Hello, gang, it’s Randy Reid here with DOJO Nation and DOJO Nation Times. We’re very fortunately today. I was finally able to wrangle a good friend of mine, Scott Dolloff, into an interview and a chance to talk about the martial arts, what he sees going on now, and in the future.
Mr. Dolloff, welcome to the interview.
SD: All right, thank you so much for having me today.
DN: As you know, I’ve been trying to get you to do this for quite a while. And I appreciate you to taking the time. I know you’re really busy, and you’re running a very impressive company down there.
And you’ve got a lot of balls in the air. l appreciate you taking time to share with us.
SD: It’s my pleasure, sir.
DN: So what I’d like to do first when we were talking with people, Is talk about their background. I don’t think people really, in fact I know I didn’t, understood the depth of your martial arts background. I think we kinda took for granted that you were a nerd. And come to find out, that’s not quite the, [LAUGH] quite the deal. Can you fill us in a little bit?
SD: Yeah, I don’t know where I should really start. But when I was, I don’t know,
I was in probably kindergarten, first grade, I saw a martial arts demonstration in my school. And one of my best friend’s dad was a black belt. So I started taking classes, call it garage karate. And then we moved quite often because my dad was a turnaround manager for Walmart.. And I actually started formal training, probably, when I was, I don’t know, six or seven. And before I knew it I ended up training with the Dorseys. My main instructor’s Brian Dorsey and his brother Troy Dorsey.
And then I got into kickboxing and sport karate and all that stuff. But I’m pretty much under the lineage of Jhoon Rhee, and Pat Burleson, and Allen Steen, and That whole rough gang.
DN: Right, well, for those young ones out there, [LAUGH] that don’t know, there was a connection called Texas Karate, or Tae-Kwon Texas, or it had several different names.
And there was some rough, rough cats from down there. They weren’t thugs, they were nice guys. They were just really world-class martial artists. You had Ray McCallum, and he’s probably the best known. But Troy Dorsey, your instructor, he was not only a kickboxing champion, but he was the first guy ever to win a professional boxing championship back when a professional boxing championship meant something.
DN: He actually fought Oscar De La Hola too. And so when I found out that you’d come out of that, I was impressed. I spent a summer down there battling with those guys. And a lot of them are good friends. So I said, well, if Scott came out of that group and lived, [LAUGH] then made black belt, it was impressive and the nerd thing went away right away, once I heard that part.
SD: : [LAUGH]
DN: So how did you go from slugging away like they do down in Texas to running a tech company and starting RainMaker?
SD: Well, you know, I owned the school, I bought my school from my instructor.
And it was rough for a little while, I had to learn the business. Before I knew it, I was doing pretty well. And then at some point, as websites started to emerge more and more, I figured out that Yellow Pages was dead. And I started really learning, with some good friends of mine, that whole side of the business, of creating leads through websites.
And before I knew it, I was running a website company. And I didn’t have a whole lot of clients but I had about 80 clients. But I was charging $400, $500 a month. And we had a premium pricing type thing. Then, before I knew it, the software was just kind of a natural evolution of it.
We were using it for our schools just because, at some point we had tried other software. And we didn’t like it. And then we ended up using 10 or 11 different pieces of software. And we just found that people and information was always falling through the cracks. None of them talked to each other.
It was just a bunch of data entry, and it was just a mess. And then, at the same time, we were using a billing company. And we had a situation that put us in a pretty bad spot. And we had to figured it out, and hey, we felt these guys are acting like they own us.
We own the school, but they own the contract, they own our money. And they weren’t really willing to help us in an adverse situation. And it got ugly, so we said, we’re done with that. So, from that point, we added billing to the software so that we could really truly be in control of our own finances and future.
And, at some point I said, I had a few friends, I was always networking with other school owners, And I had a few friends that had asked me about the software. And I was like, I’m not really interested in that. But before I knew it, it had taken off.
