Transcript

Mark Bird:

What is going on Breakthrough Success listeners? Mark Bird here. In this episode I'm going to talk about a case study where we have the founder of an ecommerce anti-agency company. It's helped brands to scale profitably online and generate over $750 million in recurring revenue for clients. So naturally, I wanted to figure out how did Stealth Venture Labs become this behemoth?

Because it had to start as an idea and now it's generating over $750 million recurring revenue for clients. And to be able to achieve that, you had to build a lot of trust with clients. You have to pick the right people. There's so much that goes into that, and that's why I'm excited to unpack all this for you at Breakthrough Success here today.

So we're lucky enough to be joined by the founder of Stealth Venture Labs, and he is none other than Brent Freeman. Brent, welcome to the show.

Brent Freeman:

What's up, Mark? Thanks for that super enthusiastic, great intro, brother. It's awesome to be here.

Mark:

Brent, it is such a pleasure to have you on Breakthrough Success. And one of the things that I love to do on the show is dissect companies and how it is that individuals are able to reach their success. So I'm wondering if we can unfold the curtain a little bit and talk about the initial stages of Stealth Venture Labs. How did the idea come about and what were some of the things you did to gain the initial momentum?

Brent:

Yeah, I mean, great question. So every good business starts with solving a customer pain in the market. And so the pain point that I saw was a paper that I experienced. I was an e-commerce and still am e-commerce business owner and operator, brand runner. And I was very frustrated with the typical agency marketing agency model, which was a really good salesperson to sell you on all these amazing things that they would do.

Then you kind of get in there and you have these very, very junior people typically, you know, young college graduates coming out, learning on your dime how to do digital marketing things so they can maximize EBITDA. And I went through that pain point with the brand that ultimately failed because we missed our market timing. We hired and fired a bunch of agencies until we finally built the brand in-house SRT, built the team in-house, and that team started to work with the time our team started to work.

We missed our funding cycle and we had to shut that company down. And so I was determined, never make that mistake again. And I spun out the in-house team into what became Stealth Venture Labs to be the agency by e-commerce operators. For e-commerce operators, understanding how e-commerce works for a 360-degree operator’s view and how marketing as a service can play into that to accelerate growth and grow through growth plateaus.

And that that approach really took off and early days, we started this about eight and a half years ago, early days there was it was really hard to find talent out there. And so we actually became co-founders of a lot of brands and co founded about ten different e-commerce and subscription brands, some of which are still around today, doing multiple tens of millions of revenue, others which have failed.

And in that process, we also then saw how we could do this, not just as co-founders of businesses. And we're using our kind of team as the center of the wagon wheel for marketing services that how do we do it as an actual service for our growth clients. And we did. We had some really beautiful and fortunate successes with companies like Home Chef, taking them for about 5 million ARR meal kit delivery, 5 million ARR to 100 million ARR at about 12 months.

And then again, similar story with Factor 75 through their acquisition by Hello Fresh. And and we just have some really beautiful growth stories under our belt because we understand how to do digital marketing and growth marketing from the operator’s seat. It's not done in a silo. We don't hire junior people. We work in conjunction as, like, more of an augmentation team for all of our clients, a real time communication, understanding, blended KPIs, business intelligence and managing growth goals from the P&L and all of our staff and team have done it.

They are experienced tenured staff. They're not learning on the dime of our clients. They've they've done exactly what we need them to do to scale through growth. Lots of those. And we vet really thoroughly and pay great salaries and 100% of benefits, health, vision and dental for them and their families. The best PPO money can buy to create an environment that attracts and retains the best marketing talent we possibly give.

Mark:

And I love how this starts as you have an in-house problem and you want to create an in-house team to solve that problem. And then you see, wait a minute, I can help people on a wider scale by offering this service to growth companies that can really use it. So when you have an in-house problem that you're experiencing, it's very entrepreneurial to look for a solution.

But think about how you can help other clients with this service. I really enjoyed hearing that story. One of the things that I want to get into is right now you're at the point where you have Home Chef and others as your clients and you've had the case studies where you can take them from 5 million and annual recurring revenue to 100 million in a year.

You have those case studies now. You have a lot more now than what you had when you were first starting out. How did you get the initial clients when you didn't have the case? Doesn't have success stories and you only had maybe a few people on your team in comparison to what it is now?

