3 Signs Your E-commerce Business Needs a New Operating System with Yoni Konzminski

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3 Signs Your E-commerce Business Needs a New Operating System with Yoni Konzminski

Yoni Konzminski, Co-founder of South Col, Escala, and MultiplyMii. Yoni will delve into the intricacies of business operating systems and organizational structures that empower entrepreneurs to scale their ventures to eight figures and beyond.
In our previous podcast episode, Yoni shared invaluable insights on building operating systems, outlined the four core processes crucial for a $20 million Amazon FBA Business, and provided actionable steps for aspiring entrepreneurs to achieve success.

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> Here’s a glimpse of what you would learn…. 

  • Challenges faced by Amazon sellers in the current e-commerce space
  • Pain points experienced by e-commerce businesses
  • Importance of delegation and robust planning for sustainable growth
  • Finding the right balance between expertise and delegation
  • Importance of complementary business partners with diverse skill sets
  • Approaches for delegation in smaller and advanced businesses
  • Scaling up a business and decision-making process for hiring
  • Annual planning and goal setting for business growth
  • Yoni’s recommended influential book and productivity tool
  • Yoni’s admiration for Adam Runquist and invitation to connect on LinkedIn

In this episode of the Ecomm Breakthrough podcast, host Josh Hadley interviews Yoni Kozminski, co-founder of Escala and MultiplyMii. Yoni shares his extensive experience in e-commerce, discussing the challenges Amazon sellers face, including inventory constraints and increased advertising costs. He emphasizes the importance of delegation, planning, and decision-making in business growth. Yoni also talks about the value of having business partners with diverse skills and the significance of annual strategic planning. Additionally, he recommends “The Founder’s Dilemma” for its analytical insights, praises Text Expander for productivity, and admires Adam Runquist for his ecommerce expertise. Yoni concludes by offering discounts on his services and inviting listeners to connect on LinkedIn.

Here are the 3 action items that Josh identified from this episode:

Action Item #1:
Adaptability is Key: Keep abreast of the evolving e-commerce landscape, including challenges like inventory constraints and rising media costs. Embrace flexibility and swiftly adjust strategies to maintain competitiveness amidst new market entrants like Walmart.

Action Item #2:
Empower Through Delegation: Strike a balance between delegation and control within your e-commerce business. Identify specialized roles for non-core tasks and entrust capable individuals with responsibilities, freeing up time for value-driven activities and fostering team empowerment.

Action Item #3:
Strategic Scaling and Hiring: Prioritize value-driving activities by conducting time studies and delegating tasks accordingly. Engage in annual planning retreats to set clear business goals and ensure alignment among co-founders.

Resources mentioned in this episode:

Special Mention(s):

Related Episode(s):

Sponsor for this episode…

This episode is brought to you by Ecomm Breakthrough Consulting where I help seven-figure e-commerce owners grow to eight figures. 

I started my business in 2015 and grew it to an eight-figure brand in seven years.

I made mistakes along the way that made the path to eight figures longer. At times I doubted whether our business could even survive and become a real brand. I wish I would have had a guide to help me grow faster and avoid the stumbling blocks.

If you’ve hit a plateau and want to know the next steps to take your business to the next level, then email me at josh@ecommbreakthrough.com and in your subject line say “strategy audit” for the chance to win a $10,000 comprehensive business strategy audit at no cost!

Transcript Area

Josh (00:00:00) – Welcome to the Ecomm Breakthrough Podcast. I’m your host, Josh Hadley, where I interview the top business leaders in e-commerce. Past guests include Kevin King, Michael Gerber, author of The E-myth, and Matt Clark from ASM. Today, I have the pleasure of speaking with Yoni Kaminski. He’s the co-founder of Escala and Multiply, Me and South Call, and today we are going to be diving into the intricacies of business plan setting. How do you create your annual goals? How do you create your leadership team in order to support those goals? And ultimately, what are the effective strategies that are going to help you scale from 7 to 8 figures and beyond? And as a special note, in our previous podcast episode, Yoni shared valuable insights on building operating systems and outlined the four core processes crucial for building a $20 million FBA business. He actually showed it behind the scenes. What does an org chart look like for a $20 million business primarily running on Amazon FBA? So, if you haven’t yet listened to that episode, go find that in the archives.

Josh (00:00:53) – It’s well worth a listen. And I am super stoked to have Yoni back on this podcast. him and I can talk about business, operating systems and strategies all day long and so on that note, Yoni has over 15 plus years of experience in creative advertising, digital marketing, and e-commerce, working with the likes of Mercedes-Benz, Mastercard, Sony, Mondelez and successfully scaling an e-commerce business from 2 to 5 million in less than 12 months before it was acquired. Yoni sits as the CEO of Escala, a process improvement management consultancy, and MultiplyMii, which is an executive search in HR business based in the Philippines. With a 120 plus strong global team supporting e-commerce businesses professionalize and scale their operations. So, with that introduction, welcome back to the show, Yoni.

Yoni (00:01:34) – Josh, it’s an absolute honor to be here with you again. really, really just looking forward to digging in and as always, trying to create some value for those who tune in.

Josh (00:01:42) – Awesome. Well, Yoni, I know we already talked about the length of this podcast episode, and we toyed around with the idea of, oh, we may finish early, but the reality of this is if we really wanted this to, it could be a three hour plus episode because we could just chat for hours on end.

Josh (00:01:58) – And that’s what I love. I love the way you think and the way you strategize. So, Yoni, I’m curious to hear from your perspective since the last time we talked, you’ve had more clients that have worked, you’ve worked with Escala and MultiplyMii. Amazon has come out with a lot of new inventory placement fees and low inventory fees, and the operational efficiency of an Amazon FBA based business is getting more and more important. So, I’m interested to hear kind of from your perspective, what do you see going on in the e-commerce space, especially as it relates to Amazon sellers?

Yoni (00:02:28) – Yeah. I was going to say we could totally Joe Rogan this one out and get to the three and a half for our links here. But let’s try and keep it tight so the audience doesn’t have to listen to me for extended periods. But in terms of what I’ve seen, I think it breaks down into a couple of different streams. I think the first sort of blanket statement is that it is a far more challenging environment to operate in as an Amazon seller today than it was.

