(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here.
Look, today we're gonna talk about how you
can actually scale app users.
Matter of fact, you ever thought about having
an app and you already have an app?
We've got the guy here that literally teaches
how to get 10,000 plus users for
that app.
But here's the cool thing.
Not only does he teach you how to
get the users for the app, the next
thing is he teaches you how to then
attract investors.
I mean, literally their formula gets you in
front of tens of thousands of users.
Once you get those users, then he's actually
connecting you with the investors that then want
to invest.
I mean, I've never met anybody that does
that before.
You haven't either until today.
And here we are with Jonathan Maxim.
Jonathan's actually the founder of Viral App Launch,
where he actually helps tech startups and app
founders scale to 10,000 users plus and
prepare for investor growth.
So actually since 2016, he has worked over
150 apps, specializing in user acquisition, specializing in
monetization and investor readiness, the core drivers of
sustainable startup success.
And his proven growth system has delivered standout
results, including leading TikTok's regional launches with 22
,250 new users per month across the UK,
USA, and Brazil, actually optimizing conversion strategy for
Universal Music Group to increase annual revenue by
2.2 million and actually helping HeyPal scale
to 1 million users.
1 million in just six months.
Now, Jonathan actually works closely with both Bootstrap
founders, seeking smart, efficient growth and funding startups,
aiming for rapid, profitable scale.
And his mission is really pretty simple.
It's to help founders turn promising apps into
scalable, revenue-generating businesses investors want to actually
back.
Jonathan, what's up, man?
Thanks for coming to the show today.
Yeah, thank you.
I don't know if I can live up
to that introduction, but I'll do my best.
You're the only guy that like, you have
two really unique things you do and you
do like two, you do two of them.
Like there's each one, it's kind of hard
to believe, like you guys are helping people
get 10,000 users.
And then the second part is then you're
helping them get investor introduction.
So how did you even come up with
this idea of doing either of these things,
let alone putting them together?
Yeah, I think the, when you can boil
business down into two, three words like that,
it's obviously very palatable, but you know, there's
a lot more story behind that.
And that's the five years.
So we rebranded in 2023 as Vyral App
Launch.
Prior to that, I had a company called
K&J Growth Hackers.
And that's where we did about 100, 150
launches.
And actually today we've done over 300 of
them, but that was where I worked with
TikTok and some of these other larger companies,
Triller, Universal Music, et cetera.
And I kept seeing the same, I kept
observing the same thing is that these founders,
they want to raise capital, but they don't
have enough traction to raise capital.
So how much traction do they need?
And from my training in grad school was
like, hey, you need statistical significance to say,
hey, this is something that will work at
a macro scale.
Right, and so that became my own kind
of thesis around what makes a company investable
is like, do we have statistically significant proof
that this traction is trustable, right?
Is it real?
In addition to that, do we know how
much it costs to acquire a user and
how much revenue that user generates?
And these are all the things that kind
of, just for me observing these various app
launches that I was doing, that's what kept
coming out is that the investors were saying,
hey, look, we need 10,000 users.
We need to know what your CAC is.
We need to know your LTV.
So those became the pillars of my thinking
and how we launch an offer and a
program dedicated just to that.
So after I had that learning and that
observation from working on launches over a million
users, 100K or 10K, I actually took those
experiences to Facebook ads and I made a
split test variation.
So I'd make like one ad graphic that
had 10 different messages on it, 10 variations.
And split test does 10 investor introductions, 20
investor introductions, 10,000 users, 100,000, a
million users.
Which of those got the highest click-through
rate, highest conversion rate?
And so that's how I ultimately landed on
10,000 users.
I split tested my way to finding the
message that resonated the most with users or
with founders, I should say.
And that's ultimately how I landed on that.
And what's funny about it is that I
have programs guaranteeing a million users and the
programs that guaranteed 10,000 users had more
interest.
So I went with the smaller commitment.
Of course, why not?
It's easier for us, right?
10,000 users, to me, that's kind of
small ball, but it's a big game for
a new founder.
