81 Minutes of Money Making Advice You Needed to Know Yesterday

My audience asked me questions for 10 hours and here are the best moments let's say my only goal was just to get rich a what is Rich AF just so we Define it 100 million why not it's a good number cool you're willing to work hard but you have limited skills and experience what business would you start like right now 2023 and I have no money right I would probably build a boring business in services and I would Probably pick something around the body you know if I wouldn't just start a design firm cuz I

think that has a high likelihood of getting disrupted or you know in some way by AI if I were you know it's as silly as it sounds like a nail salon or a lawn care service things that I mean especially body ones uh dentist stuff like you still have to go in and get your teeth taken care of and many times people value the human exchange more than something robotic so For example in the fitness world like this is my like my data point around this uh there was a a brand called cocoa fit and

um they struggled a ton and then eventually went out of business because they tried to automate personal training so they created these all-in-one machines that would you'd have a key fob and it would count your reps and every time you went to the machine it would say how to do more and what what you did last time it's really cool concept the Problem was their theory was that the reason that people weren't getting results is that they didn't know it to do when the reality is that no one was showing for the gym people hire

personal trainers because they want another human to talk to and to hold them accountable to showing up same reason like if you had a robot cutting hair there might be a percentage of the population that do it but a lot of women like the going to the hair salon and having that exchange And so I would probably build a business around services in general um would be my way and then I would continue to scale that and you could do that at a local chain level and you can make a lot of money doing that

or you could do it at a national level which would be like Professional Services I love the idea behind the c stuff that's going to be here forever you know let's say hypothetically the great fires of Las Vegas burn everything to the ground okay You lost everything you had to start again what would you say is the number one thing that you would have done differently to get to where you on now and I have no reputation right no no reputation yeah it burns my reputation on the ground with it so I actually have lost

everything before uh and so I I know what I did and I probably would have done the same thing so the the the easiest way that I did to like go make a 100 Grand in a month when I had nothing Uh was that I would go find a business that was local that I understood and that I could sell something expensive for I would front the capital to Market I would work the leads and I would sit at the front desk and sell and I would negotiate what they would be willing to do a

big bulk of services at scale for so for example if I wanted to find a chiropractor and I'd say hey I if I sent you 100 customers this month what's the lowest rate you would do all 100 Customers for this level of service and then I would just negotiate that down and then I would spend as much as I could and sell it for as much as I can so I can make the spread and then they would service the customers and for them it's a zero risk offer CU they don't have to do anything

I front everything else and then for me I don't have to do anything but Market and sell and I can take all of that and so like when I lost everything I immediately was able to Make 100 Grand the next month by doing that playbook in your opinion what are the three most powerful skills that someone should develop if they want to make a lot of money I mean the Three core skills are you got to learn how to build you got to learn how to sell and you got to learn how to lead just

like that there we go like in in terms of maybe like hard skills that someone should really focus on learning to develop that like sales copyrighting Leadership what would you say the most important well those are the three big buckets right so it's like one is that like leadership is just the internal bucket of getting people to do what you want them to do at scale right and then from a selling perspective I include that in all things that are marketing letting people know about your stuff promotion uh and actually converting people into customers and

then the third piece of Building Product and services is so that at scale If the product is good enough then you won't lose customers and if it's exceptional the product itself will get you more customers and so most businesses takeen to their natural extreme on a promot tional level typically are leaky buckets because the product actually sucks and most businesses suck in general because most products aren't good and most people want to cancel very quickly and don't Want to continue to use them which is why very very good companies are very rare uh most of

them generally are mediocre or not good and so I prefer to solve a business from Back to Front which is like can we find something that people actually like and want to continue to use and continue to pay for and then the marketing is almost a commoditized skill like it's very easy to let other people know about your stuff and do so louder and louder and Louder provided the product is good and then the internal has to get run with a leader that can attract the talent to continue to do this because quickly the the

business will bottleneck based on the founder and their expertise or usually they have a niche they might be product people they might be tech people they might be Finance people they might be whatever um and then they have to be of the character to attract the talent that will allow them to get to you know Nine figures or whatever it is that their the goal is you mentioned on a recent podcast with Tom Bilu uh that you don't have rules so yeah I for example you know I quite often end up working up until midnight

2 am 3: a.m. and basically [ __ ] up my sleep schedule because I have too much Freedom right because I'm self-employed so how do you kind of strike that balance between freedom and discipline you know if you're driven and you want to accomplish Big things it's it's it's kind of 8020 like if you know that when you stay up late like there are times when I will gas it and go past my red line in terms of work and I know that I'm eating into tomorrow but if I'm like in a flow and I'm

crushing it and the Muse shows up and the Muse wants to work then I work you know what I mean but if there's some days on the flip side where I wake up and I just feel foggy as [ __ ] and I just like for whatever reason I ate too much Mexican last night and my you know I I just I don't have it that day then I I might call it earlier like the idea of me pushing through and punishing when it comes to the type of work I do if I were doing

a more uh Brute Force work then I would care less you know what I mean if it was just like if I was just doing reach outs I was doing cold calls I was training personal training sessions I was cutting hair I'm just I'm just going to brute force my way through it because I don't need to have higher brain function and that's not an insult I'm just saying like you're not like thinking of creative things you know what I mean you're just you're working the work um but when it comes to like writing or

or making presentations or communication of some sort it's more I try and optimize around how can I maximize over a week how much Flow State I can be in so I can just get the most total quality output so it's not about Rules it's more like which of these things has the highest likel of getting me the most what's up Kristoff in one podcast you said that your most feared decision in life was to quit your job when you were 22 or 23 my question is what advice would you give to your younger self if

you could in that exact situation when you have nothing to lose it also makes it the best time to make highrisk decisions because you have a disproportionate upside not quitting if You want to do something else like if you have this desire to do something else is like not taking a stranger up on a free lottery ticket on the street if they give you a free lottery ticket and you lose you're back to not having anything if you win then your life changes forever and so I think a lot of people place a disproportionate amount

of weight on the opinions of other people who are going to judge them in the short term because quitting your job Is short-term pain for long-term fulfillment if that's what if that's what you want to pursue because the short-term pain comes from the Judgment of s and likely a back you know back step in income but long term you're working on the thing that you want to be working on now if you like your job and you know what I mean that that probably doesn't apply to those people but like if you're in that situation

it's really a long-term short-term sacrifice which a Lot of people aren't able to make the second question let's think that my audience uh don't know anything about Laya except that she's your partner okay but I think she's she has exceptional knowledge and she she's a really good personality if you could only tell one story about her that makes a complete picture about her what would it what would it be so Lila had quit her job to join me to start gym launch this is when we were doing turnarounds so we're Flying around the country so

she quit her job after knowing me for only a month and then started basically living with me in motel rooms she had built up a book of business so she was actually giving up something that she had spent 2 years building to pursue this thing with me and we were new like we had just started dating about 6 months into that I told her that I needed a break and the she actually asked me she was like it's sounds like you don't really want me to Be here do you want me to leave and I

was like yes that would be great I had just lost all the money from the partner I had this location that I had to either shut shut down and had no cash to do it and I had to service all these contracts that didn't have the money to service and I also had like three other businesses that I was trying to run at the same time I had a caropractor agency I had my gyms I had Jim launch the turnaround business I had a dental Agency all of those with different partners and I was the

one who did Marketing sales for all of it and so I was just so spread thin and so she I needed to generate money uh to basically pay the bills of the gym that I couldn't pay that the money had just gone out the door for right after me saying I don't think we should be together she had to leave like the next day to go to Hawaii to launch a gym for this guy that she's no longer dating that she quit Everything to leave tough situation that nine out of 10 not even n 99

out of 100 girls would have just said no they would have been like I'm just going to go back home and you know try and get all my clients back but she didn't do that so she flew out to Hawaii I didn't have enough money to give her like a nice place and so so um I had her split in Airbnb with Five Guys Five dudes and Lila not ideal and so she worked out of the Airbnb and well realistic she worked Out of the gym most of the time and did the biggest launch that

we'd ever done and so like when my world was Crum crumbling around me and I really needed her to come through she stood tall and she did it in a time that I probably didn't deserve that level of loyalty cuz I hadn't shown her any and so she did that and then I made enough money from her launching that gym that I could pay off all the bills of the gym that I was going under that I just lost all the Money on uh to basically come out breaking even um so that we could actually

go back all in on gym launch and get rid of the other companies wow man I think I haven't heard this story before what what went through through your mind I I can't really believe this and understand it well when she did that I wanted to be with her she had extended me loyalty that I had not given her there was probably a few defining moments in our relationship that was the First big one thank you very much for sharing this the next one is kind of basic question but I'm really curious about the answer

