The Step-by-Step Plan to Go From $0 to $10M+

0:00most people have maybe five years of dedicated focused obsessive energy to put into their business so how do we what do we do in five years in order to have a $100 million business um you're familiar with the triple triple double double so for the no so okay oh yeah I'm Canadian a triple triple double double to me sounds like you want coffee with three creams and three it's a Tim Horton Tim Horton I'm like yeah I am familiar with the triple triple double double so the triple triple for those that aren't familiar is how we triple our Revenue three times and then double our Revenue

0:33twice so we have a $3 million business you go from 3 to 9 9 to 27 then we double from 27 to 54 and then from 54 to 108 so in 5 years you can have a $3 million business go to a $108 million business at that point you've got all the optionality in the world if you want to have a $100 million exit if you want to keep growing you've probably end up dominating and so it'sing time baby we are live so amen I was going through my contact book and I was like who is the person with the least amount of startup ideas that I

1:16know and I invited you on the Pod you know why I did that what an introduction Greg really appreciate it there you have it yeah wrap it up we're done yeah we're done pod's done so aan is the guy I call when I'm trying to figure out how to scale whatever it is I'm doing so on this podcast we talk a lot about the zero to one phase how you build a startup ideas on how to build a startup but what we don't really talk about is okay you've got a thing that's going it's doing 100K a month 500k a month whatever it is how do I

1:56scale that business and you've done that you you know appsumo you took it from 3 to 84 3 million to 84 million mhm and I was hoping today what we can accomplish is is just giving people tactics on how they could scale whatever it is they're working on Love It awesome yeah I think you and I were talking in jamming last night at dinner I am I'm terrible at the start of phase the zero to one is just not my jam and I hate the growup phase which is north of 100 million but that scaleup phase that mid seven figures to 100 million that's my sweet spot that's

2:30my zone of genius that's really what I enjoy and so really looking forward to jamming on that today so you've got this framework I really like that I need people to understand you know what I'm about to say no I have no idea the the nine figures nine steps nine figures nine steps nine figures that's right so what walk me through that so most Founders deeply misunderstand what it takes to scale a business Beyond seven figures it you have to transition from being a product Le founder to now one where you're building a company and the nine steps n figures essentially goes through three phases the first phase is

3:05startup that's everything getting to product Market fit the second phase is scale up which is really around company creation and then the last phase is around Legacy protection which is growup so startup scaleup grow up it's three separate phases that completely changes the way you run the company the startup is really around product Market fit which is Persona who am I selling to every single business should start with Market I love your ATM framework we should go deeper into that then it's well what am I selling to that market and then lastly is how am I selling at scale which is promotion once we figure that out and that's typically around mid

3:36seven figures I I tell people that this is the equivalent of you know you've hit product Market fit when it feels like you're wearing a meat suit in a dog park like you just have more leads than you know what to do with and that's often times when founders really struggle and they don't know what to do next and that's oftentimes when they reach out to me which is really the second phase was a scale up so I want to cover more about the nine steps to nine figures because I want nine steps to nine figures and I think others do too what else what else can we we talk more about

4:09that yeah I mean when we when we think about goal planning most people have maybe five years of dedicated focused obsessive energy to put into their business so how do we what do we do in five years in order to have a $100 million business um you're familiar with the triple triple double double so for the no so okay oh yeah I'm Canadian a triple triple double double to me sounds like you want coffee with three creams and three it's a Tim Horton Tim Horton I'm like yeah I am familiar with the triple triple double double so the triple triple for those that aren't familiar is how do we triple our Revenue

4:45three times and then double our Revenue twice so we have a $3 million business you go from 3 to 9 9 to 27 then we double from 27 to 54 and then from 54 to 108 so in five years you can have a $3 million business go to a $18 million business at that point you've got all the optionality in the world if you want to have a $100 million exit if you want to keep growing you've probably end up dominating and so when we think about the triple triple double double this is where we go how am I enabling us to triple and so we go back to is the sales

5:18or delivery do I have enough leads in order to Triple this year if I don't then I have probably a bottleneck on sales if I did have enough leads if I have a waiting list um or I could I'm I'm not sending enough tweets because my team is struggling then it's my job to think about the next phase which is the scaleup phase scaleup is process people performance often times I got a lot of advice when I was you know running seven absum about 7 million 10 million they're like it's people first it's people first you got to think about people and what I ended up realizing is like that's

5:54actually bull it's not people first in fact nobody wants to run a business that's full of people people that's bureaucratic it's like the DMV what what's way more fun is actually building a business that's highly optimized highly automated almost all always softwar driven now with AI I wish I had AI back then leveraging Ai and you have a handful of a players that are super fun to be around like that's I mean golden I was built with like 12 people like the greatest game of all time like if if you don't need more than 12 people so like if we can build golden eye with 12 like whates makes you think that your

