Over the last four years Dan Faggella built his business Science of Skill to over $2m in annual sales, and sold it for over $1million. Science of Skill is an American online only retailer of self protection products and educational programmes. Today we’ll be discussing (for you!) both balancing physical and virtual products, and how Daniel achieved the huge growth in his business. Spoiler – we’re going to be talking dashboards and discipline!
About the business
- eCommerce Business Structure – Online Only
- Product Range Scale – between niche and the middle
- Products a mix of physical items and virtual training
- Whole thing build on Infusionsoft – a very different tech approach to our normal guest
- Based in USA
Chloe Thomas: Hello MasterPlan world. Welcome to our latest show. It’s a pleasure to have you all out there listening. As you probably already know by now I’m Chloe Thomas, the creator of the eCommerce MasterPlan. I’m an author, speaker and consultant and I focus on e-commerce business and strategy. If you want to join the chat about any of our episodes then head over to our Facebook group.
I’m really excited to bring you today’s special guest because over the last four years Dan Fagella has built his business Science of Skill to over $2,000,000 in annual sales and sold it for over $1,000,000. Now, Science of Skill is an American online-only retailer of self-protection products and educational programmes. Today, we’re going to be discussing both balancing physical and virtual products, as well as how Dan has achieved that huge growth in his business. Little spoiler for you, this is going to be heavy on dashboards and discipline. So, hello Dan.
Dan Fagella: Hello Chloe. Man, that was a fantastic sum-up of what we’re going to cover today. I could never have done it better.
Chloe: Well I try. You know, give people the warning and hope they haven’t turned off yet, quite frankly. [laughs]
Dan: No, that sounds good.
Chloe: So, I’ve just, as you’ve said, given listeners the quickest overview of you, your business, and what you’re up to, but how did you get started off in e-commerce?
Dan: I was running a martial arts gym, Chloe, when I was in undergraduate school, so when I was still in college, just because all my friends were getting jobs, you know, delivering pizza or selling insurance or something and I just thought that sounded horrible, so I was teaching martial arts and I poured my life savings into expanding to about 4,500 square feet.
I was, like, 22 or 23 at the time, and we actually had a roof collapse that the landlord for some reason couldn’t cover and I think we just didn’t have the money to get a lawyer to make them cover it or something, so I did actually make it through that. I did continue to grow and sell that company. That was the first business I started in, the first business I sold, but when the roof collapsed, it became very evident to me that I would need to have revenue streams that weren’t dependent on things that have roofs.
Dan: I was doing a lot of martial arts competitions, a lot of national competitions, a lot of seminars up and down the East Coast, in Oklahoma, and all over the place for jujitsu and skill development, cognitive science of skill development at colleges and stuff, and so I started taking a lot of presentation work, bundling that into videos and pairing it with PDF materials to help people learn, and saw if I could, kind of, sell it online. So initially it was two things.
It was: number one, I didn’t want to depend on brick-and-mortar to, you know, pay for school. Number two, I needed a location independent business because I knew eventually I was going to move out here to Silicon Valley to work on artificial intelligence and neuro-tech, kind of media stuff which is what I do now. So, I knew I needed to be location independent and I had a big scale, that’s how I got into it.
Chloe: That’s some pretty serious forward planning.
Chloe: I respect that. So, you started off with those courses, and then you added in the physical products as well, creating Science with Skill?
Dan: Yes actually. So, it started off as just educational programmes to begin with, and it was entirely actually me, which is kind of a silly thing. If you want to build a business to sell you need to make sure you are not the smiling face of it, but initially it was just me. It was like, ‘Hey, I’m going to need another 500 bucks to make payroll for my martial arts academy.’
Things were a little better about three months after the roof collapsed, but you know those couple of months were pretty rough months, Chloe, especially as a guy who had just dumped his life savings into that expansion and so, yes, initially it was just me selling, basically, my own seminars, my own skill development, presentations and, kind of, talks at colleges and stuff in video format/PDF format and then eventually as we grew we added physical stuff. About probably a year into the business or so we started moving into physical goods as well.
