How to Create Your Perfect Customer Persona

What's up, everyone? Alex here. Welcome back to Founders Journal, my personal diary made public for the world. Today I'm doing an update on one of my businesses, and that business is StoryArb. StoryArb is a ghostwriting agency for B2B execs that I launched around 3 months ago after just firing off a tweet on Twitter. Even if your business or your work is completely different from what we're doing with StoryArb, My goal is to make this episode super useful for you regardless. So what I'm going to do is provide a very transparent rundown of StoryArb, the business, as of July 7th, 2023. I'm going to share our current numbers, what's going well, what's not going well, and what we're prioritizing. If you have any questions about the business or you want me to do a similar analysis for your business and then share it in a future episode anonymously, shoot me an email to alex@morningbrew.com. Now let's hop into the episode. So quick refresher for people that don't know, StoryArc is a ghostwriting agency for B2B executives. The thesis of the business is that in an age of abundance, abundance of content, owning a niche on the internet and building a trusted audience is a priceless asset that you can build. And executives are waking up to this very reality. Basically, the story behind that thesis is I was scrolling through Twitter one day and I was thinking to myself how there are individuals that have generated tens of millions of dollars in revenue or tens of millions in enterprise value by owning their own niche on the internet. People like Nick Huber, Nathan Barry, Sahil Bloom, Justin Welsh, Morgan Housel. The, the list goes on. And I thought to myself, there are people that are world-class executives that have just as good of lessons and stories to share as the people I just named, but they are not known on the internet because they either don't have the time or they don't have the skill to build audience online. And my thought was, what if I do it for them? So StoryArc was born with a single tweet and it's completely snowballed from there. So let's walk through the numbers. As of today, we have 10 total clients. Each client is paying roughly $7,000 per month, and for that they're getting 12 total posts on Twitter and LinkedIn each week, and monthly revenue for the business as of this month is $70,000. A few notes on these numbers. When starting the business, we priced our service lower, and as we've gotten confident in our process and we've seen how strong demand is for our product, we've increased the price. We first priced the service at $4,000 a month, and we were basically making no money on that client, but We were okay with it at first because there was a lot of learning around how does a client work with a ghostwriter. But this lesson around starting your pricing low and continuing to increase it as you see demand scale is something that we saw with Morning Brew as well. Our first ad for Morning Brew, we priced it, I think, $800 in our newsletter. And today it's, you know, somewhere in the vicinity of $100,000. And so where you first price your product is less relevant than how fast you are going to learn about what your demand is and if you're providing an actually great service. The other note is you'll notice that I say monthly revenue and not MRR because there is nothing recurring about an agency business's revenue. This is not a software company, and we shouldn't be using terminology that infers that our revenue is stickier than it actually is. And so my general thesis is anyone who has a non-software business and they say the words MRR, monthly recurring revenue, or ARR, annual recurring revenue, and they say it with a straight face, they are a clown. Now, next number is current clients in our pipeline. We have 20 prospective clients in our pipeline. And as I mentioned, demand isn't the issue with this business. We haven't been actively marketing StoryArc. We literally don't have a website, but people have just been finding out about us out of necessity. I have no interest in growing the current pipeline up from 20 right now because the bottleneck to our growth is creating a scalable system that allows us to service client 150 As well as we service client 1. And that system that we need to build out is a combination of more great people, specifically content strategists and ghostwriters, as well as a tech stack that supports all of the steps that we need to go through to work with a client. Next up is monthly cost. Monthly costs for the business are $45,000. This includes my CEO, employee number 1, who is a content strategist, and a few part-time ghostwriters who we pay a flat rate per month to put out a set number of short and long posts for clients. I will say monthly costs are higher than I would like right now, given that I think this should be a 60% gross margin business and right now it's around 35%. I'm not too worried because I do think gross margin will go up over time as our CEO salary gets amortized across more clients that we bring on. And I think naturally we'll be able to decrease our cost per client to $3,000 per client per month. Now, I know this is in the weeds, but I really wanted to give you all of the information that you could possibly look for about this business so you can really understand it and ask me questions about it. So that's StoryYard by the numbers. Now let's get into wins and losses. Biggest wins. First big win is we officially sent out an offer to employee number 1, and as of about 5 minutes ago, that offer was accepted. I got an email from Gusto, which is who we use for benefits. This employee is going to be a content strategist. I think they are going to crush it. And so I am really excited to fire myself from the role of content strategist. And making this hire has made me realize 2 things. First, it's made me realize that I truly love the early days of a business so incredibly much. This time where you have a small but super talented ragtag team working towards a shared vision, there's just nothing like it. It also made me realize that there is actually no better feeling in business than finding and hiring unrecognized talent that, you know, is going to leapfrog your business months to years into the future. Second big win is strong client feedback. Our holding company client who acquires businesses— that's their business, is to acquire businesses— they gained 1,000 followers month over month, which on its own isn't that important, but 60% of those new followers were in niche, meaning 60% of those 1,000 or 600 other followers were people that they wanted to follow them. So they were either people building out holding companies or people who are potentially looking to sell their businesses, and this client can look