6:30your logo Studio needs 60 and that was back then right that was back then yeah so it's like let's just get a handful of incredible people surround oursel be obsessive about this and get that triple triple double double so process people and then once you've got those two then it becomes your job to manage performance so what does performance mean imagine you're Bill Bel or worldclass coach and now imagine your team in the middle of a game you shut off the scoreboard LeBron James would have no clue what to do like how am I going to help you win this game so it's your job to give your team the

7:03scoreboard to give them the incentives to give them the compensation package and it's your job to sit on the sideline and draw up the next play quick break in the Pod to tell you a little bit about startup Empire so startup Empire is my private membership where it's a bunch of people like me like you who want to build out their startup ideas now they're looking for content to help accelerate that they're looking for potential co-founders they're looking for uh tutorials from people like me to come in and tell them how do you do email marketing how do you build an audience how do you go viral on Twitter

7:41all these different things that's exactly what startup Empire is and it's for people who want to start a startup but are looking for ideas or it's for people who have a startup but just they're not seeing the traction uh that they need so you can check out the link to Startup empire.com in the description you know Charlie Munger show me the incentive I'll show you the outcome obviously perfect quote so good so good uh again it's one of those things where it's I agree but how do I do it how do you structure how do you structure incentive programs for partners VPS uh that that work for them but work for you

8:30yeah so let's use coo so let's say you hire a COO the biggest mistake that I see CEOs will do is they go well profits really important so we're going to incentivize you on profit because that's what I care about I care about cash in the bank so guess what they do they create a bonus structure on profit and what they end up realizing is the co all year all they care about is cost cutting all they care about is oh I found I found us we were able to transition from Up workk to Fiverr it's like oh my God this is not what we're trying to do or I was able to

9:04fire this this team or I was able to save us money on this rent and they're not thinking about growth at all and so then what do they do the opposite oh so the following year guess what I'm going to do it on Revenue so we're going to incentivize on Revenue well what ends up happening I hired 40 salespeople I spent all this money on on Advertising that made no money and so then you end up having an individual that yes you doubled Revenue but now we made less than half the money the previous year so we work twice as hard for half the money so to me the ideal structure is a is a

9:3550/50 split so you get 50% of your bonus on Top Line and 50% of your bonus on bottom line so what ends up happening is now you have founder alignment you have an individual that's thinking about both Topline growth and bottom line profitability and so if I have 100,000 on Topline and 100,000 on bottom line in terms of my bonus structure then all of a sudden I don't mind dropping down a little bit of profitability if it results in a Topline increase but what I won't do is I won't drop my profitability if I end up with just flat Revenue growth or I won't just grow

10:07Topline if my profitability drops as well I'm thinking about both of these together and the second you do that I mean this is a very simplistic comp structure at it's one that we can get across in a podcast but that's a infinitely better than just focusing on one of those other two so I sound old but you know in my generation of startups a lot of us got equity in Silicon Valley venture back startups on paper were we millionaires companies raised billions of dollars and you even see you know front page of tech crunch wow this company sells for a billion dollars but they had 1.4 billion in press stack

10:44employees get zero I think that there's a lot of us who are now in our 30s and 40s who are kind of like yeah that Equity of venture back startups I'd rather a profit sharing or a bonus structure Y and I think that's going to be a trend that's only going to accelerate totally so if I'm trying to incentivize you know people I'm working with how do I think about Equity versus straight up cash yeah this is really tough so number one uh Harvard did a study where they actually found no marketed increase in performance when they handed Equity to individuals and I actually found the

11:24same thing to be true because the issue is most employees even the most sophisticated ones don't know how to Value Equity they're like what is what are these 10,000 rsus I have no idea what these mean I have no idea how how how it measures so the only way that I think about if you were to do Equity I personally don't do Equity but if you were to do Equity is we start with here's your total compensation package let's say we hire a VP of Revenue at 400,000 a year your total comp package is 400k your base I like to keep the base as low as possible so let's say we do

11:59100K for base so 100K base so that means you have 300K and you get to decide how much of that is going to be cash bonus versus equity and they're like oh now all of a sudden they start to like do the math like oh um do I actually want to invest 100K into this business now all of a sudden that Equity means something to them and so they have to make a decision oh I want to invest 100K in this business well guess what now they understand the math if you invest 100K based on today's 409a valuation this is how many rsus you get and now all a

12:35sudden they're like oh this is like buying Nvidia stock yes it's exactly like buying Nvidia stock except this company is not public and we're not able to trade it you will get that exit in the future you may get that exit you may get it's a lottery ticket so I have no problem with them going you know what cash is actually more important to me I want all 300K in cash some of them go you know what give it to me 25050 some of them are like you know what I'm very bullish on this company and I don't need the cash I've already had an exit give

