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.

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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.

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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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Master Class:
How to find your business idea
(Even if you’re afraid of starting something stupid)
Taught by Richie Norton of The Power of Starting Something Stupid

Master Class: Starting Something Stupid

 

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Transcript

Andrew: This session is about how to start a great business idea by using the power of starting with something stupid. The session is led by Richie Norton. He is the author of the “Power of Starting Something Stupid, How to Crush Fear, Make Dreams Happen, and Live without Regret.” I will help facilitate. My name is Andrew Warner. I’m the founder of Mixergy and it’s an honor to have you on here Richie.Richie: It’s an honor to be here. Thanks for having me, Andrew. I’m really excited. It’s going to be fun.

Andrew: So we pulled out a few ideas from your book, here they are that we’ll be talking about today. And walking people through the framework that you’ve outlined in your book. But it happened that a few years back something terrible happened to you that set you on a new path. What was that thing? What happened?

Richie: It was actually a couple of things.

Andrew: Mm-hmm.

Richie: We were living in Hawaii and my brother-in-law, he lived on and off with us for about five years. And, to make a long story short, one day he just didn’t wake up. He passed away in his sleep.

Andrew: Mm-hmm.

Richie: And it was totally unexpected. And this experience literally just crushed us and made us really rethink what is life? We say that life is short and that’s cliche, but even though that’s cliche doesn’t make it any less true, right? And we just started rethinking everything we were doing. Life really is short and we think we’re going to have all this time to do all the things we want to do, when reality for my brother-in-law, it just wasn’t that way.

Andrew: Yeah.

Richie: A few years later, you know, we had our fourth son and we named him Gavin after my brother-in-law, Gavin…

Andrew: Mm-hmm.

Richie: …who had passed away. And this Gavin, he brought so much joy into our lives and he kind of filled the hole that his uncle had left in his own little way. Well, Gavin, over time, he ended up getting cough and we didn’t know what it was. We took him to the doctor and they said he’d be fine. We took him to the doctor again and they said maybe it was something called RSV. It just kept coming and it persisted.

And we ended up one night going to the hospital real late and we thought we’d be in and out of there. That they’d say, oh, he just has this cough. It’s going go away. They ended up admitting us into the hospital and we were there for quite some time. And after a number of tests, it turned out that he had something called pertussis, which is also known as whooping cough.

Andrew: Ah.

Richie: And, you know, I heard of whooping cough before, but I thought it was something from the past. You know, he had his shots and everything, we thought, was fine. He was a healthy little boy, but now he has this disease. And you never expect this to happen. It’s your worst nightmare.

But, one night the nurse came in and let us know that he probably wouldn’t make it. And we did everything in our power, just loving him and praying and just everything we could. Just hoping and wishing that this wouldn’t be his fate. And I remember my wife and I literally just holding hands over our little baby and promising to each other that we wouldn’t let this experience destroy us. That somehow for him, for his sake, we would make it bring us together.

And, unfortunately, he did end up passing away. And you can’t imagine, like, coming into the world and coming into this hospital with this wonderful baby boy and then leaving empty handed. It was horrifying. And, again, this experience just crushed us to the core. And people sometimes ask, Richie, what did you learn from your brother-in-law passing away? From your son passing away? And I boil it down to this.

I call it Gavins’ law, in their honor, which is live to start, start to live. Because when you really live to start those ideas that are pressing on your mind, you really will start living. And again, we have a limited amount of time and so when these ideas do press on our mind, a lot of times we push them away thinking it’s something for later or it’s a stupid idea.

But, because of this experience, that life is short, I realized, you know what, we should embrace these ideas and do something with them now so we can live a life without regret.

Andrew: And at the time you were president at a financial services company and you decided I’m going to do something that maybe sounds stupid. What was that?

Richie: So I started really looking at my life and saying, “What am I doing and what do I really want to be doing?” And I was president of a financial services company and life wasn’t terrible, but I wanted to be in a situation where I could be writing and be an author and make an income and make a living doing that, that I could go speak to people all over the world and inspire others and to tell Gavin’s story.

It was just kind of what I wanted to do, so I ended up looking at my life and talking to my wife about it and I did, I quit. I quit being the president of this financial services company and we went on a three month long road trip. We traveled from Hawaii to Florida and we went all the way up, then we went over to the West Coast and we went up into Canada and I went on a surf trip into Costa Rica.

We were doing projects along the way that helped provide the income we needed to make this work, but we can get more into that as we go. In reality, I started living the life I wanted to live instead of waiting to live that life I wanted in the future, which I knew was an illusive future. We think that all these things are going to happen; when I finally do this, when I finally finish that. Because of the deaths of my brother-in-law and my son I realized, ‘No, I need to act on it now.’ and I moved forward and then created a business around that lifestyle.

Andrew: And I’ve seen so much of what you’ve done because you’ve taken that step. I have it here. . . I don’t how much of this I could even read in here. Let me get a few of it in. His book Resumes are Dead, which is a previous book and What to do About It, hit number one on the business and investment list, number one in careers, number one in job hunting, and broke the top 100 of all free Kindle books. His book, The “Power of Starting Stupid” also broke the top 100 books on Amazon and hit number one in multiple categories.

In 2013, San Francisco Book Festival named “The Power of Starting Something Stupid” the winner of the business category and the grand prize winner of all book categories in its annual competition. He’s a strategic adviser to businesses, organizations, and individuals, and an international speaker and CEO and Founder of Global Consulting Circle. Richie has been featured in Forbes, Business Week, Young Entrepreneur, Huffington Post, and other national publications both printed online.

There’s so much more. 2010, the Pacific Business News recognized Richie as one of the Top 40 Under 40 best and brightest young businessmen in Hawaii and so much more. And it’s because you wanted to do this for a long time and you finally said, “I’m going to.” This is what we’re going to be talking about here today. How to figure out what it is that we even want to do and then get ourselves to do it without feeling a sense of overwhelm.

This is where you are today, but you started out small and we’re going to talk about that. I’ve got a list of ideas, as I said, that we pulled from the book that we hope, that we know actually, will directly apply to our audience. And here’s the first one, you say, ‘Look through the stupid filter to find a smart business idea.’ One person who’s done that. . . I always like to see examples. Here’s. . . Who’s this woman who’s really happy?

Richie: That’s Sara Blakely and she’s the founder of a company called Spanx. And she. . . It’s a crazy story. She, to kind of boil it down, she had this idea to basically cut off the feet of pantyhose, hosiery, and turn it into a product for women that was different than what was traditionally out there. She started shopping this idea. She went to many factorers [??], she went to lawyers, and she went all around telling what she was trying to do.

I remember one instance in her autobiography or interview that she did where she says that. . . It’s so funny. That even the lawyer said to her, they asked, “Am I on Candid Camera?” They thought seriously like the stupidest thing they ever heard. It became something that she really wanted to do and so she kept pushing through it, pushing through it, pushing through it, until she finally talked to one guy who could help her make it happen.

I believe he was one of the owners of a manufacturing company that could help her make this happen. He actually went and asked the daughters if her idea. . . If it was something that they would use and his daughters said, “Yeah, that is something that we would use.” So, that totally changes paradigm and he said, “Okay, let’s try it out.” And Sara Blakely became the first self-made female billionaire in the world. And so. . .

Andrew: And here it is from this idea. There she is on the cover of Forbes.

Richie: There you go, from this idea. And it was a stupid idea and that’s the interesting thing, is that sometimes it’s the stupid ideas that are actually not necessarily inherently stupid. It’s just that they’re perceived as stupid because we’re afraid of them, they’re different, they’re unconventional. When in reality, it can be the smartest thing you could do. I actually call it the three T’s of stupidity. Everything from the telephone to the Model T to Twitter were at one time called stupid or crazy but they turned out to be these fantastic, you know, services and products and all that.

Andrew: All right and in order to get to that, one of the things you suggest we do is write down all of our ideas, turn off that part of us that says this is stupid, this makes sense, this is a billion dollar idea. Just write them all down. You did that early on. What was on your list?

Richie: Oh that’s a really good question. I actually, when I wrote it down, I actually broke it up into areas of my life. I literally sat down and said, okay, what I want to do with my family. You know, I’m married, I have kids. That’s not everyone’s situation so whatever your situation is think about that. But I started with that and then I went over about to my education and what I want to do with that.

What about giving back to the world? What about my finances? And I started going through this whole thing and I wrote down things with my family about how I wanted to be there for them. I got specific. I want to be able to drive them to school, pick them up from school, I want to be able to go on vacations when we need to. I got into education and I started writing down, I had a dream to go to a school called Thunderbird it’s the number one international business school in the world. All they do is international business and that was a dream of mine. I wanted to go back and get an MBA there.

So I wrote that down. I wrote about different charities I wanted to work with and sports programs I wanted to coach. And I wrote down how much money I wanted to make in a year so that I could support this lifestyle. I literally wrote it all down and by doing that it was really interesting because that’s what triggered us to go on this, that three month long trip.

Then I mentioned, it also triggered, and this is kind of a double-edged sword. I was living in Hawaii at the time but this school, Thunderbird, was based in Arizona. So because I wrote this down, we packed up and left Hawaii and moved to Arizona because that was the right thing to do for us at the time. My wife was on board, my kids were on board. And it was interesting, you can write down all the so-called stupid ideas that you want but it’s important to recognize that you’re not necessarily going to do them all.

You need to write them all down, just get it out. Download, so to speak, and then you can look at them and start evaluating which ones are most important, which ones you need to do first and then create a strategy of how you’re going to move forward and make them happen.

Andrew: Okay, just write them down, think about which ones are the most important, which have priority and then start doing them.

Richie: That’s right.

Andrew: All right, here’s another thing that we’ve pulled out of the book which is to work on an idea that excites you. I’m not sure if I can show this. Let me see if I can. I’m going to actually, oh here we go I can here and then mute it so that you and I can talk. I don’t know if you’ve seen this. Do you recognize this guy?

Richie: I know who that is but I haven’t seen this one. Oh my gosh.

Andrew: Look at what he’s doing. This is him in his company, just, who is this person?

Richie: That’s my friend Jace, Jace Bennet [SP] and he’s a crazy guy. Who would have thought you would skateboard on a skateboard ramp on one of those things? Whatever that things called.

Andrew: I don’t even know what that’s called.

Richie: Right.

Andrew: Usually you’re told by the guy who runs the company, “Do not touch it, we have insurance issues, you know, we can’t.” This is the same guy here. Let me show you a head on photo from his Facebook profile. Thankfully his Facebook profile is public so I was able to grab it. There he is.

Richie: You know what’s funny about that? That was actually a dare. We’ll talk about his company but part of his work is they have a road show in Costco and he was getting his hair cut and we dared him to actually shave his head in a Mohawk and go to Costco like that. Can you imagine the owner of the company walking into Costco like that? But he did it, man, this guy’s a crazy guy. It’s pretty cool.

Andrew: So what did he do? He at some point in his life, he ran over your son’s skateboard, right?

Richie: Yeah, he pulled into our driveway and ran over my son’s longboard skateboard and I was like, it’s okay, it’s not your fault, that kind of stuff happens, my son shouldn’t have had it in the driveway anyways. And he felt terrible. So he went home and over a number of weeks he started, he actually, created, cut out a new longboard skateboard for my son.

And I thought that’s really cool, that’s really nice, thanks so much, you know, we appreciated it. Then he took it one step further he said, “Do you think I could start a business out of this?” And I was like, “I don’t know, I don’t know.” And it was something that did get him excited and it was something that he could talk about. Before that on the skateboards, he was doing real estate at the time.

And it was interesting because as he was doing his real estate, he would talk to people, too, about what he did on skateboards. And he ended up meeting someone who knew about manufacturing overseas and locally, and as they talked and because he was so excited about what he was doing, he was able to transfer that passion from him to others and create this network of people who could help him trim this one-off skateboard into an actual company. So he did that.

They’re now in Costco. They’re selling, literally, thousands – I can’t disclose their numbers – but they’re selling skateboards all over the United States and then online they’re selling them all over the world. They have reps all over the world. What’s interesting is it was a saturated industry. There was a lot of people doing, obviously, skateboards, but he went for a market that was different. He said, “You know what? I don’t want to be grunge and skeletons and skulls,” and he knew that it was moms buying skateboards for their kids . . . Andrew: Mm, yeah.

Richie: . . . for the youth, so he went more for this bamboo feel, clean feel, and he went somewhere like Costco, where they weren’t selling skateboards and it was somewhere that other people weren’t going, and so he was able to turn that excitement into an affluent business.

Andrew: I see. So do follow your passion in this case. It worked for him and if you do do that, one of the suggestions you have is to aim for those small wins. And also, speaking of, this is another guy, see if I can pull this up, too. Got this off of his Twitter profile. I don’t know if you recognize that photo, but I think that’s Andy Price.

Richie: Andy Pearce, yes.

Andrew: Pearce, excuse me.

Richie: Yeah, yeah. So Andy Pearce, he is an amazing – as you can tell by the picture – an amazing surfer. And he was surfing at Sunset Beach on Oahu. Waves were about twenty feet and he’d surfed big waves before but this day was a little different and the wind was blowing really hard. And when the wind blows hard, the board kind of stays up higher on the wave sometimes and you kind of get caught before you can drop in.

Anyway, he got caught up on the lip of this wave and then kind of thrown down, almost like being thrown or jumping off a violent waterfall. And the board came up flying behind him and almost like an axe, just smashed his leg and actually broke his femur in half. And . . .

Andrew: Wow.

Richie: . . . he thought he was going to die. I mean, wave after wave after wave kept pounding on top of him and there was no one there to help him. And he literally thought, “What is going to happen to me? Is this the end?” Fortunately, somebody came and grabbed him and they kind of got on the same board and they would hold him really tight, so when the waves would hit them, they would kind of spin around together until they could get out of the impact zone and to an area where they could get in to the beach.

Now that’s a scary story, but what’s interesting is he, after getting a new shiny metal pole put in his leg, he ended up surfing again just a few weeks later. And he was surfing big waves again. Now he’s a fast healer, but what really got me thinking was why? Do you have a death wish? And what was interesting was he said, “You know,” and I said, “Are you scared?” And he said, “You know, everybody’s scared out there.” And I said, “Well, why do you do it?” And he explained that he did it because he loved it and he basically, in my words, his why was bigger than his fear.

And so sometimes, whatever we’re trying to do, if our why is bigger, if we’re more scared of not doing the thing we want to do than we are of actually doing it, we’ll end up making it happen. So as I looked at what his situation was, I realized that you don’t just start surfing if you don’t know how to swim, right?

So he started off learning how to swim, started on small waves, two-foot waves, four-foot waves, five-foot waves, eight-foot waves, ten-foot waves, he built his way up. And along the way, he would fall. He would catch a wave; he would fall. Small waves, but he learned how to handle these spills, so to speak, in a way that when he was at a twenty-foot wave, he could overcome that challenge and stand back up. You don’t just all of a sudden go from zero to twenty feet.

You start and you go incrementally. So when you’re starting a project, a lot of times we think, “I have this great idea,” and we go from zero to twenty feet. We go from zero to building our company. We go from zero to, in Jason’s experience, Costco. We can start thinking from zero to the biggest thing and we’d say, ‘Oh, that’s too big. I can’t do it.’ That’s not the way you go. You start small incrementally. First, learn how to swim, then you do the smaller waves and you work your way up.

So with whatever project you’re trying to do break it down into small, more manageable parts. Start with the first piece that you can do and then if you fall it’s a learning experience that helps you to be able to get back up. So, as you work your way up that ladder you’ll be able to handle yes, the big success, the big failures and move forward.

Andrew: A lot of times though, when we have those small steps that we need to take we feel like, “Well, that’s too small. That’s not where I want to be.” Speaking of swimming, I remember actually when I was learning to swim. The instructor taught me how to kick. I said, “I don’t want to learn how to kick in place, I look ridiculous. I want to learn how to actually swim. You know, like show me how to move around.” But, you know, you have to learn how to kick and you have to learn how to move, you have to learn how to breathe in order to put it all together and swim.

And then once you swim you’re saying, “That’s just one small step for him.” And then he takes it, right. The same things happens for business. How many times do we get a small win and we feel like, “Well, that’s too small. Sara is on the cover of Forbes magazine. Why am I here if she’s over there? Maybe I’m in the wrong place.” You got to start somewhere. You got to start by cutting, you’re saying.

Richie: That’s the problems we. . .

Andrew: Cutting the. . .

Richie: You know, these magazines are great, but when you read them you think, “I can never get to that spot.”

Andrew: Mm-hm.

Richie: You have to go back and look at everything they did. They started. . . Everyone started at somewhere and it started small. And the guys who are doing big deals over and over and over again, that’s because they went from small to the big deal and then they already learned how to ride those 20 foot waves. So they are able to jump from 20 foot wave to 20 foot wave and do big projects every once in a while, but it does, it starts with that first small baby step.

Andrew: All right, onto the next big idea which is to ask yourself, will I regret it when I’m 80? And one person who did that was this guy, Jeff Bezos. How did he do it?

Richie: So this story will kind of tie other things we were talking about together. Jeff Bezos was working on Wall Street and he had a great job and he had this idea to sell books online. And he did his research, saw that the internet was growing fast and he ended up talking to his boss about it and his boss took him on a walk around Central Park and his boss said, “Well, that’s a great idea, but it’s not for someone who already has a job.”

And so it became an idea, but it was a stupid time for him to do it. But he realized that if he didn’t do it he might be missing out on something. He asked himself this one question, he asked, “Will I regret it when I’m 80?” By asking himself that question he realized, “Yes, I would regret not trying to start this Internet business that’s selling books out of my garage.”

He figured it would be something that he would regret and he ended up quitting his job in the middle of the year, which is a crazy time to quit because then on Wall Street you don’t get your annual bonus, packed up his car and moved from New York to Washington and started Amazon.com from his garage.

And now, there you go another example of a billionaire and someone who is changing the world, but what’s interesting about it is, as we talked earlier about creating that list of all the things you want to do, that’s a good way to narrow down which one of them you want to do. Which one would you regret most not doing?

In fact, when Jase Bennett, Jase Boards, he talked to me about starting that company, I asked him that question. I said, “Well, will you regret it when you’re 80?” And because he narrowed down the process to that he said, “You know what, I would regret not doing it.” So he ended up trying it out. So, it’s just a great way to narrow down what you’re trying to do.

Andrew: All right, onto the next one which is to experiment then move forward or move on.

Richie: Okay so, this is really important because yeah, we talked about writing ideas down, we talked about it maybe if it’s stupid, it might be smart, we talked about narrowing it down to something you might regret, but here’s the thing, a lot of times what I found is people will wait to do something they really want to do for so long that when they finally go and do it sometimes it failed, but they built it up to be so big and they wasted their whole life on a dream that never pans out.

So it’s important, like we talked about earlier, to start early, but to experiment so that way you know if it works move forward, if it doesn’t move on. That’s what Darren Rouse did. Darren Rouse, he is the founder of Pro Blogger and also Digital Photography school, a number of other blogs and internet businesses.

What’s interesting about him is if you go back and read his story what you’ll find is that he started small. He started with a little website that was making maybe $5, $10 a day. He started working his way through it trying to see what worked, what didn’t work. He experimented, he told his family about it, and, he thought he was insane. Especially when he said he wanted to turn it into a real business. But, he didn’t just jump ship and neither did Jeff Bezos, and neither did Jase Bennett, and neither did I.

We first experimented on the idea and when it became something that we know could work, then we moved out of our old businesses and into our new businesses to make it work. So we started small and we turned it into a multi-million dollar franchise, and, it all started by experimenting.

Andrew: Was the original idea for Pro-Blogger, that was just a series of pokes that he did on his personal blog. Is that right?

Richie: I think he had a number of blogs, even before Pro-blogger and I don’t know the history of Pro-blogger specifically, but, I know that it was a number of Internet businesses that he started. And, then, I think he took those principles and moved over to Pro-blogger, what he was learning.

Andrew: Okay, and when you say, moved over, it means, obviously, continue building it, or move on. I mean, it’s okay, sometimes, to just say, this idea didn’t work out, I’m closing it down. Instead of continuing because you will not take the loss, because you don’t want to quit.

Richie: It’s important to call it quits when, I think Zack Gooden calls it a cul-de-sac, in his book, “The Dip.” If it’s a cul-de-sac, you need to quit, if it’s not going to pan out, maybe it was a really stupid idea. Or, at least, a stupid timing. But, at least, you can live your life knowing you gave it a chance, and it was a small scale, you know, we talked about ramping up. So, that it wasn’t waiting around you whole life to do this big thing and it’s a big fail. It was a small fall, and you learned from it, and now you know what to do moving forward.

Andrew: Alright, on to the next one. And, that is, to weed out non- essential tasks and work on your idea. For you, you set an alarm to ring every fifteen minutes, is that right?

Richie: Yeah, so, what I’ll do, it’s something that helps me get focused. If I wake up and I have my routine, but what happens is, that routine can get all changed up, depending on if a kid has a rough night sleeping, or if a number of things happen, I find myself opening up e-mail and getting trapped in e-mail, lan, and then I can spend my whole day doing these activities, and I felt like I was productive, but I didn’t actually produce anything.

And so, what I try to do is narrow down that. Will I regret it when I’m 80 project, we narrow that project down, and, then we say, I’m going to spend, because we have other jobs, other things we’re doing, and it may not be a full time thing. So what you do for yourself, is, I’m going to give myself a 15 minutes of undivided attention to this project. And, you turn a timer on, this is what I do, that helps me, and, I just crank on it until I’m done. And, in 15 minutes, it goes off, hey, wow, that’s amazing, I got it done.

And if I want to do more time, I give it 15 minutes again, and, I keep moving and moving and moving until I have to move on to other things. But, this also works for time you want to waste, of browsing the internet, or in e-mail. If you set yourself a time-limit, and say I’m only going to do it for this amount of time, you know that you’re able to manage your time well and balance so you can focus your priorities and do the things that actually produce and not just feel productive.

Andrew: It looks like you have a fly in the room or something there, huh?

Richie: My hands are going everywhere.

Andrew: Isn’t that distracting when that happens?

Richie: Maybe that’s a good analogy there, right, if the fly keeps bothering you, so you can’t get anything done that you want to get done. It’s true, and, everything’s always going to temp you to move away from the projects that you want to do. But, if you get serious about the project that you want to do, set yourself some dedicated time, and, actually work on it. You will make some real progress.

Andrew: I imagine that must have helped you when you were writing the book. Writing a book is really tough.

Richie: It’s a beast. And, if you think writing a book is going to be this great, awe inspiring, wonderful thing, you’re going to sit in this little man cave and get it done, when, in reality, it’s just hard, it’s just so much work when you get into it. But, it was so important to find ways to dedicate time to it. And, you know, I’d pull all nighters, and I’d do all those things to meet deadlines, but, in reality, I didn’t set aside time to get it done, it never would have gotten done.

Andrew: This is cool that you attended, and I see that they’ve got you, that you wrote up the book and your success with it. It must be great to actually see that, after all that hard work.

Richie: Yeah, now, looking back, after I did write down those things I wanted to do, and made the time to actually make them happen, it really is amazing to think that I’ve now accomplished that, I’ve done the executive MBA program from Thunderbird, I’ve written this book, I’ve gone around the world. I spoke to more than 20,000 people last year from Bali to the Dominican Republic, all over the United States. It’s amazing and it all started with my own stupid idea. So I really believe that embracing those ideas, you can make magic happen.

