(Jonathan Ames)  Welcome to, “E is the new U” an eCommerce and inventory podcast for growing distributors in the United States. This is episode six and we have Mario Nawfal here who is the founder of various companies. He has broken through actually managing his businesses to working in the strategic side and we’re really excited to have him here. He’s come and spent some time with us from Berlin. 

(Mario Nawfal)   I left Berlin a day ago, so I’m in Paris now, but it’s a pleasure to meet you from Paris and, anyway I can bring value Jonathan, I’d be happy to.  

(Jonathan Ames)  So as far as e-commerce, what got you excited about that? Why was that your passion?  

(Mario Nawfal 00:40 sec.  It made sense. It was just so easy to get into the space. I was doing banking and finance at the university. I knew nothing about e-commerce. I bought a few things off eBay. That’s it, I was in Australia. That’s as far as it went. I was obsessed with finance and  I didn’t even know what entrepreneurship meant. Then I watched a video of a young boy at age 14 that made his first million dollars at that age. I realized I was 21 and that I’m not too young and if anything I’m getting into the oldest stage of entrepreneurs in today’s age. 

I’ve read that most entrepreneurs that succeed start at age 45 when they found a company that succeeds. So, that gave me peace of mind. As a joke I say that, you know, 21 is too old compared to age 14. But then I launched my first business after doing door knocking, et cetera, and kind of followed the money, which is what business is about. You find opportunities, product market fit and you capitalize on them. 

I did that and it led to my first business at age 21 getting $2 million in the first year, 10 million by the second year, and that was in eCommerce. And then I’ve expanded more and more and made a lot of mistakes, lost money, made money and my e-commerce work expanded to consulting. But my bread and butter, and my focus and my obsession and my expertise is in e-commerce. 

(Jonathan Ames)  Excellent. And what if you could go back and talk to the Mario of yesterday who started in eCommerce and tell him one thing to move him forward. What would that be?  

(Mario Nawfal 02:13 sec.)   I’d say; “Well done.” You’ve done everything well because you followed the money. You’ve actually done something that many people don’t do to this day. And it drives me mad because everyone repeats it time and time again, and people still don’t do it! It is that you have to be lean. You have to just get an MVP out there and then test that before, you know, spending months developing something. 

I was speaking to an entrepreneur yesterday who works with me, but he’s also doing his business on the side. I’ll tell you an interesting story. I’ll tell you this because it will bring value to your audience. Okay. I’ll repeat something that your audience knows, but then even if you have a business and you’re not just starting out you should still follow that approach. I’ve got many seven, eight figure businesses, but I’m still following that approach. So, this entrepreneur I work with is launching an agency that I didn’t know about. Where  he reviews websites and does conversion rate optimization. He said he took three to six months to develop it. Then I got an idea. It was something similar to his, again, conversion rate optimization. I’m not going to explain what the idea is exactly cause it’s pretty smart. It’s pretty cool. I don’t want anyone to copy it, but within a week I had a website up and it is about to go live. He tells me he’s annoyed. He says; “you know I had a similar idea, and now you’re doing something similar.” I had to explain to him that we could partner on it together. But this is his fault. It took him six months to ideate it and get it to that stage and it took me a week to do it. So if his idea fails, he’s lost six months of his time. That’s the most valuable asset, time. If my idea fails, I didn’t even lose even a week because I didn’t do that much work to test it. Developing the website took at most a few hours, then you know, coming up with the idea and having the team to execute it. So my advice is be lean.

I’m not giving myself advice from when I started. I’ll give my younger self advice in a minute. I just want to say one thing well, I was always very lean and I followed the money. I just focused on what works. That’s really hard in business now and it’s really competitive. Everyone is an entrepreneur. Everyone. That means yes, it’s not easier than ever to be an entrepreneur. It’s actually easier than ever to become an entrepreneur, but it’s harder than ever to be a successful one because everyone’s doing it. Everyone’s eating your lunch. So it means that when you’re able to come up with a product, people are happy with. You’re able to get people’s attention and to get their money. You’re onto something. It means double down like crazy because that’s so rare and difficult to achieve. Not many people tell you that. 

(Jonathan Ames)  No they don’t.

