The Mozi Hotline Is Open | Ep 892

The biggest belief breaker that I've had with content is that when I saw the guys who are the true, the best in the world, 20 million plus subscribers on YouTube, and I asked them to kind of look at my stuff, they said, oh, well, send me your pre-production notes. And I was like, what do you mean? I kind of just like have a couple of stories and I turn the camera on. They're like, yeah, well, that's why you don't have 21 subscribers. I was like, well, that, that tracks. What's going on, everyone? We're live in our first First personal Hormozy Hotline, second ever, I guess. I did one with Sean Puri and he did a little Twitter post and said, if you want to ask questions business-wise, you can ask him. And I had a blast doing it. And I was like, I would much prefer to do this than make the good old-fashioned direct camera. Not that I don't love it, but we're going to see what we got. All right, caller one. Let's see here. Hello.

Hello.

How are you?

I can't even believe I'm talking to you right now.

I can't believe I'm talking to you.

This is Candace Lambert. Nice to meet you.

Nice to meet you too, Candace. Tell me about the business. What's going on? What's the issue?

Okay, so I invented a ring for single people because I've been single all my life and the dating apps are just insufferable. So it's just a ring that's green that kind of shows that you're single and seeking. It has gotten some traction, um, Here's where I'm stuck. It's a colossal task to educate everybody that needs to be educated about it, and that's what is making people hesitate to buy it because they're not seeing it on anyone else or celebrities or anything like that. So they're kind of waiting any back. So I do a ton of product away just to get it out there. We're out there promoting it. We have a bigger cart. I do what I can, you know, in my free time. But like I said, I also have a salon I have a barbershop and an Airbnb, and I work there 6 days a week.

Girl, how many businesses you got going on right now?

What would Alex do?

Well, I mean, we'll try and figure out what you should do more than what I would do. But all right, tell me, what's revenue of the ring?

Not a lot. We've sold maybe less than 20 rings.

Oh, 20 rings in total. Okay, got it. All right. What are you selling the rings for?

It's $129.

Okay, got it. $129. All right. So that's— yeah, not a lot of dollars. It's in really nice packaging and it has—

authenticity card comes with each one and they're like very great. Perfect.

Okay. What's, so give me the, uh, the salon. So what are you making on the salon?

Oh, on the salon? About probably.

And that's your net or revenue?

Um, revenue.

Okay. Got it. And you own the salon?

Yes.

Okay. Got it. Okay. And then what's your take home on the, on the 100?

Yeah. So I did pretty good. I mean, I bring home probably 75 and then I make about $25,000 on the Airbnb.

Okay, great. So then Airbnb is $25K. Okay, got it. So what do you want to have happen here? Because I'll tell you this, trying to change the entire social norm around single versus not single is tough, like super tough. There's also not like a recurring revenue thing. So it's like I would want to educate the entire world on different way of single versus married only to sell them something one time is a very hard model.

Well, okay, so I did have plans and I partnered with a fine jewelry company for scaling it. Literally, the company is the only jewelry line for singles, the first and only jewelry line for singles. So we would have like stackable singles that you could also add, you know, like we'd have collections. So with the flagship product being the thinking bag from The Great British Bake Off.

