Charles: Everyone welcome to another edition of founder wisdom podcast stay with us we have jason long he is ceo and founder of tangent solutions and a bunch of other cool businesses that we are gonna discuss today so jason can you introduce yourself and tell us a bit more about your day-to-day?
Jason: yeah absolutely uh so my name is jason long i'm the ceo of tangent solutions i am also the operating ceo of a company called experience care which i'll get to in just a second i own a portfolio of software as a service monetized services agency and outsourcing businesses and day to day i work as a as a hired gun ceo for private equity groups uh with distressed assets.
Charles: Okay so i mean you you own a bunch of SAAS uh businesses how did that came about why did you decided to go for that business strategy why not you know focus on on one startup?
Jason: oh that's so in the beginning i did focus on one startup uh i started my first marketing agency in 2021 uh 2020 is that right no 2020 2000 my bad 2000 not 2020. 22 years ago my bad uh and so uh it started off as one business and it between 2020 and 2007 it grew to be about 30 full-time people and then it crashed and burned in the 2017 market downturn and that was really really really painful for a lot of reasons uh but during that time uh or i don't yeah during that time i decided i'm never ever going to be in that position again and so rather than just having one single thing i ended up starting a number of businesses that gave me simming passive or passive income or or non-passive income and uh i work for years to get those businesses set up before i was able to step away and do do other things.
Charles:So you put your duck eggs in various baskets.
Jason: Exactly, well just yeah if something fails there's always a fall over if something goes you know completely bust i'm not i'm not that concerned about it i mean i'm concerned but it's not like i'm i'm gonna be out looking for a job or something.
Charles: sure sure so pre-interview we talked about you know your pretty tight um schedule so you're you're like tight on schedule and time management sort of so how does one manage all of that in one day like how much time do you spend at experience care what time do you get up and how do you manage your other portfolio companies?
Jason: great question so i usually wake up at 7 30 in the morning uh i take i get my daughter up who's a year in three months and we go for a walk and i get a cup of coffee while we're out usually sit and play with her for a little while and then around eight o'clock uh 8 30 um i will get my day started uh most of my time is on my day-to-day work at experience care so that's uh that was a distressed asset it's it's you know in the last couple years we've 10x sales in that business we've uh you know cut churn by 66 percent or more uh we've you know made some pretty substantial improvements there so but still my day-to-day is over there uh the way that i manage all of my other businesses though is either for some businesses depends on what stage they're at some businesses it's just a weekly check-in with whoever the leader for that business is uh other businesses it's every other week some businesses i rarely talk to anymore uh there's one of my one of my outsourcing companies i i get emails from them but i pretty much never talk to them anymore um and so and that business does does fantastic i also use a mixture of traction the book traction and uh to to set forth things like the the mission vision uh i use the people analyzer a lot etc or the executives i put in place use those tools and then i manage the day-to-day goals with okrs from measure what matters and that's been a really really effective tool in understanding what's happening in all the different businesses keeping executives on track making sure that i understand what's happening they understand what's happening where the company's going how things are doing and i can look in on those goals at any given time and see how those businesses are doing and for some businesses especially newer ones i'll step into their weekly meeting and just take a look and see how the goals are moving along and for other businesses you know that's not as necessary and i also would like to point out that i've started a lot of businesses not everything has worked some some things have have gone great and some things have failed or we've closed them up and you know that's the way it goes.
Charles: yeah that's the way it goes i just finished uh an interview before yours from a startup studios and they they claim well it's bold on their website that 90% of startups don't make it at their uh startup studios so yes that's kind of part of the game uh with SAAS and bootstrap types of businesses i guess it's it's less and uh especially if you have control on the ideas and execution but still it's pretty it's it's a pretty high failure rate and we need to to be at ease with that um i have a question related to your okrs and kpis in the team so what do you do if um a leader keeps on missing his okrs kpis what type of conversation do you have with them how does eq and empathy comes in and when do you fire that person from just repeating uh bad performances?
Jason: so i've had one situation where that happened uh lasted five months and it was an executive that was not not getting things done well or not getting things done i think it's probably a better way to put it and at the end of the day i just said i'm not fun like the company wasn't at profit by that point uh and i just said i'm not funding the business anymore and we you know we just agreed that we were going to close it up and that was that um you know i really like looking at it i should have pulled the trigger on on killing it after two months like that that's you know i i have made a commitment to give it six months but i i knew early on it wasn't going well and i really should have have stopped funding it after two months i it's one of these things i kind of kicked myself over but a good lesson to learn.
