WEBVTT 1 00:00:00.000 --> 00:00:07.040 The most valuable skill that you can have in order is product first, then marketing, then sales. 2 00:00:07.040 --> 00:00:09.840 And so right now, if you know how to sell it's because you don't know how to market, you know how to 3 00:00:09.840 --> 00:00:14.880 build product. Welcome to the game where we talk about how to sell more stuff to more people in 4 00:00:14.880 --> 00:00:18.640 more ways and build businesses worth owning. I'm trying to build a billion dollar thing with 5 00:00:18.640 --> 00:00:23.040 acquisition.com. I always wish pesos, musking, Buffett had documented their journey, so I'm doing 6 00:00:23.040 --> 00:00:29.120 it for the rest of us. Please share and enjoy. There are three paths that every entrepreneur eventually 7 00:00:29.120 --> 00:00:33.520 has to take. You have the path of the pure artist, the path of the pure entrepreneur, and then a 8 00:00:33.520 --> 00:00:37.920 hybrid path. And I'll explain each one of them at high levels. So the path of the artist is the 9 00:00:37.920 --> 00:00:42.080 person who loves doing the thing. So you have an art form. Now your art form might be plumbing, 10 00:00:42.080 --> 00:00:46.320 your art form might be carpentry, your art form might be coding software, might be making content, 11 00:00:46.320 --> 00:00:50.080 it might be making media, it might be making wallets, right? It doesn't really matter what it is. 12 00:00:50.080 --> 00:00:55.600 You have something that you enjoy doing and you do it well. The second path on the extreme, 13 00:00:55.600 --> 00:00:59.600 so the all the way other side of it, is that you love business. Business is your art form and 14 00:00:59.600 --> 00:01:03.600 it doesn't really matter what business you're in. You just enjoy built, like your art is how you 15 00:01:03.600 --> 00:01:08.080 build a business around monetizing the thing. I would say that for me now, that is my path. That's 16 00:01:08.080 --> 00:01:11.600 what I enjoy the most. Like I love working with different portfolio companies, whether it's solar 17 00:01:11.600 --> 00:01:17.360 sales, mortgage sales, physical products, software, service businesses, brick and mortar chains, 18 00:01:17.360 --> 00:01:21.920 like we have all of those in our portfolio, and I love growing them all. And that's because the 19 00:01:22.000 --> 00:01:27.120 art for me is the actual business itself. The third path is a hybrid path and each of these 20 00:01:27.120 --> 00:01:33.520 paths can go all the way to the max limit here. So an example is Tobias Lutka, who is the founder 21 00:01:33.520 --> 00:01:41.040 and not CEO of Shopify. And so he loves building Shopify pages and he loves the coding and he loves 22 00:01:41.040 --> 00:01:46.240 the product. And so what he did was he found somebody else to actually be the art, where whose art 23 00:01:46.240 --> 00:01:50.160 was entrepreneurship and building businesses and have them build the business around him while he 24 00:01:50.160 --> 00:01:55.360 stayed focused on the main thing that he loved the most. And so the key here is that there is no 25 00:01:55.360 --> 00:01:59.600 right path. It's more about the path that works best for you during the season you're in because 26 00:01:59.600 --> 00:02:04.640 guess what? You can also change paths later. If you start in the artist path, you might transition 27 00:02:04.640 --> 00:02:07.760 to the hybrid path or you might start in the artist path and go all the way to the entrepreneur path. 28 00:02:07.760 --> 00:02:12.080 When I started, I really loved fitness. I was obsessed with fitness. I'd spent years, I'd 29 00:02:12.080 --> 00:02:16.960 competed in fitness. And so all I read all day besides a little bit of personal development was like 30 00:02:16.960 --> 00:02:21.280 macro counting, different ways to exercise, different programming stuff, like exercise, execution, 31 00:02:21.280 --> 00:02:25.120 different ways to layer workouts, program, all that kind of stuff. And I was obsessed with it, 32 00:02:25.120 --> 00:02:28.080 so much so that the people that I worked with were like, dude, if you don't start a