For all intents and purposes, it all comes down from my playing games, before eSports became a thing. Now business is basically my canvas for that. I have my podcast, I have my ad agency single brain, I have a software company called Click Flow. We do events and all these other things.

However, the only reason I do all these other things is just to prove to everyone that you can do whatever you put your mind to, as long as you keep focusing on leveling up.

Robert Leonard  2:25

A few of the specific things I’d like to cover in the episode today are entrepreneurship, side hustles, and digital marketing. First, let’s talk about entrepreneurship. What made you want to become an entrepreneur and start a business in a space that I would personally consider to be very competitive?

Eric Siu  2:44

Well, there’s no simple answer for this one. The ad agency wasn’t a company that I started. I took over a failing company. My whole bet was if the company would fail, I would basically own nothing. I basically bought the company for $2 out of pocket, right? $1 for 10% of my podcast co-host Neil Patel’s shares, and another guy bought his shares for 10%. The rest were paid through the profits of the company with the contingency of if the company failed, I owe nothing.

Now, I definitely agree that digital marketing in general, I think any type of agency business is very competitive. But I do think that there is room for everyone to kind of start out with agency business, because there is so much opportunity out there. There’s so much business out there.

I have a program called the Agency Accelerator. There’s a lot of people that come through. Before they know it, they’re quitting their jobs. They’re doing well doing consulting, I have one person that came through the program. Now they’re making seven figures a year, and they just have a couple of remote employees. I think, as competitive as it is, there’s a lot of business out there.

The key thing is focusing on your niche, and then being really good at one or two key things, and it’s going to work out for most people.

Overall, when I think about business, I’ve always thought going back to my gaming days, if I could just use the energy I had playing games, if I could just apply it to something else that was related to real life, I would do fine, right? Then that canvas happens to be business.

And so, I don’t think it matters how competitive it is for most. I think for most businesses, most people can figure it out as long as they put the time and effort into it. But the key thing to make that happen is easier said than done is to actually like what you do.

Robert Leonard  4:21

Why did you want to buy a business instead of just starting it from scratch, especially one that’s failing?

Eric Siu  4:27

When you look at the company, what I had at a time it had employees already it had some type of structure already. So it was ahead in terms of the time I would save. This company started in 2009. I took it over in 2014. So there’s five years of experience right there, five years of kind of getting ahead that I normally wouldn’t get.

I had started and there was not a lot of risk and it’s not like I think when you tried to start something out, you’re basically pushing a rock up a hill, at least in this scenario. Sure the company was failing but at least the rock, in terms of structure was ahead. So I thought I had something to work with.

I thought the upside was unlimited for me and the downside was very limited. So it just made a lot more sense to do that.

By the way, I did start an agency before that, but it took some time to get going, it took so long to get going that I actually ended up going to take over as an executive leading marketing for a tech startup.

Robert Leonard  5:21

When you went to acquire Single Grain, what made you want to go about that type of structure? How’d you negotiate that?

Eric Siu  5:29

I was just thinking that the shares were worth nothing to two people. I mean, you’re always looking at what’s important to people, right? I know  two of the partners that didn’t care for the business anymore. The other ones were kind of checked out as well. So I knew I could get a really good deal. I knew they just wanted some cash.

Most people don’t think about when they’re doing a deal. Sure the price is important, but the price is not the most important thing, the most important thing is the terms of the structure and the terms of the deal.

There’s a lot of creative ways to skin a cat. I think those of you that are thinking about doing something, it’s just one element. Maybe let the other person go on price, but you went on all the other terms of the deal. You’re going to get far in life.

Robert Leonard  6:19

Why did you want to acquire a business that was failing? How did you know that you had a way to turn around that company when the people operating it maybe didn’t? How were you confident that you could do something with that business that the current owners or operators weren’t?

 

Eric Siu  6:33

I don’t think you ever really know what you’re doing, but you look at the long term, if the long term is, if I put in the effort here and what’s the upside? Am I going to regret not having done this by age 80? It’s the regret minimization framework that comes from Amazon’s Jeff Bezos.

