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Leading In Uncertain Times With Tucker Max

 

BDD Bonus 3 | Leading In Uncertain Times

 

A true test to leadership is leading in uncertain times. Today, Jesse Cole interviews a legend at creating workplace culture and the Co-Founder of Scribe Media, Tucker Max. Tucker proves that you can always adjust your business model to cope up with uncertainties and still generate promising results. He shares how his entire company was able to cut their costs and increase their profit margin even when working remotely. Know more about how Tucker is leading Scribe and how they still generated revenues with free webinars.

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Leading In Uncertain Times With Tucker Max

In this episode, I got Tucker Max. He was a legend. He’s the Cofounder at Scribe, one of the best at creating amazing workplace culture. Tucker, I’m with you in crazy times and with you always innovating, doing creative things, whole self, as you talk about, I want to share a little bit about what you’re doing differently during the virus. For the people who didn’t read your blogs, you’ve got to give where the state and makeup of your company pre-virus to where it is these days.

The best thing I can do is walk you through what happened and how we handled this. We are one of the numerous different types of case studies on how to handle this. It was touch and go for us for a while and I guess for everybody. We had the number one company culture. Entrepreneur Magazine named us number one in Austin, number one in Texas and all that kind of stuff for small companies because we’re still like 50. With this incredible open culture, all kinds of people, we talk about our emotions. It’s almost like a therapeutic culture. We don’t talk about and cry all day about our emotions, but if you can imagine being in a work meeting and someone starts crying about something and people are like, “Okay.” They sit with it, talk about it, and then go back to the work stuff like it’s supernormal, that describes our culture.

You can sum it up by one of our main principles is to bring your whole self to work. We believe that and we act like that. In some ways, it’s a pain in the ass because you’re dealing with a lot of people stuff, but it makes it better because people work harder. They work more. They bring skills and attributes you didn’t know they had and all kinds of stuff. We help people write, publish and market books. Our prices start at $10,000 and go up to $100,000. We are almost the definition of both a luxury good and a marketing good. In a downturn, those are two of the first things cut. Our luxury goods are number one, marketing is number 3 or 4.

It was like, “What do we do now?” I was ahead of this in January 2020. I saw this not business-wise, I saw Coronavirus stuff coming. My wife is a nurse practitioner and she was watching it. We’d been talking about a little bit on our Slack, especially in the executive team. I did not think that what happened was going to happen, but it was one of those things because we had a bunch of events. We had many events planned for April and May 2020 that we were supposed to speak at. We were keynoting, JT was keynoting at YPO international. We had all kinds of crazy stuff.

I was watching it for that thinking, “Some events might be canceled,” so we got on board. If you remember years ago, South by Southwest being canceled was one of the big things, NBA and then South by Southwest right after, and we’re in Austin. When South by Southwest canceled, that night we closed our office. I tried to get JT to do it before, but we were back and forth and then eventually we did. We were one of the early people to close up. We’re a small company, it doesn’t matter, but we were way ahead of most people. Everyone in the company appreciated that and was like, “They are looking out for us, etc.,” and things then snowballed quickly. That was a Tuesday or a Wednesday and by Friday, we had in all-hands.

JT said, “I don’t know what’s coming, but it’s going to get bad. I have a feeling it’s going to get bad.” He was like, “This is why I’ve been preparing and all this kind of stuff and we were about to take a profit share.” In our company, the only equity holders are me, JT and Zach. There’s no equity or that sort of stuff, but 25% of the profit goes to the employees. Essentially, everyone is an owner of the company. The only difference is if you leave, you don’t get it. You’ve got to be there to get the profit. We were about to take a profit share and we didn’t, so we had cash in the bank. JT is like, “This is why I’ve worked our finances like this. This is why I set up all these profit share rules.”

