711: Bootrapping into Silicon Valley

Daniel Fagella. He started a mixed martial arts gym when he was an undergrad and sold it after getting a UPenn graduate degree in cognitive science. He did turn his grad school thesis on skill development into an ecommerce business that grew for 4 years, reaching $4.2M in top line sales and recently sold it for a million dollars with 90% paid upfront. He's now using his funds for TechEmergence.com in order to influence global AI policy for the better.

Famous Five:

• Favorite Book? – Plutarch's Lives
• What CEO do you follow? – Last bio he read was Marcus Aurelius'
• Favorite online tool? — Asana
• How many hours of sleep do you get?— 6-7
• If you could let your 20-year old self, know one thing, what would it be? – Daniel would tell himself that dealing with the existential human condition could be done by contributing to a much bigger world

Time Stamped Show Notes:

• 01:20 – Nathan introduces Dan to the show
• 02:08 – Dan was studying skill development and goal setting science in psychology for his undergrad
• 02:17 – Schooling was expensive; Dan decided that he'd rather use himself as a skill development guinea pig than a pizza deliverer
• 02:40 – Dan started teaching and making money at the back of a carpet store
  • 03:11 – Dan's jiujitsu gym was the smallest business back then
  • 04:03 – Dan sold the gym after 3-4 years with $250K ARR
  • 04:14 – Dan was 25 when he sold the gym
  • 04:41 – The membership fee was $157
  • 05:07 – Dan sold it for over $100K with 10% upfront to his right-hand and friend
  • 05:45 – The business ran for over 2-3 years after that
  • 06:05 – Dan took $30K from the $113K
• 06:36 – Dan was also making $20K a month selling martial arts instructional resources online
• 07:09 – Dan was using Infusionsoft for his e-commerce business, Science of Skill
• 07:56 – The e-commerce was doing around $200K top line
• 08:42 – The biggest cost for Science of Skill was on merchant processing, customer acquisition, advertising and affiliates
• 09:26 – Dan likes to spend half of his CLV (Customer Lifetime Value) on acquisition
• 09:42 – The CLV for membership programs were around $100 and affiliates $50-60
• 10:00 – One of the affiliates was Survival Frog of Byron
• 10:23 – Byron drove Science of Skill into 6-figures
• 10:44 – Dan was paying affiliates upfront
• 11:15 – Byron of Survival Frog was on Episode 395
• 11:44 – There are agencies who get onto their email list by paying
  • 12:14 – One of the agencies is com
• 13:02 – Finding the right people to advertise and won't tag you as spam
• 13:11 – Dan will find firearm sites in com—go through the website owners and email them to find the right people to target
• 14:11 – Dan sold Science of Skill in February 2017 for a little over a million dollars
• 14:22 – Science of Skill was valued by the multiple of net
• 15:11 – Science of Skill revenue in 2016
• 16:27 – Dan's ultimate goal
• 16:31 – The buyers are a private group of 2 buyers in Ohio who previously ran SaaS businesses then sold them to the government
• 17:05 – Science of Skill should be at Inc 500 for 2016
• 17:13 – Dan sold Science of Skill because he believed he has better and bigger things to do in life
• 17:25 – Dan's core objective involves the global conversation of neuroscience and AI
• 17:48 – TechEmergence focuses on the business applications of AI
• 18:08 – TechEmergence is not making money, but will make money primarily through advertising
• 19:09 – The goal now is to scale and make traction
• 19:21 – Current cash burn
• 20:05 – The Famous Five

3 Key Points:

1. You can start your business literally anywhere.
2. Focus on your goals and objectives, even if it means having to burn cash.
3. The future will probably evolve around n_euroscience and AI.

Resources Mentioned:

• The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Klipfolio – Track your business performance across all departments for FREE
• Hotjar – Nathan uses Hotjar to track what you're doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
• Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible– Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books

Show Notes provided by Mallard Creatives