Interviewee: Oh, John, I am more than ready to ignite. I’m glad to be here brother.

Interviewer: Yes! Dan is the founder of Tech Emergence dot com, which is a media and market research firm to spread the global conversation around the applications and implications of artificial intelligence, with the eventual goal of informing global policy. Tech Emergence is funded by the sale of his multi-million dollar e-commerce business, Science of Skill dot com. Dan take a minute, fill in some gaps from that intro and give us a little glimpse of your personal life.

Interviewee: Yeah. So as mentioned, artificial intelligence is what I’m knuckled down and focused on and really has been my life goal for the last five years but you know, Science of Skill is maybe something that I think will resonate with a lot of folks in this audience. That was a business kind of built around a personal skill, so I imagine a lot of the people tuned in are, you know, they teach something online or they coach folks online.

I know you do a good deal of that. Science of Skill was basically me teaching self-defense and martial arts on the Internet and grew that out to a whole bunch of instructors other than myself so that it could be something saleable, so kind of an Internet marketing fellow who is using that as a method to bootstrap a technology venture.

Interviewer: Well Fire Nation, if you’re recognizing Dan’s voice, it’s because he rocked the mike, and we were just talking about this in the pre-interview chat, almost a thousand episodes ago exactly. In fact it was more like a thousand and sixty episodes ago, so that’s a lot of fun. If you want to hear his back story, you know, we talked a lot about Science of Skill and some other things, definitely go check out that episode, Episode 711.

But today Dan, we’re going to talk about a few different things, but before we get into that, what would you say right now your area of expertise is? Is it specifically artificial intelligence?

Interviewee: Yeah, I mean I’d say, you know, the, I do so many interviews in the AI domain, it’s sort of the near term future of the implications of AI in business that’s certainly a domain of expertise, but I think in terms of just getting through the sale of the e-commerce company, I would definitely say automation and dashboards for kind of online sales is probably an area where, whether I like it or not, I was forced to get good at that stuff, so I think that’s kind of my bag.

Interviewer: What’s something that we don’t know about AI that we probably should as entrepreneurs?

Interviewee: Yeah. You know, the good news is John, I actually get asked this a lot on sort of like the smaller business or Internet marketing world. Fortunately right now there’s not too much that folks in the small business world are going to have to sort of move and adapt with respect to AI. For some people this might be relevant, I’ll give you a fact that the closest that this is going to come to our world or sort of the Internet marketing world in the near term is companies with a lot of very high volume that sell almost entirely online, where every customer interaction is trackable.

These are going to be the companies that will sort of be the first to adapt AI. So if your business is under like 20 million bucks and/or you sell extremely high tickets stuff or you sell services, you’re less likely to be leveraging artificial intelligence in marketing, but if you grow a very large e-commerce store, in order to sort of do the personalization, recommendation and dialed in sales of the big boys like the Amazons, eventually AI will have to be adapted.

Fortunately though, not something most of your audience has to be nervous about today. But that’s kind of as close as the impacts are going to come in the next maybe two, three years to the world of IM and e-commerce.

Interviewer: All right, we’re going to shift the conversation a little bit and Fire Nation, we’re going to be talking a little bit about bootstrapping to start because, you know Fire Nation, everybody’s goal should be to, you know, get a seed round, to find an angel investor, take on millions and millions of dollars.

That can be some people’s goal and that’s fine, but it shouldn’t be everybody’s goal because, you know, let’s be honest. There are some negatives, as well as positives to doing that. There are both sides of the equation. So Dan, for those people that are looking to bootstrap, how can you bootstrap a Silicon Valley tech venture without actually raising money?

Interviewee: Yeah and this is, you know, this is something that I think will translate for folks who have no aspirations to be out here in the Bay Area. I was an East Coast guy, New England I think kind of like yourself John, and sort of, like you said, there’s cons to raising money. I think the important think in terms of bootstrapping, whether you want to bootstrap for the sake of going to Silicon Valley and funding a tech venture, which is what I did, or whether you want to bootstrap so that you can sell the business and I don’t know, move to Florida or something. Whatever you want to do.

Interviewer: Well maybe for the recount.

Interviewee: Yeah, okay. That’s a good call. Good call, yeah. Play it out these days, but yeah, the same sort of basic tenets apply. Again, my goal was I wanted to move to the San Francisco Bay Area without giving up equity too early on a technology venture, so I wanted, you know, a couple commas of my own cash as opposed to somebody else’s. But the main, I mean the only way around this, and John, if I’m not mistaken, I think you had to do this in your early days here, is to find a way to insure that the initial business that you’re working on is something that, if you had to, you could bring in dollars in, you know, week number two or three.

