Episode Transcript
[00:00:00] Speaker A: All right, so the question was, what have you been up to, Craig?
[00:00:04] Speaker B: Yeah, so it's been a few years since we caught up. So I guess in the last, like, since COVID right. I think we talked Covid last I was in France, we'd been living there. We lived there total for five years and moved back to the US about three years ago. Three and a half years ago. And we're living just south of Boston.
And like, yeah, we moved. We moved for like, it was like a composite endpoint, right? We moved for schools and like education a little bit. We moved for taxes a little bit. We moved for family because we have older and kind of aging family and like the time zone with like all of our customers being in the US and living six hours ahead was just challenging because I was doing stuff like this. We're podcasting at 8 o'clock at night and it's hard.
[00:00:50] Speaker A: Appreciate it. Appreciate it, dude.
[00:00:52] Speaker B: Totally. Yeah, my pleasure. I know. You know as well as anyone, right? Like, it's just tough.
So, yeah, so we moved back and largely it's been like a really good move. Like the kids, we have middle school kids, middle school age kids, and they're like super happy and thriving and doing really great. And it was like a cultural adjustment to come back to the US A little bit. But. But it's been, it's been good and it's nice to be here. Like, I'm going to more conferences and I'm kind of plugged into the, the ecosystem, you know, startups and business and stuff a little more.
Yeah, I mean, from a business perspective, still doing much the same stuff. So running Kastos, where. So we folded Podcast Motor, which is kind of how you and I knew each other originally into Castos five or six years ago. So Castos now has two parts to the business. About 70% of the business is SaaS. From a revenue and kind of headcount perspective, SaaS. So we're a podcast hosting platform. So our customers are you people who have a podcast and want to publish it to Apple and Spotify, analytics, monetization, all that kind of stuff. And then we're still doing the done for you editing and production service, which has evolved like a ton since we first started because there's now like video and fucking Riverside and, you know, short clips and all this stuff. So, like, we're in the like, fourth or fifth incarnation of podcasting as, as like an industry that we've been involved in. And if I'm, if I'm honest, I think for most people Creating content like this is, should be from my perspective primarily for YouTube. And the podcast is kind of a secondary thing. Right?
It's practically like you're recording this on Riverside and whatever. But I think strategically like the most valuable real estate on the Internet is YouTube. Like it's not even close.
[00:03:01] Speaker A: I love it and I love it because I looked at what happened to hubspots SEO and how much AI overview is eating everything.
I actually just got off a call before and so I was scrambling around, running around like an idiot when we jumped on this call with someone that's in, in the marketing space and they had a series of contract cancellations from big companies because they're just like everything's gone to AI, like everything's moved to AI and they were like right at the like nose to nose with that change. So talk to me more about YouTube because I, dude, I don't know. I've always struggled to just do a one out conversation. I can't wax lyrical to a camera and create that type of content. But I'm with you on the idea that big search engine, you can actually kind of own the real estate a little bit. What do you reckon?
[00:03:54] Speaker B: Yeah, before I even get there, I think to me the thing about YouTube is you're like, is it a search engine, is it a social network, is it a content platform?
There they have things like the concept of posts now. So it's like an Instagram, much less like a TikTok YouTube shorts kind of thing. Which is like, I mean I have, I have a 12 and 14 year old. Like they would literally spend all day on it just watching YouTube shorts the same way someone would watch TikTok.
So I think from a platform perspective it's the only thing of its kind where it's like you can go there to kind of get everything now.
And sure enough they're going to introduce the concept of like DMS and conversations. It already happens with like they have a community feature.
And so like from a business perspective I feel good that from when you talk about AI like we're not being affected really. Like if you're a content marketing like blogging agency, like you'd be getting your shorthanded to you but, but like I think maybe we're getting positively impacted by it where people are like all the written stuff like you said HubSpot is just garbage. SEO whatever. Like the play for SEO now is like can you show up in the LLMs?
But sure enough, like you and I having this 45 minute conversation is authentic and genuine. And can't be kind of faked by AI as of today at least. And so I think that's where, like, YouTube and podcasting really are going to shine.
That's the hypothesis. And it's true so far, like, our business hasn't suffered because of AI.
As for, like, YouTube, man, I think that, like, it's super hard. Like, I say it's the most important. But sure enough, like, we don't publish every week even there. And I don't. I mean, I publish my podcast to YouTube and that's. That's kind of like the biggest thing I do. I'm trying to get more into it, but it's really hard. It's super hard. Because it's not just like I'm going to stare at the camera and talk for 10 minutes. It's like, what am I going to talk about? Am I going to script it out? Then I have to get a teleprompter. Then I have to be able to, like, read from the teleprompter properly and not sound like a robot.
But something like this, where we have energy and dialogue is a lot easier.
[00:06:21] Speaker A: Okay, so let's. Let's dig into this, this evolution of podcasting, because this is interesting to me. There's a couple of things that are interesting to me. One, you've done this thing with the productized service where you've made the jump from service to software, which I think, like, just about everyone that was in service that I could remember had either wanted to scale like crazy or transition to software. So you somehow navigated that, which I think is useful to talk about. But also, how did you do that as the market is moving around you? Because it seems like to me that's. There's a lot of. It feels like there's a lot of moving parts of that.
[00:07:04] Speaker B: Well, we raised a little bit of money, so. So I think that's like nothing we raised. We raised like just short of $1 million.
So. So, like, that. That's something. And you hired people and kind of went. Went pretty hard to the market, both from a product, like on the software side, like, both from a product and from a sales and marketing perspective. I have lots of war stories I can talk about there, but I think that the reality is the services has always been pretty hands off, mostly because it's not been my primary focus since we started the software.
And interestingly, that's changing again now because soft. So to answer your question kind of fully, I guess, like, the services were kind of humming along. We got inbound leads and because we'd done a just ton of SEO and so we always just can't get customers. Signed up a customer and had onboarding call today and they found us through actually chatgpt so search and so like that has paid off. That playbook just doesn't exist anymore. Like you can't start a product I service today and start blogging and do SEO and expect to win. I don't think so. Kind of largely we had customer acquisition taken care of the team and the process and all that was kind of there. And I just like did sales and signed up customers. So I was able to focus like a lot of my time on the software side of things.
Now what's so interesting is now I'm kind of, and this is like happening in real time is like realizing the big opportunity for the company probably isn't in the SaaS side because it's like it's really tough to compete there. Like what we do versus the other kind of folks in our space is like the same.
Like you know, like I don't know where you host your podcast but like, I mean if it's with us or someone else, like I think the reality for most people is the thing we do is the same as everyone else. Like the 80% they care about is storing files and delivering them to Apple. We do some other stuff but I don't think it's that important to so many people. Plus it's just really hard to grow a multi 7 figure SaaS business $19 a.
But grow on a product or service at 2500 bucks a month is not as hard.
[00:09:41] Speaker A: So the commoditization of that software layout, if the competition is not there or the opportunity is not there, then where is the opportunity? Or is it top secret and you don't talk about it until you go out and execute?
