01:27 Hey, welcome back to the show. We are so excited to have with us Carolyn Lowe, who's going to talk to us about her business and what she's done to grow in scale. Carolyn, who are you and what do do?

01:38 Hey Todd, thanks for having me. Carolyn Lowe founded ROI Swift about eight years ago, really to help brands grow and scale that are in the three to 50 million range. So my background grew up in Boston, Dell recruited me and brought me down to Austin, Texas in 1999. Spent six years in a variety of businesses there at Dell ran a two billion dollar division. just wasn't fun anymore to do that every day, day in, day out. You know, couldn't get excited about it.

02:13 You say that so casually and everyone listening is like, a $2 million part piece of business? That's awesome. How does that get boring?

02:22 and yeah, it gets boring because it's as you can imagine, the bigger the organization, as you know, the slower things move. And so for someone who loves e commerce and loves transactional marketing, that was a really difficult, difficult, you know, challenge, you know, lots of input and lots of cooks in the kitchen. And so, I went to a mom and baby company in 2014 and I loved that. It was a $3 million Better For You mom and baby company, which I loved. Company called Upspring. And I was their whole e -commerce and department. So I ran their website, their Google, their Facebook. I moved them to Shopify back in 2014, moved them off of Mailchimp to Klaviyo. And then I had this fledgling little Amazon business, which I grew and scaled like 4,000 X. And then they eventually got acquired two years later by Reckitt Benkiser. So that was where I found my passion.

03:20 That's awesome. I mean a two -year play to an exit is music to most people's ears. That's really cool.

03:27 Yes. No, they had been in business for 10 years before I took over and did their e -commerce. So a lot of that growth happened in that 12 -month period.

03:37 Well, I was going to say when you mentioned a 4000X growth in a couple of years, that's pretty fun.

03:44 It was really fun, really fun and great founders and great mission.

03:45 Well, I can tell. mean, you know, obviously not everyone has an opportunity to jump into something that niche and that fun, but it's like when you find something you're passionate about and you can totally get behind the founders, it is a fun thing. Like, it's a really awesome thing. So that's really cool. So, so from there, your, your, your story sounds like it's leading from Big Dell, which in 1999, I don't know that there was too many people bigger than them. Not manyThat's a big organization. You go to Austin, you have fun with that, but then you kind of get dialed into this small startup, grow that, exit that, and then what?

04:30 And so then I founded ROI Swift about eight years ago to really help, you know, I said I loved doing that with Upspring. I want to do that with, you know, 999 more brands. you know, set off on this goal to help a thousand brands grow profitably through, at the time it was paid search, paid social and Amazon.

04:52 Okay, fair enough. And how is it going so far? Like how close to a thousand are you?

04:59  Well, I think Todd, this is a really interesting part. And I think every founder knows this. There's a time in your business when you need to pivot. it might be industry, right? It might be products. It might be people. There's all kinds of pivots you need to make within a business at times our pivot this year, we did a big pivot, we moved away from paid search and social. And that was really scary. You know, I think, yeah, to shed 30 % of our revenue was kind of a scary thing, but it was the right pivot. And I think..

05:38 What made you think you needed to make a change like that? mean, to cut 30 % is a scary thing for anybody in any industry, but like you were looking at your numbers and thought what? Like, were just too spread out or what was the thought process going into that?

05:53 Yeah, and I'll share a little bit about this. I was on a Zoom call with Richard Branson from Virgin Group and he said, you know, 

06:05 Sir Richard Branson, by the way.

06:06 Sir Richard, I should have said sir. Wow. I hope he doesn't come find me.

06:09 Come on, come on.

06:10 So, and he said, you know, if we can't be the best at a business, then we exit it. And so there's things that he has shut down because they couldn't be the best. And given all the iOS and privacy changes and, you know, what you can get on Meta today is not what you could get on Meta returns five years ago, even, you know, there was a boot company that we took from like zero to 18 million run rate in 12 months just on Meta advertising. But that was seven, eight years ago, right? You can't get that kind of results now. So we looked at that. And then the other big thing, as you can imagine coming from Dell, we all ran massive P &Ls, we're very numbers focused. And we realized our revenue per client was almost half that on paid search and social than it was on our Amazon business. And they were a lot harder to run. And so we looked at the profitability and said, this is great, but you know, this is not scalable. have 70 % of our revenue is coming from Amazon. Let's shut this down. So July 1st, we actually shut down 30 % of our revenue and we're 100 % all in on Amazon because that's what we are the absolute best at.