Brent:

Yeah. So I had gotten some really good advice from an entrepreneur mentor of mine when I was in college and went to USC and was in the entrepreneur program there. It's pretty known I wasn't the lemonade stand kid entrepreneur that wasn't me. And I was oftentimes told, you know, entrepreneurs are born and not made. And yeah, I think there's some of that.

But I also think entrepreneurs are made through grit, determination and a view of the world being in a different way than how you experience it. And so, you know, for any solopreneurs or entrepreneurs out there that are in that early stage and starting, you know, you don't have to be the lemonade stand kid to build a really beautiful and successful career in the entrepreneurial environment.

But one of the pieces of advice that I got from his mentor was that your network is your net worth. Your network is your net worth. And early on I invested into my network, and all that means is that I went to networking events. I was a part of the entrepreneurial community. I met people. And networking isn't about what you can do for me, it's about creating relationships with people and helping them, period.

And it's been a mantra of my life that I maintain abundance through giving. And so if your network is your network and you maintain abundance through giving, you approach me. How can I help? What do you need? What are you looking for? You know, who can I connect you to? You create relationships, and then those relationships over time become like Moore's Law of Compounding into opportunities.

Because those people scale, grow, start new things. And that's how my first clients came about. It was just my network. I had come off of a failed e-commerce startup that had partial angel backing on it, and I was very active in the L.A. Silicon Beach community and as a as a thought leader, as a public speaker, but also as a mentor in different areas.

And I had built a network over five years plus of running that brand. And and and so when I when that brand ended, I joined the venture fund as entrepreneur in residence to kind of help them because they were making consumer Internet investments and their portfolio, as well as my network would come to me and say, oh, you're an operator, you did this, you know how to do this.

How do I do this? Oh, my God, help me out. That was and that's how it started. And people were just being referred to us and asking and calling. And it just, you know, it started, I think our first year, we only did about $150 or $200,000 of sales when I first started, you know, and it was just a couple of clients that trusted us, that believed in us and small retainers and small service and bringing a lot of value.

And then it built on that over time. Referrals and calls and people would tell other people. And it isn't until actually kind of recent history that we've ever even had a sales team in person in this company because it's been all about how do you build and compound that that network? It does get to you. Your network gets you to a certain point and then it caps out.

And then you have to figure out, okay, well, how do I scale beyond this or do I need to? Sometimes it's okay to just kind of get to that scale and just kind of be there. And we realize there's a certain amount of revenue that that comes from that network every year in an unpredictable manner over time. And and so we've had to expand the network.

We've had to expand our value offerings. We had to go outside of our kind of core early adopters and say, okay, well, how do we then tell our story to other people? How do we continue to grow? How do we create those relationships over time? And so so that's really how it how it has grown.

Mark:

For anyone getting started out. And you see this, the further you go up, you see people six figures, people making seven figures network is always something that comes up. It's one of the reasons I love to host breakthrough success because through the show I get to meet so many awesome people like Brent, learn their stories and be able to provide that to you as well.

So it's like we're all winning in this dynamic. On the reasons I really enjoy podcasts. I do want to go into Brent, how you built your network because I think some people have this mentality where you just spam LinkedIn message your way to the top or you see a media outlet and your gut instinct is to just say, feature me because I'm awesome.

What was your approach to building your network? And even now, because you mentioned you're still trying to expand it?

Brent:

Great question. Yes, I've done every press need out there from the Today Show to NBC. I mean, you name it, I've done it. Huffington Post and TechCrunch and Mashable. We've had all the coverage over the years, my various plans. I don't view that as networking or view that is as public relations, as awareness. Networking is about creating authentic, real relationships with people in a manner in which that relationship, over time can grow and blossom potentially into a friendship, into business partnership, or into just an acquaintanceship where it's like, Oh yeah, how are you?

What's going on? It's never been about, what can you do for me? What do I need? It's always been around. How can I help? And I am a what's called an ambivert. So I recharge by being alone. I'm an introvert in terms of that sense, but I like being socially extroverted. I'm a social introvert. There's a better way to put that right.

So networking events for me have always been nerve wracking. I but I would go to them, I would go to them early on. I go to mixers, I go to different, you know, different events like Silicon Valley and the Silicon Beach scene. I put myself out there. I didn't know anybody. You just go and you talk and meet people and you introduce yourself and you just kind of, like, get to know them.

