In this episode, Colton speaks with Frederick Lansky of Points Panda (https://pointspanda.com) about Frederick’s recent partnership breakup and buyout from his first company. They also chat about the differences between ecommerce and productized services, how making one person the face of the company can make it harder to sell, Frederick’s advice for people wanting to leave the corporate world, staying healthy as an entrepreneur, and much more…
Frederick Lansky is an entrepreneur and digital nomad. Frederick started iChess (https://www.ichess.net/) – an ecommerce site that sells instructional videos for chess players – and grew it to $1M in annual revenue. He has since left iChess and gone on to start Points Panda (https://pointspanda.com), a productized service business that provides credit card consulting and airline miles reward booking for one flat rate.
SKIP TO THE GOOD PARTS:
- 0:58 – Frederick shares his story on how he got started.
- 4:47 – The story of Frederick’s recent business iChess.
- 6:24 – Growing iChess to $1M ARR.
- 8:07 – Chris Reynolds and the importance of having a coach.
- 11:13 – Respectfully parting ways.
- 14:19 – Rethinking ways of handling a business partnership.
- 19:25 – A different business model.
- 24:42 – Sustainable ways of growing a business.
- 27:55 – Some things to consider when looking at ecommerce, digital product ecommerce or productized services.
- 32:38 – Frederick suggests ways to reduce expenses in order to start a business.
- 35:17 – Spending a year abroad to get your business off the ground.
- 38:04 – Getting systems in place in order to sell your business.
- 40:07 – Leveraging your image for your business.
- 43:56 – Selling an ecommerce business vs selling a productized service business.
- 46:26 – What Colton is up to now, and how to connect with him.
Colton Moffitt 0:08 Hey everybody. Thanks for listening today we have Frederick Lansky, he’s the CEO and founder of Points Panda. So Points Panda is an interesting company that you set up recently. But what we’re going to talk about also is partnership breakups, and how that played out with his other business, and just kind of how you can handle that properly so it doesn’t have to be a scandalous and overall disruptive experience. So thanks for joining us today and look forward to hearing more about your story from you.
Frederick Lansky 0:43 Yeah, no problem. Thanks for having me.
Colton Moffitt 0:45 So why don’t you just kind of start off by telling us what you’re doing now briefly, and then how you got to this point, and how that kind of ties into this story about partnership breakups.
Frederick Lansky 0:58 I’m gonna have to go way back because I was running this business with my former partner for nearly eight years, before that I was two years I would say I was a digital nomad, but I was more of a wannabe digital nomad because I wasn’t really making any money. But I was getting exposed to those kinds of people. I don’t even think that term existed in 2009. It was just, these seeds were just starting off as high speed internet around that time, late 2000s was finally starting to show up to more like developing countries and different places that previously didn’t have it. So I guess where to start is I graduated right around the great recession from college and I was always kind of entrepreneurial person. I won’t go too much into detail but let’s just say in high school and college not all my entrepreneurial ventures were totally legit. But…and because of pressure from parents and families and things like that, I thought that corporate track would be for me, to finish university and then get a good job and I had good grades and I got lots of internships and jobs but every time I kept getting fired after a couple of weeks mainly because if I if someone asked me to do something I didn’t agree with I just wouldn’t do it. So obviously not a very good match for the corporate world. So after that, there was this last job with his company called NCR, they were this fortune 500 company that makes ATM machines. I did my absolute best. I was like “I cannot get fired from this job”. I was such a suck up, everything. They still fired me after like, I think maybe four months, and I don’t think this time it was because of behavior. I just I think they were doing me a favor. They actually said that’s me and it was actually true. So after that I backpacked through Europe and then I moved to Buenos Aires, Argentina to brush up on my Spanish which at the time was pretty good, but I wanted to take it to an advanced, fluent level and I also really just didn’t know what to do with my life and my mom’s from there. So I had like lots of relatives there and a support network. So I spent about a year and a half there and funny enough, my high school slash college buddy Will, who was my former partner was living there too and being that there weren’t…there…it was…I think the expat life was a little lonelier back then, you know, 10 years ago than it was now. So you would quickly just kind of attached to whoever you know, that’s from your home country or speaks your home…you know, your native language. So we were hanging out a lot, all the time. We were both struggling super hard to find a way to make real money. We were both doing all kinds of random odd-job gigs like transcripting in English or translating Spanish to English, anything that we could find and he was already teaching chess online, like by finding clients through referral network, and Craigslist and it was through that, that I asked them “you know, there’s this new thing called YouTube, it’s really just a bunch of teenagers doing skit videos” – Youtube in 2009, 2010 was like, tick tock as these days like no one was taking it seriously – “but we could we could start posting videos of you just playing online and doing classes”. Which now there’s like a bazillion YouTube channels doing this but back then it was a pretty good idea and so without any SEO or pay per click or anything else, the channel just gained traction very rapidly, which 10 years ago is pretty common in YouTube if you put anything really a value out there. So through that, we just filled up his calendar with online Skype tutoring for chess – he is a chess master, by the way – very, very quickly. But as you can tell that business model has a very, very quick max.
Colton Moffitt 4:47 Right.
