Q&A: How to hire and incentivize a GM, raise millions from an email list & more! Ep. #026

A lot of times if you talk to a guy that's a tech, that's not used to sales, and you talk about commission based on growth, he's going to bristle thinking that you're asking him to go make cold calls or start knocking out doors. But a lot of times it's just like a spontaneous conversation with the homeowner and all he has to say is offhand, hey, do you know anyone else that needs pool cleaning? Oh, actually it's like very low pressure. But in his mind, in his mind that's not selling. Right. He just doesn't understand what selling is. Welcome back to the coroner office. I took four questions today from entrepreneurs Jake, Luis, Ashley and Connor. Jake owns a pool cleaning business and he also has a W2, so he's trying to hire a general manager to take over his duties, but he doesn't know how to incentivize them. So we talked about sales incentives and just keeping the business going incentives. And then I spoke with Blue about his company that helps consumers find assumable mortgages. An assumable mortgage being when you buy a property and you assume the existing, hopefully lower interest rate mortgage as opposed to getting your own mortgage. The third caller was Ashley and she actually had a pre submitted question about a real estate deal that she did that she was unhappy with. That was pretty short. And, and then our last caller, Connor, he has a million email addresses of people that have bought his children's books and he uses those email addresses to launch basically farmer's markets in hundreds of markets around the US to teach kids the value of entrepreneurship. It's a nonprofit and he wants to know, how can I find more corporate sponsors that will write a hundred thousand dollars checks as opposed to high net worth sponsors that are writing $20,000 checks. Kind of an interesting question and I hope you enjoy it. Let me know what you think, Jake. All right. You asked, in your experience, what have you found to be the best way to source and find stellar GMs operators? And two, correctly incentivize them, assuming no equity. So why don't you tell me like the business that you're in, the industry that you're in, and the specific problem that you're having around that question.

Yeah, the question I think derives more from my experience. Even in the corporate world, the W2 space is that I found a lack of direct incentives to go the extra mile. I'm starting businesses and whatnot and making the leap into entrepreneurship. I've got a pool cleaning company on the side here that's Doing pretty well. And as that grows, I'm looking to hire on staff and whatnot. And I want to take my dissatisfaction with the commonplace lack of incentive and implement that into my business and then future businesses that I start. And I think assuming not being part of the capital stack, I was just curious as to your experience, if there's one off incentives that you've placed or found that worked best to make sure that you and your GM or owner or a manager or whoever it may be are singing from the same sheet of music as they say.

Yeah, I like it. So let's talk more specifically. So you're asking about your pool cleaning business and are you thinking of hiring your first GM for that?

That's correct, yeah. I'm in Michigan, so it's a very seasonal business obviously and I'm starting to step away from a full time W2 and I've actually worked out a pretty creative solution to afford myself some more time, start to grow this more and then start to look to start other businesses in the fall and winter. But yes, to answer your question, you're correct. Yeah.

Why don't you tell me about what you already like, the idea you already have for this guy and do you have a person picked out yet or are you still too early on in the process?

Do not. And candidly, I'm still learning the business and foresee myself being the owner operator for the duration of the summer here. Really building up that client list, get a good foundation and then next year jumping off the launch pad, so to speak, and hiring out that work and bringing on some help.

So now what will the GM be doing if it's not cleaning pools directly or is that what he'll be doing?

So that's. It's a little bit of a crawl, walk around, if you will. So definitely going to start to clean pools because I've already got a decent client base builds up and I assume that to grow throughout the summer the GM will start cleaning tools, but as that list grows and then hiring out techs underneath, et cetera. That's the plan right now.

So when you say gm, you mean like a CEO sounds too formal because it's a small business, but he's going to be in charge of the whole thing and you're just like checking in operationally wise.

So like a coo, if that makes more sense. Still heavily involved being myself on the business side of things, being the CEO and then more or less hiring out the CEO, if you will.

Yeah. And would you just be growing the business and doing Marketing. Is that the type of stuff you Enjoy more?

Yes, 100%. I'm in the asset management space of a real estate family office right now, so that's more or less and what I really enjoy doing, but want to be doing it for myself.

Okay.

Yeah.

Do you plan to quit your job for this?

I'm already starting to. I've actually worked out a solution with them that I'll be paying back to part time indefinitely.

Nice.

And then so that provides some good cash flow in the interim and could pay rent and whatnot amongst ambiguity. But yes, to, to answer your question, I plan on making a a leap of faith here very shortly.

Okay, so let's talk hypotheticals. Let's say gun to your head, someone approaches you and you have to hire a GM tomorrow and you have to incentivize him. How do you structure it today? And then maybe I can help you work with that logic.

Yeah. So personally I think assuming not anywhere in the capital stack, I would implement some sort of a profit sharing plan with defined hurdles of X growth or X dollars, whatever it may be. And that's on a monthly basis, right? Or a weekly basis even. Because the last thing I want to do is have it evolve into the traditional year end review like how did you do and hope that I give you your bonus or whatever. I want them to take part in the success of the business on a day to day and not have to sit down and be like oh you did X, Y and Z. It's defined, you accomplished the goals that we had set out for you and you were compensated almost instantaneously for that. And so I think a profit sharing plan is probably what I would do right now. Be creative about that so they can take part in the success or immediate success of the company.

Would you want them to try to help grow the company as well?

