The Entrepreneur's Playbook: Building a Scalable Business

Hey, hi everyone. Now, welcome to your show, E coffee with the experts. This is your host, Ranmay, here. And today we have Lucas Sommer, the Chief Executive Officer at Ad-Apt with us. Hey, Lucas, how are you?

Good. How are you? Thanks for having me.

Lovely. I’m doing great here, Lucas. Lucas, before you move forward and pick your brains, why don’t you talk us through your journey thus far? How did you land in the mission marketing world? Let’s get to know the human behind the mic, and then we take it from there.

Yeah, sure. I didn’t know I was going to get into the marketing space. I wanted to be in music. I, in college, started a little recording studio and made songs for folks. One thing led to another. You could say my senior project, if you will, was a social network for musicians. We built this big software business or attempted to, I should say. Along the way, I just realized that what these musicians needed was marketing to help them cut through the noise and get recognized and more traffic and eyeballs and downloads, et cetera. Started offering a managed marketing service to musicians saying, Hey, we’ll run your Twitter, and we’ll build your websites to try to support independent musicians. That worked right away. It worked much better than the software that we were building. Then I realized, Hey if independent musicians want this stuff, I bet you local businesses do as well. This is in probably 2010, I would say, and started offering the same service to restaurants and attorneys, doctors, white-collar professionals, and brands in the South Florida area. That worked as well. Signed up some clients, hired somebody, signed up more clients, and hired another person, Before you knew it, we had a full-time, full-service marketing agency in South Florida and have been in the marketing space ever since.

Lovely. Quite a journey, I must say, spanning industries across music, marketing, winemaking, and even software. I’m talking about entrepreneurship. What sparked that initial thirst to start your own thing and what were the initial challenges that you might have faced?

Sure. I think from a very early age, I wanted to be an entrepreneur. I didn’t know it was necessarily called that, but I was making flyers and putting them in the neighbor’s mailboxes for babysitting lawn mowing, and extra work around the house. I just thought it was cool to earn your own money and try to put something together. Neither of my parents was very entrepreneurial. They were both teachers. I had a principal and an English teacher who became a superintendent, but they were savers, and they were working towards retirement and working for the government, if you will, not very private industry entrepreneurial focus. I don’t know where I got it from, but always was independent, and always really worked hard. I was always trying to be a hustler, even in college and high school even. I used to charge kids to do their homework for them.

That is where it is coming from.

Yeah. And then when I was in college, I built that recording studio that I referenced just to try to make some side money hourly. I always knew that it was possible. I know now that it’s hard to make something huge or become extremely wealthy being an entrepreneur, but at least in America, if you put in the effort and you show up on time, you do what you say you’re going to do, you can create a job for yourself. If you stick with that long enough and put a brand around it and a logo, and you bring other people onto that project who share your vision, now you have a company. If you run that company for long enough, you can continue to scale that up as long as there’s demand. I think, to me, I was always a worker. I always never shied away from doing the hard labor that’s required. If you do that for long enough, the universe rewards you with your business that can sustain itself 20 years later, whatever it may be. Still here and still loving it, still haven’t taken a job and have no plan on doing it.

I’m sure I can bet my life on that. You have scaled multiple businesses across different domains. From an entrepreneurial point of view, Lucas, can you share a specific framework or methodology that you use to assess a venture’s scalability and probably develop a growth plan?

Yeah, sure. I think it depends on what stage you’re at in the development. But I used to work when I was in college at an entrepreneurship center at the University of Miami. And I ended up coming up with this spreadsheet I would make people do because everybody has ideas, and ideas are very easy. Human beings in general are very creative. If you sit in a chair for long enough and drink some coffee, you’re going to come up with a good idea. The question is, is that idea economically viable? And so I always suggest folks to come up with a spreadsheet. In one column, you’re going to write down the name of the idea. Then the second column, you would want to quantify how much pain, that problem you’re solving, and how much are people willing to solve it. So you could say, Hey, I want to have a dryer and a washer to do my clothes in one device, and that’s going to save me a step. Okay, cool. That’s a good idea. Why do we switch the clothes from the washer to the dryer? It’d be better if they were in one.

How much pain is that causing? Then in that second column, you look at every house in your market, let’s say it’s America, is washing clothes to some degree. Okay, great. How much time does it take to switch the clothes from here to there? That takes five minutes to make the switch. Great. And if you went and asked all these homeowners or whoever’s doing the laundry, how much would you be willing to pay to have this problem go away for you? Or maybe they say five bucks, maybe they say $20. Okay, so now you have in column two, the type of people and the quantity of people that have this problem. So you could say there’s 300 million people in America and 80 million of them do laundry or something to that effect. Okay, great. Now you know that there are 80 million people that you could go after. Then when you ask those folks, how much would you spend to make this go away every month? Oh, they’d be willing to spend $100. Okay, great. So now the size of the market, the quantifiable problem or pain that they’re willing to pay to make it go away, and you’re starting to get a mathematical framework to how big of the business you We can grow from that.