07:28 Oh my gosh! I absolutely love that story. I, for those of you listening, this is like a, a, a very moving moment in any business when you can actually start chopping product off. Normally it's not a 30 % revenue item like you're talking about, but I mean, it's definitely nice to cut a lot of like 5 % and 10 % guys out of the way, but like, That is such a bold move and I absolutely love that you did this. And walk us through a little bit about your P &Ls. How do you look at them? How do you review them? Because I would venture to say that the majority of our listeners know what they are, but they don't know how to read them and get those cues. What are you looking for when you're looking through your P &Ls? And how do you kind of organize them so that your expenses reflect directly to a revenues, like how do you structure it so you can read them and get data from them that's actionable?

08:27 Yeah, great question. Great question. You know, there's a great book called Profit First. So you look at your revenue and then what do you want to make for profit? Do know that book?

08:37 I do, just, my CPA made me listen to it this spring and I absolutely love it.

08:42 It's fantastic. I'll tell you, so we're in a service business. So obviously for product businesses, it's very different. But in a service business, typically people are your biggest expense, right? We provide a service. so some of the key metrics that you look at are, you know, there's a great, if you're on something like QuickBooks, there's a built -in report that's, know, P &L as a percent, as percentages. So you can just spit it out, takes two seconds and you can see, my headcount, my overhead, my labor is X percent. And so if you know where you want to be in terms of profit, and most, you know, agencies are in the 10 to 30%, you know, depending on where they are in their life cycle. And then that's where you can say, well, hey, if my head counts 60% of my, you know, and that doesn't even include all my other expenses, that's going to be a problem. So it's sort of like that fine balance of needing to know what those percentages need to be to hit your numbers.

09:47 I love it. And honestly, this is a huge, huge thing because for those listening, it is different if you're product -based, it is different if you're service -based. Like they are not the same thing and you're gonna look at these percentages and probably hear Carolyn talk about her percentage of 60 % staffing overhead, even in a service business, that's not awesome because you do have other software tools, you've got other SaaS products you're subscribed to to do your business and at 60%, that's just not feasible. if you want to take home more than 10 or 15%, right?

10:19 That's right. That's right. So, you know, and like you said, some of those fixed costs, right? So you've got to scale those, you know, scale those as revenue grows, some of those software licenses are fixed, which is great. And then that then your overall, you know, other expenses comes down as a percentage. So and then things like activity based cost model is really helpful to understand. OK, how much is this? How much does this cost if we do it? here in Austin, Texas, or how much does it cost if we use our near shore person in Columbia, you know, at $14 an hour versus $48 an hour. we do sort of use some low like, what I would call lower level, junior level tasks. All of our senior folks are here in Austin or Columbus, Ohio, but some of our low level, like if you're going to sit on the phone with Amazon support all day, You don't need to be paying a senior person for that.

12:58 No, you definitely shouldn't be anyway. And that's a perfect use case, Carolyn. I was in the BPO world for about 18 years and I firmly believe that a nice hybrid model like you're describing is a great way for companies to balance that overhead percentage balance. mean, it's so hard to find those magical recipes, but what you just described is a great way to kind of structure yourself so that you are, you're American when you need to be and you've got people who are qualified and smart enough to handle all the other junk, that's a great way to set up your balance between near shore, offshore versus your in -house type people.

13:46 Yeah. And I'll tell you, we did, I'll tell you some experiences with offshore just real quick as you know, we did that at Dell. They, they early on, they moved tech support overseas and it, it backfired. And what happened was, you know, it would cost us $7 or no, sorry, $10 in the US to, to, to service a support call, but it would get answered on the first time. you know, consultants come in and they say, okay, Well, we're going to move it overseas and it's going to be $7 a call. We're going to save 30%. They didn't factor in that the person had to make three phone calls because the staff wasn't trained and they weren't senior and they didn't know what the US folks knew. And so it actually ended up costing double. And then of course they walked it back. So and for us, think having folks in the same time zone was really a big difference for us. I know a lot of folks use people in the Philippines or different time zones. But for us, we love people to be working our day so that they're part of our team as well.

