Hacks To Grow Your Business When Sales Drop

(upbeat music)
- Let's give you a hypothetical right here.
If someone's established business,
you make over $100 million a year
in a market like United States,
when you have a bad market,
most likely your numbers are going to start getting hurt.
Your growth is going to slow down,
your numbers are going to start going backwards.
But on the flip side,
if you're in a new market,
let's say you just expand into the United Kingdom
which has a good GDP
and you're at $0 in revenue.
Good market, bad market, it doesn't matter.
You're going to close something, you should be,
so you're going to be better off than where you were before.
(upbeat music)
- I have found that there's
a lot of talk about blitzscaling.
But before you scale,
you have to do unscalable stuff.
Would you agree or you don't agree?
And why or why not?
- Depends on the business.
If I'm trying to start a software company from day one
and it's a me too software company,
I'm creating a CRM
let's say competing with Salesforce and HubSpot
and the list goes on and on, Zoho, SugarCRM,
you may not need to do as much manual stuff
because you're in a older industry that's established,
that already has a lot of the systems and processes built.
So you may not have to worry too much about scalability
because you can get that early on.
On the flip side, if you're doing something new,
a lot of times you're going to have to grind it out
and things aren't as scalable as they should be.
- So when you started,
did you start off with scalability in mind
or did you just start off with wanting to solve a problem?
- When I started off by just thinking about making money
and that was it.
There was no oh, I need to make a scalable,
oh, I need to make it super efficient
and so my market and my profit.
I'm just like how much revenue can I make
and how much of that drops to the bottom line
and goes in my pocket, that was it.
When you're starting off,
for most people it's much more basic.
- In your conversation with Matt Gray,
I noticed you said one of your pet peeves
is people don't make revenue fast enough
and they don't ship fast enough.
They sit in analysis for a long time
and I have to confess I was guilty of this
and I'm still sometimes guilty of it.
How do you bring yourself to get to done
and not get caught up in the whole perfection thing?
- That's a tough one
and I don't know the honest answer for that,
and here's why I'll say that.
So when you're going out there
and just trying to get things done,
you just have to have that mentality
that it's okay not to be perfect
and just ship stuff and get feedback.
But I don't know the real secret or solution.
I think it's more mentality than anything else.
Not putting a rocket into space.
If it falls, there's not that many repercussions.
For a rocket into space,
sure, people could die.
When you're talking about building a software company
and you have no paying customers, who cares?
Just get it out there and get feedback.
What do you have to lose?
And I think that's where people make the mistake
because they overanalyze, they genuinely just overanalyze
and I don't know why,
instead of just trying to get it out there.
Again, no secret, get shit out there, you do okay.
You don't get shit out there,
you don't do as okay, not rocket science.
If it's not perfect, you got it out there,
you adapt, you learn from your mistakes.
If it's great, cool, lucky you
because most people don't experience that right away, right?
It's more of a mental thing
and can you get over it?
- I really like how honest
and open your being in this conversation, so thank you.
Something you also said was one of your biggest mistakes
was not being focused enough when you were younger
and you are more focused now.
In episode 147, I spoke to Noah Cagan about this as well
and he said being able to say no is an important skill.
How do you say no?
And more importantly what things do you say yes to?
What sort of filters do you have
in business when picking projects?
- So I say no to most things
and I only say yes to my main business and that's it.
So I was at dinner one time
and this guy does not remember me,
but I was at a group dinner one time.
There was a guy named Brian Lee there.
Brian Lee created a ShoeDazzle with Kim Kardashian,
LegalZoom, and Honest Company, and a few other companies.
Honest Company is with Jessica Alba.
- That's right.
- Brian taught me something
and I didn't understand it back then,
and I took the advice for granted.
And when I say I took it for granted,
I was like oh, yeah, I learned this great piece of advice,
I'm going to use it,
and I didn't take it from granted
from a mental note standpoint,
but bullshit on me for not using it, right?
I did not use it and I was super arrogant.
I was like oh, I'm good, I know what I'm doing.
But Brian once said
if your company is growing at a nice pace,
just have laser focus and keep doing what you're doing.
The moment your growth slows down,
start looking at other things to do to speed it up.
