Are you a franchisor and wondered how you can be successful in working with franchise brokers? Or maybe you are thinking about franchising and like the idea of franchise brokers, but don’t know where to How do you develop, decide, execute a new idea, new business model, or new product? Do you have a clearly defined process or is it more of a ‘gut’ feeling?
Our guest today is Lior Weinstein, and he shares with us some mental models and frameworks to help you take control of your implementing new business solutions.
TODAY’S WIN-WIN:
“Entrepreneurs don’t go crazy because of their goals, but because of their deadlines.”
LINKS FROM THE EPISODE:
- You can visit our guest’s website at:
- Attend our Franchise Sales Training Workshop:
- https://bigskyfranchiseteam.com/franchisesalestraining/
- If you are ready to franchise your business or take it to the next level: CLICK HERE.
- Connect with our guest on social:
- https://www.linkedin.com/in/liorweinstein/
- https://www.linkedin.com/company/ctox-fractional-cto/
- You can here Tom’s interview on his podcast: https://podcasts.apple.com/us/podcast/path-2-freedom/id1505372686
ABOUT OUR GUEST:
Lior is a trailblazing tech visionary and serial entrepreneur, whose latest venture CTOx helps 8 and 9-figure CEOs transition to fractional leadership roles so they can gain better control over their time, money, happiness, and purpose while continuing to drive positive business impact. Some of the companies he has founded include: Poplar, Fortunian, Mapp, and Ginipic.
ABOUT BIG SKY FRANCHISE TEAM:
This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/.
The information provided in this podcast is for informational and educational purposes only and should not be considered financial, legal, or professional advice. Always consult with a qualified professional before making any business decisions. The views and opinions expressed by guests are their own and do not necessarily reflect those of the host, Big Sky Franchise Team, or our affiliates. Additionally, this podcast may feature sponsors or advertisers, but any mention of products or services does not constitute an endorsement. Please do your own research before making any purchasing or business decisions.
TRANSCRIPT:
Dr. Tom DuFore (00:01):
Welcome to the Multiply Your Success podcast, where each week we help growth-minded entrepreneurs and franchise leaders take the next step in their expansion journey. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team. And as we open today, I’m wondering how you develop, decide, and execute a new idea or a new business model or maybe a new product or service you’re offering.
(00:24):
Do you have a clearly defined process or is it more of a gut feeling or maybe somewhere in the middle? Well, our guest today is Lior Weinstein, and he shares with us some mental models and frameworks to help you take control of implementing your new business solutions. Now, Lior is a trailblazing tech visionary and serial entrepreneur whose latest venture, CTOx, helps eight and nine-figure CEOs transition to fractional leadership roles so they can gain better control over their time, money, happiness, and purpose, while continuing to drive positive business impact. You’re going to love this interview, so let’s go ahead and jump right into it.
Lior Weinstein (01:06):
Lior Weinstein and I’m the CEO and founder of CTOx.
Dr. Tom DuFore (01:11):
Well, your professional background and expertise is something that’s really interesting, especially when we start thinking about chief technology officer and this whole idea. And one thing that just to lead with here as a starting question for us is just talking about this blueprint for inevitable growth and these different frameworks and processes that empower businesses to achieve scalable growth and predictable growth. I’d love just to kind of start there as a talking point.
Lior Weinstein (01:41):
I’ve been a fractional executive of different kinds for a few years. Actually, professionally, I am half-half. I’m either leading growth and marketing and sales, or I’m leading technology, which is a bit of an oddball in my industry. And a few years ago, I used to run a performance-mostly agency. So we did tech and marketing. We actually used to work with a lot of franchisees and franchisors, franchisees and franchisors. The business model was very simple. We kind of went into a business and we said, “Hey, give us a flat fee retainer. That could be 10,000 a month, 15,000, 20,000 but we’ll take on 100% of all the bits and bytes. It doesn’t matter. If it’s a website, if it’s your printer, if it’s your Wi-Fi, it doesn’t matter. If it’s digital, we’ll own it, but give us uncapped commission on net new revenue we bring to the business.”
