Derek Coburn on How He Built an Engaged Tribe of Raving Fans (and Paying Clients)

Do you wish there were some way to generate twice as much revenue in your business without doing twice as much work?

Derek Coburn felt the same way with his wealth management firm. He realized that in order to significantly increase his revenue, he was going to have to either work a lot more hours, or find a different way of working.

Luckily for Derek, he was able to specialize and differentiate himself from other financial advisers, which significantly increased his client retention, as well as the amount his clients valued him. In Derek’s case, this value came from what he calls “The Ultimate Tie Breaker” – he was able to differentiate himself by sending clients referrals. There’s nothing a business owner loves more than more business, right? Derek was so good at making those connections that he made a whole second business of it (cadre).

Luckily for you, Derek has shared his story with us. He includes details on cadre, which he co-founded with his wife Melanie. They call cadre an “un-networking” group, and have had great success by helping their group members help each other.

When you listen to this interview, you’ll hear Derek and I talk about:

  • (03:25) Introductions
  • (06:00) How he built his financial firm
  • (08:30) An explanation of his first networking group
  • (10:30) How to add extra value to his clients by referring them clients
  • (13:30) How he expanded the conversation with his clients, to talk about more than financial planning
  • (16:00) How he used surveys to reach out and ask how to provide extra value
  • (17:15) How he created the time to launch his second business, cadre
  • (23:30) Going from idea to reality with cadre
  • (26:40) How he used a webinar to launch the concept
  • (31:00) How he got existing members to refer more
  • (36:00) How his business model has evolved to justify $3000 upfront to join
  • (41:00) How he ran a launch meeting
  • (46:00) His plans for the future of cadre
  • (48:30) An introduction to his book
  • (50:00) The Boise launch plan
  • (1:03:00) An overview of how to be more useful to your clients

Resources Mentioned

The Thank You Economy
Informly’s podcast
Amy Porterfield’s podcast
Human Business Works – Chris Brogan
Youtility – Jay Baer
School of Greatness – Lewis Howes

More About This Episode

The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.

It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.

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Connect with Trent Dyrsmid:


Trent: Hey there Bright Ideas hunters. Welcome to the Bright Ideas

Podcast. I am your host, Trent Dyrsmid. This is the podcast for

marketing agencies, marketing consultants and entrepreneurs who

want to discover how to use content marketing and marketing

automation to massively boost their business without having to

massively boost the number of hours they work every week.We do this by bringing on experts who share with us the story of what

made them so successful and this episode is no different. We are

going to be joined by a fellow by the name of Derek Coburn who

is a partner in a very successful financial advisory firm and

has about 15 employees and he has been doing that for quite a

while.But, more recently he’s also the author of a book and founder of

another company. The book is called “Why Networking is Not

Working” and as you might guess from the title it’s about

obviously why networking is failing and Cadre, his new business,

is predominately a DC based community of remarkable

professionals. Their members are the cream of the crop in their

industries and more interested in sharing resources than

gathering leads.So, in this interview Derek is going to share with us exactly how he

realized there was a need for this service and then how he

launched it and some of the ah-has he had along the way and

ultimately he is going to share with us his story on how he’s

making it a very successful company.But, before we get to that I want to tell you briefly about a Bright

Ideas product. If you are a marketing agency or a marketing

consultant and you are struggling with lead generation you will

want to check out my MobiLead Magnet. M-O-B-I Lead Magnet

.That’s at It’s a WordPress plugin and will allow

you to build landing pages very quickly that display how bad

someone’s non-mobile friendly website looks on an iPhone and it

also shows them how good it could look if they had a mobilized

site. The idea is to use this landing page to capture their

interest and get your foot in the door to have a marketing

conversation.So, please join me in welcoming Derek to the show. Hey Derek welcome

to the show.Derek: Hey Trent thanks for having me.Trent: No, problem, man. I am jacked about this interview. We have got

a lot of really cool stuff that I want to talk about. Just

before Derek and I got on the air we were talking about how he

took himself from one business to two businesses and he’s got

two kids and he’s writing a book and he’s got a lot of really

cool stuff going on. I really want, because I know there is a

large percentage of my audience that still has a job and they’re

trying to make a transition and they’ve got a part time business

and they want that business to become more fulltime. Derek has

already gone down that trail and done it successfully. So, we

are going to get him to talk all about it.So, Derek thanks so much for coming on. Maybe just real quickly,

introduce yourself. Tell us who you are and what you are doing

to get through to all of the results that you’ve got.Derek: Thanks so much, Trent. So, I’m Derek Coburn. I own a wealth

management business with two other guys. We have been running

that for about 15 years now. We have 15 employees. Right now, I

spend about 20 to 25 percent of my time in that business, but

it’s hyper-focused on a segment of clients that I really enjoy

working with that are a great fit for me.I also co-founded what we call an “unnetworking” community in DC. I

co-founded this with my wife Melanie. It’s called Cadre. We have

right now about 105 CEOs, business owners, mediapreneurs if you

will that we bring together through offline events of different

types, facilitating connections online through our private

member community and about 90 percent complete with a book that

should be coming out in the next couple of months called

“Networking is Not Working.”Trent: And you have two kids.Derek: And I have two kids. My three year old started pre-school today

for the first time. So, I’m pretty excited for him. Time’s

flying by, but I try to make time for obviously those two and my

wife as well.Trent: Absolutely. So, for the folks, this interview is probably going

to be useful for a whole bunch of people but the ones that I

really want to speak to because I know I have a large following

in my community of folks as I mentioned earlier that still

either have a business and wanting to start another one for

whatever reason or they have a job and they want to start a

business of their own again for whatever reason. The reasons

aren’t terribly important for your and I discussion. The point

is, the desire is there and they’re trying to make that

transition.So, let’s go back to the point, so, you had a wealth management

business that you built up and was successful. Cadre did not yet

exist. How did it get created? Where was the motivation? I think

you were doing financially pretty well with the financial

advisory business, so something was tugging at your heart

strings.Derek: Yeah, so it really occurred to me back in 2008 that I had built

up a pretty good client base via cold calling and some referrals

from existing clients. I was focusing my growth strategy in

terms of meeting new clients by attending networking events.