14:55 I get it, I get it. Very smart and very good use case. I've seen that problem happen a lot and if you're considering offshoring or nearshoring, you gotta determine, I love to help people understand, build your org chart, understand who's client facing, who's not client facing, and really identify what roles would make sense to outsource versus the roles that you really shouldn't. Because I do believe there's a lot of roles you should not.

15:23 Yeah, like which ones do you not, would you think, tell folks not to outsource?

15:29 Well, I definitely feel like deal closing should be done by an American. I think that outbounding is totally appropriate if it's a very simple outbound with a very simple offer. But in a customer service level, that's where my call center played a significant role. It was a hybrid. I actually had a team in Utah that would take escalation and a team in the Philippines that would take all the kind of general inbound. And then we got smarter and divided into IVR. And we were able to channel specific calls to offshore, which were easily solvable and other calls that were requiring a little more assistance. We just sent straight to Americans. And so there's a, fantastic way that you can kind of identify. You don't want two or three calls back. You want to resolve on first call resolution. And so, If you can get that out of an offshore team, fantastic. I've found even, Carolyn, I don't want to hog the conversation, but there are certain parts of the world where there's specialists who do very specific things culturally better than others. And so like I've found that for coding and for really hard backend things, either India or Eastern European, like that Slovakian block over there. They're so good at it. And both of them are like mathematically minded and they just think logic, logic, logic for customer service. I love a Columbia team. I love a Philippines team. Filipinos are just so generally happy and they could get yelled at all day long and they just smile. It's okay. Here's what we're going to do to fix that. And so like different roles for different cultures, I feel like time zoning is important. But understanding what makes them that way helps you not place a square into a round hole. You know what I mean? it just is that way. People's countries, cultures are very real and they're very different people. So that's my take on it.

17:45 100% and I think the work ethic in other parts of the world is amazing.

17:49 Yes, yes, yes. They definitely appreciate their jobs more than a lot of Americans do. But the fact that you experienced this on a very large scale with Dell and then incorporated this into your business, walk me through, as you look back at your growth, because eight years and you're profitable and you're now niching into this Amazon -only type agency model, Walk us through, like, I know that that was a key decision, but what are the things kind of led to your initial transition from a launching company into someone in a growth stage?

18:27 Yeah, I find a lot of people get to this point. And the one thing is, at some point, most folks do want to sell a business. And to do that, you've got to have a few things. You've got to have a repeatable sales process. You've got to have recurring revenue. So there's a whole checklist of things you have to have. And I feel like, for us and for a lot of folks, I think the first zero to two million is pretty easy. And then you you sort of enter the valley of death of the three to five, know, sort of that range. And, and, and you sort of your business sort of just grows organically, right? Okay, you've got referrals, you've got this, you've got that maybe, you know, and then you hit the point where you're like, Okay, I don't, I can't forecast my sales, right, especially as a service with business if you don't have a repeatable sales process. So do you have outbound? Do you have inbound? Do you have content marketing? Do you have speaking engagements and forecasting? What does all of that bring in? I think that's one of the hardest things as a service business is if you can nail that repeatable sales process, that makes you so much more attractive to folks that want to gobble you up or folks you want to gobble up.

19:53 100%. Yeah, yeah, no kidding. I mean, you're talking exit strategy and I think a lot of people think, well, that's 20 years away. You know, from your previous example, it was a two year play given you knew kind of, I'm assuming that company founder knew that they wanted to exit, but they wanted to increase revenue to some extent before they did. How did you kind of set those benchmarks of, once you reach this mark, we're a very acquisitionable company, you know, like, did you set those benchmarks or, have you done that in your agency? Like how do you, how do you look at your business and exit?

