WEBVTT 1 00:00:00.000 --> 00:00:07.280 When I was 17, I was making just over $6 an hour working at a smoothie king. At 21, I got to 2 00:00:07.280 --> 00:00:15.680 $30 an hour working at a consulting firm. At 23, I was able to get to $250 an hour when I started 3 00:00:15.680 --> 00:00:24.960 my own business, my first gym. At 26, I got to $2,500 an hour, so another 10x. And then at 28, 4 00:00:24.960 --> 00:00:30.640 I got to $18,000 an hour and I've continued to grow from there. I want to walk you through three 5 00:00:30.640 --> 00:00:35.360 different ways that you can 10x your income for real. The first way to 10x your income is through 6 00:00:35.360 --> 00:00:39.760 something called arbitrage. An arbitrage is simply buying and selling assets between 7 00:00:39.760 --> 00:00:44.320 two different markets and making the difference. And that's how you make a profit. And so arbitrage 8 00:00:44.320 --> 00:00:50.080 is just a fancy word that means buying and selling between two different markets and capitalizing 9 00:00:50.080 --> 00:00:54.960 on the difference in price for the same asset. Now, there's a lot of ways that you can arbitrage. 10 00:00:54.960 --> 00:01:00.800 So this applies for both businesses and employees. Now, if you've been in import export businesses, 11 00:01:00.800 --> 00:01:06.480 a lot of them function off of arbitrage. The entire financial sector is almost built on arbitrage, 12 00:01:06.480 --> 00:01:11.920 which is can I buy a stock for a certain price and then sell it later? And that's where you have 13 00:01:11.920 --> 00:01:16.640 options trading and all these other types of things that banks and financial institutions will 14 00:01:16.640 --> 00:01:22.720 make hundreds of billions of dollars a year on. And so at the most basic level, all business 15 00:01:22.720 --> 00:01:27.520 actually comes down to some sort of arbitrage because even if you have a skill difference from someone 16 00:01:27.520 --> 00:01:32.240 else, you have an information advantage. And so the arbitrage you have is that it caught you know 17 00:01:32.240 --> 00:01:37.600 how to do something for less than it costs someone else to do it. And so they pay you to do that thing 18 00:01:37.600 --> 00:01:42.560 and the arbitrage between what it costs you and what you charge them is how you make a profit. 19 00:01:42.560 --> 00:01:47.600 And so arbitrage is absolutely at the core of everything economic where babies basically profit 20 00:01:47.600 --> 00:01:53.120 is created. The best part about arbitrage is that you can employ it at all levels of personal 21 00:01:53.120 --> 00:01:57.360 income. So even if you're just working a job versus you make a ton of money in your business, 22 00:01:57.360 --> 00:02:01.120 there are levels of it. And I would encourage you to start when you have nothing because you 23 00:02:01.120 --> 00:02:05.440 basically arbitrage as a way of thinking is like how well I live my life in a way that I always have 24 00:02:05.440 --> 00:02:11.600 this this differential between what something costs me and what I can sell it for in the future. 25 00:02:11.600 --> 00:02:17.920 So number one on a personal level you can buy cheap locally wherever you're at and then sell 26 00:02:17.920 --> 00:02:23.280 whatever you have like your services even to a more expensive market which is why the number one 27 00:02:23.280 --> 00:02:30.320 money making skill in 2024 is English. And so if you live in a foreign country and you live in 28 00:02:30.320 --> 00:02:34.880 Thailand or you live in Malaysia you live in Vietnam whatever you have something where it's very 29 00:02:34.880 --> 00:02:41.920 cheap to live. And then you can sell your services globally at the most expensive market rate which 30 00:02:41.920 --> 00:02:47.360 would be probably Europe and the US. Then you could in a real way have this big arbitrage between 31 00:02:47.360 --> 00:02:53.280 what you make and what you spend. And so for example in Thailand the median income is about $2,700 32 00:02:53.280 --> 00:02:59.360 per year. If you can sell your services even at the US median income which is close to like 50 or 33 00:02:59.360 --> 00:03:07.520 $60,000 you're looking at more than a 10X increase between what you make and what you spend. And wealth 34 00:03:07.520 --> 00:03:11.360 which a lot of people don't understand wealth is a ratio it's not a number it's how much you spend 35 00:03:11.360 --> 00:03:16.000 relative to how much you make. So you can make $50,000 a month or $500,000 a month. If you spend more 36 00:03:16.000 --> 00:03:20.880 than that you're going to feel poor. Now if you make $5,000 a month and you spend 500 you're going to 37 00:03:20.880 --> 00:03:25.520 feel rich because you always have more than enough. And the key about wealth is having more than you 38 00:03:25.520 --> 00:03:30.800 need. And so you can either make more or need less. And so this arbitrage is based on pushing more 39 00:03:30.800 --> 00:03:35.840 towards needing less doing more with what you have. Now on a business setting you can also think about 40 00:03:35.840 --> 00:03:39.680 this where let's say you want to still live in the US or you want to live in a more developed area 41 00:03:39.680 --> 00:03:46.720 which of course I do. You can then still pay for the hard cost of your services remotely or in 42 00:03:46.720 --> 00:03:50.640 different markets. Now you can do this on a micro level like you rent something in a cheaper side of 43 00:03:50.640 --> 00:03:55.280 town but you can do business further away in a more expensive part of town. But on a macro level 44 00:03:55.280 --> 00:04:01.680 you can sell services let's say in the US but then you source your labor overseas. Now an easy 45 00:04:01.680 --> 00:04:05.760 arbitrage here is like even if you just look at Canada there's like a 30% arbitrage that you can 46 00:04:05.760 --> 00:04:10.640 get for skill because of the exchange rate but the cost of living the way that people live there 47 00:04:10.640 --> 00:04:15.120 is about the same in terms of Canadian dollars versus US dollars. So it's an easy win. Now that's not 48 00:04:15.120 --> 00:04:20.480 a 10x but you can actually get a 10x differential in talent where you would normally spend $5,000 49 00:04:20.480 --> 00:04:25.040 a month US to get a certain level of talent where you can sometimes spend $500 a month in the 50 00:04:25.040 --> 00:04:30.800 Philippines or Thailand etc to get the same level of individual in terms of education. So personally 51 00:04:31.440 --> 00:04:38.000 right you have a couple options. So one is your income stays the same but you decrease your 52 00:04:38.000 --> 00:04:44.000 expenses by moving geographies. So you change where you live. The other way is that you can 53 00:04:44.000 --> 00:04:50.160 live somewhere that's normal it depends on where you're starting right and then sell to a different 54 00:04:50.160 --> 00:04:55.760 geography overall. Now again there's an interesting story that I'll tell you. When I had my really nice 55 00:04:55.760 --> 00:05:01.360 mention in Austin this is years ago I noticed that when people came to my house to bid services I was 56 00:05:01.360 --> 00:05:06.640 like I feel like this is way more expensive than a comparable service that I've paid for in the past 57 00:05:06.640 --> 00:05:09.280 and then I started talking to my neighbors about it and they're like oh that's just called the 58 00:05:09.280 --> 00:05:13.120 zip code tax and I was like what does that mean? They're like you have a nice house people would just 59 00:05:13.120 --> 00:05:17.360 raise the prices because they know you can afford it. Now I was like oh well that sucks. Now I'll 60 00:05:17.360 --> 00:05:21.680 tell you a real example of a company that I had actually invested in. I live in a high-rise building 61 00:05:21.680 --> 00:05:27.680 now and there was a guy who met me in the elevator and he literally elevator pitched me for his 62 00:05:27.680 --> 00:05:31.680 business idea. I thought the business idea was actually really interesting and he had a prototype 63 00:05:31.680 --> 00:05:35.120 he pulled it up on his phone literally I mean I love high up so there's a decent amount of time 64 00:05:35.120 --> 00:05:39.200 in the elevator. I ended up going to dinner with him and I ended up investing in the business 65 00:05:39.200 --> 00:05:42.400 and it's actually one of our portfolio companies. I asked him though because I knew what the revenue 66 00:05:42.400 --> 00:05:47.200 the business was I was like how can you afford to live here and he said I can't afford not to live 67 00:05:47.200 --> 00:05:53.600 here because I get to meet people like you and so he was way living above his means but the arbitrage 68 00:05:53.600 --> 00:05:58.560 that he was basically getting into his network arbitrage is that he was basically overpaying to 69 00:05:58.560 --> 00:06:04.000 have access to the best you know the people who had the most money in that specific market. I still 70 00:06:04.000 --> 00:06:10.240 am not the biggest fan of that because it's so risky but he ended up funding his entire growth 71 00:06:10.400 --> 00:06:15.200 of the software company based on people that he met in our building and so I find that kind of 72 00:06:15.200 --> 00:06:18.960 interesting and he ended up proving it out and the company's actually really successful so it's 73 00:06:18.960 --> 00:06:23.360 definitely one of those like I wouldn't do it this way but people have done it and it obviously 74 00:06:23.360 --> 00:06:28.640 worked and so these personal income things I still think completely applied a business because 75 00:06:29.280 --> 00:06:34.400 the only way you can go aggressive in businesses being able to reinvest capital as you grow and 76 00:06:34.400 --> 00:06:38.320 if you're just making income the amount of capital that you have to get aggressive with is proportional 77 00:06:39.280 --> 00:06:43.360 to what you make versus what you spend and so it's like if you don't know how to make more 78 00:06:43.360 --> 00:06:49.920 just spend way less like when I started that my first gym I was first living on the floor 79 00:06:49.920 --> 00:06:53.920 but even before that when I made the transition when I wasn't sure where I was going to have the 80 00:06:53.920 --> 00:06:59.360 gym I lived in a spare bedroom for $400 a month and so like I bring this up because it's not 81 00:06:59.360 --> 00:07:03.760 like I was bawling out and mind you I had money saved up by it $50,000 saved up and I was making 82 00:07:03.760 --> 00:07:09.120 at the time about $4,000 a month from training people online before I made my transition to my gym 83 00:07:09.120 --> 00:07:15.840 I strongly encourage you to employ some level of arbitrage within your life either in your business 84 00:07:15.840 --> 00:07:20.080 or personally or both and you can do that geographically you can do it via network or you can 85 00:07:20.080 --> 00:07:26.240 just do it by massively decreasing your spend by spreading your expenses between more people which 86 00:07:26.240 --> 00:07:33.040 is how I just just shared a bedroom with somebody and only bought food from Costco and that was the 87 00:07:33.040 --> 00:07:37.120 only food that I ate so the second way that you can 10x your income is through 88 00:07:37.840 --> 00:07:43.760 increasing the number of people who know who you are now the way to do that is to give away 89 00:07:43.760 --> 00:07:50.160 amazing stuff for free all right and so giveaways is one of the strongest I mean they're so strong 90 00:07:50.160 --> 00:07:55.200 that they're literally regulated by the government all right so like you can't just do giveaways 91 00:07:55.200 --> 00:07:58.800 in any old fashion and like that's a really good telltale sign that something works is that 92 00:07:58.800 --> 00:08:03.680 the government steps in because it's so powerful that people abuse it and so the two most powerful 93 00:08:03.680 --> 00:08:09.360 words in marketing are free and new and so when you have a new giveaway you want to have it be 94 00:08:09.360 --> 00:08:15.040 something free now I have been able to 10x my income multiple times my life like I said earlier 95 00:08:15.840 --> 00:08:20.720 and I have done it basically in every business through some sort of giveaway and I'll explain 96 00:08:20.720 --> 00:08:26.080 what that is so the first massive increase when I talked about was actually through something that 97 00:08:26.080 --> 00:08:30.800 we call the six-week challenge all right which was where we actually just gave away six weeks of 98 00:08:30.800 --> 00:08:35.440 service and accountability and workouts and nutrition planning and everything two people now no 99 00:08:35.440 --> 00:08:39.040 one else in my market could compete against that because they were just giving trials 14 days 100 00:08:39.040 --> 00:08:43.680 sometimes 21 days and it was just like workouts or it was just access to the gym I gave away a full 101 00:08:43.680 --> 00:08:47.920 program now I had a way of structuring it so that they would pay but then they'd get the money back 102 00:08:47.920 --> 00:08:52.960 if they did it and that encouraged people to to give it a shot but it was it was what took the 103 00:08:52.960 --> 00:08:57.920 gym to a completely different stratosphere and just trying to do traditional marketing just didn't 104 00:08:57.920 --> 00:09:02.400 really work that well or at least I got traditional results which were mediocre now the next 105 00:09:02.960 --> 00:09:06.880 big thing that I did was in gym launch I wrote the gym launch secrets book and you'll notice this 106 00:09:06.880 --> 00:09:11.760 is a common theme for me is that I write books before I get into any market and I do that for a 107 00:09:11.760 --> 00:09:16.080 couple reasons one is that when I write a book before I get into a market the writing process itself 108 00:09:16.080 --> 00:09:20.320 is actually a learning process for me and so it's like how much can I learn how much can I consolidate 109 00:09:20.320 --> 00:09:24.320 and synthesize information to put it into really coherent way because I think writing is one of 110 00:09:24.320 --> 00:09:28.160 the best ways of learning how to think the gym launch secrets book the reason this was so crazy 111 00:09:28.160 --> 00:09:32.320 is that it outlines everything that we did to turn around gyms and I was so afraid to publish this 112 00:09:32.320 --> 00:09:35.840 because I was like oh my god it's gonna be all my secrets everyone's gonna have it but then this 113 00:09:35.840 --> 00:09:40.720 is where a lot of the giveaway the secrets sell the implementation mindset came from and so you 114 00:09:40.720 --> 00:09:45.040 should never be afraid of the things that you're giving away this process of doing these types of 115 00:09:45.040 --> 00:09:49.920 giveaways is what generates huge amounts of demand and so fundamentally if you're gonna grow a 116 00:09:49.920 --> 00:09:53.680 business you either got to get way more customers if we were to 10x it's like we had to 10x the 117 00:09:53.680 --> 00:09:57.040 customers we got to 10x how much they're worth and I'll get to that later this one is one of the 118 00:09:57.040 --> 00:10:00.880 most effective ways and I'll give you a couple more examples so when I started my software company 119 00:10:00.880 --> 00:10:08.800 Alan what I did was I gave away and this is crazy I gave away basically unlimited coaching and 120 00:10:08.800 --> 00:10:13.520 training like a whole course that most people would charge a gazillion dollars for I just gave it 121 00:10:13.520 --> 00:10:19.440 away for anybody who used my software with Alan we were able to go from zero to $1.7 million per 122 00:10:19.440 --> 00:10:25.520 month all right just using this within six months most people were trying to charge agency owners 123 00:10:25.520 --> 00:10:30.160 like show them how to sell customers how to how to package their offers how to run ads I did all 124 00:10:30.160 --> 00:10:35.760 of that for free for anyone who just used my software and so that was like a crazy offer those 125 00:10:35.760 --> 00:10:41.200 are crazy give away and that's what generated a ton of demand inbound for prestige labs which 126 00:10:41.200 --> 00:10:44.960 was my supplement company the big thing that I gave away there was the entire what I called 127 00:10:44.960 --> 00:10:48.720 supplement selling secrets I used to say secrets a lot I don't say anymore but I eventually 128 00:10:48.720 --> 00:10:54.560 called it S3 which was the selling system for supplements and so this is something that had made me 129 00:10:54.560 --> 00:10:59.040 I mean so much money in my gym career that it took me two years to release because I was like I 130 00:10:59.040 --> 00:11:05.040 held it so close to my chest but basically instead of selling this I just gave it away and then I 131 00:11:05.040 --> 00:11:08.800 just encouraged people to sell my product now the thing is is that people could take this and 132 00:11:08.800 --> 00:11:13.920 many people did they just took the selling system and then just sold other supplements but I had 133 00:11:13.920 --> 00:11:19.680 built prestige to have specific technical components into how the business was operated that made it 134 00:11:19.680 --> 00:11:24.800 made it so much more advantageous for people who went through this training to use my supplements so 135 00:11:24.800 --> 00:11:29.600 it's like I show people how to sell massive bundles how to sell subscriptions all of these things and 136 00:11:29.600 --> 00:11:34.640 I priced it so that anybody who would sell would be able to have a discount far below what's 137 00:11:34.640 --> 00:11:37.760 them look you get for retail and so it was specifically made for people who were going to go 138 00:11:37.760 --> 00:11:43.040 through this free giveaway and you're like man did he stop there no because with school like right 139 00:11:43.040 --> 00:11:48.720 now for example we're giving a hundred thousand dollars away or a cyber truck to the person who uses 140 00:11:48.720 --> 00:11:54.640 the software right and and builds the biggest group within a 30 day period and we've done three 141 00:11:54.640 --> 00:11:57.840 these so far and I think we're doing another one here in December the thing here is that this is 142 00:11:57.840 --> 00:12:02.480 what generate a ton of demand on the front end and so it's like if you want to if you want a 10X 143 00:12:02.480 --> 00:12:07.200 you can't do an incremental change you have to do an order of magnitude difference and so that 144 00:12:07.200 --> 00:12:13.840 comes from giving away actual tangible value real stuff like people were charging $10,000 $20,000 145 00:12:13.840 --> 00:12:18.240 for what I was giving away here for free the thing is it's not like oh I just like just like tossed it 146 00:12:18.240 --> 00:12:22.800 up I actually had the support the same way somebody who ran a business that had like a coaching 147 00:12:22.800 --> 00:12:27.840 business would run it except I just did it for free and with prestige labs same thing we had 148 00:12:27.840 --> 00:12:33.040 reps who'd go out call the gym owners up train their teams on how to sell the product all 149 00:12:33.040 --> 00:12:37.120 stuff that you'd normally charge for we did for free gym lunch secret six week challenge the 150 00:12:37.120 --> 00:12:41.680 hundred thousand dollars like all of these things had real costs that we were willing to incur 151 00:12:41.680 --> 00:12:46.080 because it generated so much more demand that it was offset with the amount of customers that we 152 00:12:46.080 --> 00:12:50.400 could bring in the door and the only way that you can do a giveaway long term is that you have to 153 00:12:50.400 --> 00:12:53.760 have some sort of product that you know you're going to sell in the back and like you have to 154 00:12:53.760 --> 00:12:58.000 still have a monetization system that makes sense like it's not as to lead to something so like 155 00:12:58.000 --> 00:13:02.320 here it's like cool this led to the memberships right and then gym lunch secret led to gym lunch 156 00:13:02.320 --> 00:13:07.200 which is the licensing right and then Allen led to the software prestige labs led to the products 157 00:13:07.200 --> 00:13:11.280 I gave away this thing that was really valuable but then it led to we monetize the different way 158 00:13:11.280 --> 00:13:14.880 which I've said this before but my favorite business model in the entire world is look at 159 00:13:14.880 --> 00:13:21.360 what everyone else is buying make it better make it free monetize another way even with acquisition 160 00:13:21.360 --> 00:13:27.200 .com I wrote both the books that are free and I just just recently released a scaling roadmap 161 00:13:27.760 --> 00:13:32.320 which you know most people charged a gazillion dollars for it's fourteen hours and every 162 00:13:32.320 --> 00:13:36.880 single stage has 30-ish pages of what you need to do to solve the problems to get to the next level 163 00:13:36.880 --> 00:13:40.960 and it's free you just go get it it's on the site but the whole point here is that this is what 164 00:13:40.960 --> 00:13:45.840 allows you to provide outsized value to people and it's I bring this up and I show each of these 165 00:13:45.840 --> 00:13:50.320 examples right because people don't believe me or at least they I see the giveaways people do and 166 00:13:50.320 --> 00:13:54.240 they're just lame they either don't do it because they're afraid of giving too much value away 167 00:13:54.240 --> 00:13:58.160 or they give away something that just doesn't have a lot of value that the key is that there has to 168 00:13:58.160 --> 00:14:02.800 be some horse reward of hard costs that people can actually realize like oh this is real value that 169 00:14:02.800 --> 00:14:08.000 I'm getting for free because otherwise you don't have reciprocity and the key like the key to a lot 170 00:14:08.000 --> 00:14:12.960 of this at least in in the US with an art culture is reciprocity is key in a lot of human cultures 171 00:14:12.960 --> 00:14:18.800 we want to stat we want to jam value and someone else's a wallet so that they then have to transfer 172 00:14:18.800 --> 00:14:22.560 it back to us in the form of money later the big key here is that you got to be willing to wait 173 00:14:23.360 --> 00:14:27.760 but if you can do that the cool thing is is that so few people have that level of discipline 174 00:14:27.760 --> 00:14:31.920 this strategy will literally always be available I can shout out from the rooftops and still 95% 175 00:14:31.920 --> 00:14:35.360 of you aren't going to do it and so if you're like how do I come up with this thing that I give away 176 00:14:35.360 --> 00:14:40.880 for free in $100 million leads I wrote a whole chapter on this engage your leads with offers and 177 00:14:40.880 --> 00:14:46.080 lead magnets and I basically break down exactly what you need to do and how to think about lead 178 00:14:46.080 --> 00:14:50.880 magnets in general how they generate more money for you and kind of the different types of lead 179 00:14:50.880 --> 00:14:54.400 magnets that you can reveal a problem you can do free trial you can do a one step in a multi-step 180 00:14:54.400 --> 00:14:59.040 process each ones of these are different versions of this so far if we're to look at this as our 181 00:14:59.040 --> 00:15:04.320 as our as our little rubric here right six-week challenge is going to be essentially a free step 182 00:15:04.320 --> 00:15:08.720 in a multi-step process because most people who work out for six weeks want to work out more later 183 00:15:08.720 --> 00:15:12.720 right so it's like okay cool you're gonna you're gonna need this other thing later uh the gym 184 00:15:12.720 --> 00:15:17.920 launch secrets this one was more about revealing a problem so it shows all the things that you 185 00:15:17.920 --> 00:15:21.120 need to do and then people are like oh my god this is so overwhelming there's a lot of things I 186 00:15:21.120 --> 00:15:25.920 need to do fix my gym it'd be nice if I had help and so then they they take the next natural step 187 00:15:25.920 --> 00:15:30.880 with Alan same thing now with this business the the way that this model was kind of structured 188 00:15:30.880 --> 00:15:35.440 is almost like a freemium where again you solve a problem for someone you help them grow their 189 00:15:35.440 --> 00:15:38.880 agency and then they're going to need the software even more and the way the software is structured 190 00:15:38.880 --> 00:15:43.120 it built as they grew prestige labs the basically the problem that they had is they didn't have a 191 00:15:43.120 --> 00:15:46.960 supplement sale system once they implemented the supplement sale system the next problem they 192 00:15:46.960 --> 00:15:51.680 would naturally have is what supplements do I sell which did we have prestige labs right and so 193 00:15:51.680 --> 00:15:56.160 in each of these cases you want to think about can I reveal a problem for my prospect can I give 194 00:15:56.160 --> 00:16:00.640 them a trial of the thing I have or is it one step in a multi-step process and I give examples of 195 00:16:00.640 --> 00:16:04.480 these and then you can have different delivery mechanisms which I won't get into but you can check 196 00:16:04.560 --> 00:16:09.840 that out there so I'm going to put something to rest that you're probably worried about I was so 197 00:16:09.840 --> 00:16:14.240 frightened to launch Jamont secrets the book because it was like this is everything that I learned 198 00:16:14.240 --> 00:16:18.640 I was like this is like my life's work in this book it's 400 pages of how to just run a gym like 199 00:16:18.640 --> 00:16:23.280 it's it's every it's like the trainer ads the salesman ads the training the scripts how to set up 200 00:16:23.280 --> 00:16:28.160 your lobby like the the the the upsell process the different pricing packages how to do semi-private 201 00:16:28.160 --> 00:16:32.320 how to do larger like everything was in there and I will say this like at a lot of big decision 202 00:16:32.320 --> 00:16:36.560 points my life like Leila kind of like put her hand in my shoulder and she's like if you're 203 00:16:36.560 --> 00:16:42.640 afraid that it's too good it's probably the right thing to give away and I remember being like 204 00:16:42.640 --> 00:16:47.280 all right like here goes nothing this could destroy us but the thing that ended up happening is 205 00:16:47.280 --> 00:16:52.880 two things one is that all my sales team was like can you give away more books anybody who's read 206 00:16:52.880 --> 00:16:57.840 the book is like so bought into our method our way of doing things like the immediately like we 207 00:16:57.840 --> 00:17:01.440 don't have to sell them on the Jamont's way they just like they're like can we just I just need your 208 00:17:01.440 --> 00:17:03.920 help I want to do it right I want to do it right the first time I don't want to try and like 209 00:17:03.920 --> 00:17:08.480 trial and error this thing which was the goal but the sales guy saying that I was like okay well 210 00:17:08.480 --> 00:17:12.160 that's super encouraging and the second thing I'll tell you later so the third way to 10x 211 00:17:12.160 --> 00:17:17.920 year income is through making customers worth more which is going to come down to in the fastest 212 00:17:17.920 --> 00:17:24.880 way possible pricing and so I talk about price a ton and it's because it's the most powerful 213 00:17:24.880 --> 00:17:29.680 lever on profit and if you're in the game to make more money then you should try and raise it 214 00:17:29.680 --> 00:17:34.640 and so the nice thing with this is that you can do this again whether you're an employee or 215 00:17:34.640 --> 00:17:38.640 you're a solar printer or you're at a you know super big business it works the same way so you 216 00:17:38.640 --> 00:17:44.320 got your pricing lever as an employee you basically have three options all right so number one 217 00:17:44.320 --> 00:17:49.600 is you can simply ask for more money now I don't recommend doing that because you're not going to 218 00:17:49.600 --> 00:17:55.360 10x year income that way so then it's like okay so if I just ask for more ask okay I might get 219 00:17:55.360 --> 00:17:59.760 a little bit of a raise if I'm good if I'm not they'd might just say no the way to really ask 220 00:17:59.760 --> 00:18:06.640 for it is to take on more risk and so you will be compensated for the amount of value create 221 00:18:06.640 --> 00:18:12.480 your ability to negotiate how replaceable that skill is and most importantly the risk you're 222 00:18:12.480 --> 00:18:17.600 willing to take on and so a business owner gets paid more than the employees in the business 223 00:18:17.600 --> 00:18:22.480 because the business owner takes on more risk right Eduardo Savarin who started who is the first 224 00:18:22.480 --> 00:18:27.680 investor in Facebook he put $30,000 up and that was worth a gazillion dollars today he really 225 00:18:27.680 --> 00:18:33.200 didn't do much besides providing the first $30,000 of capital for the servers for Facebook to begin 226 00:18:33.200 --> 00:18:37.680 and so he took on risk and as a result of that despite not really doing any work he was able to 227 00:18:37.680 --> 00:18:43.440 make a significant amount of money now as an employee what does taking on risk look like it means 228 00:18:43.440 --> 00:18:48.000 that you switch to a percentage of your compensation or the entirety of your compensation based on 229 00:18:48.000 --> 00:18:52.800 some key metric that you have responsibility over that you can draw a connection between what 230 00:18:52.800 --> 00:18:57.920 you do and how much revenue or profit the company makes now in some positions like sales it's a 231 00:18:57.920 --> 00:19:01.600 little bit easier to draw that and that's typically how those roles are structured but if you know 232 00:19:01.600 --> 00:19:07.760 your job well then you can think of ways to tie what you do to what the company makes and you 233 00:19:07.760 --> 00:19:12.240 should do that because the closer you can tie yourself to revenue the more valuable you will be 234 00:19:12.240 --> 00:19:16.080 the third thing you can do as an employee is you can just switch right you can start applying to 235 00:19:16.080 --> 00:19:21.120 other roles either within the business or in other businesses I actually think that the within 236 00:19:21.120 --> 00:19:25.600 business swap is one of the most underrated so like in terms of which one of these will make you 237 00:19:25.600 --> 00:19:30.720 the most money this will probably make you the most which is you taking on risk you switching sometimes 238 00:19:30.720 --> 00:19:36.160 you can get a significantly larger raise then simply asking and I think the reason for that is that 239 00:19:36.160 --> 00:19:40.160 if you have if you're in a role where there's multiple people in your role it sets a precedent for 240 00:19:40.160 --> 00:19:44.240 the business that even if you're a higher performer that they feel like they have to then increase 241 00:19:44.240 --> 00:19:47.680 everyone else's pay which is kind of a risk to the business basically here you ask the business 242 00:19:47.680 --> 00:19:52.160 take on more risk versus here you take on more that risk now the switch allows the business to 243 00:19:52.160 --> 00:19:56.480 maintain face and allow you to get into a role that takes on more responsibility or has a different 244 00:19:56.480 --> 00:20:01.040 title and then you can earn according to that now the final thing here is obviously you can start a 245 00:20:01.040 --> 00:20:05.760 business which then would switch your category overall but let's talk about that so if you have a 246 00:20:05.760 --> 00:20:11.360 business then this is going to get so the pricing lever here is really related to your income the 247 00:20:11.360 --> 00:20:16.080 pricing lever here in businesses is related to what you sell now I want to be really clear here 248 00:20:16.080 --> 00:20:19.520 an employee sells your services you just sell them on a recurring contract but fundamentally it's 249 00:20:19.520 --> 00:20:23.200 what it is and so I think people see these in very different categories I don't see them as that 250 00:20:23.200 --> 00:20:28.240 different personally obviously only real difference is risk now from a business perspective because 251 00:20:28.240 --> 00:20:33.600 think about that this what's the difference in an employee in 1099 mostly government shit but the 252 00:20:33.600 --> 00:20:37.440 actual day to day obviously there's control and you don't have to show up on time and you can have 253 00:20:37.440 --> 00:20:42.560 other you know other other customers but the actual like what you do doesn't phenomenally 254 00:20:42.560 --> 00:20:46.560 change between being an employee and being a 1099 but a 1099 is a business owner and employee isn't 255 00:20:46.560 --> 00:20:51.280 if I can if I can smooth over that wall I think a lot more people would be willing to take the risk 256 00:20:51.280 --> 00:20:56.400 because fundamentally like the doingness is not that dissimilar and so here you have services which 257 00:20:56.400 --> 00:21:00.480 you sell your time for and you have a price which is your salary or or the way that you negotiate 258 00:21:00.480 --> 00:21:05.600 your compensation and that's it now as a business audit you do the exact same thing but you 259 00:21:06.400 --> 00:21:10.000 instead of having one boss you have many bosses and you have to talk to them every day which 260 00:21:10.000 --> 00:21:13.600 are going to be your customers I have talked to this at length and still know none of you do it 261 00:21:13.600 --> 00:21:18.320 but you want to have an ultra high anchor now a price anchor is basically just a price they put 262 00:21:18.320 --> 00:21:24.480 way above your normal prices that mentally anchors how people perceive the remainder of your menu 263 00:21:24.480 --> 00:21:29.120 people actually frame all numbers with respect to the numbers they heard first now I'll give you 264 00:21:29.120 --> 00:21:34.480 I'll give you a simple example and then I'll tell you a story so if I said $10,000 right and then I 265 00:21:34.480 --> 00:21:42.720 said $100 it sounds very different than me saying $100 $10,000 right it's a it's a different shift 266 00:21:42.720 --> 00:21:45.920 in terms of oh my god that's so many different units right now obviously you heard the first one 267 00:21:45.920 --> 00:21:50.400 first and that does influence it but big picture the anchor makes everything else seem cheap by 268 00:21:50.400 --> 00:21:55.600 comparison now the key to this ultra high anchor is that it needs to be 10 times or sometimes 100 269 00:21:55.600 --> 00:22:00.880 times more expensive than your current thing now you're like okay well why would I go 100 times 270 00:22:00.880 --> 00:22:06.400 more how is it even possible well you have to think to yourself what else would have to be true 271 00:22:06.400 --> 00:22:11.520 in order for me to charge 100 times more for what I have or 50 times more for what I sell well it 272 00:22:11.520 --> 00:22:15.760 would probably be an order of magnitude difference in terms of what you deliver if you just 10x the 273 00:22:15.760 --> 00:22:20.160 top thing you're not going to 10x your income now you might be able to double because a certain 274 00:22:20.160 --> 00:22:24.080 percentage of people take your 10x and by doing that it's going to be disproportionately profitable 275 00:22:24.080 --> 00:22:28.480 and so that might double your revenue which might very well you know 3x 5x your income because 276 00:22:28.480 --> 00:22:33.600 of how net profit works with pricing but at the 100x you can absolutely 10x how much you make 277 00:22:33.600 --> 00:22:38.720 and that's even if only one out of you know 20 people take that offer it's still going to be so 278 00:22:38.720 --> 00:22:43.600 incredibly profitable it can disproportionately outweigh the profits that you're making from the 279 00:22:43.600 --> 00:22:49.840 core business now I want to be clear this is what we call in the biz a profit maximizer what a lot 280 00:22:49.840 --> 00:22:54.080 of entrepreneurs especially don't understand is that the thing you sell most of isn't necessarily 281 00:22:54.080 --> 00:22:58.640 the thing you make the most money on all right so let me say that again so if you look at McDonald's 282 00:22:58.640 --> 00:23:03.920 for example they sell burgers they don't make a lot of money on burgers if they only sold burgers 283 00:23:03.920 --> 00:23:09.280 they would go out of business even though it's the core product it's not the profit maximizer 284 00:23:09.280 --> 00:23:14.080 they make significantly more money on fries and coke because the margins on fries and coke are 285 00:23:14.080 --> 00:23:18.800 way way better than meat and a bun and fresh lettuce and tomatoes and onions and all the other 286 00:23:18.800 --> 00:23:23.600 stuff the thing you sell the most amount of is not always the thing you make the most money on and 287 00:23:23.600 --> 00:23:27.600 so you can absolutely build like their business that McDonald's corporate business is real estate 288 00:23:27.600 --> 00:23:33.600 but the franchisee business is really the the coke ice cream and fries business because that's 289 00:23:33.600 --> 00:23:37.040 where they make the disproportionate other profit this is why the giveaway thing that I was 290 00:23:37.040 --> 00:23:41.680 mentioning earlier is so important is that you can have this very valuable thing that you give 291 00:23:41.680 --> 00:23:46.240 away for free and then you maximize your profit with this other thing that's significantly more 292 00:23:46.240 --> 00:23:52.480 expensive that is typically going to be a very more handheld more done for you more heavy service 293 00:23:52.480 --> 00:23:57.040 more concierge more white glove version of whatever it is that you sell now if you sell on the 294 00:23:57.040 --> 00:24:02.960 product side typically it's going to have to be newer designs different materials that will make 295 00:24:02.960 --> 00:24:06.080 a better experience and I'll tell you an example I think is ridiculous but I'll still tell it 296 00:24:06.080 --> 00:24:11.360 so there's this restaurant by salt bay who's like a meme but he actually has like I think like 297 00:24:11.360 --> 00:24:16.480 10 or 11 locations something like that called news are at and so news are at is a super expensive 298 00:24:16.480 --> 00:24:20.480 steakhouse and everything they have is a little bit more than the very expensive steakhouse is so 299 00:24:20.480 --> 00:24:25.680 like a normal steak there is I want to say like 90 bucks which is pretty steep at least today 300 00:24:25.680 --> 00:24:29.840 even for a high-end steak place maybe a hundred but here's the thing is that they have this 301 00:24:29.840 --> 00:24:36.880 gold menu which they just wrap the meat in gold foil and they charge like two thousand to three 302 00:24:36.880 --> 00:24:42.320 thousand dollars for these sticks and you're thinking why on earth would someone go and spend two 303 00:24:42.320 --> 00:24:46.960 or three thousand dollars because they want someone to know they spent two or three thousand dollars 304 00:24:46.960 --> 00:24:51.440 and so that would be bites very different a luxury item where the price of the thing itself 305 00:24:51.440 --> 00:24:55.760 confers the value to the product meaning the more expensive it is the more desirable it is 306 00:24:55.760 --> 00:24:59.840 and the key to luxury products is that other people know how expensive it is so that you get status 307 00:24:59.840 --> 00:25:05.280 by proxy by being able to afford the product now that's very different than a premium product where 308 00:25:05.280 --> 00:25:10.000 the value isn't in the fact that it's expensive the value is in the fact that it is significantly 309 00:25:10.000 --> 00:25:15.120 more valuable in terms of the result or experience that it delivers so friend of mine actually 310 00:25:15.120 --> 00:25:21.840 implement this into his online business and he had this he just created this super expensive 101 311 00:25:21.840 --> 00:25:24.560 version of this thing that was ten times more expensive so his thing was five hundred dollars 312 00:25:24.560 --> 00:25:27.040 a month he charged five thousand dollars a month for this thing it was a business to consumer 313 00:25:27.040 --> 00:25:34.160 business and what the craziest thing happened he then had a ton of people take this more valuable 314 00:25:34.160 --> 00:25:38.320 offer which he had zero intention of actually selling he just wanted to I have more people buy 315 00:25:38.320 --> 00:25:43.360 the next thing but not only that a higher percentage people bought his previously most expensive 316 00:25:43.360 --> 00:25:47.680 package because it looked like the much more affordable more reasonable middle option 317 00:25:48.320 --> 00:25:52.960 because I want to over deliver it also gave you a fourth bonus way of 10x year income and so if 318 00:25:52.960 --> 00:25:58.080 leverage is getting more for what we put in then we want to take maximal advantage of the assets 319 00:25:58.080 --> 00:26:04.560 we already have and so a big part of doing that is saying okay who do I already know and so you want 320 00:26:04.560 --> 00:26:10.880 to hit your list with the combination of those three things so you're like okay I'm going to 321 00:26:10.880 --> 00:26:14.880 arbitrage myself and basically sell stuff for more than it cost me I'm going to live in places 322 00:26:14.880 --> 00:26:18.160 that cost me less than what I need to spend so I can be more aggressive and take on less personal 323 00:26:18.160 --> 00:26:22.640 so I can take on more business risk cool next thing you're like okay I need to give something 324 00:26:22.640 --> 00:26:28.880 amazingly valuable away got it that generates more leads then I'm an upsell people into a super 325 00:26:28.880 --> 00:26:32.960 expensive thing got it and so then finally the question would be like okay well who am I going to 326 00:26:32.960 --> 00:26:37.920 do this to and so this is where you look at your cell phone you look at your email list you look 327 00:26:37.920 --> 00:26:42.000 at when I say email is just literally the contacts that are in your email not like you've developed some 328 00:26:42.000 --> 00:26:45.280 email is not if you're a business obviously you should have an email list and if you don't shame on 329 00:26:45.280 --> 00:26:50.080 you all right so you've got your cell phone you've got your email list on top of that you've got all 330 00:26:50.080 --> 00:26:58.000 socials and then let them know about this free thing that you have and then create the ascension 331 00:26:58.000 --> 00:27:03.600 process that naturally leads from the giveaway where you solve the problem so you reveal the problem 332 00:27:03.600 --> 00:27:08.800 you give them a trial of a solution or a one part solution to a multi-step solution so that they 333 00:27:08.800 --> 00:27:13.840 then naturally want to buy your next thing and so our largest portfolio company actually ran 334 00:27:13.840 --> 00:27:20.800 this exact play and in one email campaign all right so literally just like a three email blast 335 00:27:20.800 --> 00:27:28.880 right to the list that they had they drove everyone to a webinar where they just said hey here's 336 00:27:28.880 --> 00:27:35.280 this amazing offer and they were able to make $2.3 million from this one campaign now obviously 337 00:27:35.280 --> 00:27:39.440 this is a business that has millions of emails on the list I mean I don't know what your income is 338 00:27:39.440 --> 00:27:45.200 now but three emails for 2.3 million ain't bad and so if we scaled this down one 10th and it would be 339 00:27:45.200 --> 00:27:52.000 $230,000 and if we did it at 100x less than it'd be $23,000 but this is a great way to implement all 340 00:27:52.000 --> 00:27:56.160 of the stuff that I just said immediately yeah and the reason that this is one of the strongest 341 00:27:56.160 --> 00:28:00.640 ways of 10xing your income is that there's no real additional cost right so you're just making 342 00:28:00.640 --> 00:28:05.760 money for not a lot of cost because we've already incurred the cost of getting the customers and so 343 00:28:05.760 --> 00:28:10.400 again arbitrage being a theme here like we already paid for this so cost is zero and we're going to 344 00:28:10.400 --> 00:28:15.440 sell this thing that cost a lot to them but not much for us.