E09 w/ Jon Sturgeon: AI changed his agency's model. Should he grow or sell?

Jason Cohen (00:00)
The star of today's episode of Smart Bear Live is a founder of a multi-million dollar agency who created AI workflows that 10x the output per employee. So he cut his team from 60 to 30 while still growing. Now, a lot of people say they want to do that. He actually cracked it. and so this has brought him to a strategic decision about where to take the company from here. One option is to productize this AI that he's built internally.
Jason Cohen (00:24)
The other option is to scale up his consulting agency in the hopes that someone will want to buy it. But at what valuation? Hmm, probably a bad one. So today we are going to help him sort out which path would be best for him, or maybe find a third option.
Jason Cohen (00:37)
And so who is this we, you might ask? I'm Jason Cohen, known online as Smart Bear. I've built four startups over the last 25 years, two of which are now unicorns. I've bootstrapped, I've raised hundreds of millions of dollars. And relevant to this episode, I've bought companies, sold my own companies.
Jason Cohen (00:52)
I've invested in 60 startups, which have had various outcomes, written hundreds of articles, and recently I published a book called Hidden Multipliers, which are all my best ideas of how to grow your business. But you can look at that later because joining me to help our star founder is the great Jonathan Sturgeon. John runs Dingus and Zazzy so you already know that's gonna be great. A flat rate marketing agency, which also is kind of crazy.
Jason Cohen (01:15)
That he's grown to eight figures with 150 people, the same kind of business as our star founder has, but with more scale, which is again, one of his two strategic options. So welcome, Jon
Jon Sturgeon (01:26)
glad to be here. And by the way, if business doesn't work out for you, you would make a good weather girl. That's good announcing, like or like a a talk show host. Yeah.
Jason Cohen (01:33)
Thank you. I'll I'll take Weather Girl.
Jason Cohen (01:35)
you don't have to prepare as much. So together, John and I are going to help the star of the show, Mario Peshev, with his company DevriX So DevriX started as a WordPress dev shop, but today it helps big private equity owned companies get their finances and data in order, especially right after they've been bought.
Jason Cohen (01:51)
Anyway, Mario, thank you for being vulnerable and opening up your business and even yourself. That is brave and it's generous to the listeners, so we all thank you for that.
Mario Peshev (01:59)
Yeah, absolutely. Thanks for having me. Thanks for spending the time and you know, calling me brave while calling me a super rock star, a startup guru, the
Mario Peshev (02:07)
fixer of private equity around the world. I think we're off to a good start, so I'm already feeling better.
Jason Cohen (02:12)
Nice. Okay, good. So anyway, Mario, perhaps you
Jon Sturgeon (02:14)
Well yeah.
Jason Cohen (02:15)
can kick us off by filling in a little more detail about this strategic crossroads that we're gonna be analyzing today.
Mario Peshev (02:21)
Absolutely. So where do I start? so DevriX started about sixteen years ago. prior to that I I had a couple of years of full time freelancing, so it's been about eighteen years kind of on my own.
Mario Peshev (02:32)
And back then I was still young, I was you know, I I had all of those beliefs in let's say back then technology, open source, pure code, engineering, all that. kind of butterflies in my stomach talking about code and engineering. it was very romantic in a sense, but unfortunately age caught up to me and I had to get slightly wiser and then.
Mario Peshev (02:54)
Definitely older and along the way
Jon Sturgeon (02:55)
Sorry, pause, pause, pause. Sorry, I
Jon Sturgeon (02:57)
gotta ask, what do you mean by age got to you? What does that mean?
Jason Cohen (03:01)
I was gonna say, did life beat the the vision out of you or what?
Mario Peshev (03:05)
yeah, beat the vision. But well well maybe not so much, but being so romantic to be contributing for free and helping everyone and being a great contributor for pro bono and philanthropy and all that stuff. Apparently you have to pay bills and it's not so fun spending over a decade at eighty hour workweeks and not really making a meeting out of that.
Mario Peshev (03:26)
so the reason I'm actually saying that is probably for the first, I don't know, six years of the company's life, it's been more of a kind of hobby project that was led primarily due to a rebellious way of starting a business. So to probably take it a slight step backwards. job, my last two jobs. Yep. All right.
Jason Cohen (03:45)
Well, let's let's let's let's take a step forwards and get to today. So you
Jason Cohen (03:49)
have this business, it's going really well. You've just solved some AI things that other people wish they could solve, and you have this puzzle, the strategic puzzle. You have built a great company, that's for sure. And now you could productize it. You might want to sell the business someday, but that might mean making different decisions today to get it ready for that or make it more attractive or have a higher valuation. Or what? Maybe there's a third option. What is the current puzzle that we're going to be analyzing today?
Mario Peshev (04:11)
Well, if I have to compare to the early days, again, the way I started was starting a business
Jason Cohen (04:17)
Wait a minute.
Jason Cohen (04:18)
What's the current puzzle? Don't compare it to early days. Let's just talk about what you're facing now.
Mario Peshev (04:20)
Current puzzle is well
Mario Peshev (04:24)
the current puzzle is what's the future of the service industry in IT? Should I keep running that as an agency business? Should I productize?
Mario Peshev (04:33)
Should I look into an exit? Should I look into roll up into a private equity? And what is the best option now? as you summed it up at the very beginning, what are the current multipliers? is there a positive way forward? What's going to give the most fuel to the business in the next five years, considering what happened to digital over the past five years?
Jason Cohen (04:51)
So when you're looking at these options, sometimes people are thinking, look, I've been doing this forever. I kind of don't want to still be running this company in five years. Whether it's growing and awesome or not, I just just had kind of had my fill. Or you might say, look, if there's no future and it's gonna die anyway, then obviously I wanna sell it and get the most money I can. But I would rather be running a company in my own company in five years if I could.
Jason Cohen (05:15)
Those aren't the only two choices, but just what is your emotional gut check of which of those two sound right to you just right off the bat.
Mario Peshev (05:23)
If you had asked me three years ago, I'd say I'm going to stay with the company forever. that's definitely not the case right now.
Jason Cohen (05:28)
Okay.
Mario Peshev (05:28)
it it also doesn't mean I'm ready or willing to escape, but I feel there's a ceiling that's being hit right now, and they need an amplifier one way or another. This is why I'm looking into okay, is that amplifier the business holding me back? So I'm spending too much time on
Mario Peshev (05:46)
Project management, account management operations and stuff? Or should I look into a growth investment which is actually going to fuel more capital in the business to productize better or do something else? Should I look into an acquisition that's probably going to utilize the staff the head count better solving more complex problems at a higher scale? And all these questions are: okay, in the era of AI, what we used to do five years ago is no longer relevant.
Jason Cohen (06:09)
So I'm trying to I'm trying to see what the
Jason Cohen (06:10)
answer to my question is. And I think what I'm hearing is, because you went right to solutions again, even that's not what I asked. I think what I'm hearing is if it just keeps going the way it is now, you're not interested. So you need to see a change. And either that change is that you get enough money that you can get out and and go do something that's the real change, or this company changes so significantly, like turns into a product company or dramatically increases its growth rate, or something that's a big enough change that it keeps you interested.
Jason Cohen (06:38)
Is that right? Is that how you're seeing this now personally?
Mario Peshev (06:41)
the business has had its best year over the past twelve months, and if we are just stuck in time at that headcount and revenue and profit margins and everything, I'd be extremely happy in the next 10 years.
Jason Cohen (06:52)
but you you think the industry's dying or going to die thanks to AI or whatever. And so you're like, okay.
Mario Peshev (06:57)
Correct.
Jon Sturgeon (06:57)
Okay.
Jon Sturgeon (06:58)
Okay, I'm gonna jump in. Mario, we're in the same fucking boat. Okay. I literally have a countdown on my phone. I'm gonna sell my company in 334 days. You see that cat who's celebrating? Okay.
Mario Peshev (07:09)
Love it, yeah.
Jon Sturgeon (07:10)
I always play a game where if somebody were to come up to me and give me a giant bag of money, like I what's that number for me to be like just walk away right away? I'm in also in the same boat because I have a productized agency, sure, like the one at Dingus and Zazzy, but
Jon Sturgeon (07:24)
I saw the AI writing on the wall, and I'm like, ten years from now, agencies will not exist. They're gonna be bespoke, very, very bespoke niche agencies with three or four people. And I created a spin-out of my Dingus and Zazzy company, which is a productized IT company called uhoh.com. By the way, in Bulgaria, nobody knows what uh-oh means, but it's like when you drop the soap in prison, you're like, uh-oh. so that's kind of
Jason Cohen (07:47)
That's so funny 'cause
Jason Cohen (07:48)
I thought it was like the ICQ, when you get the chat message.
Jon Sturgeon (07:51)
It's I mean
Jon Sturgeon (07:52)
Americans know what is, but
Jason Cohen (07:54)
Yeah.
Jon Sturgeon (07:54)
in if the then when you go to Europe they're just like, What is this? here's my answer on this. IT as long as there's a human in front of a computer, they're always gonna need help. If humans have been replaced and they're just sitting in a field and they're no longer in front of computers, we're all screwed. So I we maybe we could fight about that, but AI will not replace.
Jon Sturgeon (08:14)
anything in the IT automation, all that kind of stuff. It's just gonna make it better and better. I think what will happen is it'll just drive down the costs. So that's why at uhoh.com, I don't even know what to price it. So I let people pay whatever they think it's worth. And so far it's been working out pretty good. We hit a million ARR since starting it in November. so my question to you is let me let me play that game with you. What's the number that you need to see today for you to be like, yep, I'll take this bag of money and I'm done.
Jon Sturgeon (08:43)
Do you ever play that?
Jon Sturgeon (08:49)
I could tell the answer is no.
Mario Peshev (08:51)
I'm trying to not reveal specifics on any recurring revenue, let's put it this way. because it's in millions
Jason Cohen (08:56)
Well, the question isn't is
Jason Cohen (08:57)
the company worth that or not? The question is, and the way I pose it, I do this all the time, what is the number you need to see in your personal bank account after all taxes and et cetera? So that you would say, yes. And then you can gross up from there things like, well, what would the company have to be worth? And how would I get there? Because that's all true, but it makes the question more complex in a way that's not helpful. So what is the amount of money in your bank account
Jason Cohen (09:20)
after taxes that you would need to see to think I'm now comfortable with that.
Mario Peshev (09:25)
after taxes, net of everything is five million.
Jason Cohen (09:29)
That's not big
Jon Sturgeon (09:29)
US?
Jason Cohen (09:30)
enough probably. I mean I know you're not in the US, but that's probably not right.
Jon Sturgeon (09:35)
But it says walk away money. Like that's if I my number is lower. Like if I have to go through 90 days of MA bullshit
Mario Peshev (09:41)
Yeah, diligence.
Jon Sturgeon (09:42)
or whatever, I will want a bigger number. But if somebody came to me on the street right now and gave me a bag of cash and I didn't have to think about it, my number's lower.
Jason Cohen (09:50)
That's true.
Jon Sturgeon (09:51)
yeah. I I have another
Mario Peshev (09:52)
Yeah.
Jon Sturgeon (09:53)
question for you, Mario. I don't so far, I'm just gonna put you in a box and then if you feel like I'm wrong, then just just let's fight about it.
Jon Sturgeon (10:01)
I do not think you as from what I could tell so far during this conversation, productization is not for you. Because you're somebody who ponders and thinks. The only reason why I'm able to do a a product service is because I'm a dumbass. I don't think. I just do. It's off the shelf. Like I lose so much money from it because a billion dollar c company comes up and they're like, it's a flat rate. Okay. Whereas everybody else would like lick their, you know, they'd be like, my God, look how much money we can get from these guys. It's
Jon Sturgeon (10:31)
A it do you agree with my assessment? Do you are you somebody
Mario Peshev (10:34)
I
Jon Sturgeon (10:35)
that likes to think about things for a long time?
Mario Peshev (10:37)
I I do agree, and I think your business model is smarter, but I'm not smart enough to productize a business model like you do.
Jon Sturgeon (10:44)
No, it's the opposite. You have to be a you have to be dumb enough.
Jason Cohen (10:44)
Wait wait a minute, wait a minute, wait a minute. Let me let me
Jason Cohen (10:46)
I I do I disagree that that that only dumb people can make products.
Jon Sturgeon (10:51)
No, no, no. Productized
Mario Peshev (10:52)
Mm.
Jon Sturgeon (10:53)
service. Productized service that is un
Jason Cohen (10:54)
productice serv is that what you meant, Mario,
Jason Cohen (10:56)
productize service, or did you mean an actual SaaS product?
Mario Peshev (10:58)
it's a productised service due to AI. Yeah. I I don't
Jason Cohen (11:01)
okay.
Mario Peshev (11:03)
yeah.
Jason Cohen (11:03)
And give me an
Jon Sturgeon (11:03)
Yeah, serv.
Jason Cohen (11:03)
example of what that would actually mean. if you were selling me that for twenty seconds in the elevator, what would you say it is?
Mario Peshev (11:08)
absolutely.
Mario Peshev (11:10)
so revenue operations integration for CRMs for mid market businesses in professional services. So it's something that you plug in. Yep, mm-hmm, correct.
Jason Cohen (11:17)
I see. And so you'd get you'd you'd charge me like a flat rate and I get something amazing. And that's because
Jason Cohen (11:21)
you have AI and other things making it efficient for you that you effectively are passing on to me. Gotcha.
Mario Peshev (11:24)
Hm. Correct.
Jason Cohen (11:26)
Okay.
Jon Sturgeon (11:27)
But see, it it'll it'll it'll destroy your smart brain. Now trust me, man, I want to fight you on this. You I could tell that you're too smart for your own good here because I've had many people come up to me and be like, dude, how are you able to do this? How do you deal with scope creep? And I'm like, Scope creep? We're the ones begging our clients to give us more scope so that we become more valuable. It's the complete opposite part of the problem. Like it shouldn't make sense. it's like a gym membership.
Jon Sturgeon (11:51)
Like there's a few meatheads you lose money on, but everybody else like me should go more. Like that's where the money's being made. And by the way, if you go productize, you're not gonna make everyone happy. It's an in and out, it's a turnstile, it's a try it out for a month and see what you think. Whereas you're probably getting people into contracts for longer and creating a scope and the y you know, right now
Jon Sturgeon (12:12)
Your mindset probably like how long does it take you to close a deal right now? From from first conversation to getting money in the bank?
Mario Peshev (12:21)
The sales period has always been long. The average used to be four to six months. In the past two years it's consistently a year.
Jon Sturgeon (12:28)
Okay. So in a productized service, we get one call closes. So our average is about maybe twelve to twenty days where sometimes you talk to a champion and they need to loop in their CEO or whatever, decision maker. but we often get one call closes, like the whole paradigm would need to shift and you would have to have extreme urgency and lots of lots of action.
Jon Sturgeon (12:53)
Does that freak you out or do you get excited about that?
Mario Peshev (12:56)
I often say that we are the ones that invented WordPress retainers back in twenty fifteen. And I'm pretty sure that other people use it or framed it differently, but we just went on back eleven years ago.
Jason Cohen (13:07)
Yeah, but what's the answer to the question?
Mario Peshev (13:09)
It doesn't freak me out.
Mario Peshev (13:11)
It's a good it's a good sales one.
Jason Cohen (13:11)
So here's here's here's one thing that I've that that that
Jon Sturgeon (13:11)
So you yeah.
Jason Cohen (13:13)
w and and John can probably correct me if this is wrong, but when I think of productize service, I think you you had better be doing essentially the same thing every time you do it. Otherwise the product can't implement it. And when you say things like RevOps and integrations, I think, that shit's different every time. Like what's not different, I guess, is the API to talk to segment and the API to talk to Salesforce. Okay, yes, I of course I understand.
Jason Cohen (13:39)
libraries and now AI that helps you do that, that I get. But the details of like what happens when you implement RevOps at a company, isn't that different every time? And therefore, do you really mean it's a fixed rate as opposed to it's productized? Maybe you mean the same thing, but I'm just trying to get at like like to me a productized service would be like I I pump out a website for dentists. Cause guess what? Every dentist's office really does need just the same damn website.
Jason Cohen (14:03)
So sure, I change their name and logo and primary and secondary color and that's it. It's a it's a so I it may still look like a service, but it's a productized service. but man, at scale integrations at corporations with RevOps, that does not sound like cookie cutter, but but maybe you just mean flat rate?
Mario Peshev (14:19)
I generally mean that we can probably triple the revenue with productized and then we can cut the customer.
Jason Cohen (14:23)
But what do you mean by productize?
Jason Cohen (14:24)
Because I d I d it seems like it's not really.
Jon Sturgeon (14:25)
I can answer the question.
Jon Sturgeon (14:27)
I got it.
Mario Peshev (14:27)
Okay. John can probably help me.
