Episode Transcript
Speaker 1 00:00:05 Hello, welcome Rogue Startups. I'm your host, Craig Hewitt. Here. Each episode I'm gonna be sharing a nugget and a piece of wisdom that I'm learning from growing my business. Casto from seven to eight figures, and hopefully beyond, you know, business is tough. There's no easy button to push to take all the right answers in the shortcut to, to ed success. But I truly believe that with the collective wisdom we have from this tech community, we really can do better and easier than we could alone. You know, I'm basing a lot of this on an amazing amount of help and feedback I've gotten from other podcasts and other founders and other YouTube channels, and, and this is my attempt to give back a little bit to the community to help you grow your business more sanely to a higher level, more profitably, to where you're having a better experience in this journey. I sincerely hope you like the new format here. If you want to connect with me, head over to Twitter. I'm at the Craig Hewitt, and for show notes for this and every episode, rogue startups.com, let me know what you think. Uh, so Meryl, like we've, we've known of each other for like a long time, but this is our first time speaking, so it's very nice to meet you and, uh, yeah. I'm thrilled to have you on the show. Yeah,
Speaker 2 00:01:08 It's great to be here.
Speaker 1 00:01:10 Yeah. Yeah. Um, so, so I, I think for me, like I knew of you from being Ninja Days and like I'd love to just like dive straight in and like Well, no, I'll let you introduce yourself. Uh, for folks who, who don't know who Meryl Johnston is,
Speaker 2 00:01:26 It's funny when someone asks me to interrupt, introduce myself these days, I think, how do I explain it? Because now what I'm doing is a little bit random, but if you'd asked me a few years ago, I would say that I'm the founder of Bean Ninjas and prior to that I was an accountant, so always, or trained as an accountant, chartered accountant, which is like a C P A in the us. But I was, the reason I did that was because I was interested in business, not because I love accounting. I, I, I actually don't mind it. Okay. Uh, and so, okay. Founder of ings, which is a product type service. I've been running that for eight years and then we, we can get into the story after that, but I stepped out of, of a full-time role there a couple of years ago and I've been working on some different things since then.
Speaker 1 00:02:08 Yeah, yeah. And, and, and really that's why I reached out. 'cause I, you know, we follow each other on social media, I think. Um, I think you're definitely like my top, I dunno, LinkedIn just loves you, <laugh> for, for me, like you, I see all of your stuff. I feel like, and I mean, you've been even been podcasting a lot, right? Like, I know that's kind of like one of your, one of your passions and, and like big interest these days. But I would love to start with, um, before we're gonna get into the story of stepping away as like c e o and, and like heading up being inches. I'd love to just talk about in retrospect, maybe like how you view Product I services because like we both come from product I service background. Mm-hmm. <affirmative>, uh, I'm doing a little bit of, a lot of, bit of SaaS actually right now. Like today, most of my effort is around our product I service again. Um, so we're just like, in retrospect, what's your opinion of product day services? How do you see them like evolving in the next few years?
Speaker 2 00:03:05 I think they're a great type of business. So for me, a lot of people listening, I'm assume would've heard of the stair step method by Rob Walling. And so I followed that. I did consulting first. So I left my job, did consulting, and then quickly wanted to build something that was more scalable. And for me, that was a productized service. And it definitely took longer for me with the productized service to take for my take home pay to increase. So consulting was great, straight away charge a high alley rate as a accounting technology consultant, great, but hard to scale. Productized services for me are a natural next step where it's a bit harder to build the processes, build a team. It's harder to, to pay yourself because you're building systems, but it's still a fast route to cashflow. And I think it's, that is a business model that a lot of people should consider starting out with even before building software or doing any kind of product-based businesses, which require capital upfront. Because either you can get funding or you could self-fund through a productized service and get paid to learn about your customers. So I have some opinions there, but we actually, I moved away from the productized service model for a while at bandages. That's how we can get into that if, if you want.
Speaker 1 00:04:16 Oh, fascinating. Okay. I didn't know that. Yeah. Yeah. Um, let, yeah, let's talk about why you got away from the productize model, because I love it. Like we, just for context, um, and I'd love to hear what maybe your current setup or the evolutions of your setup, but ours has always been, um, some kind of ongoing payment for us to produce podcasts. And these days it's as much video and social media as it is podcasts, but we're currently on a monthly retainer basis. We've done episode credits, we've done pay as you go. Uh, but, but this, this now our current incantation is, um, some kind of monthly or some kind of upfront setup, and then ongoing after that, um, every month for a certain amount of work that we do. Um, like how have y'all seen like packaging and pricing? Well,
Speaker 2 00:05:05 We, so we were inspired by Dan Norris from WP Curve. So I actually live Yep. Very close to him on the Gold Coast in Australia. So we met at a coworking space. Cool. And he was saying, what are you doing with accounting consulting? Why didn't you do a productized service in accounting? And so we did, and we used his model and it was $99 for bookkeeping on zero, which is ridiculous. You can't make a profit doing that. Yeah. But that was the model of a monthly retainer, a a a defined scope of services. And that was very different in the accounting industry. The, it's common now, but eight years ago it was unusual. And so we got a lot of, we got press coverage. We, we had interest because it was interesting and, and different, but it was also not profitable at that price point.
Speaker 2 00:05:50 And it took me, it actually took us a number of years to, to, to think that through and think about, well, is demand for fixed price services? Normally back then, accountants used to charge by the hour. So people love the idea of, oh, knowing what it's gonna be and not having to negotiate scope all the time. It's just a defined scope. So there was an advantage there. Uh, but a couple years in, I heard about a triangle where you have, you've got price and you've got speed and you've got quality and you can't be all three mm. And, and so we were a cheap price. We were trying to be fast because people need their financial reports soon after the end of every month. Well, there's no point in having them. And then we were also trying to be high quality. You can't have mistakes, so you can't, you can't be really good really fast and really cheap.