Frederick Lansky 4:47 …and so he was teaching non-stop and then we were like, “well why don’t we open up the e commerce shop and start selling these videos” – especially since already…so there were already companies selling these videos, but they were only doing it by DVD and even some of VHS tape, mostly DVD at that time. So they were not making the transition that was happening then around that time from DVD to download, right and it was kind of already beginning back even in 2009, 2010 people that really didn’t want DVDs anymore. They wanted to start just having instant download access. So these companies were all doing not very well at all. So it was quite easy to work with them when I said hey, we can convert your DVDs to downloads and just write you checks. So next thing you know we’re making our own videos a dozen companies are so we started working with converting DVDs and in a lot of cases converting VHS tapes. If you can believe it or not. Some of them from from some of the world’s top grandmasters have since passed away so some some of this content was priceless regardless of the medium and converting it into a video downloads and within about three years we already had hundreds of titles, within four or five years we had thousands of titles. We just be became the world’s biggest ecommerce digital download shop that had literally everybodies stuff, even even websites that, that their platform was typically the Software as a Service and the videos, they can only play in the website, they would make an exception for us, they would say, “Oh, you can you can screen record and sell it as a download” because they knew what kind of numbers we were doing.
Colton Moffitt 6:24 Right.
Frederick Lansky 6:24 So that was the model from 2013 to 2019. We’re just selling these downloads. We made probably about 60-70% of our money off email marketing, kind of doing this Groupon type tactic, right? So it’s the classic Digital Marketer email marketing technique, right? You have four or five days for sale, you do a big discount, it goes straight to the checkout, and you advertise this promotion for the week and then every week you do a new one. So that was cool. It was a good business model and I feel we kind of maxed it out around the million dollars in revenue. I think it’s been that way for a couple years now. Which is not the fault of anyone. I just think the it’s kind of niche. I feel like everyone that could possibly want a chess video already knows about iChess and that’s it. So it’s, but it’s a very lucrative model right you everything’s by download, there’s no customer service really to be done other than you know refunding them if they don’t want it. There’s nothing, there’s no service to deliver. Theres just downloads which is just pretty nice and I think since I’ve left the company, they started doing streaming as well, which as you can figure out for thousands of videos, each that have 10 or 12 thou…talking about 12-15,000 videos, finding a way to upload them and get the streaming working wasn’t wasn’t really that easy. So yeah, I just eventually decided that I wanted to leave which is really the core of this talk here and the main reasoning I think for it was my business partner and I my former business partner, we just started having a different vision or different direction for the business and also what we wanted business just in general terms to be for us in terms of our personal life as well. So…
Colton Moffitt 8:06 Yeah.
Frederick Lansky 8:07 You know, I didn’t want to work 40-50 hours a week like a corporate job, not like a stress, I wasn’t working like crazy hours, but I was still working five, six days a week, really seven if you count any time on the computer, working sometimes 10 hour days and…So the business had a lot of moving parts, right? We’re producing four or five courses a month, we’re running four or five email promotions a month – across two languages, by the way, we did English and Spanish – with 12-1300 purchases a month, we’re also having lots of customer service and there’s even a customer service lead. It was…it was becoming quite a large business with lots of many moving parts that required constant tending to and it just wasn’t fitting into my lifestyle amongst other things such as, you know, I don’t even play chess. So I was just getting kind of bored with it and after eight years, I wanted to move on. So I wouldn’t say my former business partner and I were up at arms at each other. But I think once he quit his corporate job in 2016, because that business made enough, more than enough money, not just support one traveling entrepreneur, but an entire family, he was saying, you know, he didn’t want to do the corporate job anymore, too. So we were both working 20 hours a week, but then he came in and started wanting to work way more than that and that’s kind of where the tension started where by 2017, it was clear that we were both not very happy in the partnership and I think we were both kind of I didn’t read the book Rocket Fuel, but I know this term that they have there about visionary versus the integrator. I think we were both visionaries with different visions of what we saw for the business. So there was a lot of tension there and there was no integrator. So shit wasn’t getting done a lot at the time…
Colton Moffitt 8:07 Yeah.
Frederick Lansky 8:07 …either, because we both have ideas, but we’re both struggling to make them happen. So yeah, I eventually…so I…by the point I have found a coach – the coach I got was Chris Reynolds, He’s quite popular in the community of entrepreneurs I hang out with he does. He does coaching he also does a lot of work boot camps and things like that, including when I did in Chaing Mai – by the time he found me in early 2018, I was just a complete mess. I was doing Modafinil almost every day just to try to keep up it’s almost like Adderall, but it’s like this drug they sell over the counter in Mexico. That was leading to a lot of stress, just trying to keep up with them and you know, I was…I was staying up super late till 3-4AM every day I was just like, I was still hitting the gym, but I like I wasn’t eating well. Like I just wasn’t I wouldn’t say that my rock bottom was that rock bottom, but it was still…I wasn’t in great shape and so…
…he kind of made me realize that…I had worked together with him for so long I never even thought about the idea that “oh, yeah, I can you know, I can just move on”. Like I didn’t really think about it. It was just like this thing that wasn’t even an option and then starting to realize that that’s what I needed to do, I needed to get out of this partnership. So by that point, without a coach, I was so like riled up by emotions and and feeling like it was totally his fault and without a coach, I probably would have put all the blame on him and attacked him and even rational, chill people, in those moments are not going to be able to help themselves without someone calling them out on it first. So I don’t really know what would happen without a coach. But let’s just say I was pretty angry at the time and I was feeling like it was all his fault, etc. and, you know, I think there was blame to go on all…it’s not even about blame. It was just really that we had outgrown each other and that we were both wanting different things.
Colton Moffitt 10:48 Right.
