WEBVTT 1 00:00:00.000 --> 00:00:03.520 I'm Alex Ramose and I'm an investor and I own Acquisition.com. It's a big portfolio of companies. 2 00:00:03.520 --> 00:00:06.800 It makes me a moment of all of the work I need in my life. I had a hundred business owners who 3 00:00:06.800 --> 00:00:10.560 flocked to our headquarters to scale their companies. And so they asked me questions for an hour. 4 00:00:10.560 --> 00:00:15.680 I try to do my very best to make the solutions as tactical as seemingly possible so that you can 5 00:00:15.680 --> 00:00:19.840 watching from home immediately use them in your business. First off, I have to say thank you 6 00:00:19.840 --> 00:00:24.880 for taking me out for dinner last time, that conversation that we had literally changed my life 7 00:00:24.880 --> 00:00:30.560 and trying to do this. So yeah, appreciate that. And it's not a story of what happened. 8 00:00:31.200 --> 00:00:36.560 For sure. We had an event that was scheduled. I had to get moved. The memo got passed down and 9 00:00:36.560 --> 00:00:44.000 everyone found out except for one sales guy and he sold six people into an event that didn't exist. 10 00:00:44.000 --> 00:00:49.680 On like a random Monday, we had six people showing up, came from Israel and he was like, hey I'm here 11 00:00:49.680 --> 00:00:54.800 for the workshop. And I was like, this looks awesome for us. I'm really happy. I'm really happy 12 00:00:54.800 --> 00:00:59.120 that we're in this situation. We've always tried to come from the perspective of like when you 13 00:00:59.120 --> 00:01:03.440 have something that gets messed up, like you can't just refund somebody because they're still net 14 00:01:03.440 --> 00:01:07.360 negative. He still flew from Israel. If I said, hey, my bad, here's the money back, he still 15 00:01:07.360 --> 00:01:13.680 went like screw this guy. And so we had the team spend the day with the six and then we took 16 00:01:13.680 --> 00:01:20.240 them out to dinner. And I bring that up just because it was a great example of something that 17 00:01:20.240 --> 00:01:24.160 took me too long to learn was that like you can't just make it right. You have to make it more 18 00:01:24.160 --> 00:01:29.920 than right in order to actually make it right. That was obviously a super unfortunate situation. 19 00:01:29.920 --> 00:01:35.040 And every business, if you have humans, you make mistakes. And so that was a mistake that we had 20 00:01:35.040 --> 00:01:39.680 made. I remember hearing the stat from Disney, which is that it takes 37 magical moments to 21 00:01:39.680 --> 00:01:45.600 overcome one tragic moment. And so the moral of that statistic is not let's do 37 magic moments. 22 00:01:45.600 --> 00:01:51.200 It's avoid the tragic moments if at all possible. But if you do find yourself in a tragic situation, 23 00:01:51.200 --> 00:01:56.080 here's an interesting thing that Layla taught me, which is that believe it or not, the people that 24 00:01:56.080 --> 00:02:02.160 you wrong and then super compensate to make it super right become your biggest ambassadors. 25 00:02:02.800 --> 00:02:11.520 He flew back out and he gave such a heartfelt story that it took somebody who was negative. 26 00:02:11.520 --> 00:02:16.560 And I think from at least what it sounded like, he was super positive towards us. And I think that 27 00:02:16.560 --> 00:02:21.120 that's in some ways as terrible as it is when you do have one of those tragic moments, 28 00:02:21.120 --> 00:02:24.640 just see it as an opportunity to flip someone from a hater into an ambassador. 29 00:02:25.520 --> 00:02:29.200 Rather than being like, oh, we got to give these people refunds. It's like, no, we actually get 30 00:02:29.200 --> 00:02:33.520 to build our reputation and decide what kind of company we want to be. We're we're stuck at right 31 00:02:33.520 --> 00:02:42.560 now. So we're selling the back end off for 195 a month for semi private or four months for 595. 32 00:02:42.560 --> 00:02:49.280 Our churn for both of those is 50%. So weighted, it's 30% churn. And the reason why we've got such 33 00:02:49.280 --> 00:02:56.800 terrible churn is nobody shows up like 7% of our student body actually shows up to the calls and 34 00:02:56.800 --> 00:03:01.360 actually gets the value from the thing they purchase. What's the onboarding look like? 35 00:03:01.920 --> 00:03:07.680 So we have the closer, get them to see the calendar of we have eight sessions a week that they 36 00:03:07.680 --> 00:03:12.400 can join. So they show them the calendar. They say, okay, which one of these do you think you can come 37 00:03:12.400 --> 00:03:17.920 to? And then they get them to say, okay, this one. And then the closer says, okay, I'm going to tell 38 00:03:17.920 --> 00:03:22.640 Jenny, it's the coach on that call. She's going to be expecting you. There's two, there's two kind 39 00:03:22.800 --> 00:03:27.200 of like different angles to attack this. One is the kind of like logistic side, which I'm going to 40 00:03:27.200 --> 00:03:30.320 cover first because it's easy and just process stuff. And the other is kind of like the bigger, 41 00:03:30.320 --> 00:03:35.360 more and more stuff, which is like, how do I make our thing easier? Easier and more enjoyable 42 00:03:35.360 --> 00:03:41.680 for people to kind of experience. On the logistic side, I'm sure that you're on my email list. 43 00:03:41.680 --> 00:03:45.520 If we had dinner, you'd better be on my email list. By the way, if you got anyone here read the 44 00:03:45.520 --> 00:03:49.440 Mosie Minute? Anyone? I think it's the best, I think it's some of the best stuff to put out. 45 00:03:49.440 --> 00:03:52.560 Anyways, it's really good. I think it's really good. I spend like my Sundays on it. 46 00:03:53.200 --> 00:03:57.600 Anyways, so BAM fam is a way of life. So book a meeting from a meeting, right? And so the sales 47 00:03:57.600 --> 00:04:03.280 guy should obviously book to the onboarding call, right? Or the whatever. I do think that you 48 00:04:03.280 --> 00:04:07.600 probably need to add one onboarding call that's specific to the person, not just have them drop in. 49 00:04:07.600 --> 00:04:11.520 How much do you want this to work? Really bad. Okay, so this is what I would recommend doing. 