Well, if this were Shark Tank, Candice, this is a tough one. So for me, this would be a pass. Basically, Candice is in one of these situations where she has this really big, you know, dream idea of this, I want to change the world of singles and dating. And then she has two other businesses that she has going as well. So she has three enterprises she's pursuing and she also doesn't have the resources to really do this. I wouldn't want to pursue three things now and I have a ton of resources. And so the reason that I harp on focus so hard is that it's just so hard to make anything work that you have to put all your resources into one thing if you want to make it bigger. The getting the single rings is like, I have to change the entire perception of a population and then If I were to do that, I would want to make sure that I had some way of consistently monetizing them for an extended period of time. Now selling a physical product that's a one-time purchase on $129 to me is very tough. So even something that's a product like a drink or something like that, well, it's consumable. I'd be inclined to think, okay, well, if we make sure the product's good enough and people keep buying it again and again, so we're acquiring customer once, but then we get customer for life. Here it's purely transactional and do people want to stack rings? I don't know. Do people want to say and shout to the world that they're single publicly. I don't know. I mean, up to this point for zillions of years, just not having a ring has been the demonstration of that. I would be focused on the business that's the salon business and say, okay, how do we take this to $4 million a year? Or how do we take this to $1 million a year? And focused on that. That's what I would do. If you're like, what would Alex do in my situation? And I wouldn't think about the ring, just to be very candid. You have 3 different businesses going on. You have super limited resources, limited time, limited money. And the ring especially, is going to require a ton of capital to really win. And so the way to, if you really do want to make the ring win, the way to do it would be to dramatically decrease the scope. And so what I mean by that is that you would say like, how do I win the green ring in a high school? And then how do I win in, or college, whatever? And then how do I win in 3 colleges or 5 colleges? You have to just dramatically narrow the scope so that the resources you have can get saturation because the business model that you have is a good business. It's just incredibly hard to do. It's like Facebook's business model, really good business, really hard to do. That's why there's only one Facebook. I see where your passion's at with it. First off, I wouldn't do it, but if I were going to do it, I would do it this way, which is I would get way, way, way, way, way, way, way, way more narrow on a tiny, tiny, tiny little puddle of a puddle of a puddle that I could put all my time and effort into. And the key for you is that you have to have a viral coefficient. Right? You have to have something that gets it shareable. Like people have to want to share it because your dollars aren't going to go that far because you don't have that money. So you have like, it has to grow off word of mouth. If it doesn't, you have to keep fixing until it grows off word of mouth. It's the only way you're going to win unless you raise a ton of money. That's me being real rather than nice.

That's great.

That's what I want. Okay. Well, I'm still rooting for you to do the salon because I think that you can much more easily just be like, okay, I'm going to 5x what I'm doing here. But that's another call for another day. Appreciate you, Candace. No, you're great. Thank you for being a sport.

All right.

Bye. Yeah, I want to be real with you guys. I will always be taking the perspective of like, if I were to invest in this business, what would I do? If Candace were really serious about the green ring idea that she has, she has to— it's going to take a ton of money and it's going to take a— and it has to have a huge amount of initial traction. And so I would be continually tweaking the product, tweaking the product, tweaking the product. Now, right now, the ring itself is not really the product. Like if she wants to build the app, that makes more sense. These things go together. But just selling the green ring is very much marketing and that's very hard to do. Word of mouth, only sell a concept of marketing via word of mouth. Like product, because as soon as you're 2 degrees separated from the founder, the product has to do the selling more than anything else will. And maybe you can make the argument that a story will, but again, it's like you have to have such a small pond where you can actually achieve saturation where it actually becomes useful. This is Alex on the Hermosi Hotline.

Yeah, thanks for taking my call.

You bet. Tell me about the business. What's the problem?

So I run a digital marketing business where we focus a lot on hosting, website management, and doing some web design. Right. And honestly, I don't know where to spend the most time to get people in. Uh, we run about $3,500 or so a month. Um, and I also have a full-time job with 3 kids.

Got it. So you're making $3,500 a month. Right now off of it?

Uh, on that business. Yes.

Okay. $3,500 a month. Got it. How many hours are you spending on it?

Roughly 20 to 30 hours a week.

Okay. 20 to 30 hours a week. Got it. Can you handle more business right now?

Yes, I can actually. I had to bring on a team because, uh, I knew that I wasn't being able to help.

Okay. If you had to bring a team on and you're at $3,500 a month, you're underpriced. So that's like thing number one is that you probably need to charge more for what you're doing. How many clients do you have at $3,500? Uh, we run Uh, dude, but wait, who are you? Is this for businesses?

Yeah, it's for a service-based business.

Are you running ads? Are you like, or just like managing the pages?

Yeah, we're just basically managing it for them so that they can focus on their stuff.

So why do you need a team if it's so passive?

Mostly because I don't want to handle the website design anymore. Uh, we bring on somebody for that, uh, it's a per-client basis.

But they're paying $150 or $100 and whatever. $200, somewhere in there, $175 a month?

Yeah, somewhere in the range between $150 and $300.

Okay, so you got 20 clients paying somewhere in the neighborhood of $150 whatever plus a month, right? And you're managing their— what is managing the site actually entail?

So hosting, backup, security updates, making any changes they need to the sites.

Okay. Doesn't sound like a ton unless you have a lot of people who are asking for a lot of stuff.

No, usually our cost on a per client basis is about $34 to $35.

Okay. So when you said team, do you mean you have one guy who's doing this?

Three.

So three guys making like nothing?

