WEBVTT 1 00:00:00.000 --> 00:00:01.160 Hey guys, welcome back to the game. 2 00:00:01.160 --> 00:00:04.840 This is the fifth in our series of audio first podcasts. 3 00:00:04.840 --> 00:00:07.760 Again, let me know if you enjoyed these or this style. 4 00:00:07.760 --> 00:00:10.000 Today, I'm talking about compounding and building 5 00:00:10.000 --> 00:00:12.280 compounding assets, both in terms of building 6 00:00:12.280 --> 00:00:14.520 businesses that compound and specific to me 7 00:00:14.520 --> 00:00:17.040 with this podcast, building media and audience that compounds 8 00:00:17.040 --> 00:00:19.880 and seeing the output of the effort that you put in, 9 00:00:19.880 --> 00:00:25.400 and how to or how I approach, figuring out 10 00:00:25.400 --> 00:00:27.600 how to get it right before I make it big. 11 00:00:27.600 --> 00:00:29.800 So I actually wanted to talk about this podcast 12 00:00:29.840 --> 00:00:32.400 and I'll maybe be able to give you guys an update later 13 00:00:32.400 --> 00:00:33.720 when I have more data on this. 14 00:00:33.720 --> 00:00:35.720 But I'll tell you something that might shift 15 00:00:35.720 --> 00:00:38.040 how you see growing business in general. 16 00:00:38.040 --> 00:00:41.200 That has just taken me a really long time to get. 17 00:00:41.200 --> 00:00:43.800 And it's the concept of compounding, 18 00:00:43.800 --> 00:00:46.720 which is fundamentally there's only two ways 19 00:00:46.720 --> 00:00:48.640 that you can build a compounding asset. 20 00:00:48.640 --> 00:00:50.000 Number one is that you sell stuff 21 00:00:50.000 --> 00:00:51.160 that people never stop buying, 22 00:00:51.160 --> 00:00:54.360 or you have a network of people who never stop selling. 23 00:00:54.360 --> 00:00:57.040 And so the idea is that you can make one sale 24 00:00:57.040 --> 00:00:58.120 and get paid for life. 25 00:00:58.120 --> 00:00:58.960 That is the goal. 26 00:00:59.040 --> 00:01:00.880 That is what every amazing business has 27 00:01:00.880 --> 00:01:02.240 in terms of its character traits. 28 00:01:02.240 --> 00:01:03.880 You buy Coca-Cola once, you buy it for life, 29 00:01:03.880 --> 00:01:04.960 you keep buying it. 30 00:01:04.960 --> 00:01:05.960 And so to be clear, this doesn't mean 31 00:01:05.960 --> 00:01:07.840 that you have to have a recurring subscription. 32 00:01:07.840 --> 00:01:09.480 You can also be a reoccurring customer 33 00:01:09.480 --> 00:01:11.200 who buys again, again and again. 34 00:01:11.200 --> 00:01:13.880 And Facebook, for example, you become a customer 35 00:01:13.880 --> 00:01:15.200 of Facebook as soon as you make a profile 36 00:01:15.200 --> 00:01:17.640 and they sell your eyeballs for $10 to $40 a month 37 00:01:17.640 --> 00:01:18.480 through advertising. 38 00:01:18.480 --> 00:01:19.880 And as long as you continue to use the product, 39 00:01:19.880 --> 00:01:20.880 they continue to sell your eyeballs. 40 00:01:20.880 --> 00:01:21.800 They continue to make money for me. 41 00:01:21.800 --> 00:01:23.360 Oh wonderful business, right? 42 00:01:23.360 --> 00:01:26.440 I have, in the beginning, you don't know how to do anything, 43 00:01:26.440 --> 00:01:27.280 right? And that makes sense. 44 00:01:27.280 --> 00:01:28.600 You don't know how to do it. 45 00:01:28.600 --> 00:01:30.120 And so you have to learn how to promote 46 00:01:30.120 --> 00:01:31.680 because otherwise no one knows you exist 47 00:01:31.680 --> 00:01:32.520 and you can't make sales. 48 00:01:32.520 --> 00:01:34.920 So you have to do one-on-one promotion in order to do that. 49 00:01:34.920 --> 00:01:37.600 One of the difficulties is that as you begin promoting, 50 00:01:37.600 --> 00:01:38.480 you begin making more money. 51 00:01:38.480 --> 00:01:39.840 And so then you think, ah, the secret to life 52 00:01:39.840 --> 00:01:41.240 is that it just has to promote more. 53 00:01:41.240 --> 00:01:43.480 Which it kind of is, but it also kind of isn't. 54 00:01:43.480 --> 00:01:45.840 The thing is you're like, how's this related 55 00:01:45.840 --> 00:01:46.680 to the podcast? 56 00:01:46.680 --> 00:01:47.520 Don't worry, we'll get there. 57 00:01:47.520 --> 00:01:51.400 I used to just think, okay, so in order for me 58 00:01:51.400 --> 00:01:53.720 to grow this business, I will go from, you know, 59 00:01:53.720 --> 00:01:56.200 this year, I'm going to sell 100 customers. 60 00:01:56.200 --> 00:01:57.560 And next year, to double the business, 61 00:01:57.560 --> 00:01:58.680 I'll sell 200 customers. 62 00:01:58.680 --> 00:02:00.480 And to double the business, the next year I'll grow, 63 00:02:00.480 --> 00:02:01.800 I'll sell 400 customers. 64 00:02:01.800 --> 00:02:03.800 And the next year, to double the business, 65 00:02:03.800 --> 00:02:05.440 I'll sell 800 customers. 66 00:02:05.440 --> 00:02:06.680 But it always came with the assumption 67 00:02:06.680 --> 00:02:08.840 that I was losing 100% of my customers every year. 68 00:02:08.840 --> 00:02:09.800 People weren't coming back. 69 00:02:09.800 --> 00:02:11.240 Obviously you do have some return customers, 70 00:02:11.240 --> 00:02:13.160 but if you, but the majority of people 71 00:02:13.160 --> 00:02:14.680 that I had to bring in were always new. 72 00:02:14.680 --> 00:02:16.400 I had to reload every month. 