How to Bootstrap to $10+ Million in Revenue with Lloyed Lobo: An EOFire Classic from 2021

0:01Light that spark fire nation JLD here and welcome to entrepreneurs on fire brought to you by the HubSpot podcast network, the ideal destination for business professionals with great shows like Creator Science. Today, we're pulling a classic episode from the archives, and we'll be breaking down how to bootstrap to 10 million plus in revenue. To drop these value bombs, I brought to Lloyd Lobo and to EO Fire Studios. Lloyd is a co-founder of boast.ai, which automates access to billions in R &D tax credits and innovation incentives to help businesses fuel their growth without giving up equity and dealing with red tape.

0:34In today's foundation, we'll talk about having an ideal customer because if you don't have one, you won't know what to build, what to do, and what service to provide. Focus brings clarity to your messaging and so much more. And a big thank you for sponsoring today's episode goes to Lloyd and our sponsors. Success Story, hosted by my friend Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversation on sales, marketing, business, startups and entrepreneurship.

1:03In a recent episode, Scott brings Kate Bradley on the show, founder and CEO of Lately.ai, to discuss the best ways to use AI to create content. Listen to Success Story wherever you get your podcasts. Many EO Fire listeners have launched non-food franchises and Franbridge Consulting has guided them. Franbridge's founder and frequent EO Fire guest, John Ostenson, has done more placements than any other in the country and his service is free. Sign up for a consultation with John or get a free copy of his book, nonfoodfranchising at franbridgeconsulting.com. Lloyd, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with.

1:44Hey, excited to be here. Thanks for having me. I think one of the most important things that people disagree with me, other entrepreneurs, is relationships transcend companies. Companies and success is all about relationships. It's not the money in your bank. It's the people around your tombstone. And if you follow that philosophy, you'll get ahead and be successful in life. Well, Fire Nation, as I mentioned, we're talking about bootstrapping our little booties off, specifically how to bootstrap to$10 plus million in revenue. And we have some really cool things that we can talk about here today, but I want to start off with the basics.

2:19Let's start off, Floyd with talking about setting the right business goals and KPIs. Awesome. Yeah. So you can't succeed and you can't reach a goal that you don't have set, right? What you don't measure does not get done. And a lot of people I talk to, they have this pie in the sky goal, but it's not broken down into like, where can I get 12 months from now? Like, what do I need to happen? And then bringing it all the way back to today, what do you need to measure and track week over week over week. So I'll give you an example. When we started the company, we had a goal to hit a certain revenue number by a certain amount of time.

2:58And everything, every action we did, we were like, is it going to hit that goal? If we, let's say you had a goal that in three months, you need to get a quarter million in revenue. How does that play out starting today? What are the actions you need to take each week to hit that goal? And if you don't have a goal and you don't break it down and play it out all the way today and measure it week on week, then chances of that getting done are slim or, you know, it may get done or it may not get done. But what doesn't get what doesn't get measured does not get done. Listen, brother, there are customers and there are ideal customers.

3:37How can we start to identify our ideal customers so we can just focus on them? Definitely, and focus is the hardest thing that most entrepreneurs face, right? Like you're always chasing this shiny object. Oh, let me go and put something on Facebook or let me try Twitter or let me cold call some people. And then after a while, you realize as a bootstrap founder that you're chasing a dozen things. And the thing is, if you do one thing really well, meaning one kind of customer coming through one kind of channel, getting one kind of value, your chances of success are significantly higher than you trying a dozen things and nothing quite working out like half-ass and so one of the most important thing is nailing down your customer if you don't have an ideal customer then you don't know what to build and what to do and what service to provide focus brings clarity to your messaging so an ideal customer is a person's title their location, where they eat, breathe, drink, sleep.

4:37Who do they buy from? Who do they admire? And what events and groups do they belong to? Once you have that ideal customer profile, you can map out everyone, the whole ecosystem around them. And then you can start to dominate that by surfacing content, by surfacing partnerships, and by being part of the groups where they are. People buy from people and people buy from people they like. So the concept of understanding your ideal customer is just that. Let's nail that down. What is the title? Where do they work? Where do they eat, breathe, drink, sleep? Nail it down to the perfect demographic and then test it out.

