Episode Transcript
[00:00:00] Hello. Welcome back to Rogue Startups. I'm your host, Craig Hewitt. I want to apologize. It has been two hot minutes since I've recorded an episode and have shared something really important to me, which is just like what's up in my life and my work life and this journey that we're all on as founders.
[00:00:17] And that's my bad, right? That's my bad. It's my fault for not sharing more updates more regularly. It's been like six weeks since I've published an episode. And so coming to you live here with an update of what's up with Me, I have a longer bit summarizing something really cool that I did recently that I published on my YouTube channel. But I want to share it with you here in the podcast as well.
[00:00:38] But before I get to that, I just want to share like legit what's up in the business these days, what I've been doing, what I am seeing working, and what I'm thinking about.
[00:00:48] So I think first of all, like the elephant in the room is AI.
[00:00:52] How are we all kind of thinking about AI? What are we doing with it?
[00:00:56] I see from a creator perspective a lot of uncertainty. If I'm honest and angst everyone from, you know, Justin Welsh and Jay Clouse and all these creators that I really respect and frankly look up to from a personal and from like a Kastos perspective of like, that's the temperature kind of that we should be looking at when it comes to like what our customers are or should be thinking.
[00:01:20] And like the jury is still out. Definitely on.
[00:01:24] It's. It's useful, right? It's useful. It's saturating a lot of markets and it's making creating really compelling content harder because there's just so much more of it.
[00:01:34] So I think like the obvious question is like, what do we do from there, right? Like, do we do we lean into it and use AI to create a whole bunch of content?
[00:01:43] Yeah, probably that. That's kind of where I'm leaning and I'll talk about what specifically that means in a minute. But then I also think there's like the counter to that, which is like, hey, what is AI proof? And you see this coming about in a couple of places. One is like on podcasts and YouTube specifically, just a very natural style, right? So like I'm just not going to edit this, so you're just going to have to deal with me not being color coded or color whatever correctly on the video. And I'm going to say and allot and all that kind of stuff. But it's because now, you know, like, I'm not a bot, as much as my son jokes with me that I'm a bot sometimes, but I'm not a bot. And so I think from a stylistic perspective, the content that we're creating, if it looks and feels more real, that's us leaning kind of away from AI as a way to create really genuine content.
[00:02:35] So that's something.
[00:02:38] The other is just like the channels that we're using, right? I super bullish on. I am super bullish on YouTube and podcasting because it's hard for AI to make this kind of stuff, right? It's really easy for AI to make a crappy LinkedIn post or a substack post, and we'll talk about substack. That's a whole big old hot mess that I definitely have a perspective on, but I think that's just like, it. It's like we can lean into it where AI is currently really good at making text, it's getting better at video.
[00:03:05] We can use it to create more there, but that's low quality, I think. And then from a medium or channel perspective, we can lean into more multimedia kind of avenues like podcasting, audio and video.
[00:03:24] It's why shorts are so popular, where folks are just recording on their phone and it's lo fi, so that that's really going well. The other part of this, I think, are events.
[00:03:35] Events are probably the best place to find, like, Alpha these days. I think if you have the capacity to go to an event, and I've been to three this spring.
[00:03:45] Um, I think it's just a great way to network and to find opportunities and to learn and to really get engagement, which is something that we're all just, like, so dire for.
[00:03:54] Coming off of COVID back to the reality. I know Covid's been a few years, but I think we're all still kind of fucked up from that time, personally speaking, at least.
[00:04:02] And that, like, events are definitely, like, full steam ahead now, but they are the place where you can know that that person's not a bot. They have actual interesting things to say. You can form real connections with people and. And every single event that I went to this quarter echoed and resonated that. So I would just say, like, as we're thinking about AI and content and marketing and brand is like, I want to at the same time, lean into it and use the heck out of it to create more.
[00:04:29] When I have to create things that AI is really good at, and then I want to lean away from it, to say, like, hey, how can I do things that are really uniquely me? So that's like in person stuff.
[00:04:41] It's audio and video that like, I just air quotes can't create.
[00:04:46] So, so that, that's kind of one thing how I'm using AI.
[00:04:51] So, so let's just say like, all of my marketing and content is around video and like YouTube primarily these days.
[00:05:00] I'm using AI heavily there to create the basis really for a lot of my content.
[00:05:07] So, so I'll talk about like the Castro's channel and talk about my personal channel. On the Castos channel.
[00:05:12] We have two buckets really, that we create YouTube content in one is like success. How to stuff, right? This is like the SEO blog post version of a YouTube video where we're doing the skyscraper method, basically, right? Taking a topic, hey, what's the best, you know, existing pieces of content out there on this topic? How can I make this the ultra best version of it, right? And using AI for this, it's really quite handy. Find the five YouTube videos on a topic that I like, stick them all into ChatGPT, make the ultimate version of it, and then I shoot this as a video. That's about half of our content, and the other half is product marketing in video format. So we just released hybrid podcasting, which is going to be coming to this very podcast soon. So you're going to have the ability to get like extra perks as a subscriber. I'll share more about what hybrid podcasting is in a minute, but we're doing a lot of video content around what hybrid podcasting is, how it relates to you as a creator, different integrations that we have, different ways you can use it to either build your email list or to monetize your content directly.
