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Model Demo- March 18, 2021

Last Updated: 2021-03-26, by Jakub Jablonsky
Estimated Time to Complete: 1 hour 43 minutes

Transcript

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Nikola Djokovic: hey guys.

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Nikola Djokovic: we'll just wait a minute or two for Nick to join.

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David Hirschfeld: Good.

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greg cohen: Is the sort of agenda for today, like if we've watched the video what's what's.

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Nikola Djokovic: The general rule.

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Nikola Djokovic: we're going to go over.

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Nikola Djokovic: A bit more in depth descriptions and we're going to model some examples for you guys and explain like what you need to do to achieve what you want, basically.

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Nikola Djokovic: yeah Nick you're here.

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yep.

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it's going guys.

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Nicholas kozmin: cool yeah so this.

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Nicholas kozmin: What we can do is just create some.

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Nicholas kozmin: Great a couple models, if some of you guys want to model your business, we can.

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Nicholas kozmin: We can use one of you guys as an example and then we can play with some inputs and.

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Nicholas kozmin: Just kind of show you how it works just with the live DEMO and show you how you how you can get insights and compare different states so.

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Nicholas kozmin: How does that sound you guys is there, I guess, is there any before we start is there anything in particular that you guys wanted to cover.

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Nicholas kozmin: Just we don't leave anything else.

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nope.

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Okay.

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Nicholas kozmin: So.

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Nicholas kozmin: What we'll do.

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Nicholas kozmin: Is we will create a.

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Nicholas kozmin: model for scratch.

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Nicholas kozmin: and

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Nicholas kozmin: yeah we'll go through it and will show how this is.

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Nicholas kozmin: This can be used to model different states, which I think is.

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Nicholas kozmin: which are really important.

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Nicholas kozmin: yeah i'll just show you i'll just get into it and we'll just do a DEMO so Does anyone want to volunteer for.

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Nicholas kozmin: To be the subject, or do you want to just use a hypothetical.

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Nicholas kozmin: case.

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Nicholas kozmin: Yes, hear me just making sure.

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David Hirschfeld: I want to see a hypothetical case.

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Nicholas kozmin: Okay cool.

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Nicholas kozmin: So let's do.

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let's do a test here.

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Nicholas kozmin: So let's pretend.

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Nicholas kozmin: we'll start from scratch so we're going to have zero customers from the get go let's say we have.

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Nicholas kozmin: 30 K in the bank.

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Nicholas kozmin: And this is the product.

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Nicholas kozmin: Economics so let's say.

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Nicholas kozmin: we'll sell something for $1,000 a year.

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Nicholas kozmin: The realization rate is the rate.

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Nicholas kozmin: The rate at which the revenue turns into cash, so this is affected by the.

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Nicholas kozmin: delinquent rate.

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Nicholas kozmin: The cost to fulfill is the cost to deliver the things, so the one minus the gross margin so typically in SAS or service or Internet info businesses that custom fields around 510 percent.

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Nicholas kozmin: And I like to put support in here as well, so if I need to support a customer I like to bundle that into the cost to fulfill so the cost to deliver the customer results.

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Nicholas kozmin: The time to collect is the out of this.

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Nicholas kozmin: Contract amount, how long are we taking to collect the the cash, and this is we're assuming it's a.

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Nicholas kozmin: equally distributed over this timeframe.

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Nicholas kozmin: So if it's over a year we'll use 365.

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Nicholas kozmin: The refund rate is pretty standard usually like 60 days or 30 days, and then you can play with that that shouldn't be too much higher than one to 2% if it's if it's high ticket like this.

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Nicholas kozmin: Turn rate, if you want to include your renewal rate or your turn right.

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Nicholas kozmin: We can just assume that we're starting off so.

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Nicholas kozmin: let's assume the churn rates 50% for.

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Nicholas kozmin: The same price as the first offer with the same, and this is like the contract length, so this time to renew is the is the first time, or is the.

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Nicholas kozmin: The period between the first offer and the renewal, so if it's renewed monthly than.

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Nicholas kozmin: This would be 30 days and the time we 30 days and then this would be whatever 1000.

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Nicholas kozmin: For 12 hours is 660 a month, you can model it monthly doing it that way, if you want to we're going to use your.

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Nicholas kozmin: we're going to collect over the year the cost to sell the renewal, this is the cost that you pay.

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Nicholas kozmin: This is the amount that you pay somebody to sell and upsell or renewal, so this could be like a support person or salesperson getting paid 5% of that price, which is this price here.

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Nicholas kozmin: The time to collect the renewal will set that equal to the 365 days.

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Nicholas kozmin: And the cost to fulfill the renewal is going to we're going to make it the same as the customer filled the same product or the initial product, and then the renewal rate of the renewal is the.

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Nicholas kozmin: same it's kind of like the decay rate right so 50% of the people who renew over here are going to renew again and then 50% of those people are going to renew after.

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Nicholas kozmin: The.

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Nicholas kozmin: Second, renewal.

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Nicholas kozmin: So.

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Nicholas kozmin: that's with respect to the product.

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Nicholas kozmin: If you're just starting typically that churn rate, you can assume it to be.

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Nicholas kozmin: Like 100%.

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Nicholas kozmin: If you just want to be if you're just starting from scratch, because you don't really know what the churn rates, going to be, you can hypothesize a term right but.

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Nicholas kozmin: You don't really know so, then the cost to sell I like to.

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Nicholas kozmin: When you're just starting out and you have like one salesperson you can call it 15%.

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Nicholas kozmin: Over time that'll probably get a little bit lower around 10 to 12%, this is a sale cycle length, so this is.

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Nicholas kozmin: Very $8,000 offer typically like 14 days is Max sales cycle length.

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Nicholas kozmin: and

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Nicholas kozmin: Then we'll get into the actual marketing and this is where our model differs from a lot of the other models it's like a bottom up it's not top down there's no leaps of faith in this cash flow projection there it's all.

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Nicholas kozmin: it's all bottom up, so when we're doing outbound prospecting let's just we'll hold.

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Nicholas kozmin: will start just with one marketing channel so that outbound salaries $3,000 a month that's pretty standard, the number of contacts per month that that person has hit or will hit is can be set to 2000, which is good.

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Nicholas kozmin: we'll start off with one SDR, but we can bear that number this number is very important, the rate at which a contact turns into a disco or a lead is 2% and we can play with this number to show how important that is.

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Nicholas kozmin: And how that affects cash flow the time to market is the.

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Nicholas kozmin: length of time between the initial email and the lead.

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Nicholas kozmin: The average time and then this this number is also very important, which is the lead conversion rate so out of anyone who books, a DEMO than.

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Nicholas kozmin: 8% of those people a disco like just a qualification call So anyone who becomes a lead 8% of those people will turn into customers and that's going to be improved over time with targeting improvements sales process improvements, etc.

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Nicholas kozmin: we're not going to use a viral leave this out for later we will talk on a viral component, a little bit later.

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Nicholas kozmin: And we will set the fixed costs equal to say there's two like co founders 10,000 bucks a month, they have to carry their mortgages and.

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Nicholas kozmin: pay the grocery bills and we're not going to assume any upfront costs, we can do that if you will, if we want to we're not going to carry any debt, but we can do that if we want to and we're not going to.

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Nicholas kozmin: Will island the fixed costs per 100 customer increase a little bit later so that's like as you're scaling up.

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Nicholas kozmin: We will pretend there's a 22% tax rate in the area that we're doing the evaluation.

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Nicholas kozmin: and inflation or every 2% and the discount rate will be 9% use for.

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Nicholas kozmin: def method and then there's some other the revenue multiples and the iba multiples these are just you can play with these whatever you know, whatever your.

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Nicholas kozmin: Whatever the trend is these days, sometimes these.

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Nicholas kozmin: get a little bit out of whack what you can compare the DCS method with the back of the envelope methods and really all these things, all these back of the envelope methods are trying to do is is approximate the.

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Nicholas kozmin: The area under the cashflow curve there present value of that cash flow there ended a cash flow curve so yeah so what's neat about this model is that.

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Nicholas kozmin: Because it's bottom up like.

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Nicholas kozmin: where's you're not you're not there's not a lot of leaps of faith.

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Nicholas kozmin: and

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Nicholas kozmin: It it it get it it models a cash flow a little bit more accurately than some of the other models and it also allows you to determine like where you can go wrong right so, for example.

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Nicholas kozmin: let's set this cash in the bank equal to zero, this will determine how much money we need to get to this state.

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Nicholas kozmin: or get to a cash flow positive.

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Nicholas kozmin: So you can see here the cash consumption is $45,000, which means that area under the negative part of this curve is 45 K, so we need at least 45 K to get going with the terminals just that cash equal to zero let's say we had 50,000 in the bank.

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Nicholas kozmin: That cash consumption.

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Nicholas kozmin: will be zero.

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Nicholas kozmin: Because.

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Nicholas kozmin: The cash curve never touches zero.

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Nicholas kozmin: You know, almost touch it, but it was if you if you have that cash in the bank.

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Nicholas kozmin: So.

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Nicholas kozmin: let's play with some of these numbers and we can we can see how important.

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Nicholas kozmin: The time to collect us so if we collect it over 90 days, instead of 360 days, we can see that intercept it's not going to change the value of the business either.

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Nicholas kozmin: like this is the gcf method valuation.

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Nicholas kozmin: They won't change the value, but what it'll do is it'll yank the intercept to cash flow positive closer to zero.

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Nicholas kozmin: So that's if you guys are things are tight on cash is tight and you don't want to raise it's important to shorten that sales cycle.

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Nicholas kozmin: Not only a sale cycle, with the time it takes to collect.

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Nicholas kozmin: So that's why we're like a big.

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Nicholas kozmin: We, like our customers to collect cash up front, just because it makes it.

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Nicholas kozmin: The likelihood of getting to that intercept is is higher.

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Nicholas kozmin: let's play with the outbound conversion, you can there's no there's no model out there, that that relates, the outbound DEMO booking rate to the market CAP.

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Nicholas kozmin: it's these are a lot of these leaps of faith that people take right like let's say that outbound DEMO booking rate is point 5% everything breaks.

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Nicholas kozmin: Just that with just with one.

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Nicholas kozmin: One person is that, like a a.

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Nicholas kozmin: At the unit level it breaks.

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Nicholas kozmin: So.

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Nicholas kozmin: If you get that up to.

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Nicholas kozmin: You know 1%.

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Nicholas kozmin: You can see that it kind of works.

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Nicholas kozmin: But if we get that up to that standard of 2% then it actually.

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Nicholas kozmin: starts to work.

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Nicholas kozmin: Another.

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Nicholas kozmin: metric that we can play with this this sales conversion rate, so if the sales process is like not standardized or we're selling the multiple segments and.

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Nicholas kozmin: it's it's difficult to sell maybe that rate is set of 8% it's 5%.

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well.

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Nicholas kozmin: you're going to see an intercept shoot over here.

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Nicholas kozmin: And the value of the business is going to be.

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Nicholas kozmin: You know decrease.

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Nicholas kozmin: So this is one benefit of the model it's like.

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Nicholas kozmin: Can we make a go is the thing going to work based on the product, the renewal rate.

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Nicholas kozmin: And the current metrics because everyone's financials like if you're.

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Nicholas kozmin: These traditional financial models there.

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Nicholas kozmin: there's just so many leaps of faith that it just.

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Nicholas kozmin: doesn't really work it doesn't map to reality too well, so that's the.

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Nicholas kozmin: This one is the aim of this one is to map to reality little bit better.

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Nicholas kozmin: So that's the outbound, we can also layer on a map so there's two ways of getting customers like outbound methods and inbound methods we're going to add organic as well, but we can still categorize that as inbound.

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Nicholas kozmin: But let's say instead of using outbound prospecting we wanted to use inbound.

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Nicholas kozmin: We can determine the cost per.

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Nicholas kozmin: thousand impressions from the platforms like Facebook platform and the Google platform, so if you're like in the US you're targeting males it's going to be around like $5 per thousand people.

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Nicholas kozmin: And let's say we're just starting out, we want to test with $10,000 a month click through rate will hold that to 1% conversion rate will hold that to 2% and the lead conversion rate off leads a role that to 8% and the time to market we're going to hold that.

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Nicholas kozmin: To one day because you can pretty much.

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Nicholas kozmin: Market to people.

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Nicholas kozmin: With inbound channels.

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Nicholas kozmin: In the same day, because you just shoot add that them.