Towards the end of 2008 that was the very beginning of what

would end up becoming the biggest sort of one of the worst

financial markets, if not the worst, financial markets since the

Great Depression.

The wealth management business, at least for me, is a recurring

revenue model, which is good. In fact, we use that same model

for Cadre. What it means is that if we are not providing good

value and a high level of service for our clients they can take

their money and go somewhere else.

So, obviously at that time there was a lot of additional hand holding

that was needed. We had to spend more time with our clients and

we wanted to really. We wanted to make sure that they had their

money and we were making the recommendations and providing the

advice that was in line with what they felt comfortable with.

So, what I realized was I was running out of time in my day. For a

variety of reasons I had to rethink really everything that I was

doing. What I realized, the average financial advisor has close

to about 400 clients. At that point, I had about 100 to 120 or


The nice thing is cold calling and growing your business when you’re

first starting off, it’s great. You will almost work with

anybody. But, once you get a taste of what a really great client

relationship looks like, that’s sort of when you don’t want to

cold call anymore. That’s where you want to try to focus if you

can on only adding new clients who are going to be aligned with

you and are on the same page as what you are providing them.

Essentially, what I did was I said, I don’t want to be this guy

that’s working 70, 80, 90 hours a week with 300 clients that are

sort of all over the place. I began to really focus on quality

at that point. I slowed my growth and I realized that going to

these larger networking events was not a great use of my time.

And I ended up a way that I could fill both services or both

activities if you will in terms of providing great value for my

existing clients while also meeting new people that would be

ideal clients for me was I formed my own networking group of

about 20 or 25 people. This was not Cadre, but it was an event

where I brought together some of my great clients, some of their

top advisors and some other professionals that I had handpicked

and I was facilitating getting connections and adding value in

ways above and beyond the core service that my clients were

expecting of me.

Trent: Okay, and so was there some kind of a structure you had? What

did you tell these first 20 people when you said hey, I want to

start this networking group?

Derek: I had this big ah-ha moment for me. It’s what changed

everything. A client of mine, who I’ll call him a landscaper,

called me up. He was one of my best clients and he said, “Derek

I got a call from one of my really great clients and their

brother-in-law does what you do and they asked me if I would do

them a favor of meeting with their brother-in-law. I told them

that I really had a great relationship with you. I was happy. I

wasn’t looking to make any changes, but it was one of those

things where they were a great client and they said no

obligation whatsoever you would just be doing us a favor if you

just took the meeting.”

So, he told me about it ahead of time which was great. He called me

up the day after he had a meeting with this gentleman. He said,

“I got to tell you what happened, Derek. 45 minutes into the

meeting which was a pitch which is pretty consistent with the

way a lot of folks in the financial services industry would

approach a first meeting. He got to the end and the conclusion

that he drew was if I had my money invested with him instead of

with you, Derek, for the past couple of years I would have

earned an extra 2 to 3 percent a year in my portfolio.”

My client responded and said, “here’s something else that you might

want to take into consideration. Derek has referred me to

clients, to my business, over that time that have resulted in

over 2 million dollars of revenue for my business. If we were to

look at the big picture, Derek,” which I did not do by the way,

but “Derek could have lost half the money in my portfolio my net

perspective would have still been better off working with Derek

than working with you.”

He was laughing. He was saying that I had nothing to say. It made me

realize I am doing this without a lot of intention for a lot of

my clients right now. I’m focusing on their business and how I

can add value for them above and beyond what they expect of me.

What if I just started really focusing on it and building out a

process and trying to identify clients who in addition to

providing great value and a great service in terms of investment

planning, financial planning, what have you, that they have

businesses that I understand and I get and I might be able to

affect their business by identifying clients and being an

extension of their business development or marketing department.

Trent: Seems like a very good idea.

Derek: So, I call that the ultimate tie-breaker. If you think about

it, it’s also a great thing to be able to say from a marketing

perspective as long as you can back it up. So, I wasn’t going

around saying this to everybody, but most professionals, most

entrepreneurs, probably a lot of folks in your audience, they

probably feel like one of the best things that could happen to

them in their business is to get a great referral for a great


I think that just to take that a step further and say gee, probably

the best thing that could happen for my clients, right now,

would be for them to get a great referral and if I am the one

that’s providing them that great referral you are going to have

a client for life and you are going to have somebody that’s

motivated to help you and somebody that’s going to be interested

in finding ways to help you succeed either through introductions

or additional business for them.

Trent: So, when you got nose to the grindstone with your financial

business. I think you described it that you were working pretty

hard. Was it a decision at this moment in time that you were

going to start referring clients to your clients or had you been

doing that all along with your 120 clients?

Derek: I certainly wasn’t doing it for all 120. I was doing it for the

ones where there was maybe a more obvious way to do it. But,

what I did was identify clients that I had yet to do this for.

That I felt like I might be able to help. I sat down with them.

I interviewed them. I got more information from them and shared

with them this additional role that I was going to be serving in

terms of the value and the deliverable that I was going to be

bringing to the table.

Trent: Was Cadre born out of your desire to do this, because I do want

to shift to that. But if it’s not I want to talk about how you,

I guess for lack of a better term, structured it? How did you

actually refer? Did you have a process that you used or a habit

or whatever to refer your clients? Obviously, they are going to

love you for that. That’s a no brainer. But, I want to know how

you actually made it happen.

Derek: Once again, for anyone that’s in a transaction business, when I

say transaction I mean you sell something one time and you are

never going to sell something to them again, I don’t think

that’s very many people, but because even if you sell something

to somebody now, there’s a pretty good chance you have another

service, another product 6 months, 12 months from now you could

potentially reach out to them in terms of an ideal client.

