Podcast: How to Love the Journey Scaling to 7-Figures and Beyond
Episode Summary
In this episode of the Free to Grow CFO podcast, host Jon Blair and guest Clay Banks discuss the realities and misconceptions of starting and scaling an e-commerce brand. They explore the importance of enjoying the entrepreneurial journey, learning from failures, and the significance of simplicity in product development and marketing strategies. Clay shares insights from his entrepreneurial journey, including the rapid success of his brand GloriLight, and emphasizes the need for creativity and authenticity in marketing. The conversation also touches on the role of faith in entrepreneurship and the best practices for raising capital.
Key Takeaways
Simplicity in product design leads to faster market entry.
Invest in creativity to drive growth and attract investors.
Understand your North Star metric to guide your business.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Clay Banks- https://www.linkedin.com/in/claybanks/
Free to Grow CFO - https://freetogrowcfo.com/
InPaceLine - https://www.inpaceline.com/
GloriLight - https://glorilight.com/
Meet Clay Banks
Clay Banks is a seasoned entrepreneur and growth strategist with a proven track record of bringing ideas to market and scaling them to success. Over 23 years, he has co-founded or led eight companies, raising more than $7 million in seed and venture capital. Specializing in go-to-market strategy, Clay has successfully launched over 23 hardware and software products, driving their adoption across direct-to-consumer and B2B channels.
In 2022, Clay achieved a successful exit, selling his equity position in HavenLock—best known for its appearance on ABC’s Shark Tank and features in Forbes, TechCrunch, and Entrepreneur—to a venture capital firm. Today, Clay focuses on advising and investing in early-stage startups and short-term rental properties, leveraging his expertise to help founders navigate growth and achieve market fit.
Passionate about enabling visionary entrepreneurs, Clay offers mentorship and consulting in growth strategies, eCommerce scaling, and operational excellence. Outside of business, he’s a five-time Ironman, published author, and dedicated advocate for turning big visions into impactful results.
Transcript
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00:00 Introduction
02:14 Clay Banks' Entrepreneurial Journey
08:25 The Pursuit of Freedom in Entrepreneurship
19:17 Scaling GloriLight: Lessons Learned
27:07 Simplicity in Product Development and Marketing
27:33 Validating Product Assumptions Quickly
29:24 Lessons from Past Failures in Marketing
32:53 The Importance of Authentic Content Creation
37:34 The Journey of Content Creation and Its Purpose
38:45 Best Practices for Raising Capital
44:09 The Role of Purpose in Brand Success
51:35 Faith and Control in Entrepreneurship
55:07 Closing Thoughts
Jon Blair (00:01)
Yo, yo, what's happening everyone? Welcome back to another episode of the Free to Grow CFO podcast where we dive deep into conversations about scaling a DTC brand with a profit focused mindset. I'm your host, Jon Blair, founder of Free to Grow CFO. We're the go-to outsource finance and accounting firm for eight and nine figure DTC brands. And today I'm here with my buddy, Clay Banks. He's had his hands in so many things. I wasn't exactly sure.
how to introduce him, but as of today, he is the founder of GloriLight a growing e-commerce brand, and he also runs a coaching business called InPaceLine, kind of a strategic growth firm that helps accelerate visionary brands. He's got a much more extensive background than just that, which I'll let him tell in a second, but Clay, thanks for joining, man. How are things going in your world today?
Clay Banks (00:53)
Glad to be here, Jon. Today's Cyber Monday, so things are going good for us today. Our plan is working as designed. I'm able to take time away from those busy hours of e-commerce hype season and come be with you. So I'm glad to be spending our time today together.
Jon Blair (01:10)
Ha ha ha!
Yeah man, call this, at Free to Grow, we call this the eCommerce Super Bowl, Black Friday, Cyber Monday weekend, and there's like so much build up to it, so much prep. Most brands have been prepping for not just weeks, but months, and depending on lead times, maybe back in the early summer, starting to plan out purchases, and so it's definitely an exciting weekend for the eComm world, but look, thanks for joining. This, this, we're gonna chat about today is honestly near and dear to my heart. I've kind of coined it realities and misconceptions and lessons learned of starting and scaling an e-comm brand. Now I will say the concepts we talk about today, there's gonna be plenty that are more universal to just business in general, right? Starting and growing a business, but as we always do, we'll be chatting about specific examples and strategies around scaling an e-comm brand.
But the bottom line is, you know, I'll just come out right at the beginning of the episode letting everybody know, what we're here to talk about is that at the end of the day when you decide to start and scale a brand, it's all about loving the journey that you're on, honing the craft, not necessarily getting to an end point. And we have a lot of stuff to unpack around this subject today and I'm excited for the conversation. So before we dive into chatting about that though, Clay, walk us through your entrepreneurial journey. It's extensive.
And walk me through it and how you got to where you are today
Clay Banks (02:49)
Yeah, I first kind of got my first bug, so to speak, when I was a sophomore in college. I went to the University of Tennessee back in 2001. I got it right here. I keep it right here on my desk. I published this book called A Voswalk. It's a compilation of fan stories about how they became a fan of the University of Tennessee. And that was back when Amazon was just a bookstore. Put yourself back into 2001.
