#153 - Inside the Entrepreneurial Mind of Tim Calise

Ever wondered how it feels to touch a billion-dollar credit line at age 23? Our dynamic guest, Tim Calise, did just that. But the real twist? He returned it all, choosing to build a sustainable, foundation for his future instead. Join us as we navigate through his riveting entrepreneurial journey, from making high-stakes financial moves to pioneering successful business strategies.

Tim Calise isn't just a risk-taker; he's a powerhouse of innovation. He plants his feet firmly into the realms of non-linear growth, fostering powerful relationships with mentors to broaden his perspective. As he unpacked the rollercoaster ride of his entrepreneurial journey, we explored the five core functions of a business, the effect of early entry on business and content creation, and the importance of crafting unique products that set you apart. Listen how he took GymLaunch from a boots-on-the-ground concept to a licensing play, creating a better ecosystem for gym owners.

We wrap up this enlightening conversation with Tim sharing invaluable insights about his consulting business and the Co-Creator Community. From mastering recurring revenue to shortening the learning curve to avoid foreseeable mistakes, Tim guides you through the labyrinth of entrepreneurship. And there's more! DM Tim the word 'Jordan' on Instagram and get ready for a special surprise. Don't miss this opportunity to fuel your entrepreneurial spirit with Tim's unique insights and experiences.

How to Reach Tim: 
Website: https://timcalise.com/
Linkedin: https://www.linkedin.com/in/tcalise/
Instagram: https://www.instagram.com/tim.calise/?hl=en

To Reach Jordan:

Email: Jordan@Edwards.Consulting

Youtube:https://www.youtube.com/channel/UC9ejFXH1_BjdnxG4J8u93Zw

Facebook: https://www.facebook.com/jordan.edwards.7503

Instagram: https://www.instagram.com/jordanfedwards/

Linkedin: https://www.linkedin.com/in/jordanedwards5/

Hope you find value in this. If so please provide a 5-star and drop a review.

Complimentary Edwards Consulting Session: https://calendly.com/jordan-555/intro-call

Transcript

Speaker 1: 1:00

Hey, we got a special guest here today. We have Tim Khalees, at the age of 23, he raised over $325 million for a hedge fund and had an access to over $1 billion credit line, and then, when you have all that and you know there's stock market crash coming, he decided to give it all back. He's also been part of the executive team at GymLaunch, alongside Alex and Layla Hermosi and, most importantly, he's a husband and a father to three. So, tim, I'd be remiss if I didn't ask what was it like, working so hard to raise all this money and then just to give it back, even though it's probably the best decision you ever made? What was that like? What was the thought process? How did your team think about that?

Speaker 2: 1:50

Yeah, so that was a point of my life where I was single.

Speaker 2: 1:53

I had spent kind of two to three years kind of figuring out our niche and going and literally crisscrossing the country meeting with different investor groups, and so clearly the effort and the sacrifice was there.

Speaker 2: 2:06

But really from an early age I think it purely came down to the idea of I knew what we were there to do, and the hedge fund industry and investment management in general at that time was very much like the Wild West and we were able to raise that type of capital kind of being and approaching the industry a little bit differently and I think we just were able to, quite frankly, stick to our morals.

Speaker 2: 2:32

We were conscious enough and, I guess, smart enough at the time not to kind of venture from what we knew we were good at. But yeah, it was probably the most painful kind of financially big step back for us. But at that time my wife and I were getting married shortly thereafter and so it ended up being kind of a great closing of the chapter and has allowed me to keep a number of very valuable and influential folks in my network who remember those days when now, when I call them and ask them for a favor. Typically they'll take my call. So it was a short-term loss for a long-term gain, because I had a lot of years ahead of me.

Speaker 1: 3:15

Absolutely. I love that because there's so many people who are concerned about they might have a nine to five job and they're like I can't take a step back and make less money, let alone you're saying I've worked three years blood, sweat and tears and everything and I'm just giving it back. But it's that long-term perspective that most people completely miss.

Speaker 2: 3:37

Yeah, it's. I think in anything in life there is no kind of linear direction. I mean, we're all kind of in the investment community, so stocks, real estate, everything doesn't go straight up. There always has to be and we used to call it we would always retreat to a position of strength and in stocks you'll see prices will go up and then they'll come back down and they'll stabilize for a period of time before they go higher.

Speaker 2: 4:02

And there's so many examples where you need that kind of consolidation period in your life. It isn't a trajectory kind of up into the right without any kind of backtrack at all, and a lot of that is especially in kind of technical analysis with stocks. If you see a price going up into the right without any retracement, the question isn't is this going to go forever? It's a question of when is it going to come back to earth? And I think if we ignore the short-term sacrifice, if you will, to use that word of or short-term consolidation before we do something else, it's just a matter of when it all falls apart, because it's just unrealistic to believe that we can always make kind of one better choice in front of another without ever having a chance to build that foundation again, then, on which we can kind of build the next chapter.

Speaker 1: 4:55

Yeah, I enjoy how you took the stocks and related it back to your life. I think that's something that very few can do. So, tim, where did your journey begin? Just to give everyone a little more context, yeah, to the great dismay.

Speaker 2: 5:10

I have two sisters and I was the kid in middle school who brought a briefcase to work. I grew up in a family where my dad was in professional services, so he was putting on the suit in the morning, going on the train to work that kind of paradigm. And as a young kid you kind of mimic what you see around you, and so I kind of looked and dressed the part as much as I could. But I realized kind of in the kind of early to mid teens that although I had a lot of kind of commonalities with that paradigm, I was distinctly different in that I always saw the world in shades of gray and saw problems to be solved. I would always taking stuff apart, not always good at putting it back together again, but I liked the idea of kind of understanding the underlying components of how things go, how they operate, how they're assembled, and so that was my entrepreneurial kind of bent coming in. And so in college I founded a late night snack delivery business.

Speaker 2: 6:11

I went to school in Washington DC and so that was kind of my first official foray into the world of business ownership and entrepreneurs. And then after college I started that hedge fund or grew that hedge fund significantly. And then from there I got into technology and fitness, which was always a passion divine, and that's how I was introduced to Alex and Layla Hermose over at Gym Launch as a gym owner. And then I came on board and directed part of the sister companies there at Gym Launch and now I've got the great pleasure of kind of packaging the last two decades of experience, all the bumps and bruises, proverbial and literal, to hopefully help the next kind of crop of entrepreneurs shorten the learning curve and reduce that pain cycle that is inevitable anytime you do something new.

Speaker 1: 7:01

Absolutely, absolutely. So I feel like so many people struggle with this, which is the concept that you were explaining, where you're like I'm a kid, they want me to follow the rules. I kind of want to like make the rules and kind of change my own rules. So how did you go about in college making that first business? How was that even started? Because there's so many people that think, oh my god, you have to quit and you have to go all in and it's like no, I mean, you can do, you could build on the side and we can see where it goes. So how did that work for you while doing college?

Speaker 2: 7:35

Yeah, I think the source of the question is a really good one, which is it's all about how we perceive risk. Now, if you're in a job, that gives you maybe flexibility and it kind of serves a purpose and I'm actually a big advocate in the early days that you should learn while you earn. You don't have to take somebody's got to pay the bill. You have to earn the education one way or another. You can pay it in tuition, you can pay it as time or you can pay it with I'm going to quit my job and learn it and there's a financial, obviously, kind of investment you're going to make until you can learn the things that you need to know to be successful. For me in college, it was simply that we saw a problem, which was we went to school. I went to school in Washington DC and in the area right around the White House and that area is defined as kind of where all the political consultants work, a lot of folks that commute in from Northern Virginia and Southern Maryland for the day and as a college kid we just didn't see. There was nothing around, there was nothing open. 7-eleven was literally the only option for us as college kids late night when we were just getting started going out for the night and things like that. And so we felt it it was a problem that we had and we said what if we created a late night option, so when you were coming back from wherever you were, if you wanted ice cream and cookies and that kind of stuff, if there was an option for us? And so, in absence of someone else doing it, we decided to do it ourselves.

Speaker 2: 9:05

And I think the core of the process I think is the most important part, which is we came up with the idea, or we realized the idea at like 3 o'clock in the afternoon on a Wednesday and by Thursday afternoon the site was live and we had an idea of what we were going to do.

Speaker 2: 9:22

And I think that is critical for anyone who's like I wonder if I could do this. Then If you can validate that there's an audience and you pick the shortest possible way to validate your idea with that audience, you will save yourself a ton of time, effort, sacrifice, heartache of building something in a vacuum and hoping someone will buy it, instead of the other way, which is start small. If you have that nine to five, it might be the nights and weekends. I think we probably all watch Shark Tank and there's those ideas of you know I do this from 8 pm to 11 pm every night. Just start somewhere, but find the lowest common denominator, the lowest entry point that you can for the thing you want to build, to validate before you kind of take that next step.

Speaker 1: 10:12

Yeah, and I think that's so important, especially the action, because it's literally inside of a 24-hour period the action was taken. You guys could have sat there for four years like college finish, come back, meet up at the five-year anniversary and been like still no one's done this. This would have been a great idea and that's how a lot of people live, where they just aren't in that action state and I think it's so important to take that action as soon as you feel it. And, like you're saying, the barred entry super low. Like when I started this podcast, I saw the opportunity when it was COVID, zoom was picking up and I go $12 a month, let's get it. You know what I mean? It's the cost of Zoom premium and it's the cost of the provider bus sprout $50 a month.

Speaker 1: 11:02

I'm in, let's give it a whirl. You're going to meet incredible people and people don't they always go. I don't get it. I don't get it. You got to get out of that fear of failure, that fear of rejection, and jump right in because you're gaining the confidence. How did you feel afterwards, even just starting the idea? Because it proves to yourself that there's so much more inside of you.