Chloe: Cool, and at the point you sold was it mainly about the virtual products or about the physical products?
Dan: You know it was actually mainly about both. I’ll explain how. So, it was the physical products. By the time we sold, we were selling mostly to the self-protection markets, so when we sold, we had 12 different instructors who’d recorded programmes from us across Europe and the United States. It was very much not about me anymore. I wasn’t even mentioned on the website anymore, but the physical products, which in our case were tactical folding knives or DVD programmes or things like that, were often going to be the first sale for a customer. They were the things that enticed them to physically get the credit card out faster for our audience.
Our audience is a little bit, older males, you know, over the age of 50, over the age of 60, actually, as it turned out. I didn’t target that by the way. That just kind of bubbled up from our own market research and our own assessment of our buyers, and we do a lot of phone calls, yes.
Chloe: You see, now you say who the buyers are, I’m like, ‘Okay. Now I understand why the physical products would be the first to sell.’ You would have thought in that space, people, they buy the course and then they realise they need the products, not the other way round. That’s quite phenomenal.
Dan: Yes. It was totally, kind of the other way around, yes. We had a monthly membership subscription programme. We had a couple of those, actually, for self-protection instruction and a lot of the time this would be bundled with physical programmes, or it would be solo along with some other digital programme or something, and that stuff, actually, you know, we didn’t really sell those, or make a ton of bucks from those.
Normally, until after we closed a front end physical sale and we gave people an opportunity to test the education – emailed them after they bought the physical stuff, about the educational stuff. So, in terms of audience exposure we did a lot of paid media. Paid media usually converted far better with physical goods and then on the back end our margins were much thicker with the educational and digital products and so that’s what we did on the back end. So we created a kind of engine where both ended up actually being quite critical.
Chloe: Right, I’m going to come back to that a little bit later because that really dives into our dashboarding and our rigour around the business. I just want to-, because I usually start off by just making sure that everybody understands the business that you were running, so let’s just tick a couple of boxes, so, at the point where you sold it, Science of Skill was based in the US, and selling globally I’m guessing?
Dan: Yes, it was based technically nowhere but I had to list an office and I used where I lived, I think I used Sonoma. Now, I’m right in the middle of San Francisco again working on artificial intelligence which is the reason I sold that company so I could self-fund it, but yes, we were technically based in San Fran but we had you know, a couple of employees, a couple of contractors scattered across the East Coast in terms of our workers, no office, no physical space, and yes, we were selling 93 or 94% of our sales were in the US. Another handful out where you are in the UK, a little bit in Australia, a decent amount in Canada, and then you know, every now and again we had the weird stuff like you know Greece and Brazil, and what-not, but that was really you know, well over 90% in the US.
Chloe: Okay, cool, and we talked about the product, but what platform were you selling on? Were you like on a Shopify, or Magento or something a bit more bespoke?
Dan: We were actually, we got started in the early days, so my martial arts gym which was the business before this, one of the reasons I was actually able to sell that, is because the marketing activity which was what I was kind of responsible for at that gym when I started it, was all automated with Infusionsoft. So, Infusionsoft just kind of an eCommerce/marketing automation platform and I got started with Infusionsoft a long time ago for the martial arts gym, to help me step away from that business, you know, get a down payment and eventually kind of move all the way away from that business and so I was actually on Infusionsoft with this business too.
So, we never went the Shopify route, we were still at the time of the sale running it through Infusion, when we get our sales up to, you know, 400 grand a month, when the new buyers get there, they’re pretty well aware we’re going to have to grow out of an Infusionsoft but the actual software, yes-,
Chloe: So, it’s all using kind of the eCommerce site that sits on the back of the actual Infusionsoft programme?
