7 Millionaires Asked Me How to Get Rich

Summary

In this business-focused transcript, a group of high-earning professionals discuss strategies for scaling their ventures. Topics range from niche market dominance, potential for roll-ups in the medical sector, to the challenges of maintaining revenue retention in various industries. The conversation touches on the importance of branding, customer acquisition, and the shift from service-based to product-focused businesses, highlighting the need for a strong value proposition and market understanding to achieve significant growth and scalability.

Takeaways

• 😀 The room consists of individuals making between $1 million to $12 million per year, discussing business scaling strategies.
• 📈 A participant with a neuropathy business is doing $5 million yearly and is considering scaling or selling the business.
• 🏥 The neuropathy niche is small with around 2,000 doctors, and the participant's business has engaged with 160 of them, indicating significant growth potential.
• 💰 The discussion suggests that the ultimate business model could involve rollups, where similar businesses are consolidated for efficiency and higher valuations.
• 🤔 The idea of selling the business is appealing, but it would require expanding to different verticals to increase its value.
• 📊 A business model involving 160 clinics generating an average of $3.2 million per year in revenue is presented, highlighting the potential for growth.
• 💡 The concept of 'rollups' in the info and agency space is introduced, where the aggregation of similar businesses can lead to significant value creation.
• 🏘️ A real estate flipping business in Missouri with $15 million in revenue and a net profit of $2.5 million after overheads is discussed.
• 🚀 The real estate business is at a crossroads, considering whether to expand within the current market or pivot the business model due to market saturation.
• 🛠️ The importance of learning new skills, such as advertising, is emphasized for business growth and to stay competitive in the market.
• 🌐 A software company that helps content creators produce more engaging short videos using AI has grown to $5 million in revenue and aims for $20 million in the next year.

Q & A

What is the annual revenue range discussed for the individuals in the room?

The annual revenue range discussed for the individuals in the room is between $1 million and $12 million per year.

What is the business model that the person doing $5 million a year is using?

The person doing $5 million a year is using a scheduling model, specifically for neuropathy treatments, which includes services like diabetic dinners.

What is the niche market discussed in the script?

The niche market discussed in the script is neuropathy clinics, with approximately 2,000 doctors specializing in neuropathy, out of which 160 are part of the discussed business model.

What is the potential for scaling the neuropathy business according to the script?

The potential for scaling the neuropathy business is significant, as there is a large untapped market with only 160 out of 2,000 neuropathy clinics currently involved in the business model.

What is the concept of 'rollups' in the context of the business model discussed?

In the context of the business model discussed, 'rollups' refer to the consolidation of similar businesses, such as neuropathy clinics, to leverage shared marketing, pricing, packages, and operational efficiencies, potentially leading to a more significant exit strategy.

What is the average revenue generated per year by the neuropathy clinics involved in the business model?

The average revenue generated per year by the neuropathy clinics involved in the business model is estimated to be around $3.2 million, using an average calculation.

What is the main challenge faced by the person running the permanent holiday lighting business?

The main challenge faced by the person running the permanent holiday lighting business is the lack of revenue retention and the need to upsell additional services or maintenance plans.

What is the average ticket price for the permanent holiday lighting installations?

The average ticket price for the permanent holiday lighting installations is about $5,000.

What is the Customer Acquisition Cost (CAC) for the permanent holiday lighting business?

The Customer Acquisition Cost (CAC) for the permanent holiday lighting business is $300.

What is the main constraint for the residential real estate flipping business in Missouri?

The main constraint for the residential real estate flipping business in Missouri is the saturation of the local market within a 4-hour driving radius and the need to decide whether to expand to new cities or pivot the business model.

What is the annual revenue of the software company called 'Sub Magic'?

The annual revenue of the software company 'Sub Magic' is currently at $5 million, with plans to reach $20 million in the next year.

What is the main challenge for the accounting firm discussed in the script?

The main challenge for the accounting firm discussed in the script is operations, ensuring client satisfaction during the high-demand tax season, and improving the sales process to charge a premium for the value provided.

What is the annual churn rate for the accounting firm?

The annual churn rate for the accounting firm is around 15%, which is considered high in the context of their business.

What is the main focus for scaling the DTC fashion brand in Indonesia?

The main focus for scaling the DTC fashion brand in Indonesia is to determine when to expand into new product lines, such as women's or sportswear, to increase the brand's market reach and value.

What is the current revenue for the DTC fashion brand in Indonesia?

The current revenue for the DTC fashion brand in Indonesia is $1 million per year, with plans to scale to $3 million.

What is the primary business model for the DTC fashion brand in Indonesia?

The primary business model for the DTC fashion brand in Indonesia is to design and market their own brand of casual wear for men, manufactured by a contracted factory.

Outlines

00:00

🤝 Scaling Business Strategies in a High-Earning Room

The paragraph discusses a business meeting with individuals earning between $1 million to $12 million annually. The focus was on scaling their businesses, with a particular interest in a neuropathy clinic model. The speaker explores the potential for growth within niche markets, suggesting strategies like rollups for increased profitability. The conversation delves into the idea of selling the business to different verticals and the importance of cash flow, with an emphasis on the potential for significant revenue growth through strategic business moves.

05:00

💡 Exploring Revenue Retention and Business Expansion

This paragraph delves into the challenges of revenue retention and business expansion. The speaker discusses a business specializing in holiday lighting installations, which faces the issue of no recurring revenue. Ideas are proposed to increase customer retention, such as offering seasonal lighting services and maintenance plans. The conversation also touches on the potential for upselling and the importance of establishing a reliable revenue stream through repeat business.

10:01

🏠 Residential Real Estate Flipping and Market Saturation

The speaker from a residential real estate flipping company in Missouri shares their experience of achieving $15 million in revenue with a profit of $3.7 million. They discuss the constraints of market saturation and the reliance on foreclosures for property acquisition. The paragraph explores potential strategies for expansion, such as moving into new markets or adopting a franchise model, while considering the risks associated with an unstable deal flow due to economic fluctuations.

