Master Class:
How to grow your email list
(Even if you don’t have an audience yet)
Taught by Jon Morrow of Boost Blog Traffic

Master Class: Grow Your Email List


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Transcript

Andrew: This session is about how to use blogging to grow your email list. It’s led by Jon Morrow. He is the founder of Boost Blog Traffic, a blog that helps smart writers get more readers. I’ll help facilitate. My name is Andrew Warner. I am the founder of Mixergy where proven founders like Jon teach.Jon, before we started you said that it took you a while to recognize the value of emails and, in fact, about two to three years after you were blogging you told me you had how many email addresses?Jon: It was like ten email addresses.Andrew: Ten email addresses.Jon: Yeah. It was terrible. I mean when I first started I didn’t even know you were supposed to have any sort of subscription box. I thought if people liked your content that they would come back, and that was a huge mistake.Andrew: In a moment we’re going to talk about the powerful thing that happened when you did learn that. But, going back in time a few years, this is 2007. You get on Penelope Trunk’s site. You do this post. What happens there? Oh, look at that, 277 comments. What happens with this guest blog post because you didn’t know what we’re about to talk about?

Jon: Yeah. That was actually my first viral post. It’s one of the most popular posts in the history of Penelope’s Blog. It got something like 100,000 visitors on the first day, and it sent about 15,000 visitors to my blog. But, because I didn’t even know about building an email list, I didn’t get a single email subscriber from that. So, you know, I wasted a huge opportunity there.

Andrew: Unbelievable. I always assume that everyone understands the power of it, especially you. Here, let me show you what I found going online, D folder. Here, this is an Internet archive. This is what your site looked like back then, 2007.

Jon: Yeah.

Andrew: I did click on the subscribe. I think some of the design is missing from this, but when I click on the subscribe what’s very clearly here is Feedburner RSS, and the closest you had to an email list was well if you want to get my RSS you can get it via email here through Feedburner.

Jon: Yeah.

Andrew: Oh, how far you’ve come since then. As a result of what you’re about to teach us you actually could today do a webinar. Do you have a sense of how many people would show up if you just said hey, I’m going to do a webinar, I’d like you guys to come out?

Jon: These days we usually max it out. I mean we usually get about 2500 registrants, and GoToWebinar has a maximum of 1000 attendees, which is the software we use. So we usually go right up to it and max it out these days.

Andrew: And it’s more than just about the fun aspect of having a big audience and a big crowd when you want to teach something, when you want to sell something through a webinar, when you want to get together with people. It’s also practically helpful for you.

You went to Mexico. Why did you end up in Mexico by the way?

Jon: Yeah. This was, what, 2010. I was having some success online. I was getting a lot of traffic. I was the associate editor of Copyblogger at the time. I was in a situation where I have about $180,000 a year in medical expenses.

Andrew: Wait. Let’s just be clear about that. How much?

Jon: $180,000 a year.

Andrew: 180, okay. From what?

Jon: Mostly I need round the clock attendant care. I have a type of muscular dystrophy called spinal muscular atrophy, and I can’t move from the neck down. What that means is I basically need somebody around me all the time. I mean if I want a drink of water, somebody has to give it to me. If I have an itch on my nose, somebody has to scratch it for me.

Because of that just around the clock attendant care expenses, that’s about 100 grand a year all by itself. Then, on top of that I need the doctor’s visits and everything that I used to do and still do. It came to about 180 grand a year.

Andrew: Wow.

Jon: The only way I could pay for it at the time, because I mean I was making… I didn’t start off making a ton of money doing this. I think I was making 40 or 50 grand. I ran into this huge problem where the only way I could afford all of those medical expenses was to be on Medicaid, and Medicaid…

Jon: And Medicaid has restrictions on how much money you can make before you have to start paying the money back. Their restriction is, they allow you, at least in North Carolina, this changes by state, and this is at that time. I don’t know if it has changed since then. But it was $800 a month…

Andrew: Oh, wow.

Jon: …Is what I was allowed to make. And then beyond that, anything beyond that, I had to write a check to Medicaid. So I remember one month I made $5000, and I had to write a check to Medicaid for $4200. I started to feel trapped because I knew that I could build a business. I knew that I was developing some really powerful skills, but I also knew that it was going to be hard for me to be able to pay 180 grand a year medical expenses as a start-up or even in the United States.

So I started looking around and a friend of mine had retired down in Mexico. He kept telling me about how great it was, how inexpensive it was. So I went down there for a week and fell in love with Mazatlan, Mexico. I moved down there because down there, an RN, a nurse with a four-year degree at a good top-of-the-line hospital, makes about $4 an hour.

Andrew: So you went to Mexico to cut your expenses while you figured everything out and saw how you could make a business out of this blogging thing.

Jon: Exactly. So, what I did by doing that, I cut my expenses from 180 grand a year to about 40 grand a year.

Andrew: I see.

Jon: And I was living in a condo on the ocean.

Andrew: Is this it, by the way? I found this photo online. Actually the team here found it online. Is this…

Jon: Yes it is.

Andrew: …Your time there?

Jon: Yes it is.

Andrew: Okay.

Jon: So that was the first day that I was there. I went out on the balcony. I took a photo, and posted that. That was from my balcony. The condo I was staying in was $1500 a month.

Andrew: Yep.

Jon: If you had a condo like that… Like right now I live in southern Florida, and a condo like that here, you are looking at probably $6000 a month plus, to rent some place like that. And I had around-the-clock nurses, and I paid for everything myself down in Mexico.

Andrew: From blogging.

Jon: From blogging.

Andrew: Blogging, building your email list, and selling what?

Jon: What I did was, at first, I was still working for Copyblogger, so I was making a little bit of money from that. Copyblogger is one of the big content marketing blogs, run by Brian Clark, or founded by Brian Clark. And I was also working for Neil Patel.

Andrew: Yes.

Jon: Which I think was a recent guest of yours.

Andrew: Yes.

Jon: And…

Andrew: Repeat.

Jon: Yes. Neil was great. I helped him launch the KISSmetrics blog.

Andrew: Okay.

Jon: So I was doing both of those jobs and then I also launched my own online course about guest blogging, which, at the time, was an unheard of concept. Nobody knew what it was. And it was so unheard of, I bought the domain name, Guestblogging.com, from GoDaddy for $7.99.

Andrew: Oh, wow. And what year was this?

Jon: This was in 2010.

Andrew: Two thousand ten.

Jon: Two thousand ten.

Andrew: Now, I want to get into the tactics that will help our audience do what you did, but I know that they are curious about how with this lack of understanding about email lists, when you started, and with the heavy expenses that you had, after you started to learn what you are about to teach us, how big did this business get for you? How much revenue are you doing today using what you are about to teach us?

Jon: So, while I was working for Copyblogger and for Neil, I launched my course, and in the first week, it was somewhere around 25 to 30 thousand dollars in sales that it made.

Andrew: Yes.

Jon: I made so much money so fast, that I had never made that amount of money before, that PayPal got suspicious and locked my account down. Because, you know, it was a huge influx of money, all in the span of just a few days. And when I finally got all of that straightened out, I went into Neil, and I very politely turned in my notice.

Andrew: [laughter]

Jon: And said, you know, you’ve been great to me. Thank you so much, but I’ve got something really big going here and I got to pursue it.

Andrew: I see the revenue…

Jon: …[??]…

Andrew: …that you have today up on the screen, your annual revenue. Do you feel comfortable sharing your annual revenue?

Jon: Sure, sure.

Andrew: What is it?

Jon: It’s $100,000 a year.

Andrew: $100,000 a year.

Jon: Or a month, $100,000 a month.

Andrew: $100,000 a month, okay, I thought so.

Jon: $100,000 a month.

Andrew: $100,000 a month, and this is from building using many of the ideas that we’re going to be talking about today. Here are the ideas that you and our team went through that we thought would be most useful for the audience. The first one is to have the right kind of Coming Soon page.

John, you won’t believe it. I remember when you did that post, and I followed the link.

Jon: Really?

Andrew: I saw that page, and, frankly, I have to be honest with you. I completely, completely dismissed it. I said this is never going to work. Because I didn’t know what was on there. Can you first, before I show a way back machine screen shot of what I saw all the way back then, tell me what I missed. What is the right kind of Coming Soon page?

I feel like such a… I think I know who’s got it, and I was so off with you at the time. What goes into the right kind of Coming Soon page?

Jon: The right kind of Coming Soon page really gets people excited about your upcoming project. But, most importantly, it has an email capture box. After working with Brian at Copyblogger I learned a ton of stuff about email, and about attention, and about marketing and selling. I saw that even our engagement numbers on email subscribers were far, far beyond what they were for RSS.

Because of that I said all right, what I want to do, I’m going to create a simple little trailer. I got a few people in social media space like Brian, and Darren Rowse, and Chris Garrett, three respected guys, to give me some quotes about who I was. I put it up with a little note down below it, if you want to join the pre-launch list type in your email address here. Yeah, it worked great.

Andrew: John, it wasn’t this. Did it look like this? I could’ve sworn this was the site.

Jon: It was.

Andrew: It was?

Jon: The way this worked, in the box up there at the top there was a video.

Andrew: Yeah, and it was your voice, and if I remember right… I can’t find this on archive.com, so I can’t confirm, but if I remember right it was your voice and text up on the screen.

Jon: Yeah, it was text with quotes from Brian and Darren. It was basically a credibility and a proof piece to prove to people that I knew what I was talking about about blog traffic.

You know, I don’t think the video was that significant. Now with a lot of my students we just do a simple text page telling people that it’s coming soon and give them an opt in box. It gets very similar opt in rates.

I mean the video was nice, but if you’re looking at this thinking I can’t get the biggest people in my industry to give me quotes, I don’t think that kind of video… It was nice. It got attention. It got some links because it was a new sort of novel thing to do. But, I don’t really think it’s essential.

Andrew: Okay. The most essential thing, of course, is that you put something on there that collects email addresses, and what? Make a point about what people get if they give the email address?

Jon: Yeah. When I was launching Boost Blog Traffic I wanted to make a point, and that was… One of the things that I noticed at Copyblogger was I was doing a lot of consulting with beginning bloggers. I noticed that people were starting blogs, and they were writing and writing and writing, but no one was really paying them any attention.

It was almost like some of them were really good, and this analogy came to mind. Let’s take a magnificent speech, the ‘I Have a Dream’ speech by Martin Luther King. What if there were no television cameras there? What if he had given that speech to an empty room? What if there was no radio, no nothing?

Andrew: Yeah.

Jon: It wouldn’t have had an impact on anyone. I think that’s what happens to a lot of beginning bloggers. They’re writing this great stuff, but there’s nobody there.

So, I had this idea. What if we gathered the audience before we started publishing? In the beginning that page, if I remember correctly, got about a 30% opt in rate, of which…

Andrew: Total number of emails, do you remember?

Jon: It was a few thousand. I switched out of that a few weeks into the launch, and I did start offering an incentive called Headline Hacks.

Andrew: And we’re going to get to that in a moment, I think.

Jon: Yup, but I got several thousand emails on for that and the whole idea was…I wanted to get ten thousand email subscribers before I wrote the first post.

Andrew: There is a shift in thinking. Most people would say, I want to bank ten emails or ten…excuse me ten blog posts so that I can keep on publishing. You’re saying, no, don’t start by writing your ten blog posts. Start by getting email addresses and then start writing the ten blog posts. Am I reading you right?

Jon: Exactly! Exactly!

Andrew: Ok, so, we see the landing page, I just thought that it was overly simplistic. I thought that was not even a site here. And that’s the part that I was wrong. You were right, in retrospect of course I understand, to just collect email addresses first. Now here is the problem that a lot of people who see this are going to have.

They are going to say, great, I have this landing page that can collect email addresses. Jon and Andrew told me that I don’t need to do a video, so I didn’t. I kept it simple, terrific…no one’s coming. And so that’s where the next part of our conversation comes up, which is to write guest posts at the slowest possible times. And you did that…where…can I even find this? Yes, look at this.

Jon: Yup, I did it

Andrew: Right here, how did you do it. What’s the slow time, and how did you get to do a guest blog post on copy…Copyblogger at the time.

Jon: So Copyblogger…I was an associate, I did it there too, but I still didn’t have enough influence to like, for them help me launch my blog. You know, they weren’t going to take an entire week and give it to me to help me launch. So I thought about it and on the week between…the week before Christmas, I think it was, they always took the week off and never published any content.

Andrew: Because I know from my experience it’s a fairly weak week, fairly slow week in publishing.

Jon: It is, and the traffic usually goes down by 30-40 percent. But I noticed that there was nothing on the calendar, for that week. and I said, why don’t you allow me to write an entire series of posts about headlines. And take the whole week, and so I wrote a post every day during that week and entirely monopolized the attention of a blog with over a hundred thousand subscribers at the time. And I did the same sorts of things on Portblogger and on other sites, where I find the time.

If you go to a blog and they don’t accept guest posts especially, try to find a time where, with Darren, if I remember what I did with him, when I wrote my first guest post for him. I noticed that he was going on vacation, and he said that he needed to collect a certain number of guest posts on Twitter before he went on vacation. So I emailed him, and I said why don’t I write you three guest posts. You can take off an extra three days off on me. And so you got to look for those opportunities where other big sites may need content, and then jump in there throughout the week and make sure that you do a really do a good job so they’ll invite you back.

Andrew: So, John, you were able to contact Brian because you were essentially on the staff. You were inside their system Darren happened to tweet. But what if we don’t have those types of connections or if Darren doesn’t happen to tweet. How do we find contact information for sites so we can pitch our guest posts at them.

Jon: The good thing is, now guest blogging is much more established than it used to be. So most of the big sites that accept guest posts. They have guest post or writer guidelines. They’ll tell you exactly what they are looking for. So the first place to start is to just go to Google and type the name of the site and then guidelines, and usually they’ll come up.

Andrew: Let’s try right now.

Jon: Okay…

Andrew: What makes a great Copyblogger guest post…?

Jon: Yup…there you go.

Andrew: And then use the contact form here. Okay .

Jon: Yup. And the other way, if you like, I actually have a list of the 100 best blogs to guest post for. I’ll be happy to give that to you and your audience and you can post it that or whatever.

Andrew: I would love that.

Jon: So you can just go directly to that, and it even has links to all the guideline pages and that makes it really easy.

Andrew: Oh, that’s fantastic, how do I get that?

Jon: I’ll email it to you.

Andrew: Okay.

Jon: And you can post it then.

Andrew: Yeah. I know it for me it helped out tremendously in the beginning of Mixergy to publish excerpts of my interviews on Mashable, but I happen to know Pete because I was organizing events with him. I didn’t know many more people than that. I didn’t know O. Malik [sp]. I didn’t know Brian Clark. I didn’t get to meet Brian Clark until about this year.

Jon: But that does really key into one of the most important things.

Andrew: Mm-hmm.

Jon: And that in my opinion relationships and connections precede content. So before you really start getting a lot of traffic to your content, usually you have to know somebody that will link to it for you. So in the beginning of your career if you’re really doing these things, taking a lot of time to do these things like interviews or guest posts is really essential and networking, going to conferences. If you don’t do those types of things, it’s much, much harder to get any traffic to your content.

Andrew: Were you going to conferences too?

Jon: I wasn’t. At the time I couldn’t.

Andrew: That’s what I thought.

Jon: Because it’s very difficult for me to travel. But what I did was a lot of online events. So whenever somebody would do an online event, like a . . At the time it was like tele-seminars, and it was just starting to get into webinars. So I started doing a lot of the tele-seminars and webinars. And . . .

Andrew: All right. I want to get into how you did that.

Jon: Yeah, yeah.

Andrew: Here’s another aspect. I keep wanting to break down what you did because I feel like you grew in front of my eyes here. The next thing is do a webinar for someone else’s audience. How does that work?

Jon: Yeah, so this is probably where I got the majority of the email addresses during my launch.

Andrew: Mm-hmm.

Jon: My big launch piece was talking about headlines and teaching people how to write better headlines for the [??] press. And what I did was I put together a webinar on that topic that went down through the most popular headlines, and I gave them different tests that they could use to decide whether or not they had a good headline. And then at the end of it I developed a headline show where I’d stay on at the end of the webinar and write people’s headlines for half an hour. And people just loved it. It was like a magic trick.

Andrew: [laughs]

Jon: Because when I started working there, Brian told me how important headlines were. And he told me, “I want you to write a hundred headlines every day.

Andrew: Really?

Jon: That’s what he told me. And what I didn’t know is he told that to everyone that started there.

Andrew: [laughs]

Jon: I was the only one that actually did it and took him seriously. And so over a year I wrote 35,000 headlines. And I got so good just because of how much practice I had at writing headlines that now somebody can give me a topic, and I can spit out a really good headline pretty quick.

Andrew: What headline would you give this conversation?

Jon: So it could be something like “11 Secrets of a Blogging Genius.”

Andrew: Okay.

Jon: Or it could be “11 Warning Signs You’re Starting to Go the Wrong Way.” All different. You can take negative angles, positive angles, for some people whatever, and, yeah, I got good at redoing those really quick. And because of that, after I started to launch Headline Acts which is a 50 page document teaching people about headlines and giving people different headline templates, AWeber invited me to do one for them. Copy Blogger wanted me to do one for them.

Andrew: A webinar for their audience.

Jon: For their audience.

Andrew: So the idea is here, I’ve seen it on different sites here. This is one, optimizing web content webinar by Jon Morrow, How to Create Irresistible Titles. This is one of the webinars that you did. As I was Googling around, I found it. So this person, this site, SkyWord.com does a webinar with you. They get their members to come and watch and participate. Here’s the registration button right there, right? You end up with people’s attention, but I guess what happens when they click here to register they give you their email address to, right?

Jon: That was the deal. So instead of trying to sell something on the webinar, the deal was, I would provide them outstanding content but that I would be able to put anyone to join the webinar on my e-mail list. And what I did to be fair, because you never want to surprise people by putting them on an e-mail list they don’t want to be on, is I would always email after the webinar was over and say, “by the way, I am going to start e-mailing you some more tips once a week. If you’d like to get those tips, stay on the e-mail list, if you don’t want to get those tips, click the unsubscribe link to opt out.”

Andrew: I see.

Jon: I usually kept 80-90% of the people who registered for the webinar, because they loved the content. On the average webinar, for the one on Copyblogger, I got, I think about fifteen hundred e-mail addresses.

Andrew: Wow.

Jon: For AWeber, I got over a thousand. For some of the other blogs I can’t remember, but even some of the smaller blogs, I was getting 200, 300 mail addresses. When you start looking at it, I started measuring, what are the things that I do that get the highest number of e-mail subscribers per hour?

Andrew: Yes.

Jon: Webinars beat everything because I could get 300, 500, 1,000 subscribers in a one-hour webinar.

Andrew: So if we’re going to do this, we find something that we do especially well. In your case, headline writing. For me, it’s how to interview for someone else. It might be how to install all the perfect plug- ins on a site, or how to use a certain kind of CRM. We have our topic, it’s time to go to bloggers and say “will you do this with us”? What’s in it for them? I see how you get e-mail addresses, what’s in it for them if they promote you and help you grow your list?

Jon: Great content. It has to be a really, really great piece of content.

Andrew: But they don’t get the e-mail addresses too? There is no check box that says it’s going to the site, Copyblogger and to the person John?

Jon: Nobody ever asked me for that, but if they had, I would have said “yes”. I wouldn’t have had a problem with that.

Andrew: I think I’ve seen that happen at other sites, where the incentive for the other website is great content and a way for them to grow their mailing list.

Jon: Yup. Part of it was, number one it was a killer presentation, so when I did it for AWeber, at the end of every webinar they do a survey to see how much people liked the webinar, and it was the highest rated webinar they had ever given at their company. So, part of it starts with really, really great content. It has to be a presentation that knocks people’s socks off. Once you do that, every blog that I wanted to do another webinar for I would just send them one of the ones that I already did, and they would watch it and they would say “wow, that was amazing! Sure I’d love you to do this for me.”

It all comes down to the great content, and if I were a beginner, there are some things that are different. If I was starting over and nobody knew who I was, I probably wouldn’t be able to get those top sources. I probably wouldn’t have been giving webinars on Copyblogger or Aweber, but I could have done smaller sites, and even if you get a hundred or two-hundred e- mail subscribers in an hour, it’s unlikely you’re going to get 13,000 e- mail subscribers in 60 days like I did. But, even if you get a thousand, fifteen hundred, that’s still a lot better than most bloggers do.

Andrew: I saw that Derek Halpern was doing that when he got started.

Jon: Site reviews of some…

Andrew: Yes.

Jon: He would do a site review and tell them all of the convergent things that were wrong with their site. Derek is a great presenter.

Andrew: Do you have any advice on how we can become better presenters or better at webinars? Is there a book or a resource where we could go to learn the framework that will allow us to create these kinds of webinars?

Jon: What helped me the most, believe it or not, was watching Ted Talks, because those are some of the best presentations of some of the best speakers ever. I would just watch them and try to dissect what they were doing.

Andrew: What’s one thing you learned by dissecting them?

Jon: I learned that most speakers, it’s almost impossible to be too concrete, to offer people enough examples of what you’re talking about and most webinars are far too theoretical and they’re talking about strategies, but they’re not actually giving people something that they can see. So what you’re doing now, the way we’re dissecting everything, that’s dramatically more valuable to people, so that was one of the biggest things.

Andrew: Yeah, most guests who come on here don’t understand why I’d want to show this, for example, why it would be important for me to do a search and find how Copyblogger finds guest posts, but as an audience member, I’m curious about that. I want to actually see the example. I don’t just want to hear that I should be doing events with other bloggers. I want to see the actual webinar, and I want to see that this is how you’re collecting the email address, and I want to see the reactions to the blog post – where was that? There it is, Penelope Trunk. I don’t just want to hear that you say it’s massive. It’s kind of cool for me to see 277 people even commented. By the way I didn’t show this thing. This is the landing page you used on the post we talked about earlier, right?

Jon: For headline hacks?

Andrew: For headline hacks, right. So Copyblogger did . . .

Jon: So yeah, I launched that on Copyblogger.

Andrew: This was Copyblogger, then this is the landing page you led people to if they liked your content on Copyblogger enough.

Jon: Yup.

Andrew: And it’s changed over time, but essentially, this is it.

Jon: This is it. It’s very similar, and this gets about a 56% opt-in rate, which is pretty good.

Andrew: And that’s because it uses . . . I can tell; that’s a lead page. Leadpages.net page, right?

Jon: It is.

Andrew: Yeah, they do over 50%.

Jon: Great piece of software. So yeah, I use that. It makes it very easy to set up a page like that. And also I found the magic thing that my audience wanted, which was a cheat sheet for writing about [??]. Notice I didn’t say anything about headlines and the title.

Andrew: “The Cheat Sheet for Writing Blog Posts that Go Viral.”

Jon: So I talked about the benefit of the thing rather than what the thing is, which is a big mistake a lot of the others make. But that little guide I put together, I still use that to this day, and it’s responsible for probably 95% of my email list.

Andrew: Wow. The tool there is leadpages.net, but there are other ways to do it. Unbounce is a really good tool for creating pages like this. What else? OptimizePress I see a lot of. All right, on to the big board. The next big point is: you’ve got to prove yourself, prove your results, and build a network of influencers. Give first to prove yourself, and you did that, speaking of examples, with Darren Rowse, you did a post called “How to Quit Your Job and Move to Paradise.” Here is the post. This is ProBlogger. There is your name right there. So, how does this help you prove yourself to him and to other influencers.

Jon: This is maybe the best article I’ve ever written, which is another mistake that a lot of the others make. They try to hold back their best stuff for their own site. My opinion is in the beginning, when your blog is new, you need to be giving your best content away to other big sites where it can get the biggest audience possible, and then link back to your site and build a relationship with that blogger. So this post, I was pitching myself as a traffic expert. To do that, I need to be able to write posts that get lots of traffic. So this post got . . . it’s up over a million visitors now that have come to this, over a million page views. It’s the most popular post in the history of ProBlogger, so over seven or eight years, there’s never been a post more popular than this.

Andrew: Unbelievable. It’s about your accident.

Jon: It is. It is basically my story.

Andrew: This is the accident.

Jon: Yup. So that’s what started off my whole blogging career, was that accident, and I have a picture of my view from my balcony.

Andrew: Your office.

Jon: Yeah, my office. And then I didn’t reveal until the very end that I’m in a wheelchair. And the post went viral – incredibly viral – and because of that, to this day I have a relationship with Darren. And it was maybe a month after we published that post that I went to Darren and I wrote a quote for him, for my coming soon page that I wanted, and it’s that I am one of the top writers on the web. It is what I wanted him to say.

Andrew: Ah. I heard that you’re supposed to do that. Write for the person who you’re asking for the testimonial from. So you’re not handing them a homework assignment without any direction. You say, “If you believe this, this is what I’d like you to say, and you can rewrite any way you want or change it.”

Jon: Yeah, so I gave them to him. I think he did change a few words around, and I just read the most popular post on this site. How was he going to say no to that?

Andrew: What?

Jon: How was he going to say no?

Andrew: Right. After doing that?

Jon: After doing that. So whatever you’re trying to teach people, be genuinely good at it and don’t do a public demonstration. I call it a public demonstration of your magic powers. So whatever you’re doing by getting traffic is utilizing your magic powers. So I wanted to go publicly demonstrate that. I think I spent more than 50 hours on that post.

Andrew: Fifty hours on that one post.

Jon: Just tweaking every aspect of it. I wrote it with the intention of going viral, knowing that it would probably go viral. And crafting it until I was absolutely certain every word of it was as good as it could be. And, I mean, the result was over a million pages.

Andrew: Neil Patel did something similar to that. He told me in his first Mixergy interview he went to TechCrunch and said, “Can I help you get more traffic?”

Jon: Uh-huh.

Andrew: And they said, “Well, that’s interesting.” He said, “Look, I’m a SEO expert, and I can do some things to your site to help you get more traffic.” And at the time no one knew SEO, so he was able to make small adjustments, and I remember asking him, “So that’s all you did?” “Pretty much, people don’t know what to do.” Today we’re more sophisticated. Back then we weren’t. And as a result, that’s how, I think, I know that’s how he got the quote from Mike Arrington, the Founder of TechCrunch.

Jon: Yeah.

Andrew: I see a few different ways to do that, and this is what you mean. Prove yourself to the person first.

Jon: I mean, you mentioned Derek Halpern, what he did with the site reviews.

Andrew: Mm-hmm, yes.

Jon: That was a public demonstration of his magic powers. So, yeah, it works.

Andrew: This is the other thing that I noticed. I’m going over to my second computer here. Let me show the screen. This is the post that we talked about earlier.

Jon: Mm-hmm.

Andrew: Where is that? Yeah, so you’re listed as the person from Copy Blogger, but the link is check out his free videos on guest blogging. When I click on that, I end up here. So, again, unlike most guest bloggers you’re not linking to your blog. You’re not linking to your home page. You’re linking to a page where people can give you their email address.

Jon: Yeah, and this was one of the key ways that I made money back in the early days by linking to an opt-in page and then that opt-in page leads to an auto responder sequence. I was making an average of $7,000 per guest post.

Andrew: Seven thousand dollars per guest post. Were you selling just your own course on blogging . . .

Jon: Just mine, of course.

Andrew: . . . or were you doing not even affiliate programs.

Jon: Not even affiliate programs. So the course is $600. That opt-in sequence gets about 6% of all email subscribers to convert. So, you know, if I drove a hundred subscribers, for example, to that I could get six sales. That was $3600. On average I got about 200 email subscribers per post so that’s over 7,000 bucks in sales.

Andrew: That’s amazing, and that’s something that it doesn’t look like it, it looks so simple. I think a lot of times when people see this . . . I’m not even zooming in. I’m going to zoom in now. This is what it looks on the page.

Jon: Mm-hmm.

Andrew: It just looks so simple. It’s like you’re almost not ready, you don’t have it. But you do. You have the cheat sheet that people who are in your demographic your target audience want and the simple way of getting their email address. I love this. I try to advocate this as much as possible. No one wants to go to a blog post and have to fish out what post they should be reading or happen to read the latest post and judge based on that.

It’s your email that I think is more important.

Jon: Yeah, and it . . .

Andrew: You do this way better than I do. I’m just in admiration of how you’re doing it, but I believe in the same thing here for Mixergy.

Jon: Yeah, I got a lot better at this when I was down in Mexico when I had to survive. I had to make enough money to pay for everything on my own down there. But, yeah, that post from Poor Blogger it made . . . When I stopped counting it was at $32,000 in sales. Just from that little link. That’s all. So, yeah, it’s a way you do have a product that converts. That is one of the requirements, but, yeah, you can make a fantastic amount of money per guest post. And I’ve learned that, by the way, from Neil Patel who I will give credit that used that strategy before I did to promote KISSmetrics.

Andrew: He used to go and guest post on other sites. Well, have other people guest post on other sites put a link back to the a landing page where he collected email addresses and then do his sales.

Jon: Yeah, what he was doing at the time when I was working with him at KISSmetrics was he’d guest post on the marketing site and then he would, he would give away free trials to KISSmetrics and then if you stayed past 30 days it was $99.00 a month so I mean you know let’s say he got a hundred people to sign up and let’s say fifty of them stayed that’s fifty people at $100 a month that’s what five grand a month off of one guest post.

Andrew: $500 a month.

Jon: Ten or fifty people at $100.

Andrew: Oh it’s $100. I thought you said $9 a month which just didn’t seem right to me.

Jon: No, it’s $100.

Andrew: Yeah, it’s $100 right, that’s an expensive product.

Jon: Yeah, 99 dollars. So, yeah five grand a month off of a guest post.

Andrew: As I understand it, he had other people guest or ghost write his guest posts.

Jon: Yeah.

Andrew: Yeah he’s a (??), that guy.

Jon: He is, he’s good at.

Andrew: Were you one of his ghost writers?

Jon: I never was, I never was. I served as the editor and chief of KISSmetrics for the first three months, that was up until I resigned with all of my guest blogging stuff but, but yeah that’s what I was doing. By the way Neil never told me to do that, I just noticed him doing it and I said you know that’s a really good idea, I ought to do that. That’s the way you learn most of the best stuff is by watching smart people.

Andrew: And now we’re all watching you and learning from you. Here’s one other thing that I learned from you say use a feature box at the top of your site, that’s the one that converts highly for you. What is a feature box?

Jon: I got to give Derek Halpern the credit for this one

Andrew: Yeah

Jon: I didn’t of this idea, I have evolved it a little bit but the idea is at the top of your site you usually have a logo and a menu, down below that most people start giving away their blog posts what you need to do is in between your menu up at the top and your content you need to have a box all the way across the top where you ask for people’s email address. It’s the best real estate on the screen, it’s where if you look at tracking studies it gets the most attention so put your request for an email address right there front and center on the best real estate.

Andrew: Here it is on your site, it’s this gray box and I’m going to zoom in so people can just see that. This is it, again your offering the chi chi (sp) for writing blog posts that go viral.

Jon: Yep, so it gets about 9% of new visitors to the site.

Andrew: Okay.

Jon: Subscribed to that which is a fantastic percentage and so that means if we round it up to 10% if I get a thousand new visitors in a day then I pick up a hundred new subscribers in a day.

Andrew: 1 in 10, that’s really high. What is this that I see in my notes that I should be asking you about an un-pop which is in beta?

Jon: So, we have a product called Unpop, that is in Beta that actually allows, makes it really easy to collect email addresses and it’s at unpop.com. It is in Beta, we’re not currently selling it at the moment, so all you can do is sign up to (??)

Andrew: Of course. How does it work?

Jon: What it does is, it actually slides up in the bottom right hand corner of the screen which it will eventually show here on the video.

Andrew: I’m looking to see if it’s in there.

Jon: Instead of covering your entire screen like a pop-up does all it does is slide up and animate up into the bottom right hand corner, kind of like a little sticky note.

Andrew: Got it.

Jon: In the bottom right hand corner of your screen and it asks for your email address and we’re also working on allowing it to work with the feature(sp) box on blogs as well.

Andrew: I see. The main idea is people are coming to the site, capture their email addresses and you’re trying a bunch of different tactics for doing it, one of the best ones for you is the feature box right along the top and you’re working on creating a way to make it easy for people to do that another way is the unpop up box and I actually asked you before the interview started, I said is there a plug-in that you recommend for putting a feature box up? You said, “That just doesn’t exist. We’re going to have to teach the course without it.” We had to code something like that for us. It looks like it’s something that you’re thinking about creating. No firm date for when it’s going to come out, but people can check it out at GetUnPop.com.

Jon: It’s being planned. Just to give a point of comparison, we did a survey of a lot of my beginning blogging students in my guest blogging program. We had them check what their opt-in subscription numbers were when they had that little box in the sidebar.

Andrew: That’s the box that everyone has, the sidebar box asking for an email address. Webber includes a bunch of those with every membership.

Jon: The average was .5%.

Andrew: .5%. Less than one percent.

Jon: Less than one percent. Amongst my students…I don’t know if that goes out to everyone else, but for amongst my students, that’s what it was. Compare that to 9% in percent. If you get 10%, you’re getting 20 times increase in your email list growth. When you have that half a percent opt- in rate, people don’t realize. They say, “I need more traffic.” Not necessarily, because if you put more traffic into a site and they don’t subscribe, it’s like pouring gasoline into a gas tank with a hole in it and then trying to go somewhere.

Yes, you can pour in more, but you’re just going to lose it again. Try to start collecting the traffic you do get, and building a relationship with them, and then getting them to come back. After that, you can start building your traffic.

Andrew: When you have .5% of people who hit your site giving you their email address and sticking around and building a relationship with you, it doesn’t really pay to go out there and get more traffic for the site. But when you get 9%, then every 100 people you bring over equal nine new subscribers, meaning you just keep getting to grow and grow. Let’s take a look at the next big point here, which is to incentivize people to promote you with affiliate relationships for your product. How do you do that?

Jon: This is the other big place I’ve gotten a lot of subscribers. A lot of people feel they have to wait until their blog is really big to launch a product. Again, I did things in reverse, and it ended up being more successful that way. I launched my guest blogging program before I launched the blog. One of the reasons why was…

Now, I still to this day give webinars for my guest blogging program. And people are incentivized to let me do that webinar because they get a 50% commission on all of the sales. With the webinars, on average, it converts ten percent, so on average they end up getting… I forget what the numbers end up being, like $24 per registrant that they send in.

Andrew: $24 per person who just registers, not even for viewers?

Jon: Mm-hm. Yep.

Andrew: I see. Now, you don’t just say, “I will do a webinar for you, I’ll get you great content.” You say, “I’m going to do a webinar for you. I’ll get you great content, and I will sell some of these people on my course, and we’ll split the revenue.”

Jon: Yep. Sometimes… When I first started, I didn’t even tell them. They’d say, “There’s no way you convert that well.” I’d say, “I’ll write you a check, after you promote it, for the exact amount.” We don’t even have to see what the sales numbers were. I had several affiliates who would drive 1,000 people, and I’d get 1,000 registrations. I’d write them a check for 24 grand. That was it.

Andrew: Unbelievable. What do you say that’s so magical? Where do I go see these webinars?

Jon: You have to attend one.

Andrew: How do I go to attend one? What website are you doing one with now?

Jon: Here’s the thing. Here’s another thing I do. I only do webinars to people on my email address, who are core affiliates on my email list. So about once a week, sometimes every other week, we do a webinar. If you’re on my email list, it boosts blog traffic. The ones we’re doing now, we average about $50,000 in sales per webinar that we’re doing now. They convert really well. Like anything, it’s about practice. I’ve done hundreds of webinars now. I study other people’s webinars. I study great speakers. When I started, my webinars sucked. I didn’t make anywhere close to that amount of money, but as I’ve gotten better at it, now it’s fine-tuned and it works really well.

Andrew: What do you do to keep track of how much money you get and how much money your affiliate gets?

Jon: We use InfusionSoft right now which is really advanced, CRM, email, shopping cart sort of program, sort of a do everything program.

Andrew: So with Infusion Soft when someone registers their email address in a form you can tag them with the affiliate, and then at the end they’ll do the math and tell you, “This tagged affiliate brought in that much money.”

Jon: Yep, so it will calculate it for you, but we also double check it after the webinar. We have someone manually go through all of the customers and check their tags just to make sure everyone got their commissions.

Andrew: I see.

Jon: So it works well and, you know, it’s an advanced program if you’re a beginner and you don’t have anybody for that. There are other affiliate programs that you can use that are much cheaper. I mean, [??] has a cheap one. OneShoppingCart is . . . I started with OneShoppingCart, UltraCart. There are lots of others out there that you can use too.

Andrew: This is one of those pages that you’re using today. This is what it looks like.

Jon: Yep, and that one was . . .

Andrew: Oh, actually, this one is from 2011.

Jon: Yep, this is a while ago. This is with Derek Halpern’s webinar bridge product which I don’t even know if he’s offering that one any more. Nowadays I do it with LeadPages, [??] those webinar pages.

Andrew: LeadPage for it and LeadPage keeps track of everything.

Jon: Yep, so LeadPages integrates with GoToWebinar. So when people sign up for the webinar it, adds them to my email list, puts them on an auto responder sequence, and it registers for the webinar all at the same time.

Andrew: That means every time . . . I’ve been playing around with InfusionSoft. That means every time you want to do another webinar for someone you have to create another form in InfusionSoft. Let me bring my camera up.

Jon: Yes.

Andrew: Another form in InfusionSoft, add the tag to that form, and then create a copy essentially the LeadPage you’ve used before, make some changes, and connect that to the form you created.

Jon: It’s a process. We have a check list that my staff goes through now to be able to do it all.

Andrew: You must.

Jon: It’s like a hundred steps or something to get it set up. It takes an hour or two to get it set up, but, yeah, if you get it all set up right, it is an advanced thing. You do have to be really good at public speaking. But if you get good at it, it can virtually do well.

Andrew: All right. On to the next. Oh, wait. If you don’t sell in that webinar, do you then give . . . If you sell to them in the future, a year in the future, half a year in the future does the person that sent you that email address still get a commission?

Jon: Yes, it’s forever.

Andrew: Wow.

Jon: So my philosophy about affiliates is I want to send them as much money as possible, and the reason why is I want them to provide multiple times. So now I have multiple webinars. So even if I do a webinar once and someone doesn’t convert, I have another webinar and another month that they get invited to that sells the same product from a different angle.

So the number of people that convert is enormous over time because I keep coming back to them with more content. I’m not coming back to them with more and more blatant sales pitches but just more and more content with different angles and different ways that will help them. And, yep, so that’s how we do it and, yeah, I mean, we send a nice little mass pay every month to everyone.

Andrew: That’s nice to have all these people do well because they’re affiliated with you.

Jon: Yeah.

Andrew: It really does incentivize them. On to the next big point, the final one which is to go to blogs that publish resource lists and email three to five influential people for each of your posts. How does this work?

Jon: The way that I look at this just to get another dramatic metaphor is what a lot of the bloggers do is they write a post, and then they just leave it.

Andrew: Hmm.

Jon: And they go on to the next post. Well, in my opinion that’s an enormous mistake. What I do and what I tell my students to do is think of your purse like children. When you have a new child, you don’t just say, “Well, that was fun and set them down on the ground” and walk away. You take care of them. You help them grow. You guide them until they build a life for themselves, and that’s the way I look at my blog posts. I want to create a really good piece of content, and then on average at least, what I do is I’ll look for five sites that have resource lists…

Andrew: Um-hmm.

Jon: …like five best resources on Google+, or whatever. Whatever the topic is. If you do a search on Google for the topic, and then resources, it almost always brings up at least two pages.

Andrew: Here, so let’s do that right now. I’m going to zoom in again, and I’ll read this out just in case because I know that it’s hard to see Google searches on a screen. So it’s just resources, you said Google+?

Jon: Yep. It’ll find some. That other search parameter is another way to find it that works even better, but yeah this works too.

Andrew: So this one I think because we did Google+ it doesn’t work especially well, why don’t we do resources, pod casting?

Jon: OK. That’ll work.

Andrew: Got to spell it right first, there it is. Pod casting tool box, 70 pod casting tools and resources. So, I see this on Mashable, I see this on a couple of other sites. What do I do with this now? 25 pod casting tools and resources from PracticleEcommerce.com is another search result. What do I do with them?

Jon: I would email either the author or editor of the site, and say “I found your resource list. It’s fantastic. I have another resource for you that gives everyone up-to-date information on podcasting. Would you like to see it?” And usually 20% of them, so if you pitch five sites, probably 1 of them is going to come back and say yes they’re interested. And then you send it to them, and if they say yes usually you get the link. When I was a beginner, I didn’t just do five, in my opinion the bare minimum, I’d do 50, 100 different sites for every single post. And that’s where all the traffic came from in the beginning.

Andrew: So if you do a post on how to write headlines that go viral, you will look for resource pages on headline writing and you’ll email the author of them, or the editor of the site and say “Here is a great post that… I love your resource list and here is an addition that I think might make it even better” and then you send them a link to yours.

Jon: Mm-hmm! So that’s just one way, I mean the other way is think about who are the great experts on this topic. For that, I may go on Twitter too and hit up some of the top SEO people. Because Google+ is a big part of SEO. So you’ve got to think about who are the influencers related to this topic. And number one, let them know in a friendly, non-pushy way about the content. But the other thing is build a relationship with them too. Now, fast forward six or seven years from when I got started, now I know a lot of the top people. I added it up, somebody asked me the other day about how I was promoting, my closest friends on Twitter have over 2 million followers combined.

Andrew: Mm-hmm.

Jon: So that means if ever I want to push a post, I can ask any of those people for a link and if it’s relative to their audience, they’ll give it. So that makes it extremely easy to get traffic. So building those relationships, it took me six or seven years. But once you do build it, it stays a resource forever.

Andrew: Now I want to ask about this in URL parameter, but first, when you say that you did 100, you can’t type, right? You’re not moving your fingers, how are you doing it?

Jon: I use voice dictation software.

Andrew: Oh my goodness! That means it takes you even longer than it would me to do it!

Jon: Well I’ve gotten pretty good at it…

Andrew: Okay.

Jon: ..so I might be able to do it even faster than you do it now.

Andrew: I see.

Jon: But I do that. I also have a custom built lip operated mouse…

Andrew: Okay.

Jon: …that I use that a guy built in his garage for me. So yeah, I can do everything on the computer pretty much just as well as anyone else. What I do with the post, when I was a beginner, I would take whatever amount of time I spent on the post, and I would multiply it times 10, and that was how much time I spent promoting the post. So if I spent five hours writing a post, I spent 50 hours promoting the post. Now that my blog is big, it’s the opposite ratio. But in the beginning, when you’re just trying to get your tribe started, I really think people don’t put nearly enough effort into promoting the good content that they’re publishing.

Andrew: I think you’re right. I know that I need to be spending more time on that, and you’re really selling me on it. Here’s the thing that I started typing in before, what is inurl resources, no spaces, then I would put in, let’s say, podcasting at this point. No need for the word search. Just like that.

Jon: Yeah. What that does is that searches for URLs where there’s the word resources in the URL.

Andrew: Right, I see.

Jon: Another one is in-title, so if you do in-title resources it’ll show pages where resources is in the title of the page.

Andrew: Yeah, so in-title brings up Mashable’s podcasting toolbox, 70-plus podcasting tools and resources. A lot of this we saw earlier. What else is it? If it’s inresources, how about audio recording? Recording and music production resources, got it. Audio recording center. All right, and then I just keep looking. Useful links, resources related to audio and video recording, got it. Wow.

Jon: That’s by far the easiest place to get links. Brian Dean taught me that. He’s a brilliant SEO guy. The reason why is those are people that are looking for links. You feel like a lot of times when you ask for a link that you’re bothering somebody. Well, these are people that you’re helping them keep their guide up to date, so you’re doing them a favor by emailing them your content. It makes the whole relationship much better.

Andrew: All right, we’ve got a bunch of great ideas here. I’m going to follow up with you to get the list of places where we can get guest blogging opportunities.

Of all of these ideas that we’ve gone with, if someone were to start with one and say you know, I just want to see what works, I want to just get a little bit of a bump, which of these would you recommend they start off with? I guess Coming Soon page, if you haven’t started you’ve got to do that.

Jon: Yeah, yeah, you’ve got to start with an opt-in page of some sort whether it’s a Coming Soon page, or if you have an incentive to offer people to join your email list, that’s great. But, at the very least start with the Coming Soon page. Then, I would drive traffic to it with guest posts.

Andrew: And guest posts.

Jon: Yeah.

Andrew: Can they go to… I bet to get a feature box they could probably go to elto.com. Until you create the plugin, they could go to elto.com and just pay someone there to add it to their theme.

Jon: Yeah. I mean it’s pretty cheap. If somebody charges you more than $50 to do it you’re probably paying too much.

Andrew: More than $50, so $50 or less is what we should be paying a developer to do it.

Jon: Yeah, probably so.

Andrew: All right. By the way, I do talk to a lot of people who I give advice to on how to do interviews, and I see this over and over. They say I want to bank ten interviews, I want to bank 20 interviews, and then I’ll roll them out. That way I know I could be consistent with it.

I know from my experience that they should publish the first, get some feedback, get some traction, then do the second. I have all kinds of reasons why they should do that, but I hear so much of it that I’m thinking maybe I’m wrong, maybe they’re not listening to me for a reason. What do you think I should say to someone who says I want to bank ten interviews before publishing my first?

Jon: I think that instead of trying to be perfect in the beginning it’s better to iterate and get feedback. I mean in some ways that’s why the Coming Soon page works, because it’s something that you could set up in a few hours and you can start driving traffic to it and getting subscribers.

Then, as they come in, the other thing that happens with a lot of bloggers is they start getting feedback from people that come to their Coming Soon page and subscribe, and they completely change what they thought they were going to blog about just based on what people were saying.

Andrew: Yeah.

Jon: So, I think giving yourself permission and even expecting to course correct once you start to build that audience and once you start to find out what they want, that’s iterating based on learning what your customer wants. It’s very similar to building a company.

Andrew: Yeah.

Jon: You hear about the lean methodology. Following a lean methodology with your content is a really smart thing to do.

Andrew: All right. I think a lot of people in my audience are going to be cyberstalking you and just trying to figure out what you’re doing and deconstruct it. The best place for them to start after having gone through this conversation, I can say for sure, is to boostblogtraffic.com and enter their email address right here.

If they do, I don’t think it’s going to make a dent in the number of email addresses that you have. You’re already sitting on a really big pile. But, what it’ll do for my audience is it’ll allow them to see how you engage your audience, how you follow up with someone who submits an email address. They’ll see your writing and they’ll see what you do, what’s that magic that gets people into a webinar and gets them to buy from a webinar. I really hope people will go and do that.

Thank you so much for doing this.

Jon: Thank you. It’s been an honor.

Andrew: This is fantastic. It’s great to meet you. Thank you all for being a part of it. If you got anything of value from this interview, please find a way to tell Jon. I’m going to do it right now. Jon, thank you, I got a lot out of this interview.

Jon: Thank you.

Andrew: Thank you. Thanks for teaching my audience in this course. Thank you all for being a part of it. Bye guys.

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Master Class:
How to launch your idea
(In just 90 days)
Taught by Scott Duffy of Launch!

Master Class: Launch your idea


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Transcript

Andrew: This session is about how to launch your idea. It’s led by Scott Duffy, founder of SmartCharter, an online booking tool for private aviation which was acquired by Richard Branson’s Virgin Group.This session is based on the ideas from his book. Let me hold the book right up right here. “Launch”, the critical 90 days from idea to market. I’ll help facilitate. My name is Andrew Warner. I’m the founder of Mixergy where proven founders, like Scott, teach. Scott, welcome.Scott: Hey, it’s great to be here. Thank you for having me. It’s great to be on the show.Andrew: It’s great to have you on here. I just saw this article. This is an old post from TechCrunch from 2007 by Michael Arrington announcing how Virgin Charter, Richard Branson’s company is launching a new product, and the backbone of that is Richard Branson’s acquisition of your business. You created a product for your users, and what did they say when they first got to play with it?

Scott: Well, it was interesting because we had this idea, and we had a bunch of smart people on the team that really felt that we had the perfect solution for a problem that we’d identified.

Andrew: Uh-huh.

Scott: And the problem was that no one had really effectively aggregated supplying demand in the airline, in the private air charter business. So the big idea of private jets.

Andrew: Mm-hmm.

Scott: And we went about creating a product roadmap, building the, you know, an alpha version and a beta version. We went out and we talked to lots of customers. We talked to stakeholders on both sides of the table. We talked to operators that wanted to basically sell time on their aircraft, and we talked to buyers, people that actually wanted to fly on those aircrafts.

Andrew: All the things that you’re supposed to do, talk to everyone, get their feedback, yeah?

Scott: That was it. And the more feedback that we got, the more convinced that we were that we were on the right track. And so we started building and building and building, but kind of a crazy thing happened. We finally had our first version ready to take to market, and we got it in customers’ hands. These are the same people that told us to deliver exactly what it was we built.

What we found is, again, once they started to play with it and really use it, they wanted something that was a lot different. What they learned is there are different aspects or different features of the product that they thought that would be more helpful. And so where we were focused on building the back end of the product, what we learned is that our customers really wanted more assistance once they used it on the front end.

And one of the lessons I learned in that experience as an entrepreneur is, you know, instead of building everything, instead of trying to make things perfect, it’s important when you’re launching just to get out one thing, the simplest thing, like what we call the minimum viable product. Get it into people’s hands and get them using it because sometimes buyers are liars. Not because they want to mislead you but because when they start to actually use it they make new distinctions.

Andrew: All right. And that’s a good point to start off with, and we’re going to talk about how to do this right, and we pulled out the team here at Mixergy, pulled out some ideas from your book to talk about.

Scott: Cool.

Andrew: The first one is to change your mind, change to the mind of a beginner so you don’t waste time with assumptions. And here’s something that I saw. I saw this Infographic online. I get all my facts from Infographics, it seems, but there’s one interesting thing here. In 2001 annual U.S. revenue from the storage industry is $22 billion.

Scott: Yeah.

Andrew: That’s huge. That’s a huge amount.

Scott: Yeah.

Andrew: You saw that and you said, “I’m going in. I know business. I’m going to go invest in it, and what did you do that kept thinking about it?” What was the mindset you went in with?

Scott: Well, I mean, I assumed that I had landed on just this killer idea.

Andrew: Yep.

Scott: Because you had this big industry, this multi-billion dollar industry, but what was interesting about it is that the biggest player in the space which was public storage at the time only owned 3% market share.

Andrew: Mm-hmm.

Scott: So I said this is an amazing opportunity. We can go out there, and we can build a big national brand by simply acquiring existing facilities and calling them up. But when I jumped into the space, I started to execute my plan here which I learned. What I learned is that the majority of self- storage owners just have one facility, sometimes two.

And the thing is that the facility isn’t just for business, but in many cases it’s their home. It’s where their family works. Right there they’re really invested in this place. And so as I went out there and I tried to negotiate one facility at a time, man, this is going to be a lot harder than I really thought it was going to be. Again, to roll these businesses up and to build this big national brand.

Andrew: I see.

Scott: And I spent so much time, and I spent so much money trying to push through my agenda. But what I learned at the time is that I learned there were other people that were playing in this space, people that had a lot more experience in storage, and they knew this: that the quickest way to grow in that space wasn’t through acquisition. The quickest way to grow was by building your own facilities from the ground up. And if you had two or three or four or five? You could create mass value from people like me that we’re trying to acquire.

And one of the things again, that I learned in that experience was this: sometimes, as an entrepreneur, when you see a problem, it’s so obvious, and it’s going to be so simple to solve. Well, maybe you should take a deep breath and you should step back before you decide to execute. Because there’s probably a really good reason why that problem hasn’t been solved yet. And I think that from my standpoint, if I had done a little bit more homework, and if I aligned myself with people that came from the industry, that maybe knew some of the distinctions that I made once I started to spend money, I would have probably taken a different approach.

Andrew: That makes sense. I do see myself sometimes jumping into an industry and saying, or just assuming that everyone is like me. And so the thing to do is to go in without any preconceptions and say how does this work? Who runs it? What’s possible here?

Scott: Well it is. I’m a big basketball fan, as you can probably see behind me.

Andrew: I do, yeah.

Scott: I’m a huge NBA fan, a huge Lakers fan. Now, I remember having the chance to meet Phil Jackson one time, and he was talking about the importance – whether it was in basketball or business – of approaching everything with what he called a beginners mind. Which is really a Buddhist concept, comes from a word called shoshin. Approach everything as if you’re a beginner. And I’ll tell you, sometimes that’s challenging for entrepreneurs that have been successful in other businesses or other industries, that are trying to set out on something new. Because what happens is they tend to believe that because they’ve been successful again, in one business or one industry, that that success is going to easily translate into another.

Andrew: But what about this, Scott? You did come at it from a good point of view, you said I’m going to roll this up, right? Wayne Huizenga famously rolled up Blockbuster Video, a lot of it was mom and pop stores before he acquired it and then he built it into this billion dollar empire, multi-billion empire. And so that idea is a good one. How do you come into a space with an idea that makes sense, that you’re bringing in from the outside that space so it’s fresh, and at the same time, not impose your assumptions on it?

Scott: Well, I think that you start by building a great team. And you team has to include not only people that look at the problem with a fresh set of eyes, but also people that have been in the industry, that can provide perspective, that might be hard for an outsider just jumping in to latch onto a media link.

Andrew: I see, so if you got into the storage space today or were thinking about it, you might recruit someone who’d already been in it and said, “Look, here’s my idea, help me execute it.” And that person would say, “You know who’s in this space? It’s mom and pop, this is their only job. They sleep virtually in the space.” Gotcha, okay. So that’s how you would get both your outsider’s perspective and an insider’s understanding of what’s going on there.

Scott: Right. The other thing that’s important to do is to pay attention. Really do your homework, particularly if you’re stepping into a new space with regard to who’s already trying to solve this problem in a similar way as you are?

Andrew: Yep.

Scott: Maybe somebody hasn’t, but in the event that they have and, that’s awesome, because you can go and you can learn so much. And you can apply what you learn to this new space, and don’t think that because again, you’ve been successful in another area, that you’re smarter than everyone else. Or your team is smarter than everyone else, and it just doesn’t matter what they’ve done. It absolutely matters, and you absolutely need to apply the lessons that somebody else has learned. You need to ask a lot of questions.

Andrew: All right, and that’s why we have you here, as a person who’s done it, to come back and talk about what you’ve learned so that we can learn from you. Let’s go back to the Big Board and the next big idea for us to cover is to have a clear vision of where you’re going, and this is a man who did it. Let me see if I can do justice to what he did. Look at that photo, I actually Googled his name. Can you see that up on your screen?

Scott: I’m not seeing it yet.

Andrew: All right, it’s going to take a moment for it to come up to you. This is Doug.

Scott: Oh, yeah.

Andrew: Brignole? I’m actually going to Google him, or show the Google image search of him. Look at this guy. This is what he looked like a few years ago. Here he is again, a more recent photo. The guy’s just cut up!

Scott: Yeah, he’s unbelievable. Doug Brignole.

Andrew: Doug Brignole is how you pronounce it. So at 14 years old, he decided to join a gym. He got into bodybuilding around 17 and he did something with tracing paper to help him not just visualize, but to see his vision. What did he do with tracing paper and how did it help him get to this body that we’re looking at right now?

Scott: Well, it’s an unbelievable story because, like you said, as a young kid he got kind of addicted to bodybuilding.

Andrew: Mm-hmm.

Scott: When he was 17, he didn’t win, but he came in second in the Mr. California competition.

Andrew: Yep.

Scott: And it drove him so much, he’s like, I got to set my goals higher. I want something more. And so his new goal was to become Mr. USA. And the way that he went about it is this: In addition to being this amazing body builder, Doug is an incredible artist.

Andrew: Mm-hmm.

Scott: Like if you go to the library, to a bookstore, and you see those books with images that people have drawn of the human body?

Andrew: Mm-hmm.

Scott: That’s also what Doug does. So what he did is, he got one of his buddies, they grabbed a camera and he stood in-front of a wall and he posed, he flexed. And he took a picture, and he blew it up, and then on top of it he put a piece of tracing paper.

Andrew: Mm-hmm.

Scott: And he took that tracing paper, and he drew on top of the image from that photo, exactly what it was he was going to have to look like in order to win the competition.

Andrew: Unreal. Uh-huh?

Scott: It was so amazing. And then what he did is this: is he took that and he put it in a frame. And this is at a time, I mean this is 25, 30 years ago, and this is at a time when there wasn’t protein powder in every store . . .

Andrew: Mm-hmm.

Scott: . . .and an energy bar you could pick up everywhere. And so body builders made all their own food. And he put this picture on this table where he sat down with the food that he made, 5 times a day, and he’d take a bite, and what he’d do is this: he’d take a bite of the food, he’d look at the picture, and he’d say, “That’s what I’m going to look like. I’m going to make that happen.” And he did that for 5 months.

Andrew: Wow.

Scott: And so I remember I asked him, I said, Doug, so is that it? Is the key to success, in getting your big goal, is it like drawing the pictures and getting absolutely clear? Is that all you need to do? And he said no. He said that’s not it. He said, it’s important to have a goal, but what you really need to do is have an effective strategy with regard to how you’re going to be successful, how you’re going to do it. And the way that Doug did it was this: he asked himself these questions. Now that I know my goal, now that I know what it is that I want to achieve, what are all the things that I’m going to need to do in order to achieve it?

And he literally created a plan, all the things he had to do, to build his muscular system the way it needed to look. How he’d have to eat. How he’d have to rest his body. How he’d have to lift. The second thing is: what are all the things that could get in the way? And the third is: what are the things that I’m going to need to do in order to overcome it? And that’s how he created a plan. And then what he did is, every two weeks, he got in front of that same wall and had that same friend take a picture in the same pose.

Andrew: Wow.

Scott: Because it’s so important to be able to measure your results and see how you’re doing. And he compared, he’d blow the picture up, and he’d take that original piece of tracing paper and he’d put it right over the updated photo. And he’d be able to see how he was doing. He might be able to see that his chest was a little bit too big, or his arms were too small, and he would be able to make adjustments. So, the punch-line here is this: that Doug actually did become Mr. USA, he won the competition. But what’s really amazing is that if you go to his house today, he went home that afternoon and he had that same friend have him stand in the same pose and take the same picture, and when he laid the tracing paper on top, the two look absolutely identical.

Andrew: Unreal. So, as entrepreneurs, how do we use this? Does this mean that we take a picture of Richard Branson’s office and have someone on fiver Photoshop our face behind the desk so that we can picture where we’re going to be? Or, what do we do more practically with what he did, because it did really work?

Scott: Well, I think that the first thing is, again, getting clear on what it is that you want. And I think that one of the challenges that entrepreneurs have is, particularly first-time entrepreneurs, is that they may not know exactly what it is that they’re aiming for, right? And that’s a real problem. And again, once you know what it is that you want, when it comes to creating a strategy, you don’t need to create a big, 50 page plan. You don’t need all that weight. All you need to do is answer those three simple questions: What are the things that I’m going to have to do? What’s going to get in the way? How am I going to overcome it? And then checking on your progress, and I suggest doing that once a month. Checking on your progress, ask those same questions, and update when it’s appropriate.

Andrew: All right, let’s go on to the big board of one more time. There it is, the next one is to check in with your significant other. Make sure you’re on the same page, and you tell the story about this couple. She was pregnant. Her father sat him down and said what? Who is this?

Scott: This is Howard Schultz. Meeting Howard Schultz was one of the most amazing moments for me, personally, because of what I learned in the experience. I was a part of an entrepreneur group, and we were hosting an event with Howard. He was going to come and speak to a group of probably 200-300 other entrepreneurs. I remember I was so excited to meet this guy, because I’m such a big Starbucks fan, and an amazing fan of what he’s been able to build. So many other entrepreneurs… My office has been Starbucks locations from time to time.

