Video Husky started back in 2018 and is operational today, but since late 2021, I’ve personally stepped away from the company. With that said, I wanted to provide a documentation of our entire journey.
This post is split into eight sections - based specifically on challenges that Video Husky and most productized services businesses will face. I think each of these challenges are relevant to most founders and wanted to share my mindset and the solution I chose that either unlocked growth or allowed me to step back more, as well as the personal consequences of each decision.
Here's a table of contents to get a quick overview:
1. 0 to 10 customers: How I validated Video Husky in 90 days (Mar 2018 - May 2018)
tl;dr - The best way to validate a business is within a community of the people who are likely to have that problem. The DC played that role for Video Husky through 10+ DC'ers testing or sign up Video Husky within the first 90 days and providing valuable feedback that helped shape the product.
Biggest challenge
I came up with the idea for Video Husky when I was running Facebook ads for local businesses in Hong Kong and video ads were becoming popular but finding somebody to edit them was a real pain.
Inspired by Design Pickle, I came up with the first iteration of Video Husky with the value prop of:
Pay a flat monthly fee for unlimited requests and revisions with drafts arriving in 2 business days or less.
And the goal of getting 10 clients in the first 90 days to validate the idea.
Overcoming the challenge
During those first three days I tried quite a few different methods of outreach including:
Personal network
Posting on Facebook Groups
Doing a free trial offer on the DC
...with the aim of seeing if there was any interest in the product.
On day 85, we only had a whopping four clients, most of whom were personal contacts, so I thought the project was dead.
But the big change happened when somebody bumped the DC thread and that ended up bringing on six customers in three days which achieved the goal that I had originally set.
Results
After three months we had 10 customers at ~$5k MRR which gave me the confidence that Video Husky had a future.
Lesson learned
The biggest lesson I learned in this first phase was the best way to build a business is publicly within a community of potential customers.
While Video Husky's initial customers were from my own network, the conversations, test runs and first batch of non-personal-network customers all came from the Dynamite Circle.
These early conversations with the individuals mentioned above not only provided useful feedback and testimonials to help shape Video Husky's product and make it easier to sell respectively. Even when customers left (as I'll discuss below), these conversations were eye opening because I was being thanked for at least trying to solve the challenge of outsourcing video editing.
More than even reaching that 10 customer milestone, that gratitude gave me the confidence to continue with Video Husky and so I'm forever grateful to everybody mentioned above for taking the time to help me build out VH.
2. 10 to 5 customers: How losing half of Video Husky's customers showed me which ones were idael (Jun 2018 to August 2018)
tl;dr - Video Husky plateaued at half the MRR of its peak for three months. Working with Alex McClafferty and Russ Perry helped me understand why Video Husky was valuable and so figure out how to market it properly.
Biggest challenge
After the win of getting to 10 customers by the end of May, six left in June with only one new customer coming in which meant by July we were back to just five customers with three editors on payroll.
It quickly became obvious that there were two challenges:
We didn't have product-market fit
We didn't have a way of attracting new customers
I decided to tackle the product-market fit issue first.
Overcoming the challenge
With the initial success of getting those 10 customers, in early June I decided to go all in on Video Husky by working with Alex and Russ, both of whom had run 7-figure productized service businesses and I felt like could provide the guidance to help me grow Video Husky faster.
I wrote more about my experiences of working with them here, but the biggest contribution that both of them made was shifting my thinking and providing perspectives that I hadn't previously considered.
While it was depressing to lose half our customers so quickly, they helped me see that it also meant there were 4-5 customers who not only chose to stay for multiple months, but were enthused by the work we did.
After speaking with both the customers who left and stayed, it became apparent the customers who were leaving were those who had previously edited themselves and the ones who were staying were those who previously had outsourced video editing.
When working with video creators who previously edited themselves:
the frustration they were facing was around how time consuming and challenging video editing was
therefore it was our job to save them time and frustration
When working with individuals who previously outsourced:
the frustration was around sourcing and managing remote high quality remote video editors
therefore it was our job to pair them with a high quality editor
This seemingly minor difference was important to understand because that meant the value that Video Husky was providing was different.
The challenge with working with the former type of client was we first had to convince of the value of outsourcing, teach them how to outsource and then pair them with an editor who they would appreciate.
With the latter type of customer, since they already believed in and knew how to outsource effectively, to win them over all we had to do was pair them with a high quality editor and let the work speak for itself.
