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(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.

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Each week, we talk about the growth strategies

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that matter most to entrepreneurs.

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Listen in as we discuss the secrets to

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getting credit and money to start and grow

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your business.

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And enjoy as we talk with seasoned business

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owners, coaches, and industry leaders on a variety

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of topics from advertising and marketing to the

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nuts and bolts of running a highly successful

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business.

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And now, to introduce the host of our

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show, financial expert and award-winning author, Ty

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Crandall.

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Hello, and thanks for joining us today.

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I'm super excited you could be here.

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Look, today we're gonna talk about how you

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can actually scale app users.

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Matter of fact, you ever thought about having

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an app and you already have an app?

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We've got the guy here that literally teaches

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how to get 10,000 plus users for

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that app.

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But here's the cool thing.

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Not only does he teach you how to

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get the users for the app, the next

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thing is he teaches you how to then

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attract investors.

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I mean, literally their formula gets you in

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front of tens of thousands of users.

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Once you get those users, then he's actually

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connecting you with the investors that then want

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to invest.

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I mean, I've never met anybody that does

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that before.

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You haven't either until today.

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And here we are with Jonathan Maxim.

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Jonathan's actually the founder of Viral App Launch,

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where he actually helps tech startups and app

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founders scale to 10,000 users plus and

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prepare for investor growth.

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So actually since 2016, he has worked over

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150 apps, specializing in user acquisition, specializing in

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monetization and investor readiness, the core drivers of

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sustainable startup success.

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And his proven growth system has delivered standout

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results, including leading TikTok's regional launches with 22

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,250 new users per month across the UK,

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USA, and Brazil, actually optimizing conversion strategy for

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Universal Music Group to increase annual revenue by

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2.2 million and actually helping HeyPal scale

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to 1 million users.

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1 million in just six months.

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Now, Jonathan actually works closely with both Bootstrap

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founders, seeking smart, efficient growth and funding startups,

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aiming for rapid, profitable scale.

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And his mission is really pretty simple.

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It's to help founders turn promising apps into

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scalable, revenue-generating businesses investors want to actually

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back.

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Jonathan, what's up, man?

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Thanks for coming to the show today.

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Yeah, thank you.

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I don't know if I can live up

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to that introduction, but I'll do my best.

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You're the only guy that like, you have

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two really unique things you do and you

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do like two, you do two of them.

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Like there's each one, it's kind of hard

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to believe, like you guys are helping people

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get 10,000 users.

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And then the second part is then you're

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helping them get investor introduction.

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So how did you even come up with

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this idea of doing either of these things,

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let alone putting them together?

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Yeah, I think the, when you can boil

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business down into two, three words like that,

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it's obviously very palatable, but you know, there's

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a lot more story behind that.

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And that's the five years.

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So we rebranded in 2023 as Vyral App

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Launch.

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Prior to that, I had a company called

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K&J Growth Hackers.

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And that's where we did about 100, 150

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launches.

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And actually today we've done over 300 of

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them, but that was where I worked with

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TikTok and some of these other larger companies,

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Triller, Universal Music, et cetera.

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And I kept seeing the same, I kept

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observing the same thing is that these founders,

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they want to raise capital, but they don't

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have enough traction to raise capital.

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So how much traction do they need?

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And from my training in grad school was

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like, hey, you need statistical significance to say,

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hey, this is something that will work at

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a macro scale.

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Right, and so that became my own kind

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of thesis around what makes a company investable

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is like, do we have statistically significant proof

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that this traction is trustable, right?

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Is it real?

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In addition to that, do we know how

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much it costs to acquire a user and

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how much revenue that user generates?

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And these are all the things that kind

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of, just for me observing these various app

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launches that I was doing, that's what kept

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coming out is that the investors were saying,

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hey, look, we need 10,000 users.

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We need to know what your CAC is.

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We need to know your LTV.

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So those became the pillars of my thinking

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and how we launch an offer and a

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program dedicated just to that.

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So after I had that learning and that

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observation from working on launches over a million

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users, 100K or 10K, I actually took those

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experiences to Facebook ads and I made a

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split test variation.

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So I'd make like one ad graphic that

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had 10 different messages on it, 10 variations.

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And split test does 10 investor introductions, 20

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investor introductions, 10,000 users, 100,000, a

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million users.

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Which of those got the highest click-through

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rate, highest conversion rate?

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And so that's how I ultimately landed on

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10,000 users.

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I split tested my way to finding the

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message that resonated the most with users or

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with founders, I should say.

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And that's ultimately how I landed on that.

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And what's funny about it is that I

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have programs guaranteeing a million users and the

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programs that guaranteed 10,000 users had more

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interest.

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So I went with the smaller commitment.

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Of course, why not?

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It's easier for us, right?

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10,000 users, to me, that's kind of

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small ball, but it's a big game for

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a new founder.

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So that turned out being the sweet spot.

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So we launched that in March of 2023

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and it's been printing ever since.

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I mean, the programs get really good results.

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The students and clients are happy.

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So we just stuck with it.

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Didn't see a reason to adjust.

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Yeah, I love it.

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And I love that you got there by

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beta testing to figure that out.

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And I also love that you pointed out

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because there's a lot to be said by

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that.

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Like when you promise such a high number,

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sometimes it seems so unobtainable and unbelievable to

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people that they don't really take it credibly.

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I see.

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And then like 10,000, like you said,

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that's like a really practical number in somebody's

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mind.

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They can even conservative for probably what they

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really could.

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So what do you do?

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Because what I see, and I don't know,

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but I think about a podcast, right?

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On podcasts, there's who knows how many, a

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gazillion podcasts that are created, but a very,

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very, very small percentage ever really end up

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making it after a certain point.

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I would think the app world's pretty much

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the same where like everybody's creating some kind

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of app, but yet only a very, very,

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very minute percentage of those ever get real

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traction and become something that's investable.

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So what do you find?

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Like, what are the types of things that

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you're doing to help your tribe actually go

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out there and then find that 10,000

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plus users?

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Let's back up a little bit.

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So these days, anybody can make an app

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in a few days or a few hours

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using Repl.it or Lovable.

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So really anybody can be a founder.

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What happens when those founders come into the

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space, they build an app and they spend

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much time making it nice only to find

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out that they have zero users and zero

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revenue.

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And so then they come to me and

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they're like, we gotta launch this thing, right?

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We need to get users.

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And I think the mistake I made the

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first time that I launched an app, because

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I got my first app to 46,000

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users.

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It got way past the benchmark of investable,

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in my opinion, at least on my thesis

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these days, but I didn't get investment, right?

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And what I learned from that was, I

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hadn't decided what my own benchmark was.

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Is it 10,000 users?

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Is it profitability?

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Is it, I don't know, LTV to CAC

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or some other ratio, average order value per

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user, average revenue per user?

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I hadn't decided that for myself.

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And a lot of these new founders don't

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know what to decide as their own benchmark

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of what makes their app worthy of further

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investment.

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And 10,000 turned out to be a

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benchmark where we can determine the app's profitability

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by that stage.

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We can have statistically significant data on how

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much it costs to acquire a customer, how

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much revenue that customer generates.

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And so I observed that that was just

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a good benchmark for people.

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So I also had a podcast too, and

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I ran it for four years and I

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got hundreds of thousands of plays and all

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these great guests and great introductions, but I

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hadn't decided what my own benchmark of success

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on that was.

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Was I trying to get sponsorships?

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Was I trying to reach a certain amount

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of people per month?

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Was I trying to get business out of

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it?

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And I ultimately pulled the plug on the

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podcast because I hadn't decided that.

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So I think it's important for founders to

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reflect on like why they're building the business

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and what they would consider investable.

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For me, my thesis, if I'm gonna invest

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in a startup is I wanna see 10

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,000 users.

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I wanna see a CAC.

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I wanna see an LTV.

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I wanna know how profitable this is with

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proof.

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So that's what I consider investable.

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So I just think it's important to understand

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their why because a lot of people just

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don't think about their why.

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And I didn't think about my why either,

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which is kind of like what led me

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astray, right?

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Now, how do we get them there?

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Well, we go through that split testing process

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because let's just say you make a dating

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app, right?

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Like anybody in any region could potentially use

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it.

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It could fit into 100 different niches.

