Back to the boards: Daniel Wang: Why Affiliates Stay Broke After Their Best Month

Transcript

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1. Test the work before committing to the career

2. 0:00share
   Speaker All right, guys, I've got a very special guest, an old school, an OG affiliate from many years ago who has scaled multiple companies to, I believe, as your last post, I think it was like almost 10 mil a month across all companies, right? We are approaching 15 mil a month. $15 million a month. And you've been in the internet space for how many years? 11 years now. So we started back in 2025. And this is, guys, I forgot to mention, this is Daniel Wang. One of the many companies that he owns is Digital Uprising, who I've been a client of for accounts, agency.account specifically for meta spending but he also does a lot of other things he's uh been in the food space he's been in the exotic car space he even trades pokemon cards and shares his flips his uh his roi on pokemon flips so my man how did you get started doing internet stuff yeah so When I first graduated college, I went into corporate pharmaceuticals for the first two years.
3. 1:09share
   Speaker And then the original plan was to segue into med school. And because I had gone to this program that allowed me to skip basically two years of high school. by the time I went to college, when I started college, I was 18 years old and I was already a junior.So the idea was I was going to grind college really quickly, go straight into med save two years of time off of that so i was trying to finish med school and residency and all of that before i turned 30 right because the idea of turning 30 back then was was still pretty scary and uh still scary now but um but um so yeah so the idea was to kind of speed run everything and In the process of speed running everything, I kind of got burnt out and wanted to step away from studying for a bit just to check out what the industry I was going into would actually look like.

4. Understand the incentives behind the work

5. 2:12share
   Speaker look like from a working person's perspective.And I really did not like that perspective when I stepped into it. It's a very dark place, pharmaceuticals. And so after getting exposed to pharmaceuticals, basically all rules went out the window in terms of what my... what my perception of how things should be, what back then were. And I realized that rules are basically just... set by the people who make them for everybody else not to break right so you get to a certain level you make sure that everybody else plays by your rules and then you get to live above them and profit off of that so uh for example um one of the one of the more disturbing things i saw onwas we were involved in clinical trials and pharmaceutical drug development specifically.
6. 3:10share
   Speaker And so how the pharma pipeline kind of works is that once a lab discovers a compound or a molecule, right, like a new molecule, they have, they file a patent. And once that patent is granted, you have 10 years. So during those 10 years, you have to As the discoverer of the molecule, you have to get investors interested, raise enough money, go through three to four phases of clinical trials, depending on the drug, and then get FDA approval. Then go to market, and whatever time you have left is whatever time you have to brand the drug and sell it exclusively. before anybody else can start making generics, right?So that's actually a pretty short timeframe for you to get all of that done.
7. 3:57share
   Speaker And if you screw up at any step of the way, every single delay is anywhere from six months to two years that your timeline is pushed out. So when you're first gathering that first cohort of investors, these guys are basically... in bed with you for the whole way right and it's like let's say you put like let's say as like an early stage investor you put a million dollars in and then all of a sudden they're like well we ran out of money for phase two and you're like well now i gotta dig deep in my pockets and fund you with more otherwise my initial investment's goneAnd then, you know, and then they hit you with, oh, well, the FDA approval got rejected and we have to reapply for it.
8. 4:37share
   Speaker And this is going to take another six months to a year. And then so that's just assuming that you are completely playing a, I like to use video game terms, but like a PVE game. All you're doing is playing against the environment.that and the rules that are set for you already right now you got to realize that the pharmaceutical space is extremely profitable for the players that are already in there so it's actually a pve space that's uh in reality a pvp space so as you're developing this drug if your drug directly competes with somebody else's drug especially a like a big pharma company's drug that that uh directly what's it called uh addresses the same concern but worse or your drug is better they have every incentive to sabotage your studies to buy you out before you can finish your study
9. 5:30share
   Speaker or there's there's a whole myriad of shenanigans that they can pull to kill your drug before it even makes it to the marketso there's actually a lot of drugs out there a lot of compounds that are very helpful and they have higher efficiency or a higher potential efficiency based on the clinical trials than the existing drugs on the market. But because of these existing players, they've made sure that none of these ever see the light of day. Because let's say you're an investor in this in this drug, right? And you got your stuff delayed to where there's only two years left in your tenure timeline and you're still stuck in clinical trials. You got to squeeze as much as you can.
10. 6:11share
    Speaker Well, nobody's going to put in more money for you to finish the trial because the moment you finish the trial and get approval, let's say you have like you either go past your 10 year time frame or you're right at the cusp of it. You have no time to make your money back. So you're basically funding these drugs for somebody else. to come in and piggyback off of you and just make generics immediately. And nobody wants to do that.So a lot of these drugs that have expired patents could actually be extremely good for whatever um whatever indication that they're treating but they'll just never see the light of day because there's no investor nobody wants to pick up the uh the bag and like fund it for it to for it to for it to eventually make it to market because then everybody can else can just piggyback off of them wow
11. 6:58share
    Speaker So the whole game is rigged against the consumer, the investors, unless you're already a major player and or part of the good old boys network. Yeah, correct.Or you're one of the lucky ones where a big pharma company sees your product and they see a lot of dollar signs and they think, we'll buy you out, we'll continue the study, and then we'll make the rest of the money off of it. Wow. Yeah, so it's a pretty dirty game, and after being in that space for a while, I decided to quit. I was extremely disillusioned with the whole medical industry. Not to say that people being doctors or whatnot are not helpful to society, because they're still extremely needed, right? It's just, I realized that...
12. 7:46share
    Speaker I had personally more of an interest in making money than I had for helping people, which sounds really bad, but, but it's like, it's, it's, you got to weigh which ones you're, you're really in it for. Right. I'm like, am I really that good of a person? Or am I actually just trying to make it here? Well, here's your chance to take care of people, man, with this podcast. It's a blend of it, right? It's a blend of it. And you kind of have to make that decision at the end of the day. And I was, you know, like my whole life, I really thought, you know, I wanted to be a doctor, help people.If this industry looks like this already, the effort that I put in into, one, trying to make myself some money, and two, trying to help people, is kind of lopsided.

