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Most of the nation welcome to part two of the Founders podcast that we are continuing from

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last episode.

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First thing we're talking about is big money in tiny markets, it's something very passionate

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about and there is lots of money there and I'll talk about how to unlock it within your

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own business.

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Second thing is how you speak and how you think and how you approach scenarios and situations

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is going to predicate how successful you are in any endeavor you do, especially entrepreneurship

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and how to break that down as a business owner.

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And we bring it home with the biggest mistakes that I see entrepreneurs making in the space

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right now that you may be making and candidly, you probably are making if you're not growing

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at the rate you want to.

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This is not me projecting it onto you, I'm just trying to help you fast track and shortcut

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to a place that you want to be faster.

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So I hope you guys enjoy this as much as I enjoy making it for you.

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I had all the gyms, I did the turn rounds and then I had zero dollars five years later

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because of mistakes that I made.

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But the things that I was gaining was not the money, it was skills, it was the character

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trades and the beliefs.

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Come to the game where we talk about how to get more customers, how to make more

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customers, how to keep them longer and the many failures and lessons we have learned

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along the way.

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I hope you enjoy and subscribe.

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Can you tell me also about kind of the tiny market big money process, like how are you

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finding niche markets that are overflowing with cash?

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I would say they're not necessarily overflowing with cash, but I think if we can apply a standardized

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framework to how we approach their business, this sounds silly, but like you can plug into

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the universe's money and then you can have as much money as you want.

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So for example, let's say I was working with, you know, hair stylists, typically not what

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most people would consider a very affluent, you know, demographic, now there's plenty

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of them and it's definitely a niche, but they're not considered I would say super wealthy.

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But if I know how to market and sell and deliver high value services and I show them how

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to do that and they can immediately generate, let's say, $5,000, $10,000 using a system

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that I've, you know, put together for them so they can run their business model.

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I don't need them to have money.

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I need my system to work and then have the system make them enough money to pay me.

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And that's the key point, like with any of these things, it's like, I've never operated

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on how much money someone has, I operated on how much money I can make them and then

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I siphoned off of that.

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And so I'm going to dive a little bit tactical in this, but I think it would be valuable

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with the audience.

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So there's a process that we have followed in every company that I've ever built and

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this process will be in the third book, which is called Money Models.

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But it's called a client-finished acquisition, at least that's what I call it.

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And so client-finished acquisition is when you have essentially a negative acquisition

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cost and the equation for that is for me that I must make in 30-day cash, which is

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something that I call, which is the amount of cash that I can take from a customer in

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net free cash flow in the first 30 days.

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And the first 30 days is important, which I'll get back to why it's important a second.

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But the amount of money that I can generate from a new customer in the first 30 days in

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net free cash flow must exceed two times the cost of acquisition and the cost of fulfillment.

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If I can do that, then it means that I no longer am capital constrained for growth.

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And so I can use the cash, so let's say I'd cost me 100 bucks to a car customer, right?

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And let's say it costs me, I don't know, 100 bucks to fulfill them, all right?

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So $200 is my cost.

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I have to make two times that in net free cash.

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So I would have to price, I would have to be selling whatever the widget is.

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I'd have to generate $600 in cash in the first 30 days from that prospect.

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If I can do that, I cover their cost of fulfillment and their cost of acquisition and the cost

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of acquiring and fulfilling the next customer off of that initial.

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And I still have money left over to then profit, hire more people, et cetera.

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And so that is what we try to design in that acquisition system that we build independent

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of market, whether it's for photographers, whether it's for certifications, whether it's

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for gem licensing, whether it's for e-commerce, we do it in every single vertical we're in.

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And we continue to push the model until we achieve that.

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And then at that point, we no longer have a marketing budget.

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We can spend as much money as we damn well, please, in the acquisition and then operations

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becomes the bottleneck of scale.

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And so that is why each of the companies has scaled at such a rapid rate is because I don't

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need anyone's money to do it and why we've owned every one of the companies outright

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without taking on outside capital.

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You've talked around 100 X in your prices and yeah, like actually acquiring more clients.

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How did you pull that off?

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If I'm making them an offer so good, they feel stupid saying no.

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So I give the classic Dan Kennedy example, which I like a lot, which is let's say that

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we had a time management course, right?

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Generic time management course you sell for 19 bucks, you're not going to be able to

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sell for really much more than that.

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If I drilled down down a little bit and made it a sales time management course, I might

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be able to sell that for $99.

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If I niche down even further and said outbound sales reps, I might be able to sell that for

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$500.

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If I niche down even further, I might say, you know, automotive outbound sales reps.

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I might be able to sell that same course for $2,000.

