My guest today is Ran Segall who is the founder and CEO of Flux Academy Interview Video: https://youtu.be/1APN2MHdxnY In this episode, we discuss the following: - Ran Segall bio - How does a CEO level up - Benefits of working with a business coach - Benefits of joining Entrepreneurs Organization (EO) - Desire to copy high growth startup playbook as a bootstrapped founder - How to grow a bootstrapped business - Choosing not to raise venture capital - Hard things about creating an online course - Benefits of hiring a Chief Operating Officer - Designing compensation model for bootstrapped business - Collaborating with other creatives via revenue sharing model - Benefits of podcasting - Going solo vs hiring a team - Taking time off as a bootstrapped founder - How to get in touch with Ran Segall For show notes, guest bio, and more, please visit: www.designmba.show
Ran Segall is the founder and CEO of Flux Academy.
INTERVIEW VIDEO:
https://youtu.be/1APN2MHdxnY
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Namaste and welcome. I am Jayneil Dalal and you are listening to the design MBA which is a real-life MBA program for designers. You will learn how to launch a side hustle and level up your design careers from the interviews rock star designers.
Jayneil Dalal: Today's amazing guest is Ran Segall. He's one of the most famous designers out there that I don't even know why I’m doing his intro. I’d probably Google to say there's so many things about him. I personally use this tool that he created, Prospero, to actually do some freelance consulting and get some contract signed but he's also the person that has made it possible for so many folks to learn Webflow to become a freelancer, how to become a successful freelancer. And Ran is the CEO and founder of Flux Academy.
So, Ran, welcome to the show, man. It's such an honor to finally be chatting with you.
Ran Segall: What's up, man? Good to be here.
Jayneil: Dude, you have no idea … so many years ago when I was just starting my design journey, your videos and your vlogs were the ones I kind of was watching and I was “Oh my God! Hopefully, one day I get to meet him.” And now, it's many years later that wish has come true.
Ran: Thank you, dude. That really warms my heart to hear that you've been there from the start and it's really cool that you've used the tools and saw the whole journey or at least until where we are today.
Jayneil: So, you're now founder CEO of Flux Academy, right? So, you're kind of … you're a designer still but at the same time, you're also doing the role of the CEO, managing the business. And I’m kind of wondering, the first question that comes from my mind is kind of like where does someone you in this stage go to level up. I come to you if I want to level up my Webflow skills, I want to be a freelancer but then where do you go if you want to level up and be the best CEO that can drive the Flux Academy business forward?
Ran: Good question. I’m also asking myself this a lot. First of all, I try to read a lot. So, I read a lot of books. I do believe a lot of smart people went through almost every journey. And so, we can learn a lot from books. So, that's one thing. I personally also have been working with a business coach for the past actually three, four years and that's been super helpful for me. Recently, just …
Jayneil: How? How has it been helpful?
Ran: How's that been helpful? Actually, a lot of perspectives. Number one, it's a person that asks me tough questions and helps me to make less mistakes. And specifically, my problem, I think, a lot of designers and creators have that problem where we enjoy creating and we don't enjoy selling and we don't enjoy maintaining, we don't enjoy scaling. So, it's very natural for us to want to jump right ahead to create the next thing but that's not how you necessarily build a company. So, he helped me stay on track and do a lot of things which I find boring but they are necessary like putting the infrastructures in place. So, that's number one. Specifically, the person that I’m working with is also very sales and marketing oriented which is kind of … again, I am … I very much like to create things and give them away for free but that's not how you monetize. So, having somebody who's helping you to charge and do the selling which is something that you're averse of or afraid or don't enjoy. So, again, that's kind of complementary to what I specifically need. So, that's been very helpful.
Jayneil: How did you find him?
Ran: Super randomly.
Jayneil: How did that you need a business coach?
