Disrupting The Design Industry Through On-Demand Graphic Design with Jonathan Grzybowski
We create businesses that serve others as our highest priority. We are focused on how to create success first for yourself and then for all the people in your world. Creating success is not hard if you’re willing to work, but recovering from failure first, then creating success is far more difficult. You’re about to learn from a gentleman who’s had both the thrill of victory and experienced the agony of defeat. He came back swigging and discovered the key to why he failed before and has a very successful company. Welcome, Johnathan Grzybowski to the show.
Thank you so much for having me, Mitch. It’s an honor to be here.
I love your story. It’s not only interesting and exciting, but I have a feeling we’re going to learn a lot from you. Johnathan, tell me, how did this whole thing start? How did you begin in business and what happened with that first effort of yours?
We had a digital marketing agency that we’ve been working on for several years and it wasn’t up until this past few years when Penji started putting the wheels in motion that we were able to completely shut it down. We had a digital marketing agency that didn’t necessarily specialize in that one thing. We were all over the place. We did SEO, social media marketing, web development, web design, app development and app design. The list goes on and on. To be perfectly honest, we weren’t good at many of them. The realization when we started getting clients is they would say, “You’re good at this one thing.” We would get clients and we would create these amazing pieces of art that later turned into websites.
We felt pretty unfulfilled because when you’re creating a website for a client or let’s just say for a university. The end-user is the student, but you’re giving it to the university. That’s not the most rewarding thing on the planet. To make a long story short, as we got clients and as they came and they left and we asked for feedback, they always said every single ones that our design was amazing. That steered us to perk our ears up a little bit. We realized that the traditional model of what Penji ended up becoming is more so like an accidental thing that we stumbled across based off of feedback from other people.
Once we started hearing that our design was good, we were using the same graphic design team for the longest time. In order for us to find that good design team took years of failure. It took years of hard conversations of looking yourself in the mirror and it took years of in this case, me doing the designs myself. I am not a qualified designer at all. I am terrible at graphic design, but I have a good eye of what looks good. The fact that we were doing it myself for the longest time, not having a clear strategy to scale as we grow, that was inevitably what led us down the path of what Penji is.
Johnathan, did you have an idea that you were not experienced in growing a company and did you get help or did you figure it out on your own?
I definitely didn’t figure it out on my own. I have an amazing cofounder and then two founding members that led us down this path. We’ve taken a very unconventional route of how we got to where we are. We’ve never received an ounce of funding. I don’t like the word bootstrap. I like the word cashflow positive a little bit better because I think when you hear the word bootstrap, it means that you’ve struggled. We’ve been cashflow positive our entire careers and this entire business started with just a couple of thousand dollars of investing it into the bank. We were able to grow it to what we are, which is we’re 50 plus people and continuing to grow. We did get help, but it was more so through trial and error. It was trial by fire. We have a lot of approaches from a sales perspective, marketing perspective and a growth perspective that we thought was working. We had to fine-tune it when we realized that it didn’t. I’m sure we can always get into that later on.
I’d like to go back and cover something you mentioned, you said you started as a general purpose shop. You did all kinds of things for people on the web. Was the feeling back then that, “If they’ll pay money, we’ll do it?”
I just got off the phone with somebody and we agreed to the same thing. When you’re in the world of web design or whatever’s thrown at you, to make a Lion King reference, it’s like feeding food to a bunch of hyenas. You’ll grab it whatever you can and you’ll grab onto it and ride the wave as long as you possibly can. That was very much the approach to our general marketing firm. Whatever came our way, we went after it.
You’re not alone. Most of us start that way. You said that you did everything by yourself and frankly, so did I. I started a software company in the 1980s. My partner and I, he was responsible for the coding and the software and my job title was everything else. I was doing literally everything else, packing the software, making the PR calls, handling tech support, writing the manual until it got to the point where you can only work fourteen hours a day for so many months and seven days a week before you have to get some help. It was getting worse, which was good. The business was growing, but the thing is that it was working for me because I thrived on that. It sounded like when you got started, it wasn’t working for you because you are almost going in the wrong direction. How did you pivot out of that? What did you tell the people that were with you at the time?