15:03

🛠 Advertising and Business Model Analysis for Growth

The speaker suggests a strategy for a software company that helps creators make short-arm content more captivating through AI. The focus is on growing from $5 million to $20 million in revenue. The paragraph discusses the importance of learning from successful advertising models and implementing them effectively. It also emphasizes the need for detailed analysis of competitors and improving the business model to increase sales and retention.

20:03

📈 Content Creation Software and Market Penetration

The paragraph features a discussion about a content creation software that simplifies the process of making short videos. The company has grown from $0 to $5 million in revenue in 12 months and aims to reach $20 million in the next year. The conversation highlights the importance of understanding the target market, which includes coaches, school marketers, and agency owners. The speaker also addresses the challenges of high churn rates and the need to identify and cater to the ideal customer base.

25:05

🔍 Prioritizing Revenue and Client Satisfaction in Accounting

This paragraph focuses on a CPA firm that has transitioned to a virtual setup, serving all 50 states. The firm has a revenue of $2.5 million with a net profit of $900,000. The speaker discusses the challenges of prioritizing revenue, maintaining client satisfaction during tax season, and the need to improve the sales process to charge a premium for services. The importance of effective onboarding and communication with clients is emphasized to ensure they perceive the value in the services provided.

30:07

📊 Enhancing Customer Retention and Onboarding in Accounting Services

The speaker provides insights on improving customer retention and refining the onboarding process for an accounting firm. They suggest that frequent and personalized communication with clients can enhance the perception of value and reduce churn. The paragraph also touches on the idea of hiring experts who can provide specialized tax knowledge and contribute to the firm's growth and reputation.

35:07

🛑 Lessons from Allen: Focusing on Product Business Fundamentals

The speaker reflects on the lessons learned from Allen, emphasizing the importance of focusing on the product business fundamentals rather than just marketing and sales. The paragraph discusses the need for a strong product that retains customers and the strategy of understanding and catering to the most valuable customers. The conversation also highlights the importance of saying no to less profitable opportunities in order to focus on growth and customer retention.

40:10

👕 DTC Fashion Brand Expansion and Brand Identity

The final paragraph features a DTC fashion brand from Indonesia that is considering expanding its product line. The company is currently focused on men's casual wear and is exploring the idea of adding women's or sportswear lines. The speaker advises on the importance of building a strong brand identity and understanding the brand's target market before expanding. They also discuss the potential for high growth and profitability by focusing on a specific niche within the retail market.

Keywords

💡Neuropathy

Neuropathy refers to a medical condition characterized by nerve damage, often leading to pain, numbness, or tingling. In the video's context, it is a specialized area of medical focus for certain doctors, and a niche market for a business model discussed in the transcript. The business has successfully engaged with a significant portion of these doctors, indicating a targeted approach to a specific medical niche.

💡Scaling Business

Scaling a business involves strategies to grow a company in size, revenue, or influence. The video discusses various business models and their potential for scaling, including the idea of reaching a larger market or diversifying services to increase revenue streams. The concept is central to the discussion as different business owners share their models and seek advice on expansion.

💡Niche Market

A niche market is a subset of the market that caters to a specific segment with specialized needs or interests. The transcript mentions a business that operates within the niche market of neuropathy treatments, highlighting the potential for growth within a specialized area. The term is used to emphasize the importance of focusing on a specific segment to build a strong customer base.

💡Revenue Retention

Revenue retention refers to the ability of a business to maintain its revenue over time, often by retaining customers and selling additional products or services. The transcript discusses the challenges of revenue retention in various businesses, such as the idea of reoccurring or reliable revenue through seasonal campaigns or upgrades to existing services.

💡CAC (Customer Acquisition Cost)

Customer Acquisition Cost (CAC) is the cost associated with convincing a customer to buy a product/service. It is a critical metric in assessing the efficiency of marketing and sales efforts. In the transcript, CAC is mentioned as a key factor in evaluating the profitability of a business model, with a low CAC being ideal for maximizing profits.

💡LTV (Lifetime Value)

Lifetime Value (LTV) is the total worth of a customer to a business over the entire duration of their relationship. It is used to assess how much a business can spend on acquiring a customer and still make a profit. The transcript references LTV in the context of evaluating the profitability of customer relationships and the importance of maintaining a high LTV to ensure business sustainability.

💡Rollup

A rollup refers to the consolidation of similar businesses, often in the same industry, to create a larger entity. In the video, the concept of a rollup is discussed as a potential growth strategy for businesses operating in niche markets, where combining operations can lead to increased efficiency, bargaining power, and ultimately, a higher valuation.

💡Affiliate Marketing

Affiliate marketing is a performance-based marketing strategy where businesses reward affiliates for each customer brought in by the affiliate's marketing efforts. The transcript mentions affiliate marketing as one of the channels through which a business has grown, highlighting its effectiveness in driving traffic and sales.

💡Churn Rate

Churn rate measures the percentage of customers who discontinue a subscription or stop purchasing from a business over a given period. The transcript discusses the high churn rate in certain markets, indicating the challenge of retaining customers and the need for strategies to improve customer loyalty and retention.

💡SaaS (Software as a Service)

Software as a Service (SaaS) is a software licensing and delivery model in which software is provided on a subscription basis over the internet. The transcript mentions a SaaS company, emphasizing the importance of product quality and customer retention in the SaaS business model, as well as the challenges of scaling such a business.

💡Brand Identity

Brand identity refers to the visual and textual elements that form the public image of a company or product. The transcript discusses the importance of establishing a strong brand identity, suggesting that a unique and recognizable brand can increase customer loyalty and open opportunities for business growth and higher profit margins.

Highlights

The room consists of individuals making between $1 million to $12 million per year, discussing business scaling strategies.

A model for neuropathy clinics is discussed, highlighting a niche market with significant growth potential.

The concept of a 'roll-up' strategy for niche businesses is introduced, aiming for market consolidation and increased value.

A discussion on revenue retention and customer acquisition strategies for a permanent holiday lighting business.

Insights on the importance of upselling and creating reoccurring revenue streams for service-based businesses.

A residential real estate flipping company's strategy for market dominance and expansion considerations.

The dilemma of pushing further in the current market versus pivoting the business model for a CPA firm.

The value of improving sales processes and customer communication for increasing client retention in accounting firms.

