Zero to $33k MRR Productized Service in 6 months - Lessons Learned
July 15th, 2017 - I send the first email pitching a new LinkedIn outreach service
January 15th, 2018 - Lead Cookie is at $33,168 MRR with 15 full-time team members
It’s been a crazy ride, to say the least, and Lead Cookie is just getting started. But considering that we are hitting the 6 months mark, I thought it would be a good to reflect back on the past 6 months and the lessons learned.
This article is a list and summary of all of the lessons and tips I have picked up and learned over the past 6 months which I attribute Lead Cookie’s success to. It has helped us become a top Linkedin prospecting service.
My hopes are it will help you on your journey.
How Lead Cookie started
In early 2017, I was feeling discontent with my consulting. I was doing well, making a good income, and helping people. BUT… I realized that the whole idea of selling group coaching programs and video courses wasn’t for me.
I knew that I was capable of something more.
I knew that I had the ability in me to run a “real” business again.
It was through self-awareness that I came to this realization. I had a conversation with my wife and we decided “This isn’t right for me. I’m ready to try something bigger again.”
She agreed and I set off to start brainstorming new business concepts.
Over the next two weeks, I brainstormed and researched. I didn’t dive in right away because I wanted to calculate my next move and think it through.
BUT I also didn’t wait forever. Two weeks was enough time to get me the information I needed.
One of the ideas on my list was “Linkedin Marketing Company”… I had seen success on Linkedin before and gotten clients there but I wasn’t focusing on it. I saw the potential there and realized there were only a handful of other services operating in this space.
So here is what I did…
I went out and I researched every thought leader who was speaking or writing about Linkedin. I read their blog posts and consumed their content to learn what the best tactics were. Then I started implementing and testing those tactics out for my own consulting practice.
Within two weeks, I was booking quite a few calls and saw significant engagement with this Linkedin outreach.
AND I saw that this tactic was simple, repeatable and was something that I could train others to do.
At that point, I threw up a terrible landing page under the company name “Linkedin Panda”. (Huge trademark infringement there!) Then I started reaching out to people in my existing network.
Within one week I had sold $5k MRR! (I was freaking out!)
Test fast and sell to your existing network
One lesson to pull from the story above is that I dreamed this up, tested it fast and then sold it to my existing network.
I did not ponder on this or think about it for ages. I put up a simple website and sold it to people who I already knew.
I didn’t even launch this company publicly until 3 months after we sold our first customer. We spent that time in beta refining our service, building up case studies and preparing our marketing for launch.
If you can’t sell your service to someone in your existing network, it’s probably a crappy idea or not the right one for you to focus on.
Step 1 to productizing a service - Get service delivery off your plate ASAP!
I have tried productizing services many times in the past and failed. In almost every case, I underestimated how much inherent knowledge I brought to the service delivery. It wasn’t until I tried to train others that I realized I could never teach the entire service.
For example, several years ago I took a serious swing at productizing when I launched the 1st iteration of Outbound Creative. The business looks much different now although at the time we were mailing out physical packages to target prospects. Our goal was to get a small number of meetings with high-value dream clients.
The tactics worked, but when I started trying to train other people on how to do it, I realized that so much of what made the tactics work was the intense knowledge that I had of sales. I would have had to hire very senior people to be able to productize this and that wasn’t going to be cost-effective.
Fast forward to 2017…
When I decided to start Lead Cookie I tried to be very thoughtful about the service. I wanted to ensure it was simple enough that I could quickly train others to run it.
And once we sold those first few customers, I started training Jeff who has been working with me for years how to run the actual implementation. Within 2-3 weeks, I was no longer doing the actual in the weeds work and was only handling client strategy.
That right there was a huge lift for me. It was the first time I had ever been able to separate myself from the execution work so quickly and I believe this is where most people get hung up with productized services.
As you will see later on in this post, I have since handed off client strategy and removed myself from all new incoming clients to Lead Cookie. This ability to remove yourself from client interaction the hardest part but the most essential in building a scaleable productized service.
Lead Cookie has been a side project and not my 100% income driver this whole time
As I made this transition, I didn’t want to go all in. I know there are some inherent vulnerabilities in this business model (ex. Linkedin could change their platform overnight), so I decided that I would keep consulting along the way.
