Navigating Growth With Jonathan Cronstedt: Expert Answers to Your Questions

0:00Start where you're comfortable and begin to build those muscles. and just make sure it's something that it's worth it, that you're excited about. Don't do it for a number where you're like, well, if I'd known it was gonna be this, I don't wanna get out of bed. But find the level you're comfortable starting at and just get going. How much more successful would you be if you had lunch once a week with insanely successful entrepreneurs who shared their biggest secrets on how they think and achieve success? Grab your seat at the table because this is Business Lunch with Roland Frazier and Ryan Dice.

0:34Welcome to another episode of Business Lunch. And today's a snackable episode with Roland where he's going to get into some more tactical strategies that you can start using to live a rich and happy life. If this is the first snackable episode you're hearing, I'd encourage you to go back and listen to some of the other episodes that Roland has put out. And if you want to get notified every time we release a new episode, go to the new businesslunchpodcast.com website, and we'll send you detailed notes along with every episode. That's businesslunchpodcast.com, www.businesslunchpodcast.com. And you can sign up for the free email newsletter where you'll be able to get all the highlights and resources from the episodes.

1:09All right. So I wanted to bring Jonathan in because, number one, he is the most quoted guest that we have either here or on the airplane when we're flying around. It's a tall order. And because he drops, he speaks in great quotations. So I'm very jealous about that, but also excited to be with him and hear all the things he has to say. But Jonathan, how many of you know who Jonathan is? A couple? Okay, cool. So Jonathan, who's friends call him J-Cron, so that's why I call him Jonathan. No. J-Cron I met long ago. I'm going to let him tell the story because also you just recently had kind of a breakthrough of how you got to where...

1:55Yeah, I finally answered the question that everyone asks me all the time. They're like, what's the secret to getting a$2 billion valuation? How did you do it? And I've always had terrible answers. Everyone's hoping for like, here's my eight point, no fail, double unicorn PDF. Give me your email. And it's like, would you get a very short PDF? It'd be like, right place, right time and work fucking hard. So clearly it doesn't do well in a PDF. But I actually figured out how to encapsulate it into something that is valuable. Before you share it, though, just so I can give you the full buildup. So Jonathan has been the CEO of Digital Marketer.

2:30He was, before that, the best affiliate manager for launches that you would ever encounter, which is kind of how we connected. And he ran all of that for Glazer Kennedy, which was Dan Kennedy's, a very famous marketing person, then worked with Success Magazine, worked with a big network marketing company. And then I think, did I miss any of the things along the way to Kajabi? And then went with Kajabi and helped build Kajabi to a$2 billion valuation, was co-CEO with Kenny over there for until very recently when they both decided that it's not that much fun to be CEO of a$2 billion company. and now he's just independently wealthy and collecting all of the best watches and he's my watch coach.

3:22Everyone needs a hobby. Everyone needs a hobby. Because if you don't have one, then you just, you'll wither and die. So you should definitely listen to what he says because among all of the other things that he's done, he CFE'd his way into that$2 billion company and so he's got the chops to kind of share everything from how does it feel to get into post-exit consulting and think about doing CFE again? How does one get into a$2 billion company to start with? And then his journey, which I'm excited for him to share with you first. So let's give him a hand because he's just an awesome guy. Well, thank you all very much.

4:03And thank you to everybody watching at home via Zoom. You're definitely my people because I'm sure like me, you do your best thinking with no pants on, and this allows you to do that. So nicely done. So I guess we can start off with how I met you. Let's do it. So one of the things you'll find about my CFE journey, my career, quite frankly, the one common denominator that really is behind all of my successes is it always starts with relationships. That for me, I am very much a person that has always pursued great relationships, approached them with a spirit of abundance. I'm the type who always trusts until someone gives me a reason not to.

4:40It means I've gotten burned more than people that don't trust first, but it also means that I've had the opportunity to build a lot of relationships that had I not trusted first, probably would not have been able to be built. So it definitely has balanced in my favor. And Roland is somebody that I'm proud to now be a decade-plus member of Roland's Friends. You'll notice that as you are around Roland, you'll meet people that's like, I've known him for 10 years. And then, you know, you feel like you got short, short end of the stick because you meet Grant. It's like, oh, I've known Grant for over 20 plus years.