So that turned out being the sweet spot.
So we launched that in March of 2023
and it's been printing ever since.
I mean, the programs get really good results.
The students and clients are happy.
So we just stuck with it.
Didn't see a reason to adjust.
Yeah, I love it.
And I love that you got there by
beta testing to figure that out.
And I also love that you pointed out
because there's a lot to be said by
that.
Like when you promise such a high number,
sometimes it seems so unobtainable and unbelievable to
people that they don't really take it credibly.
I see.
And then like 10,000, like you said,
that's like a really practical number in somebody's
mind.
They can even conservative for probably what they
really could.
So what do you do?
Because what I see, and I don't know,
but I think about a podcast, right?
On podcasts, there's who knows how many, a
gazillion podcasts that are created, but a very,
very, very small percentage ever really end up
making it after a certain point.
I would think the app world's pretty much
the same where like everybody's creating some kind
of app, but yet only a very, very,
very minute percentage of those ever get real
traction and become something that's investable.
So what do you find?
Like, what are the types of things that
you're doing to help your tribe actually go
out there and then find that 10,000
plus users?
Let's back up a little bit.
So these days, anybody can make an app
in a few days or a few hours
using Repl.it or Lovable.
So really anybody can be a founder.
What happens when those founders come into the
space, they build an app and they spend
much time making it nice only to find
out that they have zero users and zero
revenue.
And so then they come to me and
they're like, we gotta launch this thing, right?
We need to get users.
And I think the mistake I made the
first time that I launched an app, because
I got my first app to 46,000
users.
It got way past the benchmark of investable,
in my opinion, at least on my thesis
these days, but I didn't get investment, right?
And what I learned from that was, I
hadn't decided what my own benchmark was.
Is it 10,000 users?
Is it profitability?
Is it, I don't know, LTV to CAC
or some other ratio, average order value per
user, average revenue per user?
I hadn't decided that for myself.
And a lot of these new founders don't
know what to decide as their own benchmark
of what makes their app worthy of further
investment.
And 10,000 turned out to be a
benchmark where we can determine the app's profitability
by that stage.
We can have statistically significant data on how
much it costs to acquire a customer, how
much revenue that customer generates.
And so I observed that that was just
a good benchmark for people.
So I also had a podcast too, and
I ran it for four years and I
got hundreds of thousands of plays and all
these great guests and great introductions, but I
hadn't decided what my own benchmark of success
on that was.
Was I trying to get sponsorships?
Was I trying to reach a certain amount
of people per month?
Was I trying to get business out of
it?
And I ultimately pulled the plug on the
podcast because I hadn't decided that.
So I think it's important for founders to
reflect on like why they're building the business
and what they would consider investable.
For me, my thesis, if I'm gonna invest
in a startup is I wanna see 10
,000 users.
I wanna see a CAC.
I wanna see an LTV.
I wanna know how profitable this is with
proof.
So that's what I consider investable.
So I just think it's important to understand
their why because a lot of people just
don't think about their why.
And I didn't think about my why either,
which is kind of like what led me
astray, right?
Now, how do we get them there?
Well, we go through that split testing process
because let's just say you make a dating
app, right?
Like anybody in any region could potentially use
it.
It could fit into 100 different niches.
For example, you could do it based on
ethnicity.
You could do it based on religion or
whatever.
We gotta find out which of those niches
is most profitable for you.
So we'll run a split testing campaign with
meta ads just to figure out, hey, is
it Blacks?
Is it Jews?
Is it Asians?
Is it Mexicans or what?
Like who's this most appealing to this product?
Or is it millennials, Gen Zs, Gen Xers?
And then figure out which of them is
the most engaged and which one has the
most revenue per user.
And then ultimately that's where we double down
and that's where the profit engine begins because
let's just say millennials are paying a 10X
return on ad spend and Gen Zs are
paying a 2X.
Yeah, Gen Zs are still profitable, but the
millennials are five times more profitable.
So just bringing that data to the table
and helping a founder understand this is how
profitable our business is and with which audience.
