Episode 86
· 54:59
Hey. How's it going, product people? It's me, your host, Justin Jackson, and I am here with a brand new series. It's called Mega Profitable. And the idea is I want to look at what makes a product business, a SaaS, software, digital products, whatever you're selling, what differentiates the businesses that are mega profitable from those that are just merely, you know, making the founder a living.
Speaker 1:And in this week's episode, I talked to Brennan Dunn who's transitioning from a course based business with double your freelancing rate to a SaaS called Right Message. But we really delved into what he's done with, with Double Your Freelancing Rate and how he started basically with a an e book that made $2,500 or something like that to a really profitable business. And he reveals numbers in this interview, something that doesn't happen very often. Normally, we only hear about top line revenue, but we don't hear about what the owner gets to keep in their pocket at the end of the year. And that's what we're delving into here.
Speaker 1:So if you want to hear more, you need to go to megamaker.co/profit and sign up to get the rest of these case studies. But let's talk to Brennan Dunn right now. Give me a little bit of an update on Rightmessage. You You were really hustling, kind of doing these in person sales meetings and you had pretty high commitments. Thought
Speaker 2:you Yeah. So we got 50 customers that way. We put a hole on it to work closely with them Yeah. While while we build out like self sign up and the onboarding stuff. Yeah.
Speaker 2:And so that's been going on the product side. On my side, I'm hiring and we're also closing on a funding round. So we're doing getting some basically half million dollars in seed round stuff. So it's good for us because it's people we integrate with. So you know, teachable and like they're investing.
Speaker 2:And so it's strategic money, but it's allowing us to really we're bringing on like developers or bringing on, what do you call it, a customer success person and stuff. So yeah, I mean, it's in terms of interest, our interest list is well over a thousand now of people who want to sign up. Sweet. So we've got quite the backlog. Yeah.
Speaker 2:So it's just I've been more on the kind of like I was in Atlanta the other day working with a coach who's helping us with scalability. So helping us with growth and management stuff. So it's unlike anything that I've been involved with before. So just making sure all the ducks are in order before we really accelerate the gas in this thing.
Speaker 1:So And what did you get up to in MRR with those 50?
Speaker 2:A little over.
Speaker 1:A little over. Yeah. Nice. That's awesome, man.
Speaker 2:Yeah. So happy about that.
Speaker 1:I'm stoked. I love the the part I loved was how much you hustled on those sales demos, like just meeting people and
Speaker 2:like, it's been huge. Yeah. Yeah. I mean, that's still like, so what the reason, I mean, it's good and bad in a way, because it's bad in that you don't have any other time besides calls. So you're just on calls all day and you can't actually work on the product.
Speaker 2:But the good thing is learned a ton really because I wanted to do that. The mistake I made with PlanScope was I didn't do the one I got this actually from Andrew Culver. When he signed me up for Churnbuster years ago, he basically got on Skype with me. He's like, okay, share your screen and we're gonna get you set up. So like he didn't have any onboarding yet.
Speaker 2:It was all like one on one him like seeing where I get stuck, where I get confused and all that kind of stuff. And then, you know, now that I've done that, like dozens of times, we can now go back to, you know, and actually wireframe out the onboarding and stuff. So I'm glad we started with that. And then once we so now I'm focused on basically the hiring side and working with everyone else basically on the wireframing and and the onboarding. Yeah.
Speaker 2:And then it's back to because we're still gonna keep I'm still gonna do one on ones. Like, I'm not that wasn't like a short term one off thing. Yeah. But it won't be to the it won't be the forty hour a week things anymore. Yeah.
Speaker 2:It was just insane, but it worked so well. I mean, it was so effective for just intimately understanding, like, what are people using this for? What What persuaded them on the marketing side? And how does the product need to immediately fulfill that? So our goal with self sign up and onboarding is minimizing the gap between, okay, I put in my I clicked sign up on the sign up form and getting the results I need.
Speaker 2:So I think we're getting there. We're getting there quickly, more quickly than we would have if we would have not done this exercise first.
Speaker 1:Yeah. And it obviously feels a lot different than PlanScope.
Speaker 2:Totally different. Yeah. I mean, one other good thing about it is unlike PlanScope, PlanScope require people to use it every day or really frequently to make it valuable for them. Yeah. The beauty of this is it's like you set it up.
Speaker 2:Yeah, there's some maintenance, but for the most part, it just works on I mean, it's like, you know, postmark, right? Or something like that. You use postmark to send transactional emails, but you never log in. Know, like, I mean, that's so the good thing is I don't need to worry. The hardest thing with selling PlanScope was getting people to change behavior, which it's I don't think we take into account as much as we should in terms of like, it's one thing to build software.
Speaker 2:It's another to actually get people to modify the way they work to use it and they're like how they work, right? So with this, there's a lot we can do either manually with like success people or with onboarding or whatever else. But once they're up and get some beginning success, we just shoot them a weekly email with like stats. Like they don't need to go in daily to make it valuable.
Speaker 1:Yeah. Yeah. I think that's I joke about this all the time that I'm still using Fireworks CS five. Even
Speaker 2:though Yeah. I've saw that. Bought
Speaker 1:I've I've bought Sketch, and I, you know, I could upgrade on Creative Cloud or whatever, but I'm so used to using it. And old habits are really hard to change. But Yeah. If you called me up and said, you know, with a completely on a completely different kind of vector and said, I can install this thing on your website that'll make you 10 times more money and you pay me a $100 a month for it. I'd be like, okay, well that sounds pretty good.