Jon Blair (03:16)
Hahaha
Clay Banks (03:19)
People still bought books at Borders Books and those types of brick and mortar stores. Back then, crowdsourcing wasn't a thing, wasn't even a term, but we went out to tailgates across campus and we crowdsourced stories from people. And we published those in the book and got the rights to put the power T on it and got the color orange, which was patented, and sold them across the state. And every Books-A-Million Borders book, Sam's Club,
Walmart, Walgreens, all across the state and had three business partners. Still very dear friends with those guys today.
And after selling an entire couple of football seasons worth of books, we looked at our bank account and there was no money there. There was no profit margin. And it was a tough lesson learned. When we sold the book for 20, it cost us about $9 to print it, but we sold it to distributors, the bookstores, for around 11. So gross profit was really around about a couple bucks, but by the time we paid gas and marketing expenses
Jon Blair (04:09)
Hahaha
Clay Banks (04:30)
and we had enough for a couple burritos after that. But really fell in love with the idea of entrepreneurship and the idea of controlling my own destiny and not having a limit on my potential. I carried different jobs. I worked different economic development roles, recruiting companies to the state. Through that, I was always reading books or listening to podcasts about entrepreneurship, about raising venture capital, about scaling up brands, about building teams. I'd started a handful of companies that that never really got out of the gate. I started a mobile web development company that built mobile websites for Blackberry phones. So if you can remember back when you had the Korty keyboard, we built websites or small micro sites for Blackberrys. We built, I did a tech transfer company out of the University of Memphis. Never got the first dollar of revenue with that one.
Jon Blair (05:22)
Hahaha.
Clay Banks (05:40)
It took a handful of kind of getting up to the plate and striking out to kind of really understand what entrepreneurship was about. And then in 2014, I partnered with a guy and we invented and patented a home security product that could detect and prevent home break-ins. And this was a very complex product to make. was metal stamping, powder coating, injection molding, firmware software, electronics that communicated over to an Android and iOS that communicated to Google and Alexa and then ultimately we spun that product into a product that we sold into schools to prevent active shooters from getting into classrooms and that one we raised at the time when I left the company about seven million dollars in capital from about 90 different investors and you know, a team of about 13 people growing that business. So yeah, that's a little bit about my journey. Shark Tank, season 10, yeah, go back, one of the most watched episodes, I think in the most shared episode of all time. We can get into that if you want to.
Jon Blair (06:42)
And Shark Tank, don't forget, don't forget, don't forget Shark Tank.
That's actually how we met. Well, the funny thing is that's actually how we met when I first started. So Clay has a very tight connection to the beginnings of Free to Grow CFO actually. I first left Guardian Bikes, another Shark Tank company, and I served, in addition to the CFO role, I served the business as the COO. And I was out just networking, calling on my network literally a few weeks into having started Free to Grow.
and was talking to another fellow Christian who was like, hey man, you've got to meet this other guy. He's out in Tennessee who, and that was Derek or, depending on who you're, who, how you know him, Derek or William, I believe. And he lives, I believe on Clay Street. And I told him my story. I told, I told Derek slash William my story. And he was like, and it included Shark Tank being a COO. And he's like, you have got to meet my friend Clay.
Clay Banks (07:33)
Derek, yeah.
Jon Blair (07:54)
who was a founder of a Shark Tank business and he was the COO and he's looking for his next thing. And so I met Clay just a couple weeks into having started Free to Grow. And so that's one of the reasons I'm so excited about this conversation because we just hit it off immediately with just, I mean, effectively just sharing stories and ideas and thoughts about the right and the wrong way to think about scaling a brand. And even got to work on a project together, a brand called Curb Cover.
that was really exciting and a lot of fun. okay, there's a couple things that you mentioned in your background that I want to kind of like dive in on. One is this concept of like freedom and controlling your own destiny, right? I always say, talk about this a lot in my content, that like, why did you get into business in the first place, founder? Usually the word freedom, or the idea of freedom, is somewhere in there, right? That's like, that is the entrepreneurial ideal.
is that I'm gonna pave my own path and I'm gonna be free to work on the things I want to work on and hopefully become financially free through my business, right? And so we at Free to Grow, we work specifically with profit-focused e-commerce brands. there's this tight connection between being profitable and being able to control your own destiny, right? What are some of the things that come to mind when you start thinking about freedom, entrepreneurial freedom, and either where you see that go right or you see it go wrong.
Clay Banks (09:27)
Yeah, I've taken 23 plus years to kind of really realize this, that I'm more passionate about the process of...
doing the work it takes to build something bigger than yourself. The result, well at first I started out thinking about the result, about the finish line of what that would look like when we exited, we IPO'd or whatever the dream was. I can tell you it's always gonna be something different than what you expected. And I kind of just began enjoying the process it takes to get a brand to, know, to...profitability and then to, you know, first revenue and then profitability and the first one it took a good seven years for us to really hit a good stride in revenue and then when I sold that company the next one I started, company called GloriLight, was much faster because the lessons that I had learned in the previous one were
there weren't many headaches, weren't as many, you know, where to go. know, most of the path was at least figured out for that business and it got to profitability much faster, it got to scale much faster, albeit it be a simpler product, but...
To me, I just love building something bigger than myself and enjoying the process. I'm a five-time Ironman. you know, ran down the red carpet five times in different countries here in end in the US and I wouldn't do that if I didn't like training every day, every week, you know? And I enjoy the process of getting, the finish line is what everybody sees. It's the stuff that people don't see that I enjoy.
Jon Blair (11:12)
for sure. Well, yeah, you know, it's funny.
Totally.
