TMBA 548: The First 1,000 Days of Running an Agency
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We often talk about the '1,000 Day Principle' on this podcast.
The idea is that it takes around three years of full-time effort for an entrepreneur to replace the income from their day job.
But what does that principle look like in practice?
Johnathan Solorzano is the founder of Solo Media Group Inc., a remote agency of web developers that are primarily based in Latin America.
Johnathan joins us this week to share the story of his first 1,000 days running an agency, how he has found clients and fostered relationships with them, and where he plans on focusing his energy for the next 1,000 days.
Listen to this week's show and learn:
What kind of clients Solo Media works with and what kind of work they do. (7:56)
When Johnathan realized he wanted to be an entrepreneur. (13:01)
Why Upwork has become one of their primary sales channels. (20:02)
How they have had success building long term client relationships. (29:38)
Why Johnathan believes Shopify might be the next gold rush opportunity. (37:31)
Mentioned in the episode:
Before the Exit - Our New Book
TMBA Masterminds
Partner With Us
The Dynamite Circle
Dynamite Jobs
Dynamite Deals
Tropical MBA on YouTube
Johnathan Solorzano
Solo Media Group
Upwork
Shopify
WooCommerce
ADP
Pat Flynn
Verne Harnish
Enjoyed this podcast? Check out these:
TMBA503: What’s Your ‘Founder Fit’?
TMBA540: Are You Generating Income or Wealth?
TMBA546: Adjusting to the ‘New Normal’
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Have comments about the show?
Do you have ideas for things you'd like Dan and Ian to discuss on future episodes?
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Thanks for listening to our show! We'll be back next Thursday morning 8AM EST.
Cheers,
Dan & Ian
Full Transcript
Dan: Can you describe what white-labeling means?
Johnathan: It means doing all the work and then somebody else passes it off as their own.
Dan: I love that definition (laughs)
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TMBA Ident
Dan: Yeah, buddy, welcome back to the pod. As always I am joined by the Bossman. Are you there, buddy?
Ian: Hey, how's it going?
Dan: What's the situation over there?
Ian: The situation over here is since you left the property, aka the trailer on my property, my kid will not stop asking about you. It's ridiculous at bedtime, ‘Where's Uncle Dan?’, at dinner time, ‘Where’s Uncle Dan?’, ‘I want to kiss Uncle Dan goodnight’. I don’t get this much love.
Dan: I’ve never heard such fantastic news. All my work is paid off and I've earned a spot in his heart. This is all I ever wanted. I don't even feel like I got to do the pod today, Bossman.
Ian: Well, I'll tell you what else you've earned, a visit from us tomorrow to come to your pool. That's what's happening.
Dan: Yet another strategic move I am proud of, looking forward to seeing you guys and looking forward to today's episode. What do you say Bossman, we jump into the deep end? This one was inspired by a recent Dynamite Circle discussion that got lively and the members were talking about, you know, ‘Is it a downside or an upside to present yourself as an agency versus a freelancer when you're trying to get new clients?’ You got any quick thoughts on that one?
Ian: I'm gonna save those for the end. Actually, I just had a conversation with our team about this yesterday, believe it or not, so I'm gonna save that for the end.
Dan: That's a pro podcast move, hat tip, boss, man. So we'll loop around at the end of this one. But suffice to say this conversation was really interesting and in all that nuance of how you're presenting yourself, of course, is an enormous amount of business opportunity. And that's what we're going to talk about today.
Ian, this one stuck with me because you can see the bare bones of this 1000 day journey. The story is very granular, and I caught myself, as I was having this conversation, imagining what it might be like to be in my first 1000 days of my first business or a new business that I'm going to start. And it just really sparked off those creative signals in me, including some clever tactics, like finding that right team or even using platforms like Upwork to find your ideal clients.
Are you excited yet?
Ian: Let's jump into it.
Dan: So Bossman and I will circle back at the end of the episode, and I'll let today's guest introduce himself.
Music
Johnathan: My name is Jonathan Solorzano and I run a team of web developers based out of Latin America.
Dan: What do you mean Latin America?
Johnathan: So, the majority of the team is Latin. A lot of them were Venezuelan and with a lot of the turmoil that's going on over there, they kinda became digital nomads by force. So they live in Chile, they live in Peru, some of them live in Colombia. They all... Well, I guess all of them are from Latin America.
Dan: Is there anything specifically strategic about working with people from Venezuela?
Johnathan: I think they have a lot of motivation. There's a lot of poverty in their country and them getting out and going to different countries it's hard, a lot of countries don't want them there or they're taking jobs from people from Peru, for example, because they're willing to work for a lower wage. So there's this xenophobia in a lot of these Latin countries with Venezuelans. And what I found is giving them the opportunity to work remote, they've been really responsible, they've been really grateful for the job. And they've done a really good job.