Speaker 1:Like it's the outcome I care about. And sometimes the switching behavior is like, I'm so used to doing things in fireworks that you're asking me to do a lot of work in the short term to even start using something else.
Speaker 2:Exactly. Yeah. It's that switching cost, right? Like it's not about, okay, this software is better or this is like more powerful or whatever. It's about I'm getting X degree of success with this.
Speaker 2:What's the delta between if you want me now to do get that success in another through a different device, a different app, right? And I think as creators, we don't think about that. Like we just think like, oh, you know, we've now have beautiful project management instead of like what you're using now, which is ugly project management. But at the end of the day, the ugly thing is doing what it needs to do. It's a hard sell.
Speaker 2:That's why, I mean, the big thing we're facing now, to be honest, is the on the education side, like every the beautiful thing about these demos has been everyone gets it. All I need to do like, the way I pitch it is, you know, sell me your product, right?
Speaker 1:Yeah.
Speaker 2:And they go into their product or whatever it is they're selling. And I point out how they personalize their pitch to me. And I'm like, we do this offline. This is like, if I go to a design conference and talking to designers, if they ask what I do, I'm gonna phrase it differently than if I went to like MicroConf, right? So we all do this.
Speaker 2:So, it's an easy pitch, but the hard thing that they don't and I don't know if who's got Lodge Kopf again? Michael. Yeah. I don't know if he's running this kind of not backlash, but like the issue is, it's one thing to know that this works. It's another to know what do I start with?
Speaker 2:What do I do? What does that actually mean? So a lot of our onboarding is recipe based. So like you log in, it's like, do want to get more opt ins, increase customer evaluation, like all these different things. And then the, you know, like tailor the product based off of like based on what kind of so you're running a SaaS and you want to increase customer LTV.
Speaker 2:Let's show you how to do that. Right? So building that out is the hard part, but it's going to be really once it's live, I think.
Speaker 1:Yeah. I think with products like that, the challenge is always people don't have an imagination for what's possible or they have an imagination, but they just don't know how to get started. And, that's where things like pre existing templates or like being able to fill in something that's already been started for you is way easier than looking at a blank page. And even like I think that was the other the other smart thing you did with those those in person demos is you often would help people get set up initially. And once it's already set up, like, it's like, okay, I'm gonna personalize this part of your site and then it's running
Speaker 2:Yep.
Speaker 1:Then you've done all the work for them. And I think a lot of SaaS companies could do that. Get people over that. The hardest part is that starting, like, what? Okay, I've got, you know This is the point I was trying to make with I wrote something about this where I said, you know, I think installing Mailchimp is a lot easier than creating an online course.
Speaker 1:Right? Like, I just have to put the form on my website and then I'm done and I get to an easy win. Like, Rob Walling has this idea of minimal path to awesome. It's like, I get the form on my blog and then my aunt signs up and I already feel like I've won, right?
Speaker 2:It's like the best is the BearMetrix, right? You sign up to BearMetrix and you click one thing and bam, there's value. Like that, I mean, that's the yeah, exactly.
Speaker 1:They they have a very fast minimal path to awesome. Some Exactly. Products are just too are are more sophisticated than that and it's it's almost like for Mixpanel, for example, they need to set up some stuff for you. And you need to let it collect. And you need to collect, right?
Speaker 1:So Yeah. Yeah. Well, let's talk a little bit about double your freelancing rate. And we're gonna go back in time a little bit. When did you start working on this?
Speaker 1:When did it launch Double Your Freelancing Rate?
Speaker 2:So, okay. So a quick backstory. 2011, I was at the peak of running my agency. Yeah. We're doing well.
Speaker 2:We had employees. And I was looking at friends of mine online and a lot of them were running software companies. And here I was with a very expensive, you know, a lot of overhead, right? Yeah. This agency, but with like a handful of clients at once.
Speaker 2:So I wanted to turn the tables and have a lot of people paying me a little. So I launched Plantscope, which was or is a project management tool for freelancers and agencies, which I did the kind of typical like, oh, I hate all the software available and I'm gonna start my own thing, right? And so that's what I did. And the realization was it's the easy part with building, but getting actual people who are the right kind of people in front of it, that was hard. Yeah.
Speaker 2:I was wondering if
Speaker 1:to we turn that around. Like, everyone's always like, Oh, I hate using this software, so I'm gonna build my own. But it's almost like you need to say, What software do I love using that I could just take to a different market? Like, Mailchimp, I love sending email newsletters, so I'm going to create ConvertKit, but just for this one group of people.
Speaker 2:For a certain niche. Yeah.
Speaker 1:Yeah. Because it almost shows you, like, if something if everyone's saying, I hate my project management software, that's a shitty market. That just means that everyone's always switching off their switching to different project management tools.
Speaker 2:Well, what I've realized since is people just generally suck at managing projects. Yeah. Right? And they blame the tool. So like, I always say if I could go back in time, I wouldn't start with software.
Speaker 2:I would have started with a course on like how to make badass clients by like managing clients correctly or managing projects correctly and then bring in the tools like the implementation, right? Yeah. But I, you know, and the issue was I built this and I launched it. And if they build it, they will not come. If you build it, they will not come.