20:33 Yeah, I think in that case, it was interesting because they had investors and obviously investors wanted their money out. So it's a little bit different situation if you have investors breathing down your neck looking for their five to seven year return, right? Versus if you're someone like Dude Wipes who's self -funded. mean, they didn't take a dime. So I love Sean Riley. He's great. And so I think it's a very different scenario. So good. Yeah, we were speaking together at a, there's a big Amazon conference in March in Vegas and he and I were both speaking there and he's just such a great, authentic human and true to his core. I love him. Yeah, so I think, you know, in that case, there was a lot of investor pressure, but I think what you have to do is figure out what's your number, right? So what's your number? What do you need to get to? What do multiples of your industry go for? So most a lot of services businesses are right. Three to five times EBITDA right now on trailing 12. Someone did try to buy us a couple years ago and we got an insane offer. It was like 2X what the norm is and we ended up not doing the deal. just knowing and saying, okay, if my EBITDA is here and I'm gonna get three to five just back into your number, what's your number? And that's where I think most folks get to. There's a sweet spot for agencies. You want to be big, but not too big, because it limits who can buy you. A lot of your listeners get the same thing. get three calls a week from somebody trying to buy us, or three calls a week from somebody wanting to talk about acquisitions. It's, you know, they've got a lot of capital to deploy.

22:29 Yeah, there's a lot of capital out there that people want to deploy. What is the right time to take it? At what valuation? At what percentage of your equity do you want to give up? Like there's so many things to consider and people get paralyzed by that. And so they don't do anything. You know, what have you found to be a good exercise? I mean, it sounds like you entertained an offer that was really, really good. Why did you not take it? What were some of the variables that you personally think about? And what advice do you give to other people out there who might be kind of dealing with the same kind of a fun challenge, I guess you could say.

23:05 Yeah, think one of the things I learned, so I'm in Entrepreneurs Organization, which is the global organization for founders and CEOs. And what I thought was really interesting, one of our partners is Northern Trust, and they did a great seminar for us for EO members. they brought in a deal broker, because they don't brokerage deals. But he showed us all the numbers. Like in every industry, this is the multiple of your EBITDA, based on what your EBITDA is, starting at a million and going up to like 100, 200 million, right? And these are your multiples. So I thought that was really interesting. And then he also showed having a broker. And the broker got 20 different offers for this one company. And as low as 40 million and as high as 300 million. And so I feel like if you are thinking about selling, you 100% need a broker who's going to go shop your deal to 20 or 30 different, you know, potential because there's, mean, the deal that that this person landed, I think was 140 million was the best offer. And so that's a far way off from 40 million, right?

24:23 That's a life-changing difference. Like that is like literally life -changing. You went from having a nice fund to go do your next venture to, maybe you don't need a next venture. That's different.

24:36 Yeah, he wanted jet money and he got jet money.

24:41 I love it. Jet money. Okay. Well, that's awesome. You know, so what advice do you give, Caroline? Cause I, lot of people are out there thinking, okay, I'm going to service base three to five X EBITDA. Like, you know, they don't really know what their number is. What is it? What are you targeting? Like what, what, what kind of things should they be thinking about? I guess age has a lot to do with it. What are the variables do you think about in terms of your willingness to shed your creation and then what's next?

25:17 Yeah, good question. So the reason that I would sell to someone, know, good businesses get bought, bad businesses get sold. The reason that I would sell to someone or agree to be acquired would be for the team. So a bigger team would allow more career progression faster for the team members. You know, I also think it's important that if you have key executives that, you know, there's a carrot for them as well. So I definitely believe in leadership, either, you know, phantom stock or part of Thale and things like that. And so really, you know, I think for me, it would be the opportunities that it would create for a team to be in a larger organization.

26:08 I love it, I love it. And then it's so thoughtful and honestly I feel like business founders that are in it all for themselves, generally that kind of exudes into their team and they know that something's up and I think they're less motivated to get you to where your target wants to be as opposed to, hey guys, we're looking at a possible acquisition here. If you guys can help us get to this number, there's money in it for you. How have you seen those conversations happen or not happen? And did that impact the way that you were kind of visualizing that potential acquisition that you turned down?