Ideally sure. But for defining the scope of what I really want them to do is just drive operations, deliver on a day to day basis our mission and provide excellent customer service. And then I can take more of the role of outreach, growing marketing to your point, it's just that right now I don't have time to do. All said. But yeah, to answer your question, if.

You could choose, would you rather do like a flat salary plus commission or all or one of the other of the two.

I would rather than have to get in the game. And you are directly compensated for how hard and how you work and your success within the company.

So commission only specifically?

I. I guess ideally, yeah, but that's might not be the most attractive if you don't have true equity in, in the company. So it would probably be a hourly or a salary type ordeal with additional kicker on the top and it's just identifying what that kicker really looks like.

Yeah. Okay, so I, this is a great question. I have a lot of thoughts around incentives and commissions and flat salary. I've noticed that oftentimes there can be an inverse incentive, so to speak. If you are. Look, and I know you're not married to this, so don't misunderstand. If you were to seek out someone only for commission only, I feel like a lot of times that can attract people that you don't want. It's people that maybe don't have experience, they don't have anything better. Right. So it's ah, no one else will hire me. What do I have to lose here? Right.

Yes.

When that does work, I feel like that works best when it's. That's what the industry calls for. Let's say it's like life insurance and that's industry standard, is to be commission only. And maybe you're bringing a book of business over and you're sharing it 75, 25 and that's industry standard. And you just bring in a killer and you're saying to the killer, hey, instead of 60, 40, let's do 50, 50 because you're a killer and he's cool. It's commission only. But I know day one I'm going to be making 175 because I'm bringing over what I'm making 155 on today. Right?

Right.

In my experience for this type of work, what works best is a below market flat salary and a commission that will get them above market. So let's say I'm just going to make up numbers. Let's say you're doing $10,000 a month top line and you know what your margins are and you can afford to pay a 20% commission. So two grand a month and market salary for this is 70 grand. So you're going to pay him 50 grand and he's going to be, oh, he knows that on day one his commission is going to bring him to 74 grand or whatever it is. Right, right. And so he's like excited. And I would always tie growth into the commission even if you're planning on doing the growing because he's out there in the field, at least to start. I know he won't be forever, but he's going to develop skills that he'll be able to pass on. To his field techs as you guys grow. And that skill might just be saying hi to the neighbor as he pulls in and then developing an offhand conversation with a neighbor that might turn into another job. A lot of times, if you talk to a guy that's a tech, that's not used to sales, and you talk about commission based on growth, he's going to bristle thinking that you're asking him to go make cold calls or start knocking on doors. But a lot of times it's just like a spontaneous conversation with the homeowner. And all he has to say is offhand, hey, do you know any of anyone else that needs pool cleaning? Oh, actually, it's like, very low pressure. But in his mind, that's not selling. Right. He just doesn't understand what selling is. It's just, it's so effective to tie a tax commission to sales and growth. And because being out there in the branded shirt in the wrap truck, that's the person that's most likely to actually close a deal, more so than even you sitting in the office, just because he's out there doing it would tie it maybe two different commission tiers, one very conservative. And that's just for keeping going what you have, right?

Yeah.

And it's just like, all right, dude, we're doing 10 grand a month. I'm going to give you 20% of that, and that's going to get you to 74, which is a little bit above market. But here's the thing. That's only 20%. If you go get the neighbor, I'm going to give you a hundred percent of the first month or of the first three months, because at that point, your churn is like 4%, and that person's going to stay for years, so whatever. And so now, in his mind, if you tie the commission to, I'm going to give you 5% a month for every month that customer's in business, it's like, it's an extra 50 bucks a month. But if it's like, hey, I'm going to give you $400 every time you just mention offhand, do you know of anyone else? And they say, yes, that's 400 bucks, that might be what he's making every week right now. Right. And so it all comes down to framing it. And so you always want to find that balance between a structure that can protect you in case he just goes crazy and starts selling a ton and you find yourself broke, and a structure that's generous and simple because it's really Easy to be like, man, keep it simple. But simple can really screw you if he does nothing or does too much. Right. And it's also really easy to say, all right, here's what you got to do. You got to do earn out over time. It's got to tear down to a threshold that's good. You just have to find that. Yeah, yeah. Too much friction. You're asking the right question. Because most people aren't thinking of incentives at all. They're like, oh, market's 70k, I'm going to pay him 70k. Commissions are everything. All right, sorry. Incentives are everything. Charlie Munger always talks about it. If you're not thinking about incentives right now, even if you think about incentives all day, you're not thinking about it enough.

Yeah. And it's interesting. I guess it's just a forefront of my mind, especially as I start businesses and I start growing these businesses to where I might be disconnected from or very disconnected from the day to day operations. And to instill or be able to sleep at night that your brand is being represented well and they have reason to. To represent the brand well and whatnot, I think is the utmost precedence, to be honest with you. And I know I'm not the only one who thinks about why am I not getting paid extra for working on the weekend or etc, whatever. You may have it in the W2 space especially. But yeah. So have you had, I guess as a follow up or the first part of the question, it's very broad stroke, but the, the sourcing and finding of stellar guys or girls that you found or outlets or the vetting process as a whole.

I don't.

Just any experience of finding the studs out there.

