A Step-By-Step Breakdown Of Our New Business

Boom. Welcome back to another episode of the Espresso Hour, where the running joke is, this is going to be shorter than an hour because we are once again hyped up on caffeine. And I'm glad to be back. Cole. This is going to be the last Espresso Hour we have outside our new studio, which I'm pretty fired up for. We get the keys today, 4 o'. Clock. You want to talk a little bit about what we got going on there?

Yeah. The first episode is going to be probably pretty budget. It might. It might just be you and I sitting on the floor with a camera and our bottles of Mountain Valley water. But, yeah, I think, you know, the. The spark notes is we. We closed on a studio office space here in Miami, and we're gonna be building that out over the next month, month and a half, and hopefully with each episode, podcast episode, we see the studio come more and more to life. That's the goal.

Yeah, I think our first one, we're probably due next Friday, sitting on the floor without any podcast equipment, just straight up from the camera. But I'm excited to document that entire process because we're going to build that into a space that we love to visit, work out of, film record, invite people to hang out. And it's also a bonus that it's basically in the basement or the ground floor of my apartment building, so could not be a better commute than the one we're about to set up. So we're working with Kevin Shen in that agency. Designer studio. Designer Dream studio. Is that the name of it? I know he set up a bunch of other people, so I'm excited. I'm excited to have a big ship in the back of whatever we do. I don't know what else we're going to put in there. Definitely an espresso machine. Def. We can actually do the. We can get the full mountain valley, like 10 gallon things, and we should just have it on tap, you know, so I can have. My apartment is literally a graveyard with these Mountain Valley bottles. I have my own little corner where I put all of them, so. But I miss you, man. It's been four weeks since we recorded, Had a lot of travel, a lot of life, ups and downs. But I'm glad to be back in our swing and very excited for where we're going to take this pod, especially as we get the studio going.

Yeah, same. I think, you know, we've already been brainstorming some really cool topics, new things that we can talk about. I think it's kind of been a natural progression that this pod has taken more of a focus on business. You know, so much of what we write about and talk about is often on the writing side, and we still talk about it here. But I think a lot of what we talk through and where we've been hearing people get the most out of this is talking through how we think about building these digital education businesses and all the decisions that go into it. And that's sort of, I guess, a nice segue of what we wanted to jam on today and share, which is how we've set up, you know, now that our premium ghostwriting academy is up and running, we've created a very simple funnel, I guess you could call it a very simple book, a call funnel for that business in that vertical.

So.

So walking through how that works, I think would be really cool. And then also just bottleneck analysis. Like, Dickie, ever since you did that, you know, you did that internally for us, and you recorded that loom and you sent it, and I watched it, like, I can't stop thinking about it because the clarity of thought is so rare. Like, whenever I talk to people about business, I very rarely come across someone who speaks, you know, instead of in overarching. Just like, this is hard, or this will work, or this won't hurt. Like, being very meticulous about how you're thinking through each problem and solution. I think that's something you do really well. So maybe we start with how the book a call funnel works, and then sort of work and then, you know, move into, okay, great, we have this thing set up. How do we do the bottleneck analysis all the way down the chain to figure out what we need to iterate on next.