(Mario Nawfal)  Many people make it sound easy and make you sound easy to make it sound like, Hey, that’s easy to do. If you just follow these steps, well, there’s another 10,000 people listening to that podcast that are following these exact same steps. Why are you going to succeed? There’s many other podcasts giving those same steps. So if, if the formula works for you, the timing, the execution, the market, etc., the pricing, the marketing. If it all comes together and there’s so many pieces to it and you make money out of it, you’ve done the hardest thing. Now, it’s time to scale. 

What I would’ve told myself when I first started this is learn from others. No, no, it’s great to make mistakes and learn from them, but it’s so much better to learn from other people. Warren Buffet has a great quote. He loves learning from his own mistakes, but you know, why not learn from others first, learning from other people’s mistakes instead? That’s something I didn’t do before, but I’ve been obsessed about learning from other people for years now and I spend about 3-4 hours a day, seven days a week. 

(Jonathan Ames)  That is excellent advice because I think a lot of entrepreneurs feel like to show their chops, they have to do it themselves and they’re really making it harder for themselves. In today’s environment, like you said, it is much harder to be successful even though it’s easier to get an idea out, it is harder to be successful at it. 

(Mario Nawfal)  Yes, ideas are a dime a dozen and it just makes me laugh when people approach me, and they say, Mario, I have an idea and I ask them to share it.  I tell them to share it with other people. Get advice. Yeah but what if someone copies me? Man, there are many other people doing exactly the same thing. And of course people will be copying you because at the end of the day you have to announce your idea. You have to create a website, you have to advertise then and people will copy you, but it’s a matter of just getting people to pay for your service. That’s the hardest part,  even for me now. Now I consider myself, I want to say a veteran but I’m too humble for that. But I’ve done this time and time again and I’ve done it really well and I still fail. I’ve always got experiments running and many of them fail and many of them will fail.  

(Jonathan Ames)  So as far as moving forward with e-commerce, now that we’ve kind of talked about this, what advice you might give yourself in the beginning, you know, about following the money, be lean, you know, get it out there and test it fast. You’ve got something now that, and this is where a lot of our distributors are, they’re at the point where something is working, they’re getting the orders in, but now they’re having a hard time scaling and they’re wondering, what do I do next?  

(Mario Nawfal 07:04 sec.   Mmm, okay. So the first piece of advice I’m giving everyone before we look at scaling it is don’t scale it and lose the attention, and the trust and the community that you’ve built with your customers. Acquiring new customers is more expensive than ever. Everyone’s banging, everyone’s onto Facebook, everyone’s onto Instagram. They’re very, very expensive and they’re going to continue getting more expensive. I was speaking to my business partner in the UK for one of my companies, a few hours ago, and I was reminding him that, Hey, you’re complaining now that Google and Facebook are more expensive and they’re not working for you so you fire your agency. He fired his agency. I said to him, yeah, no agency is going to work miracles. 

It’s going to keep getting more expensive because I had to explain to him, you know, larger companies are getting more and more involved, and that will happen to every platform. What does that mean? It means that the customers we have right now, if you’re lucky enough to have an email list or to have people’s attention in any way, shape or form on Instagram, Facebook, email, Podcast, that’s the value. And if it’s a community then you’ve got the most valuable thing in business, that’s community. Look at ways to increase the value of that and grow that. Now if you can delay gratification, delay making the money now and instead focus on building a bigger community. The gratification will come to your later on 10X, because you’ve got something that even I struggled to build. And that’s a community and people like yourself, Jonathan, that I have a podcast and have listeners and you have people’s attention. That’s, the value in the next five years.  So that’s what I would say to businesses as they look at scaling in general. 

Now, in terms of how to scale there are two main pillars to that. Number one is the team. And I know that everyone says that. Well, I screwed it up so bad in my early day. So bad. I’ve hired the worst people. Now, if you watched my videos, you know, if you read my story, you know I was scammed really badly last year because I just didn’t hire the right people. And it was as bad as it could get. So hiring the right people is key because if companies want a group of people and system. And that’s the first point. 

