Brent Freeman is the Founder & President of Stealth Venture Labs and a serial entrepreneur who’s passionate about using business to generate both profits and social impact.
In 2009, Brent founded Roozt.com, an online marketplace platform for social good consumer brands which was featured in Mashable, Forbes, Huff Post, INC, The Today Show, NBC, and ABC. He was honored by Forbes as a Name You Need to Know in 2011.
Today, Brent is an angel investor, former venture capitalist, and writes for Entrepreneur and INC on startup life. He is the Founder & President at Stealth Venture Labs, has co-founded five eCommerce brands, and is the Chairman of the Board of the Bay Area chapter of the Network For Teaching Entrepreneurship that teaches entrepreneurship to inner-city kids.
In his free time, he loves to travel to Italy, give back and spend time with his family and friends. In 2020, Brent received the high honor to be knighted by the Italian Royal Family, Casa di Savoia, for his commitment to philanthropy and giving back.
What you will learn
- Discover the 4 top KPI’s you need to measure for a subscription eCommerce business
- Why you should consider creating or adding a subscription model to your business
- The importance of starting your business with a MVP (Minimal Viable Product)
- The 5 Criteria you need to apply to ensure your business is a success
- The habits and personal routines you need to consider to ensure you are fit to grow personally as an entrepreneur
- What conscious priming is and how can it help you achieve your dreams and goals
- The 3 elements for ensuring you have a healthy and vibrant remote work and team culture
- The 5 love languages of the work place that you need to motivate your team and the quiz to send to your team
00:00:04 - 00:01:34
Hi everyone and welcome to Jeff Bullas show. Today I have with me, Brent Freeman. Now, Brent is the Founder & President of Stealth Venture Labs that sells, sounds like he almost sells security software, but he doesn't. And a serial entrepreneur who is passionate about using business to generate both profits and social impact. In 2009, Brent founded Roozt.com., be careful how you say that in Australia, an online marketplace platform for social good consumer brands which was featured in Mashable, Forbes, Huffington Post, INC, The Today Show, NBC and ABC and every TV channel on the planet. No, that's not true, but it's very close. He was honored by Forbes as a Name You Need to Know in 2011.
Today, Brent is an angel investor, former venture capitalist and writes for Entrepreneur and INC on startup life. He is the Founder & President of Stealth Venture Labs and co-founded five e-commerce brands, I'm going to find a little bit more about that as well, and Chairman of the Board of the Bay Area chapter of the Network For Teaching Entrepreneurship, we need an acronym for that by the way Brent, that teaches entrepreneurship to inner-city kids.
In his free time, he loves to travel to Italy, I'm very happy about that because I would do the same, to give back and spend time with his family and friends. In 2020, Brent received the high honor to be knighted by the Italian Royal Family, Casa di Savoia, for his commitment to philanthropy and giving back.
Welcome to the show, Sir Brent Freeman.
00:01:34 - 00:01:38
Thanks, really honored to be here brother.
00:01:39 - 00:02:05
So Brent's dialed in or Zoomed in as we say today from the other side of the world in Lake Tahoe and he used to be living in San Francisco and but the pandemic changed everything. He escaped the virus and is hiding in Lake Tahoe, which is a beautiful resort sort of area where you can ski, I think both on the lake as well as on the slopes, is that correct?
00:02:05 - 00:02:10
That's right. Depending on the season and I'm a summer guy, so I prefer the lake.
00:02:10 - 00:02:30
Yeah, so great having on the show and we're going to talk about a bunch of things. Now let's go back to, you’re going to USC, you're doing your degree and you started a commodities trading company. Was that your first entrepreneurial adventure?
00:02:31 - 00:03:46
Yeah, you've done your research. Yes, formally I had started a couple like t-shirt like selling businesses while in college, even a consulting firm where we went into local nightclubs and tried to get them to sell them a package of how they could increase their foot traffic with USC students and we learned a lot about what not to do in that business. Primarily, we wrote the report as a proposal and gave it all to them and then they said, well why should we buy it from you? We gave them the product. So we learned to sell the product before we gave it to them. Early days, but yeah we are right outside of school, we launched a commodities import export business in Dubai, in LA. I was graduating USC with a quarter million dollars of student loan debt. I was not one of the spoiled children that went to that college, I was one of the young hustlers and a friend of mine had worked in the industry in the previous summer sourcing a lumber deal for a construction project in Dubai and he made 100 grand and I was like what tell me more. And long story short, we decided to come together with a contact of ours in Dubai and launch a commodities import export business for the big boom pre and kind of mid of the global financial crisis.
00:03:46 - 00:03:52
Okay and so commodities so it was more than lumber?
00:03:52 - 00:04:23
Yeah, steel rebar, H-beams, I-beams, those sorts of items for the big construction boom that was happening in Dubai at the time. It was just build, build build. And the model was and this will actually kind of tie through into economy, it was always about supply chain, how do you cut out the middleman and create value and pass it on to the customer. And so what we were doing is we were cutting out general contractors in the traders and all of that um and we were going direct to the source either to the mill usually directed to the mill. Yeah, so that was the model.
00:04:24 - 00:04:29
So basically you're able to offer them a higher price but a cheaper price for your end buyer, is that correct?
00:04:29 - 00:04:51
Yeah, correct. And it was no inventory model, it was take control of goods. [inaudible] used the buyer's assets to open up a letter of credit with our own, without having to have our own assets. And that was during a time when there was amazing amount of credit in the market that was being extended and a tremendous amount of construction demand, all of which ended abruptly in around 2009.
00:04:51 - 00:05:06
So and that I suppose then opens up the question of that was your first adventure and that was driven by I suppose urgent need to pay off debt, is that correct?
00:05:06 - 00:06:10
Yeah, I think that and the kind of like the social program that's run you know the subconscious program that's running in a big institutions like USC of, you know, you graduate from business school and the entrepreneur program, you can go get a high banking job or you're gonna go do these things. You need to be successful and you need to chase the money and that's what the path is that makes you happy and, you know, we did that, we chased it and we made the money and clothes. A big deal at the age of 22, 23, $10 million deal and I remember I've been working super hard for that over a couple of years and I woke up the next morning and I was so empty inside I was expecting so much more of a fulfilling feeling of making money and it was just not there and it was a big aha moment for me around what really matters to me and my career in my life and that millions and millions became hundreds of thousands became tens of thousands of business collapsed, the world collapsed in the financial crisis and you know, I walked with about 50k and I think the, the opportunity to really take my learnings and say what do I want to do next.
00:06:10 - 00:06:39
So you had an aha moment. Yeah, it was that I've heard it happened quite a lot, is that an event, in other words we learn more from failure than we learn from actual success. We learn more from pain than we do from pleasure and it's sort of sometimes takes us a few years to discover that for decades and some people never do, they just take a job and work and retire and die.
00:06:39 - 00:08:29
Yeah, what I say these days, you know, I'm 36 now, right, I'm on my operating company. I'm on my seventh and in terms of, you know, serial entrepreneurship and all of that, and so lots of failure and lots of failure in my personal life also and a failed marriage and all those sorts of things, but people we connote failure as being, oh it's over, and no, failure for me, what it has translated to now when I tell myself, honestly, every morning I have an affirmation thing, we can talk about subconscious priming if you want, to have an affirmation thing that I do every morning, that hardships are my seedling for joy and my whole life in the last five years has been turned around and upside down to say these hardships that I went through, whether it be a business failure, losing a parent early from cancer growing up, a failed relationship or marriage or you know, business partner breakup, whatever it is, when you're in it and you're in the absolute value of that pain. It is really hard to, you know, see the label inside the jar, but as I pulled back and looked at the course of my journey and you know, from the outside looking in macro, it's up into the right. From the inside, it's lots, its volatility, high highs, low bows. There is no question when you run kind of like an equator exercise and say, okay, the equator is here, below the equator are all the negative things that have happened to me in my life. Above the equator, all the amazing positive highlights of my life. When I ran that exercise, I realized that every single joyful moment thing in my life that has happened has occurred because of the hardship that I went through and the learnings and the growth that came out of it. And so this hardships are my seedlings of joy reframe really has been really, has been the story of my life.
