How Kurt Elster Built a Shopify Empire and Turned One Platform into a $1M+ Agency

Hector [00:00:00] Hello, and welcome to another episode of the How to Scale of Business podcast. My name is Hector Santiesteban, and I am your host. Our special guest today is Mr. Kurt Elster, and he's a Shopify expert and, uh, someone who is, um, what did I, I was doing some research and they said that you, uh, uh, Gemini says that you are the unofficial mayor of Shopify, so Wow.

Hector Welcome, welcome Kurt to the show. Yeah.

Kurt Uh, the unofficial mayor. I'll take it.

Hector Yeah, that's pretty good, Hector.

Kurt Thanks for having me, man.

Hector So I'm like, I'm like, what does the official mayor think about Kurt? And, uh, you know, so, um, I, I'd love to work. Go ahead.

Kurt I was gonna say official mayor. I'm gonna assume that's Shopify president Harley.

Kurt Uh, we're at good terms. He's cool.

Hector That's funny. Um, well, yes, I'd imagine that in doing all, you know, how much good that you've done for them. I, I, hopefully they are, are appreciative. Um, I'd love to get into some of the, the general tactics and whether listeners you have an e-commerce store [00:01:00] or not. This is gonna be an helpful episode just 'cause it's gonna, we're, we're gonna talk more broadly about how to make any sort of business successful.

Hector But I'm curious, how did you, what were some of the key stops along the way that sort of led. You know, I, I'm thinking about like the mayor of Whoville recently. My kids watched the Grinch, and so I'm thinking like he's, you know, you're, you're sort of the, uh, the, the mayor of, uh, you know, the span of misfits of, of Shopify owners that are sort of taken over the world.

Hector How did, how did that come to be,

Kurt man? Well, you know, it's funny. I, I, so my entire adult life, I'm 42 now. I have always worked in e-commerce. Um. During 2009, recession rolls around and I don't know what, I don't know. There's a lot of effort or a lot of, uh, advantage to ignorance when you're starting a business.

Kurt And I foolishly went, I'll start an e-commerce platform for bike shops. I had no business doing this. You know, I just didn't have the experience. Um, and started building had, but we were able to run office space. 'cause middle of recession, it was like I was able to get [00:02:00] it for free with deferred payments. I just took this office space.

Kurt I had to pay you lease. And so I started selling WordPress sites and doing web design just to cover that when this, you know, other business just wasn't working. And, you know, all of that was a blessing in disguise because you know, suddenly now a few people start to know, oh, like this guy knows web design and websites.

Kurt And then a friend who owned a local bike shop goes, well, I hate my site. Just want something easy help. And I said, well, I heard of this thing called Shopify. Let's just try it. Again, just total like the ignorance of like, I'll just try it. And then on top of it went we'll build a custom theme for it. A thing I'd never done before.

Kurt We'll just do it. And it really, it wasn't that hard and that got us, and it was very early on the platform and that got us noticed. They said, well, we got this thing called an experts directory and you built a custom theme. Clearly you know it, you should just join. Okay, first lead we get from it is band in Dunes Golf course in Oregon.

Kurt It's a big deal. And so from there, it just kept going like that where it's like, alright. After a year of that, a year or two of that, I sent, wait, let's just only do [00:03:00] Shopify and if we're gonna only do Shopify, we need a way to get inbound leads. You know? 'cause prior to that, I'm like sending people letters and postcards and calling 'em and sending emails and I hated it.

Kurt You know, cold outreach is painful for some people. I didn't like it. Um, and once, you know, once we were there and just kept going, it was just really about the consistency and showing up. Um, but as part of those inbound leads, I'm like, man, we'll start a podcast. And I, we was not creative enough to figure out a title.

Kurt I said, well, working title's unofficial Shopify podcast. And we just never changed it. And we got lucky that, you know, we did a good enough job that they both took notice and decided to let us continue with that.

Hector Yeah, it's, um, I'm wondering if it was a no-brainer or what that was like in order to, you know, say that we're gonna put all of our eggs in sort of the Shopify basket and now today that seems like a no-brainer because Shopify is what it is.

