The First Customer - What Risk-Taking Looks Like When You Have a Plan with CEO Shae Feltz

[00:00:27] Jay: Hi everyone. Welcome to The First Customer Podcast. My name's Jay Aigner today. I'm lucky enough to be joined by Shae Feltz from NOTICS. I said it right. IT service provider based out of Minneapolis, Minnesota, Shae. What's up, brother? How are you?

[00:00:44] Shae: Thank you so much for having me, man. This is going to be a good time.

[00:00:47] Jay: Dude, I feel like we both got very nice setups going on right now.

You look like you're like on a promotional video for

[00:00:52] Shae: I want to look good for you, man. when guests see this podcast, they won't need to be like, Oh, wow, he's got some professionals on.

[00:00:57] Jay: yeah, he's got some real folks on. You look great. all right. So, tell me, where did you grow up and did that have any impact on you being an entrepreneur later in life?

[00:01:05] Shae: Yeah. So I'll just give you the kind of the whole 18 below. I was born in Milwaukee, Wisconsin. My parents both went to college there, moved to Brainerd, Minnesota. If the listeners are familiar, it's about two and a half hours north of Minneapolis, St. Paul. So grew up in the Brainerd lakes area, as we call it.

when I was younger, I had a couple odd jobs, worked at a boat dealership, basically picking up blocks in the yard and detailing boats and, had another job washing windows and I learned, pretty early on that. I didn't really want to work for the man the rest of my life. So. when I was around, I just got my car, I was 16 years old.

I started a mobile iPhone repair business. So we just ordered a bunch of screens and went around fixing people's phones from my car, which was pretty fun. And, that taught me like kind of the fundamentals of the three pillars of business, right? You've got Marketing, you got sales and you got fulfillment, and of course, there's ups and downs with the journey across all three of those, but that was sort of the launch pad to get me into it, taking a few steps back.

I did PSEO in high school. Are you familiar with 

[00:02:10] Jay: no, it's a,

[00:02:11] Shae: It's a beautiful program. I think it's in a majority of states, but it stands for post secondary enrollment option. So essentially what it allowed me to do was for my junior and senior year of high school, I took college classes at the local community college.

And I actually, I got my associate's degree before I got my high school diploma, which was pretty cool. it's free college. It's free college. So. Yeah, if anyone's listening and has heard of it or wants to try it out, I would highly recommend it because it's a pretty cool program. So, got my associates, graduated high school, and then I ended up going to Mankato State University, which was a part of like the same college system.

So all the credits I got for my associates degree directly transferred. So that allowed me to get two majors and three minors inside of four years. And about halfway through college is when we founded NOTICS and we got into the whole first customer thing, which I'm sure we'll dive into deeper on this podcast.

But yeah, that's a little bit about me.

[00:03:08] Jay: I love that. I saw on LinkedIn, it said your mobile phone repair business was acquired.

how did that go down?

[00:03:17] Shae: yeah, it was technically acquired, but it was not a million dollar exit or anything like that. We basically just sold our inventory and our client list to another local iPhone repair business.

it sure looks good on LinkedIn, doesn't 

[00:03:29] Jay: it looks great, but I mean, there's some real value there probably, you know, just to you as a business owner of like, you put all this work in, you go to. Sell your client list or your business or whatever. And, you know, you may think it's worth one thing and you're going to get told it's probably worth something else.

so it's just, it's an interesting, you know, early sale of a business is always, I think, good for people. something you said stuck out to me because my 19 year old son wants to be an entrepreneur. Cause of course he sees his dad doing it. So he wants to do it. and at 19, you know, he's telling me he has trouble, you know, I don't want to work for anybody else, blah, blah, blah, blah, blah.

[00:04:05] Shae: Cause he sees me. How did you. Kind of take that feeling of, you know, I don't want to work with anybody else. and like, how did you run with it? Right? Like, what did you kind of go, I mean, did you just come up with mobile phone repair? Like, what was the thought between like, Hey, I don't want to work with somebody else washing windows and, you know, carrying bricks around or whatever sucks. what, you know, how did you kind of make that leap from just that thought of kind of hating working for somebody else into actually executing, you know, a business of your own? Yeah, absolutely. Well, the mobile iPhone repair thing was sort of the closest tangent to something that I Liked doing and that I thought I could make money at so I was always super into technology I love taking things apart. I loved computers. I loved anything with a screen and a keyboard and plugged into a wall So it was a it was very adjacent to the things that I loved and I just kind of immediately fell into that I didn't Looking back now, I don't really think I evaluated a ton of options or went through this whole discovery period.