So NP Digital, all right?
You're based in Australia, right?
- Yep.
- We have a Australia division.
I don't know if you knew that.
We have a NP Digital in Australia as well.
- I do because because I've been running it.
- There you go, and Dan ends up running it
and we have a lot of different divisions.
The economy's bad, I'm not here to tell you we're booming
when a lot of people in marketing are struggling.
I know most of the competitors
and I know a lot of their numbers because they share.
Did you know our international,
when you look at year to date numbers
and you compare them year-over-year,
has grown roughly 74% in this economy?
So what are we doing to create more growth?
We started the year with Australia, okay?
UK, I'm excluding US,
but Australia, UK, Brazil, India, Canada.
US would make it six, okay?
We also had Germany,
but the Germany guy didn't work out
and he didn't want to do really any work.
We both decided to part ways.
Not trying to talk trash,
it was just the reality of it.
He just wants something else in life.
So those are the five regions.
Now we're in roughly May 19th, May 20th,
I know your time zone is May 20th while recording this,
so you got those five regions,
six if you include the United States.
We've already added Italy, Spain, Singapore,
Mexico, Columbia, Malaysia, Hong Kong, Japan.
We're about to add France.
So now you're looking at nine regions
that we've popped up in roughly five months,
and the growth isn't coming from these new nine
that we've popped up.
It's coming from the existing five.
And we're like huh, the revenue really is international
which we knew but we needed to see the data
because it's expensive to spend
all this money to expand overseas.
It costs millions of dollars per region.
Our original projections were a million per region,
but that's not the case sadly, it's much more.
So when you start adding them all in
and by the end of this year
including the United States,
we'll probably be somewhere around 23 to 25 regions.
That will be in countries when I say regions.
We're pushing hard for future growth
and international expansion.
- So what's driving this growth?
How are you having this success
when the rest of the market is shrinking?
- We're not just focusing on the US.
Let's give you a hypothetical right here.
If someone's established business,
you make over $100 million a year
in a market like United States,
when you have a bad market,
most likely your numbers are going to start getting hurt.
Your growth is going to slow down.
Your numbers are going to start going backwards.
But on the flip side,
if you're in a new market,
let's say you just expand to the United Kingdom
which has a good GDP
and you're at $0 in revenue.
Good market, bad market, doesn't matter,
you're going to close something, you should be.
So you're going to be better off than where you were before
and in a good market you'll close more.
In a bad market you'll be close but it'll be slower,
and that's why we're growing still at a decent clip
is because we're adding a ton internationally.
We're not seeing the revenue
from all these international regions yet
because we've been adding so many.
I think not next year,
2025 will be our year.
I'm superstitious, I just knocked on wood but.
- Okay, let's talk about revenue versus profit.
When I put on my CPA or my MBA hat
and I can tell you that if a business is doing 10 million,
100 million, whatever a year,
but if they're spending 11 million
or 111 million to make that revenue,
you're worse off than the guy on the side of the street
in the cardboard box because you're broke.
- In theory, yes, unless your company's valued on revenue
which some are, like a lot of SaaS are,
but the public markets now want profit
and investors now want profit.
Unless you're growing 40, 50% year-over-year,
they're a little flexible.
But if you don't have those growth numbers
which most people don't want profit.
And then the other problem that's changed
is before they were okay with no profit
if you have 40, 50% growth.
But if you keep having 40, 50% growth
and your losses just keep compounding each year
faster than your growth,
there's a problem, right?
- Exactly, that's my point.
- But yeah, I'm a Gujarati
and you're familiar with my kind,
and we were taught at a young age
that a business is someone that makes profit, not revenue.
Revenue is am irrelevant number.
- So let's talk about that.
I want to just drill down to that.
How do you ensure profitability?
Because I am sick and tired of hearing
people talking about revenue numbers.
Revenue is not important and it doesn't impress me.
What impresses me is profit
and I know you are profitable,
but my question is how do you focus
on profitable revenue as it were?
And as importantly, if not more importantly,
how do you ensure cashflow is always healthy?
- Good financial team, they do unit economics
and they make sure everything we do
is profitable and good leadership.
