of decision tree, we want to also make sure that it's unlocking some sort of value. And so, I'll give you a really powerful frame that you can talk to anybody in the business with. You can say, how do you and your role make the company money? It sounds like a very simple question like we should people should be able to know how the business works especially as it relates to their job. If you ask this to your team today many of them will not know the answer to that question and that will frighten you. But fundamentally like some of them are easy sales uh people come in and I get them to give us money and if they give us money we make more money. Right? That makes sense. Great job. Okay. But then you have some ancillary roles like what does finance say? What does tech say? What does media say? What does market? So there so when we make so if I ask my my my my guy who's behind the camera, right? So of course marketing is something that generates money. But you don't do marketing. What do you do? I hold the camera. Okay. So then what ways do you make us money? Not the marketing function. This is where it gets more interesting. So, if I had this camera person and he he or she, right, slow down. He or she holds the camera. I say, "All right, what does bad camera work do?" Well, bad camera work would be a waste of time, right, of the entire team. Number two, the media would perform not as well because it would be offc center or, you know, it would just the the lighting would be off, whatever the hell, right? Um, on top of that, we would I mean, we'd waste the footage. Trying to think what other things would would it cost us in the business. We'd probably have uh equipment that would be ill-fitted. Uh, we wouldn't save the stuff that we'd have. All the things are are huge cost setters. And so, you can reverse each of these kind of potential mistakes into these are the things that we have to make. What percentage of the time uh was everything saved correctly? Was it named correctly in the system? Saved to the correct drive? Uh, timestamped appropriately? the lighting and/or camera was set up correctly and it was on time so we could start at the time we said we're going to. If that's 100% of the time, it's like, "Dude, you're making us money and here's how." And I think that when people have the understanding of how what they do relates to how the company makes money, it gives more meaning to like what impact. People like, "I wish I had more impact." It's like it's usually because they do it. Like if you have a job in a company, you have an impact. You probably just don't know what the impact is. And so decide and explaining that to somebody I think is is a very big unlock because they see the value that it that their role provides in the overall work. All right. Now before you have this because again we're trying to replace ourselves here. We have our little scorecard. We have our KPIs. Let's say you were the camera guy, right? The next thing is we have to have some sort of test to graduate the person which is can someone 80% as you get 100% of the result. And the key learning that I had, this is a belief that I had to have broken was that number one, there are people who can do like no one's going to ever be able to do it as as well as you. Not true. Um, no one's going to be able to do it as well as you with, you know, onetenth of the work with onetenth of the practice or reps. But every human is replaceable in my opinion. Um, and we know that because humans have replaced all humans since the beginning of time. Um, but we can know that on a shorter time horizon, if they only learned all the things that you learned the right way without learning all the bad mistakes, they might be able to get to 50% as good as you right off the bat. And so, a a a belief that I would like to switch for you, I'll give you two. Number one is if some if I can do it right with part of my time, someone else can do it better with all of their time. So you might be able to do a five out of 10 which you consider to be 100 because it's onetenth of your time. But if someone spent all of their time doing they for sure should be better than you over time with enough practice. And so that is the first one. The second one I forgot what I was going to say which leaves us very naturally to the second big bucket of things. So the first one big picture is we get a big inventory. We create the decision trees. So we have a big list of stuff. We slide in the people we have. What's left over? We then have our our our scorecard that we can make for people. We have our decision trees that they can decide up to with certain amounts of money. And then we have a test at the end which tells them uh whether they pass or not, are they good enough? Okay, here was the second belief I just remembered which is you can outwork anyone in your business. You will not be able to outwork everyone. And this is something that it took me too long to learn. I kept I mean you can imagine me I pride myself on my work ethic but I can outwork everyone and so the longer it took me to realize that the longer it limited my ability to grow. I can do a mountain of work but I can't do Mount Everest. That requires more hands and more shovels which brings us to number two. So you want to start trading doing for managing and leading. So here's the simple math behind this. Like there's actual math here which is let's say you swap 200 hours a month. So you know roughly 50 hours a week of work for doing 20 hours of managing. So now you go from 50 to five. So you have a a tenth or 10x improvement in leverage and you replace yourself again by hiring a manager the next time and then you trade the four hours for one hour. Right? And so this is basically how leverage occurs through labor, right? is that you have to turn your effort into an organization that produces without you, right? And so employees or AI in the future, right? Make a fully functioning enterprise that can continue to scale. And that's kind of my my litmus test is the baseline is does it burn down without me. For many of you, if you just get to here, you'd love your business 10 times more. Like I can actually leave for a month and come back and it didn't burn down. Thank god, right? But where it gets really nasty and really exciting is where you can leave for a month and when you come back it's in a better position than it was when you left. That is a business that people want to buy because what it functions as is essentially a faster growing annuity for an investor which gives them a big multiple which is why they pay you lots of money for it. So let's walk through what this actually looks like. So the first there's kind of three steps to it. So you'll shadow train. So this is where they watch you do it. The next is you supervise them doing it. So they do it in front of you. So you do it in front of them, they do it in front of you and then after that you kind of just support their independence and you're available but not involved. So it's like I'm fully available, you can hit me up whenever you need anything. And then what happens is in the beginning there require a little bit more ad hoc uh calls, consults, help. And then over time if you have a competent employee, those decisions get automated back down to them, right? And so that's when the full handoff occurs is that they own it completely. And again, initially I'm cool with 80% sometimes 60% as good as long as I have a clear path to them getting better. And I'll give you a little pro tip. I over I used to measure employees by how well they started. I measure employees today on how fast they improve. Because if you look at two employees, right? Let's say somebody starts here and someone starts here. If this person's flat and this person's like this, I know that in three months, six months, this guy's going to pass this guy. But then what happens another six months, right? And so sometimes it's worth taking someone who's a little bit less experienced or has fewer inherent skills because they don't have as much time because they're able to learn faster and like so intelligence I measure as rate of learning. And so I will rather have a more intelligent employee who learns faster than a more experienced employee who learns slower. Just something that I have learned and it depends on the role obviously but um I would say that I've had a big shift in terms of how I think about talent. Now the goal here is that we want to move from doing the work. This is the big picture of point two. Move from doing the work to managing people right. We focus on recruiting a players not doing a player work. We focus on the business aka strategy prioritization not on the tactics of what we need to do next or what we need to do today. And so your job becomes attracting talent and aligning incentives. And so the al ultimate test for you is can you take three months off and have the business grow. Anyways, like this is the easiest especially for those of you who are brick and mortar. This is super important. If you're brick and mortar, a lot of you guys want to get my second location, want to get your third location. This is the the simple simplest litma test. If you can leave it alone, like your phone doesn't like your your phone doesn't ring, and I'll tell you how to do that in a second, right? I called the phone test. I'll tell you later. Um, but three months later, it's bigger. Great. It's the same. We have to figure out a way to get it to be able to grow. Unless you're in a super cap market where there's no way it can grow, fine. But the vast majority of businesses can improve, can grow year over year over year if you have a good business. And if it's flat, the thing is is that you still have some sort of magic over here. As soon as the eye of Sauron moves, sometimes if it's flat, it's going to go down. Now all of a sudden, you've got double the liability, double the debt, double the overhead, half the talent because it's spread. And now you have more risk and less profit. No bueno. So this is why it's so important. You're like, man, that's never going to happen. It's like, right, that that's why a lot of people shouldn't have second locations for much longer than they think. It's why overexpansion is one of the number one reason people go out of business. So um zooming out, I want to so you're like, okay, how do I find these types of a a a players, right? Is we want to look for people who describe their role in metrics in as much detail as humanly possible, right? Right? So I can measure someone's skill in any endeavor based on the quality and the quantity of metrics they track. So if I said and I'll tell you I'll tell you the first time I like a great example of this. So the first time I hired a really good HR professional and I've had plenty of them in my history but um the first time I hired a good one. Um she asked me questions on the interview. She was like so what's your cost of acquiring talent? And I was like I don't know. That's a good question. I should know that. And she was like what's your time to fill? And I was like, "Wow, I didn't I didn't really think about it." She was like, "Okay, what's your two-way fit in terms of what percentage of 90 days later do both the employee and the manager say that it's a 10 out of 10 fit?" And I was like, "Don't know." And so she starts giving me all these different metrics for for the talent side of the business um that I had no idea about. I was kind of in the uh the internet marketer world of oh uh if I have a low refund rate, therefore my product is good. It's kind of like I had that on the talent side where I was like, "Oh, which by the way, that is not how you know you have a good product. Just FYI." Um, I was on the talent equivalent of that of like, well, you know, I mean, we haven't had any lawsuits lately. It's like, duh, you think? Uh, that's probably not a good way to know if you have a good culture or good team or a good talent talent management um, process. And so, again, the quality and quantity of metrics. Now, this particular HR professional was uh, a leader in turnarounds. And so, she knew all these different metrics. And then obviously I learned all those things from her and then discarded her. I'm kidding. Uh but I learned those skills so I could apply them. And fundamentally that's I I try to find people who can teach me things because that's like the best thing in the world is like you pay someone to say, "Hey, you know way more than me. Go do that in here." When you're starting out though, it's hard to afford those people because those people don't want to work for you or you can't afford them or both. Right now I'll give you a couple a couple rules of thumb that that also took me too long to figure out is that um number one, uh I would interview as interview more people than you think you should. And I know how costly this is as a business owner. So, you want to stack as many as you can. Also, I highly encourage group interviews. Um, pretty high up once you get into director and executive. It's tough, but like anything that's like frontline to maybe even manager, um, you can have group interviews because it'll save you time and you'll very quickly be able to to read people's vibes. And so, the idea here is that um, I'll tell you I'll tell you a story. Um, for school, Sam interviewed 600 developers. 