78. Building a Boutique Fitness Brand and Implementing EOS with Mike Jones

Brock Briggs  0:00 

Hello and welcome to the Scuttlebutt podcast, the show for current and former service members looking to make better decisions, think deeper and earn more money. I'm your host, Brock Briggs. And each week, I do that by bringing you a conversation with one of the world's most interesting veterans at the top of their craft. This week, I'm speaking with Mike Jones. In this conversation, Mike talks about how to do targeted networking with a particular focus on raising money for a business as well as running effective meetings with people.

We talked about him launching one of the first CrossFit gyms in Minneapolis back in 2009 and how we use learnings from that to co-found his own fitness company Alchemy 365, a boutique fitness brand. Mike also talks about EOS or Entrepreneurial Operating System, why it's a valuable backend to any business and how to implement it in your own company. To find links for this episode, show transcripts, the YouTube channel, free weekly newsletter and more content from the world's most interesting vets, check out scuttlebuttpodcast.co. Please enjoy this conversation with Mike Jones.

Brock Briggs

Is there something that you think about or like how you prioritize like having a good meeting? Because I feel like people maybe in our space or entrepreneurship or kind of anything, really, you end up on a lot of meetings or like in a lot of calls, but they're not really productive. They're just kind of like, either just a generic networking call or something that even if it kind of moves the needle forward, it's maybe not the best use of time. So I guess what was unique about this call, like, specifically that you had and then how do you think about having really high fidelity calls with people?

Mike Jones  1:58 

Yeah. So yeah, my networking and meeting experience is vast, right? I've been a professional for 20 years now. And my network, I think I'm a good networker. I have a strong network. And I've leveraged it many times over my career. And it's always, all my biggest breakthroughs or opportunities have either been amplified or come about because of my network. And then going back, you know, over the past eight months, becoming someone who sells their services to companies puts me in a seat that's new, a new frame of how I'm doing networking, and who I'm trying to talk to. And so I have the beginner's mentality, but I've been doing networking a lot.

And so, you know, first period or a lot of the period was just meet with as many relevant people as possible, volume. And then as I fill out my client load, get a little more confident then it's narrowing it down, controlling my time a little bit more, meeting with people that I'm really interested in meeting. And that mechanism is twofold of not feeling like I'm desperate to get clients is one and then the other is reducing down to quality over quantity, by definition, makes the entire experience better because I'm not just thinking about what I can get from someone. I'm thinking about what's interesting about this person that I want to learn, what do I want to share that I think is relevant? How can I help them? You know, what can we do to make this an enjoyable conversation?

And so it's gotten better and better every month that I've had this new mission of how to network, you know, and do what consultants and people who sell themselves would call business development. And so I had a meeting today prior to this zoom. That was like, I'm calling it a 10 out of 10 meeting because it was really interesting person that is in a field that I'm interested in learning about more. She's a connector to the type of clients that I work with. So bullseye type of person I want to connect with. We had a strong ability to kind of let our guard down and talk real from the beginning. So we talked about real stuff. And it was a stronger connection than your typical surface level conversation the whole time. We connected on LinkedIn. Well, we got connected through mutual connections about two months ago.

And we both are active on LinkedIn. So we've interacted and engaged with each other. So I think going into the conversation, we had a better idea of what each other was working on and what our focus was on and we had more to talk about. So that was a really powerful learning tool. As I'm relatively new at being active on LinkedIn and then the other piece was, we both were able to because we got into real conversation and real goals, were able to both provide really as many interests as we wanted. But a couple intros that we felt would be relevant. And so we left both having something we can do to add value, a bunch of pieces that kind of come together to make a great meeting.

And then I'd say, from a network, you know, from a structural networking best practice standpoint, following up is important. And I'm going to do today and then making those connections that we said, we're going to make, our two follow ups and then I have no doubt that we're going to stay in touch and build a longer term relationship because it was 10 out of 10. And then, you know, if using kind of like good strategies, a meeting could be a 7 out of 10. And if you don't, or even a 5 out of 10. And if you don't end up having like, more frequent meetings, that's okay. Because it's impossible to do that with everyone. But it could still be meaningful and help first. So that's yeah, that's pretty top of mind. And I'm happy with the results.

Brock Briggs  6:12 

I think you highlighted something interesting there about how maybe it's good to connect with people on social and kind of interact with them a little bit before you hit them with a DM and ask. Usually, because even if you're asking for something as simple as a call, you're asking for something. And it's tough, you know, you're already kind of behind the eight ball a little bit. But if you kind of are following them, are able to comment on a couple of their things and add value in a meaningful way, at least they'll know your name and know that maybe you're connected already. And I wonder if there's something to that when it comes to cold outreach on it, even if it's just for networking, or maybe for business purposes as well.

Mike Jones  6:56 

Yeah, absolutely. I mean, I know, there's plenty of sales strategies and tactics that require and are involved with cold outreach. And I'm not a sales expert, by any means. My background as an entrepreneur is almost entirely consumer services. So I would argue, you know, I'm a beginner in sales even though I've been selling myself and things my whole life, but from an actual function standpoint, I'm a beginner. That being said, you know, a cold outreach is not as good as a warm outreach. And you know, that came into play, that's coming to play in multiple times of my career. A good example is raising capital. I raised capital for a while. I raised a couple million bucks, it took a while. And I got the advice from people who have done it before that you can't do a cold outreach to VC funds. And because they get so many that they will ignore anything that's cold.

So you have to get a warm interest. You have to learn how to use tactics to find people who know who you want to talk to and get an introduction. So that's like a strategy that is effective everywhere, in my opinion. And then to your point, if that's not available to you, there's a lot of benefit to having mechanisms like content, presence online, other means to make it so if you are making an outreach to someone, they at least know who you are. So yeah, I agree with that completely. There's a lot of different ways to do that. And then, you know, kind of your point, just getting started out, it is a challenge because you feel if you want to meet with someone and network with someone who's a couple years, a couple of decades ahead of you, it's almost impossible to consider.

You know, if it's like, well, I want to help first is the mantra, well, I have nothing to offer this person because they've done everything that I want to do over my career. The right way to approach that is just with, you know, a humble attitude, inquisitiveness, you know, eager, being friendly and wanting to learn, in my experience, all the people that you want to learn from or all the people that you want to help you with something, the ones that you want to talk to you are the ones that like to help. And so doing it the right way, whatever that is for an individual has always given me results, you know, because I'm always you know, being an entrepreneur of being an entrepreneur, you really find yourself in a position of feeling like you're taking everyone in order to build what you're doing. So I've been in that position for most of my entrepreneurial career where I'm meeting with people because I need something from them. And the ask for advice and help comes off really well if you're honest and truthful about it.

Brock Briggs  9:46 

Well, I think that there's that really highlights the value of building an online presence, doing whatever. It could be on YouTube, it could be on LinkedIn, whatever it is, like people need to know what you're about as like no see that you're contributing and that is an unspoken resume. I really firmly believe that. And I know that I've personally benefited from doing that. How did you think about or what was the learning process for that targeted networking outreach to the VCs? I'd love to hear like, what the big takeaway was from how did you go about, hey, I have this person, how do I get to them? And then maybe like, how would you teach somebody how to do that?

