This article was originally written by the team at Stand Out Authority for Inc Magazine’s online publication – and is being republished here on CLVboost.com
“I had just sold the gym I started at age 20, and I decided it was time to get serious about building a business around my blog. I didn’t have any formal eCommerce experience but I had a plan to bootstrap our growth.” said Dan Faggella.This is the story of how a savvy and adaptable millennial transformed a website into a coveted self defense-oriented EdTech business. Dan used these two levers to grow a one-man blog, Science of Skill, from a few thousand dollars to over $2 Million in revenue per year in just three years, without raising any venture investment. Over $100,000 per month is the coveted recurring revenue. All this with only two employees plus four part-time contractors. They rented a co-working space for about 11 months. But after continual refining of their process they now operate successfully 100% virtual. Dan lives in the San Francisco Bay Area building an artificial intelligence market research platform call Emerj, while the rest of his team resides 2,500 miles away in Massachusetts and New Hampshire.
Lever #1 = Developing Effective Processes – Making the business “dashboard run-able”During the rapid growth of Science of Skill, Dan was forced to be away from the company during conferences and TEDx speaking. He had to develop a process to see the company’s status from simple dashboards – even when he was unable to work on the business during a long trip. As you might expect there were many bumps along the way. But over time and accepting feedback from team members, Dan developed an effective process. Dan’s goal was to “pulse” (a term used often by Dan’s right-hand man, Timothy Reiss, who runs most of Science of Skill’s marketing). Dan desired meaningful data to gauge the pulse of his business. Then he could get a bird’s-eye view of his business’ health without time sucking meetings. He brought the team together in-person. They asked which four or five metrics were most important to track. Some of Science of Skill’s core dashboard metrics include: daily revenue, bank account inflows and outflows, customer support response time, ROI on external marketing efforts, and ROI on internal promotional efforts. Team members know their priorities through Asana task management software (the coming week’s tasks are delegated each Friday), and their performance on key metrics. This allows team members to act autonomously in the best interest of the company, by shooting for their best “score” in their area of responsibility. Was the customer satisfaction score above 85% to 90%? Was email response time under 12 hours? Did that promotion return at least 40% ROI? A testament to the effectiveness of this process and business model, they’ve achieved a 20-25% profit margin even while growing over 830% over the last three years. An important part of the company’s team rhythm is their Monday morning huddle. They go over their numbers and goals for the week. Once a quarter, they get together in-person to brainstorm ideas for further growth and better efficiency. They consistently iterate to improve their process so the law of compounding keeps working in their favor, and their dashboards become more and more powerful for steering the business.
“My goal is to grow my people and my processes, and make sure our metrics drive toward revenue and profits. This is a living process, and I use ideas from everyone on my team to keep the systems updated and effective,” says Dan.
Interesting InsightDon’t think you need fancy expensive software. Science of Skill’s tracking systems are simple enough for any non-techie to grasp quickly. They use free Google spreadsheets and stats dashboards inside their eCommerce software. They use Skype for video conferencing, the free version of Asana (up to 15 people it’s free) for project management. Keep it simple because simple works. “I could never run my other ventures on the side and have so much time freedom if I couldn’t get my company’s performance in an instant.” says Dan.
Lever #2 = Paid Media for Scalable, Profitable GrowthThrough testing that was sometimes financially painful, they discovered their best buyers. The buyers were male homeowners 50 and over concerned with protecting their families. Many times they had military or law enforcement backgrounds. Dan’s team took the extra step to call customers directly after their purchase. They recorded the data into spreadsheets to see the patterns and develop rich profiles of their best customers. Buyers expressed a strong interest in learning from Marine Corps Scout snipers, top Silicon Valley executive bodyguards and other credible experts. So Dan’s team forged relationships with these experts. They have nearly a dozen they can contract to create courses.
“There are hundreds of advertising partners who are a great match for our customer demographics. Even at $2MM in revenues, we’re at the tip of the iceberg. We diligently test ads with new partners every month – growing a deep ‘bench’ of lead sources is important, and we focus on it every month” says Dan
Interesting InsightTheir first foray into paid media was small… $1,500 spent for a single banner ad in an email. Even today where their ad budget is between $19,000 to $50,000 per month, they still test a new ad partner with only a $3,000 spend. Any business can put a “toe in the water” to test paid media to find sources of consistently high ROI. First understand who your ideal target customer is. Then find channels they pay attention to. Keep a log of what promotions were used on what channels. Then you spot trends and invest more intelligently in client acquisition over time.
ConclusionDon’t let fear or finances hold you back. Do the work. Gather your data. Invest small in calculated risks. Scale from there. Dan grew a hobby blog with zero revenue in its first 10 months to a viable, hyper growing, sustainable business. You can use these same 2 levers. ]]>
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