to buy them. Our real estate client is seeing a large increase in quality DMs on LinkedIn and Twitter, and they're seeing more leads as they become an authority within their specific vertical within real estate. And our B2B SaaS client is fired up about quality of ghostwriters' content in the first round of drafting that we've gone through with them. So those are client wins. And then the third big win is increased clarity around ideal customer profile. This is a big one for us, and I think it's a big one for really any entrepreneur. When you start a new business, you have an idea of who will benefit most from your product and stick around for a long time, but you don't actually know who your perfect customer is until you give them your product, they give you their money, And you see what happens. Now that we're a few months in, we have created a hyper-specific persona of the perfect StoryYard customer, and I suggest you do the exact same thing for your business, no matter what stage you're at. Our ideal persona is a B2B executive with high-value customers. So this could be a software exec, a real estate investor, a private equity investor, someone who owns several businesses, and it's someone who understands the long-term value of content. So they're not expecting short-term ROI. They're in it for the long haul. They know what specific business leads they want to generate long term. So said differently, they have tangible goals that are tied to their content. And finally, a nice to have is if this B2B exec who understands the long-term value of content and has specific goals in mind, if they have a repository of podcasts, blog, or video content from the past that we can pull from. So we have a ton of content on day one to turn into Twitter and LinkedIn content. And this is the level of specificity that you want to have around your client or customer persona, because it allows you to focus your time and more importantly, your marketing efforts in the early days of your business around your perfect customer. The 4th and final win is around opportunities for expansion. 2 clients this week expressed interest in expanding their scope with StoryArb. One wants other execs within their business to work with us. The other one wants to expand outside of social content in general into things like Podcasts, newsletters, events, etc. And while I think we have to be really careful about expanding what we're doing so early on, because I think we're way better off focusing on Twitter and LinkedIn for a while and doing that extremely well before doing anything else, I do think it's really validating to know that we have the ability to really become the media arm for our clients and their companies. We're going to take a quick break, but more from Founders Journal when we get back. Now let's talk about losses. First loss is client churn. One of our first clients of StoryArc churned this past week and it sucked. This client is an amazing founder. He's a great guy, but he wasn't the right fit for our business, largely because he didn't have a clear goal around what outcome he wanted from building his personal brand. Losing him helped to provide us more clarity around who our ideal client is, which I just described. But any time a client churns, it still stings. No matter what the circumstances are. Second loss is around how I'm spending my time. I think my best use to this business revolves around 3 things: driving new business, downloading my knowledge around content and audience into the business so it can be learned by others, and helping our CEO with company strategy. Because I've spent too much time in the weeds as a content strategist, because we haven't had an employee up until now, I haven't had enough time to work on these things, especially around downloading my brain in a way that will allow the business to scale because we have great employees and we have great processes. And finally, the third loss is a pivot in our tech stack. Up to this point, we've been using Asana as our project management tool. It is great for project management, but I personally think it sucks for content management, which is a really important part of this business given we're a content agency for executives. So we're likely going to be moving things to Notion. And I would say it's good we're making this decision in month 3 versus month 18 of the business. But there will for sure be a meaningful amount of time and money that will need to be spent making the transition. Last but not least, I want to talk about StoryYard priorities. Whether you are using a management structure like OKRs or EOS or not, and you kind of just loosely set your priorities, My rule of thumb is to have somewhere between 2 and 6 company goals that you hold yourself accountable to over a 1 to 3 month period, depending what stage of business you're at. There are 2 priorities that StoryYard is obsessively focused on over the next 3 months. First is crushing the onboarding of employee number one. I think our first hire can be an absolute superstar. I think they can not only better service clients than I can, I also think they can grow as a leader within this company. But it is our responsibility to give them the tools and support to get there. And it starts with killer onboarding. And as I say this, I'm thinking maybe I should do an upcoming Founders Journal episode on how you crush onboarding for new hires, whether you're a small business or a massive company. So over the coming weeks, I'm going to be spending a ton of time with our new hire so they can download my brain and seamlessly fire me from the role that I've been playing. The second priority is around process. Over the next 60 days, we want to have V1 of our sales process, our content process, and our tech stack done so we can ramp up our client base without degradation of quality. What is stopping us from bringing on 30 more clients isn't demand. It is having the right people and the right process that would make me wildly confident that client 40 will have as good of an experience as client number 1. And that's why establishing this process is such a high priority for the business. And that is it for the update on StoryArt. We talked about the numbers, we talked about the wins, we talked about the losses, and we talked about the priorities. I'm just having a ton of fun building this business. I'm learning a lot, and I really think we're building something pretty frickin awesome. I hope you've picked up some helpful lessons or ways of thinking from how I'm assessing the state of this business. And feel free to shoot me an email to alex@morningbrew.com with any questions you have, or if you want me to anonymously analyze your business. In an upcoming episode. Thanks for listening, and I'll catch you next episode.