Investing, Building & Scaling (The Flip Side)

You really want to find ways to get in front of people that already like the medium and what I mean by that is people will spend a ton of money on ads that are not some of the platforms I mentioned or they'll spend money advertising and newsletters. The thing is what you don't want to do is you don't want to have to convince somebody to like podcasts and then to like yours. You just want to get people that already like podcasts to just learn about yours. What's up? How's it going? How are you? I'm amazing. I'm amazing. I'm a few minutes late. I'm very sorry. It's totally fine. We have to talk to you best. I'm in Fort Lauderdale in Miami in Florida right now. But I'm originally from Toronto. We just moved down here about a year and a half ago. That's on the move. It's a big move. It's the weather's beautiful. Taxes are great. You know, so everything's working out so far. What would you want to make that from Toronto's Canada, right? Toronto's Canada, yeah, exactly. So we moved down just at the tail end of COVID when things were still actually locked down here in Canada. Everything else was a little bit more opened up in the rest of the world. We were locked down for a while. So at the tail end of it, we were already planning on moving down to the U.S. like pre-COVID. But obviously we couldn't drink COVID. And then after COVID, when I was sort of finishing up, we just made the decision to move down. And it's funny because pre-COVID, we were thinking like New York or LA. And then as COVID progressed, we're like maybe not New York because it's cold and kind of the same as Toronto. Anyway, it's just another expensive big city. And LA, we weren't too comfortable with either. So we tried Florida. We tried Miami. So not bad. Interesting. Did you guys live in Miami for a few months to test it out? It was just like a direct move. No, no, we didn't. We did not. Which would have been the smart thing to do. But you couldn't though. You really couldn't because you can't go back easily, right? It's very hard to go back and forth. And by the way, I really do appreciate you being so patient and with me re-booking this like four times. I really, really appreciate that a lot. It's very kind of you. And I know that it's very frustrating. And candidly, there is no excuse except life has been just exceptionally busy. I really have been, I think I initially found you on LinkedIn and that I've been listening to your podcast. So I really appreciate you. It's my pleasure to do this. Thank you, Scott. No, it's my pleasure. And I know that we booked it for an hour. If you need extra time, if you have two, then be my guest. It's 6.20 now, Easter. And so there's not much else happening in my day. This is pretty much it. Perfect. That's like, is your main focus the podcast at the moment? Or on the patch? Because I noticed that you have a brand house at times that up between those companies and other other things you're working on? Yeah, certainly. So my time is sort of split up into three things. So I have, we have the company on me. So I'm CEO and co-founder of that. And that takes up a significant amount of my time, which is a startup. So it should take up a significant amount of time. If it's not, then you're probably not doing it right. The podcast, when I first started it, about almost about three and a half, five years ago, I did a lot of the stuff myself, but now it's monetized. So it makes money. So basically, how structured it is every dollar that comes into the podcast, I put that into a team that takes care of the editing and the posting and like all the derivative content from the podcast. So it's very much, I act as the talent. And now I have a marketing team that takes care of that that's only responsible for the podcast and all sort of social media presence. So that includes like newsletter, podcast, social. I still post as much as I can myself, but ultimately I like turn into like a little bit of a machine. So it's not as time consuming because it can be super time consuming. And then outside of on me, which is a startup that I grew from basically zero to where we're at right now, like about a year and a half, almost two years later. Now I'm also focused on doing some angel investing, working with some other startups, building out a little bit of an investment portfolio. I'm helping two other close friends build at a private equity firm because that's where I see me investing a lot of my capital and my own money in the future. And it's something that I also really enjoy, let's me work with a whole bunch of different types of businesses. So majority of my time now is focused as a startup CEO as this company grows and eventually is acquired or exits or wherever we take this company, I will move full time into working in some sort of investor and mentor capacity with startups because that's what I love to do. I've sort of dabbled in that through the years, not formally. So I'm setting myself up to give myself a vehicle through a private equity firm and we'll do some VC investments as well. And I can sort of break down what that is and what the differences if that's of interest for this show, but that's where I can do that for the rest of my life, right? Because if you are an investor and you do find good deals and you can help entrepreneurs scale, well, there's people with money, myself and people exceptionally more rich than I am who want people who can find those deals and help them. And that's really where I see most, the future of most operators is to go into capital allocation because they have an eye for good businesses and I for good deals and once they find those deals and they can help those companies grow and scale and then you know, you're not working in the business every day, you're working in more of a mentorship advisory capacity, but you can sell my good money doing it, of course. And that's where I see me slowly progressing and transitioning into. So that's and I would say that takes up, you know, to break it down, probably 80% of the time that I spend is on the startup, on on repatch, another 10% on the podcast, 10% on investing and building a firm that can help me do that in the future. Is it similar to the Alex Mosey Acquisition.com model that you eventually want to come down a little bit different to that? Very similar, very, very similar to that. So the Alex Mosey Acquisition.com model from what I understand from the outside looking in is I don't know what his split is with people's money outside of his own. So a private equity firm, the traditional model, how it's how it's set up is yes, you have a private equity firm or fund, you raise money from other individuals, you also put a little bit of your own money in, you find good deals, a certain metrics you look for, you do your due diligence and then you buy the business and then you help scale it and then there's an exit event. I think the Hormosi model is similar to that in the sense that he's finding businesses, he's investing