what was your biggest takeaway of writing 100 million offers and also 100 million leads the offer is a strategic question that influences all aspects of the business and is also a mental exercise that people can feel like they're making progress on their offer a lot faster leads is a lot more about activity and implementation and so People can get ideas from like the lead magnet chapter but then you have to start reaching out to people posting content or running ads to start start getting leads in the door right and so there's a little bit bigger

of a hurdle with leads than there is offers but it's also the the main driver of business is letting people know about your stuff and so I think that many people will mentally masturbate to the idea of making these amazing offers but I think Formal people make money by actually letting people know about their stuff which is leads what went through went through your mind when when you rewrote it for theth or 19th time so unless I can work once and have something provide value on an ongoing basis which is a high leverage activity um

then it makes no sense I think most people shouldn't write books because the amount of work it takes to make a great book that actually lasts the T of time is Extremely difficult I think I I uh read a blog post where they said uh how to write a blogbuster blog post and there was a chart where they said if you put in like 100 hours to write only one blog post there maybe will be a million views but if you put like 50 hours there maybe will be just 10,000 views it's exactly that there's

diminish in marginal return but an increase an exponential increase in absolute returns you know the gold the gold medal Sprinter in the Olympics Versus the silver medalist like from a business context the person who's at the gold medalist might have worked 10 times more right to get this much more out but what's the difference in absolute of gold versus silver everything just being this much better people are like well I don't want to work 50 more hours to be this much better but being this much better might make you the best at that whatever the

blog post is or that business or that solution and the amount Of winner takes all the economy has shifted towards people want the lowest risk solution and so if you have the best solution then it is the lowest risk thing to buy and so to be number one versus number two 80% of the economics sometimes 90% of the economics go to number one and so it makes absolute sense to work 10 times harder even though you might only be this much better from a marginal perspective on the chart of rankings that might might Make you

10 times higher some context we have like a book summary application where we give also exercises and tips to implement the book what's your average take on on books and uh I mean book summaries is it good did you use them before I don't read many book summaries uh mostly because you rely on the person who's doing the summarizing to find what they think is the most valuable thing for you right because a lot of times what I find if I read a book The the Nuggets that I find are not the main Concepts it's

actually the details if you don't know anything about topic then summaries are great to give you a latus work a framework to understand the rest of the information that you're can consume but once you have a basic understanding it's in the edges which is where you can expand your knowledge right and so there's there's not a lot of shortcuts to getting really good at something now a bit of selfish question But I'm really curious about your thinking yeah yeah okay so you remember you had a video where you scaled a no strip business to 50

million in six minutes could you do this with a book summary app basically do a breakdown of a book sum so it's an application yeah it's a it's a subscription based application yeah got it what's the price point uh $10 okay what's what's turn I think 15 to 20% monthly or yearly monthly monthly got it um so you have to Fix that first at the end of the day everything's going to be ca LTV so like if there was one single metric that I'm going to look at a business it's CA LTV ratio so how

much it cost me to get somebody and how much do I make from them over the lifetime until that metric is better than the competition so like blinkist right I think that's a one that's like that I would have to look at there TV and what are the things that they're doing that like why am I why are Going people going to come to me versus them right so either I have to be more niche in my selection of books so that I'll have a wider selection for a narrower audience like competing against Amazon is

very tough but if you if you if you Niche down into a specific topic then you can actually have a wider selection because blink is is just going to take the the best sellers right for every every category because that's going to be the the most people and They're VC backed and they're funded and they can acquire customers at a loss for a long period of time acquire market share and unless that's the game you're trying to play then you have to play it different which is I want to I want to be really specific

about the Avatar that I want to go after and so that's where you do a little bit of research ahead of time and say okay is there an underserved Market that might actually a have a big reading preference so like Salespeople is one of the most common professions on planet Earth from a personality perspective how many sales guys read all the time I don't know I would have to I would have to look into that and so you might be like okay well sales guys aren't the guy but maybe HR Specialists read a ton okay

well if they read a ton and there's like blinkist might have one book on HR but I could put a hundred different things that are related to that or one degree separated And then I can create the illusion of a wider selection of topics but around a narrower a narrower Avatar or concept right I would start there and then over time you can expand if you if you want to and just reach you know you go adjacent you go to finance or you go to whatever like this is me just spitballing again like I did

the no strip thing from the the economics perspective you have to get LTV to the point where like your turn should be Under 3% in order to make this really work once it's under 3% monthly yeah monthly monthly I mean ideally you want to maintain 80% annually at least if you want this thing to be a big thing all of my attention would be only focused on that like until you fix that there's no point in acquiring customers cuz they're just going to fall out the back end like there's literally no point cuz then you're

also getting lots of people in that will then say that that thing sucks You know what I mean I'm not saying it sucks but I'm just saying like they're they're a friend of theirs is going to say hey I signed up for this thing they're going to be like oh I tried I didn't like it and then they're like oh okay maybe I won't I won't stick on it I want to be so quiet about what I'm building until all my metrics are right and then I want to blow the the doors off but most

people want to keep hitting these income goals rather than looking At the the metrics of the business that are actually going to drive the long-term goal cuz like anyone can Market their way to 100,000 or a million a month even with an app like this if you blow enough money enough people find out about you can do it but then you can only maintain it as long as you're spending that much money the moment you your your spend drops your income drops and that's not a business that I want to be a part of our

uh USB is that we are Doing we are we are in Hungary and we are doing it in Hungarian and there is no other application in Hung okay that's great if we scale to maybe Poland we would do it in Polish and not in English and that's a USP I like that and I mean then at that point I would just look at I I try to model as closely as I possibly can the number one player in the US from a ux perspective from the selection of titles all that kind of stuff and then

I would and I would see If my metrics change if I do that if not then it's like there's some assumption that I'm basing this business off of that's not right in the Danny Miranda podcast I think you talked about skills versus skills could you expand this maybe uh a meta skill is a skill that helps you acquire more skills learning how to read is a meta skill like learn like learning how to learn is a meta scale at at the with the broadest brush stroke all the way chunked up learning To learn well quickly

and retain information and be able to implement it is is a skill you give a 100 people a course right that's free the difference between the people who are going to be successful and not successful are the ones who already have sufficient meta skills to be able to then use the information and implement it like at at one polar extreme you've got somebody who's completely incompetent right who like you have to teach them how to turn On a computer and On The Other Extreme I can say go build me a company and the person can

do it so this person can translate a directive into each of the sub buckets and knows how to do that and so it's really like your success percentage basically is predetermined by how low you break down the skill requirements for someone to be successful so like the reason that I write the Books at the grade level that I do isn't so that people who are Experts don't get value from it so that it makes it even easier for experts and it makes it attainable for people who don't know so I can get 70% of people

who read the book to get leads versus 10% of people to get leads if I just cut out some of the steps and made assumptions about their skill level the last 10 or 20% the people who are experts are still going to benefit from I'm just also going to include turn on your computer here's how you do that and From the software perspective with what you're doing that's also how you get a way larger percentage of your clients to activate typically we make assumptions because we assume that every customer is just like us and so

they have the same meta skills as us and they have the same interpretation or perception of the world and the ux and so that that assumption isn't true like all you have to do is and I'm sure you've done this like you look at people scrolling on Your app and you see the heat maps and you're like why are they clicking that button because they have different skills and experiences that they're bringing to the table and so then we just continue to accommodate it break it down to the level that you could show it to

a three-year-old and they would immediately know how to use it like the fact that babies learn how to use iPods is an indication of how how simple they have made it to humans to use and that's Why they have such Mass adoption how would you teach someone how to learn we already know how to learn it's just that most people don't know how to teach everybody learns stuff all the time right if I if you touch a stove and it's hot and it's and it and it burns you you learn not to do it again

like learning is is natural like we all learn but people who want to teach a specific behavior don't know how to do it and so it really just comes down to three Things which is what do I reward what do I punish and what do I extinguish right so reward is you give a carrot right after someone does something punishes you you know you zap them or you smack them after they do something or extinguishes you do nothing right so if your wife walks in and she got her her nails painted neon orange and you

don't like it you might not want to punish her because that's probably going to have negative ramifications in the rest of Your life but you might extinguish it so you might not say anything about the nails or you might say something different she's like do you like my nails I might say something back like I'm I'm happy that you got what you want what we're doing is what Behavior are we training and so if you think about learn teaching as training I think it's a much more useful word to think through because at the end

