Natalie Franke
Did you know that 85% of small businesses agree that word of mouth recommendations brought them the most customers 85% And yet often when we talk about marketing our independent businesses, you hear conversations about social media first and foremost, but very rarely about the power of community led growth. Today, I am sitting down to talk with Matt Gartland. He is an entrepreneur with 10 plus years of experience and four exits under his belt. He specializes in online companies that operate in some combination of the media, education, tech and ecommerce markets. Today, Matt serves as the CEO of SPI media, that Smart Passive Income, which is a pioneering brand in the crater economy. He’s also an advisor and investor in early stage tech startups, and related venture capital funds. Matt is absolutely brilliant. And in this episode, we talk about the future of growing your independent business, taking into account the current landscape and headwinds that all of us are experiencing this conversation. It left me feeling fired up. And we’re having to reevaluate some of my own notions on the subject of community led growth. But nonetheless, it’s filled with hot takes with spicy opinions and with knowledge that’s going to help to propel you forward. Let’s get into the episode. Hey, everyone, this is your host, Natalie Frank, and you’re listening to the independent business podcasts, more people than ever are working for themselves and building profitable businesses in the process. So on this show, I sit down with some of the most influential authors, entrepreneurs and creators to break down the science of self made success so that you can achieve victory.
Natalie Franke
Hey, Matt, thank you so much for joining me.
Matt Gartland
I’m thrilled to be here. Thanks for having me, Natalie.
Natalie Franke
I want to jump right in no softball style, we are going right for you hitting a home run out the gate because I love and appreciate and honor your thought leadership in the space of online business ownership. And I’m eager to know from you to kick us off. What is again, I feel like I’m asking the biggest of questions, but why not? Matt? What is the future of small business online? What does this look like? Well, I feel like we’re entering into a brand new season, a big season, a lot of possibilities, a lot of changes. What are you seeing and what are you anticipating,
Matt Gartland
I see a return to small business being small, because so much of learning so much of connection has been big has been mass market has been how big can we get on social media? How big? Can we sell our dry online courses? Like how many units can we move? Right? And that has really, I think driven a lot of the innovation that I have seen in different corners of the internet over the last 10 plus years, you know, from E commerce through to what we now call the crater economy to freelancers and small agencies, right, it’s always been more and bigger and louder. But because of I think galvanizing moments, certainly like the pandemic through different incentivization, and even technological advancement, and we’ll know dig into community probably on a lot of levels here soon, I see small sort of returning, you know, smaller groups, cohorts, you know, Cohort Based Learning to where it like outcomes, and action is prioritized more than just consumption, right? So and to be able to really do that we have to be more intimate in how we are designing our products and services in smaller ways. So I’d say that’s kind of the through line of what I’m seeing, and not just in terms of what I believe, but see and see in terms of the results that are being realized for my companies, certainly, but then also my friends and others that are doing the same thing. You mentioned
Natalie Franke
the pandemic as something that is precipitating some of the shift, i see i By the way, I aligned 100%. And I see sort of a pendulum swinging now back towards right, small experiences mattering more than ever before, away from kind of mass and scale. What do you think, are some of the other things that are influencing this? Is it AI? Is it you know, social media and frustrations with the algorithm? And like, what other kind of contributing factors do you think are moving small business back to being small and focusing kind of on that on that intimate relationship?