money. I don't think he's owning the business. I'm pretty sure he's letting the founder retain some equity, which is just an investment thesis decision and there's a certain type of business. So he's very, very specific. So he, I think he's e-commerce, non-mistaking, over a certain revenue threshold and he's making promises like if we invest in you at a certain revenue threshold, then we promise to scale your business to X percentage or by this amount of revenue and then I guess there's going to be some exit event and that's sort of like the infrastructure that he's set up. So he's like, but that's Alex Hormosi, that's always the way he's operated. So when he was doing gym launch, and again, this is secondhand information. So like if I misquote, I'm not Alex Hormosi, but when he was doing gym launch, he hyper-focused on gym owners and he knew how to help gym owners fill a funnel. So he didn't do other types of customer avatars. His customer avatar was a gym that had trouble getting clients to subscribe to their monthly subscription. So he found a perfect way to run ads and run a whole bunch of different things to help fill a gym. So I think that he's doing a very similar strategy where he's hyper-focused on one particular type of business and he's going all in on that and he's saying if I buy a business with this kind of operator and these kinds of metrics and this kind of category with this kind of system in place, I know for a fact I have the playbook to take it from 1 million to 10 million and he's doing that instead of ads like he's doing with gym launch, he's doing it with capital. So it's like a very defined private private equity called VC called investor play because even though sometimes those two worlds seem to intersect, but yeah, it's a very defined investor strategy. So private equity is similar to that, but also slightly different, right? So a traditional private equity firm, you're not just using your own money, you're using LP or limited partners money, and your investment thesis doesn't have to be, I only take econ companies from 1 million to 10 million. It can be that, but sometimes with private equity you can have diversified thesis, you can go in different asset classes, different alternative investments or alternative investments, excuse me. So it doesn't have to be so strict and defined, but it doesn't hurt if it is because if you know what you can do again and again and again and again and you're always successful doing that thing, it's great too. It's a really smart strategy to do, but yeah, I think it's similar but different from my understanding, but I don't think he's ever publicly even like gone into the interworkings of acquisition.com. So I'm just sort of reading it through his little podcasts and you know, random little bits of information I find on the internet, but that's what it seems like it is. It's pretty good. You've been able to put all that information together just from putting the puzzle cases together. Because I see the other side of it. So I mean, there's only so many ways to structure a thesis. There's only so many ways to invest in companies. There's only so many things that you can do to be successful from an investor perspective. So I see threads of him succeeding in gym launch and the way that he was so hyper specific and I see that thread sort of between gym launch and what he's doing now with acquisition, but in the future of course, and maybe even now he's like expanding into different categories or different types of businesses invest in. But I mean, there's nothing to be said for the strategy. If you are exceptionally good at doing the one thing, then why not do it again and again and again? Makes little sense. With your private equity bottle, are you sort of buying the business as a whole? We're just sort of purchasing whole businesses at once. Right now we are. Yeah, right now we are. So we are now when you talk about private equity, there's even versions of private equity. So the private equity of the the 80s and the 90s was leveraged byouts, meaning that you're usually buying the whole business, but you're putting in a little bit of your capital and a little bit of your LPs capital, but then you're using the bank to finance 90% of the business or 80% of the business. So right now we're not doing that. We're not doing that. So our private equity model is we're a beginner private equity firm. So we're not going to be competing yet with the KKRs and the black rocks of the world. Eventually we will, but not yet. But we buy a business 100% of that business with cash from ourselves and from our LPs. So we own 100% of it. And if we choose to and we find that the founder or the operator that was in place is exceptional, we can we can keep them on the cap table. So we can keep them as equity owners in the business as well, but that's on a case by case, depending on how great the operator is. And sometimes the founder operator, the person running the business, doesn't even want to stay in it, which means that we have to buy 100% of it and we buy the founder out. And then we put in an operator who's going to absolutely crush it. And that's the play. But yes, we do go for 100% of the business. Interesting. So let's say you buy 10 different companies, all the templates of founders go off and then sort of take the exit and they go, how do you go ahead and manage 10 completely different companies and find 10 operators? Like usually the founder knows that this is inside the house, really hard to put in an operator to sort of match that founder. You're correct. So what you're describing is what's called a key man problem and or key person problem. The technical term I'm pretty sure is key man problem. But the point is it's when the business is too reliant on the individual who founded it. So what we look for, yes, you're right. 10 different businesses in 10 different verticals where, especially if I don't have experience in it, would be exceptionally hard to manage. So how the model works and how our model is set up. And if you go, you can look it up, we're called Celesteel. I'll plug the name and you can go see what we're doing. There's a lot of good stuff we're doing for a variety of reasons. But the model is we have a portfolio manager or partner that is experienced in one particular type of business. So that portfolio manager could have been somebody who's been working in SaaS or ECOM or agency for the past 30 years. And that person is really good at that type of business. So what we're going to do is we're going to make sure that we focus on acquiring businesses in the types of industries that we're proficient in. We're not going to go after a business in an industry we've never touched because we probably don't know what that well. And I think operational expertise is really, really important. So right now we're focusing on ECOM and agencies. Those are the two things that we have in-house as operational experience. And that's how we're going to make sure kind of like the Hermosi