[STEP BY STEP] What is the Importance of Storytelling?

Phillip: [00:00:10] Hello and welcome to Step by Step, a podcast by Future Commerce, presented by OpenStore. I'm Phillip.

Brian: [00:00:51] And I'm Brian, and this is Season 11 of Step by Step. You're listening to episode 5 of 5. So if you're just joining us, you're at the end.

Phillip: [00:01:02] It's at the end.

Brian: [00:01:02] So be sure you go back to the beginning, and listen to Parts 1-4. Lots of incredible wisdom and interesting stories are told throughout the series. This five part series is focused on founders of eCommerce businesses who sold their businesses through OpenStore, who sponsored this season. And we're asking the question, how do you architect your business to maximize your valuation for a dream exit? And that has been a wonderful question to ask. So many interesting stories.

Phillip: [00:01:35] And not just asking the question, we've gotten multiple answers along the way. And today, what a great way to cap it off by talking to a founder who I think one day we're going to hear Miguel Facusse's name mentioned in textbooks. I mean, this guy is destined to do great things. And really, I think of this cohort, he is somebody who is a multi-time serial founder who created this business from the get-go very intentionally to maximize the emotional resonance with a very specific audience. And I think that that's when we talk about architecting, we think about thoughtful planning and thoughtful building. And Miguel, I think fits the bill. I'm just so impressed by the caliber of the people that we have had on this series. And I know I said it in our opening episode, Brian, but none of these people had to come and talk with us. None of them had a media agreement with OpenStore that they had to come and talk about their experience. They all did it of their own free will, and that should say something about their experience that they had with OpenStore. I've never sold a business to OpenStore. Brian, have you?

Brian: [00:02:53] No, no.

Phillip: [00:02:55] But the fact that four people gave of their time when they didn't have to come to talk about that experience, I think should speak volumes. And I feel like it's an amazing thing to watch these people sort of selflessly share their experience with other founders who are probably somewhere along the same journey.

Brian: [00:03:14] This story is absolute fire. And the question we really dive into here is why is storytelling important to finding product market fit? And I mean, honestly, I didn't know going into this episode how good Miguel is at storytelling. And I just walked away just actually full, full of inspiration. Like you said, Miguel is destined for textbooks. This is a master class in starting a business focused on storytelling and connection to customers. And I just learned so much.

Phillip: [00:03:56] Yeah. And so will you. So if you're ready to move on to your next endeavor and you need a team to help take over the day-to-day operations in your eCom business, maybe you have great margins and clean financials and some discipline around how you build and scale. I think you're going to learn a ton here. So let's join Miguel who is the founder of Jack Archer, who sold his business to OpenStore, as he teaches us how to build a business and maximize valuation for a dream exit Step by Step. Today, we are continuing our 11th season of Step by Step with a new kind of a story actually. Building a company with an exit strategy in mind. Today, we are joined by Miguel Facusse, who's the Founder of Jack Archer. And from what I read on the Internet, Miguel had a very purposeful plan and thoughtful plan to build a brand that solved problems for sure, but also helped him to have a successful exit to our partner for this season, OpenStore. Welcome to the show, Miguel.

Miguel: [00:05:06] Thank you for having me, guys.

Phillip: [00:05:08] Tell us about Jack Archer. Tell us about that exit and what brought you to this point today.

Miguel: [00:05:15] Well, what brought me to that exit was ten years of pain. But I'd like to think that every mistake I've made over the past ten years in eCommerce has been a learning experience. And as I went through with each startup, they've all been apparel startups. I started developing a framework where I would follow my previous learnings and then I would execute and then some failings came. Learned from that, do it again. And Jack Archer was the culmination of that process. It was like the last hurrah or the Hail Mary. Okay, let's do this. Let's do it properly. Let's use minimal capital as well. Let's try to do it in a way where it's going to be quickly set up for a sale as well. So let's build this. Let's prove profitability, let's prove that it's scalable, and then I'm going to put her up for sale. Now, it's not that easy to put up for sale, but we can talk about that later.

