Serial entrepreneur Ray Blakney explains how the 2009 swine flu crisis forced him to adapt his business and how his experience can help us navigate the coronavirus pandemic.
Ray Blakney of Live Lingua
Do you ever dream about having the freedom to work whenever and wherever you want? Setting your own hours and being your own boss? Ray Blakney has done exactly that.
Ray Blakney is probably like every other award-winning Filipino-American entrepreneur who grew up in Turkey and lives in Mexico that you know.
He started his first business, with his wife as a business partner, in 2008. Since then he has bootstrapped multiple 6 and 7-figure online businesses. Most of this was done from home in his superman pyjamas.
He and his businesses have been featured in Forbes, Entrepreneur Magazine, The Boston Globe and other top publications. Ray has also been a speaker at multiple conferences around the world.
Some of his businesses include Live Lingua (one of the top online language schools), Twiducate (a social network for schools with over 200k registered users, and Podcast Hawk (a SAAS product that helps you get booked on podcasts on auto-pilot). He is also host of one of the top language learning podcasts on iTunes Learn Spanish with Live Lingua releasing a new episode daily.
When he is not perusing another wild business idea, he likes to spend time with his wife, son and dog at their house in Querétaro, Mexico and helping other entrepreneurs create location independent online businesses. He only leaves his house to speak at conferences and go to his dojo and to get hit over the head, repeatedly, with a bamboo sword (kendo).
What you’ll learn in this episode
- [01:18] Ray introduces himself and explains current projects.
- [06:16] What to do when you realise early in your career that you are on a path not suited to you, even if you’re in a well-paid comfortable job.
- [07:50] How to find out whether there’s an alternative for you to the 9-5 job.
- [09:20] How joining the US Peace Corps enabled Ray to learn about other cultures and make lives better.
- [10:08] How to get off the hamster wheel and why a worst-case scenario might not be that bad.
- [12:19] What the early stages of starting a business looked like for Ray.
- [15:50] Search engine optimisation (SEO) – what it is and how it helps people to find you.
- [19:38] How Mexican swine flu and a ban on foreign travel forced Ray to adapt his business.
- [21:10] How many entrepreneurs start their businesses by identifying a need which no-one else is addressing.
- [22:47] Why starting small and avoiding external investment can help you establish a sustainable business which meets your needs.
- [25:36] Why you shouldn’t limit yourself to your existing market or customers if you want to adapt to cope with the COVID-19 pandemic.
- [26:34] How to expand your offering and serve more people online.
- [28:40] The value of having diverse multiple sources of income.
- [32:00] How to start by identifying and researching a need for a business to satisfy.
- [41:50] How not to be intimidated by the success of others and define your own success.
Resources mentioned in this episode
Please note that some of these are affiliate links and we may get a small commission in the event that you make a purchase. This helps us to cover our expenses and is at no additional cost to you.
- US Peace Corps
- Facebook Ads
- The Tim Ferris Show
- Help A Reporter Out
- How Much Toilet Paper
- The Lean Startup, Eric Ries
- “If you are not embarrassed by the first version of your product, you’ve launched too late”, Reid Hoffman, founder of LinkedIn
- Episode 63: Why you need a coach – with David Frank Gomes of davidfrankgomes.com
To see the resources recommended by all our guests, visit the Resources page.
Episode 67: How to adapt during a global crisis - with Ray Blakney of Live Lingua
Jeremy Cline 0:00
2020 may have been the year which destroyed the business model either for the organisation for which you work, or for your own business. The public health crisis caused by the coronavirus has just meant that many businesses aren't able to operate in the way that they used to work before. So, what do you as employees of these businesses or business owners do? Well, in this interview, we talk to someone who's been through exactly this kind of thing before. I'm Jeremy Cline, and this is Change Work Life.
Jeremy Cline 0:41
Hello, and welcome to Change Work Life, the podcast that's all about beating the Sunday evening blues and enjoying Mondays again. So, what takes you from software engineering to working for virtually no pay to starting an online language school? That's what Ray Blakney has done. And he's my guest this week on the podcast. Ray, welcome to the show.
Ray Blakney 1:00
Jeremy, thanks for having me.
Jeremy Cline 1:01
It's an absolute pleasure. Why don't you start by telling us about what you've got going on at the moment, because I gather you've got one established business and one you're just starting?
Ray Blakney 1:09
That's actually right. I have two projects going right now, I'll brush on one of them really quickly, because it's just a fun side project, and then we'll go on to the main one that I'm spending most of my time on. The first one is, I am launching an e-commerce store selling smart toilets. Totally random. But I actually acquired a website called howmuchtoiletpaper.com, which was built by one of your countrymen in London. It was this young college kid, and he built this calculator for calculating how much toilet paper you needed to survive COVID, and it went viral. It's got thousands of links, it was mentioned on Daily Show, BBC, CNN, all the rest of it. And I was in acquaintance with the kid, and he built it, he's graduating, he got a job at a very good company, and he's like, I don't know what to do with this. I offered to pay him a little bit for it. So, I bought it, now we're throwing an e-commerce store up there to sell smart toilets from Japan. So, that's a small side project that I'm currently working on. Let's see if that actually works! But the main project I'm working on is a SaaS product. My background's software engineering, but this is the first SaaS product I've built in 12 years of being an entrepreneur, so it's kind of counterintuitive. It's called Podcast Hawk.
Jeremy Cline 2:10
SaaS, that's Software as a Service?
Ray Blakney 2:13
You're right. Being a computer geek, I use acronyms without thinking about them, so I apologise for that. And it's essentially a way for people to find podcasts to appear on, but on autopilot instead of having to do it manually. Because we've all been in this situation before. Now, Jeremy, you and I are in a community together online, that's how we connected - but not everybody has that privilege. So, if you're a personal brand, you're a business, you're something else, and you want to promote your book, for example, as an author, you want to get on podcasts. But right now, the way you do it is you essentially have to do a Google search, find their emails, email them, hope they're still making episodes, and that you're a good fit for their podcast. It's a tedious process. I had one of my assistants do it, and at the end of a week, we found 50 podcasts to reach out to. That was 40 hours' worth of work, and we got 50 podcasts out of that. It was very tedious. So, now I'm writing a SaaS product that, essentially, I have every podcast in iTunes, every episode in iTunes, and every review in iTunes in a database and all you have to do is essentially search. So you go in there and say, Hey, Jeremy, you have a law background, so you're like I want appear on law podcasts that have created an episode in the last 30 days, have at least 10 episodes, average review 4.7, and they talk about real estate law. Just as a niche, somewhere in their episodes. You hit Search, it finds them all for you, you save it, and it does automatic outreach to them for 25, 50 or 100 emails a day based on your plan. And hopefully it gets you booking on 1 to 3% of them. I've been testing it out, and I'm getting about 5 to 10% booking response. So, 100 emails, I'm getting on like five or 10 podcasts. That's the project I'm working on right now, it launches in January 2021.
