Ep20 Moving Upmarket Changes Everything

Joe Blackburn  0:00  
There's a lot of self made people in the world. Some people didn't make it themselves. They got it, and they're good stewards of it, and they're successful. That's cool. But some people made it out of nothing. They tend to appreciate the courage of the youth, of people that will actually approach them and take the shot. And they get a sense of almost like, I'm gonna help this person out. I'm gonna give them I'm gonna give him a I'm gonna give him a chance. I I have seen that, and I've experienced that.

Jason Croft  0:27  
Welcome to the lion's edge, where top performers sharpen their teeth, hosted by Joe Blackburn, founder of The Lion who is relentlessly dedicated to helping business owners lead multi million dollar teams and me. Jason Croft, I transform unseen entrepreneurs into industry leaders by developing their market gravity. Each week, we reveal proven strategies and raw insights to help you maximize your business, multiply your wealth and make your family indestructible. Now let's create your edge. Let's see folks on the line, folks watching this show, who have a business. Maybe it's it's the thought experiment aspect of it, to go if I was starting my business over today, what would I do differently? Or I make sure I never did that I'm dealing with right now. And how would I optimize this and then back up from that and go, Okay, well, I don't have to burn it down and start something new. How do I What can I do that I would have done if I was starting over today,

Joe Blackburn  1:42  
one of the trends I see online, and I know how the youtubers so like they look at the top 25 whatever and see what's trending, blah, blah, blah, and then jump on and make a video or whatever. And I hear this one quite a bit, is sell to the rich, like like, it's pretty broad. It's like, solve problems for rich people, they're better. I mean, this is not revolutionary, right? You know, it's, I will tell you this, we have a couple schools that are, I mean, you have to define rich first of all. But we have some schools that are for for for some people that aren't as for far along, have less capital, more upside, so forth, you know, like assassins or things like that. And I will say this, I found myself at the end of the year having some renewal conversations, or some people that have been introduced and, you know, I'm, I'm on a call between Christmas and New Year's with someone who's debating $9,800 in their month. You know, what you have to take away from that is, you have the same call with someone if they're debating $79,000 or $50,000 or an, you know, $120,000 so mechanically for you as a founder or the chief marketeer or someone that has the responsibility of bringing in clients, and we all do, I think the sooner you realize that, the faster you move up market, the better your life becomes because humans are humans. Problem Sets are a little different. But from your standpoint, whatever SOP you build or process, or your ability to get people know like trust and pay you is essentially mechanically the same. So in the beginning, your thought process is, well, I can do this one, because it's easier if you're talking to someone where, let's say $10,000 is a big deal, because it is. It's not like in their head or not real. It's like a big deal. It's harder to get them to commit, to do something because of scarcity, like that's 10 grands, like a lot, whereas, if you can solve a problem for someone where, you know $50,000 $100,000 30,000 I don't you name the dollar amount in your world, that's just part of business, like that's capital allocation, or they have an enormous amount of money, and you can generally solve their problem. Your life's better because they're not as concerned, especially when things aren't going well because it's just proportionately different to their overall capital. It's not rocket science, but if I were starting over, let's say I was ground zero, I would go bigger faster. Let's say confidence is the barrier. I don't know. You know I'm imposter syndrome or whatever bullshit I see out there. It takes, on average, about 30 reps to get confidence in something now that I was online. So I could have, I mean, I could have made that up. We don't know, but let's say you, I mean, it's official. I mean, so it means. It's true and data backed. So those two things truth exactly, and the numbers are there. But the reality is, if you have the solution and you can provide it, then you might and it's mechanically the same. I mean, this goes back to the old ratchet and pillars and ratchet up, the faster you can ratchet up, the better your life becomes. And as smart and as good looking and as talented as I am, I sometimes get wrapped up in just making things happen, and I find myself mechanically doing someone a favor by even talking to them, because that's how good I am. But I'm I catch my like, Okay, wait a minute. This is not where you spend your time. So what you have to get disciplined around is that floor and that where you think your ceiling is, and continually raise your ceiling, raise this. So if I were starting new, I would figure out a way to as fast as humanly possible, get elevated so that my output has more dollars behind it. And I'm dealing with people that actually, you know, every dollar they give me isn't the last dollar they have. So because what happens? And this is probably true of all businesses like you know, we we saw this in one of our luxury industries, one of their key clients had a tough year, like their key client demographic. So I don't know if anyone knows this, but agriculture wasn't what it was two years ago. So so a lot of that money didn't come like we thought they started. Now, the business still did very well, but it's like the key demographic took a hit. Well, if your key demographic is low and that takes a hit, which I think is happening in America, now, you're in real trouble, because average spend then is below your talent level and below what they used to so, like, do you see the that? So I would say, try to figure out ways I don't this, and I hope you don't publish this or whatever you do. How do you what do you do with a podcast you want? Like, what? You put it somewhere. We we mail it to people. You mail this in a we printed out a floppy. Yeah, it is kind of cliche. But the reality is, if, if you want to have a luxury lifestyle, you have to deliver to the people that value some luxury. It may not be oxygen it because, I mean, think of it this way, like if what I do is something people can't live without, let's just say that toilet paper. You know, use that as an example. There's an empire build on it, but I can't tell you the difference between them. I don't know it's that. So when I do something like that, I become commoditized. So I have a different business model at scale. I have to deliver in my margins, blah, blah, blah. But if you're in like, professional services, or you're a HVAC plumber, somebody that has a highly, you know, needed skill that takes money versus just stamping things out, you do want to move up market, because price at some point isn't the major issue. It's probably more convenience get my problem solved. Like I was having a conversation with one of our clients the other day. And they were, we're talking about price increase, because anything, you know, above the line. So if I take a 1% increase in revenue and reduce cost of goods by 1% I move the decimal below the line in net revenue, you know, like that math, so that's a you don't have to have a large jump. But what they were trying to figure out is like, Yeah, but we do all these onesies at this price, and those people need heat, but then price becomes the major factor. So can I do it for a client that wants a heated floor that's different, correct?