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For example, you could do it based on

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ethnicity.

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You could do it based on religion or

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whatever.

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We gotta find out which of those niches

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is most profitable for you.

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So we'll run a split testing campaign with

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meta ads just to figure out, hey, is

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it Blacks?

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Is it Jews?

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00:08:39,580 --> 00:08:40,299
Is it Asians?

274
00:08:40,460 --> 00:08:41,659
Is it Mexicans or what?

275
00:08:41,780 --> 00:08:44,540
Like who's this most appealing to this product?

276
00:08:44,920 --> 00:08:47,960
Or is it millennials, Gen Zs, Gen Xers?

277
00:08:48,380 --> 00:08:50,920
And then figure out which of them is

278
00:08:50,920 --> 00:08:52,480
the most engaged and which one has the

279
00:08:52,480 --> 00:08:53,400
most revenue per user.

280
00:08:53,600 --> 00:08:55,880
And then ultimately that's where we double down

281
00:08:55,880 --> 00:08:57,960
and that's where the profit engine begins because

282
00:08:57,960 --> 00:09:00,600
let's just say millennials are paying a 10X

283
00:09:00,600 --> 00:09:02,900
return on ad spend and Gen Zs are

284
00:09:02,900 --> 00:09:03,660
paying a 2X.

285
00:09:04,080 --> 00:09:06,720
Yeah, Gen Zs are still profitable, but the

286
00:09:06,720 --> 00:09:08,180
millennials are five times more profitable.

287
00:09:08,480 --> 00:09:10,420
So just bringing that data to the table

288
00:09:10,420 --> 00:09:12,240
and helping a founder understand this is how

289
00:09:12,240 --> 00:09:15,560
profitable our business is and with which audience.

290
00:09:15,700 --> 00:09:17,040
And it helps them decide, okay, I'm gonna

291
00:09:17,040 --> 00:09:18,860
go target the millennials then.

292
00:09:19,000 --> 00:09:20,540
And then they can start to not just

293
00:09:20,540 --> 00:09:22,500
mold their messaging and their app and their

294
00:09:22,500 --> 00:09:24,680
product experience around it, but also the company

295
00:09:24,680 --> 00:09:25,240
and the brand.

296
00:09:25,760 --> 00:09:27,440
And so that really sets a good foundation

297
00:09:27,440 --> 00:09:29,740
to say, okay, this company is working.

298
00:09:29,740 --> 00:09:31,500
You don't have to go get 100,000

299
00:09:31,500 --> 00:09:31,820
users.

300
00:09:31,940 --> 00:09:33,140
You don't have to get a million users

301
00:09:33,140 --> 00:09:35,300
to determine if this is a viable business.

302
00:09:35,460 --> 00:09:36,640
You really just have to get to that

303
00:09:36,640 --> 00:09:39,260
few thousand in my opinion, because that's where

304
00:09:39,260 --> 00:09:40,760
you get statistical significance.

305
00:09:40,920 --> 00:09:43,740
That's where economics and statistics actually work.

306
00:09:43,900 --> 00:09:45,580
So at that point, if I got an

307
00:09:45,580 --> 00:09:47,420
app with 10,000 people on it, then

308
00:09:47,420 --> 00:09:48,860
that's enough data for me to say, okay,

309
00:09:48,940 --> 00:09:50,840
cool, I'm gonna keep investing in this.

310
00:09:50,960 --> 00:09:52,760
And that's also for a lot of other

311
00:09:52,760 --> 00:09:53,620
investors as well.

312
00:09:53,860 --> 00:09:54,620
It makes a lot of sense.

313
00:09:54,700 --> 00:09:56,240
And I'm glad you did that because I

314
00:09:56,240 --> 00:09:57,900
think I came into you like a lot

315
00:09:57,900 --> 00:09:59,900
of people wrongly come into you and say,

316
00:10:00,000 --> 00:10:01,320
hey, look, I got this thing, I built

317
00:10:01,320 --> 00:10:02,520
this thing, let's launch it.

318
00:10:02,600 --> 00:10:04,000
And you're like, whoa, wait a second.

319
00:10:04,400 --> 00:10:06,260
Like a company, you're kind of doing it

320
00:10:06,260 --> 00:10:06,920
all out of order.

321
00:10:07,000 --> 00:10:08,400
What you should be doing is if you

322
00:10:08,400 --> 00:10:10,780
have a concept or an idea, the next

323
00:10:10,780 --> 00:10:12,220
thing is to figure out what your goal

324
00:10:12,220 --> 00:10:12,500
is.

325
00:10:12,540 --> 00:10:13,420
Like, what are you trying to do?

326
00:10:13,440 --> 00:10:14,620
You're trying to sell a bunch of units

327
00:10:14,620 --> 00:10:16,620
like Facebook, for example, they didn't care about

328
00:10:16,620 --> 00:10:17,540
profitability in the beginning.

329
00:10:17,600 --> 00:10:18,820
All they cared about was users, right?

330
00:10:18,920 --> 00:10:21,340
Or your goal to come in and make

331
00:10:21,340 --> 00:10:23,120
a certain amount of money perhaps and figure

332
00:10:23,120 --> 00:10:24,660
out what the ultimate goal is.

333
00:10:25,280 --> 00:10:27,740
Then with that, do enough research to figure

334
00:10:27,740 --> 00:10:29,640
out who the target demographic may be.

335
00:10:29,840 --> 00:10:31,980
And then maybe even do some initial testing

336
00:10:31,980 --> 00:10:34,320
to see does this thing, can this game

337
00:10:34,320 --> 00:10:35,400
gain traction?

338
00:10:35,880 --> 00:10:37,020
So it sounds to me like what you're

339
00:10:37,020 --> 00:10:38,280
saying is like, you need to really test

340
00:10:38,280 --> 00:10:40,380
the idea, know where you're going, what your

341
00:10:40,380 --> 00:10:40,940
goal is.

342
00:10:41,060 --> 00:10:43,480
And then basically figure out like, does, is

343
00:10:43,480 --> 00:10:45,740
this idea even gonna gain traction before you

344
00:10:45,740 --> 00:10:46,880
even think about scaling?

345
00:10:47,120 --> 00:10:48,380
Is, am I hearing that right?

346
00:10:48,400 --> 00:10:49,660
Is that what people need to be do

347
00:10:49,660 --> 00:10:51,300
where they need to be thinking when they're

348
00:10:51,300 --> 00:10:52,400
coming into you in the beginning?

349
00:10:52,820 --> 00:10:54,580
That's where I would recommend it, right?

350
00:10:54,680 --> 00:10:55,840
I'm just a practical guy.

351
00:10:55,900 --> 00:10:56,960
I'm like, I wanna see data.

352
00:10:56,960 --> 00:10:58,420
I wanna see profitability.

353
00:10:58,880 --> 00:10:59,620
I'm a cashflow guy.

354
00:10:59,860 --> 00:11:01,880
A lot of founders are not cashflow.

355
00:11:01,980 --> 00:11:04,240
A lot of tech founders seem to think

356
00:11:04,240 --> 00:11:05,700
that there's a lottery they put their hat

357
00:11:05,700 --> 00:11:08,360
in and then one lucky startup becomes a

358
00:11:08,360 --> 00:11:10,060
multimillion dollar business, but that's not how it

359
00:11:10,060 --> 00:11:10,260
works.

360
00:11:10,380 --> 00:11:11,100
I mean, you know how it works.

361
00:11:11,220 --> 00:11:12,220
It's a break my bank thing.

362
00:11:12,740 --> 00:11:14,840
So yes, I definitely encourage people to think

363
00:11:14,840 --> 00:11:16,580
that way, but a lot of times they

364
00:11:16,580 --> 00:11:18,700
can't think that way until they have seen

365
00:11:18,700 --> 00:11:19,600
the light, if you will.

366
00:11:19,860 --> 00:11:21,380
So I produce a ton of content on

367
00:11:21,380 --> 00:11:22,240
my own YouTube channel.

368
00:11:22,340 --> 00:11:23,500
I'll walk through all of these processes.

369
00:11:23,620 --> 00:11:25,040
I'll give them exactly everything that we do

370
00:11:25,040 --> 00:11:25,420
internally.