50 00:04:12.240 --> 00:04:17.360 You'll probably want to do something in the neighborhood of four to six sessions that are one on one. 51 00:04:18.000 --> 00:04:22.080 I'm just being like, now if you need to adjust price in order to do it, fine. But it's four to 52 00:04:22.080 --> 00:04:27.360 six sessions of one on one before they kind of qualify to go into the group setting. And so it's like, 53 00:04:27.360 --> 00:04:32.160 you will personally onboard them so that they have this way better buy in their way. They don't 54 00:04:32.160 --> 00:04:35.600 feel like they're just like in No Man's Land and just getting tossed into the middle of a conversation. 55 00:04:35.600 --> 00:04:41.520 But you kind of like on ramp them. After you have the onboarding, which should be, and you can cut, 56 00:04:41.520 --> 00:04:45.120 I mean, at the very beginning, just do two. You know what I mean? Just to start and then you can 57 00:04:45.120 --> 00:04:51.680 kind of see how it goes. From there, you're basically going to keep bamfamming per session. 58 00:04:51.680 --> 00:04:55.680 So all the people are showing up the last five minutes. I would say, okay, everybody, 59 00:04:55.680 --> 00:04:59.440 let's pull up the calendars. When you guys showing up again, great. And I'll book it with everybody 60 00:04:59.440 --> 00:05:04.240 so that I'm keeping people forward. And you have to back that up with probably the reminder sequence 61 00:05:04.240 --> 00:05:07.920 that they're going to get because it's actually a scheduled session. So they should get automated 62 00:05:07.920 --> 00:05:11.040 reminders and they should probably get a manual reach out from the person who's running the session. 63 00:05:11.040 --> 00:05:15.840 And the people who are supposed to attend at the very least do the automated one. And that would 64 00:05:15.840 --> 00:05:20.880 probably get a huge amount of like that will probably do a lot. And so this is actually believe it 65 00:05:20.880 --> 00:05:24.240 out. This is an onboarding process for a gym. So if you have a large group training, if you take 66 00:05:24.240 --> 00:05:29.200 people and just toss them into the group, it's much harder than having kind of a more dedicated 67 00:05:29.200 --> 00:05:33.040 onboarding experience. The ideal is you do like six one on one sessions to someone. They feel more 68 00:05:33.040 --> 00:05:36.160 comfortable in the gym. They understand people. They understand how to kind of vibe the culture is. 69 00:05:36.160 --> 00:05:40.560 And then they kind of graduate into the group sessions. And so what happens also is that the group 70 00:05:40.560 --> 00:05:44.640 sessions are now on a pedestal. It's like you're not you're not ready for that yet, right? It's like 71 00:05:44.640 --> 00:05:49.200 you got to earn that. And all of a sudden it becomes the prize that they earned. And now they've got 72 00:05:49.200 --> 00:05:52.560 onboards. That makes sense. Can you see how that would work? For sure. Yeah. So this would probably be 73 00:05:52.560 --> 00:05:58.480 that up is like a big head long tail sort of pricing system. And the question that you'd ask if you 74 00:05:58.480 --> 00:06:03.440 want to give an AB close for this is you would say, would you rather train, you know, start your 75 00:06:03.440 --> 00:06:07.360 start your thing in a group or one on one with me. Now it's if you're selling. If it's somebody 76 00:06:07.440 --> 00:06:12.320 also one on one with John. And there are a lot of times they're going to be like, well, I'd rather do 77 00:06:12.320 --> 00:06:16.800 it with John. You're like, great. So this is the price for that. And then you just go for that sale. 78 00:06:16.800 --> 00:06:20.880 If it's not like no worries, we can just start you here. Not a big deal. And then if you want, 79 00:06:20.880 --> 00:06:25.520 if normally you sell six, you can say, you know what? I'm still going to give you one. If you do that 80 00:06:25.520 --> 00:06:28.640 because it's going to be way better for the experience for you. So then it feels like a gift and 81 00:06:28.640 --> 00:06:32.400 doesn't feel like they're like, well, now, well, now I don't want the group thing, right? So just 82 00:06:32.400 --> 00:06:39.600 give them one or two if you sell a six, for example. Does that make sense? So he presented obviously 83 00:06:39.600 --> 00:06:45.440 with a low consumption issue, which then probably translated into low renewal and probably high 84 00:06:45.440 --> 00:06:53.920 chart. And so the issue that typically precedes that is low consumption, right? And so in order to 85 00:06:53.920 --> 00:06:59.200 first get consumption figured out, I like to get attribution in place. And so I don't know what 86 00:06:59.200 --> 00:07:03.280 kind of tracking he had, but I think he said like seven percent or something like that. And so he 87 00:07:03.280 --> 00:07:07.520 had some level of tracking, which allowed him to even take action on the problem. But most times, 88 00:07:07.520 --> 00:07:11.200 when I ask more questions, I'd say nine times that attend the entrepreneur has a problem, 89 00:07:11.200 --> 00:07:16.160 but doesn't collect any data that precedes the problem. And so then the first step is to just go 90 00:07:16.160 --> 00:07:21.440 collect the data. And once you have the data, typically the solutions become obvious. And so a lot 91 00:07:21.440 --> 00:07:27.040 of time is wasted in this space of like trying to ideate and figure out this hypothetical solution 92 00:07:27.120 --> 00:07:30.720 without any data. And you're like, I don't know, is it this or this or this or this that we could do? 93 00:07:30.720 --> 00:07:34.960 It's like, well, you have no data. So you have no idea. And so you just keep circling. And so when 94 00:07:34.960 --> 00:07:39.600 you don't know what to do, get data first. And then it makes the path easy. I sell career coaching 95 00:07:39.600 --> 00:07:44.880 services to interpret executives. So basically we help these people find their next role. So we did 96 00:07:44.880 --> 00:07:50.480 7.2 million in revenue last year, about two million in profit. Amazing. And we know how to grow 97 00:07:50.480 --> 00:07:55.360 B2C. We know that we can do that. But we're really wanting to get B2B going. So these enterprise 98 00:07:55.360 --> 00:07:58.720 level deals are a little bit more, they're a different ballgame, right? Okay. So we're 99 00:07:58.720 --> 00:08:02.720 struggling to get our first B2B deal because they have to be big enough to have the budget. 