Hector I'm wondering if back then, you know, what went into your consideration for, you know, how you were going [00:04:00] to position the future of this business that you had, you know, sort of started,

Kurt you know, it wasn't something I rushed into. I would love to say that I just, I knew and I just dropped it. We went for it and for sure there's, you know, on timing, there's some luck there.

Kurt I absolutely acknowledge that I happened to pitch my cart to the right horse at the right time. But you know what I did, and this is would be harder to do today. I put up, we had a landing page that we knew worked and we were able to just buy Google ads and send traffic to this landing page to generate leads and make and do like these little web development projects.

Kurt Um, and so I took the same that once I had a landing page that worked, I duplicated it and only changed the platform. And so, and there were several, like a lot of e-commerce platforms that you would consider at that time. And so we ended up working on all of these, you know, half a dozen different platforms.

Kurt Shopify was the one that we went, well, that was easy at the end, and it was because it, you know, it was easy, but it was also well documented and they had this ecosystem that's starting to develop around it. [00:05:00] And so that really, that was the thing that I went, yeah, like, let's stick, this is the one. Why are we even doing anything else?

Kurt 'cause like, this one feels easier by comparison. And so we just ran with that. Um, and then, you know, we're evangelizing for it and they're investing in that community. And so, you know, the, the timing worked out really well.

Hector And so it's sort of a testament to, to either experimentation or, you know, at least being, uh, a generalist for a time period.

Hector Um, and then sort of picking your, your focus because, you know, it sort of allowed you to have the, the data there

Kurt early on that the big unlock, you know, it was going from generalist to specialist. And then what's kind of funny about, it's like generalist was web developer and specializing was Shopify.

Kurt Well now today. Being a Shopify partner, I don't know that that's necessarily a specialty anymore. Um, you know, it's more specialized but not quite a specialty. Right. Like you would [00:06:00] wanna do, like pick a, a niche within that. You know, for us, we do a lot of work with aftermarket automotive and it just, it works 'cause I, I came from that industry.

Kurt I have that experience and I, I know cars and such's just kind of a natural thing to layer on top of it. Um, but yeah, certainly. Adding, you know, specialty plus vertical or like specialty plus outcome, you can make a more specialized, uh, niche for yourself in a space you're already in. Yeah. That, like, that was my, the first unlock many years ago was, Hey, you got a niche down.

Hector Talk to me about how you decided on your business model, because you, you sort of have a, well, I'm curious about what, what it actually is. 'cause I, I can make some assumptions, but I would imagine that it is a, um. You know, I, I don't even know what you decided to go to just because in the, in the way that you are in a unique position of being a service provider and then also in a space like e-commerce where, you know, so much of it is, is product driven.

Hector Um, how did you [00:07:00] go about deciding on the business model that you know you have for today?

Kurt Well, absolutely with agency pricing. That's the other weird thing you gotta figure out. Like first was figure out positioning and that specialization and it, truthfully, it took me years to figure that out and then, okay, figure out pricing.

Kurt And you know, I think the magic there is that I wanted to do everything fixed, price up, fixed price, fixed scope upfront. So essentially project pricing. As opposed to, well, hey, here's an estimate and here's our hourly rate. And then well, you, some of these agencies you get into, well, they're like, well, we charge different hourly rates.

Kurt And they're like, it could be quite intimidating where you don't know what you're paying for. No one likes that experience. You know, you hire a contractor, hire a plumber. Well, I think it'll be this, but you think, you know, I don't want it. You could really defang the risk. From that purchasing for, you know, your customer, if they know it will cost me exactly this and not [00:08:00] more, and I'm going to get exactly this.

Kurt And so I think that project pricing, fixed price, fixed outcome, very beneficial. But you know, you have to experiment with it to where it makes sense. Where it's like, okay, the effective value rate is, you know, everybody's happy with it and the client's getting the value out of it. But then, you know, the agency is also, um, being profitable on it.

Kurt And that's like, that just takes experience and some. Um, some effort.

