"Is It My Marketing or My Sales?"

0:00Uh, my name is Chris. I sell data engineering boot camp to current tech professionals. We do a million a month. We'd love to be at 10 million a month. What's stopping me is it's hard for me to know if it's a marketing, sales, or sales process issue as I try to reduce my CAC. My LTV to CAC is 3.2-ish. Um, I think I know how to increase my LTV. We talked a little bit last night and um, I think Tim was also very, very helpful in helping me realize things I can do.

0:26But, I think it's >> Are you meta ads or YouTube ads? >> 70% meta, 20 YouTube, 10 >> Got it. >> TikTok. >> What um, how much creative are you putting out um, per week? >> At this point, five or six. I think Tim blew my mind or someone blew my mind when they were like, you got to do five or six per 10 grand. I'm like, okay. Got to 10x that. >> So, like 500,000 a day is usually 50 pieces a day. >> Yep. >> For context. >> Yep. >> Spend 100 a day, 100,000 a day, it's >> Yep. We spend 200

0:52>> It's closer to it's less than >> Yeah, we spend 200, 250 a month. >> Yeah, but I think that you should at least right now be at 25 a week. Minimum. >> Got it. And would you hire actors? Would you just No, I think I mean just the winning ads. >> I would rather you just get it going. You can kind of like think about removing yourself. Are you like still the face of the business? >> I very much I'm still shooting ads on a wall. >> don't I don't think that's the issue right now. If you want to get to 10, it's like you got tons of time before that's going to happen. So, like >> Cool.

1:17>> Yeah, it's a it's a ton more volume than you're currently doing. And it's actually the same answer that we're talking about earlier from the concept perspective just on the ads. Um, the nice thing with ads though is that because the the nature of testing that can occur with ads is that if you record call it 25, um, here, I'll just walk you through this. This will apply to everybody. So, So, this is how we make ads.

1:57So, you make 50 hooks. So, it's just like, "Hey, quick question. Hey, are you Have you ever wondered about, you know, data engineering? Hey, look at this crazy AI thing. You know who makes this? Data engineers." Like, "What's that?" Like, you just you just go through 50 hooks, right? Then you have your three to five meets, which is like, "This is actually the fastest growing industry in America right now." And believe it or not, you know, Goldman Sachs said that there's a 23% in CAGR. And if you're like, "What's CAGR?" It just means every year by 23%. That means it's going to double in 4 years. So, think about how many people you know who are data engineers, right? None. Well, there's going to be even more, and this is the starting salary. This is just according to this, you know, reputable source. And here's the craziest part. You only need 16 weeks in order to get certified to get these types of jobs. And so, if you've ever been kind of tech-oriented or you're good at math, like, this is something that's worth considering. I just have a free class that'll walk you through step-by-step, blah blah blah, right? So, that's the meat.

2:54And then you have, um, call to actions. I don't do a ton of test on this. So, usually, typically with call to actions, once you know what the call to action that works best is, I tend to just run that as as what I say at the end of the ad, which is, if it's like, for Are you running to a VSL or something? Video sales letter. >> Opt-in VSL set or something like >> Okay, yeah. So, it's like, you might try web class, you might try a master class, you might try, um, you could even just try video sales letter. Uh, like, I've got a video training, I've got a training like, basically, it sounds small, but when you're running tons of traffic, those little little incremental bits matter.

3:25But once you nail what the CTA is on the back side, just use that. But fundamentally, 50 even times three is going to get you 150 ads. And so, what one recording session, if you do that, it's like, you only have to think of three to five actual like media angles, and the rest is just hooks that you'll take from the best performing ads. And I would strongly encourage you if you're running, um, one, look at obviously people in the marketplace that, uh, are, you know, kind of around you or adjacent. But the cool thing with hooks is that they work they work across everything.

3:52>> Mhm. And so I've used one of the same hooks in four different businesses that are completely different. B2B, B2C, tech, and service. And it still works. Right? And so like you can reuse hooks. And so what This is by the way why I don't uh pay for any subscriptions for ad-free service is I'm always just paying attention to the hooks. Like what hooks are coming in my in my ads. And if I see an ad that's been running a lot, I'm like it's probably a good hook. >> Yeah, that's >> So I just write it down. >> Yeah, I I was looking at the sales transcription trying to get hooks that way, but that's really helpful.

4:20>> Yeah, I don't know for sure. Just Just watch ads. >> Cool. Thank you. Appreciate Was that helpful? >> Yes. Okay. >> Next one, let's rock and roll. All right. >> Cheers. Hi Alex. My name's Luke. We run a firm similar to our client actually in Sydney where we buy majority stakes of all the businesses. Um we currently operate three of them. We want to be operating or at least contributing to operations for about 30. We've had a lot of success exiting in the past. So we've kind of got it dialed in, but we can't do more than a couple at a time.

4:56Our constraint is at the sort of venture studio level is the or is talent really. We don't really know what our org chart should be and who should be doing it. Um so I don't know if there's anyone better placed to help with that than you. >> So you have a holding company >> Yeah. >> right now. >> Yeah. >> And what are the three businesses that you bought? >> Uh one's a SaaS company at the moment. One's early education. And the other one is a made food e-commerce business.