600 developers to find our co-founder Daniel the CTO. 600. So think about one, two, three, four, five. Okay, so that's just me naming numbers. That felt like it took a long time. Now imagine each of those represented a 30 to 60 minute conversation. And then imagine that that's over a year of those conversations. It is brutal. But when you do that, what happens is you start to get a lot of nuance of who's good and who's not. When you talk to 10 people who say that they are u a manager, a sales manager, you're going to get a way better idea than when you talk to one of who's actually legit. When you talk to your 50th person, you already know who's got game. And so what happens is it starts to tune your picker. Because fundamentally the reason I think we've been able to grow businesses faster and faster and faster with each each next company that we start is because pattern recognition um becomes one of your biggest assets. So like some people call this wisdom or whatever you want to call it. But fundamentally it's just that I've had a good sales manager. They looked like this. You look like that person. Therefore you have a higher likelihood of working out in this role. But to figure out which sales manager was good, I had to hire five different sales managers and waste six months or a year on each one of these. Well, Fry finally found somebody who's good. So that's the thing is that if you look at every role in the business, and again, this goes from the ground up. So a frontline support rep, a frontline sales rep, a frontline media editor, whatever, and then all of a sudden it's like, okay, those start to work, and then your business starts to grow, and then you're like, I've never hired my first level of management. So you got to figure out what a good sales manager, a good media manager, a good all these roles. And then after that, you're like, okay, well that starts to grow. Now I've got my director level. And so each of these levels, you keep putting these people in until eventually you know what it looks like when it's right across an entire org. And so what happens is when you start really building businesses, you're not actually building the business. It feels much more like assembling the people who then build the business. Which leads us naturally into the third um of our little buckets of what do you do to remove key man risk? And I'll give you one more little tip. when you're doing all those interviews, if you aren't learning from the person, especially if it's in a leadership role or above, waste of time. Like if if if you're not learning from them, then it means that you're going to have to teach them, which means that not only do this person like it means that you're going to have a increased like your life's going to get worse before it gets better, which sometimes it's required, but at a leadership role and above, that person should be teaching you. And so there's no point in you trying to go in and train them. They should be like, "This is what we need to do for our financial function." you're like great love that for us go do that right okay brings me to the third point which is you want to remove yourself from marketing now marketing is a larger term but fundamentally it's acquisition right if the business relies on you to get customers which is very common in founder led companies like you're the bread winner you're the promoter you're the one who brings the business in um this is one of the biggest risk factors in business because this is why you can't leave and when you do leave the revenue goes down and it's very scary because everything relies on you And what's tough is that it it feels good in the short term to have everyone rely on you, right? It feeds your ego. It makes you feel important because you're like, I'm in I'm irreplaceable. I'm a special snowflake. I am a unique human being with unique skills and therefore I am important. But the idea is that you actually in order to make an important business, you need to become less important. Like if you want to help more people, you can't help more people. And so for me, obviously, like I've had plenty of businesses that were face driven. Um, but if your face gets the customers, you are the key man. And so this is kind of the three-step simple way of kind of getting out of this. Well, easier said than done, but fundamentally this is what we do. So number one, well, let me let me zoom out. There are seven different ways that you can install systems into the business to capture media and marketing on your behalf without it having kind of quote direct to camera founder ads. Okay, so I'll give you a couple of them. So one of them is that you probably have some sort of place where your customers gather, right? Maybe it's an online community like a school or whatever. In those communities, you should have a standard process weekly where you screenshot people saying nice things about you. Then all of a sudden, all those screenshots become ads that get pushed to you every single week. The next thing is having incentives for customers to leave testimonials. So you could have things that are unlockables. You can have certain amount of credit. You can have uh tiers of service you can give them trials to, which by the way is a double whammy. So you give someone a trial of a higher level of service if they uh provide a testimonial. It allows you to ascend customers who love your stuff and get more marketing. Bingo, bingo. Um, the next one is something I call life cycle ads, which basically you probably already have functions in the business that already occur, which is you probably record your sales calls, hopefully. You record your onboarding calls for, you know, a new customer. Uh, you record delivery checkpoints, and maybe if they have a good experience, you would record some sort of testimonial from them. Great. Now, the thing is is that means that all of this stuff already exists within your business. And so, when you have a testimonial and someone says, "I these guys are great." You just say, "Cool. We're going to look back through our CRM, look back through our scheduling and pull the recordings from their sales call to their onboarding to each of their touch points. And then what happens? You can compress that into a timeline that also becomes another advertisement. Pretty sweet because instead of saying, "I was here and now I'm here." Show them here of them actually being scared, being not sure, hesitating before signing up and then all of a sudden getting this amazing outcome. The next thing you probably already do is you have some sort of key moments of client deliverable. Whether that's like you do a ribbon cutting or you do a reveal of their new kitchen or they get on the scale if they're losing weight or there's obviously with businesses there's revenue or there's monthly financials or whatever. There's always moments where something can happen that is has emotive, right? Emotive as in emotional. And so what we want to do is just put a a process in place where we can incentivize the person to document that moment uh to then create more clout for us. And so hopefully you're getting getting an idea here. Like another process you can put in place is that your customer support if you have a customer support line is that you can pay a customer support person five bucks for every person that they get like a mini testimonial in chat format from. Right? You resolve something. Oh my god, these guys are amazing. I love this product. It's fantastic. I highly re recommend it to anybody. Great. Screenshot that. Right? And I'll give you five bucks for every one of you to do. I'll give you another one. Or you you guys get like I have done this before. I'll give you another one. All of you guys have Google reviews, Yelp reviews, trust advisor reviews, u Amazon reviews. It depends on where your product sits, but like you probably have some place where people have reviewed you, right? And think here's what's crazy. You probably have hundreds, not like one or two, you probably have hundreds of like local businesses have a few hundred reviews. It's not like uncommon to have this. What's crazy is that those reviews rarely get made into marketing. Why? Now, here's an even crazier one. You can take the hilarious one stars and take a page out of um Liquid Death's marketing book and just say like, "Hey, if you're one of these people, you won't like our stuff." And if it's if it if it clearly casts out the wrong type of person, it will pull in the right type. And it's also hilarious marketing. And so, I think I just gave you six or seven different uh processes that you can install in a business that all get ads and marketing to come to you. If you wanted to go even further, you could build an affiliate program out. You could use Tik Tok shop and sell a widget and then whitelist those ads in the modern era and use those as your marketing. Right? All of these are things that you can do to remove your face from your market. All right. Now, competition. Um, I'll skip that one. Okay. So, the next thing that we think through is stress testing this. And so, if we're zooming all the way out, we put our big list together. We red, yellow, greened it. We then created a decision tree. We created a box around how much money they're able to have uh make decisions on. We have our scorecard. We test them to make sure that they actually pass the KPI. That's step step one. The step after that um that we did is okay well now we need to increase the amount of people in the business for all those reds. So we have to interview more people. We have to look for people who have higher skills. We have to be willing to get taught uh by these people, which is by the way the cheapest learning you can do is get people who are way out of your league to teach you about the role. And you learn a ton in the process of also finding great talent. Ask those people how what they do turns into revenue for the business. And then finally, actually take your 90 days off. And something will break, but you continue this process until eventually nothing breaks. And then once nothing breaks, you actually have a business that can't run without you. All right. So, with that being said, um, how would I go about what you're in a credibility based