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#4 Big Ideas to Business Model · Coffee, Chaos, & Cashflow

• 0:45
  Speaker 1: All right, and we're back with another episode of Coffee.
• 0:49
  Speaker 1: Got the coffee right here.
• 0:51
  Speaker 1: Chaos and cash flow.
• 0:54
  Speaker 1: What up?
• 0:55
  Speaker 1: What's going?
• 0:56
  Speaker 2: on.
• 0:57
  Speaker 1: Well, first of all, guys, tell me something good that happened this week.
• 1:02
  Speaker 2: Well, I racked my mead this last week and let me tell you it is extremely, extremely good for my first mead I've ever made.
• 1:09
  Speaker 2: I put too much honey in it, so it stalled out, which all that means is that it either capped on the amount of alcohol that the yeast could give, which is 18%, or other factors happen, but it capped out 18, I felt it.
• 1:25
  Speaker 1: Did you say 18%?
• 1:27
  Speaker 2: Oh yeah, dude 18.
• 1:29
  Speaker 1: Oh man.
• 1:30
  Speaker 2: And it's unfiltered, unpasteurized honey, so you get all the benefits of honey with your drink.
• 1:37
  Speaker 2: It's great.
• 1:38
  Speaker 2: I woke up feeling like I was 18 again, like I wasn't sore.
• 1:42
  Speaker 2: I was so clear headed.
• 1:44
  Speaker 2: I only got four hours of sleep and yet I didn't woke it up that good in probably a year, honestly, that's good stuff it sounds like good stuff, wow oh yeah what about you?
• 1:57
  Speaker 1: anything exciting let's see.
• 2:00
  Speaker 3: Uh well, so in september that's my, that's my birthday month and I get a lot of birthday freebies that come through my email.
• 2:07
  Speaker 3: So I've been cashing a lot of free freebies that come through my email.
• 2:09
  Speaker 3: So I've been cashing a lot of free meals, free goodies, all over the city of Lexington this past week, which has been really enjoyable Today was this morning was actually North Lyme coffee and donuts, so I got a free donut and some good coffee there.
• 2:24
  Speaker 3: So cheers to that.
• 2:25
  Speaker 3: I've already consumed it all, otherwise I would represent, but the last that's gone.
• 2:32
  Speaker 1: Northline Donuts are really good.
• 2:34
  Speaker 3: They are.
• 2:34
  Speaker 3: They are.
• 2:35
  Speaker 3: They're quality products and I know one of the guys that kind of got it started, so I have some particular affinity to them for sure.
• 2:42
  Speaker 3: Okay.
• 2:44
  Speaker 2: Infinity and beyond.
• 2:45
  Speaker 2: Huh.
• 2:46
  Speaker 3: Yes, affinity and beyond.
• 2:48
  Speaker 3: Affinity and infinity.
• 2:51
  Speaker 1: Good stuff, good stuff.
• 2:54
  Speaker 1: So, as far as something exciting for me that happened this week, I saw an ad to start an AI agency and I was in the middle of something so I didn't have time to click on it and go through the funnel.
• 3:05
  Speaker 1: But I wonder, is it a skynet takeover machine or what you know what?
• 3:12
  Speaker 1: What is the?
• 3:12
  Speaker 1: What is the purpose of this ai?
• 3:14
  Speaker 1: Is it another you know marketing agency, like, are we going to see another ty lopez video here in my garage?
• 3:20
  Speaker 1: Those are what?
• 3:24
  Speaker 1: Yep, definitely curious about that.
• 3:27
  Speaker 1: So I'll go through that and I'll report my findings in the next.
• 3:34
  Speaker 3: Good good.
• 3:35
  Speaker 1: Cool, cool Guys.
• 3:35
  Speaker 1: We're here today.
• 3:36
  Speaker 1: We're going to talk about big ideas to business model.