371
00:11:25,420 --> 00:11:27,400
But again, you have to taste it and

372
00:11:27,400 --> 00:11:28,140
see it for yourself.

373
00:11:28,720 --> 00:11:31,000
And that's kind of the paradox of business

374
00:11:31,000 --> 00:11:34,220
is you don't necessarily wanna adopt somebody else's

375
00:11:34,220 --> 00:11:36,420
methodology around it until you've proven it, but

376
00:11:36,420 --> 00:11:37,840
there's only one way to prove it, which

377
00:11:37,840 --> 00:11:38,780
is to actually do it.

378
00:11:39,040 --> 00:11:41,480
And as you probably have observed, you don't

379
00:11:41,480 --> 00:11:42,920
hit any home runs if you don't take

380
00:11:42,920 --> 00:11:43,320
swings.

381
00:11:43,760 --> 00:11:46,700
So you might hit a bunch of strikeouts

382
00:11:46,700 --> 00:11:48,860
and balls, but one of them's gonna be

383
00:11:48,860 --> 00:11:49,420
a home run.

384
00:11:49,540 --> 00:11:51,580
So I really encourage people to take the

385
00:11:51,580 --> 00:11:51,860
swing.

386
00:11:52,280 --> 00:11:53,300
You know, I think about coaching in the

387
00:11:53,300 --> 00:11:53,620
same way.

388
00:11:53,720 --> 00:11:55,380
Like I look at coaching, sometimes people are

389
00:11:55,380 --> 00:11:56,960
trying to sell me like 50, 100K coaching

390
00:11:56,960 --> 00:11:57,460
programs.

391
00:11:57,980 --> 00:11:59,780
And to me, it's like so ridiculous and

392
00:11:59,780 --> 00:12:00,180
irrational.

393
00:12:00,180 --> 00:12:01,020
It's almost insulting.

394
00:12:01,600 --> 00:12:03,360
But at the same time, I've joined, like

395
00:12:03,360 --> 00:12:05,060
I did Dan Martell's coaching program.

396
00:12:05,240 --> 00:12:06,560
I take it, of course, I have one

397
00:12:06,560 --> 00:12:06,900
breakthrough.

398
00:12:07,300 --> 00:12:08,960
And now that breakthrough is making me over

399
00:12:08,960 --> 00:12:10,680
$100,000 a month on just one of

400
00:12:10,680 --> 00:12:11,860
his recommendations that he made.

401
00:12:11,960 --> 00:12:13,860
And in total, I paid a fraction of

402
00:12:13,860 --> 00:12:14,360
that, right?

403
00:12:14,640 --> 00:12:16,620
So I think like, if I could just

404
00:12:16,620 --> 00:12:18,720
be candidly, like people need to stop pussyfooting

405
00:12:18,720 --> 00:12:20,360
around and be real men and step up

406
00:12:20,360 --> 00:12:21,520
and like really punch hard.

407
00:12:21,800 --> 00:12:23,160
And a lot of these founders are gun

408
00:12:23,160 --> 00:12:23,440
shy.

409
00:12:23,440 --> 00:12:25,120
And frankly, they kind of come off as

410
00:12:25,120 --> 00:12:25,800
pussies to me.

411
00:12:25,940 --> 00:12:27,860
And that sounds kind of like condescending and

412
00:12:27,860 --> 00:12:28,360
negative.

413
00:12:28,520 --> 00:12:30,820
But like, I would say that about myself,

414
00:12:30,880 --> 00:12:33,020
if I was sitting there in a pensive

415
00:12:33,020 --> 00:12:35,740
state and not taking action, nobody can really

416
00:12:35,740 --> 00:12:36,560
respect that.

417
00:12:36,720 --> 00:12:38,540
And so the only way that you learn

418
00:12:38,540 --> 00:12:40,020
is just by taking that swing and going

419
00:12:40,020 --> 00:12:40,660
for the crack.

420
00:12:40,960 --> 00:12:43,060
And when you make contact with the ball,

421
00:12:43,140 --> 00:12:43,320
great.

422
00:12:43,580 --> 00:12:45,300
But of course, sometimes there's just not gonna

423
00:12:45,300 --> 00:12:46,140
be that.

424
00:12:46,600 --> 00:12:48,140
You will, of course, learn from it, right?

425
00:12:48,400 --> 00:12:49,740
I forget who said it, but it's either

426
00:12:49,740 --> 00:12:50,600
a win or a lesson.

427
00:12:50,680 --> 00:12:51,400
There is no losing.

428
00:12:51,400 --> 00:12:52,840
You're only a loser if you look at

429
00:12:52,840 --> 00:12:53,560
it as a loss.

430
00:12:53,920 --> 00:12:56,220
Like you're a learner if you do the

431
00:12:56,220 --> 00:12:56,740
latter, right?

432
00:12:57,780 --> 00:12:59,060
Yeah, no, and it makes a lot of

433
00:12:59,060 --> 00:13:00,860
sense the way you're describing it, right?

434
00:13:00,900 --> 00:13:02,140
I mean, I think a lot of people

435
00:13:02,140 --> 00:13:03,520
come in, a lot of these guys are

436
00:13:03,520 --> 00:13:04,320
idea guys.

437
00:13:04,660 --> 00:13:06,300
So they have an idea and then they

438
00:13:06,300 --> 00:13:07,860
even build the thing, which they enjoy that

439
00:13:07,860 --> 00:13:09,160
part of it, but then taking it to

440
00:13:09,160 --> 00:13:11,000
market scaling, that's a lot of work, right?

441
00:13:11,040 --> 00:13:12,660
Like, I mean, there's a lot of work

442
00:13:12,660 --> 00:13:13,220
behind that.

443
00:13:13,380 --> 00:13:14,720
And then the problem is, is do you

444
00:13:14,720 --> 00:13:15,700
even have- And it's not the fun

445
00:13:15,700 --> 00:13:16,060
work.

446
00:13:16,360 --> 00:13:17,200
Yes, it's the hard work.

447
00:13:17,200 --> 00:13:17,740
It's the boring work.

448
00:13:18,080 --> 00:13:19,360
And so that's the part where I think

449
00:13:19,360 --> 00:13:21,100
that some of these people get to a

450
00:13:21,100 --> 00:13:22,580
lot that are in the creative types, which

451
00:13:22,580 --> 00:13:23,560
I know that you know them.

452
00:13:23,640 --> 00:13:25,860
That's creativity is not my strong suit.

453
00:13:25,960 --> 00:13:27,740
I'm better at other things, but they create

454
00:13:27,740 --> 00:13:28,420
and love that.

455
00:13:28,500 --> 00:13:30,320
Then they get it and they're afraid to

456
00:13:30,320 --> 00:13:31,340
do the hard work because it just might

457
00:13:31,340 --> 00:13:31,840
not work.

458
00:13:31,920 --> 00:13:33,840
But the reality is they have that fear

459
00:13:33,840 --> 00:13:35,740
because they don't have a goal.

460
00:13:35,860 --> 00:13:36,680
They don't know where they're going.

461
00:13:36,840 --> 00:13:37,940
They haven't done the research.

462
00:13:38,100 --> 00:13:39,500
They haven't done the demographic.

463
00:13:39,540 --> 00:13:40,540
They don't know their demographic.

464
00:13:40,780 --> 00:13:43,020
They haven't tested to see if it's viable

465
00:13:43,020 --> 00:13:43,500
yet.

466
00:13:43,760 --> 00:13:45,420
And to your point, if you can come

467
00:13:45,420 --> 00:13:48,080
into that and you have that planned out,

468
00:13:48,080 --> 00:13:49,720
then I think you can go into confidence

469
00:13:49,720 --> 00:13:51,280
and go all in to push it.

470
00:13:51,660 --> 00:13:53,440
But it sounds like you're closing that gap

471
00:13:53,440 --> 00:13:55,860
because that's what seems like creates the problem

472
00:13:55,860 --> 00:13:57,280
is they don't have confidence in what they're

473
00:13:57,280 --> 00:13:58,260
doing to even take the thing.

474
00:13:58,340 --> 00:13:58,720
Correct.

475
00:13:58,940 --> 00:14:02,620
And a respectable advisor, consultant, coach, whatever you

476
00:14:02,620 --> 00:14:04,520
want to call it, they will be the

477
00:14:04,520 --> 00:14:05,760
ones who are willing to give you that

478
00:14:05,760 --> 00:14:06,480
hard truth.