Dan: It does. Was this a strategic thing on your part or was it an accident?
Johnathan: I wish it was strategic. I don't think I'm that smart, it was an accident. I started to scratch my own itch. I was trying to do anything to make money. And I was working with Indian developers, Ukrainian developers and there was always this lapse in communication. I would tell them to do something and it'd never be exactly that. And then after my first DCBKK, actually, everyone talked about teams. And I remember I was like, "Man, I don't have a team, I'm just working with freelancers to get things done. Maybe I can build a team." And then I started thinking, "Well, my family migrated from Guatemala, there's got to be some sort of digital talent in Latin America." So I started my search on Upwork, I found guys in Costa Rica and then I found a guy in Colombia. And then that guy in Colombia ended up being my first full-time employee, but he was actually Venezuelan. And he referred me to one person, that person referred me to another and next thing you know, the whole team is Venezuelan.
Dan: How important is your Spanish language skills to working with Venezuelans?
Johnathan: I think that the Spanish is not the number one thing that makes us work well, I think it's the immigrant story really and being able to understand the Spanish culture, how it is in Latin America, that makes me connect with them almost on a level where they trust me. Because I feel like a lot of people that I've seen in our community go to Latin America, there's not a lot of trust maybe because they're like, "gringos" but I think they truly are like, "Oh, this guy is just like us." The actual Spanish doesn't help. I think it's that background.
Dan: How would you comment then on the talent differential?
Johnathan: Man, I think that's a good question. I feel biased, I work with a lot of these agencies that do have their own in-house American developers and I don't see the quality being much different. What the benefit of an American developer is really the understanding, the communication, I think that that's also what I bring to the table and the problem is it's not... I'm trying to figure out how to scale it, is that I'm able to sit down with you, Dan, bring your ideas and then bring it back to the team and say, "Hey, this is what we're executing on." I think that's the benefit of an American developer.
But the code is not... I don't see it as being better, I don't see them doing anything better. I actually think that some of my guys are better than some of the in-house developers we work with, which has brought up some weird stuff internally.
Dan: What weird stuff?
Johnathan: Well, we'll go and fix some stuff for the agency's sites for example and then the in-house developer will be like, "Why did they do that?" And then all of a sudden, it's kind of scary if you imagine you're getting paid $120,000 at an agency and then some white-label agency comes in and they're fixing your code. It's scary, they could take your job essentially. And a lot of those actually developers got furloughed. With the three agencies that bring us the most business, I'd say 60% of their dev team got furloughed, because I think that it's more of a luxury to have, not a need to have.
Dan: Before I ask you a little bit about yourself, can you lay out your company's main value proposition? The sort of work that you do on a daily basis?
Johnathan: Yes. So, Solo Media Inc, I'd say our main value prop is that we are reliable web developers. I'd say we white-label for a lot of agencies.
Dan: Can you describe what white-labeling means?
Johnathan: Yeah, so white-labeling, it means doing all the work and then somebody else passes it off as their own.
Dan: I love that definition (laughs)
Johnathan: We like working with agencies because we don't have that... Maybe you've been guilty of this, where you're looking for a developer and you're just expecting them to get everything done. You're like, "Hey, I want this done." And you haven't really thought through your thoughts and ideas. We won't service those clients. We're not going to sit there and consult and try to figure out what it is you want to do, we want to work with the person that has thought through their ideas, maybe has worked with different developers before or has an internal team and they're like, "Hey, this is what we want done here, step A, B, C." And we can execute to a tee. So generally that's either agencies or companies that are like a DIY. And then they're like, "You know what? We've grown so much, we're no longer a DIY, but we know what it takes to get there. Let's hire this group of developers that can help us execute on that.",
And then the 80/20 really is mostly Shopify and WooCommerce. And I think WooCommerce, we mainly get into the B2B section, where people are like, "Hey, we want different users to have different pricing when they log in," and that kind of stuff. Shopify is more like the B2C custom designs with animations and all these really cool CRO techniques or custom landing pages. It's a conversion rate optimization.
Dan: In terms of white-labeling for agencies, so you've got this agency that sells e-commerce brands on, say marketing and development on their website every month and they're charging them probably five figures or something. And then that agency turns around and comes to you and says, "The development portion, we don't want anything to do with."