Mike Jones  10:29 

Yeah, I mean, yeah, so raising capital is a nice niche, so to speak, of specific best practices, frameworks, tools to use in order to be successful. So anybody who wants to raise capital, I would highly recommend not winging it because there's people who do it for a living, there's people who do it multiple times. There's, you know, VC fund managers who are on the other end so they know and talk about the best way to go about it. For me, my experience was raising capital with one company multiple times. So my fitness company Alchemy 365, is from Minnesota. We technically raised capital to start. We got one investor to give us the additional capital we needed. And he came on board as a founder because he invested pre launch. And he was involved the whole time. So we did equity on formation of the company. And that was one meeting and one check.

So we didn't go out and raise, we just happened to have this person who was part of our previous business, which is a CrossFit business, who believed in us. And we basically, were able to come up with a deal that we thought worked for everyone, you know, we didn't go to him with a, here's our terms, it was more let's collaborate. So that worked well. And then when we had successful expansion within our Minneapolis market, and we were ready to expand to Denver, then it was time to raise money from outside investors. And we did that really three times. We did a convertible debt round, where we went out and found individual investors. And that was what we would call friends and family round, where we leveraged just our existing network. And within our co founders, it was basically who do we know who we think would be interested?

So that was very warm leads, zero people that we had never talked to or zero people that someone from our founding team had never talked to. So that was warm leads, get an introduction, pitch, sometimes pitch over the phone. We closed it pretty fast because it was convertible, or convertible debt. It wasn't priced around. So the negotiation is a little bit easier. And the decision is a little bit easier for an investor because valuation gets kicked down the road. So you know, they benefit from being an early investor. When we opened our first Denver location, then we raised equity and did an equity round that was around that kicked off like a formal process. And I had the luxury of having our lead investor, be a friend, who I'd known for a while, who had recently started his first fund after working for TechStars. And TechStarsis probably the biggest incubator in the world.

And they're, you know, worldwide with locations. And he'd been doing TechStars as their general manager for a while and he launched a fund. So he was building a lot of expertise. So he gave me the TechStars playbook, which is very structured and you can look it up. And they have all the videos on literally like this is how you raise money. I followed as closely as I could, structurally in terms of how we structure our terms, what it looks like to have a lead investor, you negotiate the terms on and then go out and find others and then how to go out and pitch. And getting in front of people was a cyclical thing where I would do it for a while. And I would start running out of leads to pitch. And then I would learn something from someone who's good at sales or something like that.

And I would refine my approach and then I would open up another world of potential investors. And then that happened a couple of times. So by the time I closed around, I had gotten really good at that process, which, you know, we would call business development. Generally speaking, which is basically finding your existing network, figuring out some way to find to help the people in your network, think about the people in their network who might be relevant and making it super easy for them to intro to you. And so, you know, like LinkedIn using LinkedIn. The simple strategy is if I want to ask you for a referral, the easiest way for me to help you like, if I say, could you please refer me to people who might want invest in Alchemy 365, you're gonna think for like, you might think for a half hour and you won't come up with anybody. But if I look at your LinkedIn followers, I take the time and look through it and narrow it down.

And I find everyone that's chief executive officer that you're connected with. And we have a conversation, if I say, hey, do you know these five people? And you're like, I know two of them. But the other three, I'm just connected with, like, those two people, do you think they'd be interested in hearing our pitch? And you'd be like, you know, I think they would. And so that's like a structure tactic. And that tactic doesn't need to be done on LinkedIn. It's more like, one, being genuine; two, believing in what you're selling when you want to pitch and you want to ask for referrals. And then three, is asking for a referral. It's much better to make it really easy for them to make a referral by leading them to the type of person you want to talk to than just saying, do you mind referring me to some people who might be interested? That's like a yes, no, that's a, it's too much work and too complicated for me, the referrer to think through my network of 1000s of people to try to narrow it down. So I think a pretty well structured way of how I think about that kind of process of raising money.

Brock Briggs  16:29 

Well LinkedIn is such a valuable tool because it lays out that network graph for you. It's one thing if you're just like, talking to Joe Schmo or whatever, your uncle and he may not be on LinkedIn and you don't really know exactly who knows or like who he knows. So it's harder to do that both LinkedIn, you can see who everybody is connected with. And you can kind of, like you said, you're doing the work in advance and say, hey, I see that you know, these people or even if it's just a type of person, like, hey, these people work in tech or these people also work in the fitness industry or whatever it is, whatever your kind of persona or avatar that you're searching for and then making it easy on him like, hey, these are the people I want an introduction to and you're working with all public information that's already out there for you.

Mike Jones  17:21 

Yeah and I think the probably the biggest thing in terms of success of we're talking about raising capital, but process of finding people to pitch can be applied to many different areas. I think probably the biggest thing, the biggest driver of success for me and I would guess in general, is if I really believe in my pitch, my selling proposition and I know that I'm going to accomplish my goal, it's just a matter of finding the right people, then I'm going to accomplish the goal. If I kind of believe in it, I'm not quite sure, maybe there's some holes in it that I haven't thought through. Or maybe I need to work a little bit more on it. But I'm being lazy and I don't have that supreme level of confidence, then it's way less likely to work.

And I experienced that with Alchemy, where we did a phase of fundraising, had success, hit kind of like a natural wall, our expansion kind of went south for about six months where we had to slow down and make some tweaks before we started growing again. And during that South period, my fundraising effort dried up. I basically stopped. And it was because I needed to focus on the business. But also because when I would do outreach and meet with people, I got lots of nose because it was a lot of that like, you know the energy, you can sense energy even over zoom. If someone's feeling confident, they know they're gonna get their money, they're just looking for the right investor versus they're desperate to get their money or they're gonna go out of business type thing. It's like so easy to pick up on. And for better or worse, when you act like you don't need the money is when people start writing checks. And I've experienced that across the board. So I think that mindset part can be challenging to get to but it's real. So that would be probably the biggest thing.

Brock Briggs  19:21 

I worked at a venture accelerator, a nonprofit venturecapital.org as like an intern for a year or so. And then also worked as a mentor there where we would just like give and critique pitches. And you could always tell I mean, young entrepreneurs and even older ones, too. They're there to like, work on their craft and like be able to present to investors and you can tell the people I know exactly what you're talking about. There's a look in their eye, there's like a certain level of animation that comes to them that it's very easy to see that they are very all consumed with the idea and usually, like, in my head, I kind of like try to act as like an investor in those situations. And usually before they've even talked, I have already said I would invest in this person because they, you know, they've got the crazy look in their eye. I know that they're gonna pull something off.

Mike Jones  20:15 

Yeah, it's a strange thing. It may not be like a fair thing. But life is very unfair. So I think it's worth studying and working on for anyone, regardless of whatever job they do, but especially entrepreneurs because I mean, you can see it every day in the type of companies. Like some companies that blow up and become unicorns and they end up being like WeWork, right? WeWork had a $40 billion valuation and it was a total House of Cards. The unit economics of their units didn't even have a path to being profit profitable. Yet, whatever the guy's name is, was able to get a $40 billion valuation just on his charisma and swagger. That's a powerful thing. And there's a lot to be learned from that when you're trying to just do the basic, you know, raise enough money to grow that kind of thing.

Brock Briggs  21:09 

I have one more question about the raising. I think that this conversation kind of applies not just to raising money, but also to people who are networking for ideas and people looking to learn, like speaking to kind of myself a little bit and younger people. When you're reaching out and talking to potential investors or mentors or something like that, how do you tell whether the person is just saying no because they're not interested? Or no because what you're saying is actually a bad idea? Because there's a certain level of, you know, there's so many history is littered with all of these stories of famous entrepreneurs who just were shut down so many times. And in those moments that kind of can feel like, is this something that I need to push through and just prove this person wrong? Or is this person knowledgeable? And they're saying that no, this is actually just not a good idea? And you're gonna get burned? So do you have any, like heuristics or ways that you might think about how we determine which side of the fence we're on?

