The Marketing Experience Podcast by GrooveDigital – Episode 2

hello GrooveMike Filsaime here welcome to the GrooveDigital presents podcast uh hereas always on my left Matt Serralta my partner andco-founder of Groove as well on my far right John Cornettaand today’s special guest is the legendary one and only Rich Schefren and Rich was actually my my business coach i believeit was 2005 and 2006 and yeah and so on and soon so today we’re going to be talking aboutuh scaling a company so one of the things uh uhRich is coming out with something very very soon it’s top secret right now butit’s going to be it’s going to be on scaling and we’regoing to go into a couple of the the things today butuh what we were talking about Rich well first let’s let’s uhfor people that don’t know you uh give them a little background about it yeahso i guess uh without going into my whole life storybecause i you know that could consume the whole podcastum i did some things offline uh i was in the clothing business and musicbusiness and the hypnosis business did well in those businesses got onlinestruggled and um i got i struggled because i kindof thought the online business was different thanevery other kind of business and when i realized after two years of strugglingthat uh no online businesses are run the sameway you would run an offline business obviously some ofthe elements are different but the way you run it is the sameuh everything started to change for me and so as things started to change forme the people i knew asked for help i helped them i kind of liked helpingthem and so then i wanted to try coachingand i guess the rest is history from there i coacheda group of people well yeah you’re also you’re going to be modest but you’reknown as the guru to the gurus right so uh as well as me you you’ve had somesome of the what we would call you know the you knowthe original you know uh like babe ruth and the theyankees of right uh lou gehrig and mickey mantle gothrough your coaching program yeah in internet marketing and then also alot of niches that people don’t know um i’ve coached a lot of gurus in butyou know i guess i’m best known for the gurus that i coach in internet marketingeveryone from you to ryan dice to russell brunsonto todd brown jeff walker like all those types of peopleyeah and when when i first started with you Rich i was ai was a closet warrior at that time i was workingone-man show working from home and you know one of the first calls that we hadyou know was like you know uh you need to run this like a business and i pushedback a little bit from the beginning i was likei don’t i don’t want i just left the car business the thought of an office andemployees was was really like scary to me i reallylike this idea of working upstairs in my bedroom uh and then you you know youhad that very famous mind map probably right you diagram yeahthe u diagram and uh that’s what i really resonated with wheni saw you speaking at stephen pierce’s event there was like a diagram and itsaid you and then it had like a spoke of likeevery single department and then like all these different things and it justliterally scared the hell out of you like every single thing on that diagramneeds to get done and i’m like okay this is this is notgoing to be fun and i was doing many of those thingsyeah and realizing i’m not going to be able toto continue to grow so from there i ended up getting an office hiring somepeople and you know as they say there the rest is history yeahuh and i think i think that was the the the big thing that i got from youwhat do you think what do you think the other people thatwent through your program what were some of the most important takeaways thatthey had and problems that they were having thatthat you noticed was a common theme um well you know it’s interestingbecause i would say that some of it is well let me take a step back for asecond what i would say is is that the firstthing and i talk about this quite a bit these days because uh so many of thethings that i’ve taught people i feel have kind of they’re out therenow right like you know back in 2004 when iwas introducing like process mapping people hadn’t seen that before rightyeah nobody knew what a process map was right and uh or blue ocean strategy orthese kinds of things so all those things have kind of gone outinto the world so um but there’s one constraint there’sconstraints there’s another one right and but there’s this one area that idon’t think uh very many entrepreneurs do i think bothof you guys do i get this i don’t know John as well as iknow you Mike but i get the sense that John’s probably even better at thisthan you are or maybe even than i am although i’m pretty good at itum and that is is that most entrepreneurs make the mistake ofbuilding a business like for some mythical entrepreneur thatthey hope to be one day as opposed to recognizing who they really areand making the business work based on who they are right not who theywho they would like to be so you know that yeah no i agree on that John knowswho he is yeah already yeah i don’t know like very clear right likeif this is going to work for me or this is not going to work for meand you know it’s like i’m not like two examples ioften give people is like one i’m not money motivated but a businesshas to be money motivated or it’s going to be out of business and sorecognizing that like i have to design my business in a waywhere the person in charge is not money motivated but yet the business still ismoney motivated and i did that by doing like very aggressive profit sharing paidthe month after like you know was paid monthly and myteam got the financials every week and they were strategizing like how arethey going to max my sales this month so that they get a big bonus next monthright and so every friday i didn’t even go tothose meetings but they were like you know if there was a big jv coming uplike can we do a bonus package like they’re busy figuringit all out and um and so that worked really well andthen the other thing is that i’m a perf i procrastinate and then i’m aperfectionist and partly the reason i procrastinate isbecause i’m a perfectionist like no matter when i start a project that’s notgoing to be finished until five minutes before it’s due andso because of that like i could think that like one day i’m gonna build acompany and the company’s not gonna it you knowi need to be just be different in order for the company to succeed we’ve got tomake our courses in advance or whatever andinstead it was like no this is who i am and if i got to figure out how thiscompany can be successful with someone like me who can’t finish somethinguntil it’s absolutely necessary and so that like dictated my modelof writing a free report that like talked about an upcoming coachingprogram then sold that coaching program thendelivered that coaching program and then only when i was done delivering thecoaching program did i have a product because you know it’s a lot differentlike oh i’m gonna have module one done by friday versus i’m gonna have a modulei’m done by friday because i’ve got a couple million dollarsof people waiting for it and if i don’t have it done by fridayi’m going to be screwed right so that external pressure was very necessary soi’d say like one of the biggest things i teach peoplethat like back from your time as well as even today uhbecause for whatever reason it hasn’t really been absorbed by the marketplaceis there so many new people coming in yeah it’s just the idea of likeyeah where’s your weakness and how do you design a business so that that’sirrelevant everyone kind of gets now that youshould design a business around your strengthsbut they don’t realize that you also have to design the business around yourweaknesses and you know one of the biggest uh hintsof that is that when i’m talking to a any entrepreneurthat if they tell me like i feel like i’mdisappointing my business i’m not doing the job like i need to be doingmore often than not it’s because they didn’t design the business rightbased on who they are they tried to design the business based on who theythought an entrepreneur is not them yeah what is the name of that theoryreal quick isn’t there a theory called that it’s italianafternoon every time where the amount of pareto principlethat’s the 80 20 rule yeah yeah well no then there’s another one it’s wherethe work given or the work that you have will expectthat’s it well it will expand to the amount of time if you give yourself anhour or you give yourself five days it will get done in an hour it will getdone in five days it’s just that simple yeah i’ve neverhad the thing of finishing something five days early and be likethis is done never like i i just keep working on it likei don’t have the ability like even when i showed you the manifesto right you’relike release it i’m like yeah yeah ready there’s actually been studies about thatright that um they give a group of people two days to do a very complextask like eight people in a room and what in two days they can get donewhat they get a better job what they gave people uh 60days to do yeah i’ll tell you what i do just i don’t this is something i justkind of come up with is i will give myselfa false deadline for something and then what i’ve been doingwith the last eight or nine years is i’ve been game like using gamificationright and so like i’ll have a like a trip to the keysor i’ll have something and i’ll say i’m only allowed to do thatif i get it done on this date and the date is always well before i think i canget it done and for some reason that kind ofmotivates