The Mozi Hotline Is Open | Ep 933

0:00The biggest belief breaker that I've had with content is that when I saw the guys for the true the best in the world, 20 million plus subscribers on YouTube. and I asked them to kind of look at my stuff they said oh well send me your pre-production notes and I was like what do you mean I kind of just like have a couple of stories and I turned the camera on they're like yeah well that's why you don't have 21 strawberries I was like well that that tracks what's going on everyone we're live in our first personal promosy hotline second ever I guess I did one with Sean Puri and uh he did a little twitter post and said if everyone want to ask questions business-wise you can ask him and i had a blast doing it and i was like i would much prefer to do this than make the the good old-fashioned right camera not that i don't love it but uh we're gonna see what we got all right caller one let's see here hello hello how are you i can't believe i'm talking to you nice to meet you too candace tell me about the business what's going on let's see you shoot Okay, so I invented a ring for single people because I'm a single all-life, and the dating apps are just inseparable.

1:10So it's just a ring that shows that you're single and seeking. It has gotten some traction. Here's where I said it's a colossal task to educate everybody that needs to be educated about it, and that's what is making people hesitate to buy it because they're not teeing it on anyone else. There's deliveries or anything like that, so they're kind of waiting. So I do a ton of products. Just get it out there. We're out there promoting it. We want a bigger part. I do what I can in my free time. But like I said, I also have a salon, a barbershop, and an Airbnb. And I work there six days a week. Girl, how many business do you got going on right now?

1:50Well, I like two. Well, I mean, we'll try and figure out what you should do more than what I would do. But all right, tell me, what's revenue of the ring? Not a lot. we've sold maybe less than 20 rings oh 20 rings in total okay got it all right what do you sell about rings for it's 129 okay got it 129 all right so that's so yeah not a lot of dollars

2:20okay what's so give me the uh the salon so what do you make it on the salon and that's your net or revenue okay got it and you own the salon okay got it okay and then what's your take on the on the hundred yeah so i did pretty good i mean i bring home probably 75 okay great so that airbnb is 25k okay got it so what do you want to have happen here because i'll tell you this trying to change the entire social norm around single versus not singles tough like super tough there's also not like a recurring revenue thing so it's like i would want to educate the entire world on a different way of single versus married only to sell them something one time is a very hard model well okay so my third top plan and i'll partner with the non-jework company for scaling it literally the company is the only jewelry black for singles the first and only jewelry black for singles.

3:20So we would have like stackable singles that you could also add, you know, like we have collections. So with the life products being the same bag from the greenery. Well, if this were Shark Tank, Candice, this is a tough one. So for me, this would be a pass. Basically, Candice is in one of these situations where she has this really big, you know, dream idea of this, I'm going to change the world of singles and dating. And then she has two other businesses that she has kind of going as well. So she has three enterprises she's pursuing, and she also doesn't have the resources to really do this. I wouldn't want to pursue three things like now.

3:54And I have a ton of resources. And so like the reason that I harp on focus so hard is that it's just so hard to make anything work that you have to put all your resources into one thing if you want to make it bigger. The getting the single rings is like I have to change the entire perception of a population. And then if I were to do that, I would want to make sure that I had some way of consistently monetizing them for an extended period of time. Now selling a physical product that's a one-time purchase on$129, to me is very tough. So like even something that's a product, like a drink or something like that, well, it's consumable.

4:23I'd be inclined to think, okay, well, if we make sure the product's good enough and people keep buying it again and again. So we're acquiring customer once, but then we get customer for life. Here, it's purely transactional. And like, do people want to stack rings? I don't know. Do people want to say and shout to the world that they're single publicly? I don't know. I mean, up to this point for zillions of years, just not having a ring has been the demonstration of that. I would be focused on the business that's the salon business and say, okay, how do we take this to$4 million a year? Or how do we take this to$1 million a year?

4:49And focus on that. That's what I would do. If you're like, what would Alex do in my situation? And I wouldn't think about the ring, just to be very candid. You have three different businesses going on. You have super limited resources, limited time, limited money. And the ring especially is going to require a ton of capital to really win. And so the way to, if you really do want to make the ring win, the way to do it would be to dramatically decrease the scope. And so what I mean by that is that you would say like, how do I win the green ring in a high school? And then how do I win in, in, or college, whatever.

5:21And then how do I win in three colleges or five colleges, right? You have to, you have to just dramatically narrow the scope so that the resources you have can get saturation because the business model that you have is a good business. It's just incredibly hard to do. It's like Facebook's business model, really good business, really hard to do, right? That's why there's only one Facebook. I see where your passion's at with it, first off, I wouldn't do it. But if I were going to do it, I would do it this way, which is I'd get way, way, way, way, way, way, way, way, way more narrow on a tiny, tiny, tiny little, a puddle of a puddle of a puddle that I could put all my time and effort into.