Speaker 2:So, I did the typical like, well, I'd grown this agency. I knew a bit about like getting clients pricing and stuff. So on the plans go blog was where I started writing articles that were generally just consulting articles with the hope that somebody goes to Google and types them like, how do I raise my rates? They read an article called action is something about PlanScope. They click that and they'd sign up and didn't work.
Speaker 2:So I was getting traffic. I was getting people coming, but they weren't converting to PlanScope. So that's when I thought, well, you know, kinda makes sense where if I was looking for information on pricing, I'm probably reading that because I'm like, don't have much money or cash flow issues or something. And there's a disconnect between reading an article about pricing and then project management called action, right? Yeah.
Speaker 2:So that's when I got into like, let's do a, you know, I read like an article way back when about wasn't even email courses, it was just like autoresponders, right? Yeah. So I did a very simple five day auto responder on basically exactly that. Like how to have better clients that culminated with PlanScope. That started working, but it still wasn't like, it just wasn't catching on the way I needed it to.
Speaker 2:So, or that I was hoping. And here I was, I had exited my agency. I was trying to live off of SaaS. It wasn't making a ton of money. And that's what led me to think, well, what if, you know, I keep getting questions from people, especially customers of the SaaS, which is weird about pricing.
Speaker 2:And that's what led to what was a $29 ebook that I called Double Your Freelance Rate. That was four and a half years ago now.
Speaker 1:Okay. And so that was 2011 when you launched the book?
Speaker 2:2011 is when I launched Plantscope. Okay. But yeah, it was like late twenty twelve, 2013, I think is when I did Double Your Freelancing Rate.
Speaker 1:And I kind of want to like paint the picture because this whole series is called Mega Profitable. And I wanna paint the picture the idea is we often talk about revenue, but revenue only tells one part of the story. There's also, like, did this actually make profits? And so Yeah. What did that journey to profit profitability look like from launching that book and then kind of moving through to what you ended up doing, which sounds like it was like a course and then also kind of like some mentorship and some other things.
Speaker 1:So what did kind of was it profitable right away and how did you keep growing those profits over time?
Speaker 2:It was profitable in the sense that so when I had my agent D, we did about 2,000,000 a year in revenue but I brought home less than 6 figures because we had a high overhead, right? Whereas with the ebook, the V1 w freelancing rate circa like 2012. I mean, outside of my PayPal fees because I was using, what was that crappy ebook selling tool thing back then? Was I don't even remember. It was like their whole back end was a flash thing.
Speaker 2:It was like built in flash. God, it's gonna bug me. E junkie. Yeah, something junkie, right?
Speaker 1:Yeah. Yeah.
Speaker 2:You So, they worked in PayPal. Mean, I don't know if Stripe was a think Stripe was a thing then, but they weren't working with them. So, I was using eJunkie to do it, right? So, outside of their fees, unlike the $5 or $10 a month I paid eJunkie, was, I mean, profit, right? I mean, if you don't factor in the value of my time and so on, it was pure profit.
Speaker 2:It was just me. But yeah, I mean, what happened with that was I pre sold it because I wanted to go to this conference in Ireland and I didn't have the money. So I basically made a bet saying like, if I can get the money that I haven't budgeted for this, then I'm gonna go. So I, you know, I had a fledgling list around PlanScope and even my articles. And I made, I think it was like 2,002, 2,500 or so from pre selling this book.
Speaker 2:And now I'm like, crap, I gotta write a book. Right? So I And it was funny, like Nathan and I were both starting our first books at this time. So we were always talking about like, how do we launch it and all this stuff. So that's where he and I got to know each other well.
Speaker 2:And so what was funny was I just started writing weekly to these people because I felt like I had their $29 and they'd get mad if they didn't have a book right away. So I just shared like what I was writing every week. It was kind of good. It was motivating for me and so on. And I spent a few months writing the book, writing these weekly emails also.
Speaker 2:And then I shipped the book and gave it to them. And I was like, okay. Well, I'm done my done my emailing. Like, don't need to email them anymore. Right?
Speaker 2:Yeah. Hopefully, sales will come in and so on. But I decided to keep writing. Right? I decided to keep it was a habit that I did build.
Speaker 2:And then I remember the first person who was like, hey. Because this wasn't related to Plantscope. Right? This is related to the book stuff. Yeah.
Speaker 2:They're like, I like I've forwarded some of these emails to a friend of mine. She's not ready to buy, but can she get these emails? And I was like, oh, maybe I should like, you know, go a little beyond this. So I threw up like a quick opt in form, and I think I sent it to them like, just send her here. But yeah, I mean, the big thing was I started writing weekly, which is huge.
Speaker 2:And then I ended up from there getting people who were like, this is cool. Have you thought about like, you know, it's one thing you have a little ebook on pricing, but I know you started an agency. Do have any advice on that? And I was like, oh, it's so tempting to keep like, like I could take what I learned and like package it in so many different ways, but it distracts me from plan scope. And like there's always this push pull right between the software company and
Speaker 1:this. Yeah.
Speaker 2:And at the time, all of my articles were on planscoped up. Ioblog. Yeah. And then I had single page domains for all this other stuff. And then I had brenandundunn.com, which had my new podcast I'd launched.
Speaker 2:Yeah. And it was just a mess, right? So about three years ago, two and a half years ago, it's always hard. It's like to figure out when this stuff happened. It was a summer, so it must have been three years ago.
Speaker 2:It's summer now. I put it all under wfreelancing.com. And I moved and yanked everything off the blog. I moved all these single page domains. So wyourfreelancingrate.com came wyourfreelancing.com/rate.