No, honestly, I have no idea what they're making. It's—

Well, we're splitting $3,500 and you're running 80% gross margins on it. So there's only $700 left. You said there's three guys.

Yeah.

So they're not making anything. My point. So we've got, we've got 3 teammates. Fine. Okay. There's a whole bunch of things that need to get fixed, but we'll get to that in a second. So how are you getting customers right now?

Word of mouth. Facebook sometimes. Networking.

Okay. When you say Facebook sometimes, what does that mean?

Facebook groups. Going in, answering questions, helping out.

Okay, cool. So if you're not the one doing the actual website stuff, What is the 20 to 30 hours a week you're spending on this business?

Trying to grow through networking.

Okay. And that means like in person, like, so I mean, that's, that's 4 hours a day, right? I mean, that's, that's real time. So what, so what are you doing every day?

To be honest, I don't know. That's why, that's honestly why I need to— Okay.

No, you're good. No, you're good, man. You're good. You're good. Okay. I'm going to help. All right. So we have to pick one of the 4 promotion methods. Okay, so you can reach out to friends one-on-one. So think text, DM, email, phone call, any of those. When I say friends, I mean anybody who's in your contact list, anybody who's a subscriber to yours on any platform, anybody who's ever emailed you in your entire life that's in your Google or whatever Gmail, you know, whatever your email provider is that's ever emailed you. That is the first list you make. You export all your contacts on your phone, all the people that are subscribed to all your social medias, all of the contacts you have on, on your email platforms. And then you message all of them with an option to, well, if you want, you can work for free for a period. And then if they're happy with it, they can start paying. I mean, that would be the first thing we did. The next thing is that you need to raise the price by a ton. So, I mean, for what you're doing, I would say like minimum I charge $500 a month. Again, right now you might be talking to business owners who are just not that big either, which means you just have to go after people a little bit But I mean, if you just do that, if you did nothing else, like if you're spending 20 hours a week and you just spent 4 hours every day just messaging the people, say, hey, can I work for free? And then if I do a good job, pay me afterwards at this rate. Like, I think you'll probably do more than you are now. That's thing one. Thing two, I mean, I can give you thing two. Do you want to do thing two or you want to do thing one? Just do thing one and still make more. Yeah. So thing two is that I want you to make the same like make some content, but make the content in those communities. All right. And ideally, I think if you're like, you can go after local because there'll be a little bit more trust if you're down the road, et cetera. So look at the local small business groups on Meta and whatnot. And I would just basically put valuable posts. I would put teardowns in there. Like look at this website that we redesigned for free. Look at this website that we did. And I think people will just solicit you and anybody who interacts with it, you can reach out and offer them free stuff.

Yeah, sounds good.

And then when they get on the phone, of course you can say, hey, that's what I'll do for free. I do more stuff for money if you want. And then you can obviously upsell from there. That's it. That's all you got. Like, that's where all your attention should be going. One is we got to change the price from $150 to $500. And number two, you can give away a free thing upfront into the $500. And number three, spend the 20 hours a week doing outbound one-on-one. All right. Appreciate you, man. No, you bet. Congrats on the business. Thanks for taking the lead. Hello, Hormozy Hotline. Gabby, what's up? How are you?

Good. How are you?

Excellent. So tell me about the business. What do you want to have happen that's not happening?

Well, so I grew the business, um, solo over the course of a year to a 6-figure business. Amazing. And I created— thank you— I created so much demand that I could no longer handle it by myself.

Awesome.

So what do you sell? So I sell what's called The Compass. It is a confidence, resilience, and emotional mastery system for youth athletes. Okay. To help them understand their emotions on the court, to help them be confident, to help them—

is this a course or is this serve— like, how, which, what's the delivery?

It's both. So it's a physical journal. Okay. It was designed to kind of meet kids where they are. Okay. In like gamified settings. Okay. Journal will guide them through what I developed called the MAZE model. Okay. So it's Mindset, Analyze, Zero, and Execute.

Okay.

Reflection over the course of every season. So the challenge with our kids these days is that they are accustomed to instant gratification. They don't know what exists We tell them they have to work for something. And then with social media, they're very insecure.

Yeah, heard that.

So they're always like comparing with us. We're trying to help them with that.

Let's go business. What's revenue right now?

Revenue right now, I'm around $10K month over month, but that went down from $30K to $40K when we hired people.

