How to Scale a Service Business with Maxwell Nee

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Maxwell Nee. Now, Maxwell is the Chief Revenue Officer of ScoreApp. That's a quiz marketing platform with over 7,000 paying clients. He's also a multi-award-winning entrepreneur, bodybuilder, and dancer. He's been featured in TV, radio, Forbes, Singapore's The Business Times, and the Australian Business Review. We've got some exciting topics to talk about today. So Maxwell, welcome to the show.

Yes, Mark, thank you so much for having me.

Yes. You've got such an interesting background and a really unique perspective as both an entrepreneur who's found success and now as an investor. Why don't you tell us a little bit about, you know, sort of your story of, you know, how you got to where you are today?

Yeah, good question. So I, one of my first businesses, I went through like 13 different niches before I got there, but one of my first businesses Um, you know, did pretty well as a team of 3 founders. And we went from zero to about $2 million a year in less than 2 years, um, which was a huge learning curve because the first 4 or 5 months we earned nothing and we all left very high-paying jobs to give this thing a go. But ultimately what we, the business we had was, uh, it was a digital marketing agency.

Yeah.

That then evolved into a course selling business. So we were selling coaching consulting courses, $5,000, $10,000. And, you know, at the peak of it, I'd hired and fired 50 people. I had 23 reports, you know, team members in the team all around the world. We built it during COVID So we had to be very, very like strategic, like COVID was going through its cycles of like the world is ending, we're in a crisis, we're in a recession, like all those things that we were just constantly navigating and just, you know, remarketing and remarketing and remarketing. And then, yeah, managed to get it to a pretty good point, which was a lot of fun, but also very exhausting. Yeah.

I bet. Did you take time off after doing that before diving into ScoreApp or was it an immediate transition?

Yeah, I did take time off, but not as well as I should have. You know, my habit is to always be doing something because I'm obsessive, you know, obsessive about entrepreneurship, about building things. So I jumped into another business that basically like It did, it still made money, but compared to, you know, what I'm used to, it like crashed and burned in my personal feelings. And there's a few reasons for that, you know, didn't think it through, just tried to jump to the next thing. I thought that, you know, I was trying to rush it because as you know, like a new business venture is a bit like, it's a bit like a new marriage, right? Well, you have to really see all the angles and see if you're gonna be happy and you gotta date the idea. You know, for a few weeks, maybe a few months, maybe even a few years. Then you gotta find the right people, the right partners. And if you take one shortcut at any of those processes, then something falls apart later. And that's what happened.

Interesting. Interesting. So we're gonna talk about ScoreApp a little bit later, but I don't wanna move off yet of, you know, sort of these lessons learned in, you know, sort of growing a rapidly scaling company from sort of $0 to $2 million in 20 months and And if the first 5 months or so were, you know, not yet getting traction, that means that it's really in, you know, sort of less than 20 months. So almost, you know, kind of a year and a half. What are, you know, some of the big lessons learned? A lot of our audience is entrepreneurs, folks that are, you know, trying to move up that steep curve. What would be some of the things that you would attribute that success to?

Yeah, so besides working really, really hard, like 17-hour days, you know, we were locked in COVID at the time, so there's nothing else to do. Like we were literally in, everyone was in lockdown. So I could either go from my computer to my couch to my bed, right? So I just stayed on my computer. But, you know, there's a few things. The first thing is that we had 3 partners in the business, like 3 co-founders, and we all became really good friends after. Like they'll all be at my wedding when that happens. And We, you know, we were all, in hindsight, we were all A players. So we were all hungry, motivated, driven. We all either had mastered our role or had the ability to master our role and were committed to that. And after hiring and firing 50 people, what I've really learned is anything less than A players, in the core team, like when I say core team, I mean less than 30, because then above 30, another layer gets built into the business and into the structure. Then anything less than 8 players really, really hurts the team. And there's a few reasons for that. So for example, if you have like a little sub-team, like the sales team, right? The sales team.

Mm-hmm.