Yoni (00:02:50) – 1218, 24, 36 months ago. Absolutely. And the constraints around inventory, I would say it’s just one of the things that has been plaguing sellers. Not to mention the compression when we talk about the cost of media, what it costs today versus what it used to cost, and the implications, obviously, on businesses and, and how you can now run them, not just at a revenue growth, but at a profitable growth engine. So, it’s been a challenging time. It’s been a challenging time for, I think, a lot of sellers. I would say our Escala business definitely bears the brunt of a lot of that. We used to work with a lot of aggregators. That was, I would say historically, like our sweet spot. And when all of the funding dried up and people were defaulting on loans and, and the market just changed what felt like in an instant, you know, it even sent us back to the drawing board to really consider. So, what I’ll say in terms of the market and what we’re seeing from the lens of working with businesses, particularly on the Escala side, is that while systems and processes are critical for growth, for streamlining processes, it definitely feels like a little bit more of a luxury item.

Yoni (00:03:53) – And I would say, you know, not just because I’m the business owner, but I think that a lot of people who are really trying to climb meaningful heights and getting to these, you know, eight figure and 20% net profit margin type, operations, you’re never going to be able to sort of just walk your way through it. At some point, either something’s got to give, or you have to invest the time, whether it’s with us or individually, you really need to think through how you are actually going to build this business when it is far more complicated. And so, I would say that’s a long-winded response, just sharing the market. You know, having said that, there are people that are still thriving. There’s still a lot of opportunity inside of the Amazon platform. And Walmart is really starting to become a challenger brand as it relates to the marketplace. And, you know, I think that’s something that I’ve noticed as well on the side that, even in China, when we look at the launch of teams versus just having Alibaba or AliExpress, you know, there is new competition.

Yoni (00:04:45) – I think that that’s healthy. It’ll help keep Amazon accountable. And, you know, at some point they can’t just keep jacking up the prices when it comes to what people are willing to spend on media, because while their customers are first, ultimately, businesses need to make money and they need to be profitable.

Josh (00:05:00) – Yeah, 100%. And you said it correctly. Like the script is completely flipped over the last 12 to 18 months. on Amazon and especially for those of us that got started earlier on before 2020, I mean, this is a completely different ballgame. And if you’re not operating your business in a more professional manner, man, I think you’ll just have a shorter lifespan in my opinion. So, Yoni, I’m curious to hear from your perspective, you said you’ve had more people reaching out to you, and with Escala, needing help for business process and documentation and operationalizing things. So, I’m interested to hear why people are reaching out to you. What are some of the pain points they are experiencing?

Yoni (00:05:40) – A great question.

Yoni (00:05:41) – So we were fortunate enough to be invited to speak at prosper last month, and we talked a lot about we actually took a case study of a business that had grown from. Nothing is a side hustle to a million by year two. It was two 2.5 million hits, about 6 million in revenue. And then it fell off. The growth just stagnated. And it was really a case study on what are the things that need to be true in that journey for you to actually achieve the highest value success. And it was effectively pulling from several of our clients and the most typical story arcs that we see. And so, I would say where people are reaching out or when they would need to reach out from a process perspective typically falls into a number of different buckets. So, if it’s found a lead and it’s a business that’s grown from nothing to $5 million in revenue as an example, often you’ve found your way through it. You know, you talk about the bygone era, the golden age, the gold rush of Amazon from, let’s say, 2014 to 2019.

Yoni (00:06:35) – Things were so easy compared to today. And so, you would have a lot of founders that would struggle to relinquish controls. They want to be involved in every aspect of the new product development, perspective, inclusive of keyword research and understanding that one thing that might come up or if it’s around the customer support function, making sure that they are the voice of the brand, it’s the only opportunity that you actually have to touch and engage with their customer. So that was really important. And I think that for a lot of these founders who are really passionate about the products that they bring to market are passionate about that, that touch and feel and the brand that they’re trying to build. They can often get lost in the details and find it really hard to relinquish control. So, I’d say one of the major hurdles or obstacles is that founders think that they need to be doing everything in order to have an ability to be not just informed and consulted, but to actually have an actionable path to impacting the business.

Yoni (00:07:26) – And, you know, I’d say for that specific problem, it’s all about making sure that you build the right systems where you’re still consulted, informed, and can play those pivotal roles in is this product going to market that’s largely based on a criterion that you’ve set before you bring it to market? You know, I think, we all need to sort of put our egos to the side a little at times and say, you know, we all bring something valuable to the table, but maybe we’re not necessarily this product savant, whereby nothing we’re doing is repeatable. And, you know, there is this magic that sits upon us as the founder of a business with a specific product that we’re bringing to market. So, that’s one that’s sort of one issue. And I mean, stop me if you want, Josh, I can go into the next one and the next one and give you sort of 2 or 3, or we can stop and discuss each, whichever, whichever path feels more appropriate. Yeah.

Josh (00:08:11) – You only I couldn’t agree with you more on that note. I mean, I think I would love to hear you just keep rattling off a couple more ideas. What are those pain points that you continue to see from people reaching out?

Yoni (00:08:20) – Absolutely. So, we’ve seen 150 businesses today. So, there’s obviously a lot of unique pain points. But for the most part there’s a lot of repetition in terms of the challenges that come up. So, the next thing that I would say is very, very common when we talk about business challenges for a lot of founders, is that limited planning. So, it’s all fine and good to say I want to launch products this year. That’s my goal and that’s my objective. But how does that actually relate to, you know, the revenue versus profitability against each product or what are the specific markets? What is the roadmap to us getting there? How am I assessing specific channels and making, in many cases, really tough decisions around killing? In some cases, you know, your historic hero skews, but really being intentional and understanding just because it’s my little baby that I have so much love for doesn’t necessarily make it make sense.

Yoni (00:09:09) – And then I would say, the last thing that is really, really common is not just the planning component and staying on track, but it’s how do I as I have an ever growing and evolving business? How do I continue to maintain control of what is happening across it? And what I mean by that is not micromanagement control, but rather how am I getting the right inputs and the right level of information so that I can make meaningful decisions that will impact the course of a business and drive it on track? So, what is my, for lack of a better term, my business operating system looks like? How am I getting those feedback loops? How am I getting the right people informed, consulted, getting those inputs, and then making decisions quickly? Because I would say whether it’s around a parent skew or whether it is around any business at all, the thing that often kills us is that indecision and that real inability to make quick decisions on what is important and coming back to it without the right operating system, without understanding where you are driving and without being in every single nitty gritty little detail.