5:17You may have a person that's the CEO of a startup in Silicon Valley. That could be one ideal customer that is not raised any money. And you could have an ideal customer that's the CEO of a construction company with 50 to 100 people in Michigan. Now, they both have very different problems. And the way I would look at it is create a hypothesis. I think this is my ideal customer. And maybe create three of them, right? Like that CEO in a Silicon Valley tech startup or a CEO of a manufacturing company in Michigan and build a list, see how many people exist in each of those profiles. So you may find that, okay, there's 20 ,000 people in this demographic here for the Silicon Valley CEO and there's maybe a thousand people, right?

6:04So the way you nail down the ideal customer profile is you have this hypothesis, put it on an Excel sheet, Google spreadsheet, two or three of them. Then you got to identify how big is the market? How many of those people exist? How easy or hard it is to reach them? And what is the propensity to pay? So you may, you may map this out and say, okay, you got the manufacturing CEO from Michigan. You've got the Silicon Valley startup CEO, how many such people exist? Maybe it's equal. Maybe it's like 20 ,000 manufacturing CEOs and 20 ,000 startup founders. What is the propensity of them to pay? Now, you know, startups are mostly starting to get funded.

6:40A lot of them are funded. So they have a wallet they can pay. Manufacturing is suffering. Maybe they don't pay as much. And then the third one is what is the ease of access? Can you reach out to them? You can email, you can cold call, you can run ads. startup founders are all over. So it's easy to reach out to them on social, on email, through ads. Manufacturing, maybe you just have to cold call. So I typically do an ice score, which is rank each category by five. So you pick your ideal customer profile, which is now a hypothesis when you're starting out, right? It's like John, startup CEO, is Jim, manufacturing CEO, ideal customer profile that you're testing out and number of people, how big is the market, and for startup CEO, I'd rank five.

7:26And for manufacturing, I'd probably rank four, just hypothesis here. And then propensity to pay, startup founder is four and manufacturing is likely two. And then ease of access, the startup founder is five and manufacturing is likely two. And then I'll go and source leads and contacts for each of them and try to reach out with our messaging because now we know who the ideal customer is. How do you define the messaging? What is the problem they face? and how can you uniquely solve them and test that messaging out through emails, through calls and running very inexpensive ads. And at the end of it, you'll realize that it's resonating with one group more than the other and then you just double down on what's working.

8:06So that's a data-driven way of finding your ideal customer. I love all of that, specifically about how you broke that down to the five ranking systems. I mean, Fire Nation, you really need to have systems if you are going to have success in every part of your business. And I love how you, Lloyd, put this in to this part of identifying the ideal customer. And something else you talk about a lot that I really enjoy are marketing channels. So share with us, Fire Nation, how we can really identify the right marketing channels so that then we can go ahead and acquire those ideal customers, those right customers.

8:41If you're data-driven about everything you do in the business, yes, there's the emotional side of it, which you need to consider. But if you're data-driven about everything, you have the goal. The goal is data. How you break that goal down to today is also data. So when you identify marketing channels, right, it's the same. It's the same concept is like you you make the assumption that you're running ads and it could be one channel. You're sending emails. That could be another channel. And a third one may be like you're hosting events and that's another channel or podcasts like John's doing is another channel.

9:18Now you start testing them out and seeing putting very little spend and saying what might work and then double down on what works. But now how do you figure out those three or four channels to start testing money on? And I use the same concept. Let's say we put on podcasts. I'm going to start a podcast to generate sales. I'm going to send emails to generate sales. And I'm going to host events to generate sales. Now, if you rank that on the same 5-5-5, what is the impact of hosting each of them? Maybe podcast is five and sending emails is five. Hosting events is five or whatever, four or five. They have pretty high impact things.

9:58What is the ease of doing them? Now, hosting a podcast and bringing a following is very, very hard. So I would put like ease as one. Sending emails is an ease of four or five. And then hosting events is an ease of three. And what is then the last piece here is what is your confidence in those channels? So then you score out and you're like, okay, you know what? I'm going to test emails first. I have my ideal customer profile. I've ranked it. I'm going to send them emails and maybe as a secondary run some ads to retarget them. And I'm going to sit on this podcast stuff because as a bootstrap founder, I don't have the brainpower to try it and make it successful.

10:37Anything you do that's not done with cadence doesn't become successful. And you know this better than anyone, John. I know all about the cadence, brother. I know all about the consistency. If you can show up and deliver, Fire Nation, you are going to win. And we have some really cool things we're going to be talking about. I want to really get into funding your business and specifically in ways that don't require giving up equity, something I've been able to do really cool. And also, you know, I will say, and this would be interesting for Lloyd to share some of his personal lessons and life failures and hardships and things that we can take away from that.