Hector Yeah, I think it's a good point in the sense of like, um, you know. You're gonna have to experiment a little bit, and it's gonna take some iteration to find the sort. And, and I've, I would imagine that, you know, in our instances, we, we err on the side of, uh, you know, oh, we're, we're losing money or we're giving away too much money, and we just tighten up the margins.

Hector And so, you know, there's, there's ways to go about that by, you know, adjusting pricing or obviously adjusting scope. Um, when you look at the evolutions of your business, were there sort of, you talked about, you know, being, going from a generalist to a specialist and, and sort of once you, [00:09:00] you've made these, maybe they fall in line with that, but were there other evolutions of the business that came along and, um, you know, what, what were hap perhaps some of the, the turning points that sort of took you from stage to stage?

Kurt For sure. I mean, initially was just the first pivot was discovering, Hey, I am to like, absolutely unable to validate and get off the ground this, uh, in, in e-commerce platform. Like just move on. Discover, oh, I could be a service provider and that works well. You know, the first time I wrote a proposal for $7,000 for WordPress, the site, I was like, could this even be legal?

Kurt Um, you know, I just couldn't believe it. Right. It's a, a strange thing to wrap your head around. From there, I thought, well, you know, how do you expand that? And so I went upstream to agencies, other agencies, you know, the advantage to that was we were able to get big names in our portfolio. You know, suddenly it's like you're a nobody, but because you're working on behalf of another agency, who in their agreement let you use the names.

Kurt You could say, oh, we did development for like Hilton Hotels. [00:10:00] And so getting that, you know, the next step is. A service provider anyway is like, establish that credibility. 'cause no one knows who you are. You may know that you've got the skills, but nobody else does. Um, you know, and then finding that, that niche, that specialization doing that finding, uh, content marketing that worked.

Kurt You know, for me, a, a podcast made sense. It worked like I was able to adapt to it. I already had experience as a guest on podcasts. Um, and so running our own and my business partner at the time, uh, they had experience editing podcasts, which, you know, in 2000, the early two thousands, there's not that many people who did.

Kurt Then now, you know, much more common and much easier. Um, but like that, that content marketing really made a big difference. Uh, project pricing for sure. Uh, switching. And then, you know, more recently, especially in like a services business, any business cash flow is king. If you can get, if you could sell [00:11:00] retainers and sell clients on, you know, fixed monthly recurring retainers, that really smooths out cash flow.

Kurt If you can add any kind of subscription component or recurring revenue component to a business, huge, you know, big unlock. Um, there. And really, and that also helps give you, when you have that recurring cash flow, gives you the confidence on, you know, being able to hire full-time employees. Um, so yeah, that helped a lot.

Kurt And then marketing wise, you know, it's been 10 plus years. You still have to defend yourself. You still have to prove like that you are capable. There's still people who are discovering you for the first time. And nothing, uh, from a service provider point of view has helped us more than case studies. And I put, once we figure that out, we put in so much effort into getting case studies written because they really, you know, someone's gonna spend as much as a car on a project.

Kurt They wanna be confident.

Hector Yeah. It's, um, [00:12:00] it's such a great reminder that, you know. And, and I'm glad you, you talked about the distinction as being a service provider because that's, that's so relatable regardless of end industry and regardless of what people are building or, or creating. Um, some of these pivots are positionings are, are so important.

Hector Um, what about the team? How did that develop for you? Was that something that, did you guys did sort of do everything in-house or did you guys contract a lot? Or how has that evolved as, as you guys have grown?

Kurt Well, you know, we started with, I had. A business partner. I liked having a business partner. Not everybody likes having partners.

Kurt I do. You know, I think it adds an error or an element of accountability. Um, and it's just, it's difficult to work in a silo, I think, uh, for me anyway. And so I had a business partner, but I mean, those, those business really partner relationships. It's very much like being in a, a sexless marriage and it didn't work out.

Kurt And I ended up having to buy the guy out. Um. And that's one of those [00:13:00] things like, it is like a divorce. It's tough or any breakup, it's difficult. It hurts. And when it's done, you wish you'd done it sooner. That's how you know it's the right thing to do. Like you're like, wow, should have done that six months ago.