• 3:39
  Speaker 1: As entrepreneurs, you know, we all have any number of ideas that come, that come about, but it's one thing to go from idea to turning it into a business and how do you set up that business model.
• 3:51
  Speaker 1: So, really, I guess the first question is you know, eric, with you having been the, you know clean space, was, you know your baby?
• 3:59
  Speaker 1: You know, is your baby?
• 4:00
  Speaker 1: You know you came with the idea, came to you and I want, I want to know, you know you've got the idea.
• 4:07
  Speaker 1: Now You've got your co-founder in place in Arum.
• 4:10
  Speaker 1: Now, what man?
• 4:11
  Speaker 1: What was the first step in bringing it to life?
• 4:15
  Speaker 2: Well, first off, I would say have, keep an idea, like a idea note, like a in your phone or something, or a folder or something like that.
• 4:24
  Speaker 2: Uh, just because I've come up, I've had so many ideas in the past and I've been like, ooh, that would be a really cool app.
• 4:32
  Speaker 2: Ooh, that would be a.
• 4:33
  Speaker 2: Really that's a really crazy idea.
• 4:36
  Speaker 2: And what's cool is that, even though I didn't jump on them at the time, it's cool to see, like four or five years later, the same idea is actually a reality, that someone else picked it up and went and did it.
• 4:51
  Speaker 2: And that's the thing I think you know, ideas aren't necessarily new.
• 4:58
  Speaker 2: Like, just because you have it doesn't mean that someone else hasn't had it.
• 5:02
  Speaker 2: It means they passed on it or haven't come, haven't come across to them yet, and maybe the circumstance is why they passed.
• 5:08
  Speaker 2: So I had had the idea and I had seen it being an opening and not being done, because obviously it's not I, I, I would look for something like that.
• 5:17
  Speaker 2: It wasn't around lexington, so, um, like this could actually be really big.
• 5:22
  Speaker 2: This is, I wonder, like, yeah, so then, of course, getting down, um, and trying to figure out what I'm going to do as I'm door dashing and then the lord telling me I already gave you the idea to go like this is your successful idea.
• 5:40
  Speaker 2: You just go do it like oh yeah, okay.
• 5:42
  Speaker 2: Well then that's what I did head first, no business model.
• 5:47
  Speaker 2: And you dive head first into it and you kind of figure it out as your um, you know, you jump off the cliff and hope that Laura will provide a parachute, or some people jump off to see you falling and jump off with you.
• 6:06
  Speaker 2: So there you go.
• 6:07
  Speaker 2: Maybe we'll all find parachutes together.
• 6:10
  Speaker 2: There we go, but at least we're together holding hands with no parachutes.
• 6:16
  Speaker 2: That's it.
• 6:18
  Speaker 1: That is it.
• 6:19
  Speaker 1: This is where the chaos comes from in the podcast name.
• 6:24
  Speaker 1: So, aaron, you know obviously what were you doing?
• 6:28
  Speaker 1: Because eric was coding, he's building the, the mvp, the alpha version of the clean space app suite.
• 6:34
  Speaker 1: You know what is it that you're doing?
• 6:36
  Speaker 1: During this process, he came to you, yeah, this idea, and you're like sure I'm in, why in?
• 6:40
  Speaker 1: Why not Like, let's go?
• 6:42
  Speaker 3: Yeah, so.
• 6:44
  Speaker 3: So, as you know already, the software is an industry I've not yet I hadn't yet been a part of right, so this is new territory for me.
• 6:52
  Speaker 3: So I was just wanting to come up to speed in terms of what's different here from a traditional business model.
• 6:58
  Speaker 3: How does this entire industry function in its own place?
• 7:01
  Speaker 3: And what I learned very rapidly is that it is an entirely different animal.
• 7:05
  Speaker 3: The metrics by which success in the software realm are quite different.
• 7:10
  Speaker 3: The margins are much, much, much higher than what you're used to seeing in a traditional storefront or service-based business model, and part of that is just the sheer amount of competitiveness in this industry from a global perspective, because software is much more global than a particular service industry may be.