Yoni (00:10:06) – As we mentioned at the very start of the common problems of founders, you have an inability to reach, you know, the top of the mountain, Yoni.

Josh (00:10:13) – Those are great. And I can actually empathize with a lot of those things, because those are the exact issues that I have faced. And honestly, to be honest with you, I continue to face, I think it’s important for our listeners to understand that, you know, implementing a business operating system and hiring team members. It’s not a good thing, I did it, and now my life is easy. I get to sit back, kick back, relax, and everything’s on autopilot. It’s far from it, right? It’s, you know, when you cross the seven-figure mark, there’s certain business operating systems that you need to implement in your business and certain roles that you need to delegate responsibilities to. But the more you grow, the more those challenges continue to multiply. And. So, it’s certainly not a set it and forget it.

Josh (00:10:51) – You probably need to reinvent your business operating system continually as you grow. And that’s what I love about business. At the same time, Yoni, is that I think out of anything else in the world that you could be doing, it is one of the most like it’s forced self-improvement at a very high level, because if you’re continuing to grow it, you are forced to have to like, learn patience, learn how to work with people, learn how to prioritize. And so, I think it’s one of the best self-improvement exercises anybody could go through as being a CEO of a small business that’s growing and scaling. Quick. Yoni, let’s dive into each of those three topics that you talked about in those pain points and how you’ve been working with clients that have come through with Scala to help them. And we’ll start going back to number one, which is delegating and not releasing control. But I also want to ask you another question before we get into that just came to my mind. There’s the adage and it’s in the book called Clockwork by Mike Michalowicz.

Josh (00:11:43) – And he talks about focusing on understanding what your queen bee role is, which is I’m the best at this thing. It gives me a lot of energy. This is what differentiates our business. And I think there’s a fine line between thinking like, I am the product expert, and nobody can create products as good as me versus somebody that, you know, I’ll take my wife as an example, like she’s an amazing graphic designer. Could there be somebody that could replace her out there in the world? Probably. But finding that person is truly like finding a needle in the haystack because she’s so good at that graphic design element. So, I’m taking you up and giving you that challenge to say, you know, how do you combat or dispel those myths of I’m the only one that can do this while also being able to delegate sometimes big responsibilities like right now, supply chain on Amazon, you make a mistake and you could be losing tens of thousands of dollars, right. So, this is not a simple like, yeah, just go make a mistake.

Josh (00:12:33) – So Yoni give me your thoughts and answers here.

Yoni (00:12:36) – Yeah. Great. Great question. You have never given me the easy ones teaming up with the easy ones. It’s always a difficult one. So, I thank you for that, Josh, because it makes me better as well. It makes me dig deep and really think through, you know, how I can be introspective about it as well. And I think that I’m seeing myself up here a little bit in a way, because I think that the first and most important part, if you take that queen bee concept as well, when we talk about delegation, is to be very clear on what you are the very best at and what you are not. And spoiler alert for, you know, I’d say typically, maybe earlier stage entrepreneurs that, you know, you’ve just been on the up and up, you’re probably not as good at everything as you might think you are. And as someone who, you know, definitely had some pretty exciting, just easy run into the start of some of the businesses that I’ve, you know, I’ve had some success in and then seen more challenging times.

Yoni (00:13:23) – you’re not, you’re just not that good at everything. And I think one of the really important things is to acknowledge what are those things that are your first individual major point of difference. And then obviously as a company, then what are you driving toward? So, coming back to that point around delegation, how we approach these types of things internally is that it also, you know, everything starts from top down. So, when we talk about process documentation, it’s top down. You have to look at what are the big drivers in the business before you get into the nitty gritty details of what each individual person is actually working on and how they actually deliver each of those processes that they’re running through, whether it’s in their head or on a piece of paper or on a piece of technology. You know, effectively we’re all we’re all running through something that it has been built or we have built. So firstly, we go through an exercise where we look at every key component of the business and we define accountability.

Yoni (00:14:10) – So who of our senior leadership C-suite, depending on how far you take it and coming back to who do you really feel or who do you have a high degree of comfort that you have to give them the keys to drive. And you know, it’s not, in many cases, having a salaried employee, as someone who is accountable for, for a really significant component of the business. And when I say accountable, that does mean you’re executing on it. It’s that the buck stops at you that you’re not having the right feedback loops with an individual who’s maybe taking your supply chain and logistics, challenge right now, if you have a supply chain and logistics manager that’s responsible and is an expert in that, just making sure that you are creating the right balances and checks to be able to, at the very least, be a second pair of eyes to audit it and say that looks all good or something doesn’t feel quite right there. Let’s dig a little deeper. So, I would say the first is knowing who is accountable and who has the best skill sets.

Yoni (00:15:01) – I’m very, very fortunate that I have two business partners, and each one of us are quite complementary in our skill sets. You know, there’s 1 or 2 things that I’m quite good at, and I’m pretty terrible at everything else. And I would say with my business partners, they have a tremendous capability from an operations perspective all the way through to finance function and just general team management. You know, they excel well beyond my personal capabilities in each of those functions. And so, coming back to it, we’ve delegated the accountabilities around about 150 different accounts around our business that we now know where the buck stops and who you know, who is accountable. And so, things don’t fall through. So, if you’re looking to do that for yourself, for your Amazon business at home, I think the first most important thing is understanding what are the key things that make up your business, who should be accountable for them? And then when it starts, when you start to think through delegation, there’s two approaches that you can take.

Yoni (00:15:49) – One is, I would say if you’re a smaller business, if you’re just starting out, you don’t have a lot of management experience. And this is sort of dipping your toes into it. It’s really just looking at the things that are not particularly moving the needle for you, as you know, a major driver in the business as a smaller business and then finding specialized roles. So, our staffing business, MultiplyMii, finds Filipino talent. You know, we’re not trying to bring in generalists for companies. We’re not the right fit for businesses that are trying to have a, you know, a CFO, creative director, slash inventory and supply chain specialist. you know, if I think the saying goes, jack of all trades, master of none, and that will be true. So, coming back to taking your first steps, look at a role that is critical. I think PPC is a really good example. Or keyword research could be even bundled with something like PPC, because they’re going to be quite similar in nature in their skill sets.