gym, I'll pay 33 00:02:28.080 --> 00:02:31.600 for the gym so that you stop talking about this stuff. Because I was obsessed with it. The thing 34 00:02:31.600 --> 00:02:35.280 is is that as soon as I actually started a gym, I realized I enjoyed business even more than I 35 00:02:35.280 --> 00:02:38.880 enjoyed fitness. And so you may be surprised at what you start. Because when I started, I thought 36 00:02:38.880 --> 00:02:42.720 I'm just going to do the thing I love for the rest of my life. I started as an artist of fitness 37 00:02:42.720 --> 00:02:47.440 and I became an entrepreneur. But let me play out all three paths to their natural extremes. 38 00:02:48.480 --> 00:02:54.960 So the artist at its extreme is somebody who continues to not scale an enterprise around them 39 00:02:54.960 --> 00:03:00.080 and continues to do the thing at extraordinarily high levels. And so this ultimately goes from 40 00:03:00.080 --> 00:03:05.280 a commoditized price point to a premium price point to a luxury price point. So a commoditized 41 00:03:05.280 --> 00:03:08.640 price point is like, if you're a plumber, you do the same plumbing work everyone else does. 42 00:03:08.960 --> 00:03:13.200 And you do it. Now if you start doing it really well, word of mouth starts to build and you can 43 00:03:13.200 --> 00:03:17.040 start raising your prices because you are now a premium provider. You do better work, you do it 44 00:03:17.040 --> 00:03:21.440 faster. People come to you because they trust your work, right? Now at the highest level, 45 00:03:21.440 --> 00:03:25.680 it becomes luxury. You become so advanced in plumbing, you can do it for massive building, 46 00:03:25.680 --> 00:03:30.160 or you can do it for luxury homes and you make it look more neat and awesome and cool and whatever, 47 00:03:30.160 --> 00:03:36.080 right? And so in that instance, what happens is demand continues to increase for your services 48 00:03:36.160 --> 00:03:40.480 or your product. And so rather than increase the number of units you sell, you just increase 49 00:03:40.480 --> 00:03:45.680 the price. And so you still make significantly more money and a lot more profit in that business 50 00:03:45.680 --> 00:03:50.160 model, but it still keeps you doing the core thing, which is that you like plumbing, you like 51 00:03:50.160 --> 00:03:54.880 making wallets, you like being a carpenter, whatever. If you take that to its natural extreme, you can 52 00:03:54.880 --> 00:03:59.920 have incredible artists who sell their paintings for millions of dollars a piece and they don't have 53 00:03:59.920 --> 00:04:04.800 a massive organization around them because their main thing that they focus on every day is the art. 54 00:04:04.800 --> 00:04:08.800 Now there's obviously elements of entrepreneurship there because they make money, they transact, 55 00:04:08.800 --> 00:04:12.720 so by the definition, they are entrepreneurs, but their focus, their typograph, I would say, 56 00:04:12.720 --> 00:04:17.680 is that they are an artist first. The hybrid version is to buy a salute case, somebody who started 57 00:04:18.320 --> 00:04:22.640 as a shop developer who built the little website because he wanted to make something for 58 00:04:22.640 --> 00:04:25.440 it. I think it was a surfing company or something like that. He had some sort of physical 59 00:04:25.440 --> 00:04:28.560 products business that he didn't like the tools that are out there and he started making it, 60 00:04:28.560 --> 00:04:32.800 but then other people, because the product was so good, started asking for it. Now he could have 61 00:04:32.800 --> 00:04:36.160 just continued to raise the price of the thing, but at a certain point, especially with software, 62 00:04:36.160 --> 00:04:41.920 it made more sense to make himself Chief Product Officer rather than CEO, he was Chief 63 00:04:41.920 --> 00:04:46.400 of Product, and then hired a CEO and hired an executive team to build everything else around him. 64 00:04:46.400 --> 00:04:51.040 Now on the org chart because he's a big shareholder, he has a lot of sway, but on the actual chart 65 00:04:51.040 --> 00:04:55.600 itself, he might be over here not necessarily at the top because he doesn't want that life. 66 00:04:55.600 --> 00:05:01.840 And so you could go transition from the pure artist to the Tobias Luka model where you still do your 67 00:05:01.840 --> 00:05:06.560 art every day, but then you find the people. Now that does require skill because you need to have 68 00:05:06.560 --> 00:05:10.720 the perspective from which to make a judgment on who is good enough to be able to lead your company. 