Frederick Lansky 11:13 So happens a lot in partnerships when you start off your your goals are aligned and your vision is aligned. But once they get out of line, it just doesn’t work anymore. So he helped me prepare for telling him – I wanted to tell him in person, because I felt it was more respectful that way to tell him in person rather than over text. And maybe for that reason, I waited a little too long. I told him maybe six, seven months after I had made the decision and thanks to preparing with the coach and getting all my feelings and everything in order, I was able to skirt out of this in a very respectful way, where he wanted to help me out as much as he could because I had approached it from a neutral non…non-accusatory and fight…like that’s, it’s like a very slippery slope when it comes to any form of breakup – be it romantic or business or a personal friendship where you were if you start just even a small accusation it’s just going to lead to a counter-accusation that’s going to snow ball into something really ugly and it doesn’t doesn’t really take so much to get there anyone who’s been on this planet and exists that knows exactly what I’m what I’m referring to so…Now we’re cool. We still speak about once a month I got a little over 2x multiple, 2.5x i think what would have been fair was closer to a 3x multiple all things considered, but it’s what he could afford and it was all cash up front, zero drama just sign the check. So I’m relatively happy with how it all ended up and yeah, we still chat once a month. I help them out with his flight bookings and all that stuff as well which is it was through I chest that I learned on how to do all this flight booking stuff.
Colton Moffitt 11:13 Right.
So that’s you know, it’s interesting. It seems like there was a moment around when he wanted to go full-time with it where the expectations of the balance of work, start to get a little bit skewed and you don’t necessarily know that’s going to happen going into it. So you start to see, and you’re looking over at the other guy, well, he’s not working as hard as me and even if you don’t want to think that way, it can creep up. If you were to go into another partnership with somebody, how do you think you might handle that differently?
Frederick Lansky 14:19 So I think the lines of communication are really important. My last business partner, he has a lot of good qualities, but I don’t feel like talking about the kind of personal I don’t know if I should use the word emotional kind of stuff – he just kind of sees as a waste of time. So I don’t know, you know, maybe maybe we could have worked out a way where I would just take a little bit less money for less work, but I felt like that would be going against what kind of like, I felt that it didn’t matter how much like we needed to work smarter. So we…one…one thing that I didn’t bring up so far was another tension that we had as we had disagreements on how to continue to grow the business and so we were spending lots of money on course content, let’s say 20-30% of our entire gross was being spent on courses when we already had thousands of courses and other companies were producing courses as well. So I was having a big fight on whether it’s even necessary because it’s draining all the company resources. And he was convinced that yes, it’s absolutely necessary because courses are our bread and butter and if we stop producing courses or slow them down, then we’re going to lose a competitive edge. Whether he was right or I was right, kind of hard to say. But the that disagreement there was kind of the root of it. So I didn’t feel like I should get paid less for doing less work when the work we’re doing is losing us money anyways, which happens all the time and entrepreneurship, you just end up creating more work that actually lowers your profit instead of raising it, you know, with the idea that over the long run, it is going to help grow the business. But but it doesn’t always, always pan out that way. So…
Colton Moffitt 16:08 Sure.
Frederick Lansky 16:08 Yeah, I mean, you can I think communication is important and I think you have to sit down and have those uncomfortable conversations on how to make things work. Over time, like the situation changes, people change what the two different partners want out of the business out in life changes. But, it only changes slowly over time – it’s almost imperceptible month to month – and then you realize kind of a year or two later that “wait a minute, something’s off”. Like, it’s important to have that conversation and not keep it all bottled up, which happens…it’s probably the root cause of tension in all relationships, whatever the time they are, is lack of communication, that that feeling that something is wrong. The whole reason that people been wanting to interview me about this and do podcasts and talks about this is because the vast majority of these stories are not good stories, they’re stories about how things fell apart and it doesn’t surprise me because it’s it only takes you know, just one little feather being ruffled to…for things to snowball very badly like I kind of had a falling out with someone that I wanted to partner with on this business and then chose not to and I don’t want to go into the details but rather than kind of prepping things in time and setting things over and carefully analyzing the situation I just…ok if there was one takeaway from this podcast it’s don’t write emails when you’re angry. We always send emotional emails and we say things over email that we would never send in person.
Colton Moffitt 17:43 You know, what’s funny as that Grammarly – I think it’s grammar related to spend doing this to me. So I use different browsers for the kinds of work that I do and with Domain Magnet stuff, I’m happy to let Google read all my email and so I have Grammarly running as well and they’ve got this little animated guy now and the emoji or emoticon changes based on how it’s perceiving your tone. So now I find myself looking down at this little animated face like, “am I being an ass right now? am I’m being a jerk?” and sometimes it’s telling me I’m being too formal and “you seem…you seem aggressive here”. Oh, you add a little thank you and it’s got a big smiley face and wow, it’s amazing what some gratitude will do at the end of an email, but it can come off as snarky too and if you’re communicating through slack or through email only, and you don’t have the opportunity to do a video call, let alone meet up in person. It can be very easy to have things misconstrued or to have your tone get away from you. Because, there’s a difference between saying something that’s actively aggressive and saying something without caution for how your tone will be perceived and unfortunately, the ladder is indistinguishable from the former if you’re on the receiving end, let’s take it back from the the discussion of the partnership stuff for a moment and I want to talk about business models. You had kind of gotten to learn really well the digital product ecommerce angle from a download perspective. You had original content, you also had kind of a licensing intellectual property licensing play going on. How did that inform your decision to go into this productized service model? And what do you see as being the commonalities there that you liked? And how do you think you might have learned from and improved?