Yes. So it's probably worth starting. I think it's two episodes ago, we filmed the Cabo Mastermind takeaways. So it was. We were in Cabo at the end of April. Right. Beginning of May. And then we did our takeaways there. And what was our overarching takeaway? That the bottleneck of our business taking the next 2 to 3x was that the product we wanted to sell was not for sale. Highest level bottleneck, very easy. Everything else becomes a different decision if that was up and running. So we spent all of May in Monk mode building that out. And then we recorded another episode that. It's so funny to look back on that one, because we were both like, wow, that was a lot during three weeks. We probably shouldn't be talking on video recording this right now. Like, we're exhausted and. But some of our best stuff came from that. And I do like listening back to those frameworks. Well, so it June will be our second best month ever outside of December of 22, which we've seen as a seasonal business. People invest in themselves at the end of the year. So I think that it's worth just comparing ourselves to last June and the June before. And we've taken significant steps. So that was the bottleneck. Then we solved that bottleneck from a macro perspective and then really spent most of June iterating individual bottlenecks within that thing. Right. So your business at any time has kind of a macro bottleneck. And then within. So for us that was. It wasn't for sale. And then once it's for sale, when you take something from 0 to 1 now you're iterating individual parts of it. So what is keeping that new thing from growing? And I think we spent most of June doing that. We're probably going to spend a good chunk of July doing that as well. But also we've found the new bottleneck to the next level of the business which is launching our backend mastermind that helps people scale their ghostwriting agency. So I don't know, we can start on the booker call funnel. But I like painting the full picture of like we're going to talk the minutia of iterating something. But for the most part, business bottlenecks are you don't have a certain thing for sale and then once that is for sale, it's build and then iterate. So I've talked a little about, I don't remember the exact breakdown of the framework I called it, but you basically are surveying to figure out what the bottleneck is. So whether that's macro or micro. For us it was macro then. Now it's been like surgically improving the thing we already built. You inhale information to go and solve that and then you iterate. So I think I called it identify, inhale iterate, which is I identify what the bottleneck is. I inhale as much information as I can about the numbers. What actually is that bottleneck? Why is it happening? How could we solve it? Who has solved it? Where could I learn more about the best ways to solve it? And then you just iterate on those things as you put them into practice. And that's kind of the whole business flywheel that we've generated.

Yeah, something on the macro bottleneck because. So just I guess to really crystallize this. So in February, March ish, when we were Talking through this, you know, we had Ship 30 as a business, and then we had a couple little ancillary products. You know, we did a paid webinar. We have like these other little ways that we generated revenue. And when you're myopic about this is what my business is currently, your mindset is how do I iterate within what currently exists? So the conversations we were having in February and March was like, you know, we have ship 30. How do we make ship 30, you know, more profitable or get more people or whatever the incremental thing was inside ship 30? And then it wasn't until we started having more macro conversations that you start to ask the question, well, is the real bottleneck inside ship 30 or is the real bottleneck that we don't have something more expensive for sale? And as soon as you realize that the thing to solve for isn't making the current thing better, it's, I need the next thing, which means at a cost, not improving the current thing so that you can build the next thing. And I was just having the same conversation with another writer creator, and he was walking me through his business and how he makes money. And it was so apparent to me where I'm like, wow, you have this giant audience, you have this giant email list, and the most expensive thing you have for sale is a hundred bucks. Like, what's the fastest way of doubling your monthly revenue? Well, you. Yeah, you can incrementally improve this product, or you could just have something for $1,000 for sale because chances are you have a lot of people that bought your a hundred dollar product that are like, I want to give you more money. I just, you don't have anything for sale. And that's the problem to solve. And so it's this careful barbell of when are you incrementally improving something that currently exists. We improved ship 30 for, you know, two years because we saw, okay, there's. We can push this further, we can grow this more. But eventually you reach a point where the effort to grow the current thing is very high versus you can just double revenue by creating the next thing that is more expensive. You're hitting a different part of the buying curve. So you go from I have $100 product to I have $100 product and $1,000 product, you know, to I have $100 product, $1,000 product, and a $10,000 product. And there's always going to be people, there's always going to be customers that bought the thing you already have and are sitting there going I want to give you more money. You literally just don't have anything for sale. I don't have, I don't have the next thing to buy. So I think from a macro perspective, that's a really important thing to keep in mind.