So what is it that you could sell in terms of products or services that you could have kind of that initial traction with? Anything that’s going to involve a huge amount of runway and a tremendous amount of investment until you eventually can make a first sale. Those are generally not bootstrap ventures, so Tech Emergence is definitely in that later category, so I could not have made money on day one. But, you know, Science of Skill, John kind of like yourself, we were selling expertise on the Internet.

We were basically, you know, filming video courses and then selling that. All you need is, you know, a hundred email opt ins, maybe a couple sources of traffic of friends who are willing to post for you on Facebook and, you know, a little PayPal button and a video camera and all the sudden, you know, on your second week, if you hustle really hard, you know, you make yourself a couple thousand bucks and get a little Internet business, you know, started off the ground.

So I think the critical factor is is this something where I can start to bring in dollars, you know, in my first, you know, month or so and insuring that it’s a business model that can get a yes from that question and Science of Skill was my answer to sort of a bootstrap cash flow to fund a bigger dream.

Interviewer: Dan, as entrepreneurs, all we have is time, so I think it’s so important to come up with automation, systems, processes as early as possible to free up, you know, the time, especially when, you know, we’re not taking money so we can’t hire people and do this and do that. So how can we as entrepreneurs automate key business processes so that we can free up our time and make stuff happen?

Interviewee: This is huge. Excellent question and I am kind of fanatical about this. Our last interview way back in the say was when Science of Skill was doing maybe 45 grand a month or so. When we sold it, we were doing well over 200 grand a month in revenue and lot of that actually, you know, you’d think it was just elbow grease. A lot of it was like automating manual stuff that shouldn’t have taken as much darn time as it did. Like you said, all you have is time in the early days as an entrepreneur, so one critical factor here. I could go into, you know, automating email sequences and automating dash boarding and all that stuff.

I’d rather touch on a main lesson that I think was really critical for me to kind of grow up and accept this factor of really turning things into systems, and that is that in general John, at least this has been my experience. If you want to take less time doing something, you generally have to take two or three times more time to do it once or twice and really refine it and work out the kinks and insure that that’s something that you can replicate and then turn that into a process.

I’ve almost never said hey, I want to automate the way that we are spending our email traffic and interacting with our affiliates and then 20 minutes later I have a process. Generally it’s a big long brainstorm, but it’s a very fruitful one. We work out, we work with it for a couple months. We figure out what the kinks are, we grind them out. We figure out what the kinks are, we grind them out, so systems are not something you plug in.

I think systems are something you work very hard at and then you smooth out, smooth out, smooth out and if you’re lucky, two months later, you’re never thinking about that thing that used to take you six hours a week and I think that that’s kind of the goal, but I think it is important John for your audience, and I know it was for me because I did not accept this early on, to digest the fact that you will not think of a system, email, traffic, reporting, whatever, you know, rip out a first draft in 20 minutes and all of the sudden have this be something you don’t have to think about.

It’s going to be hard thinking up front and then weeks of being deliberate about working out the kinds, but you’ve got to be a little bit dedicated in order to get things totally off your plate as an entrepreneur and I think it’s easy to just stay busy. But that was a big lesson for me.

Interviewer: Now a lot of entrepreneurs want to be able to run their business from where they want to run their business. You know, maybe that’s a beach in Costa Rica, you know, maybe that’s somewhere in Asia. Maybe that’s, you know, in their home town, whatever it might be and you know, they also may want to hire people, like for instance, we have a couple of people in the Philippines. I have one direct assistant that’s in Pakistan. So how can entrepreneurs actually manage a business even if they’re thousands of miles away?

Interviewee: Definitely and this is something that I had to do with Science of Skill. So, you know, we’re handling a lot of transaction volume, you know, eight or 12 thousand purchases in a given month and I’m three thousand miles from the nearest team member contractor for the team, so I was definitely in the same boat when I moved out here to the West Coast. I think probably the most critical thing John is to develop a regimen in terms of meetings and touching base with the team.

So certainly everybody on your team will have to have a role that’s defined so they know exactly what their sort of executed goals are. Preferably all of your team members would have a way that their performance is measured, so your customer service guy would have, you know, ticket reply time metrics. He would have customer satisfaction metrics, you know, in a form a percentage that could come from Zendesk or some other system. Your person who handles affiliates would, you know, be responsible for a certain number of clicks or something.