Yoni (00:16:39) – Finding your left or your right brain person and putting that job description together. We like to use the four-hour method, which we can talk about after if we get down that path. But ultimately that’s one way that you can approach it. Let’s say you are a little bit more advanced, or you had a little bit more cash than another strategy you could implore would be to find skill sets that you don’t have. So, for me, the first thing that I would look to delegate always, well, at least up until this point, you made the really good distinction that being a CEO of a small and growing business, you’re always having to level up finances far from my strong suit. And so that is something on my long list of things that I need to focus on to improve. But I would look and have brought in a business partner who, you know, built us a financial model for the year 2030, and finding someone who you can delegate that out to, that has skills that are beyond yours is sort of the other end of the spectrum.

Yoni (00:17:26) – But I would say you’ve got to build the right balances and checks, or in my case, they have to have skin in the game so that if things fall off, then, you know, the ship’s going down with both of us and we both have, you know, quite a bit to lose, Yoni.

Josh (00:17:38) – I think. On that note, I’m interested to hear kind of your perspective on the way I approach, kind of like scaling up a business and, and who we decide to hire, when and why. so, with us, you know, our business has been 100% bootstrap. I am certainly not an expert at everything. Right. I held on to the supply chain for probably way too long. Right. because I’m not a supply chain expert, I don’t get much enjoyment out of it whatsoever, but I continued to hold on to it for too long. But here’s the thing. I guess I would caution listeners when they hear you say, hey, I’m not a finance person, which honestly, most entrepreneurs listening to this, I would say 90% of them are probably going to say, yeah, I’m not a finance person.

Josh (00:18:17) – That does not mean you need to go higher or go partner with the CFO immediately. Right now, in due time, you could probably cross that bridge. But what I think is important and you alluded to this, and we can talk about it a little bit more, is like you got to understand what the value drivers in your business are and what are the critical roles that help fulfill that process or that sale. Right. And so, for an Amazon based business, so many people have crossed that seven-figure mark on their own with the help of a VA, because Amazon is doing a lot of the heavy lifting, especially to begin with, with, you know, the fulfillment FBA. Right. However, you can do the basic supply chain stuff and it might not be 100% efficient or optimized, but it’s good enough to where you’re making some money, right? So, if you have all of these different functions, you’re like, well, I need to get really good on my books.

Josh (00:19:07) – So do I hire a CFO or an accountant, an accounting controller, or do I hire a supply chain manager, or you know what, I also hate Amazon PPC. So, do I hire a PPC manager? What is it that I need to hire first? My recommendation would be to conduct a time study because you, as the CEO of the business, your UA should be focused on the most valuable tasks in the business, right? If you’re working on something that really isn’t moving the needle, then why are you working on it to begin with? So, you’ve obviously worked on something, right? You’ve obviously moved the needle enough to get you to seven figures. That’s great. But now in order to scale, you need to then figure out, okay, what are those needle moving activities? So, I could do more of them and get more of the extra stuff off my plate. So, here’s how I would do the time. Study you. Document your time in 15-minute increments over the course of two weeks.

Josh (00:19:53) – And yes, that’s super tedious. And yes, you should be writing that down and analyzing it when all is said and done. But the outcome should be something like this. How much time are you spending on Amazon PPC? How much time are you spending on supply chain fulfillment related activities? How much time are you spending on new product development or keyword research, product ideation, customer service, etc.? Project management? And what I would do is take it if I’m not an expert supply chain manager and I don’t, I’m not interested in that. And it’s taking up 50% of my time, then I know that’s the next role that I need to hire. If it’s only taking up 5% of my time, I’m not an expert. I don’t love it, but it’s only taking up 5% of my time. Whereas, let’s say project management is taking up 3,050% of your time, then maybe hiring that project manager is that next role for you. Right. And it’s kind of this virtuous cycle of you take things off your plate, you give it to somebody else that allows you to double down on doing those value needle moving activities in your business.

Josh (00:20:49) – And then you’re going to take more onto your plate. And then you’re constantly just re analyzing, offloading, hiring while at the same time, all of this should serve one purpose, which is you as a business owner, need to be focused on the value needle moving activities which drive revenue. Because if you don’t and I’ve learned this from experience, if you get too caught up in the operating system and you turn into an operator and your product idea dries up and you’re not launching as many successful products, then you create this downward spiral, right? So, it’s definitely a delicate balance. So, Yoni, give me your thoughts on my thoughts, my way of approaching this.

Yoni (00:21:25) – I absolutely love it. Honestly, Josh, that is aligned with the advice that I typically give entrepreneurs. The only thing that I would add to that is if anyone you know, everyone in my company has seen my calendar. I feel like I’m somewhat known for it, but I blackout every minute of my day and I will even reset if something didn’t happen.

Yoni (00:21:46) – I will always be looking at it. It’s all color coded as well; you know? I know what is, for example, new business versus partnerships versus marketing versus operations versus internal meetings. All of that is tracked. And I would say to make it sort of a simple system on the back of how you audit what Josh has just shared. And I think that he’s spot on. If you can get to the 15-minute increments, then that’s fantastic. And you hold yourself accountable and you go through it for two weeks. What you can then start doing when it comes to delegation is look at it from a couple of different lenses. I would say a simplistic lens would mark each one of the activities from a five to a one, a five, meaning something that needs to be you. There would be no way, at least in your current frame and experience, that you could feel like you could really delegate that specific thing off versus a 1 or 2 where it’s sure, there might be a bit of work in building out some of the SOPs or.

Yoni (00:22:37) – But it could be handled off. Someone could get to 80% of what you could take too relatively quickly. So that’s a really good way to build those insights in how to know what are the things that you should be delegating. I would say another way of approaching it as well is not just looking at the delegate to ball ability making up words here, but I think you guys all understood what I was trying to say. It is looking at the impact. So, you’ll often get, or at least for me, I often get into these cyclical recurring meetings that will happen and I’ll be answering them, and I’ll realize, you know, maybe 2 or 3 weeks in, I’m not energized or excited about that meeting, and I don’t feel like I’m adding the value that I should be. And so, assessing what are the things on the back of it that actually move the needle? What are the things that you were excited about, that you felt like you were in your own power? And that’s really another great way to get a little bit more clarity on self and, and what you are really sort of driving toward and to is, is one of the things that moving the needle to, to again delegate things out.

