Andrew: Hey there, freedom fighters. My name is Andrew Warner. This here is Mixergy, and it is home of the ambitious upstart, the place where entrepreneurs come to hear detailed stories of how other entrepreneurs built their businesses. You know, this is not for the wannabe’s. The wannabe’s just want to hear that some guy started something, and look at how easy it was, and life now is good while he’s driving away in his Porsche to his mansion. That’s not what this is about. This is about the kind of details that would bore the wantrepreneurs. This is the kind of details that only someone who’s really building a business would care about, and that’s what I’m hoping to get out of this interview. In this interview we have the story of someone who took a passion for martial arts and turned it into an online business. Daniel Faggella is the founder of ScienceofSkill where he sells online memberships that teach Brazilian Jiu-Jitsu fighters how to beat their opponents – you know, things like how to do arm locks, how to do leg locks, et cetera. I invited him here to find out how he figured out what products to sell them, how he figured out how to create it. I want to learn from him how to sell. I want to learn from him how to automate the sales process. I want to learn how to nurture a customer. All that stuff, again, that would bore the wannabe’s but that would be appropriate for my audience right here. This whole thing is sponsored by Scott Edward Walker. He is the entrepreneur’s lawyer. walkercorporatelaw.com is where you should go if you’re looking for a lawyer. Daniel, welcome. Daniel: Andrew, thanks for having me here. That was a great intro. Holy goodness. I’ve never seen you flex in the beginning and all that. I’m excited. Andrew: Thanks. I want to make sure the people understand what this is about. This is not just another interview site. It’s not just the site that created all the interviews for the interview genre for startups. Daniel: That’s true, that is true. Andrew: This is a site with a mission. Daniel: Yeah, big time, which should scare off the wantrepreneurs for sure. Andrew: Of course. Daniel: Get them. Andrew: Of course. Let them go watch something on television. Daniel: Yeah. Andrew: Here’s where I’ve got to start with you before we even get into the details. Daniel: Yes. Andrew: On one of your sites where you say this… Let me see if I can play it loud enough for the mic to pick up. Recording of Daniel: “…got started on the Internet in a very juxtaposed way, okay, making my full time living…” Andrew: I got started on the Internet in a very juxtaposed way, starting… I think you’re using the word juxtaposed wrong there. Daniel: I might be. You know, I went to grad school and I wrote all these papers. I write for magazines. I still feel like half the time I flexicon my lexicon it’s wrong. So, who’s to say… Andrew: This is like your home page where you’re the teacher… Daniel: …but, yeah, I may very well have messed that one up. Andrew: …where you’re teaching people how to build a business like yours. And, right away, I got started in a very juxtaposed way. Daniel: And messed their grammar up… Andrew: And messed… Yes. Daniel: …at the same time. I’m not selling anything related to writing or grammar, not yet anyway. Andrew: Okay. Daniel: Thank goodness. Andrew: So, what do I take from this? Is the sense that all the people who sell online information are just schlocky guys who put up whatever they can with no attention to details because they’re just trying to pull as much money as possible? Or, is there some other takeaway that I’m missing here? Daniel: Schlocky, I like that term. I’ve certainly seen my fair share of schlock out there in the universe. Yeah, so in terms of there being something else out there I think there is for certain. I mean I’ve certainly seen both sides of the coin myself. When I first got into the space I decided I was going to be immersed. So, I did the events. I did the Kennedy stuff and had coaches in Australia who had membership sites in weird little crazy niches just to learn everything I could. You see your fair share of people that everybody sort of understands oh well, at the end of the day somebody bought one of his things. Oh, gee, not one of his things. Then, you also have your folks who fought to make that a transition, to make that sort of a pursuit of passion for them – something that they were excited about, something that they wanted to get into. I think if I was looking to maximize dollars I would’ve hoped I would’ve been smart enough to not do the Brazilian Jiu-Jitsu space myself. But, for me it was kind of carrying that enthusiasm forward and, also, just staying involved in something I cared about, I think. A lot of people do get started there, too. I know folks that teach English on the Internet. Again, I had a fellow who taught model train stuff. There are just certain things that I don’t think you delve into if you are just looking for the bucks. But, there’s certainly a little bit of both, I’d say. I wouldn’t umbrella anybody. Andrew: You know, years ago… Years ago? Maybe even days ago I would see something like this and think this is not the space that I even want to do an interview around. It just feels so cheap, and unpolished, and so I don’t know what the word is. I would’ve stayed away from it. The thing that I’m learning, though, is that having that attitude is keeping me from expressing myself, that having this judgmental attitude about what is out there in the information product business or out there at all on any site that’s trying to teach education. When I become judgmental of them, I end up restricting myself. I end up then, when it’s time for me to write a webpage, I think, “Well, do you really want to be like these guys?” Do you really want to . . . I start judging myself harsher using the same . . . harsher than I judge others using the same lens that I judge them with. Do you know what I’m saying? Daniel: I do to some extent. Tell me a little bit about how you mean restraining yourself from expressing yourself though. I think that’s kind of interesting. Andrew: If I were going to create . . . If I were even going to write a post teaching someone something that I know I could do well, I would second guess it, and I would doubt myself, and I would keep myself from doing it, just because, well, if I judge them that way. If I looked at Daniel’s website and I said, “Ooh, look at him using the word juxtapose.” What if someone does that to me? And what if I’m making a bigger mistake than juxtapose, you know? And then I’m really a fool. And so that’s what I mean by it kept me from expressing myself. Daniel: Oh. I sort of understand where you’re coming from. But I think, I mean obviously, you know, you’re out there in the public a lot. I think you’ve probably overcome a good amount of the camera shyness and whatever else, but I can see how the lens would go both ways for sure. Andrew: All right. Well, I don’t want to be that person anymore. Daniel: All right. Andrew: I want to walk into situations thinking, “What can I learn?” I want to walk into an interview especially, and I always have, saying, “What can I get out of it?” So my goal as I sat here is to figure out how I can learn to create products from you. How I can learn what’s worked for you. But let me just get to know you a little bit better. You started out not selling information online, but actually doing something in a real gym. What were you doing? A: Brazilian Jiu-Jitsu, of all the things in the universe. Brazilian jujitsu is for . . . you’ve probably seen the UFC and things like that, Andrew. Every now and again. Andrew: Absolutely, yes. Daniel: There’s commercials for that stuff, so Brazilian Jiu-Jitsu is the ground fighting aspect of mixed martial arts, brought to America by the Gracie family, long story and lineage. Basically, it’s a grappling art and us little people who can’t, you know, punch very long, we sort of have to work with what we got, and for me that was Brazilian Jiu-Jitsu. It was a sport a fell in love with. So, that’s where I started. I actually started in the back of my father’s carpet store. I was teaching for a guy who was just a . . . not quite that much of a business fellow, and he went out of business pretty overtly and abruptly. And he let me keep his mats because he wasn’t paying me to teach because he didn’t have any money. And I was like, “Hey dad, can I roll these out in the back of your carpet store and start a martial arts gym?” And he was like, “If you pay me for the heat.” And I was like, “Okay.” So, that was the beginning of the business. Andrew: All right. And where did you go from there? Daniel: Well, from there I decided I was going to do grad school at U Penn. And then, you know, they hand you the bill and all that, and then you sort of realize you got to pay for it and everything. So we had to move out of the carpet store and continue to expand and do kids’ classes. And it started off really as us just in there practicing. I mean, I didn’t have a curriculum. I didn’t have much of anything. We were just . . . I was in love with the sport. I could eat Ramen noodles and you know, that’s a good enough life. But covering Penn and really taking a little bit more seriously, we ended up scaling up our space a few times, and the whole while, or a good percentage of this time, I’m driving back and forth from Pennsylvania. So I was the only guy doing sales. I was the only guy on the phone, the only guy, you know, who could write my papers, even with that horrible grammar. How the heck did that happen? I have no idea, but I . . . geez. I think I’ve probably been choked one too many times, so I might be able to put the blame on that, but yeah, so hustle bustle, back and forth. And we ended up expanding to 4,500 square feet in a really little town, but enough space to run multiple classes at once and really turn into something kind of fun. So that’s where it ended up taking us. Andrew: And did it help you pay for grad school? Grad school’s pretty expensive. Daniel: Yeah. Yeah. It was the only thing that paid for grad school. So initially, it was all private lessons. When the gym was puttering along and I’d, you know, keep a couple bucks at the end of the month after covering heat and whatever we’d pay for rent in the smaller spaces, I had a place that was probably 300 square feet or less. And