When we decided to finally promote it, we signed up 100 schools in the first, I don’t know, six months. And it just kept doubling, and doubling, and doubling. And it really turned into something that we never ever expected. And I ended up selling my school because the amount of resources and time it takes to actually run something like this.
DN: Sure, But what year did you kind of start RainMaker, do you think?
SD: You know, the actually software itself I think we started creating in like 2003 actually.
But promoting it publicly, I’m gonna say was around 2010.
DN: Not that long ago, really? Not that long ago at all, And I’ve been around, as my readers know, I’ve been around this business since the beginning. And I’ve seen the landscape out there of things you mentioned, billing companies, that sort of thing. And then the software thing, and there was a lot of options. And there still is a lot of options out there. But it seems like RainMaker really outpaced everybody. And listen, I’m not trying to turn this into a commercial for Rainmaker, although I’m a huge fan of what you do in your software.
You guys really did outstrip the competition, and have done a fantastic job. How many people are using RainMaker right now, how many schools?
SD: Schools I would say we’ve just a little over 2,000. And then between different instructors, and teachers, and owners, and everything else, there’s probably 6,500 people that are actually using it.
DN: Right, so why do you think that you guys has been so incredibly successful? I mean, we’ve seen that a lot of these things come and go. And we’ve seen some that are out there now that are struggling. And you guys really seem to have kind of the market right now.
SD: Yeah, you know, I think part of it was really good timing and luck. And another part of it, I think there’re probably three things. I think, number one, that the other choices out there really didn’t have the martial arts business built into it. So I always kind of like to say that, you know we built the DNA in martial arts and martial arts business into the actual way the software works.
The next thing would be just the focus on constantly streamlining the software, streamlining the systems, make it easier to use, and the fact that we understand that the software is not where people want to spend their time. They want to spend their time teaching or doing different parts of the business.
We designed it so that it’s not for a tech person. It is for a non tech person. And I think that makes a big difference and the fact that it works in a logical order of how we do business. How we sign up people. How we charge down payments. How we do memberships and things like that. So I think that really when people saw it they were like this is exactly what I would have created if I had done it myself.
DN: Right. And I think that’s a big one.
Well that’s why we’re here, we’re karate guys. And when I say we, I mean you and me. And I think that’s such an important factor that you’ve taught intro lessons, and you’ve had the good and the bad of ownership. And the last thing you want to do is put more stress or more work onto a school owner.
And the other thing that I’ve seen since I’ve been involved with Rainmakers, is you guys I think understand the level of service required for us karate guys. And when I say that, most of us aren’t sophisticated business people. We need some hand holding. And we’re afraid of some of software.
And you guys have always been very, very service first orientated. I think when you combine that with the, as you said, the DNA of martial arts, I think that’s extremely important. So if you’re dealing with what did you say? 6,500 martial arts business people out there. What is your insight as to what’s going on in our profession?
Over all, how is martial arts is doing across the country? You should have a pretty good birdseye view from where you’re at.
SD: Yeah, I do. I mean, I see a lot of data. And I understand where we’ve been martial arts business wise in the past. I see where we are now and I really do see the different things going on because of the amount of the information and the data and as far as numbers, students being enrolled and info calls and inquiries being created and everything else. I really see more and more instructors that are actually becoming professionals. I see the martial arts itself evolving. But I see that there’s more depth to business and the thinking behind school owners than we’ve ever seen before.
I mean I really do see some massive growth compared to maybe 10, 12 years ago.
DN: Right, well I’ve talked with people, and like I said, I can’t think of a better time to be in the martial arts profession right now. I know more people today that are running million dollar a year schools than I knew 25 years ago, when they were running $35,000 a year schools, I mean there is really some people doing some exceptional things out there.
Going forward as far as the direction of the profession, what kind of trends do you see ahead, do you get a feel for what’s around the corner? What’s coming ahead?
SD: Well, I guess I have to find trends is a funny word right because you’ve been in 40 plus years I’m involved with 20 plus and before that was a student.
