# How to Build a Business That Runs Without You

Channel: Alex Hormozi
Video: https://www.youtube.com/watch?v=TLpLmhWqKEU
Duration: 1 hr 41 min
Language: English
Words: 20526
Transcript page: https://viewrankai.com/tools/youtube-transcript/TLpLmhWqKEU

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[0:01] Aren't we live? We are live. We live? We live? We live? Test test. Check check. 1 2. Is this the mic that I'm speaking into? All right. Well, salutations everyone. Happy um What did I say? Thursday? Happy Thursday. Some of you guys have been asking for a schedule for us to do these lives and I am a pain with those types of things because I hate fixed schedules. Just a

[0:32] personal personal thing for me. Um but right now I'll give you the loosest commitment of all time, which is that around midday on Thursdays is when we are going live. Um that is when I do my recording, whether it starts at noon or noon 30 or 1 or 11:30. No idea, but if you're like, "Ah, around the midday of Tuesdays when,

[0:50] you know, Alex will go live." Now is the time to do it. With that being said, uh we will model what has worked in the past, which is uh a two-part segment, if you will. Part one will be I'll make kind of my next YouTube video with you guys. Um so if you enjoyed that, which I think some of you guys did, uh I'll make that video. Uh and then after that, open up for questions. Kind of like a a lecture and then a Q&A, but lectures have such a negative connotation. I don't I don't

[1:15] really like the connotation in general. Um do a live with Sharon. I will consider it. Indonesia, I'm glad that you are all here. Uh Um yeah, so we'll be taking calls later uh from business or business owners Bangalore. Hungary. Wow, we are international. Nairobi, Kenya. Germany. Geez. France. Kenya. Now are we just naming countries? Is

[1:41] that's what's happening right now? Nigeria, Belarus, South Africa, Ghana, Austin, Texas. Okay. Ismael. All right, we got we got one American here. I'm glad that I have just become an international, you know, I'm like David Hasselhoff. Just huge in Japan. Uh This is actually nuts. I had no idea that um that that y'all were were from all over the place. This is actually kind of

[2:03] nuts. That's cool. Thank you for grabbing the book. I appreciate it. We'll talk about that. Um wow. Wild. Okay. So um let me get a let me get a W in the chat if you're uh a business owner. All right? If you're a business owner, put a W. Um if you are not a business owner, put a

[2:25] N. There we go. Oh, good. Okay, good. We got business owners. Okay, I feel a little better. Uh okay, well then you will absolutely love the point of the the talk today. Um and so you guys can see it getting made in real time in Santa's Santa's workshop. Not making myself out to be Santa cuz

[2:44] that'd be a bit weird. But um all right. You guys good? Rock and roll? All right, let's do it. Okay. There's one belief that keeps most entrepreneurs trapped and unable to grow. They stay stuck. And so I've been building businesses for a decade and a half now. Today my portfolio at acquisition.com, last year did over $250 million in in revenue and when I started, I made the same mistakes that everyone makes. So I used to think no one can, you know, grow my business like me. Um if you want it done right, you got to do it yourself. Uh no one can do it like I can do it. Um never let anyone

[3:19] else handle the money or never outsource sales, never outsource marketing, never outsource anything, right? It's not all these different people who tell me these things and it's interesting cuz they were a little bit ahead of me in business and I think, "Oh, they must be right." But they were just limited business owners like anyone else. And it wasn't until I broke that belief or that that system of thinking that I was able to build real companies. Ones that make money even if I'm not involved in the money making. And so in this video, I'll show you five steps that will let you hit your money goals uh by building a

[3:46] business that runs without you or rather that can create value without you being required. And so conceptually, this is the big idea. A business that requires you isn't a business. And I'm going to say that that technical says anything that generates a profit with an LLC is a business. But in terms of the intention of the vast majority people who begin a business, it's for freedom. And then what ends up happening is that you create more liabilities, more dependencies, you lose uh your optionality, you lose your freedom, and you now somehow are have

[4:17] you you have a job you cannot quit. Tough, right? And what's interesting about this is that I want to talk about transitioning this thing from an Iron Man suit where it just enhances your ability to do, but still requires you to run. Not like the newer Iron Man suits, which didn't require a person. Let's not get into it. Um but was actually va- the

[4:37] businesses are valueless without you. All right? And if you can get the Iron Man suit to become upgraded so it can run and go fight the bad guys or make the profit without you, then it becomes something that is inherently valuable to anyone. And once something goes from valuable to you to valuable to anyone, it means it's something that other people would want to buy. When it's something that other people want to buy, it's something that is valuable and inherently has worth. And so let me give

[5:01] you some simple math here. Let's say you have two businesses, all right? One that does I'm going to use simple math. You can remove zeros if it hurts your eyeballs to think of more zeros. All right? But let's say you've got a $10 million year business over here top line. $10 million business over

[5:14] here doing top line. So 10 and 10. Okay. Which business do you want? Well, you need more information, right? Of course. Now let's say that both businesses are $10 million uh top line, $2 million bottom line. $8 million of costs in both. Now which business do you want? You still need more information. Of

[5:29] course. Now let's say that of this 10 top 10 top line, $2 million bottom line businesses, this one the owner is running 80 hours a week. Is like every day of the week they're working. Uh and is required to work. Different than choosing to work as a side note. But I won't get into that

[5:44] for now. The second business, the the owner never is there and just owns it like you would own a stock on the stock market. Now think about which of these business owners is richer. Now at the onset, you'd think, "Oh, well, they're both the same top line, both the same bottom line." But the

[6:01] difference is actually very dramatic. And so let me explain. So this guy, first guy, very frustrated entrepreneur Fred, he makes $2 million a year and then he pays his 50% taxes and he makes a million bucks left over. Then he lives his li- his living expenses, whatever. Maybe he's got a family. Okay. He takes home five uh 500,000 he can put away. So he's getting richer at $500,000 a year,

[6:21] roughly, in terms of his net worth. That's a slow way to accumulate cash. Now don't get me wrong, $500,000 is a lot of money, but I'm just saying big picture. Now this guy, let's call it so we had frustrated Fred and let's call it wealthy William. Hmm, sounds very, you know, fancy fancy. So this guy has an entire team that actually runs the business uh day-to-day without him. And so he just owns it like

[6:41] he owns the paper stock of a company. And his business right now trades at six times profit. Meaning somebody would be coming would be willing to come in and write him a check for six times $2 million, which is $12 million. And so of these two guys, this guy adds $500,000 to his net worth every year. This guy has a business that is worth $12 million. This guy's way richer. But check this out. Now let's say that both of these guys work, you know, figure out a way to make the business make an extra $500,000 a year in profit. So they go from 2 million to 2 and 1/2. 2 million

[7:13] to 2 and 1/2 in profit. That's what happens here. Now here's where it gets extra sexy. This guy, after he makes his extra extra 500,000, let's say that uh he pays his 50% taxes and that $250,000 after taxes goes straight to him. So he goes from taking home 500 to 250. He doesn't doesn't change his living styles. All right? So he he all the extra money he's he just he saves. So he starts making

[7:35] $700,000 $750,000 in savings per year. Okay, after taxes. Neat. This guy, the $250,000 Sorry, the $500,000 that comes in after taxes, he gets a 6x multiple on. And so he actually gets another $3 million added to his net worth. So his $12 million becomes $15 million. And this is the game of wealth. This is how you get wealthy. It's very very inefficient to become wealthy off

[8:02] of regular income. Because it's taxed to oblivion and you're it it just there's zero multiplication that occurs on it, right? You don't get 10 years of work, you get 1 year divided by two after taxes. So the difference is like a 20x difference between a valuable company that can sell for 10x versus one that can't. Now hopefully I've sold you a little bit on

[8:22] the idea of why this is worth doing. Now let's walk through the steps of actually doing it. So the first step of actually taking it from frustrated Fred to wealthy William is you do a self inventory. So what that means is that you actually list out everything you do. Literally all of it. All right? And then you turn each of those uh checklist items into something that someone else can do. And you want to get as granular as humanly possible. And this is how you get out of the day-to-day without breaking the machine. And so I'd say the step even before this, if you don't even

[8:51] know what you do, what we have people do is run a time study. So time study, real simple, you don't need any like fancy technology for this. You just take an Excel sheet and you write times on one side every 15 minutes and you simply put in a timer. You turn your timer. And every 15

[9:08] minutes, you just note what you did. It's very simple. Now some of you might think, "Wow, I could never That sounds like so much work." It's like you literally have a timer and then you write one word down every 15 minutes. What's crazy about is it'll be the most productive week of your life. Every time I do a time study, I think I should do this every single week and I don't. But you certainly will be really productive because you're going to approve of

[9:26] yourself that you're super productive. I'm just telling you. That's what will happen. So here's You can also, by the way, do this with your team. If you're like, "I have a key man risk over here. This person is super valuable to business. I have to have less dependency on this person." You walk through this process. So you do a time study, then you get the list of stuff. Great. Now we have this list and we can break it down into component parts. This is the kind of list of

[9:47] everything, right? And what we want to do is we want to start building little processes or installing people. So it's either a project, a process, or a person that's going to install it each of these little slots next to it. So, you have all the list of things and then you have all the people or process or project. Okay? So, a pro- project is a one-time thing, which sometimes creates a process, or you have a person who does this thing on a continuous basis. And you probably have people on your team who are underutilized. Some of these slots you can just be like, "I think Angela can do

[10:16] this. I think Tommy can do this." And you can start slotting them. Then you'll have your red, yellow, green. And so, my red My green is I can give this to somebody. So, I'm going to look at my team, teach them how to do it. They get this. My yellow is there's a one-time uh project or process that I have to install here, but I can do it and I know how to do it. The red is where it's something that I either don't know how to do or there's a person that I know I need to have, but I don't have. And so, I solve these in green to reds because

[10:42] the greens you can get out quickly, the yellows is the next level that you can do with a little bit more time, and then the reds is like once I've done my greens and yellows, I can move on. Now, the way to think through this is having So, in in in addition to this list, it's like, "Okay, these are the things I'm doing." There's also the decisions or deciding on. Right? And so, as these this time of documentation comes up, we want to start saying, "If this, then that." These are rules of behavior, right? They're decision trees for common scenarios. And I'll give you an example. So, when I uh So, uh

[11:13] Procedure Labs was the first physical products business that I started, supplement company. And I remember uh this the manager of the sports team saying it's really hard to get new people on. And of course, I like lost my I was less patient than I am now and less polite. And I was like, "How hard could this be?" I was like, "Change my Change my uh Change my address, change my card, change my flavor, change my billing

[11:34] cadence." I was like, "Cancel, refund." What else do we have here, right? And when I said it like that, uh you know, Leila Pingleman was like, "Don't be rude to people. They're trying to win and you are making it look really bad and don't do that." So, I will tell you the story cuz that's what happened. Um but fundamentally, it's just if this, then that. Somebody will come in and