I was just like, my own phone broke once and I fixed it and that was great. And I saved myself X amount of dollars. The dollars that I saved for myself were dollars that someone else would pay for the exact same service, right? So it was kind of like the light bulb immediately went off and that's what got me into the iPhone repair business.

[00:05:18] Jay: Beautiful. Love that. I'm not gonna let my son watch this episode. He needs to go get a real job for a little bit.

[00:05:25] Shae: Well, hold on. That's such an important point. That's such an important point because you learn, my dad always says, you learn the value of a dollar and feeling what the value of a dollar is when you make it on your own versus when you make it for someone else are two very different things, but also very important to understand them each in their own right.

So it is important, in my opinion, that everybody gets a real job or whatever you want to call it.

[00:05:48] Jay: I totally agree. I mean, I could not agree more. and I think And especially when you're younger, right, like getting that experience of the real world, not being the same thing as in your parents house where things like there's always a safety net, like in real life, there's not that safety net.

And if your ass is not up to be at work on time at the right. And you're not doing what you're supposed to be doing, then they'll let you go. And then you won't have money to do the things you want to do. So yes, I totally agree. I think it's a million life lessons kind of talked into having those early jobs and I'm glad I was fired from all the jobs.

I was when I was younger and you know, I did Things I did good at those places have helped me. So yeah, I couldn't agree more.

so tell me about not Yeah, go ahead 

[00:06:30] Shae: Yeah, I don't mean interrupt, but to your point, that was something so important that you just mentioned. My dad calls it learning on someone else's dime, right? Like you're 16, your bills are paid, right? Like, you don't have to worry about the house over your head. You don't have to worry about three kids.

You got to put food on the table for like, learn when you basically have zero risk. What an amazing opportunity.

[00:06:48] Jay: Yeah, no, I couldn't. That's that, is kind of the same mindset as when you start to do consulting when you've been worked in an industry for a long time and you can start to do that after hours or before work or whatever, like somebody still paying your bills, you know, you're getting yourself done, but you're starting to build kind of this next thing.

[00:07:05] Shae: So I think it's a good lesson to learn. so tell me about NOTICS. You guys came up with that during college. where did it come from? Kind of what was the genesis of NOTICS in general? Yeah. So our first customer, what's it called? A third wall break. When you say the name of the 

[00:07:19] Jay: Yeah, it's 

[00:07:20] Shae: whatever. Yeah. So there's the wall break. so our first customer was actually a previous customer of our iPhone repair business. So, they owned a. A medical spa and an E. N. T.

or a facial plastic surgery practice. They're in the same building and the owner is an incredible guy, but he was really tough on his stuff. And my brother actually dated the daughter of the practice administrator. So there was 2, like, very close ties there. And, family friend, of course, and the practice admin came practice administrator came to us and was like, Hey, you fixed the owner's phone.

So many times we're having some computer issues. Would you mind taking a look at those? And I said, absolutely. I love computers. So, we went in there and did some, like SSD repair, hard drive replacement, repair cables, like really simple stuff like that. And then they came to us with a really large project.

They wanted to do, Complete revamp and order all new hardware and move from what we would call local accounts to a domain. And of course, we didn't know how to do any of that, but we're like, sure, we'll do it for you. And, I think the practice administrator also knew we had absolutely no idea what we were doing.

so she gave us a lot of grace there, but we completed the project and they are still a customer today. And I'm happy to say that we know what we're doing now, but at the time we certainly did not.

[00:08:35] Jay: Yeah. You figured it out. and so what, where did you guys go from there? So you have this first client, you're okay, now we can fake it till we make it to some degree, figure this thing out, we're going to build this thing. was it kind of like off to the races after that? Was it still kind of meandering around?