That’s an interesting story. We were the marketing agency for several years and we had employees but in order to pivot your mindset, in order to change your entire approach. How can you say you’re going from this digital marketing agency to somewhat like a SaaS type of business where we’re selling the graphic design as a service to small businesses, startups and marketing teams? How can you rip that Band-Aid out? The theme that we took was like a shedding of a skin. What we did was we set every employee down inside of a board room, one by one, and we fired them on the spot. We said, “You’re no longer with this company.” We let it soak in a little bit, maybe too long for some.Finding a good design team takes years of failure and hard conversation looking at yourself in the mirror. Click To Tweet
A lot of raw emotions were created. It was very hard in order to see the fear, anger and the sadness in these faces and hearts. As soon as that conversation was over, we then slipped them a letter of acceptance for Penji. Although it is very dramatic and how we shed that skin from the past to what we knew would inevitably be the future, it was incredibly difficult to do, but it had to be done. If you didn’t make that traumatic experience, then the people, including ourselves would still hold on to that what once was. It’s going to be hard in order to move forward with a clear head knowing that you still have something else left behind. That’s our approach to that.
I don’t think I’ve quite heard a story like that in a while. I experienced a situation where we had grown our little software company up to about $2.5 million in revenue and we plateaued. I went to the conference after conference, event after event trying to learn why I couldn’t get past $2.5 million in revenue. When it finally came to me, I realized that the management team that got me to $2.5 million couldn’t get me to $10 million.
The same rules apply to every business, including our own. All the strategies that got us to 100 did not get us to 1,000. What we did at 100 didn’t even get us to 200. What we did at 200 definitely didn’t get us to 500. It’s a lot of processes, note-taking, data analyzation. There’s a lot of stuff that goes into it.
The thing that’s important about what you said to me is that you had the realization that you needed to transition. As painful as it was going to be, you made that happen and you intentionally inflicted that pain on your staff for a purpose to leave the past behind. When I did it, I fired my entire management team virtually all at the same time. To tell you the truth, they were crying. I was crying. I love these people. They helped me start this company and I had to fire them because I had a responsibility as CEO to take care of the company first. These are hard things to learn without having had the experience before. Kudos to you for having learned them, but it turns into a difficult situation dealing with people. Not everybody was all smiles and accepting it in a kind way of what I was about to tell them.
We were grateful enough to not necessarily had to have done that exact thing. I can only imagine what you’ve gone through. For us in particular, we’re very prideful with the team that we have. I hope it never comes down to that. I don’t think it ever will. Thank you for sharing that story.
You have evolved past that already. You saw the future and you were confident enough to move forward in that new role, which made all the difference in the world. That’s a huge milestone and kudos to you and your team for having figured it out. What Einstein said is “You can’t solve problems with the same mind that created them.” You did something that needs to be acknowledged and is in fact, unusual and congratulations for that.
I always used to say that the success that we have now, I know sounds cliché and very like the leadership of me to say it, but it definitely wouldn’t have happened if we weren’t working as a very cohesive team. I think that for us, that’s the biggest differentiator when it comes to our growth versus the industry that we’re in. We have a team that each person understands their roles. Each person understands what it is that is expected of them and that has made all the difference.
Let’s talk a little bit about what your business is. My understanding is that you provide a low cost on a monthly basis, graphics and graphic support for anybody who has a company and needs this on a regular basis. Is that pretty much what you do?
Yes, in short, that’s definitely a good 30,000-foot view of marketing teams that need graphic design help or entrepreneurs that are doing it themselves. Maybe there are agencies that don’t necessarily have the funds to source an entire graphic design department. Rather than doing all those things and wasting time trying to find freelancers and the freelancers inevitably telling you that they can do it, but then they can’t. There’s a lot of time that’s wasted when it comes to interviewing freelancers. There’s a lot of money when you hire an internal graphic designer, especially when it comes to all the HR stuff that’s involved. What if there is a platform that allows you the ability to get a quality graphic design service and pay one flat monthly rate. As soon as you sign up for the service, they begin working immediately. That’s the approach of what Penji is. We want people to be able to sign up and get going. Our deliveries are at a maximum of 48 hours. You can get a lot of stuff on our service. It’s exciting because we’re able to help so many people. Going back to what I said about helping those universities, we could help everybody in the entire school if we wanted to and not just the university themselves.
The thing is though, is to use a company like yours. You need to have enough work to justify paying an ongoing monthly fee. What do you do?
