November 21, 2024
I recently sat down with John Melizanis and Kyle Russell on their New Money Talks podcast to share my journey of scaling AppSumo from $3M to $84M in revenue over six years.
What started as a casual conversation turned into a deep dive into the often-overlooked aspects of scaling a business – from nearly bankrupting the company during rapid growth to learning why hiring isn’t always the answer.
What You’ll Learn:
- The #1 mistake entrepreneurs make when scaling.
- Why relying on hiring instead of automation can destroy your business.
- The emotional rollercoaster of entrepreneurship and learning to celebrate your wins.
Video
Watch my appearance here:
Transcript
Ayman Al-Abdullah: Welcome to episode 85 of New Money Talks.
John Melizanis: Yeah, perfect on the money. First take, we got Mr. Ayman Al-Abdullah.
Ayman Al-Abdullah: What up?
John Melizanis: What up? This is a very good friend of mine. We’ve come very close. We actually worked together. He’s been an amazing mentor of mine too. I’m actually very excited we got him here to New Jersey, which is kind of funny. You do not want to be here.
Ayman Al-Abdullah: The check size was very large to.
John Melizanis: Start off this podcast. Ha. In a sense, there’s this very cool company called Appsumo. If you haven’t heard of it, you should look it up. Amon was the one of the masterminds behind bringing it from 3 to 80. 70, 80, 85, 90 million somewhere over there. There’s a bunch of different numbers there. But he’s an amazing mentor of mine, amazing coach. Happy to have you here. If you want to give us like a little spiel of who you are, how you tell people who the hell you are, pretty much just say, hey, if you walk into a bar and you were going to meet somebody and explain who you were in 30 seconds, I want to hear what that looks like.
Ayman Al-Abdullah: Thanks, John. Appreciate it. Appreciate it. Fellas, thanks for having me out. Yeah, I mean, my name is Ayman. I mean, what I’m most known for is being the former CEO of AppSumo. Joined them when they were doing around $3 million in revenue. Stepped down when we did about 84 in annual revenue. And that was over the course of six years, fully bootstrapped, growing 80% year over year. Grew the team from just myself to over a hundred full time employees and contractors. And the company’s still going strong. Noah, Noah Kagan, who’s a close friend, one of my, consider one of my best friends is the CEO now. And we still work closely together. And it’s been awesome to see that journey of Appsumo from myself being a former customer to now being a almost a hundred million dollar behemoth.
John Melizanis: So my first question, it’s the question I always wanted to ask and I think I’ve asked you before, but I want to hear what your answer is to this. You were never a CEO of a company before. You were at Stream, I don’t believe. So when you stepped in there, the company’s doing 3 million a year. What in the world, the hell did you do to get the company from 3 to 80? I want to know, like what you think you did and what really made that happen in a sense, you know.
Ayman Al-Abdullah: I mean, the first, the first 18 months was literally just keep the lights on you know, because at the time, Noah and the team had transitioned to a new product called Sumome software product. And so I was literally just running the existing playbook, like, keep the lights on. Let’s funnel those profits back into Sumo Me.
John Melizanis: What was the Playbook?
Ayman Al-Abdullah: So the playbook was, close the deal on Monday, write the copy Tuesday, send an email Wednesday, do customer support on Thursday, prospect Friday. Right. So run that playbook over and over again. And so if we’re closing the deals, we got something to sell.
John Melizanis: Interesting.
Ayman Al-Abdullah: And so when we’re running that playbook, all of a sudden you start to learn some trends. So trend number one is, hey, there are certain products that sell better than others. Shocking. Right? That’s number one. Number two, there are. There are certain marketing channels that work better than others. Shocking. And so you start realizing there are certain trends that if you. If I’m spending just as much time closing these other crappy deals or pursuing these other products, and I’m making way more money in these other categories, why the hell would I spend any time on these other categories? And so all of a sudden, our prospecting list changed. And so when our prospecting list changed, all of a sudden, guess what? Revenue goes up. Isn’t that interesting? Right. When we focus on products that actually go do better, that. That does better. Number number two are we are marketing to everybody. And so we were like, well, if we look at our customer base, there’s a few customers that are spending more than everyone else. Once again, shocking.
John Melizanis: Yeah.
Ayman Al-Abdullah: And we realized, like, there’s this one cohort of customers that is outspending our other customers by 10x and yet we’re completely ignoring them. None of our marketing speaks to them. None of our targeting is after them. So why don’t we go and focus on these customers? And ended up realizing, like, holy shit, every single successful company that we’ve ever launched is doing this exact same thing over and over again. They figure out who. Who loves them.
John Melizanis: Yeah, I see.
Ayman Al-Abdullah: And then they just sell better stuff to that individual. And it’s like, in hindsight, it’s like, oh, this is rocket science. This isn’t rocket science. And so when people are like, Aymann, how did you grow it from 3 to 85 million? Like every other company, I found an ICP and I sold them the stuff that they wanted. And it’s not rocket science. It’s actually pretty simple. It’s very repeatable. And literally every company that can follow this process, which is really Persona, product and promotion, you nail these three things. There is no reason. You’re not sitting on an eight figure business.
John Melizanis: Interesting.
Kyle Russell: One of the three P’s that I’ve always heard was people. Like, so people, Product and promotion. What was that first one that you said?
Ayman Al-Abdullah: Persona. Yeah. So interesting. So people is about your internal Personas, your external. I actually hate people. I think the best, the best businesses are solo founderships if you can. Like, business would be a lot more fun if there was a lot less people. Like nobody wants to sit in one on one. No one wants to. I actually think hiring is a sign of failure. It’s your inability to automate a part of the business. So to me, like, I would love nothing, by the way. If you’re, if you’re listening, you have a business, one person running a hundred million, contact me, I’m going to buy it. Because that’s a way, that’s a way more fun company to run versus like performance reviews and cost of living adjustments and sales. It’s like, bro, rolling my eyes. I don’t want to do another HR training. Like, let’s just get to the business. And so when we’re thinking about that, it’s way more important to think about the Persona, you know, and so to me, hiring is a sign of failure. You want to avoid that as much as possible.
