Dan Martell - Episode #6 Market Place 3.0 w⧸ Mike Brcic, founder sacredrides.com

00:00:00.000 So a super fun conversation with Mike.

00:00:02.500 Sakerrides.com built a new software platform

00:00:05.500 called Getaways and really we just kind of

00:00:08.240 unpack kind of the business model,

00:00:10.100 how they got to where they've been.

00:00:11.480 They've had a business they've been doing

00:00:12.840 for a dozen years, extremely successful in their space,

00:00:15.760 built some product, built some education support software,

00:00:18.520 building an affiliate model, not a franchise,

00:00:21.420 to really take this to the next level and scale it up

00:00:23.440 and we talked about how do you scale up

00:00:25.860 customer acquisition, essentially driving demand

00:00:28.940 for an affiliate for a company that you're supporting.

00:00:32.220 We also talk about how do you activate

00:00:34.240 and retain those customers,

00:00:35.760 and it's primarily focused in the first 100 days.

00:00:38.300 A little shout out to my friend Joey Coleman.

00:00:40.720 And then we wrap it up by talking about

00:00:44.000 the financial model itself,

00:00:45.820 and how do you create economic value

00:00:48.580 for a client that's paying you on a monthly basis

00:00:52.080 with a reoccurring annual revenue model

00:00:54.800 so that they feel super compelled,

00:00:57.380 excited to promote you and drive a lot of demand

00:00:59.940 for this new platform that you're building.

00:01:01.620 I think you're gonna love it.

00:01:02.560 Mike is an incredible dude, super kind,

00:01:04.920 open with his business,

00:01:08.500 and just really receptive to the advice.

00:01:11.520 What are we talking about today?

00:01:13.500 So we talked about it briefly before,

00:01:16.000 but there's like little side startup I've got.

00:01:17.740 Yeah, I keep seeing the side hustle

00:01:19.540 on the Facebook comments mentioned.

00:01:21.760 Well, I've got a few side hustles

00:01:23.420 and I'm trying to actually get rid of the main hustle

00:01:26.000 so I can focus on side hustles.

00:01:27.680 Yep.

00:01:28.520 So the main company is this travel company.

00:01:31.040 We do mountain bike trips all over the world.

00:01:32.660 And it's like a big business, like you guys.

00:01:34.900 It's a pretty big business.

00:01:35.820 Yeah, it's not like you running.

00:01:37.780 No, I'm not even, I'm not even involved in it.

00:01:39.500 Yeah, you have guys all over the world

00:01:41.160 that are running mountain biking trips for people.

00:01:43.980 Right.

00:01:44.800 Awesome.

00:01:45.640 So we've got this side thing,

00:01:46.640 which is basically kind of like a bit of a SaaS model,

00:01:50.240 kind of a platform.

00:01:51.060 So we've spent the last three years building at our tent.

00:01:54.140 And what's that called?

00:01:54.980 It's called Getaways, the Sacred Rides Getaways model.

00:01:57.680 Okay, Sacred Rides is the mountain biking tour travel company,

00:02:01.020 and then Getaways is the platform.

00:02:02.880 The platform model.

00:02:03.680 Cool.

00:02:04.520 And so the idea is we took all our tech infrastructure,

00:02:07.340 our website, our booking system, our operation system,

00:02:09.800 all the stuff that powers what we do,

00:02:12.080 and we packaged it up with training manuals,

00:02:14.420 marketing materials, all that kind of stuff.

00:02:15.820 So it's a little bit of a platform.

00:02:17.100 It's a little bit of a franchise kind of thing.

00:02:19.080 We're staying totally away from the word franchise

00:02:20.880 because you probably know that.

00:02:22.260 You just said it, man.

00:02:23.360 Yeah.

00:02:23.620 I can't unhear it.

00:02:24.460 yeah yeah delete yeah yeah it's kind of like i'm staying away from the word franchise i was like

00:02:30.980 but you just said it yeah yeah okay it's so anyway that that wording is nowhere in anything

00:02:35.780 what we do we're calling it an affiliate model so you basically sign up and we've been playing

00:02:40.280 around with pricing you get you get access to this platform you can post your trips we limit

00:02:46.700 it to one or two day trips because you can't break shit too much yeah uh with that and it's 0.66

00:02:51.720 in your local area. So essentially if I have a tour company, is it a tour, any tour company can

00:02:56.960 use this? Well, a tour company could use it, but it's mainly just like, you know, you're a guy who

00:03:02.980 lives in Moab and you've been mountain biking there your whole day. And I want to run my own

00:03:06.600 tours. And you get to run it under the Sacred Rides brand. Okay. So I actually, and that's why

00:03:11.460 it's an affiliate because essentially I'm using your brand that comes with a certain level of

00:03:15.700 awareness in the marketplace. Right. And you also provide me the infrastructure from a technology

00:03:20.860 your point of view, do you provide any training on running the business or expectations for

00:03:25.580 level of quality or service? Yeah, yes and yes. So the training part is we built out a big support

00:03:31.820 center. Everything from how to operate your trips. We have an online training program. It's seven