[11:54] say, "I would like to change my card." This is how you change your card. Someone will say, "I would like to change my flavor." This is how you change your flavor. "I would like to change my billing cadence from once a month to every 2 months." This is how you change your billing cadence. It's just if this, then that. The more complex the role, the more one-off the scenario. The more duplicatable the job, the more people you have in a specific department or function, typically the

[12:13] more standardized the questions become. All right. And so, once we have that, then we can say, "All right, there are all these questions that come in. Some of these questions require approval. Okay, somebody has a bad night's stay at her hotel. How much money uh do I normally give them in credit or do I give them a gift card to our restaurant or something like that?" Well, we decide that under $500 or under $1,000 or under $10,000, depends on the size of your company, under $100,000 sometimes. Uh this person can act uh independently without your supervision. Now, of course, you still have financials and if the end of the month something looks out

[12:48] of whack, you can go check it out. So, I'll give you an example of that. So, uh we like to over you know, overdeliver and have people have an amazing experience if they come out to our headquarters. And so, I let people do surprise dinners. And so, my team like if they see two or three people that they think would like drive well together, we tell them, "Hey, we made a reservation at this nice place. Uh go there." And so, it's like a nice surprise and delight thing. And so, then then I got like the bill at the end of the month and uh we were

[13:18] spending $250,000 a month in five-star dinners. And I was like, "Well, guys, listen. I mean, I love uh our our clients, but the question is is this actually generating true value?" And so, it it turned out that that was not something and when we removed that thing, it didn't change anything about our our happiness scores or reviews or anything like that. So, I was like, "Okay." So, I say this because there's going to be a feedback loop and you're going to mess up. But understanding like what is the amount of money that I'm let I'm able to let

[13:43] someone make a decision on their behalf? And you can also put a cap on it. So, it's like you can make decisions under $500 in total up to 5,000, right? So, that gives them 10 shots to mess up uh you know, fix something uh in the business. Now, underneath of that, this is where having kind of s- clear scorecards and KPIs around these things um help because if we're going to unlock some sort of decision tree, we want to also make sure that it's unlocking some sort of value. And so, I'll give you a really powerful frame that you can talk to anybody in the business with. You can

[14:13] say, "How do you, in your role, make the company money?" It sounds like a very simple question. Like we should People should be able to know how the business works, especially as it relates to their job. If you ask this to your team today, many of them will not know the answer to that question. And that will frighten

[14:32] you. But fundamentally, like some of them are easy. Sales, uh people come in and I get them to give us money and if they give us money, we make more money, right? That makes sense. Great job. Okay. But then you have some ancillary roles. Like what does finance say? What does tech say? What does media say? What does market So, there So, when we make So, my ask my my my my guy who's behind the

[14:56] camera, right? So, of course, marketing is something that generates money, but you don't do marketing. What do you do? I hold the camera. Okay. So, then what ways do you make us money, not the marketing function? This is where it gets more interesting. So, if I had this camera person and he he or she, right? Uh uh Slow down. He or she holds the camera, I say, "All right,

[15:20] what does bad camera work do?" Well, bad camera work would be a waste of time, right? Of the entire team. Number two, the media would perform not as well because it would be off-center or you know, it would just the the lighting would be off, whatever the hell, right? Um on top of that,

[15:37] we would I mean, we'd waste the footage. Trying to think what other things would would it cost us in the business? We probably have uh equipment that would be ill-fitted. Uh we wouldn't save the stuff that we'd have. All of things are are huge cost centers. And so, you can reverse each of these kind of potential mistakes into these are the things that we have to make. What percentage of the

[15:56] time uh was everything saved correctly? Was it named correctly in the system? Saved to the correct drive? Uh time-stamped appropriately? The lighting and or camera was set up correctly and it was on time so we could start at the time we said we're going to. If that's 100% of the time, it's like, "Dude,

[16:09] you're making us money." And here's how. And I think that when people have the understanding of how what they do relates to how the company makes money, it gives more meaning to like what impact. People are like, "I wish I had more impact." It's like it's usually because they do it. Like if you have a

[16:22] job in a company, you have an impact. You probably just don't know what the impact is. And so, decide and explaining that to somebody I think is is a very big unlock because they see the value that it that their role provides in the overall work. All right? Now, before you have this cuz again, we're trying to replace ourselves here. We have our little scorecard, we have our KPIs. Let's say you were the camera guy, right? The next thing is we have to have some sort of test to graduate the person, which is can someone 80% as you get 100% of the result? And the key

[16:50] learning that I had, this is a belief that I had to have broken, was that number one, there are people who can do like no one's going to ever be able to do it as as well as you. Not true. Um no one's going to be able to do it as well as you with, you know, 1/10 of the work, with 1/10 of the practice or reps, but every human is replaceable in my

[17:08] opinion. Um and we know that because humans have replaced all humans since the beginning of time. Um but we can know that on a shorter time horizon if they only learned all the things that you learned the right way without learning all the bad mistakes, they might be able to get to 50% as good as you right off the bat. And so, a a a belief that I would like to switch for you, I'll give you two. Number one is if some if I can do it right with part of my time, someone else can do it better with all

[17:41] of their time. So, you might be able to do a five out of 10, which you consider to be 100 because it's 1/10 of your time. But if someone spent all of their time doing, they sure for sure should be better than you over time with enough practice. And so, that is the first one. The second one I forgot what I was going to say, which leaves us very naturally to the second big bucket of things. So, the first one, big picture, is we get a big inventory, we create the decision trees so we have our big list of stuff, we slide in the people we have, what's left

[18:09] over, we then have our our our our scorecard that we can make for people, we have our decision trees that they can decide up to with certain amounts of money, and then we have a test at the end, which tells them uh whether they passed or not or they're good enough. Okay, here is the second belief I just remembered, which is you can outwork

[18:26] anyone in your business. You will not be able to outwork everyone. And this is something that it took me too long to learn. I kept I mean, you can imagine me. I pride myself in my work ethic. But I can't outwork everyone. And so, the longer it took me to realize that, the longer it limited my ability to grow. I could do a mountain of work, but I can't do Mount Everest. That

[18:47] requires more hands and more shovels. Which brings us to number two. So, you want to start trading doing for managing and leading. So, here's the simple math behind this. Like there's actual math here, which is let's say you swap 200 hours a month, so you know, roughly 50 hours a week of work for doing 20 hours

[19:08] of managing. So, now you go from 50 to five. So, you have a a 10th or 10x improvement in leverage. And you replace yourself again by hiring a manager the next time and then you trade the four hours for one hour, right? And so, you This is basically how leverage occurs through labor, right? Is that you have to turn your effort into an

[19:31] organization that produces without you. Right? And so, employees or AI in the future, right? Make a fully functioning enterprise that can continue to scale. And that's kind of my my litmus test is the baseline is does it burn down without me? For many of you, if you just get to here, you'd love your business 10 times more. Like I can actually leave for a month and come back and it didn't burn down. Thank god, right? But where it gets really nasty and really exciting is where you can leave for a month and when you come back it's in a better position than it was when you left. That

[20:00] is a business that people want to buy. Because what it functions as is essentially a faster growing annuity for an investor which gives them a big multiple which is why they pay a lot of money for it. So let's walk through what this actually looks like. So the first there's kind of three steps to it. So you'll shadow train. So this is where

[20:15] they watch you do it. The next is you supervise them doing it. So they do it in front of you. So you do it in front of them. They do it in front of you. And then after that you kind of just support their independence and you're available but not involved. So it's like I'm fully available. You can hit me up whenever you need any anything. And then what happens is in the beginning they're required a little bit more ad hoc calls consults help. And then over time if you have a competent employee those decisions get automated back down to them. Right? And so that's when the full

[20:44] handoff occurs is that they own it completely. And again initially I'm cool with 80% sometimes 60% as good as long as I have a clear path to them getting better. And I'll give you a little pro tip. I over I used to measure employees by how well they started. I measure employees today on how fast they improve. Because if you look at two employees, right? Let's say somebody starts here and someone starts here. If this person's flat and this person's like this, I know that in 3 months 6 months this guy's going to pass this guy. But then what happens another 6 months? Right? And so

[21:19] sometimes it's worth taking someone who's a little bit less experienced or has fewer inherent skills cuz they didn't have as much time because they're able to learn faster. And like so intelligence I measure as rate of learning. And so I will rather have a more intelligent employee who learns faster than a more experienced employee who learns slower. Just something that I have learned. And it depends on the role obviously. But um I would say that I've had a big shift in terms of how I think about talent. Now the goal here is that we want to move from doing the work. This is the big picture of point two. Move from doing

[21:51] the work to managing people. Right? We focus on recruiting A players not doing A player work. We focus on the business aka strategy prioritization not on the tactics of what we need to do next or what we need to do today. And so your job becomes attracting talent and aligning incentives. And so the ultimate test for you is can you take 3 months

[22:14] off and have the business grow anyways? Like this is the easiest especially for those of you who are brick and mortar. This is super important. If you're a brick and mortar a lot of you guys want to get my second location want to get your third location. This is the the simple simplest litmus test. If you can leave it alone like your phone doesn't like your your phone doesn't ring. And I'll tell you how to do that in a second. Right? I call it

[22:35] the phone test. I'll tell you later. Um but 3 months later it's bigger. Great. It's the same we have to figure out a way to get it to be able to grow. Unless you're in a super cap market where there's no way it can grow. Fine. But the vast majority of businesses can improve can grow year over year over year if you have a good business. And if it's flat the thing is is that you still have some sort of magic over here. As soon as the eye of Sauron moves sometimes if it's flat it's going to go down. Now all of a sudden you've got double the liability

[23:00] double the debt double the overhead half the talent because it's spread and now you have more risk and less profit. No bueno. So this is why it's so important. You're like man that's never going to happen. It's like right that's why a lot of people shouldn't have second locations for much longer than they

[23:13] think. So why overexpansion is one of the number one reason people go out of business. So um zooming out I want to So as you're like okay how do I find these types of A A A players, right? Is we want to look for people who describe their role in metrics in as much detail as humanly possible. Right? So I can measure someone's skill in any endeavor based on the quality and the quantity of metrics they track. So if I said and I'll tell you I'll tell you the first time I had like a a great example of this. So the first time I hired a

[23:43] really good HR professional. And I've had plenty of them in my history. But um the first time I hired a good one. Um she asked me questions on the interview. She was like so what's your cost for acquiring talent? And I was like I don't know. That's a good question. I should know that. She was like what's your time to fill? And I was like wow I didn't I didn't really think about it. She was like okay what's your two-way fit in terms of what percentage of 90 days later do both the employee and the manager say that it's a 10 out of 10 fit? And I was like

