In this Throwback episode, Josh, a seasoned entrepreneur, is interviewed by Chad Franzen of Rise 25. Josh shares five costly mistakes he made scaling his Amazon-based business, including over-diversifying sales channels, hiring without clear roles, delaying process documentation, underinvesting in talent, and launching unoriginal products. Their candid discussion offers actionable lessons for 6-7 figure business owners aiming for 8 figures: focus on your best channels, hire strategically, document processes early, invest in quality talent, and prioritize innovation. Listeners gain practical insights to avoid common pitfalls and accelerate their path to greater scale and profitability.

Chapters:

Introduction & Overview of 5 Mistakes (00:00:00)
Josh introduces the five major mistakes he made in his entrepreneurial journey.

Mistake 1: Over-Diversifying Sales Channels (00:01:09)
Josh discusses spreading efforts too thin by moving from Amazon to Shopify and Etsy, and the resulting lack of success.

Mistake 2: Hiring Without Clearly Defined Roles (00:04:01)
Josh explains hiring people without clear roles, leading to ineffective hires and wasted resources.

Mistake 3: Waiting Too Long to Document Processes (00:06:13)
Josh talks about delaying documentation of business processes, which hindered scalability and efficiency.

Mistake 4: Hiring at the Cheapest Rate Possible (00:08:05)
Josh describes the pitfalls of trying to hire the cheapest talent, and the benefits of investing in quality hires.

Mistake 5: Launching “Me-Too” Products (00:10:46)
Josh shares lessons from launching unoriginal products and the importance of unique, differentiated offerings.

Key Takeaways & Ideal Process (00:12:48)
Josh summarizes the main lessons learned and outlines the ideal process he wishes he had followed.

Closing Remarks (00:15:37)
Chad and Josh wrap up the episode and thank each other.

Links and Mentions:

Tools and Websites
Amazon
Shopify
Etsy

Transcript:

Josh 00:00:00  For everybody listening. You’re able to avoid these mistakes that I made and help you move faster in your own journey as an entrepreneur. So let’s talk about mistake number one is thinking that I have to be diversified in every sales channel, possibly or possible out there. Okay. Number two is going to be hiring people without having like clearly defined roles and probably hiring people to just solve a problem without me actually understanding the problem and very clearly defining that role. Number three is going to be waiting too long to document the processes in my business. And then number four is hiring trying to hire people at the cheapest rate possible. And then number five is launching or creating me two products that aren’t 100% original or unique. So those are going to be like the five big mistakes that I’d love to share with the audience today. Today I am excited. I have Chad Franzen in here of rise 25, who has done hundreds of interviews with successful entrepreneurs and CEOs. We have flipped the script and he will be interviewing me today.

Chad 00:01:09  Yeah. You know, when I hear you list those mistakes, I think, like, I think most people would probably think along the same lines, that you were thinking maybe when you first started making those mistakes. So I think it’ll be very, interesting and informative to hear some kind of your journey regarding these mistakes. Why don’t we start with the first one? Having you felt like you had to diversify the business and communicate through all channels. Tell me, maybe what your thought process was going in and why. That seemed like a good idea at the time.

Josh 00:01:36  With Amazon, we were selling physical products, right? And we had this great idea that’s like, hey, let’s diversify ourselves. Let’s go create a Shopify site. And then, hey, there’s also this good opportunity on on Etsy where people are selling these digital files. And so we had this genius idea at the time that was like, okay, so many people talk about how, you know, physical products, brands, you know, so much crap gets tied up in inventory that cash flow becomes a problem.

Josh 00:02:08  So, yeah, I think it would be great if we did just digital products. Let’s go dominate that on Etsy. And then let’s open up our own Shopify site. We can maybe sell some of our physical products there, but let’s really sell these digital products. And again, we did this all out of fear and running away from Amazon, which was which was working great for us. So we end up going in and we spend literally we spent the last those next three years from 2017 until 2020, we spent building out our our Shopify site, which honestly like I think the best day we had was like maybe like 1 or $200, which is just like laughable. as we looked at Amazon, we’re making, you know, thousands of dollars a day there. so we spent three years working on Shopify. Then we’re like, oh, we just need to figure out this external traffic thing and drive more traffic to our own Shopify site. So then we build a blog, and I have no experience building a blog.

Josh 00:03:07  So we spend an entire year working on a blog, hiring people for this blog that’s making no money. And for this website, our Shopify site that’s making absolutely no money for us. And we just continue to double down in the wrong place. All of our time and energy is focused on Shopify building a blog, growing our Instagram account so that we can feed traffic. We believed our problem was just that we weren’t getting enough traffic and man, we just spent thousands of dollars, thousands of hours, with not only Becca and I, but our entire team trying to build this thing that really never took got off the ground. And but Amazon continued to churn out more and more revenue for us because we would we would continue to dip our toe in there. It’s like, all right, it’s maybe time to launch a new product. We would do it, but we could have been much more aggressive.