we were only paying 500 a month or something like that. Still pretty cramped, not really ideal, but it was private lessons that were footing the bill. And then as the gym grew, we got 60, 70 students, then it was that that was the overflow that was going towards the Penn bill. So it ended up just being martial arts. Andrew: People like me, who are very judgmental of info products, tend to idealize real world brick and mortar stores. Like they’re selling something real. We’re selling something fake. They are selling something you can touch and so on. But, beyond the idealization of it, there are some real harsh realities, like what happened to the roof of your place. What happened? Daniel: It’s true. So, the transition to info products, just to be clear, was, you know, I suppose juxtapose isn’t the word, but it was something like that. I didn’t have the dream in my mind. Honestly, for me, my only other source of revenue at that time was public speaking. I do like to speak. Skill development is my passion in addition to martial arts, and that applies to everything. So, high school talks, college talks, Alex and Ani, various companies. Just being able to convey that. So that was my vision for what else I would do. But at our academy, our building was built in, probably…it’s an old mill building in Rhode Island. There’s a lot of that in Rhode Island and Massachusetts. It was probably build in 1840-something. And there was a foot of snow and then two days of rain. And on a flat roof built in 1840, I mean, it’s only so long until a whole bunch of beams are going to start bending and the roof caving in is going to occur and all sorts of terribleness is going to go down. So what ended up happening was we had our academy flooded just about a year ago. A little bit less than a year ago, technically. And it was really like if you’re in your bathroom and you crank up the tub and you have that tub faucet on. It was six or eight of those in all different random places around the gym. Andrew: Wow. Daniel: And just…different than the…the fire sprinklers are nice, that’s like a shower, you know? That’s not even all that bad. I mean, I would enjoy a fire sprinkler, but this was a different ball game. This was just a tube of water in all these different spots. So, it wrecked all the drywall. We had to tear up all the mats. You know. Get big industrial fans in there and all that kind of stuff. And that, for me, was a big scare of some of the downside of having physical stuff. Andrew: How much of the cost of that was on you and how much on your landlord? Of fixing it. Daniel: They let us pay half of one month’s rent. Essentially, that’s sort of a little bit of an odd arrangement there. We could-a, should-a, and would-a left from that place close to a year before then when we had somewhat of similar rain-ish problems. Most of it got kind of patched up and fixed. And there was enough of a clause for us to be able to kind of pull the string, but we knew that they weren’t going to cover whatever went down. But the fact of the matter is that we had just expanded, we were right next to the college which is where we get a lot of our students in the transition fall and in transition spring. So, spring was going to be coming up and do we really want to slough everything off? So, we paid half of one month’s rent and everything else like painting, time, people, equipment that was us. That was my bank. And that was right after I expanded so there wasn’t all that much in there. So, that was… Andrew: So, when that’s you had to, or you decided to go into online businesses. Daniel: Yeah. Andrew: What’s the first thing that you did to create an online business? Daniel: Well, I’d filmed some seminars. And, for me, I always film competitions because I learn a lot from that. Again, being sort of a skill development junkie and being obsessed with, kind of, getting better I like to think about teaching and speeches and seminars in the same way. So I had seminars about beating bigger, stronger opponents. That was kind of one of my things in the competitive days was, you know, grappling the big guys, guys twice my size and things like that. So, I’d done some seminars on that. And I just decided this will be what I can package up. I think this stuff is unique. I’ve studied the game, you know, more than anybody else in this particular light, this particular facet. Andrew: Mm-hmm. Daniel: And so, I think this will be a good thing. So, that was really the entire thought process behind it was that I need something and that was a good first concept. A good first idea. Andrew: So you created…you did in-person seminars, then you recorded those. Daniel: Yeah. Andrew: And then what did you do with those? Did you start selling them online? Daniel: Yeah, yeah. So we put them up on Amazon S3. Andrew: Mm-hmm. Daniel: So Amazon S3 allows you to host, well, it actually gets pricey at a certain point, right? We learned that one the hard way and we’re probably going to figure out some transitions beyond Amazon as we’re just paying out the wazoo for them at this point. But, yeah, we just loaded all the stuff into Amazon S3 and essentially broke up the video into sections. So we broke it up in terms of escapes, submissions, leg locks and some of the things you had mentioned at the beginning of the interview and then included a bunch of interviews that I’ve done with Brazilian jujitsu world champions. So I had a website at this time and, again, skill development is my thing. I’m very much about interviewing a lot of the better lightweight Jiu-Jitsu guys and understanding strategy and skill building from their perspective. So, I put a lot of the transcripts and their key lessons into some .pdf materials which was fun stuff to do. I mean, I was already writing about this stuff all the time for the magazines and everything which was by no means a full-time job. It was just something I did for fun. And then put that along with it and then that became sort of package number one and the first thing that we ever really got out there. Andrew: But you were doing your blog which was on scienceofskill.com, right? Daniel: Yes. Andrew: And doing interviews there just to do them before you packaged them up into a product to sell? Is that right? Daniel: Yeah, that was its own thing. I mean, I needed a little bit of cred. I sort of wanted to… I like seminar stuff, so it’s always cool to be able to have some credibility. So, to write for Jiu-Jitsu Magazine and these other magazines… Some of the tournament background from my competitive years was cool. It was good cred. But, if I didn’t have tangible material to work with, the easiest way I always found to get into whatever magazine I wanted to get into was oh goodness I just interviewed such and such and I’d love to put something together right now. You know, somebody just went to world championship… I mean it’s hard to turn down that draft. So long as I didn’t mess up the draft and say juxtaposed or something then I could get in there. I was building that thing and putting that together. The initial blog, way early on, it’s just brain dump stuff. You can see it’s essentially grad school mixed with Jiu-Jitsu dumped onto blog posts. Some of them not, you know, super fine tooth combed written, but some of them I took a long time with… Andrew: So that’s why it was called ScienceofSkill. Daniel: Yeah, that’s scienceofskill.com. Andrew: I see it actually. I see a post here from January 25, 2011. Daniel: Oh yeah. Andrew: Two Tips for Better Training with… I guess his name is… Daniel: Caio Terra. Andrew: Caio Terra. Daniel: Caio Terra. Andrew: Yeah. So, there’s an interview that you did, and you made it into a blog post. Daniel: Yes. Andrew: That’s the kind of interview that you would’ve taken to Jiu-Jitsu Magazine and said, “Hey, I just did an interview with him… Daniel: Exactly. Andrew: …let me write up a… Daniel: I didn’t do any with Caio, oddly enough, for magazines. But, there are other ones in there with fellows like Renan Borges and other Jiu-Jitsu athletes who I was able to run to the magazines and say hey I just talked to this guy. I paid for a private lesson and he showed me all this cool stuff. I’d love to put some together. So, that’s what that set was… Andrew: Got you. First product was package of those interviews plus a recording of your seminar… Daniel: Yeah. Andrew: …that was edited into pieces so people didn’t have to watch the whole thing and distributed through Amazon S3 which hosted them. How did you get customers to buy this first package? Daniel: Yeah. Man, that was definitely the conundrum for us early on. Really, joint ventures ended up being the biggest winner for us. But, early on and still to this day one of the real drivers was being able to write. Having gotten onto the magazines well before I was aiming to get permission on a bunch of other websites, it became easier to get on other websites. There are websites like bjj.org, bjjaddicttv, bjjtoday, bjjlegends.com – they have their own magazine they used to produce. I don’t know if they do any more or not. But, these are all places that had seen some of the interviews. They’d seen… If I’ve written for “Jiu-Jitsu Style” and “Jiu-Jitsu Mag”, “MMA Sports Magazine”, all that stuff, they’re going to assume my stuff’s going to be halfway decent. If I submit a few things then they would just let me post. Like, all right, this kid’s got some good stuff. At that point we’re able to get up and around all those various sites. And, to this day the coolest thing about our early days of grinding away with guest blogging, which really was the driver of traffic at that time, is that in any given day some of those sites are sending something for leads and… Andrew: Still today. Daniel: Yeah, to this day. Because we have… Andrew: But, when it was time to actively get… Daniel: Yeah, yeah. Andrew: …customers from them, what you did was you went to them and you said if you link to my product and help me promote it I will give you a cut of the sales. Daniel: The guest posts not, actually. The guest posts, the benefit was hey I interviewed Caio, interviewed Cyborg, interviewed whoever the athlete might be, and I’ll put this thing up there. I have a little header, little footer, and little link back to another blog. The real driver when I was able to get things rocking and rolling was joint ventures with more not just blogs but