[00:06:21] I'll take the, I'll take the detour now to talk about, like, what hybrid podcasting is and how it kind of can relate to you maybe, and how we're going to implement it here. Let me say how we. How I am going to implement it here on the podcast.
[00:06:39] So hybrid podcasting is a baby of public podcasting and private podcasting. So think of it actually like substack, right, where you have a freemium type model to content where you can have some public and some private content all in the same feed and you can use it to either gate via like a payment or just email list, right? So, hey, drop in your email and you get access to this extra content that regular old folks don't get access to. You also have the ability to get some, what we call subscriber benefits where you can get like episodes a few days early, kind of like the premiere section, you know, feature on YouTube ad free episodes or access to the back catalog. So for this podcast, I'm probably not gonna do it, but I could. I could say he.
[00:07:29] Public access to this podcast only is available for the last 90 days. If you want access to the stuff Dave and I talked about seven years ago, you got to drop your email address in here and you'll get a special feed link to put into Overcast or Apple Podcast or whatever on your phone to access that back catalog. So it is you are enrolled as a private subscriber as we talk about.
[00:07:53] So you are an individual subscriber to this podcast, have a special feed link to be able to get the special benefits of being a private subscriber in this hybrid podcast. That's a lot. You might have to rewind and listen to that again. But really, hybrid podcast means there's some public content that's available to everybody. There could be some private content. So like, I recorded an episode that I probably am not going to release to everybody because there's just a lot to it. I'll say there's a lot to it. It was really, really good. It was really challenging for me. So I just am not sure I want to share that with the ent, But I might put it behind essentially what is like an email wall, right? Like, you have to give me your email address, I want to build my email list, right? All this kind of personal brand stuff, and then I'll share that with you.
[00:08:38] So it could be some of that private content. It could just be that if I get my shit together, you will get episodes three days before everybody else. So that kind of early access stuff is a subscriber benefit of hybrid podcasting. Anyways, we launched hybrid podcasting a few weeks ago at Kastos. It's like going really well. We have dozens and dozens of customers using it and using it in some pretty cool ways. Part of that is we also launched at the same time, maniacally, an integration with Apple Podcast subscriptions to allow you to do exactly the same thing in Apple Podcasts itself, primarily as a paid vehicle. So you can say, hey, and if you look at podcasts like Diary of a CEO, this is what they do. They have some public content, they have some paid content. You can pay to get access to episodes early. All the same kind of parameters of hybrid podcasting, all just in the Apple Podcast mobile App and ecosystem and includes payments. So. So that's so. So hybrid podcasting is kind of a tool. Apple podcast subscription is a vehicle that you can or cannot use to mostly monetize your podcast. Write it within the Apple podcast ecosystem. So pretty cool stuff will be coming to a rogue startups podcast near you soon to where you can drop your email in to get special stuff that I don't release to everybody else.
[00:10:02] Frankly. We have kind of one more feature that we need to build around this which is like a way for us to collect email addresses so I don't have to create another page. I mean I guess I could do it like on my personal site to let you opt in and then we have a connection with convert Kit kit already to where like it automates the process of adding and removing you as a private subscriber anyways, but I just want it. We're going to build it right into the castus websites, which roguestartups.com is on the Castus website right now. So I'm ultra caffeinated. That's a short version of what hybrid podcasting is and that's been like all of the content that I've been creating recently. So back to how I'm using AI using it very heavily on the kind of like Skyscraper blog Post as a YouTube video kind of model, which I think is fine and like serves a purpose right. I think like that can serve like the reach and trust factor a little bit on on YouTube. Probably the way we sell stuff on YouTube is via showing the product and what it can do, which AI definitely just can't do. And that's just me using screencasting.com or whatever it is Screen Studio on my Mac to like create really great screencast. So from a content perspective that's what I've been doing on the Castos channel on the personal channel at A really interesting insight from a YouTube consultant recently which was that I can and should be thinking about using all really all of my personal assets or social channels, but especially maybe my personal YouTube channel to grow the Kastos brand.
[00:11:42] So we've looked at some data around like other podcast specific YouTube channels and they're just kind of small. Like there's not any podcast specific ones that are like over a hundred thousand subscribers.
