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I've been in business for 13 years, I've sold nine companies in my last company, so for

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$46.2 million, I had acquisition.com, which right now is about $17 million a month across

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our portfolio.

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I'm going to compress 13 years of brutal business truths and lessons into this one video.

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Brutal business truth number one, sell to rich people until you have the money to sell

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all the poor people.

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The middle is where you get killed.

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Elon said, you can either do a lot of good for a small amount of people or a little good

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for a large amount of people.

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And I will tell you personally, it's way harder to do a little good for a lot of people

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than a lot of good for a small amount of people.

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There is a reason that Tesla started at the top.

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They started only selling to rich people.

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They had the roadster, which is $250,000.

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And so they sold those and then he was able to go down market one and sell $100,000 cars

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to just upper echelon of society, the wealthy.

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And then after that, he made the X, which is a little bit cheaper than that.

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And then underneath of that, he made the Model 3, which is going to be the mass model.

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And each time, it was significantly harder to do the one before because if, if you want

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to sell based on value in terms of low cost, you need to build the infrastructure for huge

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amounts of demand because the only way that you make money selling to poor people is selling

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tons and tons and tons of them.

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Look at Walmart, look at Amazon.

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These are businesses that were built for volume day one and they win on efficiency.

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That was the whole point, Amazon.

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You want to have the best selection and the lowest prices, Walmart, everyday low prices.

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They win on efficiencies like they all fly coach, they use fold out chairs, they drink

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out of paper cups, they purposely breed the culture efficiency because it's the only

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way that you can win if you sell to poor people.

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And I say poor people to be hyperbolic in terms of my language so that it drives the point

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home.

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Obviously I buy from Amazon.

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But the point is that the strategy is based on volume.

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When you've probably heard some of my other tweets around this, which is, solve rich people

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problems, they pay better.

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Or if you solve rich people problems, you get to charge rich people prices.

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This is what I think the key insight is, is that to someone who only has a thousand dollars,

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when they pay you one hundred dollars, they pay you ten percent of their net worth.

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Their expectations of what they're going to get for that hundred dollars is the same

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as a rich person giving you ten million of their hundred million dollars.

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It would be gigantic, right, in terms of their expectations.

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But getting a rich person to give you a hundred dollars, they might not even notice.

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And so the thing is that it's actually easier, in some ways, to solve rich people problems

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because they're willing to pay more in an absolute sense for lower relative value.

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And so with that extra profit or gross margin, you can absolutely over-deliver them and

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still make money and not have to learn all these things with infrastructure.

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So for example, if I wanted to start a bank, I would have to have twenty five to a hundred

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million dollars to start it up.

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But if you do that, then you have to build the infrastructure that you can handle money

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for zillions and zillions and zillions of people, a very hard business to get into.

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And so the idea is that you want to sell, at least this is my belief, is that you want

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to sell premium, you want to sell to wealthy people, you want to sell to a niche person

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that you can do a lot of good for in a very small slice because you don't have to compete

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against everyone, you can have inefficiencies and still make money without having to have

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tremendous infrastructure and skill around building it.

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Once you make a ton of money doing that, you can obviously just do more of that, which

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big fan, or you say you know what, the next thing I do, I want to do for zillions and

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zillions of people.

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And so then you build a business like a Netflix that think about how insane Netflix is.

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This is a concept.

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You pay $13 or $15 a month or whatever it is now.

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And they create movies and shows and they spend millions of dollars and they sign comedians

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and they've got all these shows that are streaming and you pay $14 a month.

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It's absurd.

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Think about it if you said, hey mom and dad, I want to start this video subscription and

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I'm going to just pay millions of dollars to get all these shows and movies made for us

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and I'm just going to charge $14.

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It would be absurd.

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That's how much value you have to provide to someone who doesn't have money to capture

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huge slices of the market.

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How are you going to beat Prime $99 a year or $129 a year whatever it is now, right?

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And with Prime, you get basically all of Netflix with Prime Video.

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You also have next day shipping, same day shipping with anything that you want to buy.

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$99 a year, $129 a year.

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If you build to sell to the masses, you need to build like you're going to sell to the

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masses and you're usually going to have to put a ton of money in for a long period of

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time because you have to have that infrastructure up front to deal with that volume to have

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such a crazy value discrepancy that someone who has no money still never wants to cancel.

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That's the key.

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Whereas if you go to wealthier people, you can get a premium, you can have five clients

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that all pay you $5,000 a month and make an amazing income and have the resources to actually

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do a good job and hire a couple of people to help you out who are competent and you can

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do that when you charge more money and those people are not the ones who are like and

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everybody's hurt seeing this meme where the $50 month customer is like, hey, so for this

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$50 a month, what am I going to get?

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That we make fun of that.

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That's the reality of if you're taking 5% of someone's paycheck.

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It means a lot to them.

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Whereas if you're going to somebody who's making a million a month and they pay you

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$5 grand, if they get one good thing a year, they're stuck.

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And they're like, oh, yeah, I sent the wire, did you get it?

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Like the difference between working with somebody who's on the lower end versus the higher

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end.

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And so being very clear about who you serve, not serving other people, going down market

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only if you have the infrastructure to support huge amounts of volume and usually the

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capital to front it.

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Either you build for volume day one and went on efficiency like Amazon or Walmart or

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you build for a premium, which means you niche down and you completely solve problems for

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people.

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So you completely solve a problem in a very narrow niche.

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And so let me give you a completely polar opposite examples here, which I literally live

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on both sides of the spectrum.

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On one side, acquisition.com is my premium brand, right?

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This is the brand that we do deals with.

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This is where we have a hundred million dollar companies and stuff that we invest in that

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we own it.

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Right?

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That's my family office.

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And we do one or two deals a year, just being really real, we make very rich people

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way wealthier.

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Right?

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That's what I do there.

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So someone comes in and is already worth 50 million bucks and we're like, cool, how do

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we get to 250?

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And that's what we invest in, that's what we scale the company.

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On the others extreme, we've got school.

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So school is forever new starting out.

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Now, school took five years to get to the level of product that it is now and millions and

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tens of millions of dollars of development where it lost money the entire time and still

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lose this money right now.

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In order to create such an absurd value for the 99 bucks a month or whatever it is, because

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we know that that 99 dollars a month for somebody who's trying to start their business, that's

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the entirety of their business budget.

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And so we have to solve all of the business problems that those people have at that level.

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And so these are two completely, I mean, honestly, the most polar extremes of value creation

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in terms of who we're selling to or who we advertise to and who we're attracting and

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how we help them.

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And so there's no coincidence that I did acquisition.com before investing in being a

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co-owner of school, because I had to make enough money to be able to afford to sell to

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people who don't have much, to be able to help build the infrastructure and invest millions

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of dollars to build that so that we could accommodate millions and millions of users right

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now.

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We have many millions of users on the platform.

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If you are confused about how to sell rich people stuff, first off, the easiest hack

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for selling a rich people is do what somebody else is doing that sells to rich people and do

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it in half the time and charge twice the price.

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Number one, rich people pay for time above all else.

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But if we look at the value equation, you've got the outcome, so you got to make sure they

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want the outcome that you're promising, and then you've got the three other variables.

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You've got risk, how likely is it that they're going to get what they want when they buy?

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Time, delay between when they buy and when they get, and the effort and sacrifice.

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The richer they are, the more guaranteed they want it to be.

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Now you don't have to guarantee things, but you need the perception of the guarantee.

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That's why reputation matters.

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If you are the best plastic surgeon in the world, you don't give a guarantee.

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They just have a high perceived likelihood of achievement.

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They believe that if they pay you, the likelihood that their nose isn't fucked up when they

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do the surgery is high.

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If time delay, they want it to be as fast as possible.

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If they give you money and have it tomorrow, rich people pay a lot of money for that.

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And then you've got effort and sacrifice.

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Well, I don't want to do anything, I want you to do everything.

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And so the thing is that a lot of times it makes sense to have very white glove, concierge,

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high touch, things for people who are willing to pay for it, because for them, the incremental

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difference in cost for them is actually very small.

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So the difference between $5,000 a month and $10,000 a month to a multimillionaire, not

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a huge difference.

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And if you're just better for $10,000 a month, they'll happily pay you than the $5,000

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a month guy.

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You're not going to sell someone who's wealthy on how much money you're going to save them.

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You'll sell someone who's wealthy on how much time you're going to save them.

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Brutal business truth number two.

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You lack priorities, not information.

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Problems are easy to solve if you know what you're after, if you know what problem you're

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actually trying to solve.

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I'll tell you a story.

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So I was talking to an entrepreneur who's done about 10 million a year, and that was between

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all of his companies.

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We were talking and they mentioned one, and they mentioned a second, they mentioned a

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third.

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They mentioned a fourth.

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I was like, dude, how many companies do you have?

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And he's like, oh, I don't know.

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I was like, you don't know.

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He's like, yeah, I have an excel sheet.

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And so I was like, well, pull it up.

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And so he pulled up his excel sheet and he had like 56 companies that in total were making

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like $10 million a year.

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And obviously one of them was the biggest one that was doing like half of that revenue.

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And that was actually the company that I had heard of that he that he found it.

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And I said, did if you just only had that one company, how easy would it be to like 5

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X that business?

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He's like, oh, my God, if I didn't have the other 55 companies, it'd be a joke.

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I was like, so if I waved the magic wand and that happened, you could think you could

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do it.

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And he was like, yeah.

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And I was like, then do it.

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You can wave the magic wand.

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You can end these other 55 partnerships so that you can do this one thing.

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And what's crazy is that a year later, I talked to him and he had done just that.

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And he was like, dude, I like didn't sleep for three days after we talked because I was

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like, oh, my God, that's it.

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So I see strategy as parties.

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It's partization of resources, right?

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You have unlimited options, we have limited resources, time, money, people, et cetera.

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And so how you choose to allocate those resources against the unlimited options is your strategy.

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It is how you prioritize.

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And when you have one clear goal for one clear company for one clear customer, the prioritization

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thing actually gets pretty easy.

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And so a lot of people keep looking for these unique insights when the reality is you don't

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even have a goal.

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Have you defined the problem that you're trying to solve?

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And most people have it.

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And that ends up being usually the first question I asked someone, they're like, hey, I'm stuck

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with my business and I just say, well, what's the goal?

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And then they say something and say, well, what problem are you solving right now?

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And so if you can't clearly state current state, desired state, obstacle, you're running

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around like a chicken with your head cut off.

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You're not going to solve anything, you're going to do a lot of work, but you're not going

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to move forward.

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So I had a media company approach me.

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They've got 40 million subscribers across their channels, obviously very, very good

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at media.

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They said, hey, we've been listening to your content and we think that our constraint,

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like the problem that we need to solve that will get us the most bang for the buck is

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that we need to optimize our SOPs for the media company and I said, okay, well, what's

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the goal?

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I was like, is it just get more famous or is it to make money?

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And they're like, no, we want to we want to shift into monetization now.

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I was like, okay.

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So let me ask you this, what product do you sell?

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And they were like, well, we don't have a product.

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I was like, okay, so hear me out, crazy idea.

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If you had a product, you would make a lot more money than trying to get your 97 out of

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100 media companies and 98 and a half.

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Not to say that there's nothing like if they said, I want to be more famous than I would

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have said, absolutely, you should do that.

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That makes sense because monetization is in the goal.

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But if they were trying to make money, they had nothing to sell.

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And I promise you, if you have nothing to sell, you make a lot less money than if you

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do have something to sell.

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And so they could be a two out of 10 on product.

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But with that amount of media, that amount of traffic, they would be able to get so many

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sales that they would they would blow it out of the water.

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And so they were spending all this time trying to get in the intricacies, trying to get information

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on how to solve the wrong problem.

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And so most times it's not that you lack insight, it's that you're solving the wrong thing.

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And I think the reason that that happens so frequently is because those entrepreneurs

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are media entrepreneurs.

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They like media.

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They feel comfortable in media.

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And so they like solving media problems.

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And so they like solving problems that they know how to solve because they've solved them

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before.

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I'll tell you a different story.

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I had a guy who came out for a workshop here at aquas.com and he said, hey, can you go

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over the clothes or framework?

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And I said, okay, you flew across the country.

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You've been here for a day.

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You had this one opportunity to ask this question to me and I was like, is sales a problem

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in your business?

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What's your clothes rate?

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He said 40%.

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And so sales is nothing to train your business.

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He was like, no, I was like, then why are you asking me about the clothes or framework?

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And I actually think that that lesson was way more powerful than me trying to go over

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the clothes or framework because the reality is is he was a sales guy.

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He loves selling.

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And so he wanted to hear me talk about sales, but sales isn't the problem in his business.

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There's something else that's the problem.

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You might know about getting enough leads or people are turning out to too quickly on

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the background or he can't even take on more customers because he doesn't have enough

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team.

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Like those were all other examples of problems that might exist and I'll bet you one

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of those three probably is the problem in his business.

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But that wasn't the question he asked.

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He asked about the thing that he enjoyed reading about, the thing he enjoyed learning

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about.

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And so right now, if you're an entrepreneur, it is true that you want to double down your

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strengths, but the business as a whole has to be balanced.

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So hear me out.

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If you think about business like a body, okay, and you're a bodybuilder and so you want

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to have ideal ratios for everything in terms of like, if your arms were like this big

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and your, you know, your quads were tiny, then you look weird, right?

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So you want to be a specialist like you, sure as an individual contributor, keep doubling

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down on your strengths, but the business as a whole will only be as strong as this week

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as link.

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And so this is where people get confused with double down on your strength versus be

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well balanced.

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The business needs to be balanced, your physique in total needs to be balanced.

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But you as an individual contributor can double down on your strengths.

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You want a team of people who are all doubling down on their strengths, but you as the organizer

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of the business need to make sure that the business as a whole is balanced, otherwise it

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will get constrained at some point.

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And then that point will be your point of failure.

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That will be the weak link.

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That will be the part of the bridge where only one dog can get across.

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Even though you've got 10x, the front end and 10x, the back end, that one bottleneck is

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what's bottleneck in the business.

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And so making sure that oftentimes the thing that you're not the most excited about, if

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you're a marketing entrepreneur, market is probably not your problem.

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If you're a product or an entrepreneur, product is probably not your problem.

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If you hate people and that's like, that's probably your issue.

294
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Like I hate meetings.

295
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I hate leading people.

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Trying to reinvest my team.

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I'll bet you that you probably are having limits on your business because you don't know

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how to recruit higher train manage.

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And so that's actually what you need to either learn or recruit someone who already knows

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how to do that.

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And so people spend too much time mentally masturbating to the concepts that they love in

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the idea that because it worked to get them to where they're at, because they needed to

303
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start marketing to make money, they think, okay, now if I 10x marketing, that's what it

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takes to make more money.

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And unless that's the constraint, that's not true.

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And oftentimes businesses do grow to the constraint of the founder.

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They do grow to the constraint of that individual founder's highly specialized skill.

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And then at that point, it's constrained with something else that the founder doesn't like

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as much.

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And so either you got to learn it and get comfortable learning stuff that you don't like

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as much initially where you got to find someone who does.

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And so if you're like, okay, well, I'm either a product entrepreneur and I need more marketing

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or a market entrepreneur and I need more product or I'm either of those things and we don't

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have an operator.

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We have somebody who likes to lead and manage people and invest in teams.

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Then how do you know what good looks like?

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So first off, one of the biggest advantages of business of doing this for a while is to

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start to recognize patterns.

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So you hire five guys that suck and then finally find a six and all of a sudden you're like,

320
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okay, so this is what a good sales director looks like.

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This is why the businesses, for example, that we start now grow so much faster because

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one, we know who's going to be needed next and two, we know what that person looks like.

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And so think about how much time you save where if the constraint, let's say, is sales

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and you hire on-board training that takes a month.

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And then that person sucks and it takes you six months to fire them.

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And then you do it again and that takes another six months to fire them and you do it again.

327
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And then this time it works.

328
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Well, you just wasted a year and change of growth that you should have been growing but

329
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you weren't because you're the wrong person at the point of constraint.

330
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And realistically, this is why so many businesses get stuck.

331
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And the wrong conclusion is the person says, oh, I tried hiring sales directors.

332
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That doesn't work.

333
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No, you tried hiring John and John sucked.

334
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It doesn't mean that there is no sales directors.

335
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I mean, you're the special stuff like that no one can ever replace you, that no one can

336
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do this role.

337
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It's just that you can't.

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Like, there is Microsoft.

339
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There is Facebook.

340
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There are gazillion diet companies.

341
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Someone out there on earth is better than you literally at the thing that you're best at

342
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and definitely better than the thing that you suck at.

343
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Now, how do you actually tactically find these people when you don't have the experience?

344
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So I'll give you the tactics, how I think about this.

345
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One is that interview lots of people.

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And so if you think about the interview process as an education process in asking them as much

347
00:17:15.020 --> 00:17:18.660
as you possibly can't act like an agnoramist, just be like, I don't know anything about this.

348
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Tell me about it.

349
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And then don't then immediately jump on the first person, go on 10 dates, go on 20 dates.

350
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I'll give you a little sideline story.

351
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For school, Sam, the founder interviewed 600 developers before he found his co-founder.

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600.

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And the way that he did that is the process that I'm outlining.

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So first, he said, hey, who here knows anything about development in his network?

355
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So he started interviewing those developers.

356
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And then he said, hey, can you introduce me to the best of allpers you know?

357
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And so those people introduced him because they had a better context.

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He's like, I'm not hiring any of you.

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I want to know the best people you know.

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And so eventually, he kept going up the ladder of, he talked to those people, say, who's

361
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the best one you know?

362
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And he kept going up and kept going up only to fact find, only to find information until

363
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he found somebody who was like, oh my gosh, this guy has said more things and made more

364
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sense.

365
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And at this point in the process, he had already spoken to so many people.

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He had a good context from which to make a judgment.

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And so that is the process.

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I will tell you what I personally look for now.

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I look for the quantity and quality of metrics that someone has to describe their role.

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And so I'll give you a binary example.

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So on one hand, if I was hiring someone for customer success, let's say that's like

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you're getting a lot of churn, you're not getting a lot of ascensions, you're not getting

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good reviews, your NPS scores or low, et cetera.

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You're then saying, okay, Mr. customer success candidate, tell me about customer success.

375
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What metrics do you measure?

376
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Now, if they say like, you know, I just want to make sure people are happy that they're

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having a good time and that they're, you know, they're getting results and they're having

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a good experience.

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I'd be like, cool, what do you measure?

380
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If they start squirming around like, well, what do you measure?

381
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They can only come up with one or two things, then I already know that this person obviously

382
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can't drive an outcome because they can't even define an outcome.

383
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Now on the flip side, if that person says, okay, we like to define an activation metric

384
00:19:05.820 --> 00:19:09.460
up front that we can do within the first 48 hours, then we have like, what is our time

385
00:19:09.460 --> 00:19:11.940
to value and what's our, you know, what's our north star there?

386
00:19:11.940 --> 00:19:14.900
We also like to measure C step, but I don't like to do it too often because then customers

387
00:19:14.900 --> 00:19:16.420
don't like filling out the surveys.

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And so we want to make sure that we can do it ideally within the customer journey during

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a value driven exchange that they're going to have with the customer service rep or some

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00:19:23.900 --> 00:19:27.460
sort of account rep that they have to manage and then we can just tack it into that process.

391
00:19:27.460 --> 00:19:31.180
I like to look at churn, but churn, I see more as a lagging indicator and I looked at

392
00:19:31.180 --> 00:19:34.820
it, look at these other things, especially what's our time, like how long does it take

393
00:19:34.820 --> 00:19:36.140
from sale to onboarding?

394
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What's that handoff look like?

395
00:19:37.460 --> 00:19:41.920
What percentage of customers are backing out in the first 24 hours, 48 hours, 72 hours?

396
00:19:41.920 --> 00:19:45.120
And what percentage of these customers are leaving us review by day 30?

397
00:19:45.120 --> 00:19:47.920
And so all of a sudden, I'm like, okay, well, he just said like nine different metrics

398
00:19:47.920 --> 00:19:49.480
and had reasoning for that.

399
00:19:49.480 --> 00:19:52.840
And so then the follow up to this question of understanding the quality and quantity

400
00:19:52.840 --> 00:19:54.720
and the metrics that someone's going to bring to the table is awesome.

401
00:19:54.720 --> 00:19:57.040
This is going to freak some people out.

402
00:19:57.040 --> 00:20:03.160
How does what you do make the business money?

403
00:20:03.160 --> 00:20:07.640
And if the person cannot accurately describe how their functioning is every function of

404
00:20:07.640 --> 00:20:09.120
a business makes a business money.

405
00:20:09.120 --> 00:20:10.480
That's why the function exists.

406
00:20:10.640 --> 00:20:14.320
Now, the thing is that some functions of a business are indirect versus direct.

407
00:20:14.320 --> 00:20:17.160
So if I asked a CFO, how do you make the business money?

408
00:20:17.160 --> 00:20:18.680
They should say multiple things.

409
00:20:18.680 --> 00:20:20.120
Well, one, I control expenses.

410
00:20:20.120 --> 00:20:23.440
So everything that I save goes to the bottom line and I have a process of consistently

411
00:20:23.440 --> 00:20:26.240
cutting out access costs every 30 days.

412
00:20:26.240 --> 00:20:29.240
And so by doing that, I can usually drive an extra three to five percent of the bottom

413
00:20:29.240 --> 00:20:30.640
line, which more than pays for me.

414
00:20:30.640 --> 00:20:31.480
So I'm like, okay, great.

415
00:20:31.480 --> 00:20:34.800
They're already even thinking about my return as an owner versus them.