folks that ran fan pages or bigger email lists. Andrew: I see. Daniel: One joint venture partner in particular who we’d essentially said hey I put together this product, we ended up actually kind of collaborating and building something together. If you drive the traffic I’ll manage all the back end and the crazy Infusionsoft. Because I was getting into CRMs and database marketing even just with my martial arts gym. So, I kind of knew the tools. This particular fellow more just had the traffic and the big following. So, we said let’s combine forces like Captain Planet and make this thing happen. That ended up really being the fit. It was who thinks about and teaches Jiu-Jitsu in a similar way who I can chat with enough to bring some value to the table. For me, that was I can post the stuff and get us featured everywhere. I can manage the back end, and the payments, and the CRM, and all that stuff. You’ve got the traffic. Man, let’s do it. You talk to enough folks and make it click like that. That was the first real boost for us in the online business. Andrew: What about the tools that you use to sell your… Right at the beginning, when you were selling the seminars, when you were selling the interviews, what did you use? AWeber? Was it some other product? Daniel: In the very early days it was AWeber to PayPal which is just horrendously limiting, terribly hard to articulate how limiting that is. Andrew: Mm-hmm. Daniel: So, but that’s what I did in the beginning and then I had . . . I had already had actually Infusion Soft for my martial arts academy. Fusion Soft you already know Andrew, but maybe other folks don’t, is another more advanced CRM email marketing and eCommerce platform. Andrew: Mm-hmm. Daniel: Sort of covers all of those facets. Allows for some similar detailed management of lists, management of tags, management of past actions and tracking of purchases and very, very important data if you actually kind of want to make money from a following of folks who are following you for particular things. So, it started off with [inaudible 00:00:36] in PayPal then it moved right to Infusion Soft as soon as I could. Those were the tools. Infusion to this day is the primary tool for me. Andrew: I just started getting into Infusion Soft. This guy Patrick Conley, I was just searching my inbox to see how I got it. Patrick Conley got me a discount on the price that they offer on their website. I worked with them for weeks trying to get a discount. They could do it, but I guess Patrick because he’s, he’s a reseller. Daniel: Hmm. Andrew: He was able to do it. Daniel: Interesting. Andrew: Yeah. Daniel: Yeah, go figure. I figured that you could just kind of let them know. You know, you could . . . Andrew: I thought so too. Daniel: [??] Andrew: I said, I heard people are getting discounts and the salesman said, no there just aren’t any discounts. We don’t offer them. Maybe we did at one point, but I . . . before my time. Daniel: Like it’s great. Andrew: Like you never heard of the word discount. Daniel: It’s great. It’s great. Well, that’s I mean, I got the same thing and then I have other people that have gotten a different thing. So, it’s like anywhere else, right? I mean, you go to get an apartment, oh, yeah well, we were running a special but I mean, we don’t normally run [inaudible 00:01:28]. Andrew: Right, right. Daniel: It’s part of the [??] so it’s all in like . . . Andrew: They also seem to have these partners and I guess Patrick is one of them that they give . . . they make it easier for them because they know that the Patrick’s of the world are selling it. Daniel: Yeah. Andrew: Okay, so Infusion Soft to that and your shopping cart was Infusion Soft also? Daniel: Yes, but we used order forms. So, Infusion Soft as the shopping cart or order forms. We used order forms. So there’s different ways to sell things on like . . . Andrew: Order forms is a product that fits in with Infusionsoft. Daniel: Yeah and well, and order forms so just to clarify too for the folks who are into eCommerce or eventually want to package their stuff is shopping cart a lot of the time is more a la cart kind of purchasing where you hop into a store, there’s this thing, this thing, this thing, this thing, this thing and you can put a bunch of things in a cart and then you can go off and you can say check out. Andrew: Right. Daniel: An order form is more, here’s these three things that we’re doing a special on and we don’t have links to 50 other things to make you confused or have you go off in 80 different directions. Here’s the bundle you know, we just created this new thing, if I put it in with these other things and this is it. So, an order form is a particular special of either a product or number of products that fits on a single form where people can enter their payment information then that’s it as opposed to . . . Andrew: Oh, I guess [??] the software that powered it was it Infusion Soft or were you using . . . Daniel: Yes. [??]. Yeah. Andrew: It was. You were using Infusion Soft system. Okay, got you. Why didn’t you use Click Bank? Daniel: You know, I suppose . . . I mean, I’ve done some things with Click Bank now not my . . . I mean, we have a product on Click Bank. Took me awhile to get it up there, but I still haven’t pushed and I just like Infusion Soft more. Click Bank has their percentage and I think I still have sort of my own perception of Click Bank for whatever reason right, rightly or wrongly. Maybe like yourself, I’m not expressing myself adequately by holding that opinion but which may in fact be the case but I just never cared to throttle it and push it. I think Infusion Soft I always felt like gave me a little bit more control when the payments went through Infusion. I can see okay, this is a person who has purchased these kinds of things. Here’s how much they’re comfortable spending so I don’t really want to throw bigger offers at that person, but I also don’t want to go too low with that particular person. So, more data on my end in terms of understanding who the heck . . . Andrew: Mm-hmm. Mm-hmm. Daniel: . . . I’m dealing with and then also I think less of a percentage out to you know, another third-party. There’s nothing wrong with it. It was just not the route I wanted to go. Andrew: All right, so the first product. Any mistakes in the way that you created it? Anything that we could learn from before you talk about what you did next? Daniel: Plenty of them. Andrew: Okay. Daniel: Plenty. So, one of which was delivery. Delivery electronically, I would have just figured would have been the easiest thing in the world. When I did my first launch of that initial seminar and those interviews and things like that, I just figured hey, anybody can download the thing. We’ll put it in a zip file. It’s a whole bunch of videos of this big old seminar and some PDFs and other things we threw in there with respect to beating bigger, stronger opponents just sort of the big focus, but it was a lot in there. So it was a zip file and different people ended up having trouble opening zip files on different computers. People with Windows couldn’t do it. People with Mac couldn’t do it. I almost couldn’t find a pattern, but that was troublesome. Other people liked the zip file because it was more compressed. They could throw it right in their computer and they could run off with it. So we had to moving forward have it available in zip but also have sort of an online area where people could log into and then stream it from within a membership site. So, Infusion Soft does something called Customer Hub which is what we went with. You don’t have to, but obviously one that we did and we ended up deciding that both is really the way to go because some people are going to not like that they don’t have it and they can’t just download it and save it in a compressed way and then it’s theirs. And other people are saying, “Hey, it takes me forever to download.” Or, “I can’t figure it out.” So one of the biggest things was delivery, was figuring out how do people want to consume it and just going with, “Let’s satisfy everybody. Give them all the various options.” So that nobody doesn’t get to enjoy it the way that they want to. Or can’t consume it the way that they prefer. That was a big error early on. To kind of a scary extent in the beginning we had half, you know half of our, probably wasn’t half, but a lot of folks saying, “What’s up with this zip file? I can’t figure this thing out.” So that was one big thing. You also mean in terms of delivery or you just mean the content of the product itself? Andrew: How about the content and the sales? Any things that we can learn from that? It was your very first one. Daniel: Yeah, yeah. Sales, another problem that we had was with up sales. Which were other products and programs that might go along with it. Infusion soft does have some plugins that work well with that, but we ended up having hundreds of people go through the system and then click and select other things they would have liked to have purchased, but it didn’t track as they went through. So really triple, double, quadruple every browser, every operating system to go through those sequences… Andrew: To look for mistakes? Daniel: Yeah. That was a huge mistake. I mean to the order of thousands and thousands and thousands, I mean probably…In our first six months we probably lost at least a thousand bucks a month if not a little bit more on up sale stuff. We were too busy do other business things which now hopefully we’ve outgrown. But getting new customers and we kept sending them into this broken bucket over and over. And hiring a different person saying, “You go patch it. You go patch it.” Until we finally just spent bigger dollars to really have it built out. So that’s another thing. If you have something that involves API, that involves payment information, of course it’s complicated stuff, for us it was just worth it to find the real expert, sit down explain the whole thing, spend whatever it costs just to have it set up and working for all the different computers. Andrew: Got you. Yeah, Infusion Soft is very powerful. I still haven’t fully used it. But it has these weird quirks. Like you cannot manage your campaign using Chrome or Safari. I had to install Firefox just to look at the back end of it. Daniel: Yeah, yeah. Andrew: And you’re still selling it, right? The same