Speaker 2 00:06:36 Yeah. And so that's when we had to reconsider our prices. So back then our, our starting price was $99 a month. Now our average price is probably more like $1,500 a month. And, and we have some people Oh, wow. That pay a lot more than that. And so we refined our scope, uh, targeted a very specific, um, group of online business owners, and it, it really evolved. And I would say that the backend is productized service. So I still love that model of repeating the same things over and over systems in a team. But the front end is more agency in that we just have, starting at prices, we send individual proposals and we found we could charge much higher prices like that.
Speaker 1 00:07:19 Yeah. Yeah. I, I'm, I'm cracking up because we, we, like, I love this pod. I love doing this podcast because literally as we speak, I have proposal FY open and we're, we're, we're getting ready to start sending proposals and we have a new version of the, the Casto Productions page that's not gonna have price for the first time ever. Um, and, and it may be, it'll have us starting at in the F A Q I think. Um, but yeah, I, because we're seeing the same thing that, like, I like to deliver the same thing over and over and over, but I also, I feel like we are capable, and y'all probably see this, like we're capable of delivering a $5,000 amount value mm-hmm. <affirmative> to customers. But when they see $1,500 a month on the website, which is what it is right now, they go, well, these fucking guys, like, they obviously can't do what I need because my budget's 5,000 a month and I want all this super cool creative stuff. Um, yeah. And so I, I agree. Like the way I view it is we have like a, a menu, you know, we have a menu of stuff and people who want to buy from our menu can get a, you know, you can get the Big Mac and the fries and the milkshake and the <laugh> and the toy, right? Or you can just get the shake. Um, and, and like that's how we are thinking about like productizing in a flexible way. I guess
Speaker 2 00:08:36 We, we have something similar. So, oh, you wanna add payroll services? Okay, we price it like this. We'll add, you can select that option in the proposal. Yeah. You wanna have a, a monthly call with a senior accountant or C F O. Well, these are the options. This is how much it costs. And that's the scope of how it works with us. And it's delivered the same way. Which again, yeah. Is different. A lot of accountants struggle with that because they want to customize everything to exactly what their client needs, which is great. But, but hard to scale that. That's you delivering that. It's hard to build a team around that. Yeah,
Speaker 1 00:09:09 Yeah, yeah. Totally. Totally. Um, do you find like reduced efficiencies with the team and in internally and processes when you have multiple different things you could offer? Because like, the most perfect would be like, I'll just say audience ops, right? Mm-hmm. Because I know Brian, I know like, he, he ran that for a long time. We're gonna fucking publish four episodes a month for you, and they're gonna be 2000 words and that's it. And we don't need you. And like, we just go a as you have like this a la carte ish kind of model, do you find it breaks down where like every customer's a little different? Um, it's 'cause we do like it. That's challenging. So
Speaker 2 00:09:43 It's a little bit like that, but we realize that's what our customers need. If, if you are, you are running internal finance for a business, you can't just say, sorry, we don't do payroll. They, they need that. And, and if they're gonna move and find someone else that does that, then they're probably gonna take the whole, the whole piece of work over to someone else. Yeah. So we tr yeah. So we, we do have that problem, but we tried to solve it a few ways. So we, when bja just started, we did bookkeeping for anybody, absolutely anybody, uh, tradesmen, HR people, e-commerce, online courses, everything. And then we narrowed it to just online businesses. And then many years, so probably four or five years in, then we moved just to e-commerce only. Right? And so that means it's very defined. There's a one tech stack that we use for e-commerce clients.
Speaker 2 00:10:31 So even though they might have extra services, they use Xero that I won't list all of the tools. Probably not relevant for your audience, but there's a very clearly defined way that we work with that type of e-commerce client at that size. And so that helped us keep, um, some level of systemization. Uh, but it's still, there is still a little bit of variation. I mean, I'll, I'll side note. Yeah. Uh, I was doing a podcast interview yesterday with someone that we sold a portfolio of clients to. So she's a, runs a, a bigger bookkeeping business, and she's done, I think three acquisitions so far. And she was saying with Bess it was the easiest to see in a spreadsheet. We, we've list out the client with, with an acquisition, you don't say client names, but you just say, this client, this industry, how much they pay per month and the scope. And so it was very clearly able to be laid out in a spreadsheet. Whereas the other acquisition she's done in the accounting industry, e everything was different. Billing date was different. This, this one's built in arrears, that one's in advance. Um, all all kinds of things. So I would say, yeah, it's not perfect and there's definitely challenges with the a la carte menu, but we're trying to keep it as streamlined as we can.
Speaker 1 00:11:39 Yeah, yeah. Yeah. I mean, you know, I, I think you nailed on the head. Every customer is a little different. And I think within the realm of what's possible, like we, we want to try to accommodate them. Like I had, I had a had a sales call today with a guy like, Hey, great, this looks good, this looks good. But I also, he basically wants to do what I do for my short clips, which is I get on the call with my executive assistant every other Tuesday, and we talk for an hour. And I talk into the camera like this, and she cuts 'em up into short clips for YouTube, shorts in LinkedIn and stuff like that. And he wants to do that. I was like, yeah, we totally can do that, man. Like, <laugh>, I've never considered selling that, but yeah, totally. And so now it's just another thing that we have to consider doing, but it's also like another kind of arrow in our quiver where if I, if I have someone on a call that's like, Hey, I wanna do thought leadership and I wanna build like a media brand for my company, which that's like the tagline that we're using these days, I can go cool.
Speaker 1 00:12:32 Like, we can, we can serve you and we can serve your company at the same time. So, um, and that's, man, it's only, it's only from talking to customers, right? Like, I'm, I'm eight years into this, just like you. And it's amazing. Like, talk to customers every day and it's just like, oh, wow. Yeah. Crazy, crazy. That's what you need. But I totally get it.
Speaker 2 00:12:49 Yeah. So one of the challenges, I ha so I removed myself from the sales process about four years ago, and that's actually one of my challenges is I feel a little bit too removed from that. I think it is good to still be involved. I still peek in to help scout and look at some of the conversations that are happening in sales. Uh, less so on the, the delivery side. But I used to still kind of take a peek in there just to make sure that I still had my finger on the pulse with what's happening, because I'm still involved in big strategic decisions. But I kind of miss that a bit, not being so close to the customer. And I think that's something to be, or something that I'm trying to be aware of with my, as my roles changed.
