What Every Marketer Gets Wrong About Data and Media Buying

Jim Banks [00:00:00]:
So. Hello, everyone. Welcome to this episode of Digital Marketing Stories. I'm here with Young Han. Is that right? I never know.

Young Han [00:00:07]:
Oh, sorry. It's Young Han.

Jim Banks [00:00:09]:
People's names. Ever since I started the podcast, it's.

Young Han [00:00:12]:
Han, but you can call me. It doesn't matter. I respond to anything.

Jim Banks [00:00:15]:
And do you prefer to be called Han or Young? I never know. Han, I'm guessing.

Young Han [00:00:19]:
Yeah, I know. Young is actually my first name, but you can call me either or. I'm pretty low maintenance here. I was.

Jim Banks [00:00:27]:
I was fine if. I don't know if. I'm never sure. I always call people mate.

Young Han [00:00:31]:
I love that too. Yeah, I'll respond to that as well.

Jim Banks [00:00:34]:
Anyways, it's phenomenal to have you on the show today. I know you're. You're a very busy guy. You're a fractional coo, fractional cfo. You've got a couple of kids, so you're like a girl dad. I've never understood that whole girl dad thing. Can you just. Before we get into the meat and potato on the work side of things, just talk to me a little bit about that?

Young Han [00:00:55]:
Yeah, I think Kobe Bryant made it really famous. He was the one that kind of made it a bigger deal. But I think there's just, like, a funny hashtag around it. There was, like, a lot of trends around being a girl dad even previous to Kobe Bryant being very influential in making that terminology more famous. Widely spread. But it's just this idea that dads are becoming more part of the family infrastructure than the previous generations were, maybe. And this concept that a lot of dads are getting more in touch with their kids and the family unit and being part of the relationships, there's a bigger trend moving towards that direction. And then.

Young Han [00:01:27]:
And a subset of that is that there are dads that have girls that are working towards being more emotionally connected and all those things. But, yeah, for me, I have a show as well called the Girl dad show, and it's just poorly named. I'm a terrible marketer, apparently, because I'm actually the girl dad. It's my show, so it's called the Girl Dad Show. But I don't actually. It has nothing to do with being a girl dad, nor does it have anything to do with child development. It's actually just interviewing success society, successful people that are parents and then questioning them on their values and ethics.

Jim Banks [00:01:54]:
Yeah, it's funny, like you say like that when I first started my podcast, it was called Bad Decisions with Jim Banks, but nice. It wasn't about my bad decisions. It's about the. The conversations of having with my guest about the things that they would have done differently with the benefits of hindsight in their businesses.

Young Han [00:02:11]:
Totally.

Jim Banks [00:02:11]:
So I quick. I quickly realized that maybe I needed to change the. The name of the podcast. I still keep the bad decisions, the gym bags at the bottom because it's just sort of me. But. But it's definitely much more about the stories that people can bring to the table. For me, I think one of the things that kind of attracted me about you as a guest was obviously again, you're slightly different insofar as you're more operational and finance. But what I've been finding in the last 12 months or so is because of the onset of AI, so much of the kind of the roles now are blending into each other.

Jim Banks [00:02:45]:
And I think everything being siloed and operationally operations would be this, finance would be this, marketing would be this. It's all gone out the window. What are your thoughts on that?

Young Han [00:02:55]:
You hit it right on the head. Things have changed so much in finance and operations. It's almost a requirement now for you to be more proactive. I think gone are the days where finance was back office and very reactive. I think that the future of finance and operations is very proactive because everything is so democratized and data is so easily accessible in real time that you need to be a more proactive strategic partner for the entire business. And I akin it to a lot more of like data, data architecture and data mining than I do finance now. So it's not like this back office role like it used to be. Especially if you want to thrive in this, in this new world.

Young Han [00:03:33]:
I feel like finance and operations people need to step up into the fore and provide information and data that helps partner with the leaders of their various departments in the organization to arm them with the data they need to make really good decisions.

Jim Banks [00:03:46]:
Yeah, it's really interesting. I get some. Sometimes I get brought in to solve problems. Right. Somebody once called me, they said you're a sort of digital marketing Ray Donovan. Right. I don't know if you've ever seen Ray Donovan. He's.

Jim Banks [00:03:58]:
He's a kind of fixer that turns up and he usually kneecaps people with baseball bats. I'm thinking it's not quite the sort of connotation I want to have associated with me, but it's generally speaking, if people have a big problem, sometimes they might go, jim, we've had, we've been kicked out of Google or we've been picked kicked out of Facebook. Right. Or our analytics are all over the place, we don't know what's going on. And I'll help try and piece things back together so that they can move forward. And it's, it's, what's really interesting is you would assume that it's, it's small businesses that don't have particularly great resource that would have the biggest problems. But what I found is a lot more of the clients that I'm talking to now are enterprise level businesses where again, they're only as good as the weakest link in their agency kind of mixture. So they have, let's say they have six or seven agencies and one of them is doing really bad things that could permeate round to all of the others.

Jim Banks [00:04:45]:
And, and for me, I think one of the challenges is it's difficult to make a decision about a business unless you've got good data. And unfortunately, I think a lot of people are drowning in data, but the data isn't necessarily the right data and in some cases it's very wrong data. And they're making decisions about their business and their direction based on data that is flawed. And I think sometimes the, the onset of AI with the hallucinations can make that data even worse. So they're making horrible decisions based on horrible data which really magnify things.

Young Han [00:05:16]:
Absolutely. Yeah. And at the end of the day, yeah, you got to have good data. You can't do any of this without it. And, and so I think you're absolutely accurate. But I do love that you just equated it to like detective work. That's fun. Yeah.

Young Han [00:05:26]:
Because a lot of the times when you think about a business problem, it's piecing it back together to figure out what went wrong and then rebuilding it. And so going back full circle to the first comment you made, that's where I think a lot of the roles are starting to blend together and the delineations between the roles are becoming more melded and more partnership based or collaborative than they used to be. So yeah, that's, I think that's very sage of you to call that out.