Phillip: [00:06:21] He's speed running business building.

Brian: [00:06:24] This is the theme, though. This is the theme of this show. It's building for an exit. And I love that. It's so intentional. You knew where you wanted to go and you had been through this a few times already. So it's not like you were coming in with no experience. You had the fundamentals that you needed. The groundwork was laid, as it were. That's so cool.

Phillip: [00:06:57] Let's lay some groundwork for people who aren't familiar with the brand. What is Jack Archer today and how did it start as a concept in your mind? What were you trying to solve?

Miguel: [00:07:09] Oh, man, the name. Let's start with the name. Jack Archer. A name I came up with. It was an available dot com, but getting to that point, there was this testing I did to see which name resonated with the older crowd more, meaning the people with money. I didn't want to target a market that was low average order value where they actually do their research before buying. We're talking about young people, right? So I had two names Apparel Engineering or Jack Archer and actually a third one, Tom Walker. I did have the dot com, but it turns out there's a trademark on that one, so I couldn't use it. But Jack Archer won by a landslide and Apparel Engineering was really high engagement with the younger crowd. That was an immediate shift towards that. After that, I had to build a persona around Jack, but it wasn't going to be based on what I thought was my taste or what I think looks pretty or what I think sounds nice. I started doing research, I started listening, I went on Reddit, I typed in, "I don't like it when my pants {blank}," and nothing else. A flurry of insights just came up and told me exactly what people were frustrated with. "I hate it when {blank}," and then all these emotional triggers on there. "I hate it when there's no consistency." And this just kept coming up. Consistency, consistency. And it's all about it was modeled around you wear something and then at the end of the day it looks all droopy on you, stretched out, your knees are poking out, your butt is all wrinkled... The apparel.

Phillip: [00:09:01] Could be both. And that's fine. At my age...

Miguel: [00:09:07] The thing is this brought about like, "Okay, let's develop a product around this." So now the fabric search started and I started looking for a type of polyester that was made in Japan. Very expensive fabric that stretches, but it also recovers in full. And so it's a really different feature than one everybody focuses on. It's like, "Yeah, it's stretchy, but what happens after like a couple of stretches? It just stays all weird, and you have to wash it so it tightens up again." So this fabric was a good discovery. So we solved consistency. Now let's make it travel-friendly, let's make it aspirational. Let's make Jack Archer feel like "I want to be a Jack Archer man." It sounds like a strong name. So with this feature set figured out and some messaging figured out as well, I picked out a model that was just the most good looking guy I can think of and I could find. I had to go to LA. I had to go to a photographer in LA, a very expensive guy. And I was there for the entire shoot. I was basically fixing up and tidying up his butt area, making sure it looks like this so that it matches this messaging part of the landing page. All these like, we got to make it perfect, but it's also aspirational. I got to make people feel like they want to be this Jack Archer man. It turns out that guys loved it. They felt like they wanted to go travel with these pants, but just one single pair in their luggage so they don't have to overpack. So it really resonated.

Brian: [00:10:54] Interesting. So as it resonated and you started to think about your customer experience, you went and did the research. What kind of feedback did you get as you went through and people bought the product? Was the feedback you got consistent with what you were trying to solve when you went and did that through those Reddit searches?

Miguel: [00:11:21] Absolutely. You can see there's something I do whenever somebody buys, I immediately ask them, "What are you solving with this purchase?" Right after the purchase. I get a lot of like, "I was looking for this," "I was looking for that." It all matched the intent of the ad. It all matched. It was very interesting to see this. They bought it because of the thing that I brought up and then reviews that came in for those that weren't, some people just can't please them, right? And that's fine. The product is just not for them. The reviews were complaining about that feature set or that benefit not being accomplished.

Phillip: [00:12:00] Wow. It was sold on the premise of solving a problem that they found worth their time and their money to be able to invest in solving and it didn't meet their expectations. Let's talk about that. How did you how do you solve that? Is that a product engineering problem? Is that a talking to your customer more deeply and understanding the nature of the problem issue? Tell us a little bit more about that.