00:03:37.480 modules. You take it at your own pace. And then how to operate great trips, how to market yourself,

00:03:43.460 how to sell, all that kind of stuff. So it's pretty, and then we've automated the crap out

00:03:48.580 of it you basically sign up you get an email a week for 10 weeks that walks you through the

00:03:53.240 whole thing the support center is all there everything's there and then it's and so that's

00:03:59.240 the basic level of training and then the expectation is this is we're we've yet to roll this part out

00:04:04.500 but we're sort of following the CrossFit model a little bit yeah how they have their training

00:04:08.380 big fan the level one level two they just can't go a day without mentioning CrossFit or trying

00:04:12.620 recruit somebody awesome awesome model yeah uh so basically the idea is you sign up and all the

00:04:20.420 trainings there but within a year you've got to attend one of these in-person trainings cool and

00:04:24.440 that's just to maintain the certification or just to get it well that's kind of the next level because

00:04:29.320 all the i mean really you know it's not rocket science yeah taking somebody on your local trails

00:04:34.120 for a day yeah you gotta you gotta have your first aid you gotta have permits all that kind of stuff

00:04:37.660 but there's nuances I mean you can you know if you know your local trails you

00:04:42.580 can take people you can give them a great experience but if you want to you

00:04:45.940 know really run a great business yeah and you want to like a level two kind of

00:04:49.840 thing yeah so it's kind of like we want it we want people to be there in person

00:04:52.600 it's a three-day training it's it's guiding it's how to run so I guess and

00:04:56.800 we're gonna get there Mike but just help just because I always it helps me to

00:04:59.740 understand where we're gonna end up where what what is the area of the

00:05:02.860 business that you'd like feedback on so the well the three the three are one

00:05:10.340 customer acquisition yeah second one is activation yeah so what we're

00:05:15.940 experiencing is my language man we have a handful of people who are like really

00:05:20.420 active and kicking butt and then a big chunk of people yeah not doing yeah

00:05:24.220 much and we have some people who are not doing anything perfect it's a whole

00:05:27.140 pile of money. And then the third one is just around pricing. Either just like are we missing

00:05:34.380 the mark with our pricing or maybe there's a different pricing model or something like that.

00:05:37.360 Cool. Talk to me about where you guys are at today. Like how many people have bought into this

00:05:43.080 program? What are some of the current numbers in regards to people that are active? Like what are

00:05:47.460 we working with? So when we launched out of the gate, this was about a year ago, maybe 13 months

00:05:53.020 ago. We set it at a, probably a pricing mistake, too high of a price point, $3,500 a year or $3.50

00:06:01.180 a month. And we knocked it and then we had a discount and we knocked it down to $2,500. We

00:06:07.540 got about 20 people on board with that. Okay, cool. And then we closed it off. That's pretty

00:06:11.180 great. I mean, 20 people, $2,500. I thought that was pretty good market validation. And we got

00:06:15.380 about 20 people on board. What was the pitch though? This is interesting. What did you sell

00:06:20.080 them was it like a business in a box essentially right and so I mean that was the practical part

00:06:25.800 of it what we were trying to sell was a dream right yeah this is uh and you know our and what

00:06:30.640 I guess that so that's this is good so that's what you sold and if you fast forward five years what

00:06:37.400 do you want to be selling so do you want to be selling the software do you want to be selling

00:06:43.960 the whole affiliate model well the software really is the affiliate model I mean it's part of it we

00:06:49.860 provide some support along the way but we're trying we're trying to and you

00:06:54.900 know everything we've learned from 20 years in the business is in that support

00:06:58.620 yeah and in the emails and all that kind of stuff but we're trying to like the

00:07:02.220 Facebook group is where they feel like they're helping each other yeah we're

00:07:05.400 trying to because they're they're learning more on the ground about you

00:07:08.580 know yeah we know what a customer looks like for our you know ten day five

00:07:12.300 thousand dollar trips yeah it's different than a mom on their two kids

00:07:16.260 going on a one day trip.

00:07:17.300 A couple hundred bucks, yeah.

00:07:18.740 So where we'd like to end up.

00:07:20.500 And that's really the split

00:07:21.400 in getaway versus sacred rides.

00:07:23.360 Sacred rides is a multi-thousand dollar investment.

00:07:26.660 Our trip is $4,000.

00:07:28.380 Yeah, it's like the thing they do once a year

00:07:30.280 with their friends kind of thing.

00:07:32.160 And what you're talking about is local providers

00:07:34.240 providing like a Toronto tour or a New York tour

00:07:37.640 or probably not, like more in the mountains.

00:07:40.860 And so like the average price point

00:07:42.480 for those kind of customer transactions would be what?

00:07:44.680 it'd be well for a one-day trip it's about 120 by 150 depending on where you

00:07:50.860 got obviously you know a guidance so they're gonna sell a lot of that is

00:07:54.880 gonna be charging a lot more than somebody in Guatemala yeah and then the

00:07:58.720 two-day packages so we're encouraging people to put together two-day packages

00:08:02.620 because then you can package in lodging meals all kinds of other stuff yeah it's

00:08:06.760 called when we when we were selling it we don't sell weekends anymore but we

00:08:10.620 you were selling them for anywhere from $600 to $900.