Johnathan: Exactly. So, I'll give you an example of an agency we work with in Chicago, they might sell a Shopify store for $150,000. They'll sell them branding, they'll sell them design, they'll sell them marketing. And then they'll say, "Hey, can you guys execute on this design?" But because the expectations of a $150,000 website are really high, when we get the design we have to match it. They call it Pixel Perfect. And then it has to functionally work and the end user, which is the client, has to be able to edit their stuff. So, essentially, we're making these custom themes for clients.
Dan: And I want to get back to maybe some of the details of that, but one final question about that, can you give us a sense for the scope of your agency, whether that's a revenue or a headcount or just a sense for what your business looks like?
Johnathan: Yeah, so I think right now we have 10 people, we divide these 10 people into three groups and these three groups have their specialty, some are better in WooCommerce, some are better in Shopify, and then we have the real pros that do custom web apps. But in terms of revenue, I'd say with Coronavirus it was crazy. We were treading through 15, $20,000 every month and then February right before Coronavirus, I had sold $80,000, the agencies we were working with were operating at a high level. They were asking if like, "Hey, can... Are you going to be able to start taking this kind of volume?" And then Coronavirus hit. So if you look at my QuickBooks, it's 15, 20 and then 80 and then all the way back down to like... I was scared, it went down to 10 and now it's creeping back up 15, 20,000 every month.
Dan: So you said you have an immigrant story. Well, what's the story?
Johnathan: I'm first generation. So, what that means is my family came here from Guatemala, I'm the first person to be born here.
Dan: Where's here?
Johnathan: Yeah. In New York. That's when my family migrated to New York, the United States. And I think that that story in New York is pretty common. I've gone back to Guatemala and see how my family lives and it's like, "Wow." I always feel a level of gratitude for the risk my parents took. As "digital nomads" we travel because we have that luxury. My parents did it because they were really looking for a better opportunity. So, I've never taken that for granted, I've always wanted to make sure that I did my best to make them proud and make their sacrifices worth it.
Dan: So you must have disappointed them by deciding to become an entrepreneur.
Johnathan: Yeah. At first, yeah. For sure. They were definitely scared and they were like, "Oh man, why are you doing that?"
Dan: Well, do you remember your entrepreneurial moment when something clicked for you?
Johnathan: It's funny because I think my dad is an entrepreneur at heart. When you guys talk about those car buying stories and negotiating. My dad used to take me to do that with him and we would go buy cars for fun and then we'd fix them up or do a couple things and then sell them. And I remember that was when we were most excited. Living in New York, these big offices, they'll throw out a $10,000 chair and I'm like, "Dad, bring that home, I can sell it." And we would be so excited about that stuff. And I realized that my dad is an entrepreneur at heart. I just don't think he ever had the luxury that I have because of how he came, he's always like, "I need to make sure we're all safe first."So that's why I thank him for that. But I think that my whole youth, from 11 to 18 was just me and my dad buying stuff and selling it anywhere that we could find it. And that was my first entrepreneurial moment. But I didn't know that was a career until I started listening to podcasts and started seeing other people doing it. I'm like, "Oh, man, maybe I can do this for a living instead of having to have a job."
Dan: What was the first moment that you thought you could actually do it?
Johnathan: I started working at this company ADP.
Dan: Just want to cut in here to say that ADP is Automatic Data Processing, Inc., which is an American provider of human resources management software and services. Now back to the story.
Jonathan: And ADP, it was cool because it's almost like you're an entrepreneur, but with a salary. So what that means is, we were going out building our own book of business, visiting small businesses and trying to sign them up for our services. And when I started meeting these business owners, I was like, "Man, these guys, most of them don't have it together first of all." Second of all, I saw a little bit of me in each of them. And then third, it was like, some of these guys were making serious money. Some of these guys had, for example, landscaping business clearing 20 million a year and they could barely speak English. And I remember I'd go to work and tell everyone like, "Man, I'm going to start a business, this doesn't seem that hard." And everyone's like, "Why would you do that? I remember there's one guy, he manufactured little parts for an airline industry. And that little part built him a huge business with his own warehouse and all this stuff. And I was like, "Man, that's cool, this is what I want to do." It was eye opening for sure.
Dan: So what was your move?
Johnathan: I've always been a computer guy. I've always played online games, I've always known some light coding. So I was like, "Okay, how can I make money online?" I remember listening to that Pat Flynn podcast. And it was a good introduction to SEO websites. And then I was like, "Let me just try and sell a website." And then I sold one of the clients that I was working with at ADP, a website, and I was like, "Oh, this is easy." And then I did it to another one and I was like, "I could just do this, I just need to get some sort of retainer somewhere for 3500 bucks and I'll be set." And I did. It took me about six months. That was my go to. If I could make 3500 bucks a month, I'm good.
