You can probably list loads of reasons why starting a community could be valuable.
And Chris Yates, the founder of Rhodium, is on the podcast to share a BIG reason with his awesome success story.
He talks about his journey of transitioning from owning a digital marketing agency to buying online businesses and eventually founding Rhodium to connect with others in the industry.
He emphasizes the importance of building a community and the benefits it brings:
- Learning from others
- Making deals
- Forming partnerships
Chris also highlights the value of community in providing tactical ROI for businesses – like how engaging with a core group of customers with direct feedback can lead to valuable insights and improvements on everything from pain points to pricing.
He gives lots of examples but the stand out is definitely his own experience.
He was offered to buy a business from a Rhodium member for 5 figures thanks to the inherent trust from shared beliefs. He then grew it with help from the community and sold it to another Rhodium member for a multi-7-figure exit.
Overall, this is a discussion that is both a great success story and guide to the benefits of building and nurturing a community of like-minded people in your niche.
Watch The Interview
Topics Chris Yates Covers
- The importance of talking and sharing with others
- Benefits of being a connector
- Gaining traction
- Positioning
- All the amazing things that have come out of the community
- Building real connections with brands
- Monetization tips
- Structuring the community to benefit members
- Growth strategies
- Finding opportunities
- Selling the business
- And more…
Links & Resources
Transcription
Jared: All right. Welcome back to the Niche Pursuits podcast. My name is Jared Bauman. And today we are joined by Chris Yates with Rhodium. Chris,
Chris: welcome on board. Hey, thanks for having me, Jared. Excited to chat. It’s good to have you. And it’s funny
Jared: because on our agenda, obviously we’re going to be talking about your development and growth of Rhodium.
And I think a lot of. Things that come out of it as it applies to the listeners, they’re going to get a lot out of what you have to share. We kind of were working through an agenda, but I noticed that before you founded rhodium, you had Centurica, which we had Nate Ginsburg on about probably a year ago.
So, um, there’s a lot of parallels here to some things you’ve already talked about, but I’m excited to hear your story and kind of learn from you. Welcome. Um, welcome on board. Why don’t you tell us a little bit about yourself and, you know, catch us up
Chris: to where the story starts for today. Sounds good. Yeah.
So I guess my, the quick, uh, story for me is I, uh, started buying online businesses after, uh, owning a digital marketing agency and realizing that I was not building anybody’s, I was building everybody else’s businesses and not building assets that I could kind of own and control. Um, so started buying online businesses.
This was like back 2009, 2010, um, built up a portfolio and ended up selling the agency cause I was enjoying the portfolio. And, and ultimately that kind of led me to. Feeling a little isolated. I live in Montana and there’s not that many people here that do what I do for a living. So I wanted to connect with others and that’s kind of how rhodium ended up starting is around 2012.
I decided to bring people together who were doing what I was doing at a in person event and do that in Vegas every year. I’ve been doing it now for like 11 years or so. Um, and that actually came before Cinturica. So I’ll, I just, just to make sure we, we tweak that, that comment. But, um, yeah, so that’s kind of like the.
The beginning stages of rhodium.
Jared: You know, it’s interesting because you mentioned, I mean, I mean, I run an agency myself and, uh, nowadays even having an agency with, with everybody spread out all over the world can be a little bit lonely, uh, and then obviously growing your own, uh, your own websites or building your own assets is, um, is a digital job.
I mean, how did you, I guess, in the beginning of rhodium, how did you have an idea or a sense that people wanted community? Was it something that you were hearing feedback on or just kind of roll the dice and take
Chris: a chance on it? Uh, it was more rolling the dice and taking a chance on it. Um, so what we did, I had a business partner at the time who I since, um, bought out and, and, uh, but, you know, he had some experience in the event space.
And so I was able to, uh, let him convince me that it was a good idea. And for us, you know, when I thought about it. Two things. One, just being able to talk to other people who were doing what I was doing, be able to share that knowledge was one. Um, two is, you know, we actually kind of, uh, very meta. We bought a, uh, a business, a online business that was teaching people how to buy businesses.
So with that, it came with a, uh, email list and kind of a forum and things like that. And so we were like, Hey, how can we, you know, kind of expand this and continue to. I guess build our name and awareness of who we were, um, as well as maybe, you know, that would lead to some deal flow or, or some other interesting opportunities being kind of, uh, I guess, uh, a connector within the space.
And we didn’t really see anybody that was really doing that yet. And so we figured, Hey, it’s worth a shot. Let’s try it. I feel like
Jared: community or building communities is coming back in vogue a bit, or I’m not sure if it ever went out. Style isn’t really my thing, as you can tell. So, but, um, excuse the style reference, but I mean, from the beginning, like you were basically building a community.
Um, and, and doing that maybe before, like a lot of people listening might think, well, we’ll build the website first, or we’ll build the brand first, or we’ll build the traffic first. We’ll build the interest first and then add the community. Um, maybe touch on the process you went through to build and validate the community.
Cause it doesn’t sound like it followed necessarily that path.