Pillar number two, is building a system. That’s easier said than done. But that’s where things like let’s say e-commerce, having something like Shopify, having Zen desk, having a marketing machine that’s running and using checklists.  Even to this day I struggled with it, with my team. Building systems is an art form, if you can hire someone that knows how to build systems that knows the importance of using project management tools, and delegating your brain onto things like Asana and any other project management tool so you don’t have to remember things, you’d have to use your brain to do like, Hey, what was the thing I needed to do? What’s the thing I need to do on a weekly basis? What do I need to check when I launch an ad? The web, the sales are low, what do I need to do? Now, you have a checklist. Every time sales are low. You need to go through the checklist and check the website speed, the checkout process, any bad reviews, any competitors’ advertising against you on Facebook or Google. So that’s happening. Your checklist. 

So these two pillars, building a system, which I can talk forever about and hiring the right people are key and that will allow you to scale. And you know, I’m not involved in most of my businesses. I can die today and my companies will continue running as they are, which is, you know, the ultimate position to be in. 

(Jonathan Ames)   It is! It’s an excellent accomplishment Mario. So as far as the system, let’s focus on that side of things, when you’re starting to build this system for and let’s say you’ve had some success and now you’re wanting to optimize the system more. What are the processes that you would go through from a high level? 

(Mario Nawfal 10:47 sec. )   Well, I’ve done that. I’ve gone down, I cheated and I think you should all cheat. And that’s to hire someone that knows how to build systems. So I’ve got someone, her name is Zandrea and she’s obsessed with systems. She wakes up every day, and she just systemizes things. That’s what she does. So that’s the shortcut. Now on a more granular level, what are the things you could do? Number one is get a project management tool in place. We use Asana, there’s many others. So that’s the first thing. Get a project management tool. This way we’ll have everything we need to do, including due dates. I’ll use it on a personal level, whether there’s something I need to remind myself of on a daily basis to, let’s say exercise. I’m  on my project management tool, which means every day I need to tick it off, physically take it off. So there’s no way I can forget it. And of course, on a business level, there’s a whole bunch of things on there. 

So I use it myself and my team uses it with a due date. And again, having a due date is important. Or, things will just get lost. So you, when you get to a task you need to do, whether you do it now and get it over and done with, or you change the due date to do it at a later stage so you can focused. One of the things that gets me really angry with my company or in business in general is when there is an idea floating around in the group, they discussed it but no one added it to the Asana. That idea could become a multimillion dollar idea, and that happened once. It did. That could become a multimillion dollar business. It could become a multimillion dollar business with certain strategy or marketing tactic, but it didn’t get executed because they chatted about it, but no one added it to Asana and then one person got a call from their girlfriend, the other person had to go out and make lunch and then they forgot about the idea. And that happens time and time again. And that’s probably one of the biggest problems in business. I would never accept that. And that gets me mad more than anything.  

(Jonathan Ames) Yes. Again, ideation, you know, creating the ideas. That’s the easy part. It’s the execution, you know.  Your first part talking about documenting it in your project management tool. Being that first step of execution.  

(Mario Nawfal 12:45 sec.)   Yeah. You can’t execute it if you don’t talk about it or if you forget about it. So the first thing is not to forget about it. That’s where a project management tool comes in. Then you’ve got other tools like am a CRM for example, to talk to your customers. So we use Zen desk, we use Fresh desk for those others, and then there’s the logistics.

And of course Shopify has a lot of plugins you could use that pretty much does everything for you then. Yeah. So the less people are needed in a business, the more efficient you will as a company. The more efficient you as a company, the more profit you make. The more profit you make, the more you can afford to spend to get a sale because you’re more efficient. Cost per sale is less. What does that mean? You can outbid your competitors. You see, being efficient allows you to afford to spend more to acquire a customer because you are spending less delivering the product and the service. That means you can spend more to acquire the customer. That means you can actually advertise more than your competitors on a certain keyword and that will literally allow you to dominate it. If you can spend $3 to acquire a customer, and your competitor has to spend $25 then that’s it. They can’t make money because they’re not as efficient as you are. Yes. That means you can literally dominate the market because you can just outspend them and dominate , then AdWords. So that efficiency due to systematization just made you into a multimillion dollar company and made your competitor into zero. That’s an extreme example, but one that makes logical sense. 