first product? Daniel: We are. We are to this day and in fact we had a launch in October which was sort of one of the bigger events that we’ve had in this little business thus far. And that was a lot of the same material plus I’ve done a lot of new seminars, a lot of new classes, and added just a ton of stuff to it. So we sort of kept a similar price point and just put in a bunch of additional interviews and additional resources specific to what that product’s goal was. So we’re still selling it now. Andrew: First month, what was your revenue? Daniel: First month, negative revenue, probably. I don’t think we had revenue to be honest. We weren’t really revenue-ing at that point. Andrew: How about after the launch, I mean? Daniel: After the first launch that we had? Andrew: Yes. Daniel: The first launch ever. The first launch that we had did was with that initial JV Partner and that was 17 thousand dollars that next month. Andrew: Seventeen thousand total revenue that you and your joint venture partner… Daniel: And of course there were expenses. So there was all that, so… Andrew: What kind of expenses are there beyond sharing the revenue with them? Daniel: Yeah, these are important factors to consider. There are, if you have anybody obviously helping you with support, so I have to at this point with X number of thousands of customers and whatever else have somebody on support every day. And that’s not for eight hours, but that’s for an hour and there’s other ancillary activities that have to go on with that, so that’s part of it. If you are doing anything with mailing and shipping, you’d be so surprised as to what it costs to get something to Greece or Indonesia. You just wouldn’t imagine you’d pay that much for stamps. You’d just think it was impossible… Andrew: What were you mailing? Daniel: What did you say? Andrew: What were you mailing? Daniel: DVD’s, binders,… Andrew: Oh, really? Daniel: Yeah. Andrew: Do you still do that? You do still do that today. Daniel: A little bit. Some people just like physical stuff. And I could run the business solely digital, but there’s some people who I know are going to say, “Hey, I get it, but I want to be able to plug it in my computer.” So every now and again we’ll put up physical stuff just because there’s a whole slew of folks that get excited when it is physical. Because that’s the stuff that they want. So we do a bit of both to be able to sort of drum it up from both sides. So mailing is certainly an expense. Payment processing is up there too. If you make mistakes with payments or things get crisscrossed and things have to get refunded in different ways, when money goes out through the payment processor or comes back through the payment processor. There’s no transactions that they don’t have something going on because, of course, they have to stay in business. So that the more of anything that you have coming in and out it can get a bit little dangerous and with lower price points you have the danger of that, maybe, trimming a little of that away from margin if you’re really putting out with those kind of percentages and whatever you get charged for refunds and things like that so really understanding payment processors. For me now we’re actually looking for additional folks to do payment processing just because we know there’s better fees and rates out there but that’s something to think about. Andrew: It does add up. Who do you recommend or who have you seen that’s good? Daniel: Well, I’ve liked PowerPay for a certain number of things. PowerPay, they’re easy to talk to. They have great support. They understand the Internet biz in some respects so if we have, let’s say, a month where things would jump or something like that, if I called them up, if I say, “Hey, I’m not stealing a bunch of credit card numbers from some hacker in Uzbekistan I actually just have all these people with email lists letting folks know about a webinar that we have. So when you see this happen on this day, it’s not going to be any more than this amount, but it could be around there so don’t be too surprised. That is what it is, and they understand that. So I think it was Jeff Walker, one of those other Internet marketing folks, that had mentioned PowerPay is down with that kind of thing. So I like them for that. I have nothing against PowerPay. I certainly wouldn’t speak ill of them. I think in terms of lower rates there’s probably other routes to go, but they’ve been really nice to us in terms of… Andrew: And then they plug into Infusionsoft. Infusionsoft is the software, PowerPay is the payment processor. Daniel: Yeah. It’s wild how many… Then there’s authorize.net, so you have your eCommerce, you have your Gateway, and you have your processor. So any eCommerce business involves those three. My advice for anybody who’s going to be plugging that in, if you’re going to build anything eCommerce, get on the horn with support with those people and really understand what’s actually happening. What’s plugging into what and how it’s all… Andrew: I still don’t fully get it. I usually… Daniel: I don’t get the full picture. Andrew: Right. Because I have authorize.net and PowerPay, but I still used both of them. Daniel: Do you use PowerPay? Andrew: I used to and then I did an interview with the founder of Stripe. And he told me, “Hey, dude, get off that, get on our system, and then he followed up with an email introduction to someone at his company who can help me with the tech issues that I brought up in the interview. I finally checked them out. They were good. What else do I want to know about that first one? I know what. Your goal was to Tim Ferriss. What did that mean to Tim Ferriss? Daniel: So to Tim Ferriss, for lack of a better term, I think I used it because most people have read the book which they sort of get the gist is that he had that muse idea of having a business where you spend X amount of time with but you’re not necessarily attached to nine to five to. And because I knew ultimately getting out of grad school I wanted to be moving up closer to Boston which I am now. I wanted to be involved in other projects and more in the startup community, in the startup world and really become more immersed in that business space that I wouldn’t be able to, like the physical gym, for example, come in at X o’clock and teach these classes and then yada, yada. I have to be able to block it off whatever segment of the week my responsibilities could get nipped and tucked and then be able to do what else I needed to do. And have support on some of the other project level things handled. So the Tim Ferriss thing for me was not necessarily only spending X amount per week but only spending X amount per week when I decided that X amount would be if it’s Sunday night, great. If it’s Wednesday at 3:00 in the morning, okay. Whenever it happens to be, whenever I need to tuck it, I needed it that the copyrighting whenever my weekly chores were, looking through reporting and things like that, be able to tuck into a particular space. And that’s really what I’ve built the martial arts side of things to be now. Andrew: What year and month did you launch, do you remember? Daniel: Our first product launch? Andrew: Yeah. Daniel: The first formal product launch with [??] was in January. Andrew: January of 2013? Daniel: Yes. Andrew: Okay. And then your goal was to get… You wanted a cruising goal of how much money? Daniel: Yeah. We wanted to be doing $25 a month and to be able to, at least, hold that because I figured if I had that the salable price business would be pretty good and if push comes to shove I would be more than able to live off of it so long as I didn’t mess up too much with my margins. So that was the objective for the business when I first got in it and it was a little bit for that year. So for that year it… Andrew: How long did it take you to get to $25,000 a month? Daniel: It took us almost right up until the end of the year. It was October when we broke it. I think we were right… I think we might have been right there in September. No, maybe not, maybe 21 or so. I say either the CSV. So we popped it open. Andrew: I don’t want to reveal anything, i do ask guest if i can’t get third party to get the confirmation of the numbers i will often ask the guest for it, and yes you sent me the CSV of your whole finances, you broke it down. Daniel: Bottom thing, whatever you want. I mean I’m cool with you assuring on Mixergy, i don’t really care. Andrew: You would be Okay putting this in the comments? Daniel: What you said? Andrew: You would be Okay with me putting this whole breakdown in the comments? Daniel: Chuck it in there, man! Let’s do it! Andrew: Really?! Daniel: Oh, well, I don’t know? Whatever you feel comfortable. Andrew: I’m all for it if you are. Let’s see if the audience [??] I will take the CSV down. Daniel: I like the tension Andrew, I want it! Andrew: You do? Daniel: So let’s do it, yeah, yeah, so anyways in September we weren’t, in October we did and we were able to sort of carry that through into the New Year and continue from there. So now is the goal to kind of to keep it, at least, there, we would like to stay 30 as of now even with a lot less time, kind of. Andrew: Can i read what the net income is on this? Yes of course, because you want me to share it i might as well. Daniel: Go for it. Andrew: So, October, we have gross income of 46,368 dollars and 59 cents and net income after all expenses 39,747 dollars and 17 cents. So roughly 46,000 U. S. dollars in sales, 39,000-40,000 U. S. dollars in profits. So it’s only 6,000 U.S. dollars in expenses! Daniel: There are some expenses now for this new year that are nice and new and grand in terms of education. Seminar stuff and I’m doing classes at the MIT, so that not all sitting all pretty and nice in the bank but it goes away when you invest into another stuff, but for October it was mostly launch stuff and we have paid the affiliates the next month. Andrew: Yeah, look at how sweet this is, that you don’t have many refunds, your only software expense, I’m guessing is Infusionsoft, is that right? Daniel: Ah, let me think. Yes, at that point i don’t believe i had GetResponse as well. Now i have GetResponse too. Andrew: What’s GetResponse? Daniel: I don’t know how deep in there you’re now Andrew, but deliver- ability wise the email gods are not always the biggest fans, so, GetResponse