Once I sold the retainer like that, I was out. I always kept my expenses low. That goes back to my immigrant background. My father always taught me to never spend more than you make. So I never did. And yeah, it was like that, just selling to the clients that I was talking to an ADP, they really liked me. And I was actually providing a good service for them. They weren't online and from there, I was off to the races.
Dan: Talk to me about what a retainer looks like.
Johnathan: I was trying to sell anything. I think I was trying to sell SEO, I was trying to sell ads, I was going to figure it out once I sold it. The first retainer was an e-commerce store, they were selling luggage. And they were working with this large agency that they were paying $8,000 a month for. And I was like, "Hey look, I don't want to take business from these guys, but I've started doing this work. Look what I did for this client and that client. I'm willing to do it for half." And they were like, "All right, well, let's try a month out, we won't pay you the first month, but if it works out we'll move." And I did it for free for the first month and they're like, "Yeah, perfect. Let's do it." I hired some guys on Upwork to help me with SEO, I hired some guys to help me with their AdWords. And then once I had that set, it was like a plug and play. Once I had those two freelancers help me, I was like, "Okay, we're good to go."
Dan: And this was three years ago?
Johnathan: This was about three and a half years ago. Yep.
Dan: Okay, so you've been through your first 1000 days. What sort of mess ups have you made in those 1000 days? What sort of things would you want to take backs on?
Johnathan: I started with this really broad, try to offer anything online. And I remember there was this one big project, it was an e-commerce project and when I took it, I was excited because it was a lot of money. And I said, "Okay, well, I'm going to put a team together, I'm going to put some Indian developers here, that's where I'm going to make up my money because I'm going to find cheap development. And then I had a friend that worked at an agency that was a designer. So I said, "I'm going to have him help me work on making this website." So bringing him on was expensive, but it was the base of my whole learning on how to properly do a high quality website.
Long story short, this project ended up costing me a lot of money. I lost maybe $15,000 on it. The development was really bad. If I look at it now, it's probably really poorly coded. What I learned from that one, basically built my business today if that makes sense. It took me down this route.
Dan: How much was that project worth by the way?
Johnathan: It was a $40,000 project.
Dan: What other sorts of things have you learned about positioning your agency that has helped you to become more profitable?
Johnathan: I think niching down and finding what's enjoyable. And I think what was really enjoyable for me with the projects was just executing on the idea without having to do all the branding and, “How does this color feel?” I hate that stuff. I just like the idea of, "Okay, this is what we wanted to do, can we do it that way?" somebody else is going to show you what it looks like. So with that being said, I started looking for agencies.Let me take a couple steps back. I think Upwork helped me really solve that. A lot of people hate on Upwork because they think it's cheap work, but that's where I'd say the majority of the business is being built for me. That's where I've made some of my best relationships with these agencies.
Dan: How does it work?
Johnathan: It's a numbers game, right? So I think that you got to talk to 20 people before you find somebody that you want to work with. And I spend a lot of time sending out these proposals. I have a VA that sends out these proposals for me. And then we book calls with people and I speak to them and maybe 5% of the time it's somebody that is an agency that's like, "Hey, we have this troubled project that we outsourced and we need you to fix it." If you fix their problem, all of a sudden, it gets to... Now you build this relationship because they're like, "Oh, this person knows how to solve problems." And then it evolves into, "Let's give them projects or make them our trusted partner."
Dan: So in other words, Upwork, which is a freelancer website, is one of your primary sales channels?
Johnathan: I'd say yeah. I think it's 70% of our sales right now. Relationships eventually come off of Upwork. But some of the best relationships we've met has been on Upwork. Why do I like it? There's two types of people on Upwork. There are people that are not really working through their thoughts, maybe a single person just trying to get a Shopify store up and then there's people like IT directors or project managers or agency owners looking to get good talent to fulfill work. If you worked with freelancers before, you know that sometimes it's unreliable, so they're looking for somebody reliable. And those are the people I want to work with.
I don't want to work with a first timer that's like, "I just want some cheap labor, I want my site up, figure it out and then I'll pay you." That's not my ideal client. It's the person that needs to save their time and doesn't want to have the head bump of freelancers or they already did. They've already hired several freelancers, they're like, "We need to get somebody good to solve this." Basically, where I was when I got that $40,000 project.
Dan: Right. So it sounds like there are some pros and cons because, of course, there must be this temptation for you to go to the end client because you'd make a lot more money, I guess. It seems like on the surface you would.