[00:09:56] Speaker B: No. Yeah. I mean I think the opportunity is in the services. I think the opportunity is in identifying our ICP is so clear right now. Like our icp, it's, it's this. We have this one customer who like he personifies it so much. He's a wealth advisor, like a financial planner in Kansas City. He has a team of about a dozen people. He knows exactly who he wants to talk to. He has endless amounts of stuff to talk about. He has a really established brand and so the podcast just like fits into that and he just wants us to take care of editing and producing it for him. So he doesn't like want a whole lot more that stretches us. He has endless Amounts of stuff to talk about. So he's not going to churn. He's not so big that he's going to take it all in house. And those are all the reasons people cancel our service.
So it's pretty straightforward. We just need to find 30 more people like him.
[00:11:03] Speaker A: Yeah, the initial, the initial thought that I had was what's the, what's going to prevent someone like that from in housing? And maybe it is like the combination of. It's kind of like the price versus value delivery. If he wanted to figure out how to stitch together all of the, I guess, different things that you do and do them as well as you do them, then that's going to cost him double. Something like that, Maybe more.
[00:11:30] Speaker B: Yeah, yeah, yeah.
[00:11:33] Speaker A: Is that something that you sell on as in like how you position your service? Do you do a. This is, these are your alternatives and this is what it looks like.
[00:11:41] Speaker B: We don't. We should. Yeah, that's a. It's a really good point. I think people come to us for a couple reasons. One, they're like starting a new podcast and they're like, I don't want to figure all this out. I just want you to tell me what to do. That that's great. The second most common reason is either I've been doing this myself or I made my marketing person or my EA figure out how to do it and they're kind of rubbish at it and we want a real, a real team to do it so that my marketing person or my EA can go, can actually do their job.
And so I think they're probably doing that math which is like the resources I'm allocating to this other thing just don't make sense. Like dollars and cents versus what they would pay us.
[00:12:28] Speaker A: So with my acquisitive hat on and I was thinking about this because I'm seeing quite a bit of. So there's jumping back into the space and getting to talk to everyone and seeing what they're all doing.
I've seen this like explosion of podcast producing productized services. The people that like alliteration are going to love those P's and my first idea or my first question is why not raise some capital, figure out, do a bit of a, kind of a tender process or something and go out and then just roll up a bunch of those companies. Given that you have a really clear ICP and given that it does scale like it's a scalable, given the mechanics and the profit margins and you can scale it. And this is the question that I Asked us to godaddy. Can you scale it by 10x without 10x in your base, like 10xing your cost base but with something like this because the numbers are so big.
Possible. It feels like it's possible.
[00:13:38] Speaker B: Yeah. I don't know.
I think something we would run into decently soon is a kind of layer of middle management which makes me want to throw up. But we have a kind of head account manager right now and then several account managers that she's kind of like player coach. She's not kind of sitting above them, but she's kind of like working with them directly with customers but then kind of overseeing some of their stuff. I think you could multiply that in the pod model so you'd have just several of those and they're all horizontal.
And then at some point you'd have to have management like this is the customer experience manager and this is the ops manager and that's all fine, but that would introduce some like direct overhead.
Yeah. As for, as for rolling up, man, to be honest, I've been, I've been like mentally pretty removed from the side of the business for like five years since we raised money because we raised money not for this but to grow the SaaS side. And so was just going super hard on that and like this was, you know, oh, I need to get on a call for this or there's a problem or an account manager quit or whatever.
But it's interesting to be like coming back home a little bit.
I think your, your point is very fair. I love the kind of roll up model we looked at doing it on the hosting side and I'm surprised somebody hasn't done it because yeah, it all makes sense. Like if you're doing the same thing as kind of everyone else, the economies of scale should.
That math should all work out a.
[00:15:28] Speaker A: Challenge to middle management. Sorry, you go, you go.
[00:15:31] Speaker B: Yeah. No, I hate it when people turn the tables on me when I'm interviewing. But what's the down like? I've never done that. What's the downside to that? If you say, hey, this is kind of our plan, we're going to grow a little bit and then we're going to prove the model, raise some money and go do this. What's the downside other than like it just doesn't work?
[00:15:56] Speaker A: Look, I think it's valid. I've been noodling on this because I've jumped like I've jumped back in full steam, see what's going on in the market.
Bridget had a company acquired she was pr, product or service space. Jackie was acquired. She was doing kind of podcasts, podcast notes and is interesting because AI just came in and like ate that immediately. So her timing was wonderful. You know, Jake's doing like really well with agency and scaling and figuring all of that out. So like I'm seeing like lots of buoyancy and still like good opportunity and good, like it still feels like there's plenty of hay to be made while the sun's shining.
Seems, it seems obvious to me. And then I'm like, well why don't I just go and do that? So I don't know. I thought I'd bounce it off you for sure.
The challenge that I'd have, and this is where I think more of the thinking is important is if there's inefficiency that gets built into the model that you're building. So if you need, if by virtue of how you're providing the service, you need to have a layer of middle management. I'd be challenging that notion because as we know middle management is a shitty job to do as in being. But it's also a shitty job to have because it's like that don't have quite enough influence to go deep and do the stuff that needs to get done and they kind of, you know, a pass through and a go between but they need to pay them enough to keep them motivated. It's just a shit role.
As someone that's been caught in the middle management zone myself a few times, I was speaking from experience, but I would argue that you would be able to do some org design with incentives and kind of tooling and those sort of things. And also like the level of skill that you have in the seat to actually make to, to cut that, to cut that layer out and organize. Yeah. Organized by a volume of clients and have like really clear and mechanical numbers all the way down. It take a bit more doing, training, it have to be more robust. Quality control would have to be more robust. But with godaddy, like when we started to scale, we started with oh man, we were. Our ratio of like team leader to service provider was something like one team leader to 15 to 20 people and then starts to balloon out to like 25ish. And then you just have to get really, really good at making sure that people know their KPIs, they're held accountable to them. There's like a lot of transparency in what's being produced.
Kind of like do the build, you know, this kind of build in public notion. But you do it for the service providers within the team. So everyone's seeing their performance. No one wants to be in the bottom five, like drive all of that stuff behaviorally, which is what the direction that we needed to start to go. Because you know, the question of can you like 10x the revenue without 10xing the cost base.
The constraints help, like the constraints help through that thinking.
I mean I, I'm sure there's a bunch of people that have jumped into it and they've probably got those good clients like they've lucked into those good clients that you're looking for as well.
Like they've got the, you know, and they don't even maybe necessarily realize what they're sitting on or because of the scale of their operation. They, it's like they're still a consultant and they're still doing that work and they're making 80 grand a year, 100 grand a year to do it. So. Yeah, I mean, yeah, I'm on board with some, on board with this thing that I just pitched myself 10 minutes ago.