is now an expense but during the launch it may very well had been that Infusionsoft was pretty much was our [??] Andrew: What does GetResponse do? Daniel: Are you familiar with GetResponse? Andrew: No. Daniel: Oh geez, so GetResponse is [??] contact, eye contact. Andrew: Oh so, Infusionsoft is not hitting the deliverability that you want so you need to get so you need to use GetResponse. Daniel: Yes, not always. Infusionsoft has been doing better because we had been doing a lot more sub segmented stuff and that just tends to if you get better open rates the email wizards in the sky happen to like it a little bit more, so Infusion allows for that, but in terms of if i just want to send out the newsletter. Let’s say I just interviewed somebody cool, or for example for the new year I had an older blog from back in the days when you were looking at my stuff which was all about drilling and drilling the skill available and obviously I’m a nerd for that. So I send a big thing to everybody saying: hey it’s time to drill the new year! And if I’m going to blast older folks which will only happen once or twice a week, but I want to get with GetResponse because on the aggregate we’re going to be a little bit better in the terms of deliverability. Couldn’t tell you why, just happens to be what it is. So that’s why i use them as a little bit of a backup. Somebody told me once that the worst number in business is 1. So i sort of tried to take that [at heart] at the number of occasions so [??] is one of them now. Andrew: How many people are in your email list? Daniel: Right now deliverable a little less than 20,000. If i dug far enough and hard enough maybe i could squeeze 20 [and upwards], now it’s a little bit less than 20,000. We should be breaking 20,000 by the time this month comes to an end because we actually have some pretty cool venture and joint venture [side of] stuff, so we’re doing a lot more of that and we’re right about there and i think customer wise maybe four thousand folks or something like that, three or four thousand folks. Andrew: So beyond that we talked about which is your seminar with interviews, etc., what other products are you selling in the martial arts space? Daniel: In pure martial arts, and of course the stuff you’re looking at, the CSV deals and the other businesses, this is one thing, it’s not the other stuff. But in pure martial arts, punchy, kicky, choky type of stuff, we have all sorts of different programs about really particular skills. So, again because this was one benefit of, well I suppose it’s two benefits. Number one: i like Jiu-Jitsu, so if you put me on a mat and you have a camera I can just go on about techniques. Number two, I had to be working 80, 90 hours a week in my martial arts gym to get that drywall fixed and everything else. That’s a lot of mat time. You put a camera on that, and if I’m teaching seminar after seminar and advanced class after advanced class or even beginner classes, that’s a lot of succinct content about particular topics. We essentially took those as bundled content about, let’s say, escapes. If you’re a Brazilian Jiu-Jitsu practitioner, and you’re just getting crushed under bigger guys all the time, and you end up feeling like you never get to use your offense because you’re always getting smashed, there are certain positions you’re really going to want to know how the heck to get out of. Andrew: Okay. Daniel: Side control, mount knee on belly. So, we’d build a product just about that. We’d build a product just about that and just about drilling. We’d build a product… Andrew: Now what does that go for? A product just on that and just for drilling, how much do you sell it for? Daniel: I think it would depend on how long it is. I have a $27 product now called ‘The Side Control Escape Blueprint’ which is essentially a map. So, it started with a mind map of the three core escapes to side control and how each one connects to all the other ones. If you’re going for escape one, getting back to your guard, you can leverage an underhook. And, how if they counter that you can turn that into this other sort of skull crawl escape that we do. That’s an hour long. That’s $27, $17… Andrew: Okay. Daniel: …depending on what sort of special we want to run on it. I think if it’s just up there on the site and somebody wants a DVD mailed out to them, $27. Andrew: Okay. It’s DVD that you sell for that. Daniel: Sometimes, we’ll do digital, too. It sort of depends on the offer. Andrew: Okay. Daniel: Most of our stuff is going to be digital, but we do have some things that we’ll still do physical or that are always up there available for physical if somebody just says okay I want that physical. Some things we don’t have shown as in stock physically because it just costs so much to make a four DVD set in a case and all that stuff. Andrew: What about the membership site? What do you sell, and how much does it cost? Daniel: Yeah. The membership site, we have a number of them. In the pure martial arts space the first one that I started off with was a whole bunch of stuff. I sort of put it together, this is before reading the lean startup type thing, based on what, as lucky enough to be a buyer in this market, to be a smaller Brazilian Jiu-Jitsu guy, I thought gee what would I want to learn about beating bigger, stronger opponents. This is a $57 a month program that’s called David versus Goliath. Andrew: Okay. Daniel: We have hundreds of people on this program from Malaysia to France and wherever else. Every month there are five separate segments, one of which is a main video module which could be escapes. It could be an entire seminar breakdown. I did a seminar in Connecticut that was all about sweeps and escapes for beating bigger guys, things like that. Essentially, a major, maybe 45 hour long video module of just techniques that I aim to gear towards beating bigger, stronger guys. The second part is I do a voice over of a Jiu-Jitsu match. So, if you’re into… What sports do you play, Andrew? Andrew: I just run, swim, cycle, that kind of thing. Daniel: Okay. So, cycling, all right. Andrew: Okay. Daniel: You’re into cycling. You ever watch… Andrew: Yes. Daniel: …the Tour de France? Andrew: I watched the Tour de France once… Tour de France. That’s the way the announcer says it, and I say it that way. I watched the Tour de France once, and I did watch them break down what the cyclists were doing, why they were getting as close as they were, and it was helpful. Or, frankly, even when it wasn’t helpful it felt helpful but it was fun to watch. So, I totally get it. Daniel: If you’re an enthusiast, right… Andrew: Yes. Daniel: …you’re an enthusiast. I am very much an enthusiast, and at the same time I come from a world of being an active competitor. So, really all I cared about doing before I started a martial arts business was winning. I was big on winning and stuff. Andrew: So you basically watch a match and you’ll break down what’s happening. Look at how he’s doing… Daniel: Yes. I’ll commentate. The second part of the five things that come along with David versus Goliath every month is the whole match and me just doing voice over of the match – explaining the dynamics of what’s happening, what grappler A is trying to do to grappler B, how he’s tried to do that in other matches, what sort of counters might’ve been realistic, and what might have happened during that match. Then, we’ll take it to the mat and I’ll pick two or three techniques from that match that, for me, really exemplify the lighter weight Brazilian Jiu- Jitsu strategy – strategies that’ll work for someone who’s not strong. – Andrew: Okay. Daniel: I don’t lift weights. I never really have consistently lifted weights. I didn’t really do calisthenics. I just do Jiu-Jitsu. So, I’m very much not the strong guy. I’m just the Jiu-Jitsu guy. I really aim to break down those particular facets of the match that would apply to someone who wants to learn that kind of a game. So, then we’ll break that down. Then, I have another segment of David versus Goliath which is an article written about an interview with lightweight Jiu-Jitsu champions. So it might be someone who’s a Pan American champion. Oftentimes we’re talking about World Champions. And we’ll take an interview that I did with them about goal setting, about strategy, about pre-competition preparation, and I’ll break it down into an article. Something I could or should put in a magazine, but we just put into the member area. Sometimes… Andrew: What does all this go for? Daniel: This is 57 dollars a month. Andrew: Oh, seven dollars a month. Daniel: No, no, no. 57 dollars a month. Andrew: 57 dollars a month. Okay. Daniel: Yeah, yeah. So there’s the main video module, the match breakdown, the breakdown of the match breakdown on the actual mat, the PDF which is the interview that I’ve done which I then converted into text, and then the audio segment of the interview where it’s either the audio itself or it’s me going into detail of how you would apply those insights to your own Jiu-jitsu game. Andrew: And you create a new package of these things every month for 57 bucks? Daniel: Yeah. Andrew: How does someone who’s listening to us figure out what to put into their membership site? Daniel: You know, I think that’s a good question. And to be honest, I get asked that often. When we got into this space, there’s a lot of conundrum around it. Really for me, I am one of the people that would get into something like that, so I just thought about what would be helpful. Let’s just pretend that I want to good at Jiu-jitsu and I’m a small guy. Oh, wait a second, and then built it. But then at the same time not everybody is in that position. I think really, the way that I did it was I looked at what else was out there, in terms of, there’s all sorts of membership sites. Honestly there’s less expensive membership sites. But there really wasn’t anything niched. So if somebody wants to learn, let’s say, how to ride a bike in just a normal bike race of some kind. I don’t know. They want to go mountain biking. You know about bikes. I don’t know anything about bikes. I’m just trying to make a fun bike analogy. If you want to get trained on the fundamentals and basics of riding a bike, you can probably go somewhere and pay somebody. It’s not going to be all that expensive. But if you really want to learn this particular kind of