Quitting your job and starting your own business is never easy. It’s a huge risk — but Justin Kelsey defied the odds and worked smart to do it successfully.
Justin Kelsey quit his job in finance to enter the creative field. He successfully made a name for himself with his venture, VAXA Digital Agency. Completely bootstrapped, he built the digital agency from the ground up and developed his own methods and strategies to manage his business. These methods have proven effective in creating a sustainable business.
In this episode, Kelsey shares how he decided to take the risk, switching careers to turn his side hustle into a full-time one. He explains how he hired people to do his work by creating a system to streamline their workflow. His expertise and thoughts may inspire startup founders to come up with their own bright ideas.
Tune in to this episode to learn more about maximizing your opportunities and organically growing your customer base with Justin Kelsey.
Click here to read transcript
[03:09] Trent: So we are going to talk about some really cool stuff today. But before we get into the really cool stuff, let’s talk a little bit about you, who you are and what you do.
- Justin: Of course well I’ve got an interesting background probably unlike most people in my space now so currently running a creative agency, specifically for eCommerce companies. We produce what we call scroll stuff and creative for any direct-to-consumer, Amazon, etc., econ brand. But funny enough, I did not grow up in the “creative space,” my background was in finance, worked at Amazon. Before that, I was doing venture capital with Bank of America. Launched our accelerator program, had an internship doing operational finance with Amazon before that went to UF, did my undergrad and finance there.
I took this, this total 180 from very left brain analytical to very right brained creative midway through my career. I’m 28 now, so just recently made the jump to this agency about a year and a half ago and we’ve been growing ever since but it was fun. I think playing in this space now, it’s helped me a lot actually having that background. Getting here growing the business being able to run financials, run the forecast, look at it like a business we were going to acquire or invest in as a VC. So that’s pretty much where we are today. It’s been quite a ride. It’s got its ups and downs for sure. But yeah, I love every minute of it.
[04:36] Trent: When did you launch your agency?
- Justin: So we officially launched as a side hustle, actually, so I was working at the bank. I launched this really as an experiment in January 2020, had no idea that COVID was about two months away. I couldn’t have prepared for that in any way. But I knew I had a passion for video. I’ve been making videos my whole life for fun, and I really realize there’s a huge opportunity in the eCom space right around that time, you know, there was a lot of paid social agencies out there. Now funny enough, we work with a lot of those. But, you know, we noticed that there’s a huge gap in getting good creatives. So this was January 2020, right before eCommerce that even blown up because of COVID.
Fast forward two months, obviously, there was a little lull, you know, March 2020, April when COVID hit, but after that, it just exploded. I mean, we had so much demand from agencies, from brands themselves to get creative made. I finally went full time into the business as of March 2021. So not even about four months ago, you know, hired our first couple employees, project managers, creatives, etc. It’s been now growing ever since, but yeah, just started as a side hustle, something I love doing. I’ve actually had quite a few side hustles. I think this is my seventh “side hustle.” But this is the one that’s finally popped that I you know, can justify going full time with it. So it’s been a, it’s been really fun, really rewarding, really stressful. But at the end of the day, I would still have quit my job back in February to do this. I’ve learned a lot, but it’s been fun.
[06:12] Trent: So I want to go down one quick rabbit hole for a minute, because I know that there’s a good chunk of my audience who is still employed, working for somebody else, and they’d rather not be employed working for somebody else. So there’s one or two things that you said. “This isn’t my first side hustle.” So you had like six or seven others that never became full time. So the lesson there that I’m hoping some people are listening to is, you don’t always hit it on the first attempt. You don’t always hit the ball on your first swing.
Second thing is you started it as a side hustle. At what point did you in terms of revenue or money that you were able to take out for yourself, because a lot of people, they’re burdened by mortgages and payments, and car payments, and all this other stuff. So they have like a certain level of expenses, they just have to be able to hit, and they oftentimes don’t have a lot of savings. So it’s a huge challenge.
Just talk briefly about when you knew when and how you knew it was the right time to go from a part time side hustle, because when you do part time work, you can only ever get part time results. There’s this huge “go up the hockey stick” when you go full time and so many people, you know, they need to make that transition, but fear prevents them from doing it. So just talk to us a little bit about that.
- Justin: Yeah, no, I mean, that’s, I see it so many times from my friends, for people who reach out to me. To answer your first question, there’s gonna be a lot of failure with a side hustle with any full time company, which is why I think it’s worth treating them as an experiment. When you first get started. I always framed things as an experiment. Hey, I’m starting this new experiment. I’m gonna try to start an eCommerce store as an experiment. I’m gonna try to start this freelance thing as an experiment.
To your point, yes, I probably had six or seven side hustles before this that never popped, you know, I, you know, went straight into the workforce after college at 21. But, you know, from that point forward, I’d been launching various companies, online courses, a drone media company that we heavily grew on Instagram, and they were great. We learned a lot from those, but they never made that much money. It was never to the point where I was like, “Hey, I’m gonna quit my full time job,” although that was like the goal the entire time, I was like, “Yeah, these things are gonna hit.”
Now every time I started the next side hustle, I was like, “This one’s going to be the one, it’s gonna make me six figures a year, I can quit my full time salary, this is it.” You learn pretty quick, that’s not the case. So then you have to learn when it’s time to cut your losses, you know, a lot of people get so into the sunk cost basis where they think, “I’ve already put so much money so much time into this, I have to see it all the way through.” When in reality, like, the best thing you can do is shut these things down.
A lot of times, especially when it’s a side hustle, again, you have that full time income to back up on and for me, if that’s where it’s when I started VAXA Digital, we started to see some early traction again, before COVID. It started to gain, it started to gain, it started to grow every single month, I was seeing probably a 25 to 40% increase in revenue from the month prior. So it was slowly kind of climbing this upward slope to the point where as a side hustle, it was doing six figures alongside my salary at the bank, which was more than that. We were seeing this traction, and finally knew back of my mind, “Okay, I am making enough money where, yes, I can replace my salary. That’s not what I’m going to do. Because if I go full time with this office, I’m gonna hire employees, and there’s a cost associated with it.” But at least in the back of my mind, I was like, worst case scenario. I could fire everybody and execute this work myself and still have an income coming in.