John Melizanis: Yeah.
Ayman Al-Abdullah: Because that to me is a sign that you feel.
John Melizanis: But like your first 18 months there, right, you’re like a 30. You were like 30 years old or whatever.
Ayman Al-Abdullah: Like 26.
John Melizanis: That’s what I’m saying. You’re 26. Like you’re not just figuring this shit out. Like how the, how’d you even get to this point to figure that crap out?
Ayman Al-Abdullah: Well, I mean, I started companies in the past for sure. Sold two of them. So it’s not like I’m, I’m, you know, I’m not.
John Melizanis: No, definitely, definitely.
Ayman Al-Abdullah: I’m not brand new to the business game. I’ve been a customer of Appsumo for, you know, since 2011.
John Melizanis: Oh, God.
Ayman Al-Abdullah: So, I mean, I’ve been floating around this soup bowl for years now.
John Melizanis: Yeah, yeah.
Ayman Al-Abdullah: So it’s not like I’m brand new to the game. I knew how to do sales, I knew how to do copy. Definitely not at the appsumo level. Definitely, you know, so Anton Neville, they taught me how to get, you know, appsumo level copywriting. But, you know, at least the raw skills were there for sure.
John Melizanis: Yeah, Got it. So like, you figured out that Persona you wanted to sell to.
Ayman Al-Abdullah: Yeah.
John Melizanis: Then you figured out like what to sell them the product.
Kyle Russell: Can you Go over like what a singular product that you like double down on that was doing really well.
John Melizanis: Give us the first killer. I’m curious what that is too.
Ayman Al-Abdullah: Well, I mean there was a bunch of killers before me, right. But you know, we were at, when I joined we were doing everything. We were doing udemy courses and fonts and design pattern packages and ebooks. And so we’re like, we’re doing everything under the sun but when we’re analyzing we look back and go, okay, we, I’ll give you an example. Appsumo’s bread and butter used to be bundles. So bundles are, we’re going to take 10 products that hopefully are in the same category. Hopefully we’re going to coordinate 10 different founders, 10 different marketing schedules, 10 different redemption. We’re going to write copy for 10 of them, we’re going to put them together and then we’re going to split profits 10 ways. So it’s way more work, 1/10 the money.
John Melizanis: Yeah.
Ayman Al-Abdullah: So like when we realized like, hey, there’s actually this other category that requires 1/10 the work but makes 10x the money and that was for us, Software lifetime deals.
John Melizanis: Interesting.
Ayman Al-Abdullah: And so when we started doubling down on software lifetime deals like we, we basically invented that category. And when we invented like people were tired of paying subscriptions. They’re like, I can’t believe I’m paying subscriptions for a startup that I had two years ago. And they were like tired of it, you know, like, so they were like, if I pay once with appsumo, that’s it, I never have to worry about this again.
John Melizanis: Why would the startup be willing to just like have that lifetime one time payment? Like what’s the, what’s the incentive for them to do that?
Ayman Al-Abdullah: Multiple reasons. So number one, a lot of them are just getting started. So massive exposure. They’re getting their first thousand customers. Oftentimes there’s a lot of upsell opportunities. And so if a customer hits the natural limit, hey, I actually use this product, let me go and upgrade. Additionally, I mean if you think about it, every SaaS still has a customer lifetime value. And so if your lifetime deal is equal to or greater than the, it’s the equivalent of getting all of the MRR upfront anyway.
John (AD): That’s smart.
Ayman Al-Abdullah: And so I mean to me there’s a million reasons why you would want to do it. And some of the most successful companies of all time have launched on Sumo.
John Melizanis: Now another question I had like in the moment, while you’re there, in a sense, do you feel like, oh, this is Going to get to 80 ish million every day. You’re just like, this is a mess. Every single day.
Ayman Al-Abdullah: No, I mean I remember vividly I jumped on the phone with that, with Noah. I was at, I was working at Microsoft at the time, snuck out to the parking lot and I was like, yo, Noah, there’s a lot, this is the exact phrase, there is a lot of meat left on this bone. Because he had transitioned to Sumami. And you know, he’s classical founder. He’s working on a million things for sure. You know, he’s brilliant in that regard. I don’t think there’s anyone better at launching seven figure businesses. But one of the things that you, the transition from founder to CEO is focus and like actually sticking with the thing that’s working for sure. And for me I was like, man, if we just focus on appsumo, there is no reason why, I didn’t think, I didn’t know if I was going to take it to 85, but I was like, there is no reason why this thing can’t.
John Melizanis: I only ask that because like when we have our monthly talks, when I call you on the phone, you’re always so fucking calm. You’re like, dude, this is easy. Just like bang, bang, bang, bang.
Ayman Al-Abdullah: Yeah.
John Melizanis: But like day to day, obviously you’re just like, he’s felt as. I felt this. I’m sure you felt that. You’re just like, this sucks. Like, this is not working.
Ayman Al-Abdullah: Totally.
John Melizanis: You want to punch stuff. You feel like getting punched in the stomach every single day. Right?
Ayman Al-Abdullah: Totally.
John Melizanis: And as someone who has been successful like yourself, you still feel that. Right? Like everybody else. It’s not just, I mean, yeah, that.
Ayman Al-Abdullah: Let’s look at the stock market. Zoom out. If you’re, if you’re in the day to day and you’re like, oh, today sucks. It’s all red. It’s like, oh, of course red. And so if you’re in, if you just see red.
John Melizanis: That’s a great analogy.
