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As the CEO of Kit, Nathan Barry has a front row seat to what’s working in the most successful creator businesses.
On The Nathan Barry Show, he interviews top creators and dives into the inner workings of their businesses in his live coaching sessions.
You get unique insight into how creator businesses work and what you can do to increase results in your own business.
One of the things Nathan is passionate about is helping you create leverage.
Creator Flywheels let you create many copies of yourself so you don’t get bogged down with the little things in your business. Flywheels will help you reach a place where you can focus on revenue instead of busywork.
Tune in weekly for new episodes with ideas and tips for growing your business. You’ll hear discussions around building an audience, earning a living as a creator, and Nathan’s insights on scaling a software company to $100M.
Learn how to get more results with less effort and:
Grow faster over time.
Work less hard over time.
Make more money over time.
[00:00:00] Nathan: Chandler, we're taking over your office. I want you to break down what, what works from 1 million to get to that stage and then to go to 10 million in revenue and then from 10 million and beyond. But before we do that, when I walked into the space, there's one thing that really stood out to me. I mean, first it was your team was wonderful.
[00:00:18] They were like greeted us. Everyone was, uh, very warm and welcoming. The other thing that I noticed is you have metrics everywhere. I saw YouTube metrics on the tv. I saw sales metrics on the whiteboard right outside this room. Talk to me about why you have metrics so visible everywhere in the office.
[00:00:35] Chandler: I remember going to a, an event one time with Vern Harnish who wrote the book Scaling Up.
[00:00:39] Nathan: Oh yeah.
[00:00:39] Chandler: Rockefeller Habits, all that stuff. And he said, why do people get so excited about sports cheering on a random team that they're not even involved with? Yet you can't get them to crawl outta bed in the morning to work at your company. Okay. His whole, his whole premise was because there's a scoreboard.
[00:00:58] Mm-hmm. And when you have a scoreboard, it becomes interesting because now I know if I'm winning or losing. So for me, that always stuck out to me. And his thing was, why can't you make business as fun as sports?
[00:01:08] Nathan: Yeah.
[00:01:09] Chandler: And, and, and so how do you do that? Well, you need to have a scoreboard. People need to know if they're winning or losing.
[00:01:14] That scoreboard needs to be visible. This is like all these kind of core components. So I just think if you don't know the score, you can't win the game. And if you, if you don't know if you're winning or losing, you can't get excited about playing the game. So that's why, you know, we, we, we, we talked about this, but you know, we went zero to 75 million all remote.
[00:01:32] Now we're going all in on office, in office, which is very, I think, counterculture to how most people are thinking. And so when I said, alright, now we finally have the ability to design our own space, which we've always been upset some metrics, but now we can put 'em in the physical space. So as you've seen.
[00:01:48] There's rocks. What are our most important things? What are the, what's the benchmark? And so I want everyone to know the score and know if they're winning or losing.
[00:01:56] Nathan: Okay. So walk through a few of those metrics. Like there's all of the content metrics I saw, and there's the, the tv, you know, is all the channel dashboards.
[00:02:05] Yeah. Uh, all of that. What are maybe like three or four of the most important things, uh, that are up there?
[00:02:10] Chandler: Yeah. Well, I mean, I think the most important thing for a business is revenue growth. Well, the most important thing is profit. But Yeah. How, how do people control that on a daily basis? Not so much. So if you're trying to drive growth, you're probably trying to grow, drive revenue growth.
[00:02:24] So I wanna have that visible, but I want them, I, we could go in a whole conversation about this, but there's leading and lagging, lagging metrics. Mm-hmm. But then there's also like, I want each person to know what their top three KPIs are. No more than three key performance indicators for the success of their role.
[00:02:41] And then I want them to be visible. So to directly answer your question, we've got the media room. So in there I want them to know, alright, on our social channels, are we growing follower account and are we growing revenue On our sales floor here we've got, it's a rotating dashboard where it's at the very top, it's where we trending for the month.
[00:03:00] So if our, our target's like a million bucks or something. Okay, well where are we at? And then how much, you know, based on the month, how much percent are we there? Then I wanna know, are we winning the day? Which this, I, I think some people think this is weird, but we have green days and red days.
[00:03:15] Nathan: Mm-hmm.
[00:03:16] Chandler: So do we hit our revenue target for the day that's up there on the dashboard.
[00:03:19] Also, when we do hit a green day, all you gotta do is say, Hey, Alexa, go green. And then the lights go green on the ceiling and it starts playing this song like, it's a fun, I wanna make it fun. The fun is in the winning. And then I want to have top performers. So on one dashboard it's our top sales reps in order of who's at the top, and then top SDRs, nor of who's at the top.
[00:03:41] They're competitive obviously. So that that kinda gets the juices flowing and then it rotates and it's the day who's made the most calls, who's connected with the most potential authors, who's set people made sales and all that stuff. So like that's the sales metrics. But then, so you had,
[00:03:56] Nathan: yeah, you, you very clearly called out your leading indicators.
[00:03:59] Mm-hmm. And your lagging indicators. So revenue is the lagging indicator.
[00:04:02] Chandler: Yes.
[00:04:02] Nathan: A lot of people get obsessed with the lagging indicator and they just beat their heads against the wall.
[00:04:07] Chandler: Yeah.
[00:04:07] Nathan: Or. It might look like someone gets a few lucky sales, and so then their legging indicators look great, but the person who's been establishing pipeline and building this up is not gonna show up in there for a while.
[00:04:18] And so when you balance that with the leading indicators of the conversations that they're having leads generated, any of those things, then you can see like, okay, this work is all happening.
[00:04:27] Chandler: Yeah,
[00:04:27] Nathan: and it's going to materialize. Or if it doesn't. Then I can at least spot the problem.
[00:04:32] Chandler: Exactly.
[00:04:32] Nathan: Okay. Maybe it's in our conversion or some other step.
[00:04:35] Like you're doing all the work and the product is good and so I can figure out, okay.
[00:04:39] Chandler: Yeah. Well, and then we, we call it control the controllables. So it's like, well, what can you control? 'cause if you're just focusing on lagging, I don't know. And so kind of to the, maybe the point of what you're doing with all the YouTube channel stuff.
[00:04:51] Well, you know, you're leading indicators is what's our click through rate on the video or the thumbnail or the title? What's the average view, duration percent complete? Then what are our follower growth and then what's our revenue? And then there's, you know, probably some leading indicators between follower growth and revenue.
[00:05:08] But Okay. 'cause right now, I mean, I'm earlier days than you are on this whole content thing. If I was just every day talking to my content team, like revenue, we need revenue, the content would suck. Oh yeah. You know, everything would be best. It's like, all right, well we should focus on this whole bucket and get really, really good here and trust that this piece is gonna come over, you know, six months from now, 12 months from now.
[00:05:29] Nathan: Yeah. I mean, there's so much in that. I'm thinking about a lot of creators who might be listening who are running a solo business, or them with two to three team members either driving a million a year in revenue. Uh, and so they've got this like epic business and they're thinking about how do I scale it?
[00:05:44] Chandler: Hmm.
[00:05:44] Nathan: But probably not tracking metrics. I know when I was in that position, I didn't track metrics at all. I was looking at revenue and maybe follower account and all that, but I wasn't breaking it down and leading to lagging indicators.
[00:05:55] Chandler: Yeah.
[00:05:56] Nathan: Are there things like at that scale, maybe you don't have a sales team that you'd be thinking about you'd want to track or, or how you'd wanna handle it?
[00:06:03] Chandler: Well, I think the question that I would ask that creator right, is maybe at a about a million a year is what are the three most important metrics in your business? Mm-hmm. Do you know what they are? And then that's the starting point. But then after that, I would ask. What are the three most important activities that lead to improvement in those metrics?
[00:06:24] Yeah. Because then that's what you really want to get clear on. So is that the frequency that I am posting, is that maybe my, maybe a leading indicator is the size of my email list. Right. Right. And then, so what are the activities that actually drive that revenue? I'll just give you an example. We found that the number of people who watched a webinar or a live training, sorry, or a video training of some sort.
[00:06:46] Mm-hmm. Directly correlated with the amount of people that book calls with us, which direct and the quality of those calls, which directly correlated to the amount of revenue. So then we just said, all right, well how do we get as many more people as possible watching a live video training? And so that's just kind of, 'cause that's a lever.
[00:07:04] And then there's o there's other ones in the business, but just figuring out what are your top three metrics mm-hmm. In the business and what are the top three kinda levers to improve those metrics.