me to say i got that done i can check that box we’re allowed to goto the keys for three days i wish that worked for me i’m more likeRich it’s like the true motivation is [ __ ] i’m on stage in two days i haven’teven started my first slide yeah i i i remember in tampa the nightbefore you said i haven’t started my slide yet i’m likealso the difference is whenever you put a date to something then it becomes agoal and children it’s an idea right so iwant to build a car versus i want to build a car by fridays and that becomesa goal right yeah that makes a huge differencein your dedication to the task i think i think for meprobably the most important thing and i think it’s the same way with you Richis is accountability trumps the date because if uhif you know you have you have a coaching program yeah and you know you have 150students starting on monday like the slide’s got to be there or ifyou’re at an event or you’re speaking you’re on a webinar likethat accountability and and so uh same thing with like walking and you knowdifferent types of things it’s like i know uh back in the dayif i had a training partner or a or a coach that was cominga fitness coach or a trainer coming to me you feel accountableyeah the account yeah and even even in eating because like you know if he’sgonna be coming in tomorrow and and putting me on a scale that i’m likeoh man i you know he was pissed at me last week because i gained a pound andso i think accountability it’s so easy to disappoint yourselfyeah in that sense two thoughts that like about this um onelike what you said reminded me of a book it’s um the now habit by neil fiore andit’s a book about procrastination and his whole thing aboutprocrastination was that uh people procrastinate because theylook at their work and they look at that as like being the next thing for a longperiod of time there’s nothing to look forward toso like why start because like now you’ve got this long grind rightso he his counter-intuitive idea was you build the schedule of just fun things todo that’s the only thing you put on your scheduleum and you fit work in like but you have to have fun stuff on your scheduleor like you have no incentive so like the whole idea is that the only thingthat goes on your schedule is fun stuff and then you try and work in like whereyou put the uh where you put the stuff and there’s somelegitimacy to that maybe you know you can take that to an extremeand then on the on the uh like eat that frog right yeah just the opposite yeahjust the opposite and uh then i read this quote and youknow for me i i believe it’s true unfortunatelyum that perfectionism this is this was aquote perfectionism is trying to get the world to believesomething about you that you don’t believe about youright like so that like and there’s this underlyinglike i think but behind the surface for me like i need to seem smart i need toseem like i’m well read right like all this kind of stuffand for whatever reason like that’s important to me like that equates withhow i do something is how is my value not necessarily who i amand so that drives that like until it’s perfect i don’t want to put it outbecause it’s a reflection of me right like of my worth which is notright it’s not really the right way to look at itand why like i think i’ve always found it a lot easier to growevery other business i’ve been in where i was not the product because whenyou’re the product right like now you have both sides of the brainthe right business decision and then the insecure creator that’slike well wait a second it’s not ready like like it could be better yeahso i want to i want to shift now to uh what you’re focusing on now and that’sthat’s uh scaling and you’ve been over at uh my place a coupleof times with whiteboard and i’m really excited about whatwhat you have to you know to be talking about in the futureand in the next 45 minutes here i want to try to condense some of the bigpoints so first first off uh you were talking aboutuh the journey and the distinction between uh a hustler and an entrepreneuruh talk talk about that i’m just slurred to all the way to a founder you’re ahustler founder yeah actually also the founder well i mean you know i thinkhustler is really the best way to start to really talk about the beginning of abusiness because most businesses begin by the entrepreneur doing some kind ofhustling like i think even even in our industry idon’t even know if it qualifies as a hustler yet you let me know it’s kind oflike a dreamer before the hospital yeah rightyeah there’s a dream the dreamer is i want to make money online i don’t knowhow but i have to you know i’m seeing everybody else do itand then then there are people that um it’s like uhso what are you doing i’m making about 20 grand a month what are you doingi bought a cost on affiliate marketing and i did a course on shopify andand i’ve got a little bit of a list that i do some emails too but they they don’thave any type of business in fact if you were to say that say to themwhere are you going to be a year from now they’d be likelike just hustling more you know that was me that was me that was me for sevenor eight years in this business yeah i made a lot of moneyyeah but i realized at one point that’s a hustler as soon as i stoppedyeah i did right for six or seven years i hustled i sold traffic i saw sneakersi sold anything and i realized well wait a minute theminute i stopped it stops yeah and that’s not a business and howdo you sell it and uh like affiliate marketing is is very attractive and ithink i think it’s a great way to start forfor uh for people because it’s like hey flipthe script don’t worry about support and building the business andall that go conquer traffic somebody else already did all the work they didall the offers you could you could figure out how thisworks and then what you realize is okay i’m getting only 50 of theseefforts you also don’t have all the overhead and everything like thatonce you figure out the traffic then it’s like okay now i have a skill that icould probably one of the most importantskills in uh in growing a business is being able to understand uh the metricsof getting traffic right yeah i would agree with that and i wouldalso say that while affiliate is one way it really is about like any easy way tokind of get your feet wet you know like i back in the old days oldold days right like the creating like an e-book and aone-page website right before the invention of blogs before the inventionof youtube for videos yeah like um you know i did that and i’mwhile you know i make no money from all those things i did back thenuh that’s what taught me internet marketing and i don’t know that i wouldhave felt comfortable doing everything else lateron had i not like started with some basic stuff to be like oh i get it thisis how this works yeah this is how that works this is what thismeans right like so i’m not asking who’s earlright like that’s the famous like you know when you write urland you’re girls you keep talking about this exactly um yeah so that’s i would say uhbut you could be as John was saying like you can make a lot of money hustling ifyou’re good at it and i get the sense that you’re good athim and yeah so that’s another way that you remind me of my dad because my dadwas also a hustler made a lot of money right but like atthe end of the day it was always like dealsjust deals and he had a business but the business was really just so that hecould do deals right like the business support like his infrastructurekind of was like a break even business but then the deal flow washow he made his money but when he didn’t work there was no money right so he madesome big scores but um yeah he didn’t uhmoney wasn’t working on his behalf yeah that’s key because ii did both ways like my previous line of work prior to internet marketingit was a real business 300 employees in the whole nine yards and legaldepartments and then when i went into marketing when iwent to internet marketing i wanted none of thati didn’t want any of that so i was like Mike i’m sitting at home and in fact iremember the phone call from Mike i’m sitting in my garage working he’s likego get an office drive 15 minutes to the work you know andand i did and the first time i hate it i’m like nah i want my toes in the inthe pool my kid nearby but the truth is i can do that rightwhile i’m hustling and if i want to build a real businessyou can’t do that right you can’t build a real companyonline or offline sitting with your toes in the pool it’s nice to stop and soundthat way and yes you can build a hustle that way but somethingreal that lasts beyond you or beyond a medical emergency or beyond a vacationyeah i don’t think you can and i think i think Matt you canidentify with this because you know you know Matt’s actually the you knowthe backbone of the first product you know uh Matthad had the the vision in the product GrooveKart uh at that time it was called ultra fun shopping it was something elsebefore that too yeah yeah and uh right easy store yeahand so you know Matt already had a vision i think ithink that’s where you start going from uh hustler and you know we call itinfopreneur passion project uh experts and that’s where basically tobecome a founder at a certain point you have to say okayi i have to take some type of knowledge of somethingof some passion and some expertise and an understanding of that marketplace andat least come to the table and say this is this is my vision and i want to iwant to build a company from there go ahead i i think a great example ofwhat you were saying earlier it’s