I would say maybe. Let’s say you need one project for a graphic designer. The average rate is going to be somewhere around $85 to $125 an hour. If you were to get a logo done, that’s probably five hours. An average logo is going to be $500, maybe several thousand depending on who you talk to. For us, you can get a logo, just one thing for $369 or you can get 10, 40 things all at the same price. That to me is extremely valuable because it’s lowering the barrier of entry for most businesses. You don’t have to necessarily say the value isn’t in the amount. The value is in the quality that is delivered. The benefit is the quantity of how much we could produce.
Once again, I’m up against the entrepreneurs’ mindset, which is I can go on Fiverr for $10 and get a logo. Sometimes you get a nice logo, most of the time you get a $10 logo.Shedding that skin from the past to what we know would inevitably be the future is incredibly difficult to do but has to be done. Click To Tweet
That’s exactly the point. You can go on these websites and you can get whatever it is, but how much time are you wasting in order to find that person that you think closely matches your style. That is the biggest differentiation between us and why we’re in the market. In our opinion, we’re disrupting the industry because now you don’t have to go searching for the people. You work with a service like ours and you don’t have to think that this company is definitely going to deliver quality. That’s the brand perception that we want to be able to uphold is that when you work with Penji, even if it’s not exactly the way that you want it to, the service is going to be able to help you find it in some capacity.
I have a viewpoint here that I’d like to share with you. The thing that you said that’s most important to me as a business owner, an entrepreneur and a student of entrepreneurs is that it’s not that you create good or even great graphics. The most important thing you said to me is that you get to know me. You understand my style after the first few projects of working together. You have alleviated a huge problem in my mind, something that I didn’t know you talk about. This is a personalized service. You get to work with the same people on your team month after month and they get to know you and they know not only what you want, but most importantly how to put you in the best light of all. Am I accurate when I say it that way?
Yeah, 100%. I would say even going a step further, we’ve created things within Penji that allows people to further educate us about who you are. We have design libraries. We give you the opportunity to submit your fonts, colors, logos and etc. At the end of the day, us as human beings, we always want to be understood. That has come down to an elementary level where even as children, we want to be heard and we want to be understood. Communication is the biggest portion when it comes to how businesses fail and how relationships fade away. If we’re able to communicate more with the customer and this isn’t just with us. This goes for anybody reading. If you’re able to communicate more effectively, then that’s alleviating the biggest problem that most businesses have is that communication element. I think Penji does a good job of that.
It sounds like you’ve cracked the code for what you do and possibly as you say, created a new paradigm for business when it comes to this type of service. Readers, we are with Johnathan Grzybowski. He is the Cofounder of Penji and has created a unique on-demand graphic design service. That sounds like he creates something very powerful, very fast, very affordable and he’s with us to share the secrets of how he built the business to a thousand clients and beyond. Tell us a little bit about what the key difference was when it came to marketing and sales, bringing in customers once you cracked the code of what your true value is as a company.
I don’t necessarily know if the code is officially cracked. It’s an ongoing thing, but I think we’re eager to further understand the market. One of the biggest things that has led us down this path is that constant approach of being curious. At the very beginning of Penji, we didn’t even know that this was going to work. We worked with nonprofits and we’ve asked questions like, “If we build this, will you come,” like the whole Field of Dreams approach. The overwhelming majority of people that said yes allowed us to be able to provide even more value to what it is that we’re doing. It was a matter, in my eyes, that idea of continuous learning and knowing that even though you have a hypothesis, it doesn’t mean that it’s the finish line.
The thing I’m trying to get at here is you go from 12 clients to 100 and you learn something. You go from 100 to 300 and you’ll learn something else. What I’m asking is educating our readers. What changed from 100 to 500 clients, not just in your mindset, which I want to know, but I also want to know what changed internally in your systems? How do you manage hundreds of clients versus twelve?
There are a couple of things. Number one I’ll speak to is technology. We’re developers, we’re designers. If we were to design anything, we could develop anything. That’s definitely been a huge resource, but the thing that’s most important has been data. When we initially started Penji, we thought that startups were the perfect end-all be-all, the price point was awesome. These are the people that need us customer base. After doing the research and servicing the customers, we realized that the data was 100% wrong based off of our hypothesis.
From a structural standpoint, we had to completely change things drastically from 100 to 500 because we were built for one particular demographic, but we realized that this whole other set of people were the ones using our service instead. There’s that element of it but also, looking at where customers are coming from. From the first 100 customers, in particular, it was all many referrals but the next 400 customers were based on strategic outreach, advertisements and marketing just like what I’m doing now. I would say that the press was a huge way that we were able to grow. Also, cold emails were another approach that has worked extremely well and then advertisements. Those are the things that have allowed us to soar when it comes to our growth and our marketing.
For myself, I started with PR. In fact, the very first employee I hired was a PR intern. It was a fantastic investment and it was because of PR that we were able to become a successful company. I didn’t spend substantial money to advertise probably two and a half years. We put classified ads in publications. A real agency came three years after the beginning of the company and that catapulted us to the next level.
I want to add onto that because I think I forgot something that’s been incredibly important. A lot of people may hate this, but it was SEO. SEO has been a huge thing for us. If you were to Google main keywords when it comes to our services, which is on-demand graphic designer, unlimited graphic design, we’re in the first page and we were able to do that through creative SEO. When it comes to content, we’re content generators and we’re incredibly good storytellers. That was something that I wished that we invested more into early on because of the benefits that we were able to receive that I’m sharing with you is a large portion of that.
Let’s clarify a bit because SEO can be many things. What you said was creating content. Tell me what your theory is and your practice is on backlinks. Do you have a person in the company that has as a job or part of their job to go get backlinks for you or that happens naturally?
The answer is yes, we do. I think that a lot of businesses should have that. You have to think about what is a backlink. A lot of people may be thinking, a backlink in their head is me writing a blog and then putting it on somebody else’s website. That very much so could be a backlink, but this conversation that we’re having is considered a backlink because I’m sure you’re going to be posting the website somehow some way on some platform. That platform is going to be broadcasted by multiple other platforms. That’s the way podcasts work, so I get that. That’s a ton of backlinks that you’re receiving. We definitely have somebody that does backlinks and their sole job is to find credible websites, credible people. At the end of the day, it’s all about reach.Without any traumatic experience, people, including yourself, may still hold on to what was once making it harder to move forward. Click To Tweet
We’ve figured this out early on is it doesn’t matter if you have 100 people that read this. Its 100 more people that you didn’t have before. You don’t have to go for the home runs and you don’t have to ask for the Tim Ferriss podcast that gets millions of downloads an episode or like the Joe Rogan’s of the world. You can go on relatively smaller podcasts. No offense, I don’t know how big your audience is, but I don’t know if it’s getting a million. I hope it is, but there’s a strong chance that it may not. With that said, I think that we are at the approach and the mindset that every person that you talk to is an opportunity. Whether that’s through an email or through sharing a story through the podcast is an opportunity to share the story and get in front of their audience. That to us makes all the difference.
Let’s go back to backlinks. Readers, maybe you’ve never understood the mechanics of podcasting. When this show is over, this gets sent to my producer. My producer then builds the show page, which I’ve been directing you to throughout the show and every word we said is on that show page which creates keywords. My podcast page has well over 200 keywords in the top ten on Google all because of the podcast. Here it gets even better. Because of the show being on my page, Johnathan’s company is going to get a backlink and then when it publishes, I’m going to send him custom artwork and he’s going to put it on his website and I have a backlink. All of these pieces built and it builds over time and no one can accomplish anything meaningful in SEO, I think in under 90 days unless you’re going to be on television or something.
You need at least six months to a year in order to figure it out. If you want to get a good idea of the content generation of how we do it, you can go on our blog page and you’ll see that we literally post at least once a day. This is good stuff too. This isn’t just us trying to find keywords. We’re writing good stuff based off of statistics, number crunching and things like that. We’re writing for a purpose and we’re writing it with the end-user in mind. Every business that’s reading may not be able to do that, but you have to think about what your goals are as a company. Whatever the goal is, then create a plan based off of that goal. For us, we don’t want us to be some type of run of the mill small business that once was our digital marketing agency. We want this to grow and be able to have hundreds of thousands of users on our platform. You can do that by using conventional means of marketing. It takes a lot of hard conversations and sweat equity and a lot of failures and figuring it out in order to get there.