Miguel: [00:12:28] I consider that just a line item in accounting, which happens.

Phillip: [00:12:33] You're never going to make anybody happy. Some people just can't be pleased, right?

Miguel: [00:12:37] There's a percentage. It's pretty standard. You can reduce it. You can try your best to reduce it via product quality. And I certainly did my best with that. Pants are a very tricky product to figure out. You have how many dimensions of sizes in a lower body.

Brian: [00:12:55] Yeah.

Miguel: [00:12:56] You might have like thunder thighs and like skinny calves and vice versa. And then you have waist size, you have length, and then you have fit. So three dimensions to consider. And so some brands resolve this by going all out on sizing and doing as many variations as possible, and then just using some magic and computational magic to find your perfect fit. Others go the complete opposite way. It's just small and medium large, extra large, and you'll probably fit in one of those. So it's like, do I want to deal with inventory headaches or do I want to get higher returns? You have to make trade-offs. So returns were pretty normal. It was pretty much expected. "They didn't fit the way I expected them to." Some people just don't have a butt to fit in there. It's normal. I'm not going to fix that. {laughter}

Phillip: [00:13:54] That's a really interesting thing, Brian, that you come back to a lot of times sort of the existential why of why should your brand exist. And it sounds like the Jack Archer approach from the very beginning is test all assumptions, so coming in with a mindset of not making assumptions around what the world needs or the problems that need to be solved, and even to the point of which brand would resonate most closely with consumers. That sounds like such a bootstrapped mindset, by the way, is that you're not trying to make the customer move into a position of desire of your brand. You're trying to move your brand into position of desire for the customer because they already have desires. So why not try to meet those?

Miguel: [00:14:41] That's exactly right.

Brian: [00:14:42] As you were talking about names, my mind immediately went to like Charles Dickens, who famously used to keep track of different names that he might be able to employ for different characters. And in the pre-show, you were talking about building a story and telling that really clear-cut story. And I just feel like what I'm getting from you is that you're actually not an entrepreneur. You're an author. You're authoring something. You're finding the pieces of this story that resonate, that are going to have an impact on a specific set of people.

Miguel: [00:15:21]  [00:15:24]Words are the biggest catalyst for your bottom line. And people fail to realize this. And you have marketers, you have brands, and you have them running these campaigns that are highly algorithmic, meaning, let's put in 300 ads. Let's test which one works. But there's no narrative behind it. Very basic language. "Free shipping over $100." "Save 20% when you do this." And then what type of customer are you tracking with that? It's just the impulse buyer. But what about the emotional buyer, the guy that's going to be with you for life because you solve a problem for him and because you called it out as well? You solved my marriage issues in some ways. I can take it really far on how far your product can go to solve some stuff. But when you make people feel something with your product, it changes everything. Now you have a lifelong brand fanatic, not just a buyer. And so LTV metrics go up, which is great. {laughter} [00:16:29]

Phillip: [00:16:30] So you're a storyteller?

Miguel: [00:16:33] Yes, a persuasive storyteller. It's probably the best skill I've learned so far.

Phillip: [00:16:40] Let's talk about how you organize sort of the evolution of the story as it goes. It sounds like you have a pretty tight feedback loop in testing hypotheses. What are some assumptions that maybe you made along the way that were proven or disproven for you? And how do you sort of steer your business to that ultimate outcome? Sounded like you had this exit strategy in mind from day one. What are the kinds of things that you make decisions around to sort of rein in other people's... Other people in your shoes would be chasing the high. What are the things that seem exciting or interesting? How do you have the discipline as a storyteller to focus the business for a specific intent?