[00:07:12] Nathan: I'm realizing this is why so many people like YouTube so much, so many creators, like it is because you have all the metrics, like the scoreboards, the tools, it's all built in.
[00:07:20] You're like okay's, like stepping onto the football field and you're like, all right, I know how to play this game. You know, I, it's fun. I know it's I winning or losing
[00:07:26] Chandler: and kind of overwhelming, but
[00:07:28] Nathan: yes, it's very overwhelming, I promise. It's fun. It's fun. Keep telling yourself it's fun. You're talking about the red, red days versus green days.
[00:07:36] Chandler: Yeah.
[00:07:37] Nathan: And, and making it fun in that way, like having the Alexa Q which I guess we can't say too loudly because Yeah, yeah, yeah. You're like whispering, triggering people's Alexa. Yeah. Um, but in that, what is there a ratio? I, I guess it comes down to how high you set your goals. Is there a ratio that you look for of like red days and green days?
[00:07:59] Because if you were a hundred percent green days, you probably didn't set very meaningful.
[00:08:03] Chandler: Yeah, the goal isn't high enough. I don't know about you, but I've never had a problem setting too low goals. I haven't not, our
[00:08:10] Nathan: teams are just like, we hate you.
[00:08:12] Chandler: Yeah, yeah, yeah. Uh, they told me that many times. Uh, but I mean, I would, I would suspect a lot of people watching this maybe don't have that problem either.
[00:08:20] But the core premise for me and kind of where this came from. As I remember one of my first businesses, I ran a h House painting business. Mm-hmm. So, uh, we would knock on people's doors, convince them to let us paint their houses, and then we would paint those houses. Right? And so I met with my boss at the beginning of the year.
[00:08:36] I said, I wanna be number one in the company, number one in the country. I wanna do a hundred thousand or 130,000 revenue, or something like that. And he said, okay, let's map back all of those things. And so then he said, well, what do you need to do per month? What do you need to do per week? What do you need to do each day?
[00:08:53] And we just kind of mapped it out. And it, it sounds so simple, but I think so many people don't do that where it's like, okay, I wanna hit a million with my creator business. Okay, well what do you need to do per month? Right. 83,000 and some change. Right. Okay, well then what needs to happen for that to happen?
[00:09:08] And, and so that's where the premise started. And then I just realized that in my pursuit of being number one in that company and number one in the country for that organization. My premise of, you know, I'm a college dropout and a C-level English student with a DHD. So if they, if you can't explain it on a napkin, I probably don't get it.
[00:09:27] So I'm just like, well, logically, if I want to be number one in the country, I need to be better than everyone else in the country every day or more days than not. Yeah. And if I can't definitively say yes to that question, was I better than everyone in the country today for enough days in a row, well then I'm probably not gonna hit my goal.
[00:09:47] So that's kinda where it came from to just, and then in the business, it, it kind of, we've embedded it to where it's just like, what's our target for the year?
[00:09:54] Nathan: Right?
[00:09:55] Chandler: For the month, whatever. Okay, so are we green or red? Like if, if we keep going red, we can't expect to hit our monthly goal. So I don't know if that answers your question, but that's just kind of how we think about it.
[00:10:05] Nathan: Yeah, that makes sense. So would you like, I guess, to try to get to a percentage, would you say you're 60% green, 70% green.
[00:10:15] Chandler: Depends on the season. Yeah. When we're not performing well, we're probably 30, 40% green. Okay. When we are performing well, we're probably 60, 70% free. Okay. Net almost never a hundred unless or near a hundred.
[00:10:27] Unless we're just ripping and something
[00:10:29] Nathan: crazy happens.
[00:10:30] Chandler: Yeah.
[00:10:30] Nathan: Yeah.
[00:10:30] Chandler: Last month that was good.
[00:10:32] Nathan: That's a good month.
[00:10:32] Chandler: That's a great month. I like it. I'm like, wow, okay. There's something, this whole winning thing, when you set lower targets and then exceed those targets is actually way more fun.
[00:10:42] Nathan: That's an interesting thing.
[00:10:42] 'cause I'm the person, it sounds similar to you, where I'm like saying these big targets and we don't hit them and, and then if you set slightly lower targets and don't hit those, like you can get into this vicious cycle that's pretty demoralizing for the team. And we're having a year right now where for the first time in a while where like we've always set high goals.
[00:11:02] This is the first year that we're like exceeding them consistently. Yeah. And you're right. Like it's really, really fun. And so I always struggle with that balance of like. Where to set the goals so that it's, uh, a stretch but also motivating rather than demotivating.
[00:11:17] Chandler: I, that's the story of my life. I mean, I think it's, uh,
[00:11:21] Nathan: neither of us have the
[00:11:22] Chandler: answer Kanye lyric, you know, reach from the stars.
[00:11:24] If you fall, you end up on the clouds or
[00:11:26] Nathan: Yeah.
[00:11:27] Chandler: I think I theoretically want to do that, but when it comes to practice, I really struggle to do.
[00:11:33] Nathan: Mm-hmm. Alright, so let's, let's go to this, this idea of going from zero to a million, and I'd love to get a quick breakdown of like some of the things that you thought were most important in that, and then we'll turn our attention to one to 10 million.
[00:11:44] Chandler: So zero to a million. That is you need paying customers. Mm-hmm. Until you have paying customers. You don't have a business, you have a business idea. I think so many people, creators included, they obsess over the LLC, the logo, the website, and a bunch of things that don't matter. I had a buddy the other day and he's like, ah, what do you think about this name for an LLC?
[00:12:05] Like you got customer shit.
[00:12:08] Nathan: That's such a good question.
[00:12:09] Chandler: I don't care. I don't, the lc name does not matter, right? You need paying customers. And so I want to, you know, that, that is the most important thing. And then you probably need some sort of lever or customer acquisition tool. So I, I mean, for me, that was borrowed audiences.
[00:12:27] Mm-hmm. So I think, how do I go one to many in front of other people's audiences is kinda like the, you know, I, I grew up riding dirt bikes. Like, it's kind of like the, the jumpstart to the engine. So can I do partnerships? Can I do in your world? Can I get, can I get a mailer to someone's newsletter? Can I get on someone's podcast?
[00:12:45] Can I go speak at the event in front of a hundred people? So can I go one to many in a way that can get paying customers?
[00:12:52] Nathan: And so, so in that. Like there's a million ways to grow an audience, to get attention, to get leads and all of that. And we were hanging out in Montana fly fishing and our mutual friend Brian Harris was talking about how he used to have, you know, his, for his business growth tools is he was teaching clients.
[00:13:08] They had like 94 playbooks that, that they could run and they distilled it all down to four, which really is just one. And that is borrowed audiences.
[00:13:17] Chandler: Yeah.
[00:13:17] Nathan: And so choosing this is the one thing that I'm gonna do over and over again. Brendan Dunn, who is an amazing content creator, Mike, marketing automation expert, I've watched him do this where he is like, look, I'm just gonna do webinars and workshops, other people's audiences.
[00:13:30] Yeah. Over and over again. And so like choosing one thing like that and just saying, I'm gonna get ridiculously good at this. Yeah. I think works really well at that stage
[00:13:38] Chandler: when I think it's, to your point, it's one product, one marketing channel. Mm-hmm. Done Well, that's, and so for me. That first million. It was, we launched Self-Publishing school at the time.
[00:13:52] Now it's obviously self-publishing dot com, but we launched it to a handful of affiliates. We did some basic ads, but really it was affiliates and the launch was 80% of our business, 90% of our business. That's how we got to a million. And then the hard work starts.
[00:14:06] Nathan: Yeah. So yes. Oh man, there's so much harder, I think it's
[00:14:11] Chandler: hard
[00:14:11] Nathan: to get a million,
[00:14:12] Chandler: which it is.
[00:14:13] But I mean, and that's a real hard work.
[00:14:15] Nathan: Like I think that you should, maybe we should say this publicly, but I think you should lie to entrepreneurs and tell them that it's easier. No, the just say the first million is the hardest.
[00:14:23] Chandler: The first million. The hardest.
[00:14:26] Nathan: Because on one hand it is like almost no one gets past that point.
[00:14:30] And so for 95, 99 0.9, whatever percent of the human experience, like the first million is the hardest. Yeah. And then once you get past that point, it's like. The next, the next 10 is the hardest.
[00:14:42] Chandler: I know you're working on your book right now. This is so parallels to stuff we teach people with book stuff is I tell them that writing the rough draft is the hardest part.
