Exposing Secrets From a Founder's Retreat

We're going to start off with this retreat that I just did. It was a founder's retreat. Was just in Phoenix, Arizona with a bunch of people and some mutual friends. Neil knows some of these people as well. It's a group of about 8 of us. We had people like ConvertKit founder Nathan Barry showed up. This guy Al Doan, he has like a $100 million quilting company.

A quilting company?

Quilting company.

Quilting, like a quilt on a bed?

Yeah, yeah, yeah.

Like the old school, you know, that they used to sell like my grandma.

Yeah, yeah, yeah. Quilting. You had Syed was there. Our buddy Yaniv was there. Eric Rivera. This other guy Walter, who you don't know. Everyone's there.

Patrick.

Patrick Campbell was there. Yes, yes, yes.

Patrick's cool.

And yeah, there's just a lot of things that that we did. And we've been doing this retreat for 2018 or so. There's like a core group of us, and then we'll you know continually rotate people in and out. But each year we do it. We do it once. Last year we did Turkey. This year we did Phoenix, Arizona because one of the members of the group. had some health complications, we'll just put it that way. So, we just wanted to make it easy for them. But yeah, that's what it was and we basically did it from Wednesday till Sunday. So, that was the retreat. But nobody has to pay, like it's not a business. Everybody just pays cost and then we're just hanging out with each other the whole time.

That's cool. So, what did you guys discuss? Or how about let's start off with this. What were the main Learnings? Because everyone has decent-sized businesses in this group. I know you didn't share everyone's revenue numbers, but some of them I know, and some of them are much larger than the quilting company even. So what were some of the big lessons that people shared?

One lesson I'll share, I'll share some of the things because we each had a presentation. So let's say you have a business problem, like you get to bring one business problem to the table. One of the problems I brought up actually carried over into our mutual friend who does a couple hundred million a year. And the key takeaway is this. So you know how you and I have agencies, right?

Yes.

And You'll probably agree with this, but our websites are optimized to take orders. So like, let's say for every 100 people, maybe 20 of them are ready to buy now. Our sites are optimized for the buy now, right? And 20% of people will never buy from you. And then you have the middle 60%. And Patrick actually brought this up. It's like the actual— it's actually the middle 60% that matters. And I don't know about you, but I'll say for me, I'm really good at top of the funnel marketing and bottom of the funnel. I suck at middle of the funnel and I suck at getting responses, right? He's like, dude, that's where we made all our money in terms of generating conversations. And so of course, As an example, when you go to like ProfitWell, which is his company, he had a bunch of gated downloads. Like you'd have to download something to get like an ebook or whatever. His whole thing is like, hey, Neil, I noticed that you downloaded this. What do you actually need help with? Right? So, these are automated just basically setups for conversations and then their BDRs are just trying to set up meetings that way. And that's how they book the vast majority or a big chunk of their meetings. And that's something we don't do nearly as well as we could. Because if you think about it, with the traffic that we drive, the leads that we're getting, it's like we should be getting a lot more.

Arguably, I would argue the same thing for you too.

Wait.

So they're doing a lead to auto call or auto scheduled?

Lead to— so it's a lead to auto message. And then the BDR, their job is to nurture the conversation because a lot of people aren't ready to buy. So they're really good at keeping, like nurturing the conversation over long periods of time to get them ready to buy.

How do you do it on your end?

Well, we just started doing it like this week.

No, no, but what'd you do? You get a lead on your website.

So we're only targeting the people that are like highly qualified budget and everything. And people that are like ready to buy right now, right? We're taking orders. And that's what Patrick said. He's like, dude, you guys are just glorified order takers. And it's like, that's not where the magic is.

So what's funny is when a lead comes in, we do analysis of the lead. And depending on if it's qualified, we'll actually give them an opportunity to schedule a call right then and there.

Yeah, you check their budgets and you're looking at all— or are you enriching the lead with—

We're enriching the lead. We don't just do it based on the budget.

Yeah.

So that right there allows it to be where we're able to get more show-ups. Then we take the rest of the leads that aren't as qualified, because just if you enrich them, it doesn't mean the lead's not qualified. Sometimes there's not enough data, sometimes the enrichment is off. We send them through text campaigns, email campaigns, and phone call campaigns. Average SDR, BDR, I don't know what they're called, but the person making dials, they do more than 80 calls a day.

Wow. And this is This is your nurture, your middle of the funnel that you're nurturing the people that are ready to buy. Bottom and middle. Okay.

We do it for all ends. And then top of funnel, different sequences. Even if they schedule a call, we still have sequences for texting, emails, and different follow-ups for phone calls.

So you're touching them quite a bit.

We're touching them a lot.

Yeah, yeah, yeah, yeah.

We call a lead. I don't have the exact number, but the last time I looked, it was a percent. It was like a decimal point, right? But I know it was more than 6 times a month.