So to have KPI’s is something that becomes more and more critical when you don’t have that osmosis factor of kind of poking somebody because you’re walking past him every day. I didn’t have the luxury of doing that. John, I know you don’t either, so I think the critical things are make sure your team members have specific things that they’re responsible for, specific metrics that they’ve got to hit, so that they know that they’ve got to get that done whether they talk to you or not, and then very importantly, a regimen of consistent communication.

If you have remote folks and you kind of chat with them when you need to, I’ve always found that things sort of fall apart there and that the camaraderie and the constant communication that sort of builds this same team feel, that builds the contextual knowledge within a team, sort of dwindles unless there’s at least a weekly time to communicate regularly about the core priorities of their role. So some people you’re going to need daily calls, some people you’re going, I find anybody critical to the team, I would need a least a half hour to one hour critical weekly call to keep camaraderie up and keep the accountability up.

So in terms of managing remote, I’d say week, you know, regimens of communication and meetings and also key and critical KPI’s and a clear line of sight as to their priorities. If you have those, then heck, you can have folks, you know, all over the world working for you, so long as they’ve got their arrow pointed straight.

Interviewer: It’s critical, Fire Nation and if you think these value bombs have been great, well we have some more coming for you as soon as we get back from thanking our sponsors.

So Dan, we’re back and we’ve been talking a lot about running a business, you know, running a team, doing all these. What’s the best way to actually set up some dashboards so that we can drive growth, and we talked about KPI’s, like what have you found that’s been most successful for you?

Interviewee: Definitely and this is going to depend business to business. One thing that I would really recommend here John, as much as you know, it’s neat to talk about, you know, things that I’ve learned, some of the better lessons that I got in this department and generally in business is to look at who’s in my shoes but doing as well as I’d like to do, so whatever my next step was, you know.

In Science of Skill when I was doing fifty grand, maybe I want to look at somebody who’s doing, you know, half a million a month or so, someone who’s got a real good leg up and ask what is it that they’re tracking on a regular basis? So a lot of my best ideas for what to dashboard came from people who were dash boarding and tracking metrics at a level that was significantly higher than mine. Not too far ahead of mine, but significantly far ahead.

So for every business, for anybody who’s tuned in John, to find a way to network and whittle into conversations with people who are at the level you want to be at, figure out what they’re tracking, because if you just go on Google I functionally guarantee you’re not going to get insights at the same level. So that’s a good place to start, but for me John, I was more in sort of the B to C e-commerce space. If you want me to, I can just riff a little bit on what…
Interviewer: A little riff would be nice.

Interviewee: Awesome. So my business, for everybody tuned in, when I was at Science of Skill, running that company, right up until this February here, the most important critical metrics, we were a recurring revenue subscription based, membership based online product and video sales company, so a lot of e-commerce, mostly email marketing.

Critical numbers for us were looking at our current number of active subscribers and how many folks we had lost and gained in the last seven days, so generally we didn’t like to see that number fluctuate more than maybe two or three percent. You know, we had however many thousands of people it was paying, you know, 37 or 57 dollars a month and we had that sort of number of total subscribers and we would look at how many did we lose and how many did we gain in a given week.

Ultimately, that recurring rev was really the ground floor of our revenue for any given month. That was 80 something percent of our revenue generally, sometimes 75, but generally around 80 percent of our revenue. So having a constant pulse on not just the current number, but how many do we gain and how many would we lose. This would let us know was there anything we did wrong to lose a lot of people this past week or was there anything we did right to gain as many people as we did last week and we could calibrate what affected that core number, which honestly John, that was sort of what made sure we had profit every month.

So memberships gained and lost and then current actives was sort of very, very big for us, and then we also tracked all the other critical metrics related to e-commerce. I’ll touch on maybe two or three that were really important that kind of as the owner of the business, even if I wasn’t able to be there for the meetings because I was working on another company or something, I would still want to see these numbers every darn week, and this would be revenue broken out by our product categories.

We would look at that every week. We’d look at refunds broken out by product categories, because that’s kind of a metric for customer satisfaction. We obviously want everybody to be happy with what they’re buying.

Interviewer: Yeah, and real quick Dan, I want to jump in. Like I think the key thing when looking at these numbers personally, and I like your feedback on this, is having a nice little handy percentage next to it, you know, of red or green, like up or down, like is this up from last week? Is this down from last week, so just keeps that one little glimpse that you know, hey, we’re trending in the right direction or wrong direction where these flags are being thrown up?

