• Evan Ryan

The Math of Business

So this morning, I'm on the phone with my dad. And we're working together on building a sales process for a product we have we're working together on and how we are going to expand into a new customer segment, my dad has, I don't know, 30 years, I'm aging him of experience in large corporate sales, he's probably the best corporate salesperson I've ever seen. And so he's helping me out with some stuff, especially stuff that I'm just really, really bad at. I've tried and tried and tried in order to expand into different customer segments, I've never really been that good at it. And so I'm kind of working with him on it, we've been working together for the last almost 90 days. And I have learned more in the last 90 days than than I had in the previous 90, which is great. And so we were talking about this thing today that I wanted to share with other entrepreneurs that I wanted to share with other people who are looking to share their or start their own business who are looking to grow their business who are working to work less and make more, these are like kind of the people that I just really hope that this podcast goes out to. And that they're the kind of entrepreneurs with massive ambition, they're looking to do things that make the world a better place, they're looking to do things that they absolutely love to do. And they're looking to do things that leave a lasting impact and whatever, where they want to leave an impact and, and so today, what I want to talk about is what we talked about, which is the math of business now, and turning business into a math problem. And so if you're not a math person, honestly, I apologize, just bear with me, if you are a math person, or if you're a science person, then I think this is gonna be this is gonna be pretty good for you. And my kind of intention here is to just allow you as an entrepreneur to think about how you can systemize your business more I hate I hate the phrase work on the business and not in the business. And so that's not it. That is just I think that that phrase is hogwash. But just how can you make your business more repeatable? How can you give your business a bit more confidence? How can you turn your business into a y equals mx plus b type of math problem where maybe some variables change. And if variables change, then you change your activities but you know, with a certain level of certainty how something is going to go. And so we're going to talk about confidence. The math of business purely comes down to confidence. It comes down to how much confidence Do you want and my intention for myself in my entire 90 day journey, which I'm going to kind of walk you through my my intention for myself is how can I create a more systemized business model so that I can help more people so that my business can help more people so that we can go out and we can handle another 100 customers or we can handle 1000 customers or 10,000 customers right now we can, we could not if 100 customers walked into my door today, we could not handle it. And so what I am really focused on is how can I create a really repeatable process, a really systemized process in order to allow us to be able to help more people to be able to transform more entrepreneurs lives to help more entrepreneurs succeed faster. So first and foremost, what is confidence. And that's what this whole thing boils down to. This boils down to my having the confidence that we can scale to another hundred customers or thousand customers or whatever. And confidence is my knowledge that the future will be as I want it to be or better. So confidence is always in the future tense. Cash confidence means you know that money is going to come in the door in the future. If you're not confident about the current money that you have. You're confident about future money. One of the reasons why so many people take corporate jobs is because they want to have cash confidence. They want to know that they're going to have a steady job. That's the same way of saying they have cash confidence. Confidence is the knowledge that your future is going to be as you want to be or better when coronavirus strikes, and people think like the world starts freaking out that is a serious crisis of confidence. Because they don't know that the future is going to be as they want it to be or better. Right? That's just it's not a given. And so your confidence might be shaken. And so confidence always being in the future trends tense is what we're looking for. We talked about turning business into a math problem. When we talk about turning business into a y equals mx plus b type of problem. It's about how can I make sure that I know every single time I do an hour activity I know what the output is going to be, every single time I send out 100 emails, I know that I'm going to get two new customers, right? That would be great, then I would just hire five people, they would send out 100 emails a day, we'd get 10 customers a day, over two weeks, those five people paid for themselves. And now we're off to the races, right? They do that every single time for 50 weeks, or for 48 weeks, or whatever it's going to be. And now we've got, we've got something great, right, but you need to know that for every 100 emails that you send, you're going to get two responses that are going to lead to customers, right. And so that's where the, that's where the confidence lies. That's where the math of business lies. And like, let's think about people who are just confident in general, I think about people who are confident. And the two things that I really think about are that those people really know themselves, they are sure of themselves. They know who they are today. And they know who they are today is who they are going to be tomorrow. They know who they are today is going to be who they are a month from now, a year from now, but better and whatever ways that they're currently improving, but those people who are confident confidence comes from knowing that you're not going to lose, you're only going to make progress. Or if you're not making progress you're learning. Right? confidence comes from people who really know themselves. If you just think about people who are