of the day you have only taught someone if their behavior Changes in the same context as in if I want you to say these words when the phone rings if I say cool we're going to put you through this training and then the phone rings and then you don't say the words you have not learned and I have not taught you and so it's how many times can I simulate this experience the stimulus the context so that I can have them do the behavior I want within the context that's going to trigger it and then

reward them Immediately and that's how you have a feedback loop that trains people to do something so that is why the streaks in the application and the gamification and those stuff how would you restructure the education system if you could H yeah sorry for dis no you're good you're good I would focus almost exclusively on meta skills teaching people how to learn step one and then teaching people the things that are the next level underneath which is learning how to write learning how to Read learning how to speak learning how to do math like those

are the those are the building blocks of everything else that follows and in the school of the school of Alex or the school of hosi everyone passes only when you learn there are only 100% and you continue to do it until you learn I like the arbitrary division of grades along age is ridiculous to me and I think if there were a lot more clarity around the goal which is like until you can read 10 Pages out loud without making a mistake you do not move on if you can do that in a day fantastic

if you can if it takes you a year okay I don't judge you on that it's just how long will it take you to learn the skill so a good buddy of mine Dr cashy taught an autistic kid how to read he couldn't stay still reading uh for more than one word at a time and then he would like have fits or whatever and so he came to train the child on how to read with a bag of Skittles and so When the kid would read a word he would give them a Skittle when he

would read more words in a row than he ever had like a record he would give him two Skittles so he rewarded the behavior and then he had big bonus rewards when he would ACH unlock a new level and so he kept doing that and within one afternoon he had him reading a full page what is the behavior that I want to reward how can I reward more of it now none of it was punishing he didn't smack him when He messed up when he read less he still gave him one to reward him for

the activity and then when he read more he' gave him extra reward as the kid becomes less fool on Skittles and he's like you know sugar he like doesn't want any Skittles anymore the Skittles become a proxy for approval and they work just the same how do you know that when to when to punish when to reward or when to extinguish we try very hard to almost exclusively reward because punishment Changes Behavior faster reward changes Behavior Behavior longer it just takes longer to work right like if if someone you know calls me Alex and I

don't like that and I slap them and I say never call me that again I might change their behavior really quickly if I leave the room and someone else says walks in they might say I was talking to Alex because I'm not there to punish them and so punishment only works as long as the the source of punishment is there and the Person doesn't get accustomed to the punishment because punishment itself becomes desensitized over time and so to effectively punish someone if you want to consistently punish then you have to increase the intensity and variety

of punishment over time because otherwise people get desensitized to it if you're always mean and yell at all of your employees eventually they stop carrying so you have to increase the level of your threats right you then have to say I'm going to fire you I'm going to kill you right you have to make these threats increase because you create the you increase the intensity and the variety of how you claim to punish them reward you can reward long enough that you can then extend the gaps between reward to eventually you don't need a reward

anymore and people will continue to do the activity because they have always done it so it's the exact uh example with Dr cashi and the guy yeah I would Imagine if he was doing this over and over again he proved the point I don't he's not like a full-time reading teacher the concept is that he would read and then maybe the next time he comes in he gives him a Skittle every other time he reads and the next time be every third time and the next time it be only when he when he hits a

new record if I can get the kid to read long enough that he actually starts to like the story then The story starts rewarding it of itself and then I can move away and then the kid reads without me and so fundamentally that's what you try to do when you train any activity is that most people who are experts at anything get rewarded from the activity itself because once you develop a level of Mastery in the skill you enjoy it because you're good at it so we hope I hope we will meet again and maybe

speak longer thank you very much dude I Appreciate you Kristoff thank you so much thank you for inviting your community and hopefully your community got value from the event um and hopefully they use the books and and grow the economy and hungry and uh and all get you know way way better at whatever it is they're doing you are incredibly committed to education and self-improvement how do you select what you will pursue for Education there's so many possible topics uh so what process Do you go through to select uh what you're going to be educating

yourself on and how do you also select potentially someone to educate you on that topic we do everything off the theory constraints at acis.com which is basically that a system will grow until it's constrainted until it's limit so it's kind of like the idea of the the weakest link right so it's it's finding what the weakest link in the chain is or the constraint of the system is so that we can DEC Constraint it and then grow to the next natural constraint it's a very simplistic look but it's extremely effective because it just cuts down

all the noise into like if I had to pick one thing that is the big limitation of this business what would it be and so then we just get laser laser focused on solving that one problem solve that problem and then we move on to the next constraint and if we solve that problem and the business doesn't grow then we pick the Wrong constraint and so sometimes the constraint is your ability to judge what the constraint is which is why you know wisdom is one of the hardest things to earn which comes from experience right

is that you're able to you know recognize patterns um and so for me right now uh to enter the the other part of the question I'm focused on um learning about brand stuff right now so brand is my big topic that I've been diving really deep on brand and media And I'll probably write a book on brand just from the findings that I have because I don't think there's many good books on brand cuz you can I could read you 20 definitions of brand and branding and they all sound like cockman and so coming up

with an operationalized version of what that means so that it can actually be useful and I I I try to learn the stuff so that I can use it and then whatever I learn I just you know Pass it Forward because branding for me despite being now quote known for this or like an organic content guy I've only been doing this two years like this is brand new to me like I you know I have way more experience on the paid outside that's what I did the last decade and I you know people got to

see a tiny taste of that when I was launching the book but that's that's the big thing is finding out what the constraint of the business is and if you need to chunk all The way up it's if you want to grow a business you have to sell more clients or make them worth more or decrease risk those are the those are the things that are going to grow the value of a company and so just simply asking the question like why do we not have 10 times more customers or why are we not making

10 times more money and then figuring out what the answer to that question is often times is the constraint just because you're saying hey I'm I'm Currently educating myself on on branding and that's fresh for you what would you say is like a maj takeaway in terms of education for the topic of branding that you're just like I wish I would have maybe known this when I started to try to learn about this two years ago this is like a Pandora's Box if I start talking about it it might be like 10 minutes so I

I can I can rip on it but like Buckle in the audience so if we look at the origins of what a brand Is right where do Brands come from Brand comes when you brand cattle right that was the original use of a brand and so why would you brand cattle because you want to change change the behavior of people who look at the cattle so if you have a cattle that doesn't have a brand and the cattle that does the people who are looking at it will behave differently if the cat the cow doesn't

have a brand I might take the cow for myself or I might kill it or I might eat It I might do whatever but if the cow has a brand on it and I know the guy I might return the cow to him right so it changes what I do all right that's an important point so the point of a brand is to change or elicit a desired behavior in the widest percentage of your target audience all right now how do you do that you do that by making associations between something they don't know your

brand in the beginning with something that they do know that is Positive and rewarding if that's what you want right and so the index it's a 4x4 uh box of what brand really is you have the uh the the direction so you've got away from and towards and then you've got strength so very high and very low so you know if you have a really weak thing that's away from it's like I kind of don't like this thing you know slow Wi-Fi you know like whatever like bad brand on the flip side you might have

a political party which Depending on on the audience might be super strong and away from or towards now Taylor Swift for example would be someone that I would say has a very strong brand and towards there's not a lot of people who really hate Taylor Swift um and a lot of people who really love Taylor Swift right so it's positive and it's strong right somebody like Ray Romano if you heard that you know or like Tim Allen from the old sitcom days might be someone who is positive but Weak a lot of people know who

he is am I going to show up to his event probably not the idea is that in order to build a brand we simply pair things that people know with things that they don't know the things they don't know is our logo our tagline our company with things that they do know and think are positive if you were to think about the brand as a bouquet of flowers it's like having many flowers in a bouquet and so if I were to break the Bouquet and spread all the flowers there is no bouquet but simply by

gathering them together by making associations I create something new and that bundle of associations is the brand now if I were to break one of the flowers or make it rotten it would affect the appearance of the entire brand and so that's why if you make a single mistake a Dylan mulany move for Bud Light you can affect the entire brand if I get a DUI or somebody you know gets you know accused of doing Some sort of terrible heinous act right it affects the entire brand R Kelly bad brand now right despite all the

positive the one broken rose or the one rotten flower affects the entire bouquet we have to be very deliberate about what associations we want to make with our own brand so that can continue to positively associate ourselves and the point of the brand is that we get a desired action or behavior from a specific audience the idea of growing The brand a lot of times is that you sacrifice some audience for other audiences so like when I was starting making content I did it in my closet right and there were some hardcore people in the