479
00:14:06,880 --> 00:14:08,900
And that's why I'm so raw and forward

480
00:14:08,900 --> 00:14:11,080
and candid and blunt about this stuff because

481
00:14:11,080 --> 00:14:13,160
somebody needs to rattle their cage.

482
00:14:13,280 --> 00:14:14,860
If I can just wake them up from

483
00:14:14,860 --> 00:14:18,260
this slumber of working on product forever, working

484
00:14:18,260 --> 00:14:20,840
on product is like, it's mental masturbation because

485
00:14:20,840 --> 00:14:22,940
you're building more badass features.

486
00:14:23,140 --> 00:14:25,520
And by the way, I'm speaking autobiographically here.

487
00:14:25,740 --> 00:14:27,720
I've built apps with Repl.it. I have

488
00:14:27,720 --> 00:14:29,400
one app that's got like 12 features on

489
00:14:29,400 --> 00:14:29,620
it.

490
00:14:29,800 --> 00:14:31,500
Really, if you're building an app, you really

491
00:14:31,500 --> 00:14:32,540
only need one feature, right?

492
00:14:32,560 --> 00:14:34,000
You should be solving an 80-20 problem

493
00:14:34,000 --> 00:14:34,400
there, right?

494
00:14:34,580 --> 00:14:36,800
So I'm not saying that I'm objectified from

495
00:14:36,800 --> 00:14:40,480
this tendency, but everybody gets this obsession with

496
00:14:40,480 --> 00:14:42,400
building features and now it's become so accessible

497
00:14:42,400 --> 00:14:44,380
through AI that they can just keep building

498
00:14:44,380 --> 00:14:44,580
on.

499
00:14:44,640 --> 00:14:46,420
But what happens, the more you vibe code

500
00:14:46,420 --> 00:14:48,660
features in, the more wires that cross on

501
00:14:48,660 --> 00:14:49,900
the backend of the app and the harder

502
00:14:49,900 --> 00:14:51,540
it is to get that actually live.

503
00:14:51,980 --> 00:14:53,880
So one of the multifunction apps that we

504
00:14:53,880 --> 00:14:55,540
built, we're actually breaking it down and doing

505
00:14:55,540 --> 00:14:57,460
single function apps for all the 12 different

506
00:14:57,460 --> 00:14:59,860
features because we could not, even with our

507
00:14:59,860 --> 00:15:01,040
developers, get that live.

508
00:15:01,460 --> 00:15:02,860
So you think about a first-time founder

509
00:15:02,860 --> 00:15:03,560
encountering that.

510
00:15:03,700 --> 00:15:05,980
I've built much three apps myself before, like

511
00:15:05,980 --> 00:15:07,340
whole companies around them.

512
00:15:07,740 --> 00:15:09,320
So if I'm having that kind of challenge,

513
00:15:09,640 --> 00:15:11,580
somebody who's never done this before, there's no

514
00:15:11,580 --> 00:15:12,640
way they're gonna be able to get live.

515
00:15:13,180 --> 00:15:15,400
And so, again, at some point, somebody needs

516
00:15:15,400 --> 00:15:17,960
to shake their shoulders and say, okay, time

517
00:15:17,960 --> 00:15:19,060
to wake up from the slumber.

518
00:15:19,340 --> 00:15:20,400
Let's go launch this damn thing.

519
00:15:20,500 --> 00:15:21,960
Let's go see if people are actually interested

520
00:15:21,960 --> 00:15:22,640
in the product.

521
00:15:23,460 --> 00:15:26,880
And that fear of launching is because they're

522
00:15:26,880 --> 00:15:28,560
expecting bad feedback, right?

523
00:15:28,720 --> 00:15:31,360
But as you know in business, feedback is

524
00:15:31,360 --> 00:15:33,560
positive even if it's negative, right?

525
00:15:33,620 --> 00:15:35,720
And so that's, again, why I'm so kind

526
00:15:35,720 --> 00:15:37,120
of hit them over the head with it

527
00:15:37,120 --> 00:15:39,480
because I'm not sitting here to pander to

528
00:15:39,480 --> 00:15:39,780
people.

529
00:15:39,920 --> 00:15:41,940
I'm not trying to just be a feel

530
00:15:41,940 --> 00:15:42,280
-good guy.

531
00:15:42,380 --> 00:15:44,520
I'm not a mindset coach.

532
00:15:44,580 --> 00:15:45,860
I'm not a guru.

533
00:15:45,860 --> 00:15:50,380
I'm like a businessman who's obsessed with cashflow

534
00:15:50,380 --> 00:15:53,080
businesses, obsessed with average and things like that.

535
00:15:53,520 --> 00:15:55,820
And I don't fault anybody for it either

536
00:15:55,820 --> 00:15:58,740
because I was that guy before somebody shook

537
00:15:58,740 --> 00:16:00,460
my shoulders and slapped me across the face.

538
00:16:00,840 --> 00:16:03,180
But I'm just hoping that the 15 years

539
00:16:03,180 --> 00:16:04,580
of being slapped in the face that I've

540
00:16:04,580 --> 00:16:07,540
encountered can be reduced to a couple months

541
00:16:07,540 --> 00:16:08,440
for somebody else.

542
00:16:09,180 --> 00:16:10,320
Yeah, it makes a lot of sense too.

543
00:16:10,440 --> 00:16:11,900
I mean, ultimately, come up with a concept.

544
00:16:12,040 --> 00:16:13,460
Come up with something simple that solves a

545
00:16:13,460 --> 00:16:14,340
problem, ultimately.

546
00:16:14,340 --> 00:16:16,440
I'm not saying simple, but I mean, keep

547
00:16:16,440 --> 00:16:17,720
it simple in the sense that it should

548
00:16:17,720 --> 00:16:19,400
be doing one thing and that one thing

549
00:16:19,400 --> 00:16:21,180
should more than likely be solving the problem.

550
00:16:21,380 --> 00:16:23,080
And then you build that thing, right?

551
00:16:23,100 --> 00:16:24,300
And then if you have that thing, then

552
00:16:24,300 --> 00:16:25,900
get it out to market as quickly as

553
00:16:25,900 --> 00:16:28,640
possible to figure out who your demographic is.

554
00:16:28,820 --> 00:16:30,620
And is it gonna gain traction or not?

555
00:16:30,720 --> 00:16:32,980
Like you've got minimal into it at that

556
00:16:32,980 --> 00:16:34,720
point that if it doesn't work, doesn't work.

557
00:16:34,760 --> 00:16:36,080
And then you can abandon and go test

558
00:16:36,080 --> 00:16:38,040
something else without going all in.

559
00:16:38,200 --> 00:16:40,680
And then, like you said, take your shots

560
00:16:40,680 --> 00:16:41,100
at that.

561
00:16:41,180 --> 00:16:42,760
And then once you do that, then you

562
00:16:42,760 --> 00:16:45,080
figure out what gains traction and what's popular.

563
00:16:45,300 --> 00:16:47,500
Then from there, you can kind of expand,

564
00:16:47,760 --> 00:16:50,140
invest in that more, do more things, go

565
00:16:50,140 --> 00:16:52,400
to get more users, and then start actually

566
00:16:52,400 --> 00:16:53,520
getting to a point where you have something

567
00:16:53,520 --> 00:16:54,560
viable to get it to invest.

568
00:16:55,080 --> 00:16:57,000
Yeah, it reminds me of this story.

569
00:16:57,200 --> 00:16:59,600
There was a meal, like a fresh grocery

570
00:16:59,600 --> 00:17:02,560
delivery early on, like when grocery delivery was

571
00:17:02,560 --> 00:17:04,859
first becoming popular that I launched in Nashville.

572
00:17:05,140 --> 00:17:06,720
And I asked the founder, I said, what's

573
00:17:06,720 --> 00:17:08,380
the target audience?

574
00:17:08,400 --> 00:17:11,780
And she said, female millennials with one child,

575
00:17:12,060 --> 00:17:12,260
okay?

576
00:17:12,480 --> 00:17:13,200
That's what she was.

577
00:17:13,200 --> 00:17:14,480
I said, okay, cool, fair enough.