Matt Gartland
You’ve hit on a couple and they’re certainly more it’s a multivariate probably answer. You’re not to be you know, too sophisticated about it. I think in person, you know, connection is returning certainly a very common point of analysis, right kind of post pandemic, but when we think about, again, trying to build, you know, some version, you know, of a community if we want to use that word, capital C or even lowercase c right. If we are, you know, in a endeavor to you transform someone in some way right through again, the the exchange of have value through products and services, right? I think getting back in touch in person in some way, shape or form, it doesn’t have to be a major conference where you’re selling 1000 tickets or anything like that. But are you connecting with your local community in terms of entrepreneurial meetups? You know, are you? Are you returning to those events? Again, in those forums, where you maybe had to start? I know, I know, I did. You know, a lot of us, you know, back in the day, we’re just hanging out at coffee shops, kind of talking about our startup ideas right. Now, are you? Are you returning to that? Are you kind of re galvanizing some of your creative energies? And is that leading to new breakthroughs, new ideas, right, and kind of getting through maybe a point of stagnation and really thinking about what is your differentiation in this moment? You know, kind of returning to your roots of your core proposition? So that’s one thing is the in person connection opportunities? Are we going to industry events, you know, stuff like that. Also, you mentioned AI, certainly, that has taken off in the last, you know, 18 ish months. And I think that’s, it’s interesting for those of us that are kind of the the galvanizing force for, again, our brand, or content or services, whatever it is, you know, as entrepreneurs, and especially if we truly are independent, we don’t have a business partner, we don’t have funding or backers or anything like that, then, you know, this is maybe a whole other vein of conversation we can dig into, but what, how are you developing your range as an entrepreneur, and I use the term deliberately because I just love and rave constantly about David Epstein’s book called range, and how, you know, generalists are going to, you know, continually overperformed specialists, and we need to develop, you know, specialization and expertise. Don’t get me wrong, but I think as a small business owner, you know, especially in this world now, with AI and other things are getting increasingly democratized and automated, and you’re never going to, at some point, be able to compete with how fast you know, chat. GBD can output something for you, right? Is, okay, if you’re independent, how are you developing your complementary skills? How are you developing some unfair advantages that isn’t just like, oh, cool, you know, I have an idea, or Oh, cool, I’m a so called visionary. That’s great. That’s nice. That’s cute. And that’s important. Like it starts there. But it can’t end there. Like you have to get good at business, finance, you have to get good at copywriting. You have to be good about product development and innovation and actually taking the initiative to listen to your customers and ask them good questions. And, like, there’s just so many things. Right. So, so yeah, so I get a multivariate answer. And I’m throwing a lot of back back at you. Sorry, Natalie. But um, yeah, I think that’s why in part, like, we need to get kind of small again, right, and be able to talk to the right people, you know, have circles of trust, you are the average of the five people you surround yourself with the most sort of mentality. Right?
Natalie Franke
Right. And leaning into that with community, you know, one of the challenges that I’ve come up against in the sort of like entrepreneurial Zeitgeist and general ethos is that, you know, communities a nice to have not a must have, or that it’s sort of this fluffy, you know, difficult to measure the ROI of portion of our lives in our businesses. But what I’m hearing from you and what I also believe, and maybe it’s my own bias is that it’s not a nice to have community is fundamental to your success, not only as a professional as an independent, but also as a human being. And you alluded to a couple of, you know, the benefits of having that trusted circle of investing in those relationships. But I’d love to know from you, you know, what do you see as the benefit of leaning into community, whether that is a community of your peers, whether that is the community that you cultivate through your business with your clients, or your customers? What are some of those benefits? What are some of the successes that you see arise from making that investment intentionally?
Matt Gartland
Number one is the feedback loop, right, and being able to have more feedback loops faster. We operate as entrepreneurs with so much in insecurity, sure, but but lack of information, imperfect information, unknowns, yet? Maybe another great book, if I can plug one is Annie Dukes, thinking bets. She is a psychologist that is also a champion poker player. Brilliant read read the book, but it’s like how can we operate our businesses with finite resources? Again, we’re small, right? We don’t have venture capital, I’m guessing. Right? I know, I don’t I have friends that do, but I don’t. So we have limited very limited resources, time, energy dollars, we’re probably bootstrapping and operating off of free cash flow to try to invest back into ourselves and our companies, right. So we have to be make bets. Well, if you’re making just one really big bet that is a massive gamble, right? So surrounding yourself with community, again, depending on how you want to define that gives you an opportunity to make more bets, smaller bets, faster bets, and learn and learn through that process around you know what it is you’re doing. Have you found market fit. Is this working? Is this a scalable thing? Is there a derivative thing that could scale you know beyond that? So yeah, feedback loops is number one. Number two, I’d say is humility, or just groundedness. Right as an entrepreneur, especially again, for those of us that are operating in online spheres, right, so So you’re, you’re, you’re not the sharpest tool in the box, at any given moment. There’s always someone smarter, more experienced. So if you, if you’re gonna be intentional, again, with these networks, public or private, you know, that you’re building for yourself in investing into and try and show up with as much humility as you can, you’re going to benefit from that in ways that you can’t even predict, you just got to put yourself in those experiences.
Natalie Franke
I couldn’t agree more. I love I love both points that you made there. I’ll start with humility. I think there’s so much power and just recognizing, you know, wow, I have a lot to learn. And there are people yes, that are further along in their career that have different superpowers than I do. But also, then when you have the ability to make them your friends, and surround yourself with people, I always say like I make an up habit of surrounding myself with people that are smarter than me better than me, you know, in different seasons than me with different lived experiences, different perspectives, because when we build communities that are rich in that level of diversity in all capacities, we’re all better for it. So instead of seeing those folks is your, your competition or threat, right? If you can actually say, No, I’m not the sharpest tool in the shed, there’s a multitude of different folks in here with different talents that are, you know, just killing it. But I’m not threatened by them, I’m empowered by them, I’m inspired by them, like, I’m going to be surrounded by those people and make a habit of showing up to support them. When you do that. It’s transformational. Have you seen that I feel like this is something that, you know, you’ve built just from knowing you and the relationships of how even we’ve been connected. But I’d love you know, for anyone listening to this, who maybe is in that place of just feeling that view but in a defeated way, you know, it’s kind of feeling like, Oh, you’re right, like, I’m not where I want to be, and other people are smarter further ahead. Could you just share a little bit of encouragement from the circles that you’ve cultivated and the relationships that you’ve built? You know, in regards to? How do we how do we forge those relationships? Is it worth it? You know, I want to just hear your take on it.