Mike Jones  22:22 

So, are you asking specifically about raising capital? Or do you mean in general,?

Brock Briggs  22:27 

Kind of, in general, maybe raising capital? Maybe it's like, a new idea for a business, maybe it’s?

Mike Jones  22:32 

Yeah, yeah. Okay. Yeah, cuz raising capital is, I think, its own unique thing. And what I mean by that is, if you're raising capital, if you're selling equity, you're doing it at a valuation with certain terms. So that if 99% of people are getting a raise and set the valuation at a level that 99% of people are going to be no just because of the terms. So that is its own animal. Like, by definition, if you want to get the most value out of your company, you have to set it so that almost everyone is going to be a no. So that's kind of a unique animal. But in general, yeah, it's a really interesting question in general because it can be very difficult because people are polite and they want to be friendly. And if they don't know you really well, they're not that likely to give you like the painful honesty of what they're really thinking unless you're able to really dial in on it.

So I can relate to that recently, especially as I'm pretty new in the type of work that I do for small business clients. If I'm talking, you know, I was evaluating what I was going to do for about two years because I started the rapid COVID tests business at the airport and ran that. So I was making a lot of money and didn't need to do anything while I was evaluating it. So I tried a lot of different things. And use my network of advisers and mentors and colleagues to bounce the ideas off of so I have some recent experience there. And so one thing that I picked up on pretty frequently as like, as I'm narrowing down or testing out an idea is when I'd be talking to you, we talked about things and people would divert to a different area or a different avenue that wasn't quite what I was talking about where so it's basically like, you know, I think I want to do a podcast. What do you think about that?

And if you're like, what do you think about writing? That's really interesting, that kind of thing. So like, deflecting to another subject is, I think, a good indicator that your message or your idea feels off to the person based on how what they know about you, doesn't mean it's not the thing to do might just mean you haven't refined your story about why you want to do something. So that's a really good indicator, I think, you know, listening, you know, when you're sharing an idea or of anything that you're thinking about pursuing, listening to what they respond to and how they respond to, I think is really important, listen to their energy or pay attention to their energy is really important too, if they, you know, sit back and are quiet and get more quiet, that's very different than if they start leaning in.

And their voice elevates as they're talking about the topic and they start getting interested in the asking questions, that's a good indicator, as it relates to starting companies. You gotta be really careful, especially who you get your advice from because you're gonna get great advice, you're also gonna get terrible advice from really smart people because everyone has their own interests, they know you in a different way. Every person knows you in a different way, right? Like, my ex wife knows me way different than my children. And anyone that I've worked with in certain companies know me differently than anyone I've worked with in other companies. So it's like, everyone knows a different version of you.

So you gotta be careful because sometimes, like, the best idea to start up for a company is the idea that every person you talk to thinks you're crazy, you know, and on the same side of the coin, sometimes the worst idea for you to start is one that every person is like, oh, yeah, that's a great idea. Because that might be something that's totally undifferentiated or they're saying it's a great idea because they've seen 1000 great products or services that are exactly like you're talking about. So I mean, I would say, that question is so challenging. Like, that's the basis of the challenge of starting challenging new ventures or ideas, like starting companies. So yeah, you know, that'd be a good book. I bet there's a lot of books about that.

Brock Briggs  26:55 

I'm sure that there is.

Mike Jones

Yeah

Brock Briggs

So you started the first CrossFit gym in Minneapolis. Is that right?

Mike Jones  27:03 

Yeah, so CrossFit started in 2001 or rather crossfit.com went online in 2001. It spread via the internet, it was like, it's like one of the biggest internet brand success stories ever. It's a billion dollar brand. It's one of the most recognizable fitness brands. And it is a foundational or a category, defining brand, meaning every boutique fitness concept is influenced by CrossFit. And so it's spread over the internet, like they put this cheap website on and ad a workout of the day and spread really fast to the military. So the military people started doing it because the workouts are incredibly challenging and functional and full body. And by the time I heard about it in 2008, I heard about it from a family friend who was going into the Marine Corps and he told me he was doing CrossFit. And I was like, what the fuck is CrossFit? I looked it up and spent like, couple hours, like many people being like, this looks like it can't possibly be a good workout because it's two movements done for time.

And then I went to Lifetime Fitness and tried it and, you know, almost died and didn't complete the workout. I was like, alright, this is the thing. And my wife, Andrea, who's now my ex wife, she was a trainer at Lifetime Fitness. And she was really good. She's a really good trainer and I was a triath and I was like in decent shape. And I basically like within a couple of weeks of investigating the brand, the concept and seeing the east and west coast we're starting to be a lot of gyms popping up. And also seeing in Minnesota, there's one CrossFit gym. There weren't any in the city portion. And I was like Andrea, there's going to be CrossFit gyms everywhere within a year. We need to open one now. She was like, okay, because we were 29. And she didn't you know, she was fine with her job, but she was excited. So yeah, we found a rec center in St. Paul and got them to let us use the basketball courts, that gymnasium for an hour in the early morning.

And she stole 13 of her one on one clients from our group fitness clients from Lifetime Fitness. And we charged them on day one. And we started, we ordered like $5,000 equipment from Rogue fitness. yeah, we started 13 paying customers. We started doing free workouts every Saturday in the park. And we grew it slowly while we were looking for space to rent. And we stayed there for six months. They had to move us so they moved us into the racquetball court so we did the workouts in a racquetball court and we found a location, got a landlord who is willing to take a risk. And he put in some tenant improvement dollars, which is kind of hard to do your first time around. And that December, we opened up the facility and we had like 30 customers, which is almost enough to break even on the expenses and rent at least not any pay for us. And once we opened up, we grew like steady and fast and cross at St. Paul. And then we partnered, we found another guy who had started a CrossFit called CrossFit Minneapolis across town, right out of college and he lived in his gym.

It was a shithole gym. He lived in it for like six months, we met. We liked each other a lot. And like a week later, he was like, hey, why don't we merge businesses. And we're like, alright and so he closed down shop, because he didn't have a good location moved in into our space. And then we grew that together. And we mapped out. Like, how many members do we need to open up to reopen cross at Minneapolis? And how many members do we need for Mike to leave 3M. And we hit it pretty much right on track, wherever our guest was, we hit it. I left 3M. We opened Crossfit at Minneapolis and I think grew from there. And you know, the rest is history. But yeah, that was a great first business because it was simple. There was a proven model. It was applying, it was a proven model that was going to evolve dramatically.

But we could look at like we could visit when we went back home to DC. We could visit Atomic CrossFit, which was crushing it. And I met the owner who was also a Marine officer. And I could call him and be like, hey, what do you do about this? I just copied exactly how they ran their models. I didn't have to make up 100% of things. I only needed to make up some things. It was so simple. And economics were not something that I would do again, but they were good enough to have to be able to visualize something that you can make a living off of. So yeah, it was a perfect, first entrepreneurial leap opportunity, which is what I would recommend to people who are thinking about becoming an entrepreneur, which is like, yeah, you might be one of those people that comes up with, like the next billion dollar idea. Those people exist clearly. But if you don't have that idea, I would recommend finding something that's like one step outside of your skill set and has some guardrails of how you can innovate because starting something from scratch that's new to the world is very difficult. Starting something that's like kinda unique from these other things, less difficult.