Ayman Al-Abdullah: You’re just going to be like, let me sell. Yeah, let me, let me sell out and I’m going to walk away. But if you zoom, zoom out, regardless of who’s in, who’s president, regardless of what war we’re in, regardless of we’re in a recession or not, stocks go up. So zoom out. They’re going to go up, you know, and so if you do the right activities, if you are in the right industry, if you’re willing to ride the tides, ignore the day to day red and focus on the long term green Interesting.
John Melizanis: Yeah, I think that’s. That’s a good way to put it because, like, I feel like everyone, all founders, startup founders, even big business founders, they feel like shit all the time.
Ayman Al-Abdullah: Always.
John Melizanis: Yeah.
Ayman Al-Abdullah: You got to enjoy the feeling like shit. Right. To me, like, entrepreneurship is the crossfit of business. And so if you’re willing to go to the gym and bomb it every single day and go, hell yeah, that was a great workout. That is how you know that this is the game for you. If you don’t enjoy that, if you’re not willing to go and do 25 thrusters with 225 pounds, this is not the game for you. Go work at the dmv. Go work at the dmv. Right? Like, where you’re. Listen to our lunch break and you’re home by 4. If you don’t want to enjoy the game of entrepreneurship where you’re literally going to be vomiting every single day.
John Melizanis: Yeah.
Ayman Al-Abdullah: Then this is not the game for you.
John Melizanis: Definitely. Yeah, no, it’s. It’s a. It’s a valid point. It’s easier said than done, obviously, because.
Ayman Al-Abdullah: Like, you gotta enjoy it, man.
John Melizanis: Yeah, you gotta enjoy it.
Ayman Al-Abdullah: You gotta. You gotta be more excited about overcoming the challenges than being pissed off that the challenges are in front of you.
John Melizanis: For sure. Yeah. Cause, like, like you said, it’s very simple. It’s just more like you just have to execute on it in practice. Right. So.
Kyle Russell: And it’s also very different. Looking at the day to day versus week to week, month, month, quarter to quarter. Like.
Ayman Al-Abdullah: Yeah.
Kyle Russell: You zoom out further in the stock market where we all just live on a floating rock.
Ayman Al-Abdullah: Yeah.
Kyle Russell: And we have no idea why we’re here.
Ayman Al-Abdullah: Well, this is why. I, like, I have like a giant whiteboard and all I do is I write my wins.
John Melizanis: Interesting. Okay.
Ayman Al-Abdullah: That’s literally all, like, at the end of every week. That’s part of my weekly ritual. One of the first thing that I do is go, what wins that I have this week?
John Melizanis: I’m curious, what’s some of the wins you had lately? If you want to share.
Ayman Al-Abdullah: No, I don’t.
John Melizanis: You don’t want to share?
Ayman Al-Abdullah: Well, I mean, the biggest one is like, I was able to just secure my, like, dream home, you know?
John Melizanis: Congrats on that.
Ayman Al-Abdullah: Working on a 2,000 square foot office, sauna, cold plunge. Yeah. Gym bar that’s gonna have smoothies, supplements, the whole nine. So, like, I’m working through that. So, like, that was like a nice, fun. Yeah. So movie theater room. So literally gonna be doing like live podcasts and all that fun stuff. Like all in this little, you know, there’s, you know, office.
John Melizanis: Yeah.
Ayman Al-Abdullah: So that’s like a fun, fun recent win. You know, I’ve had several clients that have tripled their business in the last year. So that’s, that’s been a lot of fun. Despite a recession for sure. So they’re like hitting record breaking months and they’re in Japan while they’re doing it, like on vacation.
John Melizanis: That’s nuts.
Ayman Al-Abdullah: So to me, like, that’s, I’m way more excited and pumped about that than, than anything else. Yeah, I mean that’s, those are some big ones, but you have to write those down because your brain is an asshole and it’s always going to think about the negative. And so literally it’s right there in front of my desk. Every time I walk by it, all I see is the wins from my last year.
John Melizanis: Interesting.
Ayman Al-Abdullah: And I’m like, that’s a bad motherfucker. And honestly, anytime if you were to just write down all of your wins, I love that you would literally just go like, holy shit, I can do anything.
Kyle Russell: Yeah, that’s her. Moses says hormones says something similar. He’s like, when you come to crossroad where there’s a challenge in front of you, just, you just have to list out all of the, the evidence that you have that you’ve overcome challenge in the past. And so if you build this stack of undeniable proof that you know what it is that you’re doing or that you’ve overcome challenge, or you face adversity and you’ve come out better on the other side, then, you know, it’ll give you that conviction that you’ll be able to, you know, tackle whatever’s ahead of you.
Ayman Al-Abdullah: Yeah, I forgot who it’s. I think it’s Ed my lead, but he’s like, self esteem is the reputation you have with yourself. And what that means is like only, you know, like, hey, I said I was going to do this and I did it. And if you have low self esteem, it’s probably because you keep breaking promises to yourself.
John Melizanis: Wow.
Ayman Al-Abdullah: And if you have high self esteem, it’s because you say you do what you personally say you’re going to do. And so when you can create a list of all of the things that you said you were set out to accomplish and you show yourself that you can accomplish it, your self esteem is going to be through the roof, your confidence is going to be through the roof. And then all of a sudden, any problem that’s going to come Your way is going to feel small and infinitesimal in comparison to who you are as an individual. And the best way to think about that is think about the problems you were dealing with when you were 18 years old. 17. What college you’re going to go to, what business you’re going to create. When are you going to make your first thousand dollars all irrelevant? Now it’s all the tiniest problems in the world for sure, and it’s, it’s a direct result of the promises that you made to yourself that you were able to overcome. And so these problems that you’re facing with right now feel huge because of two things. Number one, they’re brand new to you. You’ve never gone through it before. If it was new, if it was something you’ve gone through before, you’d be like, it’s easy. And then number two, it’s because these problems are now at the level for you. And so for you, you have to recognize that this is a sign actually that I’ve leveled up. And so get excited about it because this is an opportunity for you to go and overcome this particular problem and be able to look back on it the same way you look at your 18.
