How to start a business

What's up guys? I had a lot of notes written for this, but I think I'm gonna go mostly raw and I'm gonna check back once in a while, but this is gonna come from the heart. So this is gonna be one of those business videos, or just one of those videos on YouTube that's either going to have a few thousand views, like 5,000 views, and it's a golden gem that it's— if you know, you know, and you'll be watching this and learning a lot from it. Or it's gonna be one of those videos that gets a few thousand views initially, then it resurfaces 5 to 10 years later and it now has close to a million views. And it's like, wow, like this was golden gem back in the day and it still is a gem and it's one of these OG videos. So time will tell, but either way, I'm gonna drop a lot of value and sauce in this video. My goal is to help people that were like me a few years ago. I was very lost. I was trying to run businesses, but to be honest, I really didn't know how. I didn't know where to start. I didn't understand a lot of fundamentals that are crucial in building a business. And so this video will start out pretty basic. I'm gonna just literally go the most basic parts of business, and it's gonna ramp up quickly. So if you're someone that's more advanced, maybe you have your own company, I'm going to get to the good sauce. Um, but I'm gonna start in the beginning. So don't think it's just a beginner's course. It's for beginners, but also for people that are further along is my goal here. So the farther in the video, the more advanced we're gonna get. Let's begin. I was gonna clap, but also I'm not gonna edit this video. I'm just going to upload it completely raw. So there might be parts where I'm just like, wait, ignore what I just said 30 seconds ago, that doesn't make sense. There might be parts where I completely stop for 2 minutes and scroll through my notes. I don't care. I'm not doing this till I get any better. I'm just trying to help people. And if I wanted to make it really retentive and engaging, I would add in all these cuts and, you know, try to make it fun. But this is just pure sauce that I'm delivering to you guys. I've honestly been procrastinating this video for far too long, and I've just, you know, told myself every day I don't post this, another person is going to not get or not start the business that they were meant to. So let's begin. So what is a business? A business is very simple. You just need a product to sell and you need to sell it. If you have that, congratulations, you have a business. And a product can be anything. It could be physical like this seltzer. It could be digital like a SaaS product or like an app on your phone. Software. It could even be information. You could sell things like a course. Like, a lot of people would record a video like I'm doing and sell it. I'm not selling it. I'm just giving it to you guys. You're welcome. You could even sell your time. So this is like service-based things. You go there, you tutor someone for an hour. You could sell anything. Anything could be the product. And It's just something that you could exchange for money, something that has some sort of value. You could sell rocks on the street. Pet Rock did it. This massive company. I don't know if they were just a few million or a billion, but massive. Okay, the next step is to actually sell it. So once you have your product, the next step is getting people to buy it. You could do this in all kinds of ways. It really comes down to— I mean, You just need to generate the demand for your product, essentially. So you could walk around to everyone on the street and try to pitch them your product one by one in New York City. And that's obviously not super efficient. You're not gonna scale like that, but you can do it, and that's still a business. A lot of people, like the people that sell stuff on the street, I mean, I guess that's what they're doing. It's a business. Mm, you can sell online. So you could do social media advertising where it's like paying for ads on Instagram. You could pay influencers to talk about your product. You could post organically. There are endless ways for you to advertise. You could have a blimp go overhead and write out the name of your company. Your goal is just to generate attention and generate demand for your product. It's to make people want to buy. Okay, make people want to buy. That's all you want to do. That's the point of selling something. And I'm not gonna go down each rabbit hole because every single small, like, every sub-niche of what I'm talking about, it's super complex. So if you want to learn how to run Facebook ads, you think that's the best method to sell your product, you should go and learn that. I'm not gonna teach you guys because that would take a whole different video, multiple hours to do, but you're gonna have to go do the research. I'm just breaking down more of the high-level steps to running business. Okay, next, and it's gonna get more low-level as we continue, so bear with me if you're more advanced. So now that you have a product and you're figuring out how to sell it, or you have a marketing channel, you are selling it, you have a business, congrats, but What separates a good business from a bad business is if it's profitable. And so what you need to do is have an LTV that is greater than your CAC. This is the LTV/CAC ratio. It is fundamental to business, and a lot of people don't understand it. So what your LTV is, is the lifetime value of your product that you're selling. So this could be measured over different time horizons, But essentially, it's the amount of money a single customer who buys your product once will spend in their lifetime. Some brands measure over a year, some brands measure over 3 years, some brands measure it over a few months only. But let's say this seltzer bottle is— I paid $10 for it, and let's say I buy 10 a year, and let's say we're measuring LTV in a 1-year increment, then my LTV would be $100. And if the brand spent less than $100 to get me to buy it, that's profitable. If they had to spend more than $100 to get me to buy this $100 bottle, they lost money. It was unprofitable. And you would actually be surprised, you have to spend a lot more money to acquire customers than you think. Seems counterintuitive. I mean, you're trying to get them to buy from you, but really you're paying them to buy you, or you're not paying them, but you're paying for the customers. You're not paying them directly, each individual person. No one's giving me $80 for me to exchange for $100, but you're paying either the social media algorithms $80 so they get you a $100 sale, or you're spending your time— because time is money— on the New York City street walking around pitching people one by one. That costs money. Or you're paying an influencer to talk about it. So you're paying for customers directly. And if your LTV is greater than your CAC, good job, you're