[24:11] don't know. And so she starts giving me all these different metrics for for the talent side of the business um that I had no idea about. I was kind of in the uh the internet marketer world of oh uh if I have a low refund rate therefore my product is good. It's kind of like I had that on the talent side where I was like oh which by the way that is not how you

[24:31] know you have a good product. Just FYI. Um I was on the talent equivalent of that of like well you know I mean we haven't had any lawsuits lately. It's like duh you think? Uh that's probably not a good way to know if you have a good culture or good team or a good talent talent management um process. And so again the quality and quantity of metrics. Now this particular HR professional was uh a leader in turnarounds. And so she knew all these different metrics. And then obviously I learned all these

[24:56] things from her and then discarded her. I'm kidding. Uh but I learned those skills so I could apply them. And fundamentally that's I I try to find people who can teach me things cuz that's like the best thing in the world. It's like you pay someone say hey you know way more than me. Go do that in here. When you're starting out though it's hard to afford those people cuz those people don't want to work for you

[25:10] or you can't afford them or both. Right? Now I'll give you a couple a couple rules of thumb that that also took me too long to figure out is that um number one uh I would interview as interview more people than you think you should. And I know how it costly this is as a business owner so you want to stack as many as you can. Also I highly encourage group interviews um pretty high up once you get into director and executive it's tough. But like anything that's like front line to maybe even manager um you can have group interviews cuz they'll save you time and

[25:39] you'll very quickly be able to to read people's vibes. And so the idea here is that um I'll tell you I'll tell you a story. Um for school Sam interviewed 600 developers. 6 100 developers to find our co-founder Daniel the CTO. 6 100. So think about one two three four five. Okay so that's just me naming numbers. Now I feel like it took a long time. Now imagine each of those represented a 30 to 60 minute conversation. And then imagine that that's over a year of those conversations. It is brutal. But when you do that what happens is you start to get a lot of nuance of who's good and

[26:23] who's not. When you talk to 10 people who say that they are um a manager uh a sales manager you're going to get a way better idea than when you talk to one of who's actually legit. When you talk to your 50th person you already know who's got game. And so what happens is it starts to tune your picker. Because fundamentally the reason I think we've been able to grow businesses faster and faster and faster with each each next company that we start is because pattern recognition

[26:49] um becomes one of your biggest assets. Like some people call this wisdom or whatever you want to call it. But fundamentally it's just that I've had a good sales manager. They looked like this. You look like that person. Therefore you have a higher likelihood of working out in this role. But to figure out which sales manager was good I had to hire five different sales managers and wait 6 months or a year on each one of these before I finally found somebody who was good. So that's the thing is that if you look at every role in the business and again this goes from the ground up. So a front line support

[27:18] rep a front line sales rep a front line media editor whatever. And then all of a sudden it's like okay this starts to work and then your business starts to grow. And then you're like I've never hired my first level of management. So you got to figure out what a good sales manager good media manager good all these roles. And then after that you're like okay well that starts to grow. Now I've got my director level. And so each of these levels you keep putting these people in until eventually you know what it looks like when it's right across an entire org. And so what happens is when

[27:40] you start really building businesses you're not actually building the business. It feels much more like assembling the people who then build the business. Which leads us naturally into the third um of our little buckets of what do you do to remove key man risk. And I'll give you one more little tip. When you're doing all those interviews if you aren't learning from the person especially if it's a leadership role or above waste of time. Like if if if you're not learning from them then it means that you're going to have to teach them which means that not only does this person like it means that you're going

[28:10] to have a increase like your life's going to get worse before it gets better which sometimes it's required. But at a leadership role and above that person should be teaching you. And so there's no point in you trying to go in and train them. They should be like this is what we need to do for our financial function. You're like

[28:25] great. Love that for us. Go do that. Right? Okay. Brings me to the third point which is you want to remove yourself from marketing. Now marketing is a larger term but fundamentally acquisition. Right? If the business relies on you to get customers which is very common in founder led companies. Like you're the breadwinner. You're the promoter. You're the one who brings the business in. Um this is one of the biggest risk factors in business because this is why you can't leave. And when you do leave the revenue goes down and it's very scary because everything relies on you. And what's tough is that it it feels good in the short term to

[28:57] have everyone rely on you. Right? It feeds your ego makes you feel important cuz you're like I'm in I'm irreplaceable. I'm a special snowflake. I am a unique human being with unique skills and therefore I'm important. But the idea is that you actually in order to make an important business you need to become less important. Like if you want to help more people you

[29:20] can't help more people. And so for me obviously like I've had plenty of businesses that were face driven. Um but if your face gets the customers you are the key man. And so this is kind of the three step simple way of kind of getting out of this. Well easier said than done. But fundamentally this is what we do. So number one

[29:41] well let me let me zoom out. There are several different ways that you can install systems into the business to capture media and marketing on your behalf without it having kind of quote direct to camera founder led ads, okay? So, I'll give you a couple of them. So, one of them is that you probably have some sort of place where your customers gather, right? Maybe it's an online community like a school or

[30:07] whatever. In those communities, you should have a standard process weekly where you screenshot people saying nice things about you. Then all of a sudden all those screenshots become ads that get pushed to you every single week. The next thing is having incentives for customers to leave testimonials. So, you could have things that are unlockables, you can have certain amount of credit, you can have uh tiers of service, you can give them trials to which by the way is a double whammy. So, you give someone a trial of a higher level of service if they uh provide a testimonial, it allows you to ascend customers who love your

[30:35] stuff and get more marketing. Bingo, bingo. Um the next one is something I call lifecycle ads, which basically you probably already have functions in the business that already occur, which is you probably record your sales calls, hopefully. You record your onboarding calls for, you know, a new customer. Uh you record delivery checkpoints and maybe if they have a good experience, you would record some sort of testimonial from them. Great. Now, the thing is is that means that all this stuff already exists within your business. And so, when you have a testimonial and someone says I did these guys are great, you just say cool, we're going to look back through our CRM, look

[31:05] back through our scheduling and pull the recordings from their sales call to their onboarding to each of their touch points. And then what happens you can compress that into a timeline that also becomes another advertisement. Pretty sweet. Cuz instead of saying I was here and now I'm here, show them here of them actually being scared, being not sure, hesitating before signing up, and then all of a sudden getting this amazing outcome. The next thing you probably already do is you have some sort of key moments of client deliverable, whether that's like you do a ribbon cutting or you do a reveal of their new kitchen or

[31:35] they get on the scale if they're losing weight or there's obviously with businesses there's revenue or there's monthly financials or whatever. There's always moments where something can happen that is has emotive, right? Emotive as in emotional. And so, what we want to do is just put a a process in place where we incentivize the person document that moment uh to then create more collateral for us. And so, hopefully you're getting getting an idea here. Like another process you can put in place is that your customer support, if you have a customer support line, is that you can pay a customer support person five bucks for every

[32:03] person that they get like a mini testimonial in chat format from, right? You resolve something. Oh my god, these guys are amazing. I love this product. It's it's fantastic. I highly recommend it anybody. Great. Screenshot that. Right? And I'll give you five bucks for every one of them you do. I'll give you another one. Are you you guys get like I have done this

[32:19] before. I'll give you another one. All of you guys have Google reviews, Yelp reviews, TrustAdvisor reviews, uh Amazon reviews. It depends on where your product sits, but like you probably have some place where people have reviewed you, right? And think here's what's crazy. You probably have hundreds, not like one or two. You probably have hundreds of like local businesses have a few hundred reviews. It's not like uncommon to have this. What's crazy is that those reviews

[32:44] rarely get made into marketing. Why? Now, here's an even crazier one. You can take the hilarious one stars and take a page out of um Liquid Death's marketing book and just say like, "Hey, if you were one of these people, you won't like our stuff." And if it's if it if it clearly casts out the wrong type of person, it will pull in the right type. And it's also hilarious marketing. And so, I think I just gave you six or seven different uh processes that you can install in a business that all get ads and marketing to come to you. If you wanted to go even

[33:15] further, you could build an affiliate program out. You could use TikTok Shop and sell widget and then white list those ads in the modern era and use those as your marketing, right? All of these are things that you can do to remove your face from your market. All right. Now, competition. Um I'll skip that one. Okay. So, the next thing that we think through is stress testing this. And so, if we're zooming all the way out, we put our big list together, we red yellow green it. We then created our decision tree. We created a box around how much money they're able to have uh make decisions on. We have our

[33:51] scorecard. We test them to make sure that they actually pass the KPI. That's step step step one. The step after that um that we did is okay, well now we need to increase the amount of people in the business for all those reds. So, we have to interview more people. We have to look for people who have higher skills. We have to be willing to get taught uh by these people, which is by the way the cheapest learning you can do is get people who are way out of your league to teach you about the role and you learn a ton in the process of also finding great

[34:17] talent. Ask those people how what they do turns into revenue for the business. And then finally, actually take your 90 days off and something will break, but you continue this process until eventually nothing breaks. And then once nothing breaks, you actually have a business that can run without you. All right. So, with that being said, um

[34:43] how would I go about this? When you're in a credibility based business, how would you go about building authority fast enough to win bigger clients? Okay, that sounds like a random question. Okay. Um fiction authors. Where are we going? Where what are we talking about here? We're talking about key man. What is 67?

[35:05] 77? It's a name 67. Oh. 67's like mediocre, right? It's honestly has no meaning behind it. It's just Oh, really? Yeah, it's just people say 67. Okay, word. Well, good to know. All right. So, um Hi Alex. Okay, Saif Ali. So, I told you guys I would I would uh we'd open this up for the shot. Okay, they just moved my uh my question and answer fire mark. But while they're pulling that up, I'm going to zoom all the way out for

[35:34] you guys.