confident, right? I'm talking about businesses right now, just people who you know, that are just just exude confidence. It's people who really know themselves, they are so in touch with who they are as a person. And I think that there are people who have a really strong foundation, those are people who have figured out these foundational things, if you don't have the foundation figured out, you're probably not going to be that confident, right? Because you're still learning what is this foundation? What is the thing that I'm what are the things that I'm willing to, like, kind of stand upon? What's the hill that what are the hills, I'm willing to die on? Right? These people who have a strong foundation, they know themselves, they know how they're gonna act today. They know how they're gonna act tomorrow. They know where what areas they're looking to make progress on. But they're not trying to figure out who they are. They're not trying to figure out what they stand for. They already know all of those things. And so that's what I consider to be it to be confident. And so if you trade kind of change that into a business sense, I think it's businesses that really know themselves, they know who they are, as a business, they know who they serve, they know how they serve them. They know how they want to approach them, right. And they're businesses that have a really strong foundation. So they have good product, they have good distribution, they have good sales, they have all like, they have all these things, and they just know every single time it's going to work. Just like you have confidence that if you go to McDonald's, the hamburger is going to taste the exact same as it did the last time you got the hamburger, it doesn't matter if you like the hamburger, the thing here is that, you know, it's going to taste the exact same. A lack of confidence would be if I went to a restaurant, and it was a radically different experience than it was the first time. Right. And so I think the confidence is a future tense. When we talk about the math of business, we're not talking about having this math be accessible. Now we're talking about having this map be useful in the future. That way you know exactly what's going to happen in your business. Every time you do an activity, you know what's going to happen. And so an example of this here is it's taken us 18 months, literally 18 months to really have a ton of confidence in our Pinterest product search. We know that search works every time for every business, it works for bloggers, like it works for e commerce, like it works for finance, like it works for insurance, we drive great website traffic every time search just works. And it took us 18 months to get there. But now we know. And in fact, we have conversations with customers all the time that like Hey, hey, customer, I know you have 50,000 people viewing your Pinterest content every single month. They're probably the wrong 50,000 people. But if you stick it out with us for three months, we will break down your entire Pinterest account and we will build it back up and it will be twice or three times as large as it was in three months as or and it'll be in three months will be twice or three times as large as it is right now. And we will have built it and we broke or broken it down, built it back up and we'll done it the right way. I just had this conversation last week or two weeks ago with a client the client said how is it that over the course of seven or eight weeks, you could take our count and subsequently make the analytics go down and know for a fact that you're going to quintuple our number of website visitors from Pinterest in six weeks. So well, because we know that search works every time, I've total confidence in search, I just know it works every single time. And I know with our future customers search is going to work just as well, if not better than it has for our previous customers. And so, confidence being in this future tense, it takes a lot of time. But now we have the math of search. We know if we do this much posting of other people's content, and then we post our content. And then we comment on posts. And we like posts and we really nurture a great community and you kind of dig the well before you're thirsty. If we do all these things. We know that in 678 or nine weeks, we are going to crush it for our clients, our clients will get more website traffic than they could have ever expected from Pinterest in a month. So what have I been working on? In the last 9090 days with my dad, I've been working on building cash confidence. I've been working on building out this, what happens if we reach out to 100 people with this message, and the people are qualified this way? Right? So we have a certain persona of people, it's a client who has

to 250 employees, they have at least half a million dollars a year in revenue, they have probably one client who makes up at least 10% of that revenue, and they are struggling to build new products or expand their capabilities. Okay, well, what happens if we reach out to 100 people that have this exact, like customer criteria that and they need Pinterest capabilities, and we have this email message? Well, one of them responded back. Great. Okay, now, let's do love another hundred, two of them responded back. Okay, now we've got something here. That's really interesting, great. These are not real numbers, by the way. But that's what we're focused on, is we're focused on how can we take all of the kind of what ifs in business and systemize them down? That way? I know, every single day, what is going to happen in my business, I know that the future of the business is bigger than the past of the business, even in the middle of a pandemic, even the middle of what is technically a recession, how can I make sure that that we are going to have growth in results in the business for every 100 people that we show an advertisement to or for one of every 100 people that click our website, we know that seven of them are going to give us their email address, and then 0.5% of those people are going to make a purchase or whatever it's going to be right. And so how can we make sure that our business is just totally systemized, that way, we have