100 00:08:02.720 --> 00:08:07.120 Why do you want to do B2B? So this entrepreneur is obviously doing well. He's doing 101 00:08:07.120 --> 00:08:12.160 multiple millions of dollars a year. And he's got something that says decent margins. And he said, 102 00:08:12.160 --> 00:08:16.720 in order to scale, he should do B2B. But he was in a consumer based market and consumer markets 103 00:08:16.720 --> 00:08:20.960 are huge. There's way more consumers than there are businesses. So he had a proven product with a 104 00:08:20.960 --> 00:08:25.280 proven acquisition channel and was profitable and was growing. And he was spending three or 105 00:08:25.280 --> 00:08:28.880 five thousand dollars a day. I was like, this is nothing in terms of the amount of scale that's 106 00:08:28.880 --> 00:08:34.080 available for the product that he had. And so when he said he wanted to do this other new thing, 107 00:08:34.080 --> 00:08:39.280 I had an inkling that it was for no actual reason besides he probably encountered some sort of 108 00:08:39.280 --> 00:08:44.560 difficulty that he assumed the new path wouldn't have. And so this is just a classic woman in 109 00:08:44.560 --> 00:08:50.080 the red dress. Why can't you just do more what you're currently doing? We can. We hit like 90 110 00:08:50.640 --> 00:08:53.920 in October and like that was a big like a million a month. Like that was the milestone. 111 00:08:53.920 --> 00:08:58.160 It's like, okay, let's start doing different stuff. I'll tell you what my initial reaction is 112 00:08:58.160 --> 00:09:02.800 which you're already probably guessing, which is like I will exhaust more before I look at anything new. 113 00:09:03.520 --> 00:09:06.640 And so someone would have to make a very strong argument for me why I can't do more about 114 00:09:06.640 --> 00:09:09.760 what I'm already doing. So if I were to like buy your company tomorrow, I'd be like, yeah, 115 00:09:09.760 --> 00:09:13.520 don't worry about that. Just what are you what are you currently doing to get to get customers? 116 00:09:13.520 --> 00:09:16.080 It's Facebook, guys. Okay. So what are you spending a day? 117 00:09:17.040 --> 00:09:21.440 Anywhere from 3,000 to 5,000. Right. I'd be like, okay, so how do we get to 100,000 a day and spend? 118 00:09:22.880 --> 00:09:29.040 A day. Yeah. Like what stops us from getting to 100,000 a day? Okay. And the answer to that question 119 00:09:29.040 --> 00:09:33.920 is the constraint. So what stops you from getting, let's say 10,000 a day. So it's a triple. So like, 120 00:09:33.920 --> 00:09:38.320 what stops you from doing that? We were there in October right around 10,000 a day and then we 121 00:09:38.320 --> 00:09:43.840 had like sales efficiency and stuff like that. Obviously Q4 is not like the best time to have that type 122 00:09:43.840 --> 00:09:48.240 of service. And so really just like making sure that we're back in our front end like sales 123 00:09:48.240 --> 00:09:52.320 called to close very all that gets stuff is like able to profitable. And we have a lot of like 124 00:09:52.320 --> 00:09:56.480 services like one-on-ones that we pair, which is really well. We have a writing team in house that 125 00:09:56.480 --> 00:10:00.640 we pay so that there's those costs. So what would but that those costs are fixed because you'd 126 00:10:00.640 --> 00:10:07.200 have that cost to the B2B. Right. Okay. So what stops us? The problems that exist in the B2C 127 00:10:07.200 --> 00:10:11.360 scenario also exist in the B2B scenario. And so he's like, Hey, I've got I've encountered this 128 00:10:11.360 --> 00:10:15.120 problem. I don't know how to solve. And so my way of solving it is to not solve it and start 129 00:10:15.120 --> 00:10:18.640 something else that will create even more problems in my business. And so when you say it like that, 130 00:10:18.640 --> 00:10:22.560 it sounds ridiculous. But this is a decision making process that or rather a mistake making 131 00:10:22.560 --> 00:10:27.440 process that a lot of people follow. Fundamentally, you want to ask why can't we do more? And the 132 00:10:27.440 --> 00:10:32.880 answer to that question is the constraint. And the only in my opinion proper constraint for deciding 133 00:10:32.880 --> 00:10:37.920 to go after a new avatar is that you run out of the existing avatar. So think about this. Just 134 00:10:38.000 --> 00:10:43.520 have you ever done B2B? Like enterprise. Okay. So the thing is is that they are a higher leverage, 135 00:10:43.520 --> 00:10:48.640 but you're also going to have like 10, 15 touch points. And so the number of deals per guy is going 136 00:10:48.640 --> 00:10:52.080 to go down a lot. There's also going to be multiple stakeholders. They have to get involved on 137 00:10:52.080 --> 00:10:56.080 their side and multiple stakeholders that you're going to introduce on your side. So just in general 138 00:10:56.080 --> 00:11:01.680 for B2B, like enterprise level sales, you increase conversion rate and stick of a customer by 139 00:11:01.680 --> 00:11:08.560 increasing the number of people that are involved in the transaction on both sides. So basically you 140 00:11:08.560 --> 00:11:14.960 want to show, you want to show as have as many of these ties as you can to do enterprise sales. 141 00:11:14.960 --> 00:11:19.040 The lowest risk adjusted return move in any business is to do more of what's already working. 