And it helps them decide, okay, I'm gonna
go target the millennials then.
And then they can start to not just
mold their messaging and their app and their
product experience around it, but also the company
and the brand.
And so that really sets a good foundation
to say, okay, this company is working.
You don't have to go get 100,000
users.
You don't have to get a million users
to determine if this is a viable business.
You really just have to get to that
few thousand in my opinion, because that's where
you get statistical significance.
That's where economics and statistics actually work.
So at that point, if I got an
app with 10,000 people on it, then
that's enough data for me to say, okay,
cool, I'm gonna keep investing in this.
And that's also for a lot of other
investors as well.
It makes a lot of sense.
And I'm glad you did that because I
think I came into you like a lot
of people wrongly come into you and say,
hey, look, I got this thing, I built
this thing, let's launch it.
And you're like, whoa, wait a second.
Like a company, you're kind of doing it
all out of order.
What you should be doing is if you
have a concept or an idea, the next
thing is to figure out what your goal
is.
Like, what are you trying to do?
You're trying to sell a bunch of units
like Facebook, for example, they didn't care about
profitability in the beginning.
All they cared about was users, right?
Or your goal to come in and make
a certain amount of money perhaps and figure
out what the ultimate goal is.
Then with that, do enough research to figure
out who the target demographic may be.
And then maybe even do some initial testing
to see does this thing, can this game
gain traction?
So it sounds to me like what you're
saying is like, you need to really test
the idea, know where you're going, what your
goal is.
And then basically figure out like, does, is
this idea even gonna gain traction before you
even think about scaling?
Is, am I hearing that right?
Is that what people need to be do
where they need to be thinking when they're
coming into you in the beginning?
That's where I would recommend it, right?
I'm just a practical guy.
I'm like, I wanna see data.
I wanna see profitability.
I'm a cashflow guy.
A lot of founders are not cashflow.
A lot of tech founders seem to think
that there's a lottery they put their hat
in and then one lucky startup becomes a
multimillion dollar business, but that's not how it
works.
I mean, you know how it works.
It's a break my bank thing.
So yes, I definitely encourage people to think
that way, but a lot of times they
can't think that way until they have seen
the light, if you will.
So I produce a ton of content on
my own YouTube channel.
I'll walk through all of these processes.
I'll give them exactly everything that we do
internally.
But again, you have to taste it and
see it for yourself.
And that's kind of the paradox of business
is you don't necessarily wanna adopt somebody else's
methodology around it until you've proven it, but
there's only one way to prove it, which
is to actually do it.
And as you probably have observed, you don't
hit any home runs if you don't take
swings.
So you might hit a bunch of strikeouts
and balls, but one of them's gonna be
a home run.
So I really encourage people to take the
swing.
You know, I think about coaching in the
same way.
Like I look at coaching, sometimes people are
trying to sell me like 50, 100K coaching
programs.
And to me, it's like so ridiculous and
irrational.
It's almost insulting.
But at the same time, I've joined, like
I did Dan Martell's coaching program.
I take it, of course, I have one
breakthrough.
And now that breakthrough is making me over
$100,000 a month on just one of
his recommendations that he made.
And in total, I paid a fraction of
that, right?
So I think like, if I could just
be candidly, like people need to stop pussyfooting
around and be real men and step up
and like really punch hard.
And a lot of these founders are gun
shy.
And frankly, they kind of come off as
pussies to me.
And that sounds kind of like condescending and
negative.
But like, I would say that about myself,
if I was sitting there in a pensive
state and not taking action, nobody can really
respect that.
And so the only way that you learn
is just by taking that swing and going
for the crack.
And when you make contact with the ball,
great.
But of course, sometimes there's just not gonna
be that.
You will, of course, learn from it, right?
I forget who said it, but it's either
a win or a lesson.
There is no losing.
You're only a loser if you look at
it as a loss.
Like you're a learner if you do the
latter, right?
Yeah, no, and it makes a lot of
sense the way you're describing it, right?