Dan: Yes, Infusion gives you order forms and up-sell opportunities and a CRM when people purchase stuff and then you can tie that to marketing automation so normally you’ve got a kind of Frankenstein, to couple software together in order to do your processing, have up-sells and do email automation based on all that stuff. Infusion does let you do it all in one. It’s got its pros and its cons but for what we were doing it ended up being a pretty nice way to kind of save on the technical kludge that is often in the back end of people who do the kind of marketing automation, segmentation work that we do so-,
Chloe: Wow, you’re the first person I’ve heard of who’s taken Infusionsoft to quite that level with that type of product.
Dan: Yes, nobody does, it’s normally, you know, pretty much, amateur stuff, but yes, we were kind of pushing the edges of Infusion like I said, if the new buyers get the sales up to 300 or 400 thousand a month just based on transaction volume and what Infusion can do and where it starts to break in terms of email deliverability they’re going to have to move to another platform. But, yes to get to where we got to you know, which was a couple of million top line, it actually did hold together luckily so but-, yes, so that’s where we grew the whole thing up.
Chloe: Cool, and then the team that you’re running, you’ve already said that it was all kind of like virtual location wise, but did you have actual employees or was it all kind of a hybrid of freelancers and virtual assistants and that kind of thing?
Dan: Really good question, so we had two employees at the time of sale, only one of whom was full-time, so we had one full-time employee, $2,000,000 top line revenue, that was very much by design, so the martial arts gym was like, I don’t know, by the time we sold it, it was like a little bit less than a $250,000 a year business and we had like five or six employees or something, you know, it was like crazy.
They were all like young and I was still taking home some bucks and was still able to you know, get a sale and get some dollars down on that sale to help me start the eCommerce thing but you know, I knew if I’m eventually going to get a cash out that’s substantial and if I’m going to be location independent I don’t want an office full of people who have to unlock the door every morning and all that stuff so I built Science of Skill to be the opposite of the martial arts gym which, the gym can get to decent margins when you really start to make the most of every bit of square footage.
It’s not the worst business in the world but I definitely want to build something different, so yes, so by design we had one single full-time employee who worked two to three times more hours than me, a really important guy by the name of Tim, who was like a good buddy of mine and did an excellent job. One part-time employee and then two other contractors and then we had a couple of folks in India help with data entry and graphics and some development but yes it was one full-time employee and then otherwise a fist full of 21 year olds who were still in college who were able to kind of run the operations while I was off here in the Bay area doing my next business.
Chloe: Okay, cool. So just-, because people will be shouting this at their-, whatever they happen to be listening to this on, that one full-time person that you decided that you definitely needed, what did you have them doing? Were they on marketing, were they on managing the teams or, what was kind of like such an important thing you had to have that person bolted into the business?
Dan: Great question, I think that’s pertinent. The most important thing that Tim was doing is Tim was actually handling sales, so before I sold my martial arts gym I had to train the right-hand man who bought it out from me how to do all the sales, completely unplug myself from sales. It’s one of the big things when people sell a business, if you’re the guy that’s responsible for sales, you can’t sell your business so two or two and a half years into the company I started training Tim not just on copywriting but on managing our marketing budget, managing our affiliate calendar, and really becoming responsible for sales.
So, most of our sales, Chloe, we coming from affiliate traffic, so people who would be paid for every sale that they made for us, and also on paid email media, so we would purchase a sponsorship of a large email blast of another publisher. They might be in the outdoor space, maybe the hunting space, the martial arts space, whatever space we’re promoting to and so, I developed kind of processes whereby Tim could lay out the calendar promotions, the estimated spend and return based on historical performance, run that by me. I could give it a thumbs up, and he could go off and do the sales so really marketing and sales was numero uno for Tim.
The team actually took turns managing themselves, so Timothy and Marcus were kind of my top guys. Marcus was only about maybe 25-30 hours a week, but they would actually take turns running the daily meetings and some of the weekly meetings so the team actually was already kind of managing themselves. It was quite a small team so it actually worked fine that way. They were running the vast majority of the meetings, but Tim’s most important job, Chloe, most important, was dial in the estimated return on the dollars and time we’re going to spend to drive sales, and then go hit those numbers, and what I would do is I would double check what the game plan was, double check what the results were, talk with Tim about strategy but then go let him make all the decisions again.