Chris: Yeah. Um, you know, I think back on it. We, we had that initial list from the business that we’d acquired, the training business. We had our experience of actually being in the trenches, acquiring and growing these businesses. And so, uh, at a minimum, we had the ability to bring people together to learn from kind of our experiences.
And, and, uh, so it really did start out less as being a true, you know, peer to peer kind of knowledge sharing community and more like, Hey, let’s just start by. Sharing what we know and be able to have some conversations with people in the process. So I think there’s something to be said about if, you know, I kind of think about positioning wise, you can, if you’re going to build a community, you can position it like I know nothing and I’m getting smart people around me to, to be able to help one another and all, all, uh, boats or the rising tide lifts all boats type thing.
Right. So that would be like a positioning that I think anybody can do if they’re still, you know, if they don’t have a lot of experience. Um, but want to surround themselves with people. The other would be like, Hey, I have some experience that I’m willing to share. I’m not necessarily the, the expert, but like, I have some knowledge to share and this can spark conversations to get other, other people who are also in the trenches doing this work to, to share along with us and be more of a peer to peer model.
Uh, and then the third would be more of like the guru model. Think like Tony Robbins, where, you know, they are really there to see him and their community is, is, is a big part of it, but like he is the show, right? Um, for me personally, I, I was sort of in that the first of the two buckets when I started because I didn’t really want to be necessarily like any kind of guru.
Um, you know, it definitely was more behind the scenes kind of person, but I love the idea, you know, I would say, uh, you become the average of the people you surround yourself with. And so I wanted to surround myself with other people who were. You know, doing the types of things we were doing. So we could share that knowledge and deals and various things.
So maybe like catch us up
Jared: on where Rhodium is today, what it looks like, and then we can kind of get into the stories that unfolded. Cause I mean, like you said, it’s 11 years old. So I’m guessing there’s quite a bit to the story as you’ve
Chris: grown it. Yeah. So, um. Yeah, I started it out. Yeah. Like I said, teaching people kind of doing what I was doing.
And then people after the first event or two were like, Hey, how can we stay connected between events? So I started an online forum because that was what the community was asking for. Um, and over the years, I actually, I, I do things with the community that most sane people wouldn’t do. So I actually meet everybody on like a zoom call typically before inviting them in just to make sure it’s a good fit on both sides.
And, uh, You know, that actually has, that investment up front has been really key because, you know, as the saying goes, one, one bad apple can ruin the bunch. And if you’re not careful with communities, you can get people who are in there to just take and self promote and things like that. So I work really hard to, to kind of clear that out.
So that’s been a really key, you know, point along the way was, was just meeting those people, finding out what their needs were, uh, getting them involved and engaged in that community. Um, and then. Yeah, the business model as it stands today is that that Facebook group, I don’t charge for it. It’s like, um, you know, there’s about a thousand members in there and that’s really grown through word of mouth.
Um, and then I do an annual in person event. The, I found that when you take people who have met offline and then take them to an online community, that pairing is super important to build that, at least that core group who really kind of understand one another, they have trust with one another and things like that.
So. Kind of combining those two things in various formats have been really, really key as well. In addition to the interviewing that I do. Um, and then, uh, what I do to monetize it, and it’s cool to get paid to do something I would do for free. It’s kind of how I think about it, but I do, you know, it helps to justify the time to actually make money from this.
So I charge for the in person event. Um, and the model with in person events, usually you either have, um, kind of attendees pay for things. So they, they would pay for a ticket and that kind of covers your costs. And. Let you make money or you have sponsors or you have some combination of the two. I’m definitely more heavy on the attendee, you know, kind of funded with a little bit of sponsorship.
Um, and then coming out of COVID, uh, I realized that having a, your business built around a single in person event. That happens once a year is not necessarily the most, um, uh, what’s the word? Like, like, uh, you have a lot of eggs in one basket to put it. I was going to ask about COVID. Yeah. Yeah. So we, I started something called rhodium remote, which is kind of like a mastermind, uh, format where we.
Group people together based on their businesses and help match make and things like that. And we do regular zoom meetings and have a separate channel and stuff like that. So that’s nice because it adds a recurring revenue component to the community and allows me to justify, you know, spending more time to, to help those people who are part of it.
Um, and have a little bit more infrastructure around all of that. It’s a great model. Cause like literally, I mean, I love it. Cause I. Like I’ve had people get married from meeting at my events. I’ve had hundreds of millions of dollars in deals that have happened for people, uh, being part of the community, business partnerships, friendships, you know, so I get to challenge myself as well.
I like, it kind of hits every, every, uh, elements from, you know, being able to pay bills all the way to like make an impact on people’s lives. So I love doing it. Who’s the,
Jared: um, like what’s the avatar of the typical, say attendee or a person who comes to, to, to the
Chris: weekend event? Yeah, so it’s going to be, um, one of four main business models, e commerce, SaaS.
Uh, content slash media and services. So all digital business owners, typically their owner operated, they’re running a profitable company revenues, anywhere from like high six to mid nine figures with our typical member kind of low to mid seven. Okay, good.
Jared: Yeah. Wow. Same, probably the similar four buckets of, you know, inter interviews we have here in the podcast in many ways.