Jim Banks [00:05:48]:
Yeah, it's really interesting. I always say sometimes like selfishly, I just want the data to be good because that makes my life easier when it comes to buying media. Right. If I'm buying ads for clients on Facebook or Google or Microsoft or anywhere. Right. I want to have confidence in the integrity of the data that's being driven by the results from that traffic. Right. In any traffic source.

Jim Banks [00:06:09]:
Right. And I don't want sort of one Channel grabbing, all the attribution right. For sales that should be giving credited to another channel. Just because of the way in which the kind of the tagging has been set up on the back end. You could go and go. All of the traffic's come from email. We need to do lots more email. And it's.

Jim Banks [00:06:26]:
Well, no, I don't think that's what's truly happening. And sometimes it's again, just trying to kind of get this, the. The data to tell the story so that you can go back to the C suite and say, look, this is the actual underlying data story from this particular campaign or amount of money that they may have spent on traffic.

Young Han [00:06:43]:
That type of thing totally. As it relates to marketing specifically, it's. It requires a lot more data and analytics than I think, even the other departments, because there's a lot of things that you can track from a media buying perspective and doing the math and the arithmetic to figure out what's converting the best and what the best roas and ROI is from, especially from a financ perspective. But there's a lot of nuance there and there's a lot of art in marketing because sometimes it's also qualitative. So, yeah, you might be using the same ad set and the same ad structure in the same ad channel, but you might be saying something differently, which is creating a different result. And like, for example, I also own a pool cleaning company and I'm deep in the data with our marketing agency. And it's so funny because, like, the same ad set, the same thing, but we changed one word that said family locally and family owned versus just talking about the feature functions. We just added that one word and it immediately converts so much better.

Young Han [00:07:33]:
Yeah, and it's one of those things where you look at it from a global perspective. You look at it Facebook as a channel, it just shows you the end result. But you need to parse it out, parse it out, parse it out to see that the nuance is there. Right. And so there's a deep level of artistry, I think, when it comes to marketing tracking. So, yeah, absolutely important to track that data and think about it as good data versus bad data. Then it goes back to what you said at the very beginning about how it's all merging together. It's really fun getting more involved in these other departments from a finance guy, because typically you just.

Young Han [00:08:03]:
You just count beans. And then now we're like, now we're talking to marketers, now we're talking to salespeople. We're talking about the funnel, we're talking about the product and the margins and stuff. So we're getting more involved in all the different aspects of the business, which is fantastic.

Jim Banks [00:08:16]:
Yeah. And it's interesting, I know that they're all trying to help. Right. So you look at all the LLMs, ChatGPT perplexity.

Young Han [00:08:24]:
Yeah.

Jim Banks [00:08:24]:
They've just raised a kind of huge amount of money on a. Again, I think it's a ridiculous valuation personally, but that's, that's me. And, but you know, you look at Chat GPT, right? So Chat GPT thought they would be. Be helpful to advertisers or, or website owners by adding the utm underscore source equals chat GPT.com to all the traffic that comes from their site. And you're thinking, well, that's fantastic. The fact that they're take, they've, they've taken the initiative to make it so that the traffic coming in can be identified as coming from them. And I'm always surprised at how many of those LLMs haven't actually, right from the get go, said, look, we're going to tag all of these so we can get credit for all of them. Because at the moment, again, it's, it comes back to this, it's this land grab, it's who's, who's delivering the most value to, to, to end users.

Jim Banks [00:09:15]:
And, and when I say end users, the actual people at the end of the query, not the, the client, it's more the, the end user. That's, that's who this is all about it. Making sure that people can get the information they want in the best way possible, in the most researched way as possible, in the quickest way possible. Right. So it's not just about, like I said, the old 10 blue links that used to appear on the page and you have to choose one, you think, well, is that the right one? No, it's not. Click the back button, get the next one. Is that the right one? No. Go.

Jim Banks [00:09:40]:
So now you've got this sort of, this aggregation of the information and then a collation of this is based on all of that information. This is what we think might be the best solution. But what was really interesting is that in doing that, what they've done is they've driven a huge amount of the traffic that was previously just being able to be picked up properly. The fact that they've added that utm source equals chatgpt.com, that's thrown all of that traffic into the direct bucket. Because in order to be Categorized correctly, you need to have the UTM source, the UTM medium and the UTM campaign. Otherwise it gets categorized as direct. If either of the other two are missing, it's straight into direct. And that's my biggest challenge at the moment is brands think they're far bigger than they actually are.

Jim Banks [00:10:24]:
They go, wow, people are going to Google and typing in my brand direct, like straight into Google. No, that's not what's happening. If you don't tag your email campaigns with the right tracking parameters. Right. Then that will all show as direct. And ultimately again, it's like you spend money on email campaigns, email platforms, ad campaigns, ad platforms, and you just want to be able to say with some degree of confidence, I spent this amount of money. This is the impact that it had on, on the overall like cohort data today. Right.

Jim Banks [00:10:55]:
You might have the bit of modeling over the, over time, but this is what we did. We spent $10,000, we made 15. So we're, we're doing okay. And then if you didn't, then you can kind of just, just reverse it out. But it's amazing how many small decisions that these platforms can make can have a huge impact in the direction of where people actually go looking for the answers that they have. So.

Young Han [00:11:17]:
Yeah, totally. Yeah. Data, data quality is super key. Yeah.

Jim Banks [00:11:21]:
So the types of companies that you work with, what is a fractional COO or fractional cfo, what does that kind of look like? I've had some fractional cmos on before. I'd be interested to know if there is any difference between what they, what they have, whether it's just the M and the F and the O rather than anything else.

Young Han [00:11:38]:
Yeah, typically we've historically worked with venture backed startups because that's from, that's where I'm from. That's my background is just venture backed companies and I use that experience working in early stages from seed to Series B is typically where I've specialized in, or I shouldn't say specialized. I don't feel like I'm that special. But I have a lot of experience working as a W2 inside of these companies and also building my own startups that are venture backed as well. And so when I went off to start as a consultant, I started to focus on what I know, which is C2 Series B and offering what I've learned through those experiences on a fractional level. Because a lot of these companies need a lot of experience to navigate through these high growth stages, but they don't have the resources or money to pay The CFO co rate and you just sell fractions of your time to go do those things. And my famous. Not famous, sorry.