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Nicholas kozmin: So this is only inbound, we can see that.

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Nicholas kozmin: Time profitability is 19 months.

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Nicholas kozmin: With this $10,000 per month fixed costs.

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Nicholas kozmin: And this price point and we're going to need $50,000.

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Nicholas kozmin: To get that.

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Nicholas kozmin: Extra actually if we set that equal to zero it's probably 100,000.

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Nicholas kozmin: We need $100,000 in in startup.

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Nicholas kozmin: money to get there.

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Nicholas kozmin: And another thing to note here is that.

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Nicholas kozmin: No one's related the value of the business to the cpm which is really, really, really important, like, for instance let's say a bunch of advertisers jump into that jump into the pool and that cpm jumps up to 80.

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Nicholas kozmin: Well, all of a sudden, it makes it very difficult.

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Nicholas kozmin: To have a business at this price point so, how would you account for this rising cpm well you'd have to do is you'd have to increase the ticket price let's try to double the ticket price and see what happens.

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Nicholas kozmin: There we go back to.

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Nicholas kozmin: back to something that kind of works.

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Nicholas kozmin: So.

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Nicholas kozmin: yeah in most cases, you can combine outbound with inbound okay so let's say we have one SDR and we're saying we're spending $10,000 a month.

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Nicholas kozmin: Actually let's just go ahead and the future a little bit let's say we have three sd ours spending two grand or $10,000 a month.

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Nicholas kozmin: let's see what this.

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looks like.

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Nicholas kozmin: There we go so three sd ours at that price point.

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Nicholas kozmin: That works really well that's because this offer so let's go back to.

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Nicholas kozmin: 1000 and that's What if you go to the outputs you can see here that it's blending so we have the outbound metrics so the cost per lead.

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Nicholas kozmin: We have the number of customers kept coming from outbound per month, then we have the cost per lead for inbound.

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Nicholas kozmin: And then we have the blended.

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Nicholas kozmin: cost to acquire.

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Nicholas kozmin: cost per acquisition blended between the two contribution after.

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Nicholas kozmin: me Nicholas Nicola.

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Nikola Djokovic: yeah you missed, there is also blended cost per lead.

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Nicholas kozmin: cost per lead yep.

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Nicholas kozmin: blended contribution after marketing, which is like the overall.

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Nicholas kozmin: And then we have the DC F method compared to some of these other methods.

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Nicholas kozmin: and

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Nicholas kozmin: yeah so you can you can combine different.

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Nicholas kozmin: channels and then another thing is like you can create states.

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Nicholas kozmin: Okay, so let's say.

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Nicholas kozmin: let's create you want to model will save this as state number one.

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Nicholas kozmin: Because, as you go through time things will change like we haven't put time dependencies into these inputs, yet, but the way to kind of hack it right now is to just create different models are different states so let's say that.

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Nicholas kozmin: let's call this state one will start with.

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Nicholas kozmin: One SDR.

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Nicholas kozmin: And no inbound.

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Nicholas kozmin: And we'll call this state one day 30 let's say we model it day 30.

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Nicholas kozmin: And then we'll create a second state.

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Nicholas kozmin: and call it day like 100.

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Nicholas kozmin: And this this way you can account for i'm going to make a copy of this model here.

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Nicholas kozmin: This way we can account for the changing parameters right so we're going to call this day to day 100.

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Nicholas kozmin: and

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Nicholas kozmin: At day 100 there are.

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Nicholas kozmin: How many customers.

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Nicholas kozmin: That right Nicola.

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Nicholas kozmin: Just because it sounds like a life's too.

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Nikola Djokovic: yeah it's different when you start with your customers and not.

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Nicholas kozmin: Because of the sale cycle length right.

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Nicholas kozmin: Can we approximate that.

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Nicholas kozmin: Maybe we do day.

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Nicholas kozmin: we'll call it a day.

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Nicholas kozmin: five.

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Nicholas kozmin: To 50 there's 10 customers will call will just approximate that day to 50.

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Nicholas kozmin: And we'll start with 10 customers.

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Nicholas kozmin: and on day 250 we're gonna up the number of sd ours.

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Nicholas kozmin: and

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Nicholas kozmin: Will attack on.

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Nicholas kozmin: inbound.

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service.

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Nicholas kozmin: And then, what we can do.

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Nicholas kozmin: Is compare the models de.

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Nicholas kozmin: With.

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Nicholas kozmin: State one.

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Nicholas kozmin: Day 30.

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Nicholas kozmin: know and this way we can.

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Nicholas kozmin: Some of the inputs changed we're adding SDR is we're adding outbound or we're adding inbound.

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Nicholas kozmin: marketing.

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Nicholas kozmin: And so we can.

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Nicholas kozmin: approximate the change.

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Nicholas kozmin: In value and what the cash flows look like.

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Nicholas kozmin: So that's one way to model.

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Nicholas kozmin: The changes.

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Nicholas kozmin: So i'll stop here, is there any questions or comments before we.

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Nicholas kozmin: buy some other variables.

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Andrew James: It says still just wanted to see like a straight monthly offer where because a bunch of them will come in monthly even though look well we'll do our best to push a manual and all that just see a straight monthly offer and the ability to put in a.

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Andrew James: Like, how do you how do you look at like average sticker it's eight months or something like that, within the modeling tool.

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Andrew James: You know, but I guess I just don't know how to deal affect the stratification of different outcomes.

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Andrew James: When you get to those granular I guess you just make a lot of models and compare them and then average.

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Nicholas kozmin: What you want to do something specific like let's let's try to make cat.

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Nicholas kozmin: let's try to model.

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Andrew James: So let's say i'm.

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Andrew James: Only 500 a month.

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Andrew James: And everybody sticks for six months.

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Andrew James: But 20% of people churn.

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Andrew James: and

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Andrew James: Another 20% of people are on for 24 months.

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Andrew James: And then the specific thing I wanted to look at is.

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Andrew James: A couple different sales cycle weights.

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Andrew James: I mean that's the short term, of the variables in my head.

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Nicholas kozmin: So six months is essentially this number here so call it like 180 days.

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Andrew James: mm hmm.

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Nicholas kozmin: And you said 20% of people stay on or.

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Andrew James: let's say you lose you like everyone sticks her six.

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Andrew James: And then you lose 20, no matter what and keep 20, no matter what.

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Nicholas kozmin: lose 1am I right so.

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Nicholas kozmin: If that means there's an 80% turn right after.

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Nikola Djokovic: What happens the 60% of the people to lose 2020 remain what happens to be 60% it's undefined.

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Andrew James: In Okay, I guess you lose 20% at six months, then.

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Nicholas kozmin: Let me say you lose 25 so you keep.

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Nicholas kozmin: 20 or you lose 20 so you keep at least 20.

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Andrew James: Keep at lose 20 so invert yeah.

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Nicholas kozmin: And it was 20 $500 a month.

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Nicholas kozmin: So what i'm going to do is i'll do 2500 times six.

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Andrew James: To 15 K.

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Nicholas kozmin: yep so 15 K.

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Nicholas kozmin: The time to collect, is it what payment terms, is it equal over that is a monthly over six months.

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yeah okay.

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Nicholas kozmin: And the renewal rate or that renewal price is it the same as 20 $500 a month or is it something different.

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Andrew James: let's let's model as it if it sticks there yeah.

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Andrew James: like this is the straight across the Middle case and then all of our you know our bigger deals in our smaller deals are leaps from this.

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Nicholas kozmin: Okay cool.

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Andrew James: Oh, I see what you're doing so, you would do the renewal.

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Andrew James: For the other six months of that first year.

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Andrew James: Because the model is going to divide by days right.

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Nicholas kozmin: yeah the models in days yeah.

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Andrew James: OK.

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Nicholas kozmin: So the renewal rate of the renewals will call it 80%.

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Nikola Djokovic: You can definitely also do it as a monthly offer just, then the multiplication of renewals will be equal to.

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Nikola Djokovic: So when you do it monthly your turn rate will actually be something along the lines of let's see 4% monthly and that will kind of result in 20% churn rate or six months.

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Nikola Djokovic: So you will kind of just.

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Nikola Djokovic: Equally distribute it turn.

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Nicholas kozmin: I say I don't really like using that monthly like I.

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Nicholas kozmin: Know yeah because I just I like thinking about in a little bit longer terms on the cost to fulfill.

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Nicholas kozmin: Is that within range I.

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Nicholas kozmin: 10 or.

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Nicholas kozmin: 2020 said.

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Nicholas kozmin: And then I do have a salesperson or no.

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Oh yeah you can leave it at 1515.

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Nicholas kozmin: Time to sell cycle length.

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Andrew James: that's the thing I want to very.

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Andrew James: Okay, because there's yeah.

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Nicholas kozmin: Are you do have one person doing outbound or is it.

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Andrew James: yeah we're starting.

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Nicholas kozmin: Okay cool yep and then you can model, the fixed costs as well.

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Andrew James: Their Commission only ago.

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Nicholas kozmin: So yep that's your but.

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Nikola Djokovic: just use the average Commission.

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Nicholas kozmin: yeah it's typically it's typically around that like Commission only are not Commission like just they're going to get somewhere close to this.

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Nicholas kozmin: Do you want to put a fixed cost in.

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Andrew James: I put 20.

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Nicholas kozmin: and

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Andrew James: All that stuff's.

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cool.

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Nicholas kozmin: looks pretty good if you're.

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Andrew James: So monthly free cash flow versus time so that's not revenue that's.

299
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Andrew James: Attracting.

300
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Andrew James: The commission's that subtracting.

301
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Nicholas kozmin: X.

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Andrew James: X COs.

303
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Nicholas kozmin: Okay, marketing and yeah.

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mm hmm.

305
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Nicholas kozmin: The sales cycle length will not really affect this whole thing this number up here it'll affect that intercept so like if it takes 30 days to sell.

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Andrew James: So how do you account for tweaking the model that I mean.

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Andrew James: So I started doing basically like case I was client one right and then.

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Andrew James: Service clients were our initial like proof of concept, so I didn't have to go through that part of the lab process directly I kind of had a service model and then built product for them.

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Andrew James: So I realized that's maybe not a fair assumption, to say that people would stick that long, but like new deals that we're doing now, I mean.

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Andrew James: I don't see it as unlikely that people stick for three to five years, like a healthy percentage of them so wouldn't that curve with that longer stick be.

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Andrew James: Higher.

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Andrew James: Later in those months.

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Nicholas kozmin: The way that you account for the renewal rate of the renewals.

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Nicholas kozmin: hmm This is like the perpetual churn rate.

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Andrew James: And that's based on which term the annual or the second monthly.

316
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Nicholas kozmin: Is this one is based on this second thing here.

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Andrew James: it's based on the renewal okay it's our of our okay yeah.

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Andrew James: I probably said that notation wrong.

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Andrew James: So maybe that's just higher.

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Nicholas kozmin: yeah.

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Nicholas kozmin: Watch then yeah if you're losing 820 percent of your customers every year.

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Then.

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Andrew James: That shows.

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Andrew James: If you put that at like.

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Andrew James: I don't know.

326
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Andrew James: 95 does that curve get more aggressive over time yep.

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Nicholas kozmin: Just hired steeper.

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Andrew James: just wondering like how said that renewal of renewals yeah okay I just starts to look linear.

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Nikola Djokovic: Just a question are your customers, they have an option to renew each month right.

330
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Andrew James: it's a mix.

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Nikola Djokovic: So.

332
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Nikola Djokovic: Your first six months.

333
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Andrew James: Yes, like the base model, they could cancel anytime if they're just straight monthly if they don't have an annual contract yeah.

334
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Nikola Djokovic: Yes, so the way next set it up, basically, you would need to have like monthly renewals off 97%.

335
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Nikola Djokovic: After that, so that it would be equal.

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Nikola Djokovic: Around 80% renewals 46 months.

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Nikola Djokovic: So that's not in the model currently, but if you have 97% renewals each month that will basically indicate that.

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Nikola Djokovic: Ah, you will have 80% customers renewing each six months.

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Andrew James: Okay.

340
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Nikola Djokovic: You get that by taking.

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Andrew James: You divide the inverse by the number of months in that one ad right yeah.

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Nikola Djokovic: It should be I think just six Ruth of 0.8.

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Nicholas kozmin: Okay well Nicola yeah we want to keep it as useful.

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Andrew James: yeah so So the question then is.

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Andrew James: If I.