Miguel: [00:18:32] Some people just don't want to do the work of listening. It also has to do with your personality. If you are an egotistical person, you tend to not want to talk to your customers in their language. You sort of just mention your accomplishments. And the About Us this page is all about the founding story. And my grandmother and my grandfather. Nobody cares about this. Nobody. Actually, people roll their eyes when they read this stuff. So but if I frame the About Us story in a different way, it's like "We've helped men feel more confident with themselves." Yeah, that's about us. But it's about how we've helped people. And it completely changes that narrative. So it's sort of like being more empathetic. So if you start with that empathy and you make it your persona like, "This is what I'm all about. This is what my brand is about." I start off by interviewing people on a one-on-one call face to face on Zoom or Google Meet, and we just talk. We just bounce ideas. We're not talking about the product at all. I'm asking them, "What's going on in your life? What do you do? Do you go to the gym? Do you travel a lot? Tell me about your travels." In one moment, they're going to express some sort of emotion. They're going to say something funny. They're going to say something sad, something that frustrates them. That's when you found something. It's like, okay, tell me more about that. You dig in, you dig in, you dig in. And one of those is going to have a connection with your product. It's like, okay, well, this product solves that. And so that's how I bring ideas. And I put them on an Excel sheet. I expand on them. I build stories using the hero framework where it's like a seven part adventure, just like a Pixar movie. I call out their villain and whoever that villain is, right? It could be wrinkled pants. Maybe that's the villain or wrinkling in general. Politicians use this all the time. "They." It's always against "they," whoever "they" is, right? It's a villain. And it's the same premise. So once I have these concepts, I have something to work with, something emotional to work with. And it started from that interview. There's one specific one I really want to mention. I was doing marketing work for a caregiving company. They hire people to provide caregiving services for people. So you take care of grandma. You take care of the sick child. And they told me, "Miguel, I'm having trouble hiring caregivers. Nobody wants to do this job." I'm like, okay, this is a hell of a challenge. This is a $12 an hour job, and the product is a caregiving job. The customer is an actual caregiver that I need to come and on board. So I told them, "Get me on the phone with three of your current caregivers, your best ones," and long story short, those calls, we were crying at the end, both of us. And what I discovered as a pattern between all three is that they were daughters of immigrants that came to the US to find the American dream, and they wanted to become lawyers. They wanted to become nurses, any sort of professional profession. And it turns out that at some point in their life, somebody in the family got sick. The mom or a kid was born with the defect and they were forced to become a caregiver. They were forced into it. They didn't know they could get paid for it. They never even considered caregiving. But once they realized that there was like a trigger point where they discovered that I can make a career out of this, that's when they made the transition. So I framed a new campaign called "You may not already know it, but you may already be a caregiver." Have you been doing errands for your mom? Have you been picking up her groceries? Have you been cooking for her? You are already a caregiver. Why not make it a career? And here are all the benefits you can get. Free time, all that stuff. And we went from $1,000 cost per requisition, per hired employee. Hired. And this is like a full conversion to $25.

Phillip: [00:22:56] Wow.

Miguel: [00:22:57] Just because of this message.

Phillip: [00:22:59] The framing is completely different.

Brian: [00:23:02] Yeah, the framing is different. And what I love about this is you're a storyteller, but you're using data to drive that. And the data that you're using is actually phenomenological data. That is to say, you're doing a lot of like understanding exactly what your customers' experiences are. So you think about Jack Archer and the way that you're going in and interviewing people and you're getting out on Reddit and you're getting people's one-on-one, this is what's happening. You're accounting for that as you go. That's real data.

Miguel: [00:23:41] It's actionable.

Brian: [00:23:42] It's actionable. It's actionable data. That's right. And so individual experience get getting people who are willing to share that with you, you're putting in the work, like you said, to go find that kind of data. And that's one of the things that drove you towards growth, really. When you went to go advertise and you went to go test this against the algorithm because you were advertising Jack Archer. And you were using data based on direct experiences that you had with your customer. I think that's huge. And that's something really important for, I think, entrepreneurs that are building to sell to hear. That data actually can drive real growth. As the story progressed and you got closer to your sale, did your strategy evolve at all? When you got out of like, let's tweak the product mode and into let's just grow, grow, grow mode? Or did you ever get out of that? What changed as you came kind of closer to the end of your journey?