See, my CEOO was the president of iProspect
which is an global agency.
He managed I don't know
how many thousands of people but a lot.
And he worked at a publicly traded company
and one of was one of their best divisions,
so he had to run things based on a quarterly basis.
Now we don't run things on a quarterly basis,
but you got to optimize for revenue and profit
and things like that, so that's important.
The other one to think about for us is in this economy,
our profit is going down drastically.
Not because we can't maintain it and grow it.
It's going down because we're investing
so heavily internationally
and technically that's not considered profit
when you look at accounting rules.
We still have great profit,
but we're taking the cash flow.
We're looking at the profit, we're paying taxes on it,
and then we're reinvesting it
for international growth, right?
Based on our auditors, RSM and BDO,
that's the correct way we need to do it.
So technically we still have great profit.
We have terrible cashflow
because we're taking all the profits
and reinvesting them for international expansion and growth
which is going to make us suffer from an income standpoint
for the next two years which I'm okay with.
- And I've got to say that I doubled revenue
for a few years in a row which was great,
but I was reinvesting all of my profits
back into the business
and that is what I've found.
If you want to drive growth,
you've got to reinvest, would you agree?
- You do, it's painful, but you got it.
I wish that wasn't the case.
I'd be much happier with my pocketbook
if that wasn't the case,
but eh, it's life.
And you know what?
If you love what you're doing
and you believe in it, go for it
and that's what I'm doing.
- And as you say, if you love what you're doing,
you don't work a day in your life
which is the case for me.
I used to hate working in the corporate world as an analyst.
But ever since I started Productive Insights,
I've never been happier.
So I couldn't agree more with that.
You mentioned you've hired good quality financial people.
Tell me a little bit about your approach to hiring
because I think hiring is one of the most important skills
when it comes to building a great company
with a great culture which also your press release said
that one of the reasons you were voted
for the "Inc." workplace thing for the second year in a row
is because you have a good culture.
So talk to us about hiring and culture.
- So I'm not the right person to talk to about culture.
I don't want to bullshit you
and tell you this out of critical good culture.
My co-founder does all that.
Hiring, we use one simple strategy.
We look to see who's worked for multiple of our competitors
because if they work for multiple competitors,
they know your space.
We look for people who stay there for a while
because that means they're loyal
and we look for people who've got promoted
consistently at our competitors.
So if you're hiring someone
for a role that they've done in the past,
and they've worked at your competitors,
and they've continually got it promoted,
that means other people found them valuable.
See, when you interview, people tend to bullshit.
Oh, I did really well
and I dropped this revenue and I'm the best,
and this is why this company was successful.
The truth is usually somewhere in between
what they're saying, what the company says.
And when you hire someone
who's worked at your competition or multiple competitors,
they've gotten continually promoted at both places,
it means other people found them to be valuable.
Those are the people you typically want
because when they say they can do something, usually they can
or else they wouldn't be continually promoted.
That's a strategy to hire.
Hit them up on LinkedIn
and we don't ever say hey, Ash, love what you're doing.
We want to hire you.
We found that doesn't work.
We'll be like hey, Ash, love what you've done in Australia
at this ad agency,
assuming we're hiring you to run an ad agency in Australia.
We're actually looking for someone
just like you who has your skillset.
Do you know anyone who would be a great fit?
And that's it,
and then a lot of times
you, Ash, will be like actually I'm interested,
and that's how we reach out to people.
And if we go directly and say come work for us,
we found that to be too direct
and not work as well.
- That also applies very well to sales, right?
Because when you say to somebody
I have a membership program for example,
I often reach out
and say I'm looking to get other members just like you
because similar to a company,
I think if you want to build a great membership
and I've got some really great members
in my membership program,
you've got to handpick the people
and you've got to build a good culture.
You've got to bring the right members in
because one crappy member can just poison the well.
It's a very nice non-invasive way
to recruit members as it were.
I didn't know you had a co-founder.
I assumed you were the only founder of NP Digital.
- I own majority of the company by far
and I have a co-founder, his name is Mike.
Amazing guy, has done extremely well in operations.
Great background for recruiting and sales
and then funny enough my CEO is also named Mike.
- Okay.