Skip to content
Interim CPO (Chief People Officer) for startupsTraining CoursesSoftware Product
INDIE 1: September 20, 2024
The Entrepreneurship of Passion, Purpose, and Profits by Brian Hatano
Housekeeping
Social Updates
I’ve updated my web presence so you can follow my profit training work on your preferred platform.
Facebook
𝕏
LinkedIn
The Practice of Profit
5x Profit with Portfolio Profit
Portfolio profit is when you test multiple products, continuously cutting and reinvesting to identify stable products and blockbuster-potential products.
This week, we’ll look at how this can happen in a B2B professional service company:
HR Handbooks ‘R’ Us
HRHRU is a 3-team company with an HR specialist, an admin assistant, and an HR specialist in training. The HR specialist, Kimberly, was a former HR employee then manager for 7 years before she started her consulting firm. She has been running the business now for 17 months. After initial challenges, she has had a lot of success, but she is quickly noticing that she basically created a new job for herself with a 35% salary increase. Good? Yes. Better culture, more freedom, more money, but... she thinks she can do more. She recently downloaded Brian’s
(the Martial Art of Profit) guide, and she came across Portfolio Profit. It inspired her to do the following.
Diversify
She decided to first expand her product options. She was selling small HR Handbook projects for $450 and larger HR assessments and strategic planning bespoke projects, ranging from $2,000-$10,000 each.
She analyzed her past 10 bespoke projects and discovered that there generally fell into 4 buckets:
$2K- hard work for her, little work for her team, profit: 10%
$4-5K- hard work for her, more work for her team, profit: 25-40%
$8-10K A- Real hard work for her, minimal work for her team, profit: 8%
$8-10K B- Minimal work for her, lots of support from her assistant and admin, profit: 55%
Calculations:
Project Fee - share of monthly general expense - hourly billables of team = PROFIT
Profit % = PROFIT / Project Fee
Portfolio Phase 1: Old to New
Kimberly’s 1st agenda item was to change her marketing to focus on the 2 types of projects with the highest profit:
Her old marketing listed the 1) simple handbooks + 2) Bespoke projects.
Her new marketing contained 1) simple handbooks + 2) defined $4K projects + 3) defined “high-end” projects.
Her old sales process was to jump on a call, listen, then quote a guesstimate to each client.
Her new sales process was based on a workflow of qualification questions to understand which of the 3 buckets the client fell into.
Her old operations was to take the project goal, and assign tasks on the fly
Her new operations was to create a hierarchy of tasks and assignments for each project type. She also created a little calculator for add-ons to the high-end project, making sure any extra tasks done maintained high profits.
Portfolio Phase 2: New Ideas
What changed immediately? Her 2 team members were more clear on weekly objectives and daily tasks. Kimberly found herself with more confidence in her meetings, initially turning down business, but then quickly landing a few mid and high-end projects.
With her better organization, and avoiding the greed of taking on too many projects, she now had more time on her hands.
Deciding to really lean into Portfolio Profit, Kimberly decided to go all in and try 2-3 completely new types of projects.
After brainstorming, she decided to begin developing the following:
After a few months of false starts, she organized it this way:
Interim Chief People Officer- Designed a client qualification list, marketing copy, and a 6-9 month general plan to take to startups. She begin soft-marketing this on her website, posting 2x per week on her socials, and adding 10 founder CEOs to her network every week.
Training Courses- She started with a guide on how HR managers could go independent. She’ll share this with 10-20 HR managers per week to begin a community. In 6-12 weeks, she plans to open a course for this group of people.
Software Product- Knowing nothing about how to develop a software application, she started with a very basic spreadsheet that would track 3 pieces of the most useful information for a CEO to know about their people. She went onto Upwork to ask for bids to turn the spreadsheet into a mobile site with login, and she budgeted $500 per month to play with this. She plans to test this while she does the Interim People Manager work.
Work in Progress
Kimberly’s business is still a work in progress. She used Portfolio Profit to better identify which projects were most valuable and begin some incubation work. As she sees what works and what doesn’t, she’ll have to cut and reinvest aggressively to avoid burnout or wasting cash. She’s on the path to improving her general profitability while developing a community and product incubations to go for a blockbuster.
Download the Free guide today to learn the secrets that Kimberly learned to make the right changes in her business.
Indie Entrepreneurship
Pieter Levels, Indie Hacker
Pieter Levels, a serial entrepreneur, builds startups by working alone, designing and developing everything himself. This approach allows him to move quickly and test his ideas by seeing if people will pay for them. He emphasizes the importance of keeping things simple, focusing on what's essential, and being willing to take risks and try new things. Levels' goal is not to scale his startups to massive sizes but to have fun and be creative while making a living.
Levels also discussed his approach to learning new things, emphasizing the importance of taking action and building projects to learn quickly and effectively. He uses a minimal tech stack and focuses on building simple solutions to problems. When it comes to monetizing his projects, Levels prefers to charge users from the beginning, which helps to build a community of users who are invested in the product and provides a more sustainable business model. He also emphasizes the value of being a public-facing person and building a positive reputation, which can help to attract users and partners.
His recent podcast with Lex Friedman
In the News
China’s collapsing startup ecosystem
China's venture capital industry, once a thriving hub for start-ups and innovation, has dramatically declined in recent years. The number of new company formations has plummeted from 51,302 in 2018 to just 1,202 (!) in 2023, with many venture capital firms struggling to find lucrative investments. The decline is attributed to a combination of factors, including a slowdown in the Chinese economy, a crackdown on technology companies, and an anti-corruption crusade that has led to increased scrutiny of private businesses.
The industry's decline has led to a shift in the way venture capital firms operate, with many now focusing on lower-risk investments and requiring founders to take personal liability for debts. The pool of capital available to venture capital firms has also shrunk, with foreign investors and wealthy Chinese individuals reducing their exposure to China. State-backed players now dominate the market, accounting for around 80% of capital. The decline of China's venture capital industry is expected to hamper future innovation, with experts warning that the country's technological progress will suffer as a result. Many venture capital firms are now looking overseas for investment opportunities, with some questioning whether China's venture capital industry will ever recover.
The disappearing of Jack Ma was just the beginning of the collapse.
Want to print your doc?
This is not the way.
This is not the way.
Try clicking the ··· in the right corner or using a keyboard shortcut (
CtrlP
) instead.