model. We're going to make sure that we are somewhat successful, right? So yeah, so we focus on things that we're good at. And then you're like, well, how do you, how do you find operators? I mean, we have a constant pipeline for incredible operators open. We align the interests of the operator with the success of the business by giving them equity positions in the business as well. And to your last point, the founder is going to be so integral to the success. Yes and no. In most cases, yes, which is why finding the right deal and the right business is exceptionally important. But what you are looking for is a business that does not have that key man problem. Where if you remove the founder, one on vacation for three months, the business wouldn't be affected. How does that take place? Well, they have built systems. They have built processes that allow them to take that break. And if you want to read a book on this, it's called built to sell. That's like the text book for building a business that is acquirable. And this is something that a founder has to take into consideration from day one. Are you building with an exit in mind? What is the plan? Are you building a lifestyle business or are you building a business that eventually you want to sell? If you're going to sell it, you cannot be a blocker. You cannot be the thing keeping the business together. You cannot be the only person that's responsible for sales, marketing, ops, finance, HR with 200 outsource people on upward. That's not going to ever work. So you got to find a way to build systems and processes. So if you do take breaks from the business and true breaks that the business keeps making money, the pipeline keeps staying full. Everything is executed properly. And we look for businesses that implement those. Now, not every founder is great at implementing those, but there are some that are great. Actually, funny enough, the founders that we founded are great at implementing systems are the ones that come from management consulting backgrounds who have broken off from a PWC or Deloitte or a KPMG and then they build the business because they get the systems and the processes versus, you know, the Stanford grad. It's just like scrappy buildings only together, even though that's not a great example of entrepreneurship. That's the other kind of entrepreneur. But ultimately, anybody can build a business that's sellable, but it's something that you should look for as an investor for sure, especially if you're requiring 100% of it. And it's also only you should consider as a founder because you do want your business to be able to be sold. Like it's funny. We were speaking with an agency just a few days ago and the founder was so aware this was a thing that people looked for. He led the call by saying, just so you know, I went on vacation for three months, you know, last year, back half of last year and numbers were there, metrics were there, everything worked. And he led with that because he knew that that was so important for somebody taking over now. You'll never have the passion that a founder has, but there are things that you do know that the founder doesn't know. So there are tools, tactics, strategies that if there are citizens and processes in place that allow the business to maintain a status quo without the founder, I can put in an operator that knows different things or more things in the founder new and scale that business. So that's that's sort of the strategy. So it does have to do with can you find the right business that has these systems and processes built in. And technically, that would be the argument for why do you pay a private equity for any percentage of the money that you're putting in? It's because they have the expertise and they spend the time doing this because if every business could just operate without a founder, then all you have to do is find a founder that's willing to sell and you give them a good offer. Then all of a sudden, you want 100% of a business that runs autonomously and it's hard to find those because to your point, the first thing you brought up is how does the business function without a founder? It's not easy. It's really not easy. So that's something that a founder should think about if they're sort of scrambling and they feel like they're wearing every single hat, that's not necessarily a good thing because that's not a very sellable business. It can be an investible business, even though you can make an argument against that. But it can be an investible business if you have a good business that's growing and there's all the metrics are there and the growth targets are being hit and you can raise money and you can dilute yourself. That's okay. But if somebody was ever going to buy your business completely and get rid of you, if you want to be getting rid of, not if you don't want to get rid of, but if you want to be out and you don't want to work anymore, then that's something you really have to consider. So that's what we look for. Interesting. How do you go ahead and search for these businesses that have been set up in a way where the founder can go ahead and leave for three months and it'll be okay and the founder also is willing to sell even that the city wants to go and make that just turns out money. So a lot of relationship building candidly. I mean, you can look at the marketplaces. So the marketplaces, like for small businesses, biz by cell, flippa, like all these different types of business sales marketplaces. If you go through a hundred deals there, you'll probably find one that fits that criteria. You just have to put in the time to source them. I mean, you can find Chrome plugins that do several hundred thousand dollars a year. You can find SaaS businesses that without updates could run relatively autonomously to the tune of several million dollars per year. You can go on micro acquire. These are for very small acquisitions or you build a brand and you become known as somebody who buys businesses and raises money for businesses and then deal flow comes. And we can talk about why you'd want to build a brand for that. I mean, it's pretty, pretty obvious. If you can put yourself out there enough, people know you as somebody who buys businesses, you're going to get great deal flow. And then lastly, network. So you speak to brokers, you speak to people that have done this for a lot longer. You speak to, if you're trying to do anything, it's the people that you know that are going to make it happen. So if I'm trying to find businesses, I'll reach out to other people that are in private equity, that are in family offices, high net worth individuals that get deal flow that have been doing this for 30 years. And they're going to have deals that come to them. Multiple deals that doesn't fit like their specific thesis. So if I could work with another private equity firm, I could work with a VC firm that acts as a feeder into a private equity environment. So there's just it's snowing people. It's doing it's doing the the networking