How Hiring Agencies Helped Me Save 10x More Money with Ian Blair

0:28Hey guys, Eric Su here. So today I'm going to be walking you through a few of my businesses and how basically with one business I ended up building with a lot of employees and one I was able to build without a lot of employees and comparing and contrasting that. There's several things that need to be true in order to do this. And I guess when I say no employees, it's myself, my co-founder, and then my brother. So really just us three running it. But we have yet to hire any other W2 employees outside of us. In order to make that happen, first we need a vehicle to make that happen. And that's like the general framework, because not all businesses can scale to this level with no employees.

1:03Let's be honest. If you're running a restaurant, you can't do it, right? It has to be a certain type of business that can even make this possible. And then how to actually get a ton of leverage on your time to not have a lot of employees. And I guess part of the caveat here is it's not about having no people helping build this. It's about having no employees. So let's first start with my business that I built out of college. So I've been working on this business a little over a decade now, and this is called BuildFire. And we basically make it so people can build mobile apps with no coding required.

1:36The way I actually got started in this business, I was building, like, WordPress sites in college and so forth. And iPhone 4S had just come out. Siri was, like, a brand-new thing. Everyone's making money on the App Store. I'm like, tight. I want to make apps. I just always had just natural curiosity for it. And I was able to start white labeling another app development platform, sold a bunch of apps, and then realized there was a lot of technical limitations and ultimately wanted to build my own platform so we could sell a lot of mobile apps. And basically the way we do it is we have all these little plugins, basically module units of functionality.

2:08We have a whole marketplace full of them, about 150 different features you can choose from to build your app, and you just assemble them. So we've built over 15 ,000 apps. It's quite a technically challenging product, but learned a lot building a SaaS company. In order to run this business, we basically have all these core functions. and this is basically how we drive that vehicle forward. And in this business, I have a little over 50 people that make this happen, do leverage some agencies along the way, but if we go like top to bottom, like what can we outsource and what do we have to insource?

2:38And it comes back to this whole principle of the type of company. And so if we look at customer support, so this is a rather technical product. It's an app development platform. So can't just outsource to a random support agency that just smiles and dials and helps people with, oh, where's my order? So we have a lot of training that goes into our customer support team. This is a technical product. Sales team, it's not just order takers. It's a consultative process. Average order value is anywhere from 10 ,000 to 20 ,000. So it takes a lot of time to build and train that sales team. And then with any software business, engineering and product development is really the heart of that.

3:17And unless you're building a very simple app, it's quite hard to just outsource that to an agency. So that's a lot of like in-house technical expertise. And then marketing. With this business, we're selling to quite a niche audience. You have to know that audience quite well. And there's not other agencies that I can just hire where they've sold a bunch of mobile apps before. I feel like it's a little bit too niche. We've had to in-house a lot of the marketing expertise. And then we have, with our professional services, basically like an internal agency. So when people come to us, people can build an app on their own.

3:48but they can also come to us and have us build it for them. So we basically have an internal agency. And for all you agency owners out there, running an agency is not easy. It takes time. Finance and billing, like that's pretty easy to outsource. There's a lot of outsourced accounting firms that you can work with, like outsourced fractional CFO. And then we have operations, which is obviously internalized. And that would be the case for most businesses. So as I go down this list, like I had to build all these functions out by hiring labor, training them. It took me a lot of time. And alternatively, Laundry Sauce, as we go through those kind of core functions, a lot of them, we were able to leverage agencies and move a lot quicker.

4:26So it's really a function of speed here. And when you can work with agencies, things move faster versus having to basically hire employees. So that's basically how we drive that business. But before we dive into Laundry Sauce, one of the things that I guess first, as I was building this business, BuildFire, got involved in a lot of the entrepreneur community, met a lot of other e-commerce founders, and always had in the back of my mind, I want to start an e-commerce business. And one of the key principles, I remember Alex Hormozzi actually talked about this last time, businesses will grow up into their point of constraint.

4:59And I wanted a business that had the fewest built-in constraints that have a massive market. So that's the general framework I was thinking about in the back of my mind. So as you go down the list, the market size, obviously that's a major point of constraint. If it's a super niche market, you don't have a lot of people to sell to. capital, like building software businesses actually tends to cost a lot of money. Real estate, that's very capital intensive, et cetera. So these are all typical points of constraint. I wanted to eliminate those so we can grow really fast. And the reason I'm even speaking up here, the$10 million business, like it's a decent sized business, but if it took me 20 years to do it, it wouldn't be that interesting.

5:37We made it happen in like just a year and a half and we're doing over a million a month. so my kind of core thesis is e-commerce is responsible for some of the fastest scaling businesses in the world and we'll go down this list and kind of look at some of the commonalities so hymns they sold generic pharmaceuticals they went from zero to a hundred million in three years away they sell luggage travel accessories and they went from zero to a hundred million in five years all birds everyone needs shoes they were able to go from zero to a hundred million in three years You got Native Deodorant. They went from zero to 100 million in three years.

6:14Manscaped. I guess everyone's got to shave their balls. They went from zero to 100 million in four years. Warby Parker. A lot of people need glasses. They went from zero to 100 million in four years. And then you have Casper and Lisa Mattresses. Both of them were able to scale from zero to 100 million in two years. And actually, the founder of Lisa is one of my investors in Laundry Sauce. So it was pretty cool to hear behind the scenes of that growth story. but what's kind of the commonality amongst all these companies? Like basically they've taken generic commodities that everyone needs and they've been able to apply brand or create some like unique product differentiation and they were able to scale it super fast.

