Cory Verner – The Business of Selling

Cory Verner [00:00:00]:
Like many entrepreneurs, we were happy to sell, but we sold way too early. And a lot of that was just kind of the way the company was structured and some other things that made it tough. I just didn’t feel like I could be there anymore. I mean, I was the face of the company. I really liked the company. I liked what we were doing. I didn’t want to not do it. I just was kind of forced into the sale and it was a little early.

Cory Verner [00:00:22]:
So I didn’t have the completely life changing exit where I could go and volunteer at the church for the rest of my life, which was kind of my plan. I had the one where I had to start another business, and now we’ve started three or four other businesses, and I’m having fun doing that. But I think I sold too early.

Dana Robinson [00:00:41]:
Exit Plan is a podcast for business.

Dana Robinson [00:00:44]:
Owners and those who want to be business owners.

Dana Robinson [00:00:46]:
I’m always in search of the lesser.

Dana Robinson [00:00:49]:
Known stories of entrepreneurship.

Dana Robinson [00:00:51]:
In the exit Plan podcast, you’ll hear stories from startup to sale and hear from the professionals who help business owners achieve their exit. Hosted by me, author and private equity manager, Dana Robinson, along with my co hosts and guests, you’ll hear real stories, tips, and tools that will help you plan for the exit you want, whether you are still working at a day.

Dana Robinson [00:01:15]:
Job or running a business.

Dana Robinson [00:01:17]:
Let’s get started with this episode of the Exit Plan podcast.

Dana Robinson [00:01:22]:
I’ve got my business partner, Corey Werner here. Corey was on the podcast like five years ago, and we got some of his entrepreneurial journey because he’s, as we’ll learn today, been through that cycle a couple of times and get a catch up because Corey is involved in some other businesses that have flourished since the time of the last podcast. With that, Corey, for those that are watching, I’m sitting in our video studio in my basement, and you’re sitting in our or your audio studio and you look mysterious. But the sound quality that’s coming out.

Cory Verner [00:02:01]:
Of that dimmed down. That was part of the goal there.

Dana Robinson [00:02:06]:
It’s not an interrogation room. This is part of Corey’s core business, which is recording audiobooks.

Cory Verner [00:02:11]:
And he’s gotten more reflective for the podcast.

Dana Robinson [00:02:14]:
Absolutely. So if you notice how good the sound is and how warm Corey’s voice is, that’s where a lot of thousands of audiobooks have been recorded in that studio. So, Corey, for the benefit of people who maybe haven’t heard the original podcast some years ago or don’t know you, I think your entrepreneurial journey is great and a fun story, and I talk a little bit about it in my next book because you had this sort of moment of paralysis where you’re like, I can’t open the door. So take us through kind of the existential crisis and on into the journey as an entrepreneur.

Cory Verner [00:02:52]:
Yeah. Let me start by saying your book is great.

Dana Robinson [00:02:55]:
Thank you. That means a lot coming from you because we know my first book was okay. I think I said, it’s a b minus. And you said, dana, it’s a c plus, and I’m being generous. So, yes, the king’s flyswater had a lot of know to the credit of Jeff goens as a consultant and coach know good. A fun part for me. For those that are listening, the audio was read in your studio where you’re sitting right now. But we had a voice actor read the ancient parable sections.

Dana Robinson [00:03:29]:
So that makes it a little more fun than just hearing me try and read something and make it interesting. You get me telling my story and my narrative interspersed with the parable. So thank you for the compliment.

Cory Verner [00:03:40]:
One of my favorite narrators read the Da Vinci Code and a bunch of other things. All the Dan Brown novels. Yeah, he’s phenomenal.

Dana Robinson [00:03:50]:
Thanks.

Cory Verner [00:03:51]:
Yeah. My journey, I’ll sum it up. I had my dream job. I spent ten years getting it. It was an important role. I was my early thirty s, and I thought I’d finally be there, finally have that career success that I was shooting for. And I was really unhappy. I was sick.

Cory Verner [00:04:15]:
I had an ulcer, which I haven’t had since. And it just kind of culminated with one day me trying to open the door to the office and standing there for I don’t know how long, but someone came up behind me and sort of like, gently said, hey, are you going in? What’s going on? This is my hands holding my hand out, wanting to open the door. Couldn’t do it. I knew I had to leave, but at that point, it was kind of like it all came to a head. I’d survived a couple of layoffs there, and I wasn’t going to survive the next one. Most likely that was coming down the pike. My kids were little. I wanted to be there for them.

Cory Verner [00:04:54]:
I wanted to see every tennis match. I wanted to go to every Boy Scout meeting or whatever. Those are the ideas I had. And so I was just decided I wanted to be an entrepreneur. I wanted to work for myself, and I didn’t care what the business was, what I would do. And so I had five ideas and I worked through them. And a budy of mine, Dave Bruno, said, hey, let’s do the audiobook one. I really like that idea.

Cory Verner [00:05:21]:
And I called you and said, hey, want to start this audio? Can you be know, would you help us? And called John, and that was the original crew. And we started an audiobook publishing company. Actually, we started a technology company, but we realized there were no audiobooks available to deliver as a download. So then we started a publishing company to make audiobooks, to make them available for download. But we were the only website up on the Internet selling audiobook downloads other than audible. In 2003, somewhere around there, media bay went out of business. It was just us, as I understand it. And audiobooks were pretty new at that point, and there weren’t that many that were being produced or were available.