Young Han [00:12:28]:
My favorite thing to say to startups is you can pay a junior ops finance person like 80, 100k a year and they'll take a year and year, a year and a half to figure everything out. Or you could pay me 80k and I'll do it in two, two to three months just because I know exactly what stage you're at and I've done it 22 times and I already know what to do and I can compress that time a lot just because I, I've done it so many times and there's a lot of value in that. So it's like speed versus speed and.

Jim Banks [00:12:53]:
Quality versus speed is important, isn't it?

Young Han [00:12:55]:
Yeah.

Jim Banks [00:12:55]:
And as you say, I think sometimes the, when, when you, you price, I was going to say when you price sort of like your time. Right. And they go, wow, that's really expensive. I'm like, well, compared to what, what are you.

Young Han [00:13:07]:
Exactly. Exactly. Yeah.

Jim Banks [00:13:09]:
You know, that's the thing I've never understood is if you're comparing me to a junior person with one year's experience and yeah, I'm hideously expensive. But yeah, but I, I always say judge me by what money I put on the table, not what I take off it. Right. So.

Young Han [00:13:22]:
Because, well, it's also just, yeah, speed, quality of work and then cost. Right. Those are the three things. So it's really just around figuring out what that client wants and what that customer wants and based on what they have. And so sometimes it doesn't make sense for people to do that, but we're actually finding the, that's where we've been historically anyway. So we could talk about pricing and all that stuff if you'd like. But what we've been doing at Thesis, which is the company that I have with my business partner, the, the firm that we've created, we're actually finding because of AI and just the trends that are, that are creating that with a lot more efficiency through automation, that more and more people can use a fractional and get away with even higher revenue marks. So we're no longer like targeting startups.

Young Han [00:14:05]:
We still get them because our background is in there and our network is in there. So they keep coming to us because we have a good track history and a network in that industry and space. But we're specifically looking for mid market, mid market companies. So typical services and trades companies that are doing 10 million plus to about 100 million is what we're looking for because even these service companies don't really need a full time CFO and they're expensive and so you can get away with paying a fractional a partial amount of that salary.

Jim Banks [00:14:33]:
Yeah.

Young Han [00:14:34]:
And getting a lot of the same benefits from it. Because of AI and automation. There's a lot more we can do now that we weren't able to do before and so you can get a lot more of that. And for, for me it's really fun to start moving into a different vertical because. And not that I don't like venture backed startups, but I'm just, I had a midlife crisis five years ago and I turned 40 and I'm turning 45 this year and I just, I just don't want to be in venture as much as I used to be. Venture is fun and it was really great experience but I, I'm just tired of trying to change the world. I just like love boring businesses now. I love my pool cleaning company.

Young Han [00:15:11]:
Like you have a dirty pool, I clean your pool, you pay me money. It's just a very clean arbitrage of value where venture backed companies you have to like have this very ephemeral arbitrage of value that you have to create. We're going to make T shirts in a different way. So we're going to change the way people wear clothes and T shirts for the rest of their, going to disrupt society in these way. Yeah, sure, those things are really fun and exciting but I'm, I don't know if it's just, I'm older, I just, I'm just tired of it a little bit. So I just like these businesses that are very straightforward like manufacturing and home services and, and just services in general. They're very clean cut arbitrage of value. You, you have a problem, I solve your problem.

Young Han [00:15:47]:
You give me money, I do more of it, I make more money. It's a very clean arbitrage of value versus trying to disrupt everything and shatter the world's societal fabric. Yeah.

Jim Banks [00:15:57]:
And so when you look at sort of like the, as you say, home services. Home services is such a huge kind of total top level and there's so many different kind of things that sit underneath it. Porta pot.

Young Han [00:16:07]:
And you make a ton of money. I started my pool Cleaning Company four years ago from scratch. 0. 0 customers, 0. I didn't buy it, I just, I just built it from scratch. And we'll end the year at a little over 4 million in annual revenue.

Jim Banks [00:16:19]:
Which is phenomenal, Right?

Young Han [00:16:20]:
Yeah. That's, that's only three and a half years in. We're not even like an old business. We're just four years in. We'll make four annual revenue. And it's, it's still growing. It's still growing leaps and bounds. I can't stop it.

Young Han [00:16:30]:
There's so many customers that need servicing.

Jim Banks [00:16:32]:
Yeah. I don't know if you've heard of Cody Sanchez. She spends her whole life going around to find sort of like, you know, people that rent out dumpsters and stuff like that.

Young Han [00:16:41]:
And yeah, she, she lives in Austin near me, so I've been to a couple of her private events. But I will say that I'm a little bit different than Cody in the sense that she likes to acquire these businesses and then put a GM in place. I actually feel like they're overpriced. I mean, no offense to the, the silver hair generation, but a lot of these businesses coming up for sale, I could, could. I could destroy. Of course, yeah, for a lot less money than they're. They're valued at because they, they don't have good operations, they don't have good finances, and they don't have good technology and automation. And I look at the valuations, and they're so priced high because of Cody Sanchez's and private equity coming downstream.

Young Han [00:17:13]:
All these businesses are getting priced so incredibly high. And I look at them and I'm just like, man, I could rebuild this for, for pennies on the dollar.

Jim Banks [00:17:20]:
And in most cases, the building better. They don't own the clients. Right. They obviously have the relationship, but, you know, the, the kind of. The client is not so tied to the, the contract that they have with somebody. If something.

Young Han [00:17:32]:
Yeah.

Jim Banks [00:17:32]:
Can come in and deliver the same, same sort of service for an equivalent price in a more efficient and effective.

Young Han [00:17:39]:
Way, then I think that the, the biggest thing that's really unfortunate right now there is a client network. And I will say that the next business I do, I may actually acquire a business because I think there is a lot of benefit in acquiring that client base and that brand and that network, because you can start with the jump start, but in the macro, if you think about the economy and the market as a, as a finance project, statistically speaking, like, it's not hard to get customers right now. There's no workers. We have a repopulation rate that is dwindling, and we have a generation of people that are trenching all the money and they're spending it on their health because they're getting old, and so they're Literally unloading that wealth into senior care services. And so you have the limited amount of young people, people that are all going to senior care because they can make $90,000 a year taking care of old people versus making $30,000 a year flipping burgers. So you're, you're just compressing market factors that there's not enough workers. And so it's, it's one of those funny things when people, I bump into my neighbors and they're like, oh, I gotta sign up for your pool cleaning company. I'll do that eventually just so I can help you out.

