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Ep. 86 - Test Things Out Before Starting a Business with Selom Agbitor and Oliver Zak

Mad Rabbit was founded by two brothers with a passion for ink. The pair found an opportunity to create a superior natural healing balm to help improve the tattoo healing process and built a brand we felt artists and clients can vibe with. 

The main goal was to get rid of all unnatural and processed ingredients you'd find in a traditional moisturizer, and decided to return to the basics of simple, natural ingredients. 

Motivated by the challenge, they set out on a mission to create the best performing tattoo balm in the business. Mad Rabbit promotes individuality, adventure, and anything badass.

In This Conversation We Discuss: 

  • [00:00] Intro
  • [01:16] Where the idea of Mad Rabbit came from
  • [03:17] What is Mad Rabbit and what do they offer?
  • [04:03] How Selom and Oliver started Mad Rabbit
  • [07:48] Mad Rabbit’s initial marketing strategy
  • [08:40] Test out marketing strategies first
  • [09:12] Mad Rabbit’s 3 concepts for creatives
  • [10:00] Sponsor: Postscript postscript.io/install
  • [10:30] Knowing if you have a great product-market fit
  • [11:47] The duration of Mad Rabbit’s testing phase
  • [12:16] The amount you should spend on testing ads
  • [15:08] How Selom and Oliver learned their skills
  • [16:31] Determining if you have a good business partner
  • [18:44] Sponsor: Klaviyo klaviyo.com
  • [19:15] Ecommerce is really not that easy
  • [20:57] Sponsor: Gorgias gorgias.link/honest
  • [21:45] Don’t take courses from “online gurus”
  • [22:52] Stop overthinking and start your business
  • [24:11] How is Mad Rabbit doing in terms of growth
  • [26:15] Mad Rabbit’s email and SMS content
  • [27:39] Fostering a community and being a thought leader

Resources:

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 Transcript:

Oliver Zak  

Our strategy was to figure out if it sells before you you know start building a company around this

Chase Clymer  

Welcome to Honest Ecommerce, where we're dedicated to cutting through the BS and finding actionable advice for online store owners. 

I'm your host Chase Clymer, and I believe running an online business does not have to be complicated or a guessing game. 

If you're struggling with scaling your sales, Electric Eye is here to help. To apply to work with us visit electriceye.io/connect to learn more. Now let's get on with the show.

All right, everybody. Welcome back to another episode of Honest Ecommerce. Today, I'm coming to you with another founders' story, plural! 

Now I've got 2 founders on the podcast today. Today I'm welcoming to the show, the co-founders of Mad Rabbit, Selom and Oliver. Welcome to the show, gentlemen.

Selom Agbitor  

Thank you, Chase. 

Oliver Zak  

Thanks for having us. 

Chase Clymer  

Absolutely. So you guys are graduates of Miami University’s Farmer School of Business is that where you met? 

Selom Agbitor  

Correct. Yeah, we met there our second semester freshman year. So yeah, that's where we graduated. 

Chase Clymer  

And instead of going to parties, you guys founded an Ecom business.

Selom Agbitor  

Correct. Yeah... 

Oliver Zak  

Well, let's be clear. We founded it in our senior year. So we had a few fun years before.

Chase Clymer  

Awesome. So where did the idea come from? I'm very curious about this.

Oliver Zak  

Yeah. So it originally started... So throughout college, I was doing some side consulting for a few startup Ecommerce companies, one of them being an apothecary. So I was at their warehouse, looking at a bunch of ingredients, learning more about the space and cosmetics and things like that. 

But what I was consulting for it, I was in charge of expanding their product lines, and opening up new markets for them. One of the products I stumbled upon and the market that I stumbled upon was the tattoo market. 

They actually had a tattoo soap already formulated and they just weren't very interested in running with that market. It was contrary to their witch and Wiccan style, a brand that they currently had. 

And it just got me interested enough to start doing research in that market. We noticed it was definitely underserved. 

So I think a great story [as a] testament to that. If you ask anyone, what they treated their tattoo with after they get a tattoo, I bet you a lot of them would say you petroleum jelly or Aquaphor, which is fine. But they're not specifically formulated for tattoos. 

There are certain chemicals in it that are actually not good for the tattoo healing process. And we realize that there's a really great market opportunity for tattoo products that were specifically formulated to help people take care of them over the long term.