Yeah, I think the important realization we've come to is it took us two years of iterating just ship 30 to recognize that the marginal return on that additional effort was no longer as high as deploying it to a new product. And I would way rather, and I think this is what most people should do is over tilt on spending too much time improving the quality of a product, improving the marketing system of a product where they tap into the marginal return not being there, rather than going and jumping to something new. Like it took us two years to realize that it probably takes about two years or a year and a half of continuous improvement of one thing until you've actually reached that point. But if I were to break that down into an actionable framework, it would be the goal is to optimize your units of effort that will lead to the most increase of revenue that is sustainable over a yearly basis. So rather than if someone hears this and it's like, oh, I need to go launch 10 new things, yeah, you could probably squeeze your list and tap a bunch of the equity you've built up to maximize some short term revenue. But instead it's, I've squeezed all the juice out of this one product. Now it's the marginal return is not there. I need to go launch something new. That is a kind of an art. But if you can think, okay, is this going to, what is this going to do over the next year? Then you'll probably have a better decision making framework because that's exactly what we used of like, sure, we could continue to improve ship 30 in the marketing system and funnels and everything there. Or we deploy that same effort, start something brand new, sprint on it for two months to have it up and running. And now we make decisions in a completely different way in terms of resource allocation because now we're iterating two things and the marginal effort of iterating the newer thing is again still higher. Right. And we might run into a new bottleneck over the next couple of weeks where we've actually iterated for the most part on this new system. We've just gotten better at identifying and going 0 to 1 and building those systems quickly where we might have a new bottleneck which is launching our, our mastermind. So I like painting that picture of if someone's listening to this, like, does that mean I should launch something new? I think the question to ask is what is the marginal return over the next year of spending 50 hours on this thing or that other thing and if that should inform the macro bottleneck of your business overall?

Yeah, I think it'll make this really tangible. Walking through our, how we have PGA set up and it's worth and our book a call funnel and it's worth I think, pointing out that, you know, what we could have done is after running ship 30 for two years, we, you know, we knew and had gotten very good at a cohort based business. The, the logical next step for most people would have been like, let me just do another cohort based business and then try and run both, you know, and I think part of the, the growth process for us was as we were confronted with that decision of what's the next thing we're going to do. Part of it is understanding that in order to grow you might have to do something that you haven't done before. You know, so, so PGA is very different than ship 30. It's evergreen, it's not cohort based. It's high ticket. Whereas, you know, relative to PGA, ship 30 is more low ticket. There's a lot of, even the sales process is different. Like ship 30, we don't use salespeople. It's more of content and email marketing. PGA is almost exclusively sales driven. You know, it's all about booking calls and having conversations as opposed to selling people via email or like with a tweet. So we had to not only identify, you know, this is the next new vehicle, but then we had to go acquire the skills. So we inhaled, we paid for this mastermind. We learned, you know, we were like, okay, these are, this is a whole new skill set that we need to build. And then we go create the program. And now it's, now it's up, you know, now you could say it's like, okay, it's 80 built, 85% built. Now it's, we're back at the beginning of the ship journey or ship 30 journey, which is okay, now we go through that period of iteration again, you know, and, and how much can we maximize this before completely needing to go do something different? And I think it's worth like one of the cool, worth pointing out that one of the cool compoundings of, you know, education, like digital air type businesses and is that Dickie, we will never start from zero again. We have, we've put in years of building an organic audience. We've put in or we've built years of trust of people that went through ship 30. We've built email lists, we've built like, we've built all these assets where each new thing that we go to build is on top of all of the things that we've done before. So that's also a cool thing. You don't realize in the first year or two is you're never starting from zero again. Which, which is why PGA got stood up in like 60 days. Right. Versus chip 30. It took, you know, at least like six months to really feel like, oh, okay, we've got our bearings.

Yeah, you're tapping into a bunch of pre built equity. Right. You're scraping a dividend off the top because you've been putting in a ton of effort. And I think CIA walking through the full booker call. Well, before that, I think, yes, what you said about potentially doing a cohort, another cohort based business would be, that'd be the comfortable choice because we knew how to do that. But I think for us, we're always in that mode of how can I grow, how can I learn a new skill? And my framework for starting anything new is what's the worst case if this doesn't work out at all? Well, we would learn how to operate a sales team, how to operate a fulfillment team. And I'll tell you, just from three months of running this, the power of having a daily feedback loop business is 100 times higher than a quarter. Literally. Going from a quarterly business with Ship 30, where we run one cohort per quarter every day, you don't get to relive that day in the marketing cycle until 90 days from then. Whereas in PGA, we relive every day in the sales cycle on a weekly basis, every single week. It's so it's. We get to iterate 13 times faster. Okay, so you know Nikita Beer, the. He created that new app called Gas and he had the old one that was some kind of social app where they go and launch it on college campuses. He was saying that their feedback loop was hourly where they were looking at new users acquired per hour on each of these different campuses. And I'm like, okay, so there is a, there's a faster feedback loop than we've even thought about tapping into. But I, and I feel it like, I imagine that his iteration cycles of building that the reason he was able to build it to like a couple million in revenue in like a couple weeks from a basically cold start was the speed of that feedback loop. And I'm constantly thinking, and this leads perfectly into the book. Call funnel is how can we turn it into a daily feedback loop, which is what are the numbers on a daily basis that if we optimize, are going to improve the entire system. So you want to give the high level overview of the email course and I'll dig into some of the specifics around where I think some of the bottlenecks are and, or really where the bottleneck is and how we're going about fixing it.