Jeremy Cline 3:42
And the language school, that's still going on? That's your main thing, or is that on the side at the moment?
Ray Blakney 3:49
No, that's still there. I've been running multiple businesses now for quite a few years. So, the language school is the big one. I've been doing that now for 12 years, it's what started me on my online entrepreneurship path, and it's still by far the largest. We're the third largest online language school in the world, and we're the only one that was started without VC money. So, our two biggest competitors have a whole bunch of rich people behind them. Not to name any names or get political, but you know, somebody gave them a lot of money to build up their business, and it's a very different scenario than somebody starting off by themselves. They have $10 to $20 million, respectively, and we started for 69 US dollars and me and my wife - where I answered emails and my wife was the first teacher. So, very different story from our competitors. But I have a great team running that so I don't have to spend my whole week working on that business. I make sure everything's running well, but day-to-day operations I don't have to worry about anymore.
Jeremy Cline 4:34
Let's go back to the beginning and talk about how you got into software engineering in the first place. So, what was your route into that? Was this your first thing out of college?
Ray Blakney 4:43
Yeah. I'm gonna date myself, because back in my day when I started coding, I was 12 when I first got my first computer, and I was lucky - I was living in Istanbul, Turkey at the time - I went to the international school and they had computer programming in sixth grade. This was back in the early 1990s. I started computer programming then. I loved it. I would spend my lunch breaks, I was the typical nerdy Asian kid who was sitting at the computer and doing all the work. And I always wanted to be a software programmer, mainly because I liked computer games. So, I figured, 'I want to make computer games!' I later on found out that making computer games is not the same thing as playing them, it's a whole lot of math. It's a totally different animal. But I did like computer programming, so that's what I went to college and studied, computer engineering. I have a degree in computer engineering. And then when I graduated, I did what everybody's supposed to do, right? You're supposed to graduate from college, get a job at a big company and work there for the next 30 or 40 years until you retire and get your pension. So, I kind of was on that path. So, I graduated, I worked a little bit in Silicon Valley, did some consulting. We had the first tech bubble burst in, I think, 2002, 2003. I was consulting at a company at the time, they said, 'Hey, would you like to stay full time?' Which I did. It was a Fortune 100 company. Treated us very well. I can't really complain about my job in this - they always won the top 20 companies to work for in the United States, they were always in that list. They treated their employees very well. But it wasn't fulfilling. I mean, literally, at the end of the day, if I did my job well, they sold a product, which didn't really make lives that much better. They just sold more of that product, right? And I needed something more out of life. So I did that until I was about 26. And then I took the next step in my life.
Jeremy Cline 6:16
Twenty-six is quite young, I think, to decide that it's not for you when it's your first job out of college. What were people around you saying at the time? Were they saying, 'Come on, mate, give this a bit more time?' What was the reaction?
Ray Blakney 6:30
My parents were, 'Are you sure?' but they were supportive at the same time. They weren't trying to convince me against it. But I had a pretty good job, making almost six figures in the United States. As far as jobs went, it was pretty relaxing. I'd code from nine to five, I would write code to sell more products, I did CRM code, so customer support tickets, you know, and all that kind of stuff came through the software I helped build. And at five o'clock, I would leave the office and never even think about work. Like, 5:01, work was totally out of my head. It was just a thing I did to pay for the rest of my life. But we spend 50 hours a week in this job. And I didn't want to spend 40 or 50 hours a week for the rest of my life in a job that I turned off at five o'clock. And actually, it meant nothing to me, other than the pay cheque that it provided and the low stress that it gave me. So, I went through a quarter-life crisis. The actual story behind it is, at the time, there was a commercial on TV for the US Navy. Now, I have no intention of joining the military. I'll tell you, if you start shooting at me, I'm running the other way as fast as physically possible. My respects to the people who run towards the danger. But the quote there was, 'If they were to write a book about your life, would anybody want to read it?' And they have this cool image of Navy SEALs coming up on a beach and all the rest of it. And I remember thinking to myself that on the path I was currently on, the answer was absolutely no. Nobody would want to read about a computer programmer who went and sat in a cube from nine to five every day and wrote code. So, that commercial was the impetus for me to decide to change my life at 26 years old.
Jeremy Cline 7:50
And what made you think that aside from becoming a Navy SEAL running up the beach, there was an alternative? Because one train of thought is that, yeah, you do a job, you work your 40-50 hours a week until you retire. Hey, that's life, you try and find something that you don't hate. What convinced you that that wasn't necessarily the truth or the truth for you?
Ray Blakney 8:12
Nothing convinced me. It was hope. I hoped that wasn't the truth, and that was enough, because convincing is a little bit harder, right? I was stuck in the path that my parents did, my grandparents did and all the rest of it - where you go and work, you have a good job and you retire, hopefully with a good savings 401k in the United States or some kind of pension at 65 years old. At the time, I didn't even know there was a lifestyle called digital nomad or location independent lifestyle. I hadn't planned that. That's what I live right now. But I didn't even know that existed. I had no grand plan to escape. I'm just like, I need something different. Now, I joined something called the Peace Corps, which is this volunteer organisation in the United States. I knew about the Peace Corps my whole life, because my dad was a Peace Corps volunteer in the Philippines, where he met my mom. So, I kind of heard stories of this - it's a two-year commitment - most of my life. So, I knew it existed. My sister had done a similar programme in China. So, she lived in China for three years. And I was like, at the very least, I'm going to do this. I'm going to join the Peace Corps. If, after I'm done, I have to go and come back and get another programming job, so be it. I knew I could. I mean, even today, you can go out and get a programming job relatively easily. So, it wasn't as big a risk as some other things might have been.