Really, for me, it was all about expanding the conversations that I

was having. What else is going on in your life? What else is

going on in your business? I think in any industry if you are

somebody that can help your client solve other problems they are

having. Whether you can provide the end benefit if you will or

not, then you are going to become important to them. Once you

start showing that with an individual one time, two times, then

you have these individuals that are reaching out to you.

My clients started calling me every time they had to make a decision

about anything. I’ve referred a great car salesman, probably 20

or 25 opportunities over the past few years. Anywhere from

larger purchases for companies all the way down to baby


It takes a little bit of time, but if you just focus on what else can

I do for my existing clients and the important people to me in

my network, then you are going to find yourself in a position to

do this and to start adding value for them and then they are

going to start coming to you more often and referring people to

you, etc.

Trent: So, let me just make sure I understand this. Let’s say for

simplicity of this, you have two clients. One of them sells

mattresses. I brought that up because I bought a king size

mattress on line before we started this episode and the other

one needs a mattress and you find out there’s one of your

clients that needs a mattress and you know there’s one of your

clients that sells mattresses, so you say to your client that

needs the mattress, “Hey, I’ve got a really great source, a

client that sells mattresses, you should call him.” Is that

essentially what you are doing?

Derek: That’s fairly straight forward and that definitely happens, but

if you think about it a lot of us wait until we have something

to sell or it’s just an annual check in with our clients and its

always about how they are doing in relation to what we can do to

help them.

So, if you start reaching out to your clients, I know you’re big on

surveys. I’m big on surveys, getting information. Finding out

what else is going on in their business. They will appreciate

the fact that you are reaching out to learn about how you can

help whether you can help them or not. They will still hold you

in really high regard for doing that.

But over time as you build out your network you are going to be in

the position where you can start helping them and you are going

to be the go to person when they have really any sort of

business decision or personal decision for that matter that they

are going to reach out to.

Trent: So, the reaching out to wasn’t necessarily always on with one

on one phone calls. The surveys are a very time effective way of

telling your client that you are thinking about broadening the


Derek: Yep.

Trent: Okay, cool. I’m just making a quick note here, all right. So,

at what point did you decide hey, I want to start Cadre?

Derek: All right, so we started Cadre back in 2011. My smaller

networking group was going really well, but the thing about the

wealth management business is it’s highly regulated. Compliance

departments are really on you about everything. Because of the

handful of individuals in my industry that like to try to take

advantage of people and take advantage of the system, they sort

of ruin it for everybody else.

Trent: Yeah.

Derek: I had the editor from the Washington Business Journal reach out

to me to offer the opportunity to write a weekly column for them

in the form of a blog. They were calling it a column, but it was

a blog. I went back to my broker dealer and just like 99 percent

of financial advisors out there right now, that just aren’t

completely independent, they said no chance.

The reason is pretty ridiculous. The reason is we can approve the

initial article, but we cannot approve or monitor the comments

in the blog. If somebody leaves a comment and says hey for me

and my situation how would you handle this and then I answer

them specifically, they are worried a year from now someone else

is going to search, find it, and think that answer applies to

them and make a terrible decision. So, that’s how ridiculous it


I had been reading a lot of great books. The Seth Godin’s all of his

books. “Trust Agents” by Chris Brogan. I saw this other way.

Gary Vaynerchuk wrote his last book, “The Thank You Economy”. He

said, “if you are in legal or finance you better really love

what you do, because those are the two industries, that you are

really not going to be able to take advantage of all of the

other opportunities from a marketing, word of mouth, etc.

standpoint that other businesses can take advantage of in terms

of one line awareness in marketing.”

That’s when I said you know what I have way too much information and

I see all the great ways that I can be growing my brand, finding

clients, and I’m not going to be able to do this if I just have

the wealth management business. But, I like the business and I

like my clients so I’m going to figure out a way to start

another business. That’s sort of what happened at the very

beginning that had me thinking, okay, I want to do something


Trent: I think a huge, let’s compare your wealth management business

to, I don’t know if this will be a fair comparison, but we’ll

try it, to “your job.” I’m trying to make it so that the people

who have a job can relate to where we are going to take this

conversation in the next few minutes. How is that you’ve freed

up time in bread and butter number one so that you had the time

and mental energy to start bread and butter number two?

Derek: So, the answer that I give you might not directly benefit those

with a job, but for me I had some good revenues coming in at the

time with the wealth management business and because I also had

two other partners, we were able to pool our resources together

and hire people that were really good at a variety of things.

So, it’s really been a while since I’ve sat down and rolled up my

sleeves and really taken a technical look at my client’s

portfolios. I do that at a high level but we have really smart,

awesome people covering a variety of topics, a variety of areas

that we counsel clients on, in place.

For me, I wrote a 300-page systems manual for that business. I got

very specific about who would be doing certain things and I

wanted to set up my financial advisor business so that it was

similar to going to the doctor, right. Where when you go to the

doctors you doctor doesn’t check you in and say fill out this

form and I’m going to take care of you. Your doctor has other

people in place that are perfectly capable of doing all those

things so the doctor can focus on the high level really

important health issues and really the reason why you are there.

I do think clearly, through virtual assistants, I figure out to this

day what am I doing right now either personally or

professionally that I can pay someone else to do? For example,

through a website called, which I think is a national

website, I found a housekeeper. She works 10 to 15 hours a week

for us. She comes in. She takes our dry cleaning. She picks

after the kids. She cooks for us one night a week. Really, just

takes care of all of these things that I would have to do if she

wasn’t doing them. We pay her $15 an hour.

I think that for a lot of us, especially if there is another

business, another idea that you have or that your listeners

have, take a look at it. If this works and we can start

generating money from this what am I doing with my time right

now that I can find someone else to do and pay them so that I

have that time freed up and I’m going to make more money to

justify the difference in that cost.

Trent: Makes perfect sense. You need to have your time make more than

$15 an hour which is not terribly difficult to do, especially if

you are selling something to a business person.

Derek: Absolutely.

Trent: So, for the folks we used the term Cadre and I know we

introduced it at the beginning of the show, but I want to make

sure people understand what we are talking about. Briefly

describe what Cadre is and then I want to walk through the idea

on a napkin to the 100 plus paying members that you have now.