Jason Croft  9:07  
You're on target. I think a couple of things again, back where you started with this, people say it a lot, and it's it's true, yes, do this move up market as quickly as possible? Two things there that come to mind. You don't have to make the jump all the way up to, oh, I only work with billionaires. You know, when you the day you start like, but, but make that progression, and then, besides confidence, and that's certainly a piece of it. It's, it's definitely a head game for for, for all of us, right? We're human, so that plays into it, but also focusing on what you charge so much that that's where your brain goes, and that's what distorts your kind of you're so worried about this number. Instead of making your main focus the solution you're providing.

Joe Blackburn  10:05  
Well, I think what you can also look for is, I would describe it as a sweet spot, meaning it's not so far down here that they're they don't have the resources to do what you're offering, and it's not so far over here that they just don't need it, or probably more likely, don't believe they need it because of accomplishment. So it's like baby bear's porridge in the middle. Where can I provide an enormous amount of value to this person who has capital, the will and the desire and feels enough pain to make a change, versus I want to do it I can't, or I don't need anything, because I've made it like that. I call it the sweet spot, so that when I look back over the last five years or so of what we've been doing, I believe I've found a pretty good one where we can provide a tremendous amount of value mechanically. It doesn't, you know, burden us. We're not going in and consulting a fortune 100 company where we need a huge team and data and all those things, but it's more of, you know, at that level of business, it's so founder centric a we've got to get them to be maximized in what their output can be, and then have the will to give up some of the control. Because that's a bit it's, you know, everybody says lack of talent, by the way, because that kind of gets thrown out there a lot. I don't have the right people. I don't have the right people. What I actually find is you haven't given those people the right chance yet find out first. Now you may have somebody, and there's no shortage of people being told this isn't the right place for you and the lion, we have that conversation a lot, but I think it's also you assume they can't or they won't, but they really never had a shot. So that type of, you know, transition from I do everything to, I do some things to I do nothing. Yeah, everybody wants to be here, correct? You'd be bored to death. But let's just say, let's pretend you you want to, like, have the autonomy to do nothing, but really finding that it's kind of that time when, okay, I know I have to give up some things. I want to go up, and I've got enough capital to put into my business, or myself, or my team, whomever it is, that that's where you as the business owner, and you name your business, find that sweet spot where you can plug in, get into your you know, gusher, and really make a difference, whether it's, you know, the jewelry their spouse wears, the Financial Services, the you know, the house, or the new commercial, you name it, look for a sweet spot, because you can, I mean, with the guru advice, you can just keep going up and up and up and up and up. But that's, I mean, that's, if you want to, you might be able to find, I believe what we've done is we found a spot where this is the person we can help the most and do the most. That's kind of so think of it. Who can I help the most, make the most, do the most, that it's a, you know, they're getting what they need. We get what we need. Everybody wins type of thing. So looking around is your sweet spot. And you know, it's, I have a good friend that is transitioning and doing some different things, and he had, he had a a track where he worked for the number one financial service provider in the world, number one. And what was interesting was that organization or team had a target that they did this. And they could have done a bunch of other things, but they this is what we do, meaning we provide this. You want bonds, you go somewhere else. You want hedge funds, you go somewhere else. This is what we do, and that's how they became the biggest and the best. They found their sweet spot and refused to do the other things and outgrew everybody, which is interesting, because the hard thing becomes when you're again, when you're endowed with great ability. The fallacy that I can do it all you probably could. But why don't you find the thing that you really, I mean, I swear, if I say gusher one more time, it's kind of but find that thing, you know, find it like, what can you just do over and over and teach and like, build upon, and it starts with, you got to identify the sweet spot. So you may start down here, trying to go here, and you may find it here, and then you can replicate faster. So I've spent some time trying to figure out again, most, for the most,