142 00:11:19.680 --> 00:11:24.000 And answer the question, why can't we do more? And so if you have a sales efficiency issue, 143 00:11:24.000 --> 00:11:28.320 then like solve the sales efficiency issue because it's holding you back from tripling. The 144 00:11:28.320 --> 00:11:33.680 things that you brought up are all fixed problems as in their problems on both paths. So to forego 145 00:11:33.680 --> 00:11:38.640 the path you're currently on for a new path that's completely unproven with the same problems that 146 00:11:38.640 --> 00:11:44.000 you know already exist is a much higher risk move than just saying, yeah, why don't we just get to 147 00:11:44.000 --> 00:11:50.000 30 million? Okay. So just focus on maxing out B2C, we're about B2B, so we're like fully confident 148 00:11:50.000 --> 00:11:54.400 B2C, we're doing everything. Well, not even that you're doing everything that you have exhausted the 149 00:11:54.400 --> 00:12:01.680 market of C's. Okay. Right. Like it's so if you want diversity, then I would still, I would rather 150 00:12:01.680 --> 00:12:06.400 you go diversity of channel rather than changing customers. The riskiest thing you can do, it's a new 151 00:12:06.400 --> 00:12:10.560 business. Basically, you're going to have a new offering, a new acquisition, like everything's new. 152 00:12:10.560 --> 00:12:14.960 And so I would rather if you have the itch for new, just get a second channel, but I don't think 153 00:12:14.960 --> 00:12:18.640 you're even close to that. You're at three five thousand a day. I think you can totally spend 154 00:12:19.440 --> 00:12:24.720 50, 100,000 a day for sure, just on that. What will likely be the next thing that gets in your 155 00:12:24.720 --> 00:12:30.400 ways that your row as is going to drop. And so typically that's going to be you're going to need to have 156 00:12:31.600 --> 00:12:38.480 option one, better lead magnet, option two, better creative, option three, superior CRO conversion 157 00:12:38.480 --> 00:12:45.520 optimization, just on the pages, option four, improved sales efficiency, option five, all four, 158 00:12:45.520 --> 00:12:48.640 and then that allows you to scale. And like fundamentally, the difference between companies that 159 00:12:48.640 --> 00:12:52.000 can spend a hundred thousand a day and five thousand a day profitably is how good they are. 160 00:12:52.000 --> 00:12:55.120 It's literally just making all of this pieces better. And that takes time because you're going to 161 00:12:55.120 --> 00:13:00.160 only change one of those at a time and this is why business takes time to grow. I sell bleacher rentals 162 00:13:00.160 --> 00:13:06.720 to festivals and fairs. So we do around four and a half million in revenue and about a million 163 00:13:06.720 --> 00:13:14.960 in profit. What's stopping me is having my leadership team delegate fully, some of the 164 00:13:14.960 --> 00:13:21.920 responsibilities. And I think it has to do with creating processes that are followed by all. 165 00:13:21.920 --> 00:13:27.440 If we need to hire key people and we don't have the processes, then we can't delegate properly. 166 00:13:27.440 --> 00:13:32.400 So how do you train leaders? So this is a good question that I'm going to chunk up one level, 167 00:13:32.400 --> 00:13:37.680 because I think it'll be valuable in general. Which is that fundamentally when we're hiring anyone, 168 00:13:37.680 --> 00:13:43.760 we look for the smallest skill deficiency possible. Fundamentally, you've got traits as people call 169 00:13:43.760 --> 00:13:52.320 them. And then you've got skills. Now, based on Alex's worldview, this is not a thing. 170 00:13:52.960 --> 00:14:00.720 It's just that. A trait is just a series of skills, right? And so when you hire a CFO, for example, 171 00:14:00.720 --> 00:14:06.960 you're going to try and hire for the smallest skill deficiency. And so if the CFO is a dick, 172 00:14:06.960 --> 00:14:10.880 for example, but they're exceptional at all these other things, then you're like maybe I can teach 173 00:14:10.880 --> 00:14:15.360 them to be kind in these ways. Now, that'd be a big, and it's a lot of skills to just have some, 174 00:14:15.360 --> 00:14:20.880 like, go from not kind to kind, right? A lot of subskills underneath of that. And so if it's two days 175 00:14:20.880 --> 00:14:25.680 to train sales and two months to train kindness, take this person who's kind and then train them on 176 00:14:25.680 --> 00:14:30.480 sales. Later on, sometimes you have people who you're like, okay, this person's a little different 177 00:14:30.480 --> 00:14:36.240 than our vibe. They're not going to be, you know, oil and water. But they have this massive skill set 178 00:14:36.320 --> 00:14:41.680 that we can use and this tiny deficiency that is around this stuff that we can be transparent 179 00:14:41.680 --> 00:14:44.880 with them up front that they need to fix. I've seen this happen like again and again and again, 180 00:14:44.880 --> 00:14:50.640 where a manager or a leader talks to somebody else and says, hey, and then uses amorphous terminology, 181 00:14:50.640 --> 00:14:54.960 that's very hard to pin down to basically say, change your behavior and they're like, but how? 182 00:14:54.960 --> 00:14:58.960 And they're like, change it. And you're like, okay, I don't know what that means. And so the reason 183 00:14:58.960 --> 00:15:03.280 I'm so obsessive about operationalizing terms, like what is patience, what is courage, what is, 184 00:15:03.280 --> 00:15:06.320 you know, what is humility, like what are these, what are these terms actually mean in terms of 185 00:15:06.320 --> 00:15:09.840 behaviors? Like patience is figuring out something to do in the meantime. Like if you do, figure out 186 00:15:09.840 --> 00:15:14.000 something to do in the meantime, you're by default being patient, right? And so it's telling someone 187 00:15:14.000 --> 00:15:19.600 what they actually have to do, not who they have to be. Stop being lazy is very hard for someone to 188 00:15:19.600 --> 00:15:23.280 solve. It's like, I keep telling her not to be lazy and she keeps being lazy. But you have to break 189 00:15:23.280 --> 00:15:29.600 the term down into what behaviors you describe as lazy. Because when you talk to, you know, your 190 00:15:29.600 --> 00:15:33.280 partner, you talk to somebody else, you say, hey, Sarah's kind of lazy. Have you noticed that? 191 00:15:33.280 --> 00:15:38.400 There are things that she did that you observed that you described the label lazy too. And so you have 192 00:15:38.400 --> 00:15:43.840 to think more deeply like, what did they do to deserve the title? And it might be like they don't 193 00:15:43.840 --> 00:15:48.960 respond quickly to Slack messages. These are things that if you said, hey, Susan, instead of insulting 194 00:15:48.960 --> 00:15:54.240 her and saying, hey, you're lazy, instead we'd say, hey, you don't respond to Slack messages quickly 195 00:15:54.240 --> 00:15:58.400 enough. You aren't responding, you know, after hours and our hours keep going until 9 p.m. and you're 196 00:15:58.400 --> 00:16:03.200 not responding until after, you know, after five. And so for this week, I want you to focus just 197 00:16:03.200 --> 00:16:06.720 on responding to Slack messages. So let's turn on notifications. Let's turn it on both of your 198 00:16:06.720 --> 00:16:10.480 phones and turn it on your computer so that you can see it. Is there anything else that's going to 199 00:16:10.480 --> 00:16:14.080 get in the way of you responding quickly? Now, when we ask that question, we might find out that 200 00:16:14.960 --> 00:16:18.880 Sarah's overwhelmed because she's doing somebody else's job when we laid off and we haven't 201 00:16:18.880 --> 00:16:24.240 backfilled. It's like, okay, well, now we have context. But until we get to there, we can't 202 00:16:24.240 --> 00:16:32.720 appropriately measure Sarah's inherent value or traits rather behaviors to give her a label. 