He showed us the whole P&L and the whole finances. We’re a transparent company. We had that anyway, but he walked people through and said, “Here are our accounts receivable for the next six months. Here are our fixed expenses for the next six months. We have four months of runway. If we signed nothing, we have three months of runway, and then depending on a few finagling things, we can get us to four.” He was like, “That means all of us, including me, have a job for four months as of this day. Our job is to push that date out. I want three things from all of you. Number one, I want ideas on how to cut costs. Things that were off the board before, I don’t care. Nothing is off the board anymore, salary reductions, anything, any ideas. This is a brainstorming thread. No one gets criticized for anything in here. If your idea is to fire the CEO, put it in there. Number two, how do we sell more? That is either to existing customers or new ones. Number three is how do we find new things to sell? Those are the only three ways that we’re going to extend that number beyond 3.5 to 4 months. It was Friday afternoon, he’s like, “All weekend, I want every single person to post at least one idea.”

It ended up being the best weekend in the history of the company because everyone stood up and told the truth. It’s like, “Here’s the reality, let’s deal with it.” Everyone got super motivated and super excited because we all like each other anyway. It was like, “This is crappy, but we know the situation so let’s get motivated.” We had at least 4 or 5 people like me and Meghan, who are like you, high energy, smart idea people. They started it and everyone else jumped in. People in ops and receptionists are super excited dumping ideas, and people who are usually aren’t creative product people.

For the first time possibly in human history, we have a common enemy – the virus. Click To Tweet

We probably had 250 or 300 posts thread on Slack about this. Ninety percent of the ideas were complete hot garbage, but 10% of them were amazing gold. All of that 10%, half of those were usable. We ended up cutting about 9% of the costs. Half of that is temporary. The other half I think is going to be sustained. We increased our profit margin by 4% to 5% immediately. We had a bunch of good ideas, but the big idea and multiple different people have this idea is as a promotional thing, why don’t we teach? We already have the best book on how to write a book. We have done a bunch of videos and we’ve done a ton of blog posts. We’ve got all this amazing content, but what if we did a huge multi-day webinar training? I personally live trained all of it to anyone who wanted to come for free because, for that, we’re going to get a ton of attention. We’re like, “Let’s try it.” We ended up with 5,000 people on that webinar.

How big was your database that you sent that to get that?

Our list is about 45,000 to 50,000.

It’s still huge, almost 10%.

For a webinar, that’s off the charts. That’s with no paid ads because we had no idea what we were going to do with it. We’re like, “Let’s teach it.” The idea was, “If it’s good, if people like it,” which I knew it would be because I already teach workshops. I had all the slides done, “Let’s teach what’s in the workshop.” People didn’t pay for the workshop. They paid for editing and publishing as well. They’re spending $15,000 to $25,000. They’re not paying for the information. The workshop, we teach it and then we spend a lot of time with them. We go over their stuff. There’s a lot of individual attention. Giving content away is no problem. It was remarkable. We recorded the whole thing. You can go to ScribeBookSchool.com and it’s still free. You can sign up and then you go to the course page and it has our entire writing and publishing processes. We taught them all with templates and everything.

How long was the webinar?

It was for five days.

What were the hours?

I spent 4 hours a day for the first two days and then for about 1.5 to 2 hours for the last three days. It is fifteen-ish hours of content. We were still in the four figures of the audience by the last one. We maintained consistently by about 50%.

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Was there an ask at the end?

No, that’s the thing. I told people, I made them a promise, “I’m not going to sell you anything.” We don’t have anything to sell below $10,000 and I’m not going to push any of our other stuff. I am only going to teach and that’s it, but a bunch of people didn’t believe me. People were asking, “Are you going to talk about what Scribe services are?” I’m in the webinar and I said, “I’m not going to talk about it. Go to ScribeWriting.com, if you want. It has all our services, do a consult and get on the phone with Rikki. That’s what salespeople are for and she’s amazing at it. You’ll like her. I’m here to teach.” The one thing I did say though that is smart on my part is I said, “If you want us to make something to sell you, I refuse to sell information, that’s going to be free. If there are services you want like coaching, mentorship, editing, whatever, tell me what you want, what you’re willing to pay for and we’ll look at all the comments and we’ll put something together.” We then have pages with thousands of comments. I mentioned that a couple of times.