[00:14:49] Really? It's editing,
[00:14:51] Nathan: but you can't
[00:14:52] Chandler: edit. But I'm like, yeah. I'm like, well, you can't edit a draft that you don't have. So how am I gonna pontificate about the future? Hardest part. This is the hardest part. And then they get the draft down the link. Congratulations. You now officially entered the hardest part, which is editing your work.
[00:15:05] Nathan: Yeah. And then that's where I'm at right now. I have just finished the rough draft and a little to tweak in the conclusion, you know, that sort of thing. Then like, okay, this is, this was the basic rough draft. And knowing from you and you know, all my other friends who have written books, like, okay, now the, you know, it's like we're 80% done and now we just gotta do the next 80%.
[00:15:27] Chandler: Yeah, yeah, yeah. So Nathan, how did you become an alcoholic? Well, I started editing my own book, but I think like back to the whole million and all that stuff, it's okay. The first million is the hardest. But then, then the real work starts in my experience, and I don't know, I'm sure you've seen this in your world, there's so many million dollar business owners that make less than any good employee.
[00:15:50] Oh yes. I mean it, they don't, probably don't even make a hundred K. You might make 50 grand, 75 grand, and so that is like the broke, you don't have a business,
[00:15:59] Nathan: you got a job. I know so many people who made significantly more, like made incredible amounts of money up to a million, and then they went into.
[00:16:08] Take that next leap. And their margins went from 80% to 10%. Yeah. As they hired a team and their stress went through the roof and everything else. And they're realizing like, wait, I'm taking home the same or less than when I had just a job and not anywhere near the level obligation that I have now.
[00:16:27] Chandler: Yeah, a hundred percent.
[00:16:29] And so that, this is where I think it's important to, we just did this whole series on our YouTube channel. It's like the, we call it the eight figure profit bridge. And it's like there's five Ps in this profit bridge, and the first one's paying customers. But I think when you go from six to seven figures, you gotta go from paying customers to product market fit.
[00:16:46] Nathan: Mm-hmm.
[00:16:47] Chandler: And I remember when I lived in San Francisco, I had this guy that said, I don't go into a company until they have product market fit because it's the least efficient. Part of the whole process. And he's a marketer. He is like, I can't market something that doesn't have product market fit. And so I think that's like, that's something that not a lot of people talk about, but you've gotta then say, okay, can I do this at scale and do people want what I have to sell?
[00:17:10] And so you got, maybe that's where you start tinkering with a product to just say, all right, how do I make sure that people love this and want this? And then you move into, alright, now we gotta have scalable customer acquisition channels. We gotta get into some of the basics of like, our lifetime value needs to be greater than our, our cac plus our cost of goods sold, plus our operating expenses.
[00:17:32] And like kind of all that like basic unit, unit, unit economics that you gotta have to scale. And then you've gotta have scalable customer acquisition channels that both have, that can increase, but that also are profit. I mean, I've got, there's a whole bunch of things I could talk about there, but that, that is where we say start to get into.
[00:17:51] Product market fit and then ultimately building out your people, your process, kind of
[00:17:56] Nathan: all
[00:17:56] Chandler: this stuff.
[00:17:57] Nathan: So let's go product market fit. What's like, how do you think about when you have product market fit or being able to recognize if you're sitting down with another entrepreneur in May, like Oh yeah, you've got this as ready to scale.
[00:18:08] Or if you'd be, they're ready to scale, or they think they are and you're like, actually let's, can we write it back and like focus on if you actually have butter market fit?
[00:18:15] Chandler: Yeah. I think the most simple way to figure it out is answering the question. When you talk to your ideal customer and explain what you do, do they say, where can I get that?
[00:18:26] Mm-hmm. And, and, and then could you write it on a napkin? And then they say, oh, where can I get that? So then we think about, you know, person paying promise price. So what's the person that this is for? What's the pain that they have that they know that they have? It's gotta be painful. It's easier to sell.
[00:18:43] Nathan: That they know that they have is really important. Big one, because convincing them is. Maybe you, you are able to convince them, but it's usually just this incredible uphill battle where you spend forever doing it.
[00:18:55] Chandler: Yeah. Oh, it's, what's the quote of pioneers come back with arrows in their back. I mean, if, and if you have to educate a market, I think this may be breakthrough advertising.
[00:19:02] If you have to educate a market, there's so much more work that has to be done versus if you channel creating demand versus channeling existing demand. So what's the pain that they have, that they know that they have? What's the promise that you're making with your product? And then what's the price that makes sense and your value-based pricing.
[00:19:19] So like, I think you gotta nail those things to have product market fit, but most simply it's, Hey, you have this problem. What if I was able to offer this, uh, this promise? Right? So you are my ideal customer. You have this pain or problem, here's a promise that I think would be helpful for you and, and here's how the pricing works.
[00:19:39] And then do you say. Visa or Amex. Yeah. How do I pay for this? Shut up and take my money? Obviously that's the, that's the biggest one. If people are just like, Hey, mm-hmm how can I pay you? Right? So that's how I kinda like think about it. And if you're not there yet, then what we did early on, and this I think really practical for creators, is we did a ton of why didn't you buy calls?
[00:20:00] So people who applied to work with us are kind of like took a step right before working with us and then didn't do it. We just said, Hey, we'd love to get on the phone with you for 15 minutes and just hear winding you by. There were two benefits of that. One. We ended up making a bunch of sales. 'cause people just tell you their objections.
[00:20:15] You're like, had I known that? I would've just answered that from the beginning. It's like, well, I need to talk to a real person. It's like, well, great. I am a real person. Let's get you signed up. Right. So the, so you ended up with a bunch of sales from that. But then the second thing is, is, is we ended up with so much feedback.
[00:20:32] So how'd you hear about us? What did you, what's the problem that you have? What, what'd you think of the pricing? Like all this stuff. And so then we used that in all of our future marketing material. So the next time we launched and started marketing people were like, man, it feels like you're reading my mail.
[00:20:46] Nathan: Right.
[00:20:46] Chandler: How did is that, you're speaking exactly what I'm thinking. How did you know that? Well, because I talked to 50 people just like you. And I took notes in the spreadsheet of all the problems that you're having and all this stuff. So, and then I just regurgitated that back to you on the sales page and the marketing materials, all that stuff.
[00:21:03] So, sorry, this is super long answer, but that's kind of how I think about the product market fit.
[00:21:08] Nathan: Yeah. Okay. And then after product market fit, what, what was the next thing you wrote?
[00:21:11] Chandler: It was profit. So if you, you know, I love this quote from Keith Cunningham, which is, revenue is vanity, profit is sanity, cash is king.
[00:21:20] So if you don't have cash, you're outta business.
[00:21:22] Nathan: Yep.
[00:21:23] Chandler: It doesn't matter if you tell the bank, oh, but look at my p and l. I got so much profit. It's like, well, uh, your profit, your profit is not cash. That was, that was a weird one to me. I'm like, wait, what profits not cash? Yeah. I thought that was the same thing.
[00:21:36] Turns out it's not. It's at all. Right. But we are not even there yet. I mean, that's more of like an eight figure problem in my opinion. Kind of, uh, but so, but then you gotta be profitable and then revenue is vanity. So this is where when you're crossing over, maybe you're a million a year, a few million dollars a year, you gotta start looking at, am I profitable?
[00:21:56] Mm-hmm. What are my most profitable channels? Because that is gonna fuel scaling. So I just think, you know, so many people get into this wiener measuring contest of Raven Nailed.
[00:22:08] Nathan: Yeah. And it's such an easy thing to throw out there. And then, especially in, if we're in the digital marketing space and people are relying really heavily on affiliates or something else.
[00:22:17] Chandler: Oh yeah.
[00:22:17] Nathan: Then someone's like, oh, I did a million dollar launch. And you're like, cool. Can I see the unit economics behind that launch? They're like, I did a million dollar launch. Yeah, yeah.
[00:22:24] Chandler: Yeah. I dunno if you heard me, it was a million dollars. You're like, let's say if call 50 bucks, it's like you bought someone a car for your affiliate contest.
[00:22:36] Like where is, how does this work? Yeah, I mean, I think it's, uh. I think you've really gotta start looking under the hood there and say, how do I get profitable? Because if you're not profitable, it doesn't scale. And I don't know, to kinda to your point, I think oftentimes you show up these entrepreneur meetups and they're like, all right, what's your revenue at?
[00:22:56] Nathan: Yeah,
[00:22:56] Chandler: what's your head count at?
[00:22:57] Nathan: Yeah. Those are the two metrics that are like socially acceptable to throw out. I guess
[00:23:01] Chandler: what they really wanna know is, how much did you make in your bank account last month? But they're too scared to ask back. So then as a newbie entrepreneur, myself included, I fell into this revenue trap.
