Types Of Business Models: Which Of These 5 Types Is Best For You With Greg Cassar
Related Episodes:
- 170. Ryan Deiss From Digital Marketer Reveals The 5-Step Conversion Funnel That Turbo-Charges Your Business Growth
- 055. Ezra Firestone on How To Use Ecommerce To Take Your Business From Six Figures To Seven
- 122. Shark Tank Judge — John McGrath — On How To Cultivate A Success Mindset And Build An Enduring Brand
- 001. Neil Patel (Kissmetrics Founder) On How To Make Better Decisions Around Client Selection, Branding and Investing
- 044. Hiten Shah — Cofounder of Kissmetrics — How To Assess If The Software As A Service (SAAS) Business Model Is Right For You
- 176. The Alter Ego Effect With Todd Herman
Ash Roy and Greg Cassar Video Transcript (This transcript has been auto-generated. Artificial Intelligence is still in the process of perfecting itself. There may be some errors in transcription):
Greg: 00:00
I’m kind of lucky now that I’ve achieved a higher level of freedom in my life at 44 then most people will ever really achieve in their lifetime. But when you talk about luck, I think luck can also be labor under correct knowledge. You can do things to engineer luck if that makes sense.
Ash: 00:25
Welcome everyone. Welcome to the productive insights podcast. This is Ash Roy, your host and today’s guest is Greg Cassar. Greg Cassar started selling online in 2003 after he left his fulltime role in 2009 which was in it in the corporate world. He left to run his own digital marketing agency, which specialized in traffic and conversion. Greg has invested over $250,000 in his education, has worked with 300 businesses and driven over 2 million leads. He’s responsible for over $500 million in online sales and has worked with some online marketing greats who have previously been on this podcast, including Ryan Deiss. In episode 170 and Ezra Firestone and episode 55. Greg is a master at performing split tests and has recently been doing a lot of work in the ecommerce space. So Greg has some great knowledge to share with us in terms of the various business models out there and what really lends itself to creating a life of freedom. So I’m delighted to welcome Greg Cassar from collective.com.au Welcome Greg.
Greg: 01:41
Hey Ash. Thank you very much for having me. It’s a real pleasure. I’ve uh, we’ve known each other for many years. I’ve always found you to be a stand up guy. And I was talking to another guy today, guy, so home and he said, Ash, he always comes from just such a place of giving. So I think that’s a, a true compliment that, you know, people talk about you like that. So it’s awesome what you’re doing with the group here.
Ash: 02:01
That’s very kind, Greg, thank you very much. And I was going to say that I’ve known you for about five years and I can honestly say it’s always been a pleasure. You’re a very down to earth person and very approachable and very honest. So thank you.
Greg: 02:15
You are welcome.
Ash: 02:17
So Greg, what are we going to talk about today is the different business models, particularly in the context of what we’ve seen happening of late, which is a little bit of a tectonic shift if you like. Amazon seems to have come to the fore and as Mike Rhodes said to me once, he talked about the four horsemen of the apocalypse and that was Amazon, Apple, Google and Facebook and we now are seeing some sort of a, maybe not resurgence but a progression of Amazon. There’s a bit of a groundswell happening around that. And Greg, you were saying to me just before we started recording that by 9:00 AM in the mornings you are pretty much free of all your commitments that you have to fulfill in order to be financially free every day. So clearly the ecommerce thing has been serving you very well. You have recently talked about how you’ve built million dollar business within 12 months in annual revenue. When I saw you speak at super fast business live, which was hosted by our common friend James Schramko. So let’s start the conversation there. And why don’t you tell us about how you see e-commerce evolving now and where do you see yourself in two years and how that’s played a role in your journey so far?