Young Han [00:18:41]:
We have a wait list. Our issue is not customers. We have a wait list to sign up. Sign up if you need it. Don't sign up because you're not trying to help me. Yeah, do it because you need the service. But all we're doing is showing up on time saying thank you and sending them a report of what we did. That's literally a common courtesy.

Young Han [00:18:59]:
And we are head and shoulders above all of our competitors because there's just no workers that do a good job. It's that easy right now in service because there's just such a compression in, in service because there's not enough labor. We spend four times as much recruiting and retaining employees than we do marketing for customers.

Jim Banks [00:19:14]:
Yeah, I mean that's, that's sensible, sensible to do that. As you say. Like there's. But there are an awful lot of really poorly run businesses that probably, if, if you again, if, if you take the, the kind of, the crazy valuation off the table are probably, again, it's probably worth you acquiring a business to enable somebody to go off and sit in a hammock and retire so that you can take over the infrastructure of kind of what they have, their client base.

Young Han [00:19:38]:
So on the book of business is valuable. I've been doing this now for four years and I've been building businesses instead of buying them for four years because financially and economically I can't justify the valuation of these businesses because they're too high. And that has a lot to do with the fact that there's so much pent up capital coming down lower and lower market. So they went from mid market to lower mid market. Now they're even going to pre lower mid market. It's insane how much private equity is compressing into this industry. And so now the valuations keep getting higher and higher and higher and I just can't justify it. But now that I've been building businesses for four years, I've been doing a lot of the math.

Young Han [00:20:11]:
And I am realizing that even though there is a higher valuation for the business, there is benefit in buying that brand in that book of business and then just automating and fixing it.

Jim Banks [00:20:21]:
Yeah.

Young Han [00:20:21]:
Because the net cost and time that I spent building that business up to the point where it's making a lot of money is comparable to just buying it and then having a million dollar business that's already generating a million and then adding a couple more tweaks to it to, to keep, to get it to start growing. And the cost is, it's almost comparable in hours and money.

Jim Banks [00:20:39]:
And you can probably buy a business for a million dollars and pay for it out of the cash from the business that you're buying. Right. But just based on the fact that they have a reasonable amount of organic.

Young Han [00:20:50]:
It'S harder than people say. And I know that Cody says it's really easy and I know all these pundits and grooves are saying that it's. I don't, I don't, I don't know how many people have actually tried it. It's not, it doesn't work like that. It's very rare. Is it possible? Absolutely. And I don't discount what they're saying online because I know that if you do enough numbers, hit enough numbers, hit enough reps and you have enough people screening these things, you can find that perfect owner that wants to sell, that does sellers financing, that does all those things. It's just very rare.

Young Han [00:21:16]:
Yeah, it's very, very rare. And it's not like that the business.

Jim Banks [00:21:19]:
Owners don't want, unfortunately, they're not Warren Buffett on the other end of the table where is accurate. They invariably, they have, they have a.

Young Han [00:21:27]:
Job, their books are not clean and they're working 50 hours a week. And, and you, and they're part of the business. Like they, all the institutional knowledge is in their brain. There's no SOPs. You're essentially buying a brand and hoping that you'll lose 30 of their customer base and you'll retain 70% of it that you can then build upon. That's really what you're, what you're doing. And the valuations are very, very high right now. But yeah, that's.

Young Han [00:21:48]:
Maybe I'm just a terrible business buyer, but I've been trying to buy a business and I can't find that deal that everyone says you can do. Oh, this perfect thing. It's 5x multiplier on STE. And then the owner is going to sell or finance it and you can get $10,000 from an investor and give them. There's all these like things that people say on social media and I'm like, it. I just must suck, I must suck at business development because I cannot find a deal like that. And I've been, I've been trying really, really hard to buy a business like that and I cannot find someone to do it for me. So I just got to keep trying.

Young Han [00:22:18]:
I'm not going to stop, but because I do know it's out there and I do know that there's a ton of, you know, the silver haired generation that wants to get out of their business, but I'll see what the ratio is. But out of the four years of trying to do this, I've always had to come up to the point where I'm like, should I buy it or should I build it? Should I buy it or build it? And then I end up just building it. And so I've built 24 businesses in the last four years and I own 13 right now that are operating seven of them, do over a million and doing pretty good. I'm actively trying. And so I guess the point of what I'm trying to tell you is I'm telling you this because I'm not sitting here like saying I'm not trying. I'm trying way more than the average person to find these deals. But, and I believe these social media experts that they are, they're there. I just don't think it's as easy as they make it sound.

Jim Banks [00:22:59]:
Yeah, I think, I think when you drill into the numbers, a lot of the numbers like don't stand up to scrutiny. I think again, I always look at, you see all these like 18, 19 year old kids and they're talking about doing seven, seven figures a year on a Facebook ad campaign. I just set it up and I'd make seven, make a million dollars. I'm thinking I'm much older than you now, right? And I kept thinking when I was like 17, 18, I had enough money to probably go and buy a couple of beers a month, right? There's no way on this earth I could have walked into the bank and said, hey, I want to borrow $200,000 to bankroll a kind of a really crazy idea I've got of running some Facebook ads and everything else. And they go, what experience you've got doing that? Well, absolutely none, because I'm just straight out of school. But I know I can do it, right? I've got confidence in my abilities. Well, you know what come back to me when you've got 200,000 of your own money to put up and we'll put up some as, some as collateral as well. So I kind of question whether the validity of what they're saying is actually true or not.

Young Han [00:23:55]:
I don't know. You're talking about the, the, the social media, the, the marketing people. I don't even know. I think we get different content streams. The, the content that I get are people buying like service businesses that are like 20 years old.

Jim Banks [00:24:10]:
Yeah.