Andrew: Onto the next one which is START with what’s right in front of you. What does START stand for?

Richie: Okay, so START’s an acronym I created after researching what successful people did. I literally spent six years studying what it was that successful people did. And I came up with a number of principles and I tried to encapsulate it with this word START, which stands for Serve, Think, Ask, Receive and Trust. Start with service. When you have an idea, serve others in the capacity that you can in alignment with the project you want to do.

People always think they have to wait to get paid if there’s something they want to do. Successful people don’t wait to get paid. They start doing it anyway. Serving the people you want to serve – and you thank them, even if people should be thank you, you thank them. And by doing that you show you’re grateful and that gratitude creates this wonderful influence and people want to start working with you.

And you create this relationship of trust where you can finally ask people for help because asking can actually burn bridges in a lot of ways, but if you ask by first having served and thanked, you ask them in a way that I call mission matching. You align your mission with their mission and you ask for something that’s in line with what you want to do.

Then you can be open to receiving and you can receive what you’re trying to do graciously, gratefully, kind of like in football. There’s the receiver, the quarterback throws the football to him, he’s meant to receive it, not to just [??] it down. And so we need to be open to receiving. And lots . . .

Andrew: I have such a hard time with receiving. That’s why I’m smiling.

Richie: It’s so hard because people will offer things to you, and you might be, “Oh, no, no, I’m okay. I’m okay,”Because you don’t want to put someone out, you don’t want to be a mooch, whatever it is.

Andrew: Yeah.

Richie: But in reality, successful do. They receive all the time. But they’ve also been giving, right? They’ve been giving this whole time. So the idea of receiving, it’s different than giving. When you get, it’s like getting a present and not opening it. When you receive, you get the present, you open it, and you do something with it.

Going back to the football analogy, you catch the ball and you run and score a touchdown with it. So if I were to offer you something and you were to receive it gratefully and then do something with it, that’s a win for both of us. So that’s really important. Serve, Think, Ask, Receive and the last one is Trust. If you can trust this process, everything goes faster. Everything moves fluidly.

When there’s distrust, then there’s lawyers and contracts. Not that those are necessarily bad. Sometimes they are, sometimes they aren’t, but everything’s slowed down. But when you trust, everything moves forward in a more fluid manner.

Andrew: And that last part, which is Start with what’s in front of you . . .

Richie: Okay.

Andrew: . . . comes from a section of your book where you talk about Muhammad Yunus. There he is. A student said to him, “There’s so many things that concern me, so many problems that I need to work on. Where should I start?” And he said . . .

Richie: He said, “Start with what’s right in front of you.” He’s one of my heroes. I love Muhammad Yunus. He . . . you know his story . . . he was in Bangladesh and he was an economics professor and he saw all these people literally on his doorstep and they were kind of like . . . he described them as living skeletons, people that were so poor they couldn’t feed themselves.

And here he was, preaching these great economic theories. So he went out into the villages and he found that for only $27.00, he could help a number of villagers get out of the loan shark situation and work on their own businesses. Over time, that idea – they call him the Father of Microlending – turned into this massive, I guess, you can call it an industry, where they’re helping the unbankable be bankable.

Basically, he’s helping people work their way out of poverty, using their own skills. And he started with what was right in front of him. He could have been in the classroom, just talking about these great theories and what the governments can do, but instead he went out and he went, “$27.00,” and then it turned into this massive enterprise and that model has been used over and over and over again. He started with service.

So you do whatever it is you’re trying to do, look at what’s right in front of you and start with that. Don’t try and reach for all these things you don’t have. There’s a lot of stuff that’s right there you can do right now.

Andrew: Okay. I used to be overwhelmed, too, with I want to start somehow not just doing interviews on Mixergy but teaching something. How do I get it? Where do I get the software done?

Then, I had this software that I’m using right now to do things like put the camera on me, put the camera just on you, this and that and all this stuff. I just had it on my computer. I said you know what? This is just some free piece of software that’s available online. It’s called CamTwist. What if I just push myself and come up with some way of adding teaching sessions to Mixergy with whatever I have, without trying to think of how do I rent a studio, without trying to think of how do I fly someone in or fly someone out?

Or, just say whatever software I have, I could do it. So, much of what’s around here was actually originally created using Keynote, because that was available, and CamTwist because I had that. And, the recording was with Call Recorder because I had that.

I see what you mean. I get so overwhelmed sometimes with all the big ideas that I have. But, you’ve got to start with what’s there.

Richie: That’s a perfect example. If you hadn’t started with what you had right in front of you, you may have gone out and spent a lot of money on things you didn’t even need. You may not have even started at all.

Andrew: Right, right.

Richie: So it’s really important. Just start with what’s right in front of you and then work your way up. It ties back into that wave theory. Just start with the small ones and then progress incrementally.

Andrew: I do have one other point here that was actually kind of hiding underneath for no good reason. There it is. The final point that I wanted to bring up is to leverage existing resources. You give a great example of the woman behind this product. Let me see if I get… I can, of course, bring it up. There it is.

Richie: Yes.

Andrew: Do you recognize those moccasins?

Richie: I do, I do. This is…

Andrew: [??] by this woman who…

Richie: This is… So, her name’s Susan Peterson. This is a great story. She got married, started having kids, and their family was struggling financially. Her husband was in school. She wanted to figure out ways that she could help contribute and take care financially and also take care of the kids at the same time.

Her husband at the time was replacing windows for a job. She had this idea where she asked can I take the aluminum from the windows that are being taken out and recycle it for money. The owner of the company said sure.

So what was she going to do with this money and why does she do that? Well, someone told her you should start selling stuff online. So, she’s like okay I should sell stuff online. That’s like the 50,000 foot level. She started trying different things. Some things worked, some things didn’t.

Then, she had this idea. Oh my gosh, there’s… Sorry, this fly’s still here.

Andrew: I see it. It is haunting us, taunting us.

Richie: The fly doesn’t want me to tell this story.

Andrew: Right.

Richie: She looked at her baby’s feet basically and said there are no cute shoes for my baby. She got a pattern for shoes and said what if I did them out of leather, what if I made moccasins. So, she made moccasins for her baby and then she started selling them online I think on Etsy. People thought it was cool.

Andrew: …[??]…

Richie: So many people thought it was cool that she started making more and more and more. With the cash flow she got she was able to buy more products instead of having to recycle the aluminum. She was able to create more.

One day, I don’t know if you knew this part, she got a call. I think it was from Parent magazine, Parenting magazine, one of these magazines, that one of the Kardashians wanted to use her shoes in their photo shoot. She being naive was like I’m not going to give you shoes for free.

Andrew: So she charged them?

Richie: Well, she was going to, then they went back and said let me tell you how this works. She ended up giving the shoes. Now not only do the Kardashian babies almost every time you see their babies, go back and look if you want to, they’re always wearing these moccasins, but several celebrities are using them.

And, her business has started booming. She does a lot of her marketing on Instagram doing a lot of contests and things about baby moccasins. Recently she was on “Shark Tank” and…

Andrew: By the way, here, while I’m looking for the Kardashian photos I automatically will try to tee stuff up.

Richie: Yeah.

Andrew: I can kind of see it, but I don’t know what the Kardashians look like. This is Penelope wearing chambray one piece…

Richie: …[??]…

Andrew: …no gap. Oh,…

Richie: [??] might be wearing moccasins.

Andrew: Moccasins by Freshly Picked.

Richie: Yeah, that’s it, yeah.

Andrew: Where is it? More moccasins.

Richie: There you go.

Andrew: There we go. Kim Kardashian, Freshly Picked moccasins on Kim Kardashian’s blog. Yeah, wow.

Richie: Isn’t that crazy and again, it started with a stupid idea to sell things online. She didn’t know what it was going to be. She experimented. She started small. Everything that we’d be talking about she did, but bringing you back to the principal, leveraging existing resources. That’s what she did.

She didn’t have the money to buy leather to make the shoes, so she recycled aluminum from her husband’s company. That’s what we’re talking about. Starting with what’s right in front of you and leveraging those existing resources.

We always think that whatever we want to do is outside of us when in reality it might be right here, right in front of us. So, it’s very cool.

Andrew: Alright, well, these are . . . I think these are ideas that entrepreneurs need to hear that we do keep thinking that we’re one big thing away from getting started. One big idea, one big customer, one big funding round, one big something outside of us and always out of reach when in reality you’re saying, start smaller.

Don’t be afraid to jump on ideas that seem stupid and pursue a passion that you’re willing to stick with and it will give you a life that you want like, one that will allow you to do this. Sorry, you were about to say something.

Richie: No. Yeah, like you’re getting whatever you want right there. That’s so true. There’s one more thing I might add.

Andrew: Yeah.

Richie: Is when you’re doing it, whatever you’re trying to do, call it a project, name it a project. So instead of saying I have this idea for X, Y, Z, call it the X, Y, Z Project because a project can fail, a project has a beginning and an end. A project is an experiment.

So whatever you narrow your idea down to, call it the whatever project. Set yourself some time to get it done in a deadline to hit different milestones and then you’ll start getting on track because a year from now when you look back you’ll either have done something with your idea or nothing and it’ll be way better to have done something to know it’s not going to work out and [??] held onto it for that whole time or to have started, to get to a point where you can leave whatever you’re doing now to do exactly what you want to be doing. So, start small and call it a project and just make it happen.

Andrew: Great advice. The book is called The Power of Starting Something Stupid. If you click over on the home page and go to Amazon you’ll see Richie’s got a bunch of really positive reviews. They’re like this 115 customer reviews. Almost five stars. No one’s going to give you even if you wrote the new . . . even if you wrote the Bible, you aren’t going to get five stars.

People have to come in and rag on you a bit, but frankly this is really positive reviews from a book that’s full of great examples some of which we’ve covered here in this program but there are many more, much more depth to even the ones that we did talk about. The book is available everywhere. Go out, get it, grab it, read it and start something stupid, right?

Richie: That’s right.

Andrew: Alright.

Richie: Absolutely right. Make it happen.

Andrew: And the website if people want to follow-up with you. This is the site that I’ve been going to. It’s just RichieNorton.com. He’s one of the few lucky people out there who has his . . . Did you have to change your name to Richie Norton? Was it like Richard Norton? Someone else had RichardNorton.com so you went for Richie Norton?

Richie: I didn’t even look for Richard Norton. I just stuck with Richie.

Andrew: Alright. Well, congratulations on getting your name. Makes it so much easier to send people over to your site and right on the site we can see that there’s these 37 page action guide to make your stupid idea your smart reality and the 76 day challenge right at the very top of the page. Thank you so much for doing this.

Richie: Oh, it was my honor. Thanks so much for having me on. I really do appreciate it. It’s been great.

Andrew: Thank you all for being a part of it. Go do something stupid.

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Master Class:
How to grow sales
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Taught by Dan Fagella of Science of Skill

Master Class: Database Marketing

 

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Transcript

Andrew: In this session we’re going to talk about how using database marketing will help you increase your sales. And the session is led by Daniel Fagella. He is the founder of Science of Skill, an online membership site that teaches Brazilian JuJitsu fighters how to beat their opponents.Everything that he learned there, to grow this little community of a small audience to help him get large revenues, everything that he learned there, he is now teaching on a website called–here, let me bring up that site. CLVBoost.com. CLV, of course, stands for Customer Lifetime value. He teaches this whole stuff in depth, how to get more value out of your customers over the life that they have with you.I’ll help facilitate this course. My name is Andrew Warner. I’m the founder of Mixergy where proven founders like Dan teach. Dan, thank you for doing this.Dan: Yeah.

Andrew: And I wanted to show this photo that you shared with me before we started.

Dan: An old favorite.

Andrew: Where were you when you took this photo?

Dan: Let me see. Hold on. Let me see. Oh it’s coming up. Man, this is great. This is in the back of Rawlings Floor Covering, a carpet store in Wakefield, Rhode Island. You can see the carpets in the background. You got the forklift over there to the right. Actually that’s my buddy and my right- hand man, Tim, over on the left who actually works with me on the online business now.

Andrew: Okay. So you’ve got a business now. Back then you had a business.

Dan: A very small one. Yeah.

Andrew: What’s the problem that you had that maybe our audience will identify with? I want to understand the problem, and then how the solution can really help.

Dan: Yeah. The problem was I wanted to teach martial arts and to be able to have that be my full-time shebang. Really the real problem was, Andrew, I went to U of Penn for grad school, and then I got the bill for it.

Andrew: Okay.

Dan: So that was really the problem, and I realized I need to do different things in this small town martial arts academy to make the kind of bucks to be able to pay that off. So we were in the back of the carpet store. We actually had to leave there because there was a new owner. So now it was, “Alright, paying rent on that building, paying rent to live and eat, and then also Penn coming up and having those payments.”

And then essentially realizing we not only need more folks coming in the door but we have to find a way to catch up with all of these people and make sure they, at least, get an appointment. They, at least, come in because there’s no chance to sell them unless that happens. That was the biggest thing for me.

Andrew: That was the town, by the way. We always talk about having small mailing lists. Your whole town, the whole of people that you can reach, was how many people?

Dan: It was 8,000 folks in our town of Wakefield, Rhode Island, which technically where we’re based. Yeah.

Andrew: Eight thousand people. So 8,000 folks. Most of us maybe have 8,000 people on our mailing list or more. Your whole capacity was 8,000 people. That’s as big as you could get. You still were able to grow. This is where you moved into using some of what we’re going to be talking about here today. Are you able to share where your revenues are on the site, just to give us a sense of what can be done?

Dan: In May?

Andrew: Yeah. What kinds of skill and this new business that you’ve built based on the database marketing we’ll be teaching?

Dan: I think I sent the Science of Skill… I think I sent it over in the initial interview. So we’re right now on pure info product level cruising at 30 something G’s a month for information products at Science of Skill. And then there’s consulting and other things that kind of make that messier that we have to pluck out of there because I also need to clean that up because I’m also working on a sale of that business there as well.

So I need to make sure that stuff doesn’t show up in these fences that don’t belong there. That’s what we’re doing there. Black Diamond was at about 17 or 18. We had a couple of months where we were above 20. Now that’s about as good as we got, and then I sold that business on my way out and moving up here to Boston.

Andrew: Is Black Diamond the studio that you had?

Dan: Yeah. Now it’s under the physical control of one of my purple belts. His name is Joshua LaBossiere. He runs it now. He’s sort of transforming it into a little bit more of a kid’s martial arts gym, more so than the adult’s kind of MMA side things that we had. But it’s still in existence today.

Andrew: Okay. Everything that we’re showing here today about segmenting, about audiences, about reaching the right person with the right message using database marketing, it’s not something you’ve invented. You actually have noticed that this existed before. I want to get into the tactics, but first I want to get a quick overview. This existed before with companies like this one. Can you describe how L. L. Bean does it just so we understand what’s coming up here in this session?

Dan: Yeah. So now I did the database marketing which is really what L. L. Bean’s ballgame is in terms of… I wouldn’t say it’s their entire deal, but I think L. L. Bean is better known for that than anything is the fact that L. L. Bean, they do marketing that’s tremendously expensive. They are involved in marketing that involves mailing calendars. Or, what do you call those big old rigging…

Andrew: Catalogs.

Dan: Catalogs, yeah. I knew it started with a “C” and it involves paper. That’s how much coffee I had this morning.

They mail those bad boys to people’s houses. That’s very expensive for ink, and paper, and postage. When they send one of those, the cover… They have obviously multiple variations of the catalog that they’re testing very succinctly, very scientifically. They have millions of folks on their list. They’re sending along postcards and ride along mailers with those.

They are varying their frequency depending on gender, demographics, location, all those various bits of information. And, they have to be calibrating how all of those various campaigns do so that they can do it over and over again each campaign, which is millions of dollars that they actually have to spend outbound to even have a chance of selling these boots, and coats, and backpacks, and everything else that they’re doing.

They are doing very, very expensive and higher level database marketing. This has been happening well before email even existed.

Andrew: That means that if I’m a man I’m not going to get a catalog that features clothes for women.

Dan: I would sure hope not.

Andrew: Right. That’s the kind of basic segmentation that we’re talking about, but it gets much more, much more, much more in depth.

Dan: Yeah.

Andrew: And, we’re going to show how to do that. One thing that you told me before we started here… Let me bring up the big board with the topics that we’ll be covering. One thing you told me is you want to start off by asking people about their intent,…

Dan: Yeah.

Andrew: …and you do that right here. Can you explain what we’re looking at and how you’re asking for intent here.

Dan: Yeah. This is one of our recent internal product launches. We’re replicating this. We’ve done this on a number of different occasions. We’re replicating this with an upcoming product launch where folks are selecting. They’re getting in on a free escape video series. I did sort of a newer video series based on a number of seminars. I was out in Oklahoma and some other places.

To get these videos we just simply ask them hey, let me know what position you’re having the most trouble escaping from. Also, let me know how you actually like to learn. Do you prefer drilling? Do you prefer strategies? Or, do you prefer specific techniques?

So they’re giving me an email address, which for most of these guys I had, and then some additional bits of information just about what they actually care about. Then, they go right into actually watch the video.

What that allowed us to do was when we started selling that course or just showing people the other free educational content, it wasn’t just for the actual sale. It was also just for the other videos in case they’re not buyers but they still want to learn – still calling out to them. We would target hey if you’re interested in escaping mount this is a particularly important technique for you. Or, this is a style of drilling that would work well with this particular move. Or, this…

Andrew: I see.

Dan: …ties in well with this other mount escape. So, we could change up the subject line and the body copy of the emails just slightly to get better opens and better click throughs from literally every single person that came through that squeeze, as opposed to just the general email list. Hey guys, if you generally like escapes here’s generally how it’ll generally help you. It doesn’t exactly have the same ring to it as really tuning into precisely what they just told me they actually care about. So, very, very big difference there.

Andrew: What about this, that most people who see this say I have a hard time getting an email address at all from people, and I feel bad asking them for that? You, Dan, are suggesting that in addition to asking for an email address we also all ask for more detail.

I can see how you do it. You want to know what kind of escape people want, how they like to learn. Does this reduce conversion rates? I mean does it reduce the number of email addresses that we get?

Dan: On the front end it can. So, if you do split tests most people… If most folks do a split test if they just have name and email they may see a drop off, or they may see an increase, or they may see a decrease if they take away, let’s say, first name and just do email. That’s especially common in niches where name and email are… Like the internet marketing niche, for example, where everybody’s been squeezed 8,000,000 times and they just want the stuff, so they’re just give me the email address, you know.

But ultimately, testing is what tells you, so it’s the same example here. Just so you know, Andrew, this form was not a front end squeeze page for, let’s say, a random guy off a blog. It could’ve been, and if I really wanted to succinctly test it over a couple of months I would – or even over a week if I want to dump a bunch of traffic on it.

But instead of doing that, I just sent my existing list through this form before I released this product. So, many of them had not given me this information yet. If they did they did not get that survey, because I already know that about them.

However, if they didn’t give me that info I just said hey guys we’re going to be coming out with a cool video series. I’m going to give you a little bit early access to the first video. Just let me know what you actually care about learning about because we have a lot of content here. [??] And, then just sent the existing email list. Now anybody that likes me well enough to give a couple of bits of info and is interested in that kind of thing will fill it out.

Yes, I would say should you make an eight step opt in on your front end page? Not necessarily. But, is it worth split testing a quick drop down with three options? Yeah it is. It’s very, very tough to make the bold assumption it’ll inherently dip your opt in rate.

And, to be frank, I’d say, 80 percent of the time I’d make the bolder assumption that your increase rate of purchase within the first two weeks or whatever your metric is would more than make up for the nominal dip in front end conversion. A little bit of tweaking on the subject line, higher ROI, so testing is the king, but you know, especially if you’re existing, there’s really no risk.

Andrew: If someone is afraid or gets dated that says, “Don’t ask for more information than an email address, we’ll show them in a moment what else they could do,” but before I move onto the next point where we show them what they could do, what is contextual parsing? You created this great image here that I want to look at. What’s contextual parsing?

Dan: Yeah, contextual parsing involves determining what people are interested in or care about, based on where they opt in and where they find you, what they select themselves that they hold as a particular interest. In my business, I have a number of YouTube videos that link to Squeeze pages, relating to what that video is about, so I have videos about leglocks, and then I have Squeeze pages underneath those videos about leglocks. I have blog posts about leglocks, and then I have products, and Squeeze pages related to leglocks in those blog posts.

If you go to places like HubSpot, they’ll do the same thing. You know, you were just mentioning, Andrew, there’s some folks that either…maybe they have a business or maybe they don’t have a business, or maybe they have an online business or they have an offline business.

If someone is selling business training, they might have blogs about each kind, and then they might have opportunities for folks who are particularly interested in that kind of thing to get in there, so it’s not just a martial arts idea, obviously. It’s just about where are they finding you, and by that alone, what can you know about them, and what do you know about how you can follow up?

Andrew: If there’s a YouTube video that’s directed towards say, leglock, when we link it, we want to link it to a Squeeze page where we get their email address, and tag them as being interested in leglocks. That’s what you’re saying.

Dan: Yes. I tag them more if it’s in a different email functionality. I work with all email clients. Some people are married to the email software their using. Different people can do it in different ways. AWeber would be an entirely different list off in times, and get response would be a different campaign, and Infusion software it would be a tag.

But yeah, you’re just categorizing them, and making sure that your succinct targeted follow up to your first offer, whatever that is is hyper-tailored to what you already know, based on where they even found you in the first place. You’re not watching my YouTube video for seven minutes or opting in on a button down below, unless you like leglocks, you know, if that’s a leglock video.

Andrew: I see, and again, for blog posts on our site related leglocks, or whatever our topic happens to be, underneath, you wouldn’t the same box asking for an email address for all topics, you would have one directed towards a topic of the post.

Dan: Yeah, because I mean, A, you’ll get a better opt in rate, especially on blogs, there’s no downside. You get a better opt in rate if it’s “Whoa, I just read this blog about this topic I’m super interested in,” escapes, leglocks, whatever your, you know, criteria are, and then “Whoa, I’m getting emails every day about that same topic too.” It’s different than “Hey, martial arts email number one,” I don’t really know, but leglocks, “Oh, I just read a post about that. This is a greet video,” boom.

Andrew: I’m glad that you made the point of…when I said the word, “Tag,” you’re right, that’s very Infusionsoft related. When I first saw that you launched CLVboost.com to help people do this. I just assumed that you were going to say what everyone else says, which is “If you’re serious, you have to get involved with whatever your software preference is.” I like that you’re saying, “There is no single software that’s going to be perfect. If you’re married AWeber, and you’re happy with it, here’s how to use all this with AWeber.”

Dan: Exactly.

Andrew: “Give me a different list. If you’re married, and are happy with Infusionsoft, you can use tags to do this.” It’s concepts that matter, not the specifics of the software. Cool?

Dan: Completely, yeah. Yeah. I’m totally software agnostic with my own work, and I think that concepts, again like you said…I mean they’ve existed so long before these software even existed. It’s just about plugging in the principles.

Andrew: All right, onto the next point, which I brought up earlier, which is you can segment further…

Dan: Yes.

Andrew: With a mini survey.