Greg: 03:37
Okay, cool. Well, there’s a couple of questions there, so why unpack that a little bit? Um, one of, one of the things like most people get into business as a way of creating, you know, a lifestyle. But I think ultimately most people actually really seek free to them. Whether that’s the freedom of choice of who to hang out with the freedom of where to live, the freedom what to work on, you know, that kind of thing. I’m kind of lucky now that I’ve achieved a higher level of freedom in my life at 44 then most people will ever really achieve in their lifetime. But when you talk about luck, I think luck can also be labor under correct knowledge. You can do things to engineer luck. That makes sense. So, like you mentioned, I’ve spent over $250,000 and I’ve been at it since 2003, so I’m like one of those guys where he got lucky, but I’m a 15 year overnight success or 16 year overnight success, that kind of thing.
Ash: 04:32
Greg, I interviewed John McGrath, the founder of McGrath real estate. I think it was an episode 122 and he actually said, you know, it takes 10 years to become an overnight success. That is so well said.
Greg: 04:42
Yeah, it’s very true. Very true. John, very, very smart guy obviously with what he’s built. So during that time, like we, I was in corporate IT then got into, um, got out of that by running an agency as you discussed. So cause I was selling stuff online and getting good success. My first business was propertybooks.com that I use. So I was selling books and courses about investment property, that kind of thing. And then we, and my business partner at the time, John and I, we did an exit there and we sold that. But I had a lot of business owners saying, Hey, could you help me with that? And so that’s why we started morphed up in, you know, running an agency, ran an agency for many years and learn a lot. What was great about that was the speed learning of like working in so many different businesses.
Greg: 05:24
So that was awesome. Then morphed into more of a coaching role. And then now we do a model called rainmakerpartner where we partner with Hiro businesses and scale them up exponentially and just take a small piece of the game. That’s kind of what we’ve been doing. But you spoke about business models and what we’ve found is that there’s, you know, business really comes down to a couple of main types of models is like a services business and there’s a information business is physical products, so E-com, Amazon, and then there’s software as a service and there’s also local as well. And what we found is like the further you head towards one way, the more freedom you can create. So cause really it all comes down to really, it all comes down to the leverage. So a local business probably has the, the worst freedom, um, like the lowest level of freedom, maybe worst is not the correct, you know, the correct word.
Greg: 06:13
Um, the lowest level of freedom, then a services business really is the second worst as far as the second lowest as far as like level of freedom because it doesn’t matter what you do in a local business or in a services business, you can go above and beyond, but you can’t keep everyone happy all the time. Um, and also the reality is that sometimes you’re limited by things like geography and stuff. You don’t have as much leverage or might be about your own time or your team’s time, but there’s not as much leverage. And leverage really is the key info business is incredible from a product point of view. You can, you might be able to build at once and sell it over and over again without having to Redo that product. Obviously certain times, you know, things change in the industry and you have to keep doing that.
Greg: 06:55
So Info can be amazing, but you’ve got to have something special, something different, you know, otherwise there’s a lot of people selling info and the price of Info can be going down, that kind of thing. So an example might be you sell certification with your info or micro continuity also works well like where it’s a annual program, but you can get the price of the annual for just a cost of a couple of months. There’s all different ways of making info work.
Ash: 07:19
And there’s just one more question though, Greg. Just with the info products study, you can also have products where you sell them as one off in the form of psychosis or you can have a membership site, which I had just recently launched and that may have a continuity element in there where you may supplement the information with some form of coaching or support for which people are paying an ongoing fee.
Greg: 07:41
Yeah. That that is a very good model. Whenever you can build that continuity that you spoke about Ash in that you know that that’s gold and then there’s ecommerce and Amazon. So I would put Amazon in with that. Amazon really just is another type of e-commerce, but it’s the biggest portal. Like if you look in the US 51% of all online sales happen on amazon.com so it’s a, yeah, it’s basically when you get that right, it’s like drinking from a fire hose. It really is incredible. And then the best business model of all I find is SAS. So software-as-a-service because there’s that saying that, you know, software is eating the world. If you can build a software as a service and then have your customers be using this, your service, and they’re dependent on it and there’s the software is in doing the delivery. Remember like we spoke about the local business or the services business, it’s you doing the delivery or your team. You can have software that’s obviously very leveraged bits and bytes. So info-product and like I said, membership as well as e-commerce, Amazon and SAS. SAS is ultimately the ultimate one. Those business models really can create a greater level of freedom. So the further I’ve moved towards, right? Yeah, that the more freedom that I’ve had in my life.