Johnathan: I actually had... So, there's one of the agencies in Chicago, he has a pretty big agency. I'm pretty sure he's probably a $15 million agency. I went to visit him in Chicago, we went out for some drinks and he was like, "Hey man, how do I know you won't start trying to take clients from on the side?" And I was like, "Hey, look man, if you take care of me, I'll take..." It almost felt like a mob movie. Ever seen Scarface when he goes to meet Sosa. I was like, "Look man, if you take care of me, I'll take care of you. I just want to make sure that you bring the stuff to me and I'll always deliver on you." It really is like that. I think it's based on trust. And I don't want that responsibility of a $100,000 client. It's a big responsibility. These agencies, they get lawsuits commonly and I've helped some of them get out of lawsuits by fixing some of their troubled sites. It's not that I don't think I can handle the responsibility, but that's not the kind of stress I think I want for my life.
Dan: You're not the first person that I've spoken with that has built a sizable agency serving agencies. Because by the time the project gets to you, the impression I get from the outside is that all the rough edges are... A lot of the rough edges are removed and the clarity of the project is more resolute. And so then you can stamp out your work and make your margin.
Johnathan: Exactly. And that's what that person's paying for. He's paying for the agency to work through all that. How do I want it to look? What is it going to feel? That's why those agencies charge $120,000. There's this a lot of communication that goes through with designers and by the time it comes to me, it's like, "Hey, this is what we want, can you execute on it?" And sometimes even they still get it wrong. But at that point, that's their responsibility, they messed up for getting it wrong, you know?
Dan: Johnathan, part of the reason I called you today is because you responded to a thread that was titled, “Are you seeing companies preferring more freelancers over agencies lately?” Are you seeing that trend?
Johnathan: I don't see people looking for freelancers more than agencies. I think people right now just want somebody they can trust. And I think that a lot of people in the digital space, and I get a first hand view of it with Upwork because there're so many people on Upwork, so many scams going on there, people just want somebody they can trust. And that's why I responded with that, where I was like, "Hey look, what that tells me is that that person didn't trust you enough.
Because if you can put trust in somebody and they trust that you'll deliver, it doesn't matter if you're a freelancer or an agency, somebody just wants to be assured that you can deliver on what you're promising them. And that's been my experience on Upwork, on sales calls that I've been on, where I hop on a call and it's like, "Hey look, this is what might happen if you hire a freelancer, you might get a great freelancer, this person might execute a great job. And then you might need him in the future and you won't be able to find him or he'll do a horrible job. And then you're going to come back to me and ask me to fix it for you. And either one for me is fine. So you let me know what works best for you." And I think people appreciate that kind of honesty. I don't think that freelancers are bad, but I know where I was when I was a freelancer, you know?
Dan: What would your business look like if I took the phone away from you?
Johnathan: Yeah, that's the scary part, that's what I'm trying to solve right now. I think that the sales part is what I'm trying to solve in my business. Because I think I'm the bottleneck there where this knowledge of Shopify and what people are looking for, because I have my ear to the pulse of Upwork, I know what people are asking for. I don't know how to transfer that knowledge somewhere else. I'm thinking, maybe I have to do some sales process or write down all this knowledge and see how I can transfer it. But I think that sales would die, but I think it would stay steady, because we do have these agencies that are consistently bringing work. And I have a project manager that works with them. I think it would stay alive but it won't grow.
Dan: It's a case of the cobblers shoes, there's a great Vern Harnish book about growing firms and agencies and he talks a lot about services. He observes that it's often the case that the company will have a hole where the founder's great. So if the founder's a really good salesperson, then the company will often not have a sales element to it because why would they need one? They got this great salesperson.
Johnathan: Yeah. Man you're scaring me that now. I've known that. And I know that to hire a salesperson is not easy. I read all the time nightmare stories of people hiring salespeople. Honestly, I don't even call my... I don't feel like I do sales. I honestly feel like I'm just conversing with people and figuring out what it is that they actually want. And if that person doesn't know what they want, then I can’t help them.
Dan: Well, let's dig into your expertise here, because you said something that sparked my interest, which is, you said, ‘Okay, so a partner shares liability and this is back, I'm quoting some of the thread where you were talking about, some people are basically saying when their prospect knows they're an agency, they get a cold response and they're worried that being an agency, and because people have been burned by agencies in the past, that it's a challenge that they have to overcome in their sales process.
And so you write, "A partner shares liability, promises results and doesn't need to be managed." And you're comparing this partnership angle to a freelancer. So you go on to say, "If you can share that in your sales process and actually mean it, I think you can convert some of those telling you they don't hire agencies. Just my experience, happy to share some stories and scripts." So Johnathan, I called you to share some stories and scripts.