73 00:02:16.400 --> 00:02:18.800 And so I got exceptionally good at marketing and sales. 74 00:02:18.800 --> 00:02:20.640 But when I saw the difference 75 00:02:20.640 --> 00:02:22.600 between the massive companies that existed 76 00:02:22.600 --> 00:02:26.160 and my companies, it was because they had leverage. 77 00:02:26.160 --> 00:02:27.120 They had compounding. 78 00:02:27.120 --> 00:02:28.840 They got more for what they did. 79 00:02:28.840 --> 00:02:32.080 When I sold 100 people year one 80 00:02:32.080 --> 00:02:34.280 and then 200 people year two, 81 00:02:34.280 --> 00:02:36.400 they sold 100 people year one 82 00:02:36.400 --> 00:02:38.800 and sold 100 people year two, but guess what? 83 00:02:38.800 --> 00:02:39.760 They had 200 customers 84 00:02:39.760 --> 00:02:41.480 because the first 100 were still there. 85 00:02:41.480 --> 00:02:44.360 And the third year, when they chose to sell 200 people 86 00:02:44.360 --> 00:02:47.400 to my 400, so they had half the sales velocity that I had. 87 00:02:47.400 --> 00:02:49.560 They still had 400 customers 88 00:02:49.560 --> 00:02:52.360 because they had your 100, your 200, 89 00:02:52.360 --> 00:02:55.320 and then they had the extra 200 from that third year. 90 00:02:55.320 --> 00:02:57.080 So they're also at 400, 91 00:02:57.080 --> 00:02:59.600 but they're able to run with significantly higher margin 92 00:02:59.600 --> 00:03:01.640 because all of those additional customers 93 00:03:01.640 --> 00:03:03.680 they didn't have to acquire. 94 00:03:03.680 --> 00:03:06.360 And so the cost to acquire the additional 200 95 00:03:06.360 --> 00:03:08.440 that the 400 person had to do 96 00:03:08.440 --> 00:03:10.400 went straight to the bottom line. 97 00:03:10.400 --> 00:03:14.920 The key, the level one is don't lose customers. 98 00:03:14.920 --> 00:03:17.040 Level two is not only do you not lose customers, 99 00:03:17.040 --> 00:03:18.640 but those customers bring in more customers. 100 00:03:18.640 --> 00:03:20.160 Some call it a viral coefficient. 101 00:03:20.160 --> 00:03:23.520 I seek out businesses and products 102 00:03:23.520 --> 00:03:25.920 that have compounding built in within them. 103 00:03:25.920 --> 00:03:27.120 And so I'll give you an example 104 00:03:27.120 --> 00:03:28.280 of the second type of companies. 105 00:03:28.280 --> 00:03:29.680 Everything that I set up at this point has been, 106 00:03:29.680 --> 00:03:31.720 when you sell some of the people that stop buying, 107 00:03:31.720 --> 00:03:33.720 the other way of building a company business 108 00:03:33.720 --> 00:03:36.840 is a business where you find a network of people, 109 00:03:36.840 --> 00:03:37.680 or you build a network of people, 110 00:03:37.680 --> 00:03:38.520 and you never stop selling for you. 111 00:03:38.520 --> 00:03:40.680 So if I had a real estate brokerage, for example, 112 00:03:40.680 --> 00:03:43.240 I would have realtors who sell houses. 113 00:03:43.240 --> 00:03:45.680 And so the houses they sell are not recurring, not really. 114 00:03:45.680 --> 00:03:47.240 People buy houses every three or four years 115 00:03:47.240 --> 00:03:48.560 and they don't always use the same realtors, 116 00:03:48.560 --> 00:03:50.720 and they'd be great if they do, but they don't always, right? 117 00:03:50.720 --> 00:03:52.080 They move literally a lot of them 118 00:03:52.080 --> 00:03:54.160 move to different areas, and they don't use the same realtors. 119 00:03:54.160 --> 00:03:55.880 But if I were the owner of the brokerage, 120 00:03:55.880 --> 00:03:58.760 then I would see that I have, let's call it, five agents. 121 00:03:58.760 --> 00:04:01.160 And I acquire five agents every year, 122 00:04:01.160 --> 00:04:04.000 and those agents are responsible for X houses per year. 123 00:04:04.000 --> 00:04:06.000 And so over time, the compounding asset that I have 124 00:04:06.000 --> 00:04:07.560 is that every year I sell five agents, 125 00:04:07.560 --> 00:04:09.200 but by the fifth year, I have 25 agents 126 00:04:09.200 --> 00:04:10.760 doing the same averages to five. 127 00:04:10.760 --> 00:04:12.080 So I've still five X to my business, 128 00:04:12.080 --> 00:04:14.520 even though I only sold the same sold, on boarded, 129 00:04:14.520 --> 00:04:16.520 whatever word you wanna use, on boarded five agents, 130 00:04:16.520 --> 00:04:17.800 because the real customer of the brokerage 131 00:04:17.800 --> 00:04:22.000 is the agents themselves less than the homeowners. 132 00:04:22.000 --> 00:04:23.360 And thinking about businesses this way, 133 00:04:23.360 --> 00:04:24.840 there's basically those are the two ways 134 00:04:24.840 --> 00:04:26.120 that you build compounding businesses. 135 00:04:26.120 --> 00:04:28.240 Now, it works with people who do the promotion for you, 136 00:04:28.240 --> 00:04:30.280 or people who never stop buying so that 137 00:04:30.280 --> 00:04:31.960 you don't have to do as much promotion. 138 00:04:31.960 --> 00:04:33.400 Either way, you win. 139 00:04:33.400 --> 00:04:35.360 Again, how does this relate to the podcast? 140 00:04:35.360 --> 00:04:36.520 Don't worry, we'll get there. 