And I would never ask questions of like, So what is it you do usually? Like, Oh, what like to help brings you joy. What makes you excited? What do you say what are you working on that fires you up right now? Right. Wow, that's really interesting. How can I help? What are you looking for? And sometimes in those individual events you meet another person and you're like, Oh my God, Steve, I got to connect you with Jane, right?

And it just happens there. And when you bring value to those sorts of things, you build them and so over the course of compounding, over 15 plus years, those things pay off over time. And I think now I'm at a stage where it's not about quantity, it's really, really about quality. So I'm very, very, very careful with where I spend my time, my energy, my resources, but also about with whom.

And it's not just about how I build and grow my network. I'm not trying to grow my network. I'm trying to surround myself with inspiring and amazing people who inspire me to do bigger and better things, to dream bigger and better things, to achieve bigger and better things, and to make a bigger and better impact in the world.

And so, you know, for me, it's about, you know, my grandma used to tell me that you are the net sum of the five people you surround yourself with most. Most are Jim Rohn, I think. Yeah, yeah. Jim Brown and Betty Freeman and. Yeah. And you know, in that, in that, you know, in that idea, it's, it's networking becomes a lot easier to understand.

And so if you don't need to be a Silicon Valley insider. Sure it helps if you have the inside track or connections, you can just pound pavement, go to events, Google and find out for yourself out there. You know, reach out to people. LinkedIn is so cluttered these days that channel is really, really, really hard to get people's attention, right?

And so the question becomes, is there somebody whom you're trying to to to contact or reach? That's not networking. That's that's outreach, right? Networking is about how do I how do I bring value to somebody? Not what can you do? And so I think what I recommend for anyone listening to this is to take a lifelong approach to building your network versus just a myopic approach.

If you need something, it's sales or trying to get somebody to do something for me. That’s sales. if you're networking, you're building a relationship over time and you don't know what it is you're going to be able to do for that person now or what they can do for you later. But you're just building an authentic relationship. You actually care.

You're not like looking at them and then kind of looking over the shoulder for the next best thing or right, you're present and you're getting to know them and it becomes harder over time to do that stuff. And certainly in the COVID world, it's been much, much more difficult to do that. But now, as the world's come back to a little more new normal sense of whatever that is, you know, events are coming back.

There's opportunities to do these things and getting yourself out there is the number one way to create opportunities.

Mark:

I mean, with networking, the thinking of it as friendships rather than what can I get from you? You're instantly on the right path. And I just really enjoyed hearing that dynamic. And earlier you mentioned how networking is a revenue source, but it's not one of those like you can predict it as much. Like if you're running ads, you can look at your, like, average cost per click, you can see where that goes through your funnel and really understand your conversion rates.

But networking, you're talking to a whole bunch of people and hoping something sticks. Is there a way that you increase the conversion rate? Like do you ask people like, hey, do you know anyone who could be a client of mine? Or do you really let fate play its role in the networking?

Brent:

Again, networking is different than sales. I'm looking to increase sales then I'm I'm approaching it very different. I'm going to do this to increase sales and I'm going to try to find prospects. And I'm not here to network. I'm here to find prospects, seek them out, talk to them, and build a business relationship and try to sell them.

That is not networking. Networking is going in to create relationships, authentic, true relationships. And it is listening to the other person talking here and being interested in what they're doing and trying to bring value to them, not sell them. Occasionally those two paths cross and they need something in you. You can deliver that, but it is very, very, very different.

So don't don't mistake the two. One is one is going in for sales and growth. The other one is going in to build long term relationships. Long term relationships are not monetizable. They're not something that I mean, they are in time, but they're not something you can predict. It's not for you. It's just something like your 401k or SEO,  you're really glad you started early, because if one day pays off, you just don't know.

Right. And sales — it was more like direct response, like buy this now click here. Right, boom, boom, boom. And it's just a thought. It's very, very, very different. So mistake the two, you know, and I think sometimes people do often go to the event network you're going to go and sell some of the prospects. That's fine.

No issues with that. Just just make sure that you are clear because your tactics going to be different is that if you're on the sell side. All right, I'm going to look at this list and I'm going to see all the people who could be prospects. I'm going to try to find them. I'm go to their sessions. I'm going to look for them and I'm going to try to get out of the hundred people that I could get.