So I took it over because I just thought I really didn’t have much to lose. I thought if I structured… by the way, the initial structure I came up with, when I took over the company, was a complete failure. I decided to move the company from being an SEO agency to becoming a content marketing agency, because it seemed very logical, because the two are kind of close together when it comes to marketing similar services, right? Just a couple changes.

Now, I ended up making a really bad hire. That was my fault, right? I’m going to take full responsibility for it. I let my people read this book called “Let Your People Go Surfing” and it was from the Patagonia founder. I literally let them go surfing. It’s about not micromanaging people, it’s letting them do their thing. It’s trusting them. So I took that word for word and let them go surfing.

That led to people watching Family Guy and eating chips in the office when I wasn’t there. Nothing wrong with eating chips or watching Family Guy. Basically in the first year I had no clue what I was doing, right? I thought I knew better than other people did not. We dropped all the way down to one employee.

My outside accounting firm called me and said, “Hey, it might be time to shut this thing down.” So yes, to answer your question, I didn’t know what I was doing. It was a complete failure but I stuck with it. It’s a similar story kind of across the board for me.

If you look at single grain, I am stuck with it. It took three years to maybe two and a half, three years to start to ramp up. But when you look at anything else in business, and Neil and I, we talk about this on the marking school podcast, when you start anything, it typically takes two, three, maybe even four years to really start to get something going.

So the same thing with my podcast. First one took about three years to really get going. The first year, nine downloads a day, then the second year 30 downloads a day. Then you ramp up to where we are today. I mean, cumulatively right now, I think we’re reaching like 1.3 million people a month in terms of downloads. So you do the math there, right?

It takes time to build the initial foundation. I think that’s something I want to stress everyone, like if you’re going to start something, don’t expect immediate results, because usually it’s easy come, easy go. You wait it out for three to four years, and then you tough it out, you’re going to learn a lot and no doubt you’re going to be hopefully learning from those lessons and building something for the long term.

Robert Leonard  8:51

How can someone who’s a millennial listening to the show, whether it be about a side hustle or as a business? How can they overcome that psychological battle that they’re going to have instant gratification and because when you talk about having to wait for things to evolve, and actually flourish?

I think a lot of people have trouble with that. If they don’t see results within the first three months, six months, even a year is considered long for a lot of people these days, because of all the ways that we can get new information instantly, all the ways we can get things delivered to our door instantly, just all the ways that we can get things at the snap of our fingers. Everybody wants things quick. So how can people overcome that idea and really understand that what they’re building is going to take time?

Eric Siu  9:30

It comes with personal growth, motivation and learning on your own right, like the way I look at it. Life is a series of building the right power ups and power ups to me, it’s just basically habits right? Sure people talk about podcasts all the time, what’s your daily routine? I meditate and I do all this stuff. I work out whatever. But those are all habits that you build, you keep sticking with the habits and then things compound over time.

You study compound interest. You study successful people, you read their biographies, and you just realize that people say Rome wasn’t built in a day, it just takes a long time. If you’re unwilling to accept that reality, then that’s fine. Just go be with most people. This is why most people are most people. This is why there’s a word average, because they’re not willing to do the things that successful people are willing to do.

Successful people build the right power ups, they build the right habits, and then it compounds and they’re constantly learning. They’re trying to get more, partly because they might have a chip on their shoulder, partly because they’re hungry, and partly because they might have their own motivations. But that’s what it is.

Robert Leonard  10:25

Was there a moment in your life for you where it just hit you? And you knew that you were meant to be an entrepreneur? Or has it just kind of evolved organically over time?

 

Eric Siu  10:34

I think the reason why I wrote the book too was because I think of it like, when you’re playing games, you’re constantly leveling up. You constantly level up in life and I’ve always wanted to just play a game the rest of my life. I’ve honestly, when I feel like I’m waking up every day, even during these times, or time of this recording, we’re dealing with COVID-19, I’m definitely worried or totally scared.

But I was on call with 50 other entrepreneurs today. all of them are literally you can see fear in their eyes. Right. But for me, I was just thinking about it. I feel more motivated in anything right now.