141 00:04:36.520 --> 00:04:38.520 So my podcast manager was like, 142 00:04:38.520 --> 00:04:40.160 hey, I think to grow the podcast, 143 00:04:40.160 --> 00:04:42.280 we could run ads on other people's podcasts, 144 00:04:42.280 --> 00:04:44.080 which is a very sound, logical strategy, right? 145 00:04:44.080 --> 00:04:49.080 But I have this obsession now that has kind of happened 146 00:04:49.080 --> 00:04:51.680 as the businesses we have have grown and compounded, 147 00:04:52.040 --> 00:04:53.200 got bigger and bigger, 148 00:04:53.200 --> 00:04:55.920 then I'm just very obsessed with this idea of compounding, 149 00:04:55.920 --> 00:04:59.000 which is, I hate the idea that in order to grow, 150 00:04:59.000 --> 00:05:00.920 I just have to double my infrastructure. 151 00:05:00.920 --> 00:05:01.760 That sucks. 152 00:05:01.760 --> 00:05:03.600 Like I'd rather just sell 100 people every year 153 00:05:03.600 --> 00:05:05.400 for 10 years and then have a 10x bigger business, 154 00:05:05.400 --> 00:05:08.400 like that sounds way more fun and way more profitable. 155 00:05:08.400 --> 00:05:11.160 If you, for example, have a YouTube channel 156 00:05:11.160 --> 00:05:13.560 and you want to grow your YouTube channel, 157 00:05:13.560 --> 00:05:15.960 you could, of course, run ads to your YouTube channel 158 00:05:15.960 --> 00:05:17.400 to grow it. 159 00:05:17.400 --> 00:05:19.720 But why? 160 00:05:19.720 --> 00:05:22.800 If you can't retain the people who are watching 161 00:05:22.800 --> 00:05:25.080 your YouTube videos, why get more people 162 00:05:25.080 --> 00:05:27.440 to watch your bad YouTube videos? 163 00:05:27.440 --> 00:05:31.920 If you can't retain the people who listened to your podcast, 164 00:05:31.920 --> 00:05:35.400 why advertise your podcast, right? 165 00:05:35.400 --> 00:05:36.800 And so I'll be transparent, 166 00:05:36.800 --> 00:05:37.840 which is probably a lot of people 167 00:05:37.840 --> 00:05:39.000 aren't as transparent about their stuff. 168 00:05:39.000 --> 00:05:40.440 So right now, my podcast, 169 00:05:40.440 --> 00:05:41.520 so this is what you're listening to right now, 170 00:05:41.520 --> 00:05:43.800 gets about a million downloads a month. 171 00:05:43.800 --> 00:05:45.800 And we've been at about a million downloads a month 172 00:05:45.800 --> 00:05:48.960 for, I want to say, since the book launch last year, 173 00:05:48.960 --> 00:05:53.080 so I want to say it's been 13, 14 months, whatever it's been. 174 00:05:53.080 --> 00:05:55.000 And so we've been about at the same level. 175 00:05:55.000 --> 00:05:56.880 Now, before that, we continue to grow 176 00:05:56.880 --> 00:05:57.880 a month after month after month. 177 00:05:57.880 --> 00:05:59.360 We kind of just maintained here. 178 00:05:59.360 --> 00:06:03.760 And so what that indicates to me is that we are good enough 179 00:06:03.760 --> 00:06:07.120 to keep the audience we have, but not good enough 180 00:06:07.120 --> 00:06:09.360 to have those people share it. 181 00:06:09.360 --> 00:06:12.920 I then looked at, what was I doing during the hypergrowth period 182 00:06:12.920 --> 00:06:16.320 versus what I was doing since the hypergrowth period? 183 00:06:16.400 --> 00:06:19.640 And the hypergrowth period, I was making audio content 184 00:06:19.640 --> 00:06:22.000 like this, which is me just making direct podcasts. 185 00:06:22.000 --> 00:06:24.120 Now, the reason that that stopped was because, 186 00:06:24.120 --> 00:06:25.560 honestly, it was just time constraint. 187 00:06:25.560 --> 00:06:29.200 And podcasts have slower growth rates than like YouTube does. 188 00:06:29.200 --> 00:06:31.320 And so from a return on effort perspective, 189 00:06:31.320 --> 00:06:34.040 it made more sense for me to allocate effort 190 00:06:34.040 --> 00:06:38.600 towards growing YouTube and short content for the platform. 191 00:06:38.600 --> 00:06:42.840 So I just actually did a big tear list breakdown of platforms. 192 00:06:42.840 --> 00:06:46.200 And so you can see podcasts is actually the third, third tier 193 00:06:46.240 --> 00:06:47.960 down on my platforms list. 194 00:06:47.960 --> 00:06:49.560 And so you're like, wait, I thought you said 195 00:06:49.560 --> 00:06:50.520 you weren't investing this much. 196 00:06:50.520 --> 00:06:54.320 Well, I'm choosing to do this experiment. 197 00:06:54.320 --> 00:06:56.000 And that's really it. 198 00:06:56.000 --> 00:06:57.400 I'm just choosing to do this experiment 199 00:06:57.400 --> 00:07:00.400 because I have an inkling a hunch 200 00:07:00.400 --> 00:07:04.600 that the more audio first content I make, 201 00:07:04.600 --> 00:07:06.880 the more the podcast will grow. 202 00:07:06.880 --> 00:07:09.320 And I think that for me, now, I don't know yet, 203 00:07:09.320 --> 00:07:10.880 because I'm making this ahead of time 204 00:07:10.880 --> 00:07:12.120 before I find out what happens. 205 00:07:12.120 --> 00:07:13.440 I could just be wrong and I'll have an update 206 00:07:13.440 --> 00:07:14.840 and let you guys know that it was wrong. 207 00:07:14.840 --> 00:07:15.920 So this doesn't work. 208 00:07:15.920 --> 00:07:18.040 Then I'll have one very short podcast. 209 00:07:18.040 --> 00:07:19.760 It was like, hey, by the way, the direct audio didn't work. 210 00:07:19.760 --> 00:07:21.440 And so this is the last one you're going to hear by. 211 00:07:21.440 --> 00:07:22.760 That'll be it. 212 00:07:22.760 --> 00:07:26.960 But if it does work, and people do enjoy this style better. 213 00:07:26.960 --> 00:07:28.240 In some ways, I actually like that, 214 00:07:28.240 --> 00:07:30.720 because this is the stuff that's top of mind 215 00:07:30.720 --> 00:07:33.280 of what I'm actually thinking about right now. 216 00:07:33.280 --> 00:07:34.760 And this is a lot of it's conceptual. 217 00:07:34.760 --> 00:07:38.000 And it's hard for me to just be transparent with you. 218 00:07:38.000 --> 00:07:39.120 One of the difficulties about the role 219 00:07:39.120 --> 00:07:42.600 that I have right now is that what's relevant for me 220 00:07:42.600 --> 00:07:45.120 is not relevant for just about anyone. 221 00:07:45.120 --> 00:07:46.640 Just percentage wise. 222 00:07:46.640 --> 00:07:49.120 The difficulty is, for the vast majority of it, 223 00:07:49.120 --> 00:07:54.120 so it's like 76% of businesses are non-employee, 224 00:07:54.120 --> 00:07:56.320 non-employers, meaning they don't have a single employee. 225 00:07:56.320 --> 00:07:59.360 They're just one guy who has an LLC and makes money, 226 00:07:59.360 --> 00:08:01.560 which you could maybe define as contractors or 1099s 227 00:08:01.560 --> 00:08:03.360 or just independent vendors, whatever. 228 00:08:03.360 --> 00:08:05.920 And underneath of that, you have all the people 229 00:08:05.920 --> 00:08:06.840 who would like to start a business. 230 00:08:06.840 --> 00:08:10.880 And so there's this massive market of people who want to start. 231 00:08:10.880 --> 00:08:13.400 And there's like 30,000 businesses 232 00:08:13.400 --> 00:08:16.600 that are doing over 300 million a year. 233 00:08:16.600 --> 00:08:20.360 And we're on track to doing that by the end of next year. 234 00:08:20.360 --> 00:08:21.920 On one hand, I want to make stuff 235 00:08:21.920 --> 00:08:23.200 that's really interesting for me, 236 00:08:23.200 --> 00:08:24.200 but on the other hand, I want to make stuff 237 00:08:24.200 --> 00:08:25.600 that's interesting for you. 238 00:08:25.600 --> 00:08:28.640 If it's over 10 million, it's one in every 250 businesses. 239 00:08:28.640 --> 00:08:30.320 So still not a lot, right? 240 00:08:30.320 --> 00:08:32.080 This may end up just shifting my podcast 241 00:08:32.080 --> 00:08:34.200 to being more higher level business stuff 242 00:08:34.200 --> 00:08:36.640 because, I mean, this is what I think about. 243 00:08:36.640 --> 00:08:38.360 And so it's actually been kind of hard for me 244 00:08:38.360 --> 00:08:41.640 because I feel like I'm trying to reach back in time 245 00:08:41.640 --> 00:08:44.800 to be like, okay, this is what a business of this size 246 00:08:44.800 --> 00:08:46.720 is dealing with because I've gone through it so many times. 247 00:08:46.720 --> 00:08:47.920 And just for context right now, 248 00:08:47.920 --> 00:08:50.840 we've got three nine-figure businesses. 249 00:08:50.840 --> 00:08:52.520 And I see nine figures in terms of enterprise value 250 00:08:52.520 --> 00:08:54.840 close to a fourth that are all nine 251 00:08:54.840 --> 00:08:57.200 or multi-nine-figure businesses in the portfolio. 252 00:08:57.200 --> 00:08:58.920 So like we've done it more than once. 253 00:08:58.920 --> 00:09:01.400 Like I'm pretty confident like what it takes to do 254 00:09:01.400 --> 00:09:02.920 each of these stages. 255 00:09:02.920 --> 00:09:05.920 But in going back to the compounding concept, 256 00:09:05.920 --> 00:09:09.920 I didn't want to run ads because we were maintaining. 257 00:09:09.920 --> 00:09:11.080 And so you could make the argument, 258 00:09:11.080 --> 00:09:12.360 well, then we'll just run ads 259 00:09:12.360 --> 00:09:13.640 and we'll just maintain all large audience. 260 00:09:13.640 --> 00:09:16.040 But I want something that grows. 261 00:09:16.040 --> 00:09:17.920 I want something that grows on its own. 262 00:09:17.920 --> 00:09:19.840 When I started my first business, I got referrals 263 00:09:19.840 --> 00:09:22.800 and I got referrals in excess of the people that I served. 264 00:09:22.800 --> 00:09:26.000 And I try to keep that as my North Star. 265 00:09:26.000 --> 00:09:27.320 And like with school, for example, 266 00:09:27.320 --> 00:09:28.320 for every person who joined school, 267 00:09:28.320 --> 00:09:31.760 we get more than one person who comes on as well, 268 00:09:31.760 --> 00:09:32.760 just from referrals. 269 00:09:32.760 --> 00:09:34.680 So that's that viral coefficient. 270 00:09:34.920 --> 00:09:37.320 And so it's like you get more credit for the work you do. 271 00:09:37.320 --> 00:09:40.800 And it just, no matter how small the growth is, 272 00:09:40.800 --> 00:09:44.000 if you grow every day, you get really big. 273 00:09:44.000 --> 00:09:46.560 Like if you, like the first rule of investing 274 00:09:46.560 --> 00:09:47.840 for more in Buffett is don't lose money. 