Jeremy Cline 9:21
Why the Peace Corps? Was it just the familiarity of knowing other people who'd done it? Or was there something that made you think, you know what, this is something that's worth trying for two years?
Ray Blakney 9:29
The familiarity part was definitely part of it. But also their mission is essentially to go out and learn about another culture and help assist to make certain lives better. You generally work with impoverished people in the Peace Corps. So, you're not going out and working with millionaires or anything like that. You're put in poor parts of the country, Peace Corps is very active in Africa. You teach HIV education or even basic reading and writing to a lot of the communities there. I got sent to Latin America for mine, and it always resonated with me. Even in college, I'm like, that'd be kind of a neat thing to do, but I'm a computer engineer, technology gets out of date pretty quickly, so I better go and get a job, right? Because if I go out for two years without work experience, then I couldn't come back and get a job as quickly. And I just got to a point in my life where it was kind of a now-or-never, because you know, late 20s, 30s, maybe I'll start dating somebody, maybe get married, once you have a house, a mortgage, paying for kids' schools - these kind of things, while not impossible, become a lot harder to change. So, there's a lot of inertia going at that point, right? Where you're working every day on a hamster wheel to maintain the status quo, instead of trying to kind of make your life better on a day-to-day basis because you have a lot more to lose. When you're at that age, you have a lot less to lose. I mean, even at that point, worst-case scenario, I came back in two years, I got a computer programming job. After the Peace Corps, my wife and I started our online business. So, I met her in the Peace Corps, she was my Spanish teacher, we got married the last month of my service, and so by the time I got out, we launched our business, and we had the same mental thought: look, we're married, we have no kids yet. Worst-case scenario, we're lucky that we get along with our parents, we'll move back in with our parents for three months, I'm a computer engineer, you're a bilingual teacher - we'll get jobs, we'll be fine. That kind of calculation, if you can do that at any point in your life, where you can think about, this is the worst-case scenario that's gonna happen, it generally is not as bad as you think. So, that makes making the decision a lot easier. The worst-case scenario is you come back and do what you're doing right now. And if that's your worst-case scenario, take the risk.
Jeremy Cline 11:16
Just going back to the Peace Corps. What sort of stuff were you doing? You said you were in Latin America - what was your day-to-day activity whilst you were there?
Ray Blakney 11:24
Initially, when I went into the Peace Corps, I'm like, yeah, I'm gonna do something totally different. Honestly, I did computer programming! It was a kind of a surprise to me. I got stuck in - stuck is the wrong word, because actually they were two great years - but I got placed in southern Mexico in the state of Chiapas, the poorest state in Mexico, and I was working at a science centre. So, I helped them actually build up their IT systems. But they were doing investigation in an area called La Candona, which is the rainforest in southern Mexico, where they were helping - they had two primary areas of research, which were the indigenous communities. So, they were trying to maintain their languages, their culture. And the other side, they were doing investigations on the plants and wildlife that were in the forest, they just didn't have a very good database built up and way to access it, share the information with the rest of the world. So, I actually went in there and helped them work on that. So, I was kind of that bridge between their information and making it accessible on the internet. It's public domain, it's a government-run programme here in Mexico, so it's public domain information when the investigations are done.
Jeremy Cline 12:20
You're coming to the end of your time at the Peace Corps. You said you met your wife, and you discovered that you've got similar thoughts about the future. Can you talk a bit more about what you were thinking, what your next 'Well, let's give this a shot' step might be?
Ray Blakney 12:34
Like a lot of things in my life, I can't think of, Hey, we sat down and had this big business plan where we planned out the next five years - no, absolutely not. It was more, you jump off a cliff, and you hope for the best kind of thing. But again, we had that security net, the parachute, knowing that we can get a job later if we need to, right? We were talking, you know, we knew we were gonna get married, what are we going to do? One option was moving back to the United States and kind of getting back into that hamster wheel that we were before. But my wife is actually the one who always wanted to run a language school. She had been a Spanish teacher at private schools for her entire career. And she always thought, Hey, I can do better than that. But she didn't know the business, the kind of logistical side of things. When I was a programmer, I also became a team lead. So, I had a little bit of management experience. I had to do budgets, all the rest of it. I said, Hey, why don't we give it a shot? Now we had $2,000 in our bank account at the time, so I'm like, this shot's gonna be, you know, pretty bootstrap. We said, Yeah, why not? So, what she did was she moved back to the city where we were going to open our school a month before I finished the Peace Corps, found us a place to rent, very low-budget in the historic downtown. I think we paying $400 a month for the rent, but we couldn't afford our own place, so we would sleep on the floor of the classrooms on an inflatable mattress with a hole in it. So, when we arrived, we would sleep on a bed, in the morning, we'd wake up on the floor, because as the night went by it kind of slowly went down. And it worked. Luckily. I mean, within a few weeks of opening, we were fully booked, I had been teaching myself online marketing, kind of for the transition phase. We knew we were going to do this six months before I finished the Peace Corps. So, I built a website, I started doing online marketing, getting the name out there before we made the transition. So, it wasn't, Peace Corps ends, then we start working on it. It was working on it towards the end of the Peace Corps in my free time. And then when it was done, we already had kind of the bases in place in order to make the transition.
Jeremy Cline 14:11
Who was the school for? Who was your target market?
Ray Blakney 14:15
Foreigners. So, generally, the way that the school works was we were a language immersion school. So, what you would do is people would come from the United States and Europe primarily, though, we got a number of students from Asia as well. They would come, we would place them with a Mexican family that didn't speak any English or any other language. So, you would essentially be forced to speak Spanish, you would come and take three to six hours of class with us during the day, depending on how intensive you wanted it. We'd have activities at night, tours, all the rest of it. And that was it. I mean, that was the entire business model, was you'd be immersed in Spanish. And people could get pretty conversational within two or three months that way. You were forced to speak. At home, if you didn't know how to say 'Pass me the butter', you had no butter. I mean, you know, that's pretty much it. You couldn't say it in English. That's how it worked and it worked pretty well.
Jeremy Cline 14:55
And you mentioned where your students, I suppose, came from. What was their makeup, were they businesspeople relocating to Mexico, were there people who just really wanted to learn Spanish and that was the place to do it? Who were your clients? Where were they in life, if you like?