13:00it to me all in stock but now they have to make a decision rather than me handing here's 10,000 rsus that get slammed into a shoe box never to be seen again and then they ask me every year how come I'm not getting a raise well you get a raise like your raise is effective when you are right like when we exit then you're going to get a raise and so the problem that you have with most Equity structures is the employee doesn't know how to structure it they don't know how to Value it and as a result the founder gives up so much and gets nothing in return what's cool about

13:27that model is let's say you get 250k for the employee to say like I'm I can invest this all of a sudden if they do invest it they're actually invested versus getting this like Phantom Equity basically like let's be real no one's logging into their Carta and being like I got 1632 rsus vested to me today that's right you know but you definitely are opening up your Chase app or you're getting a push notification from Bank of America that's like oh wow I got $100,000 deposited in my bank account today this is dope I've got some Swagger in my step no one gets Swagger from, 1600 rsus on Carta no one it's just not

14:07happening no not at all 100% I to me that's the only way that I've seen that it actually works and creates founder employee alignment is when now there's some skin in the game you have made a decision you're not gifted this Equity you've made a decision to invest in the company yeah I like that I just have to say this because a lot of people are going to be listening to this and they're going to be like I'll worry about all that stuff later yeah you know what I mean like they're they're going to be like Steve Jobs was never thinking about all that stuff are they

14:40wrong um so the problem that I've I see a lot of Founders is if they ignore this stuff now in the beginning what ends up happening is the equivalent of building a skyscraper on a Sandy Foundation we know what happened with that building down the street and so what ends up happening is when you ignore that you've probably seen this a lot in agent World by the way spoiler alert the building down the street collapsed yeah exactly and and I see this happen all the time where these companies will scale to Mid seven figures and they fail to think about the fundamentals and all of a

15:12sudden churn starts to rear its ugly head um competition starts to come in and all of a sudden they realize like oh we're building floors on top of a very sand Sandy foundation and all of a sudden around mid seven figures the founder is burnt out they try to push more in order to grow and they're like know what I'm done and they either Exit or they burn out and the company falls apart and so if you ignore this in the beginning it becomes really really difficult in order for you to scale over time so I do I do think even if you are still early phase I think this episode

15:41is really important because it's a preview of what's to come once you are successful I think the you said a really important word CH churn yeah like I feel like a lot of people from this you know listen to the show come steal an idea they're doing 100K a month um they're feeling like they're on top of the world um and then churn just gets worse and worse how do you think about churn and H how do you like is there a scientific way to combat churn so I think when you it's kind of like when you're riding a motorcycle what is the first thing they teach you is like don't

16:20look at the wall and I think that often times the the big four-letter word in startup ecosystem is churn and I think the problem is when you think about churn as your main focus focus it ends up thinking about the opposite which is actually what you really should be thinking about which is loyalty so loyalty is the way I measure it is net revenue retention which is not just how do we avoid churn but rather how do we get more loyalty from each existing cohort every 3% increase in net revenue retention doubles the company's valuation okay can you define net revenue so for a singular cohort so

16:54let's say January all of your customers in January if you have 10% monthly churn that means in February they will spend 90% of what they spent in January that's 10% churn the opposite of net revenue retention or the opposite is net revenue retention which means that that cohort actually spends more with you in February than they did in January a good example of that is like slack you sign up reluctantly to slack and then you pay for it and then all of a sudden well you add more contractors you add more features and so in January to February you start spending more as your usage increases you've created l loyalty AWS

17:30is another example snowflake is probably the best the company that's doing the best right now and if you can think about net revenue retention more than anything else that singular kpi more than any other kpi is going to drastically increase your company's valuation it's going to make it much easier for you to grow your business over time and it's going to make it much easier for you to Exit 5 10 years down the road when you're ready to move on to your next thing so when you're doing 0 to one should you be focused on net revenue retention or like what are the things that you should be focusing on 0

17:58to one versus when you're scaling I think the biggest mistake that a lot of Founders make is they they try to jump right into growth before they think about retention I think it's so much easier to grow a business when you have incredible customer loyalty and then you're able to then throw gasoline on that fire I think a lot of Founders make the mistake of going well we've got something that's kind of break even let's just go and Market it like crazy and eventually will grow what ends up happening you have massive churn um it's hard to profitably grow we know acquiring customers becomes harder and

18:31harder every single month I think Sam Sam par mentions like growing on on these platforms is like buying real estate beachfront but rent goes up every 18 months so it becomes harder and harder and so I do think you need to focus on retention upfront first and foremost before you ever worry about promotion so I do think it's important yeah I think it's like you wouldn't go you wouldn't build a leaky ship right you don't want a leaky ship cuz even if you start getting 10 15 25k of Revenue if it's going to go away in 6 months like you do the math uh what's the point