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And so the difference between the $19 thing and the $2,000 thing is a 100 X difference

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in price and we were able to achieve that because the avatar that we're selling it to,

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we can clearly demonstrate how much one additional sale could mean for them in their paycheck

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over the year or maybe one more sale per month and then dramatically show the discrepancies

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between what they're paying and what they're getting, right?

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And so I feel like, unless you are well funded and well capitalized and trying to go after

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like a market penetration strategy, which the vast majority of entrepreneurs or bootstrap

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etc., do not have that situation, then they have to go in my opinion in the other direction

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and say, how can I very specifically find an avatar that I will have a competitive advantage

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because I will understand their needs, wants, desires, problems, etc., and I can in a very

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real way provide more value than anyone else can because I am so nuanced in who I serve.

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And then with that niche down messaging, positioning, problem solving, etc., I then generate

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outsized profits, which then allows me to spin the acquisition machine so I can get more

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customers, I can spend more money to get higher quality talent, provide a better experience

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etc.

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Look, if there's one thing that you wanted people to walk away from kind of everything

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you're doing on the education piece, the knowledge sharing, the books, what would that

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be?

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And I think Gary V. says this well, he says, listen to what I'm saying but watch what

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I'm doing, right?

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And I think that most people could learn more by watching the entrepreneurs, what moves

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they're making rather than necessarily even what they're saying.

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And part of that is because I think, you know, you're not always consciously aware of

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the moves you're making, right?

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You just, you only remember to say X, Y, and Z, but there's more nuance to it.

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The thing is, I think that goodwill compounds faster than revenue does.

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And so I believe that if you truly give tremendous value and tremendous being the operative

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work here, I think most people are like, do my content so good.

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It's like, yeah, but no one watches it and if it were so good, you'd have more people

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watching it, right?

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If you give a tremendous amount of value better than what everyone else has paid stuff

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is.

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And that has to be real though, right?

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Like that has to be real.

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People say that, but it's not true.

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And that's the hard part is that the self-awareness piece of like, my stuff's so good, but it probably

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is just why you're not making the money one because you think you are.

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But if you actually can deliver truly more than anyone else can and you can price it at

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zero, the amount of goodwill that you get becomes viral.

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And then at that point, you will have more demand than you know what to do with.

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And then at that point, you'll have this desire to liquidate the demand, the goodwill,

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and monetize it.

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But that's what you should resist doing.

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And instead, double down on giving more and only, only skimming off a handful that you

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can service at a high level.

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And by doing that, you never have to keep generating demand.

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You will always have more demand than you want.

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And that demand will continue to multiply.

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And I talk about this in the book, The Delicat Dense of Desire, right?

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Which is like, if we can just service the absolute best customers, the best advertisers

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who perfectly fit the problems that we know how to solve better than anyone else, everyone

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else gets value from you in the marketplace.

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And the people that you specifically select to be your customers will get outsized returns.

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They'll rave about you.

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More people will demand what you want.

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And again, you sell less than your ability to sell.

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And I think that's the dance that most people mess up.

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And so if I had to consolidate it into two words, it's give more.

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And if you give more than you take, the marketplace will always reward you.

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But most people, their messaging is just give take, give take, give take rather than

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like the true like give, give, give.

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And my opinion is give, give, give, give, give, keep going.

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And eventually you just start getting, you don't even have to ask.

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You just start getting.

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That's just something that I have lived through.

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And I think that if that became real for more people, more people would become zillionaires.

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But it requires the big P word, which is patience and most people will have.

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Real quick wise, you guys already know that I don't run any ads on this and I don't sell

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anything.

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I can only ask that I can ever have if you guys said that you helped me spread the words

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so we can have more entrepreneurs, make more money, feed their families, make better

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products and have better experiences for their employees and customers.

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And the only way we do that is if you can rate and review and share this podcast.

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So the single thing that I have to do is you can just leave a review and take 10 seconds

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or one type of the thumb.

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It means the absolute will to me and more importantly, it may change the world to someone else.

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I'm curious as well.

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I want to talk about mindset.

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Not sexy, often overlooked, but you know, you've had serious success for someone your age.

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I'm curious kind of like what gives you the ability to go out and kind of sell and do

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what you do and not even just selling, but like even the way that you speak, like you

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really command a lot of confidence.

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How do you acquire that?

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We always this way or yes and no.

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I think we have natural proclivities.

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We have natural tendencies that were better at than other things, just from our upbringing

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and whatever.

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But I've thought a lot about this and I think that there's three pieces to it.

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There's skills, beliefs and character traits and hopefully it's not repetitive for you.

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You probably heard me say this, but like I see the ladder of successes having three sides.

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You have both poles and you've got the middle handles that you need to climb up.

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I think that a lot of times entrepreneurs are lopsided.

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They'll have let's say there's there's skills might be up to the 10th story of the building.