I mean, I think a lot of people
come in, a lot of these guys are
idea guys.
So they have an idea and then they
even build the thing, which they enjoy that
part of it, but then taking it to
market scaling, that's a lot of work, right?
Like, I mean, there's a lot of work
behind that.
And then the problem is, is do you
even have- And it's not the fun
work.
Yes, it's the hard work.
It's the boring work.
And so that's the part where I think
that some of these people get to a
lot that are in the creative types, which
I know that you know them.
That's creativity is not my strong suit.
I'm better at other things, but they create
and love that.
Then they get it and they're afraid to
do the hard work because it just might
not work.
But the reality is they have that fear
because they don't have a goal.
They don't know where they're going.
They haven't done the research.
They haven't done the demographic.
They don't know their demographic.
They haven't tested to see if it's viable
yet.
And to your point, if you can come
into that and you have that planned out,
then I think you can go into confidence
and go all in to push it.
But it sounds like you're closing that gap
because that's what seems like creates the problem
is they don't have confidence in what they're
doing to even take the thing.
Correct.
And a respectable advisor, consultant, coach, whatever you
want to call it, they will be the
ones who are willing to give you that
hard truth.
And that's why I'm so raw and forward
and candid and blunt about this stuff because
somebody needs to rattle their cage.
If I can just wake them up from
this slumber of working on product forever, working
on product is like, it's mental masturbation because
you're building more badass features.
And by the way, I'm speaking autobiographically here.
I've built apps with Repl.it. I have
one app that's got like 12 features on
it.
Really, if you're building an app, you really
only need one feature, right?
You should be solving an 80-20 problem
there, right?
So I'm not saying that I'm objectified from
this tendency, but everybody gets this obsession with
building features and now it's become so accessible
through AI that they can just keep building
on.
But what happens, the more you vibe code
features in, the more wires that cross on
the backend of the app and the harder
it is to get that actually live.
So one of the multifunction apps that we
built, we're actually breaking it down and doing
single function apps for all the 12 different
features because we could not, even with our
developers, get that live.
So you think about a first-time founder
encountering that.
I've built much three apps myself before, like
whole companies around them.
So if I'm having that kind of challenge,
somebody who's never done this before, there's no
way they're gonna be able to get live.
And so, again, at some point, somebody needs
to shake their shoulders and say, okay, time
to wake up from the slumber.
Let's go launch this damn thing.
Let's go see if people are actually interested
in the product.
And that fear of launching is because they're
expecting bad feedback, right?
But as you know in business, feedback is
positive even if it's negative, right?
And so that's, again, why I'm so kind
of hit them over the head with it
because I'm not sitting here to pander to
people.
I'm not trying to just be a feel
-good guy.
I'm not a mindset coach.
I'm not a guru.
I'm like a businessman who's obsessed with cashflow
businesses, obsessed with average and things like that.
And I don't fault anybody for it either
because I was that guy before somebody shook
my shoulders and slapped me across the face.
But I'm just hoping that the 15 years
of being slapped in the face that I've
encountered can be reduced to a couple months
for somebody else.
Yeah, it makes a lot of sense too.
I mean, ultimately, come up with a concept.
Come up with something simple that solves a
problem, ultimately.
I'm not saying simple, but I mean, keep
it simple in the sense that it should
be doing one thing and that one thing
should more than likely be solving the problem.
And then you build that thing, right?
And then if you have that thing, then
get it out to market as quickly as
possible to figure out who your demographic is.
And is it gonna gain traction or not?
Like you've got minimal into it at that
point that if it doesn't work, doesn't work.
And then you can abandon and go test
something else without going all in.
And then, like you said, take your shots
at that.
And then once you do that, then you
figure out what gains traction and what's popular.
Then from there, you can kind of expand,
invest in that more, do more things, go
to get more users, and then start actually
getting to a point where you have something
viable to get it to invest.
Yeah, it reminds me of this story.
There was a meal, like a fresh grocery
delivery early on, like when grocery delivery was
first becoming popular that I launched in Nashville.