Ran: I had this … so, I’ve been asking myself the question like how do I grow, who do I learn from, who is … and also, I felt like … I don't know why but I felt I need somebody to kick my ass, I think, because I’ve been working alone. So, if you were working alone, nobody's going to tell you that you're wrong. So, I felt I need that. And then I tried … I tried one. It didn't work. I tried one locally here like … I’m based in Israel. So, I tried one here locally, somebody, by the way, super famous, working with the best people, got very hot recommendation, working with him for six months, super expensive. And it was very nice but it didn't really get me anywhere. And then this other person randomly via Instagram like I saw him in a story of somebody of some … randomly got to his stories, was really impressed by the stories, reached out to him. He's not based in Israel. So, that's been over Zoom. By the way, I shared an interview with him on my YouTube channel so you can see him. His name is Rob. So, that has been working very well. Recently … super recently two months ago, I’ve also joined an organization called EO which stands for Entrepreneurial Organization which is basically CEO founders, creators who get together and they create kind of forums. It's kind of what you would call a mastermind but it's very, very structured. So, they put you in a group with eight other business owners. You're all making kind of similar amounts of money. There's like a threshold. You can't join if you're not making a certain amount of money just to make sure that everyone there is around the same level. So, that's been pretty new to me but again, that's one of those things that I’m doing, to answer your question, how do I learn how to be a CEO or run a company or scale a company because I’m clueless. So, that's one of the things. And this thing, I got a recommendation from another kind of business owner friend. So, I’m just trying to make friends and create relationships with people who are in a similar situation because my most of my network is designers, people I went to school with and people who I … so, most of my network is designers who are either freelancers or working in companies right now but they're mostly not entrepreneurs because that's not … that wasn't my audience like my friends, my network, whatever. So, now, I’m trying to build this new network of business owners who I can chat with and learn from.
Jayneil: And you mentioned you're based in Israel which is one of the most popular tech hubs. And it's very easy to get caught up in that cycle where everyone in Israel is starting a startup. And you've got this product-market fit with Flux Academy. Sure, it's not a billion-dollar business but it's a unique business that's bringing in a lot of cash. So, how did you come to peace with it like “Hey, you know, I know everyone around me is doing this and I know it sounds sexy and cool to start your own company in Israel but I got to do this unsexy thing of just scaling or focusing more on Flux Academy.” Talk to me about that journey.
Ran: Dude, that's … actually, you've hit on a very tough point which is also one of the things that my coach has been hitting me on the head with. Because I live here … I live in Tel Aviv which, I think, after San Francisco and New York is the most startups per person and the most VC money. So, everybody around here is in startups. Everybody is raising millions of dollars. Everybody can pay crazy salaries for their teams. This is where I live. It's like … it's crazy. It's like … yeah, if you've seen the show Silicon Valley, it's crazy mentality and it's very hard and it was … because I live in that mentality and I have friends who are working there and who are founders of startups and stuff like that, I did, I think, for a lot of times want to create a tech product specifically that's … I think I was going through that phase with Prospero was like “I’m going to have a SaaS business” but I also wanted to do it bootstrap because I’ve seen how working with investors can sometimes lead you to not focus on actually the product and customers but just focus on scaling because you need to bring back a billion dollars. So, I was, and I still guess I am stuck in that place, so I’m fighting with this … I’m like working through it. It's funny just like the last few weeks, I’ve been doing kind of like this exercise of trying to create the vision of what I want the company to be in 10 years and I’m like painting this and then I’m telling myself “Am I thinking too small? Is this business too small? I need to think bigger” and this whole “You need to think bigger” is a mentality and it's all the advice that you hear in startup world, right? “Think bigger,” Do moon shots,” all of these kinds of things. And I read those books and I hear those people and I see them on Twitter and I see them down the street and across the hall … I work in kind of like this WeWork type of workspace where everybody around me, that's their mentality. So, it's tough to fight against it. Also, I do want to do something big and I do want to make a bunch of money. So, it's you know … but … yeah.
Jayneil: And it's challenging because when I look at from the outside, I see Flux Academy. And if I’m not mistaken, it's a now a multi-million-dollar business or a million-dollar business. And I try to put myself in your shoes and I’m like “What does growth look like? Is million dollars enough? Is maybe making it a couple more millions, is it like scaling it even more?” How do you even figure out what is the sweet spot where … is it like a lifestyle business? Is it more of like “Do I just want to grow it for the hell of it?”, kind of wonder how do you tackle those questions or is it just more like talking to yourself and figuring that out.
Ran: It's funny because we make more money now but ironically, I made more money when I was … now we're 12 in the team. I made more money when it was just me and we were making more money because everybody's talking about revenue, top line revenue and nobody talks about profit, right? So, people tend to forget about that. So, at the end of the day, revenue is … it's called vanity metric. It can mean you can make a bunch of money and lose more. So …
Jayneil: Revenue is vanity and profit is sanity.
Ran: Exactly.
Jayneil: I think that’s something like that I heard.
Ran: So, to me, there are two things. I mean, I want … number one, I have this vision of what I want to create which is kind of a modern-day online design school. And for that to happen, we need way more product, we need way more courses, we need to make our courses much better. So, there is a lot of work on the product front. And then, also, if I really want to achieve that vision, I can't do everything myself. I am not the best. I don't know all of these different topics. I’m not the expert on everything. So, I need to bring in other experts. And also, if I do everything, it's not a real business, right? It's a very leveraged job which is not a … it's not a bad thing and it's a way to make, as I said earlier, more money in the short term but you're locked, right? You can't stop because if you stop, the minute you stop, it stops. So, it's not a real business.