And so, I think, going back to your question, I’m not sure I’m answering your question directly. But hopefully, it helps a little bit. I’m actually staring at us. I’m in downtown LA right now and I’m staring at the place where I got my first full time job. I could see the tower from here. I realized because I would come into work, and then I was doing data entry, I was getting paid like $32,000 a year coming out of which is not good. No matter where you are from in the world. I mean, I just couldn’t survive off of that, right?

So I would come in and hide in the back where I would play poker, and I realized by playing online poker, I would even do work. Then I would just get my work done fairly quickly in like an hour or two. The rest of the time, I’m just messing around. I realized that I had to do something else. I had to find something fulfilling.

At the moment, I’m going to study something that’s interesting, and then just kind of go from there. What I realized was that I found a marketing internship, and I started learning marketing. Then I was like, what’s next? I started learning SEO and paid advertising.

Then after you learn how to manage people, you’re learning affiliate marketing, learn all these things. So you’re also powering up in business too no matter what you’re doing.

So for me, I was going down the marketing path. And then you get to a point where it’s like, okay, you learn how to negotiate a deal. So it’s a series of leveling up to get to where I was at, but it’s constantly being curious.

Eventually, you just keep growing. Then you get old, and then you realize you played a pretty good game and now it’s time for me to go. That’s it.

Robert Leonard  12:36

We briefly talked about this earlier but I want to talk about how you’ve been able to differentiate yourself in a competitive market? Is it really just that there’s an abundance out there? Also, if you keep doing what you guys are doing, you’ll get enough clients to grow the business or are you really doing specific things to differentiate yourselves?

Eric Siu  12:55

Especially in the services business, I think for even software products as well, you have to think about the problem is a lot of services businesses, they try to be everything to everyone. They want to work with all the brands and to do all the things they want to have a big staff. A lot of it’s very ego driven.

And so, what you should do, I’m talking about myself, when I think about Single Grain, we are very focused on working with just a handful of categories, right? So Software as a Service is a category for us, online education, e-commerce. But we don’t really try to go beyond that.

We focus on one or two core services like paid media and SEO. We don’t try to be everything to everyone. That’s what we’re good for.

When you’re able to do that, when you get on calls with people sales calls, they ask, “Hey, how many software companies that you work with,” because that’s one of the specific focuses for us, they like hearing that a lot more, because of the experience that you’ve built around that you’re able to do better work, because you have industry knowledge, and your attention is not split.

So especially if you’re in services, you have to figure out how you can really kind of narrow down what your specialty is, because think about specialty doctors, specialty surgeons, they get paid a lot more money than kind of general practice, doctor. So think about how you can really narrow down and then people are going to pay you a higher dollar, because you happen to specialize in the area that they need help in.

Robert Leonard  14:09

You’ve talked about how digital marketing agencies are falling behind the curve, because the business model is broken. Why is the model broken and what has changed?

Eric Siu  14:19

Most agencies, I’m going to talk about digital marketing agencies here. So they’ll charge you, they’ll say, “Okay, you know what you need, you need paid media services or SEO services. So we will charge you $5,000 a month or something like that.” I’m just making numbers up right now to $5,000 a month. You’re going to be on a contract for 12 months. Now, think about it, if I’m doing work for you, Robert.

So let’s say I’m running ads for you. Do you think I’m going to be incentivized to bring all the value I can bring in the first month if we’re in a 12 month agreement or even let’s say on a month to month agreement? I’m working with you. I’m not going to be incentivized to bring you the best possible work I can bring. I want to spread out all my ideas over 12 months, because I want to continually show you that I’m bringing value and I want to show you that it’s worth it to continue paying me five grand a month.

Now, that sucks, because the incentives are not aligned. My incentive is to drag it out as long as I can. Then your incentive is, as soon as you start to see the campaign before you fire me.

I know both sides. I have a bunch of friends and we often joke about how agencies, it’s good to kind of just hire them for a little bit and sack them once they have the account set up. So you got to think about how Charlie Munger talks about incentives all the time.

