The online education space may seem saturated…the opportunity long past. Not so, says my guest Jonathan Cronstedt, President of Kajabi.
He maintains that thanks to two recent trends, there is a ready-to-buy audience in just about every niche.
A growing market, plus today’s technology, means it’s never been easier for anybody, from any background, to profit from what they know.
“JCron” also explains how to form a productive relationship between a company and a consultant.
Sometimes there can be friction when an outsider comes in. But he has strategies for collaboration that produces amazing outcomes.
You’ll also learn…
- Ways to leverage “hyper-individualism” to break into new markets
- The key differences between start-up and scale-up
- Why simple information isn’t enough when “selling” knowledge
- Tips for avoiding the paralysis of micro-management
- The answer to every entrepreneur’s hardest question
- And more
Listen to Steve Gordon and Jcron now…
Jonathan Cronstedt | Taking Advantage of the Knowledge Commerce Boom
We're talking with Jonathan Cronstedt. Jonathan or JCron to those who are close to him is, as he says, a dangerously dedicated executive strategist. When he's not driving outcomes for industry leading brands or launching products online, he's blessed to be married to his wife, Nicole, and enjoys a freezer full of fabulous vodka and a puppy named Stella. Jonathan has been working with the top digital marketing and SaaS companies. He's currently the President of Kajabi and they've got a fabulous platform for knowledge commerce for hosting courses and training and things like that. We're actually a customer. Jonathan, happy to have you here.
Thank you so much, Steve. Thank you for the incredibly warm intro. I would welcome comparing vodka notes. It's one of my favorite things. My wife, myself and our puppy that we treat like a child are hanging out here in Southern California.
I'm excited to talk a little bit about the things that you're doing, but before we dive into that, it'd be great if you could give everybody a little bit of context, a little bit of background for how you got to this point in your career.
It's been a couple of parts tenacity, a couple of parts divine intervention and some strokes of luck along the way. I graduated college here in Southern California with a degree in business that I fully intend on using at some point, but I found my way early on into the mortgage business. This was pre-2007, so the mortgage business was everywhere in Orange County. I started with a small company, working only in California.
By the time we were coming up on what would be the great recession, I ended up as the Vice President of Sales with 70 direct reports, 300,000 direct mail pieces a week, and was having an absolute ball until the wheels came off. That was my first inflection point in my career where it was like, “I am an executive, great company, great comp, everything's going my way. You could have buried me under that desk and I would've been happy, and all of a sudden everything changed.” The question was, “What do I do now?” That's what led me to this world of digital marketing.
I've been very fortunate that my path through digital marketing has been marked with some unbelievable mentors that I didn't even know enough to choose at the outset, but I happened to find my way to them and they guided my path through this reinvention as going from a mortgage and finance executive to moving into executive leadership in software as a service, digital education, and online marketing.
In my time in the online marketing world, I've had the pleasure of working with lots of amazing organizations, some of the company names that you may remember, Traffic Geyser Mike Koenigs, working with Mike, Glazer-Kennedy Insider's Circle, Bill Glazer and Dan Kennedy. I previously had experience in the direct sales world with a company called Empower Network at the time and then software as a service with Kajabi, and also time with Digital Marketer in Austin, Texas. Lots of varied executive career that touched on those different areas and it's been an absolute blast.
You've worked with the who's who of the internet marketing and direct marketing world. The interesting thing about your path is you may not have been the one founding those firms, but you've come in and played an important role. For a lot of the audience, oftentimes we get the founder and the CEO listening, and we find again and again that they get to a point where they can't grow the business anymore and they need that outside perspective and outside talent. Having come in and fulfill that role and helped drive a lot of growth in these companies, from your perspective, what is it and where's the inflection point where somebody needs to be thinking about, “I got to get some high-powered help in here so that we can add rocket fuel to what we've already got.”
It's interesting because for a lot of entrepreneurs, that is one of the hardest questions to answer in any organization because you have these diametrically opposed, very strong emotional poles. One side is “I birthed this. I'm excited about this,” and the idea of having anybody else in that vision or in that voice can be intimidating. On the other side, you will find that most entrepreneurs, some very early, some very late in the game, will begin to realize that their opportunities far exceed necessarily their core competencies that their desire to go out and take every new hill and innovate and create and that early stage energy that they miss oftentimes results in them not falling in love with the activities of scale. The meetings, the processes, the standard operating procedures, that for most successful entrepreneurs, most successful innovators could not be more mundane and boring.