So that was kind of the turning point for me. Once we had our first probably 10-15k a month. I knew that okay, we’ve got something here. We’re getting customers. We’re keeping our customers. Let’s just do this like it again, it’s so hard to know that exact point to jump off, and it’s terrifying. And I ran through all my mentors and friends. And there was really no perfect time to do it. But like you said, you’re like half in when you’re still doing it as a side hustle. I knew if I really wanted to get this to, you know, 40-50k a month, where we’re teetering at now, the only way to do that was gonna be to go full time with it.
Sure enough, literally, the week after I quit my job at the bank, turned in my notice, went full time with this, you know, we got one of our biggest clients yet. Obviously we worked really hard to retain them. That’s when I then hired a project manager, that’s when we started to grow our creative team, we got a studio space 3,000 square feet, where we can just produce these ads all day long for eCommerce brands. Again, I couldn’t have done that couldn’t have executed that and managed that, while also still working at the bank.
I kind of just, well screw it, if I’m going all in, I’m going all in. We’re getting a studio, we’re hiring, we’re doing all this stuff. It was a big bet, and still was terrifying, still is terrifying to think about, but it definitely worked out. It was just the time to do it. Everyone told me, my colleagues even were like, “Okay, finally, you’re gonna jump and go full time with this.” My colleagues at the bank, my boss was like, “Okay, yeah, I totally understand, your stuff’s taking off now, go do this. If you ever want your job back, come, come talk to us.”
But at the end of the day, like everyone was supporting me, and I think that meant a lot. There wasn’t a single person in my network, who was like, “This is stupid, stay in banking,” everyone kind of just knowing my personality. I’ve always started little things here and there, it was destined to happen. But I think, again, I would never advise if somebody just jumps in without having some proven traction behind it. Because I think that’s super important. And I’m sure you know, you had a point in your career where, you know, knew it was time to just like, go all in on something for a little while. Even if it was not forever. I don’t know, which would you say you relate to that in a way? Like, what was your first side hustle turned full time hustle, I guess.
[12:08] Trent: Yeah. So for me, I never really did the side hustle thing, because I’ve always had a lot of recreational sport, hobby-type things. I like to work hard and play hard. So I chose a path that paid me very, very well, that allowed me in the career to amass some capital early in my life. One day, I just decided, that’s it. I was in my 20s, making 200 grand a year, which, my 20s is a while ago now. So, you know, apply inflation to that. It’s a lot more than 200 grand now. I wasn’t married. I did have a mortgage. But I just said, “No, I’m going to be, now’s my time that I was 31.” Hang on, was I 31? 30 or 31. I decided to take the plunge.
I hadn’t done any market testing, I just, I had this idea. I was pretty confident it was going to work. Because I knew someone who was working for a bigger company doing this thing. And, and I said to him, “Look, why don’t you just leave the bigger company. And we’ll go do that same thing for those same customers. Instead of it being under the big company name, it’ll be under our little company name.”
In hindsight, it was really foolish. Because while ultimately, yes, it worked out, I’m not advising people to do what I did. Because I said to this guy, “Look, do you think we can break even in 90 days?” And he’s like, “Oh, yeah, no problem.” It took us like four and a half years to break even. And he had no money. So we were burning, all my savings was gone after a period of time. Eventually, I got to the point where I was like, $400,000 in debt. And yes, ultimately, yes, I did sell the company for a million bucks after eight years.
But that’s not the that’s not necessarily the road that I would advise people go down, because it was awfully stressful at certain times, taking on more and more debt, and even being able to get the debt. In my case. My career was in finance, like yours beforehand. I manage people, wealthy people’s portfolios. So I knew so much people, I mean, one guy in particular, and he was kind of like, I still, to this day, I call him my Rich Dad, and he saved my ass. If he wasn’t there, I probably would have went broke on my adventure before I got the exit, because the type of company that I was building, there was just, there was a certain amount of infrastructure that had to be in place. It was a managed IT service provider, and we just had to have a certain number of servers and a certain number of this and a certain number that now cost money and cost of goods for acquisition was super high. So yes, it worked out. But I think your approach is the smarter one. So for the folks listening don’t do what Trent did. Because—
- Justin: I think there’s a time and a place. So like, I wonder every day, could we have grown faster? If we invested more capital from the start? I don’t know, I still to this day, it literally is something I think about every single morning is like, do I want to go raise some money? Do I want to take on debt financing? Do I want to go open another credit card and use that to pay salaries through some third-party platform temporarily so I can hire more people? So I don’t know. I don’t think you did it the wrong way. Obviously, you learned a lot from that experience.
But, you know, on the other hand of that equation flipside, we’ve been 100% bootstrapped, I know, I took two grand of my money plus some cameras, I already had, you know, just from having video as a hobby, and that was what we started VAXA with. We took one credit card line out a business credit card that we used to buy some early equipment, but everything else was pretty much positive cash flow, we charge customers upfront for the videos we’re gonna shoot, and that was what paid my contractors eventually. Now that’s what pays our salaries. But I don’t know. It’s super stressful being bootstrapped, so I think, obviously, there’s pros and cons to each like, I’m sure, yes, it was stressful being in debt also. But, I wonder every day, is it worth taking out a loan to finance the business and just inject more capital and go hire more people? I don’t know. It’s tough. I don’t think there’s a right or wrong answer.
[16:37] Trent: Well, so the thing that I’ll talk about briefly around debt, is that there was a period of time, where I think that I would have given up. If I could have given up and I could have walked away without being too terribly financially scaped, I think I probably would have, as I remember. I remember having a breakfast with my investor, with my Rich Dad guy. I didn’t have any money for payroll, this was like Saturday, and payroll is due on Monday. I remember him looking at me, and going, “I don’t know dude. Isn’t it time to just shut it down?” Because we were maybe two and a half years, something like that, at that point in time. I didn’t have a lot of money back then. But I had a hundred grand, I think when I started it, because I’d sold my house, I had some equity in the house.
I’m like, “No, no, no, no.” And the reason I kept saying no, was because of the amount of debt that I the amount of money that I’d already spent, the debt that I already maxed out my personal line of credit, I already borrowed 50 grand from him at that point in time. So I mean, spent my 100, borrowed 50, from my bank and borrowed 50 from him. So I’m already 200 deep and a hundred of it was actual debt. I’m on the hook for this money. If it wasn’t for my being full time, and it wasn’t for that debt, I probably would have give up. That changed my life, the company. I mean, obviously, you know, when I was in my late 30s, I sold it for over a million bucks. And, and that allowed me to go do all sorts of different things.
