Welcome to the Dev Launch Podcast, bringing you insights from industry experts on how to grow the digital agency you love. In this episode, we're joined by Matt Brown, who reveals the secrets of scaling through niching down, leveraging AI, and planning agency exits that maximize value. If you're ready to discover how narrowing your focus can open massive doors, this conversation is your blueprint. Let's dive in.
Well, hey, Matt, thanks so much for hopping on the Dev Launch podcast. I really appreciate it. You're very welcome, man. Thanks for having me. Absolutely. Well, we were just mentioning this before we went live, but you are not from Australia. You are from whereabouts are you from? Born in Cape Town in South Africa. I spent a lot of time in Johannesburg and now I'm out here in the bright lights of Denver, Colorado. So I've been here for two and a half years now. Okay.
And Denver of all places, like I love it out in Colorado. It's beautiful. I'm from Minnesota, so we don't get to see mountains very often. So when I can get to Colorado, it's great. Was there any like connection you had to Colorado or just was like. Pick out a random state and boom, let's go. Yeah, so it depends, right? Because if you Google best places to live in the US enough times, you'll find Colorado keeps coming up in the top 10. And so I got the...
I got a person of extraordinary ability green card and then COVID happened. And so we had like basically three years to do research. And we actually, funnily enough, we actually went to Austin, Texas first. And it was like the height of summer.
and there was mosquitoes everywhere and like you couldn't walk anywhere just dying of heat i was like no i can't see my weekends with the kids and that kind of stuff so i was like let's get on a plane baby and we flew over to Denver and stayed with some friends and it was just kind of like a, wow, it is what Google says.
Yeah, it's gorgeous. I mean, if for nothing else, just the I feel like the quality of life there is pretty good because you got you actually got a pretty solid tech scene. I don't know if that's been your experience being in Denver, but I know a number of people were out there and.
It's pretty cool, pretty popping. And then it's gorgeous outside. Yeah, I do a lot of adventure bike riding in the summer. So I've got a KTM 500. So I spend... as much time as i can riding out in the rockies i was out in wyoming for a three-day ride recently that was gnarly I went out to New Mexico. But yeah, I mean, just the access to the Rockies is quite a thing in the summer and in the winter.
right i mean obviously winter everyone comes snowboarding and skiing and what have you but um yeah certainly from a outdoors perspective it's tough to beat oh totally Totally the case. Well, I just got to let everybody who's listening know, Matt is a great testament to why I fundamentally believe that outbound is not dead.
In fact, Matt, kind of out of the blue, we'd never known each other before. You sent me a message on LinkedIn, a LinkedIn connection request, and you were looking for somebody to potentially have as a guest on the show. And it turned out that person wasn't the right thing. because of the demographic we're trying to serve on the Dev Launch podcast. But as we got to having a conversation, turns out...
Matt's kind of like the perfect person to talk about, you know, agency life. You've got an extensive experience yourself with a background in agency world. So if you take nothing else away, at least start with. Outbound is not dead. It is alive and well, and Matt's a great testament to that. Cool. Well, there you go. So the fact that we're here is proof, right? That's right.
That is right. That's right. Well, Matt, I think when you and I first started chatting on LinkedIn, and I was doing a little bit of a deeper dive into some of the stuff you content you've already created. I was really struck by some of the stuff you're talking about with AI. Now, before people start tuning out and they're like, oh, I don't want to listen to another person talk about AI. I feel like you actually would have a lot of really helpful things to share.
I want to start with maybe some... pitfalls or some things that you, as you've employed AI into your processes, things that people need to be avoiding doing these days? Well, I suppose the first thing is that no one's an expert.
in the space and so while it's advantageous I suppose from a differentiation perspective to say that you are doing things with AI oftentimes it's lip service and so the first thing I would avoid is assuming that you're an expert in anything let alone AI which is a technology that's awesome and is certainly going to exponentially mature over time.
And so when it comes to pitfalls to avoid, just don't think that you're an expert in the thing or believe that anybody is an expert in the thing, especially AI, because there's very few people who really even understand how to apply AI. over and above, you know, what they do on a day-to-day basis with GPT, which is all sorts of things, right? Like find me a recipe about this or, you know, write me a landing page copy for this thing or write an ad or whatever.
And so the use cases are many, but really the opportunity is at a systems level. It's not like a consumer who has a GPT license like my sister does. And she does that. She uses GPT to take emotion out of what she's trying to say. Do you know what I mean? And so there's consumer applications for GPT.
And then there's the systems application for GPT and other types of AI. I mean, everyone, I suppose, is focusing on GPT because it's the most well-known platform out there. But there are many other types of AI.
that people are building on a daily basis and so the space is continually evolving and so the pitfall is one avoid you know believing anybody's an expert in the thing and then I suppose the biggest thing here is about questioning your true value you know and thinking about how can i express my true value in the context of a new world that is powered by by ai
So as an example, we built Matt Brown AI. So if you ask me like, what is my true value? You would go, oh, well, Matt's the host of the Matt Brown show. And I could interview Tony Wilson or any CEO for that matter. And I could give you access to an audience in over 100 countries around the world. But that wouldn't really be my true value. Yes, I could charge you $2,500 or whatever it is.
for 60 minutes interview, you get to promote your staff, but that's not really my true value. So the question then becomes, what is? And what is the role of AI in expressing that new value in the context of scale and influence? And so what we've done is we've trained... the matt brown ai on over 850 interviews i've done with ceos billionaires authors it's like a decade worth of knowledge
And so if I said to you, go ahead and listen to all 850 interviews of the Matt Brown show, would you be interested in that? Probably not because you don't have the time to do that. In fact, no one does. But what if I could give you access to all that knowledge in a fraction of the second, right? so matt brown ai you can actually go to mattbrownshow.com and you can you know get access to me basically and all my books all the transcripts from all the interviews all the uh you know
thought leadership stuff I've done over the last 10 years, all the event content that I've done over the last few years. And the most powerful thing is now I can actually access other markets that don't predominantly speak English. So you could ask Matt Brown AI anything you want about anything like business. Should I have a business plan? How do I scale my company? When should I raise money in Spanish and Chinese?