You call a lead 6 times a month? More than 6 times That includes— to call the 6 times, I'm assuming if you include email and SMS and everything, it's a lot more than that.

Yes.

Yeah. So, I mean, the key takeaway for me is the fortune's in the follow-up. And the other thing I'll say is, and I actually disagreed with this initially, but everyone around the group, these are all founders, right? And these are entrepreneurs. They're like, uh, one of my friends is just like, dude, F the budget, remove the budget. And you know how all agencies have the budget in there? It's like, dude, everyone in there is like, The reason why you don't want to have the budget is because one, I don't know what my budget is. Two, I don't like being bucketed into something. And then three, I don't— I know if I put a higher budget, you're going to try to charge me more money.

Right.

And so like, I see where the logic is coming from and like, I'm down to test it, but it's— it goes against like my marketing teachings. My marketing learnings. Yeah. What do you think about that?

I've tried all the different types of things. I don't think there's a right way or a wrong way. What works for one business, funny enough, we've tried because we both have agencies. We've tried our approach on many different companies and some it works, some it doesn't. and we've tried their approach to our business and it works for them and it doesn't work for us. I think it really varies per business. What's funny is what they're talking about on following up with leads, when we get leads through our ad agency website, NP Digital, it's not the same sequence. The same type of sequence and messaging does not work that it does on neilpatel.com.

Interesting. Yeah, because neilpatel.com, it's weird because you have a corporate site and then it's you. So they behave a little differently.

But the corporate website, especially with our enterprise leads, you cannot follow up the same amount, you can't do it. with as many emails, text messages, et cetera. But the type of customer that we're pitching, a lot of time it's, we have a problem, we're doing an RFP, let us know if you want to be included, we'll follow up with you at a certain date if you want to be included. It's a very different type of campaign.

It's formal, it's more formal.

It's much more formal. And the businesses, the businesses know more so what they want and they're going into it, you know, saying this is what we're looking for.

Yep, makes a lot of sense. By the way, Neil and I have an agency owners group called the Agency Owners Association. All you have to do, just go to marketingschool.io/agency. Once again, it's marketingschool.io/agency to learn more. And now back to the show. The other thing I'll say is, I mean, we spend a lot of time, we're talking through business, talking through hacks and all that, but we played basketball, we played pickleball as well. We're going to go on a hike. We ate really amazing food. And what you realize with these retreats, and anybody that's listening, it doesn't matter what stage you're at in your career, even if you're like 21 years old, you can put your own little retreat together. Maybe it can be like a 1-day get-together and 1-day mastermind. These things just go a long way because people are learning through osmosis. And then, one of my friends who does a couple hundred million dollars a year, he's like, dude, we have the same problem. We're just order-taking. We're not following up with the middle and we're really bad at doing that. And so, like if you're a really good marketer, you're bringing in a lot of top of the funnel and you're also converting a lot of bottom funnel, it's worth it to take a look at the middle 60%. And I actually wrote out an entire memo about 6 or 7 pages or so. I sent it to my team and everyone's like, oh my God, the ideas here are so amazing, right? So, we're going to be implementing a lot of these things moving forward and you should be able to see them on our website in the next couple of weeks or so.

Cool. What else did you end up learning from this?

I would say, I mean, I learned— okay, I'll just put it this way. I mean, there's some people that you think— I'll tell you offline— some people that you think are doing really well. This is not anybody in the group, but some people that you think are like billionaires or whatever, they're actually not. They're actually in debt, like a lot of money, right? But a lot of people have made billions of dollars by stacking up debt.

A great example of this is in venture. You know, a lot of them have companies that don't produce positive cash flow, they raise tons of debt, maybe not personally, but on the corporate books. And you have businesses like that, Byju's, you see that Indian startup that was worth $20 billion, now it's like $1 billion or somewhere around there. It's not a profitable business and they use a lot of cash to go buy up other businesses.

Yeah, a lot of— so the companies I'm thinking about, yeah, it's exactly what you're saying. A lot of them are— it seems like it's good outside, but ultimately they're not insolvent, but it's a lot worse than it looks.

A lot of them, their net worth is tied up in stocks that aren't liquidatable. And what I mean by that is like stock of a company that is privately owned and there's not a ton of secondary options for it.

Yep, totally. Um, but other than that, I think it's, uh, you know, the other thing I'll say is, what else, what else have we picked up? I, there's a lot of— here, I'll share one from our friend Syed. So he has a really good one. It's, um, Actually, I don't even know if he wants us to share. He's pretty private about a lot of these things. Yeah, I'll leave that one alone. But yeah.

You gotta share it. You're just about to share it. Come on. Say it in a way that won't piss him off because, you know—

No, I can't share this one because this is how he negotiates. So, some people might use this against him.

He's not gonna really negotiate with anyone listening to the podcast anyways.

Well, we don't know that. Like, it's— I'll share with you afterwards. I'm sure he's okay with me sharing with you.