Like what was the, you got your first customer and then what?

[00:08:53] Shae: Yeah, so a lot of MSPs. I kind of speak for the industry a little bit here. They grow from word of mouth and referrals. Mainly, it's a super trust based relationship. You know, your I. T. provider has access to effectively everything digital inside of your business. So word of mouth and referrals are the best and most common way to grow in the early stages of an MSP.

And I mean, you could say that for any industry, 

[00:09:14] Jay: Sure. Yep. 

[00:09:15] Shae: That nothing's better than a good three way introduction. Right? So we grew for a little bit organically, and then we actually hit a little bit of a wall. And that's a story as old as time in the MSP space, because, we weren't doing any revenue generating activities.

And then we were like, why aren't we generating any more revenue? What a silly conundrum, right? So, yeah, we kind of grew organically for a little bit and then hit a big stall and then ramped up actual revenue generating activities and. Now we're just continuing to grow and build the best IT service provider we can.

[00:09:45] Jay: Well, you know, I'm going to have to ask what were the revenue generating activities that you guys kicked off? and what was the first thing you guys tried? So, I mean, I love the Genesis so far because it is every founder led. Business, it's like all some problem for somebody in my network, we start to kind of gain some momentum from referrals and word of mouth and, you know, just reaching out to friends and family, whatever.

And then it's like, okay, now I have to be a real business. So like, what was your guys first approach? Was it marketing? Was it sales? what did you guys do?

[00:10:17] Shae: Yeah, so our first big channel that we poured a lot of energy into and actually started to yield those results was cold email, believe it or not. and you could say that's marketing. You can say that sales, you can say it's in the middle, but that channel specifically was what we really found our initial success in.

And, for those of you who are unfamiliar, cold email is basically the, there's two sorts of email. In my opinion, you have email marketing, which is where someone subscribes to an email list and then they get enrolled in all these beautiful HTML emails. And then on the other side, you have cold emails, which are one to one personalized sales emails, but sent at scale.

So it's a really great way to basically have what I would consider a private. Advertising network of people that you get their information off of data providers. And then you whip up copy and you segment the list. And then you do all this technical sending stuff with domains and inboxes and sequencers or cold email tools, whatever you want to call them.

And then ultimately you send them an email. But the great thing about it is it's unbelievably cost effective to run these systems and you can do it in very large volumes. So that was our first big successful channel.

[00:11:19] Jay: How long ago was that?

[00:11:22] Shae: Ooh, probably two years ago, a year and a half 

[00:11:26] Jay: Okay. Okay. All right. so it's still kind of fresh. Now, does that, has that specific channel changed much in those two years for you guys? Just the methods or any of the, if you hit any roadblock, I know there's some big changes to like Gmail

and Microsoft, I think in the last year that we've kind of run into a little bit.

I'm just curious, like what's your experience with cold email or at least over the last couple of years?

[00:11:46] Shae: Yeah. I think the open rates, click rates, which are vanity metrics, admittedly, so you shouldn't watch those too closely, but across the industry, those have been declining for a very long time. I think it's still a very successful channel, but the push is always to get more personalized and more relevant, because at the end of the day, you could have the best offer and the best everything, but if it's not relevant to your prospect, they don't give a shit.

So

[00:12:10] Jay: Yep. No,

[00:12:11] Shae: what we push our, put our most amount of focus on.

[00:12:14] Jay: Dead on. yeah, I couldn't agree more and, I love hearing people say, Oh, cold email's dead. I'm like, sweet, more

[00:12:21] Shae: They say that.

[00:12:22] Jay: please, stop then. Because I

[00:12:24] Shae: will continue and I will be fine. People say that about everything though. they'll say cold calling standard paid ads are dead or cold email is dead. And it's like, really, you know, Google's number one source of revenue is their search advertising. And you think that it's dead

[00:12:37] Jay: Right. Yeah.

[00:12:38] Shae: instead of saying.

Paid ads don't work for my business. You need to say, I don't know how to make paid ads work for my business. It's a skill issue. It's a skill deficiency, which is great because you can solve that skill deficiency with training with learning. It just doesn't not work. You 

[00:12:52] Jay: or your 

[00:12:53] Shae: probably doing it incorrectly.