Jason Croft  14:52  
and then it becomes, how do I demonstrate that I can provide this? Solution to this target market as quickly as possible and

Joe Blackburn  15:04  
get that out there. Yeah, well, and if you get one, you can replicate there. That's called pillars. So, you know, let's say you had 25 people that you hit home runs with. These people got amazing results. I had a blast doing it. We made an enormous amount of money together. Replicate that?

Jason Croft  15:23  
Yeah, and that's the that's the piece too, to pay attention to. What are those markers that, as you go up market, people look for? Well, as you go up, as we've talked about a million times, it is that word of mouth. Who can I talk to? Who can I see? Oh, they're they're like me. They have a conversation. But also be purposeful with that stuff. Make sure that, make sure you find out, talk about the mechanics that are the same for this client or this one. Dig into the to those mechanics. Dig into what are you actually solving for this person? And get to something that, yes, they really want. But also get specific. Higher up market get more specific. I solve this one thing for you that is the one bottleneck, because that's what we see at the bottom of the market too, is, hey, I've got X amount of dollars fix my business. Well, okay, what do we need? Right? Instead of, instead of, i Everything's flowing. I can't get talent acquisition nailed down. I need help with that. Specifically when you're up market and you provide that value, because that's the unlock that my business needs to to 5x over the next two years, focusing on those things too, as you go up market really helps as well.

Joe Blackburn  16:47  
And when you think of it that way, it's more of, I think it's I want less irritation, like finding a good person, because I have to do it irritates me. Well, think I mean, so I'm finding myself doing the things I shouldn't be doing because I can't find the right people. I can't attract the right talent, or whatever it is is mostly born out of it irritates me to the fact that I have to go do something that, especially if I view myself highly, that is beneath me. I shouldn't have to be doing this. I just can't find the right person to do it. So, yeah, if you can, you know Tyler bloom, I mean, he's building his empire around finding the right people to manage a golf course, or to run the course as a GM, or whatever it is. Well, think of the so if you're, let's put it this way, if you're the person that's been crowned the hiring and get this person placed, you've got all the employees, the board and all the members looking at you, like, where is this person? Like, where? You know, grass doesn't look right. Greens are shitty, whatever. So you want to, yeah, when you can deliver to them, they're willing to pay a premium to get the right person to take the irritation away, which is, I mean, that's kind of the paradigm of life, right? Like, I do hard things so that I can not have to do hard things all the time, like that kind of thing. But, you know, I It's interesting on the pricing aspect, from a consumer standpoint. And I mean, I'm somewhat of a consumer. I don't really care about price. I just don't want to be bothered. So as you go up there, because my decision, because think about the target client, the decisions and things you're dealing with on a day to day basis, when you get little things that have to be done or that need to be done or that you would enjoy, you don't want to have to worry about, like you're trying to alleviate yourself. So if you can provide that alleviation of you know, what's beneath you or irritating, like in the contracting world, one of the and I probably mentioned this, and I totally stole this. I think it was from like, a short on Facebook or YouTube or one of those, where they were telling some of these service providers, raise your price 20% and then guarantee on time, on price, and see what you know like. Because, yeah, the person who has no money that isn't going to play well, but the person that does, you mean you're going to not come back to me and blindside me with a bunch of new material, added costs, and you're going to be out of my house way sooner. So I don't have to come tarp laying over the front door, whatever that right?