[00:23:10] This people trap, I call it chasing the revenue rabbit. It's like, mm-hmm. I wanna sound important amongst my peers, so I sound more important if I tell them I have more employees.
[00:23:21] Nathan: Right. So let's get more employees.
[00:23:23] Chandler: Yeah, exactly.
[00:23:23] Nathan: Which is the most devastating thing you can do for profit that is the most expensive line item in every business and
[00:23:29] Chandler: your time and your wellbeing.
[00:23:31] Nathan: And then, uh uh,
[00:23:33] Chandler: well I think you're, you I, I'd love to hear kind of your perspective on this. 'cause I think you've very publicly for a while at least, were like, Hey, we've got X goal with X employees. And I says, that's been really inspiring to me is like how much and how well can you build with a smaller head count.
[00:23:49] Nathan: Yeah. So I actually had this idea, I've always loved this, a small team. 'cause then I feel like you can really invest in people. It forces you to have like the highest quality team. And I think, you know, just great team members attract other great team members. And so I actually had this rule of like, oh, we're gonna grow to 50 people and we're never gonna grow beyond that because like, software should give us leverage, audience should give us leverage automation, you know, all that.
[00:24:12] I realized that I had too many ambitions for like, other product lines or things I wanted to do to fit within the 50 people. And it created some weird like, team dynamic things of like, oh, we're at 46, so if this other role opens up, does that mean that, you know, Joe's gotta go? You know, or like, it's like not a, not a useful thing.
[00:24:33] So it was like interesting in theory, but like in practice, not so good. We ended up switching over to a revenue per employee model.
[00:24:39] Chandler: Okay.
[00:24:40] Nathan: And so now we won't hire unless we're at least $500,000 in annual revenue per employee. Now the team's bigger. We have 98 people on the team. So I guess someone could do the math on revenue if they want.
[00:24:50] There you go. Um, but, uh, that's the, the model that's worked well for us. And there are like very rare times we might hire slightly ahead of that if we know we gotta get this, this roll and see. But it forces that efficiency.
[00:25:05] Chandler: Yeah.
[00:25:05] Nathan: Um, and then we just have a steady plan to increase. And I think we also got to a size relative to the number of problems we're solving the market that it fits pretty well.
[00:25:16] So like, we're gonna end this year right, at about a hundred people and I think next year we'll go to like 106.
[00:25:22] Chandler: Oh
[00:25:23] cool.
[00:25:23] Nathan: So it's not like, you know, you get these companies where it's like, we're gonna double head count next year. I'm like, no. If we're gonna
[00:25:32] Chandler: double profit, double double head count.
[00:25:34] Nathan: Yeah.
[00:25:36] Chandler: That could be the hook of this episode.
[00:25:37] Doubling profit without doubling head count.
[00:25:39] Nathan: Yeah. So there's so many things in there. Like for me in this journey to 10, I actually probably learned it later. Because we were in this like just scale revenue. And in the software world, that's all anyone cares about is revenue. Like in startups and I mean, you spend all your time in Silicon Valley, like, you know, they don't, they don't care at all.
[00:25:57] Unicorn or bust. Yeah. Uh, and so we focused very heavily on, on revenue growth. So I didn't actually even pay attention to gross margin until, I dunno,
[00:26:08] Chandler: like five years ago or something. Like, we were probably well over 20 million in revenue before. Wow. We paid attention to gross
[00:26:14] Nathan: margin. Wow. And now it's something that we, like this year we're paying a lot of attention to it because a 1% increase in gross margin on, you know, 50 million in revenue is really a lot of money.
[00:26:24] A hundred percent. And then you were talking about like customer acquisition costs and lifetime value. If you can, we're like so in the weeds right now, but if you can improve gross margin, uh, even a little bit, that that gives you that much more that you could spend to acquire a customer. Like if you're going head to head with a competitor, like
[00:26:41] Chandler: Yeah.
[00:26:41] Nathan: That is a true advantage.
[00:26:43] Chandler: Yeah.
[00:26:43] Nathan: And so. Things like, as we look at our server costs, you know, there's an extra 75 grand a month in server costs that if we can switch to a totally different architecture, and it might take us six months to do it. Um, but that's worth it because if it frees up that money and gross margin, so that,
[00:27:00] Chandler: yeah,
[00:27:00] Nathan: that might be, you know, in the eight figure and beyond.
[00:27:02] Chandler: Yes.
[00:27:03] Nathan: Hundred
[00:27:03] Chandler: percent.
[00:27:04] Nathan: But those are things that really matter.
[00:27:05] Chandler: But there's a, there's a version of that in here.
[00:27:07] Nathan: Yeah.
[00:27:08] Chandler: Right. So we talk, we talk, uh, you know, you've got paying customers, you've got product market fit, crossing the million dollar mark, then okay, let's get profitable. 'cause if we have profit that we can scale and we can reinvest that and growth.
[00:27:20] And then I start thinking about, well, a few other things, but there's people in there process.
[00:27:25] Nathan: Mm-hmm.
[00:27:26] Chandler: And so now before even getting into the people in process stuff, what are the levers that you're using to grow, I mean. I love this framework of there's only three ways to grow the business. You can get more customers, you can, uh, you know, increase your average order value or you can increase your lifetime value.
[00:27:41] That's it. So then when you're in here, you gotta figure out, okay, am I in the new customer acquisition business? Solely? That's where most people think all their growth is gonna come from a million to or to, to eight figures. But for a lot of people it might be how do we increase our average order value?
[00:27:57] Uh, or, and or how do we increase our lifetime value? So those are some of the levers. And then when we're thinking about profit rolling into the people in process piece, I, I'm kinda jumping all over the place, but I think about how do we. It is the boring stuff. Reduce our expenses. Because most people, when you think about adding another a hundred K in profit, if you're at 10% margin, you, you pull 10 entrepreneurs, 9.9 outta 10 of 'em are gonna say, how do you get an extra a hundred K in profit?
[00:28:28] Add a million dollars in revenue? That's really hard.
[00:28:30] Nathan: Yeah.
[00:28:30] Chandler: What's way easier than that? Cutting a hundred thousand dollars in expenses. Right. So it's, I look at how can we attack the expense stack to your point. And then how do we increase accounts payable? So let's say you got a hundred thousand dollars a month in expenses in your business.
[00:28:46] Well, can we increase our payable days by 15 days? Now all of a sudden you got 50 grand of extra cash sitting with your business all the time that you can invest in growth.
[00:28:56] Nathan: You're thinking about your cash conversion cycle.
[00:28:58] Chandler: Exactly, yeah. And then your, then your receivables days, which I know isn't so much of a thing maybe in, in, in your world, but.
[00:29:05] W you know, when pe, when do people pay compared to when do they get the service?
[00:29:09] Nathan: Right?
[00:29:09] Chandler: So can we push that up and so there's 15 less receivable days or whatever. Well if you're doing a million dollars a month in revenue, that's an extra 500 K in revenue. So it's just like, what are all those levels or, or those levels.
[00:29:22] Then we gotta build a team of really, really great competent people. Maybe Joe's gotta go and you for hitting 50, but then, then, then we move into the process.
[00:29:31] Nathan: Right?
[00:29:31] Chandler: Uh uh
[00:29:32] Nathan: Well it's going people, 'cause that's such an important one. Um, what are some of the things that you like, I dunno, beliefs that you held or ways you built the team before versus the way you would coach someone through building a team today?
[00:29:45] Chandler: First off, you gotta have the mindset of what it takes to hire great people. I think so many people, and this is maybe even more of the seven figure mark. They just hire the first person with a pulse. Because what, so I mean, by the time
[00:30:00] Nathan: you're, oh, you're willing to work for me and you like know something about this, great.
[00:30:03] You're in,
[00:30:03] Chandler: you're in, you're hired. And I mean, I, I think it's because by the time you're hiring, what do you not have time for anything? That's why you're hiring. Right. And so what do you especially not have time to do? Hire.
[00:30:16] Nathan: Yeah. 'cause it's actually more, you're, you're at 110% capacity. And so you're saying, great, I'm so over capacity.
[00:30:21] Let me go hire someone, which is gonna put me at 140% capacity.
[00:30:25] Chandler: Yes.
[00:30:25] Nathan: Until that person is not hired but trained.
[00:30:28] Chandler: Yes.
[00:30:28] Nathan: And so you're, you're every incentive, every short term incentive is saying, get anyone in the seat as soon as possible.