doing something right. Something to keep in mind is it's actually your LTV needs to be greater than your CAC, your customer— but I guess I didn't define it. LTV is lifetime value, CAC is customer acquisition cost. By the way, if I ever just go past something and you're confused, there's a good chance I explain it later in the video, so I would go look into that. But CAC is the customer acquisition cost, the cost to get me to buy something from you. And the ratio is actually your LTV needs to be greater than the CAC plus the cost of the good. So if they spent $80 to get me to buy $100 LTV product, but this product cost them $5 to make, then that would actually be unprofitable because it would be 10 bottles of $50 total. Maybe this only cost them a dollar to make. Then the total of all the 10 bottles I bought would only be $10 cost of goods. So they would profit $10. So it would be $80 they spent to get me interested. Maybe it was on ads or billboard I saw. Then the 10 bottles cost them $10. And that adds up to 90, and 90 is greater— or it's less than the $100 that I would spend over that year with this company. So it's profitable for them and a good deal. So achieving this ratio of LTV to CAC is crucial for any business. If you're not profitable, then you're not really gonna go anywhere. There are some models— like, you might be asking, oh, but Snapchat, they haven't been profitable in years. Spotify, they're not profitable. All these big tech giants that are billion-dollar companies are not profitable. They have a whole different model where their goal is basically just keep raising money, raising money, raising money, and their goal is to take the entire market. They are willing to unprofitably acquire customers with the goal that they will eventually own the entire market and customers will depend on them for the service. And then later down the line they'll either raise prices or offer other products that will boost the LTV, and then they'll become profitable later on. That's a big strategy, but I'm gonna focus on being profitable from the start and building, because that's really for building like the massive giant companies, which, you know, there are very few of those in each generation that are built. I want to teach you guys how to build any company that could generate from $10,000 to $100,000 to $1 million a month not a year, a month or more. Cal AI, we just did $5.7 million in January. And so I'm focusing on that, not the venture capital route. I've never raised money. And by the way, I guess I never really introduced myself, which I guess makes this more of like a hidden gem for if you know, you know, but I'm 19 right now. I I built, my freshman year of high school, I built an unblocked gaming website that let students play games in school unblocked, grew it to 5 million users, was making $60K a year, sold it for $100,000 when I was 16. Then I built an app called Calii where you could track your calories just by taking a picture of your food, grew that to, I don't even know the revenue we've done today, maybe somewhere between $30 and $50 million, and it's only been 2 years. And just last month, January, we did $5.7 million over the whole month. That was our best month ever yet, and we're still growing. So that's my ethos. I want to character build there. And I'm just getting started, by the way, my entrepreneurial journey. You guys, you know, a lot more to come. Okay, so let's say your LTV is greater than your CAC. And plus your cost of goods. That's good, but you want to make sure that your product is scalable. It's profitable, that's good, but needs to be scalable. If you're selling your time for money, sure, that might be profitable, but it's not really scalable if you're tutoring kids one-on-one with their math homework. So you have to figure out a business model that will work. You could adapt business models. So let's say instead of you teaching, you hire other people that teach for you. And we'll get into the employees later, that's a later section, that becomes a more scalable model. So that's making the product scalable. You want to build something that you can sell as many units of as possible. So software is really scalable. That's a great thing. Let's say you have a store. That is something that's harder to scale. You can build it out into a chain. It's a logistical nightmare having a ton of stores, so it's harder to scale than software. But everything, everything is kind of, um, has a different difficulty of how scalable it is. Just like a product can be scalable to different extents, the marketing channel also. So like we mentioned, going up to people in the New York City street, not scalable. You can maybe scale it by hiring a ton of people to walk around. Still, like, you're not getting a good bang for your buck. What is really scalable, probably the most scalable thing, is social media platforms because their users have— because they have billions of users on them. And then there's all the in-betweens, like working with influencers. That's scalable, but depending on your niche, it's only scalable to however many influencers are really in the niche. Of the audience you're selling to. And so it's not as scalable as something like paid ads, um, social media ads, where these algorithms are trained to literally go out and find each customer. They're so data-driven that they just know the pockets that each potential purchaser is hiding. So you have to keep that in mind. You want the way that you market and the product you're selling to be scalable. Hmm, so posting social media content yourself is something that it can be scaled up. You could build a team that helps you post. It is something that's really easy to get into because you could post organic content for completely free, $0, and And for people that don't have much money to spend on marketing, I always suggest that you post organically. That's the best way. It's a skill. It's really a big skill to learn how to go viral organically. So go learn it. It's a very learnable skill, but it is a skill. And then once you get money, you could look into other channels. There's TV ads, like there are so many channels that you can market on. The sky is the limit. Each one has pros and cons. Some are more scalable than others. Some have a higher ROI than others. For example, at the early days of Call AI, our influencers were super, super profitable, had a great ROI. Because we were the first app of our kind really in the space to hit the market. And nobody had heard of it before. So each influencer that posted, especially ones in the bodybuilding niche, their audience was so directly close to calorie tracking that they saw what the app did and they were like, wow, I want to get that. Big proportion of them went and purchased and we were getting a much better return than we would have gotten on something like paid ads and social media. So there are trade-offs. At this point, we