A software company's growth from $0 to $5 million in 12 months, focusing on AI-driven short-form content creation.

The challenge of customer churn and strategies for identifying and serving the ideal customer base better.

A DTC fashion brand's considerations for expanding into new product lines like women's and sportswear.

The importance of building a strong brand identity to increase conversion rates and customer loyalty.

A framework for analyzing successful brands and identifying key strategies for business growth and scalability.

The potential for a men's wear company to become a massive brand without diversifying into other demographics.

The necessity of understanding one's brand identity and the market positioning for effective business growth.

Strategies for identifying skill deficiencies and opportunities for improvement in business operations.

The discussion on the importance of endorsements and brand ambassadors in building a recognizable retail brand.

Transcripts

everybody in this room is making between

$1 million per year and $12 million per

year and we just talked for the last 60

Minutes on how to scale their business

enjoy all right so you got neuropathy um

you're doing 5 million year what's the

model uh done for you scheduling okay Le

okay is it local neuropathy stuff yeah

so diabetic dinners and all that jazz

dinners and yeah familiar with the model

okay um so then what's the what's the

what's the big play uh our

we're we're niched pretty well like I

think we're probably the biggest in our

Niche um it's a smaller group meaning

like there's maybe 2,000 doctors that do

neuropathy

specifically um so and we have 160 of

them so it's not we're still there's

still huge potential for us to I think

we get 300 or 500 or th000 maybe I don't

know what's the Ang go for you

um I'm I'm just cash okay yeah yeah no I

I asked because it's like is it to build

it to sell it is it to have yeah I mean

I think selling would be cool it has to

it have to go to different verticals I

mean I'm like I'm way too risky on the

checklist oh not necessarily I mean cuz

the thing is is like the the ultimate

version of the model that you have is

like you've got 160 out of like 2,000

neuropathy clinics right so you've got

like pretty decent you know you got

whatever that is 8% um of that like

pseudo of like niche of a niche of a in

Market but those guys make how much

these these guys make a year like um uh

between a million and 5 million right

and so this is where this gets like way

more interesting in my opinion so it's

like you've got 320 million year I'm

just using an average right per year

that you're driving in revenue and it's

like man I'm making five I'm like this

sucks right of

that you're like how can I get more of

that um and so

the thing is is like I think the the

ultimate version for like the the quote

info and agency space that I know those

are different things but fundamentally

they serve Niche Niche avatars that are

B2B um the ultimate version of those

businesses is

rollups of the the customers you serve

because if you think about what like a

rollup does I don't how familiar you are

with it but like you get everyone on the

same marketing you get everyone on the

same price points you get everyone on

the same packages you get basically you

consolidate what everyone's operations

are and that's what the majority of

super Niche agencies and kind of in info

Consulting whatever you want to call it

do with businesses so they do all the

heavy work of integration for what a

rollup would do and then they just say

like okay I'll stop there I just won't

like actually push it over the edge and

monetize the whole thing um and so like

most of the Physicians that I know hate

being Physicians they do it purely to

make money and want to be out of it as

soon as possible and so like selling

them on the idea that like okay your

practice does you whatever 2 and a half

million a year of Topline and whatever 1

million in profit uh that's awesome and

then you have your you know taxes that

you're taking home 600k year after that

like that's great but what if and on

your own this thing could maybe sell for

I don't know 3 million bucks maybe like

maybe if you're really really you know

we're being really generous but if you

were part of a group of Physicians that

were a neuropathy you know thing

Nationwide uh we could probably sell for

like your thing could probably sell for

10 million and so all I'm asking for is

a you know 20 to 30% slice of that but

times

160 and so obviously of the 160 you

wouldn't do with all of them I mean if

you did that would be a monster deal but

like if you could get like 10 or 20 of

them to roll together because they all

probably do have enough like enough

profit together to be meaningful so it's

like if you get the roll up to be like1

to $20 million in terms of profit that

would be a meaningful exit that would be

probably like a 100 to $200 million exit

and you have 20 to 30% of that but then

after that point you're now the guy who

did that and so then your whole

reputation changes your Dynamic changes

around pricing you're a long-term stick

all of that kind of stuff changes

because it's like oh I'm the guy that

can get you to hear and that's also the

like get rich know if you don't have to

do this again which is a much more

compelling offer can I ask you a side

question you guys uh

when you switch to licensing so I

remember I know o OG flying around and

then more less OG they were flying

around for you and then more recent them

doing it for for themselves right and I

gave them the ads that we test yeah

right so the the transition for you from

doing it for them to doing it to then

doing it themselves and you being a

coach does that I would never use that

word but yeah yeah does that work do you

think that that looking back would you

would you have done it that exact same

way would you have switched to the

licensing model and like and is that

what you're calling licensing joke I

mean because like we had ads that we

would test every month and then we would

just let everybody else use them and

tons of people tried to use them that

weren't are because they would copy the

gyms that we had ads and they'd like I'd

have ads gyms using my face to run ads

for their gym it happened all the time

so um would I do the model we had again

yes the reason that we didn't do done

for you was two things one is or like

the reason do it yourself for your

avatar doesn't work is that they make

too much money yeah a gym owner the

value of learning the skill exceeds

their current skill it makes more sense

for somebody who makes $35,000 a year to

learn how to Market and sell than

somebody who makes a million dollar here

to learn how to Market and sell they've

already leveled out of that in terms of

like because they can pay somebody less

than they make to do this for them

whereas the gym owner can't it makes

sense for them to learn that skill

and then from the reason I didn't do a

rollup is because group based service uh

there's zero there's zero market for it

no one wants to buy them if I had been

in a market where people were buying for

like for sure I would be I would that

would have been the model I would do

beautiful yeah out of respect for I'm

going to rock and roll does that make

sense sweet yeah so we do permanent

holiday lighting that's R off a

Smartphone um on homes and businesses um

my question I guess would be or I guess

our constraints we have no Revenue

retention um and so we've dabbled with

you know maybe doing like a a

maintenance plan you know where we

upsell people things like that um or you

know having paid subscriptions in our

app but so who's your customer most of

the time uh it's kind of a it's a

healthy split between like elderly and

then like people want to keep up with

the

Jes okay and so the light so tell me

more about like tell me more a little

bit more about the product is have a