00:08:31 - 00:09:14
Yeah, I've been through ups and downs, both relationships as well. Partner who committed suicide three years ago. So that makes you reflect a lot and she was a business person and such a dynamo, but she struck a small financial speed hump and it took her into the depths. And so I totally get it, mate. And you've got to look at those learnings and you know, and businesses sign. But when you're in the valley of despair, it's like you can't see out of it. And some people can't seem to escape despite no matter what you do. And so yeah, so..
00:09:14 - 00:10:09
I'm sorry, I'm sorry for your loss, brother. And you know, it is a story that too many of us have either been through or been connected to whether it be suicide or suicidal thoughts and in my own journey, I have been in that dark valley, you know, and what I have found is that philosophically if we think, actually just scientifically, if we think about life as a whole, the building blocks of life are positive and negative, you know, atoms and electrons, right? It's the duality. It's the polarity. We have night, we have day, the yin and the yang, there is this polarity and duality of life and we forget that when we're in the dark, that the sun rises because it's, it's dark and it's cold but the sun does rise and you know, there's, we can talk more about what I did, you know, to get through that as an entrepreneur at another time. But it's, yeah, I feel you, man, I've been there.
00:10:09 - 00:10:43
Yeah, I think we've gotta accept as humans, is that failure or being in a tough spot or having a great time that they're not good or bad yet. We put those labels on them all the time. They are what they are. And it's just being human and I suppose being grateful as you've mapped out as well as where we've really got to go now. I wanted, you mentioned something about affirmations in the morning and you mentioned a phrase about um and I can't remember, it was just like a quick phrase you used about hardship.
00:10:43 - 00:10:46
It was hardships are my seedlings of joy,
00:10:46 - 00:10:51
Right. And there's another one that's sort of like, it's a polarity or something, I don't know what you mentioned, but um
00:10:51 - 00:10:56
Yeah, the duality of life, the positive and negative. Yeah.
00:10:56 - 00:11:24
Yeah. So what's the affirmations that you do in the morning? I use journaling pretty well, 5-6 days a week where I just brain dump, take my thoughts and put them on paper. Virtual paper. I've found that very cathartic just to do that most days. So what, what sort of form do your affirmations take? Because I think some people sort of look at affirmations going on there just as a waste of time.
00:11:24 - 00:16:53
And they can be and they can be if you don't do it with a certain level of execution and what I mean by that, and before I kind of say exactly what I do, the context matters is because when I was in that valley, that kind of ties it all together, when I was in that valley, I realized that I had been doing the same ship for years and years and years but expecting different results and getting the same results. And, you know, it is literally the definition of insanity, but it was deeper than that because I was realizing that I was chasing somebody else's, no one in particular, society or parents or influence whatever it is, dream of what success looks like, you have the fancy things in the car, the apartment or the company or the prestige or whatever it is and you're told by society's influence is that once you get those things or those experiences that you'll be happy and in reality it left me more unhappy than I've ever been. Because the Delta, the gap between where I was and what I had was so big and the disappointment around that and then the self loathing kicks in right at the boot, like, oh, who am I? I'm in a penthouse apartment in San Francisco, you know, how many people would be so fortunate to live here and this and that and your self loathing kicks in about you feeling bad around your circumstances, situations. And so what I realized as I, as I really had this one moment, several years ago back in San Francisco, I realized that I was so far removed from things that brought me joy, truly me when I like go back to my child's mind and I go back to the things that make me smile from the inside out. I was so far removed from those things, chasing other things that no wonder I was so unhappy and I realized that I was running a program, right? Like the Matrix, I was chasing after things that everyone told me should make me happy and the entrepreneurial success and money and whatever and these different milestones you hit in life and yeah, they can bring you marginal happiness, but if they don't truly bring you joy intrinsically, then you're gonna wake up one day and be super unhappy. And so I realized that then and there I actually had to retrain my subconscious mind and in order to retrain my subconscious mind, I needed to learn a bunch about both neuroscience, my brain, how things work, meditation and the law of attraction, habits. And so I, you know, I dove in, I read a couple hundred books and by read, I mean listen on Audible at 2 to 3x. Because I'm dyslexic and have ADD, right. So I listened to them when I'm walking and I crushed three books on a fast pace because I speak fast and I realized that my mind needed to be re-trained just like a body where that gets out of shape.
So I started researching from all the way from Napoleon Hill to Joe Dispenza, right, Dr. Joe Dispenza, everything in between, through inside guru. I mean, you name it, who's doing what, where and how and how does this work? Napoleon Hill had it right, 1920 right? But he missed something that Dispenza, the Dispenza community does well and he had the right saying, hey, you write down your goals by this, I'm gonna do this and by then I'm gonna go there, that's fine with the law of attraction misses is you can put the vibration out there, the thought out there what you want, but it's not until you attach an emotion to it and that it draws it back to you and that's kind of what the Dispenza world teaches this. You know this kind of meditative practice, feeling your future now before you have the thing. So you can create out of abundance versus scarcity.
And so the subconscious priming technique that I've been doing for the last several years is I have a piece of paper right by my bedside. Physically, right? And it is by this date, I will accomplish these things or I will be these things. It's always in the positive, usually 8 to 10 items. I'll talk to you about how I decide what those items are in a second. And then I say by this date, I'll create this then to achieve this, I will do these different things to achieve it. And then I will end with affirmations like hardships are the seedling of joy. I thrive no matter what. I am an abundance, money flows easy to me, whatever it is that I'm specifically trying to work on. Except I don't just read this right before I go to bed and when I wake up, which is when I do, your brain is in the alpha state and theta where you're more suggestible to the hypnosis state, right? And you program your mind better right before bed and right when you wake up, you don't have the other bullshit going on in the beta stress beta brainwaves but the thing that I do first is I take my piece of paper and I close my eyes and I drop into a memory of an elevated emotion. I'm in it right now. It's like this portal almost in Italy on a bridge overlooking the Ponte Vecchio in Florence and it's my happy spot. This is where my heart is at peace. And I drop into that gratitude, that peace, that love, that feeling of fulfillment and dreams come true because there's always a dream of mine to go to Italy when I was young and I drop into that emotion and I feel then I opened my eyes and then I read my affirmation. So I'm feeling that elevated emotion and then I read my affirmation and I'm tricking my brain to feel that elevated emotion as I'm reading those affirmations and that from a neuroscience perspective allows it to be more sticky, allows it to program better. And it attaches those positive emotions of abundance and love and gratitude to what it is I'm trying to create.
00:16:54 - 00:17:22
So that's really a method of what you call, mentioned the term I did hear early. It was subconscious priming. Okay, very cool. I have read a lot of that, around there like Napoleon Hill, How to Think and Grow Rich, I've read all of those. I've read hundreds of books as well, I’m an avid reader and my son is dyslexic. So the way he learns is by using Youtube.
00:17:22 - 00:18:00
I do too. I mean honestly like every morning, so there's a whole night morning routine that I go through in addition to what I just explained. But as a dyslexic person mildly, I'm not crazy dyslexic but I'll get through a page of reading a book and I realize I'm cracking and not only did not comprehend it, but you know, my brain went off too. So the ADD and Dyslexia in one is quite the combo and so you have to learn new tactics to be able to learn and grow and Youtube is a wonderful way, Audible. Youtube. These other visual learning platforms are phenomenal way to find a way to work for you.
00:18:01 - 00:18:55
Yeah. And the reality is how long is you should have been around for only since the early 2000s. Okay, Audible books. How long they've been around about the same time so that the tools we have at our disposal today that are enabled by technology are, we take them for granted. But I'm still, I'm grateful everyday for a piece of software like Trello for example, that helps collaboration for the team, right? So look, software can change your life as well as a lot of other things. But yeah, I love that deep dive. You went into your subconscious priming made, it's really, really helpful and so now let's go back to where you did the commodities trading, you had an aha moment, you should be happy, but you weren't and then did you start Roozt.com? Is that when that started?