Jon Sturgeon (14:29)
Yes. So your logic is not wrong, but the execution is doable because all the RevOps problems are cousins of each other. So yes, in my uhoh.com IT business, no ticket is the same, but all 2FA problems are related. And you start seeing patterns over and over again. You start seeing like login issues, and
Jon Sturgeon (14:50)
One thing that we're doing really interesting for scale, because I don't know anything about IT and I couldn't give a fuck. Like I hate IT. I might as well be owning a pest control business and I hate cockroaches. That's what I'm trying to do. we what we did is we poached from Dingus and Zazzy, by the way. It's like a farm team. It's a great, great idea. and
Jason Cohen (15:08)
I actually have a question about that. so when you said, you can do that in IT, because two factor authentication and password resets, yeah, that's what I'm saying too. Password resets is basically the same. I get that. But when he
Jon Sturgeon (15:18)
Yes, it's just
Jason Cohen (15:19)
says RevOps, and when he says integrations, I'm assuming he means like internal data systems within
Jason Cohen (15:25)
company like their financial systems, their CRM and like that
Jon Sturgeon (15:27)
Yeah.
Jason Cohen (15:28)
does not sound like password resets. That sounds really different.
Jon Sturgeon (15:31)
Well that's because you're probably thinking enterprise and like larger corporations. If you go S B
Jason Cohen (15:35)
Yeah, 'cause PE
Jason Cohen (15:36)
PE backed companies that are let's say at 150 million in ARR. So it's not super enterprise, but it's big enough that that's a real project.
Jon Sturgeon (15:42)
Sure, yeah. Like we're going after like small businesses that don't even know they have IT problems. That's literally our t
Jason Cohen (15:46)
so you're saying
Jason Cohen (15:47)
he could do this, but he'd have to go after small companies if he were to do it.
Jon Sturgeon (15:49)
S yeah, not upstream.
Jon Sturgeon (15:52)
so what we learned, so Jason brought up a really good point he was saying, well, hey, if you're doing RevOps for a hundred million dollar company, that cannot be productized, and I agree. Like we actively turn away larger, more complex things. There's way bigger TAM downstream with smaller businesses.
Jon Sturgeon (16:10)
Who are throw their hands up and be like, I don't know how to make a HubSpot dashboard. Like, can you help me? and then it becomes a more repeatable pattern, but you're never seeing the same thing twice, but you're seeing the the relative closeness to each problem. And the point I was making before the disappearing was that we poach a player talent. And an A player in my book means I could put you in a cement factory and I and just tell you, just pretend you work here, dude. And the answer is
Jon Sturgeon (16:39)
You're fucking awesome at a cement factory. It doesn't matter. You can be ice cream store, IT company, whatever. They just know how to solve their problems that are in front of them. And then those people can do 80% of whatever the fuck you call it, whether it's RevOps, IT, you know, you know, AI, all that stuff. It's it's just a talent problem at that point. So, but to wrap up the TLDR is that yes, productization, if you were to do it, it needs to be smaller
Jon Sturgeon (17:05)
businesses who where you talk to the decision maker right away and they're involved. They're they're in the business. If you're gonna go upstream and and and do long deals like that, I would never productize. Bad idea.
Mario Peshev (17:17)
Okay,
Mario Peshev (17:18)
if we assume that productized is low cost and easy entry and quick sale I'd say that it's not productized it could be a pilot or highly automated fixed fee that's closing better and and easier and still increasing revenue. Does that make sense? I'm probably just miscommunicating it.
Jon Sturgeon (17:35)
It does on paper.
Jason Cohen (17:35)
Yeah.
Jon Sturgeon (17:36)
It does on paper, but in execution I would not bet on that.
Jason Cohen (17:40)
But in that case, you've just downgraded you're just saying I'm running the same business. but my big idea is the pilots could be better.
Jason Cohen (17:47)
And and I would
Mario Peshev (17:47)
Duh.
Jason Cohen (17:47)
say, sure, I mean better pilots sound better to me. I don't know. but we've downgraded the idea.
Mario Peshev (17:53)
I think one of the risks and what John also said, the industry is dying and the churn is up and Jason, as you say, the churn is constant, but then the marketing cost is significantly higher. I think we're in that.
Mario Peshev (18:06)
side of the equation right now. And the problem with that is if the pipeline is dry for the most part, it's a matter of time for the churn to catch up and just eat up the profits. So having the pilot
Jon Sturgeon (18:16)
Do you have a sales team?
Mario Peshev (18:17)
yes, but it's not working very effectively over the past year and a half.
Jon Sturgeon (18:23)
How many people are on your sales team?
Mario Peshev (18:25)
There's one full time and two contracts in the States.
Jon Sturgeon (18:29)
What are their roles? Like what are their titles? Is it like a
Mario Peshev (18:31)
BDRs.
Mario Peshev (18:32)
One is BDR and one is fractional growth advisor and the other one is just a partner who's doing sales.
Jon Sturgeon (18:38)
Okay. if you were to be honest with yourself, like are you doing everything you can in that department or is it just treading water?
Mario Peshev (18:45)
The deals that we have nowadays, specifically moving up market or having moved up market over the past few years are generally larger, generally don't tend to close the same way as they used to before. And if you're asking
Jon Sturgeon (18:55)
Sorry, dude.
Mario Peshev (18:57)
me, if I do that, well, in two weeks, I'm flying to a conference in the States.
Jason Cohen (18:59)
Ma Mario, you're you're you're s you're skipping
Jon Sturgeon (19:00)
No.
Jason Cohen (19:01)
the question which which makes me
Jon Sturgeon (19:02)
Yeah.
Jason Cohen (19:02)
worried for the answer. The question is, are you doing everything you can? And I would add, are the people on that team crushing it? yes or no?
Jon Sturgeon (19:09)
Yeah. You make a good politician though.
Jason Cohen (19:12)
Yes.
Mario Peshev (19:13)
I mean,
Mario Peshev (19:13)
I feel there's just a need for a lot more context, but the question is hardly crushing it. No. And am I?
Jon Sturgeon (19:18)
No, it's a f no, it there is no context, man.
Jon Sturgeon (19:20)
I could tell you right away, my sales team fucking rules, dude. Like, are you proud?
Jon Sturgeon (19:25)
Are you are you proud of them?
Jason Cohen (19:27)
Yeah, yeah,
Jason Cohen (19:27)
Mario, I think, I think, you know, I think John put his finger on it earlier, you think really hard about stuff, but what that means is you're not thinking clearly at a high level, at a macro level, about what's going on. Because every time you're like, Well, let me give you the full history, let me think about context. Now, you are right that when it comes to implementation then all the details do matter because you got to get that right.
Jason Cohen (19:49)
But when it comes to these big questions, how much money do you want in the bank to be happy? What do you want from this company? Is your sales team doing well? Where's the industry going? If you turn to, well, first we need 30 minutes of context and I can't really answer it, what that's doing is clouding your vision of what is going on. So the answer is sales are down. You only have one and a half people working on it. So that's not going well. That's it.
Jason Cohen (20:16)
That's it. I would also guess, and and John's gonna correct me here now, but I would think a consulting company with 30 to 35 people, having one and a half in sales to me sounds like not nearly enough. And I don't know, you know, are they good at their job or not? That I have no idea. But I j just quantity doesn't sound right to me, but maybe maybe I'm wrong. But John, isn't that the wrong ratio?
Jon Sturgeon (20:35)
It is the wrong ratio, if you have a growth mindset and you're like, I want to build an empire. if it's a like I I don't think you'd be here if this was the case, but if it's a lifestyle business, which by the way is super commendable, like that's great. Like if you were just on the beach all day and and you just kept status quo, no problem. That number makes sense. But if you're looking to scale and like get growth, that is not enough people. the word contract or two, do you mean that in the legal sense or are they literally working for other people
Mario Peshev (21:02)
One is full
Jon Sturgeon (21:03)
yeah.
Mario Peshev (21:03)
time and two are contractors working for other people too. So essentially they're fractional. Yes.
Jon Sturgeon (21:09)
Yeah, yeah, yeah. So right away they're probably gaming the system a little bit. I don't know if they're gonna watch this episode, but I I hear that and I'm like, man, anytime somebody is like partial or fractional, in my opinion, like I hate that because they find ways to like make you feel like things are happening, but at the end of the day, they don't belong to you. but yes, the team sales
Jason Cohen (21:25)
So so that may be, but
Jason Cohen (21:26)
even if they're great, the fact that they're not in the business, their head's not in the business all day, they're not obsessed with it, they're not waking up at two in the morning thinking about, wait, you know what else we could do? they don't have the same kind of I was gonna say ownership, but I don't mean literally equity, although could be that too, but I d I didn't mean that. Just but that that feeling of like I'm here. Like this is what I'm doing now is I'm at this company, right? And my my career and and even like my pride in my own work.
Jason Cohen (21:48)
And and again, then coming coming on to you, since it's hard to talk about people who aren't here anyway. you aren't doing as much as you can in sales if you have one full-time person and a couple of halfys. Well, that's clearly not all you could do. right? besides
Jon Sturgeon (22:01)
Yeah. But it's also
Jon Sturgeon (22:03)
it's worth taking a pit stop to being like, dude, you built something insane, like awesome, but it's like, you know, do you want more? If so, then you're gonna need to up that headcount, get a manager who knows like who can manage salespeople. And if you were to go productized, you would need to look in the mirror and be like, How do I close a deal today? And and and then
Jon Sturgeon (22:22)
get pissed off when a deal takes longer than ten days to close and be like, why the fuck? What do you mean you need to talk to somebody? It's like there's like did I explain it wrong? Whereas your current mindset is you're probably okay with a deal taking six months to close because that's been the norm, right?
Mario Peshev (22:38)
Hmm? Yeah, that's good.
Jon Sturgeon (22:39)
Do you get excited?
Jon Sturgeon (22:40)
Do you get excited about dude imagine you could close a deal a day and maybe the money's less, but there's like momentum. Does that make you pumped up?
Mario Peshev (22:48)
Not necessarily.
Jon Sturgeon (22:50)
Okay, then we we're different ball games then. And why is that? I wanna know.
Mario Peshev (22:52)
I mean, it sounds great.
Jason Cohen (22:53)
That's that's awesome.
Jason Cohen (22:54)
By the way, that's that's a fantastic
Mario Peshev (22:55)
It sounds great, but...
Jason Cohen (22:56)
realization. that's really great. And you answered it, you thought about your feelings and you're just like that, that's wonderful.
Mario Peshev (23:02)
I mean,
Mario Peshev (23:03)
it sounds great, but I have to provision it with people. So that it doesn't sound great if I have to spend 95 % of my time on hiring. there's that.
Jason Cohen (23:10)
Mm.
Jon Sturgeon (23:10)
Well
Jon Sturgeon (23:10)
no, no no dude, it's twenty twenty six. Are you kidding me? we're hiring like so he mentioned that we have a hundred and fifty people. That was at our peak. Like we're down to like sixty, just like you. Everybody's smart that's doing that is replacing people with people who know how to use Claude. So it doesn't necessarily mean that you have to do one for one headcount and and blow it up that way. if it had to, I can relate to the fact that working with that many people sucks ass.
Mario Peshev (23:34)
Well, that's why I need more time for context. Am I excited to close more deals and, you know, just win in the game of business? Absolutely. Fucking literally. Right. Yeah. Do I want to add more
Jon Sturgeon (23:44)
Fuck yeah, dude.
Mario Peshev (23:46)
Opex and just more tiers and layers and all of the bloat and corporate shit? No. So if, if, yeah.
Jon Sturgeon (23:51)
But you know what, dude? you know
Jon Sturgeon (23:52)
what I hear, dude, is is like you you need an ops person. Do you have an ops person? I dude, I don't even have an email account. I don't do anything. I don't
Mario Peshev (23:59)
I have.
Jason Cohen (23:59)
so funny.
Jon Sturgeon (24:00)
do anything in the business. smarter people than me are in the business running those headaches. And they like that shit. And I'm like, cool. I'd never want to hear about it again. So I can go talk to people and be on a podcast. So is that with that many people? Like, do you have ops people where you can be like, I hate this, you deal with this.
Mario Peshev (24:17)
I too much in the weeds.
Jason Cohen (24:19)
Yeah, I mean
Jon Sturgeon (24:20)
Yes.
Jason Cohen (24:20)
he doesn't have a sales team, so it it's very unlikely to have an ops person, right?
Jon Sturgeon (24:24)
Which by the way,
Jon Sturgeon (24:24)
we were having a bit of M&A discussions at the beginning of this. Maybe what like no one's gonna buy you if you're a key man, right? so that like I got a I got an MA advisor and he's basically my business dad. I talk to him all the time. and his name's
Mario Peshev (24:37)
and stuff.
Jon Sturgeon (24:38)
Dan Skoles, by the way. Shout out if anybody's watching. I fucking love this guy. And he helped me get to this point. Like I had a mentor who was like, Why are you doing this? This is dumb. Like, go do something else and hire somebody and move out.
Jon Sturgeon (24:51)
I removed myself from the weeds. And now if anybody were to give me a bag of cash, I'm like, yeah, I don't even work in the business. I'm I'm not there. Everybody's is running it. So does that make you excited? So you could focus on blowing up the business and not dealing with the ops and the people?
Jon Sturgeon (25:08)
considered getting a
Jason Cohen (25:08)
It's profitable, right?
Mario Peshev (25:09)
Well, it's over half a million per year, but it's less than a
Jason Cohen (25:14)
I'm just I'm just thinking how
Mario Peshev (25:14)
investments in the business.
Jason Cohen (25:15)
much we have to play with. so, you know, ideally investing in sales results in growth, and therefore you get it back just not immediately. but ops, you could afford easily to hire a good ops person, especially at this size. You know, a COO at a thousand people, that's expensive. But a person who can help run a 30 to 60 person agency, because remember when you hire
Jason Cohen (25:38)
at the executive level you're thinking, let's say two years in the future, not too far ahead, but you know, if they're gonna get outscaled in six months, then that's not a good hire, right? that's that you can absolutely do.
Jon Sturgeon (25:49)
Even just elevating somebody you have now, you gotta have
Jason Cohen (25:51)
Yeah.
Jon Sturgeon (25:51)
awesome A players that can do this right now. Does anybody come to mind?
Mario Peshev (25:56)
It does, but I'm not sure what's the playbook for them. Like what should I hand them to you? Okay, this is your mission for the next quarter or two.
Jon Sturgeon (26:02)
If they're if
Jon Sturgeon (26:03)
they are actual A players, you will say, I hate dealing with people, you deal with people from now on, and then you walk away and never
Jason Cohen (26:08)
Yeah, no, it's it yeah,
Jason Cohen (26:10)
that that that that's not yes, but there are a players who don't have the ability to simply by themselves learn on the job how to be a COO when you're not gonna tell them either. And when you give them no support like that, there are some people who will figure it out, but even then they're gonna mess up
Jon Sturgeon (26:25)
We we just have a different definition of
Jason Cohen (26:27)
a whole bunch of stuff that's preventable. And also you might actually just be setting them up to fail by just putting them somewhere that where they
Jason Cohen (26:34)
They can't do it and they're not getting any direction. So there's lots of solutions though. You can have coaches and things from the outside, which do help them. And then this can be the greatest thing ever because they have all the they have all the information about and culture and so forth about the company, but now they're getting this this coaching from someone who really can help them become great. And then you help them transform their career. my gosh, everything's great. So that's possible. And it is also possible that you want to hire someone, although it's a it's a tricky and and almost dangerous hire when they're when they're over people. But
Jason Cohen (27:04)
Right now, if nobody is is capable of that, then the whole company is suffering, including you. That's no good. Somehow or another, that's gotta get fixed.
Jon Sturgeon (27:13)
Jason, I wanna jump in and just say that we probably have a different definition of a player. Let's call them intrapreneurs then. 'Cause that's what I'm thinking of. Those these are people. Yeah.
Jason Cohen (27:21)
No, I I understand, but but
Jason Cohen (27:23)
what what I've experienced is sometimes that works. But even when that's the case, since they've never done it before, they're gonna make lots of avoidable errors. They're gonna
Jon Sturgeon (27:32)
Yes.
Jason Cohen (27:32)
mess up teams. Good people will leave because they did something. We we won't have structured some some systems like like sales. They've never built a sales team, neither have you. Okay, well,
Jon Sturgeon (27:40)
Mm-hmm. Yeah.
Jason Cohen (27:42)
they may be entrepreneurs, but that does not mean they're gonna build the sales team right. But someone who has built a sales team could at least get it, let's say 70% right.
Jason Cohen (27:50)
whereas this person's gonna get 20% right and and you're gonna lose a year, piss off good people because meanwhile they're just dicking around. And so they might be entrepreneurs, but if there's no support for them at all, that actually can take a long time and not be a good situation. Sometimes it does work out. Like I'm not I'm not trying to be pessimistic necessarily, but that kind of thing really can harm teams as well.
Jon Sturgeon (28:13)
Yes, that is I I can say from personal experience running these businesses, b again, I'm not joking when I say like I'm a dumbass, like I'm a street smart dumbass. I am a churn factory because everything that Jason talked about, you should listen to him. my mentor is always being like, dude, use a recruiter and I'm just like, No man, I'm just gonna go fast, I'm gonna do this now. th so there are certain business things that I ignore for speed, but everything he said sounded really smart and I would do that instead.