Chase Clymer  

You might be talking to probably one of the only podcast hosts in this whole ecosystem that knows more about tattoos than you, I guess. 

I worked at the shop for 5 years. I know all about the products. I know about all the nonsense that people use to take care of it for aftercare and I checked out your guys's product and I am a believer, I will say that. 

But yeah you can't be any more right. Aquaphor and petroleum jelly are probably not the best things to use. 

Selom Agbitor  

Right.

Chase Clymer  

So, I should have done this earlier, by the way. Explain Mad Rabbit and what your product is that you guys are offering.

Oliver Zak  

Totally. Yeah. So we currently are a one-product store. We started off with what we call our Mad Rabbit Original Tattoo Balm. So it's a mixture of 7 all-natural ingredients. Things like shea butter, cocoa butter... Two scents, which are frankincense and lavender, and a couple other more secret all-natural ingredients that also have specific benefits. 

So our goal is to make taking care of people's tattoos much easier to get people in the routine of it and to formulate products that are only all-natural, and just simple to use.

Chase Clymer  

Absolutely. So way back, when you guys met in college, and then you guys decided to launch this business together in your senior year, what made you guys decide to go into business together? 

I guess, what should people be looking for in a co-founder or a partner?

Selom Agbitor  

So I guess, when we met, it was our second semester of freshman year. I guess we clicked because we were both people who are hard working, and looking for ways to, I guess, move forward in life. 

And also, we weren't people who were complacent. We're always looking for the next thing to make ourselves better. Whereas, when people go to college to just focus on their majors, get a full-time job and graduate, we're looking for something else; something else for full time. And that's when we started looking into Ecommerce. 

So, actually our first business together was a woman's swimsuit company. So We would dropship women's swimsuits from China and that lasted for a few months. And we ended up selling that business for little profit. So it was a modest profit. 

So that's when we knew that we were okay. We were good, I guess, business partners. So after we sold that, we started experimenting with other niches and, I guess, Ecommerce industry. 

So we experimented with sleepwear, watches, handbags, and those weren't really the markets you wanted to focus on. 

And then Oliver came to me with the idea of the tattoo balm. So he had originally texted me sometime in like October - November timeframe, asked me if I wanted to start a tattoo company. 

And I had originally said no, because I didn't have tattoos. And I didn't know much about the industry. All I knew that... All I knew was that tattoos look cool. So like for that first week, I ignored him and said no, and then he kept pressing. 

So I was like, "Alright, I'll do some research.” [I’ve] done some research and I saw that there were other brands out there in the tattoo aftercare space, but they weren't doing a good job relating to their customers or putting out effective marketing materials to teach the customers about tattoo aftercare to draw them to the brands and the purchasing. 

We saw that as a weakness and that's something that I was like "Alright, let's jump on it." So then my next question was "Okay, what ingredients are you going to pick? How are you going to cook this? What are the logistics of this?" 

Well luckily, Oliver's mother had years of apothecary experience in her background. So she helped us pick our initial, first 7 ingredients which were shea butter, cocoa butter, beeswax, calendula, oil, sweet almond oil, lavender and frankincense. I think that's 7. 

So with those first 7, we would order them from local stores or sometimes if the local stores or it would take too long to ship to Oliver's college apartment, we would Amazon Prime them. 

Luckily, a lot of these ingredients are on Amazon. So we would order the ingredients, we'd order mailer bags, stickers and the tins, all from different websites. 

And then multiple times a week would skip class or like not go to social events, just to cook these balms. And we're cooking about 500 to 1000 units every single week. So it was a lot of work. So the first... 

So this was around January to, I guess, graduation time where we’re just like cooking, cooking, cooking. And then luckily, we got a $7,000 loan, in which we used to put in our first manufacturing order of 3000 units. 

So from that point on, we stopped cooking, which was nice. So the manufacturer would ship half the units at his house, half the units in my house, and we'd ship orders that way. But then we were still... lt was still a lot of work. And we wanted to automate it as much as possible. 

So we made it our goal that summer to find a distribution center, and we ended up finding one in Idaho, which [took] our fulfillment, and they've been fulfilling orders for us to date. But yeah, that's the background story of how I guess we launched a business.

