- Duration: 72 min
- Platform: meet
- Source: Read.ai 01JVD72BPQYQJAQYS3E4M2HT7P (https://app.read.ai/analytics/meetings/01JVD72BPQYQJAQYS3E4M2HT7P)
Transcript
[Blake Emal]: it says my system’s preferences are not updated for my microphone. And then I fix it and it does nothing. So I literally have no idea what I could possibly do. [Michael Houck]: I’m gonna I’m gonna I’m gonna ask the the dumb question, which is have you tried turning it off and turning it back on? [Blake Emal]: Yeah, I have many times and every lap and everything and it just I don’t know what’s going on. Maybe log out of everything. [Michael Houck]: We can just default to this Google Meet too, because then we can have the little AI bot join. And we can just go. I hate video calls, so we can go video off if you want. It’s totally fine. I agree, man. I agree. Cool. Sweet. OK, so we got a big one today. Thanks for taking the extra half. I appreciate it. OK, so let’s talk about the churn folks first. I mean, we had a good run for a while, so it makes sense that there’d be sort of a day where a few people turn out. But yeah, so Min is out for sure. I have to get on a call with him, but he’s out of the office all next week, so it’s not gonna be, we won’t get feedback for a little bit. But they’re definitely gone. [Blake Emal]: I mean, they weren’t- Was it the writer or was it them? [Michael Houck]: My sense is that it’s a mix. My sense is that they weren’t happy with the content. And I mean, to be fair, they weren’t seeing results. Min’s follower count was not going up much. But I think the trigger was that they did this big launch this week. And we helped them prep for that. And we looped in all these creators to amplify it. And they paid us a couple thousand dollars for that. And then they didn’t use the fucking launch thread that I rewrote for them. Is that a mistake on their part? [UNKNOWN_SPEAKER]: I’ve asked them about it. [Michael Houck]: They haven’t acknowledged it. So my assumption is that it’s intentional. I think that I don’t know, I think they were in love with like, you know, me as an engineer. And the guy who he’s working with john is not a content guy. He’s like an ops guy. And so I think that they were in love with the idea of like putting out all the details about like, here’s how our software looks under the hood and here’s why it’s revolutionary rather than here’s why this product can help you, you know? [UNKNOWN_SPEAKER]: Nobody cares about that stuff, yeah. [Michael Houck]: Right, so I think that they optimized for like an engineer audience, which doesn’t really make sense. And that’s why they chose to use like their version of it. Because I stripped a lot of that stuff out in what I rewrote for them. So I think it’s a combination of the launch not going very well and also just general unhappiness with the content. I don’t know if it was Tanya’s content in particular or whatever, but I think they’re just tapped out budget-wise right now. [UNKNOWN_SPEAKER]: OK. All right. [Michael Houck]: Well, Tanya, we’re putting him on something else anyway, right? Yeah. New legal tech one. [UNKNOWN_SPEAKER]: Okay. [UNKNOWN_SPEAKER]: Cool. [Michael Houck]: Yeah, I feel I feel okay about Tanya. [Michael Houck]: He I don’t think he’s very good at Twitter. But I think he’s very hungry to get better. So I have I have some faith in him. I agree. [Blake Emal]: He is very supportive to like he, he comments on all my stuff. Like he really, I don’t know, he’s just kind of a go getter type guy. So I think there’s definitely hope that he’ll keep getting better, but he’s he’s more linkedin He’s a little more corporate which makes sense because I think it’s probably easier to write toward that as a non-english speaker first as opposed to like twitter where there’s just usually more personality, which means harder words or Saying things in ways that maybe aren’t as common. [Michael Houck]: So it kind of makes sense, but I think he wants to learn Yeah, he’s he’s He’s DMing Ben and I in like a little group chat that he started with us, like every couple days with like a new idea for how we can improve some process or something at the agency. So I love having him on the team. Yeah, I just think let’s, let’s keep him away from the sort of the from x as much as possible. Yeah. I also think he’s a good newsletter guy, because he’s very process oriented. [Blake Emal]: So yeah, my, my gut what sense is the people that are better at LinkedIn are better at newsletter? [UNKNOWN_SPEAKER]: Yes. [Blake Emal]: X seems to be actually the harder format for a writer to get. Agreed. Which is interesting. I always thought like, oh, we just repurpose from X and LinkedIn, but those two are not as connected. [Michael Houck]: Actually, I think newsletter and LinkedIn are more connected. You know, I’ve noticed it, um, this week because I’ve started posting daily on, uh, LinkedIn sub stack notes. Threads and I felt myself like, I’ve been like, Oh, what’s going to work best on the, can I just repurpose across these three? And I see them all very differently already. And like thread sort of scratches that Twitter itch in a way that the others, the others don’t. So it is sort of a unique, unique format when you have the option to do like an actual thread. Yeah. Anyway, sure. They’re gone. Venture scalers I mentioned is Paul. Pausing slash churning. I do think Jake will be back whether it’s for Venture Scaler or whether it’s for this new business that he’s starting. He’s very happy with Andrew, very happy with us, just basically needs the money to kickstart this new business. And then I’m trying to get him to refer us one or two people too, because he knows a bunch of founders. And then the Preston thing, I don’t know, man. I, I responded to him and I was like, cause I talked to Ben, I was like, look, you know, you’re not approving any proactive engagements that we’re trying to do from your account. And so as a result, people aren’t coming to your profile. And so as a result, you aren’t growing. Yeah. So we’ll see what he says to that, but he’s not churning like in terms of overall, he’s still doing the newsletter with us, but he just can’t get his mind around social. And you know, I think he’s very public image conscious. You know, his dad’s a billionaire, right? His family is all successful. I think he’s very conscious of that stuff. And so giving up control of his like, social media voice is tough for him. [UNKNOWN_SPEAKER]: Gotcha. Okay. So we’ll see where it goes. [Michael Houck]: But the good news is, it looks like Draper is going to expand. I’ll know for sure next week, but both Michael and Andy are pushing Tim to, to do it. They’ll probably just expand volume on Tim and the Draper account first and, and potentially add Andy’s account. And then they can do other stuff with us later in the year or something like that. But at a minimum, I think the contract will increase by like 2.5 X, which is, which is great. Yeah. [Blake Emal]: Any pushback on the book? [Michael Houck]: I didn’t mention the book. I put it in the proposal. He didn’t mention it. So once they give me an answer on this, I’ll bring it up again. But I want to lock them into a bigger social commitment first, because that’s the lowest hanging fruit. Yep. OK. I did get connected with a book guy, by the way. So we might have a book-specific writer who knows the ins to this stuff who could help us with it. [UNKNOWN_SPEAKER]: Gotcha. [Michael Houck]: Is he more editor or writer? [UNKNOWN_SPEAKER]: Writer. [UNKNOWN_SPEAKER]: Cool. [UNKNOWN_SPEAKER]: Yeah. [Michael Houck]: Outside of that, so funnel, I have some actually pretty good news. So the bad news is that the only client we’ve had convert in the first half of this month is Symphony. But part of that is because I have been distracted with other things. But we also have a couple people who I’ve talked to who are in the funnel. I think, you know, one to two of them might convert before the end of the month. But the good news is that Valley is starting to work. So Blake has been basically wrangling it and it’s still not great in terms of like the quality of the messages. So we’re working on that to train it better. But I think I’ve had like four or five meetings booked on my calendar next like forward looking seven to 10 days from it. So if we can fine tune that a little bit more and drive up the response rate and increase volume, then it’ll more than pay for itself and, and hopefully lead to, you know, at least one or two new clients every one to two weeks. [Blake Emal]: Nice. Yeah. I’ve seen a few finally messages get accepted in my inbox. The The first one that I got, I had been running some automations through something else. And so the first one that came through, somebody like responded and I had no idea if it was from this or if it was from a previous thing I was doing. And it looks like the messages got kind of fixed up because the first one didn’t even include the link or anything. So it looks like It’s working better on my end, but- Yeah, it’s taken us a lot of back and forth. [Michael Houck]: And I think the more screenshots and feedback you can give to Blake about specific examples of what is not working or what was wrong, that will give him data points to tweak how we have the tool set up. So please, as much as you can, send those to him. Yeah, you got it. But yeah, so that looks like it’s going to be a real channel. I mean, we’ll see if these people convert. Right. So it’s, you know, I don’t want to count our chickens before they hatch, but, um, if it’s driving real clients on a recurring basis, then that’s fucking great because that’s a scalable growth channel that we can say we have set up when we go to sell, which is what people want to see. [Blake Emal]: Yeah, totally. I had, I had one guy that responded to me from it and he, and then he tried to pitch me instead on some like cybersecurity. [Michael Houck]: No, no way, bro. Yeah. When you’re doing volume, you’re going to get terrible messages. You’re going to get the wrong leads. You have, everything’s going to happen. [UNKNOWN_SPEAKER]: Yeah, for sure. [UNKNOWN_SPEAKER]: Um, okay. [Michael Houck]: So that’s existing client check-in unless there’s other people you want to talk about and sort of state of the funnel all in all in one. So do we miss anything there? [Blake Emal]: Uh, the only thing is Jamie, if you want to talk about that for a minute. [Michael Houck]: Oh yeah. Let’s do that. So I got her bill for the first month and it’s a little higher than I expected. Not crazy, like it’s doable, but it’s like 1750 for the month. And obviously Draper’s paying us 2K. So we paid basically nothing on that for the first month. But yeah, so she gave me notice and she’s like, I’ll stick around as long as you need me to. But I do want to sort of wrap it up relatively soon. [Blake Emal]: that it was because she doesn’t like us rewriting this stuff. [Michael Houck]: So she did send me the email the morning after I sent her a voice note that was like, this is too like press release. So it could be related to that. But honestly, like I hopped on a call with her a week or so ago. I think that it’s just like, both sides sort of can see that the other side can see that it’s not a match. You know, Yeah. So I don’t think it’s worth belaboring the point or diving into it. Like she’s not good at social. That’s OK. She also doesn’t like doing this client facing social work. That’s fine with us. [Blake Emal]: You know, it’s fine. Yeah. She she just sent over the batch like a couple hours ago. So she’s gotten into that habit of when’s the most possible inconvenient time to send me the edits. Take me like an hour and a half to do them, because I have to rewrite everything. [Michael Houck]: Right. I mean, I don’t I don’t want to just like, obviously, it’s better for us at this point, if we just say, Jamie, like, don’t worry about it, like, you know, between you and I being you, Blake, and me, Michael, we can, we can handle it. And obviously, we make more money that way. But the problem is that that’s we’re in these negotiations. And if we we say we’re pulling the writer, that’s going to be pretty disruptive to that. [Blake Emal]: So I think we just have to stick it out for at least another week or two. Yeah. Yeah. [Michael Houck]: I’m going to do that after, after this call, but I think the sooner the better on that for sure. Yeah. I’m pushing them. I’m pushing them. It’s a, you know, Tim is a busy, slow and old, so it takes time. Okay. So moving on, Let’s see, any other things for state of the funnel? Noel sent us a referral, which is nice. So I’m working on that. And on my to-do list is basically to pump existing clients for referrals and to DM basically everyone I know about them referring people because we’ll get to that when we talk about the AI stuff the plan and all that. But I want to really show strong growth this quarter. And so we’ve got like six weeks left in the quarter. And yeah, I just want to pump that as much as possible to show that we are, you know, because Q1 was a big growth quarter, right? And so I want to show that Q2 is a big growth quarter as well. And I think right now, we have grown, but not at the same rate that we grew in So I have to fix that. Yeah. OK. Makes sense. OK, so moving on. Writer funnel update. So I don’t have a huge update here. I think the people that we’re getting introduced to are not like, I feel like my bar is rising in terms of what I want to bring onto the team. Because I feel like we have a good group of folks who are pretty good. And then we have a couple people, I mean really no one, Jacob’s like S tier and then we have like a couple people who I’d qualify as like B plus A minus tier and then we have a bunch of people who are sort of lower than that or just too expensive. So in order to find more people who are like at least in the B plus A minus tier, I feel like I just need to hit the pavement. So my bar in terms of bringing people black and stuff like that, I think I’m going to raise it, because I feel like we have a good-sized bench at this point. [Blake Emal]: Yeah. The only ones I have in the pipeline, I guess it’s just Amanda, the one that came through yesterday, and then Samarth. Because the other ones, I think we already made decisions on. [Michael Houck]: Yeah. I’m just going to do it. Is something that I’ve put off because it hasn’t been the most urgent thing. It’s gotten close to being the most urgent thing, but it never really has been the most urgent thing. But especially if we’re going to do some of this AI stuff, I feel like the bar for writers should be higher. [Blake Emal]: So I just need to do it. [Blake Emal]: Yeah, I mean, we may need to switch up the assessment eventually to be more geared toward showing us that they have taste as opposed to writing jobs. Because if we use AI, increasingly, that’s going to be what’s more important anyway. Yeah, that’s why I think Jacob just has good taste. I don’t know, like the most gifted writer in the world or whatever. I’m not either. It’s just I kind of know what I like and what I don’t like, [Michael Houck]: Yeah, same here. I’m we’re all becoming Rick Rubin, basically. Yeah, exactly. Yeah, it’s who would have thought that in the future, Rick Rubin will be the person with the most valuable skills. But yeah, so this is, this is on me. I literally just need to go and go on a DMing spree and brute force it. So I’m good at that. I just, you know, need to find the time to prioritize it. So I will do this because we do need, I think, more people who I feel confident in, because when I’m like, when a new client come in right now, and if they’re like a good founder, I’m just like, like, I’m like, who do I assign them to, you know, and I don’t want to feel Right. [Blake Emal]: Exactly. It should be more obvious. Right. Okay. So that’s on me. [Michael Houck]: Um, I just wanted to update you there. Okay. Okay. Now the bigger stuff. So let’s, let’s, let’s do the workshop. Let’s get that out of the way. Cause that’s small too. Um, yeah. How do you want to do this on Tuesday? [Blake Emal]: Um, let’s, do you want me to actually make this into a thing or can we just work out of the notion doc? [Michael Houck]: Cause we can, we can do voice. Over. It’s totally fine. [Blake Emal]: Yeah. I think, uh, there’s a lot of content in there. A lot of that can, we can just talk through, take questions or whatever, but we’re probably just going to want to screen share some examples. So one thing I was thinking is, uh, the four, I gave four accounts that we could look at for hooks. For example, we can just pull up those people’s top 10 posts each and try to put We can guide the discussion there, but try to put a little more onus on the writers to share their tastes and why they think those hooks work. Or we can also show bad hooks that we see written as first drafts that our writers have done. [Michael Houck]: I don’t want to make them feel bad necessarily. We can’t do ones that our writers have done. [Blake Emal]: We could just generate some ChadGBD ones. I don’t want it to be the worst hooks in the world, but just this is what chat GPT is going to give you and maybe dissect some of like why that doesn’t work. How you take it to the next level. Yes. I don’t think that it needs to be overly prepped or overly complicated from that standpoint. We can probably just do a lot of that on the fly in the session. Um, and then, and then working with the data points that we’ve already written out. [Michael Houck]: I like your, I like, like getting feedback from the team so what I’d like to propose is that we have some examples ahead of time that we know we like and we’ve screenshotted them or we’ve embedded them in the Notion doc or whatever and we show them one at a time on the screen and we just ask the team for their reactions like what works about this what doesn’t work about this what’s the psychology behind it and we see what they say and then we sort sort of riff off that and share what they’re missing, basically, or emphasize what they got right to. And obviously, for the good ones, it’ll mostly be good things. For the bad ones, it’ll be, here’s why this wouldn’t work, here’s why this didn’t work. So I can create some in chat GPT, and I can also pull some examples from real Twitter. But I honestly think we should spend a decent chunk of time doing that, at least like 10, 15 minutes of the workshop. [Blake Emal]: Yeah, if you look at the workshop content, It’s not actually that much so like section one with the algorithm We can blitz through take some time to chat if there are any questions, but then we can just move right into hooks and a lot of this stuff Probably we can just teach as we’re looking at examples instead of just looking right at the dock and sharing that So that make that works for me Formatting as well. We can if you want to if you want to tackle like examples for the hook stuff. I can do examples for formatting. Probably won’t need as many of those, but I can screenshot some stuff so people can visualize what the velocity style that we’re talking about here looks like in practice. Some key outcomes for me from this is if we can start highlighting, like, I do not want to see these formats ever again in hooks because I get like the, if this isn’t about X, it’s about Y probably in every single post that any writer writes. And I’m so sick of that, that format. Um, so they’re just like things like that. I would love to get out of our vernacular and maybe we can train that out just by showing what good hooks actually look like, Yeah. [Michael Houck]: I think this gets covered with the examples. Like if there are specific hook formats that you’re just like, this is fucking terrible. I don’t want our writers to do this. Then just find one of those that wasn’t written by our writers, send it to me, and we’ll just put it in the doc, and we’ll use that as one of the examples. That way it doesn’t feel like a criticism of them. We need to avoid them walking away from this and feeling like, wow, how can Blake really fucking hate my writing? I’m terrible, I hate working here. Yeah, I shouldn’t have brought that up. [Blake Emal]: That’s what we did at StoryArmy. [Michael Houck]: So that should have been an indicator Let’s just find examples that were that way and didn’t perform well on people’s accounts, you know from other people Well, okay, so I’ll do more section three stuff and maybe some of the Don’t do is at the end that I put there I can maybe voice on that stuff and then you’ll do the hook part Yeah, I’ll find I’ll find find the hooks that are good, and we want to analyze why they work, and also the ones that I just feel are generic and not unique enough, et cetera. I’m also going to tell them at the end, I think we should plug that they actually read the Viral Examples newsletter every week, because it is good content that both of us put out there in the Monday and Thursday respectively. And there are hook examples in there that they can that they could use. Yep. Sweet. Okay, so now let’s talk about the big the big two. So AI plan. So we both have thought about this, I’m sure over the last few days. So just give me your give me your take. Where’s your head at in terms of, I think where we left it over text was, I shared that post, and the guy was saying, you know, oh, like agency should consider are selling out before these agents go and take their work. And so the timeline is shorter than you think. And so I thought, well, why don’t we get the win and then try to build one of those businesses separately rather than trying to retrofit our so that’s that’s the hypothetical. [Blake Emal]: So yeah, what are your thoughts? Yeah, so the questions that I had initially, first and foremost was, who is going to buy it? And not like a specific answer, but the broad, like, I know you have your network, you can DM people when we’re ready, stuff like that, but who do you view as the type of person, if it’s not Draper or whomever, that want this business and would keep running with it and actually pay us what we’re hoping, as opposed to like, what I would not want is to go through all the effort of putting it out there, getting it ready, and then we get crazy low-balled with not as much excitement about it as we’re hoping? [UNKNOWN_SPEAKER]: Yeah, okay. [Michael Houck]: So I think that we have a few things that people find valuable. One is that we have a system that can print money that doesn’t necessarily need their involvement, right? So now with Andrew on the team, Andrew Chang, who’s going to be doing content ops, and I’m also going to have him do sort of some account management stuff too. We basically have an autonomous business. Yes, people need to get on sales calls, and they would maybe need to use Andrew for that as well. But effectively, the business can run itself with minimal involvement from you and me. Now, obviously, we don’t run it that way, but we could, or someone who buys it could. So that’s one asset. The other asset that we have is good relationships with good clients. These are valuable clients who are going to grow. Their businesses are going to expand. And there’s natural potential to add more services on or sell other things too. And Draper is obviously like a very valuable relationship to have, like a headline relationship to have, right? The third thing we have that’s valuable is Megaphone, the platform. It actually isn’t valuable as much because of what it does, although that is nice. What’s really valuable is our relationships with the creators. So we have hundreds of creators network, some of whom are inactive, but still part of the deal, right? And people want influencer marketing, they want relationships with these folks, and they find them hard to reach and hard to build trust with. So we have a proven system, we’ve been paying these people for a long time, they have a lot of trust in us. That’s sort of the third, the third thing that’s valuable. And then if we can pair that with something like Valley, which is a growth engine, that works on top of the sort of organic referrals that we get. It’s sort of a complete package. And so I see it as pretty valuable. Now, whether they value it as an agency business or as a tech enabled agency business due to megaphone and any AI stuff we want to throw in, that’s a separate question, right? So if it’s just an agency business, then we’d probably get like a three to four x profit multiple annualized. If they view us as a tech enabled agency, that could rise to five or on the very, very high end seven. So figure like 1.5 to two ish x bump we get if they view us that way. So the question becomes, okay, who views us that way? Right? Yeah. I think that one could be private equity, folks. So especially like low to mid-sized private equity who want relationships with founders and creators and want to come in and optimize this business with AI. Basically, if we position it like this business works, it’s growing, but we haven’t optimized it with all these new AI tools. And so we want to cash out now, and you can come in and do that, and that’s your opportunity. I think that’s a valuable pitch to PE. I think they’d go for that. The other option would be larger agencies who want our client base and our creator connections and our writers, I guess. They would probably pay a lower multiple and they’d also probably want some sort of like, I don’t know, payout schedule or earn out or something like that. So it’s less appealing to us in terms of both of those. And then a third is sort of a black swan type person, like a VC fund, or like a big traditional media company who wants to get involved in social media and have this arm, or a tech company like HubSpot acquiring the hustle, right? All three of those sort of fall into the black swan category. So those are the three that I see. [Blake Emal]: Okay, a follow up on that would be, if we get them to see us as tech enabled, Everything goes our way. At what point do we maintain relationship with the agency post-sale? Because a lot of it, I would say a lot of the value we’ve gotten from the business is because of you and very secondarily me and our brands getting people in the door. And then past that, obviously they work with a writer and it’s less about us. How does that play into people’s fear of investing in it and us just kind of going away post-purchase versus us needing to stick around to be a part of it still? [Michael Houck]: Yeah, so this is key person risk, right? This is a typical thing that comes up when you’re selling younger businesses like this, is how much of this is based on, especially creator-led businesses, how much is based on you? And the argument that I would make to them Actually, a lot of our success is not because of us. Because when you look at our clients, most of the clients who’ve come in, especially early on, who were based on personal relationships that I had with these people, have turned. Our turn rate from that cohort is our highest of any cohort. When you look at other cohorts, like referrals, cold outbound, or inbound, we get good volume from them, and they don’t turn very often. And so what that tells me is that the key person risk in terms of growth actually isn’t there. And I think that’s a strong argument to make. I think we have the data to back it up. The other side of it though is operationally removing us or would they want to remove us or whatever. It’s going to vary from person to person. Some potential buyers will be like, we have a team. That can come in and do account management and sales calls, and that’s totally fine, or editing, and that’s totally fine. Other people might say, you know, hey, I want you guys to stick around for three to 12 months. And over that time, we’d want to grow it. And then we’d use some of those profits to reinvest, especially as we do AI stuff. And you guys would phase out at that point. And they pay us for that. I’m sure. And like, maybe they tie us tie that in some way to the sale. I don’t know. And it also might be different for for you and me. They might be like, you know, how you’re the you’re the sales guy, we want you to keep being the sales guy. But we have an AI system that we want to edit the post. We don’t think that Blake’s expense makes sense. I’m like, okay, we might do the other way. They might say, Hey, we have a sales guy, but we don’t have the content chops. So know, Blake, we want you to keep editing and we’ll keep paying you for it. [UNKNOWN_SPEAKER]: Right. [Blake Emal]: So either one of those could happen. Got it. OK, that makes sense. I’m cool with whatever outcome there, too, by the way. So where my head’s been at with it is first thinking selfishly of what that looks like just for me and then thinking, OK, what does it look like just for us? And then what does it look like for Megaphone as a whole? So for my end, I don’t know if we put it up now for example What the multiple would look like and how much we would make basically I I’ve got 5% so 5% it basically means for every million sold. It’s like 50k to me. That’s that’s the math of it I guess tax and stuff. So that’s cool. Obviously, I would love to maximize that as much as possible because if we’re gonna go Build this whole thing and then and then sell it 50K is like, that’s okay, but 100K is cooler, 200K is cooler. And I’m like, hey, we can really pump that up. That’s the only thing on that side that is any consideration. On the work side, I could keep doing this. Like, I don’t feel like I’m burning out from it. So I don’t feel a need work-wise to be like, we gotta sell. So it’s more like opportunity for me at that point, which is good. It would be a lot worse if I was if either of us were feeling particularly burnt out about it, right? For us The things that come to mind just me and your relationship it would Kind of end the way we’re doing things which naturally is just gonna happen eventually But would love to keep working on something together if that’s in the cards for you as well. Yeah, same dude Yeah, so like that’s that’s something I would love to continue even if this part if it’s building an AI automation thing, AI systems, AI workflows, whatever agency, companies, that’d be cool. I think we both have different perspectives that could be helpful there, whatever it be. So on our foundational level, I think I would love to continue whatever, building something together. And then Megafone as a whole, I think would not suffer that much from going somewhere else. I think I was working worried about the key person thing. But if the data is showing that it’s not actually that big of a deal, and we can overcome that with more volume, I don’t think that I’ve ever viewed it as once the client gets in, we’re super essential. It’s more just that we need people with good taste and skills to keep them as clients. And that’s worked so far. And I think I’m replaceable as an editor. So if they just brought talented people in, I think the business could keep doing well too. That to be a win for them wouldn’t want to just like build a business dump it on them and then have it die unless you know if it happens it happens but be cooler to see it still living so yeah those are my thoughts I I’m pretty for it I obviously selfishly just want to see how much we can grow it before that time but it probably probably makes sense to start prepping and putting out feelers yeah okay so I I’ll respond to a couple couple different parts of that because I have a few different different thoughts. [Michael Houck]: So first is, I’m totally on the same page of you as you in terms of like, not being burnt out on this. And like, I would love to keep running this. And I think that there’s arguing to be made to do that and to optimize everything with AI. And we’ll kind of circle back to that when we talk about the AI stuff. But at the same time, we sort of have this existential thing about AI. And so we need to, like, if we have a chance to cash out and make, you know, some money from it, then it could be it could be a worthwhile thing. We’ve been this for, I mean, I’ve been doing this for about a year, you’ve been doing this for a little less than a year. So if we come out of this with a decent chunk of change, that feels that feels positive, especially if there are opportunities for us to keep working together. And it sounds like we both want to do that. So I don’t view that as as a negative, especially if we can go out and build something that’s even more valuable. So in terms of the finances, I’ve broken that down, I’ve done the math. So if we assume that Draper is going to expand, right, then a three x multiple, and if we’re going to loop megaphone the software platform into it, which I want to do, because I think it’ll drive up the cost, I think the creator relationships are part of the value. A three x multiple, which is sort of the low end of the non tech enabled view, we would make combined about 1.7 million today. If We then, and that’s like assuming that’s before taxes or anything like that, right? If we assume that we get the sort of low end of the tech enabled side, which would be a 5x multiple, that puts us at about 2.7, 2.8. If we assume that we get the high end and people really like Megaphone, the platform, we do some little AI stuff that really gets them excited, then we can get 7x and that puts us at 3.9, which is obviously significantly better. So it’s a big range and I think the different buyers are going to come in at different parts of that range. So I think that, do we want to start putting out I’m hesitant to do that. I know it takes a little while for these deals to come together most of the time, but there’s also a chance that it won’t take that long. And I think there are some things we need to have be true before we start having these conversations. I have like a little checklist about this that we can talk through. But I would prefer that we not start sharing the news probably until around the end of the quarter. So like a month and a half, month or so from now. And over that time, we sort of set specific goals between the two of us of like, hey, here’s what we need to need to make happen is like high priority. To your point about editor side, I think there’s a strong case to be made that we could hire Jacob full time, right? And he sort of becomes the key person then going forward. And he lets you phase out as editor and sort of takes on that role for the rest of the team. So if the client would want to do that, I think that’s something we, not the client, if the acquirer would want to do that, I think that’s something we could explore. And Jacob’s expressed interest in it too. [Blake Emal]: Obviously he likes working with us, which might make it a harder sell for him. That’s my only concern there is if it hurts that relationship. Cause I think he’s the kind of dude we’d probably want to work with again in some capacity. [Michael Houck]: Yeah, probably, probably like he’s, he’s not easily fungible as easily fungible as some of the other writers are. Right. So there’s value in maintaining that relationship. So I have that on my mind too, but we can always pitch it to him. Like, I’m not saying we like, you know, it’s like, hey, if you want to lead an agency and be the guy and have a steady, you know, job with that rather than managing Benzinga, we can give that to you. So basically, we just presented to him as an option. Yeah. So that’s the that’s the pricing range of where we’re at today. Now, if we have a successful six weeks, and we add, say, I don’t know, six clients, or one client a week, which I don’t think is crazy, then all of a sudden, it jumps up a bit. And let me make sure that Those are the right numbers. If that’s the case, then all of a sudden 3x is 2 million, 5x is 3.2 and 7x is 4.5. So that’s why growth over these six weeks I think is going to be important and why we should because I don’t think there’s like imminent urgency to sell, but I do think it would be good to sell before somebody releases like I built, you know, the AI employee agent for content writing and it goes mega viral or something like that. [UNKNOWN_SPEAKER]: Yeah, exactly. That’s, that’s what I’m saying. [Blake Emal]: Like maybe, maybe that’s what we do next, you know? Yeah. [Blake Emal]: Um, okay. [Blake Emal]: That, yeah, that all makes sense. Admittedly, I have never gone through this before. So I’ll defer to you on a lot of this stuff. Uh, I’m, I’m kind of a dummy with, well, it’s all good, man. [Michael Houck]: I’ve, I’ve never sold one. I sold an agency that I started like right after college, but that was not the same. Uh, but I’ve, you know, I’ve been part of acquisitions on the other side, um, and sort of seeing that process and everything. So, yeah, I, I do know a decent amount about this world, although this will be my first, like, real exit from like, like with like, you know, seven figure type business exit. [Blake Emal]: Yeah. I think there’s nothing that you’re saying that scares me. I’m thinking through, I’m going to think through more of the next six weeks, what I can do. Cause I think I’ve been so into the editing now. I definitely want to help try to push things forward and get us to a good spot at the end of the quarter. Let me, let me share my screen. [Michael Houck]: screen, I can show you this this checklist that I that I have. Okay, so this is I’ll share this doc with you. And actually, I don’t know if I already did, but I’ll share with you a notion if I haven’t. Basically, we have to get the website live. We have to build an upsell for clients. So this is like megaphone credits. This is like lead magnets, we need to prove that there’s upsells that we can that the acquirer can resell to people even after they’ve signed. Yep. We need to have a writer hiring pipeline set up. We need some clients with longer-term contracts. We have Symphony, who’s sort of our first, and Augment also. They do quarterly now, too. So there are a couple people there. We need to figure out the AI strategy, and we’ll talk about that in a minute. We need the email growth process. This is sort of an upsell, too, of building newsletter lists without Matt Ember because his process is expensive for us and we can replicate something that’s like 80% is good for, you know, 90% lower costs. So, to stand that up. And then I have here some MSAs. So we can talk about page tear. We should formalize some MSA between Megaphone and page tear if we’re gonna do that. I should reach out to Matt McGarry, sign one with him. And I’d love to sign some partnership with Beehive too. And then try to sign them with accelerators in VC. So that’s sort of on my plate. And then there’s stuff on the growth side. So we have Valley now working. There’s other growth channels I want to solidify more. What is that workshop, the YC thing? Yeah, so we decided to prioritize Valley first. So we’re going to redo that. Next month, so we’ll run that next month at some point or at the very latest early June early July. [Blake Emal]: Okay. I don’t know if I’d be helpful with that. [Michael Houck]: But if you want me there, I can help too. Yeah, no, you definitely would. It should be the two of us. Where like, you know, we’re both talking about different things. And I’m sort of emceeing as well. And we probably we probably want to rehearse it once or twice beforehand, too. [UNKNOWN_SPEAKER]: Okay. [Michael Houck]: So I’ll loop you in. Blake is helping strategize and set that up. So there’s a lot of work. And we have to see if Matt is still willing to do it on his side. He might not be, in which case we would need to figure it out ourselves, which is fine. We can do it. But yeah, so the big thing is we need testimonials and case studies. So this is on my plate. I’m going to try to get one from Venture Scaler on their way out the door. [Blake Emal]: And then Do you have an automated process for that? Cause that’s probably some area where AI can help. An AI agent can help to stay on top of asking for testimonials and compiling case studies based on results. [Michael Houck]: Yeah, I think we need to do one of each first, right? We need to like build that out. And once we have that, if there’s some easy way to train an AI to do it, we should, we should totally do that. But it’s also not that big of a It’s just prioritization. If we had 500 clients, it would be different. But we have 25-ish clients right now, so it’s fine. On the software side, we need to launch the new version of Megafone with the lead gen functionality. So for context, we’ve pitched Megafone historically as a tool for social media growth. We are now pitching it as a lead generation tool. And we’ve integrated with a couple APIs so that we can pull the contact info including email address of people who engage with your social media posts and then you can export them to like HubSpot or whatever CRM you use. So we think that’ll be valuable and so we want to get that launched and then probably invest a little bit of budget into growing that side of the platform too. And then the AI stuff again, I mentioned down here too. And then sort of, if we have time, this is like a nice to have, but improve the sort of integration between the content clients and Megaphone during the onboarding process. And for selling, there’s like a couple things later on, but that’s like later. These are the sort of things we need to get out of the way first. Okay. I shared a stock with you. I think I already did, but, um, make sure you’re in here. Yeah. You flexes this. This is in the like our section of it. It’s somewhere down at the bottom here. Yeah. Okay. Um, so that’s how I’m thinking about it. Um, my hypothesis is that we will get most of this done over the next six weeks and then look to sell after that now that the problem is July and August are the worst times to sell like except for like Christmas. Because all the P folks are, you know, in the south of France or wherever. Right. So we’ll need to do our best. But I don’t think it makes sense to wait unless we feel like the AI stuff is gonna be additive rather than disruptive. [Blake Emal]: Yeah, I think I align more with you on AI could probably upset a lot of this stuff in the next year. So it’s probably good to be proactive. [Michael Houck]: Yeah, like the worst case scenario for me is that we don’t sell in this window. That exists right now. And then it’s one or two years down the road, and we’ve actually grown revenue for the business. But because of AI, the multiple that we get is lower. And therefore, we sell for the same amount just with an extra year of work. [Blake Emal]: Yeah, right. On the, we can talk the page starts stuff after. So let me just go through here and see if I have any questions. I guess we should talk more about the AI stuff now. Like, yeah, the stuff that’s worth doing now to prep for a sale as opposed to the AI stuff that would be worth doing as a post purchase or post acquisition new thing. [Michael Houck]: Yeah, like the the existential thing, the like outlier thing that will make this for us is, can we build an AI system that generates performant, unique content for each individual client with AI? If the answer to that question is yes, then we fucking need to sell this business because someone else is gonna do it and we’re gonna lose our opportunity. If the answer to that question is no, it’s not quite good enough yet, human writers are still better, then we should be like, okay, what are all the workflows we can optimize? How can we increase our margins? How can we use AI to augment the writers, right? But if it’s a replacement thing, then we’re better off selling and then trying to build that new thing separately. Gotcha. Yeah. [Blake Emal]: I agree with that. [Blake Emal]: That makes sense. I personally already think that it’s good enough to get most Because really what we’re talking about is just if we can create a system that has so much context on what’s actually worked, and we just keep adding to it so that it is updated with formats and stuff that are currently working, that’s pretty much all that’s needed. From there, we would just need to funnel clients into a specific tone or voice. And then that would make it super easy, I think, to have a system where this is fully possible. I don’t see why I wouldn’t. [Michael Houck]: I don’t. Yeah, I think that six months ago, that wasn’t the case. Now, I do feel like it’s the case. And so I think we’re on the same page, which is why I’m writing all these docs and trying to build this system. I had another conversation with a different friend yesterday who’s built a content system. And so I’m trying to integrate all those learnings from both of them into our own. And so my goal is the engineers can tell us definitively, yes, we built this system. Here’s the content and outputs. And do you like the quality? And we can either say yes or no. [Blake Emal]: Yeah. Yeah. And I think there’s always going to be that human in the loop at the very end, but we can build that into the system too. Like I was watching, you know, the boring marketer. Yeah, of course. Um, I don’t know if you’ve ever talked to him, but I watched a workshop of his, well, it wasn’t him. The company was Plumb, P-L-U-M-B, which is literally just another version of Lindy. They’re all the same company. But he was doing a workshop basically doing exactly this. And he showed all of his steps in the AI agent. It all works pretty smooth. The output wasn’t my cup of tea, but I also saw the prompts he was using within the different steps. And he was literally just meta-prompting with chatGBT to tell him what to prompt. Then working off that. So I don’t think that the formats and the examples and everything that he was giving were super good anyway. And it’s still reliably put out pretty good piece of content and got to see his whole system. So if we can build something internally, that has way more context than just a few examples, like he was using, and we can funnel people into basically just use a type form or whatever, initially, when a client comes on board, to give us a bunch of context, we can funnel them into an AI agent that probably will work 90% of what we need. And then just have one person, like you’re saying, a Jacob type that just has discernment and can finish it off. Right. [Michael Houck]: So I agree. And I think that if we prove that we can build that over the next week or so, then what we want to do probably is build a simple version of that and include it with the because that’ll increase our multiple. But we probably want to then make it really scrappy. And then after we sell, we go deep with one of the engineers, and we try to build something really robust. And that’s a new product that we then sell into companies. [Blake Emal]: Yeah. Just got to make sure that we don’t get into a non-compete with the thing we built. [Michael Houck]: Yeah. If it’s a pure software play versus an agency play, the non-compete people wouldn’t, wouldn’t apply. And plus we will, we’ll say like, Oh, we won’t contact our existing clients or leads or anything like that. [UNKNOWN_SPEAKER]: Right. [UNKNOWN_SPEAKER]: Okay. [UNKNOWN_SPEAKER]: Yeah. [Blake Emal]: I mean, I’m on board with it. I don’t have all the answers of what it looks like yet. I don’t know. Do you need anything from me for that? Just to test it once it’s ready? [Michael Houck]: Not right now. So I need to finish up my like MVP version of these docs, and then I’m going to send those to the engineers. I would love your eyes on those, especially the one of like your process, because there’s going to be an editor bot. So I already have the workflow all mapped out. It’s just I need to finish giving it the context that it needs, like downloading my brain into it. And so I’ll probably ask you next week, if we’re seeing decent results, to go in and add your magic to it and improve them. Sweet. I can do that. [UNKNOWN_SPEAKER]: Cool. [Michael Houck]: Because if we have a simple, naive version of this that we can include in the sale, that is how we get to the session. Seven X multiple. Yep, for sure. And one other thing that would block that wouldn’t necessarily block the sale, but would be a deterrent to the sale is if we have all this, like all these great things that we’re talking about, we’re pitching the potential acquirer on this, their natural question is going to be like, well, why are you selling it? If it’s so good. Right. And you have all this upside. And I actually have a really good answer for this. So I’m going to just be like, yeah, you talk about my divorce, and I’m going to buy a house in a new city, and my priorities just aren’t going to be running a day-to-day agency as much anymore. And so I think that’s a strong argument that will resonate and let us keep a high multiple without it seeming sketchy. [Blake Emal]: Use me as an excuse, too. He’s having his fourth kid. [Michael Houck]: He’s going to die. [UNKNOWN_SPEAKER]: Did I know you were having a fourth kid? [Blake Emal]: I don’t know if I knew that. [Blake Emal]: I don’t know. I’ve told a few random people. I might have told you a while back because we just told my family, but I have needed to just tell somebody that isn’t going to tell my family. So it’s possible it came up, but yeah, we are, we are pregnant yet again. When, uh, when, when is your wife due? Like last week of November. [UNKNOWN_SPEAKER]: Oh, wow. Okay. So you still got a while. [Blake Emal]: Oh yeah. We’re, we’re just about to hit 12 weeks. [Michael Houck]: So nice. Pretty early on. That’s amazing. You’re, you’re, you’re building an army. [Blake Emal]: An empire. [Blake Emal]: Yeah. An empire is supposed to accumulate assets and mine just continue to dwindle more and more. [UNKNOWN_SPEAKER]: They consume the assets. [Blake Emal]: Hey, it’s fine. [Michael Houck]: You gotta, you gotta feed them up front and then you, the assets, they, they go out and return by putting me in a home. Hopefully not. Okay, let’s wrap this up. So last thing is, I think we’re on the same page about the AI stuff. I think we’re on the same page about the sale decision. So I will follow up with you next week about where Raphael and I get to on the system, and then I’ll loop you in to make it better. And then the last piece is Megaphone and PageTarot’s relationship. So I don’t know if you’ve put thoughts into this, how much you want to talk through this now, but that’s probably the last piece. [Blake Emal]: I’ve thought about it more. Every time that I think about it, I go back to the same things that it’s probably not novel. I think we probably talked through it before, but in theory sounds really cool. It sounds logical that this could be part of Megaphone just because there’s clear overlap with content being the main thing. But for like every other reason, it probably adds