Let’s talk more about internal infrastructure because I know people are interested. When you first start out, you got an email and you got some design software. As you grow, you need some form of project management software and then you need project management to communicate with the sales and marketing people so they know what’s going on with every client. Tell us about the progression. What did you start with and where are you now?
I can give you everything that we use because it’s fairly simple. This answer is going to disappoint every person that is reading this. When we first started our first ten plus customers or I’d say under 75, we used Trello. We had no software. Penji is an online platform. Mind you that you go sign up for Penji and you literally tell us what you want on Penji and then we design it for you through Adobe and other various forms of graphic design tools and it’s delivered to you on Penji. You can do all the communication, downloads and all the submissions directly on Penji. How did we get to that point?
We started a large base of taking orders through email. “Pay us this amount of dollars. What do you want?” “I want a graphic for my real estate business.” It goes through email. We were like, “This isn’t working because this email is a pain in the butt.” We need to go through Trello. After we hit a certain milestone, we realized that this isn’t going to scale the right way. We need our own platform. We developed our own platform that took over a year in order to create that. We’re three months into the actual creation of the business and we have the platform, but we’ve been doing it so many months and almost a year prior to Penji being released to the public.
Where we’re at, we use Penji as a primary source of production because that’s the tool that we created. We use Slack to communicate. We do use Trello, but just for internal communication. If a project needs to be done, this blog needs to be written, we’ll use Trello. We use Snov.io for lead capturing. You can get leads and particular client base that you are looking for and it’s a relatively inexpensive tool. We use Crowdcast in order to do all of our webinars, all of our Facebook Lives and our podcasts that we run. We use Simplecast and we use Mailshake and Mailchimp too.
That’s not disappointing at all. That’s clear and very valuable to know about someone who’s managing a multimillion-dollar company and the tools that they use. Thank you for sharing. I appreciate that. Let’s talk a little bit about designing an internal flow. You put a lot of effort and time into your website and the backend has to be very customized and powerful to deal with the clients and the way you do that. Clearly, that was the route you chose to take because it was the best route, not the cheapest or the most efficient.
Definitely, it wasn’t the cheapest and efficient.
The point is that you took the time and effort to do this because you had a vision and you are going to scale that vision. You knew what you needed to do to do it. When does an entrepreneur make that decision? Where do you have to get to first before they say, “We’re going to invest right now?”
I would say when you know that you’re in over your head at the level of at maximum stress is when you need to do this. Here’s the biggest problem that I have with entrepreneurship and it bothers me that there are businesses out there that are like, “I know that this is a problem. I know that I need to fix this. I need $1 million in order to build it.” You don’t even know that this is going to help people, so how can you say that you need this type of money without ever trying to make it work yourself? We’ve put ourselves through so much stress and so much pain that once we hit that point, then we realized that we needed to do this. It’s not the perfect answer for everybody, but it was the right answer for us. We looked at ourselves and we’re like, “We can’t do this anymore using the system. We can but we’re going to destroy ourselves, the brand, our reputation.” What is it? Do we just invest a lot of money in resources and time to build this ourselves because that’s the right way to do it or do we continue using this software that are only going to patch minor holes?
You are probably a lot like most of us, we wait until we’re pushed to the nth degree before we decide to make a decision on infrastructure, but there is another way. I want to mention it because I want the readers to understand that if you have a vision and if you are confident that you are going to take your company in particular direction and you know what the potential is for your company’s growth. My answer is to invest early before you get to the point where you talked about pulling your hair out and stressed to the nth degree. To me, it does take some vision and a true belief in what you’re doing. It’s a huge risk. If you’re going to do it, understand you might be investing tens of hundreds of thousands of dollars before you even have that much revenue coming in and it will still be worth it if you truly believe that it’s in your future that way.Communication is the biggest part of why some businesses fail and some relationships fade away. Click To Tweet
I think that’s a great point. It is a huge risk. I remember the conversation very vividly that we had, it was more so like a make or break moment. This investment is going to either make us or break us, but we were willing to make that leap. We’re happy that we did because that is the core differentiator of how we’re able to scale faster than a large majority of our competition because of the technology that we’ve created.
This is the part of the show where we dive a little deeper into who you are and I do that with a particular question. This question I think helps me understand you better by understanding who you admire. Who in all of space and time, would you like to have one hour to enjoy a walk in the park, a quick lunch or an intense conversation with?
