Wall Street To Y'all Street

[00:00:00] What do they know about scale that independent professionals, just when they leave that environment, they completely miss that sets them back for several years? Just the initial mindset. So we see particularly in these professional services areas is when they're at a large firm leverage is provided behind the scenes, right? They just bill. And everything else related to what's going on, collecting, printing documents, all of that somebody else is doing, 'cause it's built into the structure of the firm. And when they go off on their own, they're wearing every hat and they've gotta figure out
so if they approach that with I'm a lawyer for instance, first in a business person on the side, they're gonna really have trouble .

Hello friends. Today's guest understands both sides of the leverage equation, institutional scale, and independent control. Nathan Oler began his career at Lehman Brothers and Thomas Weisel partners before moving into strategy, finance and growth leadership [00:01:00] roles as some of the most recognized companies in America, including PepsiCo, Dean Foods and Saputo, which is a $10 billion global dairy company.
Across those roles. Nathan worked inside multi-billion dollar organizations on strategy, innovation, pricing, m and a, operational leadership and growth initiatives. Today, he's the co-founder and CEO of newly. An exclusive community built for sophisticated independent professionals, people like attorneys, accountants, and fractional executives who want the freedom of working independently without sacrificing growth, collaboration, or efficiency.
Newly thesis is simple but powerful. Independent professionals should not have to choose between autonomy and scale. In this conversation we're talking about independence versus scale, billable hours versus enterprise value. The hidden challenges of leaving a large institution and whether most professionals are actually building wealth or just building income.
And if you're new here, I'm Joseph j Rader, a former Wall Street lawyer with more than 20 years of experience across a hundred billion dollars in transactions. I'm also a former entrepreneur having [00:02:00] launched two businesses. One I built and had a seven figure exit in less than three years. I rolled that into a national retail chain and lost it all during the pandemic, but I've rebuilt that.
I've generated tens of millions of dollars in both B2B and B2C sales. I've hit highs, had lows, and rebuilt from scratch. My law firm rates for PLLC focuses on mergers and acquisitions, buying and selling companies and assets as well as securities laws to raise capital. I'm licensed in both New York and Texas.
My podcast, wall Street to Wall Street is where we bring you real business lessons from seasoned operators, founders and executives who've actually lived and breathed businesses, ups and downs. I'm not giving legal advice here. Always consult with your attorney regarding your situation. Enjoy the show.
I'm here in Dallas with Nathan Oler. Nathan, thank you for being here. My pleasure. Before we get into your company, now, what you're doing with newly. Maybe take us back to, the beginning, the inception, how where your entrepreneurial kind of thesis came because you spent decades in these large institutions and now you're a founder.
[00:03:00] But go back to where you think maybe that entrepreneurial spirit came from. Sure. It came from when I was really young, so before I even got to college or anything, I had all sorts of small businesses growing up, lawn services and reselling different things. But, once I hit into the workforce, I realized I think of business as solving problems.
for a long time I started, like you mentioned in finance. And then I really, while I still love finance, I also really enjoyed the operating issues that these businesses we were working with had. And so that became my interest. So I went back to business school and then spent the next. 15 years of my career really working on operating issues, whether it was at the very high strategic level or in general management positions.
And the more and more I got into that, I realized things that energized me were some of the newer and the entrepreneurial things. I definitely believe personally that there's a place for really large businesses. 'cause some problems are best solved with tons of [00:04:00] capital and lots of resource.
If you want like a PepsiCo, if you want to get a beverage to someone anywhere in the world, having that kind of scale and that kind of physical assets and resources is critical. But solving the problems we're trying to address with our members now and these people who are on their own, in many cases, these large legacy organizations, they don't think about the problems those people are trying to solve in the best way.
And so I got more and more enamored just over time thinking about, Hey, in some cases an entrepreneurial setting is actually a better way to solve certain business problems. And originally I was doing that within these large corporate structures where I would pick up new project growth initiatives, look at different acquisitions, and then over time I finally got to the place where I felt like, Hey, I'm ready to go actually start a business with my co-founder and do something from scratch where we're solving a really unique problem in a unique way that no one [00:05:00] else is trying to solve it this way.
So when you talk about how sometimes problems are solved more from an entrepreneurial problem outside of the large scope of an organization, do you think that's because oftentimes large organizations just throw money at a problem? Whereas entrepreneurs, there's limited resources and they do a more creative, approach.
I think in part, I think part of it is when you have a company, as you should, you look at first, what are the assets and the resources we have as a company, and then how can I go out into the market and apply those and earn a return for my shareholder on these assets we've already built. But for some problems, you need to build something new or the current resources or options out there are not the best one.
And that's a great example, our members. And it's unique here because you're a strong fit with the type of people who are in our community. Most people who are outside of the industry or haven't lived the experiences like you've lived or other people, they think, Hey, the first thing you need, if you are a [00:06:00] solo attorney who used to be at a really big firm you're on your own.
The first thing and the only thing you need is work. And if I talk to my members and I say, what's your number one problem? Almost none of 'em will mention I need more work. Because they already have these great networks. They would say, Hey, I am, I'm really not a facile, or I'm not a really contemporary business practitioner and I need to figure out how to run my own business better.
So most people outside of the industry we are in, they think that these people's problem is new business. And so most people who've interacted with solo and small firm attorneys, they're bringing them a solution that isn't necessarily the solution they're looking for because they are right. Like whether it's Upwork or LinkedIn or these other wonderful businesses, but their toolkit is helpful to solve a problem that our members don't have.
LinkedIn hasn't tried to do what we're doing because they have a set of tools in their toolkit and they're not really the right tools for solving the [00:07:00] problems our members have because the tools that connect to others and generate more work. But you're spot on these high level professionals, they already have a network built and Yeah, they need work sometimes.
And even just the nature of how these kind of people get work, like picking Upwork, like our members could be on Upwork today. I don't know of any of them or who are, 'cause they're like, I'm not looking for that type of transactional low value client even if I need it one off.