The same things that we see today we actually saw if not a decade ago, two decades or three decades ago, right? So they just keep coming back. But I think that overall I think there’s a lot more clarity behind what’s going on with instructors. I think they understand things better.
Statistically, it used to be an anomaly for people to actually record and track statistics. And now, it’s more unusual for people not to track their stat than the other.
DN: True, Right, right.
SD: I think there’s a lot of evolution as far as how those things are done, and how basics are carried out versus before.
I also think not so much about trends in the martial arts, but trends outside the martial arts that we notice. More and more businesses, like dance, fitness, and yoga, they’re actually following the way that we’ve been doing business for the last two decades. I think we’re pretty wise, and as people we tend to look outside of the industry because we’ve been told that that’s where the answers are. But I really found is more and more industries looking at us.
DN: That’s interesting.
SD: Yeah, and I really believe as a whole, that we are really the leaders in an entirely new emerging movement that a lot of people are calling transformational instruction sports.
I’m much more interested in being part of some kind of movement like that, which is moving, that’s about something. I think whether we know it or not, we’re the leaders in that movement. Because everybody is copying us. Even certifications and things like that, those things came from what we already do.
And this idea of transformation structure in sports It’s about developing people from the inside out using their sport or the art they love. But it’s something that goes beyond what they teach, and I think it has a lot of substance. and promise.
DN: Well that’s interesting. So, yeah, I mean I’ve always kind of looked at it as we’re in the membership business, the educational membership business. But we are, you’re absolutely right, we are in the transformational business. And as we look into that, as we develop and get better at it,
I know we’re all very aware of the benefits of martial arts. I think that’s a gimme. But I can’t understand how a 10-year-old child can do martial arts for a year and not bring their friends in.
DN: I mean your average school, one out of ten brings their friends in.
A top school still only five out of ten bring them in. That’s the best I’ve ever heard of. And when these kids skateboard together and play soccer together and everything else together, what are we doing so wrong That we’re not cracking that code. And I think when we crack that code, if everybody understood the value of a black belt for a young child, we couldn’t build schools big enough.
DN: So I think that’s something that we’re hopefully, as you said, if we’re starting to be the leaders in this area now, and we stay on top of that, it could be pretty exciting down the road.
SD: Yeah, absolutely.
DN: Yeah, well, that’s pretty cool. The other thing is, I think you have so much insight into is seeing all these schools, 2000 plus schools, you get a pretty good feeling who’s doing right and who’s doing it wrong.
And if you were going to sit a school owner down and he wanted to make improvements in his school, could you break it down to two or three recommendations, things that you would tell them, there’s probably 100 of them, but two or three that could really get them going in the right direction?
SD: Sure, and I think the first thing is to really focus on foundational principles, I call them big rocks. You know the old story, you got big rocks and got medium rocks and you got this gravel and then you got this sand. And you say, okay put all this stuff in this bucket.
So they take sand, they put it in, the little ones and bigger ones, then the biggest ones and it doesn’t all fit. But if you were to put the big rocks in first, and then the medium, and then the gravel and then you pour the sand in and the sand kind of fills in all of the cracks in.
Before you know it the bucket, it contains everything that it’s supposed to contain where it didn’t fit the opposite way, right?
SD: And I think those big rocks revolve around creating a strong culture through really understanding the core values that you want to create, the core promise that you are trying to fulfill with your students.
And the strategic purpose, I think, really is what is the “why” behind what it is that you’re doing. I think if you start with those things, that you won’t be so distracted by stuff that doesn’t matter. Because of the number of schools that I see, I know that there are schools that work great with contracts.
I know that there are schools that work great with month-to-month agreements. I know that there are schools that work great by using testing fees and the opposite. None of those things are big rocks. Those are the sand, those are the details that can work themselves out when you have the big rocks taken care of.
But so many people cling to the sand, they cling to the little details Because, for them it’s a way of absolving themselves from the responsibility of why they weren’t creating the results they wanted to begin with.
DN: Perfect, yep.