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Andrew James: Basically what i'm playing with here is if I put in a little.

347
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Andrew James: More proof of concept into the sales cycle.

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Andrew James: It pushes that initial payment out say 30 days.

349
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Andrew James: But it.

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Andrew James: increases all the other conversion rate numbers in theoretically my my short experiences, it gives me a lot easier footing to do bigger deals.

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Andrew James: So it kind of it's like a two yes so that's kind of what i'm thinking through is.

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Andrew James: Like i'm not stuck on any of this i'm just playing with it and you have a new shiny tool and you keep putting time on my calendar to work on it so that's what i'm doing if it's silent i'm asking questions that's the concept i'm playing with my head.

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Andrew James: Is what if that cell cycle goes out plus 30 days.

354
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Andrew James: and

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Nicholas kozmin: yeah if you can, and what that will do is it increases this number two right so.

356
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Nicholas kozmin: Like let's say the like the cell cycle shorter, but the close rate.

357
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Nicholas kozmin: is lower right.

358
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Nicholas kozmin: mm hmm then that'll affect.

359
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affect things.

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Andrew James: When I guess i'm wondering like if you guys have any experience with that over a broader set of customers, what do you see it.

361
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Andrew James: If you give someone kind of a it's not quite a free trial it's it's more like a paid trial right or kind of like a deposit to.

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Andrew James: Proof of concept.

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Nicholas kozmin: Right i've seen it work like if you're just getting a new offer off the ground right like that's but over time, that that sales cycle length will.

364
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Nicholas kozmin: will converge so as you get more customers, you get a better reputation.

365
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Nicholas kozmin: Over time like this that conversion rate will converge and that sales cycle length will converge.

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Andrew James: yeah yeah i'm even experiencing that intuitively like the people that are going to give you 10 or 20 grand or just the ones that are going to do that and the ones that aren't just are the ones that aren't and they're all going to decide in.

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Andrew James: A reasonable number of days, if they're fit.

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Nicholas kozmin: yeah this is.

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Andrew James: How do, how do you model like looping in here like in your sales training like if you have all those variants of an offer you're just going then off the average or would you build a model for each one and average the models.

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Nicholas kozmin: Now you just it's the average mm hmm yeah and they the looping will just affect this number here like i'll give you guys in real life examples of like.

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Nicholas kozmin: What of how it can be used it's just to sometimes seeing is believing right so, for example, let's say your your outbound people are only spending like 500 messages, a month.

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Nicholas kozmin: Which is pretty common for a lot of.

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Nicholas kozmin: folks like.

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Andrew James: 500 blanketing or spirit.

375
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Nicholas kozmin: i've hundred spear.

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Nicholas kozmin: messages you can see here that.

377
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Nicholas kozmin: The difference between 515 hundred messages, a month per SDR.

378
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Nicholas kozmin: This ticket.

379
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Nicholas kozmin: Is massive.

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Andrew James: mm hmm.

381
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Nicholas kozmin: Right like but we kind of knew it, but we didn't know how important it was right, like that's where i'm starting to see value in there with when i'm running models off this thing right like holy crap.

382
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Andrew James: yeah.

383
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Andrew James: Oh there's an intangible between hitting that intercept in less than 12 months and in 30, which is what you're looking at on the 500.

384
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yeah.

385
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Andrew James: Like a people sticking around.

386
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Nicholas kozmin: and

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Andrew James: If you had all those things.

388
00:41:59.010 --> 00:42:01.020
Nicholas kozmin: yeah thrown in the towel exact yeah exactly.

389
00:42:02.400 --> 00:42:06.990
Nicholas kozmin: So that that that that's the difference, but it's like it's so obvious right but.

390
00:42:08.070 --> 00:42:12.240
Andrew James: yeah like I get it intuitively but it's kind of like it is helpful to.

391
00:42:13.470 --> 00:42:15.180
Andrew James: yeah yeah this.

392
00:42:15.360 --> 00:42:18.570
Andrew James: This way, like it makes hitting escape velocity in the model.

393
00:42:21.180 --> 00:42:22.860
Andrew James: Take some pressure off, you know.

394
00:42:24.600 --> 00:42:30.150
Nicholas kozmin: yeah and so like you can just focus that's why it's like there's not there's not many leaps of faith right like.

395
00:42:30.660 --> 00:42:44.460
Nicholas kozmin: If, as long as the REP is doing this getting this number and the sales REP is getting this number in the renewal rate is this number or one why's that number, then you know that's going to work.

396
00:42:46.620 --> 00:42:52.800
Andrew James: So what would you expect at 500 like if they're doing spearing top of the.

397
00:42:54.480 --> 00:42:57.690
Andrew James: Performance curve, in terms of that outbound to lead.

398
00:43:00.510 --> 00:43:01.410
Nicholas kozmin: 500.

399
00:43:02.460 --> 00:43:04.050
Nicholas kozmin: It should be about 2%.

400
00:43:05.670 --> 00:43:06.330
Nicholas kozmin: ish.

401
00:43:07.410 --> 00:43:09.780
Andrew James: Like if they're doing a great job spearing.

402
00:43:11.970 --> 00:43:20.550
Nicholas kozmin: yeah like 500 emails a month that's not enough like they should be doing 30 to 50 a day if they're really.

403
00:43:22.290 --> 00:43:28.140
Nicholas kozmin: Targeted so 50 a day times 30 days ish it's like.

404
00:43:30.630 --> 00:43:31.800
Nicholas kozmin: huh yeah.

405
00:43:32.880 --> 00:43:36.300
Nicholas kozmin: so good as the Irish in like 1500.

406
00:43:38.340 --> 00:43:40.020
Nikola Djokovic: I think, James is trying to.

407
00:43:41.190 --> 00:43:45.510
Nikola Djokovic: check like, how does the quality.

408
00:43:47.400 --> 00:43:48.300
Nikola Djokovic: Change the.

409
00:43:49.350 --> 00:43:52.050
Nikola Djokovic: ratio so on contract to lead.

410
00:43:54.090 --> 00:43:56.430
Nicholas kozmin: It doesn't really it doesn't it.

411
00:43:57.480 --> 00:44:03.000
Nikola Djokovic: it's useful for automated stuff like if you're just selling if you're just sending.

412
00:44:04.230 --> 00:44:05.430
Nikola Djokovic: template emails.

413
00:44:05.460 --> 00:44:09.210
Nicholas kozmin: or something like that automate it will get you like point 3%.

414
00:44:10.200 --> 00:44:13.500
Nikola Djokovic: And then you will be able to have more contacts yeah.

415
00:44:13.860 --> 00:44:21.600
Nicholas kozmin: But it's typically doesn't doesn't really work like point 3% of even a large numbers still.

416
00:44:22.740 --> 00:44:25.890
Nicholas kozmin: Terrible says like 6000 a month.

417
00:44:26.910 --> 00:44:35.400
Nicholas kozmin: that's why i'm a big fan of the personalization right like I get really outperform automating and it's getting worse to like you, because you.

418
00:44:35.970 --> 00:44:36.360
yeah.

419
00:44:37.620 --> 00:44:54.570
Andrew James: yeah but I guess where the quality probably impacts is if you're going to do the work you may as well do it, you, for us, I can validate by looking at their site and what they got going on how likely they are to be qualified, you know.

420
00:44:56.070 --> 00:45:13.410
Andrew James: So maybe that would increase your conversion rate if you're doing the lower if you're doing the more spearing it may be, when increase the lead conversion rate, but the actual lead to customer because of which customers are which outbound prospects are becoming leads.

421
00:45:14.970 --> 00:45:21.690
Andrew James: Because you're getting if you if you do spearing to be more focused on the right person yep.

422
00:45:24.060 --> 00:45:24.630
Nicholas kozmin: it's okay.

423
00:45:24.990 --> 00:45:31.890
Nicholas kozmin: I haven't seen like I would rather go 2% or 3% with 1500.

424
00:45:35.730 --> 00:45:37.770
Nicholas kozmin: Then the blanketing just because you can't.

425
00:45:38.850 --> 00:45:40.710
Nicholas kozmin: mm hmm can't really.

426
00:45:42.330 --> 00:45:45.630
Andrew James: Go on, if you lock up your accounts, then you're in jail and you can't spear right.

427
00:45:45.900 --> 00:45:46.380
Nicholas kozmin: Hopefully.

428
00:45:46.830 --> 00:45:48.030
Nicholas kozmin: you'll get interrupted.

429
00:45:51.900 --> 00:45:53.670
Andrew James: it's just more methods yeah.

430
00:45:53.940 --> 00:46:00.720
Andrew James: that's, not even if you if they only worked, you know Monday through Friday 20 days a month that's.

431
00:46:04.350 --> 00:46:07.320
Andrew James: 75 a day 1500.

432
00:46:08.340 --> 00:46:08.760
Andrew James: A month.

433
00:46:09.720 --> 00:46:11.250
Nicholas kozmin: hmm yeah.

434
00:46:12.570 --> 00:46:14.550
Nicholas kozmin: that's full capacity yeah.

435
00:46:15.120 --> 00:46:15.450
yeah.

436
00:46:17.220 --> 00:46:20.220
Nicholas kozmin: And another thing is like the renewal rate like is so important.

437
00:46:20.310 --> 00:46:21.420
Nicholas kozmin: Like that's something that.

438
00:46:23.430 --> 00:46:24.600
Nicholas kozmin: Was.

439
00:46:26.190 --> 00:46:31.980
Nicholas kozmin: Like the value what's in the churn rates like 90%.

440
00:46:36.840 --> 00:46:40.320
Nicholas kozmin: Again, like everyone knew this but they didn't know.

441
00:46:42.180 --> 00:46:48.240
Andrew James: But yeah that's that's what it makes me wonder, like the question I would answer, or I would ask of the model is.

442
00:46:49.980 --> 00:46:51.360
Andrew James: How many dollars.

443
00:46:52.470 --> 00:46:59.940
Andrew James: In fixed cost is one or three or 5% reduction and churn rate worth.

444
00:47:03.720 --> 00:47:07.590
Nikola Djokovic: That will actually be more cost of fulfilled then fixed costs.

445
00:47:10.500 --> 00:47:12.900
Nicholas kozmin: No, I understand what the question is.

446
00:47:13.920 --> 00:47:23.460
Nicholas kozmin: Like the churn you can see here that the churn rate let's say we can approximate that here by going like 9280 right, we can look at.

447
00:47:25.560 --> 00:47:26.250
Nicholas kozmin: 15.

448
00:47:27.900 --> 00:47:43.530
Nikola Djokovic: Understand I think I understand what is addressing so you can make a model but lower churn rate and higher costs to fulfill and then see how the free cash flow and cash behaves so you will make another model that will have let's say.

449
00:47:45.390 --> 00:48:03.990
Nikola Djokovic: 80% churn rate 30% renewal rate renewals and cost effectively 20 and then you will make a new one that will have the churn rate be let's say 50% then renewal rate renewals 50 but the cost of fellow be like a 30%, so I think that's.

450
00:48:04.020 --> 00:48:09.540
Andrew James: yeah but it wouldn't it would be a nonlinear costs that out, you know it's like you.

451
00:48:10.290 --> 00:48:11.940
Nicholas kozmin: To answer that question right like.

452
00:48:12.420 --> 00:48:15.990
Nicholas kozmin: going from at from 9280.

453
00:48:17.370 --> 00:48:21.720
Nicholas kozmin: went from 15,000 to $37,000.

454
00:48:23.070 --> 00:48:24.990
Nicholas kozmin: And this is kind of linear so.

455
00:48:26.280 --> 00:48:34.440
Nicholas kozmin: That about like 22 grand in fixed costs right.

456
00:48:35.040 --> 00:48:36.720
Nicholas kozmin: mm hmm how much yeah.

457
00:48:36.840 --> 00:48:44.760
Andrew James: So, then you go like Okay, if I could, if I added three K, a month and fixed costs over that many months it's X return.

458
00:48:45.990 --> 00:48:57.450
Nicholas kozmin: yeah exactly like 10% reduction in church and in the churn rate is equal to approximately $22,000 a month.

459
00:48:58.980 --> 00:49:07.920
Andrew James: yeah well i'm for us not churn also yields expansion, because we have usage priced into it so i'm not even modeling that and this.

460
00:49:08.700 --> 00:49:10.950
Andrew James: That there you go so.

461
00:49:11.700 --> 00:49:14.970
Nicholas kozmin: So that could even go high like that 15 K can be higher.