Ray Blakney 15:09
The answer is yes to all of it. But we generally had four different breakdowns. And we find that that hasn't changed with our current business, which is the online school, the kind of breakdown of the kind of students we get are the same. So, generally, we get people who are learning Spanish for mental stimulation, or learning a second language for mental stimulation, right, they just want to learn Spanish because they find it fun. That's one group. The second group is the professionals. So, they were learning it because they need it for their profession. The third group tend to be the retirees. So, these are people who are planning on retiring in Mexico or some Latin Spanish-speaking countries. So, they come and study with us so that they can make the most out of their retirement time. And the fourth group was generally college students who were studying Spanish and wanted to get up to the next level. So, that for their professional careers, they would have Spanish on their resume when they got out of college in order to get jobs.
Jeremy Cline 15:52
And how did you get in front of these people in the first place, if they're not there on the ground with you? I mean, it's gonna be a big commitment to not only decide to learn a language, but to decide to learn a language in a completely different country.
Ray Blakney 16:06
I learned something called SEO, search engine optimisation. This was back in 2008, so very few people even knew what that was. I guarantee to you, I was the only full-time SEO person in a language school in Mexico at the time. So, the way SEO works, it's about getting you to number one in Google's organic search results, or at least onto the first page, right? Because a lot of people still have the misconception that the first thing you find on Google is the best, right? If you look for 'best place buying tennis shoes' and the first place that comes up with tennis shoes, you're like, Wow, that must be the best place to buy tennis shoes. Absolute fallacy, it means they have a really good SEO on their team, which made them come up number one. It has absolutely nothing to do with our quality. And that's what I learned for starting our school. And I've built all my businesses on that model. Now, I do believe quality is what makes the businesses succeed in the long term, right? So, you can get people on your website - if you have awful quality and your reviews are bad, doesn't matter you're number one, nobody will come and sign up with you. But that's how we got in front of the audiences. So, if you looked for anything like 'learn Spanish in Mexico', 'Spanish school in Mexico', these are things that I know people search for, there are ways of figuring out what people search for every month, you'll get students. And we did. We ranked number one to number three the entire time we ran the school in the world for 'learn Spanish in Mexico', 'Spanish schools in Mexico'. Even though we ranked number one before we even launched. That's why we were fully booked by the time we opened our doors. Because people thought, Wow, that must be the best language school in Mexico. We hadn't even opened yet. And we were pretty close to fully booked.
Jeremy Cline 17:29
Where did you learn all this stuff about SEO? I mean, a lot of these things that I hear of, but I still kind of see as being quite a dark art and don't really understand it. So, back in 2008, where did you learn what it was and how you could use it to your advantage?
Ray Blakney 17:44
Honestly, I don't remember where I learned what it was. I mean, I've been trying to think, where did I learn what SEO was. I have no idea. But where I learned how to do it, I do remember. So, back in my days, there used to be these things called forums. All you kids might not actually remember what those are these days, with everything else, with the Google or the Facebook groups out there now. But there were forums for search engine optimisations. There were no courses, this was pre-Coursera, there was no Udemy where you can go and learn how to do SEO. Right now, you can. But back then, you would go on a forum and all these other people who are trying to beat Google, that's how we phrase it, rank highly in Google's, beating Google, because they keep changing the algorithm. So, you have to keep figuring out what they changed and rank at the top. They do not publish this. This is all private information to them. But we have thousands of people getting together on these forums and saying, 'Okay, I did this, this worked, I did this, this didn't work. I did this, this worked.' And you just went tried it every single day. Essentially, it was a constant AB test, where you put it in place, you waited a week or two to see if your rank went up or down. If not, you tried something else, you tried something else, and you did that day in and day out. SEO is free. It's what I recommend to a lot of people who are making the transition. You know, it's not paid ads, you don't have to pay for Facebook ads and all the rest of it. But it's also essentially the factory line work of online marketing. You know, it's like the guy at the factory who goes and takes the screw and he puts it into the same screw hole every single day. That's kind of what SEO feels like some days, because you're literally going out there and you're trying to get things to work. And it can become tedious, but it's effective. And if it does work, you're number one in Google and you get free traffic.
Jeremy Cline 19:10
So, you open your first school, it's fully booked. What's your reaction in the first, say, six months of that? I mean, are you kind of thinking, wow? Are you thinking, this is what we planned for? Are you thinking great, now we can open the second one? How's it go from there?
Ray Blakney 19:24
Like any arrogance of a 20-year-old, I'm like, wow, this whole business thing is easy. I don't know why everybody else has so much trouble with this, was our first thought. So, as you alluded to, we essentially expanded out to multiple schools and everything was going great until Mexican swine flu hit and that is what caused our online language school to be launched, because Mexican swine flu closed, if anybody remembers, this was back in 2008, early 2009. And it was supposed to be what COVID is now; they closed off Mexico, closed off the borders. Nobody could fly in and out of the country. And for a business who's based on foreigners flying into the country, that is awful. And we were less than a year into our business at that point. So, we didn't have a huge amount of savings. Like any new business, what do you do when you have profit? First thing you do is you reinvest into your business. I mean, we barely had furniture in our school when we launched. So, we needed to buy furniture, hire schools, write our own material, all the rest of it. It was then that my wife had the idea of launching an online school. She actually had the idea of contacting our former students to see if they wanted to take class via Skype. And I said, I'll throw up a website to see if that works. And luckily, within six months, well, within a month, swine flu ended, so nothing happened. So, the school was fully booked again 60 days later, but within six months our online school was making more money than our brick-and-mortar schools. It wasn't called Live Lingua back then, it was called spanish-lessonsonline.com. It was this ugly, ugly-looking website. But we were one of the first people in the world to offer this. And now, we have two successful businesses. So, I thought, really, this whole business thing is super easy. I really don't see why people struggle with this. Then I failed about a dozen businesses after that. You know, reality hit home.
Jeremy Cline 20:53
So, the online language school was really born out of what you perceived at the time to be necessity. I mean, you thought that that was it, the bricks and mortar language school, it was closed, you needed to leverage what you'd already got, but in a different way.