416
00:20:34.800 --> 00:20:40.280
On top of that, they say, okay, also, I see finance really as a function of decision-making.

417
00:20:40.360 --> 00:20:43.920
And so if we can collect the metrics that drive decisions around what things have the

418
00:20:43.920 --> 00:20:46.960
highest gross margins, what's our utilization rates?

419
00:20:46.960 --> 00:20:51.480
How can we make the decisions that will get us the highest return on capital, both

420
00:20:51.480 --> 00:20:56.360
human and money capital in the business, then we will grow faster.

421
00:20:56.360 --> 00:21:00.000
And so if someone talks like that, then I'm like, okay, they understand how finance is

422
00:21:00.000 --> 00:21:02.720
actually a data function, by the way, it is.

423
00:21:02.720 --> 00:21:03.720
Literally, that's what finance does.

424
00:21:03.720 --> 00:21:04.720
This gives you reports.

425
00:21:04.720 --> 00:21:08.320
It's reporting so that you can make decisions about the business so that they make more

426
00:21:08.320 --> 00:21:09.320
money.

427
00:21:09.360 --> 00:21:12.840
Sales is going to say like, and I'll give you an example for a sales director.

428
00:21:12.840 --> 00:21:16.000
So if I say, hey, how does what you do make us more money?

429
00:21:16.000 --> 00:21:22.280
Now if they say, well, I'm going to drive sales, I'd be like, well, duh, but like, you're

430
00:21:22.280 --> 00:21:24.320
not going to sell anyone because you're a director.

431
00:21:24.320 --> 00:21:28.600
So how do you make the company more money?

432
00:21:28.600 --> 00:21:32.280
What you want them to say is that I'm going to increase the average conversion percentage

433
00:21:32.280 --> 00:21:38.240
across our leads for the team because that is the output of the sales manager is closing

434
00:21:38.240 --> 00:21:39.240
percentage.

435
00:21:39.240 --> 00:21:40.240
I got a fundamental rate.

436
00:21:40.240 --> 00:21:43.880
It's closing percentage is one of the metrics, but just total conversion rate of leads.

437
00:21:43.880 --> 00:21:47.480
So if I get 100 leads and there's lots of many steps, you got to schedule, you got to show,

438
00:21:47.480 --> 00:21:51.360
you got to close, you got to offer, whatever, there's cash collect, there's other mini metrics

439
00:21:51.360 --> 00:21:52.520
along the way.

440
00:21:52.520 --> 00:21:57.200
But you just want to see what percentage of eyeballs and or earballs and people who give

441
00:21:57.200 --> 00:22:01.280
us their information we can contact, do we convert into sales?

442
00:22:01.280 --> 00:22:06.560
And if you say I as a sales director will be able to increase that percentage, then that's

443
00:22:06.560 --> 00:22:09.720
the job and that's how I make the business more money because here's the thing.

444
00:22:09.720 --> 00:22:15.800
If they cannot describe an output of their job that ties to revenue for the business or

445
00:22:15.800 --> 00:22:21.080
ties to profit for the business, then you can be absolutely certain that they don't know

446
00:22:21.080 --> 00:22:24.760
how to do it and that they're not going to do it for you because they can't even tell

447
00:22:24.760 --> 00:22:27.300
you how it works.

448
00:22:27.300 --> 00:22:30.880
And so I use those as the limits test one, I interview as many people as I possibly can

449
00:22:30.880 --> 00:22:34.880
so I can get a basis from which to make a judgment to from there, I'll learn the metrics

450
00:22:34.880 --> 00:22:40.320
because I won't know them, that people use to describe the role to drive outcomes.

451
00:22:40.320 --> 00:22:44.040
And I will look for the quantity and quality of metrics that people will track and what

452
00:22:44.040 --> 00:22:49.040
they would do to influence those metrics, step two, and then step three, how does what

453
00:22:49.040 --> 00:22:51.560
you do make the company more money?

454
00:22:51.560 --> 00:22:54.880
Don't let them get away with like the sales example, we're going to make more sales.

455
00:22:54.880 --> 00:22:58.360
No, but how do you influence that?

456
00:22:58.360 --> 00:23:03.040
Business truth number three, things are hard because your team isn't as good as you

457
00:23:03.040 --> 00:23:04.200
think they are.

458
00:23:04.200 --> 00:23:07.480
And that's because your standards are too low.

459
00:23:07.480 --> 00:23:10.560
Metromind said this to me and I've always kept this in mind, he said, you're best talent,

460
00:23:10.560 --> 00:23:15.320
you haven't even hired yet, your best talent is in the future.

461
00:23:15.320 --> 00:23:18.920
And so let's run a thought experiment for a second.

462
00:23:18.920 --> 00:23:22.760
Everybody who's listening to this has that one teammate who's just an absolute stud, hopefully,

463
00:23:22.760 --> 00:23:28.120
if you don't, I'm sorry for you, but at least one person on your team is pretty good.

464
00:23:28.120 --> 00:23:31.840
If you had ten to those people, would you be able to make way more money?

465
00:23:31.840 --> 00:23:35.360
The answer is almost always unequivocally, yes, I'd be able to make way more money.

466
00:23:35.360 --> 00:23:38.960
And so then the follow up is then why is all of your attention not to getting more of

467
00:23:38.960 --> 00:23:40.160
those people?

468
00:23:40.160 --> 00:23:45.440
If you listen to the Steve Jobs, the base sources, the Bill Gates's, Elon's, so many of

469
00:23:45.440 --> 00:23:48.680
them Zuckerberg, so many of them talk about talent.

470
00:23:48.680 --> 00:23:52.160
And in the early days of entrepreneurship, I thought that they were trying to hide the

471
00:23:52.160 --> 00:23:57.280
secrets, but it's really that they were talking about what they're focused on now.

472
00:23:57.280 --> 00:24:02.320
And as I continue to do business, the more I just care about who, rather than what

473
00:24:02.320 --> 00:24:06.320
or how, because if you really do have the right who, you're one higher away from somebody

474
00:24:06.320 --> 00:24:10.040
who's 100 times smarter than you, who's done this way longer than you have, who can help

475
00:24:10.040 --> 00:24:11.040
you grow the business.

476
00:24:11.040 --> 00:24:13.240
I'll give you this story that really drove this home.

477
00:24:13.240 --> 00:24:18.920
So when we were looking at selling gem launch, we had a lot of conversations with investment

478
00:24:18.920 --> 00:24:22.560
bankers, and then finally fixed, you know, we picked investment to represent us.

479
00:24:22.560 --> 00:24:27.000
And then we had a lot of conversations with perspective buyers, so it requires, meaning

480
00:24:27.000 --> 00:24:31.360
people who like fund managers, people who have big funds of money, who buy companies

481
00:24:31.360 --> 00:24:33.080
for a living.

482
00:24:33.080 --> 00:24:38.800
And I remember a moment on one of the first of these meetings where it was in person,

483
00:24:38.800 --> 00:24:43.240
they'd flown out, and all of their team was on one side, and all of my team was on the

484
00:24:43.240 --> 00:24:44.240
other.

485
00:24:44.240 --> 00:24:47.240
And I was sitting at the head, and the manager partner was at the other side of the table.

486
00:24:47.240 --> 00:24:50.480
And I just remember just kind of sitting there silently, looking down the table, looking

487
00:24:50.560 --> 00:24:55.200
at both sides back and forth, back and forth, and being like, no wonder these guys are

488
00:24:55.200 --> 00:25:00.040
going to make $3 billion in the next five years versus my team.

489
00:25:00.040 --> 00:25:02.120
And the thing is just to be clear, it wasn't that my team was bad.

490
00:25:02.120 --> 00:25:04.640
I mean, we built it, you know, $100 billion plus business.

491
00:25:04.640 --> 00:25:06.840
I saw the discrepancy.

492
00:25:06.840 --> 00:25:08.400
This is not a slight to anybody on the team.

493
00:25:08.400 --> 00:25:14.960
We obviously had stars, but seeing the average level of talent on their team versus mine

494
00:25:15.040 --> 00:25:20.920
was a huge moment for me to understand just how important people are.

495
00:25:20.920 --> 00:25:25.320
And so there's a story in Google, I think it was layer page of Sturgy brand, however,

496
00:25:25.320 --> 00:25:28.160
typed into Google, like parachutes, whatever.

497
00:25:28.160 --> 00:25:32.720
And the ads that came up were for like, buy a radio, buy a car, and he screen shoted

498
00:25:32.720 --> 00:25:39.160
it, and he puts it on the corkboard in the engineering room, and said, these ads suck.

499
00:25:39.160 --> 00:25:42.160
And he just wrote it on the screen shot, and he hit the board, and he walked out of

500
00:25:42.160 --> 00:25:43.480
the room.

501
00:25:43.480 --> 00:25:48.200
And the story goes that the next night, one of the developers, just like stayed up all

502
00:25:48.200 --> 00:25:54.240
night and came up with AdSense, and AdSense more closely paired, what people were searching

503
00:25:54.240 --> 00:25:56.480
for with the ads that they were shown.

504
00:25:56.480 --> 00:26:00.400
He didn't say, here's the hundred step process that we're going to do to solve this problem.

505
00:26:00.400 --> 00:26:05.960
He just said, you guys are intelligent, this is the problem, go fix it.

506
00:26:05.960 --> 00:26:09.600
And so one of the tail tail signs that you have bad people on your team, or people who

507
00:26:09.600 --> 00:26:13.680
are too dumb, or your standards are too low, is that you have stupid rules.

508
00:26:13.680 --> 00:26:15.960
And I'm somebody who's done this.

509
00:26:15.960 --> 00:26:17.160
So this isn't me preaching here.

510
00:26:17.160 --> 00:26:19.320
This is something that I've now realized.

511
00:26:19.320 --> 00:26:23.160
Is that if you have to have a rule that's like, hey, everybody, you have to show up on

512
00:26:23.160 --> 00:26:24.160
time.

513
00:26:24.160 --> 00:26:25.840
Hey, don't drink while you're on the job.

514
00:26:25.840 --> 00:26:31.080
Hey, like you can't watch Netflix while you're working, like that's not a good thing.

515
00:26:31.080 --> 00:26:34.600
By the way, all of these are rules that I have implemented at some time in a business

516
00:26:34.600 --> 00:26:35.680
that I've owned.

517
00:26:35.680 --> 00:26:41.120
And I'm telling you this now, because it seems so painfully obvious that if I have to

518
00:26:41.120 --> 00:26:46.600
say, don't watch Netflix while you're on a customer service call with a customer, that

519
00:26:46.600 --> 00:26:48.720
shouldn't be a rule.

520
00:26:48.720 --> 00:26:53.200
That should be an obvious thing that anyone with half a brain cell can figure out.

521
00:26:53.200 --> 00:26:56.680
But what that really meant is that if you start making stupid rules, it's because you're

522
00:26:56.680 --> 00:26:59.240
standards are too low and you're hiring stupid people.

523
00:26:59.240 --> 00:27:01.520
Rule number four, lots of rules many have done people.

524
00:27:01.520 --> 00:27:03.840
So let's talk about that for a second.

525
00:27:03.840 --> 00:27:09.720
So one of the things to prevent against this is a rule from Amazon, which is that every

526
00:27:09.720 --> 00:27:13.600
person you hire, you want to raise the average bar of the team that they're getting hired

527
00:27:13.600 --> 00:27:14.600
into.

528
00:27:14.600 --> 00:27:17.720
I literally used this yesterday with someone that we were interviewing.

529
00:27:17.720 --> 00:27:19.640
Layla was like, what do you think about this person?

530
00:27:19.640 --> 00:27:21.880
I said, well, do they raise the bar of the team?

531
00:27:21.880 --> 00:27:26.880
And he was like, hmm, I was like, all right, well, then there's our answer.

532
00:27:26.880 --> 00:27:32.840
Because the thing is is that all companies will, unless controlled for, dilute down talent.

533
00:27:32.840 --> 00:27:38.440
So people, you know, sixes will hire five, five will hire four, four will hire three's,

534
00:27:38.440 --> 00:27:41.520
and people will always hire people that they're not threatened from.

535
00:27:41.520 --> 00:27:43.800
Because they want security first.

536
00:27:43.800 --> 00:27:47.800
And so you have to implement something like this because the reverse can also be true.

537
00:27:47.800 --> 00:27:51.760
If imagine if every single time you hired somebody, it raised the bar of the team.

538
00:27:51.760 --> 00:27:55.520
Then the team will just continue to get better and better and smarter and smarter people

539
00:27:55.520 --> 00:27:57.440
and then the company will grow and grow and grow.

540
00:27:57.440 --> 00:28:02.080
And I have a fundamental belief that the level of a business grows kind of like a Christmas

541
00:28:02.080 --> 00:28:07.120
tree where you've got the number and intelligence of brains that goes up.

542
00:28:07.120 --> 00:28:12.000
So if you have lots and lots and lots of really intelligent brains, the size of this business

543
00:28:12.000 --> 00:28:13.000
is huge.

544
00:28:13.000 --> 00:28:18.320
If you only have one brain that's intelligent and everyone underneath of that has a subset

545
00:28:18.320 --> 00:28:23.440
of the skills of that one brain that it's only one brain that's competing its companies

546
00:28:23.440 --> 00:28:26.400
that have a hundred smart brains.

547
00:28:26.400 --> 00:28:31.000
And that was something that in my early days, every person I hired, I could do their job

548
00:28:31.000 --> 00:28:32.000
better than them.

549
00:28:32.000 --> 00:28:35.840
And I trained them to do everything they did, which meant the limit of the business was

550
00:28:35.840 --> 00:28:36.840
me.

551
00:28:36.840 --> 00:28:39.800
I had to literally keep learning things, which you always have to do, of course.

552
00:28:39.800 --> 00:28:42.080
But I had to learn everything from scratch.

553
00:28:42.080 --> 00:28:46.960
And so the business then had to suffer what a day one customer success rep would deal

554
00:28:46.960 --> 00:28:50.240
with because I didn't know any of my customer success.

555
00:28:50.240 --> 00:28:55.200
And so the idea is I would rather bring someone in who has 10 years of experience in customer

556
00:28:55.200 --> 00:29:00.080
success so that we can start the business on year 10 of customer success.

557
00:29:00.080 --> 00:29:03.600
I want that person to have learned all those lessons on someone else's dollar.

558
00:29:03.600 --> 00:29:09.240
And then when they come to me, have all those lessons so I don't need the scars.

559
00:29:09.240 --> 00:29:12.800
And so one of the one of the telltale sides also of an early company is that you've got

560
00:29:12.800 --> 00:29:17.560
people who have zero experience in leadership roles for a function they've never done before.

561
00:29:17.560 --> 00:29:20.880
And that's because it's like, well, this is my COO Sarah.

562
00:29:20.880 --> 00:29:22.880
We have five people in our company, but she's our COO.

563
00:29:22.880 --> 00:29:27.040
It's like, don't use the term COO because she's going to look at salary.com and she's

564
00:29:27.040 --> 00:29:30.320
going to say that she should make more than the entire company makes an revenue, right?

565
00:29:30.320 --> 00:29:31.880
No, that's not the case.

566
00:29:31.880 --> 00:29:33.360
Like she's a manager, right?

567
00:29:33.360 --> 00:29:35.360
And realistically, she probably doesn't manage the whole business.

568
00:29:35.360 --> 00:29:38.800
She probably just manages this portion of it or he just manages a portion of it.

569
00:29:38.800 --> 00:29:43.080
And so the thing is is like just because it's your mom or it's your brother or your best

570
00:29:43.080 --> 00:29:47.840
friend growing up or that guy who you hired first has been with you since the beginning,

571
00:29:47.840 --> 00:29:52.000
it still doesn't mean that they're right for the role.

572
00:29:52.000 --> 00:29:56.360
And so this is where a lot of the money that you want to make is on the other side of

573
00:29:56.400 --> 00:29:59.720
a few hard conversations and many people never have.

574
00:29:59.720 --> 00:30:06.200
They're willing to just accept mediocrity at the point of the bottleneck and never

575
00:30:06.200 --> 00:30:11.080
get the bottleneck because they can't say, hey, Sarah, I don't think it's working out.

576
00:30:11.080 --> 00:30:16.960
And I think it's my fault because I put you in a position without the resources to win.

577
00:30:16.960 --> 00:30:20.160
And I think, and this is how you, this is how I manage it.

578
00:30:20.160 --> 00:30:22.000
What I want to do is I want to keep investing in you.

579
00:30:22.000 --> 00:30:23.240
And here's how I want to do it.

580
00:30:23.240 --> 00:30:24.800
I want to bring someone in who has a ton of experience.

581
00:30:24.800 --> 00:30:27.080
And there's more than both of us but together.

582
00:30:27.080 --> 00:30:31.960
And I want you, I'm going to basically pay for you to learn from this person so that you

583
00:30:31.960 --> 00:30:35.280
can become more skilled in your career.

584
00:30:35.280 --> 00:30:38.840
And then you, I want you to get laser focused on this thing over here that you were doing

585
00:30:38.840 --> 00:30:41.040
before and absolutely tune it up.

586
00:30:41.040 --> 00:30:44.080
And so this way, you're going to crush what you're currently doing every day.

587
00:30:44.080 --> 00:30:46.600
And it's absolutely within your scope and experience that I think you can do really

588
00:30:46.600 --> 00:30:47.600
well with it.

589
00:30:47.600 --> 00:30:49.880
And I also want to build out your future by bringing this person in.

590
00:30:49.880 --> 00:30:54.240
So think about it like me paying a hundred thousand dollars a year for you to learn from

591
00:30:54.240 --> 00:30:56.760
somebody who has ten years of experience.

592
00:30:56.760 --> 00:30:58.960
It's about the biggest gift I can give you.

593
00:30:58.960 --> 00:31:02.880
And so if you frame it like that, it's not like this is a demotion or like you suck.

594
00:31:02.880 --> 00:31:05.360
It's like, I'm trying to invest in you and I'm going to invest in you by bringing this

595
00:31:05.360 --> 00:31:06.880
person who's going to teach you.

596
00:31:06.880 --> 00:31:10.520
Now if that person has an ego, which is usually the next common thing, which is like, why

597
00:31:10.520 --> 00:31:13.560
thought I was doing great, then it means you probably have a communication issue.

598
00:31:13.560 --> 00:31:15.880
Like you're not telling them that Sarah is not doing a good job.

599
00:31:15.880 --> 00:31:17.360
And then Sarah gets upset.

600
00:31:17.360 --> 00:31:20.960
And the thing is, is at that point, Sarah might have an ego because she started at the

601
00:31:20.960 --> 00:31:24.440
frontline and then became a manager, then you give her another title of progression

602
00:31:24.440 --> 00:31:25.440
too fast.

603
00:31:25.440 --> 00:31:30.160
And to be really clear, I've done this two times with executive assistants, just with

604
00:31:30.160 --> 00:31:32.120
the executive assistant within the company's a zillion times.

605
00:31:32.120 --> 00:31:35.320
With me personally, I've done this and I don't really even deal with a lot of personnel

606
00:31:35.320 --> 00:31:36.400
in general.

607
00:31:36.400 --> 00:31:38.800
And it's like, I just, I promoted someone too fast.

608
00:31:38.800 --> 00:31:41.520
I think it's the Peter principle, which is that people will advance to the point of

609
00:31:41.520 --> 00:31:42.600
incompetency.

610
00:31:42.600 --> 00:31:45.720
And so someone does really well at sales.

611
00:31:45.720 --> 00:31:49.120
And so then you put them in a sales manager and then they've never managed a sales team

612
00:31:49.120 --> 00:31:51.720
and they don't do really well at that, but they get promoted to their point of incompetence.

613
00:31:51.720 --> 00:31:55.440
So I lost a good salesperson and I got a bad sales manager.

614
00:31:55.440 --> 00:31:58.080
And this is how most of corporations are run.

615
00:31:58.080 --> 00:32:02.560
People do well and then their role changes into something they've never done before and

616
00:32:02.560 --> 00:32:06.440
then they do poorly and they get stuck there, they get fired.

617
00:32:06.440 --> 00:32:09.840
And most times because the person who promoted them feels bad, they just get stuck there.

618
00:32:09.840 --> 00:32:13.280
And so you've got all these people who you still have positive associations with the work

619
00:32:13.280 --> 00:32:16.440
that they did and you feel like you owe them because they did do a good job one time

620
00:32:16.440 --> 00:32:19.640
before, but now they're doing a poor job because they're not properly equipped and you

621
00:32:19.640 --> 00:32:23.760
didn't give them the skills to succeed and they don't have the experience.

622
00:32:23.760 --> 00:32:24.920
And yes, that's your fault.

623
00:32:24.920 --> 00:32:27.280
But the thing is is you can't fire you because you own the company.

624
00:32:27.280 --> 00:32:28.680
So somebody's got to go.

625
00:32:28.680 --> 00:32:33.200
And so either you got to move them aside, you redefine the role and move someone ahead

626
00:32:33.200 --> 00:32:35.360
of them or you have to get rid of them.

627
00:32:35.360 --> 00:32:37.920
And again, this is what makes business hard.

628
00:32:37.920 --> 00:32:39.320
It's not that it's complicated.

629
00:32:39.320 --> 00:32:41.760
It's that you don't want to hurt someone's feelings.

630
00:32:41.760 --> 00:32:42.760
And I get that.

631
00:32:42.760 --> 00:32:44.040
That's what makes hard conversations hard.

632
00:32:44.040 --> 00:32:45.840
If you hate somebody, firing them is very easy.

633
00:32:45.840 --> 00:32:47.880
I think someone stole from you.

634
00:32:47.880 --> 00:32:51.280
Firing is not a personal experience there.