Ash: 08:51
And software as a service, is also a continuity play because you, you pay a recurring fee for the software. And some great examples of continuity both in information or entertainment I should say is, you know, classic example, Netflix and we saw an Apple’s recent announcement, three out of their four products they announced what continuity products, you know, Apple News plus, Apple TV plus, and I can’t remember the other two, but software as a service typically follows that continuity model. In fact, Neil Patel, who I interviewed in the very first episode of this podcast, I talked a little bit about that and then I had Hiten Shah, I think it was episode 44 who talked about software as a service and he’s actually very good at that. In fact, he might be coming back on the show again. We kind of talk about his billion dollar mistake at some point in the future. He wrote a great article about it, which I recommend checking out.
Ash: 09:42
I will link to that in the show notes. So, so we’ve talked about the different levels of freedom. You’ve got your local business where you’re exchanging time for money predominantly. Then you’ve got your services based business where you’re probably a little bit more at the premium end of the scale, but you’re still kind of exchanging time for money. Then you’ve got your information products business, which you can distribute or deliver as a transactional, a sale where you sell a course or something, or you can have a continuity play where you sell a course, but then you offer some kind of ongoing recurring value. I remember Stu McLaren told me this, you can charge an ongoing recurring fee as long as you’re offering ongoing recurring value. And so that’s where the coaching aspect comes into a membership form. And then you’ve got the software as a service and a e-commerce style business, which is pretty much set and forget provided you create the framework. Now there is one challenge with software as a service, and I, I’ve seen this happen a lot where you really have to make it to crack it, to make awesome software. You know, one out of every hundred software creators end up making it, but then once you make it and you’ve really made it, it’s a little bit like being a rockstar. Can you talk to us about that?
Greg: 10:57
It is getting easier now with like previously if you are developing a software as a service yet, well your first money had to go into hosting and servers and all that kind of stuff. Whereas these days it’s amazing technologies like Amazon web services where they really are. Do you have a whole bunch of services and you can just bolt them on and then use whatever you need. But I think you know to do that software as a service, you really do need a little bit of the tech founder. You need to be able to understand the technical side as well as the sales marketing business founder. That’s why I like a lot of venture capital firms want two founders involved. Unlucky, you know software as a service play now we’re working on in the early stages, but I’m lucky in that I’ve got a technical background and I’m a business and marketing type person.
Greg: 11:41
But yeah, so software as a service is amazing. E-Com also, but like you say, it does have that constraint if you really do need to understand that technical issues. E-COMM also has a downside, a constraint, which is, as you grow, you continue to have to invest in stock. So every time you get to invest in more and more stock. So yeah, you can actually grow yourself, broke with the, you know, with e-commerce as well. So that’s where you’re getting the smart financing and all that kind of stuff. So econ creates an amazing level of freedom, but especially during that growth stage, you’ve just got to make sure you have enough cash to keep going. Um, let’s can be yawning constraint with that.
Ash: 12:21
And that’s right. Growth has to be controlled and it has to be done in a disciplined manner. Otherwise the wheels can fall off and you may not even know it. Ezra Firestone did a great job. He grew from I think five to 25 million in 12 months, but I’m sure there was a lot of really disciplined monitoring of stock and inventory levels and cost per cost of goods sold. Putting my accounting hat on for a second here, but there was a lot of obviously discipline and rigor that would have gone into understanding the, the cash flow within the model.