[35:39] Big picture. The reason that your business one, isn't as big as you want, two, isn't as valuable as you want, and number three, doesn't run without you, is because you're not as good as you think you are. Now, before yeah, I know that that sometimes hurts people's ear balls. Um but let me explain. At the simplest level, business really is take the absolute best people in the world and get them to work for you. So, some of you guys have probably heard of Jony Ive, right? Jony Ive was like one of the best designers, he worked hand in hand

[36:14] with Jobs, but Jony Ive was an employee. All right? And I bring this up to say, if you had to design a new product, Jony Ive would be the guy that you'd probably want to build and design it with you, right? The problem is that Jony Ive only wants to work for somebody as good as Steve Jobs, right? So, the real leverage of why Elon has been able to build the size

[36:34] companies he is is because he's Elon. And so, the best and smartest people in the world are willing to work for Elon. And so, if you had the best and smartest people in the world truly working for you, then the business really would grow without you because there's no real big businesses can have one person who's

[36:47] inter really involved in everything. It's just impossible, right? And so, you have to decentralize decision making to very smart people who are very capable. The problem is that those people don't want to work for you. And so, the the the real real is that as much as I did give you all these tactics about like

[37:00] these are the things you have to do. Here's how you transition from marketing. Here's how you switch from doing to managing. Put a time study in place. You know, here's how you can stress test the business. Like I gave you these steps, right? But the real real is that like you have to become someone who's capable, who's who's desired people would want to follow, right? And that's going to be a

[37:16] combination of two things. Your experience and track record and your ability to sell the future. Now, typically, they like somebody who has an amazing ability to sell the future can outsell the fact that they don't have a crazy track record. But track record is also relative. So, if you've built and scaled a billion dollar company and you say my next thing I want to do at 10 or 100 billion, a lot of people will believe

[37:39] that you can do it again, right? But you can also generalize to traits and then get specific again on business. So, let me explain what that means. So, if you let's say you were valedictorian of your class and, you know, were president of three different things, that would just prove that you are generically ambitious, right? And that you probably work hard and have some level of intelligence. And so, with that, that can still give you a semi credible track record to I also want to start this new big thing. And if you were good enough at selling the future of how big a thing you want to do,

[38:11] you could get some of that A-level talent. But for us mere mortals, which I consider myself to be quite immortal, um amortal, not emortal, to be clear. Um most of the time you just got to have the proof of the pudding, right? Or the proof is in the pudding, rather. We have to just show that

[38:28] we can do it. And as soon as you do that, like the level of talent that I've been able to attract at acquisition.com compared to Gym Launch or Prestige Labs is order of magnitudes. And so, I almost had to build Gym Launch to prove that I could that I could build something of that size to then build something 100 times

[38:43] as big. So, that is my real world actual And if you're like, "Wait, does that mean that it will take me time to develop a reputation?" Yeah. It's kind of how it works. Um but when you do have a reputation, you start to gain significant leverage in many parts of the business, one of

[38:59] the biggest being talent. Cool. So, now let's open it up to um let's open it up. Let's talk about whatever. And by whatever I mean ideally key man related topics. Um Am I taking these? Is that what I want Good. All right. We have an upgraded setup. We have a less boomer setup cuz you guys are making fun of me. Let's see if this works. Oh, wow. Can

[39:23] hear myself. Crazy. Okay, interesting. Um You don't understand the value of enterprise value. Of course you build net worth without taxes, but it's fictional numbers that can't liquidate. I like cash flow, hard cash. Thanks to V L C C T G J. Um let me tell you why enterprise value [ __ ] matters. So enterprise value is important for a variety of reasons. Enterprise value dictates how valuable something is. So Stripe for example is not publicly traded, but people are willing to invest money in it and so the founders can get liquidity. And so what you want is to be able to spend something. But the thing

[40:04] is is that that comes from the position of not of already not having enough. So let me explain. Once a business has enterprise value, it usually is already generated had the ability to generate more than sufficient cash flow for the owner. Which means that all the excess cash flow that the that the business generates is going to be transferred to the owner in a tax inefficient manner. And so then what happens is that you want to have growth in your net worth that isn't affected by

[40:30] taxes, right? And so if you say I want cold hard cash, cool bro. You want to pay your rent. I get it. After you're done paying your rent and after you pay your house off and after you pay for your parents house and after you pay for their cars and your cars and your kids schools and all

[40:45] that, there's still cash flow coming in. And then you're like, well I want to upgrade all my cars. Okay, great. And then I want a vacation. Cool, cost 100 grand if you want to be a [ __ ] baller. Okay, then what? Right. Then you want the most efficient efficient tax vehicle for building

[41:02] wealth, which is your enterprise value. Guess what else you can do with a high value enterprise. You can take loans against it. You can get lines of credit. It becomes an asset. You can raise capital on of that. Right? And so said differently, there's levels to this game. If you want to move up levels,

[41:28] you need to play a different game. And you have to graduate. If you can't if you don't know where your rent's coming next month, [ __ ] enterprise value. Being super real here. [ __ ] enterprise value. If you have those things satisfied and the vast majority of my content I try to make four business owners, right? Who are trying to get bigger, who are trying to scale. Um enterprise value becomes

[41:52] increasingly important. Basically. The bigger you get, the more you satisfy your needs and people around you's needs, at some point then it becomes about the game. And to be clear, I'm not saying this game is the only game worth playing and there's not other games in life that are worth winning, but in the game of business net worth

[42:05] becomes the objective measure. And so that's how that works. Cool. Uh closer to the mic, is this not fast enough or loud enough? Let's try this. Is that better? Hold on. All right, we'll do that. That better? Cool. Jeff, already did man. Jeff already I moved closer to the mic. Can you hear me?

[42:28] All right. All right. Kick Jeff out. He said it three times. I'm out with Jeff. Okay. Let's go to the next question. So Alex, as a software dev I'm trying to grow a startup app. What do you recommend? Bro, I mean that's like saying how do you advertise? Honestly, read this book. Pick one of the core four, which is either going to do outreach to people you know, outreach to people you don't know. You're going to do paid ads, you're going to make content. Right? The other four things you can do is get an agency to do that thing for you, find affiliates to do that thing for you, get

[43:03] customers to do off a viral loop, or you have employees that do the first four on your behalf. Those are your options. Which one would I pick if I were you? In the beginning you actually care more about revenue retention and then eventually once you have revenue retention, then we have to figure out whether it's going to be viral growth or it's all based on like I can keep everyone who comes in um past month 12, but the issue is that no one knows about my stuff. And then it

[43:26] just becomes a CAC to LTV ratio problem. It's just math after that. Okay. The problem the hard part is obviously keeping people. Okay. Uh can you clearly define how to find out what is valuable to your marketplace? Yes. You ask them to buy it. And if they pay you for it, then they have found value in it.

[43:47] And if you're like, what? How do I know how to define value? I actually wrote a book on that too. We I actually wrote an equation for it. So the value equation has four components. One is the dream outcome, which is what is the thing that people ultimately want. And then the other three variables are things that detract

[44:04] or pull away from that dream outcome. And so if I can give you this dream outcome, let's say that you want to get a six pack and be in shape, and I say it's going to take two years. So it's going to be slow. Uh it's going to take time from you every single day. It's going to be it's going to take a long time and it will take you a lot of time. So that's two

[44:20] elements of time. Uh it's going to cause you to have to do things that you don't want to do. And it's going to cause you to do stop doing things that you do want to do. So you stop good stuff and you start bad stuff. And on the top of that, there's a chance that you might not hit it even if you do all these other things right and you

[44:38] take all the sacrifice. Is that a valuable thing? Well, I mean it's kind of, but I basically described the fitness sale to you. You got to work out, you got to stop eating tacos, you can't drink on the weekends, right? Um it's going to take multiple years uh and it's also going to take you time every single day. You're going to be sore, you're going to be tired, all this stuff, right? Um and then on top of that, uh you might try this whole period of time and you might have terrible

[45:04] genetics. And so uh all that to say it will that's why that's why I have to spend an hour arm wrestling somebody sign up for personal training. On the flip side, if I sold GLP-1, which is a diet drug, right? And they have a new drug that's coming out um that they're going to pair with GLP-1, which is like a muscle preserving drug. So you can literally keep or main- or gain a little bit of muscle on this drug while also starving yourself, uh then you have a better physique and it takes no willpower and you just take this drug. So it's fast, it's virtually guaranteed cuz it

[45:35] requires no willpower, um and it gets you the physique you want. Which one's more valuable? Which one do you think would be harder to sell? Probably the personal training one. And so fundamentally this is how you differentiate value. Hopefully that answers your question. All right, hotline. Let's rock and roll. We'll give you a physical phone. Do I

[45:57] need this? [ __ ] my life. We try to make we try to be cute. We try to we try to make this fancy. All right. Who we got? Hello. You're on speaker. Hello, hello. Hello. What's up, man? Hi, this is William in Michigan. How you doing, Alex? William in Michigan? Yeah. All right, what's up, man? Tell me

[46:23] about the business. Yeah, so I'm in the life and booties for seniors business, the assisted living and memory care business. And the main problem we have, sales are good, but it takes a long time to get the LTV. So they stay within a year at least in our business. But I'd like to find out a way to bring the cash

[46:43] forward. So it's kind of like you know, we're getting cash, but it takes two, three months for us to really get good profits and then of course after that it's doing really well, but how do we bring that cash up forward and present that ahead of time? Are you billing insurance or are you billing private? Uh private pay. No no insurance. Okay, got it. So do you bill monthly or how do

[47:05] you bill? Yeah, so we bill you know, the first of the month and a lot of times we look to collect first and last month's rent. And last month's rent's fully you know, refundable on a 30-day notice, but it's similar to like an apartment building. Yeah, got it. So I would have I mean honestly all there's there's really only um two options that are like immediately

[47:29] available to you or I guess three. So number one is you could have some sort of setup, enrollment, onboarding, some sort of fee like that that you could put into the upfront payment. That's thing one. Thing two is you could require first three months upfront. That's option two. Um option three is you can add on additional service that many of them need and then you could uh contract that out. So let's say that what are the other things that someone has to buy in order to begin your service? I'm guessing there's some sort of moving

[47:57] costs or moving services, right? Yeah, there's like ancillary like transportation, you know, beauty, hair and nails, stuff like that. Yeah, so basically what we would do is just create a bundle that many of those people immediately need to buy in addition to Have you read the Money Models book? Yeah. Yeah, I'm reading through it and I

[48:18] I bought the course, too. Oh, awesome. Um so big picture, the one of the first stories I tell in there is a guy who owns a storage facility, right? And so he gave a free month of storage away. So very similar business to yours. Not saying that you get free month, but same idea. It's like, well what else do you need to have when you have a storage unit? You need a

[48:37] lock. Oh, uh you need boxes. Oh, you need insurance. Oh, you need maybe a bigger unit, right? And so all of these things pull cash forward. And so well not the bigger unit, but the other ones do. Um and so same degree, it's like, okay, can we sell insurance on top? Can we sell the move-in services? Can we sell the boxes associated with that? Um

[48:56] you know where I'm going with this? Yeah. So I think people will have some some sort of elasticity. Like people are very very sensitive to the monthly fee. They are. Right. Less the people are less sensitive to one-time fees cuz it's only once. Correct. So we just need to create that one-time fee for people um and it'll be even more profitable obviously if it's not just a fee, but it's also tied to

[49:20] stuff they already have to get solved. If they do it through you, then it just feels easier. Yeah. Does that help? Yeah, something else I was thinking about, too, was like even furniture. I mean we haven't fully furnished, but maybe we could give them like buy extra furniture if they want a nice queen size or upgrade on their bed. we could offer that to them, too. That's

[49:39] something that you know, just popped up. I never thought about that. Yeah, exactly. So, we just look at all the other problems that a customer has that they're going to pay somebody to solve when cuz you're at a transition point in someone's life. So, money's coming out of their pocket and it's already in the wallet, it's already open. And if you can especially cuz this is such a like a stressful time for many families, um if you can just say like right, if you can just say we'll handle everything, just pay us this extra fee, we'll make it easy. Uh many people will just give you that

[50:04] money. And then I think you would pull forward all your your cash flow to act to our customers. Awesome. Okay, well, that sounds good, Alex. Appreciate you, William. Yeah. All right, have a good one, man. All right, it's a All right. Do you guys like our my new high-tech setup? This is low-tech cuz I got I got asked I got asked to Am I working on the next

[50:29] book with this one? No, man. I actually Actually, I'll Actually, let me I want to add I'm going to put a poll up real quick. So, I I'm I'm actually kind of split and your results will might have like a 1% shift in what book I decide to write next. Um cuz I'm at cuz I just I mean the other three books I wrote, you know, kind of over the last however many years. Um but I I've got a few different ideas that are

[50:52] nipping on me right now on my ankles. So, book one would be about profit. Just profit, like the many things that you can do to just like drive profit in a business. There's just tons and tons of tactics and hacks on profit. That's one. Second, uh so it'd be profit {slash} pricing. I'll just put it that way.