Wait, revenue is top. Okay. When I'm saying revenue, is your, are you still doing $30,000 to $40,000 a month in total sales? Like just, okay. And then your profit is 10. Um, no, my, my revenue has dropped from $30,000 to $40,000 down to $10,000 after hiring people. Costs go up, revenue goes down. No bueno. Okay. Got did you stop doing when you hired these people?

I stopped doing all the services myself.

Okay. And so as a result, word of mouth stopped because they're not as good as you.

Um, not that they're not as good, they're new.

Well, they're not as good. We gotta be able to speak Quayley, right? They're not as good. If they were good, then you, this wouldn't have happened. Okay.

It wouldn't be a problem.

Right. You have people who are delivering the services. As a result, they're not doing as well. And since they're not doing as well, you're not getting referrals. Does that summarize it?

Not getting referrals and not able to handle any demand in the business. So just the backfill, like for me as a founder, I need to be talking to customers. I need to be doing content. I need to be leading the team and organizing the team and putting together systems, which I can't do anymore because I have to teach.

But before this, you were generating demand and doing free 3 or 4 times the volume without them.

Yes.

So what am I missing?

Killing myself doing it.

And now you're getting killed.

Yeah, now I'm getting killed dollars-wise. Yeah. Um, I have a brick and mortar and I have a digital side. So the brick and mortar is very labor-intensive. I coach volleyball, so it's, uh, hours upon hours of coaching, practice planning, um, talking to the parents and making sure the parents are understanding where the kids are developing and where they're not. And all of that was just— I did it for a year by myself, and then it was just— I ran myself into the ground. Like, I need people to help me do this.

What are you charging per student?

We charge $1,750 for our 12-week course, which includes 4 hours of training per week over the course of 12 weeks.

Okay, that's our flagship offer. Okay, and is that one-on-one?

It is group, a small group setting. We cap our classes at 20 right now. I had— when I was Doing 30 to 40 a month. I had like a half full class, so 10 girls.

Is this in person?

In person.

So people come to you in person for the 4 hours per week of sessions?

Correct.

For the breaking career. Got it. Okay. Times 12 weeks. Okay. Got it. And so they're paying, you know, just under $2,000 for 48 hours, call it, of work. Does that sound right?

Yeah.

Okay. Got it. And then it's one on, you said one on 10?

Yeah.

Okay. So for one session, right? If you just did one, one 4-hour session a week for 12 weeks, you could do $17,500 if you just did that. Okay. And that'd be over 12 weeks divided by 3. So you'd be somewhere, whatever it is, $6,000-ish a month if you just did one of those per week. If you did 5 of those a week, so half of your day, then you'd be making $30,000 a month. And that's kind of, I'm guessing, where you were before this?

That's kind of where I was before this. We also have the digital side. So what I did when I got to the year, I was like, oh my gosh, the cost of acquisition in my body and labor is so high. What if I put all my attention into the digital side? Because I can scale faster, I can do more clients. It's not in person, so I can go wider and far. So we spent the last couple of months while I hired my employees building out a digital system, um, a digital ecosystem where we are focusing on selling the journals. My enterprise client is volleyball clubs. So there are about 5,000 volleyball clubs across the nation, and their average amount of players per club is around 200. And so I have a number of clubs buying the journal, and then we're trying to get them into the ecosystem and space, like do a product there. So I'm like, can I replace my brick and mortar with the digital, or can you run both at the same time? That's kind of where we are right now.

Is this your whole business? This your primary thing that you do?

Yeah.

Okay. I mean, you have a decision you have to make, which is what business do you want to, you want to own? I mean, obviously the online is going to be significantly more scalable than, than, than the brick and mortar. The difficulty you're going to have online is acquisition because right now when you're local, you're very spoiled. And I don't say that as a slight. I just say like, there's such embedded trust when you're down the street from somebody, like you don't need to have multiple indoctrination sequences, you know, huge brand, lots of content, you know, video sales letters that have to go out to convince people. That's if you're selling, you know, straight to consumer. If you're selling to the enterprise client, then it's going to be more outreach, multiple touchpoints, et cetera. I would say that the more valuable business for sure is the, can I get the enterprise? Can I get all these teams to buy a journal and then have a subscription as a team? And then that you facilitate training the team fundamentally that they have to, they have mandated kind of curriculum they have to attend. So I kind of like study hall. It's, I think that model works and scales. The question that you have to deal with right now is the bridge, right? Of how do I go from where I'm at now to where I'm trying to go?