203 00:16:32.720 --> 00:16:38.080 So to your question, how do you train leaders? I think that attracting good leaders, so one of 204 00:16:38.080 --> 00:16:42.720 its recruiting, right? So Chick-fil-A's head of people said this. She said, a lot of people are 205 00:16:42.720 --> 00:16:49.200 trying to fix process when they really lost the championship in the draft. And so a lot of people 206 00:16:49.200 --> 00:16:52.720 are trying to figure out what playbook they should be using with a team that's never going to win. 207 00:16:53.440 --> 00:16:58.640 So the big framework that we use for training in general is document, demonstrate, duplicate. 208 00:17:01.920 --> 00:17:07.440 And so first, you figure out exactly what the checklist is. And I like checklist more than quote SOPs. 209 00:17:07.440 --> 00:17:12.080 That's a personal preference. And you want to be able to break it down into behaviors. And I think 210 00:17:12.080 --> 00:17:15.280 this is where a lot of training goes wrong. I think most companies aren't very good at training. 211 00:17:15.280 --> 00:17:18.480 They're just, they basically hire a bunch of people, see who's got the skill and then fire the 212 00:17:18.480 --> 00:17:23.360 rest. But if you do get good at training, it's like, how do you train kindness? Well, you say, 213 00:17:23.360 --> 00:17:27.200 okay, well, people who are kind when they come on a phone, they smile, right? And they know 214 00:17:27.200 --> 00:17:31.760 their head when people are listening. And they repeat back what someone says. And they raise their 215 00:17:31.760 --> 00:17:37.040 voice when they walk into a room, right? And so if you boil it down to some of the behaviors, then 216 00:17:37.920 --> 00:17:44.080 the onus is on us as leaders to be more specific with what we tell our subordinates to do. And I 217 00:17:44.080 --> 00:17:48.240 think a lot of times if you're struggling to train some of these key traits with leaders, it's 218 00:17:48.240 --> 00:17:52.080 because you're not being specific enough about what you want them to change. And so it's like, 219 00:17:52.080 --> 00:17:56.000 you're just not getting it. It's like, well, no one can do anything with that. And so it's like, 220 00:17:56.000 --> 00:18:00.320 you have to, and this is where the work comes in from the top down. We're like, okay, when you do 221 00:18:00.320 --> 00:18:03.120 this, and so the easiest way to bucket this, 222 00:18:03.360 --> 00:18:17.360 that's a key. There we go. Is Sarah, I need you to stop doing this. I need you to start doing this, 223 00:18:17.360 --> 00:18:21.840 and I need you to keep doing this. And so just being more granular about what behavior you want them 224 00:18:21.840 --> 00:18:25.680 to stop or what behavior they're not doing that they need to begin or combination. And so 225 00:18:26.560 --> 00:18:30.240 giving someone the feedback of, I need you to do this instead of this has been some of the 226 00:18:30.240 --> 00:18:33.600 most effective way that I've been able to change people's behavior. And it's about around the 227 00:18:33.600 --> 00:18:37.600 specificity. And so if your leaders aren't doing what you want them to do, document demonstrate 228 00:18:37.600 --> 00:18:41.920 duplicate. This is the step process. Let me show you how I do it. Now you do it in front of me. 229 00:18:42.800 --> 00:18:46.160 And this is what we're going to have you stop doing. You're going to now do this instead, 230 00:18:46.160 --> 00:18:51.280 and keep doing the other stuff that's good. I sell professional book publishing services to 231 00:18:51.280 --> 00:18:55.920 entrepreneurs and executives. We do a million dollars in revenue. I'd like to be at 3.2 million 232 00:18:55.920 --> 00:19:05.280 revenue. I just turned 32. This is the best explanation for a revenue goal I've ever had. 233 00:19:05.280 --> 00:19:09.120 That's great. What's stopping me is I'm at the stage where I need to make more money before 234 00:19:09.120 --> 00:19:14.640 thinking about other things. And the challenge I'm facing is a lot of things have worked for us 235 00:19:14.640 --> 00:19:19.600 up to this point, but I need to know what to, I need clarity around what to do more of. 236 00:19:19.600 --> 00:19:22.000 So what's the input? So what's the thing that drives the business? 237 00:19:22.960 --> 00:19:26.000 The biggest thing that drives the business right now is referrals. 238 00:19:26.000 --> 00:19:30.720 Okay. The second biggest thing is related to organic in the form of speaking, 239 00:19:30.720 --> 00:19:36.720 social media, and guest coaching. And then we have a split between cold email outbound and Facebook 240 00:19:36.720 --> 00:19:41.440 ads. You're doing all the acquisition channels. All of them. And we didn't even need to do all of 241 00:19:41.440 --> 00:19:45.040 them. And try them on. They all seem to work enough. What's the greatest percentage of your 242 00:19:45.040 --> 00:19:48.480 customers? What channel they come from? The greatest percentage of the customers be after referrals 243 00:19:48.480 --> 00:19:54.400 would be organic. Okay. And that's, you know, you put that both in organic content, but also 244 00:19:54.400 --> 00:19:59.200 like speaking and things like that. Okay. How many speaking things are you doing on like a monthly 245 00:19:59.200 --> 00:20:07.520 basis? It's about one per year last year. Okay. So I have an idea. So I would ask the