John Warrillow - How To Lay The Groundwork To Sell Your Business

Yeah, I mean, the essence of Built to Sell is this idea that for your company to be valuable, it's gotta be something that can thrive without you personally. And so for digital marketer, that's gonna be important because the idea is that if you're too much the kind of pitch man or woman for your company, if it's a very personal brand driven business, that can be problematic because an acquirer will look at it and say, well, this is great, but how do I extract any value when you're not around? Boom, boom, boom, boom, boom, boom.

What's up everybody? You're listening to the Hustle and Flowchart podcast with your boys, Matt Wolf and Joe Fear.

Hello. Welcome back to the Hustle and Flowchart podcast. Today's guest is an awesome guest. I really, really, really love this conversation. Our guest couldn't have been more friendly and we couldn't have enjoyed this conversation more. And he's someone that actually wrote a book that, that I read probably seven or eight years ago that had a huge impact in how I've structured businesses and how I've consulted other businesses ever since. And today's guest is someone by the name of John Warlow. And he's got a couple really popular books out right now called Built to Sell and the Automatic Customer. Built to Sell was all about how to sort of design your company so that it can be sold in the future. The Automatic Customer is all about generating recurring revenue from your business. And now he has a new book that just came out as the time this recording is being released, the book will have been out for, you know, a week or two already. And his new book is called the Art of Selling youg Winning Strategies and Secret Hacks for Exiting On Top. And of course, this third book is all about how to actually get to the exit of your book. And John says this is essentially the trilogy, right? The first book is about building a business that's designed to sell. The the second book is about maximizing revenue from your business through recurring revenue. And then the third book is about how to actually make the exit happen, right? So he's got this whole trilogy of books and this conversation was a wide ranging conversation that kind of covered topics from all of the books. So we talked about how to set up your business so that it is designed to sell. We talked a lot about adding recurring revenue to your business. And then we talked about how to actually get to the exit. And, and some of the questions we asked and some of the types of conversations we had were things like why should we do recurring revenue when you can do a lifetime offer and just charge a lot more? So if somebody has a business that charges a hundred bucks a month and somebody sticks around in that business for an average of 10 months, why not just charge $1,000, make it lifetime, and you're making the same amount of money either way. So we dig into why he believes recurring is always gonna be better than life. We asked him questions like, let's say you have a brand that's like an influencer brand or a personal brand. You know, for example, Hustle and Flowchart, Matt Wolf and Joe Fear, we have personal brands. Hustle and Flowchart is sort of us, right? You take Matt Wolfe and Joe Fear and it's a completely different show. So how do you actually build a business to potentially scale and exit if it's built on the back of influencers or personal brands? And he has some good advice and good feedback. And then obviously we talk a lot about other things around recurring revenue, exiting your business and dialing all that in. But we cover a lot of ground and John is just an amazing guy. We just absolutely love the conversation. So make sure you stick around to the end after the interview to what Joe and I call the banter section of the show where we kind of talk about our takeaways and aha moments and the big lessons that we got out of this interview. So if you're not sticking around to the end of the interviews, you're missing a huge chunk of the value that we, we're trying to provide here with Hustle and Flowchart where we give our insights at the end of every episode. So make sure you stick around for that at the end. If you haven't already, make sure you go to Flowchart Group.com now. When you sign up at FlowchartGroup.com you'll actually get redirected to our Facebook group. When you go to the Facebook group, there's a series of questions that it's going to ask you in order to request to join the group. One of the questions is for your email. If you give us your email address when you request to join the group, we're going to hook you up with the notes to for the latest episodes on the show. You gotta get it within two weeks of this episode going live and all of the notes for the most recent two weeks worth of episodes will be provided for you. So go to flowchartgroup.com, join the Facebook group, give us your email and we'll hook you up with our CliffsNotes of this episode, our action guide from this episode. So that's flowchartgroup.com. go check it out. Go sign up for the group, give us your email. We'll hook you up with the notes from this episode and all the episodes that have come out within two weeks of this episode. And join the community, get interactive chat with us. And we love to see you in the group and we'd love to hook you up with these notes. So go do that. I'm done rambling. Let's go talk to Mr. John Warrilow.

All righty, John, we're rolling. We're ready to hit this thing hard with you. Thanks for joining us on the show.

Yeah, thanks for having me.

Yeah. Well, we were just saying we had all these interesting connections recently and also in the past, starting with our buddy Brad Costanzo. Bacon wrap business. You've been on there a couple times and maybe it's good to get another round in there since you have a new book too and it's kind of like completing the trilogy with him. But yeah, you connected with Matt on LinkedIn. Will Wang, little shout out to him. He's a listener and previous guest as well. So it's just kind of meant to be that we're having this conversation. We're like, okay, John needs to come on the show. So it's perfect timing because you do have a new book as well and it is completing this trilogy. So kind of curious. We'll talk about that and some of the other books that you've published because I think all this a great conversation for our folks who are, you know, there are a lot of folks building fan bases thinking about traffic to their business, the marketing side of it. But I think this is going to be cool to really understand the principles of what makes the value of your business if you're going to sell or even if you're not going to sell, it's really good to know this stuff. So we'll see where it goes.

Sounds great.

Yeah.

Great to be with you guys.

Thank you. Well, give us a. Just a brief overview of yourself and we talk about the books and value building system, this whole kind of interesting ecosystem for business owners that are looking to build the value of their businesses. Give us a little, maybe a little background there and then we'll jump into it.

Sure thing. Yeah. So I've been involved in a few startup businesses that have sold one to a public company and I think it's fair to say I've made all the mistakes there are to make. When it comes to selling companies. So I wished had you say you scratched your own itch. I wish I had had some sort of playbook to how to figure all this, the whole selling of a business out. So I wrote a book called built to sell a while ago and the idea behind that was like, how do you create a business that you could sell? Not whether you want to sell or not, it's like, how do you build a valuable business? And that's all about creating something that doesn't need you to run it and therefore is transferable. I gave short shrift to the idea of recurring revenue in that book that was. I mentioned it, but I didn't really spend enough time on it. And that really is a. A significant jet fuel for your company. When you create recurring revenue, it really accelerates the value. And so I wrote a second book called the automatic customer, which is all about recurring revenue.

Right.

How do you build that into virtually any business? The one thing that's funny is I do occasionally, before the pandemic, get asked to speak to business owners, entrepreneurial groups. And one of the things that I find funny is that I'll give my spiel on recurring revenue or on building value of your company and I'll get a hand in the air and says, yeah, I kind of like what you had to say, but like, how do I avoid an earn out or like what's escrow? And like all these sort of very mechanical things, tricks and tips to look out for when it comes to the actual transaction itself. So I wrote this new book, the art of selling your business, with a view to sort of answering that. It's a bit of a synopsis of some of the best practices I've learned from other entrepreneurs who've. I've interviewed for my podcast. I've done something like 300 interviews, so I tried to distill those down into a bit of a cheat sheet.

Yeah, no, it's very cool. I love the concept of the book and now it's out. I didn't actually know it at the time or would have dug into it, but I love the concept of it. Allows you to really punch above your weight class when you are ready to sell. You're now prepared to sit at the table, look at this offer, talk to the folks on the other side of the table and strike a deal that's actually worth it for you and probably maybe even better than what you thought was possible.