Um, and I will say. I don’t, I haven’t kept track because I never really know, but I know that we’ve interviewed a lot of people from the rhodium community here on this podcast, different success
Chris: stories or different business models that, um, that attend out of the weekend or,
Jared: um, um, online and those sorts of things.
Chris: So it’s clearly attracting successful people. I mean, there’s been a fantastic member of the community for years, and I don’t know if he told his long tail pro story and how rhodium fit into all that, but that was kind of a. A cool little thread. Maybe you could ask him about it at some point. I
Jared: will have to, I will have to, you know, Spencer took a little, uh, little vacation here from the podcast, but now we do a weekly session on the, the, the, the, um, on the weekly news and, uh, that’s where I get to ask
Chris: Spencer, uh, questions
Jared: live that, um, we’ll, we’ll make him tell a good story.
So I’ll throw that at him. Um, so why don’t, I mean, why don’t we go back to how you’ve grown this? And I know you have had, you kind of teased it a bit, right? Like there, I didn’t know about the wedding by the way, or the marriages, but I do know about all the deals that have happened. And, and, and certainly some of those stories.
If you take us back and let’s start back at the beginning and how you’ve grown this, but really what it’s led to for you. And I think that’s what I want to encourage them to listen into. I don’t have all of the script here in front of me, but I just have a couple of talking points about what Chris is getting to.
And I think that. So hearing what Chris is going to talk about and the threads in between it, the value of community and how that can play a role in your business. That’s to me, the meat and potatoes and the really, really intriguing part of your story that you’re, I think you’re going to get into here.
Chris: Yeah. And I can give you the headline. So, uh, in addition to being just an awesome business to run, it’s given me some interesting opportunities as well. So. You mentioned Centurica. So I was able because of Rhodium to acquire that business for kind of mid five figures and grew it with the support of the community and ended up selling it for multiple seven figures.
And all of that was a result of me, you know, first making the decision to build community around me. So, uh, we can dive right into Centurica if you like, or if you want me to, to give more details on, on, uh, you know, how we got to that point, uh, you know, let me know. Yeah, I mean, let,
Jared: let’s pick up where Sinchurka kind of comes into the, into the fray.
We had Nadon last year, obviously he’s the one who purchased it, I believe from you, if I just do my timelines right here. But I mean, you know, talk about what it looks like at the start there, but also, I mean, I’m just curious, what does it look like to have a community where these kinds of
Chris: opportunities can come up?
But yeah, I mean, it’s cool. Cause you know, like I work hard in the community to build, um, a culture of giving and paying it forward. And so. You know, it’s, it’s when you build relationships first, good things tend to come as a byproduct of it. That’s kind of how I think about it. And so after doing the event for a few years, one of the, the original founder of Centurica, which was not me, I bought it from him.
He was, he had come out to do a talk at Rhodium. He’d been a member of the community and he was ready to kind of like using a baseball analogy. He saw Centurica as like, this is like a base hit for me. I’m looking to do like a home run. And he was looking for. You know, really high scale business that he could do.
And so he’s like, yeah, it’s time for me to kind of move on from some Sherika and there’s two people in the world I would sell this to. And Chris, you’re one of them. So we ended up, uh, he approached me and we came up with a deal that, that was kind of a no brainer for me. And if you think about it, the fact was that I had a built in community there who already had.
Let’s just say an affinity towards buying, um, online businesses and Centrica, what it is as a business is, and if people haven’t listened to Nate, it’s, it’s a due diligence company. So, when somebody is buying an online business, they’ll go to Centrica to have them look over the financials to make sure they’re legit to really understand the, um, the traffic and the revenue and make sure that’s all sustainable.
So. Real estate analogy. You know, it’s like the property inspector in a real estate deal. Right. So it made sense that if I had this kind of, uh, had a little bit of a reputation in the buying and selling community, I had this captive audience in rhodium and for me to buy a company like Centrica that would be supportive and, you know, kind of help people make safer decisions in their, in their purchases.
Made a lot of sense. So, um, that’s the first unfair advantage. The fact that I had built that reputation, the fact that I had, um, uh, you know, built that relationship with the original founder of Centrica, he had trust in me. He saw, you know, that I had a platform. Uh, I was one of the two people that he was willing to, to sell this business to cause it was kind of still his baby a little bit and he wanted to make sure it went to, to somebody in good hands.
So had I not put myself in that position, that deal never would have happened.
Jared: It’s interesting to hear you talk about that. I mean, it, do you think that that had more to do with the fact that you were in the community or the fact that you were running the community, if you know what I mean?
Chris: Yeah, I, I mean, both and so it’s, I don’t know that it’s an either or, um, because I’ve seen members of my community have similar things happen because they’re in rhodium.
It’s like, it’s almost like you have an instant trust factor. Um, you know, like if, if you were, I wasn’t in fraternities and stuff, but like I had, I have this idea in my head that like, Oh, you were also in that fraternity, instant trust into instant report, right? I think it can be true. Like, maybe it’s the same with niche pursuits audience where, Oh, you also listened to, you know, Jared on, on his podcast, you know, instant reports of trust.