Cory Verner [00:06:06]:
The market was almost entirely cassettes and libraries, and that was the start. And I left there 17 years later after an exit in 2016. So that was a long time I was there.

Dana Robinson [00:06:19]:
Yeah. That’s not the normal startup cycle, right? Normal might be three, four, five years where you’ve got some venture capital, you grow rapidly, you exit upmarket. It took us 13 years the whole time biting our nails as to whether we would pull it off and make it to that exit. And you had all your eggs in that basket and all your time. Let me just say we sold to a private equity group that then sold to a private equity group, and you stayed through the kind of phase up to the recap and through your non compete. What would you do differently? I guess. Let me just say you and I have commiserated on how we wish we could have had a much bigger exit. And we know, of course we could have.

Dana Robinson [00:07:16]:
But hindsight’s 2020. If you had it to do over again, two or three things that every entrepreneur could learn from that you wish you had done, that would have been a better outcome.

Cory Verner [00:07:26]:
Well, one thing I’ve learned since, and this is kind of a principle in investing as well, any kind of investing you’re doing, you sort of like, all of your gains happen at the very, very end of the cycle. So when something compounds and it compounds slowly, and then it starts compounding more rapidly. Right. So your last double, let’s say, of value in something is your biggest. And was it, Mark Twain said, the 8th one to the world, compound interest. I mean, that’s business in a way. And like many entrepreneurs, we were happy to sell, but we sold way too early. And a lot of that was just kind of the way the company was structured and some other things that made it tough.

Cory Verner [00:08:12]:
I just didn’t feel like I could be there anymore. I mean, I was the face of the company. I really liked the company. I liked what we were doing. I didn’t want to not do it. I just was kind of forced into the sale, and it was a little early and left significant amount of. So I didn’t have the completely life changing exit where I could go and volunteer at the church for the rest of my life, which was kind of my plan. I had the one where I had to start another business, and now we’ve started three or four other businesses, and I’m having fun doing that.

Cory Verner [00:08:42]:
But I think I sold too early, and I think a lot of entrepreneurs say that. Right.

Dana Robinson [00:08:46]:
I’ve seen plenty of people who a great opportunity to sell and market changes, and a year or two later, the value goes down. So there is always that. But that business was a very slow train. And in some ways, maybe that’s also an observation about the type of business that Machiavelli said, that a city that’s easy to take is easy to lose. From the warlord standpoint, and one that’s hard to take, you will never lose, because it’s very hard for you to lose it once you control it. And maybe audiobooks and publishing in general is a big city business. It is a business that once you reach critical mass and have penetration into the market and certain size and scale, it doesn’t matter if the market changes a little bit against you. It doesn’t matter if you lose a publisher, one big customer.

Dana Robinson [00:09:40]:
So holding longer, definitely, we know in hindsight it would have made sense. But also, it’s not like that business. By holding, it would have had some catastrophic thing happen to it where you just go, oh, I wish I’d sold the previous year, because now our revenue is down, or the multiples and the market on value are changing.

Cory Verner [00:10:00]:
Right.

Dana Robinson [00:10:00]:
I mean, look at what private equity did, right? Let’s just talk about what did the buyer do that we knew we should have done? Didn’t they, on day one, just get out of retail, say, stop replicating cds?

Cory Verner [00:10:11]:
It wasn’t that quick, but it was probably a year or two into it. The business was a pretty big line on the revenue, but on the profit side, it didn’t add much. And so, yeah, they got out of all that, which meant that a lot of our staff would be eliminated because we had a warehouse and we had five machines that were running 24/7 printing cds. And we did most of it in house because it was so much cheaper. Did a lot of it at a company in the midwest. But, yeah, they got out of that business rather quickly and then kind know, as most companies do, there’s a lot of consolidation. You don’t need all these. There’s a lot of duplicity or kind of duplicative people there.

Cory Verner [00:10:59]:
There’s people you don’t necessarily need two finance people, right, or two publishers always. So for us, they kept me at the end because the publishing was the most valuable part of the business, I assume.

Dana Robinson [00:11:13]:
Yeah. I often think of, at least in the bottom of the private equity market, the private equity operators tend to do what the previous owner couldn’t or wouldn’t do. By couldn’t. It’s usually money was a constraint, by wouldn’t. It’s usually just not making decisions that seem obvious to an outsider. I do remember when we were in the warehouse once before the sale, and I was looking around, and there was just a box of janky used, kicked around dvds or cds, I guess. And I was like, what are these? And someone said, oh, those are returns. So we weren’t really cognizant of how little we were making in retail because we weren’t really thinking about boxes full of returns coming back that we had to credit those retailers with.

Dana Robinson [00:12:04]:
And then we had a retailer go bankrupt. And there was a super smart decision that I think they made to just go all digital, all in on digital delivery and no circulating sort of hard goods.

Cory Verner [00:12:20]:
I think one of the advantages to that business was when you have IP that’s exclusive to you, if it’s good ip, that’s a very good business. And the audio business was an interesting one because you had publishers creating very good content and then licensing a sliver of those rights. And so you kind of derisked a lot of what you were doing because they vetted the author and the project and made a great product and then promoted it and marketed it. And then you sort of just had a little piece of that and wrote along the coattails of the publisher. And a lot of publishers since that time have realized that they need to have the audio as well, because there’s some synergy there to have it, and they don’t necessarily want to have someone riding on their coattails. So it’s much harder now to build a business like we did in the early 2000s because audio has now hit critical mass and people can, some publishers are doing it on their own. And so I know we’re probably going to talk about this in a bit, but as I looked at when I left, what should I do? I mean, it was very much a pivot to think about where things are going and how a new company needed to be positioned to take advantage of it. But to sum up, digital businesses with good ip, it’s a great business because once the product is paid for, effectively you have some mailbox money.

Dana Robinson [00:13:51]:
Yeah.

Cory Verner [00:13:52]:
You have to market it. You have a team, there’s expenses, there is some cost of goods sold, but it’s probably lower than other businesses, like service businesses, where you’re selling people’s hours and people’s time.

Dana Robinson [00:14:06]:
Right. Or production that’s heavy and intensive from a manufacturing standpoint, absolutely. Yeah. I guess in the sort of final exit, we also realized that even though we had some okay representation from the M A standpoint, I did the legal, so we had an acceptable lawyer. But I can’t say I was the best, probably the right size and expertise for the size of company. But we were told later that we probably could have added a million dollars in value by just having a better set of books where we had actually properly put things into gap categories. So for those that are the business owners that are like, someday I want to sell the private equity, get gap based accounting going now and then have someone else recast for taxes. That way you’re always running your accounting as if you’re an investor that wants an EBITDA number.

Dana Robinson [00:15:04]:
That’s an accurate reflection of the performance of the business and that’s the number that private equity will value you at. So we probably left a little meat on the bone there besides the time factor and besides kind of like still running some less profitable pieces of the business. But we exited to get there after many cycles of wondering whether we would make it too soon, too little, and lots of lessons learned. Here we are a decade later talking about it. You did work for the buyer for a period of time, so you got to experience, what do smart operators do? Good, sometimes smart operators do in a business, and some smart people that you’ve continued to stay around, well, you had a lot of choices after that to go, what do you want to do? You could have just started a skateboard brand or done something. You had some money, you had some time, talk about the next business that came out of your head.

Cory Verner [00:16:09]:
Well, I was cured of the temptation to work for someone else long ago. So I knew I wouldn’t work for someone else. It just, to me didn’t fit. It didn’t fit my core values, didn’t fit my even lifestyle, or I wanted the flexibility to do certain things and I knew an employer wouldn’t be able to do that. So I spoke with some different companies about a leadership role, but I wasn’t really serious about any of them. I don’t think I would have taken any of them. So I was thinking, it’s got to be another business. And when you’re starting something from scratch, I know that cycle, right? The first year, slamming your head against a wall, find a brand, find an idea, solidify it, maybe get a real customer.

Cory Verner [00:17:03]:
And then year two, you’ve got some money coming in, but everything’s sort of touch and go. And then year three, it’s like, we have a business, but maybe you can’t pay yourself. You’ve got staff now, so you’re not doing everything. And then year four and five, you have a solid business. And if you get to that point, I think you can feel pretty good about the fact that it’s going to last. And as long as you’re sort of looking out and thinking long term and you don’t screw it up by just looking at today. And I knew that cycle and thought, okay, do I want to shorten that a little bit? If I can. And the way to shorten it was to do what I already knew how to do and talk to all the people I already talked to.

Cory Verner [00:17:49]:
And of course, when you leave a company, you can’t take anything. And I did a good job for them of locking up content. When I was working for them, I was all in for them. I wasn’t working for myself, I was working for them. So now I’m competing with myself. Sometimes I kick myself.

Dana Robinson [00:18:04]:
Because you got them really good deals on content that you wish you could get now.

Cory Verner [00:18:08]:
Sure. And so I was like, okay, this makes sense. I know how to do this. I know what this could look like. And so we turned a five year kind of cycle of having a solid business where you have a lot of staff and you’ve got synergy and momentum and stuff. We turned that into three years. Right. So I cut two years off of that cycle, which to me, I think was worth it at my age, having spent already 25, 30 years in the workforce.

Cory Verner [00:18:39]:
I was like, I don’t really want another ten year cycle. I still liked the work I was doing, the publishers I was working with, a lot of the relationships I had, I wanted to continue those. And the best way to do it was just to sort of keep doing what I was doing, but just reinvent the business.

Dana Robinson [00:18:56]:
Yeah. I mean, you stepped into, well, stepped into your new business with relationship capital in the extreme. I mean, you’re a leader in the audiobook general market. You’re a leader in the christian publishing market, you have expertise in all the technicalities and sort of the product itself. And in running that business, you’re able to step back and sort of go like I have. All these assets are not only worth saving two years, but they’re worth millions of dollars in terms of what someone else would have to pay to start a business and suddenly have all those things that you had nurtured over the years. And it is sort of the story of, like, both entrepreneurs and employees can do this, can’t they? I mean, it’s a different approach when you go to a conference and you’re just going to be like, oh, woe is me. I’m an employee.

Dana Robinson [00:19:50]:
I hate my job. Or you go to that conference and say, like, I’m going to dominate this conference. I’m going to get to know everybody. I’m going to get on a board, I’m going to get on a committee, I’m going to perform. And you did that for yourself. Then you did it for the buyer, which was really, you were an employee that was like a cold blanket a little bit to sort of be back. But you did it. You still performed for them, took your leadership in those kind of environments and in those industry groups and gave them credibility.