Kurt I wish I had the, but didn't slow me down. You know, I went, they had another business partner lined up and he was my, my lead developer and to this day still is. Um, and then I ended up, uh, from there. I wanted to reduce risk 'cause I didn't have that recurring revenue yet from retainers, hadn't figured that piece out.

Kurt And so I just really leaned on contractors, use contractors. You can get really experienced. People scale up and down very easily. Um, you know, for a project based or agency business, contractors are really, you know, a natural fit for it. But with growth, you know, over time, if you have someone who's great and you work well, well, why not give them that opportunity and make them a full-time and part of the team?

Kurt So that's ended up adding. [00:14:00] Um, and now we have a mix of, of W2 and contractors.

Hector Yeah, it's, um, it's really amazing what is possible and the, the type of talent that's available, um, for service providers who, you know, especially ones that can be remote based and, and, and I think that the most, most can be. And so when people sort of open up their eyes.

Hector So the talent that's sort of around, um, I think a lot of opportunities open for them. Kurt, when we get back from break, I want to ask a little bit more about the, the tech and, and sort of, you know, sort of the, the trends and the new things that are happening in your world. Um, because things are, are moving so fast and uh, I would love to get the scoop.

Hector So we're gonna get into that, uh, right after this quick break. How are you doing, my man?

Kurt Good.

Hector Great. Great. It's fun. Um, I think it's, it's, it's great. You know, I selfishly I'm, I'm excited about the, the SaaS [00:15:00] part of it and just hearing what you guys are doing there. Um, and, and sort of, you know, the second part, but I think it's, uh, so cool how, how relatable it is for, for everybody regardless of what industry they're in.

Hector I, I'm gonna do a quick add read and then we'll hop. Hey, uh, today's episode is brought to you by Amplify Media, and we are a podcast and content production company. Well, we like to think of ourselves as like the fractional media part of your company, because chances are, if you're listening to this, you probably have a product, a passion, a mission, a message, some sort of service you're trying to get out to the world.

Hector If that's the case, we can help go to amplify media.com. That's A-M-P-L-A-Y media.com. You can also check the show notes for the link and with outlets back to Kurt. So, Kurt, I'd, I'd love for you to take this wherever you'd like, but things are happening so quickly, uh, with regards to AI and tech and, um, you know, the, the sort of things that are, are, are sort of possible, um, with technology these days.

Hector Um, what, what have you been most surprised with re regards to [00:16:00] over the last, you know, little bit when it comes to. Those sort of things and, and how have you seen the industry evolving?

Kurt The, I think the thing that has surprised me is the general backlash against ai. You know, 'cause from where I'm sitting, you know, I'm surrounded by developers, I'm surrounded by Tech Bros on Twitter, like that kind of thing where everyone is using and very excited about these generative AI tools because, you know.

Kurt Fundamentally, I spend most of my day in front of a screen on a keyboard. Well, that kind of work can really be augmented by ai. Just being able to have, you know, chat, GPT, proofread stuff for you. Once you figure that out, you know, you really run with it from there. Um, the backlash against AI has been interesting.

Kurt Seems to be, you know, people who don't have. A ton of experience with it or had like early bad experiences with it. [00:17:00] And so you could get a, if you say like, Hey, I used AI to make this thing. You can get a negative reaction to it, but then you present the same thing where you don't say It's generated by ai, and as long as it is either both very obvious that it is AI or not at all obvious, they'll be fine with it.

Kurt It's that middle ground where you're like, I think this is ai, but I don't know. That's where people get mad about the stuff, you know? That's where you, especially like. Um, video photo content that you see on like Instagram and TikTok. You just look at the comments like, they get, they get heated. Um, but no, I think it's kind of interesting.

Kurt I think this year we're gonna see people really, uh, appreciate and prefer, or at least say they do, uh, stuff, you know, actual like artisan things, things made by people or meant to look that way. But, you know, the, with ai, man, I'm so excited about the productivity. Those tools represent and either the ability to move through and analyze [00:18:00] data or like quickly synthesize things or automate tasks, um, has been really powerful, you know, for us.