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Their traits might be to the sixth floor of the left pole, but the handles, their beliefs

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might be to the third and then they're curious and why they can't get past the third pole

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and then they keep growing their traits from the sixth to the seventh or their skills from

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the 10th to the 11th, but they can't get past the third thing.

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It's because they don't adequately understand what their limitation is.

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And so I think that's the like having that level of discernment and awareness of figuring

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out what my true bottleneck is, because people solve problems that aren't going to be

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our problems, their circumstances, right?

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And so they put all this energy and effort to say, well, I need to get another copywriting

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for it.

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The copywriting is not the weak link in the chain.

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And so they keep fortifying a piece of the bridge, but there's a part that has a brick

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missing and they can't get the dollar across the bridge, but the side on the right has

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17 pillars holding it up to hold up all this traffic that's not coming because they're

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missing something very simple.

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And I think that's the I think that's the piece, but in terms of the command into confidence,

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I don't think that there's actually a hack to this.

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And so I feel pretty passionate about this.

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So we've used the term because I had somebody at an live audience asking this and something

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came out of my mouth and people kept repeating it, which is you have to outwork yourself

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down.

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And so when we talk about sales processes, or if I talk about monetization structures,

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or I talk about, you know, creating offers, right, you sound like you have so much confidence

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and conviction in this, it's because I've done it so many fucking times, right?

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And so when people were asking me, like, and I'm going to, I'm going to really drive this

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because I think it's important.

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So when we started the gym business, right?

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And this is just because so many people are learning from people in the eLearning space

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and I think it's good to have a lens to reach to make decisions, right?

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Of how, how much am I going to wait this person's opinion, right?

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So I had one gym and it was successful.

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And then I had a second gym.

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And after I had my second gym, I didn't start selling how to make a gym successful.

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I had a third gym and then I had a fourth gym and then I had a fifth gym and then

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I had a sixth gym, right?

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And then at that point, I didn't sell a course on how to make gym successful.

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Then I spent a year and a half flying out because I had an offer that no one could say

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no to, which was, don't pay me anything.

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I'll generate 100% of the sales.

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I'll risk my own money, fly out there and do it myself.

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And I did 33 turn arounds.

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So 33 different markets sat at the front desk for three and a half weeks and sold memberships.

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All day long.

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I have 4,000 sales face to face under my belt before we started gym launch.

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And so I think what happens is what I was talking about that good will thing is like people

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are so, so impatient to jump to the next level of the pyramid that they don't build the

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foundation.

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And it's my belief that the peak of the pyramid is predicated on the base, on the thickness

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and the width of the foundation that you build.

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And that's the rocky cutscene that most people are not willing to go through.

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Like people were like, how do you achieve what you achieve?

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But like there's five years of my life that disappeared.

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In fact, I lost all the money which I talk about in the book.

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I had all the gyms.

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I did the turn arounds and then I had zero dollars five years later because of mistakes

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that I made.

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But the things that I was gaining was not the money.

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It was the skills.

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There's the character traits and the beliefs.

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And those are the assets that I was able to take with me.

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And then the next thing, because all I had, because I had the traits and I had the skills,

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I had already run a huge sales team.

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I was already used to doing 20, 30, 50 sales a day, face to face.

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Like I knew how to do a high volume sales team.

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I knew how to market.

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I knew how to write copy.

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I knew how to buy media.

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Like I knew how to do all this stuff.

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I knew how to deliver on the thing.

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But the thing that I was lacking was the belief in terms of the opportunity vehicle that

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I need to wrap those skills in.

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And once I had an outside person who came in and said, hey, I think you should use this

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vehicle instead of this vehicle, that's when everything took off from it.

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But people see that overnight success, but it was because of the foundation of both sides

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of that, of that ladder that were built.

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And I was just missing three or four of these pegs and all of a sudden I was able to spring

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up from $3 million a year to $30 million a year and 12 months, but it was because all

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those things were in place.

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Sorry.

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I knew that was, I just wanted to hit back on the other one about confidence.

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It's like most people are looking for a hack when the reality is that you're just not

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as good.

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You're just not that good.

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And the way to be confident is to do it more times, to do it so many times that it's obvious

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to you that it is boring to you.

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Once it gets boring is when people, you'll sound like you are confident, but to you it'll

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be matter of fact because that is just how it is because you've observed it in reality,

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not in theory so many times.

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The problem is most of the guys were saying this stuff or only saying it because they

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heard someone else say it and they're regurged in theory, but they never experienced

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it.

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And that's the kind of grip people can hear.

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The last question is just kind of like biggest mistakes, common mistakes you see people make

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especially early stage entrepreneurs start up founders.

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What's like the biggest mistake you see entrepreneurs making in 2021?

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It's rush.

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The biggest mistake.