19:09right so I feel like the mistake a lot of people make is they put all their product energy iterations Vel product velocity into how do I grow this thing as big as possible um I'll figure out retention later yeah where it's like probably not the move maybe you keep it tight small have less Revenue but your retention is higher well oftentimes your first handful of customers are the ones that are the most loyal they're coming to you because they have the biggest pain point and so that feedback loop that iteration can be a lot tighter with your first 10 15 20 100 customers versus your first 10,000 and so it's so much

19:50better for you to nail that up front develop the brand Equity before you start throwing that gasoline on the fire I've seen way more success when you've nailed retention when you've nailed loyalty up front that's why you start creating a movement that's how you start getting individuals wanting to stick around forever first is like the companies that are flashing the pan they're amazing one year and then you don't see them ever again so someone's going to be listening to this and they're going to be like cool you know I'll focus on retention but I still need to grow like I've got VCS that I got to

20:22impress I want you know I and honestly it feels good to grow yeah you know it just it it's fun to wake up every morning and see your dashboard go up not just retention go up um how do you think about growth channels paid versus organic uh how do you think about you know should I go International or not walk us through how you think about growth tactics uh once you're you know you're figuring out retention over here but you know you still want to grow totally well I mean the beautiful thing about retention if you've priced things properly you are actually still going to grow because

20:59if you think about that net revenue retention number if you have a certain cohort of customers month over month your Revenue overall is going to grow it may not be growing as fast as you wanted to because you're not accelerating that promotion strategy but you're still going to be experiencing growth month over month that's how you know you figured it out in terms of your portfolio approach for marketing as an example I like to think about it like an investment thesis I I know you're not 100% in crypto you're probably not even 100% in cash there's probably a medly between that right and I think the same thing is true

21:30when you're thinking about your marketing channels 80% should be in index funds 80% should be in the stuff that you know is going to produce that consistent year-over-year results so your number one marketing channel should be getting 80% of your Investments but that 20% should be thinking about well what's next what has the potential to be a rocket ship what is my next Nvidia what is my next Bitcoin and so with 20% of your allocation which includes your money your people that's where you should be thinking about well what is the next marketing channel so that way you're not beholden or stuck if one channel ends up falling apart and

22:05cratering you've got a second backup channel that could easily recoup and make up the first channel if for whatever reason that first channel ends up stop working for you okay can I can I be selfish for a minute of course so right before we we hit record on this podt I got a text message kind of out of the blue um I'll let you read it all right um it's just at the end right at the end so the question is let's buy Biz with 50 plus million Revenue together this year that's the new year intention just out of the blue I get this text from this guy saying he wants

22:46to BU build a 50 million he wants us to partner up and buy a $50 million a year Revenue business together and last night uh we were at dinner and with a bunch of of friends and you asked me uh well what my superpower is and the second question was what do you hope what do you need help from uh what was the second question yeah so the the two questions are what's your superpower what can you help everyone else in the group and the number two is what's one thing you need help with right and I said remember what I said um you want to

23:27say it think big M thinking big and so I I I said that last night all of a sudden now I'm getting this text message where someone is pushing me to think big about a strategic acquisition in a 50 you know a $50 million Revenue thing might be an acquisition of $150 million right this is really outside my comfort zone MH um I would like to know when how how how how do you think about how should I think about acquis positions if you were me [Music] and and then so that's just like strategically and then on the personal side like how do I how do I get my

24:12comfort level to be like yeah I I can make that you know that big BET right it's never feels really good when you're making a big bet um at least for me I you know a bit it never feels good to to me it like I've got a really good thing going right when you have a really good thing going uh it's hard you know you don't want to mess it up totally so what advice do you have for me so one of the most important things that a CEO should be really good at is making decisions and one of the main Frameworks that I use for decision-making is I call the

24:45the The Shield versus sword which is how much effort is this acquisition going to take versus what is the potential impact that it has on my business so it's this Impact versus effort Matrix that's super important I'm always thinking about what is something that is super easy for me to do that's going to have a massive impact on my portfolio on my business when I'm looking for massive impact with low effort those are the the lwh Hang fruits I'm always going to be optimizing for those things they don't require a lot of Shield they don't require a lot of Sword they're super low hanging fruit and I'll typically rank these one to

25:22five how much effort is this going to take and then how much impact is this going to have in my business and I'm looking for 10 out of 10 ideas I want five in terms of effort and five in terms of impact because it's super easy to do and it's going to have a massive impact on my business for me something like this just gut feel while it's going to have a massive impact right if it's done well what's the effort that's probably a one out of five so that's really only a six out of 10 in terms of my over is there eight out of 10 ideas