Jon Sturgeon (28:37)
But for me writing
Jason Cohen (28:37)
I mean, if people are churning
Jason Cohen (28:38)
out, that's not only inefficient, which it is, but just on a human level, you're losing so much time. And it's not good for the whole org. It's not good for individual humans, it's not good for your sanity, 'cause you're constantly dealing with you know, having to get rid of somebody. And I guess you can hire someone else to to deal with that, but it's still having to be dealt with. It's not healthy.
Jon Sturgeon (28:59)
Correct. But it again, this is my anecdotal mode of operation. I'm getting better at it though, and now in my new company, uhoh.com, I have an actual like operations co founder, Chad Todd. I don't know if you ever met that guy in Hampton. And he's the yin to my yang. I'm like, holy shit, yes, okay. You know, so f yeah yeah.
Jason Cohen (29:20)
Well, that's what I'm saying too. You need someone who is
Jason Cohen (29:22)
at that level so that rather than the blind leading the blind, you are elevating the abilities and capabilities of the whole organization by bringing in someone who will do that. if there's someone who's ready, that's even better. So I agree with that. But if it's like, well, nobody knows how to do any of this, it's like, all right, well, elevating someone who doesn't know isn't better than you doing it when you don't know.
Jason Cohen (29:44)
Go for it.
Jon Sturgeon (29:44)
All right, Mario,
Jon Sturgeon (29:44)
I have I have more questions. You ready? Prepare your butthole for this one. You ready?
Mario Peshev (29:48)
Prepare
Mario Peshev (29:48)
for brevity, I answered in three steps,
Jason Cohen (29:49)
Pucker up.
Mario Peshev (29:50)
almost like a prompt.
Jon Sturgeon (29:52)
Dude, dude, I really admire you for the fact that you're like you're able to just adapt 'cause yeah, now it's it's easier to have the conversation. so right now, if your business disappears tomorrow, are your clients gonna be really, really, really sad without you?
Mario Peshev (30:08)
A third of them, yes.
Jon Sturgeon (30:10)
How do you feel about that? Now you could talk about your feelings.
Mario Peshev (30:13)
I always feel cool when that happens. I love the dependency. This means that we're doing something right.
Jason Cohen (30:18)
What is it about those
Jon Sturgeon (30:19)
Do you
Jason Cohen (30:19)
third that's different from the other two thirds that makes them feel that way?
Mario Peshev (30:24)
They are our ICP and we have historical clients who are small, small contracts, more businesses, more problems.
Jon Sturgeon (30:32)
So when you're down
Jason Cohen (30:32)
And and the ICP
Jason Cohen (30:33)
is what?
Mario Peshev (30:34)
The the past two to three years is lower mid-market, usually private equity owned, not necessarily, $50 to $600 million revenue.
Jason Cohen (30:43)
Okay. Sorry, John, go for it.
Jon Sturgeon (30:45)
are you guys doing NPS scoring with your like net promoter stuff?
Mario Peshev (30:49)
Yes, annually.
Jon Sturgeon (30:51)
What's the what's the number?
Mario Peshev (30:53)
It's 90.
Jon Sturgeon (30:55)
Pretty good. What do you think, Jason?
Jason Cohen (30:58)
I don't believe in NPS. I have data from WP Engine showing that NPS is horseshit. I think one of the problems is that once you know it's being measured or how it's being measured, then it doesn't mean anything anymore. People know what this what the zero to ten question is. So I think it ruins it. And then the other thing we found is that NPS isn't correlated with anything we cared about. For example, you might assume NPS is correlated with retention.
Jason Cohen (31:20)
And we found that there's zero correlation between NPS and retention. It's just as likely that a t NPS 10 or 100, is going to churn in the next year as someone who did a two, at least for us. So I can believe that there are markets and businesses where it's meaningful.
Mario Peshev (31:34)
I think it's just personality. If someone's grumpy, they're doing, you know, six out of 10.
Jason Cohen (31:38)
Yeah.
Mario Peshev (31:39)
If they're a butterfly, they're doing 10 out of 10, whatever we do.
Jon Sturgeon (31:42)
I have a question for Jason. Mario and I both have service businesses. I would argue that doing something versus nothing for an NPS is worth it, but what what would you Yeah, exactly. What
Jason Cohen (31:51)
Yeah, just not NPS Just not NPS
Jon Sturgeon (31:54)
what's what's your alternative?
Jason Cohen (31:55)
Yeah, yeah. So so there's there's various things. I'm sure all three of us have been to Heathrow and you see those buttons with the happy, medium, and sad faces that you push, because obviously you don't need to know language to do that, and we all understand what it's asking. Without context, right, Mario? those actually are correlated. when people have done stuff in things like tech support and done just like happy, medium, and sad face.
Jason Cohen (32:15)
that is generally correlated with things like retention and loyalty. there's other types of metrics that turn out to be correlated with it. For example, in service, okay, this is a little bit of a of a sidebar, but it's super interesting and and people don't know it. And there's literally millions of data points to demonstrate what I'm about to say. There's a whole book where they wrote about this that maybe I'll put in the show notes.
Jason Cohen (32:37)
If someone calls into tech support and they get their question answered quickly and accurately, then you ask them like, How was your support experience? They almost always say, Great, in whatever way you're gonna measure that. So you say, Okay, this is good, right? Then and two hours later they call back. They have another problem. So they go through again, question answered quickly, they're happy, and again they'll say they're happy. That experience that I just said is correlated with someone who's gonna leave, gonna cancel.
Jason Cohen (33:03)
And the reason is that they're not actually being successful, even though they're happy with the service, and in a very real, objective sense, the service is great. This is often called the XY problem. Someone called up asking for problem X, but the real problem was Y, but you didn't dig in to find out. And so they're just scattering around the problems that are not the real problem. Instead, suppose they called up and they said, you know, I can't do X, and they're like, what are you trying to do here? Well, I'm trying to set up my account for the first time.
Jason Cohen (33:31)
And they're stuck on like one question in the form or whatever. okay, let me just stay on the phone with you until you get this set up. In other words, let me actually fix the root issue or solve the real thing. Now that means they're on the phone for a lot longer. So that means their efficiency metrics look worse. Right. And it seems like this is taking a long time, right? Uh-oh. And anyway, so they go through all that. Now it's an hour later they get
Jon Sturgeon (33:48)
Dot com
Jason Cohen (33:50)
off the phone. The person is completely successful and onboarded. And guess what?
Jason Cohen (33:54)
Now There's a 10-year LTV on this customer, right? And so we would call that transactional NPS or a transactional metric of how did you do those are useful because we all know there's support reps that get high transactional satisfaction, support reps that get low, and we don't want support reps that get low transactional satisfaction. So it's not that those those kind of metrics have no meaning. But if we're going to these things like NPS is purported to do, which is how's my relationship.
Jason Cohen (34:18)
What what does this person really think about my company and my product? And you might say, Am I am I going to be loyal? Then getting into these other notions of like what actually makes them successful, what actually makes them happy is is good. I would also say you have to separate the issue of a transactional feeling, like, hey, how is that support experience? Or a random survey you just send out, which, as you say, is gonna be subject to the whims how they're feeling a day. That means it's not good data.
Jason Cohen (34:45)
versus a real relationship question. Let's sit down and really talk about how things are going. So rather than having one number which you're hoping sums up how it's going, which it probably no number it probably does, if you were to sit down with customers quarterly or annually or whatever and actually have a conversation, which is not one number, okay. and especially if that conversation were structured
Jason Cohen (35:05)
You'd probably have a great idea about where everyone stands, what you might be able to do next. There's a new thing you could tackle for them. I mean, half of it could be a sales conversation, actually, but okay. then you probably really understand what's going on.
Jason Cohen (35:17)
So I know I've just gone on on this rant, but I find it's it's fascinating and and I almost no one has heard of this stuff. So I think it's useful. Anyway,
Jon Sturgeon (35:23)
Yeah.
Jason Cohen (35:24)
end of rant.
Mario Peshev (35:24)
It's good, yeah.
Mario Peshev (35:25)
It's good, it's good. Yeah. Thanks for sharing.
Jon Sturgeon (35:25)
No, I I I just
Jon Sturgeon (35:27)
I just remembered that you're the guy that wrote that book that I listened to recently. And I was like, yeah, this guy's
Jason Cohen (35:31)
Ha ha ha.
Jon Sturgeon (35:32)
smart. Mario,
Jason Cohen (35:33)
Right.
Jon Sturgeon (35:33)
I have another thing that we did as a productized service with lots of churn, by the way.
Jon Sturgeon (35:38)
we invented a a tool called the minority report based on the movie. Because we're wait, if they if Tom Cruise can predict crime before it happens, can we predict churn? And all of our data comes through Claude. There's a vibe coded dashboard and it just looks for certain words in and out. So for example, when an account manager speaks to a client, Claude scores the conversation and says, Hey
Jon Sturgeon (36:03)
If you were a client, would you feel like this is a competent professional, whatever, all this shit? And then You see the churn happen like miles away now versus just getting a surprise email. But that is another thing too. if you go productize, I would say you're gonna need to get in bed with churn even more because it's fast in and fast out. so I yeah, well, how do you feel about that?
Mario Peshev (36:25)
I think we largely ruled out the traditional productized approach. What I like about Dingus is the fixed fee retainer idea. Like you just pay one flat fee or whatever, one, two, three, however many you have, and then you get everything sorted and that's pretty much it. That simplified pricing to get in is great. I care less about the productized approach other than just increasing profitability, efficiency and all that.
Jon Sturgeon (36:50)
Us, you and me, okay, being in this like we have to be honest with ourselves and say nothing's happening in the industry right now. The only thing that is happening is that people's expectations are getting higher. So my if my churn is going up, it's because my company's not keeping up with people's expectations now. Like now people think they're experts, they're going to
Jon Sturgeon (37:11)
the AI and asking AI themselves and it's raising the bar. Your pipeline is dry. Mine is drier too. And the reason why is because people are pausing their decisions only to ask themselves, can I do this with AI? It's not that they're actually replacing us with AI yet. They're just asking that, you know, like they're saying, hey, let me just pause right now and just see if I could just do this myself. Do you agree with that?
Mario Peshev (37:34)
So there's definitely an attempt to use AI for everything. However, we also do see that we no longer have content writers on staff for the past three years. We no longer have full-time designers on staff. The website of the process.
Mario Peshev (37:49)
60 % of the time is now going through a client passing a lovable prototype, an interactive one, and asking us to integrate the rest. So the flow has changed, the number of steps going into the process changed. How much Gemini or anything else is used in the process changed. SOPs have changed with, you see stuff that Claude produced and then the client wants a 90 % Core Web Vitals or whatever it is by default.
Jon Sturgeon (38:11)
Yeah, you're you're
Jon Sturgeon (38:13)
in the weeds, dude. I I so the c the question is, do you agree that it's on us as agency owners to get better in order to not blame churn on the industry? Like it's our our fault, right?
Mario Peshev (38:27)
Yes, and what you said a little earlier is agencies are probably going to be three to four people. I'm not sure what's the future of an agency with 40 people. This is the big question mark.
Jon Sturgeon (38:35)
Talking about like 10 years
Jon Sturgeon (38:36)
though, like it it it seems crazy to me that there would be giant agencies in the future, yes. But for the next five years, like, well, no, we're still we're still gonna exist, we just have to get better and better and better in order to retain. But the expectations are just getting higher because they're comparing human labor, the agency, with agent, which is four cents per prompt or whatever, probably cheaper than that.
Jon Sturgeon (38:58)
So that I think it's on us to to not look at the industry and be like, there you know, there's a recession or whatever. No, no, it's it's like it's us. Like we're just not competing, like we're not we're not getting better fast enough is is what I I s the way I see it.
Mario Peshev (39:13)
I agree with you with regards to myself.
Mario Peshev (39:17)
the two other managers and the highest profile, the level under us, the directors, right? So the top performers, A levels, 20 years of experience, all of that, 100 % correct. What I feel is that the old agency model or the business process outsourcing model or body shop leasing model is over because previously you used to pay for people clicking buttons and filling out forms and copying pages and stuff. Now this is no longer relevant, which means
Mario Peshev (39:47)
that every single person you hire or a contractor or an agency, you're only asking for the top senior persona, which is a different game than what it used to be five years ago.
Jon Sturgeon (39:57)
I agree. I agree.
Mario Peshev (39:59)
And since it's a different
Mario Peshev (40:00)
game, it runs by different economics, right? Your margins are not based on two seniors, two mid levels and 10 juniors for a project. They're based on three super seniors, architects doing all of the heavy lifting or member of IT staff or whatever it's in open AI.
Jon Sturgeon (40:15)
Yes. My my
Jon Sturgeon (40:18)
profit is soaring, my headcount is going down, the what I'm paying people is going way up, and my revenue is
Mario Peshev (40:24)
Correct. Exactly.
Jon Sturgeon (40:25)
slightly going down, not in my IT company, but in in Dingus and Zazi, because it's marketing. It's like like if a guy can like think that he can use AI, he will pause his decision and try to figure it out and
Jon Sturgeon (40:41)
We do get a lot of people though that come and they're like, We tried AI, it's not for us. Like, can you do figure this out? You still need a air traffic controller, like to to orchestrate all these th moving pieces that will not talk to each other for years. You know? So I still see there like the agency is like a lot of people are running away from it and I'm like, let's run towards it faster. But it does require, you know.
Jason Cohen (41:03)
Since we're talking about the industry,
Jason Cohen (41:04)
let me ask an outsider dumb question, which is I've seen a lot of people advise agencies for decades, you're not selling your time, your selling the outcomes. And so as long as your marketing agency creates leads, that's the outcome. As long as your engineering outsourcing team creates software, that's the outcome. And so are we saying
Jason Cohen (41:24)
That was never quite true.
Jon Sturgeon (41:25)
No, no, it's it's absolutely true. And like we have this mantra at uhoh.com where anybody could solve a ticket, but not everybody can make you feel good about how the ticket was solved during the process. And it's about the human interaction and the fun and the the the the how quick we are and how quick witted we are. But on the marketing side, this is the biggest age-old question. What's my ROI for signing up to you? And a lot of the stuff that happens in marketing, in AI consulting.
Jon Sturgeon (41:53)
A lot of it is the digital equivalent to putting your pants on. So what's the ROI of putting your pants on every morning? Technically there is none, but you gotta do it. So you know, it's it's part of existence. I think what's changing now is that like going back to the the industry question, it's like people just have a higher expectation and a higher
Jon Sturgeon (42:13)
demand because they're comparing something with AI and getting well presented things and way better than humans can. So they're just questioning everything and wondering if they should continue, you know?
Mario Peshev (42:24)
The nature of the business is different and how long it takes to deliver something is different. The level of creativity or artisanship or so is different, which means the specific people are not in. The amount of experience it takes to compete with AI is different, which means that we need seniors, but there are no juniors to enter the door. And this is why it's a mix of things transforming the ecosystem first place.
Jason Cohen (42:45)
But see,
Jason Cohen (42:45)
if it was always about the outcome, and if a company can trade 30K a month for an outcome in marketing, an outcome in engineering, outcome in finance, then why don't they still want that same outcome for that same money? Is it because they feel like they can do it themselves or they they think they might be able to do themselves until they they find out whether or not they actually can use AI because most of them can't.
Jason Cohen (43:05)
It it it it is like in other words, it's perception maybe, because if it's outcome based, who gives a crap whether you're efficient or not, you're using AI or not, they're using AI or not? Like who cares? Why aren't they still just paying for the outcome if that's the whole pitch?
Jon Sturgeon (43:18)
Because an alien came down from Earth, intelligent
Jason Cohen (43:21)
Yeah.
Jon Sturgeon (43:21)
life has showed up in front of us. So everybody's wondering if this alien can help them out instead of hiring us. It's the it's the hope.
Jason Cohen (43:28)
Right, okay. So they have to find out and maybe
Jason Cohen (43:29)
they do and maybe they don't, but they have to find out meanwhile they're not a customer.
Jon Sturgeon (43:34)
Cor yeah, just the the fact that somebody is thinking about it means they're not putting the money down right away to be like, Yes, let's do this. Like, you know.
Jason Cohen (43:39)
Yeah. Now now if if in the long
Jason Cohen (43:41)
run we feel like most of them will fail, which I do. Like most organizations are pretty bad. So most of them will
Jon Sturgeon (43:46)
Yes. That's why
Jason Cohen (43:47)
are not going to succeed. So will that mean that like on the long run they'll still be customers? We're just in this weird blip where so many people think they can who ultimately won't. They will become customers, they're just delayed by a year or two because they're in this period of having to figure out for themselves that they're incompetent. Or
Jason Cohen (44:02)
Do we think like no AI is improving so fast that indeed, as incompetent as they may be, they will in fact do better than you? And so it's over.
Mario Peshev (44:12)
Jason, what we see is that things are moving down market, meaning that every three to four years, we are just jumping to a next tier of customers because the problems are getting simplified through either tooling or now AI.
Mario Peshev (44:26)
What do I mean here before WordPress? You you had to build by hand or start from scratch or so. Then after WordPress, you have MailChimp and you have landing page builders and stuff. So part of the work is getting compressed. Smaller businesses are doing more do it yourself. Larger businesses are now going downstream and then you're meeting in the middle. So we just keep pushing for, we started working with SMBs, mom and pop shops, then businesses of one to three million, then three to 10 million, 10 to 30 million. Now it's, know, 50 to 500 million. And if it keeps going this
Mario Peshev (44:55)
we're still alive, in five years we're probably going to have to work with businesses a billion or more because of all these automations and operational efficiencies.