in French. And so now what I'm able to do is influence millions of entrepreneurs that were previously not accessible. So that's what I mean by about... you know, questioning what is your true value in a new paradigm of AI? And then figuring out what are ways that are scalable that will allow me to influence, in other words, elevate others, not influence the marketing, but elevate others.
in a way that is truly unique to me because how would you compete with that body of knowledge right like it's very very hard and so what it does it removes barriers to access to my work um and so now i'm able to do things in a way that's truly novel and unique well maybe piggybacking off of that because i can i can imagine that the skeptics or the critics who are who are hearing that and they're thinking to themselves that well yeah but like
is trained on even more data than just your show. So like, what would you tell somebody who... you know, especially with the most recent release of like 01, I think it's, or yeah, 01, chat GPT 01. What would you tell to somebody as to why the approach that you're talking about with the Matt Brown AI? is superior to a generally trained chat gpt uh it's not
but it's superior in my own unique way. In other words, the knowledge that I've uniquely been able to capture over the last 10 years, that knowledge is not in GPT that you can, you know, access. ordinarily if that makes sense and so it's not about comparing your body of knowledge to what's accessible anywhere else in the world but it's about giving people a context relevant way to access
the value that you've created over a period of time. At the end of the day it's about being relentlessly relevant. right so if you think about 10 years ago when i started podcasting there weren't 3 million podcasts like they are today they just weren't there was like maybe 200 000 maybe 50 000 i don't know i was like joe rogan there was myself and a few others that were
playing around with whatever this podcasting was. But now you look at the explosion of podcasts that are available and then you ask yourself, well, how do I scale that value, right? Because for every minute you spend interviewing Matt Brown, if you don't provide you know an audience access to this conversation and all those other conversations that you've had before
then it's highly unlikely that that value will ever truly be expressed. Its potential will never really be realized. The same way like English books to Chinese or English-based knowledge to... Spanish or French or whatever. It's the same idea. So I'm not trying to compete with GPT in general but what I am trying to do is compete with every other type of podcast that's playing in my space and giving someone a unique and novel way to access that knowledge capital so that my mission becomes
tangible and accessible and scalable in ways that wasn't possible before, right? That's just the reality of it. It's an interesting take. I guess maybe to distill it down in my own words, something you were talking about is the relevance of the information and the context. I mean, I think that's why we see people talking about prompt engineering. It's like...
At the end of the day, really what prompt engineering is, is it's setting proper context so that we get the most out of the data. But the point you're making is when you train on a very specific body of knowledge, namely your podcast or whatever content.
you've been putting out you are necessarily forcing the context and in theory if the context is really good for that audience um it's going to be way more relevant than maybe just a general inquiry to the chat gpt ether yeah i mean think about it this way it still has the
the standard GPT body of knowledge, but it's got mine on top of that. So if somebody wanted to ask uh the same question you would get a different answer because my uh custom gpt or matt brown ai is able to provide a more context relevant answer so if you go to gpt and you like you say tell me story of failure in business and how a multi-billion dollar company failed massively at launching a new product it might draw from like random references right but the insight and the context of like all
the 150 interviews that I did with CEOs of billion dollar companies about their biggest failures like all that stuff is absolute gold but you'll never find that in a standard version of GPT it'll just it's trained on like you know every possible you know available of knowledge but when you add yours on top of that ai application it provides a completely different engagement yeah that's so good and it's it's probably a good reminder i mean this is something i just discovered recently but
somebody was correcting my understanding of how with ChatGPT is when you build your custom GPTs, you're not really training it. You're just tweaking it or you're tailoring it because the data is there to train them. model. When you go to customize it, you are feeding it just a little bit, like the 0.1% that gets us gets it the rest of the way. And so it sounds like from what you're saying.
the way that you guys have been, had been kind of tweaking this custom GPT is to just feed it some, some better context, which I mean, just like maybe peeling it back one layer down, if you feel comfortable sharing this is. is it just as simple as like i'm going to take my transcripts from the shows and just like you know throw them into the custom gpt or is it more hands-on than that not really it's pretty much text-based i mean it's a text-based platform
So just providing it with text is enough to train it on. I mean, it depends what platform you're using to train or build a GPT or even just a custom AI platform. So if you use something like VoiceFlow, for instance. then you can add in like website URLs, you can upload documentation, you can upload various or different types of content assets over and above text that are third party.
even right so you have a blog with 300 articles you can just feed that blog url and pulls it all through so it depends if you're building a custom gpt for you or whether you're actually trying to use a different type of conversational interface that's got nothing to do with GPT, but that is still trained on knowledge that you've created over a period of time, as an example.
Got it. That's really, really helpful. Okay, so I'm here in a pretty great context for you guys to be using AI currently is around maybe call it curating the content or like just distilling some of the information you guys have gathered so far from all the content. you've created. I see that as a very, very good point of application. I'm curious, are there other kind of low hanging fruit?
AI processes that you're doing day to day? And maybe they're not super sexy, but they're super helpful as of late. There's actually quite a few. So I mean, publishing is one. So like where we... when i read my first book in 2015 it took like 12 to 18 months signed the deal with the publisher and she probably nine months later she was like where's the book
I'm like, shit, I'm going to write this thing. And anyway, it did really well, became a bestseller. We reached a million entrepreneurs to it, but I swore I'd never write another book again. And so I've now written two books since then. In fact, this one.