25:5010 out of 10 ideas often times Founders love to go after the new thing the shiny object syndrome and they completely ignore the amount of 10 out of 10 ideas that are in their existing business and so for something like that if I'm working with a Founder I'm going to I'm going to hit pause I'm going to be like you know what is that actually the best thing that we should be doing strategically for this year or is there something else inside of your own portfolio that's actually worth a way higher Ry is it worth so you know the one on 10 that the one on five that

26:18you're giving the effort y um is it is it worth being like is there a world where I can make this a five on five or should I give up on that idea right now or well here's the thing if you give up the effort let's say hey I'm happy to do it but I'm only going to do 10k of an investment and I don't want to be on the board I don't want any advice I'm not going to promote it at all well you're also reducing the impact because you're not going to get as much Equity you're not going to get as much impact as a

26:47result of it and so you have to throttle how much effort it's going to require in order to do this with the impact that's going to require so of course who wouldn't love a 1,000 out of 1,000 impact for a zero effort it's like if you could just respond yeah let's do it here's a 100 bucks and you're going to get a $50,000 Equity stake of course it'd be amazing but that's not the case in most scenarios and so you do have to adequately rank these things and then more importantly you have to rank it compared to all of your other opportunities Someone Like You Greg

27:18you've got hundreds maybe you know T thousands of ideas sitting in your DM sitting in your brain I know how your brain works you've got tons of ideas even with your existing businesses how does this rank compared to everything else yeah it's kind of one of those things where everyone else is trying to get you to do their idea right 100% And you kind of have to block out everyone else for a second we're recording this in January 2025 like January such a good time honestly February is such a good time like the first quarter 20 you know the first quarter of the year is a good

27:57time to be like okay what do I what's important to me what are the what are what are the most impactful things I could do and then you can start tuning people in once you figure that out that's right yeah look there it's not that you don't want those ideas I mean it's amazing that they're coming into your ecosystem but it becomes so easy for them to become distractions and noise if you don't have a framework for how does this fit into my strategy how does this fit into all of the other ideas that I have I guarantee you your team has probably some incredible ideas maybe there's a

28:33company worth acquiring that you want to fold into the overall portfolio how does that acquisition fit into the ecosystem because you got to remember okay let's just go through often times people are like oh just buy a $50 million company which $50 million company what are the financials how much effort is it going to require how much due diligence is it going to be an 18-month process it could fall apart at the last minute so now I'm doing a 10 out of 10 effort and have yet to see a dollar of impact it most likely will fall apart most 100% right and then once I've actually signed the paper and

29:05we're able to pop the champagne well guess what now the real work starts now we have to grow this thing right it's already hit 150 million guess what if things were growing and going well I guarantee you that founder is not willing to sell and so there's probably going to be some things that need to get fixed there's probably going to be some churn issues right we got to make sure that we're not buying a skyscraper that's about to collapse in on itself which I see all the time um so yeah no um thanks but no thanks who's a Founder that you look up to that is doing like a lot of the right

29:40things that people can model themselves after uh I mean to me I I've been going deep down James cagal founder of Costco um I know he's bigger than most but I love the focus I love the pricing and strategy model I love that he gave back to the next generation of entrepreneurs like he famously coached Jeff Bezos which is where the Amazon Prime idea came from for the membership so it's not someone that's just focused on pricing and modeling but he's also giving back to the next generation of entrepreneurs so that's someone that you know maybe from like a tier one founder is someone that I'm I'm admiring someone that I'm

30:17admiring right now that's you know just working on a lot of like really cool things honestly like I'm I'm I enjoy watching like natal I and just tinker and come up with ideas and he's got an an audience right now I saw him just launch an AI course uh two days ago just because of his audience being like yeah this is cool so um I like seeing what he's doing um you know Marshall just exited somewhere. comom I love his tinkering philosophy um what's his tinkering philosophy um I mean it's funny he had Peele and then he ended up using that to start um somewhere um and

30:50he used that to and and he ended up just selling that for 50 plus million dollars uh and now he's moving 12 minutes down the street from so I'm super excited for us to be hanging um I love seeing him just figure out hey like where are my Cur like doesn't seem very monetarily driven where I think over the last four years the amount of people that chased the latest nft project the latest crypto project versus like how do I just scratch my own itch and then sell that solution to others isn't isn't Marshall didn't he create a few products and one of them kind of hit and I know you're a

31:24focused guy you know whenever whenever I'm telling you I'm working on like a bunch of projects I'm like oh my God oh my God he's I know what he's thinking I know what he's thinking Focus Greg Focus so how should people think about build you know a lot of people are into product Studios now launching multiple products I call them multi mult multipreneur how should people think about you know having multiple cash flowing businesses um does it work what are your thoughts so this goes back to what we were talking about in the beginning of this conversation which is are you a founder or are you a CEO and