Brock Briggs  33:02 

You're given the playbook on how to do it. Can you kind of like briefly walk me through what the business model of CrossFit is? And then kind of maybe talk about because I think you pay like a licensing fee or something like that to the brand. And then maybe talk about the economics of your gym? You know, you started out with 13 people, what were you charging people? What were kind of the margins, like and then kind of what did you end up growing that to before you left to start Alchemy?

Mike Jones  33:34 

Yeah, CrossFit is a license model. So an individual person fills out their application, which is a take the level one seminar, so yeah, that's the required, you take the CrossFit level one seminar, apply to be an affiliate, they choose whether to approve you or not, they grant the name that your class based on, you know, them being willing and able to grant and or deny certain things. And from there, you can use the name that they approve, you can use CrossFit. You know, there's whatever their trademark rules are. I don't remember anymore, but it's like, it's very loose. But there's some things you can't say. From there, you can do whatever the hell you want. You can make it a yoga studio and call it a CrossFit gym. You can make it a Zumba facility and call it across the gym if you want. I mean, nobody actually does that.

But you can make it like a strength based thing. You can make it no barbells you can make it follow across the.com So you can wherever you want. So it's got like a little like baby elements of what a franchise would look like with none of the consistency requirements or anything like that. So it's very entrepreneurial and it's reflected in the makeup of the brand and the affiliates that are out there and everyone one's town, they're all different. And they're all run by entrepreneurs. So that was really attractive to me because I didn't really want to start a franchise. I knew that I would, that a good franchise would have their strict operating policies that would make me feel limited because I am entrepreneurial. And Econet economics are varied greatly, depending on how you make your business model. But the general CrossFit or boutique fitness model is you have group classes, and you charge a monthly subscription rate.

So it's recurring revenue, and you can charge whatever you want. So crossfade is like 200 bucks a month for unlimited for your garden variety across the gym. And then your costs are your labor for the people teaching the class, the labor for the people who run the company, your rent, your supplies, and cleaning, cleaning supplies, things like that. Your marketing expense, your legal expenses, your standard expenses for any company. And the economics look like, you know, 200 member CrossFit gym that charges $200 A month is 40,000 a month in revenues. And the biggest driver is going to be your payroll and rent, if it's just hourly instructors, your payroll is pretty consistent and manageable. So your biggest might be your rent. So you could go into a warehouse that's off the beaten path, that's 5000 square feet.

And that'll be a perfectly plenty, plenty of space to serve those 200 members and your rent will be $6,000 a month. And so if you have $6,000 A month plus, call it 10,000 in additional expenses, including payroll, then you've got 16,000 in monthly expenses. So you're making 24,000 a month in profit. So that's pretty good business, don't you think? Yeah, it definitely, but most in my experience, are more at like the 100 to 150 members. And then there also might be a little bit lower in the monthly rate. And so that gets it down into, you know, on a good month, you're making five, you know, five maybe 10,000 in profit. And if your profit is everything, the owner pays itself. They're making five to $10,000 a month and 10,000 a month, it's certainly plenty of money for a lot of people, especially if they have a spouse who makes good money.

For me, it wasn't enough. That wasn't attractive to me. I was like, cool. That's, you know, I think it took like, I think it took like a year, maybe I think it might have taken two years of growing to match my 3M salary. And I was very happy when that happens. But that was like total family income because my wife and I were on the business. I wasn't like just my income. So I think for my income to match, it took a lot longer. And I have to caveat that by saying we didn't just open one gym. If we would have just opened one CrossFit CrossFit St. Paul is a hugely successful CrossFit gym, that would have gotten us to the like a pretty decent pay, like maybe 20 grand per month for our family. But we grew. The moment we had enough money, we added a location. And we never stopped doing that ever. So we always kept our pay low. And that creates, you know, theoretical wealth building opportunities, but it also creates a lot of risk. So that's something that I've learned a lot about as I've done.

Brock Briggs  38:52 

What is the biggest challenge in a business like that? I've listened to a good amount of Alex Hormozi, who is like famous for gym launch and acquisition.com and all these things, post some like really good stuff and very, very raw. He talks a lot about like getting people in gyms as being kind of one of the primary, you know, you need customers like you need doing that. How did you think about acquiring customers for a thing like that? And then also managing the balance of like, hey, the capacity of our gym is like, maybe it's 150 members, but like, as soon as one leaves, you need to have one ready to come in. And like, maybe not turning people away but also, you know, being ready to like accept somebody new. So I'd have to imagine that that pipeline of new customers and like your marketing efforts is probably very touchy.

Mike Jones  39:48 

Yeah, it is. It's becoming more every year one of the more competitive consumer businesses that you can be in and it's a tricky line of business too because to get to open one gym, CrossFit gym, yoga studio, whatever you're passionate about, assuming it's a decent program because there's many decent programs, there's many good programs. You open one and get enough members that can make some profit. And like one member of a two person household where one person has a good paying job, the other person just needs to make a few 1000 bucks a month, in my opinion, is easy. It's easy to do that, if you have a good personality and you're relatively smart. But building a business that's multiple locations that has, it's usually close, it's very close to capacity all the time. And like you said, like it might not.

But I've never heard of a boutique fitness concept that like, truly capsular membership because the nature of churn is that, like, if you have 200 members and you have a 10% churn, you're gonna lose 20 people per month. So you need to add 20 people per month just to keep it at 200. And then once you get to, if you have the same churn rate, when you get to 300, you're losing 30 per month and you need to add third. So like Orangetheory fitness is the best in the business and they get up to 1000 members per month. And so they have a, I think a 7% churn rate, which means they lose 70 people per month. So there's like an equilibrium point that nobody can get past. It's different for every business. So to get to that point, is really hard. Almost nobody does that.

Most people who say they've done that are flat out lying or they're charging a low amount or something like that, like, it's really hard that and that's where Alex built his I think it's first whatever is business that made him very successful was like a coaching marketing platform for gym owners to get more members because it's a skill, it's challenging. For me personally, our CrossFit business, we grew and we had great timing. We grew with the market. So we grew like no problem. We thought we were super smart. And you know, I got an MBA in marketing. And I was a consumer products marketer at 3M so definitely I know more about marketing and someone who doesn't even know what the term means. And we have three smart co-founders who worked really hard. For us, it was like, what we did is we focused on the experience, focus hard on creating connection and community. And we made our facilities not world class, but we made them better than the average.

So like we visited whatever local one, we made sure that our facility was better in every way. And we did not have the best facilities in the country by any stretch of the imagination, but they were pretty good. So those are the elements that made it so we grew like no problem for a while. But once we opened our third CrossFit gym, we opened it. And it was less than a mile away from a competitor, which is also CrossFit. And we started off at into difficulty growing. We never figured it out because that was when we were launching our own brand. And so we launched our own brand. And basically kind of like, we're like cool, we're going to promote a general manager to run the company. And we're going to phase ourselves out of it. And it stayed kind of flat until we sold it. So staying flat in my opinion was a success because the market was starting to mature.

And we didn't put a lot of emphasis in growing. Alchemy is when we learned how to acquire customers and how we learned how to be great marketers. And because I was creating our own brands in a market where boutique fitness concepts were starting to pop up like every day and it was starting to become really intense competition. It's a constant challenge. And we've gotten it down to where we know how to do it. And we know how to fill up a studio with the right number of members, paying members before we open. And then how to get to the right number of members within a year. But it's taken, you know, it took us learning with our first business for you know, six, seven years.

