94. How to Build a $1.6M/Month Tech Company

0:00Starting a tech company is a dream for many, but realized by a few. Boyd Cluess, who has become the go-to cybersecurity entrepreneur for Fortune 500 companies, is one of those few. So typically in a month, we do around$1.6 million. And profit is generally north of 50%. Because some people think in order to be successful in business, I've got to have a huge following. But it's not about having a huge following. It's about monetizing the following that you do have. I wasn't failing at business. I was understanding what my market didn't want. And it was a learning activity. And so it was time for me to launch something new to understand what they did want.

0:45So I don't see failure the same in that sense. And instead of looking at the people that are successful, don't be envious, but be inquisitive to find out how they did it, because you can do it. I'm Alex Freeman, and in this week's episode of the Upflip podcast, we unravel Boyd's path from conception to success. If starting a tech company is also a dream of yours, this episode's for you. Boyd, welcome to the show. Thank you so much for joining us. Thank you so much for having me, Alex. I'm super, super excited about it. I love it. I love it. Let's start with your story. When did you start Baxter Cluess Cybersecurity and what made you decide to start your own firm?

1:25You know what? I actually started Baxter Clue with cybersecurity December of 2019, right before the world went boom. What timing. And, you know, I actually ended up starting the company because I had experienced so many challenges working as a cybersecurity consultant. And the challenge that I primarily had was, number one, I couldn't find qualified people to hire to work on my team because I was a security assessor specifically in the realm of credit card data security. And I had like all these contracts for these large corporations. I can't even say their names right now because of NDAs. And I had four open recs,$150 ,000 base salary.

2:14I could not find people to fill the job. So I decided I was going to start creating those people. I love that so much. So then I want to ask, what are some of those key steps if someone wants to start their own company, perhaps in the cybersecurity space, definitely on the tech side of things? What should they be doing to make sure that they're setting themselves up for success? That's a really good question that people ask me all the time. And my thing is I can only speak for my experience and what worked for me. And what I've seen people do is they get lured to certain industries because of the potential of how much money they can make.

2:51And so in my case, I was capitalizing on something that I was already doing. Right. So my thing is, if you're doing something, you're doing it well, then that puts you in position to start a company. But oftentimes people will just see like the shiny object, the new shiny thing, and then start create a company from there. But then you're having to learn the skill and then try to build the company at the same time. I had already been in the cybersecurity space for over a decade before I decided to start the company. What was the biggest challenge that you faced in getting the company off the ground?

3:26And obviously, you know, three months into the company existing, there was obviously a big world shift. So, I mean, feel free to answer that as part of your answer. Believe it or not, the big pandemic, the world shift was actually a blessing for my company because it forced me to get creative in ways that I hadn't before. Because primarily my mode for getting B2B clients was to speak on stage. And then from the stage, people would come talk to me naturally as a speaker. Then I would book appointments and close deals from there. But I was making this shift to a B2C company and I was using B2B tactics that weren't working.

4:04But when you are forced to take everything online, I had to learn a new method of client acquisition and that was through digital marketing. And so the biggest challenge I had was starting the company because like in the first six months of the company, I think we made like$500 because I did not understand digital marketing at all. I mean, we're going to get into some of the marketing questions a little bit later in the episode, but I do kind of want to ask about that mindset shift of going from B to B to B to C. Can you kind of describe what some of those differences were? Yeah. So it was, this was a mental barrier that was very, very tough for me because I'm used to businesses dealing with like executives, CIOs, chief information officers, CEOs that had the budgets, the right checks because we were solving problems.

4:57But now I have to switch to everyday tech professionals that want to upskill and try to convince them that this new path is the way for them and to open up your wallet and spend the money. It took a different level of psychology and I really had to sit back and reevaluate why somebody would want to do this in the first place. So it was just like completely foreign to me. And I literally failed the first six months in trying to do it. Aside from that little mindset shift that it took you a minute to kind of make, I'm curious if there were any other mistakes that you feel like you made early on with the company and what you might have learned from those missteps.