Jayneil: Correct.
Ran: And to build a real business, you need to bring in people and you need to have processes and you need to have management and you need to fire yourself from the business, which is great. You read it in all those books like Built To Sell or The E-Myth and it's “Ah, so …” sounds pretty funny. I mean, sounds easy but then it takes 10, 15 years to be able to do that to find the people, to train them, to build all then …
Jayneil: Oh my god!
Ran: And then … okay, so you bring in a person. What happens if he quits? So, now you have to bring people and people who know how to hire people and people who know how to train the people and then it becomes a beast. And then the company needs to grow all the time to keep feeding all of these beasts. So, if I want to do that, I mean, there's a lot of work to do. So, that's how I think about this. I think I can … if we're talking about money, I think I can be rich … if the businesses stays small, I can get rich and I think I can get rich if the business gets big. It's pretty much the same but the question is, I guess, number one, are you locked to the business and then when you leave the business, the business dies or what can you achieve as a one-person thing which is always more limited and you're always … you won't be able to create something truly great because you're very limited in what you can do. So, those are kind of the questions that I ask myself and I decided I want to go through the … I want to give it a try to build the bigger thing, the bigger company. And yet, for now, I also chose to do it bootstrap meaning I can say “Oh, I’m going all in. I’m going to win. Let's raise a bunch of money” and I can do this and I see people around me doing it but right now, I don't feel I want to do it. I might do it at some point but not if I can avoid it, I mean …
Jayneil: Oh my God! And you're talking about all these processes and … I mean, it's kind of like this thing where there's so much fun in creating something like “Oh, let me create a new product. Let me create this new template. Let me create this video” and it sounds fun. And when you talk about like “Oh, I got to have all these process in place. What if someone quits? I got to have someone take care of this part, tell them what to do,” it doesn't sound sexy.
Ran: I’ll tell you what I’m seeing because I see it all the time I’m talking to people. We're like “I’m going to create an online course.” I’m like “Great. What happens if you succeed? Do you want me to tell you what happens if you succeed? You're going to be stuck answering customer support tickets, producing invoices for the wrong address and some refunds and then answering questions and then having to market the shit out of it. So, you'll be doing campaigns, you'll be writing emails, you'll be setting up email automations, you'll be doing funnels, all these things. That's not why you signed up to do a course, right? You don't care about this. This is not exciting. That's going to be your life now.” So, it's like “Be careful what you wish for.”
Jayneil: Oh my God!
Ran: And that's if you succeed. And that's if you succeed, right? If you don't succeed, you just build it and nothing happens.
Jayneil: Yeah, that's also very sick. Do you ever wish that you had a co-founder or a partner in crime with this? I mean, I know you started the whole movement like Flux Academy and stuff but … like, for example, you're friends with MDS and a lot of these folks. Have you ever thought like “Oh, what if I had two three people that we just started out together with and then we kind of shared the burden together.”
Ran: So, first of all, before doing Flux Academy, I had another venture which was called The New School which then pivoted into Prospero. So, when I started that business, I had two partners, so, we were three partners in that. So, I had the experience of working with partners and it's amazing. It's super, super fun. If it's people that you get along with and you have a good split of responsibilities, that's amazing. I would love to have that. And I’m trying in a way to re-create that. So, I’ve hired now kind of like a COO to basically manage the business because I also realized I’m not a manager, I don't enjoy managing people. That's also one of those things. “Okay, I’ll hire people.” Oh, now you have to manage them. Now, they'll call you up and tell you “I’m sick” or “I want to raise” or “My computer broke down. What should I do?” So, I don't enjoy managing people. So, I brought in this person who is also a good friend of mine from the military service like tons of years ago. So, we're good friends. And I brought him on and I gave him equity to try to create a feeling of partnerships. Now, at this point because this is already a business that's making money and he's not there from the beginning, it's not … it can never be a 50-50 equal partners because this is not the situation anymore but he's still …
Jayneil: Correct.
Ran: I’m still trying to create to give him equity to feel like he's a partner and, yeah, create this feeling of partnership between us because, yeah, it's very hard to do it on your own.