Greg: 12:56
Yeah, absolutely. And also that I’m having multiple models complimenting each other. So like Ezra, he was my e-commerce coach for a year. Um, very smart dude. He’s got like software as a service. He’s also got info product, you know, that kind of stuff. So yeah, sometimes multiple of those things could be, might be funding the growth and while the e-comm, but the good thing about building an e-comm or a SAS as well is that it’s not just really the day to day running of it. You’re actually building a saleable asset. So you sometimes, in some ways, the most profitable thing can be at the end when you build to a big exit.
Ash: 13:31
Yes, yes. And I remember talking to Jeff Green about exits. It’s very important to build a business which is salable even if you don’t plan to sell it. Because when you build a business which can stand on its own without you as the founder, then it’s more likely to have better quality systems and it’s going to be easier to replicate within other areas in the globe. So if you have a yes, an operation in Australia, you can pop potentially replicated more easily in America. Well if you have good quality systems and a good model.
Greg: 14:02
I agree. We were talking about with the e-comm stuff, we start actually started with my business partners and I, we started with the US in that case even though I’m an Aussie just because it’s 10 times the bigger market. So right is seeing about leverage with that. Sometimes the same marketing effort but applied to a different business model or applied to a different market can get you a different result. So once you get it, cause one of the things that I learned from Russell Brunson was like once you get on a winner, sort of take the show on the road. Yes. Roll it out into other regions, whereas everyone always thinks I’ve got to find another winner. But sometimes you don’t like we’ve got winners in the E-comm space that we’ve now rolled out, you know, through the US and then Canada and Mexico and all of Europe and Japan and Australia. You know what I mean? That kind of thing. Rather than we still are adding new products in and hopefully you’re trying to find more new winners, but just take those winners and roll them out around the globe because that’s what’s exciting. You know, you think back traditional business, you set up a market stall or whatever and your customers were whoever went past that day. Whereas these days it literally, you can hit the whole globe. It’s an incredible time to be alive and it’s an incredible time to be an entrepreneur. I think.
Ash: 15:10
So you’ve touched on something that will be very useful to my listeners I think, and that is how to replicate success, particularly around marketing and sales from one discipline or one business model to another. Can you talk to us a little bit about that and how you’ve achieved? Have you used that to achieve the success that you have in the recent past?
Greg: 15:32
Yeah, so I guess I really, my background was a lot of services business and in particular though, like with the agency and stuff, but what I loved about that was speed dating. So I got to, by being an, agency or by being a coach, I got to work in software as a service and I’ve got to work on Amazons and I’ve got to work and I’m the sort of guy, they say like, can you help me with this? I’d look at it and figure it out. And even if I’ve never done it before, I’m like, yeah, yeah, we can make that work. And then, you know, just scramble like crazy to make it work. So that was kind of lucky in that I got to learn by working on other people’s businesses. And then that whole success leaves clues after a while you start to see these traits come through, you know, of what were successful business models or successful founders or CEOs, you know, that kind of stuff.
Greg: 16:15
and it was out of that, that I really then started to work on, well, okay, getting more e-comm going. So I want, I’ve, what I found was that the average multi-millionaire has multiple income streams. You know, the worst number in businesses, the worst number in business is one because one, if one thing falls over, then you lose the whole lot. So that’s where I always try to build like a three or four legged stool. You can have these issue of energy units where you just not giving anything enough energy to smash it out of the park. So there’s definitely a balancing act, but generally it’s good to have a couple of income streams. So, so if this one brought in 10 grand a month and that one brought in five grand a month and that one brought in five grand a month in this hypothetical situation, you know, you’re a 20, any one of those five brands all of a sudden dropped away from, you know, Google changed the rules or Facebook did or whatever.