Charles: So was that a ceo because you manage these ceos that manage managed your portfolio of business right?
Jason: exactly it was a ceo yes okay and uh did you acquired that one was what was the pre-scenario leading to that that was a business that i had started i don't know maybe 10 years earlier that was struggle that that worked out well when i was leading it but it was never it never had great growth it had very very slow growth and it was kind of a break even business i brought in a new uh executive into that business with the hopes of revitalizing the business but at the end of the day it was a business that was going to be way too hard to really get going anyway and so uh the moving into bringing that new executive in it was kind of my last ditch effort on that business uh you know it was one of these things where i said if if this person doesn't work out i'm closing it up anyway because it's costing me too much time.
Charles: yeah and to me what i understood from my last questions about okrs and kpis that you hire slow you do your due diligence before you hire a ceo you make sure that they're a full fit for the job right?
Charles: that's like 90 %of the equation then you don't have to worry about like okrs and kpi's achievement um in terms of hiring cos i want to have my portfolio of companies managed by their respective ceos i'm on the back to that um what would you recommend in terms of compensation you have a general number in mind that you should give them around six figures and probably uh shares of the business how do you operate with that?
Jason: oh it's a great question okay so le that that has to do with the way that i start up businesses so let me talk about how things get started and then i'll talk about the compensation yeah so the way that these days you know i've been doing this for 20 something years now these days i feel like i do a pretty good job knowing what businesses are going to work and which aren't going to work i i've failed at enough businesses to know to know that okay and so what i do is i have i have a business startup team that i would pull from other from some of my businesses different people come together we uh you know the idea you know we have the idea from whatever it could be a million different places uh so we we put together some basic stuff around it we validate the idea we validate the sales process we validate this distribution we make sure that the business is going to work and that it can gain traction quickly almost everything i do these days is really really simple stuff you know nothing big nothing too complicated but something that i can spin up really quickly i can test it and validate it really quickly it doesn't have a high startup cost and it has a very high profitability you know something where within six or eight months we can be pulling in fifty or sixty thousand dollars per month and within two years we can be pulling in 150 000 per year at least it has to have a hundred fifty thousand dollars per month it has to at least have that potential uh and and with that with that something that has a very high margin as well you know we're looking i wouldn't do anything that has less than a fifty percent margin on that and i don't mean gross gross margin i mean like like i'm making 50 on that.
Charles: are you talking like mostly service based like an agency or even an old school construction company or do you go SAAS because to me what you're mentioning here in my mind it's like agencies?
Jason: so it can be all sorts of things so one of the things to keep in mind is that with with my agency we build a lot of software a lot a lot a lot of software and a lot of times what we see is an opportunity not for not to take somebody's software that we built for them but we we take a look and we go oh this other industry needs this idea that we built in this industry because we're very broad across many industries and we realize there's this little piece coming across we have a team that just got done building that thing and it might not be perfect but what we'll do is we'll say okay cool let's rebuild this thing but for this particular industry in this particular way so we've got to still produce software very very very quickly and we the jh media group is a SAAS build company so what we do is we go all the way from from feasibility and validation all the way to taking things to market for everything from funded entrepreneurs uh to mid-market companies okay and so we we have a foundation that we can we can spin things up really really quickly.
Charles: so are you talking mostly b2c or b2b ideas?
Jason: b2b, personally i do almost nothing in b2c except for for you know like i still i work b2b in b2c but that's it so so we have a validation group that comes together within the business validates the idea if it's going to work fantastic we get you know them then put that into the chunk of ideas like yep that's going to go and then for um and then at that point we have something that we know is gonna work we know is gonna go uh we can see how it's gonna go and then we i start looking for an executive to take it over so at that point um uh i usually i know going in that we're gonna bring in an executive that's gonna have equity stake in the business okay so the um i wasn't gonna say so usually i have a list of people that i want to work with you know people i've met over the course of years and uh at a different different events other other executives other ceos other other business people and i'll kind of pull from that list and just say hey look you know i got this idea it's validated i got the website up and running we have a minimal amount of revenue coming in but i need somebody that wants to lead it.
Charles: how big is that list is it like 100 individuals and how do you know that well they probably already have a job?