Yeah. Because I'm deep in the brick and mortar investment-wise.

Yeah. Well, what do you mean investment-wise? You mean like you put money into the location?

Yeah.

Yeah. So besides the delivery, when you were making 4 times as much money, what were you, what were you doing for promotion?

Um, mostly Instagram. So I have a pretty decent Instagram following. Yeah. And so I'm just telling— so here's, here's the challenge right now in youth athletics. Mindset isn't a standard. Strength and conditioning is a standard. Skill training is a standard. Mindset is not, but it needs to be. So I'm going in and educating and telling people that based on my experience as a former Division 1 volleyball player, you should be doing this. Okay. So as I educate, it brings in a ton of leads, right? So all my leads come from Instagram. I bring them into the studio.

What percentage are not local?

Um, no, they're all, they're all local.

Interesting.

Within like a 20-mile—

Yeah, but on Instagram that it's local, it's very interesting. This is tough. So you have a business that's based on you, and then you quickly put other people in place who are not as good as you to do this curriculum, and in so doing killed your cash flow. Which makes it difficult to do anything. Right. So I would prefer we look at the calendar. If I transported my brain into your body and I had to take over the wheel today, I would be saying, okay, I did $40,000 a month when I was killing myself. I would like to do $20,000 a month, except I'll raise my price. Because if you have more demand than you can handle, then price is a lever. So I'd raise my price and I'd cut my time in half. And then with the excess time, I would spend my excess time and excess cash because now I don't have any other people. To start developing out the digital thing. So basically you have to put a cap on your time because you're purposefully saying, I'm not going to take all the money that's on the table right now so that I can build this other thing. And so if you really wanted to take the real hypothetical extreme, you could cut 3/4 of the time you were doing before, double your price and make half the money, but you still have 75% of your time. And so right now I think your pricing lever is the one that you're not using because you said you had oversold demand. And so I think also the fact that you haven't recently been doing the delivery will also still give you artificial bump. If you say, hey, I'm coming back in, but only for select clients at a higher price point, you actually have a decent narrative to do that now. The enterprise play with the team signing on and them getting on a very small subscription for many of those people, many parents are accustomed to spending that kind of money. I think the whole mindset thing makes sense. All that jazz is, but you still have to get there. Right. And so we have to buy you time. We have to make you money. And so raising the price and capping yourself at either 25% of the time you were at before or 50% can get you at least half to maybe even 100% of the revenue you were at beforehand. And I would have a very strong look internally of like, I know I have these people, but if you don't take care of the business, they're not going to have a job for long anyways. So it's like, we got to take care of the business. You got to put the oxygen mask on. We can breathe and buy some space, buy some padding, and then once the enterprise starts kicking off, then of course you can have the training for them. Also, I think that some of the best people you might take would be probably ex-athletes or even some of the older people that are graduating from those teams and offer them internships of people who like really excelled at it. And then you'll be able to get some free labor or at least discounted labor. That might be solid. Do we like that plan?

I like that plan.

Okay, good. I'll have this played for us. Congratulations on the business.

Thank you. I appreciate it.

All right, well, have an awesome day and, uh, keep us posted.

I will.

All right, you're on Ramozi Hotline. What's going on?

Hey, how you doing? Um, my name's Jonathan. I have martial arts schools and we have 5. Rock and roll. And they do well, but my challenge is always in getting more people that want to be instructors and then Training those people on how to sell.

Okay.

And it just seems like it's like a niche within a niche within a niche. I'm wondering if maybe there's a better way to go about it.

Really pointed question, which I love. I wanna ask some questions about the premise first off, which is you've got, you've got, you've got these train— I call them trainers, whatever, instructors. Why do they all need to learn how to sell?

Well, the model we've run, run at a high profitability is that basically you have a guy that does it all.

Small brick and mortar.

Okay. 150 to 200 students. Yeah. At a rate average of about $300 a month. Great.

Badass. It's great.

Good morning. You know, we run ads on Meta. Mm-hmm. We call leads, we sell trials over the phone. They come in. Yep. We do a tour and orientation, invite them to enroll and save money by enrolling on the first day if it's a good fit. Yeah. And, uh, getting guys that are really good on the floor to be really good at sales. Yeah.