growth in results. And everything is repeatable. Once it's repeatable, it can be trained, or it can be automated. But if it's not repeatable, you can't train like you can't train, what if you have to train this is what the recipe is, right? So many people who do entry level jobs in corporate America, they are basically just following recipes day in and day out, I'm gonna do this, then this, then this, and this and this and this, and they get bored. Right. But understanding that process allows you to be a very good manager, and then a very good director, and then a very good senior director and Vice President, because now you know what level of customization is needed in order to be able for everybody to do their job effectively. And in order for you to be able to meet your earnings forecasts or in order for you to be able to meet your revenue forecasts, or to get that a plus on your job review or your performance review, right in order for you to get that bonus. And so I think it's really good to focus on systemization. I think it's really good to make it repeatable. And once it's repeatable, it can be trained. And when you can train somebody else to do that job for you. Now, you're gonna just make sure that their results, pay for them. And then some, right? What if every employee, or what if every contractor in your business more than paid for themselves? Right, because you took a process and you made it repeatable all the way to the point where you knew how much money you're going to make off of that individual, or you knew how much money you're going to save off of that individual. And so you know, that your top line and or your bottom line is going to grow every single week, every single month, it's going to grow and grow and grow and grow and grow. And now you have this confidence, right? That, oh, I can take this risk, oh, I can do this new business venture, oh, I can take a three month sabbatical, because I know that my business is running like a well oiled machine. So that's what I've been focused on, like so another example here be lead AI. With lead AI, we know our articles are going to successfully publish and they're going to be successfully published well, meaning they are going to be well written every single time. Now, about a month and a half ago, we fixed a bug that we discovered in our code, we then had to fix two other bugs in order to make sure that everything was to be fine. Then we tested it, we tested it and we tested and we tested and we tested You know what they wrote? Well, every single time, we have not had a single customer complaint, this entire football season so far, in the history of lead AI, we've only had one customer complaint ever. And we got bad data in the process, that customer actually got permanent permanently banned from using from inputting data into our, into our data provider. And so with lead AI, we have just an insane amount of contents, we have so much confidence in layout that we take it for granted, that we know it's going to publish Well, every single day, we have so much confidence in lead AI that I publish content that I do not read the next day. Let me take it a step further. We have so much confidence in lead AI that our customers publish content that they do not read the next day, our customers are newspapers, and they know every single time that lead AI is going to work for them. Because we have proven it time and time and time and time again, that we are going to publish outstanding content that is relevant to their readers for them while they are asleep. And so while our customers are sleeping, we are publishing content, we are winning the search engine optimization game, we are helping them wipe out their competitors. And we are confident that with every single lead AI customer, we're going to do the same thing. Do we send all of our customers content and emails every single day? Absolutely we do. Are those emails ever open? They are not. Because our customers know, every time that what we are going to do is going to work. And so what I've been working on over the last 90 days is I've been working on how can we take this idea that you know we we know that search works every time we know that lead AI works every time. What if we could make our sales process like that? Where we knew our sales process was going to work every time. And then we can either train it and have other people do it. Or we can automate it and have technology do it. Ideally, we'd automate it, but I don't like buying things. So what if we could do that? And that has been a very difficult process. I said been working 90 days on it. I've been working for a year on this project. And we have not we have not figured it out yet. We make progress. Every single quarter we make more progress than we made before. Right? But it's about how can we make sure that we're getting steady, consistent results that are growing over time, we're getting steady, consistent growth and results. And we know how it's going to go. And so Why talk about like kind of the math of business is because in order for us to really crush it with LEED AI, it was a math problem. Well, if this happens, then we're going to face this problem. Well, what happens if it's a soccer game? And it's 00? heading into overtime? And then it ends up being two to one and overtime? How do you write about that? How do you write that there's an explosion of points and overtime? Well, what happens if a different state has different rules. And so the first team to score and overtime wins, we have both of those. What happens if a football score because our data provider is for crowd sourcing sports scores, and so sometimes the final score might be right, but the quarter scores are wrong. So what happens if the final score of a game is 50 of a football game is 56. Seven. This is a real story. What happened to the final score of football game is 56 to seven. But all 56 points were scored in the third quarter. Do we think that a team did not score in the first quarter did not score in the second quarter erupted on offense in the third quarter? And then didn't score again in the fourth quarter? Probably not. So how can we write a piece of content that reflects that we think that the score