As much as I joke about saying, hey, it wasn’t necessarily, I don’t think, I still don’t think it was the smartest way to start. There is something to be said for, I said this many times over the years: embrace economic pressure. That’s just a fancy way of saying, have debt to make sure that you are totally committed to what you’re doing, and the full time thing as well. I think there’s a lot of people out there maybe who can do the side hustle thing. I know, there’s a lot of people who can, but I was not one of them. When I would come home from eight or nine hours of work, last thing I wanted to do is work again. I need my rest. I wanted to ride my dirt bike, I want to hang out with my friends. I wanted to ride my mountain bike or you know, do whatever.
So, even to this day, if I had to try and do the side hustle, I think it’d be even harder now. Because now I’ve got a parent, I’ve got a wife, but you know, it would be really, really difficult. So mad respect to anybody who’s in that position, who wants it so bad, they’re putting in the extra hours. Because let’s face it, man, this thing of being an entrepreneur, it comes with sacrifices, big ones, especially in the beginning. I think that that’s the biggest reason that most people have such a hard time making the transition from signing the back of a cheque to signing the front of a check. Have you heard that before?
- Justin: I like it.
Trent: Yeah, there’s two types of people in the world. Those who sign the back and those that sign the front. Most of the world signs the back. For the people who don’t use like paper checks anymore, that joke might have gone completely over their head, but back in the old days, you know, when you’d cash your check, you’d flip it over and you’d endorse the back of it, you give it to the bank teller, and then they’d put it in your account. So you’ve probably never done that.
- Justin: I didn’t, I was a teller in college, I had to pay my way through college, and the bank telling was the way to do it.
[20:17] Trent: So yeah, so you’ve seen it. Alright, so, let’s, where, how many customers did you have? Where are you at now, roughly?
- Justin: So now, you know, our business is interesting, we get, we kind of have a split. So I’d say 50%, probably 75% of our business is retainer based. So right now on retainer, we have five to eight flagship clients every month. So we’re creating, every single month, anywhere from three to eight video concepts for them for a flat rate. Every single month, those assets are getting renewed, fueling their campaigns, etc. On average, five to eight, constant kind of recurring retainer based customers, big ones. We’re talking 100 to $200 million brands.
Then we get a lot of one time projects in the door, you know, everyone from, you know, Hey, I just started my first Shopify site, and I need three or four pieces of creative to get our ad campaigns and some, you know, product pages off the ground, in terms of those types of customers that are coming just for a single package with us, three or six or eight video assets. We probably have about five to six of those a month as well, they come through, just totally varies.
The nature of the creative business is it’s always up and down. Anyone in the agency world, as you know, I’m sure, when you’re running your Amazon business, it’s very much up and down. We could think we’re absolutely crushing it one month, and then something happens, customer says, “Hey, we got enough creative, we’re gonna pause for a month, and we’re stopping our revenue for a month.” So it’s up and down for sure.
We’ve seen steady growth, but we’re always looking about getting to the next level. Right now, especially, we have a perfect flow for that five to eight customer range, you know, I know exactly that. My couple creatives and a project manager can serve eight customers perfectly, deliver a wonderful experience. Now that we’re starting to get to that, you know, 8 to 10 to 12 customer range, I need to go hire more creatives, I need to go hire a second project manager. So that’s when I think we’re gonna start to see our next level of growing pains.
But luckily, I know, this is something we talked about previously, systems maybe, we we’ve built a lot of systems where, thankfully, if all goes according to plan, we should be able to plug directly into creatives and a project manager, and they will, will take over exactly what this previous team is doing for our first eight clients and kind of apply that to the next day clients. Theoretically, the sky’s the limit, we could scale to 80 clients and replicate our teams, have them follow these systems. Theoretically, I think, you know, we should be able to scale, deliver on time, deliver as quick as we are with the first clients and not lose any quality along the way. So only time will tell I guess.
[23:07] Trent: So that is a fantastic segue to the next thing I want to talk to you about is systems. Everybody who’s been listening to my show for a while or knows anything about me knows that I love me a good system. Because in my businesses, having systems to set me free, having systems has enabled me to accomplish a whole bunch of things that I would not been able been able to do, because I wouldn’t have been able to put the people in place, a lot of virtual assistants as well as employees. But it’s so much more difficult to get results from your human capital unless you give them processes.
To give you an example of this early in my career with that first business that we talked about earlier. So I knew how to sell it. I knew how to get clients. But I never really documented, I didn’t have a sales process. I didn’t document my sales process. I simply used just raw talent from years of experience to say what needed to be said at the right time and do the right thing. And even then, I probably only get like one in 20 proposals, because we had something that was really hard to sell. Lesson number 12: Don’t do businesses where the thing’s really hard to sell.
But anyway, so whenever I tried to hire salespeople, I was a horrible failure because I didn’t have great processes for them to follow. So talk to me a little bit about, because I think that a lot of especially smaller agency founders, they are the geniuses that start the thing. But then they also become the person that limits the thing, because they become their own bottleneck, because they believe rightly, in some cases that nobody’s as good as them. Maybe what they fail to see is that yeah, well okay, so you can go do the work better than everybody but you can only produce so much on your own, until you’re just like tapped out of time and like there’s nothing more to do.
I did a call with a woman by the name of Jeanette. Two weeks ago, she starts the call, she had just signed up for our Flowster software. She runs an agency, she got to six clients, I think, and you know, full as full time. First words out of her mouth on this on the onboarding call for Flowstr. She says, “Oh, my God, thank you, you saved my life.” I was like, “What?” She proceeded to explain, “Hey, I’m really great at marketing. But I don’t know so much about growing a business.” So, Justin, tell me more about what that was like for you and some of the realizations you made? And then some of the tactical things that you did in terms of like, how did you know what to systematize first, etc.