Young Han [00:24:10]:
And they say oh, go buy this like Laundromat that has, uses a fax machine and this and this and that. And then they're 20, they're like 20 plus years old. And then you can use that to go apply for, use their financials to go apply for an sp, which is all legit. That is absolutely legitimate.

Jim Banks [00:24:24]:
Yeah.

Young Han [00:24:24]:
I just think that all of those are being targeted by private equity. So like when you actually find one that's reasonable to buy, they have other offers on the table and so you can't get them at a price. And I guess you can if they, they're not getting targeted. But I'm just saying the amount of reps that you have to do to find those deals is very small. But I don't know what you're talking.

Jim Banks [00:24:42]:
About with the private equity money kind of finding its way to this because the kind of traditional markets of the IPOs and everything just isn't happening in the same kind of rate that it used to. So they've kind of like gone down rather than going up. Is that kind of what's caused it?

Young Han [00:24:59]:
Well, I mean there's, there's those factors as well too. It's a very complicated set of things that are happening, but that's one component of it. But it's also just capitalism at its best. Right. Like so if you keep returning good returns and there is a residual like ability to generate cash from it, then people are going to fund it versus venture or versus lending and whatever that may be. All the different alternatives for the, the capital to be allocated, it gets put into private equity and then that becomes, it gets compressed and then you keep funneling that down, then those things keep getting valued up because now it's a hot commodity because there's so much more pent up capital in this thing because it's working the best.

Jim Banks [00:25:40]:
Yeah.

Young Han [00:25:41]:
So it just all comes down from capital allocators down to the channels of capital allocation. And then private equity is now getting bigger and bigger and bigger and this whole kind of mid market, lower mid market is getting Compressed down, down, down, down, down to local service level.

Jim Banks [00:25:55]:
Yeah. I've exited two businesses, sold two. Congratulations again. I look at it and think, well, in terms of the valuation, peanuts. Yeah. The first one I did was, was a disaster. Second one was less of a disaster because I'd learned a lot from the first one. But, but for me, again, it was like, it was more just the experience and fun of doing that whole thing, starting a business, growing it.

Jim Banks [00:26:19]:
But what was really interesting is it got to the point where I had a really cash rich business. Right. Because I was buying media and I was then paying Google and Yahoo at the time for the media. I bought like on a net 30 or net 90. Right. So yeah, very cash, cash rich business kind of coming in.

Young Han [00:26:36]:
Yeah.

Jim Banks [00:26:36]:
And what was really interesting is that every time I went to the bank initially when I first started out saying, hey, I need some help to grow. No, no, no, the numbers don't stack up. Numbers don't stack up. When I got to the point where we were literally rolling in cash, they were like, they were offering us so much. I'm like, I don't need it now. The time when I needed you is, is not now. I needed you probably three years ago and I don't need you now.

Young Han [00:26:57]:
I know that's the problem with money. And that's what I always tell founders and owners when they ask me about fundraising or, or taking bank loans or whatever that may be. I always say money only comes when you don't need it. So when you don't need it, go get it. Get your loans now and get those things accessible. Get your cash loaded up. Because you never, you never get offered money when you actually need it. You only get offered it when you don't need it.

Young Han [00:27:20]:
It is one of those classic curses. It's very unfortunate, but what was really.

Jim Banks [00:27:23]:
Interesting, the first, the first company I sold it to, a publicly traded U.S. company.

Young Han [00:27:27]:
Oh, wow.

Jim Banks [00:27:28]:
Congratulations. I genuinely thought that it was going to be so much better as a result of being part of that kind of big, big group. The reality of it is, is that ultimately you had tiny, tiny institutional investors that were basically able to dictate and control the whole direction that the company went. They said, we want you to go in this direction and if you don't do that, we're gonna talk to all the other institution investors and we're going to make, get, get rid of the board and put new people in. So we ended up going in a completely different direction than the one that all of us had signed up for. I Saw my company and 12 other kind of CEOs had sold their companies to this kind of group. And I thought, was I. Was that the only one that was a complete goon and idiot there? Right.

Jim Banks [00:28:11]:
Was that the only one that got pulled inside by this whole kind of promise of what was going to happen? And every other person said, no, we all fell for the same thing that you fell for.

Young Han [00:28:19]:
Yeah.

Jim Banks [00:28:20]:
We just ended up going into completely different direction. But I work on the basis I got to put some money in the bank. I learned a lot from the experience. I knew what not to do next time.

Young Han [00:28:30]:
Yeah.

Jim Banks [00:28:30]:
So again, for me, valuable lessons that I think every entrepreneur kind of has to.

Young Han [00:28:35]:
Totally.

Jim Banks [00:28:35]:
You have to have the scars. Right. I think unless you've got the stars, you can't really explain to people what it's like to go through that.

Young Han [00:28:42]:
Totally. And I. I mean, this is, this is. Again, these are all anecdotal stories. Right. You're telling about the market and how it's worked for you. And I'm only telling you my anecdotal stories for what's worked for me. But I've been part of 3ex as well, and I'm still working.

Young Han [00:28:55]:
So you learn a lot about dilution and prep stacks and all these different things and how that all works. And you get very, very sophisticated very quickly because you realize how little you get of it at the end of it. And so my new thing is really around building cash flow businesses and then never selling.

Jim Banks [00:29:10]:
Yeah.

Young Han [00:29:10]:
So my goal is to just build as many of these as I can and use my operational and finance skills to scale them up and then hold it, even if it doesn't generate a ton of money.

Jim Banks [00:29:19]:
I kind of a big cash flow business, but it takes a massive amount of your time. You want it to be proportionate. Right. So you want to have lots of cash and not that much time and effort because you've, you've worked hard on the AI, the SOPs. Like, everything runs really smoothly and it takes very little of your time, which.

Young Han [00:29:36]:
Kind of goes into why I built my own operating system. So that's the. That's the big unlock for me is I came to that same conclusion. And so I've been working on building an operating system very comparable to EOS or emy. It's my own version of it.

Jim Banks [00:29:49]:
Yeah.