Right. So, so I think that’s true there. I think specifically the fact that I, um, was in that position and I had organized this, this community. And built that relationship, um, you know, I, I think, I don’t think it was the only way that it would have happened, but I think it definitely helped, um, because, you know, like, I think he, he saw in me, um, somebody who’d put themselves out there who, who had a reputation that he wouldn’t just go screw the screw up the business totally.
And, you know, kind of like, um, do whatever I could to make a buck or whatever. So I think there was. I had a track record that he could publicly see. Uh, so I think that was helpful, but I don’t know that it was required. No, I,
Jared: and the reason I asked because I’m kind of connecting some of the dots, you know, like the dots of you investing up front in this community by, you know, as one example, interviewing people before they come in and join, right?
Like they’re, they’re willing, ready and able to give you their money, but you’re
Chris: saying, let me, you know, kind of interview, get a
Jared: personal connection, establish that. I’m just hearing threads of that in your community building. There’s purpose. And then what comes out of the back of purpose comes with an opportunity that perfectly aligns with what you do.
It’s interesting to see that that’s. The aside that came from the community
Chris: you built almost. Yeah, absolutely. It’s true. And it’s hard when we talked about before the show, how communities are hard to justify when you just look at the ROI directly, um, because it is very much that butterfly effect that you just can’t predict.
Um, like who would have known that this one person that I would have met. Uh, at one of my communities, you know, that, that would have led to a really good outcome. Um, you know, and who knows that the business partner that I ended up working with to, to start, you know, Rhodium and all that, like that all these things would come from it.
So it is truly. More challenging to make that. But yeah, so I mean, if you can make it at least break even and knowing that these opportunities will come when you build community, I think it’s great. The other interesting thing I think about communities in terms of, uh, I guess connecting the dots is that, um, community is It isn’t like a tactic or a hack like humans at our fundamental core need to feel accepted and to be part of the tribe, right?
And, um, that creates so many like brand connections and the more I think over time as we see more and more commoditized. For instance, content publishing or commoditized products in e commerce, like being able to have a real connection with the company behind it, uh, is going to be a real competitive advantage.
And I think community is one of the best ways to do that, whether that’s an online community or in person events or whatever. So yeah, it is, it’s an interesting piece that you’re, you’re bringing up. Maybe to
Jared: double down on that point you just made, or some of the points you’ve made recently, um, a lot of people listening.
I’m going to just try to speak on behalf of some of the audience. A lot of people listening right now are seeing a You know, 2023 was rough in that maybe a channel of traffic or growth they counted on has changed a lot this year. In many years, I could be saying that about every year for the past decade, you know, as things have changed on social media with organic traffic and whatnot, but certainly this year we’ve had.
Landscape changes for a lot of people in terms of how organic traffic is distributed. A lot of people are thinking about other ways to generate traffic to generate potential revenue down the road to generate interest eyeballs. Right community might be on the table. Like, how does someone evaluate it in terms of an ROI position?
Because you spoke to how hard it is to justify. The ROI, but when you can’t predict that you’re going to meet someone whose business you’re going to buy, uh, two or three years into starting a community, you can’t justify maybe starting a community without that ROI component, without the
Chris: return investment planned out, but
Jared: it’s so impossible to predict who you’re going to meet.
How do you,
Chris: like, do you have any tips for people?
Jared: To use to evaluate whether
Chris: community makes sense for them as a decision going forward, you know, and just to clarify if they were going to start a community around their brand. Yeah, so what I would say, the 1st thing that I would think about is, can I get 5 people from my customer list, my leads, whatever, who are actually interested in engaging?
In some form of community. And it doesn’t even have to be, this is going to be a thousand person community vision. It can be, Hey, let’s just get together once a quarter and chat. Um, but, but community, in my opinion, really starts with a core group of people who are engaged enough to, uh, have a conversation with one another.
So from an ROI perspective, you’re really just justifying is the time worth meeting these people once a month or once a quarter. Enough to justify, um, the time that I’m spending on doing that. Right. You have a lot of options that can open up if that assumption that these people want to get together and share knowledge and experience is actually true.
Right. When we, but like, let’s say we had five people and they were maybe your best customers. You’re, you know, you do it, you’re a Pareto principle. You look at your top 20 percent of customers. Who are generating 80 percent of your revenue and say, Hey, I want to put together, you know, like a, a customer mastermind or, or, uh, you know, focus group or whatever you want to call it, that, you know, is benefit to them.
I want to connect you with other people who are really successful with my product service, et cetera, that, that you do. Then what you end up having, and this has happened to me so many times is like, you get to learn those new tactics and how people are reacting to, uh, these, these big, you all that kind of stuff.
Like. You get to talk about those problems and you don’t feel like you’re so isolated. So there’s like an emotional ROI because of that. But the tactical is, Oh, I just learned something from person a, that I can then apply to my business. Um, and you, as the leader of this group, you can also ask about how you can improve as a business.
You can get that real feedback from your power users. And implement that to make your business better, whether it’s customer service or, or other opportunities and things like that. So if you just started with five people and all it was for you was an ability to talk directly to your customers on a regular basis, your best customers that you want more of, um, that alone in my mind will more than justify any ROI you get from the benefits you get from.