Chase Clymer  

Awesome. So, I guess, I got a lot of questions for you guys. And I think these are going to be the same questions that all of our listeners are going to have. So first is what was the first initial marketing strategy that caught on, that helped you start to move these units?

Selom Agbitor  

Well, so the way we tested the proof of concept is we used Facebook advertising and we start off with traffic ads. So we'd make a bunch of different Instagram stories, Instagram feed, Facebook feed creatives, and just keep testing to see "Okay, which of these images draws people to the website for the cheapest amount of clicks?" 

So once we figured out "Okay, this picture is gonna draw people to the website." Then we figured out "Okay, are we gonna put a discount on the creative to make people want to purchase, or are we going to do a buy one, get one free, or no discount at all."

Oliver Zak  

Before you get any further than that. I just want to make sure that everyone listening knows that that's also a very important part of choosing the market you want to go into for Ecommerce. 

Testing these traffic ads and things like that on Facebook, and seeing how the product will sell, that's really an important step that we took, even before we really started handling things like production and things like that. 

Because our strategy was to figure out if it sells before you, start building a company around it. Carry on.

Selom Agbitor  

So yeah, those are the 3 concepts. It was discount code, buy one get one free, or no discount. So then obviously, we saw people love discounts so that has been going to the website. And also people love buy one, get one free. 

So obviously, those 2 end up working better than no discount at all. So we use the discount and buy one get one free as conversion ads to draw people to us who are more likely to purchase.

And then we still use the, I guess, creative with no sort of discount on it. Because we knew that if we had a pop up on the website, [it would still draw attention] but those people wouldn't purchase. But then they would put the email in the pop up. 

So then we use these to retarget so that way even if people don't end up purchasing from our ads, we would just send them an email later on and then they end up buying from us.

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Chase Clymer  

So you guys were testing this before you went all in on it. I guess, what were you looking for with those first rounds of tests? 

And seeing if you get cheap traffic on Facebook, which nowadays Facebook is pretty expensive. It's a very mature platform. And I guess putting all your eggs in that basket is a risky business maneuver. What were some of the signs you're looking for that you had a winning product and you had a good market that you were advertising to?

Selom Agbitor  

So the 3 metrics that I looked at to make sure like an ad was doing really well was, first, which one was bringing people to the website for the cheapest amount of clicks, which ads were bringing people to add to cart for the cheapest rate. 

And then ads that were bringing people to purchase for the cheapest rate. So all those metrics and also testing a variety of audiences. So testing different, I guess, sports, different teams, different tattoos, I guess, tattoo interests. 

So then we probably tested about 50 interests, and then we narrowed it down to about 10. Out of that 10 we use 5 of them --still today-- just to reach out to our customers and they've been doing really, really well for us. 

Chase Clymer  

Awesome. Can I ask how long were you guys doing this initial testing phase for? 

Selom Agbitor  

This testing phase was probably from November to December 2018. Because we officially launched in January 2019 to that testing phase was a couple of months and it was profitable. 

But we didn't want to go full scale. Because we obviously are a company that didn't start with any outside VC funding. So we had to make sure everything was 100% correct before we put all our eggs into one basket.

Chase Clymer  

Gotcha. And then is it... Would you be able to share with us what sort of investments you were making into testing the paid media

Or if maybe a different way to word that question would be, if you were to give someone a suggestion of what they should be budgeting to test, Facebook and Instagram ads over 2 months, just getting your feet wet and getting started, where you might set the minimum threshold at?

Oliver Zak  

Tell me if I'm right here, but I'm pretty sure that we can confidently say that you'll know if you have a winning or losing product within 2 weeks of testing. 

And then that's when you move on to the 2nd phase, which is increasing the kinds of ads that Selom was talking about. Finding out what performs best. So it's almost tiered. 

So I think when you first launch your initial ads, you're watching the analytics for about 2 weeks and you'll have a pretty good idea if you can make some profitable return on it. Selom, is that correct?

Selom Agbitor  

Yeah. Oliver is correct. Yeah, the first 2 weeks. So basically a couple hundred dollars but then also depends on how saturated your niche is. So if your niche is super saturated it's going to obviously take a lot of money but other than that, what Oliver said is correct.

Oliver Zak  

So Selom, think back to when we were in a competitive market, like women's swimsuits. Do you remember... Do you recall how much we spent?