Speaker 1 00:13:27 Yeah, yeah. Um, okay. So just like maybe Rapid Fire, um, I'll share a, like, tech stack and, and kinda how we run things. Um, so currently we're using Click Up as our kind of backend project management. We're doing all of our internal time tracking through Harvest, and we're billing customers through Harvest. Uh, we send an invoice and ask them to put credit card on file, and then it's automatic after that. Um, and HubSpot for sales.
Speaker 2 00:13:53 So we use teamwork for the backend C R M and all of the Yep. Not so much cmm, just project management, all of the jobs. Uh, it, it, so, sorry, if client comes in, I'll just talk through how the, the process flow works. So someone inquires on the website, then that goes into, we use Help Scout for everything, but just different mailboxes. If it's the sales team or if it's delivery, then we send a proposal through, uh, better proposals. And then from that, sometimes we, there's an option to have them sign up directly through Stripe to set up the recurring payment, but we're starting to get sick of those Stripe fees. So sometimes, so 50 50 now, we'll do set up an aach h which, um, direct debit, which takes a little bit longer. Uh, it's not as streamlined, but those, those fees were Yeah. Creeping up. Yeah. Slack. Yeah. So we use, yeah, slack for internal communication. Um, we've got a bunch of other tools actually for a different business I'm involved in with, we've been using Click Up, which I, I, I'm really en enjoying and, and I'm a big Notion fan as well for Internal Wiki. And I also use it personally.
Speaker 1 00:15:00 Yeah, it's crazy. We, we do, we use both too. The rest of the company is on Notion, but for customer stuff, we just found Click Up works amazing. Um, all sorts of automations and stuff that we can do there that, that we couldn't do anywhere else. Um, cool. So I mean, yeah, I, you know, just like to, to tie a bow on the, on the product I service thing, like it's how I got started in this, you know, it's where this podcast, like, it came out of this podcast because I was like, Hey, this is a hassle <laugh>. Like, I love podcasting, but the rest of it's a pain. Uh, I bet other people would pay for it. And, and that's kind of how Podcast Motor got started. And then CAOs, um, and you know, like I hear people shit on it all the time, but, but then, like, you look at enormous companies and a lot of them have some kind of service aspect to it.
Speaker 1 00:15:45 Like, it's actually pretty rare that like, oh, look at me, I'm Johnny SAS guy. And a hundred percent of our revenue runs through Stripe and it's all automatic and we don't ever have to talk to customers. Um, like the way I think about it is these people that come to us and we're able to help them on the software, on the services side, we're solving the whole problem, not the whole problem. 'cause we're not squad cast like this, but we're, we're solving more of the problem than we could if we were just software. Um, so yeah, I'm, I'm pretty bullish on it still.
Speaker 2 00:16:14 Yeah. I love the model. And I think I said earlier, you're getting paid to learn about the customers, I think. Yeah. So we, I actually did try building software, some e-commerce accounting software a couple of years ago and we're, okay, so we got, we got some customers, um, and we actually sold that business last year. But it wasn't the, the big hit that I was expecting or hoping for, but that, that was in, it was really interesting seeing the product I service model and how quickly you could grow that, how cashflow grew. I mean, I mentioned our average monthly fee and then going to selling software was $50 a month that needed a lot of customers <laugh> to, to really grow m r R. So I, I'm a huge fan of, of the model. And the way I think about it is, you might not get the big exit with a productized service. For me, it's a stepping stone. It's a great way to cashflow. It's a cashflow generating business. It's great to own. And then you can use that to leapfrog or or step into other opportunities.
Speaker 1 00:17:11 Yeah, yeah. Absolutely. Absolutely. So, so we've kind of hinted at it, but um, last year, two years ago, you kind of took a step back from kind of running day to day at Bean Ninjas. Like Yeah. Tell me about like, what, what brought that along?
Speaker 2 00:17:25 That was actually my goal from the beginning. So my end goal wasn't a productized service. And when I, so I started the business with a guy called Ben McAdam back in 2015. And because we were friends with Dan Norris and we saw what he'd done, he'd grown WP Curve to seven figures in less than two years, or around two years. I thought, oh, well we can do that too. Let's, we'll be work, well, seven figures. We'll be working a 20 hour work week and, and we can do it in two years as well. So that was the goal. It took a lot longer <laugh> than two years. Uh, but my original plan was always to remove myself from that business, build a great asset, and then either hold it or sell it. And then I wanted to get back into software i'd, I'd had a tech startup that didn't work out prior to being ninjas. Uh, I, I didn't spend a lot of time on that. I could quickly see that it wasn't going anywhere. Yeah. But I had been in that space and, and so my goal was to, to do that again or to do something that I felt was more scalable than the product type service. I also dabbled in online courses, um, but found that difficult to scale as well. So yeah, it was, it was my goal, but it was a long road to get there.
Speaker 1 00:18:37 Yeah. Yeah. No, totally get it. Totally get it. I, um, so, so that was always the goal and, and timing about a year ago, year and a half ago.
Speaker 2 00:18:45 It was at the December, 2021 that, it, that I announced it. So most of 2021, I've been kind of winding back. So I'd moved to a four day work week, and I was gradually reducing my hours. But the official announcement was, um, December, 2021. So it's been, yeah, about a year and a half now.
Speaker 1 00:19:04 Yeah. How is it like in reality, because I think it's everyone's dream. It's like, ah, just I'll keep making money, but just not have to work and <laugh> and like, what's that actually like? Because I, I know you're, you're just like me, you're busy and doing a million things, but like, what's the reality of stepping back from the day to day? 'cause I'm sure there's some like, withdrawal you go through.