and the homework. And eventually you get you get deals in front of you where for whatever reason, the founder doesn't want to maintain the business. They have built systems so they can sell it. And candidly, you know, it's some of these businesses are are accidental mistakes. So sometimes you have a founder who started a side hustle that actually did quite well. And they don't have the capacity to maintain it. Or they need capital for whatever reason to start another project. The agency that we're just looking at buying the example I just referenced, he was looking for a large sum of money to start like a pretty significant SaaS company. So he didn't want to go raise money from VCs. He wanted to sell the agencies like listen, we're doing good. It could be better, but we're doing good. Systems are in place. I can manage it. I can sell it. I can make some money. Then I can go start my SaaS company, be 100% equity owner. So there's like a million in one circumstances as to why somebody would want to cash out. But I mean, the more feelers you have out there and the more people, you know, like anything in life, it just makes it easier, right? The whole network is your network and all the other, you know, motivational quotes around meeting more people and making the right connections. I was talking about that. How has the podcast of aided in that? Because the main reason I sort of did my podcast is just to meet amazing people and it's a great excuse. It puts my foot in the door and I imagine maybe you've done it for the same reason, but tell me about the podcast and how that's aided the private equity. So the podcast has aided everything I've done because I've never actually made it about one thing, which is very different than why a lot of people start podcast. You started the podcast, you started your podcast, the exact same reason why I started my podcast. I just wanted to meet cool people. I knew some cool people. I'm like, okay, I need a content strategy. I want to meet more cool people. This all makes sense. Podcasts is the way to do it. If I'm going to talk about really complex meaningful topics, I know that I don't want to be doing, you know, 30-second TikToks. Maybe that can be one portion of my content bucket, but ultimately I did want to build the personal brand. That was for sure in my mind because I saw what Gary Vee was doing with his personal brand and launching VaynerMedia, Empathy Wines, VaynerSports literally could launch anything anytime you want it. He has millions of eyeballs. I don't know what I want to do with the brand, but I know I want to get there. So if I launch something, then I can eventually just have this community of people that will immediately look at it and I can get some feedback from that. I can launch products against that community. So we're going to build a brand and podcast made sense because it was the easiest way to create content at scale. I don't know what your content strategy is, but mine is very simple. Podcasts, Longform, Pillar goes into a billion derivative pieces of content and they go everywhere. So this is like the podcast, the playbook or the longform content playbook and I think there's also Gary Vee's strategy and probably been echoed by many others. So the podcast was a means to an end to build a brand and I kept it open because I wanted to create something that I would consume. So I like learning from people like Tim Ferris and Tom Billio and other people that just have really smart conversations and I figured I can create something like that for myself. And once you build that critical mass of people, then when you're working on something that you're passionate about, you just leverage the audience to expedite that. So for on me, when I'm looking for, I have a relatively good-sized LinkedIn following. I'm looking for buyers to bring our product into retailers. I can reach out to literally anyone in the world at this point because I'm probably a secondary connection if not a first-degree connection and make an introduction, get a conversation started. So I mean, the podcast helped me build a LinkedIn audience and helped me get connections for a business that I'm actively running. I get so much deal flow, it's actually ridiculous, but I mean like every day I have people like, hey, take a look, I pitch deck, pitch deck, pitch deck, even before I was trying to build something that was an investment vehicle. Like people were always reaching out. So I mean, when you surround, when you position yourself as an authority in business and entrepreneurship and then all of a sudden you add the layer of, I'm actively investing in companies and then you put that out against your audience, which is your podcast, your newsletter, your social, like every the effects are just compounded because instead of just speaking into nothingness, you're speaking into an audience of 50,000, 500,000, a million plus, right? Like people see that at scale and if the audience is dialed in, which is a business audience, then a portion of that, not every one of course, because I didn't start a private equity podcast. So not a hundred percent of the people listening are like care about private equity, but a percentage of them do. So immediately I have some activity. So like, why did I build it? I built it for this reason in particular. So whatever I'm, you know, whatever that thing is in my life that I'm trying to accomplish, I have that audience to go into right away. And then also it doubles as like what you just said, you get to talk to really cool people like all the time, which is a side effect. And then you build really great relationships. I have like, I have lifelong friends that I've built after a 60 minute conversation with them over Zoom. And then it just turns out they're really great people. And then you know, we meet in when we're in the same city the next time and all of a sudden you have a good friend who's also just very cool because of whatever they've accomplished in their life. So multiple reasons why the podcast happened multiple reasons why it will probably do it to the day I died. It'd be quite honest. I love it. And it's been, you know, you build a brand. I echo the slot. It's truly life changing and anybody can do it. It doesn't have to be generalized like, you know, like us. Like we're not saying this is like a VP marketing and CPG podcast. So it's not like a venture capital in AI podcast or even a private equity podcast. But you can also do that. And then the effects are going to be even more rapid if you align your podcast and your personal brand with explicitly with the thing that you're doing. So it depends on what you want to accomplish. But I mean, even just doing this, it will still have some like net positive, right? So interesting. How did you go about getting a podcast so quite well was like break even because I've noticed over the last two years I've been doing this. It's been like a very slow growth. You released each episode. I might get like a hundred listeners. You release