Reid Hoffman did an amazing job encapsulating this where he talked about in technology, the difference between startup and scale, and the personality and proficiency that needs to be in scale as well as in startup. If you read the two of them side by side, they could not be more different. They couldn't be more opposite ends of the skill set spectrum. Normally what I found is (I you end up in this position where you learn the same lesson in life in increasingly painful fashions until it's learned. It might be that very first time where the entrepreneur loses a key hire because they're tasking them with 342 hats and they only could handle 341 and they're like, "This is crazy. I'm out.”
That might be the first moment where that entrepreneur says, “I need specialization, systems, org charts,” the stuff that they have no desire to build or it may be three, five, seven years down the line where the organization, based on the entrepreneur's ability to sell and ability to enroll others in the excitement of that vision, may have grown to a place where all of a sudden the complexity and the cacophony of the growth is so loud that they can't hear anything else.
It's like, “How did I get here? Where do I go from here? What do I do with this giant organization that now people want to be managed and mentored? What do I do?” It's definitely different stages, different timelines, but I would say it boils down to that realization that there are opportunities, as a Founder, I could capitalize on, that I am uniquely gifted to capitalize on, if I had somebody else to take care of the running of the thing.
Coming in that you have done repeatedly, that's got to take some skill. You're coming into somebody else's baby and taking over some of what they do and making decisions that they used to make, I imagine that that takes a special diplomacy to be able to pull off. How do you approach that?
From my experience, I find that there have been two different experiences that I've had coming into companies. You are either coming into a company that has a lot of amazing systems identified and growth levers identified and it's a process of pulling them more rapidly and essentially throwing gasoline on a fire and taking it to the next level in an organized fashion. The other side of it is you're coming into an organization that has tremendous potential, but maybe by virtue of not a real managed approach to growth, you've got a lot of cleanup to do, you've got a lot of reorganizing to do, you've got a lot of the, “What got us here is not going to get us to there,” and you're brought in as the guy that is like, “I've been arm and arm with these people or these processes for a long time. I need somebody to come in and help me get rid of some of the things that I might not be ready to get rid of or reinvent.”
The diplomacy side has always been number one, tremendous amount of empathy, being able to appreciate and understand the journey that that entrepreneur has been on as well as the empathy needed for the team that they have amassed. Depending on how hard driving that entrepreneur is, you may have a team that is desperate for a breath of fresh air because they've been going a million miles a minute with their hair on fire for so long, so empathy and understanding those circumstances is going to be a very significant portion of what allows you to build rapport and have the buy-in from an organization that will allow you to make cool things happen.
The other side of it is certainly being crystal clear on how we will judge what success means with whomever is bringing me into the equation. If I'm being brought into something, whether it's amazing and we need to scale it to amazing times three or I'm being brought into something that has tremendous potential, but right now it's a mess, how we judge what success looks like is crucial because you always have this critical moment in any relationship where you're being brought in as a high level executive where you will have to either disagree or ask for someone to trust you because you're doing things that are new, different, or outside of their realm of familiarity.
If you have success defined and you agree that that's where you're pointing to, there may come a time where it's like, “We both know where we're going. We both know the goal in getting there, but there're some things I'm going to need to do that as long as we agree on the outcome, you have to let me own the middle.” That part of it has been pretty significantly important because if you don't define success the right way, all of a sudden it becomes micro-managing crazy fest of how to get to the outcome which gums up the works and slows everything down.
In almost every case, I would think the reason you're being brought in is your particular skill set at being able to take the entrepreneur or the founder out of the micromanaging mess and be able to put some very important structure in place in this fast-growing entrepreneurial business. Having worked with an awful lot of business founders, most of them desperately resist any imposition of structure particularly on themselves because they want the freedom to go and create. One of the more challenging tasks in business, you're coming into this real inflection point in the growth of a company, lots of stuff going on, and the only reason you're there is because they've had enough success to warrant having somebody there and now you've got to rebuild the company to go to the next level. That can't be an easy thing to do.
The other thing that I would say from a qualitative perspective that has always served me well is I've always been a very pragmatic individual. My goal in any organization that I'm coming into is always to expand and amplify the founder and their vision. It's something that in any company, you'll find executives at times that have secret ambitions of “I want to be the front guy. I want to be the visionary. I want to be the founder.” That's something for me that I've always been fortunate that's never been a huge focus of mine. I've always been very happy to be driving the outcomes I'm driving, building the teams I'm building, but as it relates to being the guy on stage or the vision aspect, the name aspect, those are things that I've always felt are best served left to the founder and entrusted to them.