00:18:55 - 00:23:23
Yeah, so I was, I was sitting on my couch, the company had failed, the commodity's business, sit on my couch when I was living in Los Angeles, watching television and I see an advertisement on TV for a shoe company called TOMS shoes, we all know now as a global brand, with the buy one give one model, but I had met Blake Mycoskie, the Founder, when he had just launched, he came in and spoke in the Entrepreneur Club at USC that I was President of, and the gap between when I saw him speak and that moment was a couple of years maybe. And it was at that point had given away 500,000 pairs of shoes, I was like, oh my God, that's incredible. And I had had one of the first pairs and it just clicked for me to say where is the Amazon or the Etzy but for brands like TOMS and I said, why don't we have a marketplace for brands that are doing social good in the world like that. Moreover, I was like that's what I want to do. In college, I called it being a philanthropreneur, but now we call it, you know social entrepreneurship, right? And so as the commodities things was winding down, I saw that commercial and it was just like this click click being like, I want to dedicate my life to creating for profit businesses, that creates social impact and financial returns and Roozt was, by the way, I was bad at branding back then, you should have like the previous, it was just bad. So Roozt, it was called roots. It was terrible, right? The pronunciation of it, but the passion was there. And the idea was to create an aggregate millennial focused marketplace, that eventually we had about 1000 brands in the management in our SAS marketplace, like in Etzy. We did the research, the ratings and the retail. And in that 10 years, about a five year stretch, 4.5 years stretch, we were one of the first advertisers on Facebook. And we, you know, got all this beautiful press and accolades. We had all the momentum except for a couple of very important things. One, we want a really good business model. Two was, we weren't in a big enough market to go raise venture. We raised angel, but about a million and a half or so a little less, but it's very small checks over the course of five years. So it was kind of the death of a thousand paper cuts. And what we lacked in business model we made up for in passion, and so we were able to get a lot of momentum and we were digital marketers, you know, we took a digital marketing digitally native marketing approach to the platform. And that worked and so we were able to acquire customers really cheap early on on Facebook, it was like one penny cost per click. I remember when it launched, I was doing UI design in my office one night and I saw, because I was one of the first people on Facebook when they have a .edu back in the day and I saw my right rail some advertisements, what is this? I clicked on it and it was, you could run ads. I was like, oh my God we launched ads and all of a sudden we unlocked the most powerful direct response engine in the world but from the operator's seat not from like an agency marketing, marketer seat. A 360 degree view of how direct response interacts with customer service, interacts with supply chain, interacts with all these other elements, lifetime value extension, CRM, etcetera. And so we, we really saw that we got that first wave then we hired a bunch of agencies to do it for us. They all sucked. We fired them and I decided to build in-house and that presented its own challenges and by the time we cracked the code and we're scaling the company who was our biggest kind of competitor that was like, hey, we are this Fab.com, but for this industry, they imploded a billion dollar valuation overnight. Almost out of business. The VC market went soft. We had a term sheet on the table and, in basically one day we had to lay off the entire staff and team and next year by myself rebuilding it into an automated system and then we sold it, basically sold different parts and so, you know, it was a hell of a journey and talk about grief. It's like losing somebody you love when you were that passionate about your, your baby and then overnight almost it's, you know, it's gone. There was this big void before I started Stealth, that I really had to process the failure, the grief, the real emotions that came up with that. I was not in the seedlings, you know, hardship, the seedlings of joy mindset at that time, right. So you know, that's kind of, you know, how it, how it all happened. And, and we were, we were very, and we still are, but very passionate about proving to the world you can make a difference in a profit.
00:23:24 - 00:23:58
Yeah, yeah. You had that aha moment and then you start Roozt. And the other thing that came to mind is you're talking about that, Roozt.com sort of imploded because of what was surrounding you in the marketplace and you've got a little control over that, right? But so how much did that company, Roozt, that you started and looked after and nurtured and grew and agonize over? How much did that define who you were back then?
00:23:59 - 00:24:52
You mean back then when I was in it? I was Roozt. It was me. I mean my cap table was filled with my best friends from college, my high school football coach, my uncle, my brother, my, you name it, right? So we have 45 investors on the cap table. And so when you say like Roozt was me and I was Roozt, it was like, I had my identity buried into that business. And so when the business failed, I felt like I failed, not just, I failed out of business. It was shame, embarrassment, sadness, real grief. And it's called ambiguous loss, real loss feeling to that. I was broke, right. And I, you know, was on the verge of bankruptcy, but I didn't want to get a job. You know, I think at the time my brother told me to go get a job at Starbucks. I was like, you don't get it right. And, and my mind..
00:24:52 - 00:24:56
Occasionally that sort of things like go and get a job, you're going, I can't.
00:24:56 - 00:25:04
Yeah, I mean that was, I was so, to answer your question, it was, it was a 100%. I was it. It was me.
00:25:04 - 00:25:11
It's almost like you knew that, had to die to actually grow again
00:25:12 - 00:27:01
And you know, that's it, you know, and, and, and so when, when you're in it, going back, when we talked about that absolute value of failure, when you're in the valleys, it's really dark and hopefully the sun rising and it's cold and it's scary and you know, you're alone and all of that and you, you know, it's a long night, but in that time and in that moment, it was dark and it was, if I really go back and look at all the, like the really dark periods that have happened in my life, like the rest of us, the things that got me out of it was some ray of hope or some ray of me getting back to me and then when Roozt failed, and it finally was done and we had like sold it and paid back all the debts that we could and you know, and all that and we just kind of like closed that chapter.
There was almost this catharsis of just like exhale and then I said, I'm not ready to get a job, I'm broke, I'm in debt. I don't have a lot of money. I don't know what to do. I'm living in a small little bungalow on Hermosa beach with my girlfriend at the time, you know, and I said, you know what? I'm going to Italy, right? Because that's the place that had brought me happiness. It was my lifelong dream to go. I went studied there abroad when I was in college and there was feeling dream come true and my mom's side of the family is from there. And so I said, eff it, I'm going to Italy and, and so as we did on a shoestring with super cheap tickets, you know, we stayed in really cheap Airbnb or with family and friends. And you know, I was like, I just need one client, a consulting client. I knew what I knew was, which I knew how to market. We had, we didn't have a marketing problem. And so I asked some of the brands that we had worked with us, hey, do you need any marketing concerns in the future? And I had like, I think it was like $1,500 or three grand, you know, in a retainer and that was enough for me to be like, let's go.
00:27:03 - 00:27:55
Yeah, sometimes in the valley, opportunities show up to reinvent yourself to grow. You don't see it at the time where you feel is a pain, but, and I reflect a lot on life and you know, a broken marriage, lost, you know, having to walk away from the family home and hand it back to the bank. And I reflect on that and going, if that hadn't happened, I wouldn't be doing what I'm doing today. It took me 50 plus years to find out what brings me joy and I stumbled into it and it flowed. That's when blogging took off in the 2008, 2009, and social media exploded. And so you reflect on that and you're going, if that hadn't happened, I wouldn't be doing this today, I'd be trapped into something I don't want to do.
00:27:56 - 00:29:36
The gratitude is the ultimate form of receivership. And what I mean by that is like when good things happen to me, it's I'm in a state of gratitude. And they only get into a state of gratitude and look back at my past, I don’t have enough time or healing or perspective to say, wow, that seedling of joy was a really dark time, but I'm so glad it happened because it forced this new growth in phase. And when it comes to like our physical body, Jeff, we go to the gym, we work out, we go for a big run or something. We know the science of breaking down our muscles creating lactic acid, pushing ourselves, getting sore and that that feeling of soreness and what people call pain is what makes our muscles grow stronger. But when it comes to emotions or when it comes to failure or non tangible things, we somehow think that we are absolved from that natural process of the lactic emotional acid making us stronger and it's not until I've been through a couple of these big cycles of up down, up down, up down and they've done a lot of work, you know, both just a lot of work meditation and talk therapy and non traditional therapy and all different areas of all the different, you know side of of how to do personal growth that I've realized that full circle moment of the polarity here to say, wow, that that happened not to me, that happened for me and I'm so grateful that that happened because it's led to this. And that has been a fundamental game changer because you wouldn't be sitting in the CEO doing things, you're so great at doing, having the following. you had, had you not have gone through that dark night.
00:29:36 - 00:29:49
Yep. Exactly, and that's what I'm grateful for it and I'm grateful for the pain. And so it's and your parents usually don't teach you these things, it's not even mentioned in dispatches.