Well, you know what though, if you study any part, like quote successful person, this could be an athlete, it can be, you know, someone like Warren Buffett or Mark Cuban, you know, presidents, like you, if you study someone who you admire in terms of their accomplishments, you know what's the common theme that you find behind all of them? They were all like super obsessed with the process, with the journey, right?
and the outcomes of accomplishment and success, that just ended up being the results of being obsessed with the journey, right? And I'm a musician, I'm a heavy metal musician and like heavy metal guitar players are like the best guitar players in the world in my opinion. And when I watch some of them play, I can get this feeling of like, man, where did they find, where did they learn these shortcuts from?
And when I go and I watch YouTube videos or I read articles about these guys, you find out they practice 12 hours a day for years, right? And even to this day, they maybe don't have to practice 12 hours a day anymore, but they still have to maintain, right? They have to maintain, they have to always push themselves. And so if you are just living, in my experience, if you're living for the end, that's when you experience burnout. Because what you do is you push yourself to these,
unsustainable limits, right, going, this will pay off when I reach the end. And you realize you don't know if you will reach the end, when you'll reach the end, or what the end will even look like. And so if you want to be sustainable, you've got to just enjoy the process. Do you agree with that? And do you have anything else to add to that?
Clay Banks (13:04)
know, a thousand percent. When I first started Haven Lock back in 2014, my business partner and I kind of both agreed, okay, this is like a 10-year plan and we were gonna put everything we had into it for 10 years, but our vision was this big elaborate like IPO slash
Purchase buyout by another company where we would we would all go and we would rent out a big room and you know all of our investors and friends and family would be there and we would have a nice dinner and that was kind of the the dream right, but when when when I sold my portion of that business I sold it to a venture capital firm when the money hit my bank account and I was done and I'd signed off on all the papers and everything was I was completely divested of that company
I looked at my wife on the couch, we had a glass of wine and we're like, it's done, cheers. It was not that big. That thing I'd built up in my mind was this big event. And ultimately, it was still a successful event, but I got to share that with my wife, but it wasn't what I was planning. That's okay, right? And now looking back, it was those...
Jon Blair (14:00)
Yeah
Clay Banks (14:18)
You know, I was working two jobs. I was working for the state of Tennessee recruiting companies. It was my full-time day job. So I was getting up at like four or five in the morning to work on this company and then work until about seven or eight in the morning, then go to that job and then come back and then work until sometimes midnight working on the company. And fortunately, I don't have to have that kind of cadence and rhythm now, but
There's something to be said about what's done at dark is brought to the light, right?
It's those things that you do when no one's looking and the consistent reps that you have to put in You mentioned like playing the guitar You've got to learn those skills and those skills never really go away so that They just compound on each other you get better you get faster You get better at making decisions you get better who you pick to work with like that's another big one for me It's like I can now
Jon Blair (15:08)
Totally.
Totally.
Clay Banks (15:18)
decipher like character traits a little bit better than I could early on. So yeah, these all take, you know, reps and practice to learn those skills.
Jon Blair (15:31)
I'm actually not, I'm not exaggerating at all. I'm getting the goosebumps right now because I'm a lifetime entrepreneur just like you as well. And these lessons that we're talking about, this is the life of an entrepreneur. And like to me, this is what lights me up, right? Is like, hey, even though I haven't had that end all be all, whatever, liquidity or monetization or exit like event yet, right?
I'm growing as an entrepreneur and I'm becoming wiser, right? And the thing that's hard, here's the thing that's hard. I want everyone listening to this to just like for a moment, like free themself of the burden of like, of the idea they have in their mind about what their life and their business is supposed to be like. Cause the reality is, and I'm speaking from a place of like pure vulnerability right now, we get down because we don't.
We can't reconcile where we're at today with this lavish idea we have in our mind as entrepreneurs. And it's so hard because you go out there and you're like, I mean, you get on LinkedIn or you get on Twitter, you see the content, you read the books and you're like, damn, all these guys got to figure it out. They're freaking crushing it. Like look at Mark Cuban, look at freaking Warren Buffett, look at Kobe Bryant, like any, look.
Clay Banks (16:49)
any of the middle micro-influencers out there that are, it's a perceived thing that they got it overnight and those people earned it and it took them a long time to get there and most people can't justify that.
Jon Blair (16:53)
Totally.
Totally.
And to this day, but I'll even say, and I know I'm just gonna go out on a limb and just say, I know you feel the same way. We still question ourselves every single day. Like every day I'm like, man, I'm not good enough. Every day I'm like, what's Free to Grow? And like in reality, we serve 31 brands. I met Clay less than three years ago, I had one client. We have a...
Clay Banks (17:26)
was gonna say, there's like one or two.
Jon Blair (17:28)
We have a team of 10 people that are all amazing and the founders we work with are awesome and like, I bet you next year we'll be at 40 clients, maybe even more than that. And I'm not saying that to brag, I'm saying that like, we are succeeding and every day I wake up and I'm like, man, what, is it enough? And like, where am I failing, right? And so I'm saying this because I want, if you're listening to this episode, you're listening to this episode because you're looking for tools and tips and tricks.
Clay Banks (17:44)
Is it enough?