I'm a great believer in books as a business card, right? So this book, Secrets to Influence, is all about thinking and true thought leadership. However, I don't have 12 to 18 months to write a book and nobody else does. And so that... book, the manuscript took eight hours.
to create or for body of knowledge so you start with content first rip the transcripts but remember this whole conversation is really about strategy right everyone gets lost in the use cases but it's like why so one of those use cases is well AI publishing so that's what we did and so we've done 12 best-selling books for different clients and just the speed and the velocity at using AI
and prompt engineering as you touched on to create a manuscript that doesn't suck that actually sounds like the author that matches the tone has all the details around all the stories and then
It's actually a book that a client can stand behind. You've just bought 12 to 18 months of time for a very busy CEO. What's that worth? So that's one use case. And the strategy there is that it's about... influence right and also about a true thought leadership and nothing positions you as a thought leader more than having a best-selling book so that's like one application but there's so many i mean another one is
cold email. We've got 30 domains, 60 email addresses, and we've used something called Unibox. It's integrated with Instantly. It's integrated with OpenAI, and it just manages all these communications that are coming back from prospects. using direct email. Another one that we've done is we've built for a use case anyway, it's a lead generation use case where we can load up a domain name into a custom AI.
based off a series of prompts that we've created a personalized sales and marketing strategy for that business in a matter of 60 seconds or less. So another one is, you know, people booking meetings, but then they don't actually attend the sales call. So what happens? Well, you have a custom AI agent phone your prospect and have a conversation with that prospect that doesn't suck, doesn't sound like a robot, and that is integrated into your calendar. So it'll be like, hey, you know.
Tony, are you available at 1 p.m. on Thursday? And you're like, no, I can't do it. And how about Friday at 3? I can do Friday at 3. No problem, Tony. I've booked your time with Matt, blah, blah, blah. So there's so many, you know, use cases for... AI that are so much more robust and mature and strategically relevant than just going to GPT as a consumer and going, hey,
how do I replace a brake lever on a KTM 500? Do you see what I'm saying? And so it's looking strategically at, well, what is the right use case for a specific business at a specific stage that solves a real problem?
And so, you know, even if we don't build it, like we don't care. Like if we can find another one, AI creative, right? So how much time and money do agencies or professional service firms or enterprise companies spend creating content right so now there's another one called OmniKey so you can create a brand brief on OmniKey so you upload your color palette your logos all that kind of stuff and you can train
OmniKeys AI on exactly how you want to express your brand and communicate. And then you select your channel, so TikTok, Facebook, Instagram, et cetera, and it will create 24 different ads in a matter of seconds that a designer... You know, it would have taken... three weeks to do. And so what you've done is you've unlocked economies of scale. So your speed to market is there, but also you haven't had to add another resource or pay another resource to basically generate the same outcome.
And then you can edit the creative and so on and so forth. So there's so many use cases out there, but it's about recognizing strategically what do we want to invest in? Like, is this actually worth our time or not? And you touched on a lot of different things.
I think the thing that I'd love to just get your thought leadership on here is again, speaking to the critics. And so the, you know, the critical voice, I think, I mean, it was even on a post that I wrote today is when it comes to AI, there's a. perception that if we all start employing it and we're all able to do it faster, what it does is it just floods the marketplace with even more content.
which means it's going to just be noisier. It's going to be even harder to reach. It's kind of like flooding the market with more US dollars, for example. Just because we print more money doesn't necessarily mean that our purchasing power has improved at all. So what would you say to somebody who... who, because they don't want to add to the content inflation, they're reserved or they're saying, oh, we're not going to take that route. What would be your rebuttal to that?
Well, most people aren't producing enough content at all. You know, like most companies suck at content. They don't even know where to start. I mean, honestly, like some of this stuff, even with our existing clients that we've landed over the last... you know four to eight weeks i mean some of the stuff they were putting out there was like abysmal like creatively really subpar and you know
They could have the best products in the world, but if they can't express that story in a way that actually makes sense or that doesn't look appropriate, then no one's going to pay attention. And so... If you look at, you know, content strategy in general, like people are doing like what one post a day at most. Right. And so because they don't want to upset their followers. That's what they think.
But then if you've got 10,000 followers, I've got 16,000 or whatever on LinkedIn, how many of those people actually see your post on Monday at 9? And then you don't post that post again that you did on Monday at 9 because you're like, oh, you don't want to upset your followers. Like no one cares, dude. Like you actually have to be like, you know, creating. like 10 times the amount of content than what you actually think. If you're doing social ads, you need to be producing 50 social ads a week.
Not a month, not six months, a week. Some guys are producing 100 ads a week. just to make sure that they're getting the highest return possible. So people are massively, like they're worrying about the wrong thing. They're focusing completely on the wrong thing. They're like, oh, content, I can't remember the term you used, like content overwhelm or whatever. it's like well who are you overwhelming who are you overwhelming
Are you overwhelming your competitors? Good. Are you reaching more customers? Good. Like we reach 150,000 people every month just through organic content that I don't have to pay to reach through social ads. What's the ROI of that? Significant. Oh, yeah, totally.