And I asked the founder, I said, what's
the target audience?
And she said, female millennials with one child,
okay?
That's what she was.
I said, okay, cool, fair enough.
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They bring basically leftover organic vegetables in a
box and put it on your doorstep.
I said, I'll target that audience for you.
But what I didn't tell her is I'm
also gonna open it up to every age
group and gender.
And then 10 miles around Nashville where we
were launching this thing.
After launch, millennial females with one kid, that
audience came in $50 per customer acquisition for
a $50 per month service.
So they break even essentially on revenue at
least after two months.
Profitability probably takes them five months.
You figure they're making 20, 30% profit
on that thing.
You gotta be five, six months in.
So that was their, what I would call
their fundamental metrics of the business after targeting
that audience.
Now there's another audience, females over 65 years
old, who were coming in at $10 per
customer acquisition cost.
So five times cheaper, profitable in the first
month.
So old ladies were more profitable than the
young, sexy, beautiful, millennial whatevers.
Five times more profitable.
Now her hypothesis going into it was, I
built this brand and this company around servicing
millennials like myself, but who turned out to
be a better customer for them was old
ladies.
Who would have thought of that?
Maybe they don't feel like going shopping.
Maybe they can't walk anymore.
Maybe they can't drive anymore.
Who knows?
All I know is that it's five times
more profitable and you get profitable at month
one and you can scale that business literally
five times as fast by just dumping money
into the ads at that point.
When you got a money printer that puts
$2 out for every $1 you put in,
you're at that damn machine every single day,
right?
So you can see how our intuitive blinders,
our limiting beliefs subject us to not having
that willingness and openness to be told that
we're wrong.
Until at one point, and I observed that
you've had this transformation in your own entrepreneurial
journey.
At one point, you've been beaten down and
broken so many times life has just smashed
you to a point you're completely humbled.
You're on your knees before God and you're
praying for mercy.
And then you say, fuck it, I don't
care anymore.
I'm just, I'm gonna do what wins.
I don't care what I think or how
I feel about it.
I don't care if I'm targeting millennials or
if I'm targeting old ladies.
I'm gonna make this thing work.
And then when you have that ego death,
as I would call it, that's when you
start winning, right?
Again, so how can we reduce that time
to the ego death for these founders who
come in thinking that they're gonna do one
thing and then the market says, I want
something else.
And if they're humble enough to say, okay,
cool, I see what that is, right?
Like we launched another app just recently, which
is for tracking baby feeding, sleeping, all the
stuff for a newborn.
And caregivers turned out to be a more
profitable audience.
It's like 80% more profitable than moms,
right?
So just before I got on this call
with you, I was talking to the founder
and he's thinking about building an app for
caregivers now.
And it makes a lot of sense, right?
Like they're maybe caring for multiple kids or
they're the ones who are actually caring for
the kids because moms have nannies.
So you get these surprise insights like that.
And if you're willing to read the writing
on the wall, you'll move very, very, very
fast.
And if I were to start over as
a tech founder now, that's exactly what I
would do.
I would say, put my ego completely aside.
I'm gonna fix this problem and provide this
app as a solution and whoever wants to
buy it, whatever price, like whenever it's most
profitable, that's what I'm gonna do.
So what do you find is some of
the best and most effective ways to test?
You talked about running ads, for example.
I mean, what's some of the easiest ways
to see what you're discovering?
Like, are you gonna gain traction?
Who is the demographic that you're actually gonna
gain traction with?
Are you doing Facebook ads, Google ads, YouTube
ads?
Does it matter on like the type of
app that it is?
The app type doesn't matter.
It can be web app, mobile app, native.
It can be mobile web.
It can be browser extension.
I don't care.
We're always gonna use meta ads because they
offer the ability to split test the most
effectively and to get the cleanest data.
Google, for example, mixes all the data together
and you just see how overall performance was.
You can't see it by audience or by
ad.
So we use meta.
We do 10 ad variations.
Just think about this rule.