Yeah. I mean, you have identified the difficulty of the model. So, you know, it's one of those, this is more of a feature, not a bug type setup. So it's one of these, like, there's a lot of different businesses where like, okay, well, you know, selling cleaning is really easy. It's like finding people to clean is really hard. So it's kind of one of those that you got to pick, like every business has shit. Right. And this is the one that you've got. Now I'll tell you this. What's your churn right now?

I don't know off the top of my head.

I'm guessing it's decent. What is— okay, okay. So what are you compensating instructors?

They get a percentage of gross revenue.

Oh, revenue.

Plus bonuses.

Okay. What's their OTE or on-target earnings? What do they make per year?

Depends on the location. Anywhere from $40,000 to almost $200,000. Oh, wow.

It's a big range. Okay. Yeah, yeah. Big range. Okay. So the entire issue you have is you need to find someone local who who knows martial arts who can sell, right? Okay, so I guess the reverse question is, is it easier for you to teach somebody who has martial arts how to sell, or easier to find somebody who can sell to teach martial arts?

And there's the challenge I wrestle with all the time, because, you know, people that are good at selling, they're not martial artists. They're not martial artists, or if they are, the problem is it takes so darn long to get good. Yeah, like most of our instructors are at least second degree black belts. We're looking at a 5-year training period.

Yeah, so then it sounds like the reverse is the— now that's if you require a second degree black belt to be the, be the guy, right? I would imagine that, like, for me teaching this sale, I don't think should take longer than like a day or two.

What do you mean?

Like, this is not a hard sale. Like, the setup you're doing, like, you're not selling you know, intangible consulting services for $250,000. You're selling a membership to a martial arts studio. So this should be like a 6-question script that you just have to tell them when do you raise your voice and when you shut up. And so my guess right now is that the deficiency that you have as an entrepreneur is that you're not good at teaching sales.

Well, the guys we have are really good. It's how do I recruit more of them?

So do you just need such a small pool? Okay, so then said differently, do you just need to be able to find— So if we— Okay. So I'm taking this argument. If we think that if you are good at teaching sales, let's just take that position, then it's not trying to find martial arts people who can sell. You just need to find martial arts people.

Yes.

Okay, great. We're getting narrow on the issue. So how big is the city that you're in?

Greater Sacramento area, about 2 million.

If you were rural Kentucky, I'd be like, that would be— I can see that might be, you know, be an issue. But no, I mean, how many martial arts groups are there in Sacramento? Are there any students that you can promote? You've got 1,500 students, or, you know, either 300 times 5 or close to that. It's like there's not one who would just be willing to make $100,000 a year and quit their job and do karate all day. I mean, I mean, it's slight, but I'm saying like, you know, they wouldn't do martial arts all day.

Yeah, yeah, it's the constraint of the business.

Anything that you're doing that's not recruiting is you not pursuing businesses. If that's the limit of the business, if that's the constraint, then every day I'm waking up and before, you know, before noon, I've reached out to 100 people about whether they know somebody or they are the person who is really good at martial arts that either lives here or is willing to move here. Like you can also offer something like a signing bonus for $5,000. Like there's, there's things you can do if you want to incentivize people. But I get the impression right now, it's like, have you solicited the whole 1,000-person-plus base that you have, number 1. 2, have you emailed your entire email list from historic? So I'm sure you have a bunch more leads that never came in from— you've been running ads for a while. Ask them if they would like to be an instructor. Number 3, ask them if they know anybody who would like to be instructor. Number 4, I would go at, you know, like the Sacramento, you know, martial arts community, and I would ask them. I would go to the tournaments and the meets and find people at the— like, this is so solvable. What stops you from doing that? Nothing. Okay, great. Well, we got narrow running because I think you had a narrative around like, really hard to find martial arts people that sell. It's like, okay, well, are you bad at teaching sales? Like, no, I'm good at teaching sales. Okay, so we just have to find martial arts people. Okay, great. Let's go find some martial arts people.

Yeah. Okay. Yep.

Appreciate it. No, you bet. Congratulations on the business. Yes, sir. Talk soon. Hello, caller number 5, 4. What's going on? It's Alex.

Hey, I'm Mike Hernandez and the founder of Augusta Lawn Care.

Mike, what's up, man? How's it going?

Shit, good. Um, last month we did $1.1 million in revenue across 3 different departments. So 50% of it comes from the franchise, 20% from the media side of things, and 30% from Compliance CRM, which is like software.

20% software. What was the 30?