13. Find a recurring need inside a one-off job

14. 8:35share
    Speaker So I ended up exiting that industry, and that's when I met two really OGs in this space, Liam Walter and Stan Gershengoran. So they were... super affiliates back from, I believe, 2013, 2014. So this is a while ago when they first got started. I think it might've been 2011 or so. So they started probably three or four years before I did.And while working with them, the first thing they had me do was basically sign up Facebook profiles for them because they were running aggressive, you know, black hat rebuild type trials back then. Neutra stuff. Yeah. Yeah. Neutra, Neutra products. And in the course of. you know, basically working for them, I realized that this need was not just needed by all the guys who had, like, the burn and churn going, but also because...
15. 9:35share
    Speaker of the level of meta support or the lack of meta support for a lot of white hat and clean brands that this was a need that was needed by the rest of the community as well.So we ended up flipping it into a long-term subscription service, which is kind of what exists today, or at least the originator of it. Wow. But then you also start running traffic after that. yeah yeah so they taught me how to media buy they taught me kind of the ins and outs of um it's it's really easy going into relatively easy i would say going into the clean white hat space coming from a space where you're basically playing 4d chess with facebook all the time So it's like, it's like, it's like Goku training with the training weights on, right?
16. 10:20share
    Speaker Like you take them off and all of a sudden everything's like, wow, that's, that's a lot easier. Yeah.So you started making money as you were still working with them or you went on growing as an affiliate? So I worked with them for about a year. And then I, they taught me a lot of the ropes and then, um, and then naturally I kind of branched off and started providing services for other people in the space. Um, you know, the, one of my very first clients was Teddy, uh, Teddy tail. Yeah. And then I would say another very early client was Michael Walker. And so I learned a lot from those two guys and, you know, we traded a lot of information back then.
17. 10:59share
    Speaker And just it wasn't just I would say I value I value them not just because they were my first clients, but because we also were essentially figuring things out together as we both grew. Yeah, you could believe it's Teddy used to be a Nutra affiliate, not a Medicare with a suit on and a clean haircut. everybody has their start you know like everybody has their uh kind of like moment of of magic when they discover what to pivot into what what type of numbers were you putting up as an affiliate this is like 2016 2017 i would say this was 2016 yeah 2015 2016So as an affiliate back then, we were working with more of the Nutra networks, but the general numbers we were putting up were, okay, so this is actually part of why I left being an affiliate, but it was because my experience with being an affiliate was from Nutra, right?

