Wann man ein Business wirklich aufgeben sollte

0:00Hi. Uh, my name is Sam. Uh, my business partner and I run a membership site for real estate agents where they basically get daily social media templates, lead magnets, training videos, all the stuff to help them sort of save time and get better at Instagram. >> Okay. So, it's a membership. >> We do. >> What do you What do you give them on a monthly basis? >> Um, a lot of it is just daily social media templates. So, 30 days of content that they can edit, customize to their own personal branding, post on social media, and then there's a library of like little lead magnet things and and that they can customize again and use on their Instagram and training videos to help them set all up their Instagram, all that stuff.

0:40>> But mostly it's going to be the the content templates. >> Yeah, it's it's a content membership. Yeah. >> Okay. Got it. Okay. So, how many people you got? What do you charge? >> Yeah, so we charge uh $49 a month. >> All right. Um, we have just under 300 members. >> Okay. >> And, uh, yeah, I mean, we do just under sort of 20K a month. Yeah. >> And we take, you know, 75 80% of that.

1:04>> Cool. Got it. So, what is the what's the issue? >> Yeah. So, my question is, you know, >> what's churn? What's churn? >> Yeah. Uh, yeah. Uh, hovers around 12%. You know, >> monthly pay. >> Yeah. >> Monthly. Okay. Got it. Do you have any metrics that like after a certain point people continue to stick?

1:30>> Um, we've only been in business for just over a year, so it's hard to get that like 12 month kind of stick number, but monthly it's 12%. >> Yeah. Yeah. Well, I'll tell I'll tell you why this is important. >> If let's say it's [snorts] 12% Well, 12% is tough because that's like you lose all the customers by the year almost. Um, okay. What's sales velocity right now? meaning monthly sales units sold >> uh between you know you know 50 a month 40 50 a month >> 50 a month.

1:57>> Yeah. >> Okay. Got it. >> Right. We're getting to the point where churn is starting to catch up with us. >> Yeah. >> Um >> and and that kind of leads into my question being, you know, how do you kind of decide whether to push or pivot when there are sort of these structural challenges or at least perceived structural challenges in your market? Um, and you're maybe looking at a different market, a different niche that might sort of be better for your business or for your offer essentially.

2:23And then not marketing as as in not doing it for real estate agents, maybe doing it for a different uh market. >> Why do you think this other market is going to be different than real estate agents? >> Yeah. So I mean generally real estate agents um from my perspective they're they there is a lot of structural volatility in terms of their income and obviously with SMBs that's you know

2:50>> a given it's probably worth real estate agents um and you know they don't make a lot of money there's not a lot of willingness to pay. >> Yeah. >> And basically what we've seen in our market there is like a market leader with you know over 5,000 members been doing it for six plus years now. um and a couple others with a thousand plus like we are a late entry into this market. This is something we started to do just because we thought we might as well pick a proven business model. >> Okay.

3:14>> Um and we've seen other content memberships in other industries like you know accountants uh one with like aesthetic nurse practitioners. >> Yeah. >> Start at the same time as us have the same Instagram following. We've gone through their funnels and they've like 5x. Yeah. from from in terms of what we've been able to do growthwise and we're wondering trying to figure out why that is essentially. >> Um well do you do you have full transparency into their numbers?

3:42>> Um I have full transparency into a few of their just you know the amount of members they've had and the amount of Instagram followers they had. I've kind of gone through their funnel a little bit. I know that they don't necessarily run a ton of ads. Like it's not like they're doing a ton of ad spend for example. Do you know what their churn is and how many members they have? >> Um, I can give you one example of one that has we have like 50k on Instagram. They have 40k on Instagram. We're kind of friendly with them and I know they have like 1,800 members.

4:11>> Okay. >> And that's that's been a year and and their sales velocities from what I can tell is like 100 plus a month. Maybe 150 200 a month. >> Okay. And they start at the same time as you >> basically. Yeah. Similar following all that. So, I mean the only >> And they have no they have no big competitors. >> Yeah. Well, I mean I think going to an underserved marketplace is not a terrible idea. Um the reason I'm like more okay with this is that you guys are still really early. You know what I mean? Like it's it's kind of it's it's pretty much a brand new business. I do think that like is this business that you have uh fixable? Yes. If the market leader, I'll put quotes around that has 5,000 people. Well, there's like a million realtors. So, there's lots of opportunity, right? That's still there.

4:53like no one really owns the market. Um, so those are kind of the plus sides. I'm going to also bet that like to your point, it might not be that realtor like realtors of course if you take them in aggregate are have volatility, but if you look at the top 5% of realtors like they they make they're full-time, right? If you have a lot of part- timerrs who are in there, uh, then you have huge amounts of churn because they're they're not they're barely even business owners, right? >> Right.