(02:28):
And so that model kind of brought up a few questions, which you’re like, “How much commission?” I’m like, “I don’t know. You tell me because some business models can support 20%, some business model can support 5.” And then they asked me what does net new mean. I’m like, “Well, you tell. Me what’s the baseline? I are you expecting normally 10% growth a year?” I’m like, “Great. First 10% are yours, I get nothing. But anything over 10%, then we get the commission rate, whatever that is.” And that agency grew very rapidly, very successfully to well over mid and high six figures in the first year a month mostly on commissions.
(03:04):
And in that model, what happened, what differentiated us against other agencies, marketers, technologists, is one, I was willing to basically tie in most of our compensation to an actual net increase in benefit to the company. That could be revenue, profit, enterprise value, whatever that is. And the second thing, I never made promises on results and output. I told my clients, “I can’t guarantee results, I can’t guarantee output. There’s just so many variables, but here’s what I can guarantee. I can guarantee input or effort and process. And if we put the right people doing the right things in the right way, we’ll just end up with all the right things.” So I told them we’re going to create an environment where growth is inevitable. And that means we’re starting something. So we lay it out a plan for the quarter.
(03:54):
And this is something I learned from leading technology teams. So we have a team. And usually a technology team, just like any kind of sports team. So you have the engineers, people that actually build a code. You have the coordinators, you have the product people, the people that imagine what the features should be like. You have the scrum masters, the people that make sure that the tasks are passing around correctly and so on.
(04:16):
So I told them, that’s how we’re going to manage everything. Even though it’s marketing, we’re going to do the same thing. We’re going to establish a team. Some people are going to be the creatives, they’re going to create things. Some people are going to be the analytical, the analysts, the numbers. Some people are just going to be the managers and some people are going to make sure that all the humans feel supported in the right way and so on. But we’re going to recognize that all team have capacities. And let’s say we have 20 hours from this person, 40 hours from that person and so on, maybe contractors, maybe full-timers. And we’re going to come up with ideas. And the ideas are going to fulfill one of three things for the business; a project or an initiative is either going to de-risk the business. And there are many forms of risk. You can have market risk, you can have key man risk. John is the guy that knows all the spreadsheets and the passwords. And if John is out, we’re not going to be able to do much of anything.
(05:08):
Maybe it’s operational risks, maybe it’s systems risks. We have one website, one server. Something goes down, we can’t process payments. Maybe it’s training. If somebody leaves, we don’t know how to onboard people, different forms of risks.
(05:22):
The next one is unclog. So maybe we’re trying to do something hard, we actually have more demand than ability to fulfill it, and we need to increase bandwidth on fulfillment. That’s unclog.
(05:35):
And last thing is scale. It’s like, okay, operationally we’re good. All the holes in the boat are plugged, everything is running smoothly. We can’t make this more efficient in how it is, but we just want to do more. We don’t want to go faster, we want to go farther. And in that model where you either de-risk the business, unclog it or scale, we create what we call a mini impact filter. This is something I learned from Dan Sullivan from Strategic Coach, which is to say, when we describe a project, we’re trying to identify what’s the impact of the project. So we kind of describe, we give it a name. It’s amazing to me how many businesses, projects that don’t have names. Like, what are we doing? Maybe it’s technical, maybe we’re moving to the cloud. But maybe it’s marketing. We’re establishing a new Facebook campaign. So we give it a name, we describe what it is, give it a description. We describe what’s the ideal outcome.
(06:28):
So let’s assume the project was successful, what’s the ideal outcome? So part of ideal outcome was, well, we launched this campaign in four weeks, or we finished this tech product in eight weeks and it costs us 20 grand. And the end of it, all of our field technicians can now do XYZ or we got 20 new leads a week, and so on and so forth. So we kind of described the budget, the circumstances, the people. That’s a part of ideal outcome because that’s what you’re trying to describe an ideal.
(06:55):
Then you describe the best result. So, well, if this project is successful, what’s the best result that happens to the business because of it? And some of that correlates to ideal outcome. And then we describe the worst result if we don’t do anything. So think about it, we’re ideating a bunch of projects. So part of the entrepreneurial challenge is to differentiate between today problems and tomorrow problems or today priorities and tomorrow priorities.