Ray Blakney 21:06
That's exactly it, and actually most of my most successful business ideas come from that. I like to say there are two kinds of entrepreneurs in the world. There are the visionary entrepreneurs, those, you know, Steve Jobs, Bill Gates, those who invent things we don't even know we need. I'm definitely not one of those, right? I mean, you know, I'm not going to invent something. Then there are those entrepreneurs who are out there, and they kind of see a need, and then see nobody's meeting that need and build a business around that. And the Skype language school was that, and a few of the other businesses that I built that were successful were built around that model as well. It's like, if you need something, see if somebody else is offering it, if they aren't, or if they're doing a bad job, hey, you know, that might be a business opportunity for you.
Jeremy Cline 21:42
So, at the time, were there other online language schools that you were competing with?
Ray Blakney 21:47
No, there were individual pages. There were two or three teachers who just had put up these really awful-looking pages, but they knew nothing about SEO either. So, we were able to kind of beat them pretty quickly. Within about a year, we had one competitor, a lot of our competitors have gone under. We're probably one of the oldest, continuous online language schools right now. There was one in place that got bought by Rosetta Stone that went bankrupt within 12 months. There was one company that was out there that was doing pretty well, and they're still around, but they kind of just disappeared, like, you can't even find them unless you look for them by their name anymore. I don't know what happened to them. So, we're finding that since we're such a small business, our operating expenses are pretty low, even Live Lingua today, we're eight people on our full-time team, nothing more. It's very different when you kind of go in with these big, again, all of our competitors went in with $10 and 20 million. So, they needed to make that money back, right? Investors want them to make at least $20 million back and then some, they're looking for 40X on their returns, right? And that's why I think they have to close, because they don't make, maybe the space doesn't have enough, the online language learning space will not make you $100 million a year, we don't need it to. I mean, it's just me and my wife's company, we don't need $100 million a year company. That way, we can kind of outlast a lot of these people, because as long as we're making enough for us to live, and we live in Mexico, so our cost of living is very low. We're a virtual company. So, we have no rent, we have no overhead, our entire staff is virtual. So, it does pretty well. And obviously with COVID, this year has actually been our best year ever, because everybody's now learning online. So, we're going for a record year this year.
Jeremy Cline 23:11
That actually links in very nicely to the question I wanted to ask you, because swine flu affected Mexico, but it didn't affect anywhere else. So, if people wanted this immersive Spanish language experience, why didn't they just do it elsewhere? Why did they decide, actually, no, we'll come to you guys albeit online rather than in situ?
Ray Blakney 23:32
Well, the students that we got the beginning, I don't think were necessarily looking to replace the immersion experience, right? We launched a separate website. So, we had our school's website, and we had an online language website. They were totally separate, even though they said we're related, right? The people we found, again, using the keyword research that I'd done, I found people at the time were looking for Skype Spanish lessons, or Spanish lessons online. These were not the same people who were necessarily looking to come to Mexico. Our first student base were our ex-students who came to Mexico, they knew our teachers, they knew our teaching methods. But we offered it to a much wider audience. Because coming to Mexico's financially not that feasible for a lot of people, right? There's plane tickets involved. While it's pretty affordable by US standards, you know, you have to pay to stay with a Mexican family who provides all the meals and then the classes with us, as opposed to taking a lesson online is $10 an hour. And you can do that from your home anywhere in the world. So, while we started with a cross section of students, the online students quickly separated off and became their own thing. We weren't quite as limited. We weren't trying to get people who wanted to go to Venezuela, people who wanted to go to Colombia. We were getting the people who went to Venezuela, Colombia, and Mexico, for three weeks, but then wanted to keep their Spanish going while they went home. Or they were learning in a community college in a group lesson, but they wanted more personalised attention, all of our class are one-on-one, and so they can study with us. So, professionals who wanted to be able to do it on their lunch break at work, they came and studied with us. So, they were very different demographics from the people who would fly and stay with us for a month, two months, three months.
Jeremy Cline 24:55
Okay, so it's interesting that when you sort of started this second business, it was, I was going to say out of desperation, but you know, in difficult circumstances.
Ray Blakney 25:04
It was, it was. Honestly, we thought, yeah, six months, we did not have six months of operating expenses. Three months at max. So, if swine flu had continued three months, we would have closed. If swine flu had been COVID, we would have closed, because it's been six months now and we couldn't have survived this long.
Jeremy Cline 25:16
But it's interesting that a lot of businesses in COVID have been trying to serve the same audience, just through a different means. So, you know, take a typical example, restaurants, they're now doing more takeouts and that sort of thing. Whereas in your example, you started something that was in the same ballpark, but actually had to reach an entirely different audience to who you had been targeting initially.
Ray Blakney 25:36
Exactly. Don't limit yourself to only your current audience, right? I mean, I'm guilty of it as well. But when we all heard about businesses when we were kids, it was a totally different world. Because I'm in that transition phase. I didn't have my first email until I was 16 or 17, right? So, I did not grow up with a computer and email since I was five, like my son's going to grow up. I mean, you know, he chews on - he's nine months old - but he chews on my cell phone now. And he's still trying to figure out how to get the password, but he'll know what email is his entire life. I did not have that. But I was still stuck in the old mindset mentality. Even when we launched the brick-and-mortar school, I was stuck in that, right? What is launching a business? Launching a business is getting a physical location where you put desks and you offer whatever it is you're offering, you either sell something, you have a service, you, whatever, right, from a physical location. And a lot of people are limited to that, physical location means you're servicing this area. And there are only a certain amount of people that can come in, all the rest of it. People are trying to make that transition online, but keeping the same mindset. How can I serve the people in my area, online? Restaurants, you know, it's delivering food. But if you kind of get out of that mindset, how can I serve, with my restaurant, how can I serve people all over the world? What do we offer at this restaurant that could be useful to people all over the world? Now, sending food? Maybe not, but you got professional chefs in the background. What about online cooking lessons where you bring them into your kitchen and you show them how to make all the dishes and you charge them for some online cooking lessons? Maybe you do live cooking lessons, right? Where every Tuesday and Thursday at seven o'clock we teach people how to make Thai food if you're a Thai restaurant, right? Everybody comes in, it's live, we send you the list of ingredients beforehand, you buy them and you're sitting at home and everybody's making it, you have any questions for the chef, we answer those questions for you live. I don't know if that'll work. But that's the shift in mentality that you need to have to survive these kind of things and move into the digital age. Don't just think, it's my same business, it just has a website now. That's not gonna work.