- Justin: Totally. You described kind of where I’m at perfectly right now, or where I was at a few months ago, in terms of doing founder-led sales, which I still do, I’m still our number one salesperson. So that wasn’t the part that I started with, actually. So as you know, when you first start out, you’re wearing every hat. I actually enjoy selling, I obviously enjoy videos and editing stuff, too. But I really enjoy selling, so I knew that I could keep that up, at least for the foreseeable future. What I didn’t have the time to do was sit there and create videos for our clients and edit videos, especially, you know, one single video takes anywhere from six to eight hours to edit, maybe a little less, maybe a little more.
So I would spend an entire day editing a single video and I knew that was not going to be sustainable if I wanted to scale the business. So the first thing I started to outsource and systematize and processes and write an SOP around was editing specifically. Broke it down to the standard fonts that you will use in a Facebook ad video for eCommerce, the colors that you know, pop the most with this, the way you should put your graphics at the end. I started to build out, really these, editing frameworks. They’ve now since devolved many, many times. And those are really now the cornerstone of our business is our, our 10 scroll stuffing frameworks, you know, with multiple variations of each, but we have, you know, 10 different video types that we know, can sell a customer, if you’re an eCommerce business running an ad, then you run one of these 10 video types that multiple places throughout your funnel, we know that those are going to convert a customer.
So what I did was kind of reverse engineer those and say, Okay, well, how do we edit these specifically? We broke it down. Okay, well, we start with a hook, then we describe the problems, the benefits, the solution, some social proof, some sort of call to action. And I started to write out these frameworks, literally build flowcharts to visualize them, these frameworks. And that’s what we started to pass off then to the editor. So as we wrote our storyboards, as I wrote our storyboards in the early days, I would write out the copy, describe the shot, and then I would say, literally, hey, this is a hook, this is a problem, this is a benefit, this is a solution, so that when the editors got that they knew exactly where to take that footage, the shot number, the copy was already written for them.
Now we use a copywriter, or my creative team writes a lot of copy as well, and that was all passed off to the editors with a specific process for how they should then edit that video. Obviously, you can’t systematize creative editing itself, like the actual act of editing can only be standardized so much, but everything leading up to that and the general flow of how it is edited, and then the exporting process, even like, hey, if it’s this kind of video for Facebook, then needs to be exported in 1350×1080, etc.
Editing was where I started, then we build systems out for day of production. We started to figure out, okay, what happens on a typical production day? Well, we have talent coming in, we need to confirm talent, we need to book Airbnbs, we need to send out a text to everyone beforehand with the schedule. So we processized that. Now that I have a project manager, which is freaking awesome. Liz, shout out for everything you do for us. She’s now following and building our SRP is around project management, like, hey, as we onboard clients, here’s the forms they need to get, here’s where we set up their Slack, their Drive their Vimeo review tools. Afterwards we send them forms now for like, feedback to get, you know, hey, how is your cycle? How’s your creative performing for you, like, hey, fill in this data to tell us how this performed. So now she’s managing that.
Again, we’ve built a system around that entire client experience which reduces churn rate, which kind of standardizes the experience if Trent, you recommend us to one of your buddies who has an eCommerce company and you liked our experience, that enables us to give your friend the exact same experience that you got based on those systems that we’ve built. So now we manage everything and click up but there’s so many tools, obviously Flowster’s a killer one if trying to look at Process Management, but we’ve found our groove and it doesn’t really matter what you use.
There’s so many awesome tools out there, as long as you’re using something to kind of track, manage, and keep those SOPs in one place that has that flow to it. I mean, I know you, you could probably geek out all day on your flows. Just around this podcast, you showed me a glimpse of all the crazy process and steps that you’ve built for this podcast, but I’m sure that makes your life personally 10,000 times easier, because you just get on, you record, you have some fun, we have some conversation, and then your team obviously handles the rest from that point forward.
[30:30] Trent: Yeah, actually, when I started the podcast 10 years ago, I had no processes. I had none of that. I just would find someone that I wanted to interview, I would interview them, I’d edit it, I’d make the post in WordPress, I’d share it on social. I did absolutely everything. These days, as you pointed out, I think our podcast’s SOP and Flowster is 130-ish steps long. Way longer than any human could ever remember, and the workload for me only has gotten lighter and lighter and lighter and lighter. Because now all I have to do is say, “Hey, Carla,” my assistant, I think either “Go find me some interesting guests,” or “Hey, there’s this person that I found, go contact them, line it up, put them in the scheduling calendar,” and we’ve got a bunch of software and apps and stuff that do all sorts of cool stuff on the back to save us clicks.
But I talk on the mic, and then I’m done. And then it goes to the editor and they edit the video. Somebody makes the press the post in WordPress and somebody else shares it on social on my social media manager will clip this up into a bunch of pieces and will repurpose this raw recording that you and I are doing into 50 or 60 or 70 little social media clips. If I had to do all of that would literally be like a full time job. I wouldn’t be able to do all the other things that I get to do and need to do, to be honest with you, to grow my businesses and generate more profits.
I think that concept is, either it doesn’t occur to a lot of founders because they’re first-time founders, or they’re small, or what have you. Or when it does occur to them, or they hear about it somewhere. Maybe they’re listening to a podcast, two guys talking about systems, they get stuck, they aren’t sure where to start. You made a good point, you said, “I’m going to start out on the editing piece.” I think that was an excellent decision because I look at activities as revenue generating and expense incurring.
Editing is not revenue generating. You already generated the revenue when they said yes, I will do the contract with you the revenue then was booked, contract signed, send me the money. But the work still had to be done. You, smartly, thought, “Well, I’m going to make sure that I still have time to go get more companies to say yes, generate more revenue, and then I’m gonna have my team do the fulfillment.” When I started my Amazon business, I did exactly the same thing. I knew that my job, my highest and best use of my time, was to interview brands on Zoom just like this, and figure out, whatever I needed to uncover, do, say, whatever, so that they would say, “Yes, we will authorize you as one of our sellers,” because that was revenue for us.
I didn’t do POs, I didn’t fill out account applications. I didn’t do any of the other stuff that happened after they said yes. So for the folks listening, hopefully, there’s the biggest lesson there is: make sure that you are focused on the revenue generating stuff, and that you’re starting to build out the fulfillment, whatever that might look like, in your organization. Let’s go back to this fear that I see founders or people have. Well, I’m the best editor in the world, nobody can edit it as good as me. I can’t possibly give it to an editor because they just won’t do as good of a job as I can do because I’m the very best. They may be right or maybe they just have a big ego. But Justin, what would you say to those people who are letting that “I must have control, I must have perfection,” that limiter get in the way of their delegating the work?
