In this conversational advisory session, Speaker A guides McKenzie, the founder of a middle‑man apparel business that designs and outsources production for college organizations (fraternities, clubs) and other segments such as construction firms. The business currently generates about $100k in monthly revenue. McKenzie struggles with lead qualification and customer segmentation, unsure which accounts will deliver the highest lifetime value. Speaker A reframes the problem by emphasizing absolute profit per order as the North Star metric, illustrating the trade‑off between low‑margin, low‑volume “dud” customers and high‑margin, high‑volume “good” customers. They discuss that construction accounts can be roughly 25× more valuable than typical college accounts, and that scaling outreach to these high‑value segments could double revenue without additional operational work. The conversation culminates in a concrete growth target of $10‑20 million annual revenue, with advice to validate fast reorder behavior in new markets while preserving the existing operation.
Chapters
Once you have that, there's more than enough for you to get to $20 million a year. No question. And it's the same level of work for you. McKenzie.
Hey man, how's it going?
What's up? Monthly revenue is $100,000. Offer is apparel for colleges and college organizations. So like fraternities and stuff. Yep. All right. What's the model?
Basically, we handle the design side for all the apparel and then we outsource the manufacturing. And so we're just kind of acting as a middleman.
And then the constraint is too many unqualified leads.
Basically, it's very hard to segment between who we think is going to end up being a big customer with like a high lifetime value, AOV for the colleges is maybe like $1,200, $1,500. We have other customer segments that are spending way more per order per year.
So let's talk about those.
So we haven't really figured out the acquisition as much.
Okay. So what are those segments?
Construction is a big one. With those, I kind of run into the same issue because, you know, I might reach out to 2 construction companies. One of them, they don't order like any apparel. And then another one orders like, you know, $50,000 a year.
Okay. Well, construction seems like on average they're worth like 25 times more or something like that. That sound close to right?
Yeah, I'm still just trying to figure out how to know.
I just want to reframe it a little bit for you. So if you have some like duds and some good ones, but they're worth 25 times more than I'd rather just do the duds and good ones play with in general people that are worth 25 times more. So if we have, you know, 50 shirts with, you know, 50% margins versus 5,000 shirts with 20% margins, we'd still rather have 5,000 shirts because you're a middleman anyways.
Yeah, it doesn't take any more work.
Right. So like, right. We just have to look at absolute profit per order. And then I would just like that's, that should be like North Star. You could for sure double outreach and the business would probably double. But if you're like, I want to get to, you know, $20 million a year or something like that, I don't know what are your goals? I should have asked that earlier. What are your goals?
That's my goal. I'm trying to get to like $10, $20.
I would do the other thing that's bigger. Like if you were like, there were 3 times as much, I'd be like, screw it, dude. Just do more of the college thing. When you said $50,000 in order versus $1,500, like that is a very big difference and it's the same level of work for you. Just don't burn down the existing business. Have your operator still run it, make sure it's still good. The things that you want to make sure that you— like, what are the things you want to validate for the new market is you want to make sure as fast as possible that they reorder.