Well, and I think, I mean, what you had just said, I think is helpful to even highlight, at least as of right now, I think with the most recent status, something like only 1% of LinkedIn users are actually posting content regularly. So it's like, I think your point is actually very well taken.
which is we think in our heads oh it's just going to create all this content inflation um but the reality is it's still a very very very under saturated market yeah i mean and also like you just don't know what's going to work if you if you do one video like a day or one post a day how are you supposed to know with any form of real accuracy like what's actually working
Do you know what I mean? Like your sample size is so small. But if you're doing a hundred times that, now you've actually got data. And when you have that data, now you can actually train AI. You can start to do things. Like if you don't have the data, like...
you know you can't do anything like your hands are literally tied so yeah i'm but you know everybody's different um a lot of people don't want to produce any form of content because they have such a huge fear of judgment i mean when i released my uh my uh
my bestseller from a couple of books ago called Secrets of Fail. We were live, just to put this in perspective, we were live streaming interviews and all sorts of stuff on LinkedIn. And eventually I get this message from this guy. I think his name was Chris or Craig or something. And he's like, dude.
like i actually had to like unfollow you because like i keep getting these notifications i'm like where are you getting these notifications like on my smart watch so do you see what i mean and so i care about i don't care about chris right and him getting upset because he doesn't he feels like i'm overwhelming him or my content's inflating his ability to to uh you know to digest what i'm saying i care about the other you know 10 000 people that don't
and that are seeing my stuff. And if you're not visible, you're invisible, right? So I'd rather be visible and hated than invisible and not able to actually commercialize anything. Yeah. Yeah. And I think it goes back to something that I like to talk about, which is it's an uncomfortable reality. But even just thinking about the the engagement of outbound outbound marketing, it's one of those things where it's like a lot of times we don't do it.
And I think a lot more agency owners need to be trying to do it. We don't do it because like you said, there's a fear of judgment. And I think it's definitely holding people back. One thing I want to dive into, maybe switching gears a little bit here is you have a pretty... pretty extensive experience in agency world.
You've not only built it, but you've also exited before before then starting show works. I'd love to hear if you wouldn't mind just like a brief kind of story about the agency that you'd started. Um, and you'd exited, do you build a couple and then exit a couple, or is it just the one that you had built? Two, two, okay. Yeah. We'd love to just hear that story.
yeah man so um so it was probably like seven years ago and we were like a content business weirdly talking about content and we would do like you know content for anyone like it was you know event companies or whatever And then after our first year, we were about eight people at the time, I looked at our client base and 90% of our clients were actually technology businesses, so SaaS firms and so on and so forth.
And so then I said to the team, I'm like, listen, let's just reposition the whole company to go after one uh niche so that was the technology sector so if you were a financial services firm no if you were um you know you know a marketing agency no we only worked with technology brands And we built something called the lightning strike system. And so basically it was an operating model that comprised of inbound.
acquisition so like using producing a lot of content attaching media to that content reaching a lot of other business owners and then once those leads were generated we had an outbound team that worked the phone to actually qualify these leads and then hand them over to the likes of Microsoft, Oracle, SAP, Workday, Nutanix, the biggest distribution companies in the Middle East and Africa. And our operating model was so effective.
cleaned up. We won Africa's Best Tech Startup Award, got invited to London Tech Week, and nothing we could do could not really work. We just literally cleaned up and we scaled. Eventually, It was a services business. And I was like, yeah, yeah, technology. Let's build our own tech. So we built a platform called Tech Lead Bay. We had a sales intelligence platform. We were aggregating different data.
providers into one single source of the truth so you had sales intelligence data and then when that was accelerated with the services firm that understood how to express a story like it was a very um profitable business that scaled really quickly eventually we were 75 people we had a group called black swan technologies and that's kind of where you know the company got to and so then obviously i had to come over to the states
And so that's when I started the exiting process. But it really came down to this operating model. And I think about AI and how would we have used AI? And I'm like, damn.
I could have had a much smaller team, possibly even a bigger business if AI was a thing, but it wasn't. Even today, I think about... you know the resource complement i would need in show works media to do the same thing that we're now using ai to do so like digital kung fu we had like four copywriters just to produce like messaging for like ads and so now that whole problem like people management and performance management all that stuff becomes
far less of a headache. But yeah, we just got lucky. I sold Super Data Ninja to a recruitment firm, weirdly enough, in Australia. But yeah, it was just a case of unbundling and then offloading. Well, and again, lots to unpack there, but something that I wrote down on my paper in front here was your comment about recognizing 90% of the people you were serving were technology companies. And because of that, you chose to really double.
down and define your niche and really go after it to the point where you guys were even turning away. Like if you were financial services, you're not a good fit for what we're offering. And I feel like I know the answer, but I want to just hear it from you. Do you feel like looking back on it, having exited, I would assume at a pretty decent multiple, do you feel like you would have gotten to where you got with your exit had you not niched? No.
Definitely not. It's like zero chance. So what was beautiful about that particular business at that time was that we found a way to unlock... budget like repeatedly so when you understand that you know a particular buyer has a particular budgeting cycle so microsoft and all these big tech brands who doesn't matter who they are they all work on a quarter
planning cycle. So like, I mean, dude, there's so much money there. It's actually frightening. We actually ran out of clients. Like we had relationships with everybody. And so if they were like, well, who do we use? Well, let's use digital Kung Fu. And what was beautiful about that, the distribution companies would give us transparency over how much money they had to spend. Not that they wanted to spend, but that they had to spend every quarter.
And so the way and then you understand the relationships between, you know, vendors, distribution companies and resellers, like it's a pot of gold just sitting at the end of the rainbow. And we came along going, well, you're in customer, you can't. do it yourself. The distribution companies can't do it and the vendors don't care.
They just want to know that for every dollar of budget that they give to the distribution company, that they're going to get at least a 10 to 1. So when we sold anything, it was always about spend to pipeline return.
ten thousand dollars we'd give you two hundred thousand dollars worth of sales ready pipeline in other words pre-vetted businesses ready to buy your microsoft licenses or your azure cloud solutions or whatever it was um and so there's no way dude like i mean another interesting stat like
I actually did. I had a small business loans marketplace also at the time. And so I did research about the impact of COVID on lending in the US. And so it was an SBA report that showed a pyramid. And at the top of the pyramid, it had.
like the top 10% and then it had the others going down. And then they mapped revenue of a company in the US against that distribution on that pyramid. And so the finding was that if you've built a business that generates a million dollars a year right just a million dollars a year you're in the top 10 percent of all businesses that exist in the us that exist think about shocking
Yeah, it's crazy, dude. Amazing. I mean, like, I still can't believe that that's actually true, but it is true. And because we were sitting on a business that was doing like, you know, two and a half, three million dollars a year in Africa. And so we somehow managed to find the right clients with the right problem, with the best operating model, and that allowed us just to consistently generate revenue hand over fist.