[00:12:54] Jay: consistency is not there. Right. I think that's the biggest one is like any sales channel you can bail on at any point because it's just not working. But like, like you said, originally about email, it's a numbers game. Like you have to send out a ton of emails, you have to send out a ton of outreach, not 90 percent of the people you talk to, number one, it's the wrong time and like, you know, probably number two, it may not be exactly their pain point that you're trying to solve.

So then you're going for 10 percent and then you're going for the 10 percent that it's buying right now that, you know, we're talking to your competitors, like it's very small number. And I think just social media, LinkedIn, et cetera, all the growth pack companies, like. They make it seem like you're doing something wrong.

If you're not hitting, you know, 90% success rate, when in reality, like

90% of the time you're just gonna get ignored. Like your noise to a lot of people, except the people that have the problem in the space that you're going after that like you said, is relevant and your messaging speaks to them in a way that they go, oh wait, these I'll talk to, at least I'll get on a call with these guys.

Right? And that's all you need is just that first little in, to a lot of these companies. So tell me about, what next, like what else have you guys tried other than code email?

[00:14:02] Shae: Yeah. So cold email has been great for quite a while. We're playing a lot with paid ads right now. And, we actually just had a really big meeting about this yesterday, but, we still really haven't figured that out. And, it's a lot more expensive than cold email. So we want to be really careful with the budget that we have to allocate towards paid ads at this point.

But again, with paid ads, all about data in order to get data. In that space, you have to spend money. So it's kind of like a catch 22, right? Like, what do you do? Be really careful or just get the data. So, that's currently what we're, we're playing with a lot right now. And I think the beautiful thing about paid ads is you can get intent from Google search and then you can use remarketing on different platforms and you can do a ton of multi layered, retargeting remarketing approaches with data that you just can't get from cold email.

Cold email is great, right? You can have, you have signals, but how good are the signals, right? But someone clicking on an ad and capturing their information on a pixel and then remarketing to them. And that's, it's a whole different game than I'm still actively learning and it's exciting, but, we definitely are not at the maturity level with paid ads that we are at with cold email.

[00:15:04] Jay: Yeah, I love that. And, I would love to continue that conversation with you, just cause we're kind of doing the same stuff. And I always, I think, I think that sales outbound sales to your point are the way. Most of the time, like you can't compete with budget when you don't have the money or the

time or the expertise, and you're just dumping money.

And like you said, paid ads can get expensive real quick, like real, real quick, you look one day and it's this. And if you don't set the right parameters for ad spend, you're like, Holy shit, we spent, you know, 500 on this. One ad for this week. And like, it wasn't even targeted properly. And like now we're, you know, blown a quarter through our budget for this month and we didn't do anything.

Right. So I think, it's interesting and it definitely works. I'm not saying it doesn't

[00:15:50] Shae: Oh, absolutely.

[00:15:51] Jay: I just think once you've established somewhat of a client base with social proof and with these other things, then you have stuff to lean on when you're doing these paid ad runs. So I love that.

kind of. experiment you guys are doing. so talking about personal brand,

you know, who's Shae, how do you differentiate that from the business? Do you differentiate that from the business? Do you make yourself kind of front and center in public, or do you kind of lead from behind? Like what's your thought on your own personal brand versus the company?

[00:16:20] Shae: Yeah. So that's a really good question. And the first big hire that I ever made was more on the personal brand side, the branding as a whole. And I think that's just because there's really nothing that you can do. With a personal brand that can harm you outside of making bad associations. So just a little bit of context here.

The MSP buying cycle, the IT service provider buying cycle is very long. You're talking like maybe 3 months if you get unbelievably lucky, but typically. Six months to 24 months, leaning heavily towards the longer side of that spectrum. I mean, we're working on a deal right now with the prospect from Minneapolis that we've been working on for three years.

So these are very long sales cycles and having that brand, having that face, having those positive associations, it might not get you leads. But it will absolutely help you nurture all the individual stakeholders inside of a sales cycle. Again, given that you're making positive associations, right? Like, if I like to kick puppies, a lot of people wouldn't want to do business with someone that kicks puppies.