578
00:17:15,040 --> 00:17:16,680
And now a quick break to hear from

579
00:17:16,680 --> 00:17:17,400
our sponsor.

580
00:17:18,380 --> 00:17:20,000
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581
00:17:20,140 --> 00:17:21,619
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582
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583
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584
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585
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586
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587
00:17:30,340 --> 00:17:32,240
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588
00:17:32,240 --> 00:17:35,900
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589
00:17:35,900 --> 00:17:38,240
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590
00:17:38,240 --> 00:17:39,960
money you can get approved for today.

591
00:17:40,600 --> 00:17:42,320
It's a subscription, 50 bucks a month.

592
00:17:42,320 --> 00:17:47,080
They bring basically leftover organic vegetables in a

593
00:17:47,080 --> 00:17:48,140
box and put it on your doorstep.

594
00:17:48,880 --> 00:17:51,360
I said, I'll target that audience for you.

595
00:17:51,460 --> 00:17:52,700
But what I didn't tell her is I'm

596
00:17:52,700 --> 00:17:54,600
also gonna open it up to every age

597
00:17:54,600 --> 00:17:55,820
group and gender.

598
00:17:56,340 --> 00:17:58,440
And then 10 miles around Nashville where we

599
00:17:58,440 --> 00:17:59,240
were launching this thing.

600
00:17:59,980 --> 00:18:03,340
After launch, millennial females with one kid, that

601
00:18:03,340 --> 00:18:06,600
audience came in $50 per customer acquisition for

602
00:18:06,600 --> 00:18:08,000
a $50 per month service.

603
00:18:08,460 --> 00:18:10,800
So they break even essentially on revenue at

604
00:18:10,800 --> 00:18:12,180
least after two months.

605
00:18:13,340 --> 00:18:14,880
Profitability probably takes them five months.

606
00:18:15,000 --> 00:18:16,460
You figure they're making 20, 30% profit

607
00:18:16,460 --> 00:18:17,000
on that thing.

608
00:18:17,280 --> 00:18:18,520
You gotta be five, six months in.

609
00:18:18,920 --> 00:18:20,680
So that was their, what I would call

610
00:18:20,680 --> 00:18:23,620
their fundamental metrics of the business after targeting

611
00:18:23,620 --> 00:18:24,280
that audience.

612
00:18:24,520 --> 00:18:27,840
Now there's another audience, females over 65 years

613
00:18:27,840 --> 00:18:30,040
old, who were coming in at $10 per

614
00:18:30,040 --> 00:18:31,280
customer acquisition cost.

615
00:18:31,600 --> 00:18:34,000
So five times cheaper, profitable in the first

616
00:18:34,000 --> 00:18:34,300
month.

617
00:18:34,680 --> 00:18:37,680
So old ladies were more profitable than the

618
00:18:37,680 --> 00:18:40,560
young, sexy, beautiful, millennial whatevers.

619
00:18:40,780 --> 00:18:42,040
Five times more profitable.

620
00:18:42,600 --> 00:18:45,120
Now her hypothesis going into it was, I

621
00:18:45,120 --> 00:18:47,020
built this brand and this company around servicing

622
00:18:47,020 --> 00:18:49,220
millennials like myself, but who turned out to

623
00:18:49,220 --> 00:18:51,460
be a better customer for them was old

624
00:18:51,460 --> 00:18:51,740
ladies.

625
00:18:52,120 --> 00:18:52,920
Who would have thought of that?

626
00:18:53,420 --> 00:18:55,160
Maybe they don't feel like going shopping.

627
00:18:55,560 --> 00:18:56,860
Maybe they can't walk anymore.

628
00:18:56,960 --> 00:18:57,740
Maybe they can't drive anymore.

629
00:18:57,820 --> 00:18:58,220
Who knows?

630
00:18:58,580 --> 00:18:59,820
All I know is that it's five times

631
00:18:59,820 --> 00:19:01,380
more profitable and you get profitable at month

632
00:19:01,380 --> 00:19:02,920
one and you can scale that business literally

633
00:19:02,920 --> 00:19:04,840
five times as fast by just dumping money

634
00:19:04,840 --> 00:19:05,840
into the ads at that point.

635
00:19:05,840 --> 00:19:07,780
When you got a money printer that puts

636
00:19:07,780 --> 00:19:09,580
$2 out for every $1 you put in,

637
00:19:09,660 --> 00:19:12,140
you're at that damn machine every single day,

638
00:19:12,260 --> 00:19:12,480
right?

639
00:19:12,680 --> 00:19:16,740
So you can see how our intuitive blinders,

640
00:19:16,880 --> 00:19:20,460
our limiting beliefs subject us to not having

641
00:19:20,460 --> 00:19:23,740
that willingness and openness to be told that

642
00:19:23,740 --> 00:19:24,220
we're wrong.

643
00:19:24,580 --> 00:19:25,940
Until at one point, and I observed that

644
00:19:25,940 --> 00:19:29,100
you've had this transformation in your own entrepreneurial

645
00:19:29,100 --> 00:19:29,580
journey.

646
00:19:29,880 --> 00:19:32,080
At one point, you've been beaten down and

647
00:19:32,080 --> 00:19:35,580
broken so many times life has just smashed

648
00:19:35,580 --> 00:19:38,620
you to a point you're completely humbled.

649
00:19:38,960 --> 00:19:40,520
You're on your knees before God and you're

650
00:19:40,520 --> 00:19:41,140
praying for mercy.

651
00:19:41,740 --> 00:19:42,800
And then you say, fuck it, I don't

652
00:19:42,800 --> 00:19:43,440
care anymore.

653
00:19:43,700 --> 00:19:45,280
I'm just, I'm gonna do what wins.

654
00:19:45,520 --> 00:19:46,940
I don't care what I think or how

655
00:19:46,940 --> 00:19:47,660
I feel about it.

656
00:19:47,700 --> 00:19:49,140
I don't care if I'm targeting millennials or

657
00:19:49,140 --> 00:19:50,260
if I'm targeting old ladies.

658
00:19:50,740 --> 00:19:51,600
I'm gonna make this thing work.

659
00:19:52,040 --> 00:19:53,360
And then when you have that ego death,

660
00:19:53,520 --> 00:19:55,340
as I would call it, that's when you

661
00:19:55,340 --> 00:19:56,140
start winning, right?

662
00:19:56,260 --> 00:19:58,620
Again, so how can we reduce that time

663
00:19:58,620 --> 00:20:01,000
to the ego death for these founders who

664
00:20:01,000 --> 00:20:02,960
come in thinking that they're gonna do one

665
00:20:02,960 --> 00:20:04,920
thing and then the market says, I want

666
00:20:04,920 --> 00:20:05,600
something else.

667
00:20:05,920 --> 00:20:08,080
And if they're humble enough to say, okay,

668
00:20:08,160 --> 00:20:09,540
cool, I see what that is, right?

669
00:20:09,700 --> 00:20:12,480
Like we launched another app just recently, which

670
00:20:12,480 --> 00:20:16,100
is for tracking baby feeding, sleeping, all the

671
00:20:16,100 --> 00:20:17,000
stuff for a newborn.

672
00:20:17,620 --> 00:20:19,680
And caregivers turned out to be a more

673
00:20:19,680 --> 00:20:20,640
profitable audience.

674
00:20:20,800 --> 00:20:24,060
It's like 80% more profitable than moms,

675
00:20:24,680 --> 00:20:24,940
right?

676
00:20:25,040 --> 00:20:26,540
So just before I got on this call

677
00:20:26,540 --> 00:20:28,500
with you, I was talking to the founder

678
00:20:28,500 --> 00:20:30,560
and he's thinking about building an app for

679
00:20:30,560 --> 00:20:31,360
caregivers now.

680
00:20:31,700 --> 00:20:32,960
And it makes a lot of sense, right?

681
00:20:32,960 --> 00:20:35,780
Like they're maybe caring for multiple kids or

682
00:20:35,780 --> 00:20:37,080
they're the ones who are actually caring for

683
00:20:37,080 --> 00:20:38,320
the kids because moms have nannies.

684
00:20:38,700 --> 00:20:41,320
So you get these surprise insights like that.