easy to understand your strengths sometimebut you don’t realize your weakness and building the business around yourwitness my particular case if there’s one thingi knew i was struggling with was marketingand hence that’s how i met John really thinking some help fromfor marketing and as well meeting Mike right seeking help is marketing i havean idea i really didn’t know how to bring it tomarket so at least i was lucky enough to identify that about myself is i ii wasn’t strong in marketing whatsoever i wonder like and i don’t know if thisis true but like because i’m just thinkinglike the thought out loud um but maybe John you would knowlike i get when i think of the times that i hustled in my life they were muchmore opportunity driven like i saw a spotlike i could do i could get this here and i could sell itthere for that much right like even when i was 13madison square garden like i used to go and get online forconcerts like two days or a day before they went on saleand all the other so i’d be standing at the very front of the line and a lot ofthe people at the front of the line all were not buying the maximum ticketsthey could buy and so like me and a partner of mine like wheni was 13 to 15 we would we would ask all the people around uslike are you buying the maximum tickets and if they said no we’re likewe’ll buy your tickets for you if you’ll buy the maximum and so we’d endlike you know after we finished we’d end with like you know it’s RichRich started stubhub yeah like we ended up with like 100 likeyou know front section seats and then i’d sell them to a ticket broker andmake our money but that’s an opportunity likei wasn’t solving a problem i think like i wonder if it’s truebecause like i said i haven’t thought about it like opportunity it’s likehustling is much more about like spotting an opportunity and seizing itwhereas like a business is more about likea prospect and a problem and solving it oh 100 100i think John and and Matt will agree with me on thisum we have been those guys our entire life what you just said aboutabout um i think we’re getting every little thing i’m like damn he’s rightin a way we we have some very good traits ofseeing opportunities and exploiting them for lack of a better termthat while we were building this this company this this company and the visionand direction it was going had had enough foryou know just hey just do this and you’ll be all set andit’s very very hard for us to uh we we’ve gotten disciplined and we’velearned to start saying no to different things withwith extreme discipline because in the early days for instanceyou remember we were we were talking opportunities we were talking tosomebody about traffic and he was like heyi’ve got this idea about basically like kids gamingsite where the kids get ranked and they get hired bybasically like a a like a e gaming sports like uh thing that he wasbuilding and he was like if you guys want to partner and we wouldstart getting all excited which which might work out half hour and wewere like you know i i remember saying we can’t do this and i remember man i’dsay no no but maybe look how big the industry is right andso and that was like something that hadnothing to do even with our brand and then when it comes toyou know to to our own brand that was opportunity seeking we havewe have so many so much deal flow right that comes to us that i’ll giveyou an example there may be somebody that uh that isreally good at live uh live event workshops rightand extremely good at delivering value right so it might seem thatwe have people coming into Groove that are going to be paying somebody else forthat right that hey we should we shouldput we should do that with that person and then we go meet with themwe start putting these things up but what we start realizing isit’s not just a great idea that can that a business should have and we should dothat it’s it’s the phone call the pages have to get done right we haveto meet and then all of these things startstart bleeding and you start realizing we’ve bitten off maybe more than we cantreat you and some of this stuff has to wait yeahand it’s also like there’s a diffusion of focus rightand um and at the end of the day and this islike i would say that this is not probably something that we can coveron this podcast but it’s probably worth a conversation that we have like off airat some point um you know at the end of the bad guystoo bad no no it’s just that well there’ssomething in like for michael porter right michael porter uh was a harvardprofessor well business school harvard businessschool professor he’s probably the most well-knownas it relates to overall strategy right like he put kindof competitive advantage he kind of defined that termand and strategy and there’s he’s got a bunch of different modelslike the five forces model and whatever but that’s not what i’m brwhy i’m bringing him up he also has this concept called um activity mappingright and when you look at like the activity map and this isthis is what we could do off air at some time but an activity maplike is the core activities of the businessthat allow it to execute its strategy in a waywhere others will find it very difficult to compete so when you look at likesouthwest airlines for example right um when you look at their activity maptheir activity map like has like you know the core elements likeyou know low prices you know etc right but thenwhat allows them to do that are like 20 otheractivities right and all those activities are interconnectedand the more activities that are interconnected that create your likecompetitive like advantage the more difficult it would be for anyone else tocopy it right and so at the end of the day like you to buildGroove out you want to be known for somethingwhatever that specific thing is like you’re the company thatwhatever and then whatever that is right like then your business model needs tobe kind of aligned so that you’re able to do something as itrelates to that that other people would have to sacrificesome part of their business in order to do that you knowlike the big airlines tried to compete with southwest but they couldn’t becauselike at the end of the day they like they you know they have tomake the union separate they’d have to make everything separate rightyeah southwest went south west went to all the suburbs right uhoriginally so like if there was you know umum ronald reagan airport they they went to uhbiwi right you know like like they they they went to long island which is areally big market and they took the small islip airportand they built a huge hub instead of attacking jfk and laguardia so theyended up going into all of the suburbs uhlike you know chicago uh midway instead of o’hare and alland so again like some of these things you can’t just say oh wellwe’ll just attack the suburbs and that was just one thing that was integratedyeah i mean the the whole point of having a strategy in general is isthat you’re like is what you’re gonna say no tolike that’s the whole point of having a strategy is that there are many morethings that you have to say no to than you say yes toright and so what are those few things right and i think some guy just wrote abook i forget the guy’s name i haven’t read it but i love the titleuh it’s hell yes or hell no right like life like you know yourbusiness should be like it’s either a hell yesand if it’s not a hell yeah it’s a definite no the book title here willrespond to me all the time Matt bassack is oneof his favorite sayings yeah he’s not a hell yes and it’s hellno yeah and so buddy i thought he came up with thatyeah no like it’s just famous i didn’t come up with it eitherbut it’s a famous saying and i agree with that and solike when you’re building out the company and that’s why i recommendedthat book to you this past weekend um lean enterprisebecause they have something there that i hadn’t seen before that ithink would be useful for you guys as it relates to what we’re talking about hereand there’s a metric called cost of the way and costcost of the way no cost of delay delay okay as a way of prioritizing like whichprojects need to happen sooner rather than later and the cost ofdelay relates back to your your value proposition and how muchyou’re sacrificing in sales based on not having that element as partof your value proposition as opposed to like so it’s very customerfocused uh and customer getting focused as faras the delay of these like parts of this new application thatwe’re going to roll out or new features we’re going to roll outlike which one should come first second or thirdit’s based on you know which ones actually would help us sell better andacquire more customers at a lower cost per acquisitionand that becomes the driving metric and then everything gets rated on a cost ofdelay like so that you’re delaying the leastcostly software i think i showed it to you onceum the guys over at funnel lytics use it sowhat’s that michael yeah yeah mikhail yeah so uh i had a call with him and wewere talking about how we’d use this software called canny for you know forcommunity uh driven feedback and then how everythingautomatically hooks into trello and you knowi was showing him this and right pretty impressive like what we’re doing and heshowed me this software and basically it’s very very similar but what happensis as soon as something comes in whetherit’s a bug or it’s a feature request or or a big ideafrom the user from us six months away whatever the case isyou go in and you rate it on like eight different thingswhat what is the cost what is the number of developers umuh