Greg: 17:07
Then you’ve gone from 20 down to 15, you know, rather than, you know, lose everything back, that kind of stuff. So that’s why I have enjoyed having a little bit of e-comm and a little bit of stats and traditionally I’ve done a lot of services, but I’m probably not going to really do that much in the way of, um, services moving forward, to be honest, just not as, not as leveraged as I want. I think everything from this point on will either be info, e-comm or SAS. And then the other part of it is like taking two business owners, taking the money out of business and then focusing on it investing. Because I think a lot of business owners are guilty of just, you know, running the day to day of the business, but they’re not really thinking about, well, actually I need to be able to retire, say when I’m 60, 70, whatever the case is. Have I built a big enough golden goose? Then I’m going to then be able to live off the eggs of it without having to kill the goose, which is a different discussion altogether. But yeah, so I think after a while learning investing as well as a business owner, it’s kind of like the next evolution, that you need to be able to do.
Ash: 18:07
And that sort of ties into the idea that you want to build a business that you can sell and not just sell, you know, for break even. You want to build a business that you can sell that enable you to retire. So yeah, it closes the loop in a sense. Talking about building something that has an asset. That’s what I was looking for. Building a business that is an asset.
Greg: 18:31
You can have it all too, Ash. Like, I feel that you can have freedom. Like, you can build a, a freedom and a lifestyle business, but also build something that can, that can be, so certainly like what we were doing, we’re doing now, but I do get it like, so as far as there’d be people listening who are earlier on in their journey, say they’re still in the day job and they’re trying to get out of it, or they’ve just got out of the day job. And you know, at that point you’re really at the grind. You really just got to keep learning as fast as you can, implementing like crazy, you know, that kind of thing. So this is like what we’re talking about, about creating freedom and investing, then what’s left and all that kind of stuff. It might seem like it’s a long way down the track, but it’s good to know that that’s possible.
Greg: 19:11
But initially you’ve just really got to scramble like crazy because the one thing is, no one’s gonna do it for you. So, you know how I said I’m a 15 year overnight success. Heaps of people started at the same time as me, but most of them would quit. So yeah, really I think that resilience, I actually don’t think there’s, there’s not really that much special about me. Like don’t get me wrong, I’m not a, I’m not a dummy, but I’m not, I wasn’t the ducks of the class or anything like that. Do you know what I mean? But what was, what was special about me was I was willing to outwork the other guy. I was all go. I was willing to get out hustle outlearn when everyone else stopped learning, I kept going, I kept going and then when life kicked me in the guts, I just got up one more time after life kicked me in the guts and just kept going and going and going to that resilience and also that ability to say, hang on, this isn’t working.
Greg: 20:00
We need to pivot. You know, what’s next? And I think next is one of the most important words in business. You know what I mean? Because if you’re on a business model and it’s just doesn’t have the right level of leverage, you know what I mean? Then you might need to say next. And because I found actually in your life as an entrepreneur, you might start out off with a certain business model and then after awhile you realize you say you listen to something like this and then you realize, hang on a second, this doesn’t really have much leverage. It’s not really going to be a sellable asset. It’s not getting me where I want to go. Keep doing it. Right. But think about what is next and what is a smarter business model that I can move to. And you’re like, well over in our time from the day job to now we’ve like done those, you know, four or five of those main pivots. And it’s about constantly moving to where a better, smarter, more leveraged, business model. So that you can create that freedom. You can have, you know, ultimately build that golden goose as well.
Ash: 20:56
Cool. So let’s talk about some really important takeaways from this conversation that our listeners can implement and actually get some results if they’re looking to build a lifestyle. We touched on the different kinds of businesses and we talked about the business that affords you the least freedom, which is your local business, where you’re typically exchanging time for money. And then we talked about the services based businesses and the next progression. And then you’ve got your information businesses, which can be either recurring income based where you’re offering some kind of coaching to supplement that information or a transactional information business where you’re selling courses, that kind of thing. And then we talked about software as a service and e-commerce where you’re building an asset that pretty much sells itself or delivers a result without almost any intervention from you.