Also it helps tremendously being able to build rapport that if you're working with a founder that has a passion for stuff like that, they have a very real risk where you're coming into something and they're probably wondering, “Are you going to replace that role that I play?” Do they want you to replace that role? “Do you want to be the guy speaking? Do you want to be the guy selling? Do you want to be the guy writing books and on podcasts?” or “Is that something you would like me to do? You'd like me to assist with? You'd like me to replace?” That aspect of defining success, but also in my particular case, not having a desire for the stage and for the front man presence has also been very helpful in having the threat of a new person coming in and touching a machine that's running significantly reduced.
With anybody that you're working with to the extent that you can get clear on what success looks like, it's funny, I find that so many people in business, whether you're the business owner or you're an executive in a company, that we leave that step out and we tend to leave that step out r leave it a little bit gray because sometimes it's hard to get to that place. You've got to have some challenging conversations at times and get real with things, but when you do you, you've risked so much and makes it very difficult to go forward and operate authentically. Josh, thanks for sharing all that. I cannot wait to hear what you're working on. You have a ton going on. I'm excited to hear what you're excited about, what's happening, and what can you share with us?
Thanks for the opportunity, Steve. By all means, please call me JCron. Anybody listening, if they hear the name Jonathan Cronstedt, they definitely won't know who it is. Certainly something over at Kajabi, we've got some unbelievable things going on. I would even say the industry and the trend lines for the world that we operate in have never been more exciting. We've gotten very clear on who we are, what we do, and the term that we've wrapped around it is this idea of knowledge commerce, this idea of looking at the different ages that the world has gone through of the agricultural age, agrarian age, industrial age, information age, and what we're moving into is what we believe is the knowledge age.
The information age didn't deliver on the promises that we expected. We were all told that technology was going to solve all of our issues. The internet was going to make everything easy and accessible, but all it's done is give us more overwhelm, more disinformation, and more burden to look at more options that we always feel incapable of deciding between. We believe that knowledge commerce is the answer to that.
Kajabi is designed to equip someone who has knowledge to offer it to the rest of the world for profit or for whatever motives they have and be able to do it without all of the technology headaches. If you wanted to offer an online course or sell your information a decade ago, you would've had to have five to ten platforms cobbled together and a whole bunch of different things that put you in the place of being a technologist, not someone who had knowledge that wanted to offer it to the world.
What we've tried to do is continue to ask the question of how can we make technology easier and more accessible, but also equip entrepreneurs that may want to either not retire, but rewire and have a new business based on their life experience. Young people entering the workforce that would prefer to choose an entrepreneurial path rather than a cubicle position. Individuals that have an amazing business and would like to add another income stream by teaching others what they do and how they do it. Regardless of the category, we want to be the platform of choice that makes it easy for them to accomplish those goals.
What we're most excited about is if you look at the Intuit Insights 2020 report, the trend lines for 3 billion new consumers coming online between now and 2020, that have never had access to any of the things that we largely in the United States take for granted. It's an exciting time to be offering your knowledge online and connecting with the global audience much like what you're doing here, Steve, with the technology to have a podcast with global reach all from the comfort of your own home.
It seems like you can hardly throw a rock on the internet and not hit somebody who's selling their knowledge, their new online course. We've seen a proliferation of these offerings over the last probably three to five years. Do you feel like we're heading to a place where there's too much of it where it's saturated?
If you're looking at the course through the lens of a hammer is a hammer is a hammer, then definitely the view of saturation is going to be the one that looks most prominent. How many courses can we have on Google AdWords? The side that I would come from with that is the amount of individual consumers that are seeking connection, not simply information. The reality of it is there's more than enough information out there that is pre-available, but it doesn't come with the connection, the personality, and the ability to say, “I want to learn from that person,” which is always answered before, “I want to learn whatever they're teaching me.”
It's something where I think there may be too many AdWords courses out there from learning the act of putting ads on Google, but there is still more than enough room tomorrow to launch an AdWords course specifically for vegan chefs or specifically for CrossFit instructors or specifically for gothic music. There's always a specialization, there's always a uniqueness, there's always a personality that can be added that completely changes the addressable market.
We definitely also have the benefit of those three billion new consumers that I talked about coming online that have never purchased anything before. For us, we've already been down that road, but for them this is all new and all fresh. Even if you look at the paradox of choice, we live in a world where hyperindividualism is important. I don't want the same iPhone case that everybody else has. I don't want the same clothing. I don't want the same brands whereas in suburbia post World War II, you had three brands to choose from, if that, and all three of those brands were equally appropriate, whereas today you've got hundreds, thousands, millions, sometimes of choices and those choices become reflections of your individuality. It's something that we've only seen the beginning of how many versions of how many things to learn that are going to be brought to market.