Speaker 2:So it wasn't that far off, but it was still and yeah, and that's how like DYF came to be. And at first it was more like, and I think a lot of us as creators do this, it was more of my own like, well, this worked for me. So I'm gonna share what worked, right? And that's like the one product, but there's been four iterations of Double Your Freelance Rate that, you know, this was booked. Now it's more of a full fledged course, a few $100.
Speaker 2:And what's interesting is now it's more research based where I'm actually tapping into my own audience and like doing surveying and talking to them and stuff into really making it so it's not just Brennan's like random anecdotal stuff. It's more the, you know, I guess the synthesis of me having gotten pretty decent at communication. So teaching, Mixed with my own, but also the real world experiences of people, whether they're customers, people on my list and so on. And that's what things have moved to. And it's been definitely the better for everyone involved.
Speaker 2:But yeah, mean, every was never like planned. Was more like, well, people keep asking about getting clients. And I have a course on pricing. But if you have no one to pitch, like what's the point? So that led to courses on getting clients and so on.
Speaker 2:So yeah, that's been the trajectory really.
Speaker 1:You really followed what people were asking you about. That's the big thing. It seemed like you kept iterating on, you know, at first, you were just trying to plug everything into PlanScope, but people were like, we don't want that. We want to make more money with our freelancing business. And once you finally figured that out and switched, then it sounds like you were just following their lead.
Speaker 1:Like they would say, you know, this has been my experience using your stuff. Here's where the gaps are. And you were able to keep iterating that way.
Speaker 2:Right. And it made it not only was I able to do that, fill in all these gaps on like, you know, okay, I helped them with this. How else could I help them? But it allowed me to not need to focus as much on necessarily getting new customers. Yeah.
Speaker 2:I could cross sell and upsell, you know, which has become more automated. It used to be more of like a, you know, I do like these big launches and stuff. Yeah. But right now, it's nice because I get people in the door in one channel. And then it just kind of like the the self select to move around the ecosystem of products.
Speaker 2:And it's nice because, you know, customer evaluation is able to go up pretty high. And I'm able to point people toward like a first product based off behavior and how they come into my audience and so on. Yeah, it's been a really good it's been good from the sense of I'm able to step back and think, okay, well, if I can survey people and figure out where they are now, and where they want to be, I can guide them down that path because I have different products that help fill in, like you said, these different holes.
Speaker 1:Yeah. And at different stages, it sounds like too.
Speaker 2:Yeah, exactly. So if somebody, and this is kind of what led to a lot of the personalization stuff I've been doing recently. But if somebody if I find out if a design blog sent you to my site, I assume you're a web designer and then you're reading content on proposals. I assume you care about, you know, you're struggling to close proposals. Mhmm.
Speaker 2:So what that allows me to do is the call to action that gets you on my list is centered on how you as a designer can close more proposals. So huge uptake in conversions from that alone. Yeah. But then I'm able to push them towards my product on proposals. Yeah.
Speaker 2:And that kind of thing where I'm looking at behavior and I'm responding to it has that's been the thing that for me has been like, that's like what I'm most proud of in terms of it's really helped take move the business forward. So yeah. Yeah.
Speaker 1:And so one of the things one of the questions I got on Twitter was because I said I'm doing this series on profitable businesses. And he's like, well, what's your like, does this is this after a generous founder salary and other things? So was there ever a point where you got to like, I pay myself about a 100,000 a year, but I don't have a $100,000 left after that. Did you ever get to the point where you had you had paid yourself and you had a big chunk of profit sitting in your bank account too? And how long did that take to get there?
Speaker 1:Alright. Just a a quick interruption here. I I know you folks wanna hear Brennan's answer. How much profit did he end up making on this business? We're gonna get to that, but I want to remind you to go to megamaker.co/profit and sign up there just to get the rest of the case studies that are going to be coming out soon.
Speaker 1:Some of these I'll be releasing as podcasts, but some of these are just interviews, like written interviews I did. And people reveal their numbers. They reveal what took them from just having a business that was paying the bills to a business that was actually earning a significant amount of profit after salary, after disbursements, after paying all their expenses. And if you're at that stage in your business or if you're thinking about starting a business and you wanna know, you know, is this going to be worthwhile or is this just going to be like having another job? You really need to check this out.
Speaker 1:So megamaker.co/profit. Alright, let's get back to this now.
Speaker 2:I think by year, So about two years ago, I think I was clearing 300,000. And last year, was a little over a million. And granted expenses on that were about 15%. So let's say, let's round up 200,000 expenses. So my I run a lot through the company.
Speaker 2:Mhmm. I mean, if we wanna get really like, you know, if if you're an internal revenue service agent listening, please don't listen anymore. But We did that.
Speaker 1:Yeah. But but, you know, by two years ago, you had like, if I if I had $300,000 in profit and then I decided to do distributions after that, that's still a pretty good nest egg inside of the business.
Speaker 2:Yep.
Speaker 1:And I think just to give people perspective again, in 2012, Brennan pre sold the book and made $2,500 in presales. Yep. Yep. And I just want one thing I think we've when you hear big numbers from where people are at now, you sometimes forget where they came from. And I hear people all the time who launched their first thing and make, you know, a $100 or a thousand dollars or whatever.
Speaker 2:Yeah.