And then you can continue to layer more information here. You could say, Okay, what are they doing now to solve this problem? Currently, they just switched to close themselves. Okay, so that’s fine. Some of them hire out a laundry service, and they come to pick up the clothes and they bring them back folded and perfect. How much are people paying for that? Oh, okay. People pay $500 a month for this managed laundry service. Understood. Okay, let’s make those notes. Then you say If I were to have the best brand in the world and able to deliver on what I’m suggesting, what percentage of this market could I capture? And if you want to be generous to yourself, you could say, Oh, it’s 2% or 5% even. But you can’t suggest that you’re going to take 50% of the laundry market in America. It’s not reasonable. Let’s just assume you’re going to capture 1% of the market in three years. Now, just work backward and say, What’s 1% of the average price that people are willing to make this go away, multiply by the number of people that are facing that problem, and you can get to your top-line revenue.

Now, is it worth pursuing that? If you were to be wildly successful and capture 1% of the laundry market in America, what is that worth for you? Now you can work backward on the cost side to say, what would it take to build a device, how am I going to market the device, and what’s my customer acquisition cost? I think when you for those people to go through that, they start to realize that not every idea is worth pursuing. And that’s the long and the short of it. It’s a good idea. The world might believe you that they think it’s awesome if that little widget were to exist. It doesn’t mean they’re willing to pay for it. It doesn’t mean you can reach those people and then convince them to pay for it. So you should walk yourself through the best-case scenario from the revenue side of things, and then you can go backward on the cost side of things to see what it would take for you to do that. So that’s an easy one that you can build in Excel, because a lot of people if you have one big idea, you probably have five big ideas.

And you can compare that to, what if I just go get a job washing laundry for other people? What if I just go work at the company that does this anyway, and I sell washers and dryers, what would I personally make? Oh, I have a $ 75,000-a-year salary doing this. Is that more than going through the worst pain of all time and eating glass to try to solve the problem on your own with some new business? How much would you make even if you were successful? It might be a lot less than you think. So you want to put all that stuff in perspective. And I think anyone who started a business, whether or not they sell it or are successful or not, will eventually realize a in year or 18 months, that this is the hardest thing in the world to do, in my opinion. Okay, you go be a professional footballer or a basketball player, and that’s equally hard. I got it. But as a profession for an average person, I’m not sure that anything else is more difficult than carving out your niche and sticking with it because there’s no support network.

No one’s going to help you out. The banks aren’t going to fund you. You’re not going to get the investor. It’s you and you alone. You need to go hunt and kill the Buffalo, bring it back to the village, process the meat, feed yourself, feed everybody else, pay your taxes, and then do it again the next day forever. It’s not for everyone. And so once you get out there and do it once, you start to realize that it’s not worth going on the journey unless the end game, the result is worthwhile. And not every idea is worthwhile to pursue. So hopefully that helps some folks or gives you some context, at least about how I would think about it.

Lovely. We explained it in a very elaborate manner, Lucas. Looking at the ventures that you have been involved in. You have been a hussler, like you mentioned. Anyone getting into so many diversified ventures, we can always understand the first step you must have gone through. If I were to ask your top three suggestions for our listeners today in terms of who is trying to make a mark or starting their entrepreneurial journey, what would that be?

I think you’re alluding to it, but maybe I can help. I have, in my career, tried to make music, tried to manage musicians. I ended up also in a fashion brand making shoes in Italy. I’ve developed real estate planted a vineyard and turned that into a wine brand. Look, you can see the wine bottles up here. I got some of the fashion stuff up here. This painting is automated. This was that musician brand I was telling you about. That was my very first project. And then look, I got this logo here, BossPDX. This is a construction company. Was it all by design? No, it wasn’t. I didn’t know what the journey would be. I didn’t set out to follow this particular life plan. I more or less followed the money, followed the universe, and what was working and what wasn’t. I knew when to give up and when to focus on and lean into the things that were working. I say that just to give you some context. I feel like I’ve tried quite a few different things: products, services, local products, local services, e-commerce products, and global services. It’s not every potential business, but I’ve certainly touched quite a few different things.

My advice to anyone, under the assumption that you don’t have access to unfair advantages, unfair position, unfair capital, like your dad’s not going to give you a million dollars to go do whatever you want, you got to start on your own, is that I would tell people to try and start as quickly as possible and as small as possible. If you want to make a clothing brand, you don’t need to overthink it. You don’t need a thousand designs. You don’t need the most beautiful website in the world. You need to go to your local screen printer and make 10 shirts, and then you go stand on the side of the road and sell those 10 shirts. You got to ask the customers, you got to get their feedback. And no matter what, you need to make someone give up money for the thing that you’re presenting. And everybody loves to do everything Everything besides that. And I don’t just mean sales. I’m afraid to sell. I don’t want to get on the phone. I hate asking people for money. That’s all part of it. But the bottom line is that folks need to give up their money for your product or service.