Yeah. Honestly, the most luck we've had in finding this type of position has been indeed like it's very, it's like right in front of your face. I'm not telling you anything you don't already know, but paying for indeed. There's the free version and the paid version. Allocating four to five hundred bucks to applications and then just making it a numbers game going to. You're going to come across good guys. Also, I would just drive around your area and when you see any sort of a crew, like a tree crew or lawn or whatever, I would just pull over and talk to him like, hey man, like what do you guys. Oh, okay. And just fake like you're just a curious but very friendly homeowner and then start like how long have you been working this job? Okay. Oh, seven years. Okay. Seven years means he's probably really good at this. Okay. And just like those unscalable things, and you already said this yourself, are often lead to the best people, right?

For sure, yeah.

But otherwise indeed works great. So.

Yeah.

Cool.

Can't thank you, Larry. I can't thank you enough for, for having me on here and responding to a hell of a cold DM there. But no, you're, you're a rock star and you're inspiring a lot of people out there, including myself.

Thank you.

Can't thank you enough. And I appreciate your time today.

Day.

Yeah, thank you, Jake. Have a good day.

You as well. Take care.

See you, Lou. So you have a platform that enables people to find assumable mortgages. And from what I understand, an assumable mortgage is when you buy a property and you just assume that existing mortgage, which today the big benefit of that is not having to pay 7 to 9% interest rates you can hopefully capture. There's 3 to 5% interest rate, is that right?

Yeah. We've actually been struck by how low some of the interest rates are. We have a home in Nashville that we have loan on. That one's like 2.25. And it's something, it's some crazy number. It's something like 70% are under 4% interest rate. So you're talking about potentially up to $1,000 or more savings on a per month basis and then over the life of the loan, hundreds of thousands certainly.

Okay, so where is your business at right now? Are you guys pre revenue, post revenue? Where are you in your journey?

We have generated a pretty remarkable amount of leads, probably pushed 30,000 leads to our real estate partners. And they're the ones making those referrals to the local real estate folks to actually help those people. The thing about consumable mortgages is a little different from a typical transaction. You go through many of the same, like underwriting processes, just servicers who are actually like collecting funds every month on those mortgages. They don't move very quick. And this week announced that servicers could charge up to eighteen hundred dollars per transaction. And from the folks that we've been talk to across servicers, they're all trending downwards. And so most of them around maybe 60 days now, getting back, getting down towards 45 and even faster now.

What is 60 days exactly?

That's like basically from the time that the person engages with the servicer to get the loan moved over from the seller to the buyer's name.

Okay, so first tell me how your platform works. When you say you drove leads to your real estate partners and all that. Like how does it work?

Yeah, we have the right now the only nationwide platform where folks can go into whatever their local area is. They click on a property, they find one they like that makes sense for their financial situation. They click assume this home at that point.

And we've got real quick, are these properties for sale?

Go ahead.

Are they for sale or are they just homes that exist that have an.

Assumable mortgage, tons that are listed for sale. And so they click on that, we have it all zapped up in the back end and they get reached out to from our folks who get the particular situation, collate that with the information that we've already collected from them as far as like down payment, you know, that they're capable of providing. And then that gets pushed off to an agent in their local area that we've already had a conversation with. We've already provided them resources and details about how these transactions are supposed to go. And then. Yeah, and then they run with it.

Okay, so if I'm a consumer and I want to buy a home with an assumable mortgage, I'm going to go to your website and I'm going to search in my area, I'm going to see one and I've got it pulled up now so I can say, oh, that's a nice house. Oh, 5.4%. Okay, nice. You click on it and you purposely can't see really the details of the house yet.

Right.

This is like a totally bootstrap thing. Me and my buddy, it's like late last summer we started like thinking about this and working on it. And the thing is like getting at this data is like very cool. It's not impossible. You can do it like local real estate agents, but it's time consuming. Take you a couple of minutes to look up each property rather than being able to see like a full view.

I assume that was for a reason. I'm not criticizing that strategy. I'm just trying to fully understand how it works because I have it pulled up now as if I'm a consumer. So you click assume this home. And that is basically a consumer telling you that they want to learn more about the home. And then they're led to a type form, right. And they put in their info and I'm doing this now. So you're going to see a lead from me. Just trying to see how it works. I'm a buyer. Do we have a real estate agent? So if the answer is yes, what does that do Are you generating revenue by just referring leads to real estate agent for a percentage of their commission?

It is the case that like certain people have come in and they're like, I already have an agent. And we're like, okay, yeah, sure, no problem. Hey, if at any point once you guys are under contract on that particular home, go ahead and give us a call. There's also a page on our website if you want to do like the assumption management right up there on the services tab.

Okay, so if I don't have an agent, then you're sending that to an agent. And what if I do have an agent?

If you do have an agent, like that's fine or whatever. At that point, if it's not an agent that we previously worked with, we're like, hey, if you guys have any questions, we're. The whole point of we started this making money was like a secondary consideration. We were like, let's make this information like let's get this information out there. Information wants to be free and but if you already have one, we're like okay, great. At that point, now the particulars that property and you have the information to go to that seller and say, hey, I noticed that this mortgage is assumable, I'd love to do that. And then if you guys found value from their website or whatever, then they could come back, engage us for the assumption and then we also get paid on that.

Okay. Okay. So back to the data fidelity thing. Tell me if this is wrong. The reason that I can't see the info when I click assume this home is because you've got to go fetch that info, right? Yeah.