Now, if you wanted to incentivize the partnership the right way, what you would say is this, “Hey, Robert, so instead of charging you anything, how about this, you pay me for every sale that I drive you, let’s say you pay me $50 or whatever. After I drive you 100 sales, maybe you pay me five grand after that.”

The incentives are aligned there, because I’m going to do everything in my power, because I’m spending the money on fronting the cash, and you’re paying only on performance. So you pay when I perform. Then at the same time, I’m going to bring you all the great ideas. If the thing is really working, I’m going to scale the crap out of it. So you’re not only paying me more money, you’re also getting more sales. So you like that, I like that. It’s a better relationship. It’s also riskier. This is why most people don’t do it.

However, if you think about how you can structure, if you can structure the deal correctly, or structure it where it’s not as dangerous to you, where maybe you have them pay, like the first five grand of ad spend or whatever, then it might be a lot less risky. In addition it’s going to be a better partnership, because you’re willing to take the risk, because it’s a little more balanced.

Robert Leonard  16:31

Do you think over time, we’re going to see the industry or the business model go almost solely that way?

Eric Siu  16:37

I don’t know about that. I think a lot of people… it’s interesting. Whenever I talk to entrepreneurs, I remember one time I was talking to a potential there, like a coat executive coaching company. So I wanted to hire them to help my team and the guy was like, “Honestly, when you first said agency, I was so turned off because agencies just don’t bring value.” People have this perception, most people do.

You can see the win that is bigger than the wind knocked out of them when you say like, you run an agency now versus I’ve tested this before, when I say I run a software company, there’s a lot more respect there, right?

I don’t think most people are going to do it, because they don’t want to be held accountable. That’s the thing. Most people would like a lot of these big holding companies, the game that they’re playing now is they’re just getting bigger and bigger. Then they go by smaller agencies, and they get bigger. Then another big agency comes in and it gobbles them up.

Then there’s just like, a couple of holding companies like WPP, I think that model will be destroyed soon. But to answer your question directly, I do not think a lot of people are willing to be held accountable and be willing to grow, which is what this type of model requires.

Robert Leonard  17:35

Some of the different things that you do as part of your business, such as your YouTube channel, your blog, or podcast, even our popular side hustles that a lot of people are considering right now. If someone was going to start a brand new side hustle today, which of those three would you recommend they start with, or maybe it’s too late to start a YouTube channel blog or even podcasts and now it’s something else?

Eric Siu  17:56

I think today specifically, there’s two things. One, it would be a podcast, because it’s there’s only 700,000 podcasts in the world. As of this recording, maybe 100,000 or so now, you have over a billion websites in the world. So it’s a lot more competitive.

Now, podcast, you can charge a good amount, you can do a subscription, you can charge for advertising. You can do events, like that’s basically what I do with Neil.

I think the other thing you could do is build an email subscription type of business, meaning if you look at the hustle of the CEO, they have an eight figure business and they just write newsletters. Email is good. Copywriting is still very important. So I think I would approach it that way. Try to drive subscriptions through email, or try to build a podcast audience.

Robert Leonard  18:36

When it comes to having a personal brand, how important is that in today’s world?

Eric Siu  18:41

I think it’s important to an extent. If you’re too tied to the company, you’re not going to have any enterprise value when you’re trying to sell it right for the most part.

There are brands out there like Tom Ford and others like names, right? But I would say for the majority of people, kind of build a brand for the company. I think that’s powerful, right? That has enterprise value in it.

It’s certainly helpful to have a personal brand, like when I look at things that I do, or the things that you know, other brands like Kylie Jenner’s of the world,  by the way, when I say brand for me, it’s like a micro brand in the marketing world. Kylie Jenner is just known by everyone.

It’s definitely helpful. People will listen to the podcast or watch videos or watch me speak or something and that definitely shortens sales cycles. It builds credibility and it drives leads for sure. It certainly is a benefit because when I want people when I want to take calls with people in the marketing industry related to my software, like I’m able to get calls just like that.