Speaker 2 00:19:24 I, I found, I felt strange because I'd been pushing hard for this goal for years. So it took, what, five and a half years for long. I won't <laugh> how I'm an account it, but it,
Speaker 1 00:19:36 It took me, it won't make you do math, uh, real time. 'cause it's like the, the hardest thing possible. Yeah. <laugh>. But
Speaker 2 00:19:40 It took me a, it took, I was working towards that goal for so long, and so just marching towards that focused, and then when I didn't have a goal, I was working towards it, it actually felt strange. And I found that took me a while to adjust and to find other things to do to fill that time. I mean, I did have a daughter, um, I had a baby that was born last year, a few months after I stepped out of the full-time role. So she's my second child. So that definitely kept me busy, but it was still, yeah, the, that thing of what, what's my purpose? What, what am I working on now? And I hadn't actually figured that out. I actually got, I had some health issues in 2022, so I had a lot of, um, medical appointments and some surgery last year. So that kind of threw off my year as well in that I was thinking, oh, I have all this time to explore new ideas and work on different things. And actually that actually working through that, um, took a lot of time. I, I, I had my last surgery January of this year, and I'm fine now, but
Speaker 1 00:20:42 Yeah. Okay. Good. So, good, good. Well, I'm sorry to hear that. Like, you're, sounded like you, you had it in mind from the very beginning. Worked really hard to make this thing happen. And then, I mean, very, like, very fortunate to be able to spend time with your daughter. I mean, that's, that's like so amazing. That's time that you will never regret that, right? Like, I have a, an 11 and almost 13 year old, and I'm like, man, those days are gone. Like, they're <laugh>, they're not babies anymore. But, but like, I think that's, that's just such a wonderful thing for you to be able to spend so much time with, with your daughter and, and your kids that like, that's, that's amazing. I'm sorry to hear you. You, you weren't well for a period of time, but also probably like a blessing that you didn't have the stress of work and the stress of like, family and, you know, your health and stuff like that all at the same time. Like, that's too much to deal with probably.
Speaker 2 00:21:29 Absolutely. If it had happened the first year or two of been in just where it was supposed to be a lifestyle business, but I was working weekends, I was working nights, I was doing whatever it took to try and get this thing going, I, I couldn't have dealt with, with all of that and having a family all at the same time. So I was, I was lucky that it happened when it did, and that the business could still provide for me. I still provide for the family, but I couldn't work for many months, so Well, and I wasn't needed to.
Speaker 1 00:21:57 Yeah, I'm sorry to hear that. So,
Speaker 2 00:21:58 But, but it, it shows if you can build a business like that where it can operate, I think that's a sign can, can your business continue operating and, and actually it grew, um, that that's what you want.
Speaker 1 00:22:10 Yeah, yeah. For sure. For sure. Um, like as you were, were taking 2021 to step back from the business, like what were some of the things that surprised you or that you didn't expect of like, oh, wow, like I'm still doing this even though I'm trying not to, or this just like, I can't, this just won't go away. Like what were some of those lingering things that you, like, I'm sure SOPs and process and documentation, all this kinda stuff, it's still like nagging at you. Yeah.
Speaker 2 00:22:37 I can tell you a story about that. Something that happened that surprised me. But, so the way that I removed myself was I had an organizational chart and just my name was in a lot of boxes, and so I was gradually removing myself and hiring other people, or just passing responsibility for areas to different people within the business. So there was a plan around that. And so I, I found sales harder to let go. And also internal finance, just, I suppose because I'm an accountant, that that took me, in fact, I, I still like to get our, uh, reports, <laugh> our scorecard every week. Cashflow. Yeah, there's some thing information I still like to see every week, but what I actually found challenging was not so much, it actually, well, it took me a couple of years to, to really let go and let leaders make other decisions that I didn't agree with.
Speaker 2 00:23:26 But I realized, but that, that started happening a few years ago where I had to think, well, is my goal to step out of the business or not? Because if it is, then I need to allow other people to make big decisions that I might not agree with. For example, product I service, we, we've been a hundred percent zero for a long, long time. And my US business partner was saying, we need to be on QuickBooks. And I was saying, no, that's a whole other system. We need everyone certified. There's all this training, it's complicating everything. And I, for a couple of years pushed back and then we did move forward with it, and it was the right decision. We, we've significantly grown that service. So that's an example of something I strongly disagreed with, but eventually I needed to let other people make decisions and be okay with the consequences.
Speaker 2 00:24:14 That's an example of something that went well, but there's things that don't always go well too. And, and I had to just step back. And, uh, another example is software. We have country leaders and I try and let them be very autonomous. So you'd think it would make sense that everybody's using the same systems, the same, you know, everyone's on teamwork or click up, but I have to decide, do I want to give autonomy to my leaders and let them pick the software that they want their teams to use? Or do I wanna be dictating what we're doing, which is gonna be more work for me, and means I can't step away. So again, I don't love that. Yeah. But if I have to choose, I pick the trade off of me stepping out and giving more autonomy to other people.
Speaker 1 00:24:57 How, how do you align? Um, like in my mind doing that, I would want to align compensation and goals or KPIs or metrics or something like say very clearly, this is the goal. I kind of don't care how you get there. And if you get there, you know, one, not only will you keep your job, but will probably reward you with your, your senior leaders, I would guess. Right?
Speaker 2 00:25:17 Yeah. So in, in, I think accounting is a little bit different in that there's, there's still traditionally the partnership structure. So the person that owns the business is the most senior technical person. Now, we've tried to move away from that with a productized service, but there still is some elements of that. So my business partner, Tom in the uk, he is an owner in that business. And the same with Wayne in the us. And then when we had Tracy in Australia, they all were owners in the business. So we had equity compensation, and it was different with each of them, how they bought in and how we structured the deals. But that was the way that, um, I got them on board to think and act like owners.
Speaker 1 00:25:59 Did you franchise in those countries or were they like a part of the, the, the kind of parent corporation? Or what was that structure if you're able to say?
Speaker 2 00:26:08 So we have a holding company, and then we have separate entities in the various countries. And so they buy into the, the company that relates to the country that they're operating. Got it. So I wouldn't call it a franchise model, but it's, yeah, that's how we structure it. So there's different entities in the countries, and then they're So they're getting compensated based on their efforts from running that. Yeah. Got it. That country.
Speaker 1 00:26:34 Got it. Got it. So, so just generally, and, and you don't have to divulge any <laugh> any, like anyone's compensation, but like, uh, for, for leaders, I would assume, like, uh, salary plus some sort of performance bonus. Is that, is that fair?