Yeah. So it's kind of interesting. I'm going to, I'm going to explain our book, A call funnel in reverse, speaking in bottlenecks, because I think that'll help people a lot. So high ticket program. What's the high, what's the bottleneck of selling a high ticket program? You need to book calls with prospects. You don't sell that with a tweet.

Right.

You got to get on the phone with them. So you need to book calls. What's the bottleneck on booking calls? Well, you need to make sure that you're talking to the right people. So you need a survey. So you're not spending eight hours a day talking to people that would never actually convert and want to buy and be part of this thing. Right. What's the bottleneck on getting people to fill out the survey? Well, we just need to get in front of a lot of people to tell them fill out the survey. So how do we attract a high, you know, top of funnel, a ton of people to get them to fill out the survey, to then find the right ones to then hop on the phone with? Well, we need to give them something for free, free education. So we put together an educational email course on ghostwriting. Super high funnel. These, these are the mistakes that most ghostwriters make. This is what's holding you back from landing a high ticket client. Here you go. We demonstrate our expertise and then what's the bottleneck on getting people into that educational email course? It's writing about it on social platforms and saying, hey, here, I'm giving you away this thing for free. So it's worth explaining the book A call funnel in reverse so that people really understand each one of these things isn't just, oh, I have an email capture. Oh, I have a landing page. No, each one of these things is solving the next bottleneck down, keeping you from the ultimate goal, which is how do you get people in the program? So to say it, from the beginning, it's, I write on Twitter about ghostwriting. What I know about ghostwriting. How to land high ticket clients as a ghostwriter, how to how I built a ghostwriting agency, et cetera. I go, I can help you with this free educational email course. Here's the mistakes you need to solve. At the end of the educational email course, I say, hey, if I've demonstrated my expertise to you and you want me to be your mentor and you want help, fill out this survey. If when they fill out the survey they show this would be someone that we can help get, encourage them to book a call. When they book a call, explain to them here's the all the ways we can help and here's what this program entails and here's how it works. And that's literally it. There's no other bells and whistles. That is the entire funnel that is powering our whole new vertical and business. And I love the simplicity of that because it's something that a lot of people over complicate this so much. And you don't have to over complicate it. It's just these very simple steps that each one is solving a different bottleneck to getting people in the program.

