Partnerships Are Great

Partnerships Are Great

Evan Knox

Devin Miller

The Inventive Journey

Podcast for Entrepreneurs

11/9/2020

The Inventive Journey

Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.

ai generated transcription

i would lean into partnerships uh my partner is one of my partners is really good at like like board of directors and getting all the like structure set up and phantom stock and all that really advanced stuff that i don't fully understand but i do know that something i've learned is that partnerships are great and if you can bring people in even if it's for a small percentage of your company or if it's even conditionally based i love that idea because it gives people skin of the game and they want to make it work [Music] hey everyone this is devin miller here with another episode of the inventive journey i'm your host devin miller the serial entrepreneur that is started several businesses and grown them to seven and eight figure companies as well as the ceo and founder of miller ip law where we help startups and small businesses with their patents and trademarks and today we have another great guest on the episode evan knox and uh evan uh graduated from high school joined uh i think it was joined the church mission foundation did some work for the church for a period of time um and his wife i think graduated from michigan state and they were working to pay off some debt and throughout all that he decided he was going to start a uh um what was called caffeine marketing because he wanted to help out with his dad's business originally and good job way to be a good son and help out your dad and then once your data your data and i think your grandfather passed over a period of time you decided hey i wanted to you wanted to start transition over and help start helping other startups and small businesses and kind of shift it from what would be social media marketing to more of a marketing strategy or more of a holistic look at it and developed a business that you did over a period of time for um with some partnerships and you've grown it then kind of to where you're at today is that a fair summary of your journey yeah that's pretty good i like it all right so now with that now that i've given the quick intro why don't we dive in a bit deeper so tell us a little bit more about your journey and how you got started absolutely so i originally started doing marketing when i was working for my grandfather so i would work at his jewelry store here in the atlanta area and he would teach me i mean i was like a teen i was like maybe 12 13 years old or so and he would take me aside he'd be like all right we're going to place this ad the atlanta symphony here's what we're going to say we're going to use these pictures these are some of our most popular products here's what i think it's gonna appeal to this demographic here's where we're choosing this ad this format etc and i really thought all of the strategy that was really interesting even at a young age um and then it really became interesting to me when i was working at a non-profit in charlotte um and i'm like half my role as marketing there and i love the the math and strategy side of it so the paid advertising one thing i'll jump jump back just a little bit in your journey just because i thought it was interesting so you started out right out of high school you went in and did work for a church at a church mission foundation is that what you mentioned right yep so i went from so i went from high school to join an organization called ywam so it stands for youth with a mission and essentially you get to be like a mini missionary like you don't have to commit to be there for years or your whole life you get to go out there for six months at a time um and so i joined ywam to go and i lived in australia and then thailand and did essentially like christian mission nonprofit work with them and then eventually i went back to georgia and then went to colorado to do their school so they have like a university system and so i went there and then i started to work at a church in colorado met my wife in colorado we moved and went down to charlotte so the east coast and worked at a church there called elevation church and then at that point is when my my dad passed away so my dad was a business owner he um just real quick and then we'll absolutely dive into that so one thing i thought was interesting one of the reasons i hit on that so i served a religious mission for my church as well so i'm nice uh church of jesus christ of latter-day saints also known as lds or mormon um but i was in taiwan for a couple years and you know that's fine different but i also went abroad and did that learned that's where part of my mandarin chinese and i went back when i after i got done with that and added that on as a double major so i just thought it was an interesting commonality that we've at least done different different forms or fashions than missions for our churches so i think that was cool i loved that yeah and i saw um like i met a lot of like lds people like over in thailand because you just you're like the only other non asian ethnicity out there you know so you're like oh hey got a little bit more hey we're the only other people that especially if for this year's that wear white shirt and tie and suits and whatnot you certainly stick out a bit yeah just a little bit we were like we were like riding on a tuk-tuk one time which is like a little motorcycle thing and then we like came up on a traffic light um next to some guys on their bikes and they're you know the full outfit so that was awesome they're like hey how's it going like they're like oh hey it was a great time we really enjoyed that moment so all right cool this was a bit of a side note but just fine it was interesting the the commonalities there so you did that for a mission church and before you so you had your dad you wanted you you were starting to jump into that what did you decide to what made you decide to to leave the the church you know the church mission did you transfer to adjust it was more of you wanted to help your dad or you wanted to do something different or how did you kind of make that initial first transition yeah so i definitely loved working for my family growing up um it was full of i said every day was interesting because of a family