Speaker 2: 11:24

Yeah, absolutely, and a kind of shortcut way to think about this. There's two pieces of advice I would give you, you know. The first is there are five core functions of a business. There's basically lead gen, which is how do I kind of create demand, how do I introduce myself or the idea to an audience. There's lead nurture, which is what if it's not an immediate sale, what do I do and how do I kind of create ongoing interest and engagement with me? There's the sale, so how do I actually convert someone to give me money? There's the delivery of the product, and then there's how do I retain them or keep them for a longer period of time in or send them or what have you, you know, after they've already become a customer? And so if you look at those five things, the question is how easy can I make all five of those, just so I don't have a break in the chain? So for us it was lead gen. Okay, we're going to cater to college students. Heck, we're college students.

Speaker 2: 12:20

So we called a bunch of our friends and said, hey, if there was an option to get ice cream and cookies and stuff like that late night, would you be interested? Yes, fantastic, nurture. Hey, can you go tell a bunch of your friends that we're going to have this late night thing and go to this website and give us a try? Fantastic Sales. We had a website. It took us about two hours to code, we put some products on it and we were off to the races. You know delivery. We were part of a fraternity and we had a couple of friends in our dorm. Do you guys have a bike? You know, awesome, we're going to use bikes. It's 11 o'clock at night. We can get around the city more efficiently on a bike. Can you help us out? We'll pay you minimum wage. Fantastic Resale and ascension. How do we keep people coming back again? Well, thanks so much for your order. If there wasn't something you wanted and there was something you'd love to see, please let us know.

Speaker 2: 13:13

But it literally took us 24 hours to walk through that and go. Have we just figured out a way to cover the bases? Because, especially in the early stages, the only metric that matters is the number of offers that you make, because, as we all know, affection is the problem in most cases. You sit and you tinker and you think and try to optimize. Just take action, make an offer. If you make a sale, fantastic, you learn something. If you didn't, so be it. Why didn't you buy it? Can I give it away for free? Ok, I can't even give it away for free.

Speaker 2: 13:49

Chances are you're either not my avatar or my idea is not going to work. Yeah, and you move, yeah, and then and part of that is just the idea that the the thing that we knew very clearly even at that time, it was like we are not the business and the business is not us. If it's a bad idea and it fails, it was the business idea. We can come up with a thousand more. We didn't fail and I think, getting over that psychological hump and be you know that that risk can be reduced by simply going out and pre-selling the thing you want to build, like, hey, jordan, I'm thinking about doing a course, and the course is on how to start a business without capital. I know that you start businesses. How does that sound? Oh, that's really interesting. If I charge $49 for it, would you be there? Awesome, great. Do you want a visa? American Express, you know how do you want to pay for it?

Speaker 2: 14:38

Yeah, I'll send you a link and we're going to do it. In a week or two. I'm going to get a couple other people and we're just going to do it. You know we'll do it live.

Speaker 1: 14:44

Yeah.

Speaker 2: 14:45

Fantastic. I just did $500 worth of sales and I haven't even built the product yet.

Speaker 1: 14:50

Absolutely. And it's so powerful because the other thing is most people want to sit there and do so much work in the planning phases Like this is, honestly, one of the things that kept me with Edwards Consulting and doing the coaching is that I had clients paying every single month. So when you set them up on these retainers and these monthly payments for me it was I have to show up For them. Even if I'm not recruiting new people, I still have to retain these people. And that's what people don't realize is because that's what becomes the part where it's wow, we're seeing the feedback.

Speaker 1: 15:24

So if you guys, first night we get five people to reach out Cool, five deliveries, nice. Next night, 20 deliveries, 50 deliveries, 100. You're like, ok, things are breaking, problems are happening, we have to make more. But it becomes a cool cycle where you're like this is working and then that fulfillment of going I know this is working because you're telling the story I go. The bike delivery how many people would have given up on the bike portion that we have to rent a bike from someone? They've been like we don't have the money, we're broke too. Exactly.

Speaker 2: 15:56

So I think, at the end of the day, what we're all trying to do is to basically create some kind of value exchange, and so the question is who do you want to exchange? Who do you want to enter into that exchange with? And what is the thing that we are? What's the widget? And if you just think about it that way, I just think we get into this. How can I optimize pricing? How can I charge the most? Maybe I can do this. Maybe I can't do the first two or three for free, and you'll figure out your niche and your confidence level will be higher. And then you go okay, cool, if I got people showing up for free, maybe you will charge 10 bucks. Okay, that was easy. Everybody still said, yes, maybe we should charge $25. And it sounds very rudimentary, but, just like as entrepreneurs in general, we think that our next idea is going to be the biggest and the best, the last.