Dana Robinson [00:20:20]:
But all the while, you get to continue to kind of own your reputation, your relationships. So what a great way to come out of the gate. I think you were about to say something about this, reinvent how you approach the business in a way that maybe people didn’t have visibility into.

Cory Verner [00:20:42]:
That’s one of the challenges of starting a business, is your first year. You sort of fumble around and do a bunch of pivots to figure out what it is and what it should be. And so that’s why the concept of the minimum viable product, especially with software, is so important, because we’ve all done it. I’ve built up pieces of software that I thought I knew everything. And then you realized, wait a minute, this has to be completely redone. And by that point, maybe you’re wanting to get out of that business. So, yeah, I think having an understanding of the pain points in the marketplace and an understanding of where these shifts were happening in publishing, in particular, new media and audiobooks helped me to sort of think, okay, well, where’s my role in the marketplace in 2019? It’s not the role in 2003 when I started originally. Right, right.

Cory Verner [00:21:32]:
Publishers didn’t care at all about audiobooks then. You could buy anything you wanted. You should have just bought more. And just, people were getting rights in perpetuity at that point, for some of the deals were forever. Because if you want to do an audiobook, yeah, all right, if you want forever rights, I didn’t do any of those. I don’t think that was a really fair way to run the business. But fast forward and everybody thinks audio is important. Most publishers are trying to figure out what to do with it.

Cory Verner [00:22:01]:
And so we wanted to leverage our expertise to help publishers provide more of a flexible offering. They could keep rights and have us do all the heavy lifting, consult cast produce, which includes getting everything mastered and prepped perfectly for the distributor, then distribute and then have a sales team and then have marketing apps. So that was kind of my idea was a full service, like one place. We named the company one kind of one place, but also for publishers to come. Like our niche publishers can all come at the market as one. I just had a meeting with the largest retailer who’s trying to figure some things out with us because we’re coming with 1500 titles, not 100 titles. And so the one idea was, hey, I can help our industry. A lot of people I know in our industry come at this with scale and be able to produce some software and some options and deals that maybe we couldn’t put together if we did this all separately.

Cory Verner [00:23:06]:
That was one piece of it. And then also a flexible model, like, hey, we have these three models. We can coplish, you can be the publisher, we can distribute, or we can be the publisher. And we’re about the publisher as much as we distribute for someone that we’re running this program for. So really it just allowed us to help some of these publishers make the transition that they were trying to make anyway, away from just giving these rights away and then having no control over them. And that was kind of the model. That was the idea. And what we did was we said, here’s our idea.

Cory Verner [00:23:43]:
And we talked to people that we knew in the industry and went to the conferences, and within a year we had about 20 clients and within two years we had about 40 clients. And then three years we had about 60 clients and we were shining exclusives and things. It worked out actually beyond my expectations, but it was just that flexibility of saying, I don’t have to figure out what this is day one. I think that’s important for entrepreneurs. If you come in and think you have to have the perfect idea, you don’t unless you’re working in an industry and you know a bunch of people and you have real customers and clients and you’re signing deals and making money. You don’t know exactly what you don’t know, and you don’t have necessarily the exact business you’re going to have. You don’t have the idea. I remember I was about a year into the publishing company when I was like, that’s the idea.

Cory Verner [00:24:38]:
Because I was just learning the industry and learning the market. That’s the idea. I can buy these rights to popular evergreen books and own them for the next ten years or something to exploit them. Once I realized that that was the idea that we doubled down on, we wasted a lot of money initially on.

Dana Robinson [00:24:55]:
Stuff that wasn’t the idea 20 years ago. It was a completely open market to go buy rights for affordable advances and recoup those rights, the advances quickly. And your new model came at a time when all the publishers started to think, well, why am I giving you these rights that are so easy to distribute? I don’t have to use replicators and make cds and distribute them. So, hey, we want to own our rights. So what they started doing about the time you started one was to start to question the model of this traditional publisher of audiobooks owning all these rights, when they could just say, we’ll own them. We’ll publish these. And so they came to you and just said, you have studios. Can you produce this for us? And for the right economics, of course, you were able to say, easy, I’ll be your producer.

Dana Robinson [00:25:49]:
I’ll bring in talent, project, manage this. And then, of course, once they have the book done, they’ren’t in the distribution business, even though it seems easy. So then you’re able to offer distribution services. Right?

Dana Robinson [00:26:00]:
Dana Robinson here. Quick plug for my book, the King’s fly swatter.

Dana Robinson [00:26:04]:
You can see it here behind me. If you’re watching this, I’ve got it in my hand.

Dana Robinson [00:26:07]:
It’s a beautiful hardcover book, printed to.

Dana Robinson [00:26:11]:
Make it giftable, something that you can share with a family member buy as a gift.

Dana Robinson [00:26:16]:
So this latest book, it’s a fable about a person who has a really crappy job. Let’s just start there. This is a book that most people can relate to because we’ve all had crappy jobs.

Dana Robinson [00:26:27]:
This is the story of Ubar, a.