business? How would you go about building authority fast enough to win bigger clients? Okay, that sounds like a random question. Okay. Um, fiction authors, where are we going? What are we talking about here? We're talking about keyman. What is 67? >> 77. >> Oh, 67's like mediocre, right? >> Oh, really? >> Okay. Word. Well, good to know. All right, so um hi Alex. Okay, Scythe Ali. So, I told you guys I would I would uh we'd open this up for the shot. Okay, they just moved my uh my question and answer framework. But while they're pulling that up, I'm going to zoom all the way out for you guys. Big picture. The reason that your business one isn't as big as you want, two isn't as valuable as you want, and number three doesn't run without you is because you're not as good as you think you are. Now, before you I know that that sometimes hurts people's earballs. Um, but let me explain. At the simplest level, business really is take the absolute best people in the world and get them to work for you. So, some of you guys have probably heard of John Ivy, right? John Ivy was like one of the best designers. He worked handin-hand with Jobs. But John Ivy was an employee. All right? And I bring this up to say if you had to design a new product, John Ivy would be the guy that you'd probably want to build and design it with you. Right? The problem is that John Ivy only wants to work for somebody as good as Steve Jobs, right? So the real leverage of why Elon has been able to build the size companies he is is because he's Elon. And so the best and smartest people in the world are willing to work for Elon. And so if you had the best and smartest people in the world truly working for you, then the business really would grow without you. because there's no real big businesses can have one person who's interally involved in everything. It's just impossible, right? And so you have to decentralize decision-making, two very smart people who are very capable. The problem is that those people don't want to work for you. And so the the the real real is that as much as I give you all these tactics about like these are the things you have to do, here's your move from marketing, here's how you switch from doing to managing, put a time study in place, you know, here's you can stress test the business. Like I give you these steps, right? But the real real is that like you have to become someone who's capable, who's whose desire people would want to follow. Right? And that's going to be a combination of two things. Your experience and track record and your ability to sell the future. Now, typically they like somebody who has an amazing ability to sell the future can outsell the fact that they don't have a crazy track record. But track record is also uh relative. So, if you've built and scaled a billion dollar company and you say my next thing I want to do at 10 or 100 billion, a lot of people will believe that you can do it again, right? But you can also generalize to traits and then get specific again on business. So let me explain what that means. So if you let's say you were validictorian of your class and you know were president of three different things that would just prove that you were generically ambitious, right? And that you probably work hard and have some level of intelligence. And so with that, that can still give you a semiredible track record to I also want to start this new big thing. And if you were good enough at selling the future of how big a thing you want to do, you could get some of that A-level talent. But for us mere mortals, which I consider most stuff to be quite immortal. Um, a immortal, not immortal, to be clear. Um, most of the time you just got to have the proof before the pudding, right? Or the proof is in the pudding rather. We have to just show that we can do it. And as soon as you do that, like the level of talent that I've been able to attract at acquisition.com compared to gym launch or prestige labs is order of magnitudes. And so I almost had to build gym launch to prove that I could that I could build something of that size to then build something a 100 times as big. So that is my real world actual. And if you're like, wait, does that mean that it will take me time to develop a reputation? Yeah, it's kind of how it works. Um, but when you do have a reputation, you start to gain significant leverage in many parts of the business. One of the biggest being talent. Cool. So, now let's open it up to um let's open it up. Let's talk about whatever. And by whatever, I mean ideally keyman related topics. Um, am I taking these? Is that what I'm doing? All right. We have an upgraded setup. We have a less boomer setup because you guys are making fun of me. Let's see if this works. Oh, wow. hear myself crazy. Okay. Interesting. Um, you don't understand the value of enterprise value. Of course, you build net worth without taxes, but it's fictional numbers that can't liquidate. I like cash flow, hard cash. Thanks to BLCCT GJ. Um, let me tell you why enterprise value [ __ ] matters. So, enterprise value is important for a variety of reasons. Enterprise value dictates how valuable something is. So Stripe, for example, is not publicly traded, but people are willing to invest money in it. And so the founders can get liquidity. And so what you want is to be able to spend something. But the thing is is that that comes from the position of not of already not having enough. So let me explain. Once a business actually has enterprise value, it usually has already generated or had the ability to generate more than sufficient cash flow for the owner. which means that all the excess cash flow the that the business generates is going to be transferred to the owner in a tax inefficient manner. And so then what happens is that you want to have growth in your net worth that isn't affected by taxes, right? And so if you say, "I want cold hard cash." Cool, bro. You want to pay your rent. I get it. After you're done paying your rent and after you pay your house off and after you pay for your parents house and after you pay for their cars and your cars and your kids' schools and all that, there's still cash flow coming in. And then you're like, well, I want to upgrade all my cars. Okay, great. And then I want a vacation. Cool. Cost 100 grand if you want to be a [ __ ] baller. Okay, then what? Right? Then you want the most efficient tax vehicle for building wealth, which is your enterprise value. Guess what else you can do with a highv value enterprise? You can take loans against it. You can get lines of credit. It becomes an asset. You can raise capital on that. Right? And so said differently, there's levels to this game. If you want to move up levels, you need to play a different game. And you have to graduate. If you can't, if you don't know where your rent's coming next month, [ __ ] enterprise value. Being super real here. [ __ ] enterprise value. If you have those things satisfied and the vast majority of my content I try to make for business owners, right, who are trying to get bigger, who are trying to scale, um, enterprise value becomes increasingly important. Basically, the bigger you get, the more you satisfy your needs and the people around you's needs. At some point, then it becomes about the game. And to be clear, I'm not saying this game is the only game worth playing and there's not other games in life that are worth winning. But in the game of business, net worth becomes the objective measure. And so that's how that works. Cool. Oh, closer to the mic because it's not fast enough or loud enough. Let's try this. Is that better? Hold on. All right, we'll do that. That better? Cool. Jeff, I already did, man. Jeff, I already I moved closer to the mic. Can you hear me? All right. All right. Kick Jeff out. He said it three times. I'm out with Jeff. Okay. Um, let's go. Next question. So, Alex, as a software dev trying to grow a startup app, what do you recommend? I mean, that's like saying, how do you advertise? Honestly, read this book. Pick one of the core four, which is either going to do outreach to people you know, outreach to people you don't know, you're going to do paid ads, you're going to make content, right? The other four things you can do is get an agency to do that thing for you, find affiliates to do that thing for you, get customers to do off of viral loop, or you have employees that do the first four on your behalf. Those are your options. Which one would I pick if I were you? In the beginning, you actually care more about revenue retention. And then eventually once you have revenue retention then we have to figure out whether it's going to be viral growth or it's all based on like I can keep everyone who comes in um past month 12. But the issue is that no knows about my stuff and then it just becomes a CAC to LTV ratio problem. It's just math after that. Okay. The problem the hard part is obviously keeping people Okay. Uh can you clearly define how to find out what is valuable to your marketplace? Yes. You ask them to buy it. And if they pay you for it, then they have found value in it. And if you're like, what? How do I know how to define value? I actually wrote a book on that, too. Uh I actually made an equation for it. So the value equation has four components. One is the dream outcome, which is what is the thing that people ultimately want. And then the other three variables are things that detract or pull away from that dream outcome. And so if I can give you this dream outcome, let's say that you want to get a six-pack, you want to be in shape. And I say it's going to take two years. So, it's going to be slow. Uh, it's going to take time from you every single day. It's going to be t it's going to take a long time and it will take you a lot of time. So, that's two elements of time. Uh, it's going to cause you to have to do things that you don't want to do. And it's going to cause you to do stop doing things that you do want to do. So, you stop good stuff and you start bad stuff. And on top of that, there's a chance that you might not hit it even if you do all these other things right and you take all this sacrifice. Is that a valuable thing? Well, I mean, it's kind of, but I basically described the fitness sale to you. You got to work out. You got to stop eating tacos. You can't drink on the weekends, right? It's going to take multiple years. Uh, and it's also going to take you time every single day. You're going to be sore. You're going to be tired. All this stuff, right? Um, and then on top of that, uh, you might try this whole period of time and you might have terrible genetics. And so, uh, all that to say, it will, that's why that's why you have to spend an hour arm wrestling somebody to sign up for personal training. On the flip side, if I sold GLP1, which is a diet drug, right? And they have a new drug that's coming out um that they're going to pair with GLP-1, which is like a muscle preserving drug. So, you can literally keep or maintain a little bit of muscle on this drug while also starving yourself. Uh, then you have a better physique and it takes no willpower and you just take this drug. So, it's fast. It's virtually guaranteed because it requires no willpower and it gets you the physique you want. Which one's more valuable? Which one do you think would be harder to sell? Probably the personal training one. And so fundamentally, this is how you differentiate value. Hopefully that answers your question. All right, hotline. Let's rock and roll. We'll give you a physical phone. Do I need this [ __ ] my life? We try to make we try to be cute. We try to we try to make this fancy. All right. Who we got? Hello. You're on speaker. Hello. Hello. >> Hello. >> What's up, man? >> Hi. This is William in Michigan. How you doing, Alex? >> William in Michigan. >> Yeah. >> All