Jason: it's like well i have a pretty large network of uh of entrepreneur friends like i would say i have an exceptionally large network of entrepreneur friends so i would say definitely in the hundreds of people yeah and of those hundreds of people maybe 20 or 30 that at any given time i might give them a call and say hey how's that current business going what what's what's up with what you're doing right now and um and go from there.
Charles: okay so you'll post something on linkedin slash call them up with for to discuss that big ideas um they're entrepreneurial how do you know that the salary that you'll offer them will be interesting at this point of their career?
Jason: so it's it's almost never talking we don't talk about salary talk about the growth of the business i'm not in peop and having people that need a salary to come in to do this i want somebody who's in a position where they're where they're way more interested in generating wealth then then generating you know like a salary like a salary position you know the the people i'm talking to for the most part are pretty well set they can live for years and years or indefinitely with no salary okay or they can generate if they need to generate you know get by money they can do it very very easily it's not the kind of people i'm pitching to.
Charles: so the idea is always already established the concept as well you have a proof of concept right there and you're like okay i'm gonna give you 20% to 30% of that that could be worth uh your part could be worth like five to eight millions in like five years is that the type of deal or?
Jason: exactly so what we do is we put it together where you know at uh you know we create a plan around uh around what we're doing and we say um uh you know we should be at revenue by this point and the first person that gets a salary off of this revenue is you know sometimes it's that person but sometimes that we got to bring on a va we got to bring on a whatever right but the first person in general that's going to get a salary is that person it's going to be based on the number of sales for that business up to a certain point and then once that person.
Charles: you mean the ceo right we'll be the first paid? okay.
Jason: but you know sometimes we have other smaller uh roles that have to get paid right out the gate yeah but usually the person i'm bringing in is somebody that can get on the phone and do a sale yeah this is somebody that has entrepreneurial experience they know what to do to make that stuff happen i'll help them out i'll get them going on the different pieces if they you know but we're bringing on people that know what they're doing okay so you know they they make a salary up to x amount or they have a staggered salary going up so let's say we have a product right now we're spinning one up where we're expecting to hit 10k mrr is not mrr 10k aov not alien that's not right 10k per month let's put it that way uh with in the next uh two months two or three months like out of that is going to go to the ceo to begin with and the other 5k goes to uh
Charles: connection is lagging Jason, just let's give it a second here.
Jason: these other people if we hit 20k though there we go
Charles:um yeah the okay so 10k a month 5k goes to the ceos and then i guess after that it kind of diminishes so let's say you guys hit uh 20 a month then it will be like 7.5 k in his pockets or something like that?
Jason: So if we were to hit yeah exactly but it's it steps up over time so it depends on what the business is it depends on what's necessary like maybe we have to bring in a senior sales person and that's going to cost us 10k per month plus commissions or something like you know but or in this particular case this ceo the one i'm thinking of right now she's probably going to hit 10k pretty fast and then above that then we have the operations of the business and then we have uh disbursements for the company but pretty quickly after hitting 20k on the business that business doesn't need a whole lot more people after that like it's going to run for a while at a cost of 20 to 30k per month even if the company is doing 200 or 300k per month it's still going to keep operating at around 30k per month so you know and so the the deal is after after we hit this particular you know whatever that number is everything above that that that executive and i just split that on either a monthly or quarterly basis okay be on there.
Charles: okay i get it um two questions arise from that so one my first piece of understanding is i mean you have a huge network um and people trust you obviously so when you come up to them with an idea because the proof of concept i mean i want to discuss a bit more about that product market fit your definition and so forth but my first my first understanding is that okay they know jason they know that he's been doing that for a while if jason has an idea is gonna make money that's why i'm i'm gonna try it is that the the mindset that they have initially? because that the follow-up the follow-up question is why wouldn't they start it themselves you know because they don't have a proof of concept they just don't have the idea and they're good at executing they're more they're better at operation than having the vision is that it?
Jason: good question uh it's usually that i have the distribution of the connections like that that's usually the distribution is usually the hardest piece you know it's start getting something started going from zero to one it's all about sales and so if i've got the sales lined up then it it doesn't make sense for most people to get it started the other side of it is that i also have a lot of resources i bring to the table so it's not like they can they can you know most people can just go ahead and start these kinds of things up it still takes tens of thousands of dollars in just you know spinning up the business spinning up all the resources getting all the you know the software in place getting the people in place i fund all of that to begin with so you know if if we do need you know va's or we need designers we need uh developers i have all of that within my without my my companies already and so i can just pull people to get things done yeah so it makes a lot of.