I remember that when Howard spoke, he did an okay job, and he talked for about an hour. But I think I walked away from his core speech feeling like, man, this is like a press release. I can’t relate as an entrepreneur to so much of what he’s saying. There was some Q & A at the end of the session, and the last person that got up asked, “Howard, I’m a huge fan of yours, and I really came because I wanted to learn.” And he said, “But here’s the thing. When you talked about going through difficult times in your life, you had a billion dollars in your pocket during the time you talked about. As entrepreneurs, most of the people in this room, when they’re going through difficult times, they’re just trying to figure out how to feed their families.” And he said, “So, Howard, I really respect you, but I just don’t think I can relate anymore.”

That was it. He just went and sat down. But the thing is, I think he captured the feeling that everyone else had in that room. In that moment, Howard Schultz made me an even bigger fan. What he did was he stood up from his chair and he walked across the stage, and he said, “You know what? I am exactly like you. I want to tell you a story.”

You see, when Howard was a young guy he started his career as a salesman. One of the accounts that he called on was the original Starbucks store up in Seattle. He because so enamored with the store and what they were doing, he asked for a job. He ended up getting hired as a marketing guy, and he was entrepreneurial, and he had a big idea. His idea was that he wanted to put an espresso machine behind the coffee bar. And they said no. Howard was so bummed out. He was so dejected, that he decided to leave Starbucks. He went on a trip to Europe, found another brand that he wanted to represent, came back home, and started a new company.

Now, about 18 months later he got a call. The call was from his father-in- law. Howard really wasn’t surprised, and his father-in-law said, “Howard, look. I love you, and I totally respect you. This is coming from the bottom of my heart.” He said, “You have been working on this for the last 18 months, and you haven’t been getting a paycheck. Like so many of us entrepreneurs, we’re starting something new. So, here’s the thing. Your wife – my daughter – is the only one paying the bills, and she’s six months pregnant.” So he said, “Respectfully, maybe it’s time to put this on hold. Or maybe it’s time just to let go of this altogether.”

Howard closed up, and he went home and he talked to his wife. He told her about the conversation. He said, “Here’s the keys. I’m ready to give it all up tomorrow.” Then, at that moment she gave Howard what I call the Rocky speech. That speech that Adrian gives Rocky before the big fight. She said, “Look. Howard, this isn’t just your dream. It’s our dream. This isn’t just your vision, it’s our vision. And we’re going to figure out, whether it takes us all night staying up, how we’re going to get through this together.”

What I learned in that experience was this: As an entrepreneur, I’ve always believed that I was the most important person in every company that I started or ran. That’s because I had the fancy titles, and it was my idea, and all that stuff. But what I learned is, the most important person in every company is the person that we come home to, or the people that we come home to. It’s our families. It’s our friends. It’s our significant others. All the people that are impacted financially by what it is that we’re trying to do, or with regard to the amount of time it’s going to take for us to be able to get this venture off the ground.

By the way, these are people that we expect to support us unconditionally, and a lot of the time they’re at the same amount of risk as we are, because they’re invested financially. What I’ve learned as a result of that experience is this. There are three things and I think these are the important things that entrepreneurs need to do, they want to be a successful business. You’ve got to deal with your spouse or your significant other.

The first is this you have to be on the very same page from the very beginning with regard to how much money and how much time you’re willing to risk and your partner is willing to risk. I mean, I’d much rather be on the same page with my partner and risk less than risk more and have them up like worrying and have knots in their stomach all night. It just doesn’t any sense.

The second thing is you need to be on the same page with regard to your partner’s communication strategy. And here’s what I mean. Sometimes these people, by the way, you know, I used to call the most important person the chief executive officer, I call these people the chief venting officers in our company, like the CEOs. They just hear us vent all the time and, again, they’re supposed to be supportive.

You need to find out do they want to be in this business and experience it blow by blow with us? Or is that too much? The emotional ups and downs? Do they want to know less, and maybe it makes sense to update them once a week versus once a day or once an hour.

The last thing I learned is this. My wife, Rachel, taught me this lesson. The way that you spell love with an entrepreneur is T-I-M-E. Well, we have to make time for all the people that sacrificing along with you, you know, and letting you go out there and try to live your dream.

Andrew: There he is.

Scott: There he is.

Andrew: He built a $2.2 billion empire, according to Forbes Magazine all because he got, or not only because, but largely because he got on the same page with the way he did with his wife, with the way you did with your wife. And I found the same thing for myself, whether it’s for work and I needed her to understand and support what I’m doing, or frankly even just exercise or take some time for myself. If I say, Olivia, I need some help getting to this. It’s so much better than arguing with her and trying to go on my own without getting her support and buy-in.

Scott: It’s true and I can only say this. I think that, you know, for years we’ve been taught to be successful as an entrepreneur to be own a great business, the most important thing we need to do is kind of like focus on, you know, building a great team. And we have to learn how to raise capital and be great leads and, you know, we’ve got to sell all these strategies and tactics around building a business, the business stuff.

Personally I think that’s about 15% of what it takes in order to succeed as an entrepreneur. I think the majority 85% is nailing the personal stuff.

Andrew: With other people, yeah.

Scott: Yeah.

Andrew: My wife doesn’t account for 85% of my success, but I see what you mean. With all these other people that I’m working you, you and me, we had an issue where we struggled to connect today because I was connecting to the wrong Skype name and you were sitting waiting. It’s in those friction moments the way that we respond and the way you responded so graciously and the way that we were able to connect. I think that the relationships are formed that end up determining whether we can succeed in our partnership or not.

Scott: Yeah.

Andrew: And I really appreciate the way that you handled that. Speaking of partnerships, I’m using that as a segue to get to the next big point. You say partner with large companies, and you guys did that at Quote.com. Look at what my team got. It came from Ann Marie. You were talking in your book about Quote.com. You were part of the launch team, so she went back to the way back machine, didn’t capture Quote.com so well. It did capture it well enough. I wonder if people can even see on the very bottom here. There you go. See if people can see this. I’m going to zoom. I’m going to keep zooming in until we get it clear.

Be sure to check our partner page for information on joining the Quote.com network.

Scott: Wow.

Andrew: You guys were huge on partnerships. How did you do it back then?

Scott: We were. Well, we were a company that was boot strapping. We were a company that had very little capital, and we were going into a new market. What most people don’t realize we take it for granted today because we see stock quotes all over the Internet. We were one of the first companies to get permission from the exchanges to do stock quotes online.

So we were kind of creating the market to find it and being the leading brand, and but we still, despite all that, didn’t have a lot of money. I remember going to New York and traveling to different places trying to sell stuff to advertisers and using my frequent flyer miles that I accumulated over the years just to make those trips.

Andrew: Really? Uh-huh.

Scott: And here’s the thing. What I learned is this is that if you are stratic [sp] and you’re smart with regard to who you partner with early, you can grow your company farther faster and with far less capital than you ever imagined. And with Quote.com here’s how we did it. We asked ourselves, “What businesses out there have the same type of customer, the same target customer that we do, but they’re doing . . . and what I’ve learned as a result of that experience is this. There are three things and I think these are the important things that entrepreneurs need to do, they want to be a successful business. You’ve got to deal with your spouse or your significant other.

The first is this you have to be on the very same page from the very beginning with regard to how much money and how much time you’re willing to risk and your partner is willing to risk. I mean, I’d much rather be on the same page with my partner and risk less than risk more and have them up like worrying and have knots in their stomach all night. It just doesn’t any sense.

The second thing is you need to be on the same page with regard to your partner’s communication strategy. And here’s what I mean. Sometimes these people, by the way, you know, I used to call the most important person the chief executive officer, I call these people the chief venting officers in our company, like the CEOs. They just hear us vent all the time and, again, they’re supposed to be supportive.

You need to find out do they want to be in this business and experience it blow by blow with us? Or is that too much? The emotional ups and downs? Do they want to know less, and maybe it makes sense to update them once a week versus once a day or once an hour.

The last thing I learned is this. My wife, Rachel, taught me this lesson. The way that you spell love with an entrepreneur is T-I-M-E. Well, we have to make time for all the people that sacrificing along with you, you know, and letting you go out there and try to live your dream.

Andrew: There he is.

Scott: There he is.

Andrew: He built a $2.2 billion empire, according to Forbes Magazine all because he got, or not only because, but largely because he got on the same page with the way he did with his wife, with the way you did with your wife. And I found the same thing for myself, whether it’s for work and I needed her to understand and support what I’m doing, or frankly even just exercise or take some time for myself. If I say, Olivia, I need some help getting to this. It’s so much better than arguing with her and trying to go on my own without getting her support and buy-in.

Scott: It’s true and I can only say this. I think that, you know, for years we’ve been taught to be successful as an entrepreneur to be own a great business, the most important thing we need to do is kind of like focus on, you know, building a great team. And we have to learn how to raise capital and be great leads and, you know, we’ve got to sell all these strategies and tactics around building a business, the business stuff.

Personally I think that’s about 15% of what it takes in order to succeed as an entrepreneur. I think the majority 85% is nailing the personal stuff.

Andrew: With other people, yeah.

Scott: Yeah.

Andrew: My wife doesn’t account for 85% of my success, but I see what you mean. With all these other people that I’m working you, you and me, we had an issue where we struggled to connect today because I was connecting to the wrong Skype name and you were sitting waiting. It’s in those friction moments the way that we respond and the way you responded so graciously and the way that we were able to connect. I think that the relationships are formed that end up determining whether we can succeed in our partnership or not.

Scott: Yeah.

Andrew: And I really appreciate the way that you handled that. Speaking of partnerships, I’m using that as a segue to get to the next big point. You say partner with large companies, and you guys did that at Quote.com. Look at what my team got. It came from Ann Marie. You were talking in your book about Quote.com. You were part of the launch team, so she went back to the way back machine, didn’t capture Quote.com so well. It did capture it well enough. I wonder if people can even see on the very bottom here. There you go. See if people can see this. I’m going to zoom. I’m going to keep zooming in until we get it clear.

Be sure to check our partner page for information on joining the Quote.com network.

Scott: Wow.

Andrew: You guys were huge on partnerships. How did you do it back then?

Scott: We were. Well, we were a company that was boot strapping. We were a company that had very little capital, and we were going into a new market. What most people don’t realize we take it for granted today because we see stock quotes all over the Internet. We were one of the first companies to get permission from the exchanges to do stock quotes online.

So we were kind of creating the market to fine it and being the leading brand, and but we still, despite all that, didn’t have a lot of money. I remember going to New York and traveling to different places trying to sell stuff to advertisers and using my frequent flyer miles that I accumulated over the years just to make those trips.

Andrew: Really? Uh-huh.

Scott: And here’s the thing. What I learned is this is that if you are stratic [sp] and you’re smart with regard to who you partner with early, you can grow your company farther faster and with far less capital than you ever imagined. And with Quote.com here’s how we did it . . .something else?’ And maybe that something else is very closely related to the product that we had to offer.

Andrew: Mm-hmm.

Scott: And so, for us the first thing that came to mind was the new online stock brokerages that were emerging. So, we went to them and we asked a question, because at that time the only thing that these brokerages could display was your portfolio. You know, they couldn’t show you real time stock quotes. So, we went to them, we said, “Hey, what if we did this? What if we helped each other?” And the way we did it is, we provided the stock quote mechanism for you, and we linked it, we built it into your site. So, when user was in your site, they could not only see your portfolio, but they could get a stock quote. Maybe that would not only encourage them to stay longer, but it might get them to trade more with you.

And, what if we were to maybe make that stock feature happen on a code branded page. So, you win and we win, in terms of branding. What if we sold advertising on those pages and we split the revenue?’ So, we went up to all of the major brokerages and you know, virtually overnight we had over 100 partners across the internet. It was everything from the big portals, to the big news sites online, to the big stock brokerages. Within just a matter of about six months, we became not only one of the fastest growing sites on the internet through partnerships-

Andrew: Yup.

Scott: Which, by the way, cost us very little, but also one of the largest revenue generating sites on the internet. What was really, you know, valuable in addition to getting this reach for quickly, and the ability to kind of shortcut our way into generating revenue was, I believe that companies are bought and they’re not sold. If you create the right partnerships up front, and build really strong relationships and continue to add value, you may have be locked yourself in early to a company that might be real ripe to acquire you down the road.

Andrew: I see. I see this article here, where is that? There we go. This is what ended up happening to the company. This is an article from 1999, “Lycos ended up gobbling Quote.com up for $78 million.” You mentioned sales so I started looking through the article and there it is. I think, yeah, 1998 it pumped out sales of $12 million.

Scott: Mm-hmm.

Andrew: Which, at the time was especially huge, because no one was making any sales. Everyone was just after eyeballs.

Scott: Well, you’re right. When we launched in 1995, 96, I believe that we kicked ourselves off as a top 10 (inaudible) sales site on the internet, so it was really remarkable what partnerships did for us. By the way, it wasn’t just that Quote.com were experienced the value of these types of partnerships and what they can do for a company at an early stage. I was in a company called Sports Line USA.

Andrew: Mm-hmm.

Scott: And when Sports Line USA launched, it provided sports information to people that were betting on events.

Andrew: Uh-huh.

Scott: And ESPN around the time, decided to come online, and the founder of the company, Mike Levy, had a great idea. He said, well you know, the other networks are going to want to come online as well. So, what would happen if we took this great content, this great news and information site that kind of has a different purpose now, but we were to go to one of these larger brands and provide the website, they provided the branding, and that’s how CVS Sports Line, which is now CVSsports.com is born. While I was in Zoom.com, the same thing happened with the NBC internet. Again, SmartCharter to Virgin. So, the power of partnerships is just amazing. But, here’s the thing. Don’t ever expect that bringing in a big partner is going to make your business better.

What you need to do is build a really strong, solid foundation for your business before you go out and bring a big partner and get involved with them. The reason is, a big partnership is going to bring in more users and more traffic and more stuff to whatever it is you’re doing, and can expose your flaws faster. So again, make sure that you built a good fundamental business first, and don’t think somebody else because of their brand or their distribution, is going to make you good.

Andrew: Sports Line USA. That’s the name of the company you were part of it?

Scott: Yeah.

Andrew: Wow. Did you own shares in these businesses? Did you own shares of Quote.com at the time of the sale?

Scott: I did.

Andrew: You did.

Scott: Actually, the time of the sale, I did not, I don’t think that I did. I think that I had sold them before.

Andrew: Oh no.

Scott: But, Sports Line I did, and the Zoom and all those others, yes.

Andrew: Did you do well? Did you become independently wealthy before you started your charter company?

Scott: Yes.

Andrew: You did? Wow. Way to go.

Scott: Yes.

Andrew: Okay. Let’s go back to the big board. Don’t let pride hurt your business. Another idea we pulled out of your book, “Launch”, and you talk about this woman, there she is.

Scott: Michelle.

Andrew: Yeah.

Scott: Michelle Patterson, sure.

Andrew: Michelle. What happened with Michelle?

Scott: Well, Michelle is a very successful event planner.

Andrew: Mm-hmm.

Scott: And a couple years ago, she had an opportunity to pick up an event, called California Woman’s Conference, and take it over. The California Woman’s Conference for years and years and years, has been one of the most pristine conferences in the United States. It has been put on by the governor of California’s wife going back all the way back to Governor Deukmejian.

Andrew: Mm-hmm.

Scott: And again, the last governor’s wife decided not to continue it forward, so Michelle took it on. She really stepped in some big shoes. I remember when Michelle got started, she was so excited, and she was so enthusiastic, and she painted this amazing vision for all of us. I remember that I’d check in with Michelle from time to time and say, “How are things going?” And, it’s really funny because I think that when people ask entrepreneurs, “How are things,” it’s like we think that one answer, and that’s like things are great.

Andrew: Yeah.

Scott: I mean, when are you going to hear an entrepreneur tell you that things just are not (inaudible).

Andrew: Driving me crazy. I have people over here for scotch, I ask, “How are things”, it’s crushing it or killing it?

Scott: Yeah.

Andrew: After the third glass, it’s, “Hey you know what, (inaudible) having a little bit of trouble.” Yes, but you’re right. Up front, people always say everything’s going well.

Scott: Well, they do, and I think there’s a couple reasons why. I think one is, as entrepreneurs, part of our job is to be carrying the company flag. Andrew: Yes. We have to be the cheerleaders. You don’t want to go to a game where the cheerleaders say, “Hey, this school sucks.”

Scott: That’s right.

Andrew: Right.

Scott: That’s right. In addition to that, being an entrepreneur can be a really lonely job. I mean-

Andrew: Yup.

Scott: You know, if something isn’t going right, who do you talk to? You don’t necessarily want to bring it home to that chief venting officer, maybe they’ve had enough, and you don’t necessarily want to take it to their friends. They’re there for something else (inaudible) as some of your close friends, and we certainly can’t take everything to employees. So, you kind of keep it all inside, even though you know that the story you’re telling others isn’t necessarily congruent with what’s happening in the business.

Andrew: Mm-hmm.

Scott: And that was the case with Michelle. I remember as we got closer to the event, and I’d ask her, how are things, and she’d say, great, she called me about 17 days, 18 days before the conference was ready to start, and she said, “Scott, I got a big problem.” I said, “What?” She said, “Let me tell you what’s really going on with this conference and this business.” She said, “The investors that were supposed to put in money didn’t come through.” She said, “Many of the sponsors or advertisers ended up not coming through or following up with their commitment,” and she said, “We’re effectively broke.” She said, “In fact, I’m a million and a half dollars in the whole, and I’ve got 17 days to figure it out, or they’re not going to open the doors.”

Andrew: Wow.

Scott: And so, I remember I got up from my desk and I drove over to Michelle’s house, and we started to talk about this problem and how we were going to solve it. That night, she told me that she was about to go to bed, and she talked to her husband. She said, “You know, I feel so terrible, I feel so guilty.” She said, “I feel like I’m going to bankrupt this entire family, and you’ve all been so supportive.” And she said, “And I think because I’ve just been too prideful to let others know what was going on and get their help.”

And he said this, “You know, Michelle,” he said, and this is just like Howard Schultz’s wife, you know? He said, “Michelle, here’s the thing. You know a lot of really successful people, and the odds are, many of them have been in the same exact position. You should just reach out to some of them and let them know what’s going on before you decide to give up.” And so, the next morning, the first call that she made was to the person that ran the conference center where they were going to hold the California’s Woman’s Conference. Michelle went over and saw them, and she started to open up to him about the problems. He stopped and he said, “Michelle, I just have one question for you. What’s your favorite flavor ice cream?” And she said, “Strawberry”.

With that, they went out and they grabbed strawberry ice cream, and he said, “You got a partner in this.” He said, “We’ve all been here before. Let me help you to figure it out.” She went home, after that meeting she felt this renewed sense of confidence, and with it she developed a list of the 50 people that she believed she knew in her network that could help.

What was interesting is that when she called them they didn’t answer the phone, listen to the story, and say things like, “How could you let that happen?” Or, “Why would you ever…?” Instead, what they said were things like, “Why didn’t you call me sooner?” Or, “I’ve been in that exact same situation.” Or, “Boy, let me tell you something, because I’ve been in a lot worse.”

As a result, these people started to work together to help Michelle. And guess what? She went from $1,500,000 to $150,000 in 15 days, and she was successfully able to open up and execute the Women’s Conference and have a great show. This year, it was even bigger in Long Beach. Again, I think that as entrepreneurs what’s really important for us to do when we’re having trouble is to go to people, and specifically look for people who have built successful businesses – the kind that we aspire to have or to build like – and ask them for assistance. Ask them for guidance, because the odds are that they’ve been there themselves, and they’re going to be more than willing to share and help you solve the problem.

Andrew: Yeah, but we have to be comfortable letting down the guard and not constantly saying that everything’s going well, that we’re crushing it. And she did do a fantastic job with the event.

Scott: You know, one of the real values of Entrepreneurs Groups – I always recommend that people do join Entrepreneurs Groups and Masterminds – is that if you can get into a group where people agree to keep things within that group confidential, and to be open to share with one another, it can be an incredibly valuable tool, because it will give you the confidence to really let others know what’s happening. Which, by the way, is going to be great for you, and if nothing else for your health, because you’re able to let that out. And also, you’re going to get other people again that are helping to be part of the solution for you, and that will give you confidence.

Andrew: Cool. By the way, you’re an incredible storyteller. Sometimes, actually… I don’t know if you noticed it, but there are times when it took me a little while to adjust the screen. It’s because I’m lost in the story. Even though I’ve read it, I’ve got it here in my notes, I’m clearly teeing off a specific story, I see you tell the story and it’s just amazing.

Scott: You know, when I was in college I ended up leaving college a little bit early. My first boss was bestselling author and speaker Tony Robbins. This was over 25 years ago. Gosh, almost 25 years ago. I remember learning from Tony. But I think what was even more valuable, in terms of storytelling, was just before I went on the road working for Tony, I had a chance to work for a gentleman named Jim Roan. He was an amazing author and speaker, and so inspiring. Jim used to always say, “Make your life a story.” If you can make your life a story, whether you’re a salesperson or an entrepreneur, if you can learn how to tell stories it will help you to connect with other people.

The other thing that he used to always say is, “Open up and be real.” And just let people know where you’re coming from. If you do that, they’ll be more inclined to help and connect with you. As entrepreneurs, again, I think it’s so important that we share our stories, but it’s okay to be real. Be you. And by the way, be you, because here’s the thing: If you don’t in a social media world, people will figure out that you’re not being you.

Andrew: Yeah.

Scott: Right? And then you lose all credibility.

Andrew: And then someone else will point you out. You can pretend all day long that you’ve got great expensive cars, a big house, company’s doing well, but someone’s going to come to your house at some point and post a photo on Instagram.

Scott: That’s right.

Andrew: If only of themselves. A selfie. Then your crappy house will come out, or the crappy car, or whatever it is that you’re trying to hide will eventually come out, so you might as well just be yourself and do it. But the hard part for us here at Mixergy is always getting guests – getting entrepreneurs, especially – to tell stories, because they always think no one’s going to care. No one wants to hear it. All they want is to get to the facts. And I’m listening to you, and I’m watching you, and instead of just jumping into the facts, which often is just one-sentence facts.

I’ve got it up here on the big board – you take the time to say, “Here, let me set it up. Let me tell you the story of Michelle. Let me tell you the story of what happened to me when I was talking to customers. Let me tell you the story of Howard Schultz.” It does make it more interesting. It adds a lot more credibility to the message, and it’s more memorable. I know people are going to remember Howard Schultz having a conversation with his father-in-law long after this session is over.

All right. Back onto the big board. Now we’re going to talk about someone whose name you’re intentionally not going to tell us. The key idea here is to focus on one thing at a time.

Scott: Yes.

Andrew: And you worked with an entrepreneur. I don’t even think you give the person’s name in your book, but he raised $2,000,000, and he was a friend of yours.

Scott: Yes.

Andrew: But then what happened with him?

Scott: Oh, wow. He, first of all, had a great idea. When I ran into him we had been disconnected for a while. He was so excited to share. And basically he had done was identified the market, and he had this really . . . He had identified this market. He had like this one problem that he wanted to solve in a simple, elegant solution and on an idea he went out and he raised $2 million for a consumer Internet company.

And this is after 2008. This is at a time where it was really difficult to raise that kind of money, especially on an idea. So we’re high fiving him. We’re so excited for this guy. And about 18 months later I ran into him again. And I said to him, I said, “You’ve got to tell me. How are things going?” And I couldn’t believe it. He said, “You know, we’re about to shut down.” And I said, “How in the heck is that possible, like how could that happen?”

And what he told me is this. He said, “You know, when we got started,” he said, “We identified the industry and one problem in the industry and we had a really simple solution, but as soon as we got the money and it was probably too much money, something crazy happened. Every day somebody came into the office with another great idea, right? Another product or another feature, another service or something that we should add. And I called this the “shiny ball syndrome,” like you see it over here, here, and here.

And so what you do is you keep spending, and you keep building and building and building. And he said, “Before you knew it, a year later, what we had done is we had built this big, bloated product. We tried to sell everybody in our target problems, and he said, “We decided to launch. And when we did we learned a big lesson, and the lesson is this. When people started to use the product, 95% of our users only used 5% of what we built.

Andrew: Mm-hmm.

Scott: And so if you flip that around, what that means is 95% of our time and 95% of our money was the fact that we wasted it. And the last thing that I had tried to reinforce with him as he was getting this business started, which he didn’t follow, was this. When you’re launching it’s so important to take your idea and build the simplest version of what that is. You know what? Many people call it the minimum viable product, not the hardest thing the simplest thing. And to get that into people’s hands and get it into their hands quickly, because again once they start to play with it, once they start to use it, they might make additional distinctions that you could then use to improve it.

You might find that what you are building or built is something that this audience doesn’t want at all, and you have to go back to the drawing board.

And so, again, what I recommend is I recommend starting out with one simple thing and getting it out, getting feedback, taking that feedback, iterating, and then relaunching again. And it’s so important, again. Somebody can tell you everything that you want to hear.

They can tell you that you’re on the right track. They can eat your sandwich, you want to start a sandwich shop. They can play with your website if you’re going to, you know, start the next Virgin or Google of whatever it is. But until they get it in their hands, until they really use it and digest it, they really can’t tell you how exactly they feel.

And so what you might find, you might find that your buyers, your customers, again, are liars, not because they want to be, not because they want to mislead you, but instead because they just didn’t know until they use it. So, again, it’s important to launch with the simplest thing. Don’t spend a lot of money. I always say, if you’re 85% of the way there, then ship it, get it out the door because the additional time and the additional effort and money will be worth that additional 15% while you’re out there getting feedback from your customers.

Andrew: All right. Let’s go on to the final point here which is . . . I’m going to call myself out. I think it’s I’ve got here to create a buyer’s blueprint, but I think it’s a buyer blueprint, right?

Scott: Create a buyer blueprint, yeah.

Andrew: Right. I shouldn’t have pluralized it, but there it is right now on the board. Create a buyer blueprint. This is something that you learned when you worked for this man. There’s Tony Robbin’s photo from his Twitter account.

Scott: Yes.

Andrew: And one of the things that he taught you is the big mistake that sales people make. Do you remember what I’m talking about?

Scott: I do, like it was yesterday.

Andrew: Right here on the big book.

Scott: Yeah, the biggest challenge that he used to say that sales people make is this. They try and sell what’s most important to them versus what’s most important to their target. And that’s either because they are so passionate about this idea that they have, or they’re so passionate as entrepreneurs to drive something home, or it could just be because their boss told them that’s what they have to sell.

Andrew: Yep.

Scott: And so what happens is they fail to ask the two most important questions that we all need to practice each and every day, and the first is this. You have to ask, you know, what is most important to you about “blank” about whatever it is. What’s most important to you about this product? What’s most important to you about this website? What’s most important to you about the sandwiches you buy? Whatever it is.

Andrew: Mm-hmm.

Scott: What’s going to happen is, your potential buyer is going to give you a list. They’re going to give you your answers. But, the second question is the one that most people forget. They just fail to ask, and it’s probably the most important. It’s, what has to happen, or how do you know that you’re getting what you want?

Andrew: Okay.

Scott: So, as an example, let’s say I have a technology product like a content website kind of thing I’m building. I might ask a potential customer, “What’s most important to you about this?” And, what they tell you is that it’s easy to use. Now, easy to use means a lot of different things to a lot of different people. So, the second question is, “What has to happen”, or “How do you know it’s easy to use?” And then what they do is they give you that blueprint. They’ll say things like, “It has to be mobile. It has to be this, it has to be that.” And so by asking that second question, you can really find out what buyers are thinking and create a great map for yourself.

Andrew: I see. What’s important to you about X, how do you know you’re getting it.

Scott: Yes.

Andrew: Those are two questions that you want us to ask all customers so that we understand the customer before we start to sell the customer.

Scott: That’s right.

Andrew: All right. The book is, and people might have heard me play with it in the background, there it is, “Launch”. Scott Duffy, thank you so much for teaching some of the ideas from the book. To get more, then you just go to hear it, directly to Scottduffy.com, and there’s a book on the site. Thank you so much for teaching.

Scott: Thank you so much. It’s great to be here.

Andrew: Cool. Oh, you know, one more thing before we end.

Scott: Yeah.

Andrew: Do you have a book recommendation for how to tell stories the way you tell stories? You’re fantastic. I love how your book is full of examples, it’s not just full of theories, it’s full of examples from real world, and just listening to you is fantastic.

Scott: Well, thank you, thank you. Well, here’s one piece of advice that I learned.

Andrew: There you go. Yes.

Scott: Now, I’ll give you a big example. So writing my book was one of the most painful things I’ve ever done in my life.

Andrew: Okay.

Scott: We brought in-

Andrew: It feels like you’re just writing. It feels like you’re riffing, like you’re just riffing here with me.

Scott: Well, here was the challenge. What the challenge was, you have to learn how to tell the story, but the story isn’t about you.

Andrew: Mm-hmm.

Scott: The story is about what you want your audience to be able to take away from the story.

Andrew: Okay.

Scott: I think that one of the biggest challenges that people have when they’re storytelling is, they just focus on telling the story of Howard Schultz without, here’s the things that you really need to learn that you could apply from that story.

Andrew: I see.

Scott: And, I think if we just focus on that, it really helps and I think that the biggest gift for me to writing the book, the biggest thing I wanted was really how to do that.

Andrew: Tell the story and make sure that at the end of the Howard Schultz story, people understand they should talk to their significant other because otherwise you have a conflict. But, if you do it, then you have an ally. It’s (inaudible)

Scott: Right. So, when I started outlining the book and say, ‘I got this great story about Howard Schultz, I’m going to tell the story.’ But, when I wrote the book, the book that you have in your hand, the difference and distinction that made it come together was, I said, ‘Here’s a lesson I want to teach about how important family is. Is there a story apart in my life that I can connect to that material?’ And, that’s really the way to do it.

Andrew: All right. Good advice. Thank you so much for teaching this. The website is Scottduffy.com. The book is, “Launch”. Thank you all for being a part of it. Bye guys.

DOWNLOAD TRANSCRIPT

Master Class:
How to profit first
(And transform any business into a money-making machine)
Taught by Mike Michalowicz of “Profit First”

Master Class: Profit First


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Transcript

Andrew: This session is about how to transform any business from a cash- eating monster to a money-making machine. It’s led by Mike Michalowicz, a founder of two multi-million dollar companies which he built and sold, and he transitioned to writing books and teaching.His latest book is called “Profit First,” and that’s where I got the title for the session. The subtitle from the book is “A simple system to transform any business from a cash-eating monster to a money-making machine.”My team and I . . . by the way, I should say my name is Andrew Warner. I’m the founder of Mixergy, where proven founders teach. And the team here at Mixergy pulled out of the book a collection of tactics that we think you’ll be able to apply quickly and get results from. And hopefully if you like those and you find them helpful, you can go and get the book “Profit First.”Mike, welcome back.Mike: Andrew, it’s just great to be here again. I love that you do this with me. So thanks for inviting me back.Andrew: Me, too. Thanks for being here even though apparently the word “transform” still is too tough for me.

Mike: [??]

Andrew: But I’m working on becoming more pro.

Hey, you did something really cool. You sold your company, and then you brought . . . you bring this up, not this specific one. But this is the car you got. What car is that?

Mike: It’s on my screen, yeah. I presume it’s a Viper.

Andrew: A Viper.

Mike: Oh my God, and that’s hauntingly similar. Mine was a darker blue. It’s a GTS. That’s a 2001. Like, actually, I’m sorry, that’s not 2001. That’s ’97.

So I . . . after I sold my second company, I was like, “Oh, okay. Now it’s time to play out all my little college fantasies.”

Andrew: Mm-hmm.

Mike: And one of them was to get that car. So I got that exact car you’re looking at, with a darker blue and a more current year. And thought that it was important for me to show off my wealth and my success through trophies.

That was just one. I got an LR3 Land Rover. I got the 7-series BMW. I moved into an expensive town. I joined the club, all these things to show my success to the world.

Andrew: Yeah.

Mike: And I have to summarize by saying I became a dick, a big, big dick.

Andrew: You mean, you were a jerk to people.

Mike: A jerk, yeah, to people.

Andrew: Okay. What kind of things did you say to them? “Here’s $5. Wipe my butt”?

Mike: Yeah, right, well, that was one of them. No, I didn’t say things. I felt things.

Andrew: Oh, okay.

Mike: So if you and I ran into each other in the street, Andrew, and you were telling me about your business, in my head I’d be like, “Ugh, here we go, another pathetic soul.”

Andrew: Ah.

Mike: “They don’t know how to be successful. I’m the genius in the room. Just listen to me. And if you don’t believe it, look at all the crap I’m accumulating.”

Andrew: Oh, I see. I get it. Yeah, and you feel like you’ve earned it, because, you know, you really put in the hard work. You want to treat yourself.

What does a Viper cost?

Mike: New, at the time, I think $85 or 90,000. The LR3 was $100,000. BMW, $100,000.

Yeah, it was . . . you know what it was? It was just . . . I thought that wealth was the stuff we showed, and not something inside. And when I finally sold a company to have it, I felt like it was time to show off my trophies.

I’ve subsequently come to realize that well-dressed poverty is still poverty. Like, when we still have an impoverished mind, it doesn’t matter what we look like. I still didn’t have the right mentality. I thought I did. I didn’t.

Andrew: So what happened to your bank account as a result of all these cars and spending?

Mike: Yeah, so that’s not the only way I spent. After selling my second company, I was like, “Oh my God, I know the formula to grow companies. I’m going to become an angel investor. I’m going to invest in all these companies.”

Quite frankly, I became the angel of death. Every time I put money into a company, I was destroying it, it seems. And I started or participated in the launch of about 10 companies over about 10 months, and every single one . . . except for one. But every single one except for this one was done, was a failed venture, within six months to a year.

And I remember I was spending money so quickly, these businesses were out of business and I just kept on throwing money at it. And it took me a mere two years to lose everything. I mean, literally every penny I had made.

Andrew: Wow.

Mike: So people go, “Oh, Mike, you know how to grow businesses.” I’m like, “Yeah, well, that took me 15 years. I know how to lose money even better than that. It only took me two.”

Andrew: You know what? And I think a lot of people in the audience might say, “You know what? I’m not going to spend money on a Dodge Viper. I’m not going to buy myself a BMW and all these other cars.”

Mike: Right.

Andrew: But where we do often run into trouble is where we make seemingly good business decisions, like investing in other companies for you. Or for others, it’s buying an office, or investing in certain kinds of ads, et cetera. Seemingly reasonable decisions that end up causing trouble because we don’t judge them properly.

And we’re going to talk about, in this session, how to judge them properly.

Mike: Yeah.

Andrew: After you did all this, after you did so much of what you’re going to talk to us, did you end up okay, or are you still now with no money in the bank and just a memory of the car?

Mike: Yeah, well, memory of the car, but money in the bank, right? So I am in a much better position than I’ve been in my entire life. I have built a profit habit.

So I used to believe profit was an event. I called it, you know, pump and dump. That’s the popular term. I’d build a company fast, sell it. That’s how you make your money.

And that’s what’s kind of perpetuated in the media. You build a company. It doesn’t matter if it makes money. You build Twitter. It can fail. Until you sell it, and that’s where you make your money.

Andrew: Right.

Mike: So that’s what I was doing.

Today, I have a whole different vantage point, I believe. A much healthier understanding of what profit is. And it’s not these events. It’s a habit. It’s a daily habit.

Andrew: Okay. And we’re going to talk about how you did that. And here are some of the ideas from the book.

The first is “get your credit cards reissued.” What do you mean reissued, and why is that such an important thing to do?

Mike: Oh my God. So . . . well, as I was running out of money in my life, but also in my business, I believed in the old adage “it takes money to make money.” So I just took other people’s money. Credit cards. And was spending that, and hoping I could turn.

And we’ve got to realize that borrowing money from a credit card company is no different than borrowing from a friend. It’s other people’s money. It’s very easy to spend.

One habit I think every business needs to have, everyone needs to have, is get rid of the credit cards and go to debit cards. Because when you use a debit card, every time there’s a transaction, it immediately comes out of your business bank account, or your personal bank account. You feel the pain immediately. And now it’s no longer other people’s money. It’s your money.

And just that little, subtle change is a huge behavioral change. Now my spending . . . I’m a lot more cautious. “Whoa, whoa, wait, wait. I’m not buying that software. I don’t want to spend my money.” But when it was credit card? “Ring, ring!” So changed . . .

Andrew: You know, one of the cool parts about having it reissued is . . .

Mike: Yeah.

Andrew: So we found this photo of you . . . this is really your chest here, right?

Mike: So . . .

Andrew: Right?

Mike: Yeah, that really is my chest hair.

Andrew: Not your chest hair. This is your chest here, is what I meant to say.

Mike: Oh, chest here. And my chest hair.

Andrew: And your chest hair. And you’re a fit guy. And one of the reasons you’re a fit guy is you go to the gym.

And of course when we go to the gym, we have to give them a credit card — or we can do a debit card — and they charge that card month after month after month.

Mike: Right.

Andrew: By having that card reissued, you stop that ongoing monthly expense. When you got the new card, you had to decide, “Do I want to give this to the gym or not?” And what did you decide?

Mike: Yeah. So that was my exact experience. I joined the gym. I had a gym membership.

Andrew: Mm-hmm.

Mike: And what happens is these recurring charges, I lost sense of this. I stopped going to the gym, because I just stopped going, but I forgot that there’s ongoing costs were going on.

When I changed cards, when I canceled my credit card and put on my debit card, all of a sudden my phone starts ringing from all these vendors I haven’t heard from in years. “Hey, we can’t process your payment. Are you still going to be part of the gym?”

I’m like, “I am part of the gym? I totally forgot.”

Andrew: Yeah.

Mike: But this is true for . . . a CRM I forgot I was using, and all this other stuff.

So what happens . . . there’s these recurring we invoke in our business that at the time made sense, but sometimes we forget we even have them. By ditching the credit cards, it’s a full reset, and a lot of these things you aren’t aware you’re doing all of a sudden comes right in front of your face, and you are presented with a decision. Is this something that’s still appropriate for my business, or is this a gym membership that I’m not using, and I’m working out in my house now? I should cancel it.

Andrew: I see. Yeah. And there’s a drastic decision. You make that one decision one time, you get a new card, and suddenly all those recurring payments stop, and you get to reanalyze whether you want them or not.

Mike: Exactly.

Andrew: Fair enough. All right. Onto the big board. And the next big idea we want to talk about is to perform an instant assessment so you can figure out the numbers that will make your business profitable.

And sometimes this is where I think we sometimes delude ourselves. You were at a period in your life where you were near bankruptcy, and you said, “You know what? I’m going to look at all my expenses.” And one of the expenses was office expense.

What happened . . . do you remember what your office expense was, and what you did to it?

Mike: Yeah. So I ran through this instant assessment. I have it in “Profit First.” I think we were talking about showing that a little later on.

Andrew: Yeah.

Mike: And, all right, so basically, what this instant assessment does is I analyzed all these companies, from small start-ups — a couple, you know, thousand dollars, brand-new start-ups — to $50 million companies, and everyone in between, and discovered what healthy companies, the healthiest of companies, run at, and what kind of profits they make, what the owners get paid, what the tax liabilities are, blah, blah, blah.

And what I learned about was there expenses. And some of the healthiest companies, of their gross revenue . . . say a company makes — round numbers — a million dollars a year. They have about a 30% operating cost. So that means they get a million dollars in sales, but only $300,000 is sent to pay rent, pay employees, etc. Thirty percent.

Well, I ran this number against my business, and found that I had 80% cost. And that was not even considering my pay. So a million dollar business, I had $800,000 going out to rent and employees and so forth. And then with the remainder, I was trying to pay my taxes, and then pay myself, and I had no profit.

Well, what I discovered was when I ran this, that a lot of my expenses which I thought were pretty reasonable — I only had $1000 a month in rent — that really, my business now is shaking and screaming at me, saying, “You can’t afford that stuff. Mike, your business isn’t at the size to afford this.”

So what I did specifically with my office, when I thought $1000 was fair, but ran this assessment and said, “No, I can’t afford the costs I’m incurring.” I cut my cost down to zero for office space.

Actually, the story I have in the book. I moved into a factory that was owned by a friend. He manufactures cookies. Gave me free office space. Just as good as any other office space. Plus free cookies. So that picture you have is kind of like mid-cookie. It gets worse after.

Andrew: You mean the one where we saw your chest hair and chest hair.

Mike: Yeah. My chest hair and the beginning gut there. You see the gut rolling down the sides there.

Andrew: Looks good.

Mike: Yeah.

Andrew: So here’s what I’m thinking.

Mike: Yeah.

Andrew: You used to have $14,000 a month in office expense. You said, “Great. I’m going to cut that down to $1000.”

Mike: Right.

Andrew: That seemed reasonable. And only after you did this in-depth analysis did you realize — tell me if I’m wrong — only after then did you realize, “That is not enough. I have to take it down to zero. I might be feeling proud of myself for going from 14 to 1000 a month, but that’s not enough.” Right?

Mike: Exactly it. And the key word you say, Andrew, is reasonable. You know, reasonable isn’t good enough. If you want to grow a healthy business, you have to be unreasonable. You have to find ways to get the same things done with way less cost instead of . . .

Andrew: So the part that I didn’t understand in the conversation right now . . . and I do have the instant assessment, I thought we could go over in a moment. But can you just help me understand what you were saying earlier about gross profits versus net profits, and what . . . how . . . why wasn’t the $1000 a month enough? How did you figure that out, that cutting to $1000 wasn’t enough?

Mike: Yeah. So the assessment of a business that wants to be healthy is real simple. You take your revenue — what your total revenue is — and you can run it . . . there’s a free download that you’re offering with this chart. You run your revenue number against these percentages.

And the chart will tell you very quickly, if you have a million dollar business, for example, that you can run an operating expense upwards of 30, maybe 40%. I can’t remember the exact number off the top of my head.

But because the other dollars have to be allocated towards stuff. Towards tax responsibility, pay, perhaps buying capital equipment, and so forth.

So the problem that most businesses have is that we have a million dollar business, we think that we have a million dollars for expenses. We can just run our business off a million dollars. And that’s not true. Because if you run your business to cover expenses, there’ll never be profit left over.

So this instant assessment tells you what you really have available for expenses. It’s kind of like a bucket of cold water in your face. It’s a wake-up call saying, “You can’t afford what you’re doing right now. You have to find a better, more innovative way.”

Andrew: So this was the PDF you were talking about earlier.

Mike: Yeah.

Andrew: With the Profit First Instant Assessment. We can give this out to the audience. Which, this is the step-by-step instructions. Here is I think what you were talking about, Figure 1 and Figure 2. Right?

Mike: Yup. That’s the charts. Yeah.

Andrew: Okay. So if we’re looking at here at a million dollar business, that’s Column C, maybe.

Mike: Exactly.

Andrew: Right. So Column C tells me real revenue, 100%. Profit is 15%. Owners’ pay, 20. Tax 15, et cetera.

Mike: Yeah.

Andrew: What does all that mean?

Mike: Yeah. So if you’re running a business . . . and those are the exact numbers. This is what I studied with healthy businesses. A healthy $1 million business . . . and I know this is a generalization, and most people say, “My business is unique.” But you know what? It really isn’t that unique.

Of all these businesses in all different fields, I discovered that a million dollar business will be taking a profit of about 15%. So at the end of the year, that company’s taking $150,000 in profit distribution. Now, that’s above and beyond the owners being paid $200,000.

And then taxes. You know, we shouldn’t be paying taxes ourselves. The business was designed to serve us. So $150,000 is reserved for corporate tax responsibilities and personal tax responsibilities of the owner. What that leaves, at the end of the day, is 50%. And that 50% is used to run the rest of your operations. It’s payroll, everything.

What this forces you to do as a business is you have to be efficient. And if you don’t pre-allocate your money toward profit and paying yourself first, what the default nature of all entrepreneurs is that 100% of top line goes to 100% of expenses. And these companies now survive check by check, barely getting by, because the money that comes in instantly flows out.

This instant assessment tells you where to stop it, where to allocate your money, before you pay a single bill.

Andrew: All right. So let me do it again with a different set of numbers. I’m just going to wipe that out. Here’s what . . . let’s suppose someone is in this column right here. Column 1. They’re making roughly a quarter million a year.

For them, you’re saying all of their expenses should amount to 30% of revenue. All of those expenses.

Mike: Exactly.

Andrew: And anticipate taxes of roughly 15%.

Mike: Right.

Andrew: Anticipate taking home . . .

Mike: 50%.

Andrew: . . . half the revenue as profits.

Mike: Exactly. For your own pay. Yeah. And the reason . . .

Andrew: Uh-huh . . .

Mike: The reason . . . and, yeah, 5% profit.

Andrew: Five percent profit. That’s what your business should be doing, but it’s not that 100% of your expenses can towards running the business. You just have to think in your mind 30% of the money coming in is going to expenses. If I get to 50% I’ve gone too far.

Mike: Exactly. The reason this happens is that’s a smaller company. You’re basically a free lancer at this mode. If you have 250,000 or less, chances are you are the only employee or maybe a part-timer. As the business grows, you have to put the infrastructure in and the people. So the things start shifting. So that’s the ideal numbers.

The other tip I have for people is this is ideal numbers, but if your business right now is running check by check, if you implement those numbers immediately it’s like taking a frozen mug and putting it into a hot oven. It’s going to burst. So what you need to do is slowly move towards those numbers. I suggest starting out at a lower percentage point knowing that’s what you’re targeting. But every quarter, every ninety days, move it up, move it up, get closer to those targeted perfect percentages.

Andrew: All right. So on to the big board again. We’re going to the next idea here which is to determine your profit allocation percentage and tell your accountant so you can get on a path to profit immediately. And you talk about the founders and owners of this company [??] and they did that, right?

Mike: Yeah, these guys are amazing. They found out about me from my first book, “Toilet Paper Entrepreneur” and I’ve got a good relationship. The guy in the center and to the far right that’s George and Jose. They built this company, and they started doing Profit-First. There’s target allocation percentages with just that chart which we went over just now, but I have an alternative life. You don’t want to go with my chart because it’s, you know, “too generic.”

You can also go on to Yahoo Finance or Google Finance and look at public companies that are playing in your sector. So if you provide coaching services, look at training companies that are public. If you’re a law firm, look at a public law service firm. And you’ll find out the healthiest of companies, what their numbers are and you can target those. Not surprisingly those target allocation percentages for profit, pay, and so forth, you’ll find to be very similar to the chart that we just showed you.

That’s an alternative way of finding the specific target allocation percentages for your market.

Andrew: Got it. And when they did it, they went to 2%.

Mike: Right. So when Jose and George started, they realized in their market they could run a 15% bottom line and a 25% owners pay margin, but they said, you know what? We’re first going to start with a 2% pay because the first step of this Profit-First mentality is to get into the habit of taking a profit first. What you’re learning here is basically the pay yourself first process, something that we’re supposed to be doing in our personal lives. But you need to apply it to the entrepreneurial side, to your business life.

And if you go full bore, you may not be prepared for it. You may have too many expenses going on. You may not be able to cut back fast enough, and now you’re going to start borrowing. That’s stealing from yourself. It’s there for profit. You’re going to take it back, and that defeats the system. The key is start small, build the profit habit, and slowly build it over time to bigger and bigger margin.

Andrew: So it was take 2% of the business out at first as profit.

Mike: Yeah, that’s what I started. The last time I spoke to them a few months ago they’re about 12%. But those two guys went on some wild vacations and had some amazing dreams come true for themselves in their personal lives because they built this profit habit.

Andrew: But it’s 2% profit for the business, or 2% owners pay?

Mike: Those are different, profit for the business. You didn’t realize as owner of a business you actually serve two functions. You’re an equity owner. You’re a stockholder, just like you’d own stocks in a public company, and you get dividends. That’s your profit.

The second thing is you’re also an employee as an owner. That’s owners pay. You’re paid to work inside the business.

Andrew: Okay. So for them it was profit for the business 2%. They still took money off themselves.

Mike: Oh yeah.

Andrew: The business kept that profit and allowed it to grow in the future, and then they kept upping and upping that percentage.

Mike: Exactly. So they gave themselves healthily a 2% profit. They did quarterly distributions, again, just like a public company. When Bloomberg is announcing a 15 cents per share distribution, George and Jose were taking about $2,000 a share distribution for themselves and celebrate with it. We all should be doing that.

Andrew: All right. On to the next idea here from the book, and that is, to brainstorm ways to become more efficient. And you talk about UPS. I found this article about them. This is from their website. Let me zoom in. It says, “When in doubt, UPS avoids left turns,” and they explain how and why they want to do that. This is from an internal document, I think.

Mike: Yeah, yeah, I include that in the book, and this is an amazing story of the power of a public company doing this, but any company can do this. UPS, just like any other business, is trying to maximize profitability. The wins for profitability happen in the minutia, the small elements. And what they realize is they just started measuring things that were going on and that their drivers a lot of time were idle. They drive up to a traffic light and sit there. They’re trying to cross an intersection, they’re sitting there. They realize that left turns can take up to ten times more time than taking right turns. You can turn right on red, you don’t have to cross traffic when you take a right.

Andrew: Mm-hmm.

Mike: So once they realize this they say, ‘What if we set up the navigation for each driver for each day so that their route is mostly or almost exclusively right turns?’ And sure enough, they were able to make a big efficiency gain. Now the same driver can do five or six more stops. They can increase their productivity by 10 or 15%, by not taking left turns. Now they do all these efficiency, little steps forward in different areas, and by doing a lot of small improvements in efficiency they get one major efficiency improvement overall in profit increases.

Andrew: Do you have an example of how brainstorming like this helped a smaller company, a smaller entrepreneur come up with an idea that they wouldn’t have discovered otherwise but saved then money on an on-going basis?

Mike: Oh, yeah, yeah. I’ll talk about one company that I’m an investor in. It’s a manufacturer of outdoor products. I own 25% of the company. I’m just going to reserve saying their name. What they do is, we make some certain products. And what we realize is that making a certain product requires rivets. That there’s ten different rivets required. And what we did is we sat down with the entire team and this is critical. You as an owner may not know it, so we sat down with our entire team and we’re a small shop.

Our entire team literally is five people. The guy on the floor to the owner, and everyone in between, we got together and said, “To make this product as well as we can takes ten rivets. But we also realize is we can do it with two rivets less, we’re going to save serious money for each unit, about 50 cents a unit. But we make thousands and thousands of units, becomes real money. How do we cut this thing down by at least two rivets?” The team brainstormed, came up with a new way to fold in the material and it didn’t require two less rivets, it required four less rivets now and was sturdier.

Andrew: Wow.

Mike: So what you have to do is just put out the questions of how do you get the same or better results with less material. My favorite question to ask is this: Whatever you do today in your business no matter what it is, how do you do double the productivity, double the results with half the cost? I know it sounds like an absurd question, but if you ask it, you may nail it, or you may find somewhere in between, but it will move you forward.

Andrew: That makes sense. And we’re so resistant to doing that because it feels, if I were in the business that you just described, I would say, “Of course we have to have rivets. We want as many as possible so that we could have a really quality product.” But as you say, sometimes folding it a different way requires fewer rivets, less time and just as good if not a better product.

Mike: Less time. Yeah, it was a snowball effect too. It wasn’t just less material, right. It was less time too.

Andrew: All right. Onto the big board. Next big idea is create a stocking account so big purchases don’t crush your business. You talk about JB in your book.

Mike: Oh yeah.

Andrew: JB who has a roof deck company. What’s the name of the roof deck company?

Mike: it’s called Roof Deck Solutions.

Andrew: Roof Deck Solutions. I think this is them, isn’t it? What did he do? Is this them?

Mike: That’s them. Yep, that’s them, that’s them. They make cool roof decks in Manhattan and different metropolitan areas. What they do is they go to those abandoned roofs on top of a building and they renovate it over. JB, his business is a multi-million dollar business, but one of the challenges going on is he has to buy a lot of materials.

So here’s what you need to do. If you have a business that’s material intensive, as revenue comes in, before you allocate to a profit and other stuff, the direct material costs you must reserve and put into a stocking account. Because ultimately you’re going to have to replenish those goods. He has to get the woods, the materials and so forth. So instead of just having one account, you have to have multiple accounts for different purposes with your bank. So I would set up a profit account, a owners pay account, and his case, I would set up a stocking account because he has to get more materials.

Andrew: You mean, literally a different bank account where we wire the money in on a regular basis. In his case, I think it was $250 that he kept doing every month.

Mike: Yup.

Andrew: And then when a big purchase comes in, you have that separate account ready to go.

Mike: That’s exactly what this is. This is Grandma’s old envelope method.

Andrew: Yeah.

Mike: What my grandmother did is get $100 of pay in a week, and she would put $5 for groceries, $10 for rent, $5 to give back to the community, blah, blah, blah and so forth. She always had enough money. If she needed groceries, she’d go to the grocery envelope and have enough money to buy groceries. It wasn’t always the same amount of money. If it was little, she realized we’re doing peanut butter and jelly this week. If it was a little more, we might get a roast chicken. But she would use the money that was available, and we all need to do this. Set up envelopes for different purposes.

Yes, we can use G/L accounts and accounting but the thing is, that’s what logical people do. We have to realize that we as humans, entrepreneurs, we’re not necessarily logical as much as we are emotional or behavioral. So by setting up all these different physical accounts that will give us the clarity of understanding what our money truly is available for.

Andrew: By the way, his work is stunning. I don’t know if I can show enough of it here up on the screen here. Let me see if I can do it. Where is it?

Mike: His work is amazing.

Andrew: It’s amazing. He’s turning outdoors areas, you said, in Manhattan?

Mike: In Manhattan and Boston.

Andrew: I love this one. Let’s see if we can show it. I’ll zoom. This is like an outdoor shower out on a roof in Manhattan.

Mike: Yeah, and you know whose place that maybe? That maybe Jon Stewart from the Daily Show.

Andrew: Oh, okay.

Mike: That maybe his place. So a lot of celebrities do this for their custom space. So there are open public spaces that do this, but J.B. also does it. That’s definitely Jon Stewart’s place.

Andrew: This is Jon Stewart’s place?

Mike: Yeah, you’re looking at Jon Stewart from the Daily Show. That’s his house you’re looking at.

Andrew: Really.

Mike: His apartment in the city, yeah.

Andrew: Phenomenal setup, wow.

Mike: A lot of celebrities like this stuff too. And yes, really phenomenal cool stuff.

Andrew: I see.

Mike: If you have the means.

Andrew: Sorry? If you have means.

Mike: I said, if you have the means, it may be fun. [??]

Andrew: All right, so it makes sense the way that he was able to build his business and keep those big expenses from crushing him is by setting money aside every month in a separate bank account, not a separate entry in his QuickBooks, separate bank account.

Mike: Separate physical bank account. That’s the mandatory step. Before this he was doing the old bank account method saying, “Oh, I have money reserved.” But the natural tendency of most entrepreneurs is you look at your one checking account and you believe that money’s available for whatever your next need is. So, J.B. was catching himself without enough money to buy materials and he was getting in real trouble. Simply by setting up a separate account and reserving the money there first, he doesn’t get caught with his pants down.

Andrew: All right. Onto the next big idea and this one was a surprise, what happened to someone that you know, Ernie. The tactic is, you want to value profit over selling more so you can break out of the survival trap and you had someone who came in and did some lawn work for you. A guy who you’re calling Ernie in the book to protect his identity.

Mike: Yeah, and I protect his name because I question if the business formationed [SP] properly. But I wanted to include his story because it represents what a lot of entrepreneurs do. It’s called the up-sell and we’ve been told to do this. Ernie’s my lawn guy. He comes in and I’m in New Jersey. Fall is a big time for cleaning up leaves. He does it. He comes to my door and says, “Hey, Mike, there are leaves in your gutters. I’ll gladly go on the roof and clean it out. Its only another 200 bucks.” “Sure, do it.” He goes up there.

He’s up there. He comes back down, knocks on my door, says, “You know some of your shingles are coming off. I can replace those and I noticed your chimney’s falling apart. I can fix that.” “Sure.” Another 500 bucks or whatever. He did it.

The thing was it wasn’t his skill set. He didn’t have the tools. He didn’t have the labor. So he had to run out and get the resources to do it. At the end of the day he made some good money for sure on the top line, but he didn’t make a profit. And his big bet was, “Well, I had to buy this different equipment and ladders and stuff to take care of Mike, but I’ll make it up going forward.”

Well, the problem was while he’s up on the roof and trying to make the money on other things going forward, his blowers and rakes, and all that stuff is sitting idle on his truck. As we up-sell into more and more diversity we become more and more inefficient. So, the story I shared in the book is at the end of the day, yeah, maybe he took home 1500 bucks or 2,000 bucks that day, but when he’s at the bar talking to the other lawn guys and saying how much money he made, and he made twice as much as they did, he’s the guy who can’t afford to buy the beer. Someone else is buying the round because they’re doing one thing super efficiently.

Andrew: Yeah.

Mike: And that’s the key to profitability. Be the master of one thing replicated over and over, be able to do it faster and faster, better and better, and you’ll make margin profit, and you’ll be successful.

Andrew: You know what? I see that in text so much. Consultants specifically, they’ll come to me and they say, “I’m really good at installing WordPress. Do you want me to install WordPress for you?” “Yeah, absolutely. I don’t want the headache of doing it. It’s not that tough, but you do it.”

Mike: Yeah.

Andrew: And they come back and say, “Well, I can also install all these plugins, do you want me to do that?” “Well, yeah, go ahead.” And now they give me a price, they go do it, and they realize there’s some conflicts in the plugins, so they have to go and figure that out. But before they finish figuring that out they say, “I can also get you a new design for the site.” They’re thinking, “I’ll just go to WooThemes. I’ll buy the design then I’ll hire someone to edit it and make it look really nice.” Again, more and more things and they end up doing nothing right. I pay them more and I hate them more.

Mike: Yeah, you’re disappointed as a customer.

Andrew: Yeah.

Mike: It’s ultra-inefficient. The first time you run into the problem you had to solve it. The second time you run into a problem you got to find the commonalities of that problem and it still takes time. It’s by the hundredth time that you run into the same problem that then you get into the routine you can [??] with.

Andrew: Yeah.

Mike: But if you keep on diversifying what you do, every time you face a problem it’s your first or second time, pure inefficiency. It’s a loser. You make money after you hit the same problem 100 times over and know how to fix it every time perfectly.

Andrew: I don’t want to be your guinea pig if I pay for that and don’t tell me, I don’t need the excuses that it’s taking so long. That’s one of my big frustrations with consultant companies. And I get why they do it. They have a customer, now they’re told “grow that business.” But you know, there’s a limit to what you can do. Before you know it you’re like Ernie.

Mike: It’s a dangerous job. And by the way the shingles are coming off the roof. He hasn’t done it before, it was inefficient. So I call him and say “Hey Ernie, it’s not working can you come fix it?” He’s like “Aw, God” he’s like “I’m trying to go out and do leaves, uh, yeah I’ll come there.”

Andrew: And now you’re the difficult customer.

Mike: Yeah. He’s upset with me, he did a poor job up there, he’s not servicing his other customers, he’s losing other business to cater to something that he should have never done in the first place.

Andrew: Yeah and like you said he that things are going well because he’s more money but he’s the guy that ends up not being able to somehow not being able to afford to buy drinks. Alright, onto the final point that we pulled out here and that is to get an accountability partner who will help keep you profitable. You talked about this woman who did that. I’ve never seen this woman before. I know the company that she’s a part of.

Mike: Oh, Jean Nidetch. Yeah she’s the founder of Weight Watchers.

Andrew: Yeah.

Mike: That’s the founder of Weight Watchers and that’s her before and after. That’s her before on the left; that’s her after on the right. She’s still alive today, still thin today! So you can see in that left picture that she had a weight issue into her 30s early 40s and the awakening moment for her was she was at the food store and someone came up and “Congratulations, I didn’t know you were having a child!” And she wasn’t, and she said “That’s enough.” Up to this point she had tried diet plans and sure enough diet plans worked but then she went back into her habit and put weight back on. It never stuck.

What she found was she needed a support group so she founded Weight Watchers in her living room with other women that were struggling with their weight, and they stuck together. And as a team they were able to support each other through the process, and they were able to lose weight permanently.

Andrew: Yeah.

Mike: Same is true for our profit. You just learn the “Profit First” system in our video here together, and you’ll be able to do it. You can, and you should. The problem is there’s going to be a dark day where you need money because you have a new bill. It came in unexpectedly, and you’re going to steal from yourself by taking money away from your profit account, not paying yourself as much, and that’s when the system falls apart. You need an accountability partner or an accountability group.

I’ll tell you the one thing you’ve got to do is your accountant . . . This is a person that’s a trained professional. Like a trainer in a gym they know the numbers. They should be supporting you in driving profit in your business. And if your accountant doesn’t do that, shake them and wake them up to this process to make sure they do start doing it or find an accountant that does.

Secondly, you should surround yourself with other entrepreneurs that are also driving profit first in their business because now you need a support group for each other. You need accountability.

Andrew: So if you want to start out small, first of all, read the book. And second, get an accountability partner, one person who holds you accountable. How often should they meet?

Mike: Yeah, I suggest meeting twice a month. I believe in getting into what’s called a rhythm. I think we should pay our bills twice a month, do distributions twice a month. Every single day, not freak out in the moment. Get into a rhythm of doing this.

Andrew: And what happens in these meetings when they do it twice a month?

Mike: Well, what you do is you talk. You print out your bank statements. There’s no BS’ing. At Weight Watchers, when you show up, you don’t say, “Yeah, I lost weight.” You get on the scale, and the guy looks at it and says, “Yes, you did lose weight.” With your accountability partner you print out your bank statement for your profit account and say, “Here’s what I’m doing.” And so there’s no BS’ing around about it, and then you talk about strategies to improve profit and drive it forward for each other.

Andrew: Got it. Great. So, again, the book is called . . . I’ll bring it up on the screen . . . “Profit First.” The website you guys are looking at right now for the book is ProfitFirstBook.com. Mike, I obviously didn’t cover everything from the book. We covered some of the big ideas from it. If there’s one thing that people, when they get the book should jump into that I didn’t cover here today, what would you recommend? What’s one of the things that they should look at?

Mike: Just one thing is to realize that there’s a flawed formula. It’s called the Gap Formula. It’s generally accepted in accounting principles. It says that sales minus expenses equals profit. It’s been the foundational profit formula since the beginning of business, and I’m here to tell you it’s total bull shit. It’s the worst formula in the world because it says sales comes first, expenses come second, and profit is the remainder. It’s a leftover. It’s an after-thought which is absurd.

The core principle that I want you to walk away with is this. Sales minus profit equals expenses. Sell as much as you can. Take your profit first, and run your business off the remainder. The expenses is the remainder, and you’ll become more efficient and more innovative when you have less money available for your expenses.

Andrew: Oh that is a mindset shift. I paid so much money to go to college so I learned the opposite side of it. It is a mindset shift, and it does make so much more sense for younger businesses. Thank you so much for coming on here and talking about this. Again, the website is ProfitFirstBook.com, and if you can spell his name, MikeMichalowicz.com. And, of course, we’ll link over to it. I love this where you describe where you hired a professional voiceover artist to talk about . . . to say your name.

Mike: Oh yeah, yeah, yeah. He makes fun of my name. Well, no one can get it right, so make your weakness your strength. So if no one can say my name, might as well make fun of it.

Andrew: I love how you have fun with it. Thank you again for coming back here. Thank you all for being a part of it. If you’ve got anything of value, come back and let me know, let Mike know. And let us know what you ended up doing with it.

Congratulations, guys, for being a part of it. Bye.

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Master Class:
How to use lean B2B ideas
(So you can build products businesses want)
Taught by Étienne Garbugli of Lean B2B

Master Class: Lean Business to Business Ideas


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Transcript

Andrew: This session is how to use Lean B2B ideas to build products and businesses that other businesses actually want to buy from. It’s led by, Etienne Garbugli. A two time startup founder of Flag Back and Higher Voice, and a recognized user ability and UX researcher expert.This session is based on his book. Let me bring it up on the screen right there, “Lean B2B: Build Products That Businesses Want.” We’re going to use some ideas from this book and teach it to you right here today if you want to follow up, of course. Go get the book at any bookstore, or on leanb2bbook.com. Etienne, welcome.Etienne: Welcome. Thank you. Thank you for having me.Andrew: Let’s start off with a painful story that shows the audience what would happen, and frankly, what often happens with entrepreneurs who don’t follow the Lean B2B methodology. This is actually is especially painful because you experienced it.

Etienne: I did.

Andrew: What is this company and how did you experience it there?

Etienne: Basically, we ended up in 2011 I started a company with a few partners. It’s about the same time that the Lean start-up book out. We decided we were going to use some of these techniques. We started pitching from the first few days. We started validating ideas with true cold calls to a landing page and surveys.

We really focused on getting it right. Doing good validation. Our starting assumption was that we were going to solve the issue of [??]. Basically, the way job candidates perceive companies. We thought that was a big problem. We thought that was a good valid first assumption. We ended up holding . . .

Andrew: Yeah. The way candidates perceive companies is, frankly, one of the reasons why so many successful entrepreneurs do interviews on Mixergy with me because they want potential employees to hear about the company and to get to know the founder directly. I can see the importance of that. All right. You did your surveys. What’s the problem?

Etienne: We figured out that we actually built the first product because everybody was saying oh, this is interesting. This is super interesting. We had a nice UI. It was looking good, but it was just interesting. That’s all that came out. It was just interesting. Nobody was throwing money at it. The people in HR, they did not budget for this. They were not able to use it, actually. Actually, get some engagement with the product.

Andrew: That’s a good point. One of the reasons I wanted to start off with that is a lot of people already think that they know the B2B, the lean startup methodology, but just knowing a little part of it, it can also get you hurt and get you killed. How’s the company doing today?

Etienne: That company actually failed. We sped up. We ended up invalidating six different products over a course of eight months. I personally lost money. I spent a lot of time, a lot of sleep [??] just trying to figure out what would make it work. My partner ended up quitting the company. We finished not profitable at all.

Andrew: This is one of things we want to avoid for the audience. It’s not enough to just say, hey, I’ve surveyed potential customers. I’ve done a little bit of research. There’s more to it than that. We’re going to get into it today.

Etienne: Yes.

Andrew: If it’s done right it could be like the story of this plain jane website that’s actually doing incredibly well. What happened with these guys before they launch a site they created this. How did they do things wrong with carrot sticks and correct it with optimizely. Then we’re going to get into the big points here of how the audience can do it, but how did they do it wrong and right?

Etienne: [??] Cumin is one of the people I interviewed for the book. He started Carrot Sticks with a partner of his. I think they met at Google. They started working on a problem that was not their problem. Not something that actually knew personally. They were working on education for math. They were interviewing. They were speaking with a lot of parents.

They were trying to figure out if that was a big problem. If there were ways for them to get more involved in math education. They did that for a while. They actually hired someone to help them with their product, but it was just not working. They were not able to get significant revenue, or significant validation for the product.

Andrew: Here’s the point that you told me before we got started was important. When it came time to do [??] AB testing. When they went to talk to customers they didn’t just survey them. They didn’t just talk to them. They did one thing that made all the difference. What’s that one thing?

Etienne: They just went pitching. They decided okay . . .

Andrew: Pitching as in sales pitching.

Etienne: Yeah, yeah. They just decided we’re gonna ask people in agencies if they’re willing to spend 1,000 dollars on that idea, a project that they didn’t have, and they just went [??] contacts that they had. They were able to sell 2 different licenses before the product was even built. It’s good. It validated the fact that there was a business, a significant business [??].

Andrew: I see. So not enough to just do surveys and understand your audience, but in this case actually getting them to pay is the proof that what they’re telling you is real, and that it will lead to something that will help your business grow. That’s one of the ideas that we’re going to talk about here today. We pulled out here as a team at Mixergy, a few ideas that we thought were very important for anyone in the audience who’s building a business that creates products for other businesses to follow.

The first one is to use your network and experience to find market opportunities. I used to think of this as being an unfair advantage, but it is not. It is one of the key things that helps entrepreneurs whose self or businesses do well. Here’s Dharmesh Shah, a guy who was one of my earlier interviewees on Mixer G. How did he do this?

Etienne: So basically before he started Hubspot and his famous blog OnStartup, Dharmesh was working for a company called Sungard. While he was working at Sungard he had a great idea: to be able to [??] the company could build. So the idea was to build an application that could allow Sungard to transfer clients from one institution to another. He went to see his manager. He told him about the idea, and the manager initially, after thinking the idea was actually pretty interesting, [??]. So Dharmesh had no experience selling products so he just said $5000. Sungard is actually in the business of multi-million dollar deals with large companies, so it was really not in their range of products.

Andrew: So by talking to them, he got a little bit of information from them. It wasn’t in the range, so what did he do?

Etienne: He was passionate about the idea, so he decided to leave the company, build a company his brother, and they actually use the knowledge that they able to get at Sungard to build a company

Andrew: And not just the knowledge, but they ended up partnering with them. Sungard ended up distributing the product in return for half of the revenue.

Etienne: Yes. For the first three years of the business, Sungard was actually their almost-exclusive sales channel. That kind of deal would not have happened had Dharmesh not been an insider, not known about that company. It’s a problem he was able to see because he was inside the company. He knew the company contacts.

Andrew: I see this all the time: that people will leave a company and then go back and sell to that company. Their first B-to-B, business-to-business client is the company they used to work for. In his case, Dharmesh ended up, according to your book, earning over $15 million per year in sales, and then I found this press release online from back in the day – this is 2005 – he ended up selling the company to Sungard, right?

Etienne: Yes, exactly. A few years after, he was able to actually the company to his initial employer when they actually saw that the [??] was really valuable. So initially they had doubts, but he ended up convincing them [??] selling products and bringing them customers.

Andrew: All right, so first customer, first bit of feedback, first partnership, ends up being a company that you previously worked for. Let’s use that on fair advantage instead of saying “Well I can’t go back to them. I can’t talk to them about this business because, well, no excuses.”

Etienne: People tend to neglect their own experience, and we usually have insides on problems that other people don’t see. I think by working for a corporation, we were able to see things that other people don’t have the visibility on.

Andrew: Let’s take a look at the big board here. The next big idea we want to talk about is to choose a market with a significant problem to be solved. You want to make sure that people are going to be willing to pay for it, want to make sure that they care enough about it to not just do the surveys, but to ask for your product to actually be built and to pay for it. You give an example of this company.

Let me bring it up on the screen. I told you I actually admitted to you, I didn’t know them before you. What is this company? How do they do it?

Etienne: Basically, Taleo was the first ATS, or Applicant Tracking System. They initially built one of their first job boards in 1998. The company was losing a lot of money. It was trying to scale [???]. The founder was $280,000 in debt when he finally got some funding. In 2011, when we were still doing [???], the company was sold to Oracle for $1,900,000.

Andrew: To Oracle for $1.9 billion dollars.

Andrew: Yeah.

Etienne: So it’s the technology that powers most of the job boards for large corporations.

Andrew: And so what is the significant problem that they saw?

Etienne: I’ll tell you what. (?) the company’s founder was actually working for a company called (?) and at that time basically the way you would receive for applicants for jobs was through newspapers. You can put an ad. You would get a bunch of (?) by mail. You would look at them, read all of the different (?). Bring them home and try to actually identify which people are interesting and call for interviews.

Andrew: I can’t imagine days when resumes would come flying to you through the mail and you’d have to go through every one’s paperwork to see what the right candidate is. There are no screening processes that are automated because it’s all done by paper. All right. So this is the world that he saw. It’s a significant problem because companies are getting, I’m sure, flooded with resumes in many cases. And it’s hard to figure them out and it takes a while to get those resumes. So that’s what it made it a significant problem.

The solution he came up with was what?

Etienne: So basically once he realized that that was an issue he went to see the HR people from X-bo, validated that there was a significant need, that it was something interesting they would like. And he decided to use web forms to be able to categorize and qualify candidates for jobs.

Andrew: Right. So now people could, as a result, go to a form online, fill out the form with their name and all the details, et cetera and then send in the application. So the question I have as a follow-up to this is how do you know if it’s a significant problem? Is it enough to just go a company the way he did with X-bo and say, “Is this a significant problem or is it more nuanced?” You want to know if it’s a more significant problem.

Etienne: In this case it’s very difficult to see. The only validation I had was inside X-bo which was the company we were working with people we actually knew. So it was either to take that as real validation of the problem. So in the book I covered it in ways the importance of the problems. So there’s the pain that’s caused by the problem. There is the availability of the budget. There is the market indications. There was a lot of market education required.

Andrew: Market what? I’m sorry.

Etienne: Market education so the amount of education is required for people to understand the value of what is being sold.

Andrew: Okay. Let me bring my camera up so I can dig into these a little bit. You’re saying you want to make sure that there’s a budget associated with this.

Etienne: Yes.

Andrew: So it’s not enough to see that this is a problem for someone, but you want to see that there’s actual money dedicated to dealing with this problem.

Etienne: It’s not as absolutely essential, but the fact that money is associated with the problem it tells you about the priority of the company. So they’re already aware that money has to be spent on solving that issue.

Andrew: I see. So for me going and getting coffee down the hall is a problem every day, and frankly I wish every day I could have coffee right here, but it’s not a problem that cost me any money.

It’s not a problem that significantly takes away from my income statement month to month. I’m not willing to pay for it. I’m not willing to spend any attention on it. Got it. But researching, I guess, does cost me money. Researching guests and figuring out who the right one is does. So if you can find a process that simplifies it, I’m all in.

Etienne: Yes.

Andrew: So budget is important. Pain is important, right? So if it’s a small problem, if it doesn’t really hurt, no one wants the solution for it. But if it’s a huge dramatic pain, then a company is willing to pay for it. I get that. The part that I don’t get is market education.

Etienne: Yes.

Andrew: What do you mean by market education? How do we use that to see if the problem is significant enough?

Etienne: So it’s a matter of removing friction. So ideally we want something that we’re able to sell initially, go for (?). The more market education is required the harder it’s going to be to actually (?).

Andrew: If I have to actually explain to people using the (?) example, what AB testing is, why AB testing improves the bottom line. How AB testing gets done? The fact that it . . . If I have to go through all of that, it’s going to take me too long. It’s going to be too hard. Got it. And so then I would want to avoid it, but if I just say AB testing is done simpler and an agency gets it, then I have a significant enough problem and it doesn’t require too much market education for me to sell it. So . . .

Etienne: Exactly. And that’s what you want (?) and having $82,000 in debt because it was a new technology to market. So it was our firm to be able to convince people that they needed that technology.

Andrew: Okay. All right. Onto the next big idea here on the board and that is to create a bare bones, minimum viable product, that MVP, that generates value. You talked about . . . oh, this is an MVP that I love that sent me. Oh, where is that actual file? Did I just put it in the wrong place? I probably did. It’s really . . . Usually I would just brush past it and say, “All right, I have these other images, but this one is so important I’m going to pull that screenshot back up.” Oh, I did have it on the screen. Is this it? This . . . What is this?

Etienne: So basically, what happened with Cycler is the co-founder of the company ended up building a prototype of the tool in Excel.

Andrew: Oh, this is an Excel page that I’m looking at?

Etienne: Exactly, so this is the output of the [??].

Andrew: I see.

Etienne: So being able to use different macros, he’s able to populate the information and create a profile for a customer.

Andrew: You know what? The reason I was hesitating to show this for a moment, I thought I had the wrong one, was when I first saw it, awe can I even show it? I know how I can show it. This is the part that I saw. I’ll bring it up on the screen. There it is. The part that said some, number one, number two, etc.

Etienne: Ah, yeah, yeah, yeah.

Andrew: So, I thought yeah, Excel spreadsheet but, the rest of it does not look like an Excel spreadsheet.

Etienne: It looks like a really basic product. So, basically it works. It’s all based on just answering a few questions in Excel And it creates. It will create a profile.

Andrew: OK. So, what he did was. He had an idea and instead of coding it up, instead of building it all the way through, he just put it in Excel. What was the basis for his idea?

Etienne: Basically Wayne actually spent 15 years working in sales. He was using this kind of profiling to be able to better understand the personality of prospects. Using a psychometrics tool called Five-factors, was able to create a profile that would actually calculate different techniques to help sell to prospects.

Andrew: I see. I would understand if someone was looking at these notes here. Are they strictly business? Are they more about analytics? Do they have more champion potential?

Etienne: Could they be champion could they be early adopters?

Andrew: Sorry? Oh, are they an early adopter of yours? Got it. So, by putting it into an Excel spreadsheet using macros, he was essentially able to produce the features that he wanted his software to have. Got it. Then that was his first viable product. He was able to put it in customer’s hands to see what they interacted with. You know I, the other day, talked to the founder of this company. You need a budget.

Today it’s a multi-million dollar piece of software that sells tons online. But, when he first started it was just an Excel spreadsheet that had all your budget items and all you had to do was fill in the right cells in Excel and you’d have your budget. He started out with an Excel spreadsheet and then, once he got customers to buy that, then he went out and hired a developer to turn that spreadsheet into software that did, essentially, the same thing with a few more features. I think it’s doing now $4,000,000 a year.

Etienne: That’s pretty good.

Andrew: Yeah. Competing against Intuit and Microsoft Money.

Etienne: That is one thing you learn when doing research in large corporations, is that there are so many different tools that were created by employees using Excel. Excel is one of the largest competitors to start- ups.

Andrew: Yes.

Etienne: There are so many different products created with Excel.

Andrew: But, I understand that a company could use Excel internally for all kinds of things frankly, everything from contact management to deep data analysis. The part that always surprises me is that someone would say, “You know what? I’m just going to build my first version of my software using Excel.” Here’s what the first version looked like in this case. Is this what it looked like afterwards?

Etienne: It was a sheet . . .

Andrew: This is the final product?

Etienne: Exactly, yeah. This is what it looks like now. So, it really evolved but, it’s still based on the same items that were validated in those first few meetings with prospects and customers.

Andrew: All right. So, we have our minimal viable product. It can be as simple as an Excel spreadsheet and we want to move on to the next big point. Which is, to find, not just early adopters but, the right early adopters for our business. You give the example of Michael Wolfe. Here let me bring him up, this guy. Is that Michael? I think that is. Yeah.

Etienne: Yes it is.

Andrew: That’s him right off his Quora profile. That’s where we pulled that. He had a situation where he had opportunity to get early adopters and they were willing to pay but, he said, “No.” What was the business that he had and why would he turn away early adopters who were willing to pay for it?

Etienne: So, basically Michael and his co-founders were working together. They were, for six months, interviewing various companies. They knew they had portion [??] information security they needed to have that first client that would validate their model. But, also be a lighthouse customer to be able demonstrate to other companies that the problem is [??] and that there is a significant credibility in that in their company.

Andrew: Okay.

Etienne: They were able to sign small banks because initially they realized that banks would be the early adopter of their technology. [??]

Andrew: Banks care about losing information tremendously. In a banks case you lose information it’s really a financial pain. Then if banks are coming to him and saying, all right, we’re up for it. We’ll pay you to help us protect our data so we don’t lose information. Why would he turn them away?

Etienne: They made the decision to go enterprise. They really wanted to get the top tier companies. They wanted to have that first customer to be able to demonstrate what they can actually do with a large corporation. They would [??] a person to sell to a bank in a [??]. He turned down that deal because it would take them a lot of time to manage that account and be able to maintain that account, which would take away from selling to large corporations, which was their objective as a company.

Andrew: I see. If they learn how to create a product based on feedback that they get from a smaller bank they’re not going to be able to create a product that makes sense for a bigger bank. Bank of America doesn’t have the same issues as First Bank of Queens New York.

Etienne: It’s also a matter of . . . because in B2B one of the core is case studies. A case study from a small bank does not convince another large corporation to buy the product.

Andrew: Got it.

Etienne: It’s the same thing. If a large corporation sees that drop box has declined, or a smaller start-up is declined. That’s not going to convince them to buy large technology.

Andrew: All right. As a result they ended up getting Bank of America as a client. Is that right?

Etienne: Yes, exactly.

Andrew: First big one. They sold the company for how much? Do you remember?

Etienne: 450 million to Cemen Tech.

Andrew: Was it 450?

Etienne: I believe it was 450. [??]

Andrew: No, 350. Actually, it’s hard for me to tell. I think according to Venturebeat this article was 350.

Etienne: Okay. Okay. That’s still a significant amount of money.

Andrew: Very significant amount of money. That’s what you’re talking about.

Etienne: Yes.

Andrew: If they would’ve gone for a small mom and pop. If they would’ve come to, Andrew, for example, and said, Andrew, you have a company. You don’t want to lose your data. We’ll build something for you. I wouldn’t have been a good case study. I would’ve given them proper feedback on their product. All right. Boy, you know what? That’s a hard thing to do.

When you really want to sell. When you really want to see if your product is, if anyone loves it. When you want to bring in some money to turn away customers because they’re the wrong first customer is really painful.

Etienne: It’s all about product focus, actually, to the core thing for start-ups be we have only so many hours in the week. It’s important to be able to focus on a specific market.

Andrew: I have that, by the way, too with me at Mixergy. It’s so easy to take money from someone early on, but if I then build something just for them and not for a bigger community. It’s hard to . . . you know what? I don’t want to get to deep into Mixergy. I want to make this about how it works universally.

One of the cool things that I noticed about this headline is, look at this. Vontuse [SP] 350 million dollar win shows how patience and focus pays off.

Etienne: Yes.

Andrew: [??] In the sale we see what you talked about. All right. Now onto the big board. Establish prospect, trust. You gave us an example of how this company did it. Says directly out of your book, Lean B2B, and I will zoom in so we can see it.

Etienne: Yes. The companies called iBwave. It’s a very niche market. They’re basically doing tools to help design and building wireless systems. I should say one of their clients is actually the 49ers stadium in San Francisco.

Andrew: Yup.

Etienne: Basically, they have a software that helps people working in the stadium [??] design the optimal system for the wi-fi system, the wireless system.

Andrew: Okay. They had an issue that a lot of companies have which is you’re new. We don’t trust you. That you’re going to go away. Your code will disappear. What did they do?

Etienne: They actually, clients ask them to put the code of the product in escrow. [??]

Andrew: They put the code in escrow.

Etienne: Yeah.

Andrew: That means no matter what the client still has access to the software that they want. Either directly . . .

Etienne: Exactly.

Andrew: . . . through iBwave, or through the code that they’ll get in escrow.

Etienne: [??]

Andrew: The client gets the code out of escrow if what? What are the contingencies that allow the client to get that code?

Etienne: It’s based on the product being successful, so, delivering on the value. [??] demonstrate credibility.

Andrew: Okay.

Etienne: Initially they didn’t have a brand name. No one knew about the company. That was one way to speed up that adoption of the technology.

Andrew: I sometimes wish that consumer based businesses and businesses that are aimed at smaller companies will do the same thing. That they say, look, we want you to use our software in your business. We stand by it. We believe it’s going to be a success, but if for some reason it’s not a success we’re going to give you the source code so you can continue on. I’ve had so much software on Mixergy itself from companies that were just getting started, and I believed in them, and I wanted to support them. We implemented it on Mixergy and then suddenly the company was sold and the product was gone or the company closed and the product was not supported anymore.

Etienne: Not in this case because they demonstrated that in 55 days companies could recuperate their investment. And for the last ten years they’ve been non-profit 100 less in Canada.

Andrew: Wow.

Etienne: It’s actually a very successful bootstrap business.

Andrew: All right, let’s take a look at the next item on the big board. Pivot tactfully to grow your company in the right direction. Let’s take a look at dotCloud. How did dotCloud do it?

Etienne: So basically dotCloud was a platform as a service company and they ended up at . . . It was a success [??] a few companies were using their solutions, the developers were using their solutions to implement code. But they realized that it was a very crowded sphere and there were big players like Heroku in that sector. And they thought about it, thought about it and they figured out that they could actually do what [??] calls a zoom out pivot which basically means going up one level and creating a platform around what you’re working on.

Andrew: Okay.

Etienne: So then you get their platform was successful, but they ended up creating what they call the docker containers which basically allows the developers to transfer codes without having to redevelop connectors to different technologies. It’s possible to work in different environments and move environments effortlessly.

Andrew: Okay, and . . .

Etienne: So what happened after . . .

Andrew: Sorry, go ahead.

Etienne: Yeah, so what happened afterwards is it quickly became super popular. There is a lot of companies that started using it. There were meetups. People starting their reactive groups talking about a docker. So in just a few months it really became super popular. And companies like Google adopted the technology and now they’re working with docker I.A. afterwards. So it really validated that change with the success.

Andrew: We can kind of see the before and after on their webpage today, dotCloud. Is that platform as a service on the left, right here? And then Docker on the right, the new one.

Etienne: Heroku actually became one of their clients.

Andrew: Who did?

Etienne: Heroku, so one of their competitors initially became one of their users.

Andrew: Oh, Heroku, so with the left business they were competitive with Heroku and now they created something that even Heroku could be a client of.

Etienne: Exactly, exactly.

Andrew: Got it.

Etienne: So they created a new [??] for them by going one level up.

Andrew: I see. Let me see if I understand that right actually. The zoom out pivot is, for example, Mixergy does interviews, interviews do okay. Well, actually they do really well, but let’s suppose they only did okay. I would zoom out by saying I now have a platform for doing interviews instead of me doing interviews myself, anyone could do interviews using my platform and I’ll just make it easy for them.

Etienne: Yes, yes.

Andrew: That’s what you’re talking about, okay.

Etienne: Yes. Another example is there’s a company here in Montreal. They were doing software through email, through email integration and they became an A.P.I. for companies wanting to use email as a tool.

Andrew: I see.

Etienne: [??] the A.P.I. to connect to email inbox.

Andrew: I see. All right, onto the final point which is to keep your business lean to avoid quitting. Let’s talk about another painful, painful example of that. Here it is. You had that with this . . . Where is that?

Etienne: Flat Back, so it’s a company . . .

Andrew: This was the only screenshot we can find.

Etienne: Yeah, yeah, it’s another business URL.

Andrew: What was Flat Back?

Etienne: Basically we created a business to ad- . . . We created a tool to add a layer on top of the web to be able to add what we call flags or comments on elements of web pages anywhere on the web. We were bootstrapping the business, so we had money that we invested in the business and we had the developer working. But it ended up taking six months more than we had expected.

Andrew: Six months more to create this thing.

Etienne: To create it, exactly. It’s the creators that are the technology behind that would actually work for [inaudible 00:04:38] on different browsers.

Andrew: And you’re saying that, of course, if it takes too long and you don’t have funding, then you’re going to go out of business. By keeping lean you have a much bigger runway. What could you have done to go even leaner than you did back then?

Etienne: We should have actually got feedback from users much earlier. So we waited nine months for the [??] and when we did, we actually valued that some large companies were interested in technology.

Andrew: Okay.

Etienne: But we ran out of money without being able to build the last few features that we required. We needed to be able to sell the solution.

Andrew: I see.

Etienne: So after that, the company collapsed based on just . . . or lack of funding and not being [??] to actually sell the technology.

Andrew: So feedback sooner and what we’ve learned in this conversation is not just feedback through surveys, but feedback through will you pay for this, we’re about to finish building it.

Etienne: Exactly, exactly.

Andrew: All right, so let’s . . . That screen just went blank because I was trying to see if I could show the Vimeo video that you guys have. This is from you. It’s still up online.

Etienne: Yeah.

Andrew: See. All right, why don’t I instead of showing that, show the book. This is the book that shows the process, the lean startup process as it applies to business to business. And we’ve seen some of the ways that business to business is different from consumers. When you’re selling to a business, yes, they’re okay with the lean product, but they also need the safety and the trust which is why we talked about escrows and option for giving trust. Right? Consumers are willing to be . . .

Etienne: And reduce risk.

Andrew: . . . much more trusting, businesses need much more assurance. Businesses are willing to pay upfront to prove versus consumers which are more you could have just tried for free. That’s why you wanted to write this book.

Etienne: It’s [??} a book I would have loved to read as an entrepreneur starting [??].

Andrew: All right, thank you so much for doing this. Anyone who wants to follow-up can check out Lean . . . My head’s going over to the right. I might as well just point and bring it up on the screen, LeanBtoBbook.com. That’s what’s been on my right monitor the whole time we’ve been talking. Thank you so much for doing this. Thank you all . . .

Etienne: Thank you.

Andrew: . . . for being a part of it.

Etienne: Appreciate it.

Andrew: You bet. Bye, guys.

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Master Class:
How to understand your target
(So you can grow your community)
Taught by Stephanie Burns of Chic CEO

Master Class: Understand Your Target


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Transcript

Andrew: This session is about how to understand your target market so you can grow your community and it’s led by Stephanie Burns. She is the founder of Chic CEO, a site which helps women build businesses. I’ll help facilitate. My name is Andrew Warner. I am the founder of Mixergy, where proven founders, like Stephanie, teach. Stephanie, we’re going to talk about the success you’ve had with Chic CEO and how much help you’ve given other entrepreneurs. But it’s important to start off by talking about the time when you had a challenge getting traction. What was that period like for you?Stephanie: Well, Andrew, truly Chic CEO started from zero.Andrew: Mm-hmm.Stephanie: I had no money, no marketing budgets. I worked in marketing, but I had no resources really to market Chic CEO and grow my community. So for a long time there, it was really just a very small list, maybe two to three hundred people that were friends of mine that I’d grown throughout my network here, living in San Diego for some time.

Andrew: Mm-hmm.

Stephanie: And now we’re up to 60,000. But I had no money to do anything like that. So I really had to start getting scrappy and it was rough.

Andrew: And this is the way the site looked back then when you were just getting going.

Stephanie: That’s the very first site. That was our very first advertiser there on the left. Yeah . . .

Andrew: Shoebox, that was the advertiser.

Stephanie: My very first advertiser I got, yup.

Andrew: And at the time you didn’t know how to get inside people’s heads. As you look at this page, what makes you say, “Mm, I’m off because I didn’t fully get the customer back then, the community member?”

Stephanie: If you notice, there is no way on that homepage for me to capture an email address. There was a join button but it’s in the main now but it’s really buried. And there was really no way for me to engage with my consumer. It was more of me just talking at them, hoping that they got the information. But I was getting zero feedback. I was getting no . . . my list wasn’t really growing. It was a pretty rough period.

I wanted to create a resource that women could use and understand and it would be helpful, but my mistake was that there was no feedback loop. There was no way for me to engage with them and bring them onboard.

Andrew: Ah, I see, okay. Not even basics of email and all the stuff that we’re going to talk about obviously wasn’t there yet, either. Today you are very good at it. How many people did you say were in the community?

Stephanie: About 60,000.

Andrew: And this is one way that you do that, that you engage people. What are you doing on Facebook?

Stephanie: We do a lot on Facebook. We have about 14,000 followers now and this program here is an old program that we used to have . . .

Andrew: Mm-hmm.

Stephanie: . . . called the Chic Siren Membership Program. And it took me a long time to put together a membership program. I didn’t want to put any information behind a cash curtain. We finally opened it up. We only had 8,000 people on our list at that point when I launched that, and that was the first time that we really dug in deeper with our consumer and asked them what they wanted. And from then on is when we really started growing a whole lot more.

Andrew: I’m looking here at my notes and now you have the private group where people get to talk to you, you have the monthly mixers where people get to talk to you, you have lots of different ways as we’ll see here for people to talk to you so you can understand them, and that’s what you use to speak to future members of your community, by showing them, “Hey, I understand what you’re thinking.”

And the way you understand it is by getting inside people’s heads. Let’s talk about how you do that. I’ve got a big board here. Let me bring it up to show the audience. These are the different tactics that we’re going to be talking about when we get as specific as possible. And the first thing that you say is, “Do not assume that you know what people want.” And you did that here. What are we looking at here?

Stephanie: Well, one of the big things that we kept hearing was our community didn’t have access to funding.

Andrew: Mm-hmm.

Stephanie: They were frustrated. They couldn’t grow because they didn’t have any money. And it was a really interesting time for us and crowd funding was really big. And if you’re in the startup community, you know what crowd funding is.

Andrew: Yeah.

Stephanie: You understand what that means. Our community did not understand what that meant. We moved forward building our own crowd funding platform without asking them if that’s something that they wanted. We just assumed that they would want their own crowd funding portal and we launched it to Crickets.

Andrew: I see.

Stephanie: We had a few people on there but truly, nobody understood what a crowd funding platform was. They had heard of Kickstarter but they had no idea what it meant to crowd fund. And they expected us to be doing the promotion for them with the crowd funding platform, and as you know and what most people know now a year later is that crowd funding is really about your own crowd. So if you don’t have a crowd you need to build one in order to have a successful crowd funding campaign.

Andrew: I see.

Stephanie: It tanked, it tanked.

Andrew: I’m looking at the date here. This is from early 2013, and as you said at the time many people outside the tech community didn’t know what crowd funding was. And I can understand that people would say, “Oh Stephanie needs crowd funding. Oh terrific. I’ll post my project up there. I’ll post my business up there, and she’ll get a crowd to fund me. Life will be good.”

Got it. So that’s what they thought and the other thing that you noticed was that they didn’t even want it. You didn’t check in with them and say, “Is this something that you want? Is this something that you’re looking for for us to do? As a result, not just crickets. You try to find it today. It’s not up on the site any more, is it?

Stephanie: It’s not. We took it down a long time ago. The one thing that we did do that was smart was we white labeled a crowd funding platform. So that we didn’t put a ton of upfront cost in building our own before we tested it, but we had so many resources, so much time and effort into building it. And it just tanked. Nobody wanted it. Nobody understood it. And we just finally took it down and decided to revisit it, and we might revisit it at some point when it makes sense. But we’ll be definitely asking our community first if it’s something they want.

Andrew: I see. And so I was going to ask you, what would you today if you wanted to launch it to make sure that it was useful to make sure that it was something that people wanted. And actually it occurred to me that it’s the wrong question to ask. You wouldn’t say, “I’m going to launch crowd funding. How do I make it useful?” You would start off with not the idea but with the conversation with people and then if that drives the idea, that’s when you investigate ways of doing crowd funding. But you would say, “I want to do crowd funding. Hey, guys, how do I do it right for you?”

Stephanie: Exactly. I would first start with the question, you know, if you’re having trouble with funding what are you looking into now? What is working for you? What isn’t working for you? How can we help you? And we do that in a lot of different ways with our networking events that we do, with our social media surveys, our email newsletter to reach out and really try to get in touch with our consumers and talk to them about what they want.

Andrew: Okay. Let’s look at another way that you do that. Back to the big board here, you say get face time with people to make sure that even the way you’re communicating even your elevator pitch is understood. And you had a situation where you were pitching investors and customers and what happened when you got face time with them? What did you see on their faces?

Stephanie: We did a mock scrub, like a mock pitch to investors, and the room, they just did not get it. They didn’t understand it at all. There was actually somebody in the room that had actually been a subscriber of ours for a long time who didn’t quite understand what we do. And that was back when our old . . . we had our old side issues what you should, and it had our old tag line which said . . . Our tag line was entrepreneurs with style.

Andrew: Let’s bring it up right now here. I’ll zoom in on the tag line from before, entrepreneurs with style.

Stephanie: Yeah, entrepreneurs with style.

Andrew: And when you showed it to people, you look at their face and you can tell that what? What did they understand from that?

Stephanie: They thought we were a fashion brand for entrepreneurs.

Andrew: Got it.

Stephanie: [laughs]

Andrew: Clothes for entrepreneurs.

Stephanie: Yeah.

Andrew: I see. And today because you saw that in their face, because you noticed that’s what they thought, this is what the tag line is now. What does it say there?

Stephanie: It says empowering savvy entrepreneurs.

Andrew: Got it. And so how do you know now actually that empowering, what empowering means to people? Is it . . .

Stephanie: Where is the focus group we have?

Andrew: I see.

Stephanie: We had some face time for sure.

Andrew: Okay. So now you know that they understand empowering to mean what? Courses. It means community. What else? What does it mean?

Stephanie: Tools, how-to, community, networking, ways for them to do business with each other, ask. Most of our information is on there. It’s free. So you can come and learn how to write a business plan (?) how to write a press release, financing, funding, marketing. Anything you could possibly ever want to know about starting up your business is on (?) for free.

Andrew: What’s the tool that’s available too? You’re saying you also do tools.

Stephanie: Yes, we have a (?) platform that we sell called “Chic Works” and CRM email marketing software that we sell. And we use it to run the entire (?) back end. So we offer that to our customers at a very discounted price, or you can get it free with some of our paid membership programs.

Andrew: Got it. Here’s the URL for that. That’s chicworks.com. All right. Onto the big board then. Next idea for us to talk about is to find the space in between and use people’s skillset to serve a new market or to use your skillset to serve a new market. What does that mean?

Stephanie: So really in terms of understanding your target market . . .

Andrew: Mm-hmm.

Stephanie: It’s an interesting way to think and how [??] think in trying to find the spaces in between. So we get a lot of women entrepreneurs that come and ask for opinion or challenges and what we like to do is talk with them about the spaces in between. How can they use their company and their vertical to find ways of opportunity that they might have expertise in that they might have not thought about before?

So that’s something that we always try to focus on with our consumer base, with our community or the private clients that I work with. So it’s really about digging in . . .

Andrew: Mm-hmm.

Stephanie: . . . understanding what they do in our target market and then helping them find it.

Andrew: Where do you put the spaces in between? Maybe, would it help if we looked at an example? How did that play out with this site?

Stephanie: So Innovation Nation, that’s a really amazing site.

Andrew: Mm-hmm.

Stephanie: The woman who owns it, her name is T.D. She’s up in the Bay area and she really has such a cool business here.

Andrew: Mm-hmm.

Stephanie: She was working for some big box companies like the Googles and the Facebooks and she would come up with these really amazing ideas and then the company would take them . . . Andrew: Mm-hmm.

Stephanie:. . . from her. So she noticed that there’s all these small independent inventors that aren’t making money off of their ideas and they’re getting stolen by the big guys. So she created this business. She finds that really interesting space in between that. Well, she created a marketplace where you can upload your idea – and the patent laws changed last year, I think, in March – so she followed the new laws. And you can protect your idea here and if you want to sell it to the big box stores, you can. Otherwise, you can protect it for a year if you want to work on it, which is really interesting because then she created basically ecommerce of ideas between the big box guys.

Andrew: Mm-hmm.

Stephanie: So she really found that space in between, which was really . . .

Andrew: In between two different people.

Stephanie: Two different people, two different verticals, two different industries. Maybe you find your skillset or your expertise and you can pop it into another. So it’s really finding that area where you can fit in and make a difference.

Andrew: Do you have another example of that? I still don’t fully understand how this works.

Stephanie: So finding the area of opportunity, and really, this conversation started out with the founder of Yummie Tummie.

Andrew: Mm-hmm.

Stephanie: She was a real housewife of New York, Heather Thompson, and she and I were actually . . . I was interviewing her. And she found an area of opportunity to create shapewear by looking for those holes. So we all find areas of opportunity that aren’t being served. I found it with this market.

Andrew: What did she do with Yummie? I’m looking for a Yummie Tummie website.

Stephanie: It’s shapewear.

Andrew: Shapewear, okay.

Stephanie: When I ask her how she comes up with new ideas or how she looks for areas of opportunity, she mentioned she looks for the space in between, the places that aren’t being served, the communities that aren’t being served, the . . . another good example that I love is Quirky.

Andrew: Mm-hmm.

Stephanie: I’m sure you’re familiar with Quirky. Ben Kaufman, the CEO.

Andrew: Yeah.

Stephanie: He found a way for everyday inventors also, to come in and provide them a place to do social inventing where we do it all together. So it’s really . . .

Andrew: I see.

Stephanie: . . . really an innovation-type play.

Andrew: So if I understand you right, for him there was a market for the big innovators who worked at big companies, big inventors at big companies like General Electric. There was a place for the people who were just tinkering in their garage and doing it for their own fun. But the person in between there, the guy who wanted to invent something and sell it, not on a huge scale but still sell it and get it out there to people who had this shared interest, that person wasn’t served.

Stephanie: Yeah.

Andrew: That inventor didn’t have the ability to reach a market and that’s where he went, in between the small tinkerer who did it for himself and the big guy who worked for a big company.

Stephanie: Right.

Andrew: Is that what you’re talking about?

Stephanie: Yeah, definitely.

Andrew: Okay.

Stephanie: Yeah, and he found a huge market. I started with Quirky in the very beginning. I was one of their very first thousand people and now they have probably half a million inventers. And it was such an interesting thing to watch him find this new market.

Andrew: Yeah, it is.

Stephanie: So I think it’s important for us to understand that we can find spaces in between and find a really big market just like Quirky did.

Andrew: It’s interesting. The reason that I brought up General Electric is that I think that’s the company that they’ve now partnered with. So these small innovators now have access to big companies, too, to work with. But these are some of the products that [??]

Stephanie: If you search Chic CEO, you’ll see I won the very first invention challenge with G.E. I invented a milk jug. [laughs]

Andrew: Really?

Stephanie: Yeah. I did. I won the very first one.

Andrew: There it is.

Stephanie: There it is. That was me. So, yeah, they’ve found the ways for people to come in and get involved and this is probably the best example, so . . .

Andrew: Stainless steel. Let’s create a gorgeously designed milk jug that keeps your milk fresher and tells you when it’s really going bad. Cool.

Stephanie: Yeah. So this is the winner and GE paired up with Quirky and we went to Maker Fair in San Francisco and had a 3D model built of it. It was on Fox News. It was . . .

Andrew: Is the image here on the site? Let me see.

Stephanie: It should be somewhere. But that’s such an amazing example of finding the space in between and Ben Compton (sp) did a great job in figuring that out so if you have a business or a community that’s not really thriving, it’s really fun to find maybe that space in between that nobody else is serving.

Andrew: This is it?

Stephanie: Yeah. That’s it.

Andrew: You know what, I didn’t realize this is you. I didn’t realize you did this.

Stephanie: I did. Yeah.

Andrew: Oh. That’s cool.

Stephanie: Mm-hmm.

Andrew: So there. It’s a milk jug at home that tells you when the milk is expired or getting close to.

Stephanie: Yep. By testing pH instead of the expiration date which is . . .

Andrew: Oh wow. So even more accurate than the expiration date.

Stephanie: Yep. Yeah.

Andrew: Wow. Congratulations.

Stephanie: Thanks.

Andrew: All right. On to the big board then. Most people, frankly like me, if you hear the same question over and over again, you feel kind of upset with people. Why do you keep hassling me with the same thing? That’s the way I used to be. Today I’m learning to be otherwise and what you’re saying is, if you’re hearing the same question over and over again, look for a solution. Solve it one time. You’re seeing a big need. And so, do you have an example of how you did that? Maybe when you were an MBA student?

Stephanie: Yeah. That’s exactly how I came up with Chic CEO. I was getting my MBA. I was in grad school and it was about 2008 and all of my girlfriends were getting laid off from their jobs and they kept asking me, “How do I start a business? I have to start doing something on the side. Whether it’s consulting or wedding planning or personal shopping or anything like that. How do I get started so that I can pay my bills?” And I kept saying, “I have no idea. Why are you asking me this question?”

And they said, “You’re getting your MBA. Aren’t you learning how to start a business?” And I said, “Well, no. I’m not. I’m learning how to run a business. I’m learning statistics and global marketing and strategic management. I’m not learning how to go down to the courthouse and fill out which piece of paper and what legal structure I should be.” So again, there’s that kind of space in between.

I noticed that all of my girlfriends were starting a business out of necessity and they had no clue how to do it and the resources they were finding, the SBA’s and the scores while they’re good, you kind of need an MBA to understand what the hell they’re talking about. So I brought all of my friends into my living room. I gave them a ton of wine. And I started asking them a ton of questions. What are you missing? What are you confused about? Have you picked a legal structure? What are you going to do about your taxes? And they just stared at me blankly.

These were not dumb women. These were very smart, brilliant friends of mine. And I had 15 of them in my living room and I thought, my god, if I have 15 of just my friends in my living room asking me these questions, nobody’s serving this market. So I started doing a ton of research on women starting businesses and I started seeing this upward trend of female entrepreneurship and today women are starting businesses almost 2 to 1 over men.

So it was really a market decision that I wanted to focus on this group because they were growing so quickly and so, again, it was kind of finding that space in between, but I was getting this question asked over and over again and I couldn’t understand why I was getting it, why they couldn’t find this resource. So I finally built it for them.

Andrew: And so for you it was and still continues to be in person events where people are telling you this. If someone’s listening to us and says, “Hey, you know what? No one’s asking me the same thing over and over again. I’m not like Stephanie in school where people happen to be asking me about how to start a business. I’m not like Andrew with a big audience who happens to keep asking him questions and he can look for commonalities. I’m just getting going. How can they find these questions that keep coming up over and over again that they can then use to build a business based on what people want based on their internal psychology?

Stephanie: You know it’s interesting, I kind of troll question boards like Cora, Yahoo Answers, things like that to see if there’s discussions. Reddit. Things that would interest me that I might have an expertise in to see if there’s any common threads.

Andrew: I see.

Stephanie: I also look for things that might be happening in my friend group or my peer group to see if there’s common frustrations that are coming up. People say to start a business out of passion, and I really believe you should start a business out of solving a problem. So it’s really about asking maybe your peer group or people . . . or a sub-set of people that you might have an expertise in already to see if there’s an issue that keeps popping up and that you can kind of cherry pick something out.

I also have a (?) on the site called businesses we wish someone else would start.

Andrew: Un-huh.

Stephanie: [laughs]

Andrew: Where people go in and say, “I wish someone would start this business for me.

Stephanie: [laughs] Yeah.

Andrew: Where is that?

Stephanie: That’s in our elite portal so it’s private, you must remember.

Andrew: Gotcha.

Stephanie: We used to have ads pop up in there.

Andrew: You know what? You mentioned trolling Cora, and I understand the power of going to those kind of sites, but one thing that I noticed is I thought people trolled the contents of my site and see what people are complaining about or saying, “Andrew, you missed this. You didn’t cover it.” And specifically what many who did that noticed was I don’t cover the early stage of a business. I’m not here to feature a person who just started a business and maybe did 5,000 a month in sales.

I’m looking for the mega hits. And so people would complain in the comments. People would say, “You should interview smaller companies. You should interview bootstrapped entrepreneurs like startup businesses and what I noticed was there are few people who caught that and said, “You know what? I’m actually going to do that and create a site that will answer this frustration that Andrew doesn’t seem to be responding to.”

So I can see the power of Cora, but I can also notice from firsthand experience that it can be done on other sites too and smaller communities even.

Stephanie: Absolutely. And that’s a very wise person that can go and start to notice that there’s areas of opportune space in between where you can find that small frustration and actually find a big market within it.

Andrew: Let’s look and see what else we’re going to talk about, and that is deliver the information the way your target market wants it. For you it was, again, in person, isn’t it?

Stephanie: Some of it is. I think that obviously if we’re 60,000 people entrepreneurs I can’t do that all in person.

Andrew: Mm-hmm.

Stephanie: So we started to notice that there’s a few ways that our community has to learn, and a lot of it is through interviews and webinars, and some of it is in person. For me I was learning more from the in-person so I was benefiting then. It was really more about benefiting me to say that selfishly. The in-person stuff, the face time, was really important in learning how to serve your target market best. And for me if I didn’t have that face time I wasn’t really, really getting in and digging with them.

We did have our (?) program which we talked about earlier today, and that was really a program that was $19 a month and the women that were in it got our downloads and our templates and some tools. They didn’t have access to us. We started to noticing that we were getting the same questions over and over again there, so we decided that we would create a conference to bring in the people that were asking the same questions over and over again to help them get what they needed in person without (?) and things like that. And it really worked. So . . .

Andrew: How did that help you understand that you needed to do a conference as opposed to a webinar as opposed to sharpening the tasks that you already have up on the site and the tools that you’re already have up on the site? How does a complaint lead to a conference that tell you, “We want to deliver . . . People want our content delivered in person.”

Stephanie: I think if you’re going to get the complaint over and over again, then you should really follow it. So . . .

Andrew: So wait. Were people just saying to you, “I don’t like understanding and learning online. I need to . . . No, they weren’t. It’s not that direct, and when people are that direct, it’s often not useful.

Stephanie: [laughs]

Andrew: Because people want it exactly the way they want it, and it doesn’t necessarily make sense for you. Hey, Stephanie, call me up every morning if you were to ask people what do you want.

Stephanie: Yeah.

Andrew: So how do you take what they’re expressing to you and understand that what they really are asking for is information delivered in person.

Stephanie: Well, I think it’s a path that you need to follow. So if you keep getting the complaint over and over again or the question over and over again, it becomes more of you need to ask the question. So I would get questions over and over but we’ve already answered in the program. And so I started asking them, “Well, have you read what’s in the program? Have you read what’s on the site?” Well, I just wanted to talk with you a little.

So if you keep getting the complaint over again or the question over and over again, it becomes more of you need to ask them questions. So I would get questions over and over that we’ve already answered in the program, and then so I would start asking them, “Well, have you read what’s in the program? Have you read what’s on the site? Are you . . . Well, no, I just really would like to talk to you. Can I take you to coffee? Can I take you for a drink? We have a monthly networking service, and they’re really valuable because first of all I get to talk to a bunch of people, my target audience every month during this time.

But when people say, ”I want, can I just pick your brain just if I could have 20 minutes.” I’ll say, ”Come to this networking mixture and we’ll do it there.” But if it gets more involved and I start asking more and more questions. I say, ”You know would a full day intensive be something that would sound like, like something you would want?” If the answers yes and I ask a few people and then that turns- and those people come and they get what they need. Not everybody learns the same.

Andrew: Got ya. So you’re hearing their frustrations with the material that’s there and you’re prodding to see. How do they want the information delivered?

Stephanie: Right.

Andrew: You could have just as easily asked, ”Would an intensive help?” And heard back from them, no I don’t have time or interest in traveling that far. And then you might have moved onto, well would it help if we did a Google hang out once a month? Would it help if we did more of a Chat- board? I see, so you’re looking to see what they think they want for as a way of communicating information to them.

Stephanie: Right, and I think it’s really important to understand that about your target market. How do they want their information from you? Do they want you to come and work with them one-on-one? I work with private clients but obviously that’s quite a bit more expensive than if they just join the Chicory program which is only $49 a month and they get videos.

So it’s, you know, obviously the in persons stuff is going to cost them a lot more but if that’s what they want and that’s how they want to be served. Then make that available to them and you’ll see your target market grow.

Andrew: Okay, let’s go on to the big board here. The next point is to use details to delight your target market. You did that at your event, I think this is a part of how you did that at the event. Is this from your conference?

Stephanie: It is yes.

Andrew: I wish we had a picture of the bathroom, which we’ll talk about in a moment. But as I look around here so what is some of the detail that you’ve laid out for people that we may not notice?

Stephanie: The bathroom was a huge success. We got so many comments about the bathroom.

Andrew: What exactly happened in the bathroom?

Stephanie: It was just, you know, we had signs up everywhere. We had inspiration quotes up, we had fresh flowers. Everything that we do, was part of our branding were Chic CEO, so everything that we do has to be chic. And those tiny details are so memorable and sometimes people forget about the detail. But the more detailed you get in our branding and you services and how you interact with your target market. The more loyal they’re going to be and the memorable you’re going to be to them.

So having- we had signs on the bathroom stalls. So when they went to the bathroom and they shut the door it was a quote from Coco Chanel or Oprah or Tina Fey or something like that to make them smile or laugh. And there were signs up that said, ”You look gorgeous today.” There were flowers everywhere. It was a really beautiful, beautiful event. And that was really memorable to them.

So really understanding your target market, really means what you can do in the details that will really delight them because those things actually matter. You know, Apples probably the best testament to that. And I think that for us it’s really important to make sure we delight and surprise within our brand constraints.

Andrew: Let’s take a look at this, this is the welcome section, the welcome area.

Stephanie: Yeah, one of them, and that iPad is from one of our sponsor’s Mopro. You see we have flowers and everything was chic.

Andrew: For some reason I don’t notice the flowers but I mean, my eye wouldn’t go to the flowers but they would still affect my sense of the place. I’m looking kind of in the left corner, I don’t even know if you can see it up on your screen they’re glasses. What are those about?

Stephanie: Those are from our sponsor, Mopro.

Andrew: Got yea. This is part of their logo.

Stephanie: Right. And in the back there where the people are we had this huge board up, for people to put business they wish someone else would start, on Post-its. And you could walk up and look at them and take a Post- it if you wanted, if you’re just thinking about a cool business or something like that. We had a panel discussion but the panel discussion looked like you were sitting in a really beautiful living room. We had an interior designer come in and bring in a really cool coffee table, gorgeous chairs, so everything felt really chic, it felt, like I said within our brand constraints.

I think those details really matter when you are addressing your target market. Because they tend to expect those things from you. Everything had to be chic otherwise we weren’t going to do it at all. Remember when we were talking about boring business information which was yeah, I said it can be pretty boring, you know, we want to make it fun, we want to make it chic, and we want to really play within our brand on that.

Andrew: All right lets go on to the big board. You say we need to look for places, look for those connections in the me to areas. What is a me too, in this context?

Stephanie: So, yeah, you want to connect, really connect with your target market. Quick connection happens when you (?) And I’ve always said this and I truly believe it, I don’t think that if you want to build a community, (?) community, that you want to trust you. You have to have some sort of hierarchy and MeToo is really a great way of building trust and interaction with your audience.

And when I’m talking to my private clients or talking to anybody that I reach out or reaches out to me, I don’t BS them. I don’t pretend that I have it all together either. I’ll tell them, “Yeah, I cried at my computer this morning too, sister. We’re all in the same boat.” Entrepreneurship . . .

Andrew: Why do you do that? I cried at my computer too is something that most entrepreneurs, especially people who are teaching don’t want to admit to their audience. You say that, why?

Stephanie: Because I don’t want them to think that they’re alone because they’re not. We all go through it, every one of us. I don’t care who you are. You sat at your computer and cried about something real, terrified, and then it is not easy. This is the hardest thing I’ve ever done, but the most rewarding thing I’ve ever done, especially women. We’re risk givers. We’re afraid to take the risk. In thinking, oh my God, what have I done? What if I screw this up? What if I have no idea what I’m doing?

So that’s (?) so that you don’t have to have every single answer right away or know everything or have to have your MBA here for you. I get it, I understand, I know where you’ve been, and nobody’s going to understand or trust me or think that I know what I’m talking about if I haven’t been in their shoes.

So it’s important for me to be as completely genuine and transparent with my audience as possible. And, yeah, I’ve learned some things along the way obviously, and I try to impart them as much as I can with my audience. But if I pretend to my audience that I’ve got everything together and it came easy to me, I wouldn’t trust me. So, yeah, I want them to feel like they’ve got an ally in this and that I’ve been where they are.

Andrew: Here’s what my team put together in the notes in preparation for this session. They said that you had an entrepreneur ask you if she could pick your brains. You said yes. She had an opportunity to learn from you, but you also had an opportunity to learn from her. In that conversation when she said, “I don’t know if I have any business with getting started with a business.” And you thought, you know what? I’ve felt that too and then you expressed that.

In that shared moment you guys bonded and as a result she became a private client. And that is the point that you are making that if you share those moments and people feel like me too or if they shared and you expressed that you also felt it, that connection, that similarity is the bonding that allows people to feel like you get them.

So let me ask you this, again a question from someone on the team internally here. Is this different, the way that you’re expressing vulnerability, different because . . . Is it different for you because you’re speaking to women as a woman, speaking to another woman in a female community? Does that vulnerability create more bonding than it would for me as a guy speaking to a broader community or someone else speaking only to men?

Stephanie: I believe so. Yeah, I do. You know, we’re built different. Women and men were built differently. It’s awesome. It’s great. I don’t think that makes us better business owners or worse business owners, but we are more collaborative, more relationship-based.

Andrew: I see.

Stephanie: We like to do things together, and when I started Chic CEO I had those moments of “Who the hell do I think I am doing something like this, telling people how to start a business?” And I’ve never claimed to be a business expert by any means. I will find you the answer. That’s what I claim to do. I will research something until I find out what needs to be done in order to get you to success. So that was my value. That was what I’m bringing to my community and I sometimes have to call my friends in the beginning stages and remind me why I was doing this, remind me why I was valuable.

So in learning from another woman that is just as scared about starting up, feeling like a fraud, about the fraud police, and feeling like we don’t know what we’re doing. So we’ve all been there. We all have to go through it, and there’s a way out of it, and if we don’t be honest about these struggles and these challenges where we’re doing ourselves a disservice. And I think I’m doing my community a disservice by pretending that that didn’t happen. You know, we don’t talk about the struggles very often, the challenges that we go through emotionally in entrepreneurship and I don’t want anybody in that community to feel like just because they’re scared or they don’t feel like they know what they’re doing or they’re not sure of the next step that they don’t have value to bring to the world. Because they do. So . . .

Andrew: I see.

Stephanie: . . . you know, in being honest with everyone . . .

Andrew: If you were talking about a broader community that the person listening to us is trying to create, maybe the “me, too” is not a point of vulnerability. But we should still, it sounds like you’re saying, look for places and statements and experiences to share that will make people say, “Yeah, me, too, I am like that guy.” Yes, me, too, I want what he is expressing.” “Yes, me, too, I struggled like him.”

Stephanie: Yeah, yeah.

Andrew: Okay.

Stephanie: Definitely. So it doesn’t have to be about being vulnerable. That works but it’s finding the connection, being able to say, “Me, too,” is hugely powerful with your target market.

Andrew: And I still have this up on my right screen here. I wonder if the same thing works there, that if people will look at that and say, “Yes, you know what? Me, too, I also didn’t like the way that my milk box looked on the table. And yes, me, too, I also needed something other than a glass pitcher for milk because I also need to know when the milk goes bad. Yes, me, too.”

Stephanie: Mm-hmm, or, “Yes, me, too. I can be an inventor.”

Andrew: I see.

Stephanie: “Yes, me, too. I can win something with GE,” you know. “Yes, me, too, I can put out an idea just like anybody else.” So it’s a really great way to create a connection.

Andrew: Okay, all right. Let’s go on to the final point here, which is to use the Five Whys Technique. You did it. Let me bring up one example of how you did it. And obviously, we don’t expect people to read every word on here.

Stephanie: [laughs]

Andrew: But maybe you could describe what you’re doing here with this whiteboard.

Stephanie: Sure, so our Chic Siren Program was our very first membership program, and not like I said before. It was just templates and downloads and it really morphed into what we’re doing now with the Chic Elite Program.

Andrew: Mm-hmm.

Stephanie: And it came out of people getting too much information, having everything at their fingertips and not having the time to sort through it. It was way too overwhelming. And we kept getting the same questions asked over and over again but we’d already answered them within the program. So instead of shouting at our customers and saying, “Why don’t you just read what we’ve already done for you?” I tried to figure out why that wasn’t happening. So we went through the Five Whys.

“Why are you asking us questions that we’ve already answered?” “Well, because it’s too overwhelming.” “Why?” “Because all the information’s there at once and we don’t want to dig through it?” “So why don’t they want to dig through it?” “Well, it’s going to save them time if they just reach out and ask.” So we went through this . . .

Andrew: Mm-hmm.

Stephanie: . . . asking why five times, and what came out of it was building them a program that wasn’t overwhelming that we could dig into one topic a month and they could really deep-dive into that rather than go horizontal. So it was more about going vertical in a topic rather than giving them the broad sense of everything that we had to offer.

And it’s been a way more successful program and it’s been way more valuable to our community. So I think if you’re having a struggle or really trying to understand something about your target market, I think asking five times why you’ll get to the deeper issue and hopefully come out with something that’s more valuable to them. It’s been very helpful for us.

Andrew: You know what? I really like this example. Let me read through it just to let it sink in. Here’s how you used it. The problem was your members weren’t using one of the programs you created for them so the first question you asked was, “Why are users asking us questions we’ve already answered and that are already available in their membership?” And the answer was,

“Well, because they don’t read the information we provided.” “Why don’t they read the information we provided?” “Because they’re too overwhelmed by the amount of information in the program.” “Why?” “Because they are way too busy to sort through info and don’t know where to start.” “Why?” “Because they’re too busy and would rather reach out to us and just save themselves some time by emailing us or contacting us.” “Why?” “Because they want to implement tactics quickly that make an impact.” Got it. And so you created this program that was easier and faster for them to get access.

Stephanie: Right.

Andrew: Access to. Is Erin a PMS, one of your members, or what’s your connection to her, PMS.com?

Stephanie: Yeah, so Erin at PMS.com. She’s awesome. She’s a friend of mine. She’s up in Orange County.

Andrew: Mm-hmm.

Stephanie: And we got connected through . . .

Andrew: This is her saying?

Stephanie: Yeah. We got connected through a mutual friend and she was telling me about this company. So she had a friend that owned PMS.com. He had a project management system company.

Andrew: Mm-hmm.

Stephanie: There’s Erin right there. And she told her friend, she said, “You can’t have PMS.com for a project management company so he ended up selling her the domain name. Now she has a… this is tampon delivery service. Like a dollar shape club for tampons.

Andrew: There it is.

Stephanie: Brilliant idea. She really went through the why.

Andrew: How?

Stephanie: She started noticing that her customers were dropping off in month four. Within these packages, you were getting tampons, you were getting aspirin, and you were getting towelettes. She started noticing this trend, and again, don’t assume you know exactly what they want. She smiled and dialed every single person that canceled their subscription to find out why. What came out of it was they were just stockpiling the aspirin and the towelettes, and they just needed the tampon so all they wanted was an add- on.

It was such a small, small change, but allows them to remain her customers. Whereas in the subscription model, you have to go out nine to twelve months in order to see a return, really, in that month four. That’s really scary if they drop out. She really went through. Started asking why, why, why, why why, and came up with this one tiny solution that really changed her business. I really love that she went through that because it really made a difference.

Andrew: Whereas if she would do what someone else might do which is to call customers and say, why did you cancel? The answer to the first question might be, I really have too much or I don’t need it anymore. Until you dig in you don’t understand they have too much of the towelettes and the aspirin. They don’t have too much of the whole package. We just need to reconfigure. I see. What a great example and what a great website, too.

Stephanie: Yeah.

Andrew: All right. If people want to follow up with you the best place for them to go, I’m assuming, is Chic CEO, but when they’re on here is there something that you suggest they take a look at first?

Stephanie: We have a 3-Day Chic’s Start, which is really fun. It’s three day of homework writing to your inbox.

Andrew: Wait. You’re telling me that the first thing you want the to-do is do some work. [laughter]

Stephanie: They’re there to work.

Andrew: All right. All right. Where do we click on the site in order to get this?

Stephanie: It’s right up in the top Nav,3-day Chic Start.

Andrew: Right at the very top, next to home. This is where you want people to get started.

Stephanie: Yeah. It’s a great program. We give you a business plan template. Naming your company. Things like that. Really fun things to get started. That’s a great way to get introduced to Chic CEO, to the offerings that we have. If you want a little bit more, if you really want to deep- dive our Chic Elite program is awesome. It’s $49 a month, and we really dig in deep. Our topic is elite scraping training, which we go through how we went from zero to fifty thousand subscribers with a zero marketing budget. The next one is how to build your list and how throw events. It’s a really fun program.

If you want a little bit more the Chic Elite program is great. Otherwise, everything else on the site is free for anybody to use, really easy to get started, and we’re here to support any entrepreneur that really wants to start following their business dream.

Andrew: All right. Thank you for doing this. Thank you all for being a part. If you got any value, find a way to say thank you directly to Stephanie. Frankly, if all of it wasn’t…if it’s all overwhelming to use it all, do what I found top entrepreneurs do. They use what they can and leave the rest behind. Your goal isn’t to try to use every single thing that you’ve heard in this program and every other [??]program and every other thing that you read online, it’s to say, you know what, I’ve been exposed to a bunch of ideas here, here’s the summary of them, what’s one thing that I can use and implement right now?

Forget about the things that I can’t. What’s the one thing I can implement and use right away? I’ll start with that then I will continue and continue and continue. When you do that, let me and or Stephanie know because we’re rooting for you. We’re hoping you do really well and we’re appreciative that you’ve been a part of this program. Thank you all for being a part of it. Check out Stephanie’s website Chicceo.com. Bye everyone.

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Master Class:
How to turn ideas into profitable products
(And avoid painful mistakes)
Taught by Tamara Monosoff of Mom Inventors

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Master Class: Ideas into Profitable Products


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Transcript

Andrew: This session is about how to turn ideas into profitable products. It’s led by Tamara Monosoff, she is the creator of TP Saver which keeps kids from unspooling toilet paper and making a mess. She’s also the founder of Mom Invented which provides mentoring and training for product entrepreneurs. She is also the author of this book, The Mom Inventors Handbook, there it is right there up on the screen. And if you like you can connect with her on her site which is tamaromonosoff.com where she does business mentoring. So good to have you on here, thanks.Tamara: Thanks so much for having me.Andrew: We talked before you started about how you made mistakes in the past. Spent money on … well you tell me, where did you spend money that was so painful?Tamara: Well, when I first started out I had no road map to follow. There weren’t any books that walked me through the steps. I was searching everywhere. And I started with yellow pages and I was searching for a prototype developer. And I ended up finding a machine shop, and putting a website together was not easy at that time. We have so many wonderful tools available today that didn’t exist either.

Andrew: What did you spend on a site?

Tamara: I spent $25,000 and I didn’t just have $25,000 in the bank, I mean I was scrapping it together. And not only that I mean, I was in payment plans that was really tough. And that was for a simple five page website if you can believe that, and my logo of design and I mean that was it.

Andrew: What about patents?

Tamara: What’s that?

Andrew: What about patents?

Tamara: Patents again, about $5,000 for the first patent. And I talk a lot about patents today because I think that they’re a useful tools potential, but they may not be necessary at all. So know you can dive into that when you want to.

Andrew: Absolutely, and especially important when we’re talking about physical products. After doing it all right, what were you able to create? In fact here, let me show it on the screen, as you could describe this. How did you do this in comparison?

Tamara: So in comparison, that’s called Puzzle Bites and there’s a whole long line of sandwich cutters, called Good Bites Crustless Sandwich Cutters. And how I did that differently was I was able to … I knew the ropes now in manufacturing and I also was able to just reach out to retail stores and catalogs. And catalogs are those hidden jewels that cannot be over looked, because one email resulted in a $100,000 order, incredible. And then also reaching out to the large retail stores I was able to get orders of $25,000 a week.

You can imagine it was both a fabulous thing and a scary thing too. Because suddenly production cost went up as I was having to stay ahead of the game. So you know it’s a really good problem to have, but it’s also something to think about in terms of growth.

Andrew: All right, let’s talk a little bit about how to do this. I pulled out and my team has pulled some ideas from the book. And the first one is to start out by writing a sales goal and there’s a specific way that you’d like us to do it. Write a goal and do something else … here let me bring it up on the screen. Why should we start with the sales goal?

Tamara: Because otherwise everything’s up in the air and also many times people have unrealistic goals. I can’t tell you how many times entrepreneurs have come to me and said, ”I want to sell a million units by Christmas.” And they haven’t’ even hit the market yet, it’s only four months out.

So I really like to set goals that are attainable and realistic, not only so you can see how far you’ve come, but so that you can have these little moments of achievement to keep your energy up and continue going forward. So five units, I’m going to sell five units online. I’m going to call five retail stores and I’m going to get my products into the retail stores, locally first. And then test it out there before I go after the national stores and the catalogs.

So it’s really important and also to put dates on there. So what’s the activity you’re going to do? And what’s the date to accomplish it? And then that why you’re going to see results much more affectively.

Andrew: So we like to think big as entrepreneurs. You’re suggesting we start off with more attainable goals first, and also write a list of activities we’re going to take to get to those goals and put dates next to them. So it’s not sell a million, but you’re talking about sell a handful of units, five units.

Tamara: That’s right and also don’t be hard on yourself if don’t achieve your goal it’s okay, just reframe it, reset your goal and go for it again. I like things as entrepreneurs we are often hard on ourselves and that doesn’t achieve anything so just redefine your goal and then go for it again.

Andrew: Okay, all right, let’s go onto the next idea that we’re going to be talking about which is to figure out if your product is niche or mass market. I talked earlier about the product that you created. It solves this problem that we’re looking up on the screen, the TP Saver. Let’s zoom it in. There we go.

There is the problem. A kid is unspooling a roll of toilet paper. So how do you know? Is this niche or is it mass market?

Tamara: Well, like most entrepreneurs, I started out with visions of selling in the mass market. I didn’t understand that not everybody experiences this problem and if people do experience the problem, is it worth it to them to pay for a product to prevent it? So you can see that I had this big vision and then as it turns out, it’s a very niche item. Now, you can still be successful with niche items, but you need to identify what that niche is. Where is that market? And then you can hone in on that market rather than thinking broadly and wasting tons of time going after markets that really make no sense for your product.

Andrew: Okay, so we figure out, all right, this obviously is meant for parents. Actually how did you know it’s meant for parents with kids as opposed to maybe families with cats or as opposed to someone who’s . . . How do you know who just has toilet paper that happens to unspool because of the way it’s laying on the roll?

Tamara: That’s actually a great question. I learned from reaching out and talking with people that cats do it all the time. So we did create a pet version.

Andrew: Okay.

Tamara: And then also I learned interesting things like RVs when they travel across the country the toilet paper unspools.

Andrew: Ah, yes!

Andrew: So it was like, oh, my gosh! You’ll find that once you start getting yourself out there that things will come up and markets will come up that you never first even realized.

Andrew: So what I found is for me, I like to think about who is the smallest group of people that I can really focus on and I’m just going to make it really good for them, and only concentrate on them, and forget everyone else. But when I talk about that other entrepreneurs or other people frankly on the Mixergy team will say, “Broaden it out, but it could also be used for this and it could also be used for that.” It could also be used for, in your case, RVs and cats. What about dogs? What about annoying neighbors? What about in schools where kids like to screw around? So should we allow ourselves to go broader or are you recommending narrowing down at first?

Tamara: It all comes to one word and that’s focus. And we as entrepreneurs have so many great ideas and often times want to go after them, and I am at fault for that too because I get excited about new possibilities.

Andrew: Yeah.

Tamara: But what I’ve learned over this last decade is that it pays off to focus. So to bring it in even though you have all these other fantastic distractions and opportunities really, to focus in on your core market first. And then as you start to sell successfully think, okay, which is the next one that makes sense not trying to reach everything at once.

Andrew: What’s an advantage that you are able to get by focusing on families with this issue as opposed to going broader from the start and saying it will also work with RVs and pets, and so on. Do you have a specific example of a benefit that you got by focusing on this problem?

Tamara: Well, it was new to the market. There was nothing else like it at the time and so that’s why it made sense. And plus, think about the packaging and the cost of packaging. I would have had to repackage it for the RVs. I did eventually branch out to the pet market, but that was after focusing here on the baby market because at that time those were the trade shows. You have to pick and choose. It costs money to attend trade shows. It costs money to create packaging for your product. So you have to pick and choose which market makes the most sense first.

Andrew: Okay.

Tamara: And then you can branch out later. But really that’s why I focused on the kid market first.

Andrew: All right, I was going to go onto the next idea which is actually something that we . . . I don’t think anyone else has talked about on Mixergy and it’s important for us to talk about, but first what about patents? Now you have this idea. You know who you’re targeting it towards, are you saying that we shouldn’t bother with patents when we have a product like this?

Tamara: I think you should always get information such as speak to attorney about what’s possible, okay, and to have that knowledge and information. It’s important to know what aspects of your product are patentable, but what I have had happen year after year is my patents once I’m successful with a product on the market other companies want part of that market share and they figured out how to design around the patent anyway.

Andrew: I see.

Tamara: So as a struggling entrepreneur or at the very beginning stages, do you want to spend that $5,000 on the patent or do you want to spend $5,000 on just being super aggressive at getting your product out there as hard and fast as possible and getting, you know, all this excitement and interest around your product. So again, I’m not saying don’t get a patent. It can be a useful tool if you got something about the product that is patent-able that could prevent others from creating a similar type product.

However, it’s not necessarily essential and people make the mistake of thinking that’s the first step. It is absolutely no the first step. The first is making sure that you have a market you know who they are and you’ve got make sure people want your product first before you spend a lot of money developing it and bringing it to market.

Andrew: Okay. And speaking of knowing if people want your product first, this is an idea that you suggest for figuring that out. Sell and consignment in local stores. Why consignment? Why local stores?

Tamara: This excites me actually because oftentimes the local stores are entrepreneurs themselves. They’ve got the small business owner right there and they are more likely, if you walk in and say, “Hi I live in the community and I have this product and I think it would be perfect for your store. Would you be willing to test it out?” And they’re like, “Oh, I’m not sure.” Would you be willing to test out twelve units or six units even and say, “If it sells successfully then will you be willing to reorder it from me?” This is such a great way to get your foot in the door.

Andrew: I see.

Tamara: And they have no risk. So they’re not having to pay you anything and so it’s really a win, win.

Andrew: And because it’s on consignment, no risk they only pay you after they sell and it’s local so you get to get some feedback from them and hopefully you get some hometown advantage because they get to see you in the store.

Tamara: Exactly.

Andrew: You give an example on your site of this woman who did that.

Tamara: Right. She did that and that was how, she was having trouble getting people. That’s a Snickey[SP] and it goes around your neck and it keeps you warm and she was having trouble getting stores to accept her product and that’s exactly what she did. She put it on consignment all over in her local town in different stores and that’s when it started to sell and she able to then, really launch her business.

Andrew: There it is. It’s kind of like a smaller scarf that you can easily take off not as bulky and that’s how she was able to get some feedback and early sales of her product by taking in to local consignment shops. Alright, you also talked about pitching. The WOW factor, let’s bring that up right there. And one example you talk about is this one. What is this? What are we looking at?

Tamara: So this is the, do you see the booster seat that that child is sitting at?

Andrew: Yeah.

Tamara: Kids cannot reach the kitchen table. Also, times when you go to restaurants there isn’t a booster seat available or they’re all covered in food and sticky. And so this way you can bring your own. And this she makes it with a material, it’s called love chicken, and you can wipe it off and it’s stylish and fun and the kids love it. And this is one of my menties[SP] from my power mentoring program and why this excites me is we were talking about that she was feeling stalled in her sales so we talked about what had she already achieved that was amazing.

Now it may be that you haven’t achieved anything yet because you haven’t had any sales yet, but these are the things to start thinking about. So she was saying, ‘Well I sold, in three hours, I sold 300 units.’ And said, “Wow, that’s great!” And it was on one of the websites that has the daily deal websites, we can talk more about that as well. And I said, “That is a WOW factor.” And then she said, “Well and Gwyneth Paltrow tweeted about my product.” I said, “What? That’s a WOW factor. Okay. This is what we need to put into the subject heading to entice buyers to click.”

Now before she sent it I said, “You need to have a product video so that when the buyer saw in the subject heading “Gwyneth Paltrow Raves About Love Chicken” and sold 300 units in three hours. Then you go in and there’s a video demonstrating your product. She got a buyer, she got a meeting immediately with a mass retail buyer and now she’s going to be going into this mass chain nationwide by this December.

Andrew: I see, wow, and so just because she saw a tweet which many of us would write-off and seems like she just was excited about it but didn’t see the significance of it, you found that as a WOW factor and featured and highlighted it in the headline.

Tamara: Right. And that’s what you need to do. You need to think about when you’re writing emails, a lot of time entrepreneurs explain way too much. The emails go on, and on, and on. You need to think about it from the buyers prospective. They need something fast, they’re looking for products, they want, they have to. They have to keep bringing things into store but they need to get the information in almost like sound bites. Quick, fast, what’s the wow factor? What’s the significance? How is this product going to sell in my store? And then the demonstration of the video makes all the difference. And by the way, let me just say, keep the video under two minutes.

Andrew: Under two minutes for the video. What about how you get to the buyers. Wasn’t your book, didn’t the forward come from a buyer at Sam’s Club?

Tamara: Yes.

Andrew: Director of showcase events, Sam’s Club. So you’re connected to them, but how does someone who’s watching us who says, “You know what? I don’t want these one offs of sales on my own website. I’d like to be sold by Sam’s Club and some of the major retailer.” How do they even connect with the buyers who they could then pitch the wow factor to, etc?

Tamara: What’s interesting, that forward was written by Julie Allen Martin and she is the head of the showcase events which is their local purchase program. What’s interesting in speaking with Julie is she says they are looking. They are hungry for products. They are thrilled to work with entrepreneurs. See most people don’t realize that. They think, “How am I going to get into that big store?”

Well one of the key ways is Sam’s Club, Whole Foods, Walmart, they have these local purchase programs and you just need to go onto their website and search local purchase program. In this case was Sam’s Club Showcase Events. And then see when you can participate in one of their programs. In one of their events.

Andrew: I see. Local purchase programs. I had a Mixergy fan who sold to Whole Foods. I couldn’t believe it because he was brand new. He told me about this too. That the local Whole Foods is encouraged to buy from local entrepreneurs. And because he knew it and pitched to them he was able to get into Whole Foods. Once you prove yourself there, you can expand and expand. So that’ it. And is it every company or many companies that have this? Or is it a small isolated group of companies like the ones that we’ve talked about right now?

Tamara: It seems to be the big stores are creating these programs because they need to keep pulling things in for their customers to keep them happy. I’ve heard the same stories over and over about Whole Foods. Also Walmart is interesting because they do give their regional managers the power to test things out locally. A lot of people don’t know that. And if it does sell successfully, then they’re the ones, the regional manager then takes it to the corporate office.

Andrew: I didn’t realize that.

Tamara: So it’s much better to have the regional manager take it than you trying to figure out how to get in.

Andrew: Right. Especially if you’re trying to talk directly to Bentonville [sp].

Tamara: That’s right.

Andrew: Alright. Onto the next big idea. You kind of talked about this earlier. Which is test different marketing tools, different sales channels. A lot of people have written this company off. Let me bring it up on my website. Where is it? There it is. But you still like it as a sales channel. Groupon.

Tamara: You have to test things out. I don’t know if Groupon is going to work for you or not. In fact, I was just looking into Groupon because I want to test that one out personally. But I’ve had other people have success on Groupon. I had an inventor who’s featured in this book actually. She has a product called the Kiddie Catch All. She just sold 750 units on kidSTEALS.com just last week.

Andrew: On what website?

Tamara: kidSTEALS.com

Andrew: Kidsdeals.com. Okay.

Tamara: It’s kid steals, with an s.

Andrew: Oh, okay.

Tamara: She sold 750 units within 72 hours. Think about that. If she was normally selling one at a time on here website. She was so excited she couldn’t contain herself. She emailed me immediately. She was like, “I can’t believe it.” So this is the daily deal websites are real. In fact, Amazon even has a new one and it’s called Woot. W-O-O-T. I just learned about that. Maybe you know more about that than I do. I just learned about Woot. We’ve got Gilt.com. What do we have?

Andrew: There are tons of them. You know what? I’ve heard of Woot, I’ve heard of Groupon, of course. I never heard of this site that you were just talking about a moment ago. KidSTEALS.com. I kind of thought that all these deal sites were done. You’re saying no and they’re not just not done, they’re sending a ton of traffic.

Tamara: They are. My products have sold extremely well on Zulily.com. Which is Z-U-L-I-L-Y.

Andrew: Z-U-L-I-L-Y dot com. Wow.

Tamara: Multiple times I’ve had my products on Zulily. So these are real and it’s worth looking into. Especially because of the volume in terms of sales. But also it goes beyond the sales. It’s marketing. Marketing costs. Think about their email list. I mean, if they’re getting you 750 sales, think about how many people they’re sending these messages out to and it’s repeatedly over the week they’re pounding their list with your product with a picture. So even if they don’t buy it right away, they’ve seen it. It’s an incredible marketing tool.

Andrew: And then they buy afterwards. I’m a big fan of AppSumo. AppSumo is geared toward start-ups. And I’ve seen many entrepreneur’s products on there do well and then they come back and they tell me, “You know what? People still came over to the website and bought directly from us instead of going through AppSumo. You’re talking about sales that come directly from these sites, but also residual sales afterwards from people who decided not to buy directly from the sites.

Tamara: That’s right.

Andrew: All right. I like that. That’s a direction a lot of people have forgotten about. What about this? How do you get to this? This is a huge channel. We’re talking about the major networks. We like to put them down as online interviewers and podcasters. But there’s still a lot of pull when you’re talking about a site like this.

Tamara: So you see George in that picture.

Andrew: George Stephanopoulos, yeah.

Tamara: George Stephanopoulos is holding one of my products. That product is called Tinkle Targets.

Andrew: Okay.

Tamara: You put it into the toilet and it helps teach boys how to aim.

Andrew: Oh, great.

Tamara: This is, by the way, if you’ve got something funny about your product, the news loves it because it makes for fun TV.

Andrew: Okay.

Tamara: This is the thing. You can connect with people, like this I went through Tory Johnson on Twitter. You can connect on LinkedIn. You’ll see in the sales chapter of The Mom Inventor’s Handbook that some of the inventors found, in fact one of them in particular hooked up with buyers on LinkedIn and got her products distributed in FAO Schwarz and in many stores nationwide. It was huge and it was by reaching out to buyers on LinkedIn.

And in that case in that photo that you just saw, that was by reaching out to Tory Johnson which you can do on Twitter. So the host of the TV shows, they’re there. They want stories. So definitely get onto Twitter and Facebook. I have found most success with Twitter because it’s fast and I find that it’s a really easy way to connect with…

Andrew: You know what? Let’s jump to that section here and we’ll come in and refill and cover the previous sections. You do recommend using social media to reach the big guys. We have an example of how you did it right here. Is it as simple as this? This is from October 6th. You’re just tweeting at someone from KTLA, right? The television station in LA.

Tamara: Yes.

Andrew: This is how you build connections? From a simple tweet like this?

Tamara: Yes. Yes. So that’s Gail Anderson and I’ve been on that show about five, six times with my products, with my books. I was giving her a heads up that my book was coming out. It is that simple. And you can find them by just searching on Twitter and they’re there. She’s tweeting on there all the time and it is a fantastic was to connect with people. You know, you used to feel like TV was so removed…

Andrew: Yeah.

Tamara: …and it’s not. And it’s easier than you think. Also getting into magazines. One of the things that you can do is you can use editorial calendars. This is something that’s often times overlooked. What you do is you go to a magazine’s website and you go to the advertising tab. If you can’t find it there, go to the corporate tab, then the advertising tab.

They have set it up for advertisers who are going to purchase ads for the magazine, but they have to give those people who want to put ads in the magazine an editorial calendar for the year ahead. You then look at the year ahead and there’s a theme in each month. Figure out which month makes sense for your product. Where will it fit in? Is it an organizing type product? That will fit into “With a Clean, Fresh Start in January.” So figure out where it is that yours fits in. Then often times the editor’s names are right there and you can reach out to them to pitch your products.

Andrew: I hadn’t thought of that. That’s great. By the way, is this your product right here? This is on Walmart’s website.

Tamara: Yes.

Andrew: The one that got on ABC News?

Tamara: Yes. That’s the one that George Stephanopoulos was holding. Yes.

Andrew: And I see it here on Amazon and a bunch of other websites. Wow. Alright. Let’s go on to the next point. The one that I skipped over a moment ago. Which is to get outside the box, think creatively, to get attention, you give this example. What is this? Let me zoom in again.

Tamara: Okay, this is, she’s one of my inventees [sp] from my power mentoring program and she has a business called Kass Covers. What she did, I just love this, talking about how to really focus and target the people that could really have an impact on your sales. So she wanted to direct her information about her product which in that case are called arms and send that to orthopedic surgeons. So she used this company called ThinkShapesmail.com. And if you see that red line around the arm, that’s actually where it’s cut. So an arm actually arrives in your mailbox. Not a postcard in a rectangle.

Andrew: Right.

Tamara: You cannot help but to look at this arm. Because you are like, “What is going on?” There’s an arm in my mail. She got an incredible response and she ended up getting put into hospital gift stores. She had an orthopedic surgeon who’s head surgeon at Stanford University end up coming on an endorsing her product. It was incredible. So it is worth it. Now I sent out postcards when I first started out. I didn’t get any response because, hello, I was sending it out to everyone. Lesson learned. Don’t do that. Think about what she just did. She focused in.

She said, “Okay, I want orthopedic surgeons to be talking about my products. Telling their patients and telling the kids, “Hey, would you like a cast cover because it’s going to take away some of the pain?” Right? They’ve just broken their limb and now they can put something fun on their arm. And it also creates a lot of conversation because kids can then say, “What do you have on your cast?” So there’s a lot that goes on and it’s absolutely a fantastic tool to use if you focus on the right target.

Andrew: By the way, you mentioned that she’s someone who you’ve mentored. Where do I find information about that on your site here. Is it mentoring classes here? Is it somewhere else?

Tamara: Yes. So if you see that pink Power Mentoring on my shoulder and it says click here for Power Mentoring…

Andrew: Right. This Power Mentoring over your shoulder. This is what we’re talking about.

Tamara: That’s right. And there’s a video there and then there’s all the testimonials. My students, you’ll see, they’re are incredible. What they said…

Andrew: And we join on the right side if we want to be a part of it.

Tamara: That’s right.

Andrew: Okay. Is this just for moms, for women? Or is it for everyone?

Tamara: That’s why I created Tomorrow [??].com because I wanted everyone, men, women, moms, anyone who has a product idea and they want to know what to do with that idea. And they want to generate income from it. I wanted to create this website that was full of mentoring and resources and tools to help people succeed faster.

Andrew: I see. As opposed to the other site which is meant just for moms, Mom Invented.

Tamara: Right. And they’re mostly stories, great inspirational stories and tidbits. But the other on is really about, okay, let’s buckle down, let’s take the classes, let’s get to work and get your product out there.

Andrew: Okay. We have two more points that I want to talk about. The first one, I want to ask you a little bit more about, you recommend using QR codes to link to video testimonials. Of course they are like this. I’m looking through your book right now and I can see, that zoomed in a little too much. But here, I go through your book, can I show it here? Does it show up there?

Tamara: It does.

Andrew: In the book you use the QR codes. You’re a big fan of QR codes. Maybe it’s because I’m on an iPhone, let’s fix the camera, there it goes. I don’t use QR codes much. I had to install a separate app that happens to have it in there. Have you found success? What have you found with that?

Tamara: I wanted to make this book interactive. I wanted the stories of the 50 entrepreneurs who are featured to not just be written words, but I wanted them to come to life. I wanted you to read something about them and then get your phone and scan their code and have that entrepreneur pop up onto this screen and say what challenges that they’ve had to overcome. The struggles.

What has surprised them the most about starting their business? And advice that they have for aspiring entrepreneurs. And some of them are really heartfelt stories. Some of them have really sound advice. I wanted this book to be truly interactive. And the response has been phenomenal. This book has hit number one in six business categories two weeks in a row.

Andrew: We’re talking about this book right here. There it is.

Tamara: Yes. And it’s partly because it comes to life and then it’s useful. The one you pointed out was my QR code. So every time you see my QR code then that’s me introducing what you’re going learn in that chapter.

Andrew: All right. Let me take a step away from QR codes for a moment and just notice that you’re good about getting testimonials. It’s video testimonials. How do you get video testimonials that are useful?

Tamara: You ask.

Andrew: Okay. I’ve asked and you know what happens? People start to rave and it’s very flattering, but it’s an empty rave. It’s just, “My life is so much better because of Mixergy.” It is fantastic. I love the site. I recommend it to everyone and it goes on for three or our minutes. Heartfelt, really sincere, but an audience in not going to be eager to listen to that because it’s not useful for them. How do you get testimonials in a way that are structured and useful?

Tamara: In terms of the videos and the book, I put four questions down. I said, “I want you to be honest, please.” And share because people really want to know what you struggled with.

Andrew: Okay.

Tamara: I said, “I want to know what surprised you the most about going into business?” And I asked them about giving advice. I was very specific about what I was looking for. I wasn’t looking for praise for myself. I wanted their story to come to life. In terms of the Power Mentoring Program, mostly those are hand written testimonials. I just say, “What did you get from being a part of this class?”

Andrew: So asking more directive questions as opposed to, “Look, speak from the heart. Say what you want. I don’t want to guide you.” You recommend being more specific. Asking questions that will lead to answers that are more useful.

Tamara: I do because I want who they are to come across. It’s not about me. It’s about them. So what did they get?

Andrew: What is the most useful question we can ask if we want to get a testimonial that is useful? Sorry to interrupt.

Tamara: What’s a question you could ask?

Andrew: Yeah. What’s the most useful question. If we were going to ask for a testimonial, what’s the most useful question we could ask to get a useful testimonial?

Tamara: Well, it depends. If it’s a product, like something you’re selling in a store. How have you used this? Or how has this changed the way you do things? Or how has this changed your life?

Andrew: I see.

Tamara: That would be a product. You know, has it made your life easier? You don’t want to say yes or no, but you want to say how has this changed your life? Because that’s a bigger open ended question. In terms of my classes, I say, “What has transpired for you? What has changed since when you first started this class until now?” And really I want to know. I really want to know. Not only for other people. I really want to hear what has this been for them. What’s their experience?

Andrew: Okay. Onto the final point that we’ve got up here, which is to practice your pitch. You did that when you were on the Today Show. How do you practice properly? To do it right.

Tamara: Yes. That was about four weeks ago when the book launched. That was an interesting experience because it was very short and I had a bunch of products that they wanted me to show and tell. I was there to talk about the book because I wanted people to know about the book.

Andrew: I see. They wanted to talk about the product, you wanted to make sure to talk about the book because it was just coming out. The new version of it.

Tamara: It was launching that week.

Andrew: Okay. And so how do you do that?

Tamara: Yes. It was hard. I worked hard. If you watch that video you’ll see, but luckily it came across okay. There is a fine dance because you want to be respectful of your host and at the same time you need to make sure that you’re getting your points across. Otherwise the TV segment is of no value for you. So I practice. I tell my students in the Power Mentoring classes I still practice.

So before I went to the Today Show, the evening before and the morning of, I looked and thought about the bullets. The things that I needed to get across. And I said them over and over again on my way to the green room. I practice. I say it out loud in the hotel room before I go. People are like, “Oh, you’re so natural on TV.” And I’m like, “No, I’m not. I practice.”

Andrew: Do you remember one of the bullet points that you made sure to include?

Tamara: What’s that?

Andrew: Do you remember one of the bullet points that you practiced?

Tamara: I practiced that there is an abundance of opportunities today with getting funding for your business. And then I listed. There’s crowd funding, micro lending, and I went on. That’s what I’m saying. You have to think, what are the four points. Funding was one of them because I know that that’s a pain point for a lot of entrepreneurs. I also talked about sales. That there are opportunities today in sales that didn’t exist before. Catalogs, Daily Deal websites, local purchase programs.

Andrew: Got you. So you don’t have to think of it on the spot. You knew your answers because you thought ahead. You know what? I found when I started doing interviews, we’re now over a thousand interviews on the site. When I started and I was in the dozens, I noticed that there were some people who were really good and some who were not so good. What separated them was the practice, the forethought. I would see people who especially good afterwards and they showed me the notes that they made in preparation. I was so frustrated that not everyone would it.

In fact, most people obviously wouldn’t. That I then hired a pre- interviewer. I actually started doing pre-interviews myself. Then I hired a pre-interviewer to make sure the people were trained. You’re saying that if there isn’t that pre-interview process, and often there isn’t, we have to do it ourselves. And the way to do it is by writing out the points that we want to make. And the other thing that you do that’s especially good is you transition from what they want to talk about to what you want to talk about and make it useful for them. How do you make that transition? That’s a challenge that I still see entrepreneurs on Mixergy have.

Tamara: Right. Well, you have to be respectful and quickly answer what they’re asking, but then just leap. And I’ll say things like, “I’m so glad you asked that because”, and then jump right into whatever it is that I want to talk about. And it just takes practice doing that. You see politicians doing that all the time where they answer the question then they switch to what they want to talk about. It’s really the same skill, but it’s really important because what I learned when I first started is I got on TV a lot when I first launched because there was nothing . . . The whole focus on mom entrepreneurship didn’t exist so that interested the media.

What I didn’t know when I started out is I used to just let the host lead everything and then I would leave and I would gain nothing from the segment. There are no . . . people were not going back to my website because I neglected to mention it because the host didn’t ask me and I didn’t want to be rude and say it.

Andrew: You know what? I have that challenge too. Because I do so many interviews, a lot of entrepreneurs online, a lot of websites want to interview me, I will sit there and do the interview for an hour because I want to help out and I want to learn how to present my ideas better, and at the end I’ll feel like I helped them. Yes, I did get better presenting my ideas, but there is no connection with the audience afterwards and I feel a little bit smarmy pushing an agenda, pushing a website.

I don’t want to do it in a way that doesn’t feel right. I want to do it well. And I think if I do it well the audience will benefit because they’ll get to connect with me if they like what I had to say in the interview. The host will be happy because they want me to do well. They don’t just want to use me, they want to help me back and I’ll do well. I just don’t know how to transition it from someone who asks me about, in my case, how I started a business to a site that I want to direct the person to so that I can connect with them, get their email address or somehow introduce them to my work. What is a good way to transition?

Tamara: It is really a difficult choice and I don’t always say my website. I was interviewed in New York on three television segments last week and I chose not to say my website because I felt like it wasn’t right.

Andrew: Okay.

Tamara: And so you just have to really . . . It’s a delicate dance. And when the host says, “Where can people find you?” That’s when you just jump in.

Andrew: That’s when you need to be prepared.

Tamara: And say your website. Okay? But I didn’t have that opportunity. I could have pushed it and said it, but I didn’t want to be s- . . .

Andrew: What about pushing towards the book?

Tamara: What’s that?

Andrew: So again, a book is a little bit easier to promote and they want you to talk about it. So if they’re asking you about a product and you want to talk about a book, what’s a bridge that you’ve used that works that we can maybe copy or learn from?

Tamara: Right, so that’s what happened on the Today Show. So what you do is you could talk about a product and then you say there are 50 entrepreneurs featured in this book who all have really interesting products and share what they have learned as they’ve brought their own . . .

Andrew: Got you, so you’re expanding from the one product that they’re talking about to many others. So it’s still relevant and now you’ve made it bigger and more relevant to your book.

Tamara: That’s right, so you’ve then gone to their focus. What happened on the Today Show is they focused on my original product, the TV Saver from ten years ago. I wanted to talk about the book.

Andrew: Yeah, I see it here.

Tamara: So they were talking about that and they were ask- . . . I didn’t want to show [??] demonstrated. I wanted to talk about the book because I’m so excited about the book. So I quickly demonstrated it. It was like a quick . . . I reduced my normal explanation into a sentence or two and then reverted straight back to the book, and about the entrepreneurs featured in the book.

Andrew: Okay, I was going to start playing it, but I think I’ll just leave it for people to watch afterwards. It is up on Today.com.

Tamara: You’ll see the delicate dancing I was doing.

Andrew: I just paused it. I’m going to watch it right afterwards on here and I hope everyone in the audience does too. If they want to follow-up with you, it seems like the best way to do it is to just go directly to your site. I’m going to go over to it right now. You can see I’ve been checking it out throughout the interview. It’s just . . . Well, actually we’re going to be linking over to it, but it’s TamaraMonosoff.com. We’ll link over to it so people can see it and what you’re suggesting they do is just click that image over your shoulder.

Tamara: That’s right and then that gives the list of the classes. Also free workshops where the rocket ship is, they launch next week. I’m really excited to be doing . . .

Andrew: Right, your bottom right.

Tamara: . . . these free weekly workshops where I’m going to be giving concrete tips and tools every week.

Andrew: All right, thank you so much for doing this. I really appreciate you coming on here and of course we’ll link to everything we’ve talked about on the page and the site is called . . . Wait, there it is. Mom entreprene-, the Mom Entrepreneur. Excuse me, the Mom Entrepreneurs . . . Wait! Why am I saying entrepreneurs because that’s what this is about and I keep thinking about that word instead of inventors. Sorry.

Tamara: Because we are entrepreneurs.

Andrew: The Mom Inventors Handbook and yes they are entrepreneurs. Thank you so much for doing this. Thank you all for being a part of it. Bye.

DOWNLOAD TRANSCRIPT

Master Class:
How to get traffic from content
(So you can generate free leads)
Taught by Neil Patel of KISSmetrics

Master Class: Traffic from Content


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Transcript

Andrew: This session is about how to use content to market your business; it’s led by Neil Patel. He is the co-founder of multiple companies including Crazy Egg, which creates stunning heat maps that help you increase your conversion, and KISSmetrics, which gives you web analytics and customer intelligence that you can understand. Neil blogs and teaches all aspects of growing online businesses including how to get traffic and conversions on quicksprout.com.I’ll be helping to facilitate. My name is Andrew Warner; I’m the founder of Mixergy where proven founders like my friend, Neil, teach.Neil, it’s good to have you here.Neil: Thank you for having me.

Andrew: Usually, I start off with a story from the guest, but I have to tell a quick story here, myself, of you. When I started Mixergy, you were so bothered by how much work I was putting into the site, and how I wasn’t getting traffic, and how I wasn’t doing the right things that you said, “Andrew, give me your user name and password and I’ll just do it for you.”

I couldn’t believe it. I’ve known you for a while, and I trusted you so, I couldn’t believe it but I gave you my username and password and the changes that you made are still on the site today. Which means two things: first of all, thank you for helping me get some traffic and number two, I am due for a refresh. One of the reasons why invited you here is so that I, along with the audience, can learn from you and improve and get even better.

So first, thank you and thanks for teaching.

Neil: No problem, any time.

Andrew: I always think of you as the guy who had it together since forever. That, why would you need content marketing and then I found this old photo. This screen shot. What is this site?

Neil: This site is Advantage Consulting Services. It’s my first real business. Also known as ACS. What we pretty much provided was internet marketing services like SEO, pay-per-click services, all that kind of stuff. I don’t even think social media marketing was popular at the time. The site was really ghetto, right? As you can see there, it even had music so when you’d go to the site, you would hear this grocery store music. I don’t know why we picked grocery store music but, nonetheless, that’s what was there.

We had that site, we tried to get it rankings on Google, and we were eventually able to figure out how to use [??] to get rankings. We never really got a ton of leads from that site. That business did fine, but it took us a while really to kick it off and start generating revenue.

Andrew: Okay. Today, as a result of what you are about to talk to us about, you’ve been able to help multiple companies to increase their traffic including, what’s this company here? Or what did you do for TechCrunch, I should say.

Neil: TechCrunch we ended up changing the on-page code and the on-page code ended up giving him a 30% lift in traffic in 60 days. They already had the links, they already had the social media shares, but what they didn’t have was clean code for the search engines.

Andrew: Okay. There are multiple things that you do to help companies; Search engine optimization, ad buying, actually, is ad buying one of the tools that you use? It is.

Neil: Ad buying, conversion optimization, the list goes on. Pretty much whatever it ends up taking that’s marketing related.

Andrew: My concern is that, if we talk about everything that will achieve nothing. We’ll all walk away feeling, “Boy this guy, Neil, is brilliant, but we’re so overwhelmed that we don’t even know where to get started.’

So we worked with you here, the Mixergy team did, to come up with a few tactics that we can focus on in this conversation. They’re all centered around creating content and using it to drive traffic and to market our businesses. Not necessarily buying ads, not necessarily doing high SEO. Just thinking about content in a smart way.

One of the first steps that you’ve told us to think about is, it’s right there up on the big board, it’s to figure out what our ideal customer wants to learn. Here’s one way that you did that. I always like specifics, let me see if I can bring this up on the screen here. It’s a pretty big screen shot. Do you recognize this?

Neil: This right here was my old click [??] traffic system. I was selling it for, I think, $97 bucks. One time or three payments of $67 or something like that. I was doing a 30-minute phone call and, actually, I sold so many of those I was on the phone forever. Never again will I start selling 30- minute phone calls.

Andrew: I remember you actually telling me that was one of the things that you did, and I thought, “Boy, Neil must be so hard up for money that he’s willing to trade his time for money.”

That’s not the direction successful entrepreneurs go in, right? You start out by trading your time for money and then you eventually create products that people buy that aren’t dependent on your time. I thought, maybe he’s running into some trouble.

What I didn’t understand was, the logic that went on behind the scenes that connects with this point that we’re talking about here, figuring out which the ideal customer wants to learn but in talking to them what did you find out about your customers.

Neil: So that was actually the main reason for the call, and when I set up the traffic system the call was actually included for free. You’ll be shocked. Not everyone took the call, and I don’t know why. I wasn’t trying to sell it. There was no upsell. I was just offering it for free. If someone is willing to pay for a product, I actually want to find out their problems and help them due to the fact that it would help me figure out what to offer next. I could have a better product. I could have better service maybe.

So what I ended up learning was my consumers or my readers had problems in three main areas, right? Number one was SEO. Number two was content marketing. Number three was social media marketing. And they broke down their specific problems. I ended up learning that most of my readers and people who bought stuff from me were actually not big corporations.

I assumed they were because I had a lot of corporate readers, but they were actually small mom and pop businesses that typically were the only person there in the company or they had no more three to five employees.

I also learned that a lot of customers were in Australia. I also learned that a lot of the customers or visitors who bought the system whether they were in Australia, Canada, or the U.S., the biggest problem they had was, “Hey, I’m a solo entrepreneur. I don’t have that much time to spend on marketing. What should I focus on most to get the biggest bang for the. . .

Andrew: Let’s see if the video will catch up with us. Sorry, so you were saying . . . The connection just broke off for a moment. You were saying they were saying, “What can I do to get the most bang for my buck?

Neil: That’s correct. So they were saying, “What can I do to get the most bang for the buck, right?

Andrew: Yep.

Neil: From a time perspective, what’s the last amount of work we can do on marketing, not because we don’t want to do marketing, but it’s because we’re already spending time running the business. We don’t have enough money to spend hiring people, so what can we do to give the most amount of sales with spending the least amount of time. And a lot of that ended up being content marketing because it produces the highest ROI for the long run, right? In the short run it’s a slow run, but in the long run it’s a very profitable marketing channel.

Andrew: I see. So what you’re advising us to do is bigger picture, figure out what my ideal customer wants, not necessarily use this specific tactic of having customers call us, right?

Neil: That’s correct.

Andrew: But if you are having customers call us . . . I like to steal your ideas, and so if I were to say, “All my customers should call me” how do I understand what they’re looking for and not just have a chat with them. I’m assuming if they me call up or they call our viewers today that the customer is going to have a real problem that needs to be solved maybe in the next half hour, and that seems like a high burden for an entrepreneur to get on the phone with every customer and to potentially solve their problems within a 30 or so minute phone call.

Neil: It is. And I don’t recommend it for most people what I end up doing because I really want to know my readers. That quick and simple way to do it is actually service through Qualaroo, right? You can actually ask questions within your site within your users, and you can figure out what issues they are running into, and you can help them solve it.

Andrew: Okay. So phone calls one way, Qualaroo a company that you co- founded also and since sold.

Neil: I’m sorry. I don’t own it any more though.

Andrew: You sold it?

Neil: I use Survey Monkey which is another good tool right now. You probably know about it. You have a big list. Just email them.

Andrew: Big list, you email them? What’s one other way to understand what your ideal customer wants to learn?

Neil: So another way is actually analytics. So if you work with Qualaroo which is free but qualitative and quantitative data. Qualitative is feedback like Survey Monkey and Qualaroo. Quantitative is the numbers in your Google Analytics. So if you notice that all of your people on your site . . .

Let’s say I’m selling services, social media SEO content marketing. If I’m making visitors go to the content marketing page and spend the most time on there, and that’s where most of my leads are coming for, right?

Whether they say they’re interested in content marketing or not, the quantitative data is showing that visitors are most interested in that subject.

Andrew: How about one other idea that the ideal customers want before we have enough users and customers to be able to survey them or to call them up? If we’re earlier stage, what’s one thing to do to figure out what our ideal customer wants to learn?

Neil: So we went through that within our startups. What we ended up doing was we just went out to Crunch Base[SP], Craigslist. We would actually try to talk to as many people as possible and never offer them anything for free because it’s a bit biased, but try to reach out to as many people and see if you can take ten, 15, 20 minutes of their time. Don’t do 30 minutes. Thirty minute chunks seem like very tangible [??] on a 30 minute call.

But if you actually ask someone for a five, ten minutes you can actually get a ton of calls and people will be giving you feedback on whatever you’re trying to create. They can tell you what they’re looking for, problems their trying to solve, and you can sit there as a [??]

Andrew: So phone calls to non-customers but to people who potentially will be our customers, that’s another way to do it. All right, on to the big board then.

The next big tactic that we are going to be talking about is using keywords that you’re already ranking for. We pulled up this screen shot. You gave it to us actually before we started, how are you doing it here? What’s going on in this screenshot, about how to become rich?

Neil: What we were finding out was, when you create content you’ll start ranking. So this article was originally titled, “Four Ways to Become Rich”. What we ended up finding out, when you’re looking at analytics, and I know people say google does not provide it. If you connect it with your web master tools account, and it’s really simple it can be run through your Google AdWords, there will be easy steps to doing it.

It’ll show you what keywords you’re ranking for or which ones are driving traffic. We go and we say, oh we’re ranking for “How to Become Rich” although the title of the post is “Four Ways to Become Rich”. So we adjust the title of the post to “How to Become Rich”. It popped up our rankings, and we started getting more traffic.

Andrew: Do you have a sense of how much more traffic you’d get from a change like that?

Neil: That change, in particular, I don’t have the numbers off the top of my head. I believe it was more than a thousand extra visitors a day, so you’re looking at about 30 plus thousand a month.

Andrew: Just for going back to that specific post.

Neil: That’s correct.

Andrew: You’re checking to see what keywords you’re ranking for, for the overall site. Then you find a blog post that relates to that, that you could make fit within the keywords that you are ranking for already.

Neil: What I’m doing is, I’m looking at my current content, I’m seeing which ones are most relevant to my [??] user base or ideal customers, seeing what they’re ranking for, and then I’m adjusting the titles to increase the rankings for those keywords.

Andrew: How often do you do that on your site?

Neil: Not as often anymore, but when I used to do it probably I would spend three hours a week doing it.

Andrew: Three hours a week, looking at the keywords and then adjusting the titles of past posts so that they speak in a language that people are searching.

Neil: That’s correct. That’s how we’ve got some of our B2B blogs from a few hundred thousand Google visitors a month to 4 or 5 hundred thousand Google visitors a month through that one tactic.

Andrew: Onto the big board for the next idea, which is to promote your content to the right audiences. Let’s bring up this example, then. What’s going on in there?

This is an infographic that you guys created about how to, by the way I say, ‘what’s going on there?’, and then I realize it’s slow for you and there’s some people who prefer to not watch and to listen and so, I think I should just give people a description of the image itself on the screen. What it says there is, “How do colors affect purchases”, and this is an infographic that you guys created. You emailed it out?

Neil: Yes. What we wound up learning from this is, infographics do very well. It has one of the highest forms of ROI with content marketing because it generates a lot more natural back links, a ton of traffic and if the topic of the info graphic is relevant to your core audience you can actually get conversions.

What we found out with KISSmetrics is, a lot of people were signing up or trying to [??] their conversion rates. We started talking about colors because colors actually affect emotions, purchases, right? They have different meanings, they can affect if you are going to click a button, if you’re going to buy or not buy. We started creating content that was relevant to our core product. That really did help us drive more traffic and back links and get covered in places like Forbes and Huffington Post, but it also helped us generate sales. The trick with this is, you have to create relevant info graphics that benefit your audience and is related to your product.

I see dentists out there that are creating info graphics on computer hardware and servers. That’s not related to anything in the dental industry. If you’re a dentist, create info graphics on, how to whiten your teeth at home, right? Or how to whiten your teeth without spending a dollar. Or how to whiten your teeth without even going to the dentist.

Then you can give more of these remedies. You’re going to create back links which is going to help you rank for more dental terms, which also then helps you generate more sales.

Andrew: I’m amazed at how well info graphics still do. Here it is on your site. Let me zoom in so people can see it a little bit better. 6+ thousand tweets, 8+ thousand likes on Facebook, 600+ Google Plus, and Buffer at about 300. That’s the kind of reaction that you get. How did you know what topics to go with so that it would both fit your audience and also be shareable?

Neil: The cool part about infographics is, you’re taking data and making it into visual form. Most people have blog posts that are data rich or there are blog posts. All you have to do is search industry blogs to read them. What you’ll find out is, there’s some that are really popular. The ones that are really popular take the blog post and turn it into infographics and site the blog post as your source.

That’s the simplest way to generate info graphics that are popular. Because you already know that the content version was popular, so if you take the date, make it visual, people are like, “Oh, it’s easier to understand. It’s pretty. Let me share it.”

Andrew: All right, cool. Onto the big board. The next big idea is to use popular content to write similar posts. You did that using a tool that you created, and we’re going talk more and more about it here in this session. What’s going on on this table from the quick-spout tool and how did you use that to write content that’s already popular?

Neil: Yeah, so what I would do is I would look at my content that I currently wrote on my blog, and I would see what gets the most Facebook shares, Twitter shares, Linked-in, Pinterest, Google+, et cetera. And that would tell me what my readers want to read more of, and what they want to read les of, right? Because the ones that don’t have too many shares and are at the very bottom of the list aren’t the popular ones. The topics that are at the top should be ones that are more focused on writing. I also did this by putting in competitor URLs and seeing what’s the most popular on their site.

And the same thing: it told me, because we have similar readers. It told me what my [composure] writing that my leaders love. So doing for my own site and for my competitor sites, it then ended up giving me a list of ideas and topics that they already wrote on that did extremely well, and then I created my own flavor it, right? So I know if Pinterest did well, I starting creating other similar posts relating towards Pinterest that cover different topics. So my most popular Pinterest one was, “The Marketers Guide to Pinterest”. I can also do one on “How Marketers Can Monetize their Pinterest Traffic” because it’s still relevant but yet it’s different.

Andrew: Is that one that you actually have done that was especially popular for you, or what’s a topic that you–

Neil: I [didn’t] do it with Pinterest, I did it with Twitter. So if you look at the Twitter one, I started putting a lot more [content], like how to get more likes, how to become a Twitter power user. So I noticed that people liked Twitter and how to grow their Twitter engagement and presence, so I started creating a ton more infographics and continuity around Twitter traffic and engagement.

Andrew: Gotcha. All right, so if you were to do the same thing for Mixer G. I think it’s going to be a little bit hard for me because there’s just so much data. But I plug Mixer G into the quick-sprout tool, and I see that an info-graphic on webcam settings was extremely popular across all social networks, what would you do based on that?

Neil: Yeah, so– it’s telling you that people enjoy also reading Mixer G to get tips on how to do video production, and interview because you’re really good at it. So you could also do an info-graphic on how to come up with the right interview question. Or how to interview, how to interview someone, right? Or how to interview your X, Y, Z. Whatever it may be. You can end up giving advice on questions to ask, what not to, et cetera. Or you can do an info-graphic or content piece on Video Etiquette 101: What Not to do During an Interview.

Andrew: I see. And so this explains why someone who also does an interview program decided that he was going to do a series on copywriters. Maybe he came into Quick Sprout and saw that– where is that? Guess that just popped down a moment ago, it was up there– the copywriting course did especially well across social media, and so maybe he saw: hey, Andrew’s doing well with copywriting, then I should be doing a series on copywriting, a series of interviews, if his copywriting interview did so well. That’s the kind of thing that you’re talking about us doing. It feels a little bit like I’m spying on my competitors. It feels almost inappropriate.

Neil: [laughs]. It’s like you’re the CIA. The NSA.

Andrew: Yes! But that’s the idea, let’s take a look again at this, and so, if you were a competitor Mixergy you might say: oh, Robert Green does especially well, I should see if I could do another interview with Robert Green, or some kind of blog post about him, or his book mastery. That’s what we’re talking about.

Neil: Yeah. Well, Reynolds also did really well, right. Dave something, I can’t read his name.

Andrew: Dave Kerpen writes likable. So here’s the thing though: it’s hard to tell why they’re doing especially well just by looking at this. My sense is that someone on Robert Green’s team liked the interview so much that they bought ads on Facebook and that’s why there was so many likes. My inside knowledge of this info-graphic was that it wasn’t just the info- graphic on its own that did well, it’s that we emailed people and we asked them to Tweet it out and as a result it did really well on Twitter as you can see here, and then all the other social networks came along for the ride with it. So, when you’re spying on a competitor, and I hope you don’t mind me saying that this tool helps us spy on competitors, how do you know what– how to use what you’re seeing there?

Neil: Yeah, you can’t just go based off the URLs and the numbers, you actually have to plug them in, go to the site, and actually see what they said, right? Because sometimes in the posts at the bottom they’ll say: ‘hey, can you please share this or tweet that out?’ And you can’t always tell if someone did an email blast, but you can see if they did anything unique. For example, if that one on Robert did extremely well from the Twitter perspective, you can try to go back to Robert’s Twitter profile and see if he promoted and has a lot of followers. If that’s the case, he may be worth interviewing again because he knows that he can drive quite a bit of traction any time he pushes something out.

Andrew: Gotcha. I can see that. All right. I should not be encouraging more people to copy what I’m doing by going to Quick Sprout, but I don’t care. Actually, frankly, if it helps, I’m happy that it helps people. Do you find that people then use this to basically spy on Quick Sprout to see what your big blog posts are and then write similar blog posts because if it works for Neil on social media it should work for me.

Neil: My results are cash so it’s not going to be an accurate representation of what it is in Quick Sprout. I’m showing you what I want to show you.

Andrew: Oh really? So you’re not actually making this available to others.

Neil: I am but not for the Quick Sprout URL.

Andrew: For QuickSprout.com.

Neil: It’s not going to work the way it should.

Andrew: I see. So you’re thinking it’s so powerful why let other people spy on me using it.

Neil: Yeah. I don’t want to jack my stuff, jack other people’s stuff.

Andrew: All right. Fair enough. Is there another way? I don’t want this to come across as a Quick Sprout commercial. Is there another tool out there or other ways to see what’s popular on other sites?

Neil: Yes, there actually are. I like using Open Site Explore because Open Site Explore gives me back links similar to [??]. So it can actually show you if you put in a competitor URL it’s linking to specific pages. And if you’re noticing a lot of people linked to a specific page, that can tell you what to do. SEM Rush and Spy Foo is a good cued data from the standpoint of just a paid organic perspective because people are getting a lot of traffic for a specific word that you can Google it. You can see what the content was, what the article was specifically about, how many social shares it got, et cetera. Those are some tools that are worth checking out as well.

Andrew: So we’re looking at SiteExplorer.org, SEMRush.com for ad buys and SpyFoo.com.

Neil: Yep.

Andrew: Cool. All right. On to the big board yet again. Partner with popular blogs. Where is that example that I thought we can talk about here? There it is. You found this out, and then you started to do stuff with Moz. What happened?

Neil: Yeah. So what ended up happening was I ended up finding out by looking at Moz that they created this guide called “The Beginners Guide to SEO” and it’s an amazing guide. They actually came over the clouds to do these awesome [??] 20,000. 30,000 work content pieces that teach you a topic from A to Z. They just didn’t create a lot of them. They just created one.

So I was like, “You know what? Why don’t I create some of these?” I just started cranking them out one a month during my peak. And so I think I did one a month. And I started getting a ton of traction. I made sure I didn’t jack other people. So if Moz did SEO I did advanced SEO. And I leaned to them. I talked about how their guide’s great. This is covering advanced. If you want to learn about beginner’s stuff read theirs, and they shared it throughout their email list. I think the email list is over 100,000 people, right? That drove a ton of traffic.

So we’re playing nice with competitors although they’re in the same space, but we don’t sell products against them. It helped drive quite a bit of traffic, and we still keep doing that, the same tactic we create guides. We go out there. We see who’s in our space. We mention people within the guides that we think are relevant and can benefit the readers.

And we’ll find out, “Hey, if I mention Mixergy in the guide and talk about Mixergy’s strategy in content marketing and how it’s great.” I would ask you, “Hey, Andrew, if you really like it I already [??]. Feel free to blast it out to your list or tweet it and share it. And that’s helped us generate quite a bit of traffic.

Andrew: Your writers at KISSmetrics do actually mention Mixergy quite a bit which I like. Can I tweet it out? They never ask me to tweet it out. I just get an alert, and I tweet it out.

Neil: On that side we don’t ask because we already have enough on our own. I don’t actually ask anyone for Quick Sprout either. Then you start getting into a certain number like a half a million plus visitors a month which doesn’t matter, right? You’re going to get traffic no matter what. Then at that point we don’t like bugging people.

Andrew: I see.

Neil: When you’re got 20,000 visitors a month every ask really helps.

Andrew: So you intentionally will mention people in your guides, and then you go back to them and you say, “Where you’re in here. If you’d like to share this with your users, go for it.”

Neil: Exactly.

Andrew: I can’t believe that Moz would email out to their audience for free.

Neil: Yeah.

Andrew: That’s huge. It’s hugely popular.

Neil: Yeah. Very popular. We’re one of the most popular sites in the Internet.

Andrew: So one of the things that we found out was through talking to you before this session. Let me see results are 361,494 people read the second guide that you created and 212,000 people read the first guide that you created. Those are huge numbers.

Neil: Yeah.

Andrew: So, I don’t want to, I know that the bigger message here is to partner with bigger sites. So the big idea is that you contacted them, that you wrote about them, that you didn’t copy them but added to what they were doing. If they were doing the beginner guide, you wrote the advanced guide. I understand that’s the big message here, but if we were to zoom in on this one specific tactic, and look at the guides that you create. What does it cost you and how do you create a guide like this?

Neil: Yeah, so the guides, the costs have changed over the years. Right? So when I first started doing it, the guides would cost me around 40, 50 grand max. And now the guides are costing around me around 20 to 30 grand. Right?

Andrew: Twenty to thirty grand?

Neil: Yeah, up to 30 grand. Sometimes I can get it done for like, 15 grand, if it’s a small guide. But that’s roughly what I’m paying, cause I need help on the writing. I can’t write the guides all by myself. And as you can see from each guide, there’s also a co-author right there.

Andrew: Yeah I can see here.

Neil: The design is very expensive as well. I could spend 10 grand just on the design. Then [curding] it, is expensive as well. Right? And paying someone to make it HTML and CSS compatible with [??] because it’s almost like one huge infographic. Then on top of that, I have to make it pdf compatible, and then make sure the pdf’s, are on iPhone, Kindle, Android acceptable compatible as well.

Andrew: So this is a huge expense. And I could see on this one, the advance guide, it’s also written by you and [Su Jong Patel]?

Neil: Uh-huh.

Andrew: Is that a relative of yours?

Neil: Yeah. [laughs]

Andrew: It is? So, you and Su Jong Patel wrote this thing and it cost a lot of money to produce. I can see you’re making the money back with this Hello Bar add and the very top of the page. Right?

Neil: Yes.

Andrew: So that, that’s how you know that it was worth your while to do it. For someone who is just starting out, who is not ready to invest that much how do they have a simpler guide? How do they do it on a budget?

Neil: Well, you don’t have to spend that much money to write. You can write the guide yourself. You can have your in-house designer do it. Or you can go to [Gerbal] or 99 Designs, they are the cheaper designers. It still looks good. I just pay for people that I know will produce really good work and I don’t spend the time trying to find cheap labor like I used to. But, I’ve seen other people get whole guides like this done for $2000.

Andrew: Well, yeah, all your guides do look really beautiful and the design, looks a lot like the design on Quick Spout, on the site itself. All right, cool, that’s really helpful. Let’s go to the Big Board where the next idea we’re going to be talking about is, using free tools to create more traffic than content would. Right. So even though we’re talking about content marketing, you’re thinking of tools as content; and actually more powerful than traditional content.

Yep. And now, actually, if I go over to quickspout.com without the about, let’s go to the . . . to my web browser. It used to be that if I want to Quick Sprout, I saw your blog, today I see this. This is your tool?

Neil: Yes. That’s my tool. What I found out is, tools get people coming back more often, increase usage, increased [??] loyalty, a lot more traffic, much higher ROI from the tool than actually generating contact.

Andrew: This tool allows people to, actually, how would you describe what the tool does?

Neil: It helps you spy on you competitors and it helps you analyze your site and figure out if there’s anything that you’re doing wrong from the on page [SCL] perspective.

Andrew: I remember when you first created this course that today does so well, this product that you’re selling through the Hello Bar at the top. Now it does so well, you can afford to spend 10’s of thousands of dollars on a guide because you know that it’s going to sell and bring back that money with a little bit of profit and more users will become fans of your work, and so on.

But I remember when you started out. It was much simpler than that. It was a pdf. guide and phones calls and, you know, a lot of attention, but not that involved. The reason I’m asking is I’m wondering was this tool simpler than it is today because today it’s a pretty intense product.

Neil: Yeah, so the tool started getting expanded on. At first it was just a one page report. Then we started adding competitor analysis, social media tab, like we discussed earlier so it’s used spy on your competitor and figure out which content he’s doing really well. When we first started out it was just the web page report. It was our version of a minimal, viable product, it got usage. And then we realized, oh cool, we should add more to it and get more usage.

Andrew: So if we’re going to create a tool, is there a way for us to figure out what kind of tool would work?

Neil: Yeah, you just ask your readers. We actually used [Quali-Reader’s Survey] to survey our readers, to figure out what tool to create. Everyone said, ‘we’d love a free SCL tool that helps us understand what we’re doing wrong or right with our site.

Andrew: So you explicitly say, ‘what tool should I create?’

Neil: Yeah. I actually ask. Like, ‘If I create a free tool, what would you like it to be? Right? So, I first ask the question of, ‘would you like me to create a free marketing tool for you?’ I will get a yes or no. Yes. What kind of tool would you like me to create? And then they’ll tell me and then I’ll go and create it.

Andrew: And how much would the first version cost you?

Neil: I don’t know the exact amount off the top of my head, but my guess is 50,000.

Andrew: Oh, 50,000.

Neil: Maybe somewhere around that. I think 50. I’ve spent more than a hundred on the tool so far. Somewhere around that range is my guess.

Andrew: If we were going to start smaller then?

Neil: You could start smaller. I just pay expensive people for the tools.

Andrew: I remember the days when you used to get free interns. Where it was just, I found a guy who knows a guy who’s really good; he’s doing this for me. Today you’re spending top dollar.

Neil: Yeah, because I just went to Digital Telepathy and said, hey Chuck, design this for me.

Andrew: Chuck?

Neil: Yeah, form Digital Telepathy.

Andrew: Yeah, Chuck Longlevecker. Oh, yeah, you’re going really top notch.

Neil: Yeah.

Andrew: Okay. So if we were going to start smaller, how do we have the simple tool created that’s not going to cost us a lot of money but will start to do some of the things that the Quick Sprout tool does for you?

Neil: You can find developers on Elance. There are some decent developers on there. Of course they’re not going to be the best developers that cost three hundred grand, but you’re going to get someone chat can actually create a product that works. For design you can go to Dribbler Nine-Nine Designs and find somebody that can wire something up, and you can actually create a tool for five, ten grand max. Or what you can also do, that I’ve tried doing, is there’s already tools in almost every space.

So in the marketing space there’s a company called the Widexle or Windexle, something like that, and they have a free SEO analyzer and for $99 you can buy this script and put it on your site and act like you’re your own SEO tools. That’s great because if you actually get usage then you know that, hey, maybe I should spend money creating a really good tool after that.

Andrew: What was that tool, Windexle?

Neil: It was Windexle or Windaxle something like that. It’s a site that offers marketing tools for free. You can put on your own site and act like it’s your own tool. It’s like a Windexle analyzer.

Andrew: I think I just saw it. All right, so I’ll find it.

Neil: Windexle or Windaxle. I don’t know exactly how it’s spelled. I used to do that years ago. And I did it with Advanced Consulting Services. I used that tool on their site. That tool actually does generate traffic and it was 99 bucks or something.

Andrew: I don’t remember the evolution of the tool on Quick Sprout, this one.

Neil: It just came from one report. There’s the web site analyzer, then add the social media report add the competitor analysis.

Andrew: But today it’s on the home page, it’s replacing what used to be Quick Sprout, essentially. People of course could find it underneath the blog section, but where was it at first before you know it was so powerful it’s worth replacing the homepage with it?

Neil: I just put it on the home page right when I release it. I did an AB test.

Andrew: Ah, I see. And then what are you looking for to figure out if it’s worth keeping there?

Neil: Worst case I was just going to go back to the blog being the home page if it did not work.

Andrew: So what numbers are you looking for to figure out if your tool works?

Neil: I was looking at unique URLs entered and there was more than a thousand a day and I was like, oh cool. So if more than a thousand people are using it a day then it’s doing well.

Andrew: Oh, cool. Stu McLaren, who created Wish list Members, said that he finds the same thing in the content sites that he works with. That if, instead of paying for another report, the entrepreneur would pay for a WordPress plugin. It would maybe cost a little bit more, but it would add more credibility. It would be used more, valued more. And actually on his membership site the giveaway is not just content, but once a month he gives away a free WordPress tool.

Neil: Cool.

Andrew: Interesting, I didn’t realize the power of it. All right, let’s go on to the next one. Put content into a visual format to make it easy for people to understand, you talked to us a moment ago about how you do that. Tell me a little bit more about what kind of content we should be looking for and how it’s worked for you.

Neil: Sure. The thing with content and everything that’s visual, we’ve especially done this with Info Graphics, is that we found that not everyone is a text or numbers based learner and showing things in a visual format makes it much easier to understand for anyone, especially newbies, which are typically the largest audience of any segment, right? You end up getting way more traffic. So we started putting everything that was text based and data based into visual format through InfoGraphics and we started seeing a lot more traffic. There’s a whole post I did on Quick Sprout one time called, like, why content marketing is the new SEO and it broke down the ROI file of InfoGraphics.

Andrew: Here it is: Why Content Marketing is the new SEO. Where is that? You said that this also was turned into graphics?

Neil: No, this one wasn’t. It was breaking down the kiss metrics on our Infographic costs of ROI on it.

Andrew: Got ya.

Neil: And ROI on it.

Andrew: All right. Let’s make sure to include that. I’ll grab the URL and we’ll include it on the page with this video so people can go and read that article fully. You know what actually? What’s a simple way to create an Info-Graphic? I hate that I keep asking you what’s the budget option. I think, though, that if we’re talking about the high end, anyone knows they could go to Chuck over at DT, Digital Telepathy, and they’re going to create great stuff. The challenge is if you’re just experimenting with this. If you say, “I saw Neil Patel on Mixergy. He had this idea. I want to try it. I’m not ready to go and spend $50,000 with Chuck.” What’s the simpler way to test out an Info-Graphic?

Neil: Ninety-nine designs, you can use the one made for $250.

Andrew: $250 they’ll create an Info-Graphic? Actually, multiple people will create Infographics, and then we pick the one we want.

Neil: Yes.

Andrew: All right. There you go. Final point here, don’t forget to market your content. I always think about just creating these interviews. I don’t think about marketing them.

Neil: Yes, and this goes back to sharing your content, right? Everyone writes content and thinks that the content is going to spread and they’re going to get a lot of traffic from it. That’s not necessarily the case. It doesn’t matter if you put out a masterpiece. If no one reads it, it’s not a masterpiece. You’ve actually got to get out there and spread. So by emailing people that you mentioned in a blog post, asking them to “Tweet it out.” Share it, right? All these things help with the traffic generation. And that’s a big thing. A lot of bloggers don’t do Outreach.

Andrew: And so if I mention someone in an interview or mention someone in a blog post or mention someone in an Info-Graphic, do I just email them out and say, “Hey, I mentioned you in here. Tweet it out.”

Neil: You can kindly ask them, right? You don’t have to enforce it. But you’re like, “Hey, Andrew. I mentioned you.” So if I were you and let’s say you put an interview like [???], right? Let’s say it was just a general interview and not a Master Class, but let’s say, I have a perfect example. You just did the 1000th interview, right, on Mixergy 1000th interview?

Andrew: Yes.

Neil: So someone on your team emailed and said, “Hey, just want to let you know you were one of the ten people in the 1000th interview in Mixergy 1000th interview.” Feel free to share it. Click here if you want to Tweet it out. And I just clicked it and it already gave me the [???]. Click, right? And it Tweeted it. They messed up on it because the first thing they Tweeted said, “At Mixergy” which means it won’t get as much traffic.

Andrew: I thought I told her about that. All right. I’ll have to talk to her about that. That is a big problem.

Neil: Yes, so I adjusted that part so more people would see that. And then I Tweeted it out.

Andrew: Thank you. And the way that we often do it actually, I copied from you. I think when you first interviewed me for your site, you emailed me afterwards and you said, “Andrew, here it is on the site. If there are any mistakes, let me know.”

And I realized that when you say something like that without asking, when you say something just nice and considerate like that the person’s so much more receptive to anything else you say afterwards. So I don’t know that we, no actually we do. With interviews we do say, “Could you please help Andrew by Tweeting this out?” We are very explicit about it.

Neil: I’m going to help Andrew, click.

Andrew: Yes, it’s either Anne Marie, who actually executive produced that one interview that you’re talking about. Or Andrea, who is our interviewee liaison. We’ll email afterwards and say, “You’re up. It’s up on the site. Thanks for doing it. By the way, if you’d like to help Andrew out, here’s a way to do. Tweet it.” And so we found that that works. Is this one way that you’ve done it? Is this your email? Let me see if I can zoom in properly. There it is. And why don’t I read it out a little bit.

Neil: Yes,.

Andrew: Its subject, “You Should Be Blogging About,” insert blog post topic. The body is, [Insert their first name], as an avid reader of, [Insert their site name], I would love to read about [Insert blog post topic]. And I think your other readers would as well. Your content on, etc. What’s going on with this?

Neil: So I would use this as an email template to get more guest posts.

Andrew: Okay.

Neil: And I use guest posts as a way to promote my content. The reason being is if you, Andrew, have a blog called, “Mixergy” and I and Neil have one called, “Clicks Brow” and we both have entrepreneurs who rebuilt our sites, why not try to encourage you to let me guest post on your site? And then I can link back to my own site which [???] readers.

Andrew: I see.

Neil: And that’s like a simple way to actually generate quite a bit more traffic. And if you guest post once or twice a week you’ll start noticing that you’re getting more reader base from your competitors or the people within the industry.

Andrew: Guest post on other sites – you don’t do that anymore?

Neil: I don’t, I used to do that a lot. I used to do five guest posts a week.

Andrew: You’ve outgrown it?

Neil: Yes.

Andrew: You’ve outgrown the lot, and the way that you did it is by, and I’ve watched you do all the things that we talked about here. If we were to do it all, let’s bring up the big board right now, here are all the different topics that we talked about today. If we were to do one, Neil, which one would you suggest that we start out with? If we were just to say, “Hey, I learned from Neil. I’m amazed by what he does. I just want to dip my toe in the water and see what I can do if I use Neil’s ideas. Which of these ideas would you recommend?

Neil: I would recommend, actually, the last one, which includes guest person. Don’t forget to monitor your content, so soon you’re already creating content. That’s actually the most effective [?]. Even if you don’t have time to create content yourself, go create content on other sites, or people within the industry, because it actually makes quite a bit of sense. Don’t do it to manipulate Google or try to, like, grow means [unintelligible]; do it to because it will actually guide sales to your business.

Andrew: I see. And, it’s not about search engine optimization anymore, or it’s not about the anchor text that you get when you do a guest blog post somewhere else, but it is about raising your profile with your audience and getting the traffic. If we were to do it, Neil, how do we know which sites to go guest post on?

Neil: The easiest way to look at it is Open Site Explorer’s domain authority. So if you go to Open Site Explorer…

Andrew: Yeah, let’s do it right now together. I’ve got it up from before, now, don’t I? Open Site Explorer–there it is. All right, so let’s suppose I was Neil Patel today, with Quick Sprout…

Neil: So let’s say, if I’m interested in going to other entrepreneur blogs…

Andrew: Yep.

Neil: So the first thing, we would use a Google blog search to type in my “entrepreneur blogs” and we would get a list, right? After you have them, you can end up going to Open Site Explorer and then typing in the URL, like, Mixergy.com.

Andrew: I see, so first you find entrepreneur blogs on Google’s search results, and then you type them in here to see which of them has the highest authority, and that who you’d approach first.

Neil: That’s correct. Because you can type in “entrepreneur blogs” on Google, or “top 50 entrepreneur blogs” and you can end up creating, getting risk, right? And you’ll see a domain authority number–usually the higher the number, the better the site. Also, then I would go to Mixergy to see how many sell-per-shares you’re getting per post.

I would also look at how many comments you’re getting, because the more comments means the more engaged readers you have. The more engaged readers you have, the more likely they are to click through a link and actually buy something from me, versus readers who don’t comment, share, do anything.

So that’s why I figure out which sites to go on and guest post. So I’m looking for the sites with the highest domain authority, the sites that get a lot of social shares, and sites that have a lot of comments, cause it shows that they’re getting engagement. If I had to throw in a fourth one, it’s sites with big email lists, but a lot of sites don’t publish their email lists.

Andrew: Okay.

Neil: The number.

Andrew: Well, as always, this was incredibly helpful. It’s so great to have you back on here. You were, before I did interviews formally on Mixergy, or even at all on Mixergy, you were one of the people who came out to a Mixergy event, and onstage, you talked about marketing, back when you were at the stage when you had to find [what] you called “the monkeys”. You said, “I just need anyone who can do this work”, and that’s where you worked. Today, you’ve gone first class. You’re hiring the top of the top, and then buying their companies. Hello Bar you bought from Chuck.

Neil: Yeah, I bought from Chuck.

Andrew: Congratulations on all the success. Are you still at conferences?

Neil: I still go to conferences, a lot of them.

Andrew: All right. I would suggest this, first of all: anyone who’s listening, as a follow-up of course go check out the tools including and especially the one on Quick Sprout.com, but number two: if you see Neil at a conference, please go over and talk to him and have a conversation with him. I’ve said this so many times: people who came and met you at the Mixergy conference were amazed by how approachable you were, by how helpful you were, because you were such a big name who’d done so much, it felt like, “Well, does Neil have enough time to help me?”, and they were always shocked that you did. I imagine that today it’s scaled back, but that you’re still there for people.

Neil: If you ever see me at a conference and you mention Mixergy, let me know and I’ll buy you a drink.

Andrew: Oh, do it. Thank you so much, Neil, for doing this. Neil, would you hang on for one second? I want to ask you something related to another Mixergy interview.

Neil: Sure.

Andrew: Cool. Thank you all for being a part of it. Bye, guys!

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Master Class:
The obstacle is the way
(How to turn trials into triumphs)
Taught by Ryan Holiday of Brass Check Marketing

Master Class: The Obstacle is the Way


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Transcript

Andrew: You know how as entrepreneurs we keep facing obstacles? Lack of money, a developer we work with suddenly quits, our idea doesn’t work out, we’re too short, or in my case, very handsome, all these obstacles just get in our way constantly. Well that’s what this session is about. It’s about how to turn your trials into triumphs.And to lead us we’ve got Ryan Holiday, he is the founder of Brass Check Marketing. And the session is going to be based on his book which is called, “The Obstacle Is the Way.” We pulled out some key ideas from the book which we’ll be talking about throughout the session. Ryan, thanks for leading us.Ryan: Yes, it’s good to be back.Andrew: I want to understand the problem and as tough as it is for me to be too handsome…

Ryan: Sure.

Andrew:…or some of those other challenges that I brought up earlier, the British had an even bigger challenge. And in the form of the Germans’ use of a new form of warfare in World War II. What was that?

Ryan: The story I tell in the book is this idea of – well I talk about it in two ways. We talk about the Blitzkrieg and then are you talking about specifically the North African desert?

Andrew: Yes, the Blitzkrieg was huge.

Ryan: Sorry, you cut out for a second. Can you hear me?

Andrew: I was talking about the Blitzkrieg, lightning war.

Ryan: Yes, sure. So what happens in World War II is that the Nazis unveil this tragedy known as the Blitzkrieg, which is essentially this lightning attack by using mostly tank and other mobile, sort of, forms of warfare, that is designed to catch the enemy not only off guard but sort of overwhelm it with speed and force in a very short amount of time. And it’s designed to sort of create a break in the enemy’s lines that forces them to scramble.

And what I talk about is shortly after the invasion of Normandy Eisenhower, he’s lead up to this point what is the largest amphibious invasion in military history. But slow going allows the Germans to wage this counter offensive. It’s 200,000 men. It’s 13 divisions. They’re threatening to essentially throw the allies back into the sea, which is the worst place you would want to be if you’re trying to retreat.

Basically the entirety of World War II rests in this moment, and there’s this magnificent scene. Eisenhower, he assembles all the generals into a conference room in Malta and he says to them, “The present situation is to be seen as one of opportunity for us and not disaster.” He says, “There will be only smiling faces at this conference table.”

And the reason he says that is for the first time an allied general sees the fatal flaw inside the Blitzkrieg, which is that it’s basically putting all your eggs in one basket, right? By charging ahead, not worrying about your flanks or your supplies, you are charging head first into a net. And Eisenhower realized that if the allied troops bent instead of breaking, if they sort of allowed this and they circled around it, they would capture something like 50,000 Germans in this net. Patton, he says, “It’s like they’ve just stuck their head in a meat grinder.”

And so up until this point the Blitzkrieg had been undeniably effective. It worked time and time again because the enemies always saw it as being overwhelming, as being intimidating, and they broke. They broke discipline. But what Eisenhower was able to do was see it not just objectively, but almost optimistically. He built a strategy in response to it that created what was known as the Battle of the Bulge, which was ultimately one of the most decisive allied victories in World War II.

And so for me this is a metaphor, right, because in our own lives we face these obstacles. It looks like a competitor is about to move into our space, they’re way bigger than us. Someone comes charging at us. Our first instinct is to get out of the way, to dodge it, to assume we’re more or less fucked, right? But it’s not. And if you can hold your ground and see objectively what is in front of you, you can often find the weakness inherent in that position of strength. And that’s what Eisenhower did if that answers your question.

Andrew: Okay. It does answer my question. And I was kidding earlier when I said too handsome. Because frankly, design has always been a challenge for me here on Mixergy, and I hired a stylist to help get me dressed. And I found someone, finally, to help me with the design of the interview, the layout here, of our conversation. But, I find that I have modern day problems.

And as I was looking at your book and going over what we’re going to be talking about today, I see historical references to Rockefeller. References to big stars like George Clooney are coming up. How does their challenges relate to my every day problem of someone else about to start an interview program that has more money than me, has a big studio? Or someone who’s listening in my audience who has a challenge who can’t afford to pay their developer what they’re worth, and their developer’s working part time and they can’t get as much work out of them as they need?

Ryan: Sure, it’s interesting. So I based this book on an exercise or the thoughts of Marcus Aurelius, the Roman emperor. And I think you read this book, you read what are essentially the private thoughts of the most powerful man in the world, written in about 170 A.D. And what you are struck by is how relevant the thoughts of this man writing 2,000 years ago are to the problems that we face.

And there was actually one passage that he writes in there where he’s talking about the problems faced during the reign of the emperor Trajan, who came well before Marcus Aurelius, and how similar the problems that Trajan faced were to the problems that Marcus Aurelius faces. You extrapolate that out, the problems that you and I face, the problem that President Obama is facing right now, are more or less the same timeless human problems: not having enough money, not having enough time, being stressed, being over worked, being over-burdened, facing bankruptcy, facing conflict, facing heartache, facing loss.

We all face these more or less same problems. Yes, the manifestation of them changes. For them it’s a shortage of gold coins. For you it’s a shortage of access to a line of credit. Whatever it is, right? The details change but more or less we are human beings who are dealing with the same problems that we have always dealt with.

Andrew: I see.

Ryan: And so I wanted to focus on sort of objective historical problems where there was not much controversy and there was not much argument. So if you’re sitting there telling me that you’re having a problem with your developer, I’m going to tell you what you can do about it. And then you’re going to go, “Oh, no. But my problem is different because it’s this. And then I’m not going to be able to do that.”

I wanted to sort of pick things where there’s no argument. Like what Eisenhower did and it happened, it’s done, it’s clear and it’s inspiring because I would much rather deal with a developer problem than 13 Panzer divisions, right?

Andrew: Right.

Ryan: And so the point is what can we learn from history? What I say about practical philosophy is that, you know, in the last 5,000 years chances are someone faced more or less the same problem that you’re facing right now. And they got over it, it didn’t kill them. And they probably wrote about it. So let’s find what that is and at least incorporate that into our solution, not to say we have to do the exact same thing, but we can certainly learn from it.

Andrew: So you’re going after timeless ideas as opposed to tactics that will only work today and be out of date tomorrow?

Ryan: Yes, exactly.

Andrew: Okay. All right. Why don’t we start with them then? Here’s the first one and this is really a timeless idea: control your emotions. There was a time where I mentioned this guy a moment ago. Let’s bring him up on the screen. This is John D. Rockefeller. We think of him as being one of the most successful entrepreneurs of all time, but he was around in 1857. What happened in 1857?

Ryan: Yes, so 1857, shortly before 1857, Rockefeller gets his first job. He’s 16 years old. He’s a sort of aspiring financier. He’s a bookkeeper. He wants to be an investor, right?

Andrew: Okay. And his first job is an assistant bookkeeper.

Ryan: Yes, he’s making 50 cents a day, right?

Andrew: Okay.

Ryan: And the panic of 1857 strikes. It’s a crippling national depression, probably one of the worst that America has ever faced. It actually originates in Ohio where Rockefeller is based. It’s pretty much the worst thing that can happen to a kid who just got his first job in finance. But Rockefeller, he later said, “I was inclined to see the opportunity in every disaster.” And that’s what he did. He actually used this moment in time, this financial panic as his sort of college education in the market.

So he sits down. He watches what everyone else is doing; he sees the mistakes that seasoned investors are making. Because he basically has no money in the market, he’s able to be objective about it. He’s able to see how disastrous emotional reactions can be to market fluctuations, the problems that it causes. And then crisis after crisis in his life he’s able to apply these lessons because of instead of freaking out, instead of quitting or running away and getting another job, he was able to see this all objectively. So the first part of the book to me is about controlling those perceptions, controlling those emotions so we can both understand and learn from whatever situations we find ourselves in.

Andrew: Okay. Was there a time in your life where you felt like you’re disaster striking, and you wanted to lose control, wanted to lose your emotions?

Ryan: Sure. All the time. It’s funny, you know, I talk about one of my favorite examples of controlling your emotions. I talk about sort of space training, right? As they train the first set of astronauts, it wasn’t so much their ability to fly aircraft that qualified them for, you know, the Apollo missions. It was their ability to regulate and control their emotions.

Andrew: Yes.

Ryan: To not hear a bunch of alerts and then start hitting random buttons and blow themselves up. That’s basically the main skill they were looking for in these astronauts. And so I really liked that, and I was thinking about all the problems that I’ve made worse in my own life. You know, someone sends me a nasty email. I want to respond, I want to get angry, I want to tackle, you know, a superior about it. I want to fight back against them.

When really what I realized early on when I was working at a large company, I was the Director of Marketing at American Apparel, I realized that there would be these emails that I would get. And if they would make me so upset, and then I thought for a second, “What if I never saw this email?” Like, what if I accidentally deleted it or I didn’t read it? How much different my life would be, right? The conversation would resolve itself or sputter out.

And I wouldn’t be upset and I wouldn’t be angry, right? I would just not know that this potential trigger had been pulled. And it’s what got me thinking, I can just have that reaction and not respond. I don’t have to read it and freak out. I can read it and not do anything about it. And it’s funny I read that stuff about NASA and I included it in the book. And a few weeks ago, Chris Hatfield, the astronaut, he did a [???]. And he was joking that in space there’s no problem that a human can’t make worse.

And I think that that’s what you want to think about with your emotions which is okay, something happened. It’s an objective event outside you. Can you not make it worse with an overreaction? Can you not make it worse with your emotions, either being upset, being hurt, being surprised, you know, being resentful? Can you not make it worse with your emotions? Like, the other cliche is the first rule of holes is to stop digging. Well, that’s the first thing our emotions do usually, is dig us into a deeper mess than we were already in.

Andrew: Okay. All right. First idea we talked about is controlling your emotions. Not allowing them to get away from us. Let’s go to the next one which is to use the obstacle against itself. You give the example of how this man did it. Let me bring up Gandhi. What was the obstacle that he came across?

Ryan: Well, it’s interesting. You have Gandhi who was, you know, an educated, incredibly smart man. But he had essentially no resources, right? And there he is. He’s facing the imperial British Army, the most successful largest army on earth, right? And he somehow manages not only to defeat them, but they defeat themselves because of the position that he put himself into. So I think what a lot of times we do we find ourselves over-matched in a particular position or a particular conflict; we try to imitate the people that we are competing with or that we are challenging. We try to do what they do.

And it’s very problematic to come at people in their own strength. So what Gandhi did was not challenge the British militarily, he challenged them politically and ethically. And he used essentially the size and the strengths of the British Army against himself. He challenged them and put them in positions where they would have to use force against a significantly weaker enemy that caused them to lose the moral high ground. What he would do continually, whether it was the march to the sea.

Andrew: Why did he do the march to the sea?

Ryan: Salt March.

Andrew: Here, that’s what we’re looking at, right? I pulled it…

Ryan: Sure.

Andrew:…from this site. The Salt March. Why did he do the Salt March?

Ryan: So basically what Gandhi did was that he identified a completely bankrupt part of British policy which was essentially the tax on salt, right? His argument was put many people in poverty, prevented people from being self-sufficient and made them dependent on the colonial British.

Andrew: Mm-hmm.

Ryan: So he said look, we’re going to march to the sea. We’re just going to collect our own salt. It wasn’t actually a replacement. It was a symbolic gesture. We’re going to march to the ocean, and we’re going to collect salt in flagrant violation of this policy. We’re going to force them to enforce it. The optics of that policy are going to be displayed for the entire world to see. We’re going to incite them essentially to embarrass themselves.

Andrew: Okay.

Ryan: He didn’t say look, we’ve got to raise an army and then we’re going to fight the British in a pitched battle because they would lose. Instead we are going to do something where we look particularly harmless. Where what we are doing is something that people empathize with or sympathize with or basically find no fault in, and we’re going to force them. We’re [??] force their [??] force them to do something that will be indefensible. That’s what he did. He would do that over and over again.

It’s the same playbook that Martin Luther King later executed, which was to sort of lean into the strengths of your enemy. Their…in many cases that’s their numerical and forced superiority, forced them to exercise that in an indefensible and justifiable way and use the media and public perception against that…against that enemy until they eventually have to either change the policy or relent entirely.

Andrew: Okay. So instead of trying to combat them by being exactly like them, which is what most people would try to do, you want to use their power against them. In Gandhi’s case — in the example that you just gave — I think Lord Edward Irwin was the viceroy of India. He had basically two options: one was to go in there and stop them from marching, and the other was to just let it go and hope it peters out and hope it quiets down.

He decided, you know what, if I attack them then it’ll look bad. Like you said, the optics are just not going to be helpful. On the other hand, he said he’d let them go and let them do it. What happened was this big march kept getting bigger and bigger and made a huge statement that backfired on Irwin.

Ryan: Right. Essentially it puts them in what strategists call the horns of a dilemma. You have to pick which one you want to get impaled by…

Andres: See.

Ryan: …and neither of them is pleasant.

Andrew: Okay. There’s good advice right there. Let’s go on to the next big point which is to reverse your perspective. I mentioned earlier that we were going to talk about this man [pause]. This is George Clooney. You use him as an example.

Ryan: Mm-hmm.

Andrew: He was…I didn’t realize that there was a point in his life where he was bitter. I feel like look at how good looking he is and he…

Ryan: Sure.

Andrew: …always was. So what is…

Ryan: Sure.

Andrew: …so what does he have to be bitter about?

Ryan: Did you know George Clooney almost played professional baseball as well?

Andrew: No. I didn’t know that.

Ryan: Yeah. I learned that recently. Basically the story that I tell is one from early on in his career. Like all actors who are just getting started you go out and you go on auditions. Right? And you are usually not successful. I think it’s something we’ve all experienced the equivalent of. We go for job interviews and we feel intimidated. We feel embarrassed. We feel self-conscious. We want to be chosen very desperately. It’s a human emotion in that you go into the room and you basically want to beg for this person to accept you, to tell you that you’re awesome…

Andrew: Yes.

Ryan: …to choose you for the position.

What that forgets of course –and it’s something that you realize when you hire someone for the first time — is that despite all your positions of power and influence, you desperately need to fill this position. When a casting director is casting for a role in a movie, it’s not as if they can’t…they won’t fill the role. They’re like hey, you know what, we’re not going to have a leading man in this movie. By definition they are paid to find someone to fill the spot.

What Clooney realized…Clooney sort of understood that flip and he said to himself okay look, they have a problem. I’m the solution to that problem. So instead of going and groveling or coming at it from a position of weakness, I’m going to understand and empathize where they’re coming from, and I’m going to position myself as the solution to that problem.

What a casting director is looking for is yes, someone who looks good; yes, someone who can do the lines. They are looking for someone who’s going to show up on time every day, who’s going to be dependable, who’s going to be affordable. They’re looking for the perfect person for that role. They need you as much as you need them. That’s what Clooney thought about.

That flip I think is really important about any situation you’re in. What I realized early on in my career as well is that you go around, and you don’t want to get fired. You would never want to get fired from your job. So you endure all these seemingly negative situations because you don’t want to get fired.

But if you thought about it the other way, if you thought about it the other way. If you thought about – so let’s say you do something, you screw up. Now you’re on the edge of getting fired. That would feel like some massive personal failing on your part. You’re a loser, whatever. But if the day before you quit in indignation because you didn’t like your boss, it would be fine, right? You would’ve just left. If quitting a job is empowering, getting fired is not. But objectively they are the same thing.

Andrew: You’re saying in the end you end up in the same place?

Ryan: Right. You don’t work there anymore. That’s all that it means. And so what the stoics talk about is this idea of eliminating the explanation and interpretation of events and seeing them objectively. And you basically flipping your perspective allows you to see those things objectively because you’re understanding that one event can have two very different explanations, and therefore, you logically go, “Okay. They’re all manufactured. They’re not inherent, right?”

And to me that’s something I try to think about in my own life. What is the explanation that I’m bringing to this situation that’s making it either really bad or really intimidating? And what’s a different explanation that I could try that would give me the perspective and the ability to see through the baggage I’m bringing to the table?

Andrew: Here’s one guy who I noticed did that. Oren Klaff is a guy I interviewed a while back on Mixergy.

Ryan: Okay.

Andrew: And he said he did this. He used to walk into investor meetings feeling like he had to beg them for money or be a jester who was going to entertain them so that they would give him money. And he said once he changed his perspective, he just reversed it by thinking, “Well, these people need a good entrepreneur to invest money in. These people need someone who they can bank on, literally.”

Ryan: Right.

Andrew: Then he started to prize himself, and they started to feel like they had to work to get him. And that was a small change in perspective that allowed him to start raising money and it was hugely impactful.

Ryan: Yes.

Andrew: That’s what you’re talking about.

Ryan: Yes, there’s another story I tell about in the book. I don’t tell in the book but it’s something that stuck with me: Ulysses S. Grant, his sort of first experience in battle. He’s hunting this enemy and he’s afraid, he’s afraid. He desperately does not want to meet the enemy in the field of battle because he’s never been in battle. He’s worried what it’s going to be like. And finally, they come to the enemy’s camp, and he realizes that the enemy ran away, that they weren’t there. They hastily made camp and escaped.

And then he realized in that moment that the enemy was just as afraid of him as he was of them. And that’s sort of the whole point. That’s the importance of empathy, the ability to see the same situation from somebody else’s perspective, and understand that it’s not all about you. And often the story you’re telling yourself, even though it’s egotistical in its own way, it’s actually holding you back. It’s actually making your own life more difficult.

Andrew: Let’s go to the big board for the next big idea which is to focus your efforts on what you can control. Who is this guy?

Ryan: Is it Tommy John?

Andrew: Yes.

Ryan: There we go.

Andrew: What happened with him?

Ryan: Yes. Before I tell the story I think it’s very indicative that one of the first things they tell addicts in the 12 Step groups, the first thing they sort of go over is distinction between what we can change and what we cannot change. And the reason is people waste an immense amount of energy, an immense amount of discipline and willpower on trying to change things that are outside of their control. Like, you have crappy parents, they treat you bad. You can wish really hard that you had different parents, but you don’t. These are the parents that you have.

And the part that you can change is how you interact with them. Whether you interact with them. Whether it hurts your feelings. Whether you carry and hold the resentment. Those are the things you can control. And what the stoics did and the stoics repeatedly stress, and I talk about it in the book, is this distinction between the things that are up to us and the things that are not up to us.

And I tell the story of Tommy John because Tommy John is one of the longest playing pitchers in major league baseball. There were these moments in his career that other people would have considered to be either hopeless situations or impossible situations, but he really broke down, you know, is this something that I can change? So he blows out his arm, his pitching arm, and the first doctor tells him, like, “Look, your career is over. A pitcher can’t function without this ligament in his arm.”

And he talks to another doctor who has an experimental idea where they basically take the ligament from his non-pitching elbow and put it into his pitching elbow. This surgery becomes known as, “Tommy John” surgery. The doctor tells Tommy there’s a one in 100 chance that if he gets the surgery he’ll be able to pitch again. And so Tommy goes, “Oh. So you’re saying there’s a chance. Well, I’ll do it.” And he rehabilitates… He gets the surgery, he rehabilitates, and he begins pitching again.

Ironically, he actually becomes a better pitcher after the surgery than he was before. But the point was, getting in the surgery was something he controlled. There was a chance that if he got it, he would improve. It wasn’t an impossible situation, it felt that way, but it wasn’t.

The other story I tell from Tommy is he’s, I believe, 40 years old, and he was cut from the New York Yankees because they said he was too old. They’re almost cutting him out of pity. They’re like, “Look, you’re too old. You don’t want to play baseball anymore.” And he says, “Look, if I show up in training camp….” He says, “If I show up, am I going to get an honest look? Are you actually going to look at me?” And they said, “You shouldn’t be playing baseball. You should quit.” And he said, “Look, do I have a chance of making the team again if I show up and make a good… If I test well at camp?”

And they said, “Yes. Fine. There’s like a one in 100 chance again.” And he says, “Fine, I’m there,” and he trains for months and months and months. He ultimately ends up starting for the Yankees that year, opening day. Because it was something that was in his control. Right? If they said, like, “Look, you’re never going to play again, you’re banned from baseball,” he would have moved on and did something else.

But what he did was, he would focus intensely on these situations where he had a chance. It didn’t matter if he had a sliver of a chance, a tiny chance, what mattered is, did he have a chance.

Andrew:: And he picked being able to play, not in his control, that’s up to them, showed up, completely in his control, so he shows up. That’s what you want us to take away.

Ryan: Right. The effort, the process, that’s what he controlled. The effort. And then whether it worked out or not was outside of his control, but the process was enough, and that’s the distinction that you need to make, and the place that you need to put your effort.

Andrew: All right. On to the big board. The next big idea is to not listen too closely to others, or even to our own doubts, and one of the examples you give is this man and the device that he is holding.

Ryan: Ah, okay. Yeah, you know, I talk about Steve Jobs, he had what… If you read the Walter Isaacson biography, in some ways it’s very critical, and it should be. Steve Jobs was not a perfect individual by any means. But he had what these people call the “Reality Distortion Field,” which, I get. I think they actually mean derisively. But it was this ability for him to see past the boundaries of what other people thought was and wasn’t possible. Right?

So he has an engineer come in, he wants this mouse built a certain way, and the engineer says, “Nope. I’m sorry, it can’t be done. It doesn’t work.” And Steve Jobs says, “Okay, you’re fired.” And then the next guy who comes in his job is to say the mouse is possible, and they work to make that thing happen.

So it sort of goes to what we were just talking about earlier, but I think the problem is we are told over and over again in our lives to be practical, to be realistic, to be reasonable, to listen to what other people are saying. And the problem is, a lot of what other people say or bring to the table has to do with their own baggage, it has to do with their personal beliefs about what is and isn’t physically possible.

That is arbitrary, and Steve Jobs sort of saw through that, and he was notorious for setting these very ambitious goals and deadlines, knowing that is was far better to sort of overreach and try to make something that was perfect, that was flawless. It was beyond whatever capacity people thought that they were capable of. Because that’s better than, you know, trying to be reasonable and then failing at that. Trying to be realistic and failing at that.

And, you know, I think we all have doubts in our lives about whether we can pull something off, but I know, in my experience, I’ve yet to find a series of commitments that I’ve made that I didn’t ultimately end up fulfilling in one way or another. And I am better off for having to have made those aggressive commitments, and then needing to grow and expand to reach them, then I am when I am curbing what I think I am capable of.

I think you see this… Like we were talking about running earlier, before we started the call. You think that your capacity is X, but, objectively, your capacity, your physical capacity, is usually larger than whatever your mind tells you you’re capable of, or vice versa. And if you push past those, that’s when you really test yourself and you find your ability to grow. And so, I think, part of doing great things is having those ambitious goals that force you to reach beyond, maybe, whatever you would be inclined to do if there wasn’t a gun to your head. Like, I find if I sign a contract for a book I’m going to deliver that book, right?

If I’m just, you know, fooling around at my desk, am I going to deliver that book? And am I going to deliver it at that date that I’ve committed to do, that I’m now legally obligated to meet? And so I think deadlines, commitments are super important, and I think the more we can get them to lead us, to be in front of us a little bit, maybe sprint ahead of what we think is possible, the more we’re going to accomplish.

Andrew: I found that myself with running specifically where if I signed up for a marathon, I felt forced to go out and train and to run. And I’ve always completed them one way or the other, even if it meant I had to walk. Like the Vegas marathon I did…

Ryan: Sure.

Andrew:…where I walked it. Seven and a half hours it took me to finish. They stopped doing water support in Vegas. They put the water bottles along the route on the floor for anyone else who wanted them, and I just had to deal with it. But, yeah, you’re right.

Ryan: Yes.

Andrew: All right. Onto the next big idea which is to take action and make your own fortune. And you bring up this guy. How do you pronounce his name? Let me bring him up on the screen for you.

Ryan: Demosthenes. Can you hear me?

Andrew: Yes.

Ryan: Yes, Demosthenes.

Andrew: Yes.

Ryan: The Athenian orator.

Andrew: Okay.

Ryan: So Demosthenes. It’s a fascinating story. It comes from Plutarch, the Roman assayist. But basically Demosthenes he’s born into a wealthy family, but he’s physically disabled. He’s weak and frail. He has a speech impediment. And then I think he’s five or six years old and his parents die, which is terrible. So now he’s an orphan. His parents have died, and he’s basically given these legal guardians who plunder his estate. They steal all the money that he was meant to inherit. This is basically you’re a nine year old, this is like the worst series of events. You lose your parents, you lose your fortune, they neglect your education, you’re basically on your own.

So what Demosthenes decided he would do is he’d seen a great speaker and he was enthralled. And he wanted to become this person. And so his life’s task came mastering the art of oratory. And his other great cause was sort of taking revenge and earning back what had been stolen from him. So you sort of insert this almost movie montage-like series of events.

He decides he’s going to conquer his speech impediment by running and speaking while he’s running. So speaking while he’s out of breath. He practices shouting into the wind to develop his strength of voice. He conquers his speech impediment. He puts rocks in his mouth. And I’m not sure how this actually fixes it, but he puts these rocks in his mouth and he strengthens his tongue and his cheeks and his control over his speaking patterns, until eventually the stutter is gone, too. Then he shaves his head, half of his head.

So he’s too embarrassed to go outside, and he spends every day of the next several years working in an underground, like, I don’t know, war room that he builds for himself. And here he teaches himself the law, he practices speaking, he spends every waking moment of his life preparing for this destiny that he set for himself. Eventually he challenges the guardians in court. He wins in court. They contest it every step of the way. It’s a many year legal battle, but inch by inch he begins to win.

And he makes a name for himself as a speaker and as a lawyer. He eventually wins the case, but what he really won was this career, this calling. He becomes known as the “Voice of Athens.” He’s the greatest speaker in the city. He’s the most knowledgeable of the law. He wins back the fortune, but there’s nothing left. The fortune that he gets is he’s now this powerful and influential politician. You know, I think we all find ourselves in disadvantageous positions we’d rather not be in. Positions that are unfair, you know, given certain disabilities or problems or things we’d rather not have.

And it’s not simply, earlier we were talking about perception, it’s not simply a matter of, like, “Oh, I’m going to look at this as being the glass half full.” It’s not just about thinking that you want it to be better. It’s about taking those steps and actually making it better. About taking action, real action, sustained dedicated persistent actions against your problems and understanding that that’s where the real gains come from.

Andrew: Amazing. I like the idea of a guy who would shave half his head to force himself to feel like he couldn’t leave. To force himself to stay and work for two years until he made it.

Ryan: Right, right.

Andrew: Until he got where he needed to be.

Ryan: You know, I think, not to be flip about it, but today you get picked on, you get screwed over in your childhood. Like, the end of that story as we commonly see it is that the person goes on a murderous rampage.

Andrew: Right. As opposed to saying this is going to be something that can actually be useful. I’ve talked to multiple entrepreneurs who have gone into the basement, not by shaving their heads, not because they put some kind of penalty on themselves if they do, but they’ve said, “I’m going to go into the basement. I’m going to work quietly for a few years and build this thing out.” And ended up doing great.

Ryan: Yes.

Andrew: I see the power of that and it’s so much more useful than going on a murderous rampage.

Ryan: Yes.

Andrew: Not that those are the only two options. Onto the next point which is to start anywhere you can. You give the example of this woman. Let me bring up her photo up here. All right. There it is.

Ryan: Amelia Earhart.

Andrew: Yes, Amelia Earhart. What happened to her when she started?

Ryan: Yes, so, you know, it’s the 1920’s. She’s a female aviator. It’s a very different America; that is this is something that people eagerly embrace. And she finds the things that she is capable of doing are hemmed in by these various constraints and prejudices. And so she gets her, I forget what year, but she gets her first sort of offer that I think any reasonable person in her position would’ve found quite offensive. They’re looking to have the first female flight over the Atlantic, continuous flight over the Atlantic. And the proposition is this: she’s not actually allowed to fly the plane. There’s going to be two male chaperones. She doesn’t get paid, they do.

And basically they’re going to condescendingly treat her as though she is incapable of fending for herself. But someone has agreed to fund this flight and their first pick has dropped out, by the way. So does she want this leftover, declined opportunity that is less than ideal? Does she want to take it. And, of course, what does she say? She says, “Yes.” She says I’ll bite my tongue and I’ll say yes. She flies across the Atlantic. She becomes relatively famous for it and uses that as a launching pad for the rest of her, you know, famous flights, for the platform and the personality she builds.

You know, this was the chapter that I liked writing the most because it was the most personal for me. You know, I left college in 2007. So right during the financial crisis. My class, because I dropped out, my class graduated in 2008, 2009. So at the height of the economic recession from the crisis. And, you know, what I saw most of them do was the opposite of what Amelia Earhart did, right? They all moved back home with their parents. They waited, more or less unemployed, for the perfect job opportunity to come their way.

Meanwhile, you know, a handful of them, I would put myself in this boat, sort of took whatever they could, worked on whatever opportunities were there, and built something. And a bunch of them now ironically are just graduating from grad school, or they went back to school and got their PhD. And they’re still expecting some magical, perfect opportunity to fall in their lap. They’re waiting for Google to call them. They’re waiting for Microsoft to call them or Amazon to come offer and give them their dream job.

And what I want to tell them is, like, “Look, it’s never going to happen. That’s not how it works.” The perfect opportunity very rarely falls in your lap. In fact, a less than perfect, if not objectionable opportunity falls in your lap, you take it, you make the most of it. Then you make the most of 10 other seemingly inferior or frustrating opportunities and then you make your own way from there. And I just love that example from Amelia Earhart.

Andrew: What was it that you took that others would’ve felt like they were too good to take? What’s the opportunity?

Ryan: I dropped out of college for a job that paid me $30,000 a year.

Andrew: What was that?

Ryan: I was working in Hollywood. I took a job as an assistant, literally answering phones at a Hollywood management agency. I was willing to put up with an immense amount of shit because the person who offered me the job told me that I would get direct access from them and instruction from them. And that they would teach me and mold me into someone who could do more than answer the phones. And I was willing – you know?

Andrew: No, sorry. What were you going to say? I want to follow-up, but I want to give you a chance at first say.

Ryan: Yes. Answering someone else’s phone and scheduling their appointments is my worst nightmare. But I was willing to do it because I knew it would lead to something, and I knew that if I could get my foot in the door I would make it into something. And I could’ve waited until I graduated, but I knew that when I graduated I would be in the exact same position. I would just feel more entitled and be more impatient when it came to, you know, paying my dues so to speak.

Andrew: Right. What about then the idea that if you’re answering someone’s phone, if you’re taking the little jobs that people offer you when you have no other opportunities because there are challenges in front of you, that maybe the world starts to see you as a phone answerer…

Ryan: Sure.

Andrew:…instead of a marketer. They start to see you as a guy who goes and gets coffee instead of giving you the opportunities that people who they see with bigger potential.

Ryan: Sure. Two things about that because I think about it a lot. In fact, this guy, he told me. One of the best pieces of advice I ever got was he was, like, “You’re too bad of an assistant to stay as my assistant.” He wants a body to do this job that basically a monkey could do, but you have to illustrate some sort of promise or potential that makes you too good to be a lifer in that position. I quote Andrew Carnegie in the book. He says, “Ideally, your first job should introduce you to the broom.”

And he doesn’t mean you should be beaten with a broom, he means you should understand that you’ve got to start at the bottom. You’ve got to sweep the floors. You’ve got to learn the importance of sweeping the floors and ultimately decide that you want more for yourself. And so I talk about this with my own assistants and with my own employees, is be just good enough that you’re worth betting on. Not so good at the menial task that you’re irreplaceable at them.

Andrew: Okay.

Ryan: Because finding good assistants is very hard. And some people that’s the perfect job for them. Chances are you probably don’t want to be that person. And you don’t want to be the guy that gets coffee. You have to work twice as hard to show that even though I’m getting you coffee, I’ve got good ideas and you should listen to me. But if you’re sitting at home in the same bedroom that you grew up in, waiting for Larry and Sergey to call you and come be an engineer at Google, I think you’re going to be disappointed.

Andrew: Okay. All right. We have big visions for where our companies are going to go, but sometimes we just have to get that first customer really happy, giving them the little things that they’ll allow us to do.

Ryan: Sure. How many people listened to your first show?

Andrew: Ooh, you know what? No one.

Ryan: Right.

Andrew: I don’t think anyone listened. I can’t imagine there were more than ten, seriously.

Ryan: Right. I don’t think anyone read my first articles, you know? But I had to write them. You don’t get an audience because you want one. You get an audience because you’ve earned one.

Andrew: All right. I do remember William Quigley. I took a tape recorder into his office, and he was willing to have a conversation with me. And I recorded it and I don’t think I got ten people on there. It was very frustrating. All right.

Ryan: Is it still up on your site? Can people go back and listen to it?

Andrew: People can go back and listen to it, actually. Yes, it’s still on the site. I don’t even think William Quigley knows that he was my first interview. I was going to speak at an event and I said, “Can I come in and just do a pre-interview with you?” That’s the other thing: pre-interview. So I was going to do a pre-interview with him like my own assistant…

Ryan: Sure.

Andrew:… and record it and post it online. And he was okay with it.

Ryan: Wow.

Andrew: Onto the next and final point which is to have a mission bigger than yourself. I used to know this man as, oh here he is. Who’s this?

Ryan: Is that James Stockdale?

Andrew: Yes. I’ve been pulling articles off of Wikipedia. So it’s a little hard to tell who it is. And yes, it is James Stockdale.

Ryan: And you said what did you used to know him as?

Andrew: Wasn’t he the guy who was the – Ross Perot’s.

Ryan: He was.

Andrew: He was, right?

Ryan: Yes.

Andrew: Ross Perot’s running mate who came across looking like a bumpkin in the debates in the vice presidential debates. But he had this deep, rich history behind him that you talk about . . .

Ryan: Sure.

Andrew: . . . which was what happened to him during the war, in Vietnam.

Ryan: Yes, it’s interesting that we tend to know James Stockdale and John McCain for their political careers, you know, positively or negatively. But that really masks what was utterly incomprehensible heroism, bravery and strength that they showed during Vietnam. And again, whenever you think about the Vietnam war, James Stockdale, he’s shot down, he’s a fighter pilot. He’s a Navy commander. He’s flying a mission over Vietnam and he’s shot down.

And, you know, a lot of the people that I talk about in this book understood stoicism, but maybe not explicitly so. They didn’t actually study it. Stockdale had been given a copy of Epictetus, who is one of the great stoic philosophers. Literally as he’s parachuting down from the wreckage of his plane into what will certainly be a enemy capture, probably very strong interrogation, definitely torture, and possibly even death, he says to himself, “I am leaving the world of technology and entering the world of Epictetus.”

What he meant was my stoicism is going to come in handy in a North Vietnamese prison camp. Stockdale, as he’s parachuting down, he’s not thinking of himself. He’s thinking of the fact that as the highest ranking American POW, he will be in a position to lead the men who up until this point had been more or less leaderless in this camp.

He comes down, and he becomes this immense source of strength for the other men. He’s basically the leader that they needed. He used this all maybe in one of the worst things that you can imagine. He spends seven and a half years in this prison camp. He’s tortured. He’s beaten. He’s placed in solitary confinement. He uses this as an opportunity to provide moral support for the men that he is now responsible for.

Andrew: He is going through here. Look, this is a photo of him at the time. He is going through hell on earth. He says his mission will be to help other people instead of trying to deal with it himself.

Ryan: Yeah. At one point, and this is obviously an extreme example, he goes to kill himself. He attempts to kill himself not because he wanted the pain to end, but he wanted to send a message to his captors that he would not be broken and that they could not use him against the United States.

Actually, it’s funny. I just said the United States. The soldiers could actually speak to each other. They had this language of hand signals and movements. He would remind the other soldiers, he would say U.S. Not for U.S.A., or United States, but for unity over self. It was this idea of what we’re going through is hellish, and awful, and completely unacceptable by even the most liberal interpretation of the Geneva Convention. But we have each other and we have a responsibility to each other and to our country that’s going to allow us to endure this. We’re going to think about what other people are going through rather than our own problems and our own situations. That’s what’s going to give us the strength and fortitude persevere through this situation.

I mentioned John McCain earlier. John McCain was in the same prison camp. People don’t understand this or they don’t know this. John McCain’s father was a theater commander. He was an admiral also in the Vietnam War. When the North Vietnamese realized this, they offered to allow John McCain to leave the camp.

Normally the way it works is when you’re a POW, it’s sort of first one in, first one out. You would leave, you would get freedom exchanges over time based on your place. They realized that they have the commanding admiral’s son in captivity. They want to use this as a weapon. They want to embarrass the United States by inveighing or applying pressure on John McCain to get him to abandon his fellow prisoners and leave early.

John McCain, he actually refuses to do this. John McCain was tortured in a Vietnam prison camp, and that’s more than most of us will ever go through. But John McCain willingly endured that torture so someone else could leave first and so he would undermine the other men and women who were not as privileged as he was. To me, that’s just so incomprehensibly brave and stoic as to almost be without description.

Andrew: That’s the answer, then. When we’re going through trouble, instead of saying I only have to deal with this because I have to first heal myself, see if there are other people who we can help, or find a mission, any mission, bigger than our own current circumstances.

Ryan: Sure. Look, you’re an entrepreneur and you’re having trouble with the company. You’re stressed and you’re overwhelmed. You can think about how this affects you financially. You can think about all the problems that it’s causing for you, whether it’s stress in your marriage, or your life, or it’s just more than you signed for.

Or you can think about all the employees that you brought onto this business that are dependent on you for their livelihood or the customers who depend on your business to do what they do. Or in your case or in my case, our readers and fans who consume our work. It’s that ability to think of something a little bit larger than yourself that allows you to find something within yourself that maybe you didn’t know you had, and to give that little bit extra.

Andrew: The other thing I just recently found out as I was prepping for this session, is James Stockdale’s middle name is Bond. James Bond Stockdale.

Ryan: Really?

Andrew: Yea. It’s on Wikipedia so it’s got to be true. I’m zooming in a little too much.

Ryan: Of course.

Andrew: There it is. All right. The book is, “The Obstacle is the Way”. We covered a bunch of ideas from the book here in the session but obviously in a small session we can’t cover all. Follow-up, just grab it from anywhere. There it is. The Obstacle is the Way. Thank you so much for doing this session with me.

Ryan: Yea, of course. It was great.

Andrew: You bet. Thank you all for being a part of it. If you got anything of value, find a way to say thank you to Ryan. Ryan, what’s a good way for them to do that?

Ryan: You can just email me. It’s ryanholiday@gmail.com. It’s funny, you know, I did this for the growth hacking book and your readers really do email. It’s amazing. I’ve had some good conversations.

Andrew: You know what, you’re surprisingly easy to contact

Ryan: There’s worse things in the world than having people who like what you do email you and talk to you about it. And I think although obviously I’m very busy and have stuff going on, I think I’ve benefited from that relationship because it tells me what my readers and fans and my potential audience actually need, want and are struggling with. So that line of communication has been very beneficial and important to me.

Andrew: I tell people to do that all the time, not enough people take me up on that opportunity. I can’t tell you how many people I met that way. I’m about to, tomorrow, I’m going to go see Noah Kagan in a mansion in Napa that he rented for the week. He invited me to come by and say Hi, to hang out.

The only reason he and I connected was a few years ago I read his blog, I got something of value out of it and I sent him a note and as a result he and I became friends and we’ve known each other now for almost a decade.

Ryan: Yea, that’s how it works. We were talking about waiting for the perfect opportunity. No one is going to come force you and Noah to get to know each other. Very rarely is this unsolicited introduction going to flutter into your hands. You have to seize the offensive. In a very minor way, take some initiative, shoot someone an email and you never know what happens.

Andrew: You know I just realized actually, he thanked me. I commented on his site and he did something that no one had every done before, he sent me an email saying, “hey dude, saw the comment, thanks for writing on the site” which was unbelievable. So, of course then I stayed in touch with him and then I wrote a post or two on his site back then and we became friends.

Ryan: And you never know what people are going to go on to do. I think a lot of times people are very judgmental. They’re like, “This person’s a loser. I don’t know who they are. I don’t know what they’re doing”. You have a bunch of people that you emailed when they were just random people and then they went on to start this company, or do this thing.

Andrew: One great example is Mike Del Ponte. I got an email from Tim Ferris saying, “Hey, his stuff is really good. The Soma water pitcher that purifies water is beautiful, it’s really good, you might want to have him on.” I say, “yeah, let’s have him on.” I do a quick search and I realize, Mike emailed me back when he had a job working for someone who I interviewed. He said, “can you teach me this interviewing process, what do I do?” And I responded to him back then and he’s gone on to great things and one of those great things is building this company and he came on to do an interview about it. So yea I know what you mean.

Ryan: For sure.

Andrew: All right. Find a way to say, thank you. Really, don’t overwhelm people just find a way to say thank you. I’m going to do it right now. Ryan, thank you both for doing the session with me and my team said please don’t let Ryan go without saying thank you for helping us with Mixergy because you know so many great people that became interviewees here.

And I really appreciate the contribution that you’ve made to my personal mission here by introducing me to people who’ve come on to do interviews, courses and otherwise be a part of the community. Thank you.

Ryan: Awesome. It’s a pleasure.

Andrew: You bet. Thank you all for being a part of it. Bye guys.

DOWNLOAD TRANSCRIPT

Master Class:
How to sell to enterprise customers
(Even if you’re not a natural born seller)
Taught by Steli Efti of Close.io

Master Class: Enterprise Sales


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Transcript

Andrew: This session is about how to sell to enterprise customers. It’s led by Steli Efti. He is the founder of Close.io, CRM for real sales people. Steli’s company started out as Elastic Inc. There it is on your screen. A company that did sales for other customers, including, as you can see on the right side of your screen, Grasshopper. They took what they learned from selling for other companies, and they used it to build a CRM that really helps people close sales.Today he and I are going to be taking his knowledge and applying it towards entrepreneurs who are trying to get enterprise sales. My name is Andrew Warner. I’m the founder of Mixergy where proven founders, like Steli, teach. Steli, welcome.Steli: Hey, thanks for having me.Andrew: I just showed the two companies and the two products that you’re running right now, Close.io software, Elastic where you do sales as a service. You weren’t always especially well. In fact, you used to have a company called Super Cool School. And what was the problem there with enterprise sales, especially considering you feel to me like a natural born sales person? What happened there?

Steli: That’s a great question. I think eight years ago when I came from Europe to start my first technology venture, [??] Super Cool School, but the problem was not sales. It was not about a convincing people passionately that what we were doing was valuable and a little exciting. We even got really large organizations like Google, Intuit, and Oracle interested. The problem was not understanding how enterprise sales works and how large organizations are buying and implementing new products and technologies.

Ultimately, that lack of understanding and experience and expertise almost cost us the company. It cost me a lot of pain. It cost us over a year of time and resources and energy. People left the startup because of the failure of it. So it was a pretty pitiful experience.

Andrew: And we’re going to hear more details about the sales you got and almost got and what happened there, but you told me before we started you ended up with a lot of time and nothing to show for it, no revenue, no nothing. As a result of everything you learned though, you were able to actually use it to create this business, Close.io. Close.io, do you remember your first sale?

Steli: Yes, absolutely.

Andrew: How did you get that? I mean, we’re talking about finally, years in the making, you figured it out and you had a product to sell to enterprise. And what happened?

Steli: I think the first couple of customers that we got for Close.io were really organic. They were all clients of Elastic, people we were doing sales for. So people were asking us to buy the software internally for their sales team and resources. And then we got a lot of startups to look into products that we didn’t initially . . . We didn’t initially go to the enterprise right away. We were still not focused on them. Most of our customers were startups, SMBs and high growth technology companies.

I remember the very first larger company that approached us after just a few weeks after officially launched.

Andrew: Mm-hmm.

Steli: At first it’s really hard not to get excited, so we all got a little excited. We really liked that company, and then a few conversations into it they started coming up with those long lists of features and requests and started telling us that they wanted these special pricing and massive discounts and all these extra rules and things that we’d have to do for them to even consider buying our product. And we told them no. We told them, “Listen . . .

Andrew: You got a customer and you’re telling them no?

Steli: Well at that point we knew ourselves well enough. We knew the game well enough, and we knew how enterprise sales works well enough to know that we weren’t ready to make the concessions and the sacrifices they were asking for. So we were confidently able to say no to all of their requests and tell them, “Listen, ultimately we want to work with you, but today doesn’t seem to be the right time. So just keep in touch and in a year or two as we grow we might be able to kind of be able to give you everything you need to be able to purchase our product.

Andrew: And then what happened?

Steli: And then, you know, magically a few weeks later after we told them no, a credit card got processed and we got an email that says that they went ahead and bought a bunch of seats [??] anyways. It was a pretty surreal experience and people were high fiving each other in the office, and everybody was excited about telling a large company that has definitely more leverage than we do, telling them no on everything they asked us for. And still successfully selling them at the end because they really wanted the product.

Andrew: One of the reasons why I wanted us to talk about that client right off the bat is to show that you did have it now together enough that you could actually close a sale, the sale representing tens of thousands of dollars to you, right?

Steli: Yep.

Andrew: But, you did it without the compromises that, in the past, you were tempted to make. That in the past not only did you compromise, but it ended up costing you sales. We’re going to talk about how you got here and more importantly, how the person who is listening to us can take your experience and apply at least some of it if not every single part of it to help them close sales. And I created this list of all the big topics we’re going to be discussing.

The first one is, to hunt for contacts that are actually already related to you or related to the people who know you. You made this mistake a while back. You used a service that used to be called Jigsaw. Today it’s got the awkward name of Contact.Data.com. Do you remember the day when you said, all right it’s time for me to go get customers, I’ll go to Jigsaw? Why did you pick Jigsaw, by the way?

Steli: Yes. So, initially, the company back then was focused on end consumers. Until we got one, you know, very high up executive at Google to approach us, and say that wanted to purchase a software internally. And that’s what got us started with enterprise sales. And once we actually convinced ourselves that we should go the enterprise sales route, we felt, well, hell, let’s go and try and get a lot more enterprise clients and customers.

So how do we do that since we don’t have experience or a network or expertise in enterprise sales? And we hadn’t worked in large organizations before. Without, let’s go somewhere on line and buy a ton of names and contacts and just cold call or cold email them.

Andrew: Ya.

Steli: And back then Jigsaw offered the service and, I don’t know if they still do this, where you could upload all the contact information on a business card that you had and get a credit for it. And with that credit you could buy or get for free one business contact.

Andrew: Uh-huh.

Steli: Right? So what I did is took a bunch of friends, asked them to bring all the business cards that they had to my home. I bought up, you know, a bottle of Jameson and Coke and, you know, ordered some pizzas and for the entire weekend we were all sitting down on our laptops typing in contact information from the people that we had met and had business cards from to get credits so we could buy all these names to hopefully sell to.

Andrew: [laughs] So that’s how all those names get into Jigsaw.

Steli: Yep.

Andrew: Ok.

Steli: That’s how it used to be at least.

Andrew: You enter all those contact in?

Steli: Yep.

Andrew: As a result, you’re entitled to get names and phone numbers of people at big companies. You get those names and phone numbers. How many sales did you get as a result of them.

Steli: Zero.

Andrew: Zero.

Steli: So first of all, you have to like, back then, I think about 40 percent of all the names were outdated. Right? Because, I mean, the system didn’t know or didn’t care if the business card I’m typing in, if that’s from a person that left the company a few months or a few years ago even. So when we did the initial push we learned that a huge chunk right out of the bat was just bad data to begin with. So people weren’t working in these companies would get all these bounced, bounced emails back…

Andrew: Okay.

Steli:…that would tell us that this email address doesn’t exist anymore.

Andrew: We’re talking about, I think you told me maybe 40, 40 percent at the time.

Steli: Ya. Ya, at the time. I don’t know what it is today. I don’t even know how exactly the system works. If it’s still, like, back in the day you could either put in the work and get free credits. Or just pay for these names. I don’t know how they do it today, but back then at 40 percent of the contacts that we had put in were, like, just bad names, bad email addresses.

And the rest of them, you know, we had almost no open rates, and no response whatsoever. So we spent kind of a whole weekend getting the data, and then I think a bunch of days during the week to come up with the email and the subject line and…

Andrew: I see.

Steli:…and it just ended up … [??] …

Andrew: So the point you’re making is that even if you end up getting contacts, email addresses, and phone numbers of people who are real people. if you are a stranger, if you’re not anyone to them they’re not going to respond to you. And that was your experience. Did you get any sales from that Jamesons and pizza weekend? No, not one.

Steli: Not, not one, no.

Andrew: Okay.

Steli: … [??] …

Andrew: … [??] …

Steli: Oh, go ahead.

Andrew: I’m sorry. So instead, what you are advising us to do is go to friends and find out who, who they know that’s working in these companies.

Steli: Ya, I think that, that you should first focus on what I call low hanging fruit sales. Type of…

Andrew: Yep.

Steli: …sales, right? So, what’s your network? What’s your family, friends, colleagues, you know, ex-colleagues, whatever it is that you [??] network. What other people that you know, and where do they work and where do people work that they know, right? And see if you can get introductions and connections that are a little warmer. So that you can actually get in an easy entry and have somebody actually listen to you.

Andrew: Can’t I just do that by going to Linkedin and saying who are some of my potential customers and then who’s connected to them and then going to them and asking for an introduction?

Steli: I think that, that’s one way that may work. Although many people are not as active in making these referrals in Linkedin. Although there’s systems that you can learn to do that better. But, like, I would just, I would just keep it old school and just take a piece of paper or go on a whiteboard, write down some names of people that you know that work for large companies and just meet up with them.

Even if those companies are not ultimately the companies you want to sell to, just get their advice on how to sell to large organizations. Get their input.

Andrew: If they’re working at large organizations, ask them for their advice.

Steli: Yes. Yeah. And then if they like what you do, you can always ask them if they know somebody else in one of these larger companies that you want to get to and sell to and get a referral to there.

Andrew: Gotcha. All right. And then those referrals will be warmer referrals, and that’s where our first customers come from.

Steli: Yeah.

Andrew: Another thing is that you were telling me before you started that if we were going to do cold calls, we shouldn’t do them into the big enterprises, even into the Googles of the world. Instead, where did you go when you were doing cold calls?

Steli: Yeah, so I’m a fan of cold calling. I think it can be a really effective tool, both to learn about your market, but also to grow your business.

Andrew: Mm-hmm.

Steli: But I think that typically cold calling, one of the biggest wasteful parts of it is that you’re going to be dialing a lot of numbers, listening to a lot of dial tones and voice mails, and actually not reaching a lot of people. Like, typically, if you reach 10 to 15% of all the people that you call . . .

Andrew: Yup.

Steli: . . . you’re kind of right on par. So you call 100 people, you only reach ten. And out of those ten, maybe just one or two are actually decision makers. In the enterprise, the numbers are even worse. You almost never just cold call and get the VP of Marketing to pick up the phone. Right?

So what’s going to end up happening is you’re going to have to waste an enormous amount of time to navigate within the organization and the enterprise to find the right person. And most of the time it’s just not going to work out. So I wouldn’t advise anybody to try to cold call into the Fortune 500.

But what you can do and what’s advisable in most cases as a start-up or an entrepreneur is look for, kind of, maybe one step below the largest enterprise you could think of wanting to buy your product. And see if you can go and get started and get some momentum with S&Bs [SP] or larger organizations that are not quite the biggest companies in the world, and see if you can cold call the organizations that are, you know, less than 200 or 300 people where it’s going to be easier for you to find somebody who’s the right decision maker and get a few smaller wins . . .

Andrew: Mm-hmm.

Steli: . . . to build up momentum until you actually go to these really large organizations.

Andrew: On your site, Elastic, and I can see here on the right side selective clients, Dr. Chrono [SP], Grasshopper, The Muse. These are the size companies that you’re talking about.

Steli: So yes, and to be totally frank, our website, we haven’t updated up it in years with Elastic Sales. We have such a tremendous of inbound interest that we are not marketing that service at all. It’s all word of mouth. But those are three of our past clients and customers.

And for Elastic, we’ve been doing sales only for technology companies and mostly for start-ups that have raised Series A or Series B. So it’s well capitalized businesses that are on the growth path, but they’re still start- ups. We didn’t do sales for Coca-Cola or any other kind of Fortune 500 organization.

Andrew: Okay. All right. And to be clear, what Elastic does is make calls on behalf of those companies to help them get new sales. That’s what your business does.

Steli: Yeah.

Andrew: Elastic. All right. On to the next one. We’ve got to keep on moving. The next point is to create your minimum viable pitch. Let me see if I could bring up, actually, first of all, what is a minimum viable pitch, and then I’ll bring up a slide that you used at a presentation recently.

Steli: Yeah. I think that sales can really follow similar principles than product development. Right? We talked about lean start-up a lot. We’re talking about customer development. And sales is really similar in that you don’t have to have all the answers to create the best presentations , invest hours of hours of putting up together the perfect pitches before you go out into the real world . . .

Andrew: Mm-hmm.

Steli: . . . where all those dreams and pictures are going to be destroyed. You should come up with the simplest first version of explaining what your product is. And then go out in the real world and develop and iterate and improve based on the conversations that you have with real potential customers or real potential users of whatever your product and service is. So the minimum viable pitch, the simplest version of a pitch that you can go out to communicate with the world.

Andrew: One example of how you did this is a company that you pitched, and they said, well, if you exist, we would die. Which business were you pitching and why would they die if that business existed?

Steli: So that was actually Elastic. So when we had the idea for Elastic, we had the idea on a Monday morning or Tuesday morning. And the next thing, we started cold calling a bunch of start-ups that had raised a Series A that we didn’t personally know.

And we had no website up. We had no presentation. We had no logo. No nothing. We thought if we can cold call startups, pitch them on this idea, and get their feedback, we’ll learn if this is a viable idea or not, if we should pursue it. And one of the earliest companies that we talked to, we told them about this idea of kind of a scalable sales force for technology companies,

And they said hey, if this existed it would be a true game changer for our business. But we were afraid. We cannot believe that this exists. But would it actually perform well? So they loved the idea but the trust was just too big of an issue for them to move forward.

Andrew: I see it’s not that they were worried that you could put them out of business. It’s just that they said this would be great, but gotcha. So, trust you realized was an issue and then how do you take that to improve on what you call your minimum viable pitch?

Steli: Yes, with that particular customer, what happen was, they give all these buying signals saying we really need this and we have a real problem sales side and scaling our sales force. But we are really afraid of giving away control of our sales process. Have you interact with our customers we don’t believe that you can do a good job.

Our product is really complex and we don’t believe you could actually learn the product well enough. They have all these concerns and all these fears. And at first what we did, is just kept following up, kept scheduling another call in, kept trying to convince them with words. Until we realized that probably that isn’t really going to work ultimately we have to convince them with actions.

So what we told them was, listen two big questions for you guys. Number one, how do you like the way we have been selling to you so far? Is the way we represented our own business to you. Did you like that? Our style, our follow up and they loved it. And then secondly, what we told them was, we can talk about this and argue it forever but we will never really know until we know.

So why don’t we do this, why don’t you guys give us seven days for us to prepare to learn everything we can about your product. You don’t have to do any training we are just going to learn all of this on our own. And in a week we will call you, the founders, and we will sell you and pitch you on your own product and you should ask us the toughest questions that you can ever think of.

If we can sell you we probably going to be able to sell everybody else. Let that pitch speak for itself. We called them a week later and ultimately closed with them.

Andrew: I see. When you are saying start with the minimal viable pitch it’s to see where your potential client’s issues are so you can integrate their concerns into your pitch. As opposed to saying, you know what, they are probably worried it’s going to cost too much so let’s lower our prices. They probably worried that we won’t be able to call internationally.

Let’s make sure we tell them we can call internationally. You want to understand what their issues are. In your case, you discovered that their issues were trust and they didn’t think you could understand their full product. Alright, onto the, actually this is a slide from one of your presentations about the minimal viable pitch. What are we looking at up here?

Steli: So just a simple framework or structure for people to get started with and if you follow this structure you should be able to get going really quickly. So, I will go through the points really quick. Number one, when you pitch what your product and service does just explain what it is you do. Don’t explain the big vision and how it’s going to change the world. You couldn’t explain to somebody Google and saying well what are you guys doing.

We are going to eventually organize the world’s information and make it universally acceptable to everybody. What does that mean even? There is no image that can be created in the potential buyers mind or users mind. If you talk in abstract vision, kind of big marketing, or start up speak. So you have to explain exactly what you do. We have a website, there’s a box in that website that you can type in a name or certain number of words. If you are looking for something on the World Wide Web and we will bring to you the most relevant pieces.

Andrew: The first aspect of a minimal viable pitch is a very concrete explanation of what the product does today.

Steli: Exactly.

Andrew: Not abstract. Not in the future. Not a hundred years when things are perfect. Today, right now. Okay. Demonstrate Value. What do you mean by that?

Steli: Once people understand what it is you actually do, what it really is that you do, you should tell them how that’s going to deliver value to them. Don’t talk about all the features and technologies behind it. Simply talk about the value of what you do, that’s going to be created in their business. So how is this going to cut cost, increase revenue, save them time, and give them a real business value. If you can’t demonstrate that by examples, if not tell them in some math or number why your product is actually going to be valuable to them.

Andrew: Alright, on to the next. Create credibility. How do you do that when you are starting out?

Steli: That is the tough part. You do it in whatever way possible. So, if you already have a brand it’s easy but if you don’t maybe you have a few early customers. Then you have to point to those customers and their credibility. If you don’t and this is your enterprise find you ever talk to see if there is other ways that you can create credibility by either talking about your investors or your advisors. Or talk about the school you went to or whatever.

Anybody you know in your network that can lend some credibility back to you. You need to find ways to associate yourself with things that people are familiar so you increase your credibility in the market.

Andrew: Got it. Build understanding and rapport.

Steli: Well, now once people know what you do, once they know why it’s valuable, and once they trust you a little bit. So everything you said is not in question, but they believe you. Now what you have to do is actually start understanding them. Who are they, as a company? What are their objectives? What are their challenges and problems? And really ask a lot of questions, to discover who the potential buyer is, and why they should care about your product and how it relates to their problems.

And once you really have arrived at a level of understanding, you can build rapport, in a sense of giving feedback to them. And explaining to them how your product is going to address those challenges, in a way that makes them feel comfortable, and makes them feel, like, they’re really understood by you. And that your product really relates to their issues that they have, so they should care.

Andrew: Manage objections. How do you know how to deal with the objections, so early on?

Steli: Yeah. So the first couple of conversations that you’re going to have, you’re not necessarily going to know all the objection that people are going to bring up, but you should start with a few of them, that you can assume. So some things are, like, “I wouldn’t have the time right now. We don’t have the money. How is this secure?” Some questions that people will just have.

And you should think those questions through, and maybe write down, in one or two paragraphs, how you would address that question. So that when people ask you that question, you don’t have to compute the answer in real time, which usually means you’re going to speak for way longer than you should. And you’re not going to seem that confident. But then, since you’ve spent a little bit of time preparing for some of the most basic questions, you’re able to answer these questions, while keeping eye contact. And doing that in a concise way, in one or two sentences.

Andrew: What’s the big objection for Close.io?

Steli: For Close.io, I think that most people ask about our price. Why is it not the cheapest possible sales . . .

Andrew: And how do you . . .

Steli: . . . in the market?

Andrew: . . . respond to that?

Steli: I think that, what we usually do, when we respond, is we ask them what a deal is worth to them. And once we understand that if they close a deal, it’s worth to them, a few thousand dollars, then we tell them about how most of our customers, once they use Close.io, they start closing more deals. So we talk about the value our software’s creating, and how the value will vastly surpass the cost. And we talk about building an amazing product. And offering amazing service and support, and training. And how we’re a premium product . . .

Andrew: I see.

Steli: . . . that gives premium value to the market.

Andrew: Yeah, because $60 a month, per user, does seem high to people who are expecting to pay, maybe, 40 bucks a month, and get five users.

Steli: Right.

Andrew: So you understand their big objection, and you have anticipated it. And as a result, you’ve been able to answer it. Onto the final part of the pitch, ask for the close.

Steli: Yeah, that seems so obvious. But it’s still painful, how many times it doesn’t happen. So many times, especially entrepreneurs, will go through the entire presentation. And then they never thought about how to end the presentation, actually ask for the close. “All right. Are you guys ready to buy? Do you have a credit card at hand? Do you want to buy this product today.” Lots and lots of times, I’ll listen to [???] pitch. And they will not even ask for the close, at the end of the presentation, the most essential thing. But still, people forget about it.

Andrew: All right. Onto the next big point here, because there’s still some issues. You’re suggesting that we map out a realistic timeline. Going back to the previous company Supercool School, there it is, right there. You actually got a major customer. You got these guys, right here. There’s the TAB Oracle.

Steli: Yeah.

Andrew: Cool. Great! But what’s the problem?

Steli: Yeah, this is the story of how we almost closed Google into it, and Oracle, [laughs] as our first three customers.

Andrew: At Super Cool School, right?

Steli: At Super Cool School.

Andrew: Okay.

Steli: Exactly. That was the company, we had just arrived in the U.S., eight years ago. We weren’t [???] consumer startup. But then we got approached by Senior Executives of Google, that wanted to use our product internally, for their Engineering Education.

Andrew: Mm-hmm.

Steli: And we got really excited by that, and thought, “You know what? Everybody’s telling us enterprise sales is hard. Let’s test the waters, and try to talk to a bunch of large technology companies, and see if there’s a market for what we do.” And the very first three conversations that we had, Google, Intuit, and Oracle, all three loved it.

So we were high-fiving ourselves, thinking, “We’re the smartest people in Silicon Valley. Enterprise sales is easy! What are all these people talking about?” And we were two people, a two person startup, with almost no capital.

Andrew: Mm-hmm.

Steli: So the worst possible situation to sell.

Andrew: I’m sorry to interrupt.

Steli: Yeah.

Andrew: But I think that Oracle story is going to be best for this section. And the Google story’s going to be better for talking about getting a customer to pay and use it.

Steli: All right.

Andrew: Oracle, where you had it.

Steli: Yeah.

Andrew: Where you basically were closing it.

Steli: So here’s what happened with Oracle, is we didn’t understand the process of what would all the steps be, that it would take us, to actually close them.

Andrew: Mm-hmm.

Steli: So we talked to the Senior Vice President, to one of the SVP’s at the time, and that person loved it. And then we got referred down to the VP, and that person loved it. And then we got referred down to the director, and that person loved it. And then all the way down to a manager. That person loved it. So we had meetings, after meetings, after meetings. And we were always thinking, “We’re just a few weeks away from closing this deal.”

It took us nine months to go through all those . . . nine months of countless presentations, countless meetings, countless hours of conference calls with countless people involved. Nine to ten months involved in that deal just before we thought we were ready to actually close, the seat of Vice President leaves Oracle to become CEO at a different company and takes away the entire org with him. So we had no one left at Oracle to talk to and the deal fell through. Through all that work.

Andrew: If you could have done that over, what would you do to solve it? You find that you went to the top and that person kept sending you down. You had all the credibility. It’s not like someone saying their boss won’t let them. It seems like everything is great, so if you could do things over what would you do differently?

Steli: Two things. Number one: I would have understood the process it would have taken before hand. We thought this deal would close after a month. It took us nine to ten months to then not close. Just to have a realistic timeline and asking the question after that first meeting. What will it take for you guys to actually become a customer? Then have them guide you through the entire process and then understand the kind of timeline.

Once you understand the timeline then you can actually make a reasonable decision. If you’re willing and ready at that point to embark on that kind of a long journey to close a deal. The second thing is really understanding that enterprises sales people leave [??]. These real organizations and departments change so even if you are progressing well during that timeline your deal might just get lost in the middle through one of these re-orgs or somebody leaving.

Andrew: You sell one person and that person loves it and can’t wait to get started. Then he gets promoted or he moves on to a different company and your champion is gone.

Steli: Exactly. When you understand that, there’s really nothing that you can do about that. You can’t stop people from moving on in their lives. When you understand that, you understand that enterprise sails is something that a two person startup with three deals in the pipeline has a really low chance. You have to have a lot of capital and a lot of time and resources to invest to have all these deals that are even promising. Some of them even break away and still make enough money and close enough deals to make it work for you.

Andrew: I see. Today you are an entrepreneur who advises start-ups and other entrepreneurs about how to close sales with enterprise customers. One of the things you tell them to do is when they have a client who is interested, before they continue with the deal, to ask what the sales process is going to look like. Who needs to get the buy-in, how is it going to work, and have a clear understanding.

Steli: Absolutely. Have them paint you a picture and paint a road map all the way from where you are to where you want to be. Don’t stop until you get there. Sometimes people ask what the next step is. We’re going to do X, Y, and Z. Then ask what’s going to happen then. Then you’re going to have to go through legal. They stop asking after that point and just assume that then they are going to be a customer.

Andrew: They go through legal then they’re all set. Don’t assume that.

Steli: Don’t assume. Keep asking until they say, ‘Yes, and then we will pay you money for your product.’ Then you actually have the road map.

Andrew: On to the next big point. Let’s bring up the board. You want to get a company to pay and use it. You actually had a business offer . . . I don’t even know if we should name the company. Actually, I don’t even think you gave it to me. I’m looking at my notes here. They were Ok. You sold them but you made a mistake of not . . . Actually, wasn’t it that you didn’t ask them to pay. What did you do with these guys?

Steli: I’m a huge believer in asking for money. Especially when you sell to businesses and even more so when you sell to the Enterprise. You can’t give away things for free because then that’s what the perceived value of those services and products are. Nothing. You want to ask for money. We knew that but we still made the mistake. This is a mistake that lots of founders do. You lack confidence. You’re trying to do things to minimize potential risk to other people so that the deal will ultimately close.

What we were doing was we told them that they were going to have to pay for this even when they are the first customer. But we were going to offer the payment on a pay-as-you-go on a daily basis to make it really risk free. They can stop at any point. The problem with that is in their case was that they said yes. They were all gung ho about buying the product but they didn’t really prepare for adopting our service. We didn’t prepare them for adopting our service either.

Then they started paying on a Monday and a week later we keep calling them, keep e-mailing them to gives us all that material to get started with the stuff that we needed to do. They couldn’t get all the material and all the processes to us to enable us to start doing work for them. After a week or so their CEO finally realized that they might not have the time right now. They were over worked and they had all these other projects going on. They would just put us on hold and do this at a different point.

What we did with the next company was equally risk-free, but it was much smaller from a B2B sales perspective.

Andrew: And just to be clear, what you’re saying to the first customer is, “Only pay us per day. You’re not obligated to stick with us for any number of days.” And because there was no obligation, when other things came up, they put you off. Other things seem more important, they put you off. Meanwhile, after a few days they realize, we’re paying these guys and we’re not getting anything in return. Let’s close, let’s get out of this deal. And so you lost it even after you closed the sale. All right? And then what you did next time…

Steli: What we did next time is a similar risk-free model, but a lot smarter from a kind of overall investment perspective. So, the next customer that we closed, we told them, “Listen, we’re going to make this risk-free. You’re going to invest in a three-month pilot, right, so you’re going to pay up front a large chunk of money.

But, if at any point during those three months you feel like you’re not getting your money’s worth, we’re going to refund you all the money. Right? But this is going to be a serious pilot, it’s going to take some serious time for us to get started, to really deliver the value you need. And you’re going to have to invest both the money and the time commitment for us to accomplish these big objectives and goals.” So they pay kind of a big deposit, and had the power to refund. But just because of that initial investment, they took the whole project a lot more seriously and they ultimately stayed with us for 18 months after that.

Andrew: Because they put more money up front, they felt more committed to the project.

Steli: Yes, it became a much more important project right up front.

Andrew: And I can see why, early on, you would have been afraid to ask for a big commitment. I found this before we started. This is a blog post by Robert Scoble. You said that you were in the U.S. how long?

Steli: That was my second day in the U.S.

Andrew: Second day in the U.S, he does this post about you, Meet the Learning Lunatic. I scroll down to the bottom, and I found this one little section. Let me just highlight that section right here. There it is: Robert Scoble in 2007 saying, yes, he’s on Twitter, which today of course, everyone’s on Twitter. And he says, “He’s looking to meet interesting people in San Francisco and Silicon Valley. He also is paying $100 a night to stay in a hotel and he’s hoping to find cheaper housing so he can stay in California a little longer on his funds. If you are looking for a short- term roommate, drop him a line.”

And the reason that I highlighted that is because when you’re starting, you don’t have infinite money. You’re not fully settled in. When a customer comes to you and says, “All right, I’ll give you a shot,” you’re tempted to say, “All right, I’ll take whatever offer, whatever deals you give me.” When they say, “I’m not so sure,” you’re tempted to say, “All right. I’ll do it for free.” And what you’re telling us is, if they’re doing it for free, or even for low-risk, they’re not going to be committed enough, and as a result all this hard work that you put in is gone. What a time, 2007, huh?

Steli: Yes, 2007, it’s been a wild roller coaster ride. But you’re hitting the nail on the head. Like when you’re just starting out, you’re aware that you’re nobody, and it shows in the way that you are willing to do whatever they ask you to do, to get the deal done. Unfortunately, that perception of this person or this company is going to do whatever we want from them is lowering the perception of the value of your business and service that you’re offering, so much that the deal’s not going through usually, or not being taken really seriously.

So you need to mentally prepare yourself, to believe in yourself enough, to present as if you already have thousands of customers. And you’re going to work with them, and you’re going to give them some chances to get their money back if they’re unhappy. But they have to invest and assume success. And you have to assume success.

Andrew: All right. On to the next point. Map out what a successful adoption looks like. This is the point where I thought we could illustrate with the Google example. What happened with Google and adoption?

Steli: Yes, so again, back in 2007, we had no clue about enterprise sales. We get a senior executive at Google to be excited. She actually even joined our advisory board, so she becomes involved with our company.

Andrew: Wow.

Steli: And we think, ‘Wow, this is going to be amazing.’ And back in the day, we thought, ‘OK, we have this product, and Google is this amazing organization. They surely will know how to use it and to implement this. All we have to do is, we deliver the product and we deliver the pitch, and that’s basically where the job ends.

So we started a pilot at Google. And what happened is that that steering executive pushed the project down to a project manager who was then responsible to make the implementation, tell internal users about it, keep track of KPI’s and manage the entire project during the period of the pilot. We, not knowing what we were doing, never really worked with that person closely enough, never really coached that person, and didn’t manage the process.

So what happened was that person was not really bought into the vision and mission of the product. She was so busy with other things. For her this was a lot more work and a lot more risk. So she didn’t do an amazing job implementing it, didn’t really care about the project, ultimately. And did a really poor implementation of it, and ultimately, a few weeks into the pilot, she recommended that we should discontinue the pilot, because it’s not going that well. “And we lost . . .

Andrew: Even though she was an adviser.

Steli: No, no. Not the project manager adviser to the director, right.

Andrew: Oh, I see. And the directors the person who said, hey, we should . . . I see. So, your point is it’s not enough to just get the sale and close it when you’re talking about a big company. They buy things it could get completely lost and you’ve lost your sale. You have to make sure that they adopt it within the organization. And if you could do that over again with Super Cool School what would you do?

Steli: Yeah, that’s a great question. So, three things. After convincing top, kind of, senior executive to open the doors for you. First, you want to understand what are all the stake holders involved and make sure that you understand what their objectives are and their goals, and try to cater to all of them.

And then second, once you get introduced to who you ultimately your project manager, or your champion internal organization is going to be you need focus reselling that person on the vision of why it’s going to benefit their career. Why this is going to be an important project to their life and once you’ve resold them on that you need to become their best friend, and their best support, and actually implementing your product successfully.

So you need to kind of give all the material. Tell them how to do the pilot internally, how to communicate to the internal team. What goals and keep your eyes to set for this. You need to have weekly calls to check on how things are going and support with issues and problems that they’re having. You just need to do everything you can to make that champion succeed in implementing your product in the organization.

Because if enterprise sells as you said, just closing them and getting them an initial commitment is not enough. You need to make sure that it gets successfully implemented so, they actually stay a long term customer and become a referral.

Andrew: Okay. I should have said this earlier in the session the Super Cool School was an online education platform. You allowed other companies and other individuals to use it to teach. The session isn’t about Super Cool School, which is why I didn’t. It’s about the sales that you almost made it Super Cool School.

Look at you, though. A guy who comes to the U.S. A few days you get posts on Robert Scoble’s blog, soon after you get in front of Oracle. You get in front of Google and so, you actually made all those first steps work, but it wasn’t enough. You actually had to take people through the full sales process and get them to adopt.

All right. So you’re even telling me adoption is not enough. Let’s go on to the final point which is make referrals and references a part of the deal. Give me an example of one deal that you got a referral from so that I could understand where in the sales process you were asking for the referral.

Steli: So today when we close a large customer or client we make the referral part of the entire deal. So, we’ll tell people, once both sides are sure that it’s a good fit, we could actually work really well together, we’ll tell them listen, we’re really not spending a big amount of effort and energy marketing and PR and all these things, and trying to acquire more and more customers. Most of our customers come through referrals.

Because we invest all our time in technology and servicing and training you and making as successful as possible. So then the way we grow is our happy and successful customers get those more referrals to other happy and successful customers. Does that in general sound fair to you? Is that a fair arrangement?

And nobody says, no. Nobody says, no. I want you to waste all your time on PR and marketing and no time in servicing me and making the technology better. So, people say, yes. If I’m happy I’m going to make referrals for you.

Andrew: I see.

Steli: The important thing is that once you close the deal you don’t have to wait forever for that customer to be a customer of yours for years, and years, and years before you can ask for referrals. Once they actually sign the check, slide through the credit card, or whatever that is. Once they actually convert to a customer you ask them to make referrals.

And most startups and founders do a really weak job there. They’ll ask for a referral and usually the response you’ll get is that people will say, well, it’s a good question. Let me think about that and get back to you. Most people are not comfortable pushing back on that. They’ll just say, yeah sure. Whenever you can think of anybody we appreciate it.

Because they don’t want to take a success they just had making this person a customer and turning it sour by asking for a lot more. In our experience you want to push just one more little time. You want to tell these people that you appreciate them thinking about it and giving you a lot more referrals later on, but right now let’s just get started with one person you could think of that would benefit from knowing we exist.

Andrew: I see.

Steli: If you push you usually will get a few more referrals and there’s a few more steps which you can do to push this further.

Andrew: So, let them know earlier on that at the end of the sales process, after you’ve gotten them going that you’re going to ask them for a referral?

Steli: Yup.

Andrew: And do it using the question that you phrased earlier so that they’re not saying no. So, that they have, what’s the word I’m looking for? It’s not that you’re pushing them to say yes, it’s just that you’re making it a natural yes. “Is it okay if I come back to you after we focus on the sales process, after we focus on getting started? Is it okay if we come back to you and ask you for a referral?” They say yes.

You come back after they’re all set up and you ask them for a referral on your site, on your blog. Let me show the blog right here. We’re going to link to it. You’ve what you call the B2B referral sales system. And I’m going to skip right down to the center section where you have the referral sales script, where you show people what to say, and especially how to deal with the no that often comes when you ask a client for a referral. The no comes because, not that they don’t want to give you a referral. It’s just that they can’t think of anyone. You’re suggesting that we push back on it.

Steli: I suggest that you push back on it and ask for. . . Just thinking of one person right now to get us started. Six out of ten people will say, “No, I really actually need to think about that”. Fair enough, right? And you move on with your life. But four out of 10 people, in my experience, just by pushing one more time from your side, will actually think and then tell you. Give you a name. Give you a referral to get you going.

The really crucial part is once you actually get connected with that referral and you talk with them and you go through all the steps in the sales process, if you actually convert that referral into a new customer, you have to ask that new customer to get back to the original referrent and thank them for the introduction. You ask them, “Who’s responsible for us connecting and you buying our solution?”

They’ll think, “Well, Bob made the introduction. Cool. Can you do me a favor and send Bob a quick email thanking him for that introduction that was valuable to you?” The moment Bob. . .

Andrew: No, not from me the person who’s selling, but from Bob, from my customer . . .

Steli: Exactly. Absolutely.

Andrew: . . . back to the first customer that referred them. That way they feel good about having made the referral.

Steli: Exactly. The moment Bob gets an email that says, “Hey, thank you so much for introducing me to Steli. We just bought their solution. This is amazing for our business.”

Bob will start thinking, “Well, hell, who else do I know that I can introduce to Steli?” Then it becomes a real referral machine, a real growth engine to your business.

Andrew: All of this stuff you learned. . . my second monitor is right there . . . I should just show it. Here it is. All this you learned from doing sales for many other companies at elasticsales.com. The software you created to allow other people to shepherd their employees through the sales process is called Close.io. One of the things I like about Close.io is most software, most CRM, requires a sales person to go make a phone call. Log it in. Send out an email. Log it in. Do something. Log it in. People always forget.

The sales manager, the CEO, or other salespeople will go back and say, “Why didn’t anyone say that we emailed them yesterday? I just emailed them today. Why don’t you keep track of where we are so that we know where we are in the sales process? So that we know how quickly we’re likely to close a sale?” You don’t do that. You, instead, at Close.io, automatically do it for salespeople. When they make a call, that gets logged. When they send an email that gets logged. Your mission is no data entry, right?

Steli: Absolutely. We want to empower salespeople, entrepreneurs, and start- ups to close more deals and make more sales. To focus on the one thing that sales is at its core, which is communication. Have the software take care of the manual labor of data entry and get all the data in the system, and get it accurately but get it done by software.

Salespeople can focus on communicating to customers and prospects and the software can take care of all the keeping track of all the data and communication and email and calls. With that, typically when new companies start using close.io they see an increase of communication. When you increase the communication you increase the number of deals that you close.

Andrew: I see. And if anyone is saying that the price looks a little too high, what’s the deal worth to you?

Steli: We tell them, yes, it’s a high price because the value we offer you is really high. We would ask companies what an additional deal a month is worth to you? Most of our customers would tell us is multiple hundreds or multiple thousands of dollars. Paying a few hundred dollars to get a few thousand dollars in return in terms of more deals closed is worth it to most of our customers.

Andrew: Cool. One of the reasons that I asked you come on here and do this is because people on Mixergy heard your interview on Mixergy about how you launched these businesses after the struggle. You heard from them directly and you said, “Yes, I will come and do this session with you.” The reason I’m saying it is to let you and the audience know that my guests do appreciate hearing from you. The impact that you have leads to things like a session like this one.

If you got anything of value go check out Close.io, that’s the URL, and get to know the product and find a way to say thank you to Steli. Find a way to connect with him. I’m going to do it right now, but I want you to know you should never be someone who just sits back on the couch and takes life in. You have to go. If there’s anything that you got out of it. If there’s anything that draws you to it. You have to go in. You have to send out the note. You have to be a part of the lives of the people you admire.

Steli, thank you so much for doing this session with me.

Steli: Thanks so much for having me. Last time was awesome. I’m glad that we’re able to talk even more enterprise sales this time around.

If people want to reach out to me, you can just email me at steli@close.io. If you need help, advice or just want to reach out and say hi, I’m always excited to hear from people.

Andrew: Thank you for being such an important part of the Mixergy community, Steli. Thank you all for being a part of this and watching this program and using it and coming back and telling Steli how you did, and me. Bye, everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to use cold emails
(That make sales 90% of the time)
Taught by Bryan Kreuzberger of BreakthroughEmail.com

Master Class: Cold Emailing


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Transcript

Andrew: This session is about how to use email, cold email, to make sales. It’s led by Bryan Kreuzberger, founder for Breakthrough Email.Bryan: [laughing] You nailed that!Andrew: You know what, I’m laughing because I mispronounced it earlier even though I’ve got the pronunciation up on my screen and I wanted to make sure not to make the same mistake twice. Let me say it again, it’s led by Bryan Kreuzberger, he is the founder of Breakthrough Email, which teaches you how to get any meeting using cold email.He’s done over $20 million of new business from clients which include Bank of America, Home Depot, and MasterCard, and more importantly, his students, people who’ve- businesses who’ve learned from him, have done over $30 million in revenue over the past 18 months. So he’s done it himself, he’s taught others how to do it.

I’ve invited him here because of emails like this one that I got form a member here on Mixergy. This is Mikai[SP] who is saying would be super, super excited if you could interview a person who has had a ton of success in sales for example how to locate people’s contact information, email addresses so that we as the Mixergy community can reach out and close those sales. That’s why I put this together. My name is Andrew Warner. I’m the founder of Mixergy. I’ll help lead this. Bryan, thank you so much for doing this session with me.

Bryan: Yeah, thanks for having me. I’m pumped to be here.

Andrew: You know this issue that Makai, my member, and many others here at Mixergy have brought up is one that you relate to, because as you told me before we started, there was a time when you went through this. You were selling and – here let me bring up our cameras. You were selling in New York City, selling directly to agencies, and, do you remember what happened?

Bryan: Yeah, so I started off always cold calling, and I — sorry I’m just looking at my computer.

Andrew: Uh huh.

Bryan: I was never, like I never had meetings. I had no leads, I just needed to meet with these clients in sales, and I would call into these agencies, or I would email into the agency. And I would get a meeting with them and about nine months later I was still in advertising. And nine months later I would get this email back and they have an RFP, they want me to submit on this request for proposal.

Andrew: Sounds like success! You are reaching out, they finally are saying yes.

Bryan: Yeah, it’s great. You know, someone’s actually going to buy. And so 18 hours to do it, it’s going to take five hours of work, so we scramble to do it, and they submit on a different plan. So I get this email, “Hey Bryan, thanks so much for submitting, we’re not going to move forward.” So that happens once. And then it happens again, like the next month. And then a third time it happens, for another client.

And this is after like nine months of taking these people out to lunch, spending a thousand dollars on them at lunch, their whole team. And you get this whole last, which you’re stoked to do, because there’s a chance you’re actually going to get the deal. So I get the email and then I email the guy back, and was like, “Hey, can we talk for a couple of minutes,” because I’m okay if I don’t win the deal, but I want to know why because it’s something I probably didn’t do before. And I said, “Did you submit our plan?”

A plan is all these different vendors, and he’s like, “Yeah we submitted a plan.” “Okay, did the client see what it is we’re doing?” “Well, no the client never saw it.” Why am I jumping through these hoops for these guys that aren’t even going to present what it is that we do to the end client. And that was the last agency I ever called on. Because what I realized was that I was in the wrong room with the wrong people.

Now, they could say no to me, but they couldn’t say yes to me. And there’s a specific question you have to ask in a meeting to find out if you’re talking to the decision maker. But what I realized from the very, very, very, very beginning was, who do you want to reach and who are you going to to write to? If you get that wrong, it doesn’t matter how great you are at your demo or closing or pitching or asking questions. You’re not setting yourself up for success nine months down the road.

Andrew: All right, and we’re going to get into who the right people are. But I also should acknowledge that you at least got further than most people did in that sense that you actually got in the room. You actually found the email address. You actually found what to say to them to get that conversation.

So I want to understand how you did that and I also want in this session to cover what you should have done to close the sale after putting in all that effort. I should say that this was in the early part of your career. Later on, you actually got so good that you told me before we started recording that you’re so good that you could show up late. Why was showing up late such an indication of success?

Bryan: So I’m looking away, thinking. It was like the freedom to do whatever I wanted. As a seller, the thing that I was attracted to was making more money based on how I worked, right? So, it was the easiest way for me to…

Andrew: Yeah, that looks good right there.

Bryan: You like the tie? I got dressed up for you guys today.

Andrew: I like the tie, yes. So, the easiest way to…

Bryan: To have like freedom and autonomy to do whatever I wanted. So, if I… And make more money. If I worked harder, if I worked smarter I’d make more in commissions versus it’s just the time-based income, I don’t have any control over how much I’m going to make because I was in my 20s and I wanted to earn a lot of money.

Andrew: Okay, all right. So, you say, you went from pounding the pavement and not getting any sales and actually getting jerked around for a long time to suddenly being so good at it that you can close sales with so little effort that you actually had free time for yourself, the ability to show up late, the confidence that knowing that even if you do show up late you can still close the sales and bring in predictable revenue.

I want to learn how you did this. We — you and I and the team here at Mixergy isolated these key tactics, these key approaches for doing it right and it all starts with asking yourself, as you said before, “Which company do you want to reach?” Right?

Bryan: Yeah. So, this is the process. We’re going to walk through it. Most people, they want what subject line should I write? How do I find the email address? You know, can you give me a template? It will cover all that, but the first step that we talked about is, who’s the right company for you to reach and if you get that right, you’re going to have a lot more success later on in actually closing the deal and making it a much larger deal. So, the challenge I had was now that I’m teaching this to people, how can they get the most impact with the least amount of work because not all mediums are created equal, right? As we just talked about, right? Not all clients are created equal. So, what I… So, there’s a gentleman out in Phoenix and his company and he wanted to do … Gosh, what did he want to do?

Andrew: Actually…

Bryan: Go ahead.

Andrew: Maybe we can talk about this example. You closed this company, Western Union. What were you selling to Western Union? What were you selling to Western Union?

Bryan: So, for Western Union I was selling essentially voice audio ads on international calling cards. Right? You know, something really sexy.

Andrew: Okay, so people were buying international calling cards and you were selling advertising and you said, Western Union would be good. But frankly, lots of companies could be good. Why was Western Union the right company for that?

Bryan: So, it’s finding the right product fit, it’s finding the right fit for your product. That’s more important than just getting in with just anybody. If you’re a startup, you’re going to throw like spaghetti at the wall in some level because you don’t know who’s going to really resonate with what you have, but for us it’s like we had international calling cards.

People in the U.S. calling internationally, and I met with Pepsi and I met McDonalds, and I met with all these companies and they’re, you know, they can put their money anywhere and they liked it. They kind of shrugged their shoulders and I’m like, I need to find somebody who really cares, who really needs this. And so I wrote to Western Union, flew out to Denver, in the meeting with these guys and we’re talking about, Hey listen, these people are calling the people they send money to.

We can segment based… then they kind of walk through like what some of the challenges that their business had. And at the time they could buy Hispanic newspapers or networks or whatever, but they really wanted a segment based on, I want to reach Argentinians in the U.S.. I want to reach people from the Dominican Republic in New York City, and other than buying a billboard, that was really difficult for them to do.

Andrew: I see.

Bryan: So, the guy turned to me in the meeting and he’s like, “Hey, this is awesome. This makes so much sense.” And I was like, “Yeah. Why do you think I wrote you? This is a great fit for you and a great fit for us.” So, it’s more about them wanting to partner with you, than you having some ninja sales skills. We can talk about ninja sales skills, but…

Andrew: And I do want what you were saying earlier that we’re going to cover, which is what do we write in those emails? How do we get people’s email addresses? What happens if they don’t respond to us? We will cover it all, but you’re saying the very first thing, the most important thing is to find the right company to pitch because, in your situation, because you were pitching Western Union, a company that was facilitating money transfers internationally.

Someone in the U.S. would be able to send money to their family in Argentina. They wanted to reach people who are calling family in Argentina. Perfect match. That’s where it all starts. Do I have that right?

Bryan: Yeah. You have it perfect.

Andrew: All right. Boom. On to the next big point. I’m going to bring up the big board right there. Find your top two or three customers. Before you even tell me what to write in an email, you’re telling me… Boy that light is really getting in your face. You have a beautiful view…

Bryan: Yeah.

Andrew: I can see the sun is shining right…

Bryan: It is a beautiful view.

Andrew: Yes. If you’re okay…

Bryan: It’s like the sun’s coming down in New York City. I’m going to show everybody the view if you want, but…

Andrew: Yeah. Maybe in a little bit. I’d love to see it. If you flip around the camera are we going to lose the connection?

Bryan: No.

Andrew: Okay.

Bryan: Well, let’s just show people real quick. We’re live. Let’s see.

Andrew: You set it up so perfectly, and then the sun started to set over there.

Bryan: I don’t know if you can see…

Andrew: Yeah.

Bryan: …the World Trade Center or New York City.

Andrew: Yeah.

Bryan: I’m in my apartment right now because it’s much quieter here than my office.

Andrew: All right. Let’s make sure that we find a spot that you’re comfortable. There that’ll work. Kind of…

Bryan: I think I just need to move over here.

Andrew: Okay. Yeah.

Bryan: All right…

Andrew: Here we go. All right. Find your top two or three customers. This is where you were starting to say the Phoenix story a moment ago…

Bryan: Yes. Now I’m teaching different companies who they should reach out to.

Andrew: Mm-hmm.

Bryan: And I’m always trying to find a quicker way. For one, for me to get the information across and two, for them to have the impact with the least number of steps.

Andrew: Yep.

Bryan: I was kind of racking my brain because I can’t call and talk to every single person.

I was talking to a company out in Phoenix, and he wanted to reach… He wanted to get on Craig’s list and reach people who were advertising jobs. He’s the local job board in Phoenix. I was kind of listening to him and so I just asked him, “Who’s your largest client?” “How much?” And he was like, “Well, what do you mean?” “Well, who spent the most amount of money with you last year?”

Andrew: Mm-hmm.

Bryan: He said, “Oh, well, it’s this grocery store.” He’s like, “Well, how much money did they spend? Tell me about it.” Because he’s going after $500 transactions.

Andrew: Yep.

Bryan: I wanted him to think a little bit bigger. He was like, “Well, they spent $20,000 with us.” Okay. Well, why is their strategy to go after…how many would that be? Forty $500 clients? Versus one $20,000 client. It just repeats.

We started digging into his business and why this grocery store was so good for him. What it turned out was that they were required to have…People who lived really close to this grocery store chain had a lot of turn-over because that is just the nature of this job, and they hired a lot of employees. So they needed something local. For this guy, this was great because he has a very niche, local product, and his transactions were based on every time they posted something. One client: dozens and dozens of transactions every year…

Andrew: I see. I see and…

Bryan: So…

Andrew: Uh-huh?

Bryan: Then we take that and we say, “Okay, well, if this is really good, and these are some of the attributes that are really good for you, let’s go after more of these types of clients. What other grocery stores are in that area? What other companies fit that profile?”

Because one, you now understand that business a little bit better: I go to Western Union, and my second call… My second email is Master Card and MoneyGram and Bank of America. Let’s talk about what you guys are doing here because I know a lot more about what Western Union is doing and what you guys are trying to do. So I already have a story. Which means that they’re much more likely to respond to your emails as well.

Andrew: I see. That makes sense. Where some of us might say, “I have this big client, he must be an outlier if is he’s spending $20,000 while most of my other clients are spending hundreds. He must be an exception. Great. We have him, but that’s not our business.” You’re telling us, “No. Look at those exceptions that are writing him off. Look at that person and see what attributes do other companies have in common.”

Bryan: Yeah. Let the client lead you in the right direction.

Andrew: Okay.

Bryan: For everybody, if you’re listening in, look at last year. Who’s your top client? We’ll go through this exercise. I also understand, “Why are they so good?” Because in the email we’re going to be identifying what were the key driving forces. Who’s your second largest client? How much revenue? Who’s your third? At some point there’s going to be a complete drop off. It will be like, 300,000, 200,800, 250,000, 42,000. It’s like, Okay, let’s look at these companies and duplicate more of those companies. It’s going to be easier for you. You understand their business. You’re more referenceable, and why not model what is the most successful.

Andrew: Okay. All right. I see that. So let’s go on to the big board, and the next big idea for us to talk about is, interviewing those best customers and using their language. Let’s see if I can show how you did that. Where is that? There it is. I’m going to show survey monkey survey. This is how you did it. Zoom in really big on this.

Bryan: Okay. So the context here, and anyone here can go to that link. It’s live. So the important thing is when you’re interviewing your clients- I did this for testimonials. I want to make it really easy for people to answer questions to provide testimonials because I’d always get, hey, this was great. I really appreciate all these meetings. This is amazing. If I ever ask somebody for a testimonial, I get this testimonial and it’s like, oh man, I can’t really use this. Has that ever happened to you?

Andrew: Yeah. That happens all the time. People become very effusive. But it’s not useful. No one else would want to read someone’s testimonial if it just says, “Andrew is just really great guy. I’m so lucky to know him. This is terrific. Everything’s great.” It feels excessive.

Bryan: Yeah. It’s kind of empty.

Andrew: Yeah. No substance.

Bryan: Yeah. There’s no substance.

Andrew: Okay. Is this about getting testimonials that you can use to close sales in the future? Or to understand the language so that you can copy the way that people describe their problem when you’re talking to new customers?

Bryan: Both.

Andrew: Okay.

Bryan: So when you get in the mind of- let’s take the context of an email- when you get in the mind of your current customers, you can get in the mind of your prospects.

Andrew: Okay.

Bryan: I don’t have the answers. Most of my clients for the most part don’t have the answers. They’re too close to the problem. But if they ask their client the right questions, they can get the right phrases to understand what their client was dealing with, which is very likely the exact same thing that their prospects are dealing with.

Andrew: So let’s take a look at these questions. They are questions like, what was your first impression when you heard about this training? This is the training that you now offer. Why were you skeptical- Sorry.

Bryan: Let me frame the questions.

Andrew: All right.

Bryan: The questions fit into three categories. There is the before we started working together category. What is the beginning of the survey say?

Andrew: Thank you for providing a testimonial. You rock. Directions. Please answer the questions in a specific way. Write your answers as if you were writing someone who is considering joining the training. Imagine you are on the fence, and it will be your testimonial that will help make a choice.

Bryan: Right. So I’m changing the context of how they even answer the question. I’ll do a lot of future pacing. What this is is actually pacing back in history.

Andrew: Mm-hmm.

Bryan: Right? So now as we go through the questions, can you pull up the doc?

Andrew: Yeah.

Bryan: So what was your first impression? Why were you skeptical? Keep going. What convinced you? All right. Stop. So those first three questions are all questions to model their thoughts before we started working together. Right? In this example it’s a testimonial, but what we want to get because the prospect is their thinking. This is where they are. If you ask somebody, “Hey, why do you like to work with us?” They’ll say, “Oh, you’re really responsive. Your service is great. We can always depend on you.” The person who is considering working with you doesn’t care.

Andrew: Mm-hmm.

Bryan: That’s not where they are. That’s answered from the person who’s already been working with you who is answering your question to the best of their ability. So now the second level question, can we go back-

Andrew: Yeah. Let’s bring that up.

Bryan: What happened when we first got the training? Context for this is a testimonial. What was the biggest challenge that the strategies helped you solve? What did it feel like when you saw these strategies work? So we’re getting more into the emotion. And this is more like their journey through the whole thing, their journey through working with us. Then at the end if you can go to the very end.

Andrew: Yeah. Here it comes.

Bryan: …you know, so what amount of business dollars and cent? What amount of potential business? That’s two different numbers. Which part of the product can you see have a lasting change impact? And then provide your contact information. So, I literally send people this and I get these amazing, glowing responses which we can share one of them.

Andrew: Before I show one…for people who are doing direct 1 to 1 sales who don’t have so many customers that they need to survey them but they do have enough they could talk to them in person. You want them to ask questions of their best customers like, what was it like before you bought?

Bryan: Okay. So here are the questions in the context of the interview,

Andrew: Yes, what are the three categories of questions? And we would just be on the phone with a customer or we would be in person or maybe over a drink. We’d be talking to them and asking these questions so we would understand where they were.

Bryan: Okay. So the context is to email two or three customers, and this is all in my course what I talk about. So, email two or three customers. Say “I’m working on this project. Do you have 10 or 15 minutes to talk?”

Andrew: Okay.

Bryan: So they’ll get on the calendar. They can have 10 or 15 minutes. I give them a series of questions. And really what we want to get to is that pre-unit before we started working together. What were you really trying to do? What was important……

Andrew: I see.

Bryan: …to you? Who else were you considering? Why did you pick us? Why not these other guys? What was your biggest fear in hiring us? What was your biggest fear if we didn’t solve this problem?

Andrew: Okay.

Bryan: Why was that important to you? And we want to get into their world as far as like what was it that was really going on in their world at that time. Because whatever they say, like record the call, take notes because you want the actual words that people use. The actual phrases because we’re going to use those phrases in our email later on down the road.

Andrew: Gotcha.

Bryan: [??] on your website because there is a real difference between the way we speak about it and the way your actual prospect will think about it.

Andrew: Okay. So let’s take a look then. Here are some of the responses that you got.

Bryan: Actually, I want to give ever body another question. I was trying to make these points of contact as valuable as possible. So it’s another opportunity to say, if they are saying glowing things about you, would you mind doing a testimonial? And they’ll say, “I’m happy to”. And then you can say I’ll send you a survey. There are nine questions on it. Just kind of walk them through the whole thing.

And then, also at the end of the conversation they probably feel pretty good about us. I’ll always ask for a referral. I use this, like magic phrase. I’ve tried to beat this phrase but there is literally like 20 different phrases that I use in meetings at different times. And they just work.

Andrew: What’s the magic phrase, the one that works the best?

Bryan: Well before I tell you, I’ll tell you what people do. They take the phrase, they change it and it doesn’t work.

Andrew: Okay.

Bryan: It has to be spoken this way. And what I’ll say is, “based upon what you know about us, can you think of anybody else that it might make sense to talk to”? Or, “can you think of anybody else it might make sense for us to talk to”? So they will take their 400 close personal connections, think about all the conversations they have ever had in their life and say; “you know what, there is one…I was actually talking to somebody” or whatever it is.

And they will come up with one or two people for you to talk to. It may be internally at their company or may be at a different company. Because, if you think about it, this person is in a certain role. They are going to know other people at previous companies in a very similar role. They go to trade shows, they go to…and they’ll distill the 400 contacts that they know down to one or two. And, now you have a referral that we can talk about in the email…..

Andrew: Okay.

Bryan: …into another meeting before you have to cold email anybody.

Andrew: All right. So then, let’s take a look at 1 of the responses that you got back and see how it could be useful later on. Zoom out…what part is most important for me to zoom in on because there is so much on this?

Bryan: So this is just a story.

Andrew: Right.

Bryan: So we sent this to somebody. I think I covered up his name. But we just said, “What’s the first impression when you heard about our training”? Because we have a training on how to do all this stuff on cold emailing and for sales calls. He said, “I thought there was no way you could get a 90 percent response rate from a cold email, from top level executives in Fortune 500 companies. He’s not part of our marketing because literally that’s what our clients steal from.

Andrew: I see. So if he said, “Before I signed up” . . . I thought there was no way I could get a 90% response rate from cold calling, from cold emailing, top level executives in the Fortune 500 companies. When you talk to potential customers you say, “I can help you get 90% response rate from cold emailing top level executives.” Is that what it is?

Bryan: Right. You’re going to get a 90% response.

Andrew: I see. Because you said 90% response rate, you’re saying 90%.

Bryan: Because across the board they’re not getting 90%, they’re getting 80%. When I write people, nine out of ten times they’re going to respond but . . .

Andrew: Using the template we’re about to talk about.

Bryan: Yeah. Using the template we’re about to talk about.

Andrew: Let’s see the other way. What else are you grabbing from this that allows you to change your marketing and change the way you talk about your product? Here it is.

Bryan: So the questions have changed a little bit, like the coaching for everybody on the call was to understand the before, the during, and the after.

Andrew: Mm-hmm.

Bryan: And then he says because 90% open reply rates seem like a ridiculous claim. He mistyped, I tried to email a template. That was a bonus for you to download what we’re going to talk about today. Simply, it worked. This is amazed balls, freaking. Amazingly good, it works. Holy shit!

Andrew: Mm-hmm.

Bryan: You know, what happened when you got the product? I started getting meetings with bigger companies, and I got them really fast. What was the biggest challenge that helped you solve getting the right people? And then it talks about the revenue and everything else, the whole story. So we’re making it really easy for him to give us really valuable information . . .

Andrew: Okay.

Bryan: . . . in a way that it’s really consumerable based on where my audience is when they’re considering a purchase.

Andrew: How would you use this? Can you give me an example of how you might use some of this language to . . .

Bryan: I wouldn’t use these questions.

Andrew: You wouldn’t? I see. There would be other questions that you would use.

Bryan: Yeah. So . . .

Andrew: Do you have an example of a question you might use and how the answer to it would be helpful?

Bryan: So I think I talked a little bit about this, but what was your biggest desire?

Andrew: Okay.

Bryan: Like when you were considering working with us, what were you trying to solve?

Andrew: Okay.

Bryan: What was the challenge you were having at the time?

Andrew: Okay.

Bryan: Not where you’re at now, but like where you were.

Andrew: Okay. I see. So if we’re talking about . . .

Bryan: [??]

Andrew: I’m sorry.

Bryan: What was your biggest fear when hiring us? You want to get in their head. What were they trying to do How did you help solve that?

Andrew: I see. All right. And I could see then now if I hear how they describe the biggest problem that they needed me to help solve, I could then describe to a potential customer, “You might be feeling” and then talk about that problem. And they should be hopefully nodding because they’re feeling that I’ve described their problem so well that now they trust me to have the solution.

Bryan: What is something you bought in the past that was high ticket for you?

Andrew: I don’t specifically have an especially high ticket. Here’s one. I needed a second virtual assistant, someone to handle things like call up an airline and see if I can get this flight, find out where the local EMS station because we’re going to have a baby and we need that number just in case. So that was a commitment of a lot of money.

Bryan: Around how much money?

Andrew: Not huge, around a few hundred bucks.

Bryan: Can you think of something that’s a bigger ticket item maybe past companies? Like you hired some big time consultants or spent a lot?

Andrew: I can think of a few of those, so a PR firm, for example. We spent, I think, $20,000 a month on a PR firm.

Bryan: Okay. And were they pretty good?

Andrew: I’d say so.

Bryan: Okay. So when you were thinking about hiring the PR firm . . . Say I’m at the PR firm. And I’m interviewing you to find out how to approach other companies like you, right?

Andrew: Mm-hmm.

Bryan: And you’re the CEO of the firm and I’m like, “Hey, Andrew, do you have 10-15 minutes to talk about this?

Andrew: I see what you’re saying totally. Okay. So they might identify me as the one customer they have that did not negotiate for a significantly lower price or didn’t negotiate at all. They might say, “Why, Andrew, did you come to us. What’s the problem?” And I would answer, “I felt like we were doing well with the business, and no one knew about us.

Everyone who sucked in business was getting a ton of press, and I was being ignored and neglected and treated like we didn’t even exist. And I decided I would spend some money, hire someone to show the world that we do exist and that we are running a company that’s doing well.

Bryan: So when you say that you don’t exist, what does that mean?

Andrew: It means I would open up magazines and look at websites and see that they’re reporting about these companies and completely ignoring us. They were reporting on big companies that have no substance but a lot of attention and small companies that we compete with that I know I’m beating because . . .

Bryan: Okay.

Andrew: I know their revenues and they’re not even talking about me.

Bryan: So why was this frustrating for you?

Andrew: It was frustrating because it lowered the morale in the company. People felt like, well, maybe this isn’t a real thing for some reason. Unless the media says it’s a real thing it’s not a real thing. And potentially it kept us from being talked about by acquirers. It made it harder for us to make sales calls to people.

Bryan: Okay, and why did you want somebody to acquire you?

Andrew: I wanted to see the possibilities, not so much to close a sale.

Bryan: Okay, so you wanted the options of having potential suitors.

Andrew: To see what we could potentially get.

Bryan: How did it make sales calls more difficult?

Andrew: I would have to work really hard to get anyone to even take my call, take me seriously. They would hear my numbers, and they wouldn’t believe them.

Bryan: Okay, and were you having trouble closing new business with that?

Andrew: Yeah.

Bryan: Okay, and how is morale affecting you?

Andrew: People at the company felt like this was just an art project almost instead of a business, or if they believed it was a business they thought it was some kind of hustle because why would no one know that we existed if we were doing so well.

Bryan: How did the hustle affect you? I’m not clear.

Andrew: The sense that maybe we were doing well by cheating somehow or by doing something strange because otherwise everyone would know about us, the way they know about Yahoo, the way they know about Instagram.

Bryan: Okay. So it seemed sort of like a creditability issue.

Andrew: Mm-hmm. Yeah.

Bryan: Okay. So you need to stop this.

Andrew: Right.

Bryan: So what I get is I got more of the root of what was actually happening with the PR.

Andrew: Okay.

Bryan: I can just keep going and just asking questions.

Andrew: It seems like a therapy session for me.

Bryan: Say it again.

Andrew: It felt like a therapy session. You’re really getting at my inner motivation.

Bryan: Right. So we’re trying to get to the emotion of it so people buy for three reasons: fear, frustration, desire. I asked you what was it that frustrated you about, right? And so that’s how I look at sales, really as more like you’re a therapist or a doctor. What seems to be the problem? And then where people misstep is they ask the one question and then they don’t continue to ask.

So you wanted PR. You wanted to be in the media. These other guys were doing it, but that wasn’t the reason. The real reason, as we were kind of getting into it and there’s three of them One is morale which is more about credibility in there somewhere, right? The second was, well, we were talking about closing more sales.

Andrew: Mm-hmm.

Bryan: Not being able to close those sales, finding somebody to acquire you.

Andrew: Mm-hmm.

Bryan: So the PR was really a gateway for all these other things that could help solve that problem.

Andrew: I see.

Bryan: And then we could go into like, well, what was it like when we started working together? How did you feel? How did you know when it was really successful? Now if I’m the PR company and I’m writing to other organizations, if I want to reach the CEO where’s the CEO’s mind, right? The CEO’s mind is about employee morale in the company. It’s about finding suitors and having an exit plan, right? Because it’s the CEO. You want to get in the mind of that guy. You shouldn’t have to understand . . .

Andrew: I see. So I wouldn’t keep talking about how when the PR company is pitching another potential customer like me would keep talking about how they would get that client inside USA Today, but instead would say, “This could lead to acquisition offers. This will make your people so excited that they’re going to be proud to work for you. This will make it easier for you to get calls returned, and it might show people how significantly large you are.”

Bryan: Yeah. It closes more business, and it beats your competition. And if you have VC funding, you only have a certain amount of shelf life or time. So you have less time and more money, right? So you need to get the message out there and have first revenge, but that’s just like the surface of what we’re talking about. And the questions are what’s most important. To get in your mind. Now, when we’re talking to the next guy who is the CEO of a startup he probably had some similar issues that [inaudible]

Andrew: I see. You know what. This part was maybe the most valuable part of the whole conversation for me. Now I totally get it. I like that you were able to just do this on the fly. I get it. Okay.

Bryan: Yeah, that’s what I do every day. Do you know why you liked it?

Andrew: Why?

Bryan: Because it was about you.

Andrew: So, maybe the audience isn’t feeling the same love and [inaudible].

Bryan: No, no. It’s interactive, right. Because it’s live and we’re just talking about this. It gives everybody a context, right. Because now they can see it for themselves. We talked about the five whys. I don’t know if you have that slide available.

Andrew: Yeah, I’m bringing that up on the screen here.

Bryan: It’s . . .

Andrew: I noticed you actually doing that, but I stopped evaluating it. Once I noticed it I said I’m just going to go with where he’s taking me.

Bryan: Yeah, and at any point, and probably in the middle of it, it kind of could see that maybe I didn’t have the rapport to keep asking the questions with you, but thank you for . . . it kind of felt that in the space between us.

Andrew: Oh, you totally had the rapport with me.

Bryan: Well, if you’re realizing what I’m doing you see the technique.

Andrew: I see.

Bryan: Versus it’s really coming through. Right. So, if you’re reading something and think about your reading it, or I’m getting kind of bored reading this you’re not in the moment, or if you’re watching a movie and you’re . . .

Andrew: Yeah, when I’m watching a movie and I say, how did he act that way. Did he have to get into the scene then I’m not really experiencing the movie.

Bryan: They lost you.

Andrew: Right. Okay.

Bryan: Right.

Andrew: Here wait. That’s not one of the [inaudible]

Bryan: That’s one of the challenges in meetings or sales calls with people.

Andrew: Yes.

Bryan: You’re constantly battling back and forth with them. We talked a little bit about it. In your interviewing with a mutual friend he called, what was it that you guys called it? The . . .

Andrew: Join the resistance. Where if someone’s resisting me instead of arguing back with them in the interview I join the resistance and then they start to open up.

Bryan: Yeah. I call it the pendulum technique, which I learned from Sandler Sale Institute which is essentially going with whatever their objection is or their concern is and actually doubling down on it. We can talk about that later.

Andrew: Okay. All right. On to the next then. Why don’t we go to what many people I’m sure have come to this conversation for, I’ll bring it up there, finding the right email address. There are many ways to do this. You talk about them on your site. Why don’t we link to this post where you talk about it. Here, this is the one.

Bryan: This is the official launch of coldemailing.com. I love that image.

Andrew: Oh, this one image is on the site when you launched.

Bryan: The video.

Andrew: Okay. The [inaudible]

Bryan: Watch this guy. Wait, go back to that.

Andrew: Okay. There are many different approaches for finding someone’s email. One of them is you like jigsaw.com, which has now been renamed data.com.

Bryan: Right, yes.

Andrew: What do we do there?

Bryan: Yeah, go to coldemail.com and talk about the nine steps to finding an email address. This is step number two. Data.com.

Andrew: Let’s bring it up here.

Bryan: Jigsaw with everyone provides their email addresses. First step to finding someone’s email address is to find the right, well, the first step to cold emailing a company is to finding the right people. You go in. You’ll log in. I think there’s a screen shot of a company and you just write the C level, or VP of marketing. It’s going to give you all the marketing people. Then you have the names of the people in the organization in literally 15 or 20 seconds.

Then you go in and you use mail tester, or reportive. There’s all kinds of different services there list up about actually how to find the email address.

Andrew: One way is to just go to jigsaw.com or data.com. I keep forgetting to call them data.com, right. We go to data.com. We say I want to reach Western Unions ethnic marketer. Type in that?

Bryan: You know who everyone wants to reach? I always ask people who they want to reach. Everyone wants to reach Google.

Andrew: Okay.

Bryan: It’s the number one company.

Andrew: Okay. Can I do that?

Bryan: Yeah, you go in. You type Google, right.

Andrew: Okay.

Bryan: It’s going to say there’s 25,000 or however many people they have on their list. Okay, my discipline is IT, or finance, or marketing, or whatever it is. You’ll either search based on, I would search either based on marketing, right, or I would search C level executive. I get a list of all the names of the people. Then I go to say, VP marketing and get a list of all the people. I am now finding the right people to reach out to, to send my email to.

Andrew: Okay. And by the way, Bryan, I’ve had other people on Mixergy say, specifically, going to data.com and cold email doesn’t work.

Bryan: Okay.

Andrew: Data.com does work for you. Cold emailing works for you. And the reason data.com, my sense is, cold emailing works for you, because this is your focus. You spend so much time getting it right. And data.com is not 100 percent for you, I think their data is maybe 75% accurate?

Bryan: Yeah, that’s pretty consistent. I’d say 70%.

Andrew: 70%. So if I get ten emails out of there, chances are, three are going to be so old that they’re out-of-date, but the other seven will be valid and if I know what to say to people, it’ll work.

Bryan: Right. So, you’ll know if the emails kick back to you, right? But there’s also, in the steps, all kinds of ways you use mail tester to see if it is a valid email for all these different email addresses.

Andrew: What do you mean? How would you use mail tester to see if the email address is right?

Bryan: You just punch the email address in there, and it tests if the email goes through the servers, the email servers, to see if there’s actually an email address…

Andrew: What is mail tester? Is this mail-dash-tester-dot-com?

Bryan: I think it’s on the list.

Andrew: Let me see.

Bryan: I don’t know. Just google “mail tester”.

Andrew: Oh, it’s just mailtester.com. There it is.

Bryan: Or you can use Rapportive, which is a free plug-in into Google, into Gmail. And if the address does match any social profile, it’ll come up.

Andrew: Oh, here we go. I just typed in my own email address. So, Mixergy.com is valid, and andrew@mixergy.com is a valid email address. Oh, I didn’t know it worked that way. Alright, perfect. So this is one way out of several that you have up on Cold Emailing, coldemailing.com.

Bryan: So, coldemailing.com, what’s the forward slash for this article?

Andrew: Oh, it’s going to be so long. We should just link over to it.

Bryan: Okay. So, I don’t find email addresses anymore. Right? So hire a virtual assistant, even if… I mean, you can find people for two, three, four dollars an hour to do this kind of work for you.

Andrew: Mhm.

Bryan: Even if you’re a sales rep, if you’re a CEO, definitely have some… it’s a low-value task.

Andrew: Okay.

Bryan: Right? And they can come up with the emails and the names. You’re going to have to give them direction on the right names, which we can talk about, but your audience should be the ones doing this.

Andrew: I see. So we shouldn’t even go breaking through this process. The article is there, people can see it, they can give it to a virtual assistant, the virtual assistant can use it for them.

Bryan: Your audience wants to be showing up on high-value meetings, right?

Andrew: Sorry?

Bryan: I said, everyone listening here, you need to just have the meeting set for you and show up on the meeting, and have it be like a life-changing meeting.

Andrew: Not test email addresses one at a time and waste your time.

Bryan: Yeah, or not even do the back-and-forth with the email. I mean, that’s… we’ve already codified every email response that somebody can have. We have all the templates written, you know.

Andrew: So you’re saying, I could actually start handing this off to someone else if I were doing sales, even the emailing.

Bryan: Have them watch this video, go through the course, have them do it. If you’re listening in, you need to interview your clients. You need to be the one who’s really hearing the words, hearing the phrases that they use. You need the understanding of what the market’s telling you, and the language that they’re using, developing the email, the initial email, so you, you know, like in different categories. And then, once you have a process, give them the system, and have them run with this outbound, outbound system.

Andrew: All right. Let’s go on, then, to the next point. I want to understand what this is, you’re saying we should use the waterfall technique. What is the waterfall technique and how does this help us understand it? This screenshot.

Bryan: So, this is one of those things that I’ve tried to beat as well.

Andrew: They tried to beat it?

Bryan: Yeah, I mean I’m always testing things, you know, in the emails, and I’ve sent ten thousand different emails. Not like, one email to ten thousand people, but like, ten thousand different emails.

Andrew: Mhm.

Bryan: And, I could never beat this. And it’s because of the… it’s kind of like Western Union. You know, don’t try to beat them, join them? So, I found… you want me to tell you a story about this?

Andrew: Yeah. I love stories.

Bryan: Alright, so, I was in New York City, sent out an email, was doing some research, trying something new. And, two days later I’m in a bar with my buddy, they leave to go to the bathroom. And I’m looking at my phone… [???] And you know, you’re just kind of scrolling through, like mind- numbing, looking at your emails. And here’s all, here’s all my emails. And I get this email back. It’s like Bryan thank you so much for writing us. It’s like who is this, right?

Normally, it’s like sales guy, please cease and desist. Stop and start carpet bombing. MetroPCS said that to me. I was reading on. We’re so thankful that you wrote us. I’m your point person. We have a weekly call with all of our marketing people.

I want to see if you would be able and willing to present because we can find multiple ways that we can work together. We’d really like if you can come in and present. If you’re able to come meet us or happen to be in Minneapolis, Minnesota, we would love to meet you in person. I look at the cc line. There’s literally six different executives at Best Buy on the Marketing Department who I never could’ve found all on this email.

Andrew: And he is reaching, he’s identifying them for you and reaching them on your behalf?

Bryan: Yeah, she raised her hand…

Andrew: Or, she, excuse me.

Bryan: said I’m your point of contact. I’ll help facilitate this whole thing. And she’s the VP of Marketing of the group. It wasn’t like she was some sort of assistant or somebody. And she invited me to meet with the entire group. So I, of course, was going to be in the neighborhood in Minneapolis, ended up meeting them in person, ended up doing two deals with them. And within 30 days, off of that one email, it was like $50,000 starter budget.

Andrew: So how did you do that? And how does this above-the-rim tactic, or actually, waterfall technique, how does it help us do that?

Bryan: Yeah, so, if you can go visually…

Andrew: Yeah, here it is.

Bryan: So normally, I was with, say, the agencies on the left side. The agency for Best Buy who at some point may be present what I was doing to the client. What I did is I went much, much higher. So I wrote four emails, it was to the Director of Marketing, the VP of Marketing, the CMO, and the CEO. I know the CEO of Best Buy isn’t the right person for me to talk to, but I also know there’s thousands of people at Best Buy. And I know that trying to find the right person for me to talk to at the level who’s actually the decision maker is a long process because I was doing it every day.

And if you think about any organization or company, the same thing holds true in every company. There’s like a social hierarchy built into the organization, and the executives, part of their job, is to delegate. The CMO’s job isn’t to do all the work. The CMO, Chief Marketing Officer, part of it he has to delegate to the VP of Marketing, the VP of Media, the VP of [??], whatever category.

So if I can put together an email that is crafted from the perspective of hey I’m tapping into your mind and thinking like you and here’s an opportunity for you, does it make sense for us to talk? If not, who’s the appropriate person for me to talk to, which we can go into the email. They’ll just delegate it. Talk to Bill Smith. And now I have the job of the person down below is to do a good job for the person up above.

Andrew: Okay.

Bryan: So now there’s context for the meeting. And they now have to take my meeting because I just got a direct referral internally.

Andrew: So I see what you’re saying. You don’t go directly to the person you want. You go a step, or even as many as three, above that person, and write your email in a way that will get the person whose above the person you want to send it down to the guy you want.

Bryan: Right.

Andrew: Got it.

Bryan: So in any negotiation…

Andrew: Yes.

Bryan: Like I started my career, if I wanted to make 600,000, that was my salary at the end of my career selling. But if I wanted to make $100,000, which was a big deal to me, I would ask for $100,000. And guess how much I got?

Andrew: Eighty or less than 100.

Bryan: Yeah, like 85. And for me it was really hard to think like I have to ask for 120,000? And I’d get 105 just by changing the odds.

Andrew: Okay. So let me see if I understand this, though.

Bryan: “Negotiate Anything” is a great book.

Andrew: So in this image, you are trying to get to the Director of Marketing. And you’re saying, if the Director of Marketing is the person for me to talk to, I’m going to go above his head, or her head, who do you talk to? Do you go to the VP of Marketing? Do you go to the CMO? Or are you emailing everyone above that person?

Bryan: Yes, I’m emailing all four people.

Andrew: You’re emailing all four people in one email.

Bryan: Yeah, separately.

Andrew: Separately.

Bryan: So there’s a whole template on this, the 9 Steps to Write the Email, breakthroughemail.com, and it’s literally one of the first or second e- mails that is auto-responder that I will send you. And, it just walks you through the whole.

Andrew: Can you give me an overview of if you’re e-mailing four different e- mails to get to one person? You’re e-mailing the CEO, you’re e-mailing the CMO, you’re e-mailing the VP of Marketing, and you’re e-mailing the person who you want, which is the Director of Marketing, can you just give me an overview of what you’re saying without getting into specifics?

Bryan: Well, I think we have some of the screenshots.

Andrew: Okay. So this is where we get into the e-mail templates?

Bryan: Yeah. This is where we get into the templates.

Andrew: All right. Let’s do that then. Here is the next section, which is to use your e-mail template. It has three sections; purpose, pitch, action. Why don’t we start with the purpose?

Bryan: … Yeah. So, now we’re getting into the subject line. I can give you guys the subject line. But, you’re going to make all of the mistakes that everybody makes. And, you’re going to be frustrated by the outcomes. So, that’s why we’re kind of leading up to finding the right person, finding the people you should contact.

So subject line is appropriate person, be consistent with your subject because since this is a cold outreach you want to be congruent and trust is really important. So, I’m not going to tell you about all of the things that you shouldn’t do. Like saying, “Hey, my name is Bryan Kreuzberger I work through breakthroughemail.com I really think that we should meet.” Because, that’s the worst example of an e-mail that somebody will look at. Because they’re looking at the inbox before in the previous screen is says Bryan Kreuzberger, it says the subject, it says the first two sentences. So, you have to absolutely get to the point in those first two sentences. If you look at my e-mail …

Andrew: I see. Right. There’s always … we see the subject line and then we see up to two sentences in that summary view. Here, let me see …

Bryan: Yeah. So, Megan, Intra, Bryan, Kevin. And, I work with my team. It’s like, “Hey, get to the point.” So I know what the context is. Or, even in the subject line. So, if you’re hitting this executive, they’re looking at their phone, you have three seconds before they decide what to do with your e-mail.

Andrew: Okay. So, in those three seconds here’s what you’ve got us saying, subject line is the appropriate person. Then, in the body the first few sentences in the body are, I’m writing in hopes of finding the appropriate person who handles multi-cultural media, question mark. I also wrote to person X, person Y, and person Z in that pursuit. If it makes sense to talk let me know how your calendar looks.

Bryan: Right.

Andrew: Okay. So, if I’m reaching out to the, what’s it called, the Director of Marketing I would say, I’ve also written to person CFO, excuse me, person CEO, person CMO, person VP of Marketing, put their names in there.

Bryan: Right.

Andrew: Got it.

Bryan: So they know that I’ve spent a little bit more time. Now you can’t cc anybody. That’s the first thing somebody wants to do. They just want to cc everybody. And, because then it becomes way too easy for one of the people to raise their hand and say, “Hey, we’re not interested”. And, you can’t go back. Because what happens is, especially in these large organizations, now this works for small companies, medium-sized, larger companies, but, you’ll get different answers of, “Oh, will talk to Bill Smith.” or, “Oh, talk to Jane … Cunningham.”

And all of a sudden I have a potential deal down in Dallas with AT&T, and a potential deal down in Atlanta. Which happens, because of the way that you frame the e-mail. By creating multiple different opportunities. If I were writing you back in the day with this other company and said, “Hey, I can help you get acquired by potential acquirers.” That might be something you’re interested in. Or, “Hey, I can help you with the morale of your company, and making sure, and the credibility.”

Andrew: I see. And, you might say, “I’ve also e-mailed Richard, I’ve also e- mailed Crystal, I’ve also e-mailed Michael and now I see three familiar names in the chain of command and I realize this guy knows my business. Wouldn’t I then at that point Bryan, alright then one of them is going to respond, I’m not going to respond.

Bryan: Right. So, that’s fine.

Andrew: Okay.

Bryan: And, if no one responds the next week. I’d just say, “Hey, I’m writing a follow-up. Never heard back from anyone on the team. Let me know if it makes sense to talk. If not, who is the appropriate person.

Andrew: Got it.

Bryan: And, guess what the CEO does every single time?

Andrew: What?

Bryan: Because, if it’s framed correctly it’s an opportunity for him, he’s a little surprised that no one on the team responded, and he’s like boom, talk to this guy.

Andrew: Got it. And, he then he forwards your e-mail to that guy?

Bryan: Yeah. Because you have to frame the conversation, there’s this guy Doug Weaver for Upstream Media, and he consults specifically in agencies and brands in New York City. And my wife who works for InStyle was going through his training and she came back and she’s oh this is this great quote which I love, which is, “You’re delegated to who you should like.” So, if you sound like the agency person, you’re going to meet with the agency person. If you sound like the CEO, you’re going to be meeting with CEOs.

Andrew: I see.

Bryan: Why I love email is that you can have 18 rounds of revisions on the email before you hit send. You’re on the phone and you’re like “Hum-ana[SP] hum-ana, ah, sorry to interrupt you, I’m sure you’re really busy right now,” like, whatever it is…

Andrew: And they might actually be really busy right now.

Bryan: Well, they are really busy. You are interrupting. You have to have permission. There’s a whole strategy if you want to, you know, cold call people. But I prefer to have a really targeted email that lands in their inbox and all they have to do is say, “Talk to this guy.”

Andrew: Okay, so the first thing we’ve talked about which is start off with the purpose and I read out what you said there, and next part is…

Bryan: There’s a lot more to like the language, you know. Why we use the word “talk.” “Talk” has a lower implied value of commitment on their part.

Andrew: I see, “If it makes sense to talk let me know how your calendar looks.” Why question marks on so many of these sentences?

Bryan: Actually, in the first one, I wouldn’t have a question mark. That’s a typo. And I have typos all the time. It drives my wife nuts. But my strategy is so much better. Right? So, I can have typos in my emails, which for some people, they just see red — like my wife. It just totally turns them off. But for the most part, I’ll still get the meetings because they’re so much more thought, critical thought put into it and that’s why I get the result. The last sentence question mark will denote action or make a request.

Andrew: Got it.

Bryan: And that’s why I use those.

Andrew: Even though technically it’s not a question, by putting a question at the end, it triggers their need to respond or to think about it in the way they might a question.

Bryan: Yeah, and we use “calendar” because if I ask for their “schedule” or if I ask “How does next week look?” or “How does 10 minutes next week look?,” it’s showing that I have a lower implied value of my own time — if I only ask for ten minutes.

Now, I want them to have a lower commitment at this point because they don’t even know what I’m here to talk about yet. But, it’s like direct marketing. I want to be really clear on what the purpose is of this email as we get into it…

Andrew: Can we copy it exactly as is, with obviously changing the name person X to person X’s name?

Bryan: Yeah, in multi-cultural media. That’s different.

Andrew: Oh right. Okay.

Bryan: And there’s a whole process which we don’t have time to talk about, in how you select the right phrase there. And it’s important because if you don’t nail that correctly, you’re not going to get to the second…

Andrew: Where do you teach that? I want to go on to the Pitch and Action, but if someone wants to go into even more depth than we have here, what’s the Web site where you teach it?

Bryan: BreakthroughEmail.com

Andrew: There it is. BreakthroughEmail.com.

Bryan: Yeah.

Andrew: All right, on to actually the next part which is “The Pitch.” Then I’ll spend a little time on this, a little time on “Action” and then go into what happens with the follow-ups.

Bryan: And I’ll actually save some people some time, if you don’t want to go through the auto-responder, you just want to take the course or go to the sales page? BreakthroughEmail.com/pro. It’s not even on there. So, that’s the Sales page. And, if you want to go to the Sales Training, that’s BreakthroughEmail.com/upgrade.

Andrew: So, slash pro gets me into the course and upgrade gets me into what?

Bryan: So, the second half of the course which is, “How am I going to persuade or influence somebody and convert them into a customer?” Like, “I got one shot, I don’t want to waste this opportunity, what do I do and say?” I cover everything in excruciating detail there. And there’s a lot more to that actually because as we were talking you kind of saw me bringing out information from you. And that’s the way to persuade somebody.

Andrew: Okay, let’s go on to just The Pitch for a little bit. So, the first step is we talked about the subject, we talked about expressing the purpose. The next part is The Pitch. What’s going on in this part of the email?

Bryan: So, this is where we go back into you interviewing your clients. Right? So, get to the point in the first sentence of this paragraph, right? Boodrocks [SP] helps increase the revenues of Fortune 500 companies by marketing to Hispanics. Right? So, I can help you by doing this. Right? What we did was very different than increasing revenue, but ultimately if a company wants to increase revenue, like let’s use the PR example.

All right, so XYZ PR company helps startup, you know, increase exposure, which really is – ok well I don’t increase exposure, I want, you know to increase credibility, to close more sales, and increase the likelihood of being acquired.

Andrew: Gotcha. So now, in this part in the pitch, we’re talking about it from the point of view of their needs as past clients expressed it.

Bryan: Yeah, absolutely like, get to the point of…not that like…we do this through media exposure, you know we do this by getting you into all the relevant media outlets that are important to you. Or more specifically, if you have a tech company, we get you into, you know, media outlets that are important to you like New York Times, Wall Street Journal, Business Week, Business 2.0, and Tech Crunch.

Andrew: You know, what I used to do, I used to send pitches asking people to do interviews, and I wish I knew this at the time, because at the end of an interview I could have asked, you know, just done the kind of interview that you’re talking about with my guests, I could have said “Alright, interview’s over Why did- what hesitation did you have about doing this interview? What was the problem that you came into this interview with that you wanted to do this interview, to deal with, et cetera?”

And then my next email to someone, to pitch them on an interview would have said, I would have pitched to them about the interview and ten said, “I can help you with biz-dev[??], build credibility, and also explain yourself to potential employees who will be reaching you.” I see that your kids are home so you really need to wrap this up soon.

Bryan: No we can keep going, I want to keep going. I mean you have to see my two year old.

Andrew: Yeah, do it.

Bryan: Come on Cole, come over here. [laughing] Okay, so you should interview people that you’ve interviewed and ask them, right? To get to “Why did you accept the interview?”

Andrew: Right.

Bryan: Get the language that they use, and also like, at the end of every interview, you should say “Hey, based on what we’re doing, can you think of anybody else you think it might make sense for me to talk to?”

Andrew: That part of the idea was really helpful.

Bryan: Right? And they’ll say, “What do you mean?” Well, “Are there any other guests that you know that I should talk to and I should interview?” Come here.

Cole: Dada!

Andrew: There we go, there’s Cole.

Bryan: Hey Cole, can you wave? Can you say hi?

Andrew: Hi!

Bryan: [laughing] Can you say hi?

Andrew: Way to go, Cole.

Bryan: And this is his buddy, Mosey[SP], come here Mosey. Mosey can say hi.

Andrew: Get the camera on you again. Hey, there you go!

Bryan: So Mosey has spring break, the kids have spring break. So…yeah.

Andrew: Let me go to the last part of this section, which is the call to action. This is the end, where we say, “If you’re the appropriate person to speak with, what does your calendar look like? If not, who do you recommend I talk to?” And you have tested this, the word “calendar” gets a 35% higher response than the word “schedule”, the word “talk” gets a 60% increase in response over the word “meet” or “call.”

Bryan: Right.

Andrew: And that’s where you want us to end it. And then “thank you,” signature, name, et cetera.

Bryan: Yeah, so be clear on what you’re asking for. This is like a one-two punch.

Andrew: Yep.

Bryan: You know, it’s like meet with me now, or refer me to the right person, and it was just tested stuff, it was like “beat it.” And if you want like an 85% or 92% great, but it’s more about getting the right meetings. If you can go back to the other slide, there’s something really important. I’m going to actually change rooms. But we know we’re live, right?

Andrew: Yeah, here we go, I’ll watch as you walk around.

Bryan: So you need the association, which we didn’t cover, and the association-

Andrew: You’re talking about here in the pitch?

Bryan: Yeah, in the pitch, it’s like the last sentence. There’s a lot more to the pitch, to getting this right. And for most people, it’s going to really matter. But some clients, they don’t know who you are. It’s the same reason why we said in the beginning of this email, the beginning of this presentation, you don’t know who Bryan Kreuzberger is or breakthrough email, but hey the guy who closed 20 million dollars in sales, maybe I should listen to him. Hey, he worked with McDonald’s, Mastercard, Bank of America, I like them as clients, maybe I should listen to him. You know, like those clients that generate 30 million . . .

Andrew: I see.

Bryan: The clients have generated $30,000,000 in revenue maybe I should listen to them. So, if you have referenceable clients, a whole different strategy if you’re a startup, but if you have referenceable clients you want to tell them. I’ve seen the email trails. They’re, like, well, hey, they’re working with this company maybe we should talk to them.

Andrew: And if you don’t have clients what’s the alternative? If you don’t have this many big name clients.

Bryan: You never want to include something that’s going to make you look worse.

Andrew: Okay.

Bryan: Right. If I’m working with, Tom’s Auto Garage, in New York City, and it’s just not referenceable. It’s not relatable to whom I’m writing to don’t include them. There’s whole modules on just how do you write a pitch. Then within the pitch I want four or five different opportunities for the person, for the people I’m writing at multiple levels. We talked about media exposure. Really quickly within three or four minutes we got to what that media exposure really meant to you as a C.E.O.

Andrew: Right.

Bryan: Spoken like a CEO.

Andrew: I see.

Bryan: This is a deep sea fishing technique, which we could cover in a different point, or you could just take the course.

Andrew: Would it work if I were to say to the audience if they don’t have clients, like, Burger King, and P.N.G., and Chilis the way you did, leave that part out. Do keep in the parts that are important, like, the redemption 3%, 500 companies, et cetera.

Bryan: Yeah.

Andrew: Okay. Just keep what you’ve got and [inaudible]

Bryan: There are 25,000,000. I know that scale is really important to these guys. I know why people buy media, right. It’s scale. It’s [inaudible 1:55].

Andrew: I see. We reached 25,000,000 Spanish speakers. Got it.

Bryan: How does it work? We insert 30 second audio and SMS advertisements in phone calls. Now, there was a 10 second ad, a 20 second ad. I didn’t want to get into that kind of detail. All right. Where’s the environment? Calling cards. What is the benefit of the users, right? That’s our one concern.

Andrew: Got it.

Bryan: All right. Next sentence. Within the email and different verticals you need a different email for different verticals.

Andrew: Okay, but the structures still the same. We’ll still talking about purpose, pitch, action.

Bryan: Pretty much, yeah.

Andrew: Okay. All right. On to the final point, which is send up to three follow up emails. If you don’t get a response what do we say in the follow up emails?

Bryan: It’s really simple. Include the original email. Just hit reply. Hey, I’m writing a follow up on my last email.

Andrew: Okay. I think I’ve got it then. This is it. All right. Let me bring it up. I’m writing a follow up on an email I sent a few weeks ago.

Bryan: [inaudible ] I’ll change the context for this. You know what? In the template breakthroughemail.com you’ll get all the other two emails. You’re just replying and saying hey, I never heard back from anyone on the team. Does it make sense to talk? If not, who’s the appropriate person? Now, the C.E.O. , or the higher level person just delegated it to the lower level person, and you get your meeting.

There’s a whole strategy. There’s five responses that you can get. Hey, we’re not interested. Hey, we’re not interested right now, which is a different response, or I”m already working with somebody. Here’s a referral of the person. I referred you to the appropriate person. If they respond I’ll let you know. There’s maybe one more response, or can you send me more information? Every single one of those responses we’ve coded and have responses to.

Andrew: You look out the window as you’re answering. Was there something going on outside?

Bryan: No, whenever I’m thinking I don’t look at the . . .

Andrew: Okay.

Bryan: Whenever I’m trying to recall something, and that’s another thing. If you ever look at it like human psychology, there where somebody looks it will show where they’re trying to place information. If you look down, or look left, or look right you’re trying to process information in your brain in a different place.

This is the kind of stuff you end up looking into as you’re trying to convince 50 or 60 year olds who have 10s of millions of dollars to spend with your company. How are you going to persuade this guy?

Andrew: This is your business. This is what you’ve been doing now for how many years?

Bryan: Ten.

Andrew: Ten years. All right.

Bryan: Go to this last email.

Andrew: Yeah.

Bryan: Because this one’s good for everybody. If you have somebody who’s not responding to you this is the permission to close your file email. Literally, it gets the unresponse’s person to respond in conjunction with the pendulum technique. What is it that you call?

Andrew: For me it’s, with interviewing it’s called, well, it’s not that’s it’s called, we call it, join the resistance. I ask someone what about some difficult times in business? He goes, I have no difficult times. Was there any challenges at all? He goes, no, everything just floated really well. They’re resisting my request for them to open up, which makes for a very boring interview and unopen person.

Instead of fighting them the way I used to now I join their resistance to me. I go oh, then everything must have gone smoothly for you. I’ve seen businesses and heard businesses like this where nothing goes wrong and everything just turns out well. Congratulations, you’re really lucky to have had that. If I join the resistance they shoot right back and they go, are you kidding me? Easy. I was up late last night and the server was down. You know who has to take care of it? I have to take care of it.

Five years ago there was no one else except for me. We didn’t even have a server. Anyway, you call it the pendulum technique. Why?

Bryan: Say, here’s this pendulum.

Andrew: Yup.

Bryan: If you’re pushing it this way and you want them to go this way and they’re saying, no, it was always really easy and great. What you do is you push the pendulum way up here. Oh, it sounds like this is just really easy for you. That’s awesome you’re whole business and career is worked out so great and you never had any issues. They’ll say, wo, wo, wo.

Andrew: Yes.

Bryan: They’ll come back over here and say no, it wasn’t always that easy. I had struggle like anybody else. Guess who gets a call when the websites down?

Andrew: Right. To this day.

Bryan: Right. If I say . . .

Andrew: How does a pendulum technique . . .

Bryan: Wait, before you do that can you sell me this pen?

Andrew: Can I sell you the pen?

Bryan: I’m just teasing.

Andrew: Oh. I thought I was so clever. It was in one of my management books in college as an interview question. Sell me this pen. That was one of my questions for sales people at Mixergy.

Bryan: Really?

Andrew: I mean, not at Mixergy. My past company. Let’s just wrap this up with this. What are we saying here and how does it relate to a pendulum?

Bryan: Yeah. They haven’t responded. We get that they haven’t responded. You are now politely stalking the person. It matters to you. Right. These are the people, when it matters to you and you feel uncomfortable sending this, this is when you send this. Essentially, just say I’m writing to follow up on the emails I sent. Excuse me, the email, or call, or whatever happened.

Andrew: Okay.

Bryan: You always have to customize it. Something just happened, right, which is I just met with my business partner, or everyone has a sales manager, or I just met with my CEO.

Andrew: Okay.

Bryan: My CEO asked about the account.

Andrew: There’s some excuse for something that happened recently we have to bring up.

Bryan: Right.

Andrew: Okay.

Bryan: Which probably happened, may or may not, right, something logical.

Andrew: Okay.

Bryan: I’m in the process of closing files for the quarter, right, or for the month, or whatever. I’m in the process of closing files of everyone I’ve talked to in the last six months, or for all the proposals I’ve put out there. Whatever you say. You just tailor it. Nobody knows what closing your file means.

Andrew: Okay.

Bryan: That’s why it works so great. Typically, when I haven’t heard from someone it either means they’re really busy, or aren’t interested. I know everyone’s really busy, right. That’s just a set up for not being interested. Really busy also means that I’m not making them wrong because I literally, written them twice and called them twice and left voicemails. I’m thinking about them and their not thinking about me.

It gives them the permission to say, hey, I’m not interested, or hey, yeah, I’ve been meaning to get back to you. If you aren’t interested do I have permission to close your file? If you are still interested, or if that’s not the case what do you recommend as the next step?

Andrew: I see.

Bryan: Eight out of ten people will respond because you’re now going away. Back to the pendulum. You get where they’re at. You’re not making them wrong to do it. You make it really for them to respond. You can use this in the fourth email in the sequence. You can use this for all those, write this down right now and send this to two or three people. Then just email me at brian@breakthroughemail.com. I get emails all the time. Dude, it actually worked.

Andrew: Even if I haven’t followed up with people with two other emails. If I’ve emailed someone and they didn’t respond I should be following up with them with this. Use the pendulum technique and then when I get a response I should forward it over to you, Bryan@breakthroughemail.com.

Bryan: I just love to hear the successes. This is one of those easy templates where it works.

Andrew: I get it. You’re taking away an opportunity from them completely, and so if they [??] respond.

Bryan: Think of it like dating. If you’ve called a girl two or three times and left voice mails, and emailed her. Are you going to keep calling her? No it’s creepy. As sales people we do that stuff all the time. We live in this other context of, “I’m the subservient person to the real decision maker.” They can tell me to jump whenever they choose. It’s their job. [background noise]

Andrew: Then we end up creeping them out also if we keep doing it.

Bryan: Then they’re in total control. The whole point of this thing is to be in control and know where you are.

Andrew: All right. The website…

Bryan: I got a two year old who is ready to hang out.

Andrew: You know what I get it. You’ve been now, with everything else now, you’ve been on the phone for over two hours. I will just tell everyone, if you’re watching and you want to follow up breakthroughemail.com is the place to do it. They can also go to what? It’s breakthroughemail.com/pro break…?

Bryan: Pro is the course and Upgrade is the…

Andrew: If they want to take a full on course with you to get more, that’s where they should go.

Bryan: Exactly. I hope this is valuable…

Andrew. Really valuable.

Bryan: I would have spoken a bit longer. I started this company because I had all these problems. It was brutal for years. People create products they just need to know how to get it into the hands of the right people and the right customers. Literally, a couple of people can change your business and it doesn’t have to be that hard.

Andrew: Thank you so much for doing it. I’ll let you go spend time with the family. Thank you all for being part of it. Bye guys.

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Master Class:
How to sell to businesses
(So you can double your growth)
Taught by Mike Michalowicz of The Pumpkin Plan

Master Class: Selling to Businesses

 

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Transcript

Andrew: This session is about you. You, you, you, the viewer, or the listener is that’s how you prefer to take in these programs. How you can sell to businesses more often, so you can grow a successful growing business. Grow successful growing business. Yes, I want double the growth of any other program in this session.And to help us do that, and, actually, to lead us through that I invited, I asked, I kept pressuring, and, asking, Mike Michalowicz, to come on and teach. He is a founder of two multimillion dollar companies, which he built, and, sold. Since then he has transitioned to writing books, and, teaching.I specifically asked him to come here and teach this because the companies that we use that we’re clients of, when I ask them how do you get your customers they say, well, there’s this book called, “The Pumpkin Plan.” As they talked about it I kept saying, all right. Then let me get “The Pumpkin Plan’s” author on here.”The Pumpkin Plan,” let me bring up the book right there. It’s a simple strategy to grow a remarkable business in any field. That’s what the book’s about. My name is Andrew Warner. I’m going to help facilitate this. We pulled out ideas from the book that will make it useful to the Mixergy audience. Mike, thanks for coming on here, and, teaching.Mike: Andrew, I’m pumped. Thanks for strong arming me to get me on. It took you about maybe one half of an email saying, would you want, I’m in, I’m in. . . . [??] . . .Andrew: You know what actually, then maybe . . .

Mike: I’m in. So thanks. It’s really an honor to be here.

Andrew: Well, thank you. You know what? I think what happened was I sent you an email, maybe to the wrong address, and, you didn’t respond. I said, oh, no wonder. Mike’s gotten so big that he’s outgrown Mixergy, and maybe it was the wrong email address because you’re right. When I did send the most recent email you said, yeah, absolutely. I mean it. I’m really grateful to you for doing that.

Mike: Oh, my pleasure. I hope I never get that big or that into myself that I think I’m that important to blow people off ever. So thank you.

Andrew: My pleasure. I’m glad that you’re here. This is the man that, you were here years ago. Here, let me zoom in on you. The guy in the upper right.

Mike: Yeah.

Andrew: You were running OMIC systems. You had a million dollar business at the time. You must of been happy. Except you say you felt like, well, here, like that. Why? What’s wrong with running a million dollar company?

Mike: That’s a funny picture. I’m in the top right, of course. The other two guys ultimately became partners. The guy on the left, his name is, Barry, he and I co-founded the business. Then, Chris, in the center, he was our sales guy. Ultimately, came in to take 1% of the business.

Today, the guy in the middle, Chris, he owns 100% of the business. He leveraged some money with private equity and acquired the business from us both. I went into that, Andrew, thinking that life was about grow a business, that wealth happens by growing as fast as possible, bigger is better, all that stuff.

I never considered my passion or purpose in life and application in business. So as our business was growing I wasn’t satisfied. We hit a $1,000,000 in revenue. We bootstrapped it the whole way. It took us five or six years, which isn’t phenomenally fast growth, but it was growth.

When we hit $1,000,000 it’s like, damn, this isn’t success. It must be at $2,000,000. We hit $2,000,000. I’m, like, oh, it’s not a success. It must be at $10,000,000. It was at that point I talked to those other two guys, and said, “Listen, we got to be a $10,000,000 company. The only way we’re going to get happy is if we’re rich enough, if the company’s big enough.

And, those two guys, Barry and Chris, said, “You know what, Mike? Our lifestyles are covered. We’re very happy with our lives. So we’re going to get some money, and we’re going to buy you out. You go build something on your own. “That’s when I left. They bought me out, and they continued to run the business.”

Interestingly, today it’s just, Chris, now. The guy at the front and center. He’s running the . . . [??] . . .

Andrew: As I understand it, though, when you were doing the $1,000,000 in sales, it wasn’t a $1,000,000 in profit. There were high expenses at the time, right?

Mike: Oh, my God. $1.1 million in expenses. I can’t believe how dumb I was. I really thought, Andrew, a $1 million in revenue meant the owner was taking home probably $900,000, but every penny we made as the business grew it was like a cash eating monster. Every time the business grew a little bit, it ate more money.

It was scary. Once you run a $1,000,000 business, just in salaries we’re paying $50,000 a month in salaries. If we had one bad month, I didn’t know how I was going to cover payroll for everybody. It’d be more stressful as it grew.

Andrew: I also want this conversation to be especially helpful to people who are looking for customers. One of the challenges that I imagine you had back when the site looked like this, we’ll talk more specifics, was finding customers. It’s not just about design. That’s not the reason I put it up there.

Andrew: One of the reasons I put it up there is because it says in really small letters, OMIC is the pioneer computer network integrated for small and medium sized businesses in New Jersey. Maybe it wasn’t this screenshot, actually, where you were basically appealing to everyone, and that’s one of the issues that you are having.

Mike: Oh my gosh, it’s the greatest flaw. It’s funny to see that picture. That website’s from 1996. It’s really cool you brought that back up. But back then, I followed the protocol that I thought was appropriate for growth, and which almost every entrepreneur follows. It is serve anybody and serve everybody. Every customer is the right customer.

So in there, we have an offering suite of, we do Novell Systems, and Microsoft, and LANtastic, and peer to peer, and all of those things that we can do, and we can do it for anybody. I’ve come to learn the lesson, if you say anybody is a good customer, nobody is a good customer. You have to be focused. It was those stages, what you’re looking at right now on the screen, that stage of my business that we couldn’t grow. We were trying to sell to everybody, but we weren’t special to anyone.

Andrew: Okay. So let’s talk about how to get all of those customers so that we can grow. Here are some of the ideas that I thought were especially useful to the audience, some of the ideas directly from the book. One of the first things you say is to narrow your focus to the sweet spot, and you talk about this gentleman. I found his YouTube video. There he is. He runs a company called ECU Repair. Here is their website.

Mike: Oh, I know that gentleman! It just popped up on my screen. Yep.

Andrew: Yeah, it is a little bit of a delay for you, but people are seeing it in real time. There’s his company right there.

Mike: Yep.

Andrew: How did he do that?

Mike: Yeah, so that’s George, his name’s Jorge, he goes by George Morales. He read “The Toilet Paper Entrepreneur” a long time ago, reached out to me, and we became friends. Here’s what the sweet spot is it’s the intersection of three things.

First of all, your uniqueness. I’ve come to discover that businesses that play into the owner’s uniqueness are the most successful. Here’s how you define it; if your business has become your soul-mate, truly your soul- mate, you are now playing up your uniqueness. You have to have a unique offering which is an expression of you, yourself. But that has to intersect with demand. I mean, if no one wants it, you’re not going to sell anything.

But if you have top clients, meaning great clients that you love to do business with, and they love to do business with you, and they’re buying from you repeatedly and they want that uniqueness, now you’re starting to build the seed. There’s one more element, and it’s systemization. Meaning your business has to be able to run on automatic.

What I mean by that, is if you’re landing prospects, converting those prospects to customers, collecting revenue from them, delivering your offering, all while you’re sleeping. Meaning if you can go full-cycle while you’re not even consciously involved in the business, and there’s top customers that want it, and it’s truly unique in the market. Now you’ve hit the sweet spot, and you have potential for colossal success.

Andrew: So for him, the video that I was showing up on the screen earlier was about Porsche, the Porsche ECU. I don’t even know what ECU is frankly, and I’ve watched his video still. It’s these little boxes that go in the car. Is that what it is?

Mike: Yeah, I think it stands for Equipment Car Unit or something like that. It’s the computer system that controls the performance of the vehicle.

Andrew: He decided, as I understand it, to specialize originally in Porsche and BMW, and by doing that what happened? By narrowing there?

Mike: It was interesting. First, he said, “We’ll do ECUs for any kind of car.” Then it was so many different technicalities, that every time he was trying to fix a computer for a new car it was a new learning experience. After we spoke, he’s like “I’m going to refine down to just Porsche and BMW.” Now he became efficient. He has become the worlds best at it. He can outperform anyone else trying to repair an ECU for these cars because that’s all he does.

So in our businesses, we actually want to have a common need from our clients because that will allow us to repetitively provide the same solution, which therefore brings efficiency, which brings the ultimate gold pot, profitability.

Andrew: So let me bring it back to one of our members. We’ve got someone in the audience who’s running a content creation business, really high-end content. He’s looking for the bigger agencies that represent lots of clients to be his customer, and turn to him for content for all of their clients. Should he be focusing more narrowly than just saying “I want agencies who are working with big clients?” How does he do it?

Mike: You totally need to go more narrowly. Basically, my argument is this, identify your niche. Then once you say, I’m just going to work with any big agency, if that’s what you feel your niche is. Then say, how many competitors do I have that when I do an Internet search, also qualify for this. If you find more than four or five competitors, you are way too broad still. You got to narrow, narrow. Start at the top. Take your first slice. If there’s a lot of competition, take another slice. If there’s a lot of competition, keep slicing down until you get to more narrow.

The great analogy is the old doctor analogy. You can be a heart surgeon or you can be a general practitioner. The problem is that with the general practitioner is he’ll take someone with a cold, like I have a cold right now, to someone that is having a heart attack, but when you come in and he does his initial examination, if it’s something severe, like a heart attack, he has to refer you out to the specialist, because he doesn’t have the skills to do it.

The specialist then dictates a huge premium. The heart surgeons are making millions; the general practitioners are barely staying afloat. Well this analogy plays across to our businesses. If you become the general practitioner, “We serve any big agency that needs communications.” You’re a general practitioner.

People may come to you initially, but when it comes to that specialty where they’re going to pay a super-premium, because maybe someone’s attacked their website, and there’s this horrible slander up about them. They’re going to go to a firm that specializes in taking care of that now and they’ll pay a premium. So, get narrow, get narrow, get narrow.

Andrew: Okay. In a moment we’ll talk about how to get narrow, narrow, narrow. Let me make sure that I understand. This is the chart you were talking about earlier, right? You were saying it’s got to be unique. It’s got to have those top clients and it has to be systemizable.

Mike: Yah. Yah and if you look at that, some people get only two parts. A lot of people do something that they feel is unique. By the way I believe most businesses aren’t unique enough, but you’ll see there on the right side, most people think that they have something that they’re doing that is unique and they have certain clients, what I call top clients or clients who you love doing business with and they love doing business with you. They pay well, they pay quickly.

A lot companies are at that intersection where if you only have those two your almost called the dollar for hours trap and what the trap is there is that it’s unique and top clients want it, but it’s not systemized. The owner is responsible to do the majority of the work. They have to micro manage it. They have to run and put out fires. Your growth is trapped because it’s only base on your availability. It only the intersection of all three of these, now can you facilitate perpetual, big-time growth.

Andrew: Okay. All right. Let’s move onto the next big idea that I’ve highlighted, which is to focus your business on a niche. You did that. I want to understand how to do it. You did that at this company. Let’s bring up PG Lewis. No photos of you from the time. I couldn’t find them anyway. You focused on lawyers with your data forensics business. So how did you know to focus on lawyers?

Mike: Yeah and then we went even deeper. So that was just getting started. I started it with a guy called Paul Lewis. We decided, he already had the shell of the company called PG Lewis, we decided that calling it PG Lewis and Michalowicz would be too difficult for people to say, so we left it as it is. As we built this we identified what clients are our service resonating with.

Now this was computer crime investigation was the essence of what we did. We started off with lawyers and we started off with corporate security and then we started seeing who are we resonating with. Who comes back to us the most? Who is most impressed by us? It was lawyers, but it wasn’t any type of lawyer it was actually criminal defense, white collar criminal defense attorneys.

So once we figured out these are the clients that are enjoying our services and benefitting from them the most we started saying no to everyone else and started focusing just on these customers. And what happened, within a year of this focus, the Enron trial broke and guess who got the Enron trial?

We were at the right place at the right time serving the right market, that we were the heart surgeon to pick. So we, along with a couple of other companies, we got that trial and my company went from this doing well startup to just explosive growth.

Andrew: So it’s a matter of starting off narrow and then looking to see who is most connecting with you; which customers are most eager for the work you are doing?

Mike: Yeah, it’s really simple. I believe people speak the truth through their wallets and not through their words. So if you ask customers, “How am I doing?” Most customers will say great, but I don’t care about that, because they may never do business with you again. What I do care about is the ones who spend and buy from you repeatedly. You have to monitor the revenue and cash flow coming in from clients.

The one that generates the most revenue, pay the quickest are you showing you through their actions that they truly value you. You then need to get inside their minds. You need to understand their market as best as you can, perhaps even better than they understand their own industry, and then cater to it.

Andrew: Okay. All right. That’s very helpful to figure where to start focusing. Let’s go onto to the next big idea, which is you’re telling us to fire clients that are holding you back.

Mike: This takes courage. This is where the cojones are. And this is where most businesses fail ever to grow.

The analogy I use, that’s from “The Pumpkin Plan.” In my book I talk about a pumpkin field. What I explain is as a pumpkin’s growing ordinary farmers allow other pumpkins to grow on the vine. They’re in the quantity game – the more pumpkins the better.

But what’s interesting is colossal farmers will actually when they see a little pumpkin growing instantly cut it off the vine. Because they know it’s taking the energy, it’s taking the nutrients away from something that could be colossal. They know for something colossal to grow it must be protected, and any distraction must be removed.

Well, the truth is for our businesses to grow colossally… Excuse me. For our businesses to grow colossally we need to have the discipline of killing. I’m not saying actually killing, but removing bad clients. They take a disproportionate amount of attention, a disproportionate amount of emotional energy, and in most cases your weakest clients actually cost you money.

They’re the ones who don’t want to pay you, don’t think you did the service right. You have to redo what you do. They’re complaining. And, you actually end up losing money.

One last thing. There was a study by a company called Strategex out in Chicago of about a thousand companies. They did this analysis similar to what I’m telling you – who paid the most money, who paid the least. But, they also did a profit analysis.

They found that for these thousand companies the best customers, the top 25 percent, generated 150 percent of the company’s profits. Which, at first glance, how can a company have 150 percent of profits? Well, when you look at the bottom 25 percent of clients, they resulted in a net loss of 50 percent of profit, which meant the top clients were actually covering the bad clients.

So if you have the courage to get rid of your weakest, weakest client, even if you just start with one, usually you’ll see a little bump in profit. [??]. You have to get rid of the related costs. But, you’ll also feel a relief of distractions are gone. The draining emotion that you felt for this client is gone. It’s a huge relief to get rid of the weak clients.

Andrew: David Hauser, the founder of Grasshopper, how did he do that?

Mike: Yeah. They were fascinating. When they started up their company… They are a wild success in the voice over IP market. When they started their company they focused on small or medium sized business. Anyone who needs a phone system is a perfect client. While technically that’s right, you’re not catering to a market. So, they don’t see you as the heart surgeon in their industry.

They decided to pick entrepreneurs. What they simply did was they realized that as people are getting the phone systems that people most thrilled with the phone system were brand new startup businesses, entrepreneurial businesses.

The one thing David was telling me that kind of triggered this off was they have a voice message or voicemail to text translator. It’s kind of weak. Like, if I left a voicemail for you saying hey, Andrew, I’m looking forward to talking today, it may say hey, Andrew, I heard there’s a turtle walking around the house.

What they found out was most companies were not tolerant of that, but entrepreneurs were able to digest at least hey, it’s Andrew, I should listen to this voicemail. So, entrepreneurs were tolerant of it. When they realized that they said that’s who we’ve got to commit to, and they put all their attention on entrepreneurs. And, the business has taken off explosively.

Andrew: And you can actually see it here. I’ll just draw some arrows for people to see it. You can actually see it in their marketing.

On the page that I showed earlier it says entrepreneur at the top in the sub head. It says entrepreneur throughout the site. Their marketing is geared towards entrepreneurs, including those viral videos that they created.

I actually remember them, Mike, as being the phone service that even actors in New York would use so that they could apply for work and have a call go into their professional number. But, I imagine that actors in New York don’t need as many features like multiple extensions, like different kinds of voicemail, so they’re not nearly as profitable, not nearly as worth focusing on as entrepreneurs.

Mike: Yeah, yeah.

Andrew: This was before they even changed their name to Grasshopper. I believe they also have a lot of actors as customers.

Mike: No, I believe you’re right. They had a lot of [??], but the thing was they weren’t dominating in any single one. So, while they were bringing on customers they weren’t so profitable. And, when an actor is disappointed with their phone system because it’s not relaying a message within seconds – and I’m just making that up hypothetically – maybe a different complaint then they’d receive from an entrepreneur than they would from a Fortune 500 or some large division that was trying out their system.

By dedicating just to entrepreneurs they started coming up with innovations just for the entrepreneurial community.

Andrew: Okay. And, I can see how then that marketing starts to speak more to entrepreneurs. They feel like, well, all right, this does make sense for me. Even if I don’t really think I need a phone service, if they say there’s a voice for entrepreneurs I might ask myself, why am I the only entrepreneur that doesn’t need this phone service? Why am I the only one who doesn’t want all these extensions? Then you start to consider their offering.

Mike: Yeah. Their branding’s amazing. What happens is the second you see their website you know you’re home. As an entrepreneur you look at their website it’s, like, I’m home. This place can take care of me. If you’re an actor, and, you land on their website you’re, like, this isn’t for me.

And, that’s what you want. You want to polarize your prospects because if you are, people that it resonates with, it will be so obvious to choose you. For the other people they’ll leave. That’s what you want. You grow by uber catering to the best prospects.

Andrew: All right. Let’s go on to the next big idea. It’s to give your best clients the VIP treatment. Mike, I like to go back, and, find YouTube videos, pictures of the people you’re talking about, but, for the example for this session you talk about a guy named, Tommy Munich, and you use a pseudonym. You think, all right, I’ve got the Internet. I’ll go find out who Tommy is.

Mike: It’s Tommy Munich.

Andrew: I couldn’t find him. I couldn’t get a screenshot, or, anything. I think there’s a reason you use a pseudonym for him because of what he did. What did he post around his office?

Mike: Oh, Okay. Yes, so, what, Tommy Munich did, it was a pseudonym, he had a company that was catering. I don’t know if you can see it, but, I have one of these things on these little chachki things, these bracelets. It’s like the, Lance Armstrong, livestrong type bracelet.

He made all the knockoffs, Tommy did. What he did was his number one customer was Walmart. Now, his business was doing about $2,000,000 in revenue at the time. His number one customer in revenue was Walmart, but, what he realized was he couldn’t service Walmart the way they required to be catered to.

Walmart requires that you deliver your packages when they order them on a Monday, for example, between 10:00 and 10:30 a.m. If it doesn’t arrive during that time frame, that window, they will actually penalize you. They’ll withdraw some money. If the skew on the box isn’t one inch below the lip line they’ll penalize you.

He realized Walmart’s not a bad company. They were just a bad customer for him. He couldn’t cater to them. Well, what he did was he took a piece of paper, and, he wrote on it very simple instructions for is colleagues, and, himself. He said, when the phone rings and Walmart’s on the phone, or, whoever the caller ID is, answer it on the first ring. That’s our policy. We answer it on the first ring.

He goes, if you’re on the phone with Walmart, and, the next call comes in from out number two customer, which was the Dollar Store, if the Dollar Store answers tell Walmart you have an emergency, and, immediately hang up on them. Conversely, he said, if the first call comes in from the Dollar Store, when Walmart rings, let it go through to voicemail.

Our moms told us treat everyone the same. Treat everyone equally. That’s a bunch of hog wash. Maybe with you friends, your social network, but, when it comes to business you have to cater to your true best customers at the direct, and, deliberate discount of your secondary customers.

The funny thing is sometimes you’re number one revenue customer isn’t your best. Tommy, I almost said his real name. Tommy wasn’t making money on Walmart. He was making a little bit, but, the Dollar Store could make a lot more. The end of this story is what’s amazing. That’s why I don’t disclose his name.

He became very wealthy through this one little strategy. Within a year Dollar Store has doubled its business. It replaced, basically, what Walmart was doing. Within two years all the knock off companies, not knock offs, but, the similar ones. Family Tree, Family Store, like, the Dollar Store, came on board because none of these companies before had ever been catered to so well.

Tommy’s company was within three years, of doing this one strategy, they existed for 15 years had gotten to $2,000,000. Three more years they were at $15,000,000, fourth year, $22,000,000, and, he sold the company.

Andrew: Is it because when Dollar Store became their number one client did they start taking their calls first? Ahead of even Walmart? Is that the way . . .

Mike: Yeah. Oh, he instantly. Once he identified Dollar Store was the number one client. Now, they weren’t based upon revenue, but, he realized, this is the company he enjoyed doing business with most. He could care to, and, cater to their specific needs the best. He could service them best. That was the day he decided they will be his number one customer.

Andrew: I see..

Mike: And, yes. He . . . [??] . . .

Andrew: Then, once you decide that, they get the VIP treatment. The call gets answered first by them. The service goes first to them.

Mike: VIP to that customer. And you start . . .

Andrew: Okay. And, I think you said he sold his company for $30,000,000. Is that right?

Mike: Well, it was at $22,000,000 in revenue when he sold it. You may be right. I can’t remember the exact number.

Andrew: Okay.

Mike: Ironically, I’m going on vacation on a retreat with him to Costa Rica next week. So, I’m going to ask him, and, if it was $30,000,000, damn it, he’s buying drinks.

Andrew: He might buy drinks anyways.

Mike: Yeah. He probably will.

Andrew: He sounds like a good guy.

Mike: He is a good guy.

Andrew: All right. Next up is to systemize our business. This is one that took me a long time to except. If you would’ve shown me this. This is what our producer took a screenshot of. Let me see if I can show it up. If you would’ve shown me this, it’s one of those airline safety card processes that’s found on a plane, and told me, Andrew, this is what you want to model the way you run your business on, I would’ve said that’s not the way a fast growing tech company should work. That’s not the way an ambitious entrepreneur should, but you say we should. Why?

Mike: Yeah. That, I believe, is the foundation for all systemization is the airline safety card. I call it the airline safety card method. Here’s what it is. That card communicates to anyone that speaks any language. You don’t have to speak English. You can speak any language and understand how to navigate that situation.

You can safely open a door that weighs 600 pounds and you can be 90 years old. You can be located floating in this massive ocean of water, should you be in that situation, because of this. You can survive potentially the most dangerous situation you’ll ever face in your life because of this.

And you don’t need to be trained on it. If you were given all the instructions on how to step by step survive a plane crash we’d all be dead. This card has simplified everything.

Well, we need to do the same. This card simply represents the actions of the systems behind it. The doors are mechanically designed so that they can be moved, even though they weigh so much, so easily. So much research has gone into the safety vests that with one pull it inflates and starts sending out a beacon. All these thoughts and processes have been put in place so you as the user of it can execute it instantly and without even knowing the language.

Well, in my own business, my forensics company, my second company in particular, we unveiled the airline safety card method. We were doing data collection, evidence. We were literally doing murder scenes… Not a murder scene, but murder cases, and we had to extract and encapsulate the evidence itself and then analyze it.

This is really complex, heady stuff, and if there’s one mistake, game over. The evidence is tainted. It can destroy not only the case, it can destroy the company. Well, one way to do this that most people try to handle it is hire really experienced people. Hire the most elite people in the industry. The thing is we can’t afford them. They’ll put us out of business. If they’re really that talented and experienced they can [??] such a premium it’ll put us out of business.

So my partner and I, our plan was we’re going to hire the people with the right energy, attitude and intelligence, but these are going to be people right out of college that want to be in forensics. The only way we’re going to be able to accomplish these tasks is if we have our processes so tight that they can follow step one, two, and three and get the job done.

Yeah, this… Well, one last thing we did is the way we test the system now. I had an assistant at the time. Her name was Patty. Patty had no technical understanding. It was the Patty rule. If we can get Patty completing certain tasks we know our airline safety card is there.

So we would try something out, have her test it. It was frustrating. It took us months and months to develop the smallest, easiest things. But once Patty could do it, we knew we had it set and we were on to the next task.

Andrew: I want to see how it ties back into the goal of the session which is to get more customers. But, I’ll tell you how one of your fans is using it. This is a company called the WP Valet. They manage Mixergy. They implement all the tech on our WordPress site. You can see here on the left one of the big things that they do is migration. They have something like the Patty test. Can they take someone… They have a guy on the team who doesn’t have a tech background…

Mike: Right.

Andrew: …and can they give him a checklist and have him migrate a website, a WordPress site, from another service onto the service that they prefer which his WP Engine. By creating that checklist they allow just about anyone on the team to migrate a site, and they get paid well for migrating websites.

The question I have, then, is how does that help a business get more customers? I understand that this systemization helps a business produce for the customers they get. But, how does it allow us to get more customers?

Mike: Because it caters to our needs. You know, the thing is once you start refining the type of customer you’re working with you get a recurring sequence of problems. It’s usually a set of 5, 10, maybe 15 problems that you run into repeatedly. So, every time you enhance your system a little bit more you’re addressing that problem better, more acutely, more directly, faster.

Customers are thrilled by it, because a good system solves their problem. I mean just think about McDonald’s, for example. McDonald’s is the leaders in convenience. Anyone can make that hamburger. You or I could go into McDonald’s and within the half hour we could be making the exact same hamburger as any other person in that place.

Now, for the consumer this is a benefit. Because I know any McDonald’s I walk into anywhere it’s going to be the same crappy hamburger, but it’s going to be the same hamburger. There’s absolute consistency. I know my problem, hunger, will be addressed with the exact same flavored thing each time.

Now I’m not saying that makes everyone a customer. But once a customer experiences that consistency, it does build loyalty. I would never say, I always hang out at McDonalds, but when I’m hungry, and there’s a couple minutes, and there’s a diner over next to a McDonalds, I’m going to McDonalds because I don’t know what to expect from that diner.

Andrew: Okay.

Mike: That’s why it works.

Andrew: And what you’re saying too, is if the business cannot be systemized, going back to what we talked about earlier, if the business or the service that you’re offering can’t be systemized, then…

Mike: You’re in the dollar per hours trap.

Andrew: … you’re in the dollars for hours. I see. That’s the problem.

Mike: It prevents scaling, yeah. And that’s where so many businesses are. So many businesses are limited in growth because they haven’t systemized it.

Andrew: Okay.

Mike: There’s a lot of …

Andrew: I look at you and I say, hey, my business cannot be systemized, would you tell me, hey, you know what, you either systemize it, or maybe find a different business …

[??]

Mike: Dude, I would grab that beard of yours and start pulling the hairs out. I would give you that much pain.

Andrew: Wow.

Mike: Because I would say, bull, total bull. Any business can be systemized.

Andrew: Oh really? Okay.

Mike: Any business can. Here’s my favorite example. Here’s a sneak peek into a book that’s not coming out for another five or six years, but I’ve started it. It’s about systems. And I wanted to figure out what was the one industry that cannot be systemized, period. Like, what would people challenge me on? And they said it’s fine artists.

If you’re an artist and you do paintings and so forth, it can’t be systemized. And it can be. I found an artist, his name is Peter Lelly [SP]. He was an English artist. He drew and did paintings of the royalty in England in the 1800’s. The guy became an equivalent of a multimillionaire back then because he introduced systems. And this is what he did. It was pure genius.

He knew there was certain artistic talent he had to do it. It was the painting of people’s faces. But the vast majority of the painting, actually, is the background, the body, the pose of the body. He did, basically, a color-by-numbers. He came up with six poses, and then he would paint the face of the person, then he’d yell over to another colleague and say, hey, throw number three. Pose number three on this one, and finish it out.

Andrew: Is this him?

Mike What? Don’t tell me you have a picture of him.

Andrew: Yeah, yeah. I think that’s the stuff. Right? I’m actually seeing the similarity in the poses, now that you mentioned it.

Mike: Yeah, and that’s his face. The people you notice, it’s like, wow, they always have a similar pose. He didn’t do that part. He produced paintings at a level of about 20 times more paintings than his nearest contemporary. He had a prolific impact and became world famous, at least for the time from that. He had a horse named after him, which is a big deal, I guess, back then. And he was knighted, and he became a ga- millionaire. So if this guy is a painter and he can systemize, none of us have an excuse.

Andrew: By the way, what are these questions? Does this decision better serve our top customers? Does this decision improve or maintain our area of innovation? Does this decision grow or maintain our profitability?

Mike: Yeah, I call that the key three. And what these questions are, and when you are faced with any challenge, or any opportunity in your business, you have to qualify by going through these three questions.

Now let me give you an example. Say, you’re redesigning your website, and you’re considering putting graphics on it. Well, the first question about some of these graphics, do these graphics better serve my top clients? Because if I’m not doing something that better serves my top clients, I’m diluting myself. If you can say yes to that, then you have to go to the next question.

So, yeah, these graphics will better communicate my top clients, but the next question is, does it maintain or improve my area of innovation, meaning what makes me unique. And if my area of innovation is convenience, meaning I make very complex, heady concepts very simple. That’s what I believe my company’s mission is.

So will these graphics not only serve my best clients, will communicate the complex message very simply? And if the answer’s yes, I still don’t do it until I can say yes, definitively, for the third question, and will it make me profitable? Meaning, maybe these graphics, or something, cost so much money that it’s going to cost me more than I can afford. Well then, don’t do it.

But maybe, it’s something that will bring profitability, or at least sustain and it won’t affect me negatively, then do it. A lot of companies make decisions because they feel it’s right for the client. They think it’s right for them, but they ignore profitability and that’s death by a thousand cuts.

Andrew: All right. Onto the next big idea from the book? Get your client’s wish list. And you talk about how these guys did it. This is Jeff and Scott. There they are. Jeff and Scott ran, what’s the name of the company now?

Mike: I don’t remember.

Andrew: I find it up on my screen, I usually will underline these things quickly. They have, where is it? Jeff and Scott, friends, I can’t think of the name of their company. After being laid off from their jobs at Pfizer, Jeff Stanbauer [SP] and Scott Weintraub [SP] decided to form a company based on their own wish list that they were unable to implement at Pfizer. Jeff and Scott have developed a proprietary process that gave them the business named Healthcare Regional Marketing.

These men went to their clients and built a wish list. Meaning they went to their best customers and asked, “What do you want from us? What can we do to really cater to you?”. Scott had a real interesting approach. Their service, just to be clear, is regional marketing.

For example, you sell aspirin in Chicago, and you have a three percent market uptake; meaning three percent of people who could be purchasing aspirin are in Chicago. But, in New York, you are at five percent. The company will evaluate what you’re doing better in New York, that you could be implementing in Chicago. Healthcare Regional Marketing will also analyze the demographics and use those variables in their decision. They take marketing lessons nationwide and have built them into regional areas as well.

Healthcare Regional Marketing went to their largest prospects that they could imagine, although they weren’t customers yet. They informed the prospects about how they were developing a new software, and asked the prospects advice and direction on improving said software. In addition, they asked to allow fifteen to twenty minutes so the prospects could give them critical feedback about how the men could improve the technology.

Here is the key to his sales tactics; Scott would never try to sell the software to the prospects. He felt attempting to sell would only undermine his credibility. He would simply seek their advice on how to improve the software. The prospects began convincing themselves that they needed this software. Scott would then return with prototypes for the prospects to check. Healthcare Regional Marketing simply asked for advice from prospects, then began building each prospect’s particular wish list.

According to the article from bizjournals.com, Healthcare Regional Marketing has a ten to fifty million dollar business. In order to have a business with similar monetary income, here are a few things to add to your check list: speak with your best clients, find out what they want, get their wish list, and learn from them. Ask questions about what you could improve on, and what they like most about your business. A final note, make sure you get referrals from clients, and make sure you don’t make things awkward by attempting to force your business on anyone. How do I do that?

Mike: Yeah. The wrong way to get referrals, and this is a bone of contention with a lot of people, is to ask an existing client. The reason I think that’s a bad way to get referrals is it’s offensive. You just took money from your client and you’re like oh, this money is not good enough, I need your family, I need your friends.

It’s offensive. But, also it forms dilution. If I ask you for a referral, Andrew, to someone like you that I could serve, I’m not going to pay attention to you. I’m now going to pay attention over here to someone else. So, it doesn’t make sense to do.

There’s a better way to get referrals, much better way, and I call it the vendor well. This is how it works. Instead of asking you for someone else to work with, I ask you what other vendors do you depend on.

What you’re going to say to me is why do you care about the vendors I’m working with. My response is if I know the other companies you work with… Now, these aren’t competitors. I’m your computer guy. Maybe it’s your office cleaning company, maybe something like that.

If you refer me to these other vendors we can collaborate and serve you collectively better. If the office cleaning guy… Maybe my computer cables are in his way and he has to vacuum over. It’s causing a problem. If I can just communicate with him we can resolve that and serve you better. So, of course you’re going to make referrals to the vendors.

This is where the magic is. You refer me – this is you – up to your other vendors. They have clients just like you. Now, if I build a relationship with them they know the other Andrews of the world. If we collectively serve you better, and you’re happy, so is the other vendor. We’re going to start building this vendor network, and they’re going to make tons of introductions. Every single business I’ve owned that I’ve grown explosively, that’s the method I used.

Andrew: I see. Find the vendor well. Don’t say to the person who else do you know that I should be talking to to get business from. It’s who else is serving you, who are your other vendors. I want to collaborate with them to help you, and by collaborating with them to help your customer you end up building a relationship with vendors that have other customers like your customer. That’s the thing.

Mike: It thrills your existing customers. You’re catering to them even more. It’s the best way to grow your network.

Andrew: Let me ask you. Let’s come up with a real world example actually based on your experience. I showed this earlier. This is what the site used to look like. Throughout the site it actually says we serve all customers. You’re very generic and very open.

Mike: Yeah.

Andrew: Later on this is… Let’s fast forward a few years to… I’ll zoom… Actually, here, let me just move it down to where I start to see financial industry at the top tab.

Our specialty is financial industry. In the headline over there on the far right it says hedge fund association. So, you start to focus. Now, if you’re focusing as a tech supplier, tech consulting on the financial industry, what vendors do they have that you have the right to go and talk to and find more customers from?

Mike: Oh, it was amazing. Once we started focusing, and that was just the beginning, we ultimately focused exclusively on hedge funds. What happened was the hedge funds, for example, all relied on clearinghouses. So, one of the major vendors every hedge fund must have is a clearinghouse. But, there’s only like three or four big ones.

Goldman Sachs was the one we did a lot of business with. There were some others. These are the banks for hedge funds.

Once we were introduced to Goldman Sachs we had the keys to the kingdom. We thrilled Goldman Sachs, because we were catering to everything that they would want to see in their hedge fund clients. Then, Goldman Sachs would start referring us out. But, they were in their case such a dominant force. When a new hedge fund was getting set up and Goldman Sachs was going to be their clearinghouse, Goldman Sachs would say here’s our recommended providers. Use OMIC, Mike’s company, to be your computer guy. Use this company to be your trading desk. Use this, use this.

They would deliver the package. It’s kind of like your lawyer saying… If you get an injury and your lawyer says I want you to see this doctor, you’re probably going to see that doctor. It’s the same thing. We got client after client from Goldman Sachs and other vendors we built relationships with in the hedge fund industry.

Andrew: All right. I love the concept of the vendor well. If people want to follow up with you, you’ve got a couple of great books out. And, the third, it’s on the way, right?

Mike: Yeah, yeah, you’re [??] there. It’s called “Profit First.” I’m really excited about this one. I consider books kind of like albums from different bands. Sometimes you’ll have the one hit wonder band. Sometimes you’ll have one that they have a couple of good albums but not many people know about it.

I think that’s what my books are. I think the word’s getting out on both my books, “The Pumpkin Plan,” “The Toilet Paper Entrepreneur,” but they definitely weren’t blockbusters. I feel the concept of “Profit First,” the new book, really is going to change business forever.

Basically, it’s this. I believe that most businesses do what’s called bank balance accounting. Most of us look at how much money’s in our bank account and then determine how we’re going to run our business based upon that. Even though we know we’re supposed to look at our income statement, our balance sheet, blah blah, very few entrepreneurs do, and the ones that do don’t even understand how to read it.

So in that book I’ve developed a system. I’ve used it for myself now for five years. I’ve deployed everything from a public company down to small startups. This is a way to manage your cash flow by simply looking at your bank balance and assure that your business becomes profitable starting today and it’s forever profitable and you as the owner take a good income.

Andrew: And we can preorder it right now even though it’s coming out in July. I’d love for you to come back and talk more about the book when it’s out. I would love to read the book.

Mike: Dude, that would be a privilege. I would love to.

Andrew: Thank you. You know what? I’m surprised to hear you say the book wasn’t a blockbuster but maybe once you get within a certain circle, that it feels like everyone is talking about it and maybe in my circle it feels like everyone is talking about the Pumpkin Plan much more than Toilet Paper Entrepreneur. Toilet Paper Entrepreneur was such a catchy phrase, such a catchy idea that maybe it even overshadowed you as a person. Don’t you think?

Mike: Yeah, “Toilet Paper Entrepreneur.” It was a very strategic move on my behalf. I decided I need to be edgy if I’m going to break into being an author, but I also recognize I’m going to disenchant [SP] a lot of people because I’m going to come with a lot of edge. It is authentically me, but it’s an edgy book. It’s an edgy book. It did what it needed to do. It garnished enough respect that this guy could actually maybe write books and it got the word circling around. But because it was so edgy, you’re right, it overtook my own name. I

was the toilet paper guy and everything was toilet paper this, toilet paper that and when I said my name was Mike Michalowicz they’re like what are you some Polish guy from somewhere? Like, who are you? I’m like, I wrote this book. “Toilet Paper.” Oh I know that book. “Toilet Paper Entrepreneur” admittedly was a sophomoric type of edgy read but I’m very proud of the content in there.

“Pumpkin Plan,” I started to understand how to write better. I think it’s more digestible. I think it’s still just as engaging. It’s not as offensive. There is my moments because that’s who I am and “Pumpkin Plan” for the long term it’s actually gaining momentum as it moves along. I think in the final analysis, “Pumpkin Plan” will be the bigger book for sure.

Andrew: Well, thank you so much for coming on here talking about it. If people want to follow up with you, they can type in Mike Michalowicz. Probably if they type in MikeMichalowicz.com they’ll misspell it a couple of times. The best way to do it is just type it into Google and then head over to your site.

Mike: That’s exactly it.

Andrew: And when you do one of the things I love about it is, I love how fun it is like you actually will pronounce the name right here if I mouse over it. It shows me how to pronounce it but I can click it. It’s pronounced Mike Michalowicz. Well, usually.

Mike: Yeah.

Andrew: I don’t know. Who did your site? This is a really well done site.

Mike: Yeah, her name is Liz Dobrinska. She’s my designer. The company is called Innnovative Images. Definitely check them out. What is cool about her, is every element in there was overseen by me. She’s one of the few companies that doesn’t say, here’s how we are going to design your site. She’s one of the companies that says let’s really get to know your personality and implement it into the site. That’s my true character you see there. I’m a goofy guy. I like to joke around. I like to be humble and kind of poke fun at myself.

Andrew: With a real serious message and frankly that goofiness, I was reading your reviews in preparation for this conversation, the reviews for “Pumpkin Plan.” This one guy who dinged you a star. He said it’s because he tells funny stories or something. I forget the word that he used. He didn’t use funny stories. I said that’s the point. That’s the part that makes it fun.

Mike: Yeah but that’s a good thing. I want to get dinged. Listen, I’m not looking for everyone to slam me, but I know if I’m not polarizing the community, I’m not being strong enough for the people who do resonate with me.

Andrew: I get it. I just want to win over everyone. I want every point. I want every star.

Mike: Yeah I hear you but everyone is going to get dinged. Your show is phenomenal but I’m sure there’s people like Andrew, it is too in depth. Why don’t you give me the meat and potatoes within seconds.

Andrew: Yes, I do get that.

Mike: Everyone is going to find a reason not to like it. That means you’re catering to the people that do like it so dings are okay.

Andrew: If you’re one of those people who thinks it’s too in depth, I’m sorry for making you listen all this far but frankly here’s the one thing you should remember. Vendor well [SP] I freaking love that phrase and I love the concept and I hope if you like that you’ll continue on and check out Mike Michalowicz’s website and his books. Thank you all for being a part of this. Mike, thank you for being on here again.

Mike: Andrew, absolute pleasure and I’ll see you for profit first real soon.

Andrew: You bet and feel better. Bye everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to wake up early
(So you can transform your life before 8 a.m.)
Taught by Hal Elrod of The Miracle Morning

Master Class: Wake Up Early

 

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Transcript

Andrew: This session is about how to wake up early and start your day right. Which I know, I know, might sound like a kindergarten-y topic for a site like Mixergy to cover, so I’ll tell you why I want to cover it. See, when I first started my first business, my first entrepreneurial experience, I was so excited. I don’t have anyone telling me when to show up at work and telling me what to do all day, and it was great.For a while there, I kind of slept in a little bit, worked late. Then I slept in a little bit more, worked late. Then I realized, whoa, my hours are turning upside down and I’m not being more productive at night because I’m feeling bad for missing so much of the day, and that spiral kept me from being as productive as I needed to be. Without a boss getting me back in shape, I was in trouble.I know, having talked to other entrepreneurs, that this can be and is for many people a real issue, and if it’s an issue, we have to address it here on Mixergy. To help us do it, I invited Hal Elrod to lead this session. He is the author of “Miracle Morning”. Let me bring up a website about it, “Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8 a.m.)”. You can check it out at miraclemorning.com where I think he’s giving away a free chapter or two.And I’ll help facilitate, oh there’s the book right there in his hands. Here, let me bring up your camera.

I’ll help facilitate, my name is Andrew Warner. I’m the founder of Mixergy, where proven founders teach. Hal, you seem to have it together. I actually invited you a while back to Mixergy to teach sales, and it was one of the most popular interviews that I did on the site. You can see it was shared a lot. It was commented on a lot. Was there ever a time when you weren’t so productive, when you couldn’t even wake up?

Hal: Yeah. It was probably the lowest point in my life. It was 2008-2009. I had built a successful coaching business. I had launched my speaking career. My first book had hit number one on Amazon. Things were going well. Just bought my first house, and just bought a brand new car, and met the woman of my dreams, on top of the world.

The U.S. economy crashes, and I know many people watching were probably were affected by that. But the economy crashes, and almost overnight, it felt like I lost everything. My income more than dropped in half. As a result of that, I got deeply depressed. I didn’t want to get out of be in the morning because things just kept getting worse, where it was spiraling downward.

I stopped exercising completely because I was in scarcity mode and fear mode. Where I’d wake up in the morning and I would work until I went to bed at night. Maybe watch a couple hours of TV to veg out, and just rinse and repeat, and do the same process.

I was $52,000 in credit card debt, and I lost my house. All of that went on for about six months, and it was getting worse, and worse, and worse. Finally my girlfriend, who is now my wife, I’m proud to say she stuck around. Today is actually our five years wedding anniversary, believe it or not.

Andrew: You’re doing the right thing by spending it here with me today.

Hal: Totally, totally. She wouldn’t want anything else, right?

Andrew: I imagine.

Hal: No, she’s watching the kids, so, you know, it’s [??] for both parties.

Andrew: It’s cool; we’re recording early in the day, yes.

Hal: [laughs] So she basically sat me down, and it was painful for her to see me, I was really down. She said “Sweetie, no offense, but whatever you’re doing, it’s not really working. You need some help. Why don’t you reach out to your friends and get some advice? You have some really brilliant friends. They love you. They’re not going to judge you. They’re not going to tell anyone.” Because I was a coach, that’s why it was so hard for me. I’m a success coach, and I was failing miserably, right?

Andrew: Yeah, you know what, actually it is hard even for entrepreneurs and tech companies who are supposed to be the people who our customers, our audience, our employees, our friends even trust. If we don’t have it together, then it feels like, “Ooh, this whole mountain of trust that we’ve built will come toppling down.” So we can’t even go and ask other people for help. I get it.

Hal: Yeah.

Andrew: So what did you do? Did you go ask for help?

Hal: My wife said, “Call your friend, John.” John is a CEO. He’s an executive coach. Brilliant young man. In fact, you should have him on your show, John Berghoff [SP]. But I called John, and I said “John, are you sitting down? Do you have five minutes? I really need a friend right now.” I just unloaded.

I told him everything, and how bad it had gotten, and that it just kept getting worse. I was desperate, and I needed some advice on how to turn my business around and get things going, and increase my income.

So I’m sitting there with my pen and paper, ready to take notes. I’m thinking John is going to give me step by step; Hal, do this, this, and this, and your business will turn around, right? That’s what I’m ready for.

Andrew: Yep.

Hal: And I finish unloading on him, and he says “Okay, buddy. Hey man, I’m sorry to hear that. Are you exercising every day?” And I’m quiet for a second, and I go what the hell does that have to do with anything? Are you listening to me? I’m envisioning him, like, playing on his phone. That just seemed like a no answer answer…

Andrew: Right, like he’s not even paying attention to you and he’s just asking you about exercise. Meanwhile, your credit card company cannot take exercise as payment for your debt, yes.

Hal: Exactly. I said John, I’m not exercising. I can barely get out of bed in the morning, man. You know, no, I’m not exercising at all. What’s that have to do with anything?

He said, Hal, if you’re not exercising every day you’re not getting the blood and oxygen that your brain needs for you to think clearer, and you’re not releasing the endorphins that will help you feel better so that you can make better decisions, better choices, have more clarity and more energy and take more action. He said Hal, I know you’re a sharp guy, I know you could turn this around, but not if your physical, mental, and emotional state is down in the dumps. I saw some merit to that.

Andrew: Okay.

Hal: He said why don’t you go for a run tomorrow. Grab your iPod. Listen to something positive. Go listen to some Tony Robbins or some Jim Rohn [SP] or some kind of audiobook, and get some idea…

Andrew: I’m sorry to interrupt. Let me ask you this, though. This is going to be about waking up in the morning, not about exercising, right? What does waking up in the morning have to do with exercise, or vice versa?

Hal: Great question. I’m on my run and I have an epiphany. I listen to a quote from Jim Rohn that changes my whole life.

Andrew: Okay.

Hal: It becomes the catalyst to transform things and leads to the morning that we’re going to talk about faster than I ever thought possible. It’s this quote, “Your level of success will seldom exceed your level of personal development.”

So, Andrew, it hit me. We all want level ten success. I wanted level ten success in my business, my life, my finances. But, my level of personal development was at a two. That’s the disconnect, I think, for most people is we want this, but we’re not becoming the person that can easily create, and attract, and sustain the level of success that we want.

Andrew: Okay.

Hal: I ran home and I decided I’ve got to dedicate an hour a day to not just reading a book or doing a little this or that. I’ve got to research what are the most powerful personal development practices. Then, the challenge was when am I going to do them. I realized the only time that I had was if I were to wake up an hour earlier.

Andrew: Okay.

Hal: That would be 5:00 a.m., and I wasn’t a morning person, though. I was like you. I was an entrepreneur. I could wake up whenever I wanted to. I usually hit the snooze button three or four times, wasted the morning.

I decided if I wanted my life to be different I had to be willing to do something different first. Here was the life changer. That night I did the research. I thought okay, I’ve got six practices, which we’ll talk about today that I identified as the six most powerful personal development practices.

Then, I decided I’d wake up in the morning. That night for the first time in six months of depression I was actually excited to wake up in the morning. I kind of felt like a kid on Christmas Eve.

Andrew: Okay.

Hal: The alarm went off. I work up at 5:00 a.m. Didn’t hit the snooze button once. I went out in the living room and I did these six practices, ten minutes each. By 6:00 a.m. I went from being deeply depressed to being the most energized, inspired, optimistic, motivated, and clear than I had been in six months, maybe in my whole life.

I realized that was a gift I could give myself, that routine, every day. Within two months of doing that same process, which we’ll teach today, I had more than doubled my income. I went from being in the worst shape of my life to training for and completing a 52 mile ultra marathon. My depression didn’t take two months to go away. It was literally gone that morning.

It doesn’t mean… The rest of my life didn’t change. My life still sucked. I still had a bank account balance that was negative. I still had credit cards that were climbing. But, internally I changed, and that allowed me to turn everything around within two months. It happened so fast I started calling it the miracle morning. Now, there are tens of thousands of people around the world that are experiencing the same types of profound results.

Andrew: Okay. We’re going to take this process that helped you. We’re going to discuss it using this. These are the big points, right? The miracle morning part that you’re talking about, the practice that you spent an hour on, that is the last point on the list, right? And that’s where we’re probably going to spend the most time.

Hal: We’re saving the best for last, but we’ve got to handle the fundamentals. How do you get your butt out of bed when it’s so tempting to keep hitting the snooze button?

Andrew: Okay. One of the things that we talked about is I said I want to be very up front with the audience and say I acknowledge that some people are going to think that this is a kindergarten topic. But, it’s an important one for me to bring on here. Similarly, I would like to acknowledge that some of these just seem so basic that I know someone who’s watching it is saying Andrew, why are you telling me to brush my teeth, I’m an entrepreneur.

I’ll come back with those, and I’ll ask you those – the same questions that they’re likely to ask. But, why don’t we start one at a time here…

Hal: Yeah.

Andrew: …with the very first one which is it doesn’t start the day, the morning of. You’re saying set your intentions before going to bed. How do I do that?

Hal: The idea is that a great morning always starts the night before.

Andrew: Okay.

Hal: And, if you think about it, think of a time in your life, like most people when the alarm clock goes off, it’s like, “Oh gosh, I’ve got to get out of bed.” Then you hit the snooze button. The average American wastes the morning. It’s our most productive time.

And if you think about how it doesn’t make sense because we’re literally … what are we telling the universe? We’re telling the universe when the alarm clock goes off, no, no, universe, I’d rather lay here for nine more minutes than do something extraordinary with my morning, right? I’d rather be unconscious for nine more minutes.

So the idea is that when I was a kid on Christmas, that’s the time in my life — if you didn’t celebrate Christmas, think of a vacation or your birthday or the first day of school. Andrew, was it hard to wake up in the morning?

Andrew: I don’t remember them, but I do know what you mean.

Hal: [laughs]

Andrew: That there are times when I’m so … like the first day of vacation I can get up very early or the day when we’re driving, I can get up early.

Hal: Exactly. And here is the reason. Typically and this is the lesson, typically our first thought in the morning is the same as our last thought before bed. So if you go to bed thinking of all the things that you have to do today and feeling stressed or worrying about your problems. Or just thinking I’m only going to get six hours of sleep and my limit is I need eight to feel good.

So, therefore, I’m already telling myself I’m not going to feel good. I realize we can literally recreate that feeling of excitement to wake up every single day of our lives, but it’s like anything. We have to consciously do it. So for me I go through a set of bedtime affirmations where before I go to bed I have it literally written out affirmation that says I’m getting however many hours of sleep that I’m getting … if it’s five, if it’s four, if it’s six, if it’s eight.

I’ve experimented with this and done some research and found that we literally need as much sleep as we consciously choose to believe that we need. Obviously, does that mean an hour per night, probably not? But here I do know that if you do believe that you need eight hours and you’re only going to get six, and you go to bed thinking, “I’m going to feel exhausted in the morning?” How are you going to feel in the morning? You’re going to feel exhausted. It’s literally a self-fulfilling prophecy.

Andrew: Okay.

Hal: So, first and foremost, I set my intention by saying I am tonight getting five and a half hours of sleep, and my body is a miraculous organism and the mind/body connection is so powerful that I am choosing to wake up feeling energized, with clarity, motivation to wake up. And tomorrow I’m going to make it the best day of my life, of my business. You name it.

Andrew: Let me get this right. Frankly, I’m very good at waking up early in the morning. I have been, but what’s happening to me over the last, I’d say, month or so I’m waking up at 6:00. I get up out of bed. I get my phone which is in the other room, and I bring it back into bed. And I say, “I’m just going to read for a little bit.” Then I spend maybe an hour reading, like I did this morning. Maybe basically napping for half an hour, so I want to make sure to get this right.

You’re telling me the night before I remind myself that however much sleep I get that’s going to be enough. I believe that’s true in my life within a certain limit obviously. A minute a night is not going to be enough, and ten hours is going to be too much. But somewhere in between there whatever happens I think I’m fine with six hours, maybe eight hours. So I can remind myself of that. That feels true to me. What else do you want me to say the night before?

Hal: Well, it’s having clarity of purpose for the morning, right?

Andrew: Purpose, not the day but for the morning. What do you mean by purpose for the morning?

Hal: Well, and that’s where the miracle morning comes into play. We’ll kind of come back full circle, but the miracle morning, it may have six practices.

Andrew: Mm-hmm.

Hal: And when I Googled … It was that night of depression, going for the run, and I Googled “best personal development practices”, and I came up with a list of six that I kept cross referencing, Forbes.com, [??] .com, all these sites.

Andrew: Okay. I’ve got those here. We’re going to show it to the audience later. So you’re saying, just remind myself why it’s exciting to do these things that I’ll be doing in the morning like …

Hal: Of why you’re doing them. So for me it’s about … Again, we all want level ten success doing these things in the morning to become the level ten person that you need to be, to create level ten success in every area of your life. So …

Andrew: I see. Remind myself not just how exciting it is to do these things, but also that I am going to become — and I want to become — that level ten person. Do I have it right?

Hal: What’s in it for you? Why are you not doing them? There it ends to me. Obviously, they can be very fulfilling in and of themselves, but what are you trying to achieve in your life? And here’s the way to look at it is that everything that you want for your life, every goal that you want to achieve for your personal and professional life hinges on how the day goes. We can all agree with that, right? One day at a time.

And in order to maximize every day it’s about maximizing the morning. Typically your morning is … Steve Pavlina [SP] says it’s the rudder of the day, like a rudder of a ship steers the ship. If you have an unfocused, unproductive, lethargic morning, that’s the type of tone you’re setting for your day. I know you know Eben Pagan.

Eben said that the first hour of the day is the most important because it sets our mindset and the context for the rest of the day. If you nail the first hour, you’re setting yourself up to maximize every day. That’s why going to bed, you want to have that clarify of what you’re going to do in the morning for those reasons.

Andrew: I’m looking here at my notes, and in addition to the notes that I’m using to lead this conversation, I’ve got an image here for this session of a guy writing down. Do I have that there because you actually want us to write down our intentions somewhere?

Hal: You can journal before bed your intentions. For me, rather than write them out every night… I did that for a while. Then I thought, I’ve got enough clarity of what I want those to look like, I’m going to print them. If anybody wants to get my bedtime affirmations, I have a site, tmmbook.com, as in “The Miracle Morning.” tmmbook.com. There’s all sorts of bonuses from the book and one of them you can actually download. tmmbook.com.

Andrew: Got it. And so we can download that right here.

Hal: It has a bunch of affirmations and a bunch of other resources.

Andrew: tmmbook.com. All right. So for you, it’s the same things every night. You’re not thinking through every night what’s my intention for the next day. It’s you have a list of intentions, you just remind yourself of them by reading them. Let’s go onto the next point then. Next point is this. Where is the big board? There is the big board right there. Next point is…

Hal: That is please move your alarm clock. I think this is probably, arguably, the number one cause of snoozing through your morning and wasting that productive time. Science has proven that our willpower is the strongest in the morning. It’s like a cell phone battery. All day long, it gets drained. Physically, mentally and emotionally, it’s the strongest in the morning.

Now, not for the first two minutes. Typically, the first two minutes, you’ve got to beat those first two minutes. That’s when our willpower is the lowest, right? It’s the strongest in the morning, but those first two minutes is what you’ve got to beat.

First and foremost, most people have their cell phone or their alarm clock within arm’s reach. When the alarm clock goes off, what I call your wakeup motivation level on a scale of one to ten, it’s probably a one or a two.

So if your decision on whether you’re going to snooze and waste your morning, or you’re going to wake up and be purposeful and productive hinges on the first 12 seconds of you being awake, you’re almost always going to hit the snooze button. If you move the alarm clock across the room, and it sounds like this is something you already do, correct?

Andrew: I do. I actually put it in the kitchen and so I have to get up and go turn it off, walk a long way.

Hal: Mine is similar, but it’s next to the door of my bedroom. For me, it forces me to get out of bed. That motion creates energy. Your wakeup motivation level goes from a one to a four, just by you having to be standing up, upright, walking to the door.

That in and of itself leads into the third step which is I’ve decided before bed, part of my bedtime affirmations, is setting the intention that when the alarm goes off, it doesn’t matter how I feel in that moment. I am committed to walking from my phone, my alarm clock, to the bathroom, to go brush my teeth and wash my face. That literally takes a minute or two.

But by then, my wakeup motivation level’s around a five or a six, maybe even a seven. It’s very easy to make the decision to stay awake. It takes very little willpower to stay awake at that point seconds after the alarm went off.

Andrew: Do you recommend something like this alarm clock that will roll away from you as it goes off. Or can it be any alarm clock?

Hal: That’s funny. I just had a lunch today and she told me to get Clocky. I think that’s Clocky.

Andrew: That’s the alarm that jumps off your side table, and then you have to chase it to turn it off. That’s kind of a fun thing. It’ll work, but also if we just keep that alarm at a distance so we can’t instinctively hit its snooze, it will help us. And then as you are saying, the next step is to get up and brush your teeth. This is the part that I said are we really telling the audience to go brush their teeth. They’re adults. Tell me again why that’s so important, why brushing our teeth is the answer.

Hal: Here’s why. It’s exactly what you’re talking about. Because it is so easy to do. When the alarm goes off, you think, oh my gosh, I got to wake up for the whole day? I don’t have enough energy to wake up. That’s overwhelming trying to project into your entire day. But, wait a minute. Do you have enough energy to walk over and brush your teeth? It’s very easy.

Once you’re finished with it, your wakeup motivation level, think of it this way. If you started at a one on a scale of one to ten when you wake up in the morning when the alarm goes off, every minute you’re awake, you go up one or two notches. That’s why brushing your teeth is one of the steps because it’s so easy. The first thing you should do when the alarm goes off should be extraordinarily easy for your mind to wrap your head around.

Andrew: I see. If you tell me to get up and start reading or start writing or make a phone call, I can’t do it. I’m not waking up. I need a small step to waking up.

Hal: [??] Yeah. When you’re exhausted, so …

Andrew: What about this? I hear that you’re a big fan of this, of Listerine.

Hal: That is a bonus tip that you’re giving. If when you’re brushing your teeth if you use Listerine, it will take your wakeup motivation level from a three or two or whatever it’s at to like a 12 in a matter of seconds. So I used to do that when I had trouble waking up.

That was something I did every morning when I first started this process. You want to use every trick in the book to make it. If you’re really struggling to get out of bed in the morning, use every trick in the book to make it easy.

This is a great trick. Force yourself. Set your timer when you gargle with Listerine for 20-30 seconds, you’ll be wide awake when it’s over.

Andrew: All right. It is a very fiery feeling, not drink, but mouthwash, yes. It will wake me up. All right. On to the next point. Drink a full glass of water. Why water?

Hal: This is something that they should teach us in school, but I didn’t learn it. I learned it from Eben Pagan, and something that it’s not common. I’ve been doing a lot of television interviews, Andrew, and it’s so funny that when I do television interviews, this is like the single most talked about point.

People go, “Tell me about this.” Here’s the thing. In the morning we are dehydrated by default, right? We haven’t drinking water for six, seven hours so we’re dehydrated by default. And sometime you can even do this before brushing your teeth, right? Depending on if you’re okay with it. Some of us are grossed out by that. Sometimes for me I’ll just grab a glass of water, but the first thing in the morning within being awake for a minute or two I down a full glass of water to get hydrated because dehydration equals fatigue.

So in the morning sometimes when you can’t get yourself going and you think you’re tired, you’re really dehydrated. So one of the first things you should do is drink a full glass of water, and then I go to my fridge and I fill it up. And I usually drink the second half, and I get ready to keep drinking. Most people go from waking up to coffee. Coffee is a diuretic. It, therefore, makes you further dehydrated which then creates fatigue throughout the rest of your day.

Andrew: Can I have water and coffee? Are you up for that?

Hal: Yes, that’s actually why the TV people like it because my point is don’t drink coffee first thing in the morning, and they get all up in arms, “Whoa, whoa, we all drink coffee.” Yet, I drink a full glass of water. And then I walk over to the coffeemaker, and I make a full cup of coffee, and I do both.

Andrew: All right. Fair enough. I do love my coffee, especially if I get really good coffee beans, and I grind them. I don’t have the patience to do it, but when I have it done right I do wake up more. All right. So drink a full glass of water. Here’s the last one that I was a little nervous of. I told you before we started. Get dressed.

Hal: [laughs]

Andrew: Why is this a point worth putting in?

Hal: Here’s why. It should actually say get dressed in your workout clothes.

Andrew: In your workout clothes? All right. I could type that in.

Hal: [??] Now we’re talking.

Andrew: Boom.

Hal: These are my thoughts. The benefits of morning exercise have been proven, right? It goes back to that run when I was depressed where I got more clarity in two minutes of running than in six months of trying to push my way through my problems. So morning exercise is so important to get your adrenalin going and your oxygen and the blood flow and all of that, the endorphins.

Andrew: Mm-hmm.

Hal: Here’s the deal. Some people will take a shower first thing in the morning to try to wake themselves up, and the only reason that I don’t think that’s the best idea is I always say you have to earn your morning shower by breaking a sweat.

Andrew: Okay.

Hal: Right? Earn your morning shower by breaking a sweat. When I get dressed in the morning it’s in my workout clothes, and that includes my shoes which decreases the odds of me getting back into bed. There’s something about getting dressed in your workout clothes and heading out the door. That’s not a step that’s in writing, but it really should be a step. Get out of your bedroom as fast as possible.

I always grab my workout clothes, and I leave the bedroom to go get dressed in it. And here’s why. It’s like if you were a smoker trying to quit smoking cigarettes, and you’re sitting in a room with a pack of cigarettes right there. They look so tempting. And that’s what it is for a person that .. in the morning for all of us I call us snooze-a-holics, right?

If the bed is there and we can see it, it’s just too tempting to be pulled back in. And maybe you would think, “I’ll just lay back down for a second” and then 30 minutes, an hour goes by. You wasted all that time.

Andrew: All right.

Hal: So that’s the five step strategy to waking up easy. That’s why the steps are easy, not hard to do.

Andrew: All right. You’re a friend. So I hope you won’t call me a woosy or think about this in a woosy way, but I got to be open. What about cuddle time in the morning with your woman? You’re a married man. I love that. What do I do?

Hal: That’s a great question. And I’ve heard often spouses or boyfriends and girlfriends are like the biggest deterrent from morning productivity like I just want to sit there and cuddle. Well, here’s the deal. The miracle morning– you know, I wake up every day, Andrew, at 3:30 in the morning, seven days a week. Most people don’t do that, I always want to be like give a disclaimer – the miracle morning isn’t waking up at 3:30 in the morning.

However, it is waking up earlier than you have to be up. And what I mean by that is this. Most people, if you think about it, why do they wake up in the morning? They wait to wake up until they have to wake up. They have to be somewhere, do something, answer to someone, take care of someone else, right?

And it goes back to that whole dis-empowering start to your day which is like, the alarm clock goes off and you’re starting your day with procrastination. Right? It’s your first opportunity, the first opportunity that the day that life gifts you with, to show that you have the discipline, commitment, and resolve to creating the life that you want, the next level.

So here’s the idea. Whatever time you wake up right now, if you wake up at 6:00 a.m. right now, which is when I started I woke up at 6:00 because I had to get ready for work. So I bumped it up to 5:00. Whenever you wake up, back it up an hour, that’s when you’re going to wake up your miracle morning.

And it goes back to earning your shower by breaking a sweat, earn your cuddle time with a morning that moves you closer to the goals, the highest goals that you have in your life, that will take you to the next level. An hour dedicated to becoming the person that you need to be to create those goals. Man, that’s snuggle time will feel a lot better, Andrew, when you feel like you’ve earned it. You’ll go crawling to bed to pick up your wife–

Andrew: So you’re saying, come back later on?

Hal: You what?

Andrew: You’re saying come back later on and have that time? Ah, okay. So wake up, exercise, earn my shower, earn my cuddle time.

Hal: Yeah. They’re still sleeping. They’re not on the miracle morning schedule yet.

Andrew: Alright. You know what, I’m actually– I don’t think we need this visual, but I need it, so I’m going to put it up here for everyone, just the shoes. I do get dressed in my running clothes which I have available the night before. I don’t put my shoes on and you’re right – once I get my shoes on I’m not going back into bed. And so sometimes that visual gets imprinted in our heads, and it leads us to actually do what the visual is there for. I’m going to put it up there. I’ll try that.

Hal: Yeah and so it is– I want to go back. I mentioned that it should be a bonus that we don’t have in there which is to leave the bedroom. I’m actually thinking in my head, you know, I have a master bedroom with a bath room attached to it. It’s all one giant room. And I don’t brush my teeth in my own bathroom except at night.

And I don’t because I know it’s tempting to go back in bed. So I get my alarm clock, my phone, my Iphone is sitting next to my bedroom door, and I’ve already visualized the night before, I’ve set my intentions, that when my alarm goes off, no matter how I feel, I will literally– it’s almost like one swoop. I go, I pick it up, and I just keeping going out my bedroom door, I don’t even stop.

I keep the momentum, no matter how I feel, no matter if I feel tired or fatigued, I walk out and I go straight to our guest bathroom, that’s where I brush my teeth because there’s no bed to tempt me to crawl back into it. And my workout clothes are already set there for the morning. I set it all out the night before. Again, a great morning starts with your preparation before you go to bed.

Andrew: You did coin the word snooze-a-holic and it’s such a good description of what it is. We’re addicted to the snooze, and you’re right, unless we get it out of our way, we’re more likely to get back into it. Alright, I think we’re ready to go on to the next point, right?

Hal: Yeah, I have to share a quick quote with you, from one of my favorite stand-up comediennes about snoozing, Demetrius Martin. He said, “Hitting the snooze button in the morning doesn’t even make sense. It’s like saying I hate waking up in the morning, so I do it over and over and over again.” So I just think that there’s a lot of truth to that statement as funny as it is.

Andrew: All right, on to the next point. Actually, you know what? Let me show you something here. This is the way that I do it. Here’s my backpack, I run into work and my work clothes are in the back pack, but this is something I’m especially proud that I do and I never showed it to anyone, but I’m going to show it to you right now.

Alright, when I’m done, all here, this is stinky but you guys are not watching… uh, I’m not using smell-o-vision. [chuckle] So my running clothes are right in here – like that, my socks, my shirt, my pants, it’s all right in there. When I’m done with it, it goes in the laundry with this, and it gets cleaned and then when I take it out, it just comes in this bag. In the morning,

I don’t have the attention to go and find the right socks, to find the right running clothes, to find any of it, and to have all mixed up together. I just grab one of these bags the night before. I put it in the back room, and that way as soon as I get up I pass by and I can get dressed in this.

Hal: Nice.

Andrew: All right.

Hal: I love it. That’s great. You want to make it as easy for you as possible, right? That’s why my glass of water is already set by my toothbrush. My running clothes are already there. It’s just as easy as you can make it. So I love that, Andrew, because you’re just using little … you’re packing, waking up in the morning, packing getting your clothes ready.

Andrew: I’ve been doing this now for years, and at first my wife laughed at me for doing this because, “What are you now getting so anal that you’re starting to pack like a lunch pack?” It helps so much, and now even she can see the power of it. Then it goes into a plastic bag like this into a bag until it gets back into the laundry.

All right. On to the next big point here. This is the one that I’ve been waiting to talk about, dive into the miracle morning. I’ve got what the miracle morning is. That’s the screenshot. You tell me when you want me to show it. Maybe you just start by explaining it.

Hal: Yeah. So just a quick back story. So when I went home from that run and had an epiphany that I needed to dedicate time every day to become the person I needed to create, the life that I wanted. So that was the epiphany. And then I realized I have no time to do it except in the morning.

And the more research I did I found that early rising was one of the commonalities between a lot of highly successful people. Again, I wasn’t a morning person, but I thought it was actually funny because I’m looking at my schedule. I’m looking at 5 a.m. as the only time that there looks like really time for me to do this. I’m booked the rest of the day.

And I remember thinking I was resisting it. I’m not going to get up at 5 a.m. Who gets up at 5 a.m.? And I heard my mentor’s voice in my head, “Kevin Bracey [SP], if you want your life to be different, you have to be willing to do something different first. And I just thought, “Damn it, Kevin, you’re right.” And I committed to it.

Well, the second thing was once I Googled all of those practices I was actually, Andrew, I was very disappointed because I had put into Google “best personal development practices.” Remember Jim Rome’s [SP] quote, “Your level of success will never exceed your level of personal development.” So I was looking for the best practices that would have the biggest, most profound impact.

And the reason I was disappointed is none of them were new to me. None of them were revolutionary. I heard of all six of them. And so I’m looking for a silver bullet. I’m looking for a magic pill and something I’ve never heard of.

And then it occurred to me. Two things occurred to me. Number one, I’ve never done any of these consistently. It’s not what you know, it’s what you do. So that was the first epiphany, and then the second thing is “and huh”. It seems that most of the successful people in the world in business, in all areas, they do these things. That’s what my research has shown. It was quoting people up here, right? Will Smith, where’s my affirmations? Oprah Winfrey, big on meditation. Anthony Robbins, the same thing with affirmations.

So here were the six practices, medication.

Andrew: Got it. I’ll bring it up on the screen.

Hal: So the first practice is silence.

Andrew: Mm-hmm.

Hal: Call these the lifesavers, by the way. This was with the help of a thesaurus because my vocabulary is not that impressive. I had to get the thesaurus’s help, but these are the six practices. “S” is for silence, right? Meditation, prayer, deep breathing, or a combination of both.

The “A” is for affirmations. The “V” is for visualization, exercise, reading, and scribing. Scribing is a fancy word for writing, right? So that can be your journaling practice. That can be clarifying your priorities for the day or writing out your goals or writing what you’re grateful for, right? Scribing incorporates all of that. I always say magic happens when you put pen to paper. Write magic happens. It forces you to articulate your thinking in a way enough to where you can write it out, right?

So the six practices, as I identified those, then I was debating. Which of these are better than the other? Like, which one should I do, or maybe I’ll combine two of them. So, again, I’m on Google. I’m on Forbes.com. I’m reading articles about CEOs that meditate. I’m reading articles about the power of journaling. And I’m trying to debate the best one. It just hits me. Wait a minute.

What if I did all six of these practices over the course of an hour, ten minutes each. It would be like personal development on steroids or turbocharged.

Andrew: Mm-hmm.

Hal: So the next morning I woke up and keep in mind, Andrew, I didn’t know how to do most of these. My computer was open the night before. Remember, prepare the night before, right? So I had Googled the night before. I had like six internet windows open. I googled, “how to meditate.” I googled, “how to visualize.” I googled, “how to journal effectively.” And I literally fumbled through it my first day. But the silence, I felt so calm. And so at peace.

Andrew: Break it down for me. So, silence is for you. Is it prayer? Are we talking about meditation? What are we talking about? Let’s bring it up.

Hal: For me it’s a combination of both.

Andrew: Okay.

Hal: For the first day it was just meditation, because that was a new thing for me, and again, I wanted something new. So I was trying to meditate. Now I do a combination of meditation and prayer. And a lot of times I will combine these, so sometimes I’ll be doing stretching while I’ll be doing my meditation or prayer. One thing is after you do the miracle morning for a while, after your first 30-60 days, you’ll start to get bored. You’ll start to go, “Okay, I’m doing the same thing every day.”

So I always encourage you. The beauty of this model, the lifesavers… And by the way, let me just say I love the acronym because I really believe that these are the six practices that if you do them every day they literally are lifesavers. They will save you from a life of unfulfilled potential. These will allow you to maximize your potential. And so, for me, the six practices, doing each of them, there’s unique benefits for all six.

Andrew: Okay.

Hal: Andrew, I was just about to say something and I forgot what it was.

Andrew: We were going to talk about how you do that. When you’re talking about silence… Go ahead. And then I want to take each one and get some ideas from you about how I should do it and how you do it. Go on.

Hal: So it was about getting bored. That’s what I was talking about. So for me, the beauty of the lifesavers is there are infinite practices for each one. So if you Google “meditation,” you’ll find there’s all different kinds of meditation. In fact, my favorite new meditation is from Michael Ellsberg. It’s called Immersive Awareness, and it’s really neat. It’s the opposite of most meditations. I always say I suck at meditation. It was hard for me to really… I’d never call myself a master. I got good at it. You know, decent.

But Immersive Awareness, instead of focusing on one thought or just your breath, it’s actually bringing in every one of your senses simultaneously, doing it in layers. So first, you focus on your breath. Then you focus on your body WHILE focusing on your breath. It takes practice.

Then you focus on the sensations like touch and the air, the warmth, the coolness. Then you focus on every sound. All the ambient sounds around you. Then, you actually invite your thoughts in and focus on your thoughts.

And it takes practice like any meditation, but you actually work on doing them all simultaneously. And when you first do this, it feels like a symphony where everyone is playing a different tune. And then you slowly start to be able to do it. I’ve just been doing it for a couple of weeks, but I really think it’s my favorite form of meditation.

Andrew: Okay. So we can switch it up, but you just want us to take that time in the morning. Why? What’s the benefit of me sitting in the morning, when I’m tired, instead of going back to sleep for another five minutes, sitting in quiet for five minutes or noticing my different parts of my body for five minutes?

Hal: It’s hard to… I mean, I guess I can explain it, but until you do it… It became my favorite part of the miracle morning. When you’re meditating and totally silent… When you learn how to meditate… You’re not going to be good at first. But once you do it, you enter a realm of consciousness that you don’t ever visit when you’re going through your day- to-day life.

To me, it’s the essence of “be.” Normally, every day you’re living, you’re doing, you’re accomplishing, you’re moving. But when you meditate, you go inside and realize, “this is who I really am.” I’m not my job. I’m not my to-do list. I’m not the commute to work. This is who I am. And it’s one of the most calming, centering things.

There’s a great article, I think on Forbes, called Fortune 500 CEO’s that Meditate, or that Swear by Meditation. It was years ago. But you find that there’s this whole list of some of the most famous CEO’s that swear by meditation. And I’ll tell you…

Here is all I have to say on this. This is the end of the argument. Oprah Winfrey… if it’s good enough for Oprah, right? She believed so strongly in meditation, that she brought experts in, I think it was Transcendental Meditation, which is one form, to teach her entire staff at Harpo, all 300 employees, during the time she had the Oprah show.

They all went through intensive training on how to use meditation because she believed it increased your clarity, your ability to focus, it gave you peace of mind, it lowered your stress. There are just so many benefits, and most people don’t start the day in silence.

Andrew: Okay.

Hal: They hit the snooze button until the last minute. Then, they’re rushed, they’re chaotic. There’s no time to get clarity or get centered or calm. It’s really the opposite of silence. It’s more like chaos for most people.

Andrew: All right. I want to go to the next point.

But, I’ll tell you for me one of the benefits of meditating is that it allows me to focus throughout my day. Earlier in the conversation I don’t know if people noticed, but I just showed a blank screen by accident. In the past my mind would just go to why did I do the blank screen, how do I fix it next time, instead of just bringing it right back to the conversation with you.

I wouldn’t be able to stay focused on what I want to do and avoid all those little side distractions that might come into my mind or might be surrounding me here in my office or here as part of my computer issues.

Meditating allowed me to learn to focus, and I do it in the morning as prep for being able to do it later in the day. That’s my benefit. I understand what you’re talking about here.

Let’s go on to the next big point, affirmations. I’m not so sure I believe in affirmations. Why do you want us to do affirmations?

Hal: Affirmations are arguably my… Meditation was my favorite for a while, but affirmations have consistently been, to me, the most powerful part of the miracle morning. Let me tell you this. I was skeptical about affirmations. I believe it was the book ‘Think and Grow Rich’ which was the book I was reading…

Andrew: Yes.

Hal: …when I started my miracle morning. It was the first book I read. I learned about affirmations.

I decided to test. Kind of being skeptical, I decided to challenge the notion that affirmations would work. The way I did that, Andrew, is I asked myself. I thought what is the most limiting belief that I have. I don’t mean the most limiting belief in terms of what limits me the most. I mean what’s the strongest limiting belief that’s really rooted with evidence that backs it up to where I really buy into that belief and my thoughts, my words, and my actions are very much in alignment with that belief.

For me it was I have a horrible memory. As you know, when I was 20 I was hit head on by a drunk driver. I died for six minutes. My brain was smashed. I suffered permanent brain damage. It was so bad in the hospital…

Okay, there are pictures of the accident.

Andrew: I’ll bring it up a little closer.

Hal: It was so bad in the hospital that, Andrew, you could’ve visited with me for two hours, then gone to go get lunch and come back, and I would’ve had no memory of you being with me for two hours. I would’ve started talking to you like I hadn’t seen you in years.

Because it was that bad it healed very slowly and very gradually. I had a deep rooted belief that I have a horrible memory. Any time anyone said Hal will you remember to call me tomorrow, or will you remind me of this anything that involved memory, my immediate response was you know what, I apologize. I would, but I have brain damage and I just don’t have a good short term memory.

Andrew: I see, and if you keep saying that to yourself and to other people you are reinforcing that belief. Then, you start expressing that belief by not remembering things that you should, by not remembering things that it turns out you mentally have the capability to do it.

So, by affirming to yourself over and over I do have this memory you were able to remember the truth and act on the truth as opposed to acting on that lie that you were starting to tell yourself.

Hal: Yeah, I created that affirmation. It didn’t say I have a good memory, by the way. That’s an important distinction. If you write an affirmation that says I am blank, and you don’t believe you’re that yet, you’re going to call “BS” on it every time.

Andrew: Okay, so how did you do it?

Hal: My affirmation didn’t say I have a great memory, because I didn’t. It said I believe that my brain is a miraculous organism. It’s a brilliant organism, and it has the capability of regenerating cells and healing itself. And, I believe in the power of beliefs. So, I choose to believe that my memory’s going to get better every day, and I’m going to focus on telling myself that it’s better until I have the best memory of anyone I know.

Andrew: Got you. And so you went back to your truth. You wrote that down and you repeated it over and over as opposed to just taking something that you don’t yet believe in.

Go ahead. You were going to say something.

Hal: And a month and a half later… It was amazing. A month and a half of reading this every day during my miracle morning, and my good friend Jeremy… We were on the phone. He said Hal, will you remind me tomorrow morning to do blank. I forgot what he asked me to remind him, but, will you remind me to do blank. I said yeah, sure, what time. He said 8:30. I said all right, yeah, no problem, I’ll remind you. I hung up.

All of a sudden I went whoa. That’s the first time in nine years that I’ve ever said yeah, no problem – I didn’t even write it down – without even writing it down. I realized wow affirmations work magic. Because that was at a subconscious level that I… My memory had improved, and I believed that it had improved.

From there it was like I started applying affirmations to anything in my life, any limiting belief, any area where I wasn’t focused on the right thing, reminding me what I needed to focus on, reminding me what was important, what I was committed to. Affirmations, for me, have been, I think, the biggest game changer.

Andrew: Let me show you something that I’ve been noticing as we’ve been talking. Let me see if I can do that here. Boom, boom, oh yeah I can do it.

Here, check this out, guys. It’s for the audience. Look at that. I’m going to zoom in kind of awkwardly here.

You know, one of the things I like about you is your attention to detail. You didn’t just turn the right lighting on or light on. You got one of these professional light setups that I’m seeing reflected in your computer as we talk, the kind with the umbrella, the kind that actually makes people look good. I love your attention to detail.

Hal: Hey, dude, you’re the king of this, Andrew. I’m following your lead, my friend.

Andrew: It’s impressive. All right, onto the next point here, because we have a bunch more to do and very little time left. Next is visualization. How do you visualize? What do you do?

Hal: Here real quick, I believe that visualization is very incomplete in the way that it’s taught by most experts. Most experts teach you to visualize the end result. See yourself having already achieved what it is that you want so that you start to believe that it’s true. Because now you’ve seen it it becomes real to you. Then, you’re more motivated to work toward it.

I believe that that is the first half of visualization. But, the piece that most people leave out is… I always spend half of the time, a few minutes visualizing the end result, and then I immediately ask myself what do I need to do today to ensure that I am on pace to create my long term vision. Then, I actually close my eyes and visualize myself doing whatever that is. I see myself smiling, enjoying it, looking determined, looking confident, whatever it needs to be.

When I was writing ‘The Miracle Morning’ I visualized every morning. First, I would see people reading the book. I would see them smiling. I would see them having epiphanies. I would see them sharing it with their friends. That got me excited.

Then, though, to overcome my writers block and my fear of the activity that was necessary, I would close my eyes and I would imagine myself on the computer. I would see myself typing. I would see my face as if I was looking at myself. I would see my eyes opened wide. I would see… The words were flowing. The ideas were flowing. And, it would be to the point where I couldn’t wait to just open my eyes and do the thing that I needed to do to create the vision that I wanted.

So, visualization for me is a two part process – the long term vision and then the immediate action that’s necessary and seeing yourself doing the action with ease.

Andrew: All right. Next one is we talked about exercising, so why don’t we jump into reading. What do we read?

Hal: Reading is…

Andrew: It’s not the stuff that I’ve been reading this morning.

Hal: If I can give any advance tip on reading it’s that when you read, to read… Here’s how I read a book. I read a book that’s obviously not ‘Harry Potter’ or ’50 Shades of Gray.’ You know, pick a book that’s going to be relevant to where you want to go right now in your life.

I underline. I circle. I write in the margins. Then, once I’m done reading a book – it might take me a week, or two weeks, or a month – then I go back. Repetition, I believe, is one of the most important. It’s the key to mastery. I go back and I re-read the entire book only based on my underlines and my highlights. I just underline and highlight anything that I want to re-read.

When I do it I have my planner with me. My schedule is with me. As I’m reading I am taking notes and I’m looking for actions. Once I identify an action then I write it down and I clarify the most important action from the book so that I can actually take it and put it into practice.

Andrew: I see. That is very helpful. I like one of the things that you say in the book. I’m going to read directly from the book so people can see me as I read the book. It’s on my monitor right here. You say, “Look at it this way. If you read just ten pages a day, that’ll average 3,650 pages a year which equates to approximately eighteen 200 page books. Just from a few minutes a day.”

Hal: Yeah. We have that excuse a lot of times at night like I’m too tired, I don’t have time. The reality is anyone has time to read ten pages a day. It’s an extra 10 minutes, or if you’re a slow reader 20 minutes. But, it really is a game changer. It really is a game changer.

Andrew: All right, final point is scribing, which is writing. What do we write for five minutes? You said earlier it’s what we have planned for the day. But, you don’t mean a to-do list, do you?

Hal: No. For me it’s typically simple. It’s what am I grateful for and what do I need to do today to move closer to my most important goals for the year. That’s it. And I usually try to narrow it down to one thing. What’s the one thing? I’ll make a list of usually like three to six. And then I go okay of these six, what’s the number one thing?

There’s a great book I recently read called “The One Thing.” I don’t know if you read that yet. It’s a good book by Gary Keller. But it’s about; you know clarifying your one thing. Always getting clear on, okay, of all the things I’m working on this year, my goals. What’s the one that matters the most? And of all my priorities for the day, what’s the one that matters the most.

And then I immediately describe it as how I end my miracle morning. So I usually will immediately have clarity on what the most important thing for me to do that day and it’s the first thing I do when I hit work.

Andrew: All right. The book is called miracle morning and if people want to check it out they can go to www.miraclemorning.com. And, I said earlier one chapter, but you’re giving away two free chapters, video training and more on the site. They just have to go to www.miraclemorning.com. Why are we even giving them free chapters? Why don’t we just tell them to go get the Kindle book? It’s only $9.97.

Hal: I know I’ve had a lot of people who have interviewed me that have read the book and they go, ‘Hal, no!’ or they go tell people don’t go get the free chapters. Just go buy the book.

Andrew: Just go get the book. I mean who’s sitting there and trying to decide like if the first two chapters going to get it for me. But the third maybe, I don’t know.

Hal: Yeah. I always say in these interviews you never know who is watching money. Money is extraordinary tight right now. And that’s why I was saying if you are ready to change your life this literally can be the one thing that changes everything. And if you don’t believe me go read the 225 5 star reviews on Amazon; saying they’ve quit smoking, they double their income, they’ve lost weight.

Andrew: [cheers], my friend, 266. Oh, wait you’re counting the 5 stars. Yes, 228 five star reviews. That’s pretty good. I think I may have understated.

Hal: Two hundred sixty-six; an average of 4.8 out of 5 stars.

Andrew: That is impressive. Especially, because I know the people Amazon like to tear some books down. Nicely, done.

Hal: Thank you.

Andrew: Congratulations on all the success. Thank you so much for walking through this with us. Everyone else if you are out there, and you’re using this please let me and Hal know. We’re rooting for you and we’d like to hear as you progress. Hal thanks so much.

Hal: Hey thanks, Andrew. It’s always a pleasure.

Andrew: Same here. Thank you all for being a part of it. Bye, everyone.

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