OG mosy media days that are like I appreciate you that were like man I miss the closet videos right now I might have lost some of those people when we started making a little bit more polished videos Etc some people not all of them right I traded some I traded Losing some audience to gain more when you making a brand move you're basically always making a bet that you will gain more of your desired audience than you lose by making a change and so you can approximate or slowly move a brand over time by making

more associations in One Direction and fewer associations in the other and so that's how you can move a brand over time Bud Light made a wrong bet they thought and maybe this is just a corporate group think right that if They made an association d m that they were going to get more people to buy their beer that was I mean fundamentally that's the only reason you would do it as a company right you believe that long-term you're get more people to buy your beer the problem was that wasn't true now the interesting thing is

that there probably are people who were a big fan of that move it's just that there were more people who weren't they were far away right there were more people Who were not a fan of that move and so that became an away from Association and so that is what I am trying to encapsulate and put together um into how to brand uh because now that I feel like I understand it a little bit I see it as in my opinion you know it's kind of like Neo in The Matrix when he's talking to Morpheus

and he says so you telling me that I can dodge bullets Morpheus says well when you're ready you won't have to And so we learn all these tactics about sales and marketing and show up rates and cro hacks and all this [ __ ] but if you have a brand if you see the Matrix everyone shows up to your calls no one has price objections everyone is excited and refers their friends it just takes longer to make associations because fundamentally all branding is is teaching you were teaching someone to do something you want them to

behave a certain way and you have this red red Card and when you see red it means stop that's all we're doing so green lights have strong associ strong Brands they're positive everyone loves green lights right like it's a simple thing just no one owns it but green lights are a great positive Association it's a great brand right and so that's that's the idea of what I'm what I'm kind of diving more into and I see it as the ultimate cheat code for business it just takes a long time to do and most people aren't

Patient you're telling me I can dodge business problems I'm telling you that once you have a brand they become irrelevant you talk about deleting problems as your favorite way of solving them yesh how do you decide what's deletable versus what's not because I can imagine the uh the person who really loves that strategy doing nothing and just deleting all problem so how do you prioritize a problem worth solving versus a problem that is deletable well It's just percentage likelihood of impact chunking all the way up to like will this cost me number of sales like

sales velocity will this decrease the lifetime value of customers and will this increase or decrease the likel that this that whatever I'm doing right now continues to occur so we're trying to value a company right we look at what's the sales velocity how many customers they sell what's the lifetime value of every customer because then you can Extrapolate what their run rate's going to be at at scale at Max unless we change something and then you divide that by risk which is How likely is it that there's going to be an outside event that's going

to change this thing from continuing to occur this box of making money How likely is that they will it will continue to grow or at least stay the same and so if I have a problem I have to be able to track it back to one of those three things and if It doesn't really track one of those three things or there's another problem that has a much higher likelihood impact in terms of it's higher likely and it has a greater effect size then I'm going to prioritize that it's just that often times if someone's

like man I really think we should change the colors on the site I would just say like what's the likelihood like I have been notorious for having ugly as [ __ ] sites my entire career and you can make branding make Associations and I think there's there's an argument there but what's the likelihood that it's going to affect how many companies do deal with us it hasn't up to this point and so is it a constraint of the business no is it something that I could improve absolutely there's also a hundred other things I could

improve I could also send more emails which I don't do like there's lots of things I could do but what are the few things or the one thing That matters most which then Lads back up to what is the constraint of the business if I look at the highest pric competitor in my market and I one up them and then they one up me potentially like is there ever a point in which we just say like we're priced premium enough or do we always have to go for the top like how do you make the

determination of Premium there's basically four positions in the market you have luxury all the way at the top Which is technically a VIN good which basic which means uh when I increase the price demand goes up and that's because there's an association with the price that makes it more valuable so the fact that everyone knows how expensive it is affects the value that I get that I get from it the fact that everyone knows the Rolex is 100 Grand the one that I'm wearing whatever then I actually M it makes the Rolex more valuable so

it becomes a virtuous cycle which is why Lvmh is one of the most valuable companies in the world then you have premium which is basically the above average so it's there you have to pair utility with the premium in luxury the pre the the extra price tag is the value where whereas with premium like BMW is premium they're not luxury they're a little bit better at a lot of stuff and so you pay a premium because it is a little bit they use better materials it breaks less whatever right and so then You have your

you know your mid your your run-of-the-mill your commoditized space which sucks and then you have your lowcost leaders which they make their entire business on how can I drive uh efficiencies and operations at all levels of the business so that I can be the lowest priced uh person in the marketplace right and still make a profit to to route to your question of like when is enough enough the key indicator for me and most of this like The the quote higher ticket world you're not luxury goods the fact that it's expensive is not the reason

that people want to buy it right it's so it's actually technically a premium I'm more extreme about the price to Value discrepancy than anything else and a lot of people get into trouble because they raise the price so much that it is it's just an excess of the value they provide and so then they actually create a negative experience like if Chipotle Were $50 people would probably not not like Chipotle even though the product is really good but at $50 I don't know and so the reason Chipotle is so viral you know what I mean

is like the price Dev value discrepancy is so good that they tell their friends right and so that's where this kind of marriage of how can I just shortcircuit people's brains from value perspective which is what I what I try to do with the books and the courses so that it becomes viral on its own and Then my cost dual car customers is zero and so then everything after that is just gravy are the four variables when you're using this you've got the price the value at the top which is what they get right the

price is what they pay you've got your cost of goods to deliver and then you have your profit left over and so it's playing with those four variables so that you can maximize the the amount of absolute profit that the company makes pricing High has become Shorthand and where I think people get a lot of benefit from the offers book is that when you price higher you automatically weed out shitty customers and I think many times that is the real reason that a lot of people's businesses grow from that price now obviously there's more profit

there's you have access things that you can that you can deliver on um but a lot of people don't actually take that excess money to create a better experience they do a Gotcha and then they never get anything from that customer again and so that's the wrong way to use it but if I had to think like okay what are the reasons that you know a company might be successful that does charge premium is that they actually reinvest the the the premium price into a superior product and they are very clear about the Avatar that

they go after and what the quantitative requirements are that are black and white that they know from Looking at their best customers their top 20 top 5% of customers and then saying we're only going to cater to these customers in the future because the likely that we can give them a great outcome is higher and then that can create you know you can Merit or earn the premium that you have because you have data that supports that if you are this type of person we can get you this type of result what does the ideal

experience with an accounting firm look Like to you and I asked because one of the things that stuck with me um is you said you've never done your own books like you've always considered that something that was delegatable important to delegate you've also referenced bringing I believe accountants inhouse kind of going back and forth between Outsource and in-house so what does that ideal relationship look like to you now and maybe what did that ideal relationship look like when you were Going through your first you know seven figure and eight fig company a lot of Professional

Services should look at why for inspiration you're like what does that even mean you don't you don't want to like clap when the Wi-Fi is working you just notice when it doesn't and so you just want it to be in the background you just want it to work right so a lot of companies are like that like there's a lot of services that people think they need to like over you know communicate Stuff on like I just want the financials to be accurate and I want them to be timely that's it and I want things

broken down in a way that allows me to make business decisions and that's where like I think the the the top tier of accountants transform into fractional CFO and CFO kind of materials where they actually help you use this data to make informed decisions about the business is there a way that I can translate what we do into how it would affect a business Owner's life so I'll tell you a little story because I think this might be really Rel this will be really relevant for you guys so one of our portfolio companies um has

had a ton of growth three years they went from one location to I think we're at 38 locations now right all self-funded off cash flow all right so really really tremendous growth uh in 3 years years and it's compounding so it's growing faster and faster and when we were at about 30 locations we Were stuck at 30 locations for like two quarters and so I got on the phone with the CEO and he was like dude I just I just feel like I don't know how many locations I can open based on cash flow and

cuz they had net receivables were a little bit extended things like that right I I like shook the screen for because it was Zoom call um I was like I need you to freeze frame this feeling you have right now I was like okay I was like think about this feeling feeling You have I was like what you are feeling is finance as the constraint of your business you do not have a finance function that is operationalized enough like you do not like you are underdeveloped in the finance function you have a bookkeeper who's not

that good as soon as he like I could see it just clicked I was like that is the constraint of the business until we get the finance function in you're going to just be operating blind and then once You know we have this much cash flow we can open two locations a month or three locations a month then you can be more aggressive with everything else because you're confident that you're not bankrupting the company accidentally on your own if I were an accounting firm I would try and pinpoint the problems and relate them to how

it's going to affect growth in the business like how is the constraint so that you can talk in the language that a business owner is going To understand like they just how many I'll bet you like if I could see everyone's hands how many people in your audience all the business owner does is go to the right go to the bottom and say so we made more money this month great and so I think adding that level of strategy of like like by the way I think this is a little fat compared to other companies