5:10And I'm what sucks is like, yeah, 30 years. So like what sucks is Grant's always going to have known Roland longer than me. And I don't feel like I have enough time to beat him. But long term relations is Grant's a lot older than you are. Yeah. And he's an attorney, which is just gross. Yeah, right. Absolutely gross. So I'm VP of biz dev for Traffic Geyser or affiliate manager, depending on what term you're familiar with. And my job was to manage product launches. And so we're doing our first big launch as a company. It was called Main Street Marketing Machines. And it was for bringing video marketing to local businesses.

5:42And we had a live event at the end of it. And our affiliates were coming to it, you know, kind of, hey, come on, appreciation. And there was a guy in the leaderboard. We had this big television screen in the leaderboard. And it said MMS Inc. And it's just climbing the leaderboard. And everyone's looking at me as the affiliate manager. They're like, who's MMS? And I'm like, no idea. And they're like, well, the name is B.R. Frazier. I'm like, still, no idea. Got nothing. But he's doing really well. So go MMS. So I get to the event. And like all of you at an event, you know, you're shaking hands with hundreds of people.

6:13You're trying to figure out who everybody is. And Roland just walks up as graciously as possible and says, hi, I'm Roland. And I'm like, hey, great to meet you, Roland. I'm J. Kron, you know. And he's like looking for me to recognize him. And I'm like, great to meet you, Roland. Because we had talked, by the way. Right. So I had talked back and forth on chat or email or something. Totally. And he's like, MMS. And I'm like, oh, holy shit. You know, it's great to meet you. He goes, you know, this was really fun. I've never done a product launch before. And I'm like, dude, you finished like second or third or I mean, top five for his first product launch.

6:43He's like, I did it because my wife and I were stranded in Europe because of the volcano. And I was in a hotel room with literally nothing to do. And I'm like, you did this from a hotel room in Europe because you were bored? He's like, yeah, you know, I really think the next time you guys do one of these, I'd really like to go for it, really see what I could do. And I was like, awesome. So sure enough, Main Street Marketing Machines 2 comes around, Roland decides to really put a plan together and shoots the lights out. Like, I mean, leaves everyone in the dust, probably sold more than second, third, fourth, fifth combined.

7:14And, you know, I think it was like over a million and a half dollars as a single affiliate. So almost probably 30 % of the launch. I mean, just obscene numbers for that time. And we end up becoming much better friends by that point. And Roland, actually, first time in history, I've done probably 100 product launches, product releases. Roland is the only affiliate who, after that, said, I'd like to say thank you. We'd like to have you and your wife come down, put you up at the Grand El Mar. We're going to have dinner at their Michelin star restaurant, Addison, together, and just break bread and celebrate what we did.

7:47And I was like, I hope he's normal, because no one's ever said, I'm going to take you and your wife to a hotel and have dinner with you guys. I'm like, this is some like eyes wide shut stuff. I'm not ready for that. You know, in retrospect, the hotel could have been a little, a little scary. Yeah, yeah, yeah, it was. But I mean, and that was where our friendship began, you know, over, over a decade ago. And it's been one of those things that now going back to answering that question that Roland asked that I get asked all of the time, because, you know, I somehow got a lot smarter when someone assigned a third-party value to whatever was built with my name attached to it.

8:23I'm the same person I was then, but how I'm viewed and who asks me what and how what I say is received is very different now. And what I would say is the common theme that if I were to distill all of it down into one single point of success or inflection in my life, it is the quality of people I had access to in those inflection or decision points in my journey. By far, number one thing. That when you're in a company and it's like, do we go left? Do we go right? Do we adjust here? Do we adjust there? Do we try to scale it? Do we keep it lifestyle and cash flow it? All of those kind of questions are going to be determined by the quality of the people you are asking them to.

9:06And for me, that has been the greatest difference maker by far. So having access to people like Roland, having access to Roland's network. Those are the kind of things that are the real difference makers for me in business. So if you were going to ask me, how do you build a$2 billion valuation? I would say it's going to depend on the quality of the people you have around you when you're asking those questions and then implementing those answers. So kind of looking at coming in, I think it's an interesting story, looking at your entry into Kajabi as an equity person. And you have a structure that we don't talk about a lot that I'd love to, if you're comfortable, to share as well with the note.