of the game was 56 to seven we're confident in that. But we're not confident in when those 56 points were scored? Right? Those are all the different math problems there. I'm putting math in air quotes. It's, it's If this happens, then what are we going to do? And then if this happens, then what are we going to do and if this is the game that's being played, and it's being played in this state, and these are the rules of the game for this state, then what happens if we get into this corner case scenario, but now we know we can sleep easy at night, knowing that lead AI is publishing well. Every time lead AI is going to crush it every single day lead as going to crush it. I want to be clear here. I have two different members of my team that read every single lead AI article that comes through. So it's not that nobody is reading these things anymore. We're not doing quality analysis. We are two members of my team read that every single day article that comes through and the important thing is that we read it in the morning now. I used to be up until three o'clock in the mornings on Friday night football. Friday nights in Ohio, I would literally be up until three o'clock in the morning making sure that we I published properly every Friday night. Do you know how unfun it is to work a full workday on Friday from 9am until 5pm, and then take an hour off to eat dinner and then log back on at six to make sure Lita is functioning properly through the rest of the football Friday. And every Friday, all you're doing is watching computer code work, it is not that much fun. But now I can rest easy knowing that we have the confidence in the system in order to be able to do it to do what we're going to do. That's what I'm working on with sales. That's why I'm working with distribution. So what I'm working on with market. And so for you, as the entrepreneur for you as the listener, what are all of the IF THEN scenarios, what are all the corner cases, this is not a fun task for me, I do not like details. But what are the all the FN scenarios that will allow you to have complete confidence that you know that in any situation, you know exactly what to do, and you've written that down. And in any situation, you know, if this is the opportunity presented before me, if the opportunity presented before me is I am going to do Pinterest, I'm going to do Pinterest accountant growth for a car insurance company. Okay, we know how to handle insurance, we're going to follow these five steps. And then we're going to do it this way for the first three weeks. And we're going to make sure that it's working as we expect it to. And if it's not working, okay, we're going to re address we're going to reevaluate if it is working, we're going to continue with these next 10 steps. So how can you as an entrepreneur, do that inside of your business? Okay, well, we know if we get 100 orders for whatever your product is, through a Shopify store, right, we got 100 orders, we know we're going to call this person who's going to handle bulk orders, who's going to be able to do to organize the third party shipping providers, and then they are going to package and ship. But if we only have one order, then I'm going to do the work. And we're going to like one step after another. And we know it's going to happen in this many days. And we're going to be tracking it with these tracking numbers. And these tracking numbers are gonna be delivered to us through email. And now you have confidence that you know how it's going to work every single time you get one order, or 100 or 1000. Lastly, I think it's, it takes iteration, it takes trying again, these first, the first 13 nights that I was up until three o'clock in the morning for lead AI, which is a true story. I was in the office until three o'clock in the morning for lead AI. And it was just because we were trying stuff and then it wouldn't work. And then I fixed bugs in the code. And I thought I fixed them during the week, and then I wouldn't fix them. And then we had new scenarios come through that we had never seen a game looked like this before. Oh my gosh, a team scored 101 points in a game that can't be real. Right now was to delete that article. And in that instance, actually, it was real. But there's no way that a team score is 101 point, right. But now we had to put kind of an upper limit on Well, how many points do we think actually were scored in the game? Like there were all these different things. We're just iterating and iterating and iterating and iterating. And then at some point, it became systemized to the point where we knew that for every 100 articles that we wrote 99.9 of them are going to be great for everyone thousand articles might have an issue with one. That's a pretty good rate. For every 100 search clients that we have, we might not be able to grow an account for one. Right? Or it might take more than nine weeks for one. And so that's what we're going for. For as an entrepreneur. My hope for you is that as you think about how can you make your business more systemized? How can you make it more reliable? How can you take a little bit of the guessing game out of business? How can you give yourself more confidence in your business? You think about well, what are all the different scenarios that could happen in any one particular thing that you're doing? And how can you make sure that you have a response or you have an action plan or you have a decision making criteria, or you have an automation or you have a product that you utilize at that moment, right, in order to navigate that scenario and accomplish the goal that you want to accomplish? For me right now I'm doing that with sales for you. You're going to do that with product or sales or distribution or supply chain management or three PL or whatever it's going to be project management but I hope That as you make your business a bit more boring in air quotes as you systemize a bit more of your business, it gives you more confidence to be able to move forward later. I'll keep you updated on how this thing goes. Have a great day, everybody. We'll chat again soon.

The above is an AI transcription of Evan’s Seconds and Cents podcast.

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