that we're looking at this is a little bit under compared to other companies we're Looking at and this might be an area of opportunity little things like that that actually add value to the business if I were somebody who is in charge of account I'd like to get this answer in less than 60 seconds because I have I know we got to go and I want to be respectful of your time this has been incredibly informative how much of a skill should you develop or how much would you educate yourself before hiring for it so

for example like do I need to Be a sales manager before hiring for Sales Management what you what you hit at is one of the hardest parts of business you need to make an informed decision without context which is why being an entrepreneur you end up becoming a jack of all trades so that you can have enough context to make at least an informed decision and so I'm going to steal a playbook out of oops wrong shoulder there we go out of lela's book here and I'll give you my tactic Around this which is you

want to interview for people who are sales managers and you don't want to hire anyone for a little bit which sounds tough but what you want to do is you basically want to interview for information now if you meet a a a gold star that's amazing but you want to talk to people and if you know more about it than they do they should be teaching you and once you talk to 10 20 people they're Basically like expert interviews for what it should look like and so then you get a very good idea of what

the role should look like after listening to people and you'll get an understanding of the level of nuance and I'll give you this one little tidbit that is super powerful F when it comes to judging skill the quality and quantity of data that someone chooses to collect around their particular department is almost directly proportional to their skill and So for example I have lots of marketers who are like I'm an amaz my product's amazing and I say cool tell me your metrics are I like what's time to Value right what are the key activation points

like what's churn right like just some of these metrics and they're like well dude our refund rate's really low right but I'm like okay I was like well what about the marketing side they're like well cpms are this this is our clickthrough rates this is our you know This is our conversion on the page this is our percentage the schedule this is our percentage the show this is a percentage open rate this is percentage click like they go through all this stuff and I'm like right so I can see very clearly that you're a better

marketer than you are at product and so simply getting an idea of the quality and quantity of the data that someone collects around their Department we get like when we hired our director of People it was the first time that I had someone actually tell me metrics I'd never heard of and I was like she's the lady she's the gal loves you and that's how we are here and I literally got like 150 questions I had to narrow it down to five or six it was so hard you mentioned something in the100 million offer that

to hit your first 100K you don't need a lot you just need an offer to sell and that's exactly what we did uh but right now we are hitting a bottleneck and our Biggest bottleneck is operations and you know I want to know how exactly you got out of gym launch operation because we have a very similar business model for I know service providers for what what service providers mostly agencies and digital Consultants with lead generation and sales the way we do it is with a one-on-one Consulting and in a group coaching format so coaching

models in general tend to be very difficult to scale because the reason people come to You is for expertise in order to get other people to provide that expertise then you have to create lots of experts who then eventually walk off and start the business on your behalf and take your customers with them I would say like there's a couple different approaches so the first is that there's the law firm and the McKenzie kind of consult model there's a a track to become a partner in the business and then that's kind of the whole business

Structure so there's a a way to share in the profits they do make lots of money but the owners of those end up having to Lo delute themselves out not that there's anything wrong with that you can make lots of money doing it but that is that is a a version of the model the other way is to productize the basically get narrower on the solution that you're providing and productize it to the greatest degree possible so that anyone could do it even if they have no Knowledge of it in terms of like the implementation

of the thing that is more the direction that we went uh with gym lach cuz we had a very specific we don't even we didn't even work with all gyms just to show how narrow we were with it we worked with only micro gym owners we have now expanded to health clubs as well the five or six years that I was doing it before we sold we were only micro gims and so just to show like how incredibly Narrow that was someone had to have at least 30 members assigned lease one employee and be running

this type of model for them to be a customer and then if they fit all those things we could generate a lot of Revenue using our playbooks I could have somebody who had no gym industry no expert whatsoever and still say send this email say these words here's 10 recordings of people doing this exact same thing this is the expected value and so that's like from The delivery perspective now operating the business overall comes from talent and being able to find people who are just as smarter smarter than you and people say that but like

when you actually meet somebody who's smarter than you and then they admire an aspect of what you've done so that they start to work for you that's where you really start to have the magic happen What are some of the things that agency owner should avoid doing if they ever want to Scale any your experience okay so what thing should an agency owner avoid when they're trying to scale yep yep I mean the same things that any business owner would want to avoid when they're scaling agencies tend to fall into the you know they they

tend to fall into the bucket of trying to be everything to everyone so maintaining the discipline to be very focused at the problem that you're solving and who you're solving it for and I think that solves 90% of the Problems from a strategic perspective for any small business owner including an agency the second piece is that if you're in a service based business the quality of your Talent is going to be directly proportional to your growth because you're you're basically selling people fractionalized people that's what service businesses are right you're selling some level of training

that you're able to give and having more efficiency than an individual business Owner would have like the the classic you know small business owner Leen agency that charges $2,000 a month the idea is that if they were to hire somebody full-time to run these ads it would cost them5 or $6,000 a month but you have copywriters designers and media buyers and P designers who all work a fraction of their time for this one business and they can get it more efficiently and you can still do it at good margins right like that's Fundamentally what service

businesses are and so the quality of that talent and the culture that you have at the business to attract and keep that Talent um are the kind of the key or The crucial pieces of the success of the model you mentioned something in the book where you mentioned the agency model where you hire an agency to learn the stuff and you internalize it and then when you have stopped learning you replace an agency but me teaching agency Models agency businesses how to become irreplaceable in your perspective how should one go there should we start with

one business then upsell the next and upsell the next and upsell the next offer creating the irresistible offer isn't necessarily about having a zillion products it's more about explaining and communicating the many small things that you have to do anyways and so rather than saying like I'm going to generate leads for you that's like one outcome But there's many things that have to happen along the way you have to create landing pages you have to write copy you have to you have to have followup sequences you have to work work the leads you have to

have scheduling you have to you know you have to split test you have to make new creative like there's lots of things that have to happen in order to just get the single result and it's just making sure that we're delineating those things because An unbeknownst or an ignorant uh business owner I said ignorant in the technical sense like they just don't know um would have no idea what you're doing you're like yeah just go get me leads it's like well it's much easier said than done and if I was doing it from an outbound

perspective might be like well I have to warm up domains I have to you know spin up different accounts I have to split test different email openers I have to like you have to Explain all the steps and they're like wow there's a lot more work that goes into this now I can I can appropriately value this price tag that you've ascribe to whatever the service is so that's piece one in order to be Irreplaceable often times you'd have to go after significantly bigger customers if you're an agency for Fortune 1000 for Fortune 500 companies

it would be so costly for them to spin up at scale the level of talent that's required to do like Programmatic media buys across 100 different Platforms in different countries and then the likelihood that they want to leave or do this on their own is significantly lower the idea that any service provider is going to become come truly Irreplaceable like any business can do anything on their own and I would prefer to put myself out of business and do it in a way that aligns my customers with me than have a model that I know

is is basically has a timer For obsolescence not everybody works with Fortune 500 companies right sometimes you many people uh they might work with you know small and medium businesses they help them let's say you become a marketing agency for chiropractors in New York and you become so good at that in general people won't leave you because you're just good at that particular service and the thing is small business owners are really tough because they're the problem like they're Super erratic they're super volatile their cash flow is Lumpy they don't know where their next paycheck

is going to come from and to no fault of your own they can cancel because they just can't make payroll that month look at the biggest agencies that exist ogal V you have Vayner you know's up there now who do they service massive companies why because the quality of the customers are higher and so they know that when they sign a contract they actually stick with The contract we all know that if you have a small business owner who signs a 12-month agreement for agency Services he's good for 3 months the biggest model that I've

seen for for small business owners from a marketing perspective um was an agency that was running $300 a month $300 a month price point because they had figured out and like there's a key here is that like those business owners are so price sensitive it's not whether you can sell them it's whether You can keep them on their worst month the price isn't based on the value that you can deliver on the best month but how much you can keep on the worst month because that's where the churn comes in the best model that I

saw uh was doing SEO for small business owners and they had completely automated every aspect of it um it was basically Just A playbook and I think it generated reviews and maybe a couple phone calls a month but at a $300 month price point if they got One or two phone calls a month it was worth it so the bar to get over to to ascribe value and especially on something that I call like a nuisance business where it's like I know I should be maintaining my reputation I know I should be doing some of

this stuff okay for $200 or $300 a month I don't feel guilty about not doing it because this is being handled you're in a Consulting model right what happens is some clients actually do the work and they get Results and some clients they need a lot of follow-ups and they need a lot of accountability from you how do you maintain that like I know I'm getting very nitty-gritty into this but D I'm I'm good with NY gry you talk to basically one of the core problems of all B2B businesses which is that you end up