was beautiful about this whole arrangement was that we were earning dollars and we were spending a much more um you know let's just say shitty currency. I was going to say modest, but yes, I think that's right. If you're an American, go to South Africa on holiday. You'll live like a king and spend almost nothing. And so that's really what was appealing to...
acquire is in Africa. Man, I mean, I would imagine, and you guys ended up being acquired by an Australian company, right? Yes. Okay. Which, I mean, even still, Australia, you know, it is a strong economy, but it's still not. The Australian dollar still isn't as strong as the US dollar for sure. But that's an interesting point. And I think one thing you had said when talking about niching was you brought it to the value proposition. And this is something that I talk about.
a lot about which is you know part of the reason why niching is so critical is because you identify the value proposition in a repeatable I mean, yours was a great example where you said, you know, you could predict. you know, if they spent 10,000, they would get 200,000 or some, you know, something relatively like that, where you just became like a money printing machine, but you probably wouldn't have been able to identify that or, or get to that.
if you were just like wide open we're just going to serve anybody and do anything yeah there's no way i mean like but you know i think in your first year the right strategy going back to that idea um is that take the money Like work with financial services firms, work with tech businesses, work with, you know, marketing agencies or dev shops or whatever, like take the business. but don't scale it. Like just take it so that you get 10 clients on the board. You deliver, you know.
maybe 15, 20 different solutions. Maybe you get to 20 clients or whatever over a period of a year, right? And so you're making money, your business is alive and you're not out of business. And that's the main thing in your first sort of 12, 24 months. Then look at your clients and say, okay, what industries are they in? What did we sell them? What was our margin? In other words, did we actually make a profit on this client or not? And did it fuck up our team?
Because if our team hates working with a particular type of client, then the idea is, well, let's not work with that type of client again. Because if you keep adding that type of client into your business, guess what your team are going to do? Well, they're going to leave. You're kind of in a rock and a hard place situation. But definitely choose. You have to actually choose. I interviewed Chris Lockett. He wrote the book, Niche Down.
And it's all about how these companies scaled by choosing to niche at some point, right? Because when you niche, you start to define yourself. In other words, like when we, with Digital Kung Fu, when we... we chose technology clients and we were like lead gen for tech brands now suddenly everything became so much clearer like what should we charge how do we charge how do we package up our proposition Who are our competitors?
Right. What are they not doing? And so suddenly everything becomes much, much clearer. Like you need a beachhead to establish your military on in order to actually go and take the war. So the battle is just establishing the beachhead. a niche but you must choose you have to actually choose because if you don't you wind up just starving on indigestion right because you start selling 10 different things when you only need one thing for one type of client and so then you create 10 you know
10 different types of stories around your content. Now you're creating like a hundred different content assets when actually you only need 10. So you stop creating like, you know, a thousand different ads for a thousand different probabilities and you just go after one repeat.
And then also the other thing that happens is that the market starts to see you as the experts in that thing. It's weird, right? It's so funny. I mean, it wasn't that they wouldn't... there weren't other companies right doing lead gen it was just that we were only working with technology businesses and they were like wow these guys must be specialists and so it didn't matter if we were
the ferrari of legion right because we were way more expensive like we we almost didn't find out like our ceiling in terms of what we could charge for the stuff uh but we were specialists we had the credibility the reputation and the trust of decision makers and word spreads right that's another thing people start talking about you know you and your company and the outcome that you created in their circles and so that's what drives referrals right now
your cost of acquisition comes down because you don't have to spend money to acquire these. In fact, we didn't spend a single dollar on advertising in seven years. Not one. All of our business was done on the phone and through referrals. That was it. Well, and arguably the referrals that you get when you have a very clear niche become infinitely better, right? Because like, if I'm not niched.
People who are working with me don't really know exactly where I sit. So they're going to do their best job to try to like say, oh, they're this kind of person. When in reality, you might not actually want to do that type of work. So they refer you all sorts of business. That's just.
Not a good fit. But if you can clearly define that and you're constantly communicating that to the world with how you show up in your content or you're having conversations, it's a lot easier for them to be like, oh yeah, you're the fill in the blank for this type of person. Yeah, exactly right. Exactly right. Something you had said earlier, I want to just pull on that thread and I want you to try to give some examples if you could. You said when you're early on.
Take what you can get, but don't scale it. What do you mean by that? You need to figure out where the gap is in the markets, right? But also, is there a market in the gap? Does it make sense? So people are like, oh, there's a gap in the market. Let's go and build that thing. And then they raise money and then they take it to market and nobody buys it. We've all heard those sob stories, right?
And so the opportunity here is to build something where there's literally a market in the gap that you can earn or a space in the niche that you can earn exclusively. And it takes time. And so rather than bet your entire ship, right, on one idea that you just, I mean. I founded 14 startups over 25 years, dude. Like not one of those startups ever actually wound up solving the problem that I originally intended to solve. Like it doesn't work that way. You have to figure out.
where the gap is in the market. I mean, even with ourselves, like with ShowWorks Media, we were just doing AI publishing and I was like convinced. I was like, oh my God, we've built, we've built the most incredible delivery model ever. It's legit and it is legit.
need to now do is reach you know the right people with this incredible niche focused offer or what or like this gap focused offer and you know it's going to scale right well guess what it didn't scale and it was incredibly hard to convince a very busy ceo to become a best-selling author even if he had the best way of doing it their first reaction is i don't have the time dude
I don't have the time to do it. And you're like, no, no, no, we will do that. But then you've already lost him. So your first point of contact is like the most important thing. So then what happened was we just started landing like through referrals and stuff like other clients coming.