business there's like different levels of health and i'd say ours was in the middle any day it could be a different direction um but it was really cool and i really enjoyed it but my grandfather was the one who actually so my dad owned a diamond company so he would import diamonds from israel and sell them to people like my grandfather he's like like different jewelry stores so he did more b2b and then he also helped some of my grandfather's jewelry store um but then my grandfather actually ran the brick-and-mortar retail jewelry store and my grandfather when i was like 17 or 18 he came up to me i think he sleeps like 18 or something like that he's like hey evan i'm not allowing you to work in the jury business he still tells me this to this day like it's like one of his more um i think it's actually one of his more proud moments because i feel like and i don't know that he's correct like i think that i probably could have made it work and you know done well in that um but i think to him he feels like that was the limitation for me if i would have stayed there and stayed in the business he felt like there was more out there for me than that so that was why i didn't stay in the jewelry industry with my my dad my grandfather and then why i went from ministry over to um essentially business like just marketing business instead of just uh non-profit marketing was that my dad had actually passed away so i came down to atlanta um and i thought to myself you know what i i really want to learn a lot more about business my dad's no longer with us and my grandfather's about to retire but i can help other business owners like them and i really did enjoy this idea that i could get really up to speed on all the different types of businesses which is actually really helpful because now i'm i have caffeine marketing but i'm also a partner in a group called tactos and tactus is a holding group where we acquire grow and sell businesses so we essentially like it's like fixer-upper but for businesses um it's really fun yeah it's really cool and so anyway we do that and my like diverse skill set of marketing with working a lot a lot of different b2b b2c companies making that profitable for them has been really helpful for our investments um so it's really cool so one question diving back to a little bit in here so you started caffeine or caffeine marketing did that you want to help your dad's business and and you know help the family businesses and then you said your what was it both your dad and your grandfather passed away over a period of time so my my dad passed away um and my grandfather retired so he had been working in it 50 55 years he had owned his store and then he essentially handed that over to my uncle um and you know my grandfather just because he can and i think he likes to do it he'll go in like once every other week and just do something kind of piddle around but people love to see him he really is almost like he's one of those people and i i kind of think i'm a little outgoing but he is on a different spectrum like he is incredibly gifted with people it's taught me everything i know about communicating with people i'm probably an introvert that he has helped shape me to communicate with other human beings and he would we would walk in just the middle of atlanta like just everywhere we went he knew somebody or somebody knew him and it just even so much true that i went to a my skis had busted so we live in atlanta so we can't actually like snow ski out here but i was flying back from colorado and skiing and my ski bindings cracked and my skis you know got damaged and so i remember going into the ski shop and then saying something like oh do you live around here and i was like yeah like i kind of grew up in the area my grandfather owns a jewelry store and he's like oh yeah what's the name of this like knox jewelers and he's like oh i got you don't even worry about i know bob no bad for whatever yours you know bob would be mad if i charged you so i'm like all right cool and then the funny thing is that was how my gran i'm more much more of an introvert i don't i'm not one that just loves to go and talk to strangers and do a ton of that but that was how my grandpa so i grew up in a small town it's here in utah it's you know i think my graduating class in high school is like 180 people you know at least when i grew up it's grown a lot since then but when i grew up everybody kind of knew everybody but my everybody knew my grandpa and everybody always talked to him he was the most you'd go sit down next to a stranger strike up a conversation yes usually if i sit down and buy a stranger i pull out my phone so i don't have to strike up a conversation but i think i think that uh personality type and that is really cool that uh some things to learn from both our grandpas 100 and that's i mean that's what made him so special and i mean mine's still with us but i mean he's he's really old you know what i mean so he's not it's quite you know getting it going as he used to be it takes him a little longer to walk across the room that's all all right so now jumping back we're taking off of our side and jumping back to the conversation so dad passed away and sorry sorry to have your dad pass away and grandpa retired so how did you and uncle takes over the business how did you then what was it how did you make the transition to going from working with the family business and running that to kind of starting your own business or putting more of an emphasis on building clientele and doing all those type of things so when we moved down from charlotte i thought to myself oh golly i've been doing this church thing for a while i just need to have a little break you know it's like i'm going to go get a normal sales job and then i went and got a job at a car dealership because my friend told me that that was like a really good way to like make money and about three weeks into that the owner was like throwing things across the room of the car dealership and was like yelling at people and cussing them out and i just thought you know this is not this is not what i want to do like i have this i i know i can start this thing um cafe marketing but i just know it's gonna be so much work and i knew how much work it was as a kid to start little quote businesses like to hire my friends out to do uh lawn care or