taking over the person's entire business until eventually they're like yeah if you could just send me a check every month and you do you run the Business that would be awesome that's why being very disciplined about problem definition from the services that you provide number one and here's the one that everyone messes up who you pick it's not like even if you work with chiropractors right as that as that example you don't necessarily even want to work with all chiropractors you look at the customers that you have right now that are the best customers like

the top 20% or the top 10% you say okay what Characteristics do these people have that other people don't have in my client list and that's both from the soft pers the hard perspective what are the quantitative differences they have a certain size business they're over a certain amount of month they have a number of locations they have a certain amount of employees number of customers like you just get all that data on them and then also what was the experience that they went through when working with Me and was it different than some of

my other customers because one of the the things that happens often times is that the first few customers you get become really sticky and then you start scaling and then you have this front revolving door but you still have your core business of these people that you had in the beginning right so why is that because these people got more help from you and actually got delivered more value and then you basically tried to Scale without scaling the value that you delivered to the original customers right and so if you're at whatever 15,000 a month

and you've got five customers and they're all like having a great experience and you keep signing people on they keep leaving it's like okay well instead of me trying to sell five this month why don't I just sell one and do a great job and then not lose them and like that's the key to compounding in a service business once You pay down the IGN Bas pay down the inefficiencies of them not knowing what to do yet and being very specific about who you serve and who you don't like we didn't work with personal trainers

cycling Studios and like yoga studios 100% could use our model we didn't work with them because the founders tended to be psychologically different their adherence was super low because they just come from a totally different worldview than the guys who are more Fitness weight loss transformation focused even though at the end of the day it's just a membership with a back room where people work out but mindset wise they had a very hard time um kind of adopting a different model even though monetarily it totally made sense which means you need to have discipline to

say no dude this is so hard to say no to this new upcoming business because you know it can help them but they just don't fit your criteria 100% dude I have 13 companies I get 1,800 a day who reach out who right so you have to say no it feels weird to like say no because a lot the I get so we specifically that's why most people stay poor they can't say no and what happens is you go for the short-term money and you sacrifice the long-term money because then you just get in this

operational Rat Race and then you scale up your your costs to meet the fact that you took on all these customers that you shouldn't have taken On to begin with and then you have to pay them every single month so then you have to keep on taking on customers that you shouldn't have taken on to begin with and you get in this vicious cycle that you can't get out of until you downsize you take two steps back five steps back fix your ego and then say I'm only working with these customers because ethically I know

that these are the ones that I have the highest likely to success with everyone else I have Mediocre success and I can say it's their fault I can say it's my fault it doesn't really matter all that I know is that the likel that they achieve what I think they should achieve is low period so I'm not going to sell them aren't you afraid that the T will go smaller like of course you can build a niche an inch inch wide and a mile deep there's 30 million small businesses you don't need to service them

you like there's there's 50,000 gyms that fit the model that we Have now if you want to build A10 billion company then yeah you're going to have to go after a bigger problem but if you want to build a 9 fig company you can that in almost any industry so you mentioned that when you started out you started with the first five customer framework that was awesome and then you just grew with referrals so this question came from a fitness consultant herself and she said that with the competition that the fitness Market is How do

you stand out honestly it's just being authentic 99% of the fitness Market just looks at what other influencers doing and say I'll just I'll copy that and I'll do stuff like that but then you just do a worse version of what somebody's already doing zooming all the way out fitness like there's no secret work out more stop eating shitty you'll look better over a longer time Horizon like that's what it is right there's going to be a subset of an Audience that is like you genuinely and they want to get their they could get Fitness

information from Alex but if I'm a you know a 45-year-old Indian mother I'm probably not going to be her source for Fitness information even if I see the identical stuff as another 45-year-old uh Indian mother now if that 45-year-old Indian mother looks at my fitness content and tries to make content like mine it's going to seem weird you can stick out by actually Being yourself I know it sounds trite but the real like this is real there's so many unique aspects of someone's life and the things they're interested in compared to other people that if

you just lean into those differences there those unique as the things that you're actually into that are weird right Rogan's into aliens and mushrooms and comedy and fighting who would have told him like you should be Joe Rogan and you're going to have people who like Some aspects and then the super fans will be people who overlap on two or three of the interests that you have if you picked my brand it be like dessert working out philosophy Business Marketing sales they're different they're people who follow me because they only like the business money stuff

there people who follow me because they only like the philosophy stuff there people who follow me because they just think the desserts and calav stuff is Funny like it just depends on what someone's going to come in for but if you're just you then you can stick with it for the long term and that's what's going to build over time and make you quote stand out because there is only one version of you that's lived your life so just live it publicly thanks a lot man I think we are at the end of our 10

year thank you very much for being uh here and keep writing great books I hope I hope you make so much money from the Book um and just and crush it because at the end of the day there's more problems than anyone person can solve and I hope we build businesses to solve them so explain to me how the franchise works yeah so we have a lot of clients that want to work with us and we have a lot of closers that want to work with us and Yan and I we just can't manage everything

ourselves it's just too many people we had two options option number one is Place managers to replace us Right and then give like two to three accounts client accounts to each manager so they can manage them obviously and we can scale that way the problem with that was that managers only get paid so much and they only care so much about the business itself right but when it comes to Partners they get 50% cut they get exactly what we are getting 50/50 the franchise thing is interesting because I feel like you would be able to

achieve that simply with a profit share rather Than getting investment and equity and all like the because if if speed is the goal then you can basically do the makeshift in terms because like they're I'm assuming many of them aren't planning on selling right and so the only reason the equity would be valuable is if they're going to sell it sometime in the future and buying quote more locations isn't really a thing either I would imagine that just like it'd be a lot faster to just contract you know Basically put put legal language around getting

a profit share in the structure you know the cut that you have like many companies have scaled sales orgs you know what I mean like Insurance brokerages are just massive sales orgs like real estate agents are massive sales orgs and so um they don't necessarily have Equity you know what I mean Equity deals cuz those can just get litigious and there's lawyers years and it just T I'm sure you guys have already Seen this like it just takes more time and I feel like there might be like you could probably remove a couple of the

components to get the same behavior which is ultimately what you're trying to do is get people who act like owners so that's just that's me just shooting right off the cuff of just looking at it so that's kind of why we kind of came up with the franchise model to put like a nice barrier there so it's for people who like have the experience in the Space of running an agency or like scaling managing High ticket sales teams but now you're getting like the infrastructure that we've kind of built over the past four years I

mean you could still do all that without the without the franchise agreement but what problem are you solving why are you not bigger it's a management problem just in general with bringing on more partners and doing it faster and doing it more in a more organized way so what you said it Does make sense because that would remove some friction and it would allow us to bring more people without risking you know the the equity in any way I mean based on the model you have you guys can Own 100% of the you know like

the franchise or but even if you if it was just like you know the the main Co you can still have stream because you have the software so tracking becomes the issue but since you already have that infrastructure built the ability to Just make sure that they get overrides now if you want to put you know a $10,000 Buy in or something just because you feel like that increases commitment levels I mean that's fine um but if you look at like a Chick-fil-A for example are you familiar with their their model yeah right and so

that you know each location probably cost I actually don't know the buildout cost but I would imagine it costs at least a million probably one and a half to build a Location for Chick-fil-A and The Operators put $10,000 in and so it's more of a symbolic gesture than it is like them actually you know contributing Capital to whatever the thing is but they actually don't own equity in the business so they get a 50/50 profit share after a royalty that goes to holdco just looking at what they've been able to build it seems that that

that structure works without the equity um in in terms of eliciting the behavior that You guys are going for but from everything that you said even right at the beginning you were like well uh we needed something that was more scalable because obviously we had lots of people there's many people who have scaled businesses with lots of people and so it sounds like it's actually a talent defic defit like you need to hire somebody uh or bring someone who's a high level operator who has scaled a sales-driven org what's what's Revenue right now uh Revenue

for the phone sales organization sure well every month is different around like four million right now per month is that gmv so like gross gross sales volume and then you're getting whatever 20 25% on that yeah so you'd be looking at a at somebody who's scaled a sales work from you know 10 million to 100 million and who's really Ops heavy so you'd want somebody who looks like who's very uh very leadership driven not a systems person wrong that's not the Right person you're looking for somebody who's who you admire take this away I mean

it you need an adult right it doesn't that's not a function of age just saying you need someone who has experience doing this uh because if I were looking at like if I were going to go buy in right to phone sales the first thing I would do is hire an operator because right now all the things that you've described have been people issues so if I'm operating on the theory of Constraint which is what we do I would say okay well then people issues seem to be the main problem for this business so I'm