5:35Outside of the marketing failures that I had, the other thing that I felt that I teach this all the time is I built an entire online training program school that nobody wanted. Right. And so what I learned from that is sell before you build, because if the market doesn't want it, then you haven't wasted your time developing a product or solution that they don't want. And at that time, what I was offering, what I had built, people did not want it. So I wasted months of my time, time that I'll never get back. I mean, fortunately, I was able to gain the lessons and grow from it. But that's the biggest advice that I give to people that want to start new businesses is get buyers or at least people to raise their hand and say that they're interested before you ever actually create it.

6:27You got to pre-sell it. What advice do you have for doing that or at least market testing an idea before you start to take those steps? I would recommend doing it as low cost as possible. And again, when I started this process, we're in a pandemic, so I couldn't go out and shake hands and kiss babies and meet people. I had to find a way to do it digitally. So I'd recommend first looking in your local network, your local sphere of influence, whether it's LinkedIn or Facebook, and just be honest with people about what you want to do. It's like making a message and saying, hey, guys, I'm thinking about starting this new tech company where I help business owners do X, Y, Z.

7:05And I'm thinking about putting together a six week program. Would anybody be interested in this? I'm looking for beta testers right now. And if you get some feedback, you get some people that are willing to join in. Because my thing is, like, if I could get people, I don't mind giving a service away for free to be able to get the feedback to improve it. Because the last thing I want to do is charge people for something and they don't get the result that they're looking for. And so putting yourself in position to get people to raise their hand, say, yes, I'm interested, actually buy the product or use the service.

7:38And then that gives you the ability to refine it, ask questions about what did you like about this? What didn't you like about it? And then you can actually create a marketing campaign or plan and then scale it to start making money. And I think that really speaks to what you were saying earlier about how this business grew out of, you know, you'd been in the space for a decade before you kind of started the company. Did you find yourself needing to further build out your network or were you pretty reliant and to a successful degree on the network you had built in just your time in the industry?

8:11So my network has naturally grown because of the success of the company. But when I was first launching, I leveraged the people that were in my network, primarily with LinkedIn. I talk a lot about personal branding because my philosophy is people should manage their career like a business. And what successful business do you know that doesn't have sales and marketing? So LinkedIn was my billboard. I was always marketing. I was, I am always marketing what I do and who I am. So when I came out with this offer, people were not surprised. Like, who's this guy? What is he doing? They weren't surprised.

8:48So it made that transition a little easy for me. But what I found out is if you don't have a big social media presence, you can use paid ads, whether that's LinkedIn ads, Facebook, Instagram ads, YouTube ads to reach a broader audience, which is why it's important to have the right target audience and messaging dialed in so you can get to the right people so that you aren't limited by your immediate network, if that makes sense. How has the market research component of your business changed as the company's grown? So the way it started was like to this day, the people that I serve, I was them.

9:25So it was easy for me to connect with the pain that they had, the anxiety that they had in the results that they wanted. I was a low paid IT guy getting every certification imaginable, trying to get to this mythical six figure position that they said this certification would get me. And it was not working. So I could speak directly to the heart of those people where when they would see my content or my videos, I'm like, dude, it's like you're living in my head. You know exactly what I'm dealing with because I was you. So the market research now isn't so much of how to acquire new clients because that at this point is an automatic thing.

10:03It's more about how do we dial into the psychology to get them better results. If you've listened to Upflip long enough, you may have noticed a common theme between successful entrepreneurs. Digital marketing. Almost every guest talks about it. It's the engine that drives growth, the spark that ignites success. So if you're looking to up your digital marketing game, we highly recommend our friends at the Digital Marketing Podcast. These guys are the real deal, offering insights and strategies that are both practical and powerful. It's like having a backstage pass to the digital world, and trust me, you don't want to miss out.