- Justin: Yeah, so to be honest, Trent, that was me. I was delivering the work, I was editing the work. I was like, “Man, this stuff is good. There’s no way that I can hire an editor that’s going to be able to take this over and put out the same quality as I was doing.” Then I realized, there’s a lot of really damn good editors in the world that are, especially overseas even, in areas where there’s a lot of opportunity. Here, there’s not as much opportunity overseas, for example, editing, VAs, those types of fields. I actually started using offshore editors to take over my work. Very low cost for me. So if it didn’t work out, I wasn’t out to hire an employee.
But they were super talented, and I looked at their reels. I was like, wow, like, these guys are definitely better than I am, they know After Effects, they know Premiere, they know all these things twice as well as I do, let’s just try this. And I’ve realized that yes, there probably was going to be an initial drop in quality. That’s just naturally going to happen as they catch up to speed. Yes, you can have a bunch of SOPs and systems and hey, use this font and do this and do that. But again, creative especially, there’s going to be a slight learning curve for everything.
I noticed that maybe at first and even, you know, now when hiring my full-time editors, we had an initial learning curve, but there was probably a 30-day gap where they caught up to me, and then for the next indefinite future, they’re better than me now. So it’s like, okay, yes, it’s gonna be an initial drop in quality, but now they’re doing things a lot better than I’m doing. Again, I now sit back, and I’m like, the smiling face that gets on sales calls, and my team completely executes all of the work. I provide the final sign off to make sure it looks good before it gets to the client, but I’m not touching pre-production, I’m not touching production. I’m not touching, editing, unless I want to do. Yes, a lot of times I get involved, because it’s fun. But I don’t have to. My team now can fully execute without me.
I think that honestly, the biggest learning from this whole experience has been the value of opportunity cost and every single hour of your day. Time is that one finite resource, we cannot get back. It sounds cliche, but it’s true. We have maybe 10 working hours in a day, maybe 12, maybe 14, depending on what your mentality is like on that. But at the end of the day, every single hour, back to your point of like, is it generating revenue? Or is it incurring a cost? I’d much rather be generating revenue during those hours than incurring cost. I’m editing, I’m incurring a cost, if I’m doing project management, I’m incurring a cost. If I’m, you know, sitting on Instagram for an hour, I’m incurring a cost.
There’s a lot of, I look at every single hour of the day now as “How much is this costing me?” I know how much I can generate in an hour of doing sales calls and cold emails. How much is that costing me now versus what I’m spending here doing? Probably not generating any revenue, sure, I’m like maybe discovering something new, maybe watching a YouTube video all about learning. But at the end of the day, like, Okay, I need to be cognizant of that hour of sitting on YouTube to learn a new skill just cost me $200 in naturally generated revenue, if not more. Maybe $300, $400, $500, depending how you value your time, but learning the concept of opportunity cost.
Same thing, I just had this conversation with my girlfriend the other day, funny enough, is cooking. Yes, you can save money by cooking at home. I like to cook, but I don’t love to cook. So it’s like, okay, sure, I could spend an hour a day cooking, and save the money of not eating out. Sure there’s a cost of food involved. But that hour of cooking just cost me potentially $250, $300 in revenue generated, if I had been sitting on a sales call, versus yes, I’m gonna spend maybe 40 bucks a day eating out if I were to eat out instead. But theoretically, I just got that hour of time back where I can now be working, generating more revenue if I wanted to.
Obviously, it’s not always like that. But just looking at it that way. Same thing with lawn care, things like that. I could pay someone 50 bucks to cut my grass, or I can spend four hours doing it, that’s gonna cost me theoretically $1,000 based on how I value my time. So, I don’t know, thinking about opportunity costs for anyone out there, figure out what you value your time as and start to think about every single hour of your day, every single thing you commit to everything you say yes to, is going to cost you money to some degree, whether that’s 50 bucks or $1,000. Everything has a cost associated with it if you’re not generating revenue.
[38:51] Trent: That’s some very sage advice. I get to talk in my role to a lot of startup entrepreneurs, they’re in my Facebook groups, Mastermind groups, whatever. They don’t think like that. They want to, “I don’t have any money. So I have to do everything myself.” I say, I challenge them. I say, “Well, hold on a minute. How much does the VA cost?” Three bucks an hour. “So you’re telling me that every time that you’re doing work that a VA can do, you’re basically working for three bucks an hour? Is that a good decision for you?” It’s not until you slap them in the face with a question like that, do they go, they get the “Aha!” They go, “Oh, no, actually, that’s not a very good use of my time.” I know, exactly.
Look at all your $10-$15 an hour labor jobs, and ask yourself why am I doing this? Why am I doing this now? Again, I get it. They were like well, I don’t have any money. Well, first off, starting a business is going to take some money. So if you’re going to try and start a business with absolutely no money at all, that might not be the right approach. But more importantly—
- Justin: Unless you’ve got a Rich Dad.
[40:09] Trent: Yeah. But more importantly, it’s a mindset. You have to really and truly be ruthless, with your time. In the beginning, the only thing that matters is getting clients and generating revenue. If you’re a service-based business, if your product business, then it’s selling products and generating revenue. Point is, generating revenue is the only thing that matters. So unless whatever you’re doing, is directly involved in the process of generating revenue, you probably shouldn’t be doing it.
- Justin: I was just gonna say too, there’s ways to, where you can get a little more creative with it too. Like we’ve, for example, just started working with a cold email lead gen agency, and they’re 100% normally, yes, that would cost me 2,000 bucks a month, 3,000, 4,000 on retainer, whatever. They agreed to work 100% based on commission, so now it’s saving me my lead gen time, and it’s costing me nothing until we actually generate those leads. Not every single bit of outsourcing actually costs you that money upfront. There’s ways to outsource and pay for it after they’ve gotten the results. So just something for anyone considering outsourcing, keep in mind that there are people out there willing to work on purely commission. So it saves you that time of scraping data off LinkedIn and super fun stuff.