I did wind down a majority of my consulting clients but I ended up keeping one cornerstone client. I actually expanded my engagement with and have now invested more time in them.
On a given week, 50% of my time goes into Lead Cookie, and 50% of my time goes into The Negotiator Guru and a Salesforce Negotiation Service we put together This accomplishes a few things for me.
I have the peace of mind of knowing that even if Lead Cookie tanked in those first 6 months that I would have at least a baseline of income to fall back on. It would suck, but I wouldn’t totally lose my income.
The fact that I was not full time forced me to hire out a lot of the work that I otherwise would have held onto for much longer. These forced constraints caused me to scale and hire more people.
Lead Cookie did not turned profitable until January. This was another reason that additional income was so important as my baseline of living. I have hired in anticipation of our coming needs so we were sitting at break even or just above for most of those early months. We also shut down our service for the holiday break while still paying our team which was a huge cash suck.
I am equally excited about what we are doing with The Negotiator Guru and our Salesforce Negotiation Service. I see massive opportunity to turn this into a multi-million dollar business as well.
Recognize your ignorance and seek out advisors
When I had my first video production agency in college, I surrounded myself with mentors and advisors. I knew I was ignorant of business so I sought out people more experience than me and picked their brains at every chance I could.
I grew that video agency with a business partner into a $700k per year business between the ages of 19-23. I was an ignorant dumb kid at that time who didn’t know what he was doing, but I was smart enough to surround myself with smart people.
When I started my Linkedin lead generation service, I decided I wanted to seek out advisors. I was fortunate enough to get the opportunity to work with Alex McClafferty who was a co-founder of WPCurve.
Alex and Dan built Curve into a massive productized service business and sold the company to GoDaddy. Alex is now working in product management there.
Alex and I met a few times and agreed to an advisory compensation model. We then we kicked off with weekly calls for 6 months.
Lead Cookie wouldn’t be where it is today without him.
On so many calls I was inches away from making stupid decisions that would have derailed the focus of the business. Alex helped me avoid those.
In our weekly calls, I absorbed an insane amount of wisdom and knowledge which helped me level up as a business owner.
My primary belief when seeking out advisors is not to find some “Business coach” but instead to seek out someone who is has accomplished what you are trying to accomplish. Alex built WPCurve with a similar model and structure as what I am doing with Lead Cookie so he was a perfect fit.
Be conscious of your cash
Another lesson I learned was to be very conscious with your cash. As soon as you start selling a lot it’s easy to start spending money on things that are “investments in the business.”
While those things may help the business, it’s easy to justify costs that are nice-to-haves and not need-to-haves. There are several large expenses I incurred early on that in hindsight I wish I had waited on.
One example of this is when a tech tool we were using that was central to our workflow suddenly stopped working. It literally crumbled our business overnight and we had to shell out some unexpected cash for a custom software solution.
Another example is that I over-anticipated how many clients each of our account managers could handle. So the entire hiring costs of our business started growing much faster than anticipated.
Be conscious of your cash. Invest in the business but unless it is an absolute need, try to hold your cash for when those unexpected make or break situations arise.
Resist the temptation to add new services or do custom tweaks
This is one of the areas that I got a regular hand slap from Alex on. After seeing the success of Lead Cookie, I had this massive feeling of success and more ideas for businesses started flowing.
Some of these ideas were very legitimate business ideas, but Alex encouraged me to stay focused on my Linkedin lead generation service. In the end that was 100% the right thing to do.
In addition, I often made small custom tweaks to our scope in early clients we signed. Alex hammered home the repercussions of that and the chaos it can create in your organization. Every time I ignored his advice I felt the repercussions first hand.
Even in December I still did a custom tweak for one client who kept pushing me and immediately I regretted it. It turned into a massive organizational headache. We had to go back and tell the client we could no longer do the custom addition of work.
Value propositions and a money back guarantee
There is no way I can fully explain the concept of value proposition in this short little post. All I can say is that I have been learning and refining the art of creating value propositions for years, and Lead Cookie has a great one.
Why the Lead Cookie value prop is great.
We are offering lead generation. According to Hubspot’s research, this is the #1 challenge most small businesses and marketers struggle with
We generate results fast. So many people selling content marketing services that take 6 months to “maybe” produce results. The promise of delivering results in 30 days is quite attractive
There is minimal time investment on our client's side. They spend 10-20 minute per day nurturing the leads we hand them and we do the rest
We added a money back guarantee. If the client is dissatisfied for any reason at the end of 30 days we refund 100% of their money.
