Bootstrapping into Silicon Valley

Daniel Faggella

In Episode #711, Nathan interviews Daniel Fagella. He started a mixed martial arts gym when he was an undergrad and sold it after getting a UPenn graduate degree in cognitive science. He did turn his grad school thesis on skill development into an ecommerce business that grew for 4 years, reaching $4.2M in top line sales and recently sold it for a million dollars with 90% paid upfront. He’s now using his funds for in order to influence global AI policy for the better.

Famous Five:

  • Favorite Book? – Plutarch’s Lives
  • What CEO do you follow? – Last bio he read was Marcus Aurelius’
  • Favorite online tool? — Asana
  • How many hours of sleep do you get?— 6-7
  • If you could let your 20-year old self, know one thing, what would it be? – Daniel would tell himself that dealing with the existential human condition could be done by contributing to a much bigger world

Time Stamped Show Notes:

  • 01:20 – Nathan introduces Dan to the show
  • 02:08 – Dan was studying skill development and goal setting science in psychology for his undergrad
  • 02:17 – Schooling was expensive; Dan decided that he’d rather use himself as a skill development guinea pig than a pizza deliverer
  • 02:40 – Dan started teaching and making money at the back of a carpet store
    • 03:11 – Dan’s jiujitsu gym was the smallest business back then
    • 04:03 – Dan sold the gym after 3-4 years with $250K ARR
    • 04:14 – Dan was 25 when he sold the gym
    • 04:41 – The membership fee was $157
    • 05:07 – Dan sold it for over $100K with 10% upfront to his right-hand and friend
    • 05:45 – The business ran for over 2-3 years after that
    • 06:05 – Dan took $30K from the $113K
  • 06:36 – Dan was also making $20K a month selling martial arts instructional resources online
  • 07:09 – Dan was using Infusionsoft for his e-commerce business, Science of Skill
  • 07:56 – The e-commerce was doing around $200K top line
  • 08:42 – The biggest cost for Science of Skill was on merchant processing, customer acquisition, advertising and affiliates
  • 09:26 – Dan likes to spend half of his CLV (Customer Lifetime Value) on acquisition
  • 09:42 – The CLV for membership programs were around $100 and affiliates $50-60
  • 10:00 – One of the affiliates was Survival Frog of Byron
  • 10:23 – Byron drove Science of Skill into 6-figures
  • 10:44 – Dan was paying affiliates upfront
  • 11:15 – Byron of Survival Frog was on Episode 395
  • 11:44 – There are agencies who get onto their email list by paying
  • 13:02 – Finding the right people to advertise and won’t tag you as spam
  • 13:11 – Dan will find firearm sites in—go through the website owners and email them to find the right people to target
  • 14:11 – Dan sold Science of Skill in February 2017 for a little over a million dollars
  • 14:22 – Science of Skill was valued by the multiple of net
  • 15:11 – Science of Skill revenue in 2016
  • 16:27 – Dan’s ultimate goal
  • 16:31 – The buyers are a private group of 2 buyers in Ohio who previously ran SaaS businesses then sold them to the government
  • 17:05 – Science of Skill should be at Inc 500 for 2016
  • 17:13 – Dan sold Science of Skill because he believed he has better and bigger things to do in life
  • 17:25 – Dan’s core objective involves the global conversation of neuroscience and AI
  • 17:48 – TechEmergence focuses on the business applications of AI
  • 18:08 – TechEmergence is not making money, but will make money primarily through advertising
  • 19:09 – The goal now is to scale and make traction
  • 19:21 – Current cash burn
  • 20:05 – The Famous Five

3 Key Points:

  1. You can start your business literally anywhere.
  2. Focus on your goals and objectives, even if it means having to burn cash.
  3. The future will probably evolve around neuroscience and AI.

Resources Mentioned:

  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives