61: Nathan Hirsch, From $5k to $12 Million/yr

Welcome to the first customer's podcast today. We have Nathan Hirsch with us. He started a business called free up with $5,000 Then built it up over four years to earn $12 million a year in revenue Then sold that business and now he owns and manages several new businesses that we're gonna talk about today Nathan welcome to the show. Thanks so much for having me excited to be here. Sorry for our rescheduling in you a bunch I appreciate you being accommodating Yes, sir All right, take us back to when you first got started and how you got your very first customers Yeah, so I kind of three parts of this. I mean first of all I learned how to sell just so they young age I had a lot of jobs and internships. I never had a real job after college But I had a lot of high school and summer jobs and one of the funny ones was an internship at Firestone Which they sell tires and car services. I know nothing about cars I'm not a cars guy and they had me they threw me into the fire and had me sell car services So I got to the back talk to the technician try to go out to the front put in layman's terms and sell to the customer and I crashed at Burns at first and by the end I was one of the top salespeople being a high school and then eventually like a freshman in college before before I left that so that was my first selling experience and then my first company which was an Amazon business and I got into Amazon super early In 2008 2009 no one really knew what Amazon was we just threw products online It was all trial and error Amazon brought the customers. There was no PPC. There was no SEO it was all trial and error trying to figure out what would people buy and we landed on baby products and Ironically, I'm buying a lot of that same stuff now because I had my first kid nine months ago But that was my thank you my first like real my own business sales and then fast forward one more time to my first B2B business My own brand away from kind of the Amazon world I I pretty much started offering free hours of virtual assistance I had all these VAs for my Amazon business that were great Amazon was getting harder. I didn't sell my own product manufacturers realize they could do it themselves But I had this great team and I started offering it to other e-commerce sellers and so I would go on Facebook I would go on For eggs list. I would just go anywhere that I could see with job posting and it just say hey I have these three-vetted e-commerce VAs. Can I give you 10 15 20 whatever it took to get that potential customer free hours And I still have to pay the VAs so this was money out of my pocket But that's how I got the initial clients for for free up and launched it with that $5,000 in the rest of history Wow What do you think some lessons you learned about Getting those first customers would you do it any different if you had to do it over today? So I'm a big fan of minimal viable product and selling it as early as possible with with free up We had nothing we had this crummy software rebuilt that Could you could see the freelancers hours that was it didn't do anything else and And we just sold it and I built trust with people I kind of assured people that I'd have their back if anything went wrong and and I did that with those initial clients They didn't the issues I would refund them given them credit cover replacement costs whatever it was Luckily that didn't happen very often But that kind of built a sense of trust and all the same time I was open and honest with these customers I said hey, this is a new company. We're gonna we are planning to grow this thing I have your back if anything goes wrong But like there are going to be speed bumps that like any new company and we want feedback We want to know how we can make this better over time and we kind of shared our journey as we went So those initial clients became raving fans as we kept going now We did the same thing with our other companies when we launched outshore school Which is my company that teaches people out of higher and we launched this post-free up We had no idea people wanted a course on how to hire great VAs We sold the course before we even made the course We just did a pre sale and said hey, we'll give it to you at a cheaper price and what we're gonna launch if you've been following me And you enjoyed the free up journey It's yours if you want it and if people didn't buy it or we would have just never built it If people got the course when we finally built it and wanted to refund we would have just refunded everyone and moved on to something else And fast forward again to bookkeeping business I own accounts balance an online bookkeeping or bookkeeping business for online businesses and econ balance a bookkeeping business for e-commerce sellers We went out and we tried to give away two free months of bookkeeping And if we couldn't give away two free months of bookkeeping or those people didn't stay on again We didn't have a business and we did the same thing with true SEO We offered free articles. We do a lot of SEO content that we now offer as a service through trio And that was how we got our initial client so I'm a big proponent of that if you can't sell it at a discount If you can't sell it free if you can't give it away and keep those initial clients, you don't really have a business So I've heard so much for the worst complaint Like if they give things