(07:19):
So it’s very useful to describe, well, what’s the worst case scenario? Let’s say we just do nothing. Not if we execute poorly, just if we don’t do anything, if we don’t do this campaign, if we don’t do this website, whatever it is, what’s the worst result? So we describe it. And once all those things are figured out, then we’re basically describing, “Okay, now we have pretty good confidence. We want to do this project one way or another, or maybe not. What are the resources we need to execute? What are the people, systems, resources that need to be there? How long do we think it’s going to take?” And maybe we can go super granular and just say, “Yeah, 20 hours.” Or maybe it’s like, “Well, we think we can do it within a quarter, 12 weeks. We’re going to start it in Q1. We’re going to finish in Q1. It’s going to take eight weeks or 10 weeks. Not sure, but these are the resources we need.”
(08:04):
So the output of that kind of strategy is that all these lists of projects right between de-risk, unclog and scale. And you basically can prioritize them based on impact because if something is not very impactful, if something doesn’t have a compelling best result, and the worst case scenario, the worst result is just not very interesting, then we prioritize on our top projects. And then based on the resources, we just know our bandwidth. It’s nice to have ideas. Let’s say we came up with 30 ideas. But if we have four people that can execute, or we have 10 grand a month, we’re going to do our best with 10 grand a month ordered or sorted by impact, an ideal outcome. And then we have that and then we have a pretty good clarity on what needs to happen in this quarter.
(08:51):
And when it’s well planned, then any single project has just enough to be effective. So in engineering, there’s something we call scope creep. You see there’s a lot of creative projects. You want to do this website or this app and you end up just overloading with features and you thought you’re going to launch in eight weeks, you end up launching in six months and you’re 500% over budget. So I took that same approach both for marketing and sales and technology and developed that framework of de-risk, unclog, scale, create an environment where growth is inevitable. Do your quarterly planning based on impact, constrained by resources. Choose your top projects based on your bandwidth. That’s what’s nice about reality. It has a limit. These atoms need to go somewhere.
(09:38):
And then the culture is an experimental culture, meaning if we think Facebook campaign was the right thing to do, the ideal outcome or the best result tells us that our cost per lead would’ve been X. If we didn’t get that, then we stop. We don’t do it again next time. If we did get that, then the next project is like, we want to double the spend on Facebook, or we want to add more features to the app or want to add AI now, or whatever that was.
(10:05):
So creating those frameworks really because I had to deal with both marketing and sales challenges and technology challenges really created this both a way to communicate around projects that’s focused on outcome and not on effort. So not, “Oh, it’s going to take us 8,000 or $80,000 and it’s going to take us two months. Forget about that. Why are we even doing this?” That’s the ideal outcome kind of conversation.
(10:30):
And then just be honest about the resources. I think a lot of entrepreneurs, we come with a sense of urgency that’s very innate. We want things done yesterday and we constantly think like, “Oh, somebody must be able to do this in six weeks.” And by mapping it that way, in context of all the other projects and all the other ideas you have really lets you be objective about it and say, “Okay. Well, I guess if we want to do more, we need to spend more, but otherwise let’s just be okay with all this outcome, with all this business impact we’re trying to create.”
Dr. Tom DuFore (11:02):
Having a realistic understanding about available resources as they pursue to go after and accomplishing these goals that you set out, it made me think of just the clients we help serve. And when we help them franchise their business, they turn into a franchisor and they go to market. And oftentimes they put this expectation on themselves that’s just unrealistic based on the resources available, financial resources or human resources, where in their mind they think, “Oh, I should have sold a hundred franchises in my first year.” Which by the way is not realistic for just about any franchise. That’s the exception, not the norm that you go through it. I think that is great advice. I love how you approach it that way.
(11:41):
And just to continue down that conversation, and you talk about some of these various models and frameworks and such, how do you see owners, business leaders, executives, how can they maybe simplify some of these challenges that they face in a day-to-day or month-to-month, year-to-year context and apply some of these mental models, frameworks and things to help remove maybe some of these barriers, mental barriers in many cases, to help them drive impact?