685
00:20:41,780 --> 00:20:43,500
And if you're willing to read the writing

686
00:20:43,500 --> 00:20:44,940
on the wall, you'll move very, very, very

687
00:20:44,940 --> 00:20:45,380
fast.

688
00:20:45,680 --> 00:20:47,120
And if I were to start over as

689
00:20:47,120 --> 00:20:48,640
a tech founder now, that's exactly what I

690
00:20:48,640 --> 00:20:48,920
would do.

691
00:20:49,000 --> 00:20:51,800
I would say, put my ego completely aside.

692
00:20:52,100 --> 00:20:55,020
I'm gonna fix this problem and provide this

693
00:20:55,020 --> 00:20:56,720
app as a solution and whoever wants to

694
00:20:56,720 --> 00:20:58,680
buy it, whatever price, like whenever it's most

695
00:20:58,680 --> 00:20:59,820
profitable, that's what I'm gonna do.

696
00:21:00,040 --> 00:21:01,400
So what do you find is some of

697
00:21:01,400 --> 00:21:03,460
the best and most effective ways to test?

698
00:21:03,780 --> 00:21:05,620
You talked about running ads, for example.

699
00:21:06,080 --> 00:21:07,420
I mean, what's some of the easiest ways

700
00:21:07,420 --> 00:21:09,120
to see what you're discovering?

701
00:21:09,360 --> 00:21:11,040
Like, are you gonna gain traction?

702
00:21:11,280 --> 00:21:13,120
Who is the demographic that you're actually gonna

703
00:21:13,120 --> 00:21:13,960
gain traction with?

704
00:21:14,040 --> 00:21:16,100
Are you doing Facebook ads, Google ads, YouTube

705
00:21:16,100 --> 00:21:16,360
ads?

706
00:21:16,520 --> 00:21:19,940
Does it matter on like the type of

707
00:21:19,940 --> 00:21:20,800
app that it is?

708
00:21:22,260 --> 00:21:23,520
The app type doesn't matter.

709
00:21:23,620 --> 00:21:25,500
It can be web app, mobile app, native.

710
00:21:25,800 --> 00:21:27,480
It can be mobile web.

711
00:21:27,540 --> 00:21:29,700
It can be browser extension.

712
00:21:29,800 --> 00:21:30,320
I don't care.

713
00:21:30,320 --> 00:21:33,040
We're always gonna use meta ads because they

714
00:21:33,040 --> 00:21:35,880
offer the ability to split test the most

715
00:21:35,880 --> 00:21:37,460
effectively and to get the cleanest data.

716
00:21:37,920 --> 00:21:40,160
Google, for example, mixes all the data together

717
00:21:40,160 --> 00:21:41,880
and you just see how overall performance was.

718
00:21:42,000 --> 00:21:43,340
You can't see it by audience or by

719
00:21:43,340 --> 00:21:43,640
ad.

720
00:21:44,320 --> 00:21:45,640
So we use meta.

721
00:21:45,940 --> 00:21:47,140
We do 10 ad variations.

722
00:21:47,800 --> 00:21:48,840
Just think about this rule.

723
00:21:48,900 --> 00:21:49,800
We call it the 10 by 10 by

724
00:21:49,800 --> 00:21:50,180
10 rule.

725
00:21:50,340 --> 00:21:52,860
So 10 ads, the graphics are all the

726
00:21:52,860 --> 00:21:53,140
same.

727
00:21:53,280 --> 00:21:54,220
The messages are different.

728
00:21:54,340 --> 00:21:56,060
That means we're isolating just one variable.

729
00:21:56,500 --> 00:22:00,800
And then 10 ads broken into 10 ad

730
00:22:00,800 --> 00:22:01,940
sets, right?

731
00:22:02,000 --> 00:22:03,540
So each ad has its own ad set.

732
00:22:03,580 --> 00:22:05,680
So they're each running individually and separately from

733
00:22:05,680 --> 00:22:06,060
each other.

734
00:22:06,120 --> 00:22:09,460
And then $10 a day for 10 days,

735
00:22:09,680 --> 00:22:09,940
okay?

736
00:22:10,060 --> 00:22:11,620
That's our internal rule, the 10 by 10

737
00:22:11,620 --> 00:22:12,120
by 10 rule.

738
00:22:12,620 --> 00:22:14,740
10 ads, $10 a day, 10 days of

739
00:22:14,740 --> 00:22:15,000
runtime.

740
00:22:15,640 --> 00:22:18,320
If you run that variation, you'll understand which

741
00:22:18,320 --> 00:22:20,640
messages are most captivating, which hooks are most

742
00:22:20,640 --> 00:22:22,740
captivating for users, aka which ones are most

743
00:22:22,740 --> 00:22:23,060
profitable.

744
00:22:23,400 --> 00:22:25,840
You'll establish customer acquisition costs because you will

745
00:22:25,840 --> 00:22:27,880
acquire customers if you spend $1,000 on

746
00:22:27,880 --> 00:22:28,200
ads.

747
00:22:28,600 --> 00:22:30,980
And then you also understand the demographics.

748
00:22:31,440 --> 00:22:35,740
So age, gender, location, and psychographic characteristics too

749
00:22:35,740 --> 00:22:37,140
of your winning audiences.

750
00:22:37,460 --> 00:22:38,940
So a lot of companies can be profitable

751
00:22:38,940 --> 00:22:41,600
within two weeks of launching their split testing.

752
00:22:42,400 --> 00:22:44,220
Because what would come out of that would

753
00:22:44,220 --> 00:22:47,800
be like millennial females, 25 to 34 are

754
00:22:47,800 --> 00:22:51,000
50 bucks per customer acquisition, whereas males 35

755
00:22:51,000 --> 00:22:54,200
plus were 25 bucks per acquisition, twice as

756
00:22:54,200 --> 00:22:54,580
profitable.

757
00:22:55,080 --> 00:22:56,300
And when you have that data in hand,

758
00:22:56,360 --> 00:22:58,600
just think of how much, it's like having

759
00:22:58,600 --> 00:22:59,560
the keys to a Ferrari.

760
00:22:59,760 --> 00:23:00,980
It's like, damn, I can do anything with

761
00:23:00,980 --> 00:23:01,240
this.

762
00:23:01,740 --> 00:23:02,380
Yeah, and it's cheap.

763
00:23:02,500 --> 00:23:03,080
Like that's crazy.

764
00:23:03,180 --> 00:23:05,100
You're talking about like a thousand bucks, whatever,

765
00:23:05,480 --> 00:23:06,940
you're able to figure out a lot of

766
00:23:06,940 --> 00:23:07,280
stuff.

767
00:23:07,420 --> 00:23:09,060
Like are you even able to gain traction,

768
00:23:09,160 --> 00:23:11,900
your cost of acquisition, the type of message

769
00:23:11,900 --> 00:23:12,620
that's gonna work.

770
00:23:12,700 --> 00:23:14,420
I mean, a lot of specifics and that

771
00:23:14,420 --> 00:23:16,000
even gives you a lot of demographic info

772
00:23:16,000 --> 00:23:16,520
as well.

773
00:23:16,940 --> 00:23:19,980
Do you usually know that soon in if

774
00:23:19,980 --> 00:23:21,760
you've got something scalable or not?

775
00:23:22,120 --> 00:23:25,040
Yeah, you're asking such smart questions here.

776
00:23:25,540 --> 00:23:27,260
Yes, a thousand bucks is very cheap to

777
00:23:27,260 --> 00:23:29,500
go conduct real market research and get real

778
00:23:29,500 --> 00:23:29,940
results.

779
00:23:30,280 --> 00:23:31,520
Not, hey, I would like to buy your

780
00:23:31,520 --> 00:23:31,800
service.

781
00:23:31,940 --> 00:23:33,480
Hey, I didn't buy your service, right?

782
00:23:33,520 --> 00:23:34,840
Or I did start a free trial.

783
00:23:35,760 --> 00:23:38,060
So it is a super cheap mechanism.

784
00:23:38,300 --> 00:23:39,640
But before I got into this, I was

785
00:23:39,640 --> 00:23:40,280
working in corporate.

786
00:23:40,440 --> 00:23:42,500
I was at Xfinity at Comcast and I

787
00:23:42,500 --> 00:23:44,720
would conduct these research studies and we would

788
00:23:44,720 --> 00:23:46,200
pay tens of thousands of dollars.