John (AD): Hey, what’s up new money talks fam want to give a quick shout out to our amazing sponsor Omnisend? Email and SMS marketing is the lifeblood and backbone of every e commerce brand. It helps you generate more revenue from your current customers, build an amazingly loyal fan base, and even helps you generate user generated content from your customers. If you’re looking for an awesome software to use for email and SMS, OmniSend is your place to be. Omnisend helps ecom brands around the world grow and retain their audience through easy to use SMS and email marketing software. They have amazing templates, amazing plugins and awesome software integrations and they have award winning customer support with 24. 7 support even on the free plan. So if you can’t afford a plan, the free plan has awesome customer support too. We’ve been using this software all the way since 2018. Kyle and I have had stores that we use Omnisend and they’ve been amazing. So I can only imagine how amazing they’d be seven years later. If you need an awesome email and SMS tool, Omnisend is your place to be. Click the link in the description to check them out. They’re a game changer. They’re the place to be.
John Melizanis: Back to the podcast. Well, this is part of our initial when we first met, you’re like, well why would you want to work with me type. You asked. I think you asked me that.
Ayman Al-Abdullah: Yeah.
John Melizanis: And I was like, well, I can either like learn this shit by getting punched in the face or I can just have you tell me what to do in a sense. And like, obviously you’re not going to be right every single time because you’re not running the business. But like you’re like, hey, from my experience, try this, do this. If it doesn’t work, who cares the fuck? Do something else type of thing. And I think part of what you said is like when a new problem arises, if you don’t have like on it, like craziest thing because he went the route of like he does coaching and everything too, like for E commerce and stuff. And I was always against coaching. And I remember the day I signed up with you. I go to him, I’m like, dude, I signed up for a coach. He’s like, you fucking did. He was like, what? I was like, I don’t know this fucking guy. For some reason I want it because like I realized in my, I’m like, oh shit. Like even the base stuff that we’ve gone through, in a sense, I wouldn’t even think to even think of these things. You’re just like, hey, think of it like this. Like we’re talking about in the cards, like little tidbits of just literally like little actions, like 20 minute conversation with people. It can just change the whole entire business. Yeah, but I wouldn’t have known that if I didn’t have somebody with that experience to tell you. Right, Totally. So part of what you’re saying, when like a new problem arises. Right. I’ve learned a new way to kind of overcome that.
Ayman Al-Abdullah: Yeah.
John Melizanis: You just have people who are like 10, 15, 20 years in life ahead of you experience and in business experience and just ask them, hey, what the hell do you do when this happens? You know, and then it doesn’t happen. You know what I mean?
Ayman Al-Abdullah: So totally. Yeah.
Kyle Russell: A lot of you. So a lot of people look at like the price tag of like coaching courses, etc. As opposed to the likelihood of ROI. If you look at it from ROI, it’s like the information can be terrible, but if you’re a good executor and you can apply it well, then you have to be an idiot to not have an ROI in like halfway decent coaching courses. Like I’ll go through an E commerce course and it’ll be terrible, but there’ll be one application that I can add like a good bundle app or a post purchase Upsell or an email marketing app that has better deliverability. And if I just download that one app, it’ll make me a hundred times more than the cost of the actual course itself.
Ayman Al-Abdullah: Yeah, a hundred percent. I mean, to me, my philosophy is CEOs don’t have expenses, they only have investments.
John Melizanis: Do you put this all on Twitter? Like that was on Twitter? Word for word. It’s kind of crazy.
Ayman Al-Abdullah: Yeah.
John Melizanis: Whatever you put online, you actually, like, live it to, which is so 100.
Ayman Al-Abdullah: Well, I mean, I look at my, I look at every line item on my P and L and I go, if I spend $1, I’m expecting 10 back. And so if I’m spending a hundred thousand with a coach, I’m going to expect a million dollars back. And I’ve spent a hundred thousand dollars with a single coach and I’ve gotten significantly more than seven figures back. So I’m always expecting a 10x return. Always. When I’m hiring an individual, I always, I tell them right up front, if I’m paying you 100k, you need to be generating me $1 million a year in revenue. So I’m always looking for that. In fact, we had a rule at Appsumo of every person at appsumo is responsible for a million dollars. So we, our revenue per employee was 1.1per million dollars. And so we’re always looking for ROI in that.
Kyle Russell: How do you do that for, like a customer support type role, you know?
Ayman Al-Abdullah: Well, you’re only hiring for two reasons. We’re either keeping a customer or getting a customer.
Kyle Russell: So retention.
Ayman Al-Abdullah: And so for customer support, it’s retention 100%. Do you increase my customer retention rate, my customer lifetime value? If I could get rid of customer support and I have zero impact on customer lifetime value, I’d much rather not have a customer support, obviously. Yeah, just let the inbox pile up. All my customers are only buying from me once anyway.
Kyle Russell: Yeah.
Ayman Al-Abdullah: You know, and so like, your, your money is probably better spent somewhere else to increase customer loyalty to the point where, hey, customer support is actually worth your time and effort.
Kyle Russell: Yeah, I think that goes the same for anyone who’s watching as an employee is like, if you don’t know how what you’re doing impacts the revenue of the business, like you need to as soon as possible.
Ayman Al-Abdullah: Yeah.
Kyle Russell: If you want to be valued in that.
Ayman Al-Abdullah: Yeah.
John Melizanis: You made us do that from the beginning.
Ayman Al-Abdullah: Like, that’s the first thing I asked you to do.
John Melizanis: I’m like, you’re like, yo, find a fucking bookkeeper. That’s good.
Ayman Al-Abdullah: How do you, how are you running? Am I allowed to tell you about the revenue?
John Melizanis: Care less.