So, by the time we sold you know, he was spending well over $40,000 a month of company money on advertising, entirely by himself without my intervention or anything along those lines, and that was really a requirement in order to convince a buyer to pay 90% down in cash, on a business.
Chloe: Well Dan, there’s about 20 things I want to dive into but I’m going to stick to what I think the audience are going to find most useful so-,
Dan: Yes, let’s do it.
Chloe: Thanks for running us through that because that was just like super super useful to understand where the business was at the point of sale. What I now want to really really focus on is how you got it so big, because what I’m taking from what you’ve said so far is that you’d experimented with one business.
You’d learnt some things you really wanted to stay away from like big payroll, and physical locations, but also a big driving factor in this business was what you wanted to do next, which you alluded to a couple of times the AI business that you’re working on in Silicon Valley, and that there was definitely an end point to this, so I think that’s the really important for our listeners to understand is that you had such clarity with this, such a good reason to hit those numbers, to get that exit, that you know, I think we’d all like to know how you managed to actually turn that into a reality?
Dan: Big time, yes. Do you want to go into kind of I think dashboard and then team management are kind of the big things here? Do you want me to kind of riff on the major points?
Chloe: Yes, let’s riff on the major points and let’s start with team management because you were just touching in on that so if that makes sense to you.
Dan: Right, yes, it completely does. There’s a-, and I know this is for later in your interview, to talk about books, but there’s a book called Scaling Up by Verne Harnish, which is-, was an interesting book for me because it talks about a lot of case studies of companies that have gone public in very large nine-figure businesses. Some of which were in eCommerce or in all kinds of different spaces, and they talk about, one of the sections in there, is about sort of execution and kind of the rhythm of meetings and of check-ins on stats and what-not within a fast growing company and what’s required and we were more than doubling every year.
We should actually be in the Inc. 500 for 2016’s number which is based on growth, I don’t know if the new buyers are going to stay in the Inc. 500 but when I was at the helm, even running my other business at the same time I got there, and, when you’re growing quickly things are weird, because things are changing a lot. You have to be pretty well dialled into your numbers so in terms of team management, the big things that I got away from Scaling Up, and I’d encourage people to read it if they are interested in growing a business either quickly, or quite a large business, which is what the book is about, is quarterly meetings, and the way that they describe quarterly meetings as really determining the kind of the strategic objectives.
Basing those around what your annual sales scores are so, you know, in the January meeting we would take two days and we would determine, not only the projects we wanted to get done within the quarter but the hard numbers we would want to hit within the year and the important thing here Chloe, is we would do this with the whole team. So that the team would all be able to use their kind of mental antennae to say, mmm is that a realistic goal or not? Is that something that we could do or not? Yes, go ahead.
Chloe: So, I’m guessing this is your full-time-, your kind of employees and those key freelancers that you have, and you all headed to one physical location to do this?
Dan: Yes, actually for quarterly meetings Chloe, yes, we actually did, so nobody was ever in the same room, except for in quarterly meetings, but I would fly out from the West Coast and I would you know buy a bunch of pizzas and get everybody together in a room at a hotel and wherever-,
Chloe: It’s always pizza.
Dan: Yes, yes it’s always pizza, so that was one of the fun things about that, actually had, so quarterly meetings are one of my favourite things, I really like the guys I work with and so I was lucky that it was kind of like a party time, we got together. But, yes, annual, we would set our anchored benchmarks, which were really, what do we want to be doing for revenue and for profit and for me Chloe, knowing that I’m eventually going to be out here doing the real startup thing, I knew I was going to need to, if I could, sell for seven figures which is luckily what we did.
So, in order to do that we would need to grow and grow quickly so we’d set aggressive numbers-based goals, you know, what do we want to be doing for top line? What do we want to be doing for profit? How many recurring monthly members does that mean we have to have? Yadda yadda, so that’s annual, it kind of like where are our numbers benchmarks? And, then every quarter we would determine the projects and focus areas that are most likely to drive those numbers.