Oh, you guys do AI sort of, you know, powered solutions and stuff. Or, hey, you did this book for me. What else could you do for my business? And so we wind up landing clients that were buying things from us that we weren't positioned to own. Do you see what I'm saying? And so now we're in the space where we're also looking at our clients. What are they buying? What do we need to throw away?
And how can we best optimize a specific proposition, which, by the way, is still called the lightning strike. It's just a different thing. But at the end of the day, you have to survive. Like you have to survive. And you can't just have all your eggs in one basket without having verifiable evidence that you can actually scale your company in that particular thing. Now remember, scale's not for everybody.
Right? Like I literally wrote about that in my first book. Like there's this whole Silicon Valley narrative that you must scale to be successful. I know many sort of, you know, professional services firms that have 10 clients and will never have any more. because they don't need to, but they're making a million dollars a year, right? Top 10%. Fantastic, right? And they don't need the headache of headcount. They don't want the headache.
of you know massive people intensive and capital intensive businesses so at the end of the day it really comes down to you and what does scale mean to you and how much is enough like i genuinely believe if you're making a hundred thousand dollars a month like you're good you don't need like okay fine a million dollars a month would be better but what does that mean
now what does your business look like what does your life look like like i've got two young kids and a wife you know and so i certainly don't want my business or my team you know what i'm saying uh or a business that's generating 10 times the amount of money but has the 10 times the amount of suffering and pain you see what i mean yeah but but those first 12 months dude 24 months just like take the money but then choose you know be for someone define yourself
by saying no not by saying yes so okay it's a little bit of a chicken and egg situation uh and i feel like i have this conversation all the time uh which is i hear what you're saying and i'm on the bandwagon with this too where when it comes to niching it's not as much a science as it is an art, and it really comes down to where you're going to commit.
And you kind of just make a choice, right? It doesn't need to be this, you know, elaborate thing. But there is a point in time where it may be too early to niche. So in your experience, I guess what... Is it like a revenue marker you're looking at? Is it a duration marker? How do you know it's the right time to finally choose that niche and go after it?
When the same avatar in the same industry or the same ICP is buying the same thing repeatedly. It's pretty simple. Like, are you finding the same type of person buying the same thing? repeatedly because then it's just about okay well how do i find or reach more of those avatars right
that same person, but just in different companies. And then figuring out the system that's going to allow you to open up those relationships. So it's like you never rise to the level of your goals. Like I hate revenue. You know what I mean? In the sense of like. It's a success metric. It's like, I'd rather just focus on the pain. Like, is the pain there? You can solve that pain for a big business or a medium-sized business or a small business. But like, does the revenues matter? Right?
No, not really. But it's more like, is the pain there? And can you solve that same thing over and over again? And what's the velocity within which you can solve that thing? without adding ridiculous amounts of headcounts. And so it's not a sprint. I mean, it takes 15 years to become an overnight success. And I think, especially startup founders, they put themselves into so much pressure to hit a revenue number. Does it make sense? When it's just a shitty measure of success.
Do you know what I mean? Oh, totally. Well, and even to your point about the million, you being in the top 10%, like there are businesses that are making a million and the owners are just like having the worst time of their life. Meanwhile, there's other people who have built a very intentional business at a million dollars that.
work very, very little. So I think it's, it's a point well taken, which is, you know, there's a certain degree of efficiency that you want to be, you want to be considering the efficiency of the business, not just the total top line output. But maybe just. Pick to something you had said before. Are we talking like...
If two people are consistently two separate companies and the same avatar are repeatedly coming back to you and buying from you, is that the measure? Are we talking like five? Maybe there's not an exact number. I don't think there is an exact number. I mean, if I go back to Digital Kung Fu, it was just the same person.
you know it was the pdms or partner development managers it's like cool how many of those guys can we talk to you you know and you know and so it's it's less about um i would say like the frequency and the volume so like five per month like there's no it just matters that you can consistently win because if you just be patient
uh you know we it was crazy man like we we were doubling revenues every year for three years like is that enough i think so uh if you know the average if you went to the average business owner he said hey dude if i gave you a system right that you know forced you to niche but that allowed you to double revenues every year from today for the next three years would you be interested in that yeah i think i would be um and so you know i'm saying so it's more just about like
Are you solving the same problem again and again and again? And is there a big enough TAM or total addressable market that you can leverage, right? So I'm a great believer in thinking about the end, like the exit. So you get two types of entrepreneurs. But guys who, you know, they want a business that they'll run for 20, 30 years, like a glass company. Like a friend of mine here just bought a glass company out in Breckenridge. Like the company's been around for 24 years. There's $1.4 million.
and it's a simple business it has four people think about that and so like is that enough right for him probably but now he's exiting at a certain point in time and so i always design my businesses with the exits in mind. So I'm thinking consistently about the story. right so if you're sitting in front of an investor or a number of potential acquirers right because you're shopping now like what's your story
And that story I told you about with Digital Kung Fu was like, they were like just salivating at the mouth because they were like, well, there's zero business, well, very, very few businesses that earn dollars. There's very few businesses that have an operating model that is consistent.
The financial data makes sense, the financial story. So like your revenues are doubling every year, blah, blah. There's a management team in place or whatever. And so you start tick boxing your business because or designing your business.
business with the end in mind because if you get to the end let's just say you know you don't have your financial records in place you don't you haven't paid your tax bill you haven't built a management team you are still doing all the sales in the business like anything like that And it's a red flag to an acquirer. Like I genuinely don't believe that in today's world, especially like an AI-powered world that we are inheriting now, is that the lifespan of a business is like...