Jason Cohen (45:04)
Maybe, but there could be a state change here where the company is big enough and capable enough that they are going to have their in-house teams. And again, maybe those teams will be successful, maybe not, but whatever. They're just gonna do it. They're just at a scale where they're going to invest in that as opposed to outsource it. That may be wrong. I may be wrong. I'm just saying like it's possible that that that you don't go up market forever because things do change, maybe not every order of magnitude, but let's just roughly say that for fun. And so suddenly it can just be a different system and and the progression stops.
Jon Sturgeon (45:33)
Yeah,
Jon Sturgeon (45:33)
the complexity. I I agree with the way you were presenting that, Mario. It's things are just getting less and less complicated. So we were WP Engine clients, then Webflow came along and we switched. And now these Gen Z kids are vibe coding websites in half a day on platforms I've never even heard of before because a new one shows up every day. But it's
Jason Cohen (45:50)
Right. Right.
Jon Sturgeon (45:52)
easier and easier and simpler and simpler, but it devalues the commodity. It's turning it into the price of corn because it's like, well
Jon Sturgeon (45:59)
It's no longer a a craft if you can fart one out in like four minutes.
Jason Cohen (46:03)
Right.
Jason Cohen (46:03)
So you have to go to more genuinely complex problems because complex problems don't just get commoditized, like by their by the
Jon Sturgeon (46:10)
Correct.
Jason Cohen (46:10)
definition of complexity.
Jon Sturgeon (46:12)
Yeah, and and even simple lead generation doesn't work anymore because somebody's going and be like, Hey, why do I need ZoomInfo? I could just scrape with Claude.
Jason Cohen (46:19)
Interesting. So I'm I'm trying to think how this all resolves into Mario's dilemma.
Jason Cohen (46:23)
Should he even in any form try to build up an agency in the face of him believing that agencies don't exist in five years in Or maybe we're trying to put our finger on a form of agency that does thrive in five years that would be fun? Maybe that's what we're doing. I'm not sure.
Jon Sturgeon (46:38)
I don't need to be Nostradamus to tell you this and know I'm right. everything that's creative and is subjective and is based on your feelings that's all gonna disappear. But everything that is problem solving with humans in front of a computer and scratching their head being like, Fuck, what why isn't this working? That's gonna stay here for as long as a human is in front of a computer.
Jon Sturgeon (46:57)
like I I'm building a restaurant right now and I hired my old creative director who is a two-person agency. Why? Because I want the joy of talking about fleshing out ideas with another human and I'm paying a premium price and the guy makes a fuck ton of money and his life is good. But he'll never be able to scale that but he's the agency of the future.
Jon Sturgeon (47:18)
People will still pay twenty thousand bucks to work on a brand guideline and because they they love it. But then
Jon Sturgeon (47:24)
there's a whole new segment being created for people using AI, you know?
Jason Cohen (47:28)
So the question is, what is a customer segment who still wants the human touch? And one of them is these personal things like a restaurant, maybe. And in marketing, it's not restaurants, probably. But in something as corporate as RevOps, it's possible. It's possible that you say, AI can do many things if a human being isn't checking.
Jason Cohen (47:47)
Our calculations and analysis about revenue, then we're just not comfortable. It may not even be legal. that's that's
Mario Peshev (47:53)
Hmm.
Jason Cohen (47:54)
Or or even like, what about when AI is better than doctors at a diagnosis? Okay. I think a lot of people will still want to talk to a doctor, even if the doctor's not as good. Now they may be
Jon Sturgeon (48:03)
Yeah.
Jason Cohen (48:04)
irrational. Maybe, maybe, maybe not. I don't even know, but that's what I bet.
Jon Sturgeon (48:08)
Yeah, plane planes can already fly themselves, but we would never put up with there being no guy there, right? So th that's already happening right now. another thing too, Mario, that I've noticed is that because I we we review sales calls all the time. We have game tape every single day. One of our Claude questions against our Fireflies is what's not being said, right? because that's a really important question.
Jon Sturgeon (48:31)
what they aren't saying is that they want to pay for accountability. So they're choosing us because they want someone to yell at when things go wrong. When things break on AI, what are you gonna do? DM the anthropic guy? Like who do you talk to? So people are willing to pay bigger prices now for human accountability. Is that something that you've come across?
Mario Peshev (48:53)
100 % and I was actually looking into your TrustPilot yesterday or so and so many reviews of I hired them six months ago and I'm working with them now so happy and all that. This brings you the level of confidence that you can do repeat jobs and be happy and not be screwed over especially if you for example work with marketing directors who used to be a team of 10 and then
Mario Peshev (49:16)
The SaaSpocalypse happened and became a team of one and a half, but they are still expected to deliver the job of a 10. And then they need true support and someone who owns it and has the accountability and the agency of doing that. So that trust factor, it's not going to go away. To Jason's point, for doctors or to your point about pilots, you want to know that someone who knows how to do that is there and can step in and is going to vet and validate and all that.
Mario Peshev (49:43)
In our context, the problem is that you, John, know how the business runs and how to do everything and all that stuff. And I may know how to do everything in the business, but it's not a scalable endeavor.
Jon Sturgeon (49:55)
Yeah. I look at this problem the same way. Right now at twenty eight clients, what's remind me what your head count is?
Mario Peshev (50:03)
30, 35, 36.
Jon Sturgeon (50:05)
That d that doesn't make sense to me. Like it should be very inversed. like if you wanted to scale it,
Jon Sturgeon (50:11)
Like I'm looking at uhoh.com our head count ratio is gonna be even better than marketing because there's not many deliverables. So there's not like somebody who has to sit there and like make a thing, right? but it it should be about twenty people per hundred clients, like if we suck.
Jon Sturgeon (50:29)
but I expect it to be a lot better than that. dingus and Zazzi is a lot trickier because we're making things like they're and we're also unlimited, which is also dumb because clients abuse us and they show up to the buffet and they put bring their pickup truck in a shovel, right? But we let them do that because it proves our model's correct. so
Jon Sturgeon (50:45)
right now, are you at max efficiency for twenty eight clients and even more headcount than there are clients? Or are you addicted to cheaper labor in a Bulgaria because I feel like if you were in America, you'd be like, I can't afford this. Like I need to I need to figure out how to be more efficient.
Mario Peshev (51:01)
We're at 67 % utilization, which is not ideal. Normally we were...
Jon Sturgeon (51:05)
What does that mean and how do you explain that to a four year old? What do you mean?
Mario Peshev (51:07)
About a third of the billable headcount plan is benched. Let's put it this way. It gets occupied either during the summer when there are sick leaves and holidays and vacation and all that, or in Q4 when there's extra
Mario Peshev (51:20)
upsells and Christmas campaigns, Black Friday and all that stuff. But half of the year it's currently not effectively out yet.
Jon Sturgeon (51:26)
Wait, wait, so you have headcount they're you're not paying for it, correct?
Mario Peshev (51:30)
No, that's paid.
Jon Sturgeon (51:31)
So what they're just sitting on the bench twiddling their thumbs?
Mario Peshev (51:34)
They're working on internal projects but it's not billable work.
Jon Sturgeon (51:37)
So you so you're saying that there's a way that you can press a button and become thirty three percent more like now?
Mario Peshev (51:44)
There's no easy way I can answer that
Jon Sturgeon (51:45)
That's what it sounds like.
Mario Peshev (51:46)
question.
Jason Cohen (51:46)
Well,
Jason Cohen (51:47)
it sounds like it there's seasonality. Is there seasonality
Mario Peshev (51:49)
Yes.
Jason Cohen (51:50)
in the business
Mario Peshev (51:50)
there's seasonality And there's also risk management.
Jon Sturgeon (51:51)
Dude, seasonality? What what are
Jon Sturgeon (51:53)
you talking about?
Jason Cohen (51:53)
Yeah,
Jason Cohen (51:54)
see I'm I don't know why there would that would be. And something like RevOps and integrations, there shouldn't be any seasonality.
Mario Peshev (51:59)
Well, there's first off, Summer Squad, Christmas Squad as well. Q4 is very busy and then annual contract starting beginning of the calendar year. There's more new financial year and all that.
Jason Cohen (52:07)
No, but but I don't understand. If you're if you're
Jason Cohen (52:09)
if you're building an integration between Salesforce and two other things, I don't understand what seasonality has to do with it.
Mario Peshev (52:15)
There's FP &A for financial teams. have things on a schedule and some of that's happening to different...
Jason Cohen (52:20)
Right, that's not seasonal, it's on a schedule.
Mario Peshev (52:23)
Okay, well we can't hire the same headcount seasonally for two months, two times a year, or at least we haven't done that yet.
Jason Cohen (52:29)
So you're saying you're doing the FP&A
Jason Cohen (52:31)
for them and so when they do their annual planning, you have to have people ready to go on the bench in order to do that for them?
Mario Peshev (52:37)
Well, this is how it works now, yeah.
Jon Sturgeon (52:39)
I would change that now. And put the money in your pocket. Are you not greedy enough? You should be greedier, dude.
Mario Peshev (52:46)
I mean, and again, we are having an open conversation, Bench in the service business, I don't think it's something that's new. And in a consulting business, it's also in my experience again, and you may say otherwise. In my experience, it's about
Jon Sturgeon (52:59)
Dude, I I've
Mario Peshev (53:01)
75 % utilization and we are at about 67, which is a bit lower, but it's not unusual to not be 100 % booked as well as.
Jon Sturgeon (53:08)
No, sorry, I have two agencies and I've never even heard of this before. It's just blowing my mind. So I maybe I live in a bubble where I just like I've I've never had a real job, didn't go to school, so I don't know. But no, I you nobody should be benched. And if they are not working, then you should let them go.
Jason Cohen (53:23)
Well, well, okay, but hold hold
Jon Sturgeon (53:23)
Don't invent projects.
Jason Cohen (53:25)
on. So this is why the needs of the client are important. If the needs of the client are in fact variable throughout the year, and sometimes they need more and sometimes they need less, then it makes sense why you would need to match that in your people. And you don't want to be hiring and firing all the time, of course. And so you would have bench time because the customers actually need that from you. But then your pricing would be such that you'd still be profitable anyway.
Jason Cohen (53:50)
Like they don't get to do that at the same price as someone who's not variable, right?
Mario Peshev (53:54)
So several things. First by bench I mean people not being fully utilized, so people working let's say 120 hours a month and then having some downtime in between tickets and support and requests and all that. So it's not three people not working can just playing games online.
Jon Sturgeon (54:11)
We're using your numbers. You said thirty three percent. That's a big number. So now are you backtracking on that and saying that it's not actually that bad?
Mario Peshev (54:18)
No, I'm not backtracking. I'm saying that they have about 120 hours of work on average per person. So there's several people who are fully utilized and some who are 90 to 100. And this is the effective utilization. And now in August when, you know, half the team, because we're in Europe, half the team was on vacation and everything was running smoothly because we had coverage. In December, when there's Christmas and there are longer holidays and stuff, we have coverage for that and for the overtime. So we are able to withstand that breaks and see
Mario Peshev (54:47)
cleaves and vacations and stuff through extra capacity by not plugging all the people at 100 percent.
Mario Peshev (54:54)
It stresses us less if we have a buffer, a cushion to step on if someone's sick, we don't have to lose a client because someone can touch them.
Jason Cohen (55:03)
Well, every every company has people that are sick.
Jason Cohen (55:05)
So that's not the reason you have thirty three percent idle time because people can get sick.
Jon Sturgeon (55:09)
Yeah, Mario, is it possible you're not greedy enough? Like what I I feel like this is a you problem where it's like if if I if I'm looking at this and I was you, I'd be like, wait, so if I'm thirty three percent more efficient, I could pull out that cash for myself? Do you can you relate to that?
Mario Peshev (55:23)
I mean, in order to do that, I'll have to fire three billable people, for example, and this is going to make it really difficult
Jason Cohen (55:32)
Well well, but what again, what I'm
Jon Sturgeon (55:32)
it's
Jason Cohen (55:33)
hearing, I was just trying to confirm if this is true, is you're saying, look, I like that people can be off in August and off in Christmas and and not be stressed. I like that for everyone, for yourself, for for those people, and yet still serve the cust your customers in the ways that they expect. And you like that. And so you're willing to take some downtime, buffer time.
Mario Peshev (55:53)
And we know for a fact that the retention that we have for clients is also attributed to a good portion of fighting fires and saving them from different scenarios. Larger businesses. Yes, it is, it is variable.
Jason Cohen (56:04)
Yeah, so so I get that. So if the demand is variable, that makes sense. For for consulting companies where demand is
Jason Cohen (56:10)
variable, what you do is you charge a whole lot more per whatever project, hour, month, retainer, whatever it is, Because of course, you're indeed having to eat bench time in order to suddenly to put two people on today. Okay, well then that means they they have to have been benched.
Jason Cohen (56:26)
in order for them to be available, but that means the customer has to essentially pay for that anyways. And so if that's your business model, that's fine. I'm not sure though, that is your business model or not, but that makes sense as long as you're building that into the price.
Mario Peshev (56:38)
think the prices are low for that extra overtime and it's something that we'd like to correct,
Jason Cohen (56:40)
Yeah. That that's what I'm that's my
Jason Cohen (56:42)
So a good example that is security companies. Of course they can have contracts where they they do ongoing work, but also of course there are emergencies. no, we've been hacked, but what do they charge for that? Ridiculous, outrageous amounts. Why? Because they have to have people on the bench, good people ready to go when you need them. So it's a perfectly valid structure as long as you're charging for that so that the bench time is is acceptable.
Jon Sturgeon (57:04)
It's it's a fascinating conversation because I don't have the luxury of even putting this in my head because it's unlimited, flat fee, all this stuff. Everybody's
Jason Cohen (57:12)
Yeah.
Jon Sturgeon (57:13)
on all the time. And sometimes if somebody is idle, then I we treat it like blue-collar trades. Like sometimes a plumbing company doesn't have work for a guy and they go on layoff for a little bit and then they pick him back up. Not a big deal. and if they if it's a free market, free world, if people didn't like that, they didn't have to stay. Like they can go work somewhere else.
Jason Cohen (57:31)
Well, that's not necessarily
Jason Cohen (57:32)
true, but but but it is a way to go is to basically treat all employ
Jon Sturgeon (57:35)
How is it not true?
Jason Cohen (57:37)
the many people are in a life situation where they have to do things that they don't wanna do, and other reasonable people would say we don't want to live in a country that that treats people that way. but there's no choice for them, and so they do it. That's that happens to billions of people every day. Now, I'm not saying you're doing anything wrong. I'm just I'm just saying that like that blanket statement.
Jon Sturgeon (57:55)
It's an altruistic
Jon Sturgeon (57:56)
it's an altruistic way of looking at at the world. I I look at it through a capitalistic lens of of America. Yeah.
Jason Cohen (58:01)
me too. I I am too.
Jason Cohen (58:03)
and so that's why I'm saying what Mario might be doing is saying, in part, yeah, I don't want to furlough people for two weeks just because we don't have work, because what that's doing is putting the the business management onto the employee, which you could argue doesn't make any sense. What why is it the employee's fault that the business mismanaged their revenue so much that they that they they couldn't pay them for two weeks? That's that's a shitty business. I mean, if at McDonald's, if if people don't
Jason Cohen (58:26)
come in because that McDonald's advertised or didn't or whatever. That's not the employees' fault. They get paid per hour for standing in the McDonald's. And maybe they're slinging a lot of french fries and maybe they're not. But that's the business's problem, not their problem. And you wouldn't want to put that problem onto the employees. That should be onto the business managers that's their fault. That's their problem. So also in America we have stupid, stupid laws like health insurance largely comes from employment. Well, that's dumb.
Jason Cohen (58:52)
Because that means people have to do certain kinds of employment just for that reason. But that's a stupid reason. They shouldn't have to make employment decisions based on health insurance laws that have nothing to do with their job. That's dumb. But in America, that's that's the reality of the structure. So they do have to do things based on that. So anyway, I I'm not trying to get too far into it, just pointing out specific ways in a capitalistic red-blooded I want money mindset, where like that that's even selfishly doesn't make sense for for all parties.
Jon Sturgeon (59:18)
I mean look, I see I
Jason Cohen (59:19)
so what
Jon Sturgeon (59:19)
your
Jason Cohen (59:20)
I'm hearing Mario say is I don't want my employees to effectively also be contractors who also have variable income. I want them to be employees. The fact that we, you know, scale up and down, that's the business's fault. And if if the business needs to charge more for that to make sense, good, do that. That's it, that makes a lot of sense. What why are you putting on the employees the fact that the business simply needs to charge clients more for that for that work? That's not the employees' fault.
Jon Sturgeon (59:44)
And and by the way, Jason, I would say that like you everything you said is logically true. I just don't agree with the premise. For me, I look at Mario, I'm like, how can I advocate on this guy taking out more money for himself? Because that's the whole reason why we get into business. We take Mario, you probably took a ton of risks. You probably deal with so much shit. And there's a thirty through thirty-three percent that could potentially go into you as more reward. Like that's how that's the angle that I would look at, you know?