on YouTube. That's like another hundred. You pump out maybe three clips a day on TikTok. And that's like 200 tons. They might get like 600 views a day on TikTok. One in every 50 clips might go viral and you might get 100k views there. But like it's, yeah, it's like this hot long grind. Is that something you've experienced? So yes, I think that it was probably about probably about two years in when I started seeing momentum. It wasn't as it doesn't seem as strenuous as what you what you're describing. I mean, I was hitting. So after about two, after about two years, I was at about a hundred thousand downloads a month. Wow. Yeah. So that was a combination of, and I don't, I'd have to review like the content strategy, but similar to what you're doing. So a significant amount of social. So every podcast goes into video clips. I would say it's about three clips, two to three clips across all platforms every single day. Building up a pretty large email list is well helped quite a bit. So I have about a hundred thousand on my newsletter and every podcast goes out against my newsletter. So I'm always cross pollinating as well. Every show goes into multiple stories on Instagram, goes into shorts, reels, was using Snapchat Spotlight as well. So it's just it's a nonstop onslaught of content. And then I think the second thing outside of just massive content market, when I say content marketing, it was like across all social, I would say about 20 clips a day. It was just a ton. And then that podcast gets transcribed. And then I push it across a newsletter. So I transcribe it and turn it into an actual article, not just a transcription, but like an article speaking through in human version, not just transcription, the things that we spoke about in the podcast, that would go newsletter, that would go to hack or noon, that would go to medium, that would go to my website. And I'm trying to think what else. And then of course, every podcast also, every single question you asked, as it's being edited, every question is timestamp and then broken up into a separate clip. And those are all uploaded onto a playlist on YouTube. Not only do I have the full podcasts on YouTube, I have probably 20 different clips in a playlist each with their own title. That's for YouTube SEO. And then like outside of that map, that's a lot for content marketing. And obviously it helps when you scale out. And I think that's where you can use tools like Upwork to find really good people to help you out with some of the admin and the posting and like the whole workflow. But then a lot of guessing on other podcasts helps. That's for sure. So guessing on podcasts, it is rather time consuming, but I think that's a useful way to tap in other audiences. Another strategy that's worked very well. I do, I run paid ads against the podcast as well. So I run paid ads on cast box right now. And there's another service called MO pods that I've run paid ads with. So those are the two sort of brokers that help me run paid ads. I've never really tried to run like Facebook or Google ads mostly because you're not going to get great conversions. But if you use some of those services, you can run paid ads to some effect. And there's other ones as well that run paid. I think player FM runs paid ads. And there's a few others that I'm not really that big on. But those ones that I just mentioned are quite good. What else? So that's running paid. And then lastly, I do show swaths of people as well. So what that means is I, you can do a few things. I mean, you can like basically share a host red ad in your show with another podcast that's similar size. So you can say, Hey, I'm going to record a 15 30 second clip from my show. And then you're going to record one for your show. And then like, no charge. Of course, we're just going to swap it. So we're, you know, tapping into existing audiences. Or what I actually like a little bit better because it's even less time consuming than doing a mid role is literally taking a full show from another podcast and putting it in my RSS feed and doing, and then taking my one of my best shows and putting in their RSS feed. And I literally just say at the meeting like, Hey, welcome to success story with Scott Clary. Today, you're going to hear a clip from so and so podcast. And he's going to be discussing this or he's going to be interviewing this person. If you like this podcast, make sure to go to www.so-and-so's-podcast.com subscribe for more of this super simple tons of value to the, of course, you have to vet the content that you're getting and putting in your own RSS feed and standing by, but tons of value to your audience. You're exposing them to a new audience as well. And then vice versa. And the best thing I can tell people out of all these things that are the content marketing, out of the paid, out of the podcast swaps, you really want to find ways to get in front of people that already like the medium. And what I mean by that is people will spend a ton of money on ads that are not some of the platforms I mentioned or they'll spend money advertising and newsletters. The thing is, what you don't want to do is you don't want to have to convince somebody to like podcasts and then to like yours. You just want to get people that already like podcasts to just learn about yours. Because that's where you're going to have a much cheaper conversion on that, on that particular activity, right? So if you're going to try and win anybody over on anything, and I do the same thing for newsletters, if I'm advertising, if I'm trying to give people onto my newsletter list, I'm going to advertise in the newsletters. I'm not going to advertise in a podcast for my newsletter because obviously newsletter readers could hang out in podcasts or they may not. I have no idea, but I do know that newsletter readers definitely hang out in other newsletter lists. So I mean, that's like sort of my mindset regarding marketing, but that's that's pretty much what I did for about three and a half years, non-stop. And still do, by the way, there's not much else to it. Even like today, there's not much net new. Interesting. I don't know all those things. What do you think sort of help you get to the 100K mark? Which one had the biggest impact? Well, I would say that paid always will have the biggest impact. I mean, like that's like if you if you have capital to put up for anything that's silly, but I don't want to say that paid is exclusively what gets you there because then people listening to this are going to be like, well, I have no chance if I don't have that budget. So that's not necessarily true. I just think that maybe you're delayed by six months or a year, which is in the grand scheme of things. If you're doing this, it's not meant to be like a quick overnight thing. Anyways, so if you actually just took out any of the paid that I put towards it, then you would still have a massive content marketing play. And also for anybody thinking, well, that's a lot of work. Yeah, no shit. It is a