And there's 4 people, In the sales team, there is 4 A players that performs really well. But then if you have, but then if you have, you know, 1 B player amongst 3 A players, what happens is that that B player will usually frustrate at least 1 A player. And then it'll— and then he'll actually demotivate another because A players like to win. They like to win. They like to go fast and they like to be challenged. But if there's someone, if there's like a weakest link that's just not fit for the role in there, they'll act as like a dead weight that's sort of like pulling the, pulling the ship down. And a C player is even worse, right? And I don't just mean aptitude. I mean, you know, really simple things like reliability, you know, reliability. I mean, like integrity. I don't just mean doing the right thing, but I also mean, like, you know, if you make a promise something's going to be done, then you keep that promise or you do what needs to be done to make sure that the bases are covered. And then you have, you know, attitude, right? Like, is someone, when things go wrong, And things always go wrong, uh, like, how do you handle it? Are you a victim? Are you a victor? Do you, do you take all pieces of feedback personally and, you know, get into a mood, uh, compared to just isolating and say, hey, look, okay, they're not talking about me, they're talking about the problem, you know? So how do we focus in on the problem type of thing? Interesting.

So you and I were chatting a little bit before and you talked about how, you know, people are everything, but they oftentimes don't scale. And sometimes when you build, you know, a business built on people but not on processes, it doesn't have as much value, you know, sort of to the next operator. It doesn't have as much sale value. And now that you're, you know, sort of spending more time investing, That's sort of come into the forefront for you. You've said, talk to us a little bit about, you know, what you see there now that you're in sort of a slightly different role instead of as the operator, but as the investor and the lessons that that gives for operators.

Yeah, so I was definitely more of an— so there's a difference between being an operator and an owner. See, an owner gets to think strategically, they get to think long-term. They see their business as a, as like a, like a car or like a, like a painting that they're building, like a, a beautiful masterpiece that they're painting, right? Um, but an operator sees themselves as the painter or they see themselves as like the mechanic. So they're always in the business and they're always You know, that they're basically just subconsciously just recreating their corporate job for themselves because they're always used to doing, right? Instead of like planning and owning. And there's a very big difference. So, what would— yeah.

EOS Worldwide talks about the visionary versus the integrator, where the visionary is that, you know, kind of the strategic mindset. They might be going in a million directions, but they've got, you know, really innovative ideas on where to go. Whereas the integrator is the like, well, how do we get there? And what are the things that we need to do? And typically successful entrepreneurial organizations need someone playing both roles. It's pretty hard for one person to play both roles successfully.

Yeah, exactly. And then, so, you know, we've been in this business working long hours, long period of time, had great success. And then I quickly realized, like we had at one point, we had like an 81% profit margin because, you know, it was just like this sales machine that was just working and working and working. But then I realized that the sales machine was, it wasn't actually like a real, what I would call like a real business, a real business machine. It was more like a— like a real estate agency. You know, a real estate agency just sells the next house, sells the next house, sells the next house, and they're really good at doing that. But each real estate agency is typically built on the personal brand of that particular agent.

Mm-hmm.

So for example, everyone knows like Ryan Serhant, million-dollar listing in New York. Like if, you know, Australian Chinese Max Nee from Australia goes to New York and buys the Ryan Serhant brand, is it going to perform as well without Ryan Serhant's face on it? No, right? Because like real estate's a very personal thing and it's something that takes a lot of trust and you're dealing with a lot of emotion. So people want to deal with a personal brand, right? So what I realized was that our business was a sales machine, which was doing a lot of numbers, which is a tick, but why were they doing a lot of numbers? It was doing a lot of numbers because our clientele was a bit like, they were very high emotional clientele. They were a little bit like a first home buyer seller. Like this was their first business. It was a very emotional decision, more than logical. And they really were buying into our personal brands that we couldn't sell, right? Like you can't sell your personal brand.

It's not an asset you can Sell to them.

Yeah. You can't write that off as goodwill or stick it in the right balance sheet and then there you go. So that was really eye-opening because I just thought, man, I worked so hard on this thing, but it has no value. You know, like it has no enterprise value and like it had some, but it was, you know, I don't know, like 20% of EBITDA would be the value. It would just be the email list. Right. That, but then even that would have a cull through because the list bought into our personal brands. Right. So yeah.

Interesting. Well, I, we do a lot of, you know, sort of exit planning with folks where they're, you know, they're thinking about selling their business. And one of the things that we find so often is they are really missing documented processes. They've been sort of running it the way that they know how to do it, and it's sort of second nature to them. And so they, they know how to do that, but they can't really hand it off even to someone else within the business, much less to a new owner. Uh, and one of the main ways we start to increase that enterprise value, uh, and that sort of resale value is by documenting what is the process for finding the new right leads? What is the process for talking them through the, the sales process? What's the process for Growing them beyond that initial engagement. And just even getting that down on paper makes such an impact to that enterprise value and the ability of a future owner to, you know, think about how they can operate the business.