Knowing this, we began focusing almost exclusively on attracting the second type of customer.
Results
While there was no financial result to brag of (if anything I was way in the red given how expensive it was to work with both Alex and Russ simultaneously).
This was an important part of Video Husky's journey because this time enabled me to understand:
Who our target market was (creators who outsourced, not creators who edited)
What their pain point was (outsourcing, not editing)
Position ourselves in the right way (More as a staffing solution, than an editing one)
...which lead to huge financial benefits as seen in the next section.
Lessons learned
Almost every time I've worked with a coach, results typically manifest within a 3-6 month period.
Working with Alex and Russ helped me level up as an entrepreneur by:
- Helping me see my situation in a different light
- Provide necessary feedback when my thinking was flawed
- Kept me accountable to actually talking to customers rather than making assumptions
Without them I would never have understood why our customers valued Video Husky and so it would have been impossible to market it properly. A big part of the pull of entrepreneurship I think is forcing you to be a version of yourself that isn't currently possible so you are able to actually run the business that you dream of.
If that's the case, then coaching from the right people can get you there 10x faster and highly recommend it.
3. 5 to 200+ customers: How Video Husky 10x'ed in a year while I was nomading (Sept 2018 to Sept 2019)
tl;dr - Found a traction channel that worked for us and that allowed us to 10x in one year.
Biggest challenge
Now that I had:
A better understanding of the market that Video Husky should focus on
A product that suited and excited long term clients
The positioning and messaging to sell Video Husky properly
…the challenge became getting ourselves in front of said potential customers and pitching ourselves to them.
Overcoming the challenge
The biggest unlock for overcoming this challenge was reading the book Traction. Essentially the book offered 19 different methods of attracting potential customers and a framework to decide which 2-3 channels to focus on.
The first channel that Video Husky focused on was cold email. Initially this seemed like a great success, with an 80% open rate and getting us 10 new customers before the end of August 2018. **But that problem with this approach was we got these emails by scraping Youtubers contact emails, and as it turns out the majority of Youtubers (at least the ones who got scraped) directly edited their videos themselves**. While more of these customers stayed this time, they still weren't the ideal clients that we wanted to work with and so we tested a second channel.
What actually worked well for us was paid advertising. I don't know why it took me so long to test running Facebook ads for Video Husky given it was my background, but this drove a TON of leads, a good percentage of whom purchased immediately and ended up staying for a long time. I suspect the reason Facebook ads worked better for us than cold email was because we could filter potential prospects just by the nature of the ads we put out. Given we focused hard on the challenges of outsourcing and hiring rather than the tediousness of editing, we ended up attracting quite a few customers who were looking for better outsourcing alternatives and so were great fits as customers.
Results
From there for the next 12 months, we got into a rhythm of growing revenue by 10-20% per month and bringing on enough new editors to keep up with that growth.
For context on August 10th 2018, we had 6 customers and three editors. By Sept 30th 2019, we had reached that hallowed $83k MRR mark having worked with hundreds of customers and dozens of editors.
Lessons learned
The biggest lesson learned here was the importance of finding a traction channel that you can tap into profitably for your product and doubling down hard on it.
Brian Balfour's article on product-channel fit describes this well, so if I were to do things all over again, alongside speaking with more potential customers before designing the product as mentioned in phase 1, I would also have tested out the traction channels until I could find one that I could profitably scale (and potentially even build a waitlist on) before even designing the product.
The secondary lesson from this, especially if you plan to run paid ads, is that you have to know your CAC and LTV to the tee. In the beginning, leads were cheap and so the ads were profitable, but because I wasn't tracking our ad spend to leads generated, I also didn't realize towards the end of this time our ads were actually becoming unprofitable. I'll speak more about this later in the profitability section, but this lesson is crucial if you want to scale your customer acquisition sustainably.
4. 3 to 50+ staff: How a Zoom full of angry staff taught me my biggest leadership lesson (Oct 2019 to Dec 2019)
tl;dr - A near staff revolt taught me the importance of considering others' perspectives when creating policies that affect people beyond myself.
Biggest challenge
The biggest challenge I faced during this time was around our leave policy.
When I first started the company, I designed it so our staff had more days off than the average worker but were expected to work on public holidays. The benefits in my mind were twofold:
If we did our resourcing right by covering off editors who were off, clients would get more work days while staff still had above average number of days off
VH staff could enjoy days off that didn't fall on public holidays so things would be cheaper, less busy etc. (all the things that I valued)
In the first year when I knew everybody and explained the policy, the 10-15 ppl at the company didn't mind the policy and went with it. But as we scaled and brought on 4x the number of people. The system started falling apart because too many people wanted to take leave on the same days.