Speaker 2: 16:51

Statistically, your first idea is actually never going to be your last. There are very few people that hit, you know, strike gold on the first one. It's just like clients. If you think you have to get it perfectly from the beginning, you're never going to start. But if you look at it as a series of offers. I just fundamentally believe the people that win versus the people that don't are the ones who can go through the learning cycle the fastest. Yeah, and if you make it a game, if you're like it's going to take me a thousand times to learn, do you want that thousand to take you 50 years or do you want to try to do it in the next 30 days? Okay, I need a thousand interactions in 30 days. So what do I need to do that? I need to call DM people. I need to call, I need to whatever. Like now you can at least quantify the learning process and you go. I'm not even going to look at the results until I'm through the first thousand.

Speaker 1: 17:40

And that is so important, what Tim just said there, because I was looking back on my notes from 2020 and I was looking at growing the coaching thing and what I ended up doing. I looked at my notes and it said reach out to five people Five people. Of course there was no progress. What are we talking about? I sat there and I go this is silly. This is silly because when you look at it and you go, oh, why did that not happen? Because you barely tried you could walk, you could literally fall over and talk to five people.

Speaker 1: 18:13

And it's just realizing what Tim said there the learning cycle. And people don't even know what that means. And then it's how many is in the learning cycle? What's a good number in the learning cycle? And David Meltzer said it when he was on the podcast. He talked about that concept where he goes I know I know what I'm looking for 50 knows Get me some knows. I want the knows because then the yes is coming. Because that's the way you got to think about it. You got to rearrange it in your brain, you got to make it work. But if you at least know the journey, then you can understand, step by step, how to make it happen.

Speaker 2: 18:49

Yeah, it's the other.

Speaker 1: 18:50

the progress is in the action 100% is the reality and most people don't even realize what action really means, like with this, thinking about doing it.

Speaker 2: 19:02

You know, strategizing learning more reading books. That is not action.

Speaker 1: 19:07

Yeah, exactly Exactly Like with this podcast. I've done like 150 episodes. Takes time, takes time. I'll sit there and go. How'd you talk to this many people? I don't know three years. It takes time. Get a lot of knows, get a lot of yeses. You make it happen, yeah.

Speaker 2: 19:27

Well, I mentioned, 80% of podcasts stopped before episode seven.

Speaker 1: 19:32

Exactly, exactly, they were talking about it. It was it's this one mastermind of men for podcasts and he was saying, basically, travis Chappelle, he was talking about the concept that there are incrementally more podcasts, but active podcasts have not changed. Very minimal active podcasts have changed because so many are a one and done, or a three and done, or a 10 and done. Yeah, no, it's constant, and it's, and it's just. It's not a judgment, it's just like whatever anyone wants to do. So, tim, what gave you the confidence to go into this hedge fund space? Because I feel like selling deliveries to hedge fund, that's a big jump.

Speaker 2: 20:17

So, as I mentioned, kind of like in my upbringing I was was not only kind of the entrepreneurial kid, but my parents did something which I think I didn't fully appreciate until later in life and they encouraged me to be the kid who could always talk to anyone, so I could almost become better friends with adults when I was a kid than I could my peers. I was the first person to pick, you know, to answer the phone. This was back in like landline phones, like our home phone would ring, you know, I would jump over the couch to answer it, like I just liked the idea of engaging with people and I was just never really afraid of taking the chance or what have you and I know a lot of people right now don't like to pick up a phone at all. If it's on, they don't know right. Or you go to a party and you have to introduce yourself. That was never a concern for me and I say that simply because it was a mix of.

Speaker 2: 21:13

I knew that I wanted to be kind of in the money world, but I didn't want to be an investment banker, I didn't want to be a financial advisor, so I kind of said those are not for me what else is left. And I was able to align myself with through a, through a boss that I had earlier in my career made an introduction and he said you're not long for this financial advisory world, but go, go do this hedge bump thing. And I just was probably naive at the time, but I also didn't know why it couldn't work. And so in the beginning it was just effort, it was I'm going to go talk to people, which I was comfortable doing, and if they liked me and I liked them and I could tell them something that made sense, they would give us money to manage. That seemed reasonable. And so it was naive at the beginning and just this like I just didn't know any better. But what happened very quickly which was in hindsight I wasn't appreciative of, but I did it in like just by nature I figured out what our unique selling proposition was and at the time it looked something more like the hedge fund world was the Wild West.

Speaker 2: 22:22

Hedge fund managers at the time were these kind of like corporate types who were really high on themselves. So it was like you could be lucky to give me money and from the outsider's perspective I'm like that seems backwards. And so all I did in the beginning because I knew that people were calling on were like high net worth individuals who were giving us their retirement money I just made two very simple statements. I said number one, I value the fact that you're giving me your very hard earned, very valuable capital. Number one, I will never lose it. And number two, I will communicate with you in whatever way, in any way that possible that I can, so that you never have to worry for a second that your money isn't safe.

Speaker 2: 23:06

And that got us from a million under management to about 50 million under management. And just because, just the law of numbers, the more money you manage, the bigger the allocations you can get. And so once you hit 50 million, then you can start getting, you know, million dollar chunks. And that got us from 50 to 100. And once you get to 100, you can get 20 million dollar chunks. And so it's. It's nonlinear, just like most things.