The first person that I would say come to my mind doesn’t involve business at all. It’s Anthony Bourdain. I’m sure that might be a popular answer, but the things that man believed in, the things that he values most is family, food and experience. To be able to speak to him about theology, life and the universe, those conversations are so incredibly important. Do you mind if I give maybe a couple of other people too or do you just want one?
No, tell me. If you’re making a point and you want to name some other people, I’d love to know who you think of in the same light.
In order for people to understand the type of person that I am. I do think it does require multiple answers. I have a huge passion for wine and food. I think food is fuel. I don’t have many things in life. I don’t care about cars. In fact, I don’t like cars at all. I could go without it. I don’t have valuable things. I don’t have expensive things at all, but I’ll spend all of my money on a great experience for food. To me, that’s why I choose Anthony Bourdain. From a curiosity perspective, it would be Steve Wozniak because he was the engineer and true architect that built Apple to what it is. He laid that foundation to engineer and systematize everything that has happened in the life of what Apple is. From a creative standpoint that I would probably want to talk to Ed Catmull, which is one of the founders and president of Pixar Animations. That individual is the more so as the creative side that you need that balance of experience, creativity and systems. That would be the well-roundedness of the people that I would want to probably associate myself with.
Those are great answers. You’re right. I like the fact that the three people you named give you more dimensions to me and I liked that you brought that up. I’m going to give you a challenge. I want you to find somebody that you would like to name on space and time question I asked you that’s still alive. I’d like you to reach out to that person and see if you can literally take them to lunch or have a phone conversation. Do it now. They’re going to die and then you’re going to miss out. This has changed my life in so many ways and I still do that.
I’ll give you an example. I read a book called The Plant Paradox and it’s by Dr. Steven Gundry. He’s a megastar when it comes to what he does. After I read the book, I was so challenged by the fact that it’s one of those turns you on your head of books. I said, “I’ve got to talk to this guy.” I called his office and I asked directly to speak with him. I said, “I’d like to interview him for my show and I have a lot of questions.” The bottom line is because I asked, I ended up in a deep hour and a half conversation with him that turned out to be a great episode and incredibly educational for me. I want to challenge you to do that. Promise me that you’ll pick somebody and reach out and just have that conversation and then let me know how that went. How’s that?
That sounds fair. I’ll add onto that. I use the reminders app on my Mac and I use it religiously. I have a section that says, “People to meet.” I send an email to Steve Wozniak and to all other people that I have on my list probably once a month. Just asking them because I have a podcast too, “Could I get you on my show? Could I pick your brain and sit down with you?” You’re with the right person when it comes to accountability. I do appreciate that challenge and the challenge is accepted.
Thank you. I am thrilled that you said yes. I love the fact that you have a list. I do, too. I have so far gotten about 50% of the people on my list to be on my show, so just keep it up.
To put it in one more because I think accountability is important. John Lasseter is also a part of Pixar. John Lasseter is another mind. The reason why I want to add it is it’s another accountability piece that we could always look back to in several years.
Here’s the grand finale, the change the world question. What is it that you are doing or would like to do that truly has the potential to literally change the world?
I think that’s the ongoing theme that everybody shall know when it comes to this conversation. Everything that I say isn’t sexy, but it’s practical. I genuinely believe in the reason why I wake up every day and the reason that I talk so passionately about Penji is because what we are doing is legitimately changing the world. We are disrupting the entire design industry. We’re making people think. We are completely changing how graphic design is being thought about. Gone are the days that you have to hire an internal person in order to get the designs that you need. Gone are the days that you have to spend hours upon hours freelancing. To me, Penji is the game changer to graphic design. What I’m most proud of is that this is just the infancy of what it is. There are multiple things that we have on the horizon that are going to make the service and the products even better. As we continue to grow and learn, we’re going to be able to help more people. At the end of the day, that’s all that matters.
It’s a great mission and I love what you’re doing. I will at some point probably be a client as well. Johnathan, thank you so much for the time we’ve spent together. For me, it’s my joy to be with intelligent and successful people. That’s how I learn. Thank you for that. I appreciate our time together and I can’t wait until we get a chance to talk again soon.
Resources Mentioned in This Episode:
- Johnathan Grzybowski
- The Plant Paradox
- Dr. Steven Gundry – Previous episode
- Steve Wozniak
- Ed Catmull
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