It's about having the data provider that can actually give you all that information and you make trade offs in terms of do you want to spend? I don't know if you've looked at like buying data from like a CoreLogic or something like that, but it's, it gets like very expensive very quickly.

Yeah. Okay. So once a consumer submits a lead, you get going on the back end. Do you get going at reaching out to the consumer or to a realtor in that area first?

Yes.

So they make, they make contact with the, with the consumer, confirm all the details and then they make a warm handoff to that agent who's going to be downstream.

Okay. Okay. Have you thought about shortening the cycle of generating or of getting that lead within Typeform of just like getting their first name and phone or first name email and phone?

Yeah, we've tried a few different things. My co founder is a marketer by trade. And he's always testing these different things. We're thinking about, like, downstream ways that we can, like, help agents become a little bit more informed so that it's so that they can manage expectations for their buyers and their sellers more appropriately and serve them in a better way to make the transaction more likely to be successful.

Okay, so can you explain that in a more simple way? Your bottleneck specifically is getting the transactions.

Done, because assumables haven't been a thing since basically, like, the 80s.

Yeah.

And everyone who has done them has more or less aged out. Like, they. They get processed from time to time. I think, like, the numbers for the last two years were something like 3,000 or 3,600, something like that. They're not big numbers in the past because it just hasn't been something that has been something that's super valuable to do. And now that it is. And both on the buy and the sell side. Right. Like, the buyer is going to be able to afford more home because the payment's not going to be crushing them. And then the seller, depending on how you think about it, with rates having risen as much as they have, like, prices on homes should be down significantly more than they are. But, like, you have all these supply constraints. Right. And so sellers don't want to give up on getting the number that they see on their zestimate.

Yeah.

And so the assumables are a way to get it done, but it's, like, slightly more complicated, and people just aren't super comfortable advising our clients on it. And so that's the big thing. I think that we've been running into.

Kind of education to the realtors so they can educate their clients in an accurate way about how it works, 100%. Do you have any stories of how this is illustrated perfectly? Like, all right, we have this one client. We. We had a realtor, and it just fell apart because of X, Y and Z.

All the agents that we've gotten feedback from, they're like, awesome lead quality. Because we have that little bit longer lead form. We collect that information, like, down payment. The thing that we're hearing back from agents is how quickly these transactions can happen. So they're like, this is going to take six months. It's like 60 days.

So there's a dichotomy. The realtors are like, wow, this is a great lead. Thank you so much. But also, I don't know what to do with this. And I. Is this a scam? Like, they don't even know enough about assumables. To really sell it to their client.

We provided them with a lot of material. We have lending partners who are going to be able to lend in that second position to make that down payment not so big. The problem that we're running into is that these listing agents, like, just don't get it yet and they frankly don't realize like what an asset they're sitting on. From like a listing perspective, like it's a total differentiator and it makes it stand out. We're running up against right now. It's trying to help listing agents understand that.

Okay, so the buyer's agents are fine, they're on board with it, but they're trying to convince the listing agent that what they have is different and unique and so they should basically consider their offer more than a competing offer.

Sure. Yeah.

Okay. Now how long have you been at this? Like how old is the oldest good lead that you've received and what happened to those?

So we, yeah, so we, we launched the platform February 5th. We've had a handful of, of these leads like actually go through like conventional transactions and we're still fighting to get that same kind of uptake. On the assumable side, did you not.

Get paid on the conventional transactions?

It's so it's a master listing agreement that our real estate partners sign with it. So it's basically however or master referral agreement. So however that transaction gets done, our real estate partners get paid on it and then we would get paid as well.

But have you gotten paid on a completed transaction even if it wasn't assumable?

Yeah. Yeah.

Okay, so what you're seeing is because of this friction and confusion between the listing agent and the, the buyer's agent, a lot of these are either just falling off or they're just closing a traditional mortgage and not using your platform. Right.

Yeah. Right.

That's.

Yeah.

Does it make a difference to you if they get a traditional mortgage as far as revenue is concerned?

No. Once at some point. Right. If they once like the lending product is fully baked in, we'll be able to get like points on that or referrals from that. And if they go out and get like brand new lending, then that's a conversation to have too.

How much revenue are you receiving on average for deals that you've closed?

It's like in the like single digit thousands. Yeah, Low single digit thousands. So it's predicated Right.

On percentage of their commission.

Yeah. Right.

Okay, let me ask you this. Does it matter, does it matter that they're getting traditional Mortgages and that there's this friction in the education process. Or is this kind of an ethical bait and switch where people come to your website wanting an assumable mortgage, you match them with a realtor, they're wanting an assumable mortgage and because of some idiot listing agent they're not able to get that assumable mortgage by no fault of yours, but they still get a mortgage and you still get paid. Is that too simplistic like that?

Certainly could be the case. The whole reason we started this was to try to help people.

Have you made like a 60 second video explaining how it works? Like just very simply, have you ever done that?

Yeah, we have. Yeah. And I answer all of the emails that come through. We get agents reaching out to us, we get consumers reaching out to us, folks who want to partner with us on this or that portion of the business.