Young Han [00:29:49]:
And that's how I use it to build three businesses a year. And it's a fun system. And so I have two businesses right now that I'm. That I'm able to actually outsource the operating elements that I provide to one of my small business coaching coaches. I have a small business coaching business as well, but it's all part of the ecosystem. So I have an operating system that every business follows. So my pool cleaning company for example, I work on it two hours a week, four hours if there's a lot of problems. And you said in a year, yeah, it'll do 4 million this year.

Jim Banks [00:30:20]:
Yeah, that's a good.

Young Han [00:30:21]:
Yeah, yeah. So I have, my point being is like you need an operating system or else you're going to be stuck inside the business. Yeah, you need to sop everything and build it out. So I was very, I was very clear about that problem set as well too. And so I built an operating system that I can follow very quickly. Get the leading lagging KPI indicators that I want to track, find a GM and, or a business partner, have them run the business. I advise them financially and operationally through this operating system so it minimizes my time. And then now four years in, do.

Jim Banks [00:30:49]:
You find a gm? Because again, one of the mistakes I made was I never kind of like I kept running the business. So when I sold it, I was tied to it, I had to do a two year earn out. Whereas if I'd have had a gm I could have just pushed the cash, push, push, take the money, push the boat out into the water and gave to everyone as they went off. But I was stuck with it.

Young Han [00:31:08]:
Yeah, I just, I just, yeah, I think that finding a GM is so hard. It's, it's just the same thing as finding that perfect deal that all these social media gurus talk about. You have to try really, really hard and look for it and find it. But I, I know they exist because I used to be one. I was an internal operator for all these great brands and I don't know how they convinced me to do it and take on the responsibility of running their business and, and taking a salary, none of the upside. And I built so much equity value for these people and, and I was happy with the role, I was happy being a GM and I was happy with my incremental salary increases and my safety and 401k and all this other stuff because I knew that I was that person. I knew it was possible to find people like that. And I'm, I'm, I reverse engineered a system in a funnel to find those people and it's not pretty, it's very hard and it's very expensive, but it is possible.

Young Han [00:31:54]:
And I've, I've been able to find quite a few. So I have, I have 13.

Jim Banks [00:31:58]:
It's interesting, like, I know a lot of people that do SEO that they're really, really good at SEO. They are horrible at running businesses. Right. They don't totally, they don't sales work, they don't understand finance, they don't understand marketing, but they're really good at SEO.

Young Han [00:32:13]:
Totally. I used to work in coffee quite a bit and it was like the number one example that I would use for people that were trying to grow in coffee. It's just because you have a good barista doesn't mean you promote them to a shift leader manager. Just because they make great lattes does not make them a good people manager. It's a very different skill set. And so absolutely agree with you. Yeah, yeah.

Jim Banks [00:32:29]:
Because I, I, I'm, I'm, I've seen so many people that end up like the business goes bust. You're thinking more, how can a business that does so well with the SEO that they do, how can they just go, go tits up? To me, to me, it just didn't make any sense that they, yeah, but they would do that. But then when you look at it, you realize instead of finding the right people to bring in to help manage the elements of the business that they were not good at, they would go, I couldn't manage the whole thing. And they really couldn't manage the whole thing at all. And again, I've always kind of maintained, I know what I'm good at, I know what I'm not good at. And into your pool cleaning example, I had, I built a house in Cyprus and my wife wanted me to be stood there with the pool cleaning kind of kit and the suction pump and everything. And it was like 95 to 105 degrees baking hot. And I just wanted to be in the shade, like lying in a hammock between two palm trees while somebody can just sit there and clean the pool.

Jim Banks [00:33:21]:
But she wanted me to do it myself. I'm thinking that is not best use of my time.

Young Han [00:33:25]:
Right.

Jim Banks [00:33:26]:
And I think again, I think knowing what you're good at, what you're not good at, the things you're not good at, finding people that are better at it than you and pay them to do that for you to, to enable you to focus on the things you are good at. And I think if, if you can kind of do that, I think you've got a half a chance of doing okay.

Young Han [00:33:42]:
Yeah, I agree.

Jim Banks [00:33:45]:
So let's, let's go. I want to go back to Talk a little bit. So it's obviously, you've got so many kind of plates that you spin. How do you, how do you be a good dad in, in all of this? How do you kind of like manage the, the, the work life balance?

Young Han [00:33:57]:
I, I don't, I don't subscribe to work life balance. I subscribe to work life integration. I don't actually believe in work life balance. I think it's a, it's a fallacy and it's a myth, isn't it? It is. It's just in. It's an insane. It's an insane idea. And it's so funny to me when I have so many of my W2 friends that are like, oh, I have a hard stop at this.

Young Han [00:34:16]:
And then this is when I'm, this is when I'm on this mode. And, and I'm like, is that really possible? I, I'm, I, I'm all about time blocking, and I think that's great. And I try to spend as much time as I can with my kids, but I just feel like if I have a fight with my wife, I can't stop myself from bringing that to my work. It, like, lingers on me. And then if I have a bad work day, like, I can't help but think about it when I'm with my kids and my family. And yeah, I'm not saying I'm like taking it out on my, my co workers or I'm taking it out on my family. I'm not saying that at all. I'm just saying that it's not 100, it's not a binary thing.

Young Han [00:34:46]:
It's 20 that I have to shove down. You know what I mean? Like, lingering in the back of my mind because I'm a human being. I'm not a robot. And so if that is absolutely true and you believe that that is the case, how can you actually be work life balance? It doesn't, doesn't make any sense. Just like, you just do the best that you can with what you have when you have it. And so I just mix it all in. And so if I have to work when I'm on vacation, I'll wake up a little earlier before my kids wake up, and I'll crank out three hours and get it done. Or I'll stay up late after they go to bed, and I'll take meetings and crank it out and get it done.

Young Han [00:35:16]:
And if I can bring them with me to work, I bring them with me. And I've had some really funny experiences, like Bringing them to conferences, at conferences and stuff. And what are they going to. I tell this to my wife all the time, but what are they going to learn at school that they can't learn in business? And yeah, they might, they might, they may never remember that I took them two weeks out of like fourth grade or third grade, but I guarantee you they'll remember the conference that I took them to or bringing them on the job site and working through some sort of system or project at a job site. And yeah, and I just feel like it's all work life integration and then as it relates to how do I balance it all and make sure I'm doing all those things. I track every hour that I live. And so I do a monthly review of my hours in and hours out. And then I assess how I feel emotionally, mentally and physically about myself.