lot of work, but I learned how to do it all myself. Day one, meaning I did everything from coding my own website to my own audio, video editing to my own social clips to my own newsletter, right? Like all of that was me. Day one. And then once you're great at it and or at least you have like a certain level of proficiency, then you can hire people to fill in some gaps. But yes, day one, it is a lot of work. And and podcasting is a lot of work because there is no organic reach when you start. But if you think about the one asset that would build the biggest amount of trust with the audience, it's being literally in their ear for like 30 to 60 minutes. There is no other YouTube is a thing that comes closest. But even then a podcast saw, and this is actually why you can demand such high CPM rates or or cost per mill rate with advertisers. It's because the audience is so exceptionally loyal. You want to you want to look at a case study Google advertising on Tim Ferriss's podcast. Someone wrote a case study of spending, I think about $50,000 on advertising with Tim Ferriss's podcast and whatever the widget, why can't remember what it was. It was like sold out because a loyal podcast audience is tough to build. But once you build them, they feel like they are the host's best friend because they were in that host. The host was in their ear, excuse me, 30, 60 minutes a day, multiple times a week sometimes for years. So there's a huge amount of affinity that's built with that audience. And that's why it's tough to build. But it's not a it's not a short game. And in my opinion, it's one of the best ways to build trust with an audience over the over a period of time on any on any channel. That's amazing. Tell me a bit about opening patch. So you've been working on that. How long have you been working on that brand? So that's just so about a year and a half. So I was brought in as a co founder CEO. So I basically met a founder who had an incredible vision and had no no like basically had some operational experience and they had some money too, but they didn't have as much operational experience. So it was a great partnership. And they're more the product and and I guess the product and evangelical side of the business, whereas I'm more of like the sales and marketing and operations and raising money and hiring and scaling. So raise a two and a half million seed round. Very traditional CPG play day one. We're we're going direct to consumer across Shopify Amazon Walmart.com like all the all the things, you know, between paid ads looking for positive row ads, navigating Facebook and iOS updates, figuring out TikTok, Pinterest, basically every page channel and finding ways to, you know, reduce CAC, increase LTV, increase AOV, roll out subscriptions. That's all the stuff we've done. And actually I should give you a little brief discussion of the product before I get too much into what I've done over the past year and a half. So the product is is disruptive and I say that because it is a vitamin supplement product. And the reason why I got excited about it because that also is very important is because in the vitamin supplement industry, for the longest time, you go to a GNC vitamin type, you take pills, powders, gummies for vitamins for, you know, energy for anything, right? For sleep, if you take melatonin. So what we've done with Army patch and what got me excited is everybody knows what a nicotine patch is. It delivers, you know, it delivers an active ingredient through your skin, very old school. No one's really revolutionized or used that technology since. And there's a couple of reasons why, but ultimately we've created vitamin patches that allow you to take any active ingredient that you find in a supplement from a vitamin shop or a GNC. You take that vitamin patch, you put it on your skin and the active ingredient. So it could be caffeine, it could be melatonin, it could be beast, it could be a B vitamin. It could be any vitamin that we want to put into that. It passes through your skin at roughly a 90% efficacy, which is substantial. Only because if you think about the efficacy of actually taking an oral drug or vitamin supplement, only about 30% of it go into your bloodstream versus 90% through your skin. So passes through your dermis through your skin into your body, no filler, no additives, no garbage. And then you get basically a sustained release of that active ingredient. So that's why I'm super excited. So it's not just like a vitamin supplement product. It's like a disruptive way to take vitamins and supplements. So it's a little bit habit changing because people are not used to this yet, which is a whole level of complexity in building a business. But ultimately the way that we supplement in the future, we have to get rid of all the the fillers and the additives and the garbage that we put into our body. So what army patch is doing is it's creating a safer healthier way to supplement quite literally anything. And right now we're focused on things that are very common normal to you and me. So we have an energy patch, we have a hangover patch, we have a vitamin patch, we have a sleep patch, we have all these very normal things. But the future you could in theory put any sort of drug into this patch as well. Now the caveat is the active ingredients have to be under a certain molecular weight, not literally not everything in the world can go into a patch. But I would say that 90% of the things that you supplement with on a day-to-day is below that certain molecular weight. And it can pass through your skin into your bloodstream. Interesting. This is super duplicated. It's a dental. I've been sort of in the eat from job tripping space and I've been doing this sort of larger brand. And I think the formula is a product that is lightweight, easy to share, high-perceived value, low defect rate. And that's exactly what the patch product has. Super coincidental, we recently launched a patch brand. It's called PatchMe. There's already a website with launch like three or four TikToks. So it's super duplicated. So if you'd rather be funny. That's so funny. Yeah, yeah. It's not because of this podcast. It's just super duplicated. But so now there is competition. You're referencing the fact that this is now becoming more normal because a few reasons. I mean, once people try patches, they realize it works. Now they've created a new habit. So there's benefits to patches, right? I mean, you can have sustained release of active ingredients over an eight plus hour period, whereas with anything oral, in most cases, the active ingredients have a certain half-life. I mean, you could have like a coating around this supplement or whatever, but realistically, most things that you take from a vitamin shock GNC or a drug section at a CVS or a Walmart, they're going to have a half-life. Meaning you drink a coffee at nine and you drink a coffee at 12 and you drink a coffee at five if you want that much caffeine, but ultimately it's not the most effective way. And