Jeremy Cline 27:20
You mentioned that you've started quite a number of businesses. The question I've got there is why, when you've got this successful online language school, why did you start to do other businesses as well? Was it that drew you out of just working full-time at the language school or realising that you didn't need to and spending time on the beach?
Ray Blakney 27:42
Question number one, spending time on the beach gets boring after five days, I have done that. So, you know, my five days of doing nothing is the most I can mentally handle and then I want to get back to work. Second answer is, I love what I do, creating businesses. This is my sport. I was that geeky little kid when I was growing up. I was not good at any sports. But I found that I really enjoy this. The process of bootstrapping businesses from zero to seven figures, to me, is fascinating. It's fun. I go to bed at night thinking about what I'm going to do. And I wake up the next morning thinking about other stuff that I can do. Not gonna say it's not stressful, there are ups and downs you have to worry about. The third reason and the one I think most people will relate to, I built Live Lingua twice, because when we built it the first time, remember that spanish-lessonsonline.com page, I was doing SEO and then Google decided to change their entire algorithm. And all my websites, we had 11 websites at the time, one for English, one for Spanish, one for French, etc. disappear from Google search. My traffic went from thousands every day to zero. So, I have lost a business overnight before. My goal right now that I'm working on is to have three seven-figure businesses. There's a reason why I stick to the low seven figures, because those are kind of less competitive niches. Suppose if you want to get to a $10 million, $20 million business, then you're getting into a whole new range. But 3 million-dollar businesses, and the idea then is if one of them goes under, I'm fine. If two of them goes under, I'm probably fine. That's why, it's a safety net. So, once I have three successful, let's say million-to-3-million-dollar businesses, I won't have to worry anymore about money. We weren't poor growing up, but we were the poorest people in a rich school. My parents were missionaries, but the church paid for me to go to a private school. So, all my friends were very wealthy, and my parents were fine. But you know, compared to that, so I've always had this kind of worry about money. I don't want to have to worry about it anymore.
Jeremy Cline 29:18
Just for the benefit of people who aren't familiar with when people talk about a seven-figure business or an eight-figure business, this usually refers to annual turnover, is that right?
Ray Blakney 29:27
Annual turnover, generally. I wish it was profit. But unfortunately, that's not the case. Now, keep in mind, online businesses have a much higher revenue. You know, the profit is much higher than most brick-and-mortar businesses are. For example, the SaaS product, the software as a service podcast software I mentioned the beginning. SaaS products generally have a 70 to 80% profit after paying stack. So, if you're making a million dollars a year, you're taking home $700,000 a year. Okay, taxes will take some of that, but you know, you're still taking home $700,000 a year. A service business, for example, if you are offering a service and it's not just you, for example, if you have a service business where you have staff and the way the businesses generally operate at that point is, if you're paying, I don't know, let's go into law, you're offering online law advice, you would still have to pay the lawyers. So, generally, the margin there is 20 to 30%. So, you know, if you're charging 100 pounds per hour is how much the lawyer charges, you would charge 120 in your online service, your $20 is your end, which, part of it goes into marketing and all the rest of it to bring in customers, and the lawyer makes 100. So, generally, 20 to 30 is in a service business, as long as you're not the service. If you're the service, you make a lot, but then the scalability is much lower. You only have 40 or 50 hours a week, and there's only so much you can work. I don't teach any language lessons, but we have hundreds of language teachers right now giving a lesson and we do the 20 to 30% of that work.
Jeremy Cline 30:40
So, when you have all of these different ideas for new businesses, and you've got this aim of setting up, say, three businesses, how do you choose which ones to pursue? And how do you avoid shiny object syndrome? And kind of thinking, Ooh, no, I'll try that one. Ooh, I'll do that one. Ooh, do that one.
Ray Blakney 30:56
As I mentioned, let's go to the shiny object syndrome part first, because that's an interesting story. And then I'll talk about what I do now, after having learned through my shiny object syndrome period, which was about two or three years. So, we launched the first two businesses, the language school and the online language school. And I remember, remember, I said, wow, this is easy, I don't see why people have trouble doing it. So, I spent the next two years launching new businesses every two months. And none of them worked, right? Luckily, both those businesses kind of stayed stable, my language schools that I had stayed stable. They didn't grow. They didn't grow at all, but they stayed stable in that time, that was luck on my part. But I had shiny object syndrome all over the place. Every three months, I was doing it. Then, Google did the algorithm change. And suddenly, that was some fire, right? You've got to focus in on something. So, I went back to the online language school and built it up. And then within three years, we got up to seven figures. So, that's what actually flipped the switch in my head that, look, focus is actually part of this, it's not just ideas and ideas and ideas. So, since then, you know, Live Lingua became stable and it's been pretty stable for the last few years now. My methodology is, I do the front-end research. And we've talked about this a little bit, right? So, generally, my business ideas come from needs. So, I need something for Live Lingua, honestly, even Podcast Hawk is because I wanted to get on podcasts to promote Live Lingua, and I found out there was no easy way to do that. And you pay attention to these ideas, you go through the process, find if anybody else is doing it, if not, you see if anybody else is looking for it, or if anybody else needs it, generally, that's keyword research, right? You go to Google and say, how many people are looking to get this every single month, and all three of those things check out. So, not that many people doing it or nobody doing it, people are looking for it, and I can provide the service, then I launch the business, generally launching the business's basic website, just to see if through the website, anybody bites, any interest at all. You could put it up as Beta, sign up for pre-launch, whatever you want. You don't actually have to build the business yet, you just have to kind of get it in front of the people. If you get at least a little bite, I stick to it for two years. To see if it actually is worth your time. If it's not after two years, I close it. But that's kind of my time limit, is 24 months. Generally speaking, since I bootstrap, it usually takes 6 to 12 months for a business to start making any money for me. If you have millions of dollars in the bank, you could probably have your business make money in a week, because you just throw a million dollars at Facebook ads. Arguably, if you have a few million dollars in the bank, what are you doing with Facebook ads and starting a business? You know, enjoy it a little bit. But that's generally the methodology that I use for my businesses. There are a few other ones, for example, I launched a chocolate factory in Asia. It was successful, it's still there. Ran it for about three or four years with a partner in the Philippines. But at around the three-year point, I realised it wasn't making enough money to make it worth my time. It was taking like 10 or 15 hours of my time every week, but the profit was great for Filipino standards, but not really great for US standards. So, I sold my shares to my partner. So, that was the thought process that I went through, you know, in order to make those decisions. I stuck with it at least two years, in this case, three years, and I sold it. It's not worth my time to spend in this business. If I didn't have a partner, I probably would have closed it down.