like do marketing for a little lawn care business or move people or um whatever you know i knew how much work that was i thought man if i'm gonna like actually do this this is gonna be a lot um and my wife was like you need to do it like you could totally do it um and so she kind of like i wasn't i don't think i was nervous to do it i just almost i don't know i was like god so much effort and she was like just go freaking do it and i was like okay all right whatever so building clientele was especially hard um and it was hard because i didn't have any capital and in fact we had around 90 000 in student loan debt when we got married and by that point we probably had like 60 or so left um and so yeah i mean i was about every client i got it was about paying the bills and paying all student loan debt so i couldn't reinvest i could i just chose not to reinvent my own advertising and instead just do like organic okay so and how long ago was that when did you just kind of start doing your own thing with caffeine or cat or branching out from the family business um so i started caffeine maybe four years ago three or four years ago yep um yeah i started all organic and then trying to balance things out student loan debt we paid off all of our debt within three years um of being married which is like super cool and we love that and then at that point it was kind of it was a lot easier to run caffeine um because we were not operating like really nervous all the time it felt like and yeah then creating my own paint strategies creating a marketing funnel creating a sales funnel um and then i you mentioned it in the intro but i started thinking all right i really want to do social media marketing right because it's kind of this new thing a lot of it intimidates a lot of business owners but then i found the real thing that the business owners were looking for was somebody to help them grow their company and they didn't know how and so they were kind of just trying stuff like throwing stuff on the wall hoping that it would ultimately be the thing to help them grow their company but in reality they needed a guide or somebody to help them come in there and give them a strategic vision and a marketing plan and execute on it because they either didn't have time didn't have the team for it whatever um and so that's why we pivoted from doing social media to do more like overall marketing strategy and execution so now we do websites paid advertising um messaging really anything that is going to make marketing profitable for these small business owners okay so you do that now you so you made that transition getting your own thing going got the student loans paid off are starting to finally be able to reinvest in the business now you look and say now what's the next six months to a year look like for you where are you heading what do you think where do you think the marketplace is where are you going to position yourself and how you're going to keep growing so this year has been one of my favorite years in business and the reason is because i'm really lean into this partnership idea and when i started it was just me right like i was like i'm just gonna figure it out myself and part of me i think just didn't study as well i was like i just wanted to be my thing which is totally fine that's a totally reasonable request but i had my first partnership when i became a partner in a fly fishing guide business which i still am today um it's the number one fly fishing business now in in georgia it's called bowman fly fishing and i'm not like i'm not overselling it like it's incredible the guy that is my co-owner does an awesome job um and so when we came together with this partnership i thought man there's something really to this because while i love working with clients i really love working with partners because when you've got somebody in there in the trenches with you you're kind of going arm to arm with them you're figuring it out together it's no longer this hey i don't know if like this x number dollars per month is worth it you know that i'm paying this agency or whatever it's never like uh how do i reduce this expense at all times it's how do we grow this together so it becomes a different question for the other person on the side and i really enjoyed that because we could do better work we could do it with a lot more trust and so then i met these two other guys they have similar vision they have different skill sets one guy is really good at finance as well as like networking and building relationships and deal making another guy's creative operations and so we formed a group called tactos which is what i mentioned earlier and that's when we either acquire a business or we acquire a percentage of a business and then we either take on ownership like we take over operations or we have them implement a system and then um you know turn around and sell them so it's been it's really really fun because it's no longer yeah it's just tough when you i feel so bad and that's why i started caffeine because i feel bad for the business owner because they know they have they never got into their business to do marketing they got in there because they had an awesome product or an awesome idea or they wanted to do something like fly fishing guiding you know um so it's tough because they're yeah they're having to balance it like they're just always unsure um so i like the partnership no i i think that's cool so one question maybe it's kind of a side note so you mentioned you know that you guys go out and you find businesses you'll either take over acquire invest in or whatnot how do you identify which businesses you look into that you want to partner up with take over choir and everything else is it just hey this one looks like a good opportunity this one looks like we have the skill set this one looks like it's floundering we can get a good you know good purchase price at it or how do you kind of make those decisions so there's a really i mean it's a spreadsheet like it's an excel spreadsheet that we enter in different values for our exact like deal making recipe to make sure it's a good fit for us um i'll say characteristics are typically that it's past its first year so that it's got like a proven customer race proven demand a proven growth rate um for sure opportunities that we can help with are inefficiencies