Yoni (00:23:34) – So I think you’ve done a fantastic job of both how you’re approaching it and also how you’re articulating it to those listening. And it’s a really simple exercise, and it sounds a little bit scary, like writing everything down. And but what you’ll find is that, you know, in a lot of cases, you’re, you’re making notes or you’re handling this, this system in one way or another. But I think one of the big points that sort of led us into a part of this conversation is that at the end of the day, everything comes down to planning. And so, I would just look at this as like a micro focal planning and execution. And I can tell you, if you do what Josh shared and you do it for a couple of weeks and you continue to do it, you’re going to feel so much better about all that you’ve achieved, because you’re going to look back and you’re going to see exactly what you were doing. You see exactly when you feel at your optimal. And ultimately, you’ll just be a better business owner operator, just by taking some very tangible, actionable steps to getting clarity on what’s best for your business and subsequently, what’s best for you.

Josh (00:24:25) – Yeah, yeah, I love that segue into kind of our next topic, which is going to be more on that planning. But I also want to give you a shout out on that, like the color coding method of your calendar, like I’ve already noted. Like that’s something I think I want to do. And the way I would color code it is to be like, here are administrative things that I am doing. These are just keeping the businesses head above water. But guess what? If 80% of my time is focused on those things, then guess what? Don’t be surprised if the revenue is not growing significantly, because you need to make sure that the majority, which means more than 50% of your time, is dedicated to activities that are going to expand the business drive sales. That’s a lesson that I’ve had to learn the painful way. the only would you agree with that statement as a CEO, that they need to have 50% or more of their time focused on those value driving activities?

Yoni (00:25:13) – Absolutely I would, I would say, as you get even further clarity on your specific role.

Yoni (00:25:18) – Actually, it’s funny, I hate the CEO title. I think of all sorts of titles and job descriptions. It’s the most ambiguous in terms of what you’re truly accountable for. So, I think if you’re going to take on this exercise, you’re going to learn a lot as to what are the big drives. What are the things that I’m passionate about that are actually moving the business forward? And for me, I realize, you know, I’ve spent a lot of time in marketing and sales roles. I’m really passionate about relationship building. I’m really passionate about actually getting to know people and, you know, coming on a podcast like this and being able to add value to other people’s lives, whether they work with me or not. You know, I mean, I don’t really think that’s not my underlying personal objective. I just look at all the mistakes that I’ve made over the years and if I can, from this podcast as an example, just help one person to make one less mistake, then that for me is just one of them.

Yoni (00:26:01) – The greatest feelings are knowing that you’re able to have a positive impact on other people’s lives. And so, coming back to it, when I’m looking at my calendar, if I’m not spending the bulk of my time on things like getting on calls with new potential partners, finding opportunities to support the e-commerce community and beyond, you know, I spend a lot of my time today, either going to or speaking, being invited in cases to speak at events. And so, a lot of effort goes into every presentation. And you know this yourself, Josh, you know, you’re not getting up on stage in front of hundreds of people with something that’s mediocre. And so, it’s about really thinking through what value can you create today that someone is going to leave that audience and say, I’m going to be able to act this on the back of, you know, a 30, 40, 50-minute, presentation. So, yeah, definitely. definitely should be at least 50% of your time focused on value creation in a business.

Yoni (00:26:52) – But I would even say, like, for me, I’m trying to hit that 70 plus mark. That’s really, you know, that’s really from my accountabilities and my responsibilities and things that I’m looking to do. That’s really where I’m, I’m trying to hit. All right.

Josh (00:27:04) – Yoni, let’s now pivot. And I mean, this is a great tangent you talked about, how important it is to be able to prioritize and understand the value levers that you’re creating in your business, which I think is important for you to then be able to implement in your annual planning. Because if you’re not clear on what’s actually moving the needle sales wise and revenue wise, then any annual goals that you set up, you’re just kind of picking from a random hat of this sounds like a fun thing to do. Instead, your annual planning and your goal setting all needs to be centered around the value driving metrics of the business. So Yoni, talk to me more about, you know, the mistakes you see people making with their annual planning and what direction and advice you give to people to help them better create plans for the business.

Josh (00:27:45) – Yeah.

Yoni (00:27:45) – So, I mean, I always like to draw on personal experiences. And, you know, if I haven’t called it out enough, to date on this podcast or our previous one, I am the furthest thing from perfect. You know, I’m evolving every day, every week, every year. The longer that I’m in business in general. And I think that it doesn’t matter if you’re selling on Amazon like I used to, or you’re running a service business, or you’ve got a tech company or whatever it is that you’re doing, you’re always going to continue to evolve. And one of the things that we did this year, and it was largely led by my co-founder, Libby, who’s our CEO and is very, you know, he’s one of the more operationally talented people that I’ve had the good fortune of knowing and working with for, for many years now. What we did was we spent five days on a strategy planning retreat where the three of us virtually locked ourselves in a room and from after breakfast and I worked out and we were in Thailand.

Yoni (00:28:34) – It was a pretty nice setting, but, but after we got through that, we spent, you know, ten, 12 hours just sit going through these sessions for the five day period and, and what we were able to do or how we structured it, remembering that, you know, I want people to take away tangible, actionable elements here. So how we structured it, and I think what’s working for us is that we looked at all the critical decisions around the business and the different functions inside of it. So, to list off a few things for us, but I can give you examples that would be related to an Amazon business. For us it was, you know, what does the MultiplyMii business model look like? What does the Escala business model look like? How closely are they from an operations perspective? What does the revenue model look like? Are we looking at global expansion? It has been a hot topic for us in other geographies, for our staff business. So we listed all of the critical things that we needed to make important and informed discussions on.