have worked with so many influencers that we have definitely seen a decrease in return on investment because it's out there, like the name Kalei is out there. The same influencers, their audiences see it over and over and over again. So every time they see it, It's a smaller return. Okay, so at this point you should have a product and you should be marketing it and it should be scalable and profitable. I'm gonna do a section on coming up with ideas later, so keep that in mind. Let me actually write that. Cuz that's a big thing. I just posted on my Instagram story. Let me know if you guys have any questions you want me to go over. I'm making a video to help people with business, and a big thing was coming up with ideas. So I have a whole rant on that. But the whole point of having a business is to not— okay, I wrote this down, whatever. The whole point of having a business, you don't want to work for the business, you want the business to work for you. That's the whole point. Otherwise, you just have a job and no one wants that. So how do you make it work for you? Employees, employees. And this is a huge thing. Employees, you know, the CEO's job often just becomes interviewing new employees like 90% of time or like a majority. I don't know about 90%, but a majority of their time is just interviewing new people, maintaining the culture. It's super important. And I'm also writing down, I'm gonna do a section on co-founders later too. Okay. So employees. Essentially, you will want to start delegating every single task that the company needs on repeat to employees. So let's say, let's say you're building an app, right? I'm gonna use Building apps is an example because that's a space I'm really familiar with. For Call.ai, I initially programmed it myself along with one of my co-founders, Henry. Very quickly, we hired developers to come on. And Henry still stayed, he stayed as the CTO, so he still programmed, but I delegated my coding responsibilities off to an employee. And then I spent my time, my extra time focused on marketing. I was specifically reaching out to influencers, negotiating deals, having— reviewing posts and helping them get them up. That was consuming all of my time. Brought on an employee and delegated that to him. So then I was freed up again. And then I decided, okay, marketing's good, programming's good. Obviously you have to have oversight and maintain quality control, but that's kind of about finding the right employees. And so then I spent my time really heavily on product and coming up with new features. And then I eventually brought on a product guy to do that. So it's kind of always about looking and analyzing at yourself. Where am I spending most of my time? And then you want to bring someone on and delegate that for you. That's the— that's a good approach for, you know, early on. You usually have to wear multiple hats. If you're starting a company and you're more experienced, maybe from the jump you're just like, okay, I know I need 2 developers, 1 designer, 1 product guy, 1 this, 1 that, and you just piece them together immediately. But if you're just getting started and you're starting small, then often like you'll just have to do the work yourself and then eventually replace yourself. So how do you find good employees? There are a few good ways. Referrals from your network, so hitting up people you know, maybe other founders. Maybe you just, maybe you know people that have a skill set and you can just bring them on. There are platforms like Upwork, which there are diamonds in the rough on Upwork. I'm telling you, our designer for Call AI, it took hundreds, maybe like about 100 or 200 applicants that submitted trial designs for us to finally find the one, and she is so good. I don't think this app would have went nearly as far without her because everyone compliments the user experience and how clean and beautiful it is, and honestly, the credit goes to her. Shout out to Shaka, incredible designer. There are headhunters that fill roles. So that's— you could go to them. They take usually a fee, like oftentimes they take 20% of the base salary you pay them, but they're good. Like, they'll poach people from other companies and they can find you some killers. Our best hire at the company, in my opinion, was from Headhunter. And often employees will actually bring in their own friends to apply to work at the same company. So At Kali AI, we've had people that have like recommended like, hey, my friend's looking for work, are you guys hiring right now? And it's worked out, we brought them on the team. So that will sometimes happen too, where the employees are like bringing in more people. And there are like other ways too. You could try to cold outreach people that you think will be good. So what's also important is learning how to run an effective interview process. For me, in my experience, I honestly kind of go on vibes. I just let the conversation naturally run its course. I don't have a set structure of how I start the meeting and how I end it, but I always hop on, I just start letting the conversation flow. I I ask them the basic questions about their previous experience, but then I just— whatever comes to mind, whatever I'm curious about learning about them, I'll just go with it and ask them. And I feel like I have a pretty good sense for weeding out who's actually knowledgeable about their skill, who's not, who's intelligent and who's not. And then honestly, I always try to scare them away. And this is very important. I want to always have cultures of hustlers and grinders at my companies. That are willing to really put in the work and spend sleepless nights working on projects. It depends what kind of culture you want, but like, that's a really— it would be stupid not to want those types of people. And so what I always will say on interviews is, this is a startup. We are staying up all night sometimes. You might get a call from me at 3 AM and we might need to work together to get something done by the morning. We're all hustling, we're all grinding here, and if that's not your speed, that's okay, but we're not going to bring in someone that's going to drag down the efficiency of the entire organization. So I need to know, are you mentally ready and committed to an environment like this? And sometimes it scares them away, but sometimes you'll get someone that's like, fuck yeah, I'm ready for this, I was born for this shit. And that's the people I want on my team. The key things I look for in employees is that I want them to be smart, I want them to take initiative. The best thing is when you bring someone onto the team to do one role and and then they're picking out all these things in the company that you could do better that you didn't even think of yourself, or they're coming up with all these ideas and they're pitching them to you. That's amazing. That's what I want. You also always want to hire people smarter than