Now, the biggest, most important thing, and luckily I did this off the bat, and I probably wouldn’t have if I didn’t read the book, is to have the whole team prep the team with homework, have the whole team show up with ideas about what those key focus areas are, then not only do you get more of a sense of ownership because people feel like they contributed but you actually do get better ideas you could come up with yourself. So even my guy who’s working 20 hours a week just doing customer support he’s also seeing a lot of issues with marketing that people are replying to him about because he’s in the inbox, so he’s able to kind of bring up a bunch of projects we wouldn’t have thought of.
So, quarterly and like annual goal setting and full day quarterly meetings or project determination with the whole team is like an exciting brainstorm activity and really essential for growth.
Dan: He is also seeing a lot of issues with marketing that people are replying to him about because he is in the inbox. So he is able to bring up a bunch of projects we haven’t been thought of. So quarterly and, like annual goal setting and full day quarterly meetings or project determination with the whole team is an exciting brainstorm activity and really essential for growth. The other really quick thing I’ll just touch on, and Chloe, you can pepper me with questions. The other quick thing I’ll touch on is: we had daily meetings that were very quick, just, ‘What did you do yesterday?’, ‘What are you working on today?’, and, ‘Are you blocked anywhere? Do you need help or support from anybody else in the team?’
So, we would go through that whole loop with all four or five key members of the team in the mornings. Now, by the time I sold the business I was not there for most of those meetings. I was letting the team run themselves, but in the earlier days, I was there for all those quick daily meetings. Each Monday we would look over our metrics dashboard. So, we would have all the key stats for sales, refunds, merch accounts, customer support, monthly active subscribers, return on advertising spend: all the key drivers of our financial goals, the goals we set in the year. We would look over as a team, top to bottom, for about 40 minutes, talk about the details, talk about what changed, and see what kind of steering and direction we needed to take based on that.
So, our goal-setting and our metrics was once a week, very quick daily touches, but the annual and the quarterly goals really juiced the energy and, kind of, set the frame of projects that we weren’t just doing busy work we were working on, and what we need to do to get from, you know, a hundred grand to a hundred and fifty grand, from a hundred and fifty grand to two hundred grand a month in that recurring revenue that was ultimately so important in getting an exit.
So, those were, kind of, the meeting regimens that eventually became things the team could run themselves and I can’t take credit from that, I took that from a book that a bunch of other very successful companies used well before I ever read about it. That’s the basics. I mean if you want to know about it.
Chloe: That’s what I think. You just did a phenomenal job of explaining that and, I mean, in my case you’re preaching to the converted but I know that a lot of our listeners that are going, ‘Oh, that’s brilliant, that’s brilliant! Yes, I need to be doing this!’
Chloe: I am going to add a book, actually, which may help people with this, which is – and I always get the words wrong in this – it is [easyazon_link identifier=”B00CU9P31K” locale=”UK” tag=”ecommmaste-21″]The 12 Week Year[/easyazon_link]. I got it right that time! – which is by a couple of guys who looked at powerful teams mainly in the sports area, and brought it into the business world, and it is all about the quarterly planning and getting the team together. So, anyone out there listening who wants to get that organised, and I highly recommend you do, then have a read of [easyazon_link identifier=”0986019526″ locale=”UK” tag=”ecommmaste-21″]Scaling Up[/easyazon_link] by Verne Harnish and The 12 Week Year by Moran and Lennington. I am reading at a distance, so if I got that wrong, I’m sorry.
Dan: Squinting at your bookshelf right now, okay.
Chloe: Okay, so Dan I’m going to jump on into dashboards, and the rigor around the numbers now, because you touched on it when you were talking about how you were freeing up Tim to get on with things and giving him the systems to do it, and you touched it when you were saying about those Monday meetings when everybody is looking at the dashboard and those quarterly meetings when you’re setting those goals together, so everyone’s got that ownership. But for you, you know there are a lot of people out there struggle with endless dashboards and twenty sets of reports, losing a week each month to reporting, how did you-, well, actually let’s let you riff, but those are my thoughts, just to set you off.