462
00:49:15.510 --> 00:49:19.260
Andrew James: yeah and I guess you could just average it with some expansion in there.

463
00:49:20.160 --> 00:49:20.610
yep.

464
00:49:22.620 --> 00:49:28.800
Nicholas kozmin: So that's a good question right like how like how where should we be investing our resources.

465
00:49:30.150 --> 00:49:41.460
Nicholas kozmin: If it turns high then it's like there's a point, this was I was going to do a video on this inflection point right When does it make sense to really focus on renewals and and product well.

466
00:49:42.780 --> 00:49:44.400
Nicholas kozmin: As soon as you're like not dead.

467
00:49:45.480 --> 00:49:47.190
Andrew James: Basically yeah yeah yeah.

468
00:49:50.370 --> 00:49:55.230
Andrew James: yeah yeah cuz if you aggressively reinvest like.

469
00:49:57.120 --> 00:50:03.810
Andrew James: refunds and stuff if you get a batch of them like this assumes perfect spread out of everything but Murphy will time things.

470
00:50:05.250 --> 00:50:07.530
Andrew James: You know disadvantageous they for you so.

471
00:50:09.360 --> 00:50:09.840
Nicholas kozmin: yep.

472
00:50:09.900 --> 00:50:10.290
So.

473
00:50:12.510 --> 00:50:18.120
Andrew James: If you go to like 13% on lead to customer conversion rate.

474
00:50:19.710 --> 00:50:23.130
Andrew James: And 3% outbound to contact.

475
00:50:26.400 --> 00:50:26.970
Andrew James: and

476
00:50:29.160 --> 00:50:32.370
Andrew James: 500 a month, do you still get there.

477
00:50:37.680 --> 00:50:39.360
Nikola Djokovic: You left turn rated think.

478
00:50:40.410 --> 00:50:40.980
Nikola Djokovic: You want.

479
00:50:42.720 --> 00:50:45.870
Nicholas kozmin: I left the churn rate to 80% I can bring that to you.

480
00:50:50.430 --> 00:50:52.110
Nicholas kozmin: it's still.

481
00:50:59.700 --> 00:51:02.640
Nicholas kozmin: yeah because your ticket prices so high, you will get there.

482
00:51:05.130 --> 00:51:09.600
Nicholas kozmin: And you can see here the effect of having just to sd ours is going to be a huge difference.

483
00:51:10.020 --> 00:51:10.530
Andrew James: mm hmm.

484
00:51:10.860 --> 00:51:11.670
engines.

485
00:51:16.080 --> 00:51:26.100
Andrew James: yeah I guess that would be the other thing is like a ramp rate of sd ours and there it gets out of hand modeling was really fast right to add in all those variables like if you add.

486
00:51:27.420 --> 00:51:33.480
Andrew James: One SDR per month or one and then sales person per month, or whatever, then you come.

487
00:51:34.920 --> 00:51:43.170
Nikola Djokovic: back and bite we do change of some variables, at a given point in time, we will probably release it and.

488
00:51:43.500 --> 00:51:44.520
We could do.

489
00:51:47.040 --> 00:51:47.970
Nikola Djokovic: It right.

490
00:51:48.600 --> 00:51:54.300
Andrew James: that's that's kind of what I was trying to decide it so and then on this model add what's the cell cycle and so.

491
00:51:55.440 --> 00:51:56.250
Nicholas kozmin: 14 days.

492
00:51:57.210 --> 00:52:01.260
Andrew James: So what if you change the one to afford to make it 44.

493
00:52:06.960 --> 00:52:10.680
Nikola Djokovic: It won't change anything too much.

494
00:52:12.390 --> 00:52:18.390
Nikola Djokovic: It will be pretty similar to this, I think it changes that a little bit yeah the.

495
00:52:18.450 --> 00:52:23.820
Andrew James: question is if that change enables conversion to go from eight to 13.

496
00:52:26.310 --> 00:52:33.600
Andrew James: And if that forces them to draw from a more narrow pool of prospects and be more quality about it.

497
00:52:35.790 --> 00:52:44.280
Andrew James: You know, do it looks like we're sixes so it's kind of like do it, you can let me when I look at that it kind of answers the question.

498
00:52:46.920 --> 00:52:47.370
Nicholas kozmin: yeah.

499
00:52:56.010 --> 00:52:59.340
Andrew James: I get this question from time to time, and like advertising stuff.

500
00:53:00.780 --> 00:53:05.730
Andrew James: So I wouldn't know how to answer, other than just I have a sense of it and I run the model, a lot but.

501
00:53:06.960 --> 00:53:13.650
Andrew James: Is there anything you guys have found that helps you indicate which aspect is the most sensitive like when you're here.

502
00:53:16.770 --> 00:53:19.830
Nicholas kozmin: The most sensitive is think.

503
00:53:20.940 --> 00:53:22.920
Nicholas kozmin: Well, for advertising.

504
00:53:24.960 --> 00:53:32.910
Nicholas kozmin: The funnel conversion rate is really important, and this is really important, this is like the sales team how good is the sales team this number here.

505
00:53:33.690 --> 00:53:34.050
Andrew James: mm hmm.

506
00:53:34.470 --> 00:53:49.140
Nicholas kozmin: So the sales team needs to not only be like trained on a process, but they also need to be motivated because, like 8% one month is different than a percent over 12 months consistent right hmm so that's like a big thing.

507
00:53:51.240 --> 00:53:54.390
Nicholas kozmin: And then the cpm is also really important.

508
00:53:55.740 --> 00:53:57.030
Andrew James: mm hmm yeah.

509
00:53:57.120 --> 00:53:59.970
Nicholas kozmin: Like you, can the cpm determines.

510
00:54:01.680 --> 00:54:09.180
Nicholas kozmin: We can determine the price of the thing, based on the cpm right, so if it's at.

511
00:54:15.480 --> 00:54:18.810
Nicholas kozmin: This is a really high thing this is like a $30,000.

512
00:54:19.770 --> 00:54:20.490
Andrew James: offer good.

513
00:54:20.940 --> 00:54:25.770
Nicholas kozmin: yeah like that'll that'll work, however.

514
00:54:27.600 --> 00:54:31.680
Nicholas kozmin: At at cpm let's say that that offers like five K.

515
00:54:33.960 --> 00:54:42.750
Nicholas kozmin: you'll see that you're bound by the cpm your about the market will determine how expensive your thing is going to be, it can be.

516
00:54:45.510 --> 00:54:51.180
Nicholas kozmin: At five and it's because of this churn of the renewal rate is so high.

517
00:54:52.350 --> 00:54:52.680
yeah.

518
00:54:56.520 --> 00:55:06.750
Andrew James: Well, that wouldn't be a bad business either right like you pull them in at five for six months to then try to get them at 2500 a month ongoing yeah.

519
00:55:09.570 --> 00:55:12.690
Nicholas kozmin: But yeah, for instance, like let's say we're doing some fat five K.

520
00:55:14.430 --> 00:55:18.660
Nicholas kozmin: that's not a very good business like it's just hard and.

521
00:55:18.690 --> 00:55:20.250
Nicholas kozmin: yeah risky.

522
00:55:22.230 --> 00:55:30.090
Nicholas kozmin: And that's at at at cpm but let's say the cpm was 10 in early.

523
00:55:32.460 --> 00:55:39.180
Nicholas kozmin: Advertising platforms like like like Twitter right now, and all of not a lot of people are advertising on Twitter i'd be interested to know the cpm on Twitter.

524
00:55:39.930 --> 00:55:44.520
Andrew James: I mean, I have Facebook B2C people a five and $6 cpm start now.

525
00:55:45.240 --> 00:55:45.840
Andrew James: They have.

526
00:55:45.930 --> 00:55:49.200
Andrew James: A finance offer it's a 44 on Facebook.

527
00:55:52.080 --> 00:55:53.010
Nicholas kozmin: And that's us.

528
00:55:53.760 --> 00:55:55.050
Andrew James: mm hmm yeah.

529
00:55:58.830 --> 00:56:01.710
Nicholas kozmin: So you can see, at 10 cpm yeah the thing works at pumps.

530
00:56:02.340 --> 00:56:03.090
Andrew James: Prison yeah.

531
00:56:04.860 --> 00:56:07.980
Nicholas kozmin: So, like that's another thing to be mindful of is that the cpm creep.

532
00:56:09.690 --> 00:56:16.020
Andrew James: Have you looked at in this on the outbound model like a funnel like a book funnel in front of the sales presentation.

533
00:56:17.970 --> 00:56:18.690
Nicholas kozmin: For outbound.

534
00:56:19.500 --> 00:56:24.810
Andrew James: Know for for in prefer at so you go like book to webinar to DEMO to close.

535
00:56:25.830 --> 00:56:30.210
Nicholas kozmin: that's all pretty much baked into this.

536
00:56:31.260 --> 00:56:34.080
Nicholas kozmin: CP like this funnel conversion rate thing.

537
00:56:35.100 --> 00:56:35.520
Nicholas kozmin: Or the.

538
00:56:35.580 --> 00:56:36.000
Andrew James: Right.

539
00:56:36.300 --> 00:56:38.220
Nicholas kozmin: To get a lead yeah.

540
00:56:39.210 --> 00:56:42.030
Andrew James: I guess if you were paying an $80 cpm.

541
00:56:43.110 --> 00:56:50.730
Andrew James: But you sold something to get a lead, you could just work out how much of that cpm are you basically giving yourself a discount on.

542
00:56:53.070 --> 00:56:53.640
Nicholas kozmin: yeah.

543
00:56:54.690 --> 00:56:56.130
Nicholas kozmin: yeah you can do that, like.

544
00:56:56.580 --> 00:56:59.760
Andrew James: How I have a couple that are working, that way right it's a book.

545
00:56:59.850 --> 00:57:07.830
Andrew James: A couple of cells one click and then they get them onto a webinar and they're going to pitch them something higher ticket on the back end those are clients of mine, not mine.

546
00:57:09.240 --> 00:57:17.490
Nicholas kozmin: yep like that works i've seen a lot of like B2C stuff that like that works that's a pretty complex like yeah.

547
00:57:18.780 --> 00:57:24.330
Andrew James: But in the model would you just reduce the cpm you just do the math to reduce the cpm for that.

548
00:57:33.660 --> 00:57:35.550
Nicholas kozmin: yeah because you're kind of liquid eating right.

549
00:57:36.270 --> 00:57:37.380
Andrew James: mm hmm yeah.

550
00:57:40.620 --> 00:57:40.980
Nicholas kozmin: I would.

551
00:57:41.010 --> 00:57:41.520
Andrew James: yeah let.

552
00:57:41.880 --> 00:57:44.640
Nicholas kozmin: me just increase the funnel conversion rate.

553
00:57:46.290 --> 00:57:46.980
Nicholas kozmin: or sorry this.

554
00:57:47.130 --> 00:57:48.060
Nicholas kozmin: This right here.

555
00:57:50.550 --> 00:57:50.880
Andrew James: huh.

556
00:57:57.090 --> 00:57:58.830
Andrew James: funnel conversion rate is.

557
00:57:59.460 --> 00:58:00.420
Nicholas kozmin: Oh yeah you know.

558
00:58:00.600 --> 00:58:02.010
Andrew James: You just have to eat right.

559
00:58:02.400 --> 00:58:05.190
Nicholas kozmin: yeah you would decrease that cpm because.

560
00:58:06.480 --> 00:58:08.760
Nicholas kozmin: The you can approximate it.

561
00:58:08.940 --> 00:58:09.270
Andrew James: Like.

562
00:58:09.450 --> 00:58:10.260
Nicholas kozmin: The amount of money.

563
00:58:11.430 --> 00:58:14.160
Nicholas kozmin: spent to get people to that.

564
00:58:15.000 --> 00:58:26.730
Andrew James: Exactly so like let's say $100 cpm on linkedin but you get a day one, I don't know 60% return on ad spend because they buy some info products, then you just plug for you yeah and you're.

565
00:58:29.160 --> 00:58:32.220
Andrew James: You know, obviously have to know your back in numbers but yeah.

566
00:58:50.310 --> 00:58:52.590
Nicholas kozmin: Yet another component is the viral.

567
00:58:53.970 --> 00:59:03.300
Nicholas kozmin: We didn't really speak to that this this really gets things going like again seeing is believing each customer does 10 invites.