So I do think of a brand, maybe not just a personal brand, but maybe a brand for your company. It is a very defensible moat because nowadays, I think a lot of people are just, it’s easier to build products now, because a lot of people can just copy each other right?

I think what’s difficult to copy is building an audience. That’s basically what you’re doing. So whether it’s an audience, for your company or for yourself, that’s very defensible because nobody can ever just copy that because you’re being you and I think that’s worth its weight in gold.

Robert Leonard  20:01

Is it important for people who have no desire to become an entrepreneur, or even have their own side hustle for them to build a personal brand, if they’re continuing their career as an employee?

Eric Siu  20:12

I don’t think they need to build a personal brand. I think a side hustle is important. I think that’s the more important thing. I was talking to another entrepreneur a couple months ago, and he was just like, “Man, you know, it sucks being an employee, because at any moment, you could be laid off, you could be fired, and there’s nothing you can do about it, you have no control.”

So you want to have some type of control. Even if you’re working somewhere, let’s say you’re making $60,000 a year and your side hustle generates extra $20,000 for the year, that’s at least something you could fall back on.

So when you get fired, you can go all in on that thing, and just really watch it grow. I think in your life, you want to be able to hedge. I think just today like being on that call with 50 other entrepreneurs, most of them put all their eggs in one basket, people talk about how you should focus on business.

However, I think once you get one business working, try to build some side hustles around the business as well. Then you can kind of protect yourself, right? Because a lot of them, it’s like they’re lost 80% of their business or are getting no business right now, this is the same thing as being an employee. If you bet everything on one job, no matter how hard you work, it could all go away in one day.

Robert Leonard  21:11

A lot of people are getting laid off as employees and a lot of businesses are being forced to close. So if you only have one business or one job, you’re kind of in trouble. I’ve heard Gary Vee talk a lot about LinkedIn and TikTok these days. Are these the best platforms for someone to build a brand or are all the other platforms dead?

Eric Siu  21:29

No, the other platforms aren’t dead. I would say for TikTok and LinkedIn, I think it just depends on the audience that you’re going after. If you’re going for a younger crowd, Snap makes sense and TikTok makes sense. I think if you’re going more b2b, LinkedIn definitely makes sense, organic reach.

LinkedIn has a lot of *inaudible* trade going on right now too. Meaning, people write about, “Hey, I failed here. This is why I’m successful.” Then it’s a lot of flexing with not a lot of value. But if you do well with LinkedIn, like for us, we post carousels, we post our videos on there and they do well, they get reach and they actually get us leads.

So yes, potentially, I think if you’re a b2b more serious audience, you go LinkedIn, if you’re looking to sell consumer products, and it’s to a younger audience, you go TikTok and Snap because especially reach on TikTok right now is still strong, but who knows how much longer that’s going to stick for.

Robert Leonard  22:16

I’m personally relatively new to social media. Before I started this podcast a little over six months ago, I didn’t have any social media. I’m all over them now. But one of the hardest things for me is that it takes a long time to create good content. Without a big following on social media, the posts don’t get a ton of engagement. So it almost seems like a waste of time.

How can people listening to the show today dealing with a similar situation, overcome this? Should we continue to power on and just continue to post great content as consistently as possible?

Eric Siu  22:45

So I think, in the very beginning, if I’m starting out, because I’m trying to think about like, you know, millennials are starting on by the way, I’m still a millennial. But when I think about starting out, it was in hindsight, I started the Growth Everywhere podcast now called Leveling Ip. At the same time, I was trying to save Single Grain, and I should have put all my focus completely into getting revenue for Single Grain. That is the number one thing like in the very early days, you take every single client, you can get you take every customer, you just make sure you can get revenue. Once you start to get that machine going, then you very quickly figure out how you can diversify and how you can make sure you defend yourself .

Whether it’s starting to build a brand as soon as you can, as it’s feasible, and starting to think about once you have some area saturated, let’s say you’re offering I don’t know influencer marketing, maybe move to the next step, maybe offer paid marketing. And so, you figure out how you can diversify.

If one kind of revenue stream fades away, you still have a backup, right? So at least you have one type of backup. I don’t like just betting everything on one thing again, because like I said today was a very cautionary tale.