Yoni (00:29:21) – And then what we would then do is we would then put together all the potential questions that we would need to ask in that session. And so we all built into this list the questions effectively, the statements that these things needed to be true in order for it to make sense for us. And we then enter into these 2 to 3 hour sessions of dialogue around these specific things. So when you talk about doing that for your Amazon business, I think one, it’s not good enough just to say we want to be an eight figure business. I think that so much of people’s identity is on that revenue number. And newsflash, if you’ve got an eight figure business and you’re doing 3% margins and your cash flow is appalling and your, you know, your ratios on debt are through the roof, then you don’t have a real business. So you’ve got to dig deeper than just that superficial level in terms of what needs to be true. and so you made a really good point before Josh and it, you know, sparked the inside around the presentation that I gave.

Yoni (00:30:12) – Just a month ago at prosper, talking about the fact that one of the common experiences is that when you’re first starting off, you launch a lot of products because it’s easy to get your hands around all of the complexities that are obviously that are Amazon. But, you know, when you’re a $1 million business, you can handle most things and you can be launching five, six, seven, eight, ten products a year. If you know, if you’ve got the capabilities and the understanding about the niche that you are selling into and the brand that you are trying to build. But as the business grows, so too does the complexity. And for a lot of people, the things that fall off is new product development. And a buddy of mine, Adam Runquist, Adam Heist had an analogy where how he positioned it is that when you launch products on Amazon, it’s like melting ice cubes. You know, you drop a big block out into the world and it’s going to go. But slowly but surely there’s going to be erosion, whether it comes from competitors, whether it comes from margin compression, whether it comes from all these different things.

Yoni (00:31:06) – And you need to be launching more and more products. So, to your point, Josh, if you get stuck in 80% of your tasks being these many or these things that are just keeping the lights on, as opposed to growing the business and growing it in a meaningful way, you can really fall off. So coming back to myself here, when it comes to sort of that, that strategy planning and how to make sure that you’re going about it the right way, understand what are the net margins around new products and the niches that you’re focused on, set targets that are aligned with that criteria, knowing that in order for you to launch ten new products a year, you need to come up with 50 potential products. So, if you don’t have the machine running where you’ve got someone focused on identifying the new products, that then can be filtered down into the criteria that then effectively matches it to be able to launch those products and have the effective launch strategy attached to it. With how you’re going to approach early-stage reviews and media buying.

Yoni (00:31:56) – And you know that transition from launch to ongoing brand management. If you don’t have each of those aspects dialed, at least at a high, I’d call it more than a theoretical level, at least at a high level, where you understand tangible, actionable outcomes that need to be true, then you’re not going to get there. The further you can sort of break down the needs that are that need to be true across your business, the more likely you are to actually hit that target than just saying, this is the year that we’re eight figures and we’re going to get there. Don’t worry about it, because you might get there. But again, like I called out before, if it’s a 3%, net margin business and you’re absolutely over-leveled, then you know, Amazon changes one thing, increases that cost per click by five, six, 7%. And then there goes your heart’s not to be, not to be too, dark and dire here. But, you know, I want people to succeed and be very intentional about how they approach their business.

Yoni (00:32:50) – Yeah.

Josh (00:32:51) – I think that is so important. Like for most people, I think they make the mistake of, you know, with the annual planning, they’re just throwing out big revenue numbers and then just hoping and praying somehow will miraculously get there. But if you really look at it, annual planning and your goal setting, you should be able to backwards plan everything in your business and you should say, all right, if we want to generate $5 million in additional revenue, how are we actually going to do that? What percentage is going to come from new product launches? Right. And what’s our success rate on product launches? Is it a 50% success rate, 25%, 75% success rate? That then backs down to like, how many new product ideas do you need to be finding every single week. Right. And that’s like your main like, all right, you want to talk about a KPI that is your main KPI, ten new product ideas every week, because I know I’m going to need 100 in order to whittle down to find my top ten.

Josh (00:33:38) – And then out of those top ten, 75% are going to work. So, I’ve got 7.5 products out there that are significantly moving the needle in a couple others that dropped off. Right. And so likewise, I think when it comes to annual planning, you just need to be able to backwards plan everything if you want to grow through affiliate partnerships. Okay. How much revenue does each affiliate need to be bringing in? How many affiliates do you need to be reaching out to? And then that brings it all back to like, all right, how many cold emails are you sending out to affiliates on a daily basis? If you need a thousand micro-influencers at the end of the year that are driving $50,000 in revenue every month, right? Like. You can see how granular things get when you plan things backwards. And then I think that leads to what you’re going to talk about now, Yoni, which is, you know, implementing a business operating system so that you are getting the inputs in the data about the business so that you can make informed decisions.

Josh (00:34:26) – And one of the things I’ll give a sneak peak to our listeners of, like what we’re doing with our business operating system, we have what’s called the level ten meeting. You know, that’s from the iOS framework. But part of that we have our weekly scorecard that we go through, and that weekly scorecard goes through. Hey, did we find 20 new product ideas last week? How many new products have been added to our future product pipeline? Right. And then we also have like what was the conversion rate last week. What were our sales? But I’m less interested in those because they’re historical figures. What I’m more focused on is how many copyright violations did we submit this week because people are cheating. And then that’s ultimately going to increase. Hopefully our revenue and market share down the road as we remove infringing competitors. Right. Those are leading indicators that you can focus on in your business that will then have an impact on the lagging indicators, which is going to be your gross profit and your net profit at the end of the day.

Josh (00:35:18) – So Yoni, tell us more about this business operating system and how do you implement it and what does that structure look like in these brands you consult for?

Yoni (00:35:26) – I just want to give you a shout out. Live on your podcast. I was sitting there saying, this is where you can articulate it as lead and lag measures, and you just always that one step ahead. You’ve got, you know, you really got it. Yeah. Yeah. Well, I mean you gave the value to the audience and to take it, you know, to take that on. you know what, Josh is very well articulated is the impacts that you can have on those lead measures. And that’s why he cares about infringement notices and what can actually be inputted. You can’t at the end of the year say, oh, well, we could have done more revenue. Well, you could have, but it’s a lag measure and there’s nothing that you can actually do to tangibly impact that. So yeah, I just wanted to say very, very well put.