Let's definitely land on that. I think talking about the built to sell, I know there's A lot of folks that have probably read Built to Sell, I think it was 2011 right when that came out, or thereabouts. Yeah. So that's, I like the trilogy because that's kind of like the build it with the right foundations and then you have automatic customer which is basically, you know, exponentially grow the revenue of your company and probably take a lot of pressure off you as well. And then you have the kind of the final piece, it seems like here with selling your business. So I wonder like where.

That's absolutely right.

Yeah. And maybe, maybe we can kind of think like do like a synopsis of like the three parts. It seems like three pillars. And it'd be kind of cool to identify for the folks here that are, you know, a lot of folks are really digital marketing heavy. So some of these principles are probably not focused on as much as, you know, the marketing principles, which we all know that you need. Both for sure. Yeah.

I mean the essence of Built to Sell is this idea that for your company to be valuable, it's gotta be something that can thrive without you personally. And so for digital marketer that's going to be important because the idea is that if you're too much the kind of pitch man or woman for your company, if it's a very personal brand driven business, that can be problematic because an acquirer will look at it and say, well this is great, but how do I extract any value when you're not around? And so we can look at. Elon Musk has built an incredible business based on his personal brand. But you'd hate to think what would happen to the stock price of Tesla if Musk left. And so that's just.

A word of caution around a digital marketing business where you're very much the kind of front man or woman for the company.

Yeah, well, that's one of our friends and mentor is Roland Frazier from Digital Marketer the Company and he talks about the dancing bear business. So when you're that front person, when you stop dancing, the money stops flowing. And that always kind of hit me square in the eyes because we have this podcast, a lot of us is relying on us. When people reach out, they want our help, our support us on the coaching calls or whatever it might be. So that's definitely been on our mind.

Yeah, I think that's a good place to start right here because I do think that's a lot of the audience listening in. It's those digital marketers who have put a lot of focus into personal brand, you know, the, the, the Coaches, authors, consultants, people like that, where they're, they're buying them, it seems like. Right. And, and we feel like we've pigeonholed our business a little bit in that way. We, we're doing some things to break out of it. But with this podcast, with our coaching that we've done with our online courses, we sort of have this feeling that they expect to get us when they, when they buy it.

Right.

And if, if we replaced us on this podcast or we replaced us inside of our membership, then we'd lose people or it'd be harder to sell. So maybe that's a good place to start. What sort of advice would you give people in that sort of situation?

Yeah, it's a tricky situation because if you think about things from an acquirer's point of view, they're going to look at a business like that and say, okay, when Matt and Joe leave, what's left to monetize? And so your list is going to be important. But if it only works when you endorse the list or if you actually write the email or the, you know, the post or whatever, then again, it's going to be of limited value. So what I would structure or what I would suggest is that focus on branding products in your overall business. So there's this concept of service providers, coaches, consultants, etc. Productizing. And it's the process of making your service look like a thing, like a product. So naming it, setting up a set of steps or features of it, trademarking it, and ideally making it run as its own entity on an automatic recurring revenue cycle. So that's going to productize. I was thinking about it with this whole Covid thing. Johnson and Johnson is coming out with a COVID vaccine. Johnson and Johnson, the actual names are two individuals like they're brothers, right, from 200 years ago, yet they built an incredible company on the back of brands we all know and love. Band Aid is a Johnson and Johnson product as an example. So I just, I think you can start to migrate the personal equity you have in your brand to equity in your company. If you name the company, if you name the products separate from you. And it goes so far as to. Is to making sure that you don't even introduce yourself in a generic term. So what Oftentimes service providers do, or they'll say, look, I'm a business coach, or, you know, I'm an SEO consultant. And the moment you lump yourself into that bucket, you are inviting competition, right? Because you're saying, oh, you're an SEO consultant.

Great.

There's a guy on upwork I can get for 20 bucks an hour. Why should I pay you a hundred? That's a problem. So what you want to do is brand your product. We've got the five step SEO solution and that's a thing that we can run you through. And ideally you can get other people to actually run customers through that five step system. And that's when you've got the best of both worlds, kind of the product eyes, but also someone else doing the work.

Yeah. So it's kind of its own entity. You're building these assets that can stand alone, but you're influencing them, putting your endorsement, you're probably running them. But nothing's to say that that framework that you trademark and you put out there can be maybe delivered by another coach or some system that automatically does that for you that you can have a subscription business on the back of.

How about the case of Tesla, because you actually brought up Elon earlier and that's an interesting one. So what would you say to a company like that, who's behemoth and then you have this brilliant wild man at the helm.

Yeah, look, I'm in no way in a position to comment on Elon Musk for sure.

I know Unicorn, that guy is a.

Legend and just built an amazing business. But it is dependent on him. What he's done a nice job of though, and you've got to give him credit, is he's built incredible brands. Right. So he has done this. He certainly has a following, he's got whatever number of million followers on social media, social. But he has put his brands, his companies in first place, so to speak. So you definitely get the sense that Tesla is its own entity, that while he's at the helm, it's a separate company. And it's very different to SpaceX, which is again a separate company run by a separate CEO. So having infrastructure in place, brands, people other than yourself who are front and center. So if it's always you on the, you know, the email string or the, or the, or the video, et cetera, that can be a problem. So bringing in a team around you that can be also a front person for your company, I think is important. Those are all sort of strategies I think he's using to slowly separate himself personally from the company.

Yeah, I could see that. And these are all solid principles kind of on the building phase. If we're thinking of these three pillars again, you know, because this is. Yeah. For digital marketers and just entrepreneurs. I feel like a lot of Us will just take on a personal. I could solve this thing. Hey, I got a business now. I just got some money, you know, and then it starts to kind of take off after referrals or whatever you do to do the marketing. And then that's where a lot of folks find themselves to this podcast or find themselves. And I think this is a good foundational thing to think about. Yeah. And maybe it's a, you know, an evolution, I would say, you know, over the next coming years, as you're starting to realize, oh, there's more to this than just me. There's only so many clients I could take on. And I know the parable in Built to Sell was around an agency and you can actually productize an agency and then automatic customer. Seems like that's more the subscription level of things.

Yeah, that's where I think.

The real accelerator happens, as we talked about. Because a lot of digital marketers will think about like a click funnel and they'll think about, okay, we're going to do a product launch and we're going to get certain number of people to buy the free thing and then we're going to get a low price thing and then we're going to people to buy the expensive thing and they're thinking very much and yeah, I had a six figure launch or a seven figure launch and they sort of brag about that. Right. And that's sort of.

Something they're excited about. Again, I think there's a very different way of running a company because when you think about those businesses that are very kind of transactional, I'll call it, whereas there's an event, there's a launch, it's very much like a real estate agent or even a professional speaker who, when you actually talk to them, they can feel quite burnt out because it's like that adrenaline rush of always getting a hit of adrenaline when you hit the next product launch that you sell the next house, you get the next speech, it can be very addictive, but also very empty. It can make you feel very empty. Like you're just running on a hamster wheel. Like there's only so many more cars we can buy and, and trophies we can buy to spend that sort of transactional money. Whereas if you create a recurring revenue stream through a subscription model, you're now building something that every day you wake up in the morning, there's another brick in the foundation you're not starting from scratch is I guess what I want to say. So the idea of sort of a transactional business, you Kind of wake up in the morning and you got to start hustling right again.