635
00:32:51.280 --> 00:32:52.280
So find that night.

636
00:32:52.280 --> 00:32:53.480
All right.

637
00:32:53.480 --> 00:32:58.440
It's the conversation with someone that you know is trying their best that you really

638
00:32:58.440 --> 00:33:01.960
like as a human being, but isn't cutting it.

639
00:33:01.960 --> 00:33:06.880
And even if you think you could get them there, you're not willing to invest the resource

640
00:33:06.880 --> 00:33:09.040
to do it because it doesn't make sense.

641
00:33:09.040 --> 00:33:12.280
I could wait for someone to learn neurosurgery.

642
00:33:12.280 --> 00:33:13.280
And I think people could.

643
00:33:13.280 --> 00:33:14.280
But it might take a decade.

644
00:33:14.280 --> 00:33:18.160
And I don't know if I really want to invest all that time when I could just go find a neurosurgeon.

645
00:33:18.160 --> 00:33:19.600
And yeah, I might have to pay more.

646
00:33:19.600 --> 00:33:22.400
But I'd rather pay that than pay 10 years.

647
00:33:22.400 --> 00:33:25.620
And so to loop this background to the story that I was talking with the private equity

648
00:33:25.620 --> 00:33:29.920
firms when I was looking at them, one of the big obvious things too is that many of the

649
00:33:29.920 --> 00:33:35.320
people on the other side of the table were making $1 million, $2 million, $5 million a year.

650
00:33:35.320 --> 00:33:40.000
And you know, people who were in their 20s making $300,000, $500,000 a year and I was

651
00:33:40.000 --> 00:33:47.640
like, okay, I need to reset my bar of what I have to compensate in order to attract

652
00:33:47.640 --> 00:33:50.320
a level talent.

653
00:33:50.320 --> 00:33:56.120
And once I really understood the value of people, the way that we grew businesses completely

654
00:33:56.120 --> 00:33:57.120
changed.

655
00:33:57.120 --> 00:34:00.840
It stopped being about building businesses and became way more about assembling the teams

656
00:34:00.840 --> 00:34:02.240
that build the business.

657
00:34:02.240 --> 00:34:04.840
Like one of the core functions we do at Acquisition.com probably the thing that we invest the most

658
00:34:04.840 --> 00:34:06.440
resources into is recruiting talent.

659
00:34:06.440 --> 00:34:09.200
Like there's a reason that we go really hard on LinkedIn.

660
00:34:09.200 --> 00:34:13.840
Because people respond to our messages and we're like, hey, you ran all the ads at

661
00:34:13.840 --> 00:34:18.120
this $200 million per year, direct to consumer business.

662
00:34:18.120 --> 00:34:21.200
We have a direct to consumer business that's at 20 million.

663
00:34:21.200 --> 00:34:24.480
Would you be willing to take everyone 20 to 200 because we think you have the experience

664
00:34:24.480 --> 00:34:26.440
or do you know anybody who does?

665
00:34:26.440 --> 00:34:30.440
And because we have a falling there, we get the responses and we can get that level talent.

666
00:34:30.440 --> 00:34:32.880
But that level talent's not coming in for 100 grand a year.

667
00:34:32.880 --> 00:34:37.440
You can mone all you want that are these employees want so much money.

668
00:34:37.440 --> 00:34:40.480
But there's a marketplace.

669
00:34:40.480 --> 00:34:43.480
There's a rate and if you're not willing to pay it, there's a company that is smarter

670
00:34:43.480 --> 00:34:46.360
than you that is willing to pay it because they know the return on it.

671
00:34:46.360 --> 00:34:52.040
And I still think to this day one of the biggest arbitrage that exists in business is paying

672
00:34:52.040 --> 00:34:56.400
a talent, a wages to get 10x the output.

673
00:34:56.400 --> 00:34:58.360
So let me drive this home.

674
00:34:58.360 --> 00:35:00.640
So you can get a B player.

675
00:35:00.640 --> 00:35:02.960
Let's say let's use a hundred thousand dollars as the baseline.

676
00:35:02.960 --> 00:35:07.040
So I want to hire a role for a hundred thousand dollars for this thing.

677
00:35:07.040 --> 00:35:16.720
And a B player in the role will take 80 and a B plus might take 90 or 100.

678
00:35:16.720 --> 00:35:22.960
But there might be an A plus plus guy who's like 170 and it's like whoa, that's like

679
00:35:22.960 --> 00:35:25.640
twice our budget for this role.

680
00:35:25.640 --> 00:35:32.920
But if that guy or gal has the output like an A player can get you five X 10x the output

681
00:35:33.360 --> 00:35:38.080
of a B player, meaning five people who are B players at a hundred thousand dollars

682
00:35:38.080 --> 00:35:41.920
a year equal one A plus plus at 170.

683
00:35:41.920 --> 00:35:49.000
That's still a great return and better than hiring five B's and especially in knowledge

684
00:35:49.000 --> 00:35:50.000
work.

685
00:35:50.000 --> 00:35:52.640
So if you have anything that has to do with thinking and not like where literally more

686
00:35:52.640 --> 00:35:58.840
hands are required to do the work, the outsized return on intelligence is so high that I

687
00:35:58.840 --> 00:36:02.080
still see it as one of the fundamental arbitrage that exists in business.

688
00:36:02.080 --> 00:36:06.240
How much time you save by hiring somebody who knows exactly what to do, how it drives

689
00:36:06.240 --> 00:36:09.440
revenue in the business and they can use 10 years of experience that you don't have

690
00:36:09.440 --> 00:36:10.600
to pay.

691
00:36:10.600 --> 00:36:16.560
So I would rather pay 25% 30% more for somebody 50% more for somebody who can move me 10

692
00:36:16.560 --> 00:36:18.040
years forward.

693
00:36:18.040 --> 00:36:21.640
Like it seems almost silly when you frame it like that not to but things every day small

694
00:36:21.640 --> 00:36:25.600
business owners want to save five thousand dollars on an annual on an annual salary for

695
00:36:25.600 --> 00:36:28.400
somebody who they know is perfect for the job.

696
00:36:28.400 --> 00:36:33.760
This is truth number five, if you want to get bigger, get better, better leads to growth,

697
00:36:33.760 --> 00:36:35.600
bigger leads to bloat.

698
00:36:35.600 --> 00:36:40.000
So I was reading Astro Kathy's book, Wealth Is It Worth It and he talks about the story

699
00:36:40.000 --> 00:36:46.280
of Chick-fil-A and he said that his number one pursuit was better not bigger and that

700
00:36:46.280 --> 00:36:50.520
he believed that if they were better and they just kept getting better, he said our customers

701
00:36:50.520 --> 00:36:55.160
will demand that we get bigger versus trying to get bigger for the sake of getting bigger.

702
00:36:55.160 --> 00:36:58.880
And so he tells a story between him, Chick-fil-A and Boston market.

703
00:36:58.880 --> 00:37:01.680
So for those you don't know, Boston market was actually a very big chain when I was growing

704
00:37:01.680 --> 00:37:04.200
up that grew really, really quickly.

705
00:37:04.200 --> 00:37:10.480
And so Chick-fil-A was privately held, they took on almost no debt, they grew really responsibly

706
00:37:10.480 --> 00:37:16.000
one location at a time and Boston market was like we're going to franchise and we're going

707
00:37:16.000 --> 00:37:18.960
to raise a ton of money from Wall Street and we're going to make all this stuff.

708
00:37:18.960 --> 00:37:24.000
And for a period of years, they outgrew Chick-fil-A by a mile and they were like, oh Chick-fil-A

709
00:37:24.000 --> 00:37:26.960
is going to get left in the dust, they're going to get accupated, they're going to get

710
00:37:26.960 --> 00:37:28.480
crushed.

711
00:37:28.480 --> 00:37:34.080
But because Boston market grew so quickly, because they didn't, they diluted their talent

712
00:37:34.080 --> 00:37:37.120
because they had to hire so many bodies and not enough brains.

713
00:37:37.120 --> 00:37:39.840
And because they wanted to grow, because they wanted valuations, they wanted money, they

714
00:37:39.840 --> 00:37:42.040
were what I would consider mercenaries.

715
00:37:42.040 --> 00:37:45.760
Whereas Chick-fil-A and Astro-Cathy was a missionary.

716
00:37:45.760 --> 00:37:49.480
He believed in the product, he believed in the experience and because he's a faith-driven

717
00:37:49.480 --> 00:37:54.520
entrepreneur, he wanted his restaurant represent the tenets of Christ.

718
00:37:54.520 --> 00:37:57.800
This isn't me getting religious about it, but he believed in his mission.

719
00:37:57.800 --> 00:37:58.800
That's the point.

720
00:37:58.800 --> 00:38:01.400
And Basel talks about this, he said, you've got mercenaries, you've got missionaries.

721
00:38:01.400 --> 00:38:03.280
And the missionaries always went into the long term.

722
00:38:03.280 --> 00:38:06.160
And so what ended up happening is that the money guys, some of these guys cashed out early

723
00:38:06.160 --> 00:38:09.480
because stock got inflated, all the stuff that took on tons of debt.

724
00:38:09.480 --> 00:38:13.320
And then the company ended bankrupting, I don't know, something like 10 years later.

725
00:38:13.320 --> 00:38:16.080
But guess what happened in that period of time, Chick-fil-A just kept growing.

726
00:38:16.080 --> 00:38:20.280
And the thing is, is that Basel market couldn't outcompete Chick-fil-A in their market.

727
00:38:20.280 --> 00:38:25.080
They just grew faster, but the thing is, is that if you've got a Basel market in Chick-fil-A,

728
00:38:25.080 --> 00:38:29.680
if you know that your chicken sandwich is better, you still always win.

729
00:38:29.680 --> 00:38:30.680
It becomes an inevitability.

730
00:38:30.680 --> 00:38:32.560
It doesn't matter if they get there first.

731
00:38:32.560 --> 00:38:35.280
If you win in the end, who cares?

732
00:38:35.280 --> 00:38:39.640
Because quality will always win, provided it's price-appropriate and things like that.

733
00:38:39.640 --> 00:38:44.800
But better leads to bigger, bigger leads to bloat.

734
00:38:44.800 --> 00:38:49.000
And so this has been something that was really hard for me to learn, as an entrepreneur,

735
00:38:49.000 --> 00:38:53.200
because I like the feedback of how much money we're making this month.

736
00:38:53.200 --> 00:38:57.200
I want to make sure it goes up, I want to make sure it goes up, because it's a proxy for growth.

737
00:38:57.200 --> 00:39:01.400
And I used to say this, and I like it, which is either the business is growing or I am.

738
00:39:01.400 --> 00:39:04.800
So if the business isn't growing or the business is going down, I'm growing.

739
00:39:04.800 --> 00:39:07.200
I'm learning what I'm messing up.

740
00:39:07.200 --> 00:39:10.200
And if the business is growing, sometimes you're not learning,

741
00:39:10.200 --> 00:39:15.000
because you're getting rewarded for the work that you did while you were learning while you're eating shit.

742
00:39:15.000 --> 00:39:18.400
Sometimes you get both, and that's the ideal thing, is that it's growing, and you continue to learn.

743
00:39:18.400 --> 00:39:21.800
And you keep your learnings ahead of the growth, so the train's coming,

744
00:39:21.800 --> 00:39:24.400
and you're building out the track, you're getting around the ditches,

745
00:39:24.400 --> 00:39:26.600
you're going through the mountain, you're digging the hole,

746
00:39:26.600 --> 00:39:29.400
you're doing that stuff so the train can keep running and keep growing.

747
00:39:29.400 --> 00:39:34.000
A big lesson that I have taken rest through a cafe and some of the best entrepreneurs like Elon.

748
00:39:34.000 --> 00:39:36.000
If you're going to enter a market, so Elon talks about this,

749
00:39:36.000 --> 00:39:43.400
if you're going to enter a new marketplace, you want to be an order of magnitude better than the existing solutions.

750
00:39:43.400 --> 00:39:46.400
And so I'll give you an example, Elon just recently did.

751
00:39:46.400 --> 00:39:49.000
He talked about getting into candy or chocolate, which I might think,

752
00:39:49.000 --> 00:39:50.400
why would he even bother getting into that?

753
00:39:50.400 --> 00:39:52.600
I think it's because he had a gripe with Warren Buffett and Charlie Margaret,

754
00:39:52.600 --> 00:39:53.800
which is really sad because I like both of them.

755
00:39:53.800 --> 00:39:55.200
He had a little bit of a rift with them.

756
00:39:55.200 --> 00:39:58.200
Oh, he was like, well, fine, I'll take out these candies.

757
00:39:58.200 --> 00:40:00.800
And so he was like, I'm going to get into chocolate.

758
00:40:00.800 --> 00:40:04.000
And so he had all these people send him different recipes and all the stuff,

759
00:40:04.400 --> 00:40:05.600
and he decided not to do it.

760
00:40:05.600 --> 00:40:09.000
And the reason he decided not to do it is he said that there was no product.

761
00:40:09.000 --> 00:40:14.000
There was no version of chocolate or candies that was in order of magnitude better than what already existed.

762
00:40:14.000 --> 00:40:15.400
So he just didn't want to play.

763
00:40:15.400 --> 00:40:18.400
If you think about how we entered each of the other markets, he got into space and was like,

764
00:40:18.400 --> 00:40:22.200
oh, we're going to redefine how space flight works when you use reusable things

765
00:40:22.200 --> 00:40:24.900
and we're going to drive down costs 10x compared to the competition.

766
00:40:24.900 --> 00:40:27.800
That's an order of magnitude better with cars.

767
00:40:27.800 --> 00:40:30.900
The first real Tesla, not the roadster, the high end one,

768
00:40:30.900 --> 00:40:33.400
but the first one he made for a mask commercial use was literally

769
00:40:33.400 --> 00:40:37.600
the highest rated car that auto, whatever auto magazine,

770
00:40:37.600 --> 00:40:39.800
the premium magazine had ever rated.

771
00:40:39.800 --> 00:40:46.100
It got the highest overall score of all time because he focused so much on making it order of magnitude better.

772
00:40:46.100 --> 00:40:49.400
And the thing is is that Tesla makes great cars by and large.

773
00:40:49.400 --> 00:40:57.600
And so customers have demanded they get bigger because they continue to out buy out purchase their supply.

774
00:40:57.600 --> 00:40:59.600
And so that forces supply to increase.

775
00:40:59.600 --> 00:41:00.600
So you grow.

776
00:41:00.700 --> 00:41:05.700
And so if you're stuck and you're like, I keep trying to grow and I can't grow.

777
00:41:05.700 --> 00:41:09.000
Sometimes you just think, let's not grow.

778
00:41:09.000 --> 00:41:10.500
What if we didn't want to grow at all?

779
00:41:10.500 --> 00:41:13.800
But we just had to make this thing absolutely insane from a quality perspective.

780
00:41:13.800 --> 00:41:14.900
Just get better.

781
00:41:14.900 --> 00:41:18.500
And the way that you do this tactically is that you look at each function of the business

782
00:41:18.500 --> 00:41:22.600
and you say, what's one thing we can do better that we absolutely very high confidence.

783
00:41:22.600 --> 00:41:26.100
Like we're just going to go from contacting our leads within 30 minutes to five minutes.

784
00:41:26.100 --> 00:41:29.900
That's the one thing we're going to do for the next 12 weeks for late for sales.

785
00:41:30.000 --> 00:41:35.200
For marketing, what we're going to do is we're going to make sure that every single ad has a hook that's been tested before.

786
00:41:35.200 --> 00:41:36.200
That's what we're going to do.

787
00:41:36.200 --> 00:41:39.800
We're going to make sure every ad that goes out is going to have a hook that's tested and we're going to make five times more of them.

788
00:41:39.800 --> 00:41:40.300
Great.

789
00:41:40.300 --> 00:41:42.600
That's what we're doing on marketing and every single one of them.

790
00:41:42.600 --> 00:41:48.200
Here's the key point is that once you start that new that one thing, the next quarter, you add to that.

791
00:41:48.200 --> 00:41:50.200
You don't just swap it and this is what most people do.

792
00:41:50.200 --> 00:41:55.600
They do that one thing and then they forget what they were doing is that you end up creating this checklist of what creates amazing ads.

793
00:41:55.600 --> 00:41:58.600
You create this checklist of what makes amazing follow up.

794
00:41:58.600 --> 00:42:02.200
You make this checklist of what makes an amazing handoff between sales and customer success.

795
00:42:02.200 --> 00:42:04.800
Make this checklist of how to activate a customer.

796
00:42:04.800 --> 00:42:11.800
And so it's a hundred golden BBs, not one silver bullet that creates the outsized returns.

797
00:42:11.800 --> 00:42:15.100
And then once you have a hundred golden BBs, you start getting the word of mouth.

798
00:42:15.100 --> 00:42:18.000
You start getting people to keep buying from you and then all of a sudden your LTV skyrockets.

799
00:42:18.000 --> 00:42:21.800
And then you might find out if you're LTV skyrockets, maybe you don't have a marketing problem.

800
00:42:21.800 --> 00:42:23.300
Maybe you just weren't making enough per customer.

801
00:42:23.300 --> 00:42:27.200
And I can tell you this, the amount of times I talk smart businesses who are like,

802
00:42:27.200 --> 00:42:30.500
we need cheaper leads, we need cheaper leads, we need, we need to lower our CAC.

803
00:42:30.500 --> 00:42:34.600
The reality is, they just don't make enough per customer because they're not that good.

804
00:42:34.600 --> 00:42:39.900
And either you're mispriced, which does happen for sure, or your thing's not that good,

805
00:42:39.900 --> 00:42:41.900
which is a hundred percent under your control.

806
00:42:41.900 --> 00:42:44.900
Fundamentally growth is a lagging indicator.

807
00:42:44.900 --> 00:42:48.100
The things you do to create growth are the leaning indicators.

808
00:42:48.100 --> 00:42:51.900
And the things that create growth are the things that make you better.

809
00:42:51.900 --> 00:42:57.900
And so having growth as a desired behavior is trying to make an outcome into an input.

810
00:42:57.900 --> 00:43:00.400
And then what happens is you have, quote, growth for growth sake.

811
00:43:00.400 --> 00:43:03.400
And here's the problem with this, just as a big, big picture,

812
00:43:03.400 --> 00:43:07.100
is that if the reason that you're in business is to, quote, make money.

813
00:43:07.100 --> 00:43:13.000
If that's your real mission, so many things make money.

814
00:43:13.000 --> 00:43:15.600
And so what happens is you become distracted as an entrepreneur.

815
00:43:15.600 --> 00:43:18.800
This is why the mercenaries fail compared to the missionaries.

816
00:43:18.800 --> 00:43:22.900
Because if you just want to make the best chicken sandwich, anything that's not a chicken sandwich,

817
00:43:22.900 --> 00:43:24.000
isn't a priority.

818
00:43:24.000 --> 00:43:26.300
They could have Chick-fil-A credit cards, right?

819
00:43:26.300 --> 00:43:27.400
Or Chick-fil-A miles.

820
00:43:27.400 --> 00:43:29.300
They could do that stuff and they probably would make the money.

821
00:43:29.300 --> 00:43:30.100
It's not core.

822
00:43:30.100 --> 00:43:32.200
No, go find out if they probably were credit card, who knows.

823
00:43:32.200 --> 00:43:35.900
But like, the point is is that it's not core to what they know.

824
00:43:35.900 --> 00:43:41.600
If money is the goal, then there are so many paths to getting there that it's difficult to stay focused,

825
00:43:41.600 --> 00:43:45.100
which is why companies get spread thin, which is why they grow for growth sake.

826
00:43:45.200 --> 00:43:48.800
And then all of a sudden, they have five initiatives that are going on that all are working that well

827
00:43:48.800 --> 00:43:54.100
because they couldn't focus on the thing that matters, which is getting better at the core promise that they make to customers.

828
00:43:54.100 --> 00:43:55.900
Business truth number six.

829
00:43:55.900 --> 00:44:01.700
You work all day, but you can't get anything done because you will have too many things that don't matter to distract you.

830
00:44:01.700 --> 00:44:04.900
Sometimes you have to let fires burn.

831
00:44:04.900 --> 00:44:08.500
And so what that means is that you have to block time for work that moves the ball forward.

832
00:44:08.500 --> 00:44:12.800
Because a month later, it'll be the only thing you have to show for the month before.

833
00:44:12.900 --> 00:44:18.100
And so one of the things that took me a long time realize is that there are very few things that are existential crisis within hours,

834
00:44:18.100 --> 00:44:19.500
even within minutes, right?

835
00:44:19.500 --> 00:44:23.900
And so the idea that everyone in the company and all of your customers, et cetera,

836
00:44:23.900 --> 00:44:28.900
can have immediate demand from you as their responses from you as the owner is not a good expectation.

837
00:44:28.900 --> 00:44:33.900
Because then it means that you're on demand for everyone else's needs, but the business needs you.

838
00:44:33.900 --> 00:44:35.300
And so I'll give you a story to draw this home.

839
00:44:35.300 --> 00:44:40.400
So at my first gem, I had just started sleeping not at my gem, which was wonderful for me.

840
00:44:40.500 --> 00:44:43.300
And so right is like, I get my first few nights of sleep.

841
00:44:43.300 --> 00:44:48.100
I get a call that everybody hates at 5.30 in the morning, because that's when sessions happen.

842
00:44:48.100 --> 00:44:50.500
And I was like, hello, what's going on?

843
00:44:50.500 --> 00:44:51.900
And he said, I've got bad news.

844
00:44:51.900 --> 00:44:56.100
And I immediately go to someone died from a heart attack on our gym.