That last one with the money back guarantee is huge and many of our customers sign up because of it. My general spiel and what I believe in is:
“There are too many marketers out there selling marketing services that don’t produce any ROI for their clients. They just churn and burn clients and make quick profits before moving on to the next one.
My belief with Lead Cookie is that we only want to work with clients where we can be mutually successful. That is why we offer the money back guarantee. This forces us to only sell clients who we know we can deliver value on. If we fail to deliver value to you, then you will ask us for a money back guarantee and we lose a lot of time and money as a result.
We put the money back guarantee in place to make this 100% risk free for you.”
If you think you are a good fit for Linkedin prospecting then reach out to us at LeadCookie.com
Your service isn’t a right fit for everyone, but it is a great fit for a small subset of customers
Early on, I was taking anyone who would sign up for Lead Cookie.
But I began to learn that this service did not work for everyone, but it did work extremely well for a certain type of customer.
Our ideal buyer persona: A B2B company (typically service or software) with a customer LTV of $10,000+ and a very well defined value proposition and niche.
That sounds rather broad, but the truth is our service can work across all different industries. The differentiator is the value proposition and the niching of our clients.
For example:
We had one client who’s tagline was “I help blue collar companies automate manual processes”. That is super niche and his results were amazing.
On the flip side, we had a client who was a generalist software development agency. They saw crickets with their outreach because they don’t have a refined niche or value proposition.
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This realization about who our ideal clients are was key for us. As a result, we started picking and choosing the clients who we knew we could serve and be successful with.
I came up with this equation for how to think about our service. (This is applicable to any marketing service)
(Your value proposition) X (Lead Cookie’s Service) = Results
Your value proposition acts as a multiplier. We put all sorts of different companies into our framework and they get varying results. The only difference is the value proposition you bring to us at the start.
On average we turn away about 4/5 leads that come to us because their value propositions are not strong enough. If we took those leads on, they would fail and we would have to give them a refund.
But those 1/5 leads we do take on are companies with strong value propositions. We are confident from the start we will be successful with them.
Occasionally, we are wrong and it sucks to have to give a refund. You end up with an unhappy customer and it kind of can feel like a downer at times.
But here is a key thing I keep in my mind whenever we have a failed customer…
"Lead Cookie is not a bad service. Lead Cookie wasn’t a right fit for that specific customer. Remember that you have 20 other customers who are happy and seeing massive results! "
I have to remind myself of that every time I get a customer complaint and start doubting myself.
The 90 day “shake out” & building processes
One concept that Alex kept bringing up in the early days was the “Shakeout”. It’s those first 90 days of building up your service to see what breaks.
His advice was to not write out processes too much at the start. Instead, train people one-on-one and then see what breaks.
A lot of stuff broke in those first 90 days…
We outgrew the first CRM we started using to organize our outreach
The primary software tool we were using in our workflow shut down and left us stranded
We replaced that primary software tool with a new one which was buggy and failed us
We had to hire someone to create a custom software tool to run our workflow
The operations model of how people would work together changed
The IT model and how we would log-in and out of accounts changed
Our pricing changed
We changed invoicing systems
We rebranded the company
We hired and fired multiple people
We had to change the scope of what our service actually was multiple times
Etc.
As you can see, a lot of stuff crumbled and had to be rebuilt during the shakeout. Despite Alex’s advice, we did start writing processes early. As I now look back at our Playbook I see a ton of outdated processes that are totally irrelevant. In hindsight, those were a waste of time to create.
In retrospect, I would advise waiting until at least 90-120 days in to start documenting processes. Too much stuff breaks in those first 3 months.
Today we are at 6 months and we have a lot of documented processes and are constantly documenting more.
But early on, “shake it out”.
Understanding my unique ability
About a year ago I was introduced to Strategic Coach by a few entrepreneurs who I respect. Since then I have been consuming podcasts by Dan Sullivan on a regular basis.
The one concept that Dan claims as his greatest tool is Unique Ability.
The concept is simple: Each of us has a unique ability where we shine and excel. This is an area that we are fascinated and motivated by and could keep working in for the rest of our lives.