Right.

Name of your show. But at the same time, if we can think of it as building on blocks. So if you win a subscriber, that's who's going to stay with you for a period of time, that's a block that you can then build on top of. And you start to build something that does run eventually without you. I was doing a talk, this is pre pandemic. I was doing a talk for a bunch of entrepreneurs and I was saying, like, what's everybody want to do with their business? How many want to sell? How many want to pass the business to their kids? How many want to do a private equity deal? And one guy throws up his hand and says, I don't want to do.

Any of that stuff.

And I was like, okay, you know, I'll take you to the bait. What do you want to do with your business? And he says, I want a sailboat business. And I'm like, all right, what's a sailboat business? And he says, I want a business that I can put my feet up on the gunnels of my sailboat and people will just send me checks. And I thought, okay, okay, that's like, that sounds good. I'll take one of those. He was describing in a very sort of like fun loving way, the essence of a subscription business. Right. Where there's that you're not having to kind of create a new you every day.

Yeah. So I have a question about the subscription business because you might be able to help us sort of handle an ongoing debate we've been having with some other people. So we have a friend, and I'm not gonna mention any names, he listens to the podcast, so he's gonna hear this episode, but he has a software business that he sells at a one time price.

Right.

It's just you pay once and then you never have to pay again on the software. And the question always comes up to him of why don't you sell this as a recurring thing? People would continue to pay for this software month after month. It's, it's a pretty critical software in people's businesses. So they, they would keep using it. Why, why not make it recurring? And his answer was something to the effect of, well, if you know the lifetime, if you know the retention of your customer and you know the lifetime value of a customer, why do you need it to be recurring? Right? If, if, let's say a product is $100 a month and you know your average retention is 12 months. Why wouldn't you just charge them $1,200 upfront and then the lifetime value is the same regardless. So I'm kind of curious, you know, how do you respond to that, that style of thinking about it?

Yeah. Because your company is going to be worth infinitely more if it's on a SaaS or recurring revenue model. Even though you might be getting the same in terms of lifetime value as a one time payment, like a lifetime membership versus an ongoing kind of monthly membership, you're going to get a much bigger multiple for your company if you structure it as a SaaS business. Usually a well run SaaS business can lengthen the lifetime value of a customer because you're always interacting with that customer. The problem with doing it as a one time thing is you get the big check and you forget about the customer. Whereas once you create a recurring or automatic customer business, you have to serve that customer day in, day out. It's going to make you want to keep them sticky and that just has its own halo effect. And just to give you a sense of like the proportion here I'm talking about, I just did a podcast with a guy named Rob Walling who started the company Drip. Have you ever had Rob on the show?

Not Rob, but we've used Drip before.

We use Drip. So email marketing software built it up $2 million of annual recurring revenue. Subscription based.

Couple million dollar business. In a transactional business space, maybe you get 1 times revenue for it, maybe a little bit of a premium on that. In a traditional world. Rob was entertaining offers in the nine to 13 times top line revenue.

Wow. Wow.

Stratospherically different than what would be considered for transaction model. Now that's not to say every recurring revenue model gets multiples like that. They are not the case. Rob had a very, very unique business, had very low churn rates, growing very very quickly. Which is the two kind of elements that people look at valuing a subscription business. But even relatively slow growth and smaller SaaS companies are usually trading at at lower but still multiples of revenue. And so I would counsel your buddy, think about the value of your company and again it's indicative of I think of this mindset of the product launch where there's this sort of transaction and the sort of ability to go to boast about the size of the launch. And it was a six figure launch or seven figure launch. Again I would just encourage you to think about the tail and are you trying to build the short term profitability of your company or the long term value of it. The other thing I would say, and this is a thing that folks often underestimate when it comes to the benefits of recurring revenue, is there's something called the Trojan horse effect, which effectively means that once somebody subscribes to your product, service, information, product, etc. They become much more likely to buy other things from you, their boy by boosting the lifetime value of that customer. So once they buy subscription A, it makes them infinitely more likely to buy product B. And so if you're just focused on the value of product A and you're doing well, it's 12 times whatever, you're probably missing the other benefit of the product B, C and D that you could sell to a subscriber. Why is that? Well, once we're a subscriber we, you've got my credit card, you know where I live, we trust each other and therefore it just makes it many, many more times easier. Like if you think about once you subscribe to prime, you probably likely started to buy more things from Amazon. Oh yeah, I've interviewed a guy actually for the automatic customer, guy named Jim Vagonis who does home renovation, home maintenance, I'll call it on subscription. And he found that once he got customers to subscribe to his home maintenance plan, half of his revenue is coming from one off stuff they buy from him. I need a new roof, I need you to install a deck. But he would never have had the opportunity to bid on that had it not been that he was billing them 100 bucks a month to maintain their home.

So he's in the conversation, he's always in the mind.

Exactly. He's got that trust, that relationship, that billing relationship, permission to communicate, opt in, et cetera, et cetera, et cetera. It just makes it infinitely easier to sell product B, C and D like that.

What's your thought on.

Low level recurring with to this Trojan horse concept? It seems like every business can have some variety of a Prime type membership. I mean in our forum we have a newsletter business where there's an online component but we actually send out a physical 40 page thing every month. It's actually based off the content here in the show. So. And we charge 15 bucks a month. But now that's a new pond that we, we know there's a bunch of buyers in there, they trust us, they are super fans more or less. And yeah, we monetize with affiliate marketing primarily and other rev share type deals, equity deals too. What would you say to like a micro continuity for most businesses? Is there A model that you would, and I mean, you know, a low level, whatever micro is for that industry or niche. Have you seen some good success stories there? Any principles you can share for any business that layer that in?

Yeah, I mean, the biggest mistake that we see in companies trying to create a recurring revenue model is trying to do it for everybody. So in your case, you talk about super fans, you said, you know, for our real superfans, we're going to create the subscription. That's great. That's thinking, saying all the guys you kind of talk to through your podcast, through your universe. It's not for everybody. It's for this like tiny sliver over here. That's one of the core principles that a lot of people get wrong when it comes to creating recurring revenue. We think about, okay, I've got all these customers over here, I've got to come up with something that they're all going to like and I can bill them for every month. And that's almost a recipe for a diluted offering. What you've really got to do is look at all your customers and try to bucket them or segment them by the reason they buy from you. Right? So some buy for some things, others buy for others. And once you do that segmentation, you'll often find the subscription offering or recurring offering starts to emerge. I'm reminded of a story I wrote about in the book the Automatic Customer called hbloom, which is a company that sells flowers, Right. Like we think about the average flower store down the street. These guys decided that they wanted to sell flowers on subscription, but they didn't do it by just offering a subscription to everybody who buys flowers for weddings and funerals and birthdays and stuff. They're like, no, let's figure out our customers. And it turned out there's this one very small segment of their customer base. Hotels that buy flowers on a recurring cadence because they want to be perceived as boutique and high end, whatever it was like hotels and wealth management companies and really high end spas. They're buying flowers on a recurring basis. So they built a subscription around that buyer need. But they weren't trying to sell subscription to flowers for people who are buying it for their birthdays or funerals or graduations. It was the segmentation first and then the subscription offer after makes sense like that.