right. What's up, man? Tell me about the business. >> Yeah. So, I'm in the uh wiping booties for seniors business. Your sister lives in memorare business. And the main problem we have, sales are good, but it takes a long time to get the LTV. So they stay within a year at least in our business. But I'd like to find out a way to bring the cash forward. So it's kind of like, you know, we're getting cash, but it takes two, three months for us to really get good profits and then of course after that it's doing really well. But how do we bring that cash up forward and present that ahead of time? >> Are you billing insurance or you billing private? >> Private bank. No, no insurance. >> Okay, got it. So, do you bill monthly or how do you bill? >> Yeah, so we build, you know, the first of the month and a lot of times we look to collect first and last month's rent and last month's rent is fully, you know, refundable on a 30-day notice, but it's similar to like an apartment building. >> Yeah, got it. So I would have I mean honestly all there's there's really only um two options that are like immediately available to you or I guess three. So number one is you could have some sort of setup enrollment onboarding some sort of fee like that that you could put into the upfront payment. That's thing one. Thing two is you could require first three months upfront. That's option two. Um, option three is you can add on additional service that many of them need and then you could uh contract that out. So let's say that what are the other things that someone has to buy in order to begin your service? I'm guessing there's some sort of moving costs or moving services, right? >> Yeah. There's like insular like transportation, you know, beauty, hair and nails, stuff like that. >> Yeah. So basically what we would do is just create a bundle that many of those people immediately need to buy in addition to Have you read the Money Miles book? Yeah. Okay. Yeah. I'm reading through it and I I bought the course, too. >> Oh, awesome. Um, so big picture, the one of the first stories I tell there is a guy who owns a storage facility, right? And so he gave a free month of storage away. So very similar business to yours. Not saying that you get free month, but same idea. It's like, well, what else do you need to have when you have a storage unit? You need a lock. Oh, uh, you need boxes. Oh, you need insurance. Oh, you need maybe a bigger unit, right? Right? And so all of these things pull cash forward. And so, well, not the bigger unit, but the other ones do. Um, and so, same degree, it's like, okay, can we sell insurance on top? Can we sell the movein services? Can we sell the boxes associated with that? Um, you know where I'm going with this? >> Yeah. >> So, I think people will have some some sort of elasticity like people are very very sensitive to the monthly fee, >> right? >> They are. >> Right. Less people are less sensitive to onetime fees because it's only once. >> Correct. So, we just need to create that onetime fee for people. Um, and it'll be even more profitable, obviously, if it's not just a fee, but it's also tied to stuff they already have to get solved. And if they do it through you, then it just feels easier. >> Yeah. >> Does that help? >> Yeah. Something else I was thinking about too is like even furniture. I mean, we have it fully furnished, but maybe we could give them like uh buy extra furniture if they want a nice queen size or upgrade on their bed. We could offer that to them, too. That's something that, you know, just popped up. might have the problem about that. >> Yeah, exactly. So, we just look at all the other problems that a customer has that they're going to pay somebody to solve when because you're at a transition point in someone's life, the money's coming out of their pocket and it's already the wallet's already open. >> And if you can, especially because this is such like a stressful time for many families. >> Um, if you can just say like, right, if you can just say, "We'll handle everything. Just pay us this extra fee. We'll make it easy." Uh, many people will just give you that money and then I think you would pull forward all your your cash flow to act to car customers. Awesome. Okay. Well, sounds good, Alex. >> Appreciate you, William. >> Yeah. >> All right. Have a good one, man. >> All right. That's it. >> All right. >> Do you guys like our my new high-tech setup? This is low tech because I got I got asked I got asked uh Am I working on the next book with this one? No, man. Actually, actually, I'll uh actually let me I want to ask let me put a poll up real quick. So, I I'm I'm actually kind of split and your results might have like a 1% shift in what book I decide to write next. Um because I'm at because I just I the other three books I wrote, you know, kind of over the last however many years. Um but I I've got a few different ideas that are nipping on me right now on my ankles. So, book one would be about profit. Just profit. Like the many things that you can do to just like drive profit in a business. There's just tons and tons of tactics and hacks on profit. That's one. Second, uh, so it' be profit/pricing. I'll just put it that way. Profit pricing. The second, uh, is that I would finally consider writing a sales book, which sounds crazy because it's just like the reason I've been so intimidated to write a sales book is because like I honestly feel like I have so much in my head about sales, which is probably why I should write one. Um, that I just like I feel like I can't I couldn't get it into into a book. Like there's so much. Um, but that's that's the second book that I was considering. The third book, um, that I was considering writing, uh, for those of you who were on the live stream, I think two weeks ago, maybe three weeks ago, I did one on mental toughness. So, I talked about the four components of mental toughness, which was, uh, tolerance, uh, uh, tolerance, fortitude, resilience, and then adaptability, right? I talked about those four components. So those four components were just a demonstration of trying to operationalize amorphous terms or character traits. And so I I would say like it's a hobby of mine to define terms from an operational lens, which is like what does trust mean? What does loyalty mean? What does integrity mean? What does guilt mean? What does shame mean? What are all these these amorphous words that people throw around? What does trauma mean? Right? Um trauma mean sounds like a drug. Trauma mean? uh what what what do all these things mean and is there a way of organizing this? So definitely be like more in the I call it personal development if you want um ilk, but I definitely have a full book already outlined there. Uh it wouldn't be about mental toughness. That was just an that would probably be like a chapter. Um but yeah, of those three, can we go pull uh pricing and profit sales or uh operationalizing life? All right, what do we got? What do we got? What do we got? Or let me know the results. In the meantime, um let's take the next one while you guys fill out that poll. All right, hotline. All right, there we go. Polls. Poll is now live. Do we have somebody on here? Oh, we got some votes coming in. What's up, man? >> Howdy. How are you? >> Howdy. What's your name? >> Uh, my name is JT. >> JT. All right, JT. >> Yes, sir. Brother, >> tell me about your business. >> Well, I run like a real estate company, closer, and it it handles the marketing and sales for like new wholesalers and people getting into the business. They can scale faster and earn like learn the process while they earn it, like earn money. >> Okay. So you generate appointments and leads for them. >> Well, we generate the leads for them and we send our sales team on the deal. So basically we are running like the entire front end and the back end. So they're basically running the marketing but they get to learn while they do the process with us. >> So why so this genuine question like why do you do that versus just like doing wholesaling? >> Well, I do it because it fixes the cash our cash conversion cycle. like we're able to we're we're able to fix the like the liquidity issue in wholesale because the days on market is so long. Um we're taking it down to where we can like become way more profitable as we do it different this way. >> Yeah. Okay. Um you could raise money and just do it. Side note, but all right. Um okay. So what do you want to have happen that's not happening? So the when we're on like sales call yeah >> with people um basically they agree on the price but a lot of the times like they can't afford the first payment or they can't get approved for financing and I'm like is that a sales problem or is it like a a lead problem and should we just collect whatever cash they have or no like >> well how are they going to afford to pay for the marketing too if they can't pay for or is that what you're saying they can't they can't afford to pay for the marketing? Yeah. So, they can't afford to pay for the marketing. >> What's the revenue stick? What's the stick in this business? Like, how long like do people stay for years, you know, doing this with you? Like what percentage of customers are are here 12 months later? >> No, it's mostly not that they're here 12 months later. It's like the onboarding. So, the LTB is roughly like 35,000 >> within like 90 days. Um but over time like the only thing they really stay for is like the CRM that they use it. >> Okay. So you white lab go high level or something. >> Yeah. Yeah. >> Right. Okay. Okay. So the issue is that like what's your LTV to CAC right now? So, right now our CAT is roughly like 5,000, but we're we're um at 35 like 35,000ish LTV. >> Okay. So, you're 7 to1. Okay. >> So, I mean that inherently is okay. Um so, what stops you from doing more of what you're doing? >> Um nothing's necessarily stopping me. Our close rate is just super low. >> Okay. I mean, I would probably just throw in lead qualifications on the front end. It'll just like decrease the frustration of your team. You'll probably increase your Well, obviously you increase your close rates if you take out the the disqualifies, but it'll you'll close more in general because the sales team won't be beat down from hearing no all day. >> Okay, >> I'll tell you this, man. You will make significantly more money by adding qualifications to a funnel. Like I almost like I have almost never like I'm trying to think of a time where me adding qualification friction made me less money. Your your metrics will change. So like your so not CAC and LTV but your I mean LTV might change but said differently like your cost per call or cost per click or cost you know whatever metric you use there uh will probably go up but your CAC may go down and your LTV will certainly go up. Okay. >> I would just add more qualifications in the process and then do more. >> So I guess that is I guess that's a fear of mine. Let's see for the for the employment to go up cost for employment to go up. But basically it should make it more profitable because we're not talking to unqualified people. Correct. >> Yes. Because listen, if you let if you let some of these minnows in, right, it's not a good fit for them. It's putting it's their last dollar. Like you should not like you shouldn't do it ethically anyways. But bis like outside of ethics because that won't that never convinces anyone if they're making money. Um it's not good for the business. It's bad for the sales team. It's bad for reputation. And fundamentally like when you accept everyone, you ward off people who can actually afford stuff. >> Yeah. Yeah. >> And like I guess for the we like like you said with like you're big on lead magnets. >> So we do provide like a really in-depth training guide like really in depth. But the the issue