00:08:13.780 For sure.

00:08:14.620 So you get five people on a weekend,

00:08:18.120 and boom, you make pretty good money up there.

00:08:20.160 So where we'd like to get to is,

00:08:22.780 eventually, if we can get up to,

00:08:25.340 and so it's a recurring revenue model.

00:08:28.160 So they sign an agreement for five years.

00:08:31.280 They have the option to back out every year

00:08:33.260 on their anniversary, on their one-year anniversary.

00:08:36.640 But if we can do a good job

00:08:39.180 and keep people around for five years

00:08:40.620 and then they renew or whatever, it's good money.

00:08:43.500 So if we could get up to 500 affiliates around the world,

00:08:46.860 we can have pretty good coverage around the globe.

00:08:49.900 Not only does that generate a lot of revenue,

00:08:51.760 but then if we're doing a good job of that,

00:08:53.740 those people are then hopefully coming back

00:08:56.040 for the longer trips, the $4,000 trips, right?

00:08:58.220 Because they're in our marketing database,

00:08:59.700 they're having a good experience.

00:09:01.260 But then also, they basically get their own website,

00:09:04.840 you know, moab.sacredrodes.com, something like that.

00:09:07.580 Any trips they put up on that site

00:09:09.240 show up on getaways.sacredrides,

00:09:11.460 and there's a map of the world kind of Airbnb,

00:09:14.400 you can browse at different criteria, stuff like that.

00:09:17.260 So the issue we're having is that we want to try

00:09:21.000 and drive traffic to that main website

00:09:22.640 and bring them leads and customers,

00:09:24.040 but we don't have classic platform kind of chicken and egg.

00:09:28.220 Yeah, because it's kind of a marketplace.

00:09:30.120 Yeah, it's a bit of a marketplace.

00:09:31.580 What's the challenge?

00:09:32.500 Is it that when you get them a lead

00:09:34.060 they don't follow up the way they're supposed to,

00:09:35.620 so they're not closing to be able to justify the ROI on the cost?

00:09:39.060 Well, we're a little bit.

00:09:42.940 I mean, more is their page not converting?

00:09:45.240 We're just having trouble getting them leave

00:09:47.760 because we've only got about 40 affiliates so far.

00:09:49.940 And so if you look at that world map,

00:09:51.560 we've got a bunch of people in North America,

00:09:53.240 and then the rest of the world, you know,

00:09:54.280 we've got about 15 scattered around the world,

00:09:55.920 but it's kind of sparse.

00:09:56.780 But are you running geo-targeted ads?

00:09:59.620 We are.

00:10:00.260 Okay.

00:10:00.720 Yeah, we're running ads that's it,

00:10:02.320 but what we've found is we're just not getting conversion.

00:10:04.400 were you ever running paid ads for your primary sacred rides uh yeah we're still doing that is

00:10:10.160 that profitable like the are the return on ad spend we're still trying to figure that out see

00:10:15.440 i mean well that i mean obviously that'd be the so it's kind of like when you and we'll so you

00:10:19.900 want to talk about acquisition retention and then just pricing model and structure so like when i

00:10:25.280 think of acquisition um in any business the key is to figure out who's the and i always look at

00:10:31.860 two kind of like levels. Highest value, easiest to work with, fastest to sell, highest value,

00:10:39.880 right? And this is true for all SaaS businesses. They come to me and they're like, okay, I want

00:10:44.120 to fix my model. I say, okay, you got a thousand customers. Let's draw kind of a grid and say,

00:10:49.280 okay, well, who are the customers that generate the most lifetime value and are the easiest to

00:10:53.580 close? And truthfully, if we're going to build a business, let's focus on that customer.

00:10:58.340 And then what we want to do is once we have that, then we want to figure out what's the core value or the package or the solution or the service or the plan that that type of customer buys and front load that in the sales and marketing activities.

00:11:11.780 So it sounds like you really understand the kind of $3,000, $4,000, $5,000 customer and it's better, it's easier to get an ROAS, a return on ad spend on that customer because you can spend more, right?

00:11:22.780 And you have more gross margin to play with.

00:11:24.360 It's a lot tougher the smaller you go.

00:11:26.340 That's why there's certain e-commerce products.

00:11:28.060 So the other thing is like we,

00:11:30.020 any bookings that come through their own site,

00:11:31.920 we'd get 10% of that.

00:11:33.020 Yeah.

00:11:33.300 If they come through our site,

00:11:35.400 that map of the world kind of thing,

00:11:36.840 we get 15%,

00:11:37.640 which buys us a little bit more margin

00:11:39.100 to spend money to bring them leads.

00:11:41.160 But we're just,

00:11:41.860 we're not seeing the return.

00:11:42.900 I still can't see on a two,

00:11:44.920 like what's the average purchase price?

00:11:46.420 So you're doing the transaction through your website?