So outside of those bad associations, it's just like, it's like developing a one sided relationship with someone that makes it so much easier to build that level of trust and build that level of. I know what this guy looks like. I know how he speaks. And then when you get on a sales call, whether it's a discovery and audit or however many calls that are in our sales cycle, you have a feeling of comfort.

And that's the big reason we poured so much time and energy into personal branding. I don't think it might not ever lead. Give us an inbound lead. 

the purpose of it for us, but it helps so much through the sales process. That's why we put so much effort into it. Plus, you know, it's good.

It's a good skill to learn. It's good to learn how to be on camera. It's good to learn how to properly, and that's something that I'm actively working on getting 

[00:18:08] Jay: Oh, you're doing great. 

[00:18:09] Shae: just, it really can't harm you in my opinion, having a personal brand can not harm you.

[00:18:14] Jay: I love that. You're doing great, by the way. You're doing

[00:18:17] Shae: Oh, thanks.

[00:18:17] Jay: you're, you've got a great presence. yeah,I think it's still neglected. A lot of the times people don't want to be front and center when they're running a business, but it's like in 2024, man, you better,

You better start figuring out, you better start. Participating in communities and conversations on LinkedIn and like be, I love the positive associations. I think that's great. And just being a voice of like somebody in the middle, that's can contribute to some things in their own space. Like on LinkedIn, if you can talk about, you know, MSP stuff with fellow people that are in comments, other people are going to see that.

And they're just going to continue to reinforce the fact that Shae and NOTICS has affirmed that if we have those problems one day. That you would be the guy to reach out to. So I think sales is that interesting and quite frankly, super fun for me. Cause I'm

not a, I don't have a MBA. It's like, you know, just figuring this shit out as I go. you know, it's been fun to learn the difference between kind of that short, medium and long sales cycle. Cause like you just said, I just had somebody messaged me this morning that we talked to. Two and a half years ago and like, Hey man, we're finally ready. We're ramping up. We got, you know, blah, blah, blah, blah.

We're ready to work with you guys now. So I totally, buy into the notion that your personal brand is really for now and for later. just, you know, kind of how people thank you. All right. If you had to start everything over today, knowing everything, you know, what would be step one to start agnonics over again tomorrow?

[00:19:42] Shae: Is this more of a question of like three, five, a hundred huge mistakes that I made? And if I was to go back and correct them, what would I correct?

[00:19:49] Jay: I don't want to frame it and it's a great counter question. I don't want to frame it as like, what have you done wrong, but more what was, what would you do? What would be your first step? If you said, I have an idea for this business that I'm going to start tomorrow, what would you go out and do?

[00:20:05] Shae: I would a hundred percent start doing revenue generating activities earlier. So what happened with Nautix is we founded, we got a few clients through referrals, through word of mouth. And then there was about this three, four year period where it was just stagnation. And i'm so mad. I'm so frustrated.

Why is this happening? It's of course because we weren't doing any revenue generating activities now that time wasn't lost We effectively spent three to four years building the absolute best product that we could and that's something that i've learned I looked back on that period of time thinking it was wasteful, but it wasn't I mean every single day.

We were literally Communicating with our customer base and building the absolute best product that we could. So we learned a lot in that period, but we did not generate a lot of new revenue or net new revenue in that period. So yeah, moving that line of starting those sales and marketing activities way closer to the start of the business is a huge thing that I would do over.

[00:20:58] Jay: Where

[00:20:59] Shae: who knows? Maybe if I did that, then we wouldn't have this amazing product sell. So, you know, it's always kind of a what would happen, right?

[00:21:05] Jay: Well, I mean, how would you suggest somebody start to learn about those revenue generating activities? Is it a book or books? Is it online stuff? Is it, do they need an MBA? Like if, well,

[00:21:17] Shae: Oh, 

[00:21:18] Jay: if I'm just a guy that like starts a business, like how do I know how to do cold email? How do I know how to do payday?

Like where are some resources that you have used, that other people can kind of look into?

[00:21:29] Shae: Yeah. the beautiful thing about the time that we're in is it literally could not be easier to start a business. You have every single advantage that anybody has had from the start of time until now are all compressed into this day and age. Like, it could not be easier. I'm not saying it's easy. I'm saying it could not be easier to start a business in 2024, especially an online business, but even an in person or a brick and mortar business as well.