Dana Robinson [00:26:29]:
Servant in the court of a babylonian king who masters his boring, monotonous job and then learns to listen to the king, hearing him rule the kingdom while quietly swatting flies behind the king. Eventually, Ubar becomes the wisest and most successful man in the kingdom. The story is fun and it’s easy to read, but it’s not mythology. It’s my story. And as I shared the idea with colleagues and friends, I learned that it was their story. And guess what? It’s your story if you’re at a job of any kind, one that you love, one that you hate, one that’s just enough to get by. This little book gives fresh perspective on how to leverage that job to get you something greater than a paycheck. The lessons in this parable are entrepreneurial lessons, but not what you might think from the current entrepreneurial zeitgeist.

Dana Robinson [00:27:26]:
If you or someone you know are looking for a real pathway to entrepreneurship, here’s the secret. Your job is the way out of your job. It’s counterintuitive, but once you see how it works, you can’t unsee it. Learn the way of the fly swatter from the parable of Ubar and from the stories I share from my 30 year business journey. You can get a free copy of.

Dana Robinson [00:27:50]:
The King Slicewater by going to danabrobinson.com.

Cory Verner [00:27:54]:
There’s a lot of friction in casting. I mean, we’ve spent the last four years building our database because obviously we had no database. We leave and we’re like, well, we got to build our own database. And it took us years of talking to narrators every single week to build that. So casting is really important. That’s your probably most important thing. And I’ve run a production company for a long time, which I was allowed to do even when I was working for the other entity. So casting is big.

Cory Verner [00:28:24]:
A lot of friction. Most publishers get that wrong every time. And once you get burned a few times, you’re like, oh. And then the whole production process requires special expertise and staff and can get really out of hand if you don’t know how to manage costs. And then distribution is harder than you think because you got to provide onyx feeds to all these people and get files there, and there’s a lot to the distribution piece. So there’s a lot of friction. For if something’s 10% of your business or something, you can’t really hire a whole team or to create a whole division around it. You might as well just say, let’s let someone handle this until it gets big enough to do it ourselves.

Cory Verner [00:29:02]:
And so we always told publishers, eventually, you’ll probably want to do this yourself, but let us help you for now, and let’s navigate this together.

Dana Robinson [00:29:08]:
Yeah. And you started looking at what your publishers, who, once they have an audiobook, weren’t doing, right. You have all these publishers, they pay you to produce, then they are paying you a fee to distribute, and then they’re not getting sales. And so you had this idea about creating software that allowed the publishers to really leverage and control their audiobook instead of just dumping it into audible and hoping for the best or letting it get streamed on Spotify. Your idea was, why shouldn’t they also control that as a marketing tool, as a sales tool? So talk through, because you started that. And then I got to jump in and partner with you on it about a year and a half ago, but you had incubated that for the year before that.

Cory Verner [00:29:56]:
I knew the gaps in the industry. I knew the problems that people have launching audiobooks, because I had marketed audiobooks for 20 years. And there are some significant gaps in audiobook marketing and launching books. And as it relates to the audiobook and just even the margins that you get from audiobooks, there’s a bunch of problems, big long list of things that publishers had. And so we wondered if there wasn’t a way to solve all those problems with a simple piece of software. And I felt really strongly about the business plan when I sat down to write it in, let’s say, 2020. And I started thinking about what this would be, and I felt like pretty strongly that this was the best idea to add. I’m like, this is a great idea.

Cory Verner [00:30:46]:
I should do this. And we just launched it as a minimum viable product, as a super simple. We spent two weeks developing it, we tested it, and it was really successful with the authors. We tried it with. It was basically, we did a short term giveaway on an audiobook, and it allowed the author to build their list, and it allowed them to sell more print books and connect with their audience. And basically it was just a success. And so we thought, okay, this is a good idea. And we, we decided to pivot and make a full piece of software, which we’ve, along the way, as we’ve grown the team, we’ve even pivoted that.

Cory Verner [00:31:30]:
But it really, the original idea is the software that we’ve built, and what it does is it lets authors and publishers sell at the highest margin, control their content, create audio first products. So you can basically make a product from scratch without publishing it anywhere else. And you can remodeize content. You have like podcast content, do short term giveaways for preorder campaigns to give to your launch team so they’re more engaged and more apt to review, run a reviewers program. It sort of solves all these pain points, and it does it in a simple way, a really kind of elegant way where you can go in and set up products and set up promotions very easily, and then they can be given to the consumer to go listen in a frictionless, elegant way. So it’s a great idea. We’re just launching it. You’ve been involved in it, obviously.

Cory Verner [00:32:23]:
It’s called Zoundi. We tested it in our one environment with a lot of faith based publishers, and we’re really excited about this. And as we talk to authors and publishers, they get really excited, like, yes, we need this. They may not need all ten things Zandi does, but they might need three or four or five of them. And they could be significant in terms of bringing more revenue, more reviews, doing better launches with their print book, selling more print, increasing margins. I mean, those are the things we all need as content providers, authors, publishers.

Dana Robinson [00:32:59]:
Right? I’m a good case study, so I’m one of the dozen or so authors that will be part of this launch. And if you’re listening, this is a commercial for both products. So as an author, I want to get people to preorder my book. It helps cover the cost of getting the book made if I can sell a couple thousand copies. And it helps give the book some early life if I can get a surge of pre orders. So I want people to go to Amazon, get the king slice water, buy the book, right? But then if they do that, they can come back, drop their order number in, and I’m going to give them free access to the full audiobook in Zoundi. And that means that while they’re waiting for the book to ship, they actually can start listening to the full audiobook. They don’t have to get it on audible.