[41:31] Trent: So another really perfect segue, because earlier in our conversation, you mentioned that some of the brands you worked with were $100 million brands, and your company has been around for about an hour and a half now. You haven’t been doing this for years. So it begs the question, and I knew I wanted to come back to this. I’m glad that you set me up with such a beautiful segue. No, we didn’t rehearse that. How did you get those customers? How do you get your customers? Because in the beginning, maybe your uncle or there’s somebody who knows you somewhere, but eventually that list runs out, and you’ve got to go out into the real world of strangers, and ask them for money. So walk us through a little bit, just enough of what that looks like for you.
- Justin: Yeah, most people don’t believe me when I say this. But I mean, we built the business with zero outbound strategy. So no paid ads, no cold emailing, initially. No sales calls, any of that. So I initially had built the business, purely off referrals, and just organically getting my name out there and getting inbound. And to elaborate a little further on that—
[42:44] Trent: Yeah. How specifically, did you get your name out there organically? That’s what people want to know.
- Justin: Exactly. I have been a part of a couple of Facebook groups. One of the biggest ones that I love, and you know, it’ll be in the LinkedIn after this episode, if you check out my bio. It’s called Trends by the Hustle. So Trends has been an absolute game changer, just for our business, getting to know people. But I am in there adding value anytime somebody asks about systems, anytime somebody asks about personal finance, anytime someone asks about video for eCommerce companies specifically. That third one is kind of the dinger when it comes to getting leads.
I’ve, from that group alone, roughly built half of my business off of organic referrals that started with somebody from Trends, and then turned into another introduction that turned into another introduction. Now, my CRM is almost exclusively full of inbound leads. So being active in a group like Trends, being active on Reddit, to being active on Twitter, even. Specifically finding these big eCommerce companies targeting the places that their CMOs might hang out that their CEOs would hang out.
So Trends or other Facebook groups have a lot of big decision makers and those it’s these paid communities, these paid masterminds, joining those, spending $4-5,000 to go to a conference where you’re in the same room as CEOs and CMOs of these very large brands and just putting your name out there. “Hey, I’m Justin Kelsey with VAXA Digital, we make scroll-stopping videos for eCommerce brands.” That alone has has been the biggest driver of our business and through those organic kind of relationships, and relationships, I know it sounds cliche, are really the key to building a business.
It’s how many people do you know and more importantly, what is the quality of those relationships that you have. But once people started to know me as “Hey, this is the guy that makes really good eCommerce ad videos.” It became pretty, pretty easy for these referrals to start spreading. Now, specifically, we have an affiliate program built out as well, so we pay out 10% of anyone who sends business our ways. I think that’s huge for anyone in the agency world out there. Anyone running a service business, having an affiliate strict affiliate structure built out, that can literally change your business, you know, that alone, we probably get half or half our leads now.
[45:11] Trent: So let me interrupt you with some questions, because I’m in the same trends group as you are. I know that I’m not leveraging it really at all, to be honest with you. So for the folks who aren’t familiar with, there’s a company called The Hustle. They’ve got this Facebook group. I don’t remember what we paid, a couple 100 bucks a year to be in this thing. It’s not super expensive.
- Justin: 400 bucks a year, maybe? lt’s a secondary benefits of the actual website and case studies itself. So it’s a lot of value.
[45:40] Trent: So when you first joined the Facebook group, did you— I want to know how much time and how you allocated that time? Did you just sit there and look for every single post that you could write intelligent answers to? Did you turn on notifications for every new post, so you were seeing like, every time a new post? Because it can be really, really time consuming? That’s why I don’t do it. I feel like, oh, man, forever. I’m forever reading and writing and reading and writing, and is anything going to come with this? Whereas I could, I could do other things that I know I’m going to get a result from. So I don’t spend the time that I probably should, in the Trends Facebook group. So give us more meat on that bone.
- Justin: Yeah, so I joined Trends, December 2018. I was one of the first 50 people in Trends, did it as a beta test, got in early access, which was awesome. I’ve known Sam for four or five years now and went to the very first Hustle Con. So he was like, “Yeah, you gotta come try this new Trends thing.” For a while, I was just kind of a watcher. I sat in the Trends group, there has to be some good engagement, but there was only like 100, 200 members, and then it really slowly started to creep up. There’s some good conversations around starting businesses, but nothing quite applicable to me. Again, this is before I’d even launched VAXA.
So come January 2020, believe it or not, I actually launched VAXA through Trends, like Trends was the thing that that launched VAXA. I made a single post and trends and I was like, “Hey, guys, my name is Justin, I’m really wanting to get into creating eCommerce video ads for eCommerce brands. I would love if there are 10 brands in this group that would come trial our services. I’ll give you 90% off our normal rates if you come, you know, tell us if our systems work.” There was a way to test my systems again. So basically, I did 10 super cheap, I think we charged like $200 a video, which is about a 10th of the rate on average and charge now per video. I got 40 leads off of that single post alone. So that obviously became our first initial client base, a lot of those we resold on to our retainer clients. But—
[47:50] Trent: Sorry to interrupt you. When you’d made that post, did you, had you already answered questions on a lot of other people’s posts, and did that post not get flagged? Because you and Sam, you kind of knew Sam and he was gonna let that one fly. Because it’s kind of like a pitch, which is a little bit in violation of the TLS of the group.
- Justin: It was, but this was the days before things were regulated as much as well. So believe me, I did run it by Sam previously. So I was like, “Hey, Sam, I’m curious, could I post this in the group?” Initially, actually, my goal is to do it for free. I was like, “Hey, I’m gonna make 10 free videos for Trends members as a way of giving back.” He was like, “You got to charge for this. You’re giving them value, charge something, 200 bucks.” I was like, “Alright, sure, I’ll try.”
So we got some initial, we produced those videos at a loss still. But now it’s a little bit different. There’s so many people in Trends. I mean, there’s like 7,000 or 8,000 members now, where if you posted something like that, now it’s a little more spammy. Back then like it was pretty tight knit, I’d engage with a lot of people. My name had popped up, so didn’t come across as quite as spammy. From that point forward, I really made it a habit to be a part of Trends. And to be honest, as the only reason I logged on to Facebook was to be a part of that group and engage in that conversation.