It's very linear. And one thing we didn't touch on was just the close rate of people who get on sales calls with us who joined the program. So though the entire business is built on those key metrics you have working in reverse, like you said, you have the close rate of the people who get on the phone to learn more about the program. You have the number of calls of qualified people getting on the phone. You have the number of applications that we then invite people to book a call after filling out that application. We have the number of people who see the application which are in our case our email course subscribers. And then we have the number of people who see the email course which our proxy is number of views on ghostwriting related social content. So you can look at each of those metrics and that is the entire business right there in a spreadsheet on numbers. So then you look at each of those and you start to create some ratios where we have a close ratio which is the number of booked calls to the number of people who enroll when that is. And so really you look at ratios across all these numbers and say which one of these are not at KPI KPI, you know, yeah, it means key performance indicator. But basically the minimum number that is going to allow you to scale that. If you kept that number and changed everything else and improved, that will not limit you in any way. So you have a close rate that you're trying to get to that we've already hit. Then you go one level up and you say, okay, we actually did not book enough calls this week. That is now the bottleneck. How do we solve that downstream bottleneck? Well, anything upstream can impact that downstream metric, right? So all of the different ways that we could book more calls would be improving any of the metrics above that. So we sat down and said, let's get the numbers on all of those. So going upstream, it's how do we get more calls? We get more applications. And then there's a ratio of the number of applications to the number of book calls. Then I can go one level up, which is we need more applications. How do we do that? We need more people in the email course. And there's a ratio there. What percentage of people are filling out the application who joined the email course. And then go up one level. We need more people to see the, to join the email course. How do we do that? We create more social content. So then there's a ratio of new subscribers per amount of social content. And then you can ramp all those up. And so we put those in a spreadsheet and I looked at them and said, well, it's very clear that the bottleneck was not the close rate because that's a KPI. It's not the application rate where per every email core subscriber, they the amount that fill out an application is solid. The number of people joining our email course, we know how to improve. But you could see how if we were to 10x something upstream of number of email core subscribers, but everything downstream was broken, the business would not improve. Right. If you have a 1% close rate, just to put a like an extreme on it, it doesn't matter if you get a hundred thousand people in the email course because they're not going to eventually join the program. So it's worth optimizing those downstream numbers before given we know exactly the levers to pull to get more social content there or to get more people in the email course. There are a million different ways that we could go and do that. So in evaluating our funnel ourselves, we saw that half the people who filled out an application weren't booking a call to hear more about the program. And that was for a bunch of different reasons. But this is where it gets fun, is it becomes almost meta analysis, right? We identify that bottleneck and we say, all right, we found the bottleneck, great. Nothing else needs to change. And that takes discipline. That takes discipline to sit down and say, hey, there are other things we could do to improve the close rate or improve the application rate or get more content, but none of that matters. And, and the return on our efforts will be not nearly as high as if we fixed this one bottleneck. So we identified it. It's everyone who all our problems get taken care of if everyone who fills out an application books are called to join and that number was not at 100%. So what are all the ways we could do? So we created a long list of how do you solve that one bottleneck? And then we stack rank that prioritized it and now we're knocking that out and all of our focus is on identifying. We already identified it, we inhaled information about how to fix it and now we make a stack rank list of priorities and say nothing else matters except the most important thing that will fix the most important bottleneck. And we're going to solve that, we're going to solve that, we're going to solve that, we're going to come back in a week and the whole system needs to be reevaluated. Right. Because when you fix one bottleneck, what more than likely happens, another bottleneck becomes painfully obvious. Then you go and fix that one. And so you can only work on one bottleneck at a time. That's what I love so much about this whole game is all of your other, all of your other efforts are by definition a waste of time if you are not working on the highest leverage way to fix the single bottleneck in whatever your business is. And the beautiful part, and this is where I want to take espresso are in the future is taking other people's digital businesses, identifying this kind of numerical value chain, getting them to submit their numbers to us and we say oh yeah, there's your bottleneck right there. You just should do. And we could publicly brainstorm all the different ways they could fix it. So that's a long spiel of bottleneck thinking. But this is where I have the most fun in business is this kind of analysis.

Yeah. The reason I love this so much is because as, as a, a creative minded person and I tend to have, you know, lots of friends and, and people that like to have creative conversations. This level of thinking is very, very hard for a lot of people because it requires precision, it requires you to slow down and, and really understand what are you saying? What are you talking about? You can't just say I want to grow my business or I need to do more marketing. Like when you understand bottleneck analysis, you realize that those Phrases don't actually mean anything because they don't know what they're pointing at. And I think circling back to where this started on a macro level, you know, talking about those ratios, really, when you do this bottleneck analysis, what I've loved and what I've really learned from you, Dickie, is it's like you present all these options, and then you ask yourself the question, which one of these ratios is the hardest to double? Which one of these ratios is the easiest to double? And then you ignore the ones that are hard to double, and you focus on the one that is easiest to double. And when we were doing this for pga, for example, it's like, do we know how to double the number of people who opt in for our educational email course? Yes. But is it a lot easier to just double the number of people who have already filled out applications and are qualified and just need to book calls? Yes. So the. And then this is where you start getting into the personal development side of business. If you're really good at driving traffic, if you're really good at writing Twitter threads or you understand the social game, and you're like, I know how to drive email subscribers. Even if you do this bottleneck analysis and you know that the real bottleneck is the doubling of people filling out apps to booking calls, you're still going to default to the wrong bottleneck, because what's comfortable is driving the traffic, because you know how to do that. And so that's. That's like the. The inner work process to me of the business game is it's one thing to know the answer and to know what to do. It's another thing to then fight the urge to do what's comfortable. And the rash and the rationalization that, oh, no, no, no, that that would also fix my business. It's like, yeah, maybe, but you're picking it for the wrong reason. You're picking it because it's comfortable. You're not picking it because it's the right thing to do.