Matt Gartland
Yeah. No, that’s a great question. And it’s so true to the entrepreneurial journey is a roller coaster of ups and downs. I don’t think that that ever stops. One stock for me is is my bed. So I’ve had startups that have gone? Well, I’ve had startups that have not gone well, right? I don’t like to term serial entrepreneur, at least for myself, it just kind of feels like a suit that doesn’t fit all that great. But yeah, so it’s sort of a, you know, just keep swimming, you know, sort of Dory search sort of phrase, right? Because, you know, whether it’s it’s the wins the losses, the extreme highs, or I’ve had a navigated some extreme lows. And I’m not saying that this is easy, but like if you can get some distance from it, and kind of look back at it, and honestly, just be grateful for for all sides of those things. I think that that adds to the the composition and the character, you know that in, I guess, in my strong opinion, that’s almost required to be an entrepreneur, because it’s it’s not a game. That is an easy game where success is guaranteed. Yeah, Natalie, you know, is maybe better than anybody just how fraught that game is. And you talk about how, from, from the industry data, at least here in the US, you know, being US based small businesses, you know, that most don’t make it, you know, 50% are gone after five years. And I want to say it’s about 20, or 30% are gone after even the first year, first year, right? And it’s like, Can we can we have an honest conversation about that, like, look, this is hard. So you have to keep leaning in. And again, making small bets and being very cognizant about your, your resource allocations and being sensitive to that, and kind of take the hits as they come. It’s not going to be you know, this not Disneyland. Like there’s animatronics behind the things you’re looking at. And it’s fun, and it’s exciting, you’re gonna meet great people. But guess what, you know, it’s not just all pixie dust, you gotta lean into it. And it’s hard. And, and that’s, that’s what you’re signing up for. And I think that anyone listening hopefully knows that. And if this is a breath of fresh air at any level, it’s like, look, we’re all in this together, I take punches, I have taken punches, I’m guessing you have to. And you know what, you’re gonna get better and shorter for
Natalie Franke
talk about some encouragement. Okay, feedback loops, you brought up feedback loops, and all the light bulbs started going off in my mind, and I really hope for folks listening to this, the light bulbs are going off to when we talk about community, you know, like I mentioned, a lot of people think it’s the fluffy, it’s the Kumbaya, but I also really have always advocated that people also see the ROI. And, you know, numbers are never going to fully capture the power of investing in community in the multiple layers of it. However, you know, they do indicate that there is more benefit to community than just feeling good about ourselves and making positive impact in the ways of helping others to keep fighting keep going feeling better about themselves, there is business impact. And when we lean into the feedback loops portion of the conversation and you mentioned you know, like do you have product market fit? Do you need to change the way you’re operating your business? What can you learn by being in conversation with and in this case, I’m I’m in my head going you know, with your clients with your customer’s actually focusing more on serving them than on competing right with with who else is in the market like focusing on what they need their problems solving for them. Let’s double click in, talk to me a little bit about, you know, the power. This is where we kind of lean into, like community led growth, but even the power of, you know, investing in community as it relates to those feedback loops, or as it relates to, you know, planning what you offer in your business, even from a foundational level.