Charles: So you are the idea guy you're the vision guy you're the starting guy the startup guy the founder guy kind of and they're more operational because the the question is you know and i wrote that in my trailer yesterday i wrote i write down 100 pieces of ideas and um i think well i don't want to call it that way but like we want to have the bigger end of the stick uh like let's say more than 60 of the the equity and i mean some people don't want to have the bigger end of the stick because they're less risk-averse that's one but you know like to me it still raised the question if that co is super talented why doesn't he start his own thing and how can i justify me owning uh sixty percent of the thing vs him only owning like five to twenty percent of the thing?
Jason: yeah so it's what i said i funded you know like that that's you know i'm putting my money where my mouth.
Charles but they're pretty wealthy also you you mentioned that to me you know so it's just that they're not they're risk-averse kind of they're like unsure and you you crack the starting part the ignition part type of.
Jason: you know i i think it's actually has a lot to do also with what's expected of the person so there's one other there's there's two things actually you brought up the operation side versus the vision side yeah i'm definitely the vision guy and i'm definitely the startup guy the day-to-day operations is what i'm looking for i'm looking for somebody who wants to run it every single day but there's another angle to this that's really important to remember the when i go to pitch people on running these businesses it's not a forever job their job is to get it in get the operation set up get the processes in place run the business for six months a year two years whatever it may be and then put in place all of the different systems that so that they're only working zero to 15 hours a week.
Jason: got it got it got it got the the zero to five is kind of hard um and even then for example my uh agency business i do that with seo and sometimes i'm like almost at unease of you know like that person not spending a lot of time in my business i'm like okay yeah he gets this rickering but that that was part of the deal too you know it's all these weird voices you know as as an entrepreneur that you have and you know you you want to um have your return on investment and so forth but yeah i understand these are like win-win deals right there i want to talk about product market fit you know because we all have different um versions of product market fit in my case i own a cold email agency and i can get product market fit incredibly quickly by launching you know new product variants testing it on various various audiences and seeing you know if there's ignition obviously then there's a zoom meetings and then we can sell them on that new product service whether it's a saas or a service based type of business and see let's say after 10 meetings if i can close at least three or four then we have some kind of a fit what is your own definition of product market and then i do that like 10 times more you know and make sure that it's scalable and i have probably 15 to 25 other business criteria for startup to be a product market fit in my head but like what is yours?
Jason: so let me i want to step back real quick to the previous question before you jump down to that my my grandfather had a really good saying about about these businesses without that helps quell all those voices in my head he said don't fall in love with your businesses your businesses are there to make you money that's it to make your life good and to make you money at the end of the day if that business is making you money and and you're running a good business of course like we're not we're not talking about an unethical business if that's a good business that you're happy with and it's making you money fantastic it's doing its job if if somebody else is getting 40% i don't care if i'm not working in it it's just 60% of the the profit coming from that business into my bank account every month fantastic one thing to worry about so you know so i don't i don't i try not to let those voices be out with that with that idea in my head so now the concept of product market fit is exactly the same as what you do the difference is i have a i have instead of well actually i don't know how your business works a lot of times i'm the one i get on the phone and i make the phone calls yeah.
Charles:i make him too i mean as a ceo as well as ceo um well most the best ceos in my opinion are selling ceos but especially as a visionary and a product market fit guy that ignites the whole thing because i want to do something very similar to what you're doing already doing it to some extent um yeah i don't have a choice to hop on those phone calls myself and talk it out you know and yesterday i dropped a newsletter and you know these these things that we're talking about a lot of entrepreneurs have problems doing that launching new products they're like yeah uh i i don't have any experience in that how how will i do it you know just like a guy that's distributing his first cvs um and also they have a second problem which is raising prices i actually coach a lot of entrepreneurs to do those two things you know to launching products test them and just raise your freaking prices you know um so it's like yeah what what do you think about that approach you you know just launch a bunch of emails get meetings get feedback because yeah i do take these calls myself and i i get feedback and yeah hopefully i'll get sales as well out of it.