[00:11:55] We're at like 2, so like almost 3,3000. But like probably easier for me to create content on my personal channel and that then be associated with and me mention things like Kastos just like I'm doing here and just like this podcast has been for years to grow the Castos brand, the Castos YouTube channel. So, so, so that's how I'm kind of thinking about my personal YouTube channel and creating content. There I am doing some coaching, and a lot of that is around sales, marketing, being a founder, all that kind of stuff with the goal of like, hey, that's just a bigger tam. It's a bigger addressable market, arguably like more interesting content than something very niche like podcasting.
[00:12:35] Appeals to more people, has a broader kind of swath of.
[00:12:40] Of interest.
[00:12:41] Some of that will trickle over to the Casto side of things and benefit that YouTube channel and the brand in general. So that's kind of the hypothesis that we're going under. And a lot of that is because, like, we've. We've created a bunch of podcasting specific content for a long time and just not seen it really dramatically move the needle. So trying this bit of an adjacent approach as an experiment to see kind of how it goes.
[00:13:08] AI coming into play a lot on my personal channel with a lot of involvement for myself. And I think that's where if you just like, out of the box, use something like subscriber AI, it's not great because it's just regurgitating all the garbage that is already out there in the world. And this is like where AI eats itself, right? It's like it's got to get trained on new and interesting information. And if all we're doing is just recycling old stuff, it's just not that helpful. And so what I'm doing is building the kind of human in the loop element to a pretty sophisticated make system that I'm working with somebody to create. Where I have a topic, maybe it outlines the gist of what we're going to talk about, but then I go and say, okay, cool, here's my unique perspective on this thing. And this is what I want to contribute to this, to make it me, to make it my own, to show the shit that I've learned of doing this for 10 years and it being valuable to the world.
[00:14:07] So that's like how I'm using AI right now. I believe video is hugely important. I think podcasting is also very important. I think YouTube, just as a channel, is just. There's just so much to the reach of YouTube that it is probably the place we all should be creating content.
[00:14:27] I gotta talk about substack because it's been a few weeks, but this whole thing, you know, fucking Justin Welsh. As I'm moving to substack and I have my Own, you know, newsletter over there. Like I think that's fine, but I think the, I think the, this is like the symptom, the cause is exactly what I said at the beginning which is like AI is just killing written content.
[00:14:49] It's killing written content. It's definitely killed web based SEO written content. I think the only play for creating any type of content anymore is on a platform. And I think that's why people are seeing even like social media, you know, reaches down all this kind of stuff. Twitter, LinkedIn is saturated. All this kind of stuff. We're looking for new alpha really in a platform because the smart creators are saying like, hey, I gotta create on a platform like a LinkedIn or a Twitter or an Instagram or a substack. Now I'm looking for the biggest kind of alpha opportunity and it may be that that's on something like substack, but something with an algorithm where you can be discovered and people can kind of connect the dots and then go and engage with your brand.
[00:15:33] But, but I think like the premise probably is that like AI has not ruined substack yet. I think that's really like what it comes down to because like it, it largely is ruining everything else. Like you just go look at Twitter or LinkedIn and it's just like and, and I'm guilty too. Like I use AI to write my LinkedIn posts. Sure enough, like I look at them and I want them to sound like ideas are coming from me, but like I'm not typing the words very often.
[00:16:03] And if you say that's the case, let's just say for everyone then the utility of a platform like that has gone down a lot.
[00:16:11] So, so like I just don't put my eggs in that basket. And I think that's why like saying oh, I'm going to move my effort, my emphasis to something like substack is like just building another sandcastle, right? Like the same thing is going to happen. I'm going to go repurpose all of my crap on a substack now and, and in six months like that alpha is going to be gone. So I think it's just a little short sighted. Like sure. Is there an opportunity there right now? Probably they have this concept of like post just like YouTube does. And by the way seeing some interesting engagement with YouTube posts, which post is like a text post in YouTube in addition to shorts or longs. So probably worth posting your shit there to kind of see what kind of engagement you can get. But anyways, on the personal side, a quite Sophisticated AI and make setup with agents to help me.
[00:17:07] I'll come up with the idea. It gives me kind of the 80% first draft. I give the input. It kind of solidifies the rest of the YouTube script. From there, I shoot the script, send it over the editors, then use the transcript from that finished video to create all the other stuff. LinkedIn blog post, YouTube posts, email newsletter, all this kind of stuff, right? So it's all the stuff we're all probably manually doing, but literally just going to be like click of a button. All the rest of that stuff happens. So pretty excited about that. Hoping to really amp up my output there over the course of the next like few weeks.
[00:17:41] That is almost done, I think.