Derek: Sure. You had mentioned, I think it was one of your recent

interviews, I think it was with Andrew Warner, you had a comment

that said, “just build what you want to be a part of that does

not currently exist.” Even though things were going well in the

wealth management business and with my smaller networking group,

which didn’t have a name by the way. I planned round table

lunches. I hosted wine tastings. I did some things on line. We

can expand this and there’s not really anything out there where

I know I can go into a room or to an event and I can be around

people that all have the same intentions that I have when it

comes to developing relationships.

Not trying to push their own agenda, not trying to sell me something

or get their business card into my pocket as quickly as possible

but people who were successful who had a really great business

and had a pay it forward approach and I can take the time to get

to know you and help you and knowing you are going to do the

same thing for me.

I reached out to a handful of individuals that were in my current

networking group, and I said I want to do what we are doing now

but I want to do it on a larger scale and I need your help. I’m

not sure it’s going to work or not because it sounds like

rainbows and unicorns. It sounds like this happy place where you

can walk in and everyone there is going to be on the same page

as you. They are going to have a good business. They are going

to be interested in learning more about ways they can help you

and your business.

I didn’t want them to recommend other folks from their network and

have them pay us unless I really felt like it was going to work.

I was skeptical. I felt like they are going to invite people and

maybe 50 percent of them are going to still try to take

advantage of the situation and try to sell everybody else on how

great they are.

We just did round table lunches at the beginning. That initial group

with the help of these individuals, we had about 60, 70, 80

people on a webinar where I introduced the idea. We said for the

next two months you can go to one lunch a month. You will have

five or six to choose from each month. Based on your

availability we are going to assign you and put you together

with other individuals who are participating. You are going to

have 5, 6, 7 minutes to share your story. What a good

opportunity for you looks like. What your ideal client looks

like and then you are going to have the opportunity to hear that

same information from 8, 9, 10 other people.

We did this for the first two months. We didn’t charge anybody

anything. We asked everybody who’s in and we had about 80

percent commit to remaining a member.

Trent: I don’t know if this sounds or not, but did you let them take

it home and try it and make sure they like it and if you want to

keep going then pay.

Derek: Yep. It was still a very low risk situation for us because it

was giving us an opportunity to meet 50, 60, 70 individuals that

we previously didn’t know. Even if it didn’t work we decided not

to move forward with it we were going to expand our network and

meet some pretty great people in the process.

Trent: Absolutely, you were. There is not a lot of downside to

reaching out to successful business people. Let’s talk briefly

about the webinar. How did you get people on it and what was the

core message that you shared?

Derek: The way we got people on it is something that I still do to

this day that works better than just about anything else.

Whenever I have anything that I want my network to help me out

with, to share, to promote. So now we are doing larger events

with best-selling authors. I’ll say here’s a link to share on

Twitter. Here’s a link to share on Facebook or LinkedIn or other


But, if I actually type out an email that is verbatim, in most cases

they don’t make any changes to it. If I type out an email that

looks like it is coming from them and they can copy and paste

that into an email I am allowing people that are willing to help

me I’m making it incredibly easy for them to do this because I

am doing all the work. I think a lot of times we say you have a

referral for me, that’s great, or you have somebody you want to

introduce me to or a business you want to introduce me to, and

we sit around and wait for it.

What I realized is we have and I have probably 30 or 40 different

types of emails like this saved as templates that if I do the

work ahead of time and I’m making it really easy for you to do

it then you are much more likely to do it assuming that’ I’ve

done enough on my end to warrant me doing a favor for you.

Trent: Yes, if I like you and you send me an email and say, Trent, cut

and paste this and send it and I think you are a good guy

chances are pretty high that I’m going to do it.

Derek: You still might do it otherwise but it’s still work on your end

and you have to make the time for it and it may or may not

happen. I equipped these individuals that I was asking them for

help. I gave them the email and made it easy for them to send

along. The other great thing about this strategy whether it’s an

introduction, referral or whether it’s come to my webinar, you

are framing it on your terms. You are able to specify the action

or the next step that you want them to take.

A lot of times, if I hadn’t done that I would have gotten many emails

that said meet my friend Derek; they are putting together a

networking group that I think you would like. You should reach

out to them then what are they going to say? They are going to

say, “Oh that sounds interesting. Let’s get on a call or let’s

have lunch sometime.” I certainly did not have time to meet 75

people for lunch to tell them about my idea. The way that the

introduction was made was if you want to learn more then sign up

for one of these webinars and that’s how you can learn more

about it.

Trent: Do you remember what the wording of the email template was that

you gave to these people.

Derek: I have it somewhere. I can probably share it with you if you

want to include it.

Trent: Yeah, send a copy to me and I will include it in the shows.

Derek: I will give you another example if you think it will be


Trent: Sure. Please, go ahead.

Derek: When we started expanding Cadre and we went from 70 to 100 we

had been asking our members were loving it, what we had put in

place. They were getting a tremendous amount of value. They

wanted to help. They wanted to make some introductions. We were

asking people they were saying they wanted to do it for a lot of

the reasons I just described. We were getting some but not a


In August 2011 or 2012, it was in August is all I know because I

documented this. We created an email for them to share to invite

prospective members to learn more about Cadre by coming to one

of our events and learning more there and the results was we

ended up having 60 interested individuals, 60 referrals that

came to learn more about Cadre. About half of them ended up

joining. What I always like to say is that all of my members

they didn’t like me more in August than they liked me in June or

July. I just made it incredibly easy for them to help me in

doing something that they were willing to do.

Trent: Absolutely. If I remember correctly, months ago when you and I

talked about this, you had mentioned to me back then some type

of incentive for the early adopters to become a paying member of

Cadre. You have gone through your two months. You are saying to

your members this needs to be commercially viable in order for

it to keep going, therefore there is going to be this cost. If

you get on board now, it’s this. If you get on board later, it’s

this. Am I remembering this correctly and if so can you explain

what the inside looked like?