question like, 246 00:20:08.640 --> 00:20:12.560 I think I might have told this in a short, but a really close friend of mine, he took over 247 00:20:13.120 --> 00:20:18.400 real, which is a publicly traded real estate brokerage. Their primary way of getting more 248 00:20:18.400 --> 00:20:26.320 agents is him speaking at real estate events. And so in Q4, he did 66 speeches. And in 24 months, 249 00:20:26.320 --> 00:20:31.360 he took from 200 million to 1.2 billion in revenue. And so he's doing, you know, 270 plus events per 250 00:20:31.360 --> 00:20:38.400 year in person. We were having dinner and he was like, no one gets it. He was like, no one 251 00:20:38.400 --> 00:20:45.200 understands how much more we do than them. And I'm only telling the story not to make, hopefully 252 00:20:45.200 --> 00:20:51.120 it comes across the right way. Because I think you just, like, if, and I'm guessing if that event 253 00:20:51.120 --> 00:20:56.160 generated business for you? Yeah, I mean, every time I speak, we make a significant amount. 254 00:20:56.160 --> 00:21:00.400 Well, yeah. So I'd be like, let's, like, how do we go from, you know, one a year to one a week 255 00:21:01.120 --> 00:21:05.920 and start there? Just like target 50 next year. And so he rightly identified that he simply 256 00:21:06.000 --> 00:21:09.520 needed to do more. The next natural question I was going to be asking is like, what are all the ways 257 00:21:09.520 --> 00:21:13.920 are you customers? Which he obviously answered. And so then it was like, okay, the next follow-up 258 00:21:13.920 --> 00:21:17.600 question I'm thinking is, where do we have the most leverage? So either that's going to be which 259 00:21:17.600 --> 00:21:21.040 thing is taking you the least amount of time that makes you most amount of money? Or which one is 260 00:21:21.040 --> 00:21:23.440 the thing that cost you the least amount of money that makes you most amount of money? So you'd 261 00:21:23.440 --> 00:21:28.080 say the time leverage or it's money leverage or both. Now, the fact that he said, I always make a 262 00:21:28.080 --> 00:21:32.560 bunch of money after I speak. I was like, okay, that's a positive indicator. And as soon as he said, 263 00:21:32.560 --> 00:21:36.240 I only do one speaking even in a year. I was like, I don't need to know anymore. Like, if you're 264 00:21:36.240 --> 00:21:41.040 getting, if that's a significant amount of revenue and it's one day, once a year, like, I see that 265 00:21:41.040 --> 00:21:46.400 and think, okay, well, we could 50x the business if we just did 50 of those. And so then the constraint 266 00:21:46.400 --> 00:21:49.920 then becomes, okay, how do I get booked on these stages? But then that's, you follow the same core 267 00:21:49.920 --> 00:21:53.680 four. You do the outreach, you post-con, and then you reach out to people to find out. And sometimes 268 00:21:53.680 --> 00:21:57.120 you have to pay to be on the stages. Sometimes you get a booth and then they'll give you a speaking slot. 269 00:21:57.120 --> 00:22:01.760 There's always ways to get on if you need to. We have quiet companies in the UK and 270 00:22:03.120 --> 00:22:07.360 come revenue across the portfolios, about 35 million. The metric isn't so much 271 00:22:07.360 --> 00:22:12.560 when I get to a revenue metric. I want to try and create a minimum of around 50 million enterprise 272 00:22:12.560 --> 00:22:20.880 value. Do you own all of them out, right? No. So it's varied. I think the problem is, do we focus 273 00:22:20.880 --> 00:22:25.840 on building out the double down on the companies we already have, both the EBITDA that way, 274 00:22:25.920 --> 00:22:29.280 or do we keep acquiring and building the EBITDA through acquisition? How many do you have? 275 00:22:30.000 --> 00:22:35.520 14. 14. Are they similar? No. That's the thing. So if we used to go through acquisition, 276 00:22:35.520 --> 00:22:41.120 we'd have to try and create synergy down the line. Yeah. So you're in a very classic kind of 277 00:22:41.920 --> 00:22:46.720 PE nomans land. So you have more companies than most funds would ever have. 278 00:22:49.760 --> 00:22:55.600 And you didn't pursue a synergistic strategy in order to accommodate volume. And so 279 00:22:55.600 --> 00:22:59.120 on one extreme, you have like constellation, which you're probably familiar with in Canada. 280 00:22:59.120 --> 00:23:03.280 It's like they only buy vertically integrated SaaS and they go sub three million and they just do 281 00:23:03.280 --> 00:23:07.520 100 deals a year, right? And they just know their playbook. On the other side, you have traditional 282 00:23:07.520 --> 00:23:11.280 PE that would have a variety of different businesses. They buy, you know, detailed shop and then 283 00:23:11.280 --> 00:23:15.360 a supplement company and then whatever. But they only have six to eight companies in a fund. 284 00:23:15.360 --> 00:23:22.320 And they have a decent, you know, decent whole Co team to add value to the company. And so if I were 285 00:23:22.320 --> 00:23:27.600 in your position, first thing I would do is probably ask myself, who do I want to be when I grow up? 286 00:23:28.240 --> 00:23:31.360 In terms of what you want the actual day to day business to be because you can hit 50 on either 287 00:23:31.360 --> 00:23:36.800 of those paths, right? And so it's which of these do I feel more like more me? Like do I feel like I 288 00:23:36.800 --> 00:23:41.680 do have a couple of these businesses that you're like, I really understand these ones? And if you 289 00:23:41.680 --> 00:23:46.240 don't feel that way, then I would probably look at these and go 80, 20 and say, okay, what's the 20% 290 00:23:46.240 --> 00:23:52.640 that's driving 80% of the enterprise value? And trim. Honestly, I would just like go completely 291 00:23:52.640 --> 00:23:57.440 passive on those ones or just return equity or do some sort of deal so I could get my attention back 292 00:23:57.440 --> 00:24:02.240 and then double down on the ones that you are good at. So this gentleman who had a had a PE firm 293 00:24:03.280 --> 00:24:08.320 suffered from a classic issue that I covered in the offers book, which is that he had not committed 294 00:24:08.320 --> 00:24:15.840 to the niche. So this is page 38 of the book. And I tell the story where