you. I mean, it doesn't need to be like always, but generally, if you could hire people smarter than you, that is very good, and you should not be afraid of that. You want people smarter than you. It would be shooting yourself in the foot if you don't, just because you're intimidated or whatever. One interview question that I stole from the founder of Boom, the supersonic commercial flight company, it's a really good one. He asks all people that he interviews, and his are more technical interviews, so I think it works better if you're hiring like a developer or someone that's gonna have a very specialized role, but he always asks them, "Teach me something." And what he means is teach me something about the field. Some people take it as like, teach me anything about the world, and sometimes that's interesting too. But I always ask this, and it really allows you to understand how well someone understands their field, because if they could teach you something, they probably understand it, and maybe you'll actually learn something valuable too. So it's helpful to yourself. So once you've found the person you want to hire This is very important. You need to make sure that you have aligned incentives. Aligned incentives are crucial for a business succeeding. There are so many cases where employees underachieve just because they don't care. Like, they simply do not care. And I've heard that you can't pay an employee to care. Like, they're either going to care or not. But I've also seen that with the right incentives, employees will work much harder. So giving someone equity in your company, it's very common to have a pool like 5% of equity that's split up amongst your employees, where some will get like 0.1%, 0.05%, 0.25%, or 0.5%, not 0.05, that would be pretty low. And that aligns general incentives to they want to grow the company because then at a big exit, they'll get a payout. They have a piece of it. They have skin in the game. You could also tie bonuses, or you could also have incentives aligned by giving them bonuses tied to their work. So for example, for example, you can— I just had a reminder go off. I had to remember to do something. Okay. So for example, like salespeople, that's a common case. Just like however many people you close, you just get a commission. So that's an obvious one. And an important thing to keep in mind is that every employee should be kind of like a salesperson. Salespeople, they're super easy to hire because they're all commission-based. So you don't pay them that much. You just bring them in. If they're not doing a good job, they're not making any money. So they'll weed themselves out and you just keep bringing people in. Every person you hire on the team should be making you more than you're paying them. And it's very hard sometimes to attribute revenue to a specific role and decipher, okay, is this person making the company or adding more value to the company than I'm paying them? But you have to do it. And so that's important. But about aligning incentives, you could just tie bonuses to their work. So whatever their main KPIs are— and this is important— for every employee, you should have a KPI, which is a key performance indicator. It's like one metric, maybe two metrics, sometimes three, that this employee is responsible for. And it makes it very easy to just visualize at a high level if the company is moving in the right direction. You should have a dashboard of, for every employee, their KPIs and kind of like see trends of Okay, are they hitting their KPIs? They're not, it's probably time to let them go. And if they're crushing, you should definitely reward them for it. And that's where bonuses can come in. You could tie bonuses to KPIs. So if they hit a certain milestone, they get paid more, which is great. If you don't align incentives, then the employee will be motivated enough to not get fired, but they won't be motivated to want to really take the company to the next level. And they might always be one foot out the door, like waiting for a better offer. Another company could just come in and poach them. So about the 5% equity to employees, early on in Call AI, we actually didn't give any employees equity, and that led to a lot of people just not caring. We were honestly underpaying for talent, and I learned very recently that you really can't overpay for talent. As long as they're like, if they're actually really talented, you can't overpay because one person in today's world with the help of AI tools can genuinely do the work of 10 people. And so they're worth a high salary that's like for multiple people. Like instead of hiring 3 people, just hiring one guy for the sum of all of those salaries, it can sometimes be worth it. And in terms of giving equity away, early on we didn't give anyone equity, but then later on we started to. And I really noticed like that's when the culture started being built. That's when people started caring, when people started working on the weekends more without us asking, when people started pitching all these new features and really caring about the company succeeding. So I would very strongly recommend that you should have something that aligns incentives. If it's not bonuses, then equity. Equity is often— like, I think it's the best. I think it's the best way because that's just structured to the company's overall well-being. They'll be motivated for that. They won't just be motivated to hit a KPI. They'll be motivated to help the company in whatever way they can to grow. Okay, so now we've went over your product, your marketing, scaling it, scaling it into a profitable business, and having employees. That's— those are really all the basics to run a successful business and have the business work for you. Now boiling it down to the absolute core, which is what we did, business is very simple. A lot of people overcomplicate it and Obviously, I didn't go in the nuances of each specific part, but those are like the main tenets of running an actual business. And it's actually interesting because what I've seen and what I've heard from other people is that the hard part about being an entrepreneur and the hard part about business isn't actually building the business. Like, the steps are pretty simple, especially once you've done it once. Like, obviously it's hard the first time when you have zero experience, but once you realize and learn, like, oh shit, like, this actually isn't that bad, The hard part isn't the product, the marketing, and hiring employees. I mean, that, that all has difficulties, but the hard part is all the bullshit that comes up in between. Random lawsuits flying in from the middle of nowhere. Maybe a law changes and you're not able to do something anymore. Apple or Google stopping you from uploading your app to the App Store or Play Store. Facebook banning your ad account which has happened to us, or TikTok banned our ad account, Facebook has blocked our ad