Insights that they’re giving you, uh, and lessons learned with conversations and problems that they have that you can maybe help them solve. I, you just sparked
Jared: my memory. I think back to my last company, which was a photo editing company. And I, um, I started a group of people, um, basically our power, some power users to, and the hopes of it was getting them together, um, to hopefully help evangelize, help them evangelize the product and you’re exactly right.
While. There was some product evangelization that happened. There was some good marketing that came out of it. More than anything, I just learned about all the problems our product had that I didn’t realize, or all the things we could improve on in terms of communication with customers, all the little things that bugged people that I didn’t really realize were that big of a deal.
It’s a good point. That was kind of the first stuff that happened, not the evangelization
Chris: or the marketing. Yeah. And you know, this, this sparks something for me. I see it all the time in my community where somebody will have a business. And they will go to the community to ask a question that they should go be asking their customers that same question.
Right? Like, are these, are these people like, you know, let’s say they sell, I don’t know, HVAC parts or something like that. Right. And they’re asking a bunch of online entrepreneurs, like, is this the right decision I should make with my, my HVAC e commerce business? I’m like thinking to myself, can you just ask that same question to your customers?
And this gives you. An opportunity to be able to do that. It’s like a no brainer thing that people should be doing is, you know, talk to people who actually can use your service. And, uh, uh, this gives you like a direct line into doing that. Yeah.
Jared: Um, and it’s, as, as, as you kind of bought Sinterka and started to grow it, I mean, anything along the way.
That you can share with us, uh, that helped you grow that brand. I mean, I am transitioning a bit, but let’s be honest. The vast majority of people listening love to hear tactics about how to
Chris: grow online businesses. And,
Jared: um, and that’s what a lot of people listening and Sinterka will obviously apply in a lot of ways to people who are listening and kind of any strategies you used along the
Chris: way to grow it.
Absolutely. So the first one that comes to my mind is, um, and this comes from talking to your customers. So this is, it’s not a total departure from what we were talking about. But, um, so what I was doing in Centurica in order to learn better, uh, because originally the model of Centurica was to be very productized and just do all the ordering online.
So after I acquired it, I wanted to find out what were these people actually doing? Like what kind of businesses were they buying? All that kind of stuff. Um, Uh, you know, the prospective clients, right. And kind of cast a little bit wider net. Um, then just the people who are ready to buy. So I started doing more lead generation and doing more discovery kind of sales calls.
The book that I read that changed the way that I, I look at those sales calls and made me feel like they weren’t actually sales calls, but actually like, I’m just here to help you and I’m not trying to sell you kind of thing is a book called spin selling. So I applied the techniques in that book. Um, the key one being to really discover.
What is the problem? And what is this implication of this problem? Uh, and that helped us, you know, close more deals and things like that. But what it more importantly did was our, when I bought the business, the pricing was typically around 500 for a due diligence project. And that was priced right for people who were buying maybe like a 20, 000 or a 50, 000 website.
But then I started talking to people who were buying like a million dollar. Uh, business like an online digital business, right? And they’re like 500. That can’t be good. That was the feedback I was getting on those calls. And so I’m like, okay, 500 isn’t good. And this became, um, the, the key, the other key principle, which is you start to recognize that you can start to go up market when you start getting this kind of feedback.
So where we were originally were people who were buying like 20, 000, 50, 000 sites. And they were really just kind of learning and business opportunity seeking and things like that. Then we started getting people who were like, this was going to be my career. I’m taking out a loan to buy this business and it’s going to be my life.
They had a lot more to lose. They had a lot more pain if this deal didn’t go right. And so the difference in value between those two people was substantial. So what I did was I created a package, which was 10 times the price of the 500. So I created a 5, 000 package. And that was for these people who wanted more handholding.
They wanted like that high touch service. So I just basically threw everything I could think of in the kitchen sink into that package, just thinking no one would buy it. Right. Literally in the first six months after launching that the business grew by about 500%. Um, because. People wanted that business.
Then a new problem occurred, which was that, uh, I had had promised all of this stuff and I had to fulfill on it. And I was like, okay, either I get to stop selling, or I got to change this or something. But, you know, so that created more like operational issues that started to come up, but. The cool thing was by charging more, I now had more margin to put into team to help me actually fulfill on the services instead of having to do it just with a couple of people in a contractor.
So that was the first key like strategy, um, you know, looking to go up market. Offering a higher price product. Worst case is nobody buys it, but your other 500 one now looks cheap and you probably get more sales on that one. So, so that was the first, uh, growth tactic that we use. And I kind of was kicking myself cause I didn’t start that until like six or 12 months after buying the business.
Jared: Some good pricing strategies right there, man. My, uh, I used to, I used to speak publicly on pricing strategy and I love nerding out on that kind of stuff. I can only imagine how well it worked.
Chris: Um,
Jared: you know, like how did you tap in just since we are kind of. Focusing around community here as you grew Centurica, did the community help in any additional ways?