00:29:50 - 00:31:17
This is not stuff that's not taught, right? And I think what's interesting about the time that we are in right now is it's starting to be taught and it's starting to get, you know, if you think back to the ‘80s and ‘90s when someone said Tony Robbins, really good example, like, oh God, Tony Robbins corny and this, that, you know, that was kind of the general mainstream, he's the infomercial guy and the self help, and if you need self help, you're this, that and the other. You think that what's happening now, not only is Tony Robbins more popular and relevant and the, you know, the one of the best personal growth coaches to ever live, if not that, right, but look at all of the other people underneath them, the Lewis Howes, that Tom Bilyeu, even the Dispenza of the world, all these micro personal growth and it is now cool to work on yourself, right? And the access to information is greater than it's ever been. And so I think we're living in a really interesting time that people are awakening to more and more. Meditation is no longer a thing done in the east where you sit cross legged and stay home.
The thing you do in a big ballroom with 1500 people listening to music, having existential, you know, this is the Dispenza world all the way through to sitting on your couch doing Headspace now, a billion dollar company, you know. So it's we are living in a really kind of fun time where the collective enlightenment but the collective consciousness is starting to wake up to this to stuff our parents didn't teach us.
00:31:18 - 00:31:24
Yeah, yeah, I totally agree. And I've been working on myself for a long time and a long way to go.
00:31:25 - 00:31:31
Out there, there's no destination, we say the journey is the destination.
00:31:32 - 00:32:03
Absolutely. And if you don't enjoy what you're doing, well you better start thinking fun. You need to actually ask some hard questions because the ability to work remotely, to actually start a business, a side hustle without having to give up your day job, you know.
So now one question I want to have, which will lead into, so you're doing this consulting, your travel to Italy and you started doing consulting. Now, was Roozt.com a subscription business model?
00:32:03 - 00:32:21
No that was one of the reasons why we failed because we were, we were raw as based e-com and we were dropship raw based e-com that was 25% gross profit margins from our brands that we sold. But we funded the acquisition..
00:32:23 - 00:32:25
That need a lot of working capital?
00:32:25 - 00:33:39
By the way, also under the discounts and we gave discount that came out of our, so we ended up with 5% margins or something, you know, so that plus single time purchase commerce was when the money ran out, we fell off a cliff of revenue. You know, you can milk your email list dry only so much. And so it was that, like, so I walked with no money and tons of debt and a lot of heartbreak. And so what I did is I went up into the mountains of LA in Big Bear area for a weekend for about five days. Shut off my phone and took my dog and took off all the data and said I'm not leaving here until I come out with some return on investment, some data, some insights, something that I can take, apply to my next business to make up for the lost time. And I came out of that with five, what I call new venture criteria, five common denominators that we find to be omnipresent inside in any e-commerce business that eventually finds product market fit and scales. And so part of that was the business model and understanding the compounding effect of subscription and recurring revenue with linear growth, but the compounding effect on revenue over time and the power of that business model and how that would be a part of everything I do moving forward for the rest of my life. And that's that.
00:33:40 - 00:33:53
Yeah. So I've noticed that in your description of Stealth Venture Labs that you actually provide consulting growth services for subscription based consumer goods company, is that correct?
00:33:53 - 00:33:54
00:33:54 - 00:34:06
Okay. Because I think the other thing that's really interesting to watch is that it's almost becoming the go-to-model to product to actually create a subscription model for almost any type of business today.
00:34:07 - 00:34:33
That is correct. And you know, so that Stealth Venture Labs will kind of come back to the origin of it. But today what we are is we are a growth marketing firm, we have three arms, we have a traditional agency that helps brands, e-commerce and subscription alive, scale through growth plateaus. So companies like HelloFresh or Potpourri, Revise or Crocs, big brands all the way down to startups alike. And then we have what we call Founder Lab that helps bigger organizations trying, or lots of small companies even to startups, trying to come to market with an idea, developed their concept into an MVP. Find their early product market fit in their first kind of million, $2 million of revenue. And so today actually we just launched one of our, one of our brands called bradpep.com, one of our big clients where we developed a concept from scratch from their B2B service model into the B2C side of things. And so that's Founder Lab, that's kind of our incubator accelerator.
The Impact Lab is our e-commerce, social good arm where we teach how to start e-commerce businesses and run MVPs to inner city, primarily kids of color teenagers in the United States. So the Growth Lab, Founder Lab, Impact Lab, three divisions of the company that we now, that we own and operate the subscription model. The reason it's so popular today is not just because of the compounding effects, well sort of because of the compounding effects of revenue with linear growth, but when you run a subscription business, there are four big KPIs that hundreds thousands of micro KPIs went into CAC/LTV churn and gross profit margins if you can control for those and have those in the right health and zone, you have a healthy compounding scalable business.
00:35:50 - 00:36:14
Okay, so before we go any further can you, those acronyms, could you tell me what they mean? Because the reason why is we live in industries where acronyms are thrown around like confetti and I have a saying guys, if I see, if you see an acronym, shoot it.
00:36:14 - 00:38:35
There's a lot there. So CAC is customer acquisition costs, how much does it cost you to acquire a customer online? And the other one, LTV, lifetime value of that customer. How much is it, how much do you make of that customer over the lifecycle? Who they are? Your gross profit margin, gross product profit margin is really what we're looking at and then your churn is how many people leave aggregate for months. So those big, those big four KPIs as we call them subscription businesses are extremely not easy to manage but you can start to really look at it like a control center and see all the hundreds KPIs that go into effect those and back in the day on Facebook as you, before Instagram was a thing, when you could get a 10 cent cost footprint and you could drive customers through at a reasonable cost. You could run a business on a return on ad spend basis. But what we find is that new companies coming to market, brand new companies coming to market unless they are a category definer where there's no other alternatives for them and they could just come in and crush the market.
It is really difficult to create a return on ad spend model because it's so expensive to acquire customers in the wild right now and it is so hard to track that with IOS 14 and all the attribution black boxes that have gotten worse and privacy issues, right? So the return on ad spend model, unless you're a category definer when you start to, when you first come to market, it's really hard, not impossible, but really hard to make work when you come to market with a subscription brand, you have an estimated lifetime value of what those customers are going to be in a rebuild cycle again and again. So you're not trying to make money, would be nice if you can make money on your first transaction and return on ad spend basis. But typically you don't, you don't become profitable on that customer until in between. Sometimes bill cycle two and three, sometimes three and four. And depending upon your business, if you are a weekly business like food meal kit deliveries, that could be a month before you break even on that customer. But if you're a quarterly clothing box company that could be a year and the gap between when you invest in that customer and when you make your profit back is your cash form and it becomes very different, very, very difficult to manage if you are bootstrapped and don't have a ton of money from a venture, a line of credit,
00:38:36 - 00:38:37
We don't have enough working capital.
00:38:37 - 00:39:20
Correct. So, so subscription has become popular because of the compounding effects of your customer base that you can manage those big forum and you can have a long term life time. And if you look at all the successful businesses take out like save ad revenue businesses, which some could argue, our subscription companies too, but just on a variable basis and you look at companies like the big telephone companies or Salesforce or any of these organizations, business model behind them is subscription, right? It's SAS or it's, it's a, it's a, you know, you have a contract for your phone or whatever internet and it's compounding because it creates predictable revenue and manageable operations.
00:39:21 - 00:39:36
Yeah, yeah. You're just seeing it everywhere and it's certainly even the venture capital and startup industry is almost, if you don't have a subscription model for what you're doing, they don't look at you.
00:39:36 - 00:40:05
But it's for that reason, it's for what I just explained because what happens is like going back to Roozt and the failure and the learning there is that when the money right now, the revenue right now, if you run out of money and you stop marketing in a recurring revenue in the MRR, monthly recurring revenue basis description, you have a gradual downhill slide, right? And you have time. And so when I was, I was an entrepreneur in residence at a venture fund in Los Angeles in between, when Roozt ended, and when when Stealth really kind of started to begin and ramp up, we wouldn't even take a look at it if it didn't have recurring revenue. And most venture funds these days, if not all, it's probably safe to say, don't, they're looking for monthly recurring revenue. There's certainly examples of category to fires and different things where revenue is not the, you know the issue, but when you're dealing with consumer, you know, people are looking for traction and monthly recurring revenue in a way that is defensible because it creates big businesses.