Young Han [00:36:01]:
And then based on that, I adjust the hours that I'm going to put in the next month. And I'm constantly adjusting the amount of hours I spend on what business, how many hours I'm spending with my kids and family, how many hours I'm spending on sleep and whatever. I will tell you, sleep always gets decreased first and then time with my wife gets decreased second, and then it goes into all the other elements. But I will sacrifice all those different things to accommodate all the things that I want to do. But all of this is on a five year sprint, by the way. So just to catch you up on my life here. I'm on a five year sprint to see if I can build semi retirement for myself. And it's like a big goal of mine to do this so that I can spend more time with my kids.

Jim Banks [00:36:38]:
Yeah, I would probably say if I, if I had to liquidate everything now, I probably have enough money to survive like without having to work again. But I enjoy work. It's it for me. It's kind of you. You hear people saying, I want to get to the point where I've got you money. I've got nowhere near, but I certainly have enough, like I said, to, to if I was frugal and careful, I could probably just about get by.

Young Han [00:37:01]:
Some would say that you have a few money, if that's the case, as long as you could survive.

Jim Banks [00:37:05]:
Yeah, and, and, but at the same time, like I said, I really enjoy doing what I do. I enjoy the clients I work with. I enjoy the kind of people I work with in my industry. I love the podcasting side of things that I'm doing here.

Young Han [00:37:16]:
Totally.

Jim Banks [00:37:17]:
I've got zero intention of making Money from podcasting. These people kind of like get sucked into. I got to create a podcast. I'm not going to make money. You just get sucked into. It's like just another job. Then you're not enjoying it. It's not for passion and enjoyment.

Jim Banks [00:37:30]:
It's doing it because you got to sponsor, you got to satisfy, and they're not happy. And, you know, it becomes just another big headache. Right. And totally. And I, like I said, I. I know how much money I spend on the podcast. I know how much money it makes me so expensive. There's no correlation between those two.

Jim Banks [00:37:47]:
But it's something I enjoy. I'm passionate about it.

Young Han [00:37:49]:
Yeah. Yeah, totally doing it.

Jim Banks [00:37:51]:
Right. And I love meeting people like yourself. Right. Who bring a kind of different angle to, to life and, and stories and everything. So for me, that's always the excitement, enjoyment I get from that. Right. And, and again, I, I know people that have listened to episodes that have never liked it, commented on it, subscribe to the channel, none of that stuff. Right.

Jim Banks [00:38:11]:
But they reach out to me privately, say, jim, really like that episode.

Young Han [00:38:15]:
Love that.

Jim Banks [00:38:16]:
Right. I feel like going, what the hell didn't you subscribe to?

Young Han [00:38:18]:
I know, exactly. But it's the funniest thing ever. Yeah. I have people, I have the same thing where I have friends. And because I've been actively doing LinkedIn content, so I've been building my top of funnel. My ecosystem is almost done being built, and so now I have to work on top of Funnel next year. So I have plenty of leads coming in of people that want to build a business with me or I can invest in or buy. And so I've been building my top of funnel for a year now on LinkedIn.

Young Han [00:38:40]:
And it's so frustrating because I have friends that'll literally go out of their way to text me that they, like, something or whatever responded. I'm like, you were in LinkedIn and you saw the post and then you choose to go log out, log back into your phone to text me that. It's like, why did you just say it in LinkedIn? They're like, I don't know. And I'm like, that helps me. Right? You know, just like commenting on the, on the platform. It's so funny how people are like that. But it's very, it's very normal. I get that all the time too.

Young Han [00:39:07]:
But I just want to answer your question earlier about how do I balance it all? So I just try to track everything into inputs and outputs. So I just make sure that I have a Certain amount of quantity of time that I spend with my family. And then I try to. Inside of that quantity of time, I try to make certain amount of it qualitative. So I want to have certain amount be boring time where there's no plans and you're just bored together. And there's a certain amount that's like qualitative where I try to do something that's like experiential or. Or targeted to some sort of goal. And it's very.

Young Han [00:39:34]:
It's very weird to do this, but I will say that it's. It's just something that I just. I'm an operator, so I do it naturally. And I know people think it's a weird thing to do, but I. I feel like I spend quite a bit of time with my kids, even though I'm super busy. And I'm able to do that because I quantify everything. And I. And I just sacrifice.

Young Han [00:39:52]:
Usually just sacrifice sleep. And I just do it.

Jim Banks [00:39:55]:
I think. Before I got into digital marketing, I used to sell insurance for a living. And I was really good at it. But every year I made more money. But I. I disliked the job more and more. And then I realized that no amount of money was ever gonna make up for how miserable I felt about turning up for work every day. Right.

Young Han [00:40:12]:
Yeah.

Jim Banks [00:40:12]:
When I got the opportunity to come out of it and I basically took a 50 pay cut to go and work for this dot com startup.

Young Han [00:40:19]:
Nice.

Jim Banks [00:40:20]:
But for me, it was liberating to go and do something that was brand new and exciting and invigorating.

Young Han [00:40:25]:
Yeah.

Jim Banks [00:40:25]:
And I've always said if you're good at what you do, the money will come. It's just, you should never go chasing the money. The money will sort itself out. If you do good things with good people and, you know, you have good ideas, the money side of things will almost take care of itself.

Young Han [00:40:38]:
Yeah.

Jim Banks [00:40:39]:
And honestly, I think a lot of people that are running these service businesses are probably miserable to sin.

Young Han [00:40:46]:
I. I disagree a little bit. But yeah, I definitely understand what you're saying. Yeah. I. I think that you should try to figure out what you're naturally good at, what you can roll out of bed doing and providing value for, even if you hate it. If that's what you can do to make money. And you don't have to think you could literally just like it's the roll out of bed test.