00:11:48.180 Yeah.

00:11:48.520 So if you average out like the one day trips

00:11:50.140 and the two day trips,

00:11:50.960 the average spend is about $250, right?

00:11:53.240 Okay.

00:11:53.420 So you multiply that by 15%,

00:11:54.860 you've got 37.50, something like that.

00:11:57.560 So it's, you know, in terms of Facebook, that's tight.

00:11:59.740 And that's just for you to liquidate the lead

00:12:03.300 and not make any gross margin on that,

00:12:05.240 meaning that you've got to build out

00:12:06.400 a marketing and ads team just to return.

00:12:08.860 Yeah, well, you know, I mean,

00:12:10.900 we don't necessarily have to make money on that.

00:12:12.780 Because your bet is on the back end.

00:12:14.540 We're making money on the annual subscription

00:12:17.100 from the affiliate.

00:12:18.200 Got it.

00:12:18.600 I mean, that's pure margin.

00:12:20.160 Like, the tech is all built out.

00:12:22.000 We need to provide very little support.

00:12:23.860 It's like, you know, the margins are sky high.

00:12:26.280 We need to be able to drive enough leads

00:12:30.260 and customers to the affiliate

00:12:31.700 so that they stick around.

00:12:32.860 We don't have high churn.

00:12:34.120 Got it.

00:12:34.740 And then if they're sticking around and they're happy,

00:12:37.420 then it's easier to bring on new affiliates.

00:12:39.140 So it's interesting because there's a few ways to dissect it.

00:12:43.000 One of the ways I look at marketplaces

00:12:44.600 is either I set the price or you set the price.

00:12:49.020 Okay, and I call that the kind of the marketplace 3.0

00:12:50.980 versus 2.0.

00:12:51.720 2.0, 1.0 was let's build a directory, it's a bazaar, right?

00:12:57.000 This is Craigslist and really Kijiji.

00:12:59.920 Then there was like 2.0 which said,

00:13:01.480 let's take a piece off of that marketplace

00:13:04.000 and build some kind of construct around it

00:13:05.880 to create consistency and liquidity for that transaction.

00:13:09.280 Then we're talking thumbtack for services,

00:13:11.360 we're talking Airbnb for accommodation.

00:13:14.340 There's a ton of them that you can look at,

00:13:15.740 like job sites, et cetera.

00:13:18.260 And then 3.0 is really this new generation of saying,

00:13:21.240 well, we don't want to have to own or have any of the supply side.

00:13:24.800 We want a marketplace in the sense that we want to own demand,

00:13:28.060 but then we need to set the price so that we can set liquidity

00:13:31.160 and be able to reinvest in the business.

00:13:33.560 And I feel like the model you're using is really tough

00:13:37.260 because typically in a 2.0,

00:13:39.220 the only way it works is if the supply side actually drives demand.

00:13:43.340 Yeah.

00:13:44.060 You know what I'm saying?

00:13:44.600 Yeah, totally.

00:13:45.080 So how does that happen?

00:13:46.840 Well, SEO, so meaning that you create profiles

00:13:49.640 and those profiles rank.

00:13:51.380 So the more supply that you have in a city

00:13:52.920 when somebody searches city mountain biking,

00:13:55.060 you know, Toronto mountain biking rides,

00:13:56.440 you guys are organically going to rank,

00:13:58.160 especially if you have dozens of providers in that city.

00:14:02.100 So that's one.

00:14:03.420 Two is if the supply side can produce content.

00:14:07.360 This is what we did at Clarity.

00:14:08.260 So the experts at Clarity produce content for our blog.

00:14:11.380 That's what we're trying to do.

00:14:12.860 Yeah, so that's a big part.

00:14:14.160 So we're encouraging, but, you know,

00:14:14.820 some people are awesome at it

00:14:16.260 and some people just aren't doing anything.

00:14:17.960 And that's part of the editorial process.

00:14:20.300 And I will say, true for us too,

00:14:22.440 there were some experts that actually

00:14:23.540 were really capable communicators

00:14:25.740 and other ones that probably shouldn't even be on Clarity

00:14:27.480 and it was actually a really good test for us.

00:14:30.780 So supply-driven demand

00:14:33.180 and then the other one is just sharing profiles.

00:14:35.400 And ideally, and this is where it's interesting

00:14:37.600 with franchise models and affiliate models,

00:14:39.640 is they'll give you the instructions to run.

00:14:41.980 I can't imagine the amount of people

00:14:44.540 that waste marketing dollars

00:14:47.480 sending people to their Facebook page

00:14:49.520 that essentially allows Facebook to grow

00:14:52.100 its argument that every business

00:14:53.580 should have a Facebook page

00:14:54.540 because the Facebook business

00:14:56.480 or the business runs ads to their Facebook page

00:14:59.080 that aren't measured, aren't trackable.

00:15:02.180 And we're talking like hundreds of dollars a month

00:15:04.020 times millions of businesses

00:15:06.380 that just blindly run.