The sooner that you attempt that exercise, the sooner you’ll know more about yourself and more about the business. So what is the smallest unit that you can transact on? And go from there. And if your thing is Yeah, but I need $2 million because I’m going to shoot this crazy movie and put it on YouTube, and I’m going to do what Mr. Beast does and all that. All right. Okay, I got it. Then write that vision out as cheaply as possible and go get like, crowd-sourced money. Go try to see who’s going to give you five dollars, one dollar, to even go in that direction. If you struggle to get a dollar, you’re not going to get the $2 million that you need. So I think a lot of folks, and especially when I was working at the launch pad at the University of Miami, this entrepreneurship center, is that people want to do all the busy work and the easy stuff that doesn’t get criticized by the marketplace. So your business plan is amazing. Your financial model is fantastic. Your logo is excellent. It means it means nothing. What is the widget that’s represented in the plan and a financial model?

Do you have it? Do you hold it in your hand? If so, like literally go to the street in your local town, village, or city, and go sell that one time, two times, 10 times. You’ll realize that after your 10th sale, nothing that you wrote about in your business plan or financial model means anything anymore. You now actually know what’s happening. So your business plan should be one page long. Your Excel sheet should be one sheet. Sniff out whether or not it’s worth working on. Once you feel confident, go sell a few. And if you don’t have the thing to sell, go pre-sell it. People are like, It’s a $100 thing. If you give me $10 a day, you’ll be first in line. I’ll deliver it to you in the future. You get a 20 % discount. But make them sign a piece of paper that says they’re going to buy it. And you got to go through that effort to close a couple of deals Or else you have no idea as to whether or not the universe even wants the thing that you’re building. And last point I’ll make on this comment is, that I think a lot of folks, entrepreneurs, especially new entrepreneurs, have a solution in search of a problem.

And so they build their widget being like, look at how cool this solution is. But nobody has that problem. So I started this episode by just making up an example of a washer and dryer combo. Listen, those exist. They exist in Europe and other places, but not so much in America. They don’t wake up in the morning thinking about that You thought about that. You thought it was cool and clever. So that’s why you want to go make a business on it. But no one else is sharing that vision. So you don’t want to have a solution in expectation of a problem. Make sure the problem is real first, then go build the solution. The only way you know about the problem is by talking to your customers. So you identify those customers and know deeply about the problem before you even go to build it. And last, I could talk about this forever, but the thing that I would say is if you don’t live and breathe in that industry and you don’t know those customers, but you just think you do, you have no chance of success.

Yeah, I think the point that I’m making here is that you should only make a marketing agency when you’ve struggled to market your own thing and you should only make a construction company when you’ve done a bunch of DIY work at your own house, dealt with contractors, and realized how painful it was. That’s why you should make a solution for it. And even in this wine business, I made my own mistake. I’m happy to reveal it, but In the region that I’m in, we make a lot of Pinot Noir. This is the second-greatest Pinot Noir climate and market in the world. I’m over here as if there’s a problem, like the world needs more Pinot Noir. They don’t, especially in this local market. So I can make this wine, and it’s the best wine in the world, and I can get all the scores that I want and care about the label and go order the cases. But the world is not demanding more Oregon Pinot Noir. They just aren’t. And that’s okay. You can still survive, but you’re not going to hit a home run making another widget amongst a marketplace of other comparable widgets that have been going on for years that are cheaper than maybe your widget or even better than your widget.

It’d be better off to try something a little bit more nuanced or unique in a way What are you going to do to stand out that people aren’t facing that problem and they’re not throwing money at it to make it go away? So how can you get around that? Maybe try to solve a different problem.

Absolutely. And I’m coming from an SEO perspective, Lucas. You guys do paid and SEO both, right? What do you think is the perfect combination? It has to be a mix of both. That is the ideal scenario. But if the client wants to choose one depending on their budget, their overall brand vision. What would you suggest? What is your guys’ take on this, SEO versus PPC?

Yeah, sure. In a very tactical sense, if budgets are constrained, I think the thing that everybody can do, especially with AI, is just share your knowledge with the world and write it out. So you can make a website for free. Writing itself is free. The basic AI tools, if you need to rely on them, are more or less free. But if you have any unique knowledge about how to do something, washing clothes, doing construction, or making wine, you need to be the world’s greatest source of information on that topic. And I tell any of our clients or anybody else that I’m mentoring, I’d say, if you Google World War II, what comes up? The Wikipedia page comes up. Why? That URL is the greatest single page on the Internet in the history of all mankind to answer any questions about World War II. It loads quickly. It’s well-documented. It’s got the photos. It’s got the iconography references. And drum roll, people link to it because someone else wrote a page and they say, Hey, the facts about World War II, you can get that information here. And so if all you can do, budget constraints, whatever it may be, is simply create the best article on your solution, not your product, not about you, about what people are searching for.