789
00:23:46,740 --> 00:23:48,580
Each research study was 50 to 100K.

790
00:23:48,580 --> 00:23:51,940
Why does Chicago make a focus group of

791
00:23:51,940 --> 00:23:53,720
10 to 12 people, watch through a double

792
00:23:53,720 --> 00:23:56,300
-sided mirror, take notes, have qualitative quantitative analysis,

793
00:23:56,420 --> 00:23:56,960
all this shit.

794
00:23:57,040 --> 00:23:58,220
We'll need to find out the same stuff

795
00:23:58,220 --> 00:23:59,600
that I can find out for a thousand

796
00:23:59,600 --> 00:24:00,700
bucks on my ads now.

797
00:24:01,300 --> 00:24:03,160
So I took that methodology and applied it

798
00:24:03,160 --> 00:24:04,520
to advertising and media buying.

799
00:24:05,040 --> 00:24:07,720
But in most cases, let's just say your

800
00:24:07,720 --> 00:24:09,520
product is a hundred bucks a month.

801
00:24:09,720 --> 00:24:11,780
More than likely, I would say 90%

802
00:24:11,780 --> 00:24:14,220
plus chance you will acquire some customers after

803
00:24:14,220 --> 00:24:15,740
that first thousand dollars of spend.

804
00:24:16,860 --> 00:24:19,120
And you all understand how much it costs

805
00:24:19,120 --> 00:24:20,780
to acquire a customer and therefore how profitable

806
00:24:20,780 --> 00:24:21,180
it is.

807
00:24:21,220 --> 00:24:22,420
Because if your customer pays a hundred bucks

808
00:24:22,420 --> 00:24:24,580
a month and you pay 300 bucks to

809
00:24:24,580 --> 00:24:26,160
acquire him, you know that, hey, I gotta

810
00:24:26,160 --> 00:24:27,840
wait three months, but if I can keep

811
00:24:27,840 --> 00:24:29,440
this customer around six months, I'm making two

812
00:24:29,440 --> 00:24:30,180
X my money back.

813
00:24:30,500 --> 00:24:31,760
So yeah, a lot of times we'll know

814
00:24:31,760 --> 00:24:34,060
the profitability within that first set of split

815
00:24:34,060 --> 00:24:36,020
testing, which is usually 10 to 14 days

816
00:24:36,020 --> 00:24:37,620
to let the algorithm run fully on meta.

817
00:24:37,920 --> 00:24:39,360
By the way, we do no targeting in

818
00:24:39,360 --> 00:24:39,880
that process.

819
00:24:40,040 --> 00:24:42,300
We let the, what's called the Androvida algorithm,

820
00:24:42,400 --> 00:24:45,060
the new meta ads algorithm, which is awesome.

821
00:24:45,060 --> 00:24:46,700
It's so, so profitable.

822
00:24:46,960 --> 00:24:49,200
Like it makes companies money so fast nowadays,

823
00:24:49,800 --> 00:24:52,160
but we run it without targeting and Androvida

824
00:24:52,160 --> 00:24:54,200
just targets people based on the content that's

825
00:24:54,200 --> 00:24:55,520
in the ad copy and in the ad.

826
00:24:56,040 --> 00:24:57,820
So whatever content that you're putting in the

827
00:24:57,820 --> 00:24:59,420
ad, let's just say fix your credit within

828
00:24:59,420 --> 00:25:01,500
30 days or less, or get approved for

829
00:25:01,500 --> 00:25:02,340
a hundred K in funding.

830
00:25:02,620 --> 00:25:04,000
Let's just use some hooks that you might

831
00:25:04,000 --> 00:25:05,180
have for your business.

832
00:25:05,380 --> 00:25:06,880
It will go find people who are looking

833
00:25:06,880 --> 00:25:08,640
at getting funding or go look at people

834
00:25:08,640 --> 00:25:10,480
who need credit repair and it will pick

835
00:25:10,480 --> 00:25:11,620
them on its own and it will do

836
00:25:11,620 --> 00:25:12,820
a better job of it than me or

837
00:25:12,820 --> 00:25:14,660
you could do because it uses AI and

838
00:25:14,660 --> 00:25:15,320
ML, right?

839
00:25:15,540 --> 00:25:17,640
So yeah, a lot of companies can get

840
00:25:17,640 --> 00:25:19,420
it profitable on that first run, 1,000,

841
00:25:19,540 --> 00:25:20,880
2,000 bucks into their ads.

842
00:25:21,400 --> 00:25:23,620
If not, once it's profitable, you got the

843
00:25:23,620 --> 00:25:24,100
money printer.

844
00:25:25,040 --> 00:25:26,020
Yeah, that's it.

845
00:25:26,320 --> 00:25:27,520
And so if not, you gotta go back

846
00:25:27,520 --> 00:25:29,820
to drawing board, figure out the message that

847
00:25:29,820 --> 00:25:31,660
maybe it does and it works.

848
00:25:31,980 --> 00:25:33,380
But if you have something that does work,

849
00:25:33,660 --> 00:25:35,860
then at that point, you could potentially start

850
00:25:35,860 --> 00:25:36,800
scaling it, right?

851
00:25:36,840 --> 00:25:38,380
And then if you're profitable, then you can

852
00:25:38,380 --> 00:25:40,160
start scaling, narrowing down, now you know your

853
00:25:40,160 --> 00:25:42,180
message, now you're getting your demographics and now

854
00:25:42,180 --> 00:25:43,940
you're gonna improve your ROI.

855
00:25:44,560 --> 00:25:46,160
And then at what point, cause the other

856
00:25:46,160 --> 00:25:47,220
part of what you guys do is help

857
00:25:47,220 --> 00:25:48,380
people then find investors.

858
00:25:49,000 --> 00:25:51,160
Do you, 10,000 is the number you

859
00:25:51,160 --> 00:25:52,560
put out there, but it's not necessarily the

860
00:25:52,560 --> 00:25:53,080
matched number.

861
00:25:53,220 --> 00:25:55,040
Like, when do you know, when are you

862
00:25:55,040 --> 00:25:57,200
helping then your tribe know that it's the

863
00:25:57,200 --> 00:25:59,100
right time to then go get investors to

864
00:25:59,100 --> 00:25:59,960
be able to start scaling?

865
00:26:00,440 --> 00:26:01,900
Like at face value, I'll tell them 10

866
00:26:01,900 --> 00:26:04,440
,000 users, establish CAC, establish LTV.

867
00:26:04,900 --> 00:26:06,920
But what I'm really looking for before I

868
00:26:06,920 --> 00:26:08,820
go in and introduce them to my personal

869
00:26:08,820 --> 00:26:10,440
contacts and put my name on the line

870
00:26:10,440 --> 00:26:12,760
is gonna be, is this founder investable?

871
00:26:13,000 --> 00:26:13,660
Are they coachable?

872
00:26:13,840 --> 00:26:16,540
Are in a mindset of adaptability and growth?

873
00:26:16,900 --> 00:26:20,980
Is their product effectively staged to pivot as

874
00:26:20,980 --> 00:26:22,920
needed to meet the market's needs?

875
00:26:23,340 --> 00:26:25,060
Now, in a lot of cases, you understand

876
00:26:25,060 --> 00:26:26,740
your CAC, LTV and it's profitable, you got

877
00:26:26,740 --> 00:26:28,420
product market fit right there, right?

878
00:26:28,780 --> 00:26:30,800
But in some cases, whether it's a small

879
00:26:30,800 --> 00:26:32,640
niche or it's a space that's got expandability

880
00:26:32,640 --> 00:26:34,160
or something like that, I'm looking at like

881
00:26:34,160 --> 00:26:34,900
the market size.

882
00:26:35,740 --> 00:26:38,760
And so there's like softer analysis components to

883
00:26:38,760 --> 00:26:40,640
it, but in general, if the founder can

884
00:26:40,640 --> 00:26:42,880
get to that 10,000 users, they have

885
00:26:42,880 --> 00:26:44,900
usually gotten profitable in the process.

886
00:26:45,160 --> 00:26:47,220
We aim to get every app profitable on

887
00:26:47,220 --> 00:26:49,340
a CAC to LTV basis within that first

888
00:26:49,340 --> 00:26:49,800
six months.