I don't want you to share it with me. I want you to share with everyone else.

Okay, fine, fine, guys. Markings School special. Over here. So, so I think this one's, this one's probably okay. But here's how it works. And I'll paraphrase here. I'm not gonna use these exact phrasing here because there's like—

Sure.

So let's say I'm trying to sell you software, right? So you, what's gonna happen? I'm gonna try to get—

Sell me the company or sell me software?

Like just software? Like you have to buy, pay me, pay me monthly. Okay. Yeah. So what happens? Well, if it's enterprise software, you probably have to get on a demo with me, right? Yeah. So what he does is he puts his assistant on the demo. And the assistant basically makes it look like Syed has no time and Syed needs to make a decision on the top 3 options. So basically it's like, hey, Mr. Balki has— just please give us the best pricing here. Mr. Balki is going to pick the best pricing. And then if they give a pricing that's unacceptable, whatever pricing they give actually in the beginning, he says something like— the assistant says something like, I'm sorry, this, this will make me look really bad. I cannot present this pricing to Mr. Balki, right? Please provide your best offer. And then they get all scared and everything. And then they provide him the best pricing. And then ultimately, that's— he doesn't need to get on the demo calls. And that's how he gets the best price as well.

Dude, this is too complicated. I have a better solution than this.

What's your best solution?

All right, so we already do this. But we have— I know he has a good amount of employees, but I think we have more employees than him, right?

I think so. Yes.

I don't mean that in a better or worse way. It's just I have more staff to get on the demo calls. So I don't get on the demo calls in the first place. The team tells us what they want, and then they go and do the demos. The corporate policy is, is when they're on the calls, they just say, hey, we're looking at a lot of solutions in this space, give us your best price. Then they get the pricing. And then most companies have a procurement division. If you don't have a procurement division, you can just email out and be like, cool, we appreciate your demo, we love your features, but we got much You don't even have to tell them what the other pricing is, assuming you did get better pricing. And then people start coming down on their price and then you pick. And the last one, if you really want them and you want them to go lower, you could just be like, look, really want to go with you. But for us to make this work based on everything else that we've seen in the market, you have to go down to X price. If you choose this, if you are interested, or if you accept this, please let us know in 24 hours. We have a deal. If not, we're moving on to—

Yeah, you guys are doing the same thing.

We're doing the same thing. But I don't have to end up scheming over it. It's like, let me get an assistant. And like, it's just too much work.

It's just— Well, no, it's just a workflow. You have a workflow, he has a workflow, it just goes through his assistant. That's all it is. And I think he has it go through like his portfolio companies as well. They do the same thing. So it's the same thing. Yeah.

But what I'm getting at is you don't need an assistant. Or are you saying he's not trying to do the assistant on purpose? He's just leveraging his assistant so he doesn't spend his time.

Yeah. I mean, he's leveraging employees to help him with the negotiation. And then he comes in, it's like a power play type of thing. Like it works, right? And then The other thing I'll say is this. The other thing I learned, we can move on from this, is Al Doan. He has the quilting company. They basically— he buys towns. And so, you just basically, if you want to buy a town that doesn't have a lot of people, what do you need to do? You just buy up the real estate, right? And so, like—

That's cool.

I thought that was interesting. And he's like—

Wait, wait. What does he do once he buys up the town?

I don't know. But like, it's— I just thought that was mentioned in passing. He's like, he wants to— it seems like he wants to show people or tell people like, He's basically the town guy, right? And so, um, that's—

Why does he want to buy a town?

Because it's cool. I don't know. So basically, that's what it is. He has, uh, he has a town, and I think he has multiple towns actually. And that's not— not many people can say that.

I don't even own one town. I can't afford the town I live in.

Yeah, actually, there's other people in the group that have, um, stakes of towns too. So yeah.

Yeah, that sounds expensive.

Yeah, it is expensive. Um, but other than that, yeah, those are the things I think—

Unless you buy a town in the middle of nowhere where—

Exactly.

Exactly. Okay, so he's not going after a town like in Los Angeles?

No.

Or outside of Los Angeles?

Can't afford it. You could even afford like 1% of Los Angeles.

No, no, I'm talking about subsections. Los Angeles is a county, right? But there's smaller towns in Los Angeles.

Yeah.

But all real estate is expensive.

Like Antelope Valley or something.

Yeah.

Dude, Antelope Valley is probably still expensive. It probably is. But my point is, look, there's the things I shared are the things that are okay sharing. There's a lot of things I can't— there's— we went a lot deeper. But unfortunately, I can't share those things, right? Because this is like a— it's a private retreat. So, go do your own private retreat. Doesn't have to cost you a lot of money. We all pay costs. We're not trying to make this a business and it's just good times. And then we get to go to cool places as well. So, that is it for this episode. Please don't forget to rate, review, subscribe. It helps us grow. And also, also nothing else. We'll see you tomorrow. Bye.