Dan: Yes, you can.

Andrew: That’s what you were starting to say earlier. Let me see if I’ve got…here’s an image that you created to show this point. In a moment I want to show how you do it. Why don’t you describe the point first, and then I’ll show how you do it.

Dan: Yeah, so when you ask for…the best time to get information from folks is when you just ask them for information just like the best time to ask for someone to buy something is after they’ve bought something, in general, right. I’m making a generalization here, but it works really darn well with surveys.

When somebody opts in in a way where they’re giving you…even if it’s as simple as just an email address, right then and there is a great time to say, “Hey, let me know a little bit more about you, and what you care about, and at the same time, I’ll give you a little extra something, I appreciate it, you know, it’s important for us to understand who we’re talking to, and what you actually, you know, want to hear about from us.” It can be a think of courtesy in addition to better targeted marketing, and then obviously you have the example of my own survey that I use.

Andrew: Here, let’s take a look. This survey that I’m looking at here has way more questions than you probably want to put on a squeeze page.

Dan: Oh yeah, many more.

Andrew: I don’t know if the audience can see it. I can see it here, very tiny. At the very top I can see that this went out through Infusion soft. So this went to your existing list, people who had already given you their email address, right?

Dan: Yeah.

Andrew: This is how… Sorry. You describe it. I’ll just zoom in so that people can see it better.

Dan: These are people that have already been on my list. So instead of linking this at the bottom of the blog post which is seemingly a lot of information, I normally wouldn’t do this. Now I didn’t test it. For all I know, it may have done just as well.

In terms of best practice, I wouldn’t go for it, but this is sent out to folks who have already opted in. It gets sent out immediately if they make their first purchase and they haven’t filled out the survey, or it follows up with them about two weeks after opting in and say, “Hey, now that you’ve been with me for a bit…”

We do a lot of different interviews and a lot of different techniques on what are your major goals? What are your major areas of interest? And what is your weight class, and I’ll make sure I send you things that are a little bit more tailored and relevant to you.

Andrew: Okay. So now we’re starting to really get to know what the audience wants, I’m wondering if I can even show this next time. Let’s go to the next point and we’ll see how the visual works out. The next point is actually… Here it comes. Where is the next point? There is the next point, right once and then customize. So the reason we’re collecting all this data is so we can create some customization. And, again, you did a great job of getting us some visuals on how to do that.

Let me show this before we show specifically how you do it. This is the front end email request. What is this describing?

Dan: Yes. Okay. Great. So if you look here, we just used an example of that escape squeeze page. It said, “Are you interested in or it asks for their preference in learning. Do you prefer drills? Do you like techniques, or are you more of a strategy person? You’d like to learn more of the strategy of escapes.”

So if they select… Let’s just say each one of those correlate with a color. So drills will be green, techniques will be blue, and strategy will be red. Now if they say they’re most interested in drilling and they opt- in, I’m essentially going to send oftentimes a relatively similar email sequence, maybe, with some different videos but especially different subject lines to get those clicks up.

So this first on the left hand side, you see it says, “Six front end emails sell an initial offer,” right?

Andrew: Mm-hmm.

Dan: Those will all be tailored and talking about drills to the drill guy, techniques to the technique guy, and deeper strategic concepts to the folks that have selected that for their choice. So they select red on the form, they’re going to get those red drops, beep, beep, beep, those six initial emails are the ones that they get.

Andrew: Each one of those dots represents an email sequence.

Dan: An individual email within that square sequence. So they’re essentially only hearing about the kinds of video content, the kinds of ideas that tie into the way that they told me they prefer to learn, which is very, very difficult to screw that up in terms of getting any worse open or click through rate. In fact, it’s remarkably simple to just change the subject line, change a little bit about some of your paragraphs. You’re essentially sending out the same thing tailored to getting a lot better response.

Andrew: Let me bring up a text editor. This is how I was wondering how I can show. It’s a little hard to really see here.

Dan: Yeah. Yeah. It’s tough to see unless you have it side by side. It’s hard.

Andrew: Actually, maybe, we should just do it side by side. Maybe I can get to the audience. Are you okay with that?

Dan: Yeah. Bod-a-bing. Send it right out.

Andrew: Here, let me show two of them side by side since that could probably show best. This is essentially… Am I looking at the same email but it’s meant for [??]

Dan: This is a lazy email, Andrew, I’ll be honest with you. There’s very little changes between these two.

Andrew: Here, let me bring them out so that they’re similar layout, and then we can see it. Okay. So one subject line says, “Back now to escape time, open before tomorrow.” This one says, “Side control escape.” This should all be easy. So this one on the right is meant for someone who told you they’re interested in side control. The one on the left is for back now. Did I understand that right? Back now escape?

Dan: Yeah. I ended up on this particular internal launch giving away sort of some extra little back now fingers for the folks that are interested in back now and wanted to get in on a digital course that I’m no longer doing the DVDs for. And the side control folks, I was giving them some extra thing-ers when they ended up buying the course related to side control.

So I was giving them both a little bit of extra bonus for the purchase, but the email, as you can see, is very similar, but as you can imagine, Andrew, if you, let’s say, it’s cars and you’ve selected your favorite kind of car. I imagine it’s very difficult to sell luxury cars online but maybe posters and memorabilia.

And you said you really prefer Maseratis and you’re going to one that says. “Maserati fans, open before tomorrow tonight.” That’s a lot better than, “Hey, muscle car folks, check out this email.” It’s very different.

Andrew: I see. So even the content is the same, we don’t have to rewrite the whole thing for each segment.

Dan: Not at all.

Andrew: Just small changes. Ferrari in the subject line for the Ferrari owner, Maserati for the guy who loves Maseratis. Gotcha. That’s what you’re going for.

Dan: And the folks that are general, Andrew, the folks that have not given you that info, maybe they didn’t go through the survey or they didn’t come in that front-end form, go ahead. Let’s send them the general one.

Andrew: Gotcha.

Dan: But we more or less know for a fact, even if they’re buyers, they’re not going to have the same response rate as the folks who we’re hyper- tailoring. So we are going to do that whenever we can, but if you have another swap of your list and you don’t know that about them, give them the generic.

Andrew: I really like seeing the actual example and we’ll show it to people because, you’re right, I can see that this is so similar. Saying here’s the same intro paragraph, same intro paragraph. Paragraph number two is the same. Number two is the same. I’ve got it at different text size.

Dan: That third paragraph, there’s only one word difference, back mount and side mount.

Andrew: Oh, yeah. Here, back mount is here. Side mount is here. I see. So you’re basically just keeping the same message, but showing them that you understand what their main focus is, what their main passion is.

Dan: Yes. The core sort of involves all those different things. And then again, I would give a separate little bonus to the folks with those different little interests. But that little bit is tailoring and customizing to what they actually care about. And it boosts sales. I mean a little bit on sales matters, especially when it’s an email sequence that goes out to everybody.

Andrew: All right. So we collected data. We started to use it. Now people are starting to buy for, let me see, actually, no wait, before we even when get to buy, it’s not just the email. It’s also the sales page for each customer that you create is different.

Dan: Ideally, yes.

Andrew: Here, let’s take a look at this image.

Dan: Yes. And I want to set something clear for the folks out there who are aiming to apply this idea, Andrew.

Andrew: Yeah.

Dan: I think this is a very powerful notion, especially when you have a main funnel that gets a lot of traffic, or when you have a bigger launch that’s going to get a lot of traffic as well. Or if you have a main channel for your business that gets hundreds of folks a month consistently and it’s going to be that way for months and months and months . . .

Andrew: Mm-hmm.

Dan: . . . this is more than worth doing if there’s any ability to parse in the front end at all. And oftentimes, there is. So just to explain, you had the picture up there, you had those sequences leading up the sales page relevant to that person. I’ll give you an example of something I’m doing. If I’m selling a marketing automation. At CLB Boost we have a DVD set that involves marketing automation database, marketing principles. Right?

Andrew: Mm-hmm.

Dan: So if someone says that they have an internet marketing business, as you can see CLB Boost actually does have a drop, down on the front end. So I definitely eat my own dog food here. So they tell me, oh, I have an internet marketing business but it’s just an idea phase. It’s not really a business. And then they opt in. Ideally, they are going to land on the DVD sales page.

They’ll say, hey, you know, they will have a bunch of bullet points and maybe an adjusted title. They’ll speak a little bit more specifically to the internet marketer crowd. Doesn’t have to be a totally different sales pitch. Doesn’t even have to be a different product. I’m certainly not going to tell them this is different than what I’m giving these guys. Because it is the same product.

But I am going to tell them, this is why it matters to you. I know who you are, and this is my product. But this is why it’s a fit for you. And the title might say, internet marketers, blank, blank, bla-, blank, blank, blank. Or, you know, the seven key blanks that internet marketers should blank. And the bullet points will all line up to exactly what they’re interested in. If they’re in a startup and they’re looking to scale, which is often the case to CLB Boost, we tailor to that kind of thing, then the sales page, ideally here, we’d have a different headline that would call out to start-ups eager to grow.

And then we’d have bullet points that tie into things that are going to appeal to them, you know, marketing that’s more scalable. You know they like words like scalable. Right? Everybody in the start-up world.

Andrew: Yes.

Dan: Got it. There’s an appeal to that. Right? Growth hacker is a word that they’re going to like more than the internet marketer, so we’ll talk about it. We’re not going to tell them I’m giving them something different than the internet marketers.

Andrew: Interesting. Yes. Right. Internet marketer and start-up entrepreneur are both looking for more users, more customers, but the way that they talk about it is different. One would use a term like growth hacker and the other would actually say internet marketer.

Dan: And literally, just by changing the headline on the sales page that category one gets versus category two, if I can get them to stick on that page for long enough to read the headline, Andrew, as you know, copyrighting, I mean, that’s a good enough step for me.

Andrew: What about then once someone actually gets the product? So I understand if I’m a start-up guy and you appeal to me by using the word growth hacker which is kind of trendy today.

Dan: It is trendy.

Andrew: I’ll buy it. But then if I come in and I see online marketing in the actual product that you’re selling, I might feel like, ooh, did I just get suckered into an online marketing scam and I didn’t even know it?

Dan: Yeah. So here’s how that’s dealt with. Number one, if you’re telling them that it’s something it isn’t, obviously there’s an issue. So my escapes course – luckily,right? – involves a swath of techniques from every single one of the positions listed there and many, many more. So when I say, “Hey, there’s a number of fantastic drills and escapes related to the mount,” they’re going to dig into that product, and they’re going to know there are a bunch of other things. But they’re going to say, “Damn, he’s right.

There’s a freaking ton of mount escapes here; there’s a ton of back mount escapes in here; there’s a ton of side control escapes here.” So, if I said, “Hey, this in only about side control, and man, this is a full two hours dedicated to that, that would be… I use the friendly term scoundrel. That’s sort of a scoundrel-esque technique there, which isn’t all that conducive. So, do it in a way that’s going to speak to what the product actually is.

For me, for a CLVBoost, when people are looking through the slides and going through those videos, I’m not talking just about Ryan Deiss, Frank Kern, and I’m not talking just about Drop Box and Facebook. I’m speaking to principles and tenets of marketing. Whether you want a user on an app, whether you want to sell e-commerce, whether you’re looking to book appointments and sell big ticket items, it’s going to be the same tenets and principles. It’s not only language to one person.

So the product is relatively agnostic, but the marketing on the front end, I want to speak the language of who the heck I’m talking to.

Andrew: Okay. So, now we’ve gotten information about them. We’ve gotten even more through the follow up survey. We’ve sent them an email that’s customized based on what they’ve told us when they registered. And, we’ve created a sales page that spoke directly to them and, again, based on what they’ve told us before. It’s time to sell. Why don’t we start with non- buyers before we go into buyers. You say for non-buyers, people who don’t buy, sell them down. What does it mean?

Dan: What I refer to here is that, if you have an initial, what I call a “yellow brick road,” and that’s an initial email sequence, an automated marketing sequence that presents a particular product, you should not go home with your tail between your legs. You should continue to educate them, continue to present them with testimonials and other things that are going to be entertaining. But then at the same time, you should take another swing, and that could be from a slightly different angle.

Andrew: So this is after making an offer to people; some of them will buy, others will not. The people who will not is what we are trying to address right now?

Dan: Yes. The people who don’t, that’s fine. Let’s educate them some more and present a different offer. Maybe it’s a lower price point, maybe it’s a totally different offer all together at a similar price point. I generally will drop down a little bit, and I’ll also change the positioning of the product. So, I won’t say, “This is the same product just less of it and smaller. Are you willing to spend less money?” It’s not like that.

The way that I prefer to present it – and ultimately testing is what tells you – but my default is, “Hey you came in for the four basic leg locks major course, and you didn’t take it.” The drop sell, or the next twelve emails, after I give you six emails where I’m mentioning this one course. The next twelve are going to educate you, talk about other things.

And then I’ll bring up a smaller specialized cool course. It’s one DVD, but it’s entirely about a particular knee-bar technique that I really like and I have some great highlight videos around it. It’s a cool, unique little shard, a cool different proposition. It’s not just lesser value proposition. It’s different, but it’s lesser in price. That will often scoop up the card and you have a customer on the list, not just a prospect.

Andrew: Gotcha.

Dan: And, of course, then you have the opportunity to up-sell.

Andrew: Okay. And we’re going to get to that in a moment. That explains why, even though you don’t deal in cheap-o products Well, I just got that way too big. There it is – why you have something like this on your site. This $1 opportunity. Why is there a $1 offer? That’s a button on your site that leads to this, which I’ll show as you explain it.

Dan: We don’t have $1 offers because they make me wealthy. We have $1 offers because, when someone gets in with us enough to become a customer, their response rates to further email offers are going to go up. Their going to be able to build a little bit of trust and decide if they like my stuff or not. Right? If the lowest barrier to entry for me is $97. Your average guy who’s a martial artist, he’s at least got to think before he slaps 97 bucks in the cart.

But if it’s, alright, I got a buck, and he’s giving me 30-day trial of this program, or he’s giving me a couple of these front end DVDs in downloadable format, or I’ve even done crazy things like mailed out a couple DVDs for just a $1. Just to get people to get the things. Then if they enjoy that content, that’s someone who’s more likely to be a customer again.

So I like to drop the barrier of entry. It might not be the best strategy, front-end, for every business. But I happen to think, even if you start high, I prefer to have some semblance of a drop down later on to scoop that person up and build back up that trust, and then sell them back up again.

Andrew: Alright. And then, the people who do end up buying, then you say you want to sell up. And you do that. I’ve actually brought up the page a moment ago. Here, I think, is how you do that. What is this, this page where you’re offering something for $597.

Dan. Yes. This is an external hard drive that contains essentially all of my martial arts programs, and it’s all bundled into one branded little external hard drive to get some mailed out to the people. We have people, geez, from South Korea to Canada order these bad boys up, and I found that I haven’t had 600 of them sold, but of the nominal number I’ll normally call these people right up and say, “Hey, thank you very much. I appreciate you getting in on this course and program.”

We found a lot of them are interested teaching and interested in having a breadth of their curriculum. So we decided to add a tailored version of it that would speak to teachers. So it says, “Teachers, blankedly blank…

Andrew: For instance, “Teachers get my full curriculum and access to my best instructionals to help your students grow. Launch special offer only, the black box.”

Dan: Yep. So this is actually going to appear after a current product launch for a skilled development course that we’re launching. So we’re going to have three different variations of this. I’m going to have another one for competitors. I’m going to have another one for folks that are just interested in moving up in the belt ranks or skill level, so general improvement.

Andrew: Okay. Alright. So now we’ve gotten some orders, and we move them up. If we didn’t buy, we scooped them up by selling down. Up next, we still have this list, and the next suggestion is or the next step is to recycle the list. And you do that with… Let me see if I can bring up his page to give an example of who you do this with.

This is a page of-I’m sorry, I forgot his name.

Dan: It’s Steven Whittier [SP[. Yep.

Andrew: Steven Whittier. Okay. So how does Steven Whittier help you recycle your list?

Dan: Yes. Well, there’s a couple of different ways. By recycling the list, I essentially mean just maintaining contact with them. So a lot of folks, after people go through your marketing automation sequence, they’ll just end up on the list, which is , “Here’s the x number of thousand people that get a monthly broadcast from me when I do what I call a monthly broadcast.

Instead of doing that, I like to take the information I know about these people, let’s say, their age, let’s say, their preferred method of learning or skill level, whatever it might be. In this case, it’s age. I really don’t have any products per se tailored to the older gentlemen, even though I have many of them on my email list. So what I’ll do is I’ll write some blogs and send out a couple emails to an offer like Steven Whittier’s offer where I know he appeals specifically to 40 plus folks because he is 40 plus, I’m not.

So they will be more likely to snap up that offer. It’ll be more relevant to what their situation is, more relevant than I could do. And then in exchange for that, Steven will send some of his folks over to one of my offers. So I have plenty of areas of technique that maybe he doesn’t cover.

So instead of seeing ourselves as competitors in that kind of negative sense, we’re kind of collaborating to kind of hopefully provide a better experience and also profit more both ourselves by essentially exposing our list to each other’s content and offers.

Andrew: I see. His site is called 40+BJJSuccess.

Dan: Yeah.

Andrew: What’s BJJ?

Dan: Brazilian JuJitsu.

Andrew: Brazilian JuJitsu. So you guys focus, not just on martial arts but on Brazilian JuJitsu and he, not just on Brazilian JuJitsu but Brazilian JuJitsu for 40+. You know what’s interesting is that information marketers, like you, are so much better at this automation, so much better at dissecting than even software vendors. You’d think that software vendors would be huge at this, but…

Dan: It’s a shame. To be honest, in my opinion, it’s a borderline crying shame. For example, if you opt-in on HubSpot who I happen to respect a lot and I mention them often, no matter which size of company you select at, I think, industry as well you get precisely the same follow-up. And their selling automation software, it almost hurts my feelings. So I believe you are correct there.

I think in many regards there are some older school marketing tactics that for some reason haven’t… There’s a lot of great grill packing things, but there’s a lot of these older school tenets and principles that are really one and done, set in stone, kind of things that can really improve our life that are just not moving into or haven’t found their way into software.

Andrew: Frankly, I would have loved to have had a software entrepreneur talk about this kind of customization, this kind of segmentation. I don’t know of any who do it this way, and the fact that frankly we use the term, growth hacking, and I use it, too. I like the term. It’s cool.

Dan: Nice.

Andrew: But it sets us up, I think, for a monumental set of hacking, coding up, and then we end up doing extra work as opposed to just saying, “It’s all marketing and now let’s figure it out. What marketing works best? And if it’s segmentation using software that already exists, then let’s segment using software that already exists…

Dan: Yeah.

Andrew: …to promote the software that we’re creating.

Dan: Yeah, it’s not necessarily just building new things or…

Andrew: Right.

Dan: …I mean finding a way to leak Craigslist people out to build your platform…

Andrew: Right.

Dan: …[??]…

Andrew: Because Air Airbnb did it then we all have to now find a way to do it, too.

Dan: Yeah.

Andrew: Right. And, hopefully, now there’ll be a software entrepreneur out there in the audience who uses this. I’ve got one more point, but hopefully there’ll be a software entrepreneur who uses this and comes back and says here’s how I did it. It’s all basic stuff. I didn’t add more to my software. I didn’t add this marketing component to do it. The software already exists to do it. Instead, I focused on using the software that exists to market in building my product to do something that never existed before.

All right, on to the last point which is to stick to it. Stick to the regimen. Let me bring up this… Oh, I’ve got actually… Oh, you’re so good at just giving out stuff. Why don’t I start with…

Dan: Hey, let me know, man. I mean, you know, yeah, I don’t want to get too weird with you. But, yeah, whatever you want to…

Andrew: Get weird with me, buddy…

Dan: …know, like I said…

Andrew: …Get weird, Dan.

Dan: …I’m happy to share whatever’s going to be helpful.

Andrew: I mean by that you also even gave me this text doc that I’ll show in a moment. But, why don’t we start with this overview, this image.

Dan: For sure.

Andrew: What is this?

Dan: Yeah. This is a representation of an email list, a list of prospects, it could include customers as well, where you see various groupings here represented by these shapes.

My preference, as I mentioned before, is that normally when we talk about a regimen… And, of course, we’ll get deeper into regimens with the standard operating procedures which I think, obviously, any business would require and need.

Part of my whole gig is developing those depending on the business, because it’s going to differ business to business. If you run a software company you’ll have a different regimen of weekly, monthly communication than you will if you are in a niche like pets or something like that.

We do a little bit of both. But, let’s just use this as a very simple sort of bland example. It’s going to just point out the point.

The idea is that you have a big old bucket of folks. Everybody’s got a different length of time involved with you, a different set of interests, different factors that differentiate them, different ways to build a group and clump them. Most people will say hey, it’s April 1, let’s send out that broadcast message we send out to everybody and their mom to just, you know, send them out our monthly thing because that’s what we’re supposed to do.

Instead of doing that, my preference is even if it is as bland as a… By the way, I prefer to go a little bit more L.L. Bean and to think about systematically coming up with unique offers, education, and testimonials for different list segments. But, let’s say we’re getting so boring as to just doing a monthly email.

If that’s the case, instead of sending one out I will find the three or four major categories that all of my folks fall into. If all I have is very limited info maybe I’ll send them the bland one. But, the green people… Let’s say we’re in software. The green folks are in a range of zero to ten employees. They’re going to buy your software for their very small business.

The folks in red are 10 to, let’s say, 50 or 10 to 75 employees. Then, the folks in blue are over 75 employees. These might be people with a couple hundred employees even for a larger company.

Instead of sending out the same broadcast to everybody, let’s send out the same broadcast but tweaked per what they actually care about. So, let’s say the smaller folks if you’re giving them a monthly update, why is there a case study in the example of how some gargantuan company used your software? Why aren’t you talking about how other smaller software folks are very succinctly using what you’re providing them with?

With the mid-size people, why aren’t we doing case studies and learning examples and news updates that are really going to be most applicable to where they’re using your software?

For folks that are in bigger companies, why aren’t we communicating to them about… have articles that relate to how to leverage this software even despite the hierarchy and bureaucracy of your business? Why aren’t we relating to the problems they have, the benefits they seek that are unique to them?

Why are we pushing a button and sending the same email to everybody? If you have 600 people, well, you know, maybe you just don’t want to write that many emails. Depending on your price point maybe it’s not worth it for you. But, if you have 2,000, even 1,000, never mind 10,000; 20,000; 30,000 people, taking the extra seven minutes per breaking that message up into a couple of tailored ones is going to jack your open rates. It’s going to jack your click through rates. If you have additional offers in there it’s going to bump your profits pretty big time.

Andrew: I could see how that would make sense. This is essentially what you’ve told us to do throughout this session. You’re just saying…

Dan: Yeah.

Andrew: …keep sticking with it even with those weekly,…

Dan: Yeah.

Andrew: …monthly mailings.

Dan: Exactly. Figure out your regimen. We’ll get into the standard operating procedure in a second…

Andrew: Yeah, let’s show that.

Dan: Yeah.

Andrew: What is the standard operating persistence…procedures.

Dan: Procedures, yeah. Standard operating procedure for us is what we do within given periods of time to keep the business running and afloat. So if we scroll down a bit, this is just lead sources.

Andrew: Mm-hmm.