better understanding of it yeah so

basically um we install an aluminum

track system into their existing soft

and it's got LEDs and so you can do any

holiday game day accent lighting it's

all right that is that like the Philips

hu type type deal I don't want to like

oversimplify what you're saying I just

want to make sure I understand it it's

kind of like that it's much bigger

cooler what's the average ticket uh

about 5,000 okay how do you get

customers um through Facebook and I

guess met ads but ads you didn't paid

ads in your local yeah okay got it how

many locations just one okay one

location what are margins

um we're about

60% depends on the season um so you make

you make a million bucks you keep 600 no

well we checked about 51 okay great

you're doing half awesome what's

CAC um 300 300 bucks for 5,000 LTV

that's great okay so um so a couple

things so if you want to get Revenue

retention um you want to measure how

long youve been in business so I've been

with the company for a year okay about

two years first year was just you know

vetting products out and stuff got it

but do you own it yeah okay got it okay

you said been with the company so I was

like I don't know what that means I've

been with the acquisition. comom as well

um um okay so uh so again we're thinking

about this from a revenue retention

perspective um one is is there so you

install this thing for the lighting um

what else do those people want like

is there anything else you can add on

top of it because like you have to

Keeping Up With the Jones I'm sure that

during certain Seasons they want to do

other razzled Dazzle things and so like

you can you can assemble and then

disassemble things multiple times a year

uh for seasons for Super Bowls for

things like that I don't know if that's

too different from the type of lighting

that you currently do but like it's not

too different now I get people asking

all the time if we'll do their trees or

if we'll do you know other stuff that's

not permanent yeah so I would see the

impermanent lighting as like you run two

to three seasonal campaigns a year so

I'll bet you Easter would be one if

you're in Utah I'm sure that'll be big

Christmas will obviously be big in Utah

um and then you know pick your third

date maybe maybe Halloween's not as big

in Utah um I don't know I'm just I'm

just messing around um but even if you

had you know one or two cracks at the

Apple um cracks at the Apple whatever

bites of the Apple uh every year on top

of that that keeps you top of mind and

then like when you go there you're like

hey we also do it like we'll do standard

double check is everything working okay

with the lights it gives you UPS

opportunities but you still like

generate other revenue and then when

they want to replace it's like hey did I

tell you about the new lights cuz these

ones are old now the new ones are oh my

God let me tell you let me show this

thing on my phone I did for your

neighbor Susan down the road hers looks

sick didn't know if you're interested in

that um so it's like those become UPS

opportunities and instead of saying like

it's um recurring it becomes reoccurring

so it's slightly different so like

Coca-Cola has no recurring basically no

recurring members uh member like

memberships but we buy Coca-Cola

products all the time so we have

reoccurring it's reliable Revenue it's

just not on a membership or a

subscription and so basically all you'd

have to demonstrate to make the the the

company a lot more valuable is Simply

Having the data to track that we sell a

customer for lights and we sell one out

of two another thing every year whether

that's an

upgrade a a maintenance fix or it's

lights that we do for Seasons like if we

can just show that half the people

continue to buy something from US every

year that's still

makes it a very valuable business does

that make sense that would be it so my

name is Cameron uh we do Residential

real estate flipping in the state of

Missouri uh we did 15 million Revenue

last year for

3.7 um gross before overhead so 2.5

after you take into account our team 15

meaning like the how much the houses

were when you sold them and then the

three we sold $15 million yeah it was

like house sale price the profit on each

project was 3.7 which is it helps us

tell how well we're doing on the

projects and then you take out our team

and you end up with 2.5 like evida I

guess sure um I was trying to think of

the constraint all all week you know uh

zero Revenue retention got highlighted

in the in the thing but for us I think

it's going to be that I would we've kind

of captured the market we can capture

which for what we do is a driving radius

like we've I would say dominated Within

4 hours of where we're at which is like

you drive 4 hours to a house to evaluate

it and 4 hours back your day is gone um

so we're kind of at a push or pivot

moment of like do

we we do no advertising it's 95%

foreclosures and then like a few word of

mouth so do we pivot would you say

to the rest of Missouri like almost

franchise out like get four little like

find other big cities and and try to get

the rest of Missouri there's probably

like four quadrants or would you go go

into marketing cuz I know I mean doing

95% foreclosures it's like we don't

control our income of properties

whatsoever and we kind of have like that

that one funnel and like if we're clo

like if the economy gets good then you

have no deal flow kind of exactly and

constant through Co foreclosing was

literally illegal in Missouri and we

made 2.7 that year so somehow we made it

happen like you said it's just a lot

freaking harder but there's ways um so I

don't know if it's a push or a pivot I

would say that's our main con there's

things we can improve on but that's like

the one that keeps us up at night right

now let me just say what's the

goal we have a mission statement and

it's to uh make sure that all houses

within our reach are at their highest

and best value because we don't see a

house falling off the market as a good

thing that just makes other real estate

more expensive um I I know the goal is

not necessarily to ever sell so it would

probably be to expand I guess okay so

so you know path one is you just go to

another city and I wouldn't necessarily

call it franchising you just expand it's

just like opening another lighting thing

like that's you just that's just the

normal way of things like if you just

get better and better at it you open

another location um I see that as

another another set of skills for you

which I think will be valuable um and

you could and this time like if it's

basically there's no point I mean you

could go in Missouri but you could also

do any other Market that you'd want

because if you're if you're going past 4

hours of driving now you're in like

flying range in which case pick the

right City you know like pick whatever

City you want to go to um you'll also go

into a city that's going to probably

have competitors you know what I mean

which I see is a good thing um because

it means like the more competitors there

are the more of a market there is um as

long as you're you know number one then

more for you um and so that's that's

high I that's at least my perceptive

perception like whenever people like oh

there's a ton of competition in my

market I'm like that's awesome it means

there's tons of buyers

um and so just side note there but um

cuz the alternative of this is like

literally changing the entirety of your

business exactly which I I would I would

like you're doing well with it how long

you been doing this uh I've been doing

it for eight years yeah dude you've

already paid down like all the ignorance

Deb so like you're at this point you're

like you're like here on your curve like

you're like right here and so it's like

well don't don't jump back down to like

here again right don't go there um like

there's an ultimate version of this and

so what's the who's the biggest uh