Frederick Lansky 19:25 That’s actually a great question that I haven’t been asked before. So, the truth is, it’s it’s quite a different business models. So I had looked into buying another business on any of the three big brokerages online and just the type of businesses that were in my price range without getting a loan or investment just weren’t exciting me and I had I was already doing this points thing for friends for a long time, like people constantly hitting me up “what credit card do I need to sign up for?” or, “hey, I have this award booking” and like I would get some super excited to help people get – especially my friends that don’t typically like, I guess we’re all pretty well to do but everyone…we’re either making a little over six figures or a little less right? No one’s a millionaire amongst five, or at least that I that I know unless they’re lying about it but the point being none of us can afford to fly business class international on a regular basis or even even the once or twice a year that we we need to so helping them get those tickets booked using their Chase and Amex points doing transfers that they wouldn’t have been able to do on their own because it gets kind of complicated. Like that got me excited. Or, helping a friend who didn’t even know anything about this right and say, “Oh, I’m doing $20,000 a month on Facebook ads, I’m putting it on a debit card”. I mean you’re losing 12-1300 dollars a month worth of points on any of those credit cards that give you trouble or quadru…just people just don’t know.
…and so I just got really excited about helping people but I was doing it for free for a lot of people for a long time because they just they knew they knew I could be super busy doing God knows whatever I needed to be doing and they could contact me on Facebook Messenger like hey, I have this flight can you…I couldn’t help myself I was like, “I gotta, I gotta know, I…”. It’s almost like sort of gambling aspect, where you’re just like, because then when you’re booking awards using airline and credit card points, there’s no one portal right? You have to look on like 15 different sites and cross check them and then you find that one flight that they need that they needed that’s like 40-50% less points than what they saw. I get like super excited about it and I’m just like, yes, dude, you thought it was going to cost you 200,000 points to fly to Southeast Asia from the US but I found this deal for 100,000 points. Your like “What? Yes, dude. Thank you.” and so I was already kind of doing it and then I kind of put a Facebook post out just to see what…kind of check the temperature on this, see if it’s viable and I offered the first 10 people $350 for an entire year. It booked out within like five days. It was absurd. So that’s when I realized. “Wow, there really is a market for this” and so that I got to setting up a website and setting up all the social media and the logo, and all that good stuff, and as far as your question goes, the model is pretty different, more of a privatized service, right. So what I am really good at is these points working, I’m good at social media, I’m good at promoting myself, I’m good at creating products of value and creating value for people. So what I’m really going to miss a lot, which is one of the things I’m really good at is running these time limited sales to an email list. So I’m really good at email marketing as well, but it’s not going to be so easy with this next business. So there’s definitely a lot of skills that I’m not going to be able to carry over because ecommerce and productized service are two different things. But I do think there’s a lot of overlap. Like I learned video editing, super random skill that I learned when we couldn’t even afford a video editor for for iChess so I was just editing all the videos and then I obviously out so we outsource that a long time ago. But now I’m starting this new business, bootstrapped from from from scratch, and I find myself doing all these Facebook ads, YouTube ads, videos, I just put a two-hour course together by myself. So the course production skills that I learned to do for other people, I’m now doing that on my own. So I do think there’s some overlap, but clearly I’m stepping into new ground. I think in an ideal world, I would buy another e commerce site that’s also doing downloads or digital products or streaming or something like that. But I just couldn’t find anything in that in that niche that fit me well. So as you go on the majority of the brokerage side It’s it’s like 60% Amazon FBA 30%…20-30% affiliate sites and then the other 10% are just standalone websites and things. So there’s not there wasn’t really a lot to choose from and the majority of these brokerages, even the big ones, they really only have like 50, 60 listings at any given time. It’s not like it’s not like going on eBay or Amazon. There’s not thousands or hundreds of thousands of listings, you have a little bit to choose from and that’s it and I didn’t see anything that really fit me that well, that I was really comfortable with. You know, I figured Amazon FBA. I don’t know anything about Amazon FBA. I’m going to get crushed.
Colton Moffitt 20:57 Right. Yeah.
Frederick Lansky 24:42 So, I figured let’s just give this points thing and try and so I’ve been doing it for about three months now. I’m up to just under 40 clients, I just did a deal with this company called Tropical MBA. They’re also very big podcast that run a private community of entreprenuers called The Dynamite Circle and they did a…they did a two week promotion for this thing called Dynamite Deal that they just got started. So it’s every two weeks, they’re doing a new promotion for another dynamite circles members…to the members of that community, but also to the podcast as well. So I already had 15 clients, I got another 20 or so from them and then over the last week or two, I’ve gotten another few on my own. So just from the referral network, things are going quite well. I’m actually starting to have concerns about scaling…people are hitting me up, I need to go, here I need to go there and I’m just..I’m doing…I’m just trying to catch a flight to Manila and they’re like “Hey, I really need to get this booked now”. So I got to start thinking about hiring people and getting the social media and SEO and and the YouTube channel and everything off the ground. So I think the model is viable and I think I’ll have a lot to learn about productized service…I just…So, the one problem I have is on the last business, I could always krutch on sales, right? If you’re having trouble you need to make some money just we got this video 50% off we have that video, for the more expensive ones we could even do 70% off right? It was like a 30 hour video, that’s typically 120 bucks will give it to you for 40 boom, people are acting like we’re giving it away will get hundreds I I can’t do that right for my new business. I can just say, my service that I’m selling now for 500 – but it’s going to go up in price to 6-700 – I’m going to give it to you for $100 for this week, go I can’t do that anymore.
Colton Moffitt 24:45 Right.
Frederick Lansky 25:53 So, I have to find more sustainable ways of growing the business rather than then krutching on on sales and promotions, which is it’s been my bread and bread and butter is is doing that so but I think you’d agree all online businesses have quite a bit of overlap in terms of general skill sets that you need.