going to hire somebody who has experience in this particular domain in a sales or who has gone from X to Z million dooll question where do you find such people well you guys are sales guys right so it's outbound outbound is the easiest thing to do uh you could also run ads but the best people already have jobs uh and I mean you guys know this From from your business right and so it would be it would be Outreach Outreach is the is the easiest thing to do go to LinkedIn and Linkedin has so many

tools now like search for people who meet these you know these three or four job titles um probably like a an a senior vice president or V you know a VP of sales uh sales director might be a little too low but probably a VP of sales uh or VP of sales Ops something like that uh like you'll have to play With the title it is kind of like an ad in advertising like you have to play to figure out when you get the right avatars on the phone uh but as soon as you get

it to click then you're like okay these are the types of people I want and then you talk to as many as you can and the limit tests that I have for highle town is that I should be learning from them on the phone call so if I feel like I have to teach them stuff they're not the right person like if they're Teaching me things which is also great because then you can keep taking notes and after 20 or 30 phone calls you're like okay I have a very good idea of what excellent looks

like and I can make a more educated decision on the type of person that I want but that person who's very operational should be a people- driven leader especially in this type of workg for the second part of this call um we would like to just bring our partners too and uh just ask some sales Question in general and learn from you you know with our model do you believe that we should utilize groups selling methods like webinars seminars events that way we can compress the time frame we make money or just focus on one

toone sales I think it depends on on the product that's being sold usually products above $30,000 and that's why we're focusing on like one to one model right now I think you can do so the way that I like Building uh sales orgs is having repeated sales materials and then individualized so like repeated sales materials are going to be like the vsls the webinars things like that but you're not you're not closing on those webinars you're just qualifying in setting and so I want say sales guys to be doing as little information spewing as humanly

possible and really being able to start the call with so you ready to buy and then yes or no and then work your way so You have 60 Minutes to close rather than okay great now like Discovery like let me talk to you about how we might be able to help you because if you because then sales guys get really tired of saying the exact same pitch then they sound like robots then they get zoned out because they're saying something they're not listening and so the talk ratios get way off um and so I prefer

having as much of the standardized information share sharing being done Before the call so that the closer time can be maximized to closing rather than just sh like teaching but I wouldn't be trying to pitch 30k stuff directly to a payment page I'd probably be pitching that to you know qualifier set calls yeah that's how we're uh we're doing it right now but we've seen some other people they have like live webinars you know and they have the sales guys on the live webinars and even though they're selling super high ticket offers they Try to

like do that communication SL information SE of the call like just through the chat chat and then once they show a level of Interest then they get them on the call well they're using the webinar as the set correct at the end of the day there's a certain amount of information that someone needs to have or certain amount of like exposure that they have to have to a brand or a product for them to you know make a buying decision and so that can be a Long set and then a short close it can be

a set webinar close it can be a long webinar then a close like there's just a certain amount of selling you know the runway for the plane has to be a certain length doesn't really matter where you slice it it just has like this is amount that the majority of people need to have for making a purchasing decision now some people might need less and that's okay cuz they probably got it beforehand from other things that they've consumed So if you want to say okay how do I sell why I want to increase the likelihood

that some that the the highest percentage of people buy then I want to create an experience that the highest percentage people get all of the information that they need prior to the closing conversation and so if you do a webinar as a big set thing I mean to me that's the same I mean that's all the same like if you run ads to webinar ads to vssl then they go to auler or you Know if you have a live call team where you have a number that becomes the CTA and then the call teams answering

calls in real time operationally I wouldn't I wouldn't upend my entire business because of just a slightly different way of doing it because I I think it's more happy to Glad um as long as your throughput is good and you're you know like you're making money and you're growing right now I would I don't know if that would be the constraint of the Business so like I think the stuff that we were talking about earlier like that seems more of the constraint than kind of the the the individual tactics you know in in the example

you gave what show method for building trust and credibility on a sales cool um in like the fastest way possible like what method what approach do you often take for that well I mean brand matters more than anything uh like right off the bat and the the you know the the vast Majority of like the the hard closing tactics and hard sales tactics have to exist in lie of not having a brand right it's like we have to make up all this hard stuff uh it's kind of like in The Matrix when he's like uh

when you're good enough you won't have to dodge bullets or like you saying I can dodge bullets it's like well when you're ready you won't have to so like the brand is when you're ready you won't have to but if you don't have that which is the big Thing that you should have but if you don't have that then it's the same things that you would normally do you're going to try and find common ground be relatable uh trying like a lot of it just comes down to how well do you understand the Avatar right

so I think a lot of sales teams under under prepare by under understanding the Avatar the Prospect and over educate on the product like if I understand what a 45-year-old woman's suffering from I can basically Do the same sales call and at the end of the call say I can pitch therapy I can pitch I can pitch weight loss I can pitch a gym membership I could pitch you know I could pick cleaning services it doesn't really matter because if I understand the Avatar really well I'll be able to speak to her pains and what

you said is true like brand is extremely powerful and with the clients that we take on for our agency do you recommend that we go for people of very strong Brands and take that approach like that's that should always be the Focus right like always go for the brand and from there yeah strong brand strong product for sure fair question though yeah relatability Common Ground what's been the number one reason you seen show up rates increase or decrease uh it's it's 100 gold b's no silver bullets so when we when we go into a company

we have a something called a lead nurture checklist and so it's just like 17 Things that we do and each one of them adds like 2 to 5% and so that's how we can get something from like 30 40% show rates to 85% show rates it's just doing a lot of little things so I I would not look for like the one trick it's just like okay how quickly are we responding how how much information do we provide them beforehand are we providing a personalized video like can we give them a gift card for showing

up that they can share a coffee with us like just how Many different things can we add in to increase the likelihood that they show can we can we create an open loop between the set and the close that they're going to get information that they are they had got their their their interest peak is there a way that we can say that we're going to show them that we're going to do a certain amount of work on their behalf then we're going to give them the deliverable on the next call right so they have

a huge incentive They have huge curiosity so that they would want to show up like this is particularly true an insurance product so like we have an insurance company and so like we create personalized insurance plans it's like okay well how do we get more people to show up but we don't want to send them the insurance plan that we're going to make them before the call we just say we'll explain it to you on the call yeah we Implement a lot of those tactics as well probably there's Some stuff that you're doing that we

currently don't have at the moment as well I don't know if it makes sense to share on this call but you said those kind of like 17 things is aul you can maybe like send it to us no so um oh no man all right honestly it really depends on what the business is if we're looking at an insurance business versus a weight loss business like it's more applying a principle across but that being said the big one that's that's probably missing Like it's usually the big obvious thing which is we can always do the

hundreds of little tax itics but you're trying to dodge bullets rather than like winning before you start which is like why why do so few people trust you like that's the big that's the big like I see the Matrix and then everything else becomes irrelevant so for acquisition. comom our show rate on calls is nearly 100% so if we call some if we say hey we'd like to find out more about your business today Is Tuesday our next opening is Thursday of next week so 9 days from now show rate still 100% because of brand

we actually don't need to do any of those tactics now we have those tactics so that we can help the the companies that don't have those level of Brands but like you want to Stack the deck you want to answer the question why does no one trust me and solve that otherwise you're always going to deal with these issues like do the fundamentals for sure but The big the big things that'll matter most is who you're choosing as your customers so Vista you guys heard of Vista private Equity so they're the biggest they're the biggest

software private Equity they've got a gazillion dollars whatever the way that they look at a business is that they do a customer analysis and so they look for the 8020 right they look for the 20% of customers that are worth more than everyone else and they then do a customer analysis and Say what do these 20% have that the other 80% don't and then they exclusively look for customers that are that 20% and then they say no to everyone else and so then what happens is if the sales velocity remains unchange they 5x the business

so sometimes you'll make more money just by saying no so you can have the capacity to say yes to the few guys that matter more and if you're not getting more of those people then solving that problem Rather than saying like how do I keep getting how do I how do I polish a turd instead of going from that perspective just saying like maybe I just should not try to polish turds because it's still a turd right and like how do I get the people who are much better companies to be attracted to my business

and if you have a customer list that people aspire to be like then you'll get more and more people like that's where that's like kind of The Branding side for you guys Which is how can I associate with better quality Brands so that other better quality Brands realize that what we do is legit you can try and optimize the [ __ ] out of something but like usually it's the big obvious stuff and we don't look at the big obvious stuff because they're actually harder problems to solve and they take longer but it's where the

most value is unlocked what's the ideal frequency and the topics of coaching calls that would increase the Overall performance of Setters and closers so I would say it's less about the topics of the calls and more about what you're training repeatedly and what you're rewarding so sales is one of those really interesting businesses or like you know departments that you can see very clearly like you guys have probably seen different sales teams and they have very different cultures and so it'd be like what are the cultures that create the highest performance in our Experience you