Speaker 1:And I'm like, that's pretty good. You're in the 1% of people who have ever launched anything online and made any money. And the whole key was Brennan, first of all, he decided to choose the product that was gaining more traction, which a lot of people don't have the good sense to do. And then he iterated on that thing like crazy. And so it sounds like one of the things for you for getting becoming mega profitable, it was I need to keep iterating on this.
Speaker 1:And once you found something that worked, your costs kind of stayed the same and then everything after that was just profit.
Speaker 2:Right. Mean, became advantageous for me. I mean, it doesn't really generally work for me at least to just try to I mean, I'm liable to do this often but to jump around. It's better to just say this is consistently a product that does it very well. I'm not like it's immediately fulfilled.
Speaker 2:There's no like rev share or anything going on. So it's all pretty much fine except for what Stripe takes. And focus on, okay, well, what is how am I getting people to that, like through that funnel to get there and buy? And then how do I amplify that? And that's the you know, everything else, the other products are good because they bring that's like the first sale, but then I realistically know within six months, somebody with a valuation of, let's say, $2,207, which is the average valuation of somebody within the first month or so who becomes a customer.
Speaker 2:That spikes up to about $6,700 depending on the site. Like, if it's an agency, it's in the thousands. But, like, it depend like, I'm able to know if I can which is good because then if I'm doing any and I haven't done this is to the extent that I need to. I'd love to get better at this. But paid acquisition stuff, can say, if I can realistically get x hundred, two zero seven within the first month Yeah.
Speaker 2:For a new customer, and then break it down in that. I mean, my lead value through my normal funnel, depending on the type of so I break it down by industry type. Yeah. But like developers, let's say, are about $60. So I get a developer entering their email address in this opt in form, that's $60 time for that person.
Speaker 2:But that's gonna be about 20 something dollars within a month. Right? So I can make good decisions on that that then let me say, well, that's a really high valued audience rate because I I do well with them. Yeah. So I strategically, let's acquire more of them.
Speaker 2:So what does that mean? Maybe there's paid ways of doing that, which obviously lower profitability there, but also guest post podcasts and so on. And that's been something for me that's been extremely like having these metrics and numbers and working with them has been a really good thing.
Speaker 1:Yeah. That that was kind of my follow-up question is, you know, there's some people that are just starting off and they're like, man, if I could just have revenue, that would be amazing. There's other people that, you know, maybe they're like me. They're sitting at probably after I pay myself, I've probably got 5%, 10% profits in the business. And then there's folks like you that have, you know, you've increased profits quite a bit, but business is hard at each of those stages.
Speaker 1:So what kind of obstacles have you had along the way that you had to overcome? And maybe like, what are you struggling with now? What does a more profitable company struggle with at this point?
Speaker 2:I guess for me, the well, there's a few different things now. One of which is this one I was doing. I was working with a business coach in Atlanta two days ago. And he was talking about like the kind of natural life cycle a lot of these companies are super excited at the beginning. And then as you start to grow, again, that excitement is there.
Speaker 2:And then you get into something called whitewater where it's just like you're almost not getting burned out, but it's more like you're just getting especially depending on your personality type can get a little like, I want to do something new, right? Instead of going above that hurdle and like pushing forward. So, you know, there's I think on smaller scale, there's been a lot of that white water throughout kind of the creation of this thing. I mean, part of it is just like, I mean, there's I mean, you ever look at like a stock chart, right, like for a stock, right? And you're looking on like a week level and it's like, could be down, down, down, down, down, right?
Speaker 2:Like just suck this week. But then you zoom out and it's just up into the right.
Speaker 1:Right?
Speaker 2:And I think a lot of us, we're in that, like, sales have like, no one's bought this week. So you think, like, if you start to question, like, is this, like, dying? Is this blowing a hit? Like, am I done?
Speaker 1:Yeah.
Speaker 2:Right? And, I mean, I get I I'm sure we all get like these things all the time, right? Like, especially if you do a lot of big launches and then most of your sales come from that and then the rest is kind of like nothing. Yeah. You know, like, I mean, it's easy to feel that.
Speaker 2:So, you know, it's that, but it's also the context switching where, you know, I've naturally, especially with W freelancing, I've been reluctant to delegate probably more out of fear if you want to settle analyze it, fear of like, can actually people do this without like me needing to jump in? Like, would I actually be gaining anything by delegating, you know, this and that out? But, you know, it's it's that kind of stuff where I've been, like, continuously thinking like, okay. You know, I started the day thinking I just need to clear out my week so I can work on this new product or revising this product in that way. Yeah.
Speaker 2:And then, like, the fires come up, right, where it's like the business is growing. You've got a lot of customers now. And it's just like maintenance and admin. Yeah. So, like, balancing that and learning how to, yeah, just kind of, I guess, in a way, guard your time, you know, from like because it's very easy for me at least to be like, okay, I've just dealt with like this not angry, but like a customer who's like mad or something.
Speaker 2:And then it just sets you off. And like, I've really tried to get myself out of the inbox as much as possible and to have like treat it like a like if it was a SaaS, like the founder is not gonna be there doing frontline support.
Speaker 1:Yeah.
Speaker 2:Right? So, you know, it's taking time, but it's eventually kind of handing over some of those reins. And I think it's easier now for me because my attention is on RightMessage, and I need to intentionally figure out how do I automate this so I'm not a dependency on it, but it's still valuable and still making money. Yeah. And that's kind of where I am now and it's still a work in progress, to be honest.
