"All My Revenue Comes From One Client. Am I Screwed?"

0:00from. All right, so next one, do you want to go with Mustafa? Mustafa? >> Mustafa. >> Dreamlift. I wonder what that is. >> Dreamlift? >> I wonder if it's like a Oh, could be. I was thinking like a truck lift. >> going to say it's one of those. >> All right, let's see. >> [snorts] >> Mustafa. >> Hello. >> Mustafa. >> Mustafa. >> Hey, how you doing, man? >> What's up? What's up? Talk to me about Dreamlift. Is this a gym or a truck car related thing?

0:26>> Uh it's a car related thing. Good guess. >> Ah, I said gym, he said car lift. I lost. >> Ah, there you go. The wife you picked it. >> [laughter] >> Damn. >> How are you guys doing today? I just want to obviously say thank you for all the hard work you guys put in. >> No, you bet. Thank you for donating books. Thank you for donating books, man. I appreciate it and thank you on behalf of the entrepreneurs who are going to get them. >> You would be surprised by your book helped me save at least tens of thousands of dollars in advertisements, so

0:54>> Well, thanks, man. >> That's awesome. >> I had to put that out there. >> Well, let me let me ask you this. No, you bet. So, I want to help you make as much money as I possibly can so that you can donate more. So, what can we uh what can we How can we help you? What's What's revenue right now? What's profit? Yeah. >> So, right now Dreamlift uh what we do is we're a subcontractor to a a a school transportation broker, if you want to say. It's uh it's called alternative transportation or it's transportation for students that, you know, whether they have some sort of a condition

1:25>> Okay. >> or they have troubled homes or they're they're far out from the school from the bus >> Yeah. >> line. >> Mhm. >> So, it's more like a a pre-booked Uber for students, if you want to say that's booked by the schools. >> Okay. >> Um the in the last couple of years we've been we've been the number one provider for this company. >> Okay. >> And we've been doubling our business. Um but it's still limited because all the sales are coming through the the broker that gives us gives us the rights.

1:54Um so, we're not the broker ourselves, obviously, but at the same point, um I'm just trying to figure out how what's the best direction to go about that, of like how to I mean, we don't have to break free from them, cuz they do they obviously are 100% of our business right now. I I was at the at the mastermind, and he said, you know, if you have a whale, that's an issue. And they are a whale. Um >> Heard.

2:19>> So, we're just trying to figure out how to >> Well, you have two options, right? >> free from that. >> Either Okay, so actually there's three three doors you can you can knock on. So, door one is you can try and decrease the risk of this specific whale by getting them to commit to longer periods of time and more business uh through longer contracts. That's option one. Option two, you can attract more whales. Option three, you can say, you know what, this is too risky. I want to do I want to get some more minnows, but I can get enough minnows privately rather than relying on, you know, the systems.

2:50>> Rather than relying on the broker? >> Yeah. >> Okay. Cuz then we'll be competing with them before the same schools. And and we're trying to stay away from kind of biting the hand that feeds us, you know? >> Yeah. No, I understand. Well, so you can't So, can you not Basically, does this guy have a complete monopoly on the entire area of all schools? >> No, no. It's uh there is like it's one of like it's one of the smaller companies in the field, if you want to say.

3:16Um they're having about 20 million. But, the competitors are like 200 plus millions. So, we're kind of growing as they are growing, also. Um but, my biggest issue is that we're not in in control of the sales at all. So, we're just kind of like getting whatever we're eating what whatever they can catch. We can't catch our own in a way.

3:40>> Well, long term, the dependency is not good. >> Yeah, of course. You just I learned that at the the mastermind. >> Yeah, yeah, yeah. Yeah. Um >> So, um what I was thinking is potentially that we have like our own we have built our own like uh we white labeled an app very similar to Uber if you want to say. >> Right. >> And we were thinking of going after private pay. So, where it's like parents, you know, serving the the people that are able to afford like $40 $60 rides per day for their students.

4:20>> So, is that not biting the hands that feed you? >> No, cuz they're only doing, you know, school direct to school contract. >> Then then we then we agree. So, to me what you just described is door three. That's what I was saying earlier. So, one is Yeah, so yeah, we're we're aligned there. I'm not I I'm I'm okay. That's what I say minnows. That's what I mean. Like individual onesy-twosies is going to be the minnows. >> Okay.

4:44>> Yeah, but if you can get them direct then that seems fine to me. Like you might even be like you're in a space where I would be it would not shock me that you might have absurd CAC LTV ratios. >> Yeah, I I see. Yeah, it's just about capturing that one like like once the lead comes in they're probably going to be worth, you know, thousands of dollars. >> If they as long as the the the driving experience for the kid is at least positive enough that the parent wants to keep going, you're you're in the nuisance business.