5:18>> So, you could probably fix value prop though. >> Yeah. Okay. Go ahead. Yeah, just in terms of our value props. I mean, if you're a top 1% agent, you probably have uh some sort of social media manager or media team, we're a lowcost alternative to that essentially. So, it's kind of just a a you know, a feature, not a bug, I guess, of our business. >> Yeah. Um but you'd have to have like the I mean the thing that's bad with the business right now. Okay, zooming all the way out. What do you want to have happen?

5:50>> You want to sell this thing? I'm going to make more money. short-term make more money for sure. That's what we're more cash flow. >> The thing is is that you're selling 50 a month which is actually like really not a lot um from a sales velocity perspective given the size of that market and that like that is the problem, right? Like you could sell like if you have a million person marketplace it's like we could be selling a thousand of these a month, right? And then the churn, even though it's, you know, 12%, it's like, well, we just know that we're going to get eight months on average times 50 bucks. So, we're going to make $400 per customer as long as CAC is, you know, $100 or less. Cool. We have high margins. We're good to go.

6:28Um, and you just take the money and then you do whatever you're going to you're going to do. Uh, that's like short term. You could do that. And I think targeting people who've done a sale within the last 30 days or something like that, maybe they're not the 1%, but they're like quote on the way. they're quote reinvesting their business and if they just had a sale in the last 30 days, they have some cash. Like there's some elements here that you can do. Also, like are you doing a big uh do you do a big promotion for getting annuals? >> Uh we Yeah, we try our best. We do two months off. We're we're starting to add other bonuses in terms of the annual as well to try to push more people towards annuals. But yeah,

7:00>> right now LTV is eight months for you. So you might as well give four and pull the cash flow forward since it's equivalent and turn on those customers will be lower, >> right? >> Cool. All right. So, that's thing one. Um, now to the larger question of like should you go after a blue, you know, a blue or ocean market? Um, and in in so doing, like does that mean you're going to start another Instagram page and like build that whole thing up and do that game? >> Essentially, that's kind of the thing that we're, you know, relatively best at. I think we invest all the time into.

7:29It's something that I think we can do, but it's obviously going to take time and time away from our, you know, everything else we do. >> Yeah. I like I Okay, I'll tell you what I want. I I don't think it's a bad idea. I'll say that. I don't think it's a bad idea. Um like normally I just say like no, stick with your existing thing. I do think you should stick with this thing a little longer. And I'll tell you why. I think that it would it would behoove you to learn which types of realtor churn versus the ones that don't. And there's probably two or three characteristics that separate the people who do versus the ones that don't. Number one. Number two, I do think you need to make a better incentive to get people to prepay for annual. Number three, is there a version of this business that like on top of this you sell some sort of maybe $500 a month thing as an upsell or a $1,000 a month thing that does have so have some sort of managed element to it that you have lots of AI and automation built into it so that you can do with high gross margins,

8:24>> right? Yeah, definitely something we've thought about just adding adding upsells, adding different offers. >> Yeah, I I like I I I I can appreciate the simplicity of the business, believe me. Um, I just feel like you have a lot more to learn from this before doing the next thing. Um, rather than just saying like, "Oh, it's the avatar." It's just cuz like that's the obvious thing that everyone says. And the market leader, and I'll put quotes here, has 5,000 people. It's not that many. >> No. And and I' I've tried not to just say the avatar to the best of my abilities. Yeah. Seems like, yeah, the easy way.

8:54>> So, that's what I would do. All right. So, I would try to learn more about the customers. Number one. Number two, I'd have the annual prepaid thing. Number three, I would start running ads and see what your cost of acquisition is with ads and having that strong pre prement thing. I would also have a selfquidating offer on the thank you page that could be even higher than just the annual, right? Because that could just improve the uh funnel metrics overall. Maybe like a a high ticket a higher ticket item.

9:22>> Yeah. And I'll say a higher ticket with quotes here. I'm talking I'm talking like 197 to you know 397 somewhere in there which might be like uh we have all these accounts we'll tell you we're going to give you the 100 best performing pieces of real estate content over the last year. >> I would buy that. >> Right. >> Right. >> Yep. >> All right. That's what I would do. I think you need to learn this game better and then you'll have more perspective and you might just break through and then just become the market leader.

9:46>> Yeah. Okay. Thank you. Really appreciate that and appreciate everything you do, all the content you make. >> Appreciate you too. L.