Um, whether it’s people, whether it’s processes, whether it’s, uh, growth, whether, I mean, I’m just throwing some ideas out there, anything else that you used in
Chris: the community to, to grow it? A hundred percent. So number one, um, when I acquired the business from the original founder. He was leaving and his other business partner who was active in the business was also leaving.
So I had, I knew that I didn’t want to do all of the work myself. Um, and so I was at one of my rhodium events in 2015 and, um, a gentleman named Brian Diener, who’s my, who became. Ultimately became my business partner was one of the attendees at the community. And I started talking to him, Hey, I’m buying some shirka.
I’m looking for somebody who might, you know, be able to help me operate it and stuff. And so he came on as like a contractor to start with just on a project basis. And, uh, he was a key, key first person there to actually help me, um, you know, allow me to focus on sales and, and he focused more on the fulfillment of the, you know, the work that we did.
Um, and so it was a really good pairing there. And ultimately he became my business partner, uh, in, in the company, not just a contractor and helped me grow it to the point where we were able to exit it. So, um, like. Again, without that community and that relationship, um, that came from the community, that wouldn’t have been possible.
One, and just one little thing I learned with, with business partners is if you can find somebody who has a, um, kind of is the yin to your yang. Um, so, so Brian was very much, Hey, let’s make this thing efficient and let’s not start a bunch of new stuff and let’s keep this thing operating really well. I was much more, Hey, let’s go launch the next product and let’s, I have the ideas and things like that.
So that. Actually worked really well as a pairing. He was much more of like the finisher and I was more of the starter type. Um, so that was just a really helpful lesson on business partnership. You can find your opposite, but sometimes that can be a really good thing. I
Jared: couldn’t echo that more. I have the same in my business.
Chris: Um, so.
Jared: Take us up to, because I obviously, you know, I mean, I don’t want to short circuit the story, but at some point you ended up selling it to Nate. Yes. So again, folks, we’ll, we’ll link to his podcast episode in the, uh, in the show notes. I can’t remember exactly where Nate picks up on the story. Um, cause the interview was a year ago, but I’m guessing it’s right around the time he bought it.
Cause I know we focused on Centurica, but. You know, how did that, how did that deal develop? How did you realize, you know, you wanted to
Chris: sell? How did it come to be? And, you know, again, I’m curious to hear how you met Nate. Okay. So, um, let me just fill in a couple of quick gaps, uh, in terms of how the community also helped, uh, grow Centurica was I got clients from the community because people have that, you know, that trust there.
So if you can take a community and monetize it by offering some kind of a backend service or offering, that’s a really key piece that was really crucial for, for Centurica to both get. Referrals and word of mouth customers, as well as direct customers from, from the community, um, and to build that reputation.
And then, uh, what happened was, you know, after growing the business to a certain point, we caught a wave. Um, and so I don’t know if this has come up yet in any of your past podcasts, but the wave that I’m speaking of is a whole bunch of money went into funding Amazon aggregators. And we thought that way because after the, you know, the prior, prior five or six years of, of building Centurica, starting with people who are doing 20, 000 deals and a million dollar deals, 5 million, 10, et cetera, it’s a million dollar, um, you know, we were able to catch that wave of all this money coming in and people needed to hire help for, for due diligence.
And they started comparing us to like a PricewaterhouseCoopers who charged, you know, 50 to 500, 000 for a due diligence package. Pretty soon we started looking cheap and we saw an opportunity to go up market. So, um, directly as a result of the community, um, you know, being, being supportive and referring and all that kind of stuff that happened.
Um, so we eventually got to the point with Centurica where we’re doing over a million a year in profit. And it was like me and Brian and like a team of contractors. And we really made this thing efficient. And profitable and we were at a decision point where we could either reinvest. Put a bunch of overhead in the business and hope that this wave continues to go in the future.
Um, but neither Brian and I had a lot of experience building big teams and, you know, systems and stuff. And we had this really profitable business. And I think that it’s pretty common, especially for agencies and service businesses to have this chicken or egg scenario where it’s like. We need more people to, to pay for the clients, but like getting more people takes money out of our pockets and we don’t know what’s going to happen with it.
It’s like this, this weird chicken or egg. So, you know, we, we were like at a decision point, do we reinvest in the business, build out a bunch of processes, build out a team and hope that the market continues to be really good. Or do we consider, you know, another option might be to sell it. And lo and behold, rhodium came in again, which is, uh, Nate had been a longtime member of rhodium, Nate, the buyer of Cinturica had been a longtime member of rhodium.
And we talked, uh, you know, he was active in the community, et cetera. And apparently it had always been his idea that he wanted to buy Centurica. So he reached out to me again, just, you know, top of mind, right? Because I had been in front of him for however many years he’d been in Rhodium, um, reaching out to say, hey, any interest in selling Centurica?
And, uh, we ended up doing the deal. I’m sure Nate told the whole story, uh, on that podcast, but that’s how Rhodium also fit into the, to the puzzle. So I, I bought Rhodium, or I bought Centurica from a Rhodium member. Had a business partner that helped me grow rhodium. I got a bunch of clients and referrals from rhodium and I sold it to another rhodium member.