845
00:44:56.100 --> 00:44:58.700
That was the, like, immediately went there.

846
00:44:58.700 --> 00:45:00.300
And I'm just silent.

847
00:45:00.300 --> 00:45:02.200
And I was like, what is it?

848
00:45:02.200 --> 00:45:06.800
And then he says, there's a water pipe that broke and it's leaking on the floor.

849
00:45:06.900 --> 00:45:09.100
And I was like, okay.

850
00:45:09.100 --> 00:45:11.100
What do you want me to do?

851
00:45:11.100 --> 00:45:12.800
And he's like, well, I don't know what to do.

852
00:45:12.800 --> 00:45:15.800
I called you and I said, well, what do you think I'm going to do?

853
00:45:15.800 --> 00:45:19.200
He's like, I guess, call a plumber.

854
00:45:19.200 --> 00:45:21.000
And I was like, okay, what would I do in the meantime?

855
00:45:21.000 --> 00:45:23.000
He's like, probably get a bucket.

856
00:45:23.000 --> 00:45:24.300
I was like, yeah.

857
00:45:24.300 --> 00:45:25.400
I was like, have you done that?

858
00:45:25.400 --> 00:45:26.800
He was like, well, no, I called you.

859
00:45:26.800 --> 00:45:28.100
I was like, okay.

860
00:45:28.100 --> 00:45:31.900
Well, why don't you do those first two things because there's nothing I can do.

861
00:45:31.900 --> 00:45:36.600
There's a story of Eleanor Roosevelt, I think.

862
00:45:36.600 --> 00:45:40.400
When I think someone in her family died in the middle of the night,

863
00:45:40.400 --> 00:45:43.100
she gets woken up by her servant or whatever.

864
00:45:43.100 --> 00:45:44.600
You know, however, they did it back then.

865
00:45:44.600 --> 00:45:47.300
And he says, you know, Mrs. Roosevelt, I have some terrible news.

866
00:45:47.300 --> 00:45:48.500
And it's like three o'clock in the morning.

867
00:45:48.500 --> 00:45:49.700
And she's like, what is it?

868
00:45:49.700 --> 00:45:52.300
It's like your cousin, you know, John died.

869
00:45:52.300 --> 00:45:56.100
And she said, that could have waited till morning.

870
00:45:56.100 --> 00:45:57.700
There's nothing I can do about it.

871
00:45:57.700 --> 00:46:02.600
And so there's very few things that will actually kill a business.

872
00:46:02.600 --> 00:46:06.200
And so if you allow everything to be urgent,

873
00:46:06.300 --> 00:46:09.100
it means that everything's a priority, which means nothing is.

874
00:46:09.100 --> 00:46:12.200
And priorities literally in prior, they come first.

875
00:46:12.200 --> 00:46:15.600
And I literally prioritize my day by the things that matter most.

876
00:46:15.600 --> 00:46:19.300
And so I start my day, I do prior to my day,

877
00:46:19.300 --> 00:46:21.600
the thing that I think will actually move the ball forward.

878
00:46:21.600 --> 00:46:25.700
Because when I look back at my last month to see the progress that I've made,

879
00:46:25.700 --> 00:46:29.400
I never think about, you know, Susan, who I had to give a refund to

880
00:46:29.400 --> 00:46:32.200
because she was dissatisfied for something or we got a one star review

881
00:46:32.300 --> 00:46:33.800
and we need to, you know, do with that.

882
00:46:33.800 --> 00:46:38.500
Or, you know, our chat support went down for, you know,

883
00:46:38.500 --> 00:46:39.900
two hours in the middle of the day.

884
00:46:39.900 --> 00:46:43.100
And people were like, you know, why did the chat support to like none

885
00:46:43.100 --> 00:46:46.500
of these things are existential crises for the business in the short term.

886
00:46:46.500 --> 00:46:48.900
There's almost nothing that kills a business in the short term.

887
00:46:48.900 --> 00:46:52.100
And like the only real thing is that your payment processing goes down.

888
00:46:52.100 --> 00:46:54.700
So you literally, your ability to accept money goes away.

889
00:46:54.700 --> 00:46:57.200
But beyond that, like there's not a lot of stuff.

890
00:46:57.200 --> 00:47:01.500
And so what you have to get comfortable with is letting some fires burn.

891
00:47:01.600 --> 00:47:04.600
And being able to say, yes, this sucks.

892
00:47:04.600 --> 00:47:08.200
But not getting the important work done will suck more.

893
00:47:08.200 --> 00:47:12.200
And so I spend, and I still do this,

894
00:47:12.200 --> 00:47:14.500
the first four to six hours of my day,

895
00:47:14.500 --> 00:47:16.600
working on the things that I believe matter most.

896
00:47:16.600 --> 00:47:20.400
And I think that if I had a single habit that has gotten me the furthest in my life,

897
00:47:20.400 --> 00:47:25.900
it's that I work uninterrupted for the first four to six hours of my day

898
00:47:25.900 --> 00:47:29.600
on the things that I think have the highest leverage in the business.

899
00:47:29.600 --> 00:47:33.600
And I like to think about that as what's the one thing that if it were true,

900
00:47:33.600 --> 00:47:35.700
all of my other problems would go away.

901
00:47:35.700 --> 00:47:38.500
And then I put all of my effort into making that one thing true

902
00:47:38.500 --> 00:47:40.700
or making that one thing happen.

903
00:47:40.700 --> 00:47:42.500
But that can't happen.

904
00:47:42.500 --> 00:47:45.900
If you have 20 other mini priorities that are urgent and not important,

905
00:47:45.900 --> 00:47:47.600
every entrepreneur suffers from this.

906
00:47:47.600 --> 00:47:51.800
And so you have to draw lines in the sand or you will be spread too thin.

907
00:47:51.800 --> 00:47:55.300
You will work all day and you will get nothing done.

908
00:47:55.300 --> 00:47:58.000
To protect that first four to six hours in the beginning,

909
00:47:58.000 --> 00:47:59.900
I had to wake up early so that when I woke up at four,

910
00:47:59.900 --> 00:48:02.500
I worked for six hours until 10 and I started my day at 10.

911
00:48:02.500 --> 00:48:04.700
As I made a little bit more money,

912
00:48:04.700 --> 00:48:09.600
I was able to sleep in until five or, you know,

913
00:48:09.600 --> 00:48:12.600
and then start working at like six and then I'd work from six to noon.

914
00:48:12.600 --> 00:48:14.400
And so everybody in my team, this has been for years.

915
00:48:14.400 --> 00:48:16.400
Every one of my team uses nothing until the afternoon.

916
00:48:16.400 --> 00:48:18.200
Like Alex only takes meetings in the afternoon.

917
00:48:18.200 --> 00:48:20.700
And so for me, I do my thinking work in the morning

918
00:48:20.700 --> 00:48:22.400
and then I do my meetings in the afternoon.

919
00:48:22.400 --> 00:48:24.200
As I hired more people, more directors,

920
00:48:24.200 --> 00:48:25.700
more leaders, more executives,

921
00:48:25.700 --> 00:48:27.900
a lot of those meetings also were able to disappear

922
00:48:27.900 --> 00:48:30.500
and so now I just became like Ivy meetings day

923
00:48:30.500 --> 00:48:33.000
and the remainder of my week is just completely open.

924
00:48:33.000 --> 00:48:36.100
Here, like, let me show you how this plays out in the real world.

925
00:48:36.100 --> 00:48:37.100
Someone reaches out and says,

926
00:48:37.100 --> 00:48:39.100
Hey, I got to connect you with Jimmy.

927
00:48:39.100 --> 00:48:40.900
I think you guys would have a lot of synergies.

928
00:48:40.900 --> 00:48:43.200
I think that this would be a really important connection.

929
00:48:43.200 --> 00:48:48.600
And I say, I take meetings on Mondays

930
00:48:48.600 --> 00:48:50.800
and they're like, oh, I don't think you can do that.

931
00:48:50.800 --> 00:48:52.400
And I say, okay, I guess we won't meet.

932
00:48:54.900 --> 00:48:57.100
We just sit there and that's it.

933
00:48:57.100 --> 00:48:58.400
And you'll be amazed often times

934
00:48:58.400 --> 00:48:59.400
that if they really want to meet you,

935
00:48:59.400 --> 00:49:00.600
they'll make it work on Mondays.

936
00:49:00.600 --> 00:49:02.500
And if it means that it's also three Mondays from now,

937
00:49:02.500 --> 00:49:03.900
then it's three Mondays from now.

938
00:49:03.900 --> 00:49:06.600
And I will say this, if I don't meet Jimmy,

939
00:49:06.600 --> 00:49:08.000
you meet people who are there on Earth,

940
00:49:08.000 --> 00:49:09.000
there's eight billion people.

941
00:49:09.000 --> 00:49:10.600
I'm not going to meet most people.

942
00:49:10.600 --> 00:49:13.900
And the likely that Jimmy's going to actually do something

943
00:49:13.900 --> 00:49:16.900
because like if I know what I need to do to grow my business,

944
00:49:16.900 --> 00:49:18.600
there's not a lot that Jimmy's going to offer me there.

945
00:49:18.600 --> 00:49:20.500
Like if I'm very clear on my strategy

946
00:49:20.500 --> 00:49:21.600
and I'm very clear on my execution,

947
00:49:21.600 --> 00:49:24.300
anything that's not that fundamentally loses me money.

948
00:49:24.300 --> 00:49:25.800
It certainly doesn't make me money.

949
00:49:25.900 --> 00:49:30.100
And so just being okay with saying no.

950
00:49:30.100 --> 00:49:31.600
And so I'll give you the tactic around this,

951
00:49:31.600 --> 00:49:33.300
which is just saying, I like to say,

952
00:49:33.300 --> 00:49:35.100
so this I do this in social settings.

953
00:49:35.100 --> 00:49:37.500
I'd say, hey, I'm actually not taking meetings

954
00:49:37.500 --> 00:49:39.000
until after my book launches.

955
00:49:40.000 --> 00:49:41.000
And then once my book launches,

956
00:49:41.000 --> 00:49:42.400
I'll say, I'm not taking meetings

957
00:49:42.400 --> 00:49:43.800
until we sell this company.

958
00:49:43.800 --> 00:49:45.600
And I'll just always have something

959
00:49:45.600 --> 00:49:46.800
that I'll just push out.

960
00:49:46.800 --> 00:49:48.100
That's very far in advance.

961
00:49:48.100 --> 00:49:49.300
That seems very important.

962
00:49:49.300 --> 00:49:50.900
That gives people a social reason

963
00:49:50.900 --> 00:49:52.300
to feel okay that I'm saying no to them.

964
00:49:52.300 --> 00:49:53.500
I'm not saying you're not important.

965
00:49:53.500 --> 00:49:54.600
I'm not saying I've got this other thing

966
00:49:54.600 --> 00:49:55.600
that's really important to me.

967
00:49:56.500 --> 00:50:00.700
And so that tends to work pretty well with entrepreneurs.

968
00:50:00.700 --> 00:50:01.800
But you have to be okay with it.

969
00:50:01.800 --> 00:50:03.000
Like if you have a team

970
00:50:03.000 --> 00:50:05.400
where you people manage your schedule for you,

971
00:50:05.400 --> 00:50:07.400
like I had to explain this to my,

972
00:50:07.400 --> 00:50:09.200
we have three executive assistants

973
00:50:09.200 --> 00:50:10.800
that manage to lay on ice calendars.

974
00:50:10.800 --> 00:50:13.000
And I was like, if I,

975
00:50:13.000 --> 00:50:16.400
if you put a meeting in the morning at like 10 a.m.

976
00:50:16.400 --> 00:50:18.200
I was like, you've killed my whole morning.

977
00:50:18.200 --> 00:50:19.200
It's shot.

978
00:50:19.200 --> 00:50:21.000
Like I can't get into any kind of deep work

979
00:50:21.000 --> 00:50:22.000
and then I'm gonna have two hours

980
00:50:22.000 --> 00:50:22.800
and I'm gonna have lunch again

981
00:50:22.800 --> 00:50:24.400
and I'm gonna have other stuff at like, no,

982
00:50:24.400 --> 00:50:25.800
like we don't do that.

983
00:50:25.800 --> 00:50:27.100
If they are gonna do something

984
00:50:27.100 --> 00:50:28.400
and it's quote, very urgent

985
00:50:28.400 --> 00:50:29.800
and they have a very strong argument

986
00:50:29.800 --> 00:50:31.500
that I put at the very end of my day

987
00:50:31.500 --> 00:50:34.000
and I book from the back forwards.

988
00:50:34.000 --> 00:50:35.600
And so that means that if I say

989
00:50:35.600 --> 00:50:37.400
I wanna end my day at five or whatever,

990
00:50:37.400 --> 00:50:39.300
that it means they're gonna put my first meeting

991
00:50:39.300 --> 00:50:40.600
the day at four o'clock.

992
00:50:40.600 --> 00:50:43.600
So from four to five, if it's an hour long meeting.

993
00:50:43.600 --> 00:50:45.000
And if I have a second meeting that day,

994
00:50:45.000 --> 00:50:46.400
then it's gonna be from three to four.

995
00:50:46.400 --> 00:50:48.200
And so I still get my whole day

996
00:50:48.200 --> 00:50:49.700
until three o'clock uninterrupted

997
00:50:49.700 --> 00:50:51.400
so I can work on the things that matter most.

998
00:50:51.400 --> 00:50:54.200
And we have just learned Layla and I working together

999
00:50:54.200 --> 00:50:56.200
that basically the more she takes off my calendar,

1000
00:50:56.200 --> 00:50:58.000
the more money we make.

1001
00:50:58.000 --> 00:50:59.840
And that's because that's where I'm most effective.

1002
00:50:59.840 --> 00:51:01.800
Now the flip side is Layla is such

1003
00:51:01.800 --> 00:51:03.200
an exceptional operator and leader

1004
00:51:03.200 --> 00:51:04.800
that her form of productivity

1005
00:51:04.800 --> 00:51:06.000
is an absolute stack day

1006
00:51:06.000 --> 00:51:08.640
so that she can delegate, invest in the team,

1007
00:51:08.640 --> 00:51:10.880
prioritize resources, deal with small,

1008
00:51:10.880 --> 00:51:12.560
small decisions that have to move the ball forward,

1009
00:51:12.560 --> 00:51:13.400
chicken on projects,

1010
00:51:13.400 --> 00:51:14.200
hope people accountable,

1011
00:51:14.200 --> 00:51:16.240
reward them for the behaviors they've done.

1012
00:51:16.240 --> 00:51:18.040
Like interview new candidates

1013
00:51:18.040 --> 00:51:19.080
that we need to bring into the company.

1014
00:51:19.080 --> 00:51:20.500
Like that's a super time consuming thing.

1015
00:51:20.500 --> 00:51:22.180
It's very, very high leverage and very high value.

1016
00:51:22.180 --> 00:51:23.020
Like think about it.

1017
00:51:23.020 --> 00:51:24.660
If you have to take 20 interviews

1018
00:51:24.660 --> 00:51:25.900
to find the right person

1019
00:51:25.900 --> 00:51:29.100
who can then take an entire 20 hours a week off your plate,

1020
00:51:29.100 --> 00:51:30.220
I mean, jeez.

1021
00:51:30.220 --> 00:51:33.340
You spend 20 hours once to get 20 hours a week for life.

1022
00:51:33.340 --> 00:51:34.420
What a great return.

1023
00:51:34.420 --> 00:51:36.900
And this is why entrepreneurship at the highest levels.

1024
00:51:36.900 --> 00:51:37.860
I'm gonna go on a side drain here,

1025
00:51:37.860 --> 00:51:39.420
but I think it'll be important.

1026
00:51:39.420 --> 00:51:41.780
Entrepreneurship at the highest levels

1027
00:51:41.780 --> 00:51:46.780
is always hiring ahead of where you're at.

1028
00:51:47.740 --> 00:51:50.540
And for people who don't like their current business,

1029
00:51:50.540 --> 00:51:52.820
I can promise you that if you grow it enough,

1030
00:51:52.820 --> 00:51:54.100
you're just gonna be dealing with people

1031
00:51:54.100 --> 00:51:55.300
all businesses at the top

1032
00:51:55.300 --> 00:51:56.780
are you got a marketing person,

1033
00:51:56.780 --> 00:51:58.820
you got a sales person, you got a product person,

1034
00:51:58.820 --> 00:52:01.780
you got finance, you got legal, you got tech.

1035
00:52:01.780 --> 00:52:03.300
And that's the business.

1036
00:52:03.300 --> 00:52:04.700
And so whether you're selling widgets,

1037
00:52:04.700 --> 00:52:06.780
you're selling services, you're selling software.

1038
00:52:06.780 --> 00:52:09.340
Fundamentally, you're just gonna have a bunch of people

1039
00:52:09.340 --> 00:52:10.660
that are executing those things.

1040
00:52:10.660 --> 00:52:11.860
And so at the very highest levels,

1041
00:52:11.860 --> 00:52:13.140
business is all the same.

1042
00:52:14.060 --> 00:52:17.380
And you have to learn how to play business

1043
00:52:17.380 --> 00:52:21.420
at that level to keep playing at that level.

1044
00:52:21.420 --> 00:52:23.420
Business truth number seven.

1045
00:52:23.420 --> 00:52:25.100
Brand takes a long time to build,

1046
00:52:25.100 --> 00:52:27.380
but it's the most valuable thing that you could own.

1047
00:52:27.380 --> 00:52:29.420
It gives you the ability to get insane returns

1048
00:52:29.420 --> 00:52:31.980
on advertising, price far above the market

1049
00:52:31.980 --> 00:52:34.380
and keep people only buying from you.

1050
00:52:34.380 --> 00:52:36.180
It's very hard to imagine something

1051
00:52:36.180 --> 00:52:37.140
that is better than that.

1052
00:52:37.140 --> 00:52:38.700
It just takes time.

1053
00:52:38.700 --> 00:52:40.500
And so this was, I mean,

1054
00:52:40.500 --> 00:52:43.900
this is probably the lesson that took me so long to learn.

1055
00:52:43.900 --> 00:52:46.820
Like, you, I mean, many, many, many, many years.

1056
00:52:46.820 --> 00:52:49.020
I mean, I think I would say it took me a decade to learn this.

1057
00:52:49.020 --> 00:52:51.220
And it's, I've only been able to reap the fruit of this

1058
00:52:51.220 --> 00:52:53.060
in the last couple of years.

1059
00:52:53.060 --> 00:52:56.220
And first off, I didn't even understand what branding was.

1060
00:52:56.220 --> 00:52:57.420
Branding is simply an association

1061
00:52:57.420 --> 00:52:58.700
people make between something they know

1062
00:52:58.700 --> 00:52:59.540
and so they don't know.

1063
00:52:59.540 --> 00:53:01.180
The thing they don't know is your business,

1064
00:53:01.180 --> 00:53:03.220
the thing they do know should be something they like.

1065
00:53:03.220 --> 00:53:05.700
And then over time, that rubbing of the thing

1066
00:53:05.700 --> 00:53:07.100
that they like rubs off on your brand

1067
00:53:07.100 --> 00:53:08.540
and eventually you can drop this thing

1068
00:53:08.540 --> 00:53:10.300
and only have your company

1069
00:53:10.300 --> 00:53:12.500
and they will make that positive association with you.

1070
00:53:12.500 --> 00:53:15.100
And so there's three ways that people will make associations

1071
00:53:15.100 --> 00:53:16.340
to say you build a brand.

1072
00:53:16.340 --> 00:53:19.060
One is what you say or show, so that's controllable.

1073
00:53:19.060 --> 00:53:20.980
So people will associate this hat with me.

1074
00:53:20.980 --> 00:53:22.140
And if you got value during this thing,

1075
00:53:22.140 --> 00:53:23.140
then you'll associate the value

1076
00:53:23.140 --> 00:53:24.340
with acquisition.com.

1077
00:53:24.340 --> 00:53:25.180
Cool.

1078
00:53:25.180 --> 00:53:26.020
So that's what I can say or show.

1079
00:53:26.020 --> 00:53:28.220
This is advertising me, me making this content

1080
00:53:28.220 --> 00:53:29.060
is advertising, right?

1081
00:53:29.060 --> 00:53:31.180
I'm letting people know about my stuff.

1082
00:53:31.180 --> 00:53:33.580
The second level is what other people tell them.

1083
00:53:33.580 --> 00:53:35.060
And so that means like,

1084
00:53:35.060 --> 00:53:37.620
either someone who's interacted with your advertising

1085
00:53:37.620 --> 00:53:39.540
or somebody's interacted with your product.

1086
00:53:39.540 --> 00:53:43.500
So it's like, hey, I saw this trailer

1087
00:53:43.500 --> 00:53:47.140
for Mission Impossible, you know, 306.

1088
00:53:48.140 --> 00:53:50.380
And you're like, I think I'm gonna go see it.

1089
00:53:50.380 --> 00:53:53.900
Now if your friend says, oh, I saw it, it was bad.

1090
00:53:53.900 --> 00:53:55.180
Don't waste your money.

1091
00:53:55.180 --> 00:53:56.540
But likely that I go see it.

1092
00:53:56.540 --> 00:53:58.820
If I agree with that person's taste,

1093
00:53:58.820 --> 00:54:00.260
that's, you know, key side note there,

1094
00:54:00.260 --> 00:54:02.500
if I tend to like the same movies they like,

1095
00:54:02.500 --> 00:54:03.980
then I would take that really heavily.

1096
00:54:03.980 --> 00:54:07.380
If it's like my mom and I don't agree with movies

1097
00:54:07.380 --> 00:54:08.820
that she likes, I might just go see it more

1098
00:54:08.820 --> 00:54:09.780
because I'm like, oh, she hated it.