275 00:09:47.840 --> 00:09:49.560 The second rule is don't forget the first rule. 276 00:09:49.560 --> 00:09:50.880 And fundamentally what he means is 277 00:09:50.880 --> 00:09:52.640 just don't make the number go down. 278 00:09:52.640 --> 00:09:53.880 If you've got 100 customers, 279 00:09:53.880 --> 00:09:55.680 even if you kept 100 for two years, 280 00:09:55.680 --> 00:09:58.840 the next year you get one customer, you're still bigger. 281 00:09:58.840 --> 00:10:00.160 When you have a hole in the bucket, 282 00:10:00.160 --> 00:10:04.120 it just makes for so much more work just to stay the same. 283 00:10:04.120 --> 00:10:07.080 And so it makes more sense to fix the hole in the bucket 284 00:10:07.080 --> 00:10:08.640 when things are smaller, 285 00:10:08.640 --> 00:10:11.560 when you have fewer variables to consider, 286 00:10:11.560 --> 00:10:13.640 so that then when you pour more on the top, 287 00:10:13.640 --> 00:10:14.920 it just grows that much faster, 288 00:10:14.920 --> 00:10:17.040 rather than having the rate of pouring 289 00:10:17.040 --> 00:10:18.040 be the way that you grow, 290 00:10:18.040 --> 00:10:19.760 because then the only thing you can do to grow 291 00:10:19.760 --> 00:10:22.800 is grow is pour faster or pour more. 292 00:10:22.800 --> 00:10:24.760 And that gets really tough. 293 00:10:24.760 --> 00:10:27.160 I've scaled direct response companies really big. 294 00:10:27.160 --> 00:10:28.680 Obviously really big is relevant. 295 00:10:28.680 --> 00:10:31.960 But like let's call it 200,000 a day in spend. 296 00:10:31.960 --> 00:10:34.480 Like I've spent, I think that's still real money. 297 00:10:34.480 --> 00:10:36.720 So 200,000 a day is a decent amount of ad spend. 298 00:10:36.720 --> 00:10:37.720 I know there's some guys on here 299 00:10:37.720 --> 00:10:39.400 who are doing billions a year, so fine, 300 00:10:39.400 --> 00:10:41.360 but it's still decent size. 301 00:10:41.360 --> 00:10:43.920 And it's exhausting. 302 00:10:43.920 --> 00:10:46.520 It's exhausting in general to think that every month 303 00:10:46.520 --> 00:10:47.880 when you start you have no money 304 00:10:47.880 --> 00:10:50.000 and you have to make it every month 305 00:10:50.000 --> 00:10:51.160 to pay all of your bills 306 00:10:51.160 --> 00:10:53.280 and then have someone left over for a profit. 307 00:10:53.280 --> 00:10:54.920 It's a tough way to make a buck. 308 00:10:54.920 --> 00:10:57.360 And I get it because I've done that for a while 309 00:10:57.360 --> 00:10:59.400 because I got really into marketing and sales 310 00:10:59.400 --> 00:11:01.200 and obviously I got decent at it. 311 00:11:01.200 --> 00:11:04.200 I have learned a slightly more balanced approach 312 00:11:04.200 --> 00:11:05.280 which is back to front. 313 00:11:05.280 --> 00:11:06.840 And so when we buy a business, 314 00:11:06.840 --> 00:11:08.880 I spend the majority of my time on the back 315 00:11:08.880 --> 00:11:12.200 so that I can finally open a can of whoop ass on the front 316 00:11:12.200 --> 00:11:14.200 and do all the marketing and sales stuff 317 00:11:14.200 --> 00:11:15.480 that I know how to do. 318 00:11:15.480 --> 00:11:20.560 But it feels like such a waste of time to do that 319 00:11:20.560 --> 00:11:23.080 when you have a product that doesn't get good reviews, 320 00:11:23.080 --> 00:11:24.920 when you have a product that doesn't bring other customers, 321 00:11:24.920 --> 00:11:26.800 when you have a product or service 322 00:11:26.800 --> 00:11:28.200 that doesn't keep the people you sold. 323 00:11:28.200 --> 00:11:29.640 It's soul crushing. 324 00:11:29.640 --> 00:11:30.480 It's crushing for you. 325 00:11:30.480 --> 00:11:31.800 It's crushing for your team. 326 00:11:31.800 --> 00:11:33.200 If you're like, well, why do you make content? 327 00:11:33.200 --> 00:11:34.440 If content disappears, right? 328 00:11:34.440 --> 00:11:36.600 And so this was actually a huge belief in mine 329 00:11:36.600 --> 00:11:38.440 that actually kept me really poor 330 00:11:38.440 --> 00:11:39.960 and so I want to break this for you. 331 00:11:39.960 --> 00:11:44.960 I never wanted to make content for years, 332 00:11:45.400 --> 00:11:46.240 for variety reasons. 333 00:11:46.240 --> 00:11:47.240 One is I didn't want to be famous. 334 00:11:47.240 --> 00:11:50.760 But the second reason was because it felt like a waste of time. 335 00:11:50.760 --> 00:11:53.040 I was like, I have to make content every month. 336 00:11:53.040 --> 00:11:55.200 It just disappears into the ether, 337 00:11:55.200 --> 00:11:57.320 goes into the newsfeed after it's ever seven days old 338 00:11:57.320 --> 00:11:58.160 and known sees it again. 339 00:11:58.840 --> 00:12:02.160 But what I didn't realize was that media 340 00:12:02.160 --> 00:12:03.200 is a compounding asset, 341 00:12:03.200 --> 00:12:05.040 not because of the media itself, 342 00:12:05.040 --> 00:12:07.520 but because of the audience that gets built. 343 00:12:07.520 --> 00:12:11.400 And so the audience is the output of the media. 344 00:12:11.400 --> 00:12:15.240 And so if your audience grows by call it 10% per month, 345 00:12:15.240 --> 00:12:18.360 you retain audience and then you multiply audience. 