18. A great month is not a repeatable operating model

19. 11:56share
    Speaker So everything was always very up and down and it wasn't necessarily as much.in your control as let's say um you guys who are running like lead gen mass torch that kind of thing where you have a stable client who's paying for leads and you have you're you're running pretty relatively clean so you don't have that much of a risk of losing all the campaigns that you've been setting up over over the course of months right so as a neutral affiliate the draw there is the quick money where almost any campaign especially back then that you launched was nearly instantly profitable but you could you could start running a hundred dollar campaign day one for conversions and you you'd be getting a hundred percent roi uh then you just scale that up and and then as youscale up a bad roi for us back then was like 30 percent If our ROI was 30%, we were like, this sucks.
20. 12:46share
    Speaker Shut it off. This is a waste of time. Dude, I'm crazy. Yeah, yeah, right? It really puts things into perspective. But the difference is that it was kind of unsustainable because you couldn't scale past a single account spending $5,000 to $10,000 a day on average.um and five getting to five to 10k was like a uh almost like a moment of celebration when you hit it on any singular account and then you would just expect it to go down like within the next 72 to hours to a week right there was no such thing as longevity you just have to you you just have to hit as hard as you could whenever you found a winning angle and then and then hope that it stayed up
21. 13:31share
    Speaker so there were months when we were doing in terms of numbers right like there were months when i would this was after my um uh media buyer profit split as well so back then i was being split i i believe 30 or35 percent because i was still media buying with them And even at 30, 35%, I think my best months, I would do somewhere north of like 300 grand in profit just to back to myself. So like about a mil, a mil a month in profit. Yeah. So it'd be like a mil profit worth a month. But the thing is, it wasn't consistent. That was what caused me to pivot into the service space. Because I was trying to, I've always been of this mind of where whenever I find something working, I want to build a system around it, right?
22. 14:15share
    Speaker To maintain that system.going forward and so whenever i hit these big months i was like okay it's time to hire people it's time to replicate this system that's working it's time to you know it's time to uh scale this but the problem with that model is that you can't really scale it because it's you're basically Anywhere from 50 to 100 creatives a day or at different angles, hoping for a jackpot. And with that model, it's hard to retain people, especially if you're telling them, well, I don't know how much you're going to make this month, but.you just have to believe that if you grind with me that eventually you're gonna hit it and the problem with that is that you can go on you can go on dry spells of like three to six months of not hitting anything really right and then you have one month where you make it all back so

23. Keep the next campaign funded

24. 15:07share
    Daniel Wang it's it's uh it was it was a hard decision for me to make at the time but i i decided that look uh either i can keep playing this game of hoping to hit the lottery every single time or every single day that i wake up i don't know if my accounts are down and i don't know how long my winning accounts are going to last and i don't know how much i'm going to make this month I don't know how much I'm going to make next month. When you average it out, I'm still making a decent amount livable.But if you add salaries onto that and fixed costs, you don't have any guarantee that the lights are going to be kept on from month to month, right?
25. 15:42share
    Speaker So I've also seen a lot of operations go down because of this. They add on or they have a few. they have a streak of a few months where they make a lot of money then they add on all of these fixed costs uh in terms of infrastructure in terms of personnel and then they hit a dry spell right uh and then once they hit that dry spell they run out of money and then for especially for nutra and even for legion affiliates your money is it's almost like being a day trader you needBeing in our industry, it's a capital game. It's like if you don't have money to float and you don't have money to spend until your payout and then hopefully your payout is positive relative to your spending, there's no way to continue.

26. Trade some upside for a business you can plan

27. 16:28share
    Speaker So I've seen a lot of these operations fail because of this. So it was a really hard decision, but I decided to completely stop affiliate media buying. And I figured, look, while I was doing this affiliate media buying stuff, I was still renting out assets to other affiliate operations. And the thing is, there was always that little block of, okay, I know you're renting the assets for me to run off of, but I also know you run traffic.So what's stopping you from stealing my ideas and creatives, right? So by removing myself from that scene, it was like an extra layer of unnecessary distrust that we were- were able to remove and what really got the rest of the industry to kind of come on board with getting assets from us.
28. 17:15share
    Speaker Like I said, it was hard because we had to go from potential 300K months to starting back over at, okay, well, I'm going to charge you a thousand dollars this month and I'm going to hope enough people sign up to where we can build up this subscription model.So I would say for the first four years, it was quite a struggle because you're just slowly adding on to that MRR instead of having a quick boost every single time and a quick influx of capital. But instead. you're looking at, okay, this month we are charging $5,000 in MRR. Okay, we can keep the lights on. This month we're charging, we've added on to $8,000 in MRR and just slowly snowball from there.
29. 17:56share
    Speaker Once it hits a critical mass though, that's when you have the stable cashflow that you know you can bring in fixed overhead for. So that was the trade-off that I decided to make all thoseUm, and obviously, you know, survivorship bias, it did pay off for us, but I can see why that would, that's also a, a hard step for a lot of, uh, a lot of other guys to make as well. But you've done other things since as well, man. Yeah. Yeah. So share real quickly, all your other businesses that are related, not completely unrelated. Yeah. So it's really funny because the other businesses all came about because of my trauma from affiliate media buying.