[00:19:35] Speaker B: Yeah, I mean there, there's definitely been some, some turnover in our business. I know of two acquisitions in the last kind of year and a half or two kind of, kind of directly like at our, at our level.
But, but they've just not been roll ups. They've just been, you know, horizontal, if you will.
[00:19:57] Speaker A: Do you know anything about numbers or multiples or any of that sort of stuff?
[00:20:01] Speaker B: I think it was like kind of three times ebitda.
So which, which I think is pretty standard with like a decent earnout, which I think also is standard for, for the average productized service. Yeah.
[00:20:16] Speaker A: If you took the top, if you took your top 10 competitors and rolled them up, what do you think?
Like on, on in napkin math. Does that make sense? If you could do it at like a reasonable EBITDA multiple man.
[00:20:42] Speaker B: Just, just because I'm an idiot. Like what would, what does make sense mean, like be able to Deb? Like.
[00:20:49] Speaker A: Well, it depends on your goals. Right. So you've raised some cash. Usually when you raise cash, generally, not always, but generally there's an expectation of some kind of outcome. Unless you raise through a fund that's more like profit sharing, founder friendly. Are you, are you in the like, like the exit category or the like profit sharing kind of fund?
[00:21:14] Speaker B: We, yeah, we definitely have optionality. Like we raised through Tiny Seed and then we raised like a safe round afterwards. So I think the folks in the safe want to get paid. Tiny Seed is cool either way.
[00:21:25] Speaker A: Yeah. Yeah. And also that depends on, you know, ownership and board seats and all that sort of other sort of stuff. But let's just assume all things are equal. And I mean.
[00:21:40] Speaker B: I don't know of an acquisition that like, doesn't make sense at three times ebitda. Like, I think most people in our space have kind of like gross margin of 50% at least, which I think is pretty standard. And then like gets down to 25 or 30 at the bottom line.
So, like that. That's pretty solid.
What's interesting, what's interesting is everyone, like you said, everybody lets a scale the service or like, go to SaaS. What I've found is like, SaaS is so sexy because it's 100% margin. Every incremental customer doesn't cost you anything. True. But to have a. Unless you're a developer, to have a proper kind of stable, functioning team where you're not in the weeds all the time, you need to be doing like a million bucks because you got like direct overhead. Like our direct overhead to like AWS and Cloudflare is like more than 10%. So that's just 10% that's gone. Then you have developers and you have support people and you have designers, you have product people and all this kind of crap to where like, Gosh, I think SaaS would get really fun at like 3, 4, 5 million because you could basically just have the same team, but just service three times as many customers. But. But like, at a million or two, it's still like a bit of a drag, which I never thought I would say.
[00:23:10] Speaker A: I mean, grass is greener, right? So, yeah, everyone that is a consultant wants to scale service. Everyone that scout service wants to go to software. Everyone that's done software. Well, I don't know. I don't know where I like land in that kind of ecosystem of people looking at grass is greener. Like, coaching is really fun. I enjoy it. It's very intrinsically rewarding. Sometimes I want to be an owner, like an equity owner or a partner, because I see a ton of possibility and I don't know, I can see those, I can see those opportunities. But by virtue of doing that, you actually can't be objective because as the coach, you're supposed to be focused on the person, not the business, because the business is the extension of the person. And then you've got two masters and you're kind of like worried about your back pocket versus what the person's going to do. So I've thought about those things, but that would be my version of Grass is greener with this. But I mean, if you're using, if you were to do the roll up, if you're using it as fuel to the fire, just shoveling all of that profit back into growth, all that profit back into, you know, marketing or sales or whatever you need to do to grow software to get it to a break even. I feel like the, like, in terms of the model, it's hard for me to see where that wouldn't. It just wouldn't make sense.
I might be making this a real mental shortcut here.
[00:24:31] Speaker B: Yeah, no, I think it's a very valid question because there are a lot of people in our space, to your point, and I think probably a lot around our scale.
[00:24:44] Speaker A: And people like to get an exit. Exit feels good. You know, they might be tired.
I mean, yeah, I've had a bunch of these things where just because I've had fresh eyes and I've come from this space of like in Canva specifically, it's not that money wasn't. It's not that money wasn't an issue, but if you needed to do something, you could figure out a way to do it. So it wasn't a constraint. So it wasn't like they're spending wildly on a bunch of shit they don't need. But if it solves a problem, then you could back it. You could go and get it done. And coming back into the space where there's sometimes a ceiling of constraint on what you think is possible due to your run rate or due to the scale that you understand, or due to the market dynamics, it creates these blinders. And it's been really fun for me to jump back in and see some of these patterns and these things that like noticing on some of the services. But it speaks to the fact that they still solve a real problem, they're still profitable, they're not sexy, but, you know, pay the rent, do the job.
[00:25:53] Speaker B: So, yeah, I have a, I have a friend, one of the. One of the folks who kind of acquired one of our. One of like the competitors, who is taking and applying the productized model across several different kind of functional areas. Right. So writing maybe and podcasting is one, and then you can imagine the others.
Do you see that happening where it's like, hey, I figured out the mechanics of sales and marketing and ops and all that kind of stuff and we're going to just assemble the team and then go do this thing here and then we're going to do this thing other here and go to this other thing over here. Do you see that happen often.
[00:26:32] Speaker A: There was a time we fielded inbound interests from I think it was ivp, inside venture partners or something. This is back in like 2014 because we had that content marketing engine where people would find us and like, oh, this is cool, what's this about? And it was a reach out and I had to call and it was like a low level call associate person kind of. And then it graduated to a partner call and they could make sense of the model, they could make sense of the overall market opportunity. And their question to me was if you can do WP Curve, but you can do it for all the platforms and do that really well, then that's venture backable. Like we would get behind that now. At the time I was so blinded by WordPress, like I had those blinders on about how annoying WordPress was to use and hadn't really quite figured out how to not have sites go down and like have disaster recovery and do all the stuff that comes along with managing these janky spaghetti sites that we sometimes had to manage. That the pain of that felt exponential and it also didn't feel like, it didn't feel like the equivalent pain for WordPress would be the same as a Weebly or a Squarespace or a wix and you also couldn't do as much work in retrospect and having seen the inside of how GoDaddy works and what service look like and what support look like there, I think I really kind of turn that around and actually feel like the idea of a service layer that is, you know, could be support, support for everyone or ops for everyone or sales or like these kind of vertical chunks of things that you can do.
I think it's possible, but I think that the pricing and the like scaling up and scaling down of the certain services you need would make it a pretty bumpy business. So we saw this at WP Curve. You got a broken site, your urgency and your need to fix is like through the roof and your price sensitivity is quite low. So you'll pay a bunch to get that fixed because it's an immediate pain. But with something like marketing or sales or whatever else, if you're really successful with those, then you hit this threshold where like if the CEO or the founder is not organized enough to like capture that demand or manage it, then they'll probably want to dial it down or back it off or you'll get to a place where it's, you know, if you're charging them like four to six or eight grand a month in terms of a product or service or any of those things, then you can go and hire an sdr or you can go and hire a person and like, maybe get a bit more throughput.