away for free sometimes you can get the what don't quote wrong target customer That may not be with you long term or be willing to pay higher prices later and that kind of thing. How do you account for that? So we look at it two ways for one We definitely like to vet the buyers in some way like with our bookkeeping business We have certain specifications and In certain situations that there might be cleanup work or additional stuff there, but we're not just trying to take anyone They have to be some kind of legit business So the second way is we don't really care if those are if some of the initial people drop off We kind of expected but we use them to improve the process So bookkeeping for example when you sign up we have to get you a quote quickly We got to integrate you we got a kickoff call and then we got to catch up your book So just by putting like five clients through that even if two of them drop off We're going to learn a lot and improve the process for down the line now if all five of them drop off that's different But I think we had like 20 25 initial customers a few of them dropped off We also learned a bit about what an ideal client looks like for our business and that helped us going forward All right, let's back up a little bit and break down Kind of step by step some of the tactics you use to get those very first customers You went over it briefly, but could you get a little more in depth on the different ways you found them Yeah, I created a cam template that just said hey my name's Nathan. I was an e-commerce seller I hired a lot of EVAs for my commerce business and I know hiring is a struggle It took me years to figure out a higher really good people, but when it did it it changed my life And I gave people a story that it related to a true story and I said hey like I launched this new company free up I know it's new I know it's tough to trust new people, but if you're ever looking for VAs and you want to give it a shot Your your first five hours are on me or something along those lines And then I tried everything I tried going other marketplaces and and and put like posting profiles there I tried going on Craigslist and and remote job boards and posting there. I did on social media And just made posts about hey if you know any business owner looking for VAs We're giving away five three hours. So it was pretty much how do I get this message and get it out there And then I would tweak it Over time and let's say I would come across someone online that would Say hey, I'm looking to hire a customer service shop. I'm looking to hire a bookkeeper whatever it was I would get the email and try a variation of the email to see what would work and we actually landed Some really big clients that were with us for all four years In that initial first month or two of free up just by doing that So was email marketing a big part of that initial outreach was just pure cold email outreach or you said there was social media stuff which channel Did you see perform the best? Yeah, cold outreach landed our initial clients and I also just said hey, I'm gonna post on social media every day And I didn't really have any followers or any one dot them But I just said hey, I'm just gonna focus on being consistent every single day I Facebook with my go-to at the time and I just made a post on Facebook I would either teach someone about hiring or make an offer and The cold email definitely was the first way that we got clients but social media soon turned into another way and To keep going like I started going on podcasts after that now there's a lot of podcasts back then there were not many Now I've been on 900 plus podcasts, but it was a it was a great way to get in front of ideal audience and network with podcast host and get My brand out into the into the e-commerce space So those are kind of the the free easy ways that we got our message out there and landed our initial client Did you transition into paid advertisement at some point? We didn't we probably spend maybe a few thousand dollars on ads. We tried out some Google retargeting We got really good at just organic marketing if you go to Outdoor School dot com slash organic marketing. It's our exact organic marketing blueprint that we use for all of our companies We drive traffic through SEO we go on podcast We have partner programs from people in the space that have the same ideal customer but a different service That we're constantly doing cross promotions with we put out a lot of content and social media We have really good reoccurring affiliate programs and all of our companies that we mentioned everyone and and our clients are for other clients They get kickbacks from it and do a few other things as well But that's kind of our organic marketing blueprint that we do on all of our companies now and a lot of people Used out to our school dot the higher b a's to do it for them You mentioned something that came up during the last episode with Richard white The CEO fathom about using those initial customers to Improve your product and iterate Because you talk a little bit about that. What was your process for handling that kind of customer feedback and that initial burst of customers nice we use fathom they're great. Um, okay. Yeah So i mean we always want feedback the first thing is just being open and honest that we want feedback and telling people like, "Hey, we're not going to be perfect in kind of