5:52And the key for you is that you have to have a viral coefficient, right? You have to have something that gets it shareable. Like people have to want to share it because your dollars aren't going to go that far because you don't have that many. So you have, like, it has to grow off word of mouth. If it doesn't, you have to keep fixing until it grows off word of mouth. It's the only way you're going unless you raise a ton of money. That's me being real rather than nice. Okay. Well, I'm still rooting for you to do this a lot because I think that you can much more easily just be like, okay, I'm going to buy back something to do here.

6:21But that's another call for another day. Appreciate you getting this. No, you're great. Thank you for being a sport. All right, bye. Yeah, I want to be real with you guys. I will always be taking the perspective of like, if I were to invest in this business, what would I do? If Candice were really serious about the green ring idea that she has, she has to, it's going to take a ton of money and it's going to take a ton and it has to have a huge amount of initial traction. And so I would be continually tweaking the product, tweaking the product, tweaking the product. Now, right now, the ring itself is not really the product.

6:50Like if she wants to build the app, that makes more sense. These things go together. But just selling the green ring is very much marketing. And that's very hard to do. Word of mouth, only sell a concept of marketing via word of mouth, like product, Because as soon as you're two degrees separated from the founder, the product has to do the selling more than anything else will. And maybe you can make the argument that a story will. But again, it's like you have to have such a small pond where you can actually achieve saturation where it actually becomes useful. This is Alex on the Hermosi hotline.

7:22Yeah, thanks for taking my call. You bet. Tell me about the business. What's the problem? So I run a digital marketing business where we focus a lot on hosting, website and doing some web design. And honestly, I don't know what to spend the most time to get people in. We run about 3 ,500 or so a month. I also have a full-time job with three kids. Got it. So you're making 3 ,500 a month right now off of it? On that business, yes. Okay, 3 ,500 bucks a month. Got it. How many hours are you spending on it? Roughly 20 to 30 hours a week. Okay, 20 to 30 hours a week. got it can you handle more business right now okay if you had to bring a team on and you're at$3 ,500 a month you're underpriced so that's like thing number one is that you probably need to charge more for you very how many clients do you have a 3500 oh dude but wait you're who are you is this for businesses you want an ads are you they're just like managing the period race so that they can focus on their system.

8:31So why do you need a team if it's so passive? Mostly because I don't want to handle the website design anymore. We bring on somebody for that per client basis. But they're paying 150 bucks or 100 and whatever, 200 bucks, somewhere in there,$175 a month. Yeah, some of them like between 50 and 300 bucks. Okay, so you got 20 clients paying somewhere in the neighborhood of 150, whatever, plus a month, right? and you're managing their what isn't what is managing the site actually a tail okay doesn't sound like a ton unless you have a lot of people who are asking for a lot of stuff okay so when you said team do you mean you have one guy who's doing this so three guys make it like nothing no honestly i have no aim with the meeting well we're splitting 3 500 and you're running you're running 80 gross margins on it so there's only 700 left you said there's three guys yeah so they're not making anything my point so we've got we've got three teammates fine okay there's a whole bunch of things that need to get fixed but we'll get to that in a second so how are you getting customers right now okay when you say Facebook sometimes was having okay cool so if you're not the one doing the actual website stuff what is the 20 to 30 hours a week you're spending on this business okay and that means like in person like so I mean that's that's four hours a day right I mean that's that's real time.

10:14So what are you doing every day?

10:20Okay. No, you're good. No, you're good, but you're good. You're good. Okay. I'm going to help. All right. So we have to pick one of the four promotion methods. Okay. So you can reach out to friends one-on-one. So think text, DM, email, phone call, any of those. When I say friends, I mean anybody who's in your contact list, anybody who's a subscriber to yours on any platform, anybody who's ever emailed you in your entire life that's in your Google or whatever Gmail, you know, whatever your email provider is that's ever emailed you. That is the first list you make. You export all your contacts on your phone, all the people that you that are subscribed to all your social medias, all of the contacts you have on your email platforms.