[00:30:35] Chandler: Yeah.
[00:30:36] Nathan: Which is horrible. That's horrible. So you first off, have to be committed to doing the real work to hire great Mabel.
[00:30:43] That means the extra interview, the
[00:30:44] Chandler: extra few hours recruiting, the texting 50 people, asking them for referrals for the, like, all of the non-sexy stuff. Then there's the practical stuff, which is, I'm a big fan of the book called Who? By Jeff Smart.
[00:30:58] Nathan: Okay.
[00:30:58] Chandler: It talks about the four S's of hiring, right? You gotta create, create a scorecard for your role.
[00:31:03] Most people don't do that, or they think like, I make it hiring my first employee. They need to be creative, analytical, they need to do taxes, but they also need to be able to run my social media and my email. It's like that person doesn't exist besides maybe you. Um, so you gotta have a clear scorecard then for the role, then you gotta source the best candidates, as many as possible.
[00:31:24] We try to have at least 50, if not a hundred applicants per role that we fill to make sure that we just, there's quality somewhere in there and there. Then you've got to select the best ones. So through a good feting process, interview process, maybe even a test project. And then you gotta sell in one working for you.
[00:31:42] Mm-hmm. Right. So the best people are probably not unemployed and the best people are probably not dying to come work at your company. You gotta sell them on the vision and why it makes sense.
[00:31:53] Nathan: I think that's really good. One tip that I found to be helpful, actually I'll, I'll do two things. One on the, like getting your candidate pool, you're talking about sending all those text messages and all of that.
[00:32:03] Something that really helps is there are people that you would love to have come work for the company. Yeah. But they probably wouldn't. And you, you know, maybe they're doing their own thing or uh, something else. They're at what seems to be outside as a dream role. What I always do is I text them and say, Hey, here's the job that I'm looking for.
[00:32:21] I know it's an area that you have a ton of expertise in. So if you know anyone who would be a good fit for this role, like please tell me and nine times outta 10 or 95 out of a hundred, I don't know, they'll go. Think about it or have you talked to this person? But there's a decent number, like yeah, at times where that person says, yeah, I'll think about it.
[00:32:43] And I dunno, that's kind of a long shot, but we should chat. Like, would you want, I, I kind of be interested and that's the best. And so different than me saying like, Hey Chandler, will you take on this role at the company? And I don't know how you would respond, right? Are you going to be honored? But no. Are you going to be insulted?
[00:33:01] Because it's like way below what you think of in your career. You're like, you know, a hundred, a hundred grand to you. There's no way I'm working for it. Like, you just have no idea. And so people don't ask. And so instead you say, do you know anyone? Here's the, here's the exact role. It's in real hasa. Do you know anyone who does that?
[00:33:18] That
[00:33:18] Chandler: I love that
[00:33:19] Nathan: really, really well.
[00:33:20] Chandler: Four most powerful words in hearing. Who do you know? Right. Does, I mean, because exactly to your point, you can brag on the role
[00:33:28] Nathan: mm-hmm.
[00:33:28] Chandler: Without it feeling like you're trying to sell them.
[00:33:30] Nathan: Yep.
[00:33:31] Chandler: On it.
[00:33:31] Nathan: Then the other thing is, if you go to selling, what I do, I, every key role that I'm hiring, so let's say a manager or director and above, right.
[00:33:41] Um, where I'm having a conversation with them, I don't sell them on the role. I've done a lot of content. You know, I've got things out there. We've got a documentary, we've got lots of things on how we work. You understand, our team treats our culture, like there's a lot of content out there that they've consumed through the process.
[00:33:58] Chandler: Oh. That's
[00:33:58] Nathan: when you and I are sitting down to have a conversation. My entire conversation is like, Chandler. Here's all the reasons you should not join. I like that. And I just talked through like, look, you know, made up things right. But our sales team that you'd be inherited, it's a mess, you know, or here's this like, right.
[00:34:15] Uh, our product team is, here's everything that's wrong. Churn is actually down a lot. And three people before you have tried to fix that and have not been able to. Right. You know, we're like, and it's, it's not, there's nothing fake about it. It is the actual problems. So it does two things. One, uh, if someone's like that is a disaster, like that is not,
[00:34:36] Chandler: yeah.
[00:34:37] Nathan: For whatever the flights I'm at in my life, whatever else, I do not want to take that on. Great. Yeah. I would love to know that today and not 90 days from now.
[00:34:44] Chandler: Yes.
[00:34:45] Nathan: Like we had a director of marketing join. And I, I did not do this effectively in this role.
[00:34:50] Chandler: Mm.
[00:34:50] Nathan: They joined, came to our first team, retreat, all this stuff, and then took another role.
[00:34:56] I think they were on the team for like 25 days.
[00:34:58] Chandler: Oh.
[00:34:58] Nathan: And like the whip lat. It's, it's the worst thing's. Silly. Brutal. It's so bad. And so everything possible to avoid that.
[00:35:04] Chandler: Yeah.
[00:35:05] Nathan: So what happens is they're signing up for a role that they truly understand. And then the other thing is, the right person doesn't need you to convince them this is the right job.
[00:35:16] They'll convince themselves.
[00:35:17] Chandler: Yeah.
[00:35:17] Nathan: And so they'll go, that's the biggest problem you're dealing with. I've sold that three times already.
[00:35:22] Chandler: Yeah.
[00:35:22] Nathan: Like,
[00:35:23] Chandler: I like that.
[00:35:24] Nathan: You know, and they're right in there and they're like, great. I'm more and more excited for that.
[00:35:28] Chandler: Yeah.
[00:35:28] Nathan: And so I always reverse sell.
[00:35:31] Chandler: I like that. I mean, it's really similar.
[00:35:32] I mean, I've, I've learned a ton of ton from you over the years and just really respect how you built your business. I think. It's very similar to some of what I do. At the end of it, at the end of the interviews, it's like, all right, cool. This is the part of the show where I try to convince you not to work here.
[00:35:48] Like, here's the red flags I'm seeing.
[00:35:50] Nathan: Yeah.
[00:35:50] Chandler: I'll go to the hiring manager. Hey, do you got any red flags that I'm not seeing? You wanna talk? And I just like, can they handle it? We're gonna dish it out. Can you handle it? And here's all the reasons you shouldn't work here.
[00:36:00] Nathan: Yeah, I love that. Okay, so in people, let's talk about from the, from the people side, you got them hired and they're actually inside the company, like shaping that culture.
[00:36:10] Yeah. Obviously the, the goals, the metrics, the vision, that's really, really important. What, uh, what other things play into that? Like how do you think about
[00:36:18] Chandler: Yeah.
[00:36:19] Nathan: A team,
[00:36:19] Chandler: broadly speaking, there's like, there's a talent development framework and then there's kind of the underpinning soft skills, right? So if you think about.
[00:36:28] Your talent development framework, it's attraction. Do you attract great candidates? Then there's recruiting, which is kind of your outbound recruiting. Then there's hiring. How does that look like? There's onboarding. That's a really important piece that a lot of people screw up. They just give, give you, Hey, here's a login and a desk or a computer, and good luck.
[00:36:44] You know, so really dialing in that onboarding. But then there's the development and retention pieces, which is I think where you really gotta obsess over. Now you start building a lot of that kind of from seven to eight figures. And then there's the process piece, which is kind of like the, the fifth and final component from, from my vantage point.
[00:37:03] But, so then how are we re retaining people and how are we developing people, book clubs, training, the culture, all of those things. And then kind of the final not so fun things is like offboarding and happy leavers. So like, okay, when people aren't, are no longer a fit, how do we productively. Exit them from the organization and do it in a way where they're a promoter, not a detractor.
[00:37:29] So that's kind of how I think about the whole talent framework. And then there's the cultural stuff, right? Hey, what are the core values? How do we reinforce behavior? How do we correct behavior? How do we award stuff? Like, you know, all kind of the,
[00:37:44] Nathan: okay, so let's dive, we gotta dive into both of those. But let's, let's start with like offboarding team members, because a mistake that I made for a long time is I tried to, I was way too patient and tried like to really bring on this core group, right?
[00:38:01] And I ended up doing a huge disservice to like basically the entire team.
[00:38:06] Chandler: You end up losing your best people.
[00:38:07] Nathan: Yeah. You, you lose great people and you can't attract other people. And then they're like, oh, I'd love to join, but. Well, hold on. Why is your growth not, you know, they're like, just not, um, they're not as interested.