50 years like it's not going to happen if you look at like the top listed companies like 98 of those 100 companies like they did they weren't even around like 50 years ago or 25 years ago so if you then think about well am i playing in the same world yeah pretty much match okay so then if you build it to sell it or you design it to sell it then you're far more likely to reach that outcome does it make sense rather than just trying to take all the money that you can possibly get
and serve anyone with anything because if you put that story in front of an investor they're like what yeah or an acquirer you know and so it's just looking back at the end and then saying okay what do i need to do today to make that story so compelling that I can get the highest multiple out of it. Even like IP.
so it's less about the financial evidence but like what ip have you created in an ai like the whole world is like creating ip around this space so if you can find the niche develop ip your financial data is sorted you've got a team that can run it without you
then let's go. And you take the money and you buy another business or you sit on the beach. I don't know. Yeah, I think it's so good. And I love your point about even if you don't want to sell in the next five years, having that as the backdrop or where you're heading eventually, I think it just sets you up for a much better...
a much better spot. I mean, it's part of the reason why we like to start our engagements off with not a full exit planning per se, but something where we're, we're working towards like a five year. If you wanted to sell, this is how we can maximize that exit valuation. Because we're talking about exit, I wanted to dive a little bit further into maybe some of the specifics for your exit.
Maybe the first question would be, if you feel comfortable sharing it, where was it at? If you're looking at multiple of EBITDA, roughly, where were you at with your exit? Depends on the type of business that you're exiting. So with us, that's why I started building technology was for that exact reason. Literally. So we went from big tickets, fixed project fees.
okay but the downside there in terms of valuation is that your business isn't you know what i mean like there's no repeat revenue and so project revenue doesn't earn the same valuation as what like repeat revenue does so if you're a sas company and you're selling 100 a month uh you know licenses or whatever that type of
business is way more valuable. And so again, thinking about the exits, we started to build SaaS products, right? Because then again, the story would be to an investor, well, you know, put it put your name in here and we'll give you your contact information wow that's so crazy so and now they start thinking about well what are the applications
for that type of thing in their own businesses right because many of these guys are in a number of different companies and so you know if you're a services business and you're doing fixed project revenue whatever even retained revenue and you store a professional services firm with zero technology like three maybe three to four if you're lucky but if you start adding technology to it
It doesn't matter how big it is. Even if you productized your service, and that's what we also did. We literally took our SOPs and built that into software. that again makes an acquirer go damn this company's built ip and so now you're getting valued on different types of revenue so fixed income versus like retained income and then you go ip well what's that worth
So now you're worth like a 6x multiple rather than a 3. And so now you're making like 500,000 of profit. Now you've got $3 million in the bank as opposed to one and a half. um and so that's why i say like design the thing you know with the exit in mind so to your point like if you do decide like happens in life you know And you may need just to take the money and run. Sometimes guys fall out of love with their businesses. I mean, I hated that business. Like I seriously hated that business.
I had this massive team. I was like dealing with all these people problems every single day. We had huge infrastructure problems in South Africa. Like there was no electricity and no internet for hours a day. And so my team couldn't work. It was just like stressful. You know what I mean? And I just chased the money. Like it wasn't, I didn't build that business because I was like super passionate about lead gen. You know, I just wanted to win.
And there's nothing wrong with that. But the downside is I wound up building a business I hated. So when I sold the thing, I was like, well, I don't really care. This is like someone else's problem. You know what I mean? So, I mean, maybe on that note, when you went to go to Exit, I guess like...
Looking back on it, were there any things that you wish you would have had done differently, either leading up to the exit or during the exit itself? Started earlier. I would have started the exit process much, much earlier. I remember... We were just like, everything was working, you know, like we had one Africa's best tech startup doubling revenues every year for three years. And I went to go see my mentor and he owns hundreds of businesses.
right um super wealthy guy he's a billionaire and so i sat went to his house i'm like you know hey bud you know how are you going to the you know i've got this opportunity to move to the states and he's like oh yeah i'm like he's like so uh so how can i help i'm like well
what do you think I should do with the business? Do you think I should sell it? Or do you think I should go and try and scale the same thing in the US? So he just, without even a flinch, okay, Tony, he just said, sell it. And I sat there, I was like, I'm not selling. You're out of your mind. You know, we've been dabbling around, like just drinking my own Kool-Aid. You know what I mean? And in my mind, I genuinely thought he was wrong. I genuinely thought he was wrong. And because there was no.
there was no data or evidence to suggest that he was right. But he did say to me, he said, dude, I know guys with more money than you, with bigger businesses than you that went over to the US and got their asses handed to them. So what makes you think you're going to go over there and win? And then I was like, well, let me just think about it, but I'm not selling. And so that I regret because 18 months later, COVID happened.
And then everything changed, right? The whole story changed. And it wasn't necessarily anything that we could have controlled, of course, but the story changed. We had one bad quarter and guess what acquirers do? they try and leverage you like well you're not really worth that anymore or the growth potential like whatever they're trying to do to get you at a sense on the dollar you know um and so if i just like
listened to a guy that actually had more experience than me, that had way more money than me, that had bought and sold companies more than I ever will, right? If I just listened, just listened, And I was humble enough to recognize that, hey, I built an asset. You know what I mean? And let's offload it. Like the story is everything.
And so if I just started like, you know, 18 to 24 months earlier, I would have had a much faster, cleaner exit. Do you know what I mean? And things would have been... very very different you see um and so i don't know like i think you've got to know who you are
right and how much is enough so like you know i was talking to my wife the other day i was like damn dude like i don't want to scale this thing this sounds a bit like uh like digital kung fu again you know and so i don't want to like i don't i genuinely don't want 100 clients like i'd kill myself
But what I do know is that when the time makes sense and the story makes sense, having been down this road before, that I'll pull the trigger on it. Like, do I really need another $10 million exit? Probably not.
it's three million or maybe it's five or maybe it's one and a half like what what could you do with that do you know what i mean um and so you know i don't know i just think you should always be humble enough to recognize that every business has its time to sell and that when things will always change, that you take advantage of your paranoia.
you know what i mean like this space is changing so fast um and the world's changing so so fast and so believing that you're going to scale and build this billion dollar company like you're dreaming man like that's so rare like it's so so rare well especially in professional services or agency space it would be so so difficult to get to that spot nasty So the specifics for your exit, like I know you were acquired then by it was a.