Speaker 1: 23:28

Yeah, that's what I've also realized that nonlinear nature of business, because it takes so long to get the first five, 10, 15 clients. And then you're like, does this compound? Yes, they tell friends they go, yes, it works. Talk to this guy.

Speaker 2: 23:46

Exactly, exactly and I think that's you know psychologically early on. It's the same reason why it feels hard in the beginning. You know that famous phrase. You know we over appreciate what we can do in a year, but we under appreciate or some version we can do in five, it's just because that first year is going to be hard.

Speaker 2: 24:03

But here's the secret Year five is not five times your one. And I think as entrepreneurs, as business owners, what we sometimes run into is this fear of growth because in the beginning it feels like we're doing everything and it's really hard and there's a lot of risk, which means if I'm doing $100,000 a year and it feels hard and it's risky and I'm stressed out that if I'm doing $1 million a year, that I'm going to be 10 times as stressed out and the reality is that is not how it works. But it's hard to have that perspective when you're in the fight.

Speaker 1: 24:38

And that's the benefit of having mentors and people who have been there before. Exactly right, exactly right. And when you were going through that with the hedge fund, who was your team? What did that even look like? And how do you think about team too, because I feel like that's a big thing, yeah, so this is going to be shocking to some.

Speaker 2: 25:00

So we managed $350 million basically and we got paid on the amount of money that we actually invested. So short kind of primer if you have $350 million in a bank account, you can go and buy usually two, three, four times that amount. Banks will lend you money to basically buy more. So $350 million of money gave us about a billion dollars worth of buying power. Our fees were 2% a year on whatever we invested. So short math if we invested $500 million, we got paid basically 2% of $500 million, even if we had $300 million in capital. So you could do the back of the envelope. There was a lot of money involved, which is why it was very painful to walk away from. Our team was effectively our portfolio manager, myself and three traders. So we had five of us running close to over a $500 million book out of a 900 square foot office, and we were in Birmingham, alabama, of all places. So to say that it was a great gross margin and net margin business would be an understatement. It was a phenomenal business.

Speaker 1: 26:10

Now, when you guys started getting larger and larger, was this something where you guys had to pretend Because I know everyone's got that I'm bigger than I am in philosophy and entrepreneurship? How did you think about that? Is probably getting a $50 million check when there's only five people on the team.

Speaker 2: 26:29

At the time we felt like we were the best kept secret. We couldn't pay people to come and visit us because we were just out of the New York, chicago, san Francisco kind of route that most people were on. So we liked being kind of and we actually said we are literally outside of the industry, which is actually one of the great benefits because we don't have a high dollar office and all of that kind of stuff. But the lesson that I took from it was I learned through the experience that there are two types of businesses. Primarily, there are cash cows and there are businesses you sell basically the pot of gold at the end of the rainbow that don't make a lot of money, but you can make a lot, like tech companies, that can lose money and still be worth a billion dollars.

Speaker 2: 27:13

That business had no real sale value because it was us and if the manager doesn't go with it, there's nothing left. There are no assets or anything like that, and so we just looked at it as this is a cash machine. How do we optimize the cash profile of what we're doing within the construct of kind of what we needed to do to keep the business going and reinvest in it and marketing and operations and things like that. But I learned the value of efficiency because we were ruthless with our expenses and so we use systems to replace lots of people. We built automations and this was before all of that was really kind of very popular. We probably cut our potential headcount in half just from having really good systems and we spent a lot of time and effort there.

Speaker 1: 28:03

Wow. And most people don't realize this because in business, everyone wants the big penthouse office space with the view in the best city, and I think we all saw with COVID it doesn't always help out. So I mean, your next move it was the tech and gym space, and then you got in with the Hormozies. So what happened with the tech and gym space Was that you yourself running a business?

Speaker 2: 28:34

Yeah, so I was in Birmingham, alabama, which I wasn't from. There, we had killed a house, but after we shut the fund down it was like we really had no reason to stay and we were starting a family. We wanted to be closer to back up in the Northeast where my wife and I were both. Both grew up and so we moved to Massachusetts, which is where my wife was from, and I wanted to take a little bit of time off. I was burnt out, to be absolutely clear, and my wife one day Googled, you know, like personal training in the town that we were living in, and there was an ad that said some version of automated personal training on demand 24-7. I was like, oh, that sounds cool. And so they did like a free day, and so I went and got a trial and it was this concept called Cocoa Fit Club, k-o-k-o Fit Club, and they had just opened this demo site and they had built like a universal machine, like strength machine, but wired it up with all sorts of sensors and it had a spring on the front and you plug your key in and it would say you know, good morning Jordan. Today we're going to do these seven exercises. Here's the one, here are the ones you should do. Here's the weight that's appropriate for you, here's the pace that you should lift and lower the weight, and we'll track everything for you and optimize it over time. And I went this is really slick Like this is before Peloton and Mirror and all the other ones, even before Fitbit. And I thought this is really neat.