Jon Blair (17:58)
to do a better job of scaling your brand. And right now I just wanna free you and say, just keep going, just stay in the game. Be willing to say, it's only a failure if you don't learn from it, right? And failure is an event, it's not a person, it's not you, it is an event. And here's the beautiful thing when you're ready to finally embrace failure, is you can say, hey, that event failed.
that thing failed, that decision failed, that product failed, that ad campaign failed, but I'm alive and I'm gonna live a fight another day and I can sit down and I can say, okay, what went right, what went wrong, and what am I gonna change? And if you do that, I've got on my screen here in my notes, Clay started eight businesses, six failed. Six out of eight failed, right?
two became million dollar plus brands and the most recent one, GloriLight, which Clay basically just started, that one happened the most quickly, right? Like years and years into the game after failing, right? And so where I'm leading with this is like, Clay, let's talk about GloriLight, an eComm brand that reached seven figures faster than any of your other businesses. Walk me through just the first things that come to mind, the learnings from your previous business failures that allowed you to start this business so much more wisely and achieve that scale and profitability so much more quickly.
Clay Banks (19:27)
So let's dive deep here. When I looked at GloriLight and the idea behind it, first of all, it's a kids night light that projects.
Bible verses onto the ceiling. Okay, and it's got this little tray that you put in these these discs and it it shines a light through the film onto the ceiling. So it's in high definition. When I first got this idea from a business partner Matt, I looked and said, how fast can we get to an income producing product? Right? And before, my whole entrepreneurial journey before, it was like, let's build a product that people would love, but we overcomplicated it. We made it too complicated. It took forever to get to market we had to have it connected to apps and all this other stuff, all this extra bells and whistles that really the core value of it was preventing a home from being broken into. So my now learning is how fast can I get something to market that adds
Value to someone without being too complicated. could have we could have made this way complicated We could have tried to create an app that works with it We could have tried to create a community of people sharing Bible verses and and teaching their kids We could have tried that right? But no, let's just try to first get out the light as fast as possible to start, you know gauging The opportunity and I think a lot of times entrepreneurs have this big vision and they try to have it all ready before they go to market and you have to kind of really start with what you think is the magical power that you have in that product or that idea that really provides that desired outcome that you want people to have and get to market much sooner. So with GloriLight, we were revenue positive within the first probably maybe 60 days, 58, 60 days. And the reason it took that long was because we had to order the product and have it manufactured and shipped here, right? I think we could have gotten it done sooner, but the first one, took me about four and a half years.
It's a big difference. Yes, it's a different product, but now I'm looking at when I'm coaching other entrepreneurs, it's like how do we strip out all the bells and whistles and focus on the one thing that just makes you unique? Let's start with that.
Jon Blair (22:09)
Really quick, I want to draw something out here and then we'll keep going on the lessons that you learned that help you to get Glorylight started and scale a lot faster. There's a financial concept here that you're drawing out or that you're dancing around that I want to just explicitly say because I see it a lot with the dozens of brands that we work with and the other dozens of brands that I talk to and we don't end up working with, which is that when you're sitting down and you're designing a product,
Right? One, it has to truly start with meeting a need. Right? And you're talking about like that one thing that like drives value to the consumer so that they'll even want to vote yes for that product with their dollars. Right? But then there's a second thing that I think, I think it's more intuitive for founders to go like, I get that. Like, let's get some revenue traction. Right? But the second thing is, and this ties back to the simplicity piece of what you're, what you're walking through here is like,
Is there enough margin in this product for it to even make sense to scale it? Right? Like you may get revenue traction and at the price point and you're looking at your variable costs, there's just like no money to cover marketing. Right? And even if there is, there's knowing what your cack.
like the range that your CAC is going to probably sit in because you can't really affect that too much. There are just CAC bans at certain spend levels, right, for the most part. Can those even be covered by the unit economics of your product? And as you get more more complicated, right, there's more and more risk that that's going to drive more and more variable cost, which is going to leave you less and less on a unit economic basis for dollars to cover marketing. And then hopefully, cover more than marketing. Cover overhead and drop profitability to the bottom line. what have you seen using GloriLight as an example, like being more simple, what has that done for your cost and your margin structure for the product?
Clay Banks (24:12)
First and foremost it allowed us to bring on affiliates or content creators to tell our story. we were starting this brand, we sell to moms and grandmoms. Okay, that is our core demographic. 100 % moms and grandmoms. Guess what? I am not. I am not a mom or a grandmom and neither is my business partner Matt or my business partner Brett in this company. So we had to say, okay, who's going to be the face of the brand, the marketing, the outward position of the brand, right? So we had to make it so simple that any mom or grandmom could get the light and understand what it does, and so they could talk about it. We have over almost 400 affiliates now that are creating content on our behalf and sharing it on their social media accounts. So that is reducing our customer acquisition costs and our marketing spend, but we do supplement that. But if we were to try to create all of that on our own, that message wouldn't be as simple to come across. if we like with going back to the Haven Lock days.
We thought it was important for us to be a tech focused product, meaning it integrated with Alexa, it integrated with Google, it integrated with Android and iOS. It had digital keys and you could share encrypted keys and get a schedule when someone comes and goes, right? And all of our branding and all of our marketing was around the tech features and it was falling flat. Well guess what? People didn't care about that. People wanted to sleep safe at night.
especially women whose husbands traveled, right? And they were gone. The women wanted to be safe at home with their kids. So we repositioned the brand about being safe, about protecting your kids, having peace of mind and safety. And that's where our marketing took off.
when I say go to that one thing that has the value, find that one thing, right? And for Haven, it took us a long time to find that. And once we did, that's where it unlocked. But if we would have started there, we would have gotten to profitability, we would have gotten to better marketing earlier on than we did. And sometimes entrepreneurs, especially first or second time entrepreneurs, They want to build this big grand vision that's too complicated for people to understand right now. They can't really see it because they don't know that one thing that it's about or the value that it brings. we try to now coach brands to identifying what is that magical power that separates you from the others, right?