889
00:26:50,360 --> 00:26:53,100
So if they've achieved that, then I'm quite

890
00:26:53,100 --> 00:26:54,600
confident to put them in front of investors.

891
00:26:54,820 --> 00:26:56,740
If nothing else, I can say, look, the

892
00:26:56,740 --> 00:26:58,060
fundamentals check out, right?

893
00:26:58,100 --> 00:26:59,740
If you don't believe in the founder, that's

894
00:26:59,740 --> 00:27:01,360
a subjective thing and you can feel that

895
00:27:01,360 --> 00:27:01,580
way.

896
00:27:01,920 --> 00:27:03,840
So I will always work with my founders

897
00:27:03,840 --> 00:27:06,080
to get them to at least have five,

898
00:27:06,180 --> 00:27:08,500
10,000 users before we introduce them to

899
00:27:08,500 --> 00:27:10,620
investors because you gotta understand, I can go

900
00:27:10,620 --> 00:27:11,800
to my network and I can squeeze all

901
00:27:11,800 --> 00:27:13,740
the brownie points out of it and leverage

902
00:27:13,740 --> 00:27:14,460
my introduction.

903
00:27:14,700 --> 00:27:16,380
But what ends up happening is, first of

904
00:27:16,380 --> 00:27:17,520
all, it's not structured, right?

905
00:27:17,580 --> 00:27:19,200
And every sale process should be structured.

906
00:27:19,480 --> 00:27:21,280
I like to do 90 day capital raises,

907
00:27:21,560 --> 00:27:23,360
30 days outreach, 30 days of pitching, 30

908
00:27:23,360 --> 00:27:23,900
days of closing.

909
00:27:24,280 --> 00:27:26,440
If I just go out and introduce investors,

910
00:27:26,580 --> 00:27:27,920
it's gonna be one off here, one off

911
00:27:27,920 --> 00:27:28,100
there.

912
00:27:28,240 --> 00:27:29,860
We're not gonna be able to compare term

913
00:27:29,860 --> 00:27:32,140
sheets, bid them against each other, cause FOMO

914
00:27:32,140 --> 00:27:32,680
is part of it.

915
00:27:32,780 --> 00:27:33,940
And the other part of it is like,

916
00:27:34,140 --> 00:27:35,780
these founders are not gonna be ready to

917
00:27:35,780 --> 00:27:38,360
close the deal without that process materials and

918
00:27:38,360 --> 00:27:40,540
rigor taught to them and also pitch coaching.

919
00:27:40,880 --> 00:27:43,880
So I make sure to always do a

920
00:27:43,880 --> 00:27:45,880
lot of practice sessions before they go in

921
00:27:45,880 --> 00:27:47,800
front of investors, especially if they're my introductions.

922
00:27:48,500 --> 00:27:50,000
I always jump on the investor calls with

923
00:27:50,000 --> 00:27:52,060
them because they need somebody with a lot

924
00:27:52,060 --> 00:27:54,480
of punch to represent the growth aspect of

925
00:27:54,480 --> 00:27:55,000
the business.

926
00:27:55,460 --> 00:27:57,000
And I don't want them to take 20

927
00:27:57,000 --> 00:27:59,200
investor meetings if their close rate's gonna be

928
00:27:59,200 --> 00:28:01,240
0% because they didn't have the fundamentals

929
00:28:01,240 --> 00:28:01,800
in place.

930
00:28:02,120 --> 00:28:03,380
So I always make sure the fundamentals are

931
00:28:03,380 --> 00:28:04,640
in place so that we can close at

932
00:28:04,640 --> 00:28:07,220
least 20% on those qualified investors.

933
00:28:08,080 --> 00:28:10,340
Yeah, so you're getting to that point.

934
00:28:10,440 --> 00:28:11,860
I mean, at that point, you've got traction,

935
00:28:12,020 --> 00:28:15,960
you've got a founder that is good and

936
00:28:15,960 --> 00:28:16,460
coachable.

937
00:28:16,680 --> 00:28:19,360
You've got a concept that is able to

938
00:28:19,360 --> 00:28:21,200
pivot and be flexible with the market.

939
00:28:21,780 --> 00:28:23,080
And then at that point, you feel like

940
00:28:23,080 --> 00:28:25,220
they're ready to be introduced to investors.

941
00:28:25,540 --> 00:28:26,980
And sounds like at that point, they're able

942
00:28:26,980 --> 00:28:27,460
to get the investment.

943
00:28:27,560 --> 00:28:29,080
But here's the thing, if they're getting the

944
00:28:29,080 --> 00:28:30,500
ROI, what are they doing with the money?

945
00:28:30,900 --> 00:28:33,200
Like realistically, if I'm doing it and I'm

946
00:28:33,200 --> 00:28:36,520
spending 50 bucks and I'm making money right

947
00:28:36,520 --> 00:28:38,260
away in the first month, well, at that

948
00:28:38,260 --> 00:28:41,020
point, they could start scaling that using the

949
00:28:41,020 --> 00:28:42,500
money that they're making to scale.

950
00:28:42,680 --> 00:28:44,380
So what do you see that these investors

951
00:28:44,380 --> 00:28:45,920
are using a lot of the capital for

952
00:28:45,920 --> 00:28:46,340
at that point?

953
00:28:46,360 --> 00:28:49,020
That's a really good question because venture capital,

954
00:28:49,660 --> 00:28:52,520
just the industry has, I think, reduced 38

955
00:28:52,520 --> 00:28:54,220
% year over year, like the amount of

956
00:28:54,220 --> 00:28:55,400
money moving through that industry.

957
00:28:56,000 --> 00:28:57,680
And it's because startups just don't require that

958
00:28:57,680 --> 00:28:58,540
much capital anymore.

959
00:28:59,260 --> 00:29:00,700
Before we got on, I was talking to

960
00:29:00,700 --> 00:29:01,620
you about alternate funding.

961
00:29:01,980 --> 00:29:04,080
A good method of funding is venture debt

962
00:29:04,080 --> 00:29:05,780
because you don't give up money on the

963
00:29:05,780 --> 00:29:07,240
cap table, but you can still get large

964
00:29:07,240 --> 00:29:10,820
seven figure amounts and use that solely for

965
00:29:10,820 --> 00:29:13,820
running ads to acquire customers of which you'll

966
00:29:13,820 --> 00:29:15,020
get paid, let's just say, back in three

967
00:29:15,020 --> 00:29:17,780
months, and then you pay the debtor back.

968
00:29:18,100 --> 00:29:20,880
So there's other better methods than venture capital.

969
00:29:21,060 --> 00:29:23,100
You just don't need that kind of cash

970
00:29:23,100 --> 00:29:24,560
to scale a company anymore.

971
00:29:25,280 --> 00:29:26,860
But if you're, this is why I say

972
00:29:26,860 --> 00:29:29,220
founders gotta know what they're building because if

973
00:29:29,220 --> 00:29:30,380
you go into it thinking like, okay, I'm

974
00:29:30,380 --> 00:29:31,640
gonna make a social app and I'm not

975
00:29:31,640 --> 00:29:33,140
gonna charge users, I'm gonna be the next

976
00:29:33,140 --> 00:29:35,080
Facebook, you're gonna need hundreds of millions of

977
00:29:35,080 --> 00:29:38,060
dollars, essentially equivalent to what Facebook can do

978
00:29:38,060 --> 00:29:39,300
to go and dominate them.

979
00:29:39,560 --> 00:29:41,800
Whereas if you wanna make a cashflow app,

980
00:29:41,860 --> 00:29:44,140
like a SaaS, like a software service, maybe

981
00:29:44,140 --> 00:29:46,420
for salespeople or credit people or something, you

982
00:29:46,420 --> 00:29:49,620
can grow that company just through its cashflow

983
00:29:49,620 --> 00:29:50,200
over time.

984
00:29:50,560 --> 00:29:53,800
So usually the investment is used for advertising.

985
00:29:54,380 --> 00:29:56,040
It's the most direct ROI that you can

986
00:29:56,040 --> 00:29:56,420
get, right?

987
00:29:56,520 --> 00:29:58,380
So why not go with the most measurable

988
00:29:58,380 --> 00:29:58,920
means