complexity where we don’t I don’t need it right now, considering all the other stuff that we need to do to make sure everything works for the sale. I think I can contribute a little bit, like might bring my clients over or whatever, but it’d probably just be more headache given how my book of business is not crazy big. It’s like six clients, but at the same time, those six clients are like paying my family’s lifestyle. So it’s a weird spot where I’ve been focusing on it for two years. It’s still working, but the biggest problem is that I’ve never had explosive growth with it. It’s just always a slow burn. And usually the way the business works is clients retain for way longer than I thought, which is awesome. And then when one of them leaves, I kind of get a miracle client that shows up to replace them. It kind of stays at the same spot. Um, so I think like the, If I’m looking at the core value to me, it would be more on the lead gen side, just like working with your systems or getting more help on generating clients. But then that takes away from you being able to do that for Megaphone and me being able to do that for Megaphone. So it allocates resources to other stuff. The value for me on it is not necessarily on the actual writing or deliverables. The whole thing of the business. So that, I don’t know that to me, I just kept thinking like, maybe a partnership could make sense in, in the sense of, you can help me try to find more people to work with. And I give you a chunk of change for each client. But like, actually integrating everything probably just makes it even more complex, especially because I’m going to need to set it up to retain a big chunk of like the responsibility and the revenue of it still, no matter what we do. So I don’t know if it makes tons of sense on your end, but that’s, that’s my thinking of it. It’s just not a huge lift necessarily. Cause I’m used to doing everything every single week, but handing it off would be a big lift. And I don’t know what that was like, And I don’t know if like getting help with more writers would actually do anything to the business right now, unless it grew more than double of what it is now. [Michael Houck]: Makes total sense. I, are largely on the same page here. I think integrating it right now when we’re thinking about selling is a bad idea because to your point, it would add complexity. And I think that would actually make the sale less attractive to an acquirer for the revenue stage. If we were at like 10 million revenue, it would be different, right? So my proposal would be sort of in line with your goal of leads, would be that we set up a simple MSA, like a services agreement, where Megaphone is a partner who sends leads to PageShare and vice versa, if you want, basically an upsell, right? So my thinking is the more of these upsells, the more that this like partner network that Megaphone can have, the stronger it is for the acquisition. And so just having that formalized will make Megaphone valuable, regardless of how much actually goes back and forth in the first month or anything like that. So my prayer would be, we can probably send leads from the Megaphone network. I don’t know how many people it will be, but some agreement, and you can tell me what numbers make sense on your end. I don’t want to take too much money out of your pocket or anything like that. But just something that makes sense for if Megaphone sends page tear referral, what can page tear, pay Megaphone either up front or on a recurring basis and for how long, and that same vice versa. What’s going to incentivize Pagetare to pitch Megaphone to its clients? And then what number would that need to be? So if you want to think about those numbers and come back to me with them, I’m pretty flexible. For me, it’s just like I think locking in this agreement for Megaphone will make it more valuable for the sale. And then if we decide not Let’s say, surprise, surprise, we don’t want to sell. Then we’re like, we think we can grow Megaphone to 10 million in revenue. Then, okay, what does a deeper partnership look like, We’d probably do something where if Megaphone acquires Pagetare, Blake gets a larger equity stake in Megaphone and more cash per month and retains some cash per month from Pagetare. We don’t know what that would look like, but there’d be something there that makes it and attractive to you too. But I see that as like only if we decide not to sell basically. [Blake Emal]: Yeah, I’m really open to the MSA thing because I mean, that makes sense for both of us. I don’t know exactly what you’re thinking leads wise. I mean, you can use megaphone and then whatever else. I don’t know how many leads we can expect from that. I don’t really have an expectation on it, but I probably will be lower on the my number of referring back to you just because I get almost no traffic through my website, but I Mean, I’m already like I will refer Doing that so I don’t mean to say that in a way like no, I know you’re not I’m just like I’m already doing that so it’s easy for me to just to have an actual agreement in place usually what I do is 10% of recurring and until they quit, until the client leaves. So I don’t know if that jives with you. Yeah. Let’s do it. [UNKNOWN_SPEAKER]: Works for me. [Blake Emal]: Yeah. [UNKNOWN_SPEAKER]: I mean, that’s, that’s pretty much it. [Blake Emal]: I mean, I’m good with that. Okay. [Michael Houck]: So then what I’ll do, I’ll take an action item to spin up a, like an MSA doc and you read through it, you let me know what needs to change, et cetera. And we can, we can go from there and just make it a, a bidirectional upsell referral type partnership. And one of my thoughts is that as we ramp up Valley and we do more messages through Valley, some of the people we reach out to will be like, oh, I’m not interested in social media ghostwriting, but do you guys do anything else like conversion copywriting or whatever? And I’d be like, oh, I don’t, but my partner has another agency that does. And so my imagination is that that will happen more often as we increase volume. Sweet. [UNKNOWN_SPEAKER]: Cool. [Blake Emal]: Well, yeah, I mean, that works for me. Okay, cool. [Michael Houck]: I’ll spin that up and I’ll send it over and we can lock that in, which is great. Cool. Glad to finally move past that part. [Blake Emal]: I’m also open if we get to a space where it’s like, oh, everything changed, we’re not selling or we want to ramp it and page tear makes sense there, then we can get to that point. That’s right now. [Michael Houck]: I don’t think it’s smart for either of us personally or also for megaphone to do it right now. So let’s Evaluate that when time comes but no need to no need to get in the weeds on it now tweet. Okay, we are aligned To Another call, but I think we covered everything. Is there anything we miss? [Blake Emal]: No, good luck with the rest of your calls and stuff I’m sure you still got a bunch. [Michael Houck]: Thanks, Ben. Yeah, I got a little bit and then heading down to the gym here in good old Provo. It’s nice here. I hope you’re enjoying it. I am. [UNKNOWN_SPEAKER]: It’s nice. [Michael Houck]: Actually, I love the mountains, so it’s nice. I’ll talk to you. See you, man. All right. [UNKNOWN_SPEAKER]: Bye.