You make a very important point around relationship. Before this online revolution where education has moved to the internet and you go back, 30 years or 50 years, to where the primary mode of education, at least at a higher level, was through universities. Those of us who were going to a university had our preferences based on whatever connection we may have had with that institution, whether it be with the brand or the image that we perceived or some other affiliation and that drove a lot of choices.
It may not be as new and different a decision as it feels like. To your point, there are lots of opportunities for people to get in and build relationship with a group of people and then offer them something. It's talked about a lot, but I have seen over the last year more and more people come out and write these epistles on why they think online education is dead and I'm grateful for your perspective on that.
There are a couple of other pieces to that. First of all, the easiest way to generate interest in any market is go and take whatever is the popular trend and say it's dead, direct mail is dead, television advertising is dead, radio is dead. All of these things that marketers use to gather attention when in reality, even still to this day, direct mail is a giant business and probably is the single largest aspect of charitable donations and political activism. For the medium that has been declared dead so many times, it's still the most effective and gigantic. Anytime anybody says to me, “This is dead,” I'm like, “Really?” Look five to ten years ago it was, “iTunes killed the music business,” but yet the most profitable music category last year, vinyl records.
It's in a book called Revenge of Analog, and talking about all of these businesses the digital had pronounced dead aren't dead and are actually doing quite well. In that case, the most expensive information you can get is bad information. It's one of those things than anytime you have anybody telling you something is dead, ask what that person's motivation is for telling you that it's dead. Go back to Karl Marx, see whom is to benefit from that information. But I also think it's born out of this paradigm of how we learn.
When you look at the ballooning student loan debt crisis that is no longer translating to predictable earnings, how are we going to educate people when they decide they don't want to go to college? How are we going to educate people when they are not plugging into the traditional systems that other generations have seen as the only way to do things? How are we going to equip this generation of entrepreneurs that maybe doesn't want to be location-specific in their career pursuits?
There are so many trend lines that indicate that this idea of learning what I want to learn when I want to learn it, how I want to learn it, and from whom I want to learn it, those trend lines to me are far more powerful. The idea of even saturation and what's on right now that people are looking at largely is a logical argument. Like, “There's already a course on that, so I'm not going to make another one.” The reality of it is we are not logical beings as much as we would love to assume we are. We are irrational. How we make decisions is far more emotionally motivated than it is logically motivated. If it weren't the case, there wouldn't be 800 brands of toothpaste; I made that number up, but I mean if all it was the logical need of “I need to clean my teeth,” there'd only be one toothpaste, but there isn't. There's a bazillion toothpastes because nobody buys toothpaste logically.
That lens can be applied to any industry and say we are absolutely always going to see people that know how to market, know how to meet the needs of that market, going to be successful regardless of how crowded the market is. Everyone said flip phones are dead, but yet Jitterbug launched a flip phone and it's doing massively well in an area where everyone said the smartphone was the only thing everyone would have. That’s my take on “Is it saturated? Is there opportunity?” on behalf of myself, our growing company and our growing user base. If you think it's dead, it leaves a lot more room for us to take advantage of it.
What are some of the innovative things you are seeing people do in online learning, particularly on your platform? What are some of the unique ways that they're using it to build a business and to reach out and impact an audience?
We're building much more impactful and immersive educational experiences than you get in a one‑size-fits-all academic institution. You could go to college for marketing and you're going to walk out of there. By the time you're done with college, everything you learned is likely outdated. Facebook's marketing algorithms change so quickly that it's even challenging to rebuild video courses on online advertising. I see our user base doing not only an amazing job of staying on the cutting edge of the areas that they're passionate about, the things they want to evangelize, the professions that they glean their knowledge from, but also I see them educating in a very different way. It's not “I'm going to expand this because the school year is nine months,” it's, “I can teach you this topic in three and a half hours with relevant exercises and I can skip all of the things that on my journey didn't serve me.” The effectiveness quotient of what you learn goes way up.
As technology and our development team who I'm very proud of has improved the immersiveness and the effectiveness of that approach goes up even further that now you can even watch video lessons at one and a half to two times the speed and be able to consume that information that much faster. You're able to build in assessments and quiz and interact with people along the way. You're able to answer comments below the video that are in context, so rather than having someone go through an entire course, you can answer questions in that moment based on that information and then have an entire community benefit from that question being asked and that question being answered in that context.