I love seeing people that come into the space and they go, I can like, take this model and I can systematize and operationalize everything and then like, nail it because it's so much more complex than that. Oh, my God. But I like, I like the. I really like the early view of, like, well, I've had success in this particular vertical and then I can go and have my Midas touch and touch all of these other verticals, and it's all going to work. That's where you really start to learn that these things are so different. Like the difference between doing, you know, podcast production versus WordPress support. Different rhythms, different dynamics, different customer expectations, different pricing, different profitability. I mean, I'd love to talk to that person just to understand what they're thinking.
[00:30:00] Speaker B: I mean, you touched on a good point just from kind of a founder psychology perspective. I mean, part of the reason that we're still doing what we're doing is like, it's a good business. You know, it's like, I'd give it a B if I had to give it a grade. It's not an A, but it's not a C or a D or something like that. I also often question my ability to do this good somewhere else.
And I'm not trying to, like, humble brag, but like, gosh, I've done pretty well. We're a, you know, kind of seven figure business that's profitable and, you know, all this kind of stuff, you see some people do it over and over and over and you're just like, gosh, like, what the heck? Like the Midas touch. But you also see some people who go and exit for 2 million, got to get a job pretty quick, can't figure this shit out and probably should not have done that, you know. So, like, I don't know. I don't know what.
I don't know how to figure out whether the skills you have are transferable to another opportunity.
But that's real, and it should be real for everyone who has a successful business and is thinking about something else is like, you got to be real with yourself of like, can you do this again in WordPress support or, you know, whatever, LinkedIn, ghostwriting, which is the product I service du jour. I feel like, yeah.
[00:31:38] Speaker A: Here'S my take. Spicy take.
WordPress is no better than it was 10 years ago. I actually, like, I posted something on LinkedIn where I kind of was like, so positive and I, you know, published it and then took it down. But my point of view was after 10 years, I would hope that it was better. I would hope that it was easier to understand. I was. I would hope that the UX made sense and then try to update a header, disappears off one page, add some CSS over here, install a plugin. You're playing like you're chasing this mouse around, trying to figure out what the hell is going on. There's still a massive opportunity in that market. Anyone that wants to go and get it can get it.
The idea of, for me doing that again, I reckon if I really wanted to do it, like, I could do it. And I've talked to people that are trying to do it and trying to imitate the model or even buy up agencies and run support and get to that thing. And I can. I'm more than happy to help them.
But my point of view on it is like, I will get. I'll be more intellectually stimulated and probably have more personal growth by having more kind of exposure to different industries and different verticals. So jumping into Canva, working there in product, like, opened up this completely new thing to me that just, you know, GoDaddy was at scale and GoDaddy is publicly listed, but also very much, you know, privately held. 20% at the time was held by private equity. Super focused on just driving up arpu. You're getting calls from customer service people all the time. And then go into this environment in Canva, which is mel absolute savant of a CEO, like, one of the smartest people I've ever shared a room with.
Unbelievable product vision and very steadfast in, like, creating the most delightful experience and like, having that kind of mentality in that frame.
And I guess, I guess I think it comes back to, like, kind of what you value. Like, will you eat volatility in between to have that variety?
I know from my personal experience that, like, the variety, the attraction of variety is like, really meaningful to me. So I love to talk to different people who have different backgrounds and different skill sets and everything else. But I also don't, like, I'm not trying to service a mortgage. I don't have kids. I'm not, you know, I don't have that level of responsibility where I have to have, like heaps of consistency and all that sort of thing.
So I think it definitely does come down to the founder. But it is a real trap to think that if you do IT in one vertical, you can go and do it in another. So WP Curve.
Great business, great outcome. Dan had a mailing list of 6,000 people when we launched, so he'd worked on that for years. He'd been actively blogging, he tried to build a software company. He hadn't had success with that, so we had a base. Now we didn't make any sales off that mailing list when we promoted to it because they were interested in his story and not necessarily good customers for us, but they were massive promoters and would talk about the service and everything else. So if I'm jumping in trying to do a WP curve, in what year are we 2025, my game plan is very, very different.
Content arguably doesn't work or maybe doesn't work anywhere near the effectiveness that it used to.
So, you know, the ability to run the business and scale it and do all of that is true. But going to market and like getting through that early crunch is so difficult. So, you know, considering all of that, that's why I look at the kind of that roll up model and say in which verticals could this be true? When does it make sense? You know, if it's an existing company that's got some version of scale, can you add on top of that? And then when doesn't it make sense? Because it'll seem like someone's got a productized service, but when you get behind it, there's really like, there's no, I want to say motor.
There's no.
[00:35:48] Speaker B: With a trello board. Yeah.
[00:35:50] Speaker A: Oh man. And they're, they're playing six different instruments and they're doing three people's jobs. And then you get into it and you're like, oh, you know, that's not, that's not it. So I mean that's an extended answer, but that's kind of my, my hot take.
[00:36:03] Speaker B: Yeah. Yeah, makes sense.
[00:36:09] Speaker A: So Software War Stories challenges 19. So entry, entry point. Entry pricing point is $19 and then the top tier is you say 199.
[00:36:23] Speaker B: So yeah, kind of standard pricing is like 1949, 99. Then we have kind of a 500 and enterprise that's up from there. We have like handfuls of Enterprise and kind of a handful of the what we call premium. And then kind of 90% of our customers, 90 plus are on the 19 plan.
[00:36:48] Speaker A: I'm not going to ask you who your best customers are, but who are your favorite customers?
[00:36:53] Speaker B: Churches.
[00:36:55] Speaker A: Churches.
[00:36:56] Speaker B: Churches.
[00:36:58] Speaker A: Oh, how come.
[00:37:02] Speaker B: They'Re kind of like our financial planner guy on the services side, but on the hosting side, it's like, they need this thing that is very straightforward. They're going to upload their sermons on Sunday, and they need it to go out. They have usually a WordPress site that they integrate it with because they have a bunch of other stuff going on. And that's the kind of Persona of our WordPress users, is they have more going on in their brain than just their podcast. So, like, the podcast needs to be on the site and integrated, you know, pretty fully.
They're never going to stop. They're never going to run out of stuff to talk about. And they have money, which. Those are the three. Those are the only three reasons people ever cancel, is, I don't podcast anymore. It's too expensive.
Or, like, I just don't. I don't want to do this.
[00:37:52] Speaker A: Do they have, like, righteous gemstones type of money?
Do you know Righteous gemstones?
[00:37:58] Speaker B: Some of them are like, you've been in the U.S. like, these mega churches. Like, some of them are absolutely enormous. Some of them are just the Baptist church in Indiana, which just wants to put the sermon up on Sunday, but that continues to be an unexpectedly good customer for us. Like, coming into it, eight years ago, I never would have said churches have a podcast, but now, like it, it kind of is a. A representative example of what a really good customer is. Like. There are other people that aren't churches that have all those same characteristics.