Yeah, 100%. You know, what is process? What are the systems? But, you know, what I've really learned as well is what we built was effectively like an agency, like a service business. And service businesses, by definition, scale with people rather than, you know, better systems and technology and that type of thing. So we went, we didn't build a tech business. We built, we built basically a service business. So every time we, we took on, you know, 20 clients, we might've needed another to hire another 3 people, right? Which just adds more complexity and more complexity and complexity. Yeah, super, super linear. So no one wants to own that business, right? So you've got the personal brand plus the the linear scaling, but advertising and marketing was getting more and more expensive. So it was just reaching this crunch point, right? So now what I've really learned is, okay, I've really taken a step back and said, okay, well, what creates the most enterprise value? Just so that when I'm working hard, because I'm a hard worker, I love to work hard. When I'm working hard every single day, I know in the back of my head there's a pyramid that's being built just one brick at a time that's building that invisible enterprise value so that hopefully I could be one of those lucky guys one day that gets a $5, $10, $20, $50, $100 million, you know, exit, right? In addition to working every day and getting, you know, paying myself whatever I pay myself. So that's the goal.

Yeah. So you raise an interesting point there, and it's something that has been sort of top of mind for me and in a lot of conversations. We work with a lot of professional services and just that professional services tend to kind of scale linearly. Because every new client, in order to service them, you gotta hire new people, and those people need expertise, and there's not an unlimited number of those. And so the cost for those can go up over time, and it's quite challenging. However, and you know, software did eat the world, and so now there's so many sort of software tools available to services firms that they can start to productize some of the services that they offer and create more of a technology underpinning the services that they deliver or a technology-enabled, you know, sort of thing that helps their clients get the most out of the service. So sort of technology that ensures they're doing it exactly the right way every time or that they're logging the things that they're doing so that they can optimize or that they're following the process as it's been described through using that technology. And we see that that starts to create, you know, a much steeper shape of the curve because now you've got regular residual renewable income and you can start to expand it. Have you seen that with some of the companies you've invested in or worked in since you have sort of a unique perspective there?

Yeah. So I, during my last business, I invested in a company that does help us with lead generation. And this company is called ScoreApp. It's one I'm probably most involved in right now. I started off as an angel investor and then I invested another 2 times. I invested 3, you know, 3 rounds, so to speak. So I really believe in it. Now it's no longer open for investment. And, you know, my business partner, the founder of the business said, look, we're basically reverse engineering the highest enterprise value business, which in some ways is the hardest to build, but it's worth it, right? So there's 3 things that we're focusing on. The first thing is we're focusing on building a piece of tech that's unique to us, that we own, that no one else has, right? So there's, there is immediate scarcity.

Oh, well, yeah.

Moat. Yeah. Yeah. Wide moat, tall wall, immediate scarcity. And it's something that, you know, we could scale with our personal brands. So we're basically, you know, juicing our personal brands as much as we could because we're bringing the equity, so to speak, from our personal brand and dumping it into being monetized by this tech, right? Because the audience of our personal brands, mine and his, were perfect clients for this tech. So that was like a double take. Okay, so that's number one, tech. Number 2 is what kind of revenue. So this thing, ScoreApp has, like you heard before, 7,000 paying clients. That's about to jump up to 9,000 because we just did an acquisition. But let's call it 7,000. And that's across like people in 112 countries all around the world. It's a super, super diversified recurring revenue. Like the average person pays about $60, $70 a month. So it doesn't break the bank, but it also is super, super diversified. You know, like if one client, like every client, it's less than 1% of 1% of the revenue, right? So there's no concentration risk.

Industries.

Yeah.

Industry takes a nosedive, that's not going to tank your whole business.

Exactly. Industry diversified, income diversified, geography, country diversified, right? And then the last one is, yes, teams, systems, and processes. So, you know, we've got about 25 people on the team right now. And we know that for this, the enterprise value for this business, it increases enormously once you get past that 30%. people in the team, because past that 30-person people in the team, you know, you can't fluke having a machine work. Like, for example, if something has 20 people in the team, the business could be carried by a workaholic founder, just that's just running around like a mad chicken, you know, doing everything.