00:15:08.780 So, but as a business,

00:15:10.920 like I get why Facebook would do that

00:15:12.520 and why they throw around $50 credits all the time

00:15:14.600 because that's their activation

00:15:15.640 and get them on the,

00:15:16.480 and they don't really know if it's working or not they see their likes going up so they don't stop

00:15:20.320 because there's this fear if I stop it stops I can't really attribute what business I'm getting

00:15:24.220 from Facebook but I know that if I don't do it my business so like so that that's another thing

00:15:29.280 that needs to be considered at the end of the day like I look at every business through an economic

00:15:33.340 model that the investment on ad spend needs to provide some kind of ROI and I know that you

00:15:41.400 sold that. It sounds like that's kind of like, is it something that you committed to generating

00:15:46.480 X amount of leads per month or just something that you'd love to provide as a value?

00:15:50.040 We've committed nothing. We've been very upfront from the get-go and we said,

00:15:54.480 hey, listen, we're providing you with a platform. We're giving you all the tools,

00:15:58.560 the training you need to be able to run your own guiding business, mountain bike guiding business

00:16:01.900 in your local area. We're going to try and send you leads, but don't expect anything from us.

00:16:06.480 You've got to get out there. You've got to put up some posters, develop some relationships with

00:16:11.160 to your local tourism board, whatever.

00:16:12.940 You gotta get out there, hustle, you can't sit back.

00:16:14.920 And the other thing is like, this is a bit different

00:16:16.500 than Airbnb because they get exclusive access to an area.

00:16:20.440 Okay, so they're buying a territory or a region.

00:16:22.680 They're buying a territory.

00:16:23.840 Got it.

00:16:24.680 And like, we thought about doing an open model

00:16:27.080 and there's actually an app called MTB Guru

00:16:29.200 that's kind of doing that.

00:16:30.720 But realistically, there isn't room

00:16:32.440 for like 10 different people in Whistler,

00:16:34.520 even Whistler, a popular place like that,

00:16:36.320 to be making a living, there's not enough demand.

00:16:38.560 And, you know, what I think is maybe the strength of this is they get their own website, unlike just a listing, right?

00:16:45.680 Like, we have an Airbnb listing.

00:16:47.000 I don't go putting up posters with our Airbnb URL on them, right?

00:16:50.680 Yeah.

00:16:51.060 And Airbnb, at scale now, has built enough of their marketing engine to drive demand.

00:16:56.420 Totally.

00:16:56.600 They've built the brand in the market.

00:16:58.320 People default go into Airbnb.

00:16:59.880 I'm staying in Airbnb tonight.

00:17:01.380 Yeah.

00:17:01.580 Like, that's – but it took six years, like, to get to that level.

00:17:05.600 A ton of funding, but I mean, a lot of it was just creative marketing, right?

00:17:09.700 It's been written about, because I remember meeting Joe and Brian in the early days,

00:17:13.900 thought it was the craziest idea in the world.

00:17:15.520 I thought the government should round up all their customers because any,

00:17:18.780 this is back in the day when it was like a stranger in your house.

00:17:21.560 Like, you were staying there, right?

00:17:23.440 Like, how many people have stayed in your Airbnb and you guys were in the house?

00:17:27.120 Never?

00:17:27.980 Exactly, because that's just nuts.

00:17:29.180 um but i guess here's the thing about the model is uh if and back to like focusing on one core

00:17:37.120 customer is i would really focus on building making it work for one customer then all customers

00:17:43.200 to then find that bright spot to then amplify and the same would be true for like how you know we

00:17:48.860 talk let's move on to uh activation i always ask people like tell me about the customers that are

00:17:54.260 rocking right now in your product and then let's reverse engineer what they like what happens is

00:17:58.540 there's things that those people experience

00:18:00.340 that may be somebody else.

00:18:01.280 There's something that's true about them

00:18:02.740 that may not be true for other customers

00:18:04.020 that if you just made true would actually work.

00:18:07.020 So I'm a big fan of actually,

00:18:08.420 instead of, so people talk about churn,

00:18:10.480 I'm like, okay, we could focus on the people

00:18:12.140 that didn't stick around

00:18:13.480 or say who are the ones that are loving the product

00:18:16.020 and say what's true about their experience

00:18:17.940 when they first signed up.

00:18:18.640 The beauty of software

00:18:19.480 is we can actually deconstruct their click stream

00:18:21.880 and say here's what their first experience,

00:18:24.660 this is what they all did.

00:18:25.520 Like grab 10 of them and say like,

00:18:26.920 this is the 80-20 of their first experience in the product.

00:18:30.640 And here's on average when they came back.

00:18:32.780 And here's what they did then.

00:18:33.820 And you just kind of deconstruct that and say,

00:18:35.440 okay, that's probably the right experience.

00:18:37.780 We got lucky that those people figured that stuff out.

00:18:40.260 If we front-loaded that in the onboarding

00:18:42.300 and front-loaded that in our email activation sequence

00:18:44.720 and front-loaded that in our customer success team

00:18:47.380 when we reach out to them and talk to them.

00:18:49.880 Awesome.

00:18:50.660 Right?

00:18:51.280 It's so funny how people want to talk so much about

00:18:53.440 kind of like how do we fix the people that laugh

00:18:55.920 instead of saying, well, why don't we get more,

00:18:57.900 let's just guide everybody through the same process

00:18:59.820 on the front end.

00:19:00.520 So I'm a big fan of that in business in general.

00:19:02.880 As an entrepreneur, I get a lot of entrepreneurs

00:19:04.460 that are overwhelmed and I say,

00:19:05.860 have you ever felt super productive

00:19:07.240 and not overwhelmed in your business?

00:19:08.620 Yes, tell me about that day.

00:19:10.160 They tell me about their day.

00:19:11.040 I say, how much does your day today look like that day?

00:19:13.120 They go, not at all.

00:19:15.220 Well, why don't we just spend more time

00:19:16.780 making it look like that?

00:19:18.280 Once you kind of see the pattern, it's a little easier.

00:19:20.580 So that's on the activation side.

00:19:21.880 And Joey Coleman, I've got to give him credit

00:19:23.220 for the first 100 days.

00:19:24.560 That's my-

00:19:25.340 We're using that in the core business.

00:19:26.620 Perfect.

00:19:27.540 So, like, to me, that would be, I've got my own version of that for software,

00:19:34.060 but that would be, you know, what he's got training that I think is, you know,

00:19:37.140 so you guys already understand it.

00:19:38.260 I think that that's really important.

00:19:39.940 And for me, one thing I do that I think is really important is I have this thing

00:19:43.660 called the MAR monitor, the Member at Risk monitor.

00:19:47.220 I'm a big fan of instrumenting activities that I expect my customers to do.

00:19:52.260 so as they become activated and they may start to decline

00:19:56.000 or may start to reduce their activity levels in the software

00:19:59.320 that I'm aware of it.

00:20:01.100 Right, so you can intervene.

00:20:02.560 I do this on a weekly, I do this in my coaching business

00:20:05.280 so I have touch points that my team goes through

00:20:08.780 and documents and catalogs and gives a score

00:20:11.720 and on a weekly basis I spend an hour reaching out

00:20:14.400 to the people that are on that list

00:20:15.720 that shouldn't be on that list.

00:20:16.940 Awesome.

00:20:17.580 Yeah, like I'm just like, I treat, it's fun,

00:20:19.760 I treat my business like a software business

00:20:21.120 because I just think reoccurring models are incredible.

00:20:24.100 And so it's kind of that principle,

00:20:26.420 what's worked in the past, just keep doing it.

00:20:29.060 Like I think sometimes we forget to do the stuff

00:20:30.560 we've done to get success

00:20:32.040 just because we think it's different.

00:20:33.760 It's like, no, it's not actually that different.

00:20:35.360 We just got to apply it to the current model.

00:20:38.580 So that's on the activation and I think retention.

00:20:41.660 The truth is though, I think you sold a dream

00:20:44.200 so you can't be too hard on yourself.

00:20:45.740 Like we all know this industry of people

00:20:47.320 buying into these, you know, business in the box,

00:20:50.000 these $2,000 programs, like arguably your program

00:20:52.880 is the most valuable thing that they could have bought.

00:20:54.940 You gave them the training, the support,

00:20:56.960 the infrastructure, software, et cetera, et cetera, right?

00:21:01.100 Like they're not getting that from anybody else.

00:21:04.020 But I also think that you shouldn't be accountable

00:21:07.500 to them and their habits.

00:21:11.240 You know what I mean?

00:21:11.820 Like the unfortunate part is

00:21:14.040 businesses aren't supposed to succeed, right?

00:21:16.620 And I know we wish that like every one of our customers,

00:21:19.040 I want them to be ridiculously sexual, but there, there's obviously a limit to like how much you're

00:21:23.180 going to do to support them and how much they got to show up and do it for themselves. And I love

00:21:28.160 that idea of like CrossFit's kind of, you know, Greg Glassman is, is like an uber libertarian.

00:21:33.640 And he pretty much says like, he doesn't care about territories. He'd rather two CrossFit gyms

00:21:37.500 open up across the street from each other and say, fight it out. Yeah. And, and, and let the

00:21:41.420 best man win. And the truth is, is I'm seeing this now because I'm a business partner and an

00:21:45.280 affiliate and down the street, maybe a mile and a half away,

00:21:50.880 there's a gym that's half the price and we're crushing.

00:21:55.320 You know, like half the price but we're crushing.

00:21:57.080 Why?

00:21:57.920 We talked about level of value for a customer,

00:21:59.680 level of service, how do we make this better,

00:22:01.520 how do we create, you know, it's like when you build

00:22:04.540 a better value, like when you create more value

00:22:07.780 for a customer, the right customer's gonna find you.

00:22:10.920 So like, I'm a big fan of like don't price yourself

00:22:13.840 below market just to get customers.

00:22:15.340 Cause again, it's back to like, yeah.

00:22:17.540 So I think, I think at the end of the day,

00:22:21.640 you're going to get a lot more ROI saying

00:22:23.920 who are the people that are rocking it with our platform,

00:22:26.140 find more people like them,

00:22:27.780 figure out a way that if folks aren't performing

00:22:30.080 on your platform, because it is a SaaS model,

00:22:32.460 but it's different because you are giving them territory.

00:22:34.980 Like can you imagine if every one of my customers

00:22:37.000 that signed up for my productivity software,

00:22:40.040 I gave them a postal code and like,

00:22:42.800 And the challenge is they're occupying a postal code

00:22:45.560 that I can't resell if they're not active,

00:22:47.760 which means I can't get them to upgrade

00:22:49.180 and expansion revenue, which makes...

00:22:50.480 And that's another challenge there for sure.

00:22:52.660 Yeah, so I would definitely figure out

00:22:54.080 in the next wave of customers,

00:22:57.220 a way that says there's a minimum level of activity

00:23:00.920 that needs to be present.

00:23:02.120 Otherwise they're out.

00:23:02.960 Yeah, just even though you don't want to look

00:23:04.820 like a franchise, and we won't use that word again,

00:23:06.740 but I think if that is the model

00:23:09.220 and people essentially are assigned geographical regions,

00:23:12.740 And you know what?

00:23:13.420 I think people like this.

00:23:14.640 Like, it's funny how, and man, if I could, I would give away, you know, I create a lot

00:23:20.260 of stuff.

00:23:21.140 And if I could, I would give it away to everybody that I think is in need for it.

00:23:24.600 But unfortunately, I've just learned through trial and error and really frustrating, banging

00:23:28.860 my head against the wall with like family members and my best friends.

00:23:32.160 And like, if they don't pay, they don't pay attention.

00:23:36.820 It's so frustrating because you're like, I built this incredible thing and I know it

00:23:39.860 could transform your life.

00:23:40.740 yet if you don't make the investment I know you won't prioritize and look I'm

00:23:45.780 no different there's a reason why I invest tens of thousands of dollars to

00:23:49.320 go to things because it ends up in my calendar I reschedule everything else

00:23:54.540 I don't cancel it it's just it's just a different level so unfortunately that I

00:24:00.600 think that there's there's either a social commitment either like a public

00:24:05.520 social like I'm gonna do this or else all my friends are gonna make fun of me

00:24:08.520 So like, that's like, I'm going to climb this mountain.

00:24:10.660 I'm going to lose 50 pounds or kind of like that, that social peer pressure, or there's a financial one.

00:24:15.600 And if you, you know, in the lieu of getting your customers to do something like that, you know, I think it's about an economic one.

00:24:22.480 And it's going to be really important from a business model point of view to ensure that, because if I think of like, what's your dashboard look like?

00:24:32.000 It's a map with the regions that you've mapped out for sale, essentially like a real estate thing.

00:24:36.660 And then it's a performance per real estate.

00:24:38.520 So essentially, like, here's a map of the world.

00:24:40.880 We have 25,000 regions that we think are prime

00:24:43.700 for our program, and it's either red, green, yellow.

00:24:48.140 Green means they're rocking at X amount of revenue

00:24:50.360 per year because you guys track it all through your platform.

00:24:52.700 Yellow means that they're on the borderline

00:24:54.620 or they're declining, and red means they're just

00:24:56.200 not performing or they haven't been sold.

00:24:58.220 And I would look at this map every day

00:24:59.800 and just try to turn it green.

00:25:02.040 And it's like a simple mission.

00:25:03.640 Like, every day I look at the map,

00:25:05.280 how much more of the map is green?

00:25:07.200 and I will just, right, it just cleans it up,

00:25:10.900 makes it visual, and simplifies it.

00:25:13.420 Does that help?

00:25:14.300 Totally, yeah.

00:25:15.080 Cool, anything else just to clear up on that, or?

00:25:18.580 No, that's good.

00:25:19.800 I know, it's a lot.

00:25:20.640 I just like dropped a whole bunch in the last few minutes,

00:25:22.920 but I think you've got.

00:25:24.580 Now I've got to wait for the video,

00:25:25.700 because I don't have, I don't mean.

00:25:26.960 Yeah, yeah, no, that's the way it works,

00:25:28.260 and I think you have a model that is super high value,

00:25:34.520 and over time, I think you know,

00:25:36.360 and I know the price is definitely gonna go up.

00:25:38.520 Because when I think of comparable solutions

00:25:43.860 that get people from no income to more structured income

00:25:48.940 to best practices to training around a profession,

00:25:52.940 they charge a lot more

00:25:54.540 than what your current investment thing is.

00:25:57.160 Yeah.

00:25:58.380 And you're adding a ton more value.

00:26:00.300 And then, so that's just like.

00:26:01.200 And that's how we're coming in on the CrossFit model again

00:26:03.380 because I think they started out at 500 bucks a year,

00:26:06.760 and now they're 3,000 a year, if I'm right.

00:26:10.300 And then they make a lot of their revenue off the training.

00:26:12.220 Most of their revenue is training,

00:26:14.040 and yeah, the affiliates,

00:26:16.900 the thing is they literally give you zero support.