So you can get to know your customer, what their needs are. And maybe there's a segment and it could be a small segment that's just going to be that automatic customer, the one that keeps buying because there's a need for it. And yeah, it doesn't have to be your full market there. I love that.

And it's usually segmentation by customer need as opposed to demographic or firmographic. Most marketers are aware of like segmenting, right? It's kind of a one on one. And so most of us do okay, like, you know, men, women, income level, age, you know, browser, you know, all that stuff. We do that sort of segmentation. What I'm referring to here is a slightly different segmentation where it's like buying behavior, like the reason they buy from you. And that's, that's a slightly different segmentation, same principle, but it's a slightly different way to think about all of your customers.

Now, is there any way that we can sort of reframe recurring revenue in our own minds? So just to give more context of where my brain's going right now, so myself, when I'm buying software in our business and I see like, oh, it's a recurring revenue product. It costs 99 bucks a month, $47 a month, whatever. I go, oh man, another recurring revenue. I got to add another monthly expense to our business, right? So when we're actually out there creating products, we almost have an aversion to wanting to create recurring revenue products because of how we feel ourselves about recurring revenue products. So is there any sort of like reframing that might help people overcome that kind of thing? Because I know that's something I struggle with personally.

Yeah, it's like subscription fatigue, right? Like your Amex bill is not like seven pages long. Suddenly this, these 10 bucks a month products are adding up. Ye. So I do think subscription fatigue is a real thing. And I think it can be quite compelling to think 10x versus 10%. What do I mean by that? I mean, nobody's going to subscribe to your product to save 10%. I'd rather the independence of being able to buy when and where I want to than just to save 10%. Right. So if you're a swimming pool company and you're going to sell, you know, chlorine and you're going to just say, well, you could subscribe and you'll save 10%, no thanks. I'll just pop into the store when I want it, or I'll buy it on Amazon, whatever. Nobody's going to subscribe for a relatively limited value proposition. I like to think in terms of 10x meaning making your subscription literally 10 times more value than a transactional business model. Now that's a challenge. It can be really difficult to Build that level of value into your subscription. But I would argue that Netflix has done that. So if we think about Netflix and we think about the old school, 200 bucks a month for cable or even I'm old enough to remember going to Blockbuster and getting DVDs, if you can believe it, right? So that's like, if you think about it, one movie would have cost you five bucks back then to rent, right? So here's Netflix with tens of thousands of titles. That's what I mean by 10x. So that can be a real head scratcher. Especially if you're taking your product and you're saying, well, usually people buy this for $1,000. So I'm just going to break it up into 12 payments of 100 bucks as an example, or 80 bucks. That's probably not going to work. If the customer thinks in terms of what it costs them to buy it on a transactional level, what you're really wanting to do is bundle in so much value that you literally could make a case that it's 10 times better to subscribe than just buy on a one off basis. Now some people are hearing that and saying, okay, but that sounds expensive. Remember Rob Walling, right? Builds a business, trades at a multiple, like a high multiple of revenue. So yeah, it maybe will be more expensive, but it will add enormous value to your company. Much more than just another transaction.

That's a good reframe because that's. Yeah, I see a lot of pricing models in the marketing space, but of course across the board that really lean in on that discount. Even if it's an upgrade to an annual. Do you have any, you have a monthly option, an annual option, Would that kind of apply there? Because usually that's only based off of a 10% savings. Oh, I'm sure the same thing would apply there, something similar.

Yeah. So look, in an annual versus a monthly billing, usually, yeah, usually save 15, 20% on an annual billing plan. With a business to consumer offering. Oftentimes churn rates are higher than 100% a year. So again, I don't want you guys to reveal your churn rate, but something like a newsletter or if you've got a travel newsletter, for example, the churn rates on that are generally through the roof. Because a business to consumer, your threshold for churn subscription fatigue is much higher.

I was interested in taking a trip to Italy. I'm going to subscribe to this newsletter for 10 bucks a month on Italy. Six or seven months go by and you're like, you know what, I don't need this anymore and you churn. So business to consumer models have much higher churn rates, in often cases higher than 10% a month or more than 100% a year, in which case the annual billing option is great because you guarantee yourself effectively 12 months of subscription, which increases your lifetime value. In a business to business transaction where you are selling something that the business uses to make money, churn rates generally are much lower. And there what you're trying to do is minimize churn. And here again, annual billing can help.

Why?

Because when you get someone to write a check for $1,000, $5,000, $10,000 in a business to business context, it makes them kind of perk up a little bit, sit on the edge of their chair and go, okay, I'm going to spend 1000 bucks on this whatever solution. I need to learn it, I need to understand it, and I need to bed in, which makes them more likely to onboard start using it. And that's the secret to getting them to actually recur or become a longtime subscriber is betting in if they're only paying you in a business to business context, 99 bucks a month, 200 bucks a month, you know, a few months could go by and I may not use it, and if that happens, they're gone. Whereas if you spend, if you get them to buy upfront and they spend a few thousand dollars, the chances that they pay attention to your onboarding videos and your, you know, your webinars getting to use the product are much higher than if they're just paying, you know, a few bucks a month for something.

I love that. Yeah. And churn, I mean, and, or sorry, the onboarding process, that's I would say, arguably one of the most important times to save the churn from skyrocketing for any kind of product. And you know, even at the smaller level, there's probably some really good strategies like personalization. I know we send videos to thank people when they join a variety of our programs and you know, it could be just a personal little like hand phone loom video or whatever, the Bonjoro type thing. Are there any other strategies like some quick, quick things that you've seen work well with both monthly and annual, you know, to keep the churn kind of low there?

Yeah, I mean the 30 days that you have in that, in that first month of a relationship with a customer may extend to 60 days in some business to businesses context. But, but that is the moment in time where you've got to nail it. And like big subscription company operators salesforce.com, netflix, they have boardrooms full of people who think nothing more than what exactly is the choreographed cadence of.

At minute six, they're going to get this email. At hour 2.6, they're going to get this video. It's very, very choreographed because they know that every tiny slice of churn they can lop off during the onboarding experience is going to have huge effect. So it's a big deal. I would be testing everything in terms of.

Its impact on adoption. One of the stories that comes to mind was one I wrote about in the Automatic Customers came from Gail Goodman, the founder. Actually, I don't think she is a founder. She was the longtime CEO of Constant Contact, the email marketing software, Right? And so they used to have an onboarding run by a bunch of engineers, software engineers. They used to have an onboarding strategy which was like, who, what, when? So in other words, when you sign up for Constant Contact email Marketing, the first thing they would say is, great, thanks for signing up. Who do you want to send your first email to? Upload your CSV file? And most small business owners, guy who runs a flower shop, guy who runs a plumbing company's like, cs? What.