Or 10 really high-performing A-players that are all committed to doing the work.

Yeah, yeah. And they're just workaholics and they're just, you know, fingers in everything and you take one of them out, then there's a big hole in the ship. Bang, buckets of water starts coming in. But, uh, if you got, if you've got a business sustaining good profit margin, a lot of clients in a lot of countries, a lot of time zones, different languages, right? Um, uh, you know, more than 30 staff on the payroll, they've got proper Sick days, proper holidays, you know, like, like a real business. No one's, no one's needing to kill themselves, right? Working to, to make this thing just float like it's flying. It's not just floating, it's flying. Uh, but, and no one's overtly killing themselves to make that happen. Then you have a real business, right? Because you have a real machine that's really on steady ground. You take one person out, you could even take 5 people out. 5 people, 10 people could get sick in one day, but the business still works. Like that's, that's value, right? So that's, that's what we've reverse engineered. We're almost there, um, which is really exciting. And we'll hit some of those key milestones this year. Like for example, uh, our revenue will get over $10 million US annual recurring revenue this year, which is a cool number. And then, um, you know, the team will likely grow over 30, 35 people this year.

That's super exciting. So it kind of begs the question, I make you really want to kind of switch gears. You've been giving us a lot of insight and knowledge on sort of your course as an entrepreneur and getting to this business. And now I'm really curious to hear about this business. So let's kind of take off your investor hat and put on your sort of owner and operator hat. Tell us about ScoreApp. What does ScoreApp do?

Yeah, so let me start with the freebie. So we have this book called Scorecard Marketing, bestselling book written by my business partner. His name is Daniel Priestley. You may have heard of him before. He has written 4 or 5 bestselling books.

Yes.

And this book tells you what SCOREP is, how it works, and how to implement it. I can get you out a free copy. Go to scoreapp.com/book. You'll get a PDF, if not a physical copy, if we still have some in your country. You know, I have clients all over the place. And what we do is we are a quiz marketing platform.

Okay.

Right? So we help people to monetize the marketing method of quiz marketing. So what that means is like, Everyone has seen the ad at a gym or on Facebook or in a, in a health magazine, health and fitness magazine that says, uh, answer these 10 questions to find out your exact body type.

Right.

And then based on your exact body type, your frame, small, medium, large, uh, we will give you a personalized workout nutrition plan that'll help you hit your summer goals in Half the time.

Yeah.

In 8 weeks instead of 16, right? Which is very, very sexy and appealing because everyone wants to feel validated. Everyone wants to feel heard. Everyone wants personalized treatment because, for example, when I log into amazon.com and Mark, when you log into amazon.com, we see completely different websites. Because there's 10 years of my purchase history that's built my site, 10 years of your purchase history has built yours, and I'm only interested in what I'm interested in, right? So there's that level of personalization that you can give to every single client that we built into our platform.

That's fantastic. And so talking a little bit about, you know, sort of the implementation of it. So A company, let's say they buy into this idea of, I love, you know, using a personalized quiz. How would, you know, sort of like pick an example of a company and how they would implement this into their sort of lead gen flow? Like how do they leverage quiz marketing?

Yeah. So there's 3 places you can use it. You can use it as a lead magnet, right? Lead magnet is when you're turning an audience person. So there could be someone listening to a podcast like this, Could be someone watching, you know, YouTube videos, someone listening, following you on social media. You just post it and then it converts them to a highly qualified lead where they provide their email, contact number, name. And then, so that's using it as a lead magnet. And that works particularly well because the personalization factor, the quiz factor, it's different. It's more compelling. And we, you know, typical lead magnet has a conversion rate of about 10, 15%. The average conversion rate that we had across our 2.5 million quizzes that were filled out in 2024 was 30%.

Oh, wow.