Jason Cohen (01:00:08)
Yeah, yeah, but see, wait, wait, wait.
Jason Cohen (01:00:09)
So I'm not, I'm not necessarily disagreeing with that. What I'm saying is there's more than one solve. Because if if it's thirty-three percent because Mario's being inefficient, then it would make sense to become more efficient and for him to take money out. That's just what you said. But I'm saying there's another reason for that, which is he has a service in which he is willing to just throw two or three people at a drop of a hat onto a problem on behalf of a client.
Jason Cohen (01:00:35)
And that's part of the service. He would not be able to do that if he was having to hire and fire people all the time. It would be impossible for him to deliver that product. And so I'm saying, that's fine. If that's why there's bench time, because you want to deliver this that's fine. But then you, Mario, need to charge more for that service. So that once again, Jon you're once again correct that
Jon Sturgeon (01:00:55)
Yeah.
Jason Cohen (01:00:55)
Mario should be taking more money out of the business because he's charging more to cover the fact that he needs this flexible stuff.
Jason Cohen (01:01:02)
And once again he's taking more
Jon Sturgeon (01:01:02)
Yes, I would do both.
Jason Cohen (01:01:03)
money of this. So you're so either way, I'm agreeing with you about
Jon Sturgeon (01:01:05)
Yeah.
Jason Cohen (01:01:06)
what he needs, right? He just needs to charge accordingly.
Jon Sturgeon (01:01:08)
And we just met an hour and a half ago, so you're probably right, 'cause you know your business more than us. you know. my challenge though would to you if you take anything away from this, is that there's a mindset issue probably around how you should be taking out more for yourself and they're probably being a little bit more selfish.
Jon Sturgeon (01:01:25)
Let's talk about go to market dude. I was all a jazz gotta I'm I my Yeah.
Jason Cohen (01:01:29)
wait, wait, let me just say one last thing on this point, just
Jason Cohen (01:01:33)
to cover up.
Jason Cohen (01:01:33)
There's a third option. There's an option C with all this bench time, which is you do something that actually helps the business.
Jason Cohen (01:01:39)
So like you said, you built all this AI, right? So make a make a goal that by the end of the year there's 20 people, not 30. Or make a goal by the end of the year that you supercharge your marketing,
Jason Cohen (01:01:49)
That's what they're doing with their bench time. Then they may be interrupted if a client needs something. Okay. But otherwise, that's the goal. And they have goals and they have to hit those goals. In other words, what if you use the crap out of that bench time, not just like, well, they do stuff, no, you have a directed project so that they're not idle. They're just simply not on client stuff, but they're transforming the business. So there's a difference between I'm idle
Jason Cohen (01:02:09)
And saying there's a business transformation, like in sales and marketing, for example, and you it's not just wasting money that could be in your pocket because it's transforming the business in a way
Jason Cohen (01:02:18)
over the time gonna be worth millions of dollars to you, either in profit or an eventual sale. So if that's the case, like I still don't love the idea of just using bench time. There's there's reasons, but but at least that's a decent answer to the question, what are they doing?
Jon Sturgeon (01:02:31)
so for me, what I would do if I were you, I would try to set a milestone to at the very least, have more clients than headcount. That feels like a nice place to start, you know? but yeah, gonna yeah, go to market. I just wanted to throw in a little thing of how I'm changing how I view things. I read Jason's book and another plug.
Jon Sturgeon (01:02:51)
I every time I mention it, he gives me 20 bucks, by the way.
Jon Sturgeon (01:02:53)
and and my brain was firing, and I I don't even think this is where he was going with it, but I was like, you know what? I'm going to try to l literally maximize my source attributions. Like I don't think about it enough that way. I like focus on the maybe the top five that brings me the most goodies, but I don't spend enough time like he was talking about affiliates, and I'm like, man, I do not spend enough time and energy figuring out affiliates. So going to you.
Jon Sturgeon (01:03:19)
How many source attributions? What does your inbound look like?
Mario Peshev (01:03:24)
This is an uncomfortable question. So first I'm going to start with Hidden Multipliers is definitely an awesome book and I definitely want to find our Carol faster and just work with Carol more and more, so to speak. But inbound worked flawlessly up until 2023, end of 2023. It died with AI search and Google algorithms and stuff. And we've been scrambling as a percentage.
Jon Sturgeon (01:03:44)
What was your inbound? What was it?
Jon Sturgeon (01:03:46)
No, like how how many source attributions did you have and what were they?
Mario Peshev (01:03:50)
It used to be SEO. So we used to have four. One is my personal brand. Second, Devrix SEO, which is literally inbound. Third is referrals and fourth is churning clients, you know, leaving a job, joining a new place and then bringing us in the new place. These were the four ones inbound to Spree. Well, we love
Jon Sturgeon (01:04:07)
Yeah, we call those zombies. Yeah.
Mario Peshev (01:04:10)
zombies. Zombies are still our best clients.
Jon Sturgeon (01:04:12)
Cool. so I guess you put effort into SEO, but for me, because I'm a dumbass, okay, I hate things like SEO. Like I'd rather pick up a phone and make a dollar right now. So I neglect those things and I'm working on hiring people to help me figure that out. But do you feel like you should try harder? A lot of those feels like you're waiting to for the phone to ring versus taking action.
Mario Peshev (01:04:36)
I'm not a great outbound salesperson. So whatever I tell you is going to be a hypothesis at best.
Jon Sturgeon (01:04:42)
I agree. Sorry dude. Why like dude,
Jon Sturgeon (01:04:45)
okay, Hypergen? Dude, you're friends with Hypergen in Sophia. They made me over six million dollars by cold email. Why aren't you doing cold email for this shit? You guys are homies.
Mario Peshev (01:04:54)
Well, we don't have an unlimited,
Mario Peshev (01:04:56)
we don't have an unlimited, we do everything for a fixed price model.
Jon Sturgeon (01:04:58)
No, no, no, that's an excuse.
Jon Sturgeon (01:05:00)
Wait, wait, do you have a good product? Yes or no?
Mario Peshev (01:05:02)
Yes.
Jon Sturgeon (01:05:03)
Then fuck that. Like w I I have you at least talked about cold email? That's our number one way we get clients.
Mario Peshev (01:05:10)
Of course we have, and we've tried that and it's not with Hypergen though, but we've tried, I mean, it's not like we haven't tested. It's never worked out full-time BDRs, consultant BDRs, third party agencies and partners and commissions and, know, calling and email. It just never worked out for us. Obviously we can't position ourselves better or it's something that works great as a referral and word of mouth, but a shitty product to just position and run.
Jon Sturgeon (01:05:35)
I would probably blame your systems, not the methods, not the source attribution. Because again, we have a marketing company and everybody wants leads, but then they don't call them or they suck at it. Like when I talk to Alex all the time and he's like, dude, he's like, people want leads, but then they reply to the email. So somebody's like, Yeah, I'd love a demo, and then they respond. My guys go on LinkedIn, they let they write to the guy, hey, just putting a face to the name, they'll text, they'll call.
Jon Sturgeon (01:06:00)
They'll call their grandma, like they'll add them to a sequence. All this is happening within like 60 seconds of the lead coming in, and that's how we're capturing it. So there's an ecosystem that nurtures the desire for closing that deal. Like they're hungry salespeople, right?
Jason Cohen (01:06:14)
So,
Jason Cohen (01:06:14)
Jon you also talked about the kinds of customers you have and the close times. If he's talking to companies with 200 mil in revenue on big RevOps and integrations and FPNA projects, I'm not saying the sales cycle has to be a year, but is things like cold email actually the right way to get those kinds of consulting contracts?
Jon Sturgeon (01:06:32)
Yes.
Jon Sturgeon (01:06:33)
Yeah. I mean it look what so it's yes with a little asterisk because there should be twenty different things. It should be an ecosystem of
Jason Cohen (01:06:40)
Okay.
Jon Sturgeon (01:06:40)
you know, obviously after a year you'd look back and be like, This is how much we're spending, this is how many closing, is it worth to continue doing?
Jason Cohen (01:06:46)
you're so you're saying
Jason Cohen (01:06:47)
like there should be many marketing channels. often they're feeding each other. Often you can't even necessarily know. Well, look, they saw they saw it seven times all over the place. That's the whole, like, like there's the whole strategy there?
Jon Sturgeon (01:06:55)
Correct. Correct. Dingus and Zazzy
Jon Sturgeon (01:06:58)
sends over a million cold emails per month. It's spray and pray, right? And it it brings a lot of hate and it brings a lot of good. But to quote Grant Cardone, everyone's favorite douchebag,
Jon Sturgeon (01:07:09)
if you don't have any haters, then nobody knows what you're doing. so it is a channel that is a no brainer that you could in two, three weeks these leads will come in.
Jon Sturgeon (01:07:17)
we'll have like on a good day, like fifteen leads of people that want to know more or send me more information. But they it has to land on the seat of somebody who's excited and wants to make more money. You know what I mean?
Jason Cohen (01:07:29)
you you said you had one salesperson and you had like these fractional other people. Is that the entirety of go to market?
Mario Peshev (01:07:34)
No, we have three people in marketing too.
Jason Cohen (01:07:36)
What do they do?
Mario Peshev (01:07:38)
ads, inbound, landing pages, A/B testing.
Jon Sturgeon (01:07:41)
Dude.
Jason Cohen (01:07:41)
Wait, wait, wait, wait, wait. Landing pages, okay. A/B testing, I understand. When you say inbound, what is it that they do?
Mario Peshev (01:07:49)
Yeah, sorry. So, this is I Arts, not about, yeah, Arts landing page.
Jason Cohen (01:07:53)
Ads what where where where ads?
Mario Peshev (01:07:55)
LinkedIn and yeah, and some Meta Yeah.
Jason Cohen (01:07:59)
Google, LinkedIn, and Meta. I'm
Jason Cohen (01:08:01)
sure people are on Facebook looking for multi-million dollar FP&A consulting.
Jon Sturgeon (01:08:05)
Yes. No, they are, dude. Jason
Jon Sturgeon (01:08:07)
Jason, I'll fight you all day every day. This is
Mario Peshev (01:08:09)
Yeah.
Jon Sturgeon (01:08:10)
this is everybody that you're talking to, they they might look professional, whatever, but then they hang up the comp they throw the the they put their computer off and they go watch Will Farrell.
Mario Peshev (01:08:19)
and they open Instagram.
Jon Sturgeon (01:08:21)
Yeah, they doom scroll on Instagram
Jason Cohen (01:08:21)
Fair enough. fair enough. I admit
Jon Sturgeon (01:08:23)
while watching a Will Farrell movie with their wife. Like they they Yeah. Yeah. Yeah. No, the everybody's everywhere. But why didn't you mention
Jason Cohen (01:08:25)
I I can see defeat immediately. that sounds awesome. Yeah, yeah, yeah. Okay, so so they
Jason Cohen (01:08:32)
so they do those ads and what else besides the the ads on the three platforms?
Mario Peshev (01:08:36)
Yeah, blending pages.
Jason Cohen (01:08:37)
No, no, I know, but the in for inbound.
Mario Peshev (01:08:40)
for inbound well nothing SEO you know optimizing stuff or SEO and
Jason Cohen (01:08:45)
my God. So three people and they're optimizing stuff. Jon can correct me again, but I feel like like this this whole department of marketing and sales is just maybe underinvested in, but I just don't get the feeling that there's like anybody in there who knows how to do it.
Jon Sturgeon (01:09:00)
I wanna know why you didn't bring it up as a source attribution when we were on that topic. Did it just
Mario Peshev (01:09:03)
Well, I said inbound
Mario Peshev (01:09:05)
and for me that is inbound, know, new landing pages and offers and tied to the ads and also account based marketing that the sales guys are also doing is sending to these landing pages.
Jason Cohen (01:09:13)
And you have three people that that ha that manage all that?
Mario Peshev (01:09:16)
Yeah.
Jon Sturgeon (01:09:17)
And you're only closing how many deals per year? Four? Did I remember that correctly? How many?
Mario Peshev (01:09:21)
Well,
Mario Peshev (01:09:22)
historically over the past eight years, it's four or five deals a year.
Jason Cohen (01:09:25)
So mean I mean three three
Jason Cohen (01:09:27)
people who just run some ads and and make landing pages sounds like way too many people, especially in the age of AI, but even before the age of I mean, ten years ago that sounds like way too many people. And then one person in sales sounds like way too few people.
Mario Peshev (01:09:40)
So just to bring some context, the marketing team is also servicing clients whenever there's something
Mario Peshev (01:09:46)
that needs to be done there. So they're also part of the delivery team. So they're not fully allocated.
Jon Sturgeon (01:09:49)
your CAC? What's your CAC?
Mario Peshev (01:09:52)
I can't give you a good number considering the crappy year we've had this year.
Jon Sturgeon (01:09:56)
Just gun to your head and make up a number.
Mario Peshev (01:09:58)
Well, last year it was
Jason Cohen (01:09:59)
Power of ten.
Mario Peshev (01:09:59)
80 grand.
Jon Sturgeon (01:10:00)
So it costs you eighty thousand dollars to get one yes, and what's the LTV of that one yes?
Mario Peshev (01:10:06)
So the average lifetime was 120k
Jason Cohen (01:10:11)
Wait, wait, a hundred and twenty K
Mario Peshev (01:10:11)
because we have some
Jason Cohen (01:10:12)
is annual, right? Not lifetime. Or no?
Mario Peshev (01:10:15)
it is lifetime because we
Jason Cohen (01:10:17)
Wait, wait, wait, wait, wait.
Mario Peshev (01:10:19)
we used to have again did correct
Jason Cohen (01:10:19)
I thought you were saying you were getting a hundred K a year a year o off of customers.
Mario Peshev (01:10:23)
again this is like i said this is up to 2024 and since then we transitioned to more mid market and then the nature of the business changed we lost more contracts and we have some that are
Jason Cohen (01:10:32)
Right. So don't talk about what it was like years
Jason Cohen (01:10:34)
ago. We're asking about the business now.
Mario Peshev (01:10:37)
Well, it's over $350,000.
Jason Cohen (01:10:40)
Yeah, so that's good. So then 80 for 350 is good. I mean, it could be better, but like that there's that that's basically okay.
Mario Peshev (01:10:45)
Yeah.
Jason Cohen (01:10:45)
except having three marketing people that generate four customers a year is is way over allocated. Now, I I hear you, they're also on other things, but that's maybe part of the problem too. So one of the problems that all
Jon Sturgeon (01:10:55)
Yes, yeah, yeah.
Jason Cohen (01:10:56)
I see all consulting companies, maybe not John's, but all like all ones that I see is this problem of whenever people are allocated to sometimes clients, sometimes us.
Jason Cohen (01:11:05)
What happens is the clients have to always come first. They're always prioritized, which means no matter what the company's trying to accomplish for themselves, it's always interrupted by client work. And it's understandable. That's not like stupid or or anything. Like obviously the client wants something, we do it. Right. That's what we do. That's good service. So, you know, that's natural. But what it means is that your company never gets the attention that it needs.
Jason Cohen (01:11:28)
People can't even wrap their heads around it because tomorrow they're pulled off on doing something else or half the day is something else, or now that like you said, you said my marketing people are are in client meetings sometimes. What? Like
Mario Peshev (01:11:37)
Hmm.
Jason Cohen (01:11:38)
unless if they were in there specifically because they're like, we want new positioning, new ads, what are people saying today? Cause we're putting that in the ads. And I want to see that and I want to look in their eyes and see how they say it, because I'm gonna make ads like that. Then that's awesome. Like they shouldn't be doing that multiple times a week, but
Jason Cohen (01:11:54)
If they're dipping in for that, beautiful. In fact, that's that's that's awesome in my mind, because they're really connected to the customer. Great. But if they're like, no, no, no, we need them for the QBR, then I'm like, that means they're not really your marketing department. you're the part-time, like your company is their part-time project, not their main focus.
Jason Cohen (01:12:12)
so one thing now again, like John might have a different thing because again, I don't run agencies and so I don't know. But like two full-time sales pe people and one badass but absolutely a hundred percent dedicated marketer, to me would be like the bare minimum and a better allocation of humans, especially because a lot of marketing you could do with AI now.
Jason Cohen (01:12:30)
And there's so many tools to do things like running ads and analysis, right? Like if you're saying it's it's hard to grow, I would say you're not even close to trying hard to grow. You're not in you're not investing in growth at all. So not of course you're not growing.
Jon Sturgeon (01:12:41)
It should be
Jon Sturgeon (01:12:42)
it should be the most exciting news to hear, Mario, because I hear this problem and I'm like, dude, I know for a fact that if I had nothing else going on, I could come to your office, we would wipe the slate clean, just get one guy who's good at cold calling, we'd get a recruiter, and then one closer who's saying the same script every day, and we would at minimum I would be embarrassed and sad if we weren't closing one deal a week based on your numbers. It should be four sales per month and that would be sad. We would be depressed.
Jon Sturgeon (01:13:09)
That should be your baseline based on the numbers you're talking about. But it's like I think you just need a an electric shock to be like, Do I wanna do this? you know?