So. So whatever that looks like, that that's our best customer.
[00:38:40] Speaker A: We got to a point, I think. I think it was about two years in, where there were, like, I want to say some attributes that would equal. Or if you stack these things up, you stack these attributes up. It generally meant it was a good customer, was someone that was trying to, like, actually, like, spending money on marketing. Whether that was doing, like, paid advertising or they were creating content, they're either building a mailing list or trying to sell something online they'd invested in hosting that was better than this industry standards. So they're generally on WP engine. So there were these, like, kind of thresholds that you'd cover. And maybe they were building a mailing list or they were like. There was a constant, like, I want to say, like a existing motion that they were going through, and we just happened to slot into that really nicely.
[00:39:34] Speaker B: Yeah.
[00:39:34] Speaker A: And those people would pay the most. They would ask the least of us, and they would be like, so what I found in support was if people had a shitty business, they're having a shitty time, and they'd often take it out on the support people. When someone's got an established business and they're doing all right, they're, like, a little bit more pleasant to deal with. So it took a while to get to what those kind of attributes were. Because in the start, you're like, oh, we go after a category, we go after a different market, we go after a group, a community.
But ultimately, I think the lesson there is if you're early and you're trying to figure those things out and you're looking at ideal client profile, probably go. It just so happened to be churches is kind of what you're getting at. They have those attributes that have those.
[00:40:24] Speaker B: Yeah, 100%. I mean, I think actually our ideal customers sound very similar, right? Like, our ideal customers understand the value of content. So they probably started blogging first and then said, gosh, that doesn't work anymore. I need to do something else to represent my brand. And so they want a podcast. They know what they want to talk about. They're in some kind of evergreen content world. So churches or financial industry or sports oftentimes are good customers, too.
So, yeah, that's what a good customer looks like. I mean, I think the challenge in the business, like, you were getting at, I think, with the price points is, like, from a customer acquisition perspective, at $19 a month, like, across the hosting platform, we average about $29, 30 bucks. It's like the average person pays us.
You just don't have that many customer acquisition options. Like, paid, which we're experimenting with right now and have been for several months, is really hard.
Something like outbound or putting together a sales team or whatever. Like, super, super hard. So then it's like, content. Well, gosh, content's really different than it was two years ago.
Referrals and affiliates and partners, which we lean into pretty heavy. Mostly on the technical side, like, integrations.
[00:41:55] Speaker A: I saw the cast us button in Riverside. I was like, yes.
[00:41:59] Speaker B: Yeah, yeah. So stuff like that, you know, we undergrad. We're recording this in Riverside. Riverside descript. A lot of folks edit in descript.
You know, obviously, WordPress, a bunch of, like, member platforms kit, formally convertkit. So, like, we integrate a lot of those places, kind of thinking like, hey, what other stuff do our customers do and how can we kind of make it easier for them there? And I think the reality is, like, if you're a WP engine where, like, their average customer is probably paying them 500 bucks a month, like, the world's your oyster, you can throw the whole, you know, whatever at the market, right? Like you can throw all of the marketing and customer acquisition options at a lower price point. You just can't. And, and you know, especially like if you're now kind of bootstrapped again or self sufficient, you just can't even, even when you raise some money, you gotta like, you gotta get paid eventually. And like we didn't raise enough to where we could just be dumb with our money.
We tried, but not quite.
[00:43:03] Speaker A: But clip that. That is absolutely does happen though. Seen a bit of that in my recent travels to the price points. Well, maybe the fact that they exist still tells me that they make sense. It is economically sensible to have that price point and not kill the 19 and not kill the 49. And like is it, is that graduation through the products?
Sweet. That's the, that's the play.
[00:43:38] Speaker B: Yeah. So, so like what compromises or whatever the pricing points are made up of is mostly feature gated. So at like 49 you get republishing to YouTube. Like if you're not recording video, we, you know, convert the audio to video and publish to YouTube. We have an integration with Headliner which is like the audiograms that you get on the, on the middle plan, the growth plan. On the pro plan, it's video hosting. So some people do video podcasting, we do like some advanced analytics.
Custom domains I think come in at 49 now. So if you don't have a website, you want to use the Castus website, but on your own domain, that's at the 49.
We have, we have played around with usage based pricing and not. And had it be like completely unlimited, which like then people take advantage of you and it's kind of wrong to have like fair use and as a, as an asterisk next to your pricing, like it's 49 for most people, but we might hammer you with like a $500 bill. Yeah, yeah, that just doesn't, that just doesn't feel right.
One of the.
So like the metric that makes the most sense for us is bandwidth. So you could say like bandwidth or downloads or whatever because that's just what costs us money. Everything else doesn't really cost money, but the number of times a file is downloaded costs us quite a bit.
That's a bummer because then you're like, gosh, Alex, congratulations, your podcast is really successful. Now you get to pay us more money.
It's what, you know, a CRM or an email service provider or whatever would do. But, but it doesn't go over very well in our industry.
And so we don't see a lot of people graduate between the steps is the short version. Yeah.
[00:45:33] Speaker A: And there is a big enough market to run it with like 90% at 19.
I'm just trying to do the mental math to figure out, like, total addressable market profitability.
I don't know, like, we haven't had this conversation on or off camera, which is like, what your goals are with the business. If I was to assume what I know of you is that you're happy to learn, happy to build, happy to grow. You know, you try to extend yourself through the business.
Is that reasonable? Like, is this The Craig of 2019 that I say near and easy?
[00:46:12] Speaker B: Yeah. You know, kind of like we're in the third or fourth incarnation of podcasting. I'm in the second or third kind of version of myself in the business, which I think is healthy. Some people don't ever see it because they just, you know, they grow and they sell, and it's just they're doing one thing the whole time. You know, we had kind of the figure it out bootstrap phase, which was super terrible. To your point earlier, we had the. We raised some money and we're like, growing very fast. Covid was very good to us, like a lot of people in our kind of space. And now we have the like, okay, we had to get to profitability a bit the easy way and a bit the hard way, which means, like, letting folks go. And now we're, we're profitable and growing.
We're not growing super fast and we're not super profitable. So we're not like an acquisition target to folks. And I'm not going to sell the business for a average exit because I'd much rather just keep doing this because I like it.
And I can't imagine something like, exponentially better, I guess, is the other part. Like, you know, I said we're kind of a B business. Like, I started doing some coaching last year because I was like, ah, you know, I just need to, you know, I. I called it the seven year itch. It literally is like the seven year itch. And like, that's. It's saying in the U.S. right? Like in your. In America. Seven. Yeah.
At seven years, you. You have wandering eyes. Seven years in the business, I kind of was like, gosh, I need to, like you, like you said, like, talk to different types of folks and be intellectually stimulated with something different.
So. So I did some coaching. I still do some of it. I have like a handful of coaches of clients that I coach. That's awesome. That that kind of gets, you know, satisfies that part of life.