We put together a new product that we call The Scribe Writers Room and with a lower price point than anything we have. It’s $1,500 and $6,000. It’s the same thing except the $6,000 gets a full content out of their manuscript. The basic program is you get access to the book course, which anyone gets for free, but then you get three editing calls or four for the higher-end one. It’s a one-on-one call with the editor to help you do your positioning, your outline, your end chapters. You can use them however you want, but you have three-hour calls, plus we’re going to have a private Facebook group. I’m in there and all my senior editors to answer questions. You have a weekly one hour Q&A and then quarterly author round tables, all this other cool stuff. You’re getting coached, mentored, and access to expertise and then the private group and all that stuff.

How much later was that launched?

Two weeks later, which is insanely bad timing. We’re weeks out from when we launched. We have done $163,000 of revenue on either the new product or people buying our old products. Jesse, I thought for sure that the only people going to Scribe Book School would be people who can’t afford our services. There were plenty of those people, but I was wrong. Some huge percentage of that audience were people who could easily afford us, but they didn’t trust us, they weren’t sure, they didn’t know, or they had their own issues. There are a million obstacles that stop people from starting their books or from working with a company.

I can’t tell you how many people who emailed me, who got on calls with Rikki and were like, “I’m impressed by your sales process. I had no idea how good it was. I had no idea how well-thought out it was, but you are far beyond anything and anyone else out there. I didn’t realize it.” Of the 163, I think 50 was the new product and well over 100 was old stuff that we sold. We still have calls trickling in. I will be a well over $200,000 of direct sales from that first one and we’re reteaching. I’m going to do the live training again at the end of April 28 to 29, 2020. I’m going to do it again.

It came out, first, the leadership shared with complete transparency everything that’s going on and got everyone on board. That was your rallying cry, “We have 3 to 4 months, we all need to jump in.” You got them to pour ideas. From that, came an idea that you shipped immediately, put it out, served, and oversold. You weren’t trying to sell, you were trying to serve and that turned into giant sales and that’s going to be iterated and become a new strong revenue source for you guys.

Realistically, we’ve always struggled with how do we sell low-end products because we’re the premium brand in our space. Now that we have this and the way we launched it, we’re going also to start launching even lower dollar challenges like $97, $197, $297, specific, we teach you how to do a book proposal and then we help you through it. We teach you how to position a book, tons of little things that we can start running paid ads to. Realistically, this is going to become a multimillion-dollar business line within 8 to 12 months.

The leader can pick the plan, but the ideas are from everyone. Click To Tweet

It is because of the need for the whole group to get on board. I can see that it wasn’t just an idea, it’s an idea to implementation. When people got going, it’s like, “You got a test thing, Tucker.” Our most popular drink at the ballpark is our Slippery Banana. It’s this ridiculous alcoholic drink that fans love. Our director of operations said, “Let’s do a drive-through. We don’t know if we can do it, but let’s do it.” We set up a drive-through, a hundred bottles. The line started an hour early, it was sold out in about 30 minutes and we’re doing it again. We’re like moonshiners. We’re having Slippery Banana drinks. Now, we’re having calls on how do we distribute this more on a large scale because we came up with an idea. It’s the same thing. The idea was Friday, by Thursday we had the drive-through in action.

You guys probably had a lot more free time too.

We don’t have games and we’re not selling tickets and nothing’s going on.

We’re a team of 50 and I was able to get the CEO to let me take five people essentially full-time and 2 or 3 other people part-time. That’s why we spun this up in five days. I got a whole team to support me and also we had some of this stuff as well. You’ve got to remember, the world has changed. Everyone’s sitting at home with nothing to do and all these people, even if you still have a job and you’re at any number of companies, you’re like, “This company might not be around in a few years. I need to start working on my brand. I need to tell my story,” or whatever it is. We saw in the news, Chris Cuomo got COVID and he was like, “I realized that I had this horrible job of being a rage profiteer and click-baiter for CNN. I’m not going to do it anymore.” A lot of people are figuring this stuff out and everyone wants to write a book. We’re like, “We’ll put the stake in the ground. We’re going to teach you how to do it for free. Information will never be your barrier. If you want our time, our services, you can pay for that, but everyone else goes free. Here it is.”