Speaker 1:Yeah. I just have a few more things I want to ask. There's actually a lot I wanted to delve into that, but I want to keep this as short as we can. What have you tried on maybe the expense side that ended up being too expensive that you had to pull back on?
Speaker 2:I can tell you. So I had a premium course called the W Freelancing Academy.
Speaker 1:Okay.
Speaker 2:And it cost $9,000 to join, and it was a seven month long program.
Speaker 1:Sorry, 1,000. 9,000. Okay.
Speaker 2:We've had a good amount of people go through it. But caveat being, what profit wise, it's what DYF makes after. And this doesn't even count, I know you were separating out what you pay yourself with company profit. I'm talking about what happened like after the bills have been paid.
Speaker 1:Yeah.
Speaker 2:It was less than 5% revenue or 5%. So I actually generally made more and more 5% profit. I generally made more money selling like a single copy of Adobe Freelancing Rate at $300 than a $9,000 transaction. Yeah. And, you know, so because we had basically 14 people working on that product.
Speaker 1:Yeah.
Speaker 2:So we had support people, we had management people, we had the teachers and so on.
Speaker 1:Yeah.
Speaker 2:And it was and at that price point, you're not talking about add to cart buttons. You're talking about back and forth email sales discussions. Right? Yeah. So that sort of thing was it's by far the most valuable product we ever offered in terms of customer success.
Speaker 2:Yeah. But from a viability perspective, it was, I mean, it was even if you really think about it, mean, lot of the people bought over installment and, like, $7.50 months times 12. Yeah. And when you really factor in probably dunning and failed cards, we lost money on quite a few students. Yeah.
Speaker 2:So it's one of those things that it was more like running an agency. Yeah. It sounded great on paper. Yeah. I mean, just like a lot of agencies, it sounds great when you say you've got 15 people and you're billing them out of x and but then you really get into it and it's it's just it's a totally different story.
Speaker 2:Yeah. So that for me at least, that was the thing that I was I was and I am excited in the sense that it's an amazing product. Yeah. But when you're selling a $9,000 thing and you're not like a Walmart. Yeah.
Speaker 2:And you're only making $3 on it.
Speaker 1:Yeah.
Speaker 2:That is especially when there's high risk of defaults and such. Yeah. Yeah. It it that was a that was a I mean, again, it's one of these things where everyone's trying to go. And and the advice I got actually, which is interesting was we we tended to have everything high touch.
Speaker 2:It wasn't like a really expensive $9,000 video course. It was live for seven months every week for an hour training and And the feedback we got from some people was, you like you have this you're in this dead zone where people will pay 2,000, maybe 3,000 for like a product that has maybe like a few calls or something like that. But for the most part, it's like set in stone. It's a video course. Yeah.
Speaker 2:Like one of them meets things, right? But then there's this 15,000 plus dollar, you know, range where you have it's more like coaching, but it's sold as a product. Right? And it's scoped. But then there's, you know, no man's land in between.
Speaker 2:And I I put myself there. Yeah. I I really understood why it's really hard to do that. So anyway, that was the from like an expense perspective. Everything else I kept fairly lean.
Speaker 2:Yeah. I really like the low touch smaller transaction. By smaller, I mean, just, you know, three figure ish transaction that is pretty self managed where, like, if somebody writes in with, a 30 paragraph email about, Is this right for me? We're not even gonna respond. Yeah.
Speaker 2:But, yeah, that was that was quite the experiment that didn't end up panning out.
Speaker 1:And and this is the kind of evaluation you need to do really is at the beginning when you're you're testing an idea out, it's so easy to say I'm gonna work like eighty hours a week on this. I'm gonna, you know, invest whatever it takes to make it work. But at some point you've got to evaluate like you did. Am I making any money on this? And that has to include things like my time, stress level, other people I'm paying, and failed transactions, you know.
Speaker 1:Is this worth And it at the that's why I think profit is such a good bellwether Indicator. Yeah. Is that Yeah.
Speaker 2:I mean, is why when companies brag about having 30 employees, I am like, Okay, so you have a crap ton of business expense. Yeah. Nice.
Speaker 1:Yeah. Exactly. I mean,
Speaker 2:it makes sense oftentimes, but sometimes like I don't see that as a bragging rate. Yeah. I mean, it's impressive, but it's not. Yeah.
Speaker 1:And this is where I think folks need to put on their critical thinking when they see, for example, whatever, let's say a million dollars in revenue, which, you know, a lot of people would love to have a business that's making a million dollars in revenue. But if they have 12 to 15 people on staff, that number sounds a lot less impressive, doesn't it? Because you know that they have to pay all those people. And really, my buddy Tan at Asian Efficiency, he says I I think he got this from that book Profit First or or whatever it's called, but he says 5% profit margins is the new breakeven. Like, if you're at 5%, you're basically at breakeven.
Speaker 1:And breakeven means there are some months where you're going to lose money on the product and some months where you might make enough just to keep the business floating. And I think that's it's good for us to keep that in mind no matter what we're working on is at some point to sit down and go, okay, this was a $9,000 product, but if we compare it to this other thing, this other thing is making us way better money for way less effort.
Speaker 2:Exactly. And it might look less. I mean, you get 100 people and 9,000 a piece, that's not 100,000. Right? That looks impressive on paper.