Jeremy Cline 33:46
The new venture - I can see the market for people who want to appear on podcasts because podcasts are growing rapidly. And there's already a few services out there, I know, because I've found a few of my guests that way which match potential guests and podcasters. You're doing something a bit different, this sort of automated approach. Where's the information come from, that sort of thing is what people are crying out for at the moment?
Ray Blakney 34:12
It's a cost calculation, actually. Because like you, I found those services which do the matching, right? So, matching services, if you work with people, they either have a network or they go in there and generally it's $1,000 to $5,000, depending on how high-level the podcasts are, in order to get you on to podcasts through one of these agencies. That is not financially feasible for a lot of people, including myself, right? Because who knows? I mean, if you're getting me on Tim Ferriss's show for $1,000, yeah, I'll definitely pay you that. But, unfortunately, that's not the case for a lot of these. And it's only scalable up to a point. The need and the idea of the need came up because, again, I needed it. I was like, I'm not gonna pay $3,000 to appear on five podcasts or 10 podcasts. I mean, that's just not... I do the math of the returns on my business and that would not make it worth my time. What is the amount that would make it worth my time, I went and did some basic calculations. And there are other services that do similar things in other spaces, right? I mean, you have this Help a Reporter Out, right? Which kind of does the whole matching a reporter, it's a much bigger business than podcasting. So, I decided like, hey, why don't I go and give this a shot? I've spent a weekend - being a computer programmer's useful - can this be done? So, I spent a weekend and I built this minimum viable product, and I'm like, yes, yes, it can be done. Within a weekend, I was, you know, I hadn't finished getting all the information in place yet. But I figured out it could be done. I did some searches online. How many people are trying to get on podcasts, there's nothing like this service out there. Nothing. As you said, there are only these podcast agencies and Facebook groups, if you're lucky, to get on podcasts. It's still a pretty tedious and manual process. I'm at a different place now than I was when I launched my other businesses. So, I didn't just stop at the Google searches, I kind of went out to my network. I speak at conferences about entrepreneurship. So, I have mailing lists, and I sent out, would anybody be interested in this? Huge, overwhelming yes. Overwhelming yes. Because we're talking prices here, if you pay for a year upfront, is $70 a month to get on four to five podcasts a month, compared to $1,000 to $3,000, to get on five podcasts. So, not only is my audience the individuals who are looking for a more cost-effective way of getting on podcasts, it actually might be the agencies too, who sign up for accounts in order to get their clients on podcasts using my service. Which is fine, that's totally okay with me. But pretty much, I'm taking a market that I know exists, right? Getting on podcasts. And I'm automating it. I'm the first person, I think, in the world that's automating this and making it much more cost-effective and accessible to everybody. And it should hopefully be useful on both ends, not only for the people trying to get on podcasts, but also podcasters, as well, because there's so many out there, 1.2 million of them. Some podcasters have a lot of trouble finding guests for their podcast. Hopefully, this service Podcast Hawk will help with that. It's not a spam service, because there's a limitation. You're paying for it. So, spammers are not gonna come in there and just start emailing everybody. My system would not allow it, I don't share anybody's email, you know, it's in our internally, and we send emails, but we don't share your emails with anybody else, the podcasters. And if you just spam, you're wasting your own money, because you're paying us for, you know, X number of outreach every month. And if you just say, reach out to every podcast on iTunes, first off, that would take a few years. Even at our highest plan, we send out 1,000 emails a month, 1 million by 1,000 emails a month, I don't know the math on my head, but you'll be paying us quite a bit of money in order to do that. Your response rate's gonna be awful, right? Because you'll be reaching out to podcasts that are entirely irrelevant to you. But if you use our service, right, it's good for the podcasters because they're only going to be getting pitches from people who are actually relevant to their podcast, and it's going to be good for the guests, because now it's much more cost-effective to get in front of the right audiences without having to go through these expensive agencies in order to get booked on podcasts or do hundreds of hours of manual work yourself finding podcasters, reaching out, making the connection,
Jeremy Cline 37:39
Live Lingua is one business, Podcast Hawk is another, what's the third business? Is that one that you've got going at the moment?
Ray Blakney 37:46
Well, hopefully the smart toilet papers. Yeah, howmuchtoiletpaper.com, we're hoping that'll... That one, I might actually decide to flip it, in the sense of, I can build it up at least to like a million in sales in two to three years, which, an e-commerce space is not huge, profit margins in e-commerce are considerably lower than a lot, I think it's around 10 to 15%. I'd probably sell it at that point, just as soon as you can sell it at about a three-to-five-year margin. So, you know, three to five years of income, you could sell it. And that would just be an influx of money. I don't know what business three is yet. I figure I'll keep working and keeping an eye out for opportunities and seeing what's out there and something will come up.
Jeremy Cline 38:16
And when, if at all, do you think you'll stop?
Ray Blakney 38:19
Whenever I die. I told you, this is fun. My long-term goal, my wife and I's long-term goal, actually, is to start a charity. Better yet, a social enterprise. Charity, we don't want to actually have to count on begging for money in order to maintain this organisation. But a social enterprise where we teach people how to build online businesses that make at least $500 a month. Doesn't sound like much to people living in a first world country like the UK or the United States, but my wife is Mexican, half my family's Filipino. Five hundred dollars is from poverty to middle upper class, a lot of parts of the world. So, there are all these online business niches out there where it's not worth it for most people in the first world even build that business, right? If I told anybody in the UK, hey, I'll give you a method that within 12 to 24 months, you can make $500 or 500 quid, even, a month, they'd be like, no, I'm not gonna work two years to do that. I can go and get a job at McDonald's and make more money than that, right? But in a lot of developing and third world countries, that is like saying, Hey, would you like to make $100,000 in 24 months? So, that's what the charity is going to be for, is teaching the skills and the knowledge in order to build these $500 a month online businesses and change lives.