account from spending because like bugs in the code stop us from reporting and everything just goes to shit. So we have to turn it off. Like that stuff is what makes business hard. It's the uncertainty. It's that any fucking second the whole ship can crash down and you don't know when. It can be out of nowhere, competitors popping up left and right. That is what makes a business difficult. So you have to be in the mindset that you're ready for this, and it's important to understand that, like, you're gonna get punched in the face. But I heard this from someone else, and I actually really like it. Every time you get punched in the face as a business owner because something fucks with you, you should smile because you could dog that shit. Like, you have to have the mentality that I don't give a fuck how many times I get knocked down, I'm gonna get back up. You Your competitors though, they're gonna get punched and they're gonna feel the pain too. And maybe enough punches are thrown at them that they eventually throw in the towel. So every time you get punched, just remember you're not the only one getting punched and fucked over. It's other people too. Random bullshit all the time from out of nowhere, all the time, random bullshit. You'll always deal with it. That's just building a business. Like one of my friends, he's dealing with some bullshit that he has to change the name of his, or he's in a lawsuit about changing his admin, and that's just something that like, it just drags resources away from building the actual business. It's just annoying, that stuff. That's what makes business difficult. Also, you genuinely can't lose unless you give up. I have yet to see someone go several years trying to build a business and they just never succeed. It's always— they just end up giving up. But if you keep going, if you keep pivoting, you keep changing your idea, you keep reworking the marketing strategy, and you're learning, and you're learning from your failures, I promise you, you will find success eventually. That's important, like your failures. Entrepreneurship feels like this. And then you have a straight line because you're gonna fail, fail, fail, fail, fail, fail, fail, and you don't feel like you're making any progress. But then all the failures, you learn something in each of them, and then you finally have a success and it takes off like a rocket ship. Okay, so now I'm just gonna go into a bunch of random stuff. I have some rules for success that I'm going to go over. And I have a bunch of things that I think will just generally be helpful for you guys. So, okay, first of all, here's some general rules for success. First one is speed. This was the number one core value at Kali Eye, and it's just something I hold as a general philosophy. Everything I do is fast, every line of communication. You should never be waiting and delaying things. If there's something that needs to be done, I will pull the entire team in a call. Like, if I'm on a FaceTime with one of the team members, he's like, oh yeah, you know, we have this, and Max from the team needs to review this. I will add Max to the call right on the spot and have him go through. Speed, always. You always want to be moving quickly. Everything you do, you just can't delay things. The world moves too fast. People will forget about you. Your idea will be taken by a competitor. You need to move quickly, and if you don't, you'll fail. You'll fall behind. You got to move quickly. And part of speed is like a lot of people are slowed down, especially early on, by legal bullshit, and you should not let that happen. It's important to get your company like somewhat papered correctly early on just to avoid problems down the line. But in terms of like small things, like $100 that you're paying someone, you don't need to waste a whole day signing a contract on that. Just have a handshake deal. Most people are good people. There will be people that screw you over, but the time you save and the money you save not paying lawyers to draft things will outweigh the amount of money that you lose in the case that you do lose. So this is early on, by the way. Like, later on, once you get rich, then you should get legal. But once you're early on in scrap, you should not waste time on any of that bullshit. You should just go head down, grinding, seeing if you succeed. And so you should not get slowed down. A lot of people are also slowed down by like, I don't want to tell people my idea, I don't want it to get taken. Oh my gosh, this annoys me so much because people don't understand if you're actually talking to a successful founder, they're busy. They have— ideas are in the air. There are so many ideas to work on. It's like girls, like you could always find another girl. There are so many girls in the sea, so many fish in the sea, there are so many ideas in the ocean, so many. So when you're saying you don't want to tell a successful founder because you're scared he's gonna take it, he's busy with his company. He probably has a ton of ideas he's working on. He's not gonna care, and you're shooting yourself in the foot because, because you are not gonna get some valuable advice that could have helped you. Obviously, there are cases where ideas are taken, but Those are super rare, and chances are the idea that you think is this golden idea is not actually as good as you think. Like, I had that so many times where I thought I had a billion-dollar idea and I like didn't want to tell anyone because I didn't want them to steal the idea, but that's all bullshit. Execution is really what matters. An idea is nothing, execution is everything. Ideas are worthless. You always want to have a bias towards action with everything you do. You just always want to act. I've seen so many companies fail because they just spend way too much time deliberating and sitting around, and I've been a victim of this too, where I've been involved in organizations where there are just too many decision makers, and so every small decision has to be signed off by everyone, and then nothing gets done. I'm a fan of monarchies. Every company I run, I'm the shot caller. Okay, I'm gonna make the final decision and we're gonna move fast because of it. And some of my decisions will be the wrong one, but then we will pivot and change it around and we, we will go back and fix it. If you're moving super fast all the time, then yeah, you'll have speed bumps, but you'll get through them. Focus on what matters. Too many people focus on the bullshit that does not matter when when really if you boil down your business, it all comes down to the simple things, the product. So let's just say apps, for example, okay? Like you could look at an app and think, wow, apps are so complicated. There's so much involved. Like, oh, the button colors, the background, the app icon, the name, the features. Should I add more features? This, that, the marketing, different channels, the