SD: So they cling on to this little stuff when it’s the big stuff that’s causing them issues.
It’s like when you sign up, you only sign up two or three people in a month. And so pretty soon you’re like, well I need to drop my price, and that doesn’t help. And then, well I need to go from contracts to month to month and that doesn’t help.
That’s because there are bigger foundational issues at hand. It’s not a matter of a lower price, it’s not a matter of contract versus not contract. So big rocks come first.
DN: All right.
SD: Second one I would say is, as instructors we got good. I mean that’s the right way to say it.
We get good at what it is that we do as far as the martial art is concerned, to the point where it’s effortless to us. And when it comes to business, if it’s not effortless to us if we can’t do it perfectly, sometimes we don’t start. Or sometimes we just don’t do things because they’re not perfect yet, so we get stuck with this process of trying to figure out in our heads but never actually do anything.
So I think the second thing would be to focus on starting, to get things done. And then evolve or use iterations. And just start with one level and then polish it up again. And polish it up again and improve with time, just like you did when you’re coming up in the martial arts.
SD: I think that’s a big thing. So many people just get stuck and don’t do anything. And the last thing I would say is, to truly understand lifetime value of a student, lifetime value of a member. And how that principle of lifetime value should be a guiding factor on how you make decisions across the board on your business.
DN: Absolutely and just so people understand, lifetime value is how long that student is going to be there and how much they’re paying. If you teach fitness kickboxing, they’re going to be there a while. What would you say, Scott, six months, probably?
DN: Yeah, but it’s lower than if then they are a martial arts student, and we know that people that are in after school summer camp are there the longest. So, a student who enrolls in a year round after school summer camp, they can be worth $10,000 to $15,000.
Whereas somebody who comes in for a fitness program, that’s your highest turnover, so you’re going to have your lowest rate. So your marketing dollars have to look a little different at the upside. And that comes back to that lifetime membership value, or that lifetime member value. And I think a lot of people miss that.
I think, for instance as far as lifetime value, if you know a student has a lifetime value of $2,000.00 and you’re not willing to spend $50.00 or $100.00 to get a new member, then you’re being short sighted.
I think that we think of marketing, I think we think of marketing as a cost.
I think we think of advertising as a cost but if you understand what it actually does, it’s always an investment. It’s always the ability to purchase more students. But if you don’t have those numbers down and understood, if you don’t understand the idea of those numbers, you’re going to always look at everything you do as a cost versus how can I make it earn more money for me.
Anything that’s a cost, how can I make that cost turn into an asset that produces money?
DM: Correct, ROI is the big one. So based on what you’re seeing, where do you think martial arts are going to be in five or ten years? Do you have an opinion?
SD: I do, I think if we were to look at records and things like that, there are a lot less schools today than there was 15 years ago, I think because of whatever reason, right. But I also see at the same time those people left are real operators.
I think they’ve honed their skills and the people coming up under them have learned that they’re on a whole other level as far as how they’ve learned to teach. How they’ve learned to run the business. And I see a lot of expansion going on within people’s own organizations that will just continue to spread like wildfire.
I really see, already see, a lot of steady growth happening again.
DM: Great, well that’s exciting. Well sir, I really appreciate you taking the time out to share your wisdom and your knowledge and just one last quick question. Is there anything you want to share about what’s going on at RainMaker and what’s coming up?
I saw some very cool stuff the last month or so. And what else is there? That you can say? [LAUGH]
SD: Man, we always have something. We have so many things. I think one of the most exciting things that’s going to be very helpful, is that we’re moving. Or we’re expanding the ability of the software to turn it into an actual phone based and tablet based app, versus just the web based software.
So I think that’s going to free people up even more and make it even easier for them to have the freedom to run the business, regardless of whether they’re in front of a computer or not. So I think that’s a pretty exciting thing.
DN: Cool, all right, sir. Well, I sure appreciate your time and I’m sure the readers of Dojo Nation Times appreciate your time. And once again, I want to thank you for all your great insights today.
SD:Thank you so much.