Dan: Yes, it is. I would say this: Just like everything in a business you’re going to have to kind of build the train while you ride the train. In the case of metrics, I found that metrics very rarely is like a, “Hey, let’s determine what we need to track. Let’s track it and then, man, it will be way easier to run the business.” It doesn’t quite work like that. It’s almost that good, but it’s really not quite that good. What ends up happening is, you think hard as a team, if you do it right, I think. You think hard as a team about what you believe to be the core drivers, what you believe to be the core numbers you need to keep in front of you in order to calibrate your actions to meet your annual goals. So, “What are the numbers that will help us calibrate our actions to meet our numerical goals?” and then you come up with some initial numbers, and you quickly learn a couple of things. You learn which numbers you are so unsure about because your data sources, you realise are really horrible and, like, you need a better rigour about how to get those numbers. You find out which ones are flubby numbers and you need to shore up how you are doing the reporting. You know, “Exactly at midnight we need the system to export this exact thing because if we do it at 12:03 and the recurring billings come through right after midnight”, you know, whatever.
Dan: So, you find out where your flubby numbers are, and you also find out what numbers end up being totally non-actionable, and non-important, and what other numbers you need. So, by taking a good first crack, all you do is give yourself something to iterate off of. The way that we did it, more or less, was, kind of, figure out, “Hey, for growth and for profitabilities,” so two different goals. When you have the goal of selling your business, unless you have strategic buyers, which in our case, unfortunately, really there weren’t any strategic buyers, it was going to be a purely financial buyer who bought our business.
Chloe: Could you just explain for the audience what a strategic buyer is?
Dan: Oh, yes, sure. Sorry about that. A strategic buyer would be someone who purchases your company for some sort of tactical end in their own business. So, for example, let’s say I am a software company that helps, like, big large enterprises’ managed databases or something like that. Hypothetically, I might go out and buy a 20-person company that does internal file sharing for big businesses, some other enterprise functionality. I might want to just buy that to tack it on to my offering because I think it will give me an edge in sales because I think it’ll help improve retention. Whereas you notice I wasn’t just talking about, “I’ll be able to sell it to make more money”, I am talking about enhancing some other facet of my business.
So, I am not just buying it based on its revenue, I am buying it based on how it will be able to enhance my existing business. Now, normally when you have strategic buyers, you’ll actually be able to get, you know, a pretty sizable exit. A lot of the time they’re going to be paying more than they would purely for your multiple of profits. In our case, and, honestly, for most businesses, there were no strategic buyers, which I, unfortunately, learned a year and a half in the business. It is what it is. I would have liked to double the size of the exit, but I can’t turn back the clock now. So, because I realized there was going to be a financial buyer, we needed to have firm, consistent profitability in addition to growth, which often don’t go together because it costs money to make money, and when you grow, when you 2x your business, 2.5-3x your business every year, often, you know, your margins get thinner and thinner, because you don’t put that money into acquisition which we were.
But we needed also to hit profit as well, you know, 20-25% to the bottom line with a winning team is really what I was shooting for, and so we had those as goals as well. So, “Hey, growth and profit”, what are half a dozen things that are going to be critical to make sure that we can ensure both of those? What are those damn numbers? Brainstorm as a whole team, come together with those numbers, put them out on a table, start with those, and then every week look at them and figure out, kind of, over time, take notes as we were doing in the meetings. “Hey, which of these numbers is kind of flubbery?” Which of these numbers needs a lot more context with more numbers? And which of these numbers are useless and we should either leave it to the Customer Service guy to look at it by himself or just not even include it altogether, because nobody cares? So, it was kind of an iterative process if you will.
Chloe: So, we are talking that those six-ish numbers which are going to help you hit the profit and growth. We are talking about things like email list growth and the number of affiliates who you’ve got on board, would it be that sort of thing?