[00:17:43] So with that, I wanted to share something I published on my personal YouTube channel. So I'm YouTube.com@thecraig Hewitt. So I'm TheCraig Hewitt on Twitter. So just, yeah, I'll put a link in the show notes. But YouTube.com hecraghewit my personal channel. I went to a scaling workshop with Alex Hormozi two day event at his office in Las Vegas and it was really great. And I recorded kind of a retrospective is about 30 minutes. So this is gonna be a super long episode. But I might attach that to the end of this episode here and I hope you enjoy it is really in depth. My kind of retro on these two days is really, is really, I think, very good and really interesting. And I won't spoil it anymore. But we'll just cut now to me talking about kind of what I learned and what I take away from the event, what it means for me, what I learned about Kastos as a business and where I'm focusing kind of my time and energy and effort here going forward. And so with that, here's my take on the scaling workshop with Alex Hormozy. Let's roll.
[00:18:54] Okay. Hope you enjoyed this episode. I am again very sorry for it being so long. I already have next week's episode recorded ready to go. It's with the team right now. It will be out Wednesday, June 4th with a guest that I think you're going to love. I loved the interview and I can't wait to share with you. So until next week, thanks so much.
[00:19:14] So first of all, like the program was amazing. Like really well put on. By far kind of the most professional and genuinely great professional events that I've ever been to. And I've been to quite a few of them. We started down on the first day was presentation style where they had speakers on a stage talking to us about our businesses and frameworks and things like that. And the first thing I took away was really that. And this is a quote from Uncle Warren, as they say, is great. CEOs are wonderful resource allocators. I think I'm a technician often in my business and I should be looking at it more of an investor. And the Warren Buffett mindset here is your number one job is to reallocate resources, money, time, people to the highest leverage activity.
[00:19:57] And I think the realization for myself and probably most people watching this video is we're misallocating team budgets on the wrong things. And for us, that probably means we're over indexing on product. And I think most SaaS people probably are and less on growth and even like our professional services side. I'll talk more about that in a little bit. But this is the mega trend or theme from the first part of the session, which is, are you focusing your time, energy and focus on the right thing? And if not, you need to fix that.
[00:20:27] They talked a lot about Alex's theory of constraints, which means like, successful businesses solve the right problem in the right way, you can solve the right problem the wrong way, you can solve the wrong problem the right way and the wrong problem the wrong way. That's super bad. But the best businesses solve the right problem in the right way way. And I think Elon is a really good example of this. Right. Elon always knows what that number one most important thing is, and he focuses maniacally on it and really goes all in. You hear about him, like sleeping on the factory floor until they get the wings on the X or the doors on the X wing. Right. For the model X. Right. And so I think the question that we should all ask ourselves is what question, if answered, would remove my biggest bottleneck and the business? And I don't know what that is for you. I know what that is for me. But I think we should all ask ourselves, like, what is that? And how do we focus our energy and our resources as a business on this? We next moved into filling out a scorecard where we talk about kind of the six metrics that are really important in our business to think about what the real value is. So it starts with like revenue. So just how much money did you make? What growth rate are you at each year? Ebitda. So this is earnings before interest, tax, depreciation and amortization. This is margin, right? Ebitda margin. So what's that? Profitability, efficiency of the business revenue Retention you might think of as the inverse of churn. So if your monthly churn is 2%, your annual churn is that times 12, 24%. And so your net revenue retention would be 76%. And they gave multiples or multiple modifiers of each of these to the value of your business.
[00:22:07] So most businesses aside from high growth SaaS are valued on a multiple of EBITDA. And so you say EBITDA ranges. So like EBITDA, over a million gives a certain multiple, under a million gives another multiple. Over 10 million probably gives an even higher multiple more. Bigger businesses are worth more.
[00:22:25] And then things that detract from it subtract from that revenue multiple to come to the overall like value. If someone's going to buy your business, this is what they're going to pay. And then LTV to CAC ratio. Right. Lifetime value of a customer, which they define slightly differently than I had previously. And I think if you're a SaaS business or you're not, it could mean different things. And then CAC customer acquisition cost. Right. How efficiently are you acquiring customers? And they had some benchmarks. So for SaaS businesses LTV to CAC of 3 to 1, I think that makes sense. For services business there was quite a bit of brick and mortar professional services, you know, those kinds of things there, 10 to 1. So that was interesting. Talking more about LTV to CAC obvious right here, but things to lower CAC would be getting better lead magnets, stronger offers, improving ad creative and funnel conversion points.
[00:23:17] Talked a lot about ad creative and just the number of creatives that if you're running paid acquisition you need to do, which was like dozens per week. And so I think this is way more than most of us think we really need to do to create like a proper paid acquisition process. But that's the reality. And they run a whole bunch of paid ads. So I trust their judgment more than most people looking to increase ldv. Right. Obviously raise prices, lower your cogs. This is too gross margin, repeat purchases. Not everyone in the room was a SaaS product so they didn't have built in recurring. Some of them had reoccurring. So the same customer would buy from you multiple times but not on a subscription. Adding upsells, cross sells and downsells. This comes a lot more from the info product kind of world. But I think this is something we could take away. You look at something like clickfunnels, they sell a whole lot of info products and they're a pretty big company. So what's the kind of takeaway we can have there.