Jon Blair (26:57)
Yeah.
Well, and another thing too, excuse me, is that the more complicated it is, even if you can get the consumer to understand it, the more complicated it is to manage operationally. And the more complicated it is to manage operationally, oftentimes you see that that affects profitability negatively, right? Because it's so complicated. You have manufacturing challenges and issues.
There's probably just higher costs overall in your bill of materials. And so I think what Clay is getting at here is like, if you're trying to launch a brand or even just launch a new product, right, within your existing brand, figure out how to get something simple that really tests your assumption around what is that one thing. Get it to market as quickly as you can because the only way to really validate it is to get actual consumer feedback and the best way to do it is to try to sell it. But I see a lot of brands make big mistakes where they'll launch a big product and they'll do a big product launch and they're excited about the product. They're personally excited about the product, but they haven't validated what kind of traction it's going to get. And they order this big lot of it, right? It arrives. They do this launch campaign.
And if it flops, they're stuck with all this inventory and all this cash tied up in inventory. And now all of a sudden they're slashing prices, right? And so like they've, they're completely diminishing the value of the product. so, you know, just what, what Clay is talking about here is very practical advice for how to think about like validating what really moves the needle with consumers. What I want to ask you another question here, Clay, about GloriLight and like, you know, drawing from those learnings of your six failed businesses and your previous brand that did have a heavy eComm presence at Haven Lock. When it comes to the advertising and the marketing for GloriLight, in addition to the affiliate strategy, what else have you guys done that's been successful but that came from your wisdom of like previous failures and lessons learned?
Clay Banks (29:23)
Keep in mind, I've been involved in buying meta ads, Google ads for probably at least eight years, going on eight to nine years. Went through the iOS 14 changes, And where we used to create...
nicer, more polished, more produced content. A big lesson learned in today's world, we're in November of 24, this might change next year, but polished, produced content doesn't work.
Jon Blair (29:47)
Mm-hmm.
Clay Banks (30:01)
as well as it used to. So now we have to get into a rhythm or a cadence of creating more real, authentic, less polished, less produced content and being able to, as the owner of the brand, being able to let go of that. Because I see this a lot of times with businesses that I coach or work with is we'll go get a handful of affiliates to create some content for them and they'll go, well, the way they plated this or the way they set this up or the way they presented it, the lighting didn't look good or the audio wasn't good or the it didn't show this best feature of this product or it didn't show this best benefit of this product, you've got to kind of let go and your brand is what people say about you. It's not about what you say your brand is. And most of the time founders want to control that brand message.
Jon Blair (30:53)
Sure.
Clay Banks (31:00)
You have to in today's world you have to completely let your audience control that brand message and with GloriLight We have completely let go of what's been said And what we require from our affiliates and made it super simple. All they have to do is basically say yes I want to create a video and That's and we send them a light and then they post a video about it We don't we don't monitor if they posted we don't monitor what they said. We don't like it's basically
We're letting you get the value and you transcribe that to your audience, right? But we've made it simple for them.
Jon Blair (31:37)
will say, in my mind, what you're talking about here actually is very much related to the concept of simplicity and getting a product to market to test that one thing with consumers ASAP. When you're talking about creating content or creative, right, to use for advertising, how do you test it? You get it out the door and you test it, right? And so if you sit there and pour over perfection, what are you doing? You're just waiting longer to get it out in the marketplace and test it, right? mean, like even when we started this podcast, you know, I sat down with our, with my EA, Sherilee who you know, who does our marketing. And I said, Sherilee, I don't want, I want to start, I want to launch this podcast next week. And I don't care how perfect it is. Like we're, we're going to launch it and we're gonna just start and we're gonna learn along the way. And funny enough, like this mic that I'm using right now, it just came last night, I bought it on a Black Friday sale. I've had this crappy little $19 mic that I've used for the last 10 months running this podcast. It was good enough to just get started. And I actually have two new fancy lights that I bought on Black Friday sale as well that are sitting here that weren't here before. like, you know, but I...
Clay Banks (32:38)
Gotta do it.
How many podcasts have you done before that?
Jon Blair (32:56)
Yeah, we've done like 20 something and I've had clients and prospects reach out to me way more than I thought and say, hey man, I've been listening to the podcast, it's been helpful and the content is real deal. Like it's really actually helpful. And we're getting better at producing podcasts now, right? But we just started and you know what I mean? So go ahead, what do
Clay Banks (33:18)
Let's go back to this. We talked about putting in the reps earlier on. right? And entrepreneurs, especially first time entrepreneurs, this will drive this home. To be in the top 60 % of all podcasts on the internet, you have to produce two episodes.
Most people only do one and it doesn't go the way they think. They overthink it. They don't do the reps. They don't go on and book the next show and they fail. So if you want to be in the top 60%, two episodes. This goes if you're trying to raise capital, right? If you're trying to raise venture capital or raise capital, you can't just send out your deck to one investor, right? And it's over, right? And people say, well, I tried that, it didn't work.
Jon Blair (34:03)
and get a no and it's over.
Clay Banks (34:08)
That's a good example. To be in the top 90 % of all podcasts, you have to produce 20 episodes.
Jon Blair (34:16)
Woo, there we go baby, we passed 20. You wanna know something funny? I think what we're just talking about here is a universal truth, right, by the way, which is why we both have so many examples. I've been really into reading sales books recently, and do you know how many times you have to ask for the order on average to get the sale? Nine. And do know what the average is of what most salespeople ask? It's one, it's one time.
Clay Banks (34:19)
Alright.
Nine.
I was gonna say most people fail to ask at all. One time.
Jon Blair (34:45)
Most salespeople ask one time and it takes nine times. And there's this book I read by a guy named Daniel Priestley. I highly recommend anyone listening to this pick this book up. It's a short read and it's so, every page is helpful. And he talks about 7-11 foreign people. And what does that mean? It's that you need to have seven quality touches, right, in...
That's the seven and then four is in four different locations. So four different channels, right? And the 11 is, I can't remember what the 11 is, but what it has to do with is just that you need to be, his words are, don't be perfect, be prolific. And what does being prolific mean? Get started, crank it out, crank out the content, start writing a newsletter, start writing on LinkedIn. Like for us, we started on LinkedIn two years ago and you know what we did? I sat down with Sherilee and I said, hey Sherilee,
I wanna post once a week. And as soon as that got easy, I said, I wanna post twice a week. And as soon as that got easy, I said, I wanna post three times a week. Today, two years later, we have like quadrupled our following. get leads from LinkedIn all the time. And we post 12 times a week. And it seems completely easy now, right? But like we just got started and I've posted so many things that just like no one replied to, like no one commented on, no one liked. The impressions looked really crappy, but.
And still today, I'll be on a streak that I'm like, man, I'm crushing it. Like people are, engagements are killing it, impressions are killing it. And then I'll write something that I think is gonna be amazing and it just flops. And you know what, you just keep going. here, going back to the point of all this stuff we've been talking about, you know why I do it? Because I love the journey of creating content because I wanna be helpful. Because when I was on the founding team of Guardian Bikes, and I was learning how to scale a business for the first time, I was just, I had this insatiable desire to read books and listen to podcasts, because I didn't know anything about scaling a business, building a team, running an e-commerce brand, managing inventory, managing a supply chain, running financial models. I didn't know the last thing about any of that stuff in real life. And you know what got me through it was like having the right people around me and consuming content. And so, I want us, I want Free To Grow to produce content, because I want to be helpful. You know why? Because scaling an e-comm brand is hard and it's lonely and it's challenging and you wake up every day second guessing yourself as a founder. And I want to remind people that there are great resources out there that can help. And we just want to be one of those resources. And so like I create content because I love the journey. I check the metrics because I want to see what does well and what doesn't do well. And I want to learn from that, but I don't do it for the metrics. I do it to be helpful.
Clay Banks (37:34)
And I've found giving every time is more rewarding than the metrics. Just the process of me thinking through some content that I want to give someone, whether it lands or it doesn't, I felt rewarded by giving that away. I didn't hold it in. And maybe one day it might hit the right person and they'll learn from it. And that to me, kind of makes it all worthwhile when you're not seeing the metrics, you're not seeing the engagement. It's like, well, that's okay, somebody will get it one day and it'll hit home. But yeah, it doesn't all have to be perfect.
Jon Blair (38:17)
So I wanna ask you, you have a lot of experience with raising capital, both for your businesses and advising with some of the people that you coach on raising capital. Walk me through just the first things that come to mind about best practices, some of which may be surprising to founders or misconceptions by founders. What are some of the do's and don'ts for raising capital that you've learned over your years of doing it well and also failing?
Clay Banks (38:45)
First and foremost you got to understand rep count is important you to get good at raising capital You've got to pitch a lot of times a lot of people that I coach, they want to perfect their deck. That's that's the the pitch deck is usually nine times out of ten If not 99 % of the time the entry point And it's the linchpin needed to get you a meeting or get you a pitch Okay, it's typically the first thing that investors are gonna want to see before they even consider taking a meeting with you, right? a lot of times entrepreneurs raising capital think they have a good deck and they send it out and they're not getting any even the opportunity to pitch. So having a really good deck that's streamlined into the problem, the value problem in the market opportunity, right?
It's having that expectation that if I send this out to 10 people, they think they're gonna get 10 meetings. And actually, they'll probably get one or maybe zero. So you've gotta get into the reps of creating places for you to pitch. So what we did is we had this deck and it was always evolving. It was always this document that was continuing to evolve. But we didn't wait around for people to say yes to our pitches.
we started renting rooms and I would go find other entrepreneurs who were raising capital and say, hey, you invite your network of investors, I'll invite my network of investors and we'll have like a mini Shark Tank pitch. We'll rent out of room, we'll have some beer and wine and we'll invite as many people as we can. So that got me the practice or the rehearsal it needed to be able to pitch and sometimes nobody would show up other than the other two companies, right?
very, let's put this way, very few investors would show up, right? So we would have a couple other entrepreneurs and we would just critique each other and pitch and help each other, like just having those reps and you could see other people pitch their business and you start to learn from them, right? And that's one thing that I think is a misconception founders think is like, I'm just going to create this deck and I'm going to send it out and I'm going to get the meeting and I'm going to get the investment and it doesn't work that way.
You've got to go out there and practice and rehearse it. There were times where we were pitching a good 40 to 50 pitches a week, if not more. And some of those were groups of angels or syndicates where there might be 10 or so people on a call or in a meeting. But we were getting in the reps. And over time, you start to go back to yourself and go, I wish I would have said that differently. I wish I would have shown this instead of that.