For example, if you were going through a college course on marketing, how beneficial would it be that before you went through the college semester, you got all of the questions and you got all of the answers all along the way so that you knew you were equipped to ask better questions? It's a wholesale reevaluation of how we learn and the technology making it more impactful in less time and equipping people to get back to doing what they want to do anyway.
We've come an awfully long way from the three-ring binder wrapped in cellophane that gets shipped to your door as being the way that we're educated outside of traditional institutions. We do some of that for our clients and I'm amazed at what can be accomplished now through these methods. It's useful both for the clients and it's certainly useful as a business owner. When we went to begin to offer some of the stuff, I was doing consulting and found myself having the same conversations with people again and again and again, and we started capturing that in video.
It turns out the clients liked that better because they could get it anytime they want, and so there's tremendous advantage to this approach. For an audience that haven't thought before about maybe packaging up their knowledge and offering it, give us a sense for what that looks like for a business owner who hasn't been down the road before. How difficult is it and what are some of the things they should think about?
We at Kajabi definitely come from the framework in this burgeoning knowledge commerce world that everybody knows something of value, whether it is your ability as an early stage entrepreneur to have a passion for something you want to learn, distill that knowledge down into something actionable that's specific and teach others. You may learn all the things to know about marketing online and distill that down into a small course for chiropractors on how to build a local presence within their market.
You also have that avatar of someone who might be mid stage in their career and thinking to themselves, “I've been a dentist for over a decade and a half and I see that my industry doesn't talk about how to naturally fight cavities and avoid drilling. I would like to educate other dentists on how to do that and build a secondary income stream in that regard.” The third Avatar is the person who's looking at retiring and either saying, “I would love to not retire and have my knowledge decay and essentially become useless” or “I'm retiring and I'm not capitalized to retire the way I would like to and I'd love to supplement my lifestyle.”
One of our guys, Dean Guccione, spent his life as an interviewer for firefighters. He basically did nothing but interview firefighters that were applying for all the firefighter stations in his district. He realized all of a sudden that all of these guys wanted to be firefighters, but none of them knew how to interview to be a firefighter and he is a guy who spent his lifetime interviewing firefighters, and so we put together a course for firefighters on, “Here's how to nail the interview.” Now he and his wife are retired. They take his motorcycle all over the US and he pops into hotels to check his email, make sure the course is online, do the live Q&A.
I would say regardless of what area you're in, you can package knowledge you would like to have, you can package knowledge that you've developed, or you can package knowledge that you've amassed and offer that to the marketplace. The biggest suggestion I could offer is definitely don't complicate it. This is certainly an industry where there are so many great topics that could be and should be covered that never get covered because people are still waiting for dropping 20 pounds to look good on camera or getting the lighting right or being worried about the sound quality or wondering if they're going to be judged or if all of their friends are going to laugh at them.
People literally think that the moment you put something on the internet, the entire globe is instantly aware of it, paying rapt attention and they're going to make fun of every flaw you have when in reality, it couldn't be further from the truth. People want the same thing, they want authenticity, they want connection, and they want impact for the goals that they have. If you can provide those three things regardless of the topic, whether it be passion, profession, proficiency, whatever you want to teach, there's an audience out there that is waiting for you specifically with your experience to teach it to them. Maybe it's personal training from someone who at one time was out of shape rather than walking into a gym and meeting someone that looks like they've never been out of shape and can't relate to what it's like to being out of shape.
There're innumerable examples. We even have things, Steve, as crazy as horse ballet called dressage. It's when you teach horses to trot in different ways. We have people teaching courses like that on Kajabi, literally horse ballet. I can't think of something that more people would be like “Nobody wants to know what I know,” and it's like, “Horse ballet.” It's a successful horse. I would say you're only limited by your creativity and your willingness to work and you're only limited by your ability to get going because we are living in an age where the technology barriers have all been removed.
You have done a good job of that. I can say that as a customer having used for the last couple years. JCron, I'm so grateful that you've been on. You got a great story to tell, very unique story. What's the best place for people to go and find more about you and more about Kajabi?
Thank you so much. They can hit me up on Facebook. Twitter is @TheJCron or anywhere they find me they can reach me. Being the dutiful executive, I'm far more plugged in and work far more often than I should. I'm one of those quality of life guys that try to optimize processes so that I can work more with the time I create. I would love to connect with anybody. Steve, I appreciate you having me on the show. It's such a unique split of getting the inside game of how you got here, what has served you, and then also talking about the general business, what's working now, and what's out there in the marketplace. I've had an absolute blast.
Thanks so much for being here. I look forward to connecting again soon.
Take care, Steve.