[51:10] Profit {slash} pricing. The second, uh is that I would finally consider writing a sales book, which sounds crazy cuz it's just like the reason I've been so intimidated to write a sales book is because like I honestly feel like I have so much in my head about sales, which is probably why I should

[51:25] write one. Um that I just like I feel like I can't I couldn't get it into into a book. Like there's so much. Um but that's that's the second book that I was considering. The third book um that I was considering writing. Uh for those of you who were on the live stream I think 2 weeks ago, maybe 3 weeks ago, I did one on mental toughness. So, I talked about the four components mental toughness, which was uh tolerance, uh tolerance, fortitude, resilience, and then adaptability, right? I talked about

[51:51] those four components. So, those four components were just a demonstration of trying to operationalize amorphous terms or character traits. And so, I I would say like it's a hobby of mine to define terms from an operational lens, which is like what is trust mean? What is loyalty mean? What is integrity mean? What is guilt mean? What is shame mean? What are all these these amorphous words that people throw around? What is trauma mean? Right? Um trauma mean sounds like a drug. Trauma mean. Uh What What What do all these things mean

[52:22] and is there a way of organizing this? So, it'd definitely be like more in the I'll call it personal development if you want um ilk, but I definitely have a full book already outlined there. Uh it wouldn't be about mental toughness. That was just an exa- That would probably be like eight chapters. Um But yeah, of those three, can we go poll uh pricing and profit, sales, or uh

[52:46] operationalizing life. All right, what do we got? What do we got? What do we got? Well, let me know the results. In the meantime, um let's take the next one while you guys fill out that poll. All right. What am I saying? Hotline. All right, there we go. Poll's Poll's now live. Do we have somebody on here?

[53:19] All right, we got some boats coming in. What's up, man? Howdy, how are you? Howdy, what's your name? Uh my name is JT. JT. All right, JT. Yes, sir, brother. Tell me about your business. Well, I run like a real estate company. Okay. I'm a closer and it it handles the marketing and sales for like new wholesalers and people getting into the business. They can scale faster and earn like learn the process while they earn it. Like earn money. Okay, so you generate appointments and leads for

[53:50] them? Well, we generate the leads for them and we send our sales team on the deal. So, basically, we are running like the entire front end and the back end. So, they're basically funding the marketing, but they get to learn while they do the process with us. So, why So, this genuine question, like why do you do that versus just like doing

[54:10] wholesaling? Well, I do it because it fixes the cash our cash conversion cycle. Like we're able to we're we're able to fix the like the liquidity issue in wholesale because the days on market is so long. Um and we're taking it down to where we can like become way more profitable cuz we do it just like Yeah, okay. Um you could raise money and just do it, side note, but all right. Um Okay, so what do you want to have

[54:41] happen? That's not happening. When we're on like sales call Yeah. people, um basically, they agree on the price, but a lot of the times like they can't afford the first payment or they can't get approved for financing. And I'm like, is that a sales problem or is it like a a lead problem and should we just collect whatever cash they have or not? Like Well, how are they going to afford to pay for the marketing, too, if they can't pay for Or is that what you're saying they can't pay they can't afford

[55:12] to pay for the marketing? Yeah, so they can't afford to pay for the marketing. What's the revenue stick? What's the stick in this business? Like how long Like do people stay for years, you know, doing this with you? Like what percentage of customers are you are here at 12 months later? No, they it's mostly not that they're here 12 months later. It's like the onboarding for the LTV is roughly like

[55:32] 35,000. Okay. And then like 90 days. Um but over time, like the only thing they really stay for is like the CRM that they use. Okay, so you white label Go HighLeveler or something. Yeah, yeah. Right. Okay. Okay, so the issue is that like what's your LTV to CAC right now? Well, right now, our CAC is roughly like 5,000, but we're

[56:02] we're um at 35 like 35,000-ish LTV. Okay, so you're 11 to 1. Okay. So, I mean, that inherently is okay. Um So, what stops you from doing more of what you're doing? Um nothing's necessarily stopping me. Our close rate is just super low. Okay. I mean, I would probably just throw in lead qualifications on the front end. It'll just like decrease the frustration of your team. You'll probably increase your Obviously, you increase your close rates if you take out the the disqualifieds, but it'll you'll close more in general cuz the sales team won't

[56:35] be beat down from hearing no all day. Okay. I'll tell you this, man. You will make significantly more money by adding qualifications to a funnel. Like I almost Like I have almost never I've like I'm trying to think of a time where me adding qualification friction made me less money. Your your metrics will change. So, like your So, not CAC and LTV, but your I mean, LTV might change. But said differently, like your cost per call or cost per click or possibly, you know, whatever metric you use there, will probably go up, but your CAC may go

[57:09] down. And your LTV will certainly go up. Okay. I would just add more qualifications in the process and then do more. So, I guess that is I guess that's the fear of mine would be for the for the appointment to go up up cost per appointment to go up, but basically, it should make it more profitable because we're not talking to unqualified people, correct? Yes, cuz listen, if you let if

[57:34] you let some of these minnows in, right? It's not a good fit for them. It's putting It's their last dollar. Like you should not Like you shouldn't do it ethically anyways. But like outside of ethics cuz that won't that never convinces anyone if they're making money. It's not good for the business. It's bad for the sales team, it's bad for our reputation, and fundamentally like when you accept everyone, you ward off people

[57:55] who can actually afford stuff. Yeah. Yeah. And like I guess for the for we like like you said with like the you're big on lead magnets. Yeah. We do provide like a really in-depth training guide, like really in-depth, but uh the issue there is the majority of people who come in are not qualified at all. So, should I add more

[58:17] qualifications to that, too? So, you can add Qual- What is the lead magnet again? The lead magnet is a training. Like it's like all of our SOPs, like all of our SOPs, all of our like basically for our entire company. You can You I mean, you can have the SOPs there, whatever. Just put Add an extra box that says like whatever the qualifications are that are that you know are required for somebody to be a good customer. So, like for example, at the book launch, people

[58:45] could opt in to show up to the launch. The launch functionally acted as a as a lead magnet in this scenario. I still asked for people whether they owned a business and if they had a business, what revenue level they were at. Because I don't have no need for you know, leads in a CRM who are not business owners above a certain size to get a call from my team. There's no point. It's a waste of their time, it's a waste of ours. Right? They should just use our free stuff. And so, just add a

[59:06] qualifier on the on on the front end. Okay. And then only call those leads. And then have the thank you page sort leads the best leads to the the sales team and then the worst leads just, you know, send them to an automated thing that maybe self-liquidates some of the ad spend. Okay. So, I on the qualification question, Yeah. would you put like something vague? Like we have right now, we have a qualification question like are you willing to invest in your future

[59:35] not a qualification question, dude. That's that's a like do you have a pulse and a credit card question. I'm saying you have to right you need to figure out who your avatar is. Okay. Have you read the last chapters book? Okay. The last chapters book? No, I haven't read that one. First chapter of the last chapters book is finding your your first avatar. All right, the process that it walks through that in in the book in that first chapter is you need to look at the customers who have spent the most with you and and stayed the longest. What are their characteristics? So we look at

[1:00:05] their demographics like who are they right? We look at their quantifiables like do they have a certain income level? Do they have a certain amount of kids? Do they have a certain family? And then I look at geographics. Do they live in a certain area? Right? And so when I have those three things put together then I know that it's like okay, it's actually conservative Christian males you know 35 plus who are married is actually my best avatar. It's like great. So that's what we're going to make in our ads. And your big fear right now is if I make more qualifications my cost is going to go

[1:00:34] up. But it's not dude because you're going to need to advertise to the right type of customer and you'll get those people to opt in and then you will go but get them to buy more expensive stuff. Okay. It's everyone's fear. Everyone's fear is going from general to specific but when you go specific you get the

[1:00:51] right people. Okay. So actionable steps are just like the qualification question and making it specific to the avatar. So in order it will be determine the avatar by looking at all the customers that you have. You want to look at who they are, what quantifiables they have, geographics and if you can bonus points for sales process. Did they consume anything else in the sales process? Do they have a different experience than the people who

[1:01:16] did who aren't worth as much? Right? Once we have that data we then weave that into the advertising in terms of call outs of who the avatar is. We weave that into the landing pages. We weave that into the the the the drop downs for the questions and the friction that we add in the funnel. We add that into the

[1:01:30] VSLs if you have a VSL I'm sure you do. That that tells them about the process and it begins with pains and the hook of that specific avatar. You do all that stuff you will for sure convert more. Okay. Cool. Thank you brother. You bet man. Have a good one dude. You as well. All right, rock and roll. All right, so it looks like Ooh, what does it look like? So it looks okay. So I actually thought this was

[1:01:54] life. Thanks Luke. Like he's like Alex is going to write a book called life. That sounds so self-aggrandizing. Yeah, like I know about life. Um Okay, so 40% on sales. Interesting. Profit and pricing actually has a pretty strong a stronger showing than I thought it was going to. Man, this is the the vote votes are flying in, right? Maybe we'll have a recount

[1:02:20] Gore style. What was Gore's first name? Al Gore. Did I say Alan Gore? But I guess that I guess that is his name. Um okay, sweet. Uh let's Let me see if there's any any questions. Okay. Um What you think are the best revenue retention opportunities for an architecture firm? What would it take to get there starting from scratch? All right Emiliano, I'm going to give you

[1:02:42] I'm going to give you some some game. So some businesses like yours you need to chunk up a level to figure out revenue retention. So what does that mean? So I'll give you an example. So Alan See the universe knew. Alan the software that we ran. Um at the beginning I was trying to sell lead nurture services to brick and

[1:03:03] mortar businesses, right? SMBs. Uh the problem with lead nurture services when you have an SMB is that they have inconsistent lead flow. And so we're so as soon as they're like oh this is great uh but how do I get leads? Right? And they're like oh no this is a whole another problem. This is