Matt Gartland
Yeah, I would start by saying having a direct relationship with your customer and finding different community methods and mechanisms to enrich and intensify even, you know, that relationship, not that community has to be the product and that, you know, your community members must be, again, your direct revenue source, they are for me these days with with SPI happy to kind of diagnose that and come back around to that point, perhaps, you know, there’s different manifestations of community. But, you know, at the start of the question there, Natalie, you talked about, at least I think, how some folks kind of just slap on community, maybe, you know, at least historically speaking, sometimes it’s like, hey, marketing team, can you do communities like, well, community done? Well, it’s not a marketing function. Sometimes communities use as customer acquisition, you know, it’s free, it’s kind of a part of a freemium play tech companies that have done this to varying degrees of success and authenticity. You know, sometimes without also, it’s like, Okay, how are we doing that? Right? Is it just a, an kind of an unruly on moderated forum of some kind? Because, okay, someone might call that community, I don’t candidly with maybe some spicy opinion, mixed in. Now. That’s not it. Right, you know, for for us and what I have seen and learned through especially the online education space, and where online learning, especially for entrepreneurship and small businesses going, you know, we need to have more private communities, you know, so not social media, right? To just like, Oh, cool. Let’s talk about all the fun stuff and the sexy stuff like Nah, let’s talk about, hey, I can make payroll, right? If I have payroll, or my cash flow is tight, hey, there’s more competition. How do I differentiate myself? Because, you know, bingo, that’s real strategy. Strategy is not just being better at something, strategy is actually being different at something big difference. So and I think we need to build more safe, private, well facilitated, not moderated, but also facilitated conversations. I mean, we learn to Yes, a lot of people come to us at SPI for this very reason, especially these days, given the big pivot we’ve made in the business over the last 18 months to two years. But yeah, that’s kind of how I get, again, kind of spicy about community.
Natalie Franke
I want more of the spicy because I think we, we agree on this friend, and I’ll give an example. You know, I have a hot take where a lot of the time you’ll hear folks referring to their audience as their community. And there’s a huge difference between an audience and a community. You know, I’ve always believed that an audience is very much you speaking to a group of people that are listening, but a community is one in which the people themselves by virtue of being connected to one another, right? They form value just by having each other, yes, you contribute immensely. But even if you were to go away a community, you know, those relationships, they live beyond you, they are a part of something that is living and existing and in very, you know, in very good community, you’re the facilitator of that, and I love that you use the word facilitator, because I think it’s really important. Let’s lean into that, you know, what do you think makes a good community when we’re talking about it, and I love that you said, you know, a private space, a facilitated space, you’re leaning back into what we started with, which is like, we’re going back to small, like less, you’re speaking to 5 million people and point 00 1% Or even hearing it and more, you know, small, intimate cohorts where we really know one another, we’re really able to have those deep conversations talk me more about that. What makes a good community in your eyes? What have you seen with all of the work that you’ve done with SPI you know, in what what communities work with communities last and what doesn’t work? What doesn’t last?
Matt Gartland
Yeah, well, it starts with actually what you just offered up, which is a critical point of context. It’s not audience you know, when when you are building audience an audience building is important, especially for almost any version of online business. It is largely a consumption sort of mentality, especially with the algorithms and things that you know, again, we could fall down that rabbit hole if it makes sense to but you know, you are you are doing top of funnel work audience building you want to foster or begin fostering really, you know, authentic relationships, but that’s mostly going from okay, I don’t know who you are, Natalie, Do I like you kind of begin to develop some level of trust in you and what you’re putting out there? Do I see myself in you to some degree in terms of the shared experience in terms of maybe a common set of goals or lifestyles or something, you know, in that realm, right. That’s audience building done? Well, you know, it’s kind of classic Kevin Kelly 1000 true fans way back from like, feels like The dawn of the internet, you know, it’s still out there as a very, you know, timeless sort of concept. But that’s not where the journey ends, at least, you know, again, strong opinions based opinion. Maybe it shouldn’t. And they’re right. So, so the, the big inversion point is going from a kind of Content First approach to audience building, to then not content being community, you know, what you want are? Or do trust me enough to tell me your problems? You know, what are you struggling with right now, you know, soliciting for the questions, to go back to even talking about bets, right, you know, in your making bets, because you don’t know to use again, the poker reference from any Dukes book, you don’t know what cards Natalie, you’re holding on the other side of the table, right. So if you can get people to reveal their cards too, because you’re in a safe space, not because you’re playing the game or competing, right? Just because like you’re holding your cards close to your chest, I have insecurity, XYZ other thing, if you can just get people to show you your cards or their cards, and because maybe you have to go first. And which is something that is oftentimes a hard thing to do, especially if you are the you know, kind of so called important person in the room, you know, that’s fostering the community. And you know, there’s maybe some ego, there’s, but if you can actually put that aside and lean back into that humility, and you can show your cards first. That’s vulnerability, right? That is That is real vulnerability in a safe space, where it’s like, yeah, we’re struggling with X, you know, are you willing to show up in that space? Also, that’s community, right? That’s community. It’s not a content driven thing.
