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0:00Hi, Alex. My name is Alex. You might you can call me Alex Rodriguez. From Puerto Rico. Yeah, from Puerto Rico. So, I'm a music attorney. Abogado. Abogado, correcto. En la música y el entretenimiento. Yeah. So, what we do is we have my constraint is focus. Yeah, you think? Okay. I have >> [laughter] >> At least you said it. Yeah. So, we have the law our law firm. Yeah. Uh so, basically it's three businesses.

0:25>> Yeah. Uh but today, thanks to Ed and Sammy, we got uh more uh much much more clearer on what we should do. Uh but I would like to know how would you think about this because the the law firm side it's growing 20% year-over-year without me actually doing anything, just redirecting people that comes to me through my law firm. >> Sure. Um and right now it's about 100k.

0:50Mhm. And then we have the educational side and that is making 200k and and it's been stuck like that in the last 2 years. Sure. And we're And you get customers from organic? Yeah, both are organic. Okay. So, if you don't have money to pay us as a lawyer, you go to the educational platform. And we are developing a contract uh automation software for big companies like major labels or publishing companies. Uh so, right now the the product our software our goal with the software is to sell. We are seeing that other that big music companies are buying tech.

1:27Yeah. So, specific for them. Sure. So, they're doing everything manually. We want to sell that, but we have a cash flow problem because we're selling to, you know, people without a lot of money and the service size does uh make money. So, our our our problem is where should we focus? >> Yeah. You but you're What's What's monthly churn right now? On the it's >> On the software. >> We got 100 people and we only have 40 active right now. And how long have you been doing it? In the first year? So, you've retained 40%. Are they actually active though? Um So, they're paying?

2:00The people that are active are paying $3,000 per year and there are only like four. Four? Four that are paying 3,000. And then what are the other 36 paying? >> I'm paying 600 per year. Okay, got it. Here's a very classic problem, which is that you're good at doing something and you have two very different avatars and if you continue down either direction, you ostracize the other. So, he's actually at the productized stage, so he's tended, you know, 20 employees between the three companies, the three companies that he has. And so, the issue that he has to have is he's got to niche down. Qualify leads are too expensive and it caps his ability to advertise.

2:31That's fundamentally his big issue, right? And so, he's getting he's got too many different customers. So, we have to niche down his his advertising and basically message the new offer, which for him was going to be the education and the software. And so, the million-dollar question for him, which is what forced me to say I think that it made sense, was and this isn't this is rare for me, uh but it was for him to go down market, which means to go for the smaller customer that's more numerous. Most of the time you want to go up market and that's because those customers can afford to pay you, like sell to the rich, you know, rich people pay better, solve their problems, that type of stuff. I'm always always in that direction. But because he said that 40% of his customers, basically right off the onset, were still paying a year later, to me that's fairly compelling that he's found some sort of product market fit. And so, in hearing that, I thought, "Okay. Well, best in class is like 60 plus percent annual retention for a consumer prosumer type product, which is where he was at, which is musicians who like want to make it in business, but it's aren't that big yet.

3:26So, to me that'd be a prosumer, somebody who's, you know, a little bit of above a consumer or kind of business e-oriented side gig-ish, right? And so, the good news is there's lots of them. The other good news is that there's new ones that get minted every day and it's a growing market. So, all those things are in his favor, which is again, these are some of the reasons I like that. The other piece is that he some of the old businesses he's going after, I think, though they are big, I think they're going to have trouble over the next years with the AI stuff, like if I think they'll have a hard time pivoting and so, I would be at least I would second-guess going all in there. Not to say you can't, I would just really consider it. Now, the other piece of why I like this is that if he can move his revenue retention up at the 12-month mark, then he has something that will just keep growing year-over-year over year because getting those customers is not hard. Keeping them is hard. But if he can keep them, then he can probably blow the doors off this thing, especially if the education can offset uh his CAC or cost of acquiring a customer. Okay, so I think we we we chatted about this last night.

4:19So, you have a there is no right answer, but there is a path that you have to pick. And so, either you're going to be enterprise company and you're going to build only for that and I would say like you probably will just transact on the education side in order to fund this. I in general don't like this plan, but you could do this. Um because you'll be split attention and this is fundamentally why people raise money in software so they can just focus on one customer the whole time, build the product and then actually get it to work. Okay, that's that.

4:47Um because you said that you're retaining 40% in basically a um prosumer-ish market, which is where you're at, I would be inclined to say that you probably are pretty close to a decent product. Um so, you probably have nailed something there cuz keeping 40% of people 1 year later on, you know, whatever it is for musicians that you guys have for contracts and and whatnot.

5:13Um you could absolutely go all in on that and get that to like 50 or 60% and then you just need to have a different acquisition system. So, you probably just need to go spend money acquiring customers and that already cash flows because of the education side and are the people who are still paying you on the software also education customers or not? They usually come from the education or from my legal services as well. So, I have some clients that be 80% of the job I automate.

5:41>> question. The million-dollar question is, if they stop the education, do they keep paying for the software? Yes, because it's a one-time >> Well, then that's What What do you mean the software's one-time fee? No, the education. So, sometimes they just pay and they're going to use the software either >> As long as they So, the only thing that we're solving for is revenue retention on the software. And so, like enterprise in and of itself is not more valuable than lower market. It's just it tends to be stickier, which is what makes it more valuable. But if you can get a larger marketplace, easier to acquire customer to stick as well as a large enterprise customer, you've got a gold mine if that's true.

6:16And so, if you want to go spend money acquire customers with the education or media as your liquidation and then get, you know, 100% like but the goal that you guys should have is like we don't care at all about the education. All of your focus, all the profit goes into just fixing one number, which is that you need to look at M12, so month 12 retention. Um and just say like, "Okay, we're at 40. How do we get to 60?" And then how do we get to 70? And that's all you're solving for cuz if you solve that, then the thing will just keep growing. And that's the beauty I mean, that's fundamentally the beauty of software once you get it right is that it just keeps growing.

6:46Thank you. Yeah. And so, for me, that was um I thought the higher likelihood path and also because you already knew how to get those customers, whereas getting Sony and and some of these large brands could be significantly more difficult. And so, for me, I saw that and was like, "I think that's the direction that has a higher likelihood um of succeeding given their goals." So, if you've hit a revenue ceiling or your entire business relies on you to grow, then I'd love to invite you out to our headquarters here in Vegas to learn how we scale. It's a my team spends 2 days with you to identify the thing that's holding your business back. And so, if that sounds interesting, click, book a call and if you're a fit, we'd love to potentially see you out here in Vegas.