10:59And then you message all of them with an option to, well, if you want, you can work for free for a period. And then if they're happy with it, they can start panicking. I mean, that would be the first thing we do the next thing is that you need to raise the price by a ton so i mean for what you're doing i would say like minimum i charge 500 bucks a month again right now you might be talking to business owners who are just not that big either which means you just have to go after people a little bit but i mean if you just do that if you did nothing else like if you're spending 20 hours a week and you just spent four hours every day just messaging the people say hey can i work for free and then if i do a good job paying me afterwards at this rate like i think you'll probably do more than you are now that's thing one thing two i mean i can give you thing two do you want to do thing two or you want to do thing one if you just do thing one it'll still make more yeah so thing two is that i i want you to make the same like make some content but make the content in those communities all right and ideally i think if you're like you can go after local because there'll be a little bit more trust if you're down the road etc so look at the local small business groups on meta and whatnot and i would just basically put valuable posts I would put teardowns in there.

12:06Like, look at this website that we redesigned for free. Look at this website that we did. And I think people will just solicit you. And anybody who interacts with it, you can reach out and offer them free stuff. Yeah, sounds good. And then when they get on the phone, of course, you can say, hey, that's what I'll do for free. I do more stuff for money if you want. And then you can obviously upsell from there. That's it. That's all you got. Like, that's where all your attention would be going. One is we got to chase the price from$150 to$500. And number two, you can give away a free thing up front into the$500.

12:29And number three, spend the 20 hours a week doing outbound. One on one. Totally. All right. in. No, you bet. Congrats on the business. Thanks for the lead. Hello, Hermosi Hotline. Gabby, what's up? How are you? Excellent. So tell me about the business. What do you want to have happen that's so happy? Well, so I grew business solo over the course of a year to a six-figure business. Amazing. Thank you. I created so much demand that I could no longer handle it by myself. Awesome. What do you sell? So I sell what's called the Compass. It is a confidence, resilience, and emotional mastery system for youth athletes.

13:10Okay. To help them understand their emotions on the court, to help them be confident, to help them... Is this a course or is this a service? What's the delivery? It's both. So it's a physical journal. Okay. The journal was designed to kind of meet kids where they are in a gamified setting. Okay. So it's mindset, analyze, zero, and execute. And reflection over the course of every season. So the challenge with our kids these days is that they are accustomed to instant gratification. They don't know what exists. We tell them they have to work for something. And then with social media, they're very insecure.

13:47So they're always comparing themselves. We're trying to help them with that. Let's go business. What's revenue right now? Revenue right now, I'm around 10K month over month. but that went down from 30 to 40 when i hired people wait we're at revenues top okay when i'm saying revenue is your are you still doing 30 to 40 a month in total sales okay and then your profit is 10.

14:13cost go up revenue goes down no wonder okay got it what did you stop doing when you hired these people? I stopped doing all the services myself. Okay. And so as a result, word of mouth stopped because they're not as good soon. Well, they're not as good. We got to be able to speak plainly, right? They're not as good. If they were good, then this wouldn't have happened. Okay. Right. So you have people who are delivering the services. As a result, they're not doing as well. And since they're not doing as well, you're not getting referrals. Does that summarize it? Not giving referrals and not able to handle any demand in the business.

14:50So just the fact that for me as a founder, I need to be talking to customers. I need to be doing content. I need to be leading the team and organizing the team and putting together systems, which I can't do anymore because I have to teach. But before this, you were generating demand and doing three or four times the volume without them. Yes. So what am I missing? Killing myself doing it. I was killing myself doing it. And now you're getting killed. Yeah, now I'm getting killed dollars-wise. Yeah. I have a brick and mortar, and I have a visual side. So the brick and mortar is very labor-intensive.

15:22I coach volleyball. So it's hours upon hours of coaching, practice planning, talking to the parents and making sure the parents are understanding where the kids are developing and where they're not. And all of that was just, I did it for a year by myself, and then it was just, I ran myself into the ground. Like, I need people to help me do this. What are you charging for a student? We charge$1 ,750 for our 12-week course, which includes four hours of training per week over the course of 12 weeks. Okay. That's our flagship offer. Okay, and is that one-on-one? It is groups. So small group setting.

15:55We tap our classes at 20. Right now, I have, when I was doing 30 to 40 a month, I had like a half full class. So 10 girls. Is this in person? In person. So people come to you in person for the four hours per week of sessions. correct for the virginia got it okay 10 to 12 weeks okay got it and so they're paying you know just under two grand for for 48 hours call it of work that sound right yeah okay got it and then it's one on you said one on ten yeah okay so for one session right if you just did one one four hour session a week for 12 weeks you could do$70 ,500 if you just did that okay and that'd be over 12 weeks divided by three so you'd be somewhere or whatever it is six ish you know thousand dollars a month if you just did one of those per week if you did five of those a week so half of your day then you'd be making thirty thousand dollars a month and that's kind of i'm guessing where you were before this that's kind of where it was before this um we also had the digital side so what i did when i got to the year i was like oh my gosh the cost of acquisition in my body and labor is so high what if i put all my attention into the digital side because i can I can scale faster, I can do more on clients.