30. A second business still needs someone to operate it

31. 18:38share
    Daniel Wang Because of the unstable nature of Nutra and affiliate media buying back then, even after we started the stable model of the services, my mind was always in the place of, and it still is, it's always in the place of, what if this all goes to crap one day? What if this all goes to zero? I need to diversify as much as I can into other projects that I can minimally manage. But just in case everything fails, we can still fall back on that. Because I almost feel a sense of responsibility for all the people that I've brought on. Some of my VAs have been with me for nine years.10 years now you know so this is like all working with me is all they know you know so and then there's also uh our u.
32. 19:22share
    Speaker s based employees who a lot of them have been with us for five plus years six plus years now and i i feel like this sense of responsibility for them where you know i i have told them i know you can go get a corporate job that's more stable they'll give you a 401k which we did start doing 401ks this year but all right so i'll give you a 401k they'll like they'll give you insurance and all of these things that'll you know give you a uh some peace of mind right and you know that this company will be around for a long time but i just need you to trust me that when you come on board with us i will alwaysfigure out something for you to do.
33. 19:59share
    Speaker So I'm trying to always hold myself to that promise. Um, but that is essentially part of the, those two things are part of the reasons why the main reasons why I started these other businesses. Right. So got into the restaurant space, started investing into restaurants that opened up here in Austin. And there's one in Denver, um, personal recommendation, uh, don't really recommend it. It's very labor intensive. thin margins thin margins uh very seasonal labor intensive and yeah high high waste high operational like capital costs in terms of relative to the return percentage But it's a model that's existed for basically almost since the beginning of time for a reason, right? Because, you know, it works.It's just, there's a lot of BS. And then I also went into creating this exotic car vault, which exists in New Jersey.
34. 20:59share
    Speaker And I was actually pitched this idea.by uh by two friends of mine in new york and the start of this idea came about when at first one of the partners that i now am partnered with for the car vault he's a he's a friend that i uh i met a while ago and he had moved over to ferrari spring valley in new york as their i believe sales director there and he started seeing all these market opportunities in terms of the collectible car space where certain cars he would be able to see the trends before everybody else does and so he could just get me to buy the car from them at whatever acquisition price that they had and then my
35. 21:40share
    Speaker promise to him our unspoken deal is anycar that I buy from him when it appreciates I sell it back to him so that he can sell to somebody else right so those that any car he sells to me he can sell twice so he doesn't mind selling it to me at cost at first right so um It's just another way of kind of rotating your capital. You just treat it like the stock market, right? Except you're kind of going heavy into one particular stock, which is the car. And then as it appreciates, you roll it into the next thing. So after we started doing this together for about a year, him and his cousin had this idea. And they said, well, look.

36. Start with a concrete capacity problem

37. 22:22share
    Speaker we're in new york nobody here has parking space beyond at best one or two cars and there's a lot of money here there's a lot of people who have multiple cars and they want to store it somewhere so they just looked around at the uh at the different areas at the competing car storages and they realized that there's several areas that are basically underserved at the time there were six warehouses around New Jersey and nearly for, for exotic cars specifically, and nearly all of them were at capacity. So we figured, or they figured.that hey look there's definitely a market for this and when they pitched me the idea the first thing that I thought of was how similar this was to our uh our services and how we provide rentals and things like that right it's just all you're doing really is you have a space you have a nice space and you and you rent out parking spots at MRR to people But you also have network and community with this.
38. 23:20share
    Speaker Yes, correct. So that's the added benefit of it too, right?That's the other attraction and the appeal to it is you're putting together a bunch of people with high net worth in one place and they know that everybody else around is... also high net worth and the same as how i said yeah you don't have to go through that bs of when you're at like a uh an ungated social gathering of figuring out who's worth it and we're not worth it to talk to so it's just like it's almost like a safe space where everybody can trust each other That's wild, man. So, like, are you thinking of expanding this? Because, like, I was going to say, I've been in brick and mortar before. I was renting when I had my gym.