Natalie Franke
I love that talk to me a little bit about community led growth as a concept. What is that? What does that mean, talk to you, like, I hear a lot of folks use it. And they’ve used in different capacities, but for the independent business owner, who maybe isn’t familiar with the concept, or even how community can drive growth for a company. Talk to me a little bit about that. Yeah,
Matt Gartland
I think about it as an honest to goodness, like product innovation pipeline, sort of as like a philosophy or strategy. So if you start small, and maybe you started Uber small, so you’re starting with a one to one service, like so many people do, you are a freelance designer, wedding photographer, was the right, exactly. Yeah, if you are, you know, certainly a coach of some discipline or expertise, right, that is a marvelous way to get started. And I want to emphasize the marvelousness of that, because I think especially over the last, again, five to 10 years, when it’s all been about growth, it’s all been about, hey, you know, what’s the biggest thing that I can hockey stick scale, right, and it doesn’t even have to be a piece of software, you know, my online course, you know, that’s DIY can could go to the moon. In terms of scale, right? Like, there’s almost been, I fear, sort of a devaluing of like, one on one service work. And that’s a shame in my book, because when you start small at that level, you know, and lean into, again, the community of this, which is like really understanding the other person’s life in business and goals, and getting them again, to reveal their aspirations as along with their problems, you know, even in a one on one context, that you can learn from that and then apply that forwards. So then product innovation wise, you could potentially, if you want to go from one to one to small group, right, that’s a way that you can potentially find some more breathing space in your business could be, you know, an expansion revenue point, you get into your really good unit economics, we could talk all day long about pricing strategy, probably not right now. But right, so then you could go to small group, and then from small group, you learn, you’ll lean into that community, you get feedback, you realize, man, this experience I just put out there just nope, like just dead flat didn’t work. Okay, glad to know that. But it only took a month to learn that not not a lot, not a big risk, or a big bet to have made and lost. So how can I learn from there, and then after enough reps there, maybe you do ultimately end up with a piece of curriculum that you can design into some version of a course. Right? So you can reverse engineer a lot of this stuff, in my experience, and my view, beginning with like, community in a one on one setting, which is maybe a weird thing that kind of say, but like, you and me have community right now.
Natalie Franke
Yep. I also love that what you didn’t say which was okay, when you’re creating a business, you know, just just go after whatever you want to do and create, you start with the people that you’re serving. If you’re doing one to one, you know, serve that person well focused on serving their needs. I think something that I see a lot in the independent business space, and I am so guilty of doing this so many times myself is I have all these ideas and I just want to start chasing 50 different things at you know, at whim like that makes me excited without going back to but what’s the problem I’m solving or the service I’m offering and who am I helping and growing based on the learnings right at a small scale like start one to one and one to one, maybe all that you want to do and you may Not go to small group, you may not even scale to, you know, having a larger one to many format in your business. And for a lot of people, you know, we have a lot of people in the community where the one to one service space is truly the dream. That’s the dream. That’s what they want. That’s great, too, like, please no, that’s extraordinary. You may also uncover, though, in the pursuit of doing that, that there are these other revenue streams and potential routes to serve that you weren’t even aware of. And I know that’s also been my journey, right, going from not even fathoming in a million years that, you know, there were all of these multitudes of variations of how to grow a photography business, for example, or, you know, you mentioned coaching, we have ton of consultants in the community, freelancers that do all sorts of different things. But I love Matt, that you keep going back to, like, you know, focus on the community you have, if that’s one to one that counts, that’s community, that’s where you start. And you can scale and grow from there. I’d be curious to know, you know, what are some of the mistakes that you see people make, we mentioned the hot take on audiences and community. But is there anything else where you see people kind of maybe making a misstep or a mistake when it comes to kind of leaning more into community led growth?
Matt Gartland
A big one is some version of taking your eye off the ball after onboarding. So you know, if you’re doing community in a way where it’s okay, not one to one, or maybe very small group, where it’s almost, I would argue, impossible to take your eye off the ball in this way. But so if you’re building community on a community membership platform, right, like we do, at some sort of size, you’re going to have to contend with onboarding, to design a very thoughtful and tailored onboarding process. Very frequently, community builders, especially first time community builders in this sort of a now version of community, you know, the onboarding stops at some point, right? That might sound obvious, it should stop, right? Because, okay, they’re onboarding and now they’re in, but it’s like, okay, then what, and oftentimes, it just kind of goes dark, there’s a big drop off in terms of what you are doing to continually, I’ll say, earn the show up of that person, you know, whoever that person is. So how are you inviting them back? If they don’t come back? Do you somehow know that? And are you then reaching back to them say, hey, Natalie, I haven’t seen you around here for a couple of weeks. Are you okay? Right? Like, do you yourself, if you are independent running this? Or if you have a small team and someone is doing that for you? Have you somehow codified you know, that approach, right doesn’t have to be overly formal? Like you have a seven step SOP? Or maybe you do, right, but like, essentially, what happens after onboarding, what’s the next experience to keep that connective tissue going and growing?
