Andrew Amann: CEO of NineTwoThree Venture Studio – Ep. 141

7:05 – “The inspiration of building a business that didn’t have a boss – I think that was the original goal, is I wanted to be home. I didn’t want to work in an office. And I also desperately wanted to show the world that I was capable of reinventing something that was new…But for the most part, my inspiration really came from working for myself, being home while my kids are growing up. We’ve been remote since 2016. It was an opportunity for us to really pave our own way.”

8:38 – “The agency path, being an apprentice, I think is an under-sought opportunity that most entrepreneurs don’t go after. And I really honestly think my advice to any 20- to 22-year-old that’s coming out of college is: be an apprentice first for an industry that you want to move into. You have zero downside, right? You can become an entrepreneur like I did and come up with ideas for that company. And if the idea doesn’t work, you still get a W2 check at the end of the day. You’re not dropped off in a corner of the street. You’re not having ramen noodle dinners and pasta dinners while your friends are out at restaurants. There’s a prime opportunity in your life to really learn from an industry.”

11:48 – “We thought, ‘Why can’t we be a really good product shop that repeatedly builds products over and over and over again and becomes exceptionally good at business models, understanding where startups can succeed and where startups can accelerate their growth based on the model that we come up with.’ So not only are we an agency, we’re also coming in there and suggesting, ‘Hey, we’ve built 50 products before. We kind of have an idea how the industry works, and we also kind of have an idea of how this business model can be applied to your industry for some future success.’…And as we build together, we start realizing that this product is successful. But we’re chasing profitability dreams, we’re not chasing growth at all costs. So that’s the model that we’ve fallen into. I call it a bootstrap venture studio, but in reality it’s the mix between a business model and being an agency.”

13:05 – “At the beginning, we’re taking at least $100,000 of cash to build the first product. And usually the products are priced at what it would take to build a product. There’s no discounts or equity discounts there. And once we start that initial engagement, we usually have a fixed price and say, ‘This is what the MVP is going to be released. This is when it’s going to be released.’ And we focus on that deadline because we want them to have trust in us…97% of our projects, I think 98% at this point, have been on time and in budget. And so once we prove that, then we start playing with these retain team models where this specific set of engineers will be working with you for the next year. And we have two or three projects now that have gone on for years because of that fractional CTO, engineering in a box, whatever you want to call it. But we came up with a business model together and now we’re responsible of growing that together.”

15:40 – (Ross) “A lot of people who are solopreneur or freelancers, they have this vague idea – I’m going to build a website for you. I’m going to charge you $2,000. And they think that that’s a lot of money. And they have this vague idea that somebody out there is charging $10,000, $20,000, $30,000, $50,000, $100,000 for a website, but they have no clue how to bridge that gap or how to go from A to B. I know this because I’ve been there. From a certain point of view to say $50,000 for a website that sounds insane to somebody who’s just starting out. That sounds incomprehensible, like the scam of all scams to somebody who’s 20 years old or just getting a foot in the door. But then later, as like you said, as you grow within the market, you start to see the complexity of these problems and you start to solve bigger problems. And then quickly, the way that you look at those numbers changes dramatically, right? And then suddenly you realize you can’t do anything for $2,000 and very, very little can be done and be profitable, of course, and keep the lights on.”

16:57 – “You hear in the marketplace all the time: just raise your prices. Just raise your prices. Because it’s coming from experienced entrepreneurs or experienced agency owners that look back and it’s like, ‘Well, what you’re doing is really cheap. You should get a higher market.’ But the skill set that isn’t taught in that same sentence is you have to be very mature. You have to have a lot of trust and you have to be able to talk to a person that’s running a $10 million company and be in the same room with them and understand their pain points and problems from your experience and tell them that you’re going to solve their problems so they don’t have to think about it anymore. And that’s, sure, I can raise my prices, but I also have to have the experience and the maturity to be in that room with the individual that says, this person belongs here, this agency belongs here. And you also need, like the client work that backs up the experience at that point, because they’re hiring you based on your previous experience, that you can solve it faster than their other options. So there is this part that the hustle is required.”

22:51 – “I think as a young individual, you need to have that ridiculously unachievable goal that you go towards and then eventually you’ll fall into this place where you’re like: ‘you know what? I’m happy,’ but you have to get past the point of being happy so that you can fall back into it. And I realized that in the last two years that, you know what? We’re good where we are. I don’t need to keep pushing the team and my team members like I did in 2016 and 2017, we’re actually doing well. And that took a huge turn. It took coaching, it took therapy, it took a lot of conversations with my wife of trying to figure out how to go backwards from the mindset of like hustle-only into: we actually made it, we don’t need to be that ridiculous now.”