• 7:33
  Speaker 3: That's more locality-based.
• 7:35
  Speaker 3: So I was just trying to come up to speed with that and get to terms with what are the differences here between what I have done in business and what I'm about to get into with Eric and what I need to know.
• 7:46
  Speaker 3: And you never learned quite enough in enough time, but that's what I was busy doing is trying to take a look at that and then also continuing to build relationships in that whole sphere, and that's always been a strength of mine developing good relationships through networking and through providing value in as many ways as I can, and so that's what a lot of my time was spent.
• 8:07
  Speaker 3: It was spent in trying to learn what I could, how this was different from what I'd done in the past, and how can I continue to build relationships in this space so that we have a network to draw on and to build collaborative relationships with, so that we're not completely just the two of us, you know, trying to scrap around on day one.
• 8:26
  Speaker 3: So that was a couple of things kept me busy.
• 8:28
  Speaker 1: Okay, good stuff, good stuff.
• 8:31
  Speaker 1: So for both of you, can you walk us through the process of how you developed the?
• 8:38
  Speaker 1: You know the initial business model, you know what were some ideas that you had and obviously you know I don't want to venture too far into you know the initial business model, you know what were some ideas that you had and obviously you know I don't want to venture too far into you know what's proprietary no-transcript.
• 8:53
  Speaker 3: I have a thought here.
• 8:53
  Speaker 3: Eric's might be a little different.
• 8:55
  Speaker 3: I think a lot of these things.
• 8:57
  Speaker 3: When you talk about an idea to a model, it's generally not something that gets determined overnight.
• 9:04
  Speaker 3: It's not like you have an idea and then all of a sudden it totally flushes out and the next day you have a perfect model.
• 9:09
  Speaker 3: It's actually a continual state of development.
• 9:11
  Speaker 3: So we had revenue streams that we were projecting were going to be a certain way when we first launched.
• 9:18
  Speaker 3: Those got adapted.
• 9:19
  Speaker 3: They're different today than what they initially were.
• 9:22
  Speaker 3: There are always some degree of changes.
• 9:24
  Speaker 3: You go along.
• 9:25
  Speaker 3: So one of the things when you're developing a model you can get an idea and then you're structuring a model based on your best projections of what would make the most sense and what's the most realizable, most attainable.
• 9:37
  Speaker 3: But you have to allow the market to shift that for you as you gain more insight and you release an initial product and maybe the market says, hey, we don't really like this what's called product market fit, which is finding out this is actually what the market's going to buy, regardless of whether or not that's what you initially proposed.
• 9:55
  Speaker 3: So having some degree of flexibility as you get launched and understanding that things may have to be tweaked a little bit along the way.
• 10:02
  Speaker 2: Yeah, I would add on.
• 10:03
  Speaker 2: I would add on to that and say people make a big deal about needing a business model and all and needing to know everything up front and you have to dot all your T's and I's and all that, but in reality you just have to get going and get started and get moving in a direction and, just like Aram said, you have to be willing to uncouple yourself from whatever that direction is and be moved around based off of what you see people want.
• 10:34
  Speaker 2: That's what you learn in e you know this biggest.
• 10:37
  Speaker 2: That's what you learn in e-commerce.
• 10:40
  Speaker 2: When you're doing the e-commerce store or dropshipping, you're always looking at what the trends are and you're always creating a product for the trends at that time, or what you see starting to trend, and so you know you lose a lot, you learn a lot and you're paying for data, and that data is the experience of not knowing, and not knowing is really valuable because you're not going to make the same mistake, which is huge.
• 11:06
  Speaker 1: So, when you, you know, as you talk about that and gathering data, what, what were some of the surprising insights or feedback that you guys received during this phase of developing the business model?
• 11:18
  Speaker 3: trying to put this together, so this might be a discussion we want to have a little bit more depth, maybe down the road, but when putting it together and developing the model is not as tricky as what ended up.