So, uh, if that doesn’t show you the ROI of a community, I don’t know what does. And it’s
Jared: a paid community. That’s the other thing. It’s not like you got a bunch of people together. Uh, I know you have a free, uh, a free, uh, part of it, but this is all done really within the, the paid community. I mean, talk about moving up market, even in your own
Chris: community.
Yeah, I absolutely. And that’s been an interesting one to, to balance, um, is, uh, you know, you have somebody in the community who is. Let’s say they’re doing eight figures a year, right? And then, uh, you have to decide like what is best for the community. Do I bring in somebody who has really early stage questions and problems or are they better in a different community?
Right? And so you, you kind of have to evolve over time with, with community based on the dynamics of your community. So, you know, you have to find like, what is the avatar that I’m really trying to focus and help and problems that I’m trying to solve. And sometimes people at other end of that, you know, somebody who is doing nine figures.
Their problems are so different than people who are doing seven figures in the community. Typically, uh, oftentimes they’re not always that different, but, but oftentimes they, they may be, uh, and then somebody who’s just trying to product find product market fit. Their problems are very different than people who are looking to scale.
So, yeah, you do have to evolve over time. Um, and for us, it did, it has meant going up market a little bit and People who are a little further along in the journey, you know, typically they have product market fit. They’re looking to scale, you know, 500k a year and up sort of, sort of thing. So I,
Jared: I guess maybe I’ll ask at this point, I’m curious to get your feedback on, um, going back to people thinking about starting a community.
Maybe they’ve listened to us 30. Plus minutes in now, and they’re thinking, man, um, I can see all the benefits to starting a community. What tips would you have for people starting to meet? I know you, I don’t, you did talk about going to your first five people, but maybe more on like a tactical level, like, uh, whether it’s mistakes you’ve made or things to pay attention to, or ways to get that
Chris: first set of traction.
So you can start
Jared: to see some ROI on
Chris: it. Um, just tips on starting a new community. Yeah, um, so that that core group is so key because that’s where your conversations come from. Um, the size of the group matters a lot when you, uh, when you take into account how much conversation is happening. So if you have like a really noisy, small group that may feel like, Oh gosh, this is not great.
But if it’s like, you know, a thousand people and there’s one post every week, um, something’s going to feel off. So you have to find the right balance of, of like, uh, conversation to number of people. Um, and. What I would say is, you know, I, I think there’s like concentric circles. There’s this idea in psychology called Dunbar’s number.
It’s basically the number of people that, that humans can maintain a relationship with. Like another way to put it is, you know, there’s about 150 people that you probably have that you would go and say hi to at a bar if you saw them. Right. Um, and so that’s like a helpful number, like, um, to think about, but within that 150, there’s smaller concentric circles.
So typically there’s about five. In your, your family, you know, your closest close knit group. And then there’s another circle that’s like 45 or 50. And then, you know, it goes up to like, uh, whatever it is, 75 or something. Um, so you want to kind of grow those concentric circles, like with intention and be really careful that the next person you bring in is going to be additive to the community.
Um, if we’re talking about like. And again, this is assuming this is a peer to peer more knowledge sharing as opposed to like a guru led community. But yeah, being thoughtful about how quickly you bring people in. The other thing that you can do if the ratio of people to conversations is not high enough is just start conversation starters.
So it can be as simple as like, Hey, the helpful content update just came out. Who’s been, who’s been impacted. Right. And now you’ve got a conversation that starts to engage people. Um, and so you can kind of lead and spark those conversations to keep the, the ratio, um, you know, going as, as much as possible.
The other big thing I would say has been special for rhodium is actually having a defined set of values for the community. So we have like four main values, but one of them is paying it forward. And, um, so that means people are in a giving mindset. So if people are just there, like, I basically have a very heavy hand for self promotion of any kind.
There’s no faster way to screw up your community than allow people to spam their stuff. Um, so you gotta have a heavy hand with it. And that means kicking people out if they are, you know, they’re takers instead of givers. Um, because like as soon as people start seeing that they’re going to bail, uh, so you gotta, you gotta be really careful about filtering things out, um, with that.
So those are a few just like quick things off the top of my head. You kind
Jared: of dovetailed it nicely. How do you, uh, recommend or how do you find content to keep people engaged? I mean, you said yourself like content is a little bit. Uh, pretty easy to find nowadays, right? And, um, and certainly that’s where the value of community comes into play, but you have to have something to share to get people in.
And this juxtaposition that I think a lot of people might be thinking about as they
Chris: look to create a community. Yeah. So here’s what I would say to that is you have to think about the positioning of your community. Why does it exist? Is it there for you to share content with your perspective and current clients?
If so, the content should come from you and you should be the show. Um, and the, the, where you can monetize something like that is, um, obviously you can drive them to content that then leads to sales. Or if you are the show, people want to be closer to you and sometimes they’re willing to pay to do that.
So if you have your own like really common term you’ll hear out there is like an inner circle. Where it’s like, you, you know, instead of it just being an online forum, now they’re on live calls and they’re doing Q and a with you and they get to be closer and they pay for that and maybe you record that and that, that becomes recordings that you can then, you know, sell access to or something like that.