23:55 – (Ross) “I came from a background in entertainment and music, which was very cool. My Instagram looked a lot better. It was a lot of parties. I was deejaying and doing all this stuff. I wasn’t making even a fraction of as much money as I’m making now, but my life sure looked a lot cooler on the outside. And of course I know people from that world who are successful in that, in my previous dream. And if I look at their Instagram, a part of me always suffers a little bit because I say, ‘Oh my God, they’re still out there partying and they’re in Ibiza and they’re traveling, in that world. And then I’m here stuck in my little cube. It’s a very nice cube…And it’s still hard for me sometimes, I must admit, just to be very honest, to let go of the old dream, even though I know the reasons why I’m in this new thing. And like you said, being there for your kids, I remind myself sometimes if I was a touring deejay, if all of that went well and I was a musician, I wouldn’t see my kids. I would be on an airplane all the time. But now, because I’ve worked very hard to build this life where I get to be here, I also get to watch my daughter grow up. I also get to do things with her. So it’s just like I know why I’m here and I know why I made the choices that I made. But it’s still sometimes hard to let go of those other things.”

26:03 – “You sit in an office just like I do, and it becomes lonely and it becomes like I’m not getting out into the world, but I’m doing pretty good. But there’s no social recognition around that. There’s no parents or friends or relatives that are. Nobody’s cheering you on. Nobody’s following you on your accounts. You just have to tell yourself, ‘I made it.’ There’s literally no feedback loop. And that is one of the hardest things about being an entrepreneur.”

38:36 – “You have to be, as a service owner, comfortable with the profits. And when I talk to those agency owners that have done really well, they say, ‘take those profits, put it in an investment account and watch it grow faster than a startup would.’”

41:11 – (Ross) “The better question that people should probably be asking who are younger instead of ‘How can I earn more?’ It’s ‘How can I provide more value to somebody else that would justify that?’ And that is a very, very different – seems simple – but it’s a very different question because if you’re providing more value, then you say, ‘Okay, who do I need? If I can’t do this, who do I need that can do it? Who can I hire? Who can I bring on as a temp worker? Who can I assemble as part of this team to really be worth that extra value?’ And then suddenly you find yourself in a whole different world with a whole different kind of question. And then the money, of course, is much more logical when you’re in that kind of world.”

43:52 – “The biggest things for my life, it’s been, I got a business coach right at the beginning of 2020 and it had nothing to do with COVID. It was more just I needed to be a better person. I needed to figure out who and what I wanted as an individual because I was pushing my team in a path that wasn’t actually proven. I was pushing them down the startup mode. I was trying to get them to build products that didn’t have a path in the future. And so I needed first to balance what my sanity was. And so that is the first advice I’d give any entrepreneur: once you hit the $1 to $2 million range and you have a legitimate team, figure yourself out so that people want to be around you and people want to go to the next level with you.”

44:37 – “Really focus on culture of the team. I was just listening to a podcast from the founder of Priceline. He’s out here in Boston and he had suggested that his order of operations is: team, culture, profits and it’s a really true piece of advice is that if you focus on the right team and you have the right mindset, if people really like working together, the profits will kind of come. But the second, – after you figure yourself out – you really have to figure out like what people want to work for. Why do they want to be in your company? Because it stinks to hire every month. And we are so privileged this year we have 100% retention. We haven’t lost a single individual to leaving for a different job or needing to fire them because we’re downgrading. We have grown as a company and I think culture is a huge part of that.”

47:15 – “I think chasing…the bosses that you want to be an apprentice for, chasing the business coaches that you want to work for, that want to work for you. I think that’s the important aspect of it, because if they come to you, it never really works out. You need to find what you need for your path forward.”

48:13 – “If you’re really struggling with trying to figure out what your next steps are. Really focus on yourself. Read the books that are, not necessarily self-help books, but read the founder books. You know, the Rand Fishkin books, Shoe Dogs, those books that show how an entrepreneur went from step one to step 1000 or whatever step they’re on now. And you’ll realize that they took a lot of swings. They took a lot at bat. The Beatles played in Copenhagen for eight years or something like that repetitively together like 10 hours a night. No one talks about that. They just talk about the Beatles on stage for the 1960s. But you’ll find that any autobiography around a founder that’s building a company comes with years and years of getting up at the plate, missing, and then getting up to the plate again and again and again. And I think that’s the advice that we’ve kind of dug into on this podcast of: you’re not going to find it on the first try, but you’re also not going to find it just because you’re following the people that have, you need to actually take the attempts yourself. And I think that’s an important lesson that I’ve learned the hard way, and I think everyone has learned the hard way that’s kind of made it, but also is trying to give advice as well.”