Kurt Development work, coding, like absolutely. AI has come so far and is able to code really well. It is, it's quite shocking the stuff it could do and the stuff you could turn out now. Um, certainly like writing, it's good, but I think that's where. People get themselves into trouble where it's like, suddenly you don't set tone of voice, you don't copy edit it, it, um, it, it looks like ai and that could be a little annoying for folks.

Kurt I dunno. I keep going. I'll riff, I riff for 20 minutes like that.

Hector Well, it's, it's a, it's a great reminder that, you know, there's this new, I would imagine for a lot of people it's a, it's a new term called vibe coding. I know it's not, it's not vibe coding, but it, it really takes the, you know. The barrier of entry to programming and developing, uh, it takes it away, you know?

Hector Yeah. And if you've got on [00:19:00] Gemini, you can type in, you know, a couple of prompts and you've got a video game, or you've got whatever. And so I think that, uh, a lot of business owners could sort of wake up to that and then what's next and what's possible after that, um, you know, is really only limited by, by the needs of their customers and sort of the aspirations of their business because.

Hector Things just got a lot cheaper and easier. Um, I, I would imagine, you know, you're, as a service provider, there's a, a similar like timeline where you've had to adjust, um, because of AI and you know, in our sort of world in media production, I thought we had a longer runway before AI sort of chewed up a lot of our industry.

Hector Um, but it's just so easy to do so many things with tools that are much less expensive than, you know, paying for a, an agency. Um, have you felt the need [00:20:00] to adjust at all because of ai or are there, um, things that you guys have done, um, be as it's sort of, you know, taken hold amongst most industries?

Kurt You know, early on.

Kurt I maybe felt that way, that like, okay, if we don't stay up with this, we'll get left behind. But they are such easy tools to use. And then when you're already in, you know, this very like tech environment, adding these tools, you're the target audience. And so they're not, they've not been tough for us to learn, adapt to and, you know, add to our workflows because they're like, we're, I think we're the target market, right?

Kurt Like a lot of developers, um, and no, it's been. It's been fun, you know, to try the tools and learn. Early on it was a lot about, like, I would just try to break them, you know, new, new technology, new tools, new features. I wanna, I won't feel that I understand it and know it and know its [00:21:00] limitations until I could break it, right?

Kurt I could break it. Then I'm like, okay, this is where it, it falls apart, so this is what not to do, and now we can learn how to really use it well. By taking that approach early on, those AI tools were not that smart. They were easy to break, easy to confuse, easy to mess up. Over time, they've just gotten way better.

Kurt Um, and you know, for us it's like we, the first, when it scared me was when the guy who would just transcribe our podcast just quit. He goes, look, writing's on the wall. This is over. But there really were no good AI tools at the time to make that work. Now today, uh, free piece of software called Whisper. I just give it an MP three link.

Kurt I don't even do anything more than that. And it transcribes the whole thing perfectly and then also separates out by who's speaking off one file. That's incredible. And then you have to pay for the thing. You know, it runs locally on my computer. Two years ago that didn't work. Now it works. [00:22:00] You know, so that guy, he was right that, that his job would go away because of ai and it did.

Kurt Um. A lot of the, uh, we're able to clean up guest audio. You know, I love podcasting with you. You've got a great setup. Same mic as me. Most people don't, you know, they've got, they've got AirPods and they're gonna record next to their furnace in a warehouse, right? Like something crazy. There's an AI tool called Adobe Enhance.

Kurt It could take out room echo. I could take out all of that. It's crazy. It's really good. Um, sometimes it's too good. People sound like a little robotic and. Same with like video tools and then of course writing tools. I think that's where people get themselves in trouble. It's just like having it write blog posts for them.

Kurt Having it write emails, um, that don't sound like them. That's what annoys people. It's like, okay, you know, it, it comes across as in a fun, inauthentic and fake, you know, last year authenticity, that was a buzz word, right? But I think it was like in [00:23:00] reaction to all this fake content being created by ai, you know, influencers.