1099
00:54:09.780 --> 00:54:11.220
I probably love it, right?

1100
00:54:11.220 --> 00:54:13.580
And so what you say is the company owner

1101
00:54:13.580 --> 00:54:15.980
is thing one that you can control the most.

1102
00:54:15.980 --> 00:54:17.780
Thing two that you can't really control

1103
00:54:17.780 --> 00:54:21.020
is what other people say about your stuff,

1104
00:54:21.020 --> 00:54:23.380
which then goes to C or three,

1105
00:54:23.380 --> 00:54:26.420
which is what the customer ends up saying

1106
00:54:26.420 --> 00:54:27.820
once they experience it.

1107
00:54:27.820 --> 00:54:30.020
So it's what you say, what other people say,

1108
00:54:30.020 --> 00:54:31.660
and what they actually experience.

1109
00:54:31.660 --> 00:54:33.060
And so as you can imagine,

1110
00:54:33.060 --> 00:54:35.300
what the experience is gonna be the strongest thing.

1111
00:54:35.300 --> 00:54:38.020
So you see the ad, you think about going to the movie.

1112
00:54:38.020 --> 00:54:39.500
Someone tells you something about the movie,

1113
00:54:39.500 --> 00:54:40.860
maybe that influenced your decision.

1114
00:54:40.860 --> 00:54:42.220
Once you see the movie,

1115
00:54:42.220 --> 00:54:44.180
then you have a much stronger opinion

1116
00:54:44.180 --> 00:54:45.660
and you can see another ad about the movie,

1117
00:54:45.660 --> 00:54:47.220
but you're like, I don't care what the ad says.

1118
00:54:47.220 --> 00:54:48.140
I saw the movie.

1119
00:54:48.140 --> 00:54:49.540
I bought the sandwich.

1120
00:54:49.540 --> 00:54:52.060
I went to use their marketing services.

1121
00:54:52.060 --> 00:54:53.940
You have a very informed opinion

1122
00:54:53.940 --> 00:54:55.940
because you had an experience.

1123
00:54:55.940 --> 00:54:58.220
And so this is why brand and product

1124
00:54:58.220 --> 00:54:59.620
are always gonna be interrelated

1125
00:54:59.620 --> 00:55:02.020
because how do you get what other people say

1126
00:55:02.020 --> 00:55:04.220
to be good to your potential prospects?

1127
00:55:04.220 --> 00:55:06.700
You make sure that their experience was exceptional

1128
00:55:06.700 --> 00:55:07.900
so that when they do see it,

1129
00:55:07.900 --> 00:55:10.300
they say, hey, the movie was awesome, you should go see it.

1130
00:55:10.300 --> 00:55:12.660
Now, if someone who I like a lot says,

1131
00:55:12.660 --> 00:55:13.980
hey, the movie was awesome, you should go see it.

1132
00:55:13.980 --> 00:55:14.900
And I'm like, I saw the ads.

1133
00:55:14.900 --> 00:55:15.740
I don't think it was that good.

1134
00:55:15.740 --> 00:55:17.220
And they're like, dude, believe me, see it.

1135
00:55:17.220 --> 00:55:19.380
Now, all of a sudden, I had poor advertising

1136
00:55:19.380 --> 00:55:20.540
about high likelihood of seeing.

1137
00:55:20.540 --> 00:55:21.380
And then if I go see it,

1138
00:55:21.380 --> 00:55:23.500
and I say, wow, he was so right, this was awesome.

1139
00:55:23.500 --> 00:55:25.180
Then I'm like, I tell other people.

1140
00:55:25.180 --> 00:55:27.220
Now, here's what gets kind of interesting.

1141
00:55:27.220 --> 00:55:28.980
If I go see it and I think it sucks,

1142
00:55:28.980 --> 00:55:31.900
that influence is the brand of my friend

1143
00:55:31.900 --> 00:55:32.900
who told me about it

1144
00:55:32.900 --> 00:55:34.300
because now I don't actually believe

1145
00:55:34.300 --> 00:55:36.300
their opinion of movies anymore.

1146
00:55:36.300 --> 00:55:38.620
And so that's why, as a side note,

1147
00:55:38.620 --> 00:55:40.340
when people refer people to your business,

1148
00:55:40.340 --> 00:55:41.740
they have to be treated so well

1149
00:55:41.740 --> 00:55:43.460
because that person who made the referral

1150
00:55:43.460 --> 00:55:44.980
risks relational capital,

1151
00:55:44.980 --> 00:55:47.780
they risk their personal brand to the friend.

1152
00:55:47.780 --> 00:55:48.780
And the reason they make that risk

1153
00:55:48.780 --> 00:55:50.460
is because they actually want to get a return on it, right?

1154
00:55:50.460 --> 00:55:51.540
Like, hey, you should see this movie

1155
00:55:51.540 --> 00:55:53.820
because they want the friend to associate

1156
00:55:53.820 --> 00:55:56.060
the good experience with the movie with them.

1157
00:55:56.060 --> 00:55:57.300
And that's why people do things.

1158
00:55:57.300 --> 00:55:59.820
That's why you do refer products that you actually like

1159
00:55:59.820 --> 00:56:02.060
because you want people to associate

1160
00:56:02.060 --> 00:56:02.980
or have that problem solved

1161
00:56:02.980 --> 00:56:05.420
because of the thing that you connected them to, right?

1162
00:56:05.420 --> 00:56:06.820
And so we want to be that connection

1163
00:56:06.820 --> 00:56:07.940
and that's how we make money.

1164
00:56:07.940 --> 00:56:09.580
Now, if we're thinking long term though,

1165
00:56:09.580 --> 00:56:11.180
from a branding perspective,

1166
00:56:11.180 --> 00:56:13.620
if you make a big promise

1167
00:56:13.620 --> 00:56:16.180
and you deliver on that promise consistently,

1168
00:56:16.180 --> 00:56:19.220
people will say, wow, they are what they said they were

1169
00:56:19.220 --> 00:56:20.380
which is one of my biggest rules

1170
00:56:20.380 --> 00:56:22.420
of marketing is state the facts until the truth.

1171
00:56:22.420 --> 00:56:23.900
Don't make promises you can't keep.

1172
00:56:23.900 --> 00:56:25.780
And just say, hey, this is why I like using historic

1173
00:56:25.780 --> 00:56:27.020
which is like, this is what has happened.

1174
00:56:27.020 --> 00:56:28.220
I don't know if it'll happen for you

1175
00:56:28.220 --> 00:56:30.180
but if you're willing to take that bet,

1176
00:56:30.180 --> 00:56:31.780
then there you go.

1177
00:56:31.780 --> 00:56:33.500
And so if we think about the things

1178
00:56:33.500 --> 00:56:34.980
that are some of the strongest levers in business,

1179
00:56:35.020 --> 00:56:38.100
price is the strongest lever on profit

1180
00:56:38.100 --> 00:56:39.540
of all things that you can control business.

1181
00:56:39.540 --> 00:56:41.900
If you get people to buy something for a million dollars

1182
00:56:41.900 --> 00:56:43.620
that other people buy for $10,

1183
00:56:43.620 --> 00:56:44.860
you're gonna make a lot of money.

1184
00:56:44.860 --> 00:56:46.980
And so price is one of the strongest things

1185
00:56:46.980 --> 00:56:47.980
that has a lever on market

1186
00:56:47.980 --> 00:56:49.780
and you can measure the strength of a brand

1187
00:56:49.780 --> 00:56:52.440
by how much above the commoditized price

1188
00:56:52.440 --> 00:56:54.180
or what other competitors charge,

1189
00:56:54.180 --> 00:56:56.420
you can charge because of your brand premium.

1190
00:56:56.420 --> 00:57:00.380
So if you look at like a Nike versus a generic brand

1191
00:57:00.380 --> 00:57:03.580
for T-shirts, shorts, shoes, basketballs, whatever,

1192
00:57:03.580 --> 00:57:04.980
they will charge a premium

1193
00:57:04.980 --> 00:57:06.580
and they will get that premium.

1194
00:57:06.580 --> 00:57:10.580
And so they're able to sell more units at higher prices

1195
00:57:11.500 --> 00:57:12.340
because of their brand

1196
00:57:12.340 --> 00:57:14.500
and because these associations people have with them.

1197
00:57:14.500 --> 00:57:17.700
And so then the ROI from the brand becomes

1198
00:57:17.700 --> 00:57:20.380
how much does it cost me to make these associations

1199
00:57:20.380 --> 00:57:21.780
that people find positive?

1200
00:57:21.780 --> 00:57:23.700
And then you spread that out

1201
00:57:23.700 --> 00:57:26.700
or you fractalize that against how much of an increase

1202
00:57:26.700 --> 00:57:28.660
in price you can have against the commodity.

1203
00:57:28.660 --> 00:57:32.180
And so if I sell a million units of something

1204
00:57:32.180 --> 00:57:35.980
and I can sell it for $3 above market,

1205
00:57:35.980 --> 00:57:40.500
then I have $3 million of excess that that brand buys me.

1206
00:57:40.500 --> 00:57:42.180
And so if I can get an association

1207
00:57:42.180 --> 00:57:43.980
that yields me that outcome for let's say

1208
00:57:43.980 --> 00:57:46.540
I can get a championship fighter for 250 grand a year

1209
00:57:46.540 --> 00:57:47.860
to be in my ads,

1210
00:57:49.620 --> 00:57:53.500
then I get a 10 to one or I'll say 300,000 make a math symbol.

1211
00:57:53.500 --> 00:57:55.460
If I pay $300,000 that association

1212
00:57:55.460 --> 00:57:57.820
and I can now charge and make $3 million

1213
00:57:57.820 --> 00:57:59.900
actually I get 10 to one on that branding.

1214
00:57:59.900 --> 00:58:02.340
The row as you get return on advertising spent

1215
00:58:02.340 --> 00:58:04.620
absolutely still all the metrics makes

1216
00:58:04.620 --> 00:58:05.700
count the same for branding

1217
00:58:05.700 --> 00:58:07.580
as they do with direct response advertising.

1218
00:58:07.580 --> 00:58:10.340
You just have to measure over a longer time horizon.

1219
00:58:10.340 --> 00:58:11.380
That's the difference.

1220
00:58:11.380 --> 00:58:13.900
And I will say on a personal level,

1221
00:58:13.900 --> 00:58:16.300
branding gets you far better returns on advertising

1222
00:58:16.300 --> 00:58:17.500
than anything else.

1223
00:58:17.500 --> 00:58:19.100
It just takes longer.

1224
00:58:19.100 --> 00:58:21.020
And so think about the direct response world

1225
00:58:21.020 --> 00:58:22.220
as like your paycheck.

1226
00:58:22.220 --> 00:58:23.980
It's like you're you're ready to check in

1227
00:58:23.980 --> 00:58:24.820
and you get money out.

1228
00:58:24.820 --> 00:58:26.940
You're ready to check in and the moment you stop

1229
00:58:26.940 --> 00:58:28.940
spending that money you stop making money.

1230
00:58:28.940 --> 00:58:31.020
Brand is like your long term investment.

1231
00:58:31.020 --> 00:58:33.620
In the beginning, you're investing money into your IRA,

1232
00:58:33.620 --> 00:58:35.020
you're investing money into your 401k,

1233
00:58:35.020 --> 00:58:36.020
you're investing money in the stock market,

1234
00:58:36.020 --> 00:58:37.900
but it's not really compounding it.

1235
00:58:37.900 --> 00:58:39.700
But the thing is is that you keep doing that,

1236
00:58:39.700 --> 00:58:40.940
you keep doing that, you keep doing that.

1237
00:58:40.940 --> 00:58:42.700
And all of a sudden the compounding

1238
00:58:42.700 --> 00:58:44.740
starts to become this monster that you couldn't even,

1239
00:58:44.740 --> 00:58:46.140
you couldn't even spend enough

1240
00:58:46.140 --> 00:58:48.460
market dollars to make up for that level of compounding.

1241
00:58:48.460 --> 00:58:49.820
And that's what happens over time.

1242
00:58:49.820 --> 00:58:50.980
It just takes time to get there.

1243
00:58:50.980 --> 00:58:52.260
But the way that you control it

1244
00:58:52.260 --> 00:58:54.100
or that you make sure that the things

1245
00:58:54.100 --> 00:58:55.540
that you were selling about yourself

1246
00:58:55.540 --> 00:58:57.620
are associated with things that the people

1247
00:58:57.620 --> 00:59:00.380
who you're trying to sell to associate positively.

1248
00:59:00.380 --> 00:59:03.420
And this happens in content and also the people

1249
00:59:03.420 --> 00:59:04.940
that you associate with publicly.

1250
00:59:06.020 --> 00:59:07.900
The second part that you can control

1251
00:59:07.900 --> 00:59:10.180
is how much you deliver on the promise.

1252
00:59:10.180 --> 00:59:11.820
Because the experience is always gonna be

1253
00:59:11.820 --> 00:59:13.580
the heaviest way to think that people have.

1254
00:59:13.580 --> 00:59:17.100
Now the approximation of an experience is a review, right?

1255
00:59:17.100 --> 00:59:18.540
The reason reviews matter so much

1256
00:59:18.540 --> 00:59:21.220
is because we see that like cool, they say they're great.

1257
00:59:21.220 --> 00:59:23.180
Now I go to their site and I read reviews

1258
00:59:23.180 --> 00:59:25.180
to see are they telling the truth or not

1259
00:59:25.180 --> 00:59:26.940
based on approximate reviews

1260
00:59:26.940 --> 00:59:28.740
and then I say, okay, well this guy at one star

1261
00:59:28.740 --> 00:59:31.500
but it looks like he isn't a lot like me.

1262
00:59:31.500 --> 00:59:32.540
Now I look at these other guys.

1263
00:59:32.540 --> 00:59:34.020
Oh, these are a lot more like my use case

1264
00:59:34.020 --> 00:59:34.780
and they had five stars.

1265
00:59:34.780 --> 00:59:36.860
Okay, well then I feel like my risk adjusted

1266
00:59:36.860 --> 00:59:38.020
on making this purchase is low.

1267
00:59:38.020 --> 00:59:40.020
Now I buy it and then I decide for myself.

1268
00:59:40.980 --> 00:59:42.820
But the branding is a loop.

1269
00:59:42.820 --> 00:59:44.860
It helps make the purchasing decision

1270
00:59:44.860 --> 00:59:47.860
and if you fulfill on that, then guess what they're not gonna do.

1271
00:59:47.860 --> 00:59:49.740
They took a risk by buying your product,

1272
00:59:49.740 --> 00:59:51.140
not knowing who you were.

1273
00:59:51.140 --> 00:59:52.940
They don't wanna take that risk again.

1274
00:59:52.940 --> 00:59:54.580
And so if you deliver on the promise,

1275
00:59:54.580 --> 00:59:55.980
they will just buy again from you,

1276
00:59:55.980 --> 00:59:58.700
even with the premium and this is how you start

1277
00:59:58.700 --> 01:00:01.300
how brand ended of itself can create a competitive mode.

1278
01:00:01.300 --> 01:00:03.460
People who buy Apple become Apple buyers.

1279
01:00:03.460 --> 01:00:05.340
They just only buy Apple.

1280
01:00:05.340 --> 01:00:07.260
And so even though somebody else's product

1281
01:00:07.260 --> 01:00:09.500
might even be better, they don't wanna risk trying it

1282
01:00:09.500 --> 01:00:10.580
and they don't wanna have the cost

1283
01:00:10.580 --> 01:00:13.100
of learning a new interface and all this other stuff.

1284
01:00:13.100 --> 01:00:16.460
And so brand gets you higher returns on advertising.

1285
01:00:16.460 --> 01:00:18.220
It allows you to price far above the market

1286
01:00:18.220 --> 01:00:20.220
and get people that once they buy from you,

1287
01:00:20.220 --> 01:00:23.220
they keep buying from you and you do that by what you say,

1288
01:00:23.220 --> 01:00:25.500
what other people say and what customers experience

1289
01:00:25.500 --> 01:00:27.140
at the very end when they use your product

1290
01:00:27.140 --> 01:00:29.860
and that either gets them into the buying loop again forever

1291
01:00:29.860 --> 01:00:31.340
or it kicks them out.

1292
01:00:31.340 --> 01:00:33.660
If you look at the cutting edge direct response world,

1293
01:00:33.660 --> 01:00:38.220
the strategies that they use approximate a brand.

1294
01:00:38.220 --> 01:00:40.380
And so let me explain what that means.

1295
01:00:40.380 --> 01:00:41.980
So if you go to quote cold traffic,

1296
01:00:41.980 --> 01:00:44.260
people who don't know who you are, you have no association.

1297
01:00:44.260 --> 01:00:46.020
Once those people go in your world oftentimes,

1298
01:00:46.020 --> 01:00:47.260
unless it's like a widget or something

1299
01:00:47.260 --> 01:00:48.540
that's a very impulse purchase,

1300
01:00:48.540 --> 01:00:50.340
you have something called like a warmup sequence

1301
01:00:50.340 --> 01:00:52.380
or a nurture sequence or you deliver value

1302
01:00:52.380 --> 01:00:53.780
or you give lead magnets.

1303
01:00:53.780 --> 01:00:56.580
These are all things that actually approximate branding.

1304
01:00:56.580 --> 01:00:59.620
So if I give someone, let's say a PDF

1305
01:00:59.620 --> 01:01:00.940
that is very valuable, well thought out,

1306
01:01:00.940 --> 01:01:02.700
has lots of research in it.

1307
01:01:02.700 --> 01:01:04.420
Someone would get a lot of value from that

1308
01:01:04.420 --> 01:01:08.140
and then I approximated a purchase with them.

1309
01:01:08.140 --> 01:01:11.500
They did an exchange, they got something

1310
01:01:11.500 --> 01:01:12.780
and then that thing was valuable

1311
01:01:12.780 --> 01:01:14.420
and they used that to extrapolate

1312
01:01:14.420 --> 01:01:15.940
into what a decision would be like

1313
01:01:15.940 --> 01:01:17.420
or what a product would be like

1314
01:01:17.420 --> 01:01:19.140
if they made a purchase from you.

1315
01:01:19.140 --> 01:01:22.020
And so you have these things like five day challenges

1316
01:01:22.020 --> 01:01:23.820
that people will run to try and have lots of people

1317
01:01:23.820 --> 01:01:25.900
for five days because if you spend,

1318
01:01:25.900 --> 01:01:28.220
let's say five hours with someone,

1319
01:01:28.220 --> 01:01:31.460
that might be the same in terms of their warmth to you

1320
01:01:31.460 --> 01:01:33.820
or the associations they have with you

1321
01:01:33.820 --> 01:01:36.580
as someone who might have spent a year consuming

1322
01:01:36.580 --> 01:01:39.540
a 60 second clip twice a week, right?

1323
01:01:39.540 --> 01:01:40.620
Now I will say I think that

1324
01:01:40.620 --> 01:01:42.300
extending the time horizon over time

1325
01:01:42.300 --> 01:01:44.940
actually does have elements of trust that I will get into

1326
01:01:44.940 --> 01:01:48.740
but they try to approximate what a trusting relationship

1327
01:01:48.740 --> 01:01:51.140
would look like which is exactly how you build brand.

1328
01:01:51.140 --> 01:01:53.060
But they just try and condense the time window.

1329
01:01:53.060 --> 01:01:55.500
And so this is why if they want to sell you Swampland

1330
01:01:55.500 --> 01:01:57.380
they invite you to a vacation for free

1331
01:01:57.380 --> 01:02:00.820
and they spend two days with you pitching Swampland

1332
01:02:00.820 --> 01:02:02.100
because at the end of two days you're like,

1333
01:02:02.100 --> 01:02:04.060
why I spent 24 hours with this person like,

1334
01:02:04.060 --> 01:02:05.340
I feel like I can trust them.

1335
01:02:05.340 --> 01:02:06.940
And so they actually build a reputation

1336
01:02:06.940 --> 01:02:09.420
and a very minor in a many way

1337
01:02:09.420 --> 01:02:11.540
in a tiny audience to make the sale.

1338
01:02:12.500 --> 01:02:15.020
Whereas if you want to build it in my opinion,

1339
01:02:15.020 --> 01:02:17.660
big, big brand you want to build that same level of trust

1340
01:02:17.660 --> 01:02:19.460
across millions of people

1341
01:02:19.460 --> 01:02:21.660
and then when you say, hey, I've got something

1342
01:02:21.660 --> 01:02:23.500
they all act as though they've been with you

1343
01:02:23.500 --> 01:02:26.100
for two straight days to make the purchase.

1344
01:02:26.100 --> 01:02:27.220
And if you spent two days with someone's

1345
01:02:27.220 --> 01:02:29.820
that, hey, buy my basketball, they'll all buy it.

1346
01:02:29.820 --> 01:02:31.580
But you just do that times a million

1347
01:02:31.580 --> 01:02:33.260
and that's what big brand looks like.

1348
01:02:33.260 --> 01:02:34.740
Business truth number eight,

1349
01:02:34.740 --> 01:02:36.100
you need to know what inputs and outputs

1350
01:02:36.100 --> 01:02:37.580
your money making system are

1351
01:02:37.580 --> 01:02:40.100
broken down to the absolute smallest action

1352
01:02:40.100 --> 01:02:41.660
and that way you can crank the hell out of it.

1353
01:02:41.660 --> 01:02:42.820
So let me explain.

1354
01:02:42.820 --> 01:02:45.180
So if I say, all right,

1355
01:02:45.180 --> 01:02:46.100
so this happens all the time.