what does this mean to the user will it help us make more sales andall of these things like create a matrix yeahyeah exactly then you have this you know xy chartand then basically what happens is you want everything up in the top leftyeah you want to have every i’ll just do it here you want everything up in thetop left right yeah i don’t need the board you wanteverything in the top left because that’s that means we get it tothe market sooner it costs less least amount of developersit’s gonna it’s gonna make the users happier it’s gonna make us more moneyand then there’s other things where you’re like hey whatever happened withthat idea that you know i came up with the thing is is like we need threedevelopers for that it’s going to take six months to donobody’s asking for it and if we put a bullet point on our page that we’redoing that it’s not going to get us any more salesat the front end and so so it’s unfortunately some of those things maynever get done because you’re only it’s kind of like um paletto theorythat’s exactly what you mentioned earlieryeah what is the least amount of work for the most results yeah what’s thatthing with urgent importance yeah that’s support yeah yeah so it’skind of like one of those things you only want to be working in that onethat one quadrant and until any of those other items make it therethey’re you know they’ll they’ll get they’ll get done in three years ifthere’s nothing else to get done yeah and like that’s that’s a differentway of working than what i’m talking aboutum but i’ve done that as well the cost of delay is a little more complexum i can’t describe but it’s more about opportunityyeah you know but it’s more tied into your value proposition as opposed tothese other elements but like when i first launched strategic profits iremember me and my assistant dan more my right-hand guy really not myassistant he didn’t carry my bags and um yeah yeah um welike we were trying to figure out like what to do right like when i was gonnai had this 11 week period that was coming up i wasn’t gonna be making anymoney like when i wrote the manifesto andthe and so we put up on the wall like five or six different projects that wewere considering and then we created like a grid and weranked each one like you know uh let’s say we had fivefive would be the best one would be the worst so that this way we could add themup and see which score and then was there anything that wasworth double and we looked at like certainty of bringing in money like youknow that it was going to bring in some money right likeyou know time amount of effort till money comes inright you know like six different elements that we were looking atand um and i one of them i remember we waited double so we times that by twoand then like the coaching program became the theanswer that we chose but it was because like okaythere’s all this criteria and we don’t know how to make the best decisionthe other thing though i just want to circle back to something you saidearlier because i got this tip years ago from tellman knutson anotherguy coached a long time ago um that i always stuck with me becausemaybe because i have add and it was an addsuggestion um he said to me like i was talking to himi was talking to him and at this point he was just starting his addbusiness because he was an internet guru then he was an add thing andhe’s done a bunch of things and um yeah what do you teach people like for theatd stuff right i’m in i have adb i’m interested right and he’s like i’llgive you an example um you know how you want to jump i’llgive you an example oh wait well yeah sorry i’ll show you this instead ofjoking um brad whenever you see something likethat i think a bread fountain um shout out to brett yeahsquirrel um uh now i’m gonna forget what i wastalking about uh yeah uh so tell them you know how youwanna jump from project to project and i’m like yeah that’s what i like doingright and he’s like well you know you canleverage that in add if you just take your projectsand then break them out into lots of sub-projects then you can jump fromsub-project to sub-project but you’re stilladvancing the same project that’s a great idea yeah like that’syou know and so it’s kind of the same thing i think withnot always but in development and stuff like that there arecan you break it up into smaller chunks and then get stuff likevalidated not validated like you know are certain ones more interesting andmore compelling to your users like those kinds of things and i think uhi think those there’s always gonna obviously there’s always gonna be somany more things that you could do than you can doand making those choices really determines the direction of thecompany so it’s not something to be taken lightlya side note just to let you know um word manifesto or manifesto word dot comfor anything since you wrote that is goneokay i tried like ecom manifesto and selling shirts manifestotraffic man it’s all gone so yeah you kind of cornered that oncesomebody went out and must have done every single manifesto there was andlike Rich had some success with the internetmanifesto and it’s kind of that’s that was the secretthing that was it yeah i uh well what happened was i was reading umi was reading a book by ann ran um and uh she wrote a book on how to writefiction or know how to write non-fiction sorryand uh somewhere in that like 120 page book on writing itwas an essay is to try and convince peopleum manifesto is to try and inspire actionand i was like oh that’s kind of cool i’m gonna use that word like you knowthat was like that’s where it came from and thenbecause it worked so well then i wanted to come up with otherother names of documents that sound important uh so that’s why there was theattention age doctrine yeah yeah like you know there was manifestothere’s doctrine like you know that kind of stuff what’s the one uhthat you had uh like hundreds of thousands of views uhon youtube you had a video that just uh took offyeah well i have yeah so the the video that i’ve gottenthe very most amount of uh traffic views no longer around becausewell i think it might be on youtube i’m not sure but it was on google videoright like and it made the top 100 a 90 minute video on business was in the top100 of videos like online which is kind ofcrazy nice yeah um but that was my presentation that i didat big seminar like so it was the you diagram and allthat but the so what’s interesting thoughand i like with the coaching but i think it applies to everything i’ve doneis that like to walk someone through this is like okay ithought about being a coach right then i actually coached a few of my friends andi enjoyed it then i decided like okay this is good umi want to do a coaching program so okay so what’slike the minimum viable thing there well i’m not going to create the programfirst but i want to figure out a way to sell it right like and so i hada presentation that i had done like the year before with abraham andthat was well received so i did that presentation jay abraham yeahabraham and i i then did it by application onlyright and the reason i did it by application only was because i wasafraid there would be no table rush and i’d be embarrassedso i had to apply and so stay in your seat and just fill out the applicationand uh and i had like you know 14 you know what’s funny is like like it’llwork so well and everybody’s like hey how did you come up with it yeah yeahand like everything was like just to be saferight and everyone like thought otherwiseuh but strategically yeah so then i like i you know and i made a compelling offerlike we would call that like a mafia offer likeyou know it’s very hard to refuse um and that was like you’ll double you theamount you make you’ll cut your work hours in half so like for extramoney or you’ll get your money back and the and so that got more people to applythen i selected the few people that i felt i could deliver that on like so iselected 25 of the 40 whatever and then i worked with them to createthe product right and by delivering it and getting theresult and in the application right there was aquestion like at what point in the presentation did you decideyou needed to apply for this program and 95said the u diagram so when it was time 10 to promotewe’re going to put that u diagram on the screen uh right now while we’re we’retalking it’ll make sense when it was time to promote the programlike to write something it was obvious to me what i was gonna write because theu diagram is what everyone told me made them want to buy it sothat’s why like on the internet business manifesto the u diagram is the coverand there’s a whole section leading people to itbut so that you know i’ve done that model likenumerous times where i speak about somethingand get a gauge of whether like could i sell like if there was a pitch cominglike would i be excited to get to the pitch or would i be nervous to get tothe pitch if i would be nervous then i don’t have the right topic if iwould be excited based on what i’m getting from the audienceokay i’m on to something right so that’s like you even did that onlineuh at a point where you had people go all the way through a process when theyhit the add to cart button it said yeah you basically said that hey we’reyou know we’re yeah but we used to dry test like when i went from likedoing individual ebooks to coming to the realization that you hadJohn because that’s what happened to me like the reason ilike wasted the first two years i was online is because i had to close myhypnosis centers after 9 11 and i had like payroll that was insane idon’t even