Lior Weinstein (12:11):
Even based on what you said, one of my favorite mental models is entrepreneurs don’t go crazy because of their goals, but because of their deadlines. And if you think about how true that is, we think about a challenge and just like you said, a hundred locations, well, what if it was 50? If your emotional status, anxiety, that’s a lot of entrepreneurialism is managing our emotions for the most part and battling reality. We want to manipulate reality more faster than it wants to be manipulated. And if the goal was 50 and you suddenly be like, “Oh, okay. I’m okay with this.” And then the number suddenly changes to 150 and you’re like, “Whoa, I’m super anxious and I don’t know if I can do it” and so on.
(12:51):
And balancing between that anxiety, which puts you in kind of a negative space, puts you… And certainly I’m also a father of kids, of young kids and we travel a lot. It’s very important to me to find that harmony between business and family life and personal life. Versus a goal, the other side of the balance is excitement. So if I want to franchise and I’m like, “I’m going to go through all this process and I’m going to have two locations in two years,” well, it might not be exciting enough for you to put in that energy versus saying 200 in two years, okay, super exciting, but the anxiety meter just shoots up.
(13:30):
And there’s also just reality. Can you do it? Is it relevant? Do you have the resources? Is it reasonable? And I think Bill Gates, many years ago, I heard him say about people overestimate what they can do in one year and underestimate what they can do in 10. And certainly for me coming in from technology in most of my career, thinking about compounding as a big deal, when you move 30 steps into Savannah, you move 30 yards ahead. When you do 30 compounded step, that could be a billion miles. So very, very different.
(14:04):
I think, one, part of adopting is finding mental models just like this. If this is the first time you, listeners, hear about entrepreneurs don’t go crazy because of their goals, but because of their deadlines, now you have it. You have a mental model, you have an app. And you can look and when to use it when you go crazy or when you think your staff goes crazy or when you think your customers are going crazy or whatever it is. I use it all the time. If we’re in a sales environment or in a customer satisfaction, you realize the customer is just being super antsy because their expectation was to get a result within seven days. So let’s solve it now and let’s solve it also as a process.
(14:45):
So the other thing is thinking, how can you solve things once? I think a lot of entrepreneurs… So here’s another mental model. So usually when I go into companies as a fractional CTO myself or as a fractional chief revenue or chief growth, what normally happens is that entrepreneurs get to a certain stage because they’re really good. And they’re really good mostly at everything that their business is about. And they’re certainly really great at sales. That’s probably one of the most frustrating things to get somebody else to do, sales. And I get into a team and I usually let them kind of run for a few weeks or a few months even without changing any of their processes because I want to observe.
(15:24):
And usually what happens after a quarter, we get into an executive meeting and I put up this slide and I show them all of the firefights that they’ve been a part of in the last quarter.
(15:35):
And that could be just the CEO or that could be an executive team, and that’s the 8:00 P.M. ring the bell, call everybody because of something small. That could be the emergency meeting at 12:30, whatever that is. That could be customer-driven, system-driven, an email came up, a review came up, all sorts of triggers. I recorded and I showed them. And I told them, “Your guys are amazing firefighters.” And in 99% of the case, that is a true statement. I’m not just appeasing them. “You come in hot, you have the tools, you do it, you commit.” They do all the things. I told them, “But I’m here to install sprinkler systems.” And what hits most entrepreneurs to hit another mental model is that if they find themselves firefighting every week, the big face shift for them happens when they realize they’re probably the arsonist in their business.
(16:31):
And I think all entrepreneurs, what’s nice about mental model, it’s like a formula. It’s a single statement you need to keep and then it can apply to many, many situations. I think finding the people that create mental models that are good for you, just even just Googling mental models and seeing different things. And you have people knowing Occam’s razor, right? The simplest solution, the simplest explanation usually is the right explanation. So you can either just vacuum them and there’s a lot of them or find stuff like this that apply to a situation.
(17:05):
Generally in a business, even in life, if I see something repeats, I’m looking for the mental model, I’m looking for the scaffolding. How can this apply so I know what to do next time so I’m not improvising my behavior, but I’m actually reading through some kind of a prescription? And maybe it’s a prescription that I created because it’s custom and unique to the situation in the company, and maybe it’s somebody already figured this out and I get to use their lessons and not their scars. So yeah, I’m a big proponent of it because just like a picture is worth a thousand words, a single mental model can help you deal with a thousand situations.