1356
01:02:46.100 --> 01:02:47.860
So we want to invest in a company,

1357
01:02:47.860 --> 01:02:49.780
we come in and a lot of times right,

1358
01:02:49.780 --> 01:02:52.220
like we're in the diligence part of the deal cycle

1359
01:02:52.220 --> 01:02:55.740
and I say, okay, so you've got five sales guys

1360
01:02:55.740 --> 01:02:58.540
and you're spent in $5,000 a day on ads.

1361
01:02:58.540 --> 01:03:00.620
That's your primary way of getting leads.

1362
01:03:00.620 --> 01:03:02.500
Why aren't we spending 50,000 a day?

1363
01:03:04.100 --> 01:03:05.100
I just ask the question,

1364
01:03:05.100 --> 01:03:07.500
like what stops us from spending 50,000 a day?

1365
01:03:08.620 --> 01:03:10.460
And then a number of things will come up

1366
01:03:10.460 --> 01:03:12.460
and then the question is how solvable are those things?

1367
01:03:12.460 --> 01:03:14.340
Now if they say, well, whenever we spend more money,

1368
01:03:14.340 --> 01:03:15.740
our row eyes goes down to be like, okay,

1369
01:03:15.740 --> 01:03:17.420
I would see that as your ad suck.

1370
01:03:17.420 --> 01:03:18.260
Great.

1371
01:03:18.260 --> 01:03:21.500
If they say, we can't handle the call volume,

1372
01:03:21.500 --> 01:03:23.500
then I'd be like, oh, you don't know how to hire crew

1373
01:03:23.500 --> 01:03:24.660
and train salespeople.

1374
01:03:24.660 --> 01:03:25.500
Cool.

1375
01:03:25.500 --> 01:03:26.500
If they say, oh, we could,

1376
01:03:26.500 --> 01:03:28.100
it's just that we couldn't deliver

1377
01:03:28.100 --> 01:03:30.540
based on the promises that we make

1378
01:03:30.540 --> 01:03:32.420
because we have a lot of high touch service, like, okay,

1379
01:03:32.420 --> 01:03:35.020
so you need to, we need to systematize more stuff

1380
01:03:35.020 --> 01:03:36.900
on the back end and get better training in place

1381
01:03:36.900 --> 01:03:37.700
on the back end.

1382
01:03:37.700 --> 01:03:41.140
Ideally, and maybe bring someone who's ruling that,

1383
01:03:41.140 --> 01:03:43.060
owning that rather than the fatter

1384
01:03:43.060 --> 01:03:44.660
who's put between too many places, right?

1385
01:03:44.660 --> 01:03:46.700
So like, you can quickly understand

1386
01:03:46.700 --> 01:03:47.780
where the constraint of the business is

1387
01:03:47.780 --> 01:03:50.100
by simply asking, why can't we tell next this, right?

1388
01:03:50.100 --> 01:03:55.100
Now, the skill of an individual is inversely proportional

1389
01:03:55.500 --> 01:03:59.260
to how vague your direction can be.

1390
01:03:59.260 --> 01:04:00.420
So let me explain.

1391
01:04:00.420 --> 01:04:04.340
So if someone comes to me and says, hey, Alex,

1392
01:04:04.340 --> 01:04:07.260
I have this product, can you promote it?

1393
01:04:07.260 --> 01:04:10.220
I have no marketing department, can you just promote it?

1394
01:04:10.220 --> 01:04:12.300
He can just say that or she can just say that

1395
01:04:12.300 --> 01:04:15.060
and I will know everything else that that means.

1396
01:04:16.220 --> 01:04:18.020
At the absolute lowest level, if you say that

1397
01:04:18.020 --> 01:04:20.420
to a five-year-old, you'd be like, okay,

1398
01:04:20.420 --> 01:04:22.180
so this is what promotion means

1399
01:04:22.180 --> 01:04:24.340
and there's all these different ways we can promote

1400
01:04:24.340 --> 01:04:26.780
and I need you to learn how to turn on a computer

1401
01:04:26.780 --> 01:04:28.460
and then this is how you create an email

1402
01:04:28.460 --> 01:04:31.220
and this is how you'd have to go step-by-step-by-step.

1403
01:04:31.220 --> 01:04:34.220
And so the more vague your direction,

1404
01:04:34.220 --> 01:04:36.740
the more skilled the individuals you need to have

1405
01:04:36.740 --> 01:04:38.340
in order to do it, which, by the way,

1406
01:04:38.340 --> 01:04:40.220
is why smart people is a great investment

1407
01:04:40.220 --> 01:04:41.620
because it's actually more efficient

1408
01:04:41.620 --> 01:04:43.220
from a communication perspective.

1409
01:04:43.220 --> 01:04:45.820
I can say, hey, John, fix churn.

1410
01:04:45.820 --> 01:04:48.300
And I can just say fix churn and he knows

1411
01:04:48.300 --> 01:04:50.260
all the subtasks underneath of it.

1412
01:04:50.260 --> 01:04:51.980
But over time, it's valuable for you as the entrepreneur

1413
01:04:51.980 --> 01:04:54.740
to know as much, how much of that dirt as you can

1414
01:04:54.740 --> 01:04:56.180
so you can level check and say,

1415
01:04:56.180 --> 01:04:58.180
how good is this person they really doing their job, et cetera?

1416
01:04:58.180 --> 01:05:00.780
Now, let's go to advertising as simple example.

1417
01:05:00.780 --> 01:05:02.500
Actually, let's use the example I had earlier.

1418
01:05:02.500 --> 01:05:04.620
So we had three different problems that I presented.

1419
01:05:04.620 --> 01:05:06.660
I said, why can't we 10x this thing?

1420
01:05:06.660 --> 01:05:10.620
So the first version of the problem was their ad suck.

1421
01:05:10.620 --> 01:05:13.500
And I say, OK, you can't skill your row as there.

1422
01:05:13.500 --> 01:05:15.780
So either, so it's not just that their ad suck,

1423
01:05:15.780 --> 01:05:18.420
the tam could be bad, as in like they could be

1424
01:05:18.420 --> 01:05:20.140
a local market and you can't 10x your ad spend

1425
01:05:20.140 --> 01:05:21.500
from $5,000 to $50,000 a day

1426
01:05:21.500 --> 01:05:22.820
because there's just not that many people

1427
01:05:22.820 --> 01:05:24.020
in the local market.

1428
01:05:24.020 --> 01:05:25.660
But assuming that that's not the case

1429
01:05:25.660 --> 01:05:27.420
and it's just that their ad suck,

1430
01:05:27.420 --> 01:05:29.140
then I say, OK, walk me through the process

1431
01:05:29.140 --> 01:05:30.340
how you make ads.

1432
01:05:30.340 --> 01:05:33.140
And so then what we say is, OK, usually you can nail it down

1433
01:05:33.140 --> 01:05:35.140
to like, you're not doing enough pre-work

1434
01:05:35.140 --> 01:05:37.500
and pre-work is defined as I need you

1435
01:05:37.500 --> 01:05:39.660
before you start to sit down and write ads

1436
01:05:39.660 --> 01:05:42.180
that you're going to look at the top 20 ads you've done

1437
01:05:42.180 --> 01:05:43.540
of all time, you're going to re-watch them.

1438
01:05:43.540 --> 01:05:46.140
Step one, step two, you're going to go through all the ads

1439
01:05:46.140 --> 01:05:48.100
that you saw this week across all your platforms

1440
01:05:48.100 --> 01:05:50.660
that you thought were interesting that you liked a model.

1441
01:05:50.660 --> 01:05:53.900
Step two, step three, you're going to recreate

1442
01:05:53.900 --> 01:05:54.980
the best ads you've done.

1443
01:05:54.980 --> 01:05:56.420
You're literally going to remake them.

1444
01:05:56.420 --> 01:05:58.100
Step two, you're going to take the best ads

1445
01:05:58.100 --> 01:05:59.100
and just reformat them.

1446
01:05:59.100 --> 01:06:04.700
So old footage, new edit, versus same message,

1447
01:06:04.700 --> 01:06:06.980
new take, and then we're also going

1448
01:06:06.980 --> 01:06:11.820
to create 30 more ads that are completely new, net new takes

1449
01:06:11.820 --> 01:06:15.700
using the ideas that you had inspiration from

1450
01:06:15.700 --> 01:06:18.540
and just inspiring from old ads that you've used before

1451
01:06:18.540 --> 01:06:20.340
that you're not actually redoing the same messaging,

1452
01:06:20.340 --> 01:06:23.340
you're mixing and matching and doing a remix, right?

1453
01:06:23.340 --> 01:06:25.580
And so it's like, great, this is the process

1454
01:06:25.580 --> 01:06:27.500
and you're going to do this every week.

1455
01:06:27.500 --> 01:06:30.220
And so that means that you're going to spend half a day prepping

1456
01:06:30.220 --> 01:06:32.740
and half a day filming every single week.

1457
01:06:32.780 --> 01:06:36.580
Now, it's very easy for me to say, when I say, hey,

1458
01:06:36.580 --> 01:06:38.940
are you doing the ads process that I outlined?

1459
01:06:38.940 --> 01:06:41.100
They're like, no, we are, but it's not really working.

1460
01:06:41.100 --> 01:06:44.460
Like, show me the hooks that you wrote

1461
01:06:44.460 --> 01:06:46.940
from the ads that we're already working.

1462
01:06:46.940 --> 01:06:49.420
Show me the remixes that you did from the best performers.

1463
01:06:49.420 --> 01:06:51.620
Show me your album that you've been saving

1464
01:06:51.620 --> 01:06:53.140
for all the ads that you like.

1465
01:06:53.140 --> 01:06:54.660
If they can't show me these things,

1466
01:06:54.660 --> 01:06:56.980
they're not doing the fundamental actions.

1467
01:06:56.980 --> 01:06:58.180
So that's like example one.

1468
01:06:58.180 --> 01:07:00.940
If I said that it was like, they can't scale the sales team,

1469
01:07:00.940 --> 01:07:03.660
then I'd say, okay, how do we scale the sales team?

1470
01:07:03.660 --> 01:07:05.620
So, oh, well, we just got to go get people.

1471
01:07:05.620 --> 01:07:07.780
What does that actually mean from an action level?

1472
01:07:07.780 --> 01:07:09.820
Well, it turns out it means that we need to reach out

1473
01:07:09.820 --> 01:07:14.820
to 100 people on LinkedIn in order to get one person hired.

1474
01:07:15.500 --> 01:07:18.420
Okay, so based on our churn rate for sales guys,

1475
01:07:18.420 --> 01:07:20.900
let's say we lose one person a quarter, whatever,

1476
01:07:20.900 --> 01:07:23.180
that happens more with bigger teams this side note.

1477
01:07:24.500 --> 01:07:28.580
I say, okay, well, if we do three reach outs a day

1478
01:07:28.580 --> 01:07:30.900
over 90 days, then we're just going to replace our churn.

1479
01:07:30.940 --> 01:07:33.220
We're going to have 90 reach outs to get one good guy,

1480
01:07:33.220 --> 01:07:34.060
and we're going to lose one guy.

1481
01:07:34.060 --> 01:07:35.420
So we're never going to grow the team.

1482
01:07:35.420 --> 01:07:38.380
They're like, oh, it's like, so if we need to 10x this team,

1483
01:07:38.380 --> 01:07:41.860
then we need to do, well, 100 gets us one,

1484
01:07:41.860 --> 01:07:43.980
and we lose a third of a sales rep per month,

1485
01:07:43.980 --> 01:07:45.540
which if it's, we had a five-person team,

1486
01:07:45.540 --> 01:07:46.940
we'd be losing 20% per month.

1487
01:07:46.940 --> 01:07:48.220
By the way, you get employee churn this

1488
01:07:48.220 --> 01:07:49.780
and we get customer churn.

1489
01:07:49.780 --> 01:07:52.340
And so you say, okay, so our rate is 20% churn out.

1490
01:07:52.340 --> 01:07:53.340
Is there things we can fix that?

1491
01:07:53.340 --> 01:07:56.700
Sure, but just for the sake of this example,

1492
01:07:56.700 --> 01:07:59.180
we say, all right, so we need to get,

1493
01:07:59.180 --> 01:08:00.460
if we want to double this team this quarter,

1494
01:08:00.460 --> 01:08:02.180
we need to do 500 reach outs.

1495
01:08:02.180 --> 01:08:05.740
Now 500 reach outs is going to result in,

1496
01:08:05.740 --> 01:08:08.340
call it 50 interviews.

1497
01:08:08.340 --> 01:08:10.220
And 50 interviews is going to take them so strong.

1498
01:08:10.220 --> 01:08:13.460
So we need to take at least, call it 10,

1499
01:08:13.460 --> 01:08:14.900
maybe 15 interviews a week,

1500
01:08:14.900 --> 01:08:15.900
because we want to be ahead,

1501
01:08:16.900 --> 01:08:17.900
because I don't want to get it by the end.

1502
01:08:17.900 --> 01:08:19.620
I want to get, I want to have these people done

1503
01:08:19.620 --> 01:08:22.340
and onboard and productive by the end of this quarter,

1504
01:08:22.340 --> 01:08:23.660
not just finished.

1505
01:08:23.660 --> 01:08:27.220
And so if you're like, wow, going from five to 10 is a lot.

1506
01:08:27.220 --> 01:08:29.820
Dude, we put, we went from zero to 40 in a company.

1507
01:08:29.820 --> 01:08:32.100
Like it's 100% just your belief set of what's possible.

1508
01:08:32.100 --> 01:08:33.300
And I will tell you this right now,

1509
01:08:33.300 --> 01:08:35.580
this is just a life hack for making more money.

1510
01:08:36.780 --> 01:08:38.340
You will, so many entrepreneurs,

1511
01:08:38.340 --> 01:08:40.020
like you've built a five person sales team,

1512
01:08:40.020 --> 01:08:42.060
and you immediately scale whatever business you do next

1513
01:08:42.060 --> 01:08:43.900
to a five person sales team and then you stop there,

1514
01:08:43.900 --> 01:08:45.860
because you just don't know how to grow past that.

1515
01:08:45.860 --> 01:08:47.420
And so you just do what you're comfortable with.

1516
01:08:47.420 --> 01:08:48.780
You're, a lot of you guys are comfortable

1517
01:08:48.780 --> 01:08:50.060
at $1,000 a day in Ants Bend,

1518
01:08:50.060 --> 01:08:52.100
and you just know how to do that and you can't get past that.

1519
01:08:52.100 --> 01:08:53.660
And so you have to break these,

1520
01:08:53.660 --> 01:08:55.540
these, these limiters that you have

1521
01:08:55.540 --> 01:08:58.140
and say, why can't I spend 10,000 a day?

1522
01:08:58.140 --> 01:09:00.700
Why can't I hire 30 sales guys to do,

1523
01:09:00.700 --> 01:09:01.980
outbound in 90 days?

1524
01:09:01.980 --> 01:09:06.900
I heard a story of a multi-billioner entrepreneur,

1525
01:09:06.900 --> 01:09:09.500
X Blackstone guy that has raised billions of millions

1526
01:09:09.500 --> 01:09:11.780
of dollars, whatever, and he became,

1527
01:09:11.780 --> 01:09:12.860
I can't share the company,

1528
01:09:14.060 --> 01:09:15.300
comes with a 100 billion now,

1529
01:09:15.300 --> 01:09:16.260
and it's not Shopify,

1530
01:09:16.260 --> 01:09:19.140
because if you think about Harley, it's not him.

1531
01:09:19.140 --> 01:09:21.260
And he started this new fund,

1532
01:09:21.260 --> 01:09:22.700
and in order to start it,

1533
01:09:22.700 --> 01:09:24.900
and he raised I think like 20 billion,

1534
01:09:24.900 --> 01:09:27.460
his first lick, like high level dude.

1535
01:09:28.660 --> 01:09:33.660
What he did was he flew out, I think he did 200 interviews

1536
01:09:33.900 --> 01:09:35.900
in seven days.

1537
01:09:35.900 --> 01:09:38.020
And so he said, everybody come here,

1538
01:09:38.020 --> 01:09:39.220
fly out to my warehouse,

1539
01:09:39.220 --> 01:09:41.100
he had his team of five killers with him

1540
01:09:41.100 --> 01:09:43.380
that he knew from, that he took from his last thing,

1541
01:09:43.380 --> 01:09:46.420
and he did 200 interviews in seven days.

1542
01:09:46.420 --> 01:09:48.860
And then he got his team to start the next thing.

1543
01:09:48.860 --> 01:09:50.580
That's the difference in terms of level of execution

1544
01:09:50.580 --> 01:09:52.420
that higher, higher level entrepreneurs do,

1545
01:09:52.420 --> 01:09:56.260
that it would take a junior entrepreneur three years

1546
01:09:56.260 --> 01:09:57.100
to do that,

1547
01:09:57.100 --> 01:09:59.020
choose to believe they can only take two interviews a week.

1548
01:09:59.020 --> 01:10:00.620
If it is the constraint of the business,

1549
01:10:00.620 --> 01:10:01.460
it is your job.

1550
01:10:03.940 --> 01:10:06.580
And so you have to be able to break down

1551
01:10:06.580 --> 01:10:08.780
what the inputs of the business are,

1552
01:10:08.780 --> 01:10:10.900
at the most actual level that yield output.

1553
01:10:10.900 --> 01:10:12.460
So figure out the problem,

1554
01:10:12.460 --> 01:10:14.820
and then figure out the action that you actually do,

1555
01:10:14.820 --> 01:10:16.660
not the output,

1556
01:10:16.660 --> 01:10:17.620
the action that you have to do,

1557
01:10:17.620 --> 01:10:19.540
the inputs at the most basic level,

1558
01:10:19.540 --> 01:10:21.460
so that you can crank that out of it.

1559
01:10:21.460 --> 01:10:22.740
Business truth number nine,

1560
01:10:22.740 --> 01:10:24.420
stop looking for hacks.

1561
01:10:24.420 --> 01:10:26.460
And I mean, hacks differently than shortcuts.

1562
01:10:26.460 --> 01:10:28.580
I mean, you know, when you see something,

1563
01:10:28.580 --> 01:10:30.620
I'm like, oh, they're like,

1564
01:10:30.620 --> 01:10:31.900
start doing these hashtags,

1565
01:10:31.900 --> 01:10:33.100
because that's what's working really well.

1566
01:10:33.100 --> 01:10:38.100
Or start doing this new messenger thing

1567
01:10:38.540 --> 01:10:40.860
that's only gonna work for 60 days.

1568
01:10:40.860 --> 01:10:41.740
The thing is, is that like,

1569
01:10:41.740 --> 01:10:43.860
if you have to jump from these little mini trends

1570
01:10:43.860 --> 01:10:45.340
to mini trends to mini trends,

1571
01:10:45.340 --> 01:10:47.500
the moment that little mini arbitrage thing is done,

1572
01:10:47.500 --> 01:10:48.700
you're done.

1573
01:10:48.700 --> 01:10:51.580
You want to focus on what the overall objective of,

1574
01:10:51.580 --> 01:10:54.380
of the platforms that you advertise on are.

1575
01:10:54.380 --> 01:10:58.580
And so, if I know that, for example,

1576
01:10:58.580 --> 01:11:00.460
YouTube wants people to click,

1577
01:11:00.460 --> 01:11:01.780
and they want them to watch,

1578
01:11:01.780 --> 01:11:03.700
and ideally watch something else,

1579
01:11:03.700 --> 01:11:06.420
then if I just always optimize all my efforts

1580
01:11:06.420 --> 01:11:08.900
to getting those big things right,

1581
01:11:08.900 --> 01:11:10.540
whether something's trending,

1582
01:11:10.540 --> 01:11:14.020
or like, oh, yellow, yellow backgrounds

1583
01:11:14.020 --> 01:11:15.860
are doing really well in the short term,

1584
01:11:15.860 --> 01:11:16.860
or like, you want to make sure

1585
01:11:16.860 --> 01:11:18.380
that you respond to every single comment,

1586
01:11:18.380 --> 01:11:19.380
well, within six minutes,

1587
01:11:19.380 --> 01:11:21.340
otherwise, like, it changes the,

1588
01:11:21.340 --> 01:11:23.740
anytime someone tells me algorithm stuff,

1589
01:11:23.740 --> 01:11:25.580
I basically ignore it,

1590
01:11:25.580 --> 01:11:27.820
because unless the goal of a platform

1591
01:11:27.820 --> 01:11:29.580
has fundamentally changed,

1592
01:11:29.580 --> 01:11:31.580
all of this other stuff is just,

1593
01:11:31.580 --> 01:11:33.060
it's just distraction,

1594
01:11:33.060 --> 01:11:35.740
because again, what's the one thing that matters most?

1595
01:11:35.740 --> 01:11:37.620
If I make something that's so good,

1596
01:11:37.620 --> 01:11:38.980
that everyone is going to share,

1597
01:11:38.980 --> 01:11:39.820
and the moment they watch,

1598
01:11:39.820 --> 01:11:42.100
they can't wait to tell other people about it,

1599
01:11:42.100 --> 01:11:43.100
the platform is gonna,

1600
01:11:43.100 --> 01:11:44.780
is gonna want to distribute that.

1601
01:11:44.780 --> 01:11:46.260
I don't care what the algorithm is,

1602
01:11:46.260 --> 01:11:48.500
it's gonna want to distribute that.

1603
01:11:48.500 --> 01:11:49.500
And even if it doesn't,

1604
01:11:49.500 --> 01:11:50.580
so this is a real talk,

1605
01:11:50.580 --> 01:11:51.620
even if it doesn't,

1606
01:11:51.620 --> 01:11:53.500
the 100 people who saw it,

1607
01:11:53.500 --> 01:11:56.220
will get what I want out of it.