Mario Peshev (01:13:18)
No, I mean, that sounds perfect. Like I said, I'm a decent educator or consultative selling or whatever you want to call it. I'm a horrible outbound, my service, car salesman, knock on door, selling Bibles or something like that.
Jason Cohen (01:13:32)
Yeah, see see, see, it's not about
Jason Cohen (01:13:34)
being a car car salesman. So not only is this common, I would say it's like the 90% case. The founder is great at one-to-one sales because the founder is deeply passionate about it, which comes out and comes through, and that's magnetic. And you know your shit, and people also can see that, and that's also magnetic. And so you sort of naturally just overwhelm someone with yourself. And so
Jason Cohen (01:13:56)
Founders are often pretty good at that kind of sales. And then when it comes to building any kind of systematic marketing or sales, that same founder is horrific because building something systematic has nothing to do with anything I just said. None of it. It's what John just said. I have a closer who's saying the same thing every time. Right. I have an outbound person who's blah, blah, blah. Right. and building those systems and
Jason Cohen (01:14:20)
What kind of person is that? And how do I manage them? What does good look like? Has nothing to do with that kind of overwhelming personal sales or the other stuff that you're no doubt amazing at, And so naturally a founder doesn't have the skills to build those systems.
Jon Sturgeon (01:14:35)
Yeah, it's the
Mario Peshev (01:14:35)
Yeah.
Jon Sturgeon (01:14:36)
y you ever hear the there's no such thing as problems, there's only people problems. This is just a people problem. You just need a guy who's good. And there's also one mindset issue here. You use you said car sales, right? You as a founder, you think sales is gross, but sales is
Jason Cohen (01:14:49)
Exactly.
Jon Sturgeon (01:14:49)
helping people.
Mario Peshev (01:14:50)
No, no, no, no.
Mario Peshev (01:14:51)
pardon my English as a second language. I didn't mean it in a bad narrative, just selling crap to people and just trying to get rid of something good.
Jon Sturgeon (01:14:58)
Or was it your subconscious peeking through?
Mario Peshev (01:15:00)
No, it's the and the curse of our business, in my opinion, is I'm not worried about AI because whatever happens, we just adopt and build new services or solutions or solve different types of problems just because we are moldable and hybrid and adjustable.
Mario Peshev (01:15:17)
The freaking curse of all that is that there's no set of five different things that we do. The five packages, the five entry, gateways, leads, funnels, whatever it is, that's so clear, crystal clear that it's a no-brainer to say yes or no.
Mario Peshev (01:15:32)
So whenever we solve, we've solved a million different things for our customers over the past decade. And it's really hard to put any of that in, okay, we do connect workflows from HubSpot to BigQuery and do analysis. Like we have to list down a million things. It's not something that's sellable. And then it sounds horrible at the end of the day. So this is because we don't have the narrative on that. Okay.
Jon Sturgeon (01:15:52)
I know how to fix this in one dude.
Jason Cohen (01:15:55)
Yeah, yeah,
Jason Cohen (01:15:55)
exactly. You don't have the narrative. Of course of course you can describe that without going into a million details. Not you, but a person
Mario Peshev (01:16:00)
I don't know how. I don't know how.
Jason Cohen (01:16:02)
can.
Jon Sturgeon (01:16:03)
uhoh Exactly.
Jon Sturgeon (01:16:04)
Like like right now at dot com our like I s poach one of my sales guys, He doesn't know anything about tech, doesn't matter. It's it we we made it so that you'd be an idiot not to say yes. so the offer is is worked into a undeniable value prop, but I I still think that it's the same thing where it's like it shouldn't be you, dude. You should be on a beach sipping a margarita man and just chilling while you
Jon Sturgeon (01:16:29)
Hired the right person to set this into motion. And one unlock that I should have listened to my mentor faster. I I ignored him for six years and I finally fucking listened to him. He was like, get a sales recruiter. They s I found one in Hampton,
Jon Sturgeon (01:16:45)
his name's Sammy. I don't even know his last name, but he's
Jon Sturgeon (01:16:49)
the company's deals closed and I'm on my third person with him. They like, Mario, this if you take this seriously, this will change your life. If you actually care, if you you know
Jason Cohen (01:16:59)
But he needs a
Jason Cohen (01:17:00)
sales leader also for them to go under because Mario does not know how to manage and manage that team, even if he has great people.
Jon Sturgeon (01:17:05)
Correct.
Jon Sturgeon (01:17:06)
They can do that. I don't I'm not using him for that. I'm just using him because I have a s existing structure.
Jason Cohen (01:17:08)
Okay. Okay. huh.
Jon Sturgeon (01:17:12)
but he found like these people are good now. They know how to do this now. Like that you don't have to train them, you don't have to hope that they become good. And he guarantees replacing somebody unlimited until you find the right person. So it for me, it's like a no-brainer. I'm like, my God, this is saving me months of effort trying to find the the unicorn.
Jon Sturgeon (01:17:34)
This guy has people ready to go and then guarantees it.
Jason Cohen (01:17:36)
So John, you said that Mario needed an ops person, and maybe that's still true, but maybe he needs a go to market leader who owns marketing and sales.
Jon Sturgeon (01:17:46)
Let's do it all, man. Mario, just
Jason Cohen (01:17:47)
Right.
Jon Sturgeon (01:17:48)
hire everybody.
Mario Peshev (01:17:50)
Easy.
Jon Sturgeon (01:17:51)
no, no, I disagree, Jason. No, no. If it's in sales, it's as it's just sales. it's similar to what you were saying about him juggling having marketing people juggling clients versus a sales brain is animalistic, it's different, it's not you know.
Jason Cohen (01:18:04)
But I'm not convinced
Jason Cohen (01:18:05)
his three marketers are any good either.
Jon Sturgeon (01:18:07)
I would wipe the slate clean on that.
Jason Cohen (01:18:09)
Okay, so you're saying he needs he needs a sales leader and he needs if not marketing leader, then he needs a first in marketing person that can really start getting things moving. Is that right?
Jon Sturgeon (01:18:18)
so, what I would do based on knowing nothing and pulling this out of my ass, I would go to Sammy and be like, I need an SDR. I need somebody who books a closer. And then the closer should be having eight meetings per day saying the same script, the same exact words. It's an Alex Hormozi closer framework. Right? We clarify why we're there, then we label them with the problem, then we observe, hey, what have you done to fix this before? then sell the vacation, be like, hey, well.
Jon Sturgeon (01:18:42)
You know, this is what we do. explain away their problems and then reinforce their decision. That's it. It's just go into a script. Your meeting shouldn't be longer than 15, 20 minutes. And at the end, you'd be like, all right, is this price scary to you? Is there any reason why we're not doing this? Ask for the sale. You will close multiple sales per week with just those two people. And then maybe keep your best marketer and say, You just work for me, get me as many deals as you can. And then start adding source attributions, like you know, different sources. and
Jon Sturgeon (01:19:09)
The more you have, then the more inbound comes in, right?
Mario Peshev (01:19:13)
Well, yeah, I have to explore that. It sounds good again, it it never worked before. I've mismanaged people or we haven't given them the right playbook or something, so we have to try again.
Jason Cohen (01:19:23)
You know,
Jon Sturgeon (01:19:23)
I don't
Jason Cohen (01:19:23)
the thing with it never work before isn't is an interesting one because sometimes that's meaningful. Sometimes that's because it indeed it doesn't work. What I found for myself, the number of things at WP Engine where I tried it, and I mean me, I tried it. And then later on, someone that knew what they were doing tried it and they were successful. That happened in affiliates, that happened in advertisement, that happened in SEO, that happened in social.
Jason Cohen (01:19:47)
And that's already many of the main marketing channels that exist in the world. webinars. That's another one. Where's an another person made it successful where I didn't. and I feel like I'm not bad at marketing. And yet, over and over again, maybe I am bad at marketing. Maybe I should say I'm I'm good at positioning, but bad at marketing. Maybe that's maybe that's a a more
Jon Sturgeon (01:20:04)
Yeah.
Jason Cohen (01:20:04)
honest way to put it, right? and and I found that it's possible that you did it before and it didn't work, and that proves it didn't work, but
Jason Cohen (01:20:12)
Two things can be different now. One is someone else knows what they're doing. I found that a lot. But here's another thing. You have said multiple times in this conversation that the business today is not the same as the business even two years ago, in terms of who your target is. Therefore, things that did not work two years ago, I don't care because you're not selling to the same person. So it doesn't matter what worked before, even even if that was the best attempt ever.
Jason Cohen (01:20:40)
Right, but that's but not for the same customer, so it's irrelevant. So
Mario Peshev (01:20:44)
You're right.
Jason Cohen (01:20:44)
it could be that doing webinars, I'm not saying you should go do a webinar, you should do what Jon said, but it could be that doing webinars could work now,
Jon Sturgeon (01:20:50)
I would do webinars.
Jason Cohen (01:20:51)
whereas before it didn't, because this is the kind of company that goes to a webinar. Or there's certain conferences you could go to now where the right kind of customer goes there, where before conferences was a stupid idea.
Jason Cohen (01:21:01)
or the message used before is in the wrong message now. so there are there are both that the that the target audience changed and I'm sure there's better people. And I've again like I'm I'm putting myself in that bucket easily.
Jon Sturgeon (01:21:13)
yeah,
Jon Sturgeon (01:21:13)
yeah. So Mario, just think of it this way. If you were to go to a bus stop right now in Sofia and everybody who walks by, you'd be like, Hey, you wanna have sex? You wanna have sex? You wanna have sex? You wanna have sex? You're gonna get a lot of no's. But somebody's eventually gonna say, Yeah, it's an effort problem. even if you suck and there's no Riz, as the kids call it, just sheer
Jon Sturgeon (01:21:32)
Volume of effort will net more sales. And then you can work backwards from being like, okay, cool. How do I make this good? so my guess is that when you say, I have tried this before, it didn't work. Most people that tell me that when I look at it, I'm like, there was no effort here. You tried it like five or six, like, hey, we tried cold calling. How many dials did you make? 200? That's four minutes of work. What are we doing here, right? So
Jon Sturgeon (01:21:56)
Effort is the actual place that you should start with first and be like, how what's the most amount of emails that I could send on planet Earth right now? How much is that gonna cost me? Let's go.
Mario Peshev (01:22:04)
Fair.
Jon Sturgeon (01:22:05)
And I would hire a hypergen 'cause I'm biased and you're next door.
Jason Cohen (01:22:08)
Yeah.
Jason Cohen (01:22:09)
Why not?
Jason Cohen (01:22:09)
perfect.
Jon Sturgeon (01:22:09)
I'm a
Jon Sturgeon (01:22:09)
live testimonial that they worked. I we literally converted millions of dollars from sending emails.
Mario Peshev (01:22:14)
I don't doubt the channel necessarily. I doubt the positioning and messaging being strong tidy up enough to convert. And if you give them a shitty playbook, yeah.
Jason Cohen (01:22:22)
I believe that because you always jump right to the details in
Jason Cohen (01:22:25)
the engineering. And so I
Jon Sturgeon (01:22:25)
Yeah.
Jason Cohen (01:22:26)
believe you that the message isn't isn't good. you do need help with that. Now, whether whether one of these other companies can help with that, I'm not sure, but that makes sense to me that that you need to be able to position and explain the thing, That's true. so actually, John, what
Jason Cohen (01:22:42)
Should he use a coach for that? Should is it like maybe there's a special positioning person? Like what what should he do f to get that material in order or or w will these companies help with that?
Jon Sturgeon (01:22:52)
I would talk with Sammy right away. and if he can't help you, then he'll find somebody to help you, but he will help you get good people now that are good to close now and can start dialing. Like you can have a guy in your office or l again, I would hire Americans for this. It's gonna cost you a lot of money, but they're like they have 1776 running through their veins, man. Like they wanna fucking sell. They wanna they wanna be sold too, right? so
Jon Sturgeon (01:23:17)
You get an American who's gonna dial all day and then book a guy. And I would dude try to tap into your inner dumbass. you're literally creating an excuse for you not to take action. The messaging could be as simple as this. Hey, I made a really good product and service, whatever. I'll give you 50 bucks to come hang out and and I could tell you about it. People will show up, even with the reciprocity, like buy their time as a timeshare if you need to. That's as simple as it can be. And
Jon Sturgeon (01:23:42)
Is that messaging good? No, but it's gonna work. And then once
Jason Cohen (01:23:45)
Yeah.
Jon Sturgeon (01:23:46)
it starts working, be like, imagine if I try.
Jason Cohen (01:23:48)
Yeah, there's there's also, the case study that's close to them. So in other words, if you're cold calling, I don't know, let's say an insurance company, then you have some case study with an insurance company already. And so it's like, hey, you know, we helped blank. We revamped their RevOps and their first year drop-off of their customers went from
Jason Cohen (01:24:06)
30% down to 10% because we analyzed what they needed to do to key people. So we dramatically improved their growth curve because of that. We did it for them. Like you want us you want to talk about what we did, and maybe we can do that for you. So especially if it's close to them and not like some irrelevant company. But if it's close.
Jon Sturgeon (01:24:22)
Do guys want to hear a live cold call? I'm gonna call you right now, Mario. We're gonna do some role play. You ready? Cool. Ring ring. Hey, is this Mario?
Mario Peshev (01:24:28)
Hey! Yeah, wonderful.
Jon Sturgeon (01:24:30)
Hey hey Mario, it's John calling from Dingus and Sazzy. Listen, you don't know me from a hole in the wall. Give me thirty seconds, I'll tell you why I called. You wanna roll the dice?
Mario Peshev (01:24:37)
Not interested.
Jason Cohen (01:24:39)
Ha ha.
Jon Sturgeon (01:24:39)
Cool.
Jon Sturgeon (01:24:40)
Now un unhang up. You want to roll the dice?
Mario Peshev (01:24:41)
All right, go ahead.
Jon Sturgeon (01:24:43)
Awesome. Dude, I talk to founders, CMOs like you all the time. You guys are bitching about two things, okay? Either marketing's too expensive or you're not seeing the value. I know you can relate to at least one of these. Which one stood out to you the most? See, I'm putting words in your mouth, dude. I know you can relate. Which one stood out the most? Tell me.
Mario Peshev (01:25:00)
I'm not, I'm not buying into that if I have to be honest. And again, I'm not saying it's not working for you. I'm like, this is another soulpreneur from Instagram, just cold calling or something. And like, I'm not.
Jon Sturgeon (01:25:10)
Mario, Mario,
Jon Sturgeon (01:25:11)
Mario, listen to me, okay? I don't go to Taylor Swift concerts and I don't give a fuck and she's making billions of dollars without me. Why are you making yourself the decision maker for how the world does business?
Mario Peshev (01:25:21)
It's not about how to do business, it's more about the type of client that we work with.
Jon Sturgeon (01:25:26)
Dude, fuck off with that. Are you kidding me, man? You know that your clients have diarrhea today and they wipe their ass just like you do. They're regular people.
Mario Peshev (01:25:34)
Well, that's true.
Jon Sturgeon (01:25:35)
Don't put them on a pedestal and look at them from the distance and be like, my God, I can't say this word in front of them. They are you. They're humans. People buy from people they like.
Jason Cohen (01:25:44)
Mario, do do you think I
Jason Cohen (01:25:45)
buy off of cold calls and cold emails? Do you think I buy anything that way?
Mario Peshev (01:25:49)
I think... I... Yes? Yes, yes.
Jason Cohen (01:25:51)
Just yes or no? Like think you know you know enough about me. You think I you
Jason Cohen (01:25:56)
you don't think I auto delete those emails?
Mario Peshev (01:25:58)
I don't think so. Are you buying crazy stuff? You do?
Jason Cohen (01:25:59)
Yes, I do. Yes. I
Jason Cohen (01:26:01)
get I get a hundred emails a day and I I I immediately delete almost all of them within a second of noticing that it's some kind of pitch, right? However,
Mario Peshev (01:26:08)
Yeah, I assume so.
Jason Cohen (01:26:09)
yeah, that's what I do. However, sometimes there's something about it that catches my eye. Maybe the subject's good. I don't know. I honestly I can't nearly tell you because I'm not an expert in cold emailing, and I know I'm not, so I'm not actually sure. But some combination
Jon Sturgeon (01:26:22)
It's a numbers game.
Jason Cohen (01:26:23)
of something was good about it and
Jason Cohen (01:26:25)
chance. You know, like right? I don't I don't know. and so sometimes I'm like,
Jason Cohen (01:26:29)
So you're
Jon Sturgeon (01:26:29)
Yeah.
Jason Cohen (01:26:30)
right that if you cold call six people, that will be unlikely to get a deal. I agree.
Jason Cohen (01:26:35)
But it takes volume and maybe something special on the phone. Okay, fine. There's good and bad people on the phone. Like we can agree to that. There's a skill there too. but it's simply not true that it just never works. Like the or and and just giving up on it or just assuming it doesn't work is is not a good idea.
Jon Sturgeon (01:26:51)
Yeah, and look, if that's what you're obsessed with, like a hundred percent response rate, then just send cucumber and vaseline in the mail and you're gonna get a hundred percent response.