Is that? And you want my customers like, oh, I have them all in Outlook. I don't know how to extract them out of Outlook. And what's the CSV? And they just churned out right, right out of the gate before you could even get them to use the product. They churned because they got lost, right? Because the engineers said, like, the most linear thing to think about here is we've got a who. Who. Who is the person, you know, we can get. So what Goodman did is she changed the steps in the onboarding process to go from who, what, when to what, who, when. In other words, she said, great. Welcome to Constant Contact. Let's create our first campaign together. Oh, you're a plumbing company. Look at all the stock photography we have of plumbers. Why don't you pop an image into your email and let's build the copy. Look at, here's how you do the bolding, and here's how you do italics, and here's where you put your offer. And all of a sudden, the guy or gal who's building this email, it's coming to life for them on the screen. It's beautiful, right? And they're like, oh, this is amazing. I love this. How do I send this thing?

Right?

And then they're like, okay, now we got to go through the second step. And this is Going to take some time. We need you to upload your customer database. Here's our support number. If you get lost, here's some tutorial. But by that point they were emotionally committed to sending the email because they'd seen how good it looks on screen and as a result, their churn went down. That's just a silly little example of the kinds of things you can do to manipulate your onboarding experience so that people bet in. And once they bet in, they stay. And you can look, you can fumble the ball in the first 30 days and you could basically dance on your head for the next 11 months. They're not going to renew. But the opposite is true. If you nail the first month, you can make a lot of mistakes in the next 11 and you'll still have enough relationship capital to lean on to get them to renew. It's all about onboarding those first 30 days.

Yeah, from a sort of. This might be getting in the weeds a little bit too much. But I'm just curious, how would somebody actually test the effectiveness of their onboarding sequence if the result of whatever they do doesn't happen till later down the line? How would you actually go about figuring that out?

Yeah, your leading indicator in a SaaS company tends to be usage as opposed to churn. So churn is generally a rearview mirror indicator. So you kind of find out about churn too late. And that's one of the most frustrating things about running a recurring business model is you make these changes and you're like, okay, well that's going to help like in four years, you know what I mean? Like that little tweak we made. So instead what you want to do is cohort your customers, right? And so you say, okay, this cohort of customers, the customers that are starting this week or this month are going to get this onboarding experience. And then let's compare them on an apples to apples basis, just like an a B test you would in marketing. You're going to compare them, your B test or your B cohort is going to be the next month.

Right.

And you're going to give them a slightly different onboarding experience. And then you're going to put compare the 30 day usage of the tool cohort A to cohort B and C, which is the champion and which is the one that didn't. And then you go to the next test. And so you're really just continually testing, refining, testing, refining. Again, very similar to an A B test in a marketing campaign.

Let's see now, I kind of want to Transition to pillar three, which is the art of selling your business. Your newest book and definitely go pick this up because it seems, well, seems like there's a lot of opportunity right now just looking at just the world businesses, the state of businesses, not all of them, of course, but probably some really good opportunities for folks to kind of clue in on if they're thinking about selling their business either now or in the next maybe couple years. So I'm curious of some trends maybe we start there and some things and opportunities that people have right now and kind of the current state that we're in.

Yeah. So a couple of things coming to mind. Number one.

We just done some analysis on the users of our software Value builder. We have entrepreneurs go through, they complete a questionnaire when they start with us. And we looked at people who completed the questionnaire prior to the announcement of COVID the eight months prior and then the eight months during COVID so March to October of 2020. And I'm not suggesting, by the way, the pandemic is over. I'm saying we just looked at those, we compared apples to apples that eight months prior. During eight months during the pandemic, things came really bubbling to the surface. The first is that business owners have moved up their sell by date by 20%. So the pandemic has been tough on a lot of businesses, to some extent less so about information business, digital marketing businesses and SaaS businesses. But first, certainly for service businesses, it's been really crushing. So on average they've moved up their sell by date by 20%. The other thing that's really interesting is the idea of passing your business down to your kids, which is something that was sort of like an old school way to transition your business. It's dropped the floor. Very few people now single digits now want to give their business to their kids. And now almost 60% of business owners, when we ask them about their exit intent, like who they're planning to sell their business to, it's to another company they want to sell and get out. They want to sell to a third party. And again, I think that's just indicative of where we're at, how stressful this last 12, 18 months has been on business owners. The other thing I would say as it relates to trends and this is good news I think for all of your listeners in particular though with get a digital marketing product, a SaaS company, is that private equity has really boomed in this pandemic and it's not really anything related to the health crisis. It's more related to the interest rates the health crisis has created. Right now we're at emergency level interest rates, right. And private equity groups, they are fueled by low interest rates, right. It allows them to buy companies and buy them for much more than they would under traditional interest rate environments. So. So even though the pandemic has been tough on a lot of companies, the low interest rates is making a very attractive ROI for private equity groups. And a lot of the folks that I think listen to your podcast would be the most likely natural acquirer for their companies would probably be a private equity group doing some sort of roll up in their space.

I heard you talk about this on another podcast recently and I find it totally fascinating because I didn't really understand it until you talked about it. But the low interest rates, yeah, they're giving these PE firms the ability to really buy for next to nothing because they can back out the revenue. But it seems like, and I think you said this, is that it gives even more value to the person selling their company. Like it can give a lot more cash to them in their pockets because the PE firm can really, you know, there's not a lot of money that they're having to pay on for the 0% or close to it. So maybe talk a little bit about that and explain kind of like the deeper details of this interest rate and how it actually benefits the business owner as well when they're selling to one of them.

Yeah, sure thing. I think there's a benefit, but there's also a caution. So here's the way a private equity company would typically buy a business, unlike a strategic acquirer that would almost always buy 100% of the business. And they may have an earn out for you, but generally they're going to buy the company and start to integrate it. Private equity groups are different. They are run by financial engineers. A financial engineer has money oftentimes raised through outside capital, outside investors, and they are looking to buy low and sell high. So they're looking to buy your company, professionalize it, perhaps bring in some new theories and new management techniques to make it run better. Oftentimes stitch it together with other companies in your industry and then go sell the rolled up combined entity for a much higher multiple down the road. So, so they don't have management in place, and as a result they don't generally buy 100% of your company. They'll generally buy 60%, 70%. What do you do with the other 30%? Well, you roll that into a new entity that the private equity company controls that they ask you to run. So now you're running a new business that looks a whole lot like your old business, except you only own 30% of it, but yet you're doing the same thing. That could be great, great way to diversify your wealth, by the way, because you're able to put that money that they paid you for a portion of your business up front. The challenge is that the private equity company is borrowing money to buy your business. And so your business, this new entity that you're now the general manager of, needs to pay back that money. And so if they borrowed too much money, levered it up too high, it can be very difficult for them to pay back. And I actually, I talked to Ryan Moran about this. He was a guy I interviewed for my PODC recently. And I said, tell me about your sale. He said, I sold 60, I left 40 in, I rolled 40. The PE firm just jacked up with tons of leverage, the new entity, and it became untenable. We couldn't pay back the loan the private equity group took, and they ran it into bankruptcy. And so Ryan, this was a $20 million business. He put 14 in his jeans, but it was six that he left on the table that went to zero because they were using too much leverage. So I don't mean to make private equity out to be a bad type of sale. It's a very good type. In some cases. It just comes with some caveats and some things you want to be thoughtful about as it relates to negotiating with a PE firm.