Dan: It’s sort of boring stuff.

Andrew: I see daily here, the way emails are handled, Facebook posts.

Dan: Twice a week is YouTube things and then down in weekly we have marketing. So we have two branded whole email lists on Monday and Thursday. Every now and again I’ll switch this up a little bit because I like to tinker with various open rates on various days. Or sometimes I’m doing so much sub-segmenting I don’t want to do another full list blast.

In general, I’ll do two sort of more overall branded emails that are going to applicable for more or less a good swath of my list. So it might not go out to everybody, but it will go out to more or less everybody. And it will cover a variety of different things. Something fun on Facebook, maybe a cool article that I checked out or just something else to learn that I just kind of get out there.

Then I’ll pick, at least, two various sub-segments, and I’ll present them with sub-segmented offers which are either going to be one or two emails along. Then I’ll pick one or two sub-segment affiliate offers. So I have a bunch of affiliates who I want to keep great relationships with, so I consistently on a weekly basis will promote my affiliates.

This week I’m promoting two or three people. There you see it’s one or two. Sometimes if I have a little bit more to do, I have a launch coming up, I try and make sure I’m really helping out everybody else.

Andrew: By affiliates, you mean this is someone who’s sending you business. You make a point of once a week helping out them.

Dan: I pick one of my random folks. Exactly. I should have made that a little bit more clear.

Andrew: I see.

Dan: These are people that pass me business. So I just make the point on a weekly basis. I’ve got to start sniping out segments of my list who might be interested in this affiliate, this affiliate, this affiliate, products I don’t have that might be useful to this group. Then they’re going to get a micro targeted either a one or two email bump specific to the in their situation and this affiliate offer.

Andrew: I see. And then does the affiliate pay for that, or do you get a commission when you introduce them to this.

Dan: Yeah. So I just get a commission when the money comes in and then in exchange I have a lot of arrangements where they in turn will send emails or put up Facebook posts for me and drive in additional opt-in business for me. So that really helps us keep the tornado going.

Andrew: Okay. Alright. How about one more? I think I’m getting a sense of how this works. What about the section right here?

Dan: Okay. A monthly marketing. So you have a four email chain for continuity push to front end. So in our business we have a lot of membership programs.

Andrew: Mm-hmm.

Dan: And just as I had mentioned before, we like to vary the membership programs per the interest of the person, and we especially like to vary the front end giveaways or bonuses that we’ll give to folks to check out the membership areas and say, “Hey, this costs x amount of money. You can buy it if you want.”

Say, “Hey, I believe in this so much that I’m more than willing to send out these cool things and give you a free login for a span of time to dig into this material and also get your hands on these cool new courses.”

So we’ll present a new unique course that will be exciting for the list, exciting for the folks that are tuned it, and at the same time it’ll drive towards one of our core membership programs. And we’re going to promote that to our entire list, just to keep those membership programs at a nice, healthy level and keep that run rate where it needs to be.

So that’s one of the big monthly pushes that we’ll do with every month with basically no exceptions.

Andrew: I see. And so you created the standard operating procedures as a way of making sure that you stay consistent and keep promoting and keep doing the things that work.

Dan: Exactly. And I’ll say this much, too, this is a fluid dock. It’s not something that has to stay the same forever, but again if you go to L. L. Bean, I haven’t been back there but they don’t randomly on one random Thursday say, “Hey, guys, you want to do catalogs today? Yeah. Yeah. Let’s do catalogs. Alright. Should we cut the trees down?” That’s not how it happens. Like get the saws out, boys. Like, that’s not what goes down, right?

They have their seasonal consistencies. They have their sub-segments that are getting marketed to more tailored. And they’re collecting and pulling that information, and they’re validating, “Okay, is this a good frequency of this sub-set? Are these kind of good offers for this sub-set. Okay. Great.

Well, how about the next quarter let’s keep working these folks because it’s going to be the winter and I know we’re going to get a lot of sales on this. So let’s test it with them.” And then, boom, they have their own set of a template which is modular. They’re able to adjust it, but they hang with it.

L. L. Bean has no winters where freaking catalogs don’t go out, you know what I mean?

Andrew: Versus how many people do you know online who collect their email addresses but they go months not sending it, and then you get that email that I hate which is, “Sorry I haven’t emailed you in a while, and I’m going to send it out now.”

Dan: And Frank Kern told me to do this to you. Yeah. Yeah.

Andrew: I don’t need an apology from him, is that right?

Dan: If you stick to the ledger I know what works for your list. It’s kind of embarrassing to have to pop out that email. It’s better than nothing, but at the end of the day find a consistency that your list happens to like, not your list as a whole but your overall list. Sure. But then the sub-sets of your list. Maybe there’s buyers. Maybe there’s more frequent openers who want more communication, who want higher priced offers, who want potential affiliate offers.

Find a regimen that’s nice and consistent and keep that communication pump going, because that’s a whole another revenue pump that most people are just leaving in the corner. No money, no [??]. For science of skill, I’d say 70, 80 percent of our revenue in any given month is from consistently re-marketing to people who have been with us for maybe a month and a half, two months, and are no longer getting any automated emails. But they’re still getting all these emails targeted to their interests.

Now, I email a little bit more often than other folks, but it’s at a cruising level where my opt outs aren’t terrible, my charge backs aren’t terrible. It’s a hobby level that people are into, and I keep that regimen and modulate that regimen. And that is responsible for more than half of the money we make every month. Most folks think it’s all about that new traffic. Sure, I focus on that all day, but I tailor and customize messages to my existing customers and prospects.

And any software company, any start-up business that’s even focusing on an app and has people of different levels of registration should and could do something precisely the same. Find that regimen and stick to it.

Andrew: All right. I started off this interview talking about the science of skill where you use this, where you really got good at it. But I think maybe what I should suggest that anyone who’s listening to this and wants to follow up with you do is they should just go to clvboost.com. On this site, they can actually see you not just teaching, what we’ve talked about here, but using it. And you go much in depth about this. Right?

Dan: Big time. Yeah. So, on this page we have, some folks will just want to contact me directly at the button down at the bottom. People who already kind of have an idea of the build outs, or the advice they’re really going to need. And then other folks will just want to get in on the white paper and learn it in a little bit more depth. So again, this is what we do. For some people who already have marketing automation software . . .

Andrew: As you do?

Dan: . . . it’s really making sure. Yeah. So there you go. Yep. It’s making sure that they have the software set up right to get a good ROI, and the good news is we can put that stuff on autopilot and then your business is making more money from then on out. And they can learn to do that themselves with the white paper, or they can contact me right there on the site.

Andrew: Even this contact form? I’m going to say this. This contact form is an Infusionsoft form, and even here you are asking them to segment themselves.

Dan: Of course.

Andrew: Are you in a start-up? Do you have an internet lifestyle business? A start-up idea with no business yet? Oh, this is great!

Dan: All day long. Now, every single time there’s an opportunity to tag them because they’re going to get different broadcasts, Andrew, two, three, four months from now. And you know what? If that person doesn’t get in on any kind of strategy call for, let’s say, four months, but they learn fantastic things about other internet businesses or other start-ups I’ve worked with who have had great success. How much more likely are they to be interested in, you know what? Maybe I’ll get in touch with this guy.

Andrew: This is so cool to see. Anyone who wants a followup should go check out . . . I’m looking at my monitor here where I’ve got . . . Here, let me just show it, clvboost.com. Dan, thank you so much for doing this. I know you’ve got another meeting to run to, so I’ll let you go. But thank you so much for doing this. Everyone else, thank you for being a part of it. Thank you, Dan.

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Master Class:
How to grow your company
(By using a remote team)
Taught by Jason Fried of Basecamp

Master Class: Remote Teams

 

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Transcript

Andrew: This session is about how to grow your company with a remote team. It’s led by Jason Fried. He is the founder of Basecamp, whose project management software helped over 285,000 companies in 2013 alone. Our conversation today is based on his book, Remote: Office Not Required. Here’s some of the screen shots and the illustrations from the book. I’ll be here to help facilitate.My name is Andrew Warner. I’m the founder of Mixergy, where proven founders like Jason teach. Jason, I’d like to illustrate the problem with the real world example, and you just told me what happened when you put up a help wanted ad on your job board. What were you seeing?Jason: So, we are currently looking for another product designer, interface designer. And we’re getting really interesting results this time. We’ve gotten about 130 applications so far in about a week. So, it’s a lot. But what we’re seeing is a fair number of people are applying for the job because we allow remote working.And so they’re actually saying in their applications, and their emails, and their cover letters, that one of the reasons they’re looking for a new job is because they’re current employer does not allow them to work remotely. And they actually like their job a lot. They like their current job. They feel good about it. But it’s not satisfying completely for them, because they don’t want to have to go to the office every day. They don’t want to fight the commute and the traffic every day.

So they’re actively looking for a new job, even though they love their job, and they’re looking for a new job because they want to love the new job, and they want to be able to work remotely. And so, we’re seeing a lot of really interesting applications. People that normally wouldn’t be looking for work but are, because they’re being forced not to be able to work at home.

Andrew: I see. And I can see in that, the duality, the danger, and the opportunity. The danger is the people who you want are going to be looking elsewhere, even if you give them a great job that they’re happy with, if you just don’t let them work remotely. And you’ve got a job board right here, where you allow people to look for remote work. And that’s the opportunity. If we allow our people to do that, then they’re going to be much more likely to work with us.

By the way, I saw this just moments before we talked. Here is a post by Tim Bray, who is leaving Google. He says he loves Google. The reason that he’s leaving is because they will not allow him to work from Vancouver. Everything else he loves about it, but they’re missing out on great talent. Even Google has this problem, because they don’t allow remote work.

Jason: That’s amazing. I hadn’t seen that. Was that just posted today, or recently?

Andrew: Just minutes ago. It hit the top of Hacker News, which is the reason why it caught my eye. It said, wait someone’s leaving Google? And that’s the top, and now I understand why. Alright. And so we’re going to allow people to capitalize on some of this. As I said before, I pulled out some ideas from the book that I wanted us to talk about. And the first one, this is an important one, you say allow overlapping schedules.

By the way, the images in the book are so good. I just want to show people. Right there. Allow overlapping schedules. Why should we allow overlapping schedules? If people are working remotely, especially if they’re all over the world, what’s the problem with just saying, show up anytime?

Jason: Well, I think you want a little bit of overlap, but most of the time you don’t want to overlap. The reason you want a little bit of overlap, is because you want those moments during the day when you can have rapid fire back and forth. Discussion, review, conversations. But if you have that all the time, what ends up happening is you end up disrupting each other, interrupting each other non-stop.

So it’s nice to have a couple hours, three hours maybe, where you can get feedback nearly immediately from somebody. But then the rest of the day, the next five hours, or whatever it might be, you can go off and do your work in a quiet environment where you’re not being bothered. If you don’t overlap at all, let’s say you’re working in Chicago, and someone’s from New Zealand, and there’s very little overlap. It ends up taking about 24 hours to ever get feedback on something, and that, ultimately, ends up being too slow.

So by just having a few hours during the day, when you’re overlapped, you get enough of the bandwidth for quick feedback, and then the rest of the day you actually have enough time to do the actual work.

Andrew: You know what? And that explains why so many people don’t like having out-sourced teams, or remote teams, because the idea of sending something at the end of your day and not getting to check back on it until the following morning is pretty frustrating, because then you have to wait till the end of the day again before you can send out for feedback. What kind of

Jason: By the way, I think that’s one of the issues people have always had with out-sourcing. When they think of out-sourcing, sometimes they’ll think of out-sourcing to India. And in the U. S. And one of the big problems with that is not necessarily just quality. In some cases the quality is fine. In some cases it’s not. But the problem is that the feedback cycle is basically twice as long, which is difficult and frustrating if you see something that you changed or you need to kind of stop someone before they go down the wrong direction.

It feels like forever to get a response back and to be able to correct course and stuff, and I think that’s one of the tough things. So outsourcing is a concept that’s strong, but I think at a certain point if it’s too far away and there’s not enough overlap you run into really weird situations.

Andrew: Okay, and so at Basecamp you look for four-hour overlap, and that way there’s enough time for people to interact but basically a little more than half the day is no interaction, quiet time.

Jason: Roughly, if it’s three it’s fine, but we’ve gotten some applications from people in New Zealand that were quite good, but I think it’s tough, it’s just a little too far away and the time zones don’t overlap. If we had, for example, a designer in the U.K. and then someone in New Zealand we could make it work, because there’s some more overlap with someone else. But we don’t have anyone that’s really within the 12-time zone and so it’s difficult.

Andrew: So it’s not that the whole team needs to have a four-hour block that everyone is working together. You’re saying within the people who work together there should be a four hour block overlap?

Jason: Yes, for example, our support crew, we just hired someone in Australia and we have some people in Germany and like there’s enough overlap throughout the whole team to have continuity. So there’s always someone else around when someone else is around. But if there’s no one else around when someone’s around it becomes really challenging.

Andrew: Okay, on to the next big point here, direct from the book, Remote. Share your work with your team. This is a program that I’m using right now, frankly, to record a backup of our conversation. How do you use this and how is this an example of how to share your work with a remote team?

Jason: Yes, we use ScreenFlow a lot. ScreenFlow is great. There are a lot of tools like it. Often times when we’re presenting progress on something rather than just describe it or share static screen shots, we’ll just flip on ScreenFlow, record the screen, put our head in the bottom right corner and just talk through what we’re doing.

So when we show the work the words match up with what’s on the screen so it’s just easier to follow, especially for someone who’s not involved directly in the project. If you’re just trying to describe the project it can be complicated; but if you’re showing it it’s great.

We just upload a movie to Basecamp screencast to Basecamp, and then the whole company can watch it and get up to date on what’s been going on; it’s fantastic.

Andrew: What kind of things are you taking ScreenFlow videos of?

Jason: Like for example, right now we’re working on an iPad app for Basecamp, and we just completed one of the most complicated parts of it, which is the to-do functionality. And the team that’s been working on that has been sharing some screen shots of it along the way, but when it was all wrapped up they recorded a video of themselves using it. And you just connect the dots better when you can just watch the thing being used rather than trying to imagine how the screen interacts with the screen.

So that’s a great example when there’s a flow, when there’s a process, when there’s a desired outcome and there’s progress being made on something. Seeing it visually, seeing it move is just a much better way to communicate it. But if you’re just showing a few static things that aren’t linked together and aren’t pieced together in any coherent way, it’s not necessarily better to do it in video, and it might be more distracting in fact. But if you want to show progression through something video is great for that.

Andrew: I see, otherwise something like Sketch would be helpful, you take screen shot arrows. What are some other tools? We have ScreenFlow. Snag It, I think, is a program that a lot of people like for taking screen shots or videos. What else is there they can use?

Jason: A lot of us use the built in Mac OSX image capture. I’ve lost my memory here. It’s shift-command-4, or whatever it is.

Andrew: Yes, shift-command-control-four I think to save it.

Jason: That saves it to the clipboard actually, and then I think just command-shift-four will save it to your desktop and then you can get a selection marquee. It’s funny, like I’ve been doing this for years, and I have a hard time explaining it because it’s just muscle memory. But that alone is great. And then we’ll either throw in the campfire or throw it in to BaseCamp or [IMed] or whatever it is. It doesn’t matter what tools you use, just like that’s a great way to do it.

We use Skitch sometimes; the support crew uses Skitch a lot to point things out to customers when they have a question about how something might work, so they’ll take a screen shot of that, throw some arrows on it, highlight some stuff, throw some text on it and shoot it over to a customer. That’s handy.

There is also a tool called [intellect lice MCE] or something like that. That’s not quite right. It saves a screen cast as an animated GIF, which then we can upload somewhere to put it on a web page really quickly if you want to show some really quick short animations or quick interactions, which is handy. Something else called like…

Andrew: Is it QuickCast?

Jason: No. I’ll tell you right now. It’s called… There’s also one called GIF Brewery.

Andrew: Okay.

Jason: And then the other one is called LICEcap, L-I-C-E-C-A-P.

Andrew: Got it.

Jason: That’s the other one. It’s kind of a weird open source thing.

Andrew: Ah, there, and we can see it right there at the top of the screen how…

Jason: Yeah.

Andrew: …they’re creating it. Got it.

Jason: Yeah. It’s cool because you basically just draw a square around something on your screen that you want to share. Then, you record it just like you’d record video, but it’s saved to an animated GIF instead. It’s just nice because you can quickly pop that on any web page and someone can view it without having to hit play and that kind of stuff.

Andrew: I never heard of that. Alright. The big idea here is to not just show with text when someone’s not there to look over your shoulder, reproduce that over the shoulder feeling with a screen capture app.

Jason: If you can.

Andrew: All right. Let’s go onto the next big idea here. The next thing you say is to keep all important documents accessible. You guys use this program which you happen to also make. There it is. How do you keep it all organized? How do you know what to keep, and how do you keep it all organized?

Jason: For us there’s a lot of stuff that goes into making a project. We will often put the keepers in Basecamp, the stuff like the final work. Or, if we’re asking for review or we’re asking for feedback on work we’ll put that out there, but we’ll tag it as like request feedback, or requires feedback, or not final, or something like that.

Out of the potentially it could be a thousand documents of some sort, either files or images or whatever it might be that go into a project, we’ll typically just put the final ones there. Or, we’ll label them as for review or something like that.

Because I think if you have too many things going on in one place it’s hard to follow what’s important and what isn’t. Things get kind of pushed away and that sort of thing. You can star things. You can label things. But, still, it’s just I think better to keep it as tight as possible with only the things that really matter for everybody or for like final deliverables, that kind of stuff.

The key, though, is however you work, because everyone works differently… Some companies want to document every last thing. We don’t do that, but you can.

What’s important, though, is that everybody knows where everything is. They know that there is a place to go to find the latest version of something, or there is a place to go to find the PDF of something. It doesn’t matter what tool you use. There’s thousands of them out there. Well, that’s maybe an overstatement. Hundreds of them out there. But, whatever it is, use that tool and make sure that everybody knows where everything is so nothing falls through the cracks. That’s kind of the big deal behind this.

Andrew: So, Jason, this is something that we’ve done here at Mixergy. One of the challenges is that someone will have a great PDF up there that’s helpful. Then, we’ll need to update it but we don’t want to delete it. We’re not even sure if we should. So, we add a second one. Or, maybe we make a mistake…

Jason: Yeah.

Andrew: …and we add a second one that’s different. Keeping track of what’s most up to date, is that someone’s job? Or, is it something that everyone needs to have a process for doing? We’ve been having trouble with that.

Jason: It’s a challenging thing. One of the things is it depends on the type of thing. If it’s a text document, Google Docs is actually quite good at that.

Basecamp also, for example, has a text document feature which saves all the past revisions of every single revision for a document. You can go back; you can compare differences, that sort of thing. If it’s a spreadsheet, Google Docs is great for that. There’s some PDF stuff that has track changes and annotations and stuff.

It’s complicated. I think we’re sort of in a weird phase of the world right now where a lot of documents are stored locally. Some are stored in the Cloud. Some are able to be modified live. Some are not. We’re in this weird thing where everything’s shaking out right now, so I think there’s a lot of confusion.

Basecamp Classic, the first version of Basecamp, had file versions. We pulled that out of the new version because even though it’s logical to someone like you who might understand what a file version is, a lot of people don’t understand file versions and what would constitute a version, like maybe a small change shouldn’t be a new version.

It’s very complicated for a lot of people, so we just felt like the way that most people do it is they’ll post a message. They’ll maybe attach a file to that message. If there’s any future versions of that file, they’ll just post new comments below with the latest version of the file. That way you have a full history of all the different changes and you can see what changed and people can make notations about what changed along the way.

Andrew: Okay.

Jason: That’s kind of how we do it and how others do it. But, I imagine more sophisticated solutions will come out. The key is… Like, there’s a lot of great stuff. You can use GIT for this too and stuff. But average people working with GIT, it’s not going to happen. So there needs to be something simpler. At the same time, I imagine in a few years, you’ll be able to edit all these documents live anyway.

So it’s kind of like how much work do you put in the meantime where there’s sort of just this temporary time when things are a little bit weird. And things will get better in a few years. I don’t know. It’s kind of a messy problem.

Andrew: We have one process, for example, for editing this conversation down. Someone else could say, I have a better way, but I don’t want to delete what Andrew created. I’ll just create a new document. And then we end up with two. We haven’t found anything that works, but what we ended up doing is there’s someone here in the organization, AnneMarie, who’s just really organized.

She’ll go in and delete and just say it’s okay to delete because everything is saved somewhere anyway, so go for it. But I guess what you’re saying is, Andrew, we are 80 to 90% of the way there, don’t sweat the last 10%. Just keep going and the software will catch up with what you need.

Jason: I think you pull in 20 companies and you ask them how they do things, they’re all going to tell you slightly different ways. And it’s fine. As long as whatever you’re doing works for you, that’s fine. The key is making sure that everybody on the team understands how you do things.

So if AnneMarie is in charge of just organizing stuff, because that’s her forte and she’s excellent at it, everybody just needs to understand that AnneMarie’s going to make these calls.

Andrew: Mm-hmm. I see.

Jason: Everyone has to just know. Everyone’s got different systems. It’s funny. We’ve been doing a lot of customer calls with base camp customers. And it’s amazing to see every single person we talk to uses base camp completely differently. And it’s just kind of fascinating. And it’s, like, sometimes I’ll see the way they’re using it. There’s a much better way to do that, but I don’t say that.

Because it doesn’t matter if there’s a better way. For them, it works. They’re comfortable with their method and their process. So as long as they understand how to use it that way, it’s great for them. Who am I to say that you’re using it wrong? You’re not using it wrong. You’re using it right for you.

I think that’s how software is in general. A lot of people will use Photoshop in dozens of different ways. You might be, like, that’s how you sharpen that mask. That’s not how I do it. But it doesn’t matter. It doesn’t matter because as long as it works for you, it’s fine. The trick is when you’re working for an organization and a group of people. They all have to be on the same page about how you do things. Otherwise you’re going to have total chaos.

Andrew: Okay.

Jason: So I think that’s key. It’s more of a communication and cultural thing, more so than it is good software is going to save the day.

Andrew: Speaking of AnneMarie, for this next point, I asked her to find a visual and she found one that she wanted me to bring up to you. Let me bring up, the next point is to create a virtual water cooler. Did you post this? I couldn’t believe it. I said, let’s check to make sure.

Jason: Hasn’t loaded yet.

Andrew: Hadn’t loaded yet. Huh?

Jason: Did we post that? It looks like we did. Those are our people.

Andrew: And it looks like you personally, Jason F. Right?

Jason: That would be me.

Andrew: Okay.

Jason: Okay.

Andrew: I’m such an anal person sometimes, that if you even just relax and kid around me, I think you’re wasting my time and you’re wasting your own time. Let’s get down to business. And I look to you as the organized person who does not allow stray pixels on your website. Everything’s clean. And still you do this. Why is this such an important part of running a remote team?

Jason: I think it’s an important part of running any team. Human beings are meant to screw around here and there. We’re not meant to be buttoned-up for eight hours a day. It’s very frustrating. So we use our campfire chat room for all sorts of stuff that is crazy. We have separate rooms for these things too.

