Business Tips from Phase One Ventures' Founder

Founder of Phase One Ventures, Jonathan Diaz, shares his top business tips.

Have you ever wondered what goes on in the head of a business owner? Well we picked the brain of Phase One Ventures' founder, Jonathan Diaz, to find out.

When others see your success, often they try to dwindle it down to a matter of luck. What those people miss is all of the twists and turns of the entrepreneurial journey.

With a staggering 90% of businesses failing each year, it takes a certain type of person and mentality to make a lasting impact. 

Learn "How you Can Avoid These Mistakes of Failed Businesses" by checking out this blog.

Diaz is the owner of a successful business that is currently valued at millions. As he reflects on his entrepreneurial journey, he shares professional advice and business tips to help others along the same path.

To read more from Diaz’s perspective, refer to this blog “From One Business Owner to Another: Why You Should be Using SaaS.”

Learn about the many successes and failures that come with starting a new business and read till the end where Diaz shares his gold nugget for fellow business owners and entrepreneurs.

From the Ground Up

Let's take it back to the good ol' days. Last semester of college, all is going well for young Diaz, a mechanical engineering student.

Then out of nowhere he drops out.

Instead of succumbing to the pressure of family, friends, and professors, Diaz pivots his life's plan to focus on his own small business.

Business Tip #1

Jonathan Diaz's first business tip

It's during this time in his life that he realized formal education is not the end all be all. There is a vast array of available resources on the Internet. In a successful business, what matters more is performance over education. When Diaz hires, he does not look at degrees or titles rather he focuses on the skill set of each employee. 

Diaz says, "It's not like I was just born knowing all of this. I know everything I know now because I failed so many times at a lot of things. Every time I broke something or failed at it, I learned not to repeat that".

The Break-it Mentality serves successful entrepreneurs better because it challenges them to embrace failure rather than avoid it. Lessons learned from books do not impact you in the same way a lesson learned from experience can.

We asked him every employer's favorite question, that is we asked him about a time where he failed…

He recounts, "In college, I tried starting a drop shipping store called,, where I sold vintage clothes and decor. At the time, I didn’t have much money so it was hard for me to invest in ads to scale the company. Instead I did organic posts and got leads that way.

At the time, I thought I was on top of the world because I was making $300-$400 each week organically. Unfortunately, I overlooked the value of ads at that time and didn’t reinvest that money back into the small business to start scaling it. I mistakenly thought it would just grow organically.”

Business Tip #2

Jonathan Diaz'ssecond business tip

He continues speaking, “When the drop shipping business model became popular, competitors with more money replicated the model and were able to spend money on ads. They completely overtook my whole market and choked out my business. That was my first failure. 

Thanks to this lesson, we now spend $500+ each day on ads at Phase One Ventures."

Keep reading to learn how this business tip affects even his personal life and his paycheck.

Trials & Tribulations

We asked Diaz about his other businesses from the past years.

He responds, "One of them was a supplement company called Greek Supplements. Each supplement had a Greek god name attached to it. For example, “helios” was the name of the pre-workout. 

The concept was unique, but I realize now that the branding could have been significantly better. Although the actual product(s) were superior in quality and taste, the branding failed to stop someone from scrolling on social media and ultimately from purchasing it.”

Business Tip #3

Jonathan Diaz's third business tip

Diaz continues sharing his third business tip saying, “That's when I learned about the importance of branding and establishing a marketing plan. You might have the best product on the market, but if your branding and marketing efforts aren't a show-stopper, you're leaving a lot of money on the table.

Sadly, I ended up being my own customer in that company. I'm the only one that ever tasted the products. Again great quality, but it lacked branding.

That's why I focus so heavily on branding now; it's a huge part of any successful business."

Other businesses Diaz has owned include Glossy Smiles, Rocket Dyno, JDiaz, and Phase One Ventures.

Business Tip #4

Jonathan Diaz's fourth business tip

An important business tip that Diaz learned came from Rocket Dyno.

He recalls, "In this company, we gave each customer a team of marketers for the price of one employee. This team included a full-time appointment setter, marketer, graphic designer, copywriter, and project manager. Bear in mind this team was outsourced so our business expenses were minimal.