I try not to niche slap 295 00:24:15.840 --> 00:24:22.800 people, which is that they need to pick one niche ideally. Now, this gentleman had basically 296 00:24:22.800 --> 00:24:28.080 two paths that he could follow. He could follow a more concentrated path of just a few companies 297 00:24:28.080 --> 00:24:33.280 that could be disparate or different in nature. But because of a team of five-ish people, he could 298 00:24:33.280 --> 00:24:39.040 probably preside over those call it six companies that are the the better ones of the portfolio, 299 00:24:39.040 --> 00:24:43.920 double down on those inject capital, bring, you know, recruit higher higher level talent, 300 00:24:43.920 --> 00:24:49.760 maybe improve the strategy, and then grow the companies. The alternative path was that he 301 00:24:49.760 --> 00:24:55.920 just gets really vertical, meaning he tries to get as many companies that are of the same type 302 00:24:56.960 --> 00:25:02.480 so that he can see, trying to use fancy words, but synergies between the companies so that they 303 00:25:02.480 --> 00:25:07.200 altogether kind of the sum of the parts is greater than the whole. Because you can centralize some 304 00:25:07.200 --> 00:25:11.920 costs, which adds profit to all of them. You can have cross business learning. So if you have 305 00:25:11.920 --> 00:25:16.080 10 HVAC companies started by 10 different founders, all of them are going to have a few things they do 306 00:25:16.080 --> 00:25:21.360 well. So you take the best practices from each of them individually, and then you implement them 307 00:25:21.360 --> 00:25:26.400 across all of them. And so you get this cost savings of the bottom line by centralizing costs, 308 00:25:26.400 --> 00:25:31.760 and then you distribute out best practices. And so that is a typical kind of private equity play, 309 00:25:31.760 --> 00:25:35.760 which is a roll-up play, where you can buy 10 things for a million dollars and sell all 10 310 00:25:35.760 --> 00:25:40.240 together for 50 million. And so he was obviously shooting for a 50 million dollar exit. And the crazy 311 00:25:40.240 --> 00:25:43.600 thing is, and this is true of entrepreneurship, is there's a lot of ways up the mountain. 312 00:25:43.600 --> 00:25:47.200 The bigger the goal is, the fewer the ways up the mountain there are. So you want to get to a 313 00:25:47.200 --> 00:25:52.240 trillion dollar company. Well, you have to, you're going to have to do some crazy new technology 314 00:25:52.240 --> 00:25:57.360 that probably doesn't exist in order for you to get there. If you want to have a 50 million dollar 315 00:25:57.360 --> 00:26:02.240 exit, you can do that with just about any business by just getting it to a decent amount of size. 316 00:26:02.240 --> 00:26:06.640 And yes, that includes chains of brick and mortar, that includes online business. Like you can, 317 00:26:06.640 --> 00:26:10.160 you can absolutely do it in any niche, no matter how small it is. 318 00:26:10.160 --> 00:26:16.640 Hi, so I want the wellness, so basically physical therapy, personal training, 35 to 45-year-old 319 00:26:16.640 --> 00:26:22.960 athletes is the avatar. And we do about a little over 3 million. The biggest thing that's stopping 320 00:26:22.960 --> 00:26:30.560 me, you have a huge shortage in practitioners. To give context, there's about 16,000 open positions. 321 00:26:30.560 --> 00:26:40.560 Your supply constraint. Yes. So I need more producers to produce. So I decided to kind of pivot 322 00:26:40.560 --> 00:26:44.240 and say, well, if I can't find the people, I'm going to increase price. 323 00:26:44.240 --> 00:26:47.760 Well, I'm glad you did that as the thing you decided to do. So that's fine. 324 00:26:48.720 --> 00:26:53.760 Like I started another business on e-commerce. Yeah, yeah. So to start teaching people to, 325 00:26:53.760 --> 00:27:00.080 yeah, yeah. So that went well to the tune of we didn't lose revenue. 326 00:27:00.080 --> 00:27:08.080 Okay. But I'm at that point where now do I go all in on continuing to increase price and move 327 00:27:08.080 --> 00:27:14.640 more into almost like a concierge membership model? Or do I go all in and just try to crush and 328 00:27:14.640 --> 00:27:18.480 find the people and do what nobody else is possibly doing? Yeah. Do you have any issues on getting 329 00:27:18.480 --> 00:27:27.600 customers? No, we have more demand than okay. Yeah. So have you heard my story about 330 00:27:27.600 --> 00:27:33.280 buddy money who's in the cleaning business? All right. I'll tell you. So former gym owner 331 00:27:34.160 --> 00:27:36.960 crushed it with gym launch and then decided he started making enough money that he started 332 00:27:36.960 --> 00:27:42.320 investing in real estate as all entrepreneurs do. And then after he was crushing in real estate, 333 00:27:42.320 --> 00:27:45.120 he was like, you know, I should probably start a cleaning company because he started doing 334 00:27:45.120 --> 00:27:48.320 Airbnb's out of his real estate. He's like, this is costing me a ton of money. I should 335 00:27:48.320 --> 00:27:52.880 vertically integrate. And so he started the cleaning company to clean his Airbnb's. And he's 336 00:27:52.880 --> 00:27:56.160 like, well, now that I have the cleaning company, I might as well start selling other customers don't 337 00:27:56.160 --> 00:28:01.600 leave money on the table, right? And so you can see how this spindles, right? The moral of the story 338 00:28:01.600 --> 00:28:06.080 though is that I called him up and he was telling me it's like, dude, it's crazy. He's like selling 339 00:28:06.080 --> 00:28:11.280 cleaning customers. He's like, CAC is like 25 bucks. It's insane. Every, like, it's so easy to get 340 00:28:11.280 --> 00:28:15.440 customers. And I was like, oh, you should scale this to the moon. He's like, yeah, you know, 341 00:28:15.440 --> 00:28:21.280 it's kind of hard to get English speaking mates who don't take stuff from people and do a good job 342 00:28:21.280 --> 00:28:27.680 and show up on time and are willing to work for $15 an hour. And I was like, okay. So the nice 343 00:28:27.680 --> 00:28:30.880 thing that you have is you have a supply-constrained business that he was used to fitness, which is 344 00:28:30.880 --> 00:28:35.360 typically demand constraint. So it's just it's hard to get people who want to show up to the gym, 345 00:28:35.360 --> 00:28:38.960 right? Not hard to get people to say they want somebody else to clean their house. 