We have a room called All Pets where people throw silly pet pictures and animal pictures in one room. We have a room for comic book lovers. And they talk about comic books. We have a room for film nerds who talk about film and stuff like that. So I think this kind of stuff brings people closer together.

People bond over these things more than they bond over work. And I think if you want to build a strong team and a loyal team and a team that understands each other, these moments of letting off steam and just kind of goofing around and getting to know each other on a deeper level than just simply like the work that needs to be done is not only valuable, it’s critical.

So if you were to look at our campfire rooms, you would find a lot of, let’s just call, culture. You’d find a lot of things that make sense to us that are inside jokes, that are goofy, that on the outside would look like just screwing around in a bad way.

But for us, it’s like this is all who we are and we have fun with it. And we can do stupid stuff together because we know each other, and it just forms deeper bonds between people. So I have no problem with that all. I would rather that happen than not happen.

Andrew: Then I want to start to structure it too much, but I think what I need to understand and take away from this is, create a relaxed atmosphere, a place for people to post this stuff, that’s not directly related to work.

Jason: Let people be themselves. And I think, if you try and squeeze this kind of behavior out of your company, you’re going to create a scary place.

Andrew: But you’re almost saying, Andrew, squeeze it in.

Jason: Yeah.

Andrew: Because it belongs in. Even if it doesn’t naturally happen, using the tools that you have, create a tool that would allow it to naturally happen, right?

Jason: Give people some permission. And this is you, leader of the company, give people some permission to screw around a little bit. If they’re afraid of doing that, that’s not going to be good. You don’t want repressed people working for you. [laughs] It’s going to affect the work itself. So, give people an excuse to goof around here and there, and I think everything will turn out better. Even the work itself.

Andrew: All right. That’s something I’m going to come back to in the final point. But, let’s continue here. Next big idea that I pulled out of the book, out of Remote, is, “Create weekly check-ins.” I was trying to find a good image. I just copied one out of the book. You guys always have great images in there.

Weekly check-ins. I used to do that at my last company. And then, we all would sit around. And the first session was great. We had stuff to talk about. We were excited that we were all talking together. Then the next week, it was a little bit less exciting, more work. And then, by the 10th week, we were done. We were just sitting and going through the motions.

What happens in these weekly check-ins to keep people engaged and to keep them useful?

Jason: Well, they’re not in person. So, I think, sometimes when you do them in person, you have to come up with things to keep people busy.

Andrew: Mm-hmm.

Jason: And then, you end up either doing busywork or like you said, there’s nothing really to talk about. So what we do is every week or roughly every week, it’s not always every week, but we have whoever’s leading a project, write what we just call our, “Heartbeat,” a lot of companies call it something else.

Andrew: Mm-hmm.

Jason: Check-ins, dailies, whatever, we call it a Heartbeat. And it’s basically a summary of what’s been happening since the last Heartbeat, and what we’re planning on working on next. And we post that to Basecamp. And it goes out to the whole company.

So every project that we’re working on, everybody in the company gets the Heartbeat. So they have a sense of what’s going on. But they can read it on their own terms, and we’re not pulling everyone into a room, and feeling like we’re forced to talk about something.

Andrew: So it’s asynchronous? It’s not . . .

Jason: Correct.

Andrew: . . . all even in the same Skype chat at the same time?

Jason: Nope.

Andrew: It’s . . .

Jason: A-sync. A-sync, although sometimes, groups in the company, like, the programmers or the designers or Ops or support, will use Google Hangouts or something, and they’ll all come together every couple of weeks and just mess around for an hour talking about stuff, like ideas or wherever it might be.

So that does happen, but that’s not on a regular, automated basis. It’s, like, “Hey, it’s been too long. Let’s do this.” But the Heartbeats are becoming more and more automated. And they’re just write-ups. Sometimes, they have video, if we’re talking, like, earlier. Sometimes, they’re a screen cast, sometimes it’s just text, sometimes there’s screenshots.

Andrew: So it’s an update on what they’ve been working on over the last week, related to the project that they’re discussing?

Jason: Yes. That’s it.

Andrew: And is there . . .

Jason: Sometimes . . .

Andrew: . . . a goal?

Jason: . . . I’ll do . . . I’m sorry?

Andrew: Do you also set goals one week and then come back the following week, to not just do an update, but to match it up against the goal you set the previous week?

Jason: That’s up to each Project Manager, Project Leader to decide how they want to run their projects. Some of the goals, the scales are different for some of the goals. One of the projects that’s been going on for a long time, is we’re opening a second data center. So we have full geographic redundancy. And that’s a long-term project. And it’s not about weekly goals, as much as it is monthly goals.

But then, there’s other projects that are definitely evaluated on a weekly basis. It just depends. We try not to have too many rules, other than, use your best judgment about what you need to convey to the rest of the company, so people understand what’s going on in the company, what projects are happening. Also, every Monday, we have a product called, “Know Your Company,” and every Monday, everybody in the company’s asked to simply write up what is it they’ve been working on.

Andrew: Mm-hmm.

Jason: And it’s just one text field. And they write that up, and that goes out to everybody in the company, as well. So Project Leaders will write up the Heartbeat of the overall project. And then, each individual person on Monday will write up what they have been working on. And that could be a bullet point, it can be one, it could be three bullets, it could be a whole paragraph. It could be a short story. It doesn’t matter.

Sometimes, mine are just three or four things. They can be really general. So, it could be strategy thinking and interviewing candidates for the design job. And some people are really specific about how they detail the work that they’re doing.

The point is, is that I think you just got to let people be who they are. And forcing too many layers of, “You must work this way,” on people, I think, it’s just not really . . . this is a weird way to think about it. But it’s more, like, federalism. The U. S. system, you have federal government, but then you have all these individual states. And the idea behind federalism, and the individual states is that each state gets to run slightly different experiments.

One state might deal with education this way, another state might deal with healthcare this way or another state might deal with insurance requirements this way. And the idea behind it was that when you have a lot of experiments going on, you’re going to learn more. And certain things are going to bubble up and become the way other people do things. And certain things aren’t going to work as well, and you can adopt someone else’s idea.

And so, I like the idea of running the company in that way, in federalism style, where, I haven’t really talked about this before, maybe I’ll write this up, but where people are free to experiment with how they want to tell their own stories, and how they want to share their own work.

And what’s cool about that is that different people will come up with different ways of sharing work. And someone will be inspired by the way someone else did something. If we prevented people from having unique ways of presenting their own work, then we’d all be doing the same thing all the time. And we wouldn’t have a chance to grow, and new ideas wouldn’t come up.

So I really like the idea of not having too much structure. The only structure is, like, “Hey, keep people updated on what’s going on. How you do that is up to you.” But the regularity is what we’re more interested in. And the reminder that it’s important to keep everyone updated is what’s important.

Andrew: Gotcha. This is it, right? The “Know Your Company” product?

Jason: Yes.

Andrew: And it’s still not public, right?

Jason: No . . .

Andrew: It’s . . .

Jason: . . . it is.

Andrew: Oh, it is?

Jason: Yeah. It’s actually something that we’ve spun off into a separate company now.

Andrew: Okay.

Jason: But it’s a very different story. It’d be fun to talk about this some other time, but so, Claire Lew now runs the product. Separate company, now.

Andrew: Saw that.

Jason: We own a piece of it. But the idea behind that site, was that it was actually a letter. We didn’t show any screen shots, it was all about, “Who are the companies that are really motivated to use this thing? And then, we’ll give them a personal tour.” And anyway, that’s a whole other thing.

Andrew: Okay.

Jason: Yeah.

Andrew: I love the post that you did about how you’re doing that. That you want to talk to them, you want to see them, you want to hear them.

Jason: Yeah.

Andrew: Alright. Onto the next one, which, almost shouldn’t be on here, but I’m embarrassed to say, well, first let me read it. It says, “Judge people based on what actually matters.” I’m almost embarrassed to say that when I work remotely, that naturally happens to me. Now that I have someone who’s working here in the office, I mentioned Ann Marie, I find myself judging myself, and thinking that she’s going to judge me based on how much time I’m here, based on what I show. It almost feels like, when you are working remotely, and there’s nothing else to judge you, based on no face time, etcetera. That’s more natural.

Jason: Yeah. Hey, I was going to say, “Loosen your tie,” but you don’t have one on. I mean . . .

Andrew: I put on a nice shirt and jacket for you.

Jason Fried: Well, I mean, it sounds like you’re kind of uptight about some of this stuff. And you don’t need to worry so much. And you don’t need to control so much. And, yeah. Just don’t worry about that so much. I think, what people want to see, I don’t think other people are thinking about how you spend every minute of your day, and exactly what you’re doing. What they want to see is what are you producing. What are you working on? What are you making? How are you pushing the company forward? How are you making progress together? That’s the kind of stuff.

And that stuff is not directly tied to, “I was here for an extra 25 minutes or an extra hour,” or “I got here at 9:00 a.m., and you got here at 9:30.” It’s not about that stuff. It’s about the actual work and the output and the thinking and the creativity that you bring to the company. And that stuff’s not measured in time, in my opinion. It’s measured in output and “What’d you produce?” And so, I think that’s what people want to see from one another. That’s what inspires them.

I mean, work ethic can inspire, as well. But just being somewhere is not work. Just showing up and being there for eight hours, doesn’t mean you’re working for eight hours. That sort of thing.

Andrew: I think the first time that we spoke, years ago, you threw this “remote work, work on your own time” idea out there in the world, and people all battled it. And my question to you, at the time, was “What if people start to procrastinate when they’re sitting at their desk?”

I remember the example, even, specifically, was, “So Jason, what if someone sits down to do the work that you hired them to do, and then they go out for tea? And then, they make another cup of tea, to avoid work. But they are thinking that they’re doing something important? And they have to go the bathroom, and then they have to come back.”

And since then, what I’ve realized is that hasn’t been an issue. People aren’t shirking work. What is more of an issue is what we’re going to talk about in a moment, which is overwork. And I’m wondering, is that just lucky for me that I ended up working with people who like to work a lot or is there something that you can do to encourage and foster this environment of caring so much that people are involved?

Jason: I think people blow stuff off when they don’t want to do it. And they’re looking for excuses when they don’t want to do it. And a lot of people are procrastinators naturally, I am, as well. But all the stuff you explained, like, “Well, I want to avoid work, I want to go make some more tea,” or “I want to go to the bath.” All these things, it’s just probably because they’re not enjoying the work itself. And the work itself isn’t motivating.

And look, not every day are you going to be doing something that’s just totally amazing and blowing you away. So there are going to be lows in creativity and the work that you do is not the highest level all the time. You’re not always working on the most interesting problems. But, on balance you want to make sure that the work that people are doing is interesting enough that they want to do it.

I believe people want to work. People want to make things. People want to contribute, and they want to create. I think it’s a human thing. If they’re given interesting things to do I think they’re going to prefer to do that than prefer to blow it off. But, if you’re not giving them interesting work to do and there’s nothing stimulating about it then they’re going to find something else that’s more stimulating, and that might mean just walking around the office, or making some tea, or whatever it might be.

It all, to me, comes down to the work itself. That’s what ultimately we have to motivate people. If the work doesn’t do it you’re going to have to come up with a bunch of artificial motivators, and those aren’t going to last. Those are going to dry out, too, and you have to come up with more and more fake artificial things. That’s not going to lead you anywhere.

Andrew: You know what? I have found that exact thing to be true. I’ve now worked with enough people that if there’s one thing that I can see that someone doesn’t love, and they’re procrastinating, I almost realize that if they’re not producing it fast it’s because they don’t love it, and they’re procrastinating, and they’re going through their own little hell…

Jason: Yeah.

Andrew: …that spiral of feeling guilty for not doing it, and then not doing it because you feel guilty, and then feeling more guilty. So, at that point I try to reach out and say you know what, if this isn’t your thing I can find someone else to do it and it’ll be perfectly fine. People when they hear that feel really a sense of relief.

Jason: I think if you do that people will respect you, too. Because they know that you’re paying attention and that you’re being a human being. You’re like hey, you know what, maybe this isn’t… It’s not that you’re bad. It’s just like this work, I get it, maybe it’s not for you. That’s totally [Inaudible 0:01:39]. We’ll find something else for you to do that’s more for you.

I think people appreciate that, too, that they know that you’re watching and that you care. Otherwise, it’d just be like hey, do this work. I don’t care if you like it or not. Like, I’m going to crack the whip. Who wants to work for someone like that?

Andrew: It’s a different mindset, though. It’s a mindset of understanding that there are good people that do want to do good work as opposed to feeling why doesn’t anyone work as hard as me, why doesn’t anyone care about my thing. Once you shift that mindset I think it becomes a lot easier to accept this person isn’t crazy about it, let’s see if we can find something else.

Jason: I think so, too.

Andrew: All right. Final point: beware of overwork. Last night I had some Mixergy interviewees over at my place for scotch to, like, whiskey tasting. We had five different whiskeys we tasted. It was great. I wish you were in the area to try it.

Jason: Where do you live? Where are you now, by the way?

Andrew: Yeah, when we first talked I think I was in LA, then Argentina, then DC. Today I’m in San Francisco and, hopefully, going to establish a family here and live here forever.

Jason: Got you. Cool.

Andrew: Yes. There are so many things to do here for work after hours. I stayed up late at my place with the scotch. Then, I got up this morning and ran into work and was here at 9:00 showing up for a conference call. I think I’m overworking myself.

Now, you give… Here’s something that you guys do. You’ve done this now for a while. This is from March 2008. Do you still run workplace experiments and specifically shorten up weeks some part of the year?

Jason: Yeah, we do. From May through October we just do four day workweeks. That doesn’t mean compressing the other four days into, like, ten hour days. It means actually a shorter workweek maybe. We don’t count hours, but let’s just call it 32 hours instead of 40, that sort of thing. We do that in the summer.

Andrew: Okay.

Jason: Yeah.

Andrew: What about, then, the rest of the time? Because the rest of the year we’re still all working normal hours. Even, frankly, as you said, it’s easy to start to compress more into the days that you’re working in the summer if you’re working fewer days. What do you do to help people not get sucked into the work?

Jason: What’s sometimes hard about remote working is that people end up doing more work because they’re so close to the environment where they do the work. So, people work from home, sometimes it’s hard to close at 5:00 or 6:00, because they basically just move rooms in their house. Compared to if you work in an office, you leave the office and it’s easier to leave work behind. It’s harder to leave work behind when it’s in the same place that you are doing the work and where you live.

Sometimes you have to just spot over work. It’s subtle, though. Because one thing you’ll notice is sometimes some people’s tone will change. Sometimes people are like we’re very, very friendly and accommodating and cool, and then all of a sudden they’ll get a little bit passive-aggressive.

This has happened to me in the past. I’ve always noticed that it’s [Inaudible 0:04:35] I’m busy. Like, I’m overworked when I’m acting this way and my tone changes. So, you can spot that either in a Basecamp message, or Campfire, or email, or whatever you use. You might spot someone who used to give really thoughtful, long answers is now all of the sudden getting really short, short answers – like yes, no, that kind of stuff.

Andrew: Yeah.

Jason: You’re like something’s up there. Let me just talk to them and see what’s up. Almost always it’s overworked, frustrated, I don’t have the patience to be patient anymore.” And then you’re, like, “Okay, man. You should take a couple days off. Just take a few days.” Or in some cases, we said, “Take a sabbatical. Go away for 30 days. Just get out of here for a while. Leave . . .

Andrew: And your company can still run, Jason, when you have someone take off for a couple of days or 30 days?

Jason: Yeah, for sure. Everybody who works here, I think, I’m trying to remember the exact rule. But I think it’s if you worked here for three years, might be four, three or four years, I think it’s three though, you get 30 day paid sabbatical. And so, we just work that into our schedules on our calendar, and we know someone’s going to be gone. And other people fill in. And then, that’s just the way it is. Now . . .

Andrew: What happens if your co-founder David needs to take a month or two off?

Jason: We’re the same way. That’s just the way it is. If we need a sabbatical, then we need it. Just like if someone else needs it, they need it. And we manage. It might be different for you, because you’re doing these interviews. And maybe you’re so attached to the interviews, that you couldn’t have someone else do those interviews.

And that would be difficult for you, to have someone else fill in or for you to take a month off. But I’ll tell you what, if you took a month off, your business would not go out of business. You just wouldn’t do interviews for a month. And you’d survive. Things would be okay. People would understand. Of course, you’re . . .

Andrew: People would be devastated and destroyed. They would be burning themselves in the street, are you kidding me?

Jason: [laughs] You’re right.

Andrew: [laughs]

Jason: So I think, in most cases, people will pick up. Good organizations are flexible. And I think they can fill in the gaps if there’s a crack in their organization or if someone takes off. They’ll fill in the gaps, and they’ll be fine until that person comes back. That’s, I think, just a healthy sign of an organization.

If one person leaves and the s*** hits the fan, your “hit by a bus,” factor is too high and that’s a sign that you’re spread too thin or there aren’t enough people doing the right things or you don’t have a framework in place to handle this sort of stuff. So, I think it’s just a sign that your organization needs to be more flexible if you can’t handle someone being gone for a couple days.

Andrew: All right. We’re getting better and better at that.

Jason: Mm-hmm.

Andrew: And I do plan to take a month off and record . . .

Jason: It’s hard.

Andrew: . . . programs ahead of time.

Jason: By the way, in last August, I took about ten days off, two weeks off, which is the first time I’ve taken two weeks off in maybe, ten years. So I take a lot of short weekend-style vacations, three or four day things. But it had been, I think, about ten years since I actually took a full, two week vacation. And you know what? For a long time before that, I’m, like, “The company can’t afford me to do that.” But that’s an egotistical way of thinking about things.

Yeah, you know the company can survive just fine without me here for a couple of weeks or even a month or more. I’m sure it could. It would have to. If I was building a good company, it should be able to survive without me here. And I took two weeks off, and everything was great. And in fact, I came back with renewed perspective and a renewed point of purpose. And I felt better about things, and we made this big change where we renamed the company and the whole thing.

That all stemmed from taking some time away. That gave me some new perspective. And that’s very valuable for me. Actually, taking a vacation made the company better in the long run. And, so I think that’s the other way you have to look at it sometimes.

Andrew: The change, of course, from 37signals, is the company name, to Basecamp, and the focus on this Basecamp Project Management Software that we talked about earlier . . .

Jason: Yeah.

Andrew: . . . for the company.

Jason: Yeah.

Andrew: By the way, I asked my researcher, can you find pictures of Jason on vacation? And we found Jason Fried on Instagram, all these great pictures, people with their shirts off partying.

Jason: [laughs]

Andrew: And I said, “That cannot be Jason.”

Jason: No.

Andrew: And I zoomed in, it was not you.

Jason: No.

Andrew: You’re not . . .

Jason: First of all, I don’t send any pictures of my personal life outside of, so that’s one thing. I don’t have an Instagram account. But, yeah. I’m not a big vacation guy.

Andrew: I figured.

Jason: There might be a few pictures of me on a tractor, because I have a farm. And I do that sometimes. But that might exist.

Andrew: What happened to my researcher? We should’ve found him on a tractor. Final question is this, these sections came out of our conversations with the Mixergy audience, and frankly, as you can see, we’re running an organization here, too. And we need a lot of this, ourselves, and so we picked what would work for us. Is there anything that I missed from this, that you wish we would’ve included or that you wish more people knew about from the book, “Remote,” and the concept behind it?

Jason: I think that two things I would say that are especially important about the idea of remote working, I’ll talk about one from the employer perspective, and one from the employee perspective. From the employer perspective, you get a chance to hire the best people in the world. You get exposed to more and more talented people because they’re not all around the corner. They’re not all in one physical location.

There are great people all over the place and when you permit yourself to hire anybody, anywhere, you’re just increasing the talent pool available to you. What business wouldn’t want to have access to more talented people? That’s one of the great things about allowing your company to hire remotely. From the employee point of view, you have the opportunity to work in more places for more companies. You can live anywhere you want.

We have some people who live in small rural areas who could never have a software job because there are no software jobs around where they live. They couldn’t actually live there, so they’d have to go live somewhere else. They don’t want to live somewhere else. They want to live on a farm.

Andrew: Hmm.

Jason: They want to live in a small town. They grew up in a small town. They want to live near their parents. Whatever it is, it doesn’t matter to me, but they get to live anywhere and they can still have a great job with a great company and that’s meaningful to me as a person who provides those jobs but it’s really meaningful to that employee who gets to not only live in a place where they want to live but work for a company they want to work for and have it all, which I think is just awesome.

It’s also great because, from both perspectives now, we’ve had an employee, Kristin. She runs our support group. She started off working here in Chicago. She’s awesome. She moved to Portland, Oregon. She didn’t lose her job and we didn’t lose her. That would’ve been a terrible outcome for her to say, ‘I want to move to Portland,’ which would mean that we would have to lose one of our best employees and she would have to quit a job that she really liked. But, instead, we said, ‘Go ahead. Move to Portland. That’s cool. We still get to work with you, you still get to work with us.

Everything’s worked out great. It’s just about respect and treating people fairly and understanding that people’s lives don’t revolve around their job. If you make people move for a job, that’s saying that their life revolves around the job, that the job is the most important part of their life and I don’t feel like that has to be the case. I think there are a lot of great things on just a pure human level and a respect level that companies can benefit from hiring remote workers and employees can benefit from working for companies who allow them to work from anywhere.

Andrew: Mrs. Hearn [SP]?

Jason: That’s her.

Andrew: That’s her.

Jason: Yep. That’s Kristin.

Andrew: Alright. I think there was a time where we limited our customer base to whoever happened to be close enough to our location and then we realized how ridiculous that was and, through the internet, we were able to reach out, not just outside of our location, but outside of our state and country and so on. I’d like the same thing to happen for workers, for co- workers, for employees, and so on. It’s not as easy. It takes some time.

I appreciate you talking here about how to do it and not making it sound like, “Oh, it’s a snap. Just go do it.” It’s a process. There are things that you’ve learned . . .

Jason: Yes.

Andrew: . . . and we get to learn from you.

Jason: Let me just say something about that, too, real quick. This is not easy for companies who are not used to it. We sort of grew up as a company this way and so we understand it really well, but it is not easy. It’s a big change. You’re probably going to hit some stumbling blocks. You’re going to be like, “This isn’t working.” It’s hard. You’ve got to practice this stuff, just like anything you want to get good at, you have to practice, so you have to keep trying it.

There’s some really good information in the book on how to do that. It’s all about small steps. Just take it one thing at a time and you’ll find out if it’s right for you, but you’ve got to give it a chance and you’ve got to give it a chance to go wrong a few times, too. It has to have the room for you to adjust and get used to it, but I believe it’s absolutely worth exploring and trying and I think your company and your employees will be better off for it.

Andrew: Alright. We just pulled out, as I said earlier, a few ideas from the book that we thought would be most relevant to the Mixergy audience and to you, the person who is listening to us right now. The book is Test Remote, the company now is called Base Camp. There it is, getting great reviews on Amazon and other places. Thank you so much, Jason, for doing this.

Jason: My pleasure. It’s always fun to talk with you.

Andrew: Thanks. Same here. Thank you all for being a part of it. Bye, everyone.

DOWNLOAD TRANSCRIPT

Master Class:
How to create habit-forming products
(So your customers will be addicted)
Taught by Nir Eyal of Hooked

Master Class: Habit-Forming Products


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Course Cheat Sheet

Message from Nir Eyal:

On March 25th at Stanford University, a gathering of experts, entrepreneurs, and industry insiders will share their hard-won insights on how to build habit-forming products.