Ayman Al-Abdullah: How are you running $10 million business without a bookkeeper? I like, blew my mind. I was like, this is absolutely ridiculous. You’re literally flying a plane without any dials. And it’s like you have no idea if you’re about to run out of gas. And so I’m like, that’s the first thing you need is I need your optics. I need you to have a bookkeeper. And I mean, how much more visibility do you have now?
John Melizanis: Yeah, tons. I get one email a month and it tells you everything.
Ayman Al-Abdullah: This is like obvious in hindsight, but it allows you to make much more informed decisions. Like, you know, just the ability to be like, okay, well, worst churn coming from. Where is my cash conversion cycle? Hey, what are we doing year over year? Like, are we even growing? And so I think just having that and your taxes just become so much easier as a result of it.
John Melizanis: Yeah.
Ayman Al-Abdullah: And as one less. I don’t even know who’s doing your books before.
John Melizanis: I would. Me and Joe.
Ayman Al-Abdullah: I mean, you guys are worth $5,000 an hour. Would you ever pay a bookkeeper $5,000 an hour?
John Melizanis: No.
Ayman Al-Abdullah: Exactly. So. But you literally were. That’s exactly what was happening before. You were paying yourself as a bookkeeper, 100%. And so, you know, it’s funny, you were mentioning just earlier, like, just the ability to like, course correct within 20 minutes. Like, I’m going to tell you, like, one of the moments, one of the closest moments I came to dying. I, I’m really big into hiking, mountaineering. I climbed half dome over 10 years ago. This Half Dome, Half Dome’s like in Yosemite. It’s this big mountain. 14 hour. It was 14 hour hike. We were, we were supposed to make it back. So we started about 2 in the morning. We made it to the, to Half Dome. We’re there at like 3 or 4 o’clock and we’re about to head back and we’re hopefully going to be making it back before sundown. But there was a girl at the bottom of Half Dome and she was screaming. She’s like, my dad’s up there. Has anyone seen my dad? And so we ended up like sticking around. We ended up linking up with some EMTs. The EMTs went up, me and my friend, we stayed with her. And he was like 70 plus years old. He was stubborn, refused to come down, kept climbing up the cables. The cables are like almost near vertical. And I guess he got up there and he got stuck and so the EMTs had to go up there, grab him and bring him down while we stayed. Because like literally at this point it’s. This mountain’s empty.
John Melizanis: Geez.
Ayman Al-Abdullah: And so we’re staying with her while the EMTs are going and grabbing her, grabbing her dad brings him down, finally connects her. So at that point it’s like five, the sun’s starting to set and it’s just me and my buddy Carlos. And so we go back. This is like 10 plus years ago. We, I mean our, we basically had cell phone lights. We were very underprepared. This was like early on in my hiking journey. And as we’re heading back, I mean to the point where we’re on cliff faces and we’re walking back like literally with our cell phone lights, like low power mode.
John Melizanis: That’s crazy.
Ayman Al-Abdullah: And like if you just step off, you would literally fall.
John Melizanis: Yeah.
Ayman Al-Abdullah: To your death. And so as we’re climb, as we’re walking, we’re heading left and someone comes back this way. And I just happened to ask like, hey, this is the way back to base camp. And they’re like, no, you turn, you need to turn around. You need to go this way. This way is going to take you through another 140 miles to the next base camp.
John Melizanis: Holy shit.
Ayman Al-Abdullah: And is already pitch black to the point where I couldn’t even see my face. And I’m like, thank God this person came in front of us and we were able to ask them this question. So he’s like, follow me. So we turn around, we follow him and he tells us go left. And we walk through the.
John Melizanis: It’s pitch black, pitch black to the.
Ayman Al-Abdullah: Point where I literally can’t see. I mean, I can go through the full story. There were. There, we were getting, there was mountain lion sightings at the time. So we were constantly like looking up in the mountains to hear because we kept seeing the rocks starting to fall. And I remember looking up like, because I kept hearing the.
John Melizanis: You can’t see your hand?
Ayman Al-Abdullah: I can’t see my hand. And I got a cell phone light. It was very underprepared, super stupid. Now I’m like much more prepared. And as I’m looking up, I see the rock starting to fall. I’m like, dude, there’s a fucking mountain lion following us. And as I look back, look up, I took my cell phone, I look in front of me and I see a giant animal in front of me. And it’s a freaking giant like 12 point buck right on the trail. This is like this skinny little cliff and Carlos jump, like hit, hit, like he didn’t realize what was happening. He like jumped and he almost like pushed me like towards the. And I was like, holy shit, dude. And luckily the buck went back up the. The mountain.
John Melizanis: What the.
Ayman Al-Abdullah: And so, I mean the whole point of the story is the best way to know about the path forward is to ask those coming back. And so when you think about the role of entrepreneurship in business, the only way we know up the path of the mountain is to ask those that have already been there.
John Melizanis: Yeah.
Ayman Al-Abdullah: And to your point, like a 20 minute conversation, a one question, is this the right path to the base camp? Could have honestly saved us from death for sure.
John Melizanis: Yeah. That’s nuts. That’s a crazy story. That’s real.
Ayman Al-Abdullah: It’s dead ass.
John Melizanis: What the fuck?
Ayman Al-Abdullah: Yeah. Yeah. And that was like one of like several things that happened that went very wrong on that particular hike. And so from there I’ve, I’ve completely changed my back. Back loadout.
John Melizanis: Speaking of like stuff going wrong too, I know we talked about in the beginning.
Ayman Al-Abdullah: Yeah.
John Melizanis: You had a story on like what was like the worst thing you ever did at Epson? Like, what was like the biggest mistake you ever made? Because I’m curious on that too. Because, like, you’re not perfect, obviously.