Jayneil: And I’m kind of curious there. You bring in the COO, right? And then … right now, my understanding of this is it's still a bootstrap business meaning the main … there's no funding raised. So, pretty much it's kind of almost like a rev-share model like “Hey, if we're bringing this much money, whoever has the social equity, they get that.” So, it's almost like … unlike the startup where you say that like “Oh, I got 0.01% equity in Airbnb” or “I got this much percent equity in the startup” like 30% or 10% here is pretty much more like … equity here means how much of the rev-share you get. Would that be a fair way to say that?
Ran: Not exactly. So, there's two parts to the compensation. One is equity and equity is ownership in the company. So, you can say if the company has profits and the company decides to do dividend distribution, if he has X amount of shares, he's going to get X amounts of dividends but because I am the, let's say, chairman of the board, I can decide also to never do dividends and just give myself a bonus. I mean … So, it's not … so, because of that, there's two kind of structures to the compensation. One is equity which is ownership. If we ever sell the company or something or if we do dividends, he's getting his share but also, there is kind of a performance bonus compensation built into the contract which is if we get to X amount of revenue or X amount of profit, you're getting X amount out of that. So, it's both kind of rev-share and equity together. So, I think most startups just have the equity but don't have the rev-share. We have both.
Jayneil: That is insane.
Ran: Yeah.
Jayneil: Oh my God! Wow! And I also notice that you're trying to bring in more folks in like you're collaborating with Ben Eisen. And you said that you need more courses, more people to come and help out. And as designers and creatives, most of the designers are very … they like to explore new itches or new creative itches. So, you might find a creative, you're like “Oh my God! I want to partner with this creative” or “I want to bring them on board Flux Academy” but you also realistically know that having being a creative or being a creative that they don't want to be the employee model like they might just come and collaborate. So, how do you deal with that? Are you bringing them, doing some freelance together, joint venture and then they do their thing or is it you like would for them to be an employee with you?
Ran: I would love for them to be an employee of mine but that's not very … also, I’m not 100% sure I would love them to be an employee of mine because in my particular business, it's also good that they keep on working and they have practical expertise, relevant expertise as still working professionals. So, that's also good but in general, yeah, the best model is kind of a rev-share model where they can do this project and then they get to have like passive income, which is a term that I hate, but they actually don't have to do anything else, we are the ones who are promoting it and so forth, but to be honest, so far we haven't really done that. Right now, we're kicking off the first course in this model. Previously because I was making all the courses, right? But now we're going to start working with external creators on courses specifically. With Ben, we also had a … it's funny. With Ben, we also had like a rev-share model. The only thing is there was no revenue to share. So, it's like we both failed but, yeah, I think that's the only model that works.
Jayneil: And I can see that because see, you've put in so much effort in the early phases building this platform, the distribution platform, right? That's one of the things that … my opinion is that there's a lot of creatives out there that could make a really good course given guidance from you but what they don't or don't have, both, or don't want to do as well is build a distribution channel. And what you have …
Ran: And support …
Jayneil: … is that distribution channel, yes, yeah. And then you take a significant cut of it and then they come teach their thing and it's like a joint venture and I’m “Oh my God! This makes perfect sense.”
Ran: Yeah, by the way, this model is really not new. This has been going on, on the internet for like 15 … and in the publishing world, forever, right? Yeah. So, the model is not new but it makes sense.
Jayneil: I think … with the design MBA, I think my main thing was, I didn't want to go to Stanford Business School and I was like “You know what? I’m just going to start a podcast and connect with people and learn from them.” And my goal in life is to be a super connector and figure out how can I be of service to you. So, when I’m talking to you, I’m making mental notes like “Okay, these are the struggles and challenges Ran is facing. And what can I do to be of service there?” Maybe I can even move the needle in your goals even by a small amount like just small amount. To me, that's a success, in my books. I may not be able to move your needle by 50%, 20% but whatever I can do to help out. That's the way I look at these things. And then, just like you, I love reading books and then … but there's also this part you're 10, 20, 100 steps ahead of me. So, what I believe is that …
Ran: I don't think we're playing the same game, by the way.
Jayneil: Yes.
Ran: Maybe but maybe not, from what you're saying … I don't think we're necessarily playing the same game.
Jayneil: Correct. And my thing is more …
Ran: I mean, there is maybe that … I don't know, maybe you're counting by the game of, let's say, making money but even in that there are different subgames.
Jayneil: Correct. So, I look at it as like it's just data points. So, even if I never play the same game as you or if I were to play that game or some kind of similar game, the data points and the mental models I learned from our conversation today will never go to waste. So, that's … I mean, obviously, I have to do the real work in real-life experience but this is pretty much the way I look at life is more of like … you learn from doing but if there's other people who have done it before you in a similar way, not exactly the same path you want, it doesn't hurt to get some of their learnings.