That's why I suggested a video. Right. Like I feel like if you were to make a very TikTok style short, like a literal short that's not really you, you could post it, but that's not the purpose. The purpose is to ask the, the agent that you're referring to to send it to the listing agent like right away and some sort of a call to action and then some sort of an automated zapier follow up where you're asking the agent incessantly, hey, did you send the video? Did you send the video? And maybe a tracking system where you can make sure that the video is watched. Right. I look at this like I look at my mining syndicate where we sell bitcoin miners. Our biggest competition is education and convincing people that we're not a scam. And the only way that we've been over able to overcome that is very unscalable. And that's hopping, like giving physical tours which is not relevant for you, and hopping on zooms with people. And then once we do that, the close rate is 80% and we can get like 90% of the way to that 80% if we just do a webinar. And that's in, in a way that's even more social proof because they see other people in the webinar and their strength in numbers. And so depending on your lead volume you could even do this. Have you ever heard of webinars that are. They're not live like they appear live, but they're not.

Yeah, just asynchronous.

Yeah, like an async webinar. You can have a daily one that these realtors join at any given time and they can see like a live count of everyone who's ever been in it asking questions and whatnot. Maybe even have someone on the back end answering those in real time. And I just, I feel like you need to give them a packet with different multimedia formats, right? Like from least to most friction and also from least tactical to most tactical. And so it's like back to my Mining Syndicate example. We recently had this huge conversion of platforms and it was a big deal. And I a b tested the emails that we sent out and one email explained everything we were doing in detail and the other one just said three sentence like we're switching platforms. Let us know if you have any questions. Here's a blog post. And the blog post was basically a copy paste of that long email. And 90% of people just, they weren't ever going to read the blog post. They didn't want to, they didn't care. They just wanted to know the tldr of it. And so I, I would just have a welcome packet with 30 second video first and then maybe a 3 minute video second with even more detail and then maybe like a link to the webinar and then maybe a link to the FAQs and just set up a ton of zapier automations to the listing agent or to the buyer's agents where you're just pestering them to death. Hey, did you send it? Did you send it? Or just get the buyer's agent info and you just send it directly to them. I know this sounds like a scam, but it was really popular in the 70s, but we have had low rates for a long time, so it doesn't make sense, but now it actually does make sense. A lot of people don't think it's possible, but it is possible. It's actually life changing. You could save a thousand dollars a month, go through all that and they just push that packet on them to no end with like tracking all over that. So then you can start to see, all right, everyone's clicking on the fourth option. Even though we thought they'd all click on the video. Let's put the fourth option to the top. It reminds me of Link tree where I have a link tree on Twitter and I'm like, all right, I want everyone to go to my personal website first and then I'll put co founders.com fifth and then after a month I can see, man, Even though co founders.com is fifth, they're all clicking on that. So I'm just gonna make it easier for them. I'm Gonna put that first. Right. So you're just. You're throwing a lot at them and then letting the data speak for itself and adjusting accordingly. It's hard to give advice of like how you can educate someone. That's two degrees of separation away from you. All I can do is relate to my own experiences and companies like Uber and Airbnb. That sounded like a scam at first and the only way Airbnb really fixed that is just by time and letting it become more acceptable and removing friction and just doing the type of stuff that we're talking about now. That makes sense.

Gotcha. Yeah, no, it's an, it's. It's an interesting. Yeah, that's an interesting take we hadn't considered.

Okay, I hope it's helpful. It seems like you're doing something awesome. So I, I'd love to hear a follow up of how it goes.

Yeah, for sure. I would love to come back on six months since and have closed a lot more transactions for folks.

Yeah, I would love that as well. All right, man.

All right, brother man. Cheers. Thanks. Appreciate it.

Thanks for calling. See you. Here is a question from Ashley. I sold an investment property, one unit in a 20 unit complex, to a developer through an 18 month long sales process where all owners had to agree to sell to the developer. That sounds like a nightmare. I was initially very happy with the price. I got doubled my money in five years until I found out the prices that others received. I was not the lowest, but the Highest prices were 250k more. This is a substantial percentage difference as all prices were under 1 million. I know that comparison is a thief of joy. I hate that quote, by the way. And I should move on and learn from this experience, but I'm struggling to get past it. The question is how to emotionally move past this. I understand all the logical reasons. I can't change the past, still made a good profit, I can learn to negotiate better, et cetera. But it's getting past the missed opportunity mindset. How would you handle this situation, Ashley? I feel for you. I've been there. I have seemingly, I'm quoting right now, wasted months and years of my life at opportunities that didn't pan out. I've been there. And it's especially maddening, like you would be happier today had you not learned that fact. You can't change it, but you would be happier. Right? That's why you're writing in. I would suggest you develop a chip on your shoulder and I don't know how to tell you to move past it other than make that fuel you to at least make up for that amount of money that you feel that you missed out on with a future real estate deal. Right. That's the tuition that you paid to learn more about negotiating with developers and or with other tenants. For me, when I had something terrible like this happen, the only thing that fixed it was finding more success. Success is the best revenge. Right. And then it ended up being I became more successful than the person that had wronged me. And then it really became easy. Had that never happened, being real with you right now, I'd still be struggling, I'd still be angry. I wish I could just tell you that I just forced my way through it and I moved past it and moved on, but I didn't. So I think you just need to put your head down and focus on making a lot of money at whatever brings you a lot of joy and attach that success to this moment in your life where you felt wrong. I say this every now and then, but everyone is insecure, right? I'm insecure. Steve Jobs is insecure. Everyone's insecure about something. The difference is do you know what you're insecure about? Do you have the self awareness of what is making you angry or what is making you feel uncomfortable or. Or not confident?