remember the number but every two weeks working my ass offto just make payroll and then watch the bank accounts go downby six figures and then have to do it again for twoweeks was like a grind and so when i got offline and went online i was like nono employees no employees right like this is gonna be great it’s just gonnabe about my marketing chops and you know little andthen what happened was actually i had an 800number in new york uh 1 800 my results like and umand i got charged like 100 bucks a month for it and i gave it back i didn’t needit anymore and uh nynex owned it like this is like2002 right and uh and i’m getting charged 100 amonth i know it’s gonna take like four or fivehours dealing with the phone company to have that stop at but likebut i don’t want to spend four or five hours but umyou know i don’t want to trade four or five hours for a hundred dollars but iwill trade four or five hours for 100 a month forthe rest of my life right like and so like i did it and it was that callthat then started this whole thing like this is alli’m doing this all wrong this is insane like i would have never done this in anyother business like sat there for i would have told someoneelse to have sat on the phone for all that time yeah rightthat was that was your thing why why do i want to do it all this is going tomake me no money yeah absolutely no money right and that’swhat would be my big accomplishment for that i remember reading something or itwas a video i watched the viewers where you outlined that uh entire i thoughtit really was a shifting change for me where you said i createdan irresistible offer that i wasn’t positive i could almost deliver on untili had the right person and then i went out and found the rightperson that i knew i could deliver those results onand like how you selected Mike in one of those things you’re like okay this guy’sgot a list he’s got chops he’s got this he’s got ican deliver it and if he didn’t you wouldn’t haveselected him as a client so i thought that was like brilliant it was like makethis crazy offer that you know what the rightperson you could deliver on and then weed through the people and then deliveron the offer and then not only do you get to tell the worldlook what i did yeah but you get to tell yourself and your subconscious mind islike yeah i did that yeah i’ll do that [ __ ] again and i wasyou know i when i chose i chose people like Mike i chose people uhthat were not like Mike but peop a few people that were just starting outum but it was really interesting like who i rejected like i was so excitedwell it’s it’s it’s uh it should be notedthough that when when i met Rich it was january of 2005.so this was a year before butterfly marketing andi know i gave him a lot of all the credit in order but so like if you’regoing to be if you’re uh gus d’amato and you’re going to pickout a fighter you get you have certain things to lookat yeah but that’s what i’m saying i just want i want the people listening touh at that point that like Mike Mike Filsaime came came later like righti had i get it yeah yeah yeah i was i was rejecting basically ibasically had carbon copy marketing and some ideas right i was rejecting peoplei wasn’t selecting people like i wasn’t like Mike like i looked atMike and i was like oh this is gonna slam dunk i was more like there’s noreason not to accept him right but i remember becausei just like i so i’ve spent a year working forarthur anderson and anderson consulting and then anderson consulting becameaccenture and a lot of what i know about businesscame from the year that i spent there because i spent a lot of time intraining and uh and thebut accenture anderson consulting is now accentureuh there there’s one consulting company that is considered the best consultingcompany in the world and that’s mckinsey right and uh so even though i’m veryproud to have worked for arthur anderson i’d be more proud if i had worked formckinsey and um and so in the applicationsfor that original group there was a guy a former mckinsey guyand i was all excited i’m like holy this is going to be like amazing likecoaching someone like this i’m going to learn so much like it’s going to beperfect and um and this guy like one of the other questions on theapplication was what other programs have you purchased or signed up forduring this event and i followed it up when i spoke tothem because anyone that i was unsure about i spoke touh you know tell me what you bought at the event because that would bea gauge for me of how they see the world and like what kind of promisesseem appealing to them and stuff like that he bought everything and no hebought this i don’t want to say the guy’s namebecause i like the guy who sold it um so i’m gonna he’s gonna just he’lltell us later yeah i’ll tell you later and mr x was going to build you adsensewebsites that he guaranteed would make you athousand dollars a month and he was going to charge you tenthousand dollars for it and you know if you know because iscratch my head like if well yeah so like and if youknow how like selling from the stage works half themoney goes to the person whose event it is so this guy now is sellingmr x is selling for five thousand dollarsas many as you want uh ad sen you know for five thousand dollars adsense sitesthat will generate a thousand dollars a month soyou know if you could do that why don’t i keep them with you for yourselfright like so like that was my question to him i’m like okayi’m not sure whether you know how promoters work with speakers so let meexplain that so now that you know that this guy isgetting paid five thousand dollars and he’s promising you he’s gonna make youwebsites that make a thousand dollars a month andyou’re not needed for that website at all like he’s literally just gonnatransfer title and then you’re gonna get thethousand dollars so scalable right like you knowwhy would someone do that like you know why liketell me why and he thought like he you know hehe was still looking for like that opportunity seeking like he wants to gothrough the re this is a brian tracy phrase i gothrough the uh the revolving door of life on someoneelse’s push right like you know like not have to do any of the work just kind ofstand there while someone else does all the pushingand life doesn’t work that way and success doesn’t happen that way rightand i don’t want to work with someone whothinks that that’s even possible because it scares methat like if you think that like you’re gonna find moneygold on the street and then you’re gonna be hanging out on the street and notlistening to me trying to get [ __ ] done you know so itwas interesting so you rejected it i rejected him the way i think my growth over the yearsfor me and again you know working with youpointing me in the right direction um came from the first thing i had to letgo of is you if you want something done rightit has to be done yourself and that that’s always going to be the truth inthe first 30 days when you’re working with anybodyum after after building a team when you startreally getting to the point of like um likeuh well [ __ ] i don’t i don’t want to write the the squeeze pagewhat you did like out converts mine every single time even though i’m a goodcopywriter all these i’m going to go into a special zone to do thatso what i’ve what i’ve really loved aboutuh building a company with with these guys is what we try to do isis basically just delegate everything like if we can come up with the ideasdelegate everything have a team that can get it done until they push backthen our job is to just well you know the sausage machine hasn’t broken up yetjust keep putting more meat in there until until it starts backing up and umbeing able to get rid of pretty much everything hopefully to the point wherewe’re just you know visionaries and doing podcasts and stuffum right now some of the some of the constraints forfor me is is maybe was writing some of the vsls and getting on camera and stufflike that but is that as even that’s starting to to getminimized and we have uh people in our video department thatcan write scripts and do voiceovers and all these different thingsthat’s to me is is the ultimate dream and we were talking about it the otherday when i was talking to kj about the difference between being atime teller and a clock maker time teller is aunique gift hey come up to me any time of theday ask me what time it is and i can just tell youwithin three minutes what time oh that’s that’s such a unique gift that uniquegift is yeah exactly you see the classanyway we’ll tell that joke another time but umyeah if you if you build your business around you being the time tellerright um then you have this unique gift that you’re not going to be able to sellthe company you’re not going to be able to transfer thatyou need an apprentice that needs years to follow what you’re doing your realgoal is to be this would be uh henry ford you’re aclock maker the at the end of the day people justwant to know what time it is and if you can if you can makea complete system that can just run without you and you’re putting out manyof those things so i think that’s ultimately what you knowwhat i try to do every single day is just saywho can do that who can do that who can and whatever left is for me and thenwe’ve got to figure out a way how to get how to get the team to beable to do that for us without our egos getting in the wayyeah ego is certainly one of them and and so that specifically is an ego thingbut there are these there are these kind of thingsthat we i don’t know how to phrase it exceptthat like they