I am very excited to keep talking about all of this for a long time on this podcast. So if I was going to turn this into a concise, actionable framework is you should be able to reverse engineer the sale of your product to someone hearing about you for the first time in a series of steps. Each of those steps you should be able to quantify with a ratio to some number before it, right? If you end up with one buyer and 100 people that know about the product or know about you, there are different ratios as that person goes all the way down. Like just to paint a landing page example for an E commerce product, it would be number of people who see your ad, number of people who click on your ad, number of people who then go to your fill out whatever it is you're offering for free on the ad, number of people who download your free thing that end up buying. And then for E Commerce you could even say like return buyers or average cart value. Right? You could put all of those. And then I liked your point on the doubling, but it's also just you should be able to talk to other people in your industry and say what is an acceptable number here? And you want to look at whatever ratio is the furthest from that acceptable number. Because if other businesses can get to an acceptable number, so can you. So that's rather than which one can you double? It's which one am I furthest out? And for the most part everyone's going to be staring at one metric that's like, oh, I never even understood that. That's where everything breaks down. And if you can fix that and have the discipline to put all your efforts there despite and you leave everything else on maintenance. And we learned this in Monk mode. It's like just because you, where you don't want to go is I'm going to put all my efforts here and I'm going to stop even doing anything marketing or anything like all that has to maintain. But all of your new deep work, additional effort has to go to that one single thing to solve that one single bottleneck. And so maybe we make this a little bit of like a game where you can comment and leave a reply with the different steps of your entire process and we can start to talk about some of them. Maybe we could do it in public on Twitter if people wanted to submit their numbers or something like that, where we could do these public consultations. Because this is the most fun I have by far in this whole game is looking at all these. And just the same way that I see you sit down and write 2,000 words without even stopping for one second, your fingers moving on the keyboard, you see me get to do this. And that's why I like working with you because our strengths are complementary and that we both look at some of the things like we, we do and go, I don't know how on earth you did that, but I'm glad you were able to because now I know like we can put. I feel that way all the time. So a lot we want to do. If you have a idea for how we could do that. Leave a comment, send us a dm because there's a lot we could do here. Every single business can be broken down into this simple linear formula. And once you look at those numbers, it was just so you will. I've never been more frustrated than when I just saw that number. I was like, oh, I know exactly what I need to do. And, like, spent the last four weeks kind of like, oh, why isn't this working? And now I look at every other business that we've ever done, like, should just do that same analysis and then you repeat and you repeat and that's the whole game.

I wish we were recording for another like three hours. I have so many ideas on this topic, but next time in the studio sitting on the ground with the camera, we'll just pick it up there.

Yes. So thanks everyone for tuning in. If you're listening on YouTube, do us a huge favor. Toss us a like hit. Subscribe. Leave us a comment with your three biggest takeaways so we know that you're putting these into practice. You're letting us know what things resonate. If you're on Spotify or Apple podcasts, if you could leave us a five star review and share this episode with a friend, tag us on Twitter, tag us on Instagram, let us know exactly what you're taking away from this. And that's how other people find out about the show, about the podcast. If you have ideas, of course, send it via Twitter dm and that's it. We will be in our official Shipyard V1 studio next week, probably recording from the ground. We're going to be building that, documenting it. So if you have any questions or ideas for things you'd like us to share as we build out our production studio, leave a comment and let us know there. But that's all we got for this week. I'll see everyone back here next week. That's all we got. Have a good one, y'. All.