Some of my best, you know, business mentors and colleagues now have come as a result of trends. But I literally would block off 15 to 20 minutes a day on my Google Calendar, that was just go engage on trends. I would go and read the top posts from that day, I would do a couple searches for specific queries that I was looking for. Again, I wanted to look for things related to eCommerce, eCommerce related questions I could add value to, I did searches around video. Anytime anyone had a question around video, video advertising, video marketing, video editing, etc.; was right there, front and center, adding values to kind of the question they were asking. So I never pitched anybody. I was never like, hey, come talk to us. We make videos. It was purely just like, “Hey, here’s the answer to exactly what you’re asking.” They would look at my profile, they’d send me a message that asked more about what I did. That was how we really generated a lot of our initial traction.
[49:54] Trent: Are you still, now earlier in our conversation, you talked about this new agency that does outbound for you on a commission basis that you’re using. So are you no longer as focused on Trends simply because the group size is so big, it’s not really as intimate. You can’t really make posts like that anymore? Are you still getting business from Trends? Or are you now more focused on the fact that you have to go out, now that you’ve got some client wins and some case studies and so forth, are you more focused on outbound?
- Justin: Let’s say it’s still a healthy mix of both. So I’ve still found that the leads that come from Trends are usually much higher quality, because again, I’ve been around the group for a while I’ve been answering questions in there for a while. I just was featured on, I’ve been featured I think three times now on Trends articles or emails now. So people kind of know my name in the group a little bit. So usually, when I have a conversation with somebody who’s a Trends member, it’s not just like a cold email or cold pitch in their DMS, or like my agency’s kind of doing for me.
They already know that I have, that I know what I’m doing. So when I do finally go in for the kill, and I pitch them, and I’m like, “Hey, here’s our cost, it’s going to be expensive, but it’s going to have this, you know, 20x ROI associated with it,” they believe that I’m not BS-ing them, versus, you know, some random company overseas that maybe we’ve never worked with, it didn’t know my name, we can tell them, “Hey, we’re gonna make you a 20x return minimum on a video we make for you guys,” but they’re gonna be like, “Okay, well, how do we know you’re not making that up?” Versus a lot of Trends members and people in my inner circle, they can see the case studies, they’ve seen me talk about it.
So it tends to be still higher quality. But that being said, Facebook groups in general, such as Trends, they are getting more saturated. There are people in there, you know, pitching themselves 5, 10 times a day. There’s tons of other creative agencies and trends alone kind of doing the same thing we’re doing. I think that the only reason we’re still getting value out of that is because, again, I’ve kind of built that rapport within the group, and a couple other groups and group texts and masterminds that I’m a part of, as well.
But Trends is just an example of one of those but I think there’s still a lot of value there. Yes, cold email is great, and you know, we still have closed a good bit of business from that, but it’s definitely not the same as kind of going through a group of people that already know your name.
[52:14] Are you doing much in terms of ads or content marketing?
- Justin: Zero, to be honest, it’s definitely something I’ve had in the backlog. I’ve you know, posted a couple blog posts on our website, I’ve still write a lot on Medium personally, like I love to write so I’ll do a lot of just like thought leadership type articles, if you want to consider that content marketing, but no ad spend to this day, like we haven’t spent a single dollar on paid search, display, paid social.
Definitely something I’ve thought about but again, we haven’t really needed to to hit our goals. So probably going to when we try to get to the next level. Obviously, I know a lot of awesome paid social agencies now, just given that we work with somebody that has partners. But it’s definitely a big lever. I just haven’t had the time to sit down and again, build a system around it to make sure we’re getting the most value out of it.
[53:05] Trent: Yep. All right, Justin. Well, it’s, we’ve been just shy of an hour so we’re going to wrap it up here. It’s been a pleasure to have you on. For people who might like to get some scroll-stopping video for eCommerce, what’s the website URL they need to go to?
- Justin: Yes, so our main site is the VAXA Digital, vaxadigital.com. But if you want to check out my links, I have it in there as well. It’s just vaxa.digital/justin. You can get my agency, my Medium, my Instagram. Anyone has questions about anything, side hustles, leaving their corporate job, whatever, shoot me an email, a DM on Instagram. I’ll get back to you with an answer that same day.
[53:49] Trent: All right, wonderful. Well, it’s been a pleasure to have you here. Justin, thank you so much for being a guest on the Bright Ideas podcast.
- Justin: Thank you Trent. I appreciate it, really.
Trent:Thanks so much for listening. To get to the show notes and links for today’s episode, go to brightideas.co/371. And if you enjoyed this episode, I would love it if you would subscribe, rate and review the episode on your favorite podcast listening app. Thanks so much for tuning in. We’ll see you in the next one soon. Take care. Bye Bye.
Justin Kelsey’s Bright Ideas
- Finding The Right Time
- Knowing Your Capacity
- Creating Efficient Systems
- Valuing Time
- Obtaining Customers By Building Relationships
Finding The Right Time
In this episode, Kelsey shares how he organically built his digital agency. It started as a side hustle before he decided to take the leap: he left his job in finance to join the creative industry.
Kelsey always frames side hustles as experiments; he had around six or seven side hustles that never really took off. But what pushed him to make the switch was when he started earning six figures from this side hustle — more than his full-time salary!
“But I think, again, I would never advise if somebody just jumps in without having some proven traction behind it,” Kelsey says. He also mentions that there really is no perfect time to make that jump, and it’s always terrifying.
Before quitting his full-time job, Kelsey ran the idea of starting a digital agency past his colleagues and mentors, and he received a lot of encouragement.
Knowing Your Capacity
Kelsey and his team have five to eight flagship clients for whom they churn out three to eight video concepts a month for a flat rate. They also receive multiple one-time projects, such as people with new Shopify sites or getting someone’s product page off the ground.
On the consistency of customers, Kelsey comments:
“The nature of the creative business is it’s always up and down.”
Sometimes in a month, they receive many customers, but occasionally they experience a drought. Still, they see steady growth.
Right now, he understands how much work his team can do while maintaining quality and meeting deadlines. However, as their customer base grows, they will need to expand their staff to match that demand.
If they were to scale their business, Kelsey would replicate their teams and build a system they can apply to future clients. A system helps ensure they don’t sacrifice quality and efficiency.
Creating Efficient Systems
Given the time-consuming nature of video editing, Kelsey decided to outsource and systematize this first. He knew it would be unsustainable for his digital agency if he were to edit for several hours in a single day.