are excuses that we come up with answersquickly for that when we really think it throughtheir [ __ ] um so like what you’re talking about iswhat is often called like the freelancers paradoxand the freelancer paradox is like it’s like i’m not making this up like it’ssomething that i’ve like read about heard people talk aboutis that if you ask a freelancer like you know to hire someone to do somethingright they’ll be like oh no i can’t do it like i have to do itright and but then if you ask in a separate conversation that freelancerare you the best in the world at this or have you ever seen someone else do workthat even you look at you’re like wow i hope to be that good one dayand most freelancers are like you know no there are people like this person andthis person that like i look at and they are at such ahigh level all right so you need to do this butthere are people better than you like describelike where the conflict is there now because it does itmeans you don’t have to do it now there might be a different excuse liketo get someone to do it as well as me i’d have to pay a lot of money orwhatever but that’s a different excuse that then you canopen up right it takes too much time i still have to train how i reallywant it i hear it all the time but but what often happens is that we tellourselves a singular lie right like that easily gets us off thehook that when it gets challenged it’s likeyou’re selling a course right and the person says uhi can’t afford it i don’t have the money right and is that really the excuselike okay so what if i wasn’t selling you a course for two thousand dollarswhat if i had a hundred thousand dollars in cash hereand i said if you can produce two thousand dollars by tomorrow i will giveyou the hundred thousand in cash can you get the two thousand dollarsyeah i could get the two thousand dollars okay so then it’s not money yeahright like now i’m not trying to like i’m notsaying no buy my product i’m saying yes you’ve gotten them to agree with thatextreme that that extreme metaphor there thatthat if you truly believe this was going to get you 100 000you’d be able to come up with that right so the challenge is not money thechallenge is certainty and maybe my program is not going to give you thatcertainty right but like but at least understandwhat it is you’re really looking for you’re not looking for just a cheapproduct you’re looking for a product that’sgoing to give you certainty and so you shouldn’t even be analyzingprice point as much as like how certain because that’s yourthat’s that’s your driver’s license how much i’m getting out of this [ __ ] upi so my point being though is that we often lie to ourselves consistently weall do it to get ourselves off the hook at a highlevel right and when we start to dissect that thought it’s a crock of [ __ ] thatthat’s like let us off the heart yeah i just i just love that and like thinkingout loud like like we’re in a green room right nowtalking like um and folks feel free to use this becausewe will so what what Rich just did was just in abrilliant analogy that should be done on stageand should be done on a webinar so the first thing you need to do is get tosomebody to say how certain after you seeing thisprogram do you think that if it was free you could have those results put a onein the chat put but you know from a number one to a hundred put a hundred ina chat if you are 100 certain if you had this programit would get it to you so first get this yeah get that small commitment the levelof certainty right because it’s never the money right at that pointMike always figures out evil ways to workevil i’m i’m teaching here it’s for you guys i will neverjust describe me when you said that i was thinking to myself how many thingshave i not bought not because it was the money butbecause it was the risk of the money because i wasn’t certain in the outcomeright if you had already convinced me of theoutcome there’s really no reason the other thing is not not only thecertainty of the outcome it’s the certainty of your willingness toshow up for the eight modules and do the work right as well so that’s rightthat’s that’s a more valid argument right is that right am i gonna use itright quick story like i so i you know and ii i i value Mike’s perspective greatly like his marketingperspective you know especially just he’s been there done that and i feellike oftentimes he’s got a better finger on the pulse of the marketthan i ever have and uh i wanted to create thiswhat was my second coaching program that i ever did becausethe scale one will be my third i wanted to teach theory of constraints because iwas certain how powerful it was and how bigof a difference it could make for uh my clients and so i wanted toteach a course on that and i wanted to learn it better and i find it theeasiest way for me to learn it better would be to teach it because now i’m onthe line and uh so i came to Mike and i’m allexcited about it i’m like showing him what i’m going to teachand how great this course is going to be and he’s like so how long is this courseand i’m like it’s a year-long course and he’s likenobody wants to take a year to learn anything uh you got to figure out how tomake it shorter i’m like this is really complicated stuff like you knowit’s like teaching algebra it’s all cumulative he’s like oh wellyou’re not going to sell very much if you don’t and so i people wantyeah eight week results yeah you know maybe 12.so i made it a 30-day program right and i sold and i sold it really welland um like i did for every other programi lock people out of all the content in amean way uh until they’ve answered like a 15-minute surveythat answers every question that i’ve ever had on my mind about my customerslike what products have you bought that you were dissatisfied with what productshave you bought that you know you think everyone shouldbuy you know just every kind of question rightand one question is uh you know it was something along thelines i don’t remember the question exactly but if you had to boil it alldown like what’s the single biggest reasonyou bought this program right you know and i’m hoping to seelike the power of theory of constraints i can say like you knowlike i want to say like 80 80 of the people saidit was a 30-day program and i could i know i could stick with it for 30 daysand that was so so like validation yeah that bigtakeaway yeah yeah i mean you know they when we talkabout like um what makes a good headline right it’sthe really good without the really bad yeah in in whatperiod of time so it’s like like the best headline for forlosing weight you know jokingly would be how to lose 100 pounds how to lose 15pounds in seven days uh and keep it offwithout giving up any of the without any exercise or giving up any of the foodsthat you like right that’s the really really good without thereally bad with a fixed result and essentially that that’s that shouldbe a headline formula every single time you know walking or a sub headline or apremise to to any course is that people want that result so twosuggestions as it comes to that right like one is and i’ve learned them fromdifferent people you can’t use them i don’t know if youcan use them both together or apart but so one is from russell rightrussell like took a headline of mine and thenadded uh so like say your headline again whatwas it just they’re really good without the reallybad or the seven dollars how to lose how to lose uh 15 poundsin seven days without uh without uh any exercise or giving up any of the foodsyou release so what russell did to my headline was hemade it more timely by talking about howpeople right now are doing this like in seven days and how you can too rightlike so it’s like another and maybe for me that was more importantbecause i was out of the market for a while this was a long time ago but likeit made it much more like this is happening right nowlike right now right and uh i found that i was like oh that’sinteresting that headline is better when it’s that and then the other one ilearned from clayton um and this was like i still remember thisbecause i was just like wow um pluralizing verbs puts the onuson the product as opposed to the buyer give me an example sohow to like uh like boost your income just say boost your incomeboosts yeah boost your income means like there’s work involved right but likeboosts your income does it for you it like itjust it’s subtle right you know like pluralized verbs and whenyou pluralize verbs the onus is taken off the uhyeah if it’s the buyer it’s a done for you almost yeah yeah without saying itand you’re not really saying it like you know yeah gross profits boost yourincome instead of grow your profits boost yourincome means you do this and you with your work will boost yourincome yeah boost your income it does it for youthis this boosts your income yeah yeah you cani i can’t boost my income so you recommended a book to mewith the word lean in it and and you wrote lean all over and ii said to you hey is that is that somebody something like you knowmarketing whoops was invented by so-and-so or whatever the case or isthat and you were like no no no that’sactually a thing and there’s like hundreds of books and everybody’s usinglean and you said it actually came fromtoyota yeah yeah uh no it’s not an acronym yeah it’sum so toyota’s talking about the fire all the time yeahyeah so you got to talk about about lean and uh well so the way it’s been appliedto so yeah so as you mentioned i’m working on thisscale course and part of the reason i’m working on and there are some reallygood scale courses