You adjusted the business model, but from the cultural standpoint, I want to finish this like, you’re already working remotely. You are more authentic, whole self than anyone I know.

What else have we done? Two big things. We have the therapy channel on our Slack. It’s one channel where it’s like, “I’ll go to my therapist and have a deep revelation. I’ll talk about it and share it.” Pain shared is pain lesson. We do feelings calls twice a week. I don’t even run them. Someone else does. A girl in our team who’s therapy-trained. She runs feelings calls. For every Tuesday and Thursday, at 4:00 PM or Tuesday and Friday, 4:00 PM, whoever wants to get on and gets on. It’s totally like, “You know what happened for the 2nd or 3rd week of March 2020 when Coronavirus crashed and the markets were down 40%.” This is my house. It is a nice house. It is a 7,000 square-foot house, guest house, pool, fancy. I got a big mortgage on this because we live in America and we’re all in debt.

My mortgage is securitized by my brokerage account because I have terrible credit. They’re like, “You need more money in the bank than the house is worth.” I swear to God it’s true. It’s crazy. I could buy the house with cash, but I wanted a mortgage for various reasons, tax reasons, and investment reasons. My mortgage and my loan gets called in the third week of March 2020. They’re like, “You have to secure a tie.” My brokerage account was cut 30% or 40% or whatever. It was like everyone’s because the market was down and they’re like, “You don’t have enough money in your brokerage account, we’re calling in your loan.”

I got on the feelings call. It was the first call. I’ll kick it off because the fish is rot from the head, but they also swim from the head.” I’m like, “Let me tell you where I am. I woke up in a panic because the banker sends me this email at 4:30 that my loan is being called in and I have four days to come up with either a huge chunk of money or liquidate it.” It wouldn’t liquidate the account, but it would draw it down substantially in the middle when it lost 40% right before the rebound. I’m going to pay 20% or 30% more for my house. I’m like, “I have access to other resources. I’m in the process of doing things, but I’ll tell you, I woke up in a total panic.” I went through it. I laid there with the emotions. I felt them. I thought I was going to die for a minute or two, but once I felt them, I was able to let them go and I got up and got going. I didn’t push them away. I sat and felt them. I talked about all that and you should have seen them. Everyone’s slack-jawed.

It’s not just what happened, but that I came on in a minute and talked about it and the problem wasn’t even quite solved yet. At that point, I had a good beat on it. I ended up getting it solved and it’s fine. It’s a pain in the ass, but whatever. This is the middle of the worst part of when it’s hitting and the stock market is at the bottom. No one is sure if this is going to be a mass death pandemic and my loan gets called in. I’m on the feelings call in my team and telling them the truth. That’s one thing. We always had an office, Free Lunch Friday. We called it Free Lunch Friday because we would cater and then everyone, 35 out of 50 are in Austin. All of our freelancers were remote and then fifteen full-time are remote and 35 full-time are in Austin. We would have lunch and what we did are two things, we canceled that. That was a big money save because that costs $500 a week or something to cater to that. We cut that. We got our government loan back and sales started to pick back up. We can see the liquidation date of all of our jobs has been pushed out for many months.

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Leading In Uncertain Times: There are a million obstacles that stop people from starting their books or from working with a company.

 

It’s like 6 to 8 months and things are getting better for us. What JT, our CEO announced, that we’re bringing back Free Lunch Friday, but we’re doing two different things. It’s not going to be in the office. He got a $25 gift certificate to DoorDash for everyone in the company. We kept doing it on Zoom, so everyone’s going to do it on Zoom. What you’re going to do is order from DoorDash, your favorite restaurant, have it brought to your house, and then we’re all going to eat it together on Zoom lunch but we also changed the name. It’s not Free Lunch Friday anymore. It’s Find A Way Food Friday because his thought was, “We were done. We were cooked, but we got together. As a tribe, we found a way out. No food is free. The company pays for it, but you guys are all getting profits off of this, so you’re paying for it too. Let’s stop calling it free. Let’s call it what it is. We’re finding a way to pay for it. We found a way to save the company. We found a way to pay for this. It’s called Find A Way Food Friday.”