Again, you have 50 people in the room, and like 95% of them are completely worried to look devastated on their faces, but the ones that have adapted and the ones that have kind of been a little more dynamic. Those are the ones that will survive for the long term.

Robert Leonard  23:58

So tying all of this talk about branding and social media back to stock investing, because a lot of the people listening to the show are avid stock investors, do you think there is an edge to be gained by stock investors investing in companies that are excelling with their social media presence and growing their brand, using today’s online platforms?

Eric Siu  24:17

Not really, here’s how I looked at it. When it comes to stock investing especially we’re talking about COVID-19 Right now, it’s a great opportunity right now to buy. The way I look at stock investing is if you look at Amazon, the way they do their marketing, it’s not like their marketing is really good. Jeff Bezos doesn’t go around posting to social media all the time. Elon Musk posts to Twitter, right? So he’s a nice brand for Tesla, but Tesla itself is a strong brand.

The reason I’m bringing up Amazon right now is because I look at Amazon, I look at Tesla, I look at Nvidia. I even look at Alphabet, Shopify, these types of companies, they don’t really have strong personal brands at the top. But what they do have is they have a strong long term outlook and they have strong fundamentals.

The way I Look at stock investing is just you pick a couple, rule one of investing, you don’t try to invest in a bunch of different things, you invest in what you understand, prior to buy something that you would have mind dropping down during a downturn, you just happen to buy it at a good price.

Right now, I talked about deal terms earlier. It’s one of the key things when you do a deal is you make money on the buy. So now’s a good time to do it, but you should just invest for the long term.

Forget about the brands, you just think about, forget about what they’re doing on the social media side, but what I would say is not to forget about the brand. Think about what their brand actually means because a brand is a story. A brand is what you feel about them, right?

So if you feel good about the company, you understand the fundamentals, you understand the business, forget about what they’re posting to social media, to me that’s almost irrelevant. Focus on, “Hey, I think they’re going to be around for the long term. I like what they’re doing, I think they have a good CEO.”

Robert Leonard  25:46

Do you think a good digital strategy or just a good social media strategy for a smaller company that’s public? Away from your large cap companies, but maybe go into a small cap company, who’s really doing well with digital marketing and just online branding? Do you think that’s a good way for them to be able to differentiate themselves and that could be a good indicator as an investment? Or is that not a good way to think about it?

Eric Siu  26:09

I wouldn’t really tie it like stock market investing to how well they’re doing from just like  on the social side. Here’s the thing, right? If you look at Casper, I think they do good marketing, but terrible fundamentals are in the business. Who knows what’s going to happen? I definitely would not invest.

By the way, this is my disclaimer, I’m not like a certified financial advisor or whatever. So the other thing I would say, too, is look at Blue Apron. I don’t know how well they’re doing well on social media right now. They’ve just gone from like $2 to $16 or $17, over the last couple of weeks.

A lot of this stuff is I don’t think I can recall one company that’s done really well with their social media then they’ve done well because of their social media, right.

Another thing I’m looking at is Zoom. I don’t think they do particularly well there either. So I think if you’re talking about paid media, like social advertising, maybe, but just kind of branding, not really. Nothing that comes to mind for me.

Robert Leonard  27:03

Yeah, I think you made a lot of really good points. The reason I asked that is because everybody’s always looking for an edge, or the next big company, right? I mean, we know Google, Facebook, Amazon, we know all those companies these days. So people are looking for the next Amazon, the next Google, and the next Facebook.

And so, I’ve always been curious as to from someone who knows the digital marketing space as well as you do, if there might be an opportunity to identify a good investment by looking at something that not a lot of people are looking at such as a company’s brand, their digital media, overall strategy, social media brand, and things of that nature. But it doesn’t sound like you think there’s a hidden opportunity there?

Eric Siu  27:38

It’s the fundamentals. You probably have experts that are far better suited to talk about this. But I mean, here’s what I’ll say:

The thing that’s helped me pick out who I want to stick with long term is Twitter. By the way, this COVID-19, where I’ve got the bulk of my information, has been from Twitter. So I think it’s important that the feedback I can give is or a tip I can give is, you have to think about your information diet.