[1:03:17] a different business. And so then we had the smart idea of like well what businesses already have leads? And the answer to that question was businesses already working with agencies. And so then I said oh maybe agencies are really our customer. And so that's what we figured out was that agencies would bring customers in and they would churn those people out, right? But they let's say an chiropractor agency has 10 chiropractors that pay $2,000 a month. So I'm sorry mini itty-bitty agency, right? They've got 10 chiropractors paying $2,000 a month. And let's say every month they lose two chiropractors and they gain two chiropractors. I can rely on that agency

[1:03:49] to use my software month over month over month with each of his chiropractor people even though the logos of the people inside of his little ecosystem will change. But my revenue retention on the at the agency level was super good. So why do I tell that story? Because it's an analogy for you Emiliano which is that your architecture firm you're thinking about it at the house level or at the building level, right? If you chunk up a level which is like okay who are the referral partners or who are the people that you do business with on regular basis? Is it contractors? Is it who are the people who are referring you

[1:04:22] business? And so once we find those people who who you're doing business with on a regular basis we want to demonstrate that we're retaining them rather than the pro at the project level. So you chunk up and then those become your nodes of revenue. And so you then have your acquisition or your sales motion is going to be geared around how do I advertise and acquire more of these referral partners and I know each referral partner is worth X and it costs me Y in order to acquire them and I can retain them significantly more than I can for the individual products or logos that

[1:04:51] they're bringing on. That help Emiliano? That's how you do it. Okay. Uh next caller. Hello. Hey what's up Alex? What's up man? What's your name? My name is Liam. I'm 24. My business is going to do about 6 million in revenue this year. Okay. Uh and we do apparel TV shows unlimited time exclusive drops. A pair Okay, so you do so you partner with the TV you partner with Shark Tank,

[1:05:19] right? I'm saying hypothetically. So you partner with a TV show and then you make Shark Tank merch and then you drop they drop that merch on their show and you deliver. We marketed ourselves. We drop it through our channel. So it's a collaboration but it's all through our own channels. But you obviously get to use their brand in the advertising and and then you do some sort of like split

[1:05:44] on the profits I'm guessing. Yes? Yep. Okay, great. So you're doing 6 million. What's internal revenue or rather what's gross profit and then what's internal revenue? So that's the kind of three numbers there. Uh gross profit this year we're going to be running at about 10 to 15% and we were at about 30% last

[1:06:06] year. Or So $6 million is what you made. That's how many shirts were bought, right? Yep. Okay. $6 million shirts were bought. What do you sell a shirt for? What does it cost you fully loaded? Uh $50 for a shirt and it costs about 12. Damn. Okay. Okay, so you have 38 on on 50, right? Is

[1:06:30] what is what you're making, right? Yep. Okay, fantastic. Now so what's that? That's uh 75%ish gross margin somewhere in there. Okay. So that's fine. Now of that $38 what's the split between you and the TV show? Each license is negotiated independently. It can range from 5% to 25% depending on the size of the IP. Oh so they get 5% so they would get two and a half dollars per shirt all the way

[1:07:04] to getting you know 12 bucks a shirt. Yeah. Okay, that's not bad. That's not bad. Okay, this is workable. Uh so I'm going to just going to say like midpoint let's just say midpoint is 10 bucks. All right, we'll be aggressive with it. So 10 bucks so you actually get $28 per shirt on on on a $50 shirt call it 25 with other [ __ ] So 50% um is what we're working

[1:07:29] off of. Okay, so what was net profit? About 600k. Got it. 10%. All right. So what's the problem? Uh we've completely capped out on our we do almost exclusively paid traffic on Meta and TikTok. Okay. We drive people to a wait list for the drop. We hype the drop up and then we do a launch. Okay. And the pricing model we base it off of what we can acquire a lead for. And the problem is our cash flow becomes super inconsistent because each IP performs wildly differently in terms of how much

[1:08:07] revenue we generate. Um and some wait lists will convert at like a 25% wait list to purchase ratio. Some will convert at a 5%. Uh and so we need a more cost effective way to acquire leads. Cuz essentially we're just I mean dead in the water at 10%. Yeah. So I think that the big thing that's actually missing for you is predictive data. So you being able to say like you're like

[1:08:34] well they perform wildly differently. Well, the more you do it and the more data you track the less wild it should be. That make sense? Yep. So if you were to take somebody I'll give you an example a simple example. If somebody else were to go launch a book, right? And they have call it 4 million you know YouTube followers whatever. And I launch a book and I have 4 million YouTube followers. Why is it that my book is going to sell way more than

[1:08:59] theirs, right? You should be able to answer that question quantitatively. And so that'll take a lot of the guesswork and the volatility around which brands you partner with and the power of the negotiation. Cuz I'm sure there's some deals where they thought their brand was significantly more valuable than it really was. And there's probably other brands and this probably even sometimes more often the case a brand that they don't think is that valuable at all and in in fact is actually super valuable in terms of the people who are willing to

[1:09:27] buy. Yeah. Yeah. Okay. So, thing one is predictive data. Thing two, have you considered going to influencers and doing this exact same model? We have. Um the big thing is emotional relevancy to the show or to whatever the IP is. So, a lot of influencers they're not do particularly well for something like that where it's like a really good example is the Nelk Boys with full send, right? Find a commonality between the audience and they have a hierarchy of brand over they

[1:10:06] treat themselves like ambassadors. Um We've looked at it. We've We've interviewed a few, but the numbers have never made sense to us. Well, I mean like I I feel like they should cuz like you're you're you're taking premium TV shows which have a lot of times smaller audiences than like some big creators do.

[1:10:33] Yeah, honestly, right. I mean, Mr. Beast can drop a t-shirt and do your entire year's revenue in like a day.

[1:10:45] Getting dive deeper into the creator economy. Leverage audience using audience. We don't have to spend so heavily on ads. Yeah, and they'll collab it with you.

[1:11:02] And there's a zillion of them and a lot of them don't make money. And they're And they're not going to be hardcore negotiators. Sorry, go ahead. All of the IP we're collecting are in a specific niche. Yeah. And as we retain a whole lot of the IP, we can renew these uh these releases over and over again. Okay. And that makes us uh an acquisition target when we have all

[1:11:23] these relevant IP. You mean just the t-shirts that you're allowed to use and the and the ads that you can run for them. Exactly cuz all the TV shows they're anime TV shows. Oh, word. I got it. So, you're super niche. I didn't get I didn't hear the the anime part at the beginning. Okay.

[1:11:39] All right. Um so, the issue is what? Is the issue is that like it's not growing as fast as you want and I mean, what kind of exit do you want? I would like to get positioned for like a 4 to 5x EBITDA within 2 years, you know, in like the 7-plus range. Well, who wants to So, okay, I'm going to say it back to you. So, basically like you want to make like three or four

[1:12:04] million bucks on the sale? Yes. Okay. Um who would be who would be an acquirer for a business like this? Who's the buyer? Uh big media distribution companies. There's a whole bunch of uh anime moving into westernizing this Japanese IP. Um These are pretty big players, multiple billion dollar space now. Yeah, but if they're They buy for the company release and all the uh the exclusive IP. I have two pieces of So, the exclusive rights Yeah, I have two pieces of relatively kind of

[1:12:39] maybe bad news. So, bad news number one is that multi-billion dollar companies don't write four million dollar checks. It's just It just It's de minimis. Right? It doesn't It doesn't move the needle. The second issue um is that the nature of what you do is not that complicated. Like I could just have the show and make my own t-shirt.

[1:13:03] Right? And I don't I'm not saying I'm I'm Believe me, I'm not saying this because I want to blow your balloon up. That's not the That's not my point. Um I'm just going to cuz I want to I want to help. So, you're all in anime. I mean, have I mean, what about anime creators? There's

[1:13:16] tons of those. Even in that niche. Yes, this is this is what we're looking at doing next is building out a really solid ambassador program um and appealing I mean, you could build I think the ambassador program So, if we're talking about high leverage, right? I think the ambassador program is really smart for a couple of reasons. Thing one is that each of the ambassadors themselves once you like you can they could go promote each of these other products and then make money kind of like you build your own functionally a TikTok shop of t-shirts via ambassadors who are pushing them because they think the t-shirt's

[1:13:50] sick. That's not that hard of a push and a lot of people would sell that, right? You will then see which ambassadors have the most pull. So, you'll get early data. And then what I was talking about earlier with predictive data, you will then be able to say, "Oh, these Here's We have a thousand, you know, ambassadors of people who are micro and nano creators and maybe mega creators around anime and we're going to make t-shirts for the top hundred of them and do drops so that every week uh we do two drops a week for these creators and they're going to go promote other other

[1:14:21] t-shirts for the premium brands that you were talking about, the IP um throughout the year, but you uh but they themselves will do two drops uh for themselves. Which will Which will pull away [ __ ] harder anyways. Okay, so to just to make sure I understand this, there would be partnering with larger creators doing drops relevant to their audience building relationship and then they would also double dip where they would promote for our exclusive IP

[1:14:48] releases as well. Yeah. Yeah. I think it's a really good idea. All right. Thanks. Yeah. There it is. Yeah, I'm known all the creators. All right. There you go, brother. Have a good one, man. Yep. Bye. See you. That was great. Um okay. Let me go to chat. Okay, so I am starting a SaaS on property due diligence {slash} inspection services for buyers interested interested in serious about buying one or more property. Should I hire inspectors

[1:15:22] or operate a platform model? I honestly, dude, I think you'll find out. Like I think you like you'll take a bet and I mean, I started Allen and was like, "Oh, we're going to build lead nurture for small businesses. This will be a home run." And then I found out that agency owners were actually our best our our best customer. So, you'll probably like depending on how different the I'll say platforms are significantly harder to build. So, I think B2B SaaS is a way safer bet. I mean, as a co-founder of School, I can tell you it is not easy to do and the hardest part is the part that School is already

[1:15:52] through, but it's the the five years of going from you know, every single person saying, "Can I white label this? Can I white label this?" And you having no real value prop besides like someday this will be really valuable when it's a marketplace. Um but once you turn that corner cuz you make the product so good, then the the the marketplace component if you're staying true a platform model. Um but I would do The reason platforms get the multiples they do is because it's so so

[1:16:16] expensive and so hard to do. So, I would I would prefer B2B SaaS model. If I was If I was a betting man and it was my life and it was one, you can't live 10 lives or 20 lives, um I would probably But if you're like, "I have to be a trillionaire." then if that's the thing, then you got to go

[1:16:31] platform. Okay. Okay, I actually I'm going to answer this other one. Rowdy Adventures, I have a patent that will be pending in 8 weeks. What would you recommend to do in preparation for that? I've already been working on finding the cheapest manufacturer to get the price parts down. All right, so I've got good news

[1:16:48] and I got bad news. So, patents, believe it or not, don't mean [ __ ] unless, guess what, you have a legal budget to defend them. So, I have a five-person team full-time in-house that all they do is take downs. Every week we take down 50, 100, 200-plus accounts. All those scam things where people try to sell my stuff or, you know, the impersonator account like all that stuff that happens like we have a full legal team that gets them delisted, gets their ad accounts shut down, gets them removed from social media, gets their Shopify pages down, gets their processors removed. Like

[1:17:21] that's a whole process. But that only works if you defend it. And so, basically, in the eyes of the law, if you do not um defend your patents or your IP, um they well, they're not that defensible. Also, like the idea like business is much more ruthless and cutthroat than you think it is. Um because like people will just steal your [ __ ] and

[1:17:43] then say, "What are you going to do?" Right? And then it's going to be a multi It's a It's a long legal process to prove how close is it? Is this fair competition? There's a lot of other stuff. So, having a patent in of itself does not in any way guarantee success. You're still going to have to market it. The patent has to be around something that truly is core that no one else can reproduce around the product. Um and so, basically, you still got to start a business. You still got to make the business make money. Um and then when you have some of that money and you

[1:18:12] start to get successful, that is when the dupes will start flowing in. The duplicates. And then at that point, you need to start allocating a certain amount of capital to continue to defend the IP. I like as far as we're concerned, until the business is successful, the patent means nothing. Okay. So, who else we got?