Now, with this information in mind, and knowing that there's probably a window of opportunity on these lower interest rates, should companies be looking to fast track the sale of their business? If it's on their mind, let's say it was on their roadmap two years out, let's sell this business business. Should they be thinking about speeding up the time to exit because of what's going on in the world right now?

Look, I think we should be in all cases accelerating the time horizon to wanting to sell, bringing it forward for a few reasons. Number one, most businesses are going to have some sort of transition period. Most entrepreneurs are going to either have a private equity deal, as I described, where you're brought in to run your company for a period of three to seven years while the PE firm tries to professionalize it. So that's three to seven years. I mean, that's a long time, right? So if you're thinking, okay, I want to be out in a couple of years, a clean exit is very, very rare, especially among Small and midsize businesses. So you're either going to have to roll equity with a private equity group or if you get bought by, say a strategic acquirer, you'll likely have some sort of earn out. And an earn out is where you put some of your portion of your proceeds at risk and chase towards a future goal and hit the goal, then you get the money. Again, those the average learnout is three years. For service business, it could be up to seven years. So again, if you're sitting there saying I want to be on the beach in two years, man, like time to get on your front foot. Because an earnout's minimum going to be a year, most likely three, could be longer. So before you're actually out of your business, in an earn out situation, it's three years. And so many of us I interviewed. Do you know Rod Drury, the guy who started Xero? Have you ever had him on the show?

Wait, no. Oh, we know another Zero Shoes guy. Yeah, I was thinking of someone else.

Rod started.

Yeah, the accounting, like the SaaS based accounting platform. They're kind of Coke, Pepsi battle with into it right now. So Zero, he started Zero. He got the money to start Xero by selling a company called aftermail. So aftermail was around Sarbanes, Oxley. It allowed you to archive your email. And it's this really good solution for Fortune 500 companies. Sells the business for $15 million upfront and the chance at another 20 in an earn out. So just a lot of money at stake, Rod. So what does Rod do when as a young guy he gets handed a check for $15 million? What would you do? Like, hello, it's time to party, it's time to relax, it's time to eat, whatever. So Rod does all the above. He takes some time off, he pats himself on the back, he thinks, man, this is amazing. The problem is that all the time that's ticking by after he clears that $15 million check is making it harder and harder and harder for him to hit his earn out. Because earnouts are usually triggered by gates along the way. You've got to hit a certain gate which unlocks a new budget to hit the next gate which unlocks a new budget and you miss the first gate. It's like ski racing. It's very hard to recover and hit the second gate. And so Rod missed the first gate, couldn't get the budget to get to the next gate and ultimately left sort of six or nine months after he sold his company and got nothing in the way of an Earn out. Now, he's been successful beyond any imagination, so he's been fine. But I tell you that story just that when it comes to an earn out, it's at risk. And oftentimes we go into an earn out, just burnt out, tired, like, oh, just take this business off my hands. And that can be a problem because you got to come into an earn out with tons of energy. Energy if you're going to hit those goals.

This reminds me of something else that I've heard you talk about and we actually had him on the show just on Friday, recorded Rand Fishkin. And you've told his story and it leads me to. I know it's a brutal story and I don't think even Matt knows about it. I didn't know about it leading up to chatting with him and just we've been exchanging emails ever since. And the guy's amazing, brilliant. But I know there is this time where he got approached to have his company purchased. And you've said the best time to. I'm kind of giving away the thing, but I want you to tell the story is the best time is to. Basically, that's probably the best offer you're going to get is just out of the blue. If someone approaches you, it seems like that's kind of the most valuable offer.

I'm not sure if that's totally correct in your words, but I'm kind of curious if you could share that Rand story here since people probably just heard the podcast with them too.

Yeah, yeah, for sure. I mean, first of all, Rand wrote a book called Lost and Founder. It is gold. Just buy it. It's brilliant, it's beautiful. Read it. It's just so illuminating for so many reasons. But I had him on my podcast, built this on radio, and he told me the story and it just resonated. And the idea is, look, a lot of entrepreneurs are trying to time their exit, right? They're like, okay, I want to sell exactly when the pandemic is over, the economy's booming, interest rates are low, my company's at the top of its ever, and I'm just, it's all going to coalesce and I'm going to sell. Nobody's that good, by the way, to predict when all that stuff's going to happen. But what it fails to acknowledge, I think, is that oftentimes the best time to sell is when somebody's buying. In other words, if you get an unsolicited offer from a legitimate buyer, you're in the driver's seat and that is a luxurious position to be in. You get to. At that point, you can choose to play hardball, you can choose to engage, but either way, they're coming to you. The opposite is where you're going, hat in hand to them, saying, oh, would you acquire me? And it's a much different story. And so, look, when you get an offer as Rand did, it's important to pay attention. So the story is that Rand built a company called SEOmoz. SEO software built up to about $5 million in top revenue. ARR. So it's a SaaS company. And he's been told that SaaS companies usually trade on multiple revenue, maybe as much as four times revenue. So Rand's like, I'm at five right now, but I think we're going to get to 10 next year. So in his mind, he's like 5, but, man, he's starting to think he's close to a $10 million company. And 4 times 10 is 40. And so Brian Halligan makes Rand an offer for 25 million bucks of cash and HubSpot stock. But Rand says.

40 is kind of what I had in mind. And Halligan, who's the co founder of HubSpot, says, I can't do a deal because again, Rand's business at the time was only a $5 million business. So still, Brian Halligan thought he's making a pretty good offer at five times revenue. Halligan walks away. Rand takes the money, takes his business, and decides to accept venture capital. Invests in a bunch of different product lines. Unfortunately, many of them don't work out the same time. Rand starts to struggle, goes through a period of depression. He talks candidly on the podcast, so I'm not telling you stuff out of school. And they remove him. The venture capitalists that invested with him remove him from the board. Now, venture capitalists, when they invest, they use preferred shares, which means they guarantee themselves a return before the founder gets anything for their company. And so when I asked Rand, who was no longer at SEOmoz, what's your. Your shareholding in Moz like worth these days? It must be worth a ton. He says, actually, no, it's probably not worth anything because of the way the deal was structured. And the VCs are guaranteed, they're preferred, and they've held for a long time. And I said, oh, my God, what would that HubSpot offer be worth these days? And he said, based on the appreciation of HubSpot stock, it would be worth more than $200 million.

It's just right to the heart, anyways. Yes. Yeah.

So look, again.

The moral of the story, I think, is the right time to sell your business is when somebody legitimate approaches you because you're in a unique position to be in the driver's seat.

Yeah. Thank you for telling that.

That story hits home with me because our family business that I used to work in before we left to do this, actually had a. An opportunity to sell the company in 2007. So it was a shutter company, a window covering company. It was doing about $2 million a year, but it was a very low margin business. Right. So, like their, their profit on that was probably 10% or something. It was a low margin business. And in 2007, a company, a big, big window covering international company came in and offered to buy them out for like, right around a million dollars. And our family was kind of offended by that number. We're like, well, it's a $2 million per year business. Why are you offering us a million dollars? And, you know.