1608
01:11:56.220 --> 01:11:57.940
And so, the thing is that,

1609
01:11:57.940 --> 01:12:00.060
it's so much better to spend 100 hours

1610
01:12:00.060 --> 01:12:01.620
making one exceptional thing,

1611
01:12:01.620 --> 01:12:03.220
than doing 100 things mediocrely.

1612
01:12:03.220 --> 01:12:05.220
And now, some of that's like, wait a second,

1613
01:12:05.220 --> 01:12:06.740
how does that contradict with?

1614
01:12:06.740 --> 01:12:08.420
You gotta do lots of quantity.

1615
01:12:08.420 --> 01:12:09.540
quantity matters,

1616
01:12:09.540 --> 01:12:11.380
because it teaches you how much work it takes

1617
01:12:11.380 --> 01:12:13.260
to create quality.

1618
01:12:13.260 --> 01:12:14.660
And so, once you learn,

1619
01:12:14.660 --> 01:12:15.500
and this is like,

1620
01:12:15.500 --> 01:12:16.340
if you look at,

1621
01:12:16.340 --> 01:12:17.180
I like YouTubers,

1622
01:12:17.180 --> 01:12:19.260
because they have really well-documented,

1623
01:12:19.260 --> 01:12:20.100
like, work cycles,

1624
01:12:20.100 --> 01:12:21.420
and you can see all their product

1625
01:12:21.420 --> 01:12:23.300
and marketing in the same place,

1626
01:12:23.300 --> 01:12:24.140
is that,

1627
01:12:25.420 --> 01:12:26.260
in the beginning,

1628
01:12:26.260 --> 01:12:28.060
many of them make more videos.

1629
01:12:28.060 --> 01:12:28.900
And then over time,

1630
01:12:28.900 --> 01:12:31.580
they realize that if they make a better video,

1631
01:12:31.580 --> 01:12:32.860
it has outsized returns,

1632
01:12:32.860 --> 01:12:34.380
meaning if you make a video

1633
01:12:34.380 --> 01:12:36.300
that's 20% better than your average video,

1634
01:12:36.300 --> 01:12:38.500
you might get five times the views.

1635
01:12:38.500 --> 01:12:40.340
And it might take only twice as much work

1636
01:12:40.340 --> 01:12:42.100
to make your video 20% better.

1637
01:12:42.100 --> 01:12:43.100
And so then all of a sudden,

1638
01:12:43.100 --> 01:12:43.940
you're like,

1639
01:12:43.940 --> 01:12:44.780
oh, well,

1640
01:12:44.780 --> 01:12:45.700
instead of making two videos,

1641
01:12:45.700 --> 01:12:47.060
I'll make one that's 20% better,

1642
01:12:47.060 --> 01:12:48.540
and then I'll get five times the views.

1643
01:12:48.540 --> 01:12:50.020
And then that becomes the new standard.

1644
01:12:50.020 --> 01:12:50.860
Then all of a sudden,

1645
01:12:50.860 --> 01:12:51.700
it's like,

1646
01:12:51.700 --> 01:12:52.540
okay,

1647
01:12:53.100 --> 01:12:54.420
but if I spend,

1648
01:12:54.420 --> 01:12:55.860
you know, twice the time,

1649
01:12:55.860 --> 01:12:57.140
as I did on that video,

1650
01:12:57.140 --> 01:12:58.540
I get this video

1651
01:12:58.540 --> 01:12:59.820
that was already 20% better,

1652
01:12:59.820 --> 01:13:00.940
another 20% better.

1653
01:13:00.940 --> 01:13:02.460
And then that gets five times the views

1654
01:13:02.460 --> 01:13:03.900
of the five times the views.

1655
01:13:03.900 --> 01:13:05.340
And so what happens is,

1656
01:13:05.340 --> 01:13:06.100
over time,

1657
01:13:06.100 --> 01:13:07.660
you learn how much work it takes

1658
01:13:07.660 --> 01:13:09.700
to make something great.

1659
01:13:09.700 --> 01:13:11.700
And that is why quality starts to,

1660
01:13:11.700 --> 01:13:13.020
over time,

1661
01:13:13.020 --> 01:13:13.980
all these platforms

1662
01:13:13.980 --> 01:13:16.540
will always optimize towards quality.

1663
01:13:16.540 --> 01:13:19.420
Because there is no lack of information,

1664
01:13:19.420 --> 01:13:20.780
like people have Google,

1665
01:13:20.780 --> 01:13:22.300
they can find out whatever they want,

1666
01:13:22.300 --> 01:13:24.460
what they want is value per second,

1667
01:13:24.460 --> 01:13:26.700
not seconds of value.

1668
01:13:26.700 --> 01:13:28.140
And so our job,

1669
01:13:28.140 --> 01:13:29.140
if we want to make anything,

1670
01:13:29.140 --> 01:13:29.860
whether it's a product,

1671
01:13:29.860 --> 01:13:30.380
whether it's marketing,

1672
01:13:30.380 --> 01:13:31.500
whether it's ad,

1673
01:13:31.500 --> 01:13:32.980
whether it's a service

1674
01:13:32.980 --> 01:13:34.740
that we give that we sell,

1675
01:13:34.740 --> 01:13:35.740
is that it's,

1676
01:13:35.740 --> 01:13:36.740
I get so tired

1677
01:13:36.740 --> 01:13:37.780
of hearing the entrepreneur story.

1678
01:13:37.780 --> 01:13:38.780
And I used to be one of these guys,

1679
01:13:38.780 --> 01:13:39.700
which is why I get so frustrated,

1680
01:13:39.700 --> 01:13:41.460
this is me yelling at my younger self,

1681
01:13:41.460 --> 01:13:42.460
is I'm like,

1682
01:13:42.460 --> 01:13:43.860
I provide so much value,

1683
01:13:43.860 --> 01:13:45.900
like there's so much stuff that I give them.

1684
01:13:45.900 --> 01:13:48.660
But the internet gives them literally everything

1685
01:13:48.660 --> 01:13:49.500
for nothing.

1686
01:13:50.500 --> 01:13:52.540
And so it's not that people want more,

1687
01:13:52.540 --> 01:13:53.540
they want better,

1688
01:13:53.540 --> 01:13:55.780
they want us to do the work ahead of time,

1689
01:13:55.780 --> 01:13:57.100
people want to bargain,

1690
01:13:57.100 --> 01:13:58.540
they want how can I compress

1691
01:13:58.540 --> 01:14:01.580
13 years of business lessons into two hours?

1692
01:14:01.580 --> 01:14:02.860
How do I, how do I do that?

1693
01:14:02.860 --> 01:14:04.180
How do I, how do I get the lessons

1694
01:14:04.180 --> 01:14:07.020
from 35,000 posts in 60 minutes?

1695
01:14:07.020 --> 01:14:08.260
They want that,

1696
01:14:08.260 --> 01:14:09.100
they don't want you to say,

1697
01:14:09.100 --> 01:14:10.260
hey, you know what,

1698
01:14:10.260 --> 01:14:12.620
dude, I put all 35,000 on my post

1699
01:14:12.620 --> 01:14:14.180
inside of this membership blog in,

1700
01:14:14.180 --> 01:14:15.900
it's so much value,

1701
01:14:15.900 --> 01:14:18.060
they're not going to get value from it.

1702
01:14:18.060 --> 01:14:19.940
Because what would be so much more valuable

1703
01:14:19.940 --> 01:14:22.780
is distilling all of that down to the most concrete form

1704
01:14:22.780 --> 01:14:24.500
where every time they consume it,

1705
01:14:24.500 --> 01:14:27.420
the value they get per second is so high they can't stop.

1706
01:14:27.420 --> 01:14:28.260
That's where,

1707
01:14:28.260 --> 01:14:31.300
and when you're thinking about this stuff,

1708
01:14:31.300 --> 01:14:33.820
like quality is in the details

1709
01:14:33.820 --> 01:14:36.300
that you only realize with lots of exposure.

1710
01:14:36.300 --> 01:14:37.780
And I think about this like coats of paint,

1711
01:14:37.780 --> 01:14:39.140
when I write a book,

1712
01:14:39.140 --> 01:14:41.180
it's not like I sit down and I write it.

1713
01:14:41.180 --> 01:14:42.700
I write the first draft,

1714
01:14:42.700 --> 01:14:44.500
and then I put another coat of paint on it,

1715
01:14:44.500 --> 01:14:45.940
and then I put a third coat of paint on it,

1716
01:14:45.940 --> 01:14:47.260
and the fourth coat of paint on it,

1717
01:14:47.300 --> 01:14:48.980
and I'll say this was a gift I got

1718
01:14:48.980 --> 01:14:51.420
from the consulting and baking world,

1719
01:14:51.420 --> 01:14:53.380
which is, let me tell you how they edit.

1720
01:14:53.380 --> 01:14:54.540
Let me tell you how it works.

1721
01:14:55.500 --> 01:14:58.340
First, you make a deck or a brief

1722
01:14:58.340 --> 01:14:59.700
or whatever deliverable you're going to have

1723
01:14:59.700 --> 01:15:00.980
to a customer or client.

1724
01:15:02.020 --> 01:15:02.860
That's round one.

1725
01:15:04.660 --> 01:15:07.580
The second round, you look for just punctuation errors.

1726
01:15:08.620 --> 01:15:11.660
The third round, you look for data errors.

1727
01:15:11.660 --> 01:15:14.860
The fourth round, you look for misspellings and typos.

1728
01:15:14.860 --> 01:15:15.700
The fifth round,

1729
01:15:15.700 --> 01:15:17.100
now all of a sudden every time you're reading it,

1730
01:15:17.100 --> 01:15:18.660
you're also going to catch other stuff too,

1731
01:15:18.660 --> 01:15:22.060
but you're specifically looking for one type of thing.

1732
01:15:22.060 --> 01:15:23.700
And I'm not a video editor,

1733
01:15:23.700 --> 01:15:26.940
but I would fucking bet that this is exactly how you edit video.

1734
01:15:26.940 --> 01:15:29.340
You think, okay, let's look for lighting this time.

1735
01:15:29.340 --> 01:15:31.260
Okay, let's look at transitions this time.

1736
01:15:31.260 --> 01:15:33.260
Let's look at sound and music this time.

1737
01:15:33.260 --> 01:15:36.060
Let's look at the actual content itself this time

1738
01:15:36.060 --> 01:15:39.020
and make sure that there's no gaps or space.

1739
01:15:39.020 --> 01:15:43.180
And so it's coats of paint and that exposure over time

1740
01:15:43.180 --> 01:15:46.780
and looking at it when you start early in the morning.

1741
01:15:46.780 --> 01:15:48.660
And the second time you look at it, it's after lunch.

1742
01:15:48.660 --> 01:15:50.220
The third time you look at it in your bad mood.

1743
01:15:50.220 --> 01:15:51.300
And the fourth time you look at it,

1744
01:15:51.300 --> 01:15:52.900
you just talk to your wife about this other thing

1745
01:15:52.900 --> 01:15:53.940
and that's top of mind.

1746
01:15:53.940 --> 01:15:56.300
And so you look at it through these different frames

1747
01:15:56.300 --> 01:15:59.180
and you get a weight, it's like sanding down the rough edges

1748
01:15:59.180 --> 01:16:00.180
and you just keep getting at it

1749
01:16:00.180 --> 01:16:03.460
and you put different level grade sandpaper

1750
01:16:03.460 --> 01:16:05.900
so it gets finer and smoother and smoother.

1751
01:16:05.900 --> 01:16:08.540
But that only happens with exposure over time

1752
01:16:08.540 --> 01:16:09.700
and lots of licks.

1753
01:16:10.780 --> 01:16:13.380
And so you make the money, you make the money in the edit,

1754
01:16:13.380 --> 01:16:16.820
you make the money in the distillation, not in the creation.

1755
01:16:16.820 --> 01:16:18.740
And so stop focusing on the hacks

1756
01:16:19.860 --> 01:16:24.860
and put all your effort into the repeated bouts and bursts

1757
01:16:26.020 --> 01:16:28.540
and going over with the sandpaper

1758
01:16:28.540 --> 01:16:29.860
and the second coat and the third coat

1759
01:16:29.860 --> 01:16:31.140
and the fourth coat of paint,

1760
01:16:31.140 --> 01:16:33.740
that is how you can escape mediocrity.

1761
01:16:33.740 --> 01:16:36.460
And that's what everyone is mediocrs unwilling to do.

1762
01:16:37.460 --> 01:16:39.740
They think that the moment they put the last period

1763
01:16:39.740 --> 01:16:42.260
on their document that they finished writing a book.

1764
01:16:42.260 --> 01:16:44.580
When really they just put 80,000 words into a document

1765
01:16:44.580 --> 01:16:45.980
that no one's ever gonna read.

1766
01:16:45.980 --> 01:16:49.500
And you can teach quality to people

1767
01:16:49.500 --> 01:16:54.500
by teaching the process that gets quality.

1768
01:16:54.500 --> 01:16:59.340
So if you say the first thing we do is we have a wireframe

1769
01:16:59.340 --> 01:17:03.140
and every wireframe has to have a hook, a story,

1770
01:17:03.140 --> 01:17:05.700
a list or steps for an outcome

1771
01:17:05.700 --> 01:17:08.220
and then a conclusion that meets these standards,

1772
01:17:08.220 --> 01:17:09.180
that's the wireframe.

1773
01:17:09.180 --> 01:17:11.260
Have we done that? Check box one.

1774
01:17:11.260 --> 01:17:14.100
Check box two, we record the whole thing we fill in the gaps.

1775
01:17:14.100 --> 01:17:16.420
Great, check box three, we look for transitions,

1776
01:17:16.420 --> 01:17:17.860
check box four, we look for,

1777
01:17:17.860 --> 01:17:21.380
and so then they can follow your step for creating quality

1778
01:17:21.380 --> 01:17:23.860
and most people just never document what they do,

1779
01:17:23.860 --> 01:17:25.860
which is why every time they have to reinvent the wheel

1780
01:17:25.860 --> 01:17:26.780
and they have to reinvent the wheel

1781
01:17:26.780 --> 01:17:28.580
for every new person who comes into their company,

1782
01:17:28.580 --> 01:17:31.060
which is why it's so taxing when you're small

1783
01:17:31.060 --> 01:17:32.660
to bring people on because you feel

1784
01:17:32.660 --> 01:17:34.580
that you have no training, you have no system.

1785
01:17:34.580 --> 01:17:37.020
But if you can document these things for yourself

1786
01:17:37.020 --> 01:17:38.900
which a, by the way, will make you better,

1787
01:17:38.900 --> 01:17:40.820
b, it also make it easier for you to bring new people in

1788
01:17:40.820 --> 01:17:41.860
so you can ultimately replace yourself

1789
01:17:41.860 --> 01:17:44.260
and keep the quality where you want it to be.

1790
01:17:44.260 --> 01:17:46.580
Business is true, 10, the best people cost more

1791
01:17:46.580 --> 01:17:48.900
but make you way more than they cost.

1792
01:17:48.900 --> 01:17:50.940
It's still one of the biggest arbitrage opportunities

1793
01:17:50.940 --> 01:17:52.580
that exist in business and I think we'll continue

1794
01:17:52.580 --> 01:17:54.820
to exist in business as long as humans work, right?

1795
01:17:54.820 --> 01:17:56.340
And the thing is, is that small business owners

1796
01:17:56.340 --> 01:17:57.940
never get this.

1797
01:17:57.940 --> 01:17:59.700
So it's really just the big businesses

1798
01:17:59.700 --> 01:18:00.820
that are competing for talent.

1799
01:18:00.820 --> 01:18:02.620
That's where the talent where happens is at the top.

1800
01:18:02.620 --> 01:18:04.540
And do you think there's a coincidence

1801
01:18:04.540 --> 01:18:06.100
that the biggest businesses are the ones

1802
01:18:06.100 --> 01:18:07.420
that are competing for talent?

1803
01:18:07.420 --> 01:18:08.620
Why do you think that is?

1804
01:18:08.620 --> 01:18:10.140
It's because they understand that talent

1805
01:18:10.140 --> 01:18:11.980
is what makes them a big business.

1806
01:18:11.980 --> 01:18:13.980
And so the thing is, and this is where small businesses

1807
01:18:13.980 --> 01:18:15.820
get and trouble get and I did this too,

1808
01:18:15.820 --> 01:18:18.020
is that you have to be worthy of the level of talent

1809
01:18:18.020 --> 01:18:20.540
that you need and have a mission that's aligned

1810
01:18:20.540 --> 01:18:22.020
with what they find meaningful.

1811
01:18:22.020 --> 01:18:26.020
So I have an acquaintance that's in the porn business.

1812
01:18:26.020 --> 01:18:28.860
I have no moral qualms that he does legal,

1813
01:18:28.860 --> 01:18:31.420
everything he does is legal, do what you want.

1814
01:18:31.420 --> 01:18:33.420
One of the issues that he has is it's very hard

1815
01:18:33.420 --> 01:18:34.660
for him to find high level talent

1816
01:18:34.660 --> 01:18:35.980
because a lot of people don't want to work

1817
01:18:35.980 --> 01:18:37.340
in the porn industry.

1818
01:18:37.340 --> 01:18:39.980
And so I say that as a hypothetical

1819
01:18:40.140 --> 01:18:41.380
extreme, but some of you guys are working

1820
01:18:41.380 --> 01:18:42.660
one degree less than that.

1821
01:18:42.660 --> 01:18:44.180
You're like, I sell a day trading thing.

1822
01:18:44.180 --> 01:18:46.900
It's like, oh, so you are somehow you beat the market.

1823
01:18:46.900 --> 01:18:49.380
Well, obviously if you sell day trading,

1824
01:18:49.380 --> 01:18:50.940
then you should just be day trading

1825
01:18:50.940 --> 01:18:52.500
and not selling courses on how to day trade.

1826
01:18:52.500 --> 01:18:53.420
If you were so good at it

1827
01:18:53.420 --> 01:18:54.500
and you definitely wouldn't tell people

1828
01:18:54.500 --> 01:18:56.900
what the trades were, duh, right?

1829
01:18:56.900 --> 01:18:58.980
And so the thing here is, the level of talent

1830
01:18:58.980 --> 01:19:00.620
that you can attract for that level of opportunity

1831
01:19:00.620 --> 01:19:01.780
is going to be very different from like,

1832
01:19:01.780 --> 01:19:05.060
I want to create something that takes all trash

1833
01:19:05.060 --> 01:19:06.980
and turns it into energy.

1834
01:19:06.980 --> 01:19:09.140
You're going to get people who are very mission driven.

1835
01:19:09.140 --> 01:19:11.460
There's a reason that every single one

1836
01:19:11.460 --> 01:19:14.820
of Elon Musk's businesses is here to save the world.

1837
01:19:14.820 --> 01:19:16.140
That's not a mistake.

1838
01:19:16.140 --> 01:19:17.540
Now there's two elements of that.

1839
01:19:17.540 --> 01:19:19.460
One is that they could save the world.

1840
01:19:19.460 --> 01:19:22.220
The second is that that's what he makes it about.

1841
01:19:22.220 --> 01:19:25.220
So Twitter before this wasn't about having free speech

1842
01:19:25.220 --> 01:19:26.260
and civilization.

1843
01:19:26.260 --> 01:19:28.340
It was just a social media platform.

1844
01:19:28.340 --> 01:19:33.340
But now it's the last beacon or bastion of free speech.

1845
01:19:33.460 --> 01:19:35.380
That's what Elon has positioned it as.

1846
01:19:35.380 --> 01:19:38.540
Now, ULA, which is United Launch Alliance,

1847
01:19:38.540 --> 01:19:39.900
which is a government contracted

1848
01:19:39.900 --> 01:19:41.540
that does a lot of space things.

1849
01:19:41.540 --> 01:19:43.060
You might not have heard of them.

1850
01:19:43.060 --> 01:19:47.020
But SpaceX is how mankind is going to survive

1851
01:19:47.020 --> 01:19:48.580
if anything happens to Earth.

1852
01:19:48.580 --> 01:19:50.780
And so we're going to become an interplanetary species.

1853
01:19:50.780 --> 01:19:53.260
So the likelihood that we can survive any kind of event

1854
01:19:53.260 --> 01:19:54.900
if we're a multi-planetary species

1855
01:19:54.900 --> 01:19:58.060
goes up for survival as a race.

1856
01:19:58.060 --> 01:20:02.140
And so he made SpaceX not about doing rockets

1857
01:20:02.140 --> 01:20:04.500
and government contracting, which, although that is

1858
01:20:04.500 --> 01:20:06.260
how they make their money, he made it

1859
01:20:06.260 --> 01:20:08.140
about saving humanity.

1860
01:20:08.140 --> 01:20:10.780
Tesla is about its electronic cars.

1861
01:20:10.780 --> 01:20:12.100
There is a zillion other car companies

1862
01:20:12.100 --> 01:20:13.140
that have electronic cars.

1863
01:20:13.140 --> 01:20:15.580
But why is it only Tesla is about having this

1864
01:20:15.580 --> 01:20:17.220
because it's the future of having Earth

1865
01:20:17.220 --> 01:20:19.580
be environmentally friendly?

1866
01:20:19.580 --> 01:20:21.900
Every one of his company, she makes about saving the world.

1867
01:20:21.900 --> 01:20:24.580
And by doing that, you get people who will work

1868
01:20:24.580 --> 01:20:27.500
night and day to save the world.

1869
01:20:27.500 --> 01:20:29.620
And so I'll give you four little personal examples

1870
01:20:29.620 --> 01:20:31.060
that I've had, or start three personal examples

1871
01:20:31.060 --> 01:20:32.980
that I've had around this.