39. Separate the core service from the premium space

40. 24:06share
    Speaker I was renting at a retail space lots like per square per square foot and like I know the guys in that in the fitness industry that like generally kill it a majority of them get industrial space so I'm assuming also this is built out in more industrial lots or like different zoning where it's like cheaper per square foot too Yep, correct. And so our next plan of expansion, which we just started moving on that this month, is we're starting a, excuse me, we're starting a what I call it the ugly storage. Right now, we have the membership lounge, which is, it's, I don't know if you've ever seen it, but you've never been there in person, right? Seen pictures, pictures of it.Okay, so you've seen pictures of it.
41. 24:52share
    Speaker It's basically like an elevated second floor lounge with the first floor is just filled with a play floor of all the exotics, right? And then we have a lot of members who want to join, but. They might not have as display worthy vehicles, but they're still like they're still decently nice. It's just it's not something that we would want to put on the display floor in front of the membership.lounge but in order to capture that market we're expanding to a second storage spot which is just purely for storage so you get to have access to that membership lounge and you get a storage spot for your car it's just not in the more premium space of where all the display is that's cool and that also creates like it also creates an opportunity for us to be like hey if you want your car displayed on the display floor you have to pay a little more
42. 25:38share
    Speaker yeah right or nicer one which we got a nice one what exactly you can buy a nicer one from our partner so it's are you thinking about oroboros but but this model like this should be super scalablelow generally low cost build outs no cost maintenance very low or high high network clients And there's not very much in terms of variable costs either. Everything is essentially fixed. I would say 99% of our costs are fixed. Can't imagine. Imagine doing that business. So that's what I love about that business. And it just draws a massive parallel to our own business too. The reason I like running the agency ad account model is because our margins are fixed. So I don't participate in any of your upside, but I also don't participate in any of your downside.
43. 26:28share
    Speaker right so for me it's only a question of how much more volume can we push the more volume that we push the more fixed that we have from that margin and i like that model because i can build a i can build a team around that i know how much to expect as long as we keep pushing more volume centered our fixed subscription models on top of that that are keeping the lights on. I have a predictable number that can come in every single month and I know exactly how much we can spend on our team, on our personnel, on our tools. And it's just a lot more peace of mind, to be honest.I'm going to jump ahead here, man, also to respect your time, because there's some things I really want to touch on this call.

44. Count the attention a small saving consumes

45. 27:16share
    Speaker yeah so before before we started we were talking about the difference between guys that like it's basically get stuck at low volume and spend maybe they make a little bit of money but they can't really scale versus guys that have done 15 million a month whether it's like a subscription model or econ brand or even as affiliates so like what is the difference betweenPeople that you see, clients that you see that get stuck spending a couple hundred bucks a day, a couple thousand a day versus guys like you or clients you work with that have scaled to like hundreds of thousands of dollars in spend per day. Yeah. So I'm going to bring up that anecdote that I brought up earlier, or I wouldn't even call it an anecdote.
46. 27:56share
    Speaker It's more of a case study at this point that I brought up earlier in the call before we started recording. So we worked with this or we work with this econ brand and guy's super young.When he started with us, I believe he was 20 years old and it's only been it's been less than two years and less than two years ago when he first started with us, he was only spending one to two thousand dollars a day on his advertising. And, you know, I didn't really pay him too much mind. You know, I was just trying, obviously we were trying to give him the best support that we could, but all of a sudden it just one day jumped to 10,000, then it was 20,000 a day and then it was 30,000 a day.
47. 28:33share
    Speaker And then before we knew it, you know, like now he's spending three to 300 to 500 K a day on advertising on his brand. and it's insane this guy's 22 years old and then i see you know i see this parallel where we have these clients who have been with us for know, same amount of time, but they're always spinning their wheels. They're stuck in the several hundred dollars a day to several thousand dollars a day spending. And they just can't seem to break out of that ceiling.And when I take these two groups of clients and I kind of look at the behavior of the two, I realized that the side that is more, that has a bigger risk appetite, and I wouldn't even call it risk appetite.
48. 29:14share
    Speaker I would call it. um allowance for expenditure like they it's the guys who really grab onto every single penny and dollar when it comes to any sort of cost or spending that gets stuck in that they get stuck below the ceiling because um like i forgot who i heard this from butrealistically each of us has a max capacity of the number of decisions that we can make per day and when you spend your decision tokens because we live in an ai economy now when you spend your decision tokens on worrying over these relatively small uh costs and like losses to you you give up the capacity to make the bigger decisions that will take you kind of to that next level.
49. 30:03share
    Speaker So I was actually, it's funny because I was talking to my mother on the phone about this last night, and she was kind of talking about how a lot of Chinese immigrant families, when they come to the U.S. Like we're having this discussion. We love starting businesses, right?And a lot of times we start, we go into businesses that are like restaurants or some sort of brick and mortar or a laundromat or something like that. Not necessarily digital, like it's all over the place, but... we have this really bad cultural habit of counting every single dollar and whenever we think about hiring someone to do something we're like no we can do it ourselves we'll save that cost but by doing that we limit ourselves in terms of the scope that we can handle So a lot of these immigrant families kind of get stuck in that mindset.
50. 30:54share
    Speaker And because of that mindset, they can't scale beyond one location.And when that location inevitably goes into a downturn or some sort of like slowdown.they're not they have no diversification because they've had no time to go do that right so then then a lot of times 50 percent of time you see when covet hit a lot of them close shop right so that's the main difference i see with a lot of these uh the the guys who just all of a sudden launched into the stratosphere versus the guys who are just stuck spinning their wheels um you just gotta have to give me some examples of where you've like hit these thresholds i'm sure there's levels to this too right like your first hire going to 10 team members hiring an ops manager with like percentage whatever right so i would say my first threshold hit when essentiallyfor the first two three years of my business i was a one-man show with a bunch of contractors and