Natalie Franke
And so many businesses, even when they think about growth, right, they focus on conversion, and nothing after that. So I hear you saying, you know, onboarding, and you’re like, Yes, don’t just stop at onboarding. And it’s so funny, because as you’re talking, I’m thinking about all of the independence with a client flow, where it’s like, okay, just acquire the client, like, just get the client to sign on the dotted line, sign that contract, and we’ve done it. But what I’m also hearing in this is that parallel, where it’s like, Look, if you want a community led growth engine and a business conversions, just truly a stepping stone, then it’s about okay, retention and nurturing. And how do you turn a customer into an evangelist? How do you turn a client into someone that wants to tell everyone they’ve ever met about you, your program, your business what you’re doing, because it doesn’t end the moment you take their money, because it’s not just a transaction, because it’s truly relationship building. And that works for, you know, again, the one to one business ago, when I was a wedding photographer, I thought about this all the time, loving and nurturing my clients, even if I was, you know, they’re not returning. It’s always client acquisition when you’re a wedding photographer unless they get divorced and come back to you, in which case, okay, client retention, but for the most part, constant acquisition, nonetheless, if you provide an extraordinary experience, and you stay in touch and build a community where those clients can connect with one another, and they stay in touch with you, the sky’s the limit, because as you do that, and you you no longer drop off with your intentional nurturing at the point of conversion. You’re generating a essentially a word of mouth engine that is unstoppable. And as we know, word of mouth although we love to discount it, although we love to, you know, we hear all the time the sexiness of like paid spend, and you know, these big launch campaigns, it comes down to word of mouth, it is at the end of the day, when you run a business, what are people saying about you? It’s not just that they’re talking? What are they saying?
Matt Gartland
1,000% my god, okay, many things. One, my are our wedding photographer, Allison, just phenomenal. In her business. She does, you know, essentially additive services right, or different contexts, right? So newborn baby photos, and she family holiday shots, guess what, we’ve come back to her a half a dozen times, at least probably now more than that even, you know, we have two young little girls. And you know, it’s like, we want to capture those moments. So like, she has done an amazing job of developing community and word of mouth, just among the local folks here, you know, that have been again, wedding clients first. But though not not just clients, not just transactional, like, like, she’s someone that we trust to kind of capture these really important moments, right? So it is about retention, longevity, you know, the techie word that does matter if you’re really trying to build something where there’s again, like a subscription revenue coming from your community members would be then lifetime value LTV, right, right, which is something like, guess what, you should measure that, right? Because you should enter software that makes it easy to do, but like, so we track that for us. Because it’s not just about the acquisition and the initial payment, you know, we want to earn the ongoing payment, and you have to earn it with the experiences and the programming that you’re providing in the community.
Natalie Franke
I love it. And I never hear especially in the service based business space. I never hear people talk about LTV, right, I never hear it. And yet, the moment you just said that, I’m like thinking, dang, if people only take one thing away from this, you know, think about for a second, once you do acquire someone, what is the lifetime value? If you do that job? Well, if you nurture that relationship, if you serve them well. So yes, it could be that they, you know, continue to come back to you for other types of services or sessions, you know, and in even in sort of a broader, perhaps not completely true to the definition of LTV, but arguably, in this context, we can consider it, you know, what is like the referral potential, even of someone who served well. So for every one client you serve, well, how many people do they know who might also be a fit for your business? If we’re talking about it from that lens, or from kind of a scale perspective, referrals are also incredibly powerful?
Matt Gartland
Tremendously. Again, for folks that are running, what I could probably say, now is the classic idea of a creator based business, right? Then you’re probably how the affiliate mechanic somehow, right you’re, you’re referring a piece of software that you use to run your business, you’re an affiliate for it, and maybe that’s some supplemental income coming into your business, right? Or maybe the opposite, which is like you then have an affiliate program for the thing that you’re selling, right? Well, that’s just mechanizing word of mouth, like, like, it all does boil down to word of mouth, like it is phenomenally timeless, it’s never gonna go away. If you’re a coach or a one on one consultant. That’s true. But even for us, like we want to play into our membership, and galvanize them and evangelize them, so that they will evangelize us, yes, we have some software helping us with the, again, the mechanization of of an affiliate program to add some notable incentive there. But that’s almost like the cherry on top of the whole thing, like if you’re actually helping them, and they’re transforming in the way that they want to, and we’re helping them arguably, they would do it, you know, even without some, some incentive, you know, in play.