Chad 00:04:01  Another mistake that you mentioned that you made was you felt like you you hired people, but you didn’t give them clearly defined roles.

Chad 00:04:08  Kind of take me back and tell me what that looked like at the time.

Josh 00:04:11  Yeah. So again, it’s it’s the whole mistake that we made with trying to diversify our income. Right. So this was 2019 okay. And in 2019 we had we were working with a business coach. and she was like, yeah, if you guys want to run faster, like you should probably if you want to grow more, you should go hire people. Well, here’s the mistake. Just saying you should go hire people is not necessarily the right answer. You need to clearly know who should I hire? Why should I hire them? And how is this going to free up my time so that I can go do more revenue generating activities? But we didn’t have like, clearly defined roles? That said, this is what needs to happen. These this is your day to day responsibilities, and this is what success looks like for you and your role. So instead, what we did is we obviously needed help finding external traffic to grow our Shopify site.

Josh 00:05:06  Right? So what I did is I tried to hire away this problem that we had. And so we paid close to six figure salary for somebody to come in. That was our marketing manager, and ideas were just bouncing all over the place and nothing was ever, like really sticking. It’s like, hey, we want to grow our revenue here on Shopify. And anything that we really tested out, like nothing really got the ball rolling there. And so we ended up letting that marketing manager go. You know, less than a year, I think she had been around for nine months, no fault of her own. I think she was a smart and capable person. But me as a business leader, like I made the mistake. I hired the wrong person. Not not that she was the wrong person, but I hired the wrong person for our business. We didn’t need a marketing manager at that time. What we needed was more of like a project manager, right? That would have freed up my time.

Josh 00:06:01  Instead of me having to go and think of all these marketing ideas like I could have somebody running the day to day operations of the business at the time, which would have freed me up to go find more revenue generating opportunities.

Chad 00:06:13  You mentioned that you, maybe you wished you had hired a operations director rather than a marketing director in a large part of operations is kind of having processes and and the systems documented and in place. You said one of your big mistakes was waiting too long to document those things, processes and systems. Can you expound on that a little bit?

Josh 00:06:33  Yeah, yeah. And all of these I think mistakes and failures, just like they add on to one another and you’ll see kind of the whole thought pattern of how all of this played out. But yeah, waiting too long to document processes. So hey, I’m willing. And again, this is that whole period 2017, 2018, 2019. Hey, I’m willing to go invest and hire people to go help this failing side of our business that we thought was going to be revolutionary.

Josh 00:06:59  But yet I’m not going to hire anybody for the business that’s actually producing US revenue. Right? Like, that’s the mistake in and of itself. Instead, my mind of my train of thought was my wife and I have got it handled. We have one. my sister was actually helping us out. We’ve got an extra team member. We have extra pair of hands. They’re helping out. you know, we don’t need to add any more overhead to our Amazon side of the business. We, like let let’s keep that very, very profitable. So obviously, you can see the mistake and flaw in that, that logic from the onset. So what I did is I just kept everything to myself rather than trying to like, document the processes of ways that I was finding new products, the ways that we launch the products on Amazon, the ways that we did the keyword research for our products on Amazon. I did all of that myself because I was too scared to add an extra cost to that side of the business because I wanted to keep it profitable, which is just such a mistake in and of itself, right? And so I just held on to things way longer than I needed to.

Chad 00:08:05  You mentioned that you felt when you when you started, you felt like you had to hire people at the cheapest rate possible. I think that’s I think that’s pretty common. You know, I’ve seen job postings where it’s a new business and they’re like, we’re just taking unpaid interns for now, but you’ll get a lot of great experience. Tell me about your thought process regarding hiring people and how much they should be paid and and why, and what that looked like.

Josh 00:08:27  So in 2019, I think we did close to $6 million in revenue on Amazon. Okay. So we were doing well and we could certainly afford to you know, we had honestly up until 2019, then my wife and I and my sister as our assistant like up until 2019. So we had made it a long way like a couple of years on Amazon at least. Like I mentioned 2017, we hit $1 million on Amazon. 2018 was I think 3.5 and then 2019 was 6 million. Okay. That entire journey, we did that on our own.

Josh 00:09:03  So one thing I would say to our audience that’s listening, if you’re just crossing that seven figure mark or if you’re still in that six figure mark, like you probably still need to put in a little bit more sweat equity, right? Everybody wants to go to that next level tomorrow. But sometimes it’s really good to just like keep pushing and doing what you know you need to do. Let it grow a little bit bigger, document your processes along the way, and then make one hire at a time that can unlock more time for you. Okay, when we need to hire a project manager and somebody that could do the research and development, I knew that these were more specialized roles. And so we did have to increase the, you know, the pay rate that we were offering. and through that we found some amazing talent. The project manager that we found previously worked for IBM there in the Philippines. So her training and she’s PMP certified like she is just as good as any US based project manager.