Right.

If you have the self awareness about your insecurities or about the chips on your shoulders, then you will be significantly more successful and more happy in the long run. So you clearly do have some level of self awareness. Because you're asking me, I just suggest that you just keep crushing it and keep trying to make money and buy real estate and start businesses. And it will come, but it can take time. Connor B. Hello, sir. All right, let me go ahead and pull up your question. You asked how can we attract major corporate sponsors 100k plus for our national youth entrepreneurship program? Yes. I remember looking at your website and I was very impressed with it. And so I would like to hear about your business and then about your question.

Sounds good. So this is called the Children's Entrepreneur Market. It is a series of Saturday morning largely activities. Think of these like lemonade stands on steroids or like a farmer's market where it's run entirely by the kids so mom and dad can help set up and take down the booth. But the kids run the whole show. And so not only are we giving kids an opportunity to learn about marketing and money and customer service and how to pitch and how to close and all that, we're really empowering them through the profit motive. To get them excited about earning money. But use that as a way to teach about the principles of free enterprise and get them to become future little entrepreneurs and capitalists. The schools aren't doing this. Parents will sometimes do a short little lemonade stand, but 90% of the time, the kids just sit there waiting for cars to stop. So at our market events, we do a lot of advertising, bring out a lot of foot traffic, so that these kids are not only selling a lot, but more importantly, they're learning a lot through the interactions. So we're scaling it Nationally, we're in 26 states. We'll be fully national within the next two years. And so to sustain this, it's a nonprofit, but to sustain this for the future, we really want to develop a range of corporate sponsorships to get a lot of, we think as a national brand and as a way to give back and support these community events, it could be a good strategy.

I love it. First of all, thank you for explaining that so succinctly. That's greatly appreciated. I think everyone listening and that will be listening is able to understand immediately what you do. So you basically organize farmers markets around the country and soon around the globe for kids to sell their stuff, to teach them capitalism, entrepreneurship. Are you able to speak about your, like, your numbers, your revenue numbers? I know you're a non profit, but I'd like to dig into how you make money.

Yes.

This has been what I call a philanthropic kickstart model. So we go out to donors and we get them to help us launch in Austin, Texas or Orlando, Florida or wherever it is. And with that capital, we hire someone locally in that metro area who is our market manager to launch all these events. We start setting up events and then we attract people. We have booth fees that are $20 a pop just so the kids have a little skin in the game. And so we develop a little bit of revenue that way. We sell T shirts for the kids that say I'm an entrepreneur and have some corporate logos on for our sponsors, like a 5K type of thing. So we have those two revenue streams, which are minor. Those aren't going to generate enough sufficient to defray all the costs that go into operating this program. And so the philanthropy at the beginning is 100%, but the idea is to taper it down to no more than 20 or 30% of the overall budget, both through the booth fees and the shirt sales, but then largely through the corporate sponsorships, where we're going to be able to, I think, generate far more revenue than we're getting from the booth fees and the shirts.

Okay, so I'm going to pick a random city, and I want you to talk me through what launching in that city would look like. So are you in Sioux Falls?

We're not yet.

All right, so you want to go to Sioux Falls, and what does that look like? What do you do? Who do you call, how much money do you ask for, and what usually happens?

We are focused on launching in the top 200 metro areas around the country. And so within any given metropolitan area, we'll launch a bunch of markets each year, 10 to 20 or more. And we'll first go to donors in that community and say, hey, help us bring this to your city and try and find that philanthropic support. Once we find some seed capital, we have a network. I write a series of books called the Tuttle Twins. So these are books that help their help kids learn about the ideas of freedom. And we have a large national network, a million families. So we'll go to somewhere like Sioux Falls and we'll create a segment in our email list and say, hey, guys, we're launching this project in your city. Would you like to be a part of it? And from that network of people who already know us, love us, trust us, we're able to find our market manager, people who are really excited by the opportunity to work with our organization. So we'll hire the market manager. He or she, largely she will begin developing relationships with the cities and the community organizations. The key for us for growth is to launch our markets not just on a random in a park or on a sidewalk, but we attach our events with large, let's say city festivals and rodeos and other big events where there's already 5, 10, 15,000 people coming. And so we can piggyback on those events, generate a ton of foot traffic. And so our market manager builds those relationships and plans all those markets, and then actually on the day of is there to just administer the whole thing and operate the whole program. All of them across the country are supported by a very small national team, including our corporate sponsorship sales guy that we just hired, who's our fundraiser out to try and attract some of the support to sustainability, the broader national program.

So how much money would you be looking for in. In Sioux Falls?

So in each, in the metro area itself, it's typically around a hundred thousand a year for each metro area that we operate in.

Okay, and that's to support 10 to 15 events?

That's correct.

Okay, how are you finding donors to. To raise that money? From just through your email list.

A lot of our locations that we launch in are aspirational and not already covered. What I mean by that is we'll have someone who donates in our national program without regard to a particular location. We'll use that capital to go into strategic places in Austin. There's a lot of freedom minded capitalists or LA or Palm Beach. And so we'll launch in some of these places just to give us a little bit of toehold so that we can then go in and start talking to some potential donors in that area. But a lot of this is with our Tuttle Twins books. It's a well known brand. People around the country know it. And so that's allowed us to open up conversations with donors in all these different places. And what I like most about this project is the hyperlocality of it. The fact that I can go to someone in Boston and say, help us bring this to your kids or grandkids in your backyard. They will specifically benefit from it. It makes it a little bit easier to solicit donations as opposed to this.