69 00:05:10.720 --> 00:05:13.760 Now that's where having outside advisors and things like that to help you find those people 70 00:05:13.760 --> 00:05:17.360 who you do trust, who already have that skill, who don't have a vested interest in your business, 71 00:05:17.360 --> 00:05:21.920 so they can give you the cleanest, purest advice. And the way that I layer that advice, 72 00:05:21.920 --> 00:05:26.160 at least way it so that you can think about this for yourself is that the highest level of 73 00:05:26.160 --> 00:05:30.880 advice is someone who has been there, done that themselves, and taken other people just like me to 74 00:05:30.880 --> 00:05:35.680 where I'm trying to go multiple times. A level below that is someone who has taken multiple people 75 00:05:35.680 --> 00:05:40.160 like me to where I'm trying to go. They haven't done it themselves. The level below that is someone 76 00:05:40.160 --> 00:05:45.440 who's only done it themselves and helps no one else. The level below that is someone who saw someone 77 00:05:45.440 --> 00:05:50.240 go all the way themselves or saw multiple other people go there themselves. Below that is only 78 00:05:50.240 --> 00:05:54.640 seeing one person. And below that is your mama uncle and your neighbor telling you there are two 79 00:05:54.640 --> 00:05:58.240 cents about how you should do business when they've never run a business and have no right to have 80 00:05:58.240 --> 00:06:03.600 an opinion. And so I rank my advice and how much weight I give it based on that scale. And ideally, 81 00:06:03.600 --> 00:06:09.520 I want to really only look at the top one or two for my sources of information. And the big caveat 82 00:06:09.520 --> 00:06:15.040 here, they either have to have a lined interest with me or no incentive at all. You just want to make 83 00:06:15.040 --> 00:06:19.920 sure that they aren't incentivized to tell you something else. That's the main key. Now, if you can 84 00:06:19.920 --> 00:06:24.000 look through that, you can leverage their experience to find the right people to fit inside of your 85 00:06:24.000 --> 00:06:31.040 business to build the business around you. Most of the nation real quick, if you are a business 86 00:06:31.040 --> 00:06:35.760 owner that has a big old business and wants to get to a much bigger business, going to $50, 87 00:06:35.760 --> 00:06:40.480 $100,000 plus, we would love to talk to you. And if you like that, and would like to hear more 88 00:06:40.480 --> 00:06:45.040 about it, go to acquisition.com and you can plan anywhere on the page and talk to one of our team and 89 00:06:45.040 --> 00:06:51.440 see if we can help you get there. The third path is that of the entrepreneur. That's the person 90 00:06:51.440 --> 00:06:56.160 whose art form is the businesses. And so rather than thinking about making wallets and making more 91 00:06:56.160 --> 00:07:00.800 wallets, the business itself is the painting. And so they will have multiple paintings in their 92 00:07:00.800 --> 00:07:06.080 career that as they develop as an artist, so too does their expression of their art. And so the 93 00:07:06.080 --> 00:07:10.720 types of businesses they build get bigger, more complex, more innate or simpler. It just depends 94 00:07:10.720 --> 00:07:15.840 on what type of entrepreneur they are. And so for me, I'll tell you right now, the amount of 95 00:07:15.840 --> 00:07:21.360 businesses that I started. I started a non-profit online training business. I switched to a 96 00:07:21.360 --> 00:07:25.680 for-profit training business. And then I switched to a brick and mortar gym. Then I had a chain 97 00:07:25.680 --> 00:07:30.960 of gyms. Then I had a gym turnaround business. I had a car practice agency. I had a dental agency. 