Derek: Absolutely, so everyone at the end of that two month period,

everyone that had participated, the offer that we gave them was

to be what we called a charter member. Charter members were

going to pay $249 a month and then as soon as this two week

period was over on accepting Charter members, and any new

members after that would be paying double that $499 a month.

It’s something that we’ve never changed.

Once again, it worked for two months, but let’s create some incentive

for these individuals that started with us from the beginning.

And it also created some sort of incentive for them to go off

and say hey I’ve been coming to this for two months now and it’s

great and you should think about joining also. So, they were

able to bring some other individuals to the table at that lower

price point, if you will. Now in fact we’ve evolved where we

were just $500 a month, then we were $1000 up front and $500 a

month, now we’re $3,000 up front and $500 a month, month to


Trent: Wow. We are going to get to that in a minute. I want to make

sure I understand the charter business part of it. So, after the

two months how many people were going to lunches? You could

chose, you could go to how many lunches per month could you go

to during this free period?

Derek: One.

Trent: How many lunches were happening per month? The lunches were

only 8 to 10 people each right?

Derek: Yep. Including those first two months going through the end of

the first year, we hosted 79 lunches. There were anywhere from 7

to 11 lunches per month that we were scheduling and we were

giving all of our members the opportunity to say these five

would work for me and then we would try to slot them to a lunch

where they could meet people and try to keep the repeats at a


Trent: You had a lot of logistical legwork to make sure you had the

right people at the lunches, seated at the right tables. Did you

guys actually show up to the lunches or did you just have the

people say hey I need to be at the whatever restaurant at

whatever date at whatever time and 10 of them would show up and

just chat at each other.

Derek: We were at every single one.

Trent: Yeah, because you need structure.

Derek: Sure.

Trent: Okay. At that point in time 79 lunches in the first two months.

Derek: No, no, no. Not in the first two months. That was for the first


Trent: Okay.

Derek: That was for the first nine months. Let’s call it six lunches a

month for those first two months.

Trent: Okay, so six lunches per month. Where I’m trying to go with

this is how many people converted from free to pay. I think you

said about 80 percent, right?

Derek: It was about 80 percent.

Trent: So, then you got some cash flow on which to now continue to

grow this business. Over time you have ratcheted up the price

for new people. The guy or gal that’s joining today, they are

going to fork out three grand up front which is not a small

amount of money and then $500 a month. What are they getting for


Derek: The model has changed significantly since we started off. Our

intention was never to have larger events at all. We are now

doing larger events. We built out a pretty robust private member

only community online. It’s not another Facebook. It’s not

another LinkedIn. There’s a lot of other stuff that’s in play

right now, than when we first initially set it up. Quite simply,

$3,000 is a lot of money to some people and it’s just the right

amount for others.

Trent: Yep.

Derek: Before we got up to $3,000 we very strategically were charging

$499 a month without a long term contract. Part of what we were

selling was engagement and fit. We wanted to make sure that

everyone that was participating, what I was selling to everyone

else was you are going to meet other people like you that are

going to be engaged, that are going to be interested to help you

and to provide value for you. And if they are not or they don’t

feel like it’s a good fit for them or a good use of their time,

we want them to be able to leave and we wanted the ability to be

able to ask them to leave if they weren’t. So, there are other

organizations that charge an annual fee upfront. It may be 6

grand or 10 grand or 20 grand and I think what happens a lot of

times if it’s not a good fit or their not the right type of

member well you have to let them play out their contract.

Trent: Yeah.

Derek: We wanted people to just drop out if they didn’t think it was a

great fit. In 2012, I started conversations with 25 people,

proactive conversations, ranging from you’re no longer a member

to hey what’s going on. If you are not able to start attending

or getting back in touch with people no harm no foul but it’s

not going to be a great fit. 25 people and the majority of them

were at the $499 rate. We basically said goodbye to $150,000 of

annual revenue for the sake of maintaining culture and making

sure that what we were selling was actually true.

Trent: Absolutely.

Derek: Along those lines I think pretty consistently the goal is that

for anybody that looks at $500 a month and says okay this is

something I can do, I think the main thing we are selling at

this point is access to a phenomenal network of experts of

individuals. Some of them have been on your show before. Our

roster from top to bottom is phenomenal. I think there are a lot

of successful entrepreneurs and successful business owners that

would pay $500 just to be in a room without all of the rift

raft. Just to know they’re not spending their time going places

where they are not being pitched, they’re not being sold, or

their not meeting anyone that’s not relevant to their business

or their clients.

Trent: I couldn’t agree more. I’ll make this comment for the folks

that haven’t attended a lot of these networking events. Back

when I started my company I attended a ton of the banker board

of trade events. There are no CEOs going. It’s all the business

development guys and gals who are looking for new clients. If

you are a CEO and you are looking for other CEOs where you can

have CEO level conversations about business challenges, going to

the local board of trade isn’t the place to be.

Derek: I would also say to if you are a business development person or

you are in sales the CEOs in the companies you are selling to

probably aren’t the decision makers and probably not the ones

you are wanting to meet either. The quality of any networking

activity I think is it’s all based on are you surrounding

yourself with people that are in a similar situation to you in

terms of the market they serve and do they take the same

approach that you take when it comes to developing relationships

and strategically working together with other professionals.

Trent: I want to skip back a minute. I realized there was a question

that I skipped past without asking.

Derek: Sure.

Trent: When you were doing these lunches and it’s back in the first

two months when it was free you said you attended all of them

Obviously you’ve got to make the right, there’s a message you

needed to communicate. How did you do that? What did you say at

these lunches so that the people realized hey this is something

I want to be a part of?

Derek: I think that the main thing we were guarded against at that

time was that we wanted to make sure that we had the right

people and I would say that I mentioned 80 percent earlier in

terms of what we converted. Ten of the remaining 20 percent or

50 percent of the remaining 20 percent we didn’t even extend the

invitation to. Because they were either following up with

everybody in a salesy way or they weren’t showing up to the


It was really about quality and really about hey I have this other

business that I’m running and I’m not talking about I’ve never

positioned myself as a financial advisor inside of Cadre because

I never wanted anyone to think that my reasons were for doing it

were a back door way to get additional clients to that business.