Johnathan: Well, okay, that partner that I mentioned in Chicago. That wasn't built overnight. You don't you don't get to see Sosa overnight. So, I remember the project came in and there was a project manager, and he's like, "Hey, I need this done by tomorrow”. It was very basic WordPress stuff. And I'm like, "Okay, well, what happened here?" And he's like, "Somebody dropped the ball."So I got it done and then he said, "Okay, cool." That project manager gave me another project. He's like, "This one is having trouble in our agency, can you help me solve it?" So I solved it. And that one was a lot more difficult. And I said, "Hey..." The project manager's name was Ben. I said, "Hey Ben, do you mind if you get on a call with your boss? I want to talk to him and I want to tell him that we were able to solve two of his troubled projects." And he's like, "Yeah, for sure. You helped me save my job too." So he conferenced me in on a call with him. And I said, "Hey look, I was able to save two of your troubled projects, why don't you give us more of these? I'm even willing to do some of these for delayed terms”. Meaning you don't have to pay me up front for them. After we solve your issue, you can pay us. And he was like, "Okay, I like that." And so we took a couple of their troubled projects, some of them that they were in current losses for and we fixed them. And that started this relationship where they were no longer looking for freelancers, they wanted to work with us. And I took that experience and applied it to other agencies that reached out to me.
Dan: One of the angles you brought up earlier in the conversation, too is that, it's often the case, I think that agencies have a big price point for the kind of work they want to do and have a sales process around that price point. But it looks like you're coming in from a different angle, which is offering free work, free advice or really affordable problem solving. I guess the question with that is: it's obvious to me how that builds trust, then is it possible to scale up what you can charge them then, without... Or just become the free guy or whatever?
Johnathan: Yeah, that's a good question, I think... So what I see happen a lot, especially in this online space, everyone says, “Charge more”, or “Get the money up front”, or “Get them on retainer”. And I think that when you take that approach, the person on the other side can feel it. Like, "This person just wants to take my money." And sometimes people it's not that they don't want to pay, it's just that they... It's scary to just give your money to somebody, especially through the internet, right?So, why not get on a call like this and show your face? “Maybe you've gotten burned before, or maybe things have been expensive before. What can I do so you'd have trust in me? Do you want me to just give it to you and you pay me at the end? But I need to make sure that you pay me at the end." I've never gotten burned with that. I think that the world is a good place inherently. I think that we just need to practice that. For me, it's like, If they don't pay me, that's really a burn on them, they lost a great partnership, especially when they're looking for work to get done.
Dan: After having been an entrepreneur for three and a half years and given up on your good job, what's your analysis of that choice, looking backwards?
Johnathan: The best thing I've ever done. I was worried for my first two years. I was like, "Man, I'm not... What am I going to do? I'm not making enough money, I'm not making as much as I was before, did I pick the right choice?" You deliver sometimes shoddy product and you're like, "Man, am I an imposter? Am I faking until you ..” You know. But then the third year really started to make sense for me because I found the niche, I found the team, I started to feel a lot more comfortable when I was doing, I got good at what I knew I was good at. And now I'm back to making the money I was making before and I have the freedom that I want. It sounds like one of those gurus, but really it took me three years to feel really happy with where I'm at. There's a lot of ups and downs in those three years, but now I feel stable with where I'm at.
And it's exciting because with the team, the developers, they're a lot smarter than I am. They have ideas, they're always identifying things that we work on with clients and they're like, "Hey, why don't we make a plugin for that? Or why don't we make this for that? Let me make it and then we can just work on that." And it's a lot cooler than just me on Upwork hiring three people to help me fulfill a job. I have a team of people that are looking to make things better.
Dan: That's a cool feeling, you have an asset. You own something.
Johnathan: That's exactly it. People come and go, employees come and go, I don't even call them employees. We're a team. “I'm no different than you guys." But people come and go, but I think these guys, I think they're really truly grateful for being able to... They have the same lifestyle I have, they can live and work from wherever. I have one developer, he goes to Columbia, he lives a digital nomad life and before this, he didn’t. So I don't know. I think like you said, I'm building an asset and I think these guys are here for the long haul. They're entrepreneurs by heart. You know?
Dan: Is that at all problematic by the way, having entrepreneurial people on your team?
Johnathan: I thought about that a lot. So the funny thing about developers and software engineers is, by trade, I think they're able to find faults, right? And a lot of them know that they're not good at sales. A lot of them have tried their own, "Hey, I'll build a website for you. Hey, I'll do this for you." And they realize that there's a lot more than just building an e-commerce store. There's the management, there's the sales, there's collecting the payment.