Mario Peshev (01:26:58)
No, that's not it but Okay, one quick question. Is there
Jon Sturgeon (01:27:00)
Hey, it it fucking works.
Mario Peshev (01:27:03)
is there a way you fuck up your reputation by doing that?
Jon Sturgeon (01:27:05)
Yes, absolutely, dude. Like I said before, if you're not doing anything important, you're not gonna have haters. Like like, yeah, people are go look at our Google reviews, man. There's a guy in Switzerland's like, you dare to send me an email. And we just have fun with it. We're like, fuck you. Like, that's what it takes to to grow a business. And if that's what's gonna make you disintegrate, then that's the cost of doing business. And what reputation, dude? You have twenty eight clients.
Mario Peshev (01:27:30)
No, I mean, if you have a client and like Jason mentioned events, I'm at a conference in two weeks If I have sent 10 emails to that, you know, PE partner or whatever operating partner or so, and we have a conversation, they look me up in their emails and my God, that's that spammers that blasted me 10 times. Is it actually ruining that deal or is there such a thing as a great second impression in that case?
Jon Sturgeon (01:27:56)
Dude, no one cares. No one's gonna remember. it's so beyond not being a thing.
Mario Peshev (01:28:00)
I look people up in my email and see if something shows up since 2004. It's like my CRM.
Jason Cohen (01:28:04)
Okay. And so if they had sent you an email
Jason Cohen (01:28:05)
like, hey man, I think you might be interested in this and you saw that that they had sent that to you, you would then not do business with them? Is that what you're saying? Okay. And and
Mario Peshev (01:28:13)
When you say it like this, when you say it like this, no.
Jason Cohen (01:28:15)
you also just said, What if I spam them ten or twenty times? Okay, so don't span them ten or twenty times. Like that's not that's not what anybody suggested.
Jon Sturgeon (01:28:22)
Yeah. And the other
Jason Cohen (01:28:23)
Okay.
Jon Sturgeon (01:28:23)
th the other crazy thing about cold email is that you can email a guy one year, ignored, email a guy a second year, ignored, and then the third year all of a sudden there's a need and like, shit, you actually catch me at the right time. It's all timing.
Jason Cohen (01:28:32)
Yeah. That's true.
Jason Cohen (01:28:35)
Okay, so
Jason Cohen (01:28:36)
we've we've been talking about how to transform the existing business
Jason Cohen (01:28:40)
We didn't talk about the fact that you want to sell for at least six million dollars to be happy. is that even plausible, possible? Is that what you want to try to do? You want to build a business that's more saleable? Who are you thinking buys and why? We could talk about some of that.
Mario Peshev (01:28:54)
Yeah, let's switch on that.
Jason Cohen (01:28:56)
When you say you want to sell, is that because again, going back to being pessimistic about the agency world in general and just saying, like, it would be nice to just get my bag of money and just who knows what's next, but that would allow me to do whatever is next and give me the time to figure that out. And I just I just wanna change the scenery. Is that the thought? based on the pessimism, or what do you or or or how are you feeling?
Mario Peshev (01:29:19)
There is a lot of grilling work to do everything that we've described. And you've listed down some of that, right? There's go to market repositioning and there are sales leadership and there's optimizing resource and all that. And this restructuring has been going on for three years now. Like the first deepening revenue start 2023, then 24 was in the red. It was our only year in the red. 2025 recovery and can more rev up speed positioning, 2026 best year ever and all that. So.
Mario Peshev (01:29:47)
there's been a lot of researching going on. If someone comes in and gives a bag of cash and says, hey, you know, two options now, we either give you the money and you disappear and you go and chill and do whatever, or we give you the money and you stay for three years, but you know, bigger, better, more opportunities. We're going to bring in all the sales coaches and leaders and all the good guys and capital and funding and brand, and you actually.
Jason Cohen (01:30:07)
I don't I no I don't know why anyone
Jason Cohen (01:30:09)
would ever do that. I can't imagine why they would do that.
Jason Cohen (01:30:12)
This is not this is
Mario Peshev (01:30:13)
Do what?
Jason Cohen (01:30:13)
not an investable company. This is an agency.
Jason Cohen (01:30:16)
I dunno I don't understand. What w under what who would want to do that? Give give me an an example.
Mario Peshev (01:30:20)
Accordion is one example of company doing lots of FPNA and they don't have an engineering arm for implementing some of that. This is one example. West Monroe, yeah.
Jason Cohen (01:30:27)
Okay, so they would get your guys and do that. They wouldn't invest in your sales
Jason Cohen (01:30:30)
team. They would go hire your people, take your AI, and then and they would do whatever they're doing, right?
Mario Peshev (01:30:37)
Right?
Jason Cohen (01:30:37)
They wouldn't hire salespeople that you manage.
Mario Peshev (01:30:40)
Yeah, but they're actually going to get it off my shoulder. This is not going to be my problem anymore. I'm going to become an entrepreneur in that business and then just solve more interesting problems with better utilization. Right, right, right, right. Yes. Yes. Yes. Yes. Yes. Right. meant, no, no,
Jason Cohen (01:30:48)
Right. So that what they're not gonna do is go hire salespeople that you manage. That's what that's what I was getting at. That's not what's that's not what's gonna happen. You were going down this route of what it is. That's not what it is.
Mario Peshev (01:30:58)
no, no,
Mario Peshev (01:30:59)
GTM leader or VP of sales or so, and they're going to do the heavy lifting while the delivery implementation stuff is going to be with better utilization for higher profile customers, solving bigger problems.
Jason Cohen (01:31:10)
Yeah, but you don't care you don't care about that.
Jason Cohen (01:31:13)
You didn't care about utilization before this conversation. So I can't believe that you're excited to get bought by someone so that your utilization can go up. I don't believe that.
Jon Sturgeon (01:31:21)
Yeah, just do it now.
Mario Peshev (01:31:23)
Well, I mean,
Jon Sturgeon (01:31:23)
Put the money in your pocket. It's a mini exit, right?
Mario Peshev (01:31:25)
it's fine. And again, I don't mind it, right. But I'm open.
Jason Cohen (01:31:28)
No, I'm I'm g I'm I'm asking
Jason Cohen (01:31:30)
what it is about the sale. Like like you who is it that's gonna buy it? Are you excited to just get the money and leave? Is there something else you would like? Like, are you saying you would be excited to be bought by a agency where all this other stuff is done so that you can learn that? Because that would be super exciting for two years to see what good looks like and learn. And you would say, I would want to learn that. And so I I want to be bought that way. Is that what you're saying? Like I'm trying to try to understand what you're trying to get out of the sale,
Jason Cohen (01:31:55)
Or if it's simply look, I'm pessimistic about the industry. I just want to get my money, period, so that I'm not worried about it anymore, which is seems straightforward and rational.
Mario Peshev (01:32:04)
I'm not excluding both options. It's not going to be an agency though, could be a financial company doing financial reporting and we do all the RevOps for their portfolio clients. Why not that? Strategic acquisition, we're doing the engineering and all that, they do finance.
Jason Cohen (01:32:15)
It it could be. I'm just asking what you why
Jason Cohen (01:32:18)
you're doing it. Is it because you're pessimistic about agencies in general and so you just don't want to be in business anymore?
Mario Peshev (01:32:24)
I feel that the investment that it takes to get it up to speed is potentially risky and I may ruin the company in the process of trying to do it. Like if I hired the...
Jason Cohen (01:32:35)
Understood. And and it sounds like and it sounds like you don't
Jason Cohen (01:32:37)
want to. Like with like this all the stuff we were talking about, how to overhaul sales and marketing and all that. John's excited. John wants to just move to to Sophia for a second and like do it.
Mario Peshev (01:32:48)
Well he's
Jon Sturgeon (01:32:48)
I know.
Mario Peshev (01:32:48)
unemployed, he has a COO who's doing all the jobs, so he has all the free time in the world, I don't have a general partner.
Jon Sturgeon (01:32:50)
Yeah.
Jason Cohen (01:32:50)
I know. But but you but Mario,
Jason Cohen (01:32:54)
but Mario, what I detect from you is, yeah, I just don't want to do that. Like, okay, even if I agree, that's exactly what the company needs.
Jason Cohen (01:33:02)
I just don't want to wake up tomorrow and execute that. I want to do something else. That's my feeling. I don't I'm projecting on you. Is that right or no?
Mario Peshev (01:33:10)
I can use a general partner who's doing the day to day so that I have more capacity time for strategic thinking and they don't have the capacity now.
Jason Cohen (01:33:16)
Do you want to go do what John just said yourself or no?
Mario Peshev (01:33:19)
Yep, yep.
Jason Cohen (01:33:21)
No, I no. No.
Jon Sturgeon (01:33:21)
No, no, I don't believe you.
Mario Peshev (01:33:22)
No, I mean it's going to...
Mario Peshev (01:33:25)
What keeps me up at night? What keeps me up at night?
Jason Cohen (01:33:26)
No, what you said what you said is I
Jason Cohen (01:33:29)
would you like it if John came and did it?
Mario Peshev (01:33:31)
yeah, that too.
Jason Cohen (01:33:32)
Okay, now see,
Jason Cohen (01:33:33)
now wait. Now that everyone watching is gonna see. I had to beat out of you just to get slight affirmative that you want to do it. But then when I said,
Mario Peshev (01:33:40)
I mean...
Jason Cohen (01:33:41)
do you want John to do it? You were like, yeah. See, that's not what you said when I said, Do you want to do it? You didn't say, yeah. You said, well, I could get someone else and then yeah, that's what you said. When I said, Well, what if John just does it for you? You're like, yeah, yeah, yeah, that, yeah.
Mario Peshev (01:33:55)
I'm happy for John to do that for me,
Jason Cohen (01:33:57)
Yes, you're
Jason Cohen (01:33:57)
happy for someone else to do it, you don't want to.
Jon Sturgeon (01:34:00)
And that's that's a good thing. Go find the people and then put them in motion.
Jason Cohen (01:34:04)
Yeah, that's
Jason Cohen (01:34:04)
totally fine. Just you have to understand that. So that means you can't just go do it yourself. Your heart's not in it and you won't hire the right people and you won't want to and you'll say, I don't know if I should invest, which is what you just said. I don't know if it's worth investing because it's risky. And then you're not gonna do it or do it half-assed, which means it won't work. That's what's gonna happen if you go down that road.
Mario Peshev (01:34:23)
So what's the solution?
Jason Cohen (01:34:24)
You have to hire someone with the
Jon Sturgeon (01:34:24)
I have a I have a
Jason Cohen (01:34:25)
with the vim and excitement of John to do it. Or maybe it's someone in your company and that that none of that maybe none of us currently realize has that fire in them. If only they'd be allowed to do it. It's possible, but it also means they're gonna be making a lot of avoidable mistakes, like I was saying.
Jon Sturgeon (01:34:43)
Like I'm worried right now 'cause I wanna introduce you to Sammy, but I don't want Sammy to think I'm an idiot by sending him somebody who's not that motivated. So I'm I'm genuinely wondering, do you actually care? Like do you actually wanna do it? Are you actually gonna take action or am gonna get a text from Sammy being like, dude, this guy ghosted me?
Mario Peshev (01:34:59)
and that's going to be grossing.
Jason Cohen (01:35:01)
Yeah.
Jon Sturgeon (01:35:03)
I have I have one more question about this whole MA thing. What's stopping you from just stop talking about scale and just make it a lifestyle business and just like the money's great and you live in a country where things aren't that expensive. So have you do you think about that?
Mario Peshev (01:35:20)
The
Mario Peshev (01:35:21)
very reason I was exploring a productized model or an exit is that the nature of the business is more demanding now. Timelines are shorter, response times are immediate, and there's a lot more demand to do things now, respond now, complete stuff now, and there's a lot more stress in that. So I don't see an easy way to do a more lifestyle business because it takes better people to thrive in that environment, which is also limiting the talent boom. As you said, you had to cut head
Mario Peshev (01:35:50)
and also raise salaries to be able to be competitive and deliver that, meaning you can work with fewer people and pay them more and cut your margins. We are facing the same
Jon Sturgeon (01:36:00)
Yeah.
Mario Peshev (01:36:00)
problem here.
Jon Sturgeon (01:36:01)
But the difference is is that I have a president and a COO that come to me and say, These are the decisions I wanna make, yes or no? And I say yes. And I'm meanwhile
Mario Peshev (01:36:09)
Well, yes.
Jon Sturgeon (01:36:10)
I'm on a podcast hanging out with you.
Mario Peshev (01:36:13)
I mean, now you're flexing.
Jon Sturgeon (01:36:14)
So no no no no dude you you have key
Jason Cohen (01:36:15)
No, Mario, you could
Jason Cohen (01:36:16)
you could be doing this right now. That's why we were establishing how much profit you have. You could have invested some of that profit into this at this very moment. And of course you're thinking, but how will I ever make it back? But what John has pointed out is the business could be two or three times the size by next year, by the end of next year, with the right team in place. That's the answer to that question. but you have to be excited to go create that future. If you're not excited to do that, because it's not easy, if you're not excited to do that.
Jason Cohen (01:36:44)
and make that investment in both money and your time and people, then yeah, of course the of course the outcome won't happen. That's true.
Jon Sturgeon (01:36:51)
And look, you have key man risk for an and A perspective because you're in the weeds, but you have key man risk now for yourself because it sounds like if you get hit by a bus, the business goes to zero.
Mario Peshev (01:37:03)
Why do I care? That's the business problem after me.
Jon Sturgeon (01:37:05)
It's sh wait, no no no. you're it you
Jon Sturgeon (01:37:08)
hit hit by a bus and you're kinda paralyzed, you still have a family, you're not dead. So now you care.
Jason Cohen (01:37:11)
Ha ha ha.
Mario Peshev (01:37:11)
That's X, that's X. Okay, that's X, okay, fair.
Jon Sturgeon (01:37:15)
But do you see that? you have to figure out key man risk now regardless of and A because it has to run without you and then you will probably enjoy it more because you're molding it and shaping it from the outside, not from the inside.
Jason Cohen (01:37:27)
So, and it's easy to think, well, I'm just hiring people and then telling them what to do so that I'm not there. But what it really means is like John was just saying, with with the president and the COO, what you're doing is hiring people who elevate and improve the whole business. it's not just getting you out of the weeds, it is getting you out of the weeds.
Jason Cohen (01:37:45)
But actually the the the point of it isn't to get you out of the weeds. The point is that you're not as good as as other people at almost anything that's at the business. And when you have people that are better at each of those things, the whole organization is so much better. The whole or the whole company performs better and it's more fun because it's fun when these different things are working really well. When you have a great manager like a COO or president who's making great calls on people, that is fun.
Jason Cohen (01:38:13)
And when you have marketing people who are actually good at marketing and they're generating more genuinely good leads, that is fun. And when sales are going up, that is fun. And and you're learning automatically just by osmosis, not even on purpose. Just like I said, I tried affiliates, but then it was really fun when affiliates started working really well and I saw what that was. And that doesn't mean I'm now an expert.
Jason Cohen (01:38:34)
I'm not, but it's really fun to work alongside really excellent people in that one area. It's just fun. As well as
Jon Sturgeon (01:38:40)
Jason
Jason Cohen (01:38:41)
being much more effective, also. So it yeah.
Jon Sturgeon (01:38:43)
Jason,
Jon Sturgeon (01:38:44)
in your book, you're like, Look how many people told you that affiliates don't work anymore. So you had to be a little shithead,
Jason Cohen (01:38:48)
Yeah, yeah, yeah. It's right in the introduction.
Jon Sturgeon (01:38:50)
you had to be a shithead and be like, fuck you, I'm gonna figure it out, right?
Jason Cohen (01:38:54)
Yeah, yeah, yeah.
Jon Sturgeon (01:38:54)
That was another twenty bucks by the way, for mentioning his book. Fuck.
Jason Cohen (01:38:57)
No, no, it's a flat rate, remember?
Jon Sturgeon (01:38:59)
fuck.
Jason Cohen (01:39:01)
No,
Jason Cohen (01:39:01)
I get unlimited. I get unlimited. You're the unlimited guy.
Mario Peshev (01:39:02)
Unlimited mentions.
Jon Sturgeon (01:39:03)
that's actually really funny. I love it.
Jason Cohen (01:39:07)
so so yeah, So
Jason Cohen (01:39:08)
And for MA, do you need to do it? It depends on why you got bought. The more you got bought because running this team and with your clients is important, then the key-man risk is vitally important because you can't run the current business with this client without you. So then it's a very big deal. On the other hand, if someone's buying you because they just want your prompts they want all these AI things you built.
Jason Cohen (01:39:34)
They don't want your team, they don't want you. I'm I'm exaggerating on purpose. They don't want anything, they just want your code. Then there is no key risk because whatever, you're not there anyway. They don't care. Now, I I can't imagine being bought for six million dollars.
Jason Cohen (01:39:47)
as an agency and with agency financial calculations because even in good times that's not how agencies were valued. I may be wrong. maybe John will say otherwise, but I I just can't believe that. Yeah.
Jon Sturgeon (01:39:57)
Yeah, actually I can I can weigh in on this
Jon Sturgeon (01:40:00)
from actual experience.