50% to the franchise. Yeah. 20% from the media side of things and 30% from Copilot CRM, which is the software. Okay. And so we have 191 locations on the franchise side now in US, Canada, Australia, about 180 in operations now.

Okay. 180 open. Got it. Okay.

System sales will probably be around $70 to $80 million in 2025. Okay. And so I came to the scaling workshop last year, so you, and you said really focus on your Economics. So yeah, Dr. Cash and I work with kind of 5 different ways to solve the off-season for the franchisees. Yeah, and the goal is 1,000 locations and to go public in 6 to 8 years. Okay. Right now my constraint is that 100%— I guess my question is, 100% of our franchise leads come from our organic social media content on YouTube, and about 225,000 subs. So my question is Should I focus more and better on the content side or just start a second marketing channel or acquisition channel, paid ads, outbound calls, et cetera, just because we want to increase the speed at which we're now selling locations. We really haven't been pushing it up until now.

Hmm. Well, I'll first say that this is a many ways up the mountain type problem. So I want to be clear that like either will work. So just like upfront, so that way you look back and think like, oh, I should have done the other way. Like both of them will work. Like if you just say, I'm going to spin up outbound. You look like you have the resources to do it. So that will be fine. If you wanted to say, like, you know, I'm going to double down on content and make more better content, that would work too. Because it's not like you're, you know, it's not like you've tapped YouTube. You don't even in terms of the cut that you have. Are the people that are coming in existing lawn care guys that are flipping or are they people who want to start a lawn care business?

The vast majority are converting, about 70%.

No, I think it's better. I think it's better. That's good. Okay. So you want to grow faster. How many units a month are you selling?

Right now we average 40 to 50 units every year basically since we started.

So what, a week?

Approximately, yeah.

Okay. So you sell one a week and have you changed your cadence on content or what you make?

In the past year and a half, we've basically done weekly and then shorts are more frequently across all platforms, but they're turnaround shows. Travel app is a full production team and when we do Turn Around the Business, it's all home services.

Different plays here. So it's like you could just run ads and just retarget all the people that are in your existing audience. That would probably be the lowest lift. It's like, what's going to be the thing that's going to get you to where you're trying to go the fastest? It would be that. If we imagine your audience as a triangle, you basically have persisted at making money by letting people kind of flow to the top of that, that little peak. And then some of these people convert, right? And then you have a huge amount of people underneath that are just kind of consuming free stuff. Now you can either move the line down and convert a higher percentage of the audience, which you would do via ads, or we extend the size of the pyramid overall so that the percentage of people who convert then becomes a larger slice. Both of them work. And so then the question is, okay, which do you have more skills that you can do in a shorter time period? So given your existing resources.

I would say I'm better at the content than figuring out paid ads.

Okay.

Not right now.

Well then I would say if you haven't really changed much about your paid ad strategy in the last 18— sorry, excuse me. Your content strategy the last 18 months, that's where I would double down on. And I wouldn't double down on it. I'd be like, how do I 5x down on it? You know what I mean? Like, so how many pieces are you putting out a week right now?

One long form a week, uh, on YouTube, besides the show. And then every day is shorts.

Yeah. And you're only doing that on YouTube?

Facebook, Instagram.

And that's for shorts?

Those are smaller platforms. They said maybe get $100,000 on those platforms. YouTube is where everyone says they hear about me.

So I'll give you a little tiny little tactic that, that we've seen work well is one is, is your CTA just in the description?

Yeah, we really don't do much CTAs, like maybe sometimes one lower thirds on the videos. Yeah, but really not much, much CTAs.

Okay. So thing number one is I would put the CTAs within every video. There's 5 different ones. So you can put CTA in the description, CTA at 30% mark of the video. You run your own kind of internal ad. The next is your actual profile. I would put it there. The fourth would be pinned comment on every video. And then number 5 would be a YouTube community post. Are you using those?

Yeah, right now, daily, about daily.

Yeah. The community posts?

Correct. I'm just looking to keep speedier. That's probably where I'm lacking. I've kind of used the strategy of like everything free, but not trying to be too promotional.

Well, you could, so it's a great point. So I kind of see these as kind of persistent. It's like a, it's like an email sign-off. If you give away stuff for free in exchange for an email, I still see that as free. I don't see that as like a bad thing.

Okay. Yeah. We do that and I have about 50,000 that we can email.

Okay. Are you emailing Ray Liu right now?

Two newsletters and then on Friday when we release the show, we send out basically a summary of that.