In fact, there are other financial advisors in Cadre that are my

“competitor” in my other world.

I wanted to be very clear that I was doing this because I was

passionate and I enjoyed helping people and I felt something

like this was missing in the marketplace. One of the basic

things I communicated was we want to encourage and we want to

embrace the idea of our members hiring each other and working

together, but we also don’t want it to be a pitch fest and we

are not going to be a leads exchange group.

So, what does that mean? That means anyone that you meet at any of

our functions you cannot follow up with them and say great

meeting you at the lunch. Can we meet again next week so I can

tell you more about how awesome I am? It has to be, I was really

intrigued by your story and think you are somebody that I can

help or that I can see us collaborating on some different things

together so let’s see if we can jump on the phone and come up

with a way to expand on that relationship.

Clearly, if somebody did not have a good story or they weren’t

connected or it was never going to work for them that’s where

that whole they could drop out whenever they want thing comes

into play. If somebody just says I’m a CPA and if you know

anybody that needs a CPA, they would be a great client for me

and you can refer them to me and that would be great. Well,

that’s different than the CPA that says I like to work with

business owners that have revenues between $500,000 and $5

million that are going through X, Y, and Z and they are painting

that picture and they are describing in more detail what an

ideal opportunity looks like. They are going to get a lot more

mileage than one that doesn’t do that.

Trent: Yeah, that’s true. That’s really being clear who your customer

is and that’s something that everybody should be doing because

that makes it easier to get customers because when you find them

they are going to get so much more out of what you are saying.

Derek: The message then and the message today is that we are one of

the only professional organizations that I know of that is

vetting for intention and quality in addition to some of the

more tangible metrics. There are a lot of organizations out

there that are similar to ours, not really a competitor but they

are similar and it’s hey do you make X amount of money per year?

Do you have a certain role? Do you have a certain number of


I think that our price point automatically gets us to the right

people because clearly if somebody has a business where they are

making a certain amount of money that $500 would be 10 or 20

percent of their revenues they are not going to do it. We don’t

have to say you have to be doing this or you have to be doing

that. But, we are the only ones that aggressively vetting for do

you believe in word of mouth marketing? Are you in a position

where you can add value for other people because you are

informational with your clients and within your network? Are you

somebody that’s willing to do that knowing that you are going to

be around others that are going to be doing that for you?

Trent: Feverishly writing notes again. Wish I could write faster. Let

me keep the questions rolling. So Cadre started off from what I

understand as a very localized business because you needed to be

able to come and attend these lunches. You live in DC so I’m

guessing in the beginning it was only in DC?

Derek: Still is.

Trent: Still is?

Derek: Yep.

Trent: Do you have growth plans or do you plan to scale it nationally?

Where are you going from here?

Derek: I think we’re finally to the point now that we are feeling like

we are going to be able to do that and that’s the next move.

We’ve decided a while ago, if we wanted to loosen up on our

ideals or our culture of who we are looking for we could have

150 to 250 members at this point. Mark [has shared] and you’ve

had on this show before as a member of Cadre. He talks about

assignment selling a lot, which is this idea of you want to

really aggressively tell people that are not a good fit for your

business or for in my case for Cadre you want to let them know

on a website you want to let them figure that out.

Between the website and a phone call with me I’d say 70 percent of

the people, I’m making that up, but I bet 3 out of every 4

people that are interested in learning more either go to the

website or have a conversation with me end up not being a good

fit. So, getting DC to like 200 members was never a big goal but

what we’ve been doing with DC is we’ve been through heavily

surveying our members and having conversations with our members.

We actually closed off entry for any new members for a period of

about six months and we just reopened that about a month ago

because we were so focused on evolving our model and sort of

taking that next step. You can almost look like what we’re doing

in DC right now that’s how we’re establishing our product and

really honing on who is our ideal member? Who is going to really

benefit the most from this and how do we communicate with them?

How do we find the message that we want to deliver them? We are

basically using DC and continuing to evolve DC to help us get it

exactly right for when we want to take it to other markets

across the country.

Trent: You are writing a book. Does the book also play a role in that

or what’s the purpose behind the book and please do name the

book for us?

Derek: The book “Networking is Not Working,” where I’m stressing the

not part. It’s everything that happened. A lot of what I shared

earlier, what took place in my wealth management business. It

will mention Cadre very briefly just to establish some

additional credibility. Okay, if you are growing your business

and you are attending networking events, there’s probably a more

efficient way to do that. Here’s what I did in my wealth

management practice where I freed up the time. Because you had

asked this earlier too, a big part of the way I freed up my time

to do this is I stopped attending networking events two times a


Trent: Yeah.

Derek: I stopped playing golf one or two times a week which was 5 or 6

hours of time each time I did that. That’s really where I was

focused and wanted to share in the book or the process I used to

build out this 25 person group that I had and the ways that I

was integrating the value that I was delivering to my clients

with my networking efforts to meet more of the right types of

individuals for my practice.

Trent: So, let’s use me as a guinea pig for an example. I’m going to

get super selfish here. Tomorrow my wife and I pack up the

moving truck and we move from San Diego to Boise, Idaho. I

basically know nobody in town. What should I do? I really would

love to build good, deep, meaningful relationships in the

business community. Many of whom will never buy anything from

me, but that’s just fine because I want I want to have those

relationships anyway.

Derek: Good for you.

Trent: I love the idea of having a Cadre of my own, but let me not

taint your answer. What should I do my first 30 days in town?

Derek: Well, I still feel like that spending time online is a great

way. I don’t have to convince you or your audience this is a

great way to meet people. I think Twitter is the greatest, large

networking event that anyone can participate in or “attend”

because you get to see who’s on there, what they’re talking

about. You’re not interrupting conversations that are not

relevant to you. You can see who shares your interests, who

shares your passions, and use that as a way to meet them. You

already know that so I won’t spend a lot of time saying okay go

to Twitter and meet people that way.