Dr. Tom DuFore (17:44):
If someone’s interested in connecting with you, learning more about you, how can they get in touch?
Lior Weinstein (17:49):
LinkedIn, Lior Weinstein. I have my picture there with the gray hair, smiling. Follow me, send a message. Always love to help and meet new entrepreneurs.
Dr. Tom DuFore (17:59):
Perfect. Perfect. Well, this is a great time in the show, Lior, where we make a transition and we ask every guest the same four questions before they go. And the first question is, have you had a miss or two on your journey and something you learned from it?
Lior Weinstein (18:12):
Plenty of misses. Plenty of misses. My most entertaining miss though, I had the fortune to build a few businesses, sell them, going to be successful there. And then I had this crazy thought because of a conversation with a good friend of my wife and mine to buy a spa in Atlanta, which is our home base, Atlanta, Georgia. That was a good six-figure loss in a year of my life that I realized offline businesses are not for Lior Weinstein.
(18:42):
My intuition is just off and all fronts. I learned a ton about the dynamic of local businesses though, which served me very well years later or multiple times. Just the fact it’s a physical space. People come in, there’s smells and foot traffic and parking and employees that need to come and the doors that need to be locked and cash registers that need to… Just all these things that I never thought about before, and luckily for me, didn’t have to think about since. But yeah, that was hubris. I’m like, “Oh, I can make anything successful.” So no, now I know I can’t. But that was definitely one of my most entertaining misses.
Dr. Tom DuFore (19:23):
Oh, thank you for sharing. Well, let’s look on the other side. Let’s talk about a make or a highlight.
Lior Weinstein (19:28):
Well, one of the things I have… Two things I was proud of earlier on in my career. One is I started one of the first, if not the first, mobile app development company in Israel. And that was just like when Steve Jobs announced the App Store. And in that company, I got the opportunity to create a mobile app that’s still very successful called Baby First TV, which was an app for video for babies. In retrospect, now that I am a dad, I probably… I don’t support babies watching iPhones and iPads, but it won very beautiful awards and it was like big UX innovation.
(20:05):
And from that company we spun off a company called Epoxy, which we ended up selling in late 2014. It grew to be the second-largest mobile marketing automation company in the world. So when we sold, we had about a billion and a half monthly devices we’re managing, fingerprinted to 450 million people. And all of that just came from tinkering with different mobile apps and having some good insights and being at the right place at the right time. And it was kind of beautiful to see it from day one all the way to the exit.
Dr. Tom DuFore (20:36):
Let’s talk about a multiplier. The name of our shows Multiply Your Success. Have you used a multiplier to grow yourself personally, professionally, or any of the organizations you’ve run?
Lior Weinstein (20:46):
You know what? In recent year, I would say two of my biggest multipliers, one is an entrepreneur group called Strategic Coach. I’m a part of it. Dan Sullivan that I mentioned earlier is the founder of that and my coach as well in the program. And being able to every three months just… I’m [inaudible 00:21:07] is a client, but I don’t get referral bonuses for this. Being able every 12 weeks to go with a peer of entrepreneurs and think and work on your business and not in your business has been dramatic. Certainly not just 10X my results, but probably 100X my vision. So that’s huge.
(21:23):
And the other is one of Dan’s actually favorite mental model. He wrote a book on it that I recommend called Who Not How. The basic model is when entrepreneurs think about a problem, we immediately think about all the ways to solve it, the A to Z. The problem is we don’t want to actually do any of these things. So the better way to think about how to solve a problem is think who’s the best person to solve it and not how to solve it. And that’s just single mental model still allows me and allows me to accelerate pretty much any venture I get in just by immediately think who’s the best person to do this. And I never try that person to be me. And that really what gives me scale and opportunity and growth.
Dr. Tom DuFore (22:01):
And the final question we ask every guest is, what does success mean to you?