[00:38:18] And so when I thought I was doing something like helping them out, I was actually hindering them in their career. Yeah. And so we've, you know, the last two and a half years, uh, we've really transformed our team and it's been a, a ton of hard work, but off-boarding people and then doing it in a way where they're a net promoter of the company I've worked is really, really hard.
[00:38:38] So I'd love to hear Kaiser, you know about that.
[00:38:41] Chandler: That's really hard. Like, that's. There's a couple things. I mean, I think if, if someone gets let go and they didn't see it coming, you've totally failed it.
[00:38:50] Nathan: Yeah.
[00:38:50] Chandler: So, I mean, obviously
[00:38:51] Nathan: that's on you a hundred
[00:38:52] Chandler: percent. Yeah. It's totally on you. Mm-hmm. Now, I think PS you have performance improvement plans that aren't like, uh, checking our boxes before we fire you, but real, like they should have early enough in the process that people can correct their behavior.
[00:39:06] That's a mistake a lot of people make. We've made this a ton, is we don't do it early enough, and then by the time we do it, it's like, okay, yeah, we do need to cover our bases. The chance of this working is actually
[00:39:16] Nathan: oh percent.
[00:39:17] Chandler: So then I'm having to talk to my team about this and then talk to myself. You know, when I get home and look in the mirror, you're like,
[00:39:23] Nathan: idiots.
[00:39:23] Chandler: No. Uh, but I'm just like, Hey man, you're, you're trying to be nice and it's, uh, there's a difference between kind and nice, right? You're, you're, you're tr you're being nice, but it's not kind. It's not kind to this individual. If you were to just have a, a difficult conversation earlier, they could truly correct that behavior.
[00:39:43] So I'm trying to shorten the speed from feedback or, uh, the time when someone does something that is not up to our standard, to the time that they get that corrective feedback. I wanna shorten that as much as possible so that people always understand where they stand and so that we, and then there should be key performance indicators in place to where they know if they're showing up every day or every week, like, I'm red, I'm red, I'm red.
[00:40:09] Right? Okay. You think this is a surprise that you're not doing well? Like, I want them to be bringing it to me of like, Hey, I, I feel like I'm not performing well. I, 'cause it's obvious. So my thought is always, what's the one thing that we could do that would make it default on so that my. My leaders or my team don't have to do it manually.
[00:40:31] So like, just little simple things like the KPIs and them reporting them weekly on their one-on-one and on the team meeting that one thing people know whether they're winning or, or, or losing. So Grant, it's, that's a bunch of the stuff in the middle. But then I think that one thing that people miss is they don't, don't just have a checklist for onboarding and offboarding.
[00:40:51] It should be simple. You do it all the time. Like why do you not just have a checklist of like, here's how we do the conversation, here's how we do the access. This is all kind of like, 'cause I dunno about you, but by the time someone's leaving the company, it's like, I'm not trying to spend hours and hours exiting them.
[00:41:07] I'm like, alright, the decisions made, let's just have this run and then let's, I, I need to be focused on the people who are here and who are growing the company. So how do you off board in a way that. It's just not sucking all your time or people on the team's time.
[00:41:20] Nathan: I think that the, the metrics and the how do you know if you're winning or losing is such an important thing, and that's something that we're getting better at it kid, but not to the level of like your green days and red days or, or that sort of thing.
[00:41:33] But, 'cause then if someone's coming to you and saying like, this isn't working, I've implemented like four, like it's not through a lack of effort, but I'm not able to succeed in these KPIs. And then they might even say like, and I think the KPIs are fair, right? Then they, they might, you know, you mutually decide to part ways or, or however it ends up.
[00:41:54] Yeah, but they might have a better idea. They're saying like, oh, kit or self-publishing dot com. Like, we're not, it was not a place for me to thrive, but I understand the type of person who would
[00:42:06] Chandler: Yeah.
[00:42:06] Nathan: Instead of like, I hate Nathan.
[00:42:07] Chandler: Yeah.
[00:42:08] Nathan: And so like just that visibility makes. A big difference. Uh, have you seen, I hate nathan.com, by the way.
[00:42:15] Kidding. Registered
[00:42:16] Chandler: by,
[00:42:19] Nathan: uh,
[00:42:21] Chandler: but no, I think we like maintenance. That is, that is the hard part, is the happy leavers. And I've made a ton of mistakes on this because I don't know about you, but sometimes it's just like, it's not working out. It's like mm-hmm. You suck, you're gone, you're dead. To me, I'm, I'm saying that like in jest, I don't often really feel that way.
[00:42:39] Every now and then I do, but it, it, it, so then I don't have the conversation that would've taken 15 minutes. That would've just helped it end well. And so those have been some of my biggest regrets. So now I'm trying to figure out how do we do that organizationally? 'cause you know, as you've, you guys are almost on employees, it's like, well, I can't have a conversation with every person or three conversations with every person that leaves or enters or whatever.
[00:43:04] So like, how do we have a mechanism? Maybe it's an exit interview process or stuff like that, but. So we're still figuring that out.
[00:43:11] Nathan: Yeah. Okay. So the last one that you said is process. So talk about like the processes that you've implemented, and I'll just say it, I. Coming from like a, the creative side, I'm a designer, I'm a writer process, I'm like a hate process.
[00:43:25] And then I see obviously Paul far without it. And so I'm like, you know, I like now I love the right amount of process and I love hiring people who will implement the right amount of process and hold it to it. But what are the things that have been really important for you on the process side?
[00:43:39] Chandler: Hmm. I would say there's the mantra and then there's maybe the mechanism.
[00:43:43] So the mechanism I learned from Dan Martel, mutual friend of ours, it's a playbook. You need a playbook. Teams have playbooks to run the plays that run their right, their, their teams we're
[00:43:53] Nathan: through and we're like, all right, here's the play. We're
[00:43:55] Chandler: calling. It's play. Here's the play. We're doing a podcast interview.
[00:43:57] Here's the play. Mm-hmm. Right. So you need to have a playbook. A playbook is systems, references, templates, SRT. So what are the systems or s SOPs then what are the references? This is like, oh hey, here's Nathan's brand style guide. This is how we do the logos for the podcast. This is how we do all the things.
[00:44:16] Another, I don't, I dunno if we picked up the bell. Oh, I heard the bell's. A that's a fine. Uh, so wouldn't come back to that. Okay.
[00:44:22] Nathan: The
[00:44:22] Chandler: build winning and KPIs and all that stuff in there. Um. But, so then there's references that people can use and then there's templates, which is stencils, clal, things like, Hey, we do employee evals.
[00:44:33] Well, there should be a template for that. And then we should use that template every time we do an eval. And so what I realized, the problem I was running into, and you'll definitely hit this between seven and eight figures, is I'm doing everything from scratch, is if I've done it for the first time and then I hear this idea of a playbook and I'm like, well, hold up.
[00:44:51] You can't playbook me. Yeah. I'm so special. I'm so talented. This is so unique. You cannot possibly playbook this spoil alert. You can, right. Almost everything, right? And but then there's the, the the, the way of thinking. 'cause maybe someone's watching this right now and thinking either you can't playbook book me, or, okay, I get it, but this is the problem for me.
[00:45:12] What do I playbook? Mm-hmm. Like what does this even mean? It's almost like there's these goggles that once you put 'em on, now you start to see it. Like you start to see where you can do this in your business, but if you don't have 'em yet, how do you do it? So there are three questions that are really helpful for me is if it passes anyone, or all three of these questions, there should be a playbook or a process around it.
[00:45:33] Does it take more than five minutes to do it?
[00:45:35] Nathan: Okay.
[00:45:36] Chandler: Is it something that you will do more than once? Or is it something you don't like doing? And so that was just like kind of a simple three questions to know
[00:45:43] Nathan: That's a very low bar,
[00:45:45] Chandler: very, very low bar. Right. But if you think about that, if it, if it passes all three, like for me it was taxes.
[00:45:51] Mm-hmm. So it's like we would get around to end of year taxes and it's like, all right, well let's see. What, what, what do we need to do? What are our writeoffs Oh, oh no, I think I actually have this and, and I just realized one year my
[00:46:02] Nathan: history, we filed extension and so then you're like, we're not talking last year, like 18 months ago.
[00:46:07] And
[00:46:07] Chandler: I, we in October, y'all, this is for the previous year. What
[00:46:10] Nathan: year are we talking about?
[00:46:10] Chandler: I don't even know. But so, so then for me it was like, okay, this takes way more than five minutes. I am going to do this every year until I die, or until Uncle Sam decides to start charging me, and I hate doing this.
[00:46:22] Why are we reinvent the wheel? That needs to be a process? So I could nerd on, on this for like a really long time, but I think in a, on a bumper sticker, those are kind of the two things.