In systematizing the process for frameworks, Kelsey shares his method:
- Figure out the hook.
- Discuss the problems and benefits.
- Gather social proof.
- Create a call to action.
- Build flowcharts to visualize the framework.
They use this method in creating storyboards. Of course, only so much can be systematized in the creative industry — they can’t do that for the actual editing process. But the general flow of the editing process still has a system.
From there, Kelsey would go on to build systems for other areas of the digital agency, such as the flow for production day and client experience.
Kelsey has found their groove in tracking their process. On managing your process, Kelsey advises:
“There’s so many awesome tools out there. As long as you’re using something to kind of track, manage, and keep those SOPs in one place that has that flow to it.”
Kelsey used to hesitate at the idea of letting other people edit — he worried they might not be up to the task. But after taking offshore editors, he found that they were very talented.
He acknowledges that there would be an initial drop in quality as the new hires went through a learning curve and noticed a 30-day gap before they could catch up to him. However, it gave him a valuable lesson on opportunity cost.
By hiring other people, he could spend his time doing other things that could generate revenue rather than incur costs.
On the importance of knowing how you value your time, Kelsey shares:
“Everything has a cost associated with it if you’re not generating revenue.”
Kelsey didn’t and still has not spent money on advertising or marketing his business. He grew his client list purely through referrals and organically getting his name out there.
Being active on social media sites such as Twitter, Reddit, and Facebook helps. He emphasized how relationships are the keys to building a business. The most significant contributor was joining a Facebook group and actively participating in it by answering questions and adding value to the conversation. In fact, he launched his business by making a post in that group, which earned him 40 leads in one go.
However, the post isn’t what got him the leads: it took a long time of building social proof and awareness of what he could do. Without that social proof, his post wouldn’t work.
Currently, Kelsey uses a healthy mix of inbounds and outbounds to get customers for his digital agency. Although the Facebook group has grown, Kelsey still finds value in it and says:
“So I think that the only reason we’re still getting value out of that is because, again, I’ve kind of built that rapport within the group…”
What Did We Learn from This Episode?
- We learned how Kelsey decided to turn his side hustle into a full-time job
- Systemize and processize your workflow so that others can do what you do for you — maybe even better than you can.
- Determine what kind of work is worth your time.
- Don’t incur costs: spend your time generating revenue.
- Join a community, interact with others, and build relationships.
- Invest in the future by building demand today.
[3:19] — Kelsey introduces VAXA Digital Agency and explains his background
- Kelsey worked in finance before switching to the creative industry because of his passion for video editing.
- He started VAXA as a side hustle in January 2020 and turned it into a full-time business in March 2021.
- Business slowed down when the pandemic first hit, but it has since started to gain momentum and boomed.
[7:33] — How Kelsey decided to quit his job
- Kelsey dabbled in a few side hustles before finally hitting the nail with his digital agency VAXA.
- It’s important to know when to cut your losses, even when you’ve invested money and effort into something. Sometimes, the best thing to do is to shut it down.
- Even when VAXA made Kelsey six figures, he didn’t jump to make it his main job just yet.
- However, Kelsey knew that if he wanted VAXA to earn $40-50k a month, he’d have to go full-time with it. He never knew the exact time to jump off — he just did.
- It helped that Kelsey got support from his colleagues and peers.
[15:11] — Bootstrapping vs. debt financing
- There are pros and cons to each method of starting a business.
- Kelsey wonders if they could have doubled their growth rate had he invested more capital or acquired debt financing.
- Aside from using one credit card to buy their initial equipment, Kelsey shares that everything was positive cash flow.
- They charged clients upfront, which they use to pay contractors and salaries.
[20:28] — VAXA’s current customer capacity
- Kelsey is confident that they have the capacity to deliver outputs for eight retainer-based customers a month.
- He is considering expanding the team if they hit 10-12 customers a month.
- On the possibility of scaling to 80 clients, he shares that he would replicate their teams and have them follow the systems that they built.
[25:53] — Kelsey shares how he creates systems
- The first thing that Kelsey systematized was editing, including the standard fonts they would use, the colors that pop out, and how to insert graphics.
- Kelsey reverse-engineered his output when creating a framework, dissecting it by figuring out the hook, benefits, problems, social proofs, and call to action. He then built flowcharts for employees to follow.
- They also built systems for production day (such as hiring talent, booking Airbnbs, sending out the schedule) and client experience (onboarding, forums, sources for materials, feedback forms).
- There are many tools you can use to track and manage your processes.
[34:25] — Kelsey explains the importance of opportunity cost
- Hiring people and expanding his team have allowed him to focus on other revenue-generating things.
- There will be an initial drop in quality as new hires learn the ropes. But eventually, they catch up and produce good results — sometimes better than what Kelsey can make.
- Understand the value of your time. Don’t incur costs; use your time to generate revenue.
[40:45] — Kelsey on outsourcing
- Not all outsourcing has to cost you money.
- Finding people willing to work on commissions is also hugely beneficial.
[42:21] — How did you get your digital agency’s name out there?
- Kelsey had no outbound strategy for the digital agency.
- Being active on social media, engaging with other people in the same community, and expanding your network all play a significant role in organic growth.
- Consider an affiliate program as that can also generate more customers.
[46:22] — Building his connections
- Kelsey joined as a beta member in the Facebook group “Trends” in December 2018.
- He blocked off 15-20 minutes of his day to engage with the community, establish rapport, and set up a solid client base.
- Kelsey launched VAXA through a post in the group and got 40 leads by offering a 90%-off trial for anyone who needed an e-commerce video ad.
[50:24] — How are you getting business now?
- Kelsey mixes inbounds and outbounds.
- He still finds value in Trends because he has established a connection with the members, and his name is well-known within the group.
- Cold emails are effective, but not the same as going through a community that already knows your name.
- They still do not do paid advertising for the digital agency, but Kelsey would consider it if they were ready to expand their business.
Justin Kelsey founded VAXA Digital after seeing the need for scroll-stopping video ads in the world of e-commerce, producing content for brands such as SuperFat, A Good Company, Fringe Sports, and countless more. Before making the plunge full-time, Justin worked in digital strategy and innovation at Bank of America, digital strategy consulting at Accenture, and operations at Amazon.