Colton Moffitt 26:59 Right, and you can have multiple revenue streams and models within a single brand once you’ve got your core one going and established, so as you mentioned, you create a course that can be that can be delivered completely without any demands on your time. So that’s, you know, that’s a different angle. If somebody is listening now, and you know, a lot of the people who listen and watch this, they do have experience with at least buying or selling at least one online business, but there are also people listening that have quite done that yet and they are coming from the perspective of the freelancer or the agency or the consultant, who they really do ultimately trade their time for money and they’d like to figure out a way to to move away from that. If they’re going to look at ecommerce, digital product ecommerce or productized services, what would you say are like the main things that they should consider. Positive and negative.
Frederick Lansky 27:55 So there was a really interesting talk at a conference I saw. The guy’s name was Nathan Barry. So he had this concept of this stair step ladder from corporate, to freelancer, to productized service to eventually just straight out products right. So products that don’t require any customer service or any delivery by a person are obviously the most scalable, but they’re also the hardest to get to because they have to…they have to deliver tremendous value for people to be willing to open their wallets or you’d have to have a massive amount of people if it’s a lower price product right so it’s really hard to get there so I think this whole thing about…it’s so interesting, I just got chatting with just some random guy at the gym here today at this The Gramercy where I’m staying here in Manila and he was just overhearing the have a conversation. He just went from corporate to, over the last year shifting to doing what he was doing in corporate Just as freelance, and he said he’s making half the amount of money that he made in Miami, but he’s saving twice as much money. So he said, “Yeah, I was making $110,000 a year and in Miami” doing some kind of analytics, corporate analytics, and now he shifted to having his own. I guess it’s like a productized service that teaches you that gives you unlimited help with this analytic. It’s not Google Analytics, that he’s doing it some kind of dashboard and he’s living the life. So I would say, first thing, the corporate people, I think they want to scare you into thinking that if you leave them that your job isn’t marketable, right? They’re going to try to gas-lamp the shit out of you because they don’t want you to leave and they want you to feel like you need them, which maybe you do, but probably you don’t and then whatever you’re doing you like you can probably already do it as a freelancer as well. I actually know one case of a friend in Mexico and by the way, the salaries for corporate jobs in Mexico are terrible. You’re talking $2,000 a month if you’re lucky for 60-70 hour weeks, right where you can easily make double or triple and these are for people that are engineers are like, pretty educated people have very good marketable skills that they could just do on their own and I told him, “you could take what you’re doing as a freelancer and tell them that you’re just charging as a freelancer now per hour with 4 or 5x the rate of what they’re trying to pay you and I promise you they’re not going to leave” right? So they try to gas-light him and say “no, like you leave like this this skill is only required, this type of engineering skill is only required by corporate” and he left. Guess what, after he left, a month or two later, they came crawling with their tail between their legs saying “yeah, okay, we’ll pay it, we need you” and he kept the majority of his clients and now he’s working half the amount of time for double the amount of money, right? He went from 50 hours a week to 25 going from $2,000 a month to $4000. Right. So that’s a bit of an extreme case because in Mexico that just the salaries are much lower right in the US like they work you hard, but the salaries are also…the money’s quite good, right, you can easily make six figures or more working a corporate job, but beyond the money if you want your time back and your freedom back, whatever, whatever you’re already doing, you can probably already do it as a freelancer. So that’s the first place to start. Just get an account on Upwork, you know, just maybe start with the referral network. Try to start with friends start there and then once you kind of have an idea of what you’re doing as a freelancer, try to find a way to productize it with an unlimited model and so for those listeners who don’t know what a productized service is, it really just means taking whatever you’re doing, niching down to a very specific task or set of tasks that you’re going to offer unlimited for a certain amount of money a month, and the reason you want to do that is so you can scale easier. Right? So I think it was that book was The E-myth Revisited?
Colton Moffitt 32:10 Mhmm, yeah.
Frederick Lansky 32:10 I think that I think that was the one where it was his guy who had an agency and he was trying to be everything for everyone and he couldn’t expand because the expenses were crushing him of trying to have different designers for different types of work and things like that and then when he decided to just only focus on logos, and do a productized service just for logos, he was able to just completely streamline everything and scale it up.
Colton Moffitt 32:38 Yup.
Frederick Lansky 32:38 That’s basically the whole story of the book. So that’s the next place that you want to move to is productized service. Once that’s going well and you have a lot of clients then you can start thinking about making products such as courses or anything else, maybe physical products that you can sell and things like that and so that’s kind of the next step up because if you want to…well if you want to do physical products, you need to have a big investment and if you want to do courses and things like that and really sell them for a lot of money, you need the legitimacy first that comes from your brand. So I would say the stair step ladder is freelancer, productized service and then start thinking about ecommerce and products and things like that. But the main thing I hear from corporate…people in corporate who are scared to switch is they always say, “What am I going to sell? What am I going to sell?” like that is…like…it’s not as hard of a problem as people think it is, like whatever you’re doing now, whatever skill you have now, just sell it, sell it in the open market and start there and then pivot if you need to. But the important thing is, is just to start, right? So if you are if you’re in a position where you can quit that job because you have a family or other responsibilities or a mortgage, and it’s just too risky, then you can start on the side, just start something on the side, doing that and then just try to grow that until you’re able to quit your job and maybe this is a bit of bias because of kind of the network that I put myself around. But it seems like the majority of people who do that end up having success much sooner than they expected. They figured within five years they’d be able to quit their job and within one year, they’re already making enough money to quit and so for a lot of us like you and me, we’re both here in the Philippines right now I live in Mexico. Another thing to consider if you’re able to move abroad, either maybe you’re single or you have a family that’s able to relocate or you’re able, for whatever reason to move abroad or just live as a digital nomad. Your expenses can drop tremendously. That’s what I was talking about with this guy at the gym. He said he was making $110K a year in Miami, but he wasn’t dead because he had a mortgage, he had a car and all the expenses of having a car and not to mention that one-ten, probably $30,000 or more is going to taxes,
Colton Moffitt 33:02 Yeah.