1872
01:20:32.980 --> 01:20:35.540
I remember when I had my first $50,000 year employee.

1873
01:20:35.540 --> 01:20:36.580
Because before this, I'd only worked

1874
01:20:36.580 --> 01:20:39.260
with hourly wage employees at my gyms.

1875
01:20:39.260 --> 01:20:41.980
And that one person gave me the time

1876
01:20:41.980 --> 01:20:43.660
because they could manage my first location

1877
01:20:43.660 --> 01:20:45.220
to open up my second location,

1878
01:20:45.220 --> 01:20:47.180
which made 250,000 year profit.

1879
01:20:47.180 --> 01:20:50.220
And so, wait, so I paid $50,000 a year

1880
01:20:50.220 --> 01:20:52.180
for somebody out of one location

1881
01:20:52.180 --> 01:20:54.140
to allow me to open up my second location,

1882
01:20:54.140 --> 01:20:55.380
made 250,000.

1883
01:20:55.380 --> 01:20:56.980
I got five to one on that.

1884
01:20:56.980 --> 01:20:58.180
Great investment.

1885
01:20:58.180 --> 01:21:00.100
Now, somebody might say, oh, why would you give up

1886
01:21:00.100 --> 01:21:01.380
50,000 dollars when you could do that?

1887
01:21:01.380 --> 01:21:03.460
Well, because I want to make 250 on the next thing.

1888
01:21:03.460 --> 01:21:06.260
The second story I had, this is a little bigger,

1889
01:21:06.260 --> 01:21:08.380
my first 300,000 are your employee.

1890
01:21:08.380 --> 01:21:09.420
Guess what they did?

1891
01:21:09.420 --> 01:21:12.100
This was my first really, really exceptional sales person.

1892
01:21:12.100 --> 01:21:15.100
He brought in $5 million in sales a year.

1893
01:21:15.100 --> 01:21:16.780
I paid him 300 grand.

1894
01:21:16.780 --> 01:21:17.740
Was that worth it?

1895
01:21:17.740 --> 01:21:18.580
Absolutely.

1896
01:21:18.580 --> 01:21:20.660
Was it more than I'd ever paid a sales person for it?

1897
01:21:20.660 --> 01:21:21.500
Absolutely.

1898
01:21:22.580 --> 01:21:24.140
So, it was worth it.

1899
01:21:24.140 --> 01:21:25.500
And it was even more worth it.

1900
01:21:25.500 --> 01:21:28.020
My first million dollar employee immediately

1901
01:21:28.020 --> 01:21:31.140
in their first 90 days saved me $3 million a year.

1902
01:21:31.140 --> 01:21:32.620
Immediately.

1903
01:21:32.620 --> 01:21:34.140
And she was like, all right, I just want to make sure

1904
01:21:34.140 --> 01:21:35.140
I paid for myself.

1905
01:21:35.140 --> 01:21:36.380
Now, let's do this other stuff.

1906
01:21:36.380 --> 01:21:39.140
And then, with her contacts and her rolodex,

1907
01:21:39.140 --> 01:21:40.820
allowed us to package our companies

1908
01:21:40.820 --> 01:21:44.820
and then sell them through her network of bankers

1909
01:21:44.820 --> 01:21:46.300
and private equity firms.

1910
01:21:46.300 --> 01:21:47.700
And so, I didn't come from that world.

1911
01:21:47.700 --> 01:21:51.140
And so, I hired an executive that had 35 years of experience

1912
01:21:51.140 --> 01:21:54.020
who had sold who had been sell side over 40 times

1913
01:21:54.020 --> 01:21:55.820
because I was like, I've never done this before.

1914
01:21:55.820 --> 01:21:57.380
And so, I've found somebody who already had.

1915
01:21:57.380 --> 01:21:59.860
Now, I had to pay him a million dollars a year.

1916
01:21:59.860 --> 01:22:01.420
But, was it worth it?

1917
01:22:01.420 --> 01:22:02.740
More than anything.

1918
01:22:02.740 --> 01:22:04.540
And so, the thing is, is that, what's crazy

1919
01:22:04.540 --> 01:22:06.100
is that the stores I just told you,

1920
01:22:06.100 --> 01:22:08.820
the arbitrage on value actually increased

1921
01:22:08.820 --> 01:22:10.260
as I spent more.

1922
01:22:10.260 --> 01:22:11.980
Think about a craze that is.

1923
01:22:11.980 --> 01:22:13.980
A $50,000 got me a 5X.

1924
01:22:13.980 --> 01:22:16.260
A $300 got me a $14X.

1925
01:22:16.260 --> 01:22:18.260
A million got me a $50X.

1926
01:22:19.580 --> 01:22:22.700
This is why I believe that talent is still

1927
01:22:22.700 --> 01:22:25.460
the most underrated, biggest money making

1928
01:22:25.460 --> 01:22:26.980
arbitrage opting that exists.

1929
01:22:26.980 --> 01:22:28.620
And the biggest constraint to you getting there

1930
01:22:28.620 --> 01:22:31.620
is that your company's bullshit and your bullshit.

1931
01:22:31.620 --> 01:22:33.820
Brutal business through number 11,

1932
01:22:33.820 --> 01:22:36.180
the big, obvious thing is the problem,

1933
01:22:36.180 --> 01:22:38.500
not the hundred other things.

1934
01:22:38.500 --> 01:22:39.580
I want to be clear about this.

1935
01:22:39.580 --> 01:22:41.900
The details absolutely matter.

1936
01:22:41.900 --> 01:22:44.820
But when I talk to business owners today,

1937
01:22:44.820 --> 01:22:46.820
the vast majority of the time,

1938
01:22:46.820 --> 01:22:49.060
I can just keep hitting them on this one question

1939
01:22:49.060 --> 01:22:51.060
because they want to avoid answering it.

1940
01:22:51.060 --> 01:22:53.260
And I'm like, have you tried your food?

1941
01:22:54.580 --> 01:22:57.140
Have you gone through the workouts yourself?

1942
01:22:57.140 --> 01:22:59.580
Have you been a customer of your own product?

1943
01:23:00.580 --> 01:23:05.580
And more times than not, the answer is no, not recently.

1944
01:23:05.580 --> 01:23:08.460
And they're like, no, but I don't think that's the problem.

1945
01:23:08.460 --> 01:23:12.300
Because a lot of times, the hard thing

1946
01:23:12.300 --> 01:23:14.460
is the thing that hurts your ego the most.

1947
01:23:14.460 --> 01:23:16.060
And so this is a quote from Williamson.

1948
01:23:16.060 --> 01:23:17.220
Chris Williamson, he said,

1949
01:23:17.220 --> 01:23:20.060
the magic you're looking for is the work you're avoiding.

1950
01:23:20.060 --> 01:23:22.140
And I think that's absolutely true

1951
01:23:22.140 --> 01:23:23.940
also from a business perspective.

1952
01:23:23.940 --> 01:23:26.060
Is that what thing, if it were true,

1953
01:23:26.060 --> 01:23:28.180
would hurt your feelings the most?

1954
01:23:28.460 --> 01:23:31.420
Oftentimes that thing is the truth

1955
01:23:31.420 --> 01:23:33.380
and it's the one that we're not willing to face.

1956
01:23:33.380 --> 01:23:35.300
Like, let's be real.

1957
01:23:35.300 --> 01:23:37.660
Your service might not be that good.

1958
01:23:37.660 --> 01:23:38.500
Let's be real.

1959
01:23:38.500 --> 01:23:40.500
The reason your restaurant isn't growing

1960
01:23:40.500 --> 01:23:42.780
isn't because your SEO isn't updated.

1961
01:23:42.780 --> 01:23:46.980
It's not because your website isn't optimized.

1962
01:23:46.980 --> 01:23:49.020
It's because your food sucks.

1963
01:23:49.020 --> 01:23:51.700
And the real real is that it might not even suck.

1964
01:23:51.700 --> 01:23:53.380
It might just be mediocre.

1965
01:23:53.380 --> 01:23:56.180
But the difference between mediocre and exceptional

1966
01:23:56.180 --> 01:23:57.780
is those hundred details,

1967
01:23:57.780 --> 01:24:00.060
but most people are working on all these other things

1968
01:24:00.060 --> 01:24:02.620
beyond the main thing that matters most.

1969
01:24:02.620 --> 01:24:06.220
And so I remember Peloton, the story of the founders

1970
01:24:06.220 --> 01:24:08.660
they were talking about how they were trying to build Peloton.

1971
01:24:08.660 --> 01:24:10.740
They said, what we did is we fundamentally believe

1972
01:24:10.740 --> 01:24:13.940
that if we could be the best part of everyone's day,

1973
01:24:13.940 --> 01:24:16.660
that if everybody who came to one of our workouts

1974
01:24:16.660 --> 01:24:18.340
left saying that was unbelievable

1975
01:24:18.340 --> 01:24:19.580
and they had to tell people about it,

1976
01:24:19.580 --> 01:24:21.820
they're like, how good would we have to make it?

1977
01:24:21.820 --> 01:24:23.500
That the next person they talked to,

1978
01:24:23.500 --> 01:24:25.460
it was the first thing they brought up.

1979
01:24:25.460 --> 01:24:29.060
And I love that as a litmus test for how good

1980
01:24:29.060 --> 01:24:30.620
is the thing that I sell.

1981
01:24:30.620 --> 01:24:33.820
And so many people just do anything they can

1982
01:24:33.820 --> 01:24:35.100
to have quotes something to sell,

1983
01:24:35.100 --> 01:24:36.780
like some shit to sell.

1984
01:24:36.780 --> 01:24:41.500
But that's the reason you get stuck

1985
01:24:41.500 --> 01:24:43.420
because the thing is that on some level,

1986
01:24:43.420 --> 01:24:46.300
whether you admit it or not, you know it could be better.

1987
01:24:46.300 --> 01:24:48.900
And that then influences how hard you push.

1988
01:24:48.900 --> 01:24:51.140
Because if you really believed you had the best pizza

1989
01:24:51.140 --> 01:24:52.620
in the world, and I hear this all the time,

1990
01:24:52.620 --> 01:24:54.260
people were like, oh, we're the absolute best.

1991
01:24:54.260 --> 01:24:55.580
I'm like, no, you're not.

1992
01:24:55.580 --> 01:24:56.420
Dude, no, you're not.

1993
01:24:56.420 --> 01:24:58.540
Stop saying that because when you say that,

1994
01:24:58.540 --> 01:24:59.980
you're lying.

1995
01:24:59.980 --> 01:25:01.780
On some level, and you're lying to other people

1996
01:25:01.780 --> 01:25:03.140
and you're lying to yourself.

1997
01:25:03.140 --> 01:25:05.860
And so I think most business owners lie to themselves

1998
01:25:05.860 --> 01:25:09.380
about how good they are at the things that they do

1999
01:25:09.380 --> 01:25:12.500
because confronting the fact that they're just insufficient,

2000
01:25:12.500 --> 01:25:14.060
they're not good enough, they're inexperienced,

2001
01:25:14.060 --> 01:25:17.060
they haven't done enough work in to be good,

2002
01:25:17.060 --> 01:25:17.900
frightens them.

2003
01:25:17.900 --> 01:25:19.700
And so then they wanna just scatter their focus

2004
01:25:19.700 --> 01:25:22.740
to 100 things that they read online.

2005
01:25:22.740 --> 01:25:26.180
But unless the workouts are amazing,

2006
01:25:26.180 --> 01:25:28.620
unless the food is exceptional, long term,

2007
01:25:28.620 --> 01:25:30.460
all you do is you just let lots of people know

2008
01:25:30.460 --> 01:25:32.380
that your food's mediocre.

2009
01:25:32.380 --> 01:25:34.740
And that's where thinking about business

2010
01:25:34.740 --> 01:25:37.420
in terms of years and decades starts really paying off

2011
01:25:37.420 --> 01:25:39.980
because if you believe that you're gonna go big

2012
01:25:39.980 --> 01:25:42.980
and you wanna go big, then you honestly want

2013
01:25:42.980 --> 01:25:45.580
as few people as possible to find out about the product

2014
01:25:45.580 --> 01:25:46.740
when it's mediocre,

2015
01:25:46.740 --> 01:25:48.740
rather than as many people as possible.

2016
01:25:48.740 --> 01:25:49.820
And so it's counterintuitive

2017
01:25:49.820 --> 01:25:52.060
because you have to pay bills today and tomorrow.

2018
01:25:52.060 --> 01:25:54.820
And so you just need to advertise enough

2019
01:25:54.820 --> 01:25:57.100
that you can continue to iterate the product

2020
01:25:57.100 --> 01:25:59.060
and then when you nail it,

2021
01:25:59.060 --> 01:26:00.500
when people are stoked,

2022
01:26:00.500 --> 01:26:02.820
when you're starting to grow on your own,

2023
01:26:02.820 --> 01:26:03.900
based on the word of mouth

2024
01:26:03.900 --> 01:26:05.580
because as soon as people leave your establishment,

2025
01:26:05.580 --> 01:26:06.380
they leave your business,

2026
01:26:06.380 --> 01:26:08.380
they get off a call with you, whatever it is,

2027
01:26:08.380 --> 01:26:11.100
they then can't help but tell everybody

2028
01:26:11.100 --> 01:26:13.500
they talk to you that day about your thing.

2029
01:26:13.500 --> 01:26:17.540
That is when you add the gasoline, that's when you pour it on.

2030
01:26:17.540 --> 01:26:21.540
So for example, my most recent investment,

2031
01:26:21.540 --> 01:26:24.060
school.com, which is a community platform

2032
01:26:24.060 --> 01:26:27.100
for helping people build and monetize communities,

2033
01:26:27.100 --> 01:26:30.860
I had been watching that company since 2018

2034
01:26:32.060 --> 01:26:35.340
and watching what Sam the founder was doing

2035
01:26:35.340 --> 01:26:37.820
and watching how he was iterating the product.

2036
01:26:37.820 --> 01:26:41.540
And when I decided to become a co-owner of the business,

2037
01:26:41.540 --> 01:26:44.940
it was because the business was growing on its own.

2038
01:26:44.940 --> 01:26:46.540
It had zero marketing

2039
01:26:46.540 --> 01:26:48.740
and it was growing month after month

2040
01:26:48.740 --> 01:26:52.340
and had net growth every single day

2041
01:26:52.340 --> 01:26:56.740
based on people telling other people about the product.

2042
01:26:56.740 --> 01:26:57.940
And so that's when I knew I was like,

2043
01:26:57.940 --> 01:27:01.140
okay, if this thing can grow without me,

2044
01:27:01.140 --> 01:27:03.820
then how much more will it grow with me?

2045
01:27:03.820 --> 01:27:04.940
And that's what I want to get into.

2046
01:27:04.940 --> 01:27:06.180
I want to get into a business

2047
01:27:06.180 --> 01:27:08.180
where I already know the product's exceptional.

2048
01:27:08.180 --> 01:27:10.900
I already know it has a base rate of growth

2049
01:27:10.900 --> 01:27:12.180
based on word of mouth

2050
01:27:12.180 --> 01:27:14.740
so that now when I introduce thousands and tens of thousands

2051
01:27:14.740 --> 01:27:17.740
and hundreds of thousands of people to the platform,

2052
01:27:17.740 --> 01:27:20.220
they will associate me with that value.

2053
01:27:21.140 --> 01:27:22.980
And I know that the product will deliver

2054
01:27:22.980 --> 01:27:24.420
and then take over from there.

2055
01:27:24.420 --> 01:27:25.460
They're not going to buy,

2056
01:27:25.460 --> 01:27:27.220
they might buy because of the association,

2057
01:27:27.220 --> 01:27:29.580
but they stay because of the product.

2058
01:27:29.580 --> 01:27:32.780
I've created all of my wealth in four distinct periods.

2059
01:27:33.980 --> 01:27:36.020
In the very beginning with my gym,

2060
01:27:36.020 --> 01:27:38.380
I had a 30 to one return on advertising.

2061
01:27:38.380 --> 01:27:40.220
The reason that that arbitrage existed,

2062
01:27:40.220 --> 01:27:41.980
meaning I put a dollar and I get $30 out of it,

2063
01:27:41.980 --> 01:27:43.900
but a thousand dollars in, I get $30,000 out.

2064
01:27:43.900 --> 01:27:45.700
The reason that arbitrage existed

2065
01:27:45.700 --> 01:27:49.060
was because Facebook at the time was wildly underpriced.

2066
01:27:49.060 --> 01:27:50.180
I'm assuming very honest.

2067
01:27:50.180 --> 01:27:52.860
That's why that first arbitrage happened.

2068
01:27:52.860 --> 01:27:55.900
The next arbitrage that occurred was in gym launch

2069
01:27:55.900 --> 01:27:58.060
where we got a hundred to one for the first year.

2070
01:27:58.060 --> 01:28:00.860
I spent a hundred grand and made $10 million.

2071
01:28:01.940 --> 01:28:02.780
Yes.

2072
01:28:03.740 --> 01:28:06.780
And as a side note, most of the very wealthy people

2073
01:28:06.780 --> 01:28:09.580
that I know had distinct periods of time

2074
01:28:09.580 --> 01:28:11.420
were opportunity presented itself

2075
01:28:11.420 --> 01:28:12.900
and then they just back the truck up.

2076
01:28:12.900 --> 01:28:14.860
They just went all in on that thing.

2077
01:28:14.860 --> 01:28:17.300
What happens in between is you make normal money,

2078
01:28:17.300 --> 01:28:19.700
but it's those windows of time

2079
01:28:19.700 --> 01:28:21.020
where these opportunities present themselves

2080
01:28:21.020 --> 01:28:22.620
where you can just make crazy money.

2081
01:28:22.620 --> 01:28:25.460
So gym launch was a hundred to one.

2082
01:28:25.460 --> 01:28:26.700
And the reason it was a hundred to one

2083
01:28:26.700 --> 01:28:28.460
was because the product that I was selling

2084
01:28:28.460 --> 01:28:31.420
was the 30 to one thing that I had from the gyms.

2085
01:28:31.420 --> 01:28:34.020
And so everybody who became a licensee

2086
01:28:34.020 --> 01:28:35.980
then was immediately printing money in their gym

2087
01:28:35.980 --> 01:28:38.180
and the product was so good what ended up happening.

2088
01:28:38.180 --> 01:28:39.860
I say, and so now I'm going to give you

2089
01:28:39.900 --> 01:28:41.700
like a look behind the curtain here.

2090
01:28:41.700 --> 01:28:43.420
I say at a hundred to one, which I did,

2091
01:28:43.420 --> 01:28:45.940
but the reality is I just spent a hundred thousand dollars

2092
01:28:45.940 --> 01:28:49.060
and made 10 million and a lot of that was from word of mouth.

2093
01:28:49.060 --> 01:28:50.500
Because if I had spent zero dollars,

2094
01:28:50.500 --> 01:28:52.180
I don't know how much money I would have made

2095
01:28:52.180 --> 01:28:54.900
first is spending the hundred grand that I did on ads.

2096
01:28:54.900 --> 01:28:56.780
But I still probably would have made

2097
01:28:56.780 --> 01:28:59.580
a decent amount of money on zero ad spend

2098
01:28:59.580 --> 01:29:02.060
because the people came in, got the result we promised

2099
01:29:02.060 --> 01:29:04.060
and then told five other gyms.

2100
01:29:04.060 --> 01:29:07.100
And especially in a niche that people,

2101
01:29:07.100 --> 01:29:09.100
everyone knows everyone, the smaller the niche,

2102
01:29:09.100 --> 01:29:11.540
the smaller the local market, the more connected it is

2103
01:29:11.540 --> 01:29:13.980
and the more word of mouth matters.

2104
01:29:15.340 --> 01:29:18.140
And that's where you can get these absurd returns.

2105
01:29:18.140 --> 01:29:19.060
That's when you get into this like,

2106
01:29:19.060 --> 01:29:20.340
it feels like printing money

2107
01:29:20.340 --> 01:29:21.900
because if you have good margins on the thing

2108
01:29:21.900 --> 01:29:23.140
and you have zero cost to acquire

2109
01:29:23.140 --> 01:29:26.060
or very low cost to acquire because of the word of mouth,

2110
01:29:26.060 --> 01:29:28.380
then it just goes nuts.

2111
01:29:28.380 --> 01:29:30.500
And you just like, you're like just accepting money,

2112
01:29:30.500 --> 01:29:32.980
hand over fish like, oh my God, this unbelievable.

2113
01:29:32.980 --> 01:29:35.220
And if anything, that's when you kind of like throttle back

2114
01:29:35.220 --> 01:29:37.780
to make sure that you can consistently keep that word of mouth

2115
01:29:37.780 --> 01:29:39.260
you can deliver on your promises.

2116
01:29:39.260 --> 01:29:41.020
By the way, if this is valuable for you

2117
01:29:41.020 --> 01:29:43.140
or your team or your executive team,

2118
01:29:43.140 --> 01:29:44.900
don't be lame, share the game.

2119
01:29:44.900 --> 01:29:47.500
This is how we know that you want us to make more of this,

2120
01:29:47.500 --> 01:29:49.660
honestly, just like we look at data,

2121
01:29:49.660 --> 01:29:51.740
the more people share it, the more we make more of that stuff.

2122
01:29:51.740 --> 01:29:53.260
And so if you're a business owner specifically,

2123
01:29:53.260 --> 01:29:56.020
like I'm calling you out, I'm making my stuff for you.

2124
01:29:56.020 --> 01:29:57.580
And so like, please share it.

2125
01:29:57.580 --> 01:29:59.660
So I know that this is the type of stuff you want.