Instead of trying to build up our weaknesses, we identify our Unique Ability and design our lives around it. We delegate everything that is not our Unique Ability so we can spend more time working in it.
The concept sounded pretty interesting when I heard some podcasts on it. I bought the Unique Ability workbook and went through the process. It includes taking an activity inventory of all of the tasks you do, personality profiles, getting letters from those who are closest to you about your strengths, and more.
Here is what I learned from going through the process:
My unique ability is creating something new, lifelong learning, achieving things, connecting with others, thinking differently and selling with integrity so that I can create freedom in life.
To put it simply: I like to create, start and sell stuff.
This was eye-opening for me because I began to realize that the areas where I always failed in life and business were in the recurring work.
If I had a client task sit on my to-do list every single week, I would fail to do it.
As soon as something became repetitive, I would fail at it.
This realization was incredible for me. I hadn’t seen that before and so I immediately started looking at my businesses differently.
Instead of trying to do everything, I now hop around and build up different parts of the business. I build it, train someone, and then get it off my plate.
Each piece I build gives me insane gratification. I also create an opportunity for someone to work in and run the process that I have created.
Which brings me to my next point…
Know exactly the type of person you are hiring for
As I mentioned above, my strength is in creating things and getting them off my plate. What I fail at is running repetitive or systematic processes.
That means I needed to start hiring people who were the opposite of me. I need to start hiring people who enjoyed running processes instead of building them.
One way I did that is by creating a “gauntlet” style interview process. Our application takes a ton of work and has ridiculous requests in it.
You can see our gauntlet style job postings here. (Btw, we are hiring!)
So far, the magical interview question for me has been “Would you consider yourself more of a creative person who likes to start new things? Or someone who prefers to have a system and framework created that they run?”
That question is the key for me to unlock the kind of people I need to hire. It is strange and foreign for me at times to interview them, because these people’s mindset toward work and life is often polar opposite from my own. They enjoy running processes while I dread it. BUT they are the exact kind of people who compliment my strengths and are essential to scaling this business.
Early on, I didn’t understand this distinction and I ended up hiring someone who was far overqualified for the position. (The funny thing about remote work is that people will take massive payouts to be able to work from home). This individual was intelligent and had held senior roles at large software companies, but she was terrible in the role we put her in.
She wanted to create new processes and question everything we were doing. That was her strength.
What we need is someone who can run the processes we create. This frees me and my operations manager, Jeff, up to create new processes and structures for them to work in.
Know exactly the type of person you are going to hire for and interview them accordingly.
And fire fast if you make the wrong hire…
EOS - Entrepreneurial Operating System / Rockefeller Habits
For years I have used the Rockefeller habits to run my business. For those that don’t know it’s a framework for thinking big picture all the way down to the weekly execution.
Recently I started hearing several entrepreneurial friends talking about EOS. I looked into it and found it quite interesting. Gino Wickman, the creator, took 80% of the Rockefeller habit and then added some tweaks and customizations on top.
I read through the Traction book, liked what I saw, and begin implementing it within Lead Cookie. EOS gave me what felt like the final pieces of the puzzle to make this practical and execute it in my team.
What is EOS?
It stands for entrepreneurial operating system. To put it simply, it’s a handful of tools and a framework for meetings in your company. The goal of EOS is to say “this is how you lead and run your organization”.
Instead of debating on “What should our meeting schedule look like each week?” you follow the EOS structure and then get to focus on debating the actual content and topics of that meeting.
It’s simple and I find it very useful.
It makes me more confident as a leader and helped me articulate the vision of the company to my team and myself.
If you are going to scale up your team, I highly recommend it.
Weekly workshops
Even if you are not going to implement EOS, there is one element of it that I have done for years without knowing. Every week I hold a weekly “Workshop” with my team where we try to fix problems in the business.
We have a Trello board where we store ideas or problems we need to deal with. The list is overflowing and we can never get to all our problems each week.
Each week, we spend 1 hour and tackle our biggest challenges. We try to identify solutions or build an action plan to fix the problems.
Examples from our actual Workshop board include:
How can we prevent making another bad hire again
We need to improve our Calendly workflow
Handoff from sales person to account manager needs to be improved
Improving the customer onboarding experience
What should our referral partner look like
We are hitting a character limit in Google Docs when our Linkedin search queue links get too long
How can we tighten up security
What does our ideal server solution look like?