51. Move maintenance work out of the owner’s inbox

52. 31:56share
    Speaker I basically was trying to build our MRRs to the point where I could hire somebody to take over some of the, you know, the user onboarding, some of the client communications, things like that. And so when it was just a one-man show for me, every single message hits my inbox, right? So I have to directly respond to everything. Otherwise, there's no one else to pick it up for me. And when I spend all of that time doing that, that took up my maybe like I would say 9 a.m. through 4 p.m.Was just responding to people and fixing issues that arose during the day when everybody else was working and running traffic and things like that. Right. And usually for especially in the Legion space, most of the traffic is shut off by 4 p.
53. 32:40share
    Speaker m. CST, 5 p.m. CST. So after that, in my head, it sounded good. I was like, well, I'll just spend the morning and after taking care of everyone's issues, then into the evening, I'll eat dinner and then work on improving whatever processes and work on expanding the company in whatever direction that I had planned originally, right, for today.But every time it was like after dinner, I was just so exhausted from the number of things that I've responded to and the number of decisions I've already made during that day. It was it just kind of like progress ground to a halt, basically. And then when I hired my first basically. executive assistant. She started helping me with doing things like invoicing. She started doing some client outreach for me and things like that.
54. 33:27share
    Speaker It freed up so much extra bandwidth that I think the next year after those first three years. I doubled the revenue of everything that happened in the first three years. Just because it was like, I had so much more companies to make. Yeah, you offload.those decisions that you that that i i kind of categorize now everything into two different buckets right you have your money making activities and then you have your maintenance activities so the maintenance activities depending on your personality you know you uh you kind of put together a team uh that fills out your weaknesses so my weakness is one of my weaknesses is organization oh my my stuff kind of tends to go all over the place but my strength is networking and the uh oh hold on sorry something just popped up Yeah.

55. Alternate growth with strengthening the operation

56. 34:23share
    Daniel Wang So my strengths as an operator is on the networking and moneymaking activity side.So once I started hiring people to take care of the maintenance side, I was able to go full throttle on the money, on the moneymaking activities. And really, that's what that's that's what blew up our revenue. But on the flip side of that, if you charge too headfirst into the moneymaking activities and you neglect the maintenance, everything kind of implodes, right? Because you don't have a good foundation to build off of. So my company has gone through these cycles. It's like every two years. And honestly, the cycles have been shortening since we've been growing exponentially. exponentially. Every cycle, I would say we run into this problem of, okay, I'm going to go full throttle on the moneymaking activities.
57. 35:07share
    Daniel Wang And then we run into, oh, wait, the infrastructure is not holding up. So we come back. to focus on the infrastructure. We build that up for the next two, three months for that quarter. Then we refocus on on the money making activities. And that's it's it's almost like I don't do it personally, but like you're a gym guy, so, you know, the guys who like cycle steroids. It's kind of like that. You cycle the growth and also the leaning out, and then you're able to make leaps and bounds by doing that. So I see some operators, they are very, very keen on only doing one side over the other.And when they only stick with one thing, either they charge really quickly forward and suddenly their company makes a lot of money.