17:10It's not in person, so I can go wider and far. So we spent the last couple of months while I hired my employees building out a digital ecosystem where we are focusing on selling the journals. My enterprise client is volleyball clubs. So there are about 5 ,000 volleyball clubs across the nation, and their average amount of players per club is around 200. and so I have a number of clubs buying original and then we're trying to get them into the ecosystem and do a product there. So I'm like, can I replace my brick and mortar with the digital or can we run both at the same time? That's kind of where we are right now.

17:50Is this your whole business? Is this your primary thing that you do? Yeah. Okay. I mean, you have a decision you have to make, which is what business do you want to own? I mean, obviously the online is going to be significantly more scalable than the brick and mortar. The difficulty you're going to have online is acquisition. Because right now when you're local, you're very spoiled. And I don't say that as a slight. I just say like there's such embedded trust when you're down the street from somebody. Like you don't need to have multiple indoctrination sequences, you know, huge brand, lots of content, you know, video sales letters that have to go out to convince people.

18:20That's if you're selling straight to consumer. If you're selling to the enterprise client, then it's going to be more outreach, multiple touch points, etc. I would say that the more valuable business for sure is the can I get the enterprise, can I get all these teams to buy a journal and then have a subscription as a team and then that you facilitate training the team one to many that they have mandated kind of curriculum that they have to attend. Try it kind of like study law. I think that model works in scales. The question that you have to deal with right now is the bridge, right? Of how to go from where I'm at now to where I'm trying to go.

18:50Yeah, because I'm deep into the brick and mortar investment wise. Yeah. What do you mean investment? What do you mean like you put money into the location? Yeah. So besides the delivery, when you were making four times as much money, what were you doing for promotion? Mostly Instagram. So I have a pretty decent Instagram following. And so I'm just telling you, so here's the challenge. Right now in youth athletics, mindset isn't a standard. Strength and conditioning is a standard. Skill training is a standard.

19:40What percentage are not like all

19:48Yeah, but on Instagram that it's local is very interesting this is tough So you have a business that's based on you and then you quickly put other people in place who are not as good as you to do this curriculum and in so doing killed your cash flow, which makes it difficult to do anything. Right. So I would prefer we look at the calendar. If I transported my brain into your body and I had to take over the wheel today, I would be saying, OK, I did 40 ,000 a month when I was killing myself. I would like to do$20 ,000 a month, except I'll raise my price. because if you have more demand than you can handle, then price is a lever.

20:23So I'd raise my price and I'd cut my time in half. And then with the excess time, I would spend my excess time and excess cash because now I don't have any other people to start developing out the digital thing. So basically you have to put a cap on your time because your purpose was saying, I'm not going to take all the money that's on the table right now so that I can build this other thing. And so like if you really wanted to take the real hypothetical extreme, you could cut three quarters of the time you were doing before, double your price and make half the money, but you still have 75 % of your time.

20:55And so right now, I think your pricing lever is the one that you're not using because you said he had oversold demand. And so I think also the fact that you haven't recently been doing the delivery will also still give you artificial bump if you say, hey, I'm coming back in, but only for select clients at a higher price point. You actually have a decent narrative to do that now. The enterprise play with the team signing on and them getting on a very small subscription for many of those people. Many parents are accustomed to spending that kind of money. I think the whole mindset thing makes sense.

21:20All that jazzes. But you still have to get there, right? And so we have to buy you time. We have to make you money. And so raising the price and capping yourself at either 25 % of the time you're at before or 50 % can get you at least half to maybe even 100 % of the revenue you were at beforehand. And I would have a very strong look internally of like, I know I have these people, but if you don't take care of the business, they're not going to have a job for a loan anyways. So it's like, we got to take care of the business you got to put the oxygen mask on you can breathe then buy some space buy some padding and then once the enterprise starts kicking off then of course you can have the trading for them also i think that some of the best people you might take would be probably ex-athletes or even some of the older people that are graduating from those teams and offer them internships the people who like really excelled at it and then you'll be able to get some free labor or at least discounted labor that might be solid do you like that for him okay good i love this played for us congratulations on the business all right well have an awesome day and keep us posted all right you're on Ramosy hotline what's going on