The resources that are available to you. In form of YouTube tutorials, books, paid courses, free courses, formal education, if you want to lean that way, but there's just so many resources in mass that are available to an individual. I don't want to say there's no excuse. The only excuse might be someone not.

Actively starting, I think that's the only thing that could hold you back.

[00:22:17] Jay: Yeah, I love that. yeah, you actually said one of my favorite lines. It's like, there's been no easier time in human history to start a business than right now, like every

day 

[00:22:28] Shae: barrier to entry is so low.

[00:22:30] Jay: day is like the next best day, right? It's

[00:22:32] Shae: Right?

[00:22:32] Jay: day there's like more and more like it is, you really just need the motivation.

I think you need like that drive, that killer kind of instinct that like, I'm going to make this happen and I have a good idea and I know what I'm going to deliver.

All 

[00:22:44] Shae: do have one, I do have one actionable takeaway for the audience. If you're struggling with revenue generating activities, you're struggling with not doing, not being where you want to be in terms of capturing new revenue. And this is an exercise that I did that really helped me. At the end of the day, it's very simple.

At the end of the day, I took out a pen and a piece of paper. It could be your phone, it could be your computer, it doesn't matter. But write down the revenue generating activities I did. I wrote cold email copy. I pulled a new list. I watched a video. Things that have the potential to generate revenue, write down on that list.

if you can't bring yourself to write the list or there's nothing to put on it, then you did not learn, you did not do what you had to do. It's very simple.

[00:23:26] Jay: I do. I that is actually I need to start doing that. that's a great idea. I love that. I feel like we could talk all day. I feel like we're going to be good friends

[00:23:34] Shae: Now, what time is it? Yeah, only 

[00:23:36] Jay: a really 25 minutes in, but I think we're I think we're, I think we're good. I have one final question for you and, it's non business related.

This is

non, NOTICS related. It's just you as a human being, if you could do anything on earth and you knew you wouldn't fail, what would it be?

[00:23:58] Shae: I want to say exactly what I'm doing right now.

[00:24:00] Jay: There you go. It's an answer. I've heard that answer.

I've heard go to space. I've heard like, you know, climb Everest. I've heard, fly a fighter jet, but I've also heard be doing what I'm doing right now.

[00:24:11] Shae: yeah, I would just, I would do what I'm doing right now. I think that in life you can get whatever you want, you can have whatever you want, but you can't want. Whatever you want, you can't want it bad enough to actually go out and fucking get it. And that's kind of where I'm at now. Like I will, everything will burn, but I will still accomplish this goal.

I might be 90, but this will get accomplished. It's not a matter of if it's a matter of when. I think that's a lot of a great mindset that some people might be able to adopt. You can have whatever you want, you just can't want whatever you want.

[00:24:47] Jay: Can't want whatever you want. That may be the name of this episode. I think that's a great, that's a great tagline. Well, Shae, you are, just a, a ray of sunshine, my friend. as far as business goes, like I love the story. I love the lessons. if people want to find out more about, NOTICS, how do they do that?

And if they want to get in touch with you. Personally, how do they do that?

[00:25:07] Shae: Yeah, LinkedIn is the best place to contact me personally. I'm actually the person that still runs the account, at least on the messaging side. So, if you send me a message, I will be the one replying to you. On the business side, website's the best place to go. Yeah, those are the two for ya.

[00:25:23] Jay: Love it. All right, Shae. Well, you've been awesome, man. enjoy the rest of your week. We'll catch up again soon. All right. Thanks for being on buddy.

[00:25:29] Shae: Yeah, this was awesome. I've done a few podcasts and this one has been by far 

[00:25:33] Jay: Oh, 

[00:25:33] Shae: so much for having 

[00:25:34] Jay: Come on. Thank you, buddy.

[00:25:36] Shae: No, I'm not buttering you up, man. It's been great.

[00:25:38] Jay: Thank you, brother. I'll talk to you,

[00:25:39] Shae: Awesome. Peace. Thank you. 

​