And then this business which has been around for its eighth year to really feel like we know how to do it regardless of what the trends are in paid ads, all that stuff because that's always changing. So time, consistency, incremental progress, we've tried some things we're like, oh, maybe this will really but it's never that it's always try, test, improve, try, test, improve on an incremental basis.

Brock Briggs  45:05 

Well and I bet that you are able to really hit the ground running. Like you said, you're kind of starting from scratch, but you cut your teeth on the CrossFit way and before kind of going off and starting your own thing. So was there anything that you are doing differently with your own brand that kind of came as a result of like being free from the CrossFit chains, I guess? It's not really changed. There's like a very strong association with what CrossFit is. Everybody knows what that stands for and the people, the community that's a part of that. So how is that different? And I'd love to hear about, like, how you think about acquiring customers now with your own brand?

Mike Jones  45:48 

One of the inspirations for alchemy was, we saw the rise of boutique fitness and in our market leader was core power yoga, which is a really solid concept that's national and they do yoga. And they also do sculpt, which is like yoga done fast in a hot room. And it was the most popular class in town. And we were Crossfit people. So we looked at it and we're like, that's not fitness, we can do better than them, we can we have the best fitness program in the world, which is CrossFit, which I still think is the best group fitness program in the world. But our program is so niche, that we think it's limited in its scope. Whereas sculpt, anybody can do it. So we're like, there has to be a way to take high intensity functional movement and make it a little bit more accessible, a little less risk.

Because, you know, nobody needs to try to, people used to back in the day people used to try to like be like Crossfit is not dangerous. It's not dangerous if you do it perfectly every day, but most humans are not capable of that. And they're not even, they're not capable of even listening to a good instructor 100% of the time. So there's risk that you're going to get injured at some point if you Crossfit. So we recognize that because we've been doing it for eight years at the time. And so it was like how do we make them more accessible, a little bit less scary, keep the functionality and efficacy and put it in a pretty package because we saw where the boutique space was going, pretty environment.

And that's what Alchemy is like, you know, put everything together and out came Alchemy, which is yoga warmup, CrossFit workout without barbells yoga cooldown. And that was the concepts and we started it the right way, which is we came up, we wrote it up. And I bet within two weeks, we did a class on a weekend in our CrossFit gym not across the class where we're like, hey, we're gonna try a new workout if anybody wants to come try it. And Tyler or maybe Andrea, Andrea led it. And it was awesome. And we evolved it over the court and they were like, we're gonna start a company with this premise. We're gonna build a company around this workout. And we kept doing free workouts every weekend and evolved it, brought on a partner who was a Yoga expert because we didn't know anything about yoga at the time, like two people or maybe was like, first time it was like maybe 10 people showed up who our friends are like, yeah, whatever.

And then the next time like one person showed up. And then over the course of the year, as we were building out our business plan and looking for space, we grew it and two people will come and then four people will come and then six and then maybe we do something less. And then by the end of that year, when we're getting ready to open the first Alchemy studio. We had a fourth CrossFit gym in a sketchy part of town. There wasn't that successful. And so we had free alchemy classes, which we called power 10. We didn't even have a name, the free classes had gotten so big that we canceled our CrossFit classes in the evening. And we made them free power 10 classes and they were like 60 people. And this is like, you know, like 60 rich white girls going into the sketchy part of town to do this workout. And so yeah, we could tell very quickly that it was going to be successful.

So that's kind of like that concept online. Like a lot of people who watch this. Twitter, people on Twitter trying to build stuff. People on LinkedIn are trying to build stuff, the concept of like start it now and evolve is how we that's how I've done every thing and it's always works really well because we tweak it after every use. And that's what makes it better. We asked you know we did the workouts. We asked people what they liked about it, what they didn't like about it. And then from a you know, so that's like the key is connection trial with a great, it's got to be a great product. If it's not a great product, then you're then you're relying on like, short term market marketing tactics to get to suck people in, you know, like six week challenges, bullshit like that. But if you have a great product, it obviously won't sell itself.

But if you have a great product and you find a mechanism for people, the right people to try it and tell their friends, that's a real business that you can do regardless of how good you are at content creation, paid media, all that stuff. And then layering on great content creation paid media, digital strategy. That's what makes companies go national, like orange theory. But yeah, from an acquisition standpoint, were always pretty like, we also did not ever play into the typical fitness marketing strategy, which I'm not a fan of. The typical fitness marketing strategy is like, change your life and 90 days or, you know, get six pack abs or all that stuff. Unfortunately, it's still kind of the standard. We always hated that. So we made our name, something that was aspirational, is based on the book, The Alchemist.

And we said, we're gonna create real, authentic stories and we're chasing a lifestyle as opposed to like, get fit quick. I think it probably, we had really good success over the initial five years. I would guess if we like, push it real hard in certain areas, we probably could have grown a little bit faster. But in the long run, today, we're left with a brand that's like, way even more cool than it was when it was the new cool thing in town. And that's what's important. So we made a lot of mistakes in that company over the years and all of our companies. But that's one thing that we did really well: we built a long term brand. And it's working, it's paying off.

Brock Briggs  52:21 

Well. And it's cool that at our another layer of cool because it's unique to you. It's like you've gone through this process, you've figured out what has worked and kind of put your own spin on something that is a part of all of our lives, whether you are into fitness or not. Do you think that you were kind of alluding to people a building or starting businesses themselves? Do you think that the strategy of starting out with a free product like that is a good way to see if you have something that's valuable? Like, you know, you're offering a free class and you know, all of a sudden, you're maxed out. That's like, oh, all the flags are waving, like, hey, you've got something that people will probably pay for. Is that how you think about testing, maybe a new product or a market?

Mike Jones  53:11 

Generally speaking, yes. Providing your offer, service, products, program, whatever it is. Providing your offer, to who you think is gonna be your customer for free and getting the feedback is a great way to refine it, find out if it's compelling, if there's a value proposition that people are willing to pay for. So I'm a believer in that. We still use free at Alchemy to get people to try. It's an effective tactic, but we use way less free than we used to. We used to do a free week when they're down and narrow it down. And now I think it's just one free class. And that's a mechanism of psychological learning that is the whole like, you know, price creates perception of value. So there's, at some point, you got to start charging money. And I think most people would say, a good rule of thumb, try out your concepts now for free to learn, refine and validate.

But start charging as fast as possible because there's a huge difference between people that are use your product for free and people that will pay so I think that's probably a general rule of thumb and then the scale slides up and down and side to side in a lot of different situations. So what I want you know, when I'm building it is I want to start collecting money from it as fast as possible, but I also want to learn and especially if it's something like if it's like an actual product that you have to pay to have someone try, you know, that to buy from a manufacturer. You know, there's a lot of cost involved in tweaking, so you gotta learn a lot of cost and a lot of risk involved in making an order of a half big product. So that’s the science to all that. But that's also the art of launching new products and service, which is a whole field, you know?

Brock Briggs  55:12 

Yeah. Well, then I wonder if it's maybe more differentiated by as you're saying, like what exactly is being offered. If it's a service, like what you guys are offering, it's much easier to offer something that is free, because, hey, we already have these paying customers. And we're, you know, the lights or the bills are being paid, and everything is good there. And it's not any marginal cost for us to just allow another person. However, if you've got a product, a lot of times, I just am thinking of like myself and other people, maybe in that situation of like, hey, maybe you built a product. And maybe that's why freemium products exists, is like you need a wider top of funnel to get people in because or the value prop needs to be so clear. And like it is just that it makes it a no brainer. And those types of things just like don't happen that often I don't think.