And clients aren't looking for them that way. Like you're a great example. Probably very few people are Googling for, I need this type of legal experience. If they're a business user of legal services they're typically going to another trusted. Somebody they know and saying, Hey, we're getting ready to do an acquisition.
I need an m and a attorney. Do you know someone who you trust? And so a marketplace or some of these other tools that already exist out there, like they're not the right tools for our members in most cases. Yeah. It has a, I think a place for more startup land, but I think like higher level acquisitions or capital raising.
Yeah, exactly. Definitely. You want [00:08:00] to go with either someone trusted that Or one or two degrees separation Exactly. Through your network. Absolutely. So you were at Lehman Brothers who was actually a client of mine during the financial crisis? Yeah. I think Richard Fold was at the hel, if I remember correctly.
What year were you at Lehman? So I left probably eight or 10 years before that. Okay. But he was still there when Yeah, he was CEO when I was there. He was there for forever. And from Lehman Brothers to Thomas Weisel to PepsiCo to Dean Foods to Saputo, unbelievable experience that you have.
Say I'm a lawyer at a large firm a global law firm. Yeah. You're coming out on your own and getting to what you were talking about earlier, how do you transition to that? How do you, 'cause you need leverage.
you got the work, how do you build that? Yeah. And I'll take that in. The bucket of how we did it at newly and then really how are our, it's totally applicable to how our members think about that as well. So yeah, for us it's like as soon as you try and go do something like that new, you've taken away this experience from these larger environments.
And my co-founder had been in larger environments as well. And you realize like this, [00:09:00] it's very hard to create value when you're just doing these point to point, it's just hard to create much momentum and much value that way.
Our business is a network effect business. And so out of the gate we were thinking about how do we, start with, small amount of connections and grow from there and build processes that are repeatable and that you can then start to automate parts of those and add real leverage.
So it's not, hey, every time we're reaching out to a prospective member, it's not taking a chunk of my time. And so internally, that's how we thought about it. For our members, it's the same issue and in a really good way because of the dynamic we just discussed, where our members are. Getting new business, typically not from one-on-one reach outs, but from their network and whether it's past clients or past colleagues that they've worked with.
So that's a lot of what we work with our members on is as they think about continuing to put themselves out there and their brand is, it's almost [00:10:00] impossible to go and make one-on-one interactions with the possible set of clients who might use them. And it's very impossible to make those connections when those people have demand for your services.
They might have demand a year from now, but that doesn't matter. You want to know when do people have demand for what I'm doing today? And so that's where the power of what we've built and leveraging the networks they already had, where they can be visible to each other. And so any one member gets leverage from the fact that they have the whole newly network working for them.
So that if. Someone is a intellectual property attorney who does software patents. They don't have to go meet every potential client. They know that, hey, this part of my network knows that's what I do. And when they see demand for that with people they're interacting with, they funnel them back to me.
And that's part of the power of the network effect that we're building with, some of 'em already had it, and then [00:11:00] we continue to enhance that. But we use that both for how we build newly, and then we use that to help evolve the thinking or enhance how our members are driving value for their business.
You have these firms that, they know how to leverage and they figure out how to scale. And you see them every year regardless. Maybe the great recession or something like that. There's a hiccup, but they scale, they have it dialed in.
What do you think they know about scale? That independent professionals, just when they leave that environment, they completely miss it, sets them back or holds them back for several years? Yeah, so some of it is just the like initial mindset. So we see particularly in these professional services areas in a couple different places.
One is when they're at a large firm like that, leverage is provided behind the scenes, right? They just bill and everything else related to what's going on, collecting, like printing documents, all of that somebody else is doing, [00:12:00] 'cause it's built into the structure of the firm. And when they go off on their own, they're wearing every hat and they've gotta figure out.
And we see, so if they approach that with, I'm still, I'm a lawyer for instance, first in a business person on the side, they're gonna really have trouble 'cause they think, that stuff's gonna fall in my lap. And they end up being really inefficient 'cause they're cobbling together. The other business aspects of what they're doing, the people who have the mindset of I am now an entrepreneur or a business owner first, and I happen to practice law within that structure.
those people are much more successful. And even sub piece within that, the mindset is I'm gonna embrace this. And the same way I had to build skills to be a good lawyer, I'm gonna have to build skills to be a good business person and think about, how do I leverage my time? True. How do I scale?
What are the right things? And I'm gonna have to have a growth mindset of, even though, we have people who went to [00:13:00] Harvard Law School and they worked at Skadden Arp or Latham Wa like the best of the best. Super smart. But the people who do the best on this journey believe they have things to learn.
From their peers or from other experts. And that growth mindset of I still have things to learn to do this well, like hands down, those are the people who have, it's never an easy road, but they have an easier time of going off on their own or going to a small company because they immediately have this business lens and they don't think I should know everything out of the gate.
It's how would you haven't done this before. You've been almost, I don't wanna say coddled, because that has a negative connotation, but they've actually, you had a secretary, you've got a paralegal, you had a team behind you doing billables and collections and setting up a matter and conflicts, checks and all of these things.
And all of a sudden you're coming outta that environment. Perhaps you went straight from college to law school or Whatever. And then you went into this environment for a decade and then you're coming out a really big one is people management.
I'm a solo attorney or a small firm. I've got some people now working for me. And I, it's one of the [00:14:00] most common questions we get where people want to cover it, either in one-off groups together or they want us to bring experts in are around.
I want to revisit the tiny bit of training I maybe got in my career, or in many cases we have people who are managing folks at these larger firms, but almost no training. And they say I wanna go back a bit to the drawing board and if I'm gonna run a successful business, I need to be really thoughtful about how I manage the team and my resources.
And I just haven't had it. So I want to start thinking, and that's one of the areas we get asked the most, where people are like, yeah, that was done for me in the background, or it wasn't valued where I was. And now it's one of the things that. Drives the most amount of value If those underlying things are happen. Yeah. You can't collect, whether it's eating up your time or you're not billing if, if you have, people who are underneath you who have billable hours, like their time might not be efficient and, or you can waste a huge amount of time if you can't retain people.
if you hire someone [00:15:00] in and then they leave after a year 'cause they don't like working for you or in your environment that's really disruptive and takes a huge amount of time and if you've been paying recruiters or whatever, it can be really costly. Yeah. regardless of your revenue rate, if your churn level is high, it's just going to be spinning your wheels.