Young Han [00:41:01]:
You can roll out of bed and immediately start providing value that someone will pay for. That's a skill that you should try to figure out once you have that skill, you should build that into a business that generates money and then turn out, and turn it into an sop. So build it into an operating system that you can start to delegate it out to and farming it out. And then once you get that done, then you have a cash flow business. Once you have a steady cash flow and income, then you should go follow something that makes you happy. That's, that's my recommendation. And so I just feel like everyone has a talent, everyone has a skill. It's, it's your job to figure what that is.

Young Han [00:41:29]:
And it's the roll out of bed test. Right. So you keep working until you figure what that is and then build a business around it that you can delegate off to somebody else.

Jim Banks [00:41:36]:
Yeah. I must admit, I'm probably like too old and too stiff to roll out of bed. For me, getting out of bed is like, is a bit of a challenge sometimes. I understand what you mean. I understand the kind of, the principle of what you're talking about there.

Young Han [00:41:48]:
Yeah.

Jim Banks [00:41:49]:
So this has been a phenomenal conversation. I've loved having you on the show. Obviously all your information will be in the, the show notes if you want to reach out to you either because they're looking to sell a service business, gray hair and, and kind of looking for, for kind of a partner to, to sell to or what have you. But for me it's been really enlightening to have a different viewpoint in terms of somebody that's not necessarily dyed in the wall marketing, but clearly so much overlap between kind of what you do and what other people have done. So it's interesting that even though the titles are different, the, the role don't necessarily kind of like have too much deviation from, from everyone. Everyone else's.

Young Han [00:42:25]:
Yeah. And for all your market, all your marketing audience members, please reach out to your finance person and, and encourage them to get involved in, in what you're doing because I will tell you, you'll, you'll be way more effective as a whole if you guys partner up more.

Jim Banks [00:42:39]:
Yeah. And it's funny, it's funny you mentioned about SOPs and operating systems. Like everything I have in my business is got like a written down SOP per most. In most cases, every single thing I do, I have a video that kind of instructs what needs to be done and how it needs to be done. Amazing, right? Because then that way it's like much easier. I've always thought, well, if I got run by a bus yesterday, what would happen? And I'd like to think that the business probably could carry on because everything's written down and there's a process for it. But you know, that's right. Again, it's time consuming to do, but I think important to kind of have that.

Young Han [00:43:09]:
So totally. It's, it's literally the, the foundation to scaling a business is think about Starbucks or McDonald's, right? Like you can have 18 year olds running those things. It's, it's fantastic. Let's, you've boiled down the process so much that you can have almost anybody operate it, which is, which is the, the, the foundation to scale. And so getting those things.

Jim Banks [00:43:29]:
And things usually only go wrong when people go off script. Right? So if it says cook the French fries for 2 minutes, 43 seconds and you cook them for 5 minutes, they're not going to be like the same as if you cook for 2 minutes 43. Right. You've got to just go with exactly what it says.

Young Han [00:43:42]:
So yeah, and then it gives them the, it gives people the. If you have a structure in sop, it gives people the ability to not have to waste calories thinking about what to do. They can spend their time being creative to be additive to the sop. So this is like some, I, I know we have to go here, but I'll just tell you my last part of my operating system. It's once you build the sop, you, you, you start recruiting people. And for example, let's say I'm recruiting a marketer. I say, hey, I'm a shitty marketer. I'm, I'm not a good marketer.

Young Han [00:44:10]:
But here's my SOPS for three different ways that I generate 10 leads on a month. This one takes me eight hours, this one takes me six hours. This one takes me $200, but I get 10 leads a month doing these things. You have two months to beat this or you're fired because you're, you're supposedly a great marketer. So I have figured out how to do this in three different ways and I get, generate these results and I've repeatedly proven that I can do this with this SOP over the last six months. So your job is to beat it. And then they beat it and then that becomes the sop. And then they keep trying to beat that.

Jim Banks [00:44:38]:
Just as kind of like a bit of a devil's advocate, if you, if you knew. Again, I've walked into businesses and the first I look at their Google Ads account or their Facebook ads account and I know without even taking off my jacket, I can probably do 50% better right out the gates because they do some really goofy, stupid things. Would you.

Young Han [00:44:58]:
I'm nervous about showing you mine.

Jim Banks [00:45:00]:
Would you be, Would you be like the, the kind of. The pole vaulter Duplantis, kind of like he keeps raising the world record by 1cm at a time, right? Because he could probably go from like where it was to 30cm more. But he gets paid money for every single time he breaks it. So he does just enough to take it to the next level.

Young Han [00:45:19]:
I didn't know. That's awesome.

Jim Banks [00:45:20]:
Does it again.

Young Han [00:45:21]:
Amazing.

Jim Banks [00:45:21]:
And I'm thinking to myself, would you do that if you, if you had two months to do it? Otherwise you'd be fired. Would you go, I'm going to do it all on day one and then sit back? Or would you drip feed it a little bit at a time? Which would you prefer?

Young Han [00:45:34]:
Which I would just talk to the client about it, right? Yeah, I would just talk to the client. Everything's a math equation for me. So I would just say, hey, here's the net result, here's the value, and I'd love to get compensated for this increased value if I do these things. And if it's a risk for you, then let's decrease the forward risk and increase the post post payment. That's how I would do it. I would just make it a math equation. I'm constantly doing math equations like this because a lot of times when I, when I have a gm, I give them equity. So equity is also based on future value based on the compensation.

Young Han [00:46:03]:
And so I'm always doing these math equations saying, hey, risk reward, is this for me? What do you think it is for you? And then building out formulas that make sense. But I would just have the conversation with the client and let them choose their own adventure.

Jim Banks [00:46:13]:
I've always said hire me for you for expertise, not utility. Right. I'm not kind of like that's, that's not the good use of, of money, but hiring me to kind of do things that are not best use of my time. Right? Hire me for the expertise that I bring to the table that you don't have. And in which case we can usually do so many good things because of that.

Young Han [00:46:30]:
Yeah, it's great, man. I love it. Thank you for having me.

Jim Banks [00:46:33]:
This has been absolutely phenomenal. I'd love to have you on and as I said, all your information will be in the show notes and it really raised me. Say thank you so much for being a great guest and look forward to speaking to everyone else on the podcast next time. And I'M Jim Banks, and I'll talk to you soon.