10:37Search for the Digital Marketing Podcast or click the link in our show notes. Happy listening. Boyd, I want to ask a little bit more about the actual launch of the business. Now, I hope I have this right. You worked with a business coach as you launched the business. Is that right? No, I wish I had. That came later down the line. Okay, then great. Then I'd love to hear what you later learned from the business coach and why maybe you would recommend it to somebody who's launching a business. Oh, man. Yeah. So the beautiful thing about having a business coach, number one, having a business coach that has been successful in this space that you aspire, not just someone on the Internet that say they're a business coach, changed the game completely for me because my marketing was messed up, but I didn't know it was the marketing.

11:25What business coaches are good at is helping you identify the problem so you can actually address it. Because most people, they stay on the surface and they end up addressing symptoms and the problem never changes so they don't see different results. And so with me having a marketing problem, again, I thought it was a sales problem. I thought it was a Facebook ad problem. It wasn't that my message was reaching the people, but it wasn't the right message. So I ended up working with a business coach, shout out to my man, Joel Orway, and he introduced me to something that he offers, which is called the Power Offer.

12:01It is a very direct, irresistible craft offer that invokes a yes or no response from people. Because a lot of times when people go to sell products, they just immediately try to hit you with the pitch. Do you want to buy this? You should buy this. Are you interested in this service? Blah, blah, blah. And it's just like noise. But this power offer structure helped me deliver a target message to people where they were actually responding. Yes, I want this service. And that was a game changer for me to start actually getting my client acquisition process. If an entrepreneur is listening to this and says, oh, I should get a business coach.

12:37What advice do you have for finding the right coach for somebody? My advice would be to check out their track record. Depending on what kind of business you're in or that you would like to get in, all you have to do is go to Instagram, Facebook or just Google business coaches in that space. And if you click on one of those things, you will see ads from all the Googles. Right. But it's important to select the person that's right for you. A personality standpoint, a faith, believability standpoint, their best interest is serving you and not money, because there are some coaches out there that will take your money.

13:14or give you advice to just capitalize on people instead of actually serving them at the highest level. My thing is I like to work with people that share the same values as I do because that just makes the relationship a lot better. So I would definitely dig in to what this person's track record is before actually just signing up with a business coach. And also you gotta be prepared to invest because if somebody's gonna help you grow a business, their time is worth being compensated. How do you figure out your own pricing for the products? How do you realize that you're at the right amount to charge a customer?

13:50It's simple. People buy it. That makes sense. So there's really logic behind this. So number one, I like to see what the market is doing. And then I like to see what is like my competitive advantage. What can I do better? So like we had a pretty low price when I first started Baxter Clueless. We were enrolling so many students that it was starting to overwhelm the company. And because we were selling so many that told me that my price was way too low. So then we raised the price. We even got to a point where the price was too high because the inflow started to slow down. So now we have a sweet spot right now.

14:28So I like to make decisions based on data. I love analytics, man. So it just takes the emotion out of everything. It really comes down to doing data analysis and seeing what's going on inside of the industry. And then also, how do you feel about your brand? Because you could buy a Toyota that may cost you$30 ,000 or you could buy a Ferrari. It's like 300. They're both cars, but one has a brand and an advantage that allows them to command that. So it's ultimately how do you present your brand and is it commensurate with the price that you want to charge? What are some of those key figures that you're keeping an eye on as you watch the data for the company?

15:11So in terms of key figures, I like to look at really the conversion rate of my sales guys, which is always important. Conversion rate in comparison to what the price is and then student results in comparison to the enrollment rate. Those are two things that I monitor because it really just hurts my heart when people enroll at BC and they don't finish and they don't get the result. I do not like it. So I have invested significant resources and staff, extra tools and resources to ensure that our clients have the best possible advantage to achieve their desired career goals. Why is that so important to you?