5:23The one before that was a you know music industry stuff. We're really diverse. Well, we we just had a lot of exits. So these three are quite small. The e-commerce one's doing three and a half million at the moment. >> And the other ones are smaller? >> Yeah, the Yeah, they just started. Yeah. So the state of this one This one's only a year old. >> And so the founder So So are you Are you funding them and finding a founder or are you buying businesses that are existing and exiting founders?

5:51>> Uh in the current case of these current three, we've just bought them and now we're we're the only operators of them. Uh in the past it's been slightly different. >> So it's kind of case-by-case. >> [snorts] >> What do you want to do with your life? >> Um >> No, cuz what I'm about to say is is going to be a dramatic change from what you're doing. >> Okay. Um I want to have [ __ ] it money. >> Okay. >> [snorts] >> So um So there's a basically you have How much do you know about private equity?

6:24>> I've read a couple books. >> Okay. So the the problem I can tell you what the problem with the existing model is is that you don't have enough operating leverage. And so it's actually in my opinion a foundational issue with the business model. Like I don't think it's going to work. Now, to be clear, I think you can make some money. I don't think it's going to accomplish the goal that you want. And so if you're trying to treat this like private equity where you hope to have exits later and then gain liquidity, versus if you're like I'm just a holding company and I just want to continue to buy cash flowing businesses, I'd have a different a slightly different answer.

6:55Um but the businesses that you're buying are too small. And so if you're exiting founders, then the problem that you're having is like oh my god, I have to build this entire business, which is why most private equity institutions start at 5 million in EBITDA as their basically minimum that their check size that they're willing to write because of the problem that you are dealing with right now. And so I would encourage you to not try and reinvent the wheel. Um and I say this coming from like with arrows in my back and lots of scars.

7:23Um in the first 24 months of acquisition.com, I did 20 40 deals. I had much many many smaller deals cuz I thought, okay, I'll just do I'll use the brand that I have. I'll attract, you know, entrepreneurs that are kind of emerging and I'll have take a minority stake and kind of help them grow, whatever. Uh the issue with that is that a lot of businesses that are small are small for a reason. Cuz they don't have good entrepreneurs who are leading them.

7:48And now you're like, okay, well, either you remove the the mediocre entrepreneur and now you have just a bunch of basically nothing. >> [laughter] >> That you're now like, oh, now I have I just bought myself a job, right? Uh, and maybe you got it for no money down because they were willing to leave and you didn't have a lot of capital they had to put to work, fine. Um, but I would in my opinion, you have basically two paths that you can pursue here from where you're currently at. I don't think buying more companies is the answer unless you raise a lot of money so that you can buy actual companies and not like someone's big bucket of risk, right? Which is what we If you If you took the companies that you bought through the the the scorecard, I'll bet you that they probably fail a lot of those checkpoints.

8:28>> Two of the three have, yeah. >> Yeah. And so and for that reason, it they wouldn't be deal like they wouldn't be deal ready businesses, right? They're just basically a person with a job that has a couple people are helping them out and then that person steps away and now what? Right? Um, and now you're just responsible. Um, so basically two paths. So, path one is that you raise money or get enough money to buy legit businesses. Option two, um, is that you decide one of these businesses is the business that you want to do, um, as your main thing and you use your M&A skills to basically bolt on stuff to using that as a platform rather than having all these disparate businesses.

9:06Does that make sense? So, it's like if the e-commerce one is the best one, it's like, okay, can we acquire some sub brands or some sub product lines underneath that, fold them into the brand and then flip that? That makes sense. And that allows you to not have as much capital um, and you can organically grow it and then you can keep your focus. But there's a reason that most private equity firms only take on call it five to eight, um, investments and that's after they raise half a billion dollars um, to make those deals if they're in disparate industries.

9:31If they're uh, a private equity firm that has a thesis based around basically uh, a roll up strategy where they're like "We're buying plumbing and that's our whole That's our whole thesis." Fine, and that's more akin to what you were doing in terms of alpha. A little bit more boring, more ops-heavy, um but you have uh you don't have to have as much capital, and the more entrepreneurial you are, the more organic growth you're going to drive in the in the original platform business. Does that help? >> Thank you. Yeah, makes sense. Thank you.

9:55>> I know that's like You're Okay. I feel bad. >> [laughter] >> Yeah. It's hard for a reason right now, because it's it's it's not it the model doesn't I don't I want to save you 3 years before you figure it out. Like it's it's this this will not continue. >> So, obviously the old chart applies to what you're saying is like >> The org structure doesn't matter. The strategy's wrong. >> Yeah.