there is the majority of people who come in are not qualified at all. So should I add more qualifications to that too? >> So you can add qual what is the lead mag again? >> The lead magnet is a training like it's like all of our SOPs like all of our SOPs all of our like basically for our entire company. You can you I mean you can have the SOPs there whatever just put add an extra box that says like whatever the qualifications are that are that you know are required for somebody to be a good customer. So like for example at the book launch people could opt in to show up to the launch. The launch functionally acted as a as a lead magnet in this scenario. I still ask for people whether they owned a business and if they had a business, what revenue level they were at because I have no need for, you know, leads in a CRM who are not business owners above a certain size to get a call from my team. There's no point. It's a waste of their time. It's a waste of ours, right? They should just use all my free stuff. And so, just add a qualifier on the on on the front end, >> okay? and then only call those leads and then have the thank you page sort uh leads uh the best leads to the the sales team and then the worst lead just you know send them to an automated thing that maybe selfquidate some of the ad spend. >> Okay. So I on the qualification question yeah >> would you put like something vague like we have right now we have a qualification question like are you willing to invest in your >> No that's not a qualification question dude that's that's a like do you have a pulse and a credit card question. I'm saying you have Yeah. >> Right. You need to figure out who your avatar is. >> Okay. >> Have you read the Lost Chapters book? >> Okay. >> The Lost Chapters book. No, I haven't read that one. >> First chapter of the Lost Chapters book is finding your avatar your first avatar. All right. The process that it walks through in that in in the book in that first chapter is you need to look at the customers who have spent the most with you and stayed the longest. What are their characteristics? So, we look at their demographics like who are they, right? We looked at their quantifiables like do they have a certain income level? Do they have a certain amount of kids? Do they have a certain family? Uh and then I look at geographics. Do they live in a certain area? Right? And so when I have those three things put together, then I know that it's like okay, it's actually conservative Christian males uh you know 35 plus uh who are married is actually my best avatar. It's like great. So that's what we're going to make in our ads. And your big fear right now is if I make more qualifications, my cost is going to go up. But it's not, dude, because you're gonna need to advertise to the right type of customer and you'll get those people to opt in and then you will go b get them to buy more expensive stuff. >> Okay? >> It's everyone's fear. >> Everyone's fear is going from general to specific. But when you go specific, you get the right people. >> Okay? So actionable steps are just like the qualification questions and making it specific to the avatar. >> So in order it will be determine the avatar by looking at all the customers that you have. You want to look at who they are, what quantifiables they have, geographics, and if you can, bonus points for sales process. Did they consume anything else in the sales process? They have a different experience than the people uh who didn't who aren't worth as much. Right? Once we have that data, we then weave that into the advertising in terms of callouts of who the avatar is. We weave that into the landing pages. Weave that into the the the drop downs for the questions and the friction that we add in the funnel. We add that into the VSSLs. If you have a VSSL, I'm sure you do. um that that tells them about the process and it begins with the pains and the hook of that specific avatar. You do all that stuff, you will for sure convert more. >> Okay, >> cool. >> Thank you, brother. >> You bet, man. Have a good one, dude. >> You as well. >> All right, rock and roll. All right, so it looks like uh Oh, what does it look like? So, it looks Okay, so I actually thought this was life. Thanks, Luke. Life. He was like, Alex is gonna write a book on life. That sounds so self agrandizing. Um, yeah, like I know about life. Um, okay. So, 40% on sales. Interesting. Profit and pricing actually has a pretty strong a stronger showing than I thought it was going to. Man, this the the vote votes are flying in, right? Maybe we'll have a recount. Uh, Gore style. What was Gore's first name? >> Al Gore. I was gonna say Alan Gore, but I guess that I guess that is his name. Um, okay. Sweet. Uh let's let me see if any any question. Okay. Um what you think are the best revenue retention opportunities for an architecture firm? What would it take to get their started from scratch? All right, Ameiliano, I'm going to give you I'm going to give you some some game. So some businesses like yours, you need to chunk up a level to figure out revenue retention. So what does that mean? So I'll give you an example. So Allan, see the universe knew Allan the software that we ran. Um at the beginning I was trying to sell lead nurture services to brickandmortar businesses, right? SMBs. Uh the problem with lead nurture services when you have an SMB is that they have inconsistent lead flow. And so we're so as soon as they were like, "Oh, this is great. Uh but how do I get leads?" Right? And I was like, "Oh, no. This is a whole another problem. This is a different business." And so then we had the smart idea of like, "Well, what businesses already have leads?" And the answer to that question was businesses already working with agencies. And so then I said, "Oh, maybe agencies are really our customer." And so that's what we figured out was that agencies would bring customers in and they would churn those people out, right? But they let's say a chiropractor agency has 10 chiropractors that pay $2,000 a month. I'm sorry, mini itty bitty agency, right? They've got 10 chiropractors pay $2,000 a month. And let's say every month they lose two chiropractors and they gain two chiropractors. I can rely on that agency to use my software month over month over month with each of his chiropractor people even though the logos of the people inside of his little ecosystem will change. But my revenue retention on the at the agency level was super good. So why do I tell that story? because it's an analogy for you which is that your architecture firm you're thinking about it at the house level or at the building level right if you chunk up a level which is like okay um who are the referral partners or who are the people that you do business with on a regular basis is it contractors is it um who are the people referring you business and so once we find those people who who you're doing business with on a regular basis we want to demonstrate that we're retaining them rather than the pro at the project level so you chunk up and then those become your nodes of revenue. And so you then have your acquisition or your sales motion is going to be geared around how do I advertise and acquire more of these referral partners and I know each referral partner is worth X and it cost me Y in order to acquire them and I can retain them significantly more than I can for the individual products or logos that they're bringing on. That help? That's how you do it. Okay. Uh next caller. Hello. What's up, Alex? >> What's up, man? What's your name? >> My name is Liam. I'm 24. My business is going to do about six million in revenue this year. >> Uh, and we do apparel for TV shows, unlimited time, exclusive drops. >> Apparel. Okay. So, you do So, you partner with a you partner with Shark Tank, right? >> I'm saying hypothetically. So, you partner with a TV show and then you make Shark Tank merch and then you drop they drop that merch on their show and you deliver. We market it ourselves. We drop it through our channel. So, it's a collaboration, but it's all through our own channels. >> But you obviously get to use their brand in the advertising and and then you do some sort of like split on the profits, I'm guessing. >> Yes. >> Yep. >> Okay, great. So, you're doing six million. What's internal revenue? Or rather, what's gross profit and then what's internal revenue? So, that's kind of three numbers there. Uh gross profits this year we're going to be running at about 10 to 15%. And we about 30% last year >> for >> So $6 million is what you made. That's how many shirts were bought, right? >> Yep. >> Okay. $6 million of shirts are bought. >> What do you sell a shirt for? What does it cost you fully loaded? >> Uh $50 for a shirt and it costs about 12. >> Damn. Okay. Okay. Okay. So, you got 38 on on 50, right? Is what is what you're making, right? >> Yep. >> Okay. Fantastic. Now, uh so what's that? That's uh 75%ish gross margin somewhere in there. Okay. So, that's fine. Now, of that $38, what's the split between you and the TV show? >> Each license is negotiated independently. You can range from 5% to 25% depending on the size of the IP. >> Oh, so they get 5%. So they would get $25 per shirt all the way to getting, you know, 12 bucks a shirt. >> Yeah. >> Okay, that's not bad. That's not bad. Okay, this is workable. Uh, so I'm going just going to say like midpoint, let's just say midpoint is 10 bucks. All right, we'll be aggressive with it. So 10 bucks. So, you actually had $28 per shirt on on um on a $50 shirt. Call it 25 with other [ __ ] So, 50% um is what we're working off of. Okay. So, what was net profit? >> About 600K. >> Got it. 10%. Okay. So, what's the problem? >> Uh we've completely capped out on our We do almost exclusively paid traffic on Meta and Tik Tok. >> We drive people to a wait list for the drops. We hype the drop up and then we do a launch. >> Um, >> and the pricing model, we base it off of what we can fire a lead for. And the problem is our cash flow becomes super inconsistent because each IP performs wildly differently in terms of how much rep. >> Um, and some weight lists will convert at like a 25% weight list to purchase ratio. Some will convert at a 5%. Uh, and so we need a more cost-effective way to acquire leads because essentially we're just I mean dead in the water at 10%. Yeah. So I think that the big thing that's actually missing for you is predictive data. So you being able to say like you're like well they perform wildly differently. Well the more you do it and the more data you track the less wild it should be. Does that make sense? Yep. So, if you were to take somebody, I'll give you an example example. If somebody else were to go launch a book, right, and they have call it four million, you know, YouTube followers, whatever, and I launch a book and I have 4 million YouTube followers. Why is it that my book is going to sell way more than theirs, right? You should be able to answer that question quantitatively. And so that'll take a lot of the guesswork and the volatility around which brands you partner with and the power of the negotiation because I'm sure there's some deals where they thought their brand was significantly more valuable than it really was. And there's probably other brands and this probably even sometimes more often the case a brand that they don't think it's that valuable at all and in fact is actually super valuable in terms of the people who are willing to buy. >> Yeah. Okay. So thing one is predictive data. thing too. Have you considered going to influencers and doing this exact same model? >> We have um the big thing is emotional relevancy to the show or to whatever the IP is. >> So a lot of influencers they're not particularly well for something like that where it's like a really good example is the Neelk