I want to talk to 50 of them. You’re filling a pipeline. That's not networking, that's filling a pipeline. That networking is going and talking. And you might have people whom you want to talk to and seek out, but it's not for your own benefit and gain in an immediate way. It's like, I really want to learn why I'm looking for mentorship.

I'm looking for, you know, inspiration. It's so much more.

Mark:

And I want to explore a networking versus prospecting difference a little bit more, because I think a lot of people like to mesh those two together because both of those are dialogs with people. You're trying to advance the relationship, but you have different directions for where you want that relationship to go. And at the same event, there can be people you network with and there can be people who you prospect with.

And we've talked a lot more about the networking side, but I'm wondering if we could go into detail about some of the strategies that have worked for you to build up your prospect's pipeline.

Brent:

Well, there's on the event side, if you any way that you can, the best way on an event side is to be on stage and to be able to be able to be positioned as a thought leader that has a message that resonates with people and then potential prospects and then and then those prospects have an awareness of who you are, and are educated about what you do.

And so if and when you talk to them, they're they're in the consideration phase already. And so in a lot of times they come up to you and see you out and that's your best case scenario. So getting on stage, speaking on panels and keynotes in some way, shape, or form, being positioned as a thought leader, sometimes that is having a booth that's harder to seek out.

It's harder to create in kind of like vision on the showroom floor. I think in this in this case, networking is about me going with no expectations. I'm just looking to meet great like-minded people, be interested, see how I can bring value, how I can help. Sometimes that value I bring is the service that I provide or this thing that I sell. And that's awesome. Whereas whereas prospecting is like, Nope, I'm looking to sell, I need to go. I spent $5,000 on this ticket and X, Y and Z to be at this conference. I need to go generate $25,000 in sales and I am very surgically going through that process and probably not spending time on people do not center the bullseye.

You have to be very conscious of that, though, because oftentimes people that center, the bull's eye can introduce you to other folks because they are networking and that can create a really weird I mean, we've all had it happen when you're talking to someone and you're not who they're looking for and they don't care and they brush you off the look on your shoulder and they're looking for the next best thing.

And it creates that kind of like, “ugh” feeling, right? And so you have to be really careful about how you do it in a way that is conscious of when you're dropped into a conversation. You know, you can let that person like, hey, I'm looking to meet this person if I see them. So I gotta jump here to meet that person so you can create still a good relationship.

So that's the analog version. You know, I think online networking is a lot harder. It’s just really hard. This is networking in a way, you a podcast, one on one side of things, but it's really hard to have that networking effect online and it's really happens in person better. And so online it's about it's about prospect. It's about talking to people. It's about, hey, here's what we do, here's how we do it. It's something that you're interested in. Let's have a conversation. And even in the sales conversation, our style is not like hard sell to tell us what's going on. Tell us what's happening in your business. Let's talk about it. Let me tell you a little about what we do and why we do what we do.

And let's see if we're a good fit, because it's like dating. If it's not a good fit on both sides about how hard I sell, it's going to you know, it's either not going to work right there or it's going to quickly dissolve afterwards. So we take a much softer approach to sales, even even online. It's again, still relationship building.

We have a lot of people whom we've talked to that are early, too early for where we are, and then a year later they're ready to go right and if we had brushed them off or had that conversation focus on building that relationship, we wouldn't be able to work with them in future.

Mark:

And that's a really great point. You mentioned at the end, you don't want to rush to slam the door shut because someone who wasn't ready for your services can become ready in the future. And networking, there's so many opportunities that can come from that. But if you think opportunity with every person you see, it does show and you're looking over to see if there's a more attractive opportunity around.

And then you don't really get anything from the networking, the online networking. It does have its merits, like we're able to interact with each other even though we're in other parts of the US. But you mentioned the events being more powerful and there are so many events to choose from where some of them it's a small local thing, others are the go-to place and nation. You got thousands of people. How do you decide which events to put in your calendar?

Brent:

I think now is different than when I started. Now it's centered around am I surrounding myself again with the quality of people whom I am aspiring to either be or be like? And is it like minded? It doesn't need to be professional success. It's just the type of people who fill my soul right where I feel like, wow, like that was really worthwhile time.

They say that what I'm doing today is important because I'm exchanging a day of my life for it, and the older we get, the more that we, the more we start to realize that the people whom we spend our time with become more and more valuable. When I was first starting, when I started networking groups, I joined networking groups.