00:40:29 - 00:40:42
Yeah. And some of the terms have come out of that SAS, break that down, software as a service. Sorry, I pulled it up in the acronyms.
00:40:42 - 00:40:45
It's just all over the place.
00:40:45 - 00:41:32
And the reason why is because we live and breathe in our industry and we, like, I've heard a guy talk about it in the technology industry and I had a chat with him, I think it was over a beer or a while with a few other friends and I said, I almost didn't understand a word he was saying because it was like acronym jungle. So, but anyway, so the other terms of coming that is software as a service is sort of being the go-to because it's where you pay and rent to pay for the use of a product, just Trello, a collaborative tool now owned by Atlassian. And, and the reason, so that's how you get it, you get it delivered in the cloud, there's no delivery of cost, the margins in the 70, 80%. It's just like an entrepreneur's wet dream, frankly.
00:41:32 - 00:41:52
It is. You can find product market fit in software as a service. It is that because there is a, there's a, there's certainly startup costs to get going and build it and manage it, but then that compounding growth curve is exponential versus the incremental costs of running.
00:41:52 - 00:42:05
And so and out of that software as a service, SAS model, there's other sort of subscription model acronyms arising as well. One of them I discovered a year ago is called creative as a service.
00:42:07 - 00:42:37
Yep, yep, we considered early on calling it growth hacking as a service, creative, I mean there's a, there's a lot of, it's still the same thing, I mean it depends if there's people behind it or if it's algorithmically driven, if it's algorithmically driven on the creative front. For me, it's just a new way to brand software as a service. If it is creative as a service and it is a bespoke process with people, it's just another way to brand service providing, you know?
00:42:37 - 00:43:20
Yeah, and then it depends then the challenge then if it does involve people, then how can I scale those people by actually using technology? And that's the other challenge. And look, I've been involved with a startup for 10 years. It's called Shadow Rock. We've pivoted twice. The first few ideas were just disasters, including T-shirt design and selling, and then we did cookbooks and then we discover the next part of what we did and now we've got 250 staff and global with about 10 different offices and we're in the middle of revolutionizing creative as a service as a subscription model as well.
00:43:20 - 00:44:27
That's a perfect example, by the way, like just to your horn for a second, a perfect example of listening to the market and you know, I think what happens oftentimes is in, it doesn't matter if it's our clients coming to us, some of the biggest brands in the world and your kids help freshen those types right all the way down to small startups, like the brands have really, really find product market fit in scale are the ones that are not like I wasn't used detached attached to it. My identity was in it. It blinded me to something we had, which was we built on the back of a yoga vertical. And if I had listened to the market and not been stubborn and saying this was my vision and my idea and actually listened to the data, we would have pivoted to a much larger, more successful profitable yoga based marketplace. And so, you pivoting twice or going through the different, you know, iterations that you have to find it. That's exactly how businesses should be running. You have a business plan, you know, business reality, you got to get to market, get punched in the face, figure out what it says, adapt to the market. And then, you know, you don't get to tell the market what to do. It tells you and you get an opportunity to list.
00:44:27 - 00:44:50
Yeah. And that's right. So I love the phrase by Tyson said, everyone's got a plan until they get hit in the face, which is the market telling you whether it works or not. And, and a business plan is always just a prediction of the future and good luck with that everyone. Try and keep it at one page. That's enough.
00:44:51 - 00:45:24
So that that's actually that's exactly right. So we now, we don't write business plans, we do business cases. So we'll do an FBA, a financial planning and analysis documents. And but we write one page concept statements that is the synthesis of an idea and saying here's what is, we have a format to it and then we take that one page concept statement and you build out a very simple MVP, minimum viable product. And you know we actually just launched a course online, it's called Million Dollar MVP and it is about the process that we use to take an idea from your brain and then test it in like a facade style storefront.
So you can actually listen to the market, you don't buy inventory ahead of time, you don't create, you know a ton of upfront costs and $5,000 for five weeks. You're able to test and validate your idea and see it a go or no go decision? And it all starts with a one page concept statement, that's the new business.
00:45:42 - 00:45:44
So is that a course you put together? Is that correct?
00:45:44 - 00:47:09
Yes of course we put together, we actually just launched it last week and we are in the early stages where we tried to synthesize our 15 years of experience, you know and you know we've capitalized now a billion dollars in M&A Exits for our clients, Home Chef and HelloFresh and a bunch of others. And we have, you know, last year we spent about $100 million in media, we've launched a bunch of brands that haven't worked, a bunch of bands that have, so we're saying, what's the, what, where does someone start, how do we help them start? And so we took the ideas, we created over 70 videos into small snack, bite-sized courses, created a Playbook of our exact process and how we do it, how we take an idea and turn it into, you know, have our guard rails of our five criteria that I told you about earlier, turn it into an easy to operate Shopify storefront with no inventory and how to run your starting Facebook AdSense to test and see true consumer demand. Is this worth my time? And is it not? And so we built it actually as a use case to kind of take our ideas out of our heads and put it in for the market, but we now use it for the kids that we teach, the inner city kids that we teach entrepreneurship too and so they run through our academy, repair them with a team member and myself, we give them $5,000 to test their ideas and to learn the skills of how to, you know, work out how to fish.
00:47:08 - 00:47:12
Yeah, that's great. So where's, what's the name of the course and where can people find it?
00:47:12 - 00:47:18
Yes, it's called MillionDollarMVP.com. Million dollar MVP.
00:47:19 - 00:47:28
Great! So awesome, I love it, that's really, really good. So we're about to launch a MVP. So we'll talk more about that later offline.
00:47:28 - 00:47:31
But I love it.
00:47:31 - 00:47:34
it's based upon a subscription model by the way.
00:47:35 - 00:47:57
Yeah, well for your for your listeners, if anybody wants to take the course, we'll give a discount code for them called JEFF50 and it'll be 50% off for them if they want, yeah, hook, hook you up and all we ask is if they have feedback on how we can make it better just to leave it. That would be, you know, are we asking.
00:47:57 - 00:48:21
That's fantastic. Now, so this goes back a little bit because I love loving our conversation. It's just we're going down some beautiful, beautiful rabbit holes. So that's great. So, you go to Italy, you start consulting, is this where Stealth Lab sort of arose from? He started doing the business consulting, marketing growth.
00:48:21 - 00:50:38
Exactly. So you want to talk about listening to the market? It was like, you know, people kept asking me, I need help, do you know how to do this, can you do this for me? And because I wasn't, I didn't start an agency to start an agency. I actually started, I was a Founder and I had the same strange struggles as the other founders were having. They were hiring and firing agencies and couldn't build a team.
And so they came to me kind of as like a co-founder. Oftentimes in their early stages. And so we, early days started and co-founded about five different subscription-based brands, some of which are still around and some of which have gone out of business. One that, that is around, that's, that's driving right now is called Beachly.com and the other one is a golf one called Short Par 4. These are all golf and lifestyle, beach lifestyle apparel brands. We started helping them from the operator's seat, build growth marketing engine and that's how Stealth began. And so for the first three years of the business, we weren't a marketing agency. We were like a co-founder, hybrid equity meet service provider and we would get them to a couple of million dollar revenue run rate. We would reposition them, we would use our five criteria that I learned from the failure of Roozt. We would build, rebuild them in Shopify. And we would get their initial product market fit momentum up to, you know, a couple million dollars in revenue. Sometimes they stayed with us for 4 or 5 years as a client after that. And sometimes they graduated on and built a team in-house.
And so Stealth began the name, actually was because I was so tired of being in front of the camera per se and Roozt and being the name and I was like, I want to be behind the scenes now and that's how the name brand started Stealth, right? We wanted to be quiet behind the scenes, the secret weapon saying we have a really technical skill set that can be applied to help accelerate growth and solve really complex problems. And we're gonna turn the agency model on its head and we're not going to be, you know, high on on senior people and then hire low, you know, low paid analysts to come in and run your account and just won the churn game. We're gonna hire seasoned experienced executives and veterans who've done it from the client side. And we are going to do it as if we are a staff augmentation team. And that has been, that has been very successful for us for the last, we've been around for almost a year.
00:50:39 - 00:50:44
So I'm very curious about the five criteria. Can you spell out what that is or is that stealth?