And I think that’s what a lot of people miss they don’t care about you. They don’t care about your story or the About Us page. They have a problem. They type that problem into Google, like Blue Honda Civic or like, cheap Civic for sale near me. That’s their problem. They want to fill that hole with an answer. So you have to answer it. If you answer it, Google will find out that you answered it, and they will serve up your article to help those people get where they’re going. That’s what Google is trying to do. So I always suggest people start with SEO because if you jump right into paid media, then the question is, Hey, where’s your landing page? The people are still querying it. Yeah, you jump straight to the top. You’re sending them to an inferior page. You didn’t answer their question anyway. So now they hit back and they Google the same thing again. But you paid for that click. You didn’t help them out. So make those landing pages and destination pages as strong as they can be. Answer them for folks the best possible way, better than the next guy.

And the universe should respect that eventually. Once you see maybe some traction there and you’re getting some results, it’s very easy to then turn on a budget for the keywords that you see that you’re looking for that convert. And you say, well, every time people type this in, I’m in spot three, that convert at 12 %. Why don’t I just jump to spot four by running a little ad to capture related and similar keywords? And so that’s our strategy. That being said, I can say it from the exact inverse. If you have a good budget, say, minimum budget, I don’t know, $5,000 a month to go towards paid media. Small for some people, and it’s big for other people. We’ll just say 5,000. You can run your paid media campaigns using a bunch of keywords and everything that you do, say it’s 100 keywords, a couple of different campaigns, whatever. And let that math play out. Let that experiment play out. And what you’ll realize is these seven or eight keywords explain 80, 90 % of all your conversions, meaning when people type this stuff in and then they see your brand, your offer, they convert.

That is now the guide for your SEO strategy. You need to crush those seven keywords because instead of writing endlessly and hoping for SEO ranking and then hoping that it produces results, Yo already know what’s going to work, which is these words when people type it in. You’re paying for them now. You should make multiple articles and long-tail versions to explain and have the best resources for those keywords. And then one day, you’ll start ranking picking for that organically, and maybe you can stop paying, move your money back to the things that are the second tier, that they need to work in the future for you, and repeat that process. So if you have the budget to go after it, I would do both. But net, you must end up with excellent landing pages that explain the keywords in a way that Google likes and customers like it, and they trust you, and that’s what they are going to convert on. And if you can do that better than the next guy, Google is going to know it. Your customers are going to feel it inherently, and you’re going to end up converting that business.

Great. Thank you. Thank you so much, Lucas, for explaining some examples there. Quick one, Lucas, before I let you go, let’s play a quick rapid-fire. I hope you’re in for it.

Let’s do it.

All right. What do you do with your first paycheck, Lucas? First paycheck of your life?

I don’t know. Probably spent it on women or something. Trying to, at that age, go out, have some fun with the boys, and get in trouble, probably.

All right, I see. Your last Google search.

Wow. It’s probably something about construction. I’m bidding on these bigger projects. I needed to know what these acronyms were to go bid on this government contract, trying to sound smarter than I am. So yeah, looking that stuff up.

Okay. Are you a celebrity crush?

Maybe Scarlett Johansson.

Where do you find Lucas on Friday evenings after the office? Or let’s after work?

After office, I’ll be right back in the office. Friday evenings, I’ll put it to you this way, I leave the office at 3:00, I go be a dad and a husband from 3:00 to 8:00, 3:00 to 9:00. Then when they all go to sleep, I get back on the computer. It depends on what you mean by evening. I’m not going out and getting in trouble these days. I’m trying to be productive.

All right. Lovely. We’ll not grill you any further, Lucas. But yeah, thank you once again for taking the time to do this with us. And for our audiences, if they want to reach out to you, how do they do that?

Yeah. So you can go to Ad-Apt.com and that’s the marketing agency. We’re super transparent and helpful. So if anybody If you have any questions, go ahead and read up on the resources we have here, or feel free to contact us. And we also have a free Discord that you can join. And so if you’re not quite ready to hire an agency, you can come hang out. I have the whole team in there answering questions and trying to guide folks. That’s how we give back in some regard. Join that Discord and pepper in some questions, and you’ll probably hear from me with some answers. That’s probably the best way. Lucassommer.com. I got that a long time ago. So I’m the only Lucasommer on the Internet. I’m that guy. You can Google it, find me on LinkedIn, and go from there.

Lovely. Once again, thank you so much, Lucas. Appreciate it, man. Cheers.

Okay, cheers. Thanks for having me. Bye.