Let's talk about independent professionals generally, which is what you're focused on, using your experience. Technology has unlocked a lot of these opportunities. Why do you see most.
Independent professionals breaking away and going independent. What is that driver? Sure. So there's just the qualitative human aspect, which is now that, I think there's always been a part of any industry, but certainly this industry where some people are, whether they don't like the politics or the hours are too hard, or they just want to be creating something of their own.
We're seeing almost an infinite number of reasons that our members have left and gone on their own. But, the typical themes, why now or why they're able to do it more now is certainly like [00:16:00] technology and just other, ability to work remote and just client acceptance of them working remote there's so many themes going on it's causing our members who maybe had been, on the edge to make that decision.
And they're seeing more people who are doing it. And so you're definitely seeing, More supply going out into the market. I see it as a complete sea change just from my perspective, because you're spot on in my experience before COVID, if you didn't have an office
And you weren't in a major metropolitan area. You weren't legitimate. And now COVID to me, from my perspective as a corporate lawyer, it changed everything. And I talked to people all over the world, CEOs and executives, high level, none of them are at office. Yeah.
They're literally all of them are remote, 95% of them. Unless there's some medium or training going on. And so the acceptance of that and then the advancement of technology, obviously the convergence of those two has just made it's a sea change. Absolutely. And then I love, you can tell me if this is a, I'm too much of a nerd here, but like on the quantitative side.
One [00:17:00] of the ways to think about which industries is this happening in and within an industry, what's it gonna look like As it played out, there's a Nobel Prize winning economist, Ronald Co. And he wrote his paper, I think like a hundred years or 80 years ago, he won the Nobel Prize, but he has a framework for why do firms exist and why do large firms exist?
And it wasn't talked about too much until now recently. As technology is disrupting these legacy industries, it's a wonderful framework to go back and think about how is this industry gonna be disrupted? And you can basically, he has these transaction costs that he's outlined and said, Hey, you're gonna have where these transaction costs are high, you're gonna have industries that have.
Larger companies in them to offset these transaction costs. So it's why legal has some really large, whereas like plumbing does not, because a lot of these transaction costs and plumbing didn't exist. So there aren't large plumbing companies. 'Cause they didn't have to solve these transaction. But anyways, the framework's amazing.
'cause you can start to look like we, [00:18:00] even in our industry, even though I'm a huge proponent of Right. Supporting people going off on their own, we'll get people who kind of wanna pile on and be like, oh, big law firms are gonna go away. And it's I don't personally believe that at all. No.
'cause and his framework is a wonderful framework to look at and be like many of the, these transaction costs are being reduced. And so you're seeing the ability of more and more independent people to function in the market. But not all of those transaction costs are going away. And so while some of these large firms may look different over time, there are certain things that they're gonna do less of.
There are major transaction, like when I was at PepsiCo, using a Latham or a S SC was really useful 'cause we operated in almost every country in the world. And in that that's a huge transaction cost to have to go find professional services in every country. So there's still a lot of value, particularly for large corporate entities to huge look.
But there are these one-off places and certainly for smaller companies where it's like, Hey, I [00:19:00] never had those transaction costs or they don't exist anymore, I can go find these people. Or like when the issue you were getting at is one of his transaction costs, it's trust. So like I need a way if I find a service provider to trust that they're good.
10 years ago it was, people were like, if you're on your own, I might not trust that you're good. And that part because of technology and just acceptance in society, that's not away. But for a lot of work it's gone away. And so now people are like, I'm, I run a business. I'm really open to using an attorney.
And if anything people like. I actually want it that way because I, the cost is a lot lower. They're not sitting on a big overhead. But anyway, so like I know I'm a nerd, but like that has an Amazing Framework and it's getting referenced more and more because it allows you to look at these industries and have a kind of more coherent thesis around like legal's a great example.
Totally being and going to be disrupted. Doesn't mean the legacy companies will just totally go away. Things will look [00:20:00] different and it helps you figure out like how do I think things are gonna look different over time? So you have the upside of people who, have experience like you or who are a big law firm for 10 years and then this technology allows them to go out and be an independent professional.
That's great because you have the experience, you've, you've done billions and billions of dollars of deals and you know how to do it. I think the flip side of that though is maybe someone coming out of school and circumventing, not even having that essentially apprenticeship period and just going straight into being an independent professional.
Yeah. Do you see that as an issue? So this comes up, we're talking about this all the time, both as more people are independent. What's the right apprentice model? 'cause in some cases, going out of school to work for a small firm has some real positives. Like you're probably getting more access, direct access to clients.
If you're a litigator, you're actually probably getting in court and doing something of substance, and that's all positive. But you're seeing less at bats in smaller things if you're [00:21:00] at a solo. And then what The thing that's been really blowing our mind is in these apprentice industries and legal's certainly one of them.
As AI comes along and whether it's being used at a big firm or a small firm, if it's replacing a lot of the activities, people were paying the apprentices. That's how we justified having right junior associates around. It's they're doing this low value work, but really it works because they're learning all this high value stuff along the way.
But if I start to do more and more of the low value work through ai, what's that apprentice model look like over time? And so a lot of our members are worried or think talking about. In 10 years, are you gonna have a bit of a dearth of new partner level people? Because where are they getting that exp, right?
It's like you read the contract and you did the mind numbing red lining of it so that you could sit on the call with the partner when they had the really important discussion and absorb and understand the context. That's what you were learning. And it's if you don't have [00:22:00] that, like that mechanism to do that learning, how are these companies or how is the industry gonna bring along new high quality?