Speaker 2:But when you really factor that in, that's like 100 times 300, so 30,000 whatever that might be in profit where, you know, getting like for the effort that went into that, you could have gotten significantly more profit by going after. Yeah. And again, it's not like I'm not trying to say that's the only like don't do big premium, don't do that kind of stuff. It's just for me and the way I wanted the company to run and every it just didn't work out well. Right?
Speaker 2:Yeah. So, yeah, I mean, that's the kind of thing that I but it's easy. It's easy to say, Oh, I'm gonna have this crazy member. And I know you do this too. But like, you know, this membership site thing, and I it all sounds great on paper, but then you deal with the commitment of people needing to pay monthly for something and then like all that and then how do I deliver ongoing value to them and like so on.
Speaker 2:So like for for my own purposes, I found that for me, what is best is a thing where you pay this and you get this. You pay this amount and you get this much value. Yeah. And that's it. Like it's not the value isn't unlocked over time or anything like that.
Speaker 2:So but I what I'm trying to get at is the model could have worked. Yeah. It just for the way that I wanted the business to run, it didn't. Yeah. So
Speaker 1:Yeah. And I think and we can end with this. One of the kind of impactful conversations you and I had at MicroConf was because you're further ahead than me. I I didn't go full time with products until 2016 last year. And one of the things you said, looking at me, said, Justin, you're working way, way harder than me and way making way less money.
Speaker 1:And it's almost like you were evaluating my profitability. You're like, not just in terms of, like, yes, my time is worth something, but also my stress, the, you know, the amount of things that could go wrong, the, amount of buffer I have for things like getting sick or whatever.
Speaker 2:And You've got, like, a million kids too. Right?
Speaker 1:And I've got four kids and, you know, all that other stuff. And so I think do you want to talk a little bit about that just to close? Like, what are some things you think people get wrong around that of, you know, maybe not evaluating how they're investing their time or how they might be able to move to something that's better.
Speaker 2:Well, I think you've got mean, in a way though, what I would say is you and I have very different styles and what we do, right? So you're extremely charismatic whereas I'm not that charismatic unfortunately. I wish I was. But what I mean is that I think you thrive more than I do on the things like what you were just doing, the live YouTube thing, right? Like that's the kind of stuff and that's impressive as hell.
Speaker 2:But I think what was getting at was like my big thing, and I've been helping on this for a while is, you know, I think a lot of us are very much in the weeds of like doing things like I'm gonna, you know, do this thing and like work really hard to like promote the hell out of this and do lots of like this and that. And the big realization from you know Tim Grall? Yeah. You know him? Have you met him?
Speaker 2:Yeah. So and I were talking a little before MicroConf, which is probably where that someone came from. And he's like, look, I wanna have a business that if I got hit by a bus and went into a coma for, you know, a year, there should be minimal impact. And so, you know, with that said, it's like, what can we do? It's a bit like, for instance, I give, you know, when working with freelancers, for instance, a lot of them are the way I describe it, like working in this almost inertia driven business, right?
Speaker 2:Where it's, you know, if they wanted if they had to step away for a while, do they have the right systems in place? I mean, granted it's much harder when you're selling services because it's really no fulfillment outside of you doing the work. But what I like looking at and what interests me the most is maybe this is the lazy developer in me. But I'm looking at like, what can I do to systematize as much as possible stuff because computers are awesome and can do things without manual input? Yeah.
Speaker 2:So like in my case, that meant I don't want to be on the hook to write a weekly email in order to get new sales. Yeah. I want to have things that will look at like, what have people read and what haven't they read and what order they focus on and send them weekly emails entirely automatically. Yeah. Based on the the content I read.
Speaker 2:I mean, if I was doing this from scratch, like with Right Message from scratch, I don't have a stable of content to to do that. Right? Yeah. But I'm always looking for like, what can we do to make it so we're not we can focus high level R and D, like really running the company. Yeah.
Speaker 2:Even if it's company of one versus the like, I need to bang out broadcast emails so I can keep getting sales.
Speaker 1:Yeah.
Speaker 2:You know?
Speaker 1:Yeah.
Speaker 2:That's what I find fascinating like that kind of stuff,
Speaker 1:you know? Yeah. And I think that's super important. Like at the beginning, you're just hustling so hard. But what
Speaker 2:was that on off. Yeah.
Speaker 1:What was kind of, like, helpful for me to hear from you was, Justin, I've been doing this longer. And if you want this to be sustainable, like, you want to last, you need to systemize something. So first of all, that you have more time to think about your business. Right? Even if you're a company of one, like you said, the founder's number one job is to just think about the business.
Speaker 1:Like, what's coming up next? What am I seeing? What research am I getting? What patterns are emerging? And if all I'm doing is in the weeds, like, work, work, it's not going to be sustainable.
Speaker 1:I'll never grow the business to be actually profit. Yeah. And I think that's the switch that I'm now making is that, okay, I've proven that I can make a living from this, but a business's whole purpose is to make profits. If I'm investing my time in this and more time and money in this than the stock market, I better hope that this is going to give me better returns than the stock market. And that means 10%, 15%, 20% profit margins.
Speaker 1:So, yeah, I thought that was an awesome message and just depending on where people are at, probably exactly what they need to hear.
Speaker 2:But you can't start you can't start there. I mean, you need to start I know like I so when you were talking I know I never know when you start recording. When we were talking at the beginning
Speaker 1:Yeah.