[1:18:32] Hey, Alex. Hello, sir. Hi, uh my name is Sam. Uh my business partner and I run a membership site for real estate agents where they basically get get daily social media templates, lead magnets, training videos, all this stuff to help them sort of save time and get better at Instagram. Okay. So, it's a membership What do you What do you give them on a

[1:18:55] monthly basis? Um a lot of it is just daily social media templates. So, 30 days of content that they can edit, customize to their own personal branding, post on social media, and then there's a library of like little lead magnet things and and that they can customize again and use on their Instagram and training videos to help them set all up their Instagram,

[1:19:16] all that stuff. But mostly it's going to be the the the content templates. Yeah, it's it's a content membership. Yeah. Okay, got it. Okay, so how many people you got? What do you charge? Yes, we charge uh $49 a month. All right. Um we have just under 300 members. Okay. And uh yeah, I mean we do just under sort of 20K a month. And we take off,

[1:19:39] you know, 75 80% of that. Cool. Got it. So, what is the what's the issue? Yeah, so my question is, you know, how do you decide to sort of push your churn? What's your Yeah, uh yeah, uh the hovers around 12%. Ooh, monthly? Yeah. Monthly? Okay, got it. Do you have any metrics that like after a certain

[1:20:02] point people continue to stick? Um we've only been in business for just over a year, so it's hard to get that like 12-month kind of stick number, but monthly it's it's 12%. Yeah, yeah. Well, I'll tell I'll tell you why this is important. If, let's say it's 12%, well, 12% is tough cuz that's like you lose all the customers by the end of the year, almost. Um okay, what's sales velocity

[1:20:25] right now? Meaning monthly sales. Units sold. Uh between, you know, you know, 50 months, 40 50 months. 50 a month? Yeah. Okay, got it. Okay, so you're still you're still growing, but slow. Right, and we're getting to the point where churn is starting to catch up with us. Yeah. And and that kind of leads into my question being, you know, how do you kind of decide whether to push or pivot when there are sort of these structural challenges or at least perceived structural challenges in your market, um and you're maybe looking at a different market, a different niche that might sort of be better for your

[1:21:02] business or for your offer, essentially. As in not marketing as in as in not doing it for real estate agents, maybe doing it for a different uh market. Why do you think this other market is going to be different than real estate agents? Yeah, so I mean generally real estate agents um from our perspective, they're they there is a lot of structural volatility in terms of their income and obviously with SMBs that's you know a given, it's

[1:21:32] probably worse for real estate agents. Um and you know, they don't make a lot of money, there's not a lot of willingness to pay. Yeah. And basically what we've seen in our market, there is like a market leader with, you know, over 5,000 members, been doing it for 6-plus years now. Um and a couple others with a thousand-plus. Like we are a late entry into this market. This is something we started to do just cuz we thought we might as well pick up a proven business model. Okay. Um and we've seen other content memberships in other industries like, you know, accountants, uh one with like aesthetic

[1:22:04] nurse practitioners. Yeah. Started the same time as us, have the same Instagram following, they've gone through their funnels and they've like 5x. Yeah. From in what in terms of what we've been able to do growth-wise, and we're wondering trying to figure out why that is, essentially. Um well, do you do you have full

[1:22:20] transparency into their numbers? Um I have full transparency into a few of their just, you know, the amount of members they've had and the amount of Instagram followers they've had. I've kind of gone through their funnel a little bit. I know that they don't necessarily run a ton of ads, like it's not like they're doing a ton of ad

[1:22:37] spend, for example. Do you know what their churn is and how many members they have? Um I can give you one example of one that has We have like 50K on Instagram, they have 40K on Instagram. We're kind of friendly with them and I know they have like 1,800 members. Okay. And that's past that's been a year and they and their sales velocity from what I can tell is like 100-plus a month, maybe 150 200 a month. Okay, and

[1:23:01] they started the same time as you? Basically, yeah. Similar following, all that. So, I mean the only have no they have no big competitors. Yeah. Well, I mean I think going to an underserved marketplace is not a terrible idea. Um the reason I'm like more okay with this is that you guys are still really early, you know what I mean? Like it's it's kind of it's it's pretty much a brand new business. I do think that like is this business that you have uh fixable? Yes. If the market leader, I'll put quotes around that, has 5,000 people, well, there's like a million realtors. So, there's lots of

[1:23:33] opportunity, right? That's still there. Like no one really owns the market. Um so, those are kind of the plus sides. I'm going to also bet that like to your point, it might not be that realtor like realtors, of course, if you take them in aggregate are have volatility, but if you look at the top 5% of realtors, like

[1:23:49] they they make they're full-time, right? If you have a lot of part-timers who are in there, uh then you have huge amounts of churn cuz they're they're not even they're barely even business owners, right? Right. So, you could probably fix this of our value prop, though. Yeah, okay, go ahead. Yeah, just in terms of our value prop, it's mean if you're a top 1% agent, you probably have uh some sort of social media manager or media team. We're a low-cost alternative to that, essentially. So, it it's kind of just a uh you know, a feature not a bug, I guess, in our

[1:24:19] business. Something like that. Yeah. Um but you'd have to have like the I mean the thing that's bad with the business right now Okay, zooming all the way out, what do you want to happen? Do you want to sell this thing or do you want to make more money? Short-term, make more money, for sure. That's what we're shooting for, more

[1:24:39] cash flow. thing is is that you're selling 50 a month, which is actually like really not a lot. Um from a sales velocity perspective, given the size of that market. And that like that is the problem, right? Like you could sell like if you have a million person marketplace, it's like we could be selling a thousand of these a month, right? And then the churn, even though it's, you know, 12%, it's like, well, we just know that we're going to get eight months on average times 50 bucks, so we're going to make $400 per customer as long as CAC

[1:25:04] is, you know, $100 or less. Cool. We have high margins, we're good to go. Um and you just take the money and then you do whatever you're going to you're going to do. Uh that's like short-term. You could do that. And I think targeting people who've done a sale within the last 30 days or something like that. Maybe they're not the 1%, but they're like, quote, on the way, they're, quote, reinvesting the business. And if they just had a sale in the last 30 days, they have some cash. Like there's some elements here that you can do. I also like are you doing a big uh do you do a

[1:25:29] big promotion for getting annuals? Uh we try Yeah, we try our best. We do two months off. We're we're starting to add other bonuses in terms of the annual as well to try to push more people towards annuals, but yeah. Right now, LTV is eight months for you. So, you might as well give four and pull the

[1:25:45] cash flow forward since it's equivalent. And churn on those customers will be lower. Right. Cool. All right, so that's thing one. Um now, to the larger question of like should you go after a blue or you know, a blue ocean market? Um and in in so doing, like does that mean you're going to start another Instagram page and like build that whole

[1:26:02] thing up and do that game? Essentially, that's kind of the thing that we're, you know, relatively best at. It's something we've invested a lot of time into. It's something that I think we can do, but it's obviously going to take time. And time away from our, you know, everything else we do. Yeah. I like I

[1:26:22] Okay, I'll tell you what I want. I I don't think it's a bad idea. I'll say that. I don't think it's a bad idea. Um like normally I just say like, no, stick with your existing thing. I do think you should stick with this thing a little longer and I'll tell you why. I think that it would it would behoove you to learn which types of realtors churn versus the ones that don't. And there's probably two or three characteristics that separate the people

[1:26:42] who do versus the ones that don't. Number one. Number two, I do think you need to make a better incentive to get people to prepay for annual. Number three, is there a version of this business that like on top of this you sell some sort of maybe $500 a month thing as an upsell or a thousand dollar a month thing that does have some have some sort of managed element to it that you have lots of AI and automation built into it so that you

[1:27:02] can do it with high gross margins. Right, yeah, definitely something we've thought about, just adding adding upsells, adding different offers. Yeah, I I like I I I I can appreciate the simplicity of the business, believe me. Um I just feel like you have a lot more to learn from this before doing the next

[1:27:17] thing. Um rather than just saying like, oh, it's the avatar. It's just cuz like that's the obvious thing that everyone says. And the market leader, and I'll put quotes here, has 5,000 people. It's not that many. No, I know and I've I've tried not to just say it's the avatar to the best of my abilities, you know what I mean? It

[1:27:35] seems like, yeah, it's the easy way out. So, that's what I would do. All right, so I would try to learn more about the customers, number one. Number two, I'd have the annual prepay thing. Number three, I would start running ads and see what your cost of acquisition is with ads. And having that strong pre pre prepayment thing. I would also have a self-liquidating offer on the thank you page that could be even higher than just the annual. Right? Cuz that could just

[1:27:55] improve the uh funnel metrics overall. Maybe like a Like a like a high ticket a higher ticket item. Yeah, and I'll say higher ticket with quotes here. I'm talking I'm talking like 197 to, you know, 397, somewhere in there. Which might be like, uh we have all these accounts, we'll tell you we're going to give you the 100 best performing pieces of real estate content over the last

[1:28:15] year. I would buy that. Right. Right. Yep. All right, that's what I would do. I think you need to learn this game better and then you'll have more perspective and you might just break through and then just become the market leader. Yeah, okay, thank you. Really appreciate that. And appreciate everything you do, all the content you make. Appreciate

[1:28:33] you, too. Later. Thanks. All right. Okay. Uh Mr. Mosey, uh thank you. That's That's Mr. Mosey to you. Uh As a video editor who's facing client acquisition problems, I get scared thinking of AI and if I even have a scope in the future. Bro. Why would you be scared of AI when AI makes your job uh a hundred times easier