So easily triple or double, right? So when you're a small business or a big business, you know, putting advertising dollars or putting effort into marketing, triple or double the inflow is a big number. So lead magnet is number one. Number 2 is bottom of funnel. So it's when the salesperson is about to execute the sale, right? So all the marketing's happened, the leads come in and a salesperson wants to execute the sale. A lot of people are using the quiz as a needs analysis to help them on that systematize and, you know, provide efficiency across sales calls, no matter the ability of the salesperson. You know, so some of our stickiest, longest-term clients been with us for like 3, 4 years and the company's only 5 years old, you know, uh, is like coaching companies that have 25-people sales teams. And every day the salesperson uses it and say, hey, look, when you book a call and we'll be talking, um, here is, make sure you do this first so we can, so we know how we're gonna walk through this call. So if you think about it, It's no different to when you go to the doctor. So you go to the doctor, hey, look, I feel sick. What's wrong? I don't know. Okay, answer these questions for me. Do your eyes hurt? Have you been sleeping? Is your throat dry? Are you coughing? Right? Are you itchy anywhere? All those things. And then the doctor, you know, lasers in to precisely where the problem is by reading the symptoms. So a really good salesperson knows how to do that as well. You know, whether it's you're buying a car, you're buying a house, you're buying a condo, you know, you're buying a new phone, whatever that is, they'll laser in from the symptoms down to the problem. So that's the second one. The third one is customer journey. So, yeah, you know, whenever you go to a 5-star hotel, when, when you check out and leave, they will try to get you to fill out a customer survey because they want to know, you know, was the hot water working? Was the bed itchy? Right? So that's during, you know, beginning, middle, and end of the customer journey. They might get you to do it at the beginning, might get you to do it at the middle, they might get you to do it at the end. You know, any really good business will do that. You know, I think I'm starting to get those from Audible now on Amazon. The, those surveys. I don't think I've ever gotten one from Apple, but I get a lot from my telecommunications provider as well. Yeah. So you use it for that as well.

Interesting. And then that provides insight on what the experience was like. And also you could even use it for insight on, you know, what was that buyer's journey look like in terms of where did they go for information? What were the informational needs they had at each stage? What other competitors did they evaluate? And I can actually see a lot of value in, you know, doing it through a somewhat arm's-length kind of relationship with a sort of a third party, probably creates a lot more authenticity from the customer where they might not tell the salesperson that they've been working closely with to customize this proposal, well, I actually looked at this competitor and they did this really good, but They're probably not quite as honest there as they would be with, you know, sort of this other interface.

Yeah, that's a really good point. You know, it depersonalizes it, right? Because it's not, you know, the general manager that's really sweet at the hotel saying, hey, what, do you have any feedback for us? You know, you're always going to just, your heart's gonna be open, right? And You're not gonna, but then—

They can't get any better if you just say, oh, everything was great.

Yeah, yeah, exactly. And that's the worst thing that a business wants to hear. They want to, they don't want to hear misrepresented, right, things because they can get lost in that. So they want you to fill out a form, then they look at data, they look at probability, they look at stats, right? Yeah.

That's awesome. So love the offer of the free book. Thank you so much for that. For those that are, you know, listening to this and they're like, ScoreApp sounds like exactly what I need for, you know, this particular, you know, problem that, you know, we're trying to tackle in our, in our company. Well, how do they, how do they engage with you? What would be the right way to start to engage with ScoreApp?

Well, we have tons of ways to engage with us. You know, we've got the book, obviously we have the website, which will take you straight into it. You know, it's free. There's a free version. So there's free and then you upgrade, then you upgrade, then you upgrade as it works for you. So no risk to get started. We have about 100 to 150 people registering for the free account per day. And about 10% of those move to a paying account. So that's, those are really good numbers. And, you know, we also do live webinars, workshops, and live events, mainly in London. But the live webinars, we do those pretty much every other week, you know, so we have one specifically where you get to talk to a person. So I want to say that our internal mantra in the business is that we want to force our clients to be successful.

Yeah.

Right. So what that means is we want to do everything over and above what you expect to receive from a tech company so that we make sure that you win. So what that looks like is, you know, when you message us, you don't message a chatbot, you message a real human, right? And when you want to talk to a human, we have a weekly workshop with our head of customer success that happens every single week. And she could talk you through anything. She could talk you through how to pay your credit card. She could talk you through how to use our AI wizard. So AI wizard, When you answer its questions, what it does is that it could write 6 to 7 hours of copywriting for you and a whole marketing campaign for you in about 5 minutes. They used to take, you know, a day and a half.

Sure. Yeah.

Awesome.

Well, obviously you've got a ton of experience and expertise and we could talk about this all day, but I gotta be mindful of your time. But thank you so much for the offer of the free book download. Score app sounds super exciting, and I can't wait to dig in on it more myself. So thanks so much for joining us today, Maxwell. Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform, and share to others who will find it useful. Do you know a If you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story, send us a note. Let's schedule a conversation.