[00:24:14] I also look at in the YouTube space something like Vidiq is leaning heavily into coaching. And so my kind of takeaway was like how do we triangulate those and have an info product arm to my business at Kastos and how do we, how do we offer things like services and coaching, which we already do. Should we lean into those some more?
[00:24:32] So those are the kind of things that constitute your multiple in terms of the value of your company. Going the other way is these are the value detractors and there was five big ones. So key man risks, keep person risk.
[00:24:46] So you're too essential to the success of the business. If you go sell this business today, if it's sellable at all, you will need to stick around for a long earn out. That would be a bummer. So the big takeaway here is like doing a time audit. And if you want to do a time audit, I'll have a link in the description below that I've used with my coaching clients. And it's really helpful to see where you're the bottleneck, what you're involved in and then it rates how important this is, but also how much kind of passion and purpose this gives you. I think both those are really important. And the other just leave, go away for a while. They said Alex and Layla take fake vacations every once in a while to stress test the team and then they're there as a backstop. But they want to see what breaks in reality. Not just if you're around and you get pulled into something, but they just actually will go work from home for a couple days. They're an entirely in person team, which was interesting. But every once in a while they'll just go away and see what breaks and they're there to back it up.
[00:25:42] Key customer risk. Any one customer being greater than 20% of revenue is a danger for us. I kind of wondered in the Castos world is WordPress a sort of key customer cohort risk? I think probably they gave the 20% mark because most businesses have a margin of 20%. So if you, if your key customer goes away, you have no margin, your business is in trouble. Key channel risk. All of your traffic comes from one source. For a lot of folks this was SEO for a long time, but you can imagine this is things like paid acquisition. If, if your meta accounts get banned, you're in big trouble.
[00:26:16] And they had a really interesting kind of rule of thumb here is it is less valuable to your business to add another channel to Prematurely optimize out of this key channel risk if you're doing less than a million dollars a month.
[00:26:30] So this doesn't mean you can't have multiple channels, but they're saying don't optimize away from a channel that's working because you have key channel risk. Until you're a million dollars a month. There's always more kind of juice in the rock, right? So like just keep going after that one thing that works, I would say until you're a million dollars a year. And then just from like any channel should be able to get a good business to a million dollars a year. But a million dollars a month is the place where they're like, okay, you have enough kind of critical mass in the business to where you can start diverting some of those resources back to the very first point of being good allocate resource allocators.
[00:27:09] Then you can divert some of your attention because you have a reasonable kind of risk criticality in the business at this point.
[00:27:16] Key market risk. Right? So are you a newspaper, right, that newspapers just suck? So do you have a shrinking tam, geographic limitations or some kind of disruption in AI is the obvious one that a lot of us are thinking about right now is do is my business just not going to be here? If I'm an accountant right now or at a graphic designer, am I like, shit, this is about to be a really big deal. The one who already, I think is massively disrupted are things like content writers. And then do you know your numbers? Right? Key data risk. If someone came to you and said today, what is your LTV to CAC ratio, would you know and would you know what to do with that information? I think it's the other part of it. They talk about data box as a tool they use, but there's more I'm going to get into about pushing versus pulling metrics in a minute. But suffice to say that you should have data available to you anytime. And if you're living in this Google Sheets empire, as they say, you're toast.
[00:28:09] Reframing the business as like an investor would like. I have often thought like the best litmus test for a business could be like, if private equity buys my business today, what are they going to do tomorrow? And that's a pretty good question to ask. And for us, the interesting thing here is so in Castos, we have our hosting side of our business, so we're SaaS, which is about 70, 75% of our revenue. And then we have Castos Productions, which is our professional Services we do done for you, editing and production, growing the hosting has been pretty tough. And so I'm looking at this saying, like, would a private equity company come in and say, hey, you should just keep chasing this thing because it's SaaS or the Castos Productions. Like everybody I talked to at this event, when I talked about my business, they're like, wow, that services sounds really great. You're getting like 2,500 bucks a customer, easy to fulfill. You have the team, you have the process in place. Why don't you just grow that to like a million? And that's kind of my big takeaway spoiler alert. It is focused a lot of my energy there. So I guess the point here is like the boat you built doesn't need to be the boat you sit in. If there's a smart pivot that makes sense in your business, maybe that's what you should do. Okay, so next I talked about sales funnels. And for us, this is what a lot of my work is going to be is a combination of organic content and ads to a lead magnet. And if you're watching for my coaching, which is who this video is geared towards, there's a lead magnet below, which is that CEO or founder time audit spreadsheet. I want you to fill it out for a week, see where your time is going, see how valuable you think that time is, and optimize your schedule accordingly. So what can you stop doing, what can you delegate and what can you automate with AI? And so this is a very basic workflow of what? Any kind of funnel that's driven by content and content creating can be organic content like this or it can be ads. And so these are the lessons that I learned. Dicky Bush has a really good retro on their experience at the kind of next level acquisition.com program. The one I went to was a few thousand dollars. The one he went to was tens of thousands of dollars. And so that would be an interesting one to check out for y' all. But my commitment here is to get paid acquisition and a funnel in place to get our productions business to a million plus a year, which is pretty awesome.