wholesaler in the nation the biggest

Wholesale in the nation uh is it We Buy

Ugly Houses probably I mean there's a

lot of me okay so what do they do that

you don't

do um a lot of advertising a ton of

advertising pay pay for click uh mailers

is huge Billboards we do none of that so

I'll

bet that there's still way more deals

even probably even Within your current

market I think so and so I would

probably if I were you so either either

you have to replicate what you're

currently doing in a new market but you

have some of the risks that you've

already brought up which is like you're

all inbound based on foreclosures you

have some of these other things you're

not like the income is not necessarily

reliable um I would definitely learn the

advertising stuff for your own business

cuz like whenever there's an ultimate

version of the business that I'm

currently in it's like they already did

it and so now all I have to do is do it

better than them and whoever bu that

business is already gone probably and so

it's just a bunch of Suits who don't

know how this business works and so it's

just right for us to just murder them

I'm just being I'm just being super

honest like this is how I see it um and

so I think I would just like go 100% try

and pants them um and do PBC like and

like also do some of the stuff they're

probably not doing well they probably

aren't doing social well they probably

aren't running like not as well as they

could obviously their Billboards I know

the Billboards that they run um and but

I'll bet you they've got great sales

training and I'll bet you've got they've

got Great Floors of people and kind of

infrastructure in place and so I would

look at that I would look at their

overarching model as well because I'll

bet you they get a piece on the back end

as well like because they probably

vertically integrated as much as they

possibly could um within the business

that that they actually make more on

every deal than you do so they can spend

more on every deal like they can pay

more like so they have they have ways to

beat other people in all these different

markets cuz they're National right

exactly and so step one would be start

advertising more because then they'll

just immediately make more within your

current market like that would just that

might double your business if you just

did that um and then number two is I

would analyze the living hell out of

them like that's what I would do and

then think about like okay this is this

is the future version of my business one

can I replicate it two is there anything

I can do to make it better 100% I

definitely wouldn't change my business

for sure I think that I think your

advice is dead on it's just what I'm

afraid to do cuz I don't know how to do

it it's like I'll just go do in

different cities but I guess I got to

learn new things darn

right yeah maybe we can help um first of

all sorry my English is not my first

language try my what uh so I run a

software company called sub magic and

basically what we do is we have creators

make more captivating shortarm content

uh through

Ai and so the issue we are solving is

that everybody wants to create sh

content today thanks to people like you

um and they just struggle with creating

niceform content that Captivate the

attention of people and um so we decided

to create a tool that help us solve this

issue in three clicks for everybody so

we grew in the last 12 months from 0 to

5 million American Revenue we plan to

reach 20 million by year and

um we believe that in the world there is

two people that help us

drive all the traffic that we have it's

you and people like IMI because you are

most people who just push people to

create content you tell to tell to every

people like you should create content to

drive traffic to your business and so

they com to us and say I want to do the

same that

Alex and so we help them create the

captions the bws the zoom everything

into C and so today um in my goal to

reach 20 million in anual Revenue next

year um we identifi that there is a

something for a lot of our users that

comes from school uh so they have a

commune in school uh and they want to

drive members in their community so they

create content to drive members but they

are using some magic for create nice

content to drive traffic to school

community and so yeah my question was

like what should I do

with I mean in my mind like create a

partnership with people like you would

be the nicest and the most smart deal I

can do ever to my

business so yeah what's the

constraint what do you mean by the

constraint so you said you're going from

5 to 20 so why bought sorry so you said

you're at 5 million and you're going to

hit 20 next year yeah so how are you

getting customers right now that's weird

so how are you getting customers right

now we have four different channel uh

50% of our Revenue coming from World of

M all right uh then 20% from aat we have

7 aat today that share the world share

the message of the world and the rest is

mainly SEO in creation what's the price

uh so it's between 20 bucks a month to

150 bucks a month and our aage basket is

140 bucks a month 40 BS per user got it

got it what are margins uh we do 45% of

so you're still making money great

that's awesome super good okay um so I

so this is me looking out for you

why bother like why bother like let me

partner with Alex like why bother when

you could just go from 5 to 20 next year

anyways uh because we believe we can go

faster to this goal with people like you

and we can reach much more higher than

20 minut we think we can be become like

the all in one platform for short F

content creation from IDs to editing to

publishing your content and I think

there is a place to take in this world

where everybody's wants to be content

today and there is no software to do

that got it so walk me through the pro

this is just me understanding the

product so let's say so we've got this

right so let's just use this as a case

study so we record this say it's 60

Minutes um now what happens so I've got

this raw footage now what so now you

need to take the you need to take the

instruct and create some short from

content of this content right so if you

are basic in Edition you're going to see

an editor and ask him like Hey this is M

footage can you please take some moments

that are cool in the videos and doing

that it will take you like probably 40

bucks per short from content spends like

hours on it and you really don't get the

result that you like so otherwise you

use the software you put your footage

and selection exactly like which part

you can use it super easily you create

the caption on it in two clicks you

create the animation you need like after

effects and then you publish your

content it's it's just just makes sense

for every people want speak on

and so how does it identify where the

moments are and how to like structure

those moments this is me I just this is

me seeking for curiosity what do you

mean by moments moments so like we have

60 Minutes how does it know this is

interesting this is valuable and then

like there's a hook so I'm going to I'm

going to like he said the hook at the

end let's put that at the beginning

that's a very good question uh so

everything is based on TR strips so we

analyze what you say things to Ai and we

understand that you are talking about

giving business adice oh that's cool

okay who who talk about food and

everything is based on a and we

understand like we try to create sh

basic finding the B the answer and we

build that and then if it's not what

you're looking for you can just remove

it and change it to find the Bas and we

rate that out of 100 to see like which

shelf F should be the best part so

basically we do the work if need

to so it's like there's three Clips in

here this one will do the best based on

our guess this is the second best is the

third best exactly okay super

interesting yeah I mean I think it makes