Another thing is people get too comfortable pitching off of their deck. The deck is used to get the meeting, but it's more important that you build your own deck so you tell yourself the narrative of what you're going to say while you're building it. You're mentally building your pitch deck, usually 10 to 12 slides. You're mentally rehearsing over and over and over while you build your deck.
And that is how you ultimately tell your pitch, but you don't use the deck to tell it. It's more of a natural conversation that you have with an investor where you're actually taking product and you're showing them. You're putting it in their hand so they can touch it and feel it. It's a natural conversation instead of, look at my pitch deck and pitching slide by slide by slide. That's pretty, that's not authentic conversation, right? think those are big misconceptions that founders have. Very rarely would we use a deck to pitch when we were raising capital unless we were on stage pitching to an audience or we were in like a like an angel syndicate where we were pitching a bunch of investors at one time taking them through like a visual where we were remote like we were raising money during COVID so you know that was used to pitch it pitch the deck but now if you're gonna meet in person or a one-on-one call it's more conversational and you've got to be able to to tell the right things to get that investor of like why should I join in you and solve this problem or why should I join in you to go on this crusade together to this promised land that you're forecasting here.
Jon Blair (43:40)
So what this all makes me think of is I'm seeing this pattern, again, Free to Grow works with 30 plus profit focused and growing e-commerce brands and I talk to dozens every month as I am going through our sales funnel, because I manage all of our sales, and I'm noticing this connection between what we're talking about here and brands that withstand the test of time and ultimately achieve success.
And it's that the product, the brand is built around a really true mission driven purpose that the founder and usually the leadership team are just, they're truly bought into. They're not fake bought into it. They are bought into it, right? The most impressive growth and profitability rates that we see within the brands that we work with, there is this almost cult like following inside the business that like this product is making the world a better place, right? And in fact, that is the primary reason why I started Free to Grow in the first place because I believe that scaling an e-commerce brand is just about one of the hardest things you could choose to do in the business world. And it's lonely and it's challenging and you get into this, you start this business for, you get this allure of freedom and controlling your own destiny which you mentioned when we first started the episode. And then you almost get trapped by how complicated it is to scale it and turn a profit and manage the finances and also manage marketing and manage operations and customer experience and all of this stuff, right? And I just seen in my years of being in the e-commerce world, I've seen just this overwhelm and this stress and this oppression, this thing that was supposed to create freedom now becoming oppressive, right? And the one way that I know how to come alongside and help those founders is to give them the financial intelligence that they need to make decisions with confidence. As you grow, you have more and more people asking you for more and more money. Your ad agency wants more ad dollars. Your supply chain person wants more inventory. Your COO wants to hire more people. And guess what? As you grow, all of those decisions cost more and more money, more and more zeros at the end.
And if you don't have a CFO who can build out a budget and a forecast and a financial model and understands scaling an eComm brand from both a financial model perspective and a strategy perspective, if you don't have that, you're just going yes or no, we can or can't do that. And it's really a guess. And when you say yes, it's like, man, are we gonna run out of money? And if you say no, it's like, man, is this gonna, are we gonna stop growing? Because I just said no to that. And so,
The point I'm making is scaling Free to Grow as a firm is actually really hard. I have plenty of days where I second guess myself. But then I get the comments and the feedback from our clients about life before Free to Grow and life after, and how much more confident they are and how they can sleep easy at night and how we've helped them through really challenging situations that they couldn't have made it through on their own. And that mission that we're on,
That's what keeps us going. And I think it's no different for an eComm brand. I look at GloriLight or even look at Haven Lock. I know for a fact, you guys were like, we have to solve this problem, right? We're not gonna give up. We have to solve this problem. Guardian Bikes, making safer kids' bikes. It was like, we have to get these to market. We cannot let our competition beat us. We need to make the world a better place. That is what your why. That's one of the ways that you...
find the energy to stay on the journey, right?
Clay Banks (47:36)
And that why, when you go back to like, what are some misconceptions or pitfalls that founders make when trying to raise capital, is they can't quantify that why. We call it the North Star metric, right? What is the North Star your business is going after, and how are you measuring and tracking it? And it comes down to that why, right? It's the number of children we serve, right? The number of children that have a GloriLight in their home, that is our North Star. For other companies, it's something different, but...
But being able to articulate that to an investor and how you're getting traction against that North Star and how you're on your path to that North Star, that's what's building investor confidence. And that's the why behind what you're doing. And if you cannot articulate that, then the investor can't see the vision. So that's a big point that I think a lot of startup people that are raising capital make. Also,
Jon Blair (48:25)
Totally.
Clay Banks (48:32)
Another one is they're not really an investable type of company. Their growth isn't an outsized return big enough to get their return on capital. They're not playing in a big enough market or the potential for the exit isn't big enough to take that risk. And a lot of times people go, I just want to raise capital to grow my business. And I'll say, well, what's...
Jon Blair (48:50)
That's a big one.
Clay Banks (49:00)
What makes you think money is gonna help you scale this? And if they can't answer that question, then they're not an investable company, right? Then you usually say, I wanna invest in marketing or I wanna invest in inventory, right? No, you need to invest in creativity. Creativity will get you everything that you want.
Jon Blair (49:08)
Totally.