Selom Agbitor  

So I know for tattoos, it was a couple hundred dollars before it started getting sales, but for the women's swimsuits, it was honestly the same because when Oliver and I get into a niche, we try to do as much research as possible just to make sure when we start spending money, it's been spent efficiently. 

So whenever you launch a company together, it's been around a couple hundred dollars before we start getting sales. But for the average person who's new to it, I would say it's about $500 to $1000.

Chase Clymer  

So you'd say spending $500 to $1000 on a proof of concept is a realistic budget to have in mind. So people that are out there testing the waters with $50 to $00 bucks are probably not going to get any data worthwhile.

Selom Agbitor  

No, probably not. Because you have to spend money to make money. And it also depends on how much time you spend into research. I guess people don't want to put too much effort into having a winning, I guess, ad set that brings in revenue. 

So the more research and time you put and the more patience you have before you spent those initial couple hundred dollars is really, really important towards your success in the future.

Oliver Zak  

So Selom, what kind of research are you referring to?

Selom Agbitor  

So I would say research into looking at what kind of ads the competitors are running, looking at what keywords they put into their ads. So looking on YouTube and Google. 

Like googling, "Okay, how do I want an ad? How do I segment audiences? How do I know which audience is right for me? What audience size is the best audience size to run an ad towards?" So questions like that.

Chase Clymer  

It sounds like you guys did a lot of the work yourself at the beginning. How much time do you think you invested in learning these skills yourself --I guess, maybe hours a week or a month or whatnot-- to be able to have the confidence to jump in and do this?

Oliver Zak  

Yeah. So I think a lot of that we can credit to all the free resources out there that are up on YouTube and in various Ecommerce, Facebook groups.

It's a shame there's actually quite a few self-proclaimed Ecommerce gurus who offer packages that really are just capitalizing on free information that's already out there. 

But we probably did, I don't know, I was probably in a Facebook group and reading articles and watching a couple hours of YouTube every day for about 2 to 3 weeks before I felt comfortable jumping in. 

Selom, would you agree? What was your time frame? You started a little before me.

Selom Agbitor  

Yeah. So it was basically, I guess, 1 to 2 weeks or research in the niche. And then also had a friend who is still, I guess, part of the team now. And I remember when I first got into Ecommerce, I would ask him questions every single day, every single hour, every second...

Chase Clymer  

(laughs)

Selom Agbitor  

...because [he was] in the field for much longer than I have. So he's kind of my Ecommerce mentor. And he's someone that I would say, like really, really helped me get, I guess, become more knowledgeable in Ecommerce. So we credit most of our --a lot of our success so far to him.

Oliver Zak  

Yeah. Another thing to note is that Selom and I haven't made the distinction on this podcast yet. So I'm more operationally focused. Selom is the one who's into the nitty gritty ads. He's the ad wizard, if you will. 

And that gets back to your question of  how do you know when you have a good partner? I know for a fact I don't have  the thinking and the learning style to learn ads. I know that's not my strong suit, and I know that's not where my time is best spent. 

And Selom, I would say that my skill set complements yours, because you know that is your strength. But so Selom, the research that he's doing is a lot different than the research that I'm doing. 

So for example, I am currently researching things to get our SPF cleared through the FDA

Whereas Selom is, always trying to get ad spend down and more efficient. So we are, you know, our learning is focused on two different things. So you kind of just need to find a partner that complements it. Well,

Chase Clymer  

I couldn't agree more. When we first started the agency, we were just tag teaming everything and it was so inefficient. And once we drew solid lines in the sand, it's like "These are my responsibilities and these are your responsibilities.", it changed the business overnight.

Selom Agbitor  

Yeah. That organization is really important. If you're not organized, it's gonna make everything really difficult for you.

Chase Clymer  

And it just... It's something that you don't realize until you actually look at it. If two people are responsible for one thing, each person is going to think the other person's doing it. 

So yeah, I mean, if you're looking to get a partner I can't agree anymore with. You want someone that's the Yin to your Yang, someone that can do the things that you aren't the best at. 

Someone that complements your strengths and weaknesses. Those are the best types of partners to work with. 

If you are starting a brand and both of the founders are amazing, you know, amazing theme developers, I don't know if that's going to be a very fruitful partnership because you're going to have so many of the same shortcomings and it might not be the best fit. 