Dana Robinson [00:33:46]:
It costs nothing because I’m giving it away as a book promo. And the environment, the tool, the app functions just like an audible style app where you can listen to it in a browser. But of course, if you want to be offline or on an airplane, then the app lets you have a library of those things, like my book, that I give you for free. And authors really often have different motivations than just making a few bucks on their book. Authors want to get more speaking gigs. They want to do more coaching and consulting. 90% of the authors that are out there are not really making a living from book sales. They’re making a living from the thing that they do that their book is pointing to as an expertise.

Dana Robinson [00:34:30]:
So the sounding model is to say, hey, another disruption in publishing. This allows anyone who controls their audio content to really distribute it widely. Because up till now, if someone said, I’ll give you a free audiobook. They probably had to send you a link to a Dropbox or to a Google folder and say, go push play. I mean, it really was that. There is no tool that we know of that allows an author to just say, here’s my audiobook for free, or here it is for cheap, or use it as a promo or anything like that. So if you’re listening to this and you have not yet pre ordered my book, please do. You can go to danarobins.com.

Dana Robinson [00:35:14]:
There is a banner flashing right there in the front. It takes you to the landing page with instructions on how to order the book on Amazon for the print book, which is going to be really beautiful, cloth bound, embossed with hand drawings that I had done on the chapters and kind of giftable and elegant and fun for the price. And you’re going to get a free audiobook as a result of that. And you’re going to get it on Zoundi, which is the business that Corey has birthed out of his book platform. And I’ll do one more commercial. If you’re listening to this, we are talking to investors. If you’re a professional investor and you like the Zoundi business and think that investing with us sounds like a great idea, then email my team. It’s actually, hello@danarobinson.com? Hello@danarobinson.com? If you want to just say anything, I get a digest every day and scroll through it and respond to people.

Dana Robinson [00:36:12]:
So we’d love to hear from you about it.

Cory Verner [00:36:15]:
I’ll interject. If we’re talking about businesses, right. I think one of the decision points when you start a business is not all businesses are created equal. Not all businesses have the same potential. Not all businesses will create the ability for the kind of flexibility and lifestyle that many people want when they create a business. And so if you’re going to rank businesses, a lot of times solopreneur businesses are effectively a job where you have a little more flexibility. Right. And then a step up from there would be a service business where you have employees, but they’re fairly low margin because your employees are very expensive and you’ve got a lot of moving pieces, a lot of stuff that can go wrong, a lot of liability and risk.

Cory Verner [00:36:58]:
Right. And you move up to content. Right? Like this is where all the info product people get to. It’s like, I can be a solo guy, but the business model is I’m selling something digital. I own exclusive rights to it. Then you step up from there as maybe something where you’re owning IP that’s more significant, right? Like you’re a label or you’re a publisher, like we were or something, right? For me, software is the 90 out of 100 fail business. But if you get the right idea, and that’s why I’ve been really wanting for a long time to find a really good software idea that can be really significant in our industry. And if you are thinking about a business, don’t start with software.

Cory Verner [00:37:43]:
All of us tried that. It’s a good way to lose a lot of money, make a lot of mistakes. But I think it is the best business. I mean, you look at what are the businesses in the world with the highest margins and highest market caps, right?

Dana Robinson [00:38:00]:
Yes. And the M and a world, like the M and a world pays a very high multiple and they pay a multiple on revenue. I talked to a VC fund manager randomly because I was at a private equity conference, and there’s some hedge and VC people there. She said they pay ten times the annual recurring revenue in terms of their valuation model. And I just thought, well, that means.

Cory Verner [00:38:28]:
You have a certain amount of growth, right? You have to have significant.

Dana Robinson [00:38:30]:
You have a business that’s making $70,000 a month and growing. You might be a $10 million company, but there’s a graveyard of software, attempted software. In many markets, only one or two survive. In my opt out book, I talk about letter pop, because that was a venture that you started with some smart people and you just got crushed. Constant contact and mailchimp, you had a great product and a great idea. The software was elegant and too little, too late. And you had hundreds of thousands of dollars in cash, plus a couple of million in your time over a two year period, and you can’t compete with 100 million dollar backed businesses in the same space.

Cory Verner [00:39:21]:
You bring up a good point, Dana, the niche. Right? I mean, we can’t have a conversation about business without talking about niche businesses. Yeah, I think that email delivery and things, newsletters, these are a little more commoditized now. Right? So it’s not a really niche business. I mean, if we would have done it for military people or something like that, maybe, but we didn’t. We were competing with constant contact. That’s sort of a no no from day one, right? If you’re in a commodity business and you’re trying to compete, unless you’ve got about 50 million in the bank, you want to burn to try it or something, I don’t know what the number is. But the other thing, can I say one more thing about any kind of business, don’t borrow from friends and family.

Dana Robinson [00:40:10]:
Yeah.

Cory Verner [00:40:12]:
If you’re watching this and you’re thinking about starting a business, I never did that. I borrowed from my own house when I started and so did my partners. And if you don’t have a house, just go read the $100 startup. Chris Gilbo right. Over the years, I’ve run into a lot of people borrowed from friends and family, and it’s almost every time been something that has been disastrous for those relationships. Just don’t do it. There’s probably other little nuggets we could give right from the 20 years of getting up, but that’s one.