Ran: Definitely. I’m a big believer.
Jayneil: I kind of wonder, at some point, you mentioned you want to play the big game and stuff. And then you're like “I just don't want to do this solo anymore” … because, I mean, you could have technically just kept going solo and stretch it as much as possible. Maybe you may not hit the top line revenue as much as you do now but you probably wouldn't have to deal with all this processes, hassles, managing people. Do you ever wish “What if I just went back to that?” or is it like you definitely wanted to make the bigger move and play the bigger odds, which is why you pivoted to “Let's hire a team of folks.” And I think you said you have 12 people now.
Ran: I am … sometimes … I don't think I ever wish to go back. Sometimes it's just scary because now the financial risk is bigger.
Jayneil: How?
Ran: Because when I was on my own, there was a lot of margin. So, the only difference between a good month and a bad month would be how much money would I make. Now, the difference between making money and losing a lot of money is very real. So, now, the mistakes are way more costly. So, sometimes that gets me stressed out but I don't … actually, I don't know. I don't miss the days where I was on my own. I really enjoy working with other people and with the people on my team, I’m really having a blast.
Jayneil: Also, on the plus side, I feel like, sure, when you're working alone, the margins are much higher but if you stop, the whole business stops, meeting you are the only person driving everything, doing growth, doing sales, growing customer support, growing teaching the courses but now, I feel like it's …
Ran: But to be super, super fair, right now, also I can't go anywhere. I mean … and I don't suspect I’ll be able to leave in at least three to five years. So, it's not like “Oh, I have a team. That's okay,” Actually, two years ago or three years ago, before COVID, I was like “I’m going to Thailand with my family. Let me just put the business on hold for three weeks and I’ll come back.” And it was okay. “So, I won't upload videos to YouTube for three weeks and I’ll come back.” Now, if I’m away for three weeks, I have all these people I’m paying to and if they have a question and they're not sure how to move forward, they're stuck and they can't move forward. So, it's like I’m wasting their time, I’m wasting the money. So, it's actually more … again, not necessarily stressful but in the process of trying to reduce stress from me or reduce the workload or responsibility from me, I’ve actually went through the phase … I’m in the phase right now where there is actually more responsibility on me but hopefully, we can get out of the other side.
Jayneil: But if you decide to go again to Thailand with you family, your kids are like “Daddy, let's go on vacation,” my assumption …
Ran: I’ve already decided I’m just not … yeah.
Jayneil: Wouldn’t the CEO answer all these questions when you're gone? I’m just assuming or maybe I’m not right in that assumption or there's still some things that you have to answer it and you can't just be pulled away that for three weeks.
Ran: No because he is a manager. He can take care of the people and that's his role. He can see that the projects move out on time but he is not the professional content creator. He can't say “Well, this video is good enough to go on our channel. This video is not good enough. This is … we should work on this project next.” So, that still requires my … I still fill in the role of creative director and maybe head of product or whatever, all of these different roles, and review the copy in the email marketing or all of these things where … yeah, I still have to do it for now.
Jayneil: How do you become free from that like even free from that part where you can just go to three weeks, not even touch your computer, and just enjoy with your family? It's not even a reality or maybe not at this moment as you're scaling up?
Ran: Yeah. And to be fair, I did take multiple one-week vacations. Even just last quarter I took two one-week vacations where I had zero like … few weeks ago I was one week on a boat without a laptop or anything or like … so, I can but it's just … it's just three weeks in a row is more problematic right now. One week …
Jayneil: Got it.
Ran: … every now and then is doable. And definitely in the future, definitely it's going to happen. It's just training of people.
Jayneil: How can creatives who've kind of started a course, had some success and they're thinking of scaling up and want your advice or want to get in touch with you maybe for collaboration, maybe getting advice, how can they best get in touch with you?
Ran: Everybody can send a DM on Instagram, hit me up on Twitter, email, yeah, whatever.
Jayneil: Awesome.
Ran: I would say though … I wanted to say, again, be careful what you wish for. I think if you've had some success with something … no, it's just maybe 100K, 200K per year is amazing and maybe you don't really need more than that. You really need to ask yourself that question. Maybe you do and that's fair. I’m not judging. I know I want more but I’m just saying you don't have to do it because the internet says or whatever …
Jayneil: Or because Ran is …
Ran: Scale is not always … exactly, yeah. And you're watching other people … I mean, you get to decide your own game like what game are you playing. So …
Jayneil: That is really deep. That is really deep. Ran, thank you so much, my friend, for coming on the show and sharing your wisdom.
Ran: Dude, it was a pleasure. I really enjoyed it.
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