Natalie Franke
Yes. And that’s always been something, you know, on the HoneyBook side, and again, talking more on kind of honey book as a SaaS platform client flow management. But that’s always been a core tenant and a foundational, almost like value that we’ve talked about on the team, which is, if we’re going to invest somewhere, we would rather invest in giving money back to our members that are referring us then into paid ads, for example, like, we’d rather put money back into the pockets of the members that love the platform and want to tell their friends about it. And I think when you kind of take that mindset and then apply it to the independent business, I’ll never forget, I was maybe three to four years into my photography business at the time, I didn’t even I had never thought of a referral program. I didn’t even quite know what that was. But I heard a photography educator speaking about how within his wedding business, he had built out a very simple didn’t require software type of referral structure, where his whole goal was, I never want to have to market myself, again, I want my clients to do it for me, if I have a client that I love, there’s a good chance they have a couple friends that would equally be a great fit for me. What if I could invest instead in them and, you know, walk through this idea of just building a very basic, very fundamental, you know, one client refers one client equals this incentive, you know, as they refer more equals more incentives. We’ve all seen structures like that, but to someone listening to this, who’s maybe very new to the concept of an affiliate program or, you know, referrals or even says, oh, but I’m a service based business nap mat, like that’s not super relevant to me, I’m going to hit is kind of like hit pause for a second and say, think about it. Would it be advantageous for you to examine the client flow that you have today and how, yes, you acquire customers, but you continue to serve them throughout the lifecycle of their business. And then if and when There’s a point to give them the tools they need to refer you or add incentives to that referral structure. Have you ever considered it? Is that a better use of your time perhaps, than posting the, you know, 1000 photo on Instagram that only point 000 3% of your audience or whatever it is now, gosh, is going to see? That’s up to you to answer. But maybe I’ll ask Matt, thoughts on that thoughts on, you know, in terms of the future of really growing a business? Do you think this kind of smaller community led, maybe even we say not so small, but word of mouth referral space, is going to be more or less impactful going forward? And then how do you think that impacts these other channels that a lot of us have maybe counted on and been frustrated on in recent years, like Instagram, like Twitter? What do you see happening there? Just overall, I’d love your take on on the future.
Matt Gartland
I genuinely do not just to keep maybe agreeing with everything you’re saying. But there are some existential I think realities, you know, that are, you know, currently in flight, you know, online, we already hit, you know, a big one, which is where we’re at with AI, right, and what that could possibly have, and I’m not a prophet, I don’t know exactly what’s going to happen. But, you know, that’s something that we should all pay attention to, you know, the, the fabric of the internet is definitely changing and seemingly at an accelerated rate. Social media as an entire category, right, is also going through some interesting, you know, transformations, with the algorithms with, you know, government oversight and regulation, you know, you know, being discussed and discussed even more vehemently, you know, and not to take like a side on it, but just like that’s the thing that is happening right now, right now. So to the degree that you are reliant on, you know, a Facebook ad that worked eight years ago, right, as the top end of a funnel, like I know, so many people, unfortunately, that have had a lot of adversity, because like, Guess what, that adds not converting like it used to, or, you know, the rates on that ad have just skyrocketed, and now they’re, you know, their row as score their return on that investment has inverted. Right as well. I’m sorry, and I’m generally feeling for you, but also, like you haven’t innovated, and you haven’t done some sort of even basic kind of SWOT assessment, you know, for your little small business to understand what are some existential threats that you might want to have some fallback plan for? So yeah, so I think this the social media, kind of calculus for a small business owner, again, we’re finite resources, maybe no paid ad spend budget? Or if anything, maybe it’s pretty small. Right? Like, yeah, I would rather invest and build my defensible moat. No, I’m using a bunch of buzzwords sorry. But like, build my moat around direct relationships in the inner circle of my fandom. You know what my friend and partner Pat, obviously would call like, super fans, right? is like, how do I continue to serve them and invest in them and earn their word of mouth referral, whether they share it on Instagram, or Tiktok. Or I mean, anywhere that would be deemed public, right? I’d much rather honestly someone to refer me privately at this point, than even public.