Thank you. And I don't, nobody, I haven't talked to anyone I has some magic answer yet. I think a little bit it'll take the industry getting to a place where. They see that they don't have enough and then it'll force them to rethink. But there will be that dearth because you already see the summer classes, like for law firms and even in investment banking you have your summer class.
Yeah, exactly. And you see them getting smaller and smaller. Yeah. And that was pre COVID. It was already happening. and we're also at the infancy of ai. And so those tools are going to get better and better to where a partner can say, oh, lemme just run this through that. And they can contextualize it and do it.
And so maybe they don't need Three junior associates on the team. So there's gonna have to be some new training or tweak to the training model to get people ready to be at that high level. And I don't, in our, less about me, but like our members who've come from that industry, they're really questioning what's that gonna look like?
So talking back [00:23:00] about independent, leaving a firm, do you think founders romanticize independence? Yes and no. I think in many cases they are pretty eyes wide open about it being a big risk. I think probably folks are over-indexed on the risk of finding clients at first, as you can imagine.
And they're under-indexed on the challenge of everything else, and particularly for our members, that they're often lucky. Not that they don't, it is a big risk for them. And I think I'm, it's one of the. Things that gets me so excited about this business. These people are really brave, that have done this, I believe left a really comfortable environment to go take a really huge risk.
They call it the golden handcuff for sure. Great lifestyle. And, but they almost always are most nervous about finding business. We know, 'cause we've seen across hundreds of these folks that they're gonna pick up and find that business. We know they have such amazing backgrounds and they're offering so much value for the service they provide.
And they typically have great prior client relationships [00:24:00] that they get up to where they want to be. Most of our members, if you ask them, they'll tell you now their problem is they have too much work. And they're trying to figure out how to do it. But then on that under indexing part, they get off on their own.
They ramp up, they get the business, and then they're like, okay, now I have my feet under me or my head above water and holy smokes, I just don't know anything about these 50 other things I gotta do to run my firm. We typically think of it in a client flow, but what is the right way to be out there getting business?
What is the right pricing model? Like, how should I be engaging when I get clients? Oh, should I still be doing hourly? Should I try to do flat fee, fixed fee? even if I am still gonna do hourly, what rate? So a lot of our members, when they leave these larger firms, they've never set their own price before.
And so they get off on the market and it's I know I should charge less. I'm not charging $1,800 an hour anymore, but should it be 250 or a thousand an hour? And there's a huge, so pricing and then there's a lot of discussion on getting the work [00:25:00] done. So managing team, different resources.
And then the last bucket really is around all the back office, right? So practice management, software, billing and collecting trust accounts if it's relevant. And now ai. Is one of the big topics that's out there. And so across that set of topics, people are like, geez, I just don't know much about that.
And so that I think is rose colored glasses, or they think once I have clients everything will be fine. And then they get clients pretty quickly and they're like, oh wait, I have all these other things. I don't know about 80% that I need to run the local firm. And I guess that's where companies like newly come.
Do you think that kind of independence limits income and scalability, does that hold them back or, I, only if they want it to. We have several members who they go off on their own and that is, I would say a third of them, maybe 25% say I'm not looking to manage other people anymore.
I was doing that before. I'm [00:26:00] not looking to be working 80 to a hundred hours a week, or, trying to build. Like I just want to go, I wanna run my firm. I wanna work with some clients I have, and the income that it spits off is, these folks are making a lot of money still. And it's Hey, that's great.
I want the flexibility. There's other things in this equation that I value as much as say, build. But I would say, the remaining two thirds of three quarters of our members are thinking about, Hey, how do I build something over time that exists beyond just the billable hour I do. Whether I sell it someday or succession plan it, they're in different stages of that thinking.
But at least have a notion of I'm building something where it's not all just about me. It's a real ongoing concern that's creating value even beyond the billable hour. because when you tie it to the billable hour, you're essentially just self-employed There are only so many hours.
But when you start leveraging and bringing other people on, that's when you start creating enterprise value. That's when [00:27:00] you can step away for 30 days and everything doesn't die. That's when 10 years or 20 years down the road, you can actually exit and sell. And sell the company.
And again, for, I would say the majority of our members, that those are all things they're thinking about and are, at least in some part, goals that they have. But again, we do have a quarter of our membership who have said, Nope, I'm happy to have this self-employed model. I'm spitting off a lot of cash.
I'm able to save for retirement, and I'm gonna enjoy not having to wear as many hats. Whereas that, because the flip side like we talk about is why we exist. When you start doing those other things, it's okay, I need to learn how to do those. I probably don't know, or I'm probably not great at them, or I'm not great at all of them.
And that's where the power of newly, they can get together and share with each other. How are you solving that problem? What different way? If you think of hiring team members in this day and age, you can do that, 30 different ways. And so having them hear from each other, how are you doing that?
Or even just removing, it's [00:28:00] been really powerful for them to remove the self-editing they do. So you might have someone who says I'm thinking about, leveraging my time more and I'm ready to bring on an associate. And I believe the only way to do that is to hire, to get the quality person I need, I have to hire a full-time person.
And that's gonna be a big fixed cost for my business. And so I gotta think about how all of that works. And then they'll hear from somebody else in our peer mastermind groups where someone that will say the whole other end of the spectrum, they'll say I was worried about that too. So I scoped a role where it was no hourly commitment at all.
I bill through this person's hour and I mark it. And I only pay them when I collect, not even when I send through the bill, but I only pay them when I have cash. So low risk, your risk is mitigating zero risk. It's only ever cashflow money. But, so you can imagine the person who'd been self-edit thinking, I have to hire a full-time person.
And now I will say the model of having somebody you pay only when the cash comes in is very unique, [00:29:00] but it's possible. It's out there for that person to hear that model. They're just like, it stretches their mind and these are, they hadn't thought of that possibility. Yeah. These are such smart people.
So then when you start to prompt them on the Hey, I didn't know what I didn't know, and start to give them, visibility to different options. They might have gotten there on their own, they probably would've over time. But when you do it in that kind of environment, you're getting there much faster and you're hitting a lot less of the like potholes along the way.