But I really like the business still. I really do. And you know, will I exit someday? Probably, you know, like, do I see that happening like right now? No, because it's just not that kind of business right now.
And that's cool.
[00:48:32] Speaker A: Do you know what your multiple would be? We don't have to talk about dollar numbers but multiple because we haven't revealed what your ARR is or any of those sort of things. If someone, if Mr. Acquirer came to you, Mr. Or Mrs. Acquirer or Ms. Acquirer came to you tomorrow and said I'll give you X multiple for what you're doing, do you have a threshold for what you'd be happy with?
[00:48:55] Speaker B: Gosh, I don't, I don't know really. I guess like for a long time in the SaaS. So product services and SaaS are most different maybe in that typically of high growing, kind of seven figure SaaS business is valued on revenue whereas a product or services, you know, valued on EBITDA or SD or whatever.
[00:49:23] Speaker A: Unless you sell to a strategic.
[00:49:25] Speaker B: But yeah, yeah, right. And then it's just whatever they, then it's whatever they think.
So, so like you know, we would get valued on a combination or you know, each side of the business would get valued separately or something. I don't really know. We went pretty far down the path about a year and a half ago and that's what they're going to do. They're going to like, okay, we value this over here at kind of 1x on the services side and we value this over here at kind of 2 or 3x revenue.
That's pretty reasonable. I think. Something like that.
[00:49:57] Speaker A: Yeah.
Would you sign for that at this point in time and let's blend it because I don't know, I've seen higher multiples for the server side. Like if there's a hungry buyer who sees out plugs in to a bigger org and they can, you know, they can eat it on attacks right down and then scale it as soon as it lands and you know, it's like a kind of thing that can happen. That's like upside in that but like all in, you know, 4x5x those sort of numbers, do they like get your eyebrows raising or anything like that?
[00:50:36] Speaker B: I don't, it's, it's not amazing, you know that, that's the thing because I look at, I mean things are weird right now, you know, like in the, in the, like just imagine being here. Like things in the US are Super weird things everywhere because of what's going on in the US in AI and God knows what and chi, like, there is.
There is more. I said this to someone the other day. There's more uncertainty than I've ever seen. Including Covid, because, like, Covid for us socially was horrendous. For us as a business, it was whatever. We're remote already. People don't have to go anywhere to use our service. If anything, they're using it more because they can't go do other stuff.
But, like, right now, I mean, it's.
And I say that because there's a lot of uncertainty, but our business feels pretty solid and insulated. We haven't really been affected by this stuff.
But if I just had a bunch of cash and I had to figure out where to put it, and that was the cash that I was going to need for sending my kids. My daughter wants to go to NYU in four years.
That money's got to make money to send her to NYU in four years, that would be more stressful than just continuing to do this.
And that's the math for me.
[00:52:09] Speaker A: There's a lot of experience and wisdom in that because I count you as someone that you've had a few innings, you've done things that you didn't love in your, like, in earlier parts of your career.
You, like, you have a great level of introspection to figure out exactly what it is that, like, is important to you. And for me, when I hear how you kind of play that back, it really goes back through this kind of these steps of, like, what is it that I need? What is it that I'm focused on? And the reason that I asked that question is in the first place is because I kind of felt like that'd have to be pretty extra normal for you to get excited about. And even then you would probably, like, you'd probably play devil's advocate on it anyway.
[00:52:57] Speaker B: I'm just greedy, maybe. Yeah.
[00:52:59] Speaker A: Well, I don't know. I don't know. I think there's a good level of, like, it's almost. You're quite settled and understand, like, you've had time to view the grass as greener and, like, kind of inspect it and make sense of it and then put it in the context of, like, what your world is. And I think when you're scrambling and you're early and you're trying to figure stuff out and you're trying to get some momentum and maybe even, like, which is a trap that, like, build some profile or whatever, that Might mean it can be easy to take those opportunities without fully considering it. And frankly, I think it's a nice position to be in. If you're working on a business that's healthy, then that you're interested in, that has, like, there's variety in the changes of the market, but it's enough of a riddle and a puzzle that it keeps you coming back and is challenging and interesting in that way, which it hits like. It definitely hits like a bunch of different attributes that are important, I think, for an entrepreneur, whether they know it or not. Like the variety part. Early days, WP Curve got this thing that's growing. Then we're like, we're going to start a podcast, we're going to build some plugins, we're going to start a community. I'm trying to think of other stuff that we did. Dan wrote a book, I went into consulting, like, did all of the things just to get that sense of variety. Because fixing WordPress sites was pretty consistently boring. Like, it's the same thing over and over again.
So, yeah, it's nice. It's nice to hear that.
Yeah. Like, that you have that kind of breadth of view and you recognize that you are onto, like, a good thing.
[00:54:35] Speaker B: Yeah, I. I think that there's in a lot of business the ability to get that variety within the business.
So. So I. I've kind of had different hats and areas of focus, and we even talked about just between the software and the services side. But even within any of those, it's like, okay, this is the kind of season that's how we talk about it. Like, this is the season of, you know, quality on the software side and fixing a bunch of bugs and improving ux. Okay, now is the season of, like, building features and like, really expand this thing, you know, and on those services, it's like, this. The season of, like, we got to get better at video. Like, how are we going to do that?
I think that. I think that I've definitely been burnt out, though. And the times I've been burnt out is when I don't have optionality, when I have to do something and there's no one else and we don't have money to go hire somebody. And I can't just make this thing go away.
And if I.
It's funny, in our family, my kids are both like, don't ever sell the business. Why would you sell a business that, like, is making money? That. That's. That's dumb. My wife is the opposite. She's like, sell that thing and give me some money and you go figure out what to do next.
So that's funny, but I think that probably if you look at the business as an investor, which I think is the healthiest way to look at it, but probably really hard because we have emotional attachments to it, what Warren Buffet would say is, okay, how are you allocating your most precious resource of time?
And, like, what are you getting in return on that? And that's kind of the math I'm doing is, like, we've been pushing really hard on this one side of the business for a while. It's not amazing, like, shift it over here to do something else. Or at some point it probably will be like, I'm done with this, but I don't want to sell it because it's a good business. I'm going to bring somebody in to do stuff and I'm going to go do something else. But that doesn't mean, like, me not being involved every day doesn't mean I have to sell the business.
[00:56:55] Speaker A: Talk to me about burnout.
So you mentioned the times that you felt burned out, scenarios where there's no one else to have navigate or do that type of work. Are there specific examples that you have of it? And were there any indicators leading up to you starting to feel burned out? Because in my conversations with people, generally, it's in the first, like, minute I get a sense of where they're at just by their, you know, their affect, their tone, their amount of energy they bring to a conversation, especially if they're, like, excited to chat and you get to talk to them and they're just kind of like, throw it on reserves. Like, hi, how's it going?
You need a bit of you? Good? Yeah. So.
[00:57:44] Speaker B: Yeah. So I saw this on Twitter, which is where all the world's information comes from, that burnout only happens when you don't believe that the result of your efforts is worth it.