Clay Banks (49:21)
It'll bring in the capital, it'll bring in the customers, it'll bring in more sales, whatever you're looking for, you've got to invest in creativity. And when you're not creating, investors can't get behind that, right? If you're just asking for inventory money or you're asking for marketing money, that is hard to scale profitably, right? And it's a tough cost of capital too.
Jon Blair (49:33)
Yeah.
Totally.
Well, it's funny because I actually see the same dilemma that you're talking about. The economics, the game isn't big enough for that three to five. It depends on who you're investing, who's investing, right? Call it three to 10x return that you need, depending on what stage you're in and what kind of investors you're raising from. If that opportunity is not there, then the investors aren't going to invest. I see the same thing with unit economics and investing in scaling advertising. Is that you can't bring a product to market and then figure out the unit economics later that allow you to be able to afford a CAC that scales on digital ad channels, you have to engineer the unit economics from day one to be able to afford the CAC to scale in whatever sales channels you're trying to scale in. doesn't happen by accident. It has to happen intentionally, and it's the same way. Okay, unfortunately, I gotta land the plane here. I actually think we're gonna probably have to have you back, because we got through like half the agenda.
that we were gonna talk about, but it's because there's so many things that we can chat about between your experience, the wisdom that you have gleaned over the years, and just kind of the overlap that you and I have on how we see the business world. But before we land the plane, I would like to ask a personal question to everybody who comes on the show. And as I mentioned, I believe I mentioned earlier, Clay is a fellow Christian as well as myself. And I think it's really important to highlight that like faith shapes our journey and our mission as entrepreneurs and as business leaders. And so how does your faith shape your entrepreneurial perspective and your life as a business leader?
Clay Banks (51:34)
I used to think everything was in my control.
Jon Blair (51:40)
Hahaha.
Clay Banks (51:43)
And with successes or failures, I didn't go to God in every circumstance or every partnership or every, you know, and I just said, I can control this, right? I can figure it out if it goes bad. And now it's more like, hey, God's in control and I'm just a steward and I can't. To me it's a lot more comforting knowing that I'm not in control. He's gonna put the right people in front of me and he's given me the skill sets and the experiences to know and decipher who the right and wrong people are that I need to be working with. Over time it's just taking time for me to comprehend and learn that and now go there's some freedom in knowing that I don't have to make every decision. I don't have to, I can just lean on Him and He'll guide me in the way that where He wants to take this company. Specifically with GloriLight being a kids night light that projects Bible verses and the Word of God.
very on, the two guys that I'm in partnership with on this, we were like, is his company and we're just using our skill sets that he's given us to take it to wherever he wants us to take it. So there's no pressure. We don't have that pressure of getting some sort of outsized return and we don't have investors so we're not having to get, and there's some freedom in that. There's not as much pressure.
Jon Blair (53:19)
Absolutely.
Clay Banks (53:21)
And I know not every business can be like that But the more you think hey, man, I'm just gonna like turn this over to God and let him you know direct me like I got into our quickly. I know you want to end this here, but With when I was selling haven lock it got to be a very stressful situation
We had a board of directors, we had 90 plus investors, a lot to divide up, right? It got very stressful. So I went to the sport of Ironman to have that time with God. The longer I spent with God on a bike or on a run or on a swim or whatever I was training for, the clearer my mind got.
about how to respond or how to react or how to position or how to strategize the close of this sale of this company. And before I did not allow God in that amount of time, I was just making decisions on my own. So I definitely allow God to do his work and give him the time he needs and it'll turn out.
Jon Blair (54:32)
Man, I'm actually, getting goosebumps again because I was praying about this exact thing this morning in my morning quiet time that I feel this sense that my wife and I with our three little kids and the couple of businesses that we run, we have been just moving too fast and it's been so, we've been, we've just been trying to control, keep everything in order, right? Keep everything under control.
We've been trying to control everything as we all do, right? And it's been overbearing, completely overbearing. And I've been getting this sense of like feeling like I'm burning out. And luckily God has taught me that feeling burned out doesn't mean I need to give up. It doesn't mean I need to give up the efforts, right? Or what I'm trying to do, but it does mean that I need to give up control and let it happen in His way and at His pace, right?
And so there's a book on my bookshelf called At God's Pace. And I was this morning feeling like I needed to pick it up and reread it. And I think I just got the confirmation right now that I need to reread it. I was praying about it this morning just a few hours ago. Clay, I can't tell you how much I appreciate you coming on the show. This is kind of a full circle thing for me coming from like the first couple weeks of starting Free to Grow.
Clay Banks (55:43)
Yeah.
Jon Blair (55:57)
to having you on the show to talk about all these awesome things. Look, as a reminder for everyone, release yourself of the burden of trying to live up to this lavish vision you have in your head. Don't give up the visions that you have, but realize it's a journey. It's not an end, right? Work hard at loving the journey, work hard at making an impact, work hard at honing the craft, but give yourself a bit of a break.
You know, and if you're, and if you are a person of faith, maybe trust God a little bit, right, to take some of the burden off of your plate. So this is a awesome conversation. I know that everyone's gonna find it super valuable. Just as a reminder before we land the plane here, if you want any helpful tips on scaling a profit-focused DTC brand, consider following me, Jon Blair, on LinkedIn. And if you're interested in learning more about how Free To Grow's DTC accountants and CFOs can help your brand increase profit and cash flow as you scale, check us out at FreeToGrowCFO.com and until next time, scale on. Thanks, Clay.
Clay Banks (56:59)
Yeah, scale on. See you, Jon.