Speaker 2 00:26:49 So it's salary plus dividends is, is how it, so, so they've got their Okay. Because they're owners. Because they're owners, yeah. Yeah. I've, so I have dabbled with bonuses, and I feel like I've never done a great job with bonuses that we took too long, trying to figure out what the metrics were. Too much time negotiating. Is it met, is it not? And in the end, I scrapped all of the bonuses and just did it ba well. The the ultimate thing we want is profit that's being distributed. So let's just do it based on that.
Speaker 1 00:27:17 Well,
Speaker 2 00:27:19 I could
Speaker 1 00:27:20 Probably, we're considering profit sharing too, and like I've never talked to anybody about it this point. <laugh> might as well on a podcast. Um, yeah, we're, we're considering profit sharing. Um, like we, we've taken two, two sorts of investments, you know, one through tiny seed, uh, and then we raised an angel round, um, about two years ago. And, and neither preclude us from doing profit sharing. Um, and I don't know that, like this year, at least, it's the end of July. We won't be mega profitable to where any kind of profit sharing would be enormously meaningful to, to employees. But, but it would be something, and, and I think it's a, my goal is for us to be profitable enough to where we can share with, with the team by the end of this year, um, is the ultimate, it's the ultimate alignment, right? Because it's not just revenue mm-hmm. <affirmative>, it's like at the end of the day, after all the taxes are paid and everything, it's like the company has this much money, and then we'll take and sliver off some of that to, to give back to everybody. Um, I think it's a fantastic goal. I
Speaker 2 00:28:15 Think it's a nice way of doing it. I, I, so I, I made lots of mistakes with bonuses, and one of them was doing it based on revenue, because that encourages growth, not necessarily the right kind of customers and not profitable growth and not necessarily control over spending. So that's, I probably, yeah. Wouldn't do that again, unless it was a sales position with some clear metrics around retention or so something
Speaker 1 00:28:36 Like that. Even then as a sales guy, like, you're just gonna sell bad for customers and that, that's, that's terrible for everyone down the line. Yeah.
Speaker 2 00:28:43 But I think profit shares a nice way to do it. Equity's a lot more complicated. And I, I only did it in this case because they were buying decent chunks of the business that they're the operator and, and owner. But if I was to do it across the team, I think profit share works well, particularly if you're not planning to sell anytime soon, because the two benefits of ownership are profit share. And, and then when you sell, having some of that upside too. And I know another accounting firm owner, a friend of mine, he said he's, he's doing the Warren Buffet strategy of building these businesses and holding them forever and, and, and trying to invest in businesses. So saying, well, yeah, equity isn't much different to profit if we're not actually gonna be selling anytime soon. Profit sharing, I mean mm-hmm. <affirmative>.
Speaker 1 00:29:27 Mm-hmm. <affirmative>. Yeah. Yeah. Hey, it's Craig here. You know, while I love podcasting and long form conversations like this, I also really love writing and really love email newsletters. I have a newsletter called Founder Insights, where every Saturday morning I share something I'm learning in my business that I think could help you grow your business sustainably, insanely and profitably as you go along in this journey. If you're interested, head over to Craig Hewitt, me slash join to get Founder Insights my newsletter along with your cup of coffee this Saturday morning. See you there. And, and I don't think to, in my mind, like profit sharing does not at all preclude us from selling. Um, you know, it might just mean that like, we have a little less profit to reinvest in the business, but, but if we're growing effectively, like, we don't need that. Like, I think it's a lie.
Speaker 1 00:30:16 I told myself for a very, very, very, very, very <laugh> painfully long time is like, every cent needs to go back in the company. I'm just gonna pay myself the absolute minimum. And I mean, kinda like you, I'm eight years into this and I'm just like, I'm tired. Mm-hmm. <affirmative> of that. And, and so like, I feel really mature and saying like the, like the, the, the, the kind of motto I have these days is like, the company has to provide what I want. Mm-hmm. <affirmative>. And if it doesn't, it's a shitty company. You know, like the company has to be able to pay for me to like, live in a nice place and send my kids to private school if I want mm-hmm. <affirmative> or whatever, and take nice vacations and do all that for our employees and pay them nicely. And like, we can hire whoever we want when we need to hire for a role and stuff.
Speaker 1 00:31:04 And I just think that, like, I think a lot of us that are bootstrap ish are just like, what's the least amount I can pay for something? What's the least amount I can pay myself? Um, and just like, use a lot. Uh, there's this colloquialism in English elbow grease, like just work really hard to make it happen. And, and like, I, I, I know it all takes a lot of hard work, but like, I don't know, I just think that we all try to squeeze too much out of ourselves and, and our businesses where like the business should, like, should do its fucking job sometimes <laugh> and, and like, pay us what we all deserve. That that's like the mindset I'm in these days.
Speaker 2 00:31:44 I, I agree with that. And I think you might not be able to do that in year one or year two that is, is gonna, as you said, it's gonna take some elbow grease just to get it going and, and get the thing rolling and get some momentum. But so now my, one of my business partners, Wayne, he's got five kids, and so he has big overheads to provide the kind of lifestyle he wants to provide for his family. And so that really early on in the business pushed up what we need to pay for wages. I guess if he, if he's gonna be paid a decent sized wage, then I, I, I want that too. But it just forced us to figure out a way to make it happen. So it forced us Yeah. To, to try and grow faster and to really look at our costs and what we were reinvesting. 'cause all of a sudden we had to pay out when, when he joined, then we needed to pay ourselves bigger salaries. And I think that was a good thing. It just forced us to figure out how to do it.
Speaker 1 00:32:34 Yeah. I, I know, I know a founder who they have a, a schedule, you know, they worked out a schedule with the other founders to say, okay, at this date, or at this m r r, we're gonna pay ourselves this much. And I think that's nice. 'cause like what we always say is like, in a moment of sanity, this is what we decided. That's why I always say with our OKRs is like, okay, in a moment of sanity, this is what we decided our, our OKRs for the quarter. And, and I think that a similar thing for a compensation is like, total comp for me or for a salesperson or a lead developer should be X. And that's, you know, in, in, in abstract almost. Like, that's just what it should be. And, and we need to figure out how to make that happen. Okay. So, so step back from the business. Some challenges sounds like with like, uh, in independence and autonomy, uh, that, that largely sound like they work themselves out, but like, what, what are you doing now? What are you focusing on? And like, how is, how is it going a year and a half later?
Speaker 2 00:33:28 So, well, one of the challenges that I, that I had that I'd handed over responsibility and all of those tasks was actually a Headspace thing. So as a business owner, you might not have tasks anymore, but I still felt the weight of responsibility that binges is still the biggest asset that I own. Um, yes, I have some other investments, but nothing to the size of this. So yes, I can step back, yes, all the tasks are handed out and I don't have things I have to tick off every week. But that doesn't stop that weight of responsibility of worrying about things. Okay. What's happening with the economy, e-commerce, which is our niche, that's having a tougher time at the moment. Um, rising costs in the Philippines where, where a lot of our staff live. Okay, what, what does this mean that that doesn't stop the headspace?
Speaker 2 00:34:17 And so that's something I'm thinking about at the moment. So every year in April, which is when we, we send off a lot of our work to get complete, or by April for us taxes, that's when people change accountants. Yeah. So every year, that's when we have our highest churn <laugh>, we, our churn is very low, but, but every year in April, and I, so I should be prepared for that. But again, happened in April and, and you know, we replaced that with within a couple of months, but every year it, and this year I'm not even, I'm, you know, one day a week in the business, but it still caught me by surprise. And I still felt that urge to come running back to save the day. And I didn't need to do that. We, you know, we had a plan. Yeah. We were executing the plan, <laugh> the team.
Speaker 2 00:34:55 I should've just left things alone. And I did come back into the team like, what's going on? Why is this? And that's not what I should be doing in my role as an advisor. I should just be letting the leaders take care of that. So that's actually something I'm still working through is the Headspace side of things of okay, yeah. That weight of responsibility that we need to pay people's wages, that this is my, that asset that I don't want to be devalued. So that's, yeah. Something that I'm working through. But on the other side of that, I'm working on some new projects, and so that's helping me shift my head space and, and thoughts, uh, onto other areas. Yeah.
Speaker 1 00:35:33 Are, are those projects taking like most all of your, like, work time now and, and are they, and are you're doing a podcast, are they creative endeavors like that? Or are they like new businesses? Like what, what does that look like?
Speaker 2 00:35:45 A little bit of both. So I started the year by wanting to build a media brand in the accounting industry. If we've got time, I wanna quiz you more about building media brands. Totally.
Speaker 1 00:35:54 Yeah.
Speaker 2 00:35:55 So I started a brand called The Lifestyle Accountant, and it started with a podcast. And then I have goals. Once I've got a good system, at the moment, I'm focusing on trying to improve the quality of the content I produce. So it's a pod, just a podcast, but the intention is YouTube channel and a newsletter, but systemizing each bit. So getting the podcast to the standard I want and getting better at that, and then rolling out these other channels. So that's taking a bit of time, especially my producer went on maternity leave and she was great. So she's a professional speaker. So she was really helping me craft each podcast and think about what's the title? Are you, are you delivering on that title? What do we need to cut out of? If it's an hour interview, what can we cut to make this really tight?
Speaker 2 00:36:41 Anyway, I'm doing a lot of that work at the moment, which is time consuming, but I think a good skillset to learn. Uh, and then I've been investing, so I, I wanted to learn about angel investing. So I've made one angel investment, but it took me a lot of time to actually learn about it and understand, okay, what's a safe, and then map it out in a spreadsheet. If I invest this much, what does that actually mean? Uh, when does it convert to equity? What kind of payback am I gonna get? So I, I spent a bit of time learning about angel investing, and I've actually invested in another service business, which I would say is not really an angel investment 'cause it's a, I own more than a, a bigger percentage as a different valuations with, with service businesses. Mm-hmm. Tech startups. And so I'm actually helping them with marketing. Um, it's a business that sells to accountants, so I really understand that industry. So I, I'm back working pretty much full time. I'm loving it, but I was not expecting to, to be, have quite so many commitments
Speaker 1 00:37:37 That I, this, this could be a really long episode, um, <laugh>, which is fine. Like I, that's, that's a cool thing about like a podcast. It could be whatever you want. Um, talking about the media brand, um, starting with a podcast. I mean, I'll, I'll just share like how we think about it, and maybe this answers some of the questions that, that you had. But, um, but we kind of, we kind of view five, five pillars, uh, or growth drivers of a media business. Um, it is, uh, social media, that's where it starts, right? Uh, it is, and it's kind of like a funnel, right? So I'm, I'm, I'm trying <laugh> I'm still working this graphically out in my head, but there's five components to it. But, but it really looks like a funnel, right? And at the top is social media, right? It's where you get new eyeballs on your stuff.
Speaker 1 00:38:20 And we call that borrowed detention, right? Because like, fucking Elon Musk is gonna change Twitter and the LinkedIn algorithm changes and you're just screwed. And, and to some extent, YouTube is, this is in that bucket. So YouTube kind of straddles this top one and the middle one, which is podcasting and YouTube, right? Because people go from aware of you to getting to know you and becoming super fans in this middle phrase. And then at the bottom is website and email. So like your, your spot. And that's where they learn more about you. They make a commitment to give you their email address. They might buy a thing or join a course or whatever and, and like take that next step, um, like of a microcom commitment at least. Um, but, but really without all five it falls down because you find yourself like having a big LinkedIn following and <laugh> and no place for them to go.
Speaker 1 00:39:07 Or a podcast that doesn't have distribution. 'cause you don't have social, and I mean, arguably like this show for a long time, nowhere for those people to go when they're super fans mm-hmm. <affirmative>. Um, and, and so, uh, yeah, I mean, I've kind of like, uh, the, the revitalization of this podcast is a really good opportunity for me to take a critical look and say like, man, we've been like standing on one leg for years, <laugh> of just like having this thing that doesn't have promotion, doesn't have a video element for people to see my face. Uh, and then doesn't have any like, kind of functioning website for people to go and do stuff. Um, and I'm still trying to figure out what that's gonna be. 'cause it's like, I'm not gonna start a conference. I'm not gonna sell a course. Um, like we'll start an email list probably, but, but I don't know what we'll do, um, after that.