15:56I guess both from a personal perspective and from a business perspective, why is it so important to make sure that people are finding success with the program? There's a few reasons behind it. Number one, the company has my name on it, right? So Baxter is my wife's mate name. Cluess is my last name. And anything that's associated with me is going to line up with my company's core values, which is integrity. We're a Christian organization. And so we're going to make sure that we're serving people at the highest level possible. The other thing is, if we're not serving our clients at the highest level and they're not getting results, then more people are not going to come.

16:38I don't deserve their money. So I think about my time at the University of North Texas. I was there for about a year and a half. I ran up a bill of$40 ,000 with no degree to show for it. And that stung a lot. And I don't want people to have that negative association with me and my company because they made a significant investment and they didn't have anything to show for it. I'm sure some of what you just spoke about is going to factor into the answer to this next question, which are, what would you say have been some of the key drivers of the growth of the company? The key drivers for the growth, number one, our clients are like the biggest sales team possible.

17:17When you have people that are doubling, tripling, and quadrupling their income, it's hard to for them to keep silent about where they learn the skills and the ability to do that. And number two, I like to tell my other people in my business masterminds, I'm quite compelling on camera. Great social media presence, PR and constant marketing has led to the awareness of people knowing what we do and how we're helping people. And the niche that we're in is so specialized and me being an industry leader in the payment security space, it's a blue ocean business venture for me. What are the typical revenues in a month and what did the profit margins look like on that?

17:58So typically in a month, we do around$1.6 million and profit is generally north of 50%. And what are some of those main ongoing expenses that somebody should be considering if they want to get into kind of the same business that you're in? So number one at the top of the list, it is staff. I have about 50 employees, success advisors that walk through the program with our clients to ensure that they are finishing the content and the program, the online material. I have a talent development division, which is our intern programs. I have employees there, customer service employees, operation teams and executive team.

18:44That is a significant portion of the budget, but also advertising. Because if people were to look at me, I don't have a large social media following. I don't because some people think in order to be successful in business, I got to have a huge following. But it's not about having a huge following. It's about monetizing the following that you do have. And since I don't have a huge social media presence, I use social media advertising, Facebook, Instagram, and YouTube. And I spend anywhere from$25 ,000 to$50 ,000 a month on advertising. So what's the number one piece of advice that you could offer to somebody who wants to scale a tech company to a million dollars or more in monthly revenue?

19:25The biggest thing that I would offer them, and it's like three part. Number one, believe that you actually can. Number two, find a mentor that's done what you're looking to do and prepare to invest. And number three, get comfortable being uncomfortable. I want to ask a little bit about customer service as well, because you made some mention of your customer support team, of your student support team. But in this field, in this space, especially, you know, even just education broadly, trust is such a crucial thing within the tech space, within cybersecurity, within education. How have you gone about building customer trust?

20:04That is actually something that's done before the client acquisition process. Because like the business motto is people buy from those that they know, like and trust. So I get people to know me through my social media presence, my vulnerability, talking about the challenges that I had in my career, my upbringing, my family. Generally, they like me because of my personality, but then they trust me not because of what I say, but what reputable sources are saying about me. And so I'm on TV interviews, Forbes magazine, Forbes books. All those things add to the credibility because you never know. I was telling one of my business friends, I was like, let's be real about this digital marketing thing.

20:49We're expecting people on the other end of the computer to spend thousands of dollars with some random guy they met on the internet. If you don't have a strong brand that shows you are a trustworthy individual, that's going to be extremely difficult. So I make it a point to put myself in position that shows, number one, I'm an authority in the space, but I am actually who I say I am, a decent human being. So what does that journey look like when somebody finds you on the internet? They say, hey, maybe this is the guy. What is the customer journey from finding out about you, getting through the funnel, and finally getting onboarded?