So the people I primarily follow on Twitter are entrepreneurs and venture capitalists. There’s a lot of data in there, they talk about the companies, they talk about the information they’re consuming, and I consume that as well. I get a lot of benefit from that because I get more insight into the companies that are really good that I already like.

Then what I’ll do is I’ll just look at the fundamentals. I’ll study the annual reports, and then just kind of work off of that. But again, what I can say is going back to Casper, as an example, you can see from social advertising or marketing, that’s a case study that you do not want to follow, right? You want to have strong business fundamentals. That’s what they don’t have, because literally what they’re doing is they’re spending all this money to acquire a customer and when they acquire a customer, they’re basically lighting $400 on fire, right?

So sure, they have a good brand. They have good marketing. By the way, if you look at all these direct to consumer companies, a lot of them are going up in flames right now, because they raised too much money. They got on the hamster wheel of marketing, which is the paid advertising hamster wheel.

Some of them built pretty good brands, right? Even from there, it still wasn’t able to kind of hold for them like they got marketing. But marketing on its own is not enough. You have to have strong retention. If you have a product like this, like a subscription business, I have to have strong business fundamentals. Again, I think going back to your last question, definitely not.

Robert Leonard  29:18

Yeah. With the rise of some of the companies you mentioned, Casper, Uber, Lyft, Airbnb, even Peloton more recently, they’ve all had, I’d say pretty good branding, but they haven’t necessarily led to great investment opportunities. I think you’re definitely right. I’ve always thought about if there was a good way to identify early companies using that.

Eric Siu  29:39

I think Peloton is great, by the way. I have one sitting behind me and then I’m an investor in the company. I think, by the way, like if we think about Peloton, sure they have good branding. They do well on social media but at the end of the day, what you’re looking for is looking at underlying numbers. They have 2 million subscribers paying $39 a month. They’re probably not going to turn because it’s very cheap. It’s almost the cost of a SoulCycle class for a monthly subscription. If you want to get a loan for the bike, you pay no interest on it through a firm.

And so, it seems to make sense. They’re building cheaper versions, too, right? Because especially in our time period right now, where a lot of people are staying home, it makes sense. It’s a great product. So we talked about strong business fundamentals, we also talked about great products, we talked about strong retention, they got that part locked down. So I think they’re going to do well, but you know, time will tell.

Robert Leonard  30:25

But to go back to your point, you’re not investing in them just because they have a good campaign or good branding, even though they do know. So to wrap up the show, what’s an opinion you have or a piece of advice that you give entrepreneurs or side hustlers that not everyone agrees with, but you think it’s sound advice?

Eric Siu  30:42

I think the new way of doing marketing right now is building products and giving at least a freemium version, which is just you have a free version that’s crippled that has a lot of standard features. You just let people upgrade right now the big companies are doing this well, but I think the vast majority of people are probably too scared, they don’t think they can do it. They think it’s too costly, it’s going to take too long.

However, the sooner you can get something going that’s pretty good, give it away as a widget. If it’s actually good, it’s going to grow in terms of word of mouth, SEO perspective, people are going to link to it. And so, you get a lot more usage. Once you get them into your app, then you can try to upsell them.

Robert Leonard  31:15

For those listening today that want to learn more about you or just different digital marketing strategies, where can they go to connect with you?

Eric Siu  31:22

So they can listen to the podcast “Leveling Up”. You can always DM me on Instagram. It’s at @EricOSiu

Robert Leonard  31:35

I’ll be sure to put a link to those things in the show notes so that everybody listening can go check it out. I’ll also put a link to all of Eric’s other resources, so you can go check those out as well. Eric, thanks so much for coming on the show. Thank you.

Alright, guys, that’s all I had for this week’s episode of millennial investing. I’ll see you again next week.

Outro  31:54

Thank you for listening to TIP. To access our show notes, courses, or forums, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decisions, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permissions must be granted before syndication or rebroadcasting.