346 00:12:18.360 --> 00:12:20.240 And so if those people on average, 347 00:12:20.240 --> 00:12:22.480 like if one out of 10 people brings one more person 348 00:12:22.480 --> 00:12:25.200 every month, then my audience will compound 349 00:12:25.200 --> 00:12:27.520 and so will yours if you shift your perspective around it. 350 00:12:27.520 --> 00:12:28.880 And this was very helpful for me 351 00:12:28.880 --> 00:12:32.400 because it felt so fruitless and so irrelevant 352 00:12:32.400 --> 00:12:34.760 in the beginning, especially with the early numbers. 353 00:12:34.760 --> 00:12:37.040 You're getting 100 views on a YouTube video. 354 00:12:37.040 --> 00:12:40.520 And you guys forget because you see me now, 355 00:12:40.520 --> 00:12:42.680 but when I started on YouTube, 356 00:12:42.680 --> 00:12:44.000 when we got 100 views, I was like, 357 00:12:44.000 --> 00:12:45.280 woo, got 100 views. 358 00:12:45.280 --> 00:12:46.440 And then we got our first thousand. 359 00:12:46.440 --> 00:12:47.440 I was like, we got a thousand views. 360 00:12:47.440 --> 00:12:48.240 I was like, can you imagine 361 00:12:48.240 --> 00:12:50.280 where you get 10,000 views in a day? 362 00:12:50.280 --> 00:12:53.040 And I used to think to myself, man, 10,000 people, 363 00:12:53.040 --> 00:12:54.480 when I was in the gym, 364 00:12:54.480 --> 00:12:57.320 if I had a lunch and learn with 10 people, I was stoked. 365 00:12:57.320 --> 00:12:58.640 Right? I tried to think about that way 366 00:12:58.640 --> 00:12:59.840 to kind of get me through the earlier times. 367 00:12:59.840 --> 00:13:01.560 Like, hey, this was 10 people who watched this. 368 00:13:01.560 --> 00:13:02.720 That's not bad. That's 10 people. 369 00:13:02.720 --> 00:13:03.720 Like, I was okay. 370 00:13:03.720 --> 00:13:05.680 The thing is is that if you see those 10 people, 371 00:13:05.680 --> 00:13:07.480 and this is the key point, 372 00:13:07.480 --> 00:13:09.200 if the thing that you made was good enough 373 00:13:09.200 --> 00:13:12.880 that those 10 people clicked to watch the next video you make 374 00:13:12.880 --> 00:13:15.080 or the next short or the next post, 375 00:13:15.080 --> 00:13:17.240 then you've retained that audience. 376 00:13:17.240 --> 00:13:19.720 And so then that audience becomes a compounding asset. 377 00:13:19.720 --> 00:13:22.320 And so basically, the point of doing more in the beginning 378 00:13:22.320 --> 00:13:23.520 is to learn how to get good enough 379 00:13:23.520 --> 00:13:25.720 that you can keep the audience you build. 380 00:13:25.720 --> 00:13:27.280 And then once you get good enough, 381 00:13:27.280 --> 00:13:28.360 that you can keep the audience you build. 382 00:13:28.360 --> 00:13:30.960 And ideally, the next level is multiply the audience you build 383 00:13:30.960 --> 00:13:32.880 where they share your stuff, 384 00:13:32.880 --> 00:13:35.640 not just you telling more people about it, 385 00:13:35.640 --> 00:13:37.320 which would be like me running ads 386 00:13:37.320 --> 00:13:41.440 to build my audience or me doing drops. 387 00:13:41.440 --> 00:13:42.880 Right? Now, if you do here, 388 00:13:42.880 --> 00:13:45.040 podcast ads from me in the future, 389 00:13:45.040 --> 00:13:46.960 it's because I have figured out how to go 390 00:13:46.960 --> 00:13:49.160 from maintenance to growth. 391 00:13:49.160 --> 00:13:50.840 Again, and maybe this will be the thing who knows. 392 00:13:50.840 --> 00:13:51.720 I just wanted to share that with you 393 00:13:51.720 --> 00:13:54.160 because I see a lot of businesses, 394 00:13:54.160 --> 00:13:58.400 basically artificially inflate their growth 395 00:13:58.400 --> 00:14:00.600 by just dropping more and more in ad spend. 396 00:14:00.600 --> 00:14:02.200 And there's nothing wrong with advertising work, 397 00:14:02.200 --> 00:14:03.680 dude, like I advertise. 398 00:14:03.680 --> 00:14:05.840 Obviously, I like advertising, I like it. 399 00:14:05.840 --> 00:14:07.720 But I wanna do it to stuff that I know, 400 00:14:07.720 --> 00:14:10.040 I'm gonna get credit for in three years. 401 00:14:10.040 --> 00:14:12.000 And so I think Dan Kennedy has a quote that I like a lot. 402 00:14:12.000 --> 00:14:16.080 He says, you don't get a customer to make a sale. 403 00:14:17.200 --> 00:14:18.720 You make a sale to get a customer. 404 00:14:19.680 --> 00:14:21.800 You don't build an audience to get views. 405 00:14:21.800 --> 00:14:24.040 You get views to build an audience. 406 00:14:24.040 --> 00:14:25.520 And so until your stuff's good enough, 407 00:14:25.520 --> 00:14:27.640 I would recommend not promoting it, 408 00:14:27.640 --> 00:14:28.640 which sounds counterintuitive. 409 00:14:28.640 --> 00:14:30.800 Again, growth counterintuitive. 410 00:14:30.800 --> 00:14:32.560 But keep doing it until it's good enough 411 00:14:32.560 --> 00:14:35.000 that you retain and multiply audience. 412 00:14:35.000 --> 00:14:38.040 At that point, then you become inevitable. 413 00:14:38.040 --> 00:14:39.800 You become an inevitability. 414 00:14:39.800 --> 00:14:42.600 Growth becomes something that must occur 415 00:14:42.600 --> 00:14:45.640 that happens without your consent, without your permission. 416 00:14:45.640 --> 00:14:46.800 It keeps growing. 417 00:14:46.800 --> 00:14:49.160 Whether you like it or not, you just keep getting bigger. 