Speaker 2: 29:57

And I called the CEO and looked up his name and number and I said are you taking investors? It seems like it's got them laid. He said thanks, but no thanks. We're fully funded. But we just launched our franchise arm. The thing you're, the club you're standing in, is our first brick and mortar location. Oh, wow, you want to open more. And I said that's kind of interesting.

Speaker 2: 30:16

And the area where we ultimately want to end up was not like a. I'm like an hour and a half from Boston, so it was not a place that I wanted to kind of like. I couldn't build a professional life in as I saw it. But I said you know, maybe this is like my next hauling is to start this kind of fitness technology business. And so we bought a franchise territory and in 2009, we bought that 2010, we opened our first location and we grew it to eight locations over the next six years and went into a multi-seventh figure business and I was able to be present with my kids and, you know, have flexibility and all of those types of things.

Speaker 2: 30:53

And the end of that story was I won a sales competition for one of the supplements that we carried and it happened to be Prestige Labs, which is owned by Allison Leal and Jim Walsh, and so I want to trip to meet them. We were literally sitting around Allison Leal's dining table at their house and it was, you know, me and 11 other Jim owners and everyone. It was like a consultation kind of visit, like tell me what your biggest problem is and Allison would kind of help us work through it. And everyone was like I need to retain members. I don't know how to staff, I don't know how to hire.

Speaker 2: 31:27

And then it got to me and I basically said I have no idea why I'm even in this business. And he said you should basically say you're Jim's because you're in the wrong vehicle. He's like you're far too smart to do what you're doing. I'm like all right, so I went and sold my gems and that is the beginning of the end of that chapter, which then led into Alex calling and saying you know how about you come on on the team here at Jim Walsh, and that was kind of the beginning of that story. So talk about kind of walking away from something. Every single pivotal moment in my life has ended with like closing a chapter, literally and figuratively, and then moving into a new chapter.

Speaker 1: 32:05

That's incredible. I love the fact that he told you the same advice that he got. It was great.

Speaker 2: 32:10

He was just like you're missing a big picture, and he literally used the words you're in the wrong opportunity vehicle, which is something he said a lot.

Speaker 1: 32:18

Yeah, yeah, Because that's what happened to him. Now, obviously, moving towards that was They've. Obviously Alex and Layla have blown up on social media. Were they always like that, or has that changed? Or what gave you enough trust where you're like this guy who sells supplements? Gave me advice and I'm going to listen. What caused you to listen to that? Because I don't know if you knew them prior or like what did you think of that?

Speaker 2: 32:48

So the first experience I had was it became very clear to me, or it was very clear to me from the early part of getting to meet Alex specifically was that he was smarter than most of the finance people I've ever met. But he looked like a lumberjack, which was very interesting and this kind of like at that time, this cognitive dissonance in my head. He's really sharp and he really knows what he's talking about. But Jim specifically, he was the best around. I mean, he knew exactly what he was doing.

Speaker 2: 33:21

What I couldn't have forecasted was this idea of we were about to enter into the gold rush of attention and being a walking talking pattern. Interrupt would be kind of the golden ticket. So he has always been smart, he has always been driven. He has always, from my experience, always been the person that he is today. He just happens to be the right guy in the right time with the right format and he had the most. He had enough forethought to start the podcast and start the content kind of creation process before it became, you know, kind of mainstream like it is today.

Speaker 1: 33:58

Yeah, and that's kind of what I realized is that you have to be early to situations, but it has to be based on your own likeliness, like your own enjoyment. How do you think about, how do you think about these different themes or before something like they say, hockey sticks, like because as an investor it could be so difficult because you basically put your chips with them and growing your family, did you relocate the whole family at Austin? How did you go about that? That's not a for someone who's like independently wealthy. That is like that's a challenging decision. You know what I mean. Yeah.

Speaker 2: 34:36

Yeah. So the way I would say this you know the way the kind of content started because I was there kind of in some of the early days was it was purely the idea of documenting the principles that we were already talking about. And if you look at kind of just the leverage points for I mean most folks know kind of the Jim Lauch story and Alex's story specifically but Jim Lauch started as a we're going to fly out and actually launch your gym that's how Jim Lauch started. It was a physical boots on the ground concept. Then it moved into kind of an information, you know licensing play which was I'm going to package my IP and you can use it. Then it turned into effectively creating a better ecosystem for gym owners, which is why Jim Lauch kind of went parabolic.

Speaker 2: 35:19

It was we figured out how to make gym owners significantly more money in the first kind of three months of working with us, far in excess of our fees.