9:45But would you just kind of talk a little bit about that journey and then thinking about from the perspective of everybody here, how they might use, what they might take away from what you've learned? Because you're now kind of looking to do it again, right? And so I know you've thought about that a little bit. Would you share that? Yeah, definitely. So when you look at, again, going back to my theme of long-term relationships, that is what built the foundation of my opportunity with Kajabi. So I met Kenny originally through the third co-founder of Kajabi's wife at the time. She says, you're in Orange County.

10:20They're in Orange County doing super cool things. You should meet Kenny. I'm like, awesome. Meet Kenny. They hire me for consulting for six months. They fire me to work with Frank Kern because he was cooler. So Kenny takes me to Starbucks. He says, hey, man, small company. We can only have one consultant helping with marketing. We're going to go with Frank. I was like, all right, cool. well, let's stay in touch. Two years go by. They hire me back as VP of business development. I was there a week and a half because then I got the call to be CEO of Digital Marketer. I took Kenny to the same Starbucks.

10:49I said, look, I'm only quitting because you fired me. So let's stay friends. And he goes, well, we can totally stay friends now because we're even. I fired you. You quit. We're back. So my career starts taking off working with Digital Marketer in Austin renting an office from Kajabi in California. And one day, like three or four years later, Kenny walks in on a Monday. He's like, hey, dude, what's new? I'm like, well, I'm going to figure out my next gig. Success Magazine wants me to move to Dallas. I'm not leaving Southern California. Not sure what I'm going to do next. And Kenny said, well, we should probably just sit down and talk about it because you've done a lot of stuff.

11:21We've done a lot of stuff. And we should just probably figure out a way to work together because it's easier than moving your shit out of this office. And I was like, I agree. Let's figure it out. So So I ended up sitting down, and this was a time in my life where I had been pretty much a hired gun CEO the entire time. I was brought in to grow a company, sometimes had equity, sometimes not. And this was a season where I was having conversations with Roland, with some of my guys in my YPO chapter. And the general theme was, if you do not have some type of leverageable asset, something that can grow exponentially outside of just your direct involvement or just another job, you're not going to create the life that you want.

11:58And that was hard for me because I was so accustomed and programmed largely for my family, get the biggest salary you can, save as much as you can, hope for the best. So this idea of taking, when I joined Kajabi, a 50 % cut in salary for an opportunity to be on the cap table, I was like, boy, this better work. So thankfully it did. But it was something that in those conversations, it came up with a lot of my mental programming that I needed to move beyond. And then in those discussions with Kajabi, it very much was a situation where they knew it could be more than it was. I knew it could be more than it was with my involvement.

12:34But I also knew that I wasn't going to have the opportunity that would excite me, given what I had the wherewithal to buy in at at that moment in time. I was fortunate that we had a long-term relationship leading up to this that allowed us to have a very cards face-up conversation, which was just, look, this is what the company's worth today. You can't write that check today. We're going to help you buy into this company today with a note. So that way, the value that we have already created will be realized. And it'll be realized out of the value that we're going to co-create together. So bought in with a note, was a real note, paid interest on the note during the entire period of time.

13:14And that was how I had my equity stake in Kajabi. When I joined them. We were doing 6 million in ARR with 25 team members. And when Kenny and I stepped down in July of 2021, we were over nine figures, 400 employees, and the platform just crossed over 4.1 billion in products sold by our user base. So it certainly is becoming a thing. So you think it might make something of itself? We're hoping. Nice. Because I spent all my money on watches, so, you know.

13:46So in terms of negotiating what you were going to do, was that because you were a marketing consultant before. Then when you came on the second time with the equity, it was as a third time. Second time was a VP of biz dev and very quickly left to go to digital market. The third time was partner, president and on the cap table. Okay. So coming in then, it was as an employee of the company? Yes. Okay. And thinking about kind of now, as you're looking at going forward and knowing everything that you know about what you did there to build it up and the deal, what do you think? Because we had Kevin came up earlier, who's got an offer from a private equity company now or a company to come in and be a CEO.

