The Exchanges

Q I'd say, I don't know if this is the same or different, but not like the big vision that you just say at kind of like, um, a PR talk track event, but like when, when you're running in all hands with your team and like, you're trying to just get them so focused on where you are headed as a team and as a company, what do you say?

A We want to become the default platform for creators to build successful online businesses that are sustainable. Um, and we say that because, uh, there are a lot of different types of creators. Again, to your point, we're not focused on Every creator. So the creator economy is this, like, big amorphous thing. We put a pretty big delineation between people who are putting out, again, content around their knowledge, experience, and expertise, and not so much, I have a thirteen-year-old daughter, my daughter on TikTok, who's a creator. It's a very different entertainment vibe that we usually kind of veer away from, and we're in the business of actual value transfer. Um, and so when we think about that, the products that we power All are in service of that, that actually, when you think about what people are willing to pay for, people are very much willing to pay for valuable content and, and ideas and, like, experience or coaching that helps them get better. Like, essentially investing in themselves via knowledge commerce. Um, and so it's one of the reasons we've, we've powered over six billion dollars in creator revenue since our inception, two billion dollars this year, is because there's just a lot of value transfer there, right? Value for the customer because they're learning something and value for that creator because they're putting something out there that people want to pa…

AI assessment note: “We want to become the default platform for creators to build successful online businesses”

Q creators. And, um, we'll talk about it in a few minutes because I think you're very intentional in, in using the language knowledge creator. And I want to understand how you think about that and why this is kind of your, your core customer that you focus on. Uh, let's, let's just talk about a few more things with the actual business. How do you make money, uh, at Kajabi?

A So Shopify is a great example. Um, and that is, it's kind of an analogous for what we do, but for digital goods. So we, we charge people a subscription fee here. So the concept on Kajabi is that you can make a dollar on Kajabi. You make ten million dollars on Kajabi. We have people who kind of do even bigger than that on the platform, but you keep it all. And so our, our job in an honest handshake is like pay us a subscription fee and you know, like you do your business and we're the picks and axes that power that business. Uh, we are getting into the payment payments platform, but that's not in its way like a take rate. It is just be like helping us embed payments into our product. That then, um, you kind of pay the same rate to do for a stripe or anything, but we are able to provide that service a little bit better cause it's all embedded within Kajabi. Cause again, we're trying to be the one place you need to go to, to build your online business.

AI assessment note: “we charge people a subscription fee here”

Q basically every row is a different CEO of a venture backed or fortune, 500 business. And then basically every column was a bucket of how they spend their time and what percentage of their time they spend on it, like an aggregating calendar of everyone. What are the buckets that you spend your time on today? And what is the percentage of time spent on each of those buckets roughly?

A Yeah. And I think it's shifted. So let's talk about today. Right now we're in planning phase. So right now it's reiterating kind of the vision of what we're trying to do and letting teams kind of, uh, gather and talk about the great ideas and, and kind of cultivate those ideas and bring them up and help us think about our roadmap. So right now probably it's like. 20, 30% vision setting and reiterating vision setting, like all the time, you gotta say that, you know, I had this one CEO of my last company, his moniker was Tell them what you're going to tell them, tell them, tell them what you told them. And he just did that again and again and again. So I think that's like 20 to 30% of the time. I think recruiting is a big deal. Like we are a business that are pretty healthy. So we're, you know, over a hundred million dollars an hour. We're profitable, but we're really strategic about the way we build the business. And so now we're getting into the phase of how do we get the right executives into the company and make sure they're set up for time. So that's probably 20 to 30% of time. So I don't know, that's like fifty-ish percent of my time. Um, the last, the, the kind of one piece is culture setting a lot of the degree, and we have a lot of work to do here because-

AI assessment note: “So right now probably it's like. 20, 30% vision setting”

Q And out of curiosity for that, uh, last example you use, um, do you know, how, how does she make her money on the platform? Is it, is it through like, Paid subscription. Is it a premium podcast? What is it?

A Yeah. So the way she does it is, um, majority of her revenue comes from courses, right? But it's, it's a very, she's very thoughtful person. Like she knows marketing well, and she knows her brand very well too. So she's an ex neonatal nurse. And so what she ends up doing is she's like, you know, kids are like this recurring dynamic society, obviously, which is great. Like people have kids all the time and her audience keeps getting replenished. It keeps getting replenished. And a lot of it is like, Hey, you should check out. It's like a referral. So you should check out this website, follow this person on social media. And all of a sudden when people are pregnant, they're thinking about, ah, this is going to be hell. How do I get ready for this? And when it's time, they're aware of her cause she's able to build this funnel. And then, yeah, when she wants to actually monetize, she brings into her website and they, they get educated on what the content is and they pick a package, uh, one course, several courses. She kind of merchandises it however she wants cause she controls it. And then all that revenue goes right to her and it's a digital business. So it's even different than like a Shopify business. Cause the margins here are like crazy astronomical, right? So it's really, really cool way to build businesses and even augment, uh, e-commerce businesses with this kind of like t…

AI assessment note: “majority of her revenue comes from courses, right?”