• 11:33
  Speaker 3: I think one of our largest challenges early on was the pivot from a SaaS product that was originally launched into the marketplace realization that we are building today, and the biggest thing there is.
• 11:46
  Speaker 3: You know, we launched the SaaS products because we felt that there was enough of them then.
• 11:51
  Speaker 3: There really is enough of a market opportunity to develop something there.
• 11:56
  Speaker 3: But how quickly the market would be interested in changing what they're using or actually not using to create, you know, to jump on something new, surprised us to some degree.
• 12:09
  Speaker 3: And just that there really wasn't that much interest when we get going back to product market fit, it just wasn't there for what we initially envisioned.
• 12:17
  Speaker 3: So the numbers made sense, the need was there.
• 12:21
  Speaker 3: You could say like there's a theoretical empty space in the market, but if your customers just don't care about that empty space, then you're going to have to move on from it, and so that was an initial challenge that just kind of came head to head with what we had originally proposed, got into and then had to pivot, out of which again worked out because we ended up dealing with a much, much larger, larger market segment when we pivoted, but that's personally, for me, something that was just a good realization.
• 12:53
  Speaker 1: And that kind of goes along with.
• 12:54
  Speaker 1: You know you said that you recognize there's a need in the market and the customers just weren't.
• 13:02
  Speaker 1: It's like opening up a you know a deep fried hamburger stand or something like that next to a vegan community.
• 13:11
  Speaker 1: Like they might need it but they don't really want it.
• 13:14
  Speaker 1: You know they don't care enough and maybe that analogy wasn't the best, but, like you know, it's all right.
• 13:20
  Speaker 1: What would you say?
• 13:23
  Speaker 1: I mean obviously the, the customer base, you know influence, the change to the pivot to the market, from the SaaS to the marketplace and idea and everything.
• 13:36
  Speaker 1: Eric, as far as your original idea for Clean Space, yeah, how closely is the original idea that you had, you know the?
• 13:51
  Speaker 1: You know answer to prayer, download, whatever you want to call it?
• 13:56
  Speaker 1: How closely does that mirror what's going on in the business today?
• 13:59
  Speaker 2: We're getting there.
• 14:00
  Speaker 2: We're on the right direction.
• 14:01
  Speaker 2: It's actually cool because back when we were pivoting into SaaS, I knew that it was not the direction that the company needed to go.
• 14:15
  Speaker 2: We had a lot of people in our network who pushing for for us to explore that and um, and so we did, and it it really goes to show that sometimes you just have to listen to your gut feeling.
• 14:36
  Speaker 2: You have to listen to what you know, despite what everyone else is telling you as a leader, uh, and as the visionary like this is what we need to do, this is where we need to do, this is where we need to go.
• 14:46
  Speaker 2: And sometimes you really do know that and you can't really explain why sometimes.
• 14:50
  Speaker 2: But you know that and it's interesting to see it get proven down the road.
• 14:57
  Speaker 2: But it's also nice because the pivot wasn't necessarily all in vain.
• 15:02
  Speaker 2: We did learn a lot as a team.
• 15:05
  Speaker 2: We learned a lot, we grew, we met a lot of good people.
• 15:08
  Speaker 2: So in that sense I wouldn't say it was the wrong decision.
• 15:16
  Speaker 2: In hindsight you can always say I wish I did this, wish I did that, wish I stuck with my gut feeling.
• 15:20
  Speaker 2: But you can't beat yourself up because you have to remember I did do my best decision-making at that time with the stuff that I had.
• 15:30
  Speaker 2: So you have to treat yourself with like okay, if I was to go back then, I cannot go back then with my knowledge.
• 15:37
  Speaker 2: Now I have to go back then as if I was at the knowledge I had then.
• 15:40
  Speaker 2: Would I have done the same thing?
• 15:41
  Speaker 2: And most of the time your answer would be yes, because we are not intentionally making mistakes, you know.