Ayman Al-Abdullah: Oh, I do. I made mistakes. Literally. I mean, look, my content often focuses on what worked well and is a direct result of all the things that went wrong. And so the reason I can speak to, to founders and CEOs is because I’ve literally made every one of these mistakes. I like, I am no, no better than anyone that’s in the trenches that’s dealing with it because I’ve made all these mistakes. And so I’m in the entrepreneur, I’m in the digital space, running a digital business. We do not deal in inventory. You guys are an ecom. You guys understand inventory. I am not. And so this is at the end of the year. I’m not managing the P and L at this time. This is why I asked. You have a bookkeeper. And so at this point, I’m just managing revenue. Right. Gross margins. We’re not hiring a lot. We’re not doing a lot. Noah’s like, hey, we’ve got a shit ton of profit at the end of the year. Great problem to have. It’s like we need to spend it. What should we do? Well, we just launched a new, a new business called Briefcase. It’s kind of like what we thought was going to be the future. It’s like Netflix for entrepreneurs.
John Melizanis: Interesting.
Ayman Al-Abdullah: So you pay once you get access to all these tools.
John Melizanis: Didn’t work out.
Ayman Al-Abdullah: Oh, I mean, it could have is there’s a whole nother reason. But the problem with that is, you know, we, we were validating it by buying the licenses from these founders and then as we would acquire subscribers, we would hand out the licenses. So Noah’s like, hey, we got a ton of profit, let’s spend it. So I drop a million dollars at the end of the year on inventory.
John Melizanis: On what type of inventory?
Ayman Al-Abdullah: Codes. Codes for the.
John Melizanis: Oh, so you paid all these like startups.
Ayman Al-Abdullah: Startups. Markups right up front. It’s like, hey, we’re going to buy 2,000 codes from here, 3,000 codes from here. So that’s. So then spend $1 million. Then I get a text from Noah on Thanksgiving, hey, dude, what’s this chart? What are these charges for? I’m like, what do you mean? You told me to drop this million dollars. And he’s like, there was a ton of miscommunication and immediately ended up realizing, like, did I just put Appsumo into bankruptcy? I spent way too much. There was miscommunication in both directions and I spent way too much.
John Melizanis: Have the million.
Ayman Al-Abdullah: I don’t know. I didn’t have full PNL visibility, so I don’t know how close to crashing this plane I got.
John Melizanis: Geez.
Ayman Al-Abdullah: But like, that was part of the reason I’m like, you need to get a bookkeeper. You need to have full PNL access, understand your cash flow because your cash is your gas tank. And I had no clue how close to. But it, I mean, the way we were both very concerned. I literally was spending Thanksgiving with my family, going over the P and L, going over our cash flow, seeing like how close we were to putting Appsumo out of business. And I was like, holy shit. Like complete miscommunication on my. It was 100% my fault because I should have been asking for more visibility, managing the full P and L. And so number one, I over invested in inventory. Number two, because I didn’t know inventory, I didn’t know about inventory turnover rates and conversion cycles. And so we had way too much inventory.
John Melizanis: I was going to say you bought all this and how’d you know you were going to sell it?
Ayman Al-Abdullah: Exactly.
John Melizanis: You didn’t.
Ayman Al-Abdullah: We didn’t. We had to do a ton of write offs the following year as a result of it, and probably 250,000. That’s a little equivalent of taking a Ferrari and crashing against a brick.
John Melizanis: Wall, you know? Yeah.
Ayman Al-Abdullah: Yeah. So, yeah. So, I mean, it’s. It was a very painful mistake that I made. Number one, almost putting the business out of business. Number two, overinvesting in the wrong things, quite frankly. And then number three, just not having full P and L visibility. And so my philosophy is, you know, like, you know, when I hear that from CEOs, I hear it all the time, and they’re like a. I feel like I’m about to put the company out of business. I’m like, you know what? Congratulations, You’ve graduated. Like, you’re not really CEO until you’ve cried over your P and L on Thanksgiving dinner. Like, that’s the joke that I give. And it’s like, honestly, like, it’s kind of like the trials and tribulations that a lot of founders need to go through for sure, in order to make it through C and L and actually take their finances seriously. Because up until that point, you’re making so much money that you’re just like, I don’t even need to look at my cash flow. I need to look at my P and L. It’s like, we’re just going to grow the business.
John Melizanis: Yeah, I’m curious too. Like, at that level of, like, app sumo business, stuff like that, like, kind of with that growth trajectory, what have you seen as, like, a big factor of, like, failure in a lot of these businesses too? Because, like, it seems like all the positive is online. Obviously all people talk about all the wins and, like, the revenue numbers up into the right stuff like that.
Ayman Al-Abdullah: Yeah.
John Melizanis: But, like, obviously a version of that is like you just spend a million bucks out of nowhere. But that’s also kind of like you guys are trying to think about growth, stuff like that, and instances where the businesses, like, was it times where the business didn’t make a whole bunch of money in profit? You’re like, well, I don’t know why the fuck it’s not working like. Like that too. Or was it always just kind of up and to the right? For the most part, I think that.
Ayman Al-Abdullah: Oftentimes people just think about the CAC to LTV ratios.
John Melizanis: Okay.
Ayman Al-Abdullah: And they just go, hey, let’s just spend as much as we can up into the CAC limit because our CLV is 3x. So for those that, you know, are brand new to the entrepreneurship game, Silva is your customer lifetime value. So let’s say your customer life and value is $300. Your customer acquisition costs, which is your CAC, it’s $100. And so it would seem normal If I can spend $100 to acquire a customer, I’m going to make 3x back of my money. And so why wouldn’t I just keep dropping a hundred dollars?
John Melizanis: Yeah.