That's what we find in these sessions where we tell people don't just share your best practices and what's working, share with each other mistakes you made. 'cause that'll keep somebody else from making Mistakes. Or maybe you don't even know it's a mistake.
Share how you're doing things. Yes, exactly. And someone may pipe up and say, wait a minute. Have you thought of this? It's interesting. I've never heard the reference. Self-editing. I like that. I call it negotiating against yourself. Yes. Yeah. Same or isolation risk. Yeah, absolutely. Because and that's the power of networks, right?
And so when you get into these groups and you start talking to people who are in a similar cohort and you start brainstorming, it's wow, I would've never thought of that. And this is how it [00:30:00] plays out with almost all our, are new members, the cycle. They come in usually with two or three things.
Tactically on their to-do list where they say, I see how I'm gonna join and be part of this community of other amazing solo and small firm professionals, and here are questions, or here are things I wanna learn in the first couple months or connections I need to make. And they do that and that's how we get people to sign up as they have this visibility to this immediate value.
The real value that we know comes in month four, month eight, where they have these discussions and they didn't even know, again, they didn't know what they didn't know. They didn't even appreciate that they were self-editing or negotiating against themselves. And they get exposure to these ideas that, again, they might have come across 'em eventually, but it wasn't on their radar in the, at least the short term.
And that's when we get calls or we get emails from people coming back saying whoa, I just talked to Bill, or, I heard what Sally was saying in that meeting. And that's totally changed the way I think about how I [00:31:00] wanna run my firm going forwards And that's where the real value is created.
, It may have taken you 12 months and now you just did it in a one week or two weeks. Yeah. And you've just, or you may have missed.
Yeah, so like exit planning or succession planning's a great one where a lot of our members believe, Hey, this entity is just gonna go away when I retire, and it'll all wind the business down. And then they hear from another member who's planning oh wait, I'm starting to do succession planning and I've built something that I'm gonna be able to monetize, at least in part as I leave.
And they're like, holy smokes, I didn't think I could do that. And they're like, that's a real game changer. That's huge. But you have to, you can't like get two years from retirement and be like, oh, now I'm thinking about, I could maybe sell my business. 'cause it's really hard to course correct at that point.
Five years is what I hear. At least. And for succession planning could be longer. And so those kind of exposures, even though they might have thought of them along the way, they might have thought of them too late. And so there's certain things that are really crucial to hear earlier in your journey.
and to [00:32:00] hear different ways and that's one of the things we're learning from like our members and other people in the market, as a lot of folks believed I can only sell my business if I have a bunch of, simple low hanging fruit recurring business that I could just hand off to another lawyer.
And that is a great business to sell. But you could sell your business. If you have a top end funnel engine, you could sell your business if you have an amazing team that can execute things like right now, that is, I would say one of the biggest challenges we see for our members is finding people and the right people to leverage their time and come on.
So other people will buy other small firms sometimes just for the team they've put in place. And their ability to work together. And so there's all these ways you can set your business up to exit it, whatever that means for you. But you gotta know about that early on and you've gotta hear about those different options from the other members and the different things.
And that's the power of getting. [00:33:00] People who are already really smart, but getting them together with other smart people just accelerates that kind of work. And you really don't know if there is value there. 'cause you'd referenced basically a bolt on, you don't know, there's maybe someone out there who seems value in what you have that you don't necessarily see.
And so what, you don't have that recurring business. Maybe you have something that would take them three years to build, they willing to pay you X. Yeah. Why let that go away? And it's astounding when you look at the statistics. I don't know the exact number, but it's something like 80 to 90% of small firms never sell.
It's a very high number. And you look at other industries, so like dental practices where that has become very normal. Almost everyone enters that industry. By buying another practice.
And then when they leave, they sell. And that percentage of people doing that in other professional services is much lower for a whole bunch of reasons. but it doesn't need to be that much lower. And there are ways to do it,
Succession planning mean most small businesses when they do sell, they're selling to an insider. And it's are you doing the work now to start to think about who's gonna be your insider that you might [00:34:00] sell your business to or hand it over to over time? And that takes a lot of planning and thinking and work.
And, we had actually a round table discussion, and that was one of the subtopics this week amongst our members was thinking through how do they build their operating partner agreements and when do they start incorporating succession planning into that and what does that look like? And it's such a meaty topic and it's, I honestly don't know how someone would do that on their own.
And almost by definition it's so complex and there's so many different ways. It's like you have to do that in a community or a group setting somehow. And it may be even on the succession planning, you may have. An heir who you think it's going to take on an insider, but maybe that person isn't there, things change.
And if they're not, like you said, sometimes it's too late, so maybe you need a couple of tranches of Exactly. Yeah. If this is like this, then we're gonna do that. Here's plan B right there. There has to be that. Talk to us. You've talked a lot generally and you've peppered in what you're doing at newly, but talk to us specifically is [00:35:00] newly a platform, a community, a marketplace?
Yeah. it's not a marketplace. It's specifically a community. It is a group of really talented and experienced solo and small firm professionals, particularly like you mentioned, attorneys, CPAs, fractional executives, everybody who we're targeting and who is a member's partner level and above.
Because these people work on their own, we don't have really junior people because you don't have the trust factor of does this person know enough to operate on their own? So these are high trust. High quality, really partner usually eight to 10 years of experience minimum.
And on average our members have about 25 years of experience. So season, really seasoned business focus. So they're all relevant and have relevant clients for each other. So we don't have people who are more retail facing, like personal injury or criminal. It's not as, we have a smattering, but that's not a big part.
And then almost all of 'em, it's not an official requirement, but they typically got training at a [00:36:00] large firm or large organization.
So you have constant movement, but that's who we target. And the big aha of what we're doing, is the number one concern for these people is not finding new work. It is running their business. And the stat I love to share is when these folks are back at the big firm, they were typically billing 75 ish percent of their time out because everything was getting done for them.
A solo and small form attorney is typically billing less than 50% of their time because they do all this other stuff that they don't know about and they haven't figured out how to be more efficient. And so that's the kind of hook as we talk with initial members of, Hey, figure out how to be more efficient.