We’ll hear from best-selling authors like Gretchen Rubin (The Happiness Project) and Gary Taubes (Why We Get Fat). Technology innovators like Josh Elman (formerly of Twitter and Facebook) and Jeff Atwood (co-founder of Stack Overflow) will also be speaking, and a number of VCs, investors, product leads and other phenomenal speakers are also on the roster.

As a member of the Mixergy community, you are eligible for a $50 discount by using code “Mixergy50” at registration. More information about the summit is available here: HabitSummit.com, and you can register at: https://habitsummit.eventbrite.com/?discount=Mixergy50

See you there!



Transcript

Andrew: This session is about how to form habit-forming products, how to create habit-forming products. And the session is led by that man over there, Nir Eyal. He’s the author of “Hooked”, the book on how to form habit- forming products. Nir Eyal is also the creator of Habit Summit, a gathering of people who share information about how to form personal habits and form technology habits. And if you go over to the website, habitsummit.com, you can see all these great speakers who will be at the event.My name is Andrew Warner. I’m the founder of Mixergy. I’ll help facilitate. And Nir, thanks for teaching us.Nir: Thank you so much for letting me be here, Andrew. It’s a pleasure.Andrew: You bet. Nir, the problem that you’re trying to solve is one that …. Let me bring up this gentleman right here. This is Bobby. Am I pronouncing his last name right, Gruenewald?

Nir: Gruenewald.

Andrew: Gruenewald. Oh, okay. So Bobby Gruenewald had an issue. What is that he … What app did he create?

Nir: Well he created the world’s largest Bible reading app. There’s many versions of the Bible online in the app store. And Bobby’s app not only was one of the first Bible apps. In fact, he started the company as a website. But his challenge was he wanted to help people do something they wanted to do anyway which was read the Bible daily, to make a habit out of the Bible. And what he found was is that people were having a very difficult time making a habit out of reading the Bible. It’s something they wanted to do with all their best intentions but had a lot of trouble making it into a habit.

Andrew. Okay. And because he followed this process that you’re going to be describing to us, what happened with this Bible app that he created?

Nir: Yes. Well to correct slightly, he didn’t actually follow this process because it didn’t exist. But his ….

Andrew: I’m not saying he followed because you to him it. But what I’m understanding from reading your book is you analyzed the process that Instagram went through, that Pinterest used, that even Coca-Cola, to some degree, used. And you said, “Here. I’m not inventing something brand new that never existed before” and telling the world, “Try it.” You’re noticing what’s working and making sense of it and giving us a framework so that we can use it. Am I right?

Nir: That’s exactly right.

Andrew: Okay. So now, because he did this, what happened to him with this Bible app? I tend not to think of Bible apps as being tremendously successful except that maybe some people who are into the Bible like it. So what happened to him from a business perspective?

Nir: Yes. So his app is one of the most successful apps in the world in fact. He has over 100 million downloads of the Bible. It’s not really a business. He doesn’t intend to make money from it. It’s owned by a church. And his app is touching hundreds of millions of people’s lives and the engagement is tremendous. And he’s really been successful in helping people do something they wanted to do anyway which in his case, was read the Bible.

Andrew. Alright. And that’s exactly what I want for us. Not necessarily to read the Bible, but if you want it, of course, go on and read the Bible. But my goal for this audience is to say, “What did Bobby do? What did all of these companies do that we can do to make our stuff more habit-forming, more engaging, more repetitive?”

And so, I did my best to pull some of the ideas from your book that we can share with our audience here and give them the process. And here’s one of the first things that you say, “Create an external trigger.” And I mentioned earlier Coca-Cola. I think this was going to be one of the only offline companies that we’ll talk about here in this session. But I want to understand, how is this an external trigger that we should learn from?

Nir: Yes. So external triggers, by definition, are things that give the user information for what to do next where the information itself is contained in the trigger. So in this case, we can learn from Coca-Cola when we ask ourselves, “How is the coke machine telling the user what to do next?” Well, there’s a few things. If you look carefully, it says, “Thirsty” there on the machine. And of course, people have certain associations with the Coke brand. But if you look even a little closer, you’ll see that in that picture there on the top right of the machine, there’s actually a picture of a person giving you a coke, right? That man is handing you a coke.

So it’s pretty explicit there what the next action that the user should take. So external triggers are all around us. There all these things in our environment that give the user information for what to do next. So calls to action on a website, click here, down load now, buy this, all these queue to do the next intended action. Even things in the physical world like a police officer directing traffic or you friend giving you a piece of advice about great new app that they’ve downloaded. All these these things are examples of external triggers.

Andrew: Give me another example of an Internet company. How about Mint.com as a company that you’ve looked at? What does Mint.com do to create an external trigger that we can learn?

Nir: Sure. So some things that they do is to send notifications so that when you have certain things occurring in your account, when they need to tell you something has happened and they want you back to the app, they’ll send you notifications. We receive them all the time on our phones. We get these little notifications that either push information to us or through a little jewel icon tell us we need to re-engage.

Andrew: Okay. Let me speak to the audience right now and say, guys, I know we’re not blowing your minds yet. The problem though I see it in here. You correct if I’m wrong. The problem is that most of us do that, but then we stop right there. We have the external action that’s the external trigger that says come to my site. Maybe, it’s an ad. Maybe, it’s email. Maybe, it’s something else. And then we maybe stop, but what you’re going to do is show us how that can be the beginning of a cycle that creates a habit. Am I right?

Nir: That’s exactly right. And so what I want to kind of tease the audience with is that we’re going to show you how to get to the promised land of what I call an internal trigger, an association with… a trigger that queues action just as reliably as that call to action, as that click here now button. However, the difference with an internal trigger is that the information for what’s due next is stored as an association in the user’s mind.

Andrew: Okay.

Nir: And that’s the promised land. To form a habit, we want to figure out how we can create those associations, and that’s what we’re going to do through successive cycles, through what I call the hook model.

Andrew: Okay. I intentionally picked Coca-Cola in the beginning to show that this doesn’t just apply to apps on phones and doesn’t just apply to web apps and software. Does it also apply beyond and maybe this is something we can answer and show examples of later on in this session. But does it apply to blogs? Does it apply to furniture? Does it apply to other things or are we just talking about ideas that can be narrowly focused on software?

Nir: Yes. So things that have repeat engagement, what I call unprompted user engagement. By that I mean users picking up a product and engaging with that product without a lot of conscious thought. That’s really the definition of habit, behaviors with little or no conscious thought. And we should say as kind of a disclaimer here, not every product needs habits.

There are plenty of businesses out there that do wonderful work that are very profitable that don’t need habits. However, when we look at kind of these companies that epitomize habit-forming technology, the usual suspects of Facebook and Twitter and Instagram and Pinterest and Snapshot. These companies that profoundly change people’s day to day behaviors, those companies’ business models can’t survive without habits.

Andrew: Okay. Okay. Alright. Let’s go on, speaking of the social media companies, let’s take a look at the next big idea, which is we’ve created the external trigger. Now we want to get the user to take action. You mentioned Twitter so I’m going to bring up another screen shot that I just copied shamelessly right out of your book. But I think it’s important. Tell me about this. How is this now an external… What is Twitter doing here that we should learn from?

Nir: Sure. The intended action here for Twitter, in this case, is to have people tweet the article. So in this case if I’m on the Wall Street Journal’s All Things D and I decide to share a piece of content, by making that Twitter button so easy to use and that all I have to do is push the button. It’s pre-loaded a piece of text here for me. They’ve made the action very, very simple.

So that’s really the basis of the principle of the action phase of the hook model, which is what’s the simplest behavior that you can take in anticipation of reward. How can we design an experience for the user that is as simple as possible for them to do?

Andrew: That’s why you’re showing the pre-populated tweet. It’s not just make it easy for people to tweet, it’s we’re going to make it so simple that we’ve even pre-populated it. Can you give me a few other examples? What else is an action that we can learn from here and see what you’re talking about?

Nir: Sure. So another example might be every time I want to take a picture with my iPhone, they’ve done something very nice where they know that people take pictures with their phone quite frequently. And so they put that little icon of the camera right on the home screen so that with a quick flip I can use the phone’s native camera.

Andrew: Okay. Do you have another one of maybe a smaller company, something a little less intimidating than Twitter and Apple, multi-billion dollar brands?

Nir: So I think there’s, let’s see, I like to look at the companies that are well known brands. But I think that these companies that can make that action as easy as possible and the principle here that I want to impart is that when you think about the history of innovation, really it’s all about just contracting the space between the need, the recognized need and the reward.

And that’s what the action phase is all about. How do you squeeze that space between the recognition of the need and achieving that reward? So I do care if it’s the cotton gin or the iPhone, the action phase across the board, is all about decreasing the time it takes or the effort it takes to do a particular behavior.

Andrew: I see. Actually, I remember talking to the founder of Optimizely who told me that one of the first that they did was that worked really was they put on the homepage just a box where you could put in your URL. And as soon as enter your URL and hit submit, you could automatically start messing around with the site and create a AB test.

So that’s what you’re telling me to do. Is that just in there for the first action that the user takes? Or are we talking about every interaction with them needs to be about reducing the work that they do? Because it seems what you’re about say is, “Increase work.”

Nir: There’s a sacred cow of interaction design which says that everything has to be easy. And I believe that in a certain phase of the hook model, before the reward is achieved, that’s actually true. So in anticipation of the reward, we need to make the behavior as easy to do as possible. And I’m borrowing here from the work of B.J. Fogg [SP] who has this behavior model of B equals MAT. That for any given behavior, we need sufficient motivation, we need the behavior to be easy enough to do, sufficient ability, and a trigger must be present.

So before the reward, it’s all about simplicity of the behavior and boosting motivation. Now, we’ll get to it in a little bit, because I see the lineup of questions you have there. What we’re going to find is that, actually, the right time and place to ask the user to do a little bit of work is after the reward. It’s after the user’s itch has been scratched. That’s when we want to ask the user to, actually, invest in the product.

Andrew: Okay. Let’s get into that. But for now, what you’re saying is, make it very clear for them to understand what action you’re asking them to take. You talked about the button and the emails that mint.com sends out, the thirsty, and the mention of a coke in the coke vending machine. So you want to be very clear about what action you want them to take. Then you want to make it very easy for them to take that first action. You’re also saying, give them a …. Actually, let’s move on then to the next point.

Nir: Before we go on, it might be helpful to think about this principle of, how can make that behavior simpler? Simple in this big world, but how do you do that? What does it actually take? And so Fogg gives these six factors of ability that is useful for designers to consider which are how much time something takes?

Andrew: Tell me more, because I know you’ve got this in the book. How much time?

Nir: How much time something takes. So the more time something takes, the less likely it is for that behavior to occur. How much physical is required? If something is physically very difficult to do, it becomes less likely to happen. How much money something costs is another factor that reduces the likelihood of a behavior. And then there’s some less factors of ability. For example, cognitive load. This is a big one in technology.

So it turns out that the more difficult something is to understand, the less likely it is for that behavior to occur. So simply making something easier to understand will increase the likelihood of that behavior occurring. Then we have social deviance. So if I see people like me doing a behavior, I become more likely to do it myself. And then finally, and perhaps most importantly in my opinion at least, is non-routine.

So it turns out that the more familiar a behavior is, the easier it becomes. And this isn’t rocket science, this principle is called, practice. The more we practice a behavior, the more familiar it becomes to us, it literally becomes easier to do and the user becomes more likely to do it. So what this means is that many times novelty is a liability. And technical people hate when I say that, right? Because isn’t technology all about the new thing and these amazing abilities that we can give users to do all this fancy stuff.

But it turns out if the behavior is too different, too weird, too outside the norm, it actually makes it less likely the behavior will occur. So we want to look for ways to prompt that action through interfaces that are familiar to the user as much as possible. Because, again, non-routine decreases the likelihood of a behavior occurring if it’s unfamiliar.

Andrew: Okay. On to the next big point. I almost gave this away and gave it away poorly actually. Because this is counterintuitive. The next point is to give them a variable reward. I was about to say, create an external trigger, ask them to take action, and then give them a reward. But you’re saying, no, a variable reward. What’s the difference between a reward for taking action and giving them a variable reward?

Nir: Yeah. It turns out that with habit-forming technologies to change the habit, this becomes less important over time once the habit is formed, but to change a habit it turns out these habit-forming technologies entice us with some kind of variability.

Andrew: Mm-hmm.

Nir: If you look back at your notes from college if you took Psych 101, you may remember the work of B. F. Skinner and B. F. Skinner, the father of operating conditioning did these studies where he took pigeons and he put them in what today is known as a Skinner Box and originally he gave them a predictive reward. They would click the lever and a food pellet would come out. And what he found was that they would click so many times based on when they were hungry.

But them Skinner did something a little different. He introduced variability, an intermittent reward. The pigeon would click the lever, and nothing would come out. And then the pigeon would click the lever again, and hey something would come out. And it turns out that what worked for pigeons and other lab animals actually works for people, that we find that a bit of mystery, that variability, that bit of guesswork, about what’s going to happen actually increases our focus, increases our engagement, and actually can be a driver for new habits.

Andrew: Okay. So let’s take a look at how that’s done online. How is – let me see if I can zoom in. Core likes to keep their columns really tight. This is a Core search for Mixergy. What are they doing to use this idea that you’re pointing out, the variable reward?

Nir: Yeah. So there’s a few things going on here and maybe it would be kind of useful to give the broader framework around variable rewards that we see in different products we use. I look at variable rewards in just three types when it comes to products.

Andrew: Mm-hmm.

Nir: We have rewards of the Tribe, rewards of the Hunt, and rewards of the self. Now rewards of the Tribe are all about social reinforcers. So things that feel good, that have an element of mystery, that have an element of variability and come from other people. So when you think about social media at large, there’s a tremendous amount of variability associated with social networking.

Now I use Facebook. What am I going to find? What have people posted? How many people will like it? What will the comments be? A whole lot of variability with what I might find every time I log into Facebook.

Andrew: Mm-hmm.

Nir: And so that’s also occurring with [??] or Stack Overflow. Several Q&A sites use this element of rewards of the [??].

Andrew: As I scroll through here some of these articles will be interesting. Some of them will be useless to me and boring, and you’re telling me that the reward of finding the good one is only valuable or more valuable if there’s a couple of clunkers in there.

Nir: It increases our focus. It increases our engagement exactly when we have that variability. It doesn’t means that we should make things more difficult because if the user doesn’t find that reward interesting, if scrolling through those pages isn’t fun, then we’ve missed the point.

Andrew: Okay.

Nir: So may we want to use a different reward type. For example, rewards of the Hunt are all about the search for material possessions. So rewards of the Hunt stem from our primal search for food and resources. In the wild, of course, these things have a variable component. There’s a lot of variability to that hunt that our ancestors did 200,000 years ago when our species first emerged.

And we see that today translated into rewards that are around money. We don’t hunt for our food anymore. We buy it with money. So money is a currency many times that’s used to keep us engaged. So when many people think of variable rewards, they think of Las Vegas where gambling, of course, uses this currency of monetary rewards to keep us playing, keep us engaged.

And so what we find translated into the online environment is that information rewards is hunt for information as you described in the feed type of environment. It’s very similar so that the slot machine experience is very similar to this scrolling experience, of scrolling and scrolling and searching for that next reward.

Andrew: I see. What about the difference then between this and Maholo which created a Question & Answer site much like Core which we’re looking at right here, and Stack Overflow which did very well. Maholo created the same thing except they said, “You know what? These points are good, but let’s all let people make money if they give the right answer, they deserve to get some money for it. What’s the difference there?

Nir: So there were a number of factors there. So there’s no silver bullet. There was a whole bunch of things that help a business succeed or not succeed. One of the things that I believe didn’t work for Maholo [sp] is that the people who are posting answers on Core in the early days weren’t motivated or the type of people who were well know, kind of Internet celebrities or prominent VCs weren’t incentivized by money. Where Maholo was giving cash for answers, Core had a very effective simple system for giving social recognition.

It was about the value that I was providing to people whose opinions I cared about. And so to those prominent question answerers that became a more important currency. So it’s really important to not just sprinkle on variable rewards or gamify the experience blindly, we really want to make sure that the rewards satiate the user’s itch, that if we don’t align those two things we’re bound to fail. It’s going to be a meaningless reward.

Andrew: Gotcha. Okay. I get it. Mark Andreesen is not going to be tempted to answer a question so that we can three dollars from someone on the Internet, but he might be and apparently is engaged if you give him social credit on Twitter and other sites. Core, I think, is on there and so on. Alright. I get what you’re saying. So not just rewards, variable rewards and not just variable rewards but ones that are connected and make sense to the community. Alright.

Let’s move on to the next one. So we said earlier make it easy but now we’re saying have the user invest or put value into the product.

Nir: Yeah.

Andrew: What do you mean by that?

Nir: So this is, I think, the area that I think starts to have the most potential for improvement. I think people don’t think enough about this area of investment, this fourth step of the model. The investment phase is all about these simple actions that users take to increase the likelihood of the next pass through the hook.

And there’s two ways that this works, two ways that investment increases the likelihood of the next pass through the hook. One is by loading the next trigger. So if you think about email, for example. I think email happens to be one of the mothers of habit-forming technology. I don’t know about you, but I find myself constantly using email with little or no conscious thought. I’ve definitely developed a habit, at times a bad habit, around using email.

We can talk about stopping bad habits later on, but when we think about using email, the trigger might be boredom. It could be the internal trigger of some emotion like boredom. The external trigger could be notification that you got a new message. The action, the simplest behavior in anticipation of a reward is to just open the email.

Now the variable reward, let’s think a minute. We’ve got Tribe, Hunt, and [??]. Rewards of the Tribe come from the fact that email is a communication medium. It’s what people whose opinions I care about. Hunt, well through email I’ve got, of course, information rewards. I’ve also got many times monetary rewards because email is connected to my workplace.

Andrew: Mm-hmm.

Nir: So that becomes an important factor. And then rewards of the self, we didn’t get to talk about them. Briefly rewards of the self are all about the things that I do for mastery, consistency, confidence, completion. These are, if you’ve read the work of Daniel Pigg who cites Desi and Ryan, their work on self-determination theory, it turns out that we’re highly driven by the search for mastery, consistency, competency, control.

So every time I flip through those unread messages I complete this task. I finish something that, of course, has its variability of this constant stream of new emails. That’s rewards of the self.

Now let’s think about the investment phase. What’s the thing that I do with email that makes me more likely to use it in the future? Well, when I send a message to somebody, I’m loading the next trigger. I don’t get it, points and badges if I send an email. There’s no immediate gratification in sending an email.

Andrew: Mm-hmm.

Nir: I do that in anticipation of a future reward, and the more I do that the more likely that I am to use that system in the future. And by the email, I use email but if you think of an app like MessageMe or WhatsApp or an SMS service all of these systems use the same type of investment because every time the user sends a message they’re loading the next trigger to use it in the future when someone replies to them.

Andrew: Here’s another example that’s not communication. It comes out of your book. This is iTunes. How is software like iTunes using that?

Nir: Okay. Great. So we talked about the first way that investments load the next trigger. This is an example of the second way that investments increase the likelihood of the next pass which is by storing value. Now storing value, I think, is really exciting, and to me it’s one of the reasons I love working in technology so much because if you think about things that are made out of atoms, things in the physical world. Your chairs, your iPhone, your computer, your furniture, all these things depreciate with time. They lose value the more we use them.

However, habit forming technology, by getting users to invest in the product, should appreciate. They should get better with use. That happens through this process of what I call Stored Value. In the iTunes case here, every time the user adds content to iTunes, they’re improving the service. They’re increasing the likelihood of them using the service in the future because it becomes their one and only music library.

Other examples of open content might be data. The more data I give a site like Pinterest, for example, by pinning and repin, I’m literally changing the way that site looks just for me. If you were to log into my site, Andrew, and you log into Pinterest or my Facebook, it wouldn’t mean anything to you because it’s been customized just for me by storing value. There are a couple of other ways that stored value that can increase the likelihood of the next pass in the hook.

Andrew: I know that every time that I use Netflix and rate it, I feel like I’m suckering myself into never being able to leave Netflix because now all my ratings are there. If I go start somewhere else, it’s not there. I have to start all over.

Let’s take an off line example just to show another way that this works. Ikea. Look at this. This is all the different people who have posted their instructions from Ikea on the web. How is Ikea doing this?

Nir: Yeah, so this comes out of some work that Dan Ariely did. He’s a professor at Duke and wrote a great book called “Predictably Irrational” as well as some other books. He’s a behavioral economist who dubbed this effect that some products have on us whereby when we invest work, when we invest labor into something, it turns out that we love it more. We gain an affinity for it. He calls this the Ikea Effect.

Andrew: It’s in Wikipedia here. I don’t think that people can see it, but the Ikea Effect.

Nir: Yeah, it turns out that we have, as you can see there, a cognitive bias towards things that we put effort into. That’s what the investment phase is partially about. The more people put something of value, a bit of time, effort, money, something of value into a service, it turns out we psychologically value it a bit more. Through successive cycles, through the hook, we tend to build up a lot of investment in these products.

Andrew: I see, so the first action needs to be super simple to get them engaged and to give them a variable reward, but later on you do want them to invest, to spend time, to make it their own. The more they do that, the more hooked they are into the product.

Nir: That’s part of it. Through these rapid cycles through the Hook Model, you’re exactly right. By getting users to invest…That actually kind of goes against the pedagogy of everything needs to be simple, that I told you about in the action phase. If you ask any designer today, they’ll tell you that sites need to be “slicky,” that everything needs to be getting users to check out as quickly as possible.

I’m telling you that actually checking in is more important than checking out — that sometimes you want users to engage with the service, add something of value, invest in that service, and that will increase their likelihood of coming back to use the service in the future.

Andrew: This, Nir, is one of the reasons why I love the book. I said at the top that it’s easy for someone to see the first section of our conversation here about creating an external trigger and say, “I know all this stuff,” and move on.

What we don’t realize is that until we get deeper into your work and really get to understand it, so much of what hooks us into the products we love is counter-intuitive. It’s not what we’d originally expect.

Let’s move on to the next one. We talked about external triggers. Now we’ve created a cycle which I’ll show a screen shot of in a moment, but I want to understand what you said earlier. You said we go from external triggers where the product has to advertise, the product has to send the message out, to internal triggers.

You give an example of someone in your book who you named Yin who is a student at Stanford, and she has these internal triggers with Instagram. What is an internal trigger, and how does Yin have that?

Nir: We all have these internal triggers. Internal triggers I think is an area that I think product designers don’t think about nearly enough. It turns out to get to this Promised Land of forming a habit, we don’t create the internal triggers. The internal triggers are already there.

What we’re going is creating an association with that internal trigger so that every time a user feels this internal trigger, and it’s said to be either emotions, routines, situations, certain places or people, every time they experience that internal trigger, they’re prompted with doing the next action. They do the net intended behavior.

These internal triggers are things that we feel throughout our day to day lives, and it turns out that some of the most powerful internal triggers, that just as reliably queue our next action, come from emotions. So what we do when we feel bored, or lonesome, or fearful, or lost, or uncertain. What we do when we feel these negative emotions just as reliably queues our next action as that big honking “Call to Action” button that we’re all so familiar with as an external trigger.