I always tell them, "Hey look, you guys do the hard part of making sure we deliver the work and I'll do the hard part of making sure that money's always coming in." And I think that they appreciate that. And I also promote them to say, "Hey look, if you guys have any software ideas, if you guys have any business ideas, let me know, I'll invest in it with you. I want to be a part of you guys’ journey." And I think that's exciting for me and for them.
Dan: Totally. So we call this “First 1000 days” on the show, it's very similar to the way you described it, lots of uncertainty and ups and downs and figuring out. It is often the case that in year three and four people, I call it “The Sunrise”. That sort of emotion you're communicating right now. Now, you've entered this area that we're calling the next 1000 days or the middle game, where there's so many more moves on the table now, there's so many more strategies available to you because you do have a stable of clients and you have cash flow and you have an asset and a team. What sort of challenges are you thinking of taking on for these next 1000 days? Which direction do you want to head?
Johnathan: I get scared of having the ‘shiny ball syndrome’ because I know that that's really easy for me to have where it's like, "Let me chase this, let me chase that." But really, my main focus is to make sure that the team is always getting paid and I want to make sure that I'm able to have them be happy.
And I think for the next 1000 days, I want to grow the agency side. I'm working with them to build products. And because we've been doing so much work on Shopify, Upwork is just crazy with Shopify. Just Shopify, for me feels like the next ‘Amazon Gold Rush’. And I want to see where we fit into this Shopify ecosystem, whether it's creating apps, creating themes or some sort of productized service or software for Shopify, that's what we've been brainstorming internally because we're already solving so many issues in Shopify. And with all the demand for Shopify services, that's what I'm focusing the next 1000 days on.
Shopify is buying warehouses to fulfill orders. Shopify has done something that Amazon can't and it has some really nice brands on there. You got big brands like ‘Kylie Cosmetics’ or ‘Kanye West Yeezys’. They have these really big brands that Amazon doesn't touch in terms of, that's not their market. Shopify and Amazon have two completely different markets. And that's why I think that it can compete with Amazon and it's the next big thing.
Dan: Cool. This is the hardest question. It's like a lot of people want to become entrepreneurs or they're struggling with their business. What's your shout out to them?
Johnathan: It sounds cliche, but just do it. Don't be scared of messing up. Because I think that we ponder so much and we try to figure out the best way to optimize this landing page or “How do I figure out my business model?” but you're not going to know any of that until you actually are out there doing it. It's like Jay Z says, "The genius thing about what we did is we just didn't stop."
And I think that that's what I'm learning now in my third year, is that the genius thing is that I just keep going. We just keep learning and you stack these things and you get better and you get better. You're going to sound stupid, you're going to do horrible deliveries on some projects or you're going to build horrible websites or make some bad choices, but you've got to take those experiences and make it so that the one after that is like an advancement right?
And I think that if I would have known that when I started, I wouldn't have felt so bad for the failures that I had. Hindsight is always 2020, but I'll give you an example of a mess up that we just had. We transferred this site from our server to another server. And this client had all the users in there and when we transferred it to their server, an automatic email triggered and it CCed all of their customers and their customers are competitors with one another.
They got their attorneys involved. We were white-labeling this for an agency. So, the agency was like, "Hey, we have to stop work." Their attorneys are getting involved. And the developer that was working on it with me, he was basically about to cry when I called him and I was like, "Look man, it's okay. I bet you that you'll never make this mistake again. We're going to share this with the team and this team will never make that mistake. You're going to be the guy that before we remove a site, you're going to say make sure you check the mail settings so that doesn't get sent out." And it's the truth. I was a little stressed, but It was just one mistake and I think it's ironing itself out.
But those kind of mistakes make sure that you never make that mistake again. It's like being so embarrassed that you're like, "You know what? I'm going to make sure that I fix that." So, yeah. I think that that's what I would tell first time people, you're going to appreciate it later down the road.
Music
Dan: Big shout out to Jonathan Solorzano from Solo Media Group.co, not the.com. What a boss, telling it like it is from his own experience. And Ian, just some reflections before we get .... I know you got a rant coming up for us here.
Ian: I always got a rant. I was just ranting some guy on eBay before I got on the call with you, it’s unbelievable.
Dan: One of the things that struck me about John is - there’s this cool, kind of lingering issue behind every success, which is that founder business fit, like, “Yeah, this business model looks good on paper. But is that a good business model for you?” And one of the things that jumped out after speaking with John is: he didn't come with an agenda to the podcast. I asked him questions and he thought about them deeply and he just shared what he knew. And I know you're not surprised, but maybe the audience would be that that's pretty rare thing when it comes to conversations like this: “Hey, I'm, I'm just here to like legit answer this question from my experience”, and it made me think, “Okay, here's a pretty good sales guy”, right? Like this guy can build trust. He's transparent and, man, this is a guy that I could trust to solve problems for me. And that's, that's something we all can learn from. I mean, that's sales masterclass right there.