Make sure you know the right people. So as issues come up with clients, you can have almost a virtual walk down the hall at a big, you can go find the tax person, you can find the m and a person and get in a place where you're learning about the business side of what you're doing. And those are the two [00:37:00] things we offer our members, which is we have a directory, a searchable, where the members can go and find each other and look at each other's backgrounds and then get to know each other.
? So it's this high trust can vet them and yeah, we've already vetted, but they can vet too, a fit. Yeah, absolutely. And then the other piece, like I've referenced are about learning the business side are these peer mastermind groups that meet virtually once a month for about an hour.
And they typically pick one topic of all these business topics and deep dive in that topic and share best practices, share what doesn't work, and really accelerate their thinking and learning on those different areas. Then we do networking events and round tables and some other things as well.
But the core of it is, hey, you're gonna find the right people, replicating the people you are surrounded with in a bigger environment, and we're gonna get you the learning and kind of peer support to run a more efficient business or really realize your full potential as you're on this journey.
It's almost like a referral club. [00:38:00] It's almost like a, I don't wanna say like LinkedIn 'cause it's not, it's very focused right. You are meeting with, 50 50, that's an excellent split on the solos to boutiques. And so you're laser focused in and then it's industry agnostic I think, what is what you're saying right there?
There are some similarities, but pretty much industry agnostic In terms of who they work with. They work with all sorts. The thing that's not agnostic is they need to have, at least in part or predominantly business clients, that is one of the focus areas, but their clients are across all sorts of industry, across board.
So absolutely find someone who can help. and it's not just Dallas, it's not just Texas. We're US only at this point, although we have a lot of people who work internationally. US focused, we have people in almost all 50 states, about 600 members currently.
they have amazing backgrounds They're really the best of the best. it's an amazing group of people, 600 members. And when you started this company, when did you, so we, the original inclination or kind of version was about five years ago.
We started monetizing [00:39:00] about two and a half years ago. The current version or offering of what we're doing is really just about two or two and a half years old. So it's once we started to realize the power of these masterminds and then started monetizing those things, that's where we've really, so even though we've definitely been working on this a while, which is great and it, a lot of the members like that.
If someone is it a big firm and they're thinking about jumping? Is there a place for them in newly where they could get on and meet with people and say, Hey, how did you do it? Or is it that they should separate for, we don't do anything official. We made a choice pretty early on.
There's enough people who've already chosen to be independent. there's about 2 million of those people in the us. Wow. Yeah. it's a huge market. So early on we said it's very hard to handhold someone through that process of making the decision.
Now we're really valuable for them and if they seek us out, we're happy to chat with 'em. And we have a lot of our members often who will put us in touch with friends who are like, oh, I still have a colleague back at this [00:40:00] firm. Hey, could they come to an event or would you talk to them about things they should think about?
And we definitely do that all the time. We just don't have a big kind of marketing or targeting effort to them, just 'cause it's just much harder and we don't need to, 'cause the core market of what we're chasing is already, so you have 2 million, you have 600 members, but you have 2 million that you can, yeah.
So you definitely have a deep pool. So putting your founder hat on your entrepreneur hat, how do you scale newly, what's the plans and how do you go about doing that? So yeah the way we've stepped through it is have we built a business and have we built an offering that members value?
And we judge that by are they paying us and are they willing to pay? it seems simple. that's one of our learning. We waited too long to do that. And so to monetize. and it's pretty common for first time founders and we were unique in that, right? We built a network effect business.
So it's hard to say, Hey, you're the first person in my club, pay me day one. So you've gotta have some critical mass have value. But we waited too long and so [00:41:00] definitely turning on the monetization for us, we never had other proxies to value that were any good. So if we looked at right perceived notions of engagement or things like that, we got a lot of false negatives and false positives.
And so for us, we had to have people put a credit card down and that's the only way we feel confident. Like this person is telling us they're getting value 'cause they keep paying us. There's no better objective measurement than, yeah, because at first we were looking at like usage on the site, how many members were say, looking up other members that actually can give you a false.
Positive because it could be that a person is on the site a lot using it 'cause they don't find what they're looking for. Whereas somebody else might have actually never gone on the site. They might have just emailed me and said, I'm looking for an energy attorney in Houston. I'm like, all right, you gotta talk to this guy Ted.
And it would've shown up as no engagement. And we might have said, that person's [00:42:00] not getting any value. But if you went and talked to them, they were like, oh, I got a ton of value. It's like I thought of something I needed and Nathan and the team delivered that to me almost instantly. So that was hugely valuable to me.
And so looking at usage metrics and some of these other things that might work for other sites for us never worked. So we needed to confirm, do we have something people are, verbally telling us they like, but are they paying us for it on a recurring basis? That was number one. and we did that a couple years ago, then it's, Hey, do we have a funnel, at least one working funnel process that is repeatable where it's not new to the world every time we do it.
We can have a meeting with a prospective member and basically have the same conversation again and again and know that it works. So we developed that, and then the next stage for us was, can we do that in a way where it doesn't have to be the founder doing it, so it's repeatable enough that someone who's not the founder can skill?
and so we've checked those boxes over the last, once we started monetizing two and a half years, and now it's like we have this base business [00:43:00] really valuable. So the lifetime value of our, we believe it's still early days, but like we think, so people pay us on average about 2,500 a year.
And so the lifetime value, it's very reasonable. We tried to keep it reasonable. If the churn is even in the teens or 10% or like you're still talking about lifetime value, that's, 10 to $20,000 of value per member For our business. And it looks like this process we've developed the early, again, it's still early, but the read on the customer acquisition cost are that is sub 1000.
So now you're talking about probably is gonna cost me less than a thousand to find a member and I'm gonna get 15 to 20,000. Okay, every person we add is generating a bunch of enterprise value and we have a process that's repeatable, so let's just go do more. And that's the stage we're at now.