22:45people on how to sell okay and it just seems like it's like a niche within niche within niche i'm wondering if maybe there's a better way to go about it really pointed question which i love i want to ask some questions about the premise first off which is you've got you've got you've got these i'll call them trainers whatever your instructors why do they all need to learn how to sell well the model we've run yeah run at a high profitability is that basically you have a guy that does it all okay okay 150 to 200 students yeah at a rate average is about 300 a month great that's great come on you know we run ads on met ups we call leads we sell trials over the phone they come in we do a tour orientation invite them to enroll and save money by everyone on the first day if it's a good fit yeah and uh getting guys that are really good on the floor to be really good at sales sometimes it's a challenge yeah yeah i mean you have identified the uh the difficulty of the model so you know it's one of those this is more of a feature not a bug type setup so it's one of these like there's a lot of different businesses where like okay well you know selling cleaning is really easy it's like finding people to clean is really hard so it's kind of one of those you got to pick like every business has shit right and this is the one that you've got now i'll tell you this what's your churn right now i don't know i'll talk about it i'm guessing it's decent oh it is okay okay so what are you compensating instructors oh revenue okay what is their ot or on target earnings what do they need per year depends on the location anywhere from 40 to almost 200.

24:24oh wow it's a big range okay yeah yeah big range okay so the entire issue you have you just need to find someone local who knows martial arts who can sell right okay so i guess the reverse question is is it easier for you to teach somebody who has martial arts how to sell or easier to find somebody who can sell to teach martial arts there's the challenge i wrestle with all the time because you know people that are good at selling they're not martial artists they're not martial artists or if they are the problem is it takes so darn long to get good you know like most of our instructors are at least second degree black belt so we're looking at five-year training yeah so then it sounds like the reverse is the now that's if you require a second degree black belt to be the computer guy right i would imagine that like for me teaching this sale i don't think should take lower than like a day or two what do you mean like this is not a hard set like the setup you're doing like you're not selling you know intangible consulting services for 250 000 you're selling a membership to a martial art studio so this should be like a six question script that you just have to tell them when do you raise your voice and when you shut up and so my guess right now is that the deficiency that you have as an entrepreneur is that you are not good at teaching sales well guys we have are really good i just how do i recruit more of them so do you just need to okay so then said differently do you just need to be able to find block so if we okay so i'm taking taking this argument if we think that if you're good at teaching sales let's just take that position then it's not trying to find martial arts people who can sell you just need to find martial arts people yes okay great we're getting narrow on the issue so how big is the uh the city that you're in um if you were like rural kentucky i'd be like I can see that might be an issue.

26:18But no, I mean, how many martial arts groups are there in Sacramento? Are there any students that you can promote? You've got 1 ,500 students or 300 times 5 or close to that. It's like there's not one who would just be willing to make$100 ,000 a year and quit their job and do karate all day. I mean, it's slight, but I'm saying they wouldn't do martial arts all day. Yeah, be more aggressive in recruiting people. Yeah, it's the constraint of the business. Anything that you're doing that's not recruiting is you not pursuing business as great. If that's the limit of the business, if that's the constraint, then every day I'm waking up and before noon, I've reached out to 100 people about whether they know somebody or they are the person who is a really good at martial arts that either lives here or is willing to move here.

27:01You can also offer something like a signing bonus for$5 ,000. There's things you can do if you want to incentivize people. But I get the impression right now. It's like, have you solicited the whole 1 ,000-person-plus base that you have, number one? Two, had you emailed your entire email list from historic, so I'm sure you have a bunch more leads that never came in because you've been running ads for a while. Ask them if they would like to be an instructor. Number three, ask them if they know anybody who would like to be an instructor. Number four, I would go at, you know, like the Sacramento, you know, martial arts community.

27:28And I would ask them, I would go to the tournaments and the meets and find people at that. Like, this is so solvable. What stops them from doing that? Nothing. Okay, great. well we got we got narrowing because i think you had a narrative around like really how to find martial arts people itself it's like okay well are you bad at teaching sales like no i'm good at teaching sales okay so we just have to find martial arts people okay great let's go find some martial arts people yeah okay yeah no you bet you bet congratulations on the on the business yes sir okay talks it hello caller number five four what's going on it's al Mike what's up man how's it go

28:1620 % software was 30 50 % to the franchise, 20 % to the media side of things, and 30 % to the software. Okay. And so we have 191 locations on the franchise side around US and Australia, but 180 are in operations now. Okay, 180 open, got it, okay. Systems available to fund around 70 to 80 million in 2025. Okay. And so back into the scale, we worked up last year, so with you, and you said really focus in economics. So Dr. Cash and I work with five different ways to solve the off-season for the franchisees. And the goal is 1 ,000 locations and to go public in six to eight years. Right now, my constraint is that 100 % I guess my question is, 100 % of our franchisees come from organic social media content on YouTube.