Dana Robinson [00:40:46]:
Yeah, for sure. We’ve taken investment from friends and family, but they’re usually people who we know have adequate resources to invest. It’s a small portion of a portfolio and they know we’re busting our butt to do everything we can to make it a success. So I’ve been involved with businesses where there’s some friends and family. Our fund has taken money from our network. But I mean, you have to be a qualified client, which is like a pretty high category of high net worth to invest. But yeah, if you’re in your very first startup, your very first thing you’re doing, you need maybe one person that believes in you who isn’t going to go broke by backing you or partnering with you. But yeah, shaking the tin cup to all your family or borrowing from family that you may not be able to pay back will just make you resent yourself and them when you fail and have to pay it back.

Dana Robinson [00:41:44]:
Right. Or don’t pay it back and ruin the family holidays. Yeah, but, yeah, we’ve dodged those bullets. But I’ll say since I do have friends and family in some of our ventures. Thank you. We love you and appreciate your investments and trust in us and hope that the return comes in the future.

Cory Verner [00:42:00]:
Well, I mean, I feel like I have enough confidence to ask friends and family to invest in Zoundi and have. Right. But I think, like you said, someone’s not cashing out their four hundred and one k and they’re 75 years old or something. It’s going to change what they eat for breakfast or something. What else about the story of our publishing ventures and or Zoundi do you think? What other nuggets of wisdom would you want to provide people?

Dana Robinson [00:42:36]:
I hope we’re doing the right thing by doing an MVP on our own dime. For example, taking early investment on an idea, it’s very common. There’s a bunch of incubators and accelerators. And I think maybe they’re good for somebody who’s right out of college or not gone to college and starting their first venture. But for an entrepreneur who wants to feel confident when they finally do take investment, we’ve spent two and a half years your year and then our year and a half together with soundy, nurturing that product every month, doing a capital call and saying what are our expenses and what’s our budget for the next month? And so we’re seeding the business the way founders should seed, in my opinion. But it slows it down a little bit.

Cory Verner [00:43:26]:
Yeah, you’re not going to go fast to market.

Dana Robinson [00:43:28]:
A lot of times that that’s, there’s a mantra in Silicon Valley, fail faster. Right. So when you’re a vc, you’d rather have that go fast and know whether to write it off and be done. But from the entrepreneur standpoint, that’s catastrophic if it’s your life and you’re betting on it. So there’s some tension between the build deliberately on your own capital and take on capital early and try to grow fast. I can’t say that we’re doing what’s right for everybody. I think it’s right for a niche where we have domain expertise. We’re kind of the old guys in the room now.

Dana Robinson [00:44:12]:
We have the relationships with publishers. We have a good team. Right. We’ve sort of got what we need to push through an MVP and then to say, to invest into the investment community. We think we’re ready to share some equity in this business and now scale it using that which will be derisked to some extent for them. But through that cycle, we could have woke up one day, woke up, woken up one day and said, oh no, look, someone else has done it.

Cory Verner [00:44:41]:
Well, let’s talk about some of the reasons. I think this could be helpful. Let’s talk about some of the reasons why Zoundi and why now. So I think it is a niche business, right? We’re in publishing, that’s a niche, right. We’re dealing with authors and focused even on really serving independent authors. And we’re even kind of like starting with self help, self development business as kind of a core. So we’re really practicing what we preach in terms of the whole riches are in the niches idea. So you know who your potential partners are, you know where to advertise, you know, kind of who to have as an affiliate, whatever it is.

Cory Verner [00:45:26]:
I mean, it really directs and focuses your activity. And any money you’re spending and everything. So I think that’s one thing that we did. I think we knew the industry well and started something that we knew didn’t just solve one issue, but lots of issues. I think that’s helpful because you need some optionality there. You don’t want to be like, your software does one thing and you find out people don’t want that one thing. I like presenting to. I’ve probably talked to 100 authors about this, and as I explain it to them, every single one says, yeah, I would want that because of this.

Cory Verner [00:46:02]:
And it’s not always the same thing. One guy said, I wouldn’t need that because I’m killing it on my advertising strategy I have. And then he called me back like two weeks later. He’s like, I was thinking about your thing. I’m interested. Go talk more.

Dana Robinson [00:46:18]:
Right.

Cory Verner [00:46:19]:
So if you’re wildly successful, you don’t need to solve these issues. Obviously, maybe you don’t need it, but spending the time to talk to a lot of authors, test it out, try an mvp, then try a full blown product that you build. And we wanted this site to be frictionless where there was no mobile apps. You just go right there and you’re listening. Those progressive web apps don’t really do everything customers expect. So we had to build all the native apps as an example of a pivot that we had to do. And that added a lot of time, about a year of development and time and a lot of expense. But we felt like at that point, it was the right idea to wait to launch the business until we had those.

Dana Robinson [00:47:06]:
Yeah, I think that was a good decision. But you’re right. We were ready to go to market with a progressive web app.

Cory Verner [00:47:11]:
That’s right.

Dana Robinson [00:47:12]:
And then we thought, there’s nothing worse than getting a customer which has a cost, and then having them have a bad experience, which is what happens when someone might be on a safari browser that you didn’t think someone still used. And when they use it, it’s janky on the player. And by building an app now, we are sort of stepping into that world where we’re trying to build something that people will compare to audible. And that means it’s really gotta, really got to work, right?