onboarding flow, the paywall, so many different pieces. But if you really boil it down, there are only 3 things that actually add to the business. It is the traffic, so the number of people you're getting into the app, so people that are downloading it. The conversion rate of people that download to people that actually pay. So this is the paywall in apps. It's like how you're asking people to pay. So the first one would be like your marketing channels. The second tenet is your conversion rate. So this goes into your paywall, and the third is the LTV, or the retention is really what it is, and that leads to LTV. So the longer people stay in your product, the more money you make, if it's a subscription at least, not every app is a subscription. And so these are the only three things that matter, and everything can be divided up into one of these three categories. So adding a new feature, that's gonna have an impact on retention. Trying a new marketing channel, that's gonna have an impact on your downloads, on your traffic. Testing a new paywall or changing your price, that's gonna affect your conversion rate. 3 things that matter. And I see a lot of startups where I even, I see a ton of startups where they clearly have something working for them and they just need to double down but instead of doubling down, they are experimenting with all this random stuff, trying to find something else that wins instead of just doubling down and scaling up this channel that's working. I met with a founder the other day. I saw his company, they were running Facebook ads, and they were telling me about all these ideas that they had, all these initiatives for marketing. And I was looking at it and I was like, why the fuck aren't you just scaling your paid ads? And obviously I didn't say it that aggressively, but I did ask him. And it just like never really came to them. Like, they were like, oh, it's budgeting and all this stuff. It kind of just came up with some excuses. But that's driving 90% of your business. You should double down on it because they were spending 10% of their time on what drives 90% of the business and 90% of their time on what drives 10%, just all the other bullshit. And so if they double down on that, which now they are, It's like, okay, let's focus on paid ads. What does that mean? Better quality of creatives, scaling the spend, maybe a better account structure. Like, let's talk to some other people. Let's move away from an agency and move in-house. And that's a big thing for me. It's, I hate working with agencies. Agencies suck. They never have your best interest at mind and heart. Like, maybe they do early on and maybe it feels that way, but eventually they're just gonna try to, like, the agency model is just to take on as many clients as possible and to do enough work with each one where they stay quiet and they don't complain, but not do that much. Like, they can't go above and beyond, they can't give you extra attention because they have to give everyone the same amount of attention. So they suck. You have to bring in people in-house that genuinely believe in your mission, genuinely care about the product, and are incentive-aligned. Agencies, like, sometimes they're incentive-aligned in the contract where it's like the more money you make, the more money they make. Sometimes Oftentimes it's like close to incentive-aligned, but like it's slightly not, and that slight gap makes it so that it just doesn't work out. But also like they're a big company, so they're— even if like the contract says it's incentive-aligned, the person that's actually running your account isn't getting much of the upside. So like they're not gonna care. Employees are better. Employees are always better than agencies. Always doing stuff in-house because you can enforce your rules on people in-house. You can enforce speed. You can enforce bias towards action. You can enforce all of your culture on them. You can't really enforce it on the agency. They just will not give a fuck about you. How should you price your product? It's a very big question a lot of people have. By the way, after this, I'm gonna tell you how to come up with ideas for products. But pricing your product, I generally like to look at, okay, first, are there other competitors in the space? If there are, I will probably start with their pricing and then always A/B test. So A/B test, you should do more research on this if you're unsure, and maybe you should take a statistics class, but it essentially means to show one price to 50% of users, another price to the other 50%, and then that test will tell you which price you make more money from. So I would start at like the competitor's price and then go up and down from there. Try different pricing structures and just A/B testing it until it's done. Not just with pricing, but with everything. But, and if there is no competitor, I would just come up like on the spot with something intuitive for pricing. But, uh, it's not just for pricing. So many people ask me, should I add this to my app or should I add this? Should I do this paywall or should I do this paywall? Should I run this business or should I run this business? Or that's actually worse. I will ignore that. I can't answer those questions just on the spot. What will perform better? I'm not a computer. No one is, no one can. The only thing that can answer those questions is A/B test it. You could do this with marketing material, like trying a video with one hook, trying a video with a different hook, seeing what does better. Mm-hmm. You just always want to be A/B testing. Maybe it's like the caption on your ads, your video. I always be A/B testing and then statistically come through the truth of what works better. Don't have your biases early on because of speed and bias towards action. You shouldn't slow yourself down because you're testing. Like, you have to make a lot of assumptions early on, but then you should always like, if you have a question like, oh, can we price higher? Don't just guess or ask people. Go and test it. Go A/B test it. If you think that your onboarding flow for an app is bad, or you think it could be better, A/B test it. At a certain scale, you always want to be A/B testing pretty much every change, because if you just start doing things, like, you might not realize, but you just drastically hurt the user experience, and that could really mess with your LTV. I kind of made that section a little bit too much about apps. So I'm gonna try to pull back a little from apps and be more broad again. Coming up with ideas. This is the section that I'm sure a lot of you guys came for and were interested in. I think it's different for most, for everyone, and like the way everyone comes up with ideas is different. Everyone has their own like story to tell. What I will tell you is most stories that people have about their ideas, it's all just bullshit and for show. It's, yeah, like, it's