Mike Jones  56:05 

Yeah, absolutely. I mean, I think products are, I would say my experience is products are different than services. Because just like you said, the classes, it makes complete sense to let people try for free, but I'm launching a hobby startup right now that's an apparel company. And we've got a large group of friends who are users of the types of products. It's apparel for the EDM rave, like festival space with a large group of friends who are enthusiastic super users of the type of products that we're making, which is high performance and material for that kind of environment. But it costs a lot of money to get that initial order and spent a long time tweaking the products. And we got it to the point where we're like, we think this is better than the competition.

And we think that the market is there. So our first order, we got some samples that I gave out just to try it out, get feedback for the next order, start getting some content, but my first group of friends, they paid for their first product, not giving it to them. And so that I agree, like, you know, it's you got to at some point, you gotta create something that you think people are willing to buy and especially with a product like this, it's a huge, like a world of difference of will they take it for free? Or would they pay for it? And that was important to me to charge from the beginning for it.

Brock Briggs  57:34 

Can you give us a little bit of the size and scale of what Alchemy is today and then where you're looking to take the brand over the next five years?

Mike Jones  57:43 

Yeah, so pre COVID 2015 to 2020, beginning of 2020, we got up to four locations in the Minneapolis St. Paul area in 2017 and 2018, we opened our first ever location. And then we opened another Denver and another Minneapolis. So we got the seven locations. We opened our seventh location the month before COVID. COVID put a hard stop on all growth. And it was pure survival for a year 2020 and 2021 was also survival. So I stepped down at the end of the year and stayed on the board and Tyler moved in my seat. 2021 was also survival. For the end of 2021, we started growing again. And last year 2022, we opened our eighth Studio in Denver. And then two weeks ago, we opened our 9th studio, which is also in Denver.

So our model is way tighter than it was prior to COVID smaller locations, more profit, less overall revenue, but less overall revenue and members but more profit. So our growth plan is currently, it's organic growth because we raise capital, right? We raise capital to expand and then we get our asses kicked by COVID, so stopped everything for two years. We don't think our valuation is substantially higher than the original valuation. So we don't really want to raise capital right now. So we're trying to grow organically to get more and more profit and cash to self fund growth over the next couple of years. And then at that point, who knows? We'll probably, we will need to raise capital to grow faster and create some liquidity for our investors. That could either be raise capital and keep growing corporate owned or raise capital and become a franchise operator kind of the two options.

But Alchemy, you know it's profitable, it's growing pretty fast, organically. Now brand is strong, but we still have some like we still have tight financial situation because we have like back rent that we have to negotiate with landlords and things like that because COVID I mean It was literally two years of, you know, losing 70% of your membership, but you still have the same fixed costs. So we got to ask this kick, as everybody else in the fitness industry, but the company survives and is back on the growth track. So I would say if it's 2023, now 2024 or 25 would be when we open an additional market and then who knows from there, but our perspective has changed, too. We've got investors so we have to provide liquidity to them.

But I would bet I would say that our founders have gone from short term thinkers, meaning like, we were building like, thinking only in a 10 year horizon, we're like, we're gonna build, we're gonna raise money, more true startup fast and we're gonna raise money grow really fast, were gonna sell and retire forever or something like not retired member of solid, be rich, but now we're more seasoned and more experienced. And like me, I can't speak for anybody else that I see the value of making good money off of a stable, profitable business. And the fact that I can be an owner of a company like Alchemy and only participate in an advisory board capacity and watch it grow with a great leader, I'm like, I want that thing to just grow steady forever. And that's winning because like, you know, when you talk to entrepreneurs, there's some that did like, super fast growth, go public, exit. They don't ever have to work again. That's great.

In some ways, there's some challenges to that because you got to figure out how you're going to manage being a well-to-do, wealthy person. A way that I've learned that I really like, is, like a decent size, very profitable business that sustainable, growing and predictable, you know, like, I would much rather have a $20 million business that makes it makes 2 million a year for me than a business that I'm trying to grow 50% per year forever and then maybe sell someday, personally, because the risk profile is killer of the fast growth startup. And challenges of growing that fast are also killer. So our perspectives have changed a lot over the past five years.

Brock Briggs  1:02:30 

Yeah. Well and I think that there's a mindset to that, one, entrepreneurship, I think a lot of people at the beginning. It is just like, oh, hey, I'm gonna build this thing and exit. And then there's kind of really not a lot of thought about, like, what you're gonna do after that. And it's like, oh, maybe I'll just like, retire or go to the beach. Like, it's such a small percentage of people that do that. And because I think if you're geared that way, that doesn't just stop. You're going to be tinkering. And like wanting to do something, optimizing for cash flow and like kind of gives you the opportunity and flexibility to do other things, take bigger swings, start new things and move on to the next. Another thing that I wanted to talk to you about today. You're a fractional integrator. I know that you do like some consulting and you also like to help teach EOS. Would you mind kind of like giving me a breakdown of what EOS is? And like, why that's important. And then maybe we can kind of take it from there about how it applies to a business.

Mike Jones  1:03:36 

Yeah, so EOS is an acronym for Entrepreneurial Operating System. And it's a business system that a guy invented that a lot of people use a lot of small businesses use. And it's a set of frameworks and tools and ways of structuring your company that's very simple, very effective and very easy to implement, very easy to understand and implement in a small business. And the outcome is, everyone in the company has a shared language and a shared way of speaking. The company can get more aligned on the plan because it's simple and it's easy to understand. And it's shared by the whole company. Everybody has a clear understanding of what their job is and who they're accountable to and what they're accountable for. So it's just a conglomeration of really good business best practices put into a system. It's branded small businesses can implement themselves, which I think probably most do to start.

And then once they get to the size of they have a leadership team. Then they can pay an implementer who is a paid coach to come in and lead there all day sessions to help them implement a lead three, a series of three all day sessions to help them map out their core values, core purpose, their core focus their marketing strategy their 10 year plan three year plan one year plan, teach them how to run a quarterly session in which they lead each quarter. For an average of two years, during the quarter, the company runs a weekly meeting called a level 10 Z score, one to 10 at the end of the meeting, so you run the same meeting, same structure. There's a lot of nuance and skill to how to run it. There are tons of implementers out there. They're the ones that implement.

And then within the company, the way companies operate with the name. The integrator is kind of like the chief operating officer who runs the day to day. Visionary is typically the founder of that company size or CEO. And so I've, you know, we launched our CrossFit business, like we talked about, figured out on our own how to get success and then we were launching Alchemy, I read the book traction with one of my partners, Scott, and it was like, Traction by Gino Wickman. And I read it, it's a pretty short read. And I was like, oh, yeah, this is that, like, they don't teach this in business school. In business school, they don't teach you how to run a company. Like, this is how you run a company. And I called Scott and like, we need to do this. He's like, yeah, I agree. We found an implementer, who was just getting started and hired him. And we're kinda unique.

Most companies hire an implementer after they've existed for a while, we just happen to. I mean, we were already running our Crossett business or like, we're basically launching a new thing, we've got five co founders. So we have a full leadership team. Let's do it. And so we implemented it, had an amazing growth. We still hit the ceiling, we still had growing pains to work through. But those were growing pains of growth not like incompetence or spinning our wheels because we didn't get aligned. And so it really helped us grow fast. We went back and self implemented EOS with our Crossett business. And that's like, I credit that system to keeping the business flat on sales and profitable for three years, four years, almost while we were trying to do both and then totally passive. We had a good general manager who was smart and he ran the system, and it worked. And then we sold it.