26:49 Yeah. yeah, I think I came to that realization after, the deal that I didn't do. So this is sort of, it's, it's a constant learning. feel like everything is a constant learning. like, I wish I knew that before. but yeah, for sure. think that, you know, communicating that, Hey, here's where we're going and here's why we're going here. I think the, the founder of soul cycle, she did a really good job. I mean, there were some people who worked at cycling studios who got 1 % you know, things like that.

27:24 Right, right, right. So in closing, you kind of mentioned something that I really want to kind of get your opinion on because I have a very strong opinion on it. And I think that you probably agree with me in a lot of ways here. You've talked about EO and you've talked about your membership in a community like that. I see so often founders take the weight of the world on their shoulders and they feel like they've got to They've got to somehow magically know what to do next and know how to make these decisions. How has being part of a community like EO helped you kind of figure those things out so that you can make better decisions? I'm assuming it's been a big impact. You seem to be talking very positive about it, but how has that impacted your ability to grow and scale your business?

28:13 Yeah, think, you well, the first thing it did is it helps me buy out my partners. I started this business with two other people. And again, I was on this global finance call and I was, it was a third, third, a third, but I was doing all the work. They weren't in the business the day to day. And so really that EO network, they all shared their experiences about buying out and what's the worst that can happen. And the worst they say is no. And so I had a very successful buyout of my two co-founders and they're lovely people. And so that was really helpful to me. But as you know, sometimes when you're CEO, you're up there and you don't have a good peer community. So for me, it's been great. I have our Austin group and then we also have a nationwide eight person agency group. And so we have a group chat and we meet once every two months. We're all in digital in some form or the other, but we're not competitive. So one's in automotive, we're an Amazon agency. And we share resources and that's been invaluable. share how we're using AI, we share all these different things. So I think it's so important, especially for me, as I was telling you, 47 year old first time founder, this was not my third or fourth or fifth business. So it was really amazing to have that community.

29:39 Carolyn, I love this. I love the whole conversation we've had. It's been such a journey to kind of follow you through this experience. you know, to your point, most people don't jump in and start their own business at 47. Very brave of you, very awesome. Now that you're 49, I think it's awesome that you've come so far in just a couple of years. But, you know, what else do you feel like our community should know in trying to kind of replicate some of the things that have been most impactful to you. Is there one or two key things you'd like to suggest that they'd be thinking about in their growth journey?

30:17 Yes, definitely. So obviously find that group, whatever that group is, whether it's EO, whether it's another group, whatever's available to you, find your find your people. And I also think the other big thing, you know, I had a great mentor, the founder of Chubby's shorts, and he's in EO with me, and he convinced me to take a sabbatical. You know, a few years in, I was getting burnt out, and I took a one month sabbatical and it, it really changed my my world and so I think that, you know, that, and then the other big thing is this is a people business. as you know, hiring mistakes are. Amplified in a, in a service business, right? In a company like Dell, one, one bad employee can, can hide. If you're a 10 or 20 person company, one bad employee can ruin your culture.

31:13 Thank you for saying that. I think most people are too slow to fire and they take too long to hire, but take the time to hire the right people so that you're, you know. But be fast to fire if they're not the right fit. I think that's the, would you agree with that, Premis?

31:29 I with that. So I wrote a book a couple of years ago during COVID, which I don't recommend. Do not write a book during COVID. there's no book signings. There's no anything. But it's out on Amazon. If you want to get it, I'll send you a copy, But that was one of the things that I talked about in my do's and don'ts of my 20 years of successes and failures is just being too slow to fire and not acting quickly enough.

31:58 Fantastic, well for those listening, I hope you got out of this interview what I did. There are so many little key bullet points here that we're gonna outline in the show notes. Carolyn, thank you so much. And I would suggest anyone that's doing Amazon, you're silly not to use an agency who really knows what they're doing to help you with it. Even if you've got a successful Amazon store, adding an agency to the backend of that and amplifying what you're already doing is such a benefit to what you're doing in your growth journey. So Carolyn, thank you so much for taking the time to be here with us today. And we'll add all of her contact info below. So check it out, check her out, see what her business is all about. And thanks again, Carolyn, for taking the time to be with us.

32:42 Thanks for having me, Todd.