[00:46:30] Nathan: And the other thing also from that I picked up from Dan is what he calls the camcorder method. Because you think like, oh, I've gotta document this whole thing.
[00:46:37] And he's like, no, you don't like record the screen on your iPad as you talk. You're giving feedback on the landing page design, right? Or record a loom. Then the person that you gave it to, they make the process.
[00:46:49] Chandler: Yes.
[00:46:50] Nathan: And so we also take it where we're like, ah, I just wanna do the task. I don't want to go and spend four hours creating documentation.
[00:46:57] And it's like good news. You don't actually have to. That's great. And so then you just say, Hey, here's the task, here's the video of me doing it the first time, walking through it, I've got commentary on it, things to look out more and all of that. And then what I'm looking for back from you is the task done by you.
[00:47:13] And I'm looking for the SOP of you outlining how to do it. Yeah, I'm gonna review those two things. I'm gonna be, oh, you missed these two. But otherwise it's perfect.
[00:47:20] Chandler: Yeah, I like that.
[00:47:22] Nathan: Alright. 10 million and beyond. Now we're in like rarefied air as a business of like very few companies get to this stage, but what are some of the biggest shifts that you made as you.
[00:47:35] You know, as we, as we tip over, add that extra zero on the end. Yeah. Things change. Again,
[00:47:40] Chandler: that's like the, uh, what's it, is that two commas? I it's two commas. Is
[00:47:44] Nathan: that we're, we're still in the same number of commas, but, uh, yeah,
[00:47:48] Chandler: yeah. There's no more commas. I, there's,
[00:47:50] Nathan: there's, there's another comma, but it's a ways off.
[00:47:52] Chandler: Yeah, it's a ways off. So, gosh, so we were knocking on the door of this for a while, and it just felt like this ceiling that we couldn't break through, it's, it was 10 million a year and it was our first million dollar month. Those were like the two big things. So I think it takes. Insanely scalable customer acquisition channel.
[00:48:11] Nathan: Yeah.
[00:48:11] Chandler: So I mean, you, you, you gotta, if we go back to those three ways to grow a business, I mean, it's, it's, you know, you either get more customers, you increase your average order value or lifetime value, and then preferably all three. But then you need a scalable acquisition channel. So I watched a buddy of mine, we lived in an entrepreneur house together.
[00:48:27] He ran, he runs a company called Dr. Squash. It's like this high quality Yeah. Soap. So they got really good at funny ads. Mm-hmm. And then they just cranked that up. Mm-hmm. Um, and then so subscription, so the underlying LTV was better, it was direct to consumer, all that stuff,
[00:48:42] Nathan: which allows them to spend more money to get those ads Yes.
[00:48:45] Out in front of more people.
[00:48:46] Chandler: Yes. Your lifetime value, it's greater than your cac. Right. So, so I think you need one really, really scalable channel.
[00:48:54] Nathan: Mm-hmm.
[00:48:55] Chandler: Which one is the most powerful number and it's also the most. Scary number. I mean, 'cause I'm like, I want a really great channel, but then I want to be in the farm league with my number two and three.
[00:49:08] And this has actually happened multiple times in the business. And this is part of why we're stalling out is 'cause we're scaling with that channel, but then hold up meta decides to start charging more or like that gets more, they're not really deciding to charge more,
[00:49:21] Nathan: but the ag jack
[00:49:22] Chandler: changes.
[00:49:22] Nathan: Do whatever else.
[00:49:23] Chandler: Yeah. Oh my gosh. Pixels out. You know, that they, they, you know, this Cambridge Analytica, they're banning the pixel now. So Oliver Ag
[00:49:32] Nathan: calls, it changes. SEO any of these things you master channel in it.
[00:49:36] Chandler: So you gotta have those two and three sport. 'cause we've had stuff that like, okay, business development partnerships is now our main thing.
[00:49:43] Where there was a while where it was content and SEO, but now AI is cannibalizing some of the SERPs. So now we're, we've, we're down like a million, million and half from our organic content. So where we gonna make that up? To not to, to just stay even much less grow. Right? So then you start looking at that.
[00:49:59] So that's where I think you start have to really, you, you've really gotta be able to scale customer acquisition. You gotta scale leadership and executive team even more. So there's more of the stuff that you're already doing, but then repeatable process. Can you add people and expect a revenue, like your revenue per employee?
[00:50:18] Like it's, it's a bunch of that stuff. Yeah. But if you can't acquire the customer, she can't scale. So that's where it breaks down. I feel like for a lot of people,
[00:50:25] Nathan: those three buckets of the only ways to grow a business, I think are really important because it's gonna happen. If anyone's, like you and I we're reading books, listening to podcasts, and just constantly have new ideas and you know, so many of them you could be like, oh, that could work in my business.
[00:50:40] And so you're like, now I'm gonna try this and I'm gonna try that. And if you can ask yourself, okay, which of the three levers is this idea trying to pull? And you're like, well, it's uh, increasing LTV, right? Or increasing retention. And it's like, great, now it's in that bucket. Now it's not a new idea against everything.
[00:50:59] It's a new idea against all the other ideas in that bucket.
[00:51:02] Chandler: Mm. And
[00:51:02] Nathan: you say, is it, is this the best way, not the newest way, the best way to increase LTV?
[00:51:08] Chandler: Yeah.
[00:51:08] Nathan: Or is this the best way to acquire new customers? Because starting a new acquisition channel from scratch is a ton of work. And if you're constantly telling your team, Hey, I was just listening to Champions podcast.
[00:51:19] Watch this YouTube video, and you know, self-publishing dot com is doing this thing, we should do it too. And the team's doing this. And then like two weeks later you're like, Hey, damn, Martel is doing this thing. So, you know, and you're like, back and forth, Cody San, you're like, whatever. Right. You're all over the place.
[00:51:31] And so if you just say, there's only three buckets.
[00:51:34] Chandler: Yeah.
[00:51:34] Nathan: Where does this new idea fit within it? Stack ranking against it? Does this beat out? Like, is this our top three, top four things in here? If not, log it maybe next year.
[00:51:45] Chandler: Yeah. When it's probably not gonna be bucket one, right? Every, everyone goes to new customers.
[00:51:50] Mm-hmm. But what if. If what if you could just double your average order value? Yeah. You think that's harder or easier than doubling the number of customers?
[00:51:59] Nathan: So I know you got some fun recent things here. Got some recent things on this. So I did not raise prices on kit for 13, 12, 12 and a half years. It's how far we are into this business.
[00:52:09] We had the same pricing all the way through. We like added a, you know, our pro plan where people could upgrade. Um, but that, like, that was the only change. And so we actually this year said, okay, we're going to raise our prices not in line with inflation at like a third of inflation over this period of time, but that added millions in revenue and watching it kick in and you're just like, oh.
[00:52:36] And we had a bunch of customers who were not making money off their email list or that sort of thing who were like, Hey, my price going from 29 to 39 a month, like is really meaningful. Right. But um, for the most part, the people who are like, I know how to use email to make money. Were just saying like, I pay you all a tiny fraction
[00:52:54] Chandler: Yeah.
[00:52:55] Nathan: Of what this channel makes for me. And almost no one cared.
[00:52:58] Chandler: Yeah.
[00:52:58] Nathan: Now there was a lot of noise. 'cause when you have 65,000 paying customers, like a thousand people being very vocal feels like a lot. But ultimately, you know, I was constantly like, how do we get new customers in? How do we retain more of them?
[00:53:10] And I was obsessed over those too.
[00:53:12] Chandler: Yeah.
[00:53:13] Nathan: And it was really a new product leader coming in and saying, Hey. There's this other bucket, like annual bucket, let's, you know, and then that gives us more profit to reinvest that like all of these things, you know, recruit and retain a team. Like, it just changed everything.
[00:53:25] And it was, you know, I got well over 40 million before I actually touched that bucket. And this next year we're really looking at like, so only 7%. So you
[00:53:35] Chandler: guys are doubling prices next year? No. You're already here from,
[00:53:39] Nathan: I'm kidding. I kidding. No, this next year what we're really looking at is our create a pro plan of like, how do we, uh, add more value to that so that people
[00:53:49] Chandler: Yeah.
[00:53:49] Nathan: Like voluntarily move to this higher plan as their business grows and everything else. I was realized like, okay, we're at 7% of our paying customers on the, on the pro plan. Mm. What if that was 14%?
[00:54:01] Chandler: Yeah.