Ian: Sales masterclass Dan, and you're right, the audience probably doesn't realise this, but a lot of people come on to the show or they try and get on the show. I'd say producer Jane blocks 95% of these people from getting on the show with an agenda.
Dan: The stiff arm.
Ian: So it’s always nice to hear from a practitioner just sharing what he or she knows.
Dan: Absolutely and one of the things we were talking about before the show is, you know, this original question that was in the Dynamite Circle forum, which is basically, “Hey, am I losing clients and sales here because I'm positioning myself as an agency? Would I be better off positioning myself as an individual?” What do you think about that?
Ian: Well, I kind of liken it to the general contractor. Basically general contractor and construction is the person that communicates with the customer and then also with the team. So you got a house remodel, you contact Dan, the general contractor, and he tacks on 20 to 30% to basically interface with the team and the customer on the project. And that means organising the people, making sure the dumper trucks are there, making sure that the wood is arriving on time, etc, etc.So there's real value in that position. The issue becomes, for some people like me, if you've done some of these home remodelling yourself, you understand kind of what the value prop is. And if you got a little extra time, you might be able to organise these teams yourself. So I think that the primary objective of an agency is to create this layer. Now, like I said, there's some good and some bad to that. If you’ve never organised a project before, there might be a lot of good to it. If you have and then you can see kind of how thin that is for you maybe specifically, there's some bad in it. Now, that being said, I think I think there's many layers of that conversation. I mean, one of the layers is last night, we were actually talking about some of the development work that we need to get done on Dynamite Jobs. And we've actually gone through a couple of agencies trying to get work done and it just hasn't ever panned out for us. And part of the reason I think is because there's too many layers of communication going on. It goes from near you, down to our team and then our team to the agency and then eventually the agency down to the developer, so it's like the game of telephone Dan, I don't know if you remember that when you're a kid: you whisper a message into your friend's ear and by the time it gets around the circle, it's a completely different message. And sometimes with these agencies, that's what can go awry. So actually last night we decided, we actually made a rule, we're not working with any more agencies, we're just looking for one person to help us out.
Dan: It's interesting too. And as an entrepreneur, what do I take away from all this? I mean, for me, it's that your messaging in that regard is enormously important. It really depends who you're talking to. And when and what they're trying to get done. And look, if the pipe just burst in my house, I'm not necessarily looking for a general contractor. I want a plumber who clearly says, ‘Burst Pipe Bob’, I'm coming in for this kind of thing. And a lot of times what happens is, if you have a high cost structure in your agency, you get a little thirsty and you want to sell every client on everything. That's why I love leveraging Upwork as a way to funnel potential clients and to qualify them so that by the time you engage on them, even as an individual, sure, you might be subbing out the work on the back end, which I think is a really cool approach depending on how your ideal client wants to get communicated to, but also, they're really qualified. And by the point you're getting on the phone with them, you know that what you have to offer could potentially be a really good fit for them.
Ian: It’s no surprise, you know, that talented individuals start agencies a lot of times because they figure out that their time doesn't scale, “I'm really good at development. But I can only serve so many clients, here's what I'm going to do is I'm going to hire some other talented developers, and we're going to scale and then I'm going to be the one that communicates with the customer”. My question, though, a lot of times with these agencies is: is the agency good for the person that owns the agency or is it good for the person that needs the work done?
Dan: Yeah. And that's your responsibility as a salesman. So I feel challenged, I'm going to come to you Bossman and say, “Look, you go out and hire one freelance developer, do you really think they're gonna know how to do front end, how to do back end, how they're gonna be able to do mobile? So for the price that you're gonna pay one developer in your office, you can have my whole team at your disposal, and you got the red phone to me”. And that's the pitch. That's what you got to figure out. The cool thing about this is, you're gonna hear people say one perspective or the other. I love how in this interview, John wasn't like tempted into any dogma, or theorising or whatever, he was just basically saying, “Look, this is what's working right now. I'm only on day 1000. I got an enormous amount of challenge ahead of me. And I'm going to take it on, like a boss.” That's it. That's all I got to say. Anything else you want to say?
Ian: That's all I got.
Dan: So Bossman, put on your swimming trunks buddy. Looking forward to seeing you tomorrow. Got a lot of fun things to do. Hope you're all having a great week. A great weekend. We'll be back. as always, next Thursday morning. 8am Eastern Standard Time.
Ian: See you then.TMBA Ident
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