Ayman Al-Abdullah: And so I see this is like one of the biggest mistakes that founders can make is they think that the a hundred dollar, the 3x CAC to LTV ratio means they’re, they have free reign to drop the hundred dollars. And so I’ll see some founders spend as much as they can to grow, but then they realize, like, oh, I’m, I’m spent. Let’s just say I spent all of this money in month one. But then they don’t realize that their CLV is actually over three years. So I’m literally pulling all of my cash, burning all of my cash up front, and I’m basically growing myself into bankruptcy and hoping that over the next two and a half years that this is going to pay off. And it happens.
John Melizanis: Cycles just so off, pretty much so off.
Ayman Al-Abdullah: And this is. So if you just focus on the ca, the CAC LTV ratio and you see a lot of gurus out there like, oh, that’s the only thing that matters. Yes. Until it doesn’t. Until you’ve grown yourself into bankruptcy. And I’ve seen several companies actually grow themselves into bankruptcy for sure. And it’s like things are just going up into the right. We’re going like crazy. They hire an ads team, they spend like crazy, and then they go, why don’t we have any cash? Why is there no cash in the bank? Why can’t I buy inventory for Black Friday? Oh, now I got to take out debt.
John Melizanis: Because you spent it all.
Ayman Al-Abdullah: You spent it all acquiring customers that have yet to give you the money back.
John Melizanis: Yeah.
Ayman Al-Abdullah: And so you have gone actually into the negative for this customer and you hope you get it back over the next two, three years. But guess what? You’re not going to be able to because you have no freaking inventory.
John Melizanis: So you want even be alive in three years.
Ayman Al-Abdullah: You’re not even going to be alive in three years. And so that’s one of the biggest mistakes that I see founders make, number two is, you know, making, making the wrong strategic decisions, which is, hey, you decide to launch something new. And so we talked about that, that founder focus. There’s a joke. Year one through year five, keep the main thing. Keep the main thing interesting. Founders in year six go on board. What’s. Let me start something new. And then in year seven, they go, let’s go back to the main thing. The main thing really?
John Melizanis: That’s a joke.
Ayman Al-Abdullah: All the time. All the time. And so I see a lot of founders getting that shiny object syndrome. They want to launch something new, and then in hindsight, they’re like, damn, I should have just stuck with the main thing. So that’s a. That’s a big mistake. If your goal is to grow the main thing, honestly, like, the biggest one is just maintaining cash. Like, you can recover from a bad hire, you can recover from bad strategy. The only. The only time you get knocked out in business is when you run out of cash.
John Melizanis: Yeah, that’s.
Ayman Al-Abdullah: That’s the. That’s the ultimate knockout.
John Melizanis: Interesting. Yeah, that’s a good way to put. That is the truth. If there’s no more money left, there’s no more.
Kyle Russell: Yeah.
John Melizanis: Anything left, it’s done. Yeah.
Ayman Al-Abdullah: I hope I can go get debt. I hope I can use credit cards. But it’s like, at that point, you’re. You’re. You’re pulling the emergency shoot way too late.
John Melizanis: Yeah.
Ayman Al-Abdullah: And you’re hoping that it saves you before you hit the ground.
John Melizanis: For sure. I’m also curious on the coaching, too. Cause I know you got into that recently. Not recently. Like, what, three years? Yeah, three years type thing. What made you kind of go into that? I know it’s a little different than what you were doing, but I’m curious, kind of what made you go into that? How’s that been? Stuff like that, too. Yeah.
Ayman Al-Abdullah: John, man, the plan wasn’t to do anything, right. It was, like, right off in the sunset and, like, sit mai ties on the beach.
John Melizanis: Yeah.
Ayman Al-Abdullah: The problem is, like, you know, guys like us, we get bored. So, you know, two, three weeks in, I’m like, sipping the Mai Tai on the beach. I’m reading the book, and I’m just like, this sucks.
Kyle Russell: Is this it?
Ayman Al-Abdullah: Yeah. Well, it was awesome. Day three.
John Melizanis: Yeah. Yeah.
Ayman Al-Abdullah: Day four, day five, day six, I’m like, all right. Yeah, party on. And by day seven, you’re like this. I’m done.
John Melizanis: Yeah.
Ayman Al-Abdullah: You know, and so you end up realizing, like, oh, like, if you enjoy the game, you enjoy the game. And so the question is, like, okay, well, what do I do next? And so I wasn’t ready to get back in the trenches, you know, But I opened up my email inbox, and I saw 400 emails from companies that had saw me step down, saw what I did at AppSumo, and we’re looking for a CEO, and I just wasn’t ready to take any of those opportunities. But a couple were from friends, and one of them was like, hey, let’s just meet up for coffee. We met up for coffee and we, we ended up, we, we chatted, talked through him and I. He ended up, you know, telling me, he’s like, Ayman, that coffee was one of the most impactful things for the business that I’ve ever, I’ve ever had. I’ve spent hundreds of thousands of dollars in coaching. This coffee by itself was way more impactful than all that coaching. He’s like, I don’t care what your rate is. Like, I need to hire you as a coach. I’m like, I don’t, I’ve never coached before. I don’t do coaching.
John Melizanis: Yeah.
Ayman Al-Abdullah: He’s like, he’s like, whatever it is, like, I’ll pay it because it’s so impactful. And so I was like, all right, fine, let’s, let’s try it. I enjoy, I enjoyed. I enjoy talking business for the coffee.
John Melizanis: Yeah.
Ayman Al-Abdullah: Yeah. Well, I enjoy talking business. So I’m like, sure, let’s do it. And then two months later, he introduced me to two more CEOs. And then all of a sudden, people started talking about me. My reputation started to grow. I’ve had several world famous founders and CEOs tweet about me, which just grows my waiting list even more. And, you know, so I’ve been very fortunate that I’ve got like, like, if you, if you watch them on YouTube, I’ve probably coached them. And so it’s been, it’s been an awesome journey.
John Melizanis: It’s crazy. Yeah, yeah, yeah, yeah, yeah. Well, I don’t anything else.