mountain, I’ve seen all these really crazy. Maybe you’ve seen this stuff. Where they go straight up mountains and they jump off of these boulders and crazy stuff like that. If you want to get a private lesson in that sort of thing, it’s probably a whole other ball game. In terms of the number of people that can break down that level of stuff. So for me it was just niching down. It was saying, “Okay, well, this is sort of what the general Jiu-Jitsu site might be. Somewhere in the 25 dollar range. Maybe in the 35 dollar range, 40 dollar range.” And then I’m not going to sell to everybody. So they can sell to anybody that does Jiu-Jitsu. Probably more than half of the Jujitsu world would look at my product and say, “I don’t know if that appeals to me.” To be honest. Andrew: Because you’re aiming towards the enthusiast who also, from what I can see from your site, is a smaller guy. Daniel: Yeah. Or just not as strong. So really, to be frank, there isn’t that much of a trend in terms of actual weight of my customers. I do have some people who are like, “Yeah, I’m small like you and I resonate with that.” But really it’s just mostly folks who just aren’t natural athletes and they just want to understand the technical route as opposed to the beefy strong man’s route. So a lot of the time it’s really that that people resonate with. And not everybody does. There’s some folks that are competitors who really are stronger. They just are that much bigger and maybe it just never dawned on them to think about things like that. So yes. I do actually cut out a good percentage of the market, but I resonate a little bit more firmly with another segment. So that for me justified being able to niche it down content wise and then also to be able to price it a little bit more premier because it’s not stuff that you can just go on any Jujitsu encyclopedia and just pull right up. Andrew: And again, the software there, you’re just using Infusion software. You’re not using… Daniel: Always. Andrew: Infusionsoft and WordPress? Daniel: Infusionsoft, WordPress, and Amazon S3. I can’t write a lick of code to save my life. If you told me to make a work red with HTML brackets, I’d probably go blind or something. I don’t know. Andrew: What about hosting costs? I don’t see any costs for hosting your WordPress site. Daniel: Hosting costs. I don’t really know if hosting is all that expensive. I think we pay that annually or we might have done something with GoDaddy where we just…Have you ever been on the phone with GoDaddy? Andrew: You negotiate with them too? Daniel: Well, you don’t really choose to negotiate with them. It’s support and sales. It’s a very interesting model. Obviously he’s a sharp man. Hey, support and sales. That’s great. You guys are so much smarter and the rest of these guys. But yeah, they’ll, “Hey I notice you have a website that’s down and if you update all your email accounts and you update your hosting thing at this point, yada, yada…” I think it was 300 bucks or something for a year if you have 20 websites. So that was never the biggest thing in the world. Really Infusionsoft was a bigger upfront expense. When I first go into Infusion over a year and a half ago, I spent $6,000 to pay for consulting to just figure it all out. I’m sure you’re still kind of just sifting through it until this day. Daniel: Yeah I hired a company to do it for me. Andrew: Some people Infusionsoft. Daniel: It can be, I am using just like contact information I am using caliousevado.com she is the consultant setting it up for me. Can i give her email address i don’t know, I give you the other guys email address the guy he got a dealer at Infusionsoft. I don’t mind giving that firstname.lastname@example.org. Andrew: Automationheroes, that was a pretty cool name. Daniel: Isn’t that a good name? Andrew: Yeah it’s got a impact. That’s nice all I get. Daniel: Sure thought of that. So I want to talk about automation because it’s an important way to sell online because you can’t just put up sales page and expect people will buy it. First, let me do this. I want to mention the guy was on my cup. This is Scott Edward Walker of Walker Corporate Law. You meant to get started. He has all you can eat package. I want to know how much you can get from all you can eat package. If you are curious about it, you don’t want to wonder like me, you can just email him. I’m going to give his email address. Also his email address is ready for email@example.com easy as that. If you are a new entrepreneur, you got to start up. You need someone to checking with. He is the guy to talk to. Now give you guys a sense of why I like him. On one of my past interviews he said that I should try contest, and he had a software company for contest. It is fun. Let’s do it but I needed terms, it was a rules for the contest. I don’t know how to get rules for the contest since Scott does rules for the contest. So I emailed him and I said can you help me out with this he said no but he sent a email to someone else within the minute. I got a response back. A person can handle those for me. What are the reasons I like Scott is that he is someone who is respected by the lawyers. He has contacts with other lawyers. I emailed him several times about things that have nothing do with his direct expertise but because he is so plugged in and because he is so respected he can find someone and they respond him quickly. And that’s one of the reasons I recommend to talk to Scott who is over at walkercorporatelaw.com. Automaton, where do we get started? Give me the sense of how impressive the full product can be and show me where do we get started. Andrew: Yeah, Infusionsoft particular here. Daniel: Why don’t we step with Infusionsoft because you know that software but [??] autopilot can do this at the same time people do with their Weber and other. You can do some of it even using whistlers the membership software. You can customize it but since you are using infusion software let’s just talk about what you know. Give me like one impressive automaton you created and then we talk about simpler ones. Andrew: Infusionsoft is just fantastic. What I really like is its ability to trigger actions to phone. If people follow through the certain number of steps unlike lot of other CRMs with Infusionsoft, certainly not selling fusion software right now, although i haven’t passing none of that. My purpose but happen to like more lot when I work in that system. Let’s say. so I just somebody opt in for interested in skill development, coaching, and they’re are interested but they haven’t sign up and booked a time or anything they just expressed some interest. They will got little bit more information and they got serious of emails let’s just say six different emails they are interested in for competition. They clicked a competition skill development link in email number one. Let’s say they clicked in email number two. Let’s just say they clicked in email number three. There can be tasks that will just appear on my dashboard of whoever I liked to have that task. They will say, hey Steve[??] click three of this torn links after it happened to get information we might have to give me call see if this is really interested in the stuff it seems he really diving in so that allows you marginally how involved you are on somebody. You don’t necessarily want to call him every body but somebodies digging in everything you send them about the particular topic probably the guy who works hard. So Infusionsoft allows you to be able to trigger those based on those activist and actions similarly if I have a product that after somebody purchases it it will market to them other related product that maybe similar but not exactly a same thing and at least presence that to them if they already purchased that Infusionsoft use the ability again ordination wise make it so that instead of marketing back products they already have it it will send them to other or skip that product and go to the next one sequence of whatever it might be. Andrew: Do you actually use it to call up a customer who is been so active? Did you do that? Daniel: Yeah, so we will use call forthat that will calls for point of scheduled time. We do calls for I have a starter kit for more of the Internet side of things. So another coaching kind of a thing. And as soon as somebody gets in on the starter kit, then that’ll register a, “Hey, I bought the starter kit.” And here’s the task to give them a call. So it can be by clicks. It can be by purchase. I’m usually not calling anybody off an opt in unless they enter in the email into the opt in because they’re not expecting to be called. But a purchase, activity, or direct opt in with an actual email in there. Either one of those I can send it right over to the box and make sure that I give them a ring. Andrew: How often do people pick up the phone when you’re calling them up? Daniel: I suppose it probably just about the same as it was when I ran a martial arts gym. You got to call them during the right times. So the thing about this business of course is not everybody’s East Coast. In the old days of the martial arts academy, when really that’s when I got into all this database stuff because with eight thousand people in a town, you sort of have to make the most of every lead otherwise you’re going to run out of them really fast. So I got into it then, but now India and everything else, normally I’ll call after work times or I’ll call during weekend times or on Friday’s and get a little bit of a better pick up rate. I don’t know if I got a percentage for you. Andrew: Okay. Daniel: But often times when we’re calling, if I’m calling Europe, I’m calling via Skype. And the pickup rates are less with Skype seemingly than with phone. Couldn’t exactly tell you why. But it seems to be the case. Andrew: Sometimes it’s just because the caller ID looks a little funky and so people aren’t sure what’s coming in. Daniel: Yeah. I think that’s it. It’s suspicious. What is this number? So I think that comes across a little bit odd. So when I’m calling France, when I’m calling Ireland, sometimes we’re doing more email, “Hey, I left you a voice mail, Steve. Give me a ring back when you can. Or find me on Skype.” But otherwise it’s… Andrew: This is pretty involved where you have multiple emails. Where you have triggers that will get you to make a phone call. On a simpler level, if