Frederick Lansky 34:19 When you live abroad, you pay much lower taxes through for various tax breaks I gave you for living abroad and you’re saving…the two biggest places that you’re going to save money are taxes and healthcare, especially for US listeners.
My health care is about 90% cheaper in Mexico, maybe even more like 95% cheaper than it would be in the US and I pay very low taxes as well all legal, don’t worry. But what I’m saying is you’re thinking, Oh, I’m going to go from $150,000 a year in San Francisco or Manhattan. If you make 40,000 a year in Playa Del Carmen, Mexico or Chiang Mai, Thailand, you’re gonna have a way better lifestyle anyways, and you’re going to be able to save more money. So don’t worry about who’s making the money. Well, who really cares, right? I mean, what what kind of lifestyle do you want, right? So if you’re able to and you don’t have the responsibilities, a lot of people come here to Southeast Asia to do exactly that. Unfortunately, over the last three, four years, Bangkok and Manila and Saigon are not quite as cheap as they used to be. But you can still go to Chiang Mai, Thailand…Chiang Mai, Thailand is famous for people going to that city and doing exactly just that, right? They don’t, they don’t want to do the slow switch from corporate, they can’t take it anymore and they want to go all in and live as cheaply as possible while they spend a year, year and a half getting their next business off the ground and the great thing is, you can go to a place like that, have a huge network of people doing exactly the same thing, and people who’ve had success, and if you needed to, I mean, you could go down to $1,000 a month, if you really wanted to, I mean, you could you could get a place and a two or three bedroom $300 a month in Chiang Mai, you could still have all the amenities of a western city and then spend the other you know another two $300 a month on food and you know, two or 300 left for miscellaneous items. I mean, it would be a bit of an adjustment you can go that cheap, right so if you needed to you could spend $20,000 and that could stretch you out in Thailand for a year and a half while you get your next, your next venture off the ground. So that’s Plan B, if you don’t like my first option, which is the slowly transition, you can just, you know, save up for a year. I mean, if you can save up a hundred grand from a corporate job, and that would give you like, three, four years of runway, if you are outside of the US, I think in the US, it’s like maybe one year till that money disappears.
Colton Moffitt 37:28 Yeah.
Frederick Lansky 37:29 …and an out abroad in Mexico or Brazil or Thailand or Philippines that could easily last you three, four years, even if you’re going out and eating out and living a pretty comfortable lifestyle.
Colton Moffitt 37:39 Yeah, well as they say as a stack of cash that’s not being added to functions a lot like a roll of toilet paper, you have plenty at the beginning and then starts to get stretched a little thin. So…
Frederick Lansky 37:51 Yeah, I’ve been having that issue myself since I haven’t had any steady income since January. You know, it’s a few thousand here and there from the Points Panda but..
Colton Moffitt 37:59 Yeah.
Frederick Lansky 38:00 Yeah I know, it disappears faster than you expect.
Colton Moffitt 38:04 It does and the nice thing is though, with a productized service business, when you do get it to a point, as you mentioned with…you get your marketing systems in place, you get your service delivery in place, start outsourcing or hiring aspects of it. Eventually you have a business that you can sell, versus a freelancer type of thing. Or, we’ve been talking to a lot of people who are doing more influencer type of thing. It’s so heavily dependent on their personal brand. They need to get it to that next step before they can really exit. So it’s it’s a process, but it certainly will take you there if you start to think about it, and put those systems in place.
Frederick Lansky 38:39 For sure. Yes, honestly productized services, they can be pretty hard to sell, I think especially if the service is based on the know-how and/or the image of the owner. So I had a friend who does English classes and she kind of has that problem. So she does like English courses, but it’s all based on her image.
Colton Moffitt 39:04 Right.
Frederick Lansky 39:04 So, I mean, if you’re going to buy it, it’s like, What…what happens with that person? You know, it’s like the whole businesses is based around it and I think the best types of companies to scale, or to sell, I should say, are probably ecommerce, because they don’t require the know how of a specific person and they don’t have the image of a specific person and even if that person is kind of the mascot of the business, like yeah, you can…the business can survive without it when you’re thinking about kind of an influencer type model or a business that’s based on the legitimacy of that specific person. Like right now, that’s exactly what I’m doing right? So you don’t know me, my website sucks. My Instagram has literally 32 followers, my business Instagram, like, none of that, like I don’t have any of that credibility right now. But like, people know me, as somebody who does really well with with points bookings, like people just know,
Colton Moffitt 40:06 Right.