know you can go on all on either extreme you can have a very punishment driven culture which is very individualistic or you can have a very team driven culture which is typically reward-based what you want to reward is adherence to the script not closing like that's a huge shift for most sales teams if you reward adherance to the script then what happens is you get everyone to follow the script now if they aren't closing then you need to change the Script but it's much easier to change the script once you've taught adherence than it is

to have a bunch of Lone wolves who do anything they can to close the deal which then impacts your brand so like a really simple you know tactic we did at one of our chains was we just said cool we'll give them five bucks if they follow the script whether they close the now mind you that the tickets are smaller right it's just higher higher volume we'll give them five bucks If they follow the script and if they close or they don't close they get paid either way you know what's interesting the thing they're most

curious about when they send their managers is do I get the five bucks for the adherence even though they make three times more on the close so we still we still give them benefits for closing but they want to know whether they got the approval of the manager because the $5 actually matters less than the approval from the Manager saying you did a good job the $5 is more of a token that makes a lot of sense and if you can imagine cuz everybody here is sold before if you got on a call and you

knew that you could get paid no matter what just for following the process it takes some of the pressure off like think about like you hop in the car like I'm just going to make sure that I get my bone no matter what on on the adherence but guess what happens when everybody hears To the script you [ __ ] close more there you go because sales is one of the biggest issues where you have false positives where someone goes Rogue and then closes and basically gets reinforced for doing the wrong thing and then they

start doing the thing that they did that one time that worked and then it doesn't work over and over again so they Chang their behavior they learn the wrong thing right and so then you have to course correct right that's why Sales like it's all about adherence and then then we can be really strategic about really making sure the script is beautiful and crisp and concise uh and we just and we just drill the team on adherence the big topic I want to address is how to sell emerging Tech you don't sell emerging Tech you

it's it's selling the plain flight versus the vacation if I could tell you that your financials would be absolutely accurate and updated in real time would you want That how how much would you be willing to pay compared to what you currently pay a lot more great what if I said I could do it for less than what you're currently paying are you interested great this is what I need the fact that I'm using AI is irrelevant you just sell the outcome and then you not really no one cares AI is great for YouTube clickbait

but for for sales it's irrelevant that was like one of the main wanted to get across what else you want To do for the next 16 you must be getting a ton of businesses didn't you some a lot of AI businesses that are coming across your disc right now at acquisition. comom what are the things that's making that sort of jumping out at you and what are the of commonalities between things that make you really go oh wow that that seems to have some kind of staying power uh the vast majority of AI businesses that

I look at are are dog [ __ ] and so They're either they're not real AI which is 99% of them they're basically just built on chaty PT which is fine there's nothing wrong with that but I'm just like let's not claim that we're creating AGI on the other hand it's it's people who' have no business Acumen and so they're like it's totally different like the the normal laws of business don't apply it's like they have always applied and they will always apply because they're just how business works right Those are the the the vast

majority of people that I see in that I do think that AI implementation for Main Street is an enormous opportunity so aiying if you will and I I don't think I think your first conclusion is Right which is being the custom guy is tough you know I mean it's just it's it's all things to all people which is nothing to no one if I'm talking to the audience now if you guys want to get into this world what you want to do is look at an industry or An avatar that you understand well and so

one of the things that like why combinator and some of these great like you know legendary investors look at is how much time a Founder has suffered and lived through a problem I can talk about breathing cuz I've had two nose surgeries I've been falling asleep on my hand since I was in eth grade so that I could breathe so like I've lived with the problem for a long time and I've tried many different types of solutions So I have tons of Industry knowledge if I were to start a company like that if you have

a job right now or have had any type of job you've worked in a business that's a great Baseline of background knowledge that's difficult to just jump like even if you were a server at a restaurant for 2 years you still will probably know more about restaurants than 99% of people who aren't in the restaurant industry like I don't know anything about how restaurants work cuz I've just never really worked in one you could probably be aware of because you now also have this understanding of what AI can do to think okay there's a hundred

problems in a restaurant is there one very specific problem that I can solve well and is very similar between restaurants CU as soon as you get the point A to point B you can create the clear value prop and you can message around that getting extremely specific which is I think what you were Saying that you give the advice to is super smart and it makes the problem set really narrow to solve so you can become an expert that's a an inch wide and a mile deep the exact same thing the reason that most people

don't do that when they're starting out is because you don't have enough demand you have so few leads that come to you that you're like why I mean [ __ ] I need to pay rent this month and I only got four leads this month and all four are completely Different but I need the money and so I get it redeploy that cash into getting really concentrated on your marketing which is what offers and leads is all about so that that you can find that specific Avatar that you can over and over again repeat which

is also why referrals are so strong because if you do a good job they will send you other people just like them the the question is is yes I can pick a niche to do this AI automation I can build AI Solutions And a sort of targeted one but what is the opportunity that I should Target within the niche and that comes down to either a as you said industry experience that you already have or sort of B what we've said is finding some sort of partner within the industry so we say you can either

try to pay them for the time as a consultant or you can just message enough people and say hey look I'm looking to bring these kind of solutions to the industry would you be Willing on working working on this with me I need a little bit of your specific knowledge but in exchange I'll create this thing and you can refer you can basically have first STS on sharing it to your network and you can make some money that way so yeah I definitely wouldn't do it as a Consulting relationship the the thing that you're going

to be selling is the product and so having a consultant who's the one who's in charge of the primary value That you're driving is not a good idea and so you'd want somebody who's long-term incentivized to continually improve the product continue to innovate the product see the things that are coming around the corner to keep it up to date make it better make it stronger Etc it really just comes down to how to have a normal Business Partnership so all the normal rules of business apply and this person has some specific knowledge you don't have

and you should Ideally have specific knowledge they don't have they should be asking the question like why do I partner with the people in your community if I'm an AI developer right if you're trying to figure out which of the problems to solve in an industry it's just value created times ease of implementation that's the equation which if you chunk it up it's number of potential customers times gross profit per customer if I have six different problems I could Potentially solve which one has way more people who have it which one's easier to do which

one unlocks the most value one thing that we starting to see as as us ourselves actually run and build one of these these AI automation agencies now ai development company as well is that by building a a development team that is capable what is is your take and your experience with how important that development resource is I mean it's sure the event you must know working with Developers can be a complete plan but having them inhouse and having a really good team to rely on as you shoot for those big opportunities can be key what

what's your experience being like this and how important do you think that development resources when you're going for those bigger plays very okay I mean we were thinking the same thing so I was glad to know you agree on that it's the product like if You're in a service business the quality of the people that you Ed to provide the service is the product and so those people usually want to be compensated well because if they are really good then the places that they're coming from will want to pay more to keep them and so

you have to give them a great place to work and a financial incentive or some upside that they get exposed to that they wouldn't otherwise like you want them to feel like owners and the Best way to do that is for them to actually be owners if you're trying to get on The Cutting Edge of Technology then actually having the people who are good at that is the business well it is a great resource to have a really killer marketing team under your belt but the the development side of things I I tend to find

at least in our experience has been a harder thing for us to to create it's hard you don't know it like it's easier for you to do the marketing stuff Because you're good at it so you know if someone's full of [ __ ] on the interview you just don't know if anyone's full of [ __ ] on the interview because you have no context the most important hire which is why I say this is you need a technical co-founder you need somebody who has a real stake in making sure that the people are coming

in are actually good not that you're checking a box and saying hey I have 14 people on my development team anybody in the in the True high-tech world knows that one amazing developer is more valuable than 100 B developers this is the hardest part of business is hiring people who are really good at something without knowing the in-depth knowledge and that's where like leveraging somebody who might not want to work for you that do think is brilliant to at least interview or double check on how good they are um is really valuable that's where like

building a network becomes Important and getting even some tests like of aptitude for them to take so that you can at least get some sort of Baseline but it's all going to be about how skilled that person is cuz ideally if they were as good as you are at marketing then you guys would probably have a really successful business we've been fortunate enough to to find that find that magical sort of technical co-founder so um we're starting to get him really well comp both getting inity As well so we are off to the RAC and

that's completely changed our business I can't even stress for for anyone of you in here that that key hire is just a complete G I'm sure you've had it Alex in your businesses where you've just found that right person and it just completely changes things all right appreciate you guys thank you and appreciate the community thank you guys for showing up hopefully the book serves you guys well how do you feel like in General do you think like the you think you brought as much value as you promised I hope so I try to answer

the questions to the best of my ability and provide value to the a so