Interviewee: Completely critical John. So conditional formatting in Google Sheets would be sort of the way that we pulled a lot of this stuff off. So yeah, looking at, okay, our revenue from let’s say our physical products, you know, DVD’s or self-defense knives or whatever we were selling. You know, is this trending up or down based on sort of again, an automatic conditional formatting.

It’s pretty easy to set up something in Google Sheets where you can see the numbers that are largest, they’re colored a certain color. The numbers that are smallest, they’re colored a certain color, so there’s a lot customizations there. So yeah, certainly for us, all of those things were important in sort of bearing in mind and finding those critical ratios is really important too, John.

So speaking of important ratios, for Science of Skill for example, you know in terms of ratios we’d really want to see, we’d want to look at what was the amount of volitional sales dollars that we drove from our own internal email, so not rebilling but how many sales did we make just from sending out our own emails, and then how many opens did we get that week.

Now the metric to drive there is okay, based on how many clicks we drove, how many dollars per click did we drive when we were sending to our own site, so that’s the example of kind of a broken out, spliced metric that doesn’t exist in any system, but it’s something that’s a percentage or a factor of something else, and like you said John, you want to know what’s trending up and what’s trending down.

So most businesses, just as kind of a lesson for everybody tuned in, and again, the best way to find this is to talk to people who are two or three steps ahead of you, but most businesses will boil down to a handful of the most critical metrics and generally thinking, I would say, if there’s anything to prioritize, really get down to the 80, 20.

You know, for us it was all about subscription revenue and it was all about being able to monitor our engagement via email and so we had metrics that nailed the ever loving heck out of that, and for you, whoever you are listener tuned in, look at people two or three steps ahead of you.

There’s going to be things that really matter minute to minute for their bottom line and there’s going to be other things that are nice to have. My advice John, if you’re just, for folks who are just starting off with dashboards, don’t overwhelm yourself with 50 metrics.

Find three that are going to be genuinely useful and let that wet your whistle and get you addicted to numbers; because once you do go in, as you probably know John, you really can’t go back. It’s such a helpful thing.

Interviewer: Absolutely and Dan, one thing about you is you’re a really high energy guy. I mean that’s why you’ve been able to run multiple businesses at the same time so for other Fire Nation listeners out there who are doing that right now, who are juggling a few businesses or maybe are thinking about it, like what are some really important strategies to make sure you can manage multiple businesses successfully?

Interviewee: When I talked about kind of meeting regimens, this became all the more important when I was juggling two companies. So if you’re going to manage more than one business, number one, if you don’t have some kind of a dashboard or numbers or pulse whereby you can have an understanding whether your business is doing well or not this week, and it really has to be bare minimum on a weekly basis, then it’s very hard to let that part of your mind go to sleep and focus on something else.

So for me John, Science of Skill was the business making the money and Tech Emergence if my life purpose, so those are sort of, you know, that’s a tough pull there. You know, you want to work on your life purpose or do you want to pay your bills? You know, it’s like you really want to do both. In order to not focus on Science of Skill, I found that I had to make my head go to sleep and the only way I could do that was know concretely, with numbers that things are moving in the right direction or, if things weren’t moving in the right direction, the right employees or team members are working on those critical elements.

Then I found myself able to take a walk and read a darn book without thinking about my business every five seconds. And that whole walk and read a book thing translates to freeing up my head to work on other companies. So in order to spend a whole Thursday not even looking at Science of Skill and just focusing on, you know, doing some interviews with AI executives at Facebook or driving down to, you know, EBay headquarters and interviewing some cool AI people or something. In order to do that without my mind clouded with my other companies, I would need to have the numbers, and the other critical thing here John, I would say would be those meeting regimens as well.

There was a time where, and maybe you had a phase like this too John, or maybe you’re a little bit more mature than I, but there was a time where we were kind of like Skyping anecdotally, frantically with whoever on the team we kind of wanted to whenever we thought of something, because we didn’t really have systems or processes down pat, so at Science of Skill you know, a bunch of different team members, you know, graphic design folks out in the Far East, you know, people across the U.S., where we would just ping and fling stuff at each other.

You know, we’d had a weekly meeting but then we’d just kind of ping and fling and that became something where everybody was kind of expected to be on edge all the time and that becomes hard for your employees. It becomes very hard for you as an employer, especially if you want to juggle other businesses. So for me, to have those designated times where, hey I talk to this employee on this Wednesday every week and I’m also going to talk to him on all of our morning calls for half an hour and if any, if there’s any emergencies, he’ll tell me in that morning call.

If not, I’m going to hang up that phone, I’m going to go work on my other business and I’m going to feel good about it. So having a pulse that’s under control, not communication that spills into every corner of your life, but communication that’s in the right bucket at the right times and lets you know if things are right or wrong, and move right along with your mind into whatever your other venture is.

Without core metrics and without a regimen of controlled communication, not frantic communication, I would never have been able to juggle two companies.

Interviewer: Dan, let’s end today on Fire brother, with you giving us a parting piece of guidance, the best way that we can connect with you and then we’ll say goodbye.

Interviewee: I would say, John, you know, you and I were touching on the importance of systems. I imagine even just since you and I have chatted last, I know how much I’ve learned in business. I imagine you’ve systematized and I see already all the things that are different about your company now than they were when you and I chatted last.

So even the flow to get on the show, I was like nice. John’s got some great processes in place, like look at all this, right, so, and that took you a while John, and I’ll be honest. I wish I could say that as soon as I started Science of Skill, I was right into process land. But yet, I mean, the grind of, the very volitional sort of full mind engaging process of determining those systems that will then become the backbone of your business is a worthwhile investment of time.

I would admonish any founders who are tuned in now, entrepreneurs who are tuned in now, who know that there are things that take up way too much darn time and they really do need to find the time to automate them, to research that. Set aside time to really build out what an ideal process would be and every single week refine that process until that thing that takes up six hours of your week takes up 30 minutes, and after you do it and you do that long grind, it’s so annoying when you’re an entrepreneur.

You want to work, work, work but putting that focus on processes, whether it’s your marketing systems or whatever, and systematizing that first process, it becomes something you can’t let go of, and to be honest, it’s super-duper critical to growing and being profitable, just like you had sort of mentioned there John. So that would be kind of a parting lesson I’d really, really, really want your listeners to tune in to.

Interviewer: Fire Nation, you’ve got to work smarter. I mean, a lot of people say John, you are the hardest working person in the podcasting field and that might have been true at one point, but now because of my systems, it’s, frankly it’s not. I mean, a work a couple days a month on the podcast. I have 15 interviews two days per month, so I do 30 interviews in two days, Fire Nation.

Just rock them up, rock them down, make it happen, and then the other 28, 29 days of the month, I’m able to work on other things in my business. Writing books, doing webinars, doing ventures, you name it, I’m doing it, and relaxing, exercising, having fun, you know, learning about nutrition, doing all these things. So processes are key for sanity of life and Dan, how can we best connect with you?

Interviewee: Yeah, for sure. For people who are in to the system side of stuff John, I still do a good deal of blogging and writing on this so learned a lot in growing and selling Science of Skill, learned a ton in Internet business. The place where I still write about that is called CLV Boost dot com. It stands for customer lifetime value, so CLV Boost dot come is basically my blog. The only white paper I have on the site, which I think is on the home page, is basically the email automation processes that we used to get to six figures and then get to seven figures.

So CLV Boost is sort of my blog there. The white paper there is probably useful for your folks, too, so that’s one spot. And then we did actually John, you and I touch briefly on artificial intelligence. Tech Emergence dot com is that site. I’ll send you an email afterwards John, of a report that we recently did on sort of the next five year implications of AI in marketing, sort of the businesses to be impacted, the types of industries that are most likely to see its influence and sort of what that means for business and online business specifically.

I’ll send that along as a link, but I would say for folks interested in automation and want to see kind of the stuff we did at Science of Skill, CLV Boost dot com would be the main spot.

Interviewer: Fire Nation, you’re the average of the five people you spend the most time with. You’ve been hanging out with DF and JLD today, so keep up the heat and head over the EL Fire dot com. Just type Daniel in the search bar and his show notes page will pop up with everything that we’ve been talking about today. These are the best show notes in the biz. Time stamps, links galore.

You’ll be able to check out Dan’s episode 711 and EL Fire, where we talked about a totally different number of topics, his journey, etc., and of course check out CLV Boost dot com and Tech Emergence dot com. Daniel, thank you for sharing your journey with Fire Nation today. For that, we salute you brother, and we will catch you on the flip side.

Interviewee: Glad to be here John. Thanks.