So long story short, that was 2007, 2008, the housing market crashed. Everybody stopped buying window coverings. The company ended up going bankrupt. So. So they had the opportunity to sell the company for a million dollars. Didn't do it. A year later, there's no company anymore. So it's just.

Yeah.

I really resonate with the best time to buy is when the offer's on the table.

Yeah, yeah.

And chances are, I mean, like, buyers are smart. And the chances are. In Rand's case, and I don't know this to be true, I didn't ask him. I should have. I didn't. Had Brian Halligan, who's a very sophisticated entrepreneur backed by some very, very sophisticated people, if he saw value in SEOmoz, chances are there were other companies out there. Infusionsoft comes to mind that would have also seen value in SEOmoz is very, very high. So once you get that conversation, I'm not suggesting you. You get lured into negotiating with just one buyer. I'm saying that the chances are a, you should take that offer seriously, that you are at a point that you've recognized you've actually achieved a milestone. Many entrepreneurs never reach number two. If they're willing to invest, there's probably five other companies that are. And that's when you start to really ratchet up the value of your company. When you get multiple bidders to start to sort of fight over, if you will, your company.

Yeah, I just looked at the time, and we got to wrap this puppy up. Man, this is so good. I'M absolutely fascinated by all this. So thank you for telling the stories and principles. Talk about your newest book really quick. I know it's a short period of time. We've kind of covered a lot here, but the art of selling your business available now. But give folks, I guess, a quick synopsis of that. Even though we've kind of done so a little bit.

Yeah, I mean, it's just I'm so blessed to do this podcast where I interview a different entrepreneur every day for five straight years. People like Rod, Jury and Rand and all these guys. And I basically took their best practices and put together a bit of a field guide for entrepreneurs to punch above their weight when it comes to selling.

And.

It'S available anywhere you buy books. And I think if folks want to. To check out what we do, it's just builttosell.com and if you go to builttossell.com selling, there's a bunch of gifts that people in your community and your audience can get access to when they order the book. So that's just builttocell.com selling awesome.

And we'll link that up in the show notes. So everybody listening, Go to this episode's notes and you'll find any links mentioned.

John, thank you very much for your time, my man. And this is going to be a ride. So we'll probably stay in contact when some new questions around this. It's been fascinating, so have a great one. Thank you.

Thanks, guys.

I really liked John Heck.

Yeah. Heck, yeah. I did a lot of listening to different podcasts he was on. And amazing guy. And I just love. Every conversation I've heard with him has been different. And this one I loved the most, obviously. But really, I think it's. I kept thinking I'm like digital marketers and affiliate marketers, podcasters. You the listener. You're probably one of those. A creator. I feel like a lot of us aren't thinking this way with our business, and I think that's why guys like Roland Frazier has been so popular on this show and it's told in the surveys. Go put the bingo chip on there.

Yeah.

And you'll get the joke if you listen to previous episodes. But yeah, I feel like he just opens up a whole new perspective and. Yeah, and he nailed it. For digital marketers, specifically. Yeah.

No, I mean, we've kind of gotten back into this mindset with these episodes of let's just kind of get the selfish questions going. Let's just start asking the stuff that we're personally curious about. And ideally, the audience, the listeners, you will be just as fascinated by the stuff that we find fascinating. And I feel like there was a little bit of a shift away from that for a few episodes. Not a lot of episodes, but there was a little bit of a shift where. Where we were kind of taking the podcast to a place where we were letting the guests kind of say what they wanted to say. I mean, obviously we do that with every episode, but we were kind of letting them steer the direction of the episode a little bit more. Right where I think over the last several episodes we've sort of taken this approach of what are we most fascinated by? What would we want to get out of this conversation? Because if we sort of work through this conversation in a way that's going to benefit us the most. Well, the listeners are probably most. They're gonna be like us. They're gonna find the things we're fascinated in fascinating as well.

It's gonna be the best possible content that we can co create together and curate. Really.

Yeah.

I mean it's back to the curation model, actually. That was kind of the aha. Like and recently Matt and I hopped in the hot tub and that's kind of like our brainstorming sesh right there. It's been too long. But yeah, I feel like, like mentioned the survey. We almost over corrected a little bit, I would say, and we took our direction out. I mean, obviously we always want feedback and we're going to trust and respect it, but there's obviously, it's not like, okay, let's just swing the pendulum completely this way now to that side of the spectrum. We're finding a happy medium here.

Yeah, yeah. So I mean, going into this conversation, I had things on my mind that I'm like, John Warlow probably has great answers to these things that are on my mind. Right. So for example, I really wanted to know about why do you need a recurring revenue business when you can just work out the math on what the lifetime value of a customer is and charge the lifetime value of a customer versus recurring. You know, I sort of kind of knew what his answer was going to be before we hit record. The, you know, the amount of money you would make in a year is probably going to be about the same with both of those businesses, but the value of your company, if somebody wanted to buy it, is going to be dramatically different. And that's really the main difference between those two sort of pricing models.

Yeah, yeah. And it's. I think it's good to hear him say that. And someone who's seen a lot of these businesses sell, and he's running those businesses as well. It's not like he's just a. He is a practitioner as well, you know, so that's why it's. Yeah, it's cool. Because we all have different perspectives. I mean, let's be honest, us as marketers, I feel like we have a unique way of looking at business. Business. And we've talked about this a lot and with other people, and.

We have this almost like superpower of like, all right, we could just pour some gasoline on the traffic fire. If we want to make more or get more leads in the company, we know how to sell. Most of us have a funnel or some selling mechanism that's automated, more or less. So it's like, oh, I want to make more money. Well, I got to get more leads and sell more people. Right, right. And it's like, well, there's these other levers you could be thinking of that might be actually a little easier and more long term and create wealth instead of money or cash or income. It's not that it's literal wealth. These guys are banking.

Yeah, it's true. And then the other question that I kind of had on my mind going into this that I really sort of wanted to work through, and I think a lot of people needed to hear it, is if you're creating a business that's really based off a personal brand. Right.

Like.

Like our podcast, people know Matt and Joe.

Right.

If the very next episode of this show, you know, Steve and Mary were hosting the show.

What's up, Steve and Mary?

Yeah, Steve and Mary were the host of the show and they just kind of took over and started hosting it. And they don't think like we think. They don't talk like we talk. They don't ask the same style of questions that we ask because we are all unique. Right. We would. No two people are going to conduct this interview the same way.

Right.

So. So, you know, based on that, the fact that we've built this, like, sort of personal brand business, we've built a membership where we are kind of a core in that membership, people are expecting to hear from us. You know, when we do advising and consulting, people expect us to be the ones on the call giving them feedback and giving them information. So since we built this business on the top of like a personal brand, what's our way out? What's our way. Not that we want out, but like, what. What's the. What's the bigger play here for when. When we can't operate in this business.

It allows us to scale. Yeah.

And so I really wanted to hear his perspective on that, and I loved his answer. I mean, essentially the answer was, you build those personal brands, you build up that name for yourself, but you've got to use that platform that you've built to promote other things that are outside of your personal brand. That's essentially what he was saying, and.