[00:30:19] I talked about its sort of info product. I think that has that's probably what will unlock paid acquisition for the hosting side of the business.
[00:30:26] A couple of examples here that are really great and we'll be looking at that after I get talking about focus paid acquisition and content in place to grow the production side of our business at Kastos. And really taking this and distilling it all down into. What I need to do now is, is focus in more concise chunks. I've been ineffective. I think if I'm honest and really my work life should break down into three buckets.
[00:30:54] From the individual contributor side of things, at least one is content. Right? I need to be recording YouTube videos, I need to do podcasts, I need to do emails, I need to do nurture sequences, I need to optimize and create for our ads programs, and I need to do sales calls. And so I'm looking at breaking these into three hour blocks throughout the day and the week. And ideally I would have two of each of these three hour blocks throughout the week. And if I can do that, I think we'll win. And this is just an easy way for me to say, hey, this is what being productive looks like. And it's not overcomplicating it. It's just setting a timer and working for probably an hour and take a little break, work for another hour, take a break, work for another hour. And if I can do that, I'll get a ton of shit done.
[00:31:34] Talked about this. I think productions is the meaningful growth opportunity for our business and that's where I'm going to be focusing. Okay, so day two inside the acquisition.com scaling workshop was. So the first day was a bunch of us sitting in the audience and there were people on stage talking. Day two, we were broken into roundtables. There were a dozen, maybe 15 people. So in the event overall there was about a hundred founders in the roundtable. There's about 15 people per roundtable and team. People from the acquisition.com team would come around and chat with us. The first one was Frank and he talked about managing and hiring.
[00:32:12] One of the best anecdotes he gave was he likes to hire from specialist job boards. So things like for YouTube, YT Jobs Co, which is something I knew of from one of my podcast episodes on rogue startups. But the place that he likes to find these is if you're not sure where to hire some obscure role, go to Google and say role. So video production assistant job board. And this is a cool way where he finds some of these niche job boards like YT Jobs Co instead of just Indeed or LinkedIn or something like that. They talked about Layla's accountability formula a little bit here. And it is accountability equals parentheses, which are of math nerds means the stuff inside parentheses happens first expectation plus measurement times feedback. So add expectation and measurement. First times feedback is what accountability is from a culture perspective. I was shocked in A good way at how much ownership.
[00:33:12] Everybody that I met took over their role in the company and in the event. And it was amazing. They were all a players. They were all empowered to do their job really well. And this is something I'm taking away from my role as CEO and leader at Kastos is I need to set the vision expectations. I need to have a way that this is measured and reported to me, and then I need to get feedback. I think I just need to level up all of that. And that was a big meta takeaway for me, is like, that team was amazing and our team is amazing at Castos. I just think we all have room to level up. And since I've been back, I've already started doing that with just giving a little more challenging expectations to our teams. I think I see some folks on Twitter talk about, if you're Mr. Nice Guy, you're going to lose. And I think I can be nice, but a demanding leader, and I think people respect that, too.
[00:34:01] Okay, so next, the four R's for job descriptions. So role, responsibility, results and requirements.
[00:34:07] What they this is for writing a job description. But for existing team members, what they like to do is write up the job description, have the employee evaluate themselves against it. And so green, yes, I'm doing this well, Yellow, I'm doing this, but it needs work. Red, I'm not doing this at all. And then add bullet points in below to have things that they're not doing that they should be doing in their job description. So we have job descriptions for our employees. At Castos, we don't evaluate this very often.
[00:34:38] We don't do things like annual reviews. And I think we should. I've had this allergy to it that, hey, we're a startup and I'm a cool founder. We don't need this stuff. But I think the reality is us as founders have this aversion to these things, but our employees don't. That's why they're employees and not entrepreneurs. And I think that giving them the peace of mind and the reassurance that they're doing a job is part of our job and we should be doing this.
[00:35:04] Talking about KPIs. So they like to advocate that each department has two KPIs, and one of these are things that they're going towards, they're pushing towards. So, like growth leads, booked calls or whatever. And one of these are pull metrics. So things they're trying to reduce. Things like churn.
[00:35:20] And they made this point several times that they want to Only focus on inputs that they can control. They talked about this during COVID The world is freaking out. And they actually did pretty good because they were just executing on things they knew that they could do and do well.