00:26:20.540 That's why the 3,000 can work,

00:26:22.740 is because they, what they've done is,

00:26:26.260 and arguably, and this is, you know,

00:26:28.060 I could, it would be a longer discussion

00:26:30.620 around they've designed a new vehicle.

00:26:33.860 And this is what's unique about that model,

00:26:36.140 and this is true for any business honestly,

00:26:37.840 and I'll just leave this as a cliffhanger,

00:26:40.500 it's the P90X muscle confusion.

00:26:42.500 Right, right.

00:26:43.340 And that's what, and people that get it will get it,

00:26:46.680 but at the end of the day your customer's here,

00:26:48.520 they want to get up the mountain,

00:26:49.420 they're gonna choose a vehicle to get in,

00:26:50.900 they've tried things in the past,

00:26:52.400 at some point they're gonna hear this thing,

00:26:56.000 butter fed blah blah blah coffee,

00:26:58.380 you know what I mean, like there's these new vehicles

00:27:00.420 that they either say, yes, I resonate with that,

00:27:02.340 I'm going to try it, and it's unique enough

00:27:04.480 that the market, and they get results,

00:27:07.000 that the market then takes care of itself.

00:27:09.440 So that's why you see things like the ketogenic diet today,

00:27:12.640 P90X back in the day, you know, just X, Y, and Z.

00:27:18.060 And that was what made CrossFit CrossFit,

00:27:20.880 I think, that people don't understand.

00:27:22.120 And definitely the economic model,

00:27:23.380 where they left so much value for other people to exploit

00:27:26.960 that people couldn't help but promote it

00:27:29.980 because it was in their best interest.

00:27:31.300 So they deferred their marketing spend to their suppliers

00:27:35.320 because their suppliers,

00:27:36.740 they created such a great mousetrap

00:27:38.660 that it was in their supplier's best interest,

00:27:40.360 AKA Rogue, AKA you name the supplement company.

00:27:44.680 Like CrossFit said, we're not gonna do the Nanos,

00:27:47.800 like all these different products,

00:27:49.460 yet Reebok comes along and writes a big check

00:27:53.100 to CrossFit every year.

00:27:53.940 So it's gonna go down in a very unique business model

00:27:57.040 that I don't think a lot of people could pull off

00:27:58.460 because they didn't have the vehicle,

00:28:00.300 which was the version of cross, like,

00:28:03.280 it's hard, it would take a long time to explain,

00:28:04.740 but that's like, it has to be that different

00:28:06.920 and get results that people go,

00:28:08.640 I've not tried that before,

00:28:10.340 and I'm willing to give it a try,

00:28:11.840 and really the tip of the spear.

00:28:13.480 Like, a very focused, hardcore customer segment

00:28:16.920 in a market that becomes the disciples 0.98

00:28:20.380 that can't shut the fuck up about it. 0.88

00:28:22.300 I mean, that's CrossFit at its best, right? 0.95

00:28:24.000 Like, how do you know somebody does CrossFit? 0.98

00:28:25.220 They don't shut the fuck up about it?

00:28:27.300 Anyways, super fun conversation, Mike. 0.97

00:28:29.340 Appreciate it.

00:28:30.020 Awesome.

00:28:30.280 Came here today to try and get, I've been, this side hustle thing, you know, part of

00:28:35.060 our main business that I was talking about has been a colossal amount of work to get

00:28:41.940 it out of the gate.

00:28:42.600 And then probably about four months ago, I just kind of burnt out on it because it was

00:28:46.400 just so much work.

00:28:48.640 And now I'm rediscovering a little bit of energy to really get back into it and trying

00:28:56.520 to take everything that we've learned over the last year and make it into a

00:28:59.580 workable model and and just came here to you know this this software kind of

00:29:06.420 thing is is totally new to me and so I know Dan's Dan's the man when it comes

00:29:10.680 to that so just came here to bounce bounce some challenges off him and get

00:29:15.240 some clarity and and I got that for sure if somebody wanted to come to Dan for

00:29:19.500 advice maybe one word of warning is bring a notebook and be prepared to

00:29:24.180 right fast because he's gonna he's gonna dump a fire hose of knowledge at you and

00:29:28.200 most of it most of it is pretty good but you got to be prepared to figure out how

00:29:32.520 to synthesize all that stuff you know it's I've actually chatted with Dan a

00:29:38.760 few times on this very thing and every time I come away with you know at least

00:29:44.580 two or three things that I that I'm going to implement and that I have

00:29:47.760 implemented in the past right away and it's it's generally spot-on and the guy

00:29:52.860 knows what he's talking about and so you know come prepared with the right

00:29:57.360 questions I guess Dan likes to work in short little bursts and so there's not

00:30:03.180 a lot of time in there to you know to cover the cover everything in life so

00:30:07.620 come come prepared knowing what you want to get out of it and have the right

00:30:10.920 have the right questions

Dan Martell - January 11, 2018

Episode #6 Market Place 3.0 w⧸ Mike Brcic, founder sacredrides.com

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