So maybe a fair warning to some people out there. 

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Chase Clymer  

You mentioned Ecommerce gurus. And that is actually the... That was the thought process behind the name of the podcast, Honest Ecommerce.

I wanted to be honest with everybody about the hard work that goes into building a brand. So let's dive in a bit there and talk about it. 

There's a lot of scam artists out there. And if it was that easy to build a successful brand, why can't everybody do it? What are your thoughts on those, I say, the dark underbelly of the dropship and Ecommerce community?

Oliver Zak  

It's a good question. I do think that anybody with an internet connection can get into Ecommerce and run a successful brand. I do think that. Whether I think developing the brand from the ground up is everyone's strength? No. 

And that gets back to earlier that I was saying. You really need to know your strengths and weaknesses. I had... Luckily in high school, I got a small passion for graphic design and got an early introduction into Photoshop.

So that kind of just sparked some interest into things like design and good design and what it means to incorporate good design into a brand and incorporate that into my college minor, which is Interactive Media Studies

Focusing on things like digital marketing, graphic design, just really an intro to brand creation, I guess, which is a great program that I was very fortunate enough to choose. 

But yeah, it's really not as easy as people think, which I think is part of the reason why we chose black as our color palette.

Because when you start complicating all these decisions, you can get into a really, really messy web of a brand that doesn't have a whole lot of unity in its design.

Chase Clymer  

Absolutely.

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Chase Clymer  

Going back to the question with the whole "Buy my course and you can become an internet millionaire." If anyone listening is thinking about doing that, I would highly, highly suggest that you do not do it. 

Selom Agbitor  

Please don't do that. 

Chase Clymer  

Yeah, we're gonna save you thousands of dollars here. Almost all of that information, if not all of it, is available, like they said, for free in other places. And some of it is... 

Honestly some of it is the same stuff of a cheaper course, repackaged with another zero on the end. It's a very odd ecosystem. And I've been running the agency for over 5 years. 

I have helped brands make millions of dollars and I'm not exaggerating to make myself sound cool. I'm showing you I know what I'm talking about. 

And I personally haven't founded a brand that's successful, because finding that winning target audience, finding that winning product is so hard. That's the hardest part about all of this. 

The rest of it is easy to learn. So I'm just stressing that it takes a lot of work, and it takes a little bit of luck, honestly, I'd say.

Selom Agbitor  

Correct.

Oliver Zak  

I've had many friends who have seen the success that I have undergone and they've asked me to help them build a website and learn and start with dropshipping. 

That's a great place to start by the way, dropshipping. There are so many advantages to it. One of them being you don't need to worry about inventory, which I cannot understate enough, is a huge pain in the ass. 

But so dropshipping is great. So anyway, I'll help these friends build a store. Some of them will get to the point of purchasing a domain, most of them won't even do that.

Selom Agbitor  

(laughs)

Oliver Zak  

Really the first step is jumping in. There's too much thought before actually trying. There's people who reach out and ask for help. 

I would say maybe 5% of them end up running a Facebook ad. So how can you... How can you know? You'll never know if you don't actually start.

Selom Agbitor  

The 10 people I've helped, I guess, tried to launch your brand and only 1 or 2 of them actually like gone to the stage where they launch a Facebook ad because they don't understand it. They think it's gonna be a quick buck. Everything's gonna happen right away. 

But it takes a lot of time just to figure out the branding, what you want to name it, the website, figuring out customer service, how are you going to deal with that, and how you're going to communicate with your customers. 

And that's... Those are the things that people don't ever put time into. So once they get to that point and see all of that, they just give up, which is not the right way to go about it. 

Chase Clymer  

Absolutely. It's that zero to one. You just got to get started somewhere. And you're gonna make a bunch of mistakes, and you're gonna learn really fast. And you just got to correct the course, and steer the ship, and just keep going. 

Let's pivot back to what's going on at Mad Rabbit now. So you guys are now... You're a couple years in and you've been running this thing full time. What does growth look like? Did you guys set any records this year? How's it going now?

Oliver Zak  

Yeah. Well actually, we're... Neither of us are currently full-time which is (laughs) interesting. That is a likely next step for us here soon, especially as we are launching both a sunscreen and a soothing gel here soon. 