We call it the 10 by 10 by
10 rule.
So 10 ads, the graphics are all the
same.
The messages are different.
That means we're isolating just one variable.
And then 10 ads broken into 10 ad
sets, right?
So each ad has its own ad set.
So they're each running individually and separately from
each other.
And then $10 a day for 10 days,
okay?
That's our internal rule, the 10 by 10
by 10 rule.
10 ads, $10 a day, 10 days of
runtime.
If you run that variation, you'll understand which
messages are most captivating, which hooks are most
captivating for users, aka which ones are most
profitable.
You'll establish customer acquisition costs because you will
acquire customers if you spend $1,000 on
ads.
And then you also understand the demographics.
So age, gender, location, and psychographic characteristics too
of your winning audiences.
So a lot of companies can be profitable
within two weeks of launching their split testing.
Because what would come out of that would
be like millennial females, 25 to 34 are
50 bucks per customer acquisition, whereas males 35
plus were 25 bucks per acquisition, twice as
profitable.
And when you have that data in hand,
just think of how much, it's like having
the keys to a Ferrari.
It's like, damn, I can do anything with
this.
Yeah, and it's cheap.
Like that's crazy.
You're talking about like a thousand bucks, whatever,
you're able to figure out a lot of
stuff.
Like are you even able to gain traction,
your cost of acquisition, the type of message
that's gonna work.
I mean, a lot of specifics and that
even gives you a lot of demographic info
as well.
Do you usually know that soon in if
you've got something scalable or not?
Yeah, you're asking such smart questions here.
Yes, a thousand bucks is very cheap to
go conduct real market research and get real
results.
Not, hey, I would like to buy your
service.
Hey, I didn't buy your service, right?
Or I did start a free trial.
So it is a super cheap mechanism.
But before I got into this, I was
working in corporate.
I was at Xfinity at Comcast and I
would conduct these research studies and we would
pay tens of thousands of dollars.
Each research study was 50 to 100K.
Why does Chicago make a focus group of
10 to 12 people, watch through a double
-sided mirror, take notes, have qualitative quantitative analysis,
all this shit.
We'll need to find out the same stuff
that I can find out for a thousand
bucks on my ads now.
So I took that methodology and applied it
to advertising and media buying.
But in most cases, let's just say your
product is a hundred bucks a month.
More than likely, I would say 90%
plus chance you will acquire some customers after
that first thousand dollars of spend.
And you all understand how much it costs
to acquire a customer and therefore how profitable
it is.
Because if your customer pays a hundred bucks
a month and you pay 300 bucks to
acquire him, you know that, hey, I gotta
wait three months, but if I can keep
this customer around six months, I'm making two
X my money back.
So yeah, a lot of times we'll know
the profitability within that first set of split
testing, which is usually 10 to 14 days
to let the algorithm run fully on meta.
By the way, we do no targeting in
that process.
We let the, what's called the Androvida algorithm,
the new meta ads algorithm, which is awesome.
It's so, so profitable.
Like it makes companies money so fast nowadays,
but we run it without targeting and Androvida
just targets people based on the content that's
in the ad copy and in the ad.
So whatever content that you're putting in the
ad, let's just say fix your credit within
30 days or less, or get approved for
a hundred K in funding.
Let's just use some hooks that you might
have for your business.
It will go find people who are looking
at getting funding or go look at people
who need credit repair and it will pick
them on its own and it will do
a better job of it than me or
you could do because it uses AI and
ML, right?
So yeah, a lot of companies can get
it profitable on that first run, 1,000,
2,000 bucks into their ads.
If not, once it's profitable, you got the
money printer.
Yeah, that's it.
And so if not, you gotta go back
to drawing board, figure out the message that
maybe it does and it works.
But if you have something that does work,
then at that point, you could potentially start
scaling it, right?
And then if you're profitable, then you can
start scaling, narrowing down, now you know your
message, now you're getting your demographics and now
you're gonna improve your ROI.
And then at what point, cause the other
part of what you guys do is help
people then find investors.