Lior Weinstein (22:06):
You know what? A few years ago I put on my LinkedIn that my stated life purpose is to dissolve people’s self… Well, I’ll change. The current one, the latest one is dissolve people’s self-limiting beliefs so they can be creative and pursue their passions. I realized that I feel successful with the more love and support that I give to my business partners, to my employees, to my clients, and that’s what I try to do every day.
Dr. Tom DuFore (22:33):
As we bring this to a close, Lior, is there anything you were hoping to share or get across that you haven’t had a chance to yet?
Lior Weinstein (22:39):
Right now, we’re on this wave certainly on technology because of AI, where the world is shifting back from buy to build. That’s how technology was in the early ’90s and early 2000s. People wanted technology, so they hired engineers that built it themselves. Then the SaaS revolution software-as-a-service came up with Salesforce and those companies. And instead of spending millions of dollars building something, you just paid 50 bucks a month or 100 bucks a month, and you got access to this huge code base. And now with AI, everything is shifting back.
(23:08):
That’s why I’m really glad to be leading CTOx. We’re basically a group of fractional CTOs. So I teach CTOs how to be fractional CTOs, and then we help businesses find their fractional CTOs. So they get to tap into somebody with 15, 25 years of experience and get 100% of the outcome, but for a fraction of the cost. I think that that’s true right now. It’s a huge business opportunity for any business owner to basically tap into that excellence and experience without the full-time prostag.
(23:36):
People have been hiring fractional CFOs for many years, probably the most popular kind of fractional. But fractional CFOs, fractional chief marketing officers, fractional chief technology officers, fractional chief sales officers, fractional chief operating officers, there’s a lot of people that have decades of experience who are top-notch people, and the reality is they don’t want a full-time job and you don’t need to hire them full-time because there’s just not enough full-time. Talked about constraints and capacity and resources. There’s not enough bandwidth to metabolize the ideas.
(24:08):
So I would like for people to just think about like they hired consultants, hired these fractional executives. The key difference is a consultant is hired to solve the problem. A fractional executive is hired to define the problem. So you are there at the same level with them, sharing your vision, sharing where you want to go. And they’re there to kind of say, “Okay, well if you want to go there, this is what we need to do on marketing. If you want to go there, this is what we need to do on technology. This is what we need to do on operations and so on.” It’s a huge opportunity. It’s a growing space. It’s a win-win for everybody. I just recommend for entrepreneurs to be mindful for that new opportunity in business.
Dr. Tom DuFore (24:46):
Lior, thank you so much for a fantastic interview.
(24:49):
And let’s go ahead and jump into today’s three key takeaways. So takeaway number one is when he defined the types of projects in the three categories they fall into, I really liked it because it helps simplify. Is this project that you’re looking to do, is it helping de-risk? Is it helping to unclog or is it helping to scale your business? De-risk, unclog, or scale?
(25:12):
Takeaway number two is when he talked about the steps to help you make your changes. And there are four key steps that he said. Number one was to give this change a name. Name it. Seems simple, but it really helps. Number two is think about and describe what the ideal income is going to be. Number three, what is the best result if you do this? And number four, what is the worst result if you don’t do anything.
(25:41):
Takeaway number three is when he talked about prioritizing projects and he said you can prioritize with these three components. Number one, look at your resources. Number two, consider the bandwidth of your resources. And number three, consider the impact. And that will help you to prioritize various ideas, new products, new services, new businesses, whatever else you’re looking to do.
(26:04):
And now it’s time for today’s win-win. So today’s win-win is when Lior said this, he said, “Entrepreneurs don’t go crazy because of their goals, but because of their deadlines.”
(26:21):
I thought that was just a great, great nugget of information to tie in for our win-win. As a reminder for you, especially if you’re listening in as the founder, the entrepreneur, the leader of your organization, it’s oftentimes not your goals, but your deadlines that you’re stuck on. And I know I’ve seen it in myself in my own business where I want something to happen faster than might be realistic or than we might be capable of achieving. So I think that was a great takeaway.
(26:53):
That’s the episode today, folks. Please make sure you subscribe to the podcast and give us a review. And remember, if you or anyone you know might be ready to franchise our business or take their franchise company to the next level, please connect with us at bigskyfranchiseteam.com. Thanks for tuning in, and we look forward to having you back next week.