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14:11That's franbridgeconsulting.com. Lloyd, we're back. And as we kind of shared before the break, I want to talk about the best options to fund our business. But specifically, this is Fire Nation. We are entrepreneurs. We are bootstrappers. Talk to us about ones that don't require giving up equity. Definitely. So there's a few ways you can do it. The best way is how I talked about in the last few points is get customers, get, keep, and grow customers. There's all these things that you can build and you can make and you can provide to them, but get customers. Then you can fill the orders, right? Effectively, that's what I'm saying is like sell.

14:47Have conviction in the problem you're solving for the customer. If you have conviction, then you can convince them. Get them to pay. That's the first one, customer money. The second one is there's all these incentives and grants like research and development. Tax credit is if you're developing new technology, improving existing technology in the US or Canada, you can get anywhere from 10 % to 64 % of that money as a cashback, as an incentive to fund your business. Once you have customer money and you have things like research and development tax credits, you can make your business more bankable and you can leverage things like bank debt and venture debt and things like that, right?

15:28So there's different debt options where you pay low percentages and you can fund your business because raising equity financing is a hard process, right? You go through this massive sales process of trying to convince investors and it may work out, it may not work out. But like leveraging sources like government funding, like customer monies, I think I say everything, start with the customer, get the customer to pay you, then leverage government incentives, then leverage bank debt. And then at the end, when you've hit a certain path, then get venture capital. The thing with venture capital is this.

16:07If you put$1 in equity capital and you can squeeze out$3 or$4, then it makes sense. But if you don't have a path to turn one into three or four, then it's very hard because you'll take this equity money and you'll have board members and it's going to be difficult conversations because you've not nailed something. So my concept here is nail it before you scale it. Use the venture dollars to scale your money. Use the equity dollars to scale your product, your company that you've nailed. But before then, leverage customer money, leverage grants, leverage your own sort of sweat equity, and leverage bank debt to get to where you need to point a scale and then raise the equity dollars.

16:50Nail it before you scale it, Fire Nation. I hope you're taking notes on this stuff. This is from somebody who's been there, done that. And let's move into a little bit of a different area right now, Lloyd. I want to talk about some personal lessons from your specific life failures and the hardships, including almost dying from COVID. Definitely. That was a hard one. So we bootstrapped Boast for a very long time. And oftentimes, we didn't take money from the company. We do an annual offsite where we take the whole company on trips like Cabo, Costa Rica, Hawaii, and we do a conference which the funds get donated into the community.

17:26It's called Traction. And there were times where my co-founder Alex and I took no money from the company, and we still did those things. We still made those commitments to take people on trips and offsites. So things have been extremely, extremely hard. And one of the hardest things I think that I faced quite recently, there were two instances. There was one instance where it was a time in the company's life where I felt I needed to get a job. And I went and worked at a Silicon Valley tech company. The learnings have been invaluable because you take failure as a learning. So the fact that I had to go and get a job so I could pay myself was a learning.

18:08and I learned from it and became stronger and became a more competent founder. And the second was, and probably the second is the most important learning. As entrepreneurs, we're so focused on the hustle and the business that we forget to stop and smell the roses. So last year, after bootstrapping to over eight figures in revenue, we were faced with this equity option for us from some really good investors that we admired that would change the trajectory of the company. And it made sense because we could turn one into four or five. And so we took the money. And when you're raising equity money, it's a very stressful process because there's a lot of due diligence that goes into it.

18:48It becomes a full-time job. And I told my wife and kids that we'll celebrate when that fundraise is over. And that fundraise was announced December 10th. And shortly thereafter, I got COVID. And it hit me like a ton of bricks. My wife's an ER physician. And, you know, so she's exposed. But my whole family got COVID. And everything was fine. You know, the celebrations paused. But January 2nd or so, I ended up in the hospital. My oxygen levels were dropping. I was unable to breathe. They tested me. And I had bilateral COVID pneumonia. Both my lungs were shot. And I had to get put on the oxygen and meds via IV.

19:33And I was there for a while. and my wife, despite being a doctor, couldn't get in the hospital room. So they had set up a Zoom and I realized to myself and I cried a lot and I said, man, if I can go back in time, I would just spend more time with my kids. It's not the money in the bank. It's the people around your tombstone that matter. I just don't want to go like this alone in the hospital. There were two nights where I felt like I was going to die. I was unable to breathe and I just, you know, I made a pact that I'm going to come back and spend more time with the family, spend dedicated time and try to fill out everything I do as an entrepreneur that's not needed and delegate it out so I can focus.