sense that if you're if you're trying to

scale then like at this point I mean I'm

guessing that if you've grown to this

this level based on Word of Mouth and

Affiliates like you have growth channels

that are established and people are I'm

guessing happy with the product what's

churn churn is pretty high okay churn is

all weakness puns we have churn 15% a

month yeah so it's Prett high but it's

Lal because we target to M Market

everybody needs to create content this

room content and they just start and

then it's difficult to keep on going

everybody is not like like somebody and

sure difficult you know so they need

to yeah they still have to make it

before they like they still have to do

the 60 Minute recording which they don't

do right I'm just I'm I'm agreeing with

you yeah I think part of the of the

business we target like a massive Market

all over the world we people from other

60 countries we do that in 60 languages

so it's a mass

um CH is part of the game we just need

to understand who our ICB our ICB is

coaches people who use schools marketing

agency owner and those people are not

Shing because they have a Rel they make

money they make money is the business

that's why you can go chuny yeah

interesting also the thing is is other

markets there's like Network marketers

which is a massive space there's

Realtors which is a huge space there's

local business owners like there's a lot

of other yeah

Fitness coach all the people who are

good in selling something in video they

make great CH yeah really interesting um

I'm going to move on to the next person

but um yeah I mean fundamentally I think

you're I think you're doing the right

stuff like I don't like I always like to

see if I can reduce turn increase

activation like we're doing stuff like

that at school every day even though we

have phenomenal metrics we still want to

do better and sometimes like a handful

of tweaks even C and the funnel like

lots of things that gets into the

Tactical level but I think strategy wise

you're dead on to be honest with you I

mean it's a good Market you obviously

have a good product I mean if it's grown

to that point from Word of Mouth 50%

then like you have a good product um

you're growing more than your turn is so

and yes I agree with you that in a

consumer B like Spotify has high turn

Shopify has high turn when you're in the

consumer business which you are um so I

mean that that that that tracks and last

question what do you think about like

helping School users getting more

capting videos like just because you

teach them how to content

right um I think all of my content

teaches them how how to make content

more than school does yeah yeah I mean

you see what I mean uhhuh no I

understand yeah I mean I I I tell

everybody to use all the different

methods so it's like use Outreach like

go Reach Out DM do cold call cold email

cold whatever like door knock that's

oneon-one then you've got one to many

inbound which is content then you've got

making ads you've got Affiliates which

is what you use there's referrals like I

like people to use or at least

understand at least one or two different

ways of getting customers um but I think

you've got good stuff man very

interesting what's up Alex um so I'm

Joel I have a CPA firm uh based out of

Baker School California but during Co we

went virtual so now we serve all 50

states um I have a lot of constraints uh

but I think you know my questions would

be you know how do you prioritize what's

revenue revenue is last year was 2.5

this year's probably going to be about

three awesome uh margins last year

900,000 this year net was was probably

going to be about 1

one um awesome I don't know that's good

but I mean you're running 30% margins on

a on a I mean yeah expensive labor um so

I mean I guess my question is but it's a

super reliable business it's a valuable

business like accounting firms get

rolled up left and right there's tons of

buyer activity there like it's very

people don't turn out of their

accountants I mean it's like it's it's

very sticky there's High LTV the issue

with accounting is most of the times um

there's no one in there who knows how to

Market and sell that's usually the issue

with accounting accounting businesses

it's like all word of mouth and no one

knows how to like Market yeah and then

the other issue is is getting good

accountants because there's so much

Demand right for decent accountants and

so but like the accounting firms that I

know of like all have like anybody who

comes here with accounting firm almost

always makes money they're all doing

well um so there's there's big demand

yeah for sure so what's the issue um I

guess one would be

operations um just making sure our

clients are satisfied like we have a

short period of time to do all of our

work mostly during tax season right so

we get clients have certain expectations

get your tax returns down and we at

capacity but then you know obviously

they don't want to pay a premium

sometimes so I think we need to improve

our sales process to make sure that we

can charge premium to give them that

value that they're expecting so do you

mostly have one time a year customers or

no it's usually we charge quarterly okay

uh for quity tax planning uhhuh is it

more businesses or more individuals

businesses oh great okay well that's I

mean even better yeah so yeah our I mean

our minimum fee right now is 19950 a

quarter okay uh what's your annual stick

annual stick what do you mean by that uh

what's your Revenue turn annually it's

not as good as I liked it to be I

probably say we keep maybe 70% okay you

probably want yeah you want to get over

80 I mean for for accounting firms like

you probably can do a little better yeah

so I think it has to do with just also

making sure the clients see the value

because after we give them like certain

Tax Strategies they're kind of like oh I

kind of learned this now I can find a

cheaper accountant sometimes so even

though there is that stickiness you know

they especially some business owners

will be like oh well I kind of s the

value what you guys did last I I I'm not

sure I buy that I think what someone

says on the exit versus why they

actually cancel aren't necessarily the

same thing um cuz like I already got the

value is like literally what everyone

says when they want to leave anything

and it's just cuz like they just want to

leave um because I mean I what you want

is I mean fundamentally from an

accountant you want somebody who will

get you to pay as few tax as humanly

possible and keep you out of jail and

that's pretty much that's pretty much

the that's the task yeah and um make it

as little work for you as humanly

possible for that to occur right and so

I mean just me having been a consumer of

many different accounting firms and

accountants and employees who are you

know who did that stuff for us um I

don't I don't buy the like we taught

them the two or three tricks yeah um

also I bet you a bunch of your business

owners aren't even like close to it some

of them are bigger and like aren't

they're just like yeah just pay the bill

I don't I don't really care just make

sure it's right so I would bet that you

probably have bad

onboarding okay so basically the expect

the basically the Delta between what

they're sold and then what their

experience is in the first handful of

days and weeks going into it and then

the communication Cadence between touch

bases they probably see limited value

there and so I think um I would give you

the same kind of like if I were to like

buy 100% of your business tomorrow I

would audit the sales process to handoff

like I would bet you there's a massive

amount of opportunity there in terms of

like how can we take more notes on every

customer because the I get pissed off if

I feel like I'm talking to somebody they

don't know much about my business and

I'm paying them $8,000 you to rub my

taxes right immediately I'd be like oh