Broad, generic, more personal aspect to it.

Exactly.

Okay, and how much does an average donor contribute?

I'd say the average donor is probably around 20 grand. A lot of our donors are entrepreneurs and business owners who can write larger check. And so we get some that skew very large. And a lot of people donate 10, 20, 50. But what we're really after are the people who can drive enough revenue our way to allow us to launch this without us having to spend a lot of time chasing small checks.

Yeah. What is the biggest check you've ever gotten and how did that come?

A million dollars. And that came organically. Someone saw one of our Tuttle Twins ads and reached out to a friend to say, hey, do you know what this is? And he said, yeah, I know, Connor actually, and introduced us. And so we built a relationship and over time they became our biggest donor.

How much effort do you put into asking for more money from your current donors versus finding new donors?

A lot. Yeah, we're scaling up our fundraising team right now. And that's a big part of it is to ask people to grow with us. But the same amount of energy we can put into someone who, let's say, donated 50 grand. And to get them to go to save 75 or 100. Some of that, that energy, if we apply it to finding new donors, can often yield much larger gifts if we spend our time focused on the very high net worth. Business owners who get really excited about Entrepreneurship and capitalism. And they see that the schools aren't doing a good job with this at all and they want to help stem the tide and push back on that degrading culture. So a lot of our time is really focused on meeting and cultivating relationships with these very high net worth individuals who are aligned with our values.

Have you ever taken the time to scrape like a public database of donors, whether political donors or otherwise?

We've done that years ago with political donors. A lot of nonprofits struggle with that just because political donors end up being somewhat of a different animal than let's say, policy donors, people who are trying to affect long term change. So where we've struggled and other organizations like us in the past is that political donors tend to be very fear based and very reactive. Hey, donate $50 today to make sure the other guy loses. As opposed to this aspirational, visionary type of approach. So the short answer is yes, but very mixed and often poor results.

I guess. I didn't mean like specifically scraping political a list of political donors, but rather finding organizations or databases where this type of donor is made public. Right. Like I'm thinking like a children's museum that has a, a page on their website dedicated to all of their donors. Right. Having a VA go in and scrape all those. Maybe it's just first and last name, maybe it's just the Jones family and taking that database and trying to append the data with address, email, phone number. Have you ever tried that?

So we've done that only for corporate sponsorship. So we'll go to, let's say an organization like Junior Achievement or something like that. And, and they'll list who their major corporate sponsors are so that, that gives us a signal as to, hey, here's a business that at least in one case supports youth learning, financial literacy and learning about this. And so that's how we developed our first kind of base list of what type of corporations that we're going to try and go after and approach. I haven't really done it for the individual donors in our experience. A lot of nonprofits keep that confidential and there's just not a lot of data out there that you can get. For example, our own nonprofit, we don't disclose our donors and so no one would be able to obtain that data. And so oftentimes you'll, it's. It's either corporations or foundations which are required to be public in their disclosure about donating. And so those are both ways that we've been able to try and cultivate those lists and Go after new people.

Okay, let me ask a totally different type of question. Do you have any data on how much revenue flows through an average market through the kids?

So the average kid earns, I think it's around $150 right now in a three hour market. And so typically we get 60 to 100 kids depending. And so whatever that, that math is 10, 9 grand.

10 grand?

Yeah, 10 grand.

Okay. And then how many markets per year?

We are in the process of scaling right now, just started last year. This year we will do about 340 markets around the the country and within five years that'll be up to 2,000. But right now it's 340 markets. So that's 3.4 million if we're saying about 10 grand per market.

And then realistically, how much do you think you'll raise this year? Not like what your goal is, but what do you think you'll end up raising?

Does this include corporate sponsorships or just from the philanthropic donors directly?

Including everything.

Everything all together, probably I'd say million and a half if I just had to think off top of my head.

Okay, and so you're the original reason that you wrote in was you're trying to find more 100k sponsors, right? Because you're chasing $20,000 checks and you think 100k it would just be more efficient. Right.

Very specifically the question is to attract the corporate sponsors. We have a good strategy with the individual donors, the foundations. We've got a good thing going there. What's new for us is trying to package this in a way that's very interesting to the corporate givers who are giving to the junior achievements and others as well, trying to find the right way to, to present what we're doing in a way that would be attractive to corporate corporations.

Specifically, what is the title of someone at a corporation that might be the decision maker for something like this?

A lot of times it's the kind of the marketing team. A lot of organizations have corporate social responsibility type of person. I think, I think my team has created that list of job titles. So I'm shooting from the hip. But community outreach is another one. I know we often see some companies will have a community outreach team or at least one person on it. So those are some of the top of mind ones.

And how, what type of outreach have you done to these job titles so far?

For now it's just been, we're in early stages for this, so it's just been a lot of LinkedIn outreach and creating DM workflows and trying to use Hunter IO to find email address patterns and then reach out to them and just build a sequence where we're then following up and trying to cultivate them.

And has that been fruitful at all?

Like I said, early stages. We've got some good conversations going, but not specifically any major corporate gifts yet.

Okay. And earlier you mentioned you had a million people. Is that. Is that a million email addresses or what does that data look like?