I had to start denying people leave, especially at Christmas/New Year period, tempers started boiling over, especially since people had been saving leave for this period.
Overcoming the challenge
The anger that broke out after that was vitriolic. While nobody talked to me personally about it. Video Husky's middle managers and and long term staff showed me messages (that hid the identity of the senders) of staff-only chat groups, and it was clear that if I were to go through with asking everybody to work during the holiday period, I would literally be the asshole grinch who stole Christmas.
Realizing how serious the situation was and that I had screwed up, I called a townhall meeting with everybody at the company and started asking the more senior and longer term members of Video Husky to voice their opinions on the situation. After they shared what they thought, more junior staff felt comfortable and further explained how they felt the policy that I created transgressed the social contract and culture within the company.
Ultimately decided to institute a new policy where every year Video Husky would have a "Decembreak" where the entire company would have a week off (9 days total if you include the weekends). Personally was scared shitless over what customers would say, but could see this was important to our staff and so went with it.
Results
After sending the email out, it turned out most customers were glad to hear that editors would get a break and only a small number who wanted clarification and compensation for time lost.
Once we actually had the Decembreak, I can safely say that it did me a world of good too, so ended up being grateful that we instituted this.
Lessons learned
I learned two important lessons.
The first is realizing my assumptions can have disastrous consequences as can be seen in the below two examples:
I assumed that our staff would have the same outlook on holidays as me. Since I valued days off that weren't public holidays, I assumed everybody else would too, but patently not the case given most people want to coordinate days off with friends and family.
I assumed that clients would revolt if we had days off for editors, I was so scared that customers would complain, that staff paid the price by not having the fixed holidays they valued.
In both cases, my arrogance costed our staff because I wasn't willing to consider that I might have perceived things wrong
But the bigger lesson to learn was on leadership.
Getting rightfully told off by and in front of 50+ people was mortifying and distressing. Yet as difficult as that was it help me realized what leadership was about.
It's not about giving people what they want or even listening intently. Leadership is about having other people's best interests at heart.
Part of that is listening, but the bigger part is caring. To being able to put yourself in another person's shoes and see things from their perspective. And there's no way to fake this and almost everybody can sense sincerity.
This was perhaps the first of many (as you'll see below) steps of my own personal journey to becoming a proper leader and manager within my company. But by far the most important one.
5. From no wage or profit to a market based salary and 20% margins: How Covid forced me to evolve from marketer to business owner (Jan 2020 to June 2020)
Biggest challenge
As the new year came, Video Husky had two problems.
It wasn't growing anymore
It wasn't profitable
Even worse, it was only borderline profitable because I was only taking a token $500 per month salary, living cheaply in Cambodia off this a couple thousand per month more from a previous business.
While I was OK with it being borderline profitable when it was growing, justifying to myself that I was "investing in my business", I was only comfortable having one or the other.
Decided to tackle the profitability issue first.
Overcoming the challenge
To overcome this challenge, I started working with CleverProfits, a fractional CFO and bookkeeping company that specialized in helping online businesses become profitable through their "Perfect PnL" methodology.
It became clear that I was running Video Husky like a marketer, not a business owner, which had two major consequences:
Over-allocating on advertising
Because I viewed Video Husky's growth from a marketing perspective, I was spending too much on advertising. Instead I should have allocated more money towards hiring more experienced staff which could have improved our product and customer experience.
2. I wasn't building any reserves
Because in 2019 we kept growing, whenever money came in I either spent it on advertising on seen above or else on projects like our beautiful-but-definitely-out-of-our-price-range-$80k website.
And so where gold standard companies have 3 months worth of expenses saved up, we had 15 days.
This issue was of course compounded by Covid-19 in March which instantly lost us 30% of our clients and revenue overnight.
Trying to get your company profitable is never easy, but trying to do so with so little money in the bank and losing that much revenue so quickly was utterly disastrous.
It was a brutal three months, starting with firing 16 people, having everybody take a 20% pay cut and no longer paying myself. We consecutively lost $10k two months in a row but with CleverProfits guidance on where I should be allocating our spending to ensure profitability, we finally turned the ship around.