58. Build the next option while the current one works

59. 35:51share
    Speaker But Then they hit this like implosion threshold where everything just crumbles, right? Because they haven't been maintaining their foundations and they have to come back and refocus on that. And then you've seen it in this industry. They disappear for like a year or two and then they finally come back and they start doing things again. We want to avoid that, right? We want everybody watching this to learn to avoid that cycle or like that from happening.So what do you see with specifically affiliates, not e-com guys, not service providers, but like with affiliates, like where do they create the consistency to level up and scale more consistently? So the biggest mistake that I see with a lot of our affiliate clients is that they find one vertical that crushes really hard right now, and then they throw everything at it.
60. 36:39share
    Speaker So they put all of their eggs in this.basket they're like okay i'm gonna buy all these assets i'm gonna hire all these people who are specifically only good at this vertical and we're just gonna make as much money as possible on this vertical but then they you know it's i always say this to my team i'm like whenever whenever there's bad times they feel like they last forever and whenever there's good times they also feel like they last forever right so you see these like five or six figures some for some guys even seven figure days and you're like i'm in valhalla this is gonna last forever i'm just gonna keep building a team around this and all of a sudden that vertical dies or something because we run on aplatform that we don't own like all of us right we run on google
61. 37:21share
    Speaker meta we're in tiktok we're at the mercy of these platforms if they pass some sort of policy that all of a sudden tomorrow destroys part of the pipeline or part of how we operate if everything that we're doing is in this vertical let's uh so for example i would say a good example is uh is medicare right so when medicare was super hot like the first year uh i believe facebook then passed this political verification requirement and suddenly everyone was like wait what do we do you know i have all these this personnel i have all these uh all these lead buyers i have everything set up for itand all of a sudden there's a requirement passed that that bottlenecks everything So the most successful affiliates that I've seen, they essentially leapfrog all of their verticals.
62. 38:10share
    Speaker So if they have a vertical that's crushing, they'll put like 65% of their attention into it. And the other 35% of their attention, I would say, would be dedicated to finding the next.that's working or something that's not even in the same realm so let's say like you're a medicare uh affiliate the guys who i've seen do really well is while their medicare is crushing they go into something completely different like uh like e-com or uh or mass torts or just something that's it let's say a rule passes down from facebook tomorrow that affects all of medicare at least a third of their business that's running does not get affected and then they can pivot into that So you're basically giving up capacity, bandwidth, and some upside with what is working to pour that export.

63. Use experiments to discover the real constraint

64. 39:07share
    Speaker Giving up upside to generate some sort of insurance for your company.Or you get out of an affiliate and you go to something completely different that's recurring. Or that, or that, or you just exit and then, you know, start selling drugs or something. Question for you, man. How, how have you, as you've gone through like the levels to 15M a month recurring or, and cumulative. How has your personal money habits and maintenance been from the time you were an affiliate all the way to where you are today? Yes, I'm glad you asked that question because I think as I've grown through the stages, your relationship with money completely morphs. So when you're in the very beginning. stage, your relationship with money is money is blood and oxygen, right?
65. 39:57share
    Speaker You are literally grinding to breathe and for your heart to keep pumping so that you can survive to the next hour. So when you're in that mode, it's actually I would say that's the hardest mode to break out of when you're literally working for survival, because everything is survival minded so that any sort of expenditure becomes some sort of like outflow or pain. So when you spend money to improve your business, it physically hurts because this money that you're spending is literally your lifeblood. Right. And that's kind of like, like I said, when people are spinning their wheels, that's also that's also part of the factor. That's that's the mindset that they're stuck in.Once you get to a place where you're like, OK, I'm going to stop viewing money as, you know, oxygen and blood, it becomes it.
66. 40:50share
    Speaker becomes a tool so when when you start viewing money as a tool instead of a requirement for necessary survival which obviously it still is right but when you start looking at it as a tool you're a lot more lenient with allowing uh expenditures to experiment with things When you start experimenting with different ways to improve your business, I'm going to give an example here. We used to use, obviously, Google Sheets, cheapest option for all of our databasing. I was super cheap back then. I was like, I don't want to spend money on any other CRM or database.Once I broke out of that mindset and we started experimenting with things like monday.com and then Notion and then eventually we landed on Airtable.
67. 41:41share
    Daniel Wang But even after Airtable, recently this year, I took the leap to completely migrate to our own CRM after hiring a CTO and a full stack dev. It basically removes all of the limiters that you previously didn't realize were there. Because you're using tools that are pre-built and not customized to you, you don't realize all the extra steps that you're taking and all the extra decisions that you're making.the the fatigue that is causing you just to go through your daily tasks and log the things that you're supposed to or that you need to log right and then once you break through that ceiling and you start you start experimenting so i was willing to spend money on this experimentation and even though the first three solutions weren't the final solution the only reason i landed on the final solution was because i was willing to say and some people call it waste money on the first three on testing the first three solutions