Jon Sturgeon (01:40:02)
I d I sent out with Hypergen, I did another project with them where I was like, I want to reach out to every private equity person on planet Earth to and I got
Jon Sturgeon (01:40:10)
48 positive responses out of like 3,000 emails, 16 meetings and three LOIs. And all three LOIs viewed me as a hybrid between an agency and a SaaS because of the recurring model. So it was actually an increase, but it wasn't like beautiful SaaS numbers. And this was in 2023. So that might be something to think about for a better multiple. Is it is interesting to people
Mario Peshev (01:40:34)
Can you share the rough ballpark of what sort of multiples you're looking into?
Jon Sturgeon (01:40:38)
I don't
Jon Sturgeon (01:40:39)
remember dude. It was better than three to four EBITDA but slightly, like five maybe five or six EBITDA or whatever, something like that.
Mario Peshev (01:40:45)
Yeah,
Jason Cohen (01:40:45)
Yeah, I would
Mario Peshev (01:40:45)
okay.
Jason Cohen (01:40:46)
have said five X EBITDA for a healthy company. Healthy means like you're growing 50 to 100% year over year. have really good EBITDA, high employer retention, high customer retention, which besides the growth rate, you have those things, I think. Right?
Mario Peshev (01:40:58)
Well, yeah, last year is 60%, So yes.
Jason Cohen (01:41:02)
Right. You're not investing in go to market in a way that would create that. You could, but you're not at the moment. and so five X EBITDA sounds rich because you don't have the growth story, but you do have the other stuff, so okay. And plus there's the AI thing. But even if we said that, you know, we're not talking about six million. Not not even close, right? So so
Mario Peshev (01:41:16)
Yeah.
Jason Cohen (01:41:17)
that's why I say I don't think you're gonna get there if we say I'm selling it as a consulting business with consulting financials.
Jason Cohen (01:41:23)
On the other hand, what's also true is that people are overpaying for AI stuff right now. By paying, I mean investors and purchasing. Okay. So my mind goes right to your story of I went from 60 to 30. I'm rounding off. I went from 60 to 30 employees and grew my output thanks to my AI. And
Jason Cohen (01:41:42)
That is because while everyone in the world, and I mean everyone, says they're using AI to become more effective and more efficient and this and that, almost nobody is. The elite are, but almost no one is, actually. But guess what? I have the metrics to prove that it really happened. Because I already did it. It's in the past.
Jason Cohen (01:42:01)
And if we've already done that, guess what? We're going to continue to be even more efficient. We're going to continue to push the boundaries on AI. And now I believe you because anyone that can implement it the this much, now you you can keep going, I believe you. So then I would ask, okay, what is it worth and to whom?
Jason Cohen (01:42:18)
To have AI that actually freaking works to do these kinds of business transformation projects. Business transformations like really complex integrations between all kinds of systems, including finance, revenue, sales, service, ERP. I mean, because there's
Jason Cohen (01:42:34)
large companies that want internally to make that transformation. They're like, Accenture quoted me a hundred million dollars, but I could buy you for only 10 million and you could just do it. See what I'm saying? That's see I'm getting like
Mario Peshev (01:42:44)
Yeah.
Jason Cohen (01:42:44)
to the six million somehow, right? Because Procter and Gamble needs to do this crap. And they are talking to people like Accenture to do it. And you're like, what? Like you can just you can just own this forever in-house, All you gotta do is pay 10 million for me to shut my doors and we'll just keep going.
Jason Cohen (01:42:59)
And of course they don't care about your sales team or your go-to-market. What? They don't need that. They just need your engineering and it so now I'm just making this stuff up because I don't know who's in the market looking for that. I don't know, but but just what's plausible, it's even out there.
Jason Cohen (01:43:12)
here's another thing. I'm a public company now. I need to tell Wall Street that I'm transforming my business with AI. I have to tell Wall Street that. My stock price, worth billions of dollars, depends on me telling a narrative to Wall Street that I can back up, that I'm transforming my business with AI. I have to. And it's worth billions of dollars to me.
Jason Cohen (01:43:34)
So if you can help that narrative in certain specific ways, is that worth 10 million? Are you kidding me? What? So I I would not for one second think about how do I sell my consulting business I would think how can I use my proved.
Jason Cohen (01:43:48)
story of AI transformation with a company that values that way more than I could even imagine so that they'll pay me what I need to get paid. Jon what do you think about that?
Jon Sturgeon (01:43:58)
I'm not an MA guy,
Jason Cohen (01:44:00)
Okay.
Jon Sturgeon (01:44:00)
and I've never sold a business. So I only have opinions that are the opinions of a toddler, but I go to the human level where I'm like, what makes you happy, dude? You know, there's other options too, like taking chips off the table, you know, like you can get a little investment and just, you know, im improve your life. Like there's so many things, but I think that based on everything I've seen so far, this is not a sellable business.
Jon Sturgeon (01:44:23)
And until it starts making you ridiculous money and you're not involved anymore, only then could it be sold, I think.
Jason Cohen (01:44:30)
Yeah, as an agency business, no doubt, you've got to get growth. There's just there's just no two ways about it.
Mario Peshev (01:44:35)
Yeah.
Jon Sturgeon (01:44:35)
Mario,
Jon Sturgeon (01:44:35)
would you do this all over again? Would you do it?
Mario Peshev (01:44:38)
No, no. What I started in a completely different type of business. But if I sell, I'll have to start something new probably.
Jason Cohen (01:44:46)
Well, there are, I John said there's other options. There are other options. Here's just two very quickly. One is you do what you just said. I would go start another company. Great. Put this company into harvesting profit mode. Go get that efficiency to 90% so that you're throwing off more than a million in EBITDA every year. And use that to fund the next company.
Jon Sturgeon (01:45:07)
That's what I'm doing. I literally spun out
Jason Cohen (01:45:08)
And as one, as one trails
Jason Cohen (01:45:09)
off over the years, because you agree it'll take years to go away, not not a month. So as that trails off, the other one's coming online, we hope. And that's what you do. in that case, though, I would say, but you need a president or
Jason Cohen (01:45:21)
general manager who's running that business that you are no longer paying attention to because the new startup's going to take all your time. And we're right back to that, but with a different mindset of why. So then what I would do is I and I think John maybe you said this earlier, an entrepreneurial style person who sees this as the ability to basically come in as the CEO of a startup they didn't have to start from scratch.
Jason Cohen (01:45:43)
But that's how they're feeling. You're giving them some equity in it. Like the whole nine yards that they it's really like this super late starting co-founder of the next chapter of this business, sort of an idea, right? So they're highly, highly motivated and let them go do stuff like read redo go to market and try to grow that, try to grow that business. Let them do it. While you
Jon Sturgeon (01:46:00)
Yeah. So
Jason Cohen (01:46:03)
get paid, let's say half a million dollars a year
Jason Cohen (01:46:05)
So that's one option. How's that strike you first?
Mario Peshev (01:46:08)
Definitely food for thought. In all fairness, all options are reasonable. The thing is, I don't expect an easy exit anytime soon, meaning that the next few years are going to be hard work. Yeah.
Jason Cohen (01:46:20)
I I disagree completely.
Jason Cohen (01:46:22)
Only if your goal is to sell the agency as an agency, then you have a very difficult row to hoe because you're gonna have to show big growth to get anywhere near a good multiple.
Jason Cohen (01:46:31)
As opposed to if you said, you know what, I like the idea of just getting the hell out. I want a strategic
Mario Peshev (01:46:37)
Hmm.
Jason Cohen (01:46:37)
buyout for AI reasons. You could try to get that done in nine months. And I mean done like it's finished in nine months. You get you you find a banker and now most bankers are not worth anything, but there's some people that are good at this. There's some people that know how to do this and have done it hundreds of times. And you're like,
Jason Cohen (01:46:55)
It's gonna take a couple of months to get our story straight, our our decks done, and and get it lay out, lay the land of who we're gonna go out. And then well, it's a little late in the year because you don't wanna be doing that in even November. So we get our shit together so that by end of January, start of February, we're actually going out and having conversations so that by March, April we have our our short list and we've signed an LOI maybe.
Jason Cohen (01:47:17)
And it's a couple more months of diligence, or maybe not, because again, they're only buying the AI. So maybe there isn't that all that diligence. So that we're done by the beginning of summer. some kind of timeline like that. And you just focus on that. If if if you were to go down that path.
Jon Sturgeon (01:47:31)
And and Mario, I'm excited for you because you're not an excitable person, so I'm just gonna be excited for you. Fuck you.
Jason Cohen (01:47:37)
Mm-hmm.
Jon Sturgeon (01:47:37)
but I'm excited for you with Jason's idea of spinning off something new that you can get excited about and just using the cash to to build a new thing that you're actually motivated about. And here's something that I find helps me because when I hear about titles, president, CEO, my brain just tunes out. I'm like, fuck that. I think about it as every business needs four things. We need a hustler.
Jon Sturgeon (01:47:59)
A hipster, a nerd, and a daddy or a mommy, right? So
Jason Cohen (01:48:04)
Ha ha.
Jon Sturgeon (01:48:05)
I'm the hustler. I'm the guy who likes to get on the street and talk to people, right? The hipster is somebody who knows what's good, like who's cool, like who's like marketing, like all that shit, right? The nerd, dude, that's you. You're the nerd. and then the daddy, this is just like a mentor, like somebody who's like in the business, maybe they have a little percent, and they've done what you want to achieve, so that there's some sort of
Jon Sturgeon (01:48:24)
parental oversight, right? And they don't have to be co-founders. They could be like actual employees, but that needs to be the complimentary set so that you stay in your lane, you're like, I don't want to deal with the hustler shit. I just wanna think about the nerdy shit while these other guys do their own functions. And I think you being the jack of all trades and wearing this many hats, it's probably gonna burn you out if you keep doing it.
Mario Peshev (01:48:46)
It is. It is.
Jason Cohen (01:48:47)
He might be burned out now.
Jon Sturgeon (01:48:49)
Maybe. Or it's really late in Bulgaria right now, so you probably want to go to bed.
Jason Cohen (01:48:53)
Well it is,
Jason Cohen (01:48:54)
but I'm just thinking about the top of the call, pessimistic about the industry.
Jason Cohen (01:48:58)
I have to grind this out for three years and try to sell it and then and then whenever we suggest, you could hire this person, you could go do this, you go do that. It's always like, Yep, yep, yep. The only time, Mario, that you've lit up is when I said, well what if John just goes and does this? And you're like, yes.
Jason Cohen (01:49:13)
That was the one time I heard you emphatically like anything we've talked about.
Mario Peshev (01:49:17)
There's less on my plate, yeah.
Jon Sturgeon (01:49:17)
'cause I fucking rule, right, Mario?
Mario Peshev (01:49:19)
Obviously, yeah, I mean, that's the energy, the answer. But yeah, I mean, just...
Jason Cohen (01:49:22)
But but that's because
Jason Cohen (01:49:23)
you don't have the energy is what I'm saying. That's so I'm not I'm not claiming you're burnt out, but I feel like you either are or you're on that end of things of just like 'cause just like you don't have that spark.
Mario Peshev (01:49:34)
I can use more help, that's 100%. Be it a general partner, VP of sales, whatever it is. I mean, there's a lot of work and I need more help, 100%.
Jason Cohen (01:49:44)
but I could imagine you calling up those PE people that you now have a certain kind of relationship or indirect relationship with, or at least they know you're good, right? And
Mario Peshev (01:49:52)
Hmm, yeah.
Jason Cohen (01:49:54)
you're like, you know, I do for you what I I mean, I I do that for other companies, have you ever thought of having an in-house team?
Jason Cohen (01:50:01)
That we would just go to every one of your portfolio companies now and the future and fix them up.
Mario Peshev (01:50:06)
and we sell it as a retainer right now essentially and yeah doing it exclusive
Jason Cohen (01:50:10)
Now now you are, but what I'm saying is you could sell your business.
Mario Peshev (01:50:13)
doing it exclusive for in-house fully focused and stuff i i love the idea i'm not sure if it's sellable this way but with the positioning being AI first great
Jason Cohen (01:50:22)
So
Jason Cohen (01:50:23)
there are PEs that have in-house teams.
Jason Cohen (01:50:26)
So for them it's not weird. They've already made the decision to have some talent like that.
Mario Peshev (01:50:31)
I see that in buying finance companies, legal firms, integration, I see that a lot, but yeah.
Jason Cohen (01:50:38)
Or yet another thing is what I said earlier about sometimes a bigger company needs this capability and will buy a team is essentially like an aqua hire or something. Maybe they have tech, maybe they don't, but they'll just buy it just to have the capability, right? And so I'm I'm just gonna make up the numbers. There's 10 PE firms that will take your call instantly because you have a relationship with them and they know you're good.
Jason Cohen (01:51:00)
The call could be, hey, we've started talking to people about maybe acquiring the business. What we're finding is that larger companies, they just see, we could just apply this to AI and we could save hundreds of millions of dollars of costs slash opportunity costs over the next five years. Maybe we should just snap you up for five or ten million. And we've we've talked to several people who are starting to think that way. Hey, we want Mario in house, basically.
Jason Cohen (01:51:23)
so I'm calling you as almost a courtesy of like, hey, we have a good working relationship. You have a portfolio of companies. I've always liking with you. Do you think any one of your portfolio companies would maybe want to preempt this? Because, know, I've been talking to people at five, six million, but you could preempt that with a eight, ten million. We could just say, screw it, let's go.
Mario Peshev (01:51:41)
Good stuff. Well, Jason, the positioning king. Lots of good insights. well,
Jason Cohen (01:51:44)
Yeah, I'm bad at marketing, good at positioning. That's right.
Mario Peshev (01:51:46)
what I can say is I need Jon's hustler sales guys to pump up revenue and meanwhile work with Jason's investment bankers to explore the AI opportunities and then bridge both together. This sounds
Jon Sturgeon (01:52:00)
Yes.
Mario Peshev (01:52:00)
like a plausible next nine months project.
Jason Cohen (01:52:03)
I would say one month project. Nine months?
Jon Sturgeon (01:52:05)
Yeah. Just
Mario Peshev (01:52:07)
Nine months to close the other part.
Jon Sturgeon (01:52:08)
dude, we'll be we'll be dead by then.
Jason Cohen (01:52:10)
to close the whole thing. yeah, yeah, yeah, right, right. Okay. Yeah.
Mario Peshev (01:52:11)
Yeah, no, no, no, no.
Mario Peshev (01:52:14)
The rest is starting tomorrow.
Jon Sturgeon (01:52:15)
Yeah, if you work with Sammy, he can have a sales guy in your Slack channel ready to look at in like a day. And that's how you should treat it. How can I do this now? Have urgency.
Mario Peshev (01:52:24)
Yeah, well send one intro, I'm definitely interested in chatting with them.
Jon Sturgeon (01:52:28)
Awesome.
Mario Peshev (01:52:29)
Sweet. Excited. See?
Jason Cohen (01:52:29)
Look, we said it all.
Mario Peshev (01:52:31)
I got excited. I got excited.
Jason Cohen (01:52:34)
Look at that. He's excited.
Jon Sturgeon (01:52:34)
There it is.
Jon Sturgeon (01:52:35)
I'm sure after a couple of shots of Rakia,
Mario Peshev (01:52:37)
Rack yeah, yeah you got it right.
Jon Sturgeon (01:52:39)
there you go. You probably start bouncing off the walls, right?
Mario Peshev (01:52:42)
Yes, yes indeed. I'm going wild, I'm going crazy. Jumping
Jon Sturgeon (01:52:45)
I love it.
Mario Peshev (01:52:45)
on rooftops like Spider-Man.
Jason Cohen (01:52:46)
that's awesome. So we said a lot of things. you might have preliminary meetings about M&A overhauling the sales and marketing somehow or another. Productized consulting is a no. That's a that's a great decision. John has the challenge where number of customers greater than number of employees,
Jason Cohen (01:53:00)
I would recommend, since you don't want to fire anyone, I can tell. Great. Well, then that just doubles down on needing to overhaul sales and marketing, because another way to get number of customers more than number of people is to add 15 more customers without hiring anybody else. That that sounds
Mario Peshev (01:53:13)
Yeah.
Jason Cohen (01:53:13)
way better than firing people, doesn't it? So like do that.
Jon Sturgeon (01:53:16)
I would I would do both, but
Mario Peshev (01:53:16)
Great.
Jon Sturgeon (01:53:18)
it's your life.
Jason Cohen (01:53:19)
You can do
Jason Cohen (01:53:19)
both. I'm just trying to see what he's gonna actually do.
Mario Peshev (01:53:22)
and there are recommendations to you for Sammy and also talking to Alex and HyperGen. So, you know, there are several motions that could be unlocked literally starting tomorrow.
Jason Cohen (01:53:31)
and man, we really beat you up. So I hope you you know that's in love and and and because we want you to be successful and happy.
Mario Peshev (01:53:37)
I truly appreciate it. definitely... soaking your wisdom as best as possible and a massive homework and several action items for this week. So very grateful. Thanks a lot for doing that.
Jason Cohen (01:53:47)
yeah, this was this was really fun.
Jon Sturgeon (01:53:47)
And I
Jon Sturgeon (01:53:48)
I like you guys more than a friend. It's fun hanging out.