out there i don’t want totake shots at anyone but you’ll be the best well mine will be differentand that’s because i think that in the scale first i thought there weren’t anyscale courses i’ve since found that there are few andsome of them are quite good i’ve actually gone through thembut what they what these courses do is kind of assumethat your business model is like dialed inand that’s like that’s an assumption that is more often wrong than right sothey’re just saying all you need is more gasoline they don’t realize that thethe wheels are going to start to yeah it’s all about like so you havecompanies like scaling up right like vern harness who has greatmaterial like great material but that’s more about how to run thebusiness like you know the daily the cadence the daily meetingsthe monthly meetings the vision the strategy rightthat’s that’s all vital and it’s all importantin my world view of how business works that’s like step two that’s not step oneand and same with like uh i think the guy’s name is alex chaffronlike very similar to chef right you know and i’ve looked at his course and hiscourse is really good too but it’s also just about the scale sideand i took i spoke to two different media buyers last nightuh not they just have to be friends of mine but like we were talking aboutother things one is uh uh jeremy blossom from strike point andthe other one is maxwell finn from unicornand i was talking about this scale thing and i asked them this question i waskind of surprised at what they both told mei said how many people come to you to scale their businessand you send them away because they’re not ready anduh i was talking to um jeremy first and germany was likeminimum 75 percent 75 of the companies that come to usthree or four don’t even qualify because they’re not they’re not readythey don’t they don’t know their lifetime value their allowablecost per acquisition is too low because their conversion rates are not dialed inthey don’t like you know all these kinds of things they might come with a bunchof money but it’s just going to be wasted so wejust turn them away i was like wow and like so that’s howyou curse me so you you’re saying this i need to go servethose 75 percent yeah so uh and maxwell finn said it’sactually he’s like at a low end at 75 that weturn away because they’re just not ready to scale and so so yeah sowhat i what i’m working on the scale course is really likewe’d say it’s five phases right and we can dive into any of the phase you wantbut the first phase is really just getting your head right like what is thegame of business and i think when you look at it the waythat i will share it with people they will getthe excitement and the challenge of building a business that does thesethings as opposed to doing these things right because that’sthe game if you can shift your viewpoint it’s actually a much more fun gameto like be the quarterback than it is to be like the nose guard orwhatever i don’t know football that well but like whatever sothat’s the first thing just getting your head right but then the whole next stageis really what silicon valley has figured outthat for whatever reason really this is this is what’s down tointernet marketing yeah i really think this is somewhere in yourin your landing page and you’re heading in the hook the frame all of all of thisstuff is going to come down from what you justsaid it’s it’s it’s what silicon silicon valley knows about scaling thatyou don’t yeah and they they have a system a formula vcs and you were eventelling me well once you get started with the vcthe vcs you know these are the things that they they force you to do and ifyou’re an incubator you’re going to do what’s called the lean canvas that’sgoing to surface all the assumptions that you’re making in your businessmodel and then the idea is is that you’regoing to validate or invalidate those assumptions as quickly as possible andthat a startup is not designed to make moneyit’s designed to validate whether the business model holds true before youscale it and so the purpose of the initial stageis to actually just determine business models to provescaling right and so you know silicon valley hasnailed that and i maybe i’m fortunate like i’ve had silicon valley clientsthat’s why you can’t be married to that vision that’s why sometimes a founderthat is married to the vision like the guysi’ve read the stories about like twitter like like the these companies started adifferent way somebody would do a side project and trythis think the company is going to go a certain way and they start realizingcustomers actually want this more than this and they were ready to adapt tofind out what uh we had something that the thethe the world likes we’re trying to prove a concept but right they’repushing against us a little bit somebody’s phoneis that mine it’s probably mine going out over thereit’s probably we’ll find it and it’s getting being and so you push thatfounder that that’s a little bit too stubborn about what theythey want their vision to be right that’s that’s that’s right butthe important point there is is that so let’s just talk about business ingeneral i think most people i’ll do this fast because i don’t wantto spend too much time on it but that most people get that like mostbusinesses fail like depending on who you listen to 50 80whatever but then the businesses that succeed theoverwhelming majority and i i don’t know what the number is could be 7080 90 probably even higher than 90 that don’t fail don’t get to the topeither they get stuck in this no man’s land andthe reason people get stuck in no man’s land is that their business modeldoesn’t support getting to the top so they built a business that’s reallylike a prison that gives them some profit but it will never be the businessthat can actually get to the next level and that’s all determined by yourbusiness model and what a lot of people don’t getis that and i would imagine most people who will listen to this podcast don’tget is that marketing while a high leverageactivity is not the highest leverage activity andmost people in our space think marketing is thehighest we call ourselves internet marketers right really the businessmodel is the highest leverage point in thebusiness then comes marketing and so your the model is critical and soyour goal is to recognize that since pretty much like 90 some odd percent ofthe companies that do make it to the top all change their model all change theirmodel so that you recognize that plan a is not theplan plan a is willing to get started all thetime and that it’s never about the idea it’s about how often youiterate because if you think that you starting with a like awonderful idea you’re deluded it’s like the people that get on a coaching calland are afraid to share their idea the idea is like never the thing likeand if you think it is then you just they hire you as a coach and the firstthing they do is want you to sign an nda yesand i’m not your coach yeah the but it’s like the idea is another thing andit’s more about how quickly can you iterate and if people really got thatthen they’d recognize i think they’d have a lot more uhconfidence moving forward in recognizing thatthis plan that they’re getting started with is just an assumptionand it’s more often than not it’s wrong andand therefore you’re trying to figure out what’s right and so that’s calledthe lean canvas and walking people through that andservicing assumptions and then getting in a cadence whereyou’re validating or invalidating one critical element of your business modeleach week and reporting back like this is you know so it’s very clearlike what we have to get done to get this model locked down so that’sfirst and foremost and so that’s like stage two of this scale course is thesecrets that i learned working with google and microsoft and yahoo and thosecompanies and then next is is the business that now has agood model is it designed to grow and that’s all the stuff that like scaleup and light teaches right it’s about systems and processes aboutstrategy it’s about how things are organizedright at agora agora is designed to be a hit factoryright let’s just talk about agora just for a second you’ve worked with themuh you’ve consulted for them you have a billion dollar testimonial billiondollar testimony and you had uh offers with them uh aswell and uh i wasn’t aware of how big they wereuh you know at our high mark 1.8 billion one a one point eight billion dollarcompany essentially uh uh information and digitalyeah like not not doing in fact doing so well doing some stuff and then all of asudden like some of the stuff that you were like heyyou should turn that that sales letter just have somebody read intoan ugly video right the video uh the ugly sales center uhthey did that you know added 20 30 revenue to an offer300 across the 300 worldwide yeah yeah exactly soso they they never claim to be anything other than as you just saidgood at what they did and they were hit factory but there’s a lot to learn froma company or your knowledge of a company yeah butlike you know for a company to be a hit factor and howdoes it need to be designed how do the products need to be designedso that offers can keep being cranked outlike that’s part of the design process so for exampleagora’s front end and i’ve talked about this before but not with you guys so buti think you guys know this already agora’s front ends are all newslettersand why are they all newsletters they’re all newsletters because one whensomeone buys a newsletter it now starts a year-long relationshipthey’re going to be in the mail sending them it’s ridiculously cheap it’s like49 for the year it’s 49 for the year andalso that’s based on all the testing that’s been done that a49 buyer will buy like back ends very expensive and notany more so than a 99 buyer but much more so than a 19 buyerso 49 is the price but newsletters the waynewsletters are sold just like the way magazines are sold isby premium you can’t sell people on what’s going to be in thenewsletter next month you don’t know nor do you know like what’s going to be innext month’s sports illustrated all you can do is add some premium tothe thing so that you get it now and so agoradesigned their front end right to be allnewsletters because newsletters have this year-long relationship theyhave a perceived value but a price point thatis inexpensive and then they could have 20 differentcopywriters working on selling the same exact newsletterall by figuring out which premium they’re going to come up withso the premium is the copywriter’s responsibility because the offer startswith the premium like the headline is going to be aboutthe premium the headlines backwards yeah and then it’s like oh by the wayyou get the newsletter free when you get the premiumso this allows like the structure of the businessis designed for offers to be created right like the whole system is designedthat way and so um while scaling up and those companies are very good at thestrategy and systems and stuff they’re not really great for strategies andsystems as it relates to a company that sells by direct responsebecause direct response has different rules than just generalized marketingand generalized client base and so you could say like stage three ofthis course is like once you’ve validated likethrough the silicon valley model now like how do we amp this up from likewhat i’ve learned working with agora working with boardroom working with thebiggest direct response companies on the planetand that’s more about design how do we because you could have a great businessmodel but if you don’t execute it if the business isn’t designed to capitalize onit it’s not going to mean anything if youdesign a great process that like with a bad businessmodel you’re going to end up stuck like you know you got to get all theseright right and then the last well the the last of the meat becausethe three primaries are silicon valley direct response right andthen the last is scale and growth and that’s like you know everything i’velearned really working with guys like you working with all these media buyersand stuff how do you take an offer and then uh therefore also a businessand really scale its growth and you know those are the actualspecific things that once you’ve got the right systems in place and strategy andyou’ve got the right business model becomes much easier it’s like you knowhow much easier is it to get traffic for an offer that’s crushing it versus anoffer that’s you know like your people are doing youa favor sending you traffic because they’re not converting rightum if you get the other elements right then it’s right and then the last stageis like how do you keep it all yeah because we had someconversations about that i was telling you yeah i was telling micah all rightugly stuff that happens when you get big these this this has to be an anonymousstory because like listen we all recognize this you wouldall recognize the name of this person so uh this gentleman has a eight-figurebusiness has had an eight-figure business for avery long time um you’ve read his book i will just saythat and um he had a company that he ownedwith his wife well he owned it and his wife being you know living incalifornia that’s a 50 50 issue and they hired a ceo and they gavethe ceo 10 and then five years later divorceand wife hooks up with the ceo they have 55 percent of the company nowright because they only had 90 when they got divorcedhe got 45 she got 45.And now the wife and the ceorun the company kicked him out the book sells todayhe’s the founder the book still sells today and drivescustomers for their business i mean he owns a piece of it so but like abusiness that he has no control over and uh yeah kind of funny so like thatlast one is governance and while it’s notimportant i’ll tell you off here okay uh yeah idon’t want to do that to him on air um you’ll be blown away um but uhyeah so those things are only important when they’re importantand you know and they’re not important in the very beginning because in thevery beginning you got nothing to protect soto waste your time in the very beginning on these things but kind of how couldsteve jobs get fired from from applebee’s right he that could havebeen prevented all these although he probably should have beenwell you know i mean he grew up and he realized thatbut you don’t want to you don’t want to sign up for that learning right yeahyeah he got it all came back for him luckily you know yeah uh in a perfectworld because he was a genius yeah most people so i wanna i wanna i wannaend with um but he’s also very clear on how manythings you have to say no to so that when you say yes you’re all inyeah like you know it’s really fame and this is where like just to tie backinto the activity map thing for a second like what i was talking about that likeat some point you guys should look at um so you know when steve jobs got backinto apple right he cut everything right there waslike 500 products and right like we’re only going to havefour products we’re gonna have a desktop for you know regular and proand we’re gonna have a uh laptop regular and pro or student and pro like you knowwhatever that’s we’re only doing these fourproducts um one of the things that they cut out were printersright because apple used to make printers printers are actually a verylucrative part of the overall like computer science computersyeah right so they’re giving up a very profitableend right you can certainly make the casethat in order to make a computer useful you need a printerso like in their value proposition a printer makes sensebut like when you look at what gives them their competitive advantage aclosed environment um the printer does not provide anynothing for that absolutely nothing whereas like itunesand stores and all these other elements do reinforce their closed system yeahright so and the other so like that that making those decisionsbecome very vital right like when you’re clear about whatis your competitive advantage and then how do you build a businessthat that competitive advantage is so like intersected that if your competitorlooked at it they’d be like i’m gonna have to changemy whole business yeah right exactly right that’s that’s the key of that yeahand so that uh that process and you know i i think well it was inthat video that i showed you that i have a presentation i gave like a decadeago but like the apple store which is the most successful store that’s everbeen and we’ll get a link to that in theresources okay yeah yeah sure like um the apple store which is the mostsuccessful store that’s ever been created like as far as a retailerwent to a billion dollars in three years the averagemall store that is a apple store does more businessthan a best buy which is 20 times the size like notyou know not sales per square foot but just total volume they’ll make moreum the apple store was also the only store that’s ever gone through theprocess that i’m talking about that they built the store in a warehouseand they kept deciding like is does this work doesthis work does this work three days before they wentand opened the guy in charge of design who worked with jobssaid we got it all wrong we got to restart and they did but like it’s theonly store that was ever prototyped and tested and prototyped and tested andrefined and prototyped and tested and that it doesn’t seem likethat much of a surprise that it was also the most successful store that was evercreated because it was vetted beforehand and itwas designed like once the model was perfected andyou know and all that so we’re gonna we’re gonna wrap it upright here we’re gonna end it with this uh line uhwhat you want to strive for basically uh Richard said which camera am i lookingat uh yeah this one here this one okay this one allright cool and um basically like the goal from going fromhustler to founder uh is how do you know when you’re afounder it’s uh when when you’re walking around your owncompany and somebody goes who’s that they goit’s the founder idiot yeah that’s that’s onewhen you’re that unnecessary that people don’t know who you are you could walkaround in jeans in the flip-flop and who’s this guy over here just walkedinto the refrigerator grabbed my lunch without asking oh that’sthat’s the founder right so that that’s uh that’s the goal there soso uh all right everybody that wraps up this uh this episodeand if you like uh uh Rich how can people uhlearn more about you to uh opt in and get on uh a waiting listyeah um you know what i there’s no waiting list there’s no nothing at thispoint um but certainly they should uh go totwo places they should join our list atstrategicprofits.com and they should join our facebook groupwhich is also called strategic process strategic profiuh strategic process for more members there you go search it search for it umat facebook as well for the group and and uh joini’m a member in there as well all right everybody so uh yeah if uh ifyou like Rich want to see him back again maybe we can dive deeper into um intoscaling again let us know in the comments andwe’ll see you next time see you next time

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