31:59Founders found Builders build and if you know this is your zone of Genius this is actually the most valuable part of the overall value chain if you can get something if you can discover flight like that more than anything else is the most valuable part of the overall ecosystem the problem that most Founders have is they discover flight and then they abandon it to go start the next thing right they spend 2,000 years discovering flight and then they go okay well like let me go build let me go invent the helicopter where it's like the last 100 years is actually where the exciting parts of flight happened so you have to hand off

32:33the Baton you have to successfully hand off the Baton and so if if you have discovered flight mid seven figures your only job right now is go am I the Right CEO for the next phase of growth and if not the only thing you should be doing is either hiring a COO or a president to execute on your vision or recognize this is actually not a business I'm very passionate about and hire a CEO to take your vision to the next level once once you do that go back to Tinker mode because that's actually way more valuable for your skill set but the problem that most Founders face is they

33:05go right back to Tinker mode when the first thing still is a spinning plate and it ends up crashing failing and now they have nothing to show for all that hard work the founder of Costco what's his name again James Sagal James so if you think about Costco Costco the only thing the only expansion that they've done is expand internationally right they they haven't really changed their model that much and when I hear you talk I'm like that's what I want to be doing too right like I want to be I call it building skyscrapers not strip malls so have a you know you you have a

33:48business and it's starting to work but then it's like how can I expand upon it versus creating new business units I think that's the mistake a lot of people make when they're building these product Studios yeah I mean they're not like James well let's let's use appsumo as an example when I joined appsumo we were selling everything from ebooks to fonts to digital courses to software um the way we build skyscrapers instead of strip malls is we then analyze the portfolio and we go well which thing is selling the most how do we get more customer loyalty and software was outselling all of the other ecosystems

34:23by 10x so why what's going on there we realize if we dive deeper marketing agencies were our most profitable customer segment they were buying software to reduce their monthly spend on software so let's just do more of that we go way deeper with them we build way more Customer Loyalty we tripled our customer lifetime value that alone all things being equal tripled our business and so when we talk about how do I go deeper um yes you know James cagal expanded only internationally but I would argue each opening of a new Costco was an expansion it's a new market each time someone walked in and bought a

34:59membership that was deeper uh deeper loyalty with that customer base each time they reinvested profits to lower pricing and increase their buying power they were building more Customer Loyalty they were going deeper and deeper with each market each store and that's why they are the most profitable per square inch of any retail facility in the United States kind it takes a lot of courage to focus you know what I mean it does I feel like you really have to believe that if you execute on this vision and you expand on this Vision that um you'll win that market and in a world where the AI makes

35:41building so so simple uh I feel like yeah it takes courage Greg who's the fastest man on earth uh the fastest man on earth I don't know dude you say you know you say same B I know the name is he the fastest man on earth I mean he could be right like I mean when you say top top top top1 exactly who's who's second Lord knows yeah who who knows and that's the when you look at most markets they only care about the winner like they only care about the gold medalist and so if you're not going if you enter a market you have to ask yourself can I

36:20be the gold medalist in this scenario can I be number one in this scenario because when you take a look at where the Market will flow nine time 99.9% of the of the actual rewards will only go to the best in the market is that is that true even with non-venture back businesses it's true for any business when you ask yourself who is the best in the world at anything that's where the majority of the value is going to go and so you shouldn't enter any Market that you're not going to be the best in by the way markets are Broad and can be sliced up so Amazon is the best let's

36:54say for two-day shipping but Target's the best for an inperson experience and so you have to ask yourself well in what arena are we competing in and can we be the best in because if not you're going to end up being a seers where they're not good at anything and they end up going bankrupt and so before you enter a market or before you decide to focus you have to ask is this something even worth focusing in is this something that I'm uniquely qualified for can I be the best in the world in and if yes if this is something you want to dedicate your life

37:22to you think you can be the best in the world in or at least for 5 years if you can focus for 5 years you can have a $100 million business and have life a life-changing exit once you do that then you can do whatever you want once you're an exited founder with a nine figure exit you can do whatever you want because all of a sudden those business ideas those texts are going to come to you okay so you know Aman tell me tell me a story of uh you know hyper niching and and and Relentless Focus yeah well going back to the nine steps nine

37:54figures the very first step is Persona I I I think that deeply understanding who you sell to who loves you who Do You Love Back who's sending you referrals is probably the most critical question that any startup can ask itself and we we ask ourself that question every year and what we do is we analyze our customer data we we look at are there any Trends with our top 10 top 100 customers and for us 2017 we analyz that customer data and we realized oh wow over 80% of our top customers are marketing agencies so we branded and I like alliteration so we called it marketing agency mat and