Jason Croft  19:39  
And actually, when you said you were going to be you'll be done.

Joe Blackburn  19:42  
So if I price here, let's say this for even numbers, $1,000 and I could charge 1200 for that, and on time, on price, guarantee it. If I don't do the increase, and the guarantee I'm still getting the $1,000 so I know we're. Worse off as the owner than I was when I get gave that guarantee. Plus, this might be interesting, you'll probably your crews at least, or your people. You'll probably do better work and be more cost effective on all those other things. So not only do you get an increase in revenue, you get better it's an interesting little twist, like, I like it, and we've got some clients deploying it, and I have a client that we baited it with, and they had a freaking unbelievable year. Now, it wasn't all due to that, but it played into it.

Jason Croft  20:32  
Good buddy of mine, John logon talks about this aspect of being resourced right charge more money so that you can be resourced to provide that better crew, guarantee those things, and so you're you're really doing that as a honestly, as a service to your end client. If you're fully resourced, then you can actually do what you're promising and do it better than somebody in there charging, you know, 250 in that scenario?

Joe Blackburn  21:06  
Well, you get what you pay for in most cases, right? Like, I mean, you buy gym equipment. What's the saying? Buy nice, don't buy twice. Let's just say we're looking at the next three years, like 36 months. I think we've beat this horse almost to death. Price higher. Go up market. You know your good friend chat GBT, like we were talking about, said, You can't use it for sales leadership and culture. Probably invest in that somehow, because it's hard to commoditize. But I, I do think there is something, and I've seen it. If I can mechanically deliver to a higher demographic, I should, or maybe I must. That's where I'm I'm going with it. And like the old fortune teller said, Everybody's pretty much the same. They've got fears, they've got wants, they've got loss. So whether you have a billion or 100 million or a million, people are pretty much the same. And you know, we had this conversation, it was in our assassins the other day, which is that kind of group that's battling this. There's a lot of self made people in the world. Some people didn't make it themselves. They got it, and they're good stewards of it, and they're successful. That's cool. But some people, you know, made it out of nothing. They tend to my experience has been appreciate the courage of the youth, of people that will actually do and approach them and take the shot, I think they and they get a sense of almost like, I'm gonna help this person out, I'm gonna give them I'm gonna give them a chance. I I have seen that, and I've experienced that. You know, it's funny, I live down here in the Gulf of America, and there's a company I was reading this the other day. Is interesting because I I knew they were, they started in 1985 with $500 and this place was frowned upon to say the least. Like this is a dump, you know, South Alabama or whatever that they have more than $500 now. They're building 30 story, you know, resorts as three good old boys from, I think, Sarah land, Alabama. But my point to that is those types of people, although are your target. They have a clear understanding of what it's like to start here. So again, don't just think I'm not capable. It's not me. Blah, blah, blah, like they tend to have an appreciation. There's a thing in the world called mentoring. It's funny how some of these people just give their time to people, but the only people they give their time to are the ones that have demonstrated the courage to ask and demonstrate the capability of growth. So that sounds very that was a you pull, as usual, first show of the year, you pulled a question out that I was not thinking about, but I my incur. And it doesn't matter if you're doing $5 5 million, 50 million, think, How can I go up? How can I help bigger and see what happens?

Jason Croft  24:34  
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Speaker 1  25:08  
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