98 00:07:30.960 --> 00:07:35.840 I had a corporate wellness contract thing that I did. I've had an e-commerce business that sold 99 00:07:35.840 --> 00:07:40.240 physical products. I had a software business, software service B2B, and now I have private equity 100 00:07:40.800 --> 00:07:46.960 firm. So those are the businesses that I directly have founded. And I'm 33. And so as you develop as 101 00:07:46.960 --> 00:07:53.200 an entrepreneur, your art will change. And it will be continually a changing expression of who you 102 00:07:53.200 --> 00:07:59.600 are. So the biggest question is, which of the three are you? If you love the actual doing of the 103 00:07:59.600 --> 00:08:04.560 business, the thing you do, the product or service you deliver, that is your art, then I would say 104 00:08:04.560 --> 00:08:08.960 start with the path of the artist. And if you're good, because if you really do love it, you should 105 00:08:08.960 --> 00:08:12.800 be able to beat other people who don't love it. And so you should naturally, through word of mouth, 106 00:08:12.800 --> 00:08:17.360 be able to get more demand than you have supply of time. At that point, you'll have to start 107 00:08:17.360 --> 00:08:21.120 making the decision. Am I going to go hybrid or are going to go all the way entrepreneur? 108 00:08:21.120 --> 00:08:24.320 If you're starting out right now and you just love entrepreneurship in general and you don't really 109 00:08:24.320 --> 00:08:29.120 care what you sell, you just want to make money, then you probably more the entrepreneur path. 110 00:08:29.120 --> 00:08:32.320 You just want to hustle, you want to figure out needs in the marketplace, figure out stuff that 111 00:08:32.320 --> 00:08:36.640 people are buying, connect the two dots, build the organization around it, put an operator in charge, 112 00:08:36.640 --> 00:08:43.120 and then let it run and make cash flow. That's the entrepreneur path. The middle path, the hybrid 113 00:08:43.120 --> 00:08:48.000 path is usually someone who starts as an artist and then becomes that because they still want to build 114 00:08:48.000 --> 00:08:51.360 the beginner prize, but they don't want to sacrifice the thing that they love the most, 115 00:08:51.360 --> 00:08:56.560 which is actually building the product. And so this little product thing, as a side note, 116 00:08:56.560 --> 00:09:02.480 could also be marketing. It could also be finance. It could also be like if you like a certain 117 00:09:02.480 --> 00:09:06.720 component of the business, you can own that component of the business and have someone build it 118 00:09:06.720 --> 00:09:10.560 around you. And so I use the Tobias like an example because it's probably the most natural for 119 00:09:10.560 --> 00:09:13.440 many people to understand, but you could love a different function of the business. You could just 120 00:09:13.440 --> 00:09:18.000 be the guy who loves fundraising and you just love raising funds and that's how you build your business 121 00:09:18.000 --> 00:09:22.480 and you get everybody else around you to run it, or you love marketing. Steve Jobs was a mostly 122 00:09:22.480 --> 00:09:28.800 marketing, well, Steve Jobs was a go, you could do everything, but like, bad example. But he was a 123 00:09:28.800 --> 00:09:33.440 marketing genius nonetheless. And so the idea is that you will still leave your thumbprint on 124 00:09:33.440 --> 00:09:36.320 different aspects and be more heavily involved in different departments, the ones that you love the 125 00:09:36.320 --> 00:09:41.760 most. But at this point, you do it by choice rather than do it by obligation. And so identifying 126 00:09:41.760 --> 00:09:46.160 which one you are is do I love the thing or do I love the business of doing the thing and then 127 00:09:46.160 --> 00:09:50.880 walking that path down? And the best news is you can always change your mind later. The most 128 00:09:50.880 --> 00:09:58.560 valuable skill that you can have in order is product first, then marketing, then sales. And so right 129 00:09:58.560 --> 00:10:01.360 now if you know how to sell it's because you don't know how to market, you know how to build product. 