Do any of those three emails per week have any call to action?

Of them. Sometimes, yes. I've been moving away from them actually to get, um, to just focusing on like the open rate.

But, um, I don't think you having a CTA is going to affect the open rate. This is how I delineate this. Cause I think your instincts are good. It's just an execution thing. So I, so like, for example, are you on Mosey Minute by any chance? My email? Yeah. So like, I don't, I don't think that those emails are super right now. I think it's like, here's a tactic that you can use today to make more money into this, this. By the way, you can go check out our thing, which is I only have one line that's a CTA. And then the entire rest of the email is here's stuff you can use. I think that use it. I mean, I use that strategy for a reason because I like it. And it's not, it's just like when someone is ready, they can raise their hand and I make it easy and quick for them to do it. When someone is not ready, they just can skip past it. No big deal. There's two ways that I've seen work really well. One is the way that I do. The other way is basically the, uh, the ultra PS, a super signature, if you will. Where you underneath of the email have 4 different, you know, things that someone can do. It's like, hey, if you want more free stuff, go here. If you want this, go here. And if you want this, go here. I tend to prefer fewer calls to action that are more direct, but that's just me. But also just have one signature that says, P.S., here's my CTA, right? So I think number 1, I would be emailing with CTAs. Number 2, I would embed in those 5 places. Again, I don't think it hurts. If the biggest podcast in the world can have 8-minute-long ad reads, You can put a 30-second thing saying, hey, by the way, if you don't know, I own franchises and I sell these things. And so if you want that, you can go here. Otherwise enjoy the show. Like that to me is not, I don't think people are like, screw this guy. You know what I mean? Those are the two of like moving the line down in terms of converting a higher percentage. The other is still basically, I'll bet you that you have to spend more time than you currently are in pre-production for the content to grow. Like, I don't think it's, oh, let's go from one video a week to five videos a week. It's how do we make that one video Like if you had to spend 5 times the time on that video, could you get it to perform that? And I mean, being real, like the biggest belief breaker that I've had with content is that when I saw the guys who are the true, the best in the world, 20 million plus subscribers on YouTube, and I asked them to kind of look at my stuff, they said, oh, well send me your pre-production notes. And I was like, well, what do you mean? And they were like, the pre-production notes. And I was like, I kind of just like have a couple of stories and I turn the camera on. They're like, yeah, well that's why. You don't have 21 subscribers. I was like, well, that tracks. And so right now you're putting all this effort into the production of the show, but I would put a ton into, here's where huge leverage is, is the selection of the people that you're going to go see. How are they on camera? Huge. That's why they do casting for all these shows. Prepping them ahead of time so that it's tighter, it's faster, it's better. And then looking at the packaging, packaging and headline for that stuff, looking at outliers, See if you model outliers, make sure that the hook of the video is going to match the headline and the thumbnails, all that stuff.

Good question on that. Double-click on it because I do see the constraint of the content as they are casting and the number of people that apply to the show. Would you use my CPA? Yeah, sure. More directed towards that or towards the actual—

No, more. Just both. Just both. Can. Yep. All right, Mike. Appreciate you, man.

Thank you, sir. Bye-bye.

All right, see ya. Put the hot and a Rosie hotline. So if you guys enjoyed that, let me know and I'll do it again. I enjoy, like, I could do these all day. This is like the most fun stuff. You can see all the, like, the level of the business, the change in terms of how we're thinking about it. Like in the beginning, we're kind of like double-checking the idea of like, does this validate the idea of the business? The second one we went through was web hosting. It's like, okay, well, he fundamentally was mispriced and he wasn't promoting enough. Okay, great. We fixed that one. And then we had Compass. So for her, she had hired too quickly. Also was mispriced. So we had to raise her price, get her back in at maybe a quarter to half the time to free up time and cash flow. She could pursue the better opportunity, which is the enterprise. And then we obviously had Mike just now, we just need to increase demand. Right. And so for him, it's like, we need to do more, better on the stuff that he's already doing. And the better side is also the conversion aspect. So it's like, boom, everyday business. Oh, then we hit martial arts. So supply constraints. So it's okay if you have one point of leverage in the business. So like Mike needs to just make more content. He just needs to go recruit like crazy. She needs to go and get people back on at a higher price so that she can then book in the rest. And the other two I went over already. That's this week's Hermosi Hotline. This is so much more fun.

Rock and roll.

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