14:37then he's trying to decide between is that does that make sense because he's going to get some equity significant equity 20 percent and um and maybe keeping his options open to have the ability to do multiple deals because i know that's something you're kind of wrestling with now too can you just kind of share your thoughts on all that yeah i uh i'm sure i can be as unhelpful as possible in answering his question um ultimately it it's going to come down to a very personal journey. Where's Kevin sitting? Right there. Okay, cool. Looking at random tables here about his journey. So it's going to be something where you're going to explore what it is that you want, and there are multiple ways to get there.

15:15So Roland is extremely capable at managing a bevy of opportunities, being super impactful in all of them, and he has that special skill of being able to do that, I don't know yet that I'm wired that way. I am somebody that I don't think I could have done what I did with Kajabi if Kajabi was one of many. Because for me, it was more, I want to bring everything I am to this. I'm going to be the guy on the videos. I'm going to be the guy crafting campaigns. I'm going to be the guy evangelizing this thing everywhere. And I don't know that I could have done that with more of a portfolio focus. So you've got kind of two schools of thought.

15:58You know, you have the index fund investing that has stood the test of time, beats almost every actively managed fund, that you've got a piece of a lot of things and you're going to do better consistently over time. And you shouldn't try to beat the market because only idiots try to beat the market. Then you've got Warren Buffett who says, diversification is only a hedge against ignorance. Put all of your eggs in one basket and watch that basket really closely. And both of them are right, but ultimately it depends on how you're wired. So if you want the thing and you're bringing everything you have to it and you have the confidence that if you bring all of yourself to it, it will be a win, you probably will do better doing that.

16:41However, it's binary. It's either a win or it's not. And if it's not, you lost out on all of that time. You have no other opportunities. So it's kind of like, you better be right. And I think the downside to that is, if there's anything about my story that I would offer a disclaimer, there is a survivorship bias to that burn the boats, go all in mentality. You don't hear about the people that go all in and don't make it. You only hear about the people that go all in and do. So are there lots of people that probably made a similar decision that I did that you're not hearing about? Probably. I mean, I'm probably better, but, you know, it's one of those things.

17:18That was a joke, by the way. You guys didn't laugh. I had a couple of people do. I looked like a self-aggrandizing asshole. That was a total joke. But it's very much one of those things that, you know, the Bhagavad Gita says we are entitled to our labors, but not necessarily the fruits of them. Figure out what journey you're going to get the most joy in so that the outcome will will be delivered in whatever form it's delivered. So it's far more about how do you want to play than it is necessarily only being able to win one way or the other. So was that helpful? Not at all. Oh, yes. Yeah. I will tell you, the other thing that I think would be very valuable to the whole group that Ryan Dice said to me, we were at dinner and Ryan's like, so how's everything going?

18:01I'm like, I've been retired about 18 months and, you know, it's weird. And he's like, well, you know, have you decided to stop being a navel-gazing bitch and make some money? And I was like, no, I haven't decided yet. He's like, well, you know, let me give you a thought. He's like, so when Tiger Woods won the Masters, did he put down his golf clubs and go sit on a beach for 18 months and ponder his existence and wonder all of the intricacies of the world and figure out what to do next? And I'm like, no, he probably just went to the next tournament. And he's like, uh-huh, maybe you should just go to the next tournament and just keep playing.

18:34And I was like, okay, you got me. Pulled my card. Mainly because your wife wants you to stay home and be there all the time, right? My wife literally said three months ago, she's like, I want In-N-Out for lunch, and you should pick up a job application while you're there. She's awesome. Love my wife. She's awesome. So one of the things that we chatted a little bit about that I think would be very helpful to everybody here is imposter syndrome. and I'll ask you guys and you guys at home, give me yeses if this is the case, but do you ever suffer from imposter syndrome? False. Okay, most people. Yes, okay, we got some, yes!

19:17Okay, we got a couple of people there answered. There we go. So would you guys say? Our Daryl Patrick has never struggled with it. We should ask him how he fixed it. That is amazing. Never struggle with the ones. I'm impressed. He must be a sociopath, actually. You think so? Yeah, totally. You heard it here, right? So the question, I guess, then, for you guys would be, do you think someone who has had a$2 billion valuation, effectively a$2 billion exit, partial exit, with more skin in the game to exit significantly higher, who has all of the experience, been CEOs of multiple companies, had all kinds of success, track record, would have imposter syndrome about helping somebody in a consultation on how to grow their company.