someone’s listening to this and says, “I want to simplify my marketing so that if someone comes in and gives me their email address and I do something that hopefully leads to a sale. Where do we get started?” Daniel: What I like to do very early on is make it so that whatever people are getting into early on, whatever they’re opting into or however they’re providing their information to allow you to contact them, that you either right then and there parse them out in terms of what it is that they’re interested in or have whatever they’re opting into already be a parsing. So I’ll give you an example. And this is what I’d recommend for literally anybody starting off with automation even if you’re selling a service. There’s plenty of applications here, but for example, for us I’m going to be doing another program geared entirely around skill development. So it’s basically going to be all my UPenn studies shoved into a Jiu-Jitsu context and we’re going to be launching that. Instead of people just opting with their email address and then sending them a sequence of emails about, “Hey, you can check out this product.” It’s going to be email and then drop down by their major goal. So do they want to be a competitor? Do they want to teach Jiu-Jitsu? Or are they just sort of interested in getting better and improving their skills? Those are three different kinds of people. If you have the same exact kind of email communication there are potentially limitations there. Normally a drop down of three options is not going to slice your opt in rate so severely and harshly that you’re going to see that much of a drop in terms of opt in. In fact sometimes you won’t see a dent in it at all. But you will see a higher open rate when it says, “Competitors, read this.” People open that stuff. It’s geared to them. People want that. So can you parse them out early on with a drop down underneath whatever your email is to figure out who exactly you’re talking to? Or can whatever your page is, for example, if I’m selling Brazilian Jujitsu stuff, some people don’t really care about beating bigger and stronger opponents. I also teach a lot of leg locks. It’s one of the things I’ve done in competition. Some people just care about leg locks. So we’ll have a page that just says, “Hey, we have a four fundamentals of leg locks series that we’ll send you over four days. If you’re interested in that, you can get in on it here.” And then there’s no drop down, no anything, but I pretty much know, “Hey, you get in on that.” It’s not, “Do you like martial arts? Enter email.” It’s pretty darn specific as to what they’re getting into. So where the information is collected, can they be parsed manually? Or just by context can you tell exactly how you have to talk to that person? That’s an important first step. I can go as deep as you’d like me to, but for me I’d recommend that big time early on. Andrew: I could go really deep into this stuff too, but I want to make sure to cover a lot of different topics here and maybe there’s a place for them to follow up with you if they want to go in for more depth. But we asked you in the pre-interview how do we make this a win for you? What do you think would make a good interview? And you told April Dykeman, who pre- interviewed you, “I want people to take actionable takeaways. To have actionable takeaways because of my appearance on Mixergy.” So we just gave them one. The segmentation. The other thing you said you want to talk about it, I’m looking at the notes, how do you stay connected to buyers during the buying cycle? What do you do there? Daniel: Yeah. Again, in terms of just basic and fundamental steps, this is stuff that’s really important. There are a bunch of different models. We actually play around with a bunch of different models in the martial arts business. It’s sort of a little bit of a petri dish now for everything else that I’m doing in terms of advising other folks, or even my own businesses I can kind of go to martial arts and set something up. But one basic framework that we can work with here is understanding where you ultimately want somebody to be. You mentioned a buying cycle. For most folks, there is sort of a place they want that customer to be. If it’s just a software as a service it’s getting on the service early and staying with it forever. Maybe that’s it, although they could do an annual payment for a little bit of a discount, and maybe that would be sort of the big hit for them. For someone who offers tiered services or products, sort of like many of the business concepts we’re messing with right now, then they can start in on an initial automation sequence based on exactly what we know they’re interested in. We can use leg locks for an example. I’ll have 24 emails all about leg locks that are geared around learning different facets of leg locks, understanding the skill development aspects of leg locks, breaking down matches, and also presenting a particular offer and rotating that offer in front of people depending on… I could even vary it depending on how many actual links they’re clicking in terms of how many emails I actually send them. Then, as soon as they get in on that product, what is the next level? Because for me my $27 leg lock product – that’s not really where, ultimately, I want everyone to go. Of course, if that’s as far as they want to go, great. But, I’m always thinking about the $600 external hard drive which is everything we’ve ever made, and people can order that. Andrew: I see. Daniel: What’s the next step towards that? What’s the next step towards that? We have a $97 leg lock program. We have a leg lock program, it’s a little bit more expensive than that, that’s close to $200 which is tons and tons and tons of seminar footage, and breakdowns, and PDFs, skill development type resources, all around that very niched area. When product one is purchased we aim to sort of move them in that direction. If product one isn’t purchased then maybe we’ll bring them back into sort of the normal broadcast circuit that we’re going through with people. I’d love to talk about broadcast circuits because I feel like so many people kind of ignore that. But, I can go back into the broadcast circuit even if they didn’t buy and at least mention that this other product exists, so it’s not like oh, well, we missed with swing number one, I guess they’ll just get the newsletter now. No, no, no. They came in for this. They just didn’t like that one front end. Let’s get another front end up there. So, presenting different front ends at the lower level if that’s where you’re going to start… Andrew: That’s why I’m seeing here side control escape blueprint DVD that’s mailed right to people’s door. All they have to do is pay a buck. That’s at the lower end of the product cycle. Daniel: As low as it gets, as low as it gets. Andrew: Okay. Daniel: Then, from there… Andrew: What is a broadcast circuit? Daniel: A broadcast circuit, this is just a term that I use. Database marketing is sort of the formal term which is essentially determining. Most of the time for startups, at least in my experience, newer business you don’t have a big bucket of past contacts and leads. When I started I had none of that. I had guest blogging and I had the occasional opt in, and I’d high five myself when I got one. The goal was as many leads in the front door as possible. Oftentimes, that’s the fight and that’s the cycle. I had a number of months where we were doing the same amount of rev even though we have twice as many leads as we did four months ago or three months ago or something like that. What’s going on with this? That’s because after the initial string of emails, the initial string of offers, these people just sort of get chucked in the hey we’ll send them a broadcast every now and then bucket. When really, for me, whatever your business is, when somebody initially gets in touch for the most part you have a marketing automation element. That is, how do you get them to the appointment? Or, how do you get them to the product? If it’s not a phone thing, how do you just get them to the product? That could be through all sorts of strings of up and down emails in terms of varying price points and things like that. Eventually, most of the time that will cease, and they will end up in what for most people on AWeber is sort of the newsletter dead end of the road… Andrew: That’s pretty much what they do. Daniel: Yeah, yeah, it’s just sort of then they just sit there… Andrew: So, the broadcast cycle is like the end of the line. Daniel: Well, the broadcast cycle is what do you do with the folks who are no longer getting automated messages. Now, what I don’t like to do is take someone who’s in the middle of a string of 24 emails about leg locks and send them the 3 emails that I’m sending to my general readership for that week. Because they’re wait, I thought I opted in so I could learn about heel hooks. Why are you sending me this thing about news and this guy you interviewed? I don’t care about this guy. For us, I… Andrew: I get that. Daniel: …prefer, generally speaking, with rare exceptions, to allow automation to play its role. Because those emails are calibrated. Those actions are calibrated. Those drives to appointments are very calibrated. Then, once that ends, now we have a huge bucket of folks. Some of which are buyers, some of which aren’t. Some of which have bought in the last three months, some of which haven’t. Some of which have spent $600, some of which have spent $200, some of which have spent $2,000, and some of which have spent $20. Some of which are interested in leg locks, some of which who have made multiple purchases from the shopping carts, some of which only order form. All these different things are rich data which I’d like to be able to use. So the regimen for broadcast is how do you now take the big bucket of folks who are out of the automated circuit, who are out of the ringer, so to speak? But now they’re sitting there. Can you do something other than a newsletter? And the answer is always yes. And there’s multiple ways to experiment with this. But ultimately it’s can we take people who, let’s say, bought at a higher price point in the last 90 days, 60 days, and present our higher price point product to them? I don’t want to take somebody who spends zero dollars and they’ve been with me for four months and put out a 127 dollar