yeah [ __ ] you like I know you can't be

looking at like I can just do back of

napkin brain math of like if you barely

know who I am you definitely don't know

how to save me money on my taxes right I

we do have an onboarding process but

there might be a disconnect between the

sales well we already know there's a

disconnect cuz you said there

was so this is me this is me trying to

help so I would go really deep on the

onboarding process which is like how can

I really tighten this up both terms of

the personalization of the communication

and how can I speed up the number of

times you communicate with them because

you want frequent communication as long

as like it's pushed so it's not me

asking for [ __ ] you know because then I

[ __ ] hate you right like if you ask

me for St but if it's like hey uh just

letting you know we ran this today this

thing is moving forward everything's

good nothing for you just keep you in

the loop and then two days later hey we

also ran this thing um XYZ is done and

it's moving forward to the next step I'd

be like oh [ __ ] they're doing stuff and

so like I tell this to every but no one

does it and so this is me telling you

and hopefully you will do it but like if

you do a hundred things you want to let

them know every time you're doing one of

those things on their behalf and they're

like dude these guys are working for me

all the time like this guy works his ass

off and then someone else is like well

they're doing it for 8,000 I'll do it

for six and they're you're like oh no

these guys work their asses off for me

like I'm sure I'm safe like no one

actually knows it's kind of like when

the guy comes to your your house like

especially the nicer the neighborhood

you live in you know this like he's like

think I could do the like Li in for 10

grand I'm like dude you think I got this

house because I let people rip me off I

was like give me the r price and then

it's like all right I can do it for four

and you're like great you know or

whatever and so the thing is is like no

one really knows they just they just gut

call on the fact that like my

communication with this company has been

crappy the expectations are poor and so

if this is my external experience I'll

bet you they're not crossing their tees

and dotting their eyes on my taxes mhm

that would be my guess right and so I

think if you get all of the other stuff

tight they just guess that your internal

stuff's as tight which I hope it is um

and I'll bet you that'll keep the stick

honestly and of course accountants don't

know how to deal with customers so I bet

you probably need to train them again on

that communication Cadence so it's

basically way more personalized way more

frequent uh communication and then

probably very tight training on how to

have touchpoint calls with the customers

right or clients whatever for

sure that would be like the number one

thing I would do I wouldn't even do

anything else I mean do you think it's

scalable too cuz I mean my biggest yes

accounting firms are scalable ey KPMG

like yes they're scalable price yeah PWC

and what do you think those are publicly

trading accounting firms yes they're

scalable what do you think about like

one of the thing you mentioned I think

yes yesterday was like you

know the size of the brain the biggest

brain is as big as you know so I I'm

starting to now hire people that are

smarter than me in other areas like uh

but when it comes to accounting I'm

still like the smartest person in the

room yeah there's smarter accountants I

don't say there's a slight I just say

like look at the guys I keep like

they're some smart dudes yeah I mean I

kind of want to hire like cuz I'm more

of a CEO than I am a tax nerd yeah so I

rather hire like yeah go get a tax nerd

yeah yeah you go recruit somebody from

one of those companies who's like I need

somebody who worked at Enron who wasn't

a bad guy you know what I mean and

figure out like who can do like the real

the crazy stuff who knows the tax like

who reads tax law for fun yeah like

that's who you need cuz there are dudes

who do who are like oh curled up on I

like I know a buddy of mine who

literally goes to the pool with the tax

law his kids are in the pool and he's

reading it and I'm like what is wrong

with you he's like I just love this

stuff and I was like I'm glad someone

does you know like and he's like look at

this hole he's like oh I'm going to

crush this one and he's like he's like

this is legal he's like he just like

loves it's like for him is like treasure

hunting so like you need somebody who's

like that and if that's not you then you

should have somebody who is that way

yeah for sure so yes I agree and I think

you should do that okay I say step one

though fix all the outside stuff step

two go get that guy okay cuz that stuff

will make you more money today with what

you already have then do the other thing

right so newer SAS company we help

inbound sales teams improve their or

eliminate no shows improve their sales

often self-efficiency

um I really think the most helpful thing

for me would be just you running through

uh really the major learning lessons you

had from Allen in terms of red plag my

my background is high tiet education and

for state so I think I'm kind of coming

into it you know do you have a technical

co-founder I okay how good is he I spent

18 months fting so he's pretty good well

that could mean that it just took you

really long to find somebody who's bad

so

like um two years from now you're like I

should have know yeah um so it really

comes down to like has this person built

a sofware company before yeah Okay cool

so fundamentally like the entire game's

different than the high ticket game

right like it's all about Revenue

retention it's all about word of mouth

it's it's a product business there's

actually a podcast I just made I don't

even know when it's coming out about

this but like what business are you

really in and so like when I got into

Allen I thought I was in the marketing

and sales business because that was the

business that I came from but you're

actually in the product business so it

has to be it has to be basically like

taking to its natural extreme if people

don't stick with it it doesn't

matter so basically marketing and doing

everything else like it's a

right and so like unless that's right

nothing else matters basically and so

Marketing sales in the front end

literally only serves the purpose of

making the product better until there's

a point where it has what I would

consider passive growth where it grows

on its own and then you gas the living

hell out of it and then that's what

makes gazillion dollar companies like if

you want low turn you either have to go

up market and find the people who don't

turn out or you have to help create the

people who don't

turn so like the shop ifies and the

Spotify a lot of IFI here um there's

going to be there's cohort CH which

you're probably familiar with if you're

co-founders in this so like you're going

to have periods of time where it's like

okay the first six months we turn out

[ __ ] 80% of our customers but the 20%

after that point our retention curve is

flat and so you just have to figure out

once you get to that data cohort you're

like okay what do these people look like

and then you readjust the messaging

readjust uh the marketing so you can get

more and more of those people so you get

a bigger bigger slice of them and funly

that Loop is what will you more or less

focus on um and then I think about it

from when I'm trying to reverse engineer

the customer Avatar it's like you have

psychographics like what do they believe

you have demographics what do they look

like where are they from you have

Geographics are where where are they um

and then you have kind of activities

which is like what did they do so if I'm

trying to reverse engineer what the

people who spend the most money with me

look like I look through those those