[1:28:57] to scale? Like for the sh- for the short-to-medium term, there is tremendous leverage like the the the everyone knows, quote, knows that AI is going to come for everyone's job. Okay. Internet is going to disrupt every industry. Okay. And it has, but guess what? There's also businesses that still don't operate on the internet, so they use fax machines. So, like it's not going to be as it's it's it's going to

[1:29:22] still follow an adoption curve, right? Still going to follow an adoption curve of early adopters all the way to laggards, and some people will never adopt it at all. And so, and those businesses can still make money. Real talk. Some people use fax machines still make money. Um some people only do in-person business and only use, you know, you know, paper and clipboards still make money. And so, um I wouldn't fear it. You always want to harness it because as long as humans can compete against humans uh with tools, that's how it's always been for the dawn of mankind. As soon as it's uh AI versus human, AI will win. And so,

[1:29:54] but as far as I'm concerned right now, use the AI to get as much leverage as you can. Maybe you could 100x your scale using technology rather than fearing it. All right. Last caller. Hello. Señor or señorita. Hello, can you hear me? That's a señor. Hello. What's up, señor? Hello. Hello. Can you hear me, Alex? I can. Talk to me

[1:30:18] about the business. Amazing. So, I do robotic cotton candy machines essentially. That's our main product. Robotics and what? two different people. Hold on. Robotic cotton candy machines. Robotic cutting and canning machines? No, robotic cotton candy. Like the like the Ro- robo cotton candy. Got it. All right. Yeah, and you can call it that. Exactly. Okay, so

[1:30:46] So, we have two main people we sell to. We have entrepreneurs who buy our machine as an investment and put them in locations. And then we have actual businesses who we do one of two things with. We place it there for free, give them a percent of sales, or they can buy it for their business. Now, we're at a point right now where we have a bunch of entrepreneurs, too many to count, who want to buy a machine, but they don't

[1:31:08] have enough locations to put them at. So, what we're trying to figure out is we're trying to figure out the best way to get locations. I love this business. This is cool. too well, and we're trying to basically build an outbound funnel. Dude, this is a cool business. I like this business. Okay. So, give me give me some give me some cotton candy money. Give me some cotton candy money. What What is that What is one of What is it Obviously, it depends on the location and what traffic and blah blah blah, but what is the average cotton candy robo cotton candy

[1:31:32] machine make? I've been waiting all day for a call like this. are you looking at? Go ahead. Yeah, at a trampoline park, you could it's not amazing. It's about a thousand bucks a month. But, if you had a higher tier than you so think like, you know, museums, uh amusement parks, water parks, you have machines that are doing

[1:31:46] 10 to 15,000 a month. Okay, but average is a thousand. I would say average is about three or four thousand. Oh, okay. Average or median? Average. Okay. Median median is probably about that range still. There's a lot of outliers. Okay. Okay, cool. Three to four thousand dollars a month. All right. I can rock with that. Four grand a month making a thousand a week selling robo cotton

[1:32:09] candy. Okay. Yeah. So, can you can you supply all these machines to these people who want to buy them? Yes. Okay, so you have the supply. All right, so then what again is the constraint here? So, the constraint is getting enough businesses who want for us to put the machine. We have entrepreneurs who want to buy it, but they don't want to buy it unless they have a location. So, we need to find locations They need to find a

[1:32:33] location. They need to find the location. So, that's what we're going to do like, but that's the main constraint. If we can find them locations, A, we could charge for it, and then B, maybe you just take it ourselves and we get locations. Well, that's what I'm saying. It's like if they like the value of the entrepreneur like is that they front

[1:32:51] capital and work, right? Yeah. If you just find the location, then you should just own the location, right? Like why bother to have them there? It's like why split it? Well, usually they're they're we're looking for locations in their area because it's a it's a servicing thing, right? Like I don't want to have to hire a new guy in Connecticut for one location, right? To service the robo

[1:33:13] cotton candy machine. Yeah, it it takes a lot a lot to service a machine. Okay, fine. do actually is we take a percentage of revenue that their machine makes and then they service. So, that's the second line of business. Okay, got it. I love this business, dude. Okay, cool. So, you just need to go generate leads for businesses that want to make money for no dollars down, and you're having

[1:33:33] trouble with that? Believe it or not, yeah. Believe it or not. How are you advertising? Okay, we tried cold ads like, you know, LinkedIn didn't work. Meta didn't work. The only thing we've really Bro, hold on. Hold on. Okay. All right. Okay, so emailing is working. I'm not even going to touch the first statement that you said cuz I just want to light my hair on fire. Um So, email Okay, I'm going to I'm going to I'm going to go off for a second, then I'm going to we're going to circle back to this email thing. For everyone, if you run Meta ads and and it didn't

[1:34:13] work, it doesn't mean that Meta ads don't work for your thing. It means that your Meta ads and your conversion process didn't work, not that Meta ads don't work. Okay, rant over. Back to you. So, emailing people and then asking them if they want free money has gotten response rates. All right, so what are the metrics of our outbound funnel for

[1:34:30] our robo cotton candy business? What specifically interested in? Walk me through the funnel. I don't know. 100 emails will get about two to three to respond, and out of that honestly, most will close cuz it's it's a really easy thing to sell. Okay, you send a hundred emails and you get two to three responses and you'll close basically anyone who responds. So, let's just say let's get really conservative here and say that you close

[1:34:55] one out of a hundred hundred emails. Yeah, sure. Okay, great. So, one out of a hundred emails. Okay, and what's the cost of a machine? About 15,000. But again, we're not in the we're we don't have any issue finding them. 15,000. Okay, what do you make on a 15,000 machine up front? 50 50%.

[1:35:16] Okay. Dude, I love this business. Okay, got it. All right, so then what stops you from sending 10,000 emails a day? One of the things I'm working on. I'm working on doing that and building up cold calling funnels. And building a cold calling busi- uh side? Is that what you said? Yeah, yeah, exactly. Those are the two

[1:35:36] that that work the best. Yeah. I mean like this is a great business. I love this business. Okay, like what I'm like like what How can I help? Like you're like I send a hundred emails, which takes two seconds, and I make seventy-five hundred dollars. Um Yeah. You know, that that is, you know, something that's a lot easier. So, my main focus has been for the past couple weeks has been the cold calling aspect. How do you bring people on? How do you train them to do this? I watched a video yesterday you made. It was like an hour long presentation about like BDRs to like the

[1:36:17] ratio of those people to sales people. Can you kind of like just walk me through like the setup you would have for something like this? Cuz right now our sales people control the entire funnel. We find a lead, they contact them, and then it's messy. I think people kind of uh there's not enough things in the pipeline because people are busy closing

[1:36:35] deals essentially. Yeah. I mean, I I've I mean, the I everything is good, man. That you just have a you have a process that works and you haven't scaled it up yet. I mean, the returns on this are stupid. They make it's insane. It's ridiculous. Right. So, like you're winning. It's like you got to hire some head count. Okay. It's like every SDR can probably bring like I mean, my god, dude. Like

[1:37:09] I mean, this is absurd. I don't even know what to I don't even know what to do. Like What was your We have your number. I'm going to follow up on this one cuz this is this is an interesting one. Um Like I I don't even know I don't even know where to start, man. It's like it's it's I mean, we just have to you like you have to warm up domains. You have to have multiple domains. We have to send We have to get to a thousand emails a day. We're going to inbound twenty-ish qualified leads. Those twenty-five qualified leads are going to talk to one

[1:37:35] setter. And you can have one closer. Like you don't need Like you don't even need to have an army to to make this thing make crazy money. Like if you had a team of five Let's say Let's say you had a team of four setters, one closer from this model Like four setters like I mean, Jesus. Four setters, you could get to 10,000

[1:37:55] emails a day. So, you get a hundred leads a day. so okay. Yeah. I'm glad you said that. So, this is Sorry, if you if you want to keep going, I apologize. You're good. I have three minutes. Okay, so I think our problem is it's the opposite. We have four closers and we actually only have a single setter.

[1:38:11] Well, then they got to work their leads. Yeah, they they hunt their own food so to speak is what we said. No, but I'm saying like you you need to basically Let me say it this way. They have to hunt their leads. You can hand them some leads that you generate from email outbound.

[1:38:27] Awesome. And do it as a round robin, first come first serve, first person who grabs it as soon as you put it in. So, would you hire someone specifically for outbound for email and calls, same person? Like how would you go about growing that? Like the pipeline itself at the very beginning. Well, the thing is is that right now given the si- like if the close rate on these deals is already so high, you could have the closers just work these leads. So, basically everything that's email inbound, just hand them straight to a closer and boom, they close the deal, right? That's all it is. Now, they

[1:38:56] still have to work their phones and and go get deals for themselves, and that's fine. Like our closers still do two hours outbound every day cuz it keeps the the sword sharp, and it keeps them appreciating the leads that we send Interesting. Interesting. Okay. Now, SDRs though, dude, I mean, you could get a list of just business owners, work that, and there's also I mean right now there's the AI dialers are are getting exceptionally good, especially for this type of thing. But

[1:39:22] you could even do this old school. Sorry?

[1:39:31] Yes, they're very good. And so like I mean fundamentally either you're going to sell SDR team or you can sell have an AI SDR team. Um but like dude you have so much opportunity dude. That's all I'm saying. Like you have so much opportunity. You have four sales guys. I would like my immediate next action cuz I'm only going to give you one and I do

[1:39:47] have to go. Is that I would go from 100 emails to 1,000 emails. 10,000 would be 100 x you have four guys. That'd be 25 leads per guy per day. I'd probably cut that in half just cuz there it's new process whatever. So let's get to I'd say I'd say I'd go to 5,000 emails a day instead of 100. That's what I would focus on. I hope that'd be all my focus is how do we go

[1:40:11] from 100 to 5,000 emails a day? Huh? No, I would do it. You can automate most of this stuff. You don't need them to do it. It can come from their account but they're not doing it. That's it. You literally need high-level email automation with some AI personalization on the front end, warm up the domain, set up multiple names, one for each guy, probably have backups as well, to send the emails to them. Each guy gets 10ish plus leads a day from these emails, closes six, and you're you're at

[1:40:44] dude you're at I don't know. A lot. Okay, copy that. I appreciate it. I know you got to go. Fantastic. This is a great talk. Congratulations on Robo Robo Robo Candy. Sure that's you then. All right, later man. Bye. All right, that was our Mosey Hotline. I got to take Q&A's in person now cuz I'm here at my headquarters and I got bunch of entrepreneurs downstairs. So appreciate you all. Hope you enjoy the front end and um peace and blessings be upon you. Rock

[1:41:15] and roll. Provide value and uh don't break the law. Bye.

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