Andrew: I’m not trying to get the person to feel a sense of loneliness and use it. You’re saying I am supposed to understand that they have these feelings, and connect my product to them.

Nir: Yes, that’s absolutely right. So what we are doing here is not creating pain, God forbid. We are solving pain. Creating pain, that’s not my forte, I don’t want to get people to do anything they don’t want to do. What we want to figure out how to do, is how to look for people’s existing pain points, i.e. their internal triggers, and find a solution to that problem.

That’s, in a nutshell, what the Hook model is all about, is connecting your user’s problem to your solution with enough frequency to form a habit. That promised land starts with figuring out what’s the itch that you’re going to scratch. What’s the emotional need that your product is serving for the user?

Andrew: So then, what is the emotional need that leads to this? I see tons of food photos up on Instagram, and it’s not because Instagram is emailing people daily and saying, “Take a picture of your food, take a picture of your food!” What internally do you think is going on, that Instagram connected to, that is leading to that?

Nir: Absolutely, yeah. So, it’s interesting because you remember, the definition of the external triggers was something for the information for what to do next was in the trigger. In the case that you saw, you know that plate of food wasn’t crying out, “Andrew, take a picture of me with Instagram,” right? That would be pretty amazing, but that’s not what happens.

What happens is people see something they want to capture, they want to hold onto, that in fact they fear losing. The solution to that fear of losing that moment is Instagram. So Instagram wins, because they’ve created an association with a particular moment in time. Now you may think about, well, actually that sounds familiar, right? This talk of moments probably is ringing some bells with another company, that about 20, 30 years ago also owned the moment. Of course I’m referring to Kodak. The Kodak Moment.

You remember these commercials, right, where they’d have the puppy dog running through the grass, and the kids playing outside, and grandma blowing out maybe her last birthday candles. You remember these ads, right? So what Kodak was doing over the span of about 100 years and billions of dollars, was to create those associations with internal triggers. That when I see this moment, I fear losing it, and I capture it with Kodak.

Now Instagram, to their credit, did the same thing. They created that association with these internal triggers, of this fear of losing the moment, but they did it by having users teach other users what the Instagram moment is all about. Now, Instagram’s also much more than just a way to capture photos, right? It’s not just about picture taking, it’s also a social network.

So the more times users went through this hook of trigger, action, reward, and investment, they started to figure out that, “Wait, actually, Instagram can also solve these other internal triggers I have!” So when I’m bored or lonesome, or fomo. You know what fomo is, right? Fear of missing…

Andrew: Fear of missing out?

Nir: Yeah, exactly! Fear of missing out is painful. It doesn’t feel good. That’s a user problem. And whenever I feel this fear of missing out, Instagram is my solution.

Andrew: Gotcha. Alright, I see it. We need to figure out what our users are already experiencing internally, and then connect our product to it.

Nir: Exactly.

Andrew: Let’s go on, then, to the final point that I’ve got up here on the board, if I can get it up there. There it is. Final one is repeat, and I’m actually going to show the hook model that you show earlier in the book. This is what you want us to keep going through, keep cycling through this, is that right?

Nir: That’s right, yeah.

Andrew: So we always start with an external trigger, I imagine. Then we get the user to take a simple action, then we give them a variable reward, then we ask them to make an investment, then we hopefully are at a place where they’re internally triggered and continue, continue, continue. Companies that don’t get that internal trigger keep sending out too much email. Companies that don’t figure out the reward, what happens if you don’t figure out the reward? People don’t come back?

Nir: Every company has their own opportunity for improvement, let’s say. If they haven’t formed the habit, then there’s usually one part of the hook that’s not working for them, in some way or the other. They haven’t figured out a way to show effective external triggers, or the action is too difficult, or the variable reward isn’t actually scratching the user’s itch, or the investment doesn’t bring the user back by loading the next trigger or storing value. So it’s very contextually specific to each individual business which part of the Hook Model may be lacking in their particular case.

We know a few things. One, that frequency matters. The more frequently users can go through this cycle, the more likely they are to form a habit. When I say frequency, it turns out the research is telling us that within the span of a week’s time or less — that seems to be this crucial tipping point where if we can’t get the user to do something to engage with our product within the span a week’s time or less — we got a problem.

When you think about the products that we think of as most habit forming, Twitter and Facebook and Instagram and Snapshot, these are intra-day behaviors. We do them multiple times per day. That’s one point is the frequency of behavior.

The second is the speed in which we go through these four steps. If there’s a huge gap between a trigger and the action or the action and the reward, we have a problem. We want these things to happen as quickly as possible, the speed with which users go through the Hook Model.

Andrew: Can we get an overview of this whole process that you just described using an example? Maybe the example that we started this conversation with, the Bible App. Would that work?

Nir: Sure, we could do that.

Andrew: The original external trigger might have been what?

Nir: Let me just differentiate that there’s on-boarding, by the way, which some companies can actually make the on-boarding of their product part of the Hook Model. In fact, Twitter does this. To some degree, Pinterest does this. I think, also, the Bible App does.

But many companies actually just…Before people get scared, on-boarding can be its own separate experience. The Hook Model is not really so much of a growth, which is where I would bucket on-boarding. It’s really that engagement.

In the Bible App case, the external trigger would be somebody telling another person about the app. It’s a word-of-mouth product. Or within the Bible App, you can actually share to Twitter and Facebook. Many people find out about it through this external trigger of seeing something in their feed.

The action would be to open the app once you’ve been on board it and you’ve installed it. To open the app becomes the action. The variable reward is what you’ll find. Within the app, there’s actually, surprisingly, quite a bit of variability because you’re on a reading plan.

What Bobby figured out in his development of the Bible App, was that just giving people the entire Bible to read — too difficult. It’s just too hard. What he started to do was to create these reading plans which made the action of opening the app and getting to see what verse you should read today became variable, became more interesting. There was this hunt for information around, “What’s the verse that’s going to mean something to me today?” For people who are developed, that’s actually pretty interesting.

The investment phase comes down to checking. He has this system that he’s built of checking what you’ve read for that day. You’re checking off that you’ve done your daily reading for that day. That, of course, increases the likelihood of the next pass. Because every time you’ve checked that you’re done with something, that’s got the variable reward of the self, this completion mechanic.

You’re investing in the future because now the app has the opportunity to trigger you, to send you an external trigger that says, “You’ve finished Section A. Now it’s time to move on the Section B.” They’ve loaded the next trigger with every investment.

Andrew: So there we have it. Let me bring it back up on the screen. It’s very simple. I’d like the audience to all get a screen shot of it mentally so that you can see it. It’s so simple that if you take a look at these four quadrants, you’ll just memorize them.

My hope is that now having gone through this program with us, that you will understand it and start to see it in other apps and start to think about those apps that you’re connected with so much more differently.

You’ll understand why they’re hooked, and you won’t be one of those people who walk around saying, “The Bible’s doing well because people love the Bible, right?” As if just putting the Bible in an app is the solution. You’ll now be able to understand the thought process that allowed it to be much more compelling, much more of a continuous engagement.

By seeing how other people do it and understanding how you could do it yourself, my hope is that you all will get to do it. If you want to follow up…I’ve only scratched the surface. We’ve talked here for less than an hour, right, Nir?

Nir: Yep, that’s about right.

Andrew: I have tried to pull in as many stories…Actually, no, I didn’t try to pull in as many as possible. I tried to give people one specific example per section, maybe two. There’s so many more in the book. I hope people will go to your website and get it. The site is nirandfar.com. Do I need to spell that? No. I just want people to know that Nir is spelled like your name — N-I-Randfar.com where they can buy it. They can also go to Amazon and buy it. And if they’d like, they can go to the Habit Summit when you click right there and be a part of it. Will you be meeting people at the Habit Summit?

Nir: I sure will, yeah…

Andrew: What’s one benefit that people could get if they go to the Habit Summit?

Nir: Well, the Habit Summit is all about bringing together, really, people that I wanted to hear from. These are friends of mine and fellow practitioners, where people are going to share their hard won lessons from how to form user habits and how to boost engagement with their products or services. I would like, Andrew, if you’ll let me just for a second, to talk about this disclaimer I have around how to use habit formation responsibly, which is something which is something we haven’t talked about.

Andrew: Yeah, let’s never use it responsibly, only for evil! Go out there and really hook people in like the cigarette manufacturers. That’s what you were going to say, right?

Nir: Well, not quite. [laughs]

Andrew: [laughs]

Nir: But it should be noted that we have a tremendous power as entrepreneurs, as designers, as product makers, that we’ve never had before. I believe that we have more power than ever to affect people’s day to day lives, and we have to use that power responsibility. Half my writing, if you look at my blog, is about how to build habit forming technologies, and the other half is how to prevent unwanted manipulation.

In fact, I’ve used the hook model to build good habits and break bad habits in my own life. What I’m hoping will happen, is that your listeners and my readers will find ways to improve their lives by using the hook model personally, but then also to build products that help people live happier, healthier, wealthier, more connected lives by using habit forming technology. It’s all about making things that people want to do easier to do by turning them into habits.

Andrew: All right, fair enough. I do remember even in the book that you had a disclaimer, and I said, “I don’t need the disclaimer!” [laughs] Let the audience run rampant with this! But I do appreciate that you did that. It’s great to have you on here. How do you feel that this went for you?

Nir: Fantastic, this was a pleasure! Great questions, and I really enjoyed it!

Andrew: Thank you! Thank you all for being a part of it, let me know what you end up doing with this, and let Nir know, especially if you go to his conference, let him know in person. Thank you all, bye.

DOWNLOAD TRANSCRIPT

Master Class:
How to profitably launch a web app
(Even if you want to start small)
Taught by Rob Walling of Drip

Master Class: Profitable Product Launch


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Transcript

Andrew: This session is about how to profitably launch a web app, and it’s led by that man right there, Rob Walling, whose latest profitable launch is this, Drip. Drip allows you to easily capture email addresses on your website using a box like this one. Let me see if you can see in the bottom right corner right there. I’m going to move it down. I’m going to move it up. Down. Up. There. That’s what it does. It also allows you to do this Drip email campaign you can see right there on their website.I invited him here, because this, like I’ve said, is one of many profitable launches that Rob has done. I want to learn from him. My name is Andrew Warner. I’m the founder of Mixergy where proven founders like Rob teach. Rob, I’m excited to have you on here, partially because you have so much credibility having done this a lot, but as I’ve told you before you, we started there is a danger in that, and that is that the audience is going to say, “Anything that Rob launches succeeds,” and they can’t relate, but not everything did work out.Rob: Yeah, I had a string of failures before I had any successes to be honest. I think the one that you and I spoke about before is Flogs.com, which was a social network I tried to launch, and I made so many mistakes that I’ve since corrected, which is why I’m able to now launch products with a little more success I think.Andrew: You have a clear plan for launching. In fact, many of the steps that we’re going to talk about today that are here up on the board, when we talked about them, you said, “Oh yeah, I always do this four step. Oh yeah, I always do this.” Did you do a four step email campaign for Flogs?

Rob: Absolutely not.

Andrew: No.

Rob: I did a one-step email campaign, which is something I would advise people never to do. It just doesn’t work very well.

Andrew: One step meaning, “Hey…”

Rob: “Hey, we’re live.” Yeah, exactly.

Andrew: All right, so that’s the first thing that we wanted to get out of the way. The second thing is, all right, if you’ve done it how effective are you? How effective is this launch here?

Rob: I was pretty pleased with this Drip launch. The first month out of the gate we did just over $7,000 in revenue, so it’s definitely a good start for month number one.

Andrew: Okay, and how long has it been around?

Rob: Publicly launched now for about 60 days.

Andrew: Sixty days.

Rob: Mm-hmm.

Andrew: How many profitable apps or sites have you launched in the last, I don’t know, decade?

Rob: Well, between launched and acquired, because a lot of them…you know, I will acquire them, and relaunch them. It’s…at one point…it’s got to be more than 10. At one point I had counted them up, and there were 25, but some of them are smaller. You know, I had some small niche sites that only did a 1,000 bucks a month, but in terms of like more substantial apps there’s been half a dozen to a dozen for sure.

Andrew: Okay. That’s what I wanted to establish, that this is something you’ve done before, and we’re not talking about anything in the hundreds of millions of dollars. This is attainable. Everything we do here can be done with a small operation. Let’s get into now how someone who resonates with this can do it for themselves. The very first thing that you say is we need to choose one value proposition that fills a specific, specific need, and you had a way of doing this, and it started with a text doc. What did you do there?

Rob: That’s right, so the idea here is that I’m at…especially at the time, I was working on Drip, really a one or two person show. I don’t have a large operation, and so in order to be able to build in a features, and to be able to market, I need to basically pick one thing to be really good at, and be laser focused, so that’s what this encompasses.

The way I did this with Drip is I pulled up a text doc or a Google doc, and I brainstormed headlines for the app. I knew that the app would capture leads, capture emails, send Drip sequences, and prove conversion rates. It does a bunch of things. What is the one thing that I need to focus on?

Andrew: Could you give me a few examples of what would be on there?

Rob: Sure.

Andrew: I want to see what a value prop looks like when it’s expressed in a potential headline.

Rob: Sure, so one example is “More leads, more customers.” That’s one headline, and that can fit in a Facebook ad headline or a Google AdWords headline. Another one is “Create a double digit jump in your conversion rate.”

Andrew: Okay.

Rob: That’s another one. Another one is “Epic auto responders,” or “The future of auto responders.”

Andrew: Okay.

Rob: Each of those is quite different, but if you think about Drip it actually, at least in my opinion, is all of those things at once, so I had to figure out which one do I double down on, because I don’t have the marketing budget, and the team to focus on all of them.

Andrew: This is before you even started developing the app?

Rob: Yeah.

Andrew: You just had this idea, and you wanted to see, how do I position it? And in the end you came up with this. I found this on a blog, I think actually on betalist [sp], from the launch.

What am I seeing here in the headline, that came out of the doc?

Rob: Yeah. So the full headline that you’re seeing which I split tested to get to this one. This says, let’s use email and years of best practices to create a double-digit jump in your conversion rate. And so the initial seed of that was that, create a double-digit jump in your conversion rate, and then though some testing I landed up with the longer headline which my designer hated because it warps so many times but…

Yeah, this one worked well for us.

Andrew; But the key point, and I’ll zoom in again. The key points are the parts that are bolded, and I see three words right there, double-digit jump, to get to that and to know that that was the phrase out of all the phrases that you put in the Google doc or the text doc, the one that worked, you did something on Facebook. What did you do?

Rob: Yep. I bought Facebook ads and I tested headlines with at least, I think I tested between 10 and 15 different headlines on Facebook and targeted different audiences as well. Some of it was email marketers. Some of it was startups. Some of it was enterprise sales and that kind of stuff.

Andrew: How much money are we talking about?

Rob: Oh man. Not a ton. To test this? It was less than $500.

Andrew: Less than $500, all those different, and here’s the other thing that I said. It could be intimidating. Your design is beautiful and when I pointed that out and said, this should be the first thing people create, it’s going to be a little bit tough. What did you say?

Actually, you know what? That isn’t the official, very first thing. Let’s come back to that because I do want talk about what that very first one was and I think I’ve got a screenshot of it and I see the problem. We’ll come back to that.

Rob: Okay.

Andrew: Let me go over to the next big idea here, which is, we found that value proposition by writing out potential headlines that appeal to potential target audience, tested them on Facebook to those audiences. The next step is, you say build your lean prototype to validate the value. Let’s see where that is here. This is, here it is. This is what it is. What site is this on?

Rob: So this is on hittail.com, which is one of my other products.

Andrew: Okay.

Rob: And the idea behind this bullet point is that,

Andrew: Let me go to that site.

Rob: If you’re going to make a claim, like, it creates a double-digit jump in your conversion rate, it damn well better do that. And so, realistically, these two steps are actually out of order. I did this part first. We actually had a prototype built on Hittail and I had seen how much it impacted our conversion rates. And then I used that as a way to then brainstorm some of the headlines.

Andrew: Let me zoom in. So what you did was you created, this is now the official version right here but

Rob: It is, because I don’t have a screen shot of the old hacked-together version.

Andrew: You hacked together just a pop-up that would come up in the bottom right like this?

Rob: Yep.

Andrew: And you said, can I really get email addresses from it. And when you could, that’s when you said, alright I will now start offering this to other people. And that’s what you want us to do. To find that simple way to test it.

Rob: Yep. Find the simple way. Yeah. And we did send, we captured email addresses and then we also sent emails and we saw how it impacted our conversion rate. But it was about two days of developer time to build this. Two and a half days. And then it took off for us, so I knew there was a lot of value there.

Andrew: Suppose I wanted to take this little pop-up, and I didn’t have a development team and I wasn’t a developer myself but I had access to oDesk. Roughly speaking, we can’t obviously be accurate on this. What would it cost to create this MVP that just popped up and asked for an email address on a blog?

Rob: Yeah, that just did that? I mean, less than $500.

Andrew: Okay. So, less than $500 bucks, again, test out.

Rob: Yeah, yeah.

Andrew: OK. What else, what else, what else? I don’t think Hittail got an enormous amount of traffic because it’s a homepage. I think where, I think a blog would even get more traffic, so we’re not talking about an unfair traffic advantage there.

Rob: That’s right. Hittail gets, I think at that time was getting maybe between 10,000 to 20,000 uniques a month.

Andrew: Um-hmm.

Rob: This is not a major media site of any kind.

Andrew: Okay. And I can see, if I didn’t have that advantage, where I didn’t have a second site, I might go and partner with someone else and say, if I build this for you will you put it on your site, I’ll give you all the email addresses.

Rob: That’s exactly what I would have done.

Andrew: Okay.

Rob: Absolutely.

Andrew: And the idea is to keep it as simple as possible. What did you keep out of that first version that’s our way of validating.

Rob: Oh man. So much stuff. I mean we, it was cobbled together. It used JQuery and just had a pretty basic design. You couldn’t split test anything. You couldn’t update anything without updating code. You know, I mean it was all just hard coded in there, and you know, now with Drip it’s like you can edit everything in a web interface, you can split test, et cetera, et cetera. It was just…I won’t say, “It was hacked together,” because it was solid code, but it wasn’t sophisticated or flexible.

Andrew: Okay. Let’s go to the next big idea. Now, we got this hacked together code, or something we got on oDesk, or something that’s in MVP. We test out different value propositions to see what works. Let’s see what’s next for us. Where is that? There, that button. Next, we reach out to warm, potential users to validate the market. I asked you for…actually for an email that shows how you did it. This is what you sent me. There’s no way we can read it on the screen, and frankly, I can read it to people, but I want to understand not the words that are on here, but what happened here? What are you doing?

Rob: Yeah, so this is to combat what I call, “The scratch your own itch fallacy,” which is where people say, “Well, if you have a need, certainly other people have that need too,” and I’ve just found that to not be the case in most situations, and so I wanted to go with a market first approach where I ensure that there were at least a handful of other folks who would be willing to pay for this same thing, that they also had this itch that needed to be scratched.

This email, in retrospect, I just read through it as I was scraping it for you, and it’s a little longer than it should be, because it requires a bit of time from a startup founder, which is who I mailed these to.

I knew 17 people that I thought could feasibly use Drip, and so I sent the email, and all the email says is “This is the bulleted list of what I’m looking to build. You can see an example of it here on hittail.com,” because I already had the thing compiled together. Then I said, “The value will provide increase conversion rates. It will capture more leads. Would you be willing to pay $99 a month for that?” That’s what I’m doing.

Andrew: You know what’s interesting is you actually said to them, “I’m doing customer development on a new software as a service idea. Even if you only time to answer with a yes or no it would be a big help. My idea” And it was just four words, “One click email marketing.” Then the summary, “If you visit hittail.com, and look at the lower right hand corner you’ll see an email signup form that stays dormant for X seconds, then prompt you to subscribe to our free Long Tail SEO email course, et cetera,” and then you give them the list of the benefits, and so on. Can I copy this, and give this to the audience?

Rob: Sure.

Andrew: I’m looking at this, and I don’t think there’s anything private in here. OK, and so you’re being very open, and you’re saying, “I want to see if this is an idea that anyone cares about. Here are the benefits. Will you…”In fact, is this the ask? Let’s see. The ask at the bottom is “The plans will start at $99 a month. Would you pay for this, why or why not?” Gotcha. 17 people, you’re saying, “Would you pay for this?”

Rob: Yeah.

Andrew: What do you say to someone who says, “Seventeen is not statistically relevant. It’s not a real representation of all of the sites that are out there.”

Rob: Sure. Yeah, it’s not, but as a bootstrapper I don’t need all of the sites that are out there. You know, at 99 bucks a month, 100 customers is 10,000 bucks. Is that right? Yeah, that’s right. That’s not a bad way to get a bootstrapped app off the ground. If I can find 100 customers…so to me, to even find 10 paying, which is what I found out of those 17, I got 11 who said, “Yes,” and then six said, “No,” or “Maybe.” Some people said, “It was too expensive,” et cetera, et cetera.

I don’t need the whole world to need it. I just need to find a group that does in fact need it. The interesting thing is out of the 17 that I emailed, a bunch of them, the ones that said, “Yes,” they were mostly SaaS, and downloadable software founders, whereas the people selling courses, info products, WordPress plugins were in the six that said, “Yes, no, maybe,” and so instantly knew, “Boy, I need to…who’s my marketing going to be? Where’s the value here?”

Andrew: How do you know if they’re just being nice, or they’re really going to buy?

Rob: You don’t, except for…at least these folks that I emailed, I would hope that they would be candid with me. I also wrote back, when people said, “Yes, I love this idea,” I wrote back and said, “I’m going to build this,” in a nice way, “Can I hold you to that, to at least try it out, to at least give me a test? I should have something in four months.” I gave them a time frame. I gave them a price, and I tried to get a verbal commitment, you know? Yeah, you’re right, they could totally bail, but most people, I mean I have at least loose affiliations with these guys, aren’t going to tell you, “Yes,” and then back out. If they’re total unknowns they might.

Andrew: My temptation would be, Rob, to say, “I’m going to launch it. I plan to charge 99 a month but if I give it to you for free, will you give me feedback on it after you put it on the site.” Rob: Sure.

Rob: I have to be honest. I don’t think anyone in the audience is going to own up and say that’s how they are. Let’s all speak up. I believe we do this.

Okay. So the reason, I didn’t want to do that. I’ll admit it. It’s tempting. I won’t say I’m immune to that. I got a lot of feedback when we started getting customers in and I really wanted feedback from people who were willing to pay for it. That’s the bottom line. If you give it to someone for free, they just don’t value it very much.

There were a few people that I did comp for reasons. Either they couldn’t afford it. There was one blogger who wanted to use it and I was like, guys, feedback will be valuable but, sure enough, it wasn’t. It was way off the mark of what the cluster of paying customers were saying. It was way off the mark. I would really discourage people from doing that.

Andrew: How did you come up with 99 dollars? I got to move on to the other pints but why 99 dollars? How do you know what to ask?

Rob: In the end, the pricing is not 99 dollars. It’s actually 49 dollars. By the time I got to launch, I had changed that. I wanted to move up market and I wanted to figure out what I had to build to get to a 99 dollar price point because you can scale an app at 99 bucks a month. It’s really hard to scale an app up at 10 or 20 bucks a month and I’ve already gone down that radio so I wanted to step it up a little.