Speaker 2: 35:29

So our average gym in the first year would take home an additional like $40,000, which for a gym who on average makes $35,000 net. We basically doubled their profits in a very short period of time, which was kind of how that whole thing worked. But if you took those principles, which is a lot of what I've learned over the last you know, five, six years, the principles transcend the gym industry and so I think what happened was Alex wanted to document what he was doing and the things he was thinking about and the decisions he was making. All of that is still very valid today. It just happened to be he is able to package it in a way that again makes it applicable across industry and he's obviously a very engaging person. So I think, between his likeness and how he thinks, he is one of the most incredible structured thinkers that I have ever met and if you've watched the things that he does now.

Speaker 2: 36:27

It's part philosophy, part business part. You know, being in the trenches, belief breaking, value system like it's actually. It's remarkable just how, how his brain is able to triangulate all of these various pieces in a way that is incredibly unique and that kind of nugget he happened to wrap in this content opportunity where he looks the part and he's the real deal.

Speaker 1: 36:58

Yeah, I mean because when you really think about it, a lot of the people who have exploded prior to that like have gone massive followings. Right, we're very controversial and we're not as business savvy as this, but we're more controversial in their own capacity. But this is more of a wait. A second I'm going to hit you with business advice and it's going to get you to think a little bit, and then we're going to question things and then I'm going to leave you on a cliff note and you're like what, what just happened? How is this? And then it's outside the. It's very, very interesting. And what was that like being around it for the two years, three years, you were with them.

Speaker 2: 37:41

It was one of the best times of my life, to be quite frank, because it was being strapped to a rocket ship and it redefined and, for me, broke a lot of the ideas of what was possible, either speed of implementation, playing the long game was a redefinition for me, which was I always wanted to deliver value and value and excess of costs and all the things that we kind of learn in the one-on-one level. But what Alex was able to kind of help me see was this idea of what is the bigger picture. So, yes, we were helping Jim's, but Jim's also helped. We also helped with hiring, we helped with now they were making money. We have to.

Speaker 2: 38:27

You know Al Sharpen for folks that know him, a very, very smart operator. You know he wrote something called the billionaire code and the idea is kind of like how do you work through the different phases of your life personally, from being kind of a worker to being a business owner, being entrepreneur, to, you know, et cetera, et cetera, and so I think we were able to capture all of those different elements and what Alex was able to do, quite remarkably, was to blend those in a way that I hadn't unlike anything I'd ever seen before, and so it was great to watch, it was great to participate in. I pride myself on kind of doing hard things. We built a product called Allen, which was we took from zero to 20 million ARR in less than six months. That was a project that I take a lot of pride in. We took it from basically concept or on a sheet of paper to an incredibly transformative business, and I don't think marketing agencies probably will ever be the same.

Speaker 1: 39:30

And just slow that down because I know you probably know it all the time. But ARR annual recurring revenue.

Speaker 2: 39:36

Annual recurring revenue. Yeah, so we took a software product.

Speaker 1: 39:40

that recurring revenue was built through about $1.7 million a month when we and that's going from zero in six months or 20 months, six months In six months to $20 million annual recurring revenue, meaning every single year people pay $20 million. And that's without it compounding further.

Speaker 2: 40:02

And we're growing yeah.

Speaker 1: 40:03

It's just very, very. I just want to slow that down because that is the most business. If you look at the percentage of businesses that even hit a million dollars, let alone on a recurring basis, most people can't even manage to get another customer, let alone retain them, and make it happen every single month. It's very, very impressive.

Speaker 2: 40:24

But the piece to that which I think is important to note is we created a business model for marketing agencies through that software that allowed them to make more money. And it sounds simple, but we basically rewrote the rulebook so that by working with us, actually paying us made them more. So it wasn't a can they give us money, yes or no. It was by investing with us. They got two, three, four, five times the amount of money out from the relationship than they put in, and that is that kind of value cycle of so often we're like and then we just cover our fees, or can we deliver just above, if I'm charging $1,000, can I give them a path to making a little bit more? We gave them a direct path from paying us thousands of dollars to making hundreds of thousands of dollars very quickly, and I think that was, and we did all the work in that respect, so that was well earned.

Speaker 1: 41:29

That's the most impressive thing to me, because, watching the content, understanding the stories, you sit there and you go. You might have a very good model, you might be very hardworking, but you're just not utilizing the model correctly. So it's like what needs to be shifted just two millimeters, just a little bit, where it's like okay, you're making money only if we make money. And now it's a hand in hand, and now we're on this path together and people are so much more receptive to it. It's like running Facebook ads or doing any of these different areas where it's like how do you make more money? And it's like, if I give you $5, can I get $10 back? People go, no, that's impossible. Well, with this, this is why it was possible.

Speaker 2: 42:16

Well, it's like, regardless of I mean, grant Cardone's a pretty divisive guy, depending on what your opinions are but just the concept of, like I think about 10x idea. Take what you're charging right now and say the words what needs to be true for someone to pay me 10 times more than I'm asking for right now? Yeah, because it's not whether you can get it or not. It's a question of what is the environment, what are the terms under which someone will do that? And in fitness we were competing against free trials in the beginning of gym launch. That's what gyms used to do to bring people in. And we came out and said you should be charting $600 for a trial. And everybody looked at us like we were nuts because the current paradigm was start them low, low barrier to entry and then upsell them via age old value ladder, kind of idea.