setting those expectations." And hey, if you're looking for an established business that is has all their systems dialed in, like that's how it is. Go find someone else and all that. But if you want someone where you're going to get a really good rate, you're going to get hooked up, you're going to have me there. If anything goes wrong, a much more personal experience. And someone that's actually going to listen to your feedback and improve as we go, I'm your guy and I'd love to work with you. And with that, we would check in with clients. And with free up, you got to remember that there's two sides of the marketplace. There's the clients and then there's the freelancers that we're getting on. So we created this marketplace and all these freelancers, they can go on upwork, they can go on fiber. So we wanted to make free up the best place for them. We also wanted them to stay on the platform and keep building through the platform and save thing on the client. So throughout that, we're always listening to feedback. We want people to feel heard. We're always trying to improve and we're trying to put steps in place if something does go wrong, if someone hired a freelancer, didn't work out or whatever it was, how do we put steps in place so that that doesn't happen again? And then you got the software that holds it all together. We were building an Airbnb type portal that people could log in, put in a request, get matched up. So then it becomes all these feature requests that we're getting from clients, we're getting from freelancers. How do we prioritize these? What moves the needle? How do we balance long-term projects for short-term projects and trying to get that feedback out there as quick as possible? We'll tell people, like, we listen to feedback, we write it all down, but we can't implement every piece of feedback instantly. You have to prioritize at the end of the day. So when you were building free-up over that four-year period, you started off you yourself spreading the message however you could tell them the new story to get those first customers. Did you transition to like a sales team or how did you expand or kind of delegate and move out of that position, or did you stay on that position the whole time? Yeah, we teach VA's to do everything. So we had a VA's in the Philippines doing sales calls for us and they would go through free-up and take requests for clients that they wanted and put into the portal for them. It was very white glove. We had a whole marketing team that's putting out content, people doing SEO strategy and writing articles for our blog, a partnership manager that's managing all these different e-commerce software companies and different partners where we're doing cross-promotions and keeping that organized. We want to be more organized on our end so that other people's partner managers might not be that organized. We want to be so organized that it makes it easy for them to do business with us and do cross-promotions with us, run people running our social media. Yeah, over time, I mean by the time we sold it, we had no office, no US employees, but we had a 30-person team in the Philippines doing everything from operation for filming to sales, to marketing, to billing, you name it. That's beautiful. So you're fully kind of fleshed out a full digital marketing funnel. It sounds like you're leveraging every modern aspect of technology you can get hold of. Yeah, it don't get me wrong. Not every business works. We created this SOP building software called Simply SOP and we did the same process. We minimal viable product, which is like the bare minimum that we can build. We took it to market and we tried to sell it and there was not enough interest. People like their Google Docs, they like their loom. We pivoted, we moved on to something else, and luckily we didn't spend four years working on this project. It was a few months and it didn't really cost us much time or effort. So it goes both ways, not every business that you hit is going to be a success. But if you prove that you can sell it first, that's going to tell you a lot about the market. That's a really interesting insight. Trust in your process, and then also that specific niche of anything that starts to compete with Google Docs, Google Sheets, loom, those really fast, easy ways to document things. A lot of tools out there, I feel like, end up becoming more work just to use them the tool than just, hey, go back to the good old office suite products, basically. Yeah, and there's the market research part ahead of that. Before we launched the bookkeeping business, I'm not a bookkeeper. So I didn't know anything about bookkeeping business. And we interviewed people, we published those interviews to the e-con balance tool, I'll go find it once to check it out. But we want to know, can you name five competitors? Like, what do you like about your bookkeeper? What do you not like? What do they charge you and see if there's an actual market before spending any time on it? And you're your brainstorming ideas all the time. I'm sure you do this. Like with our business, my business partner, we're constantly throwing around bad ideas. But when you have something that you think is a good idea, now it becomes do market research, find an operator, because now we don't want to business with an operator, and then prove you can sell it before you do anything else. Oh, what do you mean about