Jeremy Cline 39:23
Fantastic. That sounds like an absolutely brilliant place to end. Ray, thank you so much for joining me. I ask all my guests, what resources, tools, books have helped you on your journey? And can you point other people to check them out, see if it might help them as well?
Ray Blakney 39:38
Sure. The resource I recommend to anybody, and we've alluded to SEO search engine optimisation a lot here, is a website called the Ahrefs, ahrfs.com. It's an SEO tool. It's like a Swiss Army Knife toolkit for anybody who wants to do online marketing. It's a little pricey. I believe the price right now is about $150 a month. I've been with them so long, I pay $49 a month because I've just been grandfathered in. I've been with them for almost 10 years. But they not only have courses to teach you, you were asking about how to learn it, they'll teach you a lot of the basics of SEO as part of your membership, but they'll teach you how to use their tools and how to get your website to rank number one on Google. A hundred fifty dollars a month is a lot cheaper than paying for Facebook and Google ads, trust me. So, learn that skill, that'll get your business up there. For businesses, the only book that I would really recommend is The Lean Startup. A lot of people get stuck with analysis paralysis with their businesses, but there's a quote out there by the founder of Twitter, whose name is Jack Dorsey, I think is his name. And it says, 'If you're not embarrassed by the first version of your product, you waited too long to launch it'. So, The Lean Startup, the book, kind of talks about that, just get something out there, see what people say, don't take the feedback personally, but if they hate it, learn from it, launch another version, another version. And that's the way to get your business up there and running. Podcast Hawk is gonna launch in January. I promise you, that's not going to be the final version of it, it's not gonna be like, wow, that's perfect. It's just to get it out there. Let's get people using it. And I want to see what people really want and what's useful to them. And we're gonna start working on that.
Jeremy Cline 40:58
And where's the best place that people can find you?
Ray Blakney 41:01
I really need to get better at this because I like to say I build businesses, I don't build a personal brand. So, it's not like, I don't have time to say something smart on Twitter every day. You know, like a lot of those, you know, they have some inspirational quote, I don't. You can go to livelingua.com, go to the Contact Us page and just send an email there, that'll get to me through the customer support. Podcast Hawk, those emails actually come straight to me, at least at the time of this recording, because it's a start-up. So, it's me and two programmers, and we're bootstrapping. You go to the Contact Us page, you will email me. Final thing is on Facebook, look for Ray Blakney on Facebook, you see a picture of somebody sword fighting, which is what I do for a hobby, that'll be me. So, add me, send me a message, and I'd be happy to answer your questions.
Jeremy Cline 41:37
Fantastic, I will put links to all of those on the show notes page. Ray, thank you so much for joining me. And yeah, I can't wait to see where these businesses go next.
Ray Blakney 41:45
Thanks, Jeremy. It was fun.
Jeremy Cline 41:47
Okay, hope you enjoyed that interview with Ray Blakney. There's a few things that I want to draw out from this interview. I think the first thing really to say is that Ray is a great example of the possible, and it's very easy for people who haven't experienced the sort of success which Ray already has to feel quite intimidated by what Ray has done. I mean, you know, he casually talks of seven-figure businesses, which, a lot of people, myself included, kind of look at that and think, no way. I mean, that's just, how am I even going to get there? And I guess there's two ways to think about that. One is that, as I mentioned, it's the art of what's possible. Someone has done this, which doesn't mean it's impossible for someone like you to do this as well, if it's right for you. And that's the second thing, is that success isn't measured by what other people have achieved. Success is a very personal thing, the definition of what success looks like for you is not necessarily going to be the same as what success looks like for someone like Ray or any number of other people. Yes, for some people success is a seven-figure software as a service business with a 70% profit margin, which is, frankly, raking in an awful lot of money. But that isn't necessarily going to be what you need in order to be successful in your life. The trick is defining what success looks like first, before working out how you can get there.
Jeremy Cline 43:12
The second point I wanted to mention is how even though it seems like, and indeed, we are living in unprecedented times, that doesn't mean that we are facing a unique event. Ray described how the swine flu crisis in Mexico pretty much completely obliterated his business. It put a massive hole in it. He was no longer able to get students to Mexico to study Spanish. What did he do? Well, he thought about it and he pivoted and he created an online language school. And if Ray can do that during the time of Mexican swine flu, well, that's exactly what people can do, or at least a variation of it, in the current coronavirus crisis. Kind of makes me think what David Gomes was saying a few weeks back about basically, there are no new problems.
Jeremy Cline 43:58
The final point I wanted to mention is an idea which I haven't really discussed on the podcast so far. And that's this idea of being location independent or being a digital nomad. So, the idea that you can do your work from literally wherever you are, as long as you've got an internet connection, you can do it from any country in the world, you can, in theory, do it from the beach. It's not a particularly new idea. People have been talking about this for probably 10 plus years. But again, it's probably something that's coming to the forefront as people realise that they can do most of their work remotely, they don't necessarily need to be in a physical place. If you can do the work remotely, who says that you have to be in the country in which you live now, why not move to a different country with a higher quality of life, lower cost of living and do exactly the same work there? It's a subject which I think definitely bears talking about in the future. And so if you've got any experiences, maybe you are a digital nomad, or it's something that you'd like to do, it's an appealing topic and you'd like to find out more, then drop me a line. If you go to changeworklife.com/contact, there's a contact form there. Let me know your thoughts, if this is a subject which would be interesting to you, or it's a subject which you'd like to talk to the audience about.
Jeremy Cline 45:10
Well, we've got the holiday season just around the corner. It's the end of a truly unbelievable year. Whatever 2021 brings, I want to be there to help in any way I can. So, if you've got particular struggles in your working life, particular pains or difficulties, whether brought about by the coronavirus crisis or otherwise, and they relate to your career or your working life, and you'd like me to cover them on the podcast, then drop me a line. You can use the same Contact Form I mentioned a moment ago, that's changeworklife.com/contact. Let me know what you'd like me to cover in 2021. Show notes for this episode are at changeworklife.com/67 for Episode 67. And we've got another great interview next week to round off 2020, so hit subscribe and I can't wait to see you then. Cheers. Bye
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