[00:35:33] So things like email sent versus like leads closed. There's a lot that goes into leads closed. But email sent you can say hey dude, did you just send 500 emails this week? Or not like that. That's kind of it from a sales system and culture perspective. I mentioned this, that their sales rep across the organization one entirely talk from a script. So there's never any kind of just winging it on a sales call. They have scripts that are written and reviewed and analyzed and updated all the time. It's a living document.
[00:36:00] And those sales reps log daily sales activity in a Slack channel every day across the entire organization. So calls made, people that showed up, qualified objections closed. All this kind of stuff. So quantitative and qualitative. And then the sales leaders review and engage and give feedback on that every single day.
[00:36:20] They like to maintain a feedback ratio of 10 to 1. So 10 positive and 1 negative.
[00:36:26] And when they're giving negative feedback or any kind of feedback, they like to have this start, stop and keep. So what do you want someone to start doing? What do you want them to stop doing? And what is their what are they doing already that you want them to keep? And as they're an in person team, they always want to give any kind of feedback in person, not on Slack and give it in the moment. So it has context.
[00:36:46] I've seen this on some of Alex's video content, the Core 4 rituals. So they have daily call reviews. It is AI supported now. And they talked about how they're recording these.
[00:36:56] I'm using Fathom. I like it a lot. They do have weekly one on ones between sales leadership and reps. They do role playing every day like overcoming objections, high IQ listening, things like that. And then real time reporting in Slack. And their CRM hiring was a big topic at the event in general.
[00:37:17] And one of the things that we asked about is, or I asked about in our small group is hey man, you guys are all super young. Like how do you there? I don't think there's anyone or they're more than 40 which like that's cool but that's an outlier. How do they find all these rising stars who obviously knew their stuff. And what they said is it's not the soft skills or the culture fit, it's the technical skills. Like you have to have the technical skills you have to be good at the thing that you're doing before you can be that real a player. The next would be culture fit. Like you have to be a hard worker, you have to be able to communicate, you have to do all this kind of stuff that kind of leaks over into soft skills. But like you don't have the technical skills. The others just don't matter. And I think that's probably where like BNC players come if I'm honest. And the only way to evaluate the technical skills is to just have them do the work. So they said their interview process is six interviews and several parts of that are some kind of test projects. They fly people out to Vegas for full days for like higher end things because they're asking people to relocate and they pay like way above market rate.
[00:38:20] They and people in the small group talked about how hiring like former athletes and military folks was really helpful, especially in sales because they understand the power and importance of discipline, practice and daily repetition. And that totally makes sense. And that tracks with my sales experience too.
[00:38:36] So sales comp. This one makes a lot of sense but is really reassuring is like to figure out like the inputs in the quote and things like that. Just get like total comp that you think somebody's going to expect.
[00:38:46] Have some kind of natural split. For me it's about 50, 50 between commission and base and then figure out what the inputs need to be on that. So what's your target size and how many deals people need to close there?
[00:38:58] They gave an interesting benchmark and this just flew out and nobody really said anything about it was from a company kind of resource allocation perspective that sales and marketing spend needs to be 15% of total revenue.
[00:39:12] And at first I was like whoa, that's not very much. And I was like, wow, that's about where we are right now. And I feel like we need more sales and marketing firepower within the organization. I think the reality is like we, and that's just me right now just need to be a heck of a lot more effective at sales and marketing. Bummer. But that's the reality.
[00:39:30] Jacob talked about how for most organizations the middle of the funnel is the lowest hanging fruit. It's not like getting more eyeballs or converting them, but it's actually just getting people who already engaged with you and bringing them to the finish, finish line and sending things like the nine word email. Hey, is launching a podcast still on your roadmap for Q2? They don't do any kind of like fluffy re engagement. Hey, here's a Blog post we just sent or hey, here's a case study or anything like that. Just, hey, do you want to buy our stuff? I talked about how sales and marketing just needs to be a little more effective. Alex is putting out 450 pieces of content every week across YouTube, email, all the social channels. I don't expect that I can do this, but I can probably take it up a fair bit from where I am now, which is like one long form piece a week is all I'm really putting out. And some just kind of random stuff. Their suggestion for me at Casta's was to create thought leadership type of content. So one was like, hey, break down the Diary of the CEO podcast, which is arguably the best kind of B2B interview style show, and talk about how Stephen Bartlett does such a great job. And this makes a lot of sense because a lot of our customers come to us at Kastos and they're like, hey, how do I make a better podcast?
[00:40:39] And I'm like, gosh, like, it's really hard and you just gotta do a good job. I could have content out there that does a good job of this. I put this together with AI interestingly, and it did a pretty damn good job. I agree with a lot of it. So I'm not having to come up with this from scratch. I'm able to leverage AI to give me a good starting point for this. And we'll be publishing some of that to the Kastos YouTube channel soon. They talked about the ICE framework and we use this from a product perspective, but they do this kind of for everything. So impact, confidence and ease. I think it's a good framework for kind of deciding where your priorities should lie. From a paid acquisition perspective, one of the things that is like overlooked a lot is the landing page that we're always thinking, like creative probably first and probably for good reason, and then copyright, headline, body button, all that kind of stuff. But then like the landing page should be tested quite often.