21:28So we've got a couple entry points. If it's on YouTube, I usually do a call to action on my YouTube channel. They click the link. They go to my opt-in page. They see how we've helped transform the lives of more than 500 people. Watch this eight, 10-minute video and then they apply to join the academy. Or if they found me on LinkedIn or social media, they send me a message. I have a conversation with them and the private message about where they're located, what their career goals are. And then based on what those goals are in their geo location, then I would send them a link to have a conversation with someone on my team so that we can ensure that they are indeed right for our academy because we don't work with everybody.

22:12How do you define excellent customer service? The way that I define excellent customer service would be, it's actually hard to articulate that in words because most of the time when I'm talking about excellent customer service, I know what I don't want, which is like bad reviews, people being upset. So I guess the inverse of that, excellent customer service to me, which I know what it is now, it's where our clients actually feel like family. I love that. This is going to bring us to a section of the show that we call our Fan Blitz questions. These questions come from our YouTube community. Listeners, you can go join that community by going to youtube.com slash upflip and pose questions to future podcast guests.

22:54Boyd, I've got six questions here. We're going to try and do these in about 90 seconds. Are you ready? Let's go. All right. First one here from Peter Hero. Did you have any self-imposed beliefs or fears that held you back from making your first step? And if so, how did you overcome them? Absolutely. And I still deal with that to this day. Fortunately for me, my brother happens to be a mindset coach. In my life, I was always the last pick when it came to sports, bench rider and basketball. I was never good at things. So I'm like, this is going to carry over to adulthood and business. I'm not going to be good at this.

23:33But working with someone that helped me change those negative thoughts that I had about myself to positive ones was the game changer for me. And this is something that has to happen every single day. H.S. wants to know, how do you find the right people to work with to start a tech company? And how many people did you start your company with? Ooh, so I started the company with just me. And then six months in, I was like, my wife, please help me because she's a genius. So she decided to help me. But my thing is the way I find the right people is generally speaking, they're already in your network.

24:07My first, I don't know, 10, 15 employees actually came from my church because I had already built a working relationship with them because I work in the media department there. So I was able to work alongside these people for years and observe them knowing that their skill sets would be assets to my company. And so then I brought them in. Scott would like to know if you could talk about insurance costs in the event of a security event. Oh, man, that is expensive. So if you're going to start a tech company, you definitely have to have your errors and omission insurance. Definitely. And, you know, depending on the type of policy you get, the more coverage you have, meaning the more things that it covers and the amount that you are covered, it could cost anywhere from a thousand dollars a year up to like, I don't know, outrageous costs.

24:58But some contracts that you may want to get with different companies will require a certain level of insurance. It's important to find out those things before you try to get that first agreement. So that doesn't create a bottleneck for you. Hugo is asking if it's a good idea to open a tech company without a degree in the field. Easy. Yes, I don't have one. Next question. There we go. That one was super easy. Both Fosley Raman and Mary Eyes want to know about if a doctor could start a company like yours. You know what? I don't have the expertise from a medical perspective because like we help people get high paying tech jobs without certifications, but I know doctors are governed differently.

25:40So if there's a specialty that a doctor can achieve that doesn't require a specific type of certification, but if it's skills based, then absolutely. And 1755 Cat would like to know about licenses and protections of rights since there are so many tech companies? And how do you implement that with no office and people management? Oh, man, that is a challenge. It definitely is a challenge. So number one, I have great HR team. And number two, I have a great wealth management team that manages our insurance assets. It's what they call a family office. And so it's important to get people that are experts at those specific things because one person can't know everything.

26:24And me trying to be an expert on insurance and rights and all that stuff, I would never have time to run my company. So fortunately, they procure those resources for me and then give me the recommendation on which option to go with. Those were our FanBlitz questions. And listeners, if you've been listening to the Upflip podcast for some time and you like what you're hearing every week, help other aspiring entrepreneurs discover our show by leaving a rating and review on Apple Podcasts or rating our show in the Spotify app. Hit pause and do it quickly now. Boyd, I want to kind of ask you a few more of those marketing type questions and think more towards currently because we've sort of covered the beginnings of your sales and marketing.