568
00:59:04.770 --> 00:59:05.790
5%.

569
00:59:07.260 --> 00:59:08.460
Nicholas kozmin: conversion rate.

570
00:59:11.280 --> 00:59:14.670
Andrew James: viral time is the delay until they start sending invites.

571
00:59:15.180 --> 00:59:18.330
Nicholas kozmin: No it's the time between the invite and the clothes.

572
00:59:19.140 --> 00:59:19.500
No.

573
00:59:24.750 --> 00:59:27.240
Andrew James: Go viral start is the delay yeah.

574
00:59:28.350 --> 00:59:30.750
Andrew James: So, like if it takes 90 days before they see.

575
00:59:31.920 --> 00:59:34.740
Andrew James: Like before they were willing to recommend.

576
00:59:37.200 --> 00:59:37.620
Nicholas kozmin: huh.

577
00:59:39.780 --> 00:59:46.230
Nicholas kozmin: Okay yeah you can say 90 now, this is the days the start is when they kick in.

578
00:59:51.150 --> 00:59:52.440
Andrew James: From purchase.

579
00:59:53.130 --> 00:59:58.680
Nicholas kozmin: From where these effects start to kick in and time in your whole model right like let's say you're like okay we're going to talk on by.

580
00:59:58.680 --> 01:00:02.250
Nicholas kozmin: Oh yeah yeah I see.

581
01:00:02.610 --> 01:00:05.190
Andrew James: Okay, so it's not customer level.

582
01:00:06.060 --> 01:00:08.250
Andrew James: it's not people send referrals.

583
01:00:08.670 --> 01:00:16.440
Andrew James: 90 days, plus for 60 days, plus or whatever it's we have viral effects that far into the model yep exactly.

584
01:00:20.820 --> 01:00:25.050
Nicholas kozmin: And then, if you wanted to you can model upfront costs like let's say it took you.

585
01:00:26.190 --> 01:00:28.980
Nicholas kozmin: 80 grand to validate all of this stuff.

586
01:00:37.230 --> 01:00:40.050
Nicholas kozmin: This will show up in the cash flow can see it here.

587
01:00:53.820 --> 01:01:01.650
Nicholas kozmin: So yeah it does help just can't like as someone steering it's just modeling out the situation and allows you to make.

588
01:01:04.890 --> 01:01:08.010
Nicholas kozmin: Some decisions mm hmm yeah.

589
01:01:12.900 --> 01:01:17.130
Andrew James: what's the best spearing contact right you've seen.

590
01:01:19.290 --> 01:01:28.770
Andrew James: Like held reasonably consistently maybe like by a founder or someone that's has more status delta than someone that's going to be an SDR that's newer.

591
01:01:29.700 --> 01:01:31.950
Nicholas kozmin: Probably like 5% five.

592
01:01:33.750 --> 01:01:34.860
Nicholas kozmin: Five to 10%.

593
01:01:36.120 --> 01:01:41.790
Nicholas kozmin: In your own warm network it's can be a little bit higher but.

594
01:01:41.880 --> 01:01:43.350
Nicholas kozmin: Like yeah hold yeah.

595
01:01:46.350 --> 01:01:46.530
yeah.

596
01:01:47.640 --> 01:01:50.700
Nicholas kozmin: Okay five 5% one in 20.

597
01:01:51.480 --> 01:01:56.670
Nicholas kozmin: yeah because some people are not even going to open the email right like.

598
01:01:56.700 --> 01:02:00.660
Nicholas kozmin: Only 20% now right yeah.

599
01:02:02.100 --> 01:02:02.910
Andrew James: Did you.

600
01:02:06.090 --> 01:02:13.590
Andrew James: I wonder, did you ever have a way in this to decide when you as a founder would stop doing spearing.

601
01:02:15.390 --> 01:02:16.560
Andrew James: And outbound and stuff.

602
01:02:17.910 --> 01:02:21.390
Andrew James: Again, so I just looked at when you're profitable and you had people going.

603
01:02:22.080 --> 01:02:24.180
Nicholas kozmin: yeah when I had people doing it, and there was working.

604
01:02:26.400 --> 01:02:26.730
yeah.

605
01:02:27.900 --> 01:02:30.510
Nicholas kozmin: yeah because they were gonna get there we're getting similar results to me.

606
01:02:32.820 --> 01:02:35.580
Andrew James: yeah so your time to train one more is worth more than.

607
01:02:37.290 --> 01:02:37.740
Andrew James: One more.

608
01:02:38.940 --> 01:02:40.350
Andrew James: yep yeah.

609
01:02:43.650 --> 01:02:44.520
Andrew James: yeah that's cool.

610
01:02:47.700 --> 01:02:48.030
Andrew James: cool.

611
01:02:49.920 --> 01:02:51.750
Andrew James: Hopefully that was useful interruptions.

612
01:02:55.260 --> 01:02:57.480
Nicholas kozmin: feel free to jump in guys, if you have questions or comments.

613
01:03:00.090 --> 01:03:00.300
yeah.

614
01:03:13.650 --> 01:03:22.860
Conor Deane: Sir, is there an output sheet from this when you enter all your details is there some sort of a PDF report from this, or is it just spit it out on the dashboard there, how do I do that sorry.

615
01:03:24.030 --> 01:03:27.240
Nicholas kozmin: yeah it'll spit out the the inputs and outputs down here.

616
01:03:27.690 --> 01:03:29.370
Conor Deane: Okay perfect thanks yep.

617
01:03:29.460 --> 01:03:32.760
Nicholas kozmin: And you can make this public if you want, you can make this.

618
01:03:34.260 --> 01:03:35.850
Nicholas kozmin: Public to show other people.

619
01:03:36.930 --> 01:03:45.990
Nicholas kozmin: And, but it won't show up in the index unless you tell it if you must you want to share it on the index, but you can just shoot this link.

620
01:03:48.840 --> 01:03:52.230
Nicholas kozmin: This link to somebody that you want to show, and you can just go to.

621
01:03:53.670 --> 01:03:56.100
Conor Deane: My team is basically we're doing.

622
01:03:57.840 --> 01:04:10.380
Conor Deane: m is for education and it's an application SAS application and we're just as kind of where it is on the need to be able to show them this to show them how to monitor.

623
01:04:11.550 --> 01:04:11.880
yep.

624
01:04:16.350 --> 01:04:21.390
Nicholas kozmin: Next, show them descriptions behind yep and there's also descriptions.

625
01:04:22.470 --> 01:04:24.240
Nicholas kozmin: Of all this stuff here.

626
01:04:25.710 --> 01:04:28.710
Are the input and output looks like it yeah.

627
01:04:31.980 --> 01:04:35.640
Conor Deane: Do a run on a 10% conversion rate, do you think that's optimistic.

628
01:04:37.620 --> 01:04:39.900
Nicholas kozmin: A 10% conversion rate for.

629
01:04:40.350 --> 01:04:54.360
Conor Deane: Well, you know if you're buying traffic or driving traffic, I mean some of our conversion rates are being 18 to 40% but just to be conservative we try and run it down to say 10%.

630
01:04:54.900 --> 01:04:57.480
Nicholas kozmin: And between those that don't lead conversion rate or the.

631
01:04:57.480 --> 01:05:00.000
Conor Deane: sale yeah yeah the lead conversion nature.

632
01:05:02.130 --> 01:05:04.440
Nicholas kozmin: yeah like there's a difference between.

633
01:05:06.210 --> 01:05:18.780
Nicholas kozmin: Like qualified lead and lead right like if you have 18% well, you might only get a 2% Lee lead to customer right yeah.

634
01:05:20.910 --> 01:05:23.700
Conor Deane: it's got a good quality it's gotten the right quality leads as well.

635
01:05:24.030 --> 01:05:25.260
Nicholas kozmin: yeah exactly.

636
01:05:26.400 --> 01:05:29.430
Nicholas kozmin: So what i've seen is like with the quiz funnel.

637
01:05:31.410 --> 01:05:40.500
Nicholas kozmin: Perfect Thank you yeah yeah it could be like a lower lead capture it, but a much higher conversion rate.

638
01:05:43.350 --> 01:05:52.140
Conor Deane: Over the country right much higher i'm sure okay so yeah so so it's a lower but it delivers the request form right.

639
01:05:53.280 --> 01:05:54.210
Nicholas kozmin: who's going to work well.

640
01:05:56.700 --> 01:05:56.970
yeah.

641
01:05:58.080 --> 01:06:00.780
Nicholas kozmin: You can also model it with that opt in and then.

642
01:06:01.920 --> 01:06:03.720
Nicholas kozmin: you're looking at two 3%.

643
01:06:08.610 --> 01:06:18.900
Conor Deane: So the way I was going to do it was have the we're going to do, R dds make sure that and use that as a sort of an evergreen quiz and then bring it through.

644
01:06:20.250 --> 01:06:22.500
Conor Deane: To qualifying quiz and then webinar.

645
01:06:24.750 --> 01:06:33.960
Conor Deane: webinar basically that's what we're looking at doing yep give lots of value in the webinar to show like we're you know we're straight up in our offering.

646
01:06:34.770 --> 01:06:35.190
um.

647
01:06:37.530 --> 01:06:40.260
Nicholas kozmin: It so that will that will affect this number here.

648
01:06:44.730 --> 01:06:58.380
Nicholas kozmin: And then, if you're doing like know if you're doing a webinar that cost us that would be zero, or is it really important yeah and then that's time to sell it might with automate stuff it's usually seven days.

649
01:07:00.840 --> 01:07:01.830
Conor Deane: So typically time.

650
01:07:02.730 --> 01:07:07.410
Nicholas kozmin: yeah that's the from the debt, the length of time between the lead in the purchase.

651
01:07:08.100 --> 01:07:15.360
Conor Deane: Okay, and do you need to keep you know sending reminders or how often without you know reckon people's heads, you know.

652
01:07:15.390 --> 01:07:29.610
Nicholas kozmin: yeah yes, like most a lot of customers will buy on the first web webinar presentation about 50% and then 50% will buy on day seven at like our 12th or a lot it.

653
01:07:29.670 --> 01:07:31.950
Conor Deane: was a deadline of you saying look this this.

654
01:07:31.950 --> 01:07:33.270
Conor Deane: offer last such and such.

655
01:07:34.110 --> 01:07:43.650
Nicholas kozmin: yeah and then this typically with this like you're not with automated it could be like two grand or 997.

656
01:07:45.180 --> 01:07:47.760
Nicholas kozmin: there's a cost of a phil is going to be like.

657
01:07:49.140 --> 01:07:50.280
Nicholas kozmin: 5%.

658
01:07:51.450 --> 01:07:52.560
Nicholas kozmin: it's upfront.

659
01:07:53.670 --> 01:08:06.480
Nicholas kozmin: or it could be the 30 days you're doing payment plans refund rate on that it's gonna be a little bit higher say 10% okay turn rate on that unless you're doing like renewals it's probably going to be closer to 90% unless you have like.

660
01:08:06.960 --> 01:08:09.870
Conor Deane: somehow get our contracts last for five years.

661
01:08:10.980 --> 01:08:12.480
Nicholas kozmin: Okay, and.

662
01:08:13.320 --> 01:08:17.550
Conor Deane: we're in Latin or a quarter done for in Lhasa.

663
01:08:19.260 --> 01:08:24.150
Nicholas kozmin: Okay yeah This is like for like it like model upfront.

664
01:08:25.260 --> 01:08:28.860
Nicholas kozmin: That how many what percentage of the lower ticket folks.

665
01:08:30.300 --> 01:08:47.220
Conor Deane: there's only one we have only one price points as per student space, the problem on seat basically for the application, but it usually works at around two and a half grand for your locally and then it goes up it doesn't last for five years.

666
01:08:48.600 --> 01:08:50.160
Nicholas kozmin: Okay that's pretty good turnout.

667
01:08:52.170 --> 01:08:52.410
Nicholas kozmin: and

668
01:08:54.330 --> 01:08:57.090
Conor Deane: here in our own stuff would be six and a half thousand.

669
01:08:58.200 --> 01:08:59.160
Nicholas kozmin: US or.

670
01:08:59.670 --> 01:09:00.690
Conor Deane: No euros.

671
01:09:01.110 --> 01:09:05.100
Conor Deane: Years yeah around them, and they signed for four years.

672
01:09:06.780 --> 01:09:08.010
Nicholas kozmin: Okay, so.

673
01:09:08.130 --> 01:09:09.540
Conor Deane: Because our educational boards to see.