00:50:45 - 00:52:27
No, no, no, no. That, that, that, that is not stealth. I wrote about it. They kind of bastardized. I wrote about it on ink, sorry, entrepreneur a few years back now. Um, and I'm happy to send you kind of a more lengthy article for you too. If you're so in essence, these five criteria again came from analyzing 1000 brands that and they're sell through data in our marketplace, the previous company that I had. And then what I did is I came out the mountain, like being like, I think I have these five things and this is my hypothesis. Let me apply them. So I started applying them to our brands and companies were working with, the companies were starting and it has become, by far the biggest predictor of success. It does not encapsulate like lightning in a bottle, you know, if your category definer or things like that, this is blocking and tackling e-commerce subscription college. So the five, the five are as follows first and foremost, and these are not rocket science, Jeff. So, you know, I'm not gonna blow your socks off on them, but I'll tell you why they're important. First one is passionate audience, passionate interest group and a passionate audience is not general, it is not sports fans, right? It is basketball. It's really clear, and the way that I describe it to people is if you were traveling back in the days when we did those sorts of things and you were at an airport bar and you sat down and you and I didn't know each other and we sat down and we started talking about ex marketing, right? Or whatever it is, might be in there, it might be yoga, it might be basketball, it might be, you know, Aussie rules football, whatever. We don't, perfect strangers. We don't know each other, we can geek out together for hours. that is what we define as a passionate audience, right? Because when you have that, you can clearly define them. You start to know who you can target in a direct response to so much
00:52:28 - 00:52:29
Like your tribe.
00:52:29 - 00:56:03
Your tribe. Exactly, right. You find somebody that goes to Burning Man, they'll never stop talking about Burning Man, right? It is part of their culture and who they are. And when you get together, no matter if they're strangers, they are connected, right? It's the menus, and we'll talk about why that's important. Second, the second one, so passionate audience, the second one is scalable interest that needs to be a big audience. If it's too small or too niche, then you're gonna have a really difficult time targeting those folks and creating a big business. It's not that there's not a business there, it's just hard to acquire customers in a small market and have it back out. So the second one being a scalable interest group where we talked about on Facebook specifically when you're doing audience kind of research is 10 million or greater, 20 million.
The third one is a unique selling proposition, unique value proposition. And that is something to get someone's attention. You know, something that is, is it's not just the standard run of the mill. Why should I care? Something that's unique that gets my attention. Going back to the golf company, for example, when we started that early on, it was, you know, you go, if you play golf, you go into the pro shop, it's $120 for a poll. We were like, there's a better way to do it. Supply chain. If we cut out the middleman by overstock, but we take the merchandise and we kind of re sort it, we can pass the savings on to the customer. Let's put three items in a box, a full outfit for $45 to give you $100 worth of value, right? And that was a unique selling proposition, wow, you can get a whole box curated for you, right? For $45.
Third one is, the third one is, is it needs to have a disruptive price point to it and you know, well, we actually call it, uh, sorry, the fourth one that is compelling unit economics. So compelling unit economics being number four is a dual sided coin. It is enough margin, 50% or greater on your product and has disruptive enough price point to where you can come in and cut out your competitors and beat them. If you can hit both of those, you are in a really good position and that is solely squarely based upon supply chain.
And the last one is really unique because it solves a market pain. It's not rocket science. Do you solve a pain? Are you a nice-to-have or are you a must-have? Go to Maslow's hierarchy of needs. Where do you fall? When a pandemic hits, are you a nice-to-have or are you a must-have? Are you a food subscription? You know, toilet paper company or are you a nice to have, you know, kind of like luxury apparel brand where you fall on that pain structure pain points. That's what pain do you solve? Really determines how well you can weather the economic seasons that invariably happens. So one is passionate audience, two is scalable audience, three is a unique value proposition, four is compelling unit economics. And the fifth one is solved some sort of pain where most entrepreneurs fall down. They fall in love with their product. And they convinced themselves that one of these is okay to not have or it kind of hits and that's okay. It's a binary. It's either yes, it's either an eff yes, that it hits it or it's a no. If it's a kind of, it's sort of or it's I don't know, it's a no. And what this does is it creates, it protects us against ourselves and falling in love with our concept and spending five years building out something like I did and that you were super passionate about that was fundamentally set up for failure from the beginning without realizing.
00:56:02 - 00:56:14
I love it. It's really, really great. So you work, so Stealth Venture Labs is a service model or your product tells it what you do?
00:56:15 - 01:00:11
No, we're a service model. So yeah, we're a service model. We're looking at how we productize it. We've been so busy doing that. The productization of it in terms of, you know, creating SAS or software has been delayed. We use a lot of, we use a lot of software. We have a lot of custom things that we've stitched together for our use cases, you know, and then the programmatic side to make better decisions on the analytics and business intelligence side. But our growth lab is our core agency model and that model, we are agnostic to stage an industry. We work with some of the biggest household names you've ever heard of to brands you'll never hear of that are just getting off the ground and everything in between. And the model is the same as a company typically comes to us when they've hit some sort of P&L growth plateau, profit and loss statement growth plateau. They're either trying to get to the next level of membership, they need to raise around, they want to get an exit. They're not happy with their in-house team. The agency that got them to where they are no longer works or they're just unhappy. They can't figure it out.
And we come in, our model is different. So we don't hire junior anybody. Most of our people have been on the client side for the majority of their career. And we take that, I've embedded that operators approach, that 365 analytics approach into how we do growth marketing, Facebook ads, Instagram ads, TikTok, Snapchat, you name it, right. We do it, we do it all and how we run the creative process, it's something we trademark called AdLightenment, and the AdLightenment process for us. It's good, the AdLightenment process is the reverse engineering of the psychology of the user archetypes that are potential targets as passionate groups for our clients. We go through the day of the week, the life, I mean we literally embed ourselves to give them a name. We run this process for every one of our brands and then understanding their pain points, uh, and what their life cycle looks like and what not their life cycle in the company, but their life cycle. And then we reverse engineer the brands benefits, we extract the benefits of the brands out of their features. So many brands are communicating features, features are I deliver a meal kit to your doorstep. The benefit is date night with your, with your partner, benefit is more time with your kids. The benefit is save money, you know, without having to go out and so we extract the benefits from the features of our, of our brand partners.
We extract the pain points of the individuals that we are targeting, the archetypes. And we connect the dots through a bridge that we call AdLightenment, which is a creative copy, and media buying process that allows us to get insanely good results. And that process is what we run for small and big brands alike to help them scale through growth plateaus. Because anybody, any media buyer, any agency can get, you, can get your results with, when you have tail winds in the market. Yeah, very few know how to iterate and push through when you have headwinds and that's what we've specialized in. It's really helping brands get to that next level when they're experiencing headwinds, whether it be understanding their being their their business intelligence in their lifetime value of their customers and what that means to their target customer acquisition costs, how it all ties into how do we acquire customers profitably in iOS 14 world where reporting is delayed and our black box has gotten bigger. Well that wasn't, I mean it was an issue for all of us, but we were already always managing from a blended acquisition attribution model anyways. And so when that hit for us, we were like, okay, well this makes it real and yeah, it creates some headwinds on how to find the right people and audiences, but this is how we've always managed. All right. And so we've been, we've been well suited to whether that storm the town.
01:00:11 - 01:00:17
So when you work with these brands, do you take equity positions sometimes in companies?
01:00:17 - 01:00:18
01:00:18 - 01:00:20
Is that a part of your business model as well?
01:00:20 - 01:01:29
It used to be the whole business model. Now we are service for hire and growth lab. And if we do an equity position or partnership, it's in our, what we call a founder lab where we sometimes make cash investments out of our own capital. There's no LPs, limited partner or their investors. And sometimes it's an equity for service model. So it's not a case by case depending upon the business. And are we on the right skill set to help, you know, gonna be a good fit. So like right now we just, we just launched as equity partners. We're launching with Kevin Hart, the comedian, you know, so yeah, so we have a, we have a big vitamin brand called VitaHustle coming to market here with him, that we are super excited about, he's, you'll start seeing it all over the place. So we do that occasionally as minority partners of course in that and then we drink our own KoolAid, so we launch our own brands. So we have, right now our in house brand is called Known Alive and it's a livestream cooking class with Italian grandmothers in Italy and we have a little olive oil subscription from the family farm.