boys with full right find a commonality with an audience. They have a hierarchy of brand over. They treat themselves like ambassadors. Um, we've looked at it. We've we've interviewed you, but the numbers just never made sense to us. Well, I mean, like I I feel like they should because like you're you're you're taking premium TV shows which have a lot of times smaller audiences than like some big creators do. >> Yeah, I was right. >> I mean, Mr. Beast can drop a t-shirt and do your entire year's revenue in like a day. You can dive deeper into the creator economy, leverage already existing audience. We don't have to spend so heavily on ads. >> Yeah. And they'll collaborate with you and there's a zillion of them and a lot of them don't make money >> and and they're not going to be hardcore negotiators. >> Sorry, go ahead. >> All of the IP we're collecting are in a specific niche. Yeah. And as we retain a whole lot of the IP, we can renew these uh these releases over and over again. >> Okay. >> And that makes us uh an acquisition target when we have all these relevant IP. >> You mean just the t-shirts that you're allowed to use and the and the ads that you can run for them. >> Exactly. Because all the TV shows, they're anime TV shows. >> Oh, word. I got it. So, you're super niched. I didn't get I didn't hear the the anime part at the beginning. Okay. All right. Um, so the issue is what is issues that like it's not growing as fast as you want and I mean what kind of exit do you want? >> I would like to get positioned for like a four to 5xid within two years, you know, in like the uh plus range. >> Well, who wants to So, okay, I'm going to say it back to you. So, basically like you'd want to make like three or four million bucks on a sale. >> Yes. Okay. Um, who would be who would be an acquirer for a business like this? Who's the buyer? >> Uh, big media distribution companies. There's a whole bunch of uh moving into westernizing this Japanese IP. Um, there's some pretty big players, multiple billions of dollars space now. >> Yeah. But if >> advice for the customer and the uh the exclusive IP >> I have two pieces >> the exclusive rights. Yeah, I have two pieces of relatively kind of maybe bad news. So bad news number one is that multi-billion dollar companies don't write $4 million checks. It's just it just it's dimminimous, right? It doesn't it doesn't move the needle. >> The second issue um is that the nature of what you do is not that complicated. Like I can just have the show and make my own t-shirt, right? And I don't I'm not saying I'm believe me I'm not saying this because I want to blow your balloon up. That's not the that's not my point. Um I'm just gonna because I want to I want to help. So you're all in anime. I mean I mean what about anime creators? There's tons of those even in that niche. >> Yes. This is this is what we're looking at doing next is building out a really solid ambassador program. Um and scaling to >> I mean you could build I think the ambassador program so if we're talking about high leverage, right? I think the ambassador program is really smart for a couple reasons. Thing one is that each of the ambassadors themselves once you like you can they could go promote each of these other products and then make money kind like you build your own functionally a Tik Tok shop of t-shirts via ambassadors who are pushing them because they think the t-shirt's sick. That's not that hard of a push and a lot of people would sell that, right? You'll then see which ambassadors have the most pull. So you'll get early data and then what I was talking about earlier with predictive data you will then be able to say oh these here's we have a thousand you know ambassadors of people who are micro and nano creators and maybe mega creators around anime and we're going to make t-shirts for the top hundred of them and do drops so that every week uh we do two drops a week for these creators and they're going to go promote other other t-shirts for the premium brands that you were talking about the IP um throughout the here, but you uh but they themselves will do two drops uh for themselves, which will which will pull way [ __ ] harder. Anyways, >> okay. So, to just to make sure I understand this, it would be partnering with larger creators, doing drops relevant to their audience, building relationship, and then that would also double dip where they would promote for our exclusive IP releases as well. >> Yeah, >> that's actually a really good idea. All right. Thanks. >> Yeah. There it is. Yeah. I'm own all the creators. All right. >> There you go, brother. Have a good one, man. >> Yep. Bye. >> See you. That was great. Um, okay. I'm going go chat. Okay. So, I am starting a SAS on property due diligence/insspection services for buyers interested interested and serious about buying one or more property. Should I hire inspectors or operate a platform model? I honestly, dude, I think you'll find out. Like I think you like you'll take a bet. And I mean, I started Allen and was like, "Oh, we're going to build lead nurture for small businesses. This will be a home run." And then I found out that agency owners were actually our best our best customer. So you'll pro like depending on how different the I'll say platforms are significantly harder to build. So I think B2B SAS is a way safer bet. I mean, as a co-founder of school, I can tell you it is not easy to do. And the hardest part is the part that school is already through, but it's the the five years of going from, you know, every single person saying, "Can I white label this? Can I white label this?" And you having no real value prop besides like someday this will be really valuable when it's a marketplace. Um, but once you turn that corner because you make the product so good, then the the the marketplace component if you're staying true a platform model. Um, but I would do the reason platforms get the multiples they do is because it's so so expensive and so hard to do. So I would I would prefer a B2B SAS model if I was if I was a betting man and it was my life and equals one, you can't live 10 lives or 20 lives. Um, I would probably but if you're like I have to be a trillionaire, then if that's the thing, then you got to go platform. Okay. Okay. Actually, I'm gonna answer this other one. Rowdy Adventures, I have a patent that will be pending in eight weeks. What would you recommend to do in preparation for that? I've already been working on finding the cheapest manufacturer to get the price of parts down. All right, so I've got good news and I got bad news. So patents, believe it or not, don't mean [ __ ] unless guess what? You have a legal budget to defend them. So I have a fiveperson team full-time in-house that all they do is takeowns. Every week we take down 50, 100, 200 plus accounts. all those scam things where people try and sell my stuff or you know the impersonator account like all that stuff that happens like we have a full legal team that gets them delisted gets their ad account shut down gets them removed from social media gets their Shopify pages down gets their processors removed like that's a whole process but that only works if you defend it and so basically in the eyes of the law if you do not um defend your patents or your IP um they well they're not that defensible also like the idea like business is much more ruthless and cutthroat than you think it is. Um because like people will just steal your [ __ ] and then say what are you going to do, right? And then it's going to be a multi- it's a it's a long legal process to prove how close is it? Is this fair competition? There's a lot of other stuff. So having a patent in of itself does not in any way guarantee success. You're still going to have to market it. The patent has to be around something that truly is core that no one else can reproduce around the product. Um and so basically you still got to start a business you still got to make the business make money. Um and then when you have some of that money and you start to get successful that is when the dupes will start flowing in the duplicates and then at that point you need to start allocating a certain amount of capital to continue to defend the IP. I like as far as we're concerned until the business is successful the patent means nothing. Okay. So who else we got? Hey, Alex. >> Hello, sir. >> Hi. Uh, my name is Sam. Uh, my business partner and I run a membership site for real estate agents where they basically get daily social media templates, lead magnets, training videos, all this stuff to help them sort of save time and get better at Instagram. >> Okay. So, it's a membership. >> So, we do >> What do you What do you give them on a monthly basis? Um, a lot of it is just daily social media templates. So, 30 days of content that they can edit, customize to their own personal branding, post on social media. And then there's a library of like little lead magnet things and and that they can customize again and use on their Instagram and training videos to help them set all up their Instagram, all that stuff. >> But mostly it's going to be the the content templates. >> Yeah, it's it's a content membership. Yeah. >> Okay. Got it. Okay. So, how many people you got? What do you charge? Yeah. So, we charge uh $49 a month. >> Okay. >> Um we have just under 300 members. >> Okay. >> And uh yeah, I mean we do just under sort of 20K a month. Yeah. >> And we take like you know 75 80% of that. >> Cool. Got it. So what is the what's the issue? >> Yeah. So my question is you know how to sort of >> what's churn what's churn? >> Yeah. Uh yeah hovers around 12%. you know, monthly. >> Yeah, >> monthly. Okay, got it. Do you have any metrics that like after a certain point people continue to stick? >> Um, we've only been in business for just over a year, so it's hard to get that like 12 month kind of stick number, but monthly it's it's 12%. >> Yeah. Yeah. Well, I'll tell I'll tell you why this is important. >> If let's say it's 12% Well, 12% is tough because that's like you lose all the customers by the end of the year almost. Um, okay. What's sales velocity right now? Meaning monthly sales unit sold? >> Uh, between, you know, you know, 50 a month, 40, 50 months. >> 50 a month. >> Yeah. >> Okay. Got it. >> Okay. Still, you're still growing but slow. >> Right. We're getting to the point where churn is starting to catch up with us. >> Yeah. Um, and and that kind of leads into my question being, you know, how do you kind of decide whether to push or pivot when there's sort of these structural challenges or at least perceive structural challenges in your market? Um, and you're maybe looking at a different market, a different niche that might sort of be better for your business or for your offer essentially, as in not marketing as as in not doing it for real estate agents, maybe doing it for a different uh market. Why do you think this other market is going to be different than real estate agents? >> Yeah. So, I mean generally real estate agents um from our perspective they're they there is a lot of structural volatility in terms of their income and obviously with SMBs that's you know >> a given. It's probably even with real estate agents. Um >> and you know if they don't make a lot of money there's not a lot of willingness to pay. Yeah. And basically what we've seen in our market there is like an a market leader with you know over 5,000 members been doing it for six plus years now. Um and a couple others with a thousand plus like we are a late entry into this market. This is something we started to do just because we thought we might as well pick a proven business model. >> Okay. >> Um and we've seen other content memberships in other industries like you know accountants uh one with like aesthetic nurse practitioners. >> Yeah. >> Start