even like, you know, there's an argument to be made for all the fillers used in these supplements. They're so full of garbage. I can pull PubMed studies on some of the fillers that are actively used in very, very normal vitamins and supplements. And if you expose a population to some of these fillers for like 10 or 20 years, there's significant carcinogenic impact for some of these fillers by just taking them for an extended period of time. So fillers in your body are not great. We are not taking vitamins and supplements in an effective way. So that's what Army Patch is attempting to solve for. And to your point, yes, as a, as a, as a first iteration of the business, we went direct to consumer. It's, it's cheap to launch. Direct to consumer is more expensive to actually fulfill than if we went direct to retail, of course, because we have to pick and pack every single order, but it's a cheap way to launch. And it lets you test the market. Of course, with the ideal, with the ideal product, I would say that you're correct in everything except for the fact that you don't. If I was going to give advice, I actually wouldn't say that on me is the easiest product to take the market direct to consumer, because there's habits that you have to change. So if it's a commodity, you don't have to change habits. If, if I'm liquid death, I don't have to change habits, right? People know what water is. If I'm even a five hour energy, I mean, I'm just another iteration of Red Bull. But the, the act of putting a patch on versus drinking something orally or taking a pill orally is a habit change. So I have to change some inhabit it. They have a coffee every morning. It's not impossible, but what it, what it does create an extreme amount of requirement for education and trust with the brand. So there's a lot of trust that's required before your cap or your customer acquisition costs come down. So it fits a lot of the, there's a lot of good with it. But like any business, there's also heady. But I mean, we're figuring, we figured out the direct consumer model now, but we're still going into retail. I mean, that's the next version. So the next iteration of this CPG company is, is I hired a VP of sales. It has significant retail experience, has relationships with every retailer and we're, and we're, we're starting in South Florida now. And we're going to retailers and we're negotiating retail deals and we're in stores now. But yeah, I mean, that's sort of the, the playbook for any CPG eventually. And then of course, everything helps each other, right? So if, you know, if you're in retailers and this is actually a business problem that more people are trying to solve for, but if you're in retailers and you see a product and then you go home and then you get retargeted somehow or you see that product online and you Google it, then you get retargeted, then your conversion is going to be much cheaper for that customer because they've already seen it in a Walmart, for example. And, and so on and vice versa, right? If I target somebody and they see it online and they see it in Walmart, like, oh my god, it's a real company. It's not just some fake garbage, whatever. So I'm going to go buy it in Walmart. So every effort that you do obviously impacts each other, but you have to think so directing consumer cheaper to get set up more expensive to fulfill every, every customer have to pay shipping for versus selling a palette to a buyer at Walmart. That's one buyer. I have to convince obviously way harder to convince the buyer at Walmart than somebody sitting at home to buying a $15 product. But ultimately, you want to go both to have and using, you want to excel at both, at both models because that's really the future of where you want to take a CBG company. And there's arguments you made for which one you're going to first, but at the end of the day, you have to dominate both. Now as a process for director consumer, launching a bunch of organic content, creating super unique content that hand go viral, the ones that go viral for some paid ads behind it, see if it can perform well with paid traffic. If it doesn't move onto the next viral content, it just basically keep looping that. Or is there like a better strategy? That's more or less the strategy. That's pretty much it. I mean, then you find ways to, so yes, that is the strategy. You do all the marketing things. So I mean, you're blogging on the website, and you have to have the right keywords in the blog, and you have to have the right keywords in the actual title of the blog. You have to be working with affiliates and influencers, and you give referral codes and links. You work with UGC content to create virality, and then use the best performing UGC into your paid. You do all the marketing things. I mean, as many as you can, I would say that the things that I just mentioned are probably the easiest lift day one. The things that are a little bit harder to measure and probably a little bit less important when you're starting is like going to a big festival or setting up a booth in a mall or like things that are more brand than performance, like you got to get your performance marketing down like ASAP before you spend $50,000 to get a booth out of trade show. So I think that getting that performance marketing down is key, and the performance marketing is again using the right creative to make sure your ads convert. And then once you have the right creative to make your ads convert, then how do you increase the average order value per customer? How do you get somebody to turn from a one-time purchase into a subscription? Do you even have a subscription option available? How are you, you know, your nurture sequences to get people who've abandoned cart or abandoned checkout to actually buy your evergreen sequences to get people that signed up for discount code that never even added something to cart to get them to reengage with your website. All those things, I think those are a little bit, well, they are more performance-based, and that's what you have to do to get a company off the ground, especially if you don't have exceptional money to burn, which I think in 2023 is the way to build a company, build it profitably. I think that's the most responsible way to build a company. I mean, you can look at examples of companies that were not built profitably, including like the WeWorks and the Airbnb's, which are huge names, but I think that there's a lot of luck involved. So those companies were built in the right VC climate, the right financial and economic climate where VCs were willing to fund a company like that. So I think that right now you have to build a company and you should always, in my opinion, build a company so it's profitable. So you don't have to worry about what the market's doing. If your company is profitable and you know how to make X more dollars, you know how to make two dollars for every one dollar you spend, that's true success. And then you can iterate on that as opposed to just waiting and