just for like the press and looking good on TV or in articles. But realistically, like, the way they came up with it was probably just that, like, they thought it would sell well. Like, I know founders that— I know a founder that started a hair, like, custom shampoo company, and it was a big billion-dollar company, actually. I need some water, talking a lot. But he doesn't give a fuck about hair. He doesn't give a fuck about shampoo. He just saw a gap in the market, an opportunity to make custom hair products because no one else was doing it, and he did it to build a business and to make money, and it worked for him. He didn't give a fuck. So you don't need to like have some crazy like childhood story of why you came up with your idea or anything like that. It could simply just be like you saw an opportunity. In the market. But coming up with ideas, so there are many ways. Thomas Edison says ideas are in the air, basically that like ideas come from the environment. No one really comes up with unique ideas. They're just like all around us. You'll have an idea, someone else will have the same one. They're not— they don't belong to anyone. Ideas are in the air. They're free-flowing, they move around. And I agree with him, actually. So my approach to coming up with ideas is to develop the skill of being able to recognize a good one. That's what's important to do first. You need to be able to recognize what is a good idea and what's a bad idea. Because you could be coming up with all kinds of ideas, but how do you know if it's good or bad? You need to know how to validate it. And there are like some formulas you could probably think about, just like, like the TAM of an idea, the total actionable market, or the total available market, the total size of what your company could be. So you want to ideally work in something that has like a big enough TAM. But, and there are a few other metrics that are important too. Like you could look at the competitive landscape, how competitive is it? If you have any advantages that can help you wedge into the idea easier, you wanna just look at all of these variables. Maybe ask ChatGPT like how to validate an idea. But once you have that mental model in your head, and honestly for me it's mostly intuitive. Like I kind of see the patterns of like, okay, this worked really well in a different space for a different company. So similarly, this idea, like, I would think my idea to this space is like that idea to that space, and that idea is super successful, so my idea should be too. Like, similar thought processes to that is how I sometimes come up with ideas. And then a lot of it's like, okay, can I imagine myself using it? Is it solving my own problem? If, if it solves your problem, chances are you're not just a totally isolated human, and it will solve at least a few million people or tens of millions or hundreds of millions of other people's problems too. And like, if we do the math on that, it's like 1% of 8 billion people in the world. That's what, like 80 million, I believe. And so 80 million people in the world, 1%. You might have a problem that none of your friends have, but you shouldn't necessarily write it off as a bad idea because 1 out of 100 people may have that problem, and that's 80 million people, and that's 80 million people that you could sell to. So you shouldn't just weed problems out because it's like what your friends— you should honestly ignore most of your friends. If a founder, if another founder who's successful is telling you it's a bad idea, he's probably right. But, or depends on the founder, of course, but he may be— he's definitely has a higher chance of being right than just your friend. Like, he's never done it. He doesn't want you to be successful, more successful than him. He just wants you to play video games with him on the weekends. So once you have that mental model for validating ideas, now it's just like you could find them anywhere. Sometimes I just meet with founders and hear— like, meeting with founders and hearing their ideas kind of helps you spark the muscle of like thinking about different ideas in different spaces. So more ideas will naturally come to you. Oftentimes when you're building one company, you'll run into all these problems and then you'll be like, oh wow, there should be a company that solves this, there should be a company that does this. And then that's another way to stem ideas. Oftentimes, this is kind of interesting, I don't know if this happens to other people, but I'll hear a founder tell me their idea, or like they'll begin to tell me their idea, and then I'll like finish the sentence for them. And they're like, oh my gosh, that's a great idea. So your company does X, Y, and Z. They're like, no, it actually does this. And I'm like, oh, okay. I mean, that's cool too. But then like I just came up with a totally different idea on my own off of like the beginning of their thought process. So that happens to me sometimes. I don't know how common that is. You can also like, maybe you see an idea, like I get ads all the time and I'm like, wow, this is a good idea. But these guys, they're not executing it well. I could build this and I could execute it way better. You could— I think coming up with ideas is a skill. Like, a lot of comedians, they used to think like, okay, the jokes need to come to them. But I think it was Jerry Seinfeld who famously would write down a joke every single day, and he went against what everyone was saying, which is like, jokes, it's like an art form, it's You know, you can't control it. You can't force being funny. It just has to come to you. But he proved it's a skill. He wrote one every day. And now, and obviously he's a super successful comedian. So I think it's the same with ideas. Like, come up with a new idea every day. Most will be bad, but some may be good, and they'll probably get better over time. That's how you should come up with ideas, guys. Okay. Oh my gosh, I have to go to the bathroom. I'm gonna try to finish this. First. Co-founders— that is a good section. Co-founders can be super helpful to a company. What you want to make sure is that you don't wear too many of the same hats. Like, ideally you guys balance each other out. Like, maybe one person is more business-oriented and marketing-oriented, and then the other is more product-focused. Like, maybe they're a programmer if you're building software, or Or maybe you're selling seltzer and they're like the one that's gonna be responsible for the shape of the glass and the actual formula that's in the seltzer and contacting the manufacturer, and then you're focused on the marketing. Like, that would be a great partnership. You want to have skills that complement each other. If you both are capable of the same thing, then it could be pretty problematic. You're probably better off starting different companies. Because you don't want to be like a co-CEO with someone else. That's