Miguel: [00:25:01] Okay. It was about a one year build out leading up to the point where I turned on the ad campaigns for the very first time. And it was getting up to that point was like a $50,000 investment. Had it been previous years ago, I would have been terrified. "I'm going to probably lose this money." But when I launched this one, it had gone through all the entire testing framework that I designed for the past ten years. It had gone through engagement testing. Which of these stories resonated the most with customers? And when I clicked On on the campaign, $10 started spending $20, $30, I was sweating... First sale on a pre-order product, $120 for a pair of pants. So it was like immediate validation. Now let's try and try and scale it to see if this is worth it and if I can scale it at a $5,000 ad spend budget that proves that this is a scalable product. So I did and acquisition costs stayed consistent. And so that's when I started fundraising. Let's raise money to actually produce this product and deliver it in four months and actually fulfill my promise on this preorder. And I just stepped on it. The thing is, when you have very niche stories like these and you give one story to Facebook, it'll find people that resonate with this story, with this specific one. The ad is very relevant. It's very direct with that specific story that we're talking about. So you want to give it more options. You want to give Facebook here is another story that you can use that I've tested already for engagement. It's high engagement. Use that one and let it find its own audience as well. Let's see who that audience resonates with. There was a third story that I tested, and it was about keeping your jewels safe in a way. There's a feature in the pants that gives you a little bit more breathing room, and so a pair of pants designed for guys in Texas, you can say, I don't know. That one had extremely high engagement. We're talking 20%, 20% click-through rates, but zero sales. You can reach this point of like you did the entire thing and it's working, but then you get zero sales. So in a way, I would summarize that as build a couple of stories, don't just focus on one, and then test them between each other.

Phillip: [00:27:48] It's funny because we have this conversation quite often on the show and we've done this for years now and you hear about these problem solution statements that can be used for trust building with a consumer and but not all of them convert. So it's not that this feature of this product is not useful, it's that it doesn't drive to conversion. So it's becoming more narrow about the hypothesis creation. And I feel like we often overlay our own biases. If you came into that feeling like you were already ready to make a change to the product, to save on material, to change the manufacturing process, you already had an end goal in mind. You would have come away from that sort of feedback, especially in the tight loop that is ad creative testing. You would have come away from that being validated in your priors, right? You would have already thought to yourself, I know what I'm going to do, I'm going to validate that. And it's interesting how few founders and other business operators realize that those biases inform their tests to begin with. And so they're just looking for validation. Is that something you're aware of and sort of being cautious about the way that you approach taking those sorts of tests out into the market? Or are you very intently focused on testing things that convert and leaving the rest to build trust?

Miguel: [00:29:27] It does help that I paid attention in statistics class {laughter} as well as just basic knowledge on properly running a scientific test. And you have control variables. You have knowledge of all this. And when you have marketers that are basically throwing crap at the wall, hoping something sticks, and sometimes they get a lucky win and it works for a couple of days and then it drops off and they're wondering why. "I did everything properly." No, you did not do everything properly. There was no logic behind this testing. So in a way, leading up to the very big test, which is the actual launch day and we're actually testing for CPA, there was a lot of pre testing before that. It's like, let's build a high probability model with as few variables as possible that will give me an answer that I can depend on, a high confidence answer, and that's what I got. It gave me it was a litmus test. In fact, when I got a good CPA number I put in. Around 400K of my own money, of which I'm not a multimillionaire. But it was basically a lot of my net worth. And I had full confidence about it. I did it with my eyes closed. It was easy for me to make that decision now. Okay, so a month came in when I started seeing like, crazy numbers. I got really excited about the trajectory I was in. It came time to deliver product and it came time also to prepare for the next stage. The next stage is a very dangerous one. It's when you double down on the idea. And it's also the one where you probably start taking loans or start considering investor money. And I've only been live for a month. They weren't going to take me seriously. No bank is going to take me seriously. That's when I had to start thinking really hard about what was I going to do, what I was going to do. So I've proven profitability. Here's a baby that works here. It's proven at scale. Who wants it? I just started offering it out. It's just something I do. I build and I sell. It could be commitment issues, who knows? But it is what I'm good at. I'm good at building from scratch and then by the point I launch, I'm really tired because of all the work involved. And some people might see it as like, "You give up too quickly." It's like, "No, I built a product and I'm selling it. The product is a business." That's when OpenStore came in. I had no idea they existed.