Josh 00:10:06  She has the same certification. She worked for a US based company, but yet her rate was about a fourth of what it would be here in the US. Right. And then our other team member that we had for research and development, he was also working for a US based firm there in the Philippines, and they were trying to court him to actually move to the US. at that time, and we were able to pick him up. And he’s been a very, very good hire for us. But none of those those, I guess team members were cheap. You know, when you compare it to somebody that’s arguing, oh, I found a $3 VA over in the Philippines. It’s like, well, yeah, that’s that’s great for you. I hope they’re working out.

Chad 00:10:46  Well, the final mistake that you kind of highlighted when we first started. Was that you? You weren’t you don’t feel like you were as unique or original as you wished you would have been. Tell me a little bit more about that.

Josh 00:10:58  What we did was we just looked at, hey, what’s the best seller on Amazon doing? What is their product look like? And obviously if if their product successful, let’s just go create another one that looks just like it and launch it on Amazon. Well, if you do that then guess what happens. It’s just a race to the bottom. Whoever can price it out the cheapest. Let alone the fact that if you go and copy somebody else, you can run into copyright issues, design pad issues, utility pan issues, obviously. And so number one, it’s not a good you know, it’s not a great place to start from for those illegal reasons to begin with. But then number two, like you’re dipping your toe in this kind of like saturated market where you’re going to go compete with somebody now that already has thousands of reviews and you haven’t really made your product offering that much more unique or differentiated. And so that’s one of the things that. And I would argue like we’re one of the best when it comes to finding unique designs now.

Josh 00:11:59  that’s one of our greatest strengths for our business. That was a realization that that took place fairly early on. I think it was probably like, I think the second or third product that we launched. Like, we literally like we changed up some of the words, but like, it was a very similar like me to product. And I was like, why is this not being successful? And then it was honestly my wife that’s like, hey, I think I could design something better. Like, you just told me to create this, but I think I could actually make it better. And so that’s what we ended up doing, is going and recreating something entirely different and new. And then bam, we have success. We start beating out that that top seller in that category, and it’s like, okay, that’s it. Like why we wasted, you know, a few thousand dollars investing in inventory. But it was a good lesson learned.

Chad 00:12:48  So as we kind of wrap things up here, what’s a maybe a a broad takeaway or a primary lesson that you’d like to have your listeners learn from these mistakes? You felt like you had to diversify your sales channels for your business.

Chad 00:13:00  You you hired people without clearly defined roles, waited too long to document processes and systems. You felt like you had to hire people at the cheapest rate possible. And then, you weren’t particularly unique and original, with some of your offerings when you started, maybe. What’s up? What’s kind of a big takeaway that people should, should have?

Josh 00:13:18  Yeah, I’ll kind of sum it up into like the way I think the ideal process should have looked like for our business going back in time. Right. So when we initially found success on Amazon, we should have doubled down on Amazon. And we should have just said, hey, all right, if we’re going to invest in resources for Amazon or for our team, it’s going to serve our Amazon Marketplace, where we are finding great success right now. Then that leads into not being scared to go and actually hire people to support something that is making you money, right? I think you should never be scared to go hire for a particular role. If that particular role that you’re going to hire for is to support further growth in that channel, right.

Josh 00:14:03  So document your processes and then go hire out that role. And while you’re at it, don’t be scared or think that I have to go get the dirt a dirt cheap rate. Go go. Maybe spend a little bit more. If your budget is like three bucks an hour. I would argue, you know, you should go try and double that, right? Go to $6 an hour, go see what candidates you can find there. Offload your processes to them. Let them go and refine your processes and improve them. In fact. And then as your business continues to grow, then you can go get more experienced individuals, right? You could go get people that cost even more money. And I believe that that’s kind of the nature of the way business works, right? The team that got you here is probably not going to be the team that gets you there, right? A team that gets you from, you know, maybe 6 to 7 figures. It’s probably not the same type of talent that you need to go from 7 to 8.

Josh 00:14:59  And then if you want to go from 8 to 9 figures, you’re going to need a whole new team with a different set of capabilities, because they’re going to be different challenges that the team that got you from, let’s say, 7 to 8 has no experience with. So that would be kind of like my summation of like going back in time. That’s the way the ideal process would work. I wish our business could have followed that process, but I hope, you know, our listeners are able to take away a few bits and pieces that they’re able to apply into their own business to be able to overcome a lot of those kind of, I don’t know, easy mistakes or silly mistakes that I made along the way.

Chad 00:15:37  Absolutely. Hey, Josh, it’s been great talking to you. Great information and great insight. Thanks so much for having me.

Josh 00:15:42  Thanks, Chad.

Chad 00:15:42  So long everybody.