Yoni (00:36:04) – And you know, if you are listening in and you’re thinking about all the things that people talk about all the time, it’s often lag measures and you need to be on all these lead measures, like we were both talking about just a moment ago. When we talk about the number of affiliates you need to reach out to versus the number of new products that you need to identify in order to source and produce, these are all the things that you can actually have an impact on, and they will ultimately get you there. So, so really, really important. Josh, you also shared, the L10 meeting, the level ten meeting out of the iOS, the entrepreneurial operating system, framework. We were talking before we hit record, but we just attended the iOS worldwide conference last week, and it is an incredible community. The book Traction Getting a Grip is an incredible book that will cost you. I would say I was about to say it in Hebrew. It’s getting, it’s getting late here, but, it’s, it would translate loosely to what I was going to say to, like, it’s pretty much free, the cost of that book and reading it and being able to implement that into your business or even aspects of it, even if you just took the L10 concept, which is a 90 minute meeting that enables you to look at all of are we on track or are we on track or off track for all of those lead indicators that you’ve set through in the framework for iOS is these 90 day rolling? They call them rocks, but it’s rolling goals that are based on these lead measures across each of the key functions.

Yoni (00:37:18) – And if they’re on track, then you don’t talk about it. You just continue to plow through the meeting. It’s a very quick section. And if it is off track or there’s something that needs to be communicated to the leadership team, then that’s where you go to the bulk of that meeting. And it’s the IDs that identify, discuss, solve components where you’ll sit there and you’ll actually try and, you know, QA aspects live. Or if it’s a bigger topic of conversation, then you’ll then parlay it into likely a meeting that’s with the relevant parties inside and look to solve it. You have a to-do list. And so coming back to it, that is a great business operating system when it comes to the stuff that we are consulting with or even how we support a lot of clients who are either new to outsourcing and working with remote talent or are trying to do it, you know, with 20, 30, 40, 50, 100 team members and looking for our guidance and support, then there’s different levers and mechanics that you can pull at the different levels when it comes to those feedback loops.

Yoni (00:38:10) – But at the highest level, I think, I think the iOS framework is a really, really good, framework that will help you derive a whole lot more value around your general planning when we are consulting. there’s a couple of things that we’ll draw on and will work with. The founders are one, you know, how the scale of business works, is we’re building problem statements at the start of an engagement. So, what we’re doing is, you know, I like to say it’s like playing therapist for your business, where we interview founders, senior leaders, and we understand what are the operational challenges and pain points that exist. And on the back of understanding that, that’s when we actually dive in and focus on those areas. Everything always comes with SOPs, training, videos, documentation of future state accountability, and org chart all the critical things that are needed to have effective delegation in play. But what we’re actually doing on top of that, for a lot of businesses that don’t have that internal dialogue, is building a system that works for them, building something that has real critical thought and meaning so that you’re not in 100 meetings a week and you’re not seeing a whole lot of value that exists inside of them.

Yoni (00:39:10) – So that’s a higher-level answer around it only because it’s so nuanced when you’re going in. You know, I never want to give someone deep advice on their business in a first interaction until I understand what the real challenges, pain points and the key drivers and the problems are, it’s really, I think it’s a dangerous game that people can often play. And I think this comes with, you know, what I would like to say is like the death of the ego of the entrepreneur and realizing that you need to really interrogate and understand before you can give specific advice on someone’s unique problems inside of their business. Yeah.

Josh (00:39:44) – Yoni, I think you said everything very eloquently. And, if we wanted this to be, we could ramble on here for the next two hours and really get into the weeds. but suffice it to say, I think we’ll wrap things up here and I’ll leave with my three actionable takeaways. But before we get into those actionable takeaways, I’m sure there are some people that when they listen to this, their head is going to be spinning and be like, what in the world did they just talk about? And here would be kind of like my recommendations and advice to you.

Josh (00:40:11) – Implementing an operating system in the business is not something that you do overnight. Okay? This is something that takes at least from me, self-implementing. We didn’t work with a consultant. We self-implemented over the course of 12 months 12 months. Of refining, testing this, meeting out, testing that, meeting out to where we got into a good cadence that we were comfortable with. And we didn’t just follow. We didn’t just read the traction and say, all right, do this, this and this. What Yoni talked about. There’s a lot of nuances. And so, we took bits and pieces. I love following scalable code. That’s what Ryan Dice and those guys do, they do a great job. I like their framework. I took the iOS framework. I also used Alex Chaffin. he has another operating framework. And so, and then guess what? We pulled it all together. And then we kind of came up with our own operating system. So, this takes time. But here’s the important takeaway I think for our listeners is that, look, it’s going to take time.

Josh (00:41:03) – You’re going to need to create something that’s custom for your own business. but if you don’t do this, you will not be able to scale past eight figures and beyond. Now, there may be a rare unicorn that does. Right. And they hit the social media jackpot. Millions of views. And then they laugh and say, Josh, we did this just with one guy. But that’s more of the rarity and not the norm in business. The norm in business is that you’ve got to create systems and processes that can make sure everybody on the team is rowing in the same direction. So, Joni, would you add anything to that?

Yoni (00:41:35) – No, I think you’ve really hit the nail on the head there. I would just say exactly what you’ve done, which makes this very easy, is that not every operating system is going to work for every business. And so, looking at the Schaffen method, I think he might have updated what he calls it today. But looking at all the different operating systems and understanding what’s going to work for you is really important.

Yoni (00:41:56) – Just like when we go through a scale engagement, we’re always looking at what is your current, you know, we have a maturity analysis framework in terms of how systemized the business is. We’ll grade the business based on all the other businesses, and then we’ll say, great, we’re not going to get you to a five out of five in overnight. We’ll take you from a 1.3 to a 3.5, which is already really meaningful. You know, it’s a step change in the operational capabilities of the business, but you need to know where you’re at. And like a really good example is saying, if everyone’s working on Microsoft Word today, don’t expect everyone to transition to using Monday, Trello, asana with slack integrations and notifications and, you know, and having these automated workflows pumping out instantly, you have to understand who the people are inside of your business and who you are and how you want to be operating as well. So, I think Josh’s approach is just fantastic, where it’s let’s absorb as much information as we can about all the things, and then let’s build what’s right for us.