418 00:14:49.160 --> 00:14:52.400 You keep multiplying, you keep amplifying the message 419 00:14:52.400 --> 00:14:56.040 that you have because your audience does that for you 420 00:14:56.040 --> 00:14:58.240 because there's more of them than there are of you. 421 00:14:58.240 --> 00:14:59.720 Because there's only two people that can promote your stuff. 422 00:14:59.720 --> 00:15:00.720 You and other people. 423 00:15:00.720 --> 00:15:02.480 And again, there's more of them than there are of you. 424 00:15:02.480 --> 00:15:05.320 And so unlocking how to get them to promote it. 425 00:15:05.320 --> 00:15:06.800 And again, when I say them promoting, 426 00:15:06.800 --> 00:15:08.720 I'm saying very, you know, dollars and cents here. 427 00:15:08.720 --> 00:15:11.440 But it's really making it valuable enough 428 00:15:11.440 --> 00:15:13.880 that they deem it worthy to share. 429 00:15:13.880 --> 00:15:17.160 Thinking about it from this perspective of one, 430 00:15:17.160 --> 00:15:20.040 when someone has this listens to this, 431 00:15:20.040 --> 00:15:21.520 level one is, this is good enough for me 432 00:15:21.520 --> 00:15:23.560 to come back and listen to something else. 433 00:15:23.560 --> 00:15:27.320 Level two is, I want five people I know to hear this message 434 00:15:27.320 --> 00:15:28.800 so that I don't have to tell them. 435 00:15:28.800 --> 00:15:30.920 So me sharing this saves me the time of having 436 00:15:30.920 --> 00:15:32.760 to share this message with them. 437 00:15:32.760 --> 00:15:34.760 And I think their lives would be better off. 438 00:15:34.760 --> 00:15:37.200 And I get social status from making this share 439 00:15:37.200 --> 00:15:38.200 because I've made their lives better 440 00:15:38.200 --> 00:15:39.880 and they'll associate that value with me. 441 00:15:39.880 --> 00:15:42.160 And so basically, it's like you doing this work 442 00:15:42.160 --> 00:15:45.880 for somebody else so that they can gain benefit 443 00:15:45.880 --> 00:15:47.080 without working. 444 00:15:47.080 --> 00:15:50.080 So we basically give them a shortcut to social capital 445 00:15:50.080 --> 00:15:52.120 by making the gift that they can give somebody else 446 00:15:52.120 --> 00:15:53.920 without putting the time in. 447 00:15:53.920 --> 00:15:56.360 And so I think that is the very nature of value creation 448 00:15:56.360 --> 00:15:59.120 within an audience and how audiences compound. 449 00:15:59.120 --> 00:16:01.240 And it's much more difficult with education 450 00:16:01.240 --> 00:16:03.880 that is entertainment because anyone can be entertained, 451 00:16:03.880 --> 00:16:05.160 which is why all of the biggest creators 452 00:16:05.160 --> 00:16:06.520 in the world are entertainers. 453 00:16:06.520 --> 00:16:09.920 Because anyone can get value from watching a car blow up. 454 00:16:09.920 --> 00:16:12.760 Anyone can get value from watching, you know, 455 00:16:12.760 --> 00:16:15.880 people jump off a huge cliff and then tuck and roll 456 00:16:15.880 --> 00:16:17.520 at the bottom like that's entertaining. 457 00:16:17.520 --> 00:16:20.400 That's cool, every human being can get value from that. 458 00:16:20.400 --> 00:16:23.280 But if you make something that's more niche 459 00:16:23.280 --> 00:16:25.160 than they're gonna have fewer people they can share it with 460 00:16:25.160 --> 00:16:27.360 because there's fewer people where it's a gift 461 00:16:27.360 --> 00:16:29.320 with two who made it a gift. 462 00:16:29.320 --> 00:16:32.760 So if you make content for dentists, right? 463 00:16:32.760 --> 00:16:34.200 They can only share it with other dentists. 464 00:16:34.200 --> 00:16:35.560 They're not gonna share it with their wife. 465 00:16:35.560 --> 00:16:37.800 Maybe they will, I mean, if it relates to like, 466 00:16:37.800 --> 00:16:38.960 hey, this is why I'm working late, honey, 467 00:16:38.960 --> 00:16:39.960 listen to this podcast. 468 00:16:39.960 --> 00:16:41.440 But again, if it was about working late, 469 00:16:41.440 --> 00:16:43.360 then it's wider than dentists. 470 00:16:43.360 --> 00:16:45.040 Just like we wanna make an offer so good, 471 00:16:45.040 --> 00:16:46.720 people feel stupid, say no. 472 00:16:46.720 --> 00:16:48.680 We wanna make content so good, 473 00:16:48.680 --> 00:16:51.520 people feel obligated to share. 474 00:16:51.520 --> 00:16:55.280 And so this is my effort to try and bring some of that 475 00:16:55.280 --> 00:16:57.080 soul back to the podcast. 476 00:16:57.080 --> 00:16:58.960 And for those of you obviously who've been listening 477 00:16:58.960 --> 00:17:01.480 this whole time, I appreciate you so much. 478 00:17:01.480 --> 00:17:03.640 I mean, we obviously, we've continued 479 00:17:03.640 --> 00:17:05.240 to maintain a million downloads a month 480 00:17:05.240 --> 00:17:06.680 being a non-interview podcast, 481 00:17:06.680 --> 00:17:08.560 which is honestly pretty rare. 482 00:17:08.560 --> 00:17:11.840 All the biggest podcasts and also if you have a podcast, 483 00:17:11.840 --> 00:17:14.560 don't at least I don't compare myself to, 484 00:17:14.560 --> 00:17:17.000 I mean, I do compare myself to the, 485 00:17:17.000 --> 00:17:18.480 to the Rogan's believe me, he's better than I, 486 00:17:18.480 --> 00:17:19.320 that's not my point. 