6:50I really don't think that there's many other business categories where you can go zero to a hundred million so quickly and like consistently. There's probably a hundred other examples that I could have pulled from. This is just something that I've known off the top of my head and then just a couple of quick Google searches and we're there. Everyone needs to do their laundry, right? the way i came up with this idea is in this whole theme of what's a non-discretionary consumer good that everyone needs where you can basically apply brand and get outsized margins dr squatch was one i was familiar with they sell men's bar soap and they've been able to absolutely scale the shit out of that business basically three to half a billion in sales in under five years pretty nuts so this really checked all the boxes for me now especially coming from a b2b sass company where we developed a very technically challenging product, I quite literally just wanted to move a box from point A to point B.

7:37I'm not a technical founder. My background is really in marketing, so I wanted to be able to control as many variables as I could, and I felt like if I was running an e-commerce business with a relatively simple product, I can control a lot more of that. And yeah, when this idea hit me, fortunately, I just searched the domain, and it was available for sale. I bought it for like$650, and I'm like, oh, this thing is going to absolutely smash, and basically from day one, it has. So we've been very fortunate, but I don't think it's by accident. Let's see. What else do I want to talk about on this?

8:08All right. Well, let's go through kind of these core functions for the business, right? As you think about driving this vehicle and driving revenue, driving sales and growth. So first we have creative. We heard Sapphire Studios talking up here earlier. There's so many creative agencies that I work with. And since it's such a simple product, like people have been doing laundry their whole life. It's not that hard to understand a product. And basically, we've made it unique by adding really high-end designer fragrances. And it smells really good. So simple concept to understand. So it's allowed me to work with a lot of different creative agencies to help with the brand and the content.

8:42And it's pretty much as simple as I just send them product. They send me back videos. And I got great content that I can just go ahead and run on Facebook, Instagram, TikTok, YouTube, et cetera. So then for the website, what I absolutely love about e-commerce is everything is so data-driven. Everyone knows if they're winning or losing basically in real time. So when we run a split test, do we make more revenue or do we make less revenue? It's pretty binary. Oftentimes, like if you have, like in SaaS products where you have a sales team or you're generating leads, you know, the source of truth, there's a delay.

9:15Are these leads good? Because the sales team could be bitching like, oh, the leads aren't very good or whatever. Or marketing could be bitching at sales and be like, hey, the sales team's not doing that great or whatever. There's too much ambiguity when you layer in a sales team, in my opinion, from when you're running marketing activities to generating revenue. So I wanted to basically just cut that out and have it as simple as possible where we spent money on marketing. Do we make money? Are we running experiments? You just learn so much faster with e-commerce. And it's just something I just truly love about it.

9:45Then for media buying, this is something I'm quite happy to outsource. I mean, there's so many quality agencies that can do this that have done it at scale for many other brands. And what I love about it is there's so much shared experience. Because typically, a media buying agency will have 10, 15 clients, and they could be quite a bit bigger than you. So if we see some fluctuations in CPAs one week or something like that, we can look across 15 different brands and know, hey, is it just Facebook being weird this week? Is it something that's up on our account? and I really have enjoyed that aspect of having marketing agencies that are working with best in class brands and we have that breadth of experience.

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12:42Got an agency doing that, and they work with a bunch of e-commerce brands. They are learning from other brands. They're implementing those learnings on ours, and it's just a very efficient way to get these things done. And then fulfillment, these 3PLs make life really easy. I quite literally think of our fulfillment as a physical server in real life. So when an order comes into Shopify, basically it goes off like an API, and then we got all these little minions that go grab our product, put it in a box, and then send it off to UPS, DHL, FedEx, whatever, and it arrives at the customer's door. Like, I never have to think about it when an order comes through.

13:19So if we have a Black Friday day, we have 1 ,000 orders that come through, don't even think about it. It's awesome. 3PLs have made this very easy, so they don't need to worry about any warehousing and removing that capital constraint. And then when it comes to manufacturing, so a lot of e-commerce brands, they're using contract manufacturers. Fortunately, I was able to pick a product category where this stuff has already made an absolutely massive scale. So that was definitely an efficiency that we were able to have. I think about something like Manscaped, where they had to design that product, create custom tooling.

13:50It's probably all made in China. They have a longer lead time. We happen to make pretty much everything in North America. a fairly quick elastic supply chain. And there's basically no constraint. If we needed to, like, next year do$100 million in sales, I could just call up all my suppliers and they could fulfill it because it's just done in a massive scale. And then what's also great about it, we've been able to work with them as, like, technical partners. And they've been able to offer a lot of technical guidance and expertise. And I haven't had to invest much in R &D, actually. So probably on this whole business, I've spent less than a hundred grand on R &D.

14:25It's pretty crazy. We've got a lot of efficiencies there. These contract manufacturers have been awesome. And then the product development we've in-house because like, obviously we've, I mean, our product development is really just making boxes, making it look pretty and making it smell good. So it's not the hardest thing in the world. And then we have data analytics and finance, and I have either an outsource CFO or an agency doing our basically dashboarding and so forth. And they work with a lot of best-in-class brands that are much bigger than us. And when you take elite-level metrics and then apply it to a business like ours, it gives us a tremendous amount of clarity.

14:59The way I've been able to grow this fast is basically agencies. I'm able to buy an outcome with them.