Dan: Yes. I’ll give you some examples. So, we’ll paint a picture of these. We’d look at revenue that week broken out by kind of product category. How much came from up-sales, how much came from front-end sales, how much came from back-end recurring billing, you know? Where are our ratios and what was our total number of revenue there? What were the refunds and how were its ratios broken out across those three categories I told you? What was the acquisition to the email list in terms of list growth or shrinkage, and then what was the engagement of the email list itself as well, so, what was the churn, certainly but what were the open rates and clickthrough rates aggregately across the week?
We were able to go into our email systems and get more granular, but high level every week. What was our average open and average click? Just letting us know, kind of globally how well we are doing. How many monthly subscribers we have, how many people are on recurring billing right now, “Hey, buddy, into this month we’ve got to get to, you know, 2,500 people paying us $50 a month”, you know. We’ve got another 200 to go. We see that in front of our face every single week and we know what sort of actions we need to take. So those are some examples of what ended up being actually just a Google spreadsheet because the APIs for Infusionsoft were not very well developed which just ended up being a Google spreadsheet of stats on the weekly.
Chloe: Okay. Cool. I think it, kind of, for me, the key takeaway there that you are making sure you are trying to condense those numbers, and that you understand that the numbers you come up with in year 1 would not probably the numbers you going to be focusing on by year 4.
Dan: You are totally right.
Chloe: Again, I could dive into so many things but we’ve already reached the 30-minute mark. So, I am going to take us into the top tips because I think we’ve given the listeners enough to keep their heads spinning already anyway.
So, it’s time for the top tips round.
Okay, I love this section because it gives me and our listeners some really quick ideas of taking our businesses to the next level. Now Dan first up is the book top tip. If everyone listening to the podcast agreed to take Friday off and read a book to make their business better, which book would you recommend?
Dan: Oh, man. I already mentioned Scaling Up. I am such a fanboy of the book. I mean I am not literally a fanboy, I am exaggerating, but I’ve never read a business book that was so helpful for organising teams. So, I’d say [easyazon_link identifier=”0986019526″ locale=”UK” tag=”ecommmaste-21″]Scaling Up[/easyazon_link] by Verne Harnish.
Chloe: Excellent! I like your consistency there. I mentioned it earlier but it is still my number one tip. How big a recommendation can you get, guys?
The traffic top tip: Which marketing do you either prize above all others or think doesn’t get the press it deserves?
Dan: Man, for us it was just sponsored emails. So, who already sends a newsletter in front of 200,000 or more of the people you sell to, and how much money are you willing to pay them to drive clicks to your site based on your conversion rate if you’re in e-commerce? So, not that many people, even in our space, were using that as, kind of, a core driver of their company but that ended up being what we did and I would say it’s a tool worth exploring in the marketing repertoire.
Chloe: Excellent! That’s going to get a lot of people thinking. A long list that I know would be going, “Ooh!”
Dan: Yes. That was our whole business right there, so-,
Chloe: Okay, now a tool top tip. That may be a collaboration tool, a social media plugin, a phone app or a way of working. Is there a core little tool you used to keep your team active day-to-day?
Dan: Yes. Asana. I’ve always really liked Asana a lot and it’s important for all of our weekly goals. It was important for holding our quarterly goals in front of us, and also tying up who the accountable person was toward those quarterly and weekly goals. So, Asana was the ultimate collaboration tool for us with Science of Skill.
Chloe: I am a big Asana fan. I think we are similar.
Chloe: [laughs] Again, the startup top tip, then. If you met someone this weekend who is thinking of starting an e-commerce business, what would be your first tip for them?
Dan: Man. I mean there’s all kind of psychological assessment stuff, like, how bad do you really want it, do you have to do this? It is much easier to have a job, you know? If you have to start an online business, in your heart and soul, like you really want to be an entrepreneur, then, by all means, do it. If you are really on the fence, then generally I think it’s too much of a sign that you shouldn’t. That will be the first thing and the second thing will be understanding first and foremost how big is your addressable market. In other words, how many people probably would buy the kinds of things you’re probably going to sell?
