This week's issue is a "guest post" from Profit Snack staff writer Jaka, who is launching his new project Asymmetry Craft:

Hi everyone, I'm Jaka. If you've been reading PS, you've seen my writing before. This is my new solo project. Enjoy!

If you don’t know Skool, it’s a company founded by Sam Ovens (aka “The Henry Ford of consulting”) that allows users to create and monetize online communities. 

What makes Skool so rich as a case study isn’t just that it’s the market leader in its space, but the unconventional (yet still highly methodical) manoeuvres that allowed the company to ascend as fast as it did.

After analyzing 1,000+ of Skool’s ads, combing through 18+ hours of video & interviews, and examining 85+ of their launch emails, I picked out the biggest and most important needle-movers that took Skool to 25 million users, a team of more than 240 people, and a platform valuation of $80 million after just 4 years of being open to the wider public (and without taking a single dollar from institutional venture capital).

You will learn:

And much more…

Let’s get into it:

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Sam Ovens founded Skool with the grand goal of helping 1 billion users find and monetize their passion through online communities.

Before starting Skool, Sam was actually already running a very successful e-learning platform called Consulting.com, selling high-ticket courses to aspiring consultants, which he scaled to $36M a year… from scratch!

(He shelled out somewhere between $300k and $1M for the domain name alone!)

Yet, he decided to throw all of that away in order to pursue a completely new venture.

At a glance, that seems crazy. 

In fact, when talking about this seemingly unreasonable early bet, Alex Hormozi, the wildly popular business guru who would later join the company as co-owner, says, “That’s where Sam just has these massive balls.”

To what extent that’s true, I’ll let you decide along the way.

But whether blind courage played a factor or not, there’s no denying that Sam had a very smart plan.

You see, Sam Ovens wasn’t just some off-the-grid hustler. In the late 2010s, he was regarded as the info product guru, and was dubbed “the Henry Ford of consulting” for making consulting, a profession normally available only to the elite, accessible to the masses.

In just about 4 years, his Consulting.com company scaled from 0 to mid 8-figures, experiencing fantastic growth… but this massive growth came at a cost.

Due to the company scaling so fast, Sam hired 45 people in a very short span, and added a lot of things to the business, like posting on all social channels, many different funnels, many traffic sources, and a bunch of people making up a bunch of teams.

It was a total mess. Operations were chaotic, profit margins were thin, and there were always fires to put out in the company. Sam had to work harder and harder to keep Consulting.com afloat until he eventually got tired of running this kind of hectic business and took a much-needed break to figure out how to restructure his company.

“It felt like I was selling my soul to the content creation machine in order to feed my company and just to pay my expenses… What’s the point if I don’t enjoy it?”

During the sabbatical, Sam decided to tackle the problems his company had by using the Lean Thinking philosophy — an operating approach that focuses on maximizing value while minimizing waste.

In his case, Sam defined “value” as things that 1) help his clients, 2) get him money, and 3) bring him joy (aka, are fun to do). On the other hand, he defined “waste” as simply everything that couldn’t be categorized as value.

“I looked at every part of Consulting.com and tried to define whether it is value or waste. Value is something that improves the customer’s experience — it is defined by the customer. Only a few people in my company were customer-facing. 80% of my company was doing something related to paid advertising! Then I analyzed the flows of money. Most of it went into ads. But are ads valuable to the customer? No. And I was like, oh shit, that’s pretty bad.”

So how did he reorganize things for maximum effect?

To start, Consulting.com didn’t generate client results as well as it could have because it was working with too many people. So they stopped working with beginners and focused only on existing business owners to optimize for client results and happiness.

“We dropped our Consulting Accelerator product, and I decided to just focus on existing business owners. We now help coaches, consultants, course creators, and experts achieve $100,000 a month in profit with only one to two products, two to three remote staff, happy clients, and happy founders.”

However, this new modus operandi demanded drastic changes.

Sam shrunk the team from 45 to 6. He eliminated almost all of their traffic sources (Instagram, Facebook, etc.).

They even stopped running ads, on which they used to spend between $30k and $40k every day.

“So I basically got rid of 80% of the company, cut paid advertising to 0, and had a small team of 4-5 people that were all touching the customer, and we found a way to get the customer organically just by running really good programs, getting people really good results, and sharing that as our content strategy.”

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After substantial cuts, the company now had only 2 offers, 1 funnel, and 2 traffic sources (YouTube and email newsletter).

The result? Despite revenue falling by more than 70%, Consulting.com was way more profitable. In one of the following months, they made $800,000, with $60,000 in expenses — the rest was pure profit.

So… happy days, right? 

Not exactly.

A company like Consulting.com (that sells courses and helps people on the internet) needs three core components to function:

1. A content portal, or an LMS (learning management system),

2. A community where students interact, comment, help, and meet each other,

3. Scheduled live Q&A calls for coaching, so students can show up and ask questions.

In Sam’s case, he was using Kajabi for LMS, Facebook Groups for community, and Zoom for Q&A calls. But trying to get all of these things to work together was super annoying because they were completely separate, different things.

The students had to log in to Kajabi to watch the course. They had to log into Facebook to hang out with other students (while trying not to get distracted by cat videos and other interruptions that pop up all the time on Facebook). And trying to get people from all over the world in different time zones coordinated for Q&A calls was also a problem.

If you think about it, this fragmentation is considered a “waste” through the lens of Lean Thinking. Sam had to come up with a solution to reshape it into “value”.

It was an issue that needed to be addressed, but there weren’t any tools that took care of this.

As Sam put it: “I'm experiencing this problem, and it kind of sucks. I can see the solution in my head. Screw it, I'm just going to build a company and solve my own problem”.

And solve his own problem he did. He built a platform that served as an LMS, a community, and a calendar with live Q&A calls all in one. He named it Skool and became his own client with Consulting.com.

“It basically takes these three major pieces: your course & content portal, your community, and your event schedule, and it puts them into one simple tool that your students can access with one login and one unified search.”

But as soon as Sam started Skool, a different problem popped up: his attention was simply split too much between the two companies.

Sam had to make a sacrifice.

And this is what you’ll see next:

Continue reading on Asymmetry Craft here. 

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