What should each of our team member nicknames be?
Training the team on a new concept
How do we handle client travel dates?
How can we make sure that clients are booking their 2 week check-in calls?
Etc.
Sometimes these are big topics where we only hit one in a meeting. Other times we tackle 3-5 smaller items that are more logistical but still make a huge impact.
Culture matters, build it from day one
I am going to be honest here. Most of our team is overqualified and underpaid.
We hope to raise their pay, but most are still ecstatic and happy to be working with us either way.
The reason: culture
On our weekly standup calls, we are about 50% business and 50% joking around and having fun.
We require two people to share a joke or funny video at the end of each meeting and it is something I look forward to every week.
Our slack channels are filled with ridiculous jokes and nicknames for everyone.
We have a #winwall to celebrate successes.
We had a holiday cookie swap and mailed each other cookies.
In general, we have built a positive atmosphere where everyone gets along.
Another litmus test we now use in hiring is: Could I see this person hanging out at a BBQ with us and fitting in?
In addition, I have built a Culture Deck which outlines or purpose and core values.
Purpose: Freedom - The actions we take create more freedom, not less, for our team members, owners and clients.
Values:
Life > Work
Be happy
Constant Improvement
Mutually Beneficial Transactions (Win/Win)
Hiring a salesperson/account strategist
Over the past two months we have hit a massive milestone in the business. I hired a salesperson who has now taken over sales for Lead Cookie and all account strategy going forward.
This came at a much needed time as I was buried and overwhelmed with account strategy work. Since it was ongoing work it was not my unique ability.
In November, I hired a Salesperson and spent most of November and December training this individual. It took a large time investment to get him ramped up, but as of January I have handed the sales and account strategy reigns over.
I am taking no new sales calls these days unless I know the prospect personally.
And I am doing no more client strategy. He is handling all of that.
I am only two weeks into this change and the shift is already amazing.
First off, I have more free time to work on other aspects of the business and write up awesome articles like this one :)
Second, Lead Cookie is now making sales and running clients who I don’t know. There are clients paying the company and I have no idea what their business does or what their names are.
That is a HUGE accomplishment for me as I am now elevating myself from in the weeds to working on the business.
It’s not perfect yet. I am still managing some clients, and I am advising our new salesperson on strategy and giving feedback. Overall the freedom is growing and creating massive opportunity for growth.
Count your wins
One other tip I picked up from Alex and another friend Jon Tucker of Helpflow, a live chat service, is the concept of a WinWall.
I created a private tumblr where I post 3 wins at the end of each day. Even when I have crappy days, I find 3 wins from the day and write them in the wall.
They could be personal or professional but I document them each day. This has been huge in keeping my mindset positive even in the hard times.
It gets insane at times, but power through
Month 4 and 5 were complete hell.
I was training a new salesperson and we were trying to sell and onboard a lot of clients to ensure our cash flow would be good for the holiday break.
The result was quite a few 60+ hour work weeks and being drained by the type of work I hated.
During one of my weekly calls with Alex, I was in the pits.
Exhausted, hating it all, and I couldn’t see a light at the end of the tunnel.
He zoomed me out big picture and helped me see that due to the decisions I was making, things would clear up in 1-2 months.
In the moment, it’s hard to realize that it is going to get better. But if you can keep your mindset right and think big picture, then you can make decisions now that will free you up in the coming weeks and month.
Hiring and training that Salesperson was one of those hard decisions. At the time, I was already slammed and training a salesperson was just one more piece on my plate. I had zero free time and was working around the clock.
But I knew it would pay off in about two months. Now in January I am seeing those results.
When you are in the pits, keep your head up, drudge through and make sure that you are setting yourself up so things will get easier in the future.
In business, you don’t always get instant gratification.
Sometimes you make a decision and the results don’t come for months down the line. Just know that you made the right decision and I promise in time it will clear up.
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There you have it. The raw and dirty lessons and experience that I have learned over the past 6 months.
Hopefully it provides some insight to you on your journey.
Feel free to head over to LeadCookie.com if you want to learn more. And if you can’t afford us but want to try out these Linkedin prospecting tactics, check out this article I wrote called a how to guide to Linkedin lead generation.
In the article I give away our entire process and scripts for doing our Linkedin outreach.