a fun and operator? I'm assuming that's the person who runs the day-to-day for each of your businesses to talk a little bit about how that works. Yeah, I mean, I have four businesses now. My goal is to get up to 10 plus a media company that promotes Connor my personal brand and all the marketing for our companies. And so we couldn't run all those businesses if together if we wanted to without a lot of help. So on top of that, I'm going to different point of my life now. For free up, I was hustling all the time, going over to the conference. Now I don't do any work travel. I refuse to go to any conferences. Just, personally, I want to run a business that doesn't require me to go places. I don't work after 3 PM on the weekdays. I don't work weekends. I only go on podcasts that I want to go on. So I'm very particular about our time. In order to do that, I have to put really good people into these positions. And I mean, bookkeeping, for example, I'm not a bookkeeper. I couldn't do fulfillment or run a bookkeeping business even if I wanted to. So we had to find a controller with 30 years of experience that's been there, done that. And it has our values that's going to be with us a long time that we can support. And with those operators, they have that entrepreneurial spirit, but they don't love all parts of it. They don't like sales. They don't like marketing. They don't love all the things around it. But they're super organized. They've been there. They have systems. They can build systems that they don't have it. And we can just every week check in with them and say, how can we support you when we help you with a problem? Software with hiring someone with more clients, whatever it is. And that's kind of how we run our companies now. Where we're checking with the operators. We're out of operation. And we're also running our media company to push clients to these different businesses. Wow. Do you have this visualized anywhere? Um, yes. Get internally probably. Yeah, yeah. I mean, we've got internal docs and stuff. I don't have like a template or anything. I do. If you go to NathanHorse.com/exit, we have this exit playbook that teaches you how we build our businesses to be scalable and sellable. Even if you don't want to sell your company, like, free up. We didn't just sell it. But it had really good teams, really good processes, diverse marketing, clients coming from different directions. Good leadership. Reoccurring revenue. There's just certain things that we look for in a business and the way that we build a business that we're happy to share with others. Would you recommend any books? I mean, I've seen that you got a color-coordinated stacks of books behind you on your shitholds. And it seems like you've got really dialed in systems and everything. So be curious to see what you'd recommend for others who are trying to build businesses out there. Yeah. So when I went through the sale of free up, I knew very little. And I relied on a lot of mentors just teaching me about the process. I didn't know about earnouts and non-compete or what to expect after the sale or what buyers look for. Do you deal with gents or any of that stuff? So there's a great book on the shelf behind me called Exit Prenuer Playbook. By Joe Valley, he's been a business broker in the space. He's a friend of mine. He knows just a lot about just deals and the ins and outs and every deal is different. And just having that background helps you build a business. Because at the end of the day, the things that buyers care about are the same things that you should care about in your business. And doing things right, even stuff like he talks in the book about hiring a good bookkeeper from day one. That's what we do for all of our companies. That's why we started a bookkeeping business. Hiring a great bookkeeper for free up was one of the best decisions we ever made. On the first day, we started the company even before we were profitable because we had clean and macular books every single month. We made decisions on a good decision on the numbers. And we passed due diligence when we got to that point. So it's something like that that the average entrepreneur might not think about. I recommend checking out Exit Prenuer. Okay. Man, you've offered a lot of great insights in a short amount of time here. Think that's about it for today. Any parting advice for people who want to get into entrepreneurship? I mean, you've started so many companies. Most people never get one successful company off the ground. And it sounds like you've got, I guess, five at least to go that you've got on your record. So what do you think those kind of biggest, most important takeaways that somebody should consider before starting a business or in the process? Yeah. So you can't master everything as an entrepreneur. The sooner you learn what you're good at, what you're not good at and how to delegate the better. Fault hiring is a skill that you can learn. Hiring makes entrepreneurship way easier. If you're bad at hiring, it's always going to hold you back. And it's just a very underrated skill. So learn how to master hire master hiring first. Follow me on social media. I post a lot of content about it. But that's something that's going to really accelerate your growth as entrepreneur. Awesome. Well Nathan, thank you so much. And we'll see everybody on the next episode of the first customer's podcast. Thanks for having me.