And that's been a really nice discussion to have with investors around, Hey, this thing is working and we have a go to market that works and we're just gonna go scale that up and do more of that. . And I think [00:44:00] this applies to any business you have. You have your one or two funnels that are working, you know they're working. You could literally just focus on that
But then what happens when those funnels break? Yeah. The market changes, funnel breaks, whatever. So you're pushing out into other, okay, how else can, What else can we do? Yeah. Which a lot in my experience, again, of founders, they don't do that. Yeah. They literally focus, okay, this is my funnel.
And then the world changes, and we got caught. So the first several hundred people we brought on was, it was still direct outreach, but it was mostly through email. And then, cold outbound email has changed a lot in the last several years. Absolutely. And so we had to move the process for the prospective member looked the same, but we had to move over to LinkedIn, which you just hadn't had time.
Email had honestly worked so well for us that we hadn't spent much time in LinkedIn. Also LinkedIn needed to catch up with the market, right? Yeah. Because it was still growing. It's now such a powerful tool. Absolutely. So now we, our go to market is mostly through direct outbound LinkedIn where we can, that's where your clients live, and we can do the kind of targeting we need [00:45:00] to do, where we can find people.
Who meet our criteria and we think are gonna fit Sales navigator The tools that LinkedIn come out. Exactly. Yeah. And so for, but we got caught for a couple months where it was like, alright, email broke. We hadn't been spending much time in LinkedIn and we were lucky that we could pivot and figured LinkedIn out and could leverage the like meeting process we'd already built.
At some point something might change in LinkedIn here. And then it's hey, we need to be thinking. And I actually think some of these other methods, I don't wanna spread ourselves too thin and try 10 other things, but in the one or two other things we're trying, I actually think they're a little more natural and organic, it feel less salesy where people are like, Ooh, I can come to this event and start to see who's we had someone come to, as a prospective member, come to one of these events and as soon as they finish they emailed me and they're like, these are my kind of people.
And that it's really when you show up and you're around other people who have these amazing backgrounds. Or running really cool firms, it like [00:46:00] really resonates and you start to hear about the topics being discussed. And so I do think there's gonna be a there in some of these, whether hopefully we'll just keep doing both funnels, but Sure.
But you're smart enough to know because it's the companies that survive that are always pushing a little bit here and there. And you're right, you can go the extreme and have, yeah, we're gonna try 15 different funnels. Yeah. And it's no, you've got your couple that are working. Try a couple of other things.
Just in case things change or maybe you hit on something that's just as powerful and you can build that on. And then, so I guess you're saying you guys discovered that, an introductory meeting and having them come in and hear these people talk about problems they're going through and in they're like, oh my gosh, I wanna be a part of this.
And we try and make it so natural. Like that first meeting, we almost don't talk at all. like we get in those meetings and it's all about the person we are getting a chance to spend time with they've all done cool stuff they had and so trying to understand somewhat the fit.
Do they actually fit our criteria? Can they be a member? But what we've ended up learning is you're really trying [00:47:00] to understand mindset. So do these people have an issue they are trying to solve today that we can help them with as being part of newly? And it's like those are the people who are gonna join right away.
And that's been part of my journey learning from a bunch of other founders and people in the industry is I used to think my job was to convince someone who wasn't interested to be interested in newly. And now I think of it as my job is to understand do they have demand for what we're doing and can I connect the dots for them and show them, hey, that thing on your to-do list, you can be part of newly and you're gonna be able to check that thing off.
I'm not trying to convince you to be a newly member, I'm just trying to show you that there is. A way to solve the problem that you have on your list now. Not something you're trying to solve two years from now, but like this is something, and then that's how we try and focus and spend our time. So you're bringing them in, you're like, we can create value for you.
We see that. And so they're more likely to stay. It is gating. That's tough. You're gaining your [00:48:00] customer base. But most of the discussion then ends up being not about us. 'cause once I know what their problem is, I don't have to even tell them everything we do. You just have to tell them the one little piece that solves their problem.
And so the more they talk and we ask open-ended questions and are really, authentically trying to learn and understand about their business. And I like to try and leave the first meeting can I replicate on my notes what their to-do list is for their week? What are the things they are working on?
And then typically we start to hint at it in the first meeting, but then we have a second meeting. Where then it's more about, Hey, you mentioned that this is one of the things you're trying to do. Let me show you how other newly people have solved that problem by leveraging what we're doing. And that's just a really, that feels like a partnering discussion, not me hammering away you should be a new lead member.
It's hey, I think I really understand the, I don't even like to use the word [00:49:00] problem 'cause they're like, if I go to a prospective member, hey, tell me the five problems you have. They'll just stare at you like they don't have problems. Their lives are great. They're running these awesome businesses.
If you say what's on your to-do list for the week or what are you trying to accomplish? They'll talk for the whole 30 minutes. 'cause they have all sorts of cool stuff they're trying to do. They don't necessarily think of it as a problem. It's just this is just stuff I'm trying to accomplish.
once you have a deep understanding of that, it's okay, how do I literally just connect the dot for them? Hey, you're trying to hire somebody and you're having trouble. That is the most popular discussion topic within our mastermind groups, and that's the way that you can learn from other members about what they've done to solve that exact problem.
Or here's a resource we have that we've already vetted from other members who is a recruiter, let's say, or something like that. So that's the way that just they might not even know what newly does in full, they just know I need to hire someone, and this guy just told me he has a way to help me do that.
I'm gonna talk to him more. I'm interested in that. So yeah, that took us a while and we got a lot of external [00:50:00] input on it to build a process that just feels like it's about the member and their issues, and it's great 'cause you are, like you said, you're taking away that away, that sales process.
Once you identify that, you plug them in and you step back and it solves itself because then they see, yeah, there's value. And that's where I, for me, I've had a real change in mindset. Again, it's like I'm not here to Jedi mind trick people to, I'm here to the sales process is about understanding do they have, and again, not just demand, do they have immediate demand for what we're doing?