Do you, 10,000 is the number you
put out there, but it's not necessarily the
matched number.
Like, when do you know, when are you
helping then your tribe know that it's the
right time to then go get investors to
be able to start scaling?
Like at face value, I'll tell them 10
,000 users, establish CAC, establish LTV.
But what I'm really looking for before I
go in and introduce them to my personal
contacts and put my name on the line
is gonna be, is this founder investable?
Are they coachable?
Are in a mindset of adaptability and growth?
Is their product effectively staged to pivot as
needed to meet the market's needs?
Now, in a lot of cases, you understand
your CAC, LTV and it's profitable, you got
product market fit right there, right?
But in some cases, whether it's a small
niche or it's a space that's got expandability
or something like that, I'm looking at like
the market size.
And so there's like softer analysis components to
it, but in general, if the founder can
get to that 10,000 users, they have
usually gotten profitable in the process.
We aim to get every app profitable on
a CAC to LTV basis within that first
six months.
So if they've achieved that, then I'm quite
confident to put them in front of investors.
If nothing else, I can say, look, the
fundamentals check out, right?
If you don't believe in the founder, that's
a subjective thing and you can feel that
way.
So I will always work with my founders
to get them to at least have five,
10,000 users before we introduce them to
investors because you gotta understand, I can go
to my network and I can squeeze all
the brownie points out of it and leverage
my introduction.
But what ends up happening is, first of
all, it's not structured, right?
And every sale process should be structured.
I like to do 90 day capital raises,
30 days outreach, 30 days of pitching, 30
days of closing.
If I just go out and introduce investors,
it's gonna be one off here, one off
there.
We're not gonna be able to compare term
sheets, bid them against each other, cause FOMO
is part of it.
And the other part of it is like,
these founders are not gonna be ready to
close the deal without that process materials and
rigor taught to them and also pitch coaching.
So I make sure to always do a
lot of practice sessions before they go in
front of investors, especially if they're my introductions.
I always jump on the investor calls with
them because they need somebody with a lot
of punch to represent the growth aspect of
the business.
And I don't want them to take 20
investor meetings if their close rate's gonna be
0% because they didn't have the fundamentals
in place.
So I always make sure the fundamentals are
in place so that we can close at
least 20% on those qualified investors.
Yeah, so you're getting to that point.
I mean, at that point, you've got traction,
you've got a founder that is good and
coachable.
You've got a concept that is able to
pivot and be flexible with the market.
And then at that point, you feel like
they're ready to be introduced to investors.
And sounds like at that point, they're able
to get the investment.
But here's the thing, if they're getting the
ROI, what are they doing with the money?
Like realistically, if I'm doing it and I'm
spending 50 bucks and I'm making money right
away in the first month, well, at that
point, they could start scaling that using the
money that they're making to scale.
So what do you see that these investors
are using a lot of the capital for
at that point?
That's a really good question because venture capital,
just the industry has, I think, reduced 38
% year over year, like the amount of
money moving through that industry.
And it's because startups just don't require that
much capital anymore.
Before we got on, I was talking to
you about alternate funding.
A good method of funding is venture debt
because you don't give up money on the
cap table, but you can still get large
seven figure amounts and use that solely for
running ads to acquire customers of which you'll
get paid, let's just say, back in three
months, and then you pay the debtor back.
So there's other better methods than venture capital.
You just don't need that kind of cash
to scale a company anymore.
But if you're, this is why I say
founders gotta know what they're building because if
you go into it thinking like, okay, I'm
gonna make a social app and I'm not
gonna charge users, I'm gonna be the next
Facebook, you're gonna need hundreds of millions of
dollars, essentially equivalent to what Facebook can do
to go and dominate them.
Whereas if you wanna make a cashflow app,
like a SaaS, like a software service, maybe
for salespeople or credit people or something, you
can grow that company just through its cashflow
over time.
So usually the investment is used for advertising.
It's the most direct ROI that you can
get, right?
So why not go with the most measurable
means