Ash: 21:44
and it’s becoming increasingly easy these days with Amazon servers and so on. You want to talk about the importance of having multiple income streams from all the people that you’ve worked with and you’ve worked with many of them. The ones that have been the most successful have been able to kind of diversify their time and financial investments, but not do it to the point where they are too diluted, but equally do it so that if one business is suffering, then the successful business can kind of shore up that suffering business at least for a period of time. But then also knowing when to cut your losses and to say, okay, this is not working. And pivot away from that. You also talked about the importance of persistence and spending your time in the trenches and we’ve seen all sorts of successful people do that, including Steve Jobs who had his second act after he was sacked from Apple.
Ash: 22:40
Yeah. And when he bought, when he became the CEO of Next and Next did a reverse acquisition of Apple, and that’s how he ended up becoming the CEO of Apple again, which may never ever happen again. But the point is, he spent years and years and years in the wilderness. So you have to be willing to do that. Maybe you’ll be lucky and you won’t have to do it, but be prepared for it. And then you also said something really valuable I thought, which was keep asking yourself what’s next? That’s an important question to ask. So that orients you a bit to the future and stops you from being myopically focused on the here and now. Yes, you need to be focused on the present, but you also need to be aware of the landscape and what’s coming in the future. And another important question to ask is, am I a single point sensitive? And the way you expressed that was, you said one of the worst words in businesses is the word one. So you know, one customer, one supplier, one business model, those things in your experience can be quite limiting and can be the kiss of death.
Greg: 23:42
Yeah, absolutely. I think that was a great, great summary.
Ash: 23:46
Cool. All right, so that was a great episode. Now, how do our listeners find out more about you, Greg? Is there anything else you’d like to add in this conversation? I mean, I look forward to having you back on again soon where we’ll be talking about more tactical stuff around e-commerce. Yeah. But what would you like to talk about in terms of strategy? What advice can you give our listeners?
Greg: 24:08
Yeah. So your first question was like where can people find more info? I think if you go to rainmakerpartner.io, that’s like our main website that has a blog on there. So between that and the collected.com blog, there’s video training that goes on and on for yeah, there’s a lot of time you could spend there. That’s just a great free training resource. I don’t really have anything to, I don’t really have anything to sell these days, you know, like as far as, well, yeah, what I’m doing, the other thing really is advertising boost.com which is soon to be called marketing boost.com. That’s where we give away free vacation incentives for business owners. That’s really going on. That’s kind of like the main ways to find us. I think, you know, what you summarized was just awesome. I think when it comes down from a business owner and entrepreneurial journey, it’s basically like, you know, where am I now?
Greg: 24:59
Where do I want to go? And then is it worth it? And so like, what’s my why as to what I want to do. And the why has to be greater than you. Like, so, initially it might be about money and that kind of thing, but after awhile you get to, like a greater purpose. So like for example, we do philanthropy and fund a school in India and all that kind of stuff. So there has to be a bigger, you know, a bigger why after a while and like, 100% of people want success, but maybe only 3% are willing to do what it takes to get there. So you gotta think about like, are you willing to do what it takes and when, yeah, it’s gonna get tough at times, but you keep picking yourself up. The ultimate prize is freedom and like, what’s the, yeah, what’s the value on that? Like, so I think, yeah, go for it.
Ash: 25:42
Yeah. Todd Herman talked about the importance of having a greater why in episode 176 either he talked about it on the episode or in his book, which I highly recommend. It’s called the alter ego effect, and I found it very useful, particularly if you are struggling through that wilderness period, you know, to be able to give yourself this alter ego, which you can kind of step into and not feel seduced or effected by what appears to be a failure. You know, you can keep positioning yourself as the superhero in your mind without being diluted about it and actually really activate your inner superhero to push past those really, really challenging times. And there will be many.
Greg: 26:26
Yeah, I love that. That’s great.
Ash: 26:28
Okay, well thank you very much for being on the episode, Greg, and I can’t wait to have your back where we’ll be talking about more detailed, actionable secrets around building an ecommerce business that delivers epic results.
Greg: 26:43
Awesome. Thank you for having me. Much appreciated.