(Jonathan Ames)  It does and if anyone has a doubt about that, you can look at Amazon. They built their entire business dominance on efficiency starting at logistics. 

(Mario Nawfal)   Exactly. Not only do they have an incredible moat around them because of the efficiency and system they have. That’s their asset from logistics, especially logistics to the entire floor, the entire funnel the customer goes through.  

(Jonathan Ames 14:42 sec.)   Yeah. Excellent. That is great advice, Mario. Any like more granular things? We’ll kind of wrap it up here, but this is some good advice. Mario’s talked about project management, about putting in place efficient systems and building a competitive edge through that efficiency. Any other advice you’d like to share? 

(Mario Nawfal)  So where would your audience be at in their business? What stage would they be at in their business? What are they trying to achieve next?

(Jonathan Ames)  Typically they’re at the stage where they have some success. They’re growing, but they’re having pains trying to scale their growth because the systems they put in place or the lack of systems they put in place are holding them back. There are usually bottlenecks. And so now they’re looking around and saying, all right, what do I do? Do I need to increase sales here? Do I need to improve efficiency of my operations? Is there something else in place that I’m missing that’s keeping me back from growth? 

(Mario Nawfal)  Okay. I’ll give you one piece of advice, because there’s so many things I could say, but I’ll give you one thing that could make the entire difference to a business at that stage.  First, pat yourself on the back. You’ve achieved what most people fail to achieve and that is that you’ve generated revenue, and if you’re generating a profit, even better, power to you well done. 

Now what’s next? What comes next is an incredible learning experience. What I recommend, and I’m not gonna plug myself because I’m not selling a service there, but what I would want to do later on, when I have the time and I’ve done it last year as  you mentioned earlier, the co-CEO thing where we actually partner with companies that have generated revenue. We help them scale and we charge a percent. We don’t charge for the service. We take a percentage. So we say no to them as clients and I’m not, again, I’m not doing this now because I’ve got my own businesses. I don’t have time. But why would I do this? Because the scaling is something people like myself have done time and time again. So if you can partner with someone like me and there’s many other people better than me or hire someone that’s been there and done that then that will save you so much money in terms of mistakes? 

(Jonathan Ames) Yep.

(Mario Nawfal)  You can learn about it, read about it, but there’s nothing better than actually doing it. Whether you do it yourself as an entrepreneur like myself who’s got these businesses. Or as someone that’s worked for an entrepreneur like myself and knows how scale the businesses then you’ve achieved the best you could have done.  What is the reason why I would want to partner with these businesses? Because if you’ve done the initial step of getting a product-market fit and now you’ve got to look for the systems to make sure that you can scale then you’ve got to look at scaling what works. You’ve got to look at hiring the right team members, and make sure you can scale your ads.  You’ve got to look at your copy. You’ve got to look at split testing, and CTA, so you can reduce your customer acquisition costs. You’ve got to look at customer service to make sure that you increase the lifetime value the customer gets. So many things like that can come in and the easiest way to get all of those ticked off your list is to partner with someone or to hire someone that’s done it already. 

Be careful hiring someone and paying them a fee because if they really believe in what you’re going to do and you already have revenue, they shouldn’t accept a fee, but get a percentage. This way they’re incentivized to help you scale. Just make sure you do your due diligence, check their references, make sure they’ve done the work. If you do this, nothing else matters. You can stop listening, but it’s always good to keep learning because then you could bring value to your business, but you can step away from it at that point. Retire today if you find the right person to do everything for you if they’ve scaled a business before. I don’t recommend you to retire because no one knows your business like you do, but that person can help you scale. I think that’s the one piece of advice that could make the biggest difference for business at that stage and I hope it does bring value.  

(Jonathan Ames 18:17 sec)   Excellent advice, Mario. I really appreciate your time and bringing your  experience, both the successes and the struggles that you had and sharing those with these new and growing distributors. Appreciate you coming onto the podcast today. 

(Mario Nawfal)  Thanks a lot, John. Thank you so much. Take care. 

(Jonathan Ames)  That wraps up another episode o “E is the new U.” If you have any questions about the digital or intangible aspects of running a distribution business, email us at [email protected] and we’ll answer your questions on an upcoming podcast.