at the same time as us have the same Instagram following. We've gone through their funnels and they've like 5xed. >> Yeah. >> From from in terms of what we've been able to do growthwise and we're wondering trying to figure out why that is essentially. >> Um well do you do you have full transparency into their numbers? >> Um I have full transparency into a few of their just you know the amount of members they've had and the amount of Instagram followers they've had. I've kind of gone through their funnel a little bit. I know that they don't necessarily run a ton of ads. like it's not like they're doing a ton of ad spend for example. >> Do you know what their churn is and how many members they have? >> Um I can give you one example of one that has we have like 50k on Instagram. They have 40k on Instagram. We're kind of friendly with them and I know they have like 1,800 members. >> Okay. >> And that's that's been a year and and their sales velocity from what I can tell is like 100 plus a month maybe 150 200 a month. >> Okay. And they start at the same time as you >> basically. Yeah. similar following, all that. >> So, I mean, the only >> And they have no they have no big competitors. >> Yeah. Well, I mean, I think going to an underserved marketplace is not a terrible idea. Um, the reason I'm like more okay with this is that you guys are still really early. You know what I mean? Like it's it's kind of it's it's pretty much a brand new business. I do think that like is this business that you have uh fixable? Yes. If the market leader, I'll put quotes around that, has 5,000 people, well, there's like a million realtors. So there's lots of opportunity, right, that's still there. Like no one really owns the market. Um, so those are kind of the plus sides. I'm going to also bet that like to your point, it might not be that realtor like realtors of course if you take them in aggregate are have volatility, but if you look at the top 5% of realtors, like they they make they're full-time, right? If you have a lot of part- timerrs who are in there, uh, then you have huge amounts of churn because they're they're not they're barely even business owners, right? >> Right. So you could probably fix >> in terms of our value prop though. >> Yeah. Okay. Go ahead. >> Yep. >> Yeah. Just in terms of our value prop. I mean if you're a top 1% agent, you probably have uh some sort of social media manager or media team. We're a lowcost alternative to that essentially. So it's kind of just a a you know a feature, not a bug, I guess, in our business. >> Yeah. Um but you'd have to have like the I mean the thing that's bad with the business right now. Okay. Zooming all the way out. What do you want to have happen? You want to sell this thing? You want to make more money? >> Short-term, make more money for sure. That's what we're focus. >> The thing is is that you're selling 50 a month, which is actually like really not a lot. Um, from a sales velocity perspective, given the size of that market and that like that is the problem, right? Like you could sell like if you have a million person marketplace, it's like we could be selling a thousand of these a month, right? And then the churn, even though it's, you know, 12%, it's like, well, we just know that we're going to get eight months on average times 50 bucks. So, we're going to make $400 per customer as long as CAC is, you know, $100 or less. Cool. We have high margins. We're good to go. Um, and you just take the money and then you do whatever you're going to you're going to do. Uh, that's like short term. You could do that. And I think targeting people who've done a sale within the last 30 days or something like that, maybe they're not the 1%, but they're like quote on the way. Hey, they're quote reinvesting their business and they just had a sale in the last 30 days. They have some cash. Like there's some elements here that you can do. Also, like are you doing a big uh do you do a big promotion for getting annuals? >> Uh we Yeah, we try our best. We do two months off. We're we're starting to add other bonuses in terms of the annual as well to try to push more people towards annuals. But yeah, >> right now LTV is eight months for you. So you might as well give four and pull the cash flow forward since it's equivalent and turn on those customers will be lower, >> right? >> Cool. All right. So, that's thing one. Um, now to the larger question of like should you go after a blue, you know, a blue or ocean market? Um, and in in so doing, like, does that mean you're going to start another Instagram page and like build that whole thing up and do that game? >> Essentially, that's kind of the thing that we're, you know, relatively best at, but then we've invested a lot of time into. It's something that I think we can do, but it's obviously going to take time and time away from our, you know, everything else we do. >> Yeah. I like I Okay, I'll tell you what I want. I I don't think it's a bad idea. I'll say that. I don't think it's a bad idea. Um like normally I just say like no, stick with your existing thing. I do think you should stick with this thing a little longer. And I'll tell you why. I think that it would it would behoove you to learn which types of realtor churn versus the ones that don't. And there's probably two or three characteristics that separate the people who do versus the ones that don't. Number one. Number two, I do think you need to make a better incentive to get people to prepay for annual. Number three, is there a version of this business that like on top of this you sell some sort of maybe $500 a month thing as an upsell or a $1,000 a month thing that does have so have some sort of managed element to it that you have lots of AI and automation built into it so that you can do it with high gross margins, >> right? Yeah, definitely something we've thought about just adding adding upsells, adding different offers. >> Yeah, I I like I I I I can appreciate the simplicity of the business, believe me. Um, I just feel like you have a lot more to learn from this before doing the next thing. Um, rather than just saying like, "Oh, it's the avatar." It's just because like that's the obvious thing that everyone says. And the market leader, and I'll put quotes here, has 5,000 people. It's not that many. >> No. And and I' I've tried not to just say it's the avatar to the best of my abilities. You know what I mean? Seems like Yeah. It's the easy way. >> So, that's what I would do. All right. So, I would try to learn more about the customers. Number one. Number two, I'd have the annual prepaid thing. Number three, I would start running ads and see what your cost of acquisition is with ads and having that strong pre pre prepayment thing. I would also have a selfquidating offer on the thank you page that could be even higher than just the annual, right? Because that could just improve the uh funnel metrics overall. Maybe like a a >> high ticket a higher ticket item. >> Yeah. And I'll say a higher ticket with quotes here. I'm talking I'm talking like 197 to you know 397 somewhere in there which might be like uh we have all these accounts. We'll tell you we're going to give you the 100 best performing pieces of real estate content over the last year. >> I would buy that. >> Right. >> Right. >> Yep. >> All right. That's what I would do. I think you need to learn this game better and then you'll have more perspective and you might just break through and then just become the market leader. >> Yeah. Okay. Thank you. Really appreciate that and I appreciate everything you do, all the content you make. >> Appreciate you too. >> Later. >> Thanks. >> All right. Okay. Uh Mr. Mosy. Oh, thank you. That's that's Mr. Mosy to you. Uh, as a video editor who's facing client acquisition problems, I get scared thinking of AI and if I even have a scope in the future. Bro, why would you be scared of AI when AI makes your job uh a hundred times easier to scale? like for the for the short to medium term there is tremendous leverage like the the the everyone knows quote knows that AI is going to come for everyone's job okay internet is going to disrupt every industry okay and it has but guess what there's also businesses that still don't operate on the internet and still use fax machines so like it's not going to be as it's it's it's going to still follow an adoption curve right it's still going to follow an adoption curve of early adopters all the way to lagards and some people never adopt it at all and so And those businesses can still make money. Real talk. Some people use fax machines, still make money. Um, some people only do in person business and only use, you know, paper and clipboard still make money. And so, um, I wouldn't fear it. You always want to harness it because as long as humans can compete against humans, uh, with tools, that's how it's always been for the dawn of mankind. As soon as it's, uh, AI versus human, AI will win. And so, but as far as I'm concerned right now, use the AI to get as much leverage as you can. Maybe you could 100x your scale using technology rather than fearing it. All right, last caller. Hello, Senor or Senor Rita. >> Oh, can you hear me? >> That's a seenor. Hello. What's up, Senor? >> Hello. >> Hello. >> Can you hear me, Alice? >> I can. Talk to me about the business. >> Amazing. So, I do robotic cotton candy machines. Essentially, that's our main product. >> Robotics and what? >> Two different people. Hold on. >> Robotic cotton candy machines. >> Robotic cutting and canning machines. >> No, robotic cotton candy. Like >> cotton candy. >> Robo cotton candy. Got it. All right. >> Yes, you can put it like that. Exactly. >> Okay. So, >> so we have two main people we sell to. We have entrepreneurs who buy our machine as an investment and put them in locations. And then we have actual businesses who we do one of two things with. We place it there for free. Give them a percent of sales or they can buy it for their business. Now, we're at a point right now where we have a bunch of entrepreneurs, too many account, who want to buy a machine, but they don't have enough locations to put them at. So, what we're trying to figure out is we're trying to figure out the best way to get location. I love this business. This is work too well and we're trying to basically build an outbound funnel. >> Dude, this is a cool business. I like this business. Okay, so give me give me some give me some cotton candy money. Give me some cotton candy money. What what is a what is one of what is obviously it depends on the location and foot traffic and blah blah blah but what does the average cotton candy robo cotton candy machine make. I've been waiting all day for >> park. You're looking at it. >> Go ahead. >> At a trampoline park, it's it's not amazing. It's about a thousand bucks a month. But at a higher tier venue, so think like, you know, museums, uh, amusement parks, water parks, we have machines that are doing 10 to 15,000 a month. >> Okay. But average is a thousand. >> I would say average is about 3 or 4,000. >> Oh, okay. Average or median? >> Average. >> Okay. >> Median. Median is probably about that range, though. There's a lot of outliers. >> Okay. Okay, cool. Three to $4,000 a month. All right, I can rock with that. Four grand a month making a,000 a week selling robo cotton candy. Okay. Yeah. >> So, can you can you supply all these machines to these people want to buy them? >> Yes. >> Okay. So, you have the supply. All right. So, then what again is the constraint here? >> So, the constraint is getting enough businesses who want for us to put the machine. We have entrepreneurs who want to buy it, but they don't want to buy it unless they have a location. So, we need to find locations. >> They need to find the location. >> They need to find the location. >> So, that's