The larger networking events, honestly I mean I’m not going to tell

you to go to a Chamber of Commerce event, not that there’s

anything wrong with them. There will be other people there that

would be good for you to meet, but there’s probably going to be

a lot of people there that are going to waste your time and are

not going to be a good way for you to spend a couple of hours

talking to them or a variety of them, if you will.

I think it’s something that you have to have a long term approach to

this but anytime you can go to a larger event where’s there’s

something else there, there’s additional ways to “win” if you

will, that’s what I’ve always looked for. It’s not like I don’t

go to larger networking events anymore, but if I do go I am

going to attend the ones who have speakers, who have material

that I am interested in learning more about. That way if I don’t

meet anybody, if I don’t get any quality connections out of

that, out of attending it, then hopefully I learned something.

Then I can say it was a good use of my time because I got some

great ideas. Do you have any clients there now?

Trent: No.

Derek: If you do get some clients, if you do get some individuals that

might be prospective clients or just good people to talk to,

start asking them which events are you going to or I found this

event. Then they can bring somebody else along, or you can bring

somebody else along and it’s a way for you to expand your

network where even if this event ends up being a total stinker,

then you are spending additional time with somebody that you

already had a relationship with and you are able to get to know

the person that they brought along and they are able to get to

know the person that you brought along.

Trent: So, let me tell you what I was thinking as far as a plan and

you can tell me what you think.

Derek: Let’s do it.

Trent: They have a vibrant technology sector in Boise, much to my

pleasant surprise. I was planning on finding who the CEOs are of

the fastest growing companies reaching out to them all asking

them to be on my show. Of course, then having lunch with them

and then having a conversation of who else in town I should

meet. What events should I go to? What groups should I

participate in and just letting the garden grow from there.

Derek: Clearly, I wasn’t sure if, because you are in a very unique

spot, so you have this great podcast and it’s a great way for

you to add value so you absolutely should take that approach. I

think if I were you I would say look, I’m new to town and I have

this podcast. You want to have a conversation with them first

and you have some pretty aside from me you have some pretty

amazing guests on your show on a regular basis, so you want to

be somewhat selective on who you have on and who you are having

these conversations with, but the types of people you want to

meet it’s going to peak their interest and make them want to

learn more about you and give you the opportunity to learn more

about them.

Trent: You are right. It’s true. Having a podcast makes an unknown

door very easy and it’s one of the reasons why I encourage my

listeners to start a podcast because it is the most powerful

networking tool I have ever discovered. You can literally tweet

people in 140 characters or less and they’ll come on your show.

I’ve done that over and over again. You say I have all these

fabulous past guests. That’s how I got a lot of them. I just

sent them a tweet. Either they are doing it for selfish reasons

because they want to get exposure, which is fine. If they have

value to add, I don’t mind giving them the exposure.

But, there’s also a lot of them out there that simply just much like

yourself have a good message and want to share it if for no

other reason other than to help other entrepreneurs succeed. I

think that’s a common trait among successful entrepreneurs. They

really want to give back. They know when they were young and

getting started other people played a huge role in helping them

become successful. So it becomes a huge part of the DNA.

So, if you are not yet doing a podcast out their audience I really

encourage you. It’s not a hard thing to do at all. The equipment

costs, you can do it for under $100. It doesn’t sound quite as

good as this but you can spend under $100 to get a really nice


Derek: Okay, something I’m thinking about man I feel like you are

talking to me as well.

Trent: You should be, Derek. You certainly have the voice for it. It’s

not that hard. It’s like anything. It’s uncomfortable the first

time that you try it and then you get better. Then you get an

email like I got the other day. I got to tell this. Some guy

wrote me and he told me I’m so incredibly boring that he wants

to chew his arm off when he listens to me drone on. I hope that

he is listening to this. The only reason he listens to my show

is because I have such incredibly interesting guests.

Derek: That’s awesome.

Trent: Normally I get emails that are the opposite of that they have

a lot of really nice things to say about the show, but that one

was the first.

Derek: I completely disagree. I like your personality and I like the

show a lot. I’m trying to think where I heard this. Maybe it was

a podcast with Seth Godin a couple of weeks ago. He said anybody

that gives you one star on Amazon or one star on iTunes they are

never going to buy your products or be a customer of yours or do

anything with you. He’s actually gotten to the point where he

doesn’t even read them anymore because it’s so


It’s great that you are laughing about it. I’m sure that it’s a lot

easier to laugh at something like that when you are getting as

many great notes and all the great feedback that you are getting

from everyone else it complete dwarfs that number.

Trent: That is the truth and also when you decide to become a blogger

and a podcaster you in essence become something of a public

figure in your own little world. There’s always going to be

people out there that don’t like your stuff and some will have a

mission to tell you that they don’t like your stuff. It hurt in

the beginning. You don’t like hearing that. You get to the point

where you look at it, I actually called my wife, I was laughing

so hard, and I said you’ve got to come read this. This is

probably the best one ever.

Now, in his defense I don’t think he’s a bad guy. He’s probably

listening to this, so I don’t want him to think I’m hating on

him or anything because he actually, the next episode he

suggested that I stand up. So the next episode I stood up to see

if I could make my voice any more exciting. When I introduced

this show I made sure I put more inflection into my voice than I

normally did. I turned down the bass a little bit on my mixing

board, because I thought maybe I was making my voice sound a

little too much like that. So, I kind of messed around with

things a bit. It’s not like I didn’t pay attention to what he

said and he didn’t write it in a malicious way. I wasn’t

insulted. It was taken as constructive feedback but at the same

time it was pretty damn funny.

Derek: It was nice that you took his advice you were able to do that.

I am often told that my super hero trait is that I’m the guy who

will tell you that your baby is ugly. I don’t think I would tell

anybody that their baby is ugly but people come to me

specifically to shoot down an idea or strategy or something that

they are doing. When your feedback is positive and its good

those people tend to like the fact that you are doing it. It’s

like when Simon Cowell on American Idol tells you that you are

really good, it carries so much more weight than when Paula

Abdul tells you that you’re good.