[00:54:02] Nathan: And you're like, you run the numbers and the spreadsheet and you're like, oh, that is a wild difference.
[00:54:06] Like, yeah. Okay. That's worth a lot.
[00:54:08] Chandler: Yeah. And that's a OV and LTV, right? Mm-hmm. And we'll use that just as a quick example for people watching this, I mean. So let's think about that. You know, the, uh, plan from 29 to 39 bucks, right? That's a effectively like a 33% ish price increase now on 65,000 paying customers.
[00:54:26] So if you think about that, if you were to get 33% more paying customers, that would be, what, 20,000 customers, right? So it's like, do you think it's easier to get 20,000 more customers or to raise your prices by $10 a month? Right. And effectively, I mean, those have the same economic impact in the business,
[00:54:46] Nathan: right?
[00:54:46] And one is 10 times harder. Crazy,
[00:54:48] Chandler: right? Yeah. But I, so that's why I think that's a great illustration of most people are so obsessed with this bucket and they're leaving so much money on the table.
[00:54:56] Nathan: Yeah. One of the other big shifts he made. This, you know, pushing past 10 million is in person. Right. We're hanging out in your office.
[00:55:04] You've got a beautiful studio, you got the team here. The metrics of there, all of that. How many people do you have on the team now? In person versus remote?
[00:55:11] Chandler: Yeah, somewhere between 2025. So we're, well, so we went from zero to, let's call it 20, and change people in person over the last year. Mm-hmm. And we've had kept head count relatively same.
[00:55:23] So we're about 60 people total.
[00:55:25] Nathan: So if someone leaves, so like that you're just rehiring the role, assuming the role is important. That's also, as an aside, so many people, someone leaves, you're like, okay, cool. So backfill the role and like six weeks later we have the new person in. Great. And no one paused to go, do we still need that job?
[00:55:40] Chandler: Yeah.
[00:55:40] Nathan: Is that still the best use of this bucket of money? Mm-hmm. And like probably 30% of the time the answer is like, no, I'd actually reallocate it. But I would say almost every time it's just a automatic backfit.
[00:55:52] Chandler: That's a great point.
[00:55:53] Nathan: So that was an aside. What what you're doing here is you're saying, Hey, we're.
[00:55:58] We love our remote team. We've got some great people who've been with us for a long time, all in on that. But when we're hiring new roles, we're hiring in person and gradually, is that right?
[00:56:07] Chandler: Yeah, exactly. And, and then some of 'em we just said, Hey, like we need to intentionally push. We need this role in now.
[00:56:13] In person. Like, yeah, my assistant, that was one of the first ones where I'm like, K,
[00:56:18] Nathan: it's a game changer.
[00:56:18] Chandler: If I'm gonna hire other in person, people in person, like an in-person assistant will exponentially improve the effectiveness of this role and the value to me of this role. We're moving that role in person.
[00:56:29] Yeah. So stuff like that.
[00:56:30] Nathan: Mm-hmm. That makes sense. Okay. Why are you all in on, in person?
[00:56:35] Chandler: It is very chaotic on culture, I think. Yeah. I looked around and I could count on one or two hands how many, how many businesses were bigger than me that were mo. So then I just said, okay, what got us here won't get us there.
[00:56:50] Am I trying to swim against the tide or am I trying to swim with the, with the tide? And I think when I, uh. When I reflected on that, I realized that the reasons why I hadn't done in person were, 'cause I didn't wanna be tied down. Yeah. I knew, is this all me? It wasn't actually just objectively saying what is best for the business.
[00:57:09] And so I said, well, hey, if we wanna get to this next level, I, I think I'm a better leader in person than I am remotely. I think we can train, collaborate, et cetera faster. All of our media stuff gotta be in person. When am I gonna like record myself? I don't know how to set up the camera. So it was just, we're, we're kind of plateauing at this, you know, 10, 11 million a year.
[00:57:33] What do we break through? I think what got us here will get us there.
[00:57:36] Nathan: Mm-hmm.
[00:57:36] Chandler: And I, and I had a bunch of models to see, uh, other businesses thriving or people who had switched, like a Dan Martel or like an Alex or Mosey or like a Russell Brunson or like, I mean, you just, even just, that's just in our industry, much less outside of our industry seeing Okay.
[00:57:53] It's possible, but doesn't mean it's the best way to get us to where we want to go.
[00:57:58] Nathan: And we've taken a different approach. We've built Kit remote, you know, from day one. Very deliberately. I think two things that stood out to me in that is one, I'm able to re recruit a team remote. Oh yeah. That I'm not able to recruit in person.
[00:58:12] Yes. We do this thing like often we're sitting around as a team, we'll throw out hot takes, like just for the fun conversation. And so we'd be like, all right, hot take, I think we should whatever. Right. Or like, uh, and I dunno that this partner that we did this whole deal with was actually a net negative on the business.
[00:58:27] Chandler: Mm-hmm.
[00:58:27] Nathan: You know, and, and like, 'cause it's a hot take in and there's a lot of trust in the group. So it like sparks these fun conversations and all that. But one of them, someone threw out like hot take would be way more productive in person than, and like everybody looked at that person like, go shut up.
[00:58:44] This is within our exec team. You know, and we all agree with that. You know, but then we're like, okay, so who's moving where? You know? And we've got New York, we've got Charleston, Boston and Boise and, you know, uh, Kansas. And like, we're all over the place and we're like, you know, we're all at the stage where we've got kids and family and all that.
[00:59:04] And we're like, well, none of us are moving. Right? And so it was an interesting trade off, but one decision that we made is that, hey, if we ever have important work that we have to get done, we're going to not hesitate at all to get on a plane.
[00:59:17] Chandler: Hmm.
[00:59:18] Nathan: And so. Whether like we just did our exec offsite, um, outside of Charleston, we spent four or five days together, like dialing in our plans for 29, 6, all of that.
[00:59:29] And like, it's a commitment to be away from kids and family and everything for that time. But like we think of that as a trade off. It is just being in person or saying like, Hey, we'll pick a city, I don't know, like Minneapolis or something that is like a major airline hub that we can all get to in a three hour flight.
[00:59:46] And it's like, let's spend 36 hours and just hash through whatever we need to and then go back to our focused work. And so like all, I guess all that to say, I think that for like fast moving decisions, um, and like a very highly collaborative environment, remote, or sorry, in person is better, like hands down.
[01:00:06] And I just think it's some of the other trade offs of like deep focused work and uh, remote hiring. You're like a town pool that fall on the other side. Alright. There's so much more that we could say on remote versus in person. We'll have to do a part two as you come, uh, into my studio, come to voice. So you can get up on the, on the, uh, whiteboard.
[01:00:25] Chandler: Ironic, I'm coming to your office to discuss how you to be remote.
[01:00:29] Nathan: Remote versus in. Yeah. All of that. Uh, if people are interested in that whole discussion and debate of remote versus in person, like definitely drop a comment on the YouTube video. 'cause that'll be fun.
[01:00:38] Chandler: And I wanna see your guys' debates.
[01:00:40] Who's right, who's wrong in the comments?
[01:00:42] Nathan: Ooh, that'd be
[01:00:43] Chandler: fun. I'll, I'll be responding.
[01:00:45] Nathan: Let's do it. Uh, Chandler, this has been amazing. Like your attention to detail, the frameworks that you have, the way that you lead. I love it. I love coming here and seeing your team, your culture, all that in person, and just see, like, I've always known you and how you've built the business, but seeing like the team be the, like the in-person embodiment of that has been really, really special.
[01:01:05] So thanks for having me. Thanks. Thanks for coming on the show. Is there anything like as people follow you and your content journey and everything else that you'd wanna direct them to?
[01:01:15] Chandler: Uh, yeah. Uh, thanks for being here. First of all, I've learned so much from you over the years. You've inspired me from up close and from afar just watching the way that you build your business is really incredible.
[01:01:25] Um, we're doing a bunch of content stuff too, so Chandler Bolt, YouTube channel, and the sell publishing.com channel. You guys can subscribe over there. We've got a bunch of content around scaling businesses, so that
[01:01:35] Nathan: I love it. Yeah, a lot of the frameworks that you're breaking down, you're like, oh, I have a full video on.
[01:01:39] Exactly. You know, what we covered in 90 seconds, there's a meaningful piece of content on that should go check it out. And also another thing that we didn't talk about is you and I are both deep advocates for writing and self-publishing books. We built our careers on this idea. It's so important. And so you just check out self-publishing dot com if you have any interest in doing that.
[01:01:59] Dude, good to see you.
[01:02:00] Chandler: Appreciate it