That's gonna be definitely taking up more of our time. But yeah, we've been absolutely crushing records. Selom, if you want to just walk them through our accolades, this year so far.

Selom Agbitor  

So our first year of 2019, we did just over $400K in revenue. And I guess our first 6-figure a month was in December. And I guess it was once we hit that first 6-figure a month, we're like, "Alright. We have to make sure we're still profitable, but then hit the 6-figure a month consistently. 

And then so far this year, we've done a million dollars alone just this year. And then this month is going to be our biggest month by far. 

So one thing that I guess we're just... We're still making sure that we're still running profitable ads. And if not making sure it's better, the efficiency is better than the last month. But those are the records we broke in so far.

Oliver Zak  

Yeah. And I think that's a testament to quite a few things. First being, we started off only on Facebook and Instagram ads. This year, we've expanded onto Pinterest. We've been investing thousands of dollars in awesome content. 

We have a great photographer, videographer and editor out in In Los Angeles. Shout out to Garin, who has been a godsend in terms of helping us find our brand vibe on Instagram. And then we've launched on TikTok as well, which has been definitely more experimental but is paying early returns for sure.

Chase Clymer  

You guys answered the next question I had. I was like, "Are you still..." Is all your eggs in one basket or have you now started diversifying after finding that winning channel? 

So now you're moving into a few different paid channels. What about owned media? Are you guys trying anything with SMS or email? How does that work?

Selom Agbitor  

Yeah, so our email list is currently sitting at over 100,000 people in email marketing. I try not to send an email once every single week. 

So it's the only Thursday or Friday when people get their paycheck so that way they can, I guess, [be more likely to] end up purchasing products. So we do a lot of email marketing, we do a lot of email retargeting. 

So basically emails [are] going to people who abandoned carts, people who have viewed the item, or people who visit the website. They get emails. We also send email to customers who purchased recently to go make a YouTube video for a reward. 

We have emails going to customers to leave a review on the website. And then we also do SMS. When people, I guess, abandon a cart, they get a text an hour later from an actual human being saying, “Hey, [I] saw that you forgot to complete your checkout. Here's a discount code, if you want to go finish buying your product." 

That has been working really well. So we've expanded the mediums that we use to reach our customers and bring in revenue, so that's good.

Chase Clymer  

That's awesome. Now, before we go, is there anything that I forgot to ask you guys that you think would be worthwhile to share with the audience?

Oliver Zak  

Yeah, I think there's one more key part of our winning formula here. And Selom touched on it at the end. And it's fostering a community of excited customers who want to share their story. And tattoos are a great example of that. 

People who have tattoos are just a lot more likely to want to talk about them because they want to show them off. They're cool. So what we've done through things such as marketing insert saying, "Hey, post us on your story with your balm and we'll feature you." 

That's an early way we started building our community, like Selom said. Then people talking about their tattoos on YouTube. We do tattoo tours on TikTok. Things like that, just really making people feel good about their tattoos is a huge core core part of our organic growth. 

And it's... We're also going along with trying to become the leading educator on tattoo care. So what we were talking about at the beginning of the podcasts where tattoo aftercare recommendations are currently really up to artists who have... I'm not knocking artists. 

We love them, of course. But they don't have medical backgrounds. They don't... They haven't put the research into formulations that we have. And we want to become the leading educator on how to best preserve the awesome art that they do. 

So really, the commitment to building that community is so important to organic growth

Chase Clymer  

That's awesome. Now if people are curious about the product, where should they go?

Oliver Zak  

Yeah. You can find us at madrabbittattoo.com. Our Instagram is @shopmadrabbit. And Selom, our Pinterest and TikTok are madrabbittattoo. 

Selom Agbitor  

Correct.

Chase Clymer  

Awesome. I can't thank you guys enough for coming on the show.

Oliver Zak  

Yeah, thank you so much for having us. This was a blast. 

Chase Clymer  

Absolutely.

I cannot thank our guests enough for coming on the show and sharing their journey and knowledge with us today. We've got a lot to think about and potentially add to our businesses. Links and more information will be available in the show notes as well. 

If anything in this podcast resonated with you and your business, feel free to reach out and learn more at electriceye.io/connect. Also, make sure you subscribe and leave an amazing review. Thank you!