So, um, that would be one positioning, which is like a guru led your job is producing content if it’s more positioned as this is a peer. You know, community where like the, like in my community, the content does not really come from me. I’ll share stuff as I, as I have it, like the story with some guys share that in the community, obviously.
Um, but I am not the show, like the community is the show. So my job is not to come up with content. It’s to get, it’s to create a culture and, and show people that the values of rhodium are being willing to share and give your knowledge to others. And, um, that’s really where, where it comes from is. Setting that expectation up front and having the positioning that people know that, like the expectation of this community.
Is to share. Now, if we’re looking for tactics around that, um, I don’t personally do this, but there’s a great community called e commerce fuel. A guy named Andrew Udarian, fantastic guy, um, who, who built his community. What he does is when somebody first comes into his community, they’re required to kind of write up, like, let’s just call it a white paper.
So they in order to be a full member of the community, they first have to give in order to unlock access to be able to receive. And so that could be a simple thing. You start with to help to filter out. Some of those people are not willing and able to do that. And, you know, again, you just tie it to the positioning.
Like, why does this community exist? And then you tie it to the values. And you think about like, what are the actions that are indicative that people are following the values commonly, that’s going to be, they’re very sharing with comments when people ask a question and all those kinds of things. And so that starts to become the norm and the culture of the community.
Jared: That’s good. Um, have you seen any track record of success with people buying communities? I mean, certainly you ran a company for many years that was all about evaluating. Things, uh, businesses. I don’t know if communities have ever made their way into that. Or do you just see like, um, do you see any, any aptitude for people wanting to buy a community rather than start it themselves?
Chris: Um, I have, so the biggest player I can think of that would be in this space, um, and I don’t think the outcome was very good for them, but there, I think there may be still around. It’s called vertical scope, I believe, um, and they’re basically like an aggregator of forums. Um, but obviously. You know, the bulletin and these old, you know, technologies around online forums have kind of changed and, you know, Facebook groups and slack and all these things have kind of, uh, eating at their, eating up some of their lunch.
But that was their whole models. They go by, they go by forums and they had a playbook for operating those, those forums and forums at the end of the day are a community. Um, and so that would be like, if you wanted to study somebody who’s done it, that would be the company I would look at. Um, sold
Jared: going back to Centurica sold that and, uh, what are you up to nowadays?
You just live in the good life, uh, once a week, once a year, the rhodium weekend, or, you know, like where, take us back from, uh, take us back to where you’re at right now.
Chris: And, and, and kind of what you’re spending your time on. Yeah, it is an interesting, I told myself, and you’ll hear this if you ever have an exit that’s meaningful to you, people will tell you don’t start anything new for at least six months or a year, the number changes, but I told myself I’m not going to start anything new for a year and I had rhodium to kind of fall back to.
And so when I sold some shirk, uh, um, it’s pretty much in the, whatever it is, 11, 12 years, I’ve been doing rhodium. I’ve always had another operating business or portfolio that I was working on in addition to rhodium. So this is the first time I’ve ever had the opportunity to just focus on rhodium. And, uh, It’s so fun.
I’m loving it. I have kids that are, you know, I have a 12 year old and a 15 year old and a wife and so like I’m, I’m in this weird place where I’m like, you know, I love doing rhodium. I can see myself continuing to do that regardless of other things that I’m doing. I’m also trying to live the good life, as you said, and, and, uh, you know, not get sucked into.
You know, starting something brand new and all that. So I’m in kind of this balancing, living the good life for a while. And uh, I think of it as a season, I guess. And it’s interesting, you have new challenges to decide. So like now it’s like, well, I don’t want to sacrifice the good life to go after some potential home run.
Um, that may suck me in to having to hire a bunch of people and all this kind of stuff. Um, but is it really worth it at this point to just go for a single and so you’re, you kind of end up in a, I don’t know, like you have to create new decision filters for yourself for opportunities. And right now my default is rhodium and I’m going to wait to see what happens.
Almost full
Jared: circle back to the person you bought Cinturica from, who was ready for, uh, wasn’t ready for a single, but was ready for their home run
Chris: almost. Yeah, exactly. Interesting. Um,
Jared: hey, uh, Chris, where can people catch up with you and, and kind of, you know, either learn more about Rhodium or
Chris: what you have going on?
Yeah. Rhodium weekend. com. R H O D I U M weekend. com. Um, as I mentioned, I interview everybody before, uh, inviting them in. So if you want to have a chat, um, you feel like you could be a fit for rhodium. That’d be the easiest way to do it.
Jared: Hey, thank you for coming on board. I think we’re going to be talking a lot more about community this year.
Uh, building it, participating in it, its value to a brand, to a business. I mean, I even think we’ll probably have people coming on. To talk about it almost like you did where it wasn’t a bolt onto a business, but we see these stories of people just starting a community for the purpose
Chris: of the
Jared: community.
Chris: Um, and, and so whatever that conversation
Jared: looks like, um, I appreciate you coming on, kicking off the year that I think we’ll have a lot of conversations around this topic.
So
Chris: thank you so much. My pleasure. Thanks for having me on.