You would probably classify it as like a strategic buyer, right? Because they took what you guys had and they bolted it into their recruiting agency, right? And for that situation, did they like...
try to negotiate like a buyout? Do they have you stay on for a while? Like what did that transition look like for you? Yeah. So I don't do earn outs. So one of the things I've learned is that let's say that the acquirer comes along and offers you a million dollars and then they go but you know like a million cash or whatever but then they say but we want you to stick around for three years because we'll pay you three million if you hit these targets right like
you're basically gambling with your future. And so I'm a great believer in, you know, take the money that's on the table when you sign because anything else that happens after that is all lip service and hot air. Like it's complete gambling.
with your future by the way you've just spent like five six seven eight years building this thing and now you must add another three years for what like to get more money like come on you know it's so ridiculous so take your money on the day that you exit and like tell them to fuck off like this is why you have like a management team that you know
can run the thing without you really being involved like you're driving strategy and stuff like that but yeah I've just heard too many stories like so many stories like agencies in South Africa big ones like hundreds of millions a year and bought by groups in the US.
promised them the world, right? Post exit. Well, you know, we're going to do this, this and that and blah, blah, blah. And then it doesn't happen because they're not incentivized to do it. Like why would an acquirer be incentivized to pay you another $2 million? Think about it. so that you've helped them add more revenue and like i don't know like it's so rare that that ever works out and
By the way, like an acquirer is going to come in and start changing things. So you're like, well, we've always done it this way. So that's why you're buying the thing. And now you want to come in and, you know, you want to put in a new board. Well, we've never had a board before. Yes, but we need to protect our money. I'm like, okay, so who makes decisions now?
so yeah you see what i'm saying and this actually came up in another conversation i was having with a previous guest because they were talking about their exit and and he said essentially uh the way that they negotiated his earn out is he's like i'll take it on one condition I still have control over the decisions for this agency because the point that he made was he's like,
You like you said, you have no incentive to make sure that this thing succeeds, because if it does succeed, you're going to pay out all this extra money. But if I'm the one in control. I'll feel a little bit differently about it. And it ended up working in this favor, but I hear what you're saying. It's like, if possible, don't do earnouts because usually you're going to get the raw end of the deal.
No, but also, you know, you can de-risk that eventuality by designing for it in the first place, right? So if you say, you know, our business has doubled revenues every year for three years and I work four hours a week in the business. Do you really need to be part of the earnouts? No, because the team itself and the systems that you've created in the business itself is what they are buying. They're not buying you. You see what I mean? That's a really good point.
Dude, it goes back to the story, right? Well, our business does, you know, whatever, like $2 million a year. We're sitting at like a 40% net profit. You know, we'll give you three times multiple. So that's 1.2. I work four hours a week in the business. What's more valuable? The guy that's thinking, well, shit, I'm only going to work four hours a week and I get an asset like this. And they have got a system for repeatable growth. You know?
Like, I don't know. It always comes down to the story because then that acquirer is not going to care about keeping me around. And especially if I dig my heels in and say, no, you buy this thing as it is. Here's your team. Work with the team. Goodbye. Otherwise, what's the point in it? Find another acquirer who will actually give you what you want. Yeah, that's a really good point to make. Well, Matt, we've hit our hour now and we haven't even gotten close to all the other questions that I had.
I figured we would have a lot to discuss even with these first two topics, but maybe if you're down for it. We can talk more about things like cold outreach strategies and content consistency versus quality, all the stuff that you have a lot of experience in if you're down for a part two for this. Yeah, man, bring it on. I love talking about this stuff and you ask good questions, you know.
I do a lot of podcasts and yeah, I dig chatting to you, man. You ask the tough questions. They're thoughtful. I appreciate it. And that's what makes you a great host. I appreciate it so much. Well, Matt, before we wrap up, a couple quick questions for you. Number one, do you have any like... I don't know, like free toolkits or maybe even just like a cheap book or something like that you might be promoting right now where our listeners could engage with you?
Yeah, I mean, go to mattbrownshow.com and check out Matt Brown AI. Play around with it. Tell me it sucks. I don't really care. And then the other one is like this book here. It's called Secrets of Influence. It's like $5. I've made it the cheapest you can possibly make it.
on Amazon. So go and get it. I've landed a few clients off that book. People really love it. And it's all about kind of the stuff you were talking about. So like thought leadership systems, media platforms and stuff. So yeah, it's a good resource.
I love it. I love it. And people can go and listen to your, you've got secrets of fail. We didn't get to talk about that today, but hopefully on our next episode we can, but we got the secrets of fail podcast anywhere else. People can go to listen to you or follow your story. Yeah man, just put Matt Brown's show into Google and you'll find everything you could possibly find.
Yeah, do that. Sounds good. Awesome. Well, Matt, I want to say thank you again so much. I think we've learned a lot, not only about specifically like AI and what we can be doing nowadays with content creation even, but also just talking about the specifics with your... your exit. I think that was a very, very insightful. Hopefully our listeners have gotten a lot of value from our conversation today. Perfect, man. Thank you for the time, Tony. Appreciate you.
And thank you to our listeners. If you found value in our episode today, please leave us a review and tell your friends about us. If you're interested in being a guest on our show as a digital agency owner, or maybe somebody with insights that can help digital agencies grow, head over to our website to learn more. at equip.com forward slash podcast guest. That's ACCQIP.com forward slash podcast guest.