674
01:09:12.600 --> 01:09:22.770
Nicholas kozmin: If there's four years, then you can just you can have a huge time the renewal rate would be four years, four times 365 we go yeah.

675
01:09:22.800 --> 01:09:35.280
Nikola Djokovic: You can also have the habit be yearly but then the renewal reaching renewals will be hundred percent because, in general, you won't be looking too much after those five years to be simulations.

676
01:09:35.700 --> 01:09:36.600
Conor Deane: yellow people.

677
01:09:38.130 --> 01:09:40.920
Conor Deane: To educational sector very conservative they don't like change.

678
01:09:41.940 --> 01:09:43.530
Nicholas kozmin: yeah once once the red red.

679
01:09:45.390 --> 01:09:46.050
Conor Deane: bicycle.

680
01:09:47.580 --> 01:09:50.190
Nicholas kozmin: Right called like tempers not see that.

681
01:09:54.240 --> 01:09:57.840
Nicholas kozmin: And these guys will sign up just for the webinar is there a phone call needed.

682
01:09:58.440 --> 01:10:01.200
Conor Deane: Well it'd be a phone call leaders on a probably a site visit.

683
01:10:02.160 --> 01:10:03.480
Nicholas kozmin: Okay, so, then that costs a.

684
01:10:03.480 --> 01:10:06.090
Conor Deane: lot a lot, a lot of word of my phone alarm and not.

685
01:10:07.110 --> 01:10:18.360
Conor Deane: For the team basically on the side you know i'm actually a lot of the time, the same Greg you guys been because this is what we're changing, and so this is, you know i've come in taking a majority stake.

686
01:10:20.190 --> 01:10:22.110
Conor Deane: Try and wrap it up.

687
01:10:23.940 --> 01:10:27.540
Nicholas kozmin: So the cost of the time to sell might be higher right like if you're gonna.

688
01:10:28.740 --> 01:10:36.570
Conor Deane: yeah it's well actually without getting too into it, but I mean it's there's a not for profit is is.

689
01:10:37.560 --> 01:10:50.880
Conor Deane: Talking on the ground there and funding this and saying look it's a word it's A word now world renowned not for profits and they're putting that in to improve the education system on the ground, you know.

690
01:10:53.430 --> 01:11:03.000
Conor Deane: So it comes with huge recommendation they're keen to change us it's actually the round also signed it's actually the localization that takes the mouth, the most amount of time.

691
01:11:04.140 --> 01:11:15.300
Conor Deane: You know, in terms of support tickets and stuff like that it's crazy on the meantime in terms of actually onboarding yeah you're right, one of the big big pain points is actually one of the things I caught in your dental.

692
01:11:16.350 --> 01:11:31.890
Conor Deane: On your spreadsheet was that yeah, we need to close the amount of time it takes to onboard, we need to hire more support guys, to be able to turn that around so that we can free up guys, to do more, sales work and get their hustle on basically on the ground.

693
01:11:32.850 --> 01:11:33.240
yeah.

694
01:11:34.410 --> 01:11:39.390
Nicholas kozmin: So yeah then taking the time to kill it close the deal might feel like the higher so your model.

695
01:11:39.720 --> 01:11:42.090
Conor Deane: takes it takes about a month actually to close to the election.

696
01:11:45.120 --> 01:11:47.190
Conor Deane: You know committees education that's what committees.

697
01:11:48.210 --> 01:11:48.750
Nicholas kozmin: yep.

698
01:11:52.800 --> 01:11:57.060
Nicholas kozmin: And then the cost to fulfill it sounds like it's less than it's more than 5% if you're.

699
01:11:58.320 --> 01:11:59.670
Nicholas kozmin: If you're adding in support like.

700
01:12:01.470 --> 01:12:02.460
Conor Deane: Cheap Labor is cheap.

701
01:12:04.620 --> 01:12:09.000
Nicholas kozmin: yeah maybe if you're adding in some services as well, it can be a little bit higher.

702
01:12:13.110 --> 01:12:16.290
Nicholas kozmin: And that's 2500 per year per month sorry.

703
01:12:16.500 --> 01:12:18.000
Conor Deane: Are you prepared.

704
01:12:19.140 --> 01:12:20.760
Locally yeah.

705
01:12:22.200 --> 01:12:26.220
Nikola Djokovic: No, not it is per year, but when is it big.

706
01:12:29.520 --> 01:12:31.260
Conor Deane: And it's paid up front.

707
01:12:32.490 --> 01:12:39.180
Conor Deane: In some cases, and then it can be paid monthly depends on the school or the College.

708
01:12:39.960 --> 01:12:46.350
Nikola Djokovic: And then the average will probably be around like hundred hundred and 50 days yeah.

709
01:12:46.590 --> 01:12:53.220
Nicholas kozmin: You can average those okay if half the customers pay up front half paid yearly hundred and 80 right yeah.

710
01:13:02.550 --> 01:13:03.870
Nicholas kozmin: that'll change things a little bit.

711
01:13:15.750 --> 01:13:16.800
Time to renew.

712
01:13:19.830 --> 01:13:24.690
Conor Deane: Actually, the cash flow they're looking at is very similar to what, when I see.

713
01:13:26.370 --> 01:13:27.810
Why you're modeling yeah.

714
01:13:29.940 --> 01:13:30.840
Conor Deane: it's called accuracy.

715
01:13:32.880 --> 01:13:34.350
Nicholas kozmin: bounces around a little bit and now.

716
01:13:46.170 --> 01:13:50.670
Nicholas kozmin: You can model if you already have existing customers, you can let's say you start out like 100 customers.

717
01:13:52.050 --> 01:13:52.290
Conor Deane: Actually.

718
01:14:00.180 --> 01:14:03.960
Conor Deane: need to get rid of six actually the six problem children.

719
01:14:10.650 --> 01:14:15.030
Nicholas kozmin: It looks like there's an upfront costs of 80 grand I have that in there, I wonder that.

720
01:14:26.880 --> 01:14:27.330
yep.

721
01:14:34.140 --> 01:14:34.500
Nice.

722
01:14:40.830 --> 01:14:42.930
Nicholas kozmin: And there's also the Read me too so.

723
01:14:43.950 --> 01:14:44.730
Nicholas kozmin: To explain.

724
01:14:46.260 --> 01:14:50.670
Nicholas kozmin: What this stuff like all the inputs, if you want to just rush through it.

725
01:14:52.500 --> 01:14:54.420
Nicholas kozmin: Where to how to get these inputs.

726
01:14:56.220 --> 01:14:57.810
Nicholas kozmin: So there was.

727
01:15:01.320 --> 01:15:08.610
Conor Deane: Just ask you know for transparency, so you can mean can I am I allowed to give my login to one of my teammates or is it just me.

728
01:15:09.960 --> 01:15:19.110
Nicholas kozmin: yeah you can give your for the models, you can add your teammates to.

729
01:15:20.520 --> 01:15:24.690
Nicholas kozmin: Your account and then give them access to only the models, if you want a.

730
01:15:24.900 --> 01:15:25.950
Nicholas kozmin: Visa yeah.

731
01:15:26.730 --> 01:15:40.920
Nikola Djokovic: processes that the company has access to the models and if you have a member of the company that was role is growth consultant or higher he will see the models okay yeah.

732
01:15:40.980 --> 01:15:44.280
Nicholas kozmin: It was there, an admin yeah company on the.

733
01:15:44.430 --> 01:15:45.810
Conor Deane: Other regular with numbers actually.

734
01:15:46.620 --> 01:15:54.540
Nicholas kozmin: yeah the company admin next year, the company owner can be I mean can give access to the models through.

735
01:15:54.600 --> 01:15:57.060
Conor Deane: color color yeah exactly yeah yeah.

736
01:15:59.460 --> 01:16:02.670
Nicholas kozmin: And then you can also just make it public, and you can send it to folks yeah.

737
01:16:04.050 --> 01:16:04.500
it's great.

738
01:16:06.090 --> 01:16:07.650
Conor Deane: This brings.

739
01:16:09.720 --> 01:16:10.740
cool yeah.

740
01:16:12.210 --> 01:16:18.060
Nicholas kozmin: I think it'll help folks justify things to employees and investors.

741
01:16:19.800 --> 01:16:21.270
Nicholas kozmin: that's what i'm.

742
01:16:22.530 --> 01:16:24.270
Conor Deane: Big time yeah.

743
01:16:27.870 --> 01:16:35.130
Conor Deane: yeah because, as you know, I mean any investor they're interested in two things is the team good on the second thing.

744
01:16:36.300 --> 01:16:46.140
Conor Deane: You know, apart from the product being Okay, have you got customers where your customers, how many customers you got the tram or let's see it on a CD or projections, and this is ideal.

745
01:16:48.990 --> 01:16:51.750
Nicholas kozmin: yeah so and it's less hokey pokey like.

746
01:16:53.280 --> 01:16:56.760
Nicholas kozmin: that's what i've seen to like it's based on the economics of.

747
01:16:57.840 --> 01:17:01.290
Nicholas kozmin: The business and then, if an investor wants to challenge, something that like well.

748
01:17:03.480 --> 01:17:03.780
Like.

749
01:17:04.950 --> 01:17:11.340
Nicholas kozmin: We don't have that conversion rate yeah right now it's like point 5% what's it really worth.

750
01:17:12.480 --> 01:17:12.960
Right.

751
01:17:18.390 --> 01:17:21.090
Nicholas kozmin: So we don't really know who's gonna use this a lot but.

752
01:17:23.700 --> 01:17:24.630
Conor Deane: we'll see I don't know.

753
01:17:29.010 --> 01:17:34.710
Nicholas kozmin: That it's useful guys, if you want to give back just on how you're using it to like just or.

754
01:17:35.730 --> 01:17:36.240
You know.

755
01:17:38.940 --> 01:17:42.690
Nicholas kozmin: What you're trying to do with it is what jobs are you trying to do that.

756
01:17:43.980 --> 01:17:45.330
Nicholas kozmin: That will be useful for sure.

757
01:17:47.400 --> 01:17:58.380
Conor Deane: I think it's from our perspective, a lot of show the team, and they need to tighten up closing times and look at the existing processes, they need to hire a couple of support people.

758
01:17:59.250 --> 01:18:06.750
Conor Deane: Like I was saying earlier on, and yeah just focus on getting the hustle on on ramping up don't basically listen to your own.

759
01:18:07.890 --> 01:18:08.790
Conor Deane: teachings on this one.

760
01:18:10.200 --> 01:18:10.620
yep.

761
01:18:14.370 --> 01:18:16.440
Conor Deane: Right good guys they're ready to go.

762
01:18:21.000 --> 01:18:28.170
Conor Deane: are just wasting time on support tickets so or they could be gotten serious amount of wins each month.

763
01:18:29.520 --> 01:18:29.970
Nicholas kozmin: yeah.

764
01:18:31.170 --> 01:18:36.360
Nicholas kozmin: it's called just say like if you're using it like what did you.

765
01:18:37.410 --> 01:18:41.910
Nicholas kozmin: worry about able to kind of see and what are what decisions were you able to make based on.

766
01:18:43.230 --> 01:18:46.920
Nicholas kozmin: This, like, for example, is like were deciding to.

767
01:18:47.970 --> 01:18:50.160
Nicholas kozmin: Really, invest in the renewals and.

768
01:18:53.580 --> 01:18:59.730
Nicholas kozmin: The like the the software stuff based on modeling yeah.

769
01:19:05.250 --> 01:19:07.920
Nicholas kozmin: Because of the cpm to jumping up so.

770
01:19:10.050 --> 01:19:20.670
Conor Deane: yeah I mean a lot of it is there's very little cost and in terms of getting the leads in because it's nearly pick up the phone and arrive sending a letter.

771
01:19:22.080 --> 01:19:26.940
Conor Deane: Asking for meeting, and you know the market screen, you know.

772
01:19:28.470 --> 01:19:28.800
yep.

773
01:19:32.040 --> 01:19:33.720
Nicholas kozmin: Alright guys so that.

774
01:19:38.550 --> 01:19:49.650
Conor Deane: Martin says some only great to model your financials, but what is interesting is to use it to set kpis Eric eyre's TEAM members near.

775
01:19:52.920 --> 01:20:04.470
Your sales team example during your attentional so it's a lot with the product yep exactly, especially in a meetings for house for the tech team understanding, important to find the features yep.