Cory Verner [00:47:43]:
That’s right. No, they do. I think our iOS version is on version 149 right now. And most of those were not public. Only a couple were public things that we updated the app, but we updated it with our testing team over a period of a year to get it just right. I think that’s important. I would say the other thing is I talk a lot about the timing. For anybody starting a business, your real success is going to come five, six, eight, even ten years.

Cory Verner [00:48:16]:
Like, the whole idea of the ten year overnight success, people are like, how did you do that? And it’s like, well, I’ve been doing this for ten years. Every day I put my head down for 10 hours a day, and that’s how it happened or something. And one other big transformational thing for me in business has been narrowing down your focus and priorities and then time blocking, like just basically knowing the most important thing that has to happen for your business or within the business to grow it, to break through that barrier and just time block out and just spend your time doing that and ignore almost everything else. I think that’s something that’s really, that was really transformational in the Krishna audio business, was I spent a lot of time trying to figure out what would make this whole thing easier. And once I figured out what that was, I spent a couple of years on that and it just exploded the business. And so I think you don’t want to be in the business doing a bunch of work, right? The whole e myth idea. You don’t want to do it, do it, do it. You want to be in the business, thinking about the business, working on the business, creating structures and creating processes and things that can help you build a business that scales beyond you, that turns into, as Gerber would put it, an enterprise that can happen without you being involved and can happen in every state and in every country, and you can scale it to something that goes far beyond you.

Cory Verner [00:49:44]:
And that’s really where you get the benefits of a business. The flexibility. Maybe some people won’t do it for income. Some people do it because they’re competitive and they enjoy that aspect of it. Whatever reason you’re doing business, I assume you want to spend more time with the people you love. That’s probably high in your list, and you probably don’t want someone telling you to do things you’re not good at and that are not your strengths or begging someone for a raise and things like that. Those are the reasons we start businesses. And a lot of that stuff, the five years you spend, you’re going to spend five hard years working for somebody, right? They’re going to want their pound of flesh from you every day, every week, every month.

Cory Verner [00:50:31]:
So you might as well just do that in such a way that provides the kind of freedom that you can have so you can live the life that you want. You can serve causes and projects and like I said, my goal was to serve at church or in a ministry and give away half or all of my time there by 55. And that was a big goal for me. And spend my early when my kids were little, spend as much, show up for everything. Those are my two big goals. It doesn’t have to be complicated. I didn’t actually have financial goals. That probably would have helped me.

Cory Verner [00:50:59]:
Oh, I want to make this much money by this date. That probably would have helped me. If that’s your goal, then you nail that down. I would recommend you always do that, actually.

Dana Robinson [00:51:12]:
Yeah, well, we’re entrepreneurs raised by wolves and we’re sharing our journeys with people for their benefit. But I love that with Christian, I. Before we sold it, it was at a stage where it was an enterprise and could have been a business that had smart people that we didn’t have to be there all the time to run. But we were raised poor kids and blue collar and needed an exit, needed to cash out, needed to go separate ways from some of the partners. And for you to take all that and then build a foundation business that is hitting that stage where you have great people that can run the business, that enable you. Your kids are grown and they’re involved in the business, so that’s cool. Instead of going to soccer games, you’re launching a startup with. Levi is part of our founding team.

Cory Verner [00:52:10]:
One of the three investors?

Dana Robinson [00:52:12]:
Yep, he is one of the three founding investors. So I think it’s fun that you’re able to have rebuilt a business that can act as an emeth business platform, supply your family’s needs, while you and I and our partners are launching a crazy startup that we think has got real legs because it’s not necessarily do or die, and we’re in a space that’s totally aligned with what your primary business is. So it’s sort of a great way to get to something that I’m sure when we exit that business, someone’s going to think we were geniuses, but it’s the culmination of 20 plus years of expertise.

Cory Verner [00:52:55]:
Well, I think you’re a good example of trying to get better all the time. You’re curious. You’re a consummate entrepreneur, right? You’re always trying to get better. You’re always learning something new. Like I said, you’re curious. So those are some of the traits you’ve got to have if you don’t want to be making the same mistakes and banging your head against the wall 20 years later. So I’m really grateful to have been able to be involved in these ventures and maybe in another one of these podcasts, we could talk about a couple of the other ventures that we’ve been working on that I think are equally exciting. I don’t know.

Cory Verner [00:53:28]:
I’m going to say if you can be an entrepreneur, do it. It’s creative work. It’s fun work. There’s something new every day. As Dana put it’s like you’re going to a knife fight every day, though. Didn’t you say.

Dana Robinson [00:53:43]:
Combat? Hand to hand combat every day. Well, until it is, until you emyth your business. And as you know, you hit that inflection point where you’re like, okay, I got good people, I got a little bandwidth for this startup, and then you can start going up from there.

Cory Verner [00:53:58]:
Yeah. Hey, well, thanks for having me on, Dana.

Dana Robinson [00:54:01]:
Awesome. Thanks, Corey, for taking the time. Appreciate our friendship and our business partnerships and fun to share them with the people that have been following us and Nate and our various friends and colleagues in our network.

Dana Robinson [00:54:14]:
Thanks for joining me on this episode of the Exit Plan podcast. I’d love to hear from you. Feel free to hit me up with questions or comments by emailing me at hello@danavrobinson.com or leave comments and questions by calling 858-252-7785 call 858-252-7785 and leave a message. Close.