Speaker 1 00:39:52 So that's how, that's how I think about a media brand. And you look at, like, ProfitWell is a really good example. HubSpot, um, probably zero, you know, does, does a good job of this. Where like they, they have all these things and they all work really well together and they let people take like that na next natural step in the journey, um, without any paid anything Right. Or crazy outreach or anything like that. That's the, that's the thing I like about it so much, is a, a lot of our customers are coming to us and, and they're hip to this and they're like, man, CACs through the roof. Um, cold. You know, cold outreach isn't converting like it used to. Like, we're kind of getting scared about AI and content and ss e o um, like, we kind of don't know where to go next. And, and so we're, we're thinking this is like a good option for, for a lot of companies. Like, like what you're talking about.
Speaker 2 00:40:40 Yeah. It's interesting 'cause I never really loved the idea of a personal brand five years ago when I heard people talking about that. I was like, oh, influencer, personal brand. That's not for me. I just, I don't wanna build a company that's not associated with me, but I've actually changed my opinion about that now. Same kind of thing. But there's gonna be a lot of content, AI generated content, you know, pumped out. And I think people follow people. And I know the content I read is normally it's by person that I care about. It's not the company generally. And then I learn about the company through the person who's creating or sharing interesting thoughts that I'm interested in where it's challenging my thinking or changing my perspective, or I'm, I'm learning about something. So I really like the way you laid out that framework. And I know, so I've been focusing on LinkedIn for about three years, but I haven't had somewhere, anywhere to direct people off LinkedIn.
Speaker 2 00:41:28 And I didn't have a very clear strategy. I just wrote about whatever I was interested in. Whereas now my strategy is, okay, my audience is accountants, so I need to be just creating content that is relevant to that audience. And I like the idea, the way that you can test ideas. LinkedIn's a bit longer than Twitter, but it doesn't have to be that long. And you can just test Yeah. Ideas, see if it works. Okay, well that should, it's going well. Let's turn that into a podcast topic, or maybe that needs to be a blog post as well. So yeah, there's definitely still gaps in my framework, but I can see the, the vision and my goal is, so I'm not planning to do conferences or courses either, but my, I do have sponsorship spots on the podcast, and my goal is that Oh, nice.
Speaker 2 00:42:11 E every every sponsorship ad is a company that I own or, or, and part of is what I'm aiming for. Oh, that's awesome. So investing in businesses that's awesome. That solve problems for accountants. So that's kind of how I'm thinking of the flywheel that the value I add to these other businesses I invest in is my distribution to the accounting industry. And so I just invest in businesses that solve problems for accountants. Anyway, this is my, that's what I think the next decade's gonna be, but I'm only six months into this, so everything could change Yeah.
Speaker 1 00:42:41 <laugh>. No, for sure. But, but I love it. I love it. And yeah, like, just to put a cherry on top of that, like the personal brand has to be the driver in the social media because nobody follows Casto s HQ on Twitter. Right. They follow me or they follow whatever, someone else from the team. Um, and they read your stuff on LinkedIn, they don't read Be Ninjas stuff. Mm-hmm. <affirmative>, like nobody cares. Um, and I don't, I think it will get even more that way, right? Like your face and your voice is the only thing that like, can keep us different than the robots. Um, so I think even it'll be even more special, um, and unique going and, and most valuable going forward. Yeah. Yeah.
Speaker 2 00:43:17 I have a question for you,
Speaker 1 00:43:18 Um,
Speaker 2 00:43:19 Related to that. Yeah. Because I think I've seen you do some coaching or offer one-on-one calls or coaching or something like that. How does that fit into your strategy?
Speaker 1 00:43:28 Yeah, so I don't know, uh, <laugh>. And, and I think that's okay, right? I think that, like you talked about, like we're trying these things and, and we don't really know. Um, I I, I, I think there's a part of it that's like, that's the highest fidelity form of like, um, oh man, I hate to even say it. Like having a fan mm-hmm. <affirmative>, right? Or, or like someone getting to know you that isn't a customer or a coworker. But like, yeah, I have maybe a couple of calls a week, 30 minutes, um, through Growth Mentor. Um, so Growth Mentor is a platform where you can get do free or paid, um, coaching. Um, yeah. And I just have 30 minute spots in there and I take a couple a week and it's just cool. 'cause like one, I just hear a bunch of stuff, you know, I hear a bunch of people, oh, I'm trying this and da, but, and most of the time, like, I have the answer or I have an answer, and so that's cool, but sometimes I don't and I'm like, yo, I don't, I don't know.
Speaker 1 00:44:15 Like, I'm sorry. Um, but I, I think that you talked about something that's really interesting and important, which is like, as you remove yourself from the business, um, you run the risk of getting rusty, you know? And I plan on doing this just business for a very, very, very, very, very, very, very long time. Right? Like, I'll never retire. I, I hope to be kind of advisor level, like you're talk, like you are, you know, here pretty soon. But like, um, what I don't want to happen is to not understand what is going on and what is right in the market right now. And, and I think there's one really good way of <laugh> doing that. And it's being engaged with people that are actually doing it and, and trying to help them because you have to have the answer. Um, and I think Rob Walling is, is a really good example of this.
Speaker 1 00:45:03 Like, you know, I, Rob, I love you and I, I know you listen at some level. He hasn't run a business in five years, you know? Um, but he talks to people who are running businesses all the time and gives them advice and then sees what happens. Yeah. And so he's doing a really good job of like, not running a SaaS business, but having exposure to 150 SaaS businesses through Tiny Seed and then seeing what's working as whatnot. And, and so it, it's a little bit of that for me is like, I want to talk to a bunch of people and see what they're doing and what's going on and what challenges they're having and stuff. Um, because it's like kind of representative of the market Yeah. Overall. And then, uh, it forces me to stay fresh and, and on top of things with like, what's going on in best practices, even if it's not something I'm really interested, uh, or like involved in like pay per click or whatever mm-hmm. <affirmative> like, I, I don't know, but like, I'm happy to chat through what I do.
Speaker 2 00:45:53 Th That's interesting. So I probably get a couple of messages a month from mainly accountants, but not always from people wanting to hop on a call or, and offering to pay as well. And I normally, so I'm not a big calls person. I like not having calls in my schedule and so I normally try to help, but not via a call. But I could say I That's interesting what you're talking about, that staying in touch with things and, and hearing about interesting problems and thinking about how you would solve it. Maybe I will reassess my opinion on that. Uh, particularly if they're in the Australian time zone, uh, <laugh>. That, that's my,
Speaker 1 00:46:23 Yeah, I know what I'm <laugh> I'm very gracious, uh, grateful for you to, to do this. 'cause it's seven, almost seven 30 my time and I think it's something like that in the morning your time. So I'm, I'm sorry, this is so,
Speaker 2 00:46:34 Oh no. This is a, that's such a weird time. A fine starting time. Uh, sometimes it's like a 6:00 AM or 7:00 AM I think. Oh, ouch. That, that's, there's my morning surf. Go on.
Speaker 1 00:46:44 Right. There you go. Oh man. Must so nice. I thought you were saying
Speaker 2 00:46:47 Something else interesting about the advisor role because, so, because I am in an advisor role and I think that was kind of where I was aiming to. 'cause I thought, oh, that's the pinnacle. You don't have to do the doing. You can be the advisor, but actually being operational is fun. So, so I, that's a reflection of mine that I'm working in this startup called Team Up, which is a service business that recruits Filipino accountants for accounting firms. And it is fun. I'm enjoying being back in the zero to one phase. I'm there, you know, a couple of days a week. I'm in the Slack channel, they're all excited 'cause it's growing quickly. I'm, shall we test this? Shall we test that? 'cause I think sometimes you think, oh, I just wanna do strategy. But it's actually, I'm finding it really fun being back involved and a bit more hands-on. Sometimes I wonder, you know, do I actually like being an advisor and I do for bandages? 'cause I have so much history there that I feel like I really know that business and that industry. But with some other roles I've considered, I think, you know, one meeting a month, not going deep into the business. I didn't know if that sounds like that enjoyable to me, which is interesting. That was surprising for me to, to come to that conclusion.
Speaker 1 00:47:58 Yeah. Yeah. I, I mean, just hearing that I, I say, um, to, to, I say to myself, not to you, uh, it, I have a lot of anxiety just hearing that because I can't imagine getting the amount of data and context in that hour a month to do an effective job at anything. Mm-hmm. <affirmative>. Um, so like, I'm sure there's the scorecard and they send it to you and you look at the p and l and, and they're running through high level stuff with you. But, but still, like, yeah, I am, I'm just not there. I I'm not there. Like I, and that's my limitation, like as a founder for sure. But like, um, I can't imagine being that removed from sales or product or marketing or anything really. 'cause like I'm in all those meetings every week and making those decisions with a team.
Speaker 1 00:48:46 And I mean, like, we have team leads and, and they're making a lot of autonomous decisions themselves. But like, every question comes back to me in the end if it's not pretty straightforward. Um, and that feels good for me right now. I don't, I'm sure it'll change, but Yeah. That's, that's crazy. Um, so, so like yeah, tell me, tell me like, um, I'm sure you have like a, a financial report card, right? That, that they send you ahead of that meeting and like sales and operations numbers and efficiencies and things like that. Is there, is there anything else that you get to be prepared for that hour? 'cause that, that's pretty intense. Well,
Speaker 2 00:49:17 I actually stopped doing it, so, so we, I was in the initial stages with another business in the accounting industry, and so we probably had three, three meetings and, and I just didn't feel like that, that that was gonna be enjoyable. That for, for the amount, I guess they had budget constraints, so they couldn't afford for me to be more involved. But I just thought a quarterly board meeting and a monthly management meeting, I just don't know enough about the business to feel like I'm adding value. This doesn't actually seem that fun. Um, I prefer to, yeah, work with a smaller number of businesses and go a lot deeper and get actually like what I'm doing with Team Up. I'm actually getting my hands dirty and I don't, I won't do that forever, but at least I'm gonna really understand the business. So in a couple of years if I wanna be just, you know, the, the one meeting a month, I can do a better job. So I, I actually stopped that. Um, the, the, the other conversation. It didn't seem like, I mean, some that might, some people might be suited to that, but I didn't think that that was the right thing for me. It, yeah,
Speaker 1 00:50:16 Yeah, yeah. And right now with being ninjas, your one day a week, you said
Speaker 2 00:50:22 It's about one, one day a week, but it's spread out across the week, so it might be a mentoring call, uh, and then I might, there's a content marketing, I'm still involved in marketing too, so there's a marketing meeting once a week and sometimes we, we can do it async my preference, but, you know, it's scheduled every week. Um, I look at finances every Tuesday, uh, that takes an hour. So there's different things spread out throughout the week, but I'd say it's about a day, a week of work.
Speaker 1 00:50:49 Cool. Meryl, super wonderful. I think we'll have to have a part two here, <laugh> in another few weeks, uh, to, to catch up on the other, like half the stuff we didn't get a chance to talk about. But, um, really cool to catch up in person or like virtually like this finally after we've been just kind of seeing each other for years. Um, and just a huge congratulations on the success and, and kind of taking a step back from being ninjas and, and pursuing these endeavors. It sounds like you're really like living the dream. It's super, super cool and inspiring. Yeah.
Speaker 2 00:51:16 Thanks so much, Craig. I really enjoyed our chat. The, I sparked, I feel like I need to take notes. That was some idea, different ideas that have been sparked during the conversation.
Speaker 1 00:51:26 Awesome, awesome. Um, for folks who want to follow you and check out more, where's the best ways to kick? Sounds like LinkedIn maybe. Yeah,
Speaker 2 00:51:33 LinkedIn is where I'm most active. So that's Meryl Johnston and if you're an accountant listening to this, which you probably aren't <laugh>, then you might like the lifestyle accountant show as well.
Speaker 1 00:51:43 Awesome. Awesome. Thanks Meryl.