Brian: [00:32:31] How did you find them?

Phillip: [00:32:32] Yeah.

Miguel: [00:32:34] Google search. They were quite new, actually. It was right on month three that they had gone live. They only had a few acquisitions under their belt. And when I submitted mine, they had so many questions. They were like, "Why is there only one month, and why is it $1,000,000?" Well, I did this and that, and then I got on a phone call. They basically adored my way of doing things. Lo and behold, I got an offer a couple of days afterward, which was like right on point with what I wanted. And it was a quick yes.

Phillip: [00:33:11] Amazing.

Brian: [00:33:12] This is interesting. You're an early adopter at every level. You sold to early adopters when you were selling clothing at Jack Archer and then you were an early adopter of OpenStore. And actually, you answered one of my questions already, which was why the timing? Why did you sell when you sold? And it sounds like it actually it didn't have to do with trajectory so much as that's who you are. That's why you sold. You sold because for you, the joy is in the build and it's not in necessarily the maintenance and long-term let's grow this to the next level. You want to build something that you know is a good engine and then you want someone else to go put that into a car.

Miguel: [00:34:04] Absolutely. You nailed it. You nailed it. And there was a risk factor as well of bringing in $2 million in loans, which now you're in a new set and you're in a new place in a new mental state as well. You also, when I'm doing things myself, I do this as a one-person operation, this entire thing.

Phillip: [00:34:27] Wow.

Miguel: [00:34:27] And if I do this next stage, I'm going to have to bring people on board, customer service, training, all that stuff. There's just another level of "I need my prize. Let's take it." And onto the next. And I'm already on the next one. And this is what I love. I'm absolutely miserable at some points, you know, 3 a.m. in the morning working long hours, but you wake up and you see the progress that you've made and nobody else has ever seen it. And you sometimes post these little Instagram stories of peaks on what you're working on and people are like, "What are you doing? What are you doing?" And it just builds this excitement. And when you launch and it works, my God, it's the best feeling around.

Phillip: [00:35:11] I want to get an idea for the timing from the time at the beginning of this podcast, you talked about you had three concepts for a particular brand. So from the time that you started testing the brand to the time the check cleared the bank, what was the elapsed time in the run of Jack Archer for you?

Miguel: [00:35:30] I'll give it about six months of product development. And then about two months, once you have the product in hand and it works... The thing is, the factory, they usually do a lot of work leading up to this point. A lot of they're not getting any money from it. It's just product development. And you haven't had it is ready. And they're like, "Okay, we're ready for the order." And I'm like, "Wait. No, let me prove it now." And they get really angry. But it's something you have to deal with. But it takes about three additional months to get to the point where you're ready to test and then another month before you place the actual order. So all in about 10 to 12 months, you could say, yeah, there are definitely hiccups along the way to get the product just doesn't work. Or you bring in additional products and you're waiting for them to work. Also, right when I was supposed to ship that was... Do you remember that time when the LA port was...?

Brian: [00:36:32] {laughter}

Phillip: [00:36:33] Oh yeah. We covered it extensively on the show.

Miguel: [00:36:37] Well, so my product was being, it was in a container. It was ready to be put on the boat from port to boat. This just started popping up in the news and I'm like, "I cannot send it to LA." It was going straight to LA. It was going to sit there for months if I sent it. I had to get cracking on how am I going to deliver this product. I called them immediately. Leave a container in China, move it to Hong Kong. There's a warehouse waiting for you. I had set up this new warehouse over there. It took me a while, but brand new APIs, a warehouse that I had never heard of, and shipping options that were so shady. That was nerve-wracking. But you make it work. And we had how many orders? Something, 5,000 orders that had to go out on day one. And everybody was super anxious and it was Christmas time and there were delays and everybody was angry. So that definitely influenced my do I want to deal with this for the next five years? Who knows how soon they're going to resolve? There's creativity in solving these things, but there's not the creativity that gives me joy. And I was like, sure, you solved something, but you can't really show it off.

Brian: [00:38:04] That's funny. So I think what I hear you saying is that the joy for you isn't solving shipping issues and figuring out how to continue to get things from your manufacturers to your warehouses or to the people, to your customers in the US or elsewhere. It's really in product building and finding product market fit. And I think so let's go back to the beginning. You knew you wanted to exit. You knew that this is what you wanted to do. You wanted to build a product that resonated and then sell. And I think that that's, again, a huge benefit, knowing where you want to go, what you need to do to get there. How was the exit process? Now, you said 10 to 12 months to get product out the door shipped, and grow. How far from that? 10 to 12 months did you sell?

Miguel: [00:39:11] Around four months after the first sale.

Brian: [00:39:15] Wow.

Miguel: [00:39:15] And considering the exit, the process took just a bit longer because of those shipping issues. But, man, it was a crazy time to see that acceptance or that offer come in at a point where the numbers are adding up with the business plan. So when I launched, I have this financial model that I'm thinking of giving away for free, by the way, as a lead generator. It's a financial model for eCommerce. So all the inputs, product costs, CPA, returns, lifetime value, everything is factored in with a 12 month trajectory. And it also brings in these crazy cash flow requirements as well. The thing is when you launch and you're just waiting for that number, that last input that you're waiting for, which is cost per requisition. And the moment I got it, I plugged it in. I'm like, okay, this is the trajectory I need to take. And by month X, I want to show profitability. That's when I want to start showcasing it. You don't want to showcase it month one. I'm like, "Look, I have $1,000,000 in revenue," but what about your returns? Did they actually execute based on your projection and all that stuff? Once the numbers are solid and you can prove profitability, that's when you're ready. That's when I presented it to OpenStore.

Phillip: [00:40:47] There's the sort of risk-reward too, it's the George Costanza "Leave on a high note," right? You have a good thing right now. There're definitely troughs, right? There are peaks and troughs in entrepreneurship. And if you're at a peak, a trough is coming, which only delays your potential for exit later. And if you have an end goal in mind, there's the cost-benefit ratio of like, well, how much longer until the next exit point. And I think that that's a... We rarely hear about that kind of a calculus in a founder's decision making to sell their business. That doesn't happen very often, or they don't talk about it. Let me say that. They don't talk about it because everybody is celebrating the win. I think at the end of the day, it's sort of deciding when the right time to walk away is. And this is, you said, not your first rodeo. You've done this before. It's actually quite refreshing to hear someone really talk about the mindset and talk about the approach to sort of scientifically examining how you build brands that people love.

Miguel: [00:42:15] Starts with listening.

Phillip: [00:42:17] Hmm. That's a great place to sort of shift gears. What's next for you?

Miguel: [00:42:23] Ooh. Okay. I ended up buying a company for the first time.

Brian: [00:42:29] Oh. Whoa. That's out of left field. I did not expect you to say that. {laughter}

Miguel: [00:42:35] Yeah, I took a little retirement first. I went to Europe and I had the time of my life, but that itch just kept coming back. I got to start something again. And you know how they say the quickest way to open a business is to just buy one? I'm like, okay, this is a good way to do it. Let's go on the Flippa. This little college consulting business came up. It was a database of European colleges that have taught in English. So it offers these for American students that are looking for more affordable options. It looked nasty. It was disgusting. It was ugly, but it was working. It was resonating. It was solving a really deep problem. So many problems, actually. You can imagine it goes far beyond just affordability. It goes into mental health.