38:30ironically there was an actual marketing agency mat on our list and we go why is marketing agency Matt coming to appsumo they're coming to appsumo because they're spending monthly on expensive on software but as an agency as you know revenues Feast are famine you might have 40% churn in one month but your expenses stay the same and so they're coming to appsumo to to reduce their monthly expenses on software so at the time we were maybe doing one software deal a quarter because they're hard to do hard to negotiate I go what would happen if we did one a month so we tried that for the following quarter as an experiment

39:07one of our Frameworks is called test then invest and we tried that and guess what I Revenue went up and I'm like well what would happen if we did two a month three a month four a month and every quarter we kept increasing it to the point where now we were launching got to the point where we were launching one software lifetime deal every single day so 30 a month and of course when you're selling more of what your ideal customer wants what ends up happening not only does your ideal customers start coming to you with more loyalty they start referring to you more in the communities that they serve

39:40but guess what even solar preneur Sally enterprising Ethan the other customers that we were quote unquote ignoring they benefit because now we can negotiate better deals because we're able to drive more Revenue to the founders of those software deals and so all things being equal our customer lifetime value overall went up our customer acquisition costs were slashed every single kpi in the business went up and to the right and all things being equal our business tripled so testing like how should how should people think about how many of these test and invests that you know should they be running a year or a month or yeah how do I think about it 8020 So 20%

40:21of your money time and energy should be spent on these experiments I'll give you a good good example we would we would think about hypothesis one of my hypothesis in 2018 was if the the number one way we acquire customers is through referrals so people sharing their referral link would they share more if we paid them instead of giving them credits so basically an affiliate model and so we literally with our top 10,000 sharers email them and go hey for the month of October if you share use your share link we will pay you via Paypal instead of with appsumo credits by the way Greg completely

40:58manual we were literally logging it was literally a spreadsheet and I manually paypaled each individual and I look at the data and it was a marketed increase month over month that alone was enough for me to invest into proper software proper tracking software and actually launch our affiliate program in the following year today that that that Revenue channel does multiple eight figures in revenue for appsumo and so when you're thinking about testing and investing your core team should probably be focused on on what's working so for us at the time it was email it was um email was our number one channel don't distract your core team it's now your

41:35job the Founder's job is to look and dig for oil and then hire to scale it so it's the Founder's job to to discover revenue and I think this is one of the biggest mistakes that Founders make is they hire to discover Revenue what you need to do is hire to scale Revenue because it's your responsibility to discover it I want to talk about team for a little bit so we've got an executive team you know I think we're doing a good job I don't know what you know I'm trying to figure out how can I take my executive team to the next level how do I identify holes

42:09and places where we can double down how should I be doing that so there's only two core functions of every business sales and delivery you first and foremost need to ask yourself where is the bottleneck meaning do I have a bottleneck in sales meaning is there not enough leads is there more leads than we know what to do with we don't have enough salespeople is there enough salesp people but we don't have proper onboarding process or after onboarding is it the delivery side is delivery not fully automated or is the quality not up to par or are we experiencing High churn those are your two Executives your top

42:51two Executives let's call it Chief Revenue officer and your coo your Chief Operating Officer from there it's your responsibility to determine where is my zone of Genius I I I think that often times the quote is hire great people and get out of their way I think that's a terrible idea I actually think it's much better to hire people actually in your zone of Genius so if for me I my zone of Genius actually at abso was more on the sales side so the very first executive that I hired was actually in charge of sales why because it allowed me to know what I was looking for know what genius looked

43:27like in that in that regard be able to properly train that individual and then know whether or not they were doing a good job if instead I hired a CTO I have no clue if that individual is doing a good job I have no idea what greatness looks like um they could end up just telling me complete lies and honestly it would be a complete mismatch so for you when you're thinking about your executive team we have to ask ourselves first and foremost do I have the right Executives at each and strategic fly is a huge component of it do I have the right executive at Each corner point of

43:57my strategic flywheel do I have the right executive in order to drive sales so if I send out a tweet and we get a 100 more leads can that VP of sales actually go and close them at a north of 50% close rate and then if that person is able to close them can we properly deliver it and if not there's probably something broken down in your value chain and it's your responsibility to go and look well is it on sales or delivery and if it's on sales where is it broken down and how do we hire an executive for just that particular function so I buy that a key component of it though

44:30is figuring out what your zone of Genius is and question is like H how do you identify that how do people identify what their Z zone of Genius is when you look at your calendar where do you get excited versus what do you push off if you get excited for certain calls if you get excited for certain areas where are you tinkering in the morning before you have any meetings that's your zone of Genius if you find yourself reading a sales call that's an area for you to get out of if you find yourself excited in order to Tinker with the latest AI tool or finding yourself excited to jump on a