lenses who are they where are they from

what do they believe what do they do

and then I try and say in my ads hey I'm

looking for people who believe these

things I look in the places that they're

at um and then once they're in I try and

get them to do the same things that the

people who were successful who look like

them who talk like them who believe like

them did in order to be successful so

like in the beginning you just do a ton

of marketing to get Traction in the door

and that's literally just so you can

like see if people like it see where

they're turning out see get basically

you just want feedback and then once you

find what people are liking what they're

successful with obviously iterate from a

product perspective on the road map to

do more of the stuff that core in terms

of value but then the marketing side it

Loops back and then that's what informs

who you're picking on the front end who

you're marketing to right so you're

being much more specific on and to only

call the people that s yes yes and the

hard part is that your sales team won't

want to do it and you will not want to

say no to money yeah but I I understand

a comp pers for the

next cool but that's I mean like if you

look at Vista um I I became friendly

acquaintances with their their head of

pricing and packaging and he was just

like if you do you know who vist is so

they're out of aost in hundred billion

dollar private Equity they're they'd be

like the fifth biggest company like

whatever they're massive um and they

only their private Equity they and they

buy software companies and they triple

them in in in three years which is their

goal and they flip them and so um the

founder I can't remember his name now I

feel bad um is uh any anyways Rich did

I'll just put that way um point being I

was talking to the head of packaging and

he said you want to know our whole

secret and I was like what man he's like

we just know our our acquired

companies's customers better than they

do I was like what do you mean he's like

so we go into the data room and we look

at all the customers they have and we

look at what channels they came from we

look at who they are how they act all

that stuff he's like then we turn off

all the marketing that's not those

customers and we crank the living hell

out of the stuff that is that and we do

nothing else and the company

triples obviously it's more than that

but fundamentally like big picture

strategy that's what they do we get more

of the people who spend the most

money but people just aren't disciplined

and that's why people just stay poor

because then they they try and serve too

many people too many different avatars

they can't say no to money today so they

don't get the big money

tomorrow cool appreciate than you hi I'm

AR Alex uh DTC fion brand Commerce

Indonesia from Indonesia doing $1

million a year IIT that $3 million been

doing this n years

awesome uh thanks for making it out

thank you how do I know when to expand

new product

line what are you selling now what do

you sell now t-shirt shirt pants Jeans

jacket but mostly man is it what is it

white label or a brand say it again is

it your brand or is it my your brand I

manufactur it I I'm not manufactur I con

to the other Factory in Indonesia and

then I only own the office and the

warehouse is it custom do you design it

or you just slap your leg you design it

knock off no that's fine I mean like hey

I'm I'm I'm not I don't dud

competition's competition um as long as

you're not hacking their databases or

anything like that's I mean that's the

nature of the retail business I

understand it um okay

so the question that you have is how do

how do you scale it or basically how do

you add more to expand new product line

let's say Woman's let's say sports well

because I'm doing casual only let's say

formal um I don't think at 10 million

you need to like like you can do so much

more even within that within that that

demographic like if you're just mostly

men's wear like there's tons of massive

Men's Wear companies can I add to that

yeah add yeah I'm thinking about that

also because I haven't achieved 200 or

$300 million yet but isn't it isn't it

will make my brand to men were l in life

so I'm not building enough Foundation to

capture the woman's

letter in$ 300 $500

million 500 million a month that would

be a lot

um it's a tough call man I'll be honest

with you because like on one level I

mean if you're like I want to build the

next Nike then yeah you're going to have

to sell to everybody but even Nike

doesn't sell

suits right just like like there's so

like there's so many people who buy so

much clothing um and I mean I think so

right now I think you're a little bit of

of like a brand identity spot like you

obviously know how to convert I'm

guessing are you running ads yeah right

so you know like you know you know that

game and you run really good margins I'm

sure on the on the products based on and

and you can you know how to run run ads

at scale and

so what I think right now is you have to

figure out who who you want to become as

a brand so if you like men's wear then

like you can be I think you can build a

massive men's Weare company just being I

mean just being really transparent with

you like you can um build a massive

menare company also like lemon doesn't

do I guess they have like pants that are

nice but like they're all sportsare so

like I mean l is a terrible example now

because they're just gone to crap but

like um like if you look at these I like

like I just as a framework for everybody

like I look at what's the biggest

version of the business that's currently

here like what did they do to get there

what does their business model look like

like and then how many steps between

where I'm at and where they are do I

need to take and like what lessons or

what what skills am I deficient in and

then it's like okay well then those

skill deficiencies become the

opportunity like fundamentally that's it

and what their brand looks like and how

they monetize like are they vertically

integrated or like if I was getting into

the into the energy drink business I'd

be like okay well Red Bull has

outsourced literally everything besides

marketing so I guess that might be the

most important thing for a consumer

packaged good that's you know rtds ready

to drink and distribution so it's like

they have massive brand plays massive

distribution you know they have their

recipe underlock and key and everything

else is is so like basically I would

look at the brand like is there a brand

that you want to emulate uh basically

I'm I'm what problem are with uh am I

solving is just a billion dollar exit

building consulting firm and then that

is a LD magnet to PE built media and

then control the Indonesia okay so my

goal is just I'll a billion liquid cast

okay well let's take so right now we

sell clothes so let's a couple I get it

I appreciate that so I want to I want to

increase the like that you get there so

I think like you can make this thing

very valuable without doing all of the

other stuff that you were talking about

so I think like you absolutely can do

this and then think okay why can't I get

this to $100 million a year selling

men's Weare like why can't I and I think

that way then it's like okay is there a

is there a brand person who can endorse

this like if look at the biggest retail

Brands they have big

endorsers who stand next to the product

that increases conversion increases the

premium you can charge and so instead of

knocking off Zara you just become a

brand and I think honestly I think

that's the gap for you like you're

obviously very good at the Arbitrage of

media to to clicks and whatnot but like

I think you need to go from that to

building a brand and then that's what

will make it sellable so this is what I

like that's the tldr of our conversation

is that's what makes your thing valuable

is you need to build a brand