[00:58:01] Speaker A: Like a version of cognitive dissonance. Right?
[00:58:04] Speaker B: And that's exactly it. It's like, I'm doing this thing, I have to do this thing, which is like the layer I would put onto it, and it's just not doing any good.
That's when it's really shitty.
And as a business owner, it's like, as a business owner, it's mostly operational stuff.
If I put my individual contributor hat on, which is mostly just kind of marketing, doing podcasts on YouTube and stuff like that, that's fine because I do it or I don't. I don't have to do that. But, like, I Have to manage the team. I have to make sure we have enough money in the bank to make payroll, you know, all this kind of stuff. And sometimes I just don't want to do that stuff because it's like, gosh, this is just lame.
But sure enough, like, that has to be done, and I'm the person that has to do it.
[00:59:01] Speaker A: Have you found you've hit that threshold of burnout when you've done it the other way? And by the other way, I mean run too hard and too fast at something where you should be kind of pacing yourself. Because that's another way that I see it kind of pop up in founders.
[00:59:30] Speaker B: Kind of. I guess, like, it's a bit of an aside, but. But like, you see all this stuff of, like, the solopreneur online right now, and I just can't imagine anything worse because, like, the thing that I love is, is having a team. Like, I don't. I don't love, like, getting in the weeds at doing the work, but I love talking to the team like that. That's where I want to live is like, I'm the idea guy. No, but I'm like, I have the vision, I have the strategy. I want to help coach up the folks on our team, make sure we're allocating our resources to the right places. Like, that's where I want to sit.
I would be burnt out super fast as a solo guy. Cause it doesn't give me energy to sit and write a freaking PowerPoint or a blog post or whatever. That's just not it. And so if you're asking me, like, have I been burnt out or would I get burnt out by kind of just going too hard at one thing that 100% would be it. As if you're like, okay, you wear all the hats again, good luck. That. That would be terrible.
I think it's a function of, like, my age or time in the business, too.
[01:00:56] Speaker A: Well, yeah, I think, yeah. You are what I would call, in the most complimentary way possible, an experienced campaigner. So, well, well placed. I was looking back from our conversations of circa 2019 as prep for this call, and one of the things that was, I think, pertinent back in those days was figuring out sales, like getting sales nailed, either bringing someone in or doing it yourself. And I think at the time, you were kind of like digging around, trying to figure out what was the. What was ideal for you. And I had to ask, like, where did you land on that? Because it sounds like you still are customer facing and still jumping on the calls and talking through, like, talking through that. Is that something that you now enjoy or is it something that is like part of having like a smaller SaaS company where it's important for you to be the face as the founder? Like, how did you, how did you progress with that?
[01:01:55] Speaker B: So, so we definitely had sales folks, like after we raised some money, that's what we did is we hired a couple sales folks.
They sold on both sides of the business. And the mistake we made, which if you learn anything, please learn this is raising money. And hiring salespeople is bad if you don't have an equally scalable way to generate leads.
So we were like, cool, we have salespeople now. They can go sell stuff. Well, you have to have people for them to talk to that are qualified to sell. And that was the big mistake that we made. And so it was nice and that, like, you know, we have handfuls of sales calls a week at the most. Right. I didn't have to do those. And they were closing a good number. I learned a ton about how to like onboard and train salespeople because turns out you can't just say like, hey, go listen to my last 12 sales calls and do what I did.
[01:02:53] Speaker A: Yeah, doesn't work.
[01:02:55] Speaker B: Yeah, it doesn't work. And so like, gosh, like, we will, we will rate. We will hire another salesperson soon because I think it's good leverage.
My skills are probably better on the marketing side, better suited on the marketing side. Especially with kind of like where marketing is these days is like, I need to be the face of the company and I'm cool with that. I don't have to be the one on the sales calls. So. So that's like our next hire probably.
Yeah, we've done it. We've done it all. Like, I was obviously the only person in the beginning. We had a, we had a part time salesperson and then Covid happened and like the leads just went right because the world just shut down. And he was like, you know, I'm going to go do something else. And I was like, cool, like, we don't have any leads, so that's fine. Um, and we had a period where I was kind of back in the chair, hired sales folks, it did just didn't work out.
Let them go. And I'm selling again now. Yeah, I, Yeah, I think that the found. It's interesting. I think the conventional wisdom would be like, sales is the last thing the founder hands off.
I think the nuance of that is like sales strategy and management is the Last thing the founder hands off. But doing the calls, sure enough, I mean the thing we sell is so straightforward. Like you have a podcast, we produce it, it's this much.
[01:04:33] Speaker A: I love that.
[01:04:34] Speaker B: I mean I tell you one thing I went to anyways, the, the end of that is I, I would hire a salesperson. That's the next, it's the next hire we'll make.
Interestingly, I went to a two day workshop with Alex Hormozi last week.
[01:04:52] Speaker A: I, you know what, I kind of like his stuff. I kind of like his stuff.
[01:04:56] Speaker B: Super, super smart guy. Really, really, really good event. So like they, they're two day things in Las Vegas. So like, yeah, if, if you're at the kind of 7ish figure, like it really, really appropriate. I think they said every sales call in their organization is 100% scripted.
[01:05:18] Speaker A: Ah, okay.
[01:05:21] Speaker B: I was blown away because like mine is just it, it looks a lot like this. My sales calls look a lot like this. But, but I, but I absolutely would like, you know, we record all our sales calls, I would now put them in chat GPT and say like, here are my last 10 sales calls. Build a script based on this. And I would hand that to the person. But because, because like onboarding a salesperson is hard. They're coming from selling, you know, some other kind of software. They ran an agency or whatever. They've never sold podcasting stuff. They don't know who your customer is. They don't know the things that, that you know to do a consultative sales, you know, engagement and so like you gotta help them level up. It's really, there's quite a bit to it.
[01:06:11] Speaker A: I've got divergent questions here because we went down the mistake path and we went down the Hormozy path. I'm going to stay with the mistake path and then we're going to jump back to the hormozy path.
[01:06:20] Speaker B: Yeah, yeah.
[01:06:21] Speaker A: Any other, any other major mistakes that you learn something valuable from? And in retrospect it seems like quite obvious, but at the time it was like a really, you know, you had strong conviction of going one way but ended up going the other.
[01:06:56] Speaker B: Yeah, I, I, we, so when we, when we rolled Podcast Motor into Castos, we had an offer on the table for somebody to buy it outright.
[01:07:11] Speaker A: Podcast matter.
[01:07:13] Speaker B: Yeah. Yep. The services for folks who, you know, our Castos production service, as it's called now used to be called Podcast Motor and somebody was going to buy that because it was its own business. In retrospect, that could have been a good decision. I Don't know, like it's hard to say. We, we, we have a bunch of things where we cross sell and we have a bunch of SEO juice and all this kind of stuff. Like I, I don't know but, but there's probably a world where if all I had to focus on was the SaaS side of business, it would do better.
[01:07:49] Speaker A: And without getting into the details, was there a decision point for you to not go through with that or.
[01:07:58] Speaker B: It was a really shitty offer. It was like one times revenue with a three year earn out and all this kind of crap. Like yeah, but, but, but like the math for me kind of was like ah, take a win.
It. We'd just joined Tiny Seed I think and I was like this, I'm gonna go rule the world.
[01:08:25] Speaker A: It's my time to shine.
[01:08:27] Speaker B: It's my time. Yeah. So, so like I think, and I think that's probably applicable to a lot of folks where it's like, hey, just run one business at a time, you know, because like I'm essentially running two businesses or two business units in one business.
It's tough to do anything well, much less two things.
[01:08:53] Speaker A: 1X revenue. I mean, I don't know, I couldn't, knowing what I know, like with the straight face, I don't know that I could personally like provide an offer like that. As in having seen some of the inner workings of the business, understanding some of the machinations around like ltv and at that time cost of acquisition would have been, you know, great. So.
[01:09:20] Speaker B: Yeah, yeah, Tough.
[01:09:24] Speaker A: All right. Hormozi.
[01:09:25] Speaker B: Yeah.
[01:09:26] Speaker A: I have a, an old friend, a guy that I've known for a dozen years, recently caught back up with him and I call Mosey is definitely like the new kid on the block for folks who are entrepreneurial. I think it was like there's a time where Sam Ovens was like the guy that everyone was, you know, he was in his suit and doing his thing in New York City and I think he had a bit of a come to Jesus and went to, went down the software route and now Hormozi's the big dog. Like literally the big dog. Like he looks like a big unit. Yeah, My friend hates him. I rate his stuff. I think he's quite funny and he's got some really good points. He does riff a bit. But what else, like what else did you take away from your time in Vegas? Because I know I'm assuming that's a pretty expensive, like a pretty meaningful investment of time and money. So it's probably a few People listening that would love to know like what you took away.
[01:10:23] Speaker B: Yeah, yeah. I mean it, it's a, I think it's a very reasonable investment. You know, it's not crazy, like, yeah, reasonable, thousands of dollars for, for a two day event, you know, so like not, not insane.
The, the thing I took away kind of generally, well, one I talked about, which is like, view your business as an investor. The most important thing that I can do is be a good resource allocator, which, like, if you go up the food chain about 20 steps to kind of PE. That's all they do, right? That's all they do. And I've always said like the litmus test when you're trying to make a decision to say what would private equity equity do with my business? And there's some answers to that that are super wrong. But there are a lot that are right because they're very smart, analytical, not emotional people. And so like they're going to make a lot of really good decisions.
So that was like on a big scale, like the biggest thing I took away, which is like, I need to start making more objective, data driven decisions instead of just like do whatever I want.
And that kind of was like, the specifics of that is like talked to a whole bunch of people, both like other attendees where the average revenue in the room was about 5 million. So legit.
Talked to a lot of people about our business. I was like, oh, we do this and we do this and we do this. 100% of them were like, whoa, the services sounds really interesting.
Not one of them is like, oh, you run SaaS, that's cool.
And the kind of mentors and the folks that are running because he is essentially like a private office, right.
Family office.
And so he's got a bunch of MBAs and all this kind of stuff. And all of them were like, yeah, that's fine. Congratulations for getting a $19 a month SaaS business to where you are. But that's the hard road.
And I kind of thought that going out there and the best part of it was the conviction to believe that.
[01:12:52] Speaker A: I did a bit of digging because I'm always interested when people reference businesses but don't specifically talk about what they are. So Hormozy talks about a photography business. He talks about it in some of his content where he's like a, I think he's like a silent partner, but is an owner, whatever. And so I did a bit of like research. It wasn't super hard to find what this photography business was.
And I dug around and I can't remember. I can't remember the name of the name of it off the top of my head.
But once I saw the pricing and I saw the packaging, I was like, this guy gets it. So they take these photos and it's like a studio for, I think, kind of like, you know, kids, like, they do dress up photos, kind of like fantasy photos of different kids being fairies and these different things. But as I looked at the pricing started at like 500 bucks and went up to like 10 grand for photos, like a printed photo. And I was just like, this is absolute as far as like maximizing the revenue from a transaction and knowing what the thresholds of pricing are and, you know, not anchoring to time and materials, but actually like perceived value of what that product is.
The equivalent is doing something in the wedding industry where you're charging 3 to 5x what the actual rack rate of something is.
I mean, got a lot of. I got a lot of. I got a lot of respects for someone that can, you know, like, it's not a business that I'd necessarily like. I wouldn't want to have a photography business and deal with the, like, the overhead of all of that and have to go into a studio and do the rest. But this thing, like, it's kind of. I think it's not franchise, but they've got like multiple regional places. Doesn't drop them. Yeah, yeah. And that's probably. That probably feeds into the validation of understanding like what the service, like what a service can actually be in that way because they've got this, this thing is like, looks like a money printing machine and it's effectively a photo studio. And I love it. I love stuff like that. Like, that stuff gets me so fired up because you don't have to figure out, you don't have to be like some product savant who can come up with this brilliant idea and see all these different things that other people can't see and raise money and do all this stuff. Like you just like provide a service, anchor your pricing to some sort of emotion and some sort of meaningful experience, and then just like print money. Like, hell yeah.
[01:15:33] Speaker B: It's that easy. Yeah. No, I think I agree.
He's an easy guy not to like because he's, you know, come now with the tank top and the, the guns and the flannel and the crocs and all this kind of stuff and.
But, but if you just listen, like, yeah, he's. He's a pretty smart guy and you could tell, like he was up on stage just like taking questions and stuff.
Knows his forwards and backwards about, about the whole stack.
And then his. And then his wife is more impressive on the people side.
[01:16:08] Speaker A: Yeah, okay.
Yeah, yeah, good. Well, yeah, that's one, one, one positive review. I'm going to share this podcast with my friends. Give them another go.
[01:16:19] Speaker B: Yeah, yeah. Yep.
[01:16:24] Speaker A: Well, I think that probably brings us to about time, man. So, so appreciative of you being willing to jump on and kind of talk through some of the highs and lows. Yeah, I'm, I'm stoked. I'm just stoked that the services part of that business lives on and you're hearing me on the roll up idea and there's some brainstorming to do there. But yeah, thanks. If people want to find out more about you and your business, where should they head to?
[01:16:51] Speaker B: Yeah, I think so. Twitter is the place I hang out mostly. I'm the Craig Hewitt there. I'm the Craig Hewitt on YouTube. Craig Hewitt.com I post occasionally, but you can get in touch with me there. Would love to chat.
[01:17:07] Speaker A: And if people need podcast help or hosting or production, where do they need to go?
[01:17:12] Speaker B: Yeah, castus.com.
[01:17:15] Speaker A: All right, cool. Thanks, Craig. Appreciate it, man.
[01:17:17] Speaker B: Thanks, man.