20:06Do you think that they would have imposter syndrome about that? I would. He says yes. Do you? He's right. Yeah, totally. So I learned about this thing called the Dunning-Kruger effect, which basically means that the more you know about something, the less likely you are to believe that you know all of the things you know. And I was talking to Doberman Dan, who's been in the, you know, copywriting, marketing, direct response world for almost as long as Dan Kennedy. And he was like, what are you going to do next? I'm like, I don't know, man. He's like, you know what's so hard? He's like, I've been in this industry almost three decades.

20:42And he's like, all of the people that haven't necessarily done something are the most confident and cocksure about their ideas and approaches. and all of the people that have done something like yourself are truly hamstrung by this idea that they don't know what they have to contribute or how they're going to help anybody. And I was like, yeah, that's me. Do you know how to fix it? He goes, no, sure do. I'm like, okay, great. But it very much... At least I have a label I can put on it now. No, totally. It's that thing. And Shannon, we get the, we appreciate your sarcasm, by the way. But it's very much something where, you know, the imposter thing is less, unless I'm not going to have it and more just choosing to move through it.

21:24So it very much is something that if you have it, me too, and it's very much something that the easier it is to move through it is all the more indicative of how much empathy you have for the people that you're looking to help. It's actually something that is a great indicator that you care deeply about what you do, not something that is insecure, unfortunate, or something to be avoided. It literally is an indicator that you're a real human being and you care about the person across the table. So it can be a motivational force versus a stumbling block. So you asked me when we were talking, because I've been trying to get John into this consulting for equity thing.

22:06And he still hasn't decided if he wants to do the one company or several. So he's not done anything yet. but he did say, I don't know what I would do or have to offer in a consult. So exactly what Doberman Dan said, right? He's like, I don't know what I would have to offer. Would you share a little bit about that? And then he asked me if he could sit in on one. And so I want him to share as somebody that was nervous about what do you even do in the consult? What do you think you have to do? And then how does it actually happen? How many of you have done a consult so far? Raise your hand. Paid consult.

22:43Okay, great. How many of you want to? Okay, great. That's awesome. So that's great. So I think this will be really helpful. So we kind of - I mean, that's the hilarious part about it is you can remember when I used to do consulting. Yes. And I did the model that you gave me, which was basically I would go do all of these free product launch maps for people. And I would just be like, here's how to do a product launch. And some would do it and some wouldn't do it. And Roland's like, your idea is dumb. And I'm like, thanks. Would you like to help? And he goes, yeah. He's like, you shouldn't be doing this for anybody that doesn't write you a$10 ,000 check for the day.

23:23You're going to put the whole playbook together. And then if they work with you, then you credit them the 10 ,000 towards working with you. And if they don't work with you, you have$10 ,000 and they have the playbook you would have given them anyway. And I was like, oh my gosh, I just saw the matrix and changed everything. Close rate, five times as high. I actually got paid to do it. And I was like, this is incredible. And it worked so well that I totally forgot how to do it. And I haven't done it since. But yeah, I mean, it really is something that the console, you go into it. And for me, I'm not the technical marketer.

24:03Like I'm, I always have this fear of I'm in a consult and someone's like, well, here's how I'm doing my Facebook targeting and the retargeting and the audience like it. And I'm just like, yeah, I can't help you. And then they're going to find out that I'm a complete fraud who knows nothing about business. And they're going to tell all of their friends. And then the world will find out that I wasn't as confident in my abilities or success as I should me. And then watching Roland go through this consult and seeing what it actually was, I was like, this is not at all what my internal dialogue of someone is going to ask me the only questions I don't know how to answer, and I'm going to get caught with my pants down.

24:42It was literally watching rapport building and almost like it's much more of a trust exercise than it is a tactical. exercise. They're not coming to the consult because they're planning on leaving with your eight-point no-fail double unicorn plan. They're coming to it because they actually want to know if they can trust you with the thing right now that at least equal to their family, if not more important than their family, is this thing that they're considering letting you help them with. And they also know that in order for you to help them, you're going to have to see all the areas that are probably ugly, probably have some hair on it.