usually not the best idea. Monarchies, as I explained, you don't want to be talking and deliberating all the time. But, you know, sometimes if you're like very upfront about responsibilities, I think the biggest thing with co-founders is you just want to make sure that you set clear boundaries of like what you guys are mainly responsible for. So like you could say one of you guys, you own marketing, the other one you own product. So like anything, if something goes wrong with the product, that's his fucking fault. If something isn't working with the marketing, that's his fault. It's his responsibility to be on top of it. So you have areas. Otherwise, it's like just the blame game. You know, you never really can hold each other accountable. You need to be able to hold each other accountable for each, each his own things. And in terms of finding co-founders, I mean I'd say you don't want to rush into co-foundership unless, like, if it's your idea and then you bring other people in, you could vest and cliff them, which— ask ChatGPT if you don't know what that means— but basically that's like a very low-risk way to get someone into a company, and then within the first year you can remove them with zero equity given to them, zero downside, even if you promise them like 50%. If you remove them in the first year, if you have a 1-year cliff, you can remove them. So that's generally really good to do. And you can meet them. I mean, maybe it's a friend. Maybe you meet them on X. Some people have met people at Y Combinator startup school co-founder matching. But to be honest, most people on that are pretty low quality. Then I guess there are the diamonds in the rough. So it's kind of like Upwork too. I'd say if you're just talking to more people over time, like on X, you should, like the more people you talk to, then, and like the more founders you'll meet, just more people you network with, you could find co-founders through that. I don't know. I'm not like, sometimes people use past employees as co-founders. There's all kinds of ways. I'm not like a co-founder scavenger expert, I suppose. So this is earlier on, but a lot of people talk about product-market fit, and to be honest, I've never really understood it and what it means. My old mindset is your LTV is greater than your CAC plus your cost of goods. That's a business, and you just keep scaling it. But then product-market fit is apparently this idea that like users actually like your product and they stay and it's like retentive and they're telling people about it. But dude, I don't, I don't know what the fuck that is and I don't like try to put that into different metrics. I just try to build a profitable business from the start. I don't think about that and I don't talk about like, oh, we haven't gotten product-market fit yet. It's just like, if you're not profitable, pivot. Until you are profitable. And sometimes it's a gut feeling. You don't know if like you're pivoting to a different idea too early or if it's the right time. Like oftentimes you just haven't found the right marketing channel, but maybe it is just the idea, you know. So product-market fit, interesting concept. Okay, I think This is like most of what I wanted to go through. If you guys have any other questions, leave them in the comments. It would be really cool to see you guys like helping each other out, and I'll try to respond to them as well. And also something— okay, one of you guys, please do this, all right? If you made it this far, you're probably like a really good person, and therefore you'll want to do it. I'll pin your comment if you do it. How's that? Assuming I don't pin something else more important. So maybe I'll pin it right away, but might need to change that in the future. No promises. But you should put like the different sections on YouTube. You should be like, from minute 1 to 20, he talks about this concept. 20 to 40, talks about this. Whatever it is, someone should break it down in the comments, and whoever does it the best, I'll pin their comment because I think that will help other people that come to this video. And as I was saying, guys, business, if you boil it down, it's not as complicated, but it's really all the bullshit and uncertainty in each specific thing that makes it more difficult than it needs to be. What I will also say Is that— was I gonna say? I had like a really good thought. Hold on. To be honest, I have no idea, but there was like a really good thought that just came to me. And now I'm like annoyed because I forgot it. Uh, check the comments, maybe I remembered after filming this and put it there. Really? Hopefully Neuralink in the future will plug into your brain and like you'll never have like forgetting thoughts again. You can just turn back the knob and see your previous thoughts. Trying to think of this, I don't want to leave you guys hanging. Oh, okay, no, I did, I did figure it out. Okay, take all stories you hear about other people's successes with startups with a grain of salt because for every success story where like the founder made some bold move and it worked in their favor, there's also people that did the exact same thing and it worked against them. So sometimes there's probability at play. And there are also so many cases where one thing that doesn't work for a company and the founder's like, yeah, don't try this, it doesn't work for me. Like for example, they're like, oh, TikTok ads sucks. Okay, that's just for his company. He says it broadly because like his mind is warped around his company, but that's just for him. For so many other businesses, TikTok ads works. And this is not just for TikTok ads, but like so many things that some people do that doesn't work for them, it will work for other people. So almost any general rule that someone tries to tell you, don't, don't take it too seriously. Like maybe keep it in mind, but I wouldn't stress out about it. Even some of the stuff I said here, like there are always exceptions to the rules. Like my big thing is speed, and I strongly believe in that, and it works for me. But I'm sure there are cases of companies that like move slowly, and because of that they like were able to time the market. But like honestly, speed, like for most cases you need speed. So like fucking move fast. But also like Don't over-optimize things. To be a successful business person, you don't need to have a 5 AM wake-up routine, okay? Like, most of Call AI's work, I would— like, the early days of Call AI, before we hit like a million a month, I was working like, I don't know, 4 hours a day, and I was literally just like laying in my bed while I would be working. Like, I'd be laying in my bed coding or talking to influencers. Like, it was in my childhood house with It was at high school, so take everything with a grain of salt. Okay, I'm gonna end this video before the hour and a minute so that it's cooler, but see you guys. Thanks for watching.