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I mean, I always like seven, an 18, now he's 19 year old number and he kept trying to

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make, he was trying to be a millionaire, right, every month he was trying to be a millionaire

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with a new thing.

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And I was like, if you could sign a contract with me and I said, I could guarantee that

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you'll be a millionaire in 10 years, but you're not going to make anything between now

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and then we sign it.

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He said, yeah, I'd sign it.

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And I was like, cool, this is your note, this is, this is your employment agreement.

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Now, you're working for me and you're going to start calling call, and so he started

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calling.

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And he started his way and now he's like, you know, he's, he's one of the top courses

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on our team.

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He works his way up three runs of the ladder and our sales teams.

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And now he's, he's 19 years old, making 150 grand a year, right?

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Because he's, he's taken everything to heart and he's got hustle.

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But this is just the beginning of his journey.

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There's lots of other skills along that I'm going to start putting in, and putting

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into place so that when he is done that, instead of having a four year degree where he's

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going to learn how to chug beer, right?

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Four years from now, he's going to have 500,000 saved up and he's going to have all the

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skills so that he can start his, his next thing the right way with experience inside of

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a business knowing what it's supposed to be.

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And so the biggest mistake that they make is that they're such a rush that they try

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a new thing every 90 days and my fear is that they're going to be so many guys who've been

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trying to make it big in 90 day sprints on the next new thing that 10 years from now,

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they think they're 90 days away.

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When if they just stuck with the same thing for 10 years, it would be unreasonable for

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them not to be exceptional because no one has stick to itness.

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And if you stick with it, even if you suck, you'll be better than most people after a year.

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And after 10 years, you'll be almost untouchable because no one sticks with me.

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Man, that was an epic story.

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So you got an apprentice, he actually signed the contract.

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Yeah, he started working with us.

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That's cool.

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He was trying to wholesale real estate and I walked in on him because he got some course

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or whatever on the internet.

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And he was like, I would always ask like, how many deals do you got?

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How many deals do you got?

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There's always zeroes, I have many deals, I have many deals yet.

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And then I walked in on him while he was trying to close the deal once and he hung up.

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And I was like, dude, it's like, I know what you have been closing deals.

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He's like, what?

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And I was like, you suck at sales.

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And he was like, anything he like paused for seconds, he's like, how do I get good at sales?

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And I was like, you sell.

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And I was like, so, you know, you can try and do it on your own.

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I was like, well, I can just feed you volume all day.

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And you can get, you know, a hundred reps a day, every single day.

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And you're going to, you can massively condense that learning.

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And he was like, well, I'll do that.

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And I was like, and you can get paid to it.

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I said, pay money.

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And I was like, well, I guess I'll do that.

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So.

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Yeah, there you go.

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Awesome.

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We'll look, we're going to move to rapid fire questions.

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I've got three questions for you.

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Age old question.

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Does money make you happy?

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Yes or no, explain your answer.

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Yes.

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In that, it provides you the time to have the thoughts.

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So I think it opens the door to give you the potential to answer life's harder questions.

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But if you are stuck in scarcity and survival, you can never get to that.

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Or it's very difficult, I'll say, to get to that level.

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Not think it's impossible.

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It's just difficult.

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Where do you see yourself 10 years from now?

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What's the big pitch up beyond the money?

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It's the scale of the learning.

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So for me, part of the reason that I want to build acquisition.com to expand a little bit

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on it is because I don't know anybody who's like a specialist in this space, I taking companies

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from like three or five to 50 to 100.

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And I was like, man, we've done it three times on our own.

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And we've got a fourth one under our belt in the portfolio company.

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And I'm like, I'll bet you if I did it a hundred times.

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I would be able to write the sickest book about it.

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And then that piece of knowledge would be public domain and more companies could do it.

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So I would just see that as like me laying one brick on the path for the next season

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of entrepreneurs.

355
00:19:09.920 --> 00:19:10.920
Yeah, that's awesome.

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Last one.

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If you could have Dina with any entrepreneur dead or alive, who would it be in wine?

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It's a hard call for me.

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I really like Charlie and Warren, but I feel like I know what they'd say.

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Elon is just so brilliant.

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I'm not sure if I would catch everything he was saying.

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Jeff is really brilliant, but I feel like I could communicate with him.

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And I'll tell you what I would ask him.

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I would say if you look at my skills, my character traits and my viewpoints of the world

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and you earn my shoes, what opportunities would you pursue?

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Because he is a better vantage point than me, so you can see what I can't see.

367
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Yeah, I love it, man.

368
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Look, this was an awesome interview.

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We'll wrap there.

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Thank you so much for your time.

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It was great to connect.

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Keep doing what you're doing, really enjoying your content.

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And yeah, we'll wrap there.

374
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Thanks so much, man.

375
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Thank you so much for adding me.

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It was a honor to be here.