Andrew: Alright, let’s step it up here too. Next is put up a landing page for warm traffic. Who’s warm traffic?

Rob: The idea here is, I have this thing that I call Concentric Circle Marketing. You start by spreading the word to the inner circle. That inner circle is your warm traffic. It’s anybody who knows you. It’s your audience. It’s things like Twitter. It’s your blog, if you have one. Maybe you have a podcast. Maybe you have an email newsletter. Anybody that you can easily reach, you test it out by starting to spread the word to them first and that’s what they mean by warm.

Andrew: How many people did you send it to who were warm?

Rob: There were some podcasts has several thousand listeners and I started mentioning it there. Hey, go check out the new app that I’m working on. I had about 6,000 email subscribers that I sent it to, again, just as a heads up like, hey check this out. If you think it’s interesting, sign up. It’s in the 10 to certainly not 20,000. Probably like 10 to 15,000 and of those, it’s pretty loose because you might send 6,000 emails and only get 500 of them even opened. Then you might only get 300 clicks so it’s not like thousands of people saw this landing page. It was maybe 1,000 people from the audience that actually clicked through and saw it.

Andrew: And what you’re trying to do is get them to come to this page and give you their email address as a way of gauging their interest.

Rob: Yes.

Andrew: There’s that phrase that you checked out.

Rob: That’s right. To be honest, the warm traffic is a bit of a double edged sword. I call it the curse of the audience because when you have an audience, they often just want to see what you’re up to and so they’ll sign up so you’ll get abnormally high conversion rates. It might be people who are never really going to buy from you. I had to be careful with it.

The conversion rates of this early first circle, the people who had businesses that converted really high because they trust that I’m going to do it and do a good job with it. There was also a really low conversion rate portion which is everyone who just kind of wanted to check out what I was doing and see how I was going to launch it.

Andrew: I must admit, I do that with people all the time. I have a special email address that I use just to stay in touch so if I ever need to reconnect with them, I can go to my inbox, do a search and say ah, that’s what you’ve been up to.

Rob: Yep. I do as well.

Andrew: I showed you this and you said two things about it, or I said to things and I want to get the responses that you said before. The first I said is this is beautiful and you said two things. The first is, there’s not. There’s a mistake that I already see on this. What’s the mistake that you see on this that I, Andrew, do not see?

Rob: The text box is not the right width.

Andrew: The email address box.

Rob: That’s right.

Andrew: This part right here.

Rob: It should be the same width as the button below it. We just have a CSS screw up there.

Andrew: Okay and then the other thing you said was, this is not the actual page Andrew. I was moving so fast, I didn’t screen shot every step of my way for when I’m on Mixergy.

Rob: That’s right.

Andrew: The actual page looked like?

Rob: The actual page I don’t have a screenshot of, unfortunately but it was a clean design but it was not really something that a professional spent a bunch of time on. You can tell that one with the envelopes, I hired someone to do that. The other one was thrown together in just a couple of hours. Frankly, I would have gone to Theme Forest and paid seven bucks for a landing page if I didn’t have this one.

Andrew: You would go to where?

Rob: Themeforest.net

Andrew: Theme Forest. Yes. I love that site.

Rob: Yeah, they have plenty of really nice landing pages for five to ten bucks and that’s what I’ve used in the past. I happen to have a designer handy on this one. But the one that didn’t look as good as this outperformed it in a bunch of tests and I had to do a lot of work to get this one up to snuff. So the theme forest approach is potentially superior in the early days.

Andrew: Here’s Theme Forest. When we go to these page here for 11 bucks. I’ll randomly click over here to show people what it looks like. I think theme forest landing pages are just beautiful. Well, when we do. What are we trying to put on there? This is a whole page that you can get and this is maybe even more complicated. We don’t want, the elements that we want to make sure we keep in there are what? The headline that we tested that works. Email box so we can see if people really care. What else?

Rob: Really just one sentence, just enough to peak curiosity and to give enough information that people understand how you’re going to do that, cause you look at that headline, Create a Double-Digit Jump in Your Conversion Rate, that really a lot of ways. You could do it twenty different ways. I would like to get at least a little bit more information. For example, we could use email to do that. So you’re peaking curiosity but giving just enough to get their interest. And frankly…

Andrew: And so, that’s the part of the sentence that says Buy Reconnecting with Website Visitors via email.

Rob: That’s correct. Right Yep.

Andrew: And so, the longer landing pages that I’ve tested against this, you know, that have even testimonials and product logos and other stuff, it doesn’t tend to do as well in this early stage. You really want to minimize the amount of information. Two to three sentences, tops, is what I found works best.

Rob: Okay. So it’s value prop and then maybe a sentence that includes by or though. So value prop is buying whatever, give me your email if you want to know.

Andrew: Yep.

Rob: Alright. Um, next. Now we’ve got all the information it’s time to act. Build out a full version but be flexible’

Andrew: Actually, drive page…

Rob: Right. I just jumped over that one.

Andrew: Drive pay traffic. And I actually see one of your ads. Can I put the ad up now?

Rob: Sure.

Andrew: Let’s do it. And I’m going to zoom in because this ad campaign from where, because it’s so small.

Rob: Facebook.

Andrew: Facebook. Why Facebook?

Rob: Um, Facebook has cheaper clicks than Google Ad Words and you can target demographics with Facebook instead of just intention. So obviously with Google Add Words you’re typically targeting search keywords and any actions someone has taken. For example, when I went onto Facebook to test this out, you know, I could run increased trials 30% and run this for startup and fast founders specifically. And it would appear in front of them.

I also had some ads that said more leads, more customers. And I ran those against both sass people and enterprise people and digital marketers and tried to figure who cares about leads, who cares about trials, Who cares about conversion rates. So in order to test different value propositions across demographics.

Andrew: Okay. How much would you actually, I have the price here actually but, I’ll say it. You were able to acquire a lead for $3.50.

Rob: Right. And that means a email address for $3.50. Clicks were around, I know that was going to be your next question, so…

Andrew: Yeah. I was trying to get the whole understanding of how you knew that this was going to pay off based on the ads.

Rob: I didn’t know. I tested.

Andrew: Okay.

Rob: No, I just figured… I’ve done Facebook ads in the past and I had an idea that you could get clicks between, well there are a number of factors, but between 0.30 and 0.70 is completely doable. That’s that you can be a beginner and get in that range with this audience. And so I kicked it up and got a bunch of clicks and then looked at Google Analytics and it showed me how many conversions I was getting and it’s pretty simple math.

So it was about $3.50. There you can do easy math and say wow, I’m charging $50.00 a month for a product I don’t need and I don’t need a ton of conversions to make back this money.

Andrew: Cool. Got it. By the way, you and I grew beards roughly at the same time. Don’t you miss being able to do what I just did there?

Rob: [laugh] Stroking the goatee. Yeah. I do it. I shaved it last night. Maybe I should have left it on for 1 more day.

Andrew: [laugh] No. No competition or the beards.

Rob: Okay.

Andrew: Maybe I should ask if you tested that with a Facebook ad. Which will you click on more? Which will you trust more?

Rob: Right.

Andrew: On to the next. This is the one that I was jumping the gun on. Build out a full version but be flexible. You spend how long building it out?

Rob: It was, so I have a developer working for me at this point. In the past I would have built it myself but I’m working on so much other stuff that I had a guy working half time for a while and I’ll put him full time once we launch. It was about five man months to build it. I originally estimated three to four, but as you know it always expands.

Andrew: We got this image here. Why did you pick this image to represent this point?

Rob: With my original viewing of Drip, with that very specific value proposition that I said, I felt that all it was going to do is increase conversion rates. All it’s going to do is capture more meat. And as soon as people had a look at it -I let in one or maybe two users early on — they said, “I need to be able to configure this. I need to be able to add it in mobile. I need to be able to sent broadcast emails. I need to be able to…”

Suddenly it was turning into a different product than I had envisioned. So – and this is simplifying – right away I had to add settings that I really wouldn’t have wanted to add. I would have just wanted to default all these to what I had split tested as working the best. But people want more. You need to be flexible as a founder.

Andrew: How do you know where to stop?

Rob: It’s a really good question. It’s a hard balance. When I had folks using it who were of similar demographics – a lot of SaaS and software operators – they tended to ask stuff in the same domain. As soon as I got bloggers in there, they started asking for totally different stuff. And it was an obvious break between asking for more analytics and asking for something that would parse on our assess feed and automatically sent emails to the list. No, that’s just not even on the radar. It quickly became obvious what we were and were not going to implement.

Andrew: On to the next point, “Bring influencers in early.” You brought in a couple of sites, including this one. I wasn’t able to bring it up on Plan Scope, but Ambassador I see right here. I hope people can see it as I bring it up and bring it down. Maybe I need to move it. That will show it right there in the bottom. These two sites are influencers who started out with you. Then you got a phone call from a site called WhenIWork.com. How’d you get that call?

Rob: It was an email actually. It was a recommendation. As soon as Ambassador and Plan Scope started using DRIP they started spreading the word. That’s what I meant by, “Get influencers using it early,” because they spread the word. They have folks who listen to them. So when I work [??] basically said, “I saw it on Plan Scope and I’m interested in checking it out. How can I get in?”

So at this point here I am with basically an alpha product with two unpaid trial users, though they’ve committed to paying, but aren’t paying yet. I already have people I don’t know, and have successful fast apps like When I Work, cold emailing me asking to use my product.

Andrew: I’ve actually seen that with influencers. Even if they don’t end up using your product themselves they talk to so many people that, if they find someone who’s the right fit for your product, they end up telling them about the product. As a general rule do Influencers get the product for free? No, they pay.

Rob: I’m just not big on giving products for free, to be honest. I pay for everything. I have students who I’ve trained or mentored and advised, and they’ll build a product. I will absolutely pay for that if I can get value out of it. I will tell them not to call me specifically. I’ve had comps that I’ve rejected. I feel the same way. It’s like we’re all in a big community here. Where do you draw the line at comping and not comping. Do you comp someone so they spread the word? Are they now obligated? If it provides value for them they should pay for it. I know that I like to do that.

Andrew: You’re lean. Everything’s bootstrap. It’s all you own money. If the money didn’t go to this app, it might end up going to a vacation for the family. Sometimes I have dinners and drinks with people who are funded and they have the ability to pick up checks because of that. Their ability to do all kinds of stuff without it is out of this world.

Rob: We’re in the wrong business. No, I’m just kidding. [laughter]

Andrew: I don’t feel that way too. I think that they will often admire what you’re doing. They’ll sit around and talk about their lifestyle business idea, but it’s a whole different way of spending money. It’s a whole different way of having to be aware of it. Actually I have one more thing. So many people are trying to reach Influencers. How do you get through to an influencer and say “Here’s my product. Would you please just check it out?”

Rob: I’ll admit I stumbled into this one. Most of these other ones that we’ve listed are thing that I’ve done very intentionally. But this one I kind of stumbled into. I meet a lot of influencers at conferences to be honest. I mean, I [??] you just kind of get to know people. So I don’t know that I have a one day secret of how to do it. I didn’t cold pitch influencers via email and have this magically happen. It was relationships for the most part. So….

Andrew: Sometimes when I try software the person who runs the site will email me back and say, “Andrew, you might like Mail Parser. I just tried that out and the founder emailed me and said, “Hey, you checked out my site” and he started asking me some questions.

Rob: That’s cool.

Andrew: I just interviewed someone who had a similar experience too where he just was watching…oh, the founder of what used to be Tweaky. I think it’s now called Elto.

Rob: Okay.

Andrew: And he said he saw that – who was that – I forget which influencer he saw was using it. Ah, the founder of the Next Web. And he said, “I see you’re using my site.” I just want to check it out. That’s how we got on good terms.

Rob: That’s definitely the way to do it. Yeah. To do a lot of hand holding, really.

Andrew: He’s coming in. So, we got the influencers. Next big idea is we’re going to go to build your onboarding process. Onboarding is one word, isn’t it? I should just combine it.

Rob: Yeah.

Andrew: I like to combine it. I must have before, but Apple has its own opinion on how I should be writing things.

Rob: That’s funny.

Andrew: Thank you, Apple. Onboarding, what do we need to do? Why is onboarding even important? I’m just trying to build a profitable web app. Don’t I just need to get people in the door to pay and I’ll improve the onboarding later on? But first I need it to be profitable. Why do you think onboarding is important?

Rob: Well, because if you have this landing page and you’re building up an email launch list, you’re going to be eventually sending people this app and you want to take advantage of all that hard work of building that list. And if your onboarding sucks, people will not get value out of your app. They just won’t work through it and get that first “ah ha” moment, that first unique experience that just blows their mind.

And that’s what this onboarding is designed to do. I see how some people can think of it as maybe it’s premature optimization. It’s the cart before the horse, but if you don’t do this you will get dramatically less. Maybe in order of magnitude maybe it’s only 50% less people to get value out of your app and thus you will bleed customers out of the bottom of your file.

Andrew: Okay. I know that we had one point. You said, “Andrew, let’s remove it from the conversation here. It’s too far in the process, but the onboarding process is early on. It’s part of making sure that your launch is profitable. I asked for a screen shot of one part of your onboarding process that shows, that gives us a sense of what the process is like.

This is what you sent over. What are we looking at here and how does this help us understand your process?

Rob: Yep. So the thing to do if you’re looking at your own app and try to figure out how to onboard is figure out what are the one, two, three steps someone needs to accomplish in order to get value out of your app. And so with this app Drip you need to do three things. Two are required and one is optional. And so in the upper left if you look at the red X it says activate your campaign. That means that they’ve actually set up an email campaign with a couple of emails to be sent out in a sequence and that they’ve made their opt-in form visible.

Andrew: Okay.

Rob: So once they’ve activated that I know that’s happening. Step two which is next to it – let’s see. I’m lagging a little bit on the video.

Andrew: Oh yeah. Install your JavaScript?

Rob: Install your JavaScript. So they have to have a little snip of the JavaScript installed from Drip in order for the opt-in form to appear. Until they do that, zero value. They will cancel. They will either cancel during the trial or maybe they’ll make a payment and just say, “Oh, I never had a chance to set it up.” So that’s a critical thing. Every time they log in until this is done this is the screen they see.

And then the third thing is an optional thing. It’s setting up a goal so that they can see how many people actually become paying customers, and that’s more of a retention mechanism of hey, if they know that they’re selling three, four, $500 worth of stuff every month because of their direct sequence, then obviously they’re going to stay customers. So we want to encourage them right at the top…

Andrew: Right at the top and that’s what I zoomed in on, and I’ll zoom out to give people a perspective of how it unfolds. That is what’s important. You have your whole page right there, and you zoom them in on one step and you say, “First, I want you to activate your campaign. Then I want you to install the JavaScript. And then I want you to define a goal. That’s the onboarding and…

Rob: Yeah. And even below that, if you scrolled back down you can see that finished setting up your campaign, that’s the same thing, activate and setting up. It’s really guiding you too. You can get around this screen if you want, but it is urging you desperately to do that. In addition, there’s a sequence of emails being sent out to bring you back into the app so that you just don’t have to log in. Also if you’re just checking email you’ll be reminded as well.

Andrew: Alright. I was going to ask you about how you keep from going crazy as your onboarding, especially when you’re just getting started. You can’t do the perfect onboarding process. You get people to do everything, and now I see it. You'[re focusing on the most important parts and that’s it. In order. Most importantly activate is nothing else is happened afterwards second most important is install the java-script because otherwise you are not going to care and the third to find the goal alright lets go on to the next big idea here.

The next big one is there are highlighted right now using email sequence you have this four step sequence you said use it all the time I am about to bring up one of the page here from the sequence moment but what is this Can you give me some overview about this four step sequences

Rob: Like you said I use it to launch book conference and all my membership site multiple software products just of it is that it is four emails over question about two weeks and you are building anticipation is what you are doing and if you ever seen one of those long form sales letters that have you know, paragraph after paragraph text. You almost trying take a piece of that long form thing and spread it out of multiple emails.

Andrew: Okay

Rob: And so the first email will typically say hey you have been in the list for x months and we are going to be launching next week and here is a sneak peek bring up behind the scene what we have been up to. And then you presume what your apps what is the sense of your app value propositions you know whatever it is you found to resonate to people you start talking.

Andrew: Number one is you then on the list a long time here’s what we have been working on. Is that right? And you include screen shots anything else.

Rob: You like to meet them next week. You don’t have a chance to get access to the help.

Andrew: But this is the list of people who are in that landing page. Alright. Okay. We do that the next thing we do is begin the data launch but they can’t yet buy right.

Rob: That’s right, that’s right. I don’t actually give a specific date. I typically say next week you will hear from me with more details basically. An then number two is gets more specific and provides some additional details about the app more value prop more screenshots and then it says the press so you kind of built a case for the price so you kind of built a case for the price you haven’t mentioned price yet because you wanted to build value first.

Andrew: Okay.

Rob: And then, it says tomorrow at x you know, you need to time whenever you expect to hear from me and from there you have 72 hours to get a discount and no one else will receive this discount.

Andrew: Seventy-two hours.

Rob: Sometimes just a week.

Andrew: To get a discount.

Rob: Right, the time for dependence forty eight hours to a week and then number three is the launch view.

Andrew: The 42 hours to a week.

Rob: Forty eight hours a week.

Andrew: Is that make sense? Okay. Number three.

Rob: Number three is the actual the doors are open you know, the gates are open and this is a very short email because you would play the ground work by now. You’d have to show the app how it appears the value provides shown the price so there is no price shot and so the doors are open to get your specialty that only last 72 hours click link these below look forward to see me on the inside some think like that. So it is way shorter than the other too. And the fourth email you sent is just about twelve hours before the sale ends.

Andrew: Okay. I scrolled it up, 12 before and it’s to say, it’s about to close.

Rob: That’s right. No need of information here.

Andrew: Okay. You sent me to show people where is the page to emails. This is one of those emails which actually is little bit hard to see I am in strain but is it okay? I give these to the audience.

Rob: Sure.

Andrew: I could see I see screenshot on here I can see details I see multiple screen shots. Okay.

Rob: This is email number one. You see it very long it really tiring to lay ground work of what app does? How it’s valuable? You noticed, no price is mentioned, no specific launch date.

Andrew: Okay.

Rob: That’s when, this is the email sequence getting started our whole process before allowed us to build the mailing list now we are going to send four emails to this list to get them good. Let’s go to the final point then, this is launch slowly so you can hit the rate of your product. What is slow launch for you? So our email list was 3,500 people by the time it came around to letting everybody in. I was letting them in. Early on I let in 300 at a time and then I started letting in 600 at a time once I had confidence that we could actually on-board that many people successfully.

Andrew: And this is after you did the four series email or is . . . You open it up to a lot of people with a discount, any number of them could come in from the 3,500.

Rob: Nope.

Andrew: Oh no.

Rob: I did the four series email over and over and over to groups of three to 600.

Andrew: Oh, I see.

Rob: That make sense? So about every three weeks, which is how long a trial would run, we had a three week trial. Every three weeks I would send this forward sequence email to the next group and let them in. It was in order of sign up so I started early on and just moved all the way through.

Andrew: Why not just email everybody and say, “Hey, my thing is ready.” and just get all of them in at once?

Rob: Yeah, that’s a good question. There’s two reasons not to do that. It’s a really bad idea actually. There’s two reasons. One, is because your on- boarding sucks still. No matter how good of a job you think you did, you’re going to tweak the crap out of it until you get it to where you’re getting 50, 60% of people who come in actually sticking around.

Second thing is, you don’t know if you can handle that many people period. 3,500 people is a lot. That’s an enormous support burden. As soon as you, as a bootstrap company without a lot of support folks, you just can’t handle the burden. And the last thing is, as, so I guess there’s three things, as you let people in they’re going to start asking for feature requests and all types of stuff. It gave time to build a bunch of those and therefore retain more of the next group. We saw retention rates go up in every group because we had just had a more mature product. It bought us time.

And I call this the slow launch. I mean it worked out really well. It took us about 90 days to launch to 3,500 people and one of those months I was in Europe and I was barely working. By that time it was the third of the three months. My team, who was at that time just two people, one support dude and one developer, we knew what to do. Everything was set up to do it automated.

Andrew: And you just kept doing it over and over and over and over.

Rob: We got better each time, yeah.

Andrew: Three hundred emails got you, at one point, 30 replies?

Rob: Yeah, that’s right.

Andrew: What does that mean, a reply? I mean, people responding or people going to the site?

Rob: The first that was email replies that I got and it was that first email of that first four email sequence to the first 300 people I sent that out just like you saw it and 30 people replied and said, “Can’t wait to see it next week. I’m loving this. Are you going to integrate with apps?” There were questions, but there was a lot of encouragement and that showed me right there, wow, people are engaged to get 10% reply rate on a list that was months and months old was a good sign for me.

Andrew: All right, I think we’ve got everything. Who else does this work for? This whole process that we just went through, you had other people go through it, it’s not just you.

Rob: Sure. I don’t know that everyone has done every single step of it, but I know, especially the launch sequence has been used, like I said, with a ton of my products. Pretty much everything I do now follows this same basic thing. Reuben Gomez with BitSketch early on used a version of this. A friend of mine, Phil Dirkson, he has a Word Press pin it button plug-in, he uses this sequence. A lot of people in the academy, the Micropreneur Academy, my membership website, use it just because it’s something that I espouse pretty heavily.

Andrew: I called it. This is my name. How to profitably launch a web app.

Rob: Mm-hmm.

Andrew: Is it safe to say because this has been used for book launches and conference launches, that it’s just how to profitably launch?

Rob: Yeah. Yeah, I mean, it is.

Andrew: Am I, not safe? I don’t want to just be safe, I want to be honest. If it’s not honest and it’s more narrowly targeted towards web apps, perfectly fine. But is this something that will work beyond web apps?

Rob: It will, absolutely.

Andrew: Okay, yeah, all right. How to profitably launch a web app, an eBook, a conference. And thank you so much for doing this. The site, if people want to go over to it is Getdrip.com. Getdrip.com, go in, play around, check it out. And if people want to be a part of your community, if this isn’t the right tool for them where do we send them?

Rob: Yeah, if folks listen to podcasts, startupsfortherestofus.com is a place I talk every week for about 30 or 40 minutes about pretty much what we’ve talked about today. It’s very nerdy and very start up and marketing focused, but it’s what I live and breathe.

Andrew: I’m very nerdy and very start-uppy focused, you never have to apologize for that. Thank you so much for doing this. And to the nerdy and start up focused person who’s out there listening, thank you for being a part of this. If you’ve used any of this and it has been helpful, if you’ve used any of this and it opened up ideas let us know in the comments and find a way to let Rob now. Rob, what’s a good way for them to contact you and say, ‘Dude, it worked.’?

Rob: Twitter @RobWalling.

Andrew: I think that’s how we actually ended up doing this program. I saw you talk about something on Twitter, I said, ‘Would you be interested?’ And actually the first thing I said was, ‘Why didn’t we freaking think of this internally?’ Why do I have to discover this on Twitter and I think we might have gone back and forth on Twitter, but thank God for Twitter. Thank you for doing this program. Thank you all for being a part of it. Go use it and tell me how it worked. Bye.

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