5:13And that means like you're doing something that other people don't feel like doing. And so, with nuisance businesses, people pretty much just like as long as it meets a certain caliber, they'll just never think it about it again and just let it keep going. So, it's kind of like trash. It's kind of like alarm. It's like no one's like, "Oh man, my alarm system is so good." Or "My trash removal is so good." It's just like you just got to do it and not mess up. And as long as you don't mess up, they'll pretty much stick with you. Yeah, exactly. So, you're in the nuisance business. And so, I I think as long as you have a channel where you can require customers, I think the white label app thing is seems a little bit like 201, a little bit advanced. I'd rather just be like is there a way that we can, you know, post on Thumbtack, post on some of these maybe more local things in order to or maybe it's local ads.

5:57>> So the thing is we're thinking about that. Like it started off as that, but we don't want to have our own vehicles cuz right now all the drivers are 1099. >> Okay. >> They're all using their own vehicles. So we want to keep the same structure if you want to say. >> Okay. >> Um and so >> the acquisition matter for that though? >> I'm sorry that what I'm saying. >> How did like but like we're talking about advertising though. So how does that affect like the fact that you have 1099 drivers versus employee drivers?

6:23What does that change? >> Um it will change um the way we um so the the way it's advertised. So we can't advertise as a So we can't advertise as a transportation company, but we can advertise as a transportation platform. Does that make sense? Like there is cities that have >> Yeah, I got you. Yeah, to me that changes Yeah, I got you. I don't think that changes very much though for for what for what we're talking about. That's more semantics.

6:54>> I Could you elaborate on I'm sorry. I was talking on what you meant earlier? >> So you need to advertise a way to advertise I'll say your transportation platform I'll put this in quotes here so that you can acquire customers who will then use the services through your distributed base of drivers, correct? >> Yes. >> Right. And so fundamentally that's all this is going to come down to and so we need to either like you could still post on you know, Angie's List. You could still run ads. Either of those things will still work. Whether you're actually doing the delivery or a 1099 is doing it matters very little from an advertising perspective.

7:26Cuz the job to be done for the service is still the same to the end user. So the promise in the advertising or the promotion will remain the same. We will pick up your person. They will get dropped over here and we will do it on a consistent basis and they will not complain. That's the promise. And so as long as we can to customers at a decent price and know we can recoup it on some regular basis, that's not a bad gig. I do think that it might be worth having some sort of one-time setup fees so they can offset CAC, but I would just look at what CAC looks like in the beginning for either of these acquisition channels.

7:59Meaning, whether it's Thumbtack or it's paid ads, I would just look and see what it actually costs just to see. And either we have to improve our marketing once we find out that CAC is, or we can change the money model such that we can break even on the front end and then let the back end be margin over the long haul. Does that make sense? >> Yes, definitely. Okay, I see. Uh cuz I was thinking of uh where you know, if we could kind of set it up where it's more like a subscription model. >> Yeah, of course.

8:24>> And that would kind of give them an advantage on the >> Totally. >> on the pricing, if you want to say. >> Totally. >> Okay, so then that we can recoup our >> Yes. >> CAC or you can have them prepay, you can have them like just just so you have some some some weapons in your arsenal, okay? So >> Yeah. >> The Money Models book, I talk about this extensively on discount continuity and bonus continuity, all right, in the continuity chapter. Um but so, weapon number one you have is if you're going to go in memberships, you always have you have unlimited names for fees, onboarding, setup, you know, what a first time, first month, whatever it is, you can charge a certain amount of money up front one time to get somebody on.

8:59And the main purpose of that is to pay the cover you cover the cost of acquisition. Beyond that, you still have other things so you can still say, "Hey, we only do three month like if you didn't want to charge that, you could say, "We only do minimum three months." That would be an option. Right? It's like, "Listen, if we're going to have, you know, if we're going to dedicate a driver and they're going to be full-time on this, you know, we need minimum three month commitments." Now, you can move, you know, you can step that up and down depending on, you know, the cash flow for the business, but these are ways that you can accelerate it. You can also have prepayment discounts for people you know, buy buy 10 get two for the year to again accelerate cash flow in the business, pull it forward.

9:30Now, will people be willing to prepay for the year? That feels less likely for this type of service, but I think you could for sure get one to three months. >> Yeah, yeah, we have we actually I had to test it kind of some ads. >> Yeah. >> And then we were able to get, you know, a decent I think it was like $40 per client uh that would sign up for a month and then we told them, "Hey, we're actually going to you know, we we make came up with something just to tell them, "Okay, we're not going to service it right now." But keep them happy with the same time.

9:56>> Well, do you feel clear on what you need to do? >> Uh yeah, no, it helps a lot. Um okay, so basically not to obviously to like stay keep that second section where we're just kind of fulfilling for other company or doing the dispatch for that company. >> Mhm. >> But also kind of grow this side on our end. >> Yep. >> All right, I guess private side. >> Rock and roll. >> Wonderful. Thank you, man. >> Congrats. >> Appreciate your time. Thank you, guys. >> Appreciate you. Thank you for joining us.

10:22>> Thank you very much. >> All right. If you like this video and you're a business owner who wants to break through your current revenue ceiling, I distilled every lesson from scaling 10 businesses past 10 million and three businesses past 100 million into a completely free scaling road map that I've used to go from zero to one, zero to 10, and zero to 100 plus. And so you can click here and you can check it out. Again, absolutely free. And since you're a business owner, appreciate you and uh enjoy.