Frederick Lansky 40:07 On my referral network, right? So I need that branding in the beginning, leveraging your image and what people know you for in the beginning, I think is a really powerful tool, right? I mean, I know the whole influence or the whole thing on Instagram, it’s pretty easy to make fun of it really is powerful those so I think in the beginning, you know, I’ve been struggling with this, I’m like, wow, this is this is finally it. Like, I’m gonna have to start getting in front of the camera and typing and getting my face out everywhere all the time because to, to do…to start off without leveraging my referral network and my branding and my personal image that I’ve built up over all these years and start points kind of completely from backgrounds where it’s not me, would take so much more time and so much more effort, and I would lose all that credibility, but I think in the beginning, it’s a very powerful tool, but I guess Domain Magnate, a lot of listeners are thinking about selling their business. I think it’s something that you want to start thinking about shifting away from two or three years in, because if you’re thinking about selling, they’re not going to the buyers not going to be happy seeing that, right. So actually, this is a great example you brought up so we kind of had that problem for a while at iChess, actually, at the time was called online chess lessons where my, my former business partner, he was the image of the business on the YouTube channel, on Facebook, on the articles, his face was everywhere. People love them. And so by three or four years in, he couldn’t do the videos anymore and frankly, he just didn’t want to be the face and so when we shifted, there was quite some pushback. You know, people were pretty annoyed and upset because they didn’t like these new people that we’re bringing on as much as Will but we push through it and I think it’s worth it in the end. The juice is definitely worth the squeeze to start using your your image and your your personal network and our personal branding in the beginning to get some leverage right if I was basing Points Panda on someone else’s know how it would it would be a tougher sell to my referral network they’re like “oh well who’s doing the bookings? Who’s doing the courses? Who’s doing all this stuff?”, “Oh, some guy I know”. It’s a little harder plus, who can you really depend on to constantly do all the social media posts to do the YouTube videos to do the courses it’s, it’s going to be you anyways unless you want to roll the dice and, and hope that someone else can do it as as good as you until you really have the money going. But you should always have an exit strategy on that right? You don’t…once once your business is doing, let’s say over $100,000 a year revenue, like at that point that you have some resources to play around with, you know, at least a few thousand dollars a month, then you can start pulling away and hiring other people to handle that handle that for you. So eventually when it comes time to sell, your faces and really going to be there anymore, and you can you can transition out.
Colton Moffitt 43:10 Gotcha. So you have a good idea of how you approach that. So I guess what you’re saying is you’re not going to do what some companies are doing and just set up an API integration and a chatbot and renaming PointsPanda.ai no you’re really doing it as an individual human being has to put the time in for now. But that allows you to build a process that you know works well.
Frederick Lansky 43:33 Yeah, it’s funny you bring that up. A competitor of mine actually tried to do just that with points booking credit card referrals, and I think they spent hundreds of thousands of dollars trying to set up this AI bot and it failed.
Colton Moffitt 43:49 That’s rough.
Frederick Lansky 43:49 It would’ve been better to just train a VA. Would’ve been a hundred-thousand dollars cheaper.
Colton Moffitt 43:56 That’s the thing about the kind of product I service thing is that you don’t actually have to automate all of it doesn’t doesn’t need to be automated, it just does not be you doing it when it comes time to sell. So that’s something that people are kind of aware of its service businesses have a hard time selling for high multiples. But if you get them to a point where it does not require a lot of custom or ad hoc changes, when you really do productize it and you remove the founders personality and know-how, from that process, then you can sell it and you can actually get a much better multiple, you might even be able to get, you know 100% more.
Frederick Lansky 44:35 Yeah, I think the takeaway of this last part of the conversation is once you go to productized service. Leverage your face, leverage your name, definitely splatter your face all over everywhere you can because that’s all people know because you’re going to be starting with your referral network. People know who you are amongst your your friends, your family, your followers on Facebook and Instagram and like that. So you would be stupid not to leverage that, especially if you’re the one who’s going to be doing the work anyways, which in the beginning you are. But you always want to think about getting out of there, the sooner the better. Because otherwise you’re stuck being the face and even if you’re not actually doing the work anymore, it’s going to be one more thing that people are going to use to justify lower multiple when it comes time to sell. They’re going to say, “Oh, well, what about the intangible property that it’s your face everywhere and that we can’t really use use your face anymore? How’s that going in our business?” and obviously, from a buyer’s perspective, it’s…they’re going to try to use that to you know, to push you down, maybe even more than justified just as a point of leverage. So you want to you want to start…and the transition is not easy want to do that? There’s going to be pushback, but the pushback is not usually that bad and usually within a few months or a year, it’s it’s over and things continue nicely. So yeah, first year or two, do it, afterwards kind of pull back a little bit and start giving it a more company image rather than your personal brand image.
Colton Moffitt 46:13 That makes sense. And you know, speaking of the brand and the new company Points Panda, how can people get in contact with you if they want to hassle you to sort out their points or if they want to follow, and participate, or anything like.