And so when I stepped down, I started getting into fractional work, which fractional executives are starting to become popular, which is basically a functional expert who's been around small businesses running growing companies for a while and one of the functions typically fractional marketing, operations, finance or kind of the three sales as well, you know, any function at this point has fractional people. That wasn't a thing 10 years ago. It's becoming a big thing now. And the benefit is, as you're growing from zero or one person or a set of founders to a sustainable company that has scale and a leadership team that runs it, it's super hard to do it because you're always in a position of needing expertise, but you are not ready to afford it.

So like, you need marketing expertise. You do the best you can for a while with who you have and you get contractors to fill in specific areas. But you're like, I need a marketing expert but I can't afford who I need. And so that's where the fractional executives come in, where it's like, well, you can't afford a full time person that has the experience and skill set that you need. But you can get one day of their time. And the right people can structure it so they can give you what you need. And give you that executive adult in the room kind of for some leadership team, which a lot of companies are homegrown, right? You start, you figure everything out as you go. This is like having experts swoop in for a set period of time, elevate that function, establish the role that you need to fill. Because one of the challenges of growing is there's functions and roles that you need, but you don't even know it's changing so much.

And you need people to sit in multiple seats. So you don't even know how to structure the job. And employees coming into small businesses typically need a decent amount of structure. They're not like your high octane million dollar a year executive. Maybe they will be 20 years from now. But you're hiring people that have never done what you're trying to do. And very few people do well, if you try to bring someone in and you're like, I don't really know what the role is. I need you to grow with me, which I've done and it never worked. So that's where the fractional executives come in. And so I do it as the integrator. So I come in one day a week to companies that run EOS and they need someone to sit in that seat on a temporary basis. So it's founder led, they typically implemented EOS, where integrator left.

And they don't think that they have someone who they can promote and they're not ready to. They feel like they need some structure before they bring on someone that can be successful. Or they're in the integrator seat and they want to elevate to visionary. And they want that structure. So it's a great way to bring in structure, rigor, experience, attitude in the team to help push you through that difficult face. So I love it. I wish I would have knew it was the thing over the course of my first couple companies' growth. I would have used it more regularly. Because what I did is I tried to grow people into their seats. And sometimes it worked. Sometimes it didn't. It was like a medium success rate where some of these functions, people who have done it 20 times, it's so easy to set up.

But people who've never done it before, it's almost feels impossible. So yeah, that's what I do kind of like on a day to day basis. I do. I do two companies, so two days per week. And I do one on one coaching of new entrepreneurs and new integrators. So kind of like people moving into those states kind of executive coaching engagement. So it keeps me interested and allows me to have plenty of time to work on my other stuff.

Brock Briggs  1:11:18 

You know that sounds super attractive for young businesses, young entrepreneurs who are kind of in that like, I don't know what's next, like I need somebody with some experience to come in and do something. You now in the integrator seat, what do you find that companies are not doing that they need the most help with on that on how to implement it, I guess?

Mike Jones  1:11:42 

That's a good question. So, I mean, one is, you know, EOS and a couple other business systems, they all work. So companies that have implemented them. That's a good step, because they're putting in the effort to put in systems and processes that will allow them to grow past the phase of them telling everyone what to do and then being in every seat because the owner being in every seat, is you're never going to get past a certain point, it's not possible. There's no, maybe someone will be like, there's this one company that did it. But like, I don't think there's any company that's ever done it. Like it's like an impossible thing. And so in order to do it, you got to get to learn, you gotta grow and you got to get good people and all that stuff.

And so companies that aren't implementing systems, I would say is like, I would recommend they look at the system and implement it and start using it because it frees up your brainpower to work on the stuff, that's the actual hard stuff, like making your product great and differentiated. And coming up with your marketing, activation and executing your communications, that make it so that people are interested in buying your product. That's the hard part, how you structure your org chart should not be something that you have to make up on your own. If people have already done it, like that's not your business model is not how you're differentiating your product or services. So that would be the one thing that would be like, just use a system. Like a lot of people don't use this system because they're like, oh, it's like ego base.

So like, can be someone else's system. I want to do it my way, like your way is probably not that good. You know, to be honest, because most businesses don't make it. So that's one and then people that do implement the system. I mean, there's a lot of challenges, you have to use the system and you have to, in order to grow past that awkward point where the founder is directing everything, you have to be methodical about where you're going to elevate. And so for example, if you're directing everything, you are in marketing seat, operations and finance and as you elevate, you know, it's probably not going to work. If you just elevate three people and three functions and be like good luck.

You have to build things out in one area and then help the operations person for example. They have to have success moving in your seat and know how to do the work before you elevate if you're always changing how we operate on a weekly basis and expecting them to learn but not spending the time to teach them or give them the resources they need to learn, you're just going to be spinning your wheels and not making progress and then that person is eventually going to leave because they're underpaid and they're getting shit on but you’re busy. So you're going to just hire the next person you can find as opposed to like building out the system. So that's what I would say is like you gotta be methodical. You gotta have systems to grow.

Brock Briggs  1:14:50 

So for companies that are maybe looking to implement EOS or have never heard of it and are interested in it, it's less so about something to do with your specific product or service. But as you say, systematizing the back end of like how a business operates, how you talk to each other. A standard operating procedure for just accomplishing the day to day tasks of business that are not unique amongst all business.

Mike Jones  1:15:21 

Exactly. That's exactly right, well put. Yeah, it has nothing to do with what you sell, it really has nothing to do with, like, what your marketing plan is just do you have a marketing plan? Is it communicated to the team? So yeah, it's the infrastructure, it's the foundational how you do it part. It is universal, like, it's not customized for industry. It's just a one size fits all.

Brock Briggs  1:15:48 

I want to kind of like, take a second and plug like what you do if people are maybe interested to like, hit you up on one of these services? Or like, if they're interested to talk to you, what is like a pipeline or what is the pathway look like from the time somebody reaches out to you for like, hey, will you come and do this at my company? What does that process look like? What could they expect?

Mike Jones  1:16:13 

Yeah, for my specific process, it's companies that have started implementing EOS. I stay within that niche. So if they've implemented EOS on their own self implemented, they're running EOS. And they're starting to stagnate or the owners feeling like they're not getting enough time away, can't take vacation, they're starting to have people issues or starting to have turnover or they're not happy with who they have and they don't really know how to go from there. That's the place I want to talk to them. And that is a listening conversation where I just hear about their pains and what's affecting them.

And then my recommendations are usually in other areas. I mean, talk to this person, you know, sounds like you might need some help with the finance department or whatever. I like to be able to have people that I really like to recommend. So it's basically like, here's my list of experts. I think these are the two relevant ones based on the challenges I'm hearing. And then sometimes, based on timing, company size, there's opportunity for me to come in. And that's one day a week sitting in the integrator seat or half day a week, either sitting in an integrator seat or as a coaching engagement for the visionary and integrator, so it's more like observing and providing a coaching environment. So the first thing I like to do is just have a conversation and listen and then it's usually here's a couple of recommendations based on what I heard that I think can help you.

Brock Briggs  1:17:44 

What are the typical costs associated with something like that? Let's say that we're past the, we've had our chat and we were going to have you come in and help integrate for one day a week. What is to the extent that you can, what is the cost of that run? And what is a typical timeline for how long you're usually sitting in that seat for?