Speaker 2:You were asking me about like the weeks of like craziness I was doing with these one on one demos. Yeah. Like, I think it would be easy to get a date to that high. Yeah. And to keep just doing that to like pound the pavement for MRR.
Speaker 2:Yeah. But it had its place and it's still, it's not over yet, but it has its place for the life cycle of the company that I'm working on now. But that's not like gonna be my role hopefully in a few months or and beyond, right? Like that's, it's one of those things where it had to be there. But I get the I know the addiction of being able to do that, getting on a demo, closing somebody and getting them to buy and seeing that new verse and like, I've got $300 a month and added MRR.
Speaker 2:That's awesome. But it's just one of those things where we need to start there. You know, like when starting a new business, you need to start with the things that don't scale. And the things that are maybe to some people like my personality type, more annoying than other people. But it's one of those things where eventually, you know, have you read anything you want by Derek Servers?
Speaker 1:Yeah.
Speaker 2:Yeah. But you know, he talks about like the how and this is not anything new. I mean, this goes way back to like eMet stuff. But like the idea of like a franchisable business, even if you never plan on franchising it.
Speaker 1:Yeah.
Speaker 2:It's that same model. Like, you know, like the owner of the Quiznos is or the I don't know if you guys have Quiznos there. We don't really Yeah. Yeah. Okay.
Speaker 2:Cool. Well, I don't they used to be awesome. Like, they or go anyway. Yeah. Like, you know, the owner of the the Quiznos, he or she is not like winging it every day, right?
Speaker 2:Like you're following the Quiznos playbook. And even if you've got no one else working for you and you don't ever plan on like, you know, how you franchise an online business, let's say you did. Right? Like you should be able to do that. Like it's just better for the business, better for everything.
Speaker 2:But it's hard to like when you make that switch, when you go from the hustle, nonstop, whatever mode to actually stepping back and saying, okay, let's take this now to the next level. And yeah, it's hard to and I'm not saying like even once you're in that, it's easy to go back and like just starting the things that and it makes sense. Like there's room for the things that don't scale, right? Like there's room for the things that are things you might do early on. Like one thing, I respect the hell out of Pat Flynn because even though he's got an amazing business, he still randomly jumps on Skype calls with people who just opted in that day.
Speaker 2:And it's like, Hey, what got you to sign up to my list? And like, that's more important early on. But it's good that that stuff still happens.
Speaker 1:You still need some of that stuff that doesn't scale to stay kind of current. I think the, the time where you switch to scaling mode is when you've built a few things, you've had multiple launches, maybe for multiple launches for the same product. And then you could say, okay, I've done this now two or three times. What can I just automate and not have to think about anymore? And I'm still doing manual launches, but I'm, I, one thing I've noticed is that I just keep going and back and copying the same emails and like modifying them a little bit.
Speaker 1:So that could probably be automated now. And I have noticed that each launch gets easier and I have more time. And so, you know, I just finished a launch for Marketing for Developers and now I've got time. I'm kind of like, Okay, what do I do next? I don't know.
Speaker 1:This is a good time to think about how I might automate and scale the, you know, the next launch.
Speaker 2:Right. And that's the beauty, right? Like you've got the you've done this enough times that then you can convert that. You know, I like to think of it like and this is something I've been really harping on a lot recently is this idea of like, when I do a new product now, I sell it conversationally where it'll be like PS and the end of a newsletter where it's like, hey, I'm thinking of doing this. If you're interested and wanna hear a bit more, like respond.
Speaker 2:Yeah. And then I try to sell everyone over email, maybe over the phone, but usually just over email. Give them the buy link when they're ready. Do that a bunch. Collect that dialogue that can then be normalized into a monologue.
Speaker 2:And then, you know, do the monologue in a way like you were saying, where you're doing these big launches. But then over time, can start seeing, oh, wait, you know, like, I'm, you know, like the guy who joined yesterday versus the person who joined like three months ago, they're not both ready for a launch in the same way. Right? So, like, what can you do then to say, okay, well, how can I make this more of a life cycle launch rather than a on Justin's timetable launch? Right?
Speaker 2:Yeah. And but by doing it more conversationally and then doing it this way and then, you know, putting into place automation, that's the thing that to me is like the ideal path
Speaker 1:Yeah.
Speaker 2:For this kind of stuff.
Speaker 1:Totally. Brendan, this was awesome, man. I really appreciate your time.
Speaker 2:Awesome. Thank you, Justin.
Speaker 1:Okay. Thanks. So that's it for the first mega profitable episode. Again, I'm gonna be publishing more interviews here on the product people feed. But if you wanna get all of these case studies with detailed answers to, you know, what makes a product profitable, how can you make your products more profitable, you really need to go to megamaker.co/profit.
Speaker 1:Sign up on that list, and you will get all of the future case studies. If you're already on my newsletter, you'll already get them. But if you're not, megamaker.co/profit. Also, please go on Twitter. Thank at Brendan Dunn.
Speaker 1:Go and check out his new project, writemessage.com. Also, go and check out doubleyourfreelancing.com. If you especially if you're a freelancer, he's got tons and tons of great stuff for you. I'm Justin Jackson. You can follow me on Twitter, the letter m, letter I.
Speaker 1:Justin, if you're still listening, could you just hit me on Twitter and say, hey. I heard that episode and tell me what you thought. That'd be awesome. Also, because this show hasn't been as updated as much, if you go to iTunes and leave a review, that would be amazing. Alright, folks.
Speaker 1:Talk to you later.
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