You guys went through it. I love the transparency. I opened and I said, “I woke up at 3:00 in the morning and my wife Emily was already up and pacing around the living room.” I said, “We found out that Major League Baseball may not be playing, which means there’s a chance we might not have a season. We don’t know what’s going to happen.” It was amazing that they were all like, “This is real.” I think it’s important to share that. Is there one maybe quick win or any of their best practice you would share for a company to keep your team together by rallying them together?

There are two big things. For the first time possibly in human history, we have a common enemy. Think about that and a common experience. I have been on the phone with some super people whose names you know. I don’t mean like our common friends. I don’t mean like small-time famous, like you and me. I mean big-time famous. I started on the phone with them like, “How are you doing? I’m good. I’m stuck at home.” He’s like, “Me too.” He’s a huge celebrity who owned the planes and things stuck at home. It used to be the only commonality that everyone had other than life was the weather, but now you’ve got weather and quarantine.

After the quarantine, I’m going like, “What’s like quarantine for you? Let me tell you my quarantine stories.” Everyone will have them. We have a common experience and a common enemy. No one’s on the side of the virus. Maybe you think business should open. Maybe you think we should stay quarantined or whatever, but we can all agree the virus is our enemy. If you can’t rally around that, then you shouldn’t be leading. If you can’t say, “We’ve got to do something. Here’s the reality. Here’s where we’ve got to go.” It’s exactly what JT did, “Here’s where we are. The enemy is the virus. We’ve been shut down. Here’s the reality. Here’s where we’ve got to go. Either here’s my plan or help me find a plan.”

The one thing JT said is, “I’m smart, but I’m nowhere near as smart as all of us put together.” Everyone buys in and they’re all excited. I’m not saying everyone gets to pick the plan. You’re a leader. You can pick the plan, but the ideas are from everyone. That’s number one is rally around, defeating a common enemy and a common purpose. Get ideas from everyone, pick the plan, and make the plan clear. These are all things I’m skipping over that we did. You need to double or triple or 10x the amount of contact you have with your people. You need to over-communicate to the point that it’s like, “I know you love me. We’re cool. I can’t work. You’re asking me if I need any more help on Slack.”

JT, our CEO, has reached out individually to every single person in our company on Slack at least twice. That’s like, “How are you doing? How’s your fixing?” He knows everyone’s kids’ names and all that. He’s one of those. He’s like, “How’s blah blah blah doing at school? How’s your wife? How’s this? How’s that?” He’s had 50 people, twice and he had calls with almost all of them. It’s funny. Our team knew we had an amazing culture. I don’t think they got it until this because they’re seeing their partners. Early on, all their friends and their wives and husbands were freaking out because their companies weren’t saying things. They were closed mouths, no panicking, and no one was a friend. They’re like, “At Scribe, JT already talked about this.” All the stuff we’re doing, feelings calls, all the connection that we’re doing, they’re like, “No one is doing any of this,” the ones that have jobs.

It’s a smart mindset to go through the struggle together. You think about it and you go through it together. We had a small team when we ran out of money and struggled when we first started. A few people are like, “We felt this but it’s even worse and now we’re in it together.” It brings you closer together. I think we have to embrace it and celebrate it. Tucker, I could jam with you for a long time. I appreciate what you’re doing and it’s going to be exciting because it sounds like your company will be better. You’re going to have new forms of revenue, new ways to serve people, and your group is closer that it might be a whole different company.

It is almost to the point where I’m half-joking now because we’re still in it. If we come out of this, I think it’s great. There will be a new normal, but things get back to normal and everyone’s fine and happy again. I’m going to be like, “How do we introduce some serious stress into our company?” I’m dead serious. How do we do this in a way that gets the same result, but maybe I’m not waking up in a panic with my bank calling in my loan?

Tucker, I appreciate you as always.

Thanks.

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