68. Make the upside assumption visible

69. 42:47share
    Speaker So it's like it's almost like playing the VC game where you invest into 10 different companies and nine of them fail.But the one that succeeds makes you all your money back and more. It's the exact same mindset. So you think of this with hiring employees, investing in a service or a platform or whatever? Testing whatever is potentially beneficial to your company.look at a lot of uh the things that we test not as uh not as whether or not this all this is you know slightly better than the last or not whatnot but i look at it as in terms of how much percentage productivity could this potentially bring us right let's say we're doing let's say we're doing
70. 43:31share
    Speaker 20k profit a day if this can increase my production and productivity by 10 even that becomes 22k a day that's that's an extra 60k a month right what is a few hundred bucks spent on the service versus an additional 60k a month in profit that we could be bringing in because i decided that this was you know because I decided to spend this cost.So even if it's a few thousand dollars that we spend, you know, testing out five different services, if this, if the final service that we land on increases our productivity by even that percentage. And the thing is, I would say a lot of times it's more than a 10% increase, right? It's like a 25%, 50% increase. It's a worthy expenditure.

71. Judge infrastructure at the scale you want to reach

72. 44:16share
    Speaker You know the same thing to our clients, too, who rent assets from us. I was like, okay, our prices are more expensive, but it's because they're more of a premium product and it'll save you on headaches. And when you're really hitting that scale of spending five to six figures a day, an extra...three or four headaches per month is not worth worth saving your money for like a cheaper service 100 yeah so what advice a lot of affiliates are listening there's a lot of buyers networks a big mix but a lot of affiliates from the listeners podcast what is a piece of advice you will leave If they want to level up, whether they're spending $100 a day, $1,000 a day, or $10K a day right now, what's like the last piece of advice you would leave with them?
73. 45:06share
    Daniel Wang So I would say don't cheap out on your infrastructure. That's the biggest mistake that I see a lot of guys growing brands and running a, you know, scaling affiliate traffic doing.They want to go with... the least expensive option but what that ends up doing is you hit you hit a point where you're finally got you finally have all these successful campaigns you're scaling and it all crumbles because you bought a farmed user that can't do a selfie verification and now you've lost all your campaigns i've seen hundreds of times like what especially because in the very beginning when you're scaling you might be thinking okay i don't know if this campaign is going to work out so i'm going to go for the cheaper option so that i can save this initial cost but the real cost rears its ugly head when you have hit that successful campaign and you're scaling and all ofa sudden your infrastructure doesn't support that scale anymore
74. 46:08share
    Speaker So that would be the first piece of advice that I give. The second piece of advice I would say would be diversify your verticals. Don't throw all of your eggs into one basket for whatever vertical that you're running because no vertical lasts forever. They might last year to year, but there's a cycle to every single vertical. Like they might do.really well this spring and then just be complete dog shit for summer and winter and then come back the next spring again but you don't want to have that two or three quarter down time after having that amazing first quarter right so always look for some other vertical to pivot into and um yeah uh look for look for stable contracts over uh over uh immediate pops how can people connect with you learn more about your services how you can help them with infrastructure So you can reach me on Telegram at at D-R-S-A-C-C-O.

75. Delegate the next bottleneck, too

76. 47:12share
    Speaker My Telegram username is D-W. You can also reach us with. my head of BD.His name is David Kim and his Telegram username is at Pringles Kim. And he's actually, when we're on the topic of breaking through ceilings, after I brought him on board, he's actually our first real salesperson. So that... allowed me to completely focus on coming up with new ideas for revenue streams for our business and improving, you know, whatever services we were offering and just coming up with new ideas. I'm basically the idea guy while he's out there talking to all the clients and onboarding them. And I would say, I would credit him with, with, uh, with.with a
77. 47:57share
    Speaker lot of the growth that we've seen this year as well so for guys who are you know who are trying to build a team who are trying to make it to that next level of revenue don't be afraid to take the leap to take that burden off your shoulders even if it costs you a little bit up front it's going to pay off especially if you get the right people into that position to cover for the weaknesses that you personally have all set man bro it's been a pleasure i've got a million other questions i want to ask you just around like money and stuff Let's do a follow-up podcast in a few months at your exotic car storage facility.That'd be sick. We haven't had a podcast there yet. So I was hoping either you or Stodolak would be able to be the first one to do it. Let me get dibs. Don't tell Dave. All right, brother. You hear that, David? My man. Thank you again. And, uh, yeah, appreciate you coming on. We'll see you next one. All right, man. Thanks, John. We'll talk soon.