130 00:10:02.000 --> 00:10:05.600 If you know how to market, then you can sell lots of stuff, but you're only going to sell it once 131 00:10:05.600 --> 00:10:09.200 because the product's usually not that good. If you know how to sell product, you will get more 132 00:10:09.200 --> 00:10:12.880 promotion from your customers than anything else. And that is ultimately what scales the enterprise. 133 00:10:12.880 --> 00:10:17.040 Marketing can scale anything to a point. And then what happens is the marginal cost of getting 134 00:10:17.040 --> 00:10:21.440 the next customer continues to get up and up. And if you don't get word of mouth referrals 135 00:10:21.440 --> 00:10:25.280 from customers who use your product, then eventually it becomes untenable and your company will 136 00:10:25.280 --> 00:10:29.760 plateau. And so the key to building a very, very big thing that lasts for a very long time is 137 00:10:29.760 --> 00:10:33.440 having exceptional product. This stuff is stuff that I used to hear all the time when I was 138 00:10:33.440 --> 00:10:38.640 doing a entrepreneur. And I get that you're like, sure, but how do I make money? And you know what? 139 00:10:38.640 --> 00:10:43.040 If you just sell shit, you can make money. If you market shit well, you can make even more money. 140 00:10:43.040 --> 00:10:47.120 But if you learn product and what happens for most entrepreneurs is they actually go in that direction. 141 00:10:47.120 --> 00:10:50.320 They just learn how to sell shit because that's the easiest skill to learn. You can learn it in 142 00:10:50.320 --> 00:10:54.640 a couple of weeks. Learn how to market takes a little longer. You learn how to write copy. It's really 143 00:10:54.640 --> 00:10:59.440 just translating the persuasion of sales into different types of media and selling to many people 144 00:10:59.440 --> 00:11:05.200 at once. Product, if done properly, gets people to promote on your behalf. And there's way more 145 00:11:05.200 --> 00:11:09.120 of them than there are of you. And so the highest leverage thing you can do is make an exceptional 146 00:11:09.120 --> 00:11:14.400 product that other people want to promote for you. And so my first real big experience with this 147 00:11:14.400 --> 00:11:18.960 was the book. So $100,000 offers is a book is 99 cents. You can get on Amazon. That book continues 148 00:11:19.200 --> 00:11:24.640 right now. It's 25,000 copies a month with no paid ads. It just sells 25,000 copies a month. 149 00:11:24.640 --> 00:11:28.400 And the reason for that and a lot of people who knew me from high school or knew me from college are 150 00:11:28.400 --> 00:11:33.120 like, dude, it's so crazy. Some guy I know from work is like, dude, you got to read this book. 151 00:11:33.120 --> 00:11:37.600 And it was your book. And the thing is, it's like, that is how those book sales happen. 152 00:11:37.600 --> 00:11:43.600 And so if you can get your product to be that way or your service to be that way, that amazing, 153 00:11:43.600 --> 00:11:46.720 then you never need to spend another dollar on marketing ever again because people do it for you. 154 00:11:46.720 --> 00:11:50.240 And that ultimately drives the most margin and allows you to scale the enterprise in a compounding 155 00:11:50.240 --> 00:11:54.560 fashion. Because if you don't scale it that way, then all you have to do is consistently spend 156 00:11:54.560 --> 00:11:59.360 more money on ads, hire more outbound people, get more affiliates. But if you get it from the product 157 00:11:59.360 --> 00:12:04.720 driven perspective first, where you have more people who send you business than people who leave 158 00:12:04.720 --> 00:12:08.800 just based on how good your product is, that continues to compound to the end of time. 159 00:12:08.800 --> 00:12:12.640 And that's the business you want to build. But to be clear, you can make money doing any of them, 160 00:12:12.640 --> 00:12:22.640 be making the biggest money doing that one.