I, I went to almost anything I could and work the room. And, you know, by working, running, just talking to a lot of people on business cards, 90% of that stuff never panned into in anything. Some of it depends on other stuff. It's just early on it was a spray and pray model. I didn't know I was really young, but as I've gotten older, I've gotten more refined.

What I go to, what events, what conferences, what things do I attend, where do I attend them? Those sorts of things. And so I think it just depends on your industry, your stage of life, what you're looking for when you're starting out and you're trying to grow, it's it's good to cast wide because the people who you meet, you never know how they're going to come back and keep in touch with, you know, with you or if it if you go to an event especially early and you're uncomfortable with networking like most people are, it's practice.

You get to learn. You get to figure out, okay, there's two people talking really hard to break into, two people talking. But when there's a group of three, there's an opportunity and an odd man out there's an opportunity to come up and join right. You know, and so it four is when they're paired off, it's harder to break in, but in five there's — it becomes a big conversation.

So you start to learn these things as you get into that and start to understand the tactics or even things like when there's three people be like, ‘Hey, can I join you guys? Sorry to interrupt.’ Right? You know, and so you just start to like in you’re in these smaller groups, even things like Toastmasters or just gives you and builds confidence.

So when you go to things that really do matter, you know how to do it in a successful way. And yeah, it's going to be super uncomfortable. Yeah. Nobody I don't know anybody that likes networking, honestly. I don't know anyone. Right. And so it is uncomfortable. You just get in there and you just do it and you just meet people and be curious, ask questions, you know, and ask how you can help. You may not be able to do shit.

Mark:

And I really like how you mentioned you started with the spray and pray approach. I think that's a very common way for people to get started. It's understandable since you don't have a network yet, but I think people, they take that model too far. They continue. And at which point, once you know enough people, it's time to narrow your focus on the people who there's a reciprocal desire to help each other grow versus seeing each other for the opportunity.

Brent:

Or in your industry. You know, if you're if you're wanting to really dig into Web3 and, you know, you go to Web3 events, then you might realize, do I really want to be on the Ethereum blah, blah, blah? And you might go the niche down into where you want to go, right? And that that makes that makes sense. That's super normal to kind of go more and more and more specific. And you know, they are the big thing to networking is your follow up. If you get people's cards, sending them notes, if somebody is really impressionable for you or somebody you want like to be a mentor, I sent handwritten thank you notes and and sometimes I'll say like, hey, I'd love to take you out to coffee lunch if you're open to a phone call.

And if they don't live in my city or fly out there or happen to be in New York at this time, you know, it depends on who they are. Through that, I've created some really powerful mentors, people, partners at Sequoia and billionaires and people who started huge clothing brands and, you know, and so it's it's it everybody's just people. It's just about access to them. And if you do it through an authentic way, people want to help. Especially if you’re young. I don't think young college kids or recent grads realize just how much access they have by being young. You want to give back to them. And as you get a little bit older, it's harder to break in. But even that idea of humility is like, Hey, I'm a young entrepreneur, I'm an older entrepreneur. I'm trying to figure out what to do in the first place. You have ten,15 minutes. Every 15 minutes is a sweet spot.

Mark:

I mean, just like you don't want to grab too much of their time, I don't think we're in that 10 to 15 minute, see, handwritten notes. That is a really great strategy and people don't get stuff in the mailbox as often. It's far less cluttered than LinkedIn and email, so I definitely love that strategy. You have shared so many great insights that are tied together for people who want to learn more about you and visit your online brand, where do you suggest we go?

Brent:

So our company is Stealth Venture Labs and so it's stealthventurelabs.com. And that's where we do all of our inquiries for people wanting to work with us. We typically work with brands that have found product-market fit and are trying to scale, having a hard time doing it with an in-house team or existing agency. And if they're interested about what I do, kind of on the personal side, it's BrentFreeman.me meets my personal website.

I'm in the process of writing a book about my own entrepreneurial journey and path through all the data, all the challenges. Being an entrepreneur have gone through peaks and troughs and failures and depressions and all that stuff, you know? And so in the upcoming year or so, I'll be I'll be coming out with more on that. But those are the two main places.

Mark:

Well Brent, thanks, we will have those links in the show notes. Make sure you check out Brent's personal website as well as Stealth Venture Labs. Thank you so much for joining us on Breakthrough Success. It was a pleasure to have you here today.

Brent:

Thanks, Mark. Thanks for having me, brother.