10:21>> Cuz you're trying to build three businesses at the same time with no one. Of course you have talent discrepancy. You you need three entrepreneurs. >> Hey there. Uh my name is Chris. Uh so, uh I sell glasses to people that can't see. And specifically >> Nice. >> uh targeting Yeah. [laughter] >> Yeah. >> Ideally, right? So, specifically trying to uh target a a piece of that, which is not just your primary pair, which is like, "I can't see, I need to see." But more specific things like driving, office, that kind of stuff. A little bit more of those task-specific things.

10:54Um so, this is going to sound funny here, but basically we do $0 in revenue. We'd love to be at 100 million. >> You do $0 in revenue? >> Yeah. So, I'm going to Okay. So, basically I I have uh a business that I'm operating in 10 locations. >> Awesome. >> You know, like 12 >> We don't care about that. We want to talk about this. >> Coming out of that. So, so what I'm here for is to understand like, well, if I'm going to start this, let me start it the best way. What's the best vehicle, those kinds of things. So, >> Yeah. >> that that's why like, yeah, we're at zero. >> So, you have a brick-and-mortar? >> Uh yeah, we have 10 brick-and-mortar. >> No, are you going to for the the glasses business? Are you going

11:22>> that's kind of the question is really is like, do I go brick-and-mortar? So, I could either, you know, use uh doctors as affiliates, etc. But the problem there is that they um their their sales teams and otherwise don't tend to sell these glasses well. So so I'm not an eye doctor and so part of this is coming from knowing these common like five things that people just do not >> and grandfather are ophthalmologists. >> Oh, really? Oh, yeah. Well, so you know this well then I guess. So so those common things are not being addressed well because it's just not communicated well all the things. So then I have to like figure out how to get them to sell the product that I'm making, which is like a whole challenge itself. Or do I just sort of go more the path of like direct to consumer and and that kind of thing and whether it be brick and mortar combo of online etc.

12:09>> I think it depends on your strengths. >> Yeah. >> So um Leila has a really good frame for these types of decisions, which is what problem would you rather have? Because you're going to have a problem in either of them, right? The problem that you described with the first one is basically the affiliate problem, which is how do I attract them, how do I keep them motivated, how do I train them, how do I keep quality high, how do I make sure that they're representing the brand the right way? That is the problem with affiliates. But the nice thing is that if you solve that problem, you get paid like 50 or 100 million dollars. And so like I feel like there's an appropriate price tag ascribed to solving it. And that's what gets me through honestly harder times. When you guys cuz sometimes you're like, man, I just can't figure out how to get these conferences to work. It's like Yeah, and then as soon as you do, you make 10 million dollars. So yeah, solve it. Like like that's how it works.

12:51Um when it comes to uh the direct to consumer side, if you feel like you're more skilled with call it, you know, map basically the business like what business you're really good at. So if you get into the direct to consumer business, you're competing against like Snow Teeth Whitening. And like if you look at the the the business model there, it's all media, it's all it's all, you know, advertising uh driven type business. This is with glasses likely very transactional. So it's a super direct response heavy business. You'd probably be recruiting affiliates for brand associations and you'd be able to white list uh for them to be wearing your you know, your your glasses and whatnot. And that's the business that you're in. So, it's going to be the problems that you're solving are I have to be creating [ __ ] loads and [ __ ] loads of uh of ads all the time. I have to be up-to-date on the best media buying stuff and have it really good at CRO, so conversion optimization. And I should probably over time develop uh a strong influencer affiliate strategy so that I can actually build a brand rather than just a ROAS arbitrage business.

13:47That's that path. The other path is the brick-and-mortar affiliate path where you still are centralized, you're just using doctors as your distribution base. If I had to pick which one I would rather have, I would rather do that one. Um that's me personally. And you're also a physician, which I think gives you a little bit of leg up or at least foot in the door, figuratively and literally. Um and uh I think that that one actually, if you want to sell a business in the future, would probably be more likely to be sellable uh just because the direct response nature of that other business is so volatile that any kind of like wrinkle of volatility in a year prior to a sale, sale's done, sale's off the table. And so, whereas once you develop a strong affiliate base of basically referral network from physicians, though it is complex and challenging, literally you just solve that one problem and you have the business.

14:33>> Yeah. A small follow-up to that would be then is so in the vein that that's the ultimate goal, I I know that well, in order to get there, solving that problem means that I probably need to do this XYZ here for that uh practice so that eventually I'll be able to do what it is I want. That's I guess okay to sort of take that approach, that longer tail approach of it.

14:59>> Nothing's fast. >> Yeah. >> [laughter] >> Well, sure. Yeah. >> No, I'm just being like super real. >> Just more from obviously experience of seeing it and going like, "Oh, that's a stupid path." versus >> No, I think either of those paths would work. I think given your experience from just the limited amount that I, you know, we've interacted right now. If you'd said, "I'm a hardcore direct response marketer, I make tons of media, I really understand that well, I'm really good at building sites and know people who can, you know, CRO really well, then I'd be like, okay, maybe that's the play. But if But you didn't jump at any of that. And so, this one feels like the right path.

15:29>> makes sense. >> Is that helpful? >> Yeah. >> Rock and roll. Hello, sir. >> If you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling roadmap, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so, we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at your business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.