Kurt Feeling fake suddenly, you know, everybody kind of wising up to the thing. And so with that AI content, it really, it's gotta sound like you at the end of the day or you're gonna get your, you're just gonna annoy people.

Hector Yeah. It, uh, you know, the, the term AI slop is, um, AI slapp hitting term. Um, and, and I think there's a lot of businesses who are afraid of putting that out, rightfully so.

Hector Then they don't really learn the right way to do it though. They, they don't really leverage it. It's like, you know, I'd imagine it's like, you know, builders who, you know, cranes came around and they go, I don't want to use a crane. It's like, eh, it might be worth looking, looking into that, you know, because there's a, there's just a new, you know, amount of leverage.

Hector Right. I think Naval Rabhan, he has his four, you know, points of leverage. I think he might have to add another one when, you know, when it comes to ai, [00:24:00] because I think it just creates that, that sort of speed. Which wasn't possible.

Hector Kurt. Um, I got a couple more questions for you. Sure. Um, before we, uh, well, two more questions. The first is if people want to get, um, in touch with you, if they want to find out about the show, um, find out about what you guys do with your agency. Where's the best place for people to go?

Kurt Oh, you know, Google me, kurt elster kurt elster.com.

Kurt I've got links to everything there. Uh, the official Shopify podcast is my show and our agency service business is ethercycle.com, like ethernet and bicycle.

Hector I love it. Um, apparently I was, in my research it was saying that, uh, you guys had a chance to work on Jay Leno's, um, his Jay Leno's

Kurt garage. Yeah.

Hector Yeah.

Hector Uh, and uh, it's just fascinating. Um, it seems like, uh, he, his, [00:25:00] he's sort of a transcendent character, you know, a little bit. And so you mentioned that your, uh, your being in the, you know, knowing cars and such, like that was sort of the connection there, I would imagine. Yeah.

Kurt And I got lucky. You know, they, they invited me out there.

Kurt I got to tour his garage, uh, 200 cars, 200 motorcycles, uh, and met the man many years ago now. Uh, but yeah, perfectly nice guy. Very nice. Uh, and I you, when I saw him, he was, looked like him. He is wearing like the, the full Canadian denim tuxedo. He just got his haircut. I did not realize he is like six three and absolutely my brain went blank.

Kurt I had this like. I, you know, I, I'd even like practice so that I, that wouldn't happen. No. Such luck.

Hector Yeah. Yeah. He's one of those guys completely

Kurt broke my brain to see.

Hector Yeah, no judgment there. Um, you, uh, I would imagine so. It's a, it's sort of a big, he, he's a big character. Um, last question, Kurt. In your [00:26:00] opinion, what is the secret to scaling a business?

Kurt Oh man. I think the thing that everyone is missing is knowing your numbers. You know, the re if you're like, why can't I scale this? You know, it probably because you're not confident in, if you can afford to scale it and how you could scale it, you know, and what the right lever is that is going to add additional revenue to the business.

Kurt The other one that sounds silly is people will say they're, they're bad at goal setting, so they'll say, oh my, my New Year's resolution, my goal, I'm gonna scale my business. That's that way too fuzzy. If you're like, Hey, you know, I wanna get to a million a year. Okay, divide by 12, and now you know you have a revenue goal for the month, or divide by 365.

Kurt Now you have a daily revenue, revenue goal to hit. Yeah. So knowing your numbers and then setting realistic goals. Okay. That. It tells you are, you know, helps you get there because now you know [00:27:00] very, you could quantify I am or am not on track to hit my goal. And then what has to change?

Hector Fantastic. Well, I wanna thank all of you listeners for sticking around and hanging out with us today.

Hector If you're not following wherever you're listening, please hit that follow button. Go check out Kurt and his show as well. And if you guys, um, wanna connect with me, you can go and find me on LinkedIn, Hector Santi Seban. As always, we appreciate being here. We'll see you on the next one later, y'all.