Mike Jones  1:18:05 

Yeah, so I have a range, not a range. But so for, I'm doing the one day a week, that means I'm doing one on ones with the owner and leadership team members running their weekly meeting and then have a little time for special projects or financials review. And so that's at the 25,000 per quarter, bill quarterly. And then the half day a week is a little bit more custom depending on whether I'm sitting on a leadership team or I'm in a coaching engagement. So that's, you know, anywhere from 2500 to 6000 a month, depending on the exact structure. There's a little more variability there.

Brock Briggs  1:18:44 

And then how long do you usually sit in that seat? Is it like, hey, I'm gonna stick around until this is good? Is it till the founder/CEO is like, okay, we've got a handle on things now. And we'll call you if you need something?

Mike Jones  1:18:57 

Yeah, it is. So I make a rule for myself when I start with someone that I'm willing and able to stay until we're done, you know, like, stay as long as they need me. But the objective is for it to be like a 9 to 12 month engagement. So my job is to come in on an interim basis, help them tighten things up, help them get on a weekly, paid weekly and quarterly cadence that works and also prep the owner and the team to receive a new integrator, full time integrator, with a higher level of success. Though, I want to get out as fast as possible. And generally speaking, that's like three or four quarters because one quarter is not enough to really do anything other than make sure the place doesn't burn down and start things on the path towards progress. Even a small company, you want to move as fast as you can, but structural people issues. You gotta be consistent. And then it takes time to start seeing impact.

Brock Briggs  1:20:02 

Yeah, you need to kind of be there long enough to get a good handle on what's going on. But also, if you stick around for too long, I could see that being detrimental as well if you need to, like hand them off to somebody full time, like you said, or maybe they're beyond the point of needing it anymore. You also mentioned earlier that you spend a good amount of time mentoring young entrepreneurs. And I imagine in this line of work, you talk to a lot of them. I'd love to hear about what is the most talked about problem or the thing that you are seeing a lot of young entrepreneurs today that they're struggling with? And maybe for those who operate or are looking to operate a business, how can we avoid that?

Mike Jones  1:20:47 

Two different people that are the same people in different phases, people who are who want to start a company, that absolute, like the unifying thing is being held up having limiting things that hold them up from actually starting and moving forward. And so that's why like online, like every content creator, every person online, the thing they say most is just get started. And so I agree with that 100%. I mean, there's people who start companies and then there's vast numbers of people who always wanted to start a company. There's plenty of people who never do and that's totally fine. But the people who did want to start a company never did. It's kind of just you know, it's a disappointment. And the reality is, starting a company, you don't have to bet your livelihood. You don't have to use up all your life savings.

Some people do that because they think they're going all in. But it doesn't have to be the riskiest thing you've ever done. And you can start today towards the past. So that's the big thing, people get held up, they spin their wheels, they want to create a perfect whatever before doing it. And the answer is always like just start. And then people that have started companies are building one thing, especially like young people who tend to be younger, myself included, is feeling like you're smarter than you are and feeling like as you have success, you start thinking, you know, a lot and you don't need expertise in certain areas. And the reality is, the amount of expertise that some people have is so dramatically higher that you can't even imagine when you're moving in and you're having success.

So I would say like, find experts and listen to them more. I've made that mistake. I have made that mistake over and over again as I reflect that's always something that is kind of a, you know, I had slapped. Like you know these five people who have done exactly what you're trying to do. You could have just asked them what they think and doesn't mean they're gonna work for you for free. But they'll give you advice and then you can hire expertise at key areas that would have pushed things forward so much more successfully. So that's one that comes to mind.

Brock Briggs  1:23:09 

I think there's a lot of resistance from people of that ilk or have that kind of mentality that just because you get feedback from somebody, it's like, oh, I have to implement it. Well, from what I'm asking, but it's, you know, just because you're asking for help from somebody doesn't necessarily mean you have to implement it. You should still gut check it through your own process. And like, does this make sense for my business? And if you have good reason to believe it doesn't, then maybe it's bogus. But if you maybe go and talk to two or three other people and they say all the same thing, then maybe it's the other way

Mike Jones  1:23:45 

You bring up one of the reasons why growing companies is really hard, objectively challenging, is that when you get advice from experts, sometimes they'll give you advice that is not in the best interest of your company. And you have to have your founder's intuition and you have to listen to it. One good example is like in Alchemy, the growth trajectory was going really well. And we were growing a profitable company. But I was doing what I needed to do to learn about what the next steps were and how to get to that next level. So I talked to a lot of people who were like, private equity fund people who are super smart. And a lot of them looked at the market and they basically told me that, you know, because Orange theory fitness was a company that did. I think, a million dollars in sales per unit and they did 50% profit or whatever. You need to do that in order to be successful.

And I internalized that and I started building our units to be able to do that and the outcome ended up being it was too complex, too big of a location. And we started hitting those numbers. But it was not a sustainable business model. We had to adjust. And so that was a very expensive mistake for me where it was like really smart experts in some areas who had were using solid, real time data to make a conclusion and make a recommendation that I listened to and deviated me away from what my instinct told me was a sustainable long term, profitable footprint. So there's an example that gets into the art of growing.

Brock Briggs  1:25:43 

There are so many nuances there and a lot of interesting things. I think you kind of just got to discover for yourself along the way. There are a lot of books about entrepreneurship, but certainly, we're far away from a perfect recipe for it.

Mike Jones

Yeah, there's not one.

Brock Briggs

Mike, this has been a really, really fun and insightful conversation. I appreciate you sharing. Two kind of final closing questions for you. If we were to take away one thing from this conversation and implement it in our lives today from you, what do you think that would be?

Mike Jones  1:26:14 

One would be, just get started. Just get started, whatever it is. If you've done enough thinking, if you've thought it through enough, I mean, I definitely wouldn't recommend the whole, like, you have your wake up at 2am and have a breakthrough thing. And then like, let that change the course of your life entirely. A well thought out thing, if you've thought it through and talk to your advisors and partner and whoever and you're like I really want to do this just get started on. That’s one. The other would be you got to try to have fun. I have a high emphasis on joy, connection and fun that I missed in my, I like fall apart during a couple years of my entrepreneurial journey. And it's not worth it. You'll do better if you stay balanced and prioritize fun and connection and family.

Brock Briggs  1:27:09 

And then the other question would be, what can myself or the listeners do to be useful to you anywhere you want to send them or something that we can do specifically?

Mike Jones  1:27:17 

To be useful to me, would be to follow me on LinkedIn and engage with me. I've recently started writing and I dove all the way in and I've been writing every day and I'm loving it. I plan to continue there forever, I guess, before moving on to other platforms and writing style things.

Brock Briggs  1:27:36 

You've been putting out some good stuff. I'm digging it. And I'll be sure to include the link to

Mike Jones

You got the feedback too

Brock Briggs 

Oh, yeah, absolutely. Yeah. It's so interesting, the nuances of like the different platforms and like what works well in some places and there certainly is credence to people that say just pick one and just stick with it, figure out what works before you go somewhere else.

Mike Jones  1:28:03 

Yeah, I'm kinda. I started with LinkedIn and Twitter and I'm leaning. I've heard that enough now that I'm like, alright, I'm feeling good with LinkedIn. I'm leaning on that and then Twitter's kind of like, I'm just repurposing.

Brock Briggs  1:28:17 

Yeah. Yeah, absolutely. Mike, I really appreciate it. Thank you so much.

Mike Jones  1:28:22 

Yeah, thanks a lot.