01:01:30 - 01:01:47
Now the other question I have, which is everyone's battling with at the moment, is how do you do remote work because you are remote company, I believe. So what are some of the challenges there and what are some of the opportunities?
01:01:48 - 01:04:04
So we've been remote for seven years. So again we were a little bit ahead of the curve and well designed to weather the storm of the pandemic. It wasn't to change, it wasn't a cycle, it wasn't that, we were remote already, it wasn't an issue. And seven years ago when we went remote, one of the reasons I did so was because I was living in LA. I was moving back to San Francisco, we had a lease of our office come up, it was holiday time, I didn't want to renew and I said let's just, everyone worked remote for a quarter and let's see what happens, we saw a productivity shoot up, we saw happiness shoot up, we saw our ability to recruit outside of a geo fence skyrocket. And our costs went down because we didn't have the office and this and that, you know, it's like, wow, this is interesting. Let's continue to do this. And if we're gonna do this, let me look at some of the best people out there who have done it, 37signals and a few others. Um, let me look at, let me look at other people have done it what our models and then, yeah.
So, so yeah, exactly. People have done this. It's not, it's not new, but what it takes and what I realized is that it takes massive amounts of intention reinforcement and a really tight hiring and culture, creation process. And so we did that. And in that process we have done every model of stand ups and check ins and daily and weekly, you know, we've tried it all over the years of how to create the best culture. And just last year 2021, INC recognized us as, I think it was 26 on their global list of most innovative places to work. Global, right, which is amazing. We're above like Disney and some others. Andwe were like, wow, that's, that's really awesome. And it's because we've been so intentional about culture building and that comes down to tactically being really clear of who we are, why we exist, our core values. It comes down to how we hire the recruiting process, the onboarding with the recruiting, the interviewing process. The, it's not just a technical interview, it's culture interviews and all that. And then it comes down to how do we operate day to day. So I'll give you like a couple of things in me when everybody's hired. The first email, one of the first emails they get is what we call appreciation languages. They take a quiz. It's like The Five Languages of Love for Workplace.
01:04:04 - 01:04:05
Yeah, I’ve read the book.
01:04:05 - 01:04:08
Okay, the Appreciation one or the Love Language?
01:04:08 - 01:04:09
01:04:09 - 01:06:23
Okay, so what he did, Gary Chapman, he partnered with the business person and they wrote a book about this for the workplace. And so what we do is we create a matrix spreadsheet. We have everybody take the quiz and then they put into this spreadsheet openly to the whole company, who they are, they titled their department, their primary, secondary ways of feeling appreciated. Three helpful hints. This all pops out of this quiz and their least favorite. What that allows us to do is when somebody has done a good job instead of just assuming they like words of affirmation and praise, we reference that and we speak their language directly bespokely of how they feel appreciated.
We do stand ups, Monday, Wednesday, Friday. Monday morning is an all-hands, 45 minutes stand up and we start with a moment of gratitude. We go around the whole company, there's 40 of us all on Zoom and we start with a moment of gratitude, something you're grateful for personal and professional and every single person goes through and tells us that what they're grateful for. Then we go into company updates on the business, company updates in the business and we close out with team wins and team recognition. Team wins are wins from the last week that the three leadership folks in our organizations share. That recognizes something good. The team is done and recognition is we have four core values, collaboration, ambition, playful and efficient. And the, the last part is the team recognizing other team members for a demonstration of a core value.
And then Wednesdays and Fridays are not business, they'll just get to know you, we ask a question, a silly question like what's your, you know, what, what was your prom, you know like or this than the other or you know, if you were a superhero, what would it be? And they're, they're 20 minutes, 25 minute meetings. Everybody goes around, answers the fun little question and then we always end with any recognitions. Again, that's Wednesday, Friday. And so those are some of the things that we do. We have a lot more micro things that we do to reinforce throughout. But when you do it like that and you have these touch points, you get to have these water cooler moments which you miss by being, are not being physically next to each other and it has, we've, we've created an award winning culture and superpower.
01:06:24 - 01:06:51
That's the best breakdown I've seen of actually how to actually create and maintain and nurture team culture in a remote workforce, in a remote business. It's really important. It's something I've been focusing on a lot more. I'm not the structure, we're not as big as you guys in terms of employees. But the other challenge we have though is that a lot of them are all around the world so they can't attend live all the time. So do you record some of these sessions?
01:06:51 - 01:06:56
Yeah. So most of our team is within American hours, right?
01:06:56 - 01:06:59
And that works well for that.
01:06:59 - 01:07:10
We have Hawaii spanning to the East coast. So it's a six-hour stretch. If we were running like the Aussie to American times, we would have to record or request that they're in off hours.
01:07:10 - 01:07:13
I'm not gonna get someone up at 2AM, I tell you. That's not good.
01:07:13 - 01:08:39
So we also do that, we actually, so another part of the culture thing that we are very very fervent on which is 40-hour work weeks for our team. We don't let that, we don't have them work nights or weekends. We believe if we have to work nights and weekends, we have a process broken that's happening actually. So but we keep that very, very strict to keep them to have that work life balance. Uh, you know, and, and so yeah, there's there's lots of other things that, that to reinforce culture in an environment, you know what Jeff, honestly, another thing that I think contributes to this is every Friday, we take a T-SAP, team member satisfaction goes out to the whole team. Everybody scores on 1 to 10, you know, how likely would they be or what their satisfaction and handle these things. We average, we average 9.39, .50 and it's insanity hot, right, we have like less than 5% turnover of team members. And it's just, but what we also do is we give them space to give feedback of what's not working and we take that feedback, we share with our leadership team and then that next week we take action on, right? And so and so that type of feedback loop, It really helps build confidence and trust. I think with the latino, it's not perfect. We're not perfect, you know, but the reinforcement of these things over time is like small compounding daily investments that bring big results.
01:08:39 - 01:09:17
Yeah, that's fantastic. It''s very important because you need those water cooler moments, but virtually, and how do you do that? And I think there's a lot of companies, especially traditional companies are struggling whether it be a law firm, my partner, she's, she's a partner in a law firm and they're struggling with a traditional industry that is trying to manage remote work. And she had to go into work today because the pandemic has stopped it, happening for a while and she said she went in about before Christmas and said you know what, I went to the office, it was so unproductive, I get a lot more done and I said, yep that's that's absolutely true.
01:09:17 - 01:09:18
It is, yeah.
01:09:19 - 01:10:09
But traditional industries that are non, you know that have been running for centuries a certain way and we're talking centuries, there's an embedded culture, a way of work that is a given. And is that necessarily a good thing? The answer quite often is no. But I was, interesting, I was interviewing someone else recently and they manage the company about 550 staf, do garage doors like it is, but what they do is he's hiring a dream manager. In other words, if you as the leader, help your team achieve their dreams, they will, they will then look after your customer. So your job is to look after the team and then the team will do the job of looking after the customer.
01:10:10 - 01:10:15
So that's it and you know, so we don't have a dream manager.
01:10:15 - 01:10:16
I think the term was fantastic. It's actually,
01:10:16 - 01:10:18
I love that.
01:10:18 - 01:10:21
Matthew Kelly, by the way, Dream Manager by Matthew Kelly.
01:10:21 - 01:10:32
That's fantastic. So we in the US, right, non socialized healthcare here. Non socialist. There's a big problem we have.
01:10:32 - 01:10:34
We have, we have it in Australia.