Results
By June 2020, Video Husky started accounting for a market based salary for myself (although even then I was too scared to actually pay the cash out), and then in July got profitable even accounting for that salary.
The best part was before the end of the year, we were even able to pay everybody back the 20% paycut that we had asked them to take.
Lessons learned
The biggest lesson I learned was going from a marketer's mindset to a business owner's mindset.
Covid made me realize that Video Husky wasn't a game. Rael money was involved with real people's jobs at stake. Before Covid, I treated Video Husky like a game to rack up as many points (revenue) as possible.
But that's a naïve marketer's mentality.
Letting those 16 people go forced me to confront reality and grow up. After adopting a better mindset and becoming more disciplined with our spending, at the time of writing (mid-2022) we now have 2.5 months of expenses worth of cash on hand, a safety net I'm glad for going into the coming recession.
6. Plateau breakthrough: How losing 30% of our customers from Covid doubled our revenue (July 2021 to Dec 2021)
tl;dr - Losing 30% of our customers caused me to further narrow the criteria of customers we worked with which doubled LTV and reduced CAC significantly.
Biggest challenge
After overcoming some of our cash flow challenges, the next big problem to tackle was accepting that we had hit a plateau and the need to overcome it.
The reality that even before covid, Video Husky's growth was already stagnating and given we lost 30% of our clients overnight, addressing this and growing again became the main priority after our profitability issues were fixed.
Overcoming the challenge
Reading the Pumpkin Plan by Mike Michalowicz was the gamechanger here.
The premise of the book is simple:
20% of your customers bring 80% of profit and 20% of your customers bring 80% of problems. By attracting and working exclusively on the former and not working with the latter and your business will attract more of the right kinds of customers, be able to streamline your workflow and product towards them which results in better quality, lower costs and more profit.
To apply this to Video Husky we:
Ranked all our clients by lifetime revenue and problematic-ness
Ranked all our editors based on churn count in the last year
The results were fascinating.
Clients wise:
It was obvious who our best clients were so we interviewed them to understand why as well as collecting a TON of testimonials for marketing purposes.
It was equally obvious we weren't suited to working with marketing agencies and so slowly phased them out.
Editors wise:
To our horror we found one editor was responsible for almost half the churn in the last quarter and let him go.
For the other lower performing editors, it turns out all that was required was a six-week training program and they all improved to the necessary level.
Results
We found that our best fit clients were those who needed talking head videos edited twice a week and they found our service valuable because our editors tended to get the videos edited right first time, reducing the revisions that stressed both the clients and editors.
Knowing that and using the testimonials collected during the interviews, we marketed exclusively to creators of talking head videos, and only hired editors who were skilled in that regard.
This not only lead to better customers and a happier working environment for the editors, but nearly doubled our LTV and decreased our CAC which took us to record revenues.
Lessons learned
On a business level, it was odd but great seeing how by narrowing the types of clients and work that we did, we could deliver better results for happier clients which created a fly wheel of more customers testimonials that helped attract more clients.
But on a personal level, I was finding these transition projects brutal.
Both this project and the profitability project completed in the first half of the year took six months, and the communication necessary to get everybody on board from customers to marketing team to editors was burning me out leading to the decision made in the next section.
7. Hating my job: How my entrepreneurial dream turned nightmare helped me find a better path (Jan 2021 to August 2021)
tl;dr - Turns out becoming a true business owner with management responsibilities was something I didn't enjoy and decided that hiring a General Manager would be best for myself and Video Husky.
Biggest challenge
As 2021 rolled around, I noticed that I was less and less excited about Video Husky and becoming more resentful of the time and energy I was devoted towards it. For the first time, I appreciated that burnout was real.
I started working with Taylor Pearson in early 2021. The original purpose was to help a third pivot to improving our sales process but the premise of our coaching relationship shifted quickly towards addressing my burnout.
We identified the four main issues:
The increasing amount of organizational debt
The need to refactor structures and processes as a result of the debt (financial, ideal customer and sales process all mentioned above)
The burden of managing 60+ staff
The lack of a vision that I felt compelling
And by reflecting more on the issues above, I realized there were two underlying causes:
Lack of Founder-Market fit
As Video Husky pivoted to focus more on video creators, the reality was I started relating less and less to our customers. Where previously we also worked with small business owners or agencies, both types of customers I could personally relate to; because I wasn't a Youtuber or content creator, it became harder to understand the needs of our customers. Because of that, it became harder to establish a compelling vision of the future.