Make sure that that’s at least enough people to put your kids through college. A lot of people pick a niche or a sub-interest and is really cool to them, myself included by the way. I did this in my early days. It’s really cool to them but ultimately, it’s not going to be able to make you, you know, the kind of monthly revenue you need. So, look into your overall addressable market before you start building websites, buying domains, etc.
Chloe: Excellent advice!
Now, Dan, before we say goodbye, would you like to let listeners know where they can find you and your business? You can pick which business, on the web and social media.
Dan: Yes, sure. If people want to, I actually still do some writing about, kind of, marketing automation and marketing in general, a lot of the dashboard stuff and email stuff, email marketing. That really was the main driver to get us to multiple millions in revenue.
I still do writing about that stuff on a website called clvboost.com. That’s CLV like Customer Lifetime Value. CLVboost. That’s kind of like a blog/video article site where I, kind of, write articles about what I’ve learned, about the lessons we’ve gone through as we’ve grown in the scale of the company, etc. So CLVboost is one place, you can find me
Twitter which is just @danfaggella and I think maybe, Chloe,
for the people that are interested in eventually selling their business, I just recently did a longer blog post on what the sale process was like and what we had to go through so people are going to that. The website for the AI business would be emerj.com/exit and that’s kind of like the story of the sale for people who want to know what it really looks like to get somebody to pay a million bucks for your company. So, that would be it for me.
Chloe: Cool, and then those who are very intrigued by the AI business, which we have not talked about at all, they can find it at emerj.com as well?
Dan: Yes, emerj.com. Exactly.
Chloe: Cool. Well, I am going to add links to all of that and everything else we talked about today in the show notes. I apologise to all of you at MasterplanWorld who are now about to lose the rest of your day reading Dan’s blogs and watching his videos.
Chloe: Because I know several of you will be messaging me later to complain about your lack of productivity.
Dan, thank you so much for being on the podcast today! You have shared so much with us that I know the audience are going to find it unbelievably useful. So we really do appreciate it, thank you.
Dan: Chloe, hey, thank you!
Chloe: Well guys, my head is spinning. I think Dan was just incredibly generous there with his bits and pieces, so I think what I may just do is turn this one into a transcript so you can go and grab it from the blog post.
and Dan has promised, if there are any questions, he will answer them.
So go and put any questions you’ve got in the Facebook group
and I think, kind of, for me the key takeaways there are the clarity of the vision that he had, that goal: I want to get it so I can sell it for seven figures to really give that clarity of then, “Right. How are we going to do this, keeping it lean and finding that really lean way of managing”, his team?
So, those regular meeting may sound like an awful lot of hard work but I’ve done it in the past when I’ve had larger teams and it makes things move so quickly and so much more easily having that rigour of the daily meetings. The regular catch-ups, those Monday meetings where you focus in on, “Right. Where are the numbers? Are we doing what we need to be doing?” Having those quarterly meetings where you all get together, face-to-face. Do have a bit of chillout time but also communally decide on what the key projects are to hit the numbers over the coming time period. Phenomenal input there really. Also, take away the fact that you only need maybe 6 key numbers to be watching to keep yourselves on track, but also that it may take you a little of trial and error to get those numbers accurate.
Not ‘flubbery’ I think he said, that a brilliant word, but also that it may take you a little while to identify exactly what those numbers are and that they might change over time as methods come in and out, plus there was that great idea of identifying not just websites you could advertise on, but also those key email newsletters you could buy yourself some space in. Definitely one to be tested. Well, I think that’s all from me today.
Oh, apart from to say, the reason we’ve got Daniel on the show today was because he is a listener. He listened to this podcast and contacted me about his story. Now, if you think you’ve got something to offer to the rest of the listenership, to the rest of the eCommerce Masterplan World, and you think you’ll be a great guest, please, do get in contact. You can find all the ways to do that on the website, but anyway, let’s all have a great week and let’s all keep optimising.