But then the problem is that when you start telling people what they

don’t want to hear, then they don’t like it as much. I am trying

to get better at massaging how I am providing feedback or

criticism to those individuals without taking away from the

charm of being the guy that will tell you that I think what you

have stinks.

Trent: Absolutely. Let’s wrap this up. There’s going to be a link in

this show. Derek it might be helpful for you as well. I’ve

written how I’ve podcast in the past. My guide to podcasting,

but a past podcast guest of mine by the name of Dan Norris, this

guy is a content creation machine. I’m going to put a link to

his guide to podcasting because it’s better than mine. It goes

into so much more detail than I did. I would encourage anyone

who is listening to this that wants to have a podcast to go and

check that out.

Also, in the show notes that invitation from you Derek, so please do

make a note to send us that. The email template on how you got

the people to come to the webinar to get your Cadre off the

ground, so to speak. Before we wrap up I’d like to ask you two

more questions. One is, are there any other podcasts that you’ve

listened to and would recommend?

Derek: I assume you want me to answer that one first.

Trent: Yeah, go ahead.

Derek: Without being completely obvious let me think here. I listen to

several but I am trying to think of who I can recommend that

might not, I think Amy Porterfield has a new podcast that is

really good, that I get a lot out of. I would also say Rich

Brooks has started one recently on marketing agents. Do you know


Trent: No, I don’t. If you would like to make an introduction that

would be wonderful.

Derek: Sure thing. I have a lot in my rotation. Entrepreneur on Fire,

I love Smart Passive Income, I love. The Human Business Way

from Chris Brogan. All of them are great. There are about 15 or

so I can keep going if you want but those are a few for you.

Trent: Okay. I’ll include links to all of those. So, sorry the Human

Business Way?

Derek: The Human Business Way is a podcast that Chris Brogan does.

Trent: Okay, all right I’ll link to all of those.

Derek: I like Lewis Howes a lot, School of Greatness.

Trent: Okay. I’ll put that one down, School of Greatness. Then let’s

finish up with one book recommendation.

Derek: One book recommendation. I got to tell you it’s fairly new and

so it’s unlikely anyone has recommended it yet but Jay Baer new

book “Youtility”. Have you read it?

Trent: I have not.

Derek: Have you heard of it?

Trent: I have.

Derek: Youtility spelled Y-O-Utility. The basic premise is that so

many of us in business spend so much of our time trying to be

mind blowingly awesome. Over the top special. What Jay suggests

which I completely agree with is that we could probably get a

lot more mileage on focusing on how we can just be more useful.

I gave an example of that I think with the ultimate tie breaker where

I could have stayed awake for an extra two or three hours a

night and focused all my time, energy, and effort on how to

create a financial plan that was .001 percent better than it

already was or I could spend that time learning my clients

businesses and figuring out ways I can add value for them above

and beyond what I do.

So, the premise in the book is a lot of great suggestions for whether

it be apps. Whether it be events. It just a lot of great ideas

for ways that you can be useful and add value for your clients

and prospective clients.

The other sort of angle is that you Youtility is about creating

marketing that people want and there’s this huge competition and

you’re competing against friends and parents and spouses and

everyone else. Your email, Facebook and all those people are

already interesting to your ideal target audience. If your

emails or your newsfeed updates are going to remain relevant or

get opened by your community, then what you are sharing has to

be as relevant as what they are sharing.

I think obviously with the changes recently made by Gmail and

Facebook we already all know that they are not showing your

updates to 85 percent of your fans anyways. Just really figuring

out how can I remain relevant and useful and really help the

people that I want to reach so when I do have something I want

to sell they are much more likely to open it and be interested

in it.

Trent: Very good advice. And, finally if people would like to learn

more about Cadre what is your link to that?

Derek: Cadre is C-A-D-R-E-D-C.COM. CadreDC is also my Twitter handle.

I am going to be shifting especially as we look to expanding and

grow Cadre. I am going to be shifting my platform over to my

name dotcom, That should be up in about a

month. I am going to start blogging. For people that go there

and give me their email address. It may come eventually, Trent,

after listening to all the benefits of your show. I don’t have

Infusionsoft set up right now. I am not going to be sending out

any sort of immediate emails. It’s just give me your email

address and I’ll let you know when the book is coming out

because I am going to have it available for free for 48 hours on


Trent: Cool. All right I want to thank you very much, Derek, for

coming on my show. Hopefully no one had to chew their arm off

because I was too boring.

Derek: Or because I was too boring either.

Trent: I’ve done over 100 of these things. I think we did a good job.

I don’t think we have to lose any sleep that anybody is going to

lose any arms today. Let’s wrap it up. Thank you so much for

being on the show and I want to keep in touch with you.

Derek: Great, man. Same here. Thanks’ for the opportunity, Trent.

Trent: Take care. To get to the show notes for this episode all you

need to do is go to If you really enjoyed

this episode I would love it if you would head over to where you will find a pre-populated tweet

and also you will find a link to the iTunes store. That’s

probably even more important than the Tweet. If you would take a

moment to go and leave a five star rating in the iTunes store I

cannot tell you how much I would appreciate your taking a moment

to do that. It helps the show get more exposure.

That’s it for this episode. I am your host Trent Dyrsmid. Thank you

very much for being a listener. If you have not yet visited my

blog you can get to it at I look forward to

seeing you there. Make sure you become a subscriber so you never

miss another episode. I look forward to seeing you in another

episode soon. Take care.

About Derek Coburn

DerekCDerek is the Co-founder and CEO of cadre, an un-networking community for successful professionals in Washington, DC, a partner with Washington Financial Group (a wealth management firm) and author of the soon-to-be-released book, Networking Is NOT Working.

Derek is married to Melanie (the other co-founder of cadre) and has two boys and a pitbull mix.

You can reach out to Derek via Twitter ( or visit his website at