Q a podcast of, uh, Keith Raboi, who, uh, Turner Novak was interviewing him about, uh, open store and Keith's perspective is he is super anti hybrid or remote work, uh, where his view is founders fund. We'll only invest in companies that are almost entirely in person. Uh, and I would say that is a relatively contrarian view than kind of what people talk about today. What's, what's your perspective?

A So, um, I think all things being equal, if you were to ask me, I would be like, yeah, I would love to be at an in-person company. Like I, I would think, I think there's something to that, especially at those early days, which are an early stage company. I think it's almost impossible to do it remotely, though. There are a lot of examples of companies who have, like, I think GitHub from day one was remote all the time. Um, the, the, for us, the situation we're in is like, we also have to look reality in the face and be like, 80% of our workforce is not here. So how do we build, what is reality and how do we build toward making that reality as productive as possible? Um, and so while I, I would never shirk from it, I do think in person is it. We also have like a lot of our teammates who we have to make sure we have awesome experience. And that's kind of what I was looking to before. Um, I do think over time, but it seems to be shifting to like People are kind of getting back in the office. Um, the nuance there though, is companies like us, the, the advantage of remote work is that we can kind of hire anybody anywhere, right? So all of a sudden that you open up this really big workforce, we're able to hire people. I'll use myself again from Cleveland, like some awesome engineer sitting in Cleveland. You can go get her.

AI assessment note: “if you were to ask me, I would be like, yeah, I would love to be at an in-person company.”

Q dollars. You've raised more than that. How do you think about like fundraising as this tool for ultimately realizing the vision of the business? When does it make sense from your perspective and how are you actually backing into like You raise around that big. It's like, it's almost like hard to think about raising that much money. How do you think about the right amount to raise and when?

A So, um, the real answer is what are you going to do with that money? Right? Like if you should raise money, if you have a way to provide a fantastic ROI on those dollars, but also the responsibility of those dollars, right? It doesn't come for free. And so my view on it is like, if you think you have a fantastic opportunity to go after some big market and You're, again, speaking of like an execs finance guy, like a sources and uses, like you know what you're going to do with it, and you have a vision, and frankly, you're taking a little bit of risk on what you're going to do. I think you should raise that money and see what happens. The flip of it, you just got to realize you're bringing on partners, you're bringing on expectations, and you're bringing on, um, frankly, some kind of timelines in terms of when you do it and how you do it. Um, but I think it's got to be coupled with like, where are you going and why do you need this money? Um, if you're just doing it because you can, I think some startups fall into that where, like, particularly that Zerp environment, they're like, let me just pull up my balance sheet and, like, dump cash onto it. But if you're not doing anything with it and the company doesn't grow into it, then it kind of screws everybody. Um, and so I think having a deliberate thesis around why you need that kind of capital and what you're going to do with it a…

AI assessment note: “having a deliberate thesis around why you need that kind of capital and what you're going to do”

Q Yeah, and so you, you said, you know, 20 to 30% of your time is, you know, kind of vision setting. 20, 30% of your time is, like, planning and getting ideas up from different parts of the company. What else are you spending your time on?

A Yeah, so that's cultural thing. Last piece is evangelizing what Kajabi does, to be honest. So our, Market position, um, is we always put the creator first, and sometimes it's to our detriment, right? Like, you can go into a website, you have no idea it's powered by Kajabi, and it's making a ton and ton of money. There are other companies out there in our competitive landscape who kind of put their brand first slash whatever, and that is just a different orientation we have, and so for my job, a lot of it is now evangelizing the power of this platform, right? Like, it's talking to other companies, trying to figure out strategic partnerships that unlock value for both. But a lot of it is just like telling our story, telling our customer story, and making sure people know this is a viable option for them to build these businesses. That isn't necessarily a tip of the tongue, because structurally, we don't put ourselves out there the way a lot of people do it, but we think that over the long haul, that's the right position. It's always putting the creator first, even if it's a detriment to our brand, because we think they'll tell our stories a lot better than we will. Their success will be so obvious. It's like, my God, why did I do this? Before, but that's again, the kind of a longer term view than man, a branded awareness wasn't awesome last quarter. We watch it, but we don't frea…

AI assessment note: “Last piece is evangelizing what Kajabi does, to be honest.”

Q and so I think people create this association, like, how do you build a business when that is the relationship? Because for big creators that are making most of the money, why don't they just hire their teams to do this if they have enough money? And for the long tail, how are these people making enough money to power a business? Clearly, you've been able to figure that out.

A Yeah, I mean, you know, even when I talk to a potential creator to get on the platform, a lot of them will be like, oh, I got, like, It's 300,000 followers on Twitter. And I'm like, that's great. I'm like, that doesn't necessarily translate into an awesome business, right? Like not all followers are critical and what that equation is, nobody really knows, right? What we found is you can have like 5000 people following you on whatever platform you want, or just frankly have their email and you can build a six figure business on the platform, right? So people, I think all this, it's a, it's a really good point you made. Like people kind of get lost in the race of you got to increase your follower count. It's like, What are the actual, of your followers, of your audience, what is, who actually cares about what you're putting out there, and who would actually pay for what you're putting out there, that enables you to build a life around that. And I just think YouTube and all these places sometimes give you false positives, that people, again, might find you interesting or entertainment-y.

AI assessment note: “you can have like 5000 people following you... and you can build a six figure business”