what he's been doing. But that's the main constraints. If we could find them in locations, A, we could charge for it and then B, maybe you just take it ourselves if it's a good location. >> Well, that's what I'm saying is like if they like the value of the entrepreneur like is that they front capital and work, right? >> Yeah. >> If you just find the location, then you should just own the location, right? Like why bother having them there? It's like why split it? Well, usually they're we're looking for locations in their area because it's a it's a servicing thing, right? Like I don't want to have to hire a new guy in Connecticut for one location, right? Unless service the Robocott to somebody else. >> Yeah. It it takes a lot a lot to service, I believe. >> Okay, fine. >> What we do actually is we take a percent of revenue that their machine makes and that they service. So that's the second line of business. >> Okay, got it. >> Either way, we're making money. >> I love this business, dude. Okay, cool. So, you just need to go generate leads for businesses that want to make money for no dollars down and you're having trouble with that. >> Believe it or not, yeah, believe it or not. >> How are you advertising? >> Okay, we tried cold ads like, you know, LinkedIn didn't work. Meta didn't work. The only thing you really I think you tested is calling the businesses or emailing them. >> Okay. All right. Okay. So, emailing is working. I'm not even going to touch the first statement that you said because I just want to light my hair on fire. Um, so email. Okay, I'm gonna I'm gonna I'm gonna go off for a second, then I'm gonna we're going to circle back to this email thing for everyone. If you run meta ads and and it didn't work. It doesn't mean that meta ads don't work for your thing. It means that your meta ads and your conversion process didn't work. Not that meta ads don't work. Okay, rant over. Back to you. So emailing people and then asking them if they want free money has gotten response rates. All right. So what are the metrics of our outbound funnel for our robo cotton candy business? >> What specifically you interested in? >> Walk me through the funnel. >> 100 emails. We'll get about two to three to respond. And out of that honestly most will close because it's it's a really easy thing to sell. >> Okay. You send a 100 emails and you get two to three responses and you'll close basically anyone who responds. So let's just say let's get really conservative here and say that you close one out of 100 100 emails. >> Yes, sure. >> Okay, great. So one out of 100 emails. Okay. And what's the cost of a machine? >> About 15,000. But again, they're not entrepreneurs. We don't have an >> 15,000. Okay. What do you make on a $15,000 machine up front? >> 50 50%. >> Okay, dude. I love this business. Okay, got it. All right. So then what stops you from sending 10,000 emails a day? >> One of the things I'm working I'm working on doing that and building up cold calling calls >> and building a cold calling uh side. Is that what you said? >> Yeah. Yeah. Exactly. Those are the two that that work the best. >> Yeah. I mean like this is a great business. I love this business. Okay. Like like what how can I help? You're like, I send a 100 emails, which takes two seconds, and I make $7,500. >> Um, >> yeah, >> emails that that is, you know, something that's a lot easier. So, my main focus has been for the past couple weeks has been the cold calling aspect. How do you like bring people on? How do you train them to do this? I watched a video yesterday. It was like an hourong presentation about like BDRs to like the ratio of those people to sales people. We're kind of like just walking through Yeah. >> like a setup you would have for something like this because right now our sales people control the entire funnel. They finally they contact them. Yeah. >> And it's messy. I think people kind of >> uh there there's not enough things in the pipeline because people are busy closing deals essentially. >> Yeah. I mean I I mean that I everything's good, man. Like you just haven't you have a process that works and you haven't scaled it up yet. I mean the returns on this are stupid. >> Yeah. >> It's insane. It's ridiculous, >> right? So like you're winning. It's like you got to hire some headcount. Okay. It's like every SDR can probably bring like I mean my god, dude. Like I mean this is absurd. I don't even know. I don't even know what to do. Like what was your We have your number. I'm gonna follow up on this one because this is this one's interesting. Um like I I don't even know. I don't even know where to start, man. It's like it's I mean we just have to like you have to warm up domains. You have to have multiple domains. We have to send we have to get to a thousand emails a day. We're going to inbound 20ish qualified leads. Those 25 qualified leads are going to talk to one setter and you can have one close. Like you don't need like you don't even need to have an army to to make this thing make crazy money. Like if you had a team of five let's say let's say you had a team of four setters one closer from this model. Like four setters like I mean Jesus four setters you could get to 10,000 emails a day. So you get a 100 leads a day. >> So okay. >> Yeah. >> I'm glad you said that. So this is Sorry if you want to keep going. I apologize. >> You're good. I have three minutes. >> Okay. So, I think our problem is it's the opposite. We have four closers and we actually have a single setter. >> Well, then they got to work their leads, >> you know. >> Yeah. They they hunt their own food, so to speak, is what we say. >> No, but I'm saying like you you need to basically, let me say it this way. They have to hunt their leads. You can hand them some leads that you generate from email outbound. >> Awesome. >> And do it as a roundroin, first come, first serve, first person who grabs it as soon as you put it in. So would you hire someone specifically for outbound for email and calls? Same person like how would you go about growing that like the pipeline itself the very beginning? >> Well the thing is is that right now give them the side like if the close rate on these deals is already so high you could have the closers just work these leads. So basically everything that's email inbound just hand them straight to a closer and boom they close the deal. Right? That's all it is. Now they still have to work their phones and go get deals for themselves and that's fine. Like our closers still do two hours of outbound every day because it keeps the the short sharp and it keeps them appreciating the leads that we send. >> Interesting. Interesting. Okay. >> Now, SDRs though, dude. I mean, you could get a list of just business owners work that. And there's also I mean right now there's the AI dialers are are getting exceptionally good, especially for this type of thing. But you could even do this old school. >> I had them call me. >> Sorry. >> Yeah. No, I had them call me a while ago. I couldn't even tell the difference between the AI calls the first five minutes. It's they're insane. >> Yes, they're very good. And so like I mean fundamentally either you can install SDR team or you can have an AI SDR team. Um like dude, you have so much opportunity here, dude. That's all I'm saying. Like you have so much opportunity. You have four sales guys. I would like my immediate next action because I'm only going to give you one and I do have to go. Um is that I would go from 100 emails to 1,000 emails. Eh, sorry, not uh 10,000 would be 100. You have four guys. That'd be 25 leads per guy per day. I would probably cut that in half just because they're it's new process, whatever. So, let's get to I would I would say I would go to 5,000 emails a day instead of 100. >> That's what I would focus on. That' be all my focus is how do we go from 100 to 5,000 emails a day? >> Would you have them do it? >> Huh? >> Would you do it or would you have them? >> No, I would do it. You can automate most of this stuff. You don't need them to do it. It can come from their account, but they're not doing it. >> Gotcha. >> That's it. You literally need high level email automation with some AI personalization on the front end. Warm up the domains, set up multiple names, one for each guy. Probably have backups as well. Um, to send the emails to them. Each guy gets 10ish plus leads a day from these emails. Closes six. And you're you're at dude, you're at I don't know, a lot. >> Okay, copy that. I appreciate it. I know you got to go. >> Fantastic. This was a great talk. Congratulations on Robo Robo Robo Candy for the rest of that. >> All right. Later, bud. Bye. All right, that was her hotline. I got to take Q&A's in person now because I'm here at my headquarters and I got bunch of entrepreneurs downstairs. So, I appreciate you all. Hope you enjoy the front end and um peace and blessings be upon you. Rock and roll, provide value and uh don't break the law. Bye.

Download your free scaling roadmap here: https://www.acquisition.com/roadmap The easiest business I can help you start (free trial): https://www.skool.com/hormozi If you’re new to my channel, my name is Alex Hormozi. I’m the founder and managing partner of Acquisition.com. It’s a family office, which is just a formal way of saying we invest our own money into companies. Our 10 portfolio companies bring in over $250,000,000+ per year. Our ownership stake varies between 20% and 100% of them. Given this is a YT channel, and anyone can claim anything, I’ll give you some stuff you can google to verify below. How I got here… 21: Graduated Vanderbilt in 3 years Magna Cum Laude, and took a fancy consulting job. 23 yrs old: Left my fancy consulting job to start a business (a gym). 24 yrs old: Opened 5 gym locations. 26 yrs old: Closed down 6th gym. Lost everything. 26 yrs old: Got back to launching gyms (launched 33). Then, lost everything for a 2nd time. 26 yrs old: In desperation, started licensing model as a hail mary. It worked. 27 yrs old: "Gym Launch" does $3M profit the next 6 months. Then $17M profit next 12 months. 28 yrs old: Started Prestige Labs. $20M the first year. 29 yrs old: Launched ALAN, a software company for agencies to work leads for customers. Scaled to $1.7mmo within 6 months. 31 yrs old: Sold 75% of UseAlan to a strategic buyer in an all stock deal. 31 yrs old: Sold 66% of Gym Launch & Prestige Labs at $46.2M valuation in all-cash deal to American Pacific Group. (you can google it) 31 yrs old: Started our family office Acquisition.com. We invest and scale companies using the $42M in distributions we had taken + the cash from the $46.2M exit. 32 yrs old: Started making free content showing how we grow companies to make real business education accessible to everyone (and) to attract business owners to invest or scale their businesses. 34 yrs old: I became co-owner of https://Skool.com to help the many people who want to start a business online do so. Today: Our portfolio now does $200M/yr between 10 companies. The largest doing $100M/yr the smallest doing $5M per year. Our ownership varies between 20% and 100% ownership of the companies. Many of them we invested in early and helped grow (which is how we make our money - not youtube videos). To all the gladiators in the arena, we’re all in the middle of writing our own stories. The worse the monsters, the more epic the story. You either get an epic outcome or an epic story. Both mean you win. Keep crushing. May your desires be greater than your obstacles. Never quit, Alex DISCLOSURE Information shared here is for educational purposes only. Individuals and business owners should evaluate their own business strategies, and identify any potential risks. The information shared here is not a guarantee of success. Your results may vary. Copyright © 2025.