for our operations guy and then another one is marketing so if they're not doing any marketing or they're not doing great marketing that's a huge upside for us because it's just about plugging and playing our strategy and then the company comes vastly profitable um so that's also really important or you might have an owner who's just interested or disengaged or wants to try something new a lot of business owners want to become entrepreneurs and they want to start multiple businesses and after 10 years working on one business they're kind of tired and they need somebody else to to take it over um so it's uh yeah so it'd be i would say not a brand new business it's gonna have some traction it's gotta hit a certain number of revenue generally it's over a billion dollars in revenue um and then beyond that we like online businesses just because they're easier to scale that's not we're looking at a couple right now that are not they're like a hybrid brick and mortar and online but we do like online because economies of scale is really good so it's just a simpler equation it's like all right if you sell number x number of goods then here's the cost of goods sold and here's how much net profit you have and that's what we can work with for advertising budget so it's just simpler that's awesome all right no that makes perfect sense and sounds like it's a fun thing we're gonna or diversify get a work of different businesses and get a dip your toe in a lot of different waters so it sounds like a fun way to approach things well as we start to get wrap up towards the end of the podcast i always ask two questions at the end so why don't we jump to those now so the first question i always ask is so what would throughout your journey what was your worst business decision and what did you learn from it this is my favorite question i'm so glad that you asked it um my worst decision was to take profit from the company and buy moviepass stock that was a just ridiculous no i didn't like i wasn't like irresponsible i didn't take some like absurdly large number or take all of our profit or whatever but when i like a distribution at a distribution i took a distribution essentially took that and bought moviepass stock which is so funny because i learned so much from that from doing that um and one is have integrity across all my investments so like i would never run moviepass the way it was ran but i was just caught up in the emotions of it and i was like oh it's hot it's new you know um but running a company at a loss is not something that i am personally a fan of um so i was like why did i invest in that and then also i knew to just stay in my lane like evan if you want to play in the stock market just go get an index fund um or go make a subscription motley fool like don't don't go do your own thing um so that's my worst business decision but i loved moviepass it was like i never understood how they were ever going to make any money but it was it was great to use their product while i was in business because i could go watch a whole bunch of movies without having to pay a ton of money so yes we could make we could cost them 250 bucks per month for every 10 they took from us so it's great exactly it was it was a great product now i get i never understood how they were ever going to make anybody and they never understood the business model but it was it was a cool idea so yeah if you can bring back moviepass i'll be your first customer okay good no no well right now with all the theaters closed i don't even know how you'd bring it back so you might have to wait a year or two it probably would have gone under any way at this point exactly all right second question i always ask is so now you're talking to startups and somebody that's just getting into startups or small businesses would be the one piece of advice you'd give them i would lean into partnerships uh my partner is one of my partners is really good at like like board of directors and getting all the like structure set up and phantom stock and all those really advanced stuff that i don't fully understand but i do know that something i've learned is that partnerships are great and if you can bring people in even if it's for a small percentage of your company um or if it's even conditionally based i love that idea because it gives people skin in the game and they want to make it work but buy out causes is really important too there's we've bought businesses where they haven't been soured so like those relationships have soured but at a macro level my experience has been great with them so far all right fair enough so all right and i think that's a good take away and i think that if you can find a great partner it's absolutely somewhere you can lean on and it makes all the difference and if you get a crappy partner it can also sink the business so i think that that's the the balance is to find a partner that will help rather than hinder the business so i think that's a good a good good thing to keep in mind as you're getting that going into startups and small businesses was people want to now find out more about your services they want to use your marketing services they want to be an employee they want to invest in you they want to be your next partner they have a business to pitch for you to take over acquire any or all of the above what's the best way to reach out to you well there'd be a lot there so we'll just stick to two caffeine.marketing or evan knox.com and i'll direct you to the proper um one from there so all right that makes it simple so um encourage everybody to reach out if they can use your services or want to find out more to to go to either either place um well evan thank you for coming on it's been a pleasure now for all the all of you that are listeners um if you uh have a your own journey that you'd like to tell feel free to uh go to inventivejourneyguest.com and apply to be a guest on the podcast we'd love to hear your journey if you're a listener make sure to click subscribe so you get a notification of all the new episodes as they come out and lastly if you ever need help with patents and trademarks feel free to reach out to us at millerip law thanks again evan it's been a pleasure wish the next leg of your journey even better than the last thanks i appreciate it thanks for having [Music] me you English (auto-generated)