45:07customer call not a not a sales call but an existing customer you're probably thinking more in terms of delivery and so ask yourself where does your motivations go when you have an empty calendar so that could be a cool exercise to give to your your team right you could say like I'm going to you know create a Google doc and I'm going to you know list out the five things that give you energy and the five things that suck energy away from you totally I mean to be honest most people should be able to knock it off off the top of their head totally I already like in my head I know

45:39exactly yeah exactly so like I mean we don't need to make this esoteric like like two-day Retreat like tell me about your feelings you know take iasa and just one get one get one shot in the company retreat no turns out I love sales exactly like let's not that's the problem that most of these frame they over engineer everything like oh let's spend 9 weeks to think about our core values bro move on let's go let's move quick so like just tell me where your zone of Genius is and let's get it off the plate and by the way eventually your job so the founder is the hardest per

46:11hardest working person in the room the CEO is the laziest the job of the CEO is to have nothing on their plate I had maybe one meeting a week on my calendar you have to get eventually everything off your plate and so forget your zone of Genius eventually both sales and deliv dely was off my plate where in the beginning I was writing every piece of copy closing every deal doing every customer support ticket sending out every email um but eventually got to the point where I was thinking two three four five quarters ahead in the business that's actually the ultimate goal for every founder that wants to transition

46:43to CEO is how do I become the laziest person at the company I think that's a Jeff Bezos has a quote on that where that's right right around on stock price you know when I think the you know Amazon stock price was going up a lot and some analysts asked him you know congratulations or yeah congratulations you've done so well and he's he he basically was like oh you should have congratulated us three years ago because it was it was three years ago that we put in the work that's exactly for today and to me individuals like Bezos Zuckerberg like those are the rare the reason they are so successful in the

47:19game of business is because it's so rare to have a Founder also be a great CEO the reason they are the top 10 richest people in the world is the founder is an artist whereas the CEO is a manager so hard for you to put down the paintbrush and then pick up the clipboard and so for individuals that have successfully made that transition to all the riches go the spoils and so for those individuals where as Jeff said don't congratulate me on this quarter because that quarter was baked three years ago that's a perfect example of Jeff who was very much in founder mode has now transitioned to CEO mode and

47:56he's thinking about well how do we get on the moon right how do we get on Mars like he's already thinking about things 5 10 years from now that have nothing to do with the socks that got shipped to me this morning he recently said that uh what's the name of his uh blue origin is that what it's called yeah he recently said that he thinks blue origin is going to be bigger than Amazon I believe it yeah and that's like that's a multi-decade business yeah and and is that is he thinking too far ahead you think well you have the luxury to right because guess what he's no longer

48:28driving to and from UPS in order to ship his packages like if you have a seven figure business should you be thinking 15 20 years in absolutely not yeah if you got a seven figure business you probably don't have enough you're in the awkward haircut phase right your hair does is is not too long not too short nobody's looking in your way you kind of look weird you don't meaning you don't have enough profit to hire a proper exec team right you've got a rag tag group of individuals you're all wearing multiple hats the only thing that matters is probably hitting this month's numbers so no yeah you shouldn't be thinking about

48:5815 years from now you don't have that luxury cool um dude I'll end this by saying I love you yeah Greg this is fun man by the way you know I was thinking back to when you and I first connected it was actually like in clubhouse 2021 I was looking back through our DMS um and I remember just being like number one like super super Blown Away by what you were saying back then and ended up realizing like oh wow like this individual actually walks the walk talk to talk I think you and I were joking most people in our space sometimes like they're they're essentially Hollywood actors and they're

49:33getting puppeted uh these talking points but it was very clear to me on that Clubhouse conversation uh way back when that it was that you actually walked the walk you talked to talk and uh it's been fun watching your journey and and consuming your content I appreciate it um I will say I got to think bigger though you know I I don't want to be one of those people that is complacent um don't want to grow 10 15 20% a you know a year um and the reason it's not a financial reason it's just a I like to play I like to play games and I like to win games it's really fun

50:12for me and uh I think it would also be really cool if I can bring lots of you know Partners employees teammates and allow them to buy their you know their House of their dreams and um help them win at their games so uh thanks for helping me think bigger and uh like I said we don't do pods like this really we really focus on the tactics uh for ideas um but I'm happy this this exists because this is the foundation that everyone needs you know nine steps to nine figures baby love it um where could people get to know you more honestly X by the best place so just look for me

50:56clubh housee not Clubhouse yeah talk about retention all right my man all right brother great catching up my man see you later cheers peace [Music]