20:13And so as founders, I think what we don't do well is we don't stop to smell the roses. We just go, go, go all the time. And it's important to enjoy life a little bit every day and appreciate things a little bit more every day because just doing a little more every day compounds and it becomes a big thing versus you try to do it all at once and it may or may not work out. There's more people that die of indigestion than starvation. So don't try to conquer the world at once. Just get a little better every day, whether that's appreciation at home or at work. Just appreciate a little more, smell the roses a little more every day and you'll have a great life.

20:55I mean, talk about putting things in perspective. I just want to first off, Thank you, Lloyd, for just being so open and vulnerable and like painting that picture. I mean, of being alone, you know, thinking that you might literally be leaving this world and what that was going to mean. I mean, I hope, Fire Nation, you realize what is important. Yes, it's important to work hard on things that you love and to have financial freedom and fulfillment. But, you know, hopefully that fulfillment involves people you love every single day. So let's end Lloyd with a bang. Talk to us about building and inspiring a team for high performance.

21:27So I think one of the most important things to build and inspire a team for high performance is this. You need to hire smart people and get out of their way. You hire people so they tell you what to do and not the other way. Be a leader. The job of a leader is to build, inspire, helping them understand what the mission and vision is and giving them the metrics. At the same time, giving them the autonomy to execute. Make sure you have the objectives and key results in place. Give them the mission, the metrics, and the values. The mission and the vision is important because they know where you're going long term.

22:06The metrics are important because then they can measure. They know what they need to stay on top of day over day to hit that. And the value is very important because you can go anywhere in life, but you don't want to break 10 things. You don't want to hurt 10 people. You don't want to step on toes, right? So the values, your core values as a company is important. Like it may be empathy. It may be we all grow together as a team. It may be don't do evil in the world. But if you give higher smart people who you want to learn from and they tell you what to do and get out of their way, then give them the mission, the vision, the metrics, and the values.

22:41And then step out of the way. Be an input, not an approver. And there's a big difference there. If you're an approver, you become a blocker. And I've been a victim to that. if you're an approver, you are, and the more you say, I want to approve things, the bigger, the blocker you become, and more you hold back the progress of your company. The other thing I would say is hire for trajectory versus experience. There are some people who may not have the experience, but they have the passion and the conviction for their craft. And people with immense passion and conviction can move mountains. A lot of super value here, Fire Nation, hire smart people, and then get out of the way.

23:21I just love that bluntness. And I love that vision too, because we just get in our own way so often and hire for trajectory, not experience. That's also a great takeaway. And Lloyd, you've dropped so many value bombs here today. What is the one thing that you really want to make sure Fire Nation gets from our entire conversation here today? How can we connect with you and your team and learn more? Any call to action you might have for us, then we'll say goodbye. Definitely. So what Boast AI does, we automate access to government incentives and research and development tax credits. If you're developing new technology or improving existing technology, you can get lots of money back, hundreds of thousands to millions of dollars from the government.

24:00It's a cumbersome process. It takes a long time to get the money and is prone to expensive audits. And we streamline and automate that process so you can get more money faster for less time and risk. Just go to my company, boast.ai, B-O-A-S-T.ai forward slash fire and sign up and we'll give you a discount. Boast.ai forward slash fire. That's for you, Fire Nation. That is for you. And you know this, Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with LB and JLD today. So keep up that heat and head over to eofire.com. Type Lloyd, that's Lloyd with two L's, L-L-O-Y-E-D, in the search bar.

24:44His show notes page will pop up. And this is everything that we talked about here today, Fire Nation. Best show notes in the biz. Lloyd, thank you, brother, for sharing your truth, your value, your fire with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Thank you so much, John. It was a pleasure. Hey, Fire Nation, today's value bomb content was brought to you by Lloyd. And If you ever thought about creating a podcast of your own, well, The Podcast Journal is for you. It's gorgeous. It's faux leather, and it will guide you step-by-step in the creation and launch of your podcast in 50 days, 5-0.

25:21Visit thepodcastjournal.com. Use promo code podcast for a$15 discount as a thank you for listening to my podcast, thepodcastjournal.com, and I'll catch you there or I'll catch you on the flip side. Success Story, hosted by my friend, Scott D. Clary, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Success Story features Q &A sessions with successful business leaders, keynote presentations, and conversation on sales, marketing, business, startups, and entrepreneurship. In a recent episode, Scott brings Kate Bradley on the show, founder and CEO of Lately.ai, to discuss the best ways to use AI to create content.