Josh (00:42:48) – Yeah. Awesome. Thanks for that, Yoni. Now let’s move into our three actionable takeaways from this episode. So, action item number one okay, you need to be able to release control of your business. Right. And that comes with understanding what are the needle moving activities that you do as the CEO as the business owner, we talked about a lot of stuff. So go back and rewind. Listen to that. But long story short, do it. Do some time studying. Make sure you’re tracking your time. Because if you’re not, it makes it that much more challenging. But I promise when you track your time, you’ll be able to identify those areas that you could offload to somebody else. That then allows you to focus on more things to grow your business. Item number two if you’re not doing this, you should be doing this. And that’s having an annual plan that then gets broken down into quarterly goals. But more than that, more than just saying, like, I want to be a $10 million business at the end of this year, you need to say very specifically, what are the specific give me three action items or levers that you’re going to be pulling to get to that 10 million.

Josh (00:43:42) – And what’s the gap? And then how out of those three levers, you know, how much revenue are each of those generating ones? Maybe new product launches, one’s affiliate marketing campaigns and one is extra sales channels, right. Those are great. They can drive revenue. How much revenue are you estimating from each of those? And then backwards plan how much work needs to be done to focus on the leading measures for those activities. Last but not least, the third action item here is to implement a business operating system. And we just talked about that. you know, basically you’ll need to create your own. And you can use consultant firms just like Escala to come in and help you understand your business and set something up if you choose not to go it alone. But just know that this is a month- long engagement. This is not a quick fix. That’s not going to be implemented overnight. But if you want to establish a true foundation for your brand, that will allow you to scale and allow you to continue to find success for years to come, the operating system is a critical foundation that your business will need.

Josh (00:44:38) – Yoni, it’s time for my favorite three questions that I ask each guest. Now, I asked you these questions previously, I have. I can’t even remember what your responses were back then. The world has changed since then. So let’s hear your fresh perspective on each of these. So, number one, what has been a recent book that has been influential and why.

Yoni (00:44:58) – We talked a little bit about this, before, my, my original answer was going to be a book called The Prime Ministers. and it’s, it’s all on the history of, of the country that I live in now, Israel. very fascinating. But I think for you guys listening in, it’s probably going to add that much value to your life. So, The Founder’s Dilemma, probably one of the more recent books that I’ve read that’s been, you know, in the professional development and personal development side, and it really taps into study on, I believe, about 5000 founders and the challenges that they go through. And. And sort of guides you through, sort of based on the inputs.

Yoni (00:45:29) – Like what happened where these businesses broke down. So again, I like to be very introspective and read through a study. You know, I can’t remember what my previous answer was, but it’s quite reminiscent of the style of the book. Not to the same level, I think. Good to Great Buy by Collins is just one of the great books of our time. It took them five years to produce that, but The Founder’s Dilemma definitely has a similar vibe in terms of that much more analytical study, so if you’re looking for a read, I think that’s going to be something that you’ll enjoy.

Josh (00:45:58) – Awesome. Great recommendation. All right. Question number two. What is your favorite productivity tool or a new software tool that you think is a game changer?

Yoni (00:46:05) – Favorite productivity tool. You know, even if I gave this last time, you could thank me later. It’s called Text Expander. There’s other platforms or tools that exist like it, but it is effectively a short code for anywhere. Whether you’re a PC or a mac.

Yoni (00:46:21) – It literally lives everywhere. And I use it a lot for, you know, make a lot of email introductions. So, people that I meet, I’ll build their bio one time and I’ll be able to simplify through a short code injection. I think if you have, you know, thousands of aces as an example, I think that that’s probably going to be quite a valuable tool for you to have to only type in, you know, a couple of caps letters or three numbers or whatever. The method that you build is. I think that that’s going to save you a tremendous amount of time.

Josh (00:46:46) – Awesome. That’s a great recommendation. Love that. All right, Yoni, final question. Who is somebody that you admire or respect the most in the e-commerce space that other people should be following and why ?

Yoni (00:46:55) – Has to be outside of you? Josh, obviously I feel like you can’t really name you on your podcast. It’s not, everyone, clearly everyone already knows about you here. So, to stay with the theme of adding value, Adam Runquist, Adam has to be one of the more impressive people when it comes to just the human component of what he stands for, as well as his knowledge.

Yoni (00:47:16) – He is very raw, shares everything. And I think, you know, just like you do. Josh. And what I find so inspiring about you is that you’re very happy to go to the places that are often uncomfortable and are often it’s not about the great successes of how we just grew our business, and everything was all peachy, but rather, you know, business is not, sunshine and rainbows 100% of the time. And he’s another guy that has that same, character type. And yeah, I highly recommend you check out his stuff. He’s quiet, he’s quite prolific on YouTube.

Josh (00:47:44) – Awesome. We’ve had him on the show, and I would echo those same sentiments. He’s a great person to follow. Yoni, this has been awesome. If people want to follow you, they want to learn more about your services. Where can people reach out to you and find more information?

Yoni (00:47:56) – Yeah, the best place to get me personally is going to be on LinkedIn. Yoni Kozminski and pretty easy to find.

Yoni (00:48:01) – There’s not a whole lot of people with my exact name. but yeah. And then obviously MultiplyMii spelt M-I-I for all of your recruitment needs. And we are Escala for process improvement opportunities. I’ll add in here and I’m shooting from the hip. But if you’ve listened this far in and I’ll send this stuff over to you at the end, but very happy to offer some pretty meaningful discounts on both of those businesses. So, if you’re looking to hire talent in the Philippines, happy to throw you $500 off the first three hires that you’re looking to bring into the business with us. So again, we’re here to create jobs. That’s a big driver for us. So, I feel good about giving up a bit of our cash to see jobs created for high value talent and on the Escala side as well for a project. Gladly. Happy to give 10% off and I’ll shoot you a code like we did last time, but I’m happy to go even deeper into it, just given the value of the community and how, again, if you’re listening this far in, then then you deserve you deserve some form of reward on your end.

Josh (00:48:56) – Oh, yeah. That’s very generous of you. And again, these are great discounts and yes, Yoni knows what he’s talking about. Him and I could chat forever. we’re cut from the same cloth as you could tell. And so, this has been an awesome episode again. Yoni, thanks again for coming on.

Yoni (00:49:10) – Thanks so much for having me. It was an absolute pleasure.