Here’s why running an 8-figure social media marketing agency isn’t all that it’s cracked up to be.
Imagine raking in 8-figures a year with a digital service business that allowed you to travel the world, work from anywhere, and occasionally check in on your employees. Sounds like a dream, right? Or too good to be true. However, that’s not too far off from the type of company one entrepreneur-turned-witch built in just a few years, with no prior experience, funding, connections, nor credentials.
I happen to know this entrepreneur in a roundabout way: Years ago, I hired one of this founder’s clients (who turned out to be a ruthless scammer). After losing upwards of $30k and threatening legal action, the scammer broke down, confessed their deceit, and also offered me a behind-the-scenes glimpse into the operation that groomed them — and the founder behind it.
That 8-figure founder wasn’t a scammer herself, but she definitely built a business that rapidly grew out of her control, raking in big bucks in a short time and taking her from broke to deca-millionaire in her 30s. However, all that glitters isn’t gold: Let’s dive into the little-known downsides of building and running a global 8-figure digital service business to unravel why this founder traded in CEO-dom for witchcraft as a full-time job.
Today I was listening to a podcast from a 7-figure entrepreneur I know, and she said something revolutionary, yet obvious: If you’ve never dealt with a difficult customer, dispute, or refund request, you aren’t building or running a million-dollar company. From personal experience, I can attest to the fact that she’s right, though few of us want to embrace or admit it.
No matter how rare negative customer interactions or outcomes are — even if they make up just a fraction of a percent of your total sales — they can ruin hours, day, or weeks of your time. As an entrepreneur who’s been on the receiving end more than once, I know what it’s like to wish for a smaller operation, simply to avoid the few bad apples sprinkled among the exponentially growing bunch.
Yes, I’ve wished my company’s sales would slow to avoid the increasing possibility of a negative customer interaction. If that sounds ridiculous to you, it should, but apparently it’s exactly how this 8-figure founder felt, as well!
Even though she ran her business remotely from afar, with customers splaying out big deposits and retainers (5+ figures), she was bound to encounter a handful of special situations that couldn’t be pleased. As her growing sales figures were promoted publicly as proof of her company’s success, more dissatisfied customers began to go after her with mounting allegations, disputes, chargebacks, complaints, and threatened lawsuits. No amount of money could eliminate the headache that came with the increasing customer base.
As she watched clients risk and drain their life savings on the hopes of a successful outcome with her products and services, she started to feel icky, scammy, and inauthentic. Couple this with the fact that her own products and services began to wane drastically in effectiveness due to a platform outside her control, and you have a recipe for disaster. She wanted out, but she was too big to simply fade away and disappear.
How would you like a business that can run on auto-pilot, with evergreen ads and a sales team taking calls while you monitor from afar with a Margarita in hand? That’s exactly what this founder’s business allowed her to do: She built a company that operated both an outsourced service and a synergistic e-learning product, jumped on the social media advertising bandwagon early, and was off to the races, clearing her first $14M in no time.
In fact, her sales grew so quickly that clients flocked to her team, throwing tens of thousands of dollars at them to learn their secrets or hire their experts. Some of those clients who followed her formula were making 6-figure months before graduating from college, working a few hours a week, and outsourcing everything else. The company appeared like a money-printing machine, in which everything this founder or her clients touched turned to gold; and for some — for a time — it was.
Unfortunately, neither she nor her clients were prepared for the unexpected curveballs to come:
- The platform responsible for the vast majority of her sales quickly began turning its back on her and her industry with little to no warning
- As that platform threatened to edge her out, they compromised both the product and service side of her business, as well as her entire client list
- While she wanted to diversify her marketing to other channels, it would be inauthentic and ineffective, since her business offerings were specific to the very social platform kicking her — and her clients — off!
Despite building a business you love to massive success, a disproportionate reliance on one person, partner, strategy, or platform can result in a rug pull that leaves you scrambling to regain your footing. This CEO hated running a business at the whim of and with reliance upon an external platform outside her control, and she vowed never to do so again.
Making tens of millions of dollars sounds like the entrepreneurial dream, right? Sure — if that’s your salary or profit. Sadly, when you’re running a large global service business that relies on salespeople, service providers, technology, and marketing teams, the costs start piling up. This founder detested the large disparity between her company’s revenue and the money actually flowing into her own bank account. She despised the fact that the majority of her deca-millions wafted right back out the door to support her tech, team, and marketing.
Furthermore, she hated relying on paid marketing at all, regardless of the platform. Instead of viewing paid ads as the fuel to skyrocket her company’s sales, she viewed it as a pair of golden handcuffs trapping her into spending more and more. Those advertising handcuffs led her to believe that if she ever eased off the spending gas, her sales would dwindle or disappear and her business and years of dedication would fade into obscurity.
In a recent post on social media, explaining her transition from CEO to witch, this founder made a bold statement: She claimed that it’s nearly impossible to grow a business to 8-figures without significant ad spend, and for that reason alone, she aims to never build a business so large again. The irony lies in the fact that the service her company provided was an advertising agency, and her e-learning products provided the frameworks to enable newbies to follow in her footsteps on their journey to the admirable 8-figure mark.
Today, she’s building her witchcraft practice 100% organically, and she’s still on track to make 7-figures in year one, with a team of one, and not a dime spent handing over the reins of success to a faceless platform that can guiltlessly take her money and run with no repercussions.
When you think about building a business — especially a service or education-related business — there’s a consideration that may not cross your mind…but it should: How smart and discerning is your customer, and what are their expectations?
If you’re selling 5-figure products or services to MBA graduates-turned-business owners, you can assume they’re going to expect a healthy return on their investment. That’s the consequence of marketing to a more competent, knowledgeable audience with high expectations. Conversely, if you sell an intangible product for which the positive outcome or return can’t be measured in dollars, the value of the service could be priceless to the right buyer.
With offerings like life coaching, mindset improvement, relationship work, and witchcraft, the ideal buyer may be searching for something that doesn’t have a concrete or finite measure of “success”. That’s not to say the stakes are lower, but you may have a crowd that’s easier to please through positive interactions and a good client-service provider relationship. This founder was through with the ROI-obsessed clients who simply saw her as a means to unlocking their multi-million-dollar kingdoms. She wanted to ditch everything mathematical, data-based, and tangible, and by deeming that witchcraft was her true gift and calling, that’s just what she did.
Author: Rachel Greenberg