346 00:28:39.920 --> 00:28:43.600 And so basically the reframe that I gave him is what I'll give you, which is 347 00:28:44.400 --> 00:28:48.640 you're not actually in the physical therapy business. You're in the recruiting physical 348 00:28:48.640 --> 00:28:54.480 therapists business. The whole paradigm that I would have around this is what is the career path 349 00:28:54.480 --> 00:28:59.120 look like for the physical therapist so that I can make this really enticing. On top of that, 350 00:28:59.760 --> 00:29:03.680 I have to still think through the same, you saw the same core four, right? You've got 351 00:29:04.000 --> 00:29:08.720 you've got warm outreach, you've got cold outreach, you've got paid ads, and then you've got 352 00:29:08.720 --> 00:29:15.200 I should know these are at the book. Okay, organic content, right? So these are the four things 353 00:29:15.200 --> 00:29:18.480 that you can do, right? And then you've got headhunters, right, which is basically recruiters. 354 00:29:19.680 --> 00:29:24.960 And you have word of mouth from your existing, oops, word of mouth from your existing staff. And so 355 00:29:24.960 --> 00:29:29.040 these are the ways that you can get physical therapists. And so we have to approach this 356 00:29:29.040 --> 00:29:34.880 the same way we approach getting customers. They are just now the customer. And so maybe running 357 00:29:34.880 --> 00:29:40.560 in deed ads is probably not the way that you're going to get them. But I'll bet you that outreach 358 00:29:40.560 --> 00:29:46.960 will work exceptionally well to get therapists. And I would probably bet that if you had a really 359 00:29:46.960 --> 00:29:52.640 good referral incentive over time that would compound. Now small, not as much. You'll probably need 360 00:29:52.640 --> 00:29:56.800 to do this to start. As you get bigger though, there's going to be enough of a base where a few 361 00:29:56.800 --> 00:30:01.680 percentage every month of referrals is material. And so let me just put this in math for you so that 362 00:30:01.680 --> 00:30:07.840 you can say this will motivate you to do it. How much do you make in gross profit off of a physical 363 00:30:07.840 --> 00:30:17.520 therapist per year on average? About 350. Okay. So if I told you that I could add $350,000 in 364 00:30:17.520 --> 00:30:21.440 gross profit per year to your business, how much would you be willing to pay for that in the first 365 00:30:21.440 --> 00:30:27.280 year? Quite a lot. Right. And so giving someone $500 for a referral, not that motivating. 366 00:30:27.280 --> 00:30:30.480 If you said I'll give you 20 grand for a referral, I'll bet you'll get them to move. 367 00:30:32.400 --> 00:30:37.600 Most businesses are either supply constraint or demand constraint. Now if you have a business that's 368 00:30:37.600 --> 00:30:40.240 both, then it's like you don't have customers, you don't have employees, like that's a tough place 369 00:30:40.240 --> 00:30:46.640 to make. Most of the time it's one or the other. And what's interesting is that entrepreneurs will 370 00:30:46.640 --> 00:30:52.160 often try and solve, basically like not solve the real problem. And this was kind of exactly what 371 00:30:52.160 --> 00:30:57.360 she was presenting with. She was like, should I do this other thing or should I like, should I 372 00:30:57.360 --> 00:31:01.040 change my model altogether? But the crazy thing is it's like her model was doing great. She was 373 00:31:01.040 --> 00:31:05.920 making good margins. She had, she's doing good revenue out of two locations. It's like, why are we 374 00:31:05.920 --> 00:31:09.440 going to break the model? Like the constraint of the businesses that you just don't know how to 375 00:31:09.440 --> 00:31:15.360 recruit. So let's just solve that problem. Because her other path of like just raising prices, 376 00:31:15.360 --> 00:31:20.160 which to be fair, I'm all in favor of, at some point it's like you can't raise the prices anymore, 377 00:31:20.160 --> 00:31:24.080 like you're becoming like a luxury business. And it's just like you're changing all the dynamics 378 00:31:24.080 --> 00:31:29.760 of the business. But her business worked already. And so for me the lowest risk thing to do is not 379 00:31:29.760 --> 00:31:34.160 change the business model, but just figure out the problem the business and solve it. And for her, 380 00:31:34.160 --> 00:31:38.000 the biggest problem was I can't get people. But I don't think she had quantified how much she 381 00:31:38.000 --> 00:31:44.160 should be willing to invest in getting more talent. And I think this is wildly underrated. It's like 382 00:31:44.160 --> 00:31:48.720 think about it from a return on profit. I just only did a gross profit, right? It's $350,000 per 383 00:31:48.720 --> 00:31:52.080 employee. So I'm like, why would you not pay, I mean like just being broke, why would you not pay 384 00:31:52.080 --> 00:31:57.600 $50,000 or $100,000? Right? If you know that if I, people are happy to put, you know, $100,000 385 00:31:57.600 --> 00:32:01.760 in the stock market and get 10% back and make $10,000. But in their businesses, they're hesitant to 386 00:32:01.760 --> 00:32:07.360 give a commission of $10,000 for $300,000 or thing, right? And so if you're like, well, what if 387 00:32:07.360 --> 00:32:10.720 that doesn't work out, then push it out where there's the contingencies that you're happy to do it. 388 00:32:10.720 --> 00:32:14.640 And if you want, keep raising the price until you get people to prefer. Like with enough incentive, 389 00:32:14.640 --> 00:32:19.040 you can move the world. And so speaking of this physical therapy brick and mortar business, 390 00:32:19.040 --> 00:32:23.760 I did a brick and mortar breakdown of five locations, a car practice that had done 391 00:32:23.760 --> 00:32:28.720 through M&A on how to accelerate the growth of the business and it's super tactical and it works 392 00:32:28.720 --> 00:32:32.720 whether you have a single location or you're even virtual, a lot of the taxes would carry over 393 00:32:32.720 --> 00:32:34.960 to any business to help it grow. Enjoy.