Besides the appointment-setter, the other team members didn’t work full-time on each project, so I could comfortably allocate four or five customers to them. My overhead per customer was $1,200 when I was charging $4,000, so it was profitable. I realized though that it was an unsustainable business model since it was labor-intensive and heavily relied on employee operations.

My problem was that there was no structure. Once we scaled to $20,000 a month, about 4 or 5 clients, it became a nightmare. I had to manage it all myself to ensure everything was operating properly.

I ended up hiring a VA manager, but I hired them too late. The customer experience was poor and frustrating because it lacked attention to detail. That's when I learned that having managers in place and giving the employees someone to report to directly adds accountability. If our employees slack or fall behind, then it's very apparent. I learned the importance of organizational structure from this.”

Business Tip #5

Jonathan Diaz's fifth business tip

Diaz continues saying, “If I had the same mentality now, Phase One Ventures would never have grown because I would just be working inside my own business 24/7."

Milestones & Highlights

While the most impactful lessons come from failures, there was also monumental business success along the way to celebrate. 

Diaz recounts his milestones along the journey saying, "We've worked with Samsung not only once, but multiple times. We've also worked with a government school district for the last three and a half years now. We helped them increase their enrollment numbers at their schools as well as helped them pass a $100 million bond and override two years ago."

Phase One Ventures Today

Throughout all of Diaz's ventures, he has learned many lessons that have altered the way he runs Phase One Ventures. We asked him about some of these unique and notable differences.

Why are you NOT the highest paid employee in your company?

In response Diaz says, "I don't think there's a need to pay myself more; I have a house, a car, and my bills are paid. In all honesty, I don't know what I would do with more money. Either that money sits in my bank account or I put the money to work inside the company to keep it growing. I have no interest in driving Lamborghinis, wearing Rolexes, and all that flashy nonsense.

Compared to the work of our employees, I feel like it'd be disrespectful to pay myself more because of their dedication and what they bring to the table."

Why do you wake up at 4am?

Diaz explains, "I wake up at 4am because it's when the world is quietest. I don't have any emails coming in, I don't have any calls scheduled, and there's no one messaging me.It's just me, myself, and my thoughts. That's when I can get the most work done.”

Business Tip #6

Jonathan Diaz's sixth business tip

He reveals what he does during this time saying, “I do extensive research for our company. Whenever we're bringing in a new partner, I utilize that time in the morning to do more research about the industry we're disrupting and to find more pain points. Then I'll bring it to the team later that day."

What have you learned while working with 7 figure entrepreneurs?

He shares, "It's much easier because they understand high-level concepts. When you work with lower-ticket companies (and we experienced this a lot as a marketing agency), they were throwing their last hail Mary at us to keep their company alive.”

Business Tip #7

Jonathan Diaz's seventh business tip

Diaz goes on saying, “These companies would expect us to turn them into overnight millionaires with a budget of $2k since that's all they could afford. It's just not possible because if you're down to $2k-$3k in your business account that means you don't have the right foundation for your company. Henceforth, you don't have the right systems or the right product to even scale.

When I work with high-ticket people, they don't expect an immediate return. They understand building a new SaaS company can take 12-18 months before you actually see your first dollar come in from it. You might bleed out tens of thousands of dollars a month building that company. They understand this because they've done it before. I don't have to explain this process, rather they’re immediately ready to get started.”

What advice do you have for other entrepreneurs?

Business Tip #8

Jonathan Diaz's eighth business tip

Diaz reveals his golden nugget saying, “Stay in your lane as in take a step back. Realize what your strengths are and what your weaknesses are. Then double down on what you're skilled at and hire for what you're not skilled at.

You're doing your company a disservice trying to perform the tasks that you're not skilled at. You can scale your company much quicker if you hire people that are skilled at what you're not. Then you're able to double down on what you're good at and you're happier. Your company runs smoother because you're not stepping in there and messing up the process.”

If you’re interested in learning more about Phase One Ventures’ business model, either read our blog “Why Venture Studio Business Models Work” or watch this video where we explain the key differences.

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