487 00:17:19.320 --> 00:17:21.880 But like, I aspire to have that level of growth, 488 00:17:21.880 --> 00:17:23.960 but if you have somebody who brings an audience 489 00:17:23.960 --> 00:17:25.600 with them every single episode, 490 00:17:25.600 --> 00:17:27.200 then you're always gonna have something that's gonna grow 491 00:17:27.200 --> 00:17:29.200 faster than if it's just you only grow, 492 00:17:29.200 --> 00:17:31.520 because like, if it's just you, 493 00:17:31.520 --> 00:17:35.200 then you only grow on the quality of the things you share. 494 00:17:35.200 --> 00:17:37.320 That is the only thing that grows your audience. 495 00:17:37.320 --> 00:17:39.520 If you bring other people on, 496 00:17:39.520 --> 00:17:42.040 then their audience becomes your audience. 497 00:17:42.040 --> 00:17:43.520 Some percentage will stick. 498 00:17:43.600 --> 00:17:46.280 And so that creates a much faster growth cycle. 499 00:17:46.280 --> 00:17:47.480 And if you're like, well, if that's what it is, 500 00:17:47.480 --> 00:17:48.640 then why don't you do that, Alex? 501 00:17:48.640 --> 00:17:50.200 Well, I'll explain the trade-off. 502 00:17:50.200 --> 00:17:52.760 You may listen to some interview podcasts. 503 00:17:52.760 --> 00:17:57.760 Interview podcasts tend to not position, 504 00:17:57.960 --> 00:18:00.560 the interviewer as an authority. 505 00:18:00.560 --> 00:18:03.200 Now, once you become Larry King, 506 00:18:03.200 --> 00:18:05.000 there's an element of that, 507 00:18:05.000 --> 00:18:08.080 your platform becomes so big that you get status 508 00:18:08.080 --> 00:18:13.040 by association, but the biggest authorities 509 00:18:13.040 --> 00:18:18.040 will still have higher influence over an audience 510 00:18:18.320 --> 00:18:20.720 than someone who curates, 511 00:18:20.720 --> 00:18:22.080 which is what I see to a large degree 512 00:18:22.080 --> 00:18:23.360 what an interviewer does. 513 00:18:23.360 --> 00:18:24.800 And as soon as they transition, 514 00:18:24.800 --> 00:18:26.720 you guys have seen this too. 515 00:18:26.720 --> 00:18:27.760 As soon as someone transitions to, 516 00:18:27.760 --> 00:18:31.040 hey, by the way, listen, by my thing, 517 00:18:31.040 --> 00:18:33.960 they don't have the same pull. 518 00:18:33.960 --> 00:18:35.640 And so if you have an interview podcast to be fair, 519 00:18:35.640 --> 00:18:37.160 I'm not saying there's anything wrong with that. 520 00:18:37.160 --> 00:18:39.840 Hey, anything's better than nothing, right? 521 00:18:39.840 --> 00:18:42.440 And it is a way faster way to grow your platform. 522 00:18:42.440 --> 00:18:44.800 But I have a friend who says this 523 00:18:44.800 --> 00:18:46.720 as his way of measuring audience. 524 00:18:46.720 --> 00:18:50.320 He says, but in motherfucking seats, 525 00:18:50.320 --> 00:18:52.640 he said, if you say you're showing up at one city, 526 00:18:52.640 --> 00:18:54.360 he said, who fucking shows up? 527 00:18:54.360 --> 00:18:56.160 Who gives a shit? 528 00:18:56.160 --> 00:19:00.560 And to me, that is the metric that I opt to most towards. 529 00:19:00.560 --> 00:19:03.840 And until I feel like the stuff that I have is good enough, 530 00:19:03.840 --> 00:19:05.480 I don't want to drop the pin. 531 00:19:05.480 --> 00:19:07.080 That is why I care so much about compounding. 532 00:19:07.080 --> 00:19:11.200 That's why I see media and audience as a accompanying asset, 533 00:19:11.200 --> 00:19:14.560 even though you have to continue to create media over time. 534 00:19:14.560 --> 00:19:17.720 It's also irreversible in that once someone recognizes you, 535 00:19:17.720 --> 00:19:19.320 you, they continue to know who you are. 536 00:19:19.320 --> 00:19:20.440 And so there's lots of benefits. 537 00:19:20.440 --> 00:19:23.040 So like, you might stop having a customer, 538 00:19:23.040 --> 00:19:25.760 but it's very rare for someone to, quote, leave your audience. 539 00:19:25.760 --> 00:19:26.720 Now they can hate you. 540 00:19:26.720 --> 00:19:27.560 That's different. 541 00:19:27.560 --> 00:19:29.720 But even at a most basic level, 542 00:19:29.720 --> 00:19:31.160 they still know who you are. 543 00:19:31.160 --> 00:19:32.920 And if someone knows who you are, 544 00:19:32.920 --> 00:19:34.280 they have a heart-likely divine 545 00:19:34.280 --> 00:19:36.760 that if someone doesn't know who you are. 546 00:19:36.760 --> 00:19:37.920 And so with that, I will leave you. 547 00:19:37.920 --> 00:19:41.000 This is the fifth of our little mini podcast audio first series. 548 00:19:41.000 --> 00:19:42.720 I have asked on every one of these podcasts for you guys 549 00:19:42.720 --> 00:19:44.480 to let me know if you like this. 550 00:19:44.480 --> 00:19:46.680 It would mean a lot to me, and it would help me, 551 00:19:46.680 --> 00:19:48.760 it would help me make this better for you. 552 00:19:48.760 --> 00:19:50.720 Share this, and that tells me in the stats 553 00:19:50.720 --> 00:19:52.120 that you liked it. 554 00:19:52.120 --> 00:19:54.520 Tag me if you liked it, 555 00:19:54.520 --> 00:19:56.400 because that also tells me that you liked it. 556 00:19:56.400 --> 00:19:58.720 So anyways, keeping amazing, 557 00:19:58.720 --> 00:20:00.640 shoot for the stars, all that stuff.