If they have long-term demand, we keep 'em in a list and I might circle back with 'em but I'm gonna spend very little time trying to sell someone. If they say, oh, I'm thinking in December I'm gonna hire somebody and that's my big issue for the year. It's great, I'll circle back to you it's just if the thing isn't now, it's just gonna be really hard to get them to take action, I found.
And so for us it's much easier to prioritize. The people who already have an immediate need for something we know we can solve. And it's like, all right, let's spend time with them [00:51:00] making sure they understand how we can help or making sure we really understand what they're trying to do. So you talked a little bit about some of the issues you had along, like maybe we should monetize sooner and Yeah.
The email funnel broke, but you found a platform, a company from scratch. What were some of your largest hurdles that you had to overcome to get this thing off the ground? Yeah. So for a network effect business, it's the initial critical mass. So unlike say, a SaaS business or a services business where day one you can provide value to just a single customer, you had to go build critical mass.
And for us, we spend a lot of time saying we're not even people who down the road, we might welcome with open arms as being part of newly, we're gonna be. Hyper like critical of the folks we target out of the gate to make sure they worked at like the best firms went to. The best schools are really known in their industry.
And so that was hard. 'cause it takes time. Like for us, we didn't really build soft. I mean we have [00:52:00] software to run them, but it's like we didn't really build software. We built and invested in the initial part of our network and that was what the early money we used funded was doing that. 'cause that took, that was really hard.
And it was just slow going, there's a million things I would do differently along the way. Share some of that. But it's weird. So like a good example there is, so now we know these masterminds are really popular and while they are network effect base, they are a small network effect, right?
So a mastermind only has 10 people, right? So we didn't need a hundred people to start charging or we waited till we had 500 people before we started monetizing. And so in hindsight it's geez, as we were building the 500 people, we could have been offering masterminds day one and charging because the value was there in value because it was still network effect, but it was a 10 person network and that's easy to build.
A hundred person or a 500 person network is really difficult to [00:53:00] build. So that's a huge learning. Definitely just the monetizing earlier period. And it took us, it was like, until we monetized, we didn't know that some of the non monetization metrics of usage weren't. That great. and actually, like we tried to do masterminds not charging for it, and they were totally just okay, like they weren't great.
Like people didn't, not as many people showed up because they weren't paying. Interesting. Once we started charging, we got a lot more attendance. And it takes one time attendance in one of those groups where you're like, oh, I'm gonna learn a lot here. Hey, this is a great group of people and I'm gonna get a lot out of this.
And so that was one where until we charged, we didn't know that the Mastermind was gonna be so popular. And right now it is the core of what we're doing But if you pulled our members probably seven, they would say, Hey, I'm getting 75% of the value is from this mastermind.
And it wasn't even when you started, it wasn't even something that you were thinking about? It just, yeah. I mean it was there and like we played around with it, but we played around with it when it was still [00:54:00] free. And we got false negatives from it. We were just like, ah, this seems like mediocre people signing up.
some of it is, they've gotten better 'cause we've figured out how to run a better group. some of it is, it's better now 'cause it is legitimately better. But that's one where it's like a, we could have monetized and had better, we didn't know that the data we were looking at wasn't as good.
And we definitely could have carved off smaller network effect pieces and tried to monetize that sooner, than we did along. So I just wanna make sure I get this point. And pricing is literally one of the biggest challenges, probably top three for any independent professional. I know. It certainly is for me, like, where am I at?
But how did you, what triggered we need to monetize now? Like what was the impetus behind that? Because you should have monetized so much sooner, Was it aha moment two in the morning desperation, because we were, it was like, Hey, if this is gonna be a real business, we have to start, like we, we took some, not a lot that, like we've taken some external investor money and it was like, if we're gonna raise more money, we're at the point.
We need to show that people are gonna [00:55:00] pay us and it's gonna be really hard to raise more money if we can't show that people want to pay us. Explain how those two things are tied. Yeah. And so it's let's go start doing this, or let's at least test it and it's not that big a deal. And so we started testing.
Yeah. And then the level we played around with a little bit, we started too low actually, and we had I love the anecdote I shared. One member was like, ah, Nathan I love what you're doing. I'm gonna sign up. I find your price point off-putting low because someone who worked at one of these companies that's two hours of their time.
We started at a thousand a year. a lot of people are like, Hey, that doesn't match with the value. I think I'm gonna get out of this. now it's about 2,500 a year. That's a significant cost item for them we've tried to respect that these people are running small businesses and are paying attention to cash, but also have it reflect more the value that they're gonna get.
Yeah. Even if not just cash, their time is very valuable. Yes, exactly. Because not only as entrepreneur, your time is valuable 'cause you're wearing [00:56:00] all these hats, when you're billing on a value-based or even billable hour, that time, the hours they're giving up to attend. Yeah. It has to unlock.
I think that not a lot of businesses have that problem where customers are like, Hey, you can charge me more and I'm happy to pay it. No, and I always, I should have looked it up before we did this. There's a name, there's an economic term and I'm totally blanking on it for that kind of good,
Can't tell if the quality of the good, so they're even more likely than others to look to pro. So doctors are a good example. I don't know if my doctor's a good doctor or not. People look, it's They're charging normal rates.
Same with lawyers or that way. Yeah. A lot of businesses actually don't know if their attorney is a good attorney or not. So they partially judge some of it, like we talked about, is where they work and other things. But some of it is what are they charging me? And so if they charge too low or we charge too low, it reinforce.
So like the colloquial term is just like the country club effect, right? Like you, you wanna have the price point that's, building off of or enforcing the value that you think the business, that golf course at the 250,000 initiation fee club has to be better than [00:57:00] $50,000 initiation fee.
Yeah. Thank you for all of this. I feel like we covered a lot of ground and hopped around quite a bit. If someone wanted to join newly, how would they go about doing that? Yeah, a couple. So the easiest is go find me on LinkedIn, just Nathan ler that link. Yeah, absolutely. And you'll see my contact information is right there and they can reach out and just shoot me a note directly through LinkedIn and we can grab some time.
Nathan Oler, thank you very much for this. This was awesome. Yeah, thanks for having me. Appreciate. Thank you.