• 15:48
  Speaker 2: So you don't beat yourself up about it, but you learn from the data.
• 15:52
  Speaker 2: You learn from it.
• 15:53
  Speaker 2: You're like okay, I should have paused a little bit more and figured out why I have this gut feeling and why, like what was I maybe subconsciously seeing, but I couldn't consciously describe or figure that out.
• 16:09
  Speaker 1: And it's you know, one of the great things that I really respect about you, eric, is your ability to if there's an error that's made.
• 16:17
  Speaker 1: I can't recall a time where I've ever seen you shy away from that, and I think that's one of the most refreshing things about working with you, with Aram, is just the fact of like, hey, this didn't work, you know, let's, let's move on, let's move forward, let's keep going Like there's not too much of this, like I'm going to beat myself up and wallow in just this misery of you know, this didn't work.
• 16:40
  Speaker 2: Crap, you know you don't have time to you know you don't have time to do that kind of crap.
• 16:46
  Speaker 2: Other people have that luxury, but entrepreneurs don't.
• 16:50
  Speaker 2: You got to just get back up and get back on the horse.
• 16:54
  Speaker 3: Keep riding.
• 16:57
  Speaker 1: Like Mark Cuban says, you only got to be right once.
• 17:00
  Speaker 2: Yeah, that's right.
• 17:02
  Speaker 1: Okay, what advice would you give to a brand new entrepreneur who has this idea and they're trying to decide what to do?
• 17:11
  Speaker 1: What would you?
• 17:12
  Speaker 1: You know?
• 17:17
  Speaker 2: Go read a book.
• 17:19
  Speaker 1: Any particular book.
• 17:21
  Speaker 2: Well, if you like e-commerce, it's actually a really good one.
• 17:23
  Speaker 2: It's called Zero to a Million in 12 Months Okay.
• 17:30
  Speaker 1: What about you, Eric.
• 17:32
  Speaker 3: I thought Eric was going to reference how to Win at the Sport of Business by Mark Cuban, because I know he likes that one too.
• 17:41
  Speaker 2: That's a good one.
• 17:41
  Speaker 2: He definitely wants to know a little bit more.
• 17:45
  Speaker 3: Yeah, yeah.
• 17:46
  Speaker 3: At the end of the day, you just have to sit down and see if you have a road to implementation as soon as possible, right, so you don't want the theoretical planning stage to be years long, but you do want to sit down enough time to at least map out and say, hey, can we get this thing off the ground, can we get cash flow in a reasonable amount of time and have something that could really at least sustain itself, if it doesn't immediately take off like a rocket ship right away?
• 18:17
  Speaker 3: And just make sure your numbers are in the realm of reality, because I think a lot of people get so excited about a passionate thing that maybe doesn't make any financial sense.
• 18:26
  Speaker 3: So it's fine to be.
• 18:28
  Speaker 3: You want to be passionate about it if you can help it, but you need it to make money more than you need to be passionate about it.
• 18:33
  Speaker 3: So you might not get to do what you want to be passionate about immediately, but just make sure that you're starting something because you believe it'll make money, more so than oh, this is what I want to spend the rest of my life doing, because one will always make you money.
• 18:49
  Speaker 3: The other one might not.
• 18:53
  Speaker 2: So just make sure those are in order, okay.
• 18:55
  Speaker 2: Oh, one other thing to add onto that is, you're probably not passionate about every aspect of business.
• 18:59
  Speaker 2: You don't fool yourself into thinking you are.
• 19:03
  Speaker 3: There's probably one particular or maybe a couple of the things within running a business that you actually find enjoyable, but you're going to have to suck it up and do all the rest of the stuff too.
• 19:16
  Speaker 1: Yep, it's good there, it is All right, fellas Well, I appreciate you.
• 19:19
  Speaker 1: Thank you much.
• 19:20
  Speaker 1: This has been another great episode of Coffee, chaos and Cashflow.