Lack of Founder-Product fit
Without a vision in place, it also became more difficult to address our organizational debt. Without a direction to move towards, I was hesitant to address the debt since building in the wrong direction and needing to undo it would be worse than what we currently had. Moreover, I resented how my role at Video Husky required me to do so much managing.
While I'll always be grateful for the experiences in 2020 that taught me how to be a better business owner, I also found my new roles and responsibilities unenjoyable. The managing and coaching that was necessary just didn't suit where I am in life where I'd rather be playing a game rather than coaching and managing on the sidelines.
Unfortunately though that was what Video Husky required of the leader of Video Husky, so it became obvious that there was an impasse.
Overcoming the challenge
My options then were two-fold. Either to sell the company or hire a General Manager to take on my role. The former seemed neither financially attractive nor did I want to entrust the future of Video Husky's staff to somebody I didn't have control or influence over.
Therefore I chose the latter option which was much more attractive given I would still have influence while providing financial stability through ongoing dividends.
Results
I started this process in April 2022 and hired our GM by end of August 2022. Reading the book "Who" and working with Dynamite Jobs to identify and source the right candidate made the whole process a TON easier and from there began the transition process.
Lessons learned
Like working with Alex McClafferty and Russ Perry, working with Taylor Pearson was beyond helpful in providing perspective and the option of hiring a GM which I previously would not have considered. Of all the coaches that I've worked with, Taylor's thinking, process and advice was the most impactful and would highly recommend working with him.
The bigger lesson though was learning to let go of the good for potential great. Staying at Video Husky would have provided me with a good job, income and environment, but it would have trapped me within a comfort zone and come at the cost of exploring other possibilities where I might work customers and staff who I related to more while the work that I did on a daily basis might be more enjoyable. Moreover, staying halfheartedly would have been unfair to our team who deserve an experienced leader that is not only committed to the future of the company but to the development of their abilities.
8. Letting go: The surprising consequences of accidental involvement (Sept 2021 to July 2022)
tl;dr - Even though I wasn't involved daily, my weekly "advice" to Fede (Video Husky's GM) was making things worse for him and the Video Husky team. After accepting this, Fede and I changed to only meeting every 90 days and things have been better since.
Biggest challenge
Federico joined Video Husky in September which we spent doing handover. By October we had transitioned to a weekly meeting and by January 2022 to a bi-weekly one. However by March 2022, it became apparent that there were challenges with the transition.
The two issues that were conflict were around restructuring Video Husky's leave policy and the pace of transitioning our clients to new pricing.
Overcoming the challenge
After speaking with 8 of the original team and understanding their individual perspectives on these challenges, I realized that neither the team nor Fede was the problem - I was.
As it turns out, Fede and all of the team were on the same page when it came to what the leave structure and pace of transition looked like, but because Fede and I met on a weekly basis and I was making comments on both, I was putting Fede in a position where he had to both appease and defend my comments, even when they didn't make sense given how far removed I was from the daily workings of the company.
The solution was simple, even if painful to admit. The reality was my input was making things worse not better and if I put myself in Fede's shoes, having an "active" owner would likely be one of the worst conditions to work under. I realized that I was still clinging onto my title and identity as the founder of Video Husky, but unless I let that go, Fede would never have the autonomy necessary to move the company in the right direction.
Given that, I established new purely owner to GM relationship with Fede where we would only meet once every 90 days with a minimum net profit amount he has to deliver. (Talked more about this here)
Results
Three months into this change - so far it feels good. The numbers have trended in the right direction and it seems like staff are happy with the arrangement as well. I'll provide more of an update in the future, but believe this has likely not only been helpful for Fede and the team, but also been good for me. Since I can't distract myself with Video Husky, I've been forced to think more about my own future - something that I've wanted to do but was scared of since leaving Video Husky.
Lessons learned
The big lesson here was accepting my involvement doesn't always lead to better results. I think entrepreneurs in general tend to have a hero complex where they're there to save the day, but until I'm not involved, others won't have the opportunity to step up and contribute in ways that are better than what I could do.
It was a humbling but important lesson - and one that I'll keep on as the owner but no longer operator of Video Husky in the years to come.
9. Conclusion
So that sums up the eight main challenges and inflection points that Video Husky faced in the past four years.
If you’re running a similar business and have are facing similar challenges - I’m currently consulting on a part time basis. If you’re interested, check it out here and reach out!