Natalie Franke
That last bit there, you just dropped in very casually, but I just want to highlight it because I was feeling the same way as you were speaking, which is, I’d much rather have someone refer me in private, even the public. And it goes back to the heart of where we started with this, that is, you know, there is such immense value in the one to one there is immense value in sometimes going back to focusing on small experiences, relationships, how you can serve and show up. Yes, there will always be benefit to the Tick Tock that goes viral, the Instagram posts that everybody sees the, you know, spark that catches fire and that level of virality. However, in a world where it feels as though everything is vying for our attention, the level of trust that you get when a friend says to you, Oh, you don’t need to go look for somebody I already know who you should work with, here’s what you need. It’s done. It’s a done deal. It’s it is like, just such a significant amount of confidence that is essentially passed from one person to another, and to build a business that earns that again, I believe this is my hot another hot take just to close out the hot take series we’ve got going on here. I believe that a good referral has to be earned that a reputation therefore has to be earned. It can’t be bought in the same way that an ad can or awareness can that like you can buy awareness. Yes. And some would argue with me that you could by you know, this positive sentiment but I actually believe that you have to earn it. You have to earn somebody’s trust you you can you can get their first offer of trust, but you have to keep it you have to earn it and you have to show up with value to them such that they stay you know, with you and your business beyond the initial conversion that they don’t just hand you your money and then ask for a refund because you’re not delivering on your promises. But instead you’re showing up and over delivering without rambling on On and on and on, because I could talk to get go, I could talk to you
Matt Gartland
all, I was gonna give you a kaboom for that, because that was fantastic. And was going to very quickly offer up like another great way to think about it and even study it is in the retail sector, you know, so is, you know, the shirt, you’re wearing the blazer you’re wearing, you know, who referred that to you? Where did you find that? You know, where do you have trust in the merchandise honestly, that you’re physically wearing? A part of my, you know, interesting and diverse career has been in E commerce and was a co owner and CEO of a firm, where we were working with some of the biggest retail brands on Shopify. And gosh, there’s another layer here, which is like the importance of real honest to goodness, b2b business partnerships, and not just going after b2c all the time. Natalie, have me back, we’ll talk about that. But you know, it from those experiences where, again, we were working with bomba socks and chubby shorts, and some of these really iconic and different brands that are doing or at least back then Gosh, 20 to 30 million, and I’m not exactly sure what they’re doing right now. But like, they were winning, because they had built community in different regards, almost like through their merchandise, and then, you know, sort of the additive experiences, you know, and branding you that they’re doing, and sometimes they have philanthropic components, you know, bombas socks has a, as a philanthropic component, much like a TOMS Shoes does, you know, in terms of giving, which is really important. But, you know, it’s it, again, I think kind of emphasizes and what I’ve tried to even bring from those experiences in my career now forward into the online education kind of space and everything kind of creator oriented is, yeah, how are you earning, like the next t shirt that you’re trying to sell? Right? Even if you’re not selling T shirts, it’s like, like, it’s the same idea.
Natalie Franke
I love that. And I’m actually wearing Bompas right now. So that’s actually quite funny and amazing. And I’m wearing them because a friend told me like she was worried like, Okay, this is weird. I’m, but I am obsessed with my socks. Like, who is obsessed with their socks. No one’s no one’s obsessed with their socks. And yet here, I am also obsessed with my socks. And my mom was actually, I love I love that example. And I think it’s always good to be able to look at other industries that are not our own, and just take away those learnings as we can. Matt, as we wrap this up, I have one final question that I asked all of my guests, there’s no right or wrong answer. And everyone’s sort of answered differently and in their their own way. But, Matt, I’m really curious to know, what you believe is the biggest differentiator between the businesses that succeed and the ones that fail
Matt Gartland
resiliency, because we all we always hit headwinds, there’s always going to be the unknowns, the things we don’t plan for the lack of information and insight. It’s the ones that you’re committed. And you have to adapt along the way. I’m not saying like people headed as a definition of resiliency, but rather, you adapt. You’re humble enough to know hopefully early on that you don’t know it all. And when some something hits, you have the resiliency to learn from it, and you keep going.
Natalie Franke
I love that so much, Matt, thank you so much for joining me today. This has been such a good episode, I am on fire hose. It’s it’s so fun. Now, folks are going to want to know where to learn more about you where they can get plugged in. So let them know where they can find you and what you’ve got going on.
Matt Gartland
Yeah, maybe two things if I can just super quick one is because again, I have a weird career. I’ve done a lot of different things. If you want to, like connect with me in that way or me directly like LinkedIn is the best. I’m not really a social guy. Like you’re not going to find me on Twitter. Find me on LinkedIn, just search for me, Matt Gartland. So that’s me. And then you know, my primary kind of project and thrust right now is SPI so smart, passive income, Smart Passive income.com You might know of my my good friend, Pat Flynn. So that’s our work there. And we’re completely community powered at this point, I’m proud to say so we do live what we preach.
Natalie Franke
I love that we will link everything in the show notes as we always do. Matt, thank you so much for joining me.
Matt Gartland
A real pleasure. Thanks, Natalie.
Natalie Franke
That ends our episode of The Independent Business Podcast. Everything that we’ve discussed today can be [email protected]. Head to our website for access to show notes, relevant links and all of the resources that you need to level up. And if you’ve enjoyed today’s episode, be sure to subscribe to the podcast so that you never miss our future content. Drop us a review and leave our guests some love on social. Thanks again for listening.