776
01:20:10.620 --> 01:20:12.870
Nicholas kozmin: yep setting like that's That was one.

777
01:20:14.100 --> 01:20:25.470
Nicholas kozmin: Question we had when we were designing it like okay well it's not really a tool that you can model where you're at right now but it's also setting the kpis and setting the goal.

778
01:20:27.870 --> 01:20:42.210
Maarten van Kroonenburg: And it makes it super like iterative if you know what I what I find interesting is to create like two or three scenarios, like the worst case mid case and best case scenario, and what I see that the techies normally do they don't.

779
01:20:43.620 --> 01:20:54.750
Maarten van Kroonenburg: Like they don't really understand what influence it has on finance, marketing and sales, but this really helps to you know, give them a look in.

780
01:20:55.350 --> 01:21:05.760
Maarten van Kroonenburg: In what their work will potentially do for like devaluation of the company, but also for the free cash flow and does you know reinvesting in more features and.

781
01:21:07.170 --> 01:21:17.010
Maarten van Kroonenburg: Really, this enlightens me especially in you know the corporate innovation stuff especially corporate innovation stuff really don't know what to do with this, and this really helps them to.

782
01:21:17.670 --> 01:21:27.360
Maarten van Kroonenburg: I don't know give the right insights and not just hearing finance at all you have to do this, you have to do it is where i'm going to kill the project that this really gives a lot of insights.

783
01:21:29.370 --> 01:21:29.850
Nicholas kozmin: yep.

784
01:21:30.450 --> 01:21:31.080
Maarten van Kroonenburg: I agree.

785
01:21:32.220 --> 01:21:34.230
Nicholas kozmin: You can show them the churn rate and.

786
01:21:37.050 --> 01:21:42.000
Nicholas kozmin: And the price the features allow them to up the price and.

787
01:21:43.620 --> 01:21:44.130
Maarten van Kroonenburg: Exactly.

788
01:21:44.190 --> 01:21:45.000
Nicholas kozmin: and retention yeah.

789
01:21:45.060 --> 01:21:45.870
Which is like.

790
01:21:47.550 --> 01:21:49.860
Nicholas kozmin: The difference can be like $20 million or.

791
01:21:51.060 --> 01:21:51.330
yep.

792
01:21:56.100 --> 01:21:58.200
Nicholas kozmin: And an amazing sales team can't save.

793
01:21:59.430 --> 01:22:03.240
Nicholas kozmin: A poor offer you say you can also.

794
01:22:04.980 --> 01:22:07.800
Nicholas kozmin: remind them of their importance this the product people.

795
01:22:11.940 --> 01:22:12.750
Nicholas kozmin: curious to play.

796
01:22:12.780 --> 01:22:20.460
Maarten van Kroonenburg: around with the model tool for new product we're going to roll out the model tells me intuition, here we get in touch.

797
01:22:23.160 --> 01:22:25.980
Nicholas kozmin: yeah just K or Chi.

798
01:22:27.750 --> 01:22:29.130
Nicholas kozmin: Do you want to.

799
01:22:30.630 --> 01:22:35.430
Nicholas kozmin: just put your email address in here and we'll give you access we haven't given access to.

800
01:22:36.690 --> 01:22:37.530
Nicholas kozmin: Everybody yet.

801
01:22:41.100 --> 01:22:42.180
Nicholas kozmin: We made a little note.

802
01:22:43.620 --> 01:22:45.060
Nicholas kozmin: Here models beta there's.

803
01:22:47.490 --> 01:22:48.660
Nicholas kozmin: 36 people in their.

804
01:22:51.840 --> 01:22:52.500
Nicholas kozmin: corner.

805
01:22:56.340 --> 01:23:00.240
Nicholas kozmin: yeah if you have access, you should see that little models button here.

806
01:23:01.710 --> 01:23:02.100
Nicholas kozmin: and

807
01:23:04.650 --> 01:23:05.640
let's just make sure.

808
01:23:06.840 --> 01:23:10.050
Nicholas kozmin: you're in there, Peter, can you just make sure that guys in their.

809
01:23:12.720 --> 01:23:15.030
Nicholas kozmin: Models time doesn't show up in my yep.

810
01:23:20.430 --> 01:23:21.870
Nicholas kozmin: Okay yeah make sure Martin.

811
01:23:24.690 --> 01:23:26.880
Nicholas kozmin: has access Peter Thank you.

812
01:23:31.170 --> 01:23:31.500
yeah.

813
01:23:45.270 --> 01:23:49.170
Nicholas kozmin: yeah and you should be able to see that there are some templates to that we're making.

814
01:23:50.220 --> 01:23:51.480
Nicholas kozmin: So in that.

815
01:23:53.220 --> 01:23:59.190
Nicholas kozmin: If you'd like a template to you can just post just make a post and just say hey make this template and we can add a template.

816
01:24:11.640 --> 01:24:12.030
Conor Deane: there.

817
01:24:26.280 --> 01:24:27.660
Nicholas kozmin: Alright guys good stuff.

818
01:24:31.470 --> 01:24:32.010
and

819
01:24:35.430 --> 01:24:36.870
Nicholas kozmin: If there's any other questions are.

820
01:24:39.060 --> 01:24:40.620
Nicholas kozmin: Like there's no silly questions.

821
01:24:41.850 --> 01:24:43.380
Edward Cruz: hey Nick I got a question for you this is.

822
01:24:45.510 --> 01:24:55.290
Edward Cruz: hey you'll have to bear with my dogs here, possibly so just a heads up um i've missed about half an arby's at a drop off for a call but i'm wondering how this might work over.

823
01:24:56.430 --> 01:24:59.190
Edward Cruz: Sorry gotta throw them out here for Nice validation.

824
01:25:00.750 --> 01:25:02.040
Edward Cruz: I can open the door there we go.

825
01:25:03.960 --> 01:25:05.220
Edward Cruz: Let me just throw them out here, sorry.

826
01:25:06.330 --> 01:25:06.930
Edward Cruz: So.

827
01:25:09.120 --> 01:25:31.140
Edward Cruz: For let's see since joining sales process um there's been a lot of focus on which niche for me to pursue and it became pretty clear that continuing to work with startups was not the ideal nation so corporations right with learning budgets came into focus and then also.

828
01:25:32.520 --> 01:25:45.060
Edward Cruz: programs that work with founders to accelerators and incubators that focus on the business side and not necessarily on the technology side or another possible organizational customer.

829
01:25:46.140 --> 01:25:54.810
Edward Cruz: Municipalities or governments that want to have programs that focus on technology or startups or innovation or yet another and so i'm wondering if.

830
01:25:55.530 --> 01:26:11.820
Edward Cruz: What your thoughts are on using this as a tool for I guess doing deeper discovery on the niches like which one based on their characteristics would maybe be the most fruitful to pursue is that a sort of a reasonable kind of premise about how this could be used.

831
01:26:12.930 --> 01:26:18.690
Nicholas kozmin: yep like this spits out that profit per customer per month value here so.

832
01:26:21.000 --> 01:26:25.440
Nicholas kozmin: For when you're getting started you want that number to be pretty high.

833
01:26:26.730 --> 01:26:33.930
Nicholas kozmin: Like over $700 is is good, because then it's not going to take you forever to get profitable.

834
01:26:34.470 --> 01:26:37.470
Nicholas kozmin: Right so yeah this is this is.

835
01:26:38.580 --> 01:26:49.590
Nicholas kozmin: where it came from was just to show we spent a lot of time working with customers to determine what where should they focus what niche should they focus on, and instead of just telling them.

836
01:26:51.030 --> 01:26:53.070
Nicholas kozmin: It was it was good to show them so.

837
01:26:53.340 --> 01:26:54.240
Edward Cruz: Nice okay.

838
01:26:54.570 --> 01:26:54.990
You can.

839
01:26:56.910 --> 01:27:06.840
Nicholas kozmin: Yes, set the price the realization rate the cost to fulfill the time to collect all of that all of those inputs will spit out.

840
01:27:08.430 --> 01:27:10.200
Nicholas kozmin: A profit per customer per month.

841
01:27:11.940 --> 01:27:12.390
Edward Cruz: Right.

842
01:27:12.690 --> 01:27:18.330
Nicholas kozmin: yeah and yeah you can compare the different niches right like you have niche one inch to cetera.

843
01:27:18.690 --> 01:27:19.230
Nicholas kozmin: And then.

844
01:27:19.350 --> 01:27:23.850
Nicholas kozmin: that'll tell you like, you know how fast you you to get profitable.

845
01:27:25.980 --> 01:27:26.610
Nicholas kozmin: and

846
01:27:27.630 --> 01:27:34.380
Nicholas kozmin: yeah like, for instance, for example, if, like the the time the sales cycle like on one thing is really high then.

847
01:27:34.860 --> 01:27:37.260
Nicholas kozmin: Competitive thing at all yeah.

848
01:27:38.010 --> 01:27:54.210
Edward Cruz: The corporations, I mean expect the sales cycle to be really you know, complicated and lengthy right maybe versus you know, like something like an accelerator program right it's going to you know have fewer moving parts.

849
01:27:55.890 --> 01:27:59.070
Edward Cruz: Here, yes, so that that sounds like a.

850
01:28:00.690 --> 01:28:10.680
Edward Cruz: Big differential there i'm also thinking that channel or the sales and marketing side would be very different like as if if I were to stick with working directly with.

851
01:28:11.520 --> 01:28:20.790
Edward Cruz: startup founders so sort of like a direct to consumer type model I would be probably looking at inbound marketing i'm guessing I haven't really even focused on that.

852
01:28:21.300 --> 01:28:33.120
Edward Cruz: But with the others who would be outbound initially for sure um, and so it sounds like you know I can't even baseline kind of where i'm at in terms of my current.

853
01:28:33.960 --> 01:28:47.100
Edward Cruz: Market focus and just validate that that is not the way to go right just going comparatively that that would be more you know less profitable or more difficult niche to pursue.

854
01:28:48.210 --> 01:28:57.150
Nicholas kozmin: yeah like if i'm validating something that you can validate the cpm with quick tests with advertising test within a couple days.

855
01:28:57.540 --> 01:28:58.920
Edward Cruz: Nice yeah yeah.

856
01:28:59.730 --> 01:29:01.110
Nicholas kozmin: yeah man yeah.

857
01:29:01.860 --> 01:29:08.250
Nicholas kozmin: yeah like I like to validate that costs and then the price of the thing.

858
01:29:09.270 --> 01:29:10.680
Nicholas kozmin: And how easy, is it.

859
01:29:12.030 --> 01:29:16.620
Nicholas kozmin: to sell like yeah I was reading this Warren Buffett book.

860
01:29:17.760 --> 01:29:27.510
Nicholas kozmin: And he was comparing like awesome businesses of like mediocre ones with gruesome businesses and the big thing was like that the cash collection.

861
01:29:28.830 --> 01:29:29.460
Nicholas kozmin: Was.

862
01:29:30.810 --> 01:29:32.790
Nicholas kozmin: A characteristic of the awesome business.

863
01:29:33.540 --> 01:29:39.060
Nicholas kozmin: Nice Academy of the examples like candy candy they pay cash for their candy.

864
01:29:39.720 --> 01:29:40.620
Nicholas kozmin: Payment plans.

865
01:29:41.730 --> 01:29:46.230
Edward Cruz: Right, do you have any thoughts on you know corporations or you know.

866
01:29:46.710 --> 01:29:57.390
Edward Cruz: Government municipal type clients versus on you know, like I mentioned like accelerator incubator programs, I mean just did a gut level do you have any thoughts on that because I.

867
01:29:57.930 --> 01:30:08.970
Edward Cruz: I have not yet 100% committed to you know corporate clients for this new platform i'm still you know rebooting or mechanism as well, so there's time to figure it out.

868
01:30:10.170 --> 01:30:15.420
Edward Cruz: So any thoughts on that i'm sure i'll be putting in the models and i'm happy to share them with you also for you.

869
01:30:16.290 --> 01:30:25.740
Edward Cruz: You know, to make them public if that's helpful right for people to be able to see how that exercise works, but anyway just wondering what your thoughts might be on that as well.

870
01:30:27.030 --> 01:30:37.170
Nicholas kozmin: on it, it depends on the price right like yeah if the price is big it's a quarter million dollars or higher than.

871
01:30:38.190 --> 01:30:39.840
Nicholas kozmin: It can be a very good business.

872
01:30:40.920 --> 01:30:43.320
Nicholas kozmin: um it's.

873
01:30:43.860 --> 01:30:47.490
Edward Cruz: I just think you'd be like if proceed model right like per year.

874
01:30:48.960 --> 01:30:56.490
Edward Cruz: So really without much variation in the price it's sort of more based on the value of the outcomes you produce right.

875
01:30:56.790 --> 01:30:57.510
Edward Cruz: So yeah.

876
01:30:57.900 --> 01:31:07.320
Nicholas kozmin: What I what i've seen work is like if you're going to do that, like you want to you don't want to go in blind right typically someone on the team.

877
01:31:09.030 --> 01:31:10.800
Nicholas kozmin: Is that person who's buying.

878
01:31:12.510 --> 01:31:13.230
For example.

879
01:31:14.460 --> 01:31:22.320
Nicholas kozmin: we've had one mastermind client who wanted to sell it into the enterprise service bus to say oh in an enterprise into CMOs.

880
01:31:23.550 --> 01:31:25.470
Nicholas kozmin: Because he was that person he's like yeah.

881
01:31:26.520 --> 01:31:34.980
Nicholas kozmin: Like I could sell this no problem right so like for me to go and go through that discovery that's going to take me some time.

882
01:31:35.610 --> 01:31:36.510
Edward Cruz: Right yeah.

883
01:31:36.600 --> 01:31:43.200
Nicholas kozmin: Right, so I think it's yeah it's a function of the domain expertise, you have someone on the team who really understands it then yeah.

884
01:31:43.890 --> 01:31:44.310
Edward Cruz: got it.

885
01:31:45.420 --> 01:31:54.810
Edward Cruz: good advice good advice I have a really good colleague who's the previous chief learning officer at Raytheon so i've got a good kind of at least you know, like resource.

886
01:31:55.290 --> 01:32:07.170
Edward Cruz: To I can call upon to help guide it a bit, but accelerating incubators would be a much better fit for me personally, in terms of domain expertise so that's that's great advice right.

887
01:32:08.010 --> 01:32:25.020
Edward Cruz: And i'm thinking as I plug it into the model of a little show probably that that collection time will be much shorter and i'm just i'm just assuming that the sales process will be less complicated right like corporate you know medium to large sized Corporation.

888
01:32:27.360 --> 01:32:38.820
Edward Cruz: So alright cool yeah This is great it's got me definitely thinking more broadly, and also then deeply about how those things will play out with us so yeah thanks very much go.

889
01:32:38.910 --> 01:32:39.300
abroad.

890
01:32:56.190 --> 01:32:56.490
Good.

891
01:33:07.350 --> 01:33:11.760
Nicholas kozmin: yeah the minimum inputs is around 700.

892
01:33:13.830 --> 01:33:19.470
Nicholas kozmin: Or the p dot value for getting something off the ground is about $700 just.

893
01:33:21.810 --> 01:33:22.710
Nicholas kozmin: rough.

894
01:33:25.080 --> 01:33:26.400
Nicholas kozmin: And i'll show you guys why.

895
01:33:28.920 --> 01:33:31.650
Nicholas kozmin: let's see if we can get an equal to 700 minutes ago.

896
01:33:45.450 --> 01:33:47.070
Nicholas kozmin: Zero customers.

897
01:33:52.410 --> 01:33:53.640
Nicholas kozmin: And a fixed cost of.

898
01:33:55.980 --> 01:33:58.680
10,000.

899
01:34:01.140 --> 01:34:01.560
On.

900
01:34:05.220 --> 01:34:06.870
Nicholas kozmin: yeah we're going to reverse engineer.

901
01:34:08.220 --> 01:34:09.150
Nicholas kozmin: The 700.

902
01:34:11.190 --> 01:34:12.300
Nicholas kozmin: So.

903
01:34:15.480 --> 01:34:24.510
Nicholas kozmin: let's do this custom fulfilled understand time to collect this is our time to sell bring that down to 30.

904
01:34:27.150 --> 01:34:29.130
Nicholas kozmin: think that will bring that up a little bit.

905
01:34:35.490 --> 01:34:36.450
Nicholas kozmin: i'm 50.

906
01:34:39.270 --> 01:34:42.420
Nicholas kozmin: So this $700 value here.

907
01:34:43.920 --> 01:34:46.080
Nicholas kozmin: Is kind of like the minimum amount.

908
01:34:48.120 --> 01:34:52.380
Nicholas kozmin: To get something working in two to three months at a $10,000.

909
01:34:53.520 --> 01:35:00.720
Nicholas kozmin: fixed costs so imagine like you and your partner, you have like these fixed costs, maybe it's 5000 a month in fixed costs or 6000 a month and fixed costs.

910
01:35:02.010 --> 01:35:02.820
Nicholas kozmin: well.

911
01:35:06.330 --> 01:35:10.260
Nicholas kozmin: you're going to need to get profitable in a couple months to avoid.

912
01:35:11.280 --> 01:35:20.460
Nicholas kozmin: It not like you don't have an infinite amount of time to get it working so it's usually within two to three months if you can get a probably a high chance of.

913
01:35:21.780 --> 01:35:29.640
Nicholas kozmin: It working so that's kind of where that lower limit of 700 comes from, so the soul, the.

914
01:35:31.200 --> 01:35:33.480
Nicholas kozmin: The unit level with one person doing it.

915
01:35:35.280 --> 01:35:44.850
Nicholas kozmin: It will and i'll even do this outbound messaging there's no salary, you can do 1500 messages, a month there's one person.

916
01:35:46.140 --> 01:35:47.940
Nicholas kozmin: With 2% and.

917
01:35:49.200 --> 01:35:49.950
8%.

918
01:35:51.210 --> 01:35:52.200
Nicholas kozmin: So this is.

919
01:35:55.950 --> 01:35:57.930
Nicholas kozmin: A sole founder.

920
01:36:03.240 --> 01:36:04.980
we'll put this equal to zero.

921
01:36:26.310 --> 01:36:29.250
Nicholas kozmin: And that's will put this equal to 7000 a month.

922
01:36:32.610 --> 01:36:33.750
Nicholas kozmin: And you can see that.

923
01:36:34.950 --> 01:36:37.410
Nicholas kozmin: It will kind of replace the income.

924
01:36:40.260 --> 01:36:41.670
Nicholas kozmin: At month like four.

925
01:36:45.510 --> 01:36:46.740
Nicholas kozmin: And that's where that.

926
01:36:47.790 --> 01:36:55.800
Nicholas kozmin: Value comes in, so that's a little bit high that's $1,000 profit per customer provides, but if we do 8000 let's bring it down to 700.

927
01:37:04.290 --> 01:37:07.470
yeah it's getting closer to seven that $700 mark.

928
01:37:11.700 --> 01:37:18.390
Nicholas kozmin: So that's for that no one else on the team you doing all the work fixed costs are low.

929
01:37:22.350 --> 01:37:24.990
With a 15% cost of film maybe it's.

930
01:37:26.220 --> 01:37:28.200
Nicholas kozmin: Maybe it's a little bit lower maybe it's 10%.

931
01:37:30.690 --> 01:37:31.830
Nicholas kozmin: Because you're doing our work.

932
01:37:35.730 --> 01:37:38.970
Nicholas kozmin: And there you go that's like the replacing your income.

933
01:37:41.940 --> 01:37:43.170
model yeah.

934
01:37:45.450 --> 01:37:48.090
Nicholas kozmin: And will notice that it doesn't work if it's like three grand.

935
01:37:51.300 --> 01:37:52.860
Nicholas kozmin: That profit per customer per month.

936
01:37:55.530 --> 01:37:56.700
will not work.

937
01:37:58.200 --> 01:38:05.250
Nicholas kozmin: be a little bit too low and it takes you 16 months to replace your income, which is not really feasible.

938
01:38:06.630 --> 01:38:09.360
Nicholas kozmin: So that's why that that price is so.

939
01:38:10.500 --> 01:38:11.010
Important.

940
01:38:26.520 --> 01:38:27.300
Alright guys.

941
01:38:34.260 --> 01:38:44.370
Nicholas kozmin: connoisseurs of interest Nick any thoughts on trudging through years for stowers Irish fans happy with yours pound sterling, not to use dollars and.

942
01:38:51.810 --> 01:39:05.040
Conor Deane: i'm just wondering culturally making people what people resent from stateside I know you're putting out I think i'm just loving stateside if people would resent having to pay $3 or three euros, excuse me.

943
01:39:06.180 --> 01:39:06.630
Conor Deane: For.

944
01:39:06.690 --> 01:39:09.120
Nicholas kozmin: It depends on who the customer is right, like if.

945
01:39:09.120 --> 01:39:14.670
Nicholas kozmin: Someone has used to dealing with heroes then that's fine sure yeah.

946
01:39:16.110 --> 01:39:16.440
Okay.

947
01:39:18.060 --> 01:39:20.520
Conor Deane: I was just wondering culturally or locally if.

948
01:39:21.570 --> 01:39:22.830
Conor Deane: there's a kind of a.

949
01:39:23.490 --> 01:39:26.610
Nicholas kozmin: Culture culturally like there might be some.

950
01:39:28.140 --> 01:39:30.690
Nicholas kozmin: hesitation with us people.

951
01:39:32.340 --> 01:39:33.270
Nicholas kozmin: Because it is.

952
01:39:34.350 --> 01:39:47.160
Nicholas kozmin: A little bit different I think in all of my years of doing like SAS stuff i've only bought maybe one thing that was priced in euros really typically the US or even the European companies they price in US dollars.

953
01:39:53.040 --> 01:39:55.620
Conor Deane: Okay, thanks yep.

954
01:39:56.850 --> 01:39:57.990
Conor Deane: Well, good stuff guys.

955
01:39:58.920 --> 01:39:59.340
alright.

956
01:40:00.390 --> 01:40:03.570
Nicholas kozmin: So if that's it for questions guys what we'll do that in Nicole it's been.

957
01:40:05.340 --> 01:40:10.440
Nicholas kozmin: A good session today will post this review or this replay as well on the models index.

958
01:40:11.700 --> 01:40:12.240
Nicholas kozmin: and

959
01:40:14.010 --> 01:40:19.140
Nicholas kozmin: yep appreciate the time guys and we will we'll see you in the platform.

960
01:40:26.130 --> 01:40:39.660
Nicholas kozmin: That you wanted to sell for specific desired outcome breaking even by X and X negative cash flow why I really love to be able to solve very specific desired outcome, basically, what you just refer to as reverse engineer.

961
01:40:44.970 --> 01:40:45.510
station.

962
01:40:46.530 --> 01:40:48.000
Really on a lot of now yeah.

963
01:40:51.360 --> 01:40:54.090
Nicholas kozmin: Okay yeah so you want to reverse engineer.

964
01:41:00.930 --> 01:41:06.510
Nicholas kozmin: yeah i've found it kind of you see what I did there for the 700.

965
01:41:07.980 --> 01:41:13.620
Nicholas kozmin: What I did what I did was I like I set certain things to be constant and then played with.

966
01:41:14.970 --> 01:41:19.110
Nicholas kozmin: A few of them to kind of tweak it to get it working so.

967
01:41:21.030 --> 01:41:23.610
Nicholas kozmin: yeah it could be done with.

968
01:41:25.020 --> 01:41:36.120
Nicholas kozmin: A probably a automated at some point but it's if you're trying to get to that like it's just playing with the it might be a few minutes of just playing with the numbers and tweaking.

969
01:41:37.590 --> 01:41:37.890
yeah.

970
01:41:40.290 --> 01:41:42.330
Nicholas kozmin: So, but that's good.

971
01:41:45.150 --> 01:41:46.080
Nicholas kozmin: that's good feedback.

972
01:41:52.080 --> 01:41:57.660
Nicholas kozmin: yeah the techie and we've had some people on a team mentioned that too, but i'm like does it work like.

973
01:41:59.040 --> 01:42:01.680
Nicholas kozmin: We want it just to work to get the insight.

974
01:42:09.060 --> 01:42:09.480
cool.

975
01:42:11.850 --> 01:42:26.070
Nicholas kozmin: yeah and if any of you guys have successes, where you can convince an employee of something or you changed direction provided value, are you got an investor on board just let us know because to us that's the that means it's work.

976
01:42:29.070 --> 01:42:29.460
Nicholas kozmin: alright.

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Nicholas kozmin: Alright guys appreciate the time and attention and we'll see you later.


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