Kyle Russell: I was going to say, as someone who’s gotten more into the consulting space as well in the coaching space, it’s like, it’s something you have to love doing because it’s not, it’s not a very scalable thing. No, it’s, it’s, it kind of, it’s almost goes backwards on where you want to go in entrepreneurship because it’s all about kind of scaling your dollar per hour. And in most instances when you’re coaching, you’re diluting your dollar per hour because there’s not a lot of leverage involved unless you, you know, bring other people in the mix and hire other coaches, but then they don’t have the same experiences and principles and the teachings that you can provide. So it’s very interesting. You know, you kind of come at a crossroad there.
Ayman Al-Abdullah: I mean, you have to enjoy. I love it. I really. Because it’s an opportunity for me to be in the trenches without being in the trenches. Yeah, Yeah, I really enjoy it. You know, to me, I love the game of entrepreneurship. And I mean, to me, I’ve always been just a natural coach in general. I enjoy. I enjoy seeing athletes thrive. And so I enjoy the game. And to me, it’s not even about the money. I mean, honestly, like, I used to do it for free and I realized, like, nobody would listen. And so now I tell John on the right over here, I. I charge because when you pay, you pay attention. And so, like me, charging my premium rates is a feature, not a bug. And it’s because you’re paying that you take the meeting seriously and you take the advice seriously.
John Melizanis: Yeah, Yeah.
Kyle Russell: I was. I was. For one of my business, I was putting off running ads. And like, I’m an ads guy. I’ve been running ads for E commerce brands for seven years. I was just putting it off and I ended up just like, paying a guy for coaching. He was just like, yeah, basically just do the thing, you know, you needed to do. But now because you’re paying me, you’re actually going to listen to my advice. And so I did it and, you know, six weeks, got it to work very well.
Ayman Al-Abdullah: That’s right.
Kyle Russell: We’re still running it now.
Ayman Al-Abdullah: Yeah. It’s like, I have a personal trainer. I know how to work out. You know, I know how to work out. But it’s like the fact that I’m. And it’s funny, it’s like, not even that much. Like $100 for the hour.
John Melizanis: Yeah.
Ayman Al-Abdullah: The fact that I paid, I’m like, I gotta show up. Like, it’s like, you know, it’s just the fact that it’s on my calendar and I paid for means I got to get my workout in 100%.
Kyle Russell: Yeah.
John Melizanis: I think we got to wrap this up because we gotta.
Kyle Russell: Yeah, this is good. It was a very compact. And that’s all he is, super compact. Has all the concise.
John Melizanis: Yeah, yeah, yeah.
Kyle Russell: You got a big Twitter.
Ayman Al-Abdullah: Not really. Like 20,000.
John Melizanis: That’s big enough.
Kyle Russell: Pretty big. I got like 300.
John Melizanis: Do you want people to find you?
Ayman Al-Abdullah: No.
John Melizanis: You don’t. Right?
Ayman Al-Abdullah: I hope this episode gets like, four views.
John Melizanis: Where can people find you if you want them to find you?
Ayman Al-Abdullah: Don’t look for me.
John Melizanis: Find them online. I’ll tell you. Yeah, your free content’s really good too, though.
Ayman Al-Abdullah: I appreciate that.
John Melizanis: I know Even before we work together, even like that notion template that you have, like just the basic one that is free.
Kyle Russell: I love notion.
John Melizanis: Like game changer.
Ayman Al-Abdullah: I got a notion template for everything. So if you need if you need something notion related DM me, I’ll probably send you the template.
John Melizanis: Yeah. Literally anything. Like, yeah, hiring, firing, I got it all.
Kyle Russell: Sops.
Ayman Al-Abdullah: I’ve got over like 4,000 notion templates, so that’s crazy. Yeah.
Kyle Russell: I remember the first time I saw Justin Kemperman’s. He sent me something about like he was showing me on like a hiring process and I was like, this is so sick. And since that day, everything, I’ve just moved it over.
John Melizanis: I do think every company should have like a wiki notion. Yeah, like that, like the whole. I don’t know what you call it, but like I call it like a ship, dudes, wiki in a sense it just has all like pieces of the business. Game changer.
Ayman Al-Abdullah: Well, I have the free, so that’s. Yeah, I got the free one. It’s pinned on my profile. People want to grab it. They can.
John Melizanis: Yeah, cool. That’s about it.
Kyle Russell: Sweet.
John Melizanis: He has some more coaching. You can’t work with him at capacity. Yeah, yeah, no, but I appreciate you coming on, dude. I know this is a trip for you too far, guys. Shot whoever. Who’s sponsoring this one?
Kyle Russell: Do you remember Omnisend?
John Melizanis: Omnisend. Yeah, Omnisend, we love best.
Kyle Russell: Best email marketing tool for not only e commerce brands but other companies, you know.
John Melizanis: Yeah.
Kyle Russell: Like we’ve been using them for on and off for seven years now, since we got started. And they’re great.
John Melizanis: Very user friendly, 100% send you to all subscribers. Up to almost like 4K subs on this one. Yeah, yeah. TikTok’s big. Instagram’s big.
Kyle Russell: Just got a re. Monetized.
John Melizanis: Remonetized.
Kyle Russell: So if it’s pennies. But it’s, it’s funny, you know, it’s what it’s like, it’s like logging your wins on the whiteboard, you know, it’s just like, all right, you know, we got to get a dollar from this. Two, two here, three there.
Ayman Al-Abdullah: Is it for TikTok?
John Melizanis: No, no, no, no.
Kyle Russell: YouTube.
Ayman Al-Abdullah: YouTube. Yeah, yeah, yeah, yeah.
Kyle Russell: You’d think we were monetized on TikTok. We have like 70k. Yeah, but that was all from like one guy. But anyways, that’s the whole story.
John Melizanis: Anyways, appreciate you guys catch on that.
Kyle Russell: See you in the next one.
John Melizanis: Thank you later.