Speaker 2: 43:07

We and this was Alex, a genius he said everybody has it wrong. You charge the most when the pain is the highest. Yeah, not the lowest. So we said let's charge the most.

Speaker 2: 43:22

People in fitness have been on this failure cycle so often. Right, it was. So the conversation. Instead of saying, hey, look at the equipment, do you want to try it? Which was the free trial version it was you wouldn't tell me what have you tried before? Oh, you've been to seven gyms.

Speaker 2: 43:36

What was that experience like? Well, I signed up and I never went back. Oh, interesting, so what was it about that experience that wasn't engaging enough for you? Well, I never really know exactly what I was doing and I felt out of place. Okay, so let me make this. Make sure I understand. So you want a place that you can fit in and feel comfortable, right? Oh, yes, exactly Like, okay, well, what else? Well, I want to lose weight. No, no, it's not just about like, give me more. Well, I really want to lose weight because, like and there's only a couple of reasons why and I've done this sales conversation a million times, which is why I know it and it's like, especially for women, it's like I don't feel like my husband looks at me the same way anymore, like, oh, okay. So let me understand If you didn't.

Speaker 2: 44:18

So you've done this for 10 years. You paid on average $50 a month for 10 years. So you're like three grand into this already with nothing to show for it, right, okay? How much would it be worth for you to have your husband look at you like you were 20 again? Oh my God, I would pay anything, right? So let me tell you it's $600 and I'm going to do everything in my power. I will move mountains to make sure that you look amazing and feel even better. Sign here Do you see the difference and I think that is the critical element that I would share with people is this idea of you're. We so often think in features, when we don't think in benefits. What is the actual point of what we're doing?

Speaker 2: 45:01

Yeah, I run a marketing agency or whatever it's like. Nobody wants an ad, they want a customer.

Speaker 1: 45:07

Yeah, how close.

Speaker 2: 45:08

Can you get them to the customer as an example?

Speaker 1: 45:10

You know, I think. Well, I think what you're saying is so important because it's not focusing on what I have, but it's focusing on what that customer wants. And it's funny, I have different coaching levels and whatnot, and one of them has access to the podcast and I always see people's face light up. They're like me on a podcast. Who would have thought and it's yeah, I mean, dude, if we can make this happen, you can be like let's make it happen, but it's so, it's.

Speaker 1: 45:36

That's such a good breakdown because you ask two questions that are better. It's what does the customer actually get? And then, like you were saying with Grant Cardone, what would 10X look like? Because most people are like, oh man, if I can get a 10% raise, let alone a 10, a 1000% raise, like that's crazy, I just want 10% and it's going to be the same amount of work both ways. Like I had John Saracenian 2000% raise and he talks about that constant. He's like Jordan, why do you want a 3% raise when you can get a 2000? Like you just have to understand these little pieces. So, Tim, I know our time is winding down. What are you up to today? How can people learn about you and what's happened with you today?

Speaker 2: 46:22

Yeah, so, as, as you mentioned before, I think everybody values a mentor, and so a great mentor of mine said the phrase to me once transformations don't happen in isolation, and even in some of our conversations, you know, that is translated into like you can't read the label from inside the bottle, and I fundamentally believe that everything good in my life that has ever happened has happened in a collaborative relationship. Yeah, so I have gone out, so I do consulting. I held the next kind of round of service-based business owners, especially around the concept of recurring revenue, because that is what I believe the way that we should structure every business. So I have a great group.

Speaker 2: 47:01

It's called the co-creator community, and the idea is to take product, which is what most of us need, to kind of use as the lever. How do we create better products to differentiate ourselves and create a category of one so we can get that 10x type of return? And so it's a great community. We do weekly calls and it's all workshop based. So it's literally let's break the business model down, usually in 20 or 30 minutes. We've rewritten it in a way that there's a lot more value to be uncovered, and then it's all about implementation. Ideas are cheap. You can go to YouTube and learn anything. I think the reality is, how do we shorten the learning curve and allow you to avoid those foreseeable mistakes that usually doom a lot of folks?

Speaker 2: 47:42

And so that's, but that's encourage anyone to join there. It's a phenomenal group. I do it because I actually love it, and you can find me at timcolleasecom and on Instagram and LinkedIn.

Speaker 1: 47:56

Yeah, and I'll throw that all in the show notes. And guys, I just want to preface this literally in our free call, when me and Tim were speaking, he gave me tips on my process. Like, tim is the real deal. He's trying to provide value, he wants to help and yet, Tim, I can't thank you enough for coming on for past 45 minutes. It's been a pleasure and thank you.

Speaker 2: 48:19

Likewise, I appreciate it as well If you go to Instagram, dm me the word Jordan and I will give you a special gift for being a part of the show. So awesome, don't miss out.