Jason: so there's there's one other thing that i found works really really well pick your industry whatever the thing is you know wherever you have this idea and go to a local trade show like find a trade show that's going on go to the trade show and just ask a bunch of people if this is a problem worth solving okay like if you just if you sit down and you can go to a trade show and you can talk to 100 plus people in like a day in our two days about about if you have this one idea this one angle almost always you'll get what whether that's an idea worth pursuing because you can just ask them right there like would you buy it would you buy this thing i can solve this problem for you right now would you buy it if i i got it right this minute you give me money i'll fix it if the answer is no don't go do the thing and uh and then on the flip side the other thing to do on with if the answer is no is all right what is your question what is the problem you're having you know this this actually happened recently with with the company that didn't work out that i was talking about that um the uh we went to a trade show we realized that the business given the the staffing shortage in america the business was going to be really difficult to make run and so we asked that the trade show the the the most recent show we went to what is the problem you're having and it was recruitment was the biggest problem and and it came down to after some questions it was not just recruitment it was writing great uh job descriptions and so you know what we looked at doing which we ended up not doing i actually gave this idea to somebody who's more in this industry is we looked at actually just building an agency that just writes job descriptions for enterprise businesses and and does like videos about how great it is to work at that business.
Charles: yeah i mean HR is humongous and i have a component of my agency that does cold email for recruitment i do it for my own business and it works magic you know you target specific titles and write up great copy and then you get on calls with these candidates and and see if they're fit um yeah that's beautiful especially if you niche down in one specific niche you know like agency for fintech for example recruiting uh cfos for fintechs for example so um or regulation people compliance people even better um super super fascinating and interesting yeah this process um the conference thing you know for a young guy like me i mean i tried uh conferences back in days where never really successful kind of also makes me uncomfortable you know to go to people and but i guess that's that's just me you know and i've heard various um successful entrepreneurs talk good stuff about conferences you know and even making sales as well once you have a product so i would implement that one but i'm curious if i could do a version of that with cold email for example just ask a question back directly in the email and or uh send them a link to a google form do you think that would work as well and i could maybe provide these ideas to some clients or or for myself?
Jason: it would it might work it might work but i don't it would not work as well because when you're at a conference people are not at their desk and they're there to talk about their problems and so they're going to really open up to you whereas if somebody's working you know they're gonna be like look i got like 10 seconds okay like whereas there they get all the time to talk to you and you're going to be able to delve in and ask tons of questions uh you know in in all of that and you were talking about HR actually one of the one of the businesses we're spinning up right now is a company called ux designer finder all that company does is find and recruit ux designers agencies SAAS businesses and uh enterprise businesses very similar process we go to a pretty extensive vetting process.
Charles: okay very cool we've got a couple of minutes left two minutes and i have to be precise um one i mean yeah we need to do a round two but i have like two more questions one is um you're obviously you know financially free i'm not sure since what age exactly probably around your 30s or something like that but you invest mostly in your startups or do you put like your your money in different um baskets like stocks and uh crypto?
Jason: great question uh so i make a lot of money off my real estate these days uh i invested in single family homes a while back and then i took some of the really good ones put them on airbnb and i've actually done really surprisingly well off my airbnb investments and these days i'm actually starting to invest in other countries and also in in vacation rentals in other countries i'm actually going down next week to costa rica to take a look at a house we're putting up there um in santa teresa costa rica and then uh so one is real estate um two i i used to do a lot stocks and bonds but at the end of the day i don't have enough time to watch it it goes up it goes down one day i'm way up one day you know next year i'm way down i know people that do really well on it but it's another thing to think about for me so what i've done uh really i've got three major things i've got my real estate i've got businesses that i've been an angel investor in and continue to be an advisor in and a lot of my friends you know obviously have a lot of friends that have businesses i invest in their businesses actually i just got a really really amazing investment offer yesterday for a company that's on track for 150 million this year um so you know uh investments like that and then and then in my businesses and i would say that i don't know what's uh the majority of my my assets are in real estate because as i've made money i put them into real estate uh and you know as a place to kind of store store and store wealth and then uh and generate wealth because it generates cash every single month off of that and then uh generating wealth off of my investments and then generating cash once again off my businesses and off my my you know wealth and cash off my businesses.
Charles: We've got 20 seconds left where can people find out more about you real quick?
Jason: uh tangentsolutions.net it's got my portfolio you can also look me up at experience.