01:10:34 - 01:12:54
I know. Yeah, I know. So as a, as a non venture backed company, no outside investors, revenue based non-SAS margins, right, from the beginning of this company and still now and forever. We have and we'll pay for the best, we pay for our team members healthcare, 100%. Some of the best it's called PPO, right? Which means they get to choose their doctor versus HMO where they don't. They have to go through a system that's totally screwed. So the best PPO money can buy for our team and we pay for 100% of their dependence, their partners, spouses, kids and we believe that if people are worried about their health, their healthcare and their healthcare decisions, then they're going to come to work worried about their, you know about everything and it bleeds in. So if we can help take care of our team, it's a huge investments, one of the largest line items on our, on our profit and loss statement every month and it is the best investment we can make so that people don't have to choose between the health care of themselves, their kids and their career. You know, another thing that we just, we just launched is a parental leave policy that is better than Google's. We offer, you know, five months of paid leave for men or women to 100% of your salary. Again, you know, Australia has some progressive stuff. You guys do a lot of really good stuff down there. We in the states take a different approach state by state and so these, these types of policies, you know, our social benefit decisions we've made as a team to help instead of saying we just make donations like we do or how we teach kids entrepreneurship and things social good for us is embedded into the causes embedded into our coms, right? It's embedded into our cost of goods sold, it starts with our team and the basics are where we start and then you know, we're just now starting to really look at this, I love the dream manager idea, but the professional development map of how do we get people who come in as an individual contributor who have dreams to be an executive one day. How do we create career having for them internally here so that they don't have to, the biggest reason people leave their jobs because they feel they've had a glass ceiling. So you know we are looking at and are doing the investments into our team to be able to be with us.
01:12:54 - 01:13:18
I love what you're doing. It's important and health insurance for many American workers is a big worry if they don't have it, they lose their job, they lose their health insurance. And that's pretty scary because I have heard that the health industry in America is actually very expensive. If you even get a headache and need a Panadol from the doctor.
01:13:18 - 01:14:00
Very, it's a broken system in so many ways. You know, that's a whole separate conversation. But you know, the reality is because it's an insurance based system. The, you know, if healthcare, there wasn't insurance of all, if health care was a supply and demand economy with no insurance based, you know, raising premiums in that hole game that happens there, um, they would never be able to charge for the service is what they do, right? Because it is so ridiculous. But with the insurance involved and the high, you know, the game, the massive profitable game that they play there on a subscription basis right now that they do there, the whole system's out of whack. You know, and, and some people here, you know, they don't call it the health care system, they call it the sick care system, right? It's not for your health, it's when you get sick, you know, and so a whole separate thing. We try to eliminate that as a worry as best we can for our team. And you know, it's weird because, people say, well how does that relate to better clients and marketing services. And it's simple, you know, happier people create better campaigns, they're more creative, they think about problems differently, they're not in high stress there, back in that alpha creative state and that translates to lower customer acquisition costs.
01:14:00 - 01:18:09
And make them feel safe, look after them and then I'll look after the customer. It's actually not rocket science. Mate. really enjoying a chat today, but just to wrap it up, because I know that you've got things to do, like go and play baseball or go to a fancy restaurant or go water skiing, snow skiing. Actually it's time to snow skiing for you.
So what's maybe some top tips that you could share with the audience for what you've learned as an entrepreneur and you've brought back from your ongoing adventure in the entrepreneur's life? What are some of the top tips that you'd like to share as a takeaway for our viewers and listeners?
01:15:15 - 01:17:20
Um synthesize, you know, 15 years of entrepreneurial learning in tips.
So you know, actually it does come full circle to what we talked about at the beginning, failure. I really want to reiterate that, that, you know, failure or hardships or the seedling for joy, you just need to get enough distance and perspective to understand what is the learning from them and it doesn't mean rush the grieving process and all that, but um the sun always rises, right, and um when, if you're in it, if you're in it, whether it be personal or professional or the business is about to fail or just failed or your fear of it failing. Um, there is an answer and it may not be the one you like right now and it may not be the one you necessarily choose, but it's all happening for you in the way that, that it needs to. Um, and with time you will understand that and I think the, with that is the most important lesson I think I've ever learned as an entrepreneur is listen to the market, almost like listening to your own intuition, right? And often times people have a hard time distinguishing what is fear and what is intuition, what am I afraid of and what like I'm scared of doing? That is my intuition is not good intuition in our bodies. Is this soft feeling of knowing? It's very quiet, very subdued, but it's persistent gut feeling oftentimes fear is this, you know? And what we think is our intuition or excitement is our tuition. And intuition is a little more subtle than that. And the market is similar, is not always going to smack you across your face. Sometimes it is right, but it's a little more subtle and it's our job to tune into that and say, what is this trying to tell me? And how can I not be emotionally attached to? It doesn't mean I don't care. It doesn't mean I'm not passionate, but if I remove emotion and I analyzed the situation as if I was a consultant brought into this with no, you know, no, no skin in the game other than tell me what this is, happened to that intuition, what is the market telling us? Is there, is there not right?
And then, you know, and then follow it and don't be afraid to make changes like you did in your own, you know, your own startup to make the pivots to find it. You know, product market fit doesn't matter if your service business or e-commerce or subscription. Product market fit is undeniable. It's undeniable if it is kind of working it is kind of product market fit. It's not product market fit. So, so I think that it's listen to the market right? Don't be uh, don't be all consumed by the fear or if the failures got you down. Um it's, if you're knocked down nine times, it's that 10th time, um, that matters. And that's really what entrepreneurship is not the glamour. It's not the sexy things. The entrepreneurship in the trenches, problem solving saying there's gotta be a better way, even if it's your own business that you're in the middle of that.
01:18:09 - 01:18:18
Yeah, that's fantastic and really what you're saying is you got to play the long game.
01:18:18 - 01:19:04
Yeah, you have to play the long game. And on that note that actually the one thing that they're like personal thing I want to leave people in is reconnecting to what makes them smile from the inside out. Forget all the other bullshit for a second. Inner joy, reconnecting to that. Make an annual list of the things that bring you joy, whether it be riding a mountain bike or going on skiing or the smile of your dog in the morning or your whatever it is. The little things that make you smile from the inside out and do one thing, one thing every day from your list and that compounding daily investment enjoy over time. I call it the ROJ, the return on joy, is just like subscription right? It is compounding, it's exponential over time. And so that those daily investments into joy is probably the most.
01:19:04 - 01:19:42
There's a beautiful quote on Youtube so you don't have to read it is by Steven Spielberg and he says what you're meant to be doing with your life, we will never shout. It's always a whisper. So you need to hear the whisper and that's intuition. But I thought it was beautiful and yeah and if you're so busy and frantic and so stressed it's very hard to hear the whisper because the pain, the grief and the stress just overrides that and the whisper can be heard. So you've got to try and find a space and time to be quiet and here.
01:19:42 - 01:20:05
It's quiet the mind for some people it's meditation, other’s gym, other’s going and watching a sunset doesn't matter. Quiet the analytical mind, get out of that high stress beta hybrid of brainwaves neuroscience and get into get into that alpha brainwave state one state down where you can be creative and your body's autonomic nervous system can take a little bit of a breather and that's where you can tap into it.
01:20:06 - 01:20:22
And one of the best books I've ever read, ever read is the Power of Now by Eckhart Tolle that I read it several times but because you can meditate actually while you're driving a car and I don't mean shutting your eyes but just to be in the moment, even on a bike you're riding, you just hear the listen to the thrum of the tires on the tarmac, you know, it's um it's it's really quite a powerful place to be and it requires actually being in the now requires practice um to remind yourself to be in the now,
01:20:43 - 01:21:23
Most of us live in the future in the past. It's very, you know, and and that's normal because we're you know we are living from the memory of the past and we're projecting it into the future the worry or whatever it may be, it's very difficult to be in the present And you know the word meditation literally translates into to become familiar with. So if you sit down for five minutes and you just focus on your breath or the sunset or you know just to become just to stop the other stuff and just become familiar with go inward your your breath, whether it be, you know how your, you know the respiration is coming up and down or something. That process of getting kind of either an open focus, looking out at the horizon or going inward on it, just a couple of minutes that it is, it is so beneficial.
01:21:27 - 01:22:21
Yeah it is and there's another quote by Eca Tolo that really impacted me as, and you just mentioned too, words past and mentioned future. He says you know, “The past is gone, the future hasn't happened. All you've got is now. So let's enjoy the now.”
It's been an absolute pleasure to have our fireside chat and and enjoy, continue enjoying Lake Tahoe and I look forward to catching up in real life one day.
So thank you very much for your time. It's been absolute joy. It's been a pleasure and I've learned so much today that I've taken copious notes like I've been distracted. It's not, it's because I'm actually capturing the essence of your wisdom and thanks mate has been absolutely a joy.
01:22:21 - 01:22:23
Thanks for having me man, I really appreciate this was a lot of fun.
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