[00:41:29] They talked several times and in several situations about how they like to start with agencies. And I've heard Alex talk about this on YouTube before. They like to start with agencies because it gets you from 0 to 1 pretty quickly. But then 1 to 10 typically is in house. And what they do is they'll bring someone in house once the agency gets to some kind of like good level and then say, okay, agency, your job now is to train the in house person until they're better than you. And then you keep the agency on so you're double dipping or double paying a little bit here. But I like this because I agree, like, working with an agency is great because it just gets you out the door and they bring all their best practices and all their libraries and their graphic designers and all this kind of stuff, and it gets you to a reasonable starting point. I think the downside of an agency is sometimes they don't have all the context that you need as a business, and that's where Bring it in House really helps. So what I took away, like we're working with an agency right now for paid acquisition at Castos, is I probably need to give more of my opinion of the company and the product and the market and where we're all going so they can do their job better. That's typically kind of the gap that I think a lot of agencies have talked about specifically for us. And our ARPU at castos is $28, so like, gosh, that's pretty tough. To make paid acquisition work, you may need to think about like a services model, which we already have, or some kind of an info product, right? So could we have some. Some kind of getting started guide or 10 great hooks for your next podcast interview? Some kind of like $50 product. And they would call this like a tripwire product in the clickfunnels world to pay off the paid acquisition cost. And then we're acquiring customers for the SaaS for free, essentially.
[00:43:13] So again, focus. I don't know if this is the most important thing for me right now, but it's definitely a thing.
[00:43:17] One really interesting thing talked about was like churn isn't always like a product problem, which is usually what we think. It sometimes is a marketing and an expectation problem. So it could be that like we're solving the right problem for the wrong person and fixing the positioning, maybe jobs to be done is could be a good way of fixing churn problem instead of just always blaming the product.
[00:43:40] Alex did Q and A to kind of wrap things up, which he had this acronym, Ad Focus. And he says in business generally, if you have a problem, it's one of these seven things. Avatar you're selling to the wrong person or you don't know who you're selling to. Data talked about this before. You don't know what's going on in your business Focus. You're too distracted. They have this saying the lady in the red dress, right? And shiny object syndrome. You're just chasing this thing over here. That isn't really the most important thing over expansion or under talented. You just don't have the right people on the team working on the right things. I would add compensation misaligned or excessive. Are you overpaying people or paying them for the wrong things? Underpriced, just not charging enough. And I would say for us at Castos, like, I think we're underpriced. I think we're priced appropriately for the market. I think the business model just stinks for the hosting. It's just tough to get people to pay a lot for podcast hosting and then a single product related to the thing I just said. And so the big takeaways for me is the way we will grow Castos is to create a ton more content. And that's for me personally and for the brand. And primarily it will be on YouTube, so you can see my beautiful face a whole lot here and on the Castos YouTube channel here shortly. I do think creating some kind of an info product to drive paid acquisition too, for Castos is probably the way that we'll make paid acquisition work. Because at A$28 ARPU, it just doesn't really make sense, probably. But if we could get like a $50 product in there, then paid acquisition probably makes sense. And we grow our list and have email nurturing and convert folks from there. And then the path forward for Castos Productions growth is content, probably not ads and outbound, which means it's just a long kind of slog. But I think we have a ton of potential here, and this is probably where the next kind of million dollars in growth in the business is going to come from. For me, overall, the workshop was a huge success. I went into it wanting clarity on my business and what the next steps were. And you can see here from point 10, I got it. I got it exactly where I need to focus my energy. I'm actually really energized about the business and the potential here. And to be honest, it hasn't always been like that. So it was time and melt and money well spent. There was two different upsells at the event that I did not take part in. I mentioned Dickie Bush had a video about his experience in that kind of first upsell program.
[00:46:00] I didn't because I feel like I have this work to do first and then I probably will join later on once I've done this and I'm ready for what that next step in the business is. For folks who are saying like, hey, is this for me? I would say it's for you. If you have the nexus of a business and an opportunity and you need clarity and a game plan on how to go attack the biggest opportunities in the business, then it's for you. So if that's you, it's just acquisition.com I think. And they have a lot of ways that you can enter the program there. Two full days in Vegas with the team, there were 10 hour days. It was super intense. I had a massive headache at the end of every day, but I got a lot out of it and I'm really glad I went. So I hope this is helpful. If you would like the time evaluation worksheet that I talked about the tracker to figure out where you're spending your time. It is a link in the description below. I'd love to download it. Check it out, Send me an email, let me know if you got value from that. If I can help in any way. And that's a wrap for me.