sort of burning money to your next funding round, which I think is a stupid way to build a company, but I mean, that's the way many entrepreneurs unfortunately sometimes work. And sometimes I actually think that the reason why they do that is because they raise money too early and they don't set proper expectations with their investors. So their investors put in money. First time founder set a bootstrapping or self-financing. Now they have investor obligations to make and all of a sudden now there's a time frame, right? There's a time frame where they have to, they're not going to get any more money. So they raise, they raise a million, two million, five million. And when it's like four million spent and you're not profitable, well now we got to go raise. So business shuts down, not literally, but I mean founders not focused on business anymore. Founders focused on raising money. Founders going out road shows, founders reaching out to a thousand different VCs pitching all day and you raise your next round and you're still not profitable. And then you're into this this hellish hamster wheel of raising money and sort of, and then you keep diluting yourself. And then you know, this sad thing is the horror stories of entrepreneurship fast forward, five years, six years, and the founders so diluted and then Forbes are, you know, fast company publish it. They sold the company for $250 million and they're like walking your pennies and they're too embarrassed to talk about it because their last five years have been hell and they've been so diluted that they actually aren't getting a good, you know, pay out from that. So I mean, this is like a little bit of a rant, but I mean, if you're going to do a startup, focus on profitability and be careful about taking money. It always comes with conditions. That's like the entrepreneurial takeaway. With performance marketing, are you sort of looking at like launching, see 100 organic pieces over a pair of two to three months? The 100 maybe five goes viral out of the five. People pay ads, pay traffic behind it. Maybe one would be profitable and you see a blip in revenue and that creative that sort of dies out as you sort of put it in say 10,000, 20,000, I don't know how long it lasts and you sort of know running another hundred sort of creatives and sort of keep this loop. Yes, that is, yes, that's the painful, that's the painful process of finding good creative and mitigating creative fatigue. Yeah, I mean, like I, there's actually a tool that, now I can't remember the name of it, but it's something that my, my CMO is using and it basically can create and I'll have to find it for you and I'll send it to you, but it creates like you put in videos and you put in like this is, these are five intros, these are five hooks and these are five pieces of content and this is the text, these are five versions of text and it'll create like 200 outputs of all these different inputs at scale and then you have 200 pieces of creative to go test. Wow, I will find that tool, but I just can't remember what it's called now, but it's like things like that will allow you to do that at scale, at least somewhat at scale. And those winning creatives, how much revenue are you looking at from one winning creative? Because I know in dropshipping, when you have it like a winning product, good creative, that product can sort of make like $100,000, but I'm imagine you're getting creative with a sort of more, less wealth after you make product, but I only make $20,000, I'm just guessing. Yeah, I mean, so, so I'm, yes, so a winning creative, if you're going to hit like a two to three X roas, that's really, that's really good, right now. I mean, at the beginning, early days of Facebook, you could hit like a 10 plus X, same with TikTok, but that's not the case. And 20 to 30, 30 to 50 would be good, but there's also, I mean, so candidly, we don't have a huge tim. So that's a whole other conversation. So total addressable market for patches is very small, which means that we have a certain limit on the people searching out patch products, meaning that our audience size at this point is limited, which is a whole conversation about disrupting and building a in a blue ocean, right? But what you really have to focus on is if that's the case, then how do you grow your tam? And our tam would be supplements and nutraceuticals, which is like multi billion dollar tam, but that's, yes, to your point, that's a struggle in building in a blue ocean, but that's not the case for every company. So as a direct consumer lesson in it, with a commodity versus a company building in a blue ocean, well, you could have, I don't know, there could be no limit in some cases, and I'm not working in one right now. So I don't actually have statistics on if I had unlimited search traffic for a certain term, if I put a hundred thousand dollars, could I get three hundred thousand dollars back? I've no doubt. Yeah, for sure. But it depends on the category that you're building in and the amount of people that are actually looking for your product. If the total addressable market is not built yet, I mean, we don't have a lot of competition, which is a blessing and a curse, which is why we're not a commodity, right? Interesting. I really appreciate your time today. I could go on forever. I have like a meeting and another meeting of five minutes, but if it wasn't for that, I probably talked to you for about a half and now, like I wanted to talk about, like the process of finding operators, I wanted to talk about sort of... You could do a part two if you want. Yeah, you could do a part two if you want to build your email list to a hundred thousand. What else did I want it to ask? Just a whole podcast setup. Oh, the similarities you found between one of your successful guests. There are so many questions I wanted to ask, so I really appreciate it for your time. And yes, I'd love to do a part two. You'll do it. We'll do a part two. Okay, deal. Thank you so much Scott. Where can people find more about your podcast or brands? Where's the best place for people to reach out to you? So you can go to scottdcleary.com. That's where everything is. And then at scottdcleary for every social, I got the same handle across everything. So super easy. Thank you so much for your time, Scott. I really appreciate you're so open. You're so transparent. You share so many golden nuggets. I could definitely feel you weren't holding back. You sort of have this abundance, like abundance mindset, which is something I'd love to sell straight away, chatting with you. So yeah, thank you so much for your time today. My pleasure, man. Enjoy your meeting. We'll do another one. That's another episode of the podcast. If you guys made it this far, please drop me a review on Spotify and Apple. I've been reading all the reviews. I'd love to get any feedback possible. And yeah, thank you so much if you've made it this far. I really appreciate it. I'm in. I'll see you guys next week with another episode. Peace.