Frederick Lansky 46:26 So, I the difference between my competitors and I is they typically do one off bookings. So you have a bunch of points and you want to use it to book a business class flight somewhere, so you contact them and they’ll find you the best deal. Typically they charge around 150 to $250 for one booking, sometimes as high as 300. If it’s a really complex booking, but I’m running an unlimited model, because what I’ve realized when moving into this industry is that it’s only catering to people who already know about points and already have a lot of points and just want to use them, most of those people know how to find the best deals, they just don’t have the time because it’s much more complicated than booking a cash ticket, you can just go on Expedia and just see the best deal, right, you gotta check all different kinds of stuff, and you have to know all the alliances. I did a two hour course that I’m going to be selling for $1. But I can post it just for free for the domain magnate people that kind of goes over all the basics of that. So what I’m doing is I’m offering unlimited consulting on the credit card side of things, just just getting as many points as possible from credit card signup bonuses is the linchpin strategy as well as personal and business spending, and then maximize the amount of airline points you can get as well. Like a lot of people are staying at hotels and car rentals, and they didn’t even know they could get airline points from that. So just trying to accumulate as many of those things points as possible and then when it comes time to book to book the flight for them, book the awards fight and find them the best deal. So the idea is not just, hey, just hit me up when you need to get an award fight booked. I’m going to help…my main target right now is two different kinds of people. The first one, the one I really, it’s beyond the money for me. The reason I want to do that is because I want to help people that didn’t know about all these credit card signup bonuses and how you can use them to get insanely great award deals by transferring points in right? So help those people out and then just be their concierge for an entire year watching them accumulate the points and then getting them ready to spend the points as well. So basically the idea is if you sign up, you’ll have an idea of what your dream flight is going to be, let’s say business class to Dubai for two people next year for, I don’t know, whatever, maybe somebody’s honeymoon, so I’m going to tell you, okay, so you need to sign up for these cards and then, okay, let’s check your personal spend, maybe there’s a lot of bonus categories like people are eating out, but they’re using a…they’re not using the right kind of credit card, that’s going to give them 3 or 4x multiples as well and so those those points out over time, and making sure that they have the right amount of points as well. So with my competitors’ model, if you don’t know what kind of points you need to get based on the redemption that you want to do a year down the road, when it when the time comes, you might find that you don’t have enough points or you don’t have the right type of points, or maybe you can book it, but it would have been a lot less points if you tried to accumulate a different kind of points right? So we need to come up with a strategy as well. Yeah, I mean, this does seem like a lot of work. But you gotta remember these these tickets in business class to go across to Europe or to Asia round trip can easily be 5, $6,000 round trip.
Colton Moffitt 50:06 Right.
Frederick Lansky 50:06 Maybe sometimes a little less, maybe three or $4,000 that you find a good deal. So yeah, oh, that seems like a lot of work to fly to be able to do by business class. It’s like, well, it’s a $10,000 itinerary for two people in cash, if this is what you want to do then.
Colton Moffitt 50:22 Right.
Frederick Lansky 50:23 In that perspective, the $500 I’m charging for this as of the time of this video, or podcast. It’s not that bad in comparison to your hands. So that’s what I’m doing. It’s an unlimited model. Another reason I wanted to do the unlimited model is because a lot of times with the individual bookings people will contact you and they’ll say, “Oh, I have all these types of points” and then you can find them a good deal and then the company they get kind of sour grapes like well, you know, we couldn’t find you the deal, but we still need to be compensated for our time and then the clients like “well, screw you, you didn’t find me the fly right off to pay you anything” and some of them have a, you know, “we don’t find you a flight we don’t, we don’t charge you” policy. But for the most part, I think it just, I don’t know, I just feel the unlimited is better. So people can just feel free to contact me whenever it is through the year and say, Hey, does it make sense to book this son in a points? Or should I just, you know, pay for the cash, and I can look it up and decide for them and then if we book it, and we can’t find anything, there’s no sour grapes on on the client side, but really on both sides. So that’s what I’m doing right now and it’s going quite well and I think the other the other type of people that I’m kind of looking for as well are people that they kind of know the game already, they’re earning a lot of points, especially from business spends, but they just don’t have the time to do these bookings and they want to contact me and they just want to do an unlimited model where they can just feel free to contact me whenever they want. So I think it’s a good model and I might eventually switch to individual bookings as an option as well. But I’m really looking to help people that don’t know that much about this game but are Americans and have a decent credit score and can open up these cards but they just don’t know.
Frankly just that they just don’t know what they’re doing right? I know so many people for example, that they just use Delta sky miles card, instead of like a Chase Sapphire Reserve, or an Amex Gold that’s going to give them 3 or 4x on travel spend and restaurant spend and those points are worth almost double the amount of sky miles are worth. So for restaurant spend they’re really only earning one eighth on restaurant or travel spend that they would be by just swiping a different kind of card in terms of value, right, they’d be earning eight times more value, they just don’t know and so on on a lot of these point blogs, it’s just kind of intimidating. There’s so much information out there. These points blogs, their information is quite biased because they’re just always pushing whatever credit cards have the best signup bonuses. So a lot of the information is good, but it’s not. It’s not as good as having somebody with you that’s looking out for your best interest, not just you know, or you just don’t have the time…
Colton Moffitt 52:17 Right.
Frederick Lansky 53:20 …as well. So I just handled both sides of the equation, getting the points and then redeeming the points. So the the high level respect is what’s what’s in it for me? You sign up, I tell you what cards you need to sign up for where you need to put your spends based on what you’re telling me the redemption is next year and then you get to five business and first class, you know, across to Europe or to Asia for pennies on the dollar and then once you kind of learn the game, we’ll just do that once a year. So I feel like everyone has that once a year flight that’s really really long somewhere.
Colton Moffitt 53:56 Yeah, yeah.
Frederick Lansky 53:57 Like another continent. It’s just that one flight like that’s what I really want to help my clients with is making sure that one at a bare minimum, even if they don’t have crazy amount of business or personal spend, just to make sure for that one long slide a year that I can I can get you in that seat without you paying 5 or $6,000.
Colton Moffitt 54:16 Gotcha. Well, that’s cool. Well, I really appreciate you taking the time to explain that and talking to us about what you went through to kind of dissolve that partnership or to exit in a way that was still, you know, maintaining the relationship as well as possible and how did that effectively then also appreciate you explaining these kinds of things about the points and, you know, if you’re listening or watching this, and you are doing a lot in terms of inventory purchases, commerce, or do an ad spend or have a lot of content expenses, traveling a lot? Absolutely. You know, go check it out. It’s pointspanda.com. Thank you again for joining us Freddy and we’ll talk to you soon.
Frederick Lansky 54:54 Yeah, it’s been a pleasure and thanks for having me on.
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