Those are email addresses. So nationwide, about a million and spread across the country. So these are people who've bought our Tuttle Twins books or engaged with our content in exchange for an email address. And mostly it's the moms getting this stuff on behalf of their kids. So it's basically a million unique households is how we see it.

And how often are you emailing everyone on that list?

Oh, twice a week.

Okay. What are your open and click rates?

Open rates are like 55%, and click rates, I think, are pretty low because primarily when we're emailing people twice a week, it's more newsletter, not boring corporate newsletter content, but it's talking about current events and just keeping a strong relationship for when we do have a big sale of our books or something more specifically like that. So just creating a lot of content and value in the relationship and informing them. So not every email is designed to get people to click. Gotcha. So I think it's like, I don't know, 2 to 4% somewhere around there for the click rate.

And of all the emails you send, let's say you send 100 a year, what percentage of those are talking about fundraising or asking for fundraising, or talking about your markets versus talking about your books?

So 95% of the emails are talking about the books. And the ideas in the books, we only occasionally sprinkle in any fundraising appeals directly to this audience.

Okay, so very rarely do you talk about fundraising now. Do you ever talk about markets that you're hosting but not fundraising to the list?

So we'll send targeted emails. Yeah, so we won't blast the whole list, but we'll when we're ready to launch in Sioux Falls. Right. We'd have that segment, and then we'd go back out to them and say, hey, guys, we're ready to launch. Here's how you can sign up your kids. Here's how you can support what we're doing. So, yeah, we'll do the kind of segmented emails to the particular people in.

That region and what software are using for email.

Klaviyo nice.

I love it. How granularly are you segmenting based off of zip code?

Okay, so we'll do like within 30, 40 miles of the core location that we're focused on. And so whoever falls in that area.

And then do you have, how much data do you have on each email address?

We haven't done any kind of external appending and any other data services like that beyond what they've given us. And so typically it's hey, here's my shipping address for the books. And so then we get their mailing address, their phone number, their email, and that's basically it. We do ask at checkout, like the ages of their kids as an optional question just so we can segment on that. But typically it's just their location information.

Okay, so I love Klaviyo. I love email marketing. I love that you love it. It seems a million emails is a ton of. I don't even want to know what your klaviyo bill is. What is your klaviyo bill? I have to know.

I don't know, but I don't look. I looked like last year and it was a lot of money.

Oh yeah, Yeah. I pay thousands and my list isn't anywhere near that big. I would segment your data even more. I would try to append it. I would also put your emails in a spreadsheet and separate out the domains. So basically cull out all of the Yahoos and the Gmails and find all the corporate domains and try to find which emails is a work email. And then I would take those far away from Klaviyo and use something like Lemlist or GMass to send hundreds of emails, not millions, hundreds at a time from like an email address. Like maybe your personal email email address using something like GMass where you can plug in their first name. You can plug in as much personalized data as you want and say, Carla, I see that you work for Coca Cola, the Tuttle twins. You're on our email list. I'm just very curious. This is what we do. We raise money for this program. This program changes lives. Do you know anyone at Coca Cola or know anyone that might know someone that I could talk to about corporate sponsorship? I would start with that and start the referral ball going from people that are already seeing your emails in their inbox. What do you think about that?

Yeah, I like that idea. Prompts a question in terms of data appending. Do you have any particular companies or services that you like or recommend that do that? We haven't done that yet.

I just did this like a month ago. Oh, man. Let me see if it's. It like pops up in my browser.

Put you on the spot.

I know. I just remember the website was green. That's not helping you at all. But I can picture the website. I will say that the prices are all over the map on that and I was able to find one that was reasonable and cheap. If I find it, I will put it in the show notes and I will email it to you as well. It's. There's probably an email in my inbox, but I remember it was like 70 to 80% cheaper. This is what I did. I found four and I uploaded the same list to all of them. And the one that was like 70% cheaper was just as good, if not better than the others. So let me see if I can find it and I'll send it to you. But if I don't find it, just keep looking until you find one that's drastically cheaper. And test it again. Yeah, in green. And test the same list against a few of them to see which one works best.

I like it.

Yeah. Because those services are really good. It'll tell you the LinkedIn URL of their profile. I just feel like with a million people you have such an advantage and you can even take that list. Do you do any paid ads? Facebook or Google?

Oh, yeah, yeah, Quite a bit.

Have you done lookalike audiences based on that list? Have you done ads for corporate sponsors at all?

Not for corporate sponsorships, we haven't, no. Our ads are all centered around getting people to buy our books. So we haven't done ads for the corporate.

I would try that on LinkedIn specifically upload your email list to LinkedIn and make a lookalike audience. I don't think it's called lookalike on LinkedIn but make the equivalent of a lookalike audience on LinkedIn for people with that job title. I would try paid ads for corporate sponsorships for people. You don't even need to make it look like audience. Just upload the million people and make an actual audience out of that and send the. Or push the paid ads towards them at the same time that you're sending these emails. So hopefully some people can see both around the same time frame.

It's a great idea. Fun, fun idea that I'll get working on. I like it. I appreciate it.

Absolutely. Let me know if it actually works. Works for you. And if it doesn't, let's chat some more ideas.

Awesome. Okay. Appreciate it, Chris.

Thank you, Connor.

Thanks.

See you.

Bye.

All right, we're done. Hope you like that. Four very different questions, please. Like and subscribe and we will see you next time.