It'S exactly how we've been thinking. So I mentioned that hot tub sesh a couple times and that. Or once, actually, this time I've been mentioned on a previous episode. I'm blending my recording times now is that we. And we've been thinking about this for a while, is like, okay, outside of the podcast, like, this is us. So anything else that exists out of the podcast has the potential to be an asset for us, which that can be. Even our email list is. Well, it's definitely an asset. But right now, I mean, we're pulling back the curtain a little bit. We're partnered up with a couple awesome dudes, Joe Kearns and Mike Alvarez. Magic with a J and K. Come on, boys, make it easy to spell. Love you. But they're managing our email list a lot. Not completely. And there's a lot of collaboration where we're all working together on the copy and the concepts, angles, whatever that's in there. But that is one way that we're actually leveraging Other folks that know our voice, or at least they're directing things. They're connecting all the stuff that we would kind of would hinge on us, and it might even have our voice. Does have our voices on there, our names. Yeah. But also think about, like, podhacker and our membership, like, these things, they don't necessarily. They're not us, even though we're in there.

Well, and I think we're sort of methodically going down this route of what we create from here on out are not. I mean, we'll probably be the faces of it for maybe a window of time, but we're building them to be bigger than us. We're building them so that, like the POD Hacker brand that you just referenced, we haven't really talked a whole lot about that, and we're not going to talk a whole lot about it yet. But that POD hacker brand is literally a brand that is not going to be branded to our names. Right. There's a bigger play there that we're kind of working with. But yeah, I mean, building this platform, like, let's be honest, Hustle and Flowchart is probably not going to exist without us.

Right.

There's never just going to one day be new host. Then you get the. That art of charm effect where they kicked out Jordan Harbinger and then all of a sudden everybody stops listening to that and they go listen to the Jordan Harbinger show instead.

Right now his show is bigger than that old show.

Exactly. So likelihood Hustle and Flowchart is us.

Right.

You're never gonna have a Hustle and Flowchart with different hosts.

And we're cool with that. It's like we'll be the dancing bear all day long for the podcast. Yes.

But as we build this platform and as it gets bigger and bigger and more people listen and our sort of personal brands get larger, it is sort of our responsibility to use that platform, these larger personal brands, to shift attention to things that aren't our personal brand for sure.

And build assets on top of our platform. Yeah, and that's. Yeah, that's the thinking. That's why we're, you know, involved with the unicorn equity. Yes. You see our faces on there, but really as testimonials and in an animation, which is still kind of creepy. And I don't watch it just because I don't watch a lot of my own stuff too, because I'm like, ah, it's me. No, it's still. It's kind of funny. But unicorn equity exists in a way because we can inject our superpowers into that brand, but it's not relying on our names and it's definitely not us doing everything in that business. So, I mean, same goes with some of the other things we're involved in. Partnered up with members Pro and a few of these other folks that were partnered up with silently. That's an asset to us. And yeah, it's a cool way to. I like the way of thinking, knowing, like, cool, you could be you and attract the people, maybe know, like and trust phase right there. And then from there you can. You can take them to Assets, send them elsewhere, you know, you can keep doing your thing. Shoot. There was one other. I had an aha. That I completely wanted to talk about, but now I'm blanking.

Couple.

Shoot, man.

I am now. Well, the Rand Fishkin story I thought was amazing. Obviously crappy, but a lesson well learned, I'm sure. And hopefully many. I mean. Cause I heard it in a different form on another podcast. I was like, oh my God, this is so time. We gotta talk about that.

Yeah, it actually did bring back like a sort of emotional memory from when our company tried to get bought out and we decided to turn it down. Cause we thought all. All roads pointed up. Right. Everything looked. Looked like gravy right now, which is why they wanted to buy the company was because everything was looking great.

Right.

But we in that company, we went, nah, this company's going up and you're undervaluing it and it's going to be worth double that next year. So we'll sell it when it's worth double. Well, you never know what the future holds. 2008 was not kind to that company. And fuck.

I didn't mention on the podcast, but, like, Heather and her mom were in a very similar scenario, too. I mean, you know about it. I won't go into details because I don't think they really want that, but I will just say that they were presented with a. A buyer that definitely would have paid him a lot, and that didn't work out. And company basically. So it. It happens. And it's like, I just like the thing. It's like, okay, John said, one of those. One of those people that just show up, you know, there's a reason why they're showing up. You. You done something, created something, said something to catch the attention. It's probably a good reason to consider that. Yeah. That. That person or that company. And like he said, though, it's like, don't just go with that person or. But, like, that's your clue. Like, oh, I'm kind of hot right now. Maybe get a couple other, you know, options there, and there's probably a deal there.

Maybe.

I don't know. Not always, but either way, I'm happy with this conversation.

Yeah, no, it was a great conversation. And John was just a great guy. Like, I. Oh, yeah, he was just someone that was. I was instantly comfortable chatting with.

Right.

Like, you kind of, you know, you get some of those guests where you get them on, and you're like, I feel like I have talked to this guy before and I've known him forever. And then you have some guests where you're like, all right, we got to warm this one up a bit, you.

Know, but just jump right in, man.

With John, he was one of those guests where you just. I mean, at least for me, I felt like this guy's cool. Like, I feel like we've had conversations in the past and we've chatted on LinkedIn and stuff. That's how we initially got connected. But you're not. Not to any sort of depth like.

This, so I'm sure you'll hear more from John. But go check out his books. I mean they're, you know, there's built to sell. That's that first book. So that's more the building phase. The automatic customer shout out to Dan Ryan because he's the one that told us about that originally and is his favorite book because Dan Ryan wants his payment. There you go, Dan, your royalty. But go check out the automatic customer. So it's all about subscription businesses and growing the value. And then his newest book, the art of selling your business, winning strategies and secret hacks for exiting on top. And the website to go check out is builttocell.com selling yes sir. And you'll find that book there.

And I think that book should be out by the time this episode came out, I believe.

Correcto Mundo. Yeah. So what else we got? Get the notes. Get the notes. And they are actionable as all actionable items can be. So if you go to flowchartgroup.com flowchartgroup.com within two weeks, they're free. So if you made it this far, I'm pretty sure you're interested in them. You might have a page full of notes already. Well, guess what? Now you have another page for notes that probably covered other things that you didn't catch.

Four pages, probably three or four pages.

Yeah. Probably more than you took, I would bet. So flowchartgroup.com, make sure to plug in your email address. It's going to take you to Facebook, so don't get freaked out. Just make sure to plug in your email address and you'll get the notes. Yes, sir. Access to a cool community.

Yep. And this episode once again is sponsored by Easy Webinar bam, which is our favorite webinar tool. When we are running webinars, it does automated webinars, it does live webinars, it does hybrid webinars. You can do streaming stuff. The back end is like been getting refreshed and pretty ified. And it's a pretty badass platform. And like we've mentioned on past episodes, my daughter's been using it for school and as an alternative to Zoom. You know, we've done quite a few episodes lately on webinars and how to kind of crush it with webinars and can't recommend a better platform to go do it with than Easy Webinar. So go check out easywebinar.com hustle. He's hooking you up with a discount for Hustle and Flowchart listeners. So that is hustleandflowchart.com. nope. It is easywebinar.com hustle.

That is easywebinar.com Hustle. Make sure you put the slash hustle on there because that's going to get you your discount.

That's where you get the discount.

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