product. They’re probably going to be a little bit tentative about that. So I’ll save my lower ticket items for my never buyers. So maybe there’s the never buyers who are interested in escapes. How do I know that? Well, they opted in on a page that was very explicitly about escapes and they’ve bought nothing. I have very little data other than no purchase and they’re into escapes. Now let’s say I have 4,000 of those people, or it probably more realistically three thousand or so with escapes. Escapes is not necessarily our major funnel. In one week I might take two emails sub-targeted to that sub-segment and just send it to them. Now the rest of my list will never know those emails happen, but it’ll communicate explicitly to them. It’ll be saying, “Hey, I know you haven’t gotten…” Go ahead. Andrew: I was just going to say, we’re getting really into the details, is there a place where people can go and followup? I still have a couple more questions… Daniel: Sure, sure, sure. Andrew: …but we’re close to the end. Do you teach this stuff somewhere? Is that the site that I was looking at earlier? Daniel: Yep. So, the main site that I’m working with now when we’re doing coaching, consulting work in this particular space is CLVBoost. So CLV is customer lifetime value, CLVBoost.com is a website that… Andrew: Let me go to that site. I didn’t know that you had this, CLVBoost.com. This is where someone could hire you to do this? Daniel: Yeah, yeah. And that’s where we have… Andrew: And you set it up for them? Daniel: What did you say? Andrew: And you… Daniel: Set it up to strategize. Some people really need the knitty gritty of whether it’s AWeber or Infusion software, whatever CRM that they’re working with, either set up. Some people have it set up sloppily and they’d like to actually apply some strategy and rigor to their current data base. And other people just want to sort of learn strategy. One of the things on CLVBoost is for me, we’re talking actionable. I have a white paper up there now, which is essentially five strategies, really plug and play level stuff about how to make the most of the data base of customers that you already have on. So that’s the place to get in touch. Andrew: How about one more, one last thing. Let me see. Make the most of signups. How to make the most of your subscriber list. Daniel: Yeah. That would rotate into sort of where I was going beforehand. In terms of the front end, making the most of your initial subscriptions, that would be knowing enough about them to communicate with them as targetedly [sp] as possible. And for me often times, so an easy way to plug that in is again create a drop down in terms of your front end opt in. For some companies Crazy Egg or something like that will say number of employees. Now I haven’t actually tuned in to see if they’ve changed their email marketing. I would hope they would, but some people just have that kind of a drop down. Including something like that would be useful. Another thing that I do after, let’s say, six or twelve emails of attempting some kind of particular offer, often I’ll put in another survey and give away something for free just to solicit a little bit more information. Andrew: So that you can further refine your list? Daniel: Further refine. So they might not be a buyer. Okay. They’ve opened emails, but they’re not buying anything. But if we add a survey at email six, email eight, email twelve that says, “Hey, you know, I know you haven’t wanted to get in on the DVD yet. I actually have this course. I’d be way more than happy to give it to you for free. Let me know what your major goal is right now in X.” So for the CLVBoost, the website I just mentioned to you, we have a general email list and I ask folks, “Are you a startup that’s currently funded? Are you a startup idea and you’re in ideation [sp] phase? Or are you someone who’s building a lifestyle or internet business?” So if they haven’t told us yet, we do try to parch that in the beginning. But if they opt in generic, then we’ll communicate, but then eventually we’ll say, “Okay. Let me talk to you a little bit more concisely.” So in terms of making the most of your list on the front and that’s a very, very important facet that’s often neglected. Andrew: Alright. I think we should leave it there. There are so many other questions that we didn’t get into. We didn’t get into books, we didn’t get into, what else was there? Places that you read. You really like Neil Patel at Crazy Egg and KISSmetrics. Daniel: I do. Andrew: Do you like their software? Daniel: I actually haven’t messed around with Crazy Egg, believe it or not. I just read their blog. Andrew: Oh, I see. Daniel: I had told April, if you want to understand optimization, then read the blogs of folks like Sean Ellis at [??] or folks like Neil Patel at Crazy Egg because they can’t eat their own dog food. Andrew: Right. When they talk so openly about these two people who are professionals, they’re going to get called out. Daniel: So I don’t like the default. If I have the option I like the default right to the folks who are not only experts, but they have to be the experts in order to eat food at night. I like reading Neil, I like reading Shawn Elser. Andrew: That’s the way we are, too, when it comes to finding guests to do interviews and to teach courses. They’re are so many people who will say, “Andrew, I just wrote a book on this.” And I don’t want to be a jerk, but I have to look into it and see, “Did you just write a book because you’re writing a book report on the Internet, because you wanted to learn it for yourself.” Daniel: You have to, yeah, for sure. Andrew: Or “Are you doing something that you’ve done yourself.” So we go back and forth and now I have people who help me out, but it’s still back and forth because I want to make sure it’s people who, like you said, they won’t eat unless they do this well. Daniel: Yeah, totally. Andrew: On automaton we had Jermaine Griggs on. He is known for automaton. Daniel: Jermaine Griggs is the champion of champions of automaton. Andrew: The champion of champions. I would say anyone who is a Mixergy Premium member, go do a search for Jermaine Griggs or just type in G-R-I-G- G-S in the Mixergy search box. You are going to see his funnel. He does screen shots. He talks you through the whole process. Daniel: He’s a scientist. Andrew: He’s amazing and I didn’t hear of him except someone in the audience said, “You’ve got to get to know Jermaine.” This is, I think, just as he was starting to get known. Daniel: Yeah. Andrew: Alright. I’ve got more websites here for you than I know what to do with. Daniel: Me too, me too. It’s overwhelming. Andrew: Where do I tell people… It makes sense because when I am on one website, like which one was it? The main website shouldn’t give you… Daniel: ScienceofSkill? Andrew: …ScienceofSkill leads me then to BJJescapes.com where you teach escapes, where it all makes sense. But you’ve got to start somewhere. Where do we tell people to start? Daniel: CLVboost is my website where I mention again plug and play strategies as sort of what I’d like to convey early on. We just did a white paper on this kind of stuff. So CLVboost, if they’re interested in what we just talked about today would be the place to find me there. There is DanFaggela.com, of course. Sounding that one out isn’t always easy, so there’s two G’s, two L’s. So that gets all sorts of complicated. So you probably will have to put a text link in there for people who find my personal website where they can learn a little bit more about all the various stuff that I’m into from jujitsu and everything else. But if automaton is their game and want a resource about that, CLVboost.com. Andrew: Where did you learn how to write? I’m on CLVboost. I like the copy here. I see that you write a lot. Where did you learn how to write persuasively? Daniel: Shucks. Maybe a little bit of Kennedy but also modeling a lot of folks that do it really well. So the Patel’s of the world, the Ryan Dice [sp] of the world, the… Andrew: When you model them, what do you do? You don’t sit and copy them. Daniel: No, not at all. But what I’ll do is I’ll understand what their video sales letter is like. So if they have a video sales letter and there’s a particular script that it follows along with it, they paid a lot of money. Any dead serious funnel that Dice or one of these other folks is striving towards, if they had a professional copywriter or they themselves did it, more likely the former at this point in their careers, but understanding how would that be applied to something that I’m interested in, one of my particular niches. So in terms of catching attention, in terms of conveying bullets or headlines, sub-headlines, modeling has always been fantastic for me. It’s essentially here a template. If I had to do something different with that because I don’t sell anything like what this fellow is selling, how could I apply that same way that that headline really stuck out? How could I take those bullet points that really were catchy and maybe re-write it on the page and turn that into jujitsu context or turn that into automaton context. And that’s how I learned all of my copyrighting, less actually through books and more through the method I just mentioned. Andrew: That’s fantastic. Alright. C-L-V-boost.com. Dan, how do you feel this interview went? I know you wanted a lot out of this. You wanted to get a lot of information out there. I like to come out punching. What do you think? Daniel: Yeah. I like it. I like coming out punching. I feel like we tackled a bunch of stuff. I feel like we got to dive into the numbers of the business even a little bit and get into everything and hopefully got to convey a couple actionable tips. I really hope segmenting on the front end makes sense to folks and especially on the back end in terms of figuring out regular rotation of staying in touch with customers on a monthly or weekly. So I’m happy with it. I think we got some stuff, we got some bases covered. Andrew: Alright. And you’re okay with me giving out your finances to people. Daniel: You got it. Andrew: So what I will do if they ask me for comments I will ask Ari to give it out. We’ll see. Alright. Daniel: Got it. Andrew: Thank you so much for doing this. Thank you all for being a part of it. Bye. Peace.
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