Phillip: [00:43:30] Sure. Oh, yeah.

Miguel: [00:43:30] This is right up my alley. This is what I'm good at. I'm good at listening. I can fix it up. I can make it look pretty. So lots of new skills that are going to develop along the way. SEO is brand new to me. That morning I saw it listed. The next morning I was making a wire transfer and that evening I had five employees. I'm like, "Okay, wow. Okay. I just did this." About a month of buildout. And the brand is now mine. It's called Beyond the States. And it's printing. It's working. And I'm hoping to exit soon. I have a goal in mind and it's profitability once more at a higher scale, at a little multiple to it. And then I'm out. But also when I'm thinking about this, when I'm building, I'm also thinking about who's going to take control. Are they going to do due diligence? And they're going to say, this sounds like a pain in the ass. If it is, they're not going to buy. They're going to be like, "I don't want to do this. I just want to bind business. Can you just stay and do it?" No, you can say yes just to close the deal. But you don't want to do that. You want to say no, it's all automated. It's all completely automated. You don't have to do anything. And I'm setting it up in a way that it is. It, of course, has employees. There is some manual process behind it. But I'm setting up it's just here, turnkey. Have it, it's yours. Do your magic. And somebody when you see a new business, you think I can do this with it and you start dreaming about it. That's what I try to paint in a way when I'm talking to potential buyers. Beyond that, I have and I'm partnering up with an apparel business out of Uruguay, a very big team, 70 people, and the most spectacular apparel designers I've ever seen. And they only have Uruguay in mind right now. And they were going to open up 40 retail stores in Spain. Somebody told me to get on the phone with them. After 40 minutes, Spain is canceled. So I got a lot of angry people. I don't know who got angry, but a lot of Spanish people were not happy about that. We're shifting to America. We're going to do eCommerce in America and Miguel is going to lead the charge. {laughter} And that was a really fun call because it's a brand I'm really excited about. It's women's apparel and it just looks so spiffy and it also solves the anxiety behind product development, which is long and you don't see numbers. This is already proven. It's beautiful. Now I'm going to do something new, which is actually grabbing a brand and taking it to another level.

Phillip: [00:46:20] It sounds like there are a number of folks out there who could use that kind of mindset and changing the conversation, bringing the kinds of skills that you have honed over a decade to bear and taking brands to the next level. I'm excited as a storyteller. I'm excited to hear you tell the story of this next phase of your entrepreneurship career. Congrats on all your success. It's been an amazing time listening to you tell us about it, and I follow you on Twitter now. I can't wait to see what you do next. And yeah, you're always welcome back on the show. This has been fantastic.

Miguel: [00:47:00] Appreciate that. Good talk, guys.

Phillip: [00:47:05] Thank you so much for listening to this episode of Step By Step. You can find more episodes of this podcast and other seasons of Step by Step at FutureCommerce.fm. And Brian, we've covered a lot over the years on Step by Step. What are some of the other topics that our listeners can dive into to learn a little bit more?

Brian: [00:47:25] You can learn about how to compete or not compete with Amazon. You can learn about funding for retail and commerce. You can learn about shipping and all the intricacies that come with shipping and the opportunities that come with shipping. You can learn about customer experience and how it's so different from customer service, and how to turn that into a revenue-generating center. It's so, so much more.

Phillip: [00:47:52] Oh my gosh, And this is the 11th season. If you're not on our mailing list, the best way to stay up to date with everything that we're doing is to go to FutureCommerce.fm/Subscribe and of course, visit OpenStore. We have a special offer for